Policy on Shareholder Returns
The Shinwa Group recognizes returning its profits to shareholders as one of its most important managerial issues.

Basic Policy
Our basic policy in this regard is to make returns to shareholders in accordance with operating results, while at the same time retaining internal reserves that may be necessary to achieve stable business growth and respond to changes in the business environment in the future. Our target payout ratio is 40% or higher.

Frequency of dividend payment and decision-making organ
Our basic policy on dividends of surplus is to provide a single year-end dividend each business year. For the matters stipulated in all the items of Paragraph 1, Article 459, Companies Act of Japan, including dividends of surplus, we provide in the articles of incorporation that such matters shall be decided by resolution of the board of directors, unless otherwise provided for by law. It is also provided in the articles of incorporation that we may distribute an interim dividend, as stipulated in Paragraph 5, Article 454, Companies Act of Japan. Decisions on interim dividends are made by the board of directors.

Use of internal reserves
Our policy on internal reserves is to strengthen our financial resilience and put them to efficient use for investments, such as through capital expenditures and human resources development that are necessary to sustain business expansion, thereby enhancing our corporate value.