Kamigumi : Items Excluded From Paper-Based Documents Concerning Notice of Convocation of the 84th Ordinary General Meeting of Shareholders

Framework to secure appropriateness of operations

Matters on which the Company has passed a resolution at the Board of Directors as a framework to secure the appropriateness of operations are as follows.

This matter of this resolution shall be reviewed regularly and continuously when changes occur in the business environment.

(Basic policy about internal control system)

The Company, as a general distribution company, aims to realize continued growth and implement social responsibility by setting the management philosophy as "keeping up with the current of the times, keenly Responding to the demand of ever-changing society, we challenge the subject one step ahead of the day, we make efforts to enhance our corporate value and stability of our management, eventually, contribute to the realization of affluent society."

For achieving this objective, the Company will establish and manage the framework and system, and carry out regular review and improvement by setting up the basic policy on the internal control system as follows.

1. Framework to make performance of duties by directors and employees conform to laws and ordinances and Articles of Incorporation
   The Company has set the compliance first as basis for corporate activities, and has established the "Kamigumi Group Charter of Corporate Behavior" that shall be applied to the entire Group for the purpose of establishing and practicing law-abiding spirit.
   Based on the relevant Charter, in order to establish and promote the internal control system in the Group, the Company has set up the "Compliance Risk Management Committee," has formulated internal rules including the "Compliance Rules," etc., and shall improve and manage the whistle-blowing system called as the "Help Line for Corporate Ethics."
   In addition, for business monitoring, the Company shall set up the Internal Audit Department as an independent organization under the direct supervision of the President, which shall carry out the audit of the Group.
2. Framework to preserve and manage information about directors' performance of duties

We appropriately preserve and manage information about implementation of duties by directors by recording it in writing, etc. in accordance with "Document Management Regulations" and other relevant regulations. Also, we promote an effective management system so that directors and audit & supervisory board members can easily access the information.

1. Rules about loss risk controls and other frameworks

Divisions responsible for relevant fields manage various risks in business operations in accordance with "Risk Control Rules," etc. In addition, the Compliance Risk Management Committee operates cross- sectional control structure of the whole group.

1. Framework to secure efficient implementation of directors' duties

The Group formulates the medium-term management plan in consideration of the business environment in the future, and draws up and carries out specific plans for achieving the relevant goal.

In addition, a regular meeting of the Board of Directors is held once a month in principle to decide on important matters related to the Company and the Group for ensuring the effectiveness and efficiency of execution of duties as well as carrying out the monitoring of the status of execution of duties performed by directors.

Furthermore, the Company aims to improve the efficiency of management by separating the decision- making and monitoring of management from the execution of operation through introducing the executive officer system.

1. Framework to secure appropriateness of operations of the corporate group consisting of the Company and subsidiaries
   The Company formulates the "Management Rules for Affiliates and Subsidiaries," and obliges the Group to make a regular report about important matters on management, operating results, etc. in the Group.
   In addition, the Compliance Risk Management Committee of the Company and separate committees established in individual offices manage the compliance, and risk management structure and other systems necessary for internal control, decide on important policies, etc. on its operation and supervise the implementation status through the monitoring conducted by the Internal Audit Department of the Company.

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1. Items on employees whom audit & supervisory board members request to appoint as their assistants in their duties
   We prepare a system for appointing appropriate persons as audit assistants from within the Company to support audit & supervisory board members' work in order to make audit more efficient and enhance the level of audit functions.
2. Items concerning keeping independence of the employees described in the preceding item from directors and ensuring effectiveness of instructions to the relevant employees
   When receiving an order necessary for audit work from audit & supervisory board members, the audit assistants defined in the preceding item preserve independence to be able to carry out an audit without being subjected to any unreasonable restriction from directors and employees with respect to the order. In addition, the audit assistants shall comply with the instructions of audit & supervisory board members upon the implementation of their duties.
3. Reporting framework enabling directors and employees to report to audit & supervisory board members

Directors and employees of the Group report the following matters to audit & supervisory board members in time.

1. • Decision on important matters which have an effect on the Group
   • Business performance of the Company and the Group
   • Items on noncompliance of the Group
   • Items on the whistle-blowing contents in the Help Line for Corporate Ethics and survey results for the relevant whistle-blowing.
   • Cases discussed and reported at important meetings such as management conferences
   • Results of internal audits carried out by Internal Audit Department
   • Items which may cause substantial damage to the Group
2. System which ensures that a person who made a report to audit & supervisory board members based on the preceding item shall not be disadvantageously treated due to the fact that such person made such report
   The Company stipulates that it shall be prohibited that a person who made a report based on the preceding item may be disadvantageously treated due to the fact that such person made such report, and that a whistle- blower shall not be disadvantageously treated due to the fact of whistle-blowing.
3. Items on the policy in relation to an advance payment of expenses or debt disposal incurred in connection with the execution of duties of audit & supervisory board members
   When an audit & supervisory board member claims to the Company an advance payment of expenses, etc. based on Article 388 of the Companies Act in association with the execution of the duties, the department in charge shall, after deliberation, settle the relevant expenses or debt promptly except the case where the relevant expenses or debt related to the relevant claim shall be deemed not to be necessary for the execution of the duties by such an audit & supervisory board member.
4. Other framework to ensure effective auditing by audit & supervisory board members

The Company formulates a framework where audit & supervisory board members can receive reports and exchange opinions and information about performance of their duties at important meetings including meetings of the Board of Directors, and where audit & supervisory board members can have regular meetings and exchange opinions and information with respect to development and implementation, etc. of audit plans for individual fiscal terms with the Internal Audit Department and independent auditors.

In addition, the Company formulates a framework that enables audit & supervisory board members to inspect important minutes of meetings, documents for final decision and others if necessary.

(Operation of framework to secure appropriateness of operations)

1. Operation regarding the compliance system

The Compliance Risk Management Committee, which is responsible for establishing and promoting the internal control system, strives to fully disseminate compliance relating to internal rules and related laws and ordinances throughout the company using company portal site to share information and issuing newsletters. The Compliance Risk Management Committee also receives regular self-assessment reports from separate committees and successively implements appropriate measures to strengthen compliance.

In addition, the Company has formulated and managed the "Rules of Help Line for Corporate Ethics" as part of the whistle-blowing system, in order to identify violations of laws and ordinances and misconduct at an early stage, and prevent those acts.

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1. Operation of risk control system

To prevent various risks that occur in the performance of everyday duties, the Group has formulated "Risk Control Rules." Pursuant to the rules, meetings of the Compliance Risk Management Committee were held regularly (12 times during the fiscal term under review) to understand risks in the Group and plan and implement necessary measures.

1. Efforts to ensure appropriateness and efficiency of the execution of duties

The Board of Directors comprises twelve directors, including four external directors. During the fiscal term under review, meetings of the Board of Directors were held 16 times with the attendance of four audit

1. & supervisory board members, including three external audit & supervisory board members. Attendees actively exchanged opinions regarding items, thereby ensuring the effectiveness of decision-making and supervision.

   The Company has adopted an executive officer system. During the fiscal term under review, Executive Officers Committee meetings were held 12 times with the attendance of all executive officers aiming to flexibly make decisions regarding the execution of duties.

2. Operation regarding ensuring the appropriateness of operations in the Group

Important matters of Group management are discussed at the meetings of the Board of Directors of the Company and other internal conferences or are reported in accordance with the "Management Rules for Affiliates and Subsidiaries." In addition, the Company's Internal Audit Department conducts audits for major subsidiaries based on the audit plan to ensure the appropriateness of business operations in the Group.

1. Efforts to ensure the effectiveness of audits conducted by audit & supervisory board members

The Company's audit & supervisory board members attend meetings of the Board of Directors and other important meetings, and have regular meetings with the Representative Directors to secure opportunities to exchange opinions on corporate management. They also receive reports on the results of internal audits from the Internal Audit Department, and receive important reports and documentary materials from related departments of the Company. In addition, they receive reports and collect documentary materials regarding group companies as needed. Moreover, they receive regular reports on audit results from the independent auditor and inquire about the status of audits to the independent auditor as necessary, thereby ensuring the effectiveness of audits conducted by audit & supervisory board members.

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Consolidated Statements of Changes in Net Assets

(From April 1, 2022 to March 31, 2023)

															(Million yen)
							Shareholders' equity
	Capital stock		Additional paid-		Retained					Total
				Treasury stock		shareholders'
		in capital			earnings
										equity
Balance at beginning of the term	31,642		26,854			321,928			(25,034)		355,390
Changes in the term
Dividends from surplus									(9,696)					(9,696)
Profit attributable to owners of									24,620					24,620
parent
Purchase of treasury stocks													(12,300)		(12,300)
Disposal of treasury stocks						6							36		43
Cancellation of treasury stocks						(6)			(22,999)			23,006		-
Net changes of items other than
shareholders' equity in the term
Total changes in the term		-				-			(8,076)			10,742		2,665
Balance at end of the term	31,642		26,854			313,851			(14,292)		358,055
	Accumulated other comprehensive income
						Accumulated
	Differences			Foreign		adjustment		Total		Non-
						for			Total net
	in valuation							accumulated
			currency		employees'		controlling
	of available-					other		assets
		translation		severance			interests
	for-sale				comprehensive
		adjustment			and
	securities					income
					retirement
						benefits
Balance at beginning of the term	10,708		336			(294)		10,750	1,776	367,917
Changes in the term
Dividends from surplus															(9,696)
Profit attributable to owners of															24,620
parent
Purchase of treasury stocks															(12,300)
Disposal of treasury stocks															43
Cancellation of treasury stocks															-
Net changes of items other than	1,438		387			613		2,438	(16)	2,421
shareholders' equity in the term
Total changes in the term	1,438		387			613		2,438	(16)	5,087
Balance at end of the term	12,146		724			318		13,189	1,760	373,005

Note: Figures of less than one (1) million yen have been omitted.

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Notes to Consolidated Financial Statements

1. Notes on Fundamental Items in Preparation of the Consolidated Financial Statements, etc.

1. Items on the scope of the consolidation
2. 1. Consolidated subsidiaries
   2. • Number of consolidated subsidiaries: 12
      • The names of the consolidated subsidiaries:
        Kamigumi Land Transport Co., Ltd., Kamigumi Marine Transport Co., Ltd., Kamigumi Air Service Co., Ltd., Izumi Sangyo Co., Ltd., Kamix Corp., Oita Koun Co., Ltd., Iwagawa Jozo Co., Ltd., MB Service Japan Co., Ltd., Japan Port Industry Co., Ltd., Kamigumi (Hong Kong) Co., Ltd., Kamigumi International Forwarding (Shanghai) Co., Ltd., and Kamigumi Global Solutions Malaysia Sdn. Bhd.
   3. Unconsolidated subsidiaries
   4. • The name of principal unconsolidated subsidiary: Kamitsu Unyu Co., Ltd.
      • Reason for exclusion from the scope of consolidation
        This unconsolidated subsidiary is excluded from the scope of consolidation since it is small in size, and total assets, net sales, profit (loss) (the amount proportionate to equity) and retained earnings (the amount proportionate to equity) of this company have little impact on the consolidated financial statements.
3. Items on the application of equity method
4. 1. Unconsolidated subsidiaries and affiliates subject to application of the equity method
   2. • Number of unconsolidated subsidiaries subject to application of the equity method: 1
      • The name of unconsolidated subsidiary subject to application of the equity method: Kamitsu Unyu Co., Ltd.
      • Number of affiliates subject to application of the equity method: 4
      • The names of affiliates subject to application of the equity method:
        EASTERN SEA LAEM CHABANG TERMINAL CO., LTD. Shanghai Kamigumi Logistic Service Co., Ltd.
        Toyotsu Kamigumi Logistics (Changshu) Co., Ltd. KLKG Holdings Co., Ltd.
        The Company has invested in four subsidiaries of KLKG Holdings Co., Ltd., and incorporated their profits and losses recognized using the equity method for profits and losses of KLKG Holdings Co., Ltd., because these subsidiaries' profits and losses had material impacts on the Company's consolidated financial statements. As a result, these four subsidiaries and KLKG Holdings Co., Ltd. are counted as one company of the entire KLKG Holdings group in reporting the number of affiliates subject to the application of the equity method.
   3. Unconsolidated subsidiaries and affiliates not subject to application of the equity method

Unconsolidated subsidiaries not subject to application of the equity method (KAMIGUMI SINGAPORE PTE. LTD. etc.) and unconsolidated affiliates not subject to application of the equity method (Kobe Port International Distribution Center Co., Ltd. etc.) are excluded from the scope of equity method since profit (loss) (the amount proportionate to equity) and retained earnings (the amount proportionate to equity) of each company have little impact on the consolidated financial statements even if they are excluded from the scope of equity method, as well as have minor significance as a whole.

(3) Items on fiscal term, etc. of consolidated subsidiaries

The final day of the fiscal term of all domestic consolidated subsidiaries excluding MB Service Japan Co., Ltd. and Japan Port Industry Co., Ltd. conforms to that of the consolidated fiscal term.

The final day of the fiscal term of Japan Port Industry Co., Ltd. is the end of February.

The final day of the fiscal term of MB Service Japan Co., Ltd. and the foreign consolidated subsidiaries is December 31. In preparing consolidated financial statements, financial statements as of that date are used, and necessary adjustment is made with respect to significant transactions which occur between the end of consolidated fiscal term and the said date.

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