This document has been translated from the Japanese original version for the reference and convenience of non-Japaneseshareholders without any warranty for its accuracy or otherwise. In the event of any discrepancy between this translation
version and the Japanese original version, the Japanese original shall prevail.

Securities identification code: 6376
March 9, 2020

To our shareholders:Toshihiko Kai

President & Representative Director

NIKKISO CO., LTD.
4-20-3 Ebisu, Shibuya-ku, TokyoNOTICE OF THE 79TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 79th Ordinary General Meeting of Shareholders of NIKKISO CO.,LTD. (the “Company”), which will be held as described below.
If you are unable to attend the meeting in person, you may exercise your voting rights by postal mail or
via the Internet (see Page 3). Please indicate your approval or disapproval of the proposals on theenclosed voting form after reviewing the attached Reference Documents for the General Meeting of
Shareholders, and return it by postal mail or via the Internet to reach us no later than 5:30 p.m., Thursday,
March 26, 2020 (Japan Standard Time).

Meeting Details
1.

Date and time:

Friday, March 27, 2020, at 10:00 a.m. (Japan Standard Time)(The reception desk will open from 9:00 a.m.)2.

Venue:

Nikkiso Higashimurayama Plant, R&D Center
Multi-Purpose Bldg. 7F, Conference Room
2-16-2 Noguchi-cho, Higashimurayama-shi, Tokyo

3.

Purposes:
Items to be reported:
1. Business Report and Consolidated Financial Statements for the 79th Term (from January 1,
2019 to December 31, 2019), as well as the results of audits of the Consolidated Financial
Statements by the Accounting Auditor and the Audit & Supervisory Board
2. Non-Consolidated Financial Statements for the 79th Term (from January 1, 2019 to
December 31, 2019)
Items to be resolved:
Proposal 1:
Election of seven (7) Directors
Proposal 2:
Election of one (1) Audit & Supervisory Board Member

14.

Other decisions concerning convocation of this General Meeting of Shareholders(1)

Voting by postal mailPlease follow the “Instructions on How to Exercise Voting Rights”(Page 3), indicate your approval or disapproval of each proposal on theenclosed voting form, and return it by mail to reach us by the below
deadline.
Thursday, March 26, 2020, at 5:30 p.m. (Japan Standard Time)(2)

Voting via the Internet

Please follow the “When exercising your voting rights via the Internet”(Page 4, Japanese only), and exercise your voting rights by the below
deadline from the voting website designated by the Company(https://www.web54.net).
Thursday, March 26, 2020, at 5:30 p.m. (Japan Standard Time)(3)

Voting by multiple methods
such as by postal mail andvia the Internet

If you have exercised your voting rights through multiple methods suchas by postal mail and via the Internet, etc., the vote that has reached theCompany last shall be deemed effective.
However, if voting rights are exercised by postal mail and via theInternet on the same date, the exercise of voting rights via the Internet
shall be deemed effective.

(4)

Voting multiple times via
the Internet

If you exercise your voting rights multiple times via the Internet, thelast exercise shall be deemed effective.

 If you will attend the meeting, please submit the enclosed voting form at the reception desk of the General
Meeting of Shareholders.
 Of the documents to be submitted upon this notification, the following matters are posted on the Company’s
website (https://www.nikkiso.co.jp) pursuant to laws and regulations as well as Article 19 of the Company’s
Articles of Incorporation, and thus these documents are not included in the attached documents.
1) Stock acquisition rights, etc. of the Company in the Business Report
2) System to Ensure Business Appropriateness in the Business Report (Basic Policy on Internal Control)3) Notes to the Consolidated Financial Statements
4) Notes to the Non-Consolidated Financial Statements
These items are included in the Business Report, Consolidated Financial Statements and Non-Consolidated
Financial Statements audited when the Audit & Supervisory Board Members prepare the Audit Report. In
addition, items 3) and 4) in the above are included in the Consolidated Financial Statements and NonConsolidated Financial Statements audited when the Accounting Auditor prepares the Accounting Audit Report.
 In the event of circumstances requiring amendments to the Business Report, Consolidated Financial Statements,
Non-Consolidated Financial Statements, and Reference Documents for the General Meeting of Shareholders, thematters that have been amended will be posted on the Company’s website (https://www.nikkiso.co.jp).

2

Instructions on How to Exercise Voting Rights
Voting rights can be exercised with the following three (3) methods.
When attending the General Meeting of Shareholders
Please submit the enclosed voting form at the reception desk of the General Meeting of
Shareholders. (You are not required to sign and affix a seal on this form.)
Date and time:
Venue:

Friday, March 27, 2020, at 10:00 a.m. (Japan Standard Time)(The reception desk will open from 9:00 a.m.)
Nikkiso Higashimurayama Plant, R&D Center
Multi-Purpose Bldg. 7F, Conference Room
* Please refrain from coming to the venue by car.

When exercising your voting rights by postal mail (voting form)
Please indicate your approval or disapproval of the proposals on the enclosed voting form, and thenreturn the form to us by postal mail without affixing a stamp.
Deadline for Must be received by the Company by 5:30 p.m. on Thursday, March 26,
exercising your 2020 (Japan Standard Time)voting rights:
When exercising your voting rights via the Internet
Follow the instructions given under “When exercising your voting rights via the Internet” on the next
page (Japanese only). If you are unsure about exercising your voting rights via the Internet, pleasecontact Stock Transfer Agency Web Support, Sumitomo Mitsui Trust Bank, Limited, listed on thenext page.
Deadline forexercising yourvoting rights:

Must be exercised by 5:30 p.m. on Thursday, March 26, 2020 (Japan
Standard Time)3

Reference Documents for the General Meeting of Shareholders
Proposals and Reference Information

Proposal 1:

Election of seven (7) Directors

The terms of all of the current eight (8) Directors will expire at the conclusion of this Ordinary
General Meeting of Shareholders. The Company proposes that the number of Directors be decreased
by one, and seven (7) Directors be elected in the next term (80th Term).
The candidates for Director are shown below. These candidates are nominated in accordance with
the Company’s Policies and Procedure for Nominating Candidates for Director and Audit &Supervisory Board Member (Page 15).
Position and responsibilities in
the Company

Significant concurrent
positions outside theCompany

No.

Name

1

Toshihiko Kai

President & Representative
Director[Reelection]

2

YoshihikoKinoshita

Director, Executive Officer,
General Manager of Medical
Business Unit, and General
Manager of Medical Division[Reelection]

3

Shoichi Nagato

Director, Executive Officer,
General Manager of Aerospace
Business Unit, and General
Manager of Aerospace
Division[Reelection]

4

Masaru Yamamura Director, Executive Officer,
General Manager of Industrial
Business Unit, and General
Manager of Industrial Division[Reelection]

5

Susumu Koito

Executive Officer, General
Manager of Corporate Unit

[New election]

6

Eisuke Nagatomo

Outside Director

President & CEO, EN[Reelection]
Associates Co., Ltd.
[Independent Officer]
Outside Director, Miroku[Outside Officer]
Jyoho Service Co., Ltd.
Outside Audit & Supervisory
Board Member, Nidec
Corporation
Public Interest Director,
Japan Financial Services
Association

7

Haruko Hirose

Outside Director

President, Japan Morocco[Reelection]
Association[Independent Officer]
Outside Director, S&B Foods [Outside Officer]
Inc.

Notes:
1. There is no special interest between each candidate and the Company.
2. The name of Haruko Hirose in the family register is Haruko Makinouchi.

4

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

February 1996

General Manager of Dai-Ichi Kangyo
Bank Nederland N.V.

March 2000

Joined the Company

April 2001

Executive Officer of the Company

April 2002

President, Medical Equipment Unit
(currently Medical Division) of theCompany

June 2003

Director of the Company (present
position)

December 2004

President & Representative Director of
the Company (present position)

Toshihiko Kai(August 19, 1946)[Reelection]
1

Number of theCompany’s
shares owned

60,000[Position and areas of responsibility at the Company]
President & Representative Director[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
He set management goals of (i) sustaining the Company’s position as a top supplier worldwide that uses
excellent technological capabilities for its primary business, and (ii) becoming a strong profitable corporategroup, and executed policies designed for medium- to long-term growth in the Company’s primarybusiness. His powerful leadership and experienced management capability have enabled him to realize thesustainable growth of the Company’s Group (“the Group”) and to improve the medium- and long-term
corporate value. As such, it has been determined that he is suitable as a Director of the Company and named
as a candidate to continue as a Director.

5

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Yoshihiko Kinoshita(September 13, 1966)

April 1989

Joined the Company

October 2011

Deputy General Manager, Medical
Division of the Company

January 2016

General Manager of Medical Division of
the Company (present position)

October 2016

Director, Vice Chairman, Weigao
Nikkiso (Weihai) Dialysis Equipment
Co., Ltd. (the Company’s equity method
affiliated company in China) (present
position)January 2017

Executive Officer of the Company(present position)

March 2017

Director (present position) and in chargeof Medical Business Unit of theCompany

October 2017

CEO, Managing Director, Nikkiso
Europe GmbH (the Company’s
consolidated subsidiary in Germany)

January 2019

General Manager of Medical Business
Unit of the Company (present position)[Reelection]
2

Number of theCompany’s
shares owned

17,376[Position and areas of responsibility at the Company]
Director, Executive Officer, General Manager of Medical
Business Unit, and General Manager of Medical Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
He has worked actively on solidifying the Japanese dialysis business, building new business fields andimplementing various policies toward expanding international markets, and obtained concrete results ingrowth of the Medical Business. He possesses experience and knowledge that can contribute to growing theGroup sustainably and to improving the medium- and long-term corporate value. As such, it has been
determined that he is suitable as a Director of the Company, and as a candidate to continue as a Director.

6

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Shoichi Nagato(August 9, 1956)

October 1987

Joined the Company

April 2009

Executive Officer (present position),
General Manager of Aerospace Divisionof the Company

March 2016

President & Representative Director,
Nikkiso Giken Co., Ltd. (the Company’s
consolidated subsidiary)

October 2016

General Manager of Precision Equipment
Business Division of the Company

December 2017

General Manager of Aerospace Divisionof the Company (present position)

January 2019

General Manager of Aerospace Business
Unit of the Company (present position)
Chairman, Nikkiso Vietnam, Inc. (theCompany’s consolidated subsidiary in
Vietnam) (present position)

March 2019

Director of the Company (present
position)[Reelection]
3

Number of theCompany’s
shares owned

10,878[Position and areas of responsibility at the Company]
Director, Executive Officer, General Manager of Aerospace
Business Unit, and General Manager of Aerospace Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
He has vigorously worked on and obtained results in improving the Company’s corporate value as anaircraft parts manufacturer in the civilian aircraft market, where demand is expected to continue expanding.
He possesses experience and knowledge that can contribute to growing the Group sustainably and to
improving the medium- and long-term corporate value. As such, it has been determined that he is suitable asa Director of the Company, and as a candidate to continue as a Director.

7

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Masaru Yamamura

November 1990

Joined the Company

October 2009

General Manager of Business Promotion
Department, Medical Division of theCompany

July 2012

General Manager of Osaka Branch of theCompany

April 2017

General Manager of Industrial Divisionof the Company (present position)

January 2018

Executive Officer of the Company(present position)

January 2019

General Manager of Industrial Business
Unit of the Company (present position)

March 2019

Director of the Company (present
position)(May 27, 1965)[Reelection]

4

Number of theCompany’s
shares owned

11,266[Position and areas of responsibility at the Company]
Director, Executive Officer, General Manager of Industrial
Business Unit, and General Manager of Industrial Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
He has vigorously worked on and obtained results in realizing an even greater synergistic effect as acorporate group, by strengthening collaboration, promoting mutual use of business facilities andconsolidating sales promotion systems between the Company’s consolidated subsidiaries of LEWA GmbH
(Germany), whose main market is oil and gas exploration companies, and the Cryogenic Industries Group,
whose market is companies in LNG-related businesses, and the Company. He possesses experience andknowledge that can contribute to growing the Group sustainably and to improving the medium- and longterm corporate value. As such, it has been determined that he is suitable as a Director of the Company, andas a candidate to continue as a Director.

8

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Susumu Koito(November 4, 1958)

April 1981

Joined the Company

April 2006

General Manager of Accounting &Finance Department of the Company

April 2007

General Manager of Human Resources
Department of the Company

July 2011

General Manager of Administration
Division, General Manager of Human
Resources Department of the Company

April 2012

Executive Officer (present position),
General Manager of Administration
Division, and General Manager of
Human Resources Department of theCompany[New election]
5

January 2019

Number of theCompany’s
shares owned

18,939General Manager of Corporate Unit of
the Company (present position)[Position and areas of responsibility at the Company]
Executive Officer, General Manager of Corporate Unit
[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
He has a wealth of experience and knowledge in general corporate-related management and has been
involved in work such as reforming the corporate system to adapt to a changing management environment,
strengthening and reorganizing the Corporate Unit functions that support management, supporting thepromotion of business and strengthening the personnel management of the Group. He possesses abilities
that can contribute to growing the Group sustainably and to improving the medium- and long-term corporate
value. As such, it has been determined that he is suitable as a Director of the Company, and as a new
candidate to be a Director.

9

No.

Name (Date of birth)

Eisuke Nagatomo(July 7, 1948)

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)
April 1971

Joined Tokyo Stock Exchange

December 2005

Senior Executive Officer, Tokyo Stock
Exchange, Inc. (Chief Self-Regulatory
Officer)

October 2007

President & CEO, EN Associates Co.,
Ltd. (present position)

June 2010

Outside Director, Miroku Jyoho Service
Co., Ltd. (present position)

June 2012

Outside Audit & Supervisory Board
Member of the Company

June 2016

Outside Audit & Supervisory Board
Member, Nidec Corporation (present
position)

March 2018

Outside Director of the Company(present position)

June 2018

Public Interest Director, Japan Financial
Services Association (present position)[Reelection][Independent Officer][Outside Officer]

Number of theCompany’s
shares owned

8,197[Position and areas of responsibility at the Company]
6

Outside Director[Significant concurrent positions outside the Company]
President & CEO, EN Associates Co., Ltd.
Outside Director, Miroku Jyoho Service Co., Ltd.
Outside Audit & Supervisory Board Member, Nidec
Corporation
Public Interest Director, Japan Financial Services
Association[Reasons for selection as a candidate for Outside Director]
He has held successive positions in important offices such as Senior Executive Officer and Chief SelfRegulatory Officer, Tokyo Stock Exchange, Inc., a position on the Business Accounting Council of the
Financial Services Agency of Japan and Director of the Financial Accounting Standards Foundation. In
addition to his considerable expertise related to financial affairs and accounting, he has also acquired
thorough knowledge concerning corporate governance, group governance and risk management and has awealth of international experience. In this term (2019), he has actively provided suggestions to andperformed similar services for the Board of Directors and the management team from a wide range ofviewpoints such as group governance at overseas sites, risk management, group capital usage, return on
investment, return of profit to shareholders, IR activities, remuneration for directors and executive officers,
personnel development and labor issues. As such, we nominate him as a candidate to continue as an Outside
Director in order to have him continue to put his wide-ranging experience and opinions to work as an
Outside Director of the Company.

Note: Eisuke Nagatomo is a candidate to be our Outside Director.
Summary of contents of
The Company has executed with him, pursuant to the provisions of Articles oflimited liability agreement
Incorporation for an Outside Director, a limited liability agreement that provides thatthe higher amount of either five (5) million yen or the minimum total liability
specified by laws and regulations shall be the maximum amount of liability fordamages. When he assumes the position of Outside Director, the Company plans tomaintain the limited liability agreement.
Tenure as Outside Director

He is currently one of the Company’s Outside Directors, and he will have been inthis position for two (2) years at the conclusion of this Ordinary General Meeting of
Shareholders.

Notification of Independent
OfficerAt the current time, the Company has registered him with the Tokyo Stock
Exchange, Inc. as an Independent Officer. When he assumes the position of Outside
Director, the Company plans to continue registering him as an Independent Officer.

10

No.

Name (Date of birth)

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)
December 1968

Appointed to the National Personnel
Authority of Japan

January 1992

Director, Bureau of Human Resources
Management of Headquarters, United
Nations Educational, Scientific andCultural Organization (UNESCO)

September 2002

Deputy to the Director General andManaging Director of Programme
Coordination and Field Operations
Division, United Nations Industrial
Development Organization (UNIDO)

November 2006

Japanese Ambassador Extraordinary andPlenipotentiary to Kingdom of Morocco

May 2014

President, Japan Morocco Association(present position)

June 2016

Outside Director, S&B Foods Inc.
(present position)

March 2018

Outside Director of the Company(present position)

Haruko Hirose(September 23, 1945)[Reelection][Independent Officer][Outside Officer]

7

Number of theCompany’s
shares owned

1,631[Position and areas of responsibility at the Company]
Outside Director[Significant concurrent positions outside the Company]
President, Japan Morocco Association
Outside Director, S&B Foods Inc.
[Reasons for selection as a candidate for Outside Director]
She has provided meritorious service in areas such as personnel, financial affairs and industrial development
for the United Nations. Furthermore, she has also endeavored in activities for developing personnel who are
active on the world stage. In this term (2019), she has provided diverse suggestions to and performed similar
services for the Board of Directors and the management team from viewpoints such as group capitalmanagement, credit management, risk management at overseas sites, development of internationally active
personnel and engineers, corporate value improvement, expansion into new businesses and constructing aGroup environment in which we can place diverse employees in the right places including promoting further
active participation by women. As such, we nominate her as a candidate to continue as an Outside Director
in order to have her continue to put her wide-ranging experience and opinions to work as an Outside
Director of the Company. Although she has not been involved in corporate management in the past except
as an outside officer, it has been determined that she is suitable as an Outside Director of the Company forthe reasons outlined above.
Notes: 1. The name of Haruko Hirose in the family register is Haruko Makinouchi.
2. Haruko Hirose is a candidate to be our Outside Director.
Summary of contents of
The Company has executed with her, pursuant to the provisions of Articles oflimited liability agreement
Incorporation for an Outside Director, a limited liability agreement that provides thatthe higher amount of either five (5) million yen or the minimum total liability
specified by laws and regulations shall be the maximum amount of liability fordamages. When she assumes the position of Outside Director, the Company plans tomaintain the limited liability agreement.
Tenure as Outside Director

She is currently one of the Company’s Outside Directors, and she will have been inthis position for two (2) years at the conclusion of this Ordinary General Meeting of
Shareholders.

Notification of Independent
OfficerAt the current time, the Company has registered her with the Tokyo Stock
Exchange, Inc. as an Independent Officer. When she assumes the position of
Outside Director, the Company plans to continue registering her as an Independent
Officer.

11

Proposal 2:

Election of one (1) Audit & Supervisory Board Member

Since Audit & Supervisory Board Member Kenji Hida will retire from office due to resignation at
the conclusion of this Ordinary General Meeting of Shareholders, the Company proposes that one(1) Audit & Supervisory Board Member be newly elected. The Audit & Supervisory Board has
given its consent to this proposal. If this proposal is approved in its original form, the Audit &Supervisory Board will have four (4) Audit & Supervisory Board Members, including two (2)Outside Audit & Supervisory Board Members.
The Audit & Supervisory Board Members and the Audit & Supervisory Board of the Company havefiduciary duties for the shareholders and have the main duty of, from a position independent of the
Directors and the Board of Directors, effectively auditing the Directors and the Board of Directors toensure that they fulfill their duties in a legal and appropriate manner.
The candidate for Audit & Supervisory Board Member is shown below. The candidate is nominatedin accordance with the Company’s Policies and Procedure for Nominating Candidates for Directorand Audit & Supervisory Board Member (Page 15).
Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

April 1982

Joined the Company

April 2010

General Manager of Instrumentation
Sales Department, Industrial Division of
the Company

January 2016

General Manager of Electricity System
Department, Industrial Division of theCompany

December 2017

General Manager of Precision Equipment
Business Division of the Company

January 2019

Executive Officer (present position),
General Manager of Precision Equipment
Business Division of the Company

January 2020

In charge of Precision Equipment
Business, Industrial Division of theCompany (present position)

Akira Ohsawa(August 11, 1958)[New election]

Number of theCompany’s
shares owned

3,571[Position at the Company]
Executive Officer, in charge of Precision Equipment
Business, Industrial Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Audit & Supervisory Board Member]
He has been engaged in design, sales, administration, etc. in the Precision Equipment Business for many years, andhas acquired thorough knowledge about the products, business segments, markets, etc. of the business. He possesses
experience and knowledge that enable him to closely cooperate with Outside Directors, the Accounting Auditor andInternal Auditors and to appropriately audit the operations of the Directors and the Board of Directors. As such, it
has been determined that he is suitable as an Audit & Supervisory Board Member of the Company, and as a new
candidate for this position.
Notes:
1. There is no special interest between the candidate and the Company.
2. Limited liability agreement with Akira Ohsawa
When he assumes the position of Audit & Supervisory Board Member, the Company plans to execute with him,
pursuant to the provisions of Articles of Incorporation, a limited liability agreement that provides that the higher
amount of either three (3) million yen or the minimum total liability specified by laws and regulations shall be
the maximum amount of liability for damages.

12

(Reference) Composition of the Audit & Supervisory Board if This Proposal Is Approved in Its Original Form
Position
Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberSignificant concurrent positions outside theCompanyName
Toshiaki Mitsumi
Akira Ohsawa

Independent Officer
Outside Audit & Supervisory Board
MemberMitsuaki Nakakubo

Independent Officer
Outside Audit & Supervisory Board
MemberHiroyuki Muneta

13

Attorney
Outside Audit & Supervisory Board Member,
Nippon Kodo Holdings Co., Ltd.
Outside Director, FANCL CORPORATION
Representative Director, Biotech System
Machinery Co., Ltd.
Certified public accountant
Licensed tax accountant
Outside Audit & Supervisory Board Member,InterPia Co., Ltd.

(Reference) Nikkiso Group Corporate Governance Basic Policy
1. Corporate Philosophy and Basic Approach concerning Corporate Governance
While holding sound social ethics and values as a member of society, the Group shall comply
with laws and regulations, the Company’s Articles of Incorporation and social norms; build up
good relationships with stakeholders; and set these as its business philosophy to make a creative
contribution to the fundamental fields of life to realize a better quality of life. As a company with
Board of Auditors, the Group believes that the important points to strive for regarding corporate
governance are transparency and fairness in decision-making and the realization of thisphilosophy through speedy and decisive decision-making. In line with the following basic
approach, we will construct the ideal corporate governance that conforms to the development
stage of the Group.
(i) Respect the rights of our shareholders and ensure equality to them.
(ii) Respect the profits of the stakeholders and cooperate appropriately with them.
(iii) Disclose the information of the Group appropriately to ensure transparency.
(iv) Endeavor to separate the supervision and execution of management.
Ensure effective supervision and auditing of management through cooperation among
Independent Outside Officers, the Accounting Auditor and Internal Auditors. In addition,
establish within the Group an environment in which the operations business unit can focus
on the improvement of business profitability.
(v) Have constructive conversations with shareholders with an investment policy that meets themedium- and long-term profits of shareholders.
2. System for Supervising the Execution of Business In accordance with the Articles of Incorporation, the Board of Directors shall be made up ofnine (9) or less Directors, two (2) or more of which are independent Outside Directors.
Independent Outside Directors will serve the function of supervising management bycomparing management strategies and business plans laws, regulations and the Articles ofIncorporation; verifying and evaluating the management results of the Group and theoperations of the management class as necessary and appropriately reflecting the opinions of
the stakeholders to management.
 The Board of Directors serves the following roles.
(i) Indicating major management directions such as management strategies(ii) Establishing corporate structures that support speedy and decisive management decisions(iii) Demonstrating supervisory functions for the whole of management in order to secure
fairness and transparency in management
3. Business Audit/Accounting Audit System
Audit & Supervisory Board Members and the Audit & Supervisory Board perform business audits
and accounting audits not only exercise the authority permitted by laws and regulations in an
active and assertive manner, but also perform them in close cooperation with Outside Directors,
the Accounting Auditor and Internal Auditors from the viewpoint of improving the sustainablegrowth and medium- and long-term corporate value of the Group.
4. Internal Control System
The Internal Control Committee, the Risk Management/Compliance Committee (which acts as thepractical organization of the Internal Control Committee) and the Information System Committee
act as the core promotional business unit for the internal control system and fulfill the central
roles of planning and executing policies aimed at constructing the internal control system of theGroup.

14

5. Policies and Procedure for Nominating Candidates for Director and Audit & Supervisory
Board Member<Criteria for the Election of Directors>
For a Director, we designate a person who has knowledge, capability and leadership that will
enable him or her to gain an overview of the management environment of our Group, promote
important management issues speedily and decisively, and achieve results, and who can becommitted to establish corporate governance that supports the realization of our corporate
philosophy.
<Criteria for the Election of Audit & Supervisory Board Members>
For an Audit & Supervisory Board Member, we designate a person who can perform businessaudits and accounting audits as well as actively exercise his or her authority and give appropriate
opinions at the Board of Directors. Furthermore, at least one (1) Audit & Supervisory Board
Member shall possess appropriate expertise related to financial affairs and accounting.
<Criteria for the Election, Independence Judgment Criteria and Concurrent Post Restrictions of
Outside Officers>
 For an Outside Director, we designate a person who can sufficiently fulfill his or her role insupervising the decision-making and execution of duties of Directors from an objective andexpert standpoint independent from the execution of the Company’s operations while clearlyproviding advice based on his or her knowledge in order to promote the sustainable growth of
the Group and improve the medium- and long-term corporate value.
 For an Outside Audit & Supervisory Board Member, we designate a person who cansufficiently fulfill his or her role in auditing the decision-making and execution of duties of
Directors from an objective and expert standpoint independent from the execution of theCompany’s operations while providing instructions and advice related to items such as
management strategy risks on the basis of extensive expertise.
 The independence of Outside Officers shall be judged strictly in accordance with theindependence criteria of Tokyo Stock Exchange, Inc.
 Independent Outside Officers shall not concurrently hold positions as Director or Audit &Supervisory Board Member at more than three (3) public companies other than the Company
as a general rule.
<Procedure for Nominating Candidates for Director and Audit & Supervisory Board Member>
The Company shall explain the candidates to the Independent Outside Officers and receive theiradvice on the nominations in advance.
6. Policies and Procedures for Determination of Remuneration, etc. for Director
The Company shall set fixed remuneration, short-term performance-based compensation and midto long-term performance-based compensation at the proper proportions so that remuneration of
executive directors may serve as a sound incentive for sustainable growth. The Company shall
explain these matters to the Independent Outside Officers and receive their advice in advance.

15