May 24, 2024
Company name:

UT Group Co., Ltd.

Representative:

Manabu Sotomura, President andRepresentative Director(Securities code:2146, TSE Prime Market)

For inquiries:

Takahito Yamada, Executive Officerand Division Manager, General
Affairs DivisionTEL:+81-3-5447-1710

Notice Regarding the Results of the Evaluation of the Effectivenessof the Board of Directors of the Company
In accordance with the Corporate Governance Code stipulated by the Tokyo Stock Exchange, UT Group Co.,
Ltd. conducted an analysis and evaluation of the effectiveness of the Board of Directors in order to improve its
functions. The results are summarized below.
1.

Method of analysis and evaluation
This is the third time to do the analysis and evaluation of the effectiveness of the Board of Directors
following the first one in FY3/2022.
(1) Evaluation period: February – March 2024
(2) Subjects of evaluation: All directors and all audit & supervisory board members, 6 in total(3) Method of evaluation: Self-evaluation through a Web questionnaire, and the compilation andanalysis of evaluation results by an external organization(4) Evaluation Items: 5 major items (29 questions in total)
1)

Organization and management of the Board of Directors

2)Management strategy and business strategy

3)

Corporate ethics and risk management

4)

Performance monitoring, and evaluation and compensation of management

5)

Dialogue with shareholders, etc.

(5) Answer method: 5-level evaluation and free comments and requests for each major item
2.

Summary of the results of the analysis and evaluation
In the above questionnaire, we confirmed that the evaluation average for all five major items was 4.38,
which is a further increase from the previous score of 4.16, that the Board of Directors is functioning
appropriately based on the evaluation contents of each item listed below, and that the effectiveness ofthe Board of Directors is generally ensured. Even in the free comments, nothing pointed out any
significant deficiencies.
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(1) Management and organization of the Board of Directors
The highest evaluation was given to the fact that the roles and functions of the Board of Directors
and the management team responsible for business execution have been clearly identified, and sohave been the roles and functions of outside directors in the Board of Directors.
In addition, improvements have been made to the method of explaining agenda items necessary
and sufficient to deepen substantive discussions, which had been an issue raised at the time of theprevious evaluation, and due consideration has been given to the advance distribution of materials
and the timing of explanations, which has led to realize discussion of appropriate coverage andcontents based on comprehensive understanding of necessary information. Higher evaluation wasgiven to these points. However, it was also confirmed that the way of reporting and proceeding
matters resolved by the Management Council at the Board of Directors meetings needs to become
more efficient.
Regarding communication between management and outside directors, while outside directors andsome executive officers have opportunities for dialogue and share necessary information at theAudit and Supervisory Committee, some expressed the view that the creation of opportunities forfurther enhancement of mutual communication should be considered.

(2) Management strategy and business strategies
The Board of Directors received the highest evaluation for its efforts to realize higher sustainablecorporate value in light of changes in the external environment, such as growing uncertainty in thebusiness environment and rising social demand for sustainability.
At the same time, it was confirmed that the roles of the Board of Directors should be clarified informulating medium- to long-term business plans, investing in human capital, and formulating andexecuting human resource strategies to realize the long-term management vision, and that efforts
should be made to set the agenda of the Board of Directors based on these roles and to deepen
discussions.
Regarding the realization of management that uses cost of capital as a base, while there is no
particular problem in the discussion of investment and return in M&A activities and IT investments, it
was pointed out that efforts such as appropriate allocation of management resources for sustainablegrowth and review of business portfolios should be promoted.

(3) Corporate ethics and risk management
Factors such as "the supervision of the construction and operation of the internal control system,""the appropriate functions of the internal audit department," and "establishment of a risk
assessment process" were highly evaluated. It was confirmed that the Board’s risk managementand assessment are appropriate, while the Board is sufficiently cooperating with the Internal Audit
Division and other departments. Although the evaluation of the question items was generally high,some expressed the view that it would be desirable for the Board of Directors to confirm the2 / 3

establishment of a risk management system throughout the value chain, including business
partners, and the status of efforts to improve productivity.

(4) Performance monitoring, and evaluation and compensation of management
In March 2024, UT Group has decided to change the management system to have two
representative directors. The objective is to accelerate decision-making and strengthen businessexecution functions by clarifying the roles of the two Representative Directors in realizing theRolling Plan of the Fourth Medium-Term Business Plan. At the time of the previous evaluation,
the formulation and operation of a successor plan for the CEO, etc. was identified as an issue,and had been continuously discussed.
Going forward, with regard to the development of the next generation of management personnel,
it was confirmed that the Board of Directors and the Nomination and Compensation Committee
should work to share their understanding concerning roles played by the Board of Directors andthe Committee and that, based on this shared understanding, the Nomination and Compensation
Committee should share information with the Board of Directors on the current status ofdiscussions.

(5) Dialogue with shareholders, etc.
The Board of Directors received the highest evaluation for its efforts to utilize dialogue withshareholders to enhance corporate value, such as by reviewing strategies, KPIs, and governancebased on the opinions obtained from shareholders and investors through dialogue. Some
expressed the view that discussions from the perspectives of corporate value enhancement andshare price have become deeper than before. In addition, as mentioned above in (2) Management
strategy and business strategy, there was an opinion that efforts should be considered to realize
management with an awareness of capital cost and share price.
3.

Future responses based on the results of analysis and evaluation
Based on the results, the Board of Directors will focus on addressing the above-mentioned issues,
continuously strive to ensure the effectiveness of the Board of Directors, and aim to further enhance
corporate governance and continuously raise corporate value.
End3 / 3