Corporate Governance Report

This corporate governance report has been prepared in line with the specifications of the Tokyo Stock Exchange.
The numbering of the principles and supplementary principles is based on Japan’s Corporate Governance Code.

Last update: July 7, 2022
SCREEN Holdings Co., Ltd.

Toshio Hiroe
President, Member of the Board andChief Executive Officer
Contact: Yoshiyuki Higuchi
Corporate Officer, General Manager,
Corporate Planning Dept.
Tel: ＋81-75-414-7642
Securities code: 7735
URL: https://www.screen.co.jp

Corporate governance at SCREEN Holdings Co., Ltd. (hereinafter “SCREEN Holdings” or the“Company”) and its consolidated subsidiaries (collectively, the Group or the SCREEN Group) is executedin accordance with the following:

I.

Basic Concepts regarding Corporate Governance, Capital Structure, Corporate Profile, andOther Fundamentals

1. Basic Concepts
By striving to improve corporate governance in pursuit of enhanced transparency, soundness, and efficiency
in business management, the SCREEN Group aims to ensure that shareholders and all other stakeholders
benefit in line with its Corporate Philosophy of “Sharing the Future,” “Human Resource Development,”
and “the Pursuit of Technology.” The Group recognizes that effective corporate governance is essential tothe achievement of this goal, thus it has strengthened its capabilities to govern through the establishment of
its “Management Grand Design,” which is SCREEN’s vision and guideline for SCREEN Valueenhancement; “SCREEN Group CSR Charter,” which describes the principles of action for all executives
and employees of the Group; and the “SCREEN Group Code of Management,” which regulates thecontrolling policies and systems of Group companies as well as other regulations with which all executives
and employees should comply.
Reasoning for Noncompliance with the Principles of the Corporate Governance Code
The Company has complied with all principles of the Corporate Governance Code which was published onJune 11, 2021.
Disclosure Based on the Principles of the Corporate Governance Code Update
Principle 1.4: Cross-Shareholdings
In order for the Company to enjoy sustainable corporate development, it is essential to maintain partnerships
with a broad range of external corporations. Because of this, the Company may retain cross-shareholdings
as long as said shareholdings are deemed strategically necessary in light of its pursuit of medium- to longterm improvements in corporate value. To assess the necessity of such shareholdings, the Board of Directors
engages in annual reviews aimed at comprehensively verifying the status of transactions with investees, theimpact of shareholdings on the Company’s financial position, the quantitative benefits of such shareholdingsvis-à-vis capital cost, and whether the purposes of shareholdings have been met. If verification results revealthat certain shareholdings are no longer necessary, the Company negotiates with the investees to ensure that－1－the shareholdings in question can be smoothly divested. As of the end of the most recent fiscal year, theCompany had divested shares of 33 investees, totaling ¥7.7 billion, over the seven years since the enactment
of Japan’s Corporate Governance Code.
In addition, the Company exercises voting rights associated with its shareholdings in a way that respects
the management policies of its investees while making voting judgments from the perspective of enhancing
its own corporate value over the medium to long term. It should be noted that if an investee is found to be
involved in major misconduct or has submitted a proposal that is deemed potentially detrimental toshareholder value, the Company will take a particularly cautious approach when making its voting judgment,
engaging in dialogue with the investee prior to voting as necessary.
Principle 1.7: Related Party Transactions
When a director intends to engage in a transaction deemed to be competing with any of the Company’sbusinesses or that may result in a conflict of interest (“Competition and Conflicting Interest Transactions”
as defined by law), the director is obliged to obtain the approval of the Board of Directors in accordancewith the Company’s Rules of the Board of Directors. Moreover, the Board will review reports on the content
and value of such transactions on a quarterly basis and grant approval on those transactions that are judged
legitimate. In addition, no current shareholder of SCREEN Holdings possesses a voting rights ratio of 10%
or greater. However, if a major shareholder were to surpass this ownership threshold, the Company would
ensure that any possible transaction with said shareholder be properly examined by the Board of Directors
based on the aforementioned procedure before being greenlit.
Supplementary Principle 2.4.1: Ensuring Company Diversity in Core Personnel Hiring(i) Ensuring diversity
Based on the philosophy of supporting the activities of diverse human resources set forth in the CSR Charter,
which is the Group's Code of Conduct, the Company actively recruits human resources with diverse
attributes including women, non-Japanese people, and mid-career hires, as well as trains and promotes
individuals to management positions based on their abilities, qualities, and aptitudes regardless of their
attributes. In addition, by continuously exchanging human resources between overseas Group companies
and the Company and its business operating and functional support companies, efforts are being made to
develop human resources with broad perspectives.
In addition, the Company is striving to create a comfortable working environment that allows all
employees to demonstrate their abilities regardless of gender despite changes resulting from various life
stages. The Company will continue to emphasize the diversity of its human resources in order to improve
the working environment and to ensure strong growth.
Promotion of Women to Management Positions
At the Company and its business operating and functional support companies, women are taking on a wide
range of positions, including as general managers, section managers, and subsidiary executives. In order toencourage their growth, the Company offers career development for promotion to management positions
according to their qualifications and aspirations, such as overseas assignments, dispatch to overseas MBA
programs, and appointment as company-wide project leaders.
By the fiscal year ending March 31, 2031, the Company aims to double the percentage of women in
management positions and increase the percentage amongst all employees to at least 15%, or to a level thatis appropriate for the changing business conditions. The Company is actively recruiting and training women,
and is working to create an environment that encourages them to play an active role, thereby increasing thenumber of women in core positions in decision making for the Group.
The number of women hired is on the rise, and the Company would like to expand the percentage of new
graduates hired from around 20% to even more in the future, taking into account the business situation.
Current
Ratio of women in management
positions
Percentage of women among all
employees

3.0%

Fiscal year ending March 31,
2031
Approximately 6%

10.0%

15% or higher－2－

Promotion of Non-Japanese to Management Positions
Within the Group, there are about 50 international employees in the Company and its business operating
and functional support companies, and five of them are active in management positions. In overseas
subsidiaries, more than half of the 44 full-time executive positions are currently held by locally hired foreign
nationals, and international employees account for 40% of the Group as a whole. In addition, the Company
continues to exchange human resources with overseas Group companies by appointing them to generalmanager or higher positions in the Company and its business operating and functional support companies.
Promotion of Mid-Career Hires to Management Positions
The Group actively recruits mid-career workers in line with changes in its core businesses and other factors,
and the number of such workers accounts for one third of the total number of employees in domestic Group
companies. In management positions, mid-career hires account for one-third of the total, and appointments
are made regardless of hiring attributes.
(ii) Human resource development policies, internal environment development, and other conditions toensure diversity
In order for each individual to maximize his or her abilities and enhance the performance of the Group, it is
crucial to provide opportunities for growth, a supportive environment, and promote diversification,
regardless of an individual’s attributes. The Company will continue to implement hiring from diverse
demographics, and while taking into account business conditions, strive to increase the number of diverse
employees, including mid-career hires, women, and non-Japanese, to more than 50% by the fiscal year ending
March 31, 2031.
Principle 2.6: Roles of Corporate Pension Funds as Asset Owners
The Company wishes to provide its employees with opportunities for stable asset formation via theadministration of corporate pension funds while staying vigilant to the impact of fund administration
performance on its consolidated financial position. Accordingly, the Company has put in place the Corporate
Pension Fund Administration Committee consisting of individuals equipped with experience andcompetencies in this field. In this way, the Company monitors its asset managers and ensures that its pension
funds are managed appropriately.
Principle 3.1: Full Disclosure(i) Company objectives (e.g., business principles), business strategies, and business plans
As presented earlier in “1. Basic Concepts.”(ii) Basic views and guidelines on corporate governance based on each of the principles of Japan’s Corporate
Governance CodeAs presented earlier in “1. Basic Concepts.”(iii) Board policies and procedures regarding the determination of remuneration for senior management anddirectors
The remuneration policy for directors is determined by a resolution of the Board of Directors held on
February 26, 2021. This is in response to the proposal of the Nomination and Compensation Advisory
Committee composed of outside directors (the majority) and the Chairman of the Board of Directors.
Compensation for corporate officers is decided by representative directors after seeking the advice of theNomination and Compensation Advisory Committee.
Compensation as an incentive for directors is determined on the basis of individual roles andresponsibilities in order to live up to the stakeholders’ expectations and enhance medium- to long-term
corporate value. Specifically, compensation for directors and corporate officers now consists of threeelements: (a) basic remuneration for fixed cash payment, (b) a short-term performance-linked cash bonus,
and (c) share compensation linked with the short- and medium- to long-term performance, and corporate
value (shareholders’ value). Outside directors’ compensation does not include performance-linked sharecompensation.
After seeking the advice of the Nomination and Compensation Advisory Committee, compensation foreach director is now determined by the representative directors under authorization from the Board of
Directors.
(iv) Board policies and procedures regarding the appointment/dismissal of senior management and the－3－nomination of director and corporate auditor candidates
Regarding the nomination of candidates for director and corporate auditor positions, candidates are selectedin accordance with prescribed criteria listed below and approved by the Board of Directors after seeking theadvice of the Nomination and Compensation Advisory Committee composed of outside directors (themajority) and the Chairman of the Board of Directors.
Criteria for Appointing Candidates for Directors
1. Candidates must be equipped with sufficient business experience and robust expertise in the area of their
specialty and be capable of living up to stakeholder expectations and contributing to medium- to long-term
growth in the SCREEN Group’s corporate value.
2. Candidates must be capable of making fair judgment based on a neutral viewpoint without sectional
partiality and be equipped with risk management abilities.
3. Candidates must be able to secure sufficient time and resources to appropriately fulfill their roles andresponsibilities as directors.
4. Candidates must be knowledgeable individuals with integrity and high moral bearing.
5. Candidates must not fulfill any of the conditions disqualifying directors under Article 331-1 of the JapaneseCorporate Law.
6. Candidates for outside director positions must fulfill SCREEN Holding’s “Criteria for Independence ofOutside Directors and Outside Corporate Auditors.”
7. Candidate selection must be undertaken with the intention of securing diversity in experience and specialty,
thereby maximizing the Board of Directors’ functional efficiency and effectiveness and maintaining abalanced composition that helps SCREEN Holdings exercise management oversight covering all business
units.
Criteria for Appointing Candidates for Corporate Auditors
1. Candidates must be equipped with abundant experience and capable of conducting audits from a neutral
and objective viewpoint without sectional partiality.
2. Candidates must be independent from those charged with business execution and well-positioned tomaintain fair and impartial standing.
3. Candidates must be able to secure sufficient time and resources to appropriately fulfill their roles andresponsibilities during their term of office.
4. Candidates must be knowledgeable individuals with integrity and high moral bearing.
5. Candidates must not fulfill any of the conditions disqualifying directors under Article 331-1 of Japan’sCompanies Act, which also apply to corporate auditors in accordance with Article 335-1 of said law.
6. Candidates for outside corporate auditor positions must fulfill SCREEN Holding’s “Criteria for
Independence of Outside Directors and Outside Corporate Auditors.”
7. Candidate selection must be undertaken with the intention of securing a balanced composition in terms
of knowledge, experience and specialties. In addition, at least one corporate auditor must be equipped withconsiderable expertise in finance and accounting.
Regarding the dismissal of directors, after seeking the advice of the Nomination and Compensation Advisory
Committee, the Board of Directors may propose dismissing an individual to whom one of the following
criteria apply. Approval of the dismissal is then required at a shareholders’ meeting based on the resolution
passed by the Board of Directors.
Criteria for Dismissing Directors
1. A director who obviously fails to fulfill “Criteria for Appointing Candidates for Directors”
2. A director who is or has been involved in conduct or a significant violation of laws, regulations,or in-house rules, including the Articles of Incorporation(v) Explanations with respect to the individual appointments/dismissals and nominations based on (iv)
The details of individual candidates for directors and corporate auditors appointed by the Board of Directors
are disclosed via the Company’s corporate website. Please refer to the latest notice of the General Meetingof Shareholders, which includes descriptions of such candidates and is posted on said website.
https://www.screen.co.jp/download_file/get_file/N_GM_220531_E.pdf
When the Company dismisses a director, it discloses the details of such dismissal via its corporate website.
－4－Supplementary Principle 3.1.3: Sustainability
The Company is committed to collaborating with a wide range of stakeholders, proactively disclosing
information, and improving transparency. For more information about the Company’s approach tosustainability and our efforts to enhance social values (Sustainable Value 2023), please refer to our official
website.
https://www.screen.co.jp/en/sustainability
In addition, the Company has collected and analyzed the necessary data and disclosed the information on
our website and other media about the impact of climate change-related risks and opportunities on ourbusiness activities and earnings in accordance with the TCFD framework. For more details, please refer tothe following link.
https://www.screen.co.jp/download_file/get_file/Climaterelated_information_disclosure_based_on_TCFD_recommendations_E.pdf
Supplementary Principle 4.1.1: The Scope of Matters Delegated to the Management
In addition to assuming its duties as defined by laws, the Articles of Incorporation, and the SCREEN Group
Responsibility and Authority Rules, the Board of Directors determines basic policies and strategies as wellas other important matters associated with the Group’s operations. Based on the aforementioned policies
and strategies, the Company’s business is executed by directors in charge of particular operations as well as
corporate officers, business operating companies, and functional support companies, while the Board of
Directors supervises the status of their business execution.
Supplementary Principle 4.1.3: The Succession Plan for President & CEO
In principle, the succession plan for securing an ideal successor to the position of President & CEO and thedefining criteria and procedures for appointing such an individual, are determined by the Board of Directors
after seeking advice from the Nomination and Compensation Advisory Committee composed of outside
directors (the majority) and the Chairman of the Board of Directors.
Supplementary Principle 4.3.3: Procedures for Dismissing President & CEO
In cases where the Company’s President & CEO meets prescribed criteria, the dismissal of such individualfrom his/her position will be determined by the Board of Directors after seeking advice from theNomination and Compensation Advisory Committee composed of outside directors (the majority) and the
Chairman of the Board of Directors.
Principle 4.8 Effective Use of Independent Directors
The Company appoints qualified and independent outside directors and corporate auditors according to its
Criteria for Independence of Outside Directors and Outside Corporate Auditors. It also maintains four
outside directors and ensures discussion based on their independent, objective opinions following theCompany’s Rules of the Board of Directors. The aforementioned rules also mandate that outside directors
account for at least one third of the entire membership of the Board. Four outside directors were appointed
at the 81th Ordinary General Meeting of Shareholders which was held on June 24, 2022. That ensures abalanced perspective that allows the Board of Directors to operate with maximum efficiency andeffectiveness, while keeping management oversight over the entire Group securely in place. Of the eight
directors elected at the 81th General Meeting of Shareholders held on June 24, 2022, four are outside
directors, which enables Board of Directors’ discussions based on independent and objective opinions.
Principle 4.9 Independence Standards and Qualifications for Independent Directors
The Company has in place its Criteria for Independence of Outside Directors and Outside Corporate
Auditors that clarify its standards for securing the independence of outside directors and outside corporate
auditors from management. Currently, four outside directors engage in Board of Directors meetings, freely
bringing their insights backed by extensive knowledge and experience in such fields as corporate managementfrom a fair and neutral standpoint. These individuals contribute to active and constructive discussions at theBoard, thereby fulfilling their roles and responsibilities as outside directors who are independent frommanagement.
Supplementary Principle 4.10.1: Appropriate Involvement and Advice from Outside Directors
through the Establishment of an Independent Nominating and Compensation Advisory Committee－5－The Company has established the Nominating and Compensation Advisory Committee, consisting ofoutside directors (the majority) and the chairman of the Board of Directors, to strengthen the independence,
objectivity, and accountability of the Board of Directors’ functions related to nomination (including
succession planning) and compensation.
The Committee deliberates and reports on the election of candidates for directors, corporate auditors, andcorporate officers, as well as the compensation, etc. (basic compensation, performance-based compensation,and performance-linked stock-based compensation) for directors and corporate officers.
Supplementary Principle 4.11.1: Appointment of Directors
The Company’s Rules of the Board of Directors include provisions aimed at maintaining an optimal numberof directors in light of changes in the operating environment and the nature of duties to be assumed byindividual directors. To this end, these provisions mandate that the “number of directors must not exceed
13 and at least one third of its membership must be accounted for by outside directors.” These provisions
are intended to secure “diversity in terms of director experience and their areas of specialty” and help
maintain “a balanced perspective that allows the Board of Directors to operate with maximum efficiency andeffectiveness while keeping management oversight over the entire Group securely in place.”
Regarding the nomination of candidates for director positions, candidates are selected in accordance with
SCREEN Holding’s “Criteria for Appointing Candidates for Directors” and approved by the Board of
Directors after seeking the advice of the Nomination and Compensation Advisory Committee composed ofoutside directors (the majority) and the Chairman of the Board of Directors.
Supplementary Principle 4.11.2: Status of Concurrent Positions Held by Outside Directors
The Company discloses the status of important concurrent positions held by its directors and corporate
auditors via such media as the notice of General Meeting of Shareholders and securities reports.
Supplementary Principle 4.11.3: Evaluation of the Board’s Effectiveness
The Company undertakes an annual evaluation of the Board of Directors in terms of its effectiveness anddiscloses a summary of its results, hearing analysis and evaluation conducted by third-party organization.
This process verifies how effectively the Board of Directors contributes to the functioning of the corporate
governance, identifies problems and attains improvement. For a summary of the latest evaluation results,
please see the following document.
https://www.screen.co.jp/download_file/get_file/20220614_BME_E.pdf
Supplementary Principle 4.14.2: Training Policies for Directors and Corporate Auditors
The Company provides newly appointed directors and corporate auditors (excluding outside directors andoutside corporate auditors) with opportunities to undergo external training programs at its own expense,
thereby ensuring that these individuals are well aware of the roles and responsibilities they are expected tofulfill from the moment their term of office begins as well as the relevant laws and regulations they need toknow. Outside directors and outside corporate auditors are given opportunities to acquire knowledge about
the SCREEN Group’s businesses, financial conditions, and organizational structure, and other essential
Group-related matters as soon as they assume office while being granted access to duty-related intelligencenecessary to the fulfillment of their roles and responsibilities. The Board of Directors holds quarterly sessions
aimed at reviewing business reports in four main business areas submitted by the four major business
operating companies. That keeps directors and corporate auditors informed of the latest technological,
business and industrial trends.
Principle 5.1: Policy for Constructive Dialogue with Shareholders
The Company promotes constructive engagement with shareholders in line with the following Disclosure
Policy.
https://www.screen.co.jp/en/ir/disclosure_policy
Supplementary Principle 5.2.1: Formulation and Announcement of Management Strategies, Plans
and Business Portfolio
The Group has positioned business portfolio management as one of its key management strategies to achievesustainable growth and enhance corporate value in a rapidly changing business environment. Specifically, thebasic policy of the Board of Directors is to build an optimal business portfolio by visualizing the current
status of each business in an integrated manner using growth rate and ROIC as indicators, analyzing issues－6－and periodically confirming the progress of necessary measures.
2. Capital Structure
Percentage of foreign shareholders

From 20% to less than 30%

Status of Major Shareholders Update
Shareholder
The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
Nippon Life Insurance Company
The Bank of Kyoto, Ltd.
STATE STREET BANK AND TRUST COMPANY 505001
THE BANK OF NEW YORK MELLON 140044
SCREEN’s Business Partners Shareholders’ Association
Synchronize
Resona Bank, Limited.
The Shiga Bank, Ltd.
MUFG Bank, Ltd.
Controlling shareholder (except
for parent company)―――

Parent company

None

Number of shares Percentageof shares
held
held
9,631,200
20.60
4,486,300
9.60
1,830,796
3.92
2.88
1,346,161
1,118,226
2.39
965,074
2.06
948,786
2.03
912,560
848,349784,714

1.95
1.81
1.68

Supplementary Explanation―――

3. Corporate Profile
Listed stock market andmarket section Update

Prime Market, Tokyo Stock Exchange

Fiscal year-end

March 31Type of businessElectric equipment

Number of employees(consolidated) as of the end of
the previous fiscal year

1,000 or more

Sales (consolidated) as of theend of the previous fiscal year

From ¥100 billion to less than ¥1 trillion

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

From 50 to less than 100

4. Policy on Measures to Protect Minority Shareholders when Conducting Transactions with
the Controlling Shareholder―――
5. Other Special Circumstances That May Have Material Impact on Corporate Governance
―――
－7－

II.

Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, the Execution of Business, and Management Oversight

1. Organizational Composition and Operation
Structure

Company with a board of corporate auditors

Directors
Maximum number of directors
stipulated in the Articles ofIncorporation

13

Term of office stipulated in the
Articles of Incorporation

1 yearChairman of the Board of
Directors

Chairman

Number of directors

8

Appointment of outside
directors

Yes

Number of outside directors

4

Number of outside directors
designated as independent
directors pursuant to thesecurities listing regulations of
the Tokyo Stock Exchange

4Outside directors’ relationships with the Company (1)Name
Shigeru Saito
Makoto Yoda
Hidemi Takasu

StatusAppointed fromanother company
Appointed fromanother company
Appointed fromanother company
Academica

Relationship with the Company (note)b c d e f g h i j
KHiroko Okudaira○Note: Nature of the relationship with the Company is indicated using the following symbols:○: Indicates the situation described below applies at present or in the recent past△: Indicates the situation described below applied in the past●: Indicates the situation described below applies to a close family member of the individual at present or in the recent
past▲: Indicates the situation described below applied to a close family member of the individual in the pasta. Engages in business execution at the listed company or its subsidiaryb. Engages in business execution at the listed company’s parent company or serves as a non-executive directorc. Engages in business execution at a fellow subsidiary of the listed company
d. Engages in business transactions with the listed company as his/her main business partner or engages in businessexecution at a company that engages in such transactionse. Acts as a main business partner of the listed company or engages in business execution at a company that acts as amain business partner of the listed company
f. Serves as a consultant, accounting specialist or attorney-at-law for the listed company and receives a considerable
amount of remuneration or compensation other than executive remunerationg. Holds considerable equity in the listed company or engages in business execution at a company that holds such equity
h. Engages in business execution at a company that has business transactions with the listed company (excluding theabove “d,” “e” or “f”; this clause does not apply to family members of outside directors)
i. Engages in business execution at a company that is in an inter-directorial relationship with the listed company (thisclause does not apply to family members of outside directors)－8－

j. Engages in business execution at a company that is a beneficiary of the listed company (this clause does not apply tofamily members of outside directors)
k. OtherOutside directors’ relationships with the Company (2) Update
Name

Shigeru Saito

Makoto Yoda

Designation as
independent Supplementary explanationof the relationshipdirector○○

Mr. Shigeru Saito serves
as Chairman & CEO of
TOSE CO., LTD., acompany that has no
business relationship with
SCREEN Holdings.

Mr. Makoto Yoda had
previously served at GS
Yuasa Corporation, acompany that has no
business relationship with
SCREEN Holdings.

Reasons for appointment
Reasons for appointment as an outside director
He serves as Chairman and CEO of a softwaredevelopment company. In addition to his
profuse knowledge gained through many yearsof management experience, he has specialized
knowledge about the latest IT fields, including
metaverse, NFT, and AI. He concurrently serves
as Outside Director of another company.
Currently, as Outside Director and Member ofthe Board of the Company, he has been
providing useful proposals to the Board of
Directors from various perspectives such assoftware development. It is expected that he willcontinue to contribute to strengthening of the
management supervision function and give
advice from a wide range of management
perspectives.
Reasons for designation as an independent director
Since he is independent from management
members engaging in business execution, he wasdeemed capable of fulfilling the role of outside
director without causing a conflict of interest
with general shareholders.
Reasons for appointment as an outside director
He has a wealth of knowledge as a manager for
many years. This includes overseas sales atbatterydevelopment
companiesandmanagement experience at subsidiaries in China.
Moreover, he also gained a wide range ofexperience as the head of external organizations,such as the chairman of the BATTERYASSOCIATION OF JAPAN and the chairmanof the Kyoto Industrial Association. Currently,
as Outside Director and Member of the Board of
the Company, he has been providing usefulproposals to the Board of Directors from various
perspectives. It is expected that he will continue
to contribute to strengthening of the
management supervision function and give
advice from a wide range of management
perspectives.
Reasons for designation as an independent director
Since he is independent from management
members engaging in business execution, he wasdeemed capable of fulfilling the role of outside
director without causing a conflict of interest
with general shareholders.

－9－Hidemi Takasu

Hiroko Okudaira○○

Mr. Hidemi Takasu had
previously served at
ROHM Co., Ltd., acompany that has no
business relationship with
SCREEN Holdings.

Ms. Okudaira Hiroko
servesas
Associate
Professor of Doshisha
Business
School,Doshisha
University,
which
has
businessrelationship
with
SCREEN
Holdings
regarding a project forstrengthening educational
functionthroughacademic-industrial
collaboration. However,
SCREEN’s
donationamounted to less than
0.1% of the total costs of
the university. (in FY
2022/3)

Reasons for appointment as an outside director
He has profuse management experience,
including overseas business, and expertise as an
officer in charge of technology development ofsemiconductor devices at a semiconductorrelated company. He concurrently serves as adirector of another company. He has profoundrelationships with universities in Japan andoverseas. Currently, as Outside Director andMember of the Board of the Company, he has
been providing useful proposals to the Board of
Directors from various perspectives. It is
expected that he will continue to contribute tostrengthening of the management supervisionfunction and give advice from a wide range oftechnological development perspectives.
Reasons for designation as an independent director
Since he is independent from management
members engaging in business execution, he wasdeemed capable of fulfilling the role of outside
director without causing a conflict of interest
with general shareholders.
Reasons for appointment as an outside director
As Associate Professor (labor economics,
applied micro econometrics, etc.) of Doshisha
Business School, Doshisha University, she has awealth of knowledge and has outstanding
research achievements on wide-ranging themes
concerning the social structure, such as
empowerment of women and work-stylereforms including work from home. Although
she has no experience of involvement incorporate management, she has a wealth ofknowledge, including practical empirical researchof companies conducted in academia.
Currently, as Outside Director and Member ofthe Board of the Company, she has been
providing useful proposals to the Board of
Directors from various perspectives, including
on new workstyles, compliance, and diversity. It
is expected that she will continue to contributeto strengthening of the management supervisionfunction and give advice from a wide range ofobjective perspectives.
Reasons for designation as an independent director
Since she is independent from management
members engaging in business execution, she
was deemed capable of fulfilling the role ofoutside director without causing a conflict ofinterest with general shareholders.

Voluntary establishment ofcommittee(s) corresponding
to Nomination Committee orRemuneration Committee

Yes

－10－

Status of Non-Mandatory Committees, Their Composition and Chairpersons
Full-time
Totalcommittee
Directors
Name of committee number ofmembers members
A committee
corresponding
to theNominating
Committee
A committee
corresponding
to theCompensation
Committee

Outsidedirectors

External
specialists

OthersNominating andCompensation
Advisory
Committee

5

0

1

4

0

0

Nominating andCompensation
Advisory
Committee

5

0

1

4

0

0

Chair

None

None

Supplementary Explanation
Regarding the nomination of candidates for director and corporate auditor positions, candidates are
selected in accordance with the prescribed criteria and approved by the Board of Directors after seeking
the advice of the Nomination and Compensation Advisory Committee composed of outside directors (themajority) and the Chairman of the Board of Directors.
Regarding the dismissal of directors, after seeking the advice of the Nomination and Compensation
Advisory Committee, the Board of Directors may propose dismissing an individual to whom one of thecriteria apply. Approval of the dismissal is then required at a shareholders’ meeting based on the resolution
passed by the Board of Directors.
After seeking the advice of the Nomination and Compensation Advisory Committee, compensation foreach director is now determined by the representative directors under authorization of the Board of
Directors.
Corporate Auditors
Establishment of a board ofcorporate auditors

Yes

Minimum number ofcorporate auditors stipulated
in the Articles ofIncorporation

4

Number of corporate auditors

4

Cooperation among Corporate Auditors, Accounting Auditors and Internal Audit Departments
To enhance the effectiveness of auditing, corporate auditors act in collaboration with external
accounting auditors, staff members of the Company’s internal audit department, and other Group
companies’ auditors. Corporate auditors receive each audit report executed by these individuals
and discuss subject matters of the audit as well.
Appointment of outside
corporate auditors
Number of outside corporate
auditors
Number of corporate auditors
designated as independent
corporate auditors pursuant tothe securities listing regulationsof the Tokyo Stock Exchange

Yes
2
2

－11－

Outside Corporate Auditors’ Relationships with the Company (1)Name

StatusRelationship with the Company (note)a b c d e f g h i jk lmTetsuo Kikkawa
LawyerSeiji Yokoyama
CPA△
Note: Nature of the relationship with the Company is indicated using the following symbols:○: Indicates the situation described below applies at present or in the recent past△: Indicates the situation described below applied in the past●: Indicates the situation described below applies to a close family member of the individual at present or in the recent past▲: Indicates the situation described below applied to a close family member of the individual in the pasta. Engages in business execution at the listed company or its subsidiaryb. Serves as a non-executive director or an accounting advisor at the listed company or its subsidiaryc. Engages in business execution at the listed company’s parent company or serves as a non-executive director
d. Serves as a corporate auditor at the listed company’s parent company
e. Engages in business execution at a fellow subsidiary of the listed company
f. Engages in business transactions with the listed company as his/her main business partner or engages in businessexecution at a company that engages in such transactions
g. Acts as a main business partner of the listed company or engages in business execution at a company that acts as amain business partner of the listed company
h. Serves as a consultant, accounting specialist or attorney-at-law for the listed company and receives a considerable
amount of remuneration or compensation other than executive remunerationi. Holds considerable equity in the listed company or engages in business execution at a company that holds such equity
j. Engages in business execution at a company that has business transactions with the listed company (excluding the above“f,” “g” or “h”; this clause does not apply to family members of outside corporate auditors)
k. Engages in business execution at a company that is in an inter-directorial relationship with the listed company (thisclause does not apply to family members of outside corporate auditors)
l. Engages in business execution at a company that is a beneficiary of the listed company (this clause does not apply tofamily members of outside corporate auditors)
m. Other－12－Outside Corporate Auditors’ Relationships with the Company (2) Update
Name

Designation as
independent
corporate
auditor

Tetsuo Kikkawa○

Supplementary explanation

Reasons for appointment

Mr. Tetsuo Kikkawa is the
President and Attorney-at-Law
of Kyoto Mirai Law Office, butthere is no business relationshipbetween the Company and theoffice.

Reasons for appointment as an outside corporate
auditor
The Company has judged that Mr.
Kikkawa will contribute to the fair andunbiased audit through his high ethicalstandard backed by a wealth of knowledge
and experience he has accumulated as alawyer.
Reasons for designation as an independent
corporate auditor

Since he is independent frommanagement members engaging inbusiness execution, he was deemedcapable of fulfilling the role of outside
director without causing a conflict ofinterest with general shareholders.

Seiji Yokoyama

Mr. Seiji Yokoyama is thecertifiedaccountant
of
Yokoyama-Seiji Certified Accountant
Office, but there is no business
relationshipbetweentheCompany and the office. Also,
he had once served in Deloitte
Touche Tohmatsu LLC, which
has a business relationship with
the Company. However, theannual amount of the transaction
is small being less than 0.1% of
the whole income of said entityand vice versa (in FY 2022/3).

○

Reasons for appointment as an outside corporate
auditor
The Company has judged that Mr.
Yokoyama will contribute to the fair andneutral audit through his advanced
knowledge in the field of finance andaccounting and his vast auditing
experience in domestic and foreigncompanies which he earned from working
at certified accountant offices.
Reasons for designation as an independent
corporate auditor

Since he is independent frommanagement members engaging inbusiness execution, he was deemedcapable of fulfilling the role of outside
director without causing a conflict ofinterest with general shareholders.

Independent Directors and Independent Corporate Auditors
Number of individuals
designated as independent
directors or independent
corporate auditors

6

Other Matters Related to Independent Directors and Independent Corporate Auditors
All outside directors and outside corporate directors are qualified as independent directors or
independent corporate auditors in accordance with the securities listing regulations of the Tokyo
Stock Exchange and are designated accordingly.
Incentives
Incentive policies for directors

Introduction of a performance-based compensation system,
etc.

Supplementary Explanation
The Company abolished its retirement benefits for senior management and directors in 2005 and adopted－13－

stock allowances aimed at encouraging recipients to stay conscious of SCREEN’s medium- to long-term
corporate performance and share prices. Moreover, the 76th Ordinary General Meeting of Shareholders
held on June 27, 2017 approved the introduction of performance-linked share compensation, which thenreplaced stock allowances and has been in place since August 2017.
Accordingly, compensation for directors now consists of three elements: (a) basic remuneration for fixedcash payment, (b) a short-term performance-linked cash bonus, and (c) share compensation linked withthe short- and medium to long-term performance, and corporate value (shareholder’s value). This
compensation scheme better motivates recipients to improve business performance and to increase thevalue of the Company over the medium to long term (shareholder’s value). The well-balanced scheme
allows to develop management personnel, resulting in the sustainable growth of the Company. (Outside
directors’ compensation does not include performance-linked share compensation.)
The policy on determining the ratio of total remuneration to each director is as follows.
1. Basic remuneration is paid relative to the responsibility of each director in terms of the
responsibilities, including the size of the business, that they are engaged in.
2. Performance-linked compensation is less than approximately half of fixed remuneration
3. Performance-linked share compensation is designed to grant approximately 40%, at most, of basic
remuneration described under the Supplementary Explanation of Other Matters Related to
Independent Directors and Independent Corporate Auditors. Its monetary value could changewith fluctuations in share value.
Performance measurement aims at reinforcement of management infrastructure, including operating
income ratio, and ROE. In addition, measurements in terms of environment and safety is used toenable the social value enhancement. The amount of performance-linked bonus is determined onscoring achievement of each indicator.
Recipients of stock options
Supplementary Explanation―――

Remuneration for Directors
Disclosure of individual
director remuneration

Disclosing a portion of individual director remuneration

Supplementary Explanation
The Company discloses the sum of annual remuneration paid to all directors. In addition, theCompany discloses the amount of remuneration paid to any director who receives an annual total of¥100 million or more in its securities report.
The establishment of policy on
determining remuneration
amounts and calculation
methods

Yes－14－

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
After seeking the advice of the Nomination and Compensation Advisory Committee composed ofoutside directors (the majority) and the Chairman of the Board of Directors, compensation for eachdirector is now determined by the representative directors under authorization from the Board of
Directors.
Support System for Outside Directors and Outside Corporate Auditors
The Secretarial Department and the Corporate Auditors Department provide both outside directors
and outside corporate auditors with support staff. Prior to Board of Directors meetings, outside
directors and outside corporate auditors are briefed as necessary on matters of particular importancethat will be discussed in said meetings.

2. Business Execution, Auditing, Oversight, Nomination and Remuneration Decisions(Overview of the Current Corporate Governance System) Update(1) Overview of the Corporate Governance System and Reasons for Adopting Said System
SCREEN Holdings takes the form of a company with a Board of Corporate Auditors. At present, it
has a Board of Directors comprising eight directors (including four outside directors) and a Board of
Corporate Auditors comprising four corporate auditors (including two outside corporate auditors) as
well as external accounting auditors. The Group has adopted a holding company structure split into
four main business areas,1 each under a separate business operating company, to enable agile and boldbusiness execution. The holding company determines the basic policies and strategies for Groupmanagement as well as the optimal allocation of management resources. In addition, it has
management oversight over the business execution of each Group company, ensuring the functional
separation of business execution and oversight.
The Board determines basic policies and strategies for Group management and important matterspertaining to business execution and exercises supervision over business execution, holding regularmonthly meetings and additional meetings as necessary. It selects more than one-third of outside
directors (there are currently four) in the Board of Directors with an eye to the functional
enhancement of management oversight and the maintenance of management objectivity. Outside
directors are selected in accordance with the “Criteria for Independence of Outside Directors andOutside Corporate Auditors” formulated with reference to standards prescribed by the Tokyo Stock
Exchange. The term of office of director is set at one year as the Company aims to clarify responsibilities
of directors in addition to securing a management structure capable of quickly adapting to changes in theoperating environment.
The Company has voluntarily chosen to establish the Nomination and Compensation Advisory
Committee composed of outside directors (the majority) and the Chairman of the Board of Directors.
Director and corporate auditor candidates are determined by the Board of Directors after seeking
advice from the Nominating and Compensation Advisory Committee. Compensation for each director
is now determined by the representative directors under authorization from the Board of Directors after
seeking the advice of the Committee. The Nominating and Compensation Advisory Committee is thus
helping the Board make fair and objective decisions with regard to these matters.
The Company also maintains the Management Committee. This body comprises the full-time directors,presidents of business operating companies2 and functional support companies3 and officers whom the
Chairman of the Committee appoints. It meets more than once a month to deliberate matters related to
management and to facilitate the decision-making of the Board of Directors and representative directors.
In general, the Company’s Board of Corporate Auditors holds periodic meetings once a month, and if
necessary, special meetings are held. In line with the audit policies and plans formulated by the Board of
Corporate Auditors, it is responsible for monitoring and overseeing the legality of the official acts of thedirectors. This is done through daily audits to ensure propriety. The Company places the Corporate
Auditors Department, which maintains a dedicated staff, to assist the Corporate Auditors.
－15－

[Reference] Skills matrix indicating key expertise and experience of directors and corporate auditors

Note: The above table does not list all of the expertise and experience of the directors and corporate
auditors.
* Includes research in academia(2) Status of Internal Audit, Corporate Auditors’ Audit, and the Effort to Develop the Auditor’s
Faculty
The Company has a Group Audit Department, which includes 8 specialized staff members who haveexpertise in internal audits and internal control assessments. The Department performs audits in line withthe annual audit plans formulated for the entire Group and approved by the representative directors.
Moreover, it also performs internal control assessments over Financial Reporting. The Department
reports the details of audit results of the internal control assessments to the representative directors andthe full-time auditors. If necessary, the Department also makes a summary report thereof to the Board of
Directors, the Board of Corporate Auditors and the Management Committee. The Group Audit
Department likewise acts in close collaboration with the auditors of both the Company and the otherGroup companies, the external accounting auditors and the Internal Control Division by sharing
information and opinions with them in an effort to enhance the effectiveness and efficiency of internal
audits.
The Board of Corporate Auditors consists of two full-time internal auditors and two independent outside
auditors who serve as part-time auditors. Internal auditor Hirofumi Ota, who has wide experience inaccounting affairs at the Company, and outside auditor Seiji Yokoyama, who is a certified public
accountant, are both equipped with considerable knowledge about finance and accounting. The corporate
auditors attend the meetings of the Board of Directors to monitor the conduct of the meeting, such as but
not limited to the conduct of the session, and decisions made by directors at that meeting. If necessary,the corporate auditors express their opinions at the meetings. In addition, corporate auditors oversee thedirector’s duty by attending important conferences such as the Management Committee, periodic
interviews with the directors, the corporate officers and key employees, the review of important documents
to be approved, and on-site or remote audits covering key business bases operated by the Company andthe other Group companies in Japan and overseas. Furthermore, the corporate auditors receive reports
from the directors and employees with regard to the status of the internal control systems and the operating
status thereof, and also attend the meetings of the CSR Committee and the Group Risk Committee toassess progress in the Company’s initiatives to strengthen risk management, then provide the Committees
with their insights if necessary. With the aim of enhancing the effectiveness of audits, the Board of－16－

Corporate Auditors acts in collaboration with the staff members of the Company’s Internal Audit
Department, the other Group companies’ auditors, and the External Accounting Auditors. The corporate
auditors are furnished with copies of every audit reports executed by them and discuss the same as well.
(3) Status of Accounting Audits
The Company has signed an audit contract with KPMG AZSA LLC with regard to accounting audits
pursuant to Japan’s Companies Act and the Financial Instruments and Exchange Act.
Notes:
1. Semiconductor production equipment business, graphic arts equipment business, display production
equipment and coater business, and PCB-related equipment business
2. Business operating companies: SCREEN Semiconductor Solutions Co., Ltd., SCREEN Graphic
Solutions Co., Ltd., SCREEN Finetech Solutions Co., Ltd., SCREEN PE Solutions Co., Ltd., and
SCREEN Advanced System Solutions Co., Ltd.
3. Functional support companies: SCREEN IP Solutions Co., Ltd.
3. Reasons for Adopting the Current Corporate Governance System
SCREEN Holdings believes that the corporate governance system described above will better position the
Company to enhance the transparency, soundness, and efficiency of its business management and help
secure the overall interests of stakeholders, including shareholders. In addition, the Company has appointed
four outside directors, all of whom are equipped with abundant experience in such fields as corporate
management, with the aim of strengthening its management oversight functions and incorporating objective
viewpoints in the course of management decision-making.

－17－

III.

Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Bring Vitality to the General Shareholder Meetings and Promote the Smooth
Exercise of Voting Rights Update

Early notification of the Ordinary
General Meeting of Shareholders

A Notice of the Ordinary General Meeting of Shareholders is sent
approximately three weeks before the date of the scheduled
meeting.
The Company also discloses it on the Company’s website prior tobeing sent to all shareholders.

Scheduling the Ordinary General
Meeting of Shareholders to avoid
the peak day

The Ordinary General Meeting of Shareholders is scheduled to
avoid the peak day.

Allowing the electronic exercise
of voting rights

To enhance shareholders’ convenience in terms of the exercise of
voting rights, the electronic exercise of voting rights has been
implemented since the Ordinary General Meeting of Shareholders
held in June 2007. The exercise of voting rights by smartphones
also became available at the Ordinary General Meeting of
Shareholders held in June 2018.

Participation in the Electronic
Voting Platform and otherinitiatives aimed at providing
institutional investors with accessto systems that ensure thesmoother exercise of their voting
rightsThe Company participated in the Electronic Voting Platform
for institutional investors.

Provision of a convocation
notice in English

Other

A summarized English version of the Notice of the Ordinary
General Meeting of Shareholders is distributed via TDNet andthe Company’s website prior to being sent to all shareholders.
The Company posts such materials as the Notice of the Ordinary
General Meeting of Shareholders and discloses voting results on
its corporate website with the aim of improving convenience for all
shareholders. The Company has implemented a live streaming
system in addition to the face-to-face Ordinary General Meeting of
Shareholders for their convenience. A video of the Meeting will be
distributed on our website for a certain period of time after the
Meeting.

－18－

2. IR Activities Update
Supplementary explanation

Preparation and publication of adisclosure policy

Periodic investor briefings forindividual investors
Periodic investor briefings foranalysts and institutional
investors

The Disclosure Policy is posted on the“Investor Relations” section of theCompany’s corporate website.
https://www.screen.co.jp/en/ir/disclosure_p
olicy
The Company holds (online) briefings forindividual investors, albeit on a non-periodic
basis.
The Company holds (online) briefings foranalysts and institutional investors after eachannouncement of quarterly operating results.

Periodic investor briefings foroverseas investors

Although the Company does not hold periodic
briefings for these investors, conference calls areheld with overseas investors. The Company also
actively participates in domestic conferences inorder to engage in dialogue online.

Posting of IR materials on thecorporate website

In addition to securities reports and othermandatory disclosure items, materials being
posted on the Company’s corporate website
include such financial results documents asquarterly financial summaries, non-financial
information subject to timely disclosure rules,
the Annual Report (integrated report issued
between August – September), shareholder
newsletters titled SCREEN NOW (in Japanese
only, released every June), Fact Book (updated
every August – September) and earnings
presentation materials.

Establishment of a department incharge of IR and/or appointmentof staff in charge of IR

Presentation bypresident

The Company has in place a dedicated IR
division of PR & IR Department.

－19－

Yes

Yes
Yes

3. Measures to Ensure Due Respect for Stakeholders Update
Supplementary explanation

Stipulation of internal rules forrespecting the position of
stakeholders

The Company has established a CSR Charter that sets forth therelationship with our society and the code of conduct that all Group
executives and employees should follow in line with our Corporate
Philosophy of “Sharing the Future,” “Human Resource
Development,” and “the Pursuit of Technology.” The Company
aims to become a company which our shareholders, customers andother stakeholders highly value and which contributes to society’s
sustainable development.

Implementation ofenvironmental activities, CSR
activities, etc.

The Company’s CSR is to largely contribute to the sustainable
development of the society towards our future in line with its
Corporate Philosophy of “Sharing the Future,” “Human
Resource Development,” and “the Pursuit of Technology.” To
this end, while the Company conducts responsible acts as a good
corporate citizen, it sets and works on important initiatives ineach ESG (Environment, Society and Governance) areaaccording to the SDGs.
Regarding our environmental conservation activities based on
corporate social responsibility, the Company has been working
to improve energy efficiency in line with Japan’s Energy
Conservation Law. In FY2020, we have set SBTi-approved
reduction targets for CO2 emissions that we aim to achieve by
2030, with a base year of FY2018.
i) 30% reduction of absolute CO2 emissions (Scope 1 + 2) at ourbusiness sitesii) 20% reduction of absolute CO2 emissions (Scope 3) from our
products installed in customers’ premises
In addition, we are implementing various measures, such as (1)reduction of waste (improvement of recycling rates), (2)mitigation of and adaptation to water-related risks, (3)contribution to biodiversity conservation, and (4) enhancementof our Green Products certification system to reduce theenvironmental impact of our products.

Development of polices on
the provision of
information targetingstakeholders

In the SCREEN Group CSR Charter, we specify that, in
addition to actively communicating with stakeholders, the
SCREEN Group will disclose information relating to the Groupin a timely and appropriate manner. We also discloses in annual
reports and on our website, financial information, and nonfinancial information such as social and environmental
management information, based on the GRI Standards forinternational sustainability reporting.

－20－

IV.

Matters Related to Internal Control Systems Update
1. Basic Views on Internal Control Systems and the Progress of System Development
The Company has resolved to establish its internal control systems and determined the following mattersrelated to the development of systems necessary to ensure that duties executed by directors comply withlaws, regulations, and the Articles of Incorporation, as well as the development of other systems prescribedby the applicable ordinance of the Ministry of Justice as necessary to ensure the propriety of operations
undertaken by a group of enterprises consisting of a stock company and its subsidiaries.
Basic Views
SCREEN Holdings, along with other Group companies, has established the SCREEN Group CSR Charter/ Code of Conduct, a set of fundamental precepts formulated to ensure that all Group activities uphold thecorporate philosophy, which consists of the three principles “Sharing the Future,” “Human Resource
Development,” and “The Pursuit of Technology.” Under this charter/code of conduct, all Group members
are committed to maintaining strict legal compliance, high ethical standards, and transparent business dealings
and to striving to live up to stakeholder expectations and thereby contributing to the sustainable developmentof society.
In line with the views described above, the Company aims to develop its internal control systems in thefollowing manner.
Status of Internal Control Systems
Systems for ensuring the properness of operations undertaken by a corporate group consisting of theCompany and its subsidiaries
 As the holding company overseeing the affairs of the SCREEN Group, the Company develops andmaintains a Group management structure that clearly defines basic policies for the Group’s operations aswell as roles and responsibilities assigned to each Group company in line with its SCREEN Group Codeof Management.
 From the perspective of consolidated business management, the Company aims to secure the functional
separation of business execution and oversight and to this end focuses on strategic planning for the entire
Group, optimally allocating management resources, and exercising management and supervision over the
status of operations undertaken by each Group company.
 The Company develops and maintains systems for securing the propriety and reliability of its financial
reporting in line with the SCREEN Group Internal Control Design Principles for Financial Reporting.
 The Company constantly assesses the Group’s financial position and ensures meticulous financial and tax
reporting by handling these affairs in accordance with the SCREEN Group Accounting Financial Policy
as well as the SCREEN Group Accounting Standards.
 In line with its SCREEN Group Code of Human Resources Management, the Company strives to nurtureand better utilize diverse workers capable of earning success on the global stage. To this end, the Company
maintains a personnel system focused on clearly defining the roles of individual employees and accurately
assessing their accomplishments while providing skill development programs and other assistance to help
employees achieve personal growth in a way that respects their diversity.
 The Company strives to develop and maintain the systems necessary to properly operate and manage IT
infrastructure for the Group in accordance with the SCREEN Group Rules for IT Management.
 The Company develops and maintains systems for ensuring the timely and accurate disclosure of
information with regard to the Group’s corporate activities in a manner that conforms with its Basic
Disclosure Policy.
 The Company holds Consolidated Management Committee meetings attended by its directors, corporate
auditors and corporate officers as well as presidents of Group companies in an effort to ensure that all
Group members firmly embrace its management strategies and operational policies while sharing a senseof unity that transcends organizational boundaries and helps them work as one.
 The Company dispatches directors, corporate officers, and its own employees or those of managing
Group companies to other Group companies where they assume positions as directors or corporate
auditors in order to manage and/or supervise operations undertaken by these Group companies.
 Periodically, the Company receives reports on the status of Group companies’ marketing, financial
－21－



position, and other operational conditions either directly from said companies or via their managing
Group companies.
Internal audit departments audit the status of internal control systems the Company and other Group
companies have put in place while ensuring that departments subject to auditing make improvements
based on audit findings in the pursuit of even more robust internal control systems.

Systems for ensuring the efficient execution of directors’ duties
 The Company’s Board of Directors meets monthly while holding special meetings as necessary and ischarged with making swift decisions with regard to important matters in addition to supervising directors’
execution of duties.
 To ensure its directors possess the authority necessary to efficiently execute their duties, the Company
defines tasks to be delegated to each director based on a resolution passed by its Board of Directors while
mandating other Group companies to follow similar practices.
 Based on the SCREEN Group Responsibility and Authority Rules, the Company clarifies the
responsibilities to be borne by and authorities to be delegated to its directors, corporate officers, andemployees in the course of their duties while mandating that other Group companies follow similar
practices.
 The Company maintains the Management Committee, which comprises the full-time directors, presidents ofbusiness operating and functional support companies, as well as officers appointed by the Chairman of
the Committee. The Committee meets more than once a month to deliberate matters related to
management and facilitate the decision-making of the Board of Directors and representative directors.
Systems for ensuring that duties executed by directors, corporate officers, and employees comply
with laws, regulations, and the Articles of Incorporation
 Under the SCREEN Group’s CSR Charter / Code of Conduct, the Company ingrains a code of conduct
into the hearts and minds of directors, corporate officers, and all employees so that it can operate in a fair
and transparent manner.
 The Company maintains officers and departments in charge of legal affairs to confirm the status ofvarious contracts and transactions affecting the Group in terms of compliance with laws, regulations, and
the Articles of Incorporation.
 The Company maintains the membership of outside directors in the Board of Directors to ensure thelegal compliance and the rationality of management decisions of directors in the execution of their duties
and to strengthen the Board’s oversight functions.
 The Company develops and maintains a whistleblowing system for the entire SCREEN Group, with theaim of preventing and detecting the occurrence of violations of laws and regulations, fraudulent activities,
and other corporate misconduct at the earliest stages. The Company and other Group companies tolerate
no detrimental treatment of whistleblowers due to their actions in reporting on the violation of laws orother corporate misconduct.
 The Company is determined to sever any relationships with anti-social forces and reject illicit demands
from such forces and, to this end, takes a firm stand against them by acting in collaboration with externallawyers and police agencies. The Company also complies with prefectural and other local ordinances
aimed at eliminating organized crime groups and in no way provides anti-social forces with any benefits
that may facilitate or contribute to their activities and operations. Moreover, the Company mandates otherGroup companies to follow similar practices.
Systems and rules for the management of risk and losses
 To minimize risks that may affect the Group’s operations, the Company mandates all business units
within the Group to develop and maintain risk management systems in conformity with the SCREEN
Group Risk Management Guidelines and relevant operational rules while performing the periodic
monitoring of the status of such systems.
 Whenever a critical risk materializes, the Company sets up disaster response headquarters led by the
President to implement countermeasures against emergencies and restore operations in line with theBusiness Continuity Management Regulations.

－22－

Systems for storing and managing information related to the execution of directors’ duties
 In accordance with laws, regulations and its in-house rules, the Company engages in the preparation,
storage and management of minutes of meetings and other important documents containing information
related to duties executed by directors and corporate officers while ensuring that these documents arealways accessible to directors and corporate auditors.
 The Company maintains a strict approach to information management and, to this end, abides by
the SCREEN Group Rules for IT Management as well as its Rules for the Management of SecuringConfidential Information and Trade Secrets.
Systems for securing the effectiveness of auditing by corporate auditors
 Corporate auditors are authorized to attend Board of Directors, Consolidated Management
Committee, Management Committee, and other important group meetings and freely voice theiropinions.
 The Company bears expenses incurred by corporate auditors in the course of executing their duties.
Systems for supporting reporting to corporate auditors
 SCREEN Holdings’ directors, corporate officers, and employees are obliged to report the status ofoperations, finance, compliance, risk management, and internal audits to corporate auditors and toreport any incidents constituting a significant violation of laws or in-house rules or suggesting the
emergence of critical damage to the Company in the course of their duties as soon as such incidents
are recognized.
 All directors, corporate auditors, corporate officers, and other employees serving Group companies
are obliged to provide the Company’s corporate auditors with reports on any incidents constituting
the significant violation of laws or in-house rules or suggesting the emergence of critical damage to
the Company in the course of their duties as soon as such incidents are recognized.
 Departments in charge of compliance are obliged to provide corporate auditors with periodic
reporting on the status of the SCREEN Group’s whistleblowing system and other important matters.
 The Company and other Group companies tolerate no detrimental treatment of whistleblowers due totheir actions in reporting on the violation of laws or other corporate misconduct.
Matters related to individuals charged with assisting corporate auditors in their duties
 The Company maintains a specialized department that assists corporate auditors with the executionof their duties while allocating to them a dedicated staff equipped with sufficient knowledge andcompetencies. This staff operates directly under the corporate auditors, and personnel transfer,
performance evaluation, and other matters associated with the management of these individuals are
not determined without the consent of corporate auditors.
2. Basic Views on the Elimination of Anti-Social Forces and the Status of Systems Serving This
Purpose Update
Basic Views on Eliminating Anti-Social Forces
The SCREEN Group takes a firm stand against any groups or individuals (hereinafter “anti-social
forces”) that may disrupt social order or sound corporate activities, therefore, squarely rejects any
demand from anti-social forces. In the course of signing contracts with suppliers, the Group confirmsthat none of the signatories are associated with anti-social forces. In addition, such contracts include
provisions allowing the Group to terminate contractual relationships immediately if any association
with such forces is identified.
Status of Systems for Eliminating Anti-Social Forces(Individuals responsible for preventing illegal demands)
The Company has appointed managers in charge of preventing illegal demands and allocated themto the Head Office’s general affairs department. Also, staff members at general affairs departmentsof the Company’s other business bases and its subsidiaries are tasked with dealing with illegal demands
while acting in collaboration with their peers at Head Office.
(Collaboration with external specialist bodies)
The SCREEN Group acts in collaboration with external specialist bodies to counter the influenceof anti-social forces by, for example, reporting to police agencies and consulting with lawyers asnecessary.
－23－

(Collection and management of information related to anti-social forces)
Head Office’s general affairs department collects information related to anti-social forces while
relaying such information to Group companies as necessary.
(Development of response manuals)
The SCREEN Group CSR Charter / Code of Conduct includes an action principle guiding theGroup’s stance against anti-social forces. The Company has prepared and distributed a booklet
themed on the CSR Charter / Code of Conduct, thereby ensuring that all Group members are wellaware of this principle. Moreover, the Company has developed manuals to be used by staff members
appointed at each business base to respond to anti-social forces.
(Training)
Mandatory training programs themed on the SCREEN Group CSR Charter / Code of Conduct
include sessions addressing the Company’s stance against anti-social forces.

－24－

V.

Other
1. Adoption of Anti-Takeover Measures
Adoption of anti-takeovermeasures

No

Supplementary Explanation―――

2. Other Matters Concerning the Corporate Governance System Update
The status of the Company’s systems associated with the disclosure of corporate information is as follows.
(1) Overview of systems for maintaining timely disclosure
The Company maintains the Timely Disclosure Committee to ensure that important corporate information
associated with the Company and the Group is promptly and appropriately released in a manner that
conforms with the Financial Instruments and Exchange Act and related regulations as well as rules stipulated
by financial instruments exchanges. The Committee consists of staff from the Secretarial Department,
Corporate Planning Department, Legal, IP & Compliance Department, Finance & Accounting Department,
PR & IR Department, and the Human Resources Department. The Committee is charged with analyzing
internal information registered as material and requiring particular attention under the Financial Instruments
and Exchange Act as well as information submitted to the Management Committee, discussing such matters
as whether or not to disclose that information and methods used for disclosure.
(2) Status of systems for maintaining timely disclosure(Information collection)
In each department, managers in charge of controlling internal information are obliged to register any
information that may be deemed material in connection with their respective departments or Group
companies managed under their respective departments. As soon as they are aware of the emergence of suchinformation, these managers must register such matters, outlining the information in question and the timingof its emergence.
(Analysis and discussions on disclosure or non-disclosure)
Based on requests from the chief manager in charge of information handling, the Timely Disclosure
Committee analyzes the content and significance of such information and its impact on profit/loss, thereby
communicating its judgement about whether or not to disclose such information and methods of disclosure
to this manager.
(Reporting to and approval of the Board of Directors)
The chief manager in charge of information handling asks the Management Committee to deliberate on thedisclosure/non-disclosure of such information. Taking conclusions reached by the committee into account,
this manager reports the matter to and obtains the approval of the Board of Directors or representative
directors before disclosing that information.
(Disclosure)Once the disclosure is approved, departments in charge of disclosure swiftly disclose that information via
the Tokyo Stock Exchange and, as necessary, hold press conferences.
(3) Development of robust systems for maintaining timely disclosure
The Company believes that its current systems are capable of ensuring timely disclosure. However, theCompany is committed to enhancing its timely disclosure practices.

－25－

－26－