Corporate Governance

Basic Policy on Corporate Governance Corporate Governance Report Corporate Governance System Election/dismissal of management executives and policy and procedures for nomination of candidates for Directors Skills Matrix Evaluations of the effectiveness of the Board of Directors Executives’ Compensation Approach toward keeping the parent company and its subsidiary listed

Basic Policy on Corporate Governance

The Group has established a corporate governance system to realize its corporate philosophy and achieve its management targets. It implements initiatives intended to lead to improvement in corporate value and sustainable development from a perspective that considers frameworks for the accurate and effective operation of organizations as internal control systems.

The Company made Ichibanya Co., Ltd. a consolidated subsidiary in December 2015. Ichibanya Co., Ltd. is a listed company, and the Company undertakes the operation of Ichibanya’s internal control system with due respect.

Corporate Governance Report

Corporate Governance System

System for execution of operations

As a company with an Audit & Supervisory Committee, the execution of duties by Directors and the legality and appropriateness of resolutions made by the Board of Directors are monitored, supervised, and audited by the Audit & Supervisory Committee, and five Directors (including four Outside Directors) who are members of the Committee.

The Board of Directors consists of 12 Directors (including four Outside Directors), and it makes decisions regarding the execution of important operations of the Group and monitors and supervises the execution of operations by other Directors and Group companies.

The Group has also established the Nomination Advisory Committee and the Compensation Advisory Committee as voluntary advisory bodies to the Board of Directors, each with the majority of members being Independent Outside Directors and each chaired by an Independent Outside Director, to ensure objectivity and transparency in the processes for making decisions regarding compensation and the election or dismissal of Directors.

The Audit & Supervisory Committee collaborates closely with and directs the Auditing Division, which is responsible for conducting audits of operations and implementing internal controls related to financial reporting, and the Audit & Supervisory Committee confirms the status of conducting audits and evaluating internal control systems. The committee exchanges opinions with the division regularly, conducts inspections together with it, and issues specific instructions. It also audits the Directors’ execution of their duties in an organized way by partnering with the Accounting Auditor and, when necessary, attorneys.

The accounting audit is performed by Deloitte Touche Tohmatsu LLC. We have an audit agreement with this firm to perform audits under the Companies Act and the Financial Instruments and Exchange Act.

Board of Directors

	Directors who are not Audit & Supervisory Committee Members	Directors who are Audit & Supervisory Committee Members
Chair of the Board of Directors	President Hiroshi Urakami
Standing Audit & Supervisory Board Member	Not more than 10	Not more than 8
Number of Directors	7	5
Term of Office of Director	1 year	2 years
Number of Outside Directors(Number of Independent Directors)	-	4(4)
Number of female Directors	-	2
Ratio of female Directors	16.7%

Compensation Advisory Committee

Purpose	Ensure objectivity and transparency in decisions concerning the compensation system and the amounts of compensation, etc. for Directors
Chairperson	Independent Outside Director
Number of Committee Members	6 Directors (of whom four are Outside Directors)
Held	Three times a year in principle

Nomination Advisory Committee

Purpose	Ensure objectivity and transparency in the decision process, such as the election and dismissal of Directors
Chairperson	Independent Outside Director
Number of Committee Members	6 Directors (of whom four are Outside Directors)
Held	Twice a year in principle

Diagram of corporate governance system

The number of each meeting and attendance rate of Directors (FY2025)

For new Directors, the number of meetings and attendance rate after being appointed are listed.

Name	Board of Directors meetings (14 meetings)	Audit & Supervisory Committee (12 meetings)	Compensation Advisory Committee (3 meetings)	Nomination Advisory Committee (2 meetings)
Hiroshi Urakami	100% (14/14 meetings)	-	100% (3/3 meetings)	100% (2/2 meetings)
Yoshiyuki Osawa	100% (14/14 meetings)	-	100% (3/3 meetings)	100% (2/2 meetings)
Kotaro Kawasaki	100% (14/14 meetings)	-	-	-
Yoshiyuki Miyaoku	100% (14/14 meetings)	-	-	-
Tatsumi Yamaguchi	100% (14/14 meetings)	-	-	-
Atsushi Sakuma	100% (14/14 meetings)	-	-	-
Yuichi Okamoto	100% (10/10 meetings)	-	-	-
Tsuneo Kubota	100% (14/14 meetings)	100% (12/12 meetings)	-	-
Atsuko Okajima	100% (14/14 meetings)	100% (12/12 meetings)	100% (3/3 meetings)	100% (2/2 meetings)
Fukuichi Sekine	100% (14/14 meetings)	100% (12/12 meetings)	100% (3/3 meetings)	100% (2/2 meetings)
Yasuyuki Kawasaki	100% (14/14 meetings)	100% (12/12 meetings)	100% (3/3 meetings)	100% (2/2 meetings)
Miwa Yamada	100% (10/10 meetings)	100% (9/9 meetings)	100% (2/2 meetings)	100% (2/2 meetings)

Election/dismissal of management executives and policy and procedures for nomination of candidates for Directors

With regard to the election of management executives and the nomination of candidates for Directors, suitable personnel according to the election criteria shall, upon deliberations by the Nomination Advisory Committee, be resolved as candidates by the Board of Directors, and then brought to the General Meeting of Shareholders for discussions.

Directors (excluding Directors who are Audit & Supervisory Committee Members)	・Persons who have courage to stay committed to the Group’s philosophy and mission statement ・ Persons who have the knowledge, experience and ability to engage in management ・ Persons who aim to enhance the corporate value, and who have the driving force to achieve performance targets ・ Persons with an excellent human nature appropriate for a Director of the Company
Directors who are Audit & Supervisory Committee Members	・ Persons who possess the ability to carry out an audit based on extensive experience and insight ・ Persons with an excellent human nature appropriate for an Audit & Supervisory Committee Member of the Company

Personnel who are to serve as Directors in the future receive practical OJT mainly through gaining experience as directors of business companies as well as OFF-JT mainly through executive development programs and internal training, as part of the Company’s efforts to nurture successors. If the Board of Directors determines, following deliberation by the Nomination Advisory Committee, that a management executive is not consistent with the election criteria, dismissal will be resolved by the Board of Directors and presented to the Shareholders’ Meeting for discussion.

Skills Matrix

The skills of the Board of Directors are identified as skills that should provide the functions necessary for corporate management as the House Foods Group. In addition, the Board of Directors is to be composed of persons of diverse expertise and various experiences, regardless of age or gender, and is to be of a size that ensures flexible decision-making and mutual supervision.

Name		Position	Expertise and experience required for a Director in supervision and execution
Name		Position	Corporate Management	Personnel affairs and Diversity	Finance and Accounting	Legal affairs, Compliance and Risk	Public relations, investor relations	Sustainability	R&D and intellectual property	Global Business	Digital Technology and DX	Quality Assurance	Production and Procurement	Sales, Marketing and Advertisement	Management of other companies
1	Hiroshi Urakami	Representative Director & President	●			●								●	●
2	Yoshiyuki Osawa	Representative Director & Senior Managing Director	●	●	●	●	●							●
3	Kotaro Kawasaki	Senior Managing Director	●				●	●						●	●
4	Yoshiyuki Miyaoku	Director	●						●	●	●	●	●	●	●
5	Tatsumi Yamaguchi	Director	●						●	●		●		●	●
6	Atsushi Sakuma	Director	●				●	●	●		●	●		●
7	Yuichi Okamoto	Director	●										●	●
8	Tsuneo Kubota	Director (Audit & Supervisory Committee member; full time)				●			●
9	Atsuko Okajima	Director (Audit & Supervisory Committee member; outside)		●		●
10	Fukuichi Sekine	Director (Audit & Supervisory Committee member; outside)	●	●		●							●		●
11	Yasuyuki Kawasaki	Director (Audit & Supervisory Committee member; outside)	●	●	●	●				●					●
12	Miwa Yamada	Director (Audit & Supervisory Committee member; outside)		●		●		●		●

Executives

Evaluations of the effectiveness of the Board of Directors

The Company holds regular meetings of the Board of Directors every month except August, as well as meetings to approve financial results, and extraordinary meetings as necessary to make prompt decisions regarding the execution of important business. Outside Directors directly receive explanations of important issues subject to resolutions of the Board of Directors from relevant reporting divisions, administrative organizations, etc. to facilitate their proactive sharing of opinions at meetings of the Board of Directors. Under our performance evaluation system, we conduct self-evaluations and multifaceted evaluations for each Director (excluding Directors who are Audit & Supervisory Committee Members).

The Company has been evaluating the effectiveness of the Board of Directors since FY2022, and it works to improve issues and enhance strengths based on the results of evaluations.

Around December every year, all 12 Directors (including four Outside Directors) in principle answer questionnaires (questions with a four-level rating scale plus an open-ended evaluation section) to enable them to reflect on the activities of the Board of Directors over the past year and themselves identify points that need improvement. Questions are independently created and the points evaluated mainly include (i) the status of deliberations of matters to be resolved by the Board of Directors, (ii) the status of the implementation of matters to be reported to the Board of Directors (iii) the status of the Board of Directors’ functions and operations and (iv) the status of the Audit & Supervisory Committee, Nomination Advisory Committee and Compensation Advisory Committee. In the evaluation of the effectiveness of the Board of Directors conducted in FY2025, an evaluation in comparison with the previous fiscal year was added to the existing questionnaire with a four-level rating scale plus an open-ended section for the provision of an evaluation.

A cycle is implemented whereby the results of questionnaires compiled by the administrative office, the General Affairs Division are used to identify future themes for improvements. These themes are determined by confirming each officer’s quantitative evaluations and responses to open-ended questions. Then, discussions are held at the Board of Directors meetings, and specific actions are implemented in the next fiscal year. Moreover, measures to improve the issues identified in the results not only of the Board of Directors but also the Audit & Supervisory Committee, the Nomination Advisory Committee and the Compensation Advisory Committee are discussed with the relevant departments and individuals.

In addition, evaluations of the improvement measures that have been implemented are also confirmed as appropriate to continually improve the effectiveness of the measures and the Board of Directors and strengthen its capabilities.

<Measures taken in FY2025 based on the results of the evaluation of the effectiveness of the Board of Directors implemented in FY2024>

1) Improvement and enhancement of recommendations regarding matters to be resolved by the Board of Directors
The materials attached to the recommendations regarding matters to be resolved by the Board of Directors were enhanced, including the greater clarification of the content and scope of resolutions and the provision of materials for the decision-making process in a manner that would contribute to the improvement of the quality of decision making.
2) Continued improvement of the regular reporting agenda
Efforts were made to improve measures to secure time for explanations and questions for each agenda item and to improve the quality of discussions. These efforts included adjusting the timing of reports provided during the year and ensuring that reports on measures regarding issues and activities are submitted in the future.
3) Use of external training programs for officers
The Group selected external training programs to improve officer’s capabilities and implemented measures to help enable Executive Directors to acquire necessary knowledge.

● Overview of results
It was found that the functions and operations of the Board of Directors remain adequate, and the Board’s effectiveness, including its cooperation with the Audit & Supervisory Committee, Nomination Advisory Committee and Compensation Advisory Committee. The four-level scores of the seven questions that were the same as in the previous year improved compared to the previous year. Additionally, the evaluations in comparison with the previous fiscal year which were newly introduced in the fiscal year under review indicated that the effectiveness of the Board of Directors had increased.

However, there continued to be some room to improve the content of the recommendations regarding matters to be resolved by the Board of Directors and the content of information about and methods for handling regular reporting matters. Accordingly, improvement measures are continually reviewed.
● Status of responses based on evaluation results
The partial standardization of the formats of business reports was implemented to review, further improve and enhance the methods used for the regular reporting agenda items.

Additionally, the Group further improved the executive overview initiative implemented every six months since FY2024 by the Directors who are responsible for the execution of business. These improvement measures included setting aside time for Internal and Outside Directors to exchange opinions based on the content of the executive overview. This has led to vigorous and constructive discussions.

As described above, the Company strives to further improve the effectiveness of its Board of Directors and further enhance corporate governance through a cycle of strengthening the operation of the Board of Directors in line with the issues identified and implementing improvements. We believe that the effectiveness of the Board of Directors is being ensured in this way.

Executives’ Compensation

Basic design

As our basic policy, the compensation system and the amounts of compensation, etc. for Directors (excluding Directors who are Audit & Supervisory Committee Members) are based on the following points: “it gives motivation for the enhancement of corporate value and sustainable growth, and for achieving the Medium-Term Business Plan in order to realize the Group’s Philosophy,” “it is commensurate with the role and responsibilities of the position held, in light of the size of the company and its social responsibilities,” and “objectivity and transparency are ensured in the decision process of compensation.” They are determined by the Board of Directors after deliberations of the Compensation Advisory Committee.

The compensation system and the amounts of compensation, etc. for the Directors who are Audit & Supervisory Committee Members are deliberated by the Compensation Advisory Committee at the request of the Audit & Supervisory Committee, and after the deliberation results are reported to the Audit & Supervisory Committee, determined by consultation among the Directors who are Audit & Supervisory Committee Members.

Composition of compensation for Directors (excluding Directors who are Audit & Supervisory Committee Members)

Compensation type			Evaluation indicators, method of payment, etc.	Percentage of compensation	Performance-linked
Fixed compensation			Add compensation according to the role to the compensation level determined by position, and pay as monthly compensation	60%
Short-term incentives	Single-year performance-linked compensation	Evaluation of company performance	Based on the indicator determined by the Board of Directors, evaluate the degree of achievement of the relevant indicator for the Group or the operating company each Director is responsible for on a single fiscal-year basis, and pay as bonuses according to the results of the evaluation	25%	○
Short-term incentives	Single-year performance-linked compensation	Evaluation of individual performance	Define the degree of achievement of targets set by each Director as an evaluation indicator, and pay as bonuses according to the degree of achievement	25%	○
Medium- to long-term incentives	Advance-issue-type restricted stock compensation		Pay for the purpose of motivation for the continuous improvement of corporate value and further encouraging value sharing with shareholders of the Company	10%
Medium- to long-term incentives	Performance-linked, restricted stock compensation		In addition to the above, pay for the purpose of better incentivizing to Executive Directors to achieve the medium-term business plans （adopt non-financial indicators prescribed in medium-term business plans as evaluation indicators for the stock compensation）	5%	○

Compensation for Directors who are Audit & Supervisory Committee Members consists of only fixed compensation.

＜Outline of the linkage with performance for Directors (excluding Directors who are Audit & Supervisory Committee Members)＞

Short-term incentives:
- Overall management as a member of the Board of Directors is evaluated mainly based on the Company’s performance (financial indicators), and results of management execution within each area of responsibility are evaluated mainly based on individual performance, and vary within the range of 70%–130% based on two evaluation indicators. (In the event that performance fluctuates significantly, the details are deliberated by the Compensation Advisory Committee, and short-term incentives vary within the range of 0–150%.)
- Formula:
- Standard amount by position ×（1+Company performance evaluation coefficient *1+Individual performance evaluation coefficient *1）
- *1:Varies from -15% to +15% depending on performance
- [Indicator of evaluation of the Company’s performance in relation to bonus]
- Bonus for final year of medium-term business plan: Respective status of progress in achieving EBITDA and ROIC
- Bonus in relation to business years other than the above: Status of progress in achieving EBITDA
Medium- to long-term incentives:
- Vary within the range of 10%–190% based on evaluation indicators (non-financial indicators) listed in the medium-term business goals.
- Formula:
- Standard amount by position ×（1+”Social” coefficient*2+”employees and their families” coefficient*2）
- *2:Varies from -45% to +45% depending on performance

Total compensation, etc., by type, and number of eligible executives by executive category (Status for FY2025)

Executive category	Total compensation, etc. (millions of yen)	Compensation, etc., by type (millions of yen)				Number of eligible executives
Executive category	Total compensation, etc. (millions of yen)	Monthly compensation (fixed compensation)	Performance-linked compensation for single fiscal year	Advance-issue-type restricted stock compensation	Performance-linked restricted stock compensation	Number of eligible executives
Directors (excluding Audit & Supervisory Committee Members and Outside Directors)	281	166	67	31	16	7
Directors (Audit & Supervisory Committee Members) (excluding Outside Directors)	24	24	-	-	-	1
Outside Executives	73	73	-	-	-	5

Total amounts for compensation for Directors and other items do not include the employee portion of salaries for Directors who serve concurrently as employees.

Details about fees paid to audit accountants (Status for FY2025)

category	Previous consolidated fiscal year		Consolidated fiscal year under review
category	Fees for Audit Certification Services (millions of yen)	Fees for Other Services (millions of yen)	Fees for Audit Certification Services (millions of yen)	Fees for Other Services (millions of yen)
Reporting Company	70	5	68	14
Consolidated Subsidiary	80	-	83	-
Total	150	5	151	14

Previous consolidated fiscal year: Not any applicable items about fees for other services.
Consolidated fiscal year under review: Fees for other services account for advisory services regarding internal control.

Approach toward keeping the parent company and its subsidiary listed

As the parent company, House Foods Group Inc. exercises a certainlevel of supervisory functions over Ichibanya Co., Ltd. For example, seconding a Director to the subsidiary as a non-standing Director, having the subsidiary regularly report on its business performance at its Board of Directors’ meetings, and resolving at its Management Committee what proposals should be included in the agenda of the General Meeting of Shareholders of the subsidiary. On the other hand, the Group respects decisions on the execution of daily operations made by the subsidiary’s management, which excels at advancing the restaurant business. Furthermore, in order to secure the independence of the Ichibanya Board of Directors, the structure of this Board was changed starting in May 2024 to ensure that half of the eight directors of Ichibanya be outside directors who are also members of the Audit & Supervisory Committee, while decisions regarding transactions with the Group of high importance would be made following deliberation and investigation by a special committee comprised of the director in charge of corporate planning along with four independent, outside directors after seeking the opinion of the Audit & Supervisory Committee, ensuring a structure that prevents the interests of shareholders not of the Company from being unduly harmed.

The Group and the subsidiary, whose business models are different, work together to strengthen collaboration and promote cooperation themes while respecting each other’s uniqueness, thereby enabling all three parties (including franchise owners who are engaged in the management of stores) to enjoy the benefits together. In this way, the Group believes it is also contributing benefits to shareholders of the subsidiary who do not hold shares in the Company. The Group’s policy is to keep both itself and the subsidiary listed while ensuring the effectiveness of the corporate governance system of the subsidiary.

Governance data is available in the link below.

ESG Data Book