Corporate Governance
Last Updated: December 27, 2021

Kawasaki Kisen Kaisha, Ltd.

Yukikazu Myochin, Representative Director, President & CEO
Contact: Masaya Futakuchi, General Manager, General Affairs Group
Tel: 81-3-3595-6568
Securities Code: 9107
https://www.kline.co.jp/en/index.html
The corporate governance of Kawasaki Kisen Kaisha, Ltd. (the “Company”) is described below.

I.

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

1. Basic Views(Basic principle of corporate governance)
Solid corporate governance is essential for a company to fulfill its social responsibility, respond to thecommitment bestowed by stakeholders and achieve sustainable growth.
The Company has been engaged in initiatives to strengthen its framework of corporate governance and todevelop and enhance systems for risk management, and continuously strives to increase its corporate value by
acting in total accordance with our business ethics while building an organic and effective mechanism ofgovernance, in conjunction with the achievement of increasingly robust earnings and a stronger financial
standing.
[Reasons for Non-compliance With the Principles of Japan’s Corporate Governance Code]The reasons are listed based on Japan’s Corporate Governance Code following revisions made in June 2021
(includes details for companies listed on prime markets).
[Principle 4.8 Effective Use of Independent Outside Directors]
Of the Company’s ten Directors, three are Independent Outside Directors, and while this does not satisfy thestandards demanded of companies listed on prime markets, we will work to appoint at least one third of
Directors as Independent Outside Directors in the future.
[Disclosure Based on the Principles of Japan’s Corporate Governance Code]
Please refer to the Company’s Corporate Governance Guidelines (hereinafter, the “Guidelines”), which havebeen posted to the Company’s website in their entirety.
https://www.kline.co.jp/en/csr/governance/corporate_governance/main/00/teaserItems1/01/linkList/0/link/guideline.pdf
Details of disclosure based on the principles of Japan’s Corporate Governance code are as follows:
1) [Principle 3.1 (i) Management Principles, Business Strategies and Business Plans]and2) [Principle 1.3 Basic Strategy for Capital Policy]
The Company stipulates in the Charter of Conduct for the “K” LINE Group companies that the “K” Line Groupwill protect personal and customer data, properly manage corporate information through timely and appropriate
disclosure, widely promoting bi-directional communication with society including shareholders.
In addition to financial information, non-financial information is also published annually in the “‘K” LINEREPORT’ and on the Company’s website.
https://www.kline.co.jp/en/ir/library/report.html-1-Corporate Principle and Vision
The “K” LINE Group has established the Corporate Principle and Vision as follows:
Corporate Principle– “K” LINE: trust from all over the world –As an integrated logistics company grown from shipping business, the “K” LINE Group contributes to society
so that people live well and prosperously.
We always recognize this principle in our operations.
VisionOur aim is to become an important infrastructure for global society, and to be the best partner with customers
by providing the high-quality logistics services based on customer first policy.
Values the “K” LINE Group prizes
 Providing reliable and excellent services
 A fair way of business Relentless efforts to achieve innovation
 Respecting humanity– Contributing to society– Fostering trust from society– Generating new values– Corporate culture that respects individuality and diversity

Business Strategies and Business Plans
The Group considers “Providing reliable and excellent services,” “A fair way of business,” “Relentless efforts
to achieve innovation” and “Respecting humanity” to be important values and expands its operations globallyas an integrated logistics company grown from shipping business. Also, with recognition of its social mission
as an infrastructure to support people’s life, the Group aims to sustain safe and secure global logistics andtackles themes for realization of zero-carbonization and low-carbonization. The Group will strive as one toenhance sustainability management in order to grow sustainably with society and to promote business strategy
and cross-sectional functional strategy.
On May 10, 2021, the Group released our “Management Plan in Fiscal Year 2021 Rolling Planning” on thetheme of “Connecting the World via Oceans and Technology.” The Group is promoting business strategies
aimed at continuously increasing corporate value. Regarding conventional themes such as initiatives forenvironmental issues accelerating measures towards carbon neutralization and for utilization of digitaltechnology, their importance is getting higher.
In order to correspond flexibly to changes in business environment and to enable sustainable growth, the Grouphas established five themes of “Refining our Four-pillar Business,” “Venturing into new business areas,”“Accelerating business development abroad, particularly in Asia,” “Achieve Further Competitiveness inContainership business” and “Continuing to expand a stronger financial base” in this Management Plan. Then,the Group has aimed to become a company group which is continuously preferred by all the stakeholders while
improving its corporate value by strengthening initiatives for sustainability management. Also, the Group will
strive as one to promote business strategy and cross-sectional functional strategy with leverage of eightcompanywide themes of “Safety/Service Quality, Environment/Technology, Governance, Group Management,
Human Resources, Financial Condition, DX and Operational Efficiency.” Furthermore, following improvement
in financial results that surpassed the assumptions of the containership business run by OCEAN NETWORKEXPRESS PTE. LTD., the environment surrounding the Company has changed greatly, including improvementin our equity capital, leading us to analyze objectively our various businesses anew from each angle and toembark on a new management plan that envisions medium- to long-term scenarios, which the Company is now
in the process of formulating. The Company will formulate a growth strategy aimed at increasing our corporate
value, continue to expand a stronger financial base, and maintain stable income, and will evaluate growthinvestments while gauging risks with balanced returns.
Furthermore, the Company has shown improvement in its financial standing through a large increase in income
centered on the containership business and improved revenue from pillar businesses. As the Company has
created distributable income, plans are to distribute a year-end dividend of ¥300 per share, while interim
dividends will not be distributed. Regarding shareholder returns from the next fiscal year onward, the Company
will work to strengthen its financial standing while implementing the disciplined investments required for our
growth strategy. At the same time, the Company will pursue evaluations based on a balanced, optimal capital
structure. A new management plan including these initiatives is scheduled to be released in May 2022.
The management plan including the business strategies is disclosed on the Company’s website below.
https://www.kline.co.jp/en/ir/management/strategy.html-2-4) [Principle 3.1 (ii) Basic Principle and Basic Policies on Corporate Governance]
The Company deems that solid corporate governance is essential for a company to fulfill its social
responsibility, respond to the commitment bestowed by stakeholders and achieve sustainable growth.
The Company has stipulated in its Guidelines that it engages in initiatives to strengthen its framework of
corporate governance and to develop and enhance systems for risk management, and continuously strives toincrease its corporate value by acting in total accordance with our business ethics while building an organic andeffective mechanism of governance, in conjunction with the achievement of increasingly robust earnings and astronger financial standing.
Moreover, with respect to matters such as protection, proper management and disclosure of information, andcommunication with society, the items listed below have been stipulated in the Charter of Conduct for “K” Line
Group Companies and the “K” Line Implementation Guideline for Charter of Conduct. Meanwhile theCompany and companies of the Group have been striving to establish effective internal systems in order toachieve such aims.
1. Human rights
2. Compliance
3. Trustworthy company group
4. Proactive environmental efforts
5. Protection, proper management and disclosure of information and communication with society
6. Contribution to society
7. Harmony in the international society
8. No relations with anti-social forces
5) [Supplementary Principle 4.11.1 Principles on the Appropriate Balance Between Knowledge, Experience
and Capabilities of the Board of Directors as a Whole, on Diversity and Appropriate Board Size, andPolicies and Procedures for Appointing Directors]and6) [Principle 3.1 (iv) Principles and Procedures in the Appointment/Dismissal of the Senior Management andthe Nomination of Director and Audit & Supervisory Board Member Candidates by the Board of Directors]
To achieve the management plan, the Company’s Board of Directors shall consist of a variety of individuals ofdifferent genders, nationalities, careerswork histories, and ages, including those with experience in managing
corporations and other large organizations and those with expertise in the operational, technical, financial, andother aspects of the shipping industry. This is to ensure constructive discussions and supervision based ondiverse backgrounds and knowledge. The Company shall give extra consideration to such diversity whenselecting candidates for Directors and the Audit & Supervisory Board Members and create and disclose a skill
matrix for Directors. In addition, with respect to the size of the Board of Directors, there are currently ten
Directors in office, of which three are Independent Outside Directors who satisfy the Company’s criteria.
The skill matrix for Directors is disclosed in the “K” LINE REPORT and the Notice of the 153rd Ordinary
General Meeting of Shareholders below.
･ “K” LINE REPORT (p. 45) https://www.kline.co.jp/en/ir/library/report.html･ Notice for the General Meeting of Shareholders (p. 22)https://www.kline.co.jp/en/ir/stock/meeting/main/012/teaserItems1/0/linkList/0/link/153GMS_Notice.pdf
The Guidelines stipulate the following regarding the qualifications required of officers.
(1) The Company shall appoint to its Directors and Audit & Supervisory Board Members individuals
possessing such broad and deep experience and knowledge as to be able to contribute to the monitoring ofbusiness execution, superior in personal quality, and highly conscious of complying with laws andregulations and prescriptive social norms. Also, the Company shall appoint those with expertise in finance,accounting, and legal affairs as Audit & Supervisory Board Members, and of which at least one person
shall possess appropriate expertise on corporate finance and accounting.
(2) The Independent Outside Directors shall be persons capable of performing the following roles andresponsibilities, in addition to the aforementioned.
i. Provide advice on business policies and business improvement based on their knowledge and experience
with the aim to promote sustainable corporate growth and increase its corporate value over the medium- tolong-term;

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ii.

Evaluate management’s performances as needed and express views, as members of the Nominating
Advisory Committee and the Remuneration Advisory Committee, on management nominations andremunerations;iii. Monitor the management through important decision-making at the Board of Directors;
iv. Monitor conflicts of interest between the Company and its management or controlling shareholders, etc.;
andv. Appropriately represent the views of stakeholders at the Board of Directors from a standpoint independentof the management and controlling shareholders.
(3) The Company shall appoint to its Executive Officers individuals who are familiar with the shipping
industry, who have abundant international sensibility and business acumen, who are highly esteemed insideand outside of the Company, who are capable of contributing to the implementation of the medium-term
management plan as managers, and who are highly conscious of complying with laws and regulations andprescriptive social norms. When re-appointing the Executive Officers, the Company shall take into accountthe performance, etc. of the business units and departments of which they are in charge.
The Guidelines stipulate procedures enlisted by the Board of Directors with respect to appointing anddismissing senior management, and also with respect to nominating Director and Audit & Supervisory Board
Member candidates, as determined by the Board of Directors. Such procedures are based on the aforementioned
nomination policy, and subject to the fair, transparent and rigorous deliberations and recommendations of theNominating Advisory Committee, and also subject to the consent of the Audit & Supervisory Board withrespect to the candidates for Audit & Supervisory Board Member. When making such decisions, the Board of
Directors shall respect the recommendations of the Nominating Advisory Committee.
The Nominating Advisory Committee shall furnish recommendations and advice to the Board of Directors,
upon having deliberated on the reasonableness of proposals for appointment or dismissal of the Company’s
officers, as well as any other matters subject to inquiry of the Board of Directors concerning appointment or
dismissal of the Company’s officers. The Nominating Advisory Committee shall comprise all Outside
Directors, the Chairman, and the President & CEO, and its chairperson shall be appointed from among
committee members who are Outside Directors.(Response to Supplementary Principle 4.11.1 with subsection I.
1. 12) )7) [Principle 3.1 (v) Explanations With Respect to Individual Appointments/Dismissals of the Senior
Management and Nominations of Director and Audit & Supervisory Board Member Candidates by the
Board of Directors]
The Company shall disclose reasons for appointment of its currently serving Directors and Audit & Supervisory
Board Members in its Notice for the General Meeting of Shareholders. Moreover, reasons for appointment of
the Outside Directors and Outside Audit & Supervisory Board Members are explained in this Corporate
Governance Report, as well as in the Notice (Refer to section II-1 of this Report).
8) [Supplementary Principle 4.1.1) Scope of Matters Delegated to the Senior Management]
The Company shall stipulate in the Guidelines the following duties, such that are to be carried out by the Boardof Directors which is to consist of a diverse range of Directors who are to be accordingly appointed based on
the aforementioned policy for nomination.
i. Set strategic direction by examining and deciding upon matters relating to the Company’s business policy
and strategy including business principles, corporate vision and medium-term management plan;ii. Conduct multifaceted and close examinations of, and decide upon the matters which are prescribed to be
decided upon by the Board of Directors, from an independent and objective standpoint in light of theCompany’s business policy and business strategy, and receive reports on those matters which are required
to be reported to the Board of Directors;iii. Conduct multifaceted and close examinations of proposals from the Executive Officers based on healthy
entrepreneurship, from an independent and objective standpoint, in order to establish an environment that
supports appropriate risk-taking by the Directors and the Executive Officers, and support the timely andbold decision-making by the Directors and the Executive Officers when approved plans are implemented;
iv. (i) Oversee the execution by the Directors and the Executive Officers of their duties from an independentand objective standpoint, (ii) monitor the progress of the management plan and evaluate the status ofachievement; (iii) analyze the causes if the management plan is not achieved and reflect such analysis on
future plans; and (iv) disclose said causes of non-achievement and analysis to the shareholders;

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v.
vi.

Develop and improve the risk management system and the corporate governance structure including theinternal control system in order to ensure the rationale of the Company’s decision-making process; andSecure its fiduciary accountability to the shareholders on the Company’s management, and oversee the
Directors in order to ensure that information will be disclosed in a timely and accurate manner.

As such, the Regulations on Decision-Making Standards shall limit matters to be determined by the Board of
Directors to those listed under items ‘i.’ to ‘vi.’ as follows, and decisions on matters of business execution
otherwise shall be entrusted to the Executive Officers.
i. Matters to be decided upon by the Board of Directors under laws and regulations;ii. Matters relating to the Company’s business policy and strategy including business principles, corporate
vision and medium-term management plan, strategic direction of the Company, and a single-year budget;iii. Important internal rules including Regulations on Decision-Making Standards;
iv. Response guidelines to deal with any serious law violation committed by the Company;
v. Matters relating to significant lawsuits; andvi. Significant matters comparable to any of the matters set forth above.
9) [Principle 4.9 Independence Standards and Qualification for Independent Outside Directors]
The Company formulates the “Criteria for the Independence of Outside Directors,” and stipulates that none of
the following criteria may apply to the respective Outside Director.
1. A person who has become an Executive Director or employee of the Company within the past 10 years.
2. A person who has been a business executor (meaning a business executor as provided for in Article 2,
Paragraph (3), Item (6) of the Regulation for Enforcement of the Companies Act; the same shall apply
hereinafter) of a corporate group for whom the Company is a major client within the past three years.
“A corporate group for whom the “K” LINE Group is a major client” refers to a corporate group that hasreceived payment from the Group in each of the years in this three-year period accounting for over 2% ofconsolidated sales in each such year for that corporate group.
3. A person who has been a business executor of a corporate group that is a major client of the “K” LINE
Group within the past three years.
“A corporate group that is a major client of the “K” LINE Group” refers to a corporate group who madepayment to the Group in each of the years in the three-year period accounting for over 2% of the Group’s
consolidated sales in each such year.
4. A person who has, within the past three years, been a business executor of a financial institution or anotherprincipal creditor, or its parent company or important subsidiary that plays a critical role in the “K” LINE
Group’s financing to such a degree that it is irreplaceable for the Group.
5. A person who has been paid ¥10 million or more or has received other assets in an amount equivalent
thereto other than officer’s remuneration from the Group in the past three years; or a person who has,within the past three years, belonged to an audit firm, tax accounting firm, law firm, consulting firm orother professional advisory firm that has been paid ¥10 million or more or other assets in an amountequivalent thereto by the Group in each of the years in the three-year period accounting for over 2% of thetotal revenues of such juridical person, etc. However, this shall not apply to a person who belongs to suchjuridical person in outline but has substantially no conflict of interest with the Group (a person who does
not receive any compensation from such juridical person, for example).
6. A shareholder holding over 10% of the voting rights of the Company. If the shareholder is a juridical
person, a person who has been a business executor of the shareholder or its parent company or subsidiary
within the past three years.
7. A person who is a relative of the second or less degree of a person falling under any of the above criteria.
The Guidelines stipulate that the Board of Directors shall endeavor to select the Independent Outside
Director candidates who can contribute to the Company’s sustainable growth and increase of corporate
value over the medium- to long-term and can be expected to contribute to frank, active and constructive
discussions at the Board of Directors.
10) [Supplementary Principle 4.11.2) Status of Concurrent Positions of Directors and Audit & Supervisory
Board Members with Other Listed Companies’ Officers]
For details regarding Directors and Audit & Supervisory Board Members who are concurrently serving as
officers of other listed companies, please refer to the Company’s Notice of the 153rd Ordinary General Meetingof Shareholders, pages 9 to 26, and pages 45 to 46.

-5-https://www.kline.co.jp/en/ir/stock/meeting/main/012/teaserItems1/0/linkList/0/link/153GMS_Notice.pdf
In addition, as of the date on which this Report was submitted, the Company’s Director Yasunari Sonobe serves
as Outside Director of RINKO CORPORATION.
11) [Supplementary Principle 4.11.3) Overview of Analysis and Evaluation of Effectiveness of the Board of
Directors as a Whole]With the aim of improving functions of the Board of Directors, the Board of Directors analyzes and evaluates
its effectiveness as a whole, which involves referring to self-evaluation conducted annually by each of the
Directors. The Company has posted to its website summaries of findings derived from the analysis andevaluation.
https://www.kline.co.jp/en/news/other/other-9117556604486338160/main/0/link/210430EN3.pdf
12) [Supplementary Principle 4.10.1) An Independent Nomination Advisory Committee and Remuneration
Advisory Committee]
As advisory committees to the Board of Directors, the Company has established a Nomination Advisory
Committee and a Remuneration Advisory Committee which evaluate and deliberate on important matters suchas nomination, remuneration, and successor plans. Each committee deliberates on inquiries received from theBoard of Directors and acts as a recommendating and advisory body to the Board of Directors. Each committee
is chaired by an Independent Outside Director and composed of a majority of Independent Outside Directors,
ensuring independence.
Furthermore, the Independent Outside Directors that serve as committee members for the Nomination Advisory
Committee contribute appropriately to deliberations on management candidates from the standpoint of diversity
including gender, as well as skills.(Please refer to subsection I. 1. 5) and 6) )13) [Principle 3.1 (iii) Board of Directors Policies and Procedures in Determining the Remuneration of the
Senior Management and Directors]
The Guidelines provide for the Board of Directors’ policies for determining the remuneration for senior
management and Directors as follows:(1) The remuneration for the Executive Directors and the Executive Officers shall be appropriate, fair andbalanced so as to reflect the Company’s medium- to long-term business performance and the latent risks
borne by said Executive Directors and Executive Officers and to further enhance their willingness andmotivation to bring about the Company’s sustainable growth and maximize its corporate value.
(2) The remuneration for the Outside Directors shall reflect the amount of time devoted to the Company’sbusiness, and the responsibilities borne by them, and shall not include business performance-linked factors.
(3) The amount of remuneration for each individual Director shall be fair and adequate in consideration of theCompany’s business performance and in light of the levels of remuneration paid by other comparable
companies.
The Board of Directors’ procedures for determining remuneration for senior management and Directors are as
follows.
(1) The institutional design and level of remuneration for Directors shall be deliberated on, resolved, andrecommended to the Board of Directors by the Remuneration Advisory Committee pursuant to theaforementioned policies.
(2) The Board of Directors shall furnish its approval for the remuneration by position for members of senior
management and Directors within the limit of the maximum yearly remuneration resolved at the General
Meeting of Shareholders, paying heed to recommendations. Meanwhile, the Representative Director andPresident shall ultimately determine amounts of payment for each member of senior management and each
Director.
The Remuneration Advisory Committee shall comprise all Independent Outside Directors, the Chairman, and
the President & CEO. The chairperson shall be appointed from among committee members who are Outside
Directors.
The performance-based remuneration other than fixed remuneration consists of bonuses which serve as
monetary remuneration that reflects short-term business performance, as well as performance-based share
remuneration (Board Benefit Trust, BBT) which is linked to the Company’s total shareholders return (TSR) to
provide incentive toward the aim of increasing corporate value over the medium- to long-term.

-6-Note: The Company’s TSR = The rate of increase of the Company’s shares over a fixed period + The dividend rate over the
fixed period (Total dividend ÷ Initial share price)(i)
For the bonus, the fixed remuneration of an individual officer is multiplied by a coefficient that is determinedaccording to a set formula based on consolidated performance in a single fiscal year (operating income and profit
attributable to owners of the parent) and on business performance achieved by the individual.
(ii) The coefficient for the BBT is to be calculated as follows.
 The coefficient that acts as a fixed remuneration multiplier is determined by combining two elements: the ratioof the Company’s TSR to the TOPIX growth rate (the “TSR Ratio”); in conjunction with the Company’s TSR
ranking relative to the TSR of other companies (the “TSR Ranking”).
 The Company shall perform assessment, and accordingly award points, each fiscal year over a three-year period
for assessing the TSR Ratio and TSR Ranking.
 If the TSR Ratio amounts to 50% or less, then the coefficient is assigned the minimum value of 0%. If the TSR
Ratio amounts to 100%, then the coefficient is assigned the base value of 10%. If the TSR Ratio amounts to150% or more, then the coefficient is assigned the maximum value of 40%. The coefficient is calculated using
the set formula if the TSR Ratio amounts to more than 50% but less than 100%, or if the TSR Ratio amounts tomore than 100% but less than 150%. The BBT plan is designed so that the coefficient used as a multiplier
increases when the TSR Ratio exceeds 100%, thereby providing the Company’s Officers with greater incentive
to increase shareholder value.
 The TSR Ranking compares TSR of the Company with that of two other Japanese integrated shipping
companies: Nippon Yusen Kabushiki Kaisha (NYK Line) and Mitsui O.S.K. Lines, Ltd. The TSR of bothcompanies is calculated in the same way as that of the Company.
 The amount of BBT remuneration is calculated by multiplying the coefficient as calculated above by the fixed
remuneration of an individual officer. That amount is then converted to points which are awarded to theindividual officer.

For details regarding overview of contents of policies for determining remuneration for each individual
Director, please refer to the Company’s Notice of the 153rd Ordinary General Meeting of Shareholders, pages
48 to 50.
https://www.kline.co.jp/en/ir/stock/meeting/main/012/teaserItems1/0/linkList/0/link/153GMS_Notice.pdf
15) [Supplementary Principle 4.14.2) Policy on Training of Directors and Audit & Supervisory Board
Members]
The Company’s Guidelines stipulate training policy, as follows, with the aim of facilitating appropriate
performance of the roles and responsibilities expected of Directors and Audit & Supervisory Board Members
who constitute a critical element of the governance body.
(1) Within three months from their appointment, the Company’s newly-appointed Directors shall participate inan outside seminar primarily addressing the issues of legal liability under the Companies Act, the Financial
Instruments and Exchange Act and other relevant acts. In addition, the Company shall provide the newlyappointed Directors with commentary books on directors’ responsibilities.
(2) Each year, the Company’s Directors and Audit & Supervisory Board Members shall attend a training
session on compliance matters including competition laws, insider trading regulations and anti-bribery.
(3) When Outside Directors and Outside Audit & Supervisory Board Members take office, the Company shallensure they gain a full understanding of the Group’s business, corporate finance, organizational status,
business environments and management issues by having its departments and officers in charge offer
explanations about such subjects.
(4) The Company’s Directors and Audit & Supervisory Board Members including outside officers shallactively gather information at any and all times, and shall devote themselves to the studies of theCompany’s financial condition, status of compliance, corporate governance and other relevant matters.
16) [Principle 5.1 Policy for Constructive Dialogue With Shareholders]
From the perspective of achieving sustained growth and increasing corporate value over the medium- to longterm, the Company engages in constructive dialogue with its shareholders, etc., and its Guidelines and IR
Policy furthermore stipulate policy, as follows, on establishing frameworks and engaging in efforts to facilitatesuch dialogue.
(1) To achieve sustained growth and increased corporate value over the medium- and long-term, “K” LINE
considers and executes measures that promote constructive dialogue with shareholders,etc.
(2) The Executive Officer in charge of the Company’s Corporate Sustainability, IR and Communication shallbe responsible for overseeing constructive dialogue with shareholders, etc. The relevant departments incorporate such as Corporate Sustainability, IR and Communication, Corporate Planning, General Affairs,
Finance, Accounting, Taxation Legal and Environment Management shall ensure positive cooperation witheach other and endeavor to enhance measures to promote constructive dialogue.
-7-(3) “K” LINE seeks to enhance promoting our shareholders’ understanding of our financial situation andhaving dialogue with them through proactive disclosure and polite questions and answers in General
Meeting of Shareholders, sessions, facility tours, brochures issued for shareholders and investors. We also
explain our business strategy, business description and financial results, etc. to institutional investors
through quarterly financial results briefings, briefings on our management plan and sessions held bysecurity companies, etc. In addition, we seek to enhance dialogue with them through small meetings forsuch investors, conferences and overseas investors’ road show meetings, etc.
(4) As for views and concerns of shareholders, etc. which “K” LINE has received through the above
opportunities, we shall compile them according to their respective importance as appropriate and reportthem collectively to the Board of Directors, etc.
(5) “K” LINE appropriately controls insider information in accordance with Financial Instruments andExchange Act and relevant laws and regulations as well as internal rules.
(6) The Company shall respect the intent and meaning of the Fair Disclosure Rules specified in the Financial
Instruments and Exchange Act and other related laws, and shall furthermore strive to ensure fair
information disclosure in accordance with the Fair Disclosure Policy stipulated in its IR Policy.
Please refer to the Company’s website via the link below to access its entire IR Policy.
https://www.kline.co.jp/en/ir/management/policy.html
17) [Principle 1.4 Cross-Shareholdings]
The Company owns and operates numerous high-cost assets in the form of marine vessels over extended
durations of time. The Company furthermore operates against a backdrop of a business environment epitomized
by business performance that is highly volatile due to foreign exchange, market conditions and other suchfactors that are beyond corporate efforts of individual companies. To achieve long-term and sustainable growth
given such a scenario, the Company maintains cross-shareholdings of partner companies deemed necessary inorder to sustain and strengthen the Company’s transactional and business relationships. Meanwhile, the Boardof Directors assesses whether or not the Company should maintain individual holdings and shall take steps toreduce the Company’s Cross-Shareholdings, to which ends it is to meet no less than once per year and take anobjective standpoint with respect to specifically scrutinizing the purposes of maintaining the individual
holdings and the medium- to long-term economic rationale of maintaining such holdings. Consequently, theCompany decreased the number of stock listings in its portfolio of cross-shareholdings to three stock listings asof March 31, 2021, from 23 corporate listings on March 31, 2015. Upon assessing the economic rationale ofsuch holdings, the Company considers the notion of selling shares in cases where returns gained through theholdings during the fiscal year fall below our cost of capital.
The Guidelines stipulate that, when exercising the voting rights as to the Cross-Shareholdings, the Board of
Directors shall fully examine whether or not the relevant propositions would contribute to the enhancement of
the Company’s corporate value and the shareholders’ common interests, hold dialogues with issuing entities asneeded, and shall determine whether it would vote for or against the said propositions.
18) [Principle 1.7 Related Party Transactions]
The Company has established the following procedures with respect to related party transactions, and finds thatmanagement is capable of supervising such transactions based on such procedures.
(1) The Regulations on Decision-Making Standards stipulate that the Company is to refer matters to beaddressed by and seek prior approval from the Board of Directors with respect to certain mattersirrespective of monetary amount, such that include: transactions with major shareholders whose holdings
account for more than 10% of the Company’s voting rights or transactions between the Company and its
Directors; transactions conducted by a Director with the Company for a third party; transactions involving
conflict of interest; and, debt guarantees of Directors made by the Company. The Regulations on DecisionMaking Standards also stipulate that key developments must be reported to the Board of Directors
subsequent to having carried out a transaction. As such, the Board of Directors supervises appropriatenessof transactions.
(2) The Company shall treat all of its shareholders impartially, and accordingly must not make special
considerations for specific shareholders.
(3) The Company shall determine the presence or absence of related party transactions upon submission ofconfirmation documents for all of the Company’s officers each fiscal term, and shall furthermore verify
transaction details in the event that related party transactions have taken place.

-8-19) [Supplementary Principle 2.3.1) Measures to Address Sustainability Issues],20) [Supplementary Principle 4.2.2) The Formulation of a Basic Policy for Sustainability Initiatives]and21) [Supplementary Principle 3.1.3) Disclosure Concerning Sustainability]
Amid globally accelerating changes in value and behavior, as well as increasing awareness of the need toreduce the environmental burden caused by global warming, “K” LINE considers sustainability management asa priority issue for enhancing corporate value over the medium to long term and discusses the issue
continuously at the Board of Directors’ meetings.
To reinforce management where these issues are key objectives, the Company established the “Corporate
Sustainability Management Committee” in April 2021 and the “GHG Reduction Strategy Committee” in
October 2021. The President & CEO acts as the Chairman of each committee, which is enhancing corporate
value by reviewing and formulating a promotion system for “K” LINE Group’s sustainability management anda GHG reduction strategy. In addition, as part of the reinforcement of the promotion system for sustainability
management implemented in April 2021, the Company established three new groups, the Corporate
Sustainability, IR, and Communication Group, the GHG Reduction Strategy Group, and the Carbon-Neutral
Promotion Group, which are responsible for the practical implementation of the sustainability promotion. They
accelerate sustainability initiatives together with the existing Environment Management Group, the Fuel
Strategy & Procurement Group, and the Advanced Technology Group.
Furthermore, the Company issues its “K” LINE REPORT and Sustainability Booklet, and provides overall
information on sustainability on the sustainability and management plan page of its website, including scenario
analysis based on the Task Force on Climate-Related Disclosures (“TCFD”) recommendations, investments inhuman capital, reduction of environmental burden, diverse workstyles, and investments in intellectual property
to promote technological development and innovation initiatives to support improvement of service quality.
･ Sustainability Website (website providing a comprehensive introduction to the Company’s sustainability
initiatives)
https://www.kline.co.jp/en/csr.html･ Sustainability Booklet (booklet introducing the Company’s overall sustainability initiatives)
https://www.kline.co.jp/en/csr/group/booklet.html･ “K” LINE REPORT (pp.24-31 Innovation, pp.36-37 TCFD Scenario Analysis)
https://www.kline.co.jp/en/ir/library/report.html･ Views and Initiatives on Addressing Climate Change(Response to TCFD)
https://www.kline.co.jp/en/csr/environment.html･ “K” LINE Environmental Vision 2050 (Initiatives on Net-Zero GHG Emissions)
https://www.kline.co.jp/en/csr/environment/management/main/010/teaserItems1/01/linkList/0/link/2111vision%20minaoshi_EN.pdf･ Management Plan “Rolling Plan” in Fiscal Year 2021 (p.13 “Environment-related Investment”, p.18
Investment relating to intellectual property)
https://www.kline.co.jp/en/ir/management/strategy/main/00/teaserItems1/0/tableContents/0/multiFileUpload2_
0/link/2021_Management%20Plan_e.pdf
22) [Supplementary Principle 2-4 Ensuring Diversity, Including Active Participation of Women]and23) [Supplementary Principle 2-4.1) Ensuring Diversity When Hiring Core Human Resources]
The Group has formulated the “Charter of Conduct for the “K” LINE Group companies” as standards of
behavior for the entire Group. In the human rights section of the Charter, the Group pledges that the “K” LINE
Group will consistently respect human rights and properly consider the personality, individuality and diversityof its corporate members and improve work safety and conditions to offer them comfort and affluence.
Furthermore, in the “K” LINE Implementation Guideline for Charter of Conduct, “K” LINE has pledged toeliminate any discrimination in employment or compensation based on nationality, gender, religion, social
class, or other social status, and to ensure equal opportunity in the implementation of its human resourcesmanagement, working to ensure diversity in both managerial posts and among general employees.
The Group has local offices and affiliates in more than 20 countries and is composed of richly diverse
employees. Furthermore, foreigners make up around 97% of crew members on vessels controlled by “K” LINE-9-

(including the crew members of Group companies) and more than 90% of managerial posts (captains and chiefengineers). At our Japanese headquarters as well, the Company conducts hiring and appointments regardless ofnationality or gender. In addition to our Human Resource Policy, Policy on improvement of work environments
inside the Company, and Basic Human Resource Management Policies, the Company discloses data related toour overall human resources system and objectives related to female managerial posts on our website. To
encourage the active participation of women, we are working to increase the number of female employees inmanagerial posts and leadership roles by 120% from April 2019 through March 2022. To do so, we establishedand are pursuing objectives to promote the creation of career building support and workplace environments.
Regarding foreigners and mid-career hires, we are promoting human resources diversity in our hiring andappointment in line with the Group’s business strategies.
･ Sustainability Website (website providing a comprehensive introduction to the Company’s sustainability
initiatives)
https://www.kline.co.jp/en/csr.html･ “K” LINE REPORT (pp.40-43 Basic Human Resource Management Policies)
https://www.kline.co.jp/en/ir/library/report/main/011110/teaserItems1/00/file/KLR21E_all_1203(s)_spread.pdf･ Policy on Improvement of Work Environments Inside the Company (“Basic Principle”)
https://www.kline.co.jp/en/csr/social/human_resource/human_rights.html･ Action plan to promote the active participation of womenhttps://www.kline.co.jp/ja/csr/social/human_resource/human_rights/main/01/teaserItems1/01/linkList/0/link/koudoukeikaku.pdf (Japanese only)･ Approach to human resources development(Onshore Workers)
https://www.kline.co.jp/en/csr/social/human_resource/human_resource.html(Marine Technical Personnel)
https://www.kline.co.jp/en/csr/social/human_resource/human_resource_sea.html
24) [Principle 2.6 Roles of Corporate Pension Funds as Asset Owners]
The Company has adopted a defined-benefit corporate pension plan, and accordingly strives to ensure safe andefficient management of the plan. To such ends, the Company has established the Pension Asset Management
Committee which is chaired by the General Manager of Finance Group who serves as the pension fundmanager, and whose membership consists of individuals in charge of pension fund duties in Finance andHuman Resources divisions. The Company has established fundamental policies and asset management
guidelines particularly with respect to safely and efficiently managing pension funds. The Company
accordingly engages in efforts involving human resources and administration serving as the parent entity of thepension plan, with the aim of ensuring that the Pension Asset Management Committee implements the functionof monitoring the entity entrusted with asset management.
Moreover, managing the pension plan involves ensuring that the utmost respect is devoted to interests of thoseenrolled in the corporate pension plan.

2. Capital Structure
Foreign Shareholding Ratio

30% or more

- 10 -

[Status of Major Shareholders] [Updated]
Name

Number of Shares Owned(Shares)

Shareholding Ratio(%)

ECM MF

10,716,400

11.43

GOLDMAN SACHS INTERNATIONAL

10,553,600

11.25

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

5,836,900

6.22

MLI FOR CLIENT GENERAL OMNI NONCOLLATERAL NON TREATY-PB

5,803,000

6.19

J.P. MORGAN SECURITIES PLC FOR
AND ON BEHALF OF ITS CLIENTSJPMSP RE CLIENT ASSETS-SEGR ACCT

5,100,000

5.44

CGML PB CLIENT
ACCOUNT/COLLATERAL

4,722,000

5.03

Custody Bank of Japan, Ltd. (trust account)

2,418,800

2.58

IMABARI SHIPBUILDING CO., LTD.

2,352,300

2.50

Custody Bank of Japan, Ltd.
(Kawasaki Heavy Industries, Ltd. retirement
benefit trust account re-entrusted by Mizuho
Trust & Banking Co., Ltd.)2,035,407

2.17

Sompo Japan Insurance Inc.

1,910,700

2.03

Controlling Shareholder (except for Parent)―――

Parent (Listed Stock Market)

N/A

Supplementary Explanation―――

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange First Section

Fiscal Year-End

MarchType of Business

Marine transportation

Number of Employees (Consolidated) at Endof the Previous Fiscal Year

1,000 or more

Net Sales (Consolidated) for the Previous
Fiscal Year

From ¥100 billion to less than ¥1 trillion

Number of Consolidated Subsidiaries at Endof the Previous Fiscal Year

From 100 to less than 300

4. Policy for Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder―――- 11 -

5. Special Circumstances Which May Have Material Impact on Corporate Governance
KAWASAKI KINKAI KISEN KAISHA, LTD. (hereinafter “KAWASAKI KINKAI”), the Company’s
subsidiary, is listed on the Second Section of the Tokyo Stock Exchange. Its mainstay business is that ofcoastal, ferry, and international short-sea routes, and engages in business that leverages their customer base in
their unique business areas. It plays an important role in the Group with respect to its Corporate Principle inserving “as an integrated logistics company grown from shipping business.” The notion that it is a listedcompany is significant in terms of it being subject to objective evaluations in the stock market while ensuringthat it has access to diverse means of financing.
The Company’s policy regarding corporate governance in light of its relationship with KAWASAKI KINKAI is
as follows.
 The Company extends its Charter of Conduct and environmental management systems to KAWASAKIKINKAI, and accordingly does not exclude it from the notion that it is part of the Group as a whole.
 KAWASAKI KINKAI manages internal information in a manner that adheres to the Financial Instruments
and Exchange Act, securities listing regulations of stock exchanges, and other market-related laws andregulations. It also maintains management policy that takes account of its relationships with its respective
stakeholders, which is also respected by the Company.

- 12 -

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

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

15

Term of Office Stipulated in Articles ofIncorporation

1 yearChairperson of the Board

President

Number of Directors

10

Appointment of Outside Directors

Appointed

Number of Outside Directors

4

Number of Independent Officers DesignatedFrom Among Outside Directors

3Outside Directors’ Relationship With the Company (1) [Updated]
Name

Attribute

Keiji Yamada

Other

Ryuhei Uchida

From another company

Kozue Shiga

Attorney at law

Tsuyoshi Kameoka

From another company

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k




* 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; and“” when a close relative of the director fell under the category in the pasta. Executive (a person who executes business; hereinafter, the same) of the Company or its subsidiaryb. Non-executive director or executive of the parent of the Company
c. Executive of a fellow subsidiary of the Company
d. Party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the Company or an executive thereof
f. Consultant, accounting professional or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as a director
g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a
corporation)h. Executive of a client or supplier of the Company (which does not correspond to any of d., e., or f.) (thedirector himself/herself only)
i. Executive of a corporation to which outside officers are mutually appointed (the director himself/herself
only)
j. Executive of a corporation that receives a donation from the Company (the director himself/herself only)
k. Other- 13 -

Outside Directors’ Relationship With the Company (2) [Updated]

Name

Keiji Yamada

Designation as
Independent
OfficerSupplementary
Explanation of theRelationship

Reasons for Appointment
Mr. Keiji Yamada has experience inprominent positions with central/local
governmental offices such as former
Ministry of Home Affairs, and also
served 4 terms (16 years) as Governorof Kyoto Prefecture. Mr. Yamada does
not have prior experience of direct
involvement in corporate management,
however, he has been an Outside
Director of the Company since June2019 so his wide range ofexperience/personal network and insightmay be utilized in the Company’s
management. He is fulfilling his role ofmaking active suggestions at the Boardof Directors meetings and supervising
the execution of business throughhis activities in his position as
Nominating Advisory Committee
Member and Remuneration Advisory
Committee Member. Accordingly, theCompany has appointed him as Outside
Director. As there is no possibility thatconflict of interest may occur between
Mr. Yamada and general shareholders,the Company designates him as anindependent director.

–- 14 -

Name

Ryuhei Uchida

Designation as
Independent
Officer

Supplementary
Explanation of theRelationship

Reasons for Appointment

Mr. Ryuhei Uchidasatisfies the requisite for
Outside Director in the
Companies Act;however, due to
conflicts with theshareholder requisite in
the criteria for
independence of Outside
Directors provided by
the Company since heserves as a Director ofEffissimo CapitalManagement Pte Ltd., ashareholder of theCompany, the Company
designates him as a nonindependent Outside
Director.

Mr. Ryuhei Uchida first joined
Mitsubishi Corporation, mainly served
for supporting investments for Japaneseand foreign non-listed companies, thenjoined Innovation Network Corporationof Japan, being in charge of investments
for foreign non-listed companies andsupporting business start-ups forJapanese non-listed companies, as well
as also serving as an Outside Director
for both British and Chilean companies.
Currently he is in charge of managing
investments of Japanese-listedcompanies as a Director of Effissimo
Capital Management Pte Ltd. He
has been an Outside Director of theCompany since June 2019 so hisabundant experience and insight incorporate value enhancement may beutilized in the Company’s management.
The Company judges that fulfilling hisrole through his proactive opinions
given as a Director with the perspectiveof our shareholder and his precise
supervision on its management and theexecution of business will benefit
general shareholders and contribute toimproving the Group’s corporate
governance. Accordingly, the Company
has appointed him as Outside Director.

- 15 -

Name

Kozue Shiga

Tsuyoshi Kameoka

Designation as
Independent
OfficerSupplementary
Explanation of theRelationship

Reasons for Appointment–

Ms. Kozue Shiga has expert knowledge
and experience as a lawyer, and she
assumed Outside Audit & Supervisory
Board Member of the Company in June
2016 after having served as an outside
director and auditor of several listedcompanies. Though she does not haveprior experience of direct involvement
in corporate management by methods
other than serving as an outside board
member, based on her abundant
experience and from a broad
perspective, she is appropriately
fulfilling her role of making active
suggestions at the Board of Directors
meetings and supervising the executionof business through her activities in her
position as Nominating Advisory
Committee Chairperson andRemuneration Advisory Committee
Member. Accordingly, the Company has
appointed her as Outside Director. As
there is no possibility that conflict ofinterest may occur between Ms. Shigaand general shareholders, the Company
designates her as an independent
director.

Mr. Tsuyoshi Kameoka
worked for Idemitsu
Kosan Co.,Ltd. withwhich the Company
conducts business
transactions with sales
accounting for less than
2% of the Company’s
consolidated sales, andless than 1% of theconsolidated sales ofsaid company.

Mr. Tsuyoshi Kameoka mainly engaged
in product import & export anddomestic sales since he joined Shell
Sekiyu K.K. Following his appointment
as Oil Business COO, he assumed theposition of the President andRepresentative Director of Showa Shell
Sekiyu K.K. in 2015. Then, in April
2019, he realized its businessintegration with Idemitsu Kosan Co.,
Ltd., looking ahead to changes in the oilmarket in the future. The Company
judges that his abundant experience andbroad insight in business administration
will contribute to the company’s
management. Accordingly, theCompany has appointed him as Outside
Director. As there is no possibility thatconflict of interest may occur between
Mr. Kameoka and general shareholders,the Company designates him as anindependent director.

- 16 -

[Voluntary Committees]
Voluntary Establishment of Committee(s)Equivalent to Nominating Committee orRemuneration Committee

Established

Committee’s Name, Composition, and Chairperson’s Attributes
Committee Equivalent toNominating Committee
Committee’s Name

Nominating Advisory Committee

Committee Equivalent toRemuneration Committee
Remuneration Advisory Committee

Total Committee Members

44

Full-Time Members

00Inside Directors

11Outside Directors

33Outside Experts

0

0

Other

0

0

Chairperson

Outside Director

Outside Director

Supplementary Explanation [Updated]
Article 21 of the Guidelines stipulates details regarding the Nominating Advisory Committee and theRemuneration Advisory Committee.
(Start of excerpt)
Article 21
1. The Company shall put and keep in place the Nominating Advisory Committee and the Remuneration
Advisory Committee as advisory committees to the Board of Directors in the manner described below.
2. The Nominating Advisory Committee and the Remuneration Advisory Committee shall be comprised of allof the Outside Directors, the Director and Chairman, and the President & CEO. (The Outside Directors
shall appoint the chairperson of each Committee from among themselves.)
3. In response to inquiries from the Board of Directors, the Nominating Advisory Committee shall deliberateon:i. Reasonableness of proposals for appointment or dismissal of the Company’s officers; andii. Any other matters inquired from the Board of Directors concerning appointment or dismissal of theCompany’s officers.
4. In response to inquiries from the Board of Directors, the Remuneration Advisory Committee shalldeliberate on:i. Institutional design of officers’ remunerations;ii. Level of officers’ remuneration; andiii. Any other matters inquired from the Board of Directors concerning officers’ remunerations.
5. Each set of rules on operation of the Nominating Advisory Committee and the Remuneration Advisory
Committee shall be separately prescribed.
(End of excerpt)
The attendance in the fiscal year ended March 31, 2021 is as follows:
Nominating Advisory Committee
Kozue Shiga(Attended 5/5 meetings) (Assumed office on June 23, 2020) *Chairperson
Seiichi Tanaka(Attended 7/7 meetings)
Keiji Yamada(Attended 7/7 meetings)- 17 -

Yukikazu Myochin
Akira Okabe
Eizo Murakami(Attended 7/7 meetings)(Attended 2/2 meetings) (Retired from office on June 23, 2020)(Attended 2/2 meetings) (Retired from office on June 23, 2020)

Remuneration Advisory Committee
Seiichi Tanaka(Attended 4/4 meetings) *Chairperson
Kozue Shiga(Attended 2.2 meetings) (Assumed office on June 23, 2020)
Keiji Yamada(Attended 4/4 meetings)
Yukikazu Myochin(Attended 4/4 meetings)
Akira Okabe(Attended 2/2 meetings) (Retired from office on June 23, 2020)
Eizo Murakami(Attended 2/2 meetings) (Retired from office on June 23, 2020)
Status of establishment of secretariats, etc.
The Executive Officer in charge of General Affairs is in charge of secretariats which have been established withrespect to each of the committees.
[Audit & Supervisory Board Members]
Establishment of Audit & Supervisory Board

Established

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

5

Number of Audit & Supervisory Board Members

4

Cooperation Among Audit & Supervisory Board Members, Financial Auditor and Internal Audit Department
The Audit & Supervisory Board Members receive reports from the Accounting Auditor regarding audit plans
and audit results on a regular basis, and otherwise maintains close cooperation with the Accounting Auditor byexchanging information and opinions as necessary.
The Audit & Supervisory Board Members hold meetings with the Internal Audit Group on a regular basis, andalso receive explanations from the Internal Audit Group regarding audit plans and progress thereof. Monthly
reports of matters that the Internal Audit Group reports to the Representative Directors are also circulated to the
Audit & Supervisory Board Members. Meanwhile, the Company strives to ensure information sharing which
also involves distributing reports on operational audits conducted by the Audit & Supervisory Board Members
to the Internal Audit Group. In addition, when the Audit & Supervisory Board Members conduct on-site auditsof subsidiaries and affiliated companies, they engage in mutual coordination and cooperation in a manner thatinvolves cooperating with the Accounting Auditor and the Internal Audit Group as necessary.
Appointment of Outside Audit & Supervisory
Board Member

Appointed

Number of Outside Audit & Supervisory Board
Members2

Number of Independent Officers DesignatedFrom Among Outside Audit & Supervisory
Board Members

2

Outside Audit & Supervisory Board Members’ Relationship With the Company (1)Name
Atsumi Harasawa

Attribute

Relationship with the Company*a

Attorney at law- 18 -

b

c

d

e

f

g

h

i

j

k

l

m

Name
Shinsuke Kubo

Attribute

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

l

m

Certified Public
Accountant* 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; and“” when a close relative of the Audit & Supervisory Board Member fell under the category in the pasta. Executive (a person who executes business; hereinafter, the same) of the Company or its subsidiaryb. Non-executive director or accounting advisor of the Company or its subsidiaryc. Non-executive director or executive of the parent of the Company
d. Audit & Supervisory Board Member of the parent of the Company
e. Executive of a fellow subsidiary of the Company
f. Party whose major client or supplier is the Company or an executive thereof
g. Major client or supplier of the Company or an executive thereofh. Consultant, accounting professional or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as an Audit & Supervisory
Board Member
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a
corporation)
j. Executive of a client or supplier of the Company (which does not correspond to any of f., g., or h.) (theAudit & Supervisory Board Member himself/herself only)
k. Executive of a corporation to which outside officers are mutually appointed (the Audit & Supervisory
Board Member himself/herself only)
l. Executive of a corporation that receives a donation from the Company (the Audit & Supervisory Board
Member himself/herself only)
m. Other- 19 -

Outside Audit & Supervisory Board Members’ Relationship With the Company (2)Name

Atsumi Harasawa

Shinsuke Kubo

Designation as
Independent
OfficerSupplementary
Explanation of theRelationship

Reasons for Appointment–

Ms. Atsumi Harasawa possesses
extensive expert knowledge andexperience as attorney at law and also
has knowledge and experience in thetransportation sector by contributing on
safety from the technical side beingcertified as a first class aircraft
maintenance technician at Japan Airlines
Co., Ltd. Ms. Harasawa does not haveprior experience of direct involvement incorporate management apart from being
an Outside Auditor, however, theCompany judges that her presence will
enhance the diversity of its Board
member structure, and she will perform
effective auditing from an outside
independent standpoint as an Outside
Audit & Supervisory Board Member.
Accordingly, the Company has
appointed her as Outside Audit &Supervisory Board Member. As there isno possibility that conflict of interest
may occur between Ms. Harasawa andgeneral shareholders, the Company
designates her as an independent
director.

–

Mr. Shinsuke Kubo, a CPA in Japan, hasa variety of achievements andexperiences through his work with both
Japanese and foreign audit firms, in thefields of auditing, IPO support, corporate
revitalization and M&A. Mr. Kubo also
has abundant experience in founding andmanaging venture businesses andcompanies that support reactivation ofother businesses, the Company judgesthat he will perform effective auditingfrom an outside independent standpoint
as an Outside Audit & Supervisory
Board Member. Accordingly, theCompany has appointed him as Outside
Audit & Supervisory Board Member.
As there is no possibility that conflict ofinterest may occur between Mr. Kubo
and general shareholders, the Company
designates him as an independent
director.

- 20 -

[Independent Officers]
Number of Independent Officers

5

Matters Relating to Independent Officers
Please refer to subsection I. 1. 8) [Principle 4.9 Independence Standards and Qualification for Independent
Outside Directors], previously in this document, for details on the “Criteria for the Independence of Outside
Directors.”[Incentives]
Implementation of Measures to Provide
Incentives to Directors

Performance-linked remuneration

Supplementary Explanation [Updated]
Pursuant to resolution of its Ordinary General Meeting of Shareholders held on June 24, 2016, the Company
has adopted its Board Benefit Trust (BBT) performance-based share remuneration plan with the aim of raisingawareness of contributions made with respect to increasing business performance and corporate value over the
medium- to long-term by more explicitly clarifying the connection between remuneration for Directors(Executive Directors only) and share value. Under the BBT plan, the Company’s shares, etc. are to be delivered
through the trust pursuant to the Regulations for Delivery of Shares to Officers as approved by the Board of
Directors. The amount of remuneration for Directors who contribute to the trust over four consecutive fiscal
years based on the BBT plan shall be a maximum of ¥480 million and Directors shall, in principle, receive
shares of the Company upon their retirement.
Moreover, per the meeting of the Board of Directors held on April 26, 2019, the Company has revised its
schemes for bonuses and the BBT plan. Accordingly, bonuses which had previously been determined on a peroccasion basis shall mainly be linked to business performance targets in single fiscal years, and BBT shall belinked to the Company’s total shareholders return (TSR). Through such revisions involving both the bonuses
and the BBT plan, the Company aims to strike an optimal balance between short-term performance andincreasing corporate value over the medium- to long-term, while providing the Company’s officers with soundincentive to facilitate sustainable growth.
Please refer to pages 53 to 55 of the Company’s 153rd Annual Securities Report (Japanese only) for details on
the Company’s policy for determining proportions of remuneration in the form of performance-based
remuneration and remuneration other than performance-based remuneration, benchmarks pertaining toperformance-based remuneration, methods of determining amounts of such performance-based remuneration,and reasons for having selected such benchmarks.
https://data.swcms.net/file/kline/dam/jcr:4f5cb35e-4e9b-42cc-9789-9edb1e16ebe7/S100LLMF.pdf(Japanese only)
Recipients of Share Options
Supplementary Explanation―――[Director Remuneration]
Disclosure of Individual Directors’ Remuneration

No individual disclosure- 21 -

Supplementary Explanation [Updated]
The Company paid ¥319 million to 12 Directors and ¥84 million to five Audit & Supervisory Board Members
as officer’s remuneration pertaining to the fiscal year ended March 31, 2021. The above includes remuneration
for three Directors and one Audit & Supervisory Board Member who retired from their positions due to the
expiration of their terms of office upon the conclusion of the 152nd Ordinary General Meeting of Shareholders
held on June 23, 2020.
The above includes ¥1 million of expenses relating to the performance-based share remuneration plan for two
Directors.
Policy for Determining Remuneration Amounts
or Calculation Methods Thereof

Established

Disclosure of Policy for Determining Remuneration Amounts or Calculation Methods Thereof
For Board of Directors policies in determining the remuneration of Directors, please refer to above I 1. 13)[Principle 3.1 (iii) Board of Directors Policies and Procedures in Determining the Remuneration of the Senior
Management and Directors].
The remuneration, etc. for Audit & Supervisory Board Members shall solely comprise monthly remuneration.
Monthly remuneration for each Audit & Supervisory Board Member is determined after deliberations by Audit& Supervisory Board Members, within the limit of the maximum amount of monthly remuneration for Audit &Supervisory Board Members resolved at the General Meeting of Shareholders.
The retirement benefits plan for Directors and Audit & Supervisory Board Members was terminated in June
2006.
[Supporting System for Outside Directors and/or Audit & Supervisory Board Members]
The Company shall support the smooth execution of duties of its Outside Directors by having the Corporate
Planning Group provide them with briefings and information necessary prior to meetings of the Board of
Directors and by furnishing them with reports on important matters of business execution.
Moreover, the Company shall establish a framework for assisting the Audit & Supervisory Board Members byappointing employees to assist them and by establishing regulations regarding such appointments. The
Company shall ensure that the employees assisting Audit & Supervisory Board Members maintainindependence from the Directors by prohibiting such employees from concurrently performing other duties
related to business execution, and having the Audit & Supervisory Board Members themselves subject theemployees assisting Audit & Supervisory Board Members to examinations.
[Status of Persons Who Have Retired From a Position Such as Representative Director and President]
Retired Representative Director and Presidents, etc. Holding Advisory or Any Other Position in the Company- 22 -Name

Isao
Shintani

Eizo
Murakami

Title/
Position

Responsibilities

Honorary
AdvisorFurnishes advice
based on requests
from management
and engages in
activities ofindustry
associations andeconomicorganizations

SpecialExecutive
AdvisorFurnishes advice
based on requests
from management
and engages in
activities ofindustry
associations andeconomicorganizations

Working Form and Conditions(Full-time/Part-time,
Paid/Unpaid, etc.)

Date of
Retirementfrom Position
Such asPresident

Part-time/Unpaid

March 31,
2000

N/A

March 31,2019

Subject toupper age
limit ofinternal
rulesPart-time/Paid

Total Number of Retired Representative Director and Presidents, etc. Holding
Advisory or Any Other Position in the Company

Term of
Office2

Other Matters [Updated]
There is no senior advisor position at the Company because it was terminated in November 2017.
Whereas the Company maintains advisory positions other than above, there are no persons serving as advisors
upon retirement of those including Representative Director and President.
The Company’s advisors take part in activities of industry associations and other such organizations drawing on
their deep experience and knowledge related to the shipping industry. They furthermore furnish appropriate
advice upon request .
The Company’s advisors are not involved in management and do not attend meetings of the Board of Directors,
Nominating Advisory Committee, or Remuneration Advisory Committee.

2. Matters on Functions of Business Execution, Audit and Supervision, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System) [Updated](Status of business execution)
The Company’s Board of Directors is comprised of ten Directors, including four Outside Directors. It
determines the fundamental management policies, matters required by laws and regulations, and otherimportant matters regarding the management of businesses, while supervising the execution of duties by the
Directors. A meeting of the Board of Directors should be held at least once a month. The Company also adopts
a system of making resolutions in writing for the Board of Directors, which enables the flexible operation of theboard.
Apart from the Board of Directors, the Company hosts a Management Conference that requires the attendanceof the Director and Chairman, Vice President Executive Officer, Executive Officers equivalent to or higher than
Senior Executive Officer, Executive Officers responsible for business units, Executive Officers in charge ofCorporate Planning, Finance and Accounting as well as Audit & Supervisory Board Members once a week inprinciple. By doing so, the Company establishes a system that contributes to decision-making by the President& CEO or the delegate based on open discussions.
The attendance at the Board meetings in the fiscal year ended March 31, 2021 is as follows:- 23 -

Yukikazu Myochin, Director
Atsuo Asano, Director
Yukio Toriyama, Director
Kazuhiko Harigai, Director
Yasunari Sonobe, Director
Makoto Arai, Director
Seiichi Tanaka, Director
Keiji Yamada, Director
Ryuhei Uchida, Director
Kozue Shiga, Director(Attended 18/18 meetings)(Attended 18/18 meetings)(Attended 18/18 meetings)(Attended 18/18 meetings)(Attended 13/13 meetings) *Assumed office on June 23, 2020
(Attended 13/13 meetings) *Assumed office on June 23, 2020
(Attended 18/18 meetings)(Attended 17/18 meetings)(Attended 18/18 meetings)(Attended 18/18 meetings) *Including attendance as Audit & Supervisory
Board Member before June 2020
Eizo Murakami, Director(Attended 5/5 meetings) *Retired from office on June 23, 2020
Harusato Nihei, Director(Attended 5/5 meetings) *Retired from office on June 23, 2020
Akira Okabe, Director(Attended 5/5 meetings) *Retired from office on June 23, 2020
Tsuyoshi Yamauchi, Audit & Supervisory Board Member (Attended 18/18 meetings)
Kunihiko Arai, Audit & Supervisory Board Member(Attended 18/18 meetings)
Atsumi Harasawa, Audit & Supervisory Board Member(Attended 18/18 meetings)
Shinsuke Kubo, Audit & Supervisory Board Member(Attended 13/13/ meetings)* Assumed office on June 23, 2020
(Reasons for adopting the system of a company with Audit & Supervisory Board)
The Company has four Audit & Supervisory Board Members as of June 23, 2020. The Company has adopted
this system upon having deemed it to be effective with respect to corporate governance amid a scenario wherelegal revisions in recent years have strengthened the authority and independence of Audit & Supervisory Board
Members. Meanwhile, the Company recognizes that its corporate governance is functioning appropriately
under the system which encompasses the Board of Directors, Audit & Supervisory Board, Management
Conference and other such bodies, given that procedures being carried out in a manner sufficiently aligned withlegal code.

(Status of accounting audit)
The Company has entered into an audit contract with an auditing firm (Ernst & Young ShinNihon LLC) which
performs audits from a standpoint of fairness and impartiality.
Name of the certified public accountants/
Affiliated auditing firm
who executed the audit duties
Kazuya Kitazumi/ Ernst & Young ShinNihon LLC
Satoshi Uchida/ Ernst & Young ShinNihon LLC
Masashi Kobayashi/ Ernst & Young ShinNihon LLC
Audit operations assistants
Certified Public Accountant
Other assistants

14
36(Status of nomination of candidates for the Directors and the Audit & Supervisory Board Members)
In accordance with the qualifications stipulated in the Guidelines, the Board of Directors shall select candidates
for the Directors and the Audit & Supervisory Board Members upon the fair, transparent and rigorous
deliberations and recommendations of the Nominating Advisory Committee and also subject to the consent of
the Audit & Supervisory Board as to candidates for the Audit & Supervisory Board Member.
(Status of determination of remuneration for the Senior Management and the Directors)
The Company shall decide the remuneration subject to the fair deliberations and recommendations of theRemuneration Advisory Committee, which was established in November 2015.
(Status regarding limited liability contract)
The Company’s Articles of Incorporation stipulate that, pursuant to the provisions of Article 427, Paragraph (1)of the Companies Act, the Company may conclude limited liability contracts as prescribed in Article 423,
Paragraph (1) of the said Act with Directors (excluding Executive Directors) and Audit & Supervisory Board- 24 -

Members. Based on the provisions, the Company has concluded limited liability contracts with Non-Executive
Directors Keiji Yamada, Ryuhei Uchida, Kozue Shiga and Tsuyoshi Kameoka, as well as all Audit &Supervisory Board Members. When acting in good faith and in the absence of any serious negligence, the limitof liability on the basis of any such contract will amount to either ¥10 million or an amount stipulated by laws
and regulations, whichever amount may be higher.

3. Reasons for Adoption of Current Corporate Governance System [Updated]
The Company strives to streamline business execution by strengthening the supervisory function and delegating
authority to Unit Supervising Executive Officers, which has involved adopting a Board of Directors and a Unit
Supervisory System encompassing multiple Outside Directors. The Company has adopted its current system
under which it strives to maintain and improve the effectiveness of its audits by coordinating efforts of the
Audit & Supervisory Board Members and the Internal Audit Group, premised on the notion that such a systemenables the Company to respond to its commitment bestowed on it by its shareholders and other stakeholders.
The Company adopted the Unit Supervisory System in April 2016 with the aim of taking appropriate risk andidentifying business execution responsibility upon having appointed Unit Supervising Executive Officers tooversee multiple divisions positioned under the President & CEO who spearheads execution. For details, pleaserefer to the Company’s website.
https://www.kline.co.jp/en/csr/governance/corporate_governance.html
Moreover, the Company’s Outside Directors monitor management and business execution from an independentand objective standpoint during meetings of the Board of Directors, drawing on their diverse experience andknowledge which they have compiled through management of large organizations such as business enterprises.

- 25 -

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Energize General Meeting of Shareholders and Smooth Exercise of Voting Rights
Supplementary Explanations
Early Notification of General
Meeting of Shareholders

The Company sends the notification out approximately three weeks before
the General Meeting of Shareholders.

Scheduling AGMs Avoiding
the Peak Day

The General Meetings of Shareholders have been scheduled on non-peakdays.

Allowing Electronic or
Magnetic Exercise of Voting
RightsIn 2006, the Company adopted a system that enables shareholders to
exercise their voting rights online via the Internet and through other suchmeans.

Participation in Electronic
Voting Platform and Other
Efforts to Enhance the Voting
Environment for Institutional
Investors

The Company participates in the Electronic Voting Platform and otherwise
considers options for offering greater convenience to institutional investors
with respect to exercising their voting rights.

Providing Convocation Noticein English (Translated Fully or
Partially)

The Company prepares full English-language versions of its Convocation
Notices and Business Reports and posts them to the Tokyo Stock Exchange
and to its corporate website.

Other

The Company posts its Convocation Notices (containing the Business
Report) and notifications of resolutions of its General Meetings ofShareholders to the Tokyo Stock Exchange and to its corporate website.
The Convocation Notices are posted six days prior to sending out such
notices.

2. IR Activities [Updated]
Supplementary Explanations

Preparation and Publication ofDisclosure Policy

Specifics of the Disclosure Policy are disclosed in
the Guidelines(https://www.kline.co.jp/en/csr/governance/corporate_governance/main/00/teaserItems1/01/linkList/0/link/corporategovernanceguidelines.pdf) and the IR
Policy(https://www.kline.co.jp/en/ir/management/policy.html) via the corporate website. Furthermore, byadding the Fair Disclosure Policy to the IR Policy,
the Company has clearly stated its response to the
Fair Disclosure Rules specified in the Financial
Instruments and Exchange Act and other related lawsthat came into force on April 1, 2018.

Regular Investor Briefings for
Individual Investors

The Company participates in briefing sessionsorganized by securities companies and other such
entities, holds online investor briefings via theInternet, and otherwise conveys information throughits corporate website.

- 26 -

Explanation byRepresentative

EstablishedSupplementary Explanations
Regular Investor Briefings forAnalysts and Institutional
Investors
Regular Investor Briefings forOverseas Investors

Explanation byRepresentative

The Company holds financial results briefings on aquarterly basis and organizes individual interviewson a regular basis for analysts and institutional
investors in Japan. In addition, the Company holds
small meetings, business briefings, and facility tours.

Established

The Company’s dialogue with overseas institutional
investors involves individual interviews in Europe,
the U.S., and Asia, and participation in conferences
organized by securities companies. In addition, theCompany holds individual interviews and small
meetings with overseas institutional investors. The
Company distributes investor briefing session
materials, audio content, Financial Reports(summary
and Q&A) and other such information in English
upon release of its quarterly financial results.
(https://www.kline.co.jp/en/ir/library/presentation.ht
ml)Established

Posting of IR Materials on
WebsiteThe Investor Relations page of the Company’s
website (https://www.kline.co.jp/en/ir.html) contains
IR News, Financial Highlights, Financial
Reports(summary and Q&A) and audio recordings(Japanese only), “K” LINE REPORT, the
FACTBOOK, brochures issued for shareholders andinvestors (Japanese only), Annual Securities Reports(Japanese only) and Quarterly Reports (Japaneseonly), business briefing materials, online briefing
movies for individual investors, and Financial and
Performance Information including Shipping Market
Information. It also contains Japanese and English
language versions of materials and information thatfacilitate understanding of the Company, including a
profile of the Company and an overview of its
strengths.

Establishment of Department
and/or Manager in Charge ofIR

The Company has established the IR and ESG
Promotion Team of the Corporate Sustainability, IR
and Communication Group as the department incharge of investor relations, and investor relations
activities are carried out by the President, Chief
Financial Officer (CFO), Executive Officer in chargeof Corporate Sustainability, IR and Communication,and the General Manager and staff of the Corporate
Sustainability, IR and Communication Group.

- 27 -

3. Measures to Ensure Due Respect for Stakeholders [Updated]
Supplementary Explanations

Provisions to Ensure Due
Respect for Stakeholders inInternal Rules, etc.

 The Company has established the Charter of Conduct for “K” Line Group
Companies and the “K” Line Implementation Guideline for Charter ofConduct. The Charter of Conduct for “K” Line Group Companies isintended to clearly state principles of behavior for Group companies.
Accordingly, it declares that companies of the “K” LINE Group are to act
in accordance with principles of the Charter of Conduct, thereby
remaining aware that growth or Group companies must be in harmony
with society, premised on the fundamental notion that business activities
are to respect human rights and comply with applicable laws, regulations
and other norms of behavior. In addition, the “K” Line Implementation
Guideline for Charter of Conduct encompasses the Company’s
relationships with its respective stakeholders in stipulating specificguidelines for executing the Charter of Conduct for “K” Line Group
Companies.
 The Company has established the Sustainability Management Promotion
Committee in order to promote sustainability management of “K” LINE
Group and to improve its corporate value. It consists of the Executive
Officers responsible for relevant units and is chaired by the President.

Implementation ofEnvironmental Activities, CSR
Activities, etc.

 The Company grasps sustainability management with two larges
frameworks of “managing the impact of business activities” and “creating
new values,” and aims to build a management structure that emphasizes
social responsibility based on these frameworks.
 The Company has established medium- to long-term goals toward
resolving priority themes of sustainability that have been identified
through stakeholder dialogue, and has furthermore drawn up single fiscalyear targets toward achieving such goals.
 Thirteen companies of the Group have obtained ISO 14001 certificationand have established environmental management systems encompassing
vessel operations. Moreover, the Company promotes environmental
conservation through the Group’s worldwide environmental Drive Green
Network.
 World’s top-level safe operational system enlisting quality standards
derived from the Company’s proprietary expertise Customers and business partners:* Cooperation in conserving the environment andcontributing to society* Fair business transactions without discrimination
 Shareholders and investors: The Charter of Conduct for “K” Line Group
Companies and the “K” Line Implementation Guideline for Charter ofConduct stipulate that the Company is to develop relationships of trust
through extensive communications with its shareholders and otherinvestors.
 Employees: * Equal opportunity in hiring and treatment* Stratified training suited to improving professional
competency* Ensuring health and safety of the workplace Society: Social action programs including those that entail exchangewith local communities in Japan and abroad, disaster relief, and support
for environmental projects- 28 -

Supplementary Explanations

Formulation of Policies for
Information Provision to
Stakeholders

The Company complies with laws, rules, regulations, etc., relating todisclosure of Company information such as the Companies Act, theFinancial Instruments and Exchange Act, the Rules and Regulations of thestock exchanges where the Company’s stock is listed, the Unfair
Competition Prevention Act, and the Act on the Protection of Personal
Information, and furthermore provides information to each of its
stakeholders in a timely and impartial manner. The Company establishes“IR Policy” in which standards and methods of disclosure with regard to
information to be disclosed to shareholders and investors are stipulated, andalso establishes “Fair Disclosure Policy” which is the basic principle for fair
information disclosure. The both Policies are posted on the Company’s
website:https://www.kline.co.jp/en/ir/management/policy.html .

- 29 -

IV. Matters Related to Internal Control System
1. Basic Views on Internal Control System and Progress of System Development [Updated]
The Board of Directors passed a resolution with respect to the Company’s internal control system in May 2006,
and the Company subsequently made a series of revisions. The Company is currently expanding the internal
control system across the Group, established as follows.
I. Basic framework regarding internal control
The Company continues its efforts to establish a system to ensure the execution of duties by its Directors incompliance with laws and regulations and the Articles of Incorporation, as well as a system to ensure theappropriateness of businesses of the corporate group comprised of the Company and its subsidiaries(hereinafter, the “Group”) specified by laws and regulations.
To be precise, the Company’s Board of Directors assumes responsibility for establishing an internal control
system, evaluating its effectiveness and ensuring its functions.
Currently, the Company establishes the following systems and will strive to review and improve them on acontinuous basis and as necessary in order to enhance the effectiveness of its internal control.
II. Internal control system
1. System to ensure the execution of duties by the Company’s Directors, Executive Officers and employees incompliance with laws and regulations as well as the Articles of Incorporation
The Company has established the Charter of Conduct for “K” Line Group Companies and the “K” Line
Implementation Guideline for Charter of Conduct, in which the compliance of the Group with laws andregulations as well as business ethics is specified as one of the principles of the conduct. The Directors are
required to ensure thorough implementation of compliance and establish an effective internal system in order toachieve it. To that end, the Company constantly implements the following measures:(1) The Company promotes the appropriate management of the Board of Directors in accordance with theRules for the Board of Directors, in order to ensure the executions of duties by the Directors in compliancewith laws and regulations as well as the Articles of Incorporation.
(2) The Company establishes the Rules for Executive Officers, which specify matters to be complied with by
the Executive Officers in order to ensure that the execution of duties by the Executive Officers appointed
by the Board of Directors is in compliance with laws and regulations as well as the Articles ofIncorporation, and promotes the active and faithful execution of the business delegated to them.
(3) The Company establishes internal rules such as the Rules for Employees in order to ensure the execution ofduties by the employees in compliance with laws and regulations as well as the Articles of Incorporation.
(4) The Internal Audit Group supports the performance of responsibilities by the Board of Directors regarding
the establishment, maintenance and improvement of the internal control system through the supervision andverification of the system.
(5) The Company establishes the Compliance Committee chaired by the President & CEO and strives todevelop and maintain its compliance system.
(6) The Company establishes a whistle-blowing system called the Hotline System in order to identify andappropriately handle legal violations and other compliance issues at an early stage. The Group specifies
some internal contacts as well as a law firm as an external contact for whistle-blowers. This system ismanaged under the Rules for the Hotline System.
2. System for retaining and managing information pertaining to the execution of duties by the Company’s
Directors
The Company appropriately retains and manages information regarding the execution of duties by its Directors
in the form of fully searchable data that ensures the availability of perusal at any time, in accordance with theRules for the Board of Directors and the Regulations for Documentation during the period specified by suchrules and regulations.
3. Rules and systems for the Company to manage risks of loss
The Company remains aware of the risks, as listed below, inherent in the course of conducting business.
Accordingly, we develop systems for identifying and managing the risks as well as addressing the respective
risks.
(1) Risks related to safe operation of vessels (including incidents involving seawater contamination)(2) Risks related to major disasters- 30 -

(3) Risks related to compliance(4) Other management risks
The Company establishes crisis and risk management systems which has involved drawing up its Crisis
Management Regulations to ensure the Company fulfills its social responsibility as a corporation in the event ofa crisis whereby a risk materializes. The Company has established committees to address each of theaforementioned risks, and has accordingly established the Crisis Management Committee as a body that unifies
the four committees and otherwise controls and facilitates overall crisis and risk management initiatives.
Committee’s Name
Function
Crisis Management Committee
Supervision of overall crisis and risk management initiatives
Ship Safety Promotion Committee
Implementation of measures to ensure safety of the Company’s
vessels in operation, prevention of vessel accidents (including
incidents involving seawater contamination), and response in
the event of an accident
Disaster Response Committee
Major disaster preparation during normal times and response in
the event of a disaster
Compliance Committee
Responding to compliance-related issues
Management Risk Committee
Responding to other management risks
4. System to ensure that Directors of the Company execute their duties efficiently
The Company adopts the executive officer system and promotes smooth decision-making on the execution ofduties.
[Board of Directors] The Board of Directors determines the fundamental management policies, matters requiredby laws and regulations, and other important matters regarding the management of businesses, while
supervising the execution of duties by the Directors and Executive Officers. A meeting of the Board of
Directors should be held at least once a month.
The Company adopts a system of making resolutions in writing for the Board of Directors, which enables theflexible operation of the board.
[Management Conference] The Company hosts a Management Conference that requires the attendance of the
Director and Chairman, Executive Officers equivalent to or higher than Senior Executive Officer, Executive
Officers responsible for units, and Executive Officers in charge of corporate planning, finance and accounting
as well as Audit & Supervisory Board Members once a week in principle. By doing so, the Company
establishes a system that contributes to decision-making by the President & CEO or the delegate based on open
discussions.
[Executive Officers’ Meeting] Executive Officers’ Meetings are held once a month in principle, attended by
Executive Officers including those concurrently serving as Directors, and Audit & Supervisory Board
Members. It acts as a forum for reporting and discussion regarding matters that include business execution
encompassing monthly income and expenditure of operating organizations and decision-matters.
5. Systems to ensure proper business operations of the corporate group comprised of the Company and its
subsidiaries
The Company establishes the Charter of Conduct for “K” Line Group Companies as the code of conduct
applicable to the entire Group, in order to ensure the appropriate operations of its subsidiaries (hereinafter, the“Group companies”). Each Group company establishes internal rules and regulations based on the charter. In
addition, the Company establishes the Regulations for Business Operations by Subsidiaries in order to ensure
the appropriate operations by its Group companies by supporting and managing the establishment and effective
operation of their internal control systems while respecting the independence of these Group companies.
(1) System for reporting matters regarding the execution of duties by Directors, etc. of the Group companies to
the Company
The Company establishes the Regulations for Business Operations by Subsidiaries and requires its Group
companies to report important matters to the relevant departments of the Company. In addition, theCompany provides its hotline contact as well as hotline systems of each Group company for whistleblowers who identify any legal violations and other compliance issues in each respective office. The
Company also hosts the Group Management Meeting to facilitate information exchange among theCompany and the Group companies.

- 31 -

(2) Rules and systems for managing risk of loss of the Group companies
The Group companies establish their own crisis management system independently according to theirbusiness scale and characteristics. The Company establishes the Regulations for Business Operations by
Subsidiaries and requires the Group companies to report risks in executing their respective business
operations according to the characteristics of their businesses to the Company, which will be handled by the
Crisis Management Committee and other organizations.
(3) System to ensure that Directors, etc. of the Group companies execute their duties efficiently
The Group companies independently manage their respective businesses in principle. The Company
establishes the Regulations for Business Operations by Subsidiaries and specifies that certain importantmatters of the Group companies require approval of, discussion with, or reporting to the Company.
(4) System to ensure that Directors, etc. and employees of the Group companies execute their duties incompliance with relevant laws and regulations and the Articles of Incorporation
The Company establishes the Charter of Conduct for “K” Line Group Companies and requires the Group
companies to comply with the charter. In addition, the Company requires each Group company to establish
its Implementation Guideline for Charter of Conduct according to the characteristics of their businesses andverifies the content of such guidelines.
Furthermore, the Company monitors via the Internal Audit Group, etc. the status of compliance andimplementation of the internal control system by the Group companies.
6. Matters concerning the employees who are to assist Audit & Supervisory Board Members in their duties
The Company establishes the Rules Concerning Employees Tasked With the Assisting Audit & Supervisory
Board Members, and appoints employees who are required to assist the duties of Audit & Supervisory Board
Members (“employees assisting Audit & Supervisory Board Members”) under the supervision of the Audit &Supervisory Board.
7. Matters concerning the independence of the employees assisting Audit & Supervisory Board Members
from the Directors of the Company
The Company establishes the Rules Concerning Employees Tasked With the Assisting Audit & Supervisory
Board Members, and specifies that it shall not order the employees assisting Audit & Supervisory Board
Members to assume other duties concurrently in principle. If it needs to do so due to unavoidable reasons, priorapproval should be obtained from the Audit & Supervisory Board. The Audit & Supervisory Board Members
evaluate the performance of the employees assisting Audit & Supervisory Board Members. The appointment
and transfer of the employees assisting Audit & Supervisory Board Members require prior approval from the
Audit & Supervisory Board.
8. Matters to ensure the effectiveness of instructions by the Audit & Supervisory Board Members of theCompany given to the employees assisting them
When the employees assisting Audit & Supervisory Board Members request the Company for any informationmaterials and/or reporting, the Company will promptly provide such materials and/or reporting.
9. System for reporting to the Audit & Supervisory Board Members of the Company by the Directors,
Executive Officers and employees of the Company; the Directors, the Audit & Supervisory Board
Members, and employees of the Group companies; or a person who received a report from the above
persons; and other systems for reporting to Audit & Supervisory Board Members of the Company
The Directors, Executive Officers and employees of the Company are required to report important mattersregarding the management and operations of the Company’s businesses and the status of executing its businessin charge to the Audit & Supervisory Board Members as needed at a meeting of the Board of Directors or otherimportant meetings, as well as to promptly report any compliance issues and other matters that may cause
serious damage to the Company, if identified, to the Audit & Supervisory Board in accordance with the Rules
for Systems of Reporting to Audit & Supervisory Board Members, Etc. The Directors are required to promptly
report matters regarding the execution of duties in an appropriate manner to the Audit & Supervisory Board or
its Members when being requested to do so. The Internal Audit Group is required to report the progress of its
audits to the Audit & Supervisory Board as necessary and conduct additional audits if being requested to do soby the board.
The Directors, Audit & Supervisory Board Members and employees of the Group companies are required toreport compliance issues and other important matters specified to the relevant department of the Company, and- 32 -

the relevant department is required to report the matter to the Audit & Supervisory Board Members of theCompany as necessary in accordance with the Regulations for Business Operations by Subsidiaries. The
Company hosts a Group Companies’ Audit & Supervisory Board Communication Meeting, in order to share
information among the Company, its Group companies and subsidiaries.
10. System to ensure the non-unfair treatment of persons who made reporting as described in the above
The Company prohibits the Company or its Group companies, under the Rules for Systems of Reporting to
Audit & Supervisory Board Members, Etc. and the Regulations for Business Operations by Subsidiaries, from
unfairly treating the Directors, Audit & Supervisory Board Members, Executive Officers and employees of theCompany and its Group companies who conducted whistle-blowing to the Audit & Supervisory Board
Members of the Company due to the act of such whistle-blowing.
11. Matters concerning policies on the advance payments and reimbursements of expenditures and otherprocedures for settlements of expenditures and/or liabilities incurred from the execution of duties by the
Audit & Supervisory Board Members of the Company
The Company establishes policies on the advance payments and reimbursements of expenditures andprocedures for settlements of liabilities incurred from the execution of duties by the Audit & Supervisory Board
Members, and conducts such advance payments, reimbursements and settlements based on the policies.
12. Other systems to ensure performance of effective audits by Audit & Supervisory Board Members of theCompany
The Company cooperates in developing an environment ensuring effective audits by the Audit & Supervisory
Board Members by coordinating regular meetings with the Audit & Supervisory Board Members and theRepresentative Directors, arranging collaboration of the Audit & Supervisory Board Members with the Internal
Audit Group, and other such means.
13. System to ensure the reliability of financial reports
To ensure the reliability of the Group’s financial reports, the Company engages in ongoing efforts to evaluate
and improve the effectiveness of internal control systems pertaining to financial reporting, on the basis ofJapan’s Financial Instruments and Exchange Act, and other relevant laws and regulations.
14. Fundamental policy toward anti-social forces and status of policy implementation
The Charter of Conduct for “K” Line Group Companies vows that “the “K” LINE Group will resolutely
confront any anti-social force or organization which may threaten social order and public safety.”
Accordingly, the Company enables the swift and appropriate handling of matters relating to anti-social forces
occurring within the Group, by appointing a department in charge of handling matters relating to anti-social
forces and working with law enforcement officials, expert corporate legal counsel and other externalorganizations on a normal basis, with the aim of precluding all involvement of anti-social forces and severing
any ties that could emerge.

2. Fundamental Policy Toward Anti-social Forces and Status of Policy Implementation
As stated in 1. II 14. Fundamental policy toward anti-social forces and status of policy implementation.

- 33 -

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

Not adopted

Supplementary Explanation―――

2. Other Matters Concerning Corporate Governance System [Updated] The Internal Audit Group engages in evaluation and supervision from an independent standpoint as theGroup proceeds with respect to building and establishing its internal control system in response to internal
control evaluation and reporting systems that ensure reliability of financial reporting based on the Financial
Instruments and Exchange Act.
 Status of internal system for timely disclosure of Company information is as follows:
1. Department in charge in relation to timely disclosure and mechanisms of execution thereof(1) Department in charge of filings with stock exchanges
Matters subject to timely disclosure are channeled to the General Affairs Group, and filings with stock
exchanges are made by the General Manager of the General Affairs Group upon having gained
approval from the Executive Officer in charge of General Affairs.
However, the General Manager of Accounting Group is to gain approval of the Executive Officer incharge of Accounting with respect to filings of information on financial results.
(2) In-house integration of information and preparation of disclosure documents
General Managers of each group overseeing respective matters handle in-house filings (channelinginformation to the General Affairs Group) and preparation of disclosure documents with respect tomatters subject to timely disclosure.
2. Assessment and management of information requiring timely disclosure(1) General methods
1) The General Managers of groups overseeing matters relating to the Company assess such mattersand file them with the General Manager of the General Affairs Group.
2) The General Managers of each group overseeing matters relating to subsidiaries assess suchmatters pursuant to the Regulations for Business Operations by Subsidiaries and other suchguidelines. Such General Managers subsequently channel such matters to the General Manager of
Logistics, Port and Affiliated Business Group supervising and managing subsidiaries who then files
them with the General Manager of General Affairs Group.
(2) Secondary methods (supervisory system)
The three parties listed below engage in supervision over proposals and reporting matters for meetingsof the Board of Directors and the Executive Officers’ Meeting, from the perspective of whether or not
such matters should be subject to timely disclosure.
1) General Manager of Corporate Planning Group (Serves as the Secretariats of both the Board of
Directors and the Executive Officers’ Meeting, which involves compiling agenda topics andexamining formalities with respect to issues for deliberation)2) General Manager of General Affairs Group (Serves as the person in charge of filings with stock
exchanges)
3) Executive Officer in charge of General Affairs
In addition, the officers and employees concurrently serving as officers of subsidiaries assess developmentswith respect to the situation at the dispatch destination from the perspective of timely disclosure. They thenfurnish advice to those in charge at subsidiaries when applicable and notify the General Manager of Logistics,
Port and Affiliated Business Group in that regard.

- 34 -

3. Flow of timely disclosure
The separate Attachment illustrates the aforementioned system of timely disclosure.
4. Management of internal information
When it comes to controls placed on internal information until performance of timely disclosure, the Company
strives to properly manage such information and prevent insider trading pursuant to its Rules on Managementof Internal Information and Insider Trading Restrictions.

- 35 -

Mechanisms Underpinning Systems of Business Execution, Management Supervision, and Internal Controls

General Meeting of Shareholders

Appointment/
Dismissal(Board of Directors)

Recommendation

Committee
Remuneration Advisory
Committee

Supervision

Senior Managing
Executive Officers
and above, etc.

Management
Conference

President &CEO

Unit Supervising
Executive
Officers

Executive Officers'
Meeting

Investigation
results
report
Audit

Sustainability Sub-Committee

toinvestigate

Compliance Committee

Corporate
Legal Risk&
Compliance
Group

Supervision/
Approval

Sustainability
M anagement
Promotion
Committee

Environmental Sub-Committee

Instruction

Disaster Response Committee

Crisis Management
Committee
Investigation

Discussion/
ReportReportShip Safety Promotion Committee

Audit

Meeting

Executive Officers
and Audit &Supervisory Board
M embers

Executive
Officers

Executive
Officers

Business Execution DivisionInternal Audit Group

Cooperation

Group Management

Direction

Investment Committee

Direction

Commitment

AdviceInquiry

Audit

Direction

Accounting
Audit

Nominating Advisory

Directors

Management Risk Committee

ReportAppointment/
Dismissal

Audit & Supervisory Board
Members (Audit & Supervisory

Accounting Auditor

Appointment/
Dismissal

Groupcompanies

Investigation

AdviceOutside experts including attorney-at-law- 36 -Audit

(Attachment)＝ Mechanisms of Business Execution Related to Timely Disclosure ＝General process of
information assessment

Secondary process of informationassessment (monitoring for omissions)Executive Officer in charge ofGeneral Affairs(Executive Officer in charge of
Accounting)Information on decisions

New information

Information on financial
results

Supervise
Filed byGeneralManager oftherespective
group
overseeing
the matter

Department incharge of timely
disclosure

General Manager ofGeneral Affairs Group(General Manager of
Accounting Group)

Pinpoint
issuessubject totimelydisclosure
Assessissues fordeliberation

NotifyGeneral Manager ofCorporate Planning Group

Secretariat of the Board of Directors
and Management Conference

Supervise andmanage subsidiaries
NotifyInformation on subsidiaries

Board of Directors
Management Conference
NotifyNotifyGeneral Manager of Logistics, Portand Affiliated Business Group

Prior approval,
discussion andreportingregardingsignificant mattersby officers andemployees incharge at
subsidiaries(Deliberation and decision
on significant matters)

Furnish notification of timely disclosure matter per
assessment at subsidiary’s key meeting or other such forum

General Manager ofgroup overseeing
respective subsidiaries

Officers and employees
concurrently serving as
officers of subsidiaries- 37 -

Division in charge of
disclosure
General Affairs
Group,
General Affairs
Team

Timelydisclosure