Remuneration

Basic Policy for Determining Remuneration Paid to Directors

The Company formulates the basic policy for determining the remuneration for Directors as follows:

1) Acquire and develop talented human resources
2) Motivate them to continuously improve corporate performance and value
3) Maintain a high level of fairness and rationality

The remuneration system for Directors (excluding Directors who are Audit & Supervisory Committee Members) consists of the base remuneration (fixed amount) and performance-based remuneration. However, the remuneration for Outside Directors and Directors who are Audit and Supervisory Committee Members shall consist of only base remuneration. The base remuneration is a monthly fixed remuneration based on position and responsibility, and the specific amount is determined by the Board of Directors based on comprehensive consideration of remuneration levels benchmarked to companies of similar business size and in related industries and business categories to the Company. The maximum amount of performance-based remuneration is 100% of the base remuneration, of which 40% is short-term performance-based remuneration (cash), 20% is medium-term performance-based remuneration (stock acquisition rights), and 40% is long-term performance-based remuneration (stock acquisition rights).

Performance-based remuneration shall be determined based on the Company's performance in the previous fiscal year. When setting performance indicators for evaluating the company's performance, we consider the following basic principles: (1) the indicators should motivate the sustainable improvement of the company's performance and corporate value, and should be appropriate and easy to understand from an external perspective in terms of measuring the performance responsibilities of Directors; (2) the indicators should be appropriate for ensuring business revitalization and sustainable growth; and (3) the indicators should be applicable to the specific activities of Directors. As a result, operating profit, free cash flow, and ROA are set as indicators. The evaluation weighting for each indicator is set at 40% for consolidated operating income, 40% for free cash flow, and 20% for ROA. Free cash flow is calculated by "EBITDA-CAPEX + Changes in Working Capital," and ROA is calculated by "profit before deducting profit attributable to non-controlling interests/total assets at the end of the fiscal year."

The remuneration for each Director (excluding Directors who are Audit and Supervisory Committee Members) is determined by the Board of Directors after consulting with the Remuneration Advisory Committee and receiving a report from the Committee. The amount of remuneration for Directors who are Audit and Supervisory Committee Members is determined through discussions among the Directors who are Audit and Supervisory Committee Members, considering the responsibilities of each member of the Audit and Supervisory Committee, within the maximum amount of total remuneration determined by the General Meeting of Shareholders. The remuneration of Directors who are Audit and Supervisory Committee Members consists solely of fixed remuneration.

Remuneration for Directors

In the Business Report, the total amount and total amount by type of remuneration of Directors are disclosed, and in the Annual Securities Report, in addition to the information disclosed in the Business Report, individual disclosure is made for persons whose total amount of remuneration is 100 million yen or more.
The Annual Securities Reports and the Business Reports are available on our website.

Remuneration for Directors (excluding Directors who are Audit & Supervisory Committee Members) *Number of Directors: 4
1. Total amount of remuneration: 87 million yen
2. Fixed remuneration (cash): 84 million yen
3. Performance-based remuneration: 3 million yen
1) Short-term performance-based remuneration (cash): 1 million yen
2) Medium-term performance-based remuneration (share acquisition rights): 1 Million JPY
3) Long-term performance-based remuneration (share acquisition rights): 1 Million JPY

Remuneration for Directors who are Audit & Supervisory Committee Members *Number of Directors: 4
1. Total amount of remuneration: 43 million yen
Remuneration for Directors who are Audit & Supervisory Committee Members consists solely of fixed remuneration.

Existence of persons whose total amount of remuneration is 100 million yen or more
There is no Director whose total amount of remuneration for the previous fiscal year was 100 million yen or more.

Notes:

• As of the end of the current fiscal year there are three Directors (excluding Directors who are Audit & Supervisory Committee Members), one of whom is an Outside Director, and four Directors who are Audit & Supervisory Committee Members.
• The maximum amount of remuneration for Directors (excluding Directors who are Audit & Supervisory Committee Members) approved by the General Meeting of Shareholders is as follows: fixed remuneration of 200 million yen (of which 30 million yen is for Outside Directors), short-term performance-based remuneration of 80 million yen, medium-term performance-based remuneration of 40 million yen, and long-term performance-based remuneration of 80 million yen; and the maximum amount of remuneration for Directors who are Audit & Supervisory Committee Members is 100 million yen.