Corporate Governance Report
Last Updated: August 15, 2022

TSURUHA HOLDINGS INC.
Jun Tsuruha, President & Representative Director
Contact: Makoto Murakami, Executive Officer
and Chief Administrative Officer
Securities code: 3391
https://www.tsuruha-hd.com/
The corporate governance of TSURUHA HOLDINGS INC. (the “Company”) is described below.

I.

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

1. Basic Views
The Company believes that corporate governance forms the foundation upon which the Company seeks toachieve sustainable growth and improve corporate value over the medium to long term. To that aim, all officers
and employees of TSURUHA Group (the “Group”) understand the business philosophy and objectives,
recognize the social role as a listed company, strive to maintain good relationships with each stakeholder, andseek to become a company that deepens and improves the community links and earns universal support.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code]
The Company implements all the principles of the Corporate Governance Code.
[Disclosure Based on the Principles of the Corporate Governance Code][Principle 1.2 Exercise of Shareholder Rights at General Meetings of Shareholders][Supplementary Principle 1.2.4]
The Company has already adopted the Electronic Voting Platform for institutional investors. The Company
has been drafting the Notice of the General Meeting of Shareholders in English for some time now, but fromthis year’s Ordinary General Meeting of Shareholders, the Company has started creating Business Report,
Financial Statements, and other documents in English to enable overseas institutional investors to exercise
their voting rights more smoothly.
[Principle 1.4 Cross-Shareholdings]
1. View on holding
The Group will hold shares in other listed companies as cross-shareholdings only if deemed necessary for its
business activities in terms of maintaining and strengthening business alliances and relationships with thebusiness partners, among others. However, the basic policy is to gradually sell off and reduce crossshareholdings that have become less significant.
Each year, the Board of Directors examines the suitability of the motives for each cross-shareholding, verifies
whether the benefits and risks of holding those shares are worth the capital costs, and reviews whether itshould continue to hold those shares and in what volume. Regarding voting rights on cross-shareholdings, the-1-Group exercises these voting rights after a comprehensive consideration as to whether a particular proposal
will help build an appropriate corporate governance system and boost the issuing company’s medium-term
corporate value, while also considering any potential impact on the Company, among other factors.
2. Verification methods• Qualitative aspects: Significance of the holding from a business strategy perspective.
• Quantitative aspects: Comparative verification of the five-year average for total shareholder return (TSR)
based on the Company’s cost of capital (WACC). The Company conducts qualitative and quantitative analysis
for each stock holding to facilitate a comprehensive assessment.
3. Verification results
The Company performed the comprehensive assessment based on the above-mentioned views on holding andverification methods and decided at the meeting of the Company’s Board of Directors held on April 7, 2022
to continue to hold all four of its cross-shareholdings.
[Principle 1.7 Related Party Transactions]
The Company periodically checks whether there are any conflict-of-interest transactions or competitivetransactions relating to the Group officers. In addition, if Company officers are conducting transactions withrelated parties, these transactions must be preapproved by the Board of Directors, and if they are considered
to be significant, those transactions will be disclosed following due consultation with the auditing firm.
[Supplementary Principle 2.4.1 Ensuring internal diversity including the promotion of women’s participation
and advancement]
The Company is committed to actively ensuring diversity in its core human resources. Regarding theappointment of female employees to managerial positions, in particular, the Company is aiming to achieve
30% of managerial positions filled by female employees based on the Act on the Promotion of Female
Participation and Career Advancement in the Workplace (18.6% ratio as of May 15, 2022). The Company
also formulates a recruitment plan for mid-career hires each year and actively promotes and appoints midcareer employees according to their abilities and level of contribution to the Company. The Company
formulates an annual recruitment plan as a measurable target and verifies the progress status of the plan every
six months (the ratio of mid-career hires to total new hires in the fiscal year ended May 15, 2022, stood at
31.0%).
[Principle 2.6 Roles of Corporate Pension Funds as Asset Owners]
The Group has introduced defined benefit corporate pensions at some of its subsidiaries. The Company’s
finance department periodically checks the status of the corporate pension management as part of the required
function as the owner of the corporate pension assets.
[Principle 3.1 Full Disclosure](ⅰ) Company’s goals (e.g., business philosophy), management strategies, and management plans
In order to build Japan’s number one drug store chain, the Company is pursuing a dominant position in termsof store numbers across the country based on its business philosophy of “making life better for our customers.”
The Company has set its medium-term goals, “3,000 stores in the fiscal year ending May 15, 2024” and “netsales of ¥1 trillion.” The Company has also made it the mission to always practice “Courtesy first” and“Credibility first” approach when interacting with customers by applying the Company’s renowned customer
service skills and a high level of product knowledge, and to provide products that customers need with highquality and at affordable prices, so that the Company becomes an indispensable presence to its customers andlocal communities.
The management strategies of the Company are posted on the Company’s website. Please click the following
link to refer to them:https://www.tsuruha-hd.com/sustainability/policy/#3
As of June 21, 2022, the Company formulated a new medium-term management plan spanning the fiscal year
ending May 15, 2023 to the fiscal year ending May 15, 2025. Please click the following link for details:
https://www.tsuruha-hd.com/content/files/pdf/mtmp/20220621_en.pdf(ⅱ) Basic views and policies on corporate governance(1) Basic views
The Company believes that enhancing corporate governance is one of the most important management issues
for achieving sustainable growth and increasing corporate value over the medium to long term. To that aim,
-2-

under the business philosophy and objectives, all officers and employees of the Group recognize the socialrole as a listed company, strive to maintain good relationships with each stakeholder, and seek to become acompany that deepens and improves the community links and earns universal support.
(2) Basic policies
The Company establishes and implements the basic policies as follows, based on the basic views:
1) Thorough compliance: The Company is committed to thoroughly enforcing the spirit of compliance acrossthe entire Group.
2) Management of the Board of Directors based on sophisticated management decisions: The Company
understands the responsibilities of each Director and operates the Board of Directors in a manner that clarifies
management decisions.
3) Audit and Supervisory Committee Members and the Audit and Supervisory Committee recognize that they
have an important role to play in establishing the Company’s governance system, and supervise themanagement from an independent standpoint.
4) Officers are responsible for conducting stakeholder-conscious management as well as clarifying
management plans and visions, and ensuring their disclosure and verification.
5) Securing shareholders’ rights
In view of the Company’s shareholding ratio in terms of overseas and domestic institutional investors, theCompany strives to create environments that make it easier for shareholders to exercise their voting rights. In
particular, the Company has adopted online voting, participated in the ICJ platform for exercising voting
rights, and prepared the notice of convocation in English and in easy-to-read font styles. Regarding the resultsof the exercise of voting rights at the General Meeting of Shareholders, the Company is working to analyze
the reasons for any large-scale opposition to a particular proposal and clearly grasp any underlying factors,
and to increase opportunities for dialogue with shareholders through the holding of briefings for investors andother events where the Company can share and discuss the values of the shareholders and the Company.
When the Company submits an important proposal to the General Meeting of Shareholders, the Company
checks carefully to ascertain whether such a proposal complies with the Company’s governance system and,if necessary, the Company seeks advice from external experts, such as lawyers or certified public accountants.
6) Management that values people and strives to make them happy
The Company consistently aims to become a company that respects its employees and enables them to findjoy in their work upon the belief that the purpose of business is to make everyone relating to a company happy
forever.
7) Policy on anti-takeover measures, etc.
The Company considers that the best form of defense against takeovers is to secure stable, high growthpotential and profitability, increase stock prices, and thereby enhance corporate value. Needless to say, whenintroducing any new anti-takeover measures, the Company takes care to ensure that the shareholders
understand the need for such measures and that the Board of Directors has thoroughly deliberated the content
before proposing any new measure. In the event that the Company’s shares become the subject of a takeoverbid (TOB), the Company promptly clarifies and discloses its views on the matter. The Company also clarifies
the intention regarding any countermeasures. However, the Company shall not take any unlawful
countermeasures, and the shareholders shall have the sole discretion.
8) Sustainability initiatives such as for social and environmental issues
The Company recognizes sustainability initiatives to be one of the top management priorities in order torealize its business philosophy and fulfill its social responsibilities as a company. The Company’s views on
sustainability are also posted on the Company’s website. Please click the following link:
https://www.tsuruha-hd.com/sustainability/9) Ensuring internal diversity, including the promotion of women’s participation and advancement
The Company is committed to actively ensuring diversity in its core human resources. Regarding theappointment of female employees to managerial positions, in particular, the Company is aiming to achieve
30% of managerial positions filled by female employees based on the Act on the Promotion of Female
Participation and Career Advancement in the Workplace (18.6% ratio as of May 15, 2022). The Company
also formulates a recruitment plan for mid-career hires each year and actively promotes and appoints midcareer employees according to their abilities and level of contribution to the Company. The Company
formulates an annual recruitment plan as a measurable target and verifies the progress status of the plan every
six months (the ratio of mid-career hires to total new hires in the fiscal year ended May 15, 2022, stood at
31.0%).
10) Whistleblowing systems-3-

The Company has established the Whistleblowing Regulations. The Company also has a system in place toreport any violation of internal rules or conduct in violation of laws within the Group or any conduct inviolation of corporate ethics. The Company has appointed whistleblowing personnel who operate
independently from internal officers and departments, and built a system to stipulate and operate matters forwhich information providers should be protected in the Whistle-blowing Regulations.
(ⅲ) Board of Director’s policies and procedures in determining the remuneration of the senior management
and Directors
Please refer to “Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods” in II
1. [Director Remuneration] of this report.
(ⅳ) Board of Director’s policies and procedures in the appointment/dismissal of the senior management andthe nomination of Directors and Directors who are Audit and Supervisory Committee Members candidates
When the Board of Directors adopts a resolution to submit a proposal for appointment of the candidates to
the General Meeting of Shareholders, the procedure for obtaining approval involves the chairperson
ascertaining that the candidates have sufficient knowledge and experience to fulfill their duties and areconsidered to be able to contribute to the improvement of the Company’s corporate value based on the reportsubmitted by the Nomination and Remuneration Committee, explaining why the candidates are being
recommended for appointment, and asking for shareholders’ approval. The Board of Directors determines toremove an executive based on the following dismissal criteria: (Dismissal Criteria) (1) an officer has
committed an act that is contrary to public order and ethics, (2) it becomes difficult for an officer to continue
to fulfill his/her duties due to health reasons, (3) the Company’s corporate value is significantly damaged by
an officer’s neglect of his/her duties, or (4) an officer’s qualifications as an executive are not recognized.
(v) Explanations with respect to the individual appointments/dismissals and nominations when the Board of
Directors appoints/dismisses the senior management and nominates Directors and Directors who are Audit
and Supervisory Committee Members candidates
The Company strives to ensure fairness and objectively by nominating candidates based on the following
concepts:
1. Basic policy on the composition of the Board of Directors
The Company shall have no more than 11 Directors in order to maximize the Group’s overall corporate value
and strengthen and thoroughly enforce corporate governance as a holding company. The Company seeks to
appoint multiple Outside Directors and utilize their high-level capabilities in their individual specialized fields
to promote the Company management. The Company also considers the need for diversity by appointing
female executives and executives with different experience in the industry and strive to create an effective
Board of Directors at the optimal scale.
2. Policies and procedures for nominating candidates for Directors and for dismissing Directors
In nominating candidates for Director, the Company believes that it should nominate people with theappropriate qualities to conduct general management for promoting the sustainable growth of the Company
and enhancing the Company’s corporate value over the medium to long term.
When selecting candidates, the Company does not focus on gender, nationality, age, or other similar factors,
but instead considers the need for diverse and balanced knowledge, experience, and capabilities. The
Company evaluates a candidate’s personality, achievements, and insights, his/her ability to appropriately
fulfill decision-making and supervisory functions on the Board of Directors, and whether he/she is able tohelp achieve the Company’s corporate philosophy and enhance the Company’s corporate value over the
medium to long term. To ensure transparency in the selection process, the Company has established andlaunched a Nomination and Remuneration Committee as a voluntary advisory body comprising a majority of
independent Outside Directors.
[Supplementary Principle 3.1.2]
Considering that overseas institutional investors hold a considerable percentage of the Company’s shares, theCompany is working to establish a system that promotes the disclosure and provision of information in
English.
 Items that are already disclosed in English include: (1) Notice of the Ordinary General Meeting of
Shareholders, (2) SR materials for overseas institutional investors, (3) Website, (4) Consolidated Financial
Results, and (5) Corporate Governance Report-4- Items the Company is currently considering for future English-language disclosure: (1) Securities Report[Supplementary Principle 3.1.3 Sustainability Initiatives, Etc.]
The Company discloses initiatives relating to its management policies on the Company’s website. For moredetails, please click the following link:
https://www.tsuruha-hd.com/sustainability/
The Company resolved to set KPI values for materiality (material issues) at the Board of Directors meeting
held on June 10, 2022. Please refer to page 32 of the new medium-term management plan for details:
https://www.tsuruha-hd.com/content/files/pdf/mtmp/20220621_en.pdf
The Company resolved, at the Board of Directors meeting held on August 5, 2022, to express its endorsementof the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. We disclose
information on governance, strategy, risk management, and metrics and targets, which are the core elementsof the TCFD recommendations within the Group on the Company’s website.
[Principle 4.1 Roles and Responsibilities of the Board of Directors (1)][Supplementary Principle 4-1-1]
In addition to stipulations in the Articles of Incorporation and relevant laws and regulations, the Company
determines the matters to be resolved by the Board of Directors in the Board of Directors Regulations.
Furthermore, on August 10, 2021, the Company transitioned from a Company with a Board of Corporate
Auditors to a Company with an Audit and Supervisory Committee, and delegated a portion of the importantbusiness execution decisions to the President & Representative Director.
[Principle 4.8 Effective Use of Independent Outside Directors]
The Company has appointed three independent Outside Directors. The three independent Outside Directors
are asked to fulfill their advisory and supervisory functions from an objective standpoint and play a role inenhancing the Company’s corporate value. The independent Outside Directors constitute a third of the Boardof Directors, and, given that the Board currently engages in active discussions based on these independent
standpoints, the Company believes that it has established a sufficient system to ensure the effective use of
independent Directors.
[Supplementary Principle 4.8.3]
At the present time, there are no controlling shareholders in the Group.
[Principle 4.9 Independence Standards and Qualification for Independent Outside Directors]
At the Board of Directors meeting held on April 6, 2021, the Company established criteria for selecting outside
officers as a specific standard designed to ensure the transparency and objectivity of the Board of Directors.
To ensure transparency and objectivity in the appointment process, the Nomination and Remuneration
Committee, which comprises a majority of Outside Directors, will confirm any candidate’s qualifications as
an Outside Director.
<Selection criteria>
The Company adopts the following independence standards (i.e. people should fall into none of the items (1)to (13) listed below) as criteria for the appointment of outside officer (candidates) at the General Meeting of
Shareholders.
The Company’s Board of Directors certifies that Outside Directors or Outside Directors who are Audit andSupervisory Committee Members (hereafter collectively referred to as “Outside Officers”) are deemed
independent if they do not fall under any of the categories listed below.
Furthermore, Outside Officers must strive to maintain the independence stipulated in the independence
standards until their retirement, and are obliged to immediate notify the Company if they no longer meet theindependence standards.
(1) An executive of the Company or its subsidiaries (hereafter collectively referred to as “the Group”) atpresent and for the past 10 years(2) A party whose major client or supplier (Note 1) is the Group or an executive thereof(3) Major client or supplier of the Group (Note 2) or an executive thereof(4) A major shareholder of the Company (who directly or indirectly holds 10% or more of the voting rights in
the Company) or an executive thereof-5-(5) An executive of a party of which the Group is a major equity holder (who directly or indirectly holds 10%
or more of the voting rights in the Company)(6) An executive of a lender of the Company that exceeds the standards stipulated by the Company (Note 3)(7) A recipient of a substantial amount of donations from the Group (Note 4) or an executive thereof(8) A consultant, accountant such as a certified public accountant or legal professional such as a lawyer who
receives a large amount of monetary consideration or other property from the Group besides remuneration asa director (Note 5) (If the entity that has received those assets is a corporation or a union, the condition thenapplies to anyone who belongs to the organization in question)(9) A person who belongs to an auditing firm that conducts statutory audits for the Company(10) An executive at another company in which an executive of the Group is currently serving or has servedin the past three years as an outside officer(11) A person who has fallen into any of the above items (2) through (9) over the past three years(12) Close relatives, etc. of the following persons (Note 6)
a. A person who falls into any of the above-listed items (2) through (9)b. A person to whom item (2), (3), or (8) has applied over the past year (excluding persons who do not play amajor role)c. Important executors of Group business or important Directors who do not execute Group businessd. A person to whom point c. above has applied over the past three years(13) A person who has been assigned by the Company for a total of more than 10 years at the time of
appointment as an Outside Officer of the Company--------------------------------------------------------------------------(Note 1) The annual value of transactions with the Group in the most recent fiscal year is 2% or more of
consolidated sales(Note 2) The annual value of transactions with the Group in the most recent fiscal year is 2% or more of
consolidated sales(Note 3) Lenders that exceed the standards stipulated by the Company are entities whose borrowings fromthe Company exceed 2% of total consolidated assets.
(Note 4) Persons who have received donations from the Group totaling ¥10 million or more in the most recent
fiscal year
(Note 5) Persons who have received payments from the Group totaling ¥10 million or more in the most recent
fiscal year
(Note 6) Close relatives, etc. refer to relatives within the second degree of kinship and interested parties whoshare the same livelihood.
[Principle 4.10 Use of Optional Approach][Supplementary Principle 4.10.1]
In order to strengthen the independence, objectivity, and accountability of the Board functions in relation to
the nomination and remuneration of the senior management and Directors, the Company has established an
independent Nomination and Remuneration Committee under the jurisdiction of the Board of Directors.
Committee members include the President & Representative Director (Chairperson), the Executive Officer
and Chief Administrative Officer, and three independent Outside Directors. The Committee is able toappropriately engage and advise on the consideration of important matters such as nomination andremuneration. The majority of Nomination and Remuneration Committee members are independent Outside
Directors, which maintains the committee’s independence and ensures fairness and transparency.
[Principle 4.11 Preconditions for Board of Directors and Board of Corporate Auditors Effectiveness]
The Company’s Board of Directors maintains a good balance of abilities and experience overall, whether
internal or external, and ensures a diversity of values. Each Director strives to improve the functioning of theBoard of Directors by utilizing the expertise and experience expected of them. Regarding securing diversity
in gender representation and internationality, the Company has appointed one female Outside Director and iscontinuing to consider appointments from the perspective of internationality.
Of the four Audit and Supervisory Committee Members, one full-time Audit and Supervisory Committee
Member has served as the Company’s full-time statutory corporate auditor and has a deep knowledge offinance and accounting. Of the three Audit and Supervisory Committee Members who are Outside Directors,
one is a tax accountant and the other is a lawyer, with each of them having a deep knowledge of tax and legal
affairs, respectively, and one boasts rich finance-related experience and knowledge having worked for many-6-

years in financial institutions. The Company evaluates the effectiveness of the Board of Directors on an annual
basis, the results of which are summarized and disclosed by the President.
[Supplementary Principle 4.11.1]
The Board of Directors has identified the skills that each Director should possess in view of the Group’s
management strategies and developed a skills matrix in consultation with the Nomination and Remuneration
Committee that compiles the knowledge, experience, and abilities of each Director. This skills matrix was
disclosed in the Notice of the Ordinary General Meeting of Shareholders held on August 10, 2022.
[Supplementary Principle 4.11.2]
The number of other listed companies where Directors hold concurrent positions is within a reasonable range
and disclosed in the annual business report.
[Supplementary Principle 4.11.3]
In order to analyze and evaluate the effectiveness of the Board of Directors, all Directors of the Company
conduct self-evaluations on a number of specific evaluation items with the Questionnaire to Evaluate theEffectiveness of the Board of Directors. The Board of Directors then debates the results of the questionnaire
analysis and decides the level of Board effectiveness based on those opinions. The Company has also
introduced structures for involving independent third parties in the implementation of this process and has
introduced procedures and analysis conducted by legal counsels in order to maintain objectivity. The overview
of the evaluation of the effectiveness of the Board of Directors is submitted promptly to the Tokyo Stock
Exchange.
[Principle 4.14 Director and Corporate Auditor Training][Supplementary Principle 4.14.2]
Director training policy
1. To enable Directors to fulfill their required roles (fiduciary responsibilities) and legal responsibilities, theCompany provides opportunities for Directors to develop a sufficient understanding of laws and regulations
relating to the Companies Act and corporate governance principles.
2. Directors acquire the knowledge they need to fulfill their responsibility through self-improvement.
However, the Company also offers training to help hone management skills through participation in externalseminars, overseas inspections, etc. The cost of these activities is supported by the Company. The training
offered is not uniform, but is designed to suit the roles, responsibilities, and required knowledge of eachindividual officer.
1) Explaining the legal roles and responsibilities of Directors to newly appointed internal officers.
2) Explaining the Group’s business, finances, organizational structures, and other items to newly appointed
Outside Officers
3) Explaining important management changes and latest industry trends to people with important
responsibilities, and Outside Officers in particular.
4) Facilitating the participation of Outside Directors in meetings attended by executives.
[Principle 5.1 Policy for Constructive Dialogue with Shareholders]
The Company actively engages in dialogue with shareholders and strives to build solid relationships of trust
in order to help achieve sustainable growth and enhance corporate value.
1. Appointing a member of the management or a Director to be responsible for overseeing constructive
dialogue with shareholders
The Company has assigned the officer in charge of public relations and investor relations as the person in
charge of overseeing shareholder dialogue.
2. Measures to encourage organic cooperation between internal departments to support constructive dialogue
As part of the measures to promote cooperation between internal departments, the IR Group of the Accounting
Division cooperates with each department and Group company and compiles materials to organically promote
constructive dialogue with shareholders, while also providing opportunities for internal discussion on thecontent of dialogues. The IR Group also coordinates and plans interviews with shareholders and institutional
investors in Japan and overseas.
The General Affairs Group of the General Affairs Division is responsible for information disclosure, and theCompany has systems in place to facilitate the timely and appropriate disclosure of Company-related
information to the stakeholders.
-7-3. Initiatives for ensuring a wider range of dialogue opportunities in addition to individual interviews
In addition to individual interviews, the Company strives to promote dialogue with stakeholders through avariety of other methods(1) Holding briefings for investors and analysts(2) Conducting conference calls with domestic and overseas institutional investors(3) Holding briefings for individual investors across Japan(4) Conducting store tours for institutional investors
4. Providing feedback to the Board of Directors
The Company holds financial results briefings and visits institutional investors to explain the financial results
announcements on a quarterly basis. The officer in charge will report on the investors’ reactions at the meetingof the Board of Directors that takes place directly after the visits.
5. Measures for managing insider information when participating in dialogues
The Company has established the Insider Trading Regulations and ensures their strict operation. The
Company does not share undisclosed important information with any specific people individually.
6. Other
The Company conducts periodic shareholder identification surveys because it recognizes the importance offully understanding the shareholder ownership structure and composition in order to promote constructive
dialogue with shareholders.
[Principle 5.2 Establishing and Disclosing Business Strategies and Business Plans]
The Company is uniting in its efforts to expand its sales base and enhance its corporate value through various
measures in order to achieve its medium-term goals of a network of 3,000 stores and net sales of 1 trillion yen
in the fiscal year ending May 15, 2024.
As of June 21, 2022, the Company formulated a new medium-term management plan spanning the fiscal year
ending May 15, 2023 to the fiscal year ending May 15, 2025. Please click the following link for details:
https://www.tsuruha-hd.com/content/files/pdf/mtmp/20220621_en.pdf[Supplementary Principle 5.2.1]
Having clarified the business to be focused on and the expansion of its business domain in the new mediumterm management plan, the Company will continue to consider the optimization of more specific businessportfolio in order to ensure the appropriate and efficient allocation of management resources.

2. Capital Structure
Foreign Shareholding Ratio

More than 30%[Status of Major Shareholders]Name / Company NameAEON CO., LTD.
The Master Trust Bank of Japan, Ltd. (Trust Account)
STATE STREET CLIENT OMNIBUS ACCOUNT OM02
Custody Bank of Japan, Ltd. (Trust Account)
Tatsuru Tsuruha
SMBC Nikko Securities Inc.
STATE STREET BANK WEST CLIENT – TREATY 505234
Hiroko Tsuruha
Akiko Tsuruha
Hajime Tsuruha
Controlling Shareholder (except for Parent
Company)
Parent Company--None-8-

Number of Shares
Owned
6,313,600
6,093,100
3,066,000
1,556,000
1,411,140
1,324,800
1,010,735
977,604
951,566
765,992

Percentage
(%)
13.00
12.55
6.31
3.20
2.91
2.73
2.08
2.01
1.96
1.58

Supplementary Explanation
---

-9-

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange Prime Market

Fiscal Year-End

May

Type of Business

Retail Trade

Number of Employees (consolidated) as of
the End of the Previous Fiscal YearSales (consolidated) as of the End of thePrevious Fiscal Year
Number of Consolidated Subsidiaries as of
the End of the Previous Fiscal Year

More than 1000
From ¥100 billion to less than ¥1 trillion
From 10 to less than 50

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---

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

Company with an Audit and Supervisory Committee[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation
Term of Office of Directors Stipulated in
Articles of Incorporation

11
One year

Chairperson of the Board of Directors

President

Number of Directors

9

Appointment of Outside Directors

Appointed

Number of Outside Directors

3

Number of Independent Directors among
Outside Directors

3- 10 -

Outside Directors’ Relationship with the Company (1)Name

Relationship with the Company*

Attribute

a

b

c

d

e

f

g

h

i

j

k

Fumiyo Fujii
Other
Harumi Sato
Tax Accountant
Takuya Okazaki
Lawyer* 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 remuneration as a director/corporate auditor
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/corporate auditors 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
Outside Directors’ Relationship with the Company (2)NameMembershipof Audit andSupervisory
Committee

Designationas
Independent
Director

Supplementary
Explanation ofthe
Relationship

Reasons of Appointment
After serving as Outside Corporate
Auditor of the Company, Mr. Fumiyo
Fujii, with abundant financial experienceand knowledge cultivated over many
years at financial institutions, is currently

Fumiyo Fujii

○

---

○

providing active opinions and various
pieces of advice on management issues atmeetings of the Board of Directors as
Outside Director. He utilizes his deep
insight

incorporate

management,

experience and supervisory capabilities
for the management of the Company. He- 11 -

has no special interests in the Company,
and there is no risk of conflict of interest
with general shareholders. For thatreason, the Company has judged his
independence to be sufficiently secureand designated him as an Independent
Director.
As a certified tax accountant, Ms. Harumi
Sato has expertise in tax affairs. In
addition to her abundant experience andhigh-level insight as a tax accountant, she
has a valuable female point of view on the
managerial decisions of the Company,
andHarumi Sato

○

---

○

has

providedvariousrecommendations from an objective
perspective to the management of theCompany. She has no special interests in
the Company, and there is no risk of
conflictofshareholders.

interest
For

with

that

generalreason,theCompany has judged her independence tobe sufficiently secure and designated her
as an Independent Director.
As a lawyer, Mr. Takuya Okazaki hasabundantbusiness

experienceandexpertise. He has been appointed tostrengthen the decision-making functions
and audit and supervision functions of theBoard of Directors through providing
Takuya Okazaki

○

---

○

advice from an independent standpoint
based on deep insight. He has no special
interests in the Company, and there is norisk of conflict of interest with generalshareholders.

For

that

reason,theCompany has judged his independence tobe sufficiently secure and designated him
as an Independent Director.

- 12 -

[Audit and Supervisory Committee]
Committee’s Composition and Attributes of Chairperson
All Committee
Members
Audit andSupervisory
Committee

Full-timeMembers4

Inside Directors
1

Appointment of Directors and/or Staff to Support
the Audit and Supervisory Committee

1

OutsideDirectors

Chairperson
3

Inside Director

Appointed

Matters Related to the Independence of Such Directors and/or Staff from Executive Directors
Employees assigned to assist the Audit and Supervisory Committee in its duties shall conduct their businessunder the direction of the Audit and Supervisory Committee, and the Company shall ensure that those
employees can operate independently from other Directors (excluding Directors who are Audit andSupervisory Committee Members).
Cooperation among Audit and Supervisory Committee, Accounting Auditors and Internal Audit Departments
The Audit and Supervisory Committee receives reports from the internal audit departments on audit plans,
audit results, and other items and periodically exchanges information with the Audit Office. The Audit andSupervisory Committee also receives audit plans and audit results from the Accounting Auditor, and the twoparties periodically exchange information to promote mutual cooperation.
[Voluntary Establishment of Committee]
Voluntary Establishment of Committee(s)Corresponding to Nomination Committee orRemuneration Committee

Established

Committee’s Name, Composition, and Attributes of Chairperson
Committee Corresponding toNomination Committee
Nomination and Remuneration
Committee
5Committee Corresponding to
Remuneration Committee
Nomination and Remuneration
Committee
5

Full-time Members

00Inside Directors

11Outside Directors

33Outside Experts

0

0

Other

1

1

Inside Director

Inside Director

Committee’s NameAll Committee Members

Chairperson
Supplementary Explanation- 13 -

(Purpose)
The purpose of the committee is to appoint and dismiss the Company’s senior management (Representative
Directors and Directors with Special Titles), nominate candidates for Director and Executive Officers, andstrengthen the independence, objectivity, and accountability of the Board of Directors functions in respect of
the compensation of senior management, Directors, and Executive Officers, among other matters.
(Members)
1. The members of the Nomination and Remuneration Committee shall be appointed by resolution of
the Board of Directors.
2. The Nomination and Remuneration Committee shall comprise of three or more members, themajority of whom must be independent Outside Directors.
3. The chairperson of the Nomination and Remuneration Committee shall be appointed from among
the members by resolution of the Nomination and Remuneration Committee.
(Roles and responsibilities)
The Nomination and Remuneration Committee deliberates on the following matters in response to inquiries
from the Board of Directors, and then reports its decisions back to the Board of Directors:(1) Draft proposals for the election and dismissal of Directors to be submitted to the Board of Directors
as proposals for the General Meeting of Shareholders(2) Policies and procedures for the election and dismissal of Representative Directors and Directors with
Special Titles(3) Proposals on the selection or dismissal of other management (Executive Officers) to be submitted to
the Board of Directors(4) Succession planning for the Chief Executive Officer (President) and senior management(5) Draft proposals for remuneration, etc. of Directors to be submitted to the General Meeting of
Shareholders(6) Policies for determining individual remuneration for Directors (including Executive Officers andGroup executives)(7) Drafting proposals on the content of individual remuneration, etc. for Directors (including Executive
Officers and Group executives)(8) Other matters deemed necessary by the Board of Directors in relation to the preceding items(Holding and convening)
1. The Nomination and Remuneration Committee convenes according to an annual schedule that is determinedin advance at the Nomination and Remuneration Committee meeting held directly after the Ordinary
General Meeting of Shareholders, and may also meet at other additional times if necessary.
2. The Nomination and Remuneration Committee convenes in the Company’s head office. However, meetings
can be held elsewhere when required.
(Report to the Board of Directors)
The chairperson shall report the status of execution of duties of the Nomination and Remuneration Committee
to the Board of Directors without delay in a manner that is deemed appropriate in accordance with the details.

[Independent Directors]
Number of Independent Directors

3

Matters relating to Independent Directors
The Company has established Independence Standards of Independent Directors as described in the Corporate
Governance Code [Principle 4.9], and designates all Outside Directors who meet the standards as Independent
Directors.

- 14 -

[Incentives]
Incentive Policies for Directors

Other

Supplementary Explanation
By resolution of the 59th Ordinary General Meeting of Shareholders held on August 10, 2021, the Company
has introduced the Restricted Share Remuneration Plan for Directors (excluding Directors who are Audit andSupervisory Committee Members, and Outside Directors).
Recipients of Stock Options
Supplementary Explanation--[Director Remuneration]
Disclosure of Individual Directors’
Remuneration

No individual disclosure

Supplementary Explanation
The Company discloses the total annual remuneration of internal Directors and the total annual remunerationof Outside Directors.
Policy on Determining Remuneration Amounts
and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
The policy for determining remuneration, etc. for Directors is as follows:
1. Basic Policies
The Company has designed a systematic remuneration system in consideration of each element of thefollowing basic policies, as it regards the remuneration for Directors as an important incentive for achieving
its management philosophy.
(i) It shall promote the corporate philosophy of “making life better for our customers.”(ii) The amount and design shall be at a level that can support participation and activities of talented
management team.
(iii) It shall raise awareness of the need for contribution to mid- to long-term growth of the Company.
(iv) It shall be linked to business results of the Company and have a mechanism that controls
overemphasis on short-term performance.
(v) It shall be designed to have transparency, fairness and reasonability and determined through anappropriate process to ensure such factors from a viewpoint of accountability to stakeholders
including shareholders and employees.
Specifically, remuneration for Directors consists of fixed remuneration, performance-linked bonuses andrestricted share remuneration.
The level of remuneration for Directors is verified every year in reference to the levels of officers’
remuneration of companies in the same industry with a similar size (selected in terms of net sales, market
capitalization, consolidated operating income and other factors) and other companies in different industries- 15 -

based on objective remuneration survey data by external bodies and other data for promptly responding tochanges in external environments and market environments.
2. Details of Directors’ remuneration and composition, etc.
Remuneration for Directors consists of 1) “fixed remuneration” (monetary remuneration) as basic
remuneration in accordance with their job title (position), 2) “bonuses” (monetary remuneration) based on
business results for each fiscal year and their individual evaluations, etc. and 3) “stock remuneration”(restricted share remuneration) in accordance with their job title (position). The composition of remuneration
is different for Directors who are Audit and Supervisory Committee Members, Outside Directors, and other
Directors, who all have very different responsibilities.
Regarding the composition of remuneration for Directors (excluding Directors who are Audit and Supervisory
Committee Members and Outside Directors), a ratio of basic remuneration, bonuses and stock remuneration
is determined, so that it functions as important incentives to achieve the management policy.
Specifically, the following ratio is applied:
Basic remuneration: Bonuses: Stock remuneration = 30-40%: 50-60%: 5-15%
In this regard, shares of the Company shall be granted as stock remuneration.
Overview of Remuneration Composition for Directors (excluding Directors who are Audit and Supervisory
Committee Members and Outside Directors)
Type ofremuneration
Basic
remuneration

Payment criteria

Determined for each person based on the standard
amount for each job title

Payment
methodCash
Once a month

Composition
of
remuneration
30-40%

The amount is calculated for each person as monetary
remuneration reflecting business results of a single
Bonusesfiscal year, after determination of whether or not

Cashpayment is made and the total amount if paid, based

Once a year

50-60%

on consolidated business performance indicators, etc.
of the previous fiscal year.
The number of shares to be granted to each Director
is determined in comprehensive consideration ofStockvarious factors including the degree of contribution

Sharesremunerationby each eligible person to the Company and theirOnce a year

5-15%

responsibilities based on the share price and thestandard for job title.
(Bonuses)
The amount of bonuses as performance-linked remuneration is calculated for each person as monetary
remuneration reflecting business results of a single fiscal year, after determination of whether or not payment
is made and the total amount if paid, based on consolidated business performance indicators, etc. of theprevious fiscal year. “Operating income and net income” of the consolidated results and mission
accomplishment by individual are used as indicators for calculating bonuses from the viewpoint of attachingimportance to the degree of achievement in profit growth. The payment is made once a year following the- 16 -

completion of the necessary internal procedures and the conclusion of the Ordinary General Meeting of
Shareholders.
(Stock remuneration) *Restricted share remuneration
The number of shares to be granted for restricted share remuneration is determined in comprehensive
consideration of various factors including the degree of contribution by each eligible person to the Company
and their responsibilities, based on the number of shares to be granted to each Director set in accordance withthe share price and standard allocation for job title.
The timing of the allotment of the shares is determined by the Board of Directors held in September after theOrdinary General Meeting of Shareholders.
Restricted shares to be allotted to Directors of the Company are granted in advance.
The Company only pays basic remuneration to Directors who are Audit and Supervisory Committee
Members, Outside Directors who are Audit and Supervisory Committee Members, and Outside Directors,
based on their independence from business execution.
Overview of Remuneration Structure for Directors who are Audit and Supervisory Committee Members andOutside Directors
Composition of
remuneration
Directors
Type ofremuneration

Payment criteria

Payment

who aremethodAudit andOutsideSupervisory

Directors

Committee
MembersBasic
remuneration

Determined for each person based on thestandard amount for each job title

Cash
Once a month

100%

100%

3. Process for determining remuneration for Directors
The authority for determining the specifics of the remuneration amount for each Director (excluding Directors
who are Audit and Supervisory Committee Members) is delegated to the President & Representative Director,
based on a resolution by the Board of Directors within the total amount preapproved by the General Meetingof Shareholders. Such authority includes the determination of the amount of basic remuneration for each
Director and the amount of bonus distribution for each Director based on the payment criteria. For stock
remuneration, the number of shares allotted to each Director is resolved at a meeting of the Board of Directors.
To ensure the appropriateness of the level and amount of remuneration and transparent remuneration of thedetermination process, the specific amount of remuneration to be paid is deliberated at the Nomination andRemuneration Committee which is a consulting body for remuneration of the Company’s officers, inconsideration of trends among other companies in the same industry and companies with a similar scale aswell as suggestions about the necessity for the Company’s corporate management, and opinions of experts.
Then, the Personnel Division develops remuneration plans for each Director and the Officer responsible for
Administration discusses them sufficiently with the President.
*Matters to be deliberated at meetings of the Nomination and Remuneration Committee
 Draft proposals relating to Director remuneration to be submitted to the General Meeting of Shareholders
 Policies on determining individual remuneration for Directors (including Executive Officers and Group
executives) Draft proposals on the content of individual remuneration for Directors (including Executive Officers andGroup executives)- 17 -

The amount of individual remuneration for Directors who are Audit and Supervisory Committee Members isdetermined in discussions among the Directors who are Audit and Supervisory Committee Members, basedon proposals from the Nomination and Remuneration Committee, within the scope of the total preapproved
amount resolved by the General Meeting of Shareholders.

3. Reasons for Adoption of Current Corporate Governance System
At the 59th Ordinary General Meeting of Shareholders held on August 10, 2021, the Company transitioned
to a Company with an Audit and Supervisory Committee. Following this move, the Company intends tofurther strengthen the audit and supervisory functions and further deepen the corporate governance system aswell as expediate management decision-making by delegating decision-making authority from the Board of
Directors to Executive Directors.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Meetings of Shareholders and Smooth Exercise of Voting Rights
Early Notification of General
Meeting of Shareholders
Allowing Electronic Exercise of
Voting Rights
Participation in Electronic Voting
Platform or Other Initiatives to
Improve the Environment for
Exercising Voting Rights
Providing Convocation Notice(Summary) in English
Other

Supplementary Explanation
Dispatched 22 days prior to the opening of the General Meeting of
Shareholders.
Can be exercised through the Company’s voting rights exercise
website.
Voting rights can be exercised through the electronic voting platform
for institutional investors operated by ICJ, Inc.
Displayed on the Company’s website, the Tokyo Stock Exchange
website, and on the electronic voting platform.
Live streaming of the General Meeting of Shareholders on the website- 18 -

2. IR Activities
Supplementary Explanation
Preparation and Publication ofDisclosure 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

The IR policies are posted on the Company’s website.
(https://www.tsuruha-hd.com/ir/policy/)
The Company holds briefings for individual investorsin every region several times a year.
The Company holds regular briefing conferences after
each quarterly financial results announcement.

Explanations byRepresentatives

Yes
Yes

The Company displays information about the financial
highlights and the status of the IR activities on the
Company’s website along with news releases,
consolidated financial results, securities reports,
quarterly reports, financial results briefing materials,
and other documents (including English versions).
The Company has established the IR Group of the
Accounting Division as a specialist investor relations
department.

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 Explanation
The TSURUHA Group has pursued business activities based on its
business philosophy of “making life better for our customers.” In order tocontinue fulfilling the responsibilities as a company, we aim to contributeeven more to local communities through the business activities, help
address various issues relating to society and the environment, and seeks
to become a company that can help develop the Sustainable Development
Goals (SDGs) through constructive dialogue with all our stakeholders.
In order to convey its sustainability-related initiatives to people outside theCompany in a readily understandable way, the Company clearly declares
the initiatives and directions for material issues in the ESG area on the
Company’s website, and frequently publish the latest status of theactivities designed to help achieve the SDGs.
(https://www.tsuruha-hd.com/sustainability/)
The Company strives to disclose corporate information in a timely and fairmanner and to avoid concentrating any information disclosure on specificindividuals and organizations. This is done in accordance with the
Financial Instruments and Exchange Act and the Rules on Timely
Disclosure of Corporate Information by Issuers of Listed Securities(hereafter referred to as “Timely Disclosure Rules”) stipulated by the
Tokyo Stock Exchange. The Company also publishes information that is
not stipulated in the Timely Disclosure Rules on the website in response
to investor requests and in order to illustrate the proactive stance toward
ensuring more accurate, fair, and prompt information disclosure.
(https://www.tsuruha-hd.com/ir/policy/)- 19 -

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development
In order to respond to the various stakeholders connected to the Company based on the business philosophyof “making life better for our customers,” the Company recognizes that strengthening and enhancing corporate
governance is one of the most important management issues for achieving sustainable growth and increasing
corporate value.
The Company believes that building internal control systems to strengthen and enhance corporate governanceand to ensure the appropriateness of the business administration is an important process for the Company, andhas established the following basic policy regarding the establishment of internal control systems:
Basic Policy on Establishment of Internal Control System
1. System to ensure that execution of duties by Directors and employees of the Company and its subsidiaries
complies with laws and regulations, and the Articles of Incorporation(1) The Company shall determine the Regulation of Authority and Duties and the Division of Duties andAuthority to clarify the scope of professional duties of Directors and employees of the Company andits subsidiary companies, and establish a framework to ensure that the performance of those duties
conforms with laws, regulations, and the Articles of Incorporation.
(2) The Company shall determine the Compliance Regulations and establish a framework that upholds
laws and regulations (including administrative notices and guidelines), internal rules, and corporate
ethics.
(3) The Company shall determine the Whistleblowing Regulations, establish the reporting system that is
separate from the regular work-related communication channels and operates independently from thebusiness execution departments, and establish a framework in which the content of those reports isappropriately communicated to Directors if required.
(4) The Company shall not engage with any forces that pose a threat to social order or the sound activities
of companies, and shall respond systematically and resolutely to any unreasonable demands.
2. System regarding management and storage of information related to the execution of duties by Directorsof the Company
The Company shall determine the Document Management Regulations, appropriately store documents
pertaining to the execution of business by Directors, including the minutes of meetings of the Board of
Directors, from current and previous fiscal years, and manage that information in a manner so that information
can be viewed swiftly when necessary and Directors can always obtain the information they require.
3. Regulations and other systems for managing the risk of loss of the Company and its subsidiaries
The Company shall classify risks surrounding the Company and its subsidiaries into the following categories,
institute the Risk Management Regulations to address these risks, and establish a system for grasping risks at
an early stage and addressing them promptly.
(1) Risks relating to physical goods (company assets, etc.)(2) Risks relating to people (managers, employees)(3) Risks relating to management(4) Risks relating to information(5) Other risks relating to violations of laws and regulations
4. System to ensure efficient execution of duties by Directors of the Company and its subsidiaries(1) The Company shall determine the Regulation of Authority and Duties and the Division of Duties andAuthority to clarify the scope of professional duties of Directors and employees of the Company andits subsidiary companies, and establish a framework to ensure those duties are performed efficiently.
(2) The Company shall determine the Board of Directors Regulations and establish a system for ensuring
Directors of the Company and its subsidiaries make prompt management decisions.
(3) The Company shall determine the Management Meeting Regulations and establish a system in which
Directors of the Company and its subsidiaries smoothly communicate basic business execution
policies, basic plans, and other important management-related matters.

- 20 -

5. System to ensure proper business operations of the enterprise group consisting of the Company and its
subsidiaries(1) The Company shall apply the Basic Policy on Establishment of Internal Control System and build aninternal control system for the Company and its subsidiaries.
(2) The Company shall institute the Management Meeting Regulations and establish a system in which
officers, general managers, and office managers of the Company and its subsidiaries can smoothly
communicate basic business execution policies, basic plans, and other important management-related
matters.
6. Matters regarding Directors and employees that support the Audit and Supervisory Committee in executionof duties and matters regarding independence of Directors and employees that support the Audit andSupervisory Committee in execution of duties from other Directors (excluding Directors who are Audit andSupervisory Committee Members)
The Company shall ensure that Directors and employees assigned to assist with the duties of the Audit andSupervisory Committee can execute their duties under the direction of the Audit and Supervisory Committee,
and maintain their independence from other Directors (excluding Directors who are Audit and Supervisory
Committee Members).
7. Matters regarding ensuring the effectiveness of instructions by the Audit and Supervisory Committee to
Directors and employees that support the Audit and Supervisory Committee in execution of duties
The Company shall ensure that Directors and employees assigned to assist with the duties of the Audit andSupervisory Committee can execute their duties under the direction of the Audit and Supervisory Committee,
and secure the effectiveness of Audit and Supervisory Committee directions.
8. System for reporting to the Audit and Supervisory Committee, including for reports by Directors (excluding
Directors who are Audit and Supervisory Committee Members) of the Company and its subsidiaries andemployees and system for ensuring that a person who makes said report shall not be subject to any unfavorable
treatment for reason of having made said report
In order to establish a system that facilitates reporting to the Audit and Supervisory Committee, Audit andSupervisory Committee Members or employees assigned to assist with Audit and Supervisory Committee
duties, the Company shall determine the Audit and Supervisory Committee Regulations that include thefollowing details and ensure its appropriate operation:(1) The Audit and Supervisory Committee shall request reports on the execution of duties by Directors(excluding Directors who are Audit and Supervisory Committee Members) and employees of theCompany and its subsidiaries, and also audit the business and finances of the Company and its
subsidiaries.
(2) When asked to submit a report by the Audit and Supervisory Committee, Audit and Supervisory
Committee Members, or employees assigned to assist with Audit and Supervisory Committee duties,
an appropriate report shall be provided.
(3) The Company shall establish a system that ensures any person who reports to the Audit andSupervisory Committee, Audit and Supervisory Committee Members, or employees assigned toassist with Audit and Supervisory Committee duties does not suffer any damage as a result.
9. Matters regarding the policy for handling expenses or payables in relation to execution of duties of Audit
and Supervisory Committee Members (limited to those related to the execution of duties of the Audit andSupervisory Committee), such as procedures for advance payment or reimbursement in relation to executionof such duties(1) If Audit and Supervisory Committee Members or the employees who assist with Audit andSupervisory Committee duties deem it necessary for their auditing work to seek advice from external
experts, such as lawyers, certified public accountants, or tax accountants, the cost of those
consultations and any other costs arising from the conducting of auditing duties shall be borne by
the Company.
(2) The same reimbursement rules apply to any prepaid commencement fees or expenses that are
incurred after the delivery of a service in relation to items in (1) above.

- 21 -

10. Other systems to ensure effectiveness of audits by the Audit and Supervisory Committee
The Company shall secure an effective auditing system by ensuring the regular delivery of reports from the
Accounting Auditor and guaranteeing the Audit and Supervisory Committee the opportunity to seek advice
from external experts such as lawyers, certified public accountants, and tax accountants when necessary.
11. System to ensure fairness of financial reporting
The Company shall establish the “Internal Control Committee” to ensure the reliability of financial reportingof the Company and its subsidiaries and build a system for ensuring the fairness of financial reporting required
under the Financial Instruments and Exchange Act, other related laws and regulations, etc.
12. System toward elimination of anti-social forces
The Company shall have no relationship with any forces threatening the social order and sound activities ofcompanies and resolutely take countermeasures against any unreasonable demand, if received, in an
organizational way.

2. Basic Views on Eliminating Anti-Social Forces
Please refer to “1.12. System toward elimination of anti-social forces” above.

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

Not adopted

Supplementary Explanation---

2. Other Matters Concerning to Corporate Governance System
The Company system is designed to enable us, as the umbrella company, to swiftly grasp all types of
information within Group companies primarily through the General Affairs Division, which has been
designated as the department in charge of information disclosure. The system facilitates the reporting offactors and important items that emerge during daily operations at each Group company from employees todepartment heads, and then to the Executive Officer and Chief Administrative Officer, who is the person in
charge of information disclosure. The Company promptly executes timely disclosure by swiftly identifying
any problematic areas in terms of information disclosure.
In terms of determined facts, the Company has also established a system for facilitating the prompt disclosureof decisions made by the Board of Directors as the Company’s main decision-making body.
Furthermore, the Company strives to raise awareness of the importance of legal compliance within the
Company in order to ensure thorough compliance. The Company also consults in detail and cooperates with
Audit and Supervisory Committee Members, the auditing firm, and legal counsels.

- 22 -

- 23 -

- 24 -