Policy for Constructive Dialogue with Shareholders

Basic Policy

The Alfresa Group discloses information in a timely manner that ensures transparency, fairness, continuity, timeliness, and interactivity, in accordance with our disclosure policy. Specifically, we disclose information in compliance with the Companies Act, the Financial Instruments and Exchange Act, and other laws and regulations, as well as the rules for timely disclosure of corporate information stipulated in the securities listing regulations of the Tokyo Stock Exchange. We also actively and equitably disclose information that we believe will help further shareholders and investors understanding regarding information that is not stipulated by any laws, regulations, or timely disclosure rules.

Fair Disclosure

From a fair disclosure perspective, we actively and fairly disclose financial information to shareholders and investors, such as our management status, as well as non-financial information such as environmental, CSR, and corporate governance-related matters.

System

In order to ensure the consistency and uniformity of information disclosure, representative directors, the Information Disclosure Manager responsible for the Information Disclosure Department, and the Information Disclosure Department (Public Relations and Investor Relations Department) are designated as the officers and employees responsible for the Alfresa Group’s information disclosure. The Information Disclosure Department collaborates with related departments within the company to collect information necessary for constructive dialogue with shareholders and investors. The disclosure of important information stipulated in the Fair Disclosure Rules is deliberated by the Disclosure Committee, which is composed of representative directors, the Information Disclosure Manager, and the head of the Information Disclosure Department (head of the Public Relations and Investor Relations Department), as necessary, and the Board of Directors consulted as appropriate.

Implementation of Dialogue with Shareholders

The Information Disclosure Manager is designated as the person responsible for dialogue, and we make every effort to ensure that senior management is available to conduct dialogue within a reasonable range.
In the immediately preceding fiscal year, we conducted 99 individual interviews handled mainly by the Information Disclosure Manager or the head of the Information Disclosure Department. The shareholders who engaged in dialogue were mainly domestic and foreign investors with quantitative, growth, GARP, and value investment styles (fund managers, analysts, ESG officers, and officers with voting rights). The main themes were our Medium- to Long-Term Vision, the mid-term management plan, the industry environment and business strategies, digital transformation (DX), financial and capital strategies, and ESG initiatives including corporate governance.
During the dialogue, we explained in detail the market environment, progress made with the mid-term management plan including business strategy, reducing cross-shareholdings, and the financial capital strategy aimed at improving capital efficiency, as well as CO2 reduction, diversity, and corporate governance initiatives such as the operational status of the Board of Directors and compliance. As a result, we believe that we have deepened their understanding of the Group. In addition, we have gained a deeper awareness of shareholder expectations of fostering a corporate culture that places the highest priority on compliance, and of further improving profitability and capital efficiency. The content of the dialogue with shareholders is reported to the Representative Director and the Director of Finance when necessary, and to the Board of Directors once every quarter.
Based on the dialogue with shareholders, we presented the Alfresa Group’s Medium- to Long-Term Vision on May 15, 2023. We also incorporated topics of shareholder interest relating primarily to the Medium- to Long-Term Vision into our Integrated Report 2023 and worked to further enhance the quality of the Integrated Report.

[Action to implement management that is conscious of cost of capital and stock price]
The price-to-book ratio (P/B ratio) of the Company’s stock price has remained below 1.0 since fiscal 2020. Recognizing this as an issue, we announced the Alfresa Group’s Medium- to Long-Term Vision in May 2023, based primarily on the guidelines published by the Tokyo Stock Exchange entitled “Action to Implement Management that is Conscious of Cost of Capital and Stock Price.” We will continue steadily pursuing the Alfresa Group’s Medium- to Long-Term Vision to enhance our corporate value, thereby improving our market valuation.