Note : This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

Corporate Governance
H-ONE CO., LTD.

Last updated: July 1, 2024

H-ONE CO., LTD.
Representative Director, President & CEO
Seiki Mayumi
Contact: +81-48-643-0010
Securities code: 5989
http://www.h1-co.jp/
Described below is the current state of corporate governance at the Company.

I.Basic Outlook on Corporate Governance, Capital Composition, Company Attributes, andOther Basic Information
1.

Basic Outlook on Corporate GovernanceOur basic sustainability policy calls for various activities, grounded in our Management Philosophy, in each of the environmental,social, and governance (ESG) aspects, thereby assuming our role as a company that contributes to the world.
Under this basic policy, we recognize enhancement in corporate governance to enable the Group’s sustained growth while rewarding
the expectations and trust placed in us by shareholders, customers, employees, and society to be a management priority, and are
moving forward with various efforts toward these ends.
In addition, we ensure that each and every employee fully understands and implements the H-one Group Code of Conduct, establishedbased on this basic policy, and behaves in an ethical manner consistent with these standards.

[Reasons for Not Implementing Various Principles of the Corporate Governance Code]The following is based on the Corporate Governance Code after the June 2021 revisions of the corresponding principles.
<Principle 1.4> Cross-Shareholdings
We hold shares of other listed companies to stabilize and enhance transaction relationships and sales activities.
The Board of Directors assesses cross-shareholdings in various aspects, including business benefits of each holding and whether the
economic effects are appropriate for the capital cost.
We exercise our voting rights on cross-shareholdings after checking whether each resolution would contribute to our corporate value
over the medium to long term and to our joint interests with other shareholders in each cross-shareholding.

[Disclosure Based on Various Principles of the Corporate Governance Code]UpdatedThe following is based on the Corporate Governance Code after the June 2021 revisions of the corresponding principles.
<Principle 1.7> Related Party Transactions
When the Company engages in transactions with related parties, to ensure that such transactions do not harm the interests of theCompany or the common interests of its shareholders, it checks to ensure that such transactions are handled in the same way as
ordinary transactions with third parties. We also require reporting to and approval by the Board of Directors for competing transactions
involving Directors and transactions involving conflicts of interest between Directors and the Company. We survey all officers at theend of the business year to check for any transactions with related parties.
<Supplementary Principle 2.4.1> Ensuring diversity for promotions involving core human resources[Views on securing diversity and policies to develop internal environments]
We have identified securing and promoting the activities of diverse human resources as key management strategies for sustained
growth. As part of these efforts, we strive to secure diversity in management levels through active promotion of women.
In addition, we have adopted the following policy on internal environmental development to ensure diversity, based on the recognition
that ideas from diverse individuals will grow and improve organizational abilities: We will develop internal environments capable ofsupporting motivation and drive through means such as consciousness reforms among managers and supervisors, work-style reforms,
and support for balancing work with caring for children and other family members, so that diverse human resources, including women,
can thrive in comfortable workplaces.
We carry out a wide range of initiatives under this basic policy, including diversity and inclusion initiatives and enhancement ofsystems to support work-life balance.

- 1 -The specifics of these initiatives are disclosed on our website.
https://www.h1-co.jp/eng/sustainability/employee.html[Human resource development policies to secure diversity]
Against a backdrop that includes business globalization and dramatic changes in the business environment, we recognize humanresources in and of themselves to be a form of capital that generates value. Based on this understanding, we have adopted the basic
human resource development policy of creating and supporting systematic learning opportunities for diverse human resources,
including women, so that all individuals can develop their abilities and careers regardless of gender, age, national origin, or otherfactors, based on the respect for humanity woven into our Management Philosophy.
Under this basic policy, we proactively advance initiatives to secure diverse human resources and promote their activities throughmeans such as systems to support Japanese language learning by individuals from other countries, career design training for women
employees, and diversity management training for managers, as well as enhancing education and training programs for employee skills
development.
The specifics of these initiatives are disclosed on our website.
https://www.h1-co.jp/recruit/training.html (Japanese only)
https://www.h1-co.jp/eng/sustainability/employee.html[Voluntary and measurable goals and their status](i) Promoting women to managerial positions
For the five-year period from April 2024 through March 2029, our general employer action plan under the Act on the Promotionof Women’s Active Engagement in Professional Life sets a target whereby women represent at least 10% of all new hires eachyear. Women represented 23% of new hires joining the Company in April 2023, which exceeded this target.
In addition, in October 2021, we adopted a new target for 2030: to at least triple the number of women managers from the 2021
level (two persons). This is intended to enhance the career orientation of female human resources and accelerate their skills
development. As of the end of June 2024, the Company had four women managers.
(ii) Promoting foreign nationals and midcareer hires to managerial positions
At present, we have not formulated or disclosed targets for promoting foreign nationals and midcareer hires to managerial
positions, since we have not identified any particular discrepancies in promotion to managerial positions due to nationality or
time of hiring.
<Principle 2.6> Roles of Corporate Pension Funds as Asset Owners
The Company has established a defined-benefit corporate pension plan and established the Pension Asset Management Council toperform its functions as an asset owner in various ways, including issuing pension portfolio instructions and assessing assetmanagement results. Qualified human resources, such as the Managing Officer, Business Management Operations, the General
Manager, Corporate Planning Division, and the General Manager, Accounting Division, serve as members of this council. We
exchange information with the asset managers of corporate pension funds concerning their stewardship activities.
Although we do review the allocation of the pension portfolio, we entrust asset management and administration entirely to ourcontracted asset managers. Since voting rights on stock shares included in pension assets are exercised based on the policies of thecontracted asset managers, potential conflicts of interest are managed appropriately.
<Principle 3.1> Full Disclosure[Company objectives (e.g., business principles), business strategies, and business plans]
A. Business principles
Management Philosophy: To realize our dream we should conduct ourselves with respect and trust for each other whilechallenging one another to strive for continuous improvement that enables us to become a company that contributes to the world.
We have established business principles as a management philosophy that describes our aims and reason for existing. We strive to
put it into practice through sharing it among all officers and employees.
Our Management Philosophy is described on our website.
(Management Philosophy: https://www.h1-co.jp/eng/corporate/philosophy.html)
B.

Business strategies and business plans
The Group has formulated 2030 VISION as a long-term vision for the period through 2030, to serve as the strategic foundation
for achieving steady growth while adapting in a timely manner to any sudden changes. This vision serves as the Group’s
medium- to long-term management policy, together with our seventh medium-term business plan that took effect in FY2023(covering the period from April 2023 through March 2026).

 2030 VISION
2030 VISION: Be a Value Creator
Corporate slogan: Exceed expectations* 2030 VISION defines the Group’s core competences as Technology (Manufacturing technologies that embodies customer
needs) and Hospitality (Corporate culture that realizes customer needs together with customers).

- 2 - Seventh Medium-Term Business Plan (April 2023 – March 2026)[Management policy]
Achieve solid growth based on a value-creation mindset by restructuring the business foundation[Priority measures](i) Strengthen profitability(ii) Expand Business Segments(iii) Enhance competitiveness in Development / Production Technology(iv) Strengthen Sustainability(v) High Quality Stabilization(vi) Strengthen HR development
 Change 2027
[KPIs]We have set the following new management vision "Change 2027" on May 24, 2024. “Change2027” includes the final year of the 7th
mid-term period (ending March 2026). Under "Change 2027," we are planning the following management indicators for the next three
periods, including the final year of the 7th medium-term period (ending March 2026).
(i)

Operating Profit: Fiscal year ending March,2025 JPY11.0 billion, fiscal year ending March,2026 JPY13.5 billion, fiscal year
ending March,2027 JPY16.0 billion(ii) ROIC: Fiscal year ending March,2025－fiscal year ending March,2027 7% or more
The Group is moving forward toward the goals of 2030 VISION by strengthening its existing businesses and developing new products
based on ESG initiatives and by fostering a culture of value creation. We will promote among all employees the concept of “Think
Value,” based on the Group’s core competences and ESG to generate new value. This process will demonstrate our presence in the auto
industry and our essential role in society by contributing useful value to ensure that we serve as a Value Creator that exceeds
expectations.
[Basic views and guidelines on corporate governance]
Our basic sustainability policy calls for various activities, grounded in our Management Philosophy, in each of the environmental,social, and governance (ESG) aspects, thereby assuming our role as a company that contributes to the world.
Under this basic policy, we recognize enhancement in corporate governance to enable the Group’s sustained growth while rewarding
the expectations and trust placed in us by shareholders, customers, employees, and society to be a management priority. We are moving
forward with various sustained efforts toward these ends.
(Securing shareholder rights and equality)
We give sufficient consideration to effectively securing the rights of shareholders and maintaining environments for exercise of rights
as well as effective equality among shareholders.
(Appropriate joint efforts with stakeholders other than shareholders)
We strive to undertake suitable joint efforts with various stakeholders to enable sustained growth and to create corporate value over the
medium to long term.
(Appropriate disclosure and transparency)
We strive to achieve fair, timely, and equitable disclosure not just of information required under laws and regulations but also otherinformation considered useful for understanding the Company.
(Board responsibilities, etc.)
Our corporate governance structure is that of a company with an Audit & Supervisory Board. Following enhancement of the Operating
Officer system, we have delegated business execution to Operating Officers, with the Board of Directors tasked with timely decision
making and oversight of business execution.
(Shareholder dialogue)
Recognizing that dialogue with shareholders and investors contributes to corporate value over the medium to long term, the Company
proactively promotes IR activities.
[Policies and procedures in determining the remuneration of Directors and officers]
See “II.1. Director Remuneration: Details of Disclosure of Policies for Determining Remuneration Amounts and Calculation Methods”
in this Report.
[Policies and procedures in the appointment and dismissal of officers and the nomination of Director and Audit & Supervisory Board
Member candidates]
Candidates for officers and Director positions are chosen or nominated based on a comprehensive consideration of perspectives suchas possession of a wealth of experience, high expertise, and strong discernment and ethical outlook.

- 3 -Candidates for Audit & Supervisory Board Members are nominated through consideration of perspectives such as their financial,accounting, and legal insights and their knowledge of the Company’s businesses.
The Board of Directors decides on responses to members of officers judged inappropriate for positions of Company officers forvarious reasons, including violations of their professional duties or unethical actions.
[Explanations with respect to the individual appointment and dismissal of officers and nominations of Director and Audit &Supervisory Board Member candidates]
The reasons for nomination of all Directors are disclosed in the notice of convocation for the 18th Ordinary General Meeting of
Shareholders.
Reasons for nominating Audit & Supervisory Board Members are disclosed in the notices of convocation for the Ordinary General
Meetings of shareholders in which they were appointed (16th Ordinary General Meeting of Shareholders: Kazuo Yamashita, Hiroki
Murakami; 17th Ordinary General Meeting of Shareholders: Hiroyuki Kawai).
See our website for past notices of convocation of Ordinary General Meetings of shareholders.
https://www.h1-co.jp/eng/news/
Information on the dismissal of individual members of officers is not disclosed due to the absence of such dismissals.
<Supplementary Principle 3.1.3> Initiatives on sustainability, etc.
[Basic sustainability policy]
Our basic sustainability policy calls for various activities, grounded in our Management Philosophy, in each of the environmental,social, and governance (ESG) aspects, thereby assuming our role as a company that contributes to the world.
Specifically, we are accelerating activities in each area on a global basis while identifying enhancement of environmental, social, andgovernance (ESG) activities and related human resource development as fundamentals of the Group’s sustained growth.
In addition, the Seventh Medium-Term Business Plan (April 2023 – March 2026) identifies strengthening sustainability as a key
priority measure, and we are accelerating related efforts in ways linked to our business activities.
The specifics of these policies are disclosed on our website.
https://www.h1-co.jp/eng/sustainability/basic_policy.html[Priority (materiality) topics for sustainability]
We recognize the following sustainability topics as priorities for enhancing sustainability within the Group, reflecting consideration formatters such as business issues and relationships to stakeholders.
(i) Environment (E): Developing technologies and products to contribute to the environment; production activities reflecting
consideration for addressing climate change(ii) Society (S): Realizing diverse work styles; employment of diverse human resources(iii) Governance (G): Establishing business foundations to contribute to sustained growth[Sustainability initiatives]
The Company’s specialized committees and sections in charge deploy a wide range of ESG initiatives on a global basis in areas
including the environment, governance, legal affairs, risk management, IR, and human rights.
The specifics of these initiatives are disclosed on our website.
https://www.h1-co.jp/eng/sustainability/[Investments in human capital, intellectual property, etc.]
In addition to the sustainability priorities referred to above, the Group recognizes the needs to keep abreast of changes in the auto
industry, against the backdrop of stronger environmental regulations worldwide, and to work toward carbon neutrality as management
topics that it must address over the medium to long term.
We recognize that the economic value the Group can provide in regard to these topics emerges from activities that enhance existing
businesses, provide more multifaceted value, and create new businesses. For these reasons, the Group long has invested strategically inhuman capital and intellectual property.
The Board of Directors and other bodies oversee the allocation of management resources, including investments in human capital andintellectual property, and the implementation of strategies related to the business portfolio based thereon, with consideration forprogress on business plans and profit plans and related matters.
(i)

Investments in human capital
The Seventh Medium-Term Business Plan identifies strengthening human resource development as a key priority measure. In
addition to making progress on various measures, in Japan and worldwide, to develop human resources able to play active roles
on the global stage, we are also promoting efforts such as training for those in middle management positions to develop the next
generation of core management.
For more information, see “I.1. Disclosure Based on Various Principles of the Corporate Governance Code: Supplementary
Principle 2.4.1 Ensuring diversity for promotions involving core human resources” in this Report.

- 4 -(ii) Investments in intellectual property
The Seventh Medium-Term Business Plan identifies advancing research and creating technologies as a key priority measure. In
addition to R&D, materials research, and establishment of mass production technologies for our main line of automotive frameparts, we are also aggressively promoting development of technologies to contribute to solutions to environmental challenges,
including research on EV frames and development of mass production technologies for metal separators used in the powergenerating components of fuel-cell vehicles.
In addition, our R&D facilities in Japan are advancing development to meet customer needs in various markets from a global
perspective.
In non-automotive areas, we are striving to create new value by developing new technologies and products and proposing our
expertise in precision machining technologies and technologies to reduce vehicle weight to potential customers.
In the fiscal year ended March 2023, we invested a total of JPY1,848 million in R&D expenses while securing patents forinventions developed through our R&D efforts and promoting business activities based on R&D.
[Impact of climate change-related risks and earning opportunities on business activities and profits]
We consider reducing our environmental impact and realizing carbon neutrality to be essential to continuing our business into the
future in a social environment faced with the risks of sudden climate change. Based on this understanding, we are promoting efforts toaccelerate sustainability management, with the targets of reducing CO2 emissions by 46% vs. FY2013 by FY2030 and achievingcarbon neutrality by FY2050.
As part of these efforts, in March 2022 we analyzed the impact of climate-change risks and opportunities on our business activities inline with the framework recommended by the Task Force on Climate-related Financial Disclosure (TCFD), based on TCFD
recommendations.
The specifics of this analysis are disclosed on our website.
https://www.h1-co.jp/sustainability/environment/tcfd/ (Japanese only)<Supplementary Principle 4.1.1.> Clear specification of the scope of matters delegated from the Board of Directors to management
and the disclosure of a brief summary thereof
In addition to matters specified by laws, regulations, and the articles of incorporation, the Company Board of Directors deliberates andmakes decisions on important matters identified as subject to Board decisions in the Management Body Agenda Standards establishedby the Board of Directors. The Management Committee or the Management Assessment Council also deliberates and makes decisions
on matters that do not meet the specific criteria of these Standards.
In addition, the Board of Directors strives to enhance reporting on the state of business execution to monitor whether businessdelegated to management is appropriately executed.
The Company has enhanced the Operating Officer system, delegating business execution to Operating Officers to clarify roles andresponsibilities through the clear separation of oversight functions and business execution functions. To enhance the oversightprovided by the Board of Directors and to accelerate management decision-making, the Board of Directors currently consists of six
members, including three outside Directors.
<Principle 4.9> Independence Standards and Qualification for Independent Directors
The Company’s independence standards satisfy the requirements for independent officers established by the Tokyo Stock Exchange in
addition to the independence requirements of the Companies Act of Japan, to appoint independent outside Directors free of any risk of
conflicts of interest with general shareholders. The Company seeks to select independent outside Director candidates who willcontribute active advice and recommendations as well as monitoring from a fair and independent perspective regarding Company
management.
<Supplementary Principle 4.10.1> Concepts, authority, roles, etc. related to independence of optional committees
The Company has established the Nomination and Remuneration Committee as an optional committee to discuss matters such as thenomination, appointment, dismissal, and remuneration of officers (Directors, Senior Managing Officers, and other higher-rank
Operating Officers). The Committee is chaired by an independent outside director, and the majority of its members are independent
outside Directors.
For more information, see “II.1. Director: State of Establishment of Optional Committees and Attributes of Their
Membership and Chairpersons” and “Supplemental Explanation” in this Report.
<Supplementary Principle 4.11.1> View on the appropriate balance between knowledge, experience, and skills of the Board of
Directors as a whole, diversity, and appropriate board size
To enable timely and appropriate decision-making and to ensure effective management oversight, the Company, as an enterprise that
promotes global business activities in the auto parts industry, appoints to the Director candidates characterized by a wealth of internaland external experience, high expertise, and strong discernment and ethical outlook, up to the maximum number of Directors specified
in the articles of incorporation.
Our independent outside Directors are currently made up of one (male) attorney, one (male) Director with management experience atanother company, and one (female) Director with executive experience at an administrative agency. The Company believes that aboard consisting of outside Directors with diverse experience, knowledge, and values in addition to inside Directors highly- 5 -knowledgeable of Company business and industry trends is optimal for ensuring diversity and balance as regards the knowledge,
experience, and skills of the Board as a whole.
The knowledge, experience, and skills of each Director are disclosed in the notice of convocation for the 18th Ordinary General
Meeting of Shareholders and the financial report for the year ended March 2024.
(Notice of Convocation of Ordinary General Meeting of Shareholders: https://www.h1-co.jp/eng/news/; Financial Report:
https://www.h1-co.jp/ir/library/financial_report.html (Japanese only))<Supplementary Principle 4.11.2> Concurrent posts of Directors and Audit & Supervisory Board Members with other listed companies
The Company discloses the important concurrent posts of Directors and Audit & Supervisory Board Members in reference materials
for the Ordinary General Meeting of Shareholders. Each such concurrent post is judged to be within the scope whereby the individuals
can reasonably be expected to perform their roles and responsibilities as Directors and Audit & Supervisory Board Members.
<Supplementary Principle 4.11.3> Evaluation and analysis of the Board’s effectivenessSince the year ended March 2016, the Board’s effectiveness is evaluated each year. Directors and all Audit & Supervisory Board
Members conduct self-assessments using a questionnaire, the results are totaled and analyzed, and the results of evaluations of theBoard’s effectiveness and courses of action for corresponding improvements are reported to the Board of Directors.
Provided below is a summary of the results of evaluation of the Board’s effectiveness in the year ended March 2024:
An overall evaluation of the results of self-assessment by each Director and Audit & Supervisory Board Member shows that theCompany’s Board of Directors is evaluated and presents no problems regarding the effectiveness of the Board as a whole.
This evaluation of the Board’s effectiveness shows that progress has been made in areas such as the number of Directors, theirdiversity, deliberation methods, content of related documents, and appropriateness of time for prior study. Room for improvement was
identified in the areas of active exchange of opinion with inside and outside Directors and allocation of time for explanation anddeliberation in accordance with the importance of each agenda item. Accordingly, we will proceed with efforts to make the Board evenmore effective through continued discussion reflecting developments both inside and outside the Company.
<Supplementary Principle 4.14.2> Training of Directors and Audit & Supervisory Board Members
Newly appointed Directors and Audit & Supervisory Board Members are provided with opportunities to undergo outside training,
intended mainly to help them to understand their roles and responsibilities. In addition, once a year a specialized instructor is invited tolead a training program on corporate governance overall, for Directors and Audit & Supervisory Board Members.
In addition, Directors and Audit & Supervisory Board Members are encouraged to attend outside seminars to keep this knowledge up
to date. In each of these cases, the Company provides continuous support for the costs of training.
<Principle 5.1> Policy for Constructive Dialogue with Shareholders
Recognizing that dialogue with shareholders and investors contributes to corporate value over the medium- to long term, the Company
has adopted a policy of energetically promoting such dialogue.
(1) The Sustainability Promotion Division serves as the contact for responding to shareholders and investors, and related activities
are coordinated by the Director responsible for Business Management Operations.
(2) Efforts such as sharing information among related sections are made to ensure appropriate disclosure.
(3) Briefings are held on financial results for institutional investors and analysis, in principle twice a year, for the first half and thefull year.
(4) Comments and concerns expressed in dialogue with shareholders and investors are reported to the Board of Directors asnecessary.
(5) We closely monitor the management of insider information based on Insider Trading Control Regulations.

[Action to Implement Management that is Conscious of Cost of Capital and Stock Price]
As the PBR (price/book value ratio) of our company's stock continues to be below 1x, we recognize this as an important management
issue. At meetings of the Board of Directors, etc., we continually analyze and discuss improvements in cost of capital and return on
capital.
In the new management vision "Change 2027" announced on May 24, 2024, we reviewed the management indicators until the fiscal
year ending March 2027 and set the goal of regularly achieving ROIC of 7% or more. We will strive to achieve sustainable growth andimprove profitability by focusing on management with an awareness of return on invested capital.

- 6 -

2.

Capital Composition

Foreign shareholding ratioLess than 10%[Status of Major Shareholders]

Updated

Name

Number of shares

Percentage of shares

Honda Motor Co., Ltd.

6,055,890

21.33

The Master Trust Bank of Japan, Ltd. (Trust Account)

1,724,900

6.08

H-ONE Employees’ Stockholding

1,163,649

4.10

780,000

2.75

Saitama Resona Bank, Ltd.
INTERACTIVE BROKERS LLC

767,400

2.70

JFE Shoji Corporation

727,500

2.56

Toko Miyamoto

726,450

2.56

Custody Bank of Japan, Ltd. (Trust Account)636,700

2.24

Shoko Ujiie

589,650

2.08

Custody Bank of Japan, Ltd. (Trust Account 4)

573,600

2.02

Presence of controlling shareholders (parent
excluded)―――Presence of parent

None

Supplementary Explanation―――

3.

Company Attributes

Listed exchange and market classification

Tokyo Stock Exchange, Prime Market

Fiscal year end

March

Industry

Metal products

Number of employees at the end of the mostrecent business year (consolidated)

1,000 or more

Net sales at the end of the most recent businessyear (consolidated)¥100 billion or more but less than ¥1 trillion

Number of consolidated subsidiaries at the endof the most recent business year

10 or more but less than 50

4.

Guidelines on Measures to Protect Minority Interests in Transactions with Controlling
Shareholders

―――

5.

Other Special Circumstances with the Potential to Materially Impact Corporate Governance

―――

- 7 -

II.Status of Business Administration Organizations Pertaining to Management DecisionMaking, Execution, and Auditing, and Other Corporate Governance Structures
1.

Matters Pertaining to Organizational Structure and Operation

Organizational configuration

Company with Audit & Supervisory Board Members[Directors]
Maximum number of Directors according toarticles of incorporation

10

Term of Directors according to articles ofincorporation

1 yearChairperson of meetings of Board of Directors

President

Number of Directors

6Outside Director(s) appointed?

Yes

Number of outside Directors

3

Number of outside Directors designated as
independent officers

3

Relationship to the Company (1)Name

Relationship to Company*

AttributeaKeiichiro Maruyama

Attorney-at-law

Kunihiro Todokoro

Possesses background with another company

Sawako Yamamoto

Other

b

c

d

e

f

g

h

i

j

k






* Categories of relationships to the Company* A white circle indicates that the individual currently has or recently had such a relationship. A white triangle indicates thatthe individual had such a relationship in the past.
* A black circle indicates that a close relative of the individual currently has or recently had such a relationship. A black
triangle indicates that a close relative of the individual had such a relationship in the past.
a. Person involved in business execution of the listed company or subsidiary thereofb. Person involved in business execution or non-executive Director of a parent company of the listed company
c. Person involved in business execution of a sister company of the listed company
d. Party for which the listed company is an important trading partner or person involved in the business execution thereof
e. Important trading partner of the listed company or person involved in the business execution thereof
f. Consultant, accounting specialist, or legal specialist receiving monetary compensation or other assets in a large amount from thelisted company, other than executive compensation
g. Important shareholder of the listed company (or person involved in business execution of a corporation that is an important
shareholder of the listed company)
h. Person involved in business execution of a trading partner of the listed company other than those under d, e, and f (the individualin question only)
i. Person involved in business execution of an organization that exchanges outside Directors with the listed company (theindividual in question only)
j. Person involved in business execution of a recipient of donations from the listed company (the individual in question only)
k. Other- 8 -Relationship to the Company (2)NameUpdatedIndependent Supplemental explanation of applicableofficer
items

Deputy Managing Partner, NagawaOkamura Law Firm

Keiichiro MaruyamaWhile the Company has concluded anadvisory agreement with the NagawaOkamura Law Firm, the totalcompensation paid by the Company in theyear ended March 2024 was less than 1%of the law Firm’s net sales and less than
1% of the Company’s consolidated net
sales.

Reasons for appointment
Mr. Maruyama possesses a wealth of legal
experience and strong discernment as an
attorney at law. His experience anddiscernment contribute to Company
management.
His relationship to the Company is as
described under “Supplemental
explanation of applicable items.”
He has been named an independent
officer as he does not meet any of thedescriptions under III 5 (3) 2 of the Tokyo
Stock Exchange Guidelines forManagement of Listing, etc. and because
it has been determined that theappointment poses no risk of conflicts ofinterest between him and ordinary
shareholders.

Mr. Todokoro possesses a wealth ofexperience and strong discernment from acareer in management of a financial
institution and multiple operating
Former Representative Director and Vicecompanies. His experience andPresident, Saitama Resona Bank, Ltd.
discernment contribute to Company
management.
While the Company trades with FUJI
His relationship to the Company is as
WAREHOUSE & TRANSPORTATION described under “Supplemental
CO., LTD. in various activities, including explanation of applicable items.”
handling and storage of freight, theHe has been named an independent
amount of such transactions in the year
officer as he does not meet any of theended March 2024 was less than one
descriptions under III 5 (3) 2 of the Tokyo
million yen.
Stock Exchange Guidelines for
While the Company borrows funds from Management of Listing, etc. and because
Saitama Resona Bank, Ltd., more than 11 it has been determined that theyears have passed since Kunihiro
appointment poses no risk of conflicts of
Todokoro was involved in businessinterest between him and ordinary
execution of the Bank.
shareholders.
Director, Chairperson, FUJI
WAREHOUSE & TRANSPORTATION
CO., LTD.

Kunihiro Todokoro

Ms. Yamamoto possesses a wealth ofexperience and strong discernment from acareer in key positions with the Japan Fair
Trade Commission. Her experience anddiscernment contribute to Company
management.
Sawako YamamotoShe has been named an independent
officer as she does not meet any of thedescriptions under III 5 (3) 2 of the Tokyo
Stock Exchange Guidelines forManagement of Listing, etc. and because
it has been determined that theappointment poses no risk of conflicts ofinterest between her and ordinary
shareholders.

–

- 9 -

Optional committee established corresponding
to a nomination committee or a remunerationcommittee?

Yes

State of Establishment of Optional Committees and Attributes of Their Membership and Chairpersons

Name ofcommittee
Optional committee
corresponding to anominationcommittee
Optional committee
corresponding to a
remunerationcommittee

Total
Full-time
InsideOutsidemembership member(s) Director(s) Director(s)Nomination
andRemuneration
Committee
Nomination
andRemuneration
Committee

Supplemental Explanation

Outsideexpert(s)Other

Chairperson

5

0

2

3

0

0

OutsideDirector

5

0

2

3

0

0

OutsideDirector

UpdatedThe Company has established the Nomination and Remuneration Committee as optional committee to discuss matters such as thenomination, appointment, dismissal, and remuneration of Directors. Chaired by independent outside Director Kunihiro Todokoro, thisCommittee consists of two inside Directors (Seiki Mayumi and Masamichi Okuda) and three outside Directors (Keiichiro Maruyama,
Kunihiro Todokoro, and Sawako Yamamoto). It met three times during the year ended March 2024.
A majority of the membership of the Nomination and Remuneration Committee consists of independent outside Directors. This isintended to secure transparency and objectivity in the process of making decisions on matters such as the nomination, appointment,
dismissal, and remuneration of Directors, through the involvement of multiple outside Directors independent of the Board of Directors.
The involvement of these three independent outside Directors enables the Committee to perform its functions and roles independentlyof the Board of Directors through means such as provision of appropriate advice on matters such as the nomination, appointment,
dismissal, and remuneration of Directors from diverse points of view grounded in their legal, business administration, and public
administration experience as well as a gender perspective provided by the one female member.

[Audit & Supervisory Board Members]
Audit & Supervisory Board established?

Yes

Maximum number of Audit & Supervisory
Board Members according to articles ofincorporation

5

Number of Audit & Supervisory Board
Members3

Cooperation Among the Audit & Supervisory Board Members, Accounting Auditor, and Internal Audits
UpdatedSectionThe (five-person) Audit Operations, an independent business audit section under the direct supervision of the President, is in charge ofinternal audits.
The Audit & Supervisory Board, which conducts auditing, consists of three Audit & Supervisory Board Members including two
outside Audit & Supervisory Board Members.
Outside Audit & Supervisory Board Member Hiroyuki Kawai is a certified public accountant and a licensed tax accountant and isknowledgeable in finance and accounting.
Outside Audit & Supervisory Board Member Hiroki Murakami is a licensed attorney at law and possesses a wealth of experience andstrong discernment concerning legal affairs.
The Audit & Supervisory Board Members and the Audit Operations cooperate through means including periodic reporting meetings,
carry out internal audits yearlong on subjects such as internal controls under the Companies Act, internal controls related to financial
reporting, and the state of business execution by each division, and also conduct internal audits of subsidiaries and affiliates. In
addition, twice a year the Audit Operations reports to the Board of Directors and the Audit & Supervisory Board on the details ofinternal audits in each half, to enhance cooperation with Directors and Audit & Supervisory Board Members.

- 10 -

Audit & Supervisory Board Members receive reports and explanations on the results of review by the accounting auditor of quarterly
financial results pursuant to the Financial Instruments and Exchange Act at the end of each quarterly period and, at the end of the fiscal
year, on the results of auditing by the accounting auditor based on the Companies Act and the Financial Instruments and Exchange Act.
The Audit Operations regularly shares information with the accounting auditor on matters such as assessment of internal controls
related to financial reporting, seeking to cooperate with the accounting auditor in auditing of internal controls.
Other efforts to enhance cooperation among the Audit & Supervisory Board Members, the Audit Operations, and the accounting
auditor include exchange of information and meetings held as necessary.
Outside Audit & Supervisory Board Member(s)appointed?

Yes

Number of outside Audit & Supervisory Board
Members2

Number of outside Audit & Supervisory Board
Members designated as independent officers

2

Relationship to the Company (1)NameAttribute

Hiroyuki Kawai

Certified public accountant

Hiroki Murakami

Attorney-at-law

Relationship to Company*
a

b

c

d

e

f

g

h

i

j

k

* Categories of relationships to the Company* A white circle indicates that the individual currently has or recently had such a relationship. A white triangle indicates thatthe individual had such a relationship in the past.
* A black circle indicates that a close relative of the individual currently has or recently had such a relationship. A black
triangle indicates that a close relative of the individual had such a relationship in the past.
a. Person involved in business execution of the listed company or subsidiary thereofb. Non-executive Director or person involved in accounting at the listed company or subsidiary thereofc. Person involved in business execution or non-executive Director of a parent company of the listed company
d. Audit & Supervisory Board Member of a parent company of the listed company
e. Person involved in business execution of a sister company of the listed company
f. Party for which the listed company is an important trading partner or person involved in the business execution thereof
g. Important trading partner of the listed company or person involved in the business execution thereofh. Consultant, accounting specialist, or legal specialist receiving monetary compensation or other assets in a large amount from thelisted company, other than executive compensation
i. Important shareholder of the listed company (or person involved in business execution of a corporation that is an important
shareholder of the listed company)
j. Person involved in business execution of a trading partner of the listed company other than those under f, g, and h (the individualin question only)
k. Person involved in business execution of an organization that exchanges outside Directors with the listed company (theindividual in question only)
l. Person involved in business execution of a recipient of donations from the listed company (the individual in question only)
m. Other- 11 -

Relationship to the Company (2)Name

Independent Supplemental explanation of applicableofficer
items

Reasons for appointment
Mr. Kawai possesses a wealth ofexperience and strong discernment as a
specialist in finance and accounting. His
experience and discernment contribute to
the Company audit structure.

Hiroyuki Kawai

He has been named an independent
officer as he does not meet any of thedescriptions under III 5 (3) 2 of the Tokyo
Stock Exchange Guidelines forManagement of Listing, etc. and because
it has been determined that theappointment poses no risk of conflicts ofinterest between him and ordinary
shareholders.

―――Mr. Murakami possesses a wealth of legal
experience and strong discernment as an
attorney at law. His experience anddiscernment contribute to the Company
audit structure.
Hiroki MurakamiHe has been named an independent
officer as he does not meet any of thedescriptions under III 5 (3) 2 of the Tokyo
Stock Exchange Guidelines forManagement of Listing, etc. and because
it has been determined that theappointment poses no risk of conflicts ofinterest between him and ordinary
shareholders.

―――[Independent Officers]
Number of independent officers

5

Other Matters Concerning Independent Officers
The Company designates as independent officers all outside Directors who qualify as such.

[Incentives]
Status of implementation of measures related toincentives for Directors

Adoption of performance-linked remuneration plan and other measures

Supplemental Explanation of Applicable Items
The Company has adopted a performance-linked remuneration plan (monetary remuneration) and a medium-/long-term incentivebased remuneration (share-based remuneration) plan. See “II.1. Director Remuneration: Details of Disclosure of Policies for
Determining Remuneration Amounts and Calculation Methods” in this Report concerning the specifics of remuneration amounts andcalculation methods, including the performance-linked remuneration plan and the medium-/long-term incentive-based remunerationplan.

- 12 -

Persons eligible to receive stock options

Supplemental Explanation of Applicable Items―――[Director Remuneration]
Status of disclosure (of remuneration ofindividual Directors)

Individual remuneration is not disclosed.

Supplemental Explanation of Applicable Items

UpdatedIndividual remuneration is not disclosed because no officer is granted total consolidated remuneration of JPY100 million or more.
The amount of officer remuneration in the year ended March 2024 was JPY102 million.
Policies for determining remuneration
amounts and calculation methods

Yes

Details of Disclosure of Policies for Determining Remuneration Amounts and Calculation Methods(Methods for determining the specifics of remuneration for individual Directors, etc.)
Matters related to officer remuneration, including policies on deciding on the specifics of remuneration, etc. for individual Directors,
are subject to resolution by the Board of Directors following review by the Nomination and Remuneration Committee. In addition,changes in the policies for determining remuneration calculation methods are also subject to resolution by the Board of Directors
following review by the Nomination and Compensation Committee.
The Company’s remuneration structure for Directors and Audit & Supervisory Board Members, based on this policy, is outlined below.
Types of remuneration:(1) Base remuneration (monetary remuneration)(2) Performance-linked remuneration (monetary remuneration)

Payees:(1) Inside Directors, outside Directors, Audit & Supervisory Board Members(2) Inside Directors

Maximum amounts, etc.:

Directors: Up to JPY200 million/year
Audit & Supervisory Board Members: Up to JPY40 million/year

Remuneration details:

Specific allocation is calculated based on the officer remuneration rules and determined by the Nomination
and Remuneration Committee, not to exceed the upper limit determined at the Ordinary General Meetingof Shareholders. Cases handled differently than as described in the officer remuneration rules on an
extraordinary basis are discussed by the Nomination and Compensation Committee and decided on by the
Board of Directors.

Types of remuneration:(3) Medium-/long-term incentive-based remuneration (share-based remuneration)

Payees:

Inside Directors

Maximum amounts, etc.:

Directors: Up to JPY300 million (up to 350,400 shares)/three business years

Remuneration details:

Points are allocated to payees in accordance with officer remuneration rules. Following their resignation as
Directors, payees who satisfy the requirements of beneficiaries under the officer remuneration rules areissued shares of Company stock in accordance with the points allocated.

The system is designed so that the above three types of remuneration as a percentage of the annual remuneration for inside Directors
are specified for each position, with a higher percentage of performance-linked remuneration for those in higher positions.
(Reasons for the Board of Directors’ judgment that decisions regarding remuneration, etc. for the business year in question comply
with the above policy)
The Board of Directors has confirmed that the method applied to arrive at the decision and the details and amounts determined for
officer remuneration, etc. for the business year in question are consistent with the above policy and that the deliberations of theNomination and Remuneration Committee have been respected. In addition, We have confirmed that the reduction in officer- 13 -

remuneration for the period from July 2023 to June 2024, which was temporarily handled differently from the officer remuneration
rules, was discussed by the Nomination and Remuneration Committee and decided by the Board of Directors. Based on the above, theBoard of Directors has determined that the content of remuneration, etc. for the current fiscal year is in accordance with the policy.
The composition of the Nomination and Remuneration Committee is described under “d. Matters Concerning Delegation of Decisions
on Individual Remuneration, etc. for Directors,” below.
a.

Matters concerning performance-linked remuneration, etc.
(Methods of calculating the actual performance-linked remuneration, business performance indicators chosen as the basis of
calculation, etc.)
The Company’s performance-linked remuneration is calculated by multiplying the base amount of performance-linked
remuneration for each post by a business-performance coefficient.
Performance-linked remuneration (monetary remuneration) = base amount of performance-linked remuneration for the post inquestion  business-performance coefficient The base amount of performance-linked remuneration for the post in question is uniform for each post, based on the
remuneration tables in the officer remuneration rules.
 The business-performance coefficient is determined using the following four factors based on business performance and otherresults in the previous business year.
Business-performance coefficient = (i) Company performance coefficient +/− (ii) YoY adjustments +/− (iii) capital efficiency
adjustments +/− (iv) individual evaluation adjustments
Base indicators: (i) (ii) consolidated profit before tax, (iii) consolidated ROE
Evaluation perspectives: (i) profitability, (ii) growth, (iii) capital efficiency, (iv) fulfillment of job responsibilities
 The Company performance coefficient (i) is determined based on the extent to which a target figure (i.e., figure at which thecoefficient would have a value of 1.00) is achieved, using as this target the value of the full-year forecast of the amount ofconsolidated profit before tax announced externally at the start of the business year.
 YoY adjustments (ii) are used to adjust the coefficient in accordance with the increase or decrease in the amount ofconsolidated profit before tax compared to the previous period.
 Capital efficiency adjustments (iii) are used to adjust the coefficient in accordance with the level of consolidated return on
equity (ROE).
 Individual evaluation adjustments (iv) are used to adjust the coefficient based on the results of evaluation by the Nomination
and Remuneration Committee of the degree of achievement of the job responsibilities entrusted to each officer.
 If it is not possible to apply the above calculation method—for example, if no full-year forecast of consolidated profit before
tax was announced externally at the start of the business year—the actual performance-linked remuneration is determined by
the Board of Directors following discussions by the Nomination and Remuneration Committee.
(Reasons for selection of the performance indicators)
The Company believes that the choice of consolidated profit before tax, an indicator of profitability, as an evaluation indicator for
performance-linked remuneration and adjusting this figure based on the increase or decrease in the amount of consolidated profit
before tax compared to the previous period and on consolidated ROE serves as an effective incentive for management from theperspectives of growth and capital efficiency.
We also believe that use of evaluations of the performance of each individual officer as an adjustment parameter for performancelinked remuneration makes it possible to reflect the performance of each officer in his or her remuneration.

b.

Specifics of non-monetary remuneration
We have adopted share-based remuneration through a board benefit trust (BBT) program as medium-/long-term incentive-based
remuneration. Under this system of share-based remuneration, Company stock and other benefits are awarded through a trust inaccordance with officer share-based benefits rules established by the Board of Directors. In principle, payees receive their shares
upon their resignation.

c.

Matters related to decisions by the general meeting of shareholders on remuneration, etc. for Directors and Audit & Supervisory
Board Members
The dates and specifics of resolutions by the general meeting of shareholders on remuneration, etc. for Directors and Audit &Supervisory Board Members, and numbers of individuals affected at the time, are shown below:[Directors]
Type of remuneration: monetary remuneration
Date of resolution of general meeting of shareholders: June 26, 1991
Specifics of resolutions: up to JPY200 million/year, excluding portions paid as employee remuneration
Number of individuals affected upon resolution: nine Directors
Type of remuneration: share-based remuneration
Date of resolution of general meeting of shareholders: June 23, 2021

- 14 -

Specifics of resolution: trust contributions of up to JPY300 million (including JPY100 million for Directors) for the three-year
period from the business year ended March 2017 through that ended March 2019 and each three-year period starting after thisperiod (this three-year period and each three-year period starting after this period is hereinafter, referred to as the “period inquestion”)
The maximum number of shares of Company stock that may be acquired by the trust using these funds is 350,400 shares. Basedon the Company’s officer share-based benefits rules, the total number of points allocated to Directors and others in a single
business year is 116,800 points (including 38,900 points for Directors).
Number of individuals affected upon resolution: four Directors (excluding outside Directors)[Audit & Supervisory Board Members]
Type of remuneration: monetary remuneration
Date of resolution of general meeting of shareholders: June 26, 1991
Specifics of resolution: up to JPY40 million/year
Number of individuals affected upon resolution: one Audit & Supervisory Board Memberd.

Matters related to delegation of decisions on remuneration, etc. for individual Directors
The Board of Directors delegates decisions on remuneration, etc. for individual Directors to the Nomination and Remuneration
Committee.
This delegation is intended to ensure the transparency and objectivity of the remuneration decision-making process through the
involvement of multiple outside Directors independent of the Board of Directors.
To ensure that the Nomination and Remuneration Committee can exercise this authority appropriately, the Company has
established remuneration standards in officer remuneration rules and the Nomination and Remuneration Committee rules. In
addition, the Board of Directors decides, in consultation with the Nomination and Remuneration Committee, on handling thatdeparts from that in officer remuneration rules on an extraordinary basis.
The membership of the Nomination and Compensation Committee consists of Representative Director, President & CEO Seiki
Mayumi, Director and Managing Officer Masamichi Okuda, and outside Directors Keiichiro Maruyama, Kunihiro Todokoro, andSawako Yamamoto.

[Support Structure for Outside Directors (Outside Audit & Supervisory Board Members)]
Outside Directors and outside Audit & Supervisory Board Members are provided documents related to Board of Directors meetingsand prior briefings.
The Audit Operations also supports the duties of Audit & Supervisory Board Members as necessary.

[Status of Representative Directors and Presidents, Etc. Who Have Resigned]
Names of Advisors, Councilors, and Others Who Are Former Representative Directors and Presidents,
Etc.

Name
―――

Post, position―――

DutiesForm and conditions ofDate of resignation
employment (e.g., full-/part-time,
as president, etc.
paid/unpaid)―――

Total number of advisors, councilors, and others
who are former Representative Directors andPresidents, etc.

Term in office

―――

None

Other Matters
While the Company has established a system of corporate advisors, no such individuals are currently appointed.
Company rules prescribe that a former President & CEO may serve as a corporate advisor for no longer than one year.

- 15 -

2.

Matters Related to Functions Such as Business Execution, Audits and Supervision, Nomination,
Remuneration Decisions, Etc. (Overview of the Current Corporate Governance System)
UpdatedThe Company’s corporate governance structure is that of a company with an Audit & Supervisory Board. Following enhancement of
the Operating Officer system, the Company delegated business execution to Operating Officers as part of efforts to enhance Board of
Director functions for timely decision-making and oversight of business execution.
The Board of Directors consists of six Directors (Seiki Mayumi, Hiroyuki Watanabe, Masamichi Okuda and Outside Directors
Keiichiro Maruyama, Kunihiro Todokoro, and Sawako Yamamoto). It deliberates and makes decisions on important topics andstatutory items concerning business administration. The chairman of the Board is Representative Director, President & CEO Seiki
Mayumi. The Board met 12 times during the year ended March 2024.
The Management Committee consists mainly of the Representative Director and each officers of Business Management Operations,
Development Business Operations, Japan Business Operations, North America Business Operations, China Business Operations, AsianBusiness Operations. (Its members are Representative Director, President & CEO Seiki Mayumi, Director and Managing Officer
Hiroyuki Watanabe and Masamichi Okuda, Managing Officers Hiroshi Yada and Yosuke Suwa, Senior Operating Officers Yoshiaki
Iwata, Tatsuya Kawaguchi, Hajime Sawaki, Masayuki Tanabe, Hiroshi Inawashiro, Yoji Saito, and Taiji Miyamoto. Full-time Audit &Supervisory Board Member Kazuo Yamashita, and Operating Officer Minoru Fujii.) This Committee reviews important matters related
to business execution in advance and submits them to the Board of Directors or makes related decisions within the scope of its
authority, among other tasks intended to contribute to more efficient and timely decision-making by the Board of Directors. Director
and Managing Officer Masamichi Okuda chairs the Management Committee, which met 19 times during the year ended March 2024.
The Audit & Supervisory Board consists of three members (Kazuo Yamashita, and Outside Audit & Supervisory Board Members
Hiroyuki Kawai and Hiroki Murakami). In addition to requesting reports as appropriate regarding the progress and results of businessaudits and audits of internal controls conducted by the Audit Operations, an independent section of the Company, the Audit &Supervisory Board attends meetings of the Board of Director and other important meetings and inspects the status of business andfinances as part of the process of neutral and objective audits of the performance of duties of Directors and decision-making by the
Board of Directors. It met 15 times during the year ended March 2024.
The Audit Operations, which serves as the business audit section, has five staff members who carry out internal audits of the status ofbusiness execution by each division and audits of the status of the maintenance and operation of internal controls, based on audit plans
and in accordance with established procedures. It also conducts internal audits of subsidiaries and affiliates. In addition, twice a year,
the Audit Operations reports to the Board of Directors and to the Audit & Supervisory Board on the specifics of internal audits in eachhalf-year period.
The Company has chosen Ernst & Young ShinNihon LLC as its accounting auditor for accounting audits under the Financial
Instruments and Exchange Act and the Companies Act. These audits are conducted systematically throughout the year for important
domestic business sites and overseas consolidated subsidiaries. The accounting auditor ensures that the same managing partners will
not be involved in accounting audits of the Company for longer than a specified period of time.
The Company has established the Nomination and Remuneration Committee as an optional committee to discuss matters such as
nomination, appointment, dismissal, and remuneration for officers (Directors, Senior Managing Officers, and other higher-rank
Operating Officers). Chaired by independent outside Director Kunihiro Todokoro, this Committee consists of two inside Directors(Seiki Mayumi and Masamichi Okuda) and three outside Directors (Keiichiro Maruyama, Kunihiro Todokoro, and Sawako
Yamamoto). It met three times during the year ended March 2024.

3.

Reasons for Selecting the Current Corporate Governance System

Recognizing improving corporate governance as one of the most important matters concerning management, the Company has
established the business execution, oversight, and audit functions described under 2 above.
It also strives to enhance the functions of the Board of Directors by adding three outside Directors who possess advanced, broadranging perspectives, independence, and strong discernment.
In consideration of the Company’s size, its lines of business, and other factors, we have adopted the current corporate governancesystem as we believe it provides an adequate range of management oversight functions.

- 16 -

III. Status of Implementing Measures Related to Shareholders and Other Stakeholders
1.

Status of Efforts to Stimulate the General Meeting of Shareholders and Facilitate Exercise of
Voting Rights

UpdatedSupplementary explanation
Early issuance of notices of convocation of general Notices of convocation are posted on the Company website before being sent
meetings of shareholders
to shareholders.
Avoidance of the busiest periods for general
meetings of shareholders

We strive to avoid scheduling our general meetings of shareholders during thebusiest periods, with consideration for administrative schedules.

Exercise of voting rights using electromagnetic
methods

We have made it possible for shareholders to exercise voting rights via theInternet since the Ordinary General Meeting of Shareholders held in 2019.

Participation in platform for electronic exercise of
We have participated in a platform for electronic exercise of voting rights
voting rights and other initiatives aimed at
operated by ICJ, Inc. since the Ordinary General Meeting of Shareholders
improving the environment for exercise of voting
held in 2019.
rights by institutional investors

Provision of notices of convocation (summaries)
in the English language

The notice of convocation of the general meeting of shareholders andreference documents, etc. are prepared in English and posted on the
Company's website and TDnet. The timing of disclosure will be posted
promptly after the Japanese version of the notice of convocation of thegeneral meeting of shareholders is disclosed.

Other

Matters are explained in the general meetings of shareholders using easily
understandable slide presentations.

2.

Status of Activities Related to IR

UpdatedSupplementary explanation

Explanation byrepresentatives
themselves

Preparation and publication of a disclosure policy We post our disclosure policy on our website.

Holding regular briefings for analysts andinstitutional investors

We hold financial results briefings twice a year: at the endof the year and the end of the first half.
The most recent financial results briefings are summarizedYbelow:
May 27, 2024: financial results briefing for the full year(presenter: President & CEO Seiki Mayumi and others)

Posting of IR materials on website

IR materials posted on website: Materials from financial
results briefings, financial reports/quarterly reports,summaries of financial results/quarterly summaries offinancial results, English translations of summaries offinancial results, shareholder bulletins, news releases, etc.
IR URL: https://www.h1-co.jp/eng/ir/

Establishment of section (posting of personnel)
related to IR

IR Section: Sustainability Promotion Division- 17 -

3.

Status of Initiatives Pertaining to Due Regard for the Positions of Stakeholders
Supplementary explanation

Provisions on due regard for the positions ofstakeholders in internal rules, etc.

We have established the H-one Group Code of Conduct as standards for the
behavior for all members of the organization with regard to appropriate
cooperation with stakeholders, respect for their interests, and sound businessethics.
We strive to raise awareness of this Code of Conduct, divisional codes ofconduct, and important laws and regulations by distributing handbooks andholding study meetings.
Our basic policy on sustainability and details of specific initiatives aredisclosed on our website.
https://www.h1-co.jp/eng/sustainability/
Our positions on diversity and details of diversity initiatives are disclosed on
our website.
https://www.h1-co.jp/eng/sustainability/employee.html

Implementation of environmental protection
activities, CSR activities, etc.

We analyze the risks and opportunities posed by climate change in accordancewith the framework recommended by the TCFD and disclose details ofanalysis on our website.
https://www.h1-co.jp/sustainability/environment/tcfd/ (Japanese only)
We strive continually to improve our environmental management system andits environmental performance in line with our environmental policy. We also
have earned ISO 14001 certification.
As part of our social contribution activities, we have set up H-one Forests atfive sites in Japan, where employees engage in forest conservation activities,
including tree thinning and pruning.

Formulation of a policy on providing information Our policy on providing information is described under Disclosure Based on
to stakeholders
Various Principles of the Corporate Governance Code above (Principle 5.1).

IV. Matters Concerning the Internal Control System, Etc.
1.

Basic Thinking on the Internal Control System and State of its Maintenance

Updated<Systems for ensuring appropriate business operations>
1.

Framework for ensuring that the performance of the duties of Directors and employees complies with laws, regulations, and thearticles of incorporation(1) The Company has established a Code of Conduct to ensure compliance, and each production, engineering, and head-officedivision formulates its own divisional code of conduct in line with the actual state of its duties. We strive to ensure legal andregulatory compliance in accordance with these codes and periodically verify the state of their implementation.
(2) Contact points and rules are established for receipt of whistleblowing reports and proposals from employees and business
partners regarding business ethics, compliance, and other matters, and appropriate measures are taken.
(3) The Compliance Committee, chaired by the Chief Compliance Officer, continually implements various complianceinitiatives(4) The Human Resources and General Affairs Division develops and maintains internal systems to exclude ties to antisocial
forces and cooperates with external specialized agencies, including law enforcement.
(5) To ensure the reliability of financial reporting, we maintain and operate internal controls on financial reporting inaccordance with the Financial Instruments and Exchange Act and other applicable laws and regulations.

2.

Framework to preserve and manage information about Directors’ performance of duties(1) Documents such as minutes of Board of Directors meetings, minutes of Management Committee meetings, and applications
for approval are retained for the periods stipulated in laws, regulations, and internal rules by Sustainability Promotion
Division and Corporate Planning Division.
(2) Directors and Audit & Supervisory Board Members may view retained documents at any time.
(3) Rules are maintained concerning protection of personal information and management of trade secrets, and such informationis retained and managed properly.

- 18 -

3.

Rules regarding loss risk controls and other frameworks(1) Each division identifies, analyzes, and takes measures to address and prevent various risks involved in its business
operations, as well as verifies the state of their implementation periodically.
(2) We have established crisis management rules under which we respond promptly and appropriately to emergencies.

4.

Framework to secure efficient execution of Directors’ duties(1) For the Business Management Operations, Development Business Operations, and Japan Business Operations, the chief
operating officer and deputy chief operating officer are senior operating officer level or above. Decision-making is
accelerated through such delegation of decision-making authority.
(2) Chiefly it is Operating Officers who are assigned responsibility for domestic and overseas production facilities. Overseas
production facilities are grouped into three business operations. Operating Officers of the rank of Senior Managing Officer
or higher are assigned as heads of the three business operations. The global business execution system is strengthened anddecision-making in overseas business activities is accelerated through such delegation of decision-making authority.
(3) To promote systematic and effective business operations, we formulate medium-term business plans and annual businessplans and assess and manage the performance of the entire Company and individual divisions based on these, through theBoard of Directors, the Management Committee, and interviews with top management.
(4) Company decision-making is documented in the Board of Directors rules, the Board Agenda Standards, and theManagement Body Agenda Standards and implemented in accordance with priorities.

5.

Framework to secure the propriety of operations of the corporate group consisting of the Company and its parent companies andsubsidiaries(1) Compliance Officer promotes the operation and strengthening of corporate governance at the Company and its subsidiaries.
(2) Related divisions manage subsidiaries based on the affiliate management rules and other related rules.
(3) Regional management committees are established to assess and manage matters such as the state of execution of duties andbusiness conditions at subsidiaries.
(4) Business execution by the Company and subsidiaries complies with the internal rules of each company. These internal rules
are revised from time to time.
(5) The Company Audit Operations conducts business audits of the Company and its subsidiaries and engages in otheractivities including verification and advising.

6.

Items concerning employees Audit & Supervisory Board Members request to appoint to assist in their duties and items
concerning the independence of such employees from Directors and the efficacy of instructions issued to them
The Audit Operations, which conducts business audits, assists in the duties of Audit & Supervisory Board Members as necessary.
In addition, the independence of the Audit Operations is ensured by respecting the views of Audit & Supervisory Board Memberswith regard to personnel matters, transfers, and discipline in the Audit Operations.

7.

Framework for reporting by Directors and employees to Audit & Supervisory Board Members, other framework for reporting to
Audit & Supervisory Board Members, and framework for ensuring that persons who submit reports to Audit & Supervisory
Board Members will not be treated at a disadvantageous for reason of having made such report(1) Group Directors and employees make timely reports to the Audit & Supervisory Board Members, through appropriate
methods, regarding any matters that could have major impacts on Group management or business performance, serious
violations of laws, regulations, or the articles of incorporation, or similar matters of which they have become aware.
(2) The Group does not treat persons who made reports to the Audit & Supervisory Board Members at a disadvantageous forreason of having made such reports.

8.

Items concerning processing of advance payment or reimbursement of expenses or payment of expenses or debts incurred inconnection with the execution of duties of Audit & Supervisory Board Members
When the Company receives a request for advance payment or reimbursement of expenses or payment of expenses or debts
incurred in connection with the execution of duties of Audit & Supervisory Board Members, it promptly pays the expenses ordebts, unless the fact that they did not arise from the performance of the duties of Audit & Supervisory Board Members can beproven.

9.

Other frameworks to ensure effective auditing by Audit & Supervisory Board Members(1) Audit & Supervisory Board Members engage in regular exchange of opinions with the Representative Director and other
Directors.
(2) Audit & Supervisory Board Members attend meetings of the Board of Directors and the Management Committee as well asother important meetings.
(3) Audit & Supervisory Board Members engage in regular cooperation and exchange of opinions with the accounting auditor.

- 19 -

2.

Basic Outlook on Eliminating Association with Anti-social Forces and the Status of Related
MeasuresUpdatedThe Company has established the H-one Group Code of Conduct, based on the Management Philosophy, to be implemented by all
employees. All those working at the Company conduct business in accordance with this code.
The Code of Conduct calls for elimination of ties to antisocial forces as a basic policy, and we carry out efforts to eliminate ties withsuch forces in accordance with this basic policy.
Our structure for elimination of ties to antisocial forces includes the rules on responding to antisocial forces and the guidelines forinvestigation of exclusion of antisocial forces. The Human Resources and General Affairs Division carries out related activities as thesection responsible. We also conclude separate memoranda of understanding specifying that any regular business partners with whom
we conclude basic transaction agreements may be subject to cancellation of transactions if they are found to qualify as antisocial
forces.
As part of efforts in cooperation with external related agencies, we are a member of the Saitama Corporate Antisocial Forces
Prevention/Defense Council and we strive to collect information on antisocial forces.
We also appoint and assign persons responsible for preventing improper demands at the head office and major business sites (General
Affairs Department Managers at the Koriyama Plant, the Maebashi Plant, and the Kameyama Plant), to prevent damage caused byantisocial forces and enhance ties to local law enforcement bureaus and the Center for Drug Abuse and Violence Prevention.

V.

Other

1.

Takeover Defense Measures

Takeover defense measures

None

Supplementary Explanation of Applicable Matters―――

2.

Other Matters Related to the Corporate Governance Structure, Etc.

(Internal systems related to timely disclosure)
As for the materiality of information and whether information should be subject to timely disclosure, the responsible person fordisclosure (Managing Officer, Business Management Operations) and the Sustainability Promotion Division consider information
based on timely disclosure rules and other applicable laws and regulations, submit issues to the Board of Directors for disclosure
decision or reporting, and report to, consult with, and obtain approval from the Representative Director, President & CEO as for thefact such incidents have occurred before promptly disclosing it through the information disclosure section (Sustainability Promotion
Division) after the end of the relevant board meeting.
We post disclosure information to TDnet and our website, to ensure fair, accurate, and timely disclosure.
Even information not subject to disclosure obligations is announced through procedures similar to those above if we judge that suchinformation may affect investment decisions by investors.

- 20 -

 Schematic Diagram of the Corporate Governance System
General meeting of shareholders
Appointment/dismissal
Board of Directors

Auditing

Appointment/dismissal

Appointment/dismissal

Audit & Supervisory
Board

Accounting auditor
Cooperation

Reporting
Cooperation
Auditing
Management Committee
Governance area of the H-one
sustainability system
Accounting
auditing

Compliance Committee
Risk Management Committee
Business
auditing

Information Security Committee
J-SOX Committee

Business Management Operations, Development Business Operations, Japan Business Operations,North America Business Operations, China Business Operations, Asian Business Operations
Note: Dotted lines above indicate lines of activities in the governance area included in the Company’s sustainability
system.

 Schematic Diagram of the Timely Disclosure System
Each internal division

Subsidiary/affiliate

Reporting

Reporting
Officer in charge
Reporting
Sustainability Promotion
Division

Responsible person fordisclosure

Submitting agenda items,
reportingFact of incident
Consultation

Board of Directors

Representative
Director

Responsible person for disclosure

Disclosure- 21 -

Responsible personfor disclosure