Corporate Governance

JX Advanced Metals strengthens corporate governance across the Group to enhance management soundness and transparency and reinforce and maintain our management foundation. Through these efforts, we aim to achieve sustainable growth and medium- to long-term improvement in corporate value for the JX Advanced Metals Group while fulfilling our responsibilities to shareholders and other stakeholders.

In May 2023, JX Advanced Metals announced the commencement of preparations for listing of shares on the Tokyo Stock Exchange. We have since been taking steps to strengthen our corporate governance structure further.
We transitioned to a company with an Audit & Supervisory Committee in June 2023. We also delegated part of decisions of execution of important operations to the President & Representative Director and revised the standards for matters submitted to the Board of Directors. These efforts aimed to enhance discussions at the Board on key topics, expand opportunities for director training and deepening company understanding, and further improve the flexibility and speed of business execution.
We also established the Nomination and Compensation Advisory Committee in November 2023. The committee conducted thorough discussions and finalized a succession plan, a skills matrix, independence criteria, and other nomination matters. Regarding compensation, the committee reviewed the executive remuneration system and introduced a share-based remuneration system.
The Company also established the Group Basic Policy on Corporate Governance, evaluated the effectiveness of the Board of Directors, and reviewed the significance of cross-shareholdings, advancing overall governance initiatives.
After strengthening these governance frameworks, we applied for a new listing on the Tokyo Stock Exchange in October 2024. The Exchange confirmed our governance framework was appropriate and ensured independence, and approved our Prime Market listing in February 2025, the market with the most stringent requirements. Institutional investors and others subsequently recognized our Focus Businesses, positioned as the core of our growth strategy, for holding numerous global top-share products in promising markets. Our management structure was also valued for its ability to drive portfolio reform with an approach unconstrained by traditional frameworks. These evaluations led to our new listing in March 2025.

The Company appoints Executive Officers to function as a body to flexibly execute business based on the decisions of the Board of Directors. We have established the Executive Meeting as an advisory body to the President to discuss important issues related to the Company’s management and report on or communicate regarding the business execution situation. The Executive Meeting consists of the President and the Executive Officers nominated by the President. In addition, a Full-Time Audit and Supervisory Committee Member may attend meetings of the Executive Meeting and can express opinions in cases where it is deemed necessary.

The Internal Auditing Department is an internal audit unit, independent from other divisions, that reports directly to the president. The department conducts internal audits across the entire JX Advanced Metals Group, including routine audits in line with the internal audit plan, annual audits, and special audits carried out under specific instructions from the president. The Internal Auditing Department reports auditing results to the Company president, as well as to the Executive Meeting and the Audit & Supervisory Committee on a regular basis. Furthermore, the department also receives regular information on the internal audit results of the audit departments of the listed subsidiaries concerned.

To enable accounting auditors to conduct high-quality audits, the Company ensures they have sufficient time and opportunities for interviews with the management and strives to facilitate cooperation between accounting auditors and the Audit and Supervisory Committee Members, the Internal Auditing Department, and the Outside Directors. We also strive to respond appropriately when the accounting auditor has discovered any irregularities or pointed out any deficiencies or problems.

1. Roles and Functions of Outside Directors
   Given the increasing demand of the society for enhanced corporate governance and internal control, the Company appoints the Outside Directors to equip the Company with a checking function based on an outside perspective as well as decision-making function based on a new perspective. As of the end of June 2025, 6 of the 11 directors (2 directors who are not Audit & Supervisory Committee members and 4 Audit & Supervisory Committee members) are outside directors.
2. Independence Criteria for Outside Directors
   To effectively guarantee the independence of the Independent Outside Directors, the Company formulates and discloses the independence criteria for the Independent Outside Directors based on the independence criteria established by the Tokyo Stock Exchange.

   Independence Criteria for Independent Outside Directors

   The Company determines that any Outside Directors who satisfy the requirements below to be truly independent officers for whom there is no risk of conflicts of interest with general shareholders.

   1. 1.Outside Directors must not be any of the people described below.
      1. Major business partners*¹ of the Company or individuals who execute their business
      2. Business operators*² to whom the Company is a major business partner or individuals who execute their business
      3. Major lenders*³ of the Company or individuals who execute their business
      4. Legal experts, accounting experts, or consultants*⁴ who have received a lot of compensation from the Company other than compensation payable to executives (or any such experts or consultants who belong to corporations, unions, or other organizations that have received such compensation, excluding individuals who are categorized under (5) below)
      5. The Company’s accounting auditor or certified public accountants who belong to an auditing firm acting as the accounting auditor
      6. Individuals*⁵ who have received significant contributions from the Company (or individuals who run the business of corporations, unions, or other organizations that have received such contributions)
      7. Major shareholders*⁶ of the Company or individuals who execute their business
      1. Any customer responsible for over 2% of the Company’s consolidated sales during any of the most recent three fiscal years
      2. Any business operator responsible for over 2% of the Company’s consolidated sales or over 10 million yen in sales, whichever is higher, during any of the most recent three fiscal years
      3. Any lender responsible for loaning the Company over 2% of its consolidated total assets as of the final day of any of the most recent three fiscal years
      4. Any individual who has received over 10 million yen in total compensation from the Company during any of the most recent three fiscal years (or any individual who belongs to an organization that has received compensation from the Company that exceeds 2% of that organization’s sales or 10 million yen, whichever is higher, during any of the most recent three fiscal years)
      5. Any individual who has received over 10 million yen in total contributions from the Company during any of the most recent three fiscal years (or any individual who belongs to an organization that has received total contributions from the Company that exceed 2% of that organization’s total income or 10 million yen, whichever is higher, during any of the most recent three fiscal years)
      6. Any shareholder who has at least 10% of the Company’s total voting rights
   2. 2.Outside Directors must not have a second-degree or closer relative who corresponded to any of the following during any of the most recent three years (excluding unimportant individuals).
      1. Any individual who executes business for the Company or one of its subsidiaries
      2. Any individual who corresponds to any of 1. (1) to 1. (7) above
   3. 3.In addition, the Outside Directors must not pose any risk of creating a conflict of interest with the Company, regardless of sections 1 and 2 above.

   End

3. Outside Director support system
   We provide the following support as necessary to ensure that the Outside Directors can effectively fulfill their duties and responsibilities.
   (i) To facilitate comprehensive deliberations by the Board of Directors, we provide the Outside Directors with advance explanations of major agenda items for the meetings of the Board of Directors.
   (ii) To deepen the Outside Directors’ understanding of our business, they are given opportunities to visit the Group’s operating sites.
   (iii) We hold meetings attended only by the Independent Outside Directors so that they can collect information on the agenda items of the meetings of the Board of Directors and other information related to the Group management and exchange opinions on such information and try to get on the same page.
   

Each Group company is placed under the jurisdiction of the appropriate business, technology, or corporate department of the Company based on its business line, and the execution of its operations is managed and supervised by that department. Important matters regarding the business management of individual Group companies are reported to the Company through the relevant supervising departments. If necessary, they are also reported or discussed at the Board of Directors, Executive Meeting, and other important meetings.

In nominating candidates for directors and senior management, JX Advanced Metals places emphasis on selecting individuals able to contribute to the sustainable growth of the Group and the enhancement of long-term corporate value. For directors, we focus on whether candidates can provide effective management oversight, while for senior management, we consider whether individuals can make timely and decisive decisions on important business matters. In both cases, we take a comprehensive view of each person’s track record, experience, skills, knowledge, capabilities, and character, and select candidates considered to be suitable, physically and mentally sound, and of high integrity. Nominations and appointments are determined by a resolution of the Board of Directors following deliberation by the Nomination and Compensation Advisory Committee. We give particular consideration to our skill matrix when nominating director candidates to ensure the Board as a whole maintains a well-balanced mix of knowledge, experience, and capabilities. We also take into account diversity and appropriate board size to foster open and constructive discussions, thereby enhancing the Board’s effectiveness. For senior management appointments, we place emphasis on individuals with a deep understanding of the Group and our businesses, as well as relevant expertise and experience.
We nominate as candidates for directors on the Audit and Supervisory Committee individuals with the track record, experience, skills, knowledge, capabilities, and character required to fulfill their role of auditing and supervising the execution of director duties, in addition to the above policy. Special emphasis is placed on knowledge and experience in finance, accounting, and legal affairs. The nomination of such candidates ensures that in principle, at least one member possesses sufficient expertise in finance and accounting, while also considering the overall balance of knowledge, experience, and capabilities within the Audit and Supervisory Committee.
We nominate outside director candidates with the track record, experience, skills, knowledge, capabilities, and character required to fulfill their role of supervising management from an independent and objective standpoint, in addition to the above policy. We also ensure such candidates meet the independence criteria set forth by the Tokyo Stock Exchange, as well as the independence standards established by the Company, and confirm that no issues exist regarding candidate independence.
The dismissal of senior management members is deliberated by the Nomination and Compensation Advisory Committee and resolved by the Board of Directors when members no longer satisfy the requirements set forth in our selection policy, violate laws or the Articles of Incorporation, or otherwise become significantly impaired in carrying out their duties.

We identified the skills that the Board of Directors as a whole should possess, taking into account the JX Advanced Metals Group Long-Term Vision 2040, formulated in June 2019 and partially revised in May 2023. The current balance of knowledge, experience, and capabilities across the Board is as follows.

JX Advanced Metals leveraged our listing on the Prime Market of the Tokyo Stock Exchange as an opportunity to review our executive compensation system, aiming to establish a system that supports sustainable growth of the Group, enhances corporate value over the medium to long term, and fulfills our responsibility to shareholders and other stakeholders. With this vision in mind, the Board of Directors reviewed our system upon deliberation by the Nomination and Compensation Advisory Committee.
Executive officer compensation at the time of listing consisted of fixed compensation and short-term performance-linked compensation. However, the General Meeting of Shareholders held on June 27, 2025, approved the introduction of a stock compensation plan as long-term performance-linked compensation. We deemed it appropriate to increase the proportion of performance-linked compensation in the overall package to further enhance officers’ awareness of contributing to business performance. We also deemed it appropriate to heighten executive officer awareness of contributing to medium- to long-term performance improvement and corporate value growth by clarifying the link between executive officer compensation, Company performance, and stock value, and by reinforcing value sharing with shareholders.
This stock compensation plan delivers Company shares as long-term performance-linked compensation under transfer restriction agreements with eligible executives, effective through-out their term of office. The Company will acquire all shares without compensation if an officer violates the transfer restriction agreement by attempting to transfer any portion of the shares, or if the officer is dismissed or resigns due to misconduct.

■ Fixed Compensation (Cash)
We determine the annual amount of fixed compensation based on a comprehensive assessment of full-time or part-time status, position as director or executive officer, and roles and responsibilities. This amount is then paid in monthly installments.
Compensation for outside directors not on the Audit & Supervisory Committee consists only of fixed compensation to support performance in carrying out full oversight responsibilities. Directors on the Audit & Supervisory Committee also receive only fixed compensation to support performance in carrying out full oversight and auditing responsibilities.

■ Short-Term Performance-Linked Compensation (Cash)
Short-term performance-linked compensation reflects performance indicators tied to annual results (company-wide performance) as well as the degree of achievement of individually set business targets (individual evaluation). The payout ratio ranges from 0% to 200% depending on the degree of achievement of targets, with a 100% payout at target achievement.

• *Figures in parentheses show the evaluation weight applied to directors other than the Representative Director. We do not apply an individual evaluation for the Representative Director, given the ultimate responsibility the role bears for company-wide performance.
• *Payout ratio for all short-term performance-linked compensation is set at 0% if consolidated operating profit is negative.%。

■■ Long-Term Performance-Linked Compensation (Stock)
Long-term performance-linked compensation consists of a fixed portion, which grants a set number of shares based on position, and a performance-linked portion, in which the number of shares granted varies according to degree of achievement of multi-year business targets. The performance-linked portion ranges from 0% to 190% depending on performance in targets, with a 100% payout at target achievement.

• *We calculate Total Shareholder Return (TSR) during the evaluation period as Company TSR divided by the TOPIX growth rate (including dividend yield).

JX Advanced Metals provides directors opportunities to receive the training necessary to fulfill their roles and responsibilities. For outside directors, we explain key aspects of our business at the time of appointment, and continue to provide opportunities to raise understanding of the Group through initiatives such as site visits to Group facilities. Fiscal 2024 training for directors and executive officers focused on the prevention of insider trading, aiming to strengthen our compliance system in preparation for the listing of our shares on the Tokyo Stock Exchange. Further efforts to enhance outside director understanding of the Group included providing prior explanations of important Board agenda items before each meeting, arranging site visits to Group facilities, enabling outside directors to observe meetings of the Group Executive Meeting and the Sustainability Committee, and holding meetings exclusively for independent outside directors. Looking ahead, we will continue to improve our training system for directors and executive officers , expand visits by outside directors to domestic and overseas Group facilities, and discuss important topics and explain important matters outside of the Board of Directors meetings.

The Group established the Basic Policy for Establishment and Operation of Internal Control Systems. Based on this policy, we established internal control systems to ensure the efficiency and appropriateness of our operations. In addition to receiving reports on the status of internal control activities from each division of the Company, we conduct surveys of the status of development and operation of internal control systems at major Group companies. The status of the development and operation of internal control systems is, in principle, monitored once a year by the Executive Meeting. While taking into consideration the business characteristics of each company, we are continuously improving internal control systems for the Group as a whole. The Group also established the Internal Control Department on April 1, 2024. This department strengthens internal controls of the Group by conducting operational risk reviews and providing internal control training.

JX Advanced Metals places each Group company under the supervision of the appropriate business, technology, or corporate division of the Company, according the Group company’s business. Our divisions then manage and supervise business execution of their respective Group companies. Important matters regarding the business management of individual Group companies are reported to the Company through the relevant supervising departments. If necessary, such matters are also reported or discussed at the Board of Directors, Executive Meeting, and other important meetings.
We address the governance of our listed subsidiary and affiliate from the perspective of sustainable growth and enhancement of corporate value for the Group as a whole. Our basic policy is to respect the autonomy of these bodies, ensure their independence, and foster mutual coordination and cooperation to support the overall development of the Group by leveraging our collective strength. The Company reasonably determines transaction terms with our listed subsidiaries and affiliate through discussions and negotiations, basing terms on general contract terms with other customers and market prices, thereby ensuring the protection of minority shareholders. JX Advanced Metals has not entered into any agreements with our listed subsidiary or affiliate that restrict the business activities of these organizations.
We regularly review whether it remains appropriate to maintain our listed subsidiary and affiliate from the standpoint of enhancing corporate value and capital efficiency for the Group as a whole. The Board of Directors also deliberates the rationale for maintaining these companies and evaluates the effectiveness of their governance structures. We require that at least one-third of directors at each listed subsidiary and affiliate be independent outside directors to secure independent decision-making at these companies. If the Company dispatches directors to our listed subsidiary or affiliate, we first hold discussions with the relevant company. We confirm the necessity for both sides and ensure the arrangement does not hinder sound decision-making at the listed subsidiary or affiliate.
Toho Titanium Co., Ltd. is a listed subsidiary of JX Advanced Metals. We position businesses that gain a global competitive advantage through technological differentiation, such as advanced materials, as Focus Businesses and the core of our growth strategy. We maintain Toho Titanium as a subsidiary because the company serves as an important supplier of high-quality materials that sustain this competitiveness. Further, we need close collaboration with Toho Titanium in the advanced materials field, where new technologies are commercialized at remarkable speed, to ensure the quick creation and development of next-generation product groups. Maruwn Co., Ltd. is a listed affiliate of JX Advanced Metals. We maintain Maruwn as an affiliate because the company plays an important role in our logistics operations. Both Toho Titanium and Maruwn must have the means to raise funds flexibly and directly from the capital markets for us to maximize synergies and support the sustainable growth of these companies. Maintaining these companies as a listed subsidiary and a listed affiliate also sustains employee motivation and helps attract talented personnel. For these reasons, JX Advanced Metals considers the listed status of these companies to be fully justified.

ENEOS Holdings, Inc. (ENEOSHD) is an associated company of JX Advanced Metals. Each ENEOSHD business is segmented separately, and as of the date of this report, we face no competition or conflicts affecting the expansion of the Group Metals Business. ENEOSHD has also not announced any decision that would create such competition within the ENEOS Group.
The JX Advanced Metals Group operates under the policy of contributing to a sustainable society as a global leader in semiconductor and information and communication materials, under the JX Advanced Metals Group Long-Term Vision 2040. To this end, we do not expect to engage in businesses that would compete with other segments within the ENEOS Group.
Management of the Group does not define any matters that require prior approval from or consultation with ENEOSHD. In addition, the 11 directors of JX Advanced Metals include 6 outside directors. Of these outside directors, 5 qualify as independent under the independence criteria. One director on the Audit & Supervisory Committee also serves as a director of ENEOSHD. However, we examine whether an appointment would strengthen our governance system before nominating any individual affiliated with ENEOSHD as a director of JX Advanced Metals. We then consult with the Nomination and Compensation Advisory Committee to confirm that the appointment would not hinder sound corporate management or the protection of minority shareholders. Based on these measures, we determine that ENEOSHD does not pose any risk of obstructing independent decision-making in the management of the Company.
We established and operate the Nomination and Compensation Advisory Committee, composed of a majority of independent outside directors and chaired by an independent outside director. The committee discusses important matters related to the appointment and dismissal of directors and executive compensation based on consultations from the Board of Directors. Such important matters include those concerning personnel proposals for directors (including election and dismissal), the succession plan for the president, and policies and systems for executive remuneration, based on consultations from the Board of Directors.
JX Advanced Metals has not entered into any contracts with ENEOSHD that restrict management of the Company.

In principle, JX Advanced Metals does not hold shares of listed companies. However, we do hold such shares as cross-shareholdings when the shares belong to a company that plays an important role in Group businesses, or when we determine that holding the shares contributes to the sustainable growth and medium- to long-term corporate value of the Group.
The Board of Directors reviews exceptional cross-shareholdings in detail, examining whether the purpose of each holding is appropriate and whether the benefits and risks are commensurate with the cost of capital. The Board regularly verifies the necessity of these holdings and discloses the results of its review.
We exercise voting rights on cross-shareholdings by considering the significance and purpose of each holding and judging each proposal individually against the standard of whether it contributes to the sustainable growth and enhancement of medium- to long-term corporate value for both the Group and the issuer. During such deliberations, we request explanations from the issuing company regarding the proposals presented when necessary. We exercise particular caution when the issuer faces a deteriorating business environment, serious misconduct, or governance concerns.
We do not suggest reducing business transactions or interfere in any way with the sale of Company shares if shareholders that hold our shares as cross-shareholdings (“Cross-Shareholding Shareholders”) indicate an intention to sell. In addition, the Company examines the economic rationale of transactions with Cross-Shareholding Shareholders and avoids any transactions that would harm the shared interests of the Company and our shareholders.

The JX Advanced Metals Group (hereinafter the “Group”) conducts internal audits across the entire Group to examine, review, and evaluate the status of management control, risk management, control processes, and related activities (hereinafter collectively, “GRC”) from the perspective of effectiveness and efficiency. We also provide information based on audit results and offers recommendations for improvement concerning GRC. The IA Department serves as the unit responsible for supervising these internal audit activities.
The IA Department formulates a medium-term plan covering roughly three fiscal years and annual plans to build an appropriate internal audit framework on a group-wide basis. The IA Department conducts internal audits in line with these plans. The IA Department conducts internal audits of Group companies each fiscal year in cooperation with Audit & Supervisory Board members dispatched from the Company to Group companies.
In accordance with the results of the internal audit, recommendations for improvement are provided to the organization subject to internal audit on an as-needed basis, and the IA Department monitors the progress of corrective actions undertaken by the organization. The IA Department reports the results of the internal audit to the president of the Company, and on a periodical basis, to other senior management members and the Audit & Supervisory Committee of the Company.