Corporate Governance

The Company is a company with the Audit & Supervisory Board. It is effectively and with fulfillment audited by Audit & Supervisory Board members and the governance towards the management is effectively functioned.

As of June 24, 2026, the Company consists of 9 directors (including 4 outside directors) and 5 Audit & Supervisory Board members (including 4 outside Audit & Supervisory Board members). The Board of Directors is held once a month as to determine important matters concerning basic policy of management and business execution, and to supervise execution of duties by directors and executive officers. Furthermore, executive committee chaired by the Representative Director, Group CEO is held twice a month with determining the issues to be discussed at the Board of Directors, and concertation of business execution policy based on the determination at the Board of Directors. The Audit & Supervisory Board is held once a month, as to discuss or resolve important matters concerning the audit. Also, one Audit & Supervisory Board member is to attend the executive committee, and monitor the affairs of executive management adequately.

On February 7, 2023, the Company established the Nomination and Remuneration Committee as an optional advisory body, with independent outside directors comprising the majority of members, to ensure objectivity and transparency in the method of determining the nomination and remuneration of directors (excluding outside director), and to further enhance the corporate governance system. In addition, the Company has revised its members of the Board of Directors to further improve the objectivity and transparency of its decision-making process from the perspective of increasing the involvement of outside directors in discussions in Fiscal Year 2024.

Moreover, the Company and outside directors/ outside Audit & Supervisory Board members have concluded a contract to limit liability for damage stipulated in paragraph 1, Article 423 of Companies Act in accordance with paragraph 1, Article 427 of Companies Act. The amount of limit of liability for damage is stipulated in the relevant contract as 10 million yen or the minimum amount of limit of liability that paragraph 1, Article 425 of Companies Act stipulate, whichever is higher. These are for the aim of outside directors and outside Audit & Supervisory Board members to fully play a role expected.

There are transactions for the provision of security services between the Company and the following entities: Shiga Prefecture, where Ms. Toshie Ikenaga, an Outside Director designated as an independent director, served as Vice Governor until July 2018; the Cabinet Office, where she served as Director-General of the Gender Equality Bureau until August 2020; and the National Hospital Organization, where she currently serves as a Director, the disclosure of a summary of these transactions is omitted because they are judged to have no impact on the judgment of shareholders and investors in view of their scale and nature.

Although the Company and NS Solutions Corporation, for which Mr. Hiroyuki Morita, the Outside Director designated as an independent director served as an Advisor until June 2025, have transactions for General Property Management and Fire Protection Services, the disclosure of a summary of these transactions is omitted because they are judged to have no impact on the judgment of shareholders and investors in view of their scale and nature.

Although the Company has transactions for the provision of security services with the following entities: Japan Post Co., Ltd. (where Ms. Risa Tanaka, an Outside Director designated as an independent director, previously served as Outside Director until June 2022), IMURAYA GROUP CO., LTD. and KOITO MANUFACTURING CO., LTD. (where she currently serves as Outside Director), and Metropolitan Expressway Co., Ltd. (where she currently serves as Outside Audit & Supervisory Board Member), the disclosure of a summary of these transactions is omitted because they are judged to have no impact on the judgment of shareholders and investors in view of their scale and nature.

Although the Company and Tokio Marine Holdings, Inc., for which Mr. Tadashi Handa, the Outside Director designated as an independent director, served as Executive Director until June 2021, and Tokio Marine & Nichido Fire Insurance Co., Ltd., for which he served as Executive Director until March 2022, have transactions for the provision of security services, the disclosure of a summary of these transactions is omitted because they are judged to have no impact on the judgment of shareholders and investors in view of their scale and nature.
Tokio Marine & Nichido Fire Insurance Co., Ltd., where he has served as Full-time Audit & Supervisory Board Member since June 2022 (scheduled to retire in June 2026), on December 26, 2023, received a business improvement order under the Insurance Business Act from the Financial Services Agency regarding acts such as adjustment of insurance premiums on non-life insurance contracts for specific corporations and other acts deemed to constitute a violation of the Antimonopoly Act and inappropriate acts from the perspective of the Act as well as systemic issues underlying such acts. Furthermore, on October 31, 2024, it was subject to a cease and desist order and a surcharge payment order by the Japan Fair Trade Commission due to violations of the Antimonopoly Act.
Furthermore, on March 24, 2025, the company received a business improvement order under the Insurance Business Act from the Financial Services Agency due to acts deemed as potentially violating the Act on the Protection of Personal Information and inappropriate acts from the perspective of the Act, as well as acts deemed as potentially violating the Unfair Competition Prevention Act and inappropriate acts from the perspective of the Act, and systemic issues underlying such acts. Although he was not aware of any of these incidents in advance, he has regularly made proposals from the perspectives of strengthening governance and legal compliance at meetings such as the Board of Directors and the Audit & Supervisory Board. After these facts became known, he has fulfilled his responsibilities by taking measures to prevent recurrence and expressing his opinions on strengthening the internal control system.

Although there are transactions for the provision of security services between the Company and the Norinchukin Bank, where Mr. Shinichiro Nakano, the Outside Director designated as an independent director, served as Managing Director until March 2019, and the Norinchukin Trust & Banking Co., Ltd., where he served as a Standing Advisor until June 2019, the disclosure of a summary of these transactions is omitted because they are judged to have no impact on the judgment of shareholders and investors in view of their scale and nature.

Although the Company and Cabinet Secretariat, for which Mr. Shigetoshi Ikeyama, the Outside Director designated as an independent director, served as Counsellor at Administrative Reform Promotion Office until June 2019, and Ministry of Agriculture, Forestry and Fisheries, for which he served as Councillor (Deputy Director-General for Agricultural Production and Marketing Promotion, Crop Production Bureau) until March 2021, have transactions for the provision of security services, the disclosure of a summary of these transactions is omitted because they are judged to have no impact on the judgment of shareholders and investors in view of their scale and nature.

Although there are transactions for contracted security operations between the Company and Daiwa Securities Group Inc. and Daiwa Securities Co., Ltd., where Mr. Yoshifumi Otsuka , the Outside Director designated as an independent director, served until March 2022, and the Company and Daiwa Institute of Research Ltd., where he served as an Executive Director until March 2024, the disclosure of a summary of these transactions is omitted because they are judged to have no impact on the judgment of shareholders and investors in view of their scale and nature.

Although there are transactions for contracted security operations and other services between the Company and the Tokyo Metropolitan Police Department, where Ms. Toshie Tanaka, the Outside Audit & Supervisory Board Member designated as an independent officer, served as Deputy Superintendent General until April 2024, and the National Police Academy, where she served as President until August 2024, the disclosure of a summary of these transactions is omitted because they are judged to have no impact on the judgment of shareholders and investors in view of their scale and nature.

Remuneration for Directors and Audit & Supervisory Board members with subtotals for each type of remuneration and numbers of recipients for Fiscal Year 2026

With the resolution of General Meeting of Shareholders, the Company decides the maximum remuneration paid to directors should be 600 million yen in total (the number of directors involved in the resolution is 12; June 25, 2024) and as for Audit & Supervisory Board members shall be 120 million yen in total (the number of Audit & Supervisory Board members involved in the resolution is 4; June 30, 1998).

The remuneration paid to directors, based on the following policies decided by the resolution of the Board of Directors, consists with the flat amount determined by the appointment and outside director, other directors besides, and with the productivity-linked remuneration calculated by the performance feedback of each directors by certain standard.

The basic policy and method of determining the remuneration of the Company's directors (excluding outside directors) are determined by the Board of Directors after deliberation and reporting by the Nomination and Remuneration Committee, an optional committee with independent outside directors comprising the majority of members.

The remuneration paid to Audit & Supervisory Board members is flat amount and the specific amount is determined following the standard decided at Board of Directors.

Regarding the remuneration of the directors (excluding outside directors), the fixed compensation notified in advance (so-called bonus) paid in June every year corresponds to the productivity-linked remuneration.

If the company performance payment rate and the individual performance payment rate are both 100%, the payment ratio will be 43.5% of the total annual remuneration (short-term incentive: 29%, medium-to long-term incentive: 14.5%). In addition, the monthly remuneration corresponds to remuneration other than productivity-linked remuneration, and the payment ratio is 56.5% of the total annual remuneration when both the company performance payment rate and the individual performance payment rate are 100% from fiscal year 2026.

Of the remuneration of the Company's directors (excluding outside directors), the monthly remuneration is paid by adding the "role allowance" and "director's allowance" to the basic salary and the amount of payment is set for each rank. Additionally, stock-based compensation calculated at a specified rate is paid. In addition, the standard amount of fixed compensation notified in advance is set in conjunction with the monthly remuneration.

When calculating the fixed compensation notified in advance, which is a productivity-linked remuneration, as for short-term incentives, the company performance payment rate is calculated from the standard index (consolidated operating profit + equity method investment profit + consolidated bonus) processed from consolidated operating income, and as for medium- to long-term incentives, the company performance payment rate is calculated based on the three-year compound annual growth rate of the standard index. In addition, the individual performance payment rate is determined by the degree of achievement of the goals set for each individual. After that, the amount of payment for each individual is finally decided by multiplying the standard amount by each payment rate according to the following formula.

[Formula for calculating the average annual growth rate of the standard index]
Compound annual growth rate = {(standard index ÷ standard index 3 terms ago) to the 1/3 power} -1

[Formula for calculating short-term and medium- to long-term incentives]
Individual payment amount = Standard amount × Company performance payment rate × Individual performance payment rate

The reasons for adopting the above standard index are as follows.

(A) Improving the performance of the entire group, including equity method affiliates is the main role of officers.
(B) Consolidated operating income excluding the effects of fluctuations in bonus payments is considered to be a better indicator of company performance.

The basic policy and method of determining the remuneration of the Company's directors (excluding outside directors) are determined by the Board of Directors after deliberation and reporting by the Nomination and Remuneration Committee, an optional committee with independent outside directors comprising the majority of members.

When determining the amount of productivity-linked remuneration to be paid to directors in the relevant fiscal year, the Board of Directors of the Company is considered to be in a position to most appropriately evaluate each director individually in terms of the individual performance payment rate. Therefore, we delegated to Tsuyoshi Murai, Representative Director and Group CEO, and Naoki Hyakutake, Representative Director, to determine the payment rate based on the achievements of each director’s challenges and achievement targets (KPI) for the relevant fiscal year.

The Board of Directors of the Company has determined that the individual remuneration of directors is determined by the above method, and that the content is in line with the decision policy.

Remuneration for directors of the Company is a matter to be resolved by the Board of Directors in accordance with the rules of the Board of Directors. We have been deliberating on the remuneration system, revision of calculation method for the fixed compensation notified in advance, and performance payment rate and individual performance payment rate for the fixed compensation notified in advance.

In the current fiscal year, at the Board of Directors meeting held on May 13, 2025, we discussed the company performance payment rate and individual performance payment rate regarding the fixed compensation notified in advance scheduled to be paid in June of the same year.

For the reference performance indicator of this fiscal year, actual performance in the previous fiscal year (the fiscal year ended March 2025) was 71,808 million yen (achievement rate: 98.5%) compared to a plan of 72,901 million yen.

Until fiscal year 2025, officers’ remuneration was paid based on the above system. From fiscal year 2026, in light of the fact that management is required to further promote the Company’s sustainable growth and enhancement of corporate value, and to appropriately fulfill their roles and responsibilities, including improving profitability and capital efficiency, the Company has introduced remuneration in the form of acquisition of the Company’s own shares. This is intended to foster greater value-sharing with stakeholders than ever before and to provide incentives for increasing corporate value.

This compensation is paid as a fixed portion based on the officer’s rank, with the purpose of contributing to the Officers’ Shareholding Association for the acquisition of company shares. Through this compensation, we will further increase management’s motivation to contribute to the enhancement of corporate value and promote value sharing with shareholders.

Based on Corporation Law and Financial Instruments and Exchange Law, the Group is maintaining system to secure the rightness of business for other corporations, corporate group which are made up from such company and subsidiaries and agreement for execution of duty as director and employee to law and certificate of incorporation. The basic policies are the following.

1. Ever since the company was founded, we have cherished "the ALSOK Charter", which is composed of the founder's spirit and motto of the company. We have encouraged our business activity in accordance with the charter.
2. We watch the execution of function, by establishing “Board Regulations”, “Internal Memo Regulations”, “Policies of Dividing Duties”, and “Policies of Administrative Authority”, divide administrative authority, and obligate final decision that exceeds authority in charge.
3. We enacted an “Ethical Rule” as standard for the action based on the ethics with sincere performance of duty.
4. We adopted “Compliance Rule” and made one of the directors as the director in charge of compliance, who reports activity conditions to Management Committee and the Board of Directors Meeting if necessary.
5. We established “Internal Report Rule” in order that we can construct the internal report system and operate it appropriately.
6. We established the internal audit exclusive jurisdiction department under the direct control of the President. The department regularly inspects management activities at all departments in the headquarters and branches and reports the results to the auditors and directors.
7. Based on the law of Financial Instruments and Exchange Act, we maintain and operate systems to make the financial reporting properly is maintained and operated.
8. We adequately conduct various education such as law, articles of incorporation, and internal rules for directors and employees.

1. Establish an order concerning primary information that show the execution condition of General Meeting of Shareholders record, Board of Directors record, Management Committee record, request for approval, contracts, account book, financial documents, and other services as to conservation management concerned information.
2. Allow directors and Audit & Supervisory Board members to browse this information anytime.

1. Together with establishing “Risk Management Rule” and naming the risk management officer, we estimated and evaluated risks. Person in charge should report to the Board of Directors Meeting and Management Committee as needed and to come out with needed measures of prevention, reduction, transfer of risks or settle coping strategy when risk occurs.
2. . We establish “Business Continuity Plan”, adjust the systems, and measures when natural disaster occurs.
3. Together with establishing “Information Asset Management Rule” and naming the information asset management officer, we formulate the structure to protect the information asset from threats such as robbery, divulgation, falsification, depredation and disasters

1. The management plan of the mid-term and fiscal year is made based on the business objective.
2. As for the management plan of fiscal year, it is reported to the Director and the Management Committee every month, and the progress management is carried out monthly.
3. "Administrative Authority Regulation" is enacted, and an efficient decision making is done by allotting the administrative authority.
4. The business processing is simplified by the backbone system that uses IT, and is planned to make the management and business more efficient and rationalize.

1. The rule for the business management of the subsidiaries is enacted together with the exclusive competency post set up, and the umbrella administration is carried out. For subsidiaries, besides making report concerning exercise of function, strict guide and supervising toward the subsidiaries is done, by sending the director or the Audit & Supervisory Board member from our company.
2. Significant information concerning the risk of loss for subsidiaries should be reported to subsidiaries competency post based on the rule for the business management, risk correspondence is carried out in cooperation with the group.
3. The subsidiaries shares information with our company through various conferences and in-house electronic bulletin boards, and improve operational efficiency through application of operation system common in subsidiaries. Designing the group`s medium-term management plan and annual management plan, progress management of the plans are carried out the monthly business condition reported from subsidiaries.
4. Our company and the subsidiaries operate the execution of the compliance activity and the internal report system and completely intercept the relation to antisocial forces, and for such occasions, approaches for necessary maintenance of the company structure and cooperation with external specialized agencies are carried out. In cooperation with subsidiaries, internal audit is carried out for significant subsidiaries.

1. The Audit & Supervisory Board secretariat is established, and the employee who assists the duty as the Audit & Supervisory Board member is arranged.
2. The Audit & Supervisory Board secretariat member's personnel affairs are to acquire the agreement of the Audit & Supervisory Board. The Audit & Supervisory Board secretariat members solely comply with command from the Audit & Supervisory Board members.
3. The director and employees report to the Audit & Supervisory Board members about an important matter concerning business.The Audit & Supervisory Board members attend the Board of Directors' Meeting and the Management Committee.The internal audit exclusive competency post performs information exchange regularly together with the Audit & Supervisory Board members.In addition, Audit & Supervisory Board members attend the Board of Directors and Management Committee.
4. Appropriate report is carried out promptly by the directors and employees of the subsidiaries, when the report concerning is desired. Department in charge of internal report, reports significant notify including the notification of subsidiaries to the Audit & Supervisory Board members. Furthermore, for our directors, employees and directors of subsidiaries who reported to Audit & Supervisory Board members are not to be unfavorably-treated for the reason to have been reported.
5. Our company annually set a certain amount of budget to pay expenditures which come about from the exercise of function of Audit & Supervisory Board members. When the Audit & Supervisory Board members charge for such expenditures, it is handled properly.
6. The Audit & Supervisory Board members regularly exchange opinions or interview with the President and each general manager, and audit each office and subsidiary. The Audit & Supervisory Board members regularly hold the skull sessions with Audit Corporation.