Ensuring Management Transparency

The Company has established the Nomination Committee and the Compensation Committee as voluntary advisory bodies to the Board of Directors. The Nomination Committee is responsible for matters related to the nomination of Directors and Executive Officers, while the Compensation Committee handles matters related to the compensation of Directors. These committees are designed to enhance fairness, objectivity, and transparency in the evaluation and decision-making processes, thereby strengthening the Company's corporate governance framework.
Each committee consists of 3 or more members, with a majority being Independent Outside Directors. The chairperson of each committee is elected from among the Independent Outside Directors by resolution of the Board of Directors. The matters deliberated and reported by each committee in response to consultations from the Board of Directors are as follows;

Nomination Committee

• - Nomination and dismissal of Directors
• - Appointment and removal of Representative Directors
• - Other matters referred by the Board of Directors

Compensation Committee

• - Compensation of Directors and Executive Officers
• - Other matters referred by the Board of Directors

The Board of Directors decides on the selection and dismissal of senior management and the nomination of candidates for Directors (excluding Directors who are members of the Audit and Supervisory Committee). The Company takes into consideration such factors as rapid decision-making in response to the rapidly changing business environment and appropriate risk management and supervision of business execution and comprehensively considering the abilities, experience, and personality of the candidates from the perspective of having the right person in the right place.
Information on appointments and dismissals of members of senior management is disclosed in an appropriate manner in accordance with laws and regulations. Concerning the selection of candidates for Executive Directors, in addition to the above, the Nomination and Compensation Committee, an advisory body, deliberates and recommends prior to the resolution of the Board of Directors. With regard to the appointment of candidates for Directors who are members of the Audit and Supervisory Committee is decided by the Board of Directors after deliberation by the Nomination and Compensation Committee and consultation with the Audit and Supervisory Committee to ensure a diversity of viewpoints based on personalities, insights, and backgrounds. Effective October 1, 2025, the Company restructured and clarified the functions of its Nomination and Compensation Committee by establishing two separate committees: the Nomination Committee and the Compensation Committee.

The Board of Directors shall evaluate the effectiveness of the Board of Directors at least once a year. In the fiscal year ended June, 2025, the Company assessed the effectiveness of the Board of Directors through the following process. The results showed the members of the Board of Directors play an effective role in improving the corporate value over the medium and long term by making appropriate and prompt decisions through active discussions based on the management philosophy, and by exercising strict supervisory functions including monitoring of the internal control system. While the Company's Board of Directors has been positively evaluated for its balanced composition, open discussions, and active involvement of Independent Outside Directors, several areas for improvement have been identified. These include the need to standardize the process for discussing future leadership development, to strengthen medium- to long-term strategic discussions, and to further enhance the governance framework in line with the Company's expanding business scale. In the preparation, collection, and partial analysis of the questionnaire, we used an external organization to increase the transparency of the evaluation and ensure its effectiveness.

• - Balanced composition of the Board with diverse skills, knowledge, and experience
• - Environment that enables Independent Outside Directors to fully exercise their roles
• - Framework that facilitates open and active discussions and enables prompt decision-making

• - Further enhancement of discussions on the medium- to long-term management strategies and talent development
• - Enhancement of the governance framework in response to the Company's expanding business scale

The Company appoints Directors that possess the prerequisite insight and experience pertaining to legal affairs, finance, accounting, and a wide variety of other fields and that are thereby able to effectively fulfill their roles and responsibilities. In addition, frameworks are in place to ensure that information is reported and supplied to Directors as necessary after appointment, and Directors are provided with opportunities to receive explanations directly from lawyers, accountants, and other specialists. We also hold training sessions as needed and appropriate.