IRCorporate Governance

Basic Stance on Corporate Governance

The ARATA CORPORATION (the “Company”) Group consolidates the long histories and traditions a number of powerful wholesalers from across Japan into a single entity. We strive to contribute to Japanese industry and the local regions where we operate as we shoulder a part of the distribution economy.

We therefore fulfill this role with a strong “frontier spirit,” remembering the importance of cooperation, mutual trust, and humility at all times. At the same time, under our management philosophy of maintaining initiatives that “continue to serve the world,” we will actively develop our business, continuing to contribute to society by being a company that provides outstanding, essential wholesaling functions in line with our management vision of “creating beautiful, clean, and comfortable lifestyles.”

As part of this philosophy, the ARATA Group (the “Group”) believes that improving corporate value means improving business performance through sustained business activities, but that it also requires carrying out the various responsibilities expected by stakeholders.

As a company, it is especially important that ARATA quickly discloses information on activities to investors, employees, business partners, and others, and enhances the transparency of management. Based on this approach, we have shifted from a Company With a Board of corporate Auditors to a Company with an Audit and Supervisory Committee. In addition, in the course of conducting business activities, we recognize that fulfilling our corporate social responsibility (CSR), such as compliance, environmental measures, and respect for human rights, is as important in the same way as improving business performance, and we believe that the management oversight of the Group by these stakeholders is implemented by the Board of Directors and the Audit and Supervisory Committee.

We believe that the role of directors who are members of the Audit Committee is to ensure the sound and sustainable growth of the company, and we will build a system to further strengthen the supervisory function with the aim of establishing a high-quality corporate governance system that will live up to the trust of society.

Based on this stance, we are taking the following measures.

• a. For customers, we will provide advanced wholesaling functions that deliver consistent satisfaction.
• b. For employees, we will provide workplace environments that offer job satisfaction and correctly value people that have made a contribution.
• c. For shareholders, we will aim to increase the return of profits to shareholders by securing appropriate profits, strengthening our financial position, and increasing our corporate value.
• d. For society, we will make an active social contribution through the stable provision of products, emphasis on compliance, correct payment of taxes, and consideration for environmental issues.

Corporate Governance Structure

1. Overview of Corporate Governance and Reason for Adoption of the Structure