IR NEWSDate: June 5, 2024
Contact:
Executive Officer
Yasuhiko Watanabe
Tel: +81-3-3544-2000

Our View on the Proxy Voting Recommendations made by ISSHanwa Co., Ltd.( “Hanwa”) has recognized the fact that Institutional Shareholder Services, Inc. (“ISS”) has
issued a report recommending shareholders to vote against a part of candidates in the Proposal 2 "Election ofEleven (11) Directors" at our 77th Ordinary General Shareholders Meeting to be held on June 26, 2024.
Hanwa would like to state our views on ISS’s recommendations to vote against our candidates as follows.
Hanwa sincerely asks our shareholders and investors to read “Notice of the 77th Ordinary General Shareholders
Meeting” (“the Notice”) and the contents hereof, and to understand the relevant proposal.
1. Recommendations made by ISS
ISS has established quantitative criteria to recommend a vote against a company’s top executive if thecompany allocates a significant portion (20 percent or more) of its consolidated net assets to crossshareholdings.
As described on pages 22 of the Notice, Hanwa has reduced the balance of our cross-shareholdings and theratio of cross-shareholdings to net assets (“the ratio of cross-shareholdings”) is 19.6% at the end of FY 2023,
decreased from 21.7% at the end of FY 2022.
However, ISS has determined that the annual security report (“Yuho”) for FY 2022 is the latest disclosure
information because the content of the Notice does not meet ISS’s policy guidelines*. If the ratio of crossshareholdings for FY 2022 is used as the basis, it would conflict with ISS's quantitative criteria.
Therefore, ISS recommends a vote against the proposal for the election of Yasumichi Kato (Director andChairman, candidate #1) and Yoichi Nakagawa (Representative Director and President, candidate #2).
* ISS's quantitative criteria for cross-shareholdings are that if the total amount of "investment shares held for
purposes other than pure investment" recorded on the balance sheet and the off-balance sheet shares that are
deemed to be held by the company (known as "minashi hoyu kabushiki" in Japanese) for 20% or more of
the consolidated net assets, they will recommend the vote against the directors, who are the topmanagement.
2. Our View
Hanwa recognizes that the Notice does not meet ISS’s policy guidelines because there is no statement that
there are no the off-balance sheet shares that are deemed to be held by the company ("the off-balance sheetshares").
There were no the off-balance sheet shares at the end of FY 2022, and there are no the off-balance sheet
shares at the end of FY 2023. Therefore, the ratio of cross-shareholdings in FY 2023 remains 19.6% as statedin the Notice.
From the perspective of business partnerships, creating business opportunities, maintaining and strengthening
business relationships, etc., Hanwa holds shares of business partners, etc., when it is considered to contributeto enhancing corporate value over the medium to long term. Each year, the Board of Directors and theManagement Committee regularly and comprehensively examine the appropriateness of the holding ofindividual shares, taking into account factors such as investment returns from transactions and dividends,
capital efficiency, and the purpose of holding. Hanwa promotes the sale of shares that are deemed to beinconsistent with the purpose of the holding.
Under the leadership of Yasumichi Kato, as Director and Chairman and Yoichi Nakagawa, as Representative
Director and President, Hanwa will continue to further reduce cross-shareholdings and further improve
capital efficiency.
Hanwa asks all shareholders to bear in mind the above our view and to carefully consider how to exercise
their voting rights.

IR NEWS(Reference)Status of cross-shareholdings
FY2022
Number ofstocks

FY2023

Unlisted stocks
65
64
Stocks other than unlisted stocks
92
65
Total
157
129
Balance sheet Unlisted stocks
15,18915,642amountStocks other than unlisted stocks51,819
54,209(million yen) Total
67,00969,852
Consolidated net assets (million yen)
308,807356,765
Ratio to consolidated net assets
21.7%
19.6%
* There are no off-balance sheet shares that are deemed to be held by the company

Increase(decrease)
(1)
(27)
(28)
+452
+2,390+2,842+47,958(2.1pt)For details on the status of cross-shareholdings, please refer to pages 22 of the Notice at the following URL;
https://www.hanwa.co.jp/ms/data/pdf/ir/20240527_4636.pdf###