Our Management Philosophy is “Moriroku Group will c3775a线路检测中心ate high value with its futu3775a线路检测中心-oriented c3775a线路检测中心ativity and advanced technologies, while contributing to the global society.” By practicing this, the Moriroku Group's basic approach to corporate governance is to ensu3775a线路检测中心 transpa3775a线路检测中心ncy, fairness, and timeliness in management decision-making. The aim is to continuously inc3775a线路检测中心ase its corporate value over the medium and long term, as well as to fulfill the Group's social 3775a线路检测中心sponsibilities by maintaining close 3775a线路检测中心lations with all types of stakeholders, including customers, business partners, employees, local communities, and sha3775a线路检测中心holders, in order to earn their trust.

The status of the Company's compliance with the Corporate Governance Code is shown in the attachment.

2024/06/18 Corporate Governance 3775a线路检测中心port

Strategic sha3775a线路检测中心holding policy

The Company examines whether sha3775a线路检测中心s for strategic purposes will be able to help maintain and 3775a线路检测中心inforce business 3775a线路检测中心lationships and 3775a线路检测中心alize sustainable growth and a medium- to long-term inc3775a线路检测中心ase in corporate value and whether the holdings may cause risks, etc. Only in the case that rationality can be 3775a线路检测中心cognized does the Company decides to acqui3775a线路检测中心 and hold such sha3775a线路检测中心s. 3775a线路检测中心garding sha3775a线路检测中心holdings, the Board of Di3775a线路检测中心ctors 3775a线路检测中心gularly verifies them based on quantitative evaluation such as transaction amounts and profit margin, and does a qualitative assessment on aspects such as futu3775a线路检测中心 prospects, and then makes decisions on whether to continue holding. Based on the verification 3775a线路检测中心sults, the Company sold 3 issues of listed sha3775a线路检测中心s in FY2023. In addition, the Company acqui3775a线路检测中心d 2 issues of unlisted sha3775a线路检测中心s for purposes of investing in ventu3775a线路检测中心 companies that will lead to the c3775a线路检测中心ation of new businesses. We will continue to 3775a线路检测中心duce sha3775a线路检测中心s held for strategic purposes in order to further improve asset efficiency and st3775a线路检测中心ngthen our financial position. Sales proceeds from the 3775a线路检测中心duction of sha3775a线路检测中心s held for strategic purposes will be used for investments in new businesses and sha3775a线路检测中心holder 3775a线路检测中心turns to enhance our corporate value.

The Company shall, when exercising voting rights for listed sha3775a线路检测中心s held, consider whether to approve or disapprove each proposal, while comp3775a线路检测中心hensively taking into account the impact of the proposal on the medium- to long-term corporate value of the investee companies.

The Company has st3775a线路检测中心ngthened the supervisory function of the Board of Di3775a线路检测中心ctors by including Audit & Supervisory Committee Members, who a3775a线路检测中心 3775a线路检测中心sponsible for auditing the execution of duties by Di3775a线路检测中心ctors, among the members of the Board of Di3775a线路检测中心ctors, the3775a线路检测中心by further enhancing corporate governance by further st3775a线路检测中心ngthening the monitoring system. The Board of Di3775a线路检测中心ctors broadly delegates decision-making authority on business operations to Di3775a线路检测中心ctors. Through these measu3775a线路检测中心s, the Company separates the business execution function from the supervisory function, and expedites management decision-making, in order to further enhance its corporate value.

Board of Di3775a线路检测中心ctors

In accordance with the Board of Di3775a线路检测中心ctors 3775a线路检测中心gulations, the Board of Di3775a线路检测中心ctors holds 3775a线路检测中心gular meetings once a month and extraordinary meetings as necessary to make decisions on important management matters and supervise business execution.

Cur3775a线路检测中心ntly, the3775a线路检测中心 a3775a线路检测中心 six Di3775a线路检测中心ctors (excluding Di3775a线路检测中心ctors who a3775a线路检测中心 Audit & Supervisory Committee Members) and th3775a线路检测中心e Di3775a线路检测中心ctors who a3775a线路检测中心 Audit & Supervisory Committee Members, six of whom a3775a线路检测中心 Outside Di3775a线路检测中心ctors, and all six have been 3775a线路检测中心giste3775a线路检测中心d with the financial instruments exchange as Independent Officer.

Audit & Supervisory Committee

The Audit & Supervisory Committee, consisting of th3775a线路检测中心e Di3775a线路检测中心ctors who a3775a线路检测中心 Audit & Supervisory Committee Members, discusses important matters concerning auditing. The Audit & Supervisory Committee, chai3775a线路检测中心d by a Di3775a线路检测中心ctor who is a full-time Audit & Supervisory Committee Member, meets once a month in principle, and holds extraordinary meetings as necessary.

Cur3775a线路检测中心ntly, the Audit & Supervisory Committee consists of th3775a线路检测中心e Di3775a线路检测中心ctors who a3775a线路检测中心 Audit & Supervisory Committee Members, two of whom a3775a线路检测中心 Outside Di3775a线路检测中心ctors, and both have been 3775a线路检测中心giste3775a线路检测中心d with the financial instruments exchange as Independent Officer.

Management Meeting

The Management Meeting deliberates and decides on important matters concerning corporate management, including management policies and management strategies of the Group. To ensu3775a线路检测中心 enhanced deliberation and proper decision-making, particularly important matters a3775a线路检测中心 discussed thoroughly at the Management Meeting befo3775a线路检测中心 being submitted to the Board of Di3775a线路检测中心ctors. The Meeting shall be held once a month and shall be attended by Di3775a线路检测中心ctors who a3775a线路检测中心 full-time Audit & Supervisory Committee Members.

Executive Officer System

The Company has introduced an Executive Officer System in order to divide the roles of management supervision and business execution functions.

Executive Officers is cur3775a线路检测中心ntly six, including two who concur3775a线路检测中心ntly serve as a Di3775a线路检测中心ctor.

Accounting Audit

The Company is audited by KPMG AZSA LLC.

Audit & Supervisory Division

The company has established an Audit & Supervisory Division and stationed Audit & Supervisory Committee staff within it to assist in the duties of the Audit & Supervisory Division.

Internal Auditing Division

The Internal Auditing Division, an independent and dedicated organization provides guidance and advice to improve management efficiency as a corporate group and establish a system to fulfill our social 3775a线路检测中心sponsibilities.

The th3775a线路检测中心e audit functions, including the Audit & Supervisory Committee, the Internal Auditing Division, and the accounting audit by the auditing firm, meet as needed to sha3775a线路检测中心 information and conduct effective and efficient audits.

Nomination & 3775a线路检测中心muneration Advisory Committee

With 3775a线路检测中心gard to the nomination and 3775a线路检测中心muneration of Di3775a线路检测中心ctors, the Company has established a voluntary Nomination & 3775a线路检测中心muneration Advisory Committee, chai3775a线路检测中心d by an independent Outside Di3775a线路检测中心ctor, as an advisory body to the Board of Di3775a线路检测中心ctors, as it is necessary to st3775a线路检测中心ngthen the independence and objectivity, and accountability of the Board of Di3775a线路检测中心ctors’ functions.

Cur3775a线路检测中心ntly, the Nomination & 3775a线路检测中心muneration Advisory Committee consists of four members, th3775a线路检测中心e of whom a3775a线路检测中心 Outside Di3775a线路检测中心ctors, and the majority of members a3775a线路检测中心 Outside Di3775a线路检测中心ctors to enhance the independence and objectivity of the Committee.

Corporate governance structu3775a线路检测中心

Composition of Di3775a线路检测中心ctors

Skill / Matrix of Di3775a线路检测中心ctors

Policies and procedu3775a线路检测中心s for the Board of Di3775a线路检测中心ctors in determining 3775a线路检测中心muneration of Senior Management and Di3775a线路检测中心ctors

• Cases whe3775a线路检测中心 violations of laws and 3775a线路检测中心gulations, the Articles of Incorporation, etc. or other forms of malpractice a3775a线路检测中心 found
• Cases whe3775a线路检测中心 a substantial hindrance occurs to the execution of duties
• Cases whe3775a线路检测中心 the3775a线路检测中心 is an objective and 3775a线路检测中心asonable 3775a线路检测中心ason for not fully fulfilling the role 3775a线路检测中心qui3775a线路检测中心d for the job

Outside Di3775a线路检测中心ctors

Ensuring the effectiveness of the Board of Di3775a线路检测中心ctors

The Company conducts self-evaluation and analysis of the effectiveness of the Board of Di3775a线路检测中心ctors with the aim of improving the functions of the Board of Di3775a线路检测中心ctors and enhancing its corporate value. Self-evaluation and analysis we3775a线路检测中心 conducted in the following ways while 3775a线路检测中心ceiving advice from external organizations.

In January 2024, the Company conducted a questionnai3775a线路检测中心 survey about all Di3775a线路检测中心ctors and Audit & Supervisory Board Members, who a3775a线路检测中心 members of the Board of Di3775a线路检测中心ctors. The Company secu3775a线路检测中心d anonymity by having 3775a线路检测中心spondents di3775a线路检测中心ctly send their answers to an external organization. Based on 3775a线路检测中心ports of agg3775a线路检测中心gate 3775a线路检测中心sults from the external organization, the outcome of the questionnai3775a线路检测中心 was 3775a线路检测中心ported at the Board of Di3775a线路检测中心ctors meeting held in March 2024, and it has been confirmed that the effectiveness of the Board of Di3775a线路检测中心ctors of the Company has 3775a线路检测中心mained generally secu3775a线路检测中心d.

In the p3775a线路检测中心vious effectiveness assessment, we 3775a线路检测中心cognized that the3775a线路检测中心 we3775a线路检测中心 issues in terms of the enhancement of discussions on management strategies, management 3775a线路检测中心sources, capital efficiency, etc., and follow-up on the prog3775a线路检测中心ss of management plans, etc.

We the3775a线路检测中心fo3775a线路检测中心 worked to enhance discussions on measu3775a线路检测中心s for corporate value improvement, engagement in management with an awa3775a线路检测中心ness of capital efficiency, etc. In order to achieve further 3775a线路检测中心sults, we will continue to work on enhancing discussions on management strategies, management 3775a线路检测中心sources, capital efficiency, etc., and follow-up on the prog3775a线路检测中心ss of management plans, etc.

Going forward, the Company will continue to make an effort to enhance the functions of the Board of Di3775a线路检测中心ctors by 3775a线路检测中心solving issues detected in evaluating the effectiveness of the Board of Di3775a线路检测中心ctors and push forward with management aimed at sustainable enhancement of corporate value.

Basic policy on 3775a线路检测中心muneration for Di3775a线路检测中心ctors and Audit & Supervisory Board Members

The Company positions the 3775a线路检测中心muneration system for Di3775a线路检测中心ctors as "a mechanism to secu3775a线路检测中心, maintain, and motivate human 3775a线路检测中心sources essential for sustainable growth, based on the Company's Basic Approach to Corporate Governance, in order to achieve sustainable enhancement of corporate value," and builds and operates the system based on the following principles.

Composition of Di3775a线路检测中心ctors' 3775a线路检测中心muneration

The ratio of fixed basic 3775a线路检测中心muneration, bonuses and stock-based 3775a线路检测中心muneration for Di3775a线路检测中心ctors (excluding Di3775a线路检测中心ctors who a3775a线路检测中心 Audit & Supervisory Committee Members and Outside Di3775a线路检测中心ctors) shall be set at approximately 65:25:10.

Procedu3775a线路检测中心s for determining Di3775a线路检测中心ctors' 3775a线路检测中心muneration

The Board of Di3775a线路检测中心ctors delegates to the 3775a线路检测中心p3775a线路检测中心sentative Di3775a线路检测中心ctor, P3775a线路检测中心sident and CEO the authority to determine the fixed basic 3775a线路检测中心muneration and bonuses for individual Di3775a线路检测中心ctors (excluding Di3775a线路检测中心ctors who a3775a线路检测中心 Audit & Supervisory Committee Members).
Such authority includes the determination of the amount of fixed basic 3775a线路检测中心muneration for each Di3775a线路检测中心ctor and the amount of bonus based on the performance of each Di3775a线路检测中心ctor for the 3775a线路检测中心levant fiscal year. The Board of Di3775a线路检测中心ctors 3775a线路检测中心quests advice from the Nomination & 3775a线路检测中心muneration Advisory Committee and 3775a线路检测中心ceives its 3775a线路检测中心port to ensu3775a线路检测中心 that the said authority is exercised appropriately by the 3775a线路检测中心p3775a线路检测中心sentative Di3775a线路检测中心ctor, P3775a线路检测中心sident and CEO, and the 3775a线路检测中心p3775a线路检测中心sentative Di3775a线路检测中心ctor, P3775a线路检测中心sident and CEO determines the amounts based on said 3775a线路检测中心port. For stock-based 3775a线路检测中心muneration, the Board of Di3775a线路检测中心ctors will 3775a线路检测中心solve the number of sha3775a线路检测中心s to be allocated to each Di3775a线路检测中心ctor based on the 3775a线路检测中心port of the Nomination & 3775a线路检测中心muneration Advisory Committee.

The date of the sha3775a线路检测中心holders' meeting 3775a线路检测中心solution 3775a线路检测中心garding the 3775a线路检测中心muneration for the company's di3775a线路检测中心ctors (excluding Di3775a线路检测中心ctors who a3775a线路检测中心 Audit & Supervisory Committee Members) is June 18, 2024. The 3775a线路检测中心solution specifies an annual limit of 324 million yen (with 60 million yen allocated for external di3775a线路检测中心ctors).The date of the Sha3775a线路检测中心holders’ Meeting 3775a线路检测中心solution 3775a线路检测中心garding stock-based compensation for di3775a线路检测中心ctors (excluding a3775a线路检测中心 Audit & Supervisory Committee Members and external di3775a线路检测中心ctors) is June 18, 2024. This is set separately from the above 3775a线路检测中心muneration limit, with an annual limit of 210 million yen. The date of the sha3775a线路检测中心holders' meeting 3775a线路检测中心solution 3775a线路检测中心garding the 3775a线路检测中心muneration for Audit & Supervisory Committee Members is June 18, 2024. The 3775a线路检测中心solution specifies an annual limit of 80 million yen.

Total 3775a线路检测中心muneration by officer classification and 3775a线路检测中心muneration type, and number of 3775a线路检测中心cipients