Glory : Corporate Governance Guidelines amended

(TRANSLATION FOR REFERENCE ONLY)

Corporate Governance Guidelines

June 21, 2024

The numbers in brackets [ ] in these Guidelines correspond to the numbers of the relevant principles in the Corporate Governance Code established by the Tokyo Stock Exchange.

(TRANSLATION FOR REFERENCE ONLY)

1. General provisions

1. Purpose of establishing these Guidelines

1. GLORY LTD. ("GLORY" or the "Company") hereby sets out in these Guidelines its basic views and policies in relation to corporate governance in order for GLORY and its subsidiaries (collectively, the "Group") to realize its corporate philosophy through business operations and contribute to sustainable growth and increased corporate value over the mid- to long-term. [3.1(ii)]
2. GLORY has established its "Corporate Philosophy," "Our Values," and "Corporate Action Guidelines," to be observed by the directors, executive officers and employees of the Group. [2.1, 2.2, 3.1(i)]
   Corporate Philosophy
   Building a more secure world through global collaboration and commitment to excellence.

Our Values

Customer Delight

We put our customers first.

Integrity

We do the right thing, always.

Innovation:

We embrace new challenges and shape the future.

Speed

We move fast, that is how we stay ahead.

Diversity & Respect

We value the strength in our differences.

Teamwork

We succeed together.

Corporate Action Guidelines

Business continuity, securing profit and profit redistribution

We will maintain profit stability by developing businesses based on the corporate philosophy and contribute towards building a sustainable society.

Quality, safety and customer satisfaction

We will provide products and services that build customer confidence and satisfaction in a timely manner.

Information management

We will protect information such as personal data and Company information.

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Respect for individuals, talent development and workplace safety

We will respect the diversity, personality, and individuality of each employee and strive to create a safe, enriching, and pleasant work environment.

Implementation initiative and publicity

Under the strong leadership of the management, we will disseminate the Corporate Action Guidelines within the Company and to our business partners to achieve our goals.

Legal compliance, fair competition and prevention of anti-social forces

We will comply with all relevant laws and regulations, respect social ethical standards, and engage in transparent and fair business activities, and we will not have relationships with anti-social forces.

Information disclosure and communication and cooperation with stakeholders

We will continue to communicate with stakeholders and strive for appropriate information disclosure.

Contribution to society

We will harmonize and advance the interests of the Company and society and will actively participate in social action programs as a "good corporate citizen."

Environmental protection

We will contribute to realizing sustainable society by engaging in earth-friendly activities and providing environmentally friendly products and services.

International cooperation

We will engage in business activities in an internationally harmonized manner from a global perspective. We will respect the cultures and customs of the countries and regions where we conduct our business.

Risk management

We will strive to prevent and avoid business risks and to reduce disaster loss. We will also strive to ensure the security of stakeholders.

2. Our basic view on corporate governance

1. The following is the "Basic Policy on Corporate Governance" of the Group. [3.1(ii)]
   Based on our "Corporate Philosophy," which embodies our determination to achieve growth as a sustainable enterprise by contributing to a prosperous society through our uncompromising approach to product development, the Group aims to improve its corporate value by striving to exist in harmony with society and earn the trust and support of all stakeholders. To this end, we will strive to improve corporate governance by strengthening supervisory and executive functions of management, ensuring expedited, transparent and objective decision-making, and enhancing compliance management, thereby further improving corporate value.
2. Status of understanding of and compliance with the policy set out in the preceding paragraph will be checked by the Board of Directors on a regular basis. [2.2, 2.2.1]

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1. 1. Securing the rights and equal treatment of shareholders
2. Securing the rights and equal treatment of shareholders
   GLORY will take appropriate measures to secure the rights of all shareholders (including minority shareholders and foreign shareholders) equally according to the number of shares they hold. [1, 1.1.3]
3. General Meetings of Shareholders [1.2]

1. GLORY recognizes that the general meeting of shareholders ("Shareholders Meeting") is the supreme decision-making body of the Company consisting of shareholders with voting rights, and is a venue for constructive dialogue with shareholders. GLORY will operate Shareholders Meetings lawfully and take appropriate measures to ensure that shareholder rights are properly exercised at these meetings. [1, 1.2]
2. GLORY will set an appropriate time, date, and place for Shareholders Meetings, taking into consideration the time needed for shareholders to review resolution proposals, the external accounting auditor's auditing schedule, and other related factors. [1.1, 1.2.3, 3.2.2]
3. GLORY will take the following measures to allow all shareholders to adequately consider resolution proposals and properly exercise their voting rights:
4. 1. GLORY will endeavor to provide necessary information for shareholders to adequately consider resolution proposals for Shareholders Meetings and properly exercise their voting rights, and will strive to gain better understanding of such information by using easy-to-understand explanations or graphs. [1.2.1]
   2. GLORY will send convocation notices for Shareholders Meetings around three weeks before the date of Shareholders Meetings. Prior to the day the notices are sent, GLORY will disclose in electromagnetic form the information to be included in the notices (including English translations) through the stock exchange, GLORY's website and the Electronic Voting Platform. [1.2.2, 1.2.4, 3.1.2]
5. If beneficial shareholders who hold shares in the name of a trust bank or the like express in advance their desire to exercise voting rights themselves instead of through the nominee shareholder at Shareholders Meetings, GLORY will discuss and consider the matter with trust bank, etc. [1.2.5]
6. Voting results for resolution proposals of Shareholders Meetings will be analyzed by the Board of Directors and dialogue with shareholders will be conducted, as necessary. [1.1.1]

3. Basic view regarding capital policy, etc.

Because our capital policy may have a significant effect on shareholder interest, GLORY will handle each issue according to the following policies:

1. Capital policy
2. 1. GLORY will promote more efficient management of the Company with ROE (Return on Equity), ROIC (Return on Invested Capital), and ROA (Return on Asset) as management benchmarks. [1.3]

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1. 1. GLORY believes return of profits to shareholders to be an important management priority and retain a basic policy to continue stable dividends while enhancing growth investment and maintaining sound financial standing. For the period of 2026 Medium-Term Management Plan" (FY2024-2026), we aim to pay progressive dividends using the amount of annual dividend paid for the fiscal year ended March 2024 as a standard, while achieving a DOE (Dividend on Equity) of 3.0% or more. [1.3]
   2. GLORY may acquire treasury shares after comprehensively considering future business development, investment plans, levels of internal reserves, performance trends and other related factors. GLORY will leverage treasury shares acquired for growth investment such as M&As, and for the optimum implementation of its capital policy, with the maximum number of treasury shares held as 5% of the total number of shares issued. [1.3]
   3. Before implementing a measure that results in the change of control or in significant dilution (including equity finance and management buyouts), the necessity and rationale of such measure will be reviewed by the Board of Directors, taking into consideration independent outside directors' opinions, and sufficient explanation will be provided to shareholders and investors. [1.6]
2. Cross-shareholdings*1 [1.4, 1.4.1, 1.4.2]
3. 1. GLORY may engage in cross-shareholdings if, based on a broad consideration of factors such as the business strategies and transaction status of any investee company, we determine that the corporate value of the Group will increase by maintaining or enhancing our relationship with that company. When GLORY engages in cross-shareholdings, it will pay attention to the soundness of investee companies, consider the market value of shares and the returns (including dividends) of such companies, and ensure the economic rationale of such holdings.
   2. The Board of Directors will examine the mid- to long-term economic rationale of each individual cross-shareholding on an annual basis and reconsider such holding if it is not found to be suitable.
   3. With respect to the exercise of voting rights on shares that are subject to cross- shareholdings, GLORY will exercise such voting rights after deciding how to vote, taking into consideration various circumstances including the investee company's condition in addition to criteria such as whether exercising the voting rights will improve the corporate value of that company and GLORY.
   4. If any cross-shareholder who holds GLORY's shares indicates its intention to sell the shares, GLORY will not attempt to hinder any such sale of the cross-held shares such as by implying a possible reduction of business transactions.
   5. Regardless of whether the counterparty to any business transaction is a cross- shareholder or not, GLORY will engage in all transactions after fully examining the economic rationale thereof and will not conduct any transaction that may harm the Company or the common interests of its shareholders.

*1 Translation note: Cross-shareholdings here include not only mutual shareholdings but also unilateral ones.

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1. Related party transactions [1.7, 4.3]
2. 1. 1. GLORY's directors may not engage in any self-dealing transactions, competing transactions or any other transactions that would involve a conflict of interest with GLORY without obtaining approval of the Board of Directors.
   2. Any transactions with related parties such as directors and officers or major shareholders must be submitted to and approved by the Board of Directors, unless the terms of the transaction are equivalent to other general transactions.
   3. Transactions with related parties will be disclosed in accordance with the Companies Act, the Financial Instruments and Exchange Act and other applicable laws and regulations.

1. Appropriate cooperation with stakeholders

1. Sustainability [2]

1. GLORY recognizes that in order to attain sustainable growth and the mid- to long-term improvement of corporate value, it is indispensable to appropriately cooperate with a range of stakeholders, including employees, customers, business partners, creditors, and local communities. Therefore, GLORY will endeavor to proactively deal with sustainability challenges including social and environmental issues. [2, 2.1, 2.2, 2.3, 2.3.1, 3.1.3]
2. Since its founding, the Group's goal has been: "We aim to achieve growth as a sustainable enterprise through our money handling business by contributing to a prosperous society through our uncompromising approach to product development." This view is incorporated into our corporate philosophy: "We will contribute to the development of a more secure society through a striving spirit and co-operative efforts." The Group will develop its business activities based on the idea that realizing our corporate philosophy will lead to the realization of a sustainable society. [2.3.1]

2. Ensuring diversity [2.4, 2.4.1]

GLORY has prescribed in our Corporate Action Guidelines that we will respect diversity, personality, and individuality of employees. Based on the guidelines, GLORY will develop a corporate culture in which all employees can maximize their abilities regardless of age, gender, nationality and career background, while aiming to achieve sustainable growth and increase our corporate value over the medium- to long-term.

3. Whistleblowing [2.5, 2.5.1]

1. GLORY has established a whistleblowing system with the goal of detecting at an early stage and rectifying any situation or act that violates or may violate laws and regulations or the internal regulations.
2. GLORY has established points of contact for whistleblowers both inside and outside the Company and instituted internal regulations regarding the related matters such as securing the confidentiality of the information provided and the identity of the whistleblower and appropriately utilizing the information. Additionally, GLORY prohibits any disadvantageous treatment against whistleblowers.

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4. Measures as asset owners [2.6]

With regard to the management of the pension fund reserves, GLORY will cultivate and assign personnel who have appropriate qualities in order for the pension fund to perform its role as an asset owner, and at the same time will establish a system for the sound operation of the pension assets, utilizing outside professionals as necessary. The status of the management of pension fund reserves and other such matters will be reported to the Board regularly.

IV.	Roles and responsibilities of the Board of Directors, etc.

1. Organizational structure

1. GLORY believes that it is effective for its corporate management to have a structure under which the speeding-up and streamlining of decision making on important management issues and the strengthening of the supervisory functions can be achieved. Under such belief, GLORY has adopted a "Company with Audit & Supervisory Committee" as a form of corporate organization under the Companies Act.
2. The Board of Directors has adopted a system in which decisions regarding the execution of important operations are flexibly delegated to directors, thereby enabling expedited and flexible decision making.
3. GLORY has adopted the executive officer system and will endeavor to further strengthen the supervisory function of the Board and to increase the speed and efficiency of business management by promoting delegation of the business execution function of management to executive officers.

2. Fiduciary responsibilities of directors

With recognition that the shareholders have entrusted them with a responsibility to promote sustainable growth and increased corporate value over the mid- to long-term, directors and other management members will fulfill their roles and responsibilities by ensuring proper cooperation with stakeholders and striving to realize the Long-Range Vision and to achieve the Medium- Term Management Plan. [4, 4.5]

3. Composition of the Board of Directors

1. In order to expedite the decision-making process and promote active deliberation at its meetings, the Board will consist of no more than ten (10) directors who are not Audit & Supervisory Committee members and no more than five (5) directors who are Audit & Supervisory Committee members. The Board also includes such number of independent outside directors as exceeds one thirds of the directors, having credentials to contribute to sustainable growth and the increase of corporate value over the mid- to long-term, aiming to achieve the appropriate supervisory functions of the management. [4.9, 4.11, 4.11.1]
2. In the belief that it is important to ensure a balance and diversity of knowledge, experience, skills and abilities of the Board as a whole , the Board will consist of (a) executive directors who have extensive knowledge of the businesses or corporate operations of the Group, (b) outside directors who are qualified to provide valuable recommendations and advice to the management from a broad perspective and (c) directors who are Audit &

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Supervisory Committee members that are responsible for the auditing and supervising of the business execution by directors, etc. Further, independent outside directors shall include individuals who have management experiences at other companies. [3.1(iv), 4.8, 4.11, 4.11.1]

1. In order to secure transparency and objectivity in appointing, and determining the compensation of directors, the Board has established, as advisory committees of the Board, the Nomination Advisory Committee and the Compensation Advisory Committee, each with the majority of members and the chairperson being independent outside directors. [3.1(iii)(iv), 4.6, 4.8.1, 4.10, 4.10.1]

4. Appointment and dismissal of directors, etc.

1. When appointing director candidates and executive officers or selecting senior management from among the directors, GLORY will examine individuals based on such criteria as extensive experience in and out of Japan, depth of insight, skills and expertise suitable for the expected role, personality, and other factors that are necessary to achieve the corporate governance system for which the Company should strive and to contribute to the continuing increase of the Group's corporate value. Executive director candidates will be appointed from among individuals who have extensive knowledge of the domestic and overseas businesses or corporate operations of the Group. Outside director candidates will be appointed from among individuals who have expertise in such areas as corporate management, law, finance and accounting and who are qualified to provide proper recommendations and advice on management from a broad perspective. Candidates for directors who are Audit & Supervisory Committee members will be appointed also based on the criteria stated in 8.1 below.
2. From the perspective of securing transparency and objectivity in deciding on director candidates and executive officers and in selecting senior management from among the directors, the Board of Directors will (i) decide on the director candidates, executive officers and senior management after taking into consideration the results of deliberations by the Nomination Advisory Committee and (ii) decide on the candidates for directors who are Audit & Supervisory Committee members after obtaining the consent of the Audit & Supervisory Committee. The reasons for selecting the director candidates will be stated on the convocation notices for the General Meeting of Shareholders. [3.1(v), 4.3, 4.3.1, 4.6, 4.10.1]
3. In the event that any member of the senior management is deemed to no longer meet the criteria in (1) above, the Board of Directors will determine, after deliberation by the Nomination Advisory Committee, his or her dismissal or removal from the position or the submission of a proposal for dismissal to a Shareholders Meeting. Disclosure will be made regarding such information in accordance with the timely disclosure rules, etc. based on the regulations set forth by the stock exchange. [3.1(iv), (v), 4.3.1, 4.3.2, 4.3.3, 4.10.1]

5. Roles and responsibilities of the Board of Directors

1. Bearing responsibility for GLORY's sustainable growth and the increase of its corporate value over the mid- to long-term, the Board recognizes the importance of increasing social value as well as financial value through enhancing profitability and capital efficiency, and is strongly aware that securing proper cooperation with various stakeholders to achieve the goal of realizing the Long-Range Vision and the Medium-Term Management Plan will lead to the realization of the corporate philosophy. [4, 4.1.2]

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1. In accordance with relevant laws and regulations, the Articles of Incorporation and "Regulations of the Board of Directors," the Board makes decisions on the matters stipulated in the laws and regulations, the Articles of Incorporation, the basic policy of management and other important operational matters of GLORY and the Group, and delegates decisions regarding the execution of important operations to directors.
2. Decisions regarding the execution of certain kinds of operations are delegated to the representative directors, executive officers or heads of business divisions in order for the Board of Directors to make expedited and flexible decisions on execution of operations, details of which will be stipulated in the "Regulations on Approval Authority." [4.1.1]
3. The Board of Directors supervises the execution of duties by the directors in terms of whether each of them is performing the expected role. [4.1.1]
4. Recognizing that the establishment of an environment that supports appropriate risk- taking by the management is one of its responsibilities, the Board welcomes proposals from the management (including executive officers) as well as free, open and constructive discussions with them and will fully examine such matters at Board of Directors meetings that include independent outside directors. In addition, the Board has established and organized the internal control system and risk management structure so that the senior management can make prompt and decisive decisions. [4, 4.2, 4.3.4, 4.12]
5. Recognizing that a medium-term management plan is a commitment to shareholders, the Board will do its best to achieve the plan and, as appropriate, will monitor and analyze the progress of the plan and make amendment or take other necessary measures. Medium- term management plans for ensuing years will be drafted based on the results or challenges of preceding plans. When drafting or amending the plan or if there is a significant gap between plans and actual results, the Board will adequately explain the content thereof to the shareholders and investors. [3.1(i), 4.1.2, 5.2]
6. Recognizing the importance of developing a business portfolio that supports optimum allocation of management resources, such as investment in human capital and intellectual property, for the Group's sustainable growth, the Board formulates and discloses a basic policy regarding business portfolio management, establishes a system to promote it, and supervise its effectiveness. As appropriate, the Company provides its shareholders and investors with sufficient explanation on the progress of its business portfolio management. [4.2.2, 5.2, 5.2.1]
7. Considering that it is the Group's mission to address social issues with advanced technologies to realize a sustainable society, the Board formulates and discloses a basic policy and initiatives regarding the Group's sustainability. [3.1.3, 4.2.2]
8. The Board will establish corporate goals (such as corporate philosophy) of GLORY and allot sufficient amount of time on drawing up Corporate Management Strategy and Medium-Term Management Plan that are concrete measures to achieve those goals. [4.1, 4.1.2]
9. Recognizing that developing succession planning for the position of the president is an important management issue, the Board will determine a successor after having the Nomination Advisory Committee fully deliberate on the criteria for selecting successor candidates and the system for training and evaluating candidates, and other matters. Additionally, the Board will share and supervise succession planning by having the Committee report the results of its deliberations to the Board. [4.1.3, 4.3.2, 4.6, 4.10.1]

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