Corporate Governance

SUBARU have adopted an Audit & Supervisory Board system as a corporate governance system, in which Board of Directors performs decision making and oversight of execution of important business operations while paying attention to separation of supervision and execution, and at the Audit & Supervisory Board, Audit & Supervisory Board Members discuss and make decisions regarding key matters pertaining to audit. The Board of Directors was comprised of eight members of whom three were highly independent outside directors. The Audit & Supervisory Board is composed of four members, two of whom are highly independent outside Audit & Supervisory Board members. This system is designed to ensure soundness and efficiency of operations by enhancing effectiveness of monitoring of business operation through the involvement of highly independent outside directors and outside Audit & Supervisory Board members.
At the Board of Directors Meeting held on May 20, 2025, SUBARU changed the name of the Executive Nomination Meeting to the Governance and Executive Nomination Meeting to strengthen discussions regarding governance overall.

As of the resolution of the 94th Ordinary General Meeting of Shareholders held on June 25, 2025, SUBARU's corporate governance structure and the composition of the Board of Directors, Audit & Supervisory Board, Governance and Executive Nomination Meeting, and Executive Compensation Meeting are as follows.

Corporate Governance Structure

Composition of FYE March 2026 Board of Directors, Governance and Executive Nomination Meeting, ExecutiveCompensation Meeting, and Audit and Supervisory Board Members

◎ and 〇 indicate attendance of the chairman and other members, respectively.

Major Items Deliberated in FYE March 2025

The main activities of the Board of Directors, the Executive Nomination Meeting, and the Executive Compensation Meeting are as follows.

Board of Directors

In FYE March 2025, the Board of Directors consisted of eight directors, including three independent outside directors, and met 13 times, chaired by Director and Chairman Tomomi Nakamura. The board's business during the fiscal year included overall oversight of Company management and determinations on important business execution.
In addition to the number of Board of Directors meetings held in the above table, one resolution was adopted in writing that was deemed to be a resolution of the Board of Directors in accordance with Article 370 of the Companies Act and the Articles of Incorporation.

Major Themes

• Determination of candidates for directors and Audit & Supervisory Board members, as well as the CEO and other members of the management team
• Matters pertaining to repurchase and cancellation of own shares
• Revision of the executive compensation system and the policy for determining details of the compensation for individual directors, and determination of delegating matters regarding the determination of compensation for individual directors and executive officers based on the executive compensation system to the Executive Compensation Meeting
• Discussions on reports related to medium- and long-term management issues, including the EV strategy, IR/SR activities, the Sustainability Committee, and the Risk Management and Compliance Committee
• Revision of the rules of the Board of Directors in order to strengthen the monitoring function of the Board of Directors

The Company provides information and knowledge regarding its business activities that is necessary to oversee the corporate management on an ongoing basis to corporate officers. To constantly provide its outside officers with information related to its corporate statement, corporate culture, business environment, and other matters, the Company offers opportunities such as operations briefings by business divisions and key business site tours in Japan and abroad for deepening their understanding of the business. It also strives to enhance information sharing and opinion exchange among the officers.

Management Roundtable Discussions

The directors and Audit & Supervisory Board members (12 in total) participate in discussions and share information and exchange opinions regarding important management themes. They met three times in FYE March 2025.

Major Themes

• The approach to human resources strategy for realizing business strategies
• Progress in discussions on electrification strategy
• The concept of the Company’s Board of Directors and governance
• Quality improvement initiatives
• Result of the evaluation of effectiveness of the Board of Directors

The Executive Nomination Meeting is comprised of three highly independent outside directors (Miwako Doi, Fuminao Hachiuma, and Shigeru Yamashita) and two internal directors (Tomomi Nakamura and Atsushi Osaki). Chaired by Director and Chairman Tomomi Nakamura, it met six times in FYE March 2025.

Major Themes

• Development of CEO and other executive human resources through discussions of the succession plans for the CEO and others, implementation of 360-degree evaluation of executives, the skills matrix for executives, and other means
• Deliberations regarding the Company’s officer structure, personnel matters, the division of duties as well as on executive appointment proposals for major subsidiaries, and others

* At the Board of Directors Meeting held on May 20, 2025, SUBARU changed the name of the Executive Nomination Meeting to the Governance and Executive Nomination Meeting to strengthen discussions regarding governance overall. At the same time, the Board of Directors resolved to add an Outside Audit & Supervisory Board Member as an observer to raise subjectivity and transparency of the meeting body.

The Executive Compensation Meeting is comprised of three highly independent outside directors (Miwako Doi, Fuminao Hachiuma, and Shigeru Yamashita) and two internal directors (Tomomi Nakamura and Atsushi Osaki). Chaired by Director and Chairman Tomomi Nakamura, it met five times in FYE March 2025.

Major Themes

• Consideration of executive compensation levels using external survey data, incentive design, etc.
• Determination of individual performance-linked compensation amounts for directors (excluding outside directors) and executive officers based on their evaluations
• Determination of individual base amounts, etc., for restricted stock compensation

* At the Board of Directors Meeting held on May 20, 2025, SUBARU resolved to add an Outside Audit & Supervisory Board Member as an observer to raise subjectivity and transparency of the meeting body.

Membership, Meetings Held, and Attendance for the Board of Directors, Executive Nomination Meeting, and Executive Compensation Meeting, and Audit and Supervisory Board Members for FYE March 2025

◎ and 〇 indicate attendance of the chairman and other members, respectively.

*1

Independent Outside Director Yasuyuki Abe (retired in June 2024) attended all meetings held prior to his retirement: three Board of Directors meetings, one Executive Nomination Meeting, and two Executive Compensation Meetings.

*2

Independent Outside Director Shigeru Yamashita is counted for Board of Directors meetings held after the 93rd Ordinary General Meeting of Shareholders on June 19, 2024, at which he was appointed as a director of SUBARU.

*3

Independent Outside Director Shigeru Yamashita is counted for Executive Nomination Meeting and Executive Compensation Meeting held after the Board of Directors resolution on June 19, 2024, at which he was appointed as a member of both committees.

In order to hand over the business to the right person, the Board of Directors, as part of its essential duties, develops succession plans that can convince all stakeholder groups. To ensure objectivity and transparency in the process for deciding on the replacement and selection of the CEO, the Board of Directors appropriately supervises the preparation of proposals by the current CEO through discussions at the Governance and Executive Nomination Meeting.

The Board of Directors and Governance and Executive Nomination Meeting meet on a regular basis to review the list of essential qualities and skills required of the CEO, which may include removing and adding items, in consideration of perception of current trends, changes in the business environment surrounding the Company, and the future direction of the Group’s business strategies.

To ensure the objectivity of the successor selection process and increase the effectiveness of its supervision by the Board of Directors and Governance and Executive Nomination Meeting, it is important to have effective selection criteria in place, particularly for use by independent outside directors. To this end, SUBARU discloses two sets of criteria: “Abilities required of the SUBARU Group’s CEO” and “Five key qualities required of the SUBARU Group’s CEO.” These criteria serve as a guide for evaluating candidates in light of quality, competency, experience, track record, specialized expertise, personality, and other factors, which have been discussed and decided on by the Board of Directors and Governance and Executive Nomination Meeting.

Note: Expenses to be incurred for offering the above training to directors and auditors, including outside officers and executive officers are borne by the Company.

Nomination Criteria

• The outside directors are expected to perform a monitoring function independent from the management team and provide appropriate advice on management on the basis of a wide range of sophisticated knowledge.
• The outside audit & supervisory board members are expected to perform a management oversight function independent from the management team and undertake their role of auditing from the viewpoint of legality and appropriateness on the basis of broad and advanced knowledge.
• SUBARU has established criteria for independence of outside officers in addition to the criteria for independence established by the Tokyo Stock Exchange, and appoints outside directors and outside audit & supervisory board members who meet those criteria.

*

The status of “Significant Current Positions” is as of July, 2025.

Matters Concerning the Policy for Determining Details of Compensation for Individual Directors

SUBARU deliberated and decided on the proposal of the policy for determining details of compensation for individual directors approved by the Executive Compensation Meeting at the Board of Directors meeting held on May 15, 2024. The Board of Directors has judged that the content of the compensations for individual directors for the fiscal year under review adhere to the decision policy, as the Executive Compensation Meeting has been delegated by the Board of Directors to decide the details of the compensations, and they have been decided after sufficient deliberations by the meeting members including outside directors.

Below is the summary of the decision policy regarding the content of compensation, etc. for individual directors.

Overview of executive compensation system

Basic Compensation

Directors and executive officers receive the Fixed Monetary Compensation monthly as basic compensation. The amount for individual executive officer is determined based on their positions, taking into consideration elements such as the business environment.

Annual Performance-Linked Bonuses (Short-Term Incentive)

We have set up a compensation table more closely linking compensation to annual performance the higher the rank, based on the KPI of consolidated profit before tax for the fiscal year under review. Based on this table, cash compensation is paid at a certain time of each year. For senior managing executive officers, managing executive officers, and executive officers, specific amounts will be determined after taking into consideration annual performance and level of contribution to human resource development. Such compensation will not be paid to outside directors.

Restricted Stock Compensation (Medium-and Long-Term Incentive)

Fixed compensation type(RS)

Shares of the Company’s common stock are granted at a certain time each year at an amount equivalent to a base amount determined in consideration of the Company’s business performance, responsibilities of each director and executive officer, and other factors.

Variable compensation type restricted stock compensation (PSU)

Units (one unit = one share) are granted at a certain time each year at an amount equivalent to a base amount determined in consideration of the Company’s business performance, responsibilities of each director and executive officer, and other factors. After an evaluation period, shares of the Company’s common stock are granted at an amount equivalent to the number of units multiplied by a payout ratio determined in accordance with achievement levels for each performance indicator target.

<KPI for PSU in FYE March 2025>

To set KPIs for PSUs, the Company will adopt consolidated return on equity (ROE), a key financial indicator in the mid-term strategy, and total shareholder return (relative TSR, compared to the TOPIX growth rate including dividends), which contributes to improvement in corporate value in the medium to long term, as financial indicators as well as employee engagement as a non-financial indicator.

Compensation System for Directors (Representative Director, President and CEO）

*The ratio of annual performance-linked bonuses and restricted stock compensation (variable/fixed compensation types) are indexed to a basic compensation of 1.

Matters concerning the resolutions of the General Meetings of Shareholders on compensation, etc. for Directors and Audit & Supervisory Board members

By a resolution passed at the 85th Ordinary General Meeting of Shareholders, held on June 28, 2016, the maximum total amount of annual compensation, etc., for directors is 1.2 billion yen (including 200 million yen for outside directors). The number of directors was eight (including two outside directors) at the end of the meeting. By a resolution passed at the 93rd Ordinary General Meeting of Shareholders on June 19, 2024, the total amount of monetary compensation related to restricted stock units is required to be within the above maximum total and up to 200 million yen annually. The number of directors (excluding outside directors and non-resident directors) pertaining to the provisions of the said resolution was five. By a resolution passed at the 93rd Ordinary General Meeting of Shareholders, held on June 19, 2024, the maximum total amount of annual compensation, etc., for Audit & Supervisory Board members is 200 million yen. The number of Audit & Supervisory Board members was four at the end of the meeting.

Status of the activities of Executive Compensation Meeting

The Company has set up an Executive Compensation Meeting, a voluntary committee, in order to enhance the effective governance structure based on the existing organizational design (the details of its authority are described in the Policy for Determining Details of Compensation for Individual Directors 4.). To ensure fairness and transparency of the executive compensation determination process, the Executive Compensation Meeting shall, by a resolution of the Board of Directors, be structured so that the majority of its members are outside directors, and its chairman shall be appointed by a resolution of the Board of Directors.

Total Compensation for Directors and Audit & Supervisory Board Members for FYE March 2025

(Millions of yen)

*1

Figures in the above table include one outside director who resigned before the last day of the fiscal period under review. At the end of the period, there were eight directors, including three outside directors, and four Audit & Supervisory Board members, including two outside Audit & Supervisory Board members.

*2

The total amount of the above indicates the amount recorded as an expense at the end of the period and includes undetermined compensation (phantom stock granted to non-residents, PSU, etc.).

*3

The amounts of phantom stock and PSU were calculated using the closing price of the shares in the Company’s common stock on Prime Market of the Tokyo Stock Exchange on March 31, 2025. When they are granted in reality, the Company will apply the share price as of the issuance.

Matters regarding performance-linked remuneration

The table below shows the results of key performance indicators (KPIs) used to calculate the annual performance-linked bonus amounts and the number of PSUs granted corresponding to the financial results for the fiscal year under review (the calculation method is described in the Policy for Determining Details of Compensation for Individual Directors 2. (2)). The Company decides the annual performance-linked bonuses for individual directors based on the consolidated profit before tax by setting a compensation table in which the higher his/her position is, the more closely his/her compensation is linked to annual performance. In addition, in order to facilitate the achievement of the Group’s medium- and long-term strategy targets, the Company has adopted the Performance Share Units (PSU), in which the number of shares granted is linked to the degree of achievement of the targets for key financial indicator (ROE and relative TSR [compared to the TOPIX growth rate including dividends]) and non-financial indicator (employee engagement), for a portion of the restricted stock compensation to be granted as non-monetary compensation. Annual performance-linked bonuses and restricted stock compensation are not granted to outside directors in view of their roles of fulfilling monitoring and oversight functions of corporate management from an independent position.

Details of non-monetary compensation

The Company grants restricted stock units to Directors (excluding Outside Directors) for the purpose of providing them an incentive for sustained improvement of the Company’s corporate value and further value sharing with the shareholders, and provides monetary compensation for that (hereinafter, “Restricted Stock Compensation Plan”). Based on the resolution of the Board of Directors, Directors shall wholly contribute the monetary compensation claim paid as above in the form of properties contributed in kind, and shall, in return, receive shares of the Company’s common stock through issuance or disposal. In addition, for the issuance or disposal of shares of the Company’s common stock, the Company and eligible Directors shall enter into a restricted stock allotment agreement that includes provisions such as the one to restrict the transfer of the shares for the period starting from the date of allotment through the date the Director retires from the position (however, if the Director is consecutively appointed the Company’s corporate vice president after retiring from the Director’s position, the period through the date of retirement as corporate vice president).

The approval of the Board of Directors is obtained in advance where a transaction poses the risk of a conflict of interest. A report on the positions that each director has held concurrently over the past financial year is provided once a year at the April meeting of the Board of Directors (a report to confirm that there have been no improper transactions or positions held).

The Audit & Supervisory Board, as an independent organization entrusted by shareholders, is responsible for ensuring the sound and sustainable growth of SUBARU and establishing a high-quality corporate governance system that can be trusted by society by performing audits of the execution of duties by directors, passing resolutions on the contents of proposal items regarding the appointment and dismissal, or non-reappointment, of accounting auditors that are to be submitted to the General Meeting of Shareholders, and performing business audits, accounting audits, and other matters prescribed by laws and regulations.
The number of Audit & Supervisory Board members is stipulated to be up to five in the Articles of Incorporation, and as of the conclusion of the 94th Annual General Meeting of Shareholders held on June 25, 2025, the board consists of four members (including two independent outside audit & supervisory board members). The chairman is a standing audit & supervisory board members, and the board held 12 meetings in FYE March 2025.

Auditing by Audit & Supervisory Board Members

In addition to attending important meetings such as the Board of Directors, the Company’s audit & supervisory board members engage in activities that include exchanging opinions with executive officers and communicating individually with the directors and audit & supervisory board members of Group companies. Through these efforts, they gather extensive information on business execution, including the development and operational status of internal controls across the Group, as well as verify their effectiveness. Additionally, necessary advice and recommendations are provided based on the observations obtained from these audit activities.

Activities in FYE March 2025

Major Activities of the Audit & Supervisory Board Members

• Confirming management monitoring and execution

Each audit & supervisory board member attended important meetings, including those of the Board of Directors, Executive Management Board Meeting, and Risk Management and Compliance Committee. When in attendance, they monitored management decision-making processes, sought explanations as necessary (including through opportunities other than those meetings), and actively expressed their opinions.
Through exchanges of opinions with directors, executive officers, and others, as well as visits to and inspections of major business establishments and Group companies, and collaboration with the directors and corporate auditors of Group companies, the audit & supervisory board members confirmed the status of business execution, including the development and operation of the Group’s internal controls.

• Meetings with Internal Control-Related Departments

Through regular meetings with the Legal Department, Risk Management and Compliance Office, and Internal Audit Department, the audit & supervisory board members confirmed the status of risk management practices across the Group.

• Cooperation in the three-party audit system

Audit & Supervisory Board Members conducted regular reporting sessions with the Internal Audit Department and accounting auditors, facilitating information sharing and exchanges of opinions that fostered close cooperation in the three-party audit system. By implementing coordinated audit activities, they carried out mutual verification of the effectiveness of internal controls across the Group.

Audit & Supervisory Board Number of Meetings Held: 12

• Matters for resolution

Audit policy, audit plan and division of audit duties, consent to agenda items for the General Meeting of Shareholders (appointment of audit & supervisory board members), evaluation and selection/dismissal of the accounting auditors, consent to the audit fee for the accounting auditors, preparation of the audit report, etc., for the current fiscal year.

• Matters for reporting

The Audit & Supervisory Board shared reports and insights based on findings obtained from individual audit & supervisory board member activities. Additionally, the Board received reports from the responsible departments on risk management issues from a preventive audit perspective, enabling them to verify the appropriateness of management execution.

Internal Auditing

SUBARU has established an Internal Audit Department consisting of 15 members that reports directly to the President. This department evaluates the development and operational status of internal controls and the effectiveness of risk management from an independent and objective standpoint, while providing advice and proposals for improvement regarding business execution at SUBARU and its Group companies in Japan and overseas.

As part of efforts to ensure the effectiveness of internal audits, the department formulates an annual business audit plan at the beginning of each fiscal year, taking into account the Group’s overall risk and internal control status, and conducts audits in a planned manner. Audit reports on business execution are presented directly to the President at a monthly reporting meeting and distributed to all directors, corporate auditors, and relevant departments. In addition, reports are submitted semiannually to the Board of Directors and quarterly to a joint meeting composed of all executive officers.

The Internal Audit Department and corporate auditors work closely together to strengthen audit functions, as described in the “Collaboration within the Three-Tier Audit System” section of the Major Activities of the Audit & Supervisory Board Members of the Activities in FYE March 2025.
The department also shares information with accounting auditors on a quarterly basis regarding audit plans and results to enhance audit effectiveness. Furthermore, the department regularly exchanges information with internal audit departments of Group companies to promote collaboration. The Internal Audit Department conducts annual self-assessments of its activities and undergoes periodic evaluations by external experts to ensure that audit operations are being appropriately carried out.

Management System

With the aim of increasing the effectiveness of internal controls and risk management, the Internal Audit Department was made independent of the Risk Management Group (overseen by the Chief Risk Management Officer (CRMO)) to ensure a higher level of independence of internal audit units in the organization and to enhance the effectiveness of internal controls.

Internal Control System

In accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, SUBARU's Board of Directors has adopted a basic policy on putting in place systems that ensure that the performance of duties by directors is in conformity with laws and regulations and with the Articles of Incorporation, and other systems prescribed in the ordinance of the Ministry of Justice as being necessary to ensure the appropriate operations of the Company and the corporate group consisting of the Company and its subsidiaries. The Board of Directors maintains and operates this basic policy, reviewing it as needed.

Regarding internal control reporting systems pursuant to the Financial Instruments and Exchange Act, the evaluation of the internal control system related to financial reporting is dated the final day of the consolidated accounting period and is conducted in accordance with generally accepted assessment standards for internal control over financial reporting.
The President and Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) evaluated the status of the development of the internal control system related to financial reporting as of March 31, 2025 and affirmed that it has been established properly and functions effectively, and issued an internal control report audited by the accounting auditors to that effect.

• Annual Securities Report and Internal Control Report for FYE March 2025 (Japanese version only)
• Financial Report for the Fiscal Year Ended March 31, 2025

The SUBARU Group has established a Group-wide governance stance that contributes to the sound business operations of the Group's global companies in order to maintain and enhance brand value and enhance the overall strength of the Group in response to social demands, including for sound corporate governance.

Group Companies (Affiliates in Japan, Excluding SUBARU Dealerships)

In the SUBARU Group, the Business Administration Department of SUBARU manages each Group company and their businesses to promote more unified activities. In addition, we have created a system in which SUBARU's corporate departments support these activities, thereby enhancing the effectiveness of Group governance.

1. Accelerating the group collaboration system

The efforts of the Group's collaboration system that started in FYE March 2022 have penetrated the Group, and communication between the Business Administration Department and Group companies has gradually deepened. SUBARU's corporate departments have established a new Group Review Meeting for collaborative discussion of major issues with each Group company to enhance the effectiveness of governance. By accelerating these efforts, we are working to further enhance the quality of Group governance.

■ Deepening communication with the Business Administration Department

We have introduced and implemented a new tool that allows Group companies and the Business Administration Department to review the goals and outcomes of the year's business activities and governance initiatives throughout the year. Through this, we are not only enhancing communication between both parties but also elevating the quality of governance.

■ Enhancing support for Group companies

Relevant corporate departments are working together to evaluate and implement concrete support measures for Group companies as appropriate. As an example, SUBARU is continuing to explore and implement corporate-related measures, including activities in which staff from SUBARU's finance and administration departments share information and provide support in financial and accounting domains to each company in addition to enhancing education programs for Group employees.

2. Initiatives to enhance the effectiveness of governance

As basic governance activities, we continue to promote the development of forums for information sharing and exchange of opinions with Group companies and the creation of educational opportunities. As part of this, we share information on governance-related themes at meetings of Group company presidents, respond quickly to various issues at the Management Department Steering Committee, and regularly discuss corporate issues at the Group Review Meeting, which was launched in FYE March 2024. In addition, we are also focusing on employee education as part of efforts to enhance the quality of Group human resources.
Through these efforts, we are working to further improve the effectiveness of Group governance.

Initiatives in the SUBARU Group

• Held meetings of Group company presidents (three meetings in June, November and March)
• Held Management Department Steering Committee meetings (six meetings from April and then every other month, covering 26 topics)
• Held Group Review Meetings to foster collaborative discussions between SUBARU and its Group companies regarding key corporate challenges (two in FYE March 2024)
• Information sharing through a dedicated portal site for Group companies
• Held workshops for newly appointed executives (once in April)
• Staff from finance and administration departments share information and provide support to individual companies
• Extended SUBARU's educational framework to Group company employees
• Dispatched personnel from the Business Administration Department of SUBARU to play a part in the management of Group companies by serving as part-time directors
• Enhanced the quality of auditing through appropriate assignment of standing corporate auditors (14, March 31, 2023)

Dealerships

Enhancing governance at SUBARU dealerships involves the Japan Sales & Marketing Division assuming the responsibilities of the Business Administration Department. This enables close communication between SUBARU and its dealerships, advancing initiatives that contribute to the Group's sustainable growth and medium- to long-term enhancement of corporate value.

Initiatives for SUBARU dealerships

• Established the Risk Management and Compliance Committee
• Developed regulations and established and enhanced operation of an internal control system for audits, etc., conducted by the auditing departments of dealerships
• Held General Meeting of Shareholders and Board of Directors' meetings
• Enhanced the quality of auditing through appropriate assignment of full-time corporate auditors (introduced full-time corporate auditors at 10 companies)

Note: Parentheses indicate information as of April 2024.

Efforts to deepen communication between SUBARU and its dealerships

• Held monthly Leadership Meetings with 10 key dealerships we have invested in
• Held Specialist Committee meetings in four areas (sales, service, pre-owned vehicles, and IT) (at least once every six months)
• Meetings of the Internal Audit Department Liaison Committee (held twice a year)
• Implemented dealership audits through SUBARU's Audit Department
• Dispatched part-time directors from SUBARU to 10 dealerships
• Implemented training for newly appointed executives at SUBARU dealerships
• Established and enhanced operation of an internal control system for audits, etc. based on J-SOX, conducted by the auditing departments of dealerships
• Held General Meeting of Shareholders and Board of Directors' meetings
• Enhanced the quality of auditing through appropriate assignment of full-time corporate auditors (introduced full-time corporate auditors at 10 companies)

Note: Parentheses indicate information as of April 2024.

(1) Policy for cross-shareholding
SUBARU holds listed stocks as cross-shareholdings and engages in dialogues with the companies in question. Each year, SUBARU's Board of Directors quantitatively measures and compares benefits from holding, using dividend yield, and the capital cost involved, using weighted average cost of capital (WACC), in order to verify each. The Company will maintain these holdings only if it deems, based on the results of this verification, that the shares will contribute to its medium- to long-term management and business strategies in a qualitative manner.

(2) Verification details for cross-shareholding
Based on the above policy, SUBARU has steadily reduced the number of listed stocks held as cross-shareholding. As a result, 60 issues held at the end of March 2015 decreased to 2 issues at the end of March 2021. During the fiscal year under review, the number of issues the Company holds as cross-shareholding increased by one to three issues, as a company that was unlisted listed its shares on the Growth Market of Tokyo Stock Exchange on March 27, 2025. At this point, the Company judges that retaining cross-shareholdings in the three issues for the reason described in below, and it will continue to hold discussions with these companies at least once a year and the Board of Directors will evaluate and examine the cross-shareholdings every year and judge whether or not to retain them.

As of March 31, 2025

(3) Criteria for exercising voting rights for cross-shareholding
With regard to the exercise of voting rights for listed stocks held as cross-shareholding, the Board of Directors deliberates on and determines the criteria for exercise with evaluation items such as whether the company is consistently exhibiting poor performance, whether a sufficient number of independent outside directors are in place and if management is supervised appropriately, and whether there are any corporate governance issues present. Although these are our general principles, we hold dialogues at least once a year with companies whose stock we hold to avoid making blanket decisions. Accordingly, we exercise our voting rights appropriately in light of the performance, management policies, and medium- to long-term management plans of the companies in question, as well as from the perspectives of corporate value enhancement, corporate governance, and social responsibility.
In addition, we will continue to verify whether or not our criteria for exercise of voting rights warrant review.