Corporate Governance Report
Last Update: July 8, 2024

Nankai Electric Railway Co., Ltd.
Okajima Nobuyuki
President and Representative Director
Contact: General Affairs and Public Relations Department,
Tel: 06-6644-7124
Securities Code: 9044
http://www.nankai.co.jp/
The corporate governance of Nankai Electric Railway Co., Ltd. (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile andOther Basic Information

1. Basic Views
We recognize that the strengthening of corporate governance functions is an important management issue.
For this reason, we strive to implement strict adherence to laws and regulations first of all, while seeking topractice very transparent management and fair and rational decision-making, as well as strengthen the
supervisory functions that oversee these processes. At our company, we respect all of the principles in “Japan’s
Corporate Governance Code,” which was established by the Tokyo Stock Exchange. We will continuously
make efforts to examine and enhance our corporate governance functions with the aim of achieving
sustainable growth and the enhancement of corporate value over the medium and long term.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code] Updated[Supplementary Principle 3-1-3]< Company Sustainability Initiatives, Including our Response to Climate Change >In order to convey the Group’s approach aimed at realizing a sustainable society even more clearly to internaland external stakeholders, the Company has established a Sustainability Policy, and, under this policy,
established 7 Sustainable Key Themes (Material Issues) incorporating the perspective of the SDGs, as priority
long-term measures.
In addition, in September 2021, the Company also announced its support for TCFD (Task Force on Climaterelated Financial Disclosures), and we have expanded information disclosure based on theserecommendations.
Information disclosure based on TCFD recommendations:
https://www.nankai.co.jp/en/sustainability/materiality/06environment/tcfd< Investment in Human Capital and Intellectual Property >As stated in the Integrated Report, the Company recognizes that human capital and intellectual capital are
indispensable for the improvement of corporate value over the medium- to long-term, as they form part of thefoundation of its value creation process. Based on this understanding, we have established the Nankai Group
Human Resources Strategy to pursue human capital management, being comprised of the Policy for Securing
and Developing Human Resources and the Internal Environmental Improvement Policies and have disclosed
the strategy in the Securities Report. However, the Board of Directors has not set the investment targets or
KPIs to be monitored by the Board of Directors, for the value creation through the utilization of intangible-1-

assets, such as human capital. We will thus continue to consider formulating and disclosing an investment
strategy that is clearly organized and easy to understand in light of the management strategy.
[Supplementary Principle 4-2-2]
We have established a Sustainability Policy as a basic policy regarding the Company’s sustainability efforts.
Under this policy, we have established 7 Sustainable Key Themes (Material Issues) incorporating theperspective of the SDGs, as priority long-term measures.
On the other hand, while those responsible for execution have been deliberating formulation of businessportfolio strategies, the matter has not been fully discussed at a Board of Directors meeting and has not taken
concrete form. Thus, those responsible for execution will further consider it and then formulate a basic policy
regarding investment strategies for intangible assets, etc. and the business portfolio, and will establish asystem for the Board of Directors to appropriately supervise the progress of these initiatives.
[Supplementary Principle 5-2-1]
Although those responsible for execution have been deliberating formulation of a basic policy regarding theGroup’s business portfolio, the matter has not been fully discussed at a Board of Directors meeting, and thus
those responsible for execution will further consider it. After deliberation by the Board of Directors, the basic
policy will be disclosed, together with other matters such as the business strategy of the next medium termbusiness plan, as the policy that forms the basis in the formulation of the next medium term business plan.
The progress of the business portfolio review will also be appropriately monitored by the Board of Directors.
[Disclosure Based on the Principles of the Corporate Governance Code] Updated[Principle 1-3]
The Company strives to strengthen its financial standing, placing great emphasis on the balance between
interest-bearing debt and cash flows. We have also been making efforts to achieve the sustainable growth ofcorporate value while promoting investment that contributes to the improvement of profitability in the future.
With respect to the return of gains to shareholders, the Company intends to pay stable dividends to its
shareholders. The Company will disclose quantitative targets (consolidated operating income, the ratio ofconsolidated net interest-bearing debt to EBITDA) in the medium term business plan.
[Principle 1-4]
If the Company determines that a business relationship with any party contributes to the improvement of theGroup’s corporate value in the medium to long term, the Company holds strategic shareholdings with a viewto maintaining and strengthening such business relation.
Shares currently held as strategic shareholdings are reviewed every year at the Board of Directors’ meeting
where they are examined quantitatively using the Company’s cost of capital as the standard. If the rationalityof strategic shareholding is deemed to be weak for certain stocks, the Company shall reduce the number ofshares held as swiftly as possible.
With respect to the exercise of voting rights, in cases such as the following where there will be a significant
impact on the issuing company’s corporate value or on its transactions with the Company, the Company shalldetermine whether it is for or against proposals based on dialogues, etc. with the issuing company asnecessary.
• When a significant worsening of business performance has persisted for a period of time
• When there is a major scandal• When a proposal is submitted regarding a capital policy that brings about a change in the Company’scontrol or large-scale dilution• When a proposal that will have a significant impact on the issuing company’s transactions with theCompany is submitted[Principle 1-7]
With regard to conflict-of-interest transactions by Directors, the Company requires an approval of the Boardof Directors in compliance with the laws and regulations. The outline of the results shall be reported promptly
at the Board of Directors’ meeting following the execution of such transaction. However, the outline of theresults concerning conflict-of-interest transactions on a recurring basis shall be reported on a quarterly basis.
In addition, with regard to transactions with major shareholders (those holding voting rights equivalent to
10% or more of the total voting rights), the Company takes the same measures as those required for conflict-2-

of-interest transactions by Directors at the Board of Directors’ meeting. The Board of Directors shall deliberateon the relevant matters impartially with a view to ensuring the common interests of the Company and its
shareholders.
[Supplementary Principle 2-4-1]
The Group regards human resources as “capital” and recognizes that the source of corporate value creation is“human resources.” We have thus established the “Nankai Group Human Resources Strategy” based on theidea that “the happiness, fulfillment, and growth of people working for the Group” is essential for engaging
in human capital management.
For more details, please refer to the Company’s Securities Report.
107th Securities Report: https://www.nankai.co.jp/lib/company/ir/library/securities/pdf/107th.pdf(Japanese only)
We believe that it is essential to respect and proactively utilize the characters, skills, and values of various
human resources within our organization to ensure diversity. Accordingly, we will secure and promote active
participation of diverse human resources from various perspectives by, for example, hiring more women, midcareer recruits, and foreign nationals.
We have also set specific and measurable targets, as follows, based on our human resources strategy, while
taking into consideration the business characteristics of the Group.
 Improve percentage of women in managerial positions to around 10% by FY2030 [consolidated] Maintain the standard as of FY2021 (7.4%) or more for the percentage of mid-career recruits in managerial
positions [non-consolidated]
Regarding foreigners in managerial positions, we will consider promoting foreign workers depending on theirtraining situation and business plans.
As for the progress of our initiatives for securing and promoting active participation of diverse humanresources, the Company promotes diversification of recruitment methods and securing human resources witha variety of values, experiences, and abilities, to secure diverse human resources as a measure based on the
Policy for Securing and Developing Human Resources.
The Company will also secure both human resources with managerial perspectives and skills (management
personnel) and human resources with a high level of expertise who are familiar with their respective
businesses (expert human resources) and will create an environment in which they can proactively work on
skills development based on their career plans, thus developing human resources with diverse abilities andways of thinking.
Furthermore, as a measure based on our Policy for Developing an Internal Environment, we place emphasis
on DE&I and have been working on creating an environment where human resources from diverse
backgrounds and life stages can fully demonstrate their capabilities. We will introduce various working
systems and other measures to further improve our work environment and corporate culture, enabling our
employees to work in flexible manners without being tied to place or time and creating an environment inwhich a diverse range of human resources can thrive.
[Principle 2-6]
For the management of the Company’s corporate pension fund, an Asset Management Committee has been
established. The said Committee receives reports on the management of the pension fund, and conducts
monitoring efforts as appropriate. The said Committee is comprised of members with knowledge on the
Stewardship Code and the management of funds, such as Chief Manager of Accounting & Finance
Department and Chief Manager of Personnel Department.
[Principle 3-1]
(1) The Company discloses its Corporate philosophy, Group management policies, Nankai’s Corporate Image
in 2050, Nankai Group Management Vision 2027 and the Kyoso 140 Plan on the Company’s website, etc.
•
Corporate philosophy
Group management policies
https://www.nankai.co.jp/en/company/company.html•
Nankai’s Corporate Image in 2050
https://www.nankai.co.jp/en/ir/management/corporate-image•
Nankai Group Management Vision 2027-3-•https://www.nankai.co.jp/en/ir/management/vision2027
Kyoso 140 Plan
https://www.nankai.co.jp/en/ir/management/medium-term_management_plan(2) Basic views on corporate governance and basic policies are as provided above in “1. Basic Views.”(3) Policies and procedures for the Board of Directors of the Company to determine the compensation for
Directors are as provided below in “Disclosure of Policy on Determining Remuneration Amounts andCalculation Methods” shown in [Director Remuneration] included in “1. Organizational Composition andOperation” listed in “II Business Management Organization and Other Corporate Governance Systems
regarding Decision-making, Execution of Business, and Oversight in Management.”(4) The Company selects persons in managerial positions with knowledge about the Group’s operations aswell as specialists in safety management of transportation as candidates for Director (excluding Director
serving as Audit & Supervisory Committee Member) from within the Company. In addition, as candidates
for Outside Director (excluding Director serving as Audit & Supervisory Committee Member), theCompany selects persons who have knowledge and experience as business managers, and can be
responsible for management supervisory function from their independent standpoints without any mutual
relationship which may impose significant control over the management of the Company.
With respect to candidates for Director serving as Audit & Supervisory Committee Member, the Company
selects persons well versed in the Group’s operations as candidates for full-time Audit & Supervisory
Committee Members from within the Company. The Company also select persons as candidates for
Outside Director who has knowledge related to legal affairs, finance and accounting, and can be
responsible for the function to ensure the effectiveness of audits from their independent standpoints
without any mutual relationship which may impose significant control over the management of theCompany.
The matters related to the determination of candidates for Directors, the selection of Representative
Directors and the appointment of Corporate Officers are subject to deliberation by the Nomination
Committee, prior to the determination at the Board of Directors’ meeting.
For a Director or Corporate Officer for which any of the following applies, after deliberation via
Nomination Committee, the Board of Directors shall determine if the said Director or Corporate Officer
shall be dismissed from his or her position or responsibilities, and if necessary, submit a proposal to thegeneral meeting of shareholders regarding the Director’s dismissal.
• When there is a violation of obligations in duties, or negligence of duties• When there is misconduct not befitting of a Director or Corporate Officer• When there is a mental or physical disability that prevents the execution of duties, or makes theexecution intolerable(5) In the event of personnel changes in Representative Director(s), the explanation regarding the nominationof new Representative Director(s) is provided in a timely disclosure material at the time of selection. As
for candidate(s) for Director(s) and Auditor(s), the explanation regarding the nomination of the respective
candidate(s) is provided in the Reference Documents for the General Meeting of Shareholders.
On the other hand, when the Board of Directors decides to dismiss a Director or Corporate Officer fromhis or her position or responsibilities, or submits a proposal to the general meeting of shareholders
regarding a Director’s dismissal, the explanation regarding the dismissal is provided in a timely disclosurematerial at the time the dismissal is determined.
[Supplementary Principle 4-1-1]
The Board of Directors resolves on basic management policies, medium- and long-term business plans, andfiscal year plans, etc., as well as matters stipulated by laws, regulations and the Company’s Articles ofIncorporation, based on the Board of Directors Regulations. Meanwhile, in order to establish an agile systemof business execution, the Board of Directors aims to delegate to Representative Director(s) decisions on all
matters for which the delegation of decisions on business execution is permitted under the Companies Act,and transition to a Monitoring Board through the clear division of business execution and supervisory
functions.

-4-[Principle 4-9]
The standards for determining the independence of Outside Directors are as provided below in “Mattersrelating to Independent Directors” shown in [Independent Directors] included in “1. Organizational
Composition and Operation” listed in “II Business Management Organization and Other Corporate
Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management.”[Supplementary Principle 4-10-1]
The Company has established a Nomination Committee to deliberate matters concerning the nomination of
Directors and Corporate Officers, as well as a Compensation Committee to deliberate matters concerning thecompensation for Directors (excluding Directors serving as Audit & Supervisory Committee Members) andCorporate Officers with Special Titles. In addition to selecting Independent Outside Directors for each
Chairperson, we will ensure their independence by having Independent Outside Directors be the majority ofthe members in each committee.
Moreover, information on the specific authorities and roles of each committee is as provided in“Supplementary Explanation” shown in [Voluntary Establishment of Nomination/Remuneration Committee]
included in “1. Organizational Composition and Operation” listed in “II Business Management Organization
and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversightin Management.”[Supplementary Principle 4-11-1]
Regarding the Board of Directors, based on the Company’s business characteristics whose social
responsibility is to ensure safe transportation, the Company believes that it is necessary for us to appoint anappropriate number of Directors from within the Company who are well versed in the railway business andsafety management of transportation. In addition, the Company shall appoint several Outside Directors so thatthey account for a majority of the Company’s Board of Directors in order to ensure the objectivity andtransparency of managerial decision-making processes.
The Company selects persons in managerial positions who are well versed in a diverse range of business
operations including the railway business as candidates for Directors from within the Company. The Company
also selects the candidates for Outside Directors in accordance with “Independence Standards for Outside
Officers” provided in [Principle 4-9].
The matters related to the determination of candidates for Directors, the selection of Representative Directors
and the appointment of Corporate Officers are subject to deliberation by the Nomination Committee, prior to
the determination at the Board of Directors’ meeting.
Moreover, a skill matrix that summarizes the knowledge, experience, skills of each Director is disclosed in
the Integrated Report and the matters subject to electronic provision measures regarding the general meetingof shareholders.
We will disclose the information accordingly.
[Supplementary Principle 4-11-2]
Upon selecting the candidates for Outside Directors, the Company takes their status of concurrent positions
into account. The status of significant concurrent positions of Outside Directors is disclosed on an annual
basis in the matters subject to electronic provision measures regarding the general meeting of shareholders.
[Supplementary Principle 4-11-3]
The Company shall conduct annual analysis and assessment at the Board of Directors’ meeting on theeffectiveness the Board of Directors as a whole based on the results of self-assessment in a survey for all
Directors.
< Outline and results of assessments in fiscal 2023 >■ Assessment items(1) Regarding the operation of the Board of Directors for fiscal 2023 (time required and degree of explanatory
materials and explanations)(2) Regarding the following issues addressed in accordance with the assessment for fiscal 2022
• Enhance the effectiveness of progress reviews of the Kyoso 140 Plan toward the completion of the plan(evaluation of areas for improvement, etc.)• Deepen and expand matters to be reported and matters for deliberation (reporting matters concerning risk
management, sustainability, human capital management, business portfolios, management that takes into
account capital costs and stock prices, etc.)• Operation for proactive discussions and deliberations (lunch meetings and facility tours)-5-■ Summary of analysis and assessment results
Although the operation of the Board of Directors was generally assessed positively, it was pointed out in the
progress review of the Kyoso 140 Plan that the initiatives that were not progressing as promptly as was
originally intended needed more monitoring.
With regard to “deepen and expand matters to be reported and matters for deliberation,” the majority of the
responses stated that appropriate issues were being provided in a timely manner, whereas there was an opinion
that the business portfolio should be discussed at Board of Directors meetings in conjunction with discussions
for formulating the next medium term business plan. There was also an opinion that each of the issues reported
and discussed should be continually deepened and expanded, with some of the respondents expressing
opinions regarding ways in which the discussions should be conducted and themes that should be covered.
It should be noted also that the lunch meetings and facility tours were generally assessed positively,
confirming the importance of continuing efforts to ensure proactive discussions, with some respondents
proposing measures for more proactive discussions.
< Initiatives for fiscal 2024 >Based on the assessments for fiscal 2023, we will work on the following three issues in fiscal 2024.
■ Strengthen monitoring functions to complete the current medium term business plan and deepen businessportfolio discussions for the formulation of the next medium term business plan
We will expand progress reviews of the Kyoso 140 Plan to visualize any deviations from expectations ordelays in progress and to improve the effectiveness of the supervisory function of the Board of Directors.
Those responsible for execution will also continue to advance discussions on reviewing the business portfolio,
and will ensure multiple opportunities for deliberation at Board of Directors meetings as a policy that willserve as a premise for formulating the next medium term business plan.
■ Expand deliberations on themes that should be particularly discussed by the Board of Directors (humancapital management, management that takes into account capital costs and stock prices, etc.)
Those responsible for execution will thoroughly consider important themes that should be discussed at Boardof Directors meetings, including the following themes that have been newly identified as the ones that should
be taken up, and will aim to expand deliberations after clarifying the key issues.
• Human capital management• (Aggressive) Financial strategy and capital policy• Establishment of true group management and strengthening of brand strategy■ Operation for proactive discussions and deliberations (ongoing issue)
We will continue to hold facility tours to deepen understanding of the businesses that the Group is conducting,
and will consider new, out-of-the-box methods for reporting at Board of Directors meetings.
[Supplementary Principle 4-14-2]
Necessary training is provided to Directors so that they can fulfill their roles and responsibilities. The detailsof the training are as follows.
•
New Directors from within the Company and new Corporate Officers with Special Titles (Corporate
Officers at the level of Senior Corporate Officer or above; the same applies hereinafter) will receive
training from legal professionals, experts in corporate governance, etc.
•
New Outside Directors will receive explanations regarding the Company’s business description,
financial condition, management strategy, etc.
•
Directors will be encouraged to attend external lectures and related expenses will be provided by theCompany as appropriate.
•
Tours of the Group’s facilities etc. will be held for Outside Directors.
[Principle 5-1]
< Policy on constructive dialogue with shareholders >The Company designates the Sustainability Promotion Department as the department in charge of investor
relations. Financial results briefings for institutional investors and securities analysts are to be held every six
months in addition to holding small meetings, conducting individual visits, etc., as appropriate. The Company
also proactively responds to various types of inquiries such as visits, phone interviews, etc.

-6-

< Measures to realize management that takes into account capital costs and stock prices (under consideration)>
Currently, the Company sets a hurdle rate for each of its businesses based on the capital cost, carefully selects
investments that will contribute to improving its corporate value, and implements a PDCA cycle to evaluate
the effectiveness of investments after they are implemented.
We recognize that “measures to realize management that takes into account capital costs and stock prices” isan important management issue, and are considering future policies to increase our corporate value based on
the above initiatives. The details will be disclosed as soon as they become available.
< Situation concerning dialogue with shareholders, etc. >The Company engages in dialogue primarily with Japan-based shareholders on key themes such as thebusiness strategy, number targets, capital policy, etc. for the medium term business plan Kyoso 140 Plan. The
opinions received through dialogue with shareholders are sent to corporate officer in the form of feedback
once every month and to the Board of Directors once every year. For details on the situation concerning
dialogue with shareholders, please refer to the Company’s website.
(https://www.nankai.co.jp/en/ir/governance/ir_communication)

2. Capital Structure
Foreign Shareholding Ratio

10% or greater and less than 20%[Status of Major Shareholders] Updated
Name / Company Name
The Master Trust Bank of Japan, Ltd.
(trust account)
Custody Bank of Japan, Ltd. (trust account)
Nippon Life Insurance Company
Sumitomo Mitsui Trust Bank, Limited
JP MORGAN CHASE BANK 385781
MUFG Bank, Ltd
Sumitomo Mitsui Banking Corporation
The Senshu Ikeda Bank, Ltd.
STATE STREET BANK WEST CLIENT-TREATY
505234SSBTC CLIENT OMNIBUS ACCOUNT
Controlling Shareholder (except for Parent
Company)
Parent Company

Number of Shares Owned

Percentage (%)

11,617,500

10.25

7,212,700
2,484,789
1,516,000
1,508,812
1,473,723
1,429,417
1,289,087

6.36
2.19
1.34
1.33
1.30
1.26
1.14

1,201,700

1.06

1,011,165

0.89

―――
None

Supplementary Explanation Updated(1) The description provided above is based on the shareholders’ register as of March 31, 2024.
(2) Percentages are calculated after subtracting treasury shares (78,750 shares). Treasury shares do not include
92,600 shares of the Company’s shares held by the share delivery trust as stock compensation for Directors
and Corporate Officers.
(3) In the change report made available for public inspection on September 22, 2023, it was stated that
Sumitomo Mitsui Trust Bank, Limited and its joint holders held the following Company’s shares as of
September 15, 2023; however, as of March 31, 2024, the Company is unable to confirm the actual numbersof shares held. Therefore, the description provided above under “Status of Major Shareholders” is based on
the shareholders’ register as of March 31, 2024.
The content of the aforementioned change report is as follows:-7-

Sumitomo Mitsui Trust Bank, Limited

Shares held:

1,516,000

Sumitomo Mitsui TrustManagement Co., Ltd.

Shares held:

3,698,900

Shares held:

1,369,000

Asset

Nikko Asset Management Co., Ltd.

Percentage of shares 1.34
held to total number ofshares issued:
Percentage of shares 3.26
held to total number ofshares issued:
Percentage of shares 1.21
held to total number ofshares issued:

3. Corporate Attributes
Listed Stock Market and Market Section
Fiscal Year-End
Type of Business
Number of Employees (consolidated) as of the
End of the Previous Fiscal YearSales (consolidated) as of the End of thePrevious Fiscal Year
Number of Consolidated Subsidiaries as of the
End of the Previous Fiscal YearTokyo Stock Exchange
Prime Market
MarchLand Transportation
More than 1000
From ¥100 billion to less than ¥1 trillion
From 50 to less than 100

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder―――
5. Other Special Circumstances which may have Material Impact on Corporate Governance Updated[About the Company’s listed subsidiary]
The Company has a listed subsidiary, Nankai Tatsumura Construction Co., Ltd.
Main businesses of the said subsidiary include general construction business, design business, and realestate management and trading business. The said subsidiary serves as a function sharing company incharge of execution of civil engineering and construction works of the Group.
We judge whether to choose a listed subsidiary structure or some other group company ownership structure
based on factors such as business characteristics, business scale, and business area size. The said subsidiary
has a considerable business scale in terms of its sales, profits, total assets, etc., and operates not only in the
Kinki region but also throughout the country, including the Tokyo metropolitan area. Therefore, we believethat listing the subsidiary on the stock exchange is one of the most effective means for improving its social
trustworthiness, profile and access to human resources. We also believe that it will not only improve thesubsidiary’s management autonomy and transparency but also contribute to sustainable growth of the Groupand enhancement of its medium- to long-term corporate value.
In order to take appropriate control as a group company, the Company dispatches Directors to the said
subsidiary. However, the Company respects the judgment of the management of the said subsidiary, inprinciple, in order to ensure its independence and autonomy as a listed company. Furthermore, theCompany strives not to unjustly undermine the interests of the said subsidiary, its shareholders, and its
other stakeholders. To that end, the Company properly exercises appointment and dismissal authorities
and take other measures so that an effective governance structure that effectively utilizes Independent
Outside Directors will be established.

-8-II. Business Management Organization and Other Corporate Governance Systems
regarding Decision-making, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Company with Audit & Supervisory Committee

Organization Form
[Directors]

Maximum Number of Directors Stipulated in Articles of Incorporation

15

Term of Office Stipulated in Articles of Incorporation

Number of Directors

1 yearChairman (unless concurrently
serving as President)
15

Appointment of Outside Directors

Appointed

Number of Outside Directors

8

Number of Independent Directors

8Chairperson of the Board

Outside Directors’ Relationship with the Company (1)NameAttribute

UpdatedRelationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

Tsunekage Hitoshi
From another company△
Koezuka Miharu
From another company△
Mochizuki Aiko
From another company〇
Hori Naoki
From another company
Kunibe Takeshi
From another company△
Miki Shohei
From another company△
Igoshi Tomoko
OthersTanaka Takahiro
Lawyer* 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;“▲”when a close relative of the director fell under the category in the pasta. Executive of the Company or its subsidiaries
b. Non-executive director or executive of a parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the listed company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or otherproperty from the Company besides compensation as a director/auditor.
g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is alegal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f)(the director himself/herself only)
i. Executive of a company, between which and the Company outside directors/auditors are mutually appointed(the director himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (the director
himself/herself only)-9-

k. Others
Outside Directors’ Relationship with the Company (2) Updated

Name

Tsunekage Hitoshi

MembershipofSupervisory
Committee

Designationas
Independent
Director

Supplementary
Explanation of
the Relationship○

Mr. Tsunekage
Hitoshi isconcurrently
serving as Special
Advisor of
Sumitomo Mitsui
Trust Bank,
Limited, but he iscurrently not an
executive of thebank. The
Company conducts
transactions suchas borrowing offunds, etc. with thesaid bank.

Koezuka Miharu○

Mochizuki Aiko○

Ms. Koezuka
Miharu has served
at Takashimaya
Company,
Limited, but she iscurrently not an
executive of thesaid company. The
Company conducts
transactions withTakashimaya
Company,
Limited, such asleases of thebuildings that
accommodate thesaid company’s
Osaka and Sakai
stores.

―――- 10 -

Reasons of Appointment
The Company has no materialinterest with Mr. Tsunekage
Hitoshi nor relationshippotentially in conflict withgeneral shareholders, as
stipulated by the Tokyo Stock
Exchange.
He is expected to provide us withappropriate advice andsupervision for the Group’s
overall management based on his
great insight cultivated throughhis career as a trust bank manager
from his independent standpoint
without any mutual relationshipwhich may impose significant
control over the management of
the Company. For this reason, theCompany appointed (designated)
him as an Outside Director(Independent Director).
The Company has no materialinterest with Ms. Koezuka
Miharu nor relationshippotentially in conflict withgeneral shareholders, as
stipulated by the Tokyo Stock
Exchange.
She is expected to provide us
with appropriate advice andsupervision for the Group’s
overall management based on her
great insight cultivated throughher career as a department store
manager from her independent
standpoint without any mutual
relationship which may impose
significant control over the
management of the Company. For
this reason, the Company
appointed (designated) her as an
Outside Director (Independent
Director).
The Company has no interest
with Ms. Mochizuki Aiko nor
relationship potentially in conflictwith general shareholders, as
stipulated by the Tokyo Stock
Exchange.

Hori Naoki

Kunibe Takeshi○○

Mr. Hori Naoki is
Chairman of theBoard ofDirectors, MUFG
Bank, Ltd. The
Company conducts
transactions suchas borrowing offunds, etc. with thesaid bank.

○

Mr. Kunibe
Takeshi has served
at Sumitomo
Mitsui Banking
Corporation, but
he is currently not
an executive of thesaid bank. The
Company conducts
transactions suchas borrowing offunds, etc. with thesaid bank.

- 11 -She is expected to provide us
with appropriate advice andsupervision for the Group’s
overall management based on her
expert knowledge as a certified
public accountant and her broad
insight cultivated as a consultant
from her independent standpoint
without any mutual relationshipwhich may impose significant
control over the management of
the Company. For this reason, theCompany appointed (designated)
her as an Outside Director(Independent Director).
The Company has no materialinterest with Mr. Hori Naoki nor
relationship potentially in conflictwith general shareholders, as
stipulated by the Tokyo Stock
Exchange.
He is expected to provide us withappropriate advice andsupervision for the Group’s
overall management based on his
great insight cultivated throughhis career as a bank manager
from his independent standpoint
without any mutual relationshipwhich may impose significant
control over the management of
the Company. For this reason, theCompany appointed (designated)
him as an Outside Director(Independent Director).
The Company has no materialinterest with Mr. Kunibe Takeshi
nor relationship potentially in
conflict with generalshareholders, as stipulated by the
Tokyo Stock Exchange.
He is expected to enhance theeffectiveness of the Group’s
audits based on his great insightcultivated through his career as abank manager from his
independent standpoint without
any mutual relationship which
may impose significant control
over the management of theCompany. For this reason, theCompany appointed (designated)
him as an Outside Director
serving as Audit & Supervisory
Committee Member (Independent
Director). He also has knowledgeof finance and accounting gained

Miki Shohei○○

Mr. Miki Shohei
has served at
Nippon Life
Insurance
Company, but he iscurrently not an
executive of thesaid company. The
Company conducts
transactions suchas borrowing offunds, etc. with thesaid company.

Igoshi Tomoko

○

○

―――

Tanaka Takahiro

○

○

―――

- 12 -

through his business experiencein a bank.
The Company has no materialinterest with Mr. Miki Shohei nor
relationship potentially in conflictwith general shareholders, as
stipulated by the Tokyo Stock
Exchange.
He is expected to enhance theeffectiveness of the Group’s
audits based on his great insightcultivated through his career asa life insurance company
manager from his independent
standpoint without any mutual
relationship which may impose
significant control over the
management of the Company. For
this reason, the Company
appointed (designated) him as an
Outside Director serving as Audit& Supervisory Committee
Member (Independent Director).
He also has knowledge of financeand accounting gained throughhis business experience in a life
insurance company.
The Company has no interest
with Ms. Igoshi Tomoko nor
relationship potentially in conflictwith general shareholders, as
stipulated by the Tokyo Stock
Exchange.
She is expected to enhance theeffectiveness of the Group’s
audits based on her extensive
experience and expertise
cultivated in the legal world fromher independent standpoint
without any mutual relationshipwhich may impose significant
control over the management of
the Company. For this reason, theCompany appointed (designated)
her as an Outside Director
serving as Audit & Supervisory
Committee Member (Independent
Director). She also has
knowledge of finance andaccounting through her
professional experience as apublic prosecutor.
The Company has no interest
with Mr. Tanaka Takahiro nor
relationship potentially in conflictwith general shareholders, as
stipulated by the Tokyo StockExchange. He is expected toenhance the effectiveness of theGroup’s audits and supervisory
functions based on his expert
knowledge cultivated through his
career as a lawyer and extensive
experience through his years ofengagement in corporate legal
affairs from his independent
standpoint without any mutual
relationship which may impose
significant control over the
management of the Company. For
this reason, the Company
appointed (designated) him as an
Outside Director serving as Audit& Supervisory Committee
Member (Independent Director).
He also has knowledge of financeand accounting and is well versedin corporate legal affairs.
[Audit & Supervisory Committee]
Committee’s Composition and Attributes of Chairperson

Audit &
Supervisory
Committee

All Committee
Members

Full-timeMembers6

Appointment of Directors and/or Staff to
Support the Audit & Supervisory Committee

Inside Directors
22

OutsideDirectors

Chairperson
4Outside Director

Appointed

Matters Related to the Independence of Such Directors and/or Staff from Executive Directors
The Company allocates dedicated staff to support the duties of the Audit & Supervisory Committee, andconsults with full-time Audit & Supervisory Committee Members prior to applying any personnel changes,
evaluations, etc. to these dedicated staff members, in order to ensure their independence.

Cooperation among Audit & Supervisory Committee, Accounting Auditors and Internal Audit Departments
As provided below “ⅳ Cooperation among internal audit, audit by the Audit & Supervisory Committee, andaccounting audit” shown in “1) Audit” included in “(2) Audit and supervision” listed in “2. Matters on
Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration Decisions (Overview
of Current Corporate Governance System)”.

[Voluntary Establishment of Nomination/Remuneration Committee]- 13 -

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

Established

Committee’s Name, Composition, and Attributes of Chairperson
Committee Corresponding toNomination Committee
Nomination Committee

Committee Corresponding to
Remuneration Committee
Compensation Committee

All Committee Members

56

Full-time Members

00Inside Directors

1

2Outside Directors

44Outside Experts

0

0

Other

0

0

Outside Director

Outside Director

Committee’s Name

Chairperson
Supplementary Explanation Updated(1) Nomination Committee
The Company has established a Nomination Committee (Chairperson: Outside Director serving as Audit& Supervisory Committee Member Mr. Kunibe Takeshi; members: Chairman and Representative
Director Mr. Achikita Teruhiko, Outside Directors Mr. Tsunekage Hitoshi, Ms. Koezuka Miharu and Mr.
Hori Naoki), thereby securing the fairness, objectivity and transparency of the nomination process.
The Nomination Committee shall deliberate and approve the following matters as an advisory body to
the Board of Directors.
• Nomination of the candidates for Directors to be proposed at the general meeting of shareholders• Proposals pertaining to the selection of Representative Directors and appointment of Corporate
Officers with Special Titles to be proposed at meetings of the Board of Directors• Dismissal of Directors or Corporate Officers with Special Titles, and dismissal of or decision to notreelect a Representative Director• Matters pertaining to the succession plan for President and nomination of new President• Any other matters deemed necessary by the Board of Directors pertaining to each of the above items
In the current fiscal year, the Nomination Committee met two times (November 2023; February 2024).
Attendance by individual Nomination Committee Members at these meetings is as follows.
Position
Chairperson (Outside
Director)
Committee
Member(Outside Director)
Committee
Member(Outside Director)
Committee
Member(Outside Director)
Committee
Member(Representative
Director)

Name

Number of theNomination
Committee met

Attendance

Sono Kiyoshi

2

Tsunekage Hitoshi

2

2

Koezuka Miharu

2

2

Kunibe Takeshi

2

2

Achikita Teruhiko22- 14 -

2

In the current fiscal year, the Nomination Committee held deliberations concerning the establishment ofa system for a “management personnel development program (succession plan)” as well as the officer
system for fiscal year 2024, especially the nomination of candidates for Directors (excluding Directors
serving as Audit & Supervisory Committee Members) to be proposed at the 107th Annual General
Meeting of Shareholders and the nomination of Corporate Officers with Special Titles for fiscal year 2024
along with their allocation of work, ahead of the final determinations to be made by the Board of Directors.
(2) Compensation Committee
The Company has established a Compensation Committee (Chairperson: Outside Director Mr. Tsunekage
Hitoshi; members: Chairman and Representative Director Mr. Achikita Teruhiko, President andRepresentative Director Mr. Okajima Nobuyuki, Outside Directors Ms. Mochizuki Aiko, Mr. Hori Naoki
and Outside Director serving as Audit & Supervisory Committee Member Mr. Miki Shohei), thereby
securing the fairness, objectivity and transparency of the process to determine compensations.
Decisions on compensation for individual Directors (excluding Directors serving as Audit & Supervisory
Committee Members) and Corporate Officers with Special Titles are delegated to the Representative
Director, Chairman and CEO by a resolution of the Board of Directors, but the following matters shall bedeliberated and approved by the Compensation Committee as an advisory body to the Board of Directors.
• Contents of proposals pertaining to compensation for Directors to be proposed at the general meetingof shareholders• Draft policies regarding decisions on the details of compensation for individual Directors (excluding
Directors serving as Audit & Supervisory Committee Members; the same applies hereinafter) andCorporate Officers with Special Titles to be proposed at meetings of the Board of Directors• Details of compensation for individual Directors and Corporate Officers with Special Titles to be
determined by the President• Any other matters deemed necessary by the Board of Directors pertaining to each of the above items
In the current fiscal year, the Compensation Committee met one time (April 2024). Attendance by
individual Compensation Committee Members at these meetings is as follows.
Position
Chairperson (Outside
Director)
Committee
Member(Outside Director)
Committee
Member(Outside Director)
Committee
Member(Outside Director)
Committee
Member(Representative
Director)
Committee
Member(Representative
Director)

Name

Number of theCompensation
Committee met

Attendance

Tsunekage Hitoshi

1

1

Sono Kiyoshi

1

1

Mochizuki Aiko

1

0

Miki Shohei

11Achikita Teruhiko

1

1

Okajima Nobuyuki

00(Note) Representative Director Mr. Okajima Nobuyuki was newly appointed as a member of theCompensation Committee at the Board of Directors meeting held on June 20, 2023.
In the current fiscal year, the Compensation Committee held deliberations concerning the payment ofbonuses for the previous fiscal year as well as a partial revision of compensation levels based on data of
an officer compensation survey conducted by an external research organization, ahead of the final
determinations to be made by the Representative Director, Chairman and CEO.
[Independent Directors]
Number of Independent Directors

8- 15 -

Matters relating to Independent Directors
The Company designates as Independent Directors all Outside Directors who are qualified to serve as
Independent Directors.
The Company stipulates the standards for determining the independence of Outside Directors as follows.
[Independence Standards]
The Company appoints Outside Directors (including Outside Director serving as Audit & Supervisory
Committee Member) on the precondition that the candidates do not have any material interest with theCompany and do not fall under the conditions as lacking independence in the Independence Standards
stipulated by the Tokyo Stock Exchange for the purpose of submitting notifications following the appointment
of independent Directors. The Company also requires candidates that have insight and experience necessary
for supervising and auditing business execution not only in the railway business whose social responsibility
is to ensure safe transportation but in a diverse range of the Group’s business operations, as well as positive
motivation and qualification to properly fulfill his/her assignment that is expected to be carried out from an
independent standpoint. The Company believes that these requirements are essential to respond to ourshareholders’ mandate.
[Incentives]
Incentive Policies for Directors

Performance-linked Remuneration

Supplementary Explanation
As provided below in “Disclosure of Policy on Determining Remuneration Amounts and Calculation
Methods” shown in [Director Remuneration].
―――

Recipients of Stock Options
Supplementary Explanation―――[Director Remuneration]
Disclosure of Individual Directors’ Remuneration

No individual disclosure

Supplementary Explanation Updated
The Company discloses the number of eligible officers, type and total amount of compensation, as well as
total amount of compensation by category for Directors (excluding Directors serving as Audit & Supervisory
Committee Members and Outside Directors), Directors serving as Audit & Supervisory Committee Members(excluding Outside Directors serving as Audit & Supervisory Committee Members), Outside Directors(excluding Directors serving as Audit & Supervisory Committee Members), Outside Directors serving as
Audit & Supervisory Committee Members, respectively.
The total amount of compensation, etc. for the most recent fiscal year ended March 31, 2024 is as follows.
Category
Directors (excluding Directors serving as
Audit & Supervisory Committee Members
and Outside Directors)

Number of officers

Amount of compensation (basic
remuneration)

6 persons294 million yen- 16 -

Directors serving as Audit & Supervisory
Committee Members (excluding Outside
Directors serving as Audit & Supervisory
Committee Members)
Outside Directors (excluding Directors
serving as Audit & Supervisory Committee
Members)
Outside Directors serving as Audit &Supervisory Committee Members

3 persons

47 million yen

4 persons

41 million yen

5 persons

37 million yen

Apart from the above, the total amount of compensation, etc. for 6 Corporate Officers with Special Titles
who are not concurrently serving as Director is 179 million yen.
Policy on Determining Remuneration Amounts
and Calculation Methods Updated

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods[Details of the Policy and Decision Method for Determining the Amount or Calculation Method of Officers’
Compensation]
The Company has established the following policy on determining the amount of individual officers’
compensation or the method used to calculate this amount, based on resolutions made at the Board of
Directors’ meeting held on March 31, 2023 and May 12, 2022 and the 104th Annual General Meeting of
Shareholders held on June 25, 2021.
Compensations for Directors (excluding Director serving as Audit & Supervisory Committee Member) andCorporate Officers with Special Titles (Corporate Officers at the level of Senior Corporate Officer or above)
are composed of the supervision payment and the execution payment.
(1) Supervision Payment
Directors are paid a fixed amount monthly in cash, determined according to responsibilities.
(2) Execution Payment
The Chairman (limited to Executive Directors; the same applies hereinafter) and Corporate Officers with
Special Titles (hereinafter, the Chairman and Corporate Officers with Special Titles shall be collectively
referred to as “Executive Corporate Officers with Special Titles”) are paid an amount comprising basic
compensation, bonuses and stock compensation.
The proportions of basic compensation, bonuses and stock compensation are set at 60:25:15 respectively,
with the purposes of increasing incentives for enhanced performance and promoting the penetration ofmanagement awareness of shareholder value and stock price.
1) Basic Compensation
A fixed amount is paid in cash, according to individual duties and responsibilities.
2) Bonuses
Lump-sum payments will be made in cash after the conclusion of each fiscal year, of an amount calculated
based on the Company’s performance and individual performance during the respective fiscal year.
The proportions based on the Company’s performance and individual performance are 70:30 respectively.
However, the Chairman and President’s bonus is calculated based on the Company’s performance alone.
i. Company’s performance portion
The Company’s performance portion will be calculated and paid according to the achievement of thetarget index, provided the predetermined conditional index is cleared. However, the details and levels,
etc. of the conditional index and target index may be treated differently if the Compensation Committee
recognizes significant changes in the business environment, or in the case of any other significant
requirements.
(i) Conditional index- 17 -

The achievement of a fixed level of profit for each fiscal year and the ability to maintain stable dividend
payments to shareholders will be considered conditions for the payment of the Company’s performance
portion. Profit attributable to owners of the parent will be the conditional index. The Company’s
performance portion of bonuses will not be paid if the profit attributable to owners of the parent for therespective fiscal year is less than 70% of the average for the previous five years, excluding the years withthe highest and lowest profit.
(ii) Target index
In order to increase the incentive for achieving the goals of Nankai Group Management Vision 2027, thetarget index will be the Company’s consolidated operating income, which is a quantitative target for thevision above. The amount of the Company’s performance portion of bonuses will be directly proportional
to the achievement of the budget established at the beginning of each fiscal period, within the range from
80% to 120%. The actual amount to be paid varies within a range from 50% to 150% of the standard
amount of the Company’s performance portion of bonuses. No bonus for the Company’s performance
portion is paid if the achievement rate of the target index is below 80%.
ii. Individual performance portion
The President will evaluate the overall level of achievement of the targets set out by individual officers
each fiscal year, on a scale of 1 to 4, based on which the amount of bonus to be paid for the individual
performance portion will be determined. The actual amount of the individual performance portion of
bonuses to be paid varies within a range from 70% to 130% of the standard amount of the individual
portion of bonuses, or otherwise no amount is to be paid, depending on the President’s evaluation.
3) Stock Compensation
The Company will introduce a stock compensation plan for Executive Corporate Officers with Special
Titles with the aim of further clarifying the linkage of compensation for Executive Corporate Officers
with Special Titles to the Company’s performance and share value, having the officers share withshareholders both the benefits and risks of fluctuation in share prices, and thus raising the officers’
motivation to contribute to enhancing the Company’s performance and corporate value over the mediumto long-term.
The stock compensation plan delivers the Company’s shares to the Executive Corporate Officers with
Special Titles in office during the period from the conclusion of the 102nd General Meeting of
Shareholders until the conclusion of an Annual General Meeting of Shareholders pertaining to the last
fiscal year ending within 3 years from this General Meeting of Shareholders (hereinafter, the “Applicable
Period”). Under the plan, the Company’s shares are acquired through a trust using cash contributed by theCompany, through disposal of treasury stock or through the stock market (including off-auction trading),
and a number of the Company’s shares are delivered through the Trust to Executive Corporate Officers
with Special Titles corresponding to the number of points they have been awarded.
In principle, Executive Corporate Officers with Special Titles will receive delivery of the Company’s
shares upon their retirement from office.
In addition, the Board of Directors may decide to extend the Applicable Period within a period of five
years.
[Targets and results for indicators associated with performance-linked remuneration in fiscal 2023]
Profit attributable to owners of parent, which is the conditional index for performance-linked
remuneration, was 23,926 million yen for fiscal 2023. In addition, compared to the initial budget of 24,300
million yen for consolidated operating income, which is the target index, the result for fiscal 2023 was
30,820 million yen, and the achievement rate was 126.83%.
[Supporting System for Outside Directors] Updated
In order to improve the effectiveness of supervising and auditing by Outside Directors and Outside Directors
serving as Audit & Supervisory Committee Members, General Manager of General Affairs and Public
Relations Department, as the secretariat of the Board of Directors, shall provide them with materials for the
Board of Directors’ meeting in advance whenever possible and as necessary, make an arrangement for themto receive explanation from each officer in charge, etc. about the agenda and the contents ahead of meetings.
Through the aforementioned initiatives, the Company strives to ensure the propriety of decision-making- 18 -

procedures at the Board of Directors’ meetings. In addition, absent Outside Directors will receive materials
on the contents of deliberation and items reported, as well as the notice of the deliberation.
The Secretariat of Audit & Supervisory Committee conveys information such as the date and time of Audit &Supervisory Committee meetings as well as the agenda in advance, while providing assistance on field audits
to each business location as necessary. Information beneficial for the execution of audits is collected from thecontents submitted to the Group Top Committee and other approval documents, and provided to full-time
Audit & Supervisory Committee Members, who report and explain them to Outside Directors serving as Audit& Supervisory Committee Members as necessary.
[Retired Presidents/CEOs Holding Advisory Positions]

Information on retired presidents/CEOs holding advisory positions

Name

Job title/
position

YoshidaJiro

Honorary
Adviser

Yamanaka
MakotoHonorary
Adviser

WatariShinji

Honorary
Adviser

Responsibilities

Advice in response torequests from thecurrent management (asnecessary)
Advice in response torequests from thecurrent management (asnecessary)
Advice in response torequests from thecurrent management (asnecessary)
Activities as a memberof the Management
Committee of Osaka
Metro Co., Ltd

Number of retired presidents/CEOs holding
advisory positions

Employment terms

Date when(Full/part time,

former role

with/without

as president/

compensation, etc.)

CEO ended

TermPart time
Position withoutcompensation

June 29,
2005

Lifetime

Part time
Position withoutcompensation

June 23,
2015

Lifetime

Part time
Position withoutcompensation

June 23,
2015

Lifetime

3

OthersThe Company’s system of Senior Advisers was abolished by a resolution of the Board of Directors held on
June 21, 2019, and at the same time, the Company’s system of Advisers was reviewed.
Former Chairmen and Presidents of the Company will be designated Special Advisers for four years after
retirement as Director (until age 80), after which they will remain Honorary Advisers for life.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System) Updated
The Company has adopted the system of a Company with an Audit & Supervisory Committee and increased
the number and ratio of Outside Directors who have voting rights at Board of Directors meetings,
strengthening the supervisory functions of the Board of Directors and improving management transparency.
By delegating part of the decision-making authority over business execution held by the Board of Directors
to Directors and improving the flexibility of business execution, it aims to transition to a Monitoring Board.
- 19 -

Moreover, the Company separates its executive and supervisory functions clearly by making Corporate
Officers responsible for the execution of business.
Regarding the Board of Directors, based on the business characteristics of the Company, which has a social
responsibility to ensure safe transportation, the Company appoints an appropriate number of Directors fromwithin the Company who are well versed in the railway business and safety management of transportation. In
addition, the Company ensures the fairness, objectivity and transparency of decision-making processes forimportant management issues such as nominations and compensation by appointing several Outside Directors
so that they account for a majority of the Company’s Board of Directors and establishing the Nomination
Committee and the Compensation Committee, in which Outside Directors, including those serving as Audit& Supervisory Committee Members, represent a majority of the members.
Furthermore, the operational status of the internal control system is reported regularly to the Board of
Directors and the Audit & Supervisory Committee, including reports on internal audit plans and results, in aneffort to enhance their management supervisory function.
(1) Business execution
1) Board of Directors
The Board of Directors (chair: Chairman and Representative Director, secretariat: General Affairs andPublic Relations Department) consists of 15 Directors including 8 Outside Directors (6 Directors serve as
Audit & Supervisory Committee Members), and meets on a monthly basis in principle to make decisions
on basic management policy, business execution, and to supervise the execution of duties by Directors. The
Company aims to improve the flexibility of business execution by delegating decisions on importantmatters of business execution to Directors, based on the provisions of the Articles of Incorporation andresolutions of the Board of Directors.
2) The Group Top Committee
Based on the fundamental management policies established by the Board of Directors, the Group Top
Committee, which is comprised of the Chairman, President, and each Group Head (chair: President,
secretariat: General Affairs and Public Relations Department), meets once a week to deliberate on important
issues of business execution to be decided by the President. They seek to comprehensively control businessexecution and optimize decision-making on management.
3) Nomination Committee
As described in “(1) Nomination Committee” shown in “Supplementary Explanation” included in“Committee’s Name, Composition, and Attributes of Chairperson” listed in [Directors] of “Organizational
Composition and Operation” above.
4) Compensation Committee
As described in “(2) Compensation Committee” shown in “Supplementary Explanation” included in“Committee’s Name, Composition, and Attributes of Chairperson” listed in [Directors] of “Organizational
Composition and Operation” above.
(2) Audit and supervision
1) Auditi. Audit by the Audit & Supervisory Committee
The Audit & Supervisory Committee (Chairperson: Miki Shohei, Outside Director serving as Audit &Supervisory Committee Member; secretariat: Secretariat of Audit & Supervisory Committee) is composedof 6 members, including 4 Outside Directors and includes members who have considerable knowledge offinance and accounting. It meets once a month in principle, where Audit & Supervisory Committee
Members selected by the Audit & Supervisory Committee investigate the status of business and assets of
the Company and its subsidiaries, and the Audit & Supervisory Committee deliberates and passes
resolutions, etc. In this manner, the Audit & Supervisory Committee audits the execution of duties byDirectors. Systems are in place to assist the duties of the Audit & Supervisory Committee, including theappointment of dedicated support staff. The full-time Audit & Supervisory Committee Members are
consulted prior to applying any personnel changes, evaluations, etc. to these dedicated staff members, inorder to ensure their independence.
- 20 -

In the current fiscal year, the Audit & Supervisory Committee met 14 times. Attendance by individual Audit& Supervisory Committee Members at these meetings is as follows.
Position
Audit & Supervisory Committee
Chairperson
Outside Directors serving as
Audit & Supervisory Committee
MemberAudit & Supervisory Committee
Chairperson
Full-time Audit & Supervisory
Committee Member
Full-time Audit & Supervisory
Committee Member
Full-time Audit & Supervisory
Committee Member
Outside Directors serving as
Audit & Supervisory Committee
MemberOutside Directors serving as
Audit & Supervisory Committee
MemberOutside Directors serving as
Audit & Supervisory Committee
MemberName

Number of the Audit& Supervisory
Committee met

AttendanceArao Kozo

3

3

Miki Shohei

33Miki Shohei

1111

Iwai Keiichi

33Urai Keiji

14

14

Yasuda takayoshi

11

11

Kunibe Takeshi

14

13

Igoshi Tomoko

14

14

Tanaka Takahiro

11

11

Notes:
1) Attendance by the Audit & Supervisory Committee Chairman Mr. Arao Kozo and Full-time Audit &Supervisory Committee Member Mr. Iwai Keiichi only covers Audit & Supervisory Committee meetings
held during their term of office (up until the conclusion of the 106th Annual General Meeting of
Shareholders held on June 20, 2023).
2) Outside Director serving as Audit & Supervisory Committee Member Mr. Miki Shohei was appointed
Chairman of the Audit & Supervisory Committee on June 20, 2023.
3) Attendance by Full-time Audit & Supervisory Committee Member Mr. Yasuda Takayoshi and Outside
Director serving as Audit & Supervisory Committee Member Mr. Tanaka Takahiro only covers Audit &Supervisory Committee meetings held after their inauguration on June 20, 2023.
Specific details considered at the Audit & Supervisory Committee included: audit reports, basic matters on
audit, the progress of the business plan, the agenda of and matters to be reported at the Group Top
Committee, the status of audit by the Accounting Auditor, evaluation of the Accounting Auditor, status ofinternal audit, etc. and the plan for the following fiscal year.
Regarding the status of activities of the Audit & Supervisory Committee, the Committee regularly
exchanged opinions with Representative Directors and officers in charge of each department, andexchanged opinions with Directors, Corporate Officers and other employees as necessary with respect toindividual management issues. In addition, full-time Audit & Supervisory Committee Members attended
he Group Top Committee and other important meetings and heard reports about issues that are importantto the management of the Company and the Group, including the status of business execution, operating
results and financial conditions. These Committee Members also received important information, etc.,
including draft plans after approval and internal auditing reports for review, and conducted on-siteexaminations at facilities, places of operations, etc. of the Group. Full-time Audit & Supervisory Committee
Members reported to Outside Directors serving as Audit & Supervisory Committee Members at the Audit& Supervisory Committee’s meetings about information gathered through these efforts and add appropriate
explanations about such information from the perspectives of those well-versed in the business of theCompany. In turn, Outside Directors serving as Audit & Supervisory Committee Members provided- 21 -

guidance and state opinions based on their expertise and experiences outside the Company. By following
these different roles and mutually complementing each other’s functions, they increased the effectivenessof audits by Audit & Supervisory Committee Members.
ii. Internal audit
For the purposes of accurately understanding the state of business operations and promoting theimprovement thereof from the perspective of increasing management efficiency, as well as maintaining andpromoting compliance management, we have established a system which enables the Internal Audit
Department (11 members) to collaborate in the systematic implementation of internal audits (including
audits of group companies) based on audit plans established at the start of each accounting period. Basicaudit policies, concrete measures and audit themes are determined when establishing audit plans, based on
consideration of issues such as risks faced by the Company and the Group, and revisions to laws. Reportson the implementation status of the audits are then made by the General Manager of the Internal Audits
Division at meetings of the Board of Directors and Audit & Supervisory Committee.
Furthermore, audits of auditors, which are performed by Group Company Auditors (6 persons) belonging
to the Internal Audits Division, are used as supplementary measures for internal audits by monitoring andsupervising group companies as necessary.
iii. Accounting audit(i) Name of the Accounting Auditor
KPMG AZSA LLC.
(ii) Period of continuous service: 55 years
The period of continuous service shown above corresponds to the period since Asahi & Co., which later
became (part of) KPMG AZSA LLC, was established as an audit firm, due to extreme difficulties toascertain the situation prior to that time.
(iii) Certified public accountants who execute the audit
The Company has entered into an audit contract with KPMG AZSA LLC., for the purpose of audit on NonConsolidated and Consolidated Financial Statements. In the most recent fiscal year ended March 31, 2024,
the following two certified public accountants were designated as engagement partners in charge of audit
and attestation services.
Classification
Designated limited liability partner
Designated limited liability partner

Name
Kondo Yasuhito
Kitamura KeikoYears of continuous service
4 years
6 years

In the fiscal year ending March 31, 2025, the Company continues its audit contract with KPMG AZSA
LLC., and the following two certified public accountants are designated as engagement partners in chargeof audit and attestation services.
Classification
Designated limited liability partner
Designated limited liability partner

Name
Obata Takuya
Kitamura Keiko(iv) Assistants of audit services
Assistants of audit services were selected in accordance with the selection standards of the Accounting
Auditor, namely, 12 certified public accountants, 7 persons who have passed the CPA examinations and 17
other members.
(v) Policy for selecting the Accounting Auditor
The Audit & Supervisory Committee selects the Accounting Auditor based on consideration of their
independence and quality control systems including systems to ensure the fair execution of duties, as well
as factors such as whether the audit plans actually reflect risks to the Company’s business, and whether the
projected audit fees are appropriate. The Audit & Supervisory Committee also requires the Accounting
Auditor to provide explanations regarding the status of its independence and quality control, and the- 22 -

appropriateness of its system for executing audit duties, and confirms the status of their maintenance andoperation.
The Company’s policy on the dismissal of or decision to not reappoint the Accounting Auditor is as follows.
[Policy on the dismissal of or decision to not reappoint the Accounting Auditor]
If The Audit & Supervisory Committee judges that the situation of the Accounting Auditor corresponds tothe items listed in Article 340, Paragraph 1 of the Companies Act, the Company will dismiss the Accounting
Auditor based on the unanimous agreement of all Audit & Supervisory Committee Members.
If the Accounting Auditor is otherwise no longer considered capable of performing its duties appropriately,or if it is judged reasonable to change Accounting Auditors in order to increase the fairness and proprietyof the audit, The Audit & Supervisory Committee will determine the contents of a proposal on the dismissal
or non-reappointment to be submitted to the General Meeting of Shareholders.
iv. Cooperation among internal audit, audit by the Audit & Supervisory Committee, and accounting audit(i) Cooperation between internal audit and audit by the Audit & Supervisory Committee (including audit
by Audit & Supervisory Committee Members)
The Audit & Supervisory Committee conducts interviews with the Internal Audit Department on the audit
plan they developed, and receives reports based on the plan, and asks for an explanation as necessary. The
Audit & Supervisory Committee will also make efforts to strengthen autonomous monitoring function byattending field audits and exchanging opinions, which will lead to closer cooperation between internal audit
and audit by the Audit & Supervisory Committee, and consequently, will result in the further enhancementof the effectiveness of audits backed by the collaborative effects.
(ii) Cooperation between audit by the Audit & Supervisory Committee (including audit by Audit &Supervisory Committee Members) and accounting audit
The Audit & Supervisory Committee conducts interviews with the Accounting Auditor on the audit plan,
receives audit reports in light of the plan on a quarterly basis, informs the Accounting Auditor of the audit
plans of the Audit & Supervisory Committee, and holds question and answer sessions. The Audit &Supervisory Committee will also make efforts to improve the quality of both audits by the Audit &Supervisory Committee and accounting audits through closer cooperation with the Accounting Auditor,
such as by attending field audits conducted by the Accounting Auditor, as well as holding meetings with
the Accounting Auditor where they can exchange information obtained through audits conducted by the
Audit & Supervisory Committee Members and accounting audits conducted by the Accounting Auditor,
respectively, as necessary.
(iii) Cooperation between internal audit and accounting audit
The Internal Audit Department gains an understanding from the Accounting Auditor regarding the audit
plan annually in July. Together with Audit & Supervisory Committee Members and related departments,
the Internal Audit Department will receive reports about the implementation status of audits from the
Accounting Auditor. The Internal Audit Department also strives to enhance the cooperation with the
Accounting Auditor by attending field audits conducted by the Accounting Auditor as necessary.
v. Relationship among internal audit, audit by the Audit & Supervisory Committee, accounting audit, and theInternal Control Department(i) Relationship between internal audit and the Internal Control Department
The Internal Audit Department is required to conduct audits to examine whether systems of each department
responsible for the development and operation of the internal control system are properly developed andeffectively operated. Chief Managers, Managers and related employees of departments subject to audit are
required to cooperate so that the relevant audits are carried out smoothly and swiftly. The results of therelevant audits are promptly reported by the General Manager of the Internal Audits Division to the
President and Representative Director, and also shared with the relevant Internal Control Department.
(ii) Relationship between audit by the Audit & Supervisory Committee and the Internal Control Department
Full-time Audit & Supervisory Committee Members will establish a system in which they can carry out
interviews individually with Officers and Chief Managers in charge of each department that develops andoperates each system related to the internal control system as well as with the presidents of group- 23 -

companies, whereby full-time Audit & Supervisory Committee Members can confirm the effectiveness of
the relevant systems.
(iii) Relationship between accounting audit and the Internal Control Department
Officers, Chief Managers, Managers, and related employees of the Accounting & Finance Department haveestablished, in collaboration with the Internal Audit Department, a system in which they can cooperate with
the Accounting Auditor in order that accounting audits are carried out by the Accounting Auditor smoothlyand effectively.
The Accounting & Finance Department and Internal Audit Department both attend the presentation of theaudit report to the Audit & Supervisory Committee by the Accounting Auditor.
2) Outside Officers
i. Functions and roles to be fulfilled in corporate governanceOutside Directors are expected to utilize their knowledge, experience and expertise as business managers,
certified public accountants or consultants for the management of the Company. They are responsible forthe function which contributes to the improvement of efficiency and transparency in management fromtheir independent standpoints without any mutual relationship which may impose significant control overthe management of the Company.
Outside Directors serving as Audit & Supervisory Committee Members are expected to utilize theirknowledge, experience and expertise as business managers, lawyers or public prosecutors for the auditingof the Company. They are responsible for the function which contributes to the securing of transparency inmanagement and the qualitative improvement of audits from their independent standpoints without any
mutual relationship which may impose significant control over the management of the Company.
ii. Cooperation among supervision/audit, internal audit, audit by the Audit & Supervisory Committee, andaccounting audit(i) Cooperation between supervision/audit and internal audit
The Board of Directors and the Audit & Supervisory Committee obtain audit plans from the Internal Audit
Department and receive reports on audits based on the plans. The Audit & Supervisory Committee also
requests explanations from the Internal Audit Department and the Compliance Management Promotion
Department as necessary.
(ii) Cooperation between supervision and audit by the Audit & Supervisory Committee (including audit byAudit & Supervisory Committee Members)
The Company holds meetings for Representative Directors, Outside Directors not serving as Audit &Supervisory Committee Members and the Audit & Supervisory Committee to exchange opinions, in orderto ensure the effectiveness of audits by the Audit & Supervisory Committee.
(iii) Cooperation between supervision/audit and accounting audit
The Audit & Supervisory Committee obtains audit plans from the Accounting Auditor with the attendanceof Outside Directors not serving as Audit & Supervisory Committee Members. In addition to an exchangeof opinions on audit plans, question and answer sessions are held with the Accounting Auditor as necessary.
iii. Relationship between supervision/audit and the Internal Control Department
As provided above in [Supporting System for Outside Directors] shown in “1. Organizational Composition
and Operation.”
iv. Agreement for limitation of liability
The Company has concluded an agreement with Directors; Mr. Tsunekage Hitoshi, Ms. Koezuka Miharu,
Ms. Mochizuki Aiko, and Mr. Hori Naoki, and with Directors serving as Audit & Supervisory Committee
Members; Mr. Kunibe Takeshi, Mr. Miki Shohei, Ms. Igoshi Tomoko, and Mr. Tanaka Takahiro to limit
their liability for damages stipulated in Article 423, Paragraph 1 of the Companies Act, pursuant to theprovisions of Article 427, Paragraph 1 of the Companies Act and Article 26 of the Articles of Incorporation.
The maximum amount of liability for damages based on the agreement shall be the amount stipulated bylaws and regulations.

- 24 -

3. Reasons for Adoption of Current Corporate Governance System
As described above in “2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination andRemuneration Decisions (Overview of Current Corporate Governance System),” the Company has adopted
the present corporate governance system, including the adoption of an Audit & Supervisory Committee
structure, because it considers that the system is appropriate in view of its aim to introduce a Monitoring
Board structure, clearly separating its executive and supervisory functions.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights
UpdatedEarly Notification of General
Shareholder Meeting

Scheduling AGMs Avoiding
the Peak Day
Allowing Electronic Exerciseof Voting Rights

Supplementary Explanations
Materials for the general meeting of shareholders are posted on the respective
websites of the Company and the Tokyo Stock Exchange as soon as possible
from the electronic provision measures commencement date (the day three
weeks prior to the day of the general meeting of shareholders or the day on
which the notice of convocation is sent; whichever is earlier) stipulated in the
Companies Act, and the notice of convocation of the general meeting ofshareholders is sent in principle from around 3 to 6 business days prior to thestatutory deadline (at least 2 weeks prior to the general meeting ofshareholders).
[107th Meeting]・ Posting on the websites of the Company and Tokyo Stock Exchange
Five business days prior to the date of sending・ SendingSix business days prior to the statutory deadline
The Company sets the schedule for the general meeting of shareholders inprinciple to avoid the foremost peak day.
The 106th Annual General Meeting of Shareholders, which is for the mostrecent fiscal year, was held on June 20, 2023, avoiding the foremost peak day.
The Company provides exercise of voting rights via the Internet, etc. for thegeneral meeting of shareholders.

Utilization of Electronic
Voting Platform and Other
Methods to Improve theEnvironment for Institutional
Investors’ Voting

The Company participates in the Electronic Voting Platform operated by ICJ,Inc.

Providing Convocation Noticein English

The Company prepares an English version of the convocation noticeincluding its reference documents.

Other

The notices of convocation are posted on the Company’s website.
( https://www.nankai.co.jp/ir/stock/meeting ) (available in Japanese only)

2. IR Activities Updated
Supplementary Explanations- 25 -

Presentation byRepresentatives

Formulation andAnnouncement of Disclosure
PolicyRegular Investor Briefings forAnalysts and Institutional
Investors
Posting of IR Materials on
WebsiteEstablishment of Department
and/or Manager in Charge ofIR

The Disclosure Policy has been formulated and posted on
the Company’s website.
(https://www.nankai.co.jp/en/ir/management/disclosure_p
olicy)The Company holds briefings twice a year, in May andNovember. Following items are to be explained at eachbriefing session; the outline of financial results andfinancial results forecasts respectively for the first six
months and the full-year, the progress of the medium termbusiness plan, and other related items.
IR materials are posted on the Company’s website.
(https://www.nankai.co.jp/en/ir)
IR activities are handled by Sustainability Promotion
Department. The officer in charge of IR activities is Otsuka
Takahiro, Managing Corporate Officer and Head ofCorporate Strategy Group (CFO)

Available

3. Measures to Ensure Due Respect for Stakeholders Updated

Stipulation of Internal Rules
for Respecting the Position of
Stakeholders

Implementation ofEnvironmental Activities, CSR
Activities, etc.

Supplementary Explanations
As an all-round lifestyle provider centering on the railway business, theCompany established its Corporate Philosophy under the belief that it shallgreatly contribute to the building of a better society through a wide range ofbusinesses that support people’s lives comprehensively. The Company also
set “Ensuring compliance meticulously” as one of the Group management
policies and established its Code of Business Ethics for the sound growth of
the Company and group companies as well as for the establishment ofbusiness ethics. Through these initiatives, we are committed to the promotionof compliance-based management.
In addition, we have been promoting the “Brand Initiative Campaign” as partof in-house efforts to improve CS and the Group brand. In this campaign,
starting from setting annual targets for each department, we are engaged invarious measures from viewpoints of our customers. The Company also takes
all possible precautions to prevent accidents by continuing investment andemployee training with a view to “assuring safety,” which is the Company’s
most important responsibility. Preparing for the occurrence of disasters, inorder to secure the safety of customers, the highest priority, and aiming forearly recovery of our business activities, we have established the Disaster
Countermeasure Regulations, in a commitment to fulfilling our corporatesocial responsibilities. In addition, in the case of an emergency such as amajor earthquake, in order to prevent the interruption of important businessactivities, or to enable the recovery of such activities as quickly as possible in
the event of interruption, we have formulated the Business Continuity Plan
(BCP), which stipulates countermeasures to be taken beforehand and actionplans.
In parallel with the promotion of compliance-based management as an effort
in CSR, the Company has established the Environmental Philosophy as thefoundation of its environmental measures and the Environmental Policies toclarify its policies concerning the environment. Based on these policies, weare promoting various initiatives in each division including the introductionof environment-friendly train stock, etc.
For details, please visit the Company’s website- 26 -(https://www.nankai.co.jp/en/sustainability/materiality/06environ
ment).
The Company has established “Contribution to the Community” as part of its
Corporate Philosophy, and aims to enhance corporate value over the medium
and long term by expanding a range of business activities centering on public
transport, and aimed at increasing value along its lines. The Company has
established a Sustainability Policy to convey the Group’s approach aimed atrealizing a sustainable society even more clearly to internal and external
stakeholders.
<Sustainability Policy>
The Company aims to achieve both “the sustained enhancement of corporate
value” and “the realization of a sustainable society,” through co-creation andcooperation with a wide range of stakeholders including local residents, local
governments, companies etc., primarily in areas close to the Company’s lines,
as well as through the practice of the Company’s Corporate Philosophy.
Under this Policy, the Company has established 7 Sustainable Key Themes(Material Issues) incorporating the perspective of the SDGs, as priority longterm measures.
(1) Further pursuit of safety, security and satisfaction(2) Prosperous and intimate urban development(3) Creating a future overflowing with dreams(4) Enriching lives(5) Creating workplaces and promoting human resource development toenable all personnel to utilize their abilities(6) Contributing to global environmental conservation(7) Strengthening corporate base in an honest and fair manner

Development of Policies on
Information Provision to
Stakeholders

Other

For details of the Sustainability Policy and Sustainable Key Themes (MaterialIssues), please visit the Company’s website(https://www.nankai.co.jp/en/sustainability/sustainability_policy).
The Company has established a system which facilitates the steady andproactive fulfillment of its social responsibilities by developing anenvironmental management system and making greater efforts to preserve theenvironment in the company. Additionally, as a part of social contribution
activities, the Company has established a scholarship fund for high school
students orphaned in traffic accidents mainly in Osaka Prefecture with theaim of contributing to the development of promising human resources.
For the purpose of timely disclosure of corporate information, the Company
has internally appointed an officer in charge of handling information. We havealso strived to properly comprehend material corporate information as wellas to strictly control such information. In disclosing information, theCompany prepares disclosure documents following the deliberation withrelated departments while receiving advice and instructions from the
Accounting Auditor, etc. as necessary. Such documents are promptly
disclosed following the resolution or reporting at the Board of Directors’
meeting, etc. Additionally, we have been making group-wide efforts toward
the realization of the principle of the precise announcement of financial
results within the month following closing date.
The Company intends to appoint competent human resources as officers or
managerial staff regardless of gender.
The Company also intends to enhance its corporate value and steadily live up
to the trust of society with a corporate culture in which each of the employeeswith various personalities and capabilities respects each other and proactively
leverage those advantages.
Particularly, in order to further promote female advancement, the Company
will make efforts to increase the number of women employed in various fields
and as various posts including managerial and leadership positions. We intend- 27 -

to steadily raise the percentage of women to the total number of recruits(increase the percentage of women to the total number of new hires[consolidated] to around 30% by fiscal 2030 and the percentage of women to
the total number of new graduate hires on the Management Course* [nonconsolidated] to around 40% by fiscal 2026).
Accordingly, the Company will continue to enhance its initiatives to provide
more opportunities for women to play a greater role, such as the provision of
expanded career development support, the improvement of the working
environment, reforms of the workplace culture and employee’s awareness,
etc.
*Career fast-track course that aims to allow hires to play a more active role
as a manager or as management personnel.

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development Updated(1) Basic views
We recognize that the strengthening of corporate governance functions is an important management issue.
For this reason, we have strived to implement strict adherence to laws and regulations. Additionally, we havebeen making efforts to achieve transparent management, fair and rational decision-making, and reinforcementof functions to oversee these operations.
(2) Progress of development
1) System to ensure that the execution of duties by Directors, etc. of the Company and its subsidiaries
conforms to laws, regulations, and the Articles of Incorporation
For the sound growth of the Company and group companies and for the establishment of business ethics, inaddition to creating Code of Business Ethics, we have created dedicated respective organizations responsible
for the promotion of internal auditing and compliance-based management.
As a guideline to deepen the spirit of our Code of Business Ethics, the Company created a ComplianceHandbook which specifies the particular business operations and conducts required for each officer andemployee of the Company and group companies. By conforming ourselves to the Compliance Manual andproviding training sessions, we are committed to achieving the instilment of the philosophy of compliancebased management as well as the elimination of relationships with anti-social forces. We have also establisheda Corporate Ethics Hotline System where officers and employees can send reports or receive consultations,with the aim of early detection or correction of legal and ethical issues.
In addition, the Risk Management Committee deliberates various measures for the promotion of compliancebased management, and in the event of a serious compliance violation, will make proposals for corrections
and recurrence prevention measures.
Moreover, in addition to properly establishing and operating systems which are necessary for ensuring thereliability of financial reporting, we will be committed to maintaining and improving such systems throughevaluations of their effectiveness by the Internal Audit Department.
2) Systems related to storing and managing information concerning the execution of duties by Directors
Documents related to the execution of duties by Directors and Corporate Officers, including circulated draft
plans and the minutes of the Board of Directors’ meetings and other important meetings, are preparedappropriately, stored and managed in accordance with our Document Regulations and other in-house company
rules. In addition, we have established a Security Policy and arranged systems where we can appropriately
safeguard our information resources and secure their “confidentiality,” “completeness,” and “availability.”3) Regulations and other systems related to the management of loss risk for the Company and its subsidiaries
The Company has established the Risk Management Committee with the aim of avoiding or reducing risks
that may have a significant impact on the Group’s management, including compliance violation, byconducting comprehensive and centralized risk management within the Group, and has established a system
to report the status of risk management to the Board of Directors.
The Company has established the Crisis Management Guidelines as comprehensive standards to prevent theoccurrence of crises (excluding serious accidents and disasters) as well as to minimize damage to theCompany, its officers and employees, travelers and customers should they occur. In addition, we have- 28 -

established the Disaster Countermeasure Regulations with the aim of fulfilling our corporate social
responsibilities particularly by taking measures to minimize damage such as regulating a countermeasureorganization and emergency handling procedures for occurrence or potential occurrence of major accidents
and disasters, efforts for early recovery of the Company’s operations, as well as commitment to secure thesafety of travelers, customers, and our officers and employees.
Moreover, in the Group Company Management Regulations, it is stipulated that we shall work to grasp crisis
information across group companies and conduct crisis management for group companies in accordance with
our Crisis Management Guidelines.
In the railway business, for the purpose of securing transportation safety, the Company has established the
Safety Management Regulations and the Safety Promotion Committee. Going forward, we will be committed
to the further promotion of safety management.
With respect to risk management accompanying the respective business operations of each of the Company’s
departments and group companies, the relevant departments and companies have been taking measures suchas the provision of training sessions, the development of manuals and regulations, etc., as necessary.
4) System to ensure the efficient execution of duties by Directors and others in the Company and its
subsidiaries
In order to realize the systematic and efficient conduct of our business activities, in our in-house company
rules, we have clearly stipulated the business organizations and the assignment of duties as well as the
responsibilities, authorities, duties and other roles of the employees assigned to the respective positions.
Moreover, we have adopted the structure of a Company with an Audit & Supervisory Committee, delegating
decisions regarding important business execution to Representative Directors, and a system of Corporate
Officers, giving Corporate Officers responsibility for business execution, and enhancing the agility of businessexecution by clearly separating the Company’s executive and supervisory functions. Based on thefundamental management policies established by the Board of Directors, the Group Top Committee, which iscomprised of the Chairman, President, and each Group Head, meets once a week to discuss matters on
important business execution. Through this and other efforts, we seek to comprehensively control businessexecution and optimize decision-making on management.
For the execution of duties by Directors of Nankai group companies, based on our Group Company Guidance
Policy, we have stipulated basic policies for organizational form and institutional design after considering
their business scales, special qualities and characteristics while keeping in mind their agility and autonomy inmanagement. Moreover, with the aim of ensuring the reliability of financial reporting and achieving the higher
efficiency in business operations, we have adopted shared services for accounting operations.
In addition, for the purpose of enhancing management effectiveness, particularly in order to accurately
understand the state of business operations and promote their improvement, we have established a system
where the Internal Audit Department can systematically implement internal audits including audits for groupcompanies, and report the results to the Board of Directors and the Audit & Supervisory Committee.
5) Systems related to reporting to the Company about items concerning the execution of duties by subsidiarycompany Directors and other staff
Based on the Group Company Guidance Policy and the Group Company Management Regulations, we
maintain close contact for mutual understanding between the Company and our group companies. We also
require group companies to obtain advance approval from the Company for items of a certain importance onmanagement such as important facility investments, and ask for reporting as appropriate.
6) Systems to ensure the propriety of business conducted by other group members
While we strive for unified management and effective control as a corporate group by dispatching our officers
and employees to serve as officers and management personnel in our group companies, we seek to strengthen
the functions of Auditors of our group companies and enhance their information sharing through theplacement of Associate Auditors and discussions at the Group Company Auditor Counsel.
Furthermore, in addition to stipulating the IT Management Regulations for the establishment of IT control,
the Company’s Examination Committee has prepared strict screening procedures for the execution offinancing to group companies in order to optimize the business operation of the Group as a whole.
7) System to ensure that the auditing by the Audit & Supervisory Committee is conducted effectively
We have established the Secretariat of Audit & Supervisory Committee as an organization dedicated to work
related to the Audit & Supervisory Committee. In accordance with the Company Regulations, the Secretariat- 29 -

of Audit & Supervisory Committee is clearly separated from the command structure of the President and other
Corporate Officers, and its staff members follow the directions and orders of Audit & Supervisory Committee
Members. In addition, the consent of full-time Audit & Supervisory Committee Members shall be obtained
regarding personnel changes and evaluations of members of the Secretariat of Audit & Supervisory
Committee.
The Company’s President, other Corporate Officers and employees request that full-time Audit & Supervisory
Committee Members attend the Group Top Committee and other important meetings where they report about
issues that are important to the management of the Company and the Group, including the status of businessexecution, operating results, and financial conditions. We have also arranged a system for full-time Audit &Supervisory Committee Members where they can receive important information, etc., including draft plans
after approval and internal auditing reports, for review. Moreover, in response to requests from the Audit &Supervisory Committee or full-time Audit & Supervisory Committee Members, we conduct exchanges of
opinions related to individual management issues.
For the operation of the Corporate Ethics Hotline System, the Corporate Ethics Hotline System Rules declarethat officers and employees shall not treat informants disadvantageously or unfairly, nor shall they conduct
acts of retribution or discrimination. Moreover, we have established a system whereby reports about the statusof the operation are made regularly to full-time Audit & Supervisory Committee Members and the Board of
Directors.
While setting a budget for ordinary auditing expenses based on the audit plans of the Audit & Supervisory
Committee, when expenses are claimed outside of the budget for special circumstances such as for when
Audit & Supervisory Committee Members consult lawyers, certified public accountants, and other experts
outside the Company for their opinions for the purpose of executing their duties, the Company shall not
unreasonably withhold payment except for cases where the claimed expenses are deemed unnecessary for the
execution of the duties of the Audit & Supervisory Committee.

2.

Basic Views on Eliminating Anti-Social Forces Updated(1) Basic views
For the sound growth of the Company and group companies and for the establishment of corporate ethics, theCompany has formulated the Code of Business Ethics. The Code of Business Ethics specifies our intention to
reject all contact with organizations involved in activities in violation of the law or accepted standards of
responsible social behavior, and represents our efforts to break off any relationships with anti-social forces.
(2) Progress of development
The Company has distributed the Compliance Handbook to all officers and employees as a guide for them tomake decisions and act in such a way that ensures compliance in accordance with the Code of Business Ethics.
In order to eliminate anti-social forces, the Company has set up the Compliance Management Promotion
Department, which is manned full-time by a former member of the police.
In addition to the aforementioned matters, the specific progress of internal system development and measures
are as follows.
1) The President expresses the spirit of the Code of Business Ethics and gives statements in every possible
occasion inside and outside the Company in order to deepen the spirit of the Group as a whole and each
officer and employee.
2) If unreasonable demands are posed by anti-social forces, immediate reporting and consultation shall bemade to the Compliance Management Promotion Department. In response, the Compliance Management
Promotion Department shall not succumb to demands from anti-social forces, but support the initiatives
to break off relationships by giving advice and instructions. Additionally, the Company has built close
collaborations with external specialized organizations (the police, lawyers, the Osaka Center for Removalof Criminal Organizations, etc.), which enables us to consult them and receive advice as necessary.
3) Counterparties shall always be monitored whether they fall under anti-social forces by utilizing theCompany’s own database, information from external specialized organizations, etc. In addition, in theevent of occurrence of any relationship with anti-social forces without prior knowledge, the Company
shall promptly terminate the relationship after discovery or concerns to that effect.
4) In order to prevent damage in cases where anti-social forces become our business partners and pose
unreasonable demands, the Company has taken measures to include “clauses for the exclusion oforganized crime groups” in contracts, trade agreements, and similar documents.

- 30 -

5) The Company participates in community activities and meetings hosted by the Osaka Prefectural Center
for Removal of Criminal Organizations, the Osaka Corporate Defense Countermeasures Federation, etc.
to eliminate anti-social forces including crime syndicates.
6) In the event that any damage is caused due to unreasonable demands, the Company shall clearly declareinside and outside the Company that it will not succumb to unreasonable demands, and diligently file adamage report to the police without hesitation to prevent the further spread of damage.

- 31 -

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

Not Adopted

Supplementary Explanation(1) Basic Policy
The Company believes that the decision in response to a takeover proposal involving a transfer of theCompany’s control shall be ultimately made based on the intent of our shareholders as a whole. Furthermore,
the Company will not deny all large-scale purchases of the Company’s shares if such purchases contribute tocorporate value and thus the common interests of shareholders.
However, some large-scale purchases do not actually contribute to the corporate value of their target
companies or the common interests of shareholders. These include acquisitions with aims that obviously doharm to corporate value and the common interests of shareholders, those that effectively force existing
shareholders to sell their holdings, and those that do not provide sufficient time or information for the Boardof Directors and shareholders of the target company to consider the details of the large-scale purchase, or for
the Board of Directors to present an alternative proposal.
In particular, in order to secure and enhance corporate value, it is necessary for the Company to maintain andstrengthen its positive relationship of trust with its customers, centered around those who live close to its
lines, and the local community. Furthermore, it is imperative that the Company ensures safe transportation,
its greatest responsibility as a railway company. While it is of course necessary for any large-scale buyer ofthe company’s shares to understand details of the Group’s finance and business, it is also vital for such a buyer
to understand the source of the Company’s corporate value, secure and enhance it over the medium and longterm. If this is not the case, then the Company’s corporate value and the common interests of shareholders
will be damaged.
The Company believes that if a large-scale buyer does not contribute to the Company’s corporate value andthe common interests of shareholders, it is not appropriate for that buyer to control the Company’s financeand business policy. In response to large-scale purchases of this nature, we believe it is necessary to engage
appropriate measures, in accordance with the Financial Instruments and Exchange Act, the Companies Act
and other relevant laws and regulations, to secure the Company’s corporate value and the common interestsof shareholders.
(2) Summary of the Details of Efforts to Realize the Fundamental Policy
1) Special efforts contributing to the realization of the fundamental policy
In order to help realize Nankai’s Corporate Image in 2050 and achieve the Nankai Group Management Vision
2027, the Group has formulated the medium term business plan, Kyoso 140 Plan covering the period fiscal
2022 through fiscal 2024, and is currently promoting this plan in earnest.
In this medium term business plan, as described on the Company’s website(https://www.nankai.co.jp/en/ir/management/medium-term_management_plan), we will carry out threebusiness strategies, human resource strategies, and financial strategies, with the aim of achieving sustainablegrowth and the enhancement of corporate value over the medium and long term.
2) Efforts to prevent decisions on the Company’s financial and business policy being controlled by those whoare inappropriate in light of the fundamental policy
In an effort to prevent decisions on the Company’s financial and business policy being controlled by those
who are inappropriate in light of the fundamental policy, the Company will request any party intending toundertake a large-scale purchase of the Company’s shares to provide information necessary for shareholders
and the Board of Directors to consider the details of the purchase. Based on this information, the Board of
Directors will discuss and negotiate with the buyer as necessary, and present the opinion of the Board of
Directors to shareholders. In addition, the Company will engage appropriate measures, in accordance with the
Financial Instruments and Exchange Act, the Companies Act and other relevant laws and regulations,
including working to ensure that shareholders have sufficient time to make an appropriate decision on thepurchase.
(3) The decision of the Board of Directors and its reasons concerning each effort described above- 32 -

The initiatives mentioned in 1) of (2) above, have both been established as concrete measures to continuously
and sustainably enhance corporate value of the Company and the common interests of shareholders, andclearly contribute to the realization of the fundamental policy.
Likewise, the efforts described in 2) of (2) above are aimed at warding-off acquisitions that are detrimental tocorporate value and the common interests of shareholders, thus securing and enhancing corporate value andthe common interests of shareholders, by ensuring sufficient time and information for all shareholders to makean appropriate decision, as well as securing an opportunity for negotiation with the potential buyer, if a largescale acquisition of the company’s stock is attempted.
Therefore, these efforts and measures conform to the fundamental policy and the common interests ofshareholders of the Company, and are not aimed at maintaining the status of the Company’s officers.

2. Other Matters Concerning Corporate Governance System
The Timely Disclosure System of the Company has been stipulated in the Disclosure Policy and posted on
the Company’s website. (https://www.nankai.co.jp/en/ir/management/disclosure_policy)- 33 -

【Corporate Governance System】
General Meeting of Shareholders
Elect

Elect

Elect

Board of Directors
Directors serving as Audit &Supervisory Committee Members

Directors not serving as Audit &Supervisory Committee Members<Nomination Committee / Compensation Committee>

Supervise<The Group Top Committee>
President
Representative Director<Audit & Supervisory
Committee>

Audit/
Supervise

Direct/Order

AssistDirect/Order

Secretariat of Audit & Supervisory
Committee

Supervise

Corporate Officers
with Special Titles
Elect/Supervise

Direct/Order

Elect/Supervise

Corporate Officers

Cooperate

Dispatch Officers/
ManageInstruct/Advise

Group company
audit

Direct/Order
Audit

DivisionsGroup companies

Cooperate

Group company
audit

Internal audit

Accounting audit
ReportCooperate
Cooperate
Accounting audit

Internal Audit
Department

Accounting Auditor

Cooperate

Outside Directors

[Timely Disclosure System]
Subsidiary
Subsidiary

Subsidiary

Subsidiary
The Company

Administration Department ofEach Group Company

Finance &Accounting
Department

Deliberation

Department in Charge(Sustainability Promotion Department,
Finance & Accounting Department,
General Affairs and Public Relations Department,
etc.)

Officer in Charge ofHandling Information

Proposal of agenda or report

Board of Directors

Secretariat(General Affairs Division General
Manager)

The Group Top
Committee

General Affairs and Public
Relations Department(in charge of legal affairs)

President andRepresentative Director

Approval
General Affairs and Public
Relations Department(in charge of legal affairs)

General Affairs and Public
Relations Department(in charge of public relations)
The Company’s website

Stock Exchange

Media Organizations

Investors