(Translation)

Note: This document has been translated from a part of the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, the original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translation.

Taiheiyo Cement Corporation Basic Policy on Corporate Governance

Chapter 1

General Provisions

Article 1 (Purpose)
The purpose of this Basic Policy is to prescribe basic matters concerning corporate governance at
Taiheiyo Cement Corporation (hereinafter the “Company”) to ensure continuous improvement ofcorporate governance and thereby to help the Company to achieve sustainable growth and increase
corporate value over the medium to long term.

Article 2 (Basic Views)
The mission of the Taiheiyo Cement Group is to contribute to social infrastructure development by
providing solutions that are environmentally efficient, enhance our competitive position and bring value
to our stakeholders. Based on this mission, the Company will, in accordance with the provisions of thisBasic Policy, strive to improve corporate governance by ensuring the separation of the management’s
decision-making and supervisory functions from business execution to satisfy the expectations ofstakeholders including stockholders and to realize sustainable growth and increase of its corporate value
over the medium to long term.

Chapter 2

Corporate Governance System

Article 3 (Roles and Responsibilities of the Board of Directors)(1)

The Board of Directors shall, in compliance with the provisions of laws and regulations, the articles ofincorporation, and applicable regulations of the Company, be responsible for making decisions on
management strategy, management plan, and other important matters related to the management of theCompany as well as for the supervision of the execution of duties by the directors.

(2)

The Board of Directors shall delegate the decisions on matters other than those listed in the preceding
paragraph to the Executive Committee and the executive officers in charge of the matter in question.

(Translation)

Article 4 (Composition of the Board of Directors)(1)

The Board of Directors shall consist of no more than 10 directors as prescribed by the articles ofincorporation. At least one-third of them shall be independent outside directors who satisfy theseparately prescribed independence criteria for outside officers.

(2)

The Company shall, in order to ensure the effectiveness of the Board of Directors, ensure that thecomposition of the Board is well balanced as a whole comprising of members with diverse knowledge
and experience.

Article 5 (Establishment of a Nomination and Compensation Advisory Committee)(1)

The Company shall establish a Nomination and Compensation Advisory Committee as an advisory
body to the Board of Directors in order to secure fairness, transparency and objectivity pertaining todecisions on the nomination and compensation of directors and other officers.

(2)

The members of the Nomination and Compensation Advisory Committee shall consist of directors
appointed by the Board of Directors and include three or more members, the majority of whom shall beoutside directors. The chairperson of the committee shall be appointed from among outside directors.

(3)

The Nomination and Compensation Advisory Committee shall deliberate policies relating to thenomination of directors, appointment and dismissal of directors and other officers, policies for deciding
compensation and other similar matters for each director, and the details of compensation for directors
and other officers, and shall report to the Board of Directors.

Article 6 (Nomination Policy, etc. for Candidates for a Director)(1)

Candidates for an internal director shall be those persons who have knowledge and experience that are
adequate for the proper and fair execution of the management of the Company in addition to excellent
personal characteristics, insights, capabilities, and ethical standards. They shall be selected from a broadand diverse pool of talents, regardless of gender, nationality, work experience, age, etc., and proposedby the President and Director to the Board of Directors for deliberation and final nomination.

(2)

Candidates for an outside director shall be those persons who are capable of supervising the directors
and the management of the Company from an independent standpoint and providing advice that is
appropriate and to the point based on their extensive experience and broad knowledge. They shall beselected from a broad and diverse pool of talents, regardless of gender, nationality, work experience,
age, etc., and proposed by the President and Director to the Board of Directors for deliberation and final
nomination.

(3)

If a director violates laws, regulations, or the articles of incorporation, or any other event that is deemed
to make it difficult for a director to appropriately perform his or her duties occurs, the Board of
Directors shall deliberate and make decisions on the removal of the said director from his or her(Translation)
position or the submission of a proposal for the dismissal of the said director to the General Meeting ofStockholders.
(4)

In making decisions to propose the appointment of candidates for directors and the dismissal of
directors, the Board of Directors shall respect the results of the deliberation and reporting of theNomination and Compensation Advisory Committee to the maximum extent possible in order to secure
the fairness, transparency and objectivity of such decisions.

Article 7 (Term of Office of Directors)
The term of office of directors shall, as prescribed by the articles of incorporation, expire at theconclusion of the General Meeting of Stockholders pertaining to the last fiscal year ending within one
year after their appointment.

Article 8 (Concurrent Positions of Directors)(1)

Directors of the Company may concurrently hold a position as an officer, etc. at a company other thanthe Company only if it does not prevent the director from fulfilling the duty of due care of prudent
manager and the duty of loyalty as a director of the Company and shall focus on the execution of duties
at the Company as much as possible.

(2)

The significant concurrent positions held by the directors of the Company shall be disclosed annually in
the Reference Documents for the General Meeting of Stockholders and the Business Report pursuant to
the provisions of laws and regulations.

Article 9 (Executive Officer System)
The Company shall put in place a business execution system consisting of executive officers in order toclearly separate the management’s decision-making and supervisory functions from business execution.

Article 10 (Appointment Policy, etc. for Executive Officers)(1)

Executive officers shall be those persons who have a thorough knowledge of corporate management
and the business of the Company and are capable of fully executing their duties. They shall be selectedfrom a broad and diverse pool of talents, regardless of gender, nationality, work experience, age, etc.,
and proposed by the President and Director to the Board of Directors for deliberation and appointment.

(2)

If an executive officer violates laws, regulations, or the articles of incorporation, or any other event thatis deemed to make it difficult for an executive officer to appropriately perform his or her duties occurs,
the Board of Directors shall deliberate and make decisions on the dismissal of the said executive officer.

(3)

In making decisions to propose the appointment and dismissal of managing executive officers, theBoard of Directors shall respect the results of the deliberation and reporting of the Nomination and(Translation)
Compensation Advisory Committee to the maximum extent possible in order to secure the fairness,transparency and objectivity of such decisions.

Article 11 (Term of Office of Executive Officers)
The term of office of executive officers shall, as prescribed by the applicable regulations of theCompany, expire on the last day of the fiscal year ending within one year after their assumption of
office.

Article 12 (Composition of the Board of Auditors)(1)

The Board of Auditors shall consist of no more than five corporate auditors as prescribed by the articles
of incorporation, at least a half of which shall be independent outside corporate auditors who satisfy theseparately prescribed independence criteria for outside officers.

(2)

Corporate auditors shall be those persons who have appropriate experience and capabilities as well as
necessary knowledge on finance, accounting, and the law. At least one of them shall be a person who
has sufficient expertise on finance and accounting.

Article 13 (Nomination Policy, etc. for Candidates for a Corporate Auditor)(1)

Candidates for an internal corporate auditor shall be those persons who are capable of conducting auditsof the overall execution of duties by directors in a fair manner in addition to having excellent personal
characteristics, insights, capabilities, and ethical standards. They shall be selected from a broad anddiverse pool of talents, regardless of gender, nationality, work experience, age, etc., and proposed by
the President and Director, after obtaining the prior consent of the Board of Auditors, to the Board of
Directors for deliberation and final nomination.

(2)

Candidates for an outside corporate auditor shall be those persons who are capable of conducting auditsof the overall execution of duties by directors in a fair manner from an independent standpoint andproviding advice that is appropriate and to the point based on their extensive experience and broad
knowledge. They shall be selected from a broad and diverse pool of talents, regardless of gender,
nationality, work experience, age, etc., and proposed by the President and Director, after obtaining theprior consent of the Board of Auditors, to the Board of Directors for deliberation and final nomination.

(3)

If a corporate auditor violates laws, regulations, or the articles of incorporation, or any other event thatis deemed to make it difficult for a corporate auditor to appropriately perform his or her duties occurs,
the Board of Directors shall deliberate and make decisions on the submission of a proposal for thedismissal of the said corporate auditor to the General Meeting of Stockholders, after consultation with
the Board of Auditors.

(Translation)
Article 14 (Term of Office of Corporate Auditors)
The term of office of corporate auditors shall, as prescribed by the articles of incorporation, expire at
the conclusion of the General Meeting of Stockholders pertaining to the last fiscal year ending withinfour years after their appointment.

Article 15 (Concurrent Positions of Corporate Auditors)(1)

Corporate auditors of the Company may concurrently hold a position as an officer, etc. at a company
other than the Company only if it does not prevent the corporate auditor from fulfilling the duty of due
care of prudent manager as a corporate auditor of the Company and shall focus on the execution ofduties at the Company as much as possible.

(2)

The significant concurrent positions held by the corporate auditors of the Company shall be disclosed
annually in the Reference Documents for the General Meeting of Stockholders and the Business Reportpursuant to the provisions of laws and regulations.

Article 16 (Policy and Procedure for the Determination of Officers’ Compensation)(1)

Internal directors’ compensation (including compensation as an executive officer if such a position isheld concurrently) shall consist of fixed compensation and stock compensation as a consideration for
the execution of duties and variable compensation that is linked to the financial performance of theCompany for the fiscal year and be determined by the Board of Directors so as not to exceed the total
amount approved by the General Meeting of Stockholders.

(2)

Outside directors’ compensation shall consist only of fixed compensation to ensure their independence
from business execution and be determined by the Board of Directors so as not to exceed the total
amount approved by the General Meeting of Stockholders.

(3)

The compensation of managing executive officers (excluding those who also hold the position of adirector) shall consist of fixed compensation and stock compensation as a consideration for the
execution of duties and variable compensation that is linked to the financial performance of theCompany for the fiscal year and be determined by the Board of Directors.

(4)

The compensation of executive officers (excluding those who also hold the position of a director or
managing executive officers) shall consist of fixed compensation as a consideration for the execution ofduties and variable compensation that is linked to the financial performance of the Company for the
fiscal year and be determined by the Board of Directors.

(5)

Corporate auditors’ compensation shall consist only of fixed compensation to ensure the proper
execution of their duties such as audit services and audits of business execution and be determined byconsultation among corporate auditors so as not to exceed the total amount approved by the General
Meeting of Stockholders.

(6)

In making decisions on the compensation of directors and managing executive officers, the Board of
Directors shall leave its decisions to the discretion of the Representative Director after the deliberation

(Translation)and reporting of the Nomination and Compensation Advisory Committee. The Representative Director
shall respect the reporting from the Nomination and Compensation Advisory Committee to the
maximum extent possible when making decisions in order to secure the fairness, transparency andobjectivity of such decisions.

Article 17 (Support to Outside Directors and Outside Corporate Auditors)(1)

The Company shall, for the purpose of supporting the execution of duties by outside directors andoutside corporate auditors, appoint departments in charge of providing such support.

(2)

The Company shall, in order to encourage active discussion at the meetings of the Board of Directors,deliver relevant materials for the meeting agenda to outside directors and outside corporate auditors inadvance and otherwise strive to provide sufficient information to outside directors and outside corporate
auditors by, for example, ensuring that explanation is provided to them before the date of the board
meeting by the departments in charge that had been appointed in advance.

Article 18 (Meetings by Outside Directors and Outside Corporate Auditors)
Outside directors and outside corporate auditors shall hold a meeting among them as necessary.

Article 19 (Training Policy for Directors, Corporate Auditors, etc.)(1)

The Company shall provide directors, corporate auditors, and executive officers of the Company withtraining opportunities that are necessary for the fulfillment of their roles and responsibilities on an
ongoing basis at its cost.

(2)

The Company shall provide internal directors, internal corporate auditors, and executive officers of theCompany with training on the Companies Act, corporate governance, etc., at the time of theirassumption of office. The Company shall also provide them with training opportunities during theirterm of office for learning and deepening understanding of knowledge that are relevant to theirrespective roles including those provided by external organization.

(3)

The Company shall provide outside directors and outside corporate auditors of the Company withtraining on the Company’s business, finance, organization, corporate governance, etc., at the time of
their assumption of office. The Company shall also provide them with opportunities during their term ofoffice for deepening understanding of the business of the Company such as on-site tours of the factories,
subsidiaries, etc., of the Company.

Article 20 (Evaluation of the Overall Effectiveness of the Board of Directors)
The Board of Directors shall analyze and evaluate the overall effectiveness of the Board of Directors
and disclose the summary of the results of the evaluation each year.

(Translation)

Chapter 3

Securing the Rights and Equal Treatment of Stockholders

Article 21 (General Meeting of Stockholders)(1)

The Company shall, recognizing that the General Meeting of Stockholders is the highest decisionmaking body of the Company and an important forum for constructive dialogue with stockholders, put
in place an appropriate environment for the exercise of rights by stockholders.

(2)

The Company shall strive to send a notice of General Meeting of Stockholders as early as possible tosecure sufficient time for stockholders to consider the proposals at the meeting. The Company shall also
publish by electronic means the content of the Notice of General Meeting of Stockholders on thewebsite of the Company as well as through other media before sending it by mail.

Article 22 (Securing the Rights and Equal Treatment of Stockholders)(1)

The Company shall treat the stockholders of the Company equally in accordance with the nature and thenumber of shares held by them.

(2)

The Company shall not provide any special benefits, such as the provision of property benefits, only to
selected stockholders.

(3)

If a proposal set forth by the Company met a considerable number of negative votes at the General
Meeting of Stockholders although it was approved, the Board of Directors shall analyze the reason forand the cause of such votes to decide whether any future responses are required.

Article 23 (Basic Policy concerning Cross-Shareholding and the Exercise of Voting Rights Pertaining toShares Held as Part of Cross-Shareholdings)(1)

The Company will undertake a cross-shareholding with a business partner if it is determined tocontribute to the enhancement of the corporate value of the Company over the medium to long termfrom the perspective of the maintenance, enhancement, etc., of the stable and long-term commercial
relationship with the business partner.

(2)

The Board of Directors shall conduct an annual review of individual cross-shareholdings to evaluate
whether it is necessary to continue to hold them based on the examination of, among others, theirmedium- to long-term economic rationality and future prospect, from the perspective of whether the
purpose is appropriate and whether the benefits and risks from each holding cover the Company’s costof capital.

(3)

The Company shall exercise voting rights pertaining to cross-shareholdings based on a comprehensive
judgment on the desirability of the proposal from the perspective of the enhancement of the corporate(Translation)
value of the issuer and the Company over the medium to long term after closely examining the purpose
and the details of each proposal.

Article 24 (Transactions with Related Parties)(1)

A director intending to enter into a competitive transaction or a conflict of interest transaction
prescribed by laws and regulations shall obtain the approval of the Board of Directors in advance. In
addition, a director who has executed such a transaction shall report the actual status of the transaction
at the meeting of the Board of Directors held immediately after the execution of the transaction.

(2)

When the Company proposes to enter into a transaction with its related party, such as a major
stockholder or subsidiary, it shall complete the approval procedure prescribed by the applicableregulations of the Company and the Board of Directors shall regularly monitor the status of suchtransactions.

Chapter 4

Dialogue with Stockholders

Article 25 (Policy for Constructive Dialogue with Stockholders)
The Company shall separately prescribe the policy for the promotion of constructive dialogue withinvestors including stockholders to help the Company to achieve sustainable growth and increase
corporate value over the medium to long term.

Chapter 5

Appropriate Cooperation with Stakeholders Other Than Stockholders

Article 26 (Relationship with Stakeholders)
The Company will, recognizing that sustainable growth and the creation of corporate value over the
medium to long term of the Company are only possible with the provision of resources and contribution
from various stakeholders such as customers, business partners, creditors, local communities, andemployees, strive to build a good relationship with these stakeholders for appropriate cooperation with
them.

Article 27 (Business Principles)
The Company shall establish and put into practice the Business Principles that indicate how the
Company should behave in order to realize its mission and the status of the practice of the Business
Principles shall be reported regularly to the Board of Directors.

(Translation)

Article 28 (Responses to Sustainability Issues)
The Company shall respond appropriately to any sustainability issues and the status of such responses
shall be reported regularly to the Board of Directors.

Article 29 (Ensuring Diversity within the Company)
The Company shall, based on the recognition that diverse perspectives and values reflecting different
experience, skills, and attributes existing within the Company can be the strength of the Company inachieving sustainable growth, put in place an environment and a system for ensuring diversity including
the promotion of women’s empowerment.

Article 30 (Whistleblower Program)
The Company shall establish and administer an appropriate whistleblower program so that thewhistleblower can report information or genuine suspicion about an illegal or inappropriate act ordisclosure without worrying about any potential risk of disadvantages or retaliation and the informationand suspicion reported are objectively examined and used appropriately.

Chapter 6

Information Disclosure

Article 31 (Ensuring Appropriate Information Disclosure and Transparency)(1)

The Company shall, in compliance with the provisions of laws and regulations and rules of financial
instruments exchanges, disclose material facts properly on a timely basis. In addition, the Company will
strive to actively provide information disclosure through the website of the Company, the integrated
report, etc., beyond the scope of legal requirements to ensure management transparency.

(2)

The Company shall strive to ensure that the information disclosed and provided pursuant to theprovisions of the preceding paragraph will be easy to understand and highly useful for the users.

(3)

The Company shall disclose and provide information disclosure in English to the extent reasonable.

(Translation)

Supplementary Provisions

1

This Basic Policy shall take effect on December 22, 2015.

2

Any revision or abolishment of this Basic Policy shall be subject to the approval of the Board of
Directors.

3

A partial revision of this Basic Policy shall enter into force on December 25, 2018.
A partial revision of this Basic Policy shall enter into force on June 26, 2020.
A partial revision of this Basic Policy shall enter into force on March 31, 2021.
A partial revision of this Basic Policy shall enter into force on June 29, 2021.
A partial revision of this Basic Policy shall enter into force on December 21, 2021.

(Translation)
Appendix 1

Independence Criteria for Outside Officers

Outside officers are considered to be sufficiently independent from the Company if they do not fall under anyof the following items:
1.

A person who is or was an executive (Note 1) of the Company or any of its subsidiaries;

2.

A person who is or has recently been a person falling under any of the (1) through (7) below:(1) A major stockholder (Note 2) of the Company or an executive of a major stockholder of theCompany;(2) A party whose major business partner is the Company (Note 3) or an executive thereof;(3) A major business partner of the Company (Note 4) or an executive thereof;(4) A person belonging to an audit corporation that is the accounting auditor of the Company;(5) A party who receives a significant amount of donation or aid (Note 5) from the Company or an
executive thereof;(6) An individual who receives a significant amount of money (Note 6) or other property from theCompany as a lawyer, certified public accountant, tax accountant, consultant, etc., in addition to thecompensation that he/she receives from the Company as an outside officer; or(7) An executive of a legal entity, etc. that is a law firm, auditing firm, tax accounting firm, consulting
firm, etc., whose major business partner is the Company (Note 7).

3.

A person who is a close relative (Note 8) of any of the persons listed in 1. and 2. above.

Notes:
1.

An executive is an executive director, corporate officer, executive officer, or an employee who holds asenior management position.

2.

A major stockholder is a stockholder who holds 10% or more of the voting rights of the Company.

3.

A party whose major business partner is the Company is a party who has carried out transactions with theCompany for an amount exceeding 2% of the annual consolidated total net sales for the latest fiscal yearof that party.

4.

A major business partner of the Company is a party who has carried out transactions with the Company
for an amount exceeding 2% of the annual consolidated total net sales for the latest fiscal year of theCompany or a financial institution that has an outstanding balance of loans to the Company that exceeds
2% of the consolidated total assets of the Company as of the end of the latest fiscal year of the Company.

(Translation)
5.

If the recipient is an individual, a significant amount of donation or aid means a donation or aid
exceeding an average of 10 million yen per year over the last three fiscal years. If the recipient is a legal
entity, a significant amount of donation or aid means a donation or aid of an average of 10 million yen
per year over the last three fiscal years or 30% of the total annual expenses of said legal entity, whichever
the greater.

6.

A significant amount of money means an amount of money exceeding an average of 10 million yen peryear over the last three fiscal years.

7.

A legal entity, etc. whose major business partner is the Company is a legal entity, etc. that has carried outtransactions with the Company for an average amount per year over the last three years exceeding 2% of
the annual consolidated total net sales of said legal entity, etc.

8.

A close relative means a spouse or a relative within the second degree of kinship.

(Translation)
Appendix 2

Policy for Constructive Dialogue with Stockholders

The Company shall, in accordance with the following policy, undertake initiatives to promote constructive
dialogue with investors including stockholders to help the Company to achieve sustainable growth andincrease corporate value over the medium to long term.

(Structure)・ The officer in charge of the General Affairs Department shall be responsible for the overall supervision of
dialogue with investors with the assistance of the General Affairs Department.
・ The person in charge of investor relations at the General Affairs Department shall request the provision of
information from departments in charge of specific themes to make dialogue more fruitful and thedepartments in charge shall respond to the request appropriately.

(Dialogue Methods)
・ The Company will hold results briefings on a semiannual basis for the media, analysts, and institutional
investors. In addition, the Company will hold briefings on its management strategies, business operations,etc., as appropriate.
・ The Company will respond to individual investors by publishing sufficient information on its management
policies, businesses, operating results, etc., on the website of the Company.

(Dialogue on an Individual Basis)
・ The Company will respond to a request for dialogue on an individual basis if such a dialogue is determined
to be beneficial for sustainable growth and increase of its corporate value over the medium to long term, by
having an appropriate person have a face-to-face interview with a stockholder on an individual basis, while
paying attention to the fairness in information disclosure.

(Feedback to the Board of Directors)
・ The officer in charge of the General Affairs Department shall summarize the opinions, etc. of the investors
obtained in the course of dialogue and report them regularly to the Board of Directors.

(Translation)(Management of Insider Information)
・ In conducting dialogue with investors, the Company shall manage insider information properly inaccordance with the applicable regulations of the Company.