Approach to Cross-Shareholdings

The company acquires and holds shares in companies it deems necessary in order to build, maintain, and strengthen business and cooperative relationships. Each year, the Board of Directors reviews the appropriateness of each individual stock held based on a quantitative look at whether the earnings from transactions and dividends exceed cost of capital, as well as a qualitative look at the medium-to-long-term business relationship with the company in question. If a company’s holdings are determined to be no longer appropriate, they are sold to reduce the size of our holdings.

In exercising voting rights for cross-shareholdings, the company examines proposals from the perspective of whether they will lead to medium-to-long-term improvement in the corporate value of the company in question and whether they are likely to damage our corporate value. A decision for or against the proposal is then made.

Note: There are no deemed shares held.