[Translation for Reference and Convenience Purposes Only]

Corporate Governance Report
Please note that the following is an unofficial English translation of the Japanese original text of the Corporate
Governance Report of ITOCHU ENEX Co., Ltd., which has been reported to the Tokyo Stock Exchange. ITOCHUENEX Co., Ltd. provides this translation for reference and convenience purposes only and without any warranty as toits accuracy or otherwise. In the event of any discrepancy between this translation and the Japanese original, the lattershall prevail.

Last Updated: June 19, 2024

ITOCHU ENEX Co., Ltd.
Representative:
Tomofumi Yoshida, Representative Director, President and CEO
Contact: Shigemi Kishibe, General Manager, Finance & General Accounting Department,
Tel: +81-3-4233-8025
Stock Code: 8133
https://www.itcenex.com/en/

The corporate governance of ITOCHU ENEX Co., Ltd. (the Company) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other
Basic Information

1. Basic Views
In accordance with the Corporate Philosophy, the Employee Code of Conduct (Be Ethical: Reliability andsincerity, creativity and ingenuity, transparency and integrity) and the Declaration of the Group Code of
Conduct, the Company is continuously strengthening corporate governance in response to the changing
business environment by always concentrating on persistently pursuing compliance as people in the businessworld, focusing on Shareholders returns, ensuring managerial transparency and making decisions more
quickly.
Specifically, as a company with Audit & Supervisory Board Members (or an Audit & Supervisory Board), theCompany ensures that its Audit & Supervisory Board Members will fully implement managerial monitoring
to enhance their monitoring and oversight function and transparency in decision-making.
The Company publishes its Corporate Philosophy, the Employee Code of Conduct, and the Declaration of theGroup Code of Conduct on its website. For details, please refer to:https://www.itcenex.com/en/corporate/mission/[Reasons for Non-compliance with the Principles of the Corporate Governance Code]
The Company complies with all principles set forth in the Corporate Governance Code.
[Disclosure Based on the Principles of the Corporate Governance Code] Updated(Principle 1.4)
- Cross-shareholdings〈Policy on cross-shareholdings〉
The Company has a policy of holding shares of any customer or business partner solely on the condition that1

holding such shares is deemed to have commercial potential in the future and is strategic. The policy is limited
to holdings in which the chances of achieving an investment return are high and the holdings contribute toincreasing the Company’s corporate value.
With regard to such shares we already hold, the Board of Directors examines the reasonability of the holdingof individual shares every year and the continuation or reduction of cross-shareholdings will be properly
determined from the perspective of the chances of achieving the expected investment purpose or whether or
not they are creating economic added-value that may lead to enhancing the Company’s corporate value.
Examination results as of the Board of Directors held on May 16, 2024 are as follows:
The Company specifically examined the cross-holding shares the Company holds (all 5 issues), to determine
whether or not the purpose of the crossholding is appropriate on an individual issue basis, and whether or notbenefits or risks associated with the cross-shareholdings are commensurate with the Company’s capital cost.
As a result, the examination has confirmed that the current cross-shareholdings are appropriate.
〈Standard for exercising voting rights as to cross-shareholdings〉
In exercising voting rights concerning the cross-shareholdings, the Company makes it a rule not to abstain
from voting, so as not to give another party carte blanche in principle. Moreover, the Company makes adecision for and against each proposal tabled after examining individual proposals, not using uniform
standards such as short-term operating results/share prices, but taking the perspective of whether or not it will
help increase the medium- or long-term corporate value of the Company and the companies in which sharesare held, in view of non-financial information such as the business policies, strategies and suchlike of thecompany in which shares are held.
(Principle 1.7)
- Transaction between Related Parties
When the Company engages in transactions involving conflict of interest as defined in the Companies Act
with any of its Directors, the Company is required to obtain a resolution of the Board of Directors approving
the transaction in accordance with the Companies Act and the Board of Directors Regulations.
In addition, the Company ensures the appropriateness of transactions through deliberation and examination ofmaterial transactions or actions with a controlling shareholder and material transactions or actions with arelated party which is not a controlling shareholder by a Special Committee comprising independent persons
including Independent Outside Directors and by the Governance Committee which consists of a majority of
Independent Outside Directors respectively prior to approval by resolution at a Board of Directors’ meeting
attended by Outside Directors and Outside Audit & Supervisory Board Members.
(Supplementary Principle 2.4(1))- Ensuring diversity
The Company Group (the Group) considers that “human resources are the most important asset of a company,”
and its human resources are the core of the Group’s value creation and the driving force behind its sustainablecorporate growth and the enhancement of corporate value. We respect diverse values and aim to be a rewarding
company where human resources can play an active role, and engage in the following human resources
strategies.
(1) Fostering a rewarding work environment in which employees share common goals and contribute fromtheir respective standpoints(2) Securing and providing opportunities where diverse human resources can play active roles regardless ofnationality, gender, and age, etc.
(3) Formulate and promote human resources development plans that respect the individuality and respectiveroles of each employee
By implementing these initiatives, the Company will encourage diversity, especially the active participationof female employees, and will work to foster a corporate climate in which all employees can play an active
part.
[Results and Targets] Percentage of female managers and supervisors
2023: 3% (As of March 31, 2024)
2030: 10％(Target)
2035: 30％(Target)
In addition, several foreign employees play an active part in the Company’s business as of April 2024. There2

is no track record at present with respect to their placement as managers and supervisors, because we are at
the stage where they are being developed as candidates for the management team in the future. The Company
will continue to focus on cultivating human resources who have comprehensive perspectives and willencourage the appointment of foreign nationals to managers and supervisors in light of their job roles andcapabilities.
The ratio of midcareer hires as managers and supervisors is 21%, and the Company will continue to ensure
diversity by promoting individuals to managerial positions in light of their job roles and their skills,
irrespective of whether they are new graduates or midcareer hires.
- Measures to ensure diversity
The Group publishes information on its approaches and activities relating to human capital and diversity in its
Medium-Term Business Plan and Integrated Report and on its website. For details, please refer to:
Medium-Term Business Plan, ENEX2030
https://www.itcenex.com/en/ir/policy/plan/
Integrated Report (ENEX REPORT)
https://www.itcenex.com/en/ir/doc/annual_report/
Sustainability Initiatives
https://www.itcenex.com/en/csr/
Approaches and initiatives for human capital and diversity
https://www.itcenex.com/en/csr/social/human-capital/index.html(Principle 2.6)
- Fulfill function as a Corporate Pension Asset Owner
Although the Company does not participate in a specific corporate pension fund, it has introduced a defined
contribution pension plan to enable employees to build assets. The Company regularly confirms investment
products with the cooperation of the asset management institution. In addition, the Company has been
continuously providing employees with opportunities to understand the status of their investments and receive
education on asset management from the time they join the Company.
(Principle 3.1 (i))- Corporate philosophy, business strategies and business plans
The Company publishes its corporate philosophy on its website. For details, please refer to:https://www.itcenex.com/en/corporate/mission/
In April 2023, the Group announced its new medium-term business plan, ENEX2030, covering the eight-year
period from FY2023 to FY2030.Through the plan, the Group will strive for further growth and transformation
through the provision of a range of energy and services for living and industry, by adopting as its aim “thecreation of a driving force for lifestyles”.
For details, please refer to:https://www.itcenex.com/en/ir/policy/plan/(Principle 3.1 (ii))- Basic views and guidelines on corporate governanceFor the Company’s basic views on Corporate Governance, refer to I-1. Basic Views above.
Under the basic views described above, the Company has established a basic policy for Corporate Governance.
For details, please refer to:https://www.itcenex.com/en/corporate/governance/system/(Principle 3.1 (iii))- Policies and procedures in determining remuneration
For details about policies and procedures for determining the remuneration of Directors, please refer to
Director Remuneration in II-1. of this report.
(Principle 3.1 (iv))- Policies and procedures in the nomination of Director and Audit & Supervisory Board Member candidates

3For details about policies and procedures in the nomination of Director and Audit & Supervisory Board
Member candidates, please refer to Policies and Procedures in the Nomination of Director and Audit &Supervisory Board Member Candidates in II-2 of this report.
(Principle 3.1 (v))- Explanations with respect to individual appointments and nominations of Director and Audit & Supervisory
Board Member candidates
The Company discloses reasons for individual nominations with respect to all Director candidates and Audit& Supervisory Board Member candidates in the Notice of the Ordinary General Meeting of Shareholders. For
the disclosure of the current fiscal year, please refer to:https://www.itcenex.com/en/ir/stockholder/general_meeting(Supplementary Principle 3.1(3))- Sustainability Initiatives, Disclosure based on the Task Force on Climate-Related Financial Disclosures(TCFD)The Company publishes its approach to the implementation of sustainability management on its website andin its Integrated Report.
For details, please refer to:
Sustainability Initiatives
https://www.itcenex.com/en/csr/
Integrated Report (ENEX REPORT)
https://www.itcenex.com/en/ir/doc/annual_report/
Information disclosure based on the TCFD recommendations
https://www.itcenex.com/en/csr/environment/climatechange/- Investment in human capital, etc.
The Company discloses information on its employee training and support system, etc. on its website.
For details, please refer to:https://www.itcenex.com/en/csr/social/diversity/
Integrated Report (ENEX REPORT)
https://www.itcenex.com/en/ir/doc/annual_report/(Supplementary Principle 4.1(1))- Scope of matters delegated to the management
The Company is pressing ahead with the delegation of decision-making on ordinary business execution to the
management (Executive Directors and Executive Officers) to the extent permitted by laws and ordinances.
The Board of Directors not only supervises business execution by the management and makes decisions on
corporate governance, but also makes decisions on the business execution of major quantitative and qualitative
significance. The Company’s Board of Directors Regulations specify the matters to be referred to the board.
(Principle 4.9)
- Criteria for determining the independence of Outside Directors
The Company discloses the criteria for determining the independence of Outside Directors on its website.
For details, please refer to:https://www.itcenex.com/en/corporate/governance/system/(Supplementary Principle 4.10(1))‐ Establishment of Governance Committee
The Company has established a Governance Committee which consists of a majority of Independent Outside
Directors.
The Governance Committee deliberates and examines matters related to the nomination and remuneration of
Directors and Executive Officers and gives advice and recommendations to the Board of Directors as avoluntary consultative body of the Board of Directors.
(Supplementary Principle 4.11(1))- Constitution of the Board of Directors
4

The Company considers that the appropriate number of Directors for effective deliberations of the Board of
Directors is no more than twelve as stipulated in the Article of Incorporation. It nominates inside and outsidehuman resources with distinguished character and knowledge as Director candidates. Particularly with regard
to Outside Directors and Outside Audit & Supervisory Board Members, the Company nominates those withknowledge in specialized areas such as business administration, law and accounting. The Company aspires tohave them involved in the supervision of its management and business execution from different perspectives
so that it will result in the enhancement of the Company’s corporate value.
For a skills matrix showing the knowledge, experience, skills and other qualities of each director, please referto the last page (Reference Material 2) of this report. As stated in Directors in II-1 of this report, the Company's
Independent Outside Directors include persons with management experience in other companies.
(Supplementary Principle 4.11(2))- Directors and Audit & Supervisory Board Members serving as Directors, Audit & Supervisory Board
Members or management at other companies
Important concurrent positions of its Directors and Audit & Supervisory Board Members have been disclosed
in the Notice of the Ordinary General Meeting of Shareholders. For the disclosure of the current fiscal year,
please refer to:https://www.itcenex.com/en/ir/stockholder/general_meeting/(Supplementary Principle 4.11(3))- Evaluation as to the effectiveness of the Board of Directors
The Company asked all Directors and Audit & Supervisory Board Members to give their opinions based on
their own evaluation of the effectiveness of the Board of Directors as a whole in FY2023, including thecomposition, operation status and support structure of the board. By referring to these opinions as well as
evaluation and analysis by third-party evaluation organizations and after deliberation and examination by theGovernance Committee, the Board of Directors conducted the analysis and evaluation regarding theeffectiveness of the Board of Directors.
The evaluation of FY2023, as in the previous fiscal year, indicated that the Company has generally maintained
a high level in each evaluation item, and that the operation of the Board of Directors of the Company wasappropriate overall, securing its effectiveness. On the other hand, opinions and advice were provided on
further enhancing discussions regarding medium- to long-term management strategies and improving themanagement system to encourage further discussions. The Company will draw on these evaluation results toseek to further improve the audit and decision-making functions of the Board of Directors.
(Supplementary Principle 4.14(2))- Training policy
For the purpose of ensuring that the Directors and Audit & Supervisory Board Members fully perform theirfunctions, the Company organizes a prior briefing for Outside Directors and Outside Audit & Supervisory
Board Members concerning matters to be referred to the Board of Directors through the administrative officeof the board, business briefings in individual segments at the time of appointment, inspection tours of domestic
operations , regular social gatherings with the management and other events in an effort to ensure that they
will properly recognize the Company’s business details and managerial issues.
In addition, the Company provides Directors and Audit & Supervisory Board Members with training sessions
held by third party organizations and different workshops and briefings on matters they have requested as
appropriate in order to offer them training opportunities according to their respective backgrounds andassigned duties.
(Principle 5.1)
- Policy for dialogue with Shareholders
Taking the requests and interests of Shareholders into consideration, to the extent reasonable, the senior
management, Directors, including Outside Directors, and Audit & Supervisory Board Members endeavor to
engage in actual dialogue (management meetings) with Shareholders.
The Company sets out its policy on constructive dialogue with Shareholders in its IR Basic Policy. For details,
please refer to: https://www.itcenex.com/en/ir/policy/basicpolicy/(Principle 5.2)
-Actions to enable management that is aware of the cost of capital and the stock price5

In April 2023, the Group announced the ENEX2030 medium-term business plan covering theeight-year period from fiscal 2023 to 2030. The plan includes the slogan, "the creation of adriving force for lifestyles." The plan also includes targets for financial indicators, specificallynet profit, substantive operating cash flows, ROE and new strategic investments. The target for
ROE, an indicator of capital efficiency, is 9.0% or higher in FY2030. The target for new
strategic investments to expand revenue through the Group’s growth strategy is 210 billion yen
over the eight years.
The Group ’s ROE was 8.8% at the end of FY2023. The Group will continue with its
management practices with an awareness of the cost of capital to ensure it exceeds this target.
The Group will disclose its management policies and strategies in its medium-term businessplans and integrated reports. It will also explain the policies and strategies in detail atshareholders’ meetings and results presentations to provide shareholders and investors with athorough understanding of them. In this way, the Group aims to continue to increase corporate
value and shareholder value.
For details, please refer to: https://www.itcenex.com/en/ir/policy/plan/index.html

2. Capital Structure
Foreign Shareholding Ratio

10% or more and less than 20%[Status of Major Shareholders] Updated
Name / Company Name

Number of Shares Owned

Percentage (%)

ITOCHU Corporation

60,977,809

53.97

The Master Trust Bank of Japan, Ltd. (trust account)

7,932,500

7.02

Custody Bank of Japan, Ltd. (trust account)

4,785,423

4.24

Enex Fund

3,035,389

2.69

Nippon Life Insurance Company

1,542,284

1.37

Itochu Enex Employee Shareholding Association

1,417,343

1.25

THE BANK OF NEW YORK MELLON 140042

801,888

0.71

STATE STREET BANK AND TRUST COMPANY
505001

771,470

0.68

STATE STREET BANK AND TRUST COMPANY
505223760,791

0.67

NICHIREKI CO., LTD.

630,300

0.56

Controlling Shareholder (except for Parent
Company)

N/A

Parent Company

ITOCHU Corporation (Shares listed in Tokyo; Code: 8001)

Supplementary Explanation Updated
Status of Major Shareholders mentioned above is as of the end of March 2024.
Stock ownership percentage described in the Status of Major Shareholders is calculated excluding treasury
stock of 3,896,264 shares.
63. Corporate Attributes Updated
Listed Stock Market and Market Section
Fiscal Year-End
Type of Business
Number of Employees (consolidated) as of the
End of the Previous Fiscal YearSales (consolidated) as of the End of thePrevious Fiscal Year
Number of Consolidated Subsidiaries as of the
End of the Previous Fiscal YearTokyo Stock Exchange
March
Wholesale Trade

Prime Market

1,000 or more
¥100 billion or more, but less than ¥1 trillion
From 10 to less than 50

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder
As is the case with the conditions for general transactions, the Company determines the conditions fortransactions or actions with ITOCHU Corporation, which is its parent company and controlling shareholder,in consideration of market prices.
For material transactions for which it is impossible to refer to market prices, the Company ensures theappropriateness of transactions through deliberation and examination by a Special Committee composed ofindependent persons including Independent Outside Directors prior to approval by resolution at a Board of
Directors’ meeting attended by Outside Directors and Outside Audit & Supervisory Board Members.
5. Other Special Circumstances which may have Material Impact on Corporate Governance Updated
As the parent company, ITOCHU Corporation owns 53.97% of the voting rights of the Company. The
Company is a consolidated subsidiary of ITOCHU Corporation and a core company in domestic sales of
petroleum products and in the business of imports to and exports from Japan in the ITOCHU Group. As asignificant business partner, the Company exchanges information and personnel concerning transactions ofpetroleum and other products and domestic and international crude oil and petroleum product market trends,
and pushes ahead with business activities concerning electric power, environmental business, mobility related
business and global projects. The degree of dependence of the Company’s business transactions on the parent
company is low, and most of them are transactions with ordinary companies and consumers. The Company
understands that its business is not constrained by the parent company and that it is capable of making
independent managerial decisions while retaining its own initiative and autonomy. The Company accepts
human resources dispatched from ITOCHU Corporation and its corporate group. However, they do not hinder
the Company in making independent managerial decisions, and the Company maintains its independence,
given that three Outside Directors are designated as Independent Directors and diverse opinions can bereflected on deliberations at the Board of Directors.

II. Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Organization Form

Company with Audit & Supervisory Board[Directors] Updated
Maximum Number of Directors Stipulated in
Articles of Incorporation

12
7

Term of Office for Directors Stipulated in
Articles of Incorporation
Chairperson of the Board
Number of Directors
Election of Outside Directors
Number of Outside Directors
Number of Independent Directors

1 yearPresident / CEO
7
Elected3
3

Outside Directors’ Relationship with the Company (1) Updated
Name

Attributeab

Relationship with the Company*
c
d
e
f
g
h
i

j

k

Ichiro Saeki
Attorney
Takuya Morikawa
From another company
Chie Sato
From another company*
Categories for “Relationship with the Company”*“○” when the Director presently falls or has recently fallen under the category; “△” when the Director fell
under the category in the past*“●” when a close relative of the director presently falls or has recently fallen under the category; “▲” whena close relative of the Director fell under the category in the pasta. Executive of the listed company or its subsidiaries
b. Non-executive Director or Executive of a parent company of the listed company
c. Executive of a fellow subsidiary company of the listed company
d. A party whose major client or supplier is the listed company or an Executive thereof
e. Major client or supplier of the listed company or an Executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration orother property from the listed company besides compensation as a Director/Audit & Supervisory Board
Memberg. Major shareholder of the listed company (or an Executive of the said major shareholder if the shareholder
is a legal entity)
h. Executive of a client or supplier company of the listed company (which does not correspond to any of d, e,or f) (the Director himself/herself only)
i. Executive of a company, between which and the listed company Outside Directors/Audit & Supervisory
Board Members are mutually appointed (the Director himself/herself only)
j. Executive of a company or organization that receives a donation from the listed company (the Director
himself/herself only)
k. Others
Outside Directors’ Relationship with the Company (2) Updated

Name

Designationas
Independent
Director

Supplementary Explanation of
the Applicable Relationship
Attorney from another company,
and University faculty

Ichiro Saeki○

April 1975: Joined The Nippon
Fudosan Bank (currently, Aozora
Bank, Ltd.)
8

Reasons for Appointment
Ichiro Saeki has specialized knowledge
in his capacity as an attorney and auniversity professor, and extensive
experience with corporate legal affairs.
He also acquired broad knowledge ofbanking and finance during his tenure at
the Nippon Credit Bank (currently,

April 1995: Registered with theDaini Tokyo Bar Association as
an attorney-at-law
March 2004: Established Shi-GoRoku Law Office as
Representative Attorney (to date)June 2005: Auditor, THE
SHINKUMI FEDERATIONBANK (to date)June 2016: Outside Director andan Independent Director of theCompany (to date)August 2018: Audit &Supervisory
Board Member, Movable Trade
Networks Co.,Ltd. (to date)
April 2020: Emeritus Professor,
Aoyama Gakuin University (todate)
From another company

TakuyaMorikawa○

April 1982: Joined KOKUYO
Co., Ltd.
June 2005: Director,
KOKUYO Co., Ltd. andRepresentative Director andPresident, KOKUYO S&T
Co., Ltd.
April 2015: Director, Group
Senior Executive Officer,
Managing Officer ofInternational Business
Division, KOKUYO Co., Ltd.
January 2019: Director,
Executive Vice President andSpecial Officer, KOKUYO
Co., Ltd.
June 2020: Outside Director,
ASANUMA CORPORATION(to date)
April 2021: Corporate
Adviser, KOKUYO Co., Ltd.
April 2021: Representative
Director and President,
wakiprintpia Co., Ltd.
June 2022: Outside Directorof the Company (appointed as
an independent director (todate))
April 2024: Representative
Director and President,
NETSQUARE CO., Ltd. (to date)Aozora Bank, Ltd.). He has been
nominated to another term as a candidate
for Outside Director because theCompany believes that he will suitably
provide advice for the management of
the Company and will contribute to theproper oversight of the execution of theCompany’s business based on his deep
knowledge of banking and finance andexpert point of view he has developed
throughout his career.
The Company believes that he meets theStandards for Independence stipulatedby the Financial Instruments Exchange
and by the Company.

Takuya Morikawa has long engaged in awide range of business activities in thestationery and office equipment industry,including business strategy, overseas
business, and the launch of new
businesses, etc. Through these activities,
he has gained business experience and awealth of knowledge on business
management. He has been nominated asa candidate for Outside Director because
the Company believes that he will
suitably provide advice for the
management of the Company and willcontribute to the proper oversight of theexecution of the Company’s businessbased on the experiences and abundant
perspectives he has developed
throughout his career.
The Company believes that he meets theStandards for Independence stipulatedby the Financial Instruments Exchange
and by the Company.

From another company
Chie Sato○

April 1992: Joined Japan
Broadcasting Corporation
9

Chie Sato has written numerous books
relating to US graduate schoolAugust 2001: Joined Boston
Consulting Group K.K. (currently,
Boston Consulting Group G.K.)
April 2014: Member of theProfessional Graduate Business
School Certified Evaluation andAccreditation Committee, The
Japan University Accreditation
Association (to date)
April 2016: Tokyo Broadcasting
System Television (TBS) Program
Practice Council Member
June 2017: Outside Director,
Nihon Unisys Ltd. (currently,
BIPROGY Inc.) (to date)June 2024: Outside Director of
the Company (appointed as
an independent director (todate))

Voluntary Establishment of Committee(s)Corresponding to Nomination Committee orRemuneration Committee

membership as a writer and works as abusiness strategy consultant at a major
consulting company. Through these
activities, she has gained a wealth ofknowledge on business management.
She has been nominated as a candidate
for Outside Director because theCompany believes that she will offer
advice on its management and will help
properly supervise its execution ofbusiness.
The Company believes that he meets theStandards for Independence stipulatedby the Financial Instruments Exchange
and by the Company.

Established

Committee’s Name, Composition, and Attributes of Chairperson Updated
Voluntarily Established Committee
Corresponding to Nomination
Committee

Voluntarily Established Committee
Corresponding to Remuneration
Committee

Governance Committee

Governance Committee

All Committee Members

44

Full-time Members

00Inside Directors

11Outside Directors

33Outside Experts

0

0

Other

0

0

Outside Director

Outside Director

Committee’s Name

Chairperson

Supplementary Explanation Updated
The Company's Governance Committee fulfils the role of voluntarily established independent Nomination
Committee and Remuneration Committee.
The Governance Committee is chaired by an Outside Director and composed of three Outside Directors andone internally promoted Director, making a total of four members. Members are elected based on nominationsof the Board of Directors.
In FY2023, the Governance Committee met 12 times to deliberate on and examine matters such as thenomination and remuneration of Directors and Executive Officers and the assessment of the effectiveness of
the Board of Directors, with the attendance of all the Committee Members.
10

[Audit & Supervisory Board Members]
Establishment of Audit & Supervisory Board
Maximum Number of Audit & Supervisory
Board Members Stipulated in Articles ofIncorporation
Number of Audit & Supervisory Board Members

Established5
4

Cooperation among Audit & Supervisory Board Members, Accounting Auditors and Internal Audit
Departments Updated
Cooperation among Audit & Supervisory Board Members, Accounting Auditors and internal audit
departments (the Audit Department) is stated in 2. Matters on Functions of Business Execution, Auditing,Oversight, Nomination and Remuneration Decisions.
Appointment of Outside Audit & Supervisory Board
Members
Number of Outside Audit & Supervisory Board
Members
Number of Independent Audit & Supervisory Board
Members

Appointed
33Outside Audit & Supervisory Board Members’ Relationship with the Company (1) Updated
Name

Attributeab

Relationship with the Company*
c
d e
f
g h
i
j

k

l

m

Shozo Tokuda
CPA
Masako Iwamoto
Attorney
Sonoko Kajiyama
CPA*
Categories for “Relationship with the Company”*“○” when the Audit & Supervisory Board Member presently falls or has recently fallen under the category;“△” when the Audit & Supervisory Board Member fell under the category in the past*“●” when a close relative of the Audit & Supervisory Board Member presently falls or has recently fallen
under the category; “▲” when a close relative of the Audit & Supervisory Board Member fell under the
category in the pasta. Executive of the listed company or its subsidiaryb. Non-Executive Director or accounting advisor of the listed company or its subsidiaries
c. Non-Executive Director or Executive of a parent company of the listed company
d. Audit & Supervisory Board Member of a parent company of the listed company
e. Executive of a fellow subsidiary company of the listed companyf.
A party whose major client or supplier is the listed company or an executive thereof
g. Major client or supplier of the listed company or an executive thereofh. Consultant, accountant or legal professional who receives a large amount of monetary consideration orother property from the listed company besides compensation as an Audit & Supervisory Board Memberi.
Major shareholder of the listed company (or an Executive of the said major shareholder if the shareholder
is a legal entity)j.
Executive of a client or supplier company of the listed company (which does not correspond to any of f, g,or h) (the Audit & Supervisory Board Member himself/herself only)
k. Executive of a company, between which and the listed company Outside Directors/Audit & Supervisory
Board Members are mutually appointed (the Audit & Supervisory Board Member himself/herself only)

11

l.
m.

Executive of a company or organization that receives a donation from the listed company (the Audit &Supervisory Board Member himself/herself only)
Others

Outside Audit & Supervisory Board Members’ Relationship with the Company (2) Updated

Name

Designationas
Independent
Directors

Supplementary Explanation of
the Applicable Relationship○

CPA
April 1981: Joined Asahi & Co.
(Currently, KPMG AZSA LLC)
August 1985: Registered as acertified public accountant
June 2017: Outside corporate
auditor of Mitsui Chemicals, Inc.
June 2017: Audit & Supervisory
Board Member of the Company(appointed as an independent
director (to date))

MasakoIwamoto○Attorney
April 1998: Registered as an
attorney-at-law and joined thethen Tokyo Aoyama Aoki Law
Office (Currently, Baker &McKenzie) June 2002: Founded
Iwamoto Law Office and became
Managing Partner (to date)June 2020: Outside Director,
ACHILLES CORPORATION
June 2021: Audit & Supervisory
Board Member of the Company(elected as independent officer (todate)
June 2022: Outside
Director/Audit and Supervisory
Committee Member, ACHILLESCORPORATION (to date)
May 2024: Outside corporate
auditor of HOKUTO, Inc. (todate)

SonokoKajiyama○

CPA

Shozo Tokuda

12

Reasons for Appointment
Shozo Tokuda has specialized
knowledge in his capacity as acertified public accountant. He alsoacquired broad knowledge ofcorporate accounting. He has been
nominated as an Outside Audit &Supervisory Board Member
because the Company believes that
he will suitably provide advice forthe management of the Company
and will contribute to the proper
auditing of the execution of theCompany’s business from deep
knowledge of corporate accounting
and expert point of view he hasdeveloped throughout his career.
The Company believes that hemeets the Standards for
Independence stipulated by the
Financial Instruments Exchange
and by the Company.
Masako Iwamoto has specialized
knowledge and extensive
experience in corporate legal
affairs. She has also acquired deep
insight during her tenure as an
outside officer of Achilles
Corporation. She has been
nominated as a candidate for
Outside Audit & Supervisory Board
Member because the Company
believes that she will suitably
provide advice for the managementof the Company and will contributeto the proper auditing of theexecution of the Company’sbusiness from an objective andexpert point of view.
The Company believes that shemeets the Standards for
Independence stipulated by the
Financial Instruments Exchange
and by the Company.
Sonoko Kajiyama has specialized
knowledge in her capacity as a

April 1991: Joined Fujitsu
Limited
October 2002: Joined Asahi &Co. (currently, KPMG AZSA
LLC)
June 2020: Internal Audit
Department, Internal Audit China
Senior Director, Olympus
Corporation
March 2024: Audit &Supervisory Board Member,
McDonald’s Holdings
Company (Japan), Ltd. (todate) and Audit &Supervisory Board Member,
McDonald’s Company(Japan), Ltd. (to date)June 2024: Audit & Supervisory
Board Member of the Company(appointed as an independent
director (to date))

certified public accountant andextensive experience as an auditor.
She also acquired broad knowledge
during her tenure at a major
auditing firm and in the Internal
Audit Department of a global
company.
She has been nominated as an
Outside Audit & Supervisory Board
Member because the Company
believes that she will advise its
management and ensure the proper
supervision and auditing of its
execution of business from an
objective and specialist viewpoint.
The Company believes that shemeets the Standards for
Independence stipulated by the
Financial Instruments Exchange
and by the Company.

[Independent Directors/Audit & Supervisory Board Members] Updated
Number of Independent Directors/Audit &Supervisory Board Members

6

Matters relating to Independent Directors/Audit & Supervisory Board Members
As mentioned in Disclosure Based on the Principles of the Corporate Governance Code in Ⅰ-1 of thisreport, the Company has the standards for the independence of Outside Directors and Audit & Supervisory
Board Members formulated by its Board of Directors. The Company designates all Outside Directors who
have satisfied the Independent Director’s requirement as Independent Directors based on the criteria for
determining the independence of Outside Directors set forth by the Tokyo Stock Exchange, Inc. and otherfinancial exchanges in Japan in addition to the Company’s criteria as above.
[Incentives]
Implementation Status of Measures related toIncentive Granted to Directors

IntroductionofaPerformance-linked

stock

Remuneration plan

Supplementary Explanation
As medium- to long-term performance-linked remuneration, the Company provides its Executive Directors
with points according to net profit under the Medium-Term Business Plan, the titles of the Directors, and thenumber of months in their term of office. At the time of their retirement, they acquire a number of theCompany’s common shares commensurate with the total number of points granted. The number of sharesprovided is the product of multiplying the number of points given by the above program by 1.0. This
remuneration program is adopted to motivate program participants to contribute to the improvement of theCompany’s medium- to long-term performance and the increase of its corporate value.
Recipients of Stock Options13

Supplementary Explanation
None[Director Remuneration]
Status of Disclosure of Individual Directors’
Remuneration

No Individual Disclosure

Supplementary Explanation Updated
Director/Audit & Supervisory Board Member remuneration for the fiscal year ended March 31, 2024 (Unit:million yen)

Director

Total
remuneration,
etc.
454

Base
remuneration

Bonus

Stock-based
remuneration

Number of
persons

256

155

43

8

(Outside Director)

(34)

(34)

(-)

(-)

(3)

Audit & Supervisory
Board Member(Outside Audit &Supervisory Board
Member)
Total

78

78

-

-

4

(50)

(50)

(-)

(-)

(3)

532

334

155

43

12

(84)

(84)

(-)

(-)

(6)

(Outside Director andOutside Audit &Supervisory Board
Member)- Directors' remuneration is structured differently depending on whether Directors are Executive or NonExecutive.
The remuneration for Executive Directors is composed of base remuneration, which is fixed remuneration, andbonuses and stock remuneration, which are performance-linked remuneration.
Remuneration for Non-Executive Directors comprises only base remuneration, with no bonuses or stock
remuneration provided, from the perspective of their roles and independence.
Regarding the total amount of base remuneration and bonuses, the 52nd Ordinary General Meeting of
Shareholders held on June 21, 2012 passed a resolution setting a cash remuneration limit of no more than 500
million yen per year.
As for stock remuneration, the 63rd Ordinary General Meeting of Shareholders held on June 14, 2023 passed
a resolution setting the maximum amount of the Company’s contribution to the trust formed by the Company
during the trust period (two years: from October 2023 to September 2025) as funds for acquiring the Company’s
shares at 210 million yen and the total number of points given by the Company to its Directors at up to 135,000.
- The remuneration for Audit & Supervisory Board Members is determined through consultation among Audit& Supervisory Board Members and comprises only base remuneration, with no bonuses or stock remuneration
provided.
As for the maximum amount of remuneration, a resolution setting the annual amount at no more than 100
million yen was passed at the 61st Ordinary General Meeting of Shareholders held on June 16, 2021.
- The total remuneration, etc. of Tomofumi Yoshida, the Director of the Company, is 140 million yen (including,by type of remuneration, etc., base remuneration of 70 million yen, bonuses of 53 million yen, and stock
remuneration of 18 million yen). The total remuneration, etc. of Kenji Okada, the Director of the Company, is14136 million yen (including, by type of remuneration, etc., base remuneration of 67 million yen, bonuses of 51
million yen, and stock remuneration of 17 million yen).
Policy on Determining Remuneration Amounts
and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods Updated
The Governance Committee has been consulted about the policy on determining remuneration for eachindividual Director. On receiving the response from the Committee, the Board of Directors passed a resolution
on that policy at a meeting held on February 25, 2021. It also adopted a resolution to partly revise thecomposition percentage of remuneration at its meeting on April 28, 2023.
(1) Basic policy
Remuneration for Directors of the Company is designed to attract talented human resources with the ability
to implement the Company's Corporate Philosophy and to motivate them to contribute to the sustained
improvement of its corporate value. It is the Company's basic policy to determine remuneration paid to each
Director at an appropriate level based on his/her position and duties.
(2) Remuneration system for Directors- Remuneration for Executive Directors comprises fixed basic remuneration (monthly remuneration) andperformance-linked remuneration that fluctuates according to performance.
-Remuneration for Non-Executive Directors comprises only fixed basic remuneration (monthly remuneration)from the perspective of their roles and independence.
[Breakdown of remuneration of Executive Directors]- The composition ratio for the remuneration of Executive Directors (Chairman and President / CEO) is 57%
fixed basic remuneration (cash), 29% bonuses as performance-linked remuneration (cash), and 14% stock as
performance-linked remuneration (non-cash).
*The above ratio represents remuneration when 100% of all targets for performance-linked remuneration arereached.
- The composition ratio for the remuneration of Executive Directors (excluding Chairman and President /CEO) is 63% fixed basic remuneration (cash), 32% bonuses as performance-linked remuneration (cash), and
5% stock as performance-linked remuneration (non-cash).
*The above ratio represents remuneration when 100% of all targets for performance-linked remuneration arereached.
[Details of remuneration]- Details of base remuneration are as follows.
- For the base remuneration, the Company determines the fixed monthly amount according to the position andresponsibilities of each Director, taking into account the standards of other companies based on the researchof specialized external institutions.
- Details of bonuses are as follows.
- The Company pays performance-linked bonuses to Executive Directors at certain times of each year as ashort-term performance pay based on a performance indicator and the level of goal achievement in the year.
The performance indicator that is the basis for bonuses is the level of achievement of the target profit
attributable to the Company's Shareholders (consolidated) each year. The Company determines the amountsof bonuses by multiplying the base remuneration by a certain coefficient according to the levels of achievementof company-wide performance, division performance, and section performance and a qualitative assessment.
* The comprehensive qualitative assessment is performed by the Representative Director and President / CEO,taking into account the level of the goal achievement of each Executive Director (progress in addressing issues
in the areas of their responsibility, development of management executives, thoroughness of legal compliance,etc.).
- Details of stock remuneration are as follows.
15

- As medium- to long-term performance-linked remuneration, Executive Directors are provided with points
according to net profit under the Medium-Term Business Plan, the titles of the Directors, and the number ofmonths in their term of office. At the time of their retirement, they acquire a number of the Company’s commonshares commensurate with the total number of points granted.
The number of shares provided is the product of multiplying the number of points given by the above programby 1.0.
- This remuneration program is adopted to motivate Directors to contribute to the improvement of theCompany's medium- to long-term performance and the increase of its corporate value.
*Stock remuneration is adopted to motivate Directors to contribute to the improvement of the Company's
medium- to long-term performance and the increase of its corporate value.
- Of the above remuneration, the bonuses and stock remuneration are linked to the Company's businessperformance, and net profit (consolidated) attributable to the Company's Shareholders has been adopted as theindicator for evaluating the overall business performance of the Company. It was adopted to ensure thesimplicity of the indicator, consistency with the numerical targets related to the Company's business
management (or with the quantitative targets set in the medium-term business plan, which apply to theperformance-linked stock remuneration), and in light of the trends of other companies. The consolidated net
profit attributable to the Company's Shareholders for FY2023 is 13,887 million yen.
(3) Policy, etc. for determining the remuneration of individuals- To flexibly determine the amount of remuneration for individuals, Tomofumi Yoshida, the Representative
Director President / CEO of the Company, is delegated to determine specifics based on standards establishedin advance.
- Changes made to the above composition of remuneration, basic remuneration, and bonuses require approvalby the Board of Directors after consultation with the Governance Committee. Changes in the stock
remuneration require approval by the Board of Directors or at a General Meeting of Shareholders, after
consultation with the Governance Committee.
- The Company has established a system in which the Governance Committee receives one or more reports ayear on the overall distribution of remuneration for individual Directors, ensures that such activities are
conducted appropriately in line with this policy, and guarantees their objectivity, fairness, and transparency.
In addition, the Board of Directors receives the results of deliberations and examinations, and reports on theappropriate remuneration of individual Directors in line with this policy from the Governance Committee, andthe Company believes that the activities of the Board of Directors are also in line with this policy.
[Support System for Outside Directors and/or Audit & Supervisory Board Members] Updated
The Company provides its Outside Directors and Outside Audit & Supervisory Board Members with various
forms of support necessary for the performance of their duties. They include materials distributed to them by
the administrative office for the Board of Directors regarding the proposals to be discussed by the Board, andthe administrative office provides them with explanations prior to deliberations as necessary. Administrative
departments such as the Corporate Planning Department, the Human Resources & General Affairs Department,
the Finance & General Accounting Department, the Legal & Risk Management Department and the Subsidiaries& Associated Companies Management Department provide them with necessary corporate information as
appropriate. Outside Audit & Supervisory Board Members are also provided with the necessary support for thefulfillment of their duties through assistants to Audit & Supervisory Board Members who concurrently holdpositions in the Audit Department. On the aforementioned occasions of reporting and reviews, the Outside
Directors and Outside Audit & Supervisory Board Members undertake collaboration by making appropriate
comments and exchanging opinions.

2. Matters on Functions of Business Execution, Auditing and Supervision, Nomination andRemuneration Decisions (Overview of Current Corporate Governance System) Updated[Current Structure（As of June 19, 2024）]
The Company has a Board of Directors and an Audit & Supervisory Board.
1. Board of Directors
16

- The Board of Directors consists of a total of 7 members (1 female Director, and the ratio of Outside Directors
42.9%), 4 of whom are Internal Directors and 3 of whom are Outside Directors. In accordance with laws andordinances and the Company’s Articles of Incorporation, regulations for Directors and other internal rules, theboard makes decisions on important matters and oversight the Directors’ business execution.
- In FY2023, a total of 14 meetings of the Board of Directors were held. Major matters discussed included the
medium-term business plan, investment projects of high importance, internal control, and corporate
governance. Each Director’s attendance at Board of Directors is disclosed in the Notice of the 64th Ordinary
General Meeting of Shareholders (including the attached Business Report).
For the disclosure during the fiscal year, please refer to:https://www.itcenex.com/en/ir/stockholder/general_meeting/- The Directors execute the duties assigned to them in accordance with the roles determined by the Board of
Directors and with laws, ordinances, the Articles of Incorporation and internal rules.
2. Executive Officer System- For strengthening the Board of Directors’ decision-making function and oversight function and for increasing
efficiency in business execution, the Company adopts the Executive Officer system. Following decisions madeby the board, Executive Officers perform their respective duties as delegated by the board and theRepresentative Director. The Company had a total of 12 Executive Officers, including those additionallyserving as Directors.
3. Special Committee, Governance Committee- For the purposes of strengthening the Board of Directors’ oversight function and increasing the transparencyof the decision-making process, the Governance Committee was established as a standing committee as avoluntary consultative body of the Board of Directors. In addition, a Special Committee composed ofindependent persons including Independent Outside Directors was established on October 29, 2021 as astanding committee as a new voluntary consultative body of the Board of Directors. The functions andcomposition of each committee are as follows.
- Special Committee(Functions) Deliberation and examination of material transactions or actions involving conflicts of interest
with a controlling shareholder or a minority shareholder(Composition) A total of 6 members: 6 Independent Directors/Auditors (3 Outside Directors, 3 Outside Audit& Supervisory Board Members)- In FY2023, the Special Committee met 7 times and confirmed the status of transactions and activities withthe controlling shareholder, with the attendance of all the Committee Members.
- Governance Committee[Functions] Deliberation and examination of the nomination and remuneration of Directors and Executive
Officers, material transactions or actions with a related party (excluding a controlling shareholder) and othermatters relating to corporate governance.
[Composition] A total of 4 members: 3 Independent Directors (3 Outside Directors), and 1 Internal Director- In FY2023, the Governance Committee met 12 times to deliberate on and examine matters such as thenomination and remuneration of Directors and Executive Officers and the assessment of the effectiveness of
the Board of Directors, with the attendance of all the Committee Members.
4. Management Advisory Conference and various committees- The Company has established the Management Advisory Conference and several committees: the Risk
Management Committee, the Internal Control Committee and the Disclosure Committee and the Sustainability
Committee. They are aimed at helping the President / CEO and the Board of Directors to make appropriate
and swift decisions on business execution. As an advisory body for the President / CEO, the Management
Advisory Conference discusses significant matters related to the Company’s overall management policy andits business administration.
- Different internal committees carry out careful inspections and deliberations on managerial issues in theirrespective domains. These activities are helpful to the President / CEO and the Board of Directors in terms ofdecision-making. The principal internal committees and their roles are as follows:- Risk Management Committee: Deliberation and consideration matters in connection with risk management,such as the identification and analysis of risks that could have a material impact on the management, measuresagainst such risks, the prevention of their occurrence and actualization, and the announcement thereof.
17

- Internal Control Committee: Deliberations on matters in connection with the construction and operation of
the internal control system- Disclosure Committee: Comprehensive and prompt collection of important information within the Groupand deliberation of whether to disclose information and of the accuracy, clarity, sufficiency, fairness andpositivity of the information- Sustainability Committee: Deliberations on and monitoring of sustainability policy, issues, measures, etc.
from a long-term perspective and implementation and direction of the sustainability management strategies
across the entire Group
5. Audit & Supervisory Board Member, Audit & Supervisory Board- The Audit & Supervisory Board consists of four members, including one standing auditor and three parttime auditors (including three outside auditors). In addition, two assistants to Audit & Supervisory Board
Members (who also serve in the Audit Department) have been assigned to support the execution of duties by
Audit & Supervisory Board Members.
-In FY2023, the Audit & Supervisory Board met 13 times to hold the following discussions and make thefollowing resolutions and reports, with the attendance of all the Audit & Supervisory Board Members.
[Twelve resolutions] Audit & Supervisory Board Member audit report, Audit & Supervisory Board Member
audit plan, reappointment of Accounting Auditor, consent to remuneration for accounting auditor, Election of
Audit & Supervisory Board Member Candidates, etc.
[Three discussions] Remuneration for Audit & Supervisory Board Members, continuation of full-time Audit& Supervisory Board Members concurrently serving as officers of other companies, and concurrent positionsof Outside Audit & Supervisory Board Members as officers of other companies[Twenty reports] Monthly reports by full-time Audit & Supervisory Board Members, audit results by
Accounting Auditors, audit plans by Accounting Auditors, etc.
- In addition to the above, the Audit & Supervisory Board also shares and discusses compliance issues andother issues identified through audit activities.
- With regard to audit plans, we have established priority audit items for each year. In FY2023, the Audit &Supervisory Board engaged in auditing activities with the following items as priority audit items, andexchanged opinions with executive management as necessary.
① Appropriateness of the decision-making process of the Board of Directors and the rationality of its
decisions, etc.
(Audit perspective)
Sufficient information disclosure and discussions based on appropriate risk analysis andassessments
Discussion of the lawfulness and economic rationality of decisions that have been made andmedium- and long-term management issues② State of execution of duties by Directors(Audit perspective)
Legality and appropriateness of the execution of duties through direct dialogues
Appropriateness of decision-making procedures
Proactive and conservative governance of subsidiaries and equivalents and offering of information
to outside officers③ Establishment and operation of compliance systems(Audit Perspective)- Effectiveness and state of implementation of response action and recurrence prevention measures inthe event of an incident- Involvement of the division compliance managers and division structures- Individual Audit & Supervisory Board Members conduct activities in accordance with the Audit &Supervisory Board Member auditing standards, the audit policy, and the allocation of duties determined by the
Audit & Supervisory Board while also using means such as remote conferencing.
① Interviews with Directors and Executive Officers: Audit & Supervisory Board Members meet withRepresentative Director, President and CEO six times a year, with Representative Director, Chairman
three times a year and with other Directors and Executive Officers every six months to confirm thestate of execution of duties and provide feedback on audit findings.
18

② Interviews with General Manager of business divisions: Audit & Supervisory Board Members conduct
interviews with the General Managers of business division planning & administration departments andadministration departments every six months.
③ Attendance at important meetings: In addition to the Audit & Supervisory Board, Audit & Supervisory
Board Members attend meetings of the Board of Directors, the Management Advisory Conference, andAdvisory Board (Special Committee, Governance Committee, Risk Management Committee, Internal
Control Committee, Disclosure Committee, and Sustainability Committee), and other major internal
meetings to express necessary opinions.
④ Monitoring of business matters: Audit & Supervisory Board Members attend project review meetings
to review important matters submitted to the Board of Directors and Management Advisory Conference,and view all application documents for matters that Directors and Executive Officers can approve inaccordance with job authority regulations.
⑤ On-site inspections: Full-time Audit & Supervisory Board Members actively conduct on-site
inspections of major business sites and Group companies to understand local conditions. Whenselecting locations for on-site inspections, decisions are made based on risks, such as the state ofcompliance and small-scale and remote business sites.
⑥ Three-way audits: Full-time Audit & Supervisory Board Members receive monthly reports from theInternal Audit Section. They also attend audit meetings and share information through close cooperation
to understand the Group's situation. They hold 17 meetings with the Accounting Auditor annually to
explain the results of audits and audit plans and to discuss quarterly review reports, key audit matters(KAMs) and other matters to strengthen cooperation.
⑦ Strengthening Group governance: In addition to dialogues with the management teams at Group
companies, full-time Audit & Supervisory Board Members aimed to collect and share information by
participating in Group Company Audit & Supervisory Board Member liaison meetings andparticipating in ITOCHU Group Audit & Supervisory Board Member liaison meetings. Audit &Supervisory Board Members will continue working to strengthen Group governance.
⑧ Strengthening cooperation with Outside Directors: The Audit & Supervisory Board held four roundtable meetings to promote communication and strengthen collaboration with Outside Directors.
6. Internal Audits- As an internal auditing body, the Company has established the Audit Department under the direct control of
the President / CEO. It had 14 staff members. The Audit Department conducts audits of the Company and its
domestic and overseas consolidated subsidiaries to assess various factors, such as (i) whether or not theirreports of financial and other information, their records and their procedures for reporting and keeping records
are reliable, (ii) whether or not they comply with laws, ordinances and other regulations and whether theirrelevant internal mechanisms and systems are effective and appropriate, (iii) whether or not their operational
procedures and activities are effective and efficient in accomplishing the organizational policies and plans,and (iv) whether or not other managerial activities are implemented reasonably and efficiently. It reports theresults of audits directly to the President and Chief Executive Officer and to the Audit & Supervisory Board
Members and delivers regular reports twice a year to the Board of Directors. It thus establishes dual reportinglines to ensure effectiveness of internal audits. It also implements thorough follow-up activities after audits tomonitor whether the matters noted or proposed are remedied or implemented. In addition, it closelycollaborates with the internal audit bodies of group companies and the parent company-Audit & Supervisory Board Members and the Audit Department hold a regular meeting monthly to work
closely together to exchange information and collaborate. For instance, they discuss and exchange perspectives
on the results of internal audits, other opinions, proposals and the status of the development and operation ofinternal control systems.
- The Accounting Auditor and the Audit Department also exchange information and opinions as needed andcollaborate to ensure the effectiveness and efficiency of audits
7. Accounting Auditor- The Company has contracted with Deloitte Touche Tohmatsu LLC as accounting auditor in accordance with
the Companies Act and the Financial Instruments and Exchange Act to perform audits of the Company
pursuant to the two laws mentioned above. The continuous audit period by Deloitte Touche Tohmatsu LLC
has been 47 years (from the fiscal year ended March 1978 to the fiscal year ended March 2024). The
Accounting Auditor conducts financial statement audits and internal control audits from the standpoint of an19independent third party. The Company receives reports on audit results, exchanges opinions as appropriate on
issues to be considered with regard to internal control, etc., and receives advice on matters for improvement.
The certified public accountants who implemented the accounting audit operations for the Company for the
fiscal year ended March 2024 are as follows. The continuous audit period was within the statutory limit for all
those involved.
Designated Limited Liability Partner:(Name of Certified Public Accountant) Susumu Nakamura,(Name of Audit Corporation) Deloitte Touche Tohmatsu LLC,
Designated Limited Liability Partner:(Name of Certified Public Accountant) Akiko Fujiharu,(Name of Audit Corporation) Deloitte Touche Tohmatsu LLC,
The assistants to the accounting audit operations for the fiscal year ended March 2024 consisted of 15 certified
public accountants and 24 other personnel.
(Policy and Reason for Appointment of Audit Corporation and Evaluation)
When appointing the audit corporation, the Audit & Supervisory Board receives explanations from Deloitte
Touche Tohmatsu LLC on its systems and others and makes the decision by carefully reviewing its
reasonability and appropriateness by evaluating the audit corporation in light of opinions made by internal
related departments on the appointment of the audit corporation, taking into comprehensive consideration its
independence, quality control systems and appropriate team structure to understand the Group’s strategies.
(Policies for Dismissal and Decision to Refuse Reappointment of Accounting Auditor)
In cases where the Audit & Supervisory Board has decided it is necessary, including cases where there is an
obstacle to the Accounting Auditor’s execution of duties, the Audit & Supervisory Board decides on thecontent of a proposal on the dismissal or the refusal of reappointment of the Accounting Auditor to besubmitted to the general meeting of shareholders.
In addition, in cases where there is a fact that is deemed to fall under any of the items provided for in Article
340, Paragraph 1 of the Companies Act in the Accounting Auditor or in cases where the Audit & Supervisory
Board has decided that the Accounting Auditor is inappropriate as the Accounting Auditor of the Company
because there is a fact similar to these items, including violation of the law, the Audit & Supervisory Board
considers the dismissal of the Accounting Auditor and, if the Audit & Supervisory Board has decided that thedismissal is necessary, dismisses the Accounting Auditor based on the consent of all the Audit & Supervisory
Board Members.
In this case, an Audit & Supervisory Board Member selected by the Board shall report the dismissal of the
Accounting Auditor and the reason for it at the first Ordinary General Meeting of Shareholders convened after
the dismissal.

[Policies and Procedures in the Nomination of Director and Audit & Supervisory Board Member Candidates]
1. Policies and Procedures in the Nomination of Director and Audit & Supervisory Board Member
Candidates
To allow its Board of Directors to perform appropriate oversight of management and make decisions onimportant business execution, the Company appoints, in principle, the President / CEO, Chief Financial Officer(CFO), Chief Compliance Officer (CCO), and Chief Information Officer (CIO), and designates candidates for
Directors and Executive Directors from managers with the highest responsibility for their divisions. The
Company also designates several candidates for Outside Directors to make the ratio of Outside Directors one
third or more with the goal of strengthening the Board of Directors’ oversight of management. The Company
designates candidates for Outside Directors from individuals who are expected to contribute to its management
using their extensive knowledge acquired through experience in their fields. The Company appoints those
expected to contribute to its management using their extensive knowledge cultivated through experience intheir respective fields as Outside Directors.
Based on this policy, the President / CEO drafts a proposal on Director candidates. After deliberation andexamination by the Governance Committee, the Board makes a decision regarding submission of an
appointment proposal to a General Meeting of Shareholders. In addition, if a person proves to lack the required
quality or ability needed to execute the job as a Director, after deliberation and examination by the Governance
20

Committee, the Board of Directors makes a decision regarding submission of a dismissal proposal to a General
Meeting of Shareholders.
2. Policy and Procedures for Nomination of Audit & Supervisory Board Member Candidates
To ensure that its Audit & Supervisory Board Members properly perform auditing and the audit ofmanagement, the Company appoints those with knowledge of the Company’s management and with advanced
expert knowledge and extensive experience in accounting, financial and legal affairs, risk management andother domains as Audit & Supervisory Board Members candidates. It appoints as Outside Audit & Supervisory
Board Members those expected to properly audit and oversee its management with the use of their advanced
specialist knowledge and extensive experience in different areas. With regard to the policy mentioned above,
the President / CEO drafts a proposal on the Audit & Supervisory Board Member candidates after discussing
with the Standing Audit & Supervisory Board Members, and the Board of Directors makes a decision
regarding submission of an appointment proposal to a General Meeting of Shareholders upon the approval of
the Audit & Supervisory Board.
[Summary of Contents of Liability Limitation Agreement]
The Company has entered into a liability limitation agreement with each Director (excluding
Executive Directors and those holding similar positions) and each Audit & Supervisory Board
Member to limit their liability for damages as outlined under Article 423, Paragraph 1 of theCompanies Act in accordance with Article 427, Paragraph 1 of the Act. Limitation on liability
for damages under the agreement is set at the minimum liability amounts provided for by laws
and regulations. The said liability limitation shall be applied only in cases where such Directors
or Audit & Supervisory Board Members performed their duties in good faith and without grossnegligence.

3. Reasons for Adoption of Current Corporate Governance System
As a company with Audit & Supervisory Board Members (or an Audit & Supervisory Board), the Company
ensures that its Audit & Supervisory Board Members, will fully carry out their managerial monitoring in orderto achieve the enhancement of their monitoring and oversight functions and transparency in decision-making.
In addition to this corporate governance structure based on managerial monitoring by Audit & Supervisory
Board Members, the Company has the Board of Directors, which includes Outside Directors who make up one
third or more of the board members and one of whom is a female, with the objective of strengthening andimproving the effectiveness of management oversight by the Board of Directors and transparency in decisionmaking. In addition, the Company has established a Special Committee composed of independent persons,
including Independent Outside Directors, and a Governance Committee comprised of a majority of Independent
Outside Directors, as voluntary consultative bodies of the Board of Directors.
The Company regards its current corporate governance system based on the Audit & Supervisory Board in
combination with the Board of Directors in which Outside Directors make up one third or more of themembers, the Special Committee composed of independent persons, and the Governance Committee in which
Independent Directors/Audit & Supervisory Board Members are the main constituent members, as consistent
with the Company’s basic views on corporate governance stated in I-1 in this report.

III.

Implementation of Measures for Shareholders and Other Stakeholders

1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights
Early Notification of General
Shareholder Meeting
Scheduling AGMs Avoiding
the Peak Day
Allowing Electronic
Exercise of Voting Rights

Supplementary Explanations
The Company has published the Notification of General Meeting of
Shareholder on the websites of the Tokyo Stock Exchange, ICJ and theCompany around 3 days before the Company send it to shareholders.
The Company strives to avoid the date on which it is generally thought that alarge number of companies will hold the General Meetings of Shareholders.
Since the Ordinary General Meeting of Shareholders in June 2005, theCompany has allowed the electronic exercise of voting rights via the Internet.
In addition, since the Ordinary General Meeting of Shareholders in June 2018,
the Company has introduced a “Smart Exercise,” a system that permits users
21

to log in directly to the website to exercise their voting rights using
smartphones, without entering a code or password to exercise their voting
rights.
Participation in Platform for
Exercise of Voting Rights by
Electromagnetic Means andOther Measures to Enhance
Environment for Exercise of
Voting Rights by
Institutional Investors
Providing Convocation
Notice (Summary) in
EnglishOther

The Company has joined an electronic voting platform (ICJ) since its annual
General Meeting of Shareholders held in June 2016.

The Company publishes the abridged English version of the notice ofconvocation on the same day as the Japanese version on the websites of theTokyo Stock Exchange, ICJ and the Company. (The English version of thenotice of convocation has been published since the Ordinary General Meetingof Shareholders in June 2016.)
The Company has been sending out the notification of convocation printed infull color since the Ordinary General Meeting of Shareholders in June 2013.
By including business reports and topical stories with charts and photographs,
the Company has made it more informative and user-friendly for readers.
Since the Ordinary General Meeting of Shareholders in June 2017, theCompany has introduced a system that allows shareholders to view thenotification of convocation and the directions to the venue and to execute theirvoting rights using their smartphones, tablets and computers.

2. IR Activities Updated
Supplementary Explanations

Preparation and Publicationof Disclosure Policy
Regular briefings forindividual investors
Regular Investor Briefings
for Analysts and Institutional
Investors

Posting of IR Materials on
WebsiteEstablishment of Department
and/or Manager in Charge ofIR

The Company has established its IR Basic Policy. Refer to:
IR Basic Policy:
https://www.itcenex.com/en/ir/policy/basicpolicy/
The Company holds briefings for individual investors
about twice a year.
The Company holds 2 briefings each year: one after the
full-year results are confirmed and the other after the
results for the first six months of the fiscal year are
confirmed.
The Investors section of the Company’s website includes theCompany’s business results and financial information,
earnings reports, timely disclosure materials, notices ofGeneral Meetings of Shareholders, integrated reports, andother topical information.
Important IR materials are also available in English.
https://www.itcenex.com/en/ir/
The Company has established the Finance & Investor
Relations Section, Finance & General Accounting
Department as a body specializing in investor relations, andappointed the officer responsible for IR operations (CFO).

22

Explanations
Given by the
Representativ
e
―

No

Yes
―

―

3. Measures to Ensure Due Respect for Stakeholders Updated
Supplementary Explanations
Stipulation of Internal Rules The Declaration of the Group Code of Conduct provides for relationships withfor Respecting the Positiondifferent stakeholders. For details, please refer to:of Stakeholders
https://www.itcenex.com/en/corporate/mission/
1. Sustainability Initiatives
The Group formulated a Sustainability Policy in November 2021.
The Group has a mission of delivering energy and services as a "The Best
Partner for Life and Society" and will aim to improve its corporate value while
contributing to the development of a rich life for people and a sustainable
society.
For details, please refer to:[Sustainability Initiatives]
https://www.itcenex.com/en/csr/[Integrated Report（ENEX REPORT)]
https://www.itcenex.com/en/ir/doc/annual_report/[Information disclosure based on the TCFD recommendations]
https://www.itcenex.com/en/csr/environment/climatechange/
2. Environmental protection and responses to climate change
The Group as a whole is working on continuous actions to improve theenvironment and to implement environmental management. To address
climate change, it has set medium- and long-term CO2 emissions reduction
targets for 2030 and 2050. It will thus work to enable all of society to reduce
CO2 emissions and establish a decarbonized society through its business.
For details, please refer to:https://www.itcenex.com/en/csr/environment/
Implementation ofEnvironmental Activities,
CSR Activities etc.

3. Human Rights
The Group has formulated the ITOCHU ENEX Group Human Rights Policyin accordance with its Code of Conduct, the Declaration of the Group Codeof Conduct and its Sustainability Policy. It will respect the human rights of all
stakeholders affected by its corporate activities and address the negative
impact of its business activities on human rights to fulfill its responsibility toincrease respect for human rights. For details, please refer to:https://www.itcenex.com/en/csr/social/humanrights/
4.Social Contribution Activities
The Group is endeavoring to contribute to the enrichment of people's lives andthe sustainable development of society by conducting business activities
which provide diverse value creation and activities which contribute to society
in line with its corporate philosophy.
For details, please refer to:https://www.itcenex.com/en/csr/social/contribution/
5. Risk management
The Group achieves business continuity by taking prompt and well-aimed
action to address various events and risks which might impede its operations
and aims to develop robust systems for preventing any loss of public trust or
damage to its corporate value.
For details, please refer to:https://www.itcenex.com/en/csr/governance/riskmanagement/
6. Responses to natural disasters and disaster prevention
23

The Group's foremost mission is to provide a stable supply of energy in linewith its corporate philosophy.
As such, the Group provides infrastructure maintenance capabilities acrossJapan to ensure that the safe and reliable delivery of energy needed bycustomers is maintained as far as possible.
For details, please refer to:https://www.itcenex.com/en/csr/social/disaster-prevention/
Development of Policies on
Information Provision to
Stakeholders

Other

The Company has established the IR Basic Policy, and its Declaration of theGroup Code of Conduct prescribes that the Company shall maintain close
communications with citizens and society.
Health and productivity management, Occupational Safety and Health
The Company creates working environments in which employees canmaintain and improve their health and work with peace of mind. It is also
promoting Health and Productivity Management so that every employee canwork with enthusiasm, motivation, and a sense of fulfillment.
Employees are the linchpin of the company's growth. We are striving toincrease employee motivation and productivity to ensure the vitality of theorganization, in our efforts to maximize performance.
For details, please refer to:https://www.itcenex.com/en/csr/social/health-management/

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development Updated
The Company has established a system for ensuring that the execution of duties by directors complies withlaws and regulations and the Articles of Incorporation, and that the structure required to ensure theappropriateness of other operations (internal control system) is in place as described below. The following is
the outline of the Basic Policy on Internal Control System as of June 19, 2024. (The Company’s Basic Policy
on Internal Control System was decided on at the meeting of the Board of Directors held on May 2, 2006, andits latest revision was made on May 18, 2023.)
1. System for ensuring that the execution of duties by Directors, Executive Officers, employees of theCompany, Directors of the Company’s subsidiaries, and any other person who is equivalent to those persons(referred to as “Directors, etc.” in 4. and 5. below) complies with laws and regulations and the Articles ofIncorporation (the first part of Article 362, paragraph (4), item (vi) of the Companies Act and Article 100,
paragraph (1), items (iv) and (v)-(d) of the Ordinance for Enforcement of the Companies Act)
(1) Corporate governance・The Board of Directors shall decide on important matters related to the management and supervise the
Directors' execution of their duties in accordance with laws and regulations, the Articles of Incorporation,
resolutions of the General Meeting of Shareholders, the Regulations on Decision-Making Authority, thecompliance program, the Declaration of the Group Code of Conduct, the Employee Code of Conduct, and theBoard of Directors’ Regulations.
・Directors shall execute the Company's operations in accordance with laws and regulations, the Articles ofIncorporation, resolutions of the Board of Directors, and internal regulations.
・Executive Officers shall be appointed by resolution of the Board of Directors. In accordance with decisionsof the Board of Directors, Executive Officers shall execute their duties within the range stipulated in theRegulations on Division of Duties under the command and supervision of the Representative Director and the
Director in charge of their division of duties.
・Representative Directors and Directors who are appointed by resolution of the Board of Directors as
Directors who are to execute operations must report on the situations of the execution of their own duties tothe Board of Directors at least once every 3 months and whenever necessary.
・Audit & Supervisory Board Members shall conduct an audit to check the appropriateness of the executionof duties by the Directors in accordance with the regulations for the Audit & Supervisory Board and thestandards for audits by the Audit & Supervisory Board Members.
24

・In principle, the Company shall dispatch its Directors and Audit & Supervisory Board Members to thesubject subsidiaries (Subsidiaries to which the Company directly contributes funds and key subsidiaries towhich it indirectly contributes funds and which need direct management, instructions, etc. from the Company;
the same applies hereinafter) and establish a system for securing the appropriate business operation of theCompany and its subsidiaries (hereinafter collectively referred to as the “Group”) while respecting theautonomy of each subject subsidiary.
(2) Compliance- It is stipulated that Directors, Executive Officers and employees shall behave in accordance not only withlaws and the Articles of Incorporation but also with the compliance program, the Declaration of the Group
Code of Conduct, the Employee Code of Conduct and other relevant rules.
- The Company has appointed a CCO (Chief Compliance Officer) and established a committee relating tocompliance and a department that oversees matters concerning compliance. It has also established acompliance program to make efforts to improve compliance, such as the appointment of the compliancemanagers at each departments, the provision of compliance education and training, the preparation of acompliance manual, the formulation of responses to compliance incidents, the creation of a whistleblowing
system and a system under which documents shall be obtained from all Directors, Executive Officers andemployees in connection with compliance with the Employee Code of Conduct.
- When an employee learns of any act in violation of a law, ordinance, the Articles of Incorporation or any
internal rule or against social norms, he or she shall contact the designated internal consulting contacts inaccordance with the compliance program. With regard to the whistleblowing system, the Company has
established whistleblowing regulations to protect whistleblowers and ensure an appropriate response action
with transparency maintained.
- Under the compliance program, the Company audits and provides guidance to subject subsidiaries for theconstruction and improvement of compliance systems, for example, with respect to the formulation of theircompliance programs, the appointment of compliance managers, the creation of compliance manuals, thedetermination of response action to be taken in the wake of occurrence of a compliance incident, and thedevelopment of a group-wide whistleblowing system with the Company’s relevant section and outside
consulting contact points, and provides compliance education and training to subject subsidiaries. In so doing,
the Company is seeking to raise compliance awareness in the Group.
(3) Development of System for Ensuring Appropriateness of Financial Reporting- The Company has established accounting regulations, the Group international financial reporting standards(IFRS)-compliant uniform accounting principles and other internal rules, ensures compliance with theaccounting standards and other related laws and ordinances and has built an internal structure for securing thelegality and appropriateness of financial reporting.
- The Company has established an organization that engages exclusively in internal control and has constructeda mechanism for regularly evaluating and improving the status of the improvement and operation of theinternal system for ensuring the appropriateness and other qualities of financial reporting.
(4) Internal Audit- The Company has installed the Audit Department under the direct control of the President / CEO. The Audit
Department regularly performs internal audits of overall operations in accordance with the audit regulations,specifically whether or not the laws, ordinances, Articles of Incorporation and internal rules are observed, andwhether or not the procedures and details of business execution are appropriate. Subsequently, the department
reports the results to the President / CEO, the Audit & Supervisory Board Members, and the Board of
Directors. It also carries out follow-up audits of whether or not the points noted or proposed that were foundin the internal audit have been improved or implemented.
- The Company defines the overall business activities of its Subject Subsidiaries as being subject to internal
audits conducted by the Audit Department. This department pushes ahead with the construction of an internal
control system for Our Group and maintains its close linkage with internal audit bodies inside Our Group in
an effort to upgrade the quality of audits conducted in Our Group.
(5) Basic Policy against Antisocial Forces- The Company makes group-wide efforts to preclude any relationship with antisocial forces, irrespective of
the circumstances.
25

2. Structure for storage and management of information on exercise of duties by the Company's Directors(Article 100, paragraph (1), items (i) of the Ordinance for Enforcement of the Companies Act)
(1) Storage and management of information
Directors shall appropriately store and manage statutory documents such as minutes of the General Meetingof Shareholders and minutes of the Board of Directors, and documents containing information on the executionof important duties (including electronic or magnetic records; the same applies hereinafter) as well as relevant
documents, pursuant to the provisions of the Regulations on Document Management and other internal
regulations.
(2) Access to information
Directors and Audit & Supervisory Board Members may have access to the information set forth in thepreceding paragraph at any time.
3. Regulations and other systems for management of the risks of loss for the Company and its subsidiaries(Article 100, paragraph (1), items (ii) and (v)-(b) of the Ordinance for Enforcement of the Companies Act)
In order to deal with market risk arising from changes in commodity markets, foreign exchange rates, interest
rates and share prices, credit risk, investment risk, compliance risk, information security risk and various
other risks, the Company shall establish an internal committee and a department or division exclusively
responsible for the tracking and management of risks of the Company and subject subsidiaries, develop thenecessary risk management system and management methods including the establishment of management
rules, criteria for approaches, investment criteria, setting of the maximum amount of risks and transactions,and reporting and monitoring systems, and manage the risks of the Company and subject subsidiaries bothcomprehensively and individually.
4. System for ensuring efficient execution of duties by Directors of the Company and Directors, etc. of its
subsidiaries (Article 100, paragraph (1), items (iii) and (v)-(c) of the Ordinance for Enforcement of theCompanies Act)
(1) Various internal committees
For proper and agile decision-making on the execution of their duties, the Company shall establish theManagement Advisory Conference as an advisory body for the President / CEO, where deliberations are heldon the Group's general management policies and business plans and other important matters concerning theexecution of their duties, and formulate management benchmarks and business plans, etc. on a consolidated
basis. In addition, for the President / CEO or the Board of Directors to make decisions in a lawful, fair andefficient manner, the Company shall establish various internal committees where careful deliberations are heldon business challenges in each assigned area and that will contribute to the decision-making of the President /CEO and the Board of Directors.
(2) Divisional organization system- The Company shall adopt the divisional organization system where each of multiple divisions operates
business in its assigned business domain.
- General Managers shall efficiently operate business in accordance with their authority allocated based on theRegulations on Decision-Making Authority and a predetermined business plan.
- General Managers shall operate business in the business domain for which they are responsible in accordancewith laws and regulations, the Articles of Incorporation, internal regulations and internal criteria. General
Managers shall manage operations by setting numerical targets for major items on the balance sheet andincome statement for each division, verifying the achievement of those targets periodically, and reporting thestatus of the execution of operations to the Board of Directors.
(3) Clarification of administrative authority and responsibility
The Company shall develop various internal regulations such as the Regulations on Division of Duties, theRegulations on Administrative Authority and the Regulations on Decision-Making Authority, clarify theauthority and responsibility of each officer or manager, and build a system that enables the proper and efficient
execution of duties.

26

5. System for reporting matters on the execution of duties by Directors, etc. of the Company's subsidiaries to
the Company (Article 100, paragraph (1), items (v)-(a) of the Ordinance for Enforcement of the Companies
Act)
The Company shall require subsidiaries to which it directly contributes funds to report important management
matters to the Company in accordance with the Group company management rules. The Company shall also
periodically call the presidents of the subject subsidiaries and hold a liaison conference to enhance the business
management of the subject subsidiaries.
6. Other system for ensuring that operations of the corporate group that consists of the Company and its parent
company and subsidiaries are conducted in an appropriate manner (Article 100, paragraph (1), item (v) of theOrdinance for Enforcement of the Companies Act)
(1) Transactions with the parent company
As is the case with the conditions for general transactions, the Company determines the conditions fortransactions or actions with its parent company, in consideration of market prices. For material transactions
for which it is impossible to refer to market prices, the Company ensures the appropriateness of transactions
through deliberation and examination by the Special Committee, which is composed of independent persons
including Independent Outside Directors, prior to approval by resolution at a Board of Directors’ meeting
attended by Outside Directors and Outside Audit & Supervisory Board Members.
(2) System for management of subsidiaries- The Company shall assign personnel for supervising the subject subsidiaries to each division andheadquarters' administration departments and sections and choose the responsible department or section foreach subject subsidiary. Each responsible department or section shall conduct business management andprovide business guidance for the relevant subject subsidiary in accordance with the Group company
management rules and other internal regulations.
- For subsidiaries to which the Company indirectly contributes funds, the Company shall require subsidiaries
that directly contribute funds to those subsidiaries to manage their business, except as otherwise provided inthis policy. That is, the Company shall manage the business of such subsidiaries through its business guidance
and the management of the subsidiaries that directly contribute funds to such subsidiaries.
7. Matters concerning employees who are to assist with the duties of the Company's Audit & Supervisory
Board Members (Article 100, paragraph (3), items (i), (ii), and (iii) of the Ordinance for Enforcement of theCompanies Act)
(1) Appointment of employees assisting Audit & Supervisory Board Members
The Company appoints several employees to assist the Audit & Supervisory Board Members and has theemployees serve concurrently with their other posts.
(2) Ensuring of independence of employees assisting Audit & Supervisory Board Members from Directors
and effectiveness of directions from Audit & Supervisory Board Members
The command authority over employees assisting Audit & Supervisory Board Members shall belong to the
Audit & Supervisory Board Members or the Audit & Supervisory Board to the extent that the auditing services
are assisted. Directors, Executive Officers and other employees do not have command authority over
employees assisting the Audit & Supervisory Board Members. The prior consent of full-time Audit &Supervisory Board Members is required for decisions on personnel changes, personnel evaluation, disciplinary
punishment, etc. of such employees assisting the Audit & Supervisory Board Members.
8. System concerning reporting to the Company's Audit & Supervisory Board Members (Article 100,
paragraph (3), items (iv) and (v) of the Ordinance for Enforcement of the Companies Act)
(1) Attendance at important meetings
Audit & Supervisory Board Members may attend the Board of Directors as well as the Management Advisory
Conference and other important meetings, hear the status of the execution of duties by Directors, Executive
Officers and employees from them and inspect relevant documents in accordance with auditing plans and theassignment of duties determined by the Audit & Supervisory Board.
(2) Duty to report of Directors, Executive Officers and employees

27

- Directors, Executive Officers, heads of the sales division and heads of administration departments andsections, etc. shall report the status of execution of their own duties to the Audit & Supervisory Board Members
upon the request of the Audit & Supervisory Board or the Audit & Supervisory Board Members.
- Other than the matters stipulated by laws and regulations, Directors shall report the following matters to the
Audit & Supervisory Board Members immediately in each case:* Content of decision, etc. that could affect the finance and business significantly (non-consolidated basis andconsolidated basis)* Content of announcement of business results and earnings forecasts (non-consolidated basis andconsolidated basis)* Business plans, financial plans, and status of compliance* Content and results of internal audits (important matter)* Status of provision of information based on the whistle-blowing system* Content of administrative dispositions* Other cases where an event that greatly affects the Company management occurred or is expected to occur,
such as significant losses* Matters requested by Audit & Supervisory Board Members, other than those set forth in the preceding items(3) Report by Executive Officers and employees
Executive Officers and employees may report the following matters directly to the Audit & Supervisory Board
Members.
* Fact that could cause significant damage to the Company* Fact of any material violation of laws and regulations or the Articles of Incorporation(4) Report on subsidiaries
The Company shall periodically report the results of internal audits for the subject subsidiaries and theoperational status of the Group's whistle-blowing system to the Audit & Supervisory Board Members. The
Audit & Supervisory Board Members shall hold meetings of the Group's Audit & Supervisory Board andreceive reports on the status of compliance, etc. among the subject subsidiaries from the Audit & Supervisory
Board Members of the subject subsidiaries.
(5) Prohibition of disadvantageous treatment
The Company shall prohibit any person from treating disadvantageously a person who made a report to the
Audit & Supervisory Board Members due to the provision of this report, and communicate and inform allcompanies in the Group of the prohibition.
(6) Report from subsidiaries
Directors and Audit & Supervisory Board Members of subsidiaries may directly report matters, including facts
that could cause significant damage to the subsidiaries, to the Company’s Audit & Supervisory Board
Members.
9. Other system for ensuring that audits by the Company's Audit & Supervisory Board Members are
implemented effectively (Article 100, paragraph (3), items (vi) and (vii) of the Ordinance for Enforcement of
the Companies Act)
(1) The Audit Department's cooperation with Audit & Supervisory Board Members
The Audit Department shall deliberate on an internal auditing plan for each fiscal year with the Audit &Supervisory Board Members and seek close exchanges of information and cooperation, for example byholding periodic meetings to discuss and exchange views on the results of internal audits, findings andrecommendations, etc. The Audit & Supervisory Board Members and the Audit Department shall also seek
cooperation with the Accounting Auditors.
(2) Policy on treatment of audit costs
The Company shall secure a certain amount of budget every year to cover audit costs. In addition, the Audit& Supervisory Board Members may use attorneys at law, certified public accountants, consultants and otherexternal professionals in their own right if deemed necessary in the implementation of audits.
To ensure the appropriate operation of the internal control system, the Company has adopted a system where
the Internal Control Committee examines the status of the establishment and operation of the internal control
28

system every 6 months with regard to each of the items set forth in the basic policy. The results of deliberations
by the Internal Control Committee are also reported to the Board of Directors, which conducts the final
evaluation of the status of the establishment and operation of the internal control system. The Company
constantly reviews the internal control system to carry out continual improvements to it in its efforts to build
a more appropriate, efficient system. At the Board of Directors’ meeting that took place on May 16, 2024, theCompany evaluated the status of the establishment and operation of the internal control system in the fiscal
year ended March 2024 with regard to each of the matters set forth in the basic policy. As a result, the Company
confirmed that there were no serious defects or flaws.

2. Basic Views on Eliminating Anti-Social Forces
The Company makes group-wide efforts to preclude any relationship with antisocial forces, irrespective of thecircumstances. The Declaration of the Group Code of Conduct explicitly provides for this policy. The
Company constantly strives to construct and maintain close collaborative relationships with outside specialist
organizations and others and encourages the inclusion of the clause for the elimination of organized crimegroups in contracts in order to prepare itself for swift action in response to unexpected circumstances.

V.

Other

1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not Adopted

Supplementary Explanation
None

2. Other Matters Concerning to Corporate Governance System Updated[Timely Disclosure System]
1. Basic Policy on Timely Disclosure
In accordance with the rules for timely disclosure prescribed by Tokyo Stock Exchange, Inc., the Company
has a basic policy of making the timely and appropriate disclosure of material information to investors fortheir appropriate investment decisions.
2. Actions Toward Construction of Timely Disclosure System
The Company has the Finance & Investor Relations Section, Finance & General Accounting Department,
which engages in disclosure operations, as a controlling organization for collecting information concernedwith timely disclosure information. For the purpose of increasing accuracy in decision-making on disclosure,
the Company established a Disclosure Committee in FY 2005 consisting of those in charge of several
departments. The Company discloses timely disclosure information pursuant to the rules for timely disclosureof the stock exchange mentioned above via the timely disclosure system provided by the said stock exchange,
which is known as the Timely Disclosure Network, or TDnet. The information provided for TDnet is also
published on the Company’s website at the same time, although the publication of the information on thewebsite may be delayed due to the preparation. Accordingly, for the purpose of viewing information disclosedby the Company, it is advisable to refer to TDnet and other information sources in addition to the Company's
website.
3. Status of Providing Investors with Opportunities to Obtain Information Impartially and Easily
For the purpose of providing opportunities to obtain important information on the Company impartially andeasily, it not only makes timely disclosure in compliance with the rules for timely disclosure of the stock
exchange mentioned above, but also publishes the information on its website and by other means in a bid toimplement more positive and impartial information disclosure.

29

(Reference Material 1) Corporate Governance System

Updated*Business execution, internal control, managerial monitoring and risk management system,etc

30

(Reference Material 2)

UpdatedSkills Matrix of Directors and Audit & Supervisory Board Members

31