Corporate Governance Report
IWAKI CO.,LTD.
Last Update: December 15, 2021

IWAKI CO.,LTD.
Representative: President: Shigeru Fujinaka
Contact: Business Management Head Office, Tel: +81-(0) 3-3254-2931
Stock Code: 6237
https://www.iwakipumps.co.jp
The corporate governance of IWAKI CO.,LTD. (“IWAKI” or the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other
Basic Information

1. Basic Views
The priorities of the IWAKI Group are fulfilling its social responsibilities to shareholders, employees, suppliers,
communities and all other stakeholders and achieving the growth of corporate value. The basic policy forcorporate governance is adherence to the IWAKI basic policy for compliance, strict compliance with corporate
ethics and laws and regulations, and the maintenance and reinforcement of internal control and risk management
systems.
All group companies recognize that strengthening corporate governance is essential for maximizing corporate
value and further increasing customer satisfaction. IWAKI believes that the establishment of a sound framework
for corporate governance and measures to further upgrade governance are needed in order to manage businessactivities with high degrees of efficiency and transparency.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code] Updated[Supplementary Principle 1.2.4]
As of March 2021, foreign investors held 9.49% of IWAKI stock. IWAKI plans to start using an electronic
voting platform in the fiscal year ending in March 2022. In addition, IWAKI will continue to provide an Englishlanguage translation (summary) of notices of shareholders meetings.
[Supplementary Principle 2.3.1]
IWAKI will continue to place priority on sustainability, including issues concerning the global environment,
human rights, the health and workplace environment for employees, fair and proper transactions with suppliers,
risk management involving natural disasters, and other items.
[Principle 4.11] Preconditions for Board and Audit & Supervisory Board EffectivenessThe composition of the IWAKI’s Board of Directors is based on a broad range of considerations to achieve theproper balance concerning careers, accomplishments, knowledge, experience, skills and other characteristics.
There are currently four directors, including two outside directors. All directors are Japanese men. IWAKI willcontinue to consider measures involving the diversity of the directors with regard to gender, nationality, businessexperience and age.
[Supplementary Principle 4.2.2]
As explained in Supplementary Principle 2.3.1, the basic policy for sustainability will be established along with
the identification of issues concerning sustainability. IWAKI plans to post this policy on its website.
[Supplementary Principle 5.2.1]
The basic policy for the business portfolio will be determined using a process that includes discussions by the-1-

Board of Directors. The policy will be announced once preparations have been completed.
[Disclosure Based on the Principles of the Corporate Governance Code] Updated[Principle1.4] Cross-shareholdings
IWAKI currently does not hold listed shares as cross-shareholdings. It is its policy not to hold listed shares as
cross-shareholdings in the future either.
[Principle 1.7] Related Party Transactions
The basic policy of IWAKI is to not engage in transactions and other business relationships with executives,
major individual shareholders, and other related parties. However, when a related party transaction is
unavoidable, a decision about whether or not to conduct the transaction is made after a sufficient examinationby the Risk Management and Compliance Committee and other units by examining the reason, necessity, terms,
fairness and other aspects of the proposed transaction.
For related party transactions, the Administration Head Office conducts a survey of all related parties for
executives once every year for the purpose of overseeing these transactions.
When there is a transaction that may be a related party transaction, the Administration Head Office performs an
examination to determine if it is a related party transaction.
If it is determined as a related party transaction as a result of the examination, a decision about approval of thetransaction is made based on a sufficient examination of the reason, necessity, terms, fairness and other aspectsof the transaction by the Board of Directors or other unit with no conflict of interest.
[Supplementary Principle 2.4.1]
IWAKI is taking actions aimed at increasing the gender and nationality diversity of people in management
positions. However, there is still no progress because of the characteristics of the business activities of the
IWAKI Group. More studies will be performed to determine actions to take for increasing diversity.
[Supplementary Principle 2.6] Roles of Corporate Pension Fund as Asset Owner
IWAKI has a defined benefit corporate pension program for making payments to employees after retirement.
There are contracts with external asset administration and management companies and other companies foradministrative and asset management tasks involving this program. The performance of these external
companies concerning returns on investments and other performance indicators is properly monitored. The
management of pension program assets is entrusted only to financial institutions and other companies that haveannounced their agreement with the Japanese Stewardship Code.
[Principle 3.1] Full Disclosure(i) Goals (corporate philosophy, etc.), Business Strategies and Business Plans
1) Our mission
Our mission is to always be at the forefront of efforts to advance development in the global markets, industries
and communities where we operate while building trust with, and contributing to the happiness of everyone
we interact with.
2) Our vision
Everyone on our team will work together to arrive at the best solution to each customers’ unique needs, thereby
growing our business while earning a second-to-none reputation for reliability.
3) Our business goal
We will lead our industries in developing and delivering reliable products and services that add clear value
for our customers, favorable circumstances for our employees and fair returns to our stakeholders.
4) Our guideline for conduct
We will build strong, long-term relationships with our customers that will enable us to be proactive in
employing our creativity and original thinking on their behalf. We will not give up!
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In addition to these elements of IWAKI’s corporate philosophy, the IWAKI website has information about
medium- to long-term visions, business strategies and other items.
The basic policy for the business portfolio will be determined later and announced once preparations havebeen completed.
(ii) Basic Views and Guidelines on Corporate Governance Based on the Principles of the Corporate
Governance CodeThis subject is explained in this report and the annual securities report.
(iii) Policies and Procedures in Determining the Remuneration of the Senior Management and Directors by the
Board of Directors
Information about the policy and procedure for determining the remuneration of senior management anddirectors is in the supplementary information in this report about the Nomination Committee andRemuneration Committee, which are voluntary committees, and about the remuneration of directors.
(iv) Policies and Procedures in the Appointment and Dismissal of the Senior Management and the Nominationof Candidates for Directors and Audit & Supervisory Board Members by the Board of Directors
IWAKI has voluntarily established a Management Advisory Committee to give advice to the Board of
Directors. The committee provides advice about appointments and dismissal of senior management andnomination of director candidates. The committee assists with decisions in order to achieve the proper overallbalance and diversity of executives and directors regarding experience, knowledge and character for making
proper and speedy decisions and for managing and overseeing risk management and business operations.
Individuals who commit fraud, violate a law or the Articles of Incorporation or some other serious infraction
will be dismissed.
Based on the policy of having at least two outside directors, IWAKI will take actions aimed at selecting
candidates covering a broad range of business fields and who meet the Tokyo Stock Exchange standards forindependence.
Due to the characteristics of IWAKI’s business activities, scale of operations, business climate, auditing
framework and other operations, candidates for election as Audit & Supervisory Board members must be able
to audit the performance of directors from a fair and objective standpoint and contribute to improving thesoundness and transparency of management. These candidates also require considerable knowledge andexperience involving corporate management and conducting business operations.
Based on the policy of having outside Audit & Supervisory Board members be at least half of all of these
individuals, IWAKI will take actions aimed at selecting candidates covering a broad range of business fields
and who meet the Tokyo Stock Exchange standards for independence.
(v) Explanations of Individual Appointments and Dismissal and Nominations with Respect to Appointments
and Dismissal of Senior Management and Nominations of Candidates for Directors and Audit &Supervisory Board Members by the Board of Directors based on (iv) above
Based on the policy explained in (iv) above, individual decisions about appointments and dismissal of senior
management and nomination of director candidates are first discussed by the Management Advisory
Committee, where the majority of members are independent outside directors. Final decisions are made byresolutions of the Board of Directors while placing emphasis on the conclusions reached by the discussion.
Information about the backgrounds of individual candidates for election as directors and Audit & Supervisory
Board members is in notices of shareholders meetings. These notices also include the reasons for the selectionof each outside director and outside Audit & Supervisory Board member candidate.
[Supplementary Principle 3.1.3]
As is explained in Supplementary Principle 2.3.1, IWAKI will take actions involving sustainability.
-3-There will also be studies concerning the disclosure of information about investments in human resources.
[Supplementary Principle 4.1.1]
Agenda items for the Board of Directors are items prescribed by laws and regulations and the Articles ofIncorporation and other important matters to be decided. The scope of these items is defined in the Rules for
Administrative Authority. For the authority to conduct other general tasks, the basic policy is to increase theagility and flexibility of business activities and raise the vigor of management. The roles and authorities ofindividual directors are stipulated in the Division of Duties Rules and the Rules for Administrative Authority.
[Principle 4.9] Independence Criteria and Qualification for Independent Directors
The selection of candidates for election as independent outside directors is based on the requirements of theCompanies Act and the Tokyo Stock Exchange standards for independence for independent officers.
[Supplementary Principle 4.10.1]
IWAKI has a Management Advisory Committee that holds regular meetings at least once every year and where
the majority of members are independent outside directors. This committee discusses Nomination, remunerationand other matters concerning senior executives and directors and the Board of Directors approves resolutions
about these matters while placing emphasis on the conclusions reached by these discussions.
In addition, beginning with the fiscal year ending in March 2022, this committee submits reports to the Boardof Directors about the selection and training of individuals who are candidates to succeed senior executives in
the future.
[Supplementary Principle 4.11.1]
Candidates for election as directors are selected based on their overall suitability. Considerations include theability to make proper and speedy decisions about management, knowledge about corporate governance, theability to oversee how businesses are conducted, and the balance of the Board of Directors with respect toknowledge, experience and skills.
Beginning with the notice of the next shareholders meeting, IWAKI plans to include a Board of Directors skill
matrix.
[Supplementary Principle 4.11.2]
Information about significant concurrent positions of directors and Audit & Supervisory Board members andthese candidates is in the reference materials of shareholders meeting notices, business reports and otherdocuments in every year.
[Supplementary Principle 4.11.3]
Based on the statements, questions and answers, and discussions involving all directors at the Board of Directors,
the Board of Directors has conducted a self-evaluation and concluded that the directors are effectively
performing their functions of making decisions and overseeing how business operations are conducted.
Evaluations of the effectiveness of the directors and Audit & Supervisory Board members are continuously
conducted and a summary of the results are disclosed.
[Supplementary Principle 4.14.2]
Directors and Audit & Supervisory Board members receive opportunities to undergo training in order to enable
them to perform their functions sufficiently.
In addition, outside directors and outside Audit & Supervisory Board members have the opportunity to increase
their understanding of IWAKI by receiving explanations of IWAKI’s business strategies, business activities,
finances, organization and other items to enable them to perform their roles.

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[Principle 5.1] Policy for Constructive Dialogue with Shareholders
IWAKI has a policy of holding frequent dialogues with shareholders and other investors for the purposes ofgiving these individuals an understanding of IWAKI’s goals and receiving valuable feedback that can contributeto the sustained growth of the company and medium to long-term growth of corporate value. The department
responsible for investor relations plays a central role in conducting these constructive dialogues.

2. Capital Structure
Foreign Shareholding Ratio

Less than 10%[Status of Major Shareholders] Updated
Name / Company Name
Kabushiki-gaisha Fujinaka Holdings
Shigeru Fujinaka
Rumi Fujinaka
Iwaki Employee Stock Ownership Association
The Master Trust Bank of Japan, Ltd.
Custody Bank of Japan, Ltd.
Iwaki Sangyo Kabushiki-gaisha
Yuko Fujinaka
Teruhiko Kamijo
STATE STREET BANK AND TRUST COMPANY 505103
Controlling Shareholder (except for Parent Company)
Parent Company

Number of Shares Owned
2,700,000
1,939,948
1,887,020
1,747,240
1,413,800
943,600
856,750
852,470
450,000
416,800

Percentage (%)
12.32
8.85
8.61
7.97
6.45
4.30
3.91
3.89
2.05
1.90

None

Supplementary Explanation Updated
1. The above major shareholders are as of September 30, 2021.
2. Treasury stocks of 585,863 shares are not included in the above list.
3. The number of shares in the above list includes the following numbers of shares held in trust accounts: 606,700
shares at The Master Trust Bank of Japan, Ltd. (Trust Account) and 656,100 shares at Custody Bank of Japan,
Ltd. (Trust Account).

3. Corporate Attributes
Listed Stock Market and Market Section
Fiscal Year-End
Type of Business
Number of Employees (consolidated) as of the End of thePrevious Fiscal YearSales (consolidated) for the Previous Fiscal Year
Number of Consolidated Subsidiaries as of the End of thePrevious Fiscal YearTokyo Stock Exchange First Section
March
Machinery
From 500 to less than 1,000
From ¥10 billion to less than ¥100 billion
Less than 10

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder
5. Other Special Circumstances which may Have Material Impact on Corporate Governance--5-II. Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Organization Form
[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation
Term of Office Stipulated in Articles ofIncorporation
Chairperson of the Board
Number of Directors
Election of Outside Directors
Number of Outside Directors
Number of Independent Directors

Company with the Audit & Supervisory Board

15
Two years
President
4
Yes
2
2

Outside Directors’ Relationship with the Company (1)Name

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

Attributeabjk
Toshihiro Kayahara From other company
Kenichi Ogura
From other company* 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 company 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 otherproperty from the Company besides compensation as a Director/Audit & Supervisory Board Member
g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is alegal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f)(the Director himself/herself only)
i. Executive of a company, between which and the Company Outside Directors/Audit & Supervisory Board
Members are mutually appointed (the Director himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (the Director
himself/herself only)
k. Others-6-Outside Directors’ Relationship with the Company (2)NameToshihiro
Kayahara

Kenichi
Ogura

Designation as
Independent
Director○○

Supplementary Explanation of theRelationship
Mr. Kayahara was Managing Director
and Senior General Manager ofTechnology Development Department
at MIURA Co., Ltd., which purchases
IWAKI products, until June 2009.
He had no significant relationship with
MIURA after leaving this company.
Sales to MIURA as a percentage of
IWAKI’s consolidated sales are
negligible.
Due to the size and nature oftransactions with MIURA and Mr.
Kayahara’s present relationship with
MIURA, IWAKI believes there is no
possibility of a conflict of interest withordinary shareholders of IWAKI.
Mr. Ogura was a director responsible
for sales at DAILITE Co., Ltd., asupplier of IWAKI, until December
2012. He had no significant
relationship with DAILITE after
leaving this company.
Procurement of items from DAILITE
as a percentage of IWAKI’s
consolidated procurement activities are
negligible.
Due to the size and nature oftransactions with DAILITE and Mr.
Ogura’s present relationship withDAILITE, IWAKI believes there is no
possibility of a conflict of interest withordinary shareholders of IWAKI.

Voluntary Establishment of Committee(s) Corresponding toNomination Committee or Remuneration Committee

Reasons of Appointment
Mr. Kayahara can use his many yearsof experience as a director of a listedcompany and considerable knowledgeof the industrial machinery industry toprovide objective, broad and expert
advice about IWAKI’s businessactivities.
In addition, he has not been a directorof MIURA for many years and IWAKI
believes that there is no risk of aconflict of interest with ordinary
shareholders. As a result, he isbelieved to be independent and has
therefore been designed an
independent director of IWAKI.
Mr. Ogura has considerable experienceand knowledge of the resin tankindustry, where he worked for many
years and which has a very close
relationship with the industrial
machinery industry, IWAKI’s businesssector. He can use this background toprovide objective, broad and expert
advice about IWAKI’s businessactivities.
In addition, he has not been a directorof DAILITE for many years andcurrently has no relationship withDAILITE. IWAKI believes that there isno risk of a conflict of interest withordinary shareholders. As a result, he isbelieved to be independent and has
therefore been designed an independent
director of IWAKI.
Established

Committee’s Name, Composition, and Attributes of Chairperson

Committee’s NameAll Committee Members
Full-time Members

Committee Corresponding toNomination Committee
Management Advisory Committee
30-7-Committee Corresponding to
Remuneration Committee
Management Advisory Committee
30Internal Directors
Outside Directors
Outside Experts
Other
Chairperson

1200Internal director1200Internal director

Supplementary Explanations
The Management Advisory Committee was established by IWAKI voluntarily to provide advice to the Boardof Directors. The committee has three members with outside directors a majority: one representative directorof IWAKI and two outside directors. The committee meets on a regular basis after the end of every fiscal year
and at other times as needed.
To contribute to the transparency of IWAKI’s management, the Management Advisory Committee discusses
the remuneration of directors and senior executives and the policy for determining this remuneration, thenomination of director candidates, appointments and dismissal of senior executives, and other subjects andreports the conclusions of these discussions to the Board of Directors.
[Audit & Supervisory Board Members]
Establishment of Audit & Supervisory Board
Maximum Number of Audit & Supervisory Board Members
Stipulated in Articles of Incorporation
Number of Audit & Supervisory Board Members

Established5
4

Cooperation among Audit & Supervisory Board Members, Accounting Auditors and Internal Audit
Departments
An auditing meeting is held every quarter of the fiscal year and is attended by the accounting auditor, Audit &Supervisory Board members and members of the Internal Audit Office. These three parties exchange opinions
and information for the purpose of conducting internal audits more efficiently.
Appointment of Outside Audit & Supervisory Board Members
Number of Outside Audit & Supervisory Board Members
Number of Independent Outside Audit & Supervisory Board
Members

Appointed
22Outside Audit & Supervisory Board Members’ Relationship with the Company (1)NameAttributeab

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

l

m

Masahiro Nagasawa Certified public accountant
Yoshinori Hosoya Attorney* Categories for “Relationship with the Company”* “○” when the Audit & Supervisory Board Member presently falls or has recently fallen under the
category;“△” when the Audit & Supervisory Board Member fell under the category in the past
* “●” when a close relative of the Audit & Supervisory Board Member presently falls or has recently fallen
under the category;“▲”when a close relative of the Audit & Supervisory Board Member fell under the category in the past-8-

a. Executive of the Company or its subsidiaries
b. 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 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 otherproperty from the Company besides compensation as an Audit & Supervisory Board Member
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is alegal entity)
j. Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h)(the Audit & Supervisory Board Member himself/herself only)
k. Executive of a company, between which and the Company Outside Directors/Audit & Supervisory Board
Members are mutually appointed (the Audit & Supervisory Board Member himself/herself only)
l. Executive of a company or organization that receives a donation from the Company (the Audit &Supervisory Board Member himself/herself only)
m. Others
Outside Audit & Supervisory Board Members’ Relationship with the Company (2)Name

Designation as
Independent Audit& Supervisory
Board Member

Masahiro
Nagasawa○

Yoshinori
Hosoya○Supplementary Explanation of theRelationship
Mr. Nagasawa was an engagement
partner of KPMG AZSA LLC, theaccounting auditor of IWAKI,
between 2002 and 2012. Heparticipated in audits of IWAKI fromthe fiscal year that ended in
November 2006 to the fiscal year that
ended in March 2012. He had no
significant relationship with KMPGAZSA after leaving this company.
IWAKI paid KMPG AZSA 38,000
thousand yen for auditing and otherservices for the fiscal year ended
March 2021, which is a negligible
pct. of this firm’s total revenue.
Due to the size and nature oftransactions with KMPG AZSA andMr. Nagasawa’s present relationshipwith KMPG AZSA, IWAKI believes
there is no possibility of a conflict ofinterest with ordinary shareholders of
IWAKI.
IWAKI had a business relationshipwith Keiwa Sogo Law Offices(established by Mr. Hosoya and two-9-

Reasons of Appointment
As a certified public accountant, Mr.
Nagasawa has considerable
experience and knowledge about
corporate accounting. He can use
these skills to perform audits using abroad perspective and accounting
expertise. In addition, he has not beena director of KMPG AZSA for many
years and IWAKI believes that there
is no risk of a conflict of interest withordinary shareholders. As a result, heis believed to be independent and has
therefore been designed an
independent director of IWAKI.

Mr. Hosoya was selected for election
as an outside Audit & Supervisory
Board member because his manyothers) between December 2008 andJuly 2014. Revenue from IWAKI wasa negligible pct. of this firm’s total
revenue. IWAKI had no relationshipwith this law office since then.
Due to the size and nature oftransactions with Keiwa Sogo Law
Offices and Mr. Hosoya’s present
relationship with Keiwa Sogo Law
Offices, IWAKI believes there is no
possibility of a conflict of interest
with ordinary shareholders of IWAKI.

years of experience as an attorney andextensive knowledge makes him
qualified for this position.
There was a business relationshipbetween IWAKI and Keiwa Sogo
Law Offices (established by Mr.
Hosoya and two others) between
December 2008 and July 2014.
However, payments to this law
office were negligible and there wasno relationship afterward. IWAKI
believes that there is no risk of aconflict of interest with ordinary
shareholders. As a result, he isbelieved to be independent and has
therefore been designed an
independent director of IWAKI.

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

4

Matters relating to Independent Directors/Audit and Supervisory Board Members
All outside officers (two outside directors and two outside Audit & Supervisory Board members) who qualify
as independent officers are designated as independent officers.
[Incentives]
Incentive Policies for Directors

Performance-linked stock compensation plan

Supplementary Explanation
Director remuneration is explained in “Policy on Determining Remuneration Amounts and Calculation
Methods.”
Recipients of Stock Options
Supplementary Explanation[Director Remuneration]
Disclosure of Individual Directors’ Remuneration

Selected Directors

Supplementary Explanation
Remuneration for directors and the Audit & Supervisory Board members for the fiscal year ended March 2021
 Total amount of remuneration paid to directors (excluding outside directors): 263,819 thousand yen Total amount of remuneration paid to Audit & Supervisory Board members (excluding outside Audit &Supervisory Board members): 36,630 thousand yen- 10 -

Remuneration for directors includes restricted stock (distributed to eight directors other than outside directors)of 17,981 thousand yen that was recognized as an expense in the fiscal year ended March 2021.
Information about directors who received remuneration of at least 100 million yen is disclosed individually in
the Securities Report.
Policy on Determining Remuneration Amounts and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
IWAKI uses the following policy for the determination of remuneration for directors.
To contribute to the long-term and sustained growth of corporate value, the remuneration of directors is linked
to earnings for shareholders and at a sufficient level to attract and retain skilled managers. Beginning with thefiscal year ending in March 2022, restricted stock remuneration has been changed to a payment after anindividual leaves IWAKI. The purpose is to increase the incentive to achieve the medium to long-term andsustained growth of corporate value during a director’s entire term of office and to increase shared values
between directors and shareholders.
Remuneration for directors has three components: basic remuneration, performance-linked remuneration, andnon-cash remuneration (restricted stock). Total remuneration cannot exceed the limit approved at shareholders
meetings.
The performance indicators used for performance-linked remuneration and restricted stock are the degree towhich the target for profit attributable to owners of parent (net income) was achieved and the growth rate ofearnings per share. Net income is followed closely by investors because this is a source of funds forinvestments for growth and for distributions to shareholders. Earnings per share was selected because this is anindicator to increase shared values with shareholders and link the growth of shared values with IWAKI’s
results of operations.
The basic, performance-linked and non-cash (restricted stock) remuneration for individual directors isdetermined at the Board of Directors based on quantitative parameters such as the business climate, the level ofachievement of business plans, including business budget and medium-term plans and other targets.
Remuneration also reflects the roles and responsibilities of each director, the achievement of goals and otheritems. The remuneration of outside directors is based on monthly basic remuneration. This remuneration isdetermined by the Board of Directors based on the roles and responsibilities of each outside director. Prior to
the determination of remuneration by the Board of Directors, remuneration is discussed by the Management
Advisory Committee, a voluntarily established committee that provides advice to the Board of Directors.
The remuneration of Audit & Supervisory Board members is based on monthly basic remuneration within thelimit for total remuneration for these members approved at shareholders meetings. The remuneration ofindividual Audit & Supervisory Board members is determined by the mutual agreement of these members andis provided at a fixed amount based on the roles and responsibilities of each member.
[Supporting System for Outside Directors and/or Audit & Supervisory Board Members]
There are no employees assigned exclusively to assist the outside directors and outside Audit & Supervisory
Board members. Support is provided by head office administrative departments, primarily the Administration
Head Office. This support includes distribution of notices and documents concerning the Board of Directors,
reports about the status of business operations, the collection and distribution of documents required for audits
and other activities, and other assistance as needed.

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[Retired Representative Directors, Presidents, Etc.]
Profile of Senior Advisors, Etc. Who Are Former Representative Directors/Presidents, Etc.

Name-

Position-

Employment terms(Full time or not,remuneration or not)-Job responsibilities-

Date ofresignation aspresident, etc.
-

Number of senior advisors, etc. who are former representative directors/presidents, etc.

Term0

Other Matters
This program exists but there are currently no applicable individuals.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System)
IWAKI uses the current governance structure for the purposes of strengthening the oversight of management andmaintaining the soundness of management.
IWAKI has a shareholders meeting, Board of Directors, Audit & Supervisory Board and an accounting auditor.
There are four directors, including two internal and two outside directors, and four Audit & Supervisory Board
members, including two internal and two outside members. For internal audits, there is an Internal Audit Office thatreports directly to the president and performs periodic internal audits to confirm that their duties are performed incompliance with laws and regulations and the Articles of Incorporation.
The following meetings are held regularly for the purpose of making decisions about important matters involving
management and about how business activities are conducted.
1. Management Meeting
As a rule, this meeting is held once every month. Members are the internal directors, internal Audit & Supervisory
Board members, executive officers and other managers. This meeting makes decisions about basic and importantmatters concerning business activities, including budgets, entrusted to this meeting by the Board of Directors,
other than items that the directors must handle.
2. Senior General Managers Meeting
As a rule, this meeting is held once every month. Members are the directors, Audit & Supervisory Board
members, executive officers, senior general managers of divisions and departments, and others. This meeting is
responsible for preliminary discussions of items to be submitted to the Management Meeting and Board of
Directors and discussions of basic and important items concerning business activities, including budgets.
3. Risk Management and Compliance Committee
As a rule, this committee meets once every quarter of a fiscal year. This committee is chaired by the senior generalmanager of the Administration Head Office and the members are the directors, Audit & Supervisory Board
members, executive officers, senior general managers of divisions and departments, and the IWAKI consulting
attorney and other external experts. The committee is responsible for maintaining and strengthening an
administrative structure for ensuring that risk management is performed properly, preventive measures are in placeconcerning risk factors and the occurrence of a problem can be handled properly.
4. Group Company Management Meeting
As a rule, this meeting is held once every month. Members are the directors, Audit & Supervisory Board
members, executive officers, and senior general managers of divisions and departments and others involved with- 12 -

group management and group company executives. This committee discusses matters concerning groupcompanies and makes decisions about these matters.

3. Reasons for Adoption of Current Corporate Governance System
IWAKI has a commitment to effective governance that combines two elements. One is audits by an Audit &Supervisory Board that includes members from outside the IWAKI Group who are independent and haveprofessional knowledge about laws, accounting and other subjects. These audits are performed by working closelywith the accounting auditor and the Internal Audit Office. The other element is the oversight of how businessactivities are conducted by a Board of Directors that includes independent outside directors who are independentand have considerable experience and knowledge about management and other subjects.
IWAKI selected this governance system based on the belief that this is an effective structure for ensuring thesoundness of corporate governance and facilitating the proper and efficient management of business operations.

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III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights
Supplementary Explanations
Notices of shareholders meetings are sent seven days earlier than the legally
Early Notification of General
required deadline in order to conduct fiscal year end accounting procedures
Shareholder Meeting
earlier. More activities are planned in order to send notices even earlier.
Scheduling General
IWAKI will consider holding shareholders meetings on days other thanShareholder Meeting Avoiding when most other companies with the same fiscal year end hold their
the Peak Day
shareholders meetings.
Notices of shareholders meetings are posed on the IWAKI website on the
Other
day that the notices are sent.
2. IR Activities
Supplementary Explanations
Preparation and Announcementof Disclosure Policy
Regular Investor Briefings for
Individual Investors
Regular Investor Briefings forAnalysts and Institutional
Investors
Posting of IR Materials on
WebsiteEstablishment of Department
and/or Manager in Charge of IR

Presentation
by President

IWAKI’S disclosure policy is posted on its website.
https://www.iwakipumps.co.jp/ir/disclosure.html
IWAKI regularly holds briefings for individual investors.
IWAKI holds information meetings for analysts andinstitutional investors at the end of the first half of every
fiscal year and the end of every fiscal year.
IWAKI posts financial results, supplementary materials,
securities reports, quarterly reports and other timely
disclosure materials on its website.
The Corporate Planning Department of the Business
Management Head Office is responsible for investor
relations.

Yes
Yes

3. Measures to Ensure Due Respect for Stakeholders

Stipulation of Internal Rules for
Respecting the Position of
Stakeholders

Implementation ofEnvironmental Activities, CSR
Activities, etc.

Development of Policies on
Information Provision to
Stakeholders

Supplementary Explanations
IWAKI has established a basic policy for compliance in order to fulfill its
social responsibilities. All executives and employees at the IWAKI Group is
given a sound understanding of the importance of complying with laws andregulations as well as conducting all business activities in accordance withhigh ethical standards.
IWAKI recognizes that environmental activities are one of the mostimportant social responsibilities of a company. Major production bases(Saitama Plant, Miharu Plant) have received ISO14001 certification andhave energy conservation and other programs (“green” procurement) inorder to reduce the environmental impact of business activities.
IWAKI recognizes that one of the duties of a listed company is the timely
and accurate disclosure of information to shareholders, suppliers and allother stakeholders. The basic policy for compliance also includes thisobligation. To fulfill this obligation, IWAKI uses its website and other waysof making information accessible in order to disclose corporate information
with speed and accuracy.

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IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development
In accordance with Article 362, Paragraph 4-6 of the Companies Act, IWAKI has established the following basic
policy concerning a system of internal controls. The purposes are to maintain a framework for ensuring that thedirectors perform their duties in accordance with laws and regulations and the Articles of Incorporation and aframework for ensuring that all business activities are conducted properly.
1. System for ensuring that directors and employees perform their duties in compliance with laws and regulations
and the Articles of Incorporation(1) IWAKI has established a basic policy for compliance that defines the items requiring compliance in order toensure that business activities comply with laws and regulations, corporate ethics, and internal rules. There areprograms to make executives and employees at the IWAKI Group aware of this compliance policy.
(2) The basic policy for compliance states that IWAKI will refuse to have any contact with anti-social forces andorganizations that threaten public order and safety. IWAKI works closely with the police and other agencies forthe elimination of anti-social forces.
(3) The Risk Management and Compliance Committee promotes compliance management and oversees activities
concerning the basic policy for compliance. This committee is chaired by the senior general manager of the
Administration Head Office and the members are the directors, Audit & Supervisory Board members, executive
officers, senior general managers of divisions and departments, and the IWAKI consulting attorney and otherexternal experts.
(4) IWAKI has established a basic policy for an internal control system for financial reports to ensure the reliabilityof these reports. There are activities for the establishment of rules, manuals, procedures and other components ofan internal control system for financial reports. There are also activities to strengthen the framework for
implementing these internal control measures.
(5) The Internal Audit Office, which reports directly to the president, is responsible for internal audits. These audits
are conducted on a regular basis to confirm that all business activities are conducted in compliance with laws
and regulations and the Articles of Incorporation.
(6) Audit & Supervisory Board members attend meetings of the Board of Directors and other important meetings toaudit the performance of the directors’ duties.
(7) IWAKI has an internal reporting system based on the Internal Report Rules to provide employees with a channel
for directly reporting behavior that may violate laws or regulations or be improper in other ways. The aim is tofacilitate the rapid discovery of improper activities.
2. System for the storage and management of information about the performance of directors’ duties(1) In accordance with Document Management Rules and Business Confidentiality Management Rules, IWAKI
properly manages legal documents, such as minutes of shareholders meetings and Board of Directors meetings,
documents with important information, and other important information.
(2) Directors and Audit & Supervisory Board members can view these documents and other important information
as needed to perform their supervision and auditing duties.
3. Regulations and other systems for the risk management of losses(1) IWAKI has Risk Management Rules for the purposes of preventing problems from occurring and minimizing
losses at IWAKI and its group companies.
(2) IWAKI has a Risk Management and Compliance Committee for the purpose of properly managing risk. The
committee is responsible for maintaining and reinforcing an infrastructure for preventing problems fromoccurring in advance and properly responding in the event that a problem occurs.

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4. System for ensuring that directors perform their duties efficiently(1) The Board of Directors meets once every month. At these meetings, the directors and Audit & Supervisory
Board members make decisions about important matters, hold discussions and exchange opinions. All directors
work together to supervise the performance of their duties.
(2) In addition to these regular meetings of the Board of Directors, the Management Meeting is held once every
month with the attendance of internal directors, internal Audit & Supervisory Board members and executive
officers. This meeting makes decisions about basic and important matters concerning business activities,
including budgets, entrusted to the meeting by the Board of Directors, other than items that the directors must
handle.
(3) Senior General Managers Meeting is held once every month. Members are the directors, Audit & Supervisory
Board members, executive officers, senior general managers of divisions and departments, and others. This
meeting is responsible for preliminary discussions of items to be submitted to the Management Meeting and
Board of Directors and discussions of basic and important items concerning business activities, including
budgets.
(4) For business operations, medium-term management plans that reflect the outlook for the business climate in the
future and fiscal-year budget plans are created and targets for the entire company are established. Then every
department establishes its concrete action plan for accomplishing these targets.
(5) Authority is delegated and decision-making rules are determined in accordance with rules for the Board of
Directors, the assignment of business responsibilities, the delegation of authority for businesses, the decisionmaking process, Management Meeting and other items. These rules collectively establish a framework for the
directors, executive officers, senior general managers of divisions and departments, and others to perform theirduties properly and efficiently.
5. System for ensuring the suitability of business operations of the corporate group consisting of the Company andits subsidiaries(1) System relating to reporting of matters pertaining to the execution of duties by directors, etc., of subsidiaries to
the Company
The Group Company Management Department of IWAKI oversees the management of group companies while
respecting the autonomy of these companies. In accordance with Rules for the Management of Group
Companies, these companies are required to submit reports periodically to IWAKI concerning their results ofoperations, financial position and other important information. In addition, the Group Company Management
Meeting is held regularly to discuss and make decisions about important matters and is required to submit
reports on its activities. Members are those of the Board of Directors and other directors, Audit & Supervisory
Board members, executive officers, and senior general managers of divisions and departments and others
involved with group management and group company executives.
(2) Regulations and other systems for the risk management of losses of subsidiaries to the Company
The IWAKI Group’s risk management framework uses the collection of information by the Group Company
Management Department and the sharing of information among group companies in order to monitor andmaintain a risk management infrastructure for the entire group.
(3) System for ensuring that directors, etc. of subsidiaries perform their duties efficiently
IWAKI establishes medium-term management plans and fiscal-year budget plans on a consolidated basis inorder to establish a vision and targets for the IWAKI Group. To accomplish the goals of these plans, IWAKI
provides management guidance and other support to subsidiaries and uses the Group Company Management
Meeting and other channels for sharing information in order to rigorously manage activities involving
consolidated budgets and plans.
(4) System for ensuring that directors and employees of subsidiaries perform their duties in compliance with laws
and regulations and the Articles of Incorporation
1) IWAKI sends executives to serve as directors of subsidiaries in order to oversee how business activities are
conducted by these companies. Guidance is provided to the directors and employees of subsidiaries for- 16 -

ensuring that their duties are performed in compliance with laws and regulations and the Articles ofIncorporation.
2) IWAKI sends individuals as needed to serve as Audit & Supervisory Board members at subsidiaries. By
performing audits of how business activities are conducted at subsidiaries, these auditors ensure that thedirectors and employees of these companies perform their duties in compliance with laws and regulations andthe Articles of Incorporation.
3) The Internal Audit Office of IWAKI performs internal audits of subsidiaries periodically to ensure that thedirectors and employees of these companies perform their duties in compliance with laws and regulations andthe Articles of Incorporation.
6. Matters concerning requests by Audit & Supervisory Board members for employees to assist with their duties
There are currently no employees assigned exclusively to assist the Audit & Supervisory Board members performtheir audits. When one of these members asks for assistance, based on the mutual agreement of these members, one
or more suitable employees will be assigned to act solely as an assistant.
7. Matters concerning ensuring the independence of auditing assistants from the directors and effectiveness of
instructions(1) When one or more employees are named to assist the Audit & Supervisory Board members, to ensure theindependence and effectiveness of the instructions, the directors must hold discussions in advance with the fulltime Audit & Supervisory Board members before one of these assistants is transferred, evaluated or punished.
(2) An employee who has received a request from an Audit & Supervisory Board member to assist with audits is
prohibited from accepting instructions or orders regarding the request from a director, the individual’s directsupervisor or other supervisor.
8. System for reports by directors and employees to Audit & Supervisory Board members and for reports to thesemembers by directors and other executives, employees and other workers who received a report from thesemembers at subsidiaries(1) Audit & Supervisory Board members receive reports about important matters from directors and employees atmeetings of the Board of Directors, Management Meeting, Senior General Managers Meeting, Group Company
Management Meeting, Risk Management and Compliance Committee, and other committees.
(2) When the Audit & Supervisory Board members receive reports from directors, employees, the accounting
auditor and others, this information is reported at meetings of the Audit & Supervisory Board as needed.
(3) Audit & Supervisory Board members view significant decision-making documents and other important
documents concerning business activities and, as needed, ask for explanations from directors, executive officers,
senior general managers of divisions and departments, and others.
(4) Directors and employees of IWAKI and its subsidiaries are allowed to submit reports directly to Audit &Supervisory Board members about facts and other information that may result in significant losses for IWAKI.
(5) The Group Company Management Department reports to the Audit & Supervisory Board members any
information received from directors and employees of subsidiaries about facts and other information that may
result in loss at the subsidiary.
9. System for ensuring no negative consequences for individuals who submit reports to Audit & Supervisory Board
Members(1) IWAKI will not subject a director or employee of IWAKI or its subsidiaries to harmful treatment because of areport submitted to an Audit & Supervisory Board member.
(2) IWAKI oversees and performs supervision to confirm that the working environment of an individual who
submitted a report has not become worse because the report was submitted. If IWAKI discovers that theindividual who submitted a report has received harmful treatment, corrective actions will be taken immediately.

- 17 -

10. Policy concerning prepayment or reimbursement procedure for expenses resulting from execution of duties by
the Audit and Supervisory Board members and the treatment of other expenses or debt resulting from executionof duties by the Audit and Supervisory Board members
When an Audit & Supervisory Board member asks for the payment of expenses required for the performance of
duties, IWAKI will promptly pay the expenses as requested.
11. Other systems for ensuring that audits by the Audit & Supervisory Board Members are performed effectively(1) The Audit & Supervisory Board prepares auditing plans and reports these plans to the Board of Directors.
(2) The Audit & Supervisory Board members exchange opinions in an appropriate manner with the president andCEO and the accounting auditor.
(3) The Audit & Supervisory Board members work with the Internal Audit Office to ensure the effectiveness ofaudits.

2. Basic Views on Eliminating Anti-Social Forces
The policy, standards and other items concerning anti-social forces are in the basic policy for compliance section
titled “Rejection of Relationships with Anti-Social Forces.” Activities take place repeatedly at every businesslocation to make people aware of this policy.
IWAKI has a Risk Management and Compliance Committee and a conference for measures involving complianceand risk management for anti-social forces. The Administration Head Office is responsible for activities concerning
anti-social forces. To provide guidance involving anti-social forces for business activities, IWAKI has prepared
Anti-Social Forces Investigation Guidelines and a Manual for Checking Business Counterparties. A counterparty is
examined to confirm it is not an anti-social force before starting a business relationship.
In addition, IWAKI thoroughly takes actions to eliminate anti-social forces, such as by including clauses for theelimination of anti-social forces in contracts with suppliers.
IWAKI works with external organizations for activities involving anti-social forces, including membership in the
Manseibashi Special Violence Prevention Association and various measures for collecting information about antisocial forces.

- 18 -

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

Not Adopted

Supplementary Explanation-

2. Other Matters Concerning Corporate Governance System-- 19 -

- 20 -

- 21 -