Last updated: June 21, 2021
UNITED, Inc.
Tomonori Hayakawa
Representative Director and President
Contact: 03-6821-0008
Securities code: 2497
https://united.jp/
The corporate governance status of UNITED, Inc. (“UNITED” or the “Company”) is as follows.

I. Basic Views on Corporate Governance, Capital Structure, Company Attributes and Other Basic
Information
1. Basic views
To adapt to rapid changes in the business environment and achieve continuous growth, the UNITED Group considers
strengthening its internal systems, including thorough corporate governance, as one of its most important management issues.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code]
The Company is fully compliant with all basic principles of the Corporate Governance Code.

2. Capital structure
Foreign shareholding ratio

Updated

10% or higher, but less than 20%[Major shareholders] Updated
Number of shares
owned (shares)

Name

Percentage(%)

D.A.Consortium Inc.

10,217,775

46.76

Tomonori Hayakawa

975,254

4.46

Takeuchi

400,000

1.83

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)

277,124

1.26

MSIP CLIENT SECURITIES

259,576

1.18

Ryuhei Tanaka

185,000

0.84

THE BANK OF NEW YORK 134497

136,400

0.62

UBS AG LONDON A/C IPB SEGREGATED CLIENT ACCOUNT

132,792

0.60

Michiko Ito

118,000

0.54

Ueda Yagi Tanshi Co., Ltd.

92,1000.42

Controlling shareholder(excluding parent company)―――

Parent company

D.A.Consortium Inc. (unlisted)

Supplementary explanation―――

3. Company attributes
Exchange listing and market classification

Tokyo Stock Exchange Mothers

Fiscal year end

MarchType of business

Service

Number of employees (consolidated) as ofthe end of the previous fiscal year

More than 100 and less than 500

Net sales (consolidated) in the previous
fiscal year

More than ¥10 billion and less than ¥100 billion

Number of consolidated subsidiaries as ofthe end of the previous fiscal year

More than 10 and less than 50

4. Guidelines on measures to protect minority shareholders when conducting transactions with acontrolling shareholder Updated
D.A.Consortium Inc., a major shareholder of the Company, holds 46.76% of the voting rights of the Company. D.A.Consortium
Inc. and its parent company, D.A.Consortium Holdings, Inc. (“DACHD”), and its parent company, Hakuhodo DY Holdings Inc.,
are the controlling shareholders of the Company.
The Company purchases advertising space from D.A.Consortium, Inc. and determines the appropriateness of the terms andconditions of transactions with D.A.Consortium, Inc. through careful consideration of comparisons with the terms and conditionsof transactions with other companies. In addition, the Company reports the status of transactions with D.A.Consortium, Inc. to
the Board of Directors and regularly monitors the appropriateness of such transactions.

5. Other special circumstances that may have a significant impact on corporate governance Updated
The Company has entered into a capital and business alliance agreement with D.A.Consortium Inc. to realize synergies in thebusinesses of both companies and increase the corporate value of both companies.
(1) Business alliance
The two parties will form a business alliance in mobile advertising, especially in smartphone advertising. The Company’s
independence shall be respected in the implementation of this alliance.
(2) Personnel-related ties
D.A.Consortium Inc. may nominate a certain number of candidates for the Company’s directors.
(3) Prior consent
The Company shall obtain prior approval from D.A.Consortium Inc. for some important decision-making matters.
The Company establishes a system to make independent management decisions and conduct business activities while
maintaining a cooperative relationship with D.A.Consortium Inc. by appointing one independent outside director. As of the dateof submission of this report, two non-executive directors out of the Company’s five directors were appointed from
D.A.Consortium Inc.

II. Business Management Organization and Other Corporate Governance Systems Related toManagement Decision-Making, Execution of Business, and Oversight
1. Institutional structure and operation, etc.
Organizational framework

Company with statutory auditors[Directors]
Maximum number of directors under the
Articles of Incorporation

15

Term of office of directors under the
Articles of Incorporation

2 years

Chairman of the Board of Directors

President

Number of directors

5

Appointment of outside directors

Yes

Number of outside directors

1

Number of outside directors designated as
independent directors

1

Outside director’s relationship with the company (1)Name

Affiliation

Relationship with the company (*)
aTadatsugu Ishimoto

b

c

d

e

f

g

h

i

j

k

Tax accountant*Denotations under “Relationship with the Company”*Persons applicable to each item “at present or recently” are marked with “○” while those applicable to each item“in the past” are marked with “△.”*Persons with a close relative applicable to each item “at present or recently” are marked with “ ●” while thosewith a close relative applicable to each item “in the past” are marked with “▲.”a. Executive of the Company or its subsidiaries
b. Non-executive director or executive of the Company’s parent 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 Company or an executive thereof
f. Consultant, accounting professional, or legal professional who receives a large amount of monetary consideration orother property from the Company besides remuneration as a director/statutory auditor
g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (this item
applies only to the person him/herself)
i. Executive of an entity with which the Company mutually appoints an outside director/statutory auditor (this item applies
only to the person him/herself)
j. Executive of an entity to which the Company makes donations (this item applies only to the person him/herself)
k. Others

Outside director’s relationship with the Company (2)Name

Independent
officer

Tadatsugu
Ishimoto

Supplementary
explanation
related toapplicable items○―

Voluntary establishment of committee(s)corresponding to Nominating Committee orRemuneration Committee

Reasons for appointment

The Company appointed Mr. Tadatsugu Ishimoto, expecting
him to contribute to ensuring sound management andestablishing a highly transparent and fair management
system by leveraging his expert insight on finance as a tax
accountant and his broad experience in corporate
management. Since he is not a director of the parent
company or a fellow subsidiary, does not come from a major
customer or supplier, nor is a major shareholder, he has
been designated as an independent director by resolution of
the Board of Directors based on the judgment that he canperform his duties from a neutral standpoint.

No[Statutory auditors]
Establishment of an Audit and Supervisory
Board

Yes

Maximum number of statutory auditors underthe Articles of Incorporation

4

Number of statutory auditors

3

Collaboration among statutory auditors, accounting auditors, and Internal Audit Division
In accordance with the Company’s “Audit Plan for Statutory Auditors,” the statutory auditors attend meetings of the Board of
Directors and the Audit and Supervisory Board, which are held once a month in principle and on an ad hoc basis as necessary.
In addition, they attend meetings with an audit corporation, which are held once a quarter in principle and on an ad hoc basis
as necessary, and meetings for exchanging opinions with the outside director, which are held twice a year. In addition, thestatutory auditors receive internal audit reports from the Internal Audit Office to strengthen information gathering capabilities
as well as to monitor and verify the status of the internal control system.
The Internal Audit Office inspects, evaluates, and provides advice as to whether the corporate organization, systems, andoperations of the Company and its affiliates comply with management policies and regulations and are managed efficiently.
The Internal Audit Office exchanges information with the full-time statutory auditor at regular monthly meetings to improve theeffectiveness and efficiency of audits. In addition, it reports the results of the annual internal audit to the Audit and Supervisory
Board. Furthermore, the Internal Audit Office exchanges information with accounting auditors as needed and works together
with accounting auditors to improve the efficiency and quality of accounting activities.

Appointment of outside statutory auditors

Yes

Number of outside statutory auditors

2

Number of outside statutory auditors designatedas independent officers

2Outside statutory auditors’ relationship with the Company (1)Name

Affiliation

Relationship with the company (*)
a b c d e f g h iTakeshi Omura
Nozomi Kogoma(family register name: Nozomi Imaoka)

j k

l m

Attorney
Certified public
accountant*Denotations under “Relationship with the Company”*Persons applicable to each item “at present or recently” are marked with “ ○” while those applicable to each item“in the past” are marked with “△.”*Persons with a close relative applicable to each item “at present or recently” are marked with “ ●” while those witha close relative applicable to each item “in the past” are marked with “▲.”a. Executive of the Company or its subsidiaries
b. Non-executive director or accounting advisor of the Company or its subsidiaries
c. Non-executive director or executive of the Company’s parent company
d. Statutory auditor of the Company’s parent company
e. Executive of a fellow subsidiary company of the Company
f. A party whose major client or supplier is the Company or an executive thereof
g. Major client or supplier of the Company or an executive thereofh. Consultant, accounting professional, or legal professional who receives a large amount of monetary consideration orother property from the Company besides remuneration as a director/statutory auditor
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
j. Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h) (this item
applies only to the person him/herself)
k. Executive of an entity with which the Company mutually appoints an outside director/statutory auditor (this item applies
only to the person him/herself)l. Executive of an entity to which the Company makes donations (this item applies only to the person him/herself)
m. Others

Outside statutory auditors’ relationship with the Company (2)Name

Takeshi Omura

Nozomi Kogoma(Family register
name:Nozomi Imaoka)

Independent
officer○○

Supplementary
explanation
related toapplicable
items

―

―

Reasons for appointment

The Company appointed Mr. Takeshi Omura, expecting him
to contribute to ensuring the soundness of management
and establishing a highly transparent and fair management
system through his expert knowledge of corporate legal
affairs as an attorney and broad experience in corporate
management. Since he does not come from the parent
company, fellow subsidiary, or a major client or supplier,nor is a major shareholder, he has been designated as anindependent statutory auditor by resolution of the Board of
Directors based on the judgment that he can perform his
duties from a neutral standpoint.
The Company determined that Ms. Nozomi Kogoma would
be able to appropriately perform her duties as an outside
statutory auditor, as she is a certified public accountant withexpertise in financial matters. She has been designated as
an independent statutory auditor by resolution of the Boardof Directors, based on the judgment that she can perform
her duties from a neutral standpoint, given that she does
not come from the parent company, fellow subsidiary, or amajor client or supplier, nor is a major shareholder.

[Independent directors/statutory auditors (“independent officers”)]
Number of independent officers

3

Other matters related to independent officers
All outside directors/statutory auditors who fulfill the qualifications for independent officers have been designated as
independent officers.

[Incentives]
Implementation of measures to provide incentives
to directors

Introduction of performance-linked compensation
system and stock option system

Supplementary explanation
Please refer to “Disclosure of Policy for Determining Amount and Calculation Method of Compensation.”

Eligibility of stock options

Internal directors, employees, directors ofsubsidiaries, employees of subsidiaries

Supplementary explanation
The Company grants stock options to its directors and employees as well as directors and employees of subsidiaries as anincentive to increase the Group’s corporate value.

[Directors’ compensation]
Disclosure (of individual director compensation)

No individual disclosure

Supplementary explanation of applicable items―
Policy on determining the compensation amountand its calculation method
UpdatedEstablished

Disclosure of policy on determining the compensation amount and its calculation method(1) Matters concerning the resolution of the General Meeting of Shareholders regarding director compensation
The amount of monetary compensation (basic compensation and bonuses) for the Company’s directors was resolved at theExtraordinary General Meeting of Shareholders held on December 6, 2012, to be no more than 500 million yen per year(including no more than 50 million yen per year for outside directors). As of the close of the said Extraordinary General
Meeting of Shareholders, the number of directors was seven (including five outside directors). In addition, at the 20th
Ordinary General Meeting of Shareholders held on June 23, 2017, it was resolved that the annual amount of stock options
shall be no more than 200 million yen (excluding non-executive directors). The number of directors (excluding non-executive
directors) as of the close of the said Ordinary General Meeting of Shareholders was five. Further, within the framework of
the monetary compensation, a resolution was passed at the 22nd Ordinary General Meeting of Shareholders held on June21, 2019 that the annual amount allotted for restricted stock linked to business performance shall be no more than 150
million yen, and the annual amount allotted for restricted stock linked to service shall be no more than 50 million yen (in bothcases, excluding outside directors). The number of directors (excluding outside directors) as of the close of the said Ordinary
General Meeting of Shareholders was seven.

(2) Policy for determining the compensation, etc. of individual directors(i) Method of deciding on the policy for determining the compensation, etc. of individual directors
The policy was resolved at the Board of Directors’ meeting held on February 25, 2021.
(ii) Overview of the policy for determining the compensation, etc. of individual directors
a. Basic policy
The Company’s basic policy is to link the compensation of directors to shareholder profits so that it will fully function as anincentive to sustainably enhance corporate value, and to determine the compensation of individual directors at an appropriate
level based on their respective responsibilities.
Specifically, compensation for executive directors consist of basic compensation (monetary compensation), performancelinked compensation, etc. (bonuses), and non-monetary compensation (stock-based compensation), while non-executive
directors and outside directors, who are responsible for supervisory functions, shall be paid only basic compensation inconsideration of their duties.
b. Policy for determining the individual amount of compensation as basic compensation (monetary remuneration) (including
the policy for determining the timing or conditions for granting compensation)
The basic compensation for the Company’s directors shall be a fixed monthly compensation in cash, the amount of whichshall be determined by comprehensively taking into consideration the role and contribution of each director as well as theCompany’s business performance and other factors.
c. Policy for determining the method for calculating the content, amount, or number of performance-linked compensation,
non-monetary compensation, etc. (including the policy for determining the timing or conditions for granting compensation)
Performance-linked compensation shall be monetary compensation based on the operating income for each fiscal year to
motivate the directors to improve the business performance and stock price of the Company. Furthermore, an amountproportionate to the degree of contribution shall be paid as a bonus only when the operating income of the division
corresponding to the role of the executive director exceeds the target, and a special contribution that has a significant positive
impact on the Company’s business performance is recognized. Bonuses shall be paid at a specified time each year. The
reason for selecting operating income as the performance indicator is that operating income is a generally accepted measureof performance and profitability.
Non-monetary compensation shall be stock-based compensation in the form of a combination of “restricted stock linked tobusiness performance” and “restricted stock linked to service,” and is intended to motivate the directors to improve thebusiness performance and stock price of the Company. The number of shares shall be determined within the upper limit
determined at the General Meeting of Shareholders based on the role and contribution of each director, the Company’sbusiness performance, and the share price trend, and shall be granted as appropriate in light of those factors.
d. Policy for determining the ratio of the amounts of monetary compensation, performance-linked compensation, or nonmonetary compensation within the amount of individual compensation of directors
The Company does not stipulate in advance the ratio of basic compensation, performance-linked compensation, and stockbased compensation to be paid to individual directors. The Company’s policy is to achieve the most appropriate ratio of
payment that would encourage the directors to share the interests of the management and shareholders and contribute to
the sustainable enhancement of corporate value. To this end, while the Company’s principal form of compensation is basic
compensation, the amount of performance-linked compensation and non-monetary compensation is determined inaccordance with the method set forth in “c.” described above.

[Support system for outside director (outside statutory auditor)]
As a member of the Board of Directors, an outside director supervises the execution of duties by the executive directors. In
addition to attending meetings of the Board of Directors held once a month in principle and other extraordinary meetings asnecessary, an outside director attends meetings held twice a year to exchange opinions with the Audit and Supervisory
Board.
An outside statutory auditor attends meetings of the Board of Directors and the Audit and Supervisory Board, which are held
once a month in principle and on an ad-hoc basis as necessary, as well as meetings with the audit corporation, which areheld once a quarter in principle and as necessary, and meetings for exchanging opinions with the Representative Director
and the outside director, which are held twice a year. In addition, as a member of the Audit and Supervisory Board, an outside
statutory auditor receives internal audit reports from the Internal Audit Office.
To contribute to fruitful discussions at meetings of the Board of Directors, reference documents for agenda items are
distributed to outside directors and outside statutory auditors prior to meetings, and the secretariat provides explanations on
their content as necessary.

2. Matters related to functions such as business execution, audit and oversight, nomination, andcompensation decisions (overview of the current corporate governance system) Updated(1) Current governance structure(i) Board of Directors
As of the date this report was submitted, the Board of Directors consisted of five directors (including one outside director).
With the attendance of statutory auditors, the Board of Directors decides important management matters such as
management policies, as well as matters stipulated by laws and regulations or the Articles of Incorporation, and supervises
the execution of businesses. In addition, the Board of Directors holds regular meetings once a month, at which the director
in charge reports on the status of business execution, and extraordinary meetings are held as necessary. The Representative
Director is the Chairman of the Board of Directors and oversees the Board of Directors. In addition, he executes the Boardof Directors' resolutions and supervises the Company’s overall operations.
(ii) Audit and Supervisory Board
As of the date this report was submitted, the Audit and Supervisory Board consisted of three statutory auditors (including
two outside statutory auditors) and is chaired by a full-time statutory auditor. In addition to the regular monthly meetings of
the Audit and Supervisory Board, extraordinary meetings of the Audit and Supervisory Board are held as necessary. At themeetings of the Audit and Supervisory Board, the statutory auditors deliberate on the appropriateness, efficiency, andfairness of management, and exchange opinions on audit results. The statutory auditors attend meetings of the Board of
Directors and other important meetings to audit the execution of duties by the directors. They also cooperate with the Internal
Audit Office to audit the execution of duties as appropriate.
(iii) Executive officers
The Company adopts an executive officer system. As of the date this report was submitted, the Company had four executive
officers. Each executive officer is delegated the authority to execute businesses based on the policies established by the
Board of Directors and under the supervision of the Board of Directors, and is tasked to improve management efficiency.
(iv) Accounting auditors
The Company has entered into an audit contract with Avantia GP, an auditing firm, and receives audits under the Financial
Instruments and Exchange Act and the Companies Act. In addition, it discusses and deliberates on important accounting
issues with the auditing firm as needed.
(2) Details of the liability limitation agreement
Pursuant to the provisions of the Articles of Incorporation, the Company has entered into a liability limitation agreement, as
provided for in Article 427, Paragraph 1 of the Companies Act, with directors who are not executive directors, etc., statutory
auditors, and accounting auditors.
Under the agreement with directors who are not executive directors, etc., the liability for damages under Article 423,
Paragraph 1 of the Companies Act shall be limited to the higher of 3 million yen or the sum of Article 425, Paragraph 1, Item
1 (c) and Item 2 of the Companies Act, provided that the liability is incurred in good faith and without gross negligence.
Under the agreement with statutory auditors, the liability for damages under Article 423, Paragraph 1 of the Companies Act
shall be limited to the higher of 3 million yen or the sum of Article 425, Paragraph 1, Item 1 (c) and Item 2 of the Companies
Act, provided that the liability is incurred in good faith and without gross negligence. Also, under the agreement with Avantia
GP, the accounting auditor’s liability for damages shall be limited to the higher of 5 million yen or the minimum amountstipulated in Article 425, Paragraph 1 of the Companies Act, provided that the liability was incurred in good faith and withoutgross negligence.

3. Reasons for choosing the current corporate governance system
The Company has chosen the corporate governance framework of a Company with Statutory Auditors, determining that theauditing system by statutory auditors, including outside statutory auditors, is effective in auditing the status of businessexecution. In addition, the Company has appointed one outside director and two outside statutory auditors to ensure soundmanagement and establish a highly transparent and fair management system. The outside director and outside statutory
auditors appointed by the Company have expert knowledge and broad experience in management. The Company expects
the outside director to advise and supervise the management of the Company, and the outside statutory auditors to audit
the decision-making and business execution of directors, from an independent standpoint.

III. Implementation of Measures concerning Shareholders and Other Stakeholders
1. Initiatives to vitalize general meetings of shareholders and facilitate the exercise of voting rights
UpdatedSupplementary explanation
Avoidance of peak days
when scheduling thegeneral meeting ofshareholders

The 24th Ordinary General Meeting of Shareholders was held at 10:00 a.m. on
June 18, 2021.

Exercise of voting rights
by electromagnetic
methodVoting rights can be exercised via the Internet.

Other

The notice of convocation (including the business report) was posted on the
Company’s website on May 27, 2021. It was also posted on each listed stock
exchange through disclosure on TDNet.

2. IR activities

Supplementary explanation
Preparation andpublication of disclosure
policies

The Basic Disclosure Policy was established on May 1, 2006
(revised on December 30, 2012) and is posted on the
Company’s website (https://united.jp/ir/policy/).

Regular briefings foranalysts and institutional
investors

Financial results briefings are held four times a year after theannouncement of quarterly financial results.

Posting of IR materials on
the Company’s website

IR materials, such as press releases, financial statements,
financial results briefing materials, and annual securities
reports, are posted on the Company’s website(https://united.jp/ir/).

Establishment of adepartment and/or
manager in charge of IR

The Company has established the Corporate Planning Group
within the Corporate Administration Division (Corporate BU) to
carry out IR-related operations.

Presentationby therepresentative
directorYes

3. Efforts to respect the position of stakeholders
Supplementary explanation

Provisions for respecting theposition of stakeholders underinternal rules, etc.

Implementation ofenvironmental conservation
activities, CSR activities, etc.

Formulation of policies related
to providing information to
stakeholders

The Basic Disclosure Policy, revised on December 30, 2012, stipulates that “inorder to gain a just evaluation and obtain the trust of all stakeholders and toensure the transparency of corporate management, we will actively disclose
the Group’s corporate information and conduct investor relations (IR) andshareholder relations (SR) activities with a basic stance of “speed,”“accuracy,” and “fairness,”” to respect the position of stakeholders.
The Compliance Charter, revised on September 24, 2015, stipulates that “wewill strive to reduce the environmental impact of our business activities,
contribute to the conservation of the natural environment, and help build aprosperous society.” This is established as a universal Code of Conduct of all
officers and employees of the Group.
In addition, the Company cooperates with green bird activities in the
Harajuku/Omotesando area and participates in a project to think about the
local environment.
The Basic Disclosure Policy, revised on December 30, 2012, stipulates thestandards and methods of information disclosure, and specifies the following
as methods of responding to inquiries: make timely disclosures following thesystem for disclosure of corporate information under the Financial Instruments
and Exchange Act and the timely disclosure rules established by the stock
exchange; and, when deemed necessary, voluntarily disclose informationeven if it does not fall under the scope of the timely disclosure rules.

IV. Matters Concerning the Internal Control System, etc.
1. Basic views on internal control system and status of its development
The following is a summary of the basic policy for developing the Company’s internal control system and the status of its
development.
Basic policy for developing the Group’s internal control system(1) Establish a system to improve the efficiency, effectiveness, and profitability of business activities.
(2) Establish a system to ensure appropriateness and accuracy in the preparation of financial statements.
(3) Establish a system for proper corporate governance by complying with various related laws and regulations and social
norms related to business activities.
(4) Establish a system by which the acquisition, use, and disposal of company assets are carried out following legitimate
procedures, and company assets are well preserved.
(5) Fulfill corporate social responsibility and enhance the Company’s corporate value by developing and operating aneffective internal control system for all subsidiaries and for other important companies in the Group.
Status of the Group’s internal control system(1) System to ensure the execution of duties by directors and employees complies with laws and regulations and the Articles
of Incorporation
The Company has established the Compliance Charter as a universal code of conduct that all officers and employees of theGroup should observe and practice in their corporate activities.
In addition, the Company has established an Internal Audit Office—which regularly monitors internal operations andinvestigates compliance with laws, regulations, the Articles of Incorporation, and internal regulations in the execution ofbusiness—in order to establish, develop, and maintain a compliance system. The Internal Audit Office notifies the respective
departments of the investigation results, requests improvements, and reports to the representative director/president andthe Audit and Supervisory Board as appropriate.
(2) System for the storage and management of information related to the execution of duties by directors
The Company appropriately stores and manages the minutes of the General Meeting of Shareholders, as well as information
related to the execution of duties by directors including the minutes of the Board of Directors meetings, based on laws andregulations and internal rules, and maintains a management system to promptly respond to requests for inspection bydirectors and statutory auditors.
In addition, the Company stores and manages forms, documents, and data related to personal information, such as member
registration information acquired through its businesses, in accordance with the Personal Information Protection
Management System established by the Company.
(3) Rules and other systems for managing the risk of loss(i) In executing operations, the Company strives to reduce risks by clearly defining procedures for business execution invarious internal regulations.
(ii) The division responsible for overseeing the Group’s risk is the Corporate Administration Division.
(iii) Each company in the Group constantly identifies the risks associated with the business it is engaged in, examines
whether or not risk countermeasures are necessary, implements countermeasures to reduce risks, and reports the statusof evaluation, verification, and improvement of the implemented risk countermeasures to the Corporate Administration
Division.
(4) System for ensuring that the execution of duties by directors is carried out efficiently
As a basis for the efficient execution of duties by directors, the Company holds regular meetings of the Board of Directors
once a month and extraordinary meetings of the Board of Directors as necessary to ensure a system for prompt management
decision-making. Also, to improve management efficiency, the Company has introduced an executive officer system, in which
each executive officer executes business operations based on the authority delegated to them under the policies determinedby resolution of the Board of Directors and under the supervision of the Board of Directors. Furthermore, based on the
management policy of the Board of Directors, the Company has established a Board of Full-time Directors, which is a meeting
body for considering and discussing important management matters, as well as for making decisions regarding important
operations; and meetings are held in a timely manner.
(5) System for ensuring the appropriateness of operations of the corporate group consisting of the Company, its parent
company, and its subsidiaries
The Company has established a compliance system, risk management system, and internal control system for the Group
as a whole to ensure sound corporate governance of the entire Group, including subsidiaries.

In addition, directors of subsidiaries are dispatched from the Company and reports on the subsidiaries’ operations and theexecution of duties by subsidiary directors are shared at the Company’s Board of Directors meetings and other important
meetings.
(6) System related to employees in the case they are requested by the statutory auditors to assist them in their duties;
system related to the independence of such employees from directors; and matters related to ensuring the effectiveness ofstatutory auditors’ instructions to such employees
If statutory auditors request the assignment of employees to assist them in their duties, the Company shall assign staff asnecessary after consultation with the statutory auditors. Transfers and evaluations of such staff are determined with the priorconsent of the full-time statutory auditor in order to ensure their independence from directors.
In principle, such staff members are assigned full-time and do not receive instructions or orders from directors or other
employees.
(7) System for directors and employees to report to statutory auditors; system for persons who receive reports from directors
or employees of the Company’s subsidiaries to report to statutory auditors; system for ensuring that persons who make suchreports are not treated unfairly by reason of such reports; and other systems for ensuring that audits by statutory auditors
are conducted effectively
Directors regularly report on the status of execution of their duties and other matters at meetings of the Board of Directors
and other important meetings attended by statutory auditors. Directors and employees of the Company and subsidiaries
promptly report to the statutory auditors when they become aware of the occurrence or potential occurrence of importantmatters that may affect the Company’s operations or business performance. In addition, statutory auditors may request thedirectors or employees of the Company and subsidiaries to report on the aforementioned matters and other mattersconcerning the status of business execution. The Company prohibits any person who makes such a report from receiving
disadvantageous treatment based on such report. Also, the statutory auditors cooperate with the accounting auditor or the
hotline contact person by exchanging necessary information and opinions as appropriate in order to enhance auditing.
(8) Matters related to the policy concerning the procedures for prepayment or reimbursement of expenses incurred in theexecution of duties by statutory auditors and other expenses or liabilities
If statutory auditors request payment of expenses incurred in the execution of their duties, the Company promptly pays such
expenses, unless it is clearly recognized that such expenses are not necessary for the execution of their duties.
(9) System for ensuring the reliability and appropriateness of financial reporting
The Company has established an internal control system to ensure the reliability of financial reporting and the effective andappropriate submission of internal control reports, as stipulated in the Financial Instruments and Exchange Act. In addition,
the Company continuously evaluates that the system functions properly and makes necessary corrections to ensurecompliance with the Financial Instruments and Exchange Act and other related laws and regulations.

2. Basic views on eliminating antisocial forces and its status of development
The Company’s basic policy is to have no business or other relationships whatsoever with antisocial forces or groups thatthreaten social order and safety, and to take a resolute stance across the organization in dealing with any unreasonable
demands from antisocial forces.
The Company places importance on the fairness and soundness of business activities as one of its management policies,and respects the “Guidelines for Enterprises to Prevent Damage Caused by Antisocial Forces” (June 19, 2007 Agreement
at a Meeting of Cabinet Ministers Responsible for Anti-Crime Measures). In addition, the Company stipulates as follows in
the Compliance Charter revised on September 24, 2015: “We will take a resolute stance against antisocial forces, groups,
and individuals that interfere with social order and sound corporate business activities, and will not engage in transactions
with them, acting as a good corporate citizen with social conscience.” The Company will make these guidelines andprovisions the universal Code of Conduct for all officers and employees of the Group and will establish and operate a system
to eliminate antisocial forces according to the Code of Conduct.
The Corporate Administration Division is in charge of operations related to antisocial forces. The Company has establishedthe Guidelines for Responding to Unreasonable Demands from Antisocial Forces as a practical manual to prepare forunreasonable demands from antisocial forces. In addition, the Company has established the Guidelines for Conducting
Credit Checks to Eliminate Antisocial Forces and conducts credit checks of business partners. Furthermore, the Company
has established clauses to exclude antisocial forces in contracts with business partners in order to ensure thoroughimplementation. In the process of investment, the Company screens the management team and existing shareholders of theinvestee, and if any violation of laws and regulations or presence of antisocial forces are found, the investment will not be
made. The Company uses information provided by the administrator of the shareholders’ register to determine the attributesof shareholders and check whether they are antisocial forces.

V. Other
1. Adoption of anti-takeover measures
Adoption of anti-takeover measures

Not adopted

Supplementary explanation―――

2. Other matters related to corporate governance system(1) Future issues to be examined
The Company recognizes that one of its most important management tasks is to enhance its corporate governance andinternal control systems to contribute to society as a company and to fulfill its accountability to all stakeholders. Under the
direction of the representative director, we plan to constantly review the Group’s internal management system to further
strengthen the management system, enhance compliance awareness, and reinforce the risk management system.
(2) Outline of timely disclosure system(i) Basic policy
The Company discloses information promptly according to the disclosure system for corporate information under the
Financial Instruments and Exchange Act and the timely disclosure rules established by the stock exchanges (the Company’s
Basic Disclosure Policy).
(ii) System development
The general manager of the Corporate Administration Division is in charge of the timely disclosures. The Accounting
Department, led by the information handling manager and the person in charge of disclosure, is responsible for conducting
operations in cooperation with the Corporate Planning Group and the Legal Group as appropriate.
In addition to collecting information on the latest trends as a routine, the information handling manager and the person in
charge of disclosure work to improve their knowledge and practical skills regarding timely disclosure by actively participatingin training sessions.
(iii) Timely disclosure proceduresa. Information collection and analysis of collected information and decisions
The Corporate Administration Division serves as the Company’s risk management division, and the information handlingmanager and the person in charge of disclosure collect information promptly and comprehensively through reports from theGroup companies.
As for the timely disclosure of information regarding decisions, the information handling manager and the person in chargeof disclosure confirm the necessity of timely disclosure of information related to decisions made by the Board of Directors.
b. Publication
When disclosing information that falls under the timely disclosure rules, the Company explains the content of the information
to the stock exchanges in advance and discloses the information on the stock exchanges’ TDnet and then discloses theinformation on its corporate website, as per the said rules.
(iv) Monitoring
In auditing operations related to the timely disclosure system, the Company audits whether the above-mentioned procedures
and operations of timely disclosure are properly implemented and operated according to various regulations.

Corporate governance and internal control system

General Meeting of Shareholders

Appoint/Dismiss

Appoint/Dismiss

Appoint/Dismiss
Cooperate

Audit and Supervisory
Board

Accounting Auditor

Audit bystatutory auditors

Accounting audit
Internal control audit
Cooperate

Cooperate

Board of Directors

ReportInstruct/Supervise

Representative Director/
President

InstructInternal
Audit
OfficeReportReportAdvise/Cooperate

Instruct/Supervise

Executive Officers

ReportBusiness Units/
Subsidiaries

Instruct/Supervise
Internal audit

Legal
Advisor