Sojitz Corporation

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Message from the Chairman of the Board

I will spur Sojitz forward in evolving to accomplish the goals of Medium-Term Management Plan 2023 in order to improve corporate value.

Two years have passed since I became chairman of the Board of Directors. In the year ended March 31, 2021, a great amount of time at meetings of the Board of Directors was devoted to discussion regarding the formulation of Medium-Term Management Plan 2023. A major topic of discussion in the year ended March 31, 2022, meanwhile, was contributions to the accomplishment of the goals of the plan. The Board of Directors prepared a basic schedule for Board meetings over the next year, in June 2021. This schedule set clear guidelines for the amount of time that would be devoted to each topic. I, as chairman, thereby sought to facilitate more effective proceedings to ensure we could devote enough time to meaningful discussion.

I was also able to welcome Mr. Ungyong Shu as a new outside director. His wealth of knowledge regarding M&A strategies and capital policies gained from his work experience at financial institutions has been a great catalyst for discussion at Board meetings. In June 2022, we were joined by yet another new outside director, Ms. Haruko Kokue. I look forward to her providing advice from perspectives that differ from those of other outside directors based on her insight into engagement with various stakeholders, supply chain management, and the environment.

Looking back at the discussions at meetings of the Board of Directors over the past year, I am reminded of the large number of investment projects we talked about. This high representation of investment projects may, in part, be due to the Company’s policy of accelerating the advancement of the measures described in Medium-Term Management Plan 2023. We received reports on the progress of projects from the respective business divisions, and we then swapped opinions on ways to pursue improvements with regard to projects for which progress was not particularly good. I have high praise for how to the point our discussions were. As such, I feel confident saying that the Board more than fulfilled its role in contributing to the accomplishment of the goals of the Medium-Term Management Plan 2023 in its first year. Despite these strong contributions, the price-to-book ratio (PBR), for which the plan sets a target of 1.0 times or above, had only reached 0.64 times as of March 31, 2022. We must therefore recognize that the road toward accomplishing the target of the plan is still long, and there is a lot that remains for the Board to do.

I believe that the role of outside directors is to help improve corporate value by supporting the president and other members of the executive team so that they can focus on running the business, and to sometimes spur them forward to boldly take on challenges. For this reason, it is important to establish an appropriate governance system. This is something I think that shareholders and capital markets expect as well. Having a team of outside officers with diverse backgrounds grants the executive team the opportunity to gain the input from a variety of standpoints and make new discoveries based on said input.

Sojitz has recently been branching out from its more or less conventional trading business by increasingly engaging in capital participation in operating companies, after which it proceeds to raise their value. It has also become more common for the Company to acquire manufacturers. I, personally, have been involved in the management of manufacturers for a number of years, and I will thus continue to proactively take part in discussions while utilizing the experience and insight I have gained through this background. Meanwhile, since becoming chairman, I have continued working to foster an atmosphere at Board meetings that makes everyone feel comfortable voicing their opinions. I definitely feel that we have successfully built a relationship with President Fujimoto and other members of management that is conducive to openness in discussions. I look forward to helping maximize the corporate value of Sojitz through lively discussions going forward.

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