The Company’s strategic holdings of listed shares, which have been maintained with the objective of securing and expanding medium- to long-term transactions, are currently being reduced via the annual verification of rationale for such shareholdings. This verification involves both quantitative and qualitative assessments. The former focuses on examining the benefits and risks arising from each shareholding and confirming its propriety vis-à-vis capital cost. The latter focuses on examining such factors as improvement in the stability of the investee business. Results of this verification are discussed by the Board of Directors to decide on whether or not to divest certain shareholdings. The Company also engages in sufficient dialogue with business partners whose shares are earmarked for divestment from its shareholding portfolio. Upon securing their understanding, the Company carries out divestment while giving due consideration to its impact on share prices. At the end of FY2020, the Company’s strategic holdings of listed shares comprised 18 stocks, a decrease of four stocks from the end of FY2019. This represents a decrease of 47 stocks compared with the end of FY2014,^* prior to the enforcement of Japan’s Corporate Governance Code.
* Comparisons based on the simple sum of stocks held by pre-merger companies.

With regard to voting rights associated with strategic holdings of listed shares, our company maintains a policy of casting its vote in a way that leads to sustainable improvement in the corporate value of both our company and the investee. To this end, the Company has made it a rule to judge whether or not an investee is able to sustainably improve its corporate value based on the assessment of such factors as its management strategies and operating results. Furthermore, depending on the content of a ballot proposal, the Company requests a detailed explanation on each matter prior to casting a vote. Should a ballot proposal by an investee be deemed to constitute a conflict of interest between the Company and said investee, the Company exercises its voting rights on an as-necessary basis after consulting with Independent Outside Directors and external specialists.