Governance Supporting Value Creation and Strategy Execution — Group Governance

Our Directors and Corporate Auditors

Back
row

Independent Corporate Auditor

Front
row

Independent Director

98

Toshihito Aoki

Yoshiko Koizumi

Corporate Auditor (Standing)

Katsuhide Fukuhara

Independent Director

Shinhachiro Emori
Vice President andRepresentative Director

Yuuichi Kitabayashi

Director andSenior Executive Officer

Hideaki Asakura
President andRepresentative Director

Masafumi Fushihara

Director andSenior Executive Officer

Tetsuya Ohashi

Director andSenior Executive Officer

Yoshifumi Taura
Vice President and Director

Kunihiro Ando

Independent Director

Hideyuki Furikado

Corporate Auditor (Standing)Masahiro Karino

Independent Corporate Auditor

Wakako Mitani99

Governance Supporting Value Creation and Strategy Execution — Group Governance

Our Directors and Corporate Auditors
Directors
Masafumi Fushihara

Yuuichi Kitabayashi

Yoshiko Koizumi

Career Summary

Career Summary

Career Summary

Career Summary

Apr. 1978 Joined Onoda Cement Co., Ltd.

Apr. 1978 Joined Nihon Cement Co., Ltd.

Apr. 1972 Registered as a lawyer (Daini Tokyo Bar Association)

Apr. 1975 Toyo Soda Manufacturing Co., Ltd. (now Tosoh
Corporation)

President and Representative Director

Vice President and Representative Director

Apr. 2007 General Manager, Business Promotion Department ofEnvironmental Business Company of Taiheiyo Cement
Corporation

May 2009 General Manager, Kamiiso Plant of Taiheiyo Cement
Corporation
Apr. 2011 Executive Officer and General Manager, Production
Department

May 2009 General Manager, Sales Department of Environmental
Business Company

Apr. 2015 Managing Executive Officer
Jun. 2015 Director, Managing Executive Officer

Apr. 2016 Director, Managing Executive Officer and Senior General
Manager, Cement Business Division

Experience and Knowledge

Apr. 2017 Director and Senior Executive Officer, Senior General
Manager, Cement Business Division
Apr. 2018 President and Representative Director (to present)

Since 2015 Mr. Masafumi Fushihara has engaged in the management of the company as a director and was
appointed as president and representative director in April 2018 after serving as senior general manager of the
Cement Business Division. He possesses a wealth of managerial experience, achievements and management
insights. He continuously strives to increase the corporate value of the group and significantly contributes to its
development, while also identifying key management issues and supervising business execution.

Experience and Knowledge

Since 2013 Mr. Yuuichi Kitabayashi has engaged in the management of the company as a director and was
appointed as a representative director in 2016. He possesses a wealth of managerial experience, achievements
and management insights. In addition, as the officer in charge of the Carbon-Neutral Technology Development
Project Team and the Philippines Renovation Construction Project Team since 2021, he has significantly
contributed to the development of the group. He is effective in the role of a director in striving to continuously
increase the corporate value of the group as he significantly contributes to its development, driving themanagement of our group, while also identifying key management issues and supervising business execution.

Tetsuya Ohashi

Career Summary

Career Summary

Apr. 1980 Joined Onoda Cement Co., Ltd.
Apr. 2011 General Manager, Ofunato Plant of Taiheiyo Cement
Corporation

Apr. 1982 Joined Onoda Cement Co., Ltd.
Oct. 2010 President, Taiheiyo Cement U.S.A., Co., Ltd.

Apr. 2016 Managing Executive Officer

Apr. 2019 Managing Executive Officer

Apr. 2015 Senior General Manager of International Business
Division, Taiheiyo Cement Corporation
Apr. 2016 Executive Officer and Senior General Manager ofInternational Business DivisionJun. 2019 Director, Managing Executive Officer
Jun. 2020 Managing Executive Officer
Apr. 2021 Senior Executive Officer

Experience and Knowledge

Jun. 2021 Director and Senior Executive Officer (to present)

Hideaki Asakura

Yoshifumi Taura

Career Summary

Career Summary

Apr. 1982 Joined Nihon Cement Co., Ltd.
Apr. 2011 President of Nghi Son Cement Company
Apr. 2016 Executive Officer of Taiheiyo Cement Corporation
President of Nghi Son Cement Company
Apr. 2018 Executive Officer of Taiheiyo Cement Corporation General
Manager of Sales Department of Cement Business
Division
Apr. 2019 Managing Executive Officer
Jun. 2019 Director, Managing Executive Officer
Jun. 2020 Managing Executive Officer
Apr. 2022 Senior Executive Officer
Jun. 2022 Director and Senior Executive Officer (to present)

Apr. 1983 Joined Onoda Cement Co., Ltd.
Apr. 2013 General Manager of Sales Department of International
Business Division, Taiheiyo Cement Corporation
Apr. 2017 Executive Officer, General Manager of Sales Department
of International Business Division
Apr. 2019 Managing Executive Officer, Senior General Manager ofInternational Business DivisionJun. 2019 Director, Managing Executive Officer, Senior General
Manager of International Business Division
Aug. 2019 Director, Managing Executive Officer, Senior General Manager of International
Business Division, Chairman, Taiheiyo Cement (China) Investment
Jun. 2020 Managing Executive Officer, Senior General Manager of International
Business Division, Chairman, Taiheiyo Cement (China) Investment

Director and Senior Executive Officer

Since 2022, Mr. Hideaki Asakura has engaged in the management of the company as a director and significantly
contributes to the development of the group as the officer in charge of the corporate planning division and legal
department. He is effective in the role of a director in striving to continuously increase the corporate value of thegroup.

Experience and Knowledge

Apr. 2022 Managing Executive Officer, Senior General Manager ofInternational Business Division
Apr. 2023 Senior Executive Officer, Senior General Manager ofInternational Business DivisionJun. 2023 Director and Senior Executive Officer (to present), Senior
General Manager of International Business Division (to present)

Mr. Yoshifumi Taura was appointed director in 2023 and has made a significant contribution to the developmentof the Group as the officer in charge of overseas operations. He is effective in the role of a director in striving tocontinuously increase the corporate value of the group.

100

Jul. 2023 Director, Integrated Design & Engineering Holdings Co.,
Ltd. (to present)

After working as counsel and partner at law firms, Ms. Yoshiko Koizumi was appointed as a director of thecompany in June 2015. She has a wealth of corporate law experience, and provides precise recommendations
and advice from an objective standpoint, independent of the management team that executes business in the
Board of Directors, and also monitors and supervises overall management.

Jun. 2015 President and Representative Director of Taiyo Vinyl
Corporation

Experience and Knowledge

Jun. 2020 Independent Director of Taiheiyo Cement (to present)

After serving as representative managing director of Tosoh Corporation and president and representative
director of Taiyo Vinyl Corporation, Mr. Shinhachiro Emori was appointed as director of the company in June
2020. He possesses a wealth of experience, achievements and insight as a corporate manager. He provides
precise recommendations and advice from an objective standpoint, independent of the management team that
executes business in the Board of Directors, and also monitors and supervises overall management.

Hideyuki Furikado
Apr. 1977 Joined the Ministry of FinanceJul. 2004 Deputy Director-General of Financial Services Agency

Jul. 2010 President, Policy Research Institute, Ministry of Finance,
Japan

Experience and Knowledge

Dec. 2013 Retired from Ministry of FinanceJun. 2014 Senior Managing Director of Trust Companies Associationof JapanJun. 2021 Independent Director of Taiheiyo Cement (to present)

After serving at the Ministry of Finance and as the managing director of a general incorporated association, Mr.
Furikado was appointed as a director of the company in June 2021. He has extensive administrative experience
as a government official, and provides precise recommendations and advice from an objective standpoint,
independent of the management team that executes business in the Board of Directors, and also monitors andsupervises overall management.

Corporate Auditors

Since 2021, Mr. Tetsuya Ohashi has engaged in the management of the company as a director and significantly
contributes to the development of the group as the officer in charge of the human resources and sustainability
promotion division and the real estate division. He is effective in the role of a director in striving to continuously
increase the corporate value of the group as he significantly contributes to its development while also
identifying key management issues and supervising business execution.

Director and Senior Executive Officer

Experience and Knowledge

Experience and Knowledge

Director and Senior Executive Officer

Apr. 2013 Executive Officer and General Manager, Oita Plant
Apr. 2015 Executive Officer and General Manager, Mineral
Resources Business Department

Since 2016 Mr. Kunihiro Ando has engaged in the management of the company as a director and was appointed
as a vice president and director in 2022. He possesses a wealth of managerial experience, achievements andmanagement insights. In addition, as the officer in charge of the mining and mineral resources businessdivision, he is effective in the role of a director in striving to continuously increase the corporate value of thegroup as he significantly contributes to its development while also identifying key management issues andsupervising business execution.

Jun. 2012 Representative Director and Managing Executive Officerof Tosoh Corporation

Career Summary

Kunihiro Ando

Jun. 2016 Director, Managing Executive Officer
Apr. 2020 Director and Senior Executive Officer
Jun. 2022 Vice President and Director, Assistant to President(to present)

Jun. 2015 Independent Director of Taiheiyo Cement (to present),
Independent Director, Dowa Holdings Co., Ltd. (to present)
Jun. 2016 Independent Corporate Auditor, Sumitomo Bakelite Co., Ltd.
Sep. 2017 Independent Corporate Auditor, Nippon Koei Co., Ltd.

Independent Director

Vice President and Director

Experience and Knowledge

Apr. 2017 Vice President and Representative Director, Head ofCorporate Planning Department
Jun. 2022 Vice President and Representative Director, Assistant to
President (to present)

Jun. 2010 Director, Tosoh Corporation
Jun. 2011 Managing Director of Tosoh Corporation

Apr. 2009 Partner, City-Yuwa Partners (to present)

Jun. 2013 Director, Managing Executive Officer
Apr. 2016 Director and Senior Managing Executive Officer

Apr. 2012 Executive Officer, General Manager of Environmental
Business Department

Independent Director

Jan. 1980 Partner, Masuda and Ejiri Law Office (now Nishimura &Asahi)
Jan. 2008 Counsel, Nishimura & Asahi

Apr. 2013 Managing Executive Officer

Oct. 2010 General Manager, Environmental Business Development
Department

Shinhachiro Emori

Independent Director

Katsuhide Fukuhara

Masahiro Karino

Corporate Auditor (Standing)Experience and Knowledge

Corporate Auditor (Standing)

Career Summary

Career Summary

Apr. 1981 Joined Onoda Cement Co., Ltd.
Apr. 2013 General Manager, Corporate Planning Department of
Taiheiyo Cement Corporation
Apr. 2015 Executive Officer and General Manager, Corporate
Planning Department
Apr. 2017 Managing Executive Officer
Jun. 2017 Director, Managing Executive Officer
Jun. 2020 Managing Executive Officer
Jun. 2021 Corporate Auditor (Standing) (to present)

Apr. 1980 Joined Nihon Cement Co., Ltd.
Apr. 2004 General Manager, Legal Department of Taiheiyo Cement
Corporation
Apr. 2013 Executive Officer, General Manager of Legal Department
Apr. 2016 Managing Executive Officer
Jun. 2016 Director, Managing Executive Officer
Apr. 2019 Director and Senior Executive Officer
Apr. 2022 Directors
Jun. 2022 Corporate Auditor (Standing) (to present)

Mr. Katsuhide Fukuhara possesses a wealth of professional experience and expertise as a director and managing
executive officer with extensive responsibilities in construction materials business and group company
administrative divisions whose work includes advancing our group management. He effectively audits theexecution of duties by directors to continuously improve the corporate value of the group.

Experience and Knowledge

Mr. Masahiro Karino possesses a wealth of professional experience and expertise as a director and managing
executive officer with extensive responsibilities in the human resources, legal and auditing divisions, whose
work includes advancing our group management. He effectively audits the execution of duties by directors tocontinuously improve the corporate value of the group.

Wakako Mitani

Toshihito Aoki

Independent Corporate Auditor

Experience and Knowledge

Independent Corporate Auditor

Career Summary

Career Summary

Apr. 2000 Registered as a lawyer (Daiichi Tokyo Bar Association)
Jul. 2001 Joined Tanabe & Partners
Apr. 2012 Partner, Tanabe & Partners (to present)
Feb. 2018 Independent Corporate Auditor of Taiheiyo Cement (topresent)
Apr. 2023 Vice President, Daiichi Tokyo Bar Association (to present)
Jun. 2023 Independent Corporate Auditor, Seikagaku Corp. (topresent)

Oct. 1983 Joined Tetsuzo Ohta & Co.
(now Ernst & Young ShinNihon LLC)
Aug. 1987 Registered as certified public accountant
Jul. 1999 Partner, Ohta Showa LLC(now Ernst & Young ShinNihon LLC)
Aug. 2014 Retired from ShinNihon LLC(now Ernst & Young ShinNihon LLC)
Jun. 2023 Independent Corporate Auditor of Taiheiyo Cement (topresent)

After working as a partner at a law firm Ms. Wakako Mitani was appointed as a corporate auditor of the company
in February 2018. As a lawyer she has considerable experience, achievements and insights in the field ofcorporate legal affairs, and effectively audits the execution of duties by directors from an independent, objective
and fair standpoint.

Experience and Knowledge

After working as a partner in an auditing firm, Mr. Toshihito Aoki was appointed as an corporate auditor of
the Company in June 2023. As a certified public accountant he has abundant experience, achievements
and insights, including many years of practical experience in corporate accounting. He effectively audits theexecution of duties by directors from an independent, objective and fair standpoint.

101Governance Supporting Value Creation and Strategy Execution — Group Governance

Messages from our Independent Directors

I will support the further
strengthening of global
governance and crisis
management capabilities,
including responses to bribery
and corruption in overseas
operations.
Yoshiko Koizumi
Improvement of Governance Including Overseas Group
Companies

Shinhachiro Emori
Independent Director

Yoshiko Koizumi
Independent Director

Hideyuki Furikado
Independent Director

Based on their careers and expertise, our independent directors shared
their evaluations and recommendations for the Taiheiyo Cement
Group's governance structure and efforts to enhance corporate value.

I believe that improving the governance of our groupcompanies, both in Japan and overseas, is of utmost importancefor the sustainable development of our group. We haveseveral overseas group companies in the U.S. and Asia-Pacificregion, mainly in the Pacific Rim, and making governancework in countries with different histories, cultures, andclimates presents an extraordinary challenge. We must keep
in mind that if a scandal occurs in an overseas group company,
it will come back to the parent company. To build group
governance, a relationship of trust between Headquarters andgroup companies is of the utmost importance, and two-way
communication is extremely important for this purpose. It isessential for us to make steady effort, not just sending unilateral
instructions from the headquarters, but to constantly visit thesites and listen to the voices of the people on the ground,and then correct course if there are any issues. We are a top
company "aiming to be an outstanding leading company" andare always in the spotlight. As our overseas operations continue
to expand we feel that it is time to return once again to the spiritof the "three actuals" principle of "the actual place, the actual
thing and the actual situation," which are the foundations of amanufacturer.

Further Strengthening of Crisis Management
Capabilities

The Group is currently restructuring its overseas businessportfolio with a southward shift, strengthening its operations in
the Philippines, Vietnam and Indonesia, and further investingand expanding its business in the United States. Such global

102

Independent Director

expansion, on the other hand, exposes the company to threats
on a global scale, such as geopolitical and supply chain risks.
Therefore, thorough crisis management is required, as well asa thorough understanding of the risks in countries and regions
around the world. Another important risk management activity
is to work to tackle corruption. Attitudes towards bribery andcustoms vary from country to country and region to region.
Foreign laws, including those related to bribery, are constantly
being revised in each country, and there are limits to how muchthe Legal Department at the headquarters can continue tofollow up on all of these changes. Therefore, we believe that itis necessary to establish a mechanism for the Legal Department
and overseas offices to collaborate with each other by keeping
close contact with each overseas office and building a networkwith local law firms to obtain the latest information at all times.
In my capacity as an international lawyer, I would also liketo make recommendations on how to further strengthen risk
management with an eye to overseas group companies, such as
the establishment of anti-bribery rules.

Expectations of the Taiheiyo Cement GroupMy impression of the company when I was appointed as anindependent director in 2015 remains unchanged. As a leading
company in the domestic cement industry with over 140 yearsof history, we are an exceptionally solid company. On the other
hand, however, I feel that all things are completed only within
a limited industry, there is little interaction with different
industries, and we seem to be stuck in the traditional B to B
mindset. I hope that by looking more closely at the outside
world, we will be able to generate richer ideas and further
enhance the sustainability of our group.

103

Messages from our Independent Directors

Governance Supporting Value Creation and Strategy Execution — Group Governance

I will strive to make proactive
recommendations on board
member remuneration andsuccession planning, as well
as deepen the discussion on
the implementation of thestrategy.
Shinhachiro Emori
The Role of the Nomination and Compensation
Advisory Committee

With respect to the role of the Nomination andCompensation Advisory Committee, I believe it is important towork to improve the objectivity, timeliness, and transparencyof the procedures for determining director nominations andcompensation.
The compensation of directors, excluding independent
directors, currently consists of fixed compensation,
performance-based compensation and share-based
compensation, but eventually a compensation system thatis also linked to mid- to long-term business performanceis desirable. I would like to propose the ideal form ofcompensation for directors and corporate auditors, such as
by explicitly incorporating incentives such as the degree ofachievement of sustainability targets. On the other hand,regarding our succession plan, I believe it is most important
to train management candidates with a long-term concrete
plan. While managers are trained systematically according totheir positions, it is important for top management to consider
and implement their own training methods for selected senior
management positions in terms of transfers and promotions.
For example, I believe that systematic management experienceat group companies, including overseas companies, is aneffective way to develop the skills of employees, especially incompanies that are facing difficult circumstances. I would liketo use my experience in corporate management to vigorously
advocate for the succession plan.

Evaluation of the 23 Medium-Term Management Plan
This fiscal year is the final year of the 23 Medium-Term

104

Hideyuki Furikado

Independent Director

Management Plan, which is the third step toward our "ourfuture vision and direction for the mid-2020s." However,the business environment has changed significantly due tofactors such as a decrease in domestic demand, which wasa precondition, and rising coal prices, making it difficult toachieve management goals.
At the same time, however, it is precisely at times like thisthat we can clearly see how capable and how competitive weare, excluding external factors, and what issues we need toresolve in the future. Already, in our mainstay domestic cementbusiness, we are placing the highest priority on our sales pricepolicy, while in our resource and environmental businesses, weare focusing on developing high value-added core businesses
that do not rely on limestone or cement. As a top manufacturer
specializing in cement, we are expected to contribute to society
while generating stable profits. I expect that there will be athorough review of the 23 Medium-Term Management Plan,
and that the next medium-term plan will be formulated with afocus on the identified issues.

Role as Independent Director

I will advocate for stronger
engagement from a broad
stakeholder perspective anddo our best to build trust
between the two sides.

I believe that the role of independent directors is tosupervise management and to express their frank opinions tomanagement from a position free from internal ties. We also play
an important role in creating an atmosphere in which employees
can speak freely by speaking up on their behalf when they feel
uncomfortable saying things to management. The Company
is promoting workplace diversity and inclusion, including theadvancement of women, and has developed a strategy thatemphasizes diversity. I expect that innovation will be generated
by flexibly absorbing various values and ways of thinking.

Strengthening Engagement with Stakeholders

As a government official, I have been involved in designingsystems such as the Stewardship Code and the Corporate
Governance Code for constructive dialogue between investors
and companies, so I recognize and I understand the importanceof direct dialogue between investors and companies better
than anyone else. I also believe that the effectiveness of theBoard of Directors will be further enhanced by reflecting theperspectives gained through dialogue with investors in the
Board's discussions, and therefore I believe that there should beeven more opportunities for direct dialogue between investors
and management. I myself would like to actively engage indialogue with investors, if possible, to exchange frank opinions
about our management policies and medium- to long-term
growth strategies, and to contribute to the enhancement of ourcorporate value.
We must also always keep in mind that our cementbusiness, which is the foundation of our company, is supported
by various stakeholders, including the local communities
where our plants and mines are located, and can only exist if
we preserve the environment, including biodiversity and water
resources. I believe that the source of our sustainability is to bea trusted and loved company that aims for co-existence and coprosperity with local communities. To this end, I believe that weneed to actively communicate with our stakeholders and makeefforts to make them more aware of our business and our wayof thinking. I believe it is the role of independent directors toencourage the company to strengthen the dissemination ofsuch positive information, such as the effective use of waste

Independent Director

and by-products in cement production as raw materials and fuelfor cement, contributing to the circular economy, and advanced
efforts to achieve carbon neutrality.

Promoting Diversity as a Business Strategy

Today, diversity is respected from the perspective of humancapital, and I believe that diversity is also important in businessstrategy. The Group's business portfolio is very well balanced,
with the domestic cement business, the overseas cementbusiness, and the resource, environment, and construction
materials business each accounting for 1/3 of the Group's total
sales, and one of our strengths is that even if one of thesebusinesses were to hit a problem, our overall losses would be
minimized. Although we ended FY2023 with a severe net loss,
mainly due to the deteriorating profitability of the domestic
cement business, we were able to maintain a positive operating
income, supported by the strong U.S. cement business. Thisis the result of our efforts to diversify our business portfolio,
including overseas expansion, without relying solely on
our mainstay domestic cement business, and this is highly
evaluated.
Furthermore, in addition to diversity, I intend to makerecommendations in the future with a view to diversifying ourbusiness as a hedge against risk. For example, the U.S. cementbusiness, which is mainly focused on the West Coast, should
also look to the central and southern regions to avoid risks suchas political and demand fluctuations. I will contribute to theenhancement of corporate value, utilizing my perspective as
independent director.

105

Governance Supporting Value Creation and Strategy Execution — Group GovernanceCorporate Governance
We are working to strengthen corporate governance in order to achieve sustainable growth and increase corporate
value.

Outline of Our Governance Structure (As of June 29, 2023)

Basic Policy on Corporate Governance

Item

In keeping with the Mission of the Taiheiyo Cement Group,
we established the Basic Policy on Corporate Governance withthe aim of fulfilling our management responsibility towards
all our stakeholders, including shareholders, and helping toachieve sustainable growth while maximizing our corporate
value over the medium to long term. We are working to build asound, transparent, and efficient corporate governance system.

Please refer to our website for the "Taiheiyo Cement
Corporation Basic Policy on Corporate Governance”.

https://www.taiheiyo-cement.co.jp/english/company/pdf/corpgov_01_2112.pdf

Corporate Governance System
the performance their duties. We have set up an internal control
system in the Internal Auditing Department and, by means ofinternal audits, strive to ensure that operations are properly
executed in the company and group companies.
We have also established a Sustainability Management
Committee to promote sustainability. Under that we haveestablished specialized committees on human rights and labor,
environmental management, and quality control, and areworking to enhance our corporate governance.

We are building a system that accurately recognizes andaddresses corporate governance issues, effectiveness andthemes in order to deploy a sustainable business model on a
global scale.
Our management structure is based upon the Board of
Directors and Board of Auditors. We have also introduced
an executive officer system and are endeavoring to separate
management decision-making and monitoring/supervisory
functions from business execution. Our Corporate Auditor’s
Office provides comprehensive support for corporate auditors in

Organizational Structure

Company with a Board of Company Auditors

Chairman of the board

President

No. of directors (No. of female directors)
No. of outside directors included in that figure
No. of independent directors included in that figure

9 (1)
3 (1)
3 (1)

Tenure of a director

1 yearExecutive officer system

Yes

No. of corporate auditors (No. of female corporate auditors)
No. of outside directors included in that figure
No. of independent directors included in that figure

4 (1)
2 (1)
2 (1)

Major Meetings Held
Presence ofof times independent
Committees No. held
officers

Appointment/removal from officeAppointment/
removal from office

AuditsBoard of Auditors
Assistance

15

100%

100%

The Board of Auditors, consisting of two standing corporate auditors and two independent
corporate auditors, fulfills its supervisory and auditing function over management byattending the Board of Directors meetings and other important meetings, questioning
the directors and others about the performance of their duties, and inspecting important
approval documents. In addition, in order to enhance the audits, they visit branches,factories, and group companies, etc., to investigate the status of the business operations.
Also, regular corporate auditor liaison meetings are held for the corporate auditors to
exchange opinions among themselves (and including those in charge of related divisions
when necessary) and share information to build a system that enables fair and appropriate
auditing.

−

The Executive Committee consists of all internal directors and managing executive officers
and makes decisions on important matters other than those that are to be decided by the
Board of Directors in accordance with the Companies Act. A standing corporate auditor
attends the Executive Committee meetings. Although the independent directors andindependent corporate auditors do not attend these meetings, the Corporate Planning
Department reports regularly to the independent directors (weekly in principle), and aliaison meeting is held for independent corporate auditors (weekly in principle), where
the standing corporate auditors report on the details of important meetings such as the
Executive Committee and share information and assist them in the execution of theirduties.

Accounting Auditor

Findings

Nomination and Compensation
Advisory Committee

AuditsBoard ofAuditors

ReportAppointment/removal from office

Report16

Sustainability
Management Committee

Managing Executive Officer
Executive Committee(Review of important matters)
Final decision/instruction/
supervision

Executive Officer
Headquarters, branches, plants,
Research Center (business execution)
Group Companies

106

Consultation

Selection/removal/
supervision

Representative Director

Board ofDirectors

Corporate Auditor’s Office

Board of Directors(Management decision-making
and supervision)

Cooperation

Appointment/
removal from office

AuditsInternal Auditing
Department

For decision-making andbusiness execution tasks
requiring high levels of
expertise, we receive advice
from consulting law firms,
management consultants andother experts.

Executive
Committee

15

Overview

In principle, the Board of Directors meets once a month, and at other times whennecessary, to make decisions on matters required by law and important matters related tothe management of the company. The Board of Directors consists of nine directors, threeof whom are independent directors. In addition, all of the corporate auditors attend theBoard of Directors meetings. 15 meetings were held in FY2023, with 100% attendance bydirectors and corporate auditors.

Corporate Governance System
General Meeting of Stockholders

No. of people etc.

107Corporate Governance

Governance Supporting Value Creation and Strategy Execution — Group Governance

Changes in Governance2004

Management
Organization
Total
NumberDirectors

···

2009

2010

2011

2012

2013

2014

Corporate Auditors

2016

2017

2018

2019

2020

2021

2022

2023

2024

https://www.taiheiyo-cement.co.jp/english/company/pdf/corpgov_01_2112.pdf
22 10

13

8

10

11

1

2 years

13

14

2

7

9

3

Up to 1 year

4 5

Basic Policy on Corporate
GovernanceNomination andCompensation Advisory
Committee
Board Member
Remuneration System(Restricted Stock
Compensation System)

The president proposes prospective directors to the Boardof Directors, from a diverse pool of talent both within andoutside of the company, in accordance with the Basic Policy
on Corporate Governance. The Board of Directors deliberates
and nominates them as prospective directors, who arethen appointed by resolution of the General Meeting of
Shareholders. During the nomination of prospective directors,
the Nomination and Compensation Advisory Committee
deliberates and reports the results of its deliberations to theBoard of Directors.

Nomination and Appointment of Prospective Corporate Auditors
After gaining the approval of the Board of Auditors, the108

Activities of independent directors

The Nomination and Compensation Advisory Committee
met a total of four times in FY2023, with members consistingof three independent directors and one inside director. In
addition, two meetings were held exclusively for a total of
five independent directors, including independent auditors,
to frankly exchange opinions on current issues and thedeliberations of the Board of Directors.

2 womenRatio ofwomen

11 men15.4%

Independence of executives (Jul. 2023)
Ratio ofIndependent
Directors
Internal
directors

4

6

Independent
directors

3

33.3%

Operation of the Board of Directors
Implementation of the Basic Policy

Installation

Restricted Stock
Compensation
SystemOverview of Our Directors and Corporate Auditors
Nomination and Appointment of Prospective Directors

Ratio of women in executive positions (Jul. 2023)

Please see our website for more information about
the Independence Criteria (Appendix 1)

Executive Committee established; executive officer system introduced.

Independent
Directors
Term

2015

and appropriate advice based on their experience and insightsfrom careers in professions such as lawyer, corporate manager,
certified public accountant and government official.

president proposes to the Board of Directors prospective
corporate auditors endowed with the ability to fairly audit theoverall duties of the directors, suitable experience and skills,
and with adequate expertise in financial affairs, accounting
and legal affairs. After deliberation by the Board of Directors,
nominated candidates are appointed by resolution of theGeneral Meeting of Shareholders.

Nomination and Appointment of Prospective
Independent Officers

Prospective independent officers must satisfy the company’s
Independence Criteria for Independent Officers and be
capable of supervising our directors and management froman independent, external standpoint, and of providing proper

In FY2023, the Board of Directors met 15 times to discussand decide on important matters stipulated by law and the
Articles of Incorporation, as well as to supervise the execution ofduties by directors. In order to ensure the efficiency of directors'
duties, directors and executive officers who have been assigned
duties report on the status of execution of their duties. With
respect to management execution, a certain level of authority
is delegated to executive officers, who execute operations
through a policy deployment system in accordance with themedium-term management plan and annual management
policy (President's Policy), and the Board of Directors reviews
the progress of these operations.

 ajor matters discussed at Board of Directors
M
Meetings (FY2023)

Cement sales
price policy

Reports on details and status of sales pricerevisions

Strengthening plant Upgrade of manufacturing facilities andand mining facilities limestone quarry development

Carbon neutrality

Other forms ofharassment

Confirmation of progress on initiatives• Promotion of sustainability management• Acquisition of cement sales business fromother companies• Suspension of cement production and sales
business in China• Alternative sourcing for Russian coal andcoal market trends• Dialogue with institutional investors andshareholders• Promotion of diversity management

Attendance at Board of Directors meetings (FY2023)(Number of meetings attended/number of meetings held)

Full Name

Board of Directors

Masafumi Fushihara

15/15 (100%)

Yuuichi Kitabayashi

15/15 (100%)

Kunihiro Ando

15/15 (100%)

Tetsuya Ohashi

15/15 (100%)

Hideaki Asakura

11/11 (100%)

Yukimasa Nakano

11/11 (100%)

Yoshiko Koizumi

15/15 (100%)

Shinhachiro Emori

15/15 (100%)

Hideyuki Furikado

15/15 (100%)

Katsuhide Fukuhara

15/15 (100%)

Masahiro Karino

11/11 (100%)

Wakako Mitani

15/15 (100%)

Yoshio Fujima

15/15 (100%)

Number of Board of Directors meetings held during the term of office: 15, except for
Mr. Hideaki Asakura and Mr. Yukimasa Nakano, where 11 meetings were held after
they became directors, and Mr. Masahiro Karino, where 11 meetings were held after hebecame a corporate auditor.

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Corporate Governance

Governance Supporting Value Creation and Strategy Execution — Group Governance

Skill matrix

Evaluating the Effectiveness of the Board of Directors

In order to ensure appropriate decision-making and a highlevel of oversight of our business activities, we review theknowledge, expertise, and experience expected of our directors
and officers in conjunction with materiality updates. This
year, it is represented as a six-skill matrix covering corporate
management, production technologies and R&D, sales

marketing, accounting and finance, legal and risk management,
and global business.
We make the most of such advanced knowledge, expertise,and diverse experience to manage our business in order torealize our mission, which is based on sustainable growth andsustainability.

Executive Skill Matrix and Composition of Nomination and Compensation Advisory Committee
Knowledge, expertise and experience

Full Name

Position
President andMasafumi Fushihara Representative
Director

Vice President andYuuichi Kitabayashi Representative
Director

Production

Committee

R&D

8 years
10 years
7 years

Tetsuya Ohashi

Director and Senior
Executive Officer

2 years

Hideaki Asakura

Director and Senior
Executive Officer

1 yearYoshifumi Taura

Director and Senior
Executive Officer—

Yoshiko Koizumi

Director

8 years

Shinhachiro Emori

Director

3 years

Hideyuki Furikado

Director

2 years

5 years

Toshihito Aoki

Corporate Auditor—(Chairperson)

We established the Nomination and Compensation
Advisory Committee in March 2021 with the aim of further
enhancing corporate governance by improving the fairness,transparency, and objectivity of the procedures for nominating
directors and managing executive officers and determining
their compensation. The Committee consists of four directors
appointed by resolution of the Board of Directors, three ofwhom are independent directors. The Committee is chaired byan independent director appointed by resolution of the Boardof Directors.
The Committee deliberates and reports to the Board of
Directors on policies regarding the nomination of directors, theappointment and removal of directors, policies for determining
the compensation of individual directors, and the details of thecompensation of directors.

The System to Promote Sustainability Management

To promote our sustainability management we havecreated a cross-departmental Sustainability Management
Committee, chaired by the president with all board directors
and all managing executive officers as committee members,
under the direct oversight of the Board of Directors. Reportingto the Sustainability Management Committee are sevenspecialized committees for individual subjects, each chairedby the director responsible for that area. The department mostclosely associated with any given issue acts as the secretariat
for the related committee. The Sustainability Management
Committee’s role is to screen important matters concerning
sustainability and the status of activities of specializedcommittees, and review their progress.

Sustainability Management Committee Structure
Board of Directors
President
Sustainability Management Committee Chair:
Secretariat: Sustainability Promotion Department• Organizational
Governance• Fair Business Practices• Human Rights• Labor Practices

All business sites• Human Rights, Environmental andConsumer Issues• Community Involvement and Development

AuditsCorporate Auditor

Activities of the Nomination and Compensation
Advisory Committee

Specialized committees

Wakako Mitani

Activities of the committee

Stakeholder Professional
Communication Committee

1 year• Enhancement of discussion on mediumterm management plan
• Further enhancement of Englishlanguage disclosure

Environmental
Management Committee

Corporate Auditor(Standing)

Challenges
for FY2024

Quality Assurance &Product Liability Committee

Masahiro Karino

Increasing the amount of time fordiscussion at Board of Directors meetings
regarding reports on the status of executionof business, etc.

Company-wide Health &Safety Committee

2 years

Assessment
Results for
FY2023

Information Security
Committee

Auditor
Katsuhide Fukuhara Corporate(Standing)

Enhancement of monitoring and otherreporting on the status of execution ofbusiness

Internal Auditing Department

Vice President andDirector

Challenges
for FY2022

Human Rights &Labor Practices Committee

Kunihiro Ando

Legal
GlobalRiskbusinessmanagement

Results of effectiveness evaluation (FY2023)

Risk Management &Compliance Committee

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Nomination andIndependent Years in Compensation Corporate
Sales Accounting
Advisory
officer
officemanagement technologies Marketing FinanceWe strive to share information among the internal andexternal officers in order for the Board of Directors to supervise
the execution of the business and make appropriate decisions.
Efforts are made to enhance the effectiveness of the Board of
Directors by providing timely and appropriate information to
independent directors and providing them with opportunities
to inspect business sites, including overseas and affiliatecompanies. Furthermore, all directors and corporate auditors fillout a questionnaire to analyze and evaluate the effectivenessof the Board of Directors as a whole, including its composition,
operation, agenda and deliberation status. The Board of
Directors will review the contents of the report and we make
improvements to the structure and operations of the Boardof Directors on the basis of the results, ensuring the overall
effectiveness of our Board of Directors.

Group Companies

111Corporate Governance

Governance Supporting Value Creation and Strategy Execution — Group Governance

CSR Management Committee* meetings (FY2023)
Date
First:

Main Content• Preparation of the integrated report for enhancement of corporate value• Countermeasures against the spread of COVID-19 (review)May 12, 2022

Second: Sep. 27, 2022

• Interim report on the FY2023 activities of the seven specialized committees• Business and human rights

Third:

December 20, 2022

• Report on the status of response to ESG-related surveys• Report on the results of the 2023 employee awareness survey

Fourth:March 28, 2023

• Report on the FY2023 activities of the seven specialized committees• Planning of the FY2024 activities of the seven specialized committees• Revision of CSR Outline to Sustainability Outline* Sustainability Management Committee since FY2024

Activities of independent directors (Number of meetings attended/number of meetings held)
Full Name

Board
Meeting
Attendance

Yoshiko Koizumi

15/15

Shinhachiro Emori

15/15

Hideyuki Furikado

15/15

Details of Contribution
Providing appropriate comments mainly based on her extensive experience as an attorney
and broad insight into corporate legal affairs.

Directors (excluding independent directors)
Fixed compensation

Providing appropriate comments mainly based on his extensive experience and broad
insight as a national public servant.

From the perspective of maintaining and strengthening
stable and long-term business relationships with our business
partners, we acquire and hold shares in such business partners
as cross-shareholdings when it is determined that it willcontribute to the enhancement of our medium- to long-term
corporate value.
Furthermore, the Board of Directors confirms the necessityof such holdings each year by examining the medium- to longterm economic reasonableness and future prospects of eachindividual cross-shareholding, based on whether the purposeof holding the shares is appropriate and whether the benefits
and risks associated with holding the shares are commensuratewith the capital costs.
We do not hold any investment securities where the purpose
is purely investment.

Number of issues and amount reported on balance sheet

Shares other than unlisted
stocksNumber Total amount reportedof Issueson balance sheet(stocks)(million yen)

179

5,806

33

18,910Board Member Remuneration
Determining Board Member Remuneration

In the process for determining the compensation for
directors, the Nomination and Compensation Advisory

Share-based
compensation

Independent Directors, Independent Corporate Auditors
Fixed compensation

Annual Remuneration of Board Members

Remuneration for directors was decided at the General
Meeting of Shareholders on June 29, 2021, and after
said meeting, there are nine directors (of whom three are
independent directors), for whose annual compensation there
is a maximum of 1.2 billion yen (of which 100 million yen is forindependent directors). Included in that is a maximum annual
sum of 200 million yen (200 thousand shares) as transferrestricted share-based compensation.
Remuneration for corporate auditors was decided at theGeneral Meeting of Shareholders on June 29, 2000. Since
the said meeting, there are four corporate auditors, for whosemonthly compensation there is a maximum of 13 million yen.

Total amount of compensation for directors and corporate auditors (FY2023)
Category

Non-listed stocks

Performancebased
compensation* Fixed compensation: from approximately 90% to 45%
Share-based compensation: approximately 10% to 15%
Performance-based compensation: from 0% to approximately 40%

Providing appropriate comments mainly based on his extensive experience and broad
insight as the manager of a business corporation.

Cross-shareholdings

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Composition of Compensation

respects those findings. The decision is then entrusted to
the representative directors, within the scope decided at theGeneral Meeting of Shareholders and determined by ourcompany regulations.
The compensation system for directors (excluding
independent directors) consists of fixed compensation, sharebased compensation and performance-based compensation,
while the compensation system for the independent directors
consists solely of fixed compensation. The compensation system
for auditors also consists solely of fixed compensation.
• Fixed compensation is set according to position.
• Performance-based compensation is calculated by multiplying
profit attributable to owners of parent company shares for the
fiscal year under review by 1% (up to 400 million yen) and acoefficient according to position.
• Share-based compensation is calculated according to position
and issued yearly in the form of share options with restrictions
on transfer. In principle, the restrictions on transfer are
rescinded on the day the director retires.
• The reason for the introduction of the share-based
compensation system and the adoption of profit attributableto owners of parent as an indicator for performance-based
compensation is to promote further value sharing with ourshareholders.

Committee, the majority of which consists of independent
directors and is chaired by an independent director, deliberates
and reports its findings to the Board of Directors, which

Total amount ofcompensation, etc.
(million yen)

Total amount of compensation by type (million yen)

Fixedcompensation

Performance-basedNon-monetarycompensationcompensation, etc.

Number of
officers covered

Directors

510

315

149

45

11

Corporate Auditors

72

72

—

—

5

(independent directors)

(67)

(67)

(—)

(—)

(5)

The above count of directors and corporate auditors who received compensation includes two directors and one corporate auditor who retired or stepped down at the conclusion of the 24th
Ordinary General Meeting of Shareholders held on June 29, 2022.

Internal Control System
We follow the Basic Policy for Building an Internal Control
System to ensure suitable and efficient operations at thecompany and group companies. Our basic approach is toimprove and strengthen systems that are currently in operation,and to review and reappraise essential matters.
In FY2023, we audited five of our offices, 11 domestic groupcompanies, and one overseas group company, identifying areas
for improvement and providing advice and recommendations.

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Governance Supporting Value Creation and Strategy Execution — Group GovernanceRisk Management and Compliance
We manage risks based on our Basic Risk Management Policy with the aim to reduce management uncertainties andachieve management objectives.

• Risk Management and Compliance Promotion System

Basic Risk Management and Compliance Policies
Basic Risk Management Policy and Regulations

Annual action plans for risk management

Instruct

President

ReportCorporate Auditors

ReportReports and requests are handled properly in accordancewith normal company procedures. We have also set up
whistleblower hotlines to receive reports directly without
the need for the usual company procedures. Whistleblowers
have the option of either disclosing their identity, or reporting
anonymously to mitigate any potential psychological

Officer in charge of General Affairs Department• Results* of the Whistleblower Program (FY2023)
Hotline* Subject to risk management: 100 group companies (as of March 31, 2023)

Whistleblower Program

Instruct

Risk management practices and education

ReportIdentify and evaluate risks

General Affairs Department(Employees)

Protect(Employees)

ReportOfficers responsible forrisk management andcompliance
Risk management andcompliance promoters

External hotline

Officers responsible forrisk management andcompliance
Risk management andcompliance promoters

Internal hotline

Group
Companies

Whistleblower

Headquarters, business sites(including research centers)
Plants, branches• Whistleblower Program

Follow-up survey

https://www.taiheiyo-cement.co.jp/english/
csr/risk_management_fr.html

Secretariat:
General Affairs
Department

DetectPlease see our website for more information aboutrisk management and compliance.

Chair: Officer in charge (of General Affairs Department)
Members: Managers at Headquarters and business sites

Illegal actions

quality and safety of our products and services, protect
the lives and safety of our employees and their families,
and earn greater trust from our stakeholders.
2 We create a system to appropriately manage a wide
range of risks associated with our business activities.
3 We promote risk management through a plan-docheck-act cycle.
4 We quickly and appropriately deal with risks as they are
identified.
5 In collaboration with group companies we build asystem for immediately detecting new risks arising fromchanges in our business environment and for quickly
and appropriately dealing with risks at the group level.

• Compliance with our Mission, Business Principles andsocial norms• Maintaining internal systems and rules and ensuring
broad-based awareness of them
• Cooperation with all group companies and promotion of
educational and enlightenment activities• Establishing appropriate responses and policies forwhen problems occur• Timely and appropriate disclosure and communicationof necessary information• Compliance with international standards and rules, andrespect for local cultures and customs• Rejection of illegal and unwarranted demands fromantisocial forces or organizations

Risk Management &Compliance Committee

Evaluation system(Correction system)

Report on status of risk countermeasures

1 We prevent and reduce risks in order to ensure the

Basic Compliance Policy (Summary)

Officer in charge: Officer in chargeof General Affairs Department(Whistleblower Program)

Basic Risk Management Policy

Under our Business Principles we pledge that we will
act in strict compliance with the law and in accordance withsocial mores. Fully aware that compliance is the foundationof Sustainability management, we published the Basic
Compliance Policy and simultaneously created compliance rulesin March 2005. We do not limit our definition of compliance tolegal compliance; our definition includes compliance with thesocial mores from which our laws originate, the mission andbusiness principles of our group, and internal regulations.

Ultimate responsibility: President(Whistleblower Program)In our Business Principles we declare “we will strive toanticipate the changing business environment to assess newopportunities for growth.” We consider risk management
to be a foundation for reducing management uncertainties
and achieving management objectives. Based on our basic
risk management policy, we manage risks that make theachievement of management goals uncertain, such as socialchange, changes in the global environment, natural disasters,
accidents and scandals. In addition, we have established "RiskManagement Regulations" that include emergency responses
to ensure that the "Basic Risk Management Policy" is deployedin specific risk management activities.

Basic Compliance Policy

constraints. We have whistleblower hotlines both internally(Compliance Hotline) and externally (at a law firm) in order tosafeguard the privacy of those submitting reports. Our external
hotline is also available to all employees of group companies
in an effort to strengthen group governance, improve program
effectiveness and reduce the burden on individual companies.
In addition, we created the Whistleblower Program Regulations
so whistleblowers using the program are not subject tounfavorable treatment.

No. of cases

Internal (whistleblower hotlines)

4

External (law firm)1* Reportable cases according to the Whistleblower Program Regulations.
* Taiheiyo Cement Corporation and group companies subject to risk management by the
Risk Management & Compliance Committee are subject to aggregation.

Risk Management and Compliance Promotion Activities
Structure and Operation
Our president has ultimate responsibility for risk
management and compliance promotion. The officer incharge of both areas (officer in charge of the General Affairs
Department) is appointed by the president to preside overand run the Risk Management & Compliance Committee andsystematically promote organized activities.
The committee plays a core role in our risk management

114

and compliance promotion for the entire group. It deploys thepolicy, identifies, evaluates and specifies company-wide risks,
implements risk management activities based on PDCA cycles
and promotes compliance. Moreover, it creates and revises rules
for risk management and compliance, and provides instructions
for advancing the awareness and education of employees. Fourmeetings were held in FY2023.

Identifying, Evaluating andSpecifying Companywide Risks

We collect, evaluate and identify company-wide risks,
including those of group companies, every three years
and conduct an annual review of those risks. We carriedout a company-wide risk review in FY2023. The purpose ofidentifying risks is to "review the risks surrounding the Group
in light of significant changes in the business environmentand risks, identify risks that could have a significant impact on
the achievement and sustainability of the Group's businessplans and targets, and take measures to avoid or reduce such
uncertainties".

115

Risk Management and Compliance

Governance Supporting Value Creation and Strategy Execution — Group Governance• Summary of the Collection, Evaluation and
Identification of Company-wide Risks
Reference: Identifying Risks and Opportunities

P.20

Step 1

Identification of risks that may hinder materiality
initiatives

Step 2

Identification of company-wide risks that could
have a significant impact on uncertainties ingroup management

Step 3

Review company-wide risks

Step 4

Determine company-wide material risks

Specified Company-wide Risks- Risk of increase in the number and severity of natural
disasters and aging facilities and equipment- Risk of business fluctuations in the supply chain- Human resource-related risks

Measures to Reduce the Impact of Risks

FY2023 was the final year of the Risk Management &Compliance Committee leading the implementation of
measures based on the results of the identification andevaluation of company-wide risks that was conducted in
FY2020, and the challenges that were addressed were (1)the establishment of a system to prevent scandals such asaccounting irregularities, and (2) the revision of compliancerelated rules.
We are implementing activities to reduce risk impact
through PDCA cycles.

Examples of Overseas Risk Countermeasures

We have created and regularly revise the Riot/Terrorism
Response Manual. In addition, with regard to high-riskcountries to which our employees are dispatched, we clearlystate the procedure for deciding on local evacuations, havecreated a tool for evaluating the emergency evacuation levelaccording to changes in local situations, and provide training
using the tool. We also list and secure supplies (food, clothes,
hygiene supplies, and medicines), as well as cash and otherresources needed, in the event of evacuation or an emergency
at our overseas business sites.

Emergency Task Force

If an event such as a natural disaster, accident or
misconduct has occurred, the affected business site informs
the general manager of the General Affairs Department. The

116

general manager considers the severity of the event anddetermines if an emergency task force should be establishedor if the response to the event can be delegated to thesite management. Appropriate action is then taken by the
emergency task force or local management.
7 such events were reported in FY2023. Important
information, including how the situation is handled, is reviewed
by the CSR Management Committee (now the Sustainability
Management Committee).
As preparation for responding to natural disasters andaccidents, we also conducted Shake Out earthquake drills thatassumed a large-scale earthquake at each business site, andprovided training for plant staff so they would understand how
to appropriately handle complaints if an accident occurs.

To ensure and maintain the security of information assets
we have established the Basic Information Security Policy andthe Information Security Management Regulations. Under the
management system in accordance with these regulations, weare actively working to maintain information security.
Our president has ultimate responsibility for information
security. The president appoints the officer in charge of
information security (officer in charge of the Corporate Planning
Department), who presides over and runs the Information
Security Committee in order to advance systematic, organizedactivities to promote information security.

Risk Management and Compliance Promotion Training• Information Security Structure

We provide risk management and compliance training for
managers and promoters working at the company’s businesssites and group companies to ensure effective risk management
and compliance. In FY2023, we invited an independent lecturer
to give a talk in November to the managers at our groupcompanies about “Business and Human Rights Required ofCompanies Today” and “Precautions and Points to Actively
Utilize the Whistleblower Hotlines”, which was attended bymanagers from 84 companies. The training program wasconducted via streaming video due to COVID-19 measures.

Compliance Training

We have created and distributed to all our employees, aswell as all those of our main group companies, the Standardsof Conduct (Casebook), which describes specific examples on
how to act in line with the Standards of Conduct. We regularly
revise the Standards of Conduct (Casebook) to reflect the latest
information.
In addition, for all company employees, including those on
loan to group companies, we conduct monthly quiz tests as partof e-learning programs to provide education on the Standardsof Conduct (Casebook) and other materials so they learn how
to act in individual situations. In FY2023, 91.7% of employees
participated in the program.
Please see our website for more information about
our Standards of Conduct [Casebook](in Japanese).

https://www.taiheiyo-cement.co.jp/english/
csr/risk_management_fr.html

Information security
System to Promote Information Security

Sustainability Management Committee(ultimate responsibility for information security: president)
Information Security Committee

Officer in charge of information security
Director of information security
Business sites

Activities to Promote Information Security

In addition to conducting disaster recovery drills basedon hypothetical emergencies and drills for responding tosuspicious e-mails, we have also purchased cyber security
insurance in case of a security incident. We also routinely use a
portal site on our intranet to remind and educate all employees,
and increase awareness of information security.
Further, we conducted drills on how to respond to suspicious
e-mails and conducted a self-diagnostic security survey forgroup companies, and also conducted an infrastructure
security survey for one overseas group company. In addition,
we encouraged group companies to purchase cyber security
insurance, ensure the backing up of critical systems and data,and encryption of their websites. Furthermore, we held an
information department exchange meeting to share and spread
information security awareness with group companies.
No serious incidents related to information security occurredin FY2023.
We will continue our efforts to improve the security levels ofour domestic and overseas group companies.

Group Companies

Information management officer(business site manager)
Information handling officer (operations
department managers/selected individuals)
Please see our website for more information about our
Basic Information Security Policy and Privacy Policy.

https://www.taiheiyo-cement.co.jp/english/
csr/risk_management_fr.html#section05

Risk Management for Intellectual Property
Risk Management for Intellectual Property

To ascertain recent developments and prevent infringementof other companies’ intellectual property rights, we periodicallyshare information on applications filed by other companies
among related divisions, monitor the progress of examinationsof obstructive patents, and conduct various patent surveys.
Regarding other companies' applications that may be
obstructive, we take measures according to the degree of
impact on research and development and our business.
Regarding risk strategies for overseas intellectual property,
we are focusing on ascertaining and sharing information on

the differences from Japan in the legal systems and practices
concerning intellectual property in countries where businessdevelopment is anticipated, and building a support system thatdraws upon external country-specific experts.
In addition, at various in-house training on intellectual
property, we are providing education about the importance ofrespecting the rights of other companies with the same level ofawareness as the protection of their own rights.
To date, we have never been sued for infringing intellectual
property rights, and therefore have not suffered any ensuingbusiness obstacles.

117