(From April 1, 2024 to March 31, 2025)

*For more information, see Securities Report for the 17th Fiscal Year Ended March 2025 (April 1, 2024 - March 31, 2025) (Japanese)

The Company determines remuneration, bonuses, and other economic benefits, for Directors (excluding Directors who are Audit & Supervisory Committee Members), to be received as consideration for the execution of duties ("remuneration, etc. of Directors (excluding Directors who are Audit & Supervisory Committee Members)") by resolution at a Shareholders' Meeting.

The remuneration, etc. of Directors (excluding Directors who are Audit & Supervisory Committee Members) consists of a three-tier structure, including fixed remuneration, short-term incentive (hereinafter, "STI"^*1) and medium- to long-term incentive (hereinafter, "LTI"^*2), each of which is clearly defined.

The Company has set forth a method for determining the amount of remuneration based on internal rules resolved by the Board of Directors, following a report from the Nomination and Remuneration Advisory Committee, within the scope of the total amount of remuneration resolved at a Shareholders' Meeting.

Specifically, at the 17th Ordinary General Meeting of Shareholders held on June 25, 2025, a resolution was passed stipulating that in addition to the fixed remuneration, the amount of remuneration, etc., including bonuses and other monetary remuneration as the above STI, shall be no more than 432 million yen per year for Directors (excluding Directors who are Audit & Supervisory Committee Members) (including no more than 96 million yen per year for external Directors). The aforementioned total amount of remuneration for Directors (excluding Directors who are Audit & Supervisory Committee Members) also includes the portion of remuneration as an employee for Directors who work as employees at the same time (including the Executive Officer's portion), and the above stock-based payment as LTI is separate. No retirement benefits shall be paid to Directors (excluding Directors who are Audit & Supervisory Committee Members).

At the conclusion of the 17th Ordinary General Meeting of Shareholders held on June 25, 2025, there were ten (10) Directors (excluding Directors who are Audit & Supervisory Committee Members) (including four (4) External Directors).

Officer compensation consists of (1) fixed remuneration, (2) short-term incentive (STI), and (3) medium- and long-term incentive (LTI), in order to create an incentive for officers to increase short-term performance, as well as medium- and long-term performance, and corporate value. The proportion of each type of compensation is as follows: (1) fixed remuneration = 75%, (2) short-term incentive (STI) = 10% or 15%, and (3) medium- and long-term incentive (LTI) = 15% or 10%.

Fixed remuneration is an amount of remuneration determined in accordance with internal rules for each title (President, Executive Vice President, Senior Managing Executive Officer, Managing Executive Officer, etc.) and each position (Representative, Chairman of the Board, Member of Nomination and Remuneration Advisory Committee, etc.), paid as monthly remuneration in cash.

The Company pays as a bonus the STI that will be added to or subtracted from the calculation base amount calculated from the individual amount of base remuneration, ranging from 0% (no payment) to 200% (double the amount of the calculation base) according to business performance (profit, capital efficiency indicators, etc.) (STI is not paid to Directors who do not serve as Executive Officers at the same time).

STI for FY2023 was determined according to specific indicators linked to performance and adjustment coefficients determined at a meeting of the Board of Directors held on August 1, 2023, based on performance in FY2023. A total amount of 37 million yen was paid to seven Directors serving as Executive Officers at the same time in FY2023.

A sample of the STI calculation formula is as follows.
Bonus = STI standard annual amount (Y) × comprehensive assessment (X%)
Comprehensive assessment (X%) = (a × A) + (b × B) + (c × C)]

The Company introduces a stock remuneration system using trusts ("this system") as LTI for Directors of the Company (excluding Directors who are Audit & Supervisory Committee Members or External Directors).

The purpose of this system is to raise Directors' awareness of contributing to the improvement of medium- to long-term performance and the enhancement of corporate value by further clarifying the linkage between the remuneration for Directors and the value of the Company's shares, and enabling Directors to share profit and risks arising from share price fluctuation with shareholders. The Company also introduces a similar stock remuneration system for Executive Officers who do not concurrently serve as Directors.

An outline of this system is as follows.

Provisions have also been established to the effect that the Company may also acquire the shares that have been delivered without consideration in cases such as the following: the transfer, provision as collateral, or disposal of shares that have been delivered during the transfer restriction period; illegal acts; petition for the commencement of bankruptcy or civil rehabilitation proceedings; resignation for reasons that are not legitimate; material compliance violations; or defamation of the Company. In addition to the above, as a result of the voluntary acquisition of a certain amount of the Company's shares every month through the Executive Shareholding Association, Directors and Executive Officers engage in management from a shareholder's perspective that prioritizes medium- to long-term performance.

The Company determines remuneration, etc., for Directors who are Audit & Supervisory Committee Members, to be received as consideration for the execution of duties by resolution at a Shareholders' Meeting.

The 17th Ordinary General Meeting of Shareholders held on June 25, 2025, it was resolved that remuneration for Directors who are Audit & Supervisory Committee Members shall be no more than 108 million yen per year. No retirement benefits shall be paid to Directors who are Audit & Supervisory Committee Members. At the conclusion of the 17th Ordinary General Meeting of Shareholders held on June 25, 2025 there were four(4) Directors who are Audit & Supervisory Committee Members(including three (3) External Directors).

Following consultation among the Directors who are Audit & Supervisory Committee Members, the Company has set forth the specific amount of remuneration for each Director who is an Audit & Supervisory Committee Member based on internal rules, within the scope of the total amount of remuneration resolved at a Shareholders' Meeting.

Specifically, the remuneration for Directors who are Audit & Supervisory Committee Members consists of a basic remuneration and the remuneration according to each title (Audit & Supervisory Committee Member, and Chairman of the Audit & Supervisory Committee, etc.), in addition, "Audit & Supervisory Committee Member remuneration", "Chairman of the Audit & Supervisory Committee remuneration", or "Full-time Audit & Supervisory Committee Member remuneration". Audit & Supervisory Committee Members are not eligible for STI or LTI payment.