Opening. Today's objective. Today's business briefing will explain the growth strategy for growth driver businesses and sustainability management, which are particularly important for medium-term corporate value improvement. The focus will be on business strategy and sustainable management. That forms two wheels needed for “K” LINE today to improve corporate value together with capital policy. We have covered capital policy in the fiscal year 2022 full year financial results briefing. In the business briefing today, we will thoroughly explain each three growth driver businesses in depth. Objective of the “K” LINE Group. Our goal is to contribute to all stakeholders by improving our corporate value. “K” LINE will realize both economic and social value by achieving our corporate principle of being trusted from all over the world. We have been promoting activities for realizing low-carbon, decarbonized “K” LINE and society, by striving to improve corporate value through sustainable growth, with business growth and capital policy as the two wheels, since we set long-term management vision in medium-term management plan in May last year. Earnings targets and performance progress. We will focus on businesses that drive growth to achieve our earnings targets ahead of schedule. “K” LINE's own business had a solid start to the first year of the medium-term management plan, reporting an ordinary income of JPY 83.3 billion for fiscal year 2022. With the growth of own business, mainly with three growth driver businesses, namely coal and iron ore carriers, car carriers, and LNG carriers, we will work on the steady achievement of the medium-term management plan ahead of schedule. Business strategy. Importance and progress of each business. As announced at the full year financial results briefing for fiscal year 2022, all businesses are progressing steadily. Today, we will discuss the businesses with role of driving growth in detail. Business strategy. Positioning of growth driver businesses. We can expect sustainable growth and leverage on our strength in each of three businesses with role of driving growth, and the key feature is that they have different volatility and timeframe for achieving growth. With this combination of the business portfolio, we aim to balance the competitive advantages of the selection and concentration strategy, not diversification, and reduce the risks arising from excessive business concentration. Also, we will expand size of earnings by capturing customers' needs for environmental measures and strengthening resilience to market volatility. Concept of investment. We aim to balance the continuous development of “K” LINE and our contribution to a sustainable society, and focus on investments that will improve corporate value. Based on the principle of balancing sustainable earnings growth and contribution to a sustainable development of society, we will make disciplined investments. About 80% of the total investment of JPY 630 billion during the period of the medium-term management plan, will be concentrated in three businesses that will drive growth. In terms of environmental measures, approximately 60% of the total investment will be invested in the environment related, such as alternative fuel vessels centered on three businesses, new businesses that contribute to a decarbonized society, and various environmentally friendly equipment such as Seawing. Regarding total return to investments, we aim for achieving 6%-7% ROIC. Car carrier business. One, business characteristics. Characteristics of car carrier business. The car carrier business is supported by solid demand. It is a business based on a trusting relationship with customers and requires balanced responsiveness to fluctuation in supply and demand. The car carrier business is growth business supported by solid demand. The volume of auto sales is recovering from the decrease due to COVID-19. It is expected to remain stable in the medium term. Marine transport volume is expected to increase mainly for specific routes, and we anticipate stable demand. The car carrier business has a limited number of customers and shipping companies. As such, it involves direct interaction between the shipping company and customers, and mutual trust between the customer and the shipping company is base of business development. Due to the fluctuation in transport demand based on economic trends and other factors, we must be prepared for the change in demand and supply. Balancing the development of the fleet aligned with the increased demand and ensuring flexibility is critical. Two, market trends. Demand outlook. With the recovery and growth of auto sales, marine transport demand is expected to increase by about 14% by 2026, and solid growth is expected toward 2030. Auto sales volume is still recovering from the decrease caused by the COVID-19 pandemic. It is expected to return to the pre-COVID level around 2025, and maintain growth toward 2030 with the economic development and increase in the global population. Marine transport demand is expected to increase solidly towards 2026 and 2030, thanks to the recovery of OEM from production constraints, increased auto sales, and the increase in transport volume for routes with longer transport distances, such as those out of China. On the other hand, we must monitor the risk of a decrease in marine transport demand due to recession and development in local production. Supply and demand outlook. Newly built vessels are mainly new fuel vessels, and the supply volume is expected to increase mainly for LNG-fueled vessels for the time being. As a result of the environmental regulations, the transport capacity for the existing heavy oil-fueled vessels is expected to decrease due to slow steaming and retirement of aged vessels. Uncertain factors that warrant monitoring also exist, such as a change in the pace of new shipbuilding orders and a further decrease in the transport capacity of heavy fuel vessels due to stricter environmental regulations. The industry is gradually introducing newly built vessels, but the supply shortage is expected to continue until around 2025. From 2026 onwards, orders for additional new buildings, primarily eco-friendly vessels, will continue. Supply and demand are expected to balance and stabilize towards 2027. Three, business strategy. Business strategy overview. “K” LINE aims to promote sustainable growth by aligning route design and fleet development with our strong customer base. We will build a more solid customer base by building a mutually trusting relationship through stable and sustainable transport service, promotion of environmental sales for decarbonization, and high and heavy cargo sales, for which we have established a dedicated team with accumulated expertise. We will develop a competitive fleet to respond to the increasingly sophisticated demands of the customers, such as decarbonization, and secure appropriate flexibility to prepare for future changes in transport demand. Based on the cargo and fleet, we will promote optimization of route design for business development with sustainability and growth potential, including by restoring and maintaining rates. Business strategy progress and outlook. We have overcome the weakness in business development and recovered the balance between route, fleet, and customers by achieving profitability with modified routes design based on a strong customer base and the development of an appropriate fleet. Going forward, we will aim at business growth while maintaining the balance. In the past, the route design and fleet development were not aligned with the customer base, but we have done withdrawing from unprofitable routes, reallocating vessels, and reorganizing the route network. We will develop a fleet, including large vessels. Currently, the downward flexibility of the fleet is temporarily declining, and we will work to secure appropriate flexibility at an early stage. Going forward, we will aim for sustainable growth while maintaining this balance by working to realize the route network and contract mix in line with demand, developing appropriate scale of fleet and securing fleet flexibility, responding to decarbonization needs, and increasing the size of vessels, and improving high and heavy loading capacity. Four, investment plan. Investment policy plan. To realize growth with the alignment of the customer base, route, and fleet, we will promote sustainable business management by developing a competitive fleet with disciplined investment. We will thoroughly implement disciplined investment decisions while securing the necessary flexibility for the fleet. We will realize the quality and quantity of the fleet based on the customer base and demand. We will secure the flexibility of the fleet to prepare for future changes in supply and demand. We will enhance fleet competitiveness by investing in eco-friendly vessels, mainly LNG-fueled vessels and environmentally friendly equipment, increasing high and heavy loading capacity, and increasing the size of vessels. We will invest JPY 200 billion during the current medium-term management plan period to develop a competitive fleet while implementing disciplined investment. Targets and progress. Targets and progress for key indicators. There are three driving points for us to realize sustainable business growth and aim at growth, while maintaining the alignment of the customer base, route, and fleet. We will increase cargo tied to the strong customer base. We will establish a highly competitive fleet with eco-friendly vessels, enhanced high and heavy transport capacity, and increased size of vessels. We will maintain zero unprofitable routes. By promoting the mentioned three points, we aim for sustainable expansion of transport service toward 2030. Key points of briefing. In a market involving direct interaction between the customer and the shipping company, we will build mutually trusting relationships by leveraging the strength of customer-oriented sales to meet our social mission of supporting the supply chain for the auto industry. We will aim at growth while maintaining the alignment of customer base, route, and fleet, with route design and fleet development based on our strong customer base. We will realize sustainable business management based on solid demand, capturing environmental measures and high and heavy cargo as business opportunities. Coal and iron ore carriers. One, business characteristics. Characteristics of coal and iron ore transport business. There are different formats of contracts based on factors such as the customer attribute and region. The earning structure of the business can be broadly categorized into those offering medium to long-term stable earnings and market-linked earnings that are affected by short-term market conditions. Stable earnings mainly comprise medium to long-term contracts with customers like Japanese and Korean steel mills that offer stable rates for the medium to long term. The deciding factor for selecting shipping companies is the long-term track record of safe and stable operation based on past transactions. Market-linked earnings mainly comprise short-term contracts with major resources companies, and the rates are linked to the demand and supply and the market conditions. A track record of safe and stable operation is essential, but short-term price competitiveness is also a factor in the selection of shipping companies. Coal and iron ore carrier businesses earnings structure. “K” LINE has built an earning structure based on long-term stable earnings contracts, such as with Japanese and Korean steel mills, and adding market-linked earnings, such as with major resources companies, to enable earnings contribution. The graph shows operating revenues for the past 10 years, and the ratio of operating revenues from stable earnings for more than half, which is the pillar of operating revenues. In the past, profits increased with the market-linked earnings when the market was strong, but earnings deteriorated when the downward market swing exceeded expectations. Increasing stable earnings that form the earnings base and implementing volatility measures for the market-linked earnings is essential to achieve sustainable business growth. Volatility measures. We will enhance profitability and promote earning stability by developing a cargo and fleet portfolio that balances the cargo contract period and the fleet composition. We will use short-term charters for short-term cargo contracts and our own ship, or medium and long-term charters for medium and long-term cargo contracts. By using our own ship and medium and long-term charters for medium and long-term contract cargo, we will keep the operation cost competitive and improve profitability. We will aim to stabilize earnings by using short-term chartered vessels for short-term contract cargo to enable fleet contraction during market deterioration. We have been working on reorganizing the cargo contract mix and fleet composition in order to align the contracts period with the fleet structure. As you can see in the graph on the right, certain amount of progress has been made from fiscal year 2015 to fiscal year 2022. Two, market trends. Demand outlook. Crude steel production volume is expected to be flat for China, but a significant increase of 6% per annum is expected for India toward 2030, resulting in a slight increase in the overall market. Marine transport volume of coal and iron ore adjusted in 2022 due to the impact of the Zero COVID policy in China, but has entered a demand recovery period from mid-2023. Overall volume is expected to be flat or slightly increased, with emerging regions such as India driving the market. In addition, shipping volume for bauxite is expected to increase by 7% per annum due to the increased demand for aluminum, resulting in an increase in demand for coal and iron ore carriers. Supply and demand gap outlook. Regarding the supply of vessels, as you can see in the left graph, in addition to the scrapping of old ships and limited new shipbuilding orders, the supply volume is expected to remain flat or decrease slightly from the impact of the environmental regulations, resulting in the tightening of supply and demand towards 2027, as shown in the red line, which indicates supply and demand gap. Despite the large number of vessels built between 2010 and 2012 retiring, placing orders for new ships is difficult, as determining the certainty of fuel conversion takes time. Consequently, the actual volume of supply of vessels is expected to remain flat or slightly decreased towards 2027. Environmental regulation is leading to slow steaming to reduce CO₂ emissions from ships, leading to a decline in the operating ratio per vessel and reducing the supply. Outlook for expansion of eco-friendly vessels. Environmental actions regarding marine transport fall under Scope 3 for the customers, and promoting low carbon decarbonization for “K” LINE is also an important management issue for the customers. Demand for new fuel vessels has increased in all customers across Japanese and Korean steel mills, other overseas mills, and major resources companies. The ratio of new fuel vessels in the market is currently limited to about 1%, but is expected to increase to about 20% by 2030 due to the increased need for GHG emissions reduction by customers. The contract period is expected to shift towards medium and long-term contracts for new fuel vessels until the new fuel vessels fill the market, even for major resources companies who mainly use short-term contracts. This shift towards eco-friendly vessels presents an earnings growth opportunity for the business. Three. Business strategy overview. I will explain the specific business strategy to achieve sustainable business growth. The customer portfolio includes, one, the Japanese and Korean steel mills, which offer a mature but stable market. Two, steel mills in India and the Middle East, which are expected to grow, and three, major resources companies, which have significant transport demand and a potential fuel conversion demand. Japanese and Korean steel mills are stable customers, mainly using medium and long-term contracts. We will aim to maintain a stable earnings base by responding to the demand for environment-friendly transport by developing an eco-friendly fleet. Steel mills in India and the Middle East are a market expected to grow, and we already have a customer base with medium and long-term contracts. This is a unique strength of “K” LINE. We will aim to enhance the earnings base by developing an eco-friendly fleet and organizational and environmental sales. Major resources companies are one segment of customers keenly interested in environmental measures, creating a new stable market with increased use of long-term contracts due to the shift to new fuel vessels. Likewise, we will aim to secure medium and long-term contracts with developing eco-friendly fleets and with organizational and environmental sales. By implementing these strategies, we will aim at sustainable growth as a growth driver business. Environment-oriented sales. As the world heads to low carbon decarbonization, we need sales activities focused on environmental measures. At the start of the medium-term management plan announced last year, we rebuilt the internal environmental sales system. A new environmental sales system started with cross-sectional sales by technology, environment divisions, and sales divisions, increasing necessary staff, including for overseas. We will capture the customer's demand for environmental measures by leveraging customer and environment-oriented sales. We signed MoU with JSW Steel, EGA, and Anglo American concerning joint research and comprehensive discussions on decarbonization measures. To realize our discussion topics, we will proactively promote the development of ammonia-fueled vessels and transport technology to reduce environmental load, such as the automated wind power kite system. By promoting environment-oriented sales, we will expand the stable earnings base by securing long-term, stable contracts, and at the same time, improve the connectivity between routes by expanding the customer base and improving transport efficiency, aiming for earnings growth. Four, investment plan. Investment policy plan. The graph on the right shows the number of vessels in operation, showing a decrease due to retirement of aged vessels, and an increase due to newly built vessels and new charter. Part of the JPY 120 billion investment during the period of the medium-term management plan includes investment on the vessels to be delivered after fiscal year 2026. We will focus on construction of new fuel vessels. Reflecting on the past, we aim to develop a competitive fleet at an appropriate cost by managing the fleet size, procurement cost, and ownership format. We will manage the fleet size by avoiding speculative upfront investments and executing ship investments aligned with the transport demand. We will manage procurement costs by following the guideline on ship price, such as by strategically controlling investment when ship prices increase. The ownership format will be managed to balance the advantage of the low cost of ship ownership and the benefit of improved market resilience and asset efficiency by using chartered vessels. By complying with the three investment approaches mentioned, we will aim to build a competitive fleet at an appropriate cost. Asset efficiency. To achieve sustainable earnings growth, we will expand transaction with steel mills in India and the Middle East, and major resources companies from the perspective of new fuel vessels, aiming for increased operating revenue. At the same time, we will realize high asset efficiency and market resilience by developing a fleet that combines chartered vessels. Five, targets and progress. Target and progress for key indicators. We are steadily promoting customer and environment-oriented sales and making good progress toward achieving the medium-term management plan targets. Enhance stable profitability with increased long-term contract ratio and appropriate balance of cargo and vessels toward fiscal year 2026. The number of operating vessels will decrease between fiscal year 2022 and fiscal year 2026, but ordinary income is expected to increase with improved operating efficiency and cost competitiveness. Maintain the relationship with Japanese and Korean steel mills, while working to win contracts with steel mills in India and the Middle East, and major resources companies, which are growth areas. We will leverage customer and environment-oriented sales to develop and deeply cultivate customers for sustainable earnings growth toward fiscal year 2030. Key points of briefing. We will realize sustainable earnings growth by increasing medium to long-term contracts with steel mills in India and the Middle East that are expected to grow, and with major resources companies, in addition to the long-standing relationship with Japanese and Korean steel mills. We will further enhance customer and environment-oriented sales with disciplined investment in eco-friendly vessels and enhancement of organization and human resources in India and the Middle East region. We will realize high asset efficiency with fleet development using lightened assets. We will enhance market resilience by securing flexible fleet size and aligning the balance of short and long-term cargo contracts and fleet composition. LNG carrier business. One, business characteristics. Strategic category of LNG carrier business. “K” LINE aims at a long-term stable strategy, leveraging customer-oriented capabilities and focusing on energy resource companies and users. LNG carrier business has two distinct strategic categories: the long-term stable strategy, which mainly targets energy resource companies and users to secure long-term contracts, and the short-term market strategy, which primarily targets portfolio players and traders to secure short and medium-term contracts. The short-term market strategy requires adept ship arrangement and quick decision-making on the timing of the order. In contrast, a long-term stable strategy depends on the relationship with customers, partners, and capability to respond to customer needs. “K” LINE aims at a long-term stable strategy, leveraging our strength of customer-oriented capabilities. Earning structure of LNG carrier business. The business maintained profitability regardless of market conditions for the past decade, contributing as a stable earnings base for the entire “K” LINE. The number of contracted vessels and earnings per vessel are the two critical factors for the earnings of the LNG carrier business. The number of contracted vessels has remained stable, with about 40 - 50 vessels operated annually for the past decade. Earnings per vessel maintained stable profitability for most projects, as about 95% of ships operated have long-term contracts of 10 years or longer. The business contributes to a stable earnings base for the entire “K” LINE by maintaining a steady number of contracted vessels and securing stable earnings per vessel. Market trends. LNG demand outlook. Considering the increase in demand by emerging countries and the timing of the expansion of alternative energies, the need for LNG is expected to increase steadily to 2030 and 2040. The demand for LNG is expected to increase by about 5% annually between 2022 and 2030. One of the reasons is the increase in global energy consumption, along with the economic growth in emerging countries and others. In addition, there is a demand for LNG as a transition energy source in the decarbonization trend. As a result, the demand is expected to increase steadily, at least until 2040. LNG production and consumption forecast by region. LNG production volume is expected to increase in North America and Qatar, and consumption volume is expected to increase mainly in emerging regions such as China, South Asia, and Southeast Asia. Production volume in Qatar is expected to continue growing, with the launch of large projects scheduled between 2026 and 2028. North America has multiple new shale gas projects planned for launch, resulting in a significant increase in production until 2030. In addition to the economic development, response to environmental regulations will support growth in LNG consumption in the emerging regions following China, such as South and Southeast Asia. Vessel supply and demand outlook. Orders for new ships are increasing with the expectation for solid growth of LNG transport demand, resulting in tight shipbuilding capacity. Global annual shipbuilding capacity for LNG carriers will expand to around 80 - 90 vessels, but most ships scheduled for completion by 2026 have already been booked. Most ships planned for completion in 2027 already have pre-contract bookings, with shipbuilding capacity becoming available only for vessels to be completed in 2028 onward. It is quite important to secure stable shipbuilding capacity to expand business scale. In this respect, we have built strong relationships with shipyards, and we will continue and strengthen them. Three, business strategy. “K” LINE's business strategy. The basic concept is to work with trusted partners to increase the share of business for each customer through customer-oriented sales. We will maintain and expand our market share in Qatar and aim to capture market share in emerging regions by leveraging the expertise acquired in Qatar. Qatar offers long-term contracts and a certain level of expansion of demand for LNG vessels. By using our business relationships that stretch back decades and maintaining safety and navigation and high-quality ship management, we will retain and expand our share of the business. In the emerging regions, the demand for LNG is expected to increase with the economic growth. We will aim to capture market share through customer-oriented support at sea and on land, and by responding to local content in each country. Latest progress. We have recently secured a long-term contract with QatarEnergy, which offers the largest business scale and made progress in achieving results, such as with PETRONAS in the emerging regions. In Qatar, “K” LINE's abundant experience in the safe and optimal operation services for existing projects have been well appreciated, resulting in the execution of 12 new long-term chartered vessel contracts with QatarEnergy in August and November 2022. In the emerging regions, PETRONAS appreciated our ship and safety management capabilities for a chartered vessel managed by “K” LINE. This led to the execution of long-term charter contracts for multiple vessels, starting with two medium-sized vessels in November 2020. Enhanced system for emerging regions. As part of “K” LINE's strength of customer support that combines technology and sales, we established a ship management site in Singapore and deployed permanent marine superintendents in China, accelerating the business in China, India, and Southeast Asia. There are four main shipping company selection criteria in the emerging regions, and “K” LINE has strength in ship management record and capacity to respond to the customers' needs. To increase our market share in the emerging regions, we will enhance our capabilities for responding to local content and customer needs and making proposals. We will improve capacities to respond to local content in each region with measures, including building a network with partners in crew development through ship management. A ship management site was established in Singapore to combine ship management and sales, and to further differentiate our capabilities in responding to customers' needs by providing region and customer-oriented services. Four, investment plan. Investment policy plan. We are planning about JPY 160 billion investment during the medium-term management plan period by making investment decisions by focusing on long-term stable projects to minimize risks. Based on the long-term stable strategy, we will prioritize long-term stable projects and minimize the risk of free vessels by placing shipbuilding orders when a project has been secured. We will invest a total of JPY 160 billion during this medium-term management plan period, with about JPY 100 billion in vessels to be completed within fiscal year 2026, which is within the medium-term management plan period, and about JPY 60 billion invested in ships to be completed after the medium-term management plan period and by fiscal year 2030. We will aim for 67 ships in operation by fiscal year 2026 and 75 ships or more by fiscal year 2030. Five, targets and progress. Target and progress for key indicators. In addition to business expansion in Qatar, making steady progress on strengthening the customer base in emerging regions where growth is expected. The arrangement of vessels towards fiscal year 2030 is progressing, aiming at growth beyond the medium-term management plan period. We are accumulating long-term projects with contract periods extending 10 years or longer between fiscal year 2026 and fiscal year 2028, mainly in Qatar and emerging regions, expecting stable earnings contributions. Vessels currently being arranged include those to make earnings contributions from fiscal year 2026 and beyond, and can be expected to increase the size of medium to long-term earnings contributions. Key points of briefing. Through our stable earnings contribution business model involving vessel arrangement based on a long-term contract with a specific customer, we will make steady earnings contributions during the medium-term management plan period and beyond. We aim to expand the size of earnings contribution in the medium to long term by focusing on long-term stable contracts and capturing the demand in emerging regions such as Qatar. We will improve competitiveness by continually enhancing customer-oriented support at sea and on land through sales and ship management. Latest results. We recently secured a long-term project with Diamond Gas International. “K” LINE's quality of ship management and the safe and optimal operation services were highly appreciated, leading to the first long-term charter contract with DGI, a wholly-owned subsidiary of Mitsubishi Corporation. Sustainability management. Vision of “K” LINE's sustainability management. “K” LINE Group's vision is: As a partner trusted by all its stakeholders, we aim for sustainable growth and greater corporate value by supporting the infrastructure of the global community. In order to fulfill this mission in the medium to long term, we will contribute to the resolution of social issues and create social value in a way that is compatible with our own economic value, which will lead to an increase in corporate value. Therefore, we will work on balancing the achievement of sustainability for “K” LINE and for society environment through the group's comprehensive capabilities and with support from our partners. “K” LINE's sustainability management. This slide presents the concept of “K” LINE's sustainability management. The structure has goals at the top, with materiality at the core, and systems and frameworks forming the foundation of the overall sustainability management. Last year, 12 new items were identified as our material issues through the review. I will focus on the four themes with a particularly strong relationship with the functional strategy, which should be particularly appealing in terms of their importance to “K” LINE Group. The four themes include the three pillars of environment, technology, safety, quality, human resources, and enhancement of corporate governance, which is the management base that supports all those pillars. One, environmental protection rooted in low carbon decarbonization. Objective of the “K” LINE Group. As “K” LINE Group, based on the goals of our environmental vision, we saw contribution to the realization of a low-carbon, decarbonized society as a business opportunity, and have formulated a growth strategy. In the latter half of the 2020s, we aim to introduce zero-emission vessels using new fuel, and contribute to the realization of low carbon and decarbonization of marine transportation in our customers' value chains, through efforts to reduce our GHG emissions. Leveraging our strengths, we will actively work on business that contributes to the low carbon and decarbonization of society, such as support vessels for offshore wind power generation, et cetera, new energy such as hydrogen and ammonia, and responding to demand for marine transportation of captured liquefied CO₂. We aim to be a company that continues to be chosen by all stakeholders by reducing environmental impact and continuously improving corporate value to realize a sustainable society. “K” LINE's low carbon, decarbonization targets. We have set an ambitious industry-leading target beyond the standards the International Maritime Organization, IMO, requires. We aim to achieve 50% CO₂ emissions efficiency improvement compared to 2008 by 2030, and to realize net zero emissions by 2050. We have already reached about 80% of the interim target, and we are increasingly confident that the target can be achieved. Summary of low carbon, decarbonization initiatives. In order to achieve low carbon and decarbonization, we will thoroughly implement investment discipline, make investments based on customer requests, and aim to achieve both earnings growth. We will focus our investment on LNG/LPG-fueled and zero-emission vessels, significantly reducing GHG emissions. By promoting the installation of environmentally friendly equipment, such as our unique Seawing, we will aim to reduce GHG emissions even for existing vessels. K-IMS, our integrated ship management system, is used to support optimal economic operations, and plans call for 100% installation of K-IMS on owned vessels and long-term chartered vessels by the end of this fiscal year, promoting optimal operations using big data. KPIs have been set to manage the progress of initiatives, and we will steadily work towards realizing net zero emissions. Roadmap for “K” LINE low carbon decarbonization. The path and achievement of 2030 targets, i.e., 50% improvement of CO₂ emission efficiency, have become clear. We will now promote a review of specific measures to achieve the targets for 2050. Efficient operation, Seawing, and LNG/LPG-fueled vessels are the main drivers for achieving the 2030 interim target. Efforts to develop zero-emission fuels are important for achieving net zero emissions by 2050, and efforts are being made to implement specific measures. Efforts to develop zero-emission fuels are important for achieving net zero emissions by 2050, and we are promoting the materialization of measures. Zero-emission fuels are critical for achieving net zero by 2050, and we are working on the details of the measures. Specific breakdowns of zero-emission fuels, including the options of ammonia, methanol, biofuel, and hydrogen, will be reviewed based on technology development, economic performance, and institutional trends, et cetera. Although the efficient operation and Seawing are expected to have fuel reduction effects, CO₂ emission reduction will be limited when zero-emission fuel is used. Their emissions reduction effect is likely to decrease as zero-emission fuel expands. No matter what kind of fuel is used, saving energy is directly linked to cost reduction, so we will continue to promote. Initiatives for low-carbon, decarbonized society. We will support and promote a low-carbon, decarbonized society by leveraging the abundance of expertise accumulated through the marine transportation business, to engage in new business areas where demand is expected to grow. Regarding the liquefied CO₂ transport business and the offshore wind power generation support business, not only the demonstration project, but also commercialization has started. Initiatives on biodiversity. As a shipping company, understanding and minimizing the environmental impact of marine transport on sea, air, and the ecosystem is our responsibility. Reducing SOx, NOx emissions is particularly important for preventing air and water pollution. We are working to set a target by the end of this fiscal year. As a concrete measure, we will focus on preventing oil spill accidents, which may have a tremendous impact on the environment in the unlikely event that it does occur, reducing the effect of exhaust gas, CO₂, SOx, NOx, and avoiding the impact from ballast water. We will continue to consider necessary additional measures based on the risk assessment as part of the TNFD disclosure scheduled in July. Two, safety in navigation. Target and objective for safety in navigation. Safety in navigation is the most essential responsibility of “K” LINE, which plays a role in social infrastructure by taking care of our customers' important cargo and transporting it safely. We provide services based on our own safety and quality standards that exceed those stipulated by law. In the unlikely event that a serious accident were to occur, it would have a major impact on the environment, undermine social trust, and schedule delays caused by the vessel would cause great inconvenience to our customers. In order to ensure safe operation, we have set the KPIs as shown on the left. Zero serious maritime accidents, and less than 10-hour delay time due to mechanical failure, and aim to realize top-class safe and high-quality services in the industry. Summary of initiatives for enhancing the system for safety and navigation. The diagram presents the overview of “K” LINE safety and navigation measures. Human capabilities and supplementing technologies are the two wheels on the axle. We will strengthen our three bases global monitoring system and provide safe and optimal services that put the customer first. Human capabilities are the most critical element in ensuring safety. Developing human resources and building and operating a safety management system are essential for realizing safety and navigation. On the other hand, supplementing human capabilities with advanced digital technology is critical to achieve a high level of safety and quality. Safety and navigation initiatives supported by people. Developing people and building and operating the standards and systems to ensure safety centered on people is essential for realizing high-quality safety and navigation. For human resources development, we will focus on measures to prepare for the future, such as new technology and new fuel vessels, et cetera. Leveraging the strength of our customer-oriented business, we will establish global and local marine technical support systems to build flexible sales support system according to the customer's cargo and routes. For ship management, we will further enhance the level of safety by establishing a global monitoring system and establishing a 24-hour safety support system for all ships in operation around the world. Development and expansion of systems and infrastructure using advanced digital technology. We will use advanced digital technology to supplement human capabilities. In particular, by applying technology not only to ship operation, but also to surveillance, monitoring, prediction, and prevention, we will realize advanced safety and quality that cannot be achieved by human capabilities alone. K-IMS is an integrated ship management system that covers maintenance functions. It not only supports optimal economic navigation and safe navigation by utilizing big data, such as weather, sea conditions, and engine data, but also monitors engines to predict problems in advance and take preventive measures. Beyond that, we will proceed with the demonstration of advanced autonomous operation through the K-Assist project for the realization of autonomous navigation. Three, Human Resources. Objective for recruiting and developing human resources. As a provider of the basic infrastructure of global society, human resource management will lead the sustainable growth and transformation of the business, and we will work to secure and develop human resources who can flexibly respond to changes in the business environment, both quantitatively and qualitatively. Regarding diversity and inclusion, we will strive to create a safe and comfortable working environment, so that diverse human resources can play an active role and fully demonstrate their abilities. From the standpoint of occupational safety, we are working to prevent overwork, promote health management, and enhance childcare leave systems that exceed legal requirements and support after returning to work. As a result, the rate of taking childcare leave, not only for women, but also for men, has greatly exceeded the target of 20% and improved to nearly 90%. We were among the first to work on mid-career recruitment and achieved a management level ratio of 18%, exceeding the enrollment ratio. We plan to raise the ratio of female managers from the current 7% - 15% by fiscal year 2027. Human resources management. In particular, we will hire and develop human resources who can lead business growth and innovation, and flexibly respond to change in the business environment. To develop professional shipping executives that lead business growth and innovation, we will develop the candidates by enhancing OJT and management training to deepen shipping expertise. We will secure and develop human resources with expertise in environment and technologies that will handle the next-generation technologies required for business transformation and human resources, with expertise in business transformation by introducing and utilizing digitalization, by enhancing recruitment and expanding training. Diversity and inclusion: Establishment of a safe and comfortable environment. We aim to establish an environment where diverse personnel can play active roles and make full use of their skills, supported by diversity and inclusion, and development of a safe and comfortable environment as the two pillars. As shown here, we are promoting diversity and inclusion, such as establishing a support system before and after childcare leave that exceeds the legal requirements, cooperating on land and sea, expanding large-scale training facilities, such as in the Philippines, and fostering a sense of unity with overseas national staff. In order to create a safe and comfortable working environment, we support flexible work styles reflecting the lifestyle and health promotion activities. Governance. Enhancement of corporate governance. “K” LINE aims to realize proactive governance and medium to long-term corporate value improvement by enhancing the supervisory function and securing quick and bold decision-making by the board of directors. To this end, we have implemented measures for improving the supervisory function, rigorous discussion, and effectiveness of the board. Key initiatives to enhance corporate governance. To enhance the supervisory function of the board, we increased the ratio of outside directors and revised the director skill matrix. After the general meeting of shareholders, the ratio of outside directors will exceed the majority and become 55%. Regarding the officers' remuneration, the proportion of performance-based share remuneration linked to the medium and long-term earnings was increased to align their value with shareholders and incorporate sustainability management perspectives by linking with safety indicators, ROE, and CO₂ emissions. Five, System and framework. Sustainability management promotion system. Amidst the drastic changes in various laws and environmental regulations, to respond quickly to such regulatory changes and to enable a company-wide cross-sectional approach, such as customer service from not only the technical side, but also the commercial side, the GHG Reduction Strategy Committee and the Corporate Sustainability Management Committee have been established to consider and implement measures, provide feedback to management, and reflect it in our business strategy and management decision-making.