Fuji : 2024.7.1 Corporate Governance Report

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE

FUJI CORPORATION

Last updated: July 1, 2024

FUJI CORPORATION

Representative Director, President & CEO: Joji Isozumi

Contact: Board Member, Senior Managing Executive Officer; Corporate Division General Manager Junichi Kano Securities code: 6134 https://www.fuji.co.jp/en

The corporate governance of Fuji Corporation (hereafter the "Company") is described below.

I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

1. Basic Views

The Company and its subsidiaries (hereafter the "Group") view working to create higher corporate value for shareholders, customers, bu siness partners, and employees to be most important. Accordingly, the Group is working to establish and enhance fair and transparent m anagement systems, an organizational structure that can respond to changes in the management environment promptly and accurately, and to strengthen its risk management and compliance system.

1. We facilitate developing an environment that secures the rights and equal treatment of shareholders
2. We have committed ourselves to appropriate cooperation with stakeholders other than shareholders
3. We endeavor to ensure appropriate information disclosure and transparency
4. We ensure appropriate implementation to meet the responsibilities of the board
5. We ensure constructive dialogue with shareholders

Reasons for Non-compliance with the Principles of the Corporate Governance Code

There are no matters to be stated in this column.

Disclosure Based on the Principles of the Corporate Governance Code

Principle 1.4 Cross-Shareholdings

1. Policies for cross-shareholdings

Fuji holds shares of other companies for seeking to establish and strengthen business relationships that contribute towards the expansio n and development of business as well as stability and efficiency. It is our policy to make a comprehensive judgment on whether the hold ing of individual stocks is rational and appropriate while assessing the level of the Fuji's cost in terms of capital and the level of ROE of th e target companies from the perspective of capital efficiency. Every year, the board examines and confirms the appropriateness of holdin g such stocks from companies, including their relationship with Fuji's business and their contribution to the future direction of Fuji's busin ess.

In May 2024, we released our medium-term management plan for the period from fiscal 2025 to 2027, in which appropriate allocation of managerial resources is highlighted. We will generate 7 billion yen through measures such as reducing cross-shareholdings and allocate it to growth investments and returns to shareholders.

2. Basic views on exercise of voting rights

In exercising the voting rights as to cross-shareholdings, the Company does not make decisions in accordance with uniform standards. R ather, the Company assesses whether its decisions on the agenda would deteriorate the delivery of potential values to shareholders. Tak ing into account the business conditions of the issuer companies and other matters in the circumstances, the Company makes approval or disapproval decisions and exercises the vote rights.

Principle 1.7 Related Party Transactions

With respect to engagement in related party transactions, the board of the Company shall proceed with appropriate procedures in propor tional to the content and characteristics of the transaction and disclose the information in securities reports among other relevant docume nts. Also, the existence of related parties and the presence of transactions between the Company and its related parties, as well as the c ontent and other details of the transactions are reported to the board prior to the information disclosure, and the board assess the transa ctions in accordance with the criteria for the importance of transactions addressed in "Guidance on Accounting Standard for Related Part y Disclosures".

Principle 2.4 Ensuring Diversity, Including Active Participation of Women Supplementary principle 2.4.1 Ensuring diversity when appointing core human resources

We aim to become an organization where diverse talents with various perspectives and ideas can fully show their individuality and abilitie s and play an active role. We are convinced that valuing the new ideas generated by employees with diverse values and respecting the i ndividuality of each employee will lead to further innovation. That's why we are working to create workplaces and corporate culture in whi ch a diverse range of talents can play an active role independent of gender, age, nationality, disability, background, and perspectives.

To date, we have been proactive in recruiting female engineers, mid-career hires, and foreign-born talent in line with this basic policy. In order to promote a work environment that empowers diverse talent, we have set a target for the number of female managers, and our pr oject towards women empowerment is underway, focusing on programs for ensuring equal opportunities, gender inclusive recruitment, a nd transformative carrier paths. Our focus is also on creating a workplace to empower mid-career hires so that they can demonstrate thei r skills at full capacity. A certain number of mid-career hires have developed their careers and have been placed at management position s. We will continue our efforts to engage ourselves in recruitment and allocation of diverse talent; individuals who can shoulder our mediu m- to long-term management strategies, regardless of gender and national origin.

As of the end of March 2024, female managers account for 3.4% of total management staff at Fuji, while managers who are foreign-born and mid-career hires account for 0.6% and 22.9%, respectively. Toward ensuring diverse talent for our core human resources, core hum

an capital candidates who have qualified skills and experiences are offered management training as part of our rank-based training progr ams, building workplaces in which diverse talent may demonstrate their abilities at full capacity. We have set a target of increasing femal e managers to 5.0%, and also increasing foreign-born and mid-career hire managers to more than the current numbers by 2026, committ ing ourselves to recruitment and development efforts for diverse talent as well as improvements within the workplace.

Further information on diversity is available at our website (https://www.fuji.co.jp/en/sustainability/diversity).

Principle 2.6 Roles of Corporate Pension Funds as Asset Owners Fuji has established an asset management committee, which consists of members with expertise in asset management, under the supervision of the CFO as the pension fund manager. In order to maintain so und pension plans and achieve the target of necessary pension returns, the committee has established basic policies for managing contri butions, as well as establishing and reviewing the operation guidelines and policy asset mix. The committee discusses and makes decisi ons on the selection of financial intermediaries and instruments, taking into account the knowledge of external advisors, and also monitor s the finances on a regular basis.

Principle 3.1 Full Disclosure

1. Business principles, business strategies, and business plans

Fuji has set forth and disclosed the basic management philosophy as follows. These are also available in the securities reports, and on F uji's website (https://www.fuji.co.jp/en/sustainability/philosophy).

1. All operations are undertaken in compliance with the applicable laws, social norms, Articles of Incorporation, and office regulations.
2. By continuously developing technology and improving quality, we provide products and services that contribute to the creation of a m ore convenient and comfortable society.
3. We have created a friendly work environment that respects individuals and fosters strong teamwork.
4. We seek to develop new business fields for the future through global and innovative management.
5. We carry out environmentally-conscious corporate activities, recognizing that the protection of the Earth's environment is an issue for all of humanity.
6. We stand for the eradication of child employment and forced labor, respect and embrace diversity, and do not tolerate discrimination of any kind.
   Also, as an embodiment of the business strategies and business plans, Fuji has disclosed the mid-term business plan for fiscal 2025 to 2 027 on the Fuji corporate website (https://www.fuji.co.jp/en/ir/mtp/).
   2. Basic views on corporate governance
   Details are provided "1. Basic Views" in the beginning of this report.
   3. Remuneration of the senior management and directors
   The relevant information is stated under [Director Remuneration] in [1. Organizational Composition and Operation] from [II. Business Ma nagement Organization and Other Corporate Governance Systems regarding Decision-Making, Execution of Business, and Oversight in Management] in this report.
   4. Appointment/dismissal of the senior management and the nomination of directors and auditor candidates
   In order to separate the decision making process for the management and the execution function for businesses, thereby enhancing the speed for the management and to clarify responsibilities, Fuji introduced the executive officer system which in addition to delegating auth orities to executive officers, makes them responsible for execution of business operations.
   On the selection of executive officers, the executive officers are determined upon approval by the board after the nomination and compe nsation advisory committee deliberates and reports to the board.
   Explanations with respect to the appointment and nomination of board candidates and auditor candidates for the Company are provided with each individual's biography in the notice for the general shareholders meeting. Additionally, the reason for appointment of each indiv idual is also written for outside director candidates and outside auditor candidates.
   In addition, the term of office for directors is set at one year in the Articles of Incorporation in order to emphasize the management respo nsibility of directors and to consult with shareholders annually on their confidence as directors. The Articles of Incorporation set forth that the number of directors shall not exceed ten (10) in order to ensure prompt and efficient operation of the Board of Directors.

1. Appointment of the senior management and director candidates
   In the appointment and dismissal of the senior management and the nomination of director candidates, the Company comprehensively c onsiders the right persons to be in the right positions, taking into account the balance between sound and prompt decision-making, appro priate risk management, monitoring of business execution, and the ability to cover all company functions and business divisions.
2. Appointment of auditor candidates
   In nominating auditor candidates, the Company comprehensively considers the right persons for the right positions, while ensuring a bala nce of knowledge of finance and accounting, knowledge of our business fields, and diverse perspectives on corporate management.
3. Report by the advisory committee
   The nomination and compensation advisory committee was established in April 2021 as an advisory body for the board in order to enhan ce the fairness, transparency, and objectivity of procedures related to the nomination and remuneration of directors and auditors, and to enhance Fuji's corporate governance. The committee deliberates and reports on the nomination and remuneration of directors, executive officers, and auditors.

Supplementary principle 3.1.3 Initiatives on sustainability

Fuji's initiatives on sustainability are disclosed on its website (https://www.fuji.co.jp/en/sustainability/).

Investments in Human Capital: We believe that our staff are the driving force behind our growth as a company, and we will provide oppor tunities to our staff so that they may reach their true potential. In particular, we see developing leaders, engineers, and global talent as m ost important in developing human capital for the growth of our businesses. We have engaged in a variety of learning and development p rograms including but not limited to development programs for managers and leader-class employees, engineering training (Sokaijyuku) for graduate-hire engineers, upskilling programs for junior and mid-level engineers, and overseas study programs and online English trai ning. While continuing to expand the content of these programs, we will focus on fostering development of digital transformation talent th at we see essential for sustainable business development in the future as well as supporting career development of individual employees

.

Investments in Intellectual Property

Fuji implements intellectual property activities that stand on three pillars: business strategy, technology strategy, and intellectual property strategy, and actively applies for patents both in Japan and overseas.

This led to registration of 767 patents for the fiscal year that ended March 2024. Going forward, we will work to build a higher quality pate nt portfolio, reduce intellectual property risks associated with counterfeits, and continue to implement intellectual property strategies that will strengthen our competitiveness.

Disclosure Based on the TCFD Recommendations

We consider that one of the most important issues in building a sustainable society is to respond to climate change by reducing CO2 emi ssions, and as part of mid-term environmental goals, Fuji has set a target to achieve a 46% reduction of CO2 emissions by the end of fis cal 2031, compared to fiscal 2014. Long-term targets for this have been established in fiscal 2024 with the view to become carbon neutra l by 2050.

Fuji Group long-term targets

• Scope 1, 2: Challenge to become carbon neutral by 2050
• Scope 3: Reduce CO2 emissions for net sales per unit by 80% by 2050 (compared to fiscal 2022)

We are collecting and analyzing the necessary data on the impact of climate change-related risks and earning opportunities in our busine ss activities and profits and are disclosing this information on our website (https://www.fuji.co.jp/en/sustainability/environment).

Principle 4.1 Roles and Responsibilities of the Board (1)

Supplementary Principle 4.1.1 The scope and content of the matters delegated to the management

The board of the Company makes decisions on business execution and other matters such as basic management policies, which are co nsidered to be matters of exclusive decision-making by the board under laws and regulations. In order to separate the decision making p rocess for the management and the execution function for businesses, thereby enhancing the speed for the management and to clarify r esponsibilities, the Company introduced the executive officer system which in addition to delegating authorities to executive officers, mak es them responsible for execution of business operations. They report on the execution of business and determine policies in regular and extraordinary general meetings.

Principle 4.9 Independence Standards for Independent Directors

In appointment of independent director candidates, the Company places importance on their high level of expertise and extensive experi ence in providing frank and constructive advice as well as oversight over the Company's management, in addition to the independence c riteria set by the Companies Act, the Tokyo Stock Exchange, and the Company.

Principle 4.10 Use of Optional Approach Supplementary Principles

4.10.1 Establishing an independent nomination committee and remuneration committee

The nomination and compensation advisory committee was established in order to enhance the fairness, transparency, and objectivity of procedures related to the nomination and remuneration of directors, executive officers, and auditors, and to enhance Fuji's corporate gov ernance. The committee consists of at least three directors of whom the majority are independent outside directors to ensure independen ce.

It deliberates on the following matters and reports to the board.

1. Policies on the composition of the board
2. Matters concerning the appointment and removal of directors, executive officers, and auditors
3. Standards of appointing independent outside directors (independence standards, period of service, qualification, and other conditions
   )
4. Matters concerning the selection and removal of representative directors
5. Matters concerning the selection and removal of senior directors
6. Remuneration system for directors, executive officers, and auditors, policies for determining remuneration and details of remuneration on individual bases
7. Matters concerning the establishment and operation of succession plans
8. Other matters deemed necessary by the board

Principle 4.11 Preconditions for Board and Auditor Board Effectiveness

Supplementary Principle 4.11.1 Balance between knowledge, experience, and skills of the board, as well as diversity and appropriate siz e of the board

In order to seek for sustainable growth and the increase of corporate value over the mid- to long-term, the board of the Company strives t o ensure that decisions are made accurately, promptly, and fairly. In order to achieve this, the board of the Company has appointed a nu mber of persons with a high level of expertise both within and outside the industry as outside directors. It strives to ensure the appropriat e balance on diversity and between knowledge, experience, and skills of the board as a whole. Our articles of incorporation sets the num ber of directors to be up to ten persons to ensure that decisions are made in a prompt and efficient manner.

Fuji has disclosed the skills matrix of the directors on the website (https://www.fuji.co.jp/en/sustainability/governance).

Supplementary principle 4.11.2 Directors and auditors also serving as different positions

The Company confirms whether boards and auditors serve at other companies every April and disclose the information in securities repo rts.

Supplementary principle 4.11.3 Regarding the evaluation of the effectiveness of the Board of Directors

A survey to assess the effectiveness of the Board of Directors was administered to all Board Members and Audit & Supervisory Board M embers in April 2024.

The questions in the survey are reviewed annually. Questions covered matters related to sustainability, including addressing environmen tal problems caused by climate change and respect for human rights.

This year, a total of 20 questions in five categories were evaluated on a 5-point scale. This survey was designed so that entry was mand atory, with free entry sections for each category.

1. Composition and management of the board
2. Management and business strategies
3. Performance monitoring and management evaluation and compensation
4. Business ethics and risk management
5. Dialogue with shareholders

The analysis and evaluation from the surveys concluded that the composition and operation of the Board of Directions, corporate ethics, and risk management are effective, while monitoring of business performance needs to be sought more deeply. Based on this results, w e will strive to further enhance the effectiveness of the Board of Directors by deepening discussions on improving profitability within our e ntire Group, not within Fuji alone.

Principle 4.14 Director and Auditor Training

Supplementary principle 4.14.2 Training for directors and auditors

The Company provides opportunities to its newly appointed directors to attend courses held by external organizations on rights and dutie s in accordance with the relevant laws and regulations. In addition, by utilizing courses held by external organizations as appropriate, the

Company arranges opportunities for its directors to takes courses and other means of study for the leadership and management skills re quired for senior management. Auditors are given study opportunities including courses held by the Japan Audit & Supervisory Board Me mbers Association. Fuji also provides training on products, market trends, and other topics to help outside directors deepen their underst anding of Fuji. In addition, important issues are discussed with those in charge, including the executive officer in charge.

Principle 5.1 Policy for Constructive Dialogue with Shareholders

The Company has established a point of contact for dialogue with shareholders, where the representative director, directors in charge, a nd other representatives are actively engaged in dialogue. The Company strives to achieve constructive dialogue by developing IR activit ies that emphasize fairness, accuracy, and continuity, and serve good two-way communication regarding business strategies, divisional strategies, financial information, and other matters.

1. Quarterly financial results briefings are basically provided by the representative director and executive officers in charge. We commun icate with stockholders and investors through various means such as the representative director and executive officers in charge attendin g different types of conferences and through international investor relations.
2. Information disclosure is made in a timely, fair, and appropriate manner by the department responsible for overseeing the information gathering, management, and disclosure in cooperation with related departments.
3. In order to relay shareholder views in to management, the Company ensures that important feedback matters are reported to the boa rd when they arise.
4. In order to prevent leaking of financial results and ensure fairness, a quiet period will be arranged by Fuji to refrain from providing ans wers to or comments on inquiries related to financial results during this period. In addition, the Company implements comprehensive info rmation management in accordance with its internal information management regulations to control insider information.
5. Fuji's website is maintained with the intention that information such as business overview and financial information is disclosed in a ti mely and easy-to-understand manner.
   In addition to IR activities, we also implement SR activities to build stable relationships with institutional investors who own the Company' s shares. Opinions and concerns gained through dialogs with shareholders are reported to the management, and matters incorporated in response to their feedback are reflected to the financial result briefing materials and mid-term management plan for fiscal 2025 to 2027.
   Our IR activities and shareholder return policy are disclosed on our website (https://www.fuji.co.jp/en/sustainability/investors).

Principle 5.2 Formulate and Publish Business Strategies and Plans

Action to Implement Management That Is Conscious of Cost of Capital and Stock Price (English disclosure available)

As an embodiment of the business strategies and business plans, the Company released in May 2024 the mid-term business plan for fis cal 2025 to 2027 and has disclosed it on its corporate website (https://www.fuji.co.jp/en/ir/mtp/).

To achieve cost of capital and stock price conscious management, we will continuously improve ROE and PBR, allocate management re sources appropriately, and enhance disclosure. We recognize the cost of equity as 8 to 9%, and for six years since fiscal 2018, ROE had exceeded 9.0%, surpassing the cost of equity. However, in fiscal 2024, ROE declined to 4.6% due to lower sales volume and higher mat erial costs resulting from deteriorating market conditions. We will aim to increase ROE to 10% by fiscal 2027 and thereafter maintain an ROE higher than cost of equity. PBR reached 1.1 times at the end of fiscal 2024. We will aim to achieve more than 1.1 times by the end of fiscal 2027.

In order to achieve our sustainable growth and enhance our corporate value in the medium to long term, we will seek to increase profits by reorganizing our business portfolio and promoting business strategies aimed at expanding our business domains in the areas of the S MT pick and place machines and semiconductor manufacturing equipment (die bonders), where the market is expected to grow in the fut ure. To appropriately allocate managerial resources, we will direct cash generated through improvements in cash flow from the operating activities and cash conversion cycle, as well as the sale of cross-shareholding shares, to growth investments in new areas, infrastructure investments in existing businesses, and shareholder returns. Through these efforts, we will pursue disciplined financial management with an awareness of capital efficiency.

Ensuring that a portion of the results of our business activities is allotted as returns to our shareholders is a matter of high priority, and w e have established our new shareholder return policy. The annual dividend per share for the period of this medium-term management pla n will be a minimum of 80 yen per share, with a payout ratio of at least 50%. We plan to flexibly repurchase treasury stock of 15 to 20 billi on yen within the period of this medium-term management plan. We will also strive to enhance disclosure, including non-financial informa tion, and strengthen investor relations activities in order to make our stakeholders aware of our management strategies and plans.

2. Capital Structure

Foreign Shareholding RatioMore than 30%

Status of Major Shareholders

Name / Company Name	Number of Shares O	Percentage (%)
wned
The Master Trust Bank of Japan, Ltd. (Trust account)	13,352,200	14.41
Custody Bank of Japan, Ltd. (Trust account)	5,903,100	6.37
Daido Life Insurance Company	3,342,000	3.60
STATE STREET BANK AND TRUST COMPANY 505001	3,246,061	3.50
Fuji customers stock ownership	3,101,900	3.34
MUFG Bank, Ltd.	2,288,729	2.47
SSBTC CLIENT OMNIBUS ACCOUNT	2,182,942	2.35
THE BANK OF NEW YORK MELLON 140044	1,990,607	2.14
The Bank of Nagoya, Ltd.	1,554,586	1.67
JP MORGAN CHASE BANK 385781	1,178,826	1.27

Controlling Shareholder (except for Pa	―――
rent Company)
Parent Company	Not established

Supplementary Explanation

Shares held by Fuji as treasury shares (5,212,668 shares) are excluded from the top ten shareholders listed above. The ratio is calculated after deduction of the treasury shares and figures are rounded down to two decimal places.

3. Corporate Attributes

Listed Stock Market and Market Sectio	Tokyo Prime, Nagoya Premier
n
Fiscal Year-End	March
Type of Business	Machinery
Number of Employees (consolidated) a
s of the End of the Previous Fiscal Yea	More than 1000
r
Sales (consolidated) as of the End of t	From ¥100 billion to less than ¥1 trillion
he Previous Fiscal Year
Number of Consolidated Subsidiaries
as of the End of the Previous Fiscal Ye	From 10 to less than 50
ar

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder

―――

5. Other Special Circumstances which may have Material Impact on Corporate Governance

―――

1. Business Management Organization and Other Corporate Governance Systems regarding Decision-maki ng, Execution of Business, and Oversight in Management

1. Organizational Composition and Operation

Organization FormCompany with Corporate Auditors

Directors

Maximum Number of Directors Stipulat	10
ed in Articles of Incorporation
Terms of Office Stipulated in Articles of	1 year
Incorporation
Chairperson of the Board	Other directors
Number of Directors	7
Appointment of Outside Directors	Appointed

Number of Outside Directors

3

Number of Independent Directors from

3

Outside Directors

Outside Directors' Relationship with the Company (1)

Name

Attribute

Relationship with the Company*

a

b

c

d

e

f

g

h

i

j

k

Nobuko Kawai

Lawyer

Shoji Mizuno

From other company

Makoto Iwasaki

Scholar

O

• Categories for "Relationship with the Company" * "O" when the director presently falls or has recently fallen under the category; "△" when the director has fallen under the category in the past * "●" when a close relative of the director presently falls or has rec ently fallen under the category; "▲" when a close relative of the director has fallen under the category in the past
  a Executive of the Company or its subsidiaries
  b Non-executive director or executive of a parent company of the Company c Executive of a fellow subsidiary company of the Company
  d A party whose major client or supplier is the Company or an executive thereof e Major client or supplier of the listed company or an executive thereof

1. Consultant, accountant, or legal professional who receives a large amount of monetary consideration or other property from the Comp any besides compensation as a director/kansayaku
2. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
3. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (the director only)
4. Executive of a company, between which and the Company outside directors/kansayaku are mutually appointed (the director only)
5. Executive of a company or organization that receives a donation from the Company (the director only)
6. Others

Outside Directors' Relationship with the Company (2)

	Inde
Name	pend	Supplementary Explanation of th	Reasons of Appointment
ent d
	irect	e Relationship
	ors
			Although Ms. Kawai does not have experien
			ce in corporate management other than as
			an outside director, Fuji believes that she wi
			ll be able to utilize her expertise and experie
			nce as a lawyer to be adequately involved i
			n decision making on its management matte
			rs and supervision over the execution of its
Nobuko Kawai	O	---	operations. Thereby, she has been appointe
d as an outside director.
			In addition, as this person satisfies guideline
			s for independent directors pursuant to the r
			equirements of Tokyo Stock Exchange, Inc.
			and the Company, the Company does not f
			oresee the possibility of conflicts of interest
			with its general shareholders and therefore
			designated the person as an independent di
			rector.
			Mr. Mizuno has extensive experience in sal
			es in addition to his managerial insight. The
			Company appointed this person as an outsi
			de director because this person was expect
			ed to serve fully in the role of making decisi
			ons on the Company's management matter
			s and overseeing execution of business ope
Shoji Mizuno	O	---	rations, taking advantage of the person's ex
perience.
			In addition, as this person satisfies guideline
			s for independent directors pursuant to the r
			equirements of Tokyo Stock Exchange, Inc.
			and the Company, the Company does not f
			oresee the possibility of conflicts of interest

			with its general shareholders and therefore
			designated the person as an independent di
			rector.
			Mr. Iwasaki has extensive experience in the
			engineering field as a professor at the Nago
			ya Institute of Technology Graduate School.
			The Company appointed this person as an
		Mr. Iwasaki is currently a professor at t	outside director because this person was ex
		he Nagoya Institute of Technology Gra	pected to serve fully in the role of making de
		duate School. Although the Company c	cisions on the Company's management mat
		onducts joint research and other activiti	ters and overseeing execution of business o
Makoto Iwasaki	O	es with the University, the annual trans	perations, taking advantage of the person's
		action amount, such as payment for su	experience.
		ch research, is minimal, and the relatio	In addition, as this person satisfies guideline
		nship with the University does not affec	s for independent directors pursuant to the r
		t his independence.	equirements of Tokyo Stock Exchange, Inc.
		and the Company, the Company does not f
			oresee the possibility of conflicts of interest
			with its general shareholders and therefore
			designated the person as an independent di
			rector.

Voluntary Establishment of Committee
(s) Corresponding to Nomination Com		Established
mittee or Remuneration Committee
Committee Name, Composition, and Attributes of Chairperson
		All Commit	Full-time M	Inside Dire	Outside Dir	Outside Ex
	Committee's Name	tee Membe	Other		Chairperson
			rs	embers	ctors	ectors	perts
Committee Corres	Nomination and re									Inside direct
ponding to Nomin	muneration advisor	4	1	1	3	0		0
	or
ation Committee	y committee
Committee Corres										Inside direct
ponding to Remun	Same as above	4	1	1	3	0		0
	or
eration Committee

Supplementary Explanation

The nomination and compensation advisory committee was established in April 2021 as an advisory body for the board in order to enhan ce the fairness, transparency, and objectivity of procedures related to the nomination and remuneration of directors, executive officers, a nd auditors, and to enhance Fuji's corporate governance. The committee deliberates and reports on the nomination and remuneration of directors, executive officers, and auditors.

Kansayaku (Audit & Supervisory Board Member, or auditors)

Establishment of Kansayaku Board Established

Maximum Number of Kansayaku Stipul	5
ated in Articles of Incorporation
Number of Audit & Supervisory Board	3
Members

Cooperation among Kansayaku, Accounting Auditors and Internal Audit Departments

With accounting auditors, in addition to regular debriefing sessions, attendance at onsite auditor visits, and exchange of information orall y and in writing, auditors maintain close cooperation and coordination at all times, actively exchange views and information, and mutually

share insights into each audit in order to improve the quality of audit operations and make effective improvements.

The Company has a system in which five staff members of the Audit Department provide assistance to the auditors whenever requested by the auditors.

The Company has in place an Internal Audit Department reporting directly to the Representative Directors, which conducts internal audit s to examine and evaluate the organization, systems, and business execution of the Company and its subsidiaries from the legal and rati onal perspectives, with the aim of streamlining and improving the efficiency of management and ensuring the proper execution of operati ons. Internal auditing is conducted in accordance with an annual internal audit plan that is prepared prior to the start of each fiscal year a nd approved by the Representative Directors. To ensure the effectiveness of internal auditing, auditing results are directly reported to the Board of Directors, auditors, and the Audit & Supervisory Board, as well as the Representative Directors. In addition, the Internal Audit D epartment works in close cooperation with corporate auditors and accounting auditors to exchange information and views with them in a t imely manner, with the aim to improve the quality of auditing.

Appointment of Outside Kansayaku	Appointed
Number of Outside Kansayaku	2

Number of Independent Kansayaku fro	2
m Outside Kansayaku

Outside Directors' Relationship with the Company (1)

Name	Attribute	Relationship with the Company*
a b c d e f g h i j	k l m
Shigeki Matsuda	CPA
Kayoko Yamashita	CPA

• Categories for "Relationship with the Company" * "O" when the director presently falls or has recently fallen under the category; "△" when t he director has fallen under the category in the past * "●" when a close relative of the director presently falls or has recently fallen under the category; "▲" when a close relative of the director has fallen under the category in the past
  a Executive of the Company or its subsidiaries
  b Non-executive director or accounting advisor of the Company or its subsidiaries c Non-executive director or executive of a parent company of the Company
  d Kansayaku of a parent company of the Company
  e Executive of a fellow subsidiary company of the Company
  f A party whose major client or supplier is the Company or an executive thereof g Major client or supplier of the listed company or an executive thereof

1. Consultant, accountant, or legal professional who receives a large amount of monetary consideration or other property from the Comp any besides compensation as a director/kansayaku
2. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
3. Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h) (the kansayaku only)
4. Executive of a company, between which and the Company outside directors/kansayaku are mutually appointed (the director only)
5. Executive of a company or organization that receives a donation from the Company (the director only)
6. Others

Outside Directors' Relationship with the Company (2)

	Inde
Name	pend	Supplementary Explanation of th	Reasons of Appointment
ent d
	irect	e Relationship
	ors
			Although Mr. Matsuda does not have experi
			ence in corporate management other than a
			s an outside director, Fuji believes that he w
			ill be able to utilize his expertise and experie
			nce as a certified public accountant and cert
			ified public tax accountant to reinforce the a
			uditing system of Fuji. Thereby, he has bee
Shigeki Matsuda	O	---	n appointed as an outside auditor.
In addition, as this person satisfies guideline
			s for independent directors pursuant to the r
			equirements of Tokyo Stock Exchange, Inc.
			and the Company, the Company does not f
			oresee the possibility of conflicts of interest
			with its general shareholders and therefore

			designated the person as an independent di
			rector.
			Although Ms. Yamashita does not have exp
			erience in corporate management other tha
			n as an outside director, Fuji believes that s
			he will be able to utilize her expertise and e
			xperience as a certified public accountant a
			nd certified public tax accountant to reinforc
			e the auditing system of Fuji. Thereby, she
Kayoko Yamashita	O	---	has been appointed as an outside auditor.
In addition, as this person satisfies guideline
			s for independent directors pursuant to the r
			equirements of Tokyo Stock Exchange, Inc.
			and the Company, the Company does not f
			oresee the possibility of conflicts of interest
			with its general shareholders and therefore
			designated the person as an independent di
			rector.

Independent Directors/Kansayaku

Number of Independent Board Membe	5
rs

Matters relating to Independent Directors/Kansayaku

―――

Incentives

Incentive Policies for Directors	Performance-linked Remuneration

Supplementary Explanation

The performance-related remuneration system covers all directors other than outside directors, which, taking into account the performan ce for consolidated operating income and consolidated ROE in the previous fiscal year as well as ESG indicators such as environmental issues, diversity, health, and work styles, consists of the performance-related remuneration policy (whole company) that changes the re muneration in a reflection of performance in each fiscal year, and the performance-related remuneration policy (individuals) that has rem uneration linked to the evaluation of the performance of each director. The performance-related remuneration policy (whole company) is f or remuneration based on produced results and performance of each director. This policy is designed so that the proportion of the remun eration is greater with the greater the responsible roles and duties, and the higher responsible roles and duties are expected for greater r esults and responsibilities on performance. On the other hand, the performance-related remuneration policy (individuals) is designed to e valuate individual officers for their achievement and contribution attributable to their own performance across company-wide and division al issues. In addition to the degree of achievement of the tasks set by the officers themselves in consideration of the mid-term business p lan, divisional policies, and departmental policies, the representative director evaluates their ability to execute their duties from the persp ectives of strategy, operations, and people/organization.

Recipients of Stock Options

Supplementary Explanation

―――

Director Remuneration

Disclosure of Individual Directors' Rem	No Individual Disclosure
uneration

Supplementary Explanation

The total amount for all directors is disclosed. During fiscal 2024, the total annual remuneration paid to Fuji's directors amounted to 334 million yen (including 27 million yen for outside directors).

The above total amount of annual compensation includes 34 million yen of restricted share awards for directors (excluding outside direct ors).

Fuji's director remuneration system (monetary compensation) determines the final compensation of directors comprising of "fixed remune ration" in proportion to the responsible role and duty of each director and "performance-related remuneration" in view of performance of F uji as a whole as well as performance of each individual. The payment shall be in form of regular fixed remuneration.

Policy on Determining Remuneration A	Established
mounts and Calculation Methods

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods

1. Basic policy

Along with the basic policy that remuneration for the directors shall be linked to the shareholders' interests so that it can work well as an i ncentive for the sustainable enhancement of corporate values, and for determining the remuneration of individual directors, an appropriat e level based on the responsibilities of each position shall be applied, "fixed remuneration" for each position as well as the "performance-l inked remuneration" based on the individual performance and that of Fuji are paid.

The resolution of "Determination of Remuneration for the Granting of Transfer-Restricted Shares to Board Members (excluding Outside Board Members)" has been adopted at the 75th Ordinary General Meeting of Shareholders held on June 29, 2021, a part of fixed remun eration shall be paid in the form of the restricted share awards.

For outside directors, in consideration of their duties, only fixed remuneration shall be paid, and the performance-linked remuneration an d restricted share awards shall not be granted.

2. Policy on determination of the amounts of fixed remuneration, performance-linked remuneration, and restricted share awards or the nu mber of allotted shares for each director

Fixed remuneration for directors shall be comprehensively determined, taking into account the position, responsibilities, years of service, Fuji's business performance, and the level of employees' salaries. The performance-linked remuneration for directors consists of "perfor mance-linked remuneration (company-wide)" and "performance-linked remuneration (individual)." The performance-linked remuneration ( company-wide) is remuneration according to the business performance in consideration of the previous year's results of "consolidated op erating profit" and "consolidated ROE" that Fuji emphasizes as management indicators as well as ESG indicators such as environmental issues, diversity, health, and work styles. The performance-linked remuneration (individual) is based on an evaluation of the individual pe rformance of each director.

Since the resolution of "Determination of Remuneration for the Granting of Transfer-Restricted Shares to Board Members (excluding Out side Board Members)" has been adopted at the 75th Ordinary General Meeting of Shareholders to held on June 29, 2021, a part of annu al remuneration shall be paid in the form of the "restricted share awards" up to ¥90 million, equivalent to 20% of ¥450 million, an annual a mount of remuneration for directors approved at the 62nd Ordinary General Meeting of Shareholders (held on June 27, 2008).

The outline of the restricted share awards is as follows:

• Maximum amount of restricted share awards: Total amount ¥90 million (per year)

• Maximum number of shares to be granted 50,000 shares (per year)

• Timing of initiating the grant: July 2021 or after

• Period of restriction on transfer: Until the date of resignation

The restricted stock awards is a form of compensation that aims to provide an incentive to the directors for the sustainable enhancement of corporate values from a midterm to longterm perspective and to promote an enhanced level of value-sharing with our shareholders.

From fiscal year 2021, the board determines the amounts of fixed remuneration, performance-linked remuneration and restricted share a wards as well as the number of shares to be allotted, within the scope of the total amount of remuneration approved at the general share holders meetings, based on the details of the reports at the advisory committee, as a voluntary advisory body for the board newly establi shed in April 2021. The fixed remuneration and the performance-linked remuneration are paid every month, and the restricted share awa rds is granted at a certain time every year. The board will determine the remuneration ratio for the directors by type, based on the details of the reports at the advisory committee.

3. Matters pertaining to the resolution adopted at the general shareholders meeting on the remuneration and such for directors

The annual amount of monetary remuneration for directors is within ¥450 million, pursuant to the resolution adopted at the 62nd Ordinary General Meeting of Shareholders held on June 27, 2008.

Supporting System for Outside Directors and/or Kansayaku

Directors and employees shall report the status of the execution of the Company's business in response to requests from outside auditor s. In addition, the outside auditors hold regular meetings with the representative director to exchange views on important auditing issues.