We have set “Toward a sustainable society through expanding the potential of plastics” as the Purpose of our Group with the goal of contributing to value creation for customers and various other stakeholders. For this reason it is important to earn the trust of society and be needed by society, and therefore, we are establishing efficient and effective structures for achieving management that are highly compatible with society and the environment and for addressing risks facing management, including rigorous compliance.

We have adopted a company with Corporate Auditors model and have appointed 9 Directors (of which 3 are Outside Directors) and 4 Corporate Auditors (of which 2 are Outside Corporate Auditors) as of June 24, 2025. The Board of Directors is chaired by the Chairman, Representative Director.

At the monthly Board of Directors meetings, Directors make decisions on important matters of business, receive reports on monthly business performance and progress updates from each Director, and listen to the opinions and reports from Corporate Auditors, with the chair of the meeting taking care to ensure sufficient discussion takes place. In the case of conflicts of interest involving any Director, potential conflicts of interest are required to be reported in advance to the Board of Directors to obtain its approval, with reports to be given on the propriety of this after the fact.

The Board of Corporate Auditors consists of 2 Standing Corporate Auditors and 2 part-time Independent Outside Corporate Auditors. Our policy is to maintain the current diverse composition of individuals with experience and capabilities necessary to perform as auditors, including knowledge of finance, accounting, and legal matters, to provide fair and impartial auditing activities. In addition, under the direction and orders of the Corporate Auditors, 2 members of staff with expertise in internal auditing assist the Board of Corporate Auditors and each Corporate Auditor in their activities. These members of staff serve concurrently in the Internal Audit Department, which deals with internal audits and evaluation of internal controls related to financial reporting based on the Financial Instruments and Exchange Act.

We have introduced an Executive Officer structure in which Executive Officers appointed by the Board of Directors as the persons responsible for business execution execute business under the direction of the Company President based on the policies determined by the Board of Directors, and have appointed 18 Executive Officers (including 5 who serve concurrently as Directors) as of June 24, 2025.

Executive Officers’ Meetings are held once a month and attended by Directors, Executive Officers, and Corporate Auditors to convey information on policies and important matters decided by the Board of Directors, to receive reports on business performance and the status of business execution from each Executive Officer, and to review important matters and share information.

With the Executive Officer structure, the resolution of important operations and execution of operations were separated to increase the effectiveness of the Board of Directors in supervising operational execution, increasing the speed of operational execution, and clarifying responsibility. Corporate Auditors oversee the Directors’ execution of their roles and audit the Board of Directors to fulfill its role appropriately. As described above, Directors, Corporate Auditors, and Executive Officers fulfill their respective responsibility and roles to govern the Company in a way shareholders and stakeholders can trust.

As of June 24, 2025, all 26 of our Officers, who are Directors, Corporate Auditors, and Executive Officers, included 22 male and 4 female, with a female board member ratio of around 15%. All of our Officers with the exception of 1 Corporate Auditor are 50 years old or older.

Outside Director Kazuo Matsuda has considerable experience and wide range of insight that he cultivated at a financial institution as well as business companies as a management executive, and we anticipate that he will bring these abilities to bear in providing germane opinions and valuable advice from an objective standpoint. He also serves as a member of the Nomination and Remuneration Committee.

Outside Director Etsuko Nagashima has an expert viewpoint as a certified public accountant and wide-ranging views related to financial matters and accounting, and we anticipate that she will bring these abilities to bear in providing germane opinions and valuable advice from an objective standpoint. She also serves as a member of the Nomination and Remuneration Committee.

Outside Director Hiroyuki Wakabayashi has considerable experience and a broad insight that he cultivated as a person in charge of manufacturing at a major manufacturer as well as a management executive in charge of technology in general and IT digital, and we anticipate that he will bring these abilities to bear in providing germane opinions and valuable advice from an objective standpoint. He also serves as a member of the Nomination and Remuneration Committee.

Outside Corporate Auditor Kazuhiko Yamagishi utilizes his professional perspective as a lawyer and wide-ranging insight into management for auditing our Company.

Outside Corporate Auditor Noriko Kawate utilizes her professional perspective as a Certified Public Accountant and tax accountant and wide-ranging insight into finance, accounting, and management for auditing our Company.

We have established the Criteria for Independence of Directors and Corporate Auditors through a resolution of the Board of Directors, and has determined that the aforementioned Outside Directors and Outside Corporate Auditors are independent pursuant to said criteria. In addition, we have submitted notification of them as Independent Officers as stipulated by the Tokyo Stock Exchange.

We also hold monthly Outside Officers’ Meetings consisting of Outside Directors, Outside Corporate Auditors, the Director Overseeing the Corporate General Affairs Division and the Corporate Finance & Planning Division, the Executive Officer in charge of the Corporate General Affairs Division, Standing Corporate Auditors, and members of the Corporate General Affairs Division and the Corporate Finance & Planning Division. At the Outside Officers’ Meeting, account settlement overview reports on our Group are shared, introductions to businesses are provided from the Corporate Officers in charge of each segment, and advance explanations of agenda items for meetings of the Board of Directors are provided. This is done in an effort to share information and awareness concerning the Group between Outside Directors and Outside Corporate Auditors.

In order to strengthen the independence, objectivity, and accountability of the Board of Directors’ functions concerning the nomination and remuneration, etc. of Directors, the Company has voluntarily established the Nomination and Remuneration Committee consisting of a majority of Independent Outside Directors (Directors submitted as an Independent Officer to the Tokyo Stock Exchange). The Appointment and Remuneration Advisory Committee, which had previously reported to the Board of Directors on matters concerning the nomination of Directors and the determination of remuneration amounts, was granted greater authority and reorganized on June 24, 2021, as the Nomination and Remuneration Committee. As of June 24, 2025, the committee is chaired by Chairman and Representative Director Kazuhiko Fujiwara, with the membership of President and Representative Director Shinichi Kajiya and the Independent Outside Directors (Kazuo Matsuda, Etsuko Nagashima, and Hiroyuki Wakabayashi).

This committee holds deliberations regarding Directorship appointments, including assignments to and dismissals from Directorships, elections and dismissals of Representative Directors, as well as plans for successors of the President and Representative Director. It then reports its findings to the Board of Directors based on the results of these deliberations. The committee is delegated based on findings of the Board of Directors to perform decision-making regarding items (including systems and policy) concerning remuneration for Directors.

In FY2024, in accordance with the above, with regard to the nomination of Directors, the committee appointed candidates for the positions of Chairman and Representative Director and President and Representative Director, selected Director candidates, and held discussions including clarifying the reasons for selection of items in the skills matrix. With regard to the remuneration of Directors, the committee revised the Directors’ bonus system and revised the policy for determining individual Directors’ remuneration accordingly, determined the amounts of Directors’ monthly remuneration, bonuses, and stock compensation by position, and decided the amounts and allocation of individual monthly salary, bonuses, and stock compensation for each Director.

The Committee met a total of five times during FY2024, and all members attended all committee meetings.

To provide an incentive to contribute to the sustained improvement of corporate value of our Group for the medium- to long-term, the remuneration of Directors shall be based on a remuneration system that is linked to management targets and shareholder value. Specifically, remunerations shall comprise “monthly remuneration,” which is a fixed remuneration according to position, “bonuses,” which are performance-linked and based on management indicators set with a view to achieving the long-term visions, and “stock compensation,” which is a form of non-monetary remuneration, as medium- to long-term incentives to encourage the sharing of value with shareholders. However, the remuneration of Outside Directors shall comprise exclusively their monthly remuneration in light of the fact that they supervise management from a position independent of business execution.

By resolution of the Board of Directors, the authority described below to decide on Director remuneration for FY2024 has been delegated to the Nomination and Remuneration Committee.
　• Determine amounts for monthly remuneration, bonus standard amount, and stock compensation by position
　• Determine individual amounts of monthly remuneration and bonuses to be paid and the number of stocks to be allocated to each Director

The remuneration of Corporate Auditors consists of basic remuneration (monthly remuneration). The total amount and the amount to be paid to each individual Corporate Auditor are determined in consultation with the Corporate Auditors within the maximum remuneration limit resolved by the General Meeting of Shareholders.

• Formula for Calculation of Bonuses

Bonus by position
= standard amount by position × business profit weighting 60% × coefficient corresponding to attainment of this indicator
+ standard amount by position × ROE weighting 10% × coefficient corresponding to achievement of this indicator
+ standard amount by position × GHG emissions reduction weighting 10% × coefficient corresponding to attainment of this indicator
+ standard amount by position × CDP evaluation result weighting 10% × coefficient corresponding to attainment of this indicator
+ standard amount by position × ratio of female managers weighting 10% × coefficient corresponding to attainment of this indicator

We evaluate the effectiveness of the Board of Directors each year. We enhance the effectiveness of the Board of Directors by executing the PDCA cycle of conducting self-evaluations and aggregation of opinions based on a questionnaire survey of all members of the Board of Directors (Directors and Corporate Auditors), holding discussions and exchanges of opinions at meetings based on the analysis results of the survey, summarizing the evaluation results based on these discussions and setting the issues to be addressed, and implementing initiatives to resolve these issues at the Board of Directors.

The results of the analysis and evaluation of the effectiveness of the Board of Directors for FY2024 are summarized below.

We have systems in place for ensuring appropriate operations in accordance with our Business Philosophy. In accordance with our Basic Policy on Internal Control System (partially amended by resolution of the Board of Directors meeting held on February 28, 2023 to further promote the system based on the sustainability management and initiatives to strengthen governance) drawn up by the Board of Directors, we periodically review the systems and promote various activities to enhance internal control.

With respect to internal control over financial reporting, based on our Basic Rules and Regulations for Internal Control over Financial Reporting, we endeavor to enhance systems for ensuring the reliability of our financial reporting, appropriately operate internal control systems in terms of implementation, assessment, reporting, and correction, and ensure appropriate and timely disclosure of corporate information. The Comprehensive Guidelines for Internal Control in Consolidated Subsidiaries covers the items that subsidiaries are required to address in establishing their internal control systems and in their subsequent ongoing implementation of control activities.

The internal control over our financial reporting as of March 31, 2025 was assessed and deemed to be effective by internal auditing departments. In addition, as a result of the Accounting Auditor’s audit, it was confirmed that the internal control report presents fairly the result of assessments of internal control over financial reporting.

Our Board of Directors is structured to include Inside Directors who have the knowledge, experience, and ability to fulfill their responsibilities to ensure the sustainable growth of the Company and increase its corporate value over the medium-to-long-term, and to supervise management’s execution of operations. The Board also includes Outside Directors, who can be expected to express their opinions on Company policies and business execution based on their objective viewpoints. The following table sets forth the critical knowledge, experience, and abilities required by the Board of Directors and their relationship to each Director.

Reasons for selection of key knowledge, experience, and abilities required by our Board of Directors

The Board of Corporate Auditors intends to maintain the diverse composition of members with appropriate experience and abilities, including a knowledge of finance, accounting, and legal affairs, and to conduct fair, impartial, and efficient auditing activities going forward. The correspondence between key knowledge, experiences, and abilities, etc. which the Board of Corporate Auditors requires and the respective Corporate Auditors are described below.

Reasons for selection of key knowledge, experience, and abilities required by our Corporate Auditors