The Company's policy regarding determining the amount of compensation, etc. for Directors and its calculation method is as follows.

The timing of giving compensation will be as follows.

• Monthly compensation (fixed compensation): Every month from July onwards
• Bonus (performance-based compensation): June after the regular General meeting of shareholders
• restricted stock compensation (non-monetary compensation): July (annual amount granted in one lump sum)
• Performance-linked stock compensation (non-monetary compensation): July of the year following the final performance year of the Medium-term management plan (granted in one lump sum for the period of the Medium-term management plan)

• Name or position of the person receiving the delegation
  Tatsuyuki Isogawa, Representative Director and President & CEO
• Details of the authority to be delegated
  Individual monthly compensation for Directors (fixed compensation), bonuses (performance-based compensation), restricted stock compensation (non-monetary compensation), performance-linked stock compensation (non-monetary compensation)
• If any measures are taken to ensure that the authority is properly exercised by the delegator, the details thereof;
  Monthly compensation (fixed compensation), bonus (performance-based compensation), restricted stock compensation (non-monetary compensation), and performance-linked stock compensation (non-monetary compensation) are paid in advance by the Nomination and Compensation Committee, which is made up of a majority of Outside Directors. The level of the amount to be paid is being deliberated, and those who have been delegated should decide on the specific amount to be paid based on the results of the deliberations at the committee.
• Reason for delegation
  It is appropriate for the evaluation of the duties of each Director to be carried out by the Representative Director, who is in a position to have a detailed and comprehensive understanding of the contents of each director's duties and the specific efforts each director is making regarding them. Therefore, the above authority has been delegated to the Rrepresentative Director.
• Reasons why the board of directors has determined that the content of individual compensation for Directors is in line with the decision policy
  When determining individual compensation for Directors, the Nomination and Compensation Committee, which has a majority of Outside Directors, conducts deliberations in advance, including consideration of consistency with the above decision policy, and based on the results of those deliberations, Since the details of compensation, etc. for individual Directors have been determined, we have determined that the details of the decision are in line with the above decision policy.

• Monthly compensation (fixed compensation)
  It is determined by supervisory fees (uniformly the same amount), advisory fees (applicable to Outside Directorrs, uniformly the same amount), representative fees (uniformly the same amount), and executive fees (not applicable to Outside Directors, uniformly the same amount depending on position).
• Bonus (performance-based compensation)
  Decisions will be made based on the performance evaluation of the department in charge. Please note that no compensation will be paid to Outside Directorrs.
• Restricted stock compensation (non-monetary compensation)
  Determined by supervisory compensation (uniformly the same amount) and executive compensation (uniformly the same amount depending on position). Please note that this allowance is not paid to Outside Directors.
• Performance-linked stock compensation (non-monetary compensation)
  The standard number of shares to be delivered will be determined according to the status of the performance evaluation period, and the Company's shares will be paid based on the period of office and the degree of achievement of performance targets. Please note that this allowance is not paid toOutside Directors.

Our company conducts corporate activities in compliance with laws, regulations and social norms based on the "Corporate principles", "Management philosophy," "Action guidelines," and "Code of conduct."

The execution of duties by Directors shall be supervised by the Board of Directors, which includes Outside Directors with no vested interests, and audited by Audit & Supervisory Board Members to ensure appropriateness.

The term of office for Directors is one year in order to clarify their evaluation and responsibilities.In order to further increase the transparency and appropriateness of personnel affairs, compensation, etc., we have established a Nomination and Compensation Committee, of which the majority of members are Otside Directors. ” will be installed.

In addition, we have established a "Corporate Ethics Helpline" to act as a whistle-blowing contact point, and strive to quickly identify problematic events and eliminate compliance risks through self-cleaning mechanisms.

The Company records information related to the execution of duties by directors in documents or electromagnetic media based on internal rules such as Board of Directors rules and approval rules, and retains the information for the period specified in the document handling rules.

Regarding risks related to compliance, export control, information management, quality control, environmental management, disasters, etc., our company's departments take the lead in developing internal rules and manuals, and provide education to employees, as well as comply with laws and regulations. We will provide information in a timely manner to ensure thorough compliance and work to disseminate it.

In addition, with regard to risks related to business execution, regulations stipulating risk management will be established, and each division will independently establish a risk management system that suits the characteristics of the business. On the other hand, at Head Office, each division We will establish a risk management system by monitoring the status of risk management and implementing company-wide risk countermeasures such as disaster risk and financial risk.

The Company will delegate authority regarding the management of individual businesses to Executive Officers, strengthen management functions by speeding up decision-making and clarifying responsibilities, and will allow Directors to make decisions regarding evaluation of individual businesses and allocation of management resources, etc. Through this and supervision, we strive to strengthen corporate governance and improve operational efficiency.

In addition, we formulate single-year and medium-term management plans that clarify the division of authority, authority, and responsibility for the organization and other business execution systems, and regularly review and revise them.

In addition to the "Action guidelines'' and "Code of conduct,'' which are guidelines for employees to act based on laws, social norms, and common sense, our company also established "ShinMaywa Corporate Ethics Day'' and "Corporate Ethics Month.'' We will promote the penetration of compliance awareness and the establishment of various systems.

In addition, the execution of business by employees shall be based on laws and regulations, the Articles of Incorporation, internal regulations such as approval regulations, and division of duties regulations.In order to verify this, internal audits are conducted mainly by the Internal Audit Department, and compliance risks are determined. In addition to aiming for the early detection and elimination of problems, we will strive to widely understand problematic events by utilizing internal whistleblower hotlines and other means.

Our company shares our Corporate principles credo, Management philosophy, Action guidelines, and Code of conduct with each company in our group, and conducts corporate activities in compliance with laws and social norms.

In addition, based on the regulations stipulating the management of group companies, we may request reports from officers, employees, etc. (hereinafter referred to as "officers and employees") of each company in our group, as necessary, or communicate with the department in charge of our company. In addition, by dispatching our officers and employees as directors, Audit & Supervisory Board Member, etc. of each company in our group, we will strive to understand the status of business execution at each company in our group, and we will also strive to understand the status of business execution at each company in our group. We will promote reporting and discussions with the government.

In addition, we carry out internal audits led by the audit department, aiming to discover and eliminate compliance risks at an early stage, and broadly grasp problematic events by utilizing the whistle-blowing hotline that can be used by each company in our group.

If an Audit & Supervisory Board Member requests the appointment of an employee to assist with his or her duties, the Company will assign a staff member to the Audit & Supervisory Board Member and provide support from related departments as necessary. If we have a full-time auditor staff, we will listen to and respect the opinions of the Audit & Supervisory Board Member regarding personnel changes and evaluations.

The Company allows directors to report on the status of business execution and other important matters to the Audit & Supervisory Board Members at Board of Directors meetings, and allows them to attend important internal meetings such as the Executive Committee. Additionally, we will strive to secure opportunities for Audit & Supervisory Board Members to regularly exchange opinions with Representative Directors and Outside Directors.

In addition to these, we will strive to secure opportunities for Audit & Supervisory Board Members to exchange opinions and share information with executives and employees of each company in our group.

In addition, the Company's internal audit department will report to the Audit & Supervisory Board Members the implementation status and results of internal audits of each Group company.

Furthermore, the Company shall not treat any officer or employee who made a report or made a whistleblower report unfavorably on the grounds that the officer or employee made a report to an Audit & Supervisory Board Member regarding the execution of duties or made a whistleblower report based on the whistleblowing system.

The Company shall comply with any request from an Audit & Supervisory Board Member for advance payment or reimbursement of expenses incurred in the execution of his or her duties, unless it is deemed unnecessary for the execution of the Audit & Supervisory Board Member's duties. 

In response to requests from Audit & Supervisory Board Members, the Company will disclose important documents such as approval documents, as well as investigate, report, and provide explanations regarding the duties of Directors and employees. In addition, we provide an opportunity to exchange opinions with the accounting auditor.

The Articles of Incorporation stipulate that resolutions for the appointment of Directors shall be made by a majority vote in the presence of shareholders holding at least one-third of the voting rights of shareholders who can exercise their voting rights. Additionally, the articles of incorporation stipulate that resolutions for the election of directors shall not be based on cumulative voting.

In order to enable the execution of flexible capital policies in response to changes in the business envrionment, the Company acquires its own shares through market transactions, etc. by resolution of the Board of Directors pursuant to the provisions of Article 165, Paragraph 2 of the Companies Act. The articles of incorporation stipulate that this can be done.

In order to flexibly distribute profits to shareholders, the Company shall, by resolution of Board of Director Meeting, make distributions to shareholders or registered stock pledgees listed or recorded in the final shareholder register as of September 30th of each year, pursuant to the Companies Act. The articles of incorporation stipulate that the company may make dividends from surplus (interim dividends) as stipulated in Article 454, Paragraph 5.

Regarding special resolutions at General meetings of shareholders pursuant to the provisions of Article 309, Paragraph 2 of the Companies Act, the Company shall ensure that shareholders holding at least one-third of the voting rights of shareholders who are eligible to exercise their voting rights are present and that their voting rights are The articles of incorporation stipulate that a two-thirds or more vote is required. The purpose of this is to ensure that general shareholders' meetings run smoothly by relaxing the quorum required for special resolutions at general shareholders' meetings.

Based on the provisions of our articles of incorporation, our company has entered into individual agreements with all Outside Directors and Audit & Supervisory Board Members that limit their liability for damages pursuant to Article 423, Paragraph 1 of the Companies Act. The maximum amount of liability for damages under this agreement is the minimum amount stipulated by law.

The Company has concluded an officer liability insurance contract with an insurance company, with Directors and Audit & Supervisory Board Members as insured persons, as stipulated in Article 430-3, Paragraph 1 of the Companies Act. Under this insurance contract, if the insured is liable for damages in connection with the execution of his or her duties, the Company will compensate up to 2 billion yen for damages and litigation costs. I am bearing the burden. Furthermore, claims for damages arising from the insured's unlawful receipt of personal benefits or benefits pursuant to a contract with the insurance company, claims for damages arising from the insured's criminal acts, Covers liability for damages incurred by the insured due to the insured's improper execution of duties, such as claims for damages resulting from decisions or actions taken by the insured in violation of the authority granted by the company. By not doing so, we have taken measures to ensure that the appropriateness of the insured person's execution of duties is not impaired.

In addition to appropriately providing necessary and useful information for shareholders to properly exercise their voting rights, the Company strives to engage constructively with shareholders by holding financial results briefings and regularly conducting shareholder surveys. We strive to promote and enhance dialogue. We have established an appropriate system for dialogue with shareholders, such as reporting the opinions of shareholders ascertained through these dialogues to the Board of Directors and other relevant officers and departments.