Purpose

We are addressing social issues based on this Purpose. We believe that contributing to the realization of a safe, prosperous, and sustainable society is our raison d'être.

In the 21st century, the COVID-19 pandemic has revealed that information and communication technology and digital technology are essential for the rapid transformation and sustainability of social life and business activities. We recognize that these technologies will continue to transform our lives and the way we do business at a faster pace than ever before.

In this environment, we believe that dedicating ourselves to the abovementioned management philosophy and fulfilling our commitments will lead to the enhancement of our medium- to long-term corporate value and ultimately meet the expectations of our shareholders.

Based on the above beliefs and recognitions, we view our approach to management as follows:

The Board of Directors shall focus on supervising and advising the Company on the above initiatives from the perspectives of shareholders and society. Since the business environment in which our Company operates is changing significantly and rapidly, we shall delegate executive authority for business execution to the executive officers, within the limits permitted by law and our Articles of Incorporation.

To fulfill the above functions, the majority of the Board of Directors shall be made up of outside directors, mainly independent outside directors. In addition, key executive officers, including the president, shall concurrently serve as directors, thereby ensuring that the Board of Directors' supervision, advice, and intentions are appropriately reflected in business execution.

As an advisory body to the Board of Directors, we have established the Nomination and Compensation Committee, primarily composed of independent outside directors, to ensure objectivity and transparency in the appointment of officers (candidates) and the determination of executive compensation.

Alongside the supervision of business execution by the Board of Directors, the Company shall establish a Board of Corporate Auditors consisting of individual independent auditors who are completely uninvolved in business decision-making and execution. We believe that the supervision by these independent auditors, together with the daily oversight conducted by full-time auditors, will enhance the objectivity and comprehensiveness of supervision within our Company.

1. a) Systems to ensure that the execution of duties by directors and employees complies with laws and regulations and the Articles of Incorporation
   1. 1)Directors shall comply with the TSUZUKI Group Code of Conduct, which was formulated for the purpose of establishing corporate ethics and ensuring compliance with laws, regulations, the Articles of Incorporation, and internal regulations, and shall work to promote compliance throughout the Group. In addition, in order to ensure the thoroughness of this system, we will operate the Risk and Compliance Committee, which deliberates on important compliance issues and works to maintain and improve the system. Furthermore, we have established an internal reporting system to ensure the early detection and correction of violations of laws and regulations and other improper acts within the Group companies.
   2. 2)In the event that a director discovers or receives a report of a serious violation of laws, regulations, the Articles of Incorporation, or internal regulations, the director shall immediately report the matter to the corporate auditors and also report the matter to the Board of Directors without delay.
2. b) Systems for the storage and management of information related to the execution of duties by directors. Information related to the execution of duties by directors shall be appropriately stored and managed in accordance with laws and regulations and the Document Management Regulations, and we will establish a system to enable prompt access to such information when requested by directors, corporate auditors, independent auditors, etc.
3. c) Rules and other systems for managing the risk of loss
   1. 1)We have established the Risk Management Regulations as the basis of our risk management system, and the Risk and Compliance Committee will manage and promote this system.
   2. 2)In the event of an unforeseen event, the Risk and Compliance Committee will strive to properly identify the relevant risk and designate a person responsible for the management of each risk, and establish a system to promptly respond and prevent the spread of damage.
   3. 3)Directors and employees shall report any problems, accidents, etc. to the Risk and Compliance Promotion Committee, which is an advisory body to the Risk and Compliance Committee, through the escalation route.
4. d) Systems to ensure that the execution of duties by directors is carried out efficiently
   1. 1)As the foundation of a system to ensure the efficient execution of duties by directors, Board of Directors meetings shall be held on a regular basis once a month, and extraordinary meetings shall be held as necessary. In addition, important management matters are discussed at the Management Committee, an advisory body to the President and Representative Director, and decided by the Board of Directors.
   2. 2)With respect to business execution based on the decisions of the Board of Directors, the Division of Duties Regulations and the Administrative Authorities Regulations stipulate the responsible persons and their responsibilities, as well as the details of execution procedures.
5. e) Systems to ensure the appropriateness of operations of the corporate group consisting of the Company and its subsidiaries
   1. 1)In order to ensure the appropriateness of the operations of each Group company (consolidated subsidiaries, hereinafter the same), the TSUZUKI Group Code of Conduct shall be applied to the Company and each Group company. For internal regulations within the scope specified by the Company, such as the TSUZUKI Group Code of Conduct, the Compliance Regulations, the Risk Management Regulations, and the TSUZUKI Group Helpline Regulations, efforts shall be made to standardize the content across the Company and its Group companies. For other internal regulations, each Group company shall establish their own internal regulations based on the Code of Conduct.
   2. 2)Regarding the business status reports, etc. of Group companies, requests for approval and reports to the Company shall be made in accordance with the Agreement Concerning Group Management concluded between each Group company and the Company, under the Affiliated Company Management Regulations and the Affiliated Company Operating Standards. In addition, monthly affiliated company meetings and regular liaison meetings of affiliated companies will be held by the managers of the Company and Group companies to ensure that operations are managed appropriately.
   3. 3)As the foundation of a system to ensure the efficient execution of duties by directors, Board of Directors meetings shall be held on a regular basis in accordance with the Board of Directors regulations of each group company, and extraordinary meetings shall be held as necessary. With respect to business execution based on the decisions of the Board of Directors of each Group company, the internal regulations established by each Group company stipulate the responsible persons and their responsibilities, as well as the details of execution procedures.
   4. 4)Based on the TSUZUKI Group Helpline Regulations, we apply the internal reporting system to the directors and employees of each Group company to ensure the early detection and correction of violations of laws and regulations and other improper acts. Also in accordance with the TSUZUKI Group Helpline Regulations, whistleblowers will not be treated unfavorably in any way.
6. f) Systems to ensure the reliability of financial reporting
   1. 1)To ensure the reliability of the Group's financial reporting, we will establish an effective and appropriate internal control system based on the Financial Instruments and Exchange Act.
   2. 2)We will continuously evaluate the status of the development and operation of internal control over financial reporting and take necessary corrective measures to build an effective system.
7. g) Matters concerning the system for employees to assist in the duties of corporate auditors and the independence of such employees from directors
   1. 1)Corporate auditors may request pre-determined personnel of the Audit Office to assist them in their auditing duties, and such personnel shall follow the direction and orders of the corporate auditors.
   2. 2)Personnel changes, evaluations, and disciplinary actions for the aforementioned assisting personnel must be approved by the Board of Corporate Auditors.
8. h) Systems for directors and employees to report to corporate auditors, other systems for reporting to corporate auditors, and systems to ensure that audits by corporate auditors are conducted effectively.
   1. 1)In the event that any director or employee discovers any fact that may cause significant loss or damage to the operations or business results of the Company or any Group company, or receives any such report, he or she shall immediately report such fact to the corporate auditors. Notwithstanding the aforementioned, the corporate auditors may request reports from directors and employees as necessary. In addition, the person who provided such report shall not be treated disadvantageously for providing such report.
   2. 2)When a corporate auditor requests payment of reasonable expenses for the execution of their duties, the Company shall comply with such request.
   3. 3)The Board of Corporate Auditors will hold regular meetings to exchange opinions with the President and Representative Director, the Audit Office, and independent auditors.
   4. 4)The corporate auditors will work in close coordination with the corporate auditors and others of each Group company to ensure efficient audits.