Corporate Governance Structure

Board of Directors

The Board of Directors is positioned as the highest decision-making body for business operations. The Board of Directors meets monthly to decide on management policies, matters stipulated by law, and other important matters, as well as to supervise the execution of duties by the directors. As of the date of submission, the Board of Directors consists of nine members: President and Representative Director Toshiya Takeuchi as chairman, five directors Akio Takeuchi, Hiroshi Yokoyama, Clay Eubanks, and Minoru Kusama, and four outside directors Michio Iwabuchi, Yuko Miyata, Eiko Ori, and Kunitake Ando.

The Board of Directors appoints executive directors and executive officers responsible for business operations, and, when necessary, has executive officers attend Board meetings to ensure that management decisions are reliably communicated and business operations are carried out promptly.

The Board of Directors formulates medium-term management plans and annual plans, and each business division develops its own business plan based on these. In addition, executive directors are required to report on the progress of the annual plans on a regular basis.

Audit & Supervisory Committee

The Audit and Supervisory Committee consists of four outside directors and one inside director, one of whom is a full-time Audit and Supervisory Committee member. The Audit and Supervisory Committee meets once a month in principle. The Audit and Supervisory Committee members also attend important meetings such as the Board of Directors meetings to audit the execution of duties by directors and the operation of the internal control system. As of the date of submission, the Audit and Supervisory Committee consists of five members: Director Minoru Kusama, who is a full-time Audit and Supervisory Committee member, as the chairman, and four outside directors: Michio Iwabuchi, Yuko Miyata, Eiko Ori, and Kunitake Ando.

Nomination Advisory Committee & Compensation Advisory Committee

The Nominating Advisory Committee and the Compensation Advisory Committee, which are voluntary advisory bodies to the Board of Directors, deliberate on matters such as the appointment, dismissal, and compensation of directors as referred to them by the Board of Directors, and submit their recommendations to the Board of Directors. The Board of Directors deliberates and makes decisions based on these recommendations. As of the date of submission, the Nominating Advisory Committee and the Compensation Advisory Committee are chaired by outside director Michio Iwabuchi and consist of three outside directors, Yuko Miyata, Hideko Eiko Ori, and Kunitake Ando, as well as President and CEO Toshiya Takeuchi and director Minoru Kusama for a total of six members.

Sustainability Promotion Committee

The Sustainability Promotion Committee is chaired by the President and Representative Director and consists of members deemed appropriate based on their respective responsibilities, including directors and executive officers of the company, as well as chief operating officers of subsidiaries.

Main Matters Discussed by the Board of Directors

In addition to matters specified by law, the matters to be deliberated and reported to by the Board of Directors in fiscal year 2025 are as follows:

Business Strategy

Business execution report based on long-term business strategy, long-term management personnel development policy, medium-term management plan, and annual business plan.

Governance

Internal audit reports, organizational changes, revisions to internal regulations, risk management, and evaluations of the effectiveness of the Board of Directors

Sustainability-Related Matters

Environmental regulations, investment in human capital, occupational safety and health.

Engagement-Related Matters

Details of engagement with shareholders and investors, and initiatives to achieve management that takes into account the cost of capital and share price

Independence Criteria

Based on the Independence Criteria established by the Tokyo Stock Exchange, the Company has established the following criteria for assessing the independence of outside directors. Outside directors (including candidates for such positions) are deemed to have sufficient independence if they are determined not to fall under any of the following categories.

<Criteria for determining the independence of outside directors>

(i) Persons who are currently or have been directors (excluding outside directors), auditors (excluding outside auditors), executive officers, or other employees of the Company or its subsidiaries in any of the past 10 years.

(b) Persons who currently or within the past three years fall under any of the following categories (1) to (10).

(1) Any person whose main business partner is our company (*1) or an executive officer thereof

(2) Our major business partners (*2) or their executive officers

(3) Our major borrowers (*3) or their executive officers

(4) Consultants, accounting professionals, or legal professionals who receive a large sum of money (*4) or other assets from our company in addition to executive compensation.

(5) Persons who were employed by the auditing firm that serves as our company's accounting auditor.

(6) Executive officers of our lead underwriter

(7) Our major shareholders (*5) or their executive officers

(8) Executive officers of companies in which our company is a major shareholder (*5)

(9) Persons who receive large donations, etc. (*6) from our company or their executive officers

(10) Executive officers of companies with whom we have a mutual dispatch agreement

H. The spouse or relative within the second degree of kinship of a person who, currently or within the past year, falls under either (1) or (2) below.

(1) Directors (excluding outside directors), auditors (excluding outside auditors), executive officers, or other employees of the Company and its subsidiaries

(2) If any of the persons falling under 2(1) to (10) above is an important person (*7)

*1: A company that has our company as its main business partner refers to a company whose transaction amount with our company exceeds 2% of its sales in any of the past three fiscal years.

*2: Our major business partners refer to those with whom our transactions in any of the past three fiscal years have exceeded 2% of our sales revenue.

*3: Our major borrowers refer to those from whom, in any of the past three fiscal years, the amount borrowed by our company exceeded 2% of our total assets.

*4: A large sum of money refers to an amount exceeding 10 million yen in any of the past three fiscal years.

*5: A major shareholder is a shareholder who owns 10% or more of the voting rights.

*6: Large donations, etc., refer to amounts exceeding 10 million yen in any of the past three fiscal years.

*7: Important persons refer to executive directors, executive officers, executive directors, and employees in senior management positions at the department head level or higher.

Analysis and Evaluation Results of the Effectiveness of the Board of Directors as a Whole

The Audit & Supervisory Committee determines the content of questionnaires regarding the composition and operation of the Board of Directors, agenda items, the framework supporting the Board, and the status of improvements based on the previous evaluation. All directors then conduct self-evaluations through the questionnaires, and the Board of Directors performs an annual analysis and evaluation based on the aggregated results.

Summary of the analysis and evaluation results

• Implementation period: January 2026 to April 2026
• Summary of Evaluation Results: We assessed that the overall effectiveness of the Board of Directors is generally ensured.
• Issues from the previous fiscal year and actions taken

1. Discussion of management strategy from a long-term perspective
   We have begun discussions about the goals we aim to achieve in 10 years.
2. Further strengthening of the board of directors' oversight function
   We regularly monitor the progress towards achieving our medium-term management plan, which is set to run until February 2028, through the Board of Directors.

• Key issues for the current fiscal year

1. Discussion of management strategy from a long-term perspective
   Discussions have begun regarding the goals we aim to achieve in 10 years, but it is necessary to secure time for these discussions and to accelerate their progress. To address this, we will proceed with the establishment of a management committee.
2. Strengthening internal controls and risk management systems
   We will further enhance our internal controls and risk management systems across the entire group, including our subsidiaries.