Nippon Sheet Glass : Corporate Governance Report

[Provisional Translation Only]

This English translation of the original Japanese document is provided solely for information purposes. Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

Corporate Governance Report

Last Update: 12 July 2021

Nippon Sheet Glass Company, Limited

Shigeki Mori

Representative Executive Officer, President and CEO

Contact: Company Secretary Office

(81)3-5443-9522

Securities Code: 5202

http://www.nsg.co.jp

The corporate governance of Nippon Sheet Glass Company, Limited (the "Company") is described below.

I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

1. Basic Views

Nippon Sheet Glass Group (the "NSG Group"and the "Group") has established the "NSG Group Corporate Governance Guidelines" below as constituting our basic views on the matter of corporate governance.

The Group considers achievement of an advanced level of corporate governance a key management objective and will implement the following.

1. Organizational structure
2. 1. The Group's ultimate parent company, Nippon Sheet Glass Company, Limited will adopt a
      Company with Three-Committee structure and the Company hence will establish and maintain the Board of Directors (the "Board"), the Nomination Committee, the Audit Committee, the Compensation Committee (individually referred to as the "Committee") and office of Executive Officers.
   2. The Board will authorize the Executive Officers to make decisions on the execution of

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businesses for the Company within the scope as permitted by law, thereby facilitating separation between business execution and oversight, enhancing the transparency of the management processes and strengthening the Board supervisory function over the executive management.

1. 1. The Company will establish and maintain an internal control system operating on a Group- wide basis including in relation to financial reporting (J-SOX).
2. Stakeholders Communication
3. 1. The Group aims to be judged by as best in class by our many stakeholder groups in a

variety of settings across the whole group (including shareholders, customers, suppliers and local communities) from their own perspectives and also will develop, maintain and enhance good relationship with any of such groups.

1. In relation to the matter of disclosure of corporate information whether or not it is to be made according to legal requirements, the Group always aims to act in a timely and appropriate manner both in terms of the substance and form, with a view to maintaining

and invariably enhancing transparency of management of the Group.

(3) Code of Conduct

The Group will, in order to materialize those values, create the NSG Group Code of Ethics whichall entities and employees etc of the Group must comply with and will be regularly reviewed in light of the status of implementation/embedding within the Group and the contents.

https://www.nsg.com/~/media/NSG/Site Content/sustainability/Downloads attached to pages in sustainability section/CorporateGovernanceGuideline2021_07_E.pdf

[Reasons for Non-compliance with the Principles of the Corporate Governance Code] [updated]The Company implements all of the principles of the Corporate Governance Code (before revision dated June 11, 2021), except for the following.

【Principle 4.11 Preconditions for Board and Kansayaku Board Effectiveness】

We have been working on global projects focused on inclusions & diversity since 2017 and are working on promoting diversity at our corporate body including the Board of Directors. . Regarding directors, one out of six is a foreign director in terms of internationality, and all of them are male at the moment in terms of gender, but the Nomination Committee recognizes the appointment of female directors as an important management issue and continues to be qualified. We are working on the selection of possible female candidates. Of the 13 executive

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officers (including 1 person who also serves as directors), which is also an organization under the corporate law, 6 persons are foreign executive officers and 2 persons are female executive officers. The Group will continue to strongly promote the diversification of directors and executive officers.

[Disclosure Based on the Principles of the Corporate Governance Code] [updated]【Principle 1.4 Cross-Shareholdings】

The Company and its material subsidiaries do not own politically held listed shares as a matter of principle except where such shareholding is or becomes necessary for the purpose of enhancing our sustainable enterprise value and serving the important business purposes such as strategic business alliance, the intent of which is adopted for as "Policy on nil ownership of politically held listed shares" disclosed in our website.

https://www.nsg.com/~/media/NSG/Site Content/sustainability/Downloads attached to pages in sustainability section/CorporateGovernanceGuideline2021_07_E.pdf

【Principle 1.7 Related Party Transactions】

The Group has established strict procedure concerning the Related Party Transactions in order not to harm the common interest of the Company's shareholders according to the relevant laws and regulations such as Companies Act and its internal policies.

Visit our website for details.

https://www.nsg.com/~/media/NSG/Site Content/sustainability/Downloads attached to pages in sustainability section/Principle_1_7_1812_E.pdf

【Principle 2.6 Roles of Corporate Pension Funds as Asset Owners】

According to the revision of asset management guidelines for defined benefit plans of Japan, we have revised the pension management policy in March 2018 and newly organized the asset management committee . We also have placed the staff in charge of the matter in Treasury and HR and have been conducting pension asset management while appropriately educating those in charge of asset management and operation in order for them to acquire necessary expertise in the area. In relation to the stewardship activities we use the opportunities of quarterly reports made by each fund manager by monitoring their activities in such respects. No conflict of interest will arise in regard to exercise of the voting rights as such exercise vests in the sole discretion of the fund managers insofar as the managed assets are concerned.

We continue to seek, with the aid of external support as well as expertise accumulated

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internally within the Group, enhancing the expert quality of the asset managing process and thus strengthening the function of the pension scheme as asset owners.

【Principle 3.1 Full Disclosure】

1. Business principles, business strategies and business plans
   The Group has formulated the management principles "Our Vision" , Medium Term Vision and Medium Term Plan respectively and made them publicly available in our website and various publications etc.

Management Principles "Our Vision"

Mission

Changing our surroundings, improving our world

Aspiration

Through innovation, becoming the most trusted partner in all industries we work in

Core Values

• Respect others and unleash their potential.
• Exemplify trust and integrity.
• Ensure efforts to serve society.
• Take the initiative.
• Embrace challenges and learn from failure.
• Follow through to get results.https://www.nsg.com/en/about-nsg/our-vision

The NSG Group's Medium Term Vision :

A global glass supplier contributing to the world with high value-added glass products and services. https://www.nsg.com/en/investors/management-policy-and-sustainability/management-strategy

Medium Term Plan "Revival plan 24"(RP24) https://www.nsg.com/-/media/nsg/site-content/ir/ir-presentations/mtprp24presentation2021_e01.pdf

(ii) Basic views and guidelines on corporate governance (NSG Group Corporate Governance Guidelines)

The Group has crystallized its basic views and guidelines on corporate governance in

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the form of NSG Group Corporate Governance Guidelines and uploaded it in our website.

https://www.nsg.com/~/media/NSG/Site Content/sustainability/Downloads attached to pages in sustainability section/CorporateGovernanceGuideline2021_07_E.pdf

1. Policies and procedures in determining the compensation for the senior management and Directors
   The Compensation Committee, chaired by Independent External Director and composed of five (5) Directors including the Chairperson, four (4) of whom are Independent External Directors, determines the policy of, and individual contents of, compensation payable to Executive Officers and Directors.
   Please see below "Compensation for Directors and Executive Officers (Shikkoyaku), Disclosure of Policy on Determining Compensation Amounts and Calculation Methods" in "II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management".
   (Principles of Compensation for Directors and Executive officers)

https://www.nsg.com/~/media/NSG/Site%20Content/sustainability/Downloads%20attach ed%20to%20pages%20in%20sustainability%20section/Principle_3_1_3_2107_E.pdf

1. (v) Policies and procedures in the appointment and the dismissal of the senior management and the nomination of Director candidates
   The Company will decide the candidate for director at the Nomination Committee, chaired by Independent External Director and composed of five (5) Directors including the Chairperson, four (4) of whom are Independent External Directors and submit the details to the ordinary general meeting of shareholders as a proposal. In addition, the Board of Directors will, on the basis of recommendation rendered by the Nomination Committee in advance, appoint or dismiss senior executive managers including Executive Officers. These decisions will be carried in accordance with "General Criteria to Select Candidates for Directors" or "Policy and Procedure on Appointment and Dismissal of Executive Management", which details are accessible in our website. https://www.nsg.com/-/media/nsg/site-content/sustainability/downloads-attached-to-
   pages-in-sustainability-section/principle_3_1_4_2107_e.pdf

【Supplementary Principles 4.1.1 A brief summary of the scope of authority delegated to the management】

It is the purview of the Board that makes decisions on the defined material matters

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