Last Update: April 1, 2024

Lion Corporation
Masayuki Takemori,
Representative Director,
President and Executive Officer
Contact: Corporate Planning Department+81-03-6739-3711
Securities Code：4912
https://www.lion.co.jp/en/

The corporate governance of Lion Corporation is
described below.

Ⅰ. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information
1. Basic Views
Lion’s top priorities for corporate governance are to increase management transparency, strengthen supervisory functions,accelerate decision making and ensure compliance. By strengthening and enhancing its corporate governance system, Lion
aims to increase its corporate value.
*Please refer to the Lion Corporation Basic Corporate Governance Policy, which sets forth the Company's basic
approach to corporate governance and its basic policies, posted on Lion's website.
https://www.lion.co.jp/en/company/pdf/cg_policy_e.pdf[Reasons for Non-compliance with the Principles of the Corporate Governance Code]
The Company complies with all the principles of the Corporate Governance Code.
[Disclosure Based on the Principles of the Corporate Governance Code]Updated(Principle 1.4 Cross-Shareholdings)
Lion may maintain cross-shareholdings with other companies only when it has judged that they are strategically importantfor such purposes as maintaining and strengthening trade relationships. The Board of Directors examines the economic
rationality of cross-shareholdings on an annual basis, checking the investment profitability, capital cost and other factors
for each stockholding. Based on the results of these examinations and such factors as the importance of the relevant traderelationships, shareholdings determined to be unnecessary are then sold as appropriate, reducing Lion’s crossshareholdings.
The voting rights associated with strategically held shares may be exercised based on comprehensive consideration that
includes the improvement of Lion’s corporate value over the medium to long term and the common interest of Lion’s
fellow shareholders.
(Principle 1.7 Related Party Transactions)
When a director engages in a transaction on behalf of himself or a third party with Lion that presents a potential
conflict of interest, the transaction must be approved by the Board of Directors, in accordance with the Companies
Act and the rules of the board. Furthermore, transactions between Lion and directors, major shareholders or otherrelated parties are disclosed in line with the Companies Act, the Financial Instruments and Exchange Act and theTokyo Stock Exchange’s timely disclosure rules.
(Supplementary Principle 2.4.1 Ensuring Diversity in the Promotion of Core Human Resources)
Please refer to “III Implementation of Measures for Shareholders and Other Stakeholders: 3. Measures to Ensure Due
Respect for Stakeholders: Other.”(Principle 2.6 Role of Corporate Pension Fund as Asset Owner)
To ensure the payment of pension payments and lump-sum payments into the future, Lion’s corporate pension fundmanages its pension assets with the aim of securing the necessary total returns over the long-term. To ensure the soundmanagement of the pension fund, Lion assigns personnel from accounting, finance and other relevant divisi ons who
have the appropriate qualities to manage corporate pensions to monitor the entrusted assets.
Furthermore, the membership of the board of representatives that serves as the decision-making body for the
corporate pension fund is divided equally between Company appointees and representatives of the corporate pension
fund beneficiaries elected from among themselves, thereby creating a framework for appropriately managing any
conflict of interest that may arise between the corporate pension fund beneficiaries and the Company.

-1-

(Principle 3.1 Full Disclosure)(1) Corporate Philosophy, Management Strategy and Management Plan
Lion will strive to disclose the progress of its management vision, basic strategies and medium-term management planin an easy-to-understand manner to all stakeholders, including shareholders and investors.
Vision2030 Long-Term Strategic Framework◇Management Vision
Becoming an advanced daily healthcare company
We will realize healthy minds and bodies for all by creating new customer experiences to make everyday habits morenatural, easy and enjoyable.
By further evolving and developing its efforts to redesign habits— a form of healthcare Lion is uniquely positioned toaddress—Lion aims to contribute to the realization of a sustainable society and enhance its corporate value.
◇Three Growth Strategies(1) Accelerate Growth in Four Fields of Value Creation
The Lion Group will offer healthcare that it is uniquely positioned to provide to more consumers, mainly in Asia.
By doing so, the Group aims to make a difference in diverse aspects of daily living and, as a result, accelerate its
business growth and enhance its presence in Asia.
The Lion Group’s Growth Drivers: Four Fields of Value Creation
 Oral Health
Promoting oral healthcare that supports overall health and QOL from the mouth outward.
 Infection Control
Becoming a hygiene solution provider by addressing all kinds of risk related to infectious disease.
 Smart Housework
Creating new housework habits for diverse lifestyles.
 Well-Being
Becoming a total healthcare servicer for the mind and body.
(2) Transform Our Business Foundations for Growth
We will promote business foundation transformation that will spur growth by continuing and reinforcing strategic
investment.

Digital transformation (DX）
Reinforce business infrastructure(3) Generate Dynamism to Realize Innovative Change
We aim to transform to realize sustainable growth.
Corporate brandingProfessional fulfillment reforms

 Diversity & inclusion◇Reinforcing Initiatives to Address the Sustainability Material Issues
With creating healthy living habits and promoting environmental initiatives for a sustainable planet as our top-priority material
issues, we will reinforce sustainability initiatives that realize synergies with our growth strategies.
(1) Creating Healthy Living Habits
Through inclusive oral care*1 and other approaches, we will contribute to health, comfort and cleanliness in everyday living
and longer healthy life expectancy.
*1. Activities aimed at reducing health disparities through oral care.
(2) Promoting Environmental Initiatives for a Sustainable Planet
To address global-scale environmental problems, we will work with all stakeholders as we accelerate initiatives aimed at therealization of a decarbonized, resource-circulating society.
◇Envisioned Financial Performance in 2030
Approx. ¥600 billion
・Consolidated net sales(Approx. 50% from the Overseas Business)
Approx. ¥80 billion
・EBITDA*2
3
Approx. ¥50 billion
・Core operating income*4
8–12%
・Return on invested capital (ROIC)*
10–14%
・Return on equity (ROE)*2. EBITDA is an indicator of profitability on a cash basis by calculated as the sum of core operating income and depreciation
and amortization (excluding that of right-of-use assets).
*3. Core operating income is a profit indicator the Company uses to measure regular business performance and is calculated
as gross profit minus selling, general and administrative expenses.
*4. ROIC is an indicator calculated as net operating profit after tax (NOPAT) divided by the average invested capital (total
equity plus interest bearing liabilities) during the period. ROIC measures the efficiency and profitability of the invested
capital.

-2-Vision2030 1st STAGE Medium-Term Management Plan
Working toward the achievement of Vision2030, Lion plans to establish three consecutive three-year medium-term
management plans, advancing strategy adapted to changes in the management environment.
Theme: Shift gears toward accelerated growth
1. Implement growth strategies and transform the management base to grow while accelerating transformation.
・Seek returns from up-front investment
・Reinvest in future growth
2. Reinforce ROIC management to enhance management control
1st STAGE initiatives◇Advance growth strategies(1) Accelerate growth in four fields of value creation
・Secure profit opportunities by evolving existing businesses and creating new businesses in the four fields of value
creation・Maintain rapid growth in China and enter two or more new countries or areas
・Expand social contribution by promoting environmentally friendly habits(2) Transform our business foundations for growth・Reinforce business foundation and systems infrastructure, and accelerate DX to streamline operations
・Enhance the sophistication of business management
・Develop a sustainable SCM platform and accelerate the implementation of sustainability strategy(3) Generate dynamism to realize innovative change・Improve employee engagement through the Lion Professional Fulfillment Reforms and other initiatives
・Expand investment in personnel development and human capital (DX/Global/New businesses)◇Initiatives to Address the Sustainability Material Issues(1) Creating healthy living habits
Through inclusive oral care and other approaches, we will contribute to health, comfort and cleanliness in everyday
living and longer healthy life expectancy.
(2) Promoting environmental initiatives for a sustainable planet
・We will contribute to the realization of a decarbonized, resource-circulating society by promoting the formation ofenvironmentally friendly habits together with consumers.
・We will work with other industry actors and companies to develop water-saving habits, power-saving habits, refill
habits and waste-free habits*5 that reduce environmental impact in the home, both in Japan and the rest of Asia.
*5. Creating habits to realize resource recycling through advanced recycling initiatives (infrastructure development,
recycling technology, etc.)◇Cash Allocation
We expect to obtain more than ¥120 billion in cash over the three years of the plan, of which more than ¥80 billion will be
used for future strategic investment and more than ¥30 billion will be returned to shareholders through dividends and theacquisition of treasury stock.
◇Consolidated Performance Targets¥420 billion
・Net sales¥52 billion
・EBITDA¥32 billion
・Core operating income¥32 billion
・Operating profit
Approx. 7.5%
・Return on invested capital (ROIC)
Approx. 9.0%
・Return on equity (ROE)◇Shareholder Returns
・We aim to maintain a consolidated payout ratio of approximately 30% and to increase dividends annually over the three
years of the plan.
・Treasury stock acquisition will be carried out flexibly.
Corporate slogan: “life.love.”(2) Basic Stance and Basic Policy on Corporate Governance
Please refer to "1. Basic Views" above.
(3) Policies and Procedures for Determining Corporate Officer Compensation
The Company maintains a corporate officer compensation system designed to provide the sound and appropriate incentives
necessary to retain outstanding management talent in order to realize the Company’s management policies and continuously
increase its corporate value over the medium and long term.
For details, please refer to "1. Organizational Composition and Operation" and "Disclosure of Policy on Determining
Remuneration Amounts and Calculation Methods" in "Ⅱ. Business Management Organization and Other Corporate
Governance Systems regarding Decision-making, Business Execution and Management Oversight.”-3-(4) Composition of the Board of Directors, Policies and Procedures for Nominating Candidates for Director and Audit &Supervisory Board
To ensure speedy decision making, the Articles of Incorporation specify that the Board of Directors shall comprise no morethan 11 members. To improve the effectiveness of the board’s oversight function, at least one third of its members are
external directors.
To ensure a good balance of candidates for directors and Audit & Supervisory Board members who possess thediverse knowledge, experience and abilities needed to increase Lion’s corporate value, Lion has establishe d
Director/Audit & Supervisory Board Member Candidate Selection Standards* 1 as well as Standards Regarding theIndependence of External Directors/Audit & Supervisory Board Members.*1 The Board of Directors selects
candidates who meet the criteria of the above standards and consults with the Nomination Advisory Committee* 2 onthese candidates. Based on the committee’s response, the board selects candidates to propose for appointment to the
Shareholders Meeting.
*1. Please refer to the Lion Corporation Basic Corporate Governance Policy (Reference 2 and Reference 3).
https://www.lion.co.jp/en/company/pdf/cg_policy_e.pdf*2. The Board of Directors consults the Nomination Advisory Committee regarding the necessary qualities, reasons forselection or dismissal and related processes for nominating directors, Audit & Supervisory Board members andexecutive officers as well as hiring individuals who have previously served in these roles as consultants. The
committee considers the matters in question and provides a response to the Board of Directors (or, for mattersregarding Audit & Supervisory Board members, to the Audit & Supervisory Board). The committee also
exchanges opinions on the development of future Group presidents. The committee consists of Representative
Directors predetermined by the Chairman of the Board of Directors and external officers. The committee’schairperson is elected from among the external officers within the committee.
(5) Reasons for Selection of Candidates for Directors and Audit & Supervisory Board Members
Based on the deliberations of the Nomination Advisory Committee, which consists mainly of external directors andexternal Audit & Supervisory Board members, and the resolutions of the Board of Directors, the reasons for eachdirector or Audit & Supervisory Board member candidate’s selection are provided in the convocation notice of each
Shareholders Meeting and discussed at the Annual Meeting of Shareholders.
(Supplementary Principle 3.1.3 Initiatives on Sustainability and Investments in Human Capital and Intellectual
Properties)(1) Initiatives on Sustainability
In line with the Vision2030 long-term strategic framework, Lion strives for a sustainable society and its businessgrowth via the synergetic promotion of its Sustainability Material Issues and growth strategies.
Please refer to the “Sustainability” section of the Integrated Report for details of Lion’s sustainability initiatives.
https://www.lion.co.jp/en/ir/pdf/ar/ir2023.pdf(2) Investments in Human Capital
As part of growth strategies under Vision2030, the Lion Group aims to “generate dynamism to realize innovativechange” and, to this end, strives to empower all employees to inspire one another in the course of pursuing personal
growth and to realize their full potential as autonomous individuals so that they together act as a dynamictransformative force throughout the Company’s organization
Lion supports every individual’s professional fulfillment by promoting various initiatives, including opportunities forindependent learning and autonomous career development, encouragement of healthy living habits and implementing
flexible working styles. The Company’s organizational ability to execute its strategies is achieved through flexible
position management that appropriately allocates human resources in response to management issues, and this ability
will be enhanced by personnel management by job category to secure and develop highly skilled human resources.
Through these initiatives, Lion encourages each individual’s dynamism and utilize their abilities across theorganization, thereby linking the growth of its human resources to enhancing corporate value.
Please refer to the Securities Report and the Company’s website for details on investment in human capital.
https://www.lion.co.jp/en/ir/library/securities/
https://www.lion.co.jp/en/sustainability/employee/(3) Investments in Intellectual Properties
Lion’s basic policy regarding intellectual property is set forth in its Behavioral Guidelines. These stipulate that the Compa ny
will strive to create, properly protect and actively utilize intellectual property, and that it will respect the int ellectual propertyof others and not seek to improperly acquire or use it. Moreover, Lion has established a dedicated intellectual property
department to coordinate investment in intellectual property with its management strategy under the supervision of the Boardof Directors and ensure the proper use of intellectual property rights. Since its founding, Lion has pioneered marketing
focused on sound as a form of branding that is memorable to customers. Today, Lion boasts the most sound trademarks ofany company in Japan. This level of organizational effectiveness is what enables the Company to contribute to the creationof better living habits.
Please refer to the Company’s website for details about the Company’s initiatives related to intellectual property.
https://www.lion.co.jp/en/company/governance/ip/-4-(4) Disclosure Based on the TCFD Framework
From October 2019 to January 2020, Lion took part in the Ministry of the Environment’s Project to Analyze Scenarios of Climate
Risks and Opportunities in Accordance with TCFD, evaluating the financial impact on its operations of climate-related risks andopportunities. In 2022, Lion expanded the scope of its analyses to encompass businesses, communities, product categories andsupply chains, developing them into full-scenario analyses.
< Analysis Results >4.0C Scenario
・ The Company recognizes that increased cost of fossil fuel-derived raw materials is a major risk. Lion is already advancing
efforts to replace such raw materials with plant-based materials and reinforcing other efforts aimed at decarbonization.
・ To address rising physical risks, such as those of floods and water stress, we are advancing such efforts as reinforcing business
continuity planning and supply chain data coordination.
・ In terms of opportunities, the markets in such areas as products related to infection prevention and laundry are expected togrow, so we are working to develop related products and reinforce related services.
Lion will continue to explore growth opportunities in the fields of inclusive oral health and infection control—areas of strengthfor Lion—to address the increase in the risk of the spread of infectious disease.
1.5C Scenario
・ The increased cost of plastic-, aluminum- and palm oil-derived raw materials and packaging is a major risk. Lion is alreadyadvancing initiatives to reduce such risk, including reducing the use of petroleum-derived plastic and procuring RSPO-certified
palm oil and palm kernel oil derivatives.
・ In terms of opportunities, we expect substantial expansion in demand for environmentally friendly products, presenting thepotential for business expansion by increasing offerings of products that meet the Lion eco-standard. In addition to these efforts,
we are exploring other ways of securing opportunities for further growth. These include the development of technologies suited
to the growth of sustainable fashion and other lifestyle changes as well as expanding the supply of electro-conductive carbon,
which will be necessary for the development of decarbonized transportation, including the spread of electric vehicles.
The Lion Group has been advancing its responses to each scenario, but will continue to focus its management efforts on further
strengthening its resilience to change.
*Please see “The Lion Group’s Response to the TCFD” section on the Company’s website for further details.
https://www.lion.co.jp/en/sustainability/env/ecovision2020/#tcfd_response(Supplementary Principle 4.1.1 Overview of the Scope of Delegation to Management)
The Board of Directors carries out the duties specified by law and the Articles of Incorporation, decides important matters related
to the Group’s business execution and oversees the execution of the duties of directors and executive officers. Such importantmatters as Group-wide management policy and strategy are considered by the Executive Management Board, which determines
their general outline, before being taken up by the Board of Directors for a final decision. Important matters related to businessexecution by individual departments are delegated to the Executive Management Board and the Executive Committee for more
speedy decision making. To clarify responsibility and authority for decision making, Lion has established standards of authoritythat lay out which items are decided by the Board of Directors, which are decided by the Executive Management Board andwhich are decided by the Executive Committee.
(Principle 4.9 Independence Requirements for Independent External Directors)
In order to further enhance management supervision and oversight functions, increase transparency and strengthen andenhance its system of corporate governance, Lion has established Standards Regarding the Independence of External
Directors/Audit & Supervisory Board Members. In combination with the stipulations of the Companies Act, these standards
are used to ensure that external directors and external Audit & Supervisory Board members have no special interest in theGroup and are independent.
* Please refer to the Lion Corporation Basic Corporate Governance Policy (Reference 3).
https://www.lion.co.jp/en/company/pdf/cg_policy_e.pdf(Supplementary Principle 4.10.1 Views on the Independence of the Members of Nominating and Compensation Committees)
Please refer to “II Business Management Organization and Other Corporate Governance Systems Regarding Decision-making,Business Execution and Management Oversight: 1. Organizational Composition and Operation: Voluntary Establishment ofCommittee(s) Corresponding to Nomination Committee or Remuneration Committee: Committee’s Name, Composition, andAttributes of Chairperson” and “Supplementary Explanation.”(Supplementary Principle 4.11.1 Views on the Balance of Knowledge, Experience, and Ability, Diversity, and Size of the Boardof Directors as a Whole and the Combination of Skills Possessed by Directors)
Please refer to “(Principle 3.1 Full Disclosure) (4) Composition of the Board of Directors, Policies and Procedures for
Nominating Candidates for Director and Audit & Supervisory Board” above. Also, please refer to Lion’s website for theCompany’s views on skills that must be possessed by its Board of Directors as a whole in order to secure candidates equippedwith diverse knowledge, experience and abilities in a balanced manner.
https://www.lion.co.jp/en/company/officer/-5-

(Supplementary Principle 4.11.2 Status of Concurrent Positions Held by External Directors and External Audit & Supervisory
Board Members at Other Listed Companies)
Any concurrent positions held at other listed companies by an external director or external Audit & Supervisory Board member
are stated in the reference documents for the Annual Meeting of Shareholders and the Business Report.
(Supplementary Principle 4.11.3 Evaluations of the Board of Directors)
In accordance with the Lion Corporation Basic Corporate Governance Policy, the Company strives to ensure theeffectiveness of the Board of Directors. Every fiscal year, the board conducts evaluations related to such areas as theboard’s operating methods and the content and status of the proposals it considers. These evaluations include examinationsof each director. A summary of the results of these evaluations is disclosed in the Corporate Governance Report.
An anonymous self-assessment survey regarding the Board of Directors was conducted among all directors and Audit &Supervisory Board members as well as executive officers who regularly attended Board of Directors meetings held in 2023.
Please refer to Reference 1 (“Decisions Reached and Information on Financial Results Pertaining to the Company”) for asummary of their assessment of the effectiveness of the Board of Directors.
(Supplementary Principle 4.14.2 Training Policy for Directors and Audit & Supervisory Board Members)
After directors and Audit & Supervisory Board members are appointed, Lion provides them with information andopportunities for training and learning in such areas as law, business, finance and company organization as necessary
to sustainably carry out the roles and responsibilities expected of them. If this includes participation in externalseminars, Lion covers related costs.
Lion conducts ongoing compliance education, which serves to both confirm the status of compliance with theLion Group Charter for Corporate Behavior and renew participants’ commitment to the charter. In addition, Lion
invites outside instructors to provide training related to corporate governance as needed.
When external directors and external Audit & Supervisory Board members take office, Lion sets up opportunities
to explain such matters as its corporate motto, corporate philosophy, business content, organizational structure andsystem of corporate governance, and these learning opportunities are made continually available thereafter.
(Principle 5.1 Policy for Constructive Dialogue with Shareholders)
Recognizing its shareholders and investors as important stakeholders, Lion strives to foster constructive dialogue inorder to improve corporate value. Lion has designated the IR and SR Office within the Corporate Planning
Department as responsible for shareholder relations and works to enhance the Shareholders Meeting. In addition, theofficer responsible for the Corporate Planning Department holds meetings with domestic and overseas institutional
investors, among other activities. The General Affairs Department and Investor Relations Office of the Corporate
Planning Department are each managed by a designated responsible director and coordinate as needed with otherrelated divisions, including those of other departments. Input garnered from dialogue with shareholders and investors
is organized and reported to Lion’s president as needed.
Lion actively implements investor relations activities. These include providing opportunities for meetings withinstitutional and individual investors attended by the president and directors, including the director responsible for the
Corporate Planning Department, as well as external directors, in addition to Audit & Supervisory Board members.
Regarding the management of insider information in dialogue with shareholders and investors, Lion maintains strictly
appropriate, timely disclosure in line with its IR Information Disclosure Policy.*
Lion works to understand the composition of its shareholders by implementing annual identification surveys of thebeneficial shareholders who cannot be identified by the names listed in the shareholder registry, such as institutional investors
that hold shares under the name of a trust bank. In the event that such institutional investors or other beneficial shareholders
request to exercise their voting rights at a Shareholders Meeting, Lion considers its response utilizing such resources as the
Zenkabukon’s Guideline on Attendance at the General Shareholders Meetings of Japanese Listed Companies by Global
Institutional Investors.
*Please refer to the Lion Corporation Basic Corporate Governance Policy (Reference 5).
https://www.lion.co.jp/en/company/pdf/cg_policy_e.pdf(Measures to Realize Management with Awareness of Cost of Capital, Disclosed in English)
To realize management with awareness of cost of capital and stock prices, Lion has set its long-term strategic framework,
Vision2030, as its vision for performance in 2030 for ROIC and ROE, and we have set consolidated performance targets for the
fiscal year ending December 31, 2024 in the Vision2030 1st STAGE medium-term management plan. The Company also
discloses its annual results in financial statements and other documents. Vision2030 is published in Principle 3.1 Full Disclosurein “Disclosure Based on the Principles of the Corporate Governance Code,” and on the Company’s website for further details.
https://www.lion.co.jp/en/company/vision/-6-

2. Capital Structure
Foreign Shareholding Ratio Updated

From 10% to less than 20%[Status of Major Shareholders] Updated
Name/Company Name
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. As trustee for Mizuho Bank, Ltd. Retirement
Benefit Trust Account re-entrusted by Mizuho Trust and Banking Co., Ltd.
MUFG Bank, Ltd.
STATE STREET BANK AND TRUST COMPANY 505223
Tokio Marine & Nichido Fire Insurance Co., Ltd.
Meiji Yasuda Life Insurance Company
Toyota Tsusho Corporation
Mitsubishi UFJ Trust and Banking Corporation
STATE STREET BANK AND TRUST COMPANY 505103
Controlling Shareholder (except for
Parent Company)―――

Parent Company

None

Number ofPercentage (%)
shares owned
39,303,300
13.78
24,262,700
8.51
8,282,000

2.90

7,076,844
5,881,383
4,450,659
3,690,558
3,506,000
3,500,000
3,205,701

2.48
2.06
1.56
1.29
1.22
1.22
1.12

Supplementary Explanation―――
3. Corporate Attributes
Listed Stock Market andMarket Section

Tokyo Stock Exchange

Fiscal Year-End

DecemberType of Business

Chemicals

Number of Employees (consolidated)
as of the End of the Previous Fiscal
Year

More than 1,000First Section

Sales (consolidated) as of the End of
the Previous Fiscal Year

From ¥100 billion to less than ¥1 trillion

Number of Consolidated Subsidiaries
as of the End of the Previous Fiscal
Year

From 10 to less than 50

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder―――
5. Other Special Circumstances That May Have Material Impact on Corporate Governance
―――

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Ⅱ. Business Management Organization and Other Corporate Governance Systems Regarding Decision-making, Business
Execution and Management Oversight
1. Organizational Composition and Operation
Organization Form

Company with Audit & Supervisory Board[Directors]
Maximum Number of Directors
Stipulated in Articles of Incorporation

11

Term of Office Stipulated in Articles of 1 year
Incorporation
Chairperson of the Board

Chairman of the Board (except when concurrently serving as president)

Number of Directors

11

Appointment of External Directors

Appointed

Number of External Directors

4

Number of External Directors That Are 4
Independent Directors
External Directors’ Relationship with the Company (1)NameAttribute

Kazunari Uchida
Takashi Shiraishi
Takako Sugaya
Reiko Yasue

Scholar
Scholar
Attorney
From another company

Relationship with the Company*a b c d e f g h i

j

k

○

* Categories for “Relationship with the Company”* “○” when the director presently falls or has recently fallen under the category;“△” when the director fell under the category in the past
* “●” when a close relative of the director presently falls or has recently fallen under the category;“▲” when a close relative of the director fell under the category in the pasta. Executive of the Company or its subsidiaries
b. Non-executive director or executive of a parent company of the Company
c. Executive of a fellow subsidiary of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the Company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property fromthe Company besides compensation as a director/Audit & Supervisory Board member (kansayaku)
g. Major shareholder of the Company (or an executive of said major shareholder if the shareholder is a legal entity)
h. Executive of a client or supplier company of the Company (other than d, e or f above), but not including close relatives(only the director himself/herself)
i. Executive of a company with external directors/Audit & Supervisory Board member (kansayaku) that are mutually
appointed at the Company as well (only the director himself/herself)
j. Executive of a company or organization that receives a donation from the Company (only the director himself/herself)
k. Others-8-External Directors’ Relationship with the Company (2)NameUpdatedDesignation as
Supplementary Explanation
Independent Directorof the Relationship

Kazunari Uchida○―――

Takashi Shiraishi

○

―――

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Reasons for Appointment and
Designation as External Director
Kazunari Uchida possesses experience as theJapan representative of an international
management consulting group and also has
experience at other companies both as an external
director and an external corporate auditor. He has
actively participated in meetings of the Board of
Directors and suitably carried out his role as anexternal director for the Company, including
supervising business execution. The Company
expects that he will continue to fulfill the roles
above and judges that his sophisticatedunderstanding of management decision making isnecessary to enhance the transparency ofmanagement and further strengthen the oversightof the Board of Directors.
[Designation as External Director]
The Company has determined that he meets therequirements set forth in the “Lion Corporation
Standards Regarding the Independence ofExternal Directors/Audit & Supervisory Board
Members” as well as the requirements forindependent directors set forth by the Tokyo
Stock Exchange. He is, therefore, deemedsufficiently independent from management andhas been duly appointed as an independent
external director.
Takashi Shiraishi has managerial experience as
the president of a national university, has served
as the president of the Japan External Trade
Organization’s Institute of Developing Economies
and possesses broad-ranging expert knowledge insuch areas as Asian politics, economics and social
issues. He has actively participated in meetings ofthe Board of Directors and suitably carried out hisrole as an external director of the Company,
including supervising business execution. The
Company expects that he will continue to fulfill
the roles above and judges that his sophisticatedunderstanding of management decision making isnecessary to enhance the transparency ofmanagement and further strengthen the oversightof the Board of Directors.
[Designation as External Director]
The Company has determined that he meets therequirements set forth in the “Lion Corporation
Standards Regarding the Independence ofExternal Directors/Audit & Supervisory Board
Members” as well as the requirements forindependent directors set forth by the Tokyo
Stock Exchange. He is, therefore, deemedsufficiently independent from management andhas been duly appointed as an independent
external director.

Takako Sugaya○

Reiko Yasue○

Voluntary Establishment ofCommittee(s) Corresponding toNomination Committee orRemuneration Committee

Takako Sugaya is not involved in corporate
management outside the roles of external director
and external Audit & Supervisory Board member,but she possesses a wealth of knowledge andexperience as an attorney, mainly in corporate
legal work, as well as experience as an external
director and external Audit & Supervisory Board
member at other companies. She has actively
participated in meetings of the Board of Directors
and suitably carried out her role as an external―――
director of the Company, including supervisingbusiness execution. The Company expects that
she will continue to fulfill the roles above andjudges that her sophisticated understanding ofgovernance and compliance issues is necessary toenhance the transparency of management andfurther strengthen the oversight of the Board of
Directors.
[Designation as External Director]
The Company has determined that she meets therequirements set forth in the “Lion Corporation
Standards Regarding the Independence ofExternal Directors/Audit & Supervisory Board
Members” as well as the requirements forindependent directors set forth by the Tokyo
Stock Exchange. She is, therefore, deemedsufficiently independent from management andhas been duly appointed as an independent
external director.
In addition to having corporate management
experience as the CEO of an IT company inJapan, Reiko Yasue has a wealth of knowledge
and experience in international business and also
Ms. Reiko Yasue retired
has experience serving as an external director atfrom the position ofanother company. She has actively participated inpresident and executive
officer of Cybernet Systems meetings of the Board of Directors and suitably
Co. Ltd. on March 14, 2024. carried out her role as an external director of theLion conducts transactions Company, including supervising businessexecution. The Company expects that she will
related to software
maintenance with Cybernet continue to fulfill the roles above and judges that
Systems, and the amount of her sophisticated insight into the field of IT issuch transactions is less than necessary to enhance the transparency ofmanagement and further strengthen the oversight
0.1% of the Company's
consolidated net sales for the of the Board of Directors.
most recent fiscal year.
[Designation as External Director]
The Company has determined that she meets therequirements set forth in the “Lion Corporation
Standards Regarding the Independence ofExternal Directors/Audit & Supervisory Board
Members” as well as the requirements forindependent directors set forth by the Tokyo
Stock Exchange. She is, therefore, deemedsufficiently independent from management andhas been duly appointed as an independent
external director.

Established

Committee’s Name, Composition, and Attributes of Chairperson- 10 -

Committee’s Name
Committee
Corresponding to Nomination
Nomination
Advisory
Committee
Committee
Committee
Corresponding to Compensation
Remuneration
Advisory
Committee
Committee
Supplementary Explanation

All
Full-time
Committee
Members
Members

Internal
Directors

External
Directors

External
Experts

Other

Chairperson

8

0

1

4

0

3

External
director

7

0

0

4

0

3

External
director

Updated

The three members in the “Other” category of both committees are external Audit & Supervisory Board members.
[Nomination Advisory Committee]
On June 30, 2016, the Company established the Nomination Advisory Committee, which consists of external directors andrepresentative directors determined in advance by the Chairman of the Board of Directors, in order to enhance objectivity
and transparency in the selection process of the Company's directors, Audit & Supervisory Board members, executive
officers and advisors who have previously served in these roles.
The Board of Directors consults the Nomination Advisory Committee, which deliberates on inquiries from the Board of
Directors regarding the necessary qualities, reasons for selection or dismissal and related processes for nominating
directors, executive officers and advisors. For Audit & Supervisory Board member inquiries, the committee consults with
the Audit & Supervisory Board. The committee also exchanges opinions on the development of future Group presidents.
The committee consists of 8 members: external directors Mr. Takashi Shiraishi (committee chairman), Mr. Kazunari Uchida,
Ms. Takako Sugaya and Ms. Reiko Yasue; as well as external Audit & Supervisory Board members Ms. Atsuko Suzuki, Mr.
Masatoshi Matsuzaki and Ms. Akemi Sunaga; in addition to Mr. Masazumi Kikukawa, Chairman of the Board of Directors.
[Compensation Advisory Committee]
On December 27, 2006, the Company established the Compensation Advisory Committee, which consists solely of external
directors and external Audit & Supervisory Board members who qualify as independent, in order to increase the objectivity
and transparency of director, Audit & Supervisory Board member, executive officer and advisor compensation.
The committee deliberates on the compensation system, standards and bonus assessment methods for directors, Audit &Supervisory Board members, executive officers and advisors upon consultation from the Board of Directors, and reports to
the Board of Directors (or to the Audit & Supervisory Board regarding Audit & Supervisory Board member compensation).
Based on the committee’s report, the compensation system for directors, Audit & Supervisory Board members, executive
officers and advisors was revised in the fiscal year ended December 31, 2017, following a resolution at the 156th Annual
Meeting of Shareholders held on March 30, 2017. In addition, the Compensation Advisory Committee met in December
2020 and deliberated on the renewal of stock-based compensation and the revision of the Basic Policy on Corporate Officer
Compensation in consultation with the Board of Directors, and submitted its report to the Board of Directors.
For director, Audit & Supervisory Board member, executive officer and advisor compensation in 2023, a resolution wasmade at the Board of Directors meeting held in March 2023 based on the report of the Compensation Advisory Committee
meeting held in February 2023 regarding fixed monthly compensation. A resolution regarding performance-linked
compensation was adopted at the Board of Directors meeting held in March 2024 based on the report of the Compensation
Advisory Committee meeting held in February 2024.
The committee consists of 7 members: external directors Mr. Kazunari Uchida (committee chairman), Mr. Takashi
Shiraishi, Ms. Takako Sugaya and Ms. Reiko Yasue; as well as external Audit & Supervisory Board members Ms. Atsuko
Suzuki, Mr. Masatoshi Matsuzaki and Ms. Akemi Sunaga.
[Audit & Supervisory Board Members]
Establishment of Audit & Supervisory
Board

Established

Maximum Number of Audit &Supervisory Board Members Stipulated
in Articles of Incorporation

5

Number of Audit & Supervisory Board
Members5- 11 -

Cooperation among Audit & Supervisory Board Members, Accounting Auditors and Internal Audit Departments

The Audit & Supervisory Board members receive reports from Ernst & Young ShinNihon LLC on each of the following
matters, and engage in question-and-answer sessions and exchange opinions from a risk management perspective in order
to collaborate effectively.
1. Status of systems to ensure that accounting auditors perform their duties properly, audit plan and audit system based on
the Companies Act and the Financial Instruments and Exchange Act
2. Auditor compensation
3. Quarterly review results
4. Accounting audit results (including internal controls implemented as part of the accounting audit process)5. Results of audits of the Securities Report and report on internal control over financial reporting
The Audit & Supervisory Board members exchange information and collaborate with the Auditing Office, which is theCompany’s internal auditing division, on each of the following matters from a risk management perspective.
1. Respective audit plans of the Auditing Office and the Audit & Supervisory Board members
2. Results of legality, validity, and efficiency audits conducted by the Auditing Office on business execution status in eachdepartment and affiliated company regarding internal controls, and audit results on status of compliance promotion
3. Status and results of assessment conducted by the Auditing Office of internal control over financial reporting based on the
Financial Instruments and Exchange Act
4. Results of audits conducted by Audit & Supervisory Board members as part of their operational audits of directors’
performance of duties related to the establishment and operation of internal control over financial reporting
In addition, the Company strives to enhance audit effectiveness by regularly holding audit liaison meetings, composed of the
Audit & Supervisory Board, internal auditing division and the accounting auditors. These meetings promote information
sharing.
Appointment of External Audit &Supervisory Board Members

Appointed

Number of External Audit &Supervisory Board Members

3

Number of External Audit &Supervisory Board Members Who Are
Independent Audit & Supervisory
Board Members

3- 12 -

External Audit & Supervisory Board Members’ Relationship with the Company (1)NameAttribute

Atsuko Suzuki

From anothercompany
From anothercompany
Certified public
accountant, certified
tax accountant

Masatoshi Matsuzaki
Akemi Sunaga

Relationship with the Company*a b c d e f g h i j
△

k l

m

* Categories for “Relationship with the Company”* “○” when the member presently falls or has recently fallen under the category;“△” when the member fell under the category in the past
* “●” when a close relative of the member presently falls or has recently fallen under the category;“▲” when a close relative of the member fell under the category in the pasta. Executive of the Company or its subsidiaryb. Non-executive director or accounting advisor of the Company or its subsidiaries
c. Non-executive director or executive of a parent company of the Company
d. Audit & Supervisory Board member (kansayaku) of a parent company of the Company
e. Executive of a fellow subsidiary company of the Company
f. A party whose major client or supplier is the Company or an executive thereof
g. Major client or supplier of the Company or an executive thereofh. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property
from the Company besides compensation as an Audit & Supervisory Board member (kansayaku)
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
j. Executive of a client or supplier company of the Company (other than f, g, or h), but not including close relatives (onlyhimself/herself)
k. Executive of a company with external directors/Audit & Supervisory Board members (kansayaku) that are mutually
appointed at the Company as well (only himself/herself)l. Executive of a company or organization that receives a donation from the Company (only himself/herself)
m. Others
External Audit & Supervisory Board Members’ Relationship with the Company (2)Name

Atsuko Suzuki

Designation as
Independent Audit &Supervisory Board
Member○

Supplementary Explanationof the Relationship

Reasons for Appointment and
Designation as Independent

Atsuko Suzuki is not involved incorporate management outside the roleof external director and external Audit& Supervisory Board member, but she
possesses experience as external
Atsuko Suzuki was an executive director at other companies and she has
officer of Panasonic Corporation many years of experience in preparing
until December 2014. The
corporate governance frameworks andCompany has transactions withdrafting and promoting strategies for
Panasonic Corporation related to sustainability. The Company judges thatsales promotion activities, and the her understanding of these areas isamount of such transactions
necessary to achieve effective auditing
accounted for less than 0.1% ofof the Company.
[Designation as Independent Audit &the Company's consolidated net
Supervisory Board Member]sales for the most recent fiscal
The Company has determined that she
year.
meets the requirements set forth in the“Lion Corporation Standards Regarding
the Independence of External
Directors/Audit & Supervisory Board
Members” as well as the requirements
for independent Audit & Supervisory- 13 -

Masatoshi
Matsuzaki

○

―――

―――
Akemi Sunaga○- 14 -

Board members set forth by the Tokyo
Stock Exchange. She is, therefore,
deemed sufficiently independent frommanagement and has been duly
appointed as an independent external
director.
In addition to corporate experience aspresident, representative executive
officer of a listed company that has
expanded business globally, Masatoshi
Matsuzaki possesses advanced expert
knowledge related to corporate
governance as well as experience as anexternal director at other companies.
The Company judges that his
understanding of these areas isnecessary to achieve effective auditingof the Company.
[Designation as Independent Audit &Supervisory Board Member]
The Company has determined that hemeets the requirements set forth in the“Lion Corporation Standards Regarding
the Independence of External
Directors/Audit & Supervisory Board
Members” as well as the requirements
for independent Audit & Supervisory
Board members set forth by the Tokyo
Stock Exchange. He is, therefore,
deemed sufficiently independent frommanagement and has been duly
appointed as an independent external
director.
In addition to corporate experience as
representative of a consulting company,
Akemi Sunaga possesses a wealth ofknowledge and experience related toaccounting and taxes cultivated overmany years as a certified public
accountant and a tax accountant as well
as experience as an external Audit &Supervisory Board member at othercompanies. The Company judges thather understanding of these areas isnecessary to achieve effective auditingof the Company.
[Designation as Independent Audit &Supervisory Board Member]
The Company has determined that shemeets the requirements set forth in the“Lion Corporation Standards Regarding
the Independence of External
Directors/Audit & Supervisory Board
Members” as well as the requirements
for independent Audit & Supervisory
Board members set forth by the Tokyo
Stock Exchange. She is, therefore,
deemed sufficiently independent frommanagement and has been duly
appointed as an independent external
director.

[Independent Directors/Audit & Supervisory Board Members]
Number of Independent Directors/Audit& Supervisory Board Members

7

Matters relating to Independent Directors/Audit & Supervisory Board Members

The Company has designated as independent its four external directors and three external Audit & Supervisory Board members
as they meet the qualifications for independent directors.
[Incentives]
Incentive Policies for Directors

Performance-Linked Compensation, Stock Options

Supplementary Explanation

The supplementary explanation is described in the following “Director Remuneration” section.
Recipients of Stock Options

Internal Directors, Employees

Supplementary Explanation

Lion previously used a stock option scheme for its stock-linked compensation plan, but it was replaced with theperformance-linked stock-based compensation system at the 156th Annual Meeting of Shareholders held on March
30, 2017. Therefore, the only recipients are those who qualified for the scheme in prior years when it was
implemented.
[Director Remuneration]
Disclosure of Individual Directors’
Remuneration
Supplementary Explanation

Individual compensation not disclosed

UpdatedTotal Compensation for Director and Audit & Supervisory Board Members
Total compensation of directors (excluding external directors): ¥400 million (fixed compensation of ¥237 million, bonuses of¥105 million, stock-based compensation of ¥56 million), 8 recipients
Total compensation of Audit & Supervisory Board members (excluding external Audit & Supervisory Board members):¥60 million (fixed compensation of ¥60 million), 2 recipients
Total amount of external director and Audit & Supervisory Board member compensation: ¥84 million (fixed compensation of¥84 million), 9 recipients(Notes)1. There are no individuals serving concurrently as employees and corporate officers.
2. An upper limit on directors’ fixed compensation of ¥300 million per fiscal year was set by resolution of the 156th Annual
Meeting of Shareholders held on March 30, 2017.
3. An upper limit on Audit & Supervisory Board members’ fixed compensation was set at ¥110 million per fiscal year byresolution of the 156th Annual Meeting of Shareholders held on March 30, 2017.
4. Within performance-linked compensation, bonuses are amounts calculated and determined on the basis of the core operating
income and the profit attributable to the owners of parent for each fiscal year, in accordance with the methods described
below. By resolution of the 156th Annual Meeting of Shareholders held on March 30, 2017, an upper limit for bonuses was
set at ¥250 million per fiscal year.
5. Within performance-linked compensation, stock-based compensation is the amount obtained by converting the share
granting points awarded to persons eligible under the system at the acquisition price, depending on the Group’s businessattainment level for the period under review. By resolution of the 160th Annual Meeting of Shareholders held on March 30,
2021, an upper limit was set at ¥200 million on the amount of contributions for stock-based compensation per fiscal year,with an upper limit on the total number of shares set at 120,000 shares per fiscal year.
6. The amounts shown are rounded down to the nearest million yen.
- 15 -

Policy on Determining Remuneration Amounts
and Calculation Methods Updated

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods

The policy and details of the compensation of directors and Audit & Supervisory Board members for the fiscal year under review
are as follows.
1. Basic Policy on Compensation of Directors and Audit & Supervisory Board Members
Director compensation is decided by the Board of Directors, and Audit & Supervisory Board member compensation is decided
by the Audit & Supervisory Board, based on the results of consultation with the Compensation Advisory Committee.
Compensation is set within the limits decided by resolution of the Shareholders Meeting.
Compensation for directors (excluding external directors) consists of fixed monthly compensation and performance-linked
compensation (bonuses and stock-based compensation). Compensation for external directors and Audit & Supervisory Board
members consists only of fixed monthly compensation. Total compensation is determined for directors and Audit & Supervisory
Board members based on their individual roles and responsibilities using survey data from specialized external institutions as an
objective benchmark.
The compensation of each director (excluding external directors) comprises approximately 50% fixed compensation and 50%
performance-linked compensation (30% bonus and 20% stock-based compensation). The proportion of performance-linked
compensation is increased in step with the individual’s rank and revised as needed. Once per year, fixed monthly compensation
is raised or lowered following an appraisal of how well the director has executed their duties, supervised management andcontributed to the Sustainability Material Issues.
Performance-linked compensation is calculated based on the degree to which performance targets are met in each fiscal year
and paid out individually in a designated period after the end of the relevant fiscal year.
Within performance-linked compensation, the total amount of bonuses allocated to directors (rounded down to the nearest¥10,000) is the sum of 50% of 0.5% of core operating income and 50% of 0.75% of profit attributable to owners of parent for the
relevant fiscal year. The upper limit on this total is ¥250 million. However, if core operating income or profit attributable toowners of parent are negative (a loss), the value for that item used in the formula will be zero.
Performance-linked stock-based compensation consists of a fixed portion granted each fiscal year and a performance-linked
portion granted based on the degree to which earnings targets outlined in the medium-term management plan have been achievedfor each fiscal year during the period of said plan. The fixed portion and the performance-linked portion form equal halves of thestock-based compensation base amount specified for each rank.
With regard to stock-based compensation, in the event that a director commits a serious breach of duty or violation of internal
regulations, the Company may seize share granting points already granted or require the return of cash in an amount equivalent
to the value of the Company’s shares, etc., already granted.
The above basic policy on director and Audit & Supervisory Board member compensation and a summary of its contents areapproved by the Board of Directors following consultation with the Compensation Advisory Committee and disclosed in the
Company’s Business Report and Securities Report.
[Indicators Used to Calculate Performance-Linked Compensation]
Performance-linked compensation, which comprises bonuses and performance-linked stocked-based compensation, is calculatedusing two indicators. The first is core operating income, which the Company uses to measure regular business performance and is
one of the most highly prioritized income indicators under the medium-term management plan. The second is profit for theperiod attributable to owners of the parent, which is the final result of business activities and is directly linked to shareholder
value.
[Calculation method of bonuses to corporate officers for the fiscal year ending December 31, 2024]
Bonuses to corporate officers will be paid in an amount calculated and determined based on the following method.
(1) Corporate officers eligible for payment
Only those directors that are “Executive Officers” as defined by the Corporation Tax Act Article 34 Section 1 No. 3 are
eligible. Bonuses are not paid to external directors or Audit & Supervisory Board members.
(2) Total payment amountThe total payment amount (rounded down to the nearest ¥10,000) is the sum of 50% of 0.5% of core operating income and
50% of 0.75% of profit attributable to owners of parent for the relevant fiscal year. The upper limit is ¥250 million.
However, if core operating income or profit attributable to owners of parent are negative (a loss), the value for that item
used in the formula will be zero.
(3) Individual payments
The payment per point is calculated by dividing the total payment amount determined by (2) above by a total number of- 16 -

points comprising the sum of all points awarded to directors. The determination of total points assigned to each rank of
directors is determined by multiplying the number of directors in office in said rank as of the end of the relevant fiscal yearby the number of points specified for that rank, as set out in the table below. Individual payments to each director are thencalculated by multiplying the points specified for that director’s rank by the payment per point as calculated above(rounded down to the nearest ¥10,000).
Points Assigned According to Director Rank
Rank
Chairman/President and Executive Officer
Vice President and Executive Officer
Senior Managing Executive Officer
Managing Executive Officer
Senior Executive Officer
Executive Officer

Points Number of Officers
Total Points
3.000
2
6.000
1.800
1
1.800
1.500
0
0.000
1.200
0
0.000
1.000
4
4.000
0.900
0
0.000
Total Officers: 7
Total Points: 11.800

The above was calculated based on the number of directors following the 163rd Annual Meeting of Shareholders held on
March 28, 2024.
[Calculation of Performance-Linked Stock-Based Compensation]
By resolution of the 156th Annual Meeting of Shareholders held on March 30, 2017, a performance-linked stock-based
compensation system was introduced for directors (excluding external directors), and a partial resolution of the amounts
and content of compensation was approved at the 160th Annual Meeting of Shareholders held on March 30, 2021. In thissystem, the number of points (number of shares) to be granted to directors per fiscal year is determined via a calculation
made by the method below. In principle, shares are issued to directors upon retirement from office in a number equivalent
to the number of points they have accumulated.
(1) Corporate officers eligible for payment
Those directors that are “Executive Officers” as defined by the Corporation Tax Act Article 34 Section 1 No. 3 are
eligible. Performance-linked stock-based compensation shall not be paid to external directors or Audit & Supervisory
Board members.
(2) Total payment level
The upper limit for the total number of points granted to corporate officers eligible for payment per fiscal year is120,000 points (one share of Lion stock per point).
(3) Calculation method and individual payment levels
The number of points for each corporate officer eligible for payment is determined individually using the following formula.
[Point formula]
Number of points* = (① Fixed base amount + ② Performance-linked base amount × ③ Performance-linked coefficient) ÷ ④
Average per-share acquisition cost
*Truncated at the decimal point① Fixed base amountThe fixed base amount for each rank is calculated by multiplying the following rank coefficients by ¥4 million, the value of the
fixed base amount for directors with the rank of executive officer (for whom the rank coefficient is 1).
Coefficient per Director Rank
Rank
Coefficient
Chairman/President and Executive Officer
3.625
Vice President and Executive Officer
2.000
Senior Managing Executive Officer
1.625
Managing Executive Officer
1.375
Senior Executive Officer
1.250
Executive Officer
1.000② Performance-linked base amountThe performance-linked base amount is equivalent to the above fixed base amount.
③ Performance-linked coefficient
The performance-linked coefficient is calculated in accordance with the following formula.
[Formula]
Performance-linked coefficient*1 = Performance-linked coefficient for core operating income*2 × 50% + Performance-linked
coefficient for profit attributable to owners of parent*3 × 50%*1. Truncated after the second decimal place*2. Core operating income: An earnings indicator the Company uses to measure regular business performance by subtracting
selling, general and administrative expenses from gross revenues.
*3. An IFRS-based earnings indicator.
- 17 -

The performance-linked coefficients for each indicator will be determined in accordance with the degree to which the targets*4for the indicators for the fiscal year ending December 31, 2024 are achieved.*5*4. The targets are core operating income of ¥23,000 million and profit for the period attributable to owners of theparent of ¥19,000 million. These are as listed in the “Forecast of Consolidated Financial Results for the Fiscal YearEnding December 31, 2024 (January 1, 2024–December 31, 2024)” disclosed in the Summary of Consolidated
Financial Statements released on February 14, 2024.
*5. Target Achievement Rate*6 and Performance-linked Coefficients for Each Indicator
Under 100%:0100% to under 140%:(target achievement rate) × 2.5 - 1.5*7
140% or above:
2.00*6. In the case of 100% or above, the rate is rounded to the first decimal place*7. Truncated after the third decimal place④ Per-share acquisition cost
The per-share acquisition cost is the share acquisition cost for the trust used by this system (¥2,078 per share*8).
*8. Calculated as the weighted average of the total acquisition price of the Company's shares acquired by the trust after
the trust period extension and the total amount of shares remaining in the trust before the extension. The calculation formula
is as follows.
Per-share acquisition cost = (Per-share acquisition cost before extension (¥2,130) × Number of remaining shares(242,459) + Per-share acquisition cost after extension (¥2,039) × Number of additional
shares to be acquired (309,200)) ÷ (Number of remaining shares (242,459) + Number of
additional shares to be acquired (309,200))
When a director transfers residency outside of Japan during their eligibility for this system, their accumulated
points shall be voided and the director shall be paid separately at the time of retirement in a cash amount determinedby multiplying the share price at the time of retirement by the number of shares equivalent to their accumulated
points.
[Support System for External Directors and/or Audit & Supervisory Board Members]

UpdatedThe General Manager-Board of Directors in the Corporate Planning Department, which is the administrative office of
the Board of Directors, explains the agenda items to the external directors and external Audit & Supervisory Board
members in advance of meetings. In addition, the General Manager strives to provide sufficient information to theexternal directors, such as reporting to them on the content of deliberations at the M Executive Management Board.

[Status of Persons who have Retired from the Company as Representative Director and President, etc.]
Name of Consultants, Advisors, etc. who have retired from the Company as Representative Director and President, etc.

Name

Title/ Position

Sadayoshi
Fujishige

Senior
GeneralConsultant

Itsuo Hama

Executive
AdvisorDescription of Tasks

Form and Conditions ofServices (Full-time, Parttime, Paid or Unpaid, etc.)

Industry organization board
member, chairman of a public
Part-time/Paidinterest incorporated foundation,etc. (not involved in management)
Industry organization board
member, chairman of a public
Full-time/Paidinterest incorporated foundation,etc. (not involved in management)

Date of
Retirementfrom theCompany

Term

March 30,
2016

Ending March
29, 2026

March 30,
2023

Ending March
29, 2028

Total number of Consultants, Advisors, etc. who have retired from theCompany as Representative Director and President, etc.

Others

The consultant and advisor, who previously served such roles as president, are engaged in the activities of industry
organizations, among others, utilizing their experience and knowledge of the Company's management over many years, but are
not involved in any part of the Company’s decision-making process or management. The Nomination Advisory Committee,
which consists of all external directors, all external Audit & Supervisory Board members and one R epresentative Director, wasconsulted in their appointment to ensure transparency and objectivity.

- 18 -

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration Decisions (Overview ofCurrent Corporate Governance System)
UpdatedThe Company supervises management under the Audit & Supervisory Board system. Lion adopted its executive officer
system in March 2004 to separate the functions that the Board of Directors previously performed. The Board of Directors is
responsible for management decision making and supervision, and the Executive Committee is responsible for businessexecution.
To reinforce the Board of Directors’ management oversight function and speedy decision making, the number of
directors has been reduced (from 19 before the executive officer system to 11 currently). There are also seven external
directors (four external directors and three external Audit & Supervisory Board members) who meet the requirements forindependent directors. The Company strives to increase management transparency and further enhance corporate
governance through regular (in principle, once a month) information exchanges between Representative Directors and all
external directors.
In addition, to reflect the opinions and advice of third parties with regard to legal compliance and management policies,
we have set up an Advisory Committee consisting of external experts.
< Directors, Board of Directors and Executive Management Board, etc. >The Board of Directors is composed of 11 directors. The Board of Directors regularly meets once a month and holds
extraordinary meetings as necessary. In addition to matters stipulated by laws and regulations or the Articles of Incorporation, theBoard determines important matters related to the business execution of the Company and supervises the business execution of
directors and executive officers. In addition to the regular Board of Directors meetings, resolutions of the Board of Directors may
be made in writing in accordance with laws and regulations. For important corporate strategies such as the basic policies of
medium- to long-term management plans, a system is established that enables the Board of Directors to make appropriate
decisions upon deliberation by the Executive Management Board. Additionally, the Executive Management Board and the
Executive Committee have systems in place to discuss and examine, from various angles, measures related to the execution ofduties that directly impact business.
Please refer to pages 6–21 of the notice titled “NOTICE OF THE 163RD ANNUAL GENERAL MEETING OF
SHAREHOLDERS.”
https://www.lion.co.jp/en/ir/pdf/meeting/na_fy23.pdf< Nomination Advisory Committee >Please refer to “Committee’s Name, Composition, and Attributes of Chairperson” in 1. Organizational Composition andOperation.
< Compensation Advisory Committee >Please refer to “Committee’s Name, Composition, and Attributes of Chairperson” in 1. Organizational Composition andOperation.
In accordance with the provisions of Article 427, Paragraph 1 of the Companies Act and the Articles of Incorporation,
the Company has entered into an agreement limiting liability with each external director and external Audit &Supervisory Board member to limit their liabilities under Article 423, Paragraph 1 of the Companies Act to theamount of ¥10 million or the amount stipulated by law, whichever is higher.
< Advisory Committee >An Advisory Committee comprising knowledgeable people from outside of the Company is held twice a year toreflect in management the opinions of the committee members on general management issues, such as the corporate
governance system, the direction of business and product development, and approaches to sustainability. The
committee currently has seven members.
< Audit & Supervisory Board Members and Audit & Supervisory Board >There are five Audit & Supervisory Board members, three of whom are external Audit & Supervisory Board members(independent Audit & Supervisory Board members) and two of whom are standing Audit & Supervisory Board members
from within the Company. One of the external Audit & Supervisory Board members and one of the standing Audit &Supervisory Board members possesses knowledge regarding finance and accounting. In addition, two dedicated staff
members are designated to assist the Audit & Supervisory Board members.
Each Audit & Supervisory Board member attends meetings of the Board of Directors and other important meetings,
conducts interviews with directors regarding the status of the execution of their duties (including the status of the executionof the duties of directors pertaining to the development and operation of internal control over financial reporting), performssite visits to Lion’s headquarters and major offices and plants, and conducts audits of subsidiaries in accordance with the
Audit & Supervisory Board members’ standards, audit policy, audit plans and other stipulations of the Audit & Supervisory
Board.
The Audit & Supervisory Board regularly meets once every two months and holds extraordinary meetings as necessary.
During the fiscal year ended December 31, 2023, the Audit & Supervisory Board met a total of 18 times, deliberating over
22 matters to be resolved and 27 matters to be discussed, including the audit policy and audit plan, preparation of audit
report, evaluation related to dismissal or non-reappointment of accounting auditors, compensation for accounting auditorsand closing of accounts. The Company and its consolidated subsidiaries coordinate with each other by exchanging
information, opinions and views from a risk management perspective and facilitates coordination upon receiving audit
reports (including internal controls implemented as part of the accounting audit process) from accounting auditors and audit
reports (including the status of development and operation of internal controls related to financial reporting based on the- 19 -

Financial Instruments and Exchange Act and evaluation results) from the Auditing Office, which is the Company’s internal
auditing division. Furthermore, the opinions of external directors are used to inform the opinions of Audit & Supervisory
Board members as they relate to each proposal from the Board of Directors. Moreover, meetings to exchange information,
opinions and views are regularly conducted with the representative directors two times a year.
< Accounting Audits >Lion has formed an audit agreement with Ernst & Young ShinNihon LLC, based on which the latter provides accounting
audits as well as audits of Lion’s internal control reports based on the Companies Act and Financial Instruments andExchange Act.
The certified public accountants who performed these duties during the fiscal year ended December 31, 2023 were
Hirokazu Tanaka and Masayuki Tada, with the support of 17 certified public accountants and 32 other assistants involvedin the audit work. The compensation to the certified public accountants, etc. was ¥142 million for auditing services and ¥0
million for non-auditing services related to the Group (amounts are rounded down to the nearest million yen).
< Internal Audits >The Auditing Office (currently consisting of 17 members) reports directly to the president and audits the status ofbusiness execution by each department and affiliated companies. It conducts these audits based on the annual internal
audit plan, including audits related to internal controls from the perspectives of legality, appropriateness, andefficiency, as well as its current compliance status. The results of internal audits are reported to the president, directors
with related responsibilities, the Board of Directors and the Executive Committee, as well as to Audit & Supervisory
Board members. In addition, the Company monitors and evaluates the status of development and operation of internal
control over financial reporting based on the Financial Instruments and Exchange Act, and reports to the president andthe Audit & Supervisory Board.
3. Reasons for Adoption of Current Corporate Governance System
The following measures have been taken under the current system, and the Company believes that the supervision andmonitoring functions of the directors and Audit & Supervisory Board members have been enhanced.
1. Enhancement of supervisory functions by appointing four external directors (independent directors)
2. Enhancement of oversight functions by appointing three external Audit & Supervisory Board members (independent directors)
and two standing corporate auditors
3. Understanding of management stance and improvement of effectiveness of supervision and monitoring functions throughregular exchange of information between independent directors and president
4. Separation of supervisory and executive functions through the executive officer system
5. Improvement of the effectiveness of audits through coordination between the Audit & Supervisory Board, the internal auditing
division and accounting auditors
6. Improvement of the effectiveness of oversight functions through regular exchange of opinions between the Audit &Supervisory Board and the Representative Director
7. Utilization of opinions of external directors to inform the opinions of Audit & Supervisory Board members as they relate toeach proposal from the Board of Directors
8. Supervision of management from the perspective of generally accepted social mores by an Advisory Committee consisting of
external experts- 20 -

Ⅲ Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Smooth the Exercise of Voting Rights

UpdatedSupplementary Explanations
Early Notification of General
Shareholder Meeting
Scheduling AGMs to Avoid the Peak Day

Allowing Electronic Exercise of Voting
RightsThe Company began publishing electronic convocation notices for the
163rd Annual Meeting of Shareholders (held on March 28, 2024) on
February 27, 2024, and written notices were sent on March 6, 2024.
The Shareholders Meeting is held near the end of March in order to ensure
ample time for the Board of Directors’ closing of accounts meeting,auditing, and smooth preparation for the Shareholders Meeting.
The Shareholders Meeting convocation notice informs shareholders thatthey can exercise their voting rights electronically. Shareholders can do soby reading a QR code on the voting form or through the voting website(https://evote.tr.mufg.jp/).

Participation in Electronic Voting
The Company participates in the platform for exercising voting rights
Platform and Other Efforts to Improve
operated by ICJ, Inc.
Exercise of Voting Rights by Institutional
Investors
Providing Convocation Notice in English
The English and Japanese version of the convocation notice are released
simultaneously on the Lion website.
2. IR Activities

UpdatedSupplementary Explanations

Preparation and Publication ofDisclosure Policy

The Company has established the following basic policy,
disclosure standards and other IR information disclosure
policies.
1. Basic Policy
Based on the Lion Group Charter for Corporate Behavior,
Lion actively works to disclose corporate information suchas that concerning business strategy and the Company's
financial status in a fair, accurate and timely manner in order
to secure the trust and understanding of shareholders,investors and all other stakeholders.
2. Information Disclosure Standards
Lion discloses information in line with the timely disclosurerules of the Tokyo Stock Exchange (TSE), on which theCompany's shares are listed. In addition, Lion proactively
discloses information that, although not specified by the TSE's
rules of timely disclosure, it believes may be of relevance tothe investment decisions of shareholders and investors.
3. Method of Disclosure
In accordance with the above information disclosure standards,
Lion discloses information via the Timely Disclosure Network(TDnet) provided by the TSE while actively employing its
corporate website to promote the fair and timely disclosure ofsuch information. Furthermore, Lion releases news andupdates its website to disclose other information in a fair andtimely manner.
4. Forward-Looking Statements
In addition to the results forecasts that Lion provides to theTSE, Lion provides forward-looking information in such forms
as business plans and strategies through results briefings and- 21 -

Explanation byRepresentative

other IR activities. Forward-looking information reflects
judgments made based on the information available at the timeof compilation, and actual results may differ significantly due
to a number of factors.
5. Period of Silence
To prevent leaks of information concerning business results
and to ensure fairness, Lion maintains a period of silence fromthe day following the closing of accounts for each fiscal
period, including for each fiscal quarter, until that period's
results briefing. During this period, the Company does not, inprinciple, disclose information about or answer questions
pertaining to its business results.
The above information is also posted on Lion’s website:
https://www.lion.co.jp/en/ir/policy/
Regular Investor Briefings for
Individual Investors

Although the Company did not hold any briefing sessions forindividual investors in 2023, it made efforts to enhance
information disclosure on its website.

Holding Regular Briefings forAnalysts and Institutional Investors

After the announcement of the financial results for the full
fiscal year and the second quarter, the Company holds afinancial results briefing for analysts and institutional
investors. For the first and third quarters, the Company
holds briefings via conference call.
The Company has established an IR Information Corner(https://www.lion.co.jp/en/ir/) on its website. This section
includes financial information (including the Summary ofConsolidated Financial Statements), non-financial timely
disclosure materials, securities reports (in Japanese) andsemi-annual reports, convocation notices for Shareholders
Meetings, business reports, integrated reports, andpresentation materials.
The Company also provides an IR email service that sends
notifications of updates to this section and IR-related press
release information with titles and links.

Posting Investor Relations Materials
on the Company Website

Establishment of Department and/orManager in Charge of IR
Other

YES

The IR and SR Office of the Corporate Planning Department
has been established with Director Kengo Fukuda serving as
the responsible executive director.
At occasional intervals, the Company holds briefings forindividual investors, individual business-related briefings andfactory tours for analysts and institutional investors as well as
briefings for overseas investors.

3. Measures to Ensure Due Respect for Stakeholders

UpdatedSupplementary Explanations
Stipulation of Internal Rules for
Respecting the Position of Stakeholders The Company has established an IR information disclosure policy.
Implementation of Environmental
Activities, CSR Activities etc.
Development of Policies on
Information Provision to Stakeholders

The Company prepares an integrated report and publishes it on its website.
The Company has established an IR information disclosure policy.

- 22 -

OtherLion respects the nationalities, genders, value systems and other attributes ofGroup employees and aims to empower them to earn success in a way thattakes full advantage of their diverse personalities and abilities. With this inmind, Lion promotes such initiatives as the development of an inclusive
workplace environment and the education of management-level employees.
Lion also takes a proactive and constant approach to hiring and promoting
diverse human resources, including women, foreign nationals and mid-careerhires with diverse professional experience. Through these efforts, Lion seeks
to be informed by diverse opinions while acquiring multifaceted perspectives
and input to improve the quality of its management decision making.
Recruitment and Promotion of Women
Lion considers the empowerment of women to be essential to achieving
further improvement in corporate value. Accordingly, Lion takes proactive
measures to support women’s career success. To empower female employees
to develop successful careers over the long term at the Company, Lion
strives to help employees strike an enriching balance between work andprivate life by, for example, enhancing childcare-related programs,
introducing a work-from-home system and otherwise assisting them in theirefforts to play an essential part in both work duties and childcare. By doingso, Lion creates a workplace in which employees can work vibrantly whilestaying healthy.
Thanks to a variety of initiatives discussed above, the percentage of womenin Lion’s managerial positions stood at 16.4% at the end of 2023. As a 2030
target, Lion aims to raise this ratio to 30% or more.
Recruitment and Promotion of Foreign National Employees
Lion pays close attention to needs among people of Asia and aims topromote better living habits. In line with this aim, Lion seeks to promoteforeign national employees to empower them to act as a key part of its
workforce.
At the end of 2023, the ratio of foreign nationals to the total number ofGroup employees amounted to 44.9%, with foreign national managers
accounting for 29.6% of overall managerial positions. Lion mainly promotes
locally hired individuals to officer positions at overseas Group companies todevelop their operations. Also, on a non-consolidated basis, the ratio of
foreign nationals to the total number of Lion employees amounted to 1.7%,
while foreign national managers accounted for 0.7% of overall managerial
positions. Lion aims to increase the ratio of foreign national managers so thatthey make up a proportion on par with the ratio of foreign nationals to
overall employees by 2030.
Recruitment and Promotion of Mid-Career Hires
As Lion strives to proactively develop new businesses along with further
developing its existing businesses, the Company is pushing ahead with therecruitment and promotion of mid-career hires equipped with experience,skill and specialist expertise that cannot be obtained within the scope ofoperations conventionally handled by the Lion Group.
As a result of recruitment activities under a medium-term recruitment plan,
including the recruitment of new graduates and mid-career hires, the ratio of
mid-career hires to the number of employees hired over the latest three-year
period (January 2021to December 2023) stood at 42%.*3 In addition, Lion
proactively rehires individuals who once resigned from the Company due tosuch reasons as the pursuit of personal career development and family
responsibilities.
As of December 31, 2023, mid-career hires accounted for 24% of employees,
while mid-career hires accounted for 11.6% of overall managerial positions.
Lion strives to raise the ratio of mid-career hires in managerial positions sothat they make up a proportion on par with the ratio of mid-career hires tooverall employees by 2030.
* 3 Employees hired by Lion (excluding temporary employees)- 23 -

Ⅳ Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development

Updated< Basic Internal Control System Policy >1. Structure to Ensure that the Execution of Duties of the Lion Group’s Directors and Employees Complies with Legal
Requirements and the Company's Articles of Incorporation(1) Basic Stancea. The Lion Group Charter for Corporate Behavior and Behavioral Guidelines shall provide the platform for theCompany's compliance structure.
b. The president shall provide constant reinforcement regarding the basic spirit and essence of the Lion Group Charterfor Corporate Behavior among directors, executive officers, Audit & Supervisory Board members and employeeswith the aim of increasing awareness and understanding of corporate ethics. Each and every member of the LionGroup shall adopt and pursue the credo that compliance underpins every facet of the Group's business activities.
(2) Compliance Structurea. The Company shall maintain a Corporate Ethics Committee chaired by the director responsible for corporate ethics,
an appointee from the Board of Directors. Covering the entire Group, this committee shall formulate and implement
specific initiatives to ensure greater awareness of and compliance with corporate ethics. In the event of a violation of
the Lion Group Charter for Corporate Behavior or Behavioral Guidelines, if deemed necessary by the Corporate
Ethics Committee, an Ethics Investigation Committee shall be established to work toward the resolution of the issue.
The Ethics Evaluation Committee shall comprise specialists from outside the Group, including lawyers and certified
public accountants.
b. The Group shall designate the general manager - corporate ethics who reports to the board director responsible forcorporate ethics. The director of corporate ethics shall enhance and maintain the Group's compliance structure andwork with the Human Resources Development Center to implement necessary training for the Group. Eachdepartment shall also formulate its own standards and manuals in line with relevant laws and regulations and operatein accordance with said rules and manuals.
c. In an effort to reinforce the supervisory function of Lion’s Board of Directors, external directors who do not engage
in any executive function within the Group shall be appointed to the board.
d. The Group shall maintain an Advisory Committee, comprising outside experts, to provide third-party opinions andadvice on matters relating to legal compliance and management policy.
e. The Group shall maintain an Auditing Office as its internal auditing division.
f.
Lion's Auditing Office shall conduct internal audits of Group companies.
g. Lion shall dispatch Audit & Supervisory Board members to Group companies. Audit & Supervisory Board members
shall conduct audits in accordance with regulatory requirements.
h. Members of the Auditing Office, the general manager - corporate ethics, members of the Corporate Planning
Department and the Legal Department, and the Audit & Supervisory Board members shall maintain close
communications with each other. In this manner, Lion shall promptly identify issues and problems relating tocompliance and the compliance structure.
i.
Lion shall refer to its work regulations to determine the course of action in the event an employee contravenes any law
or the Company's Articles of Incorporation. The Corporate Ethics Committee shall prepare and submit its final decision
to the Board of Directors in the event a director contravenes any law or the Company's Articles of Incorporation.
j.
Besides items (2) a. through i. above, the AL Heart Hotline has been established to provide direct contact with thegeneral manager - corporate ethics and external lawyers. This hotline forms a part of the Group's internal
communications system designed to address any legal breach or matter concerning compliance. In addition, theQuality Information Hotline has been established. In cases of doubt about product quality, personnel responsible for
product development may utilize this internal communications system to report directly to the general manager ofthe Reliability Assurance Department. These hotlines shall be managed based on separately prepared guidelines.
k. In the event Audit & Supervisory Board members uncover an issue relating to the Group's compliance structure or
the management of its internal communications system (identified in item (2) j. above), a report shall be presented tothe board director responsible for corporate ethics and the necessary corrective measures formulated.
(3) Response in the Event of Emergency
a. The Emergency Response System shall apply to any emergency relating to legal requirements and corporate social
responsibility (CSR). Under the system, the general manager of the General Affairs Department shall report any such
incident to the president, the director responsible for corporate ethics and the Audit & Supervisory Board members. The
director of the relevant department or the Emergency Response Committee, chaired by the president, shall implement
appropriate measures to resolve the situation, formulate measures to prevent recurrences and submit a report to the
Executive Committee and the Board of Directors.
b. The procedures outlined above in item (3) a. shall be adopted in the event a director or employee of a Group company
uncovers a serious breach of any legal requirement or any significant matter relating to compliance by a Group company.
c. In the event that Group companies recognize that management guidelines or instructions from Lion contravene the law
or raise issues relating to compliance, the matter shall be immediately reported to the Company's president, the board
director responsible for corporate ethics, and Audit & Supervisory Board members. The board director responsible forcorporate ethics, in collaboration with the Audit & Supervisory Board members, shall resolve the situation and formulate
measures to prevent recurrences.
2. Management Structure for Maintenance and Storage of Information Concerning the Execution of the Duties of Lion’s
Directors- 24 -

a.
b.
c.
d.

Representative directors and executive directors shall report on the status of their own executive duties to the Board of
Directors in accordance with legal requirements.
The representative director shall formulate information preparation, maintenance and storage rules relating to the
execution of directors' duties as a part of the Company’s Information Management Regulations.
Directors shall maintain and store information pertaining to the execution of their duties in accordance with theInformation Management Regulations.
Directors and Audit & Supervisory Board members may view and copy this information at any time.

3. The Lion Group’s Rules and Other Structures Relating to the Management of Risk
(1) Response under Normal Conditions
a. The director responsible for the Corporate Planning Department shall have overall responsibility for risk
management for the Group. The Corporate Planning Department shall exhaustively and comprehensively
manage the Group's risk.
b. The Executive Management Board shall identify and evaluate management risks that have the potential tosignificantly impact business activities, and Company-wide efforts shall be made to reduce such risks. In
addition, the responsible officer for risk will consider countermeasures for new management risks that arise
during the fiscal year, and discuss them at the Executive Management Board.
c. To control risks associated with the environment, quality assurance, accidents and disasters, appropriate
countermeasures shall be formulated in advance by the Sustainability Promotion Council, Customer
Satisfaction/Product Liability Committee, and Safety, Hygiene and Disaster Prevention Meeting, and, whennecessary, deliberated by the Executive Management Board or the Executive Committee.
d. The Company shall identify risks in every department and work to reduce them. In addition, each plant has
acquired ISO 9001 and ISO 14001 accreditations and are actively engaged in quality assurance andenvironmental protection.
e. The responsible officer for overall risk management shall report the progress and status of risk management to
the Executive Committee and the Board of Directors. Also, the Auditing Office shall audit the status of risk
management for each department within the Group and report its findings to the Executive Committ ee and theBoard of Directors.
(2) Response in the Event of Emergency
a. In the event of an incident occurring due to a natural disaster or accident, in accordance with the Emergency
Response System (the respective manuals for countermeasures again earthquakes or influenza and otherinfectious diseases), details of said incident shall be reported to the president and Audit & Supervisory Board
members. At the same time, the director of the relevant department shall collect all relevant information,
formulate response measures, clarify causes and determine countermeasures, submitting a report on theseactions to the Executive Committee and the Board of Directors.
4．Structure to Ensure that Directors' Duties are Executed Efficiently
The following business management system shall be used to improve the efficiency of the execution of directors’
duties.
(1) Decision-making Rules
a. Board of Directors meetings shall be held regularly once a month, with extraordinary meetings convened whennecessary, as the foundation for ensuring the efficient execution of directors' duties. With the exception of theregular Board of Directors meetings, the written approval of each director shall be deemed to constitute a resolutionof the Board of Directors, pursuant to regulatory requirements.
b.
Executive Management Board meetings shall be held three times a month, and the Executive Committee meetings
shall be held once a month. At each meeting, the committees shall make decisions on fundamental and otherimportant matters in an agile manner. Through these means, Lion shall strive to promote speedy operations andstrengthen the Board of Directors’ functions.
c. Matters of importance relating to the management policies and strategies of the overall Group shall be deliberated
on in advance by the Executive Management Board. Thereafter, recommendations shall be ratified by the Board of
Directors.
d. The autonomy of each company within the Group shall be respected; however, each Group company shall regularly
report on its business activities to Lion and discuss important matters with Lion before taking action. In addition,
matters of significance that may substantially impact the assets and earnings of Group companies are subject toapproval by Lion's Board of Directors or Executive Management Board.
(2) The Board of Directors
a. The Board of Directors shall determine Companywide objectives and targets common to all directors and employees
and promote understanding and awareness of and formulate management plans based on said objectives and targets.
b. In order to make management plans more concrete, the Board of Directors shall establish business plans and set
operating budgets on the basis of said management plans. Investments for marketing, research and development,
capital expenditure and new businesses are also allocated on the basis of management plans.
c. The Board of Directors shall determine the delegation of authority regarding important matters to organizations, thePresident, responsible officers and directors of each division or department.
d. The Board of Directors shall review monthly business results. In the event of a discrepancy between establishedtargets and actual performance, the director responsible for each division shall provide an analysis of the discrepancy
and recommend measures to reduce or eliminate negative factors to the Board of Directors. When necessary, targets
may be revised.
- 25 -

(3) Business Operation Structurea. The directors responsible for each department shall establish efficient business operation structures for theirdepartments, including concrete measures to be implemented.
b. Monthly business results shall be collated for management accounting purposes in a timely fashion utilizing theGroup's IT systems and submitted to the director responsible for the relevant department and the Board of Directors.
c. Subject to item (2) d. above, each director responsible for a department shall implement improvements to increase theefficiency of the department's business operation structure as needed.
5．Matters Relating to Employees Assigned to Support Audit & Supervisory Board Members and the Independence ofSuch Employees from Directors in the Case that Audit & Supervisory Board Members Request Such Employees(Including Items Related to Ensuring the Effectiveness of Audit & Supervisory Board Members’ Directions)a. At least one employee shall be allocated to the Auditing Office to support the duties and functions of the Audit &Supervisory Board.
b. Employees allocated for this purpose to the Auditing Office are subject to the instructions of the Audit & Supervisory
Board and not to the instructions of board directors or the director of the Auditing Office.
c. The aforementioned employees are independent of board directors. The personnel evaluation, transfer and disciplining ofthese employees are determined after agreement by the Audit & Supervisory Board.
6．Structure for Reporting to Audit & Supervisory Board Members by Directors and Employees and Other Matters Relating
to Procedures for Reporting to Audit & Supervisory Board Members as well as Structure for Ensuring that Such Reporting
Will Not Result in Disadvantage to the Reporter(1) Lion Group directors and employees shall quickly report to the Audit & Supervisory Board any matters that may significantly
impact the Group as well as any significant violations of legal statutes or the Articles of Incorporation. In addition, the directors
shall report the following matters to the Audit & Supervisory Board.
a. Significant breaches of the law and other important compliance matters.
b. Emergencies relating to natural disasters or accidents as well as emergencies concerning legal requirements or corporatesocial responsibility.
c. The implementation status of Group internal audits.
d. The status and details of communications reported through the Group's internal reporting hotline.
e. Matters determined by the Executive Management Board and the Product Planning Executive Committee.
f. Matters determined by directors and executive officers based on designated delegated authorities.
g. The status of Group company activities, as well as activities by their Audit & Supervisory Board members.
h. The details and impact of any change in important accounting policies or standards adopted by the Company and its
Group companies.
(2) The reporting methods for the matters described above in (1) a. through h. (the reporter, recipient, timing and other matters)
are determined through deliberations involving directors and the Audit & Supervisory Board members.
(3) Notwithstanding item 6. (1) above, Audit & Supervisory Board members may request information from directors andemployees as and when necessary.
(4) The Lion Group shall establish Behavioral Guidelines to protect those who report matters of concern to the Audit &Supervisory Board members from suffering any disadvantage as a result of making such a report, and organizationally ensurethat this is enforced Groupwide.
7．Procedure for Pre-Payment and Reimbursement of Costs Arising in the Execution of the Official Duties of Audit &Supervisory Board Members and Policy for Processing Other Costs or Liabilities Arising from the Execution of Such Duties(1) Costs and liabilities necessary for the execution of Audit & Supervisory Board members’ duties shall be promptly paid orotherwise processed in accordance with the request of the Audit & Supervisory Board member.
(2) In addition, Audit & Supervisory Board members may receive the advice of outside experts as required to execute their duties.
Related payments or other processing shall be handled in accordance with 7. (1), above.
8．Structure to Ensure Effective Auditing by Lion’s Audit & Supervisory Board Members(1) At the request of the Audit & Supervisory Board, the Board of Directors shall ensure that the Audit & Supervisory Board isable to appoint legal, accounting or taxation specialists to receive advice relating to audit activities.
(2) Audit & Supervisory Board members may attend management meetings and discussions of the Company and Group
companies as necessary.
(3) Audit & Supervisory Board members may review and copy important information concerning Group companies as necessary.
(4) Audit & Supervisory Board members may conduct individual interviews with the directors responsible for business execution
and important employees regarding the status of the execution of their duties in accordance with audit plans formulated by the
Audit & Supervisory Board.
(5) Audit & Supervisory Board shall periodically convene meetings with the representative directors and accounting auditors topromote the exchange of information, opinions and views.
9．Structure to Ensure the Reliability and Appropriateness of Financial Reporting(1) For the purpose of ensuring the reliability of the financial reporting of Lion, its subsidiaries and affiliated companies that
forms the Group’s consolidated financial statements, the president shall develop, operate and evaluate internal control regarding
financial reporting based on the “Internal Control Policies Regarding Financial Reporting” set forth by the Board of Directors.
The president shall also report the status of internal control and submit an internal control report to the Board of Directors on aregular basis.
- 26 -

(2) The Auditing Office shall, through its internal auditing, understand and evaluate the status of the development and operationof the Company’s internal control system (including any problems and the status of improvements made to address problems)
regarding the financial reporting and report its findings to the president and Audit & Supervisory Board members.
(3) As a part of their performance audits, Audit & Supervisory Board members shall audit the execution of directors’ duties
related to the development and operation of internal control regarding financial reporting. In addition, Audit & Supervisory
Board members shall audit the status of development and operation of internal control regarding financial reporting throughaudits of the appropriateness of the methods and results of accounting audits conducted by accounting auditors.
< Development Status of the Internal Control System >Lion has established the Lion Group Charter for Corporate Behavior and Behavioral Guidelines, centered on the reinforcement oflegal compliance and corporate ethics. To ensure strict compliance with the charter and guidelines on the part of all directors,
Audit & Supervisory Board members and employees, the Group has established a Corporate Ethics Committee chaired by theboard director responsible for corporate ethics. The committee promotes concrete initiatives to ensure the penetration andentrenchment of corporate ethics awareness. In the event of a violation of the Lion Group Charter for Corporate Behavior or
Behavioral Guidelines, the committee develops proposals to resolve the issue and prevent recurrences. The committee also works
to strengthen the Group’s compliance systems, including the internal reporting systems. In addition, the Group maintains various
rules and procedures to ensure the efficiency and effectiveness of operations, including standards for delegating decision-making
authority to the president or the responsible executive, operating processes for each stage of product development, and productmanagement systems that specify quality assurance procedures.
The Audit & Supervisory Board members and Auditing Office conduct regular audits to monitor whether these systems arefunctioning appropriately.
Regarding the timely disclosure of corporate information, Lion seeks out the opinions of the standing Audit & Supervisory
Board members regarding the necessity of disclosure, endeavoring to ensure appropriate disclosure.
With regard to the development status of internal control related to financial reporting, Lion has established the “Internal
Control Policies Regarding Financial Reporting” and standards for determining the scope of evaluation and targets ofevaluations. Furthermore, the Group has assigned responsible staff to take charge of each operational process.
< Operational Status of the Internal Control System >The Board of Directors examines the operation of the internal control system as necessary. An outline of the operational status
for each year is given in that year’s annual Business Report.
2. Basic Views on Eliminating Anti-Social Forces< Basic Approach >In accordance with the Lion Group Charter for Corporate Behavior, the Company shall maintain a stance of staunch opposition
to any antisocial forces that pose a threat to public order and safety.
< Status of Related Efforts >Having positioned its General Affairs Department as its office for handling issues relating to antisocial forces, Lion has
appointed a person responsible for the prevention of undue claims against the Company and strives to coordinate efforts between
each operational site of the Group as well as external institutions. To facilitate coordination with the police and relevant
authorities, Lion participates in and shares information through specialized outside institutions, such as public-private
partnerships for the prevention of undue claims.
To define and ensure compliance with procedures for handling antisocial forces, Lion has established an Undue Claim
Prevention Manual.
The person responsible for the prevention of undue claims implements the necessary training at each operating site of theGroup. The person responsible for the prevention of undue claims and the persons in charge of the prevention of undue claims ateach operating site shall execute their duties in accordance with the Undue Claim Prevention Manual.

- 27 -

Ⅴ Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not Adopted

Supplementary Explanation< Outline of the Basic Policy Concerning Control over the Company and Details of Special Initiatives to Contribute to Its
Implementation >Lion believes that persons who control the Company’s decision making over financial matters and business policies should
fully understand Lion’s corporate philosophy, sources of corporate value and the relationship of trust it has with stakeholders
who support the Company in order to secure and improve corporate value and to act in the common interests of shareholders
in a continuous and sustainable manner.
At the same time, Lion holds that final decisions concerning any proposal of acquisition that would involve a transfer ofcontrol of the Company must ultimately be based on the collective will of its shareholders. This is not meant to imply
opposition to a large-scale acquisition of Lion’s shares if such acquisition is to be to the benefit of corporate value and thecommon interests of shareholders.
Nevertheless, in some cases large-scale acquisitions are undertaken clearly for the purpose of undermining Lion’s
corporate value and the common interests of shareholders; are intended to force shareholders to sell their shares; or are
pushed forward without provision of sufficient time and/or information to Lion’s Board of Directors and shareholders so thatthey may examine suggestions regarding the acquisition proposal and alternatives. Thus, such cases can impair Lion’s
corporate value and the common interests of shareholders.
The Company resolved not to continue the anti-takeover measures against large-scale purchases of the Company's shares(anti-takeover measures) at the Board of Directors held on January 29, 2021. However, in the event of the emergence of alarge-scale purchaser who may damage the corporate value or the common interests of shareholders, the Company willconsult with the Corporate Governance Committee, which is composed solely of external directors and external Audit &Supervisory Board members, in order to enhance the objectivity and rationality of the Board of Directors. The Board of
Directors will respect the recommendations of the Committee to the maximum extent possible and, after thoroughdeliberation, will take necessary and appropriate measures in accordance with the Companies Act, Financial Instruments andExchange Act, and other relevant laws and regulations. If a decision by the shareholders is necessary to ensure the corporate
value of the Company and the common interests of the shareholders, the Company will hold a Shareholders Meeting as soon
as possible. In order to contribute to the realization of the above basic policy, the Company will vigorously promote thestrategies to realize the management vision described in “I Current Conditions of the Lion Group 5. Management Issues” inthe Business Report and work to enhance the Company’s corporate value and the common interests of shareholders.
2. Other Matters Related to the Corporate Governance System
The status of the Company's internal system for timely disclosure of corporate information is as follows.
In accordance with the rules on timely disclosure in the marketable securities listing regulations (timely disclosure rules), theCompany's basic policy is to proactively disclose information on the Company's operations, management, or businessperformance that may have a material impact on investment decisions in a timely and appropriate manner.
In order to realize this basic policy, the Company is implementing the following systems.
1. Decisions Reached and Information on Financial Results Pertaining to the Company (see Reference 2)
1. Since these are matters to be resolved by the Board of Directors, the Corporate Planning Department will
confirm whether or not each agenda item falls under the category of "corporate information requiring
disclosure" as stipulated in the timely disclosure rules prior to the Board of Directors meeting (hereinafterreferred to as a “disclosure requirement”).
2. The Corporate Communications Center (hereinafter referred to as the “CC Center”), which is responsible for managing
the timely disclosure rules, will also confirm whether or not there is a disclosure requirement.
3. In the event that the perceived necessity of a disclosure requirement differs between the two sections, the Company
will disclose the information.
4. The director in charge of the Corporate Planning Department will report the progress and results of the decisionon the need for disclosure to the director in charge of the CC Center, the Chairman of the Board of Directors, and
the President and Representative Director.
5. The director in charge of the Corporate Planning Department will report whether there is a disclosure requirement
for the relevant matter to the Board of Directors upon its resolution. The Board of Directors will ask the opinionof the Audit & Supervisory Board members on the results determining whether there is a disclosure requirement
and confirm the appropriateness of the results.
2. Information on Decisions Reached by Subsidiaries (see Reference 3)
1. Matters resolved by a subsidiary’s board of directors will be reported to Lion’s Corporate Planning Department, whichis responsible for the overall management of affiliated companies.
2. The Corporate Planning Department will confirm whether or not there is a disclosure requirement.
3. The CC Center, which is responsible for managing the timely disclosure rules, will also confirm whether or not there is- 28 -

4.
5.

a disclosure requirement.
In the event that the perceived necessity for a disclosure requirement differs between the two sections, the Company
will disclose the information.
The director in charge of the Corporate Planning Department will report to the director in charge of the CC Center, theChairman of the Board of Directors and the president on the progress and results of determining the disclosure
requirement. In addition, the director in charge of the Corporate Planning Department will ask the opinion of the Audit& Supervisory Board members on the results determining whether there is a disclosure requirement and confirm theappropriateness of the results.

3. Information Regarding the Occurrence of Material Incidents Pertaining to the Group (see Reference 4)
1. The Group has established the Emergency Response System to prepare for emergencies related to major
laws and regulations, the Group’s social responsibility, and physical emergencies caused by natural
disasters and accidents.
2. Based on this system, in the event of an emergency, all information will be centralized in the General Affairs
Department, which will immediately report to the director in charge of the General Affairs Department, the Chairmanof the Board of Directors, the president and the standing Audit & Supervisory Board members, and discuss the
response.
3. The Corporate Planning Department and the CC Center will confirm whether or not there is a disclosure requirement
regarding the incident concurrently with the discussion on the response.
4. In the event that the perceived necessity for a disclosure requirement differs between the two sections, the Company
will disclose the information
5. The director in charge of the Corporate Planning Department will report to the director in charge of the General Affairs
Department, the director in charge of the CC Center, the Chairman of the Board of Directors and the president on the
progress and results of the disclosure requirement. In addition, the director in charge of the Corporate Planning
Department will ask the opinion of the Audit & Supervisory Board members on the results determining whether there
is a disclosure requirement and confirm the appropriateness of the results.

- 29 -

Lion’s Corporate Governance System- 30 -

Reference 1

Evaluation of Board of Directors EffectivenessIn accordance with the Lion Corporation Basic Corporate Governance Policy, the Company strives to ensure theeffectiveness of the Board of Directors. Every fiscal year, the board conducts evaluations related to such areas as theboard’s operating methods and the content and status of the proposals it considers. These evaluations include examinationsof each director. A summary of the results of these evaluations is disclosed in the Corporate Governance Report.
An anonymous self-assessment survey regarding the Board of Directors was conducted among all directors and Audit &Supervisory Board members as well as executive officers who regularly attended Board of Directors meetings held in 2023.
Please refer to the following for a summary of their assessment of the effectiveness of the Board of Directors.
2023 Evaluation Results
1. The number of persons on Lion’s Board of Directors, including the number and proportion of external directors, is sufficientfor deliberations. Board members have the knowledge, experience, capabilities and diversity necessary to enhance corporate
value.
2. The meeting frequency as well as the number of agenda items considered and amount of time allowed for deliberation by the
Board of Directors are appropriate. The deliberations comprise open, constructive debate that does not hinder risk taking.
As described above, the composition and operation of the Board of Directors of the Company are appropriate, decisions onimportant matters concerning business execution and supervision of the execution of duties are adequately made, and theeffectiveness of the Board of Directors of the Company is sufficient.
In line with suggestions on how to further enhance discussions at Board of Directors meetings, we will continue with initiatives
to enhance the effectiveness of the Board of Directors.
Based on the issues identified in 2022, initiatives in 2023 were as follows.
Issues・We must move forward with the transfer
of authority to directors and executive
officers to enhance the Board of Directors’
discussions on important matters such as
management plans and strategies, which
are essential for exercising supervisory
functions.
・We must further enhance discussions at
Board of Directors meetings

Initiatives
・We conducted a review of internal rules concerning the operation of officers
meetings and decision-making to increase items to be delegated to executive
officers, strategically narrow down proposals presented to the Board of
Directors, and clearly separate directors’ supervisory functions and executive
officers’ business execution functions.

・In addition to examining how to narrow down the number of proposals
presented to the Board of Directors through the transfer of authority to directors
and executive officers, we have enhanced the provision of information toexternal directors and external Audit & Supervisory Board members by having
internal Audit & Supervisory Board members attend preliminary briefings.
Furthermore, we expedited the distribution of meeting materials to allow moretime for prior consideration.

Although the evaluation of Board of Directors effectiveness in 2023 included positive feedback about the effectiveness of theearly distribution of meeting materials, there were also opinions and suggestions on measures to further enhance the board's
effectiveness. Accordingly, in 2024 we will focus on the following initiatives.
Opinions/Suggestions

Initiatives

・We must set aside sufficient time toformulate Vision2030 2nd STAGE, our
medium-term management plan beginningin 2025, as well as to discuss our response
to key contemporary issues such assustainability and human capital.

• To further enhance the Board of Directors’ discussions on management plans,
which are essential for the exercise of the board’s supervisory functions, as wellas on key recent matters such as strategies for sustainability and human capital,
we will review the operation of officers’ meetings and criteria for decisionmaking authority.
• To further share the status of operations with external officers, we are creating
new opportunities for them to take part in meetings of business execution
departments, thereby enhancing their understanding.
• In addition to holding informal and extraordinary meetings of the Board of
Directors to facilitate the exchange of opinions on important management issues,
we will work to enhance efficiency in ways such as simplifying regularly
reported items and narrowing down proposals.
• Moreover, to energize discussions at Board of Directors’ meetings, we haveassigned a general manager to help enhance both the quality and quantity of
information provided to external officers.

・The Board of Directors must secure time
for discussions on important matters bytaking a flexible approach to changing
meeting times and holding extraordinary
meetings as necessary- 31 -

Diagrams of the Company's Timely Disclosure System
Reference 2
Decisions Reached and Information on Financial Results Pertaining to the Company
Corporate Planning
Department
Compilation of matters to beresolved by the Board of
Directors

ReportCC Center< Confirm disclosure
requirement under the timely
disclosure rules*>Corporate Planning Department< Confirm disclosure
requirement under the timely
disclosure rules*>< If the results are different, theComparison of Results on
Need for Disclosure

matter will be disclosed >Report on the progress andDirector Responsible for the
Corporate Planning Department

results of the disclosure
requirement

Chairman of the Board of
Directors

Director Responsible for the
CC Center(President)
Agenda item
presentation
Board of Directors

Audit & Supervisory Board Members
Statement of opinion regarding thedisclosure requirement

Information Disclosure*Disclosure requirement: confirmation of whether an item falls under the category of "corporate information requiring disclosure"as stipulated in the timely disclosure rules- 32 -

Reference 3
Information on Decisions Reached by Subsidiaries
Resolutions by Subsidiary’s
Board of Directors
ReportReportCC Center< Confirm
disclosure requirement under
the timely disclosure rules*>Corporate Planning
Department< Confirm disclosure
requirement under thetimely disclosure rules*>Comparison of Results on Need for Disclosure< If the results are different,
the matter will be disclosed >Director Responsible
for the Corporate
Planning Department
Report on disclosure
requirement and its results
Chairman of theBoard of Directors

Director Responsible for
the CC Center(President)

Audit & Supervisory Board Members
Statement of opinion regarding thedisclosure requirement

Information
Disclosure*Disclosure requirement: confirmation of whether an item falls under the category of "corporate information requiring disclosure"as stipulated in the timely disclosure rules- 33 -

Reference 4
Information Regarding the Occurrence of Material Incidents Pertaining to the Group<Emergency occurrence>
Departments
Subsidiaries

ReportReportGeneral Affairs
Department
ReportCC Center< Confirm disclosure
requirement under thetimely disclosure rules*>Chairman of the Board of
Directors(President)

Report on the progress

Corporate Planning
Department< Confirm disclosure
requirement under thetimely disclosure rules*>Comparison of Results on Need for Disclosureand need for disclosure< If the results are different, theDirector Responsible for
the General Affairs
Department

Director Responsible for
the Corporate Planning
Department

matter will be disclosed >Report on findings about
disclosure requirement
Audit & Supervisory
Board Members

Audit & Supervisory Board Members
Statement of opinion regarding thedisclosure requirement

Director Responsible for
CC Center

Information
Disclosure*Disclosure requirement: confirmation of whether an item falls under the category of "corporate information required to bedisclosed" as stipulated in the timely disclosure rules- 34 -