English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Corporate Governance Report
Sansan, Inc.
Latest Revision:

June 19, 2019

Company:

Sansan, Inc.

Representative:

Chikahiro Terada
Chief Executive Officer

TSE Code:4443

Contact:

Business Management Division+81-3-6419-3131

The corporate governance of Sansan, Inc. (the “Company”) is described below.

Ⅰ Basic Views on Corporate Governance, Capital Structure, Corporate Profile, and Other
Basic Information
1.Basic Approach
The Company’s mission is “turning encounters into innovation.” Centered on business cards, which
are proof of an encounter, the Company rediscovers the possibility of encounters and provides aninnovative service to the very nature of business and encounters. Through this service, theCompany will maximize sustainable corporate value and contribute to society while recognizing theimportance of gaining the continued trust of all stakeholders.
Based on this recognition, the Company will secure the transparency of management
decision-making and the supervision of business execution by having an Audit and Supervisory
Committee. At the same time, the Company will establish an internal control system based on the
Basic Policy on Internal Control Systems determined by the Board of Directors and ensure its
thorough operation while striving to maintain and strengthen corporate governance.
[Reasons for not Implementing Principles of the Corporate Governance Code]
The Company implements all principles of the Corporate Governance Code.
2. Capital Structure
Foreign Shareholding Ratio

From 10% to less than 20%

1

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

[Status of Major Shareholders]Name or Designation

Number of Shares

Shareholding

Held (Shares)

Ratio (%)

Chikahiro Terada

10,920,000

37.10

DCM Ventures China Fund (DCM VII), L.P.

2,030,000

6.90

INCJ, Ltd.

1,740,000

5.91

SMBC Trust Bank , Ltd. (Designated Nonmonetary Trust Account No. 12100440)

1,710,000

5.81

Sansan’s Employee Stock Ownership

1,470,000

4.99

GS Growth Investment GK

1,300,000

4.42

A-Fund, L.P.

1,280,000

4.35

Kei Tomioka

1,050,000

3.57

Nissay Capital Co., Ltd. No. 5 Investment Limited Partnership

900,000

3.06

EEI Cleantech Limited Partnership by Environmental Energy Investment

690,000

2.34

Controlling shareholders (excluding parent-

company)
Existence of parent company

None■Supplementary information
3. Corporate Attributes
Stock Exchange Listings and Market

Tokyo Stock Exchange, Mothers

Classification
Fiscal Year-End

May

Category of BusinessInformation, Telecommunications

Number of Employees (consolidated) as

From 100 to less than 500of the end of the previous fiscal year
Sales (consolidated) as of the end of theLess than ¥10 billion

previous fiscal year
Number of consolidated subsidiaries as

Less than 10 companiesof the end of the previous fiscal year

4.Guidelines for measures to protect minority shareholders when conducting transactions
with controlling shareholders
5.Other special circumstances that may have a material impact on corporate governance2

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Not applicable

Ⅱ Management Framework regarding Management-Related Decision-Making, Execution
and Supervision, and Other Corporate Governance Matters
1.Matters regarding organizational structure and operations, etc.
Organization Form

Company with Audit and Supervisory Committee[Directors]
Number of Directors Stipulated in the13

Articles of Incorporation
Term of Office of Directors Stipulated in

1 yearthe Articles of Incorporation
Chairman of the Board of Directors

Chief Executive Officer (CEO)

Number of Directors

9Election of Outside Directors

ElectedNumber of Outside Directors

4

Number of Outside Directors Designated1

as Independent Officers■Outside Directors’ Relationship with the Company (1)Name

Relationship with the Company (*)

Attributea

Yasuko Yokosawa

Attorney

Yoshiki Ishikawa

Academic

Osuke Honda

From another company

Toru Akaura

From another company

b

c

d

* Selection criteria regarding relationship with the Company○: shows the item is/was applicable to the outside director either currently or until recently△: shows the item was applicable to the outside director in the past●: shows the item is/was applicable to a close relative of the outside director either currently or
until recently▲: shows the item was applicable to a close relative of the outside director in the pasta. Executive of the Company or its subsidiaries

3

e

f

g

◯

h

i

j

K

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

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 listed company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property from theCompany besides compensation as a director/Audit and Supervisory

Committee member

g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (the Audit andSupervisory Committee Member himself/herself only)
i. Executive of a company, between which and the Company outside directors/Audit and Supervisory Committee member 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■Relationship with the Company (2)Name

YasukoMembership

Designation

Supplementaryof Audit andas

Information on

Supervisory

Independent

Applicable

Committee

Director

Items

◯

◯

Yokosawa

Reasons for Appointment

TMI

Ms Yokosawa possesses specialist

Associates

knowledge as an attorney withCounselregard to areas such as corporate
legal affairs and compliance. The
Company has appointed her as an
Outside Director in the anticipationthat she will present opinions from alegal perspective. In addition, there
is no special relationship between
Ms. Yokosawa and the Company
and she is unlikely to have conflictsofinterest

shareholders.

withgeneralTherefore,

theCompany has nominated her as an
Independent Director.

Yoshiki Ishikawa◯－

Mr. Ishikawa possesses a wealth of
specialist knowledge as a Doctor of4English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Medicine and a data scientist in thedata

analysis

andutilization

domain. He is appointed as an
Outside Director in the anticipation
that

he

will

offer

adviceandsuggestions from his perspective asabusiness

person,cultivatedthrough his professional experiencein founding his own company and inbeing

involvedincompany

management.

Osuke Honda◯

DCM Ventures

As a general partner of DCM

GeneralVentures, Mr. Honda possesses

Partnerdiverse professional experience intheventuretogethercapitalwithabusiness
wealthofexperience as a director of othercompanies
broad

and

insights

hascultivatedthroughtheseexperiences. He is appointed as an
Outside Director in the anticipation
that

he

will

offer

adviceandsuggestions with regard to all areasof management.

Toru Akaura◯

Incubate FundAs a general partner at Incubate

GeneralFund, Mr. Akaura possesses many

Partneryears of professional experience intheventuretogethercapitalwithabusiness
wealthofexperience as a director of othercompanies
broad

and

insights

hascultivatedthroughtheseexperiences. He is appointed as an
Outside Director in the anticipation
that

he

will

offer

adviceandsuggestions with regard to all areasof management.

5English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

[Audit and Supervisory Committee]■The Committee’s Composition and Attributes of Its Chairperson

All Committee

Full-time

InsideOutsideMembers

Members

Directors

Directors

Audit and Supervisory

4

0

0

Committee

Chairperson

4OutsideDirector

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

Appointed

Committee■Matters Related to the Independence of Such Directors and/or Staff from Executive Directors
If an employee is assigned to assist the duties of the Audit and Supervisory Committee, that employee
shall be able to assist the duties of the Audit and Supervisory Committee independently, without being
subject to the chain of command of a director who is not an Audit and Supervisory Committee member.
The evaluation and assignment of the employee shall be determined after discussion with the Audit
and Supervisory Committee.
■Cooperation among the Audit and Supervisory Committee, Accounting Auditors and Internal
Auditing Department
Furthermore, Audit and Supervisory Committee members and the Internal Auditing Department
promote the sharing of information through their attendance at audit reviews that are held regularly by
the Accounting Auditor. At the same time, by continually exchanging opinions on the presence ofaudit-related problems and issues going forward, the Company promotes the establishment of internal
controls essential for its sound management and continued development, as well as the evaluationand verification of the operation status and effectiveness thereof.
[Voluntary Establishment of Nomination/Remuneration Committee]
Voluntary Establishment of Committee(s)NoneCorresponding to Nomination Committee orRemuneration Committee[Independent Directors]
Number of Independent Directors

1
6English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

■Matters Related to Independent Directors
Based on the independence standards for independent officers stipulated by the Tokyo Stock
Exchange, the Company has designated Ms Yokosawa as an Independent Director because she nobusiness relations at all with the Company and contributes to governance from the perspective of alegal expert.
[Incentives]
Implementation of Measures to Provide

Introduction of a stock-option system

Incentives to Directors■Supplementary Explanation
In addition to a stock-option system, which was introduced with the aim of further enhancing director
motivation and enthusiasm toward improving the Company’s business performance, the Company
has introduced the Stock Acquisition Rights Trust, which aims to provide an incentive to current andfuture Group directors to improve corporate value over the medium to long term.
The Stock Acquisition Rights Trust involves the distribution to the Group’s directors and employees,
based on future results, of the stock acquisition rights allotted to Mr. Takanori Kushida, a tax
accountant. This plan differs from existing incentive plans that use stock acquisition rights as it makes
it possible to determine the size of the distribution of such rights to the Group’s directors andemployees at some future point, based on future performance evaluation, thus making it possible tobetter reward the efforts of individuals while at the same time enabling the distribution of stockacquisition rights to future directors and employees of the Group according to the same standard,
without excessive differences stemming from timing of participation in the plan.

Recipients of Stock Options

Directors, Outside Directors, Employees, Directors oftheParentCompany,

Subsidiaries’

Subsidiaries Employees, Others■Supplementary Explanation[Director Remuneration]
Disclosure of Individual Director’s

No Individual Disclosure

Remuneration■Supplementary Explanation
7

Directors,

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Since no director is paid in excess of a total of ¥100 million in remuneration etc., individual
remuneration amounts are not shown. Furthermore, the total amount of directors’ remuneration isdisclosed separately in the Annual Securities Report.

Policy on Determining Remuneration

Established

Amounts and Calculation Methods■Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
Concerning the remuneration for Directors, excluding members of the Audit and Supervisory
Committee, the total annual amount of remuneration paid to Directors shall not exceed ¥300 million,
as resolved at the General Meeting of Shareholders. The amounts paid to each director shall be
determined by a Representative Director who has received authorization from the Board of Directors,
after comprehensively taking into account business performance and other factors in each director’sbusiness division. In addition, remuneration for Directors who are members of the Audit andSupervisory Committee shall not exceed the total annual remuneration amount of ¥50 million, witheach such director’s remuneration being decided following discussions by the Audit and Supervisory
Committee.
[Supporting System for Outside Directors and/or Corporate Auditors]
When a meeting of the Board of Directors is held, the Business Management Division is in charge of
conveying information to Directors who are members of the Audit and Supervisory Committee, suchas by distributing materials in advance and providing explanations.
2. Matters on Functions such as Business Execution, Auditing, Oversight, Nomination andRemuneration Decisions (Overview of Current Corporate Governance System)
An overview of the Company’s corporate governance structure is described below.
Board of Directors
The Board of Directors consists of 9 directors, including 4 directors who are members of the Audit
and Supervisory Committee. All directors who are members of the Audit and Supervisory
Committee are Outside Directors. The Company has invited as Outside Directors persons such as
those with experience as a director at other companies and legal experts with a detailed knowledgeof corporate legal affairs and compliance in order to promote the establishment of a system thatenables the Company to conduct management decision-making from a broader perspective and tosupervise management from outside the Company, while utilizing their insights on corporate
management based on their wealth of business experience. In order to conduct effective andprompt decision-making, the Board of Directors holds a regular Board of Directors meeting once amonth in principle, as well as holding extraordinary meetings as needed.
8English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

The Board of Directors functions both as a body for supervising the operations of directors and abody for making decisions on important management matters, in compliance with the Articles ofIncorporation and laws and regulations.
Audit and Supervisory Committee
The Company’s Audit and Supervisory Committee comprises four directors who are members of
the Audit and Supervisory Committee. All Committee members are Outside Directors. Directors who
are members of the Audit and Supervisory Committee include attorneys or persons who possess an
independent perspective on corporate management. Thus the Company has established a structurein which management supervision is conducted from the standpoint of each Committee member’s
professional ethics.
Directors who are members of the Audit and Supervisory Committee express opinions on directors’
execution of business at meetings of the Board of Directors and other meetings.
The Audit and Supervisory Committee monitors the vision of governance and its operational
status. In order to audit and supervise the everyday activities of the directors, including thedirectors’ performance of duties, the Audit and Supervisory Committee implements audits basedon the audit plan and holds meetings of the Audit and Supervisory Committee once a month whileconvening meetings with the Internal Auditing Department and Accounting Auditors, and sharing
information necessary for auditing.
Status of Internal Audits, Audit and Supervisory Committee Members’ Audits, and Financial Audits
Internal Audits.
1 person belonging to the Internal Auditing Department and 4 internal auditors appointed by thehead of the Internal Auditing Department are in charge of the Company’s internal auditing. The
objective of internal auditing is to examine and evaluate the effectiveness of internal controls
established and operated at the Company, and to point out matters that require improvement andoffer advice toward making improvement in order to contribute to achievement of the Company’s
management targets and stable business operations. The Internal Auditing Department makes aninternal audit plan each fiscal year, implements internal auditing after receiving the approval of theCEO, and reports results of auditing to Representative Directors and the division that was subject toauditing while pointing out matters to the said department in order to realize improvements, andchecking the status of improvements. Internal auditing is carried out by 1 member of the Internal
Auditing Department and other persons nominated by the Internal Auditing Department.
The Internal Auditing Department cooperates with the Audit and Supervisory Committee and sharesinformation necessary for auditing.
Audit and Supervisory Committee Members’ Audits
The Company’s Audit and Supervisory Committee consists of four members, all of whom are9English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

outside directors. In order to implement audits that use internal control systems, the Audit andSupervisory Committee checks whether the Company’s internal control systems are being
established and operated appropriately and establishes a system for receiving regular reports on
the comprehensive implementation status of audits from the Internal Auditing Department. These
activities are based on the Audit and Supervisory Committee’s Audit Plan, formulated each fiscal
year. At the same time, information is shared at the meeting of the Audit and Supervisory
Committee, held once a month in principle. In addition, Audit and Supervisory Committee holds
regular meeting with the Financial Auditor and conducts the sharing of information and exchanging
of opinions.
Furthermore, Ms. Yasuko Yokosawa, an Outside Directors who is a member of the Audit andSupervisory Committee, is a qualified attorney and she offers recommendations and advice on the
Company’s legal affairs from her standpoint as an expert.
The Company has concluded an auditing contract with KPMG AZSA LLC. There is no relationshipof special interest between the Company and this auditor or its employees who conduct audits. The
names of the certified public accountants who executed the audit and the composition of theassistants involved in the audit work are stated below.
1. Names of the certified public accountants who execute the audit:
Atsuki Kanezuka, Designated limited liability partner and executive partner
Tomomichi Sakai, Designated limited liability partner and executive partner
2. Composition of assistants involved in the audit work:
4 certified public accountants
1 other individual
3. Reasons for adopting the current corporate governance structure
From the perspective of further strengthening the auditing and oversight functions of the Board of
Directors through the further enhancement of corporate governance, the Company transitioned
from being a company with a Board of Auditors to a company with Audit and Supervisory Committee
on August 18, 2015. The Company made this transition in order to leverage the functions of Outside
Directors, who do not personally execute business operations. Members of the Audit andSupervisory Committee, who possess auditing authority and voting rights at meetings of the Boardof Directors appropriately oversee the Directors’ execution of business in terms of both legality andvalidity. With this transition to a company with Audit and Supervisory Committee, the Company
believes it will enhance the fairness, transparency, and effectiveness of management.

10English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Ⅲ Implementation of Measures for Shareholders and Other Stakeholders
1.Efforts to ensure that the General Shareholder Meeting is active and well-facilitated and thatvoting rights are exercised smoothly

Supplementary Explanations
Early Notification of General

The Company will make efforts to mail the convocation notice well in

Shareholder Meeting
Scheduling
Shareholder

advance.

GeneralMeetingto

Avoid Peak Days

The Company has scheduled its General Shareholder Meeting forAugust, when the general shareholder meetings of othercompanies are not expected to be intensively held. The Company
will avoid scheduling its General Shareholder Meeting on peakdays so that as many shareholders as possible can attend.

Allowing Electronic Exercise

We believe this is a matter that should be considered going forward.

of Voting Rights

Participating

in

the

We believe this is a matter that should be considered going forward.

Electronic Voting Platform
and

Other

Encourage

Efforts

toInstitutional

Investors to Exercise their
Voting Rights
ProvidingConvocation

We believe this is a matter that should be considered going forward.

Notice in English

2. IR Activities
Explanation by
Supplementary Explanations

Preparation and Publication of

At present, the Company has neither

Disclosure Policy

prepared nor published a Disclosure Policy.
However, the Company is striving to provide
information to shareholders and investors
based on transparency, fairness andcontinuity and plans to make it available on
its website going forward.

11

RepresentativeEnglish Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Regular Investor Briefings for

The Company will hold briefings for individual

Individual Investors

investors and is considering providing

Yes

explanations on business results,
management policy, and other matters.
Regular Investor Briefings for

The Company will hold briefings for analysts

Analysts and Institutional

and institutional investors and is considering

Investors

providing explanations on business results,Yesmanagement policy, and other matters.
Regular Investor Briefings for

The Company is considering regular visits toOverseas Investors

Yes

provide briefings to overseas institutional
investors in the Americas, Asia, andelsewhere.

Posting of IR Materials on the

The Company plans to post various IR

Websitematerials on its website, such as financial
briefings, timely disclosure materials,
securities reports, and quarterly financial
briefing

Establishment of Department in

Department in charge of IR:

Charge of IR

Business Management Division

3. Measures to Ensure Due Respect for Stakeholders
Supplementary Explanation
Establishment of Internal Rules

The Company recognizes the importance of releasing usefulfor Respecting the Position ofand accurate information to stakeholders and provides

Stakeholders

information via its website and other means.

Implementation of

Based on the concept of “starting now rather than in the future

Environmental Conservation

after the Company has grown,” the Company has launched a

Activities, CSR Activities, etc.

project called “NOW”, which addresses society-wide issues
through its core business. With “Scan for Trees”, the Company
is planting trees based on the number of business cards
changed into data at “Sansan”.

Development of Policies on

The Company plans to disclose information proactively to its

Information Provision to

stakeholders via its website, financial results briefings, andStakeholders

other means.

Others-12English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

IV Matters Related to the Internal Control System
1.Basic Views on the Internal Control System and the Progress of System Development
The Company strives to maintain and enhance corporate governance by the establishment andstrict operation of an internal control system based on the Basic Policy on Internal Control System,
which was determined by the Board of Directors.
a) System to ensure that the execution of duties by directors and employees complies with laws andregulations as well as the Articles of Incorporation (System for Strict Compliance with Laws andRegulations and the Articles of Incorporation).
1.Directors and employees carry out appropriate corporate activities based on high ethicalstandards and comply with laws and regulations and internal rules such as the Articles ofIncorporation in accordance with the Company’s corporate philosophy and code of conduct, “The
Katachi of Sansan.”
2. Implement internal audits by the Internal Auditing Department, an independent entity under the
direct supervision of the CEO, to verify if execution of business operations is being conductedbased on laws and regulations, the Articles of Incorporation, and internal and other rules while at
all times strive to make improvements when issues are discovered.
b) System for storage and management of information related to execution of duties by directors(Information Storage and Management System)
1. Store and manage documents, business forms, and records made in an electronic format
based on the Rules on Document Management, after classifying according to level ofconfidentiality.
2. Directors may access these documents and records at any time.
c) Rules and other systems for managing risk of loss (Risk Management System)
1.

Appropriately manage a host of potential risks in the Company’s business activities throughthe establishment of internal rules and a response system.
2.

Give utmost priority to the appropriate handling of personal information, appoint a person in

charge of personal information protection, and make efforts to minimize the risks associated withthe management of personal information by establishing internal rules centered on a set of basic
regulations for the protection of personal information.
3.

Reduce information security risks by appointing a Chief Information Officer with responsibility

and authority for information security risks and risk management and establishing rules on
management of information systems.
4.

Directors immediately report to the Audit and Supervisory Committee in the event of any kindof risk arising that may cause a major loss to the Company.
13

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

d) System to ensure that the duties of the directors are being carried out efficiently (System for
Securing Efficiency)
1.Hold regular meetings comprising directors once a month and convene extraordinary meetings
as needed in accordance with laws and regulations, the Articles of Incorporation, and the rules of
the Board of Directors in order to audit the status of business execution by discussing and making
decisions on important matters, and receiving reports from Executive Directors
2. Establish a suitable and efficient decision-making system through developing internal rules
such as the Board of Directors’ Rules, and clarifying areas of responsibility and authority.
e) System to ensure the properness of business operations of the corporate group composed of theCompany and its subsidiaries (Internal Control of Corporate Group)
1. Share the Company’s corporate philosophy and code of conduct, The Katachi of Sansan, withsubsidiaries and make it the guiding principle for Group-wide ethics in business operations andbusiness.
2. The Internal Auditing Department implements regular audits in order to verify if the business
operations of the Company and its subsidiaries are in compliance with laws and regulations, theArticles of Incorporation, internal rules, and other regulations.
f) Internal control system for financial reporting (System to ensure properness of financial reporting)
1.In order to secure the properness of financial reporting of the Company and its subsidiaries, theCompany develops and appropriately operates internal rules, including the Basic Policy on
Internal Controls Related to Financial Reporting, based on the Financial Instruments andExchange Law and other laws and regulations in Japan and overseas that apply to the Company
and its subsidiaries.
2. Develop and operate a monitoring system for financial reporting and establish a system fortimely and appropriate reporting when internal control system problems or defects are identified
through the monitoring system.
3. In terms of information infrastructure, make effective and efficient use of the internal control
system for financial reporting and respond appropriately with respect to General Control andApplication Control.
g) Matters related to the Office that assists the duties of the Audit and Supervisory Committee.
Matters related to the independence of members of that Office and matters on ensuring thepracticability of instructions to those members (Establishing an Office and Office member for the
Audit and Supervisory Committee),（Independence of the Office for the Audit and Supervisory
Committee）,（Ensuring practicability of instructions to the Office of the Audit and Supervisory
Committee）
14

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

1.

Establish an Office under the direct control of the Audit and Supervisory Committee anddesignate an Office member to assist the duties of the Committee’s members on a full-time basis.
2.

The supervisory authority over that Office member is to belong exclusively to the Audit andSupervisory Committee and the appointment, transfer, performance evaluation, disciplinarian
action, and other matters regarding the member require the approval of, and prior notification to,
the Audit and Supervisory Committee.
h) System for submitting reports to the Audit & Supervisory Committee, which includes the systemfor directors and employees to report to the Audit and Supervisory Committee
1.

Directors and employees shall promptly inform the Audit and Supervisory Committee of any

matter that may have a significant impact on the Company and the implementation status ofinternal audits as well as legal matters, and provide necessary reports and information in
response to requests from the Audit and Supervisory Committee.
2.

Formulate rules for a Whistle-Blower System and ensure the operation of an appropriate

reporting system based on the stipulations of the Whistle-Blower System. The Company shall nottreat any director or employee unfavorably on the basis of said director or employee using the
System to give a report to the Audit and Supervisory Committee.
i) Other: Systems for ensuring the effectiveness of audits by the Audit & Supervisory Committee(Systems for ensuring the effectiveness of audits by the Audit and Supervisory Committee)
1.

The CEO shall meet regularly with the Audit and Supervisory Committee and Accounting

Auditor to exchange of opinions and communicate effectively.
2.

The Audit and Supervisory Committee shall meet regularly with the Accounting Auditor,

cooperate with the Internal Auditing Department, and exchange information at all times.
3.

Payments of costs incurred in the process of executing the duties of the Audit andSupervisory Committee member shall be addressed upon a request for payment.
2.Basic Views on Eliminating Anti-Social Forces
a. Basic Views on Eliminating Anti-Social Forces
The Company shall conduct fair and responsible corporate activities by the formulation of its Basic
Policy on Eliminating Anti-Social Forces and its dissemination inside and outside the Company aswell as the securing and maintaining of a compliance system through the development andoperation of all internal rules.
b. Status of the Company’s preparedness for the elimination of antisocial forces(a) Status of the preparedness of internal rules
All executives and employees of the Company shall comply with the Basic Policy on Eliminating
Anti-Social Forces and other internal rules and establish a system to promote the elimination of15

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

such forces.
Additionally, by establishing Detailed Rules on Investigations into Anti-social Forces for SalesManagement and Detailed Rules on External Procurement Transactions as operational rules, theCompany has built a system for preventing transactions with anti-social forces.
(b) Special department with responsibility for countermeasures in relation to anti-social forces andperson responsible for the prevention unreasonable demands
The Company has established the following system for responding to antisocial forces.
1.Person with overall responsibility: Director in charge of Business Management Division
2.Division with overall responsibility: Business Management Division, Legal Affairs
3.Responding division: The department dealing with that business partner(c) Method for addressing the elimination of anti-social forces
ⅰ.New business partners, shareholders, and executives
As a general principle, the Company uses a private sector tool to ascertain whether or not new
business partners, shareholders, and executives have relationships with anti-social forces.
At the commencement of business, the Company inserts a wording in all contracts in which thepartner guarantees that they have no relationship with anti-social forces, and a contract
cancellation clause to be invoked in the event that the partner does have such relationship.
ⅱ．Existing business partners
Using a price sector investigative tool, the Company carries out checks on all existing business
partners to ascertain whether or not they have relationships with anti-social forces. In addition to
taking the usual precautions, the Company also implements investigations and checks to acertain extent.
ⅲ．The Company has a system for dissolving relationships with existing business partners if itcomes to light that they are anti-social forces or are suspected of being such forces.
(d) Status of cooperation with external specialist organizations
The Company continuously studies the importance of eliminating anti-social forces through external
lectures and seminars. Additionally, the Company has established cooperative ties with the police,
the Center for Removal of Criminal Organizations, and legal counsel.
(e) Status of efforts to gather and manage information related to anti-social forces
The Company consolidates information on anti-social forces with the responsible division, thereby
centralizing the gathering and management of information.
(f) Implementation status of training activities
On joining the Company, new employees submit a written pledge confirming that they have no16

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

relationships with anti-social forces and the Company explains the importance of eliminating
anti-social forces.

VOther Matters
1.Adoption of Anti-Takeover Measures
Adoption of anti-takeover measures

No■Supplementary Explanation
2.Other matters concerning corporate governance system, etc.
A flow chart describing the Company’s corporate governance and timely disclosure systems is
attached for reference.
[Chart 1]

Corporate Governance System

General Meeting of Shareholders
Appointment/
Dismissal

Appointment/
Dismissal
Auditing/
Supervision

Board of Directors
Directors

Reporting

Audit and Supervisory
Com mittee
Cooperation

Directors serving on the Audit andSupervisory Committee

Appointment/Dismissal/
Supervision

Cooperation

Direction

Cooperation

Internal Auditing
Department

Representative Director
Reporting
ReportingInternal auditing

Direction/Commands

Departments/Divisions

17

Supervision

Accounting Auditor(excl. directors servingon the Audit andSupervisory Committee)

Appointment/
Dismissal

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

[Chart 2]
Tokyo Stock Exchange

Timely Disclosure System

Kanto Local Finance Bureau
Corporate Lawyers
Auditing Corporation

Cooperation

Board ofDirectors

Person in Charge of Disclosure

Representative Director

Departments andSubsidiary Companies⑤ Discussion anddecision-making
Person in charge of
disclosure1) Confirm information
Deliberation

2) Review necessity to disclose
3) Present decision to Board of
Directors②Response andconfirmation

Provision ofimportantfacts/news④Reporting Person in charge of
information
management⑥Acknowledgement①Reporting③Generate documents

Decision todisclose

Decision todisclose⑦Instruction to disclose

Record disclosure of
docum ents
(via TDnet, etc.)⑧Record disclosure of documents(assign planned disclosure schedule)⑨Disclosure ofInformation⑩Automatically reflect
information disclosed on TDnet⑪Publish on
Com pany website(Updates fully automated)

18

Provision offinancial andperformancerelated
information