CORPORATE GOVERNANCECORPORATE GOVERNANCE

Topre Corporation

Latest revision: June 27, 2024

Topre Corporation

Representative Director and President, Executive Officer, Yutaka Yamamoto
Contact: Executive Officer, General Manager of General Affairs Department Takayuki Noda
Ticker symbol: 5975
https://www.topre.co.jp/

The current situation of the corporate governance of our company is as follows:

Ⅰ The basic idea toward corporate governance, and the basic information about the capital structure,
attributes of the enterprise and others
1. The basic idea
The mission of Topre Group is to create products and services by utilizing our distinguished technologies and thereby contribute to society. We
shall carry out our business activities from a high ethical perspective and common sense, as an international company needed and respected bysociety, not as a company that seeks solely economic results.
The staff of Topre Group working around the world shall strive to follow the corporate governance system by sharing this idea and seeking tocontribute to society and continual prosperity as its goal.

【Disclosure based on each principle of Corporate Governance Code】

Updated【Principle 1-4 Cross-shareholdings policy】(Policy on cross-shareholding)
Our Group has the press-related products business, the constant temperature logistics products business, and other businesses such as
manufacturing and sale of air-conditioning equipment and electronic equipment, as our main businesses. Primarily for the purpose of enforcing
the cooperative relationships with many corporations and maintaining good relationships with financial organizations in that process, we aremaking judgments from an overall perspective, based on whether it is helpful for the sustainable growth of our company, whether it is helpful for
medium-to-long-term enhancement of corporate value, etc., including curtailment of possession.
(Verification of adequacy of possession)
The Board of Directors has the system of verifying the adequacy of possession in a comprehensive manner by conducting a qualitative
assessment of the necessity of possessing and cooperative relationship on transactions, based on the quantitative evaluation of operating
performance and dividend payout ratio about cross-shareholding made by the general affairs division, which is the division responsible for stocktransactions, at the time of settlement of accounts. As a result of the verification, we are continuing to hold 20 stocks this fiscal year.
(Exercise of voting right on cross-shareholdings）
In exercising the voting right on cross-shareholdings, our company will do so on a subject-by-subject basis by making an overall evaluation onwhether it matches our company's policy on cross-shareholdings, whether it contributes to the sustainable growth of the corporation in question,
and whether it is helpful for medium-to-long-term enhancement of corporate value, etc.
【Principle 1-7 Transactions among related parties】
Our company provides as a rule that when there is a certain transaction with directors of the company, it is subject to the requirement of priorapproval by the Board of Directors and of reporting after the fact, based on the regulations of Board of Directors as well as laws and the Articles
of Incorporation, as the procedure to make sure that no harm is done to the benefits of the company and the common benefit of the shareholders,and our company is monitoring it.
【Supplemental principle 2-4-1 Ensuring internal diversity, including promotion of contributions from women】(Approach to ensuring diversity)
In order for our Group to become a company that contributes to society and continues to prosper, we believe that “ensuring employee diversity”
is essential. To achieve this, we have set “creation of accepting and diverse workplaces,” “creation of an organization that allows flexible work
styles,” and “human resource development tailored to each individual” as key themes.
Going forward, we will continue to hire diverse talents regardless of race, creed, gender, nationality, physical characteristics, etc., and strive tocreate an environment where each and every employee can fully utilize his or her abilities and thrive.
- Policies for human resource development and internal environment development
https://www.topre.co.jp/sustainability/social/policy/human_resources.html- Specific initiatives
https://www.topre.co.jp/sustainability/social/human_resources.html(Voluntary and measurable goals, and their status)(1) Promotion of women to managerial positions:
As part of our general employer action plan based on the Act on the Promotion of Female Participation and Career Advancement in the
Workplace, we have been aiming to “employ at least 130 full-time female employees by March 2026.” To further support women's careerdevelopment and expand opportunities for them throughout the Group, we have added a new goal from April 2024 to “increase the proportion of
women in managerial positions to 3% or more by March 2026.”
As of March 31, 2024, we have 105 female employees with a female management ratio of 1.5%.
(2) Promotion of foreign nationals and mid-career hires to managerial positions:
At present, we have no specific numerical targets for foreign nationals and mid-career hires, as we hire and evaluate them fairly and promote
them to management positions appropriately, as we do with all other employees.
Furthermore, regarding the recruitment of foreign nationals and mid-career hires, as we aim for further development through global businessexpansion, we will continue to strengthen and expand our initiatives.

【Principle 2-6 Fulfillment of function as the asset owner of a company pension】
Our company has adopted a defined-benefit corporate pension plan, and the Topre corporate pension fund is positioned as the asset owner.
Our company is engaging in maintenance of the system in which the fund can fulfill its function as the asset owner to aim for stable andappropriate management of the reserve fund, by dispatching the employees with the knowledge and experience from the sections in charge ofworkers as well as of financing as they relate to the corporate pension to the office of the corporate pension fund, and by placing our company's
manager in charge of finance in the asset management committee that deliberates on the effective management of the reserve owned by thefund.
Also, the reserve fund has been entrusted to each financial institution and controlled in a way that no conflict of interest will occur between thefund's beneficiaries and the company.

【Principle 3-1 Fullness of disclosure of information】
1. Regarding what the company aims for (management philosophy, etc.), management strategy, management plan
Our Group has formulated the “Basic Philosophy” as the philosophy to be shared by the group. As the management strategy/management
plan, we have also formulated a medium-term management plan. These are available on the company’s website, so please view them there.
Basic Philosophy: https://www.topre.co.jp/company/philosophy.html
Management Plan: https://www.topre.co.jp/ir/plan.html
2. The basic idea and the basic policy on corporate governance(The basic idea)
Please refer to "1.1 The basic idea" of this report.
(The basic policy）(1) We will strive to ensure the rights and equality of shareholders.
(2) We will strive for the appropriate cooperation with stakeholders other than shareholders.
(3) We will strive to ensure the appropriate disclosure and transparency of information.
(4) We will carry out the management responsibility and decision-making on business execution as well as supervisory responsibility as theobligations / roles of the Board of Directors, by making transparent, fair, prompt and decisive decisions.
(5) We will strive for constructive dialogues with shareholders.
3. The policy and procedure in deciding the compensation of directors
Please refer to "2.1. 【Compensation of Directors】” of this report.
4. The policy and procedure in nominating candidates for directors and auditors(Policy)
As for candidates for directors, we nominate on the "right person for the right position" basis, in the scale that conforms to the nature of thebusiness of our company, by giving comprehensive consideration to such matters as the contribution to the Board of Directors that makes
transparent, fair, prompt and decisive decisions depending on each business department and the allocation of business operations, and theknowledge, experience and character that the person has.
As for candidates for auditors, we nominate on the "right person for the right position" basis, by giving comprehensive consideration to suchmatters as whether the person is familiar with the nature of the business operations of our company, the knowledge on finance, accounting andlaw, and the contribution to the responsibility and role as an auditor.
(Procedure)
We nominate the candidates for directors and auditors at the Board of Directors based on the above-referenced policy, and appointment anddismissal will be made at a general meeting of shareholders.
5. Explanation of each appointment and nomination
President explains about the candidates for directors and auditors at the Board of Directors, and main careers and the reason for the selection,etc., of each candidate are written on the notice of convocation of a general meeting of shareholders.
【Supplemental principle 3-1-3 Fullness of disclosure of information】
1. Efforts toward sustainability
We are considering sustainability efforts and issues related to climate change in our CSR Climate change measures Management office.
Please refer to the following web pages for information on our efforts related to sustainability and climate change-related issues.
- Sustainability
https://www.topre.co.jp/sustainability/- CSR Reporthttps://www.topre.co.jp/sustainability/reports/
2. Investment in human capitalIn our medium-term management plan, we uphold the basic policy of “striving for talent development and creating a conducive working
environment, expanding opportunities where diverse-minded individuals can thrive, and continuing to be a responsible corporate entity entrusted
by future generations of employees." Please refer to our website for our initiatives on human resources.
- Human resources
https://www.topre.co.jp/sustainability/social/human_resources.html- ESG data
https://www.topre.co.jp/sustainability/data/
3. Investment in intellectual property
In our medium-term management plan, we advocate the basic policy of “pursuing technological capabilities that customers demand while
promoting efficiency in production methods and technological innovation, thereby continuously enhancing the company's competitiveness.”
Regarding our research and development activities, the development department applies our core technologies to diversify into new areas withthe aim of developing and commercializing new products. In addition, each business department is working on the development of new products
and technologies through the pursuit of new functions. For more details, please refer to our website.
- Intellectual property activities
https://www.topre.co.jp/sustainability/governance/ip.html

【Supplemental principle 4-1-1 Roles and responsibilities of the Board of Directors (1)】
Our company is a company with a Board of Directors, and as such has a system in which matters designated by laws and the Articles ofIncorporation as well as any matters that are important to the management of our company will require deliberation and approval of the Board of
Directors pursuant to the regulations of the Board of Directors. Matters that do not require deliberation and approval of the Board of Directors aredelegated under the regulations of approving authority, depending on the nature of the business operations, taking into account its subject,reference money amount and such nature.

【Principle 4-9 Evaluation criteria for independence and qualification of independent outside directors】
We have appointed independent outside directors, based on the evaluation criteria of the requirements of outside directors provided in the
Companies Act and the independence standard laid down by the Financial Instruments Exchange where we are listing our stock.

【Supplemental principle 4-10-1 Practical use of arbitrary system】
As advisory bodies to the Board of Directors, we have arbitrarily established the Nomination Committee and Compensation Committee, themajority of whose members are outside directors, to ensure the fairness, transparency, and objectivity in procedures related to the nominationand compensation of officers.

【Supplemental principle 4-11-1 Presupposition for ensuring effectiveness of the Board of Directors and the Board of Auditors】
As for the candidates for directors, we nominate on a "right person for the right position" basis, and have a basic stance of making selections
on a scale that conforms to the nature of the business of our company, by giving comprehensive consideration to such matters as contribution toa Board of Directors that makes transparent, fair, prompt and decisive decisions in accordance with each business department and the allocationof business operations, and the knowledge, experience and character that the person has.
Also a so-called “skill matrix,” which lists the knowledge, experience, capabilities, and the like of each director, is listed in the "Notice of aGeneral Meeting of Shareholders." https://www.topre.co.jp/ir/meeting.html【Supplemental principle 4-11-2 Presupposition for ensuring effectiveness of the Board of Directors and the Board of Auditors】
Important concurrent holding of positions, including concurrent holding of multiple positions of other public corporations by directors andauditors are disclosed in the business reports and reference documents for a general meeting of shareholders.

【Supplemental principle 4-11-3 Presupposition for ensuring effectiveness of the Board of Directors and the Board of Auditors】
To improve the functions of our Board of Directors and further enhance our corporate governance system, we conduct a board evaluationquestionnaire to assess the effectiveness of our Board of Directors. After compiling and analyzing the questionnaire results, we report thesummary and direction for improvement of the results to our officers.
The results of the most recent board evaluation questionnaire did not indicate any problems with the effectiveness of our Board of Directors asa whole.

【Supplemental principle 4-14-2 Training of directors and auditors】
Our company has been giving training to directors and auditors at the time of assumption of their offices about explanations of their
responsibilities and roles and necessary knowledge for performing these responsibilities and roles. After the assumption of office, we provide theopportunities for necessary training, such as outside lectures, according to the role of each director and auditor.

【Principle 5-1 Policy on constructive dialogues with shareholders】
We set the following policies on system development and engagement for promotion of dialogues with shareholders.
(1) We will proactively develop IR activities by designating the manager who supervises the overall dialogues with shareholders and pays
attention to the realization of constructive dialogues as the director in charge of IR and by having the president and the director in charge ofIR take the central role.
(2) In developing the IR activities, those in charge of general affairs, legal affairs, accounting, finance, etc., will support IR activities by exchanging
information at least once a month.
(3) Our company is actively creating the opportunities for promoting the dialogues with shareholders through financial results briefings directed
to analysts and company information sessions directed to individual investors, as a means of dialogues other than private meetings.
(4) Important opinions and concerns grasped from dialogues with shareholders are reported to the Board of Directors by the director in chargeof IR.
(5) We disclose insider information in a timely and appropriate manner, pursuant to the action guidelines of our Group, and we control important
facts not yet officially announced, pursuant to regulations for prevention of insider trading.

【Principle 5-2 Formulation and publication of management strategies and plans】
On May 14, 2024, we disclosed the “Formulation of the 16th Medium-Term Management Plan and Measures Aimed at Achieving Managementwith a Focus on Capital Costs and Stock Prices."
https://ssl4.eir-parts.net/doc/5975/ir_material8/227995/00.pdf

2. Capital Structure
Ratio of stock holding by foreigners【Situation of large shareholders】

Updated20% or more and below 30%

Name
The Master Trust Bank of Japan, Ltd.

Number of shares
owned (shares)

Ratio (%)

6,016,034

11.71

Custody Bank of Japan, Ltd.

4,639,800

9.03

Naoko Ishii

2,660,004

5.17

Resona Bank, Limited

2,493,400

4.85

Nippon Life Insurance Company

2,135,649

4.15

Topre Client Stock Ownership

1,556,800

3.03

Sumitomo Life Insurance Company

1,429,400

2.78

Mizuho Bank, Ltd.

1,265,364

2.46

Mitsubishi UFJ Trust and Banking Corporation

1,245,584

2.42

GOVERNMENT OF NORWAY

1,076,400

2.09

Existence of Controlling Shareholder(excluding parent company)------

Existence of Parent Company

No

Supplementary Explanation--------

3. Enterprise Attributes
Exchange for listing, and section of
exchange

Tokyo Prime

Accounting period

MarchType of industry

Metal products

Number of employees (consolidated) at
the end of the prior business year
Gross sales (consolidated) in the priorbusiness year
Number of consolidated subsidiaries asof the end of the prior business year

Over 1,000
100 billion yen or more and under 1 trillion yen
10 or more and under 50 companies

4. Policy on the way to protect minority shareholders in conducting transactions, etc., with controllingshareholders―――

5. Other special conditions that may have a major impact on corporate governanceOur company has no parent company or listed subsidiary. Also, there is no fact that is deemed to have a major impact on corporate governance.

Ⅱ Situation of the corporate governance system of the management and control organization and others for
decision-making, execution and supervision on management
1. Matters regarding organizational structure, organizational operation, etc.
Organizational form

Company with auditors【Regarding Directors】
Number of Directors according to the
Articles of Incorporation

15 persons

Term of Director according to the
Articles of Incorporation

2 years

Chairman of the Board of Directors
Number of Directors

President
6 persons

Updated

Status of appointment of outside
Directors
Number of outside Directors
Number of outside Directors who aredesignated as independent officers

Appointed
3 persons
3 personsRelationship with the company (1)NameAttributes

Tsuyoshi Takada

LawyerNaoshi Ogasawara

Certified Accountant

Yoshie Midorikawa

Lawyera

Relationship with the company (*)
b c d e f g h ijk△* Selected items on relationship with the company* If the person is applicable to the item "now or recently"「○」, if applicable "in the past", 「△」* If a close relative of the person is applicable to the item "now or recently"「●」, if applicable "in the past"「▲」a
Person who executes the business of a listed company or its subsidiarybPerson who executes the business or a director who does not execute the business of the parent company of a listed companycPerson who executes the business of a fellow subsidiary of a listed companydParty who deals with a listed company as its main customer, or a person who executes its businesse
Major customer of a listed company or a person who executes its businessfConsultant, accounting expert and legal expert who receives a substantial amount of money or assets other than an officer's fee
from a listed companyg
Major shareholder of a listed company (if it is a corporation, the person who executes the business of that corporation)hPerson who executes the business of a customer of a listed company (those who do not fall under d, e, or f) (only the person
him/herself)iPerson who executes the business of a company that stands in a cross-appointment relationship with an outside officer (only the
person him/herself)jPerson who executes the business of a company that receives contributions from a listed company (only the person him/herself)kOthersRelationship with the company (2)Independent
OfficerName

Tsuyoshi Takada

Naoshi Ogasawara

Yoshie Midorikawa

○

○

○

Supplementary explanation on applicable
items

Reason for appointment―――

We appointed him as an outside director because
he has expert knowledge as a lawyer and deep
insight on corporate legal work, and he also stands
in a position that is independent of the persons who
execute the business of our company. We
determined that, even as an independent officer, he
presents no risk of generating a conflict of interest
with general shareholders, and that the objective
independence to ensure the trust ofshareholders/investors could be maintained.

Mr. Naoshi Ogasawara had been working at
Taiyo ASG Audit Corporation (currently,
Grant Thornton Taiyo LLC) from April 2007
to September 2008, as its representative
employee. That audit corporation has been
our company's accounting auditor from 2007
to the present.

We appointed him as an outside director of ourcompany because he has rich experience and highviews in the financial and accounting areas
cultivated as a certified accountant, and he also
stands in a position that is independent of thepersons who execute the business of our company.
Because there is no contractual relationshipcurrently between the audit corporation Mr. Naoshi
Ogasawara used to work at and Mr. Naoshi
Ogasawara, we determined that, even as anindependent officer, he presents no risk ofgenerating a conflict of interest with generalshareholders, and that the objective independence
to ensure the trust of shareholders/investors could
be maintained.

―――

We appointed her as an outside director because
she has expert knowledge as a lawyer and deep
insight on corporate legal work, including overseas
legal affairs, and she also stands in a position thatis independent of the persons who execute thebusiness of our company. We determined that,even as an independent officer, he presents no riskof generating a conflict of interest with generalshareholders, and that the objective independence
to ensure the trust of shareholders/investors could
be maintained.

Existence of an arbitrary committee
equivalent to a nomination committee
or compensation committee

Yes

State of establishment of arbitrary committees, composition of committee members, attributes of chairperson
All members(persons)

Full-timemembers(persons)

Insidedirectors(persons)

Outsidedirectors(persons)

Outsideexperts(persons)

Others(persons)

Nomination
Committee

4

0

1

3

0

0

Insidedirectors

Compensation
Committee

5

0

2

3

0

0

Insidedirectors

Name of committee
Arbitrary committee
equivalent to nominationcommittee
Arbitrary committee
equivalent tocompensationcommittee

UpdatedChairperson

Supplementary Explanation
We have set up a Compensation Committee as an arbitrary decision-making body comprised of the general managers of business divisions andoutside directors along with the Representative Director, with the aim to ensure the objectivity and reinforcement of supervision regarding theprocess to determine the amount of compensation of Directors.
We have also set up a Nomination Committee as an arbitrary decision-making body comprised of outside directors along with the Representative
Director, with the aim to ensure fairness, transparency, and objectivity regarding the process of nominating Directors.

【Regarding Auditors】
Establishment of Board of Auditors

Established

Number of auditors per the Articles ofIncorporation

5 persons

Number of auditors

3 personsSituation of cooperation of auditors, accounting auditor, and inside audit department
We elected Grant Thornton Taiyo LLC as our accounting auditor, and receive accounting audit of our accounting treatments and financial
results during the term, and we thereby strive to ensure proper accounting treatment and transparent management. Our auditors and theaccounting auditor have been cooperating with each other by exchanging opinions in drawing up the annual auditing plan and making theaccounting audit reports.
The inside Audit Department, which is the office directly controlled by the president, has the audit department (3 persons), periodically conducts
visiting audits of business offices based on the audit plan for overall business operations including transactions during the term, and performs
the auditing of accounting and execution of businesses in cooperation with auditors and the accounting auditor. The audit department also strives
for exchange of opinions and sharing of information by periodically reporting its activity details to the president and the Board of Auditors.

Status of appointment of outside
auditors

Appointed

Number of outside auditors

2 persons

Number of outside auditors who aredesignated as independent officers

2 personsRelationship with the company (1)NameAttributes

Masahiko Sato

Certified Accountant

Shuichi Tanaka

Lawyera

Relationship with the company (*)
b c d e f g h i j k△* Selected items on relationship with the company* If the person is applicable to the item "now or recently"「○」, if applicable "in the past", 「△」* If a close relative of the person is applicable to the item "now or recently"「●」, if applicable "in the past"「▲」

l

m

a
b
c
d
e
f
g
h
i
j
k
l
m

Person who executes the business of a listed company or its subsidiary
Director who does not execute the business of a listed company or its subsidiary or accounting advisor
Person who executes the business or a director who does not execute the business of the parent company of a listed company
Auditors of the parent company of a listed company
Person who executes the business of a fellow subsidiary of a listed company
Party who deals with a listed company as its main customer, or a person who executes its business
Major customer of a listed company or a person who executes its business
Consultant, accounting expert and legal expert who receives a substantial amount of money or assets other than an officer's fee froma listed company
Major shareholder of a listed company (if it is a corporation, the person who executes the business of that corporation)
Person who executes the business of a customer of a listed company (those who do not fall under f, g, or h) (only the person
him/herself)
Person who executes the business of a company that stands in a cross-appointment relationship with an outside officer (only the
person him/herself)
Person who executes the business of a company that receives contributions from a listed company (only the person him/herself)
OthersRelationship with the company (2)NameMasahiko Sato

Shuichi Tanaka

Independent
Officer

Supplementary explanation on applicable
items

Reason for appointment○

Mr. Masahiko Sato had been working at Chuo
Shinko Audit Corporation (the firm namethereafter changed by mergers, etc., to Chuo
Audit Corporation, Chuo Aoyama Audit
Corporation, and Misuzu Audit Corporation)from October 1988 to June 2007. During his
tenure, from the March term of 1989 to the
March term of 2007 (temporarily in the Marchterm of 2007, it was accounting auditor), thesaid audit corporation was our company's
accounting auditor.

We appointed him as an outside auditor because
he has a high level of expertise in accounting andtaxation cultivated as a certified accountant and a
tax accountant, and he also stands in a position
that is independent of the persons who executethe business of our company. Because there is nocontractual relationship currently between theaudit corporation Mr. Masahiko Sato used to workat and Mr. Masahiko Sato and our company, we
determined that, even as an independent officer,
he presents no risk of generating a conflict ofinterest with general shareholders, and that theobjective independence to ensure the trust ofshareholders/investors could be maintained.

○―――

We appointed him as an outside auditor
because he has rich experience and deep
insight as a legal expert cultivated as a lawyer,
and he also stands in a position that is
independent of the persons who execute thebusiness of our company. We determined that,even as an independent officer, he presents norisk of generating a conflict of interest withgeneral shareholders, and that the objective
independence to ensure the trust ofshareholders/investors could be maintained.

【Regarding Independent Officers】
Number of independent officers

5 persons

Other matters regarding the independent officers
Our company designated as independent officers all the outside officers who satisfy the qualification of an independent officer.

【Regarding Incentives】
Status of implementation of
measures regarding giving of
incentives to Directors

Adopted the performance-based compensation system

Supplementary explanation on the applicable item
We adopted the share-based payment system that is linked with the medium-to-long-term business results of the company in the 121st annual
meeting of shareholders held on June 28, 2016. Also, as for bonuses, we link up the bonus distribution with the company's performance andcontribution of the individual Director to the business results.

Those to receive stock options

Supplementary explanation on the applicable item―――

【Regarding Directors' Fees】
Status of disclosure (of each
Director's compensation)

Only a part is disclosed separately

Supplementary explanation on the applicable item

UpdatedThe compensation for directors of our company is 198,000,000 yen (of which 28,000,000 yen is for outside directors), and the compensation forauditors is 36,000,000 yen (of which 15,000,000 yen is for outside auditors). The recipients are 9 directors and 5 auditors. The compensation
includes bonuses for this business year, and does not include the employee's salary of those directors who are also employees.
Total amount of compensation paid to directors and auditors
Total amount of compensation for directors (excluding outside directors): 170,000,000 yen (fixed compensation: 131,000,000 yen, bonus:
25,000,000 yen, stock compensation: 14,000,000 yen), Number of directors: 6
Total amount of compensation for outside directors: 28,000,000 yen (fixed compensation: 28,000,000 yen), Number of directors: 3
Total amount of compensation for auditors (excluding outside auditors): 21,000,000 yen (fixed compensation: 21,000,000 yen), Number of auditors:
1
Total amount of compensation for outside auditors: 15,000,000 yen (fixed compensation: 15,000,000 yen), Number of auditors: 4

Existence of policies fordetermining the amount ofcompensation or its method of
calculation Updated

Yes

Disclosure of policies for determining the amount of compensation or its method of calculation
Our company has set the following policies for determining the compensation of officers, etc.
1. Compensation system that enhances motivation to perform his/her duties as a director
2. Compensation system that is linked with business performance
3. Compensation system that is appropriate to the roles and responsibilities of a director
Based on these policies, the compensation system for directors (excluding outside directors) consists of the basic compensation,bonuses as the compensation linked with short-term business results, and stock compensation as the compensation linked with mediumterm business results. The compensation for outside directors and auditors is the basic compensation only.
【Compensation for Directors】- Basic compensation
As for the monthly compensation, the payment to each director is determined by the conference of the Compensation Committee, whichis the arbitrary decision-making organ composed of the representative director and outside directors.
- Bonuses
Bonuses linked to single-year business results are determined by the Compensation Committee based on the “consolidated operating
profit margin,” “consolidated revenue growth rate,” and each director's contribution to business results.
- Stock compensation
The calculation of stock compensation involves awarding points based on the achievement of “consolidated operating profit” and “ROE”
for each fiscal year. The accumulated points determine the number of company shares granted. Starting from the March term of 2025, in
addition to financial results-linked indicators (consolidated operating profit and ROE), we will also use non-financial results-linked indicators(engagement and sustainability) as metrics, with the aim of providing incentives for achieving the medium-term management plan andenhancing corporate value.
We have established a voluntary Compensation Committee to strengthen fairness, objectivity, transparency, and accountability, and the
majority of the committee members are composed of outside directors. The Compensation Committee determines the compensation, etc.,
for each individual director.
【Compensation for Auditors】- Basic compensation
The payment to each auditor is determined by the Board of Auditors.
Their compensation is not linked with the business results of the company, due to the point of view that their function is to audit theperformance of duties by directors.

【Support system for outside directors (outside auditors)】
We are working to ensure that outside directors and outside auditors grasp the contents of business sufficiently through the Board of
Directors and the Board of Auditors. We also provide materials in advance of their attendance at the Board of Directors so they can givefull consideration to said materials. Further, our full-time auditor may contact directly with outside auditors as needed in order to deliver
information and materials, etc.

2. Matters regarding the functions of business execution, audit/supervision, appointment, decision ofcompensation, etc. (Summary of the current status of corporate governance system) Updated
Our company has a system where the Board of Directors cooperatively takes charge of management responsibilities and business execution
responsibilities. At the Board of Directors meeting held every month, the basic management policies are determined and execution of businessand its specific plans are deliberated. Also, in addition to the Board of Directors meeting, a monthly meeting is held to intensively discuss thedesignated themes of each division.
In our company, the Articles of Incorporation provide that the Board of Directors has up to 15 members and that there are up to 5 auditors,
which allows us to maintain the proper size to function as a conference body. We have a management system where proactive deliberations anddiscussions are held in these meetings and prompt and accurate decision-making is done to make flexible and effective management possible.
For the surveillance of company management, we have adopted the auditor system. The Board of Auditors is composed of one full-time auditor
and, as outside auditors, one legal expert and one accounting expert, for a total of three members, all of whom are male. The system is suchthat they attend important meetings, such as the meetings of the Board of Directors to sufficiently keep watch over the business execution of theBoard of Directors.
For internal control, we have the Audit Department (3 persons) as an organization directly controlled by the president that executes financial
audit and operating audit, and reports to the president and to the Board of Auditors. Our Board of Auditors has enhanced transparency by hiring
two outside auditors who possess expert knowledge, and carries out the function of surveillance and supervision of the management. Also, theBoard of Auditors confirms the critical matters of changes in audit policies and accounting systems, etc., by holding regular meetings with theaccounting auditor in order to heighten the effect of audit, while maintaining independence. Further, on the audit result, we work to strengthen
the function of monitoring of management by actively exchanging opinions.
With respect to the accounting auditor, we have selected Grant Thornton Taiyo LLC and made an audit contract with them for audit based on
the Companies Act and the Financial Instruments and Exchange Act.
The certified accountants who executed the business for the March term of 2024 were Mr. Tetsuro Shibatani and Mr. Yasushi Tsutsumi, with
continuous auditing years of no more than seven.
Also, there are assistants for accounting audit, including 4 certified accountants and 16 others.

3. Reason for maintaining our current corporate governance system
Our company adopts the auditor system as the system to monitor the corporate management. We have determined that the outside auditors(2 of them) have, as a lawyer and a certified accountant, expert knowledge of legal and accounting fields, respectively, and express various
opinions based on the objective and neutral monitoring that is independent of the persons who execute the business of our company, and are
thereby fully performing their role of monitoring the management from the viewpoint of lawfulness, fairness and transparency. Therefore, we
intend to maintain the current system, because our company has a governance system that ensures objectivity and independence, as
demonstrated by a verification of effectiveness and efficiency of performance of duties of the directors from an independent and fair position,
having outside auditors, and because a fully effective monitoring of management can be expected to ensure the trust of shareholders,investors, etc. Nevertheless, we will continue working on developing an even more suitable corporate governance system in response tochanges of the environment surrounding our company as well as revisions of laws and regulations.

Ⅲ Status of implementation of measures regarding shareholders and other stakeholders
1. Situation of the efforts toward vitalization of the general meeting of shareholders and facilitation of exercise
of voting rights Updated
Supplementary Explanation
Early mailing of the Notice of a General
Meeting of Shareholders
Scheduling of the shareholders' meetingthat avoided the day many meetings are
expected to be held
Exercise of voting rights byelectromagnetic means
Efforts for participation in the platform
for exercising voting rights byelectromagnetic means and otherimprovements of the environment forexercising voting rights of institutional
investors
Provision of the notice to convene(summary) in English

Others

2. Status of activities on IR

For the 129th annual meeting of shareholders held on June 26, 2024, we mailed itout on June 5, 2024, which was 5 business days earlier than the mailing day
required by law.
We held it on June 26, 2024, one business day before the day on which many
shareholders' meetings were expected to be held.
We adopted it starting with the 124th annual meeting of shareholders held on June
26, 2019.
We adopted it starting with the 124th annual meeting of shareholders held on June
26, 2019.
We are providing parts other than the audit report of the audit corporation, theaudit report of the board of company auditors and the site information map on
TDnet and our company's website in English.
At the time of explanation of the reported matters, we try to facilitate theunderstanding of contents of the reports for the shareholders in attendance, byusing PowerPoint. Also, we used the narration style for the purpose of facilitating
understanding aurally in the 129th annual meeting of shareholders held this year, as
in the previous year.

UpdatedSupplementary Explanation
Holding of periodical explanation
sessions for individual investors

We held company explanation sessions in the following IR events topresent our company to individual investors.
- September 2023 explanation session for individual investors

Explanation byrepresentative
him/herself

No- March 2024 Spring IR Festival
We explained the features of our products and technology, ourperformance, and future outlook to deepen individual investors'
understanding of our company.
We will continue to hold these sessions in the future.
The explanatory materials are available for viewing on the company’s
website.

Holding of periodical explanation
sessions for analysts and institutional
investors

Every year, we hold explanation sessions of full-year business results
toward the end of May, and explanation sessions of interim businessresults toward the beginning of December.
The explanation sessions for the financial results for the March term of2024 were held on May 29, 2024.
The explanatory materials are available for viewing on the company’s
website.
Furthermore, individual meetings with analysts and institutional investors
are held whenever necessary.

Listing of IR materials on our website

We created the "IR Information" page on our website and have publisheda variety of company information.
1.URL:https://www.topre.co.jp/
2. IR materials published on website and innews release; summary of accounts; annual securities report; notice ofgeneral meeting of shareholders; report to shareholders; financial
performance data; IR calendar

Creation of Division (person in charge)
on IR

General Affairs Department IR SectionYes

3. Status of efforts for respecting the position of stakeholders
Supplementary Explanation
Stipulation about respecting the positionof stakeholders by internal rules and soforthInternal Control Committee formulates the "Basic Philosophy" and "Guidelines for
Action" to be shared by Topre Group, and it aims to establish a righteous, fair andtemperate relationship with stakeholders.

Implementation of environmental
protection activities, CSR activities, etc.

We set the goal of establishing environmental protection and safety and health as
one of the Guidelines for Action of Topre Group. In our company activities, we aim to
be environmentally friendly and strive to save resources by promoting the 3 Rs:
Reduce, Reuse and Recycle.

Ⅳ Matters regarding internal control system, etc.
1. Basic idea about internal control system and the status of its maintenance
Basic policies concerning the development of internal control system(Preamble)
Our company establishes the following basic policies for internal control (basic policies regarding the development of a system to ensure
suitability of business operations), based on the Companies Act and the related laws and regulations, and will hereafter revise them asnecessary in response to its development and changes of various laws and regulations, etc. The Board of Directors will make these basic
policies known to all executives and staff of Topre Group, and will strive to develop the environment in which internal control will function
effectively.
1. System to ensure that performance of duties by directors/employees of our Group including subsidiaries will conform to laws and regulations
and to the Articles of Incorporation.
1) Executives and staff of our Group will strive to understand the "Basic Philosophy of Topre Group" and "Guidelines for Action", and undertake
initiatives to practice them.
2) The Internal Control Committee will manage the creation/operation of the internal control system of each company in our Group. It can also
form subcommittees as necessary with limited purposes in order to facilitate the activities effectively and smoothly.
3) The Audit Department receives reports from the compliance subcommittee on a regular basis and will audit the status of execution ofcompliance activities.
4) When executives and staff of our Group discover any act that violates, or is likely to violate, laws and regulations within the company, they
can report it to the "Contact for Internal Reporting" placed within and outside the company.
5) Against the anti-social forces and organizations that threaten the public order and safety of civic society, all employees, along with executives
and staff, will deal with it with a resolute attitude, and will strive for severing and expulsion of relationships with the anti-social forces andorganizations.
2. System of rules and others regarding the risk of loss in our Group including subsidiaries
1) Each company in our Group classifies risks associated with business activities in accordance with the "Risk Management Rules", anddesignates a section to take charge of it to continuously monitor the risks.
2) The risk management subcommittee adjusts the roles, etc., among divisions in order to deal with risks affecting the entire company or
multiple divisions of the company.
3) The Audit Department receives reports from the risk management subcommittee on a regular basis and will audit the status of execution ofrisk management of each company of our Group.
3. System to ensure that execution of duties by the directors of our Group including subsidiaries is effectively performed
1) We maintain the system to have the duties efficiently executed, by the rules for allocation of business operations and approving authority,
etc., based on internal rules of each company of our Group.
2) We established the "Basic Policy" for the entire company to be shared by directors / employees of our Group, and based on that, we drew up
the "Medium-term Management Plan" for the period of 3 business years.

3) We set the achievement target for each business division of every term, based on the "Medium-term Management Plan" of our entire Group.
The Board of Directors of our company receives this result report every month, and when the target is not achieved, it requires an analysis of
its cause and a report of improvement measures.
4. System regarding retention and control of information on execution of duties of Directors
1) We retain the information on execution of duties of Directors along with related documents pursuant to the document retention rules.
2) When a director or auditor requests viewing of a document, it will be available for viewing at the Headquarters within 3 business days fromthe date of request at the latest.
5. System to ensure the suitability of business at our corporate group comprised of our company and subsidiaries
1) The members that compose the Internal Control Committee select a member from each company of the Group to establish the system
where discussions on internal control, information sharing, and transmission of instructions and requests can be done effectively.
2) The directors of our company receive reports on the status of business execution at the Board of Directors of each subsidiary, and report thecontents thereof at the Board of Directors of our company.
6. Matters regarding the employee when the auditor decides to hire an employee to assist in his/her duties; matters regarding the employee's
independence from directors; and matters regarding ensuring effectiveness of the auditor's instructions to the employee
1) When the Board of Auditors requests placement of employees to assist in their duties, we will arrange the personnel within 3 months as a
rule.
2) Appointment, change and evaluation of the employee to assist the auditor shall be reported in advance to the fulltime auditor and his/her
consent will be obtained.
3) The employee to assist the auditor shall perform his/her duties following the directions of the auditor.
7. System regarding report to auditor
Directors and employees of each company of our Group and auditors of each subsidiary will report the matters provided in the internal control
rules and matters that are important for internal control to the auditor of our company without delay.
8. System to ensure that the person who made a report to the auditor will not receive adverse treatment for the reason of the reporting
Each company of our Group will not give any adverse disposition such as the dismissal of executives and employees for the reason that they
made reports to the auditor of our company.
9. Matters regarding the policy for disposition of expenses and liabilities arising out of execution of duties of the auditor from prepayment andreimbursement of expenses and other duties
For the expenses necessary for the execution of business of the auditor of our company, we prepare a budget in advance and makereimbursement every time a disbursement is made, including the expenses disbursed incidentally or in an emergency.
10. System for ensuring that auditor's audit is performed effectively
The Board of Auditors can make a contract with such experts as lawyers and accountants in its own judgment and receive advice on audit
work.
11. System to ensure accuracy of financial reports
1) We will revise, abolish and develop the rules related to the "Accounting Rules" based on the accounting regulations and standards, and will
strive for its dissemination, thoroughness and observance.
2) The Financial Report Control Subcommittee will promote the accuracy and uniformity of businesses on accounting, cost and finance of theentire Group companies in order to promote proper disclosure of financial reports required by the Financial Instruments and Exchange Act.
<Status of Maintenance>
In 2006, we established the Audit Department as an organization directly controlled by the president, and also organized the Internal Control
Committee (Compliance Subcommittee, Risk Management Subcommittee, Financial Report Control Subcommittee). The Internal Control
Committee makes regular reporting to the Audit Department on the status of implementation of internal control, and the Audit Department
makes its evaluation.
As the "Basic approach for expulsion of anti-social forces", we provided in the basic policy on the maintenance of the internal control systems
that we will deal with it with a resolute attitude, and we promote the activities for prevention of damage by anti-social forces and organizations,by making it well-known to all employees through in-house training, etc.

2. Basic approach for expulsion of anti-social forces and the status of its preparation
As the "Basic approach for expulsion of anti-social forces", we provided in the basic policy on the maintenance of the internal control systems
that we will deal with it with a resolute attitude, and we promote the activities for prevention of damage by anti-social forces and organizations,by making it well-known to all employees through in-house training, etc.

Ⅴ Others
1. Introduction of anti-takeover measures
Introduction of anti-takeover measures

No

Supplementary explanation on the applicable item―――

2. Other matters regarding corporate governance system, etc.
Our company information is aggregated to the General Affairs Department, which is the department in charge of handling information, and theGeneral Affairs Department determines the necessity of disclosure of information. In doing so, it not only follows the timely disclosure rules ofTokyo Stock Exchange but also makes the decision of whether to disclose from the viewpoint of constructing and maintaining the trust
relationship with various parties surrounding our company, such as shareholders, investors and customers, etc.

1. Information about decisions made and settlement of accounts
We hold discussions about the company's important issues at the Board of Directors, and the decisions made are immediately transmitted to
the General Affairs Department (the department in charge of handling information) through the Office of Executive Secretariat, which is theadministrative office of the Board of Directors. Also, the information about settlement of accounts is transmitted to the General Affairs
Department (the department in charge of handling information) by the Accounting Department.
2. The information about occurrences is transmitted to the General Affairs Department (the department in charge of handling information) by
each business department.
3. Reinforcement of disclosure system of subsidiaries
On the timely disclosure of company information about subsidiaries of our company, we make explanations again to each subsidiary to
promote the understanding of timely disclosure rules relating to important matters, and our company becomes actively engaged in collecting
information.

Schematic diagram of Internal Control of Topre Group

General Meeting of Shareholders
Consultation

Board of Directors

ReportCompensation
Committee
Nomination
Committee

Accounting Auditor
Board of Auditors
Auditors

Directors

President(the department in charge of internal
control across all companies)

Executive Officers

Each Business Department- Companies of the Group
Each department /sectionControl within thedepartment based on
official power and rules

Appointment/Dismissal

Audit
ReportSupervision/instruction

Each department / section

Each department / section

Control within thedepartment based on
official power and rules

Control within thedepartment based on
official power and rules

Compliance
Subcommittee

Risk Management
Subcommittee

Audit Department

Financial Report
Control
Subcommittee

Internal Control
Committee

＜System of transmission and disclosure of information＞

Resolution of Boardof Directors(Decisions made)Office of
Executive
Secretariat

Accounting
Department(Accountsettlement
information)

Department incharge of handlinginformation(General Affairs
Department)(Occurrence)

Each businessdepartment(Occurrence)(Confirmation of decision)

Subsidiaries

In charge of handlinginformation

In charge of public
relations- Timely disclosure to
Tokyo Stock Exchange- Announcement by spokesperson- Disclosure on Website