Corporate GovernanceNishimoto Co., Ltd.

Last update date

March 30, 2021

Nishimoto Co., Ltd.
Yoshiro Susaki
Chairman & President CEO
Contact: Group Governance & Business Ethics Department
03-6870-2015(Securities code 9260)
https://www.wismettac.com
The following outlines the state of corporate governance at the Company.
I. Fundamental concept on corporate governance, capital breakdown, corporate attributes and other basic information
1. Fundamental concept
We believe our mission is to pursue operations which are focused on the interests of all stakeholders such as
shareholders, customers, business partners, employees and local communities under our corporate philosophy ofpromoting close coordination with the Nishimoto Wismettac Group companies which are continuing to expand
globally. This is aimed at contributing to the happiness of a large number of customers by seeking to realize the
dream of enriching the lives of citizens across the world through our food service, which is our fundamental
concept. To fulfill the above-mentioned mission, it is essential that the Company keeps developing its business in astable and sustainable manner. Our fundamental policy for corporate-governance measures is to develop aframework in which to secure the business soundness, transparency and efficiency that constitute the foundation ofthis development.
Reasons why the principles of the Corporate Governance Code are not put into practicePrinciple 3-1 Full Disclosure(i) What the Company aims for
The Company’s business philosophy is made public on its website and in the corporate profile section. The
organization’s business strategies and plans are presented in its Securities Report.
(ii) Fundamental concept and policy on corporate governanceAs described in the “I.1 Fundamental concept” section of this report.
(iii) Policy and procedure for the Board of Directors to determine the remuneration for senior management
executives and directors
As described in the “Principle 3-1 Full Disclosure” section in the segment titled “Disclosure pursuant to theindividual principles of the Corporate Governance Code” of this report.
(iv) Policy and procedure for the Board of Directors to appoint or remove senior management executives andnominate director candidates
Each director candidate, who is not an Audit & Supervisory Committee member, shall be appointed at therecommendation of the Chairman & CEO or the President & COO and each executive officer candidate shallbe appointed at the recommendation of directors from among professionals who have extensive knowledge
and experience, who are well-versed in the operations of individual business units, and who have a sincere
personality and superior execution skills. Their removal shall be determined through cautious consultations by
the Board of Directors. Each director candidate to be appointed, who is an Audit & Supervisory Committee
member, shall be a professional who has insight into rigorously complying with laws and regulations andcorporate ethics rules, who will audit directors’ execution of duties from a neutral and objective point of view,
and who is expected to contribute to the maintenance and improvement of the Company’s sound business
operations. The consent of the Audit & Supervisory Committee shall be obtained prior to submitting a
proposed resolution for the appointment or removal of directors serving concurrently as Audit & Supervisory
Committee members to a General Meeting of Shareholders.
(v) Explanation of individual appointments or removals and nominations at the time of appointment or removal ofsenior management executives and the nomination of director candidates
The Company intends to publish individual statements on appointments or removals and nominations in thenotice of convocation of the General Meeting of Shareholders.
Supplementary Principle 4-1(3): Plan for Training Successors
From the viewpoint of training successors, the Company provides management executives such as executive
officers and department managers with opportunities to participate in the management of the Group throughattendance at the important Group meetings. The Company has been considering specifying the individual
responsibilities of such management executives and utilizing the evaluation of their performance of such
responsibilities for the training of successors. However, as there have not been sufficient discussions about
succession plans or training of successors, the Board of Directors will continue to have discussions.

1Corporate GovernanceNishimoto Co., Ltd.

Supplementary Principle 4-3(2)(3): Appointment or Removal of a CEO, etc.
The Company has not established unified standards or requirements for the appointment or removal of a CEO, etc.
Given that the appointment of a CEO, etc. is the most important strategic decision in a company, the Company
appoints a qualified person as a CEO, etc. after receiving proper assistance and advice from independent outside
directors at Board of Directors meetings. The removal of a CEO, etc. shall be carried out after sufficientdeliberations at Board of Directors meetings attended by independent outside directors if such action is considered
to be appropriate from an objective viewpoint, for example if the person has violated laws or regulations or the
Articles of Incorporation and if the person is found to have significantly damaged the Company’s enterprise value.
Supplementary Principles 4-11(3): Analysis and Evaluation of the Effectiveness of the Board of Directors
We are aware that the analysis and evaluation of the effectiveness of the Board of Directors as a whole are
significant challenges. In order to improve the functions of the Board of Directors, going forward we will
deliberate such analysis and evaluation, including the evaluation method.
Supplementary Principles 4-14(2): Training Policy for Directors
Currently, we do not see any need to train directors, given that the Company nominates each director candidate
only after judging whether he/she is equipped with the knowledge and qualities that will be sufficient to serve as adirector, and whether the candidate is suitable for the execution of duties, and obtained the approval of the General
Meeting of Shareholders. However, we regard the following to be highly important challenge: the sharing of
information on the Company’s operations, finances, organization, business plan and conditions, as well as onindividual directors’ roles and responsibilities, and also the environment surrounding the Company; and inparticular, the sharing of a common awareness about corporate governance and corporate ethics. We will consider
organizing training programs for directors and executive officers in the future.
Principle 5-2: Formulation and Announcement of Business Strategies and Plans with the Understanding of Capital
Costs
Although the Company has formulated and announced its medium-term management plan which continues until
2022, it has not provided its capital costs in the plan. However, the Company, which makes relatively small capital
investments for its business operations, uses ROWC (Return On Working Capital) as a criterion for businessefficiency.
*ROWC: An index obtained by dividing the operating income of each business division by its working capital(accounts receivable + inventory, etc. - accounts payable).
Disclosure pursuant to the individual principles of the Corporate Governance CodePrinciple 1-4: Cross-shareholdings
Currently, the Company owns no cross-shareholdings. If we consider doing so in the future, we will adhere to thepolicy of choosing a company that we consider will help raise our enterprise value on a medium- to long-termbasis from the perspective of maintaining or bolstering the relationships with our business partners and that of ourbusiness strategy and by closely examining specific matters such as whether there is a benefit of shareholding thatis appropriate to the capital cost.
Principle 1-7: Related Party Transactions
The Company’s Rules on Related Party Transaction Management stipulate that, to enter into a transaction with arelated party, the approval of the Board of Directors must be obtained and a relevant report must be submitted to
the Board. A proposed resolution for the transaction shall be passed by the Board of Directors without theattendance of any director deemed to be a special interest person. We periodically check whether any related-party
transaction exists.
Principle 2-6: Demonstrating Functions as a Corporate Pension Asset Owner
While having no corporate pension plan in place, the Company plans to adopt a defined contribution pension planin fiscal year 2021 in order to help employees build assets steadily. For operating the plan, we widely inform
employees of basic knowledge in the plan for starting investing, coupled with matters to be noted on investing, inan effort to provide sufficient education to employees.
Principle 3-1: Full Disclosure(i) What the Company aims for
The Company publishes its business philosophy on its website and in the corporate profile section. It presents
its business strategies and plans in its Securities Report.
(ii) Fundamental concept and policy on corporate governanceAs described in the “1.1 Fundamental concept” section of this report.
(iii) Policy and procedure for the Board of Directors to determine the remuneration for senior management
executives and directors.

2

Corporate GovernanceNishimoto Co., Ltd.

Our basic policy on the remuneration for directors is to ensure that it: i) sufficiently enhances their intent andmotivation to improve the Group’s corporate performance; ii) can be explained reasonably to internal andexternal stakeholders; iii) allows the Group’s senior management executives who are diverse, including in
nationality, to have a sense of unity; and iv) helps raise the Group’s enterprise value in a sustained manner.
The remuneration plan for directors not serving concurrently as Audit & Supervisory Committee members
consists of basic remuneration, annual deferral for retirement remuneration, short-term incentive bonus, andlong-term incentive (stock-based remuneration). The basic remuneration for directors is determined by the
Chairman & President CEO who is so delegated by the Board of Directors following deliberations done at the
Remuneration Advisory Committee in comprehensive consideration of individual directors’ duties andachievements and the remuneration levels for comparable duties in the markets. For annual deferral for
retirement remuneration, an amount equivalent to 10% of a director’s basic remuneration is deferred and acumulative amount of deferral is computed and paid out at retirement. Short-term incentive bonus is a type ofbonus for which a standard bonus amount is set at 20% to 50% or so of the director’s basic remuneration inaccordance with his/her responsibilities, and an actual bonus amount is determined to be a minimum of 0%
and up to a maximum of 200% of the director’s standard bonus amount in consideration of his/her
contribution to corporate performance for each fiscal year. The targets for corporate performance contribution
are set for the Company as a whole, the unit (in the charge of each director) and the director respectively at
20% to 100%, 0% to 60% and 0% to 20% on a responsibility basis. The amounts of bonuses for directors are
determined by the Chairman & President CEO who is so delegated by the Board of Directors following
deliberations done at the Remuneration Advisory Committee. An evaluation of corporate performance
contribution, as set forth above, targets not only the single-year corporate performance for a given target year
but also activities in the year among contribution activities to raise the Group’s enterprise value from a
medium- to long-term perspective. Long-term incentive (stock-based remuneration) takes the form of
restricted stock unit (RSU). Each director’s RSU entitlement is determined three years or more after unit
vesting from a perspective of long-term incentive intended to help raise the Group’s enterprise value in themedium- to long-term, following which the Group grants 50% of the RSUs in the form of shares and theremaining 50% in the form of cash. The amounts of RSUs for directors are determined by the Chairman &President CEO who is so delegated by the Board of Directors following deliberations done at the
Remuneration Advisory Committee in comprehensive consideration of individual directors’ duties andachievements and the remuneration levels for comparable duties in the market.
The policy and procedure described above apply to the remuneration for senior management executives
including executive officers.
The remuneration plan for directors serving concurrently as Audit & Supervisory Committee members(excluding outside directors) consists of basic remuneration, annual deferral for retirement remuneration, andlong-term incentive (stock-based remuneration) and the remuneration plan for directors serving concurrently as
Audit & Supervisory Committee members (outside directors), consisting solely of basic remuneration, isdetermined through consultations by directors serving concurrently as Audit & Supervisory Committee members.
(iv) Policy and procedure for the Board of Directors to appoint or remove senior management executives andnominate director candidates
Each director candidate, who is not an Audit & Supervisory Committee member, shall be appointed at therecommendation of the Chairman & CEO or the President & COO and each executive officer candidate shallbe appointed at the recommendation of directors from among professionals who have extensive knowledge
and experience, who are well-versed in the operations of individual business units, and who have a sincere
personality and superior execution skills. Their removal shall be determined through cautious consultations by
the Board of Directors. Each director candidate to be appointed, who is an Audit & Supervisory Committee
member, shall be a professional who has insight into rigorously complying with laws and regulations andcorporate ethics rules, who will audit directors’ execution of duties from a neutral and objective point of view,
and who is expected to contribute to the maintenance and improvement of the Company’s sound business
operations. The consent of the Audit & Supervisory Committee shall be obtained prior to submitting a
proposed resolution for the appointment or removal of directors serving concurrently as Audit & Supervisory
Committee members to a General Meeting of Shareholders.
(v) Explanation of individual appointments or removals and nominations at the time of the appointment or
removal of senior management executives and the nomination of director candidates
The Company intends to publish individual statements on appointments or removals and nominations in thenotice of convocation of the General Meeting of Shareholders.
Supplementary Principles 4-1(1): Outline of scope of delegation to management
The Company clearly specifies the provisions of the Articles of Incorporation and laws and regulations, as well as
matters subject to the resolution of the Board of Directors, by prescribing the Board of Directors Rules. The Boardof Directors adequately delegates to executive directors and executive officers the execution of ordinary duties
other than the matters that must be judged and determined by the Board of Directors, and supervises how theseduties are performed.

3

Corporate GovernanceNishimoto Co., Ltd.

Principle 4.9: Criteria for Independence Judgment and Qualities of Independent Outside Directors
When electing an outside director candidate, we choose a professional who meets independence requirements
stipulated by the financial instrument exchange on which the Company is listed and who will likely contribute to
candid, active and constructive discussions at the Board of Directors meetings.
Supplementary Principles 4-11(1): Concept regarding the balance of knowledge, experience, and ability, as well as
the diversity and scale of the Board of Directors as a whole
We became a company with an audit & supervisory committee after resolving to do so at the General Meeting of
Shareholders held on March 22, 2016.
The Company has seven directors, including three Audit & Supervisory Committee members. The four executive
directors are members with excellent knowledge, experience and skills, such as in terms of industry experienceand in general business administration and business management. Two of the three Audit & Supervisory
Committee members serving as directors have highly specialized knowledge and extensive experience, including
in global business administration, investment and finance, as independent outside directors, and therefore it isconsidered that the composition of the Board of Directors is well balanced.
Following a recommendation by the Chairman & CEO or the President & COO, we recommend to the General
Meeting of Shareholders a director candidate chosen from among professionals who have specialized knowledge
and extensive experience, both inside and outside of Japan, in fields such as general business administration andfinance after deliberations by the Board of Directors.
Supplementary Principles 4-11(2): Concurrent Services by Directors
The state of concurrent services by directors for other listed companies is disclosed in the notice of convocation of
the General Meeting of Shareholders, as well as in the Securities Report.
Supplementary Principles 4-11(3): Analysis and Evaluation of the Effectiveness of the Board of Directors
We identify as important challenges the analysis and evaluation of the effectiveness of the Board of Directors as awhole. Going forward, we will consider the relevant points, including the evaluation method, toward improving
the functioning of the Board of Directors.
Supplementary Principles 4-14(2): Training Policy for Directors
Currently, we do not see any need to train directors, given that the Company nominated each of the director
candidates only after judging whether he/she has the knowledge and qualities that are sufficient to serve as adirector and whether he/she is suitable to execute the duties, and obtained the approval of the General Meeting of
Shareholders. However, we regard the following to be highly important challenges: the sharing of information on
the Company’s operations, finances, organization, business plan and conditions, as well as individual directors’roles and responsibilities, and also the environment surrounding the Company; and in particular, the sharing of acommon awareness about corporate governance and corporate ethics. We will consider organizing training
programs for directors and executive officers in the future.
Principle 5-1: Policy for Constructive Dialogue with Shareholders
The Company discloses information to shareholders and investors appropriately, with the Corporate Planning
Department being made responsible for this. The Company holds financial results briefings attended byrepresentative directors for institutional investors twice each year and also responds to inquiries from othershareholders and investors as much as possible in order to provide opportunities to have constructive dialogues
with shareholders.

4Corporate GovernanceNishimoto Co., Ltd.

2. Capital breakdown
Foreign share ownership ratio

10% or more and less than 20%

Major shareholders
Number of shares held
(shares)
6,235,740
2,910,000
1,300,000
536,500

Name
Tatsumi Industries Co., Ltd.
Yoshiro Susaki
Susaki Welfare Foundation
NORTHERN TRUST CO. (AVFC) RE FIDELITY
FUNDS (standing proxy: HSBC Tokyo Branch)
GOVERNMENT OF NORWAY (standing proxy:
Citibank, N.A., Tokyo Branch)
The Master Trust Bank of Japan, Ltd. (trust account)
STATE STREET BANK AND TRUST CLIENTOMNIBUS ACCOUNT OM02 505002 (standing proxy:
Mizuho Bank, Ltd.)
Custody Bank of Japan, Ltd. (trust account)
Custody Bank of Japan, Ltd. (trust account 9)
Takayuki Kanai
Name of controlling shareholders

Yoshiro Susaki

Name of parent company
Listing exchange for parent company––

Ratio (%)
43.45
20.27
9.06
3.74

326,000

2.27

288,500
258,700

2.01
1.80

220,000
188,400
140,000

1.53
1.31
0.98

Supplementary explanation–

3. Corporate attributes
Listing market category
Fiscal year ending
SectorNumber of employees as of the end of the preceding
fiscal year (consolidated)
Net sales for the preceding fiscal year (consolidated)

First Section
December each year
Wholesaling
At least 1,000
At least 100.0 billion yen and less than 1,000.0 billion
yen
At least 10 companies and less than 50 companies

Number of consolidated subsidiaries as of the end of
the preceding fiscal year

4. Guidelines on measures to protect minority interest shareholders when entering into a transaction with thecontrolling shareholder
The Company has no transaction relationship with the controlling shareholder. If it enters into a transaction withthe controlling shareholder in the future, the Company shall apply the terms and conditions identical to those of an
ordinary transaction and handle the transaction appropriately so as not to compromise the interests of the Groupand its minority interest shareholders.
5. Special circumstances potentially having a significant effect on the organization’s corporate governance–5Corporate GovernanceNishimoto Co., Ltd.

II. State of the corporate governance platform for the management organization and others relating to businessdecision-making, execution and supervision
1. Matters on the organizational composition and operations
Organization format
Company with an Audit & Supervisory Committee
Directors
Number of directors under the Articles of Incorporation
Director term of office under the Articles ofIncorporation
Chair of the Board of Directors
Number of directors
State of election of outside directors
Number of outside directors
Number of outside directors designated as independent
directors

Fifteen directors
One year
President
Seven directors
ElectedTwo directors
Two directors

Relationship with the Company (1)Name
Kimikazu Nomi
Yukiko Omura

AttributeaRelationship with the Company (*)
b c d e f g h ijkPerson from other company
Person from other company* Selection item for relationship with the Company* The white circle symbol () means that the item currently applies, or recently applied, to the person and the white triangle
symbol () means that the item previously applied to the person* The black circle symbol (⚫) means that the item currently applies, or recently applied, to a relative of the person and theblack triangle symbol () means that the item previously applied to a relative of the persona. An executive employee of a listed company or a subsidiary of itb. An executive employee or non-executive director of the parent company of a listed company
c. An executive employee of the sister company of a listed company
d. An entity whose main business partner is a listed company or executive employee of ite. A main business partner of a listed company or executive employee of it
f. A consulting, accounting expert or legal expert who earns a significant amount of money or who receives other gain from alisted company, in addition to director remuneration
g. A major shareholder of a listed company (if the major shareholder is an incorporated entity, an executive employee of thecorporation applies)h. An executive employee (a person only) of the business partner of a listed company (a person not falling under any of items d,e and f)i. An executive employee (a person only) of an entity having a relationship in which outside directors are mutually appointed
by each otherj. An executive employee (a person only) of an entity to which a listed company gives donations
k. Others

Relationship with the Company (2)Independent
Supplementary remarks on
Namedirector
conforming items

Kimikazu Nomi
Mr. Nomi was designated as anindependent director because he wasdeemed as not likely to cause any
conflicts of interest with ordinary
shareholders given that he had no
special interest relationship with theCompany and did not breach theindependence criteria stipulated by the
Tokyo Stock Exchange, Inc.

6

Reason for election
Mr. Nomi previously provided
financial services at Norinchukin
Bank and Aozora Bank. Moreover, atInnovation Network Corporation ofJapan (INCJ), Mr. Nomi fostered
new businesses through investing
activities and engaged in operations
to assist companies in carrying out
self-reforms. We think Mr. Nomi’s
extensive knowledge and insights
will contribute to strengthening ourgovernance through the Company’s
Board of Directors and Audit &Supervisory Committee.

Corporate GovernanceNishimoto Co., Ltd.

Yukiko Omura

Ms. Omura was designated as anindependent director because she wasdeemed as not likely to cause any
conflicts of interest with ordinary
shareholders given that she had no
special interest relationship with theCompany and did not breach theindependence criteria stipulated by the
Tokyo Stock Exchange, Inc.

Ms. Omura was previously widely
engaged in financial services andcorporate management at a
non-Japanese financial institution, theWorld Bank Group and theInternational Fund for Agricultural
Development. Ms. Omura has
extensive international experience andexcellent insights into foods, so wethink she will contribute tostrengthening our governance throughthe Company’s Board of Directors
and Audit & Supervisory Committee.

Audit & Supervisory Committee
Committee member breakdown and Chair attributes
All committee Full-time committee Inside directors
members
members(persons)(persons)(persons)
Audit & Supervisory3
1
1
Committee

Outsidedirectors(persons)

Head ofcommittee(Chair)
2 Internal
directors

Whether or not there is any director or employee whoseNonerole is to assist the Audit & Supervisory Committee duties
Matters on the independence of the directors and employees from executive directors
The Company does not appoint any director or employee with the role of assisting the Audit & Supervisory
Committee duties because we judge that, due to one member of the Audit & Supervisory Committee being fulltime, he/she will be able to carry out appropriate information delivery, sufficient information collection and close
collaboration with accounting auditors and the Group Governance & Business Ethics Department. However, wesecure a platform to assist the execution of Audit & Supervisory Committee duties by appointing the necessary
employees, if so requested by the Audit & Supervisory Committee.
State of collaboration between the Audit & Supervisory Committee, accounting auditors and the Internal Audit Division
The Audit & Supervisory Committee has established a platform to conduct effective audits of the Group as awhole by receiving reports on audits conducted by the Group Governance & Business Ethics Department with aninternal audit function and by routinely communicating with the Department. The Audit & Supervisory
Committee, accounting auditors and the Group Governance & Business Ethics Department work to collaborate
with each other through having regular opportunities to exchange opinions and information.
Voluntary committee
Whether or not there exists any voluntary committee Yes
equivalent to a nominating committee or compensationcommittee
Status of establishment of voluntary committees, committee composition and chair (chairperson) description
Name ofAll
Full-time Inside Outside External Others
Head ofcommittee committee committee directors directors experts (persons) committee
members members (persons) (persons) (persons)(Chair)(persons) (persons)Voluntary committee
－
－
－
－
－
－
－
－
equivalent to anomination committee
Voluntary committee
Remuneration
Outsideequivalent to a
Advisory
3
0
1
2
0
0
directors
compensation committee Committee
Supplementary explanation
The Remuneration Advisory Committee will continue to deliberate on, and monitor, the state of remuneration for
directors not concurrently serving as Audit & Supervisory Committee members as well as the renumeration for
individual directors for the purpose of ensuring that the levels and composition of remuneration are reasonable.
Independent directors
Number of independent directors
Other matters on independent directors–

Two persons

7

Corporate GovernanceNishimoto Co., Ltd.

Incentive
State of measures for granting incentives to directors
Other
Supplementary remarks on the applicable item
Short-term incentive bonus is a type of bonus for which a standard bonus amount is set at 20% to 50% or so of thedirector’s basic remuneration in accordance with his/her responsibilities, and an actual bonus amount isdetermined to be a minimum of 0% and up to a maximum of 200% of the director’s standard bonus amount inconsideration of his/her contribution to corporate performance for each fiscal year. The targets for corporate
performance contribution are set for the Company as a whole, the unit (in the charge of each director) and the
director respectively at 20% to 100%, 0% to 60% and 0% to 20% on a responsibility basis. The amounts ofbonuses for directors are determined by the Chairman & President CEO who is so delegated by the Board of
Directors following deliberations done at the Remuneration Advisory Committee. An evaluation of corporate
performance contribution, as set forth above, targets not only the single-year corporate performance for a given
target year but also activities in the year among contribution activities to raise the Group’s enterprise value from a
medium- to long-term perspective.
Long-term incentive (stock-based remuneration) takes the form of restricted stock unit (RSU). Each director’s
RSU entitlement is determined three years or more after unit vesting from a perspective of long-term incentive
intended to help raise the Group’s enterprise value in the medium- to long-term, following which the Group grants
50% of the RSUs in the form of shares and the remaining 50% in the form of cash. The amounts of RSUs for
directors not concurrently serving as Audit & Supervisory Committee members are determined by the Chairman &President CEO who is so delegated by the Board of Directors following deliberations done at the Remuneration
Advisory Committee in comprehensive consideration of individual directors’ duties and achievements and the
remuneration levels for comparable duties in the markets. The amounts of RSUs for directors concurrently serving
as Audit & Supervisory Committee members are determined through consultations by the directors incomprehensive consideration of individual directors’ duties and achievements and the remuneration levels forcomparable duties in the market.
Persons to whom stock options will be granted
Supplementary remarks on the applicable item–
Director remuneration
Status of disclosure
Individual remuneration is not disclosed.
Supplementary remarks on the applicable item
Not disclosed because no director received at least 100 million yen as the total consolidated remuneration.
Whether or not there exists any policy on theYesdetermination of the amount of remuneration and thecomputation method
Policy disclosed on the determination of the amount of remuneration and the computation method
Our basic policy on determination of the amounts of the remuneration of the Company’s directors and thecomputation method is to ensure that it: i) sufficiently enhances their intent and motivation to improve the Group’s
corporate performance; ii) can be explained reasonably to internal and external stakeholders; iii) allows theGroup’s senior management executives who are diverse, including in nationality, to have a sense of unity; and iv)
helps raise the Group’s enterprise value in a sustained manner. The amounts are determined in comprehensive
consideration of individual directors’ duties and achievements, and within the remuneration limit stipulated at theGeneral Meeting of Shareholders. The remuneration for directors not serving concurrently as Audit & Supervisory
Committee members is determined through consultations by the Board of Directors, and the remuneration for
directors serving concurrently as Audit & Supervisory Committee members is determined though consultations by
the Audit & Supervisory Committee members.
Support platform for outside directors (outside Audit & Supervisory Committee members)
We deliver information to outside directors from time to time, as required. Each time a Board of Directors meetingor an Audit & Supervisory Committee meeting is held, in principle we distribute the relevant data in advance,
allowing members to secure sufficient time to consider it.
2. Matters on functions such as business execution, audit & supervision, nomination and remuneration determination(outline of the current corporate governance platform)
The Company has a Board of Directors and an Audit & Supervisory Committee. Shown below are bodies involvedin the organization’s business decision-making, execution and supervision.

8

Corporate GovernanceNishimoto Co., Ltd.

Board of Directors
The Company’s Board of Directors functions as the body to make decisions on matters stipulated in the laws andregulations and the Articles of Incorporation, as well as on significant business matters, and as the body tosupervise the execution of duties by directors. The Board of Directors was comprised of seven directors (including
two outside directors) as of the date of submission of this document. The Board of Directors is ready to makebusiness decisions promptly while holding, in principle, a monthly ordinary Board of Directors meeting, aquarterly Board of Directors meeting that is intended mainly to approve a proposed budget, and an extraordinary
Board of Directors meeting, as required.
The Audit & Supervisory Committee members and the Audit & Supervisory Committee
The Audit & Supervisory Committee members attend important meetings other than Board of Directors meetings
to express opinions, as required, and audit directors’ execution of duties by viewing significant approval
documents. The Audit & Supervisory Committee was comprised of three Audit & Supervisory Committee
members (including two outside directors) as of the date of submission of this document. In addition to holding, inprinciple, a monthly ordinary Audit & Supervisory Committee meeting, the Audit & Supervisory Committee holds
an extraordinary Audit & Supervisory Committee meeting as required, allowing Audit & Supervisory Committee
members to formulate an audit plan and to deliberate the state of audits performed and audit results, sharing
information with each another. And the Audit & Supervisory Committee members hold meetings with the Group
Governance & Business Ethics Department with an internal audit function and accounting auditors from time totime to share information on audit results and extracted issues and to collaborate with each other.
Executive Officer System and Board of Executive Officers
The Company introduced the executive officer system in order to vitalize the Board of Directors, expedite its
decision-making and streamline the business execution. Executive officers, being elected by the Board of
Directors, fulfill their duties according to the segregation of duties stipulated by its resolution, and they werecomprised of four officers as of the date of submission of this document. The Company established the Board of
Executive Officers as a meeting body designed to report on executive officers’ execution of duties, devise
improvement measures, inform and disseminate Board of Directors decisions and allow information to be shared
among directors. A Board of Executive Officers meeting, comprised of executive officers and executive directors,
is held at least once in the second half of each month, in principle.
Group Governance & Business Ethics Department
The Company established the Group Governance & Business Ethics Department for the purpose of continuallymonitoring that the Group’s risk control and compliance system is being developed and operated appropriately. In
addition to also having an internal audit function, the Department conducts an internal control assessment about
financial reporting as stipulated in the Financial Instruments and Exchange Act. The Department holds acompliance meeting as required, and, in the event of a significant problem, immediately consults on anddetermines necessary response measures before reporting the matter to the Board of Directors.
Internal audit and Audit & Supervisory Committee Member audit
The Group Governance & Business Ethics Department is in charge of the Company’s internal auditing. The
Company conducts an internal audit in order to ensure the accuracy of the information on its business
management, conduct its business activities normally and improve them, by verifying and assessing the state ofdevelopment and operation of internal control such as concerning whether or not each Group company’sorganization, systems and operations are managed appropriately and efficiently pursuant to laws and regulations,and the Company’s business policies and rules. The Group Governance & Business Ethics Department reports theaudit results to the Chairman & CEO, proposes improvements and conducts a follow-up audit regarding the9

Corporate GovernanceNishimoto Co., Ltd.

subsequent improvements, thereby securing the effectiveness of internal audits. The department conducts aninternal control assessment about financial reporting as stipulated in the Financial Instruments and Exchange Act.
An Audit & Supervisory Committee audit is conducted at the Company by three Audit & Supervisory Committee
members. The Company has in place a system in which they are able to periodically exchange opinions withrepresentative directors and information with Internal Auditors, receive reports from executive directors as
required, and monitor their execution of duties sufficiently.
State of Accounting Audits
After entering into an audit agreement with Ernst & Young ShinNihon LLC, the Company has been subjected toan accounting audit by this audit firm under the Companies Act and the Financial Instruments and Exchange Act.
The audit firm takes measures to prevent executive employees from being involved in an accounting audit for theCompany beyond a certain period of time. The Company has no special-interest relationship with the audit firm or
its executive employees who are engaged in the audit of the Company. Shown below are the names of the Certified
Public Accounts who audited the Company and the breakdown of the audit assistants.
Names of Certified Public Accounts who conducted the audit
Designated limited liability employees, executive employees: Kyoji Ito and Taisuke Horie
Breakdown of audit assistants: 5 Certified Public Accounts, 4 accountant exam passers, etc. and 29 otherpersons (including U.S. Certified Public Accountants)
Policy on determining the amount of director remuneration and computation method
The amounts of the remuneration for the Company’s directors and the computation method are determined basedon a comprehensive consideration of individual directors’ duties and achievements, and within the remuneration
limit stipulated at the General Meeting of Shareholders. The remuneration for directors not serving concurrently as
Audit & Supervisory Committee members is determined through consultations by the Board of Directors, and the
remuneration for directors serving concurrently as Audit & Supervisory Committee members is determined thoughconsultations by the Audit & Supervisory Committee members.
Outline of the liability exemption for directors and the limited liability agreement
The Company’s Articles of Incorporation stipulate that, pursuant to Article 426, Paragraph 1 of the Companies
Act, the organization may exempt its directors (including former directors) from damage compensation liability to
the extent stipulated by the laws and regulations following a resolution by the Board of Directors. Pursuant to theprovision of Article 427, Paragraph 1 of the Companies Act, the Company has entered-into with its directors(excluding executive directors) an agreement that limits damage compensation liability set forth in Article 423,
Paragraph 1 of the Companies Act. The maximum amount of damage compensation liability under the agreement
was set at the minimum liability limit stipulated by the laws and regulations.
3. Reason for having selected the current corporate governance platform
Having selected “company with an audit & supervisory committee” as its corporate governance platform, theCompany has in place the Board of Directors, the Audit & Supervisory Committee and accounting auditors. The
aim of this is to further enhance the Company’s corporate governance by arranging for directors serving
concurrently as Audit & Supervisory Committee members, who hold voting rights for Board of Directors
meetings, to conduct audits, thus raising the effectiveness of their audits and supervision; appointing outside
directors to further bolster the Board of Directors’ supervisory function; and delegating to directors the whole or apart of the decision-making for significant business execution, thereby allowing the Board of Directors to expedite
its decision-making.

10

Corporate GovernanceNishimoto Co., Ltd.

III. State of implementation of measures for shareholders and other interested parties
1. Efforts to vitalize the General Meeting of Shareholders and to facilitate the exercise of voting right
Supplementary remarks
Early delivery of notice
We will strive to deliver a notice of convocation of General Meeting of Shareholders atof convocation of thean early stage by expediting the settlement of the financial statements.
General Meeting of
Shareholders
Avoidance of a
We will strive to avoid a concentration date when setting the date of General Meeting
concentration date when of Shareholders.
setting the date of theGeneral Meeting of
Shareholders
Exercise of voting
Starting from the Annual General Meeting of Shareholders to be held on March 30,
rights by
2021, voting rights can be exercised by electronic means (via the Internet or otherelectromagnetic means
means).
Participation in theStarting from the Annual General Meeting of Shareholders to be held on March 30,
platform for the2021, the Company will participate in the platform for the electronic exercise of voting
electronic exercise ofrights for institutional investors, a system operated by ICJ, Inc.
voting rights and otherefforts to improve theexercising of voting
right for institutional
investors
Provision of notice of
An English translation of the notice of convocation is shown on the Company’s
convocation (summary) website.
in English
Other–
2. State of investor relations activities
Supplementary remarks
Create and release a
disclosure policy
Hold briefing meetings
for retail investors
periodically
Hold briefing meetings
for analysts andinstitutional investors
periodically
Hold briefing meetings
for foreign investors
periodicallyShow investor relations
data on the website
Establish an investor
relations business unit
(IR officers)
OthersThe Company’s website shows its disclosure policy in the form of
an investor relations (IR) policy.
The Company will consider holding a large briefing meeting forretail investors on a collective basis from now on.

Whether or notbriefed on byrepresentative

None

The Company will continue to hold results briefings twice eachyear after releasing its financial results as well as telephone
conferences as required.

Yes (planned)

The Company works to have dialogue with foreign investors
continually such as having one-on-one meetings with them attheir request after releasing financial results, just as with domestic
institutional investors.
The Company’s website shows electronic public notices, financial
results public notices, financial results reports, Securities Reports
and convocation notices.
The Corporate Planning Department serves as the investor
relations business unit.

Yes (planned)–

11Corporate GovernanceNishimoto Co., Ltd.

3. State of efforts to respect the standpoints of stakeholders
Provisions in internal
rules on respecting thestandpoints ofstakeholders

Implement environment
preservation activities
and corporate social
responsibility activities

Devise a policy on
information provision to
stakeholders

OthersSupplementary remarks
The basic philosophy of the Group is to have a corporate culture that respects a global
point of view, a frontier spirit and liberal values. We will continue to develop thisfounding spirit and aim to become a more complete non-nation (multi-national) andnon-nationality (multi-nationality) company. On the other hand, we intend to conduct
operations from a long-term perspective without pursuing short-term gains and to meetstakeholders’ expectations while stabilizing and improving employees’ standards ofliving, which is the basis for our corporate existence. The Company established the
Ethics Rules as the code of conduct that must be observed by all of the Group’s
directors, executive officers and corporate & supervisory committee members, as wellas the Company’s employees.
Currently, the business environment surrounding the Company is undergoing asignificant change. Social structure is engulfed by big change, as evidenced by thearrival of an aging population in developed countries and concerns over a sustainable
health insurance system. Prompted by the spreading COVID-19, the relation between
food and medicine attracted much attention with consumers becoming more oriented
toward health and frugality. In response to the change in the environment and social
structure, we expanded our business domains to include healthcare by maximallyleveraging our strengths as a player that has led global supply chain efforts. We regard
it as our corporate social responsibility to meet various food needs as a food company,
thus helping improve many people’s quality of life. In this respect, we will develop,
produce and market differentiated products (medical foods).
We will disclose information pursuant to the Financial Instruments and Exchange Act
and the rules on timely disclosure of the financial instrument exchanges on which theCompany is listed. We will strive to disclose promptly, accurately and fairly suchinformation that is deemed required to be disclosed to respect the standpoints ofstakeholders, such as customers and local communities.
We consider the health of our employees as one of our important management
resources. Therefore, we issued a Health and Productivity Management Statement
under which we aim to become a company that contributes to a prosperous and healthysociety by actively supporting health-related promotional activities to maintain thehealth of our employees and by pursuing endeavors to promote health organizationally.
The statement is posted on the Company’s official website:
https://www.wismettac.com/ja/index.html

IV. Matters for the internal-controls system
1. Basic concept of the internal-controls system and the state of its development
The following describes the platform for securing the appropriateness of operations (the internal-controls system)that was resolved-on by the Company’s Board of Directors.
The Company intends to act in good faith for its business partners, investors and all other parties involved with theGroup and to fulfill its social responsibilities and corporate mission through complying with the laws andregulations and the Articles of Incorporation. This will be made possible by developing, as described below, aplatform for securing the appropriateness of operations pursuant to the Companies Act and the Enforcement
Regulations for the Companies Act.
1.

Platform to ensure that the execution of duties by all of the directors, executive officers and employees of theCompany, and the subsidiaries of it, conforms to the laws and regulations and the Articles of Incorporation.
Directors shall comply with the laws and regulations and the Articles of Incorporation in order to secure
the lawfulness of their operations, the reliability of the organization’s financial statements, andcompliance. Moreover, directors shall define their own roles and responsibilities under the relevant
rules, such as the Board of Directors Rules, the Audit & Supervisory Committee Rules, the Segregationof Duties Rules and the Job Authority Rules. Directors and employees shall ensure that they obey therelevant rules on a company-wide, business-unit and group-company basis.

If any of the directors or employees discover a violation of a law or regulation, the Articles ofIncorporation or the relevant rules, said person shall immediately report the violation to the Audit &Supervisory Committee and the Board of Directors, thereby strengthening the organization’s complianceplatform.

The Group Governance & Business Ethics Department shall strive to discover or prevent fraud andimprove processes by auditing the operational processes of individual business units.

12

Corporate GovernanceNishimoto Co., Ltd.

2.

Platform for the storage and control of information on the execution of duties by the Company’s directors
Information on significant decision-making or reports by directors shall be controlled appropriately
pursuant to the internal rules (the Document Control Rules), and directors and Audit & Supervisory
Committee members shall be allowed to view the documents.

3.

Rules on controlling the risk of loss for the Company and subsidiaries of it and other relevant platforms

Directors of the Company or subsidiaries of it shall develop an appropriate risk control platform byrecognizing the importance of assessing, distinguishing and monitoring various risks for businessexecution at the business units under their control.

If any risk seriously affecting the Group’s business occurs, or is predicted to occur, the director involved
shall immediately report the case to the representative directors, who shall in turn develop a platform forpreventing the damage from spreading and minimizing the damage by establishing a risk
countermeasures headquarters chaired by representative directors, as required, and consulting withexternal advisors, including legal advisors.

4.

Platform to ensure duties are executed efficiently by the directors of the Company or subsidiaries of it
The Board of Directors shall determine the roles and business units assigned to individual directors anddefine their business-execution duties.

The Board of Directors shall determine the business execution policy, as well as matters stipulated in thelaws and regulations and other significant matters for business administration, and shall supervise thestate of execution of operations.

The directors in charge shall supervise the state of execution of operations under their control, and thestate of implementation by individual business units shall be assessed at a meeting attended by eachbusiness unit manager.

5.

Platform for reporting matters on the execution of duties by the directors or their equivalents at subsidiaries of
the Company
We shall create a platform on which to secure governance by controlling, supervising and guiding thesubsidiaries of the Company pursuant to the Related Companies Control Rules.

For any significant matter for a subsidiary of the Company, application for ringi approval shall be filed
through the Corporate Planning Department of the Company, thereby securing the appropriateness ofoperations.

6.

Matters on directors and employees whose role is to assist the Audit & Supervisory Committee duties

The Company does not appoint any director or employee whose role is to assist the Audit & Supervisory
Committee duties because we judge that, due to one member of the Audit & Supervisory Committee being
full time, he/she will be able to carry out appropriate information delivery, sufficient information collection
and close collaboration with accounting auditors and the Group Governance & Business Ethics
Department. However, we secure a platform to assist the execution of the Audit & Supervisory Committee
duties by appointing the necessary employees if so requested by the Audit & Supervisory Committee.

7.

Matters on the independence of directors and employees whose role is to assist the Audit & Supervisory
Committee duties from other directors of the Company (excluding directors concurrently serving as Audit &Supervisory Committee members) and matters on the securing the effectiveness of the instructions of the
Audit & Supervisory Committee to such directors and employees
If the Audit & Supervisory Committee appoints an employee whose role is to assist its duties, theemployee shall solely obey the instructions of the Audit & Supervisory Committee concerning said
duties as an assistant to the Audit & Supervisory Committee. The approval of the Audit & Supervisory
Committee shall be obtained for transferring, evaluating or penalizing the employee.

8.

Platform on which reports are submitted to the Audit & Supervisory Committee from any of the directors of
the Company (excluding directors concurrently serving as Audit & Supervisory Committee members), theemployees of it, the directors, the Audit & Supervisory Committee members or employees of subsidiaries of
the Company or any entity provided with a report from any of such parties and on which to prevent any
reporter set forth in the preceding item from being treated disadvantageously on account of having submitted areport
If they discover any fact that is feared will seriously damage the Company, any of its directors(excluding directors serving concurrently as Audit & Supervisory Committee members) or employees
shall immediately report the fact to the Audit & Supervisory Committee.

The Audit & Supervisory Committee may demand reports from directors (excluding directors serving
concurrently as Audit & Supervisory Committee members) or employees.

The Company shall completely refrain from treating any reporter disadvantageously on account of
having submitted a report to the Audit & Supervisory Committee.

13Corporate GovernanceNishimoto Co., Ltd.

9.

Matters on the policy to treat the advance payment of expenses to be incurred for the Audit & Supervisory
Committee member’s execution of duties or liabilities

If an Audit & Supervisory Committee member claims an advance payment or payment of expenses
incurred or to be incurred when executing his/her duties (limited to expenses for the execution of Audit& Supervisory Committee duties), the claim shall be addressed promptly.

10. Platform to ensure that audits by the Company’s Audit & Supervisory Committee are conducted effectively

The Audit & Supervisory Committee shall meet with the President & COO, directors (excluding
directors serving concurrently as Audit & Supervisory Committee members), accounting auditors andthe Group Governance & Business Ethics Department from time to time to exchange opinions.

2. Basic concept for the exclusion of organized crime groups and the state of its development
Basic concept for the exclusion of organized crime groups
As socially responsible enterprises, the Company and its subsidiaries and affiliates (collectively “the Company”)
have in place and observe, as described below, the Basic Policy Against Organized Crime Groups in order toprevent damage from organized crime groups that threaten the order and security of local communities and hamper
the development of a sound economy and society.
1.
The Company shall remain free of any transactional and other relationships with organized crime groups
and reject any unfair demand from an organized crime group.
2.
The Group shall deal with an unfair demand from an organized crime group on an organization-wide basis
while securing the safety of directors and employees who deal with the demand.
3.
The Company shall take legal measures from a civil and criminal perspective against an unfair demand
from an organized crime group.
4.
The Company shall establish a close relationship of cooperation with external specialized entities such as
the police, violence prevention promotion centers and lawyers to prepare to deal with an unfair demand
from an organized crime group.
5.
The Company shall never enter into a hidden transaction with an organized crime group or provide money
to it, for whatever reason.
State of development for the exclusion of organized crime groups
In accordance with the Organized Crime Group Handling Rules, which stipulate the basic matters for the exclusionof organized crime group, the General Affairs Department is specified as the business unit in charge that shallgather and control information on organized crime groups, develop the internal platform, and implement training
programs in collaboration with the relevant agencies such as police and legal advisors, thereby avoiding various
types of risk for the Company’s business activities.
The Company established, as ancillary rules to the Organized Crime Group Handling Rules, the Organized Crime
Group Handling Details Rules and the Organized Crime Group Examination Manual, which each stipulate how todeal with organized crime groups and the methods of investigating them, and the Company is working to more
effectively exclude organized crime groups.

V. Others
1. Whether any acquisition prevention measure has been introduced
Introduction of an acquisition prevention measureNone
2. Matters on the corporate governance platform–

14

Corporate GovernanceNishimoto Co., Ltd.

Schematic diagram (reference data)
General Meeting of Shareholders
Elect and dismiss

ReportElect and dismiss

Audit and
Director (excluding
supervise
directors serving as Audit& Supervisory Committee
members)

Audit & Supervisory
Committee

Collaborate

Accounting
auditorRecommend

Audit &
Supervisory
Committee

Board of Directors
Elect
Dismiss
Supervise

Elect and dismiss

ReportCollaborate

Collaborate

InstructGroup Governance & Business
Ethics Department

Representative Director
ReportInstruct

ReportInternal audit function

Accounting
audit

Executive Officers meeting
Internal audit Internal control
AssessInstructSupervise

ReportIndividual executive business units and Group companies

Outline of the timely disclosure platform (schematic diagram)

Timely disclosure platform for decision making
InsideAudit & Supervisory
Committee

Board of Directors
CheckGroup Governance &Business Ethics Department

AdviseOutsideAccounting auditors
Legal advisors

Information handling manager
Finance Department
System automatic collaboration

Stock exchange

The Company’s website

Investors

15

Corporate GovernanceNishimoto Co., Ltd.

Timely disclosure platform for materialized events
Executive business unit
Corporate Planning Department
Information handling manager
Board of Directors

InsideAudit & Supervisory
Committee

Representative Director

Check

Group Governance &Business Ethics Department

AdviseOutsideAccounting auditors
Legal advisors

Information handling manager
Finance Department
System automatic collaboration

Stock exchange

The Company’s website

Investors
Timely disclosure platform for financial-results information
Accounting data
InsideAudit & Supervisory
Committee

Finance Department
Check

Group Governance &Business Ethics Department

AdviseOutsideAccounting auditors
Legal advisors

Information handling manager
Board of Directors
Information handling manager
Finance Department
System automatic collaboration

Stock exchange

The Company’s website

Investors
end of document16