Corporate Governance Report
CORPORATE GOVERNANCE

Joshin Denki Co., Ltd.

Last updated on: December 7,2023
Joshin Denki Co., Ltd.

Ryuhei Kanatani, Representative Director, President and Executive Officer
Contact: Management Planning Department (+81) 6-6631-1122
Securities Code: 8173

https://www.joshin.co.jp/joshintop/ir_en.asp
The status of the Company’s corporate governance is as follows.
I. Basic concept of corporate governance, capital structure, corporate attributes and other basic information
1. Basic concept of corporate governance
The Company aims to strengthen its efforts in the home appliance retail business, which we have developed over many years
since our establishment, and to become a business management organization that can respond quickly and accurately to therapidly changing business environment.
In order to accurately understand the actual situation in the field of sales and to make effective and efficient decisions, many ofour directors are in charge of business execution. At the same time, with the aim of utilizing objective viewpoints different fromthose of people from within the Company as well as to strengthen the management system and further improve transparency,
outside directors and outside auditors have been designated as independent officers. In this way, we intend to enhance ourcorporate governance while further strengthening the current system of directors and auditors.
In addition, we will strive to promptly and accurately disclose information to shareholders and investors from the perspective ofmanagement transparency.
[Reasons for not implementing individual principles of the Corporate Governance Code]The information is based on the revised code as of June 2021.
[Supplementary Principle 2-4-(1): Ensuring diversity in appointing core personnel, etc.]
1. Ensuring diversity
We believe that the active participation of diverse human resources is the source of our organizational strength and helps
curb the risks posed by social changes, seize new business opportunities, and leads to sustainable growth. We are actively
recruiting a wide range of human resources throughout the year – increasing the ratio of female employees and hiring career
professionals with immediate ability in various fields, as well as promoting them to management positions.
(1) Promotion of women to management positions
Women account for 36.5% of the Group’s total workforce (including non-regular employees) and 13.0% of full-time longterm employees. The percentage of female managers is only 3.6%, but we will increase the number of female employees
by enhancing the recruitment of female employees (56.4% of new graduates hired in fiscal 2023) and actively
encouraging non-regular female employees to become full-time long-term employees. In addition, we are planning toincrease the ratio of female managers to 20% by fiscal 2030 by promoting the creation of role models for appointment toexecutive positions and promotion to managerial positions.
FY 2022

FY 2030

FY 2050

ActualPlan

Plan

Ratio of female full-time employees

13.0%

30.0%

50.0%

Ratio of female employees*

36.5%

50.0%

50.0%

Ratio of female managers

3.6%

20.0%

50.0%

* Including non-regular employees(2) Appointment of non-Japanese employees to management positions
We do not bind foreigners to their “nationality,” but rather classify each person as “a human resource with rich overseas
experience and a global perspective.” Although we do not currently set a specific numerical target for the number of nonJapanese employees, we will continue to proactively hire non-Japanese employees and appoint them to executive
positions in anticipation of a future increase in the number of international customers.
Number of non-Japaneseemployees
As a percentage of
all employees

23
0.26%

Note: Number of employees as of March 31, 2023

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(3) Appointment of mid-career hires to management positions
We believe that knowledge and experience in various fields are necessary to create diverse value and solve social
issues. Accordingly, we plan to increase the percentage of mid-career hires (in the form of mid-career talent who cancontribute immediately) to approximately 50% of planned new hires for each fiscal year.

Mid-career hires as a percentage of all
employees

37.6%

Mid-career hires as a percentage of all
management positions

27.4%

Notes: Number of employees as of March 31, 2023
The number of mid-career hires includes non-regular employees.
2. Human resources development policy and internal environment improvement policy to ensure diversity and the current
situation
We believe that employee ownership leads to sustainable growth by improving CS (creation of social value), and we areworking to build a work environment in which diverse human resources can thrive and play an active role, and develop
human resources, based on the four key phrases of “securing human resources in response to changes in the environment,”“diversity and inclusion,” “work-life balance,” and “respect for human rights,” as a prerequisite for enhanced employee
engagement.
The following documents are posted on our website to provide information on our human resource development policy andinternal environmental improvement policy.
○Integrated Reporthttps://www.joshin.co.jp/en/ir/library/report.html[Disclosure based on the principles of the Corporate Governance Code]updated[Principle 1-4: Cross-shareholdings]
The Company currently holds listed stocks as policy from the perspective of enhancing the Company’s corporate value overthe medium to long term for the purpose of strengthening business relationships and promoting smooth business operations.
Although the total market value of cross-shareholdings has been trending upward due to fluctuations in the market value ofshares, the number of stocks held has been gradually reduced, and in principle, new shareholdings will not be entered into in
the future.
Status of cross-shareholdings
Fiscal year ended
Listed stocks (number ofdifferent stocks)

March 2020

March 2021

33

March 2022

31

30

March 2023
26

Regarding the current shares that are strategically held by the Company, the Board of Directors conducts quarterly
qualitative verification of the purpose of holding such shares, including the maintenance of smooth and good business
relationships with business partners and the establishment of supply chains, as well as quantitative verification of thepercentage of total assets, profits from business relationships, dividends, etc. As for shares for which the significance of theholdings has been deemed to be diluted, we proceed to dispose of them as appropriate through dialogue and negotiation withthe companies concerned.
Furthermore, regarding the exercising of voting rights, the Company shall exercise such rights in light of the purpose ofholding such shares and by comprehensively taking into consideration the governance structure and business performance of
the issuing company.
[Principle 1-7: Transactions with related parties]
Regarding all transactions which may cause conflicts of interest, such as transactions between related parties, the Company
has established internal rules which require the Board of Directors to deliberate and pass resolutions on such transactions. In
addition, the Company shall regularly confirm each year whether or not there are any transactions between the Company’s
officers and their close relatives (including companies in which such persons hold a majority of voting rights) and the Company.
In addition, a whistleblowing system has been established as a part of the system to monitor and ensure the appropriatenessof business operations.
[Principle 2-6: Demonstrating our function as an asset owner of corporate pensions]

2The Company appoints personnel with experience and expertise in asset management, and who have been involved in
asset management for many years at organizations entrusted with the management of corporate pension assets, as internal
consultants.
In asset management, our basic policy is “sound and stable asset development for the employees,” under which we avoid
fixed investment in domestic/international stocks and corporate bonds, and flexibly reconfigure our portfolio and change thestocks of the institutions we entrust with asset management in response to changes in the business environment. In addition,
since fiscal 2019 we have been contributing to risk response premiums in preparation for a worsening business environment,
thereby minimizing the potential impact on the Company’s financial position as much as possible.
In addition, verification of investment results is carried out by the Asset Management Committee on a quarterly basis tocontinuously improve operations, and reports on the stewardship activities of institutions entrusted with asset management arerequested as a monitoring system.
[Principle 3-1: Enhancement of information disclosure](i) Our management philosophy structure and medium- to long-term management strategies are published in the“Integrated Report.” (“Integrated Report 2022” is available on our website(https://www.joshin.co.jp/ja/csr/archive/main/0/teaserItems1/01/link/2022_JCSR_en.pdf). The “JT-2025 Management
Plan” medium-term management plan covering the three-year period from April 2023 to March 2026 was announced in
May 2023, and is also available on our website.(https://www.joshin.co.jp/en/ir/management/medium-term.html)(ii) Basic concept and basic policy on corporate governanceAs disclosed in “Integrated Report 2022” and the “Corporate Governance Report,” our basic concept on corporate
governance is to strengthen our efforts in the home appliance retail business, which we have developed over many
years since our establishment, and establish a management control system that can respond quickly and accurately tothe rapidly changing business environment, achieve sustainable growth, and improve medium- to long-term corporate
value.
(iii) The total amount of directors’ remuneration is determined by the General Meeting of Shareholders, and monetarycompensation has been set at no more than 240 million yen per year. A system of stock compensation has also been
approved by the General Meeting of Shareholders. The Nomination and Compensation Committee, the majority ofwhose members are independent outside directors, one of whom chairs the committee, consults with the Board of
Directors, deliberates on the allocation of compensation to individual directors based on the “Regulations on
Compensation for Directors,” and the Board of Directors makes decisions based on the committee’s report. The“Regulations on Compensation for Directors,” which are the basis of the director compensation system, were
substantially revised in April 2023. The purpose of the revisions is to change the executive compensation system to link
director compensation to management strategy as part of the functional enhancement of the Board of Directors, which isthe driver of management strategy, and to connect achievement of the strategy to the Company’s sustainable growthand enhancement of corporate value. Compensation for directors of the Company is determined based on thecompensation multiplier by position of each director and the Company’s business performance. The revisions raised theamount of standard monthly compensation for “Director and Executive Officer” from no more than 200% to no more than
300% of the maximum monthly salary under the employee salary system, and the compensation multiplier is set at 1.0
for “Director and Executive Officer,” 1.2 for “Director and Managing Executive Officer,” 1.4 for “Director and Senior
Managing Executive Officer,” 1.7 for “Director and Executive Vice President,” 2.0 for “Director and President,” and 1.7 for“Director and Chairperson.” Previously, an additional 0.2 was added to the compensation multiplier for the CEO, but the
recent system revisions raised this to an additional 0.3, and also modified the structure so that an additional 0.2 is added
to the compensation multiplier for representative directors. Furthermore, the ratio of fixed compensation to performancelinked compensation in the total amount of director compensation was revised to 50%:50% (from 70%:30%), the ratio ofmonetary compensation to stock compensation was revised to 70%:30% (from 80%:20%), management responsibility
was clarified, and a revised compensation system was adopted that contributes to medium- to long-term enhancementof corporate value by introducing ESG indicators in the calculation basis for stock compensation. For executive officers,
we transitioned to a delegation-based executive officer structure in April 2022, and introduced a compensation system
similar to that of directors, with a ratio of monetary compensation to performance-linked compensation of 80%:20%. The
revised system is intended to further incentivize executive officers to contribute to improvement of medium- and longterm business performance and enhancement of corporate value by clarifying linkage with the compensation of directors
and executive officers, and by enabling directors and executive officers to share the benefits and risks associated withstock price fluctuations with shareholders. Compensation of outside directors consists solely of fixed monetarycompensation, the amount of which is determined on an individual basis, taking into consideration factors such associetal standards, career of the outside director concerned, and knowledge and experience in specialized fields.

3

【Before revision】
Stock compensation(20%)

Monetary compensation(80%)

Linked toindividual
performance(10%)

Fixed compensation(70%)

Linked to Company
performance(20%)

【After revision】
Monetary compensation(70%)

Stock compensation(30%)

Linked toindividual
performance(10%)

Fixed compensation(50%)

Linked to financial
indicators(20%)
Linked tooperatingprofit(10%)

Linked to ROE(10%)

Linked to sustainability
indicators(20%)
Linked toenvironmental
management
indicator(10%)

Linked toemployeeengagement
index
(10%)

(iv) In the appointment and dismissal of directors, the Nomination and Compensation Committee, the majority of whose
members are independent outside directors, one of whom chairs the committee, deliberates selection after consultation
with the Board of Directors, and the Board of Directors makes candidate decisions based on its report. In its
deliberations on the selection of candidates, the Nomination and Compensation Committee considers the overallbalance of knowledge, experience, and capabilities of the Board of Directors and follows set guidelines concerning
certain skills the Board of Directors considers optimal in light of the Company’s fundamental thinking about the numberof directors and diversity. The basis for the selection of director candidates should be whether the individual cancontribute to the enhancement of the Company’s corporate value over the medium to long term.
Auditors who can apply insights, based on their individual career backgrounds, to the Company’s business operations
and management, internal controls, and financial management, etc., are nominated with the consent of the Board ofAuditors. When appointing outside directors and outside auditors, importance is placed on the wealth of experience andhigh level of insight such persons possess in their respective fields, and on the independence of such directors andauditors, and these functions are exhibited when serving on the Board of Directors and the Board of Auditors. Following
the retirement of one full-time auditor whose term of office expired, a new female outside auditor was appointed byresolution of the 75th Annual General Meeting of Shareholders. As a result, the number of independent officers wasseven in total, including four of the nine directors and three of the four auditors.
(v) Explanation of individual appointments, dismissals and nominations in the event of the appointment or dismissal ofsenior management and the nomination of candidates for directors and auditors by the Board of Directors
Candidates for directors and auditors are disclosed in the reference documents included with the “Notice of the Annual
General Meeting of Shareholders” along with a brief personal history, details of concurrent positions held by eachcandidate, and a skills matrix for the Board of Directors in line with the Company’s management strategies. The
Nomination and Compensation Committee, the majority of whose members are independent outside directors, one ofwhom chairs the committee, deliberates appointment and dismissal after consultation with the Board of Directors so thata fair and transparent process can be followed when appointing and dismissing directors and the Board of Directors
makes decisions based on its report. The Board of Directors decides on a proposal for appointment and dismissal basedon the results of discussions at the meeting of Board of Auditors.
[Supplementary Principle 3-1-(3): Initiatives for sustainability, etc.](1) Our approach to sustainability
We manage in a way that links our contributions to constructing a more sustainable society to the Company’ssustainable growth and enhanced corporate value. We will achieve this by creating two forms of social value—“supporting and strengthening resilience in our aging society” and “achieving carbon neutrality in the home”—based on
our management philosophy of “connecting people and society to the future with a smile.”
In order to create the above two forms of social value, we have defined our management vision as “becoming an
infrastructure hub for a better life through the power of home appliances and ICT” and have been working to achieve thisvision. As important issues to be address, we have identified seven material issues (major challenges) and 14
challenges, and we have formulated initiatives for the intermediate point of 2030 with a view to what kind of company wewant to be three decades from now, in 2050.
(2) Investment in human capital, intellectual property, etc.

4

In order to link the improvement of customer satisfaction (CS) (i.e., creation of social value) through the advancement of
employee engagement to sustainable growth, we are actively investing in the creation of an internal environment inwhich diverse human resources can thrive and in development of human resources, and are working to build employee
ownership with the four key phrases of “securing human resources in response to changes in the environment,”“diversity and inclusion,” “work-life balance,” and “respect for human rights” as our themes. Furthermore, since ourfounding, we have constantly built up positive relationships with our customers by practicing our Corporate Credo of“Thoughtfulness,” which means to always think and act in consideration of the other’s perspective. Likewise, throughrepeated trial and error, we have accumulated expertise in store development and the operation of brick-and-mortar
stores and an e-commerce shop. We have also developed know-how in marketing and after-sale support based on
customer information, while also crafting a corporate brand image through collaboration with sponsor companies.
Moreover our tagline—“People, towns, smiles. Joshin”—functions as a tool for further building understanding of ourmanagement philosophy—“Connecting people and society to the future with a smile”—and our corporate brand image.
All of the above are incredibly important intellectual properties that are indispensable to our value creation process.
Going forward, we will continue to actively invest to increase our expertise and enhance our corporate brand image.
(3) Risks related to climate change and the impact of profit opportunities on the Company’s business activities and earnings
In addition to endorsing the TCFD recommendations, the Company sees the transition to a decarbonized society as an“opportunity” and is working to create social value in the form of “achieving carbon neutrality in the home” by promoting
the use of home appliances with high performance in energy generation, energy storage, and energy saving.
As part of our efforts to reduce greenhouse gas emissions from our business activities, we are working to reduce
environmental impact by increasing the ratio of renewable energy sources, such as by installing solar power generation
systems at our business sites and switching to CO2-free power sources. Based on the TCFD recommendations, we
disclose climate change-related information in accordance with the four areas of disclosure recommended by the
TCFD—governance, risk management, strategy, and metrics and targets. In our analysis of climate-related risks andopportunities, we studied countermeasures after analyzing the impacts that climate change will bring, assuming a world
under the two scenarios of 1.5°C–2°C of warming and 4°C of warming. In addition, for greenhouse gas emissions, we
assess Scope 1 and 2 emissions, and obtain third-party verification to ensure the reliability of our figures. For Scope 3 aswell, we have assessed all categories that are relevant to greenhouse gas emissions. Moving forward, in addition todisclosure based on the TCFD recommendations, we will enhance the quality and quantity of our disclosure of climatechange-related information, including preparing a transition plan for greenhouse gas reduction.
The following documents are posted on the Company’s website to disclose the details of our response policies for (1),(2) and (3).
○ Sustainability page (in Japanese only)
https://www.joshin.co.jp/ja/csr.html[Supplementary Principle 4-1-(1): Scope of delegation to management]
As the highest decision-making body, the Board of Directors decides on important management matters such as medium- tolong-term management policies and business strategies aimed at creating social and corporate value, and also entrusts each
executive director with high-level judgment and decision-making as the person in charge of the business execution area forwhich he or she is responsible.
By defining the scope of delegation in detail through the Board of Directors regulations, executive officer regulations,
regulations for division of duties, and rules for decision-making, the Board of Directors shall establish an organizational
structure which enables each director to work in close coordination and make high-level and flexible decisions.
The Board of Directors holds regular meetings at least once a month, as well as extraordinary meetings as necessary, andthe Board of Executive Officers meets once a week, in principle, to supervise the execution of duties by the directors andexecutive officers.
[Principle 4-9: Criteria to determine the degree of independence of independent outside directors and their qualifications]
Criteria to determine independence at the Company is based on satisfying both the requirements for outside officers requiredby the Companies Act and the independence standards required by stock exchanges, and appropriate personnel who cancontribute to the enhancement of corporate value and shareholder interests are deemed eligible to be outside officers, and areregistered with the stock exchanges as independent officers based on the approval of the General Meeting of Shareholders.
Criteria to determine independence are deliberated by the Nomination and Compensation Committee, in consultation with
the Board of Directors as appropriate, and the Board of Directors decides the criteria based on the received report. The
independence of individual outside officers is disclosed in the Corporate Governance Report.
[Supplementary Principle 4-10-(1): Approach, authority, and role of the independence of the composition of committees]
The Company has appointed a total of seven independent outside officers, out of which four are independent outside
directors (two of whom are women) and three are independent outside auditors, with the goal of ensuring management istransparent and objective.
(1) Nomination and Compensation Committee
The Company has established the Nomination and Compensation Committee, which consists of four independent
outside directors and two representative directors. The majority of the committee’s members are independent outside5

directors, one of whom chairs the committee, in order to ensure the committee’s independence. The committee
deliberates on the appointment and dismissal of directors, succession planning, design of the compensation system, andthe amount of individual compensation for directors, and the Board of Directors makes decisions based on its report.
(2) Evaluation Committee for the Board of Directors
The Company has established the Evaluation Committee for the Board of Directors, which consists of four independent
outside directors and four auditors including three independent outside auditors, and has established a system underwhich independent outside directors provide appropriate advice to the Board of Directors from various perspectives
through the evaluation of the effectiveness of the Board of Directors.
[Supplementary Principle 4-11-(1): Concept regarding the balance of knowledge, experience and skills, diversity and size of theBoard of Directors as a whole]
Based on the belief that diversity of the directors comprising the Board of Directors affects its effectiveness and significantly
impacts sustainable growth and the enhancement of corporate value over the medium to long term, the Company’s Board of
Directors has deliberated on the balance and diversity of the composition of the Board of Directors, including the knowledge,
experience and abilities of the directors. As a result, the Company summarizes the optimal skills, etc., required by the Board of
Directors in a “Skills Matrix” for directors and auditors and has published it in the “Notice of the Annual General Meeting of
Shareholders” since the 73rd Annual General Meeting of Shareholders held in June 2021, as a nomination proposal
prerequisite for directors and auditors.
The Company considers the skills matrix to be a tool to ensure diversity in the Board of Directors by recruiting a wide rangeof personnel with strengths in specific fields, and uses it to visualize the process to determine any excess or deficiency in skills
among the directors and to balance such excess or deficiency through the appointment and dismissal of internal and outside
directors.
In the “Notice of the 74th Annual General Meeting of Shareholders” we explained the thinking behind how we utilize the skills
matrix. In addition to this, we have considered the management strategies we formulated in fiscal 2021 and redefined theskillsets that the Board of Directors deems necessary, including knowledge, experience, and capabilities. Items have also beenorganized into skills needed for corporate management and skills and experience required to achieve our business strategies
or address our material issues. Furthermore, “ICT/DX” and “Environment & Energy,” which were previously classified as skills
related to business specialization, were redefined as management skills in light of recent trends, and we utilize this skills matrix
as follows.
1. Identification of the necessary skills for the Board of Directors in light of the business strategy
2. Understanding the gap between the ideal composition of the Board of Directors and the current situation
3. Appointment of people who have skills that directors lack to the Board of Directors
4. Enhanced director training for skills that directors lack
5. Utilization in succession plans for directors
6. Utilization in succession plans for executive officers and other senior management
The skills matrix is disclosed on page 16 of the “Notice of the 75th Annual General Meeting of Shareholders.”(https://www.joshin.co.jp/en/ir/meeting.html)[Supplementary Principle 4-11-(2): Directors and auditors holding concurrent positions at other listed companies]
When a proposal on candidates for directors and auditors in the General Meeting of Shareholders is submitted, the status ofconcurrently held positions is disclosed in the business reports and reference documents of the “Notice of the Annual General
Meeting of Shareholders.” Some candidates may hold concurrent positions as outside officers of other listed companies, but
this is not particularly considered to be an obstacle in their attendance at the meetings of the Board of Directors and the Board
of Auditors of the Company, and the number of concurrent positions remains within a reasonable range.
[Supplementary Principle 4-11-(3): Analysis and evaluation of the effectiveness of the Board of Directors as a whole]
The Company continuously promotes efforts to improve the effectiveness of the Board of Directors, which plays a central
role in the efforts of the Company to enhance its corporate value and shareholder profits over the medium to long term. For
the fiscal year ended March 2023, the Evaluation Committee for the Board of Directors, which consists of outside directors
and auditors, was established to investigate the effectiveness of the Board of Directors, targeting all directors and auditors
who are members of the Board of Directors. The Company conducted anonymous questionnaires and interviews with thedirectors, and the results were reported to the Board of Directors, along with the opinions of outside directors. The Board of
Directors confirmed that the Board of Directors is functioning effectively based on the analysis of the survey results, and also
identified constructive opinions and suggestions obtained in the course of the survey as issues which can contribute to thefurther improvement of the effectiveness of the Board of Directors and is formulating action plans to address such issues. A
summary of the evaluation results of the effectiveness of the Board of Directors for the fiscal year ended March 2023 wasdisclosed on June 20, 2023.
[Supplementary Principle 4-14-(2): Training policy for directors and auditors]
The Company provides opportunities for directors and auditors to improve their skills by acquiring the necessary knowledge
and to remain up to date on the appropriate knowledge, so that such they can properly fulfill their expected roles andresponsibilities. For directors, auditors and executive officers, ongoing training by external instructors is provided on legal
regulations and obligations under the Companies Act, Financial Instruments and Exchange Act, and other laws and6regulations, as well as training needed for officers to acquire and remain up to date on legal and other related knowledge andskills required for the management practices of the Company. In addition, we provide practical training for executive directors to
update their knowledge on sustainability management and build practical experience by giving them a succession of
responsibilities for overseeing important meetings on issues such as compliance, internal controls, risk management andenvironmental management. At the same time, the system to obtain advice from lawyers, certified public accountants, tax
accountants, and other specialists on a case-by-case basis has been enhanced. As many of our directors are in charge ofvarious operations in the Company and are engaged in tasks that require a high level of judgment, we believe that total training
is indispensable for the execution of each operation in the Company.
[Principle 5-1: Policy for constructive dialogue with shareholders]
We believe that constructive dialogue with shareholders will lead to sustainable growth and medium- to long-term
enhancement of corporate value, and therefore the directors are proactively engaged in IR activities. Regarding specificactivities related to IR, a forum for dialogue, such as financial results briefings, individual IR for institutional investors, and IR
seminars for individuals are provided, and questions and requests received by phone or from the Company website areappropriately handled on a daily basis. We also made our disclosure policy public in December 2022. Given how timely andappropriate disclosure of important information of the Company that may be useful to stakeholders leads to deeper
understanding of the Group, we will engage in IR activities that promote constructive dialogue.
[Measures to realize management that is conscious of the cost of capital and stock price] [English disclosure available]
In formulating and announcing the management strategy and management plan, the Company accurately grasps its cost ofcapital (cost of equity [CAPM] and the weighted average cost of capital [WACC]) with the aim of raising awareness of mediumto long-term improvement of corporate value by referring to the opinions of external organizations. The Company then presents
the basic policies of earnings plan and capital policy as well as the target levels of "ROE" and "ROIC," which are indicators of
the target capital profitability, and discloses the review of the business portfolio to realize these goals and the allocation ofmanagement resources, including capital investment and investment in human capital. ROE is also adopted as a standard for
calculating performance-linked stock compensation for directors to clarify management responsibilities. These policies,
strategies, and plans are announced in the Integrated Report, Medium-term Management Plan and other reports. The JT-2025
Management Plan, a three-year plan covering the period from April 2023 to March 2026, has been announced as the Mediumterm Management Plan.
■ Medium-term Management Plan "JT-2025 Management Plan"
The medium- to long-term growth scenario is described in pages 11 to 15, the capital profitability and cost of capital, as well as
cash allocation in pages 16 to 18, the shareholder returns in page 19, and the business strategy framework and individual
strategies in pages 20 to 26.
https://www.joshin.co.jp/en/ir/management/medium-term.html■ Integrated Report 2023
The medium- to long-term growth scenario is described in pages 27 to 38, and the cost of capital and cash allocation in pages
39 to 42.
https://www.joshin.co.jp/en/ir/library/report.html
2. Capital structure
Foreign Shareholding Ratio

Less than 10%[Status of major shareholders]Name and/or title

Number of shares owned(stock)Percentage(%)

The Master Trust Bank of Japan, Ltd. (trust account)

1,977,600

7.47

Joshin Denki Employee Shareholding Association

1,846,257

6.97

Resona Bank, Ltd.

1,200,010

4.53

The Dai-ichi Life Insurance Company, Limited

1,000,000

3.77

542,500

2.04

Sharp Corporation

7

Custody Bank of Japan, Ltd. (trust account)535,375

2.02

Sompo Japan Insurance Inc.

506,500

1.91

Daikin Industries, Ltd.

447,792

1.69

Sumitomo Mitsui Trust Bank, Limited

420,000

1.58

Mitsubishi UFJ Trust and Banking Corporation

400,000

1.51

Existence of controlling shareholders(excluding the parent company)-

Parent company

None

Supplementary explanation
1. “Status of major shareholders” is based on the shareholder registry as of March 31, 2023.
2. “Percentage (%)” in the above table is calculated after excluding treasury stock (1,528,398 shares).
3. Corporate attributes
Stock exchange listing and market segment

Tokyo Prime Market

Fiscal year

March

Industry

RetailNumber of employees (consolidated)
as of the end of the previous fiscal year

1,000 or more

Net sales for the previous fiscal year
(consolidated)

100 billion yen or more and less than 1 trillion yen

Number of consolidated subsidiaries
as of the end of the previous fiscal year

10 or more and less than 50

4. Guidelines on measures to protect minority shareholders in transactions with controlling shareholders–

5. Other special circumstances which may significantly affect corporate governance–

II. Status of management control organizations and other corporate governance systems related to management
decision-making, execution and supervision
1. Matters related to organizational structure, organizational management, etc.
Organizational structure

Company with a board of auditors[Directors]
Number of directors as stipulated in the Articles ofIncorporation

15 persons

8Term of office of directors as stipulated in the
Articles of Incorporation

1 yearChairman of the Board of Directors

Representative Director, President and Executive Officer

Number of directors

9 personsAppointment of outside directors

Nominated

Number of outside directors

4 persons

Number of outside directors who are designated as
independent officers

4 personsRelationship with the Company (1)Name

Affiliation

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

Kinya Naito

Attorney at law○

Keiko Yamahira

From another company○

Junko Kawano

From another company○

Seiji Nishikawa

From another company△*Categories for “Relationship with the Company”.
(Use “○” when the director presently falls or has recently fallen under the category; “△” when the director fell under the category
in the past; “●” when a close relative of the director presently falls or has recently fallen under the category; and “▲” when aclose relative of the director fell under the category in the past.)
a. Person who executes business for the Company or its subsidiary
b. Person who executes business for or a non-executive director of the Company's parent company
c. Person who executes business for a fellow subsidiaryd. Person/entity for which the Company is a major client or a person who executes business for said person/entity
e. Major client of the Company or a person who executes business for said clientf. Consultant, accounting expert, or legal expert who receives large amounts of cash or other assets from the Company in addition
to remuneration as a director/Audit and Supervisory Board Member
g. Major shareholder of the Company (in cases where the shareholder is a corporation, a person who executes business for the
corporation)h. Person who executes business for a client of the Company (excluding persons categorized as any of d, e, or f above) (applies
to director him/herself only)
i. Person who executes business for another company that holds cross-directorships/cross-auditorships with the Company(applies to director him/herself only)
j. Person who executes business for an entity receiving donations from the Company (applies to director him/herself only)
k. Other
Relationship with the Company (2)Name

Kinya Naito

Independent
officer

Supplementary
explanation on applicable
items

Reason for appointment

Yes

Attorney at law(No business relationshipwith the Company)

Using his experience and expertise as a lawyer, Kinya Naito has
been judged as a person who can provide advice andrecommendations on the compliance management of theCompany from an objective, broad and sophisticatedperspective. Furthermore, he was designated as anindependent officer because there are no special interests
between him and the Company, and there is no reason forconcern regarding conflicts of interest with generalshareholders.

9Keiko Yamahira

Yes-

Keiko Yamahira has abundant experience and insight incorporate management, and has been judged as a person who
can provide advice and recommendations on the corporate
activities of the Company from an objective, broad andsophisticated perspective. Furthermore, she was designated as
an independent officer because there are no special interests
between her and the Company, and there is no reason forconcern regarding conflicts of interest with generalshareholders.

Junko Kawano

Yes-

Using her expertise and experience in the fields of management
consulting and in the promotion of participation by women,
Junko Kawano can provide advice and recommendations on themarketing strategies of the Company and regarding diversity
management from an objective, broad and sophisticatedperspective. Furthermore, she was designated as anindependent officer because there are no special interests
between her and the Company, and there is no reason forconcern regarding conflicts of interest with generalshareholders.

Seiji Nishikawa

Yes-

Seiji Nishikawa has abundant experience and knowledge in thefields of ICT and DX, and has been judged as a person who canprovide advice and recommendations on the corporate activitiesof the Company from an objective, broad and sophisticatedperspective. Furthermore, while he has previously worked for
NTT DOCOMO, Inc. and DOCOMO Systems, Inc., theCompany has had very few dealings with NTT DOCOMO, so
this does not affect his independence. Therefore, he wasdesignated as an independent officer because there are no
special interests between him and the Company, and there is no
reason for concern regarding conflicts of interest with generalshareholders.

[Voluntary committee]
Existence of a voluntary committee corresponding to a nominationcommittee or compensation committee

Yes

Status of the establishment of a voluntary committee, composition of committee members, and attributes of the committee
chairman (chairperson)
Voluntary committee corresponding to a nomination committee
Name of the committee
Committee
members(Persons)

Full timecommittee
members

Company
directors

Outside directors(Persons)(Persons)(Persons)
6

Nomination and Compensation Committee

02In-houseexperts(Persons)(Persons)

4

Committee
chairman

Others0(Chairperson)

0

Outside director

Voluntary committee corresponding to a compensation committee
Name of the committee
Committee
members(Persons)

Full timecommittee
members(Persons)

Nomination and Compensation Committee
Company
directors(Persons)

Outside directors(Persons)

10

In-houseexperts(Persons)

Others(Persons)

Committee
chairman(Chairperson)

6

0

2

4

0

0

Outside director

Supplementary explanation
The Company has established the Nomination and Compensation Committee as an advisory body to the Board of Directors
in order to strengthen corporate governance by ensuring the independence, objectivity, and transparency of the functions of theBoard of Directors concerning decisions on the nomination and compensation of representative directors and directors, etc., aswell as personnel matters such as plans of succession for the CEO.
The Nomination and Compensation Committee is a voluntary committee which performs functions corresponding to both anomination committee and a compensation committee, and consists of independent outside directors, representative directors,
and directors appointed by resolution of the Board of Directors, and the chairman of the committee who is elected from among
the independent outside directors.
[Auditors]
Establishment of Board of Auditors

Established

Number of auditors as stipulated in the Articles
of Incorporation

5 persons

Number of auditors

4 persons

Coordination between auditors, accounting auditor, and the internal audit department
The accounting auditor, EY Ernst & Young ShinNihon LLC, reports the details and results of audits to the Board of Auditors
regarding the settlement of accounts and quarterly financial results, and seeks to actively collaborate with the Board of Auditors
as needed to enhance the effectiveness of audits, such as through the exchange of information.
As an internal audit function, the Auditing Department, which reports directly to the President, conducts regular internal
audits of each department to check the status of business execution, prevent fraud and errors, and provide advice on business
improvement. The results of internal audits are regularly reported to the auditors on a monthly basis.
Appointment of outside auditors

Nominated

Number of outside auditors

3 persons

Number of outside auditors who are designatedas independent officers

3 personsRelationship with the Company (1)Name

Affiliation

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

l

m

Masayasu Hashimoto

From another company〇

Yoshio Hayakawa

Certified public accountant〇

Kazumi Yoshikawa

Certified public accountant〇* Categories for “Relationship with the Company”
a. Executive of the Company or its subsidiaryb. Non-executive director or accounting advisor of the Company or its subsidiaries
c. Non-executive director or executive of a parent company of the Company
d. Corporate auditor of the parent company of the listed company
e. Executive of a fellow subsidiary of the listed a company
f. A party whose major client or supplier is the Company or an executive thereof11

g. Major client or supplier of the Company or an executive thereofh. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property from the Company inaddition to compensation as an auditor
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)
j. Executive of a client or supplier company of the Company (which does not correspond to f, g, or h) (the auditor himself/herself only)
k. Executive of a company, between which and the Company external directors/auditors are mutually appointed (the auditor himself/herself only)
l. Executive of a company or organization that receives a donation from the Company (the auditor himself/herself only)
m. Others

Relationship with the Company (2)Name
Masayasu
Hashimoto

Independent
officer

Supplementary explanation on
applicable items

Yes

Masayasu Hashimoto is a former
employee of Resona Bank, Ltd. whichis the Company’s bank of transaction.
However, he has been retired for the
past 12 years. After retiring from thebank, he worked at Resona Card Co.,
Ltd. The amount of transactions
between Resona Card Co., Ltd. and theCompany is extremely small.

Reason for appointment
In addition to his many years of experience in afinancial institution and specialized knowledge,
Masayasu Hashimoto has experience as aManaging Executive Officer in a credit cardcompany. He has been judged as a person
who can oversee Company directors from an
objective, impartial and neutral standpoint andprovide advice and recommendations toensure valid and appropriate decision making
from the Board of Directors.
He is a former employee of Resona Bank, Ltd.
and Resona Card Co., Ltd. However, theCompany’s share of transactions at Resona
Bank, Ltd. is not remarkable, and the amountof transactions with Resona Card Co., Ltd. isalso minimal, and would not affect his
independence. Furthermore, he wasdesignated as an independent officer because
there are no special interests between him andthe Company, and there is no reason forconcern regarding conflicts of interest withgeneral shareholders.

Yoshio Hayakawa

Yes

Kazumi Yoshikawa

Yes

Yoshio Hayakawa is a former employeeof Ernst & Young ShinNihon LLC, theCompany’s accounting auditor.
However, he has been retired for the
past 11 years. After retiring from theauditing firm, he opened his own private
accounting firm and served as adirector of a school corporation and abusiness corporation which do not havebusiness transactions with theCompany.

Using his expertise and experience as acertified public accountant, Yoshio Hayakawa
is judged as a person who can supervise
Company directors from an impartial andneutral standpoint and provide advice andrecommendations to ensure valid andappropriate decision making from the Board of
Directors. Furthermore, he was designated as
an independent officer because there are no
special interests between him and theCompany, and there is no reason for concern
regarding conflicts of interest with generalshareholders.
Kazumi Yoshikawa is experienced as a director
and auditor at other companies in addition toher expertise and experience as a certified
public accountant. The Company has judgedthat she is a person who can supervise
Company directors from an impartial andneutral standpoint and provide advice andrecommendations to ensure valid andappropriate decision making from the Board of
Directors. Furthermore, she was designated as
an independent officer because there are no
special interests between her and theCompany, and there is no reason for concern

12regarding conflicts of interest with generalshareholders.

[Independent officers]
Number of independent officers

7 persons

Other matters concerning independent officers–[Incentives]
Implementation status of policies regarding the granting
incentives to directors

Performance-linked compensation system introduced

Supplementary explanation on corresponding matters■Basic policy Encourage directors to perform their duties to the fullest in line with the management strategies and management goals.
 Provide advise on compensation to officers of the Company based on job position and contribution to performance.
 Compensation shall be designed to share profits and risks with shareholders, and provide incentives to manage the Company
from the perspective of shareholders.
 Transparency and objectivity are ensured by having compensation to officers considered by the Nomination andCompensation Committee, in which outside directors make up a majority of members.

Persons to whom stock options are granted-

Supplementary explanation on corresponding matters–[Compensation for directors]
Status of disclosure(of individual director compensation)

Individual compensation is not disclosed

Supplementary explanation on corresponding matters[Details of compensation to directors]
1. Amount of compensation for directors and auditors
Directors: 10 persons, 152 million yen
Auditors: 4 persons, 51 million yen
Note: Of this amount, 51 million yen was paid to outside directors (7 persons) as remuneration, etc. The total amount of
remuneration, etc. for directors includes a provision of 21 million yen for stock compensation recorded in thecurrent fiscal year.
2. Bonus allowance for the directors

13

No payment was made for the interim fiscal year.
Existence of policy to determine the amount ofcompensation and method of calculation

Yes

Disclosed content on the policy to determine the amount of compensation and its method of calculation■ Composition of compensation
Compensation of directors consists of fixed monetary compensation (50%), monetary compensation linked to individual
performance (10%), monetary compensation linked to financial indicator (10%), stock compensation linked to financial indicator(10%), and, as stock compensation linked to sustainability, compensation linked to environmental management indicator (10%)
and compensation linked to the employee engagement index (10%). Individual allocations are based on compensation
multipliers set according to position and role.
The composition of officer compensation is summarized below.
Composition of compensation

Composition
ratio

Fixed monetary compensation

50%

Individual performancelinked monetarycompensation

Linked to monitoring
evaluation

10%

Financial indicator-linked
monetary compensation

Linked to operating profit

10%

Financial indicator-linked
stock compensation

Linked to ROE

10%

Sustainability indicatorlinked stockcompensation

Linked to environmental
indicators

10%Linked to employee
engagement index

10%

Monetary compensation70%

Stock compensation30%

Director compensation by position
The reference value of compensation for directors is defined as “Director and Executive Officer,” for which the standard monthly
compensation is set at no more than 300% of the maximum monthly salary as set forth in the employee salary system.
Compensation for each director is determined by the compensation multiplier based on the director’s position, and theCompany’s business performance. The compensation multipliers according to position are as follows.

Compensation
multiplierCompensation
multiplier for
representative
director

Compensation
multiplier forCEO

Compensation
multiplier(total)Director andChairperson

1.7

–

–

1.7

Director and President

2.0

0.2

0.3

2.5

Director and Executive
Vice President

1.7

0.2

–

1.9

Director and Senior
Managing Executive
Officer

1.4

–

–

1.4

Director and Managing
Executive Officer

1.2

–

–

1.2

Director and Executive
Officer

1.0

–

–

1.0

Position

Summary of director compensation components

14[Monetary compensation (70%)]・Fixed monetary compensation (50%)
The amount is determined according to the director’s position, and paid as fixed monthly compensation.
(Monetary compensation as short-term incentives)
・Individual performance-linked monetary compensation (10%)
Each fiscal year, the Nomination and Compensation Committee evaluates the results of the business execution of each director,
and the amount paid varies between 50% and 150%, with 100% indicating achievement of the targets. This amount is added to
the fixed monetary compensation and paid monthly as monetary compensation.
・Financial indicator-linked monetary compensation (10%)
To encourage both management and labor to work toward improvement of business performance, this compensation isdetermined according to achievement of the operating profit target, in the same way as year-end bonuses of employees. The
amount paid varies between 0% and 150%, with 100% indicating achievement of the target.
[Stock compensation (30%)](Stock compensation as long-term incentives)
・Financial indicator-linked stock compensation (10%)
To reflect improvement of the profitability of capital in compensation, we grant shares of stock as compensation based on thelevel of achievement of the ROE target in the medium-term management plan.
・Stock compensation based on environmental management indicator (10%)
To embed environmental issues related to climate change into management strategy from the perspective of risks andopportunities, and connect our positive impacts on society to the sustainable growth of the Company, we have introduced thiscompensation as an incentive to encourage the active involvement of directors, and grant shares of stock as compensation
based on an environmental management indicator (the CDP Climate Change score).
・Stock compensation based on employee engagement index (10%)
In order to link the improvement of CS (creation of social value) through the advancement of employee engagement to theCompany’s sustainable growth by actively investing in the creation of an internal environment in which diverse human resources
can thrive and in the development of human resources, based on the four themes of “securing human resources in response toenvironmental changes,” “diversity & inclusion,” “work-life balance,” and “respect for human rights,” we continuously measure theprogress of these activities as an “engagement score,” and grant shares of stock as compensation based on the engagementscore.
Stock compensation is provided for the purpose of encouraging the sharing of value between the Company’s directors andshareholders, and to raise directors’ awareness of contributing to improvement of medium- to long-term business performanceand increasing corporate value. Once each year, directors are awarded points calculated by multiplying the number of basic
points by position, which is the total of the number of position points set for each position plus the number of additional points set
for each role, by a payment coefficient according to the level of achievement of the financial indicator and sustainability indicatortargets. One point is equivalent to one share of the Company’s common stock, and directors receive shares of the Company’scommon stock (a portion of which is sold and converted into cash) upon their retirement.
Position points are set as follows according to position.
Position

Position points

Director and Chairperson

2,040 pts.

Director and President

2,400 pts.

Director and Executive Vice President

2,040 pts.

Director and Senior Managing Executive Officer

1,680 pts.

Director and Managing Executive Officer

1,440 pts.

Director and Executive Officer

1,200 pts.

Additional points are set as follows according to role.
Position

Additional points

CEO

360 pts.

Representative Director

240 pts.

The payment coefficient is set according to the level of achievement of the financial indicator and sustainability indicator targets,and varies between 0.00 and 1.50, with 1.00 as the coefficient when the target is reached.

15

Variable compensation such as performance-linked compensation is not necessarily appropriate for outside directors, whose roleis independent from that of business execution. Therefore, outside directors are paid fixed compensation only, which isdetermined on an individual basis, taking into consideration factors such as societal standards and the outside director’s careerbackground, and knowledge and experience in his/her field of expertise.
Auditors are paid fixed compensation only.
■Decision-making procedure
The decision-making policy for compensation of directors is to determine compensation by resolution of the Board of Directors
within the total amount approved in advance by the General Meeting of Shareholders. When resolutions on Board of Directors
Compensation Rules, including the Basic Policy for Decisions on Executive Compensation of Directors, are adopted by the
Board of Directors, the results of deliberations by the Nomination and Compensation Committee, an advisory body to the Boardof Directors that has outside directors as a majority of its members and is chaired by an outside director, are submitted to theBoard of Directors to increase transparency and make decisions through a fair process. In determining the specific details ofcompensation of individual directors, the Nomination and Compensation Committee conducts a multifaceted review of the draft
proposal that includes consistency with the decision-making policy, and the Board of Directors basically respects the committee’sreport in the belief that it is in line with the decision-making policy.
Decisions on the amount of compensation to auditors are made by consultation among the auditors within the total amount ofcompensation approved in advance by the General Meeting of Shareholders.
Note: Information on compensation of directors is disclosed in the following documents posted on our website.
1. “Securities Report” (in Japanese only)
2. “Notice of the Annual General Meeting of Shareholders” (attached “Business Report” in Japanese only)
3. “Integrated Report”[Support system for outside directors (outside auditors)]
A system has been established to notify the date of the Board of Directors’ meeting and its agenda in advance. The
director in charge shall explain the purpose of the meeting as needed. Also, outside auditors shall provide a report on thetrends in the Company during the auditors’ meeting held once a month, and provide support and advice so the appropriate
proposals can be made during the Board of Directors’ meeting.
[Status of retired representative directors and chief executive officers]
Names of advisors and consultants who are former representative directors and/or chief executive officers
Work form/condition

President, etc.

Name

Post/
Position

Business description(Full-time, part-time,
remuneration, etc.)

Date of retirement

NA

—

—

—

—

Total number of advisors and consultants who are former
representative directors and chief executive officers

Term

—

0 persons

Other items

2. Matters related to functions such as business execution, auditing and supervision, nomination, and determination of
remuneration (overview of current corporate governance system)
Since nearly half of the Company’s directors are in charge of business execution, such directors have a thoroughunderstanding of actual conditions in the sales field and make effective and efficient decisions. In addition, independent
outside directors have been regularly appointed each year at the General Meeting of Shareholders since June 2014, with theaim of utilizing their objective perspectives which differ from those within the Company to strengthen the management systemand further improve transparency. Four outside directors have been appointed at the shareholders’ meetings held since June
2021. Moreover, the Company is working to enhance and strengthen the auditor system. Three of the four auditors areoutside auditors, and two are full-time auditors. There are no personal, monetary or business relations, or other special
interests between the Company and the outside auditors.

16

In addition to the regular meetings held at least once a month, the Board of Directors holds special meetings to makedecisions on medium- to long-term management policies and business strategies for the creation of social and corporate
value, matters stipulated by the law and other important management matters, and for the supervision of the status ofbusiness operations by each director, as needed. In June 2016, the Company introduced an executive officer system toimprove the effectiveness of management and accelerate business execution by strengthening the functions of the Board of
Directors and speed up decision-making. In April 2022, this was amended from a permanent position-based system to adelegation-based executive officer structure.
Based on the regulations of the Board of Auditors, the Board of Auditors establishes audit policies in accordance with laws
and the Articles of Incorporation, and prepares the audit report based on the individual reports from each auditor. Auditors
supervise and audit the decision-making process of the Board of Directors and the execution of duties by the directors byattending important meetings, including those of the Board of Directors, and by reviewing important documents.
In addition, the Company has established the Nomination and Compensation Committee as an advisory body to the Boardof Directors in order to strengthen corporate governance by ensuring the independence, objectivity, and transparency of thefunctions of the Board of Directors concerning decisions on the nomination and compensation of representative directors anddirectors, etc., as well as personnel matters such as plans of succession for the CEO. The Nomination and Compensation
Committee consists of independent outside directors, representative directors, and directors appointed by resolution of theBoard of Directors, with the majority of members independent outside directors. The chairman of the committee is electedfrom among the independent outside directors.
As an internal audit function, the Audit Department, which reports directly to the President, conducts regular internal auditsof each department to check the status of business execution, prevent fraud and errors, and provide advice on business
improvement. The results of internal audits are reported to the President and auditors on a regular basis and whenever audits
are carried out. In addition, the Audit Department, in coordination with the accounting auditor, has established a system tocheck for any deficiencies in the maintenance and operation of internal control of financial reporting for all processes within
the scope of evaluation.
The Sustainability Committee (unification of “Corporate Management Committee” and “CSR Committee” that manage theprogress of business strategies), which consists of executive directors, executive officers, full-time auditors, and department
heads (including directors of subsidiaries), manages the progress of issues set by backcasting from long-term goals toward
the realization of value creation for the Joshin Group, carries out activities of business divisions, and promotion,
development, management, guidance, etc. in cross-departmental projects.
In order to establish a flexible management system that can respond quickly to changes in the business environment andto clarify management responsibility for each fiscal year, the Company shortened the term of office of directors from two
years to one year at the General Meeting of Shareholders held in June 2003. The retirement benefit system for directors andauditors was also abolished at the General Meeting of Shareholders held on June 24, 2005.
As stipulated in Companies Act, Article 427, Paragraph 1, the Company has concluded a contract with all outside directors
and outside auditors in order to limit compensation liability as stipulated in Article 423, Paragraph 1 of the same act. The limit
on compensation liability under the said contract is set to the minimum liability amount stipulated by the law.
The Company has concluded a liability insurance contract for officers, etc. with an insurance company as stipulated in the
Companies Act, Article 430-3, Paragraph 1 and has renewed the contract on July 1, 2022 with the same terms andconditions. Under the insurance contract, the Company will cover any damage that may occur for which an insured officer isheld liable, which has occurred in the performance of his/her duties, or is subject to a claim pertaining to the pursuit of such
responsibility. The insurance premiums are fully borne by the Company, including the special contract, so there is no
substantial burden on the insured. The insurance policy is subject to certain exemptions, such as if the act was performed
with due knowledge that such is in violation of laws and regulations.
The Company also has an advisory contract with a law firm and can receive advice as needed. In addition, the accounting
auditor, Ernst & Young ShinNihon LLC, conducts accounting audits and internal control audits from a fair and unbiased
standpoint, and reports the details and results of audits to the Board of Auditors regarding settlement of accounts andquarterly financial results.
[Accounting auditor] (Fiscal year ended March 2023)
1.

Name of accounting auditor
Ernst & Young ShinNihon LLC

2.

Amount of remuneration payable to the accounting auditor
Total remuneration and other amounts payable by the Company for services under Article 2, Paragraph 1 of the Certified
Public Accountants Act of Japan: 45 million yen
Total amount of cash and other financial benefits payable by the Company and its subsidiaries: 59 million yen
Notes:
1.

In the audit contract between the Company and the accounting auditor, remuneration paid for audits under theCompanies Act of Japan and remuneration paid for audits under the Financial Instruments and Exchange Act of17

Japan are not clearly distinguished. Therefore, the amount in item 1. above includes the amount of remuneration paid
for audits under the Financial Instruments and Exchange Act.
2.

3.

The Company’s Board of Auditors has reviewed the contents of the audit plan prepared by the accounting auditor,
and the performance of duties and the basis for calculation of the estimated amount of remuneration in the previous
fiscal year by way of obtaining the necessary documents from the Board of Directors, relevant internal departments
and the accounting auditor, and by listening to reports. As a result, it has determined that the fees paid to theaccounting auditor are in accordance with Article 399, Paragraph 1 of the Companies Act.

Description of non-auditing services
The Company pays compensation to the accounting auditor for “climate change response support services,” etc. asservices other than the auditing services stipulated in Article 2, Paragraph 1 of the Certified Public Accountants Act (nonauditing services).

3. Reasons for selecting the current corporate governance system
The Company introduced the executive officer system in June 2016. In addition to regular meetings of the Board of
Directors held at least once a month and extraordinary meetings of the Board of Directors held as needed, meetings of theBoard of Executive Officers are held weekly, in principle, and prior to the submission of proposals to the Board of Directors, asystem to provide detailed information prior to such meetings is in place. As a result, more active discussions within the
Board of Directors have been encouraged, leading to faster management decision making and stronger governance.
Moreover, women have also been appointed as executive officers. In order to utilize objective viewpoints that differ fromthose within the Company, strengthen the management system, and further improve transparency, one independent outside
director was appointed since 2014, two since 2017, three since 2019, and four since 2021, while the number of outside
auditors was increased from two to three with the election of one person by resolution of the 75th Annual General Meeting of
Shareholders in June 2023, bringing the total number of independent outside directors and auditors to seven. By this system,
valuable opinions and suggestions from a management perspective can be obtained and this information can be used torevitalize management. Furthermore, two women have been appointed as independent outside directors. Two of the four
auditors, including inside and outside auditors, are full-time auditors, and efforts are being made to enhance and strengthen
the auditor system. The Evaluation Committee for the Board of Directors, consisting of outside directors and auditors wasestablished in fiscal 2016 as an advisory body to the Board of Directors, and works to strengthen corporate governance. The
Company believes that the current management monitoring system that includes independent outside directors is functioning
appropriately to improve corporate value.
III. Status of implementation of measures concerning shareholders and other concerned parties
1. Efforts to vitalize the General Meeting of Shareholders and to facilitate the exercise of voting rights
Supplementary explanation
Early notification of
convocation of General
Meeting of Shareholders

The Company shall send these convocations approximately three weeks before the date of theGeneral Meeting of Shareholders. The notice to convene the General Meeting of Shareholders
shall be posted on TDnet and the Company’s website(https://www.joshin.co.jp/en/ir/meeting.html) prior to the sending date.

Scheduling the General
Meeting of Shareholders
to avoid dates on which
there are many othershareholders’ meetings

The Company shall strive to avoid scheduling the General Meeting of Shareholders on dates
corresponding to other shareholders’ meetings whenever possible so that as many shareholders
as possible can attend.

Exercising voting rights
by electromagnetic
methods

The exercise of voting rights using electronic platforms for exercising voting rights began from the73rd Annual General Meeting of Shareholders held in June 2021.

Participation in electronic
platforms for exercising
voting rights and otherefforts to improve thevoting rights exercising
environment for
institutional investors

It is possible to participate in and use the electronic platform managed by the joint venture ICJ,
Inc. established by the Tokyo Stock Exchange and other companies for exercising voting rights.

Providing notices(summaries) in English

The Company has been posting the English translations of the notices on the website since the73rd Annual General Meeting of Shareholders held in June 2021.

18

Others

The Company posts a notice to convene the General Meeting of Shareholders on its website,
and after the meeting, various corporate information along with the notice of any resolutions, issent to the shareholders in writing.

2. Status of activities related to investor relations (IR)Supplementary explanation

Explanation by the
representative
directly

Creation andannouncement of
disclosure policy

he Joshin Group Disclosure Policy was made publicly available in
December 2022.
As a basic policy, with the aim of becoming a company that is trusted andsupported by society, the Company thoroughly discloses information in atimely, accurate and fair manner from the perspective of all stakeholders,
including shareholders and investors, and works on proactive andstraightforward disclosure of information.

Holding regular briefings
for individual investors

The Company regularly holds IR seminars for individual investors in atimely manner, but the current participation is online.

No

Conducting regularbriefings for analysts andinstitutional investors

In response to requests from institutional investors, analysts, etc. theCompany shall hold individual briefings in the form of meetings in a timely
manner.

Yes

Holding regular briefings
for overseas investors

No.

No

Posting IR materials on
the website

The Company posts brief notes on financial results (quarterly), briefing data
for financial results, notices to convene the General Meeting of
Shareholders, information about the Company, and other data to be timely
disclosed on https://www.joshin.co.jp/en/ir.html

Establishing an IR
department (department
in charge)

The Company has established the Management Planning Department as
the department in charge of IR.

OthersThe Company carries out IR activities mainly targeting individual investors
by publishing information regarding the Company and shareholder benefit
programs in IR-related magazines. The Company also holds briefing
sessions via video streaming and teleconferencing on the financial results ofthe first six months and the full year, in order to explain the financial results,business conditions, and future business development in detail.

We hold IR meetings individually if requested.

3. Status of efforts to respect the position of stakeholders
Supplementary explanation

Regulations that respect
the position of
stakeholders throughinternal regulations, etc.

The Company made a commitment to and signed the U.N. Global Compact in July 2022. As partof this initiative, we established and announced the Joshin Group Human Rights Policy inDecember 2022, the Joshin Group Procurement Policy and Procurement Guidelines in February
2023, and the Joshin Group D&I Policy and Joshin Group Anti-Corruption Policy in March 2023.
The Joshin Group Declaration on Actions stipulates respect for the position of our stakeholders,
including customers, business partners, shareholders, and employees.
In addition, to ensure all Group employees comply with the Joshin Group Declaration on Actions,
we have codified our action guidelines in the Joshin Group Code of Conduct.

Implementation ofenvironmental

We have set “contributing to the creation of an enriching society that is in harmony with theglobal environment” as one of our material issues (major challenges) and are promoting theestablishment of a resource-recycling society and addressing climate change issues. Through19conservation activities,
CSR activities, etc.

these and other efforts to achieve a society with net-zero carbon emissions, we are working tocreate social value by achieving carbon neutrality in the home and improve our corporate
value. The Company’s efforts to address environmental issues have been organized andannounced as the Joshin Group Environmental Principles, the Joshin Group Basic
Environmental Policy, the Joshin Group Environmental Action Guidelines, and the Joshin
Green Smile Challenge 2050.
In practicing sustainability management, we have endorsed the TCFD recommendations, andactively disclose information on all four areas of “governance,” “strategy,” “risk management”
and “metrics and targets” based on the recommendations. We obtained third-party assurance
for our Scope 1 and 2 greenhouse gas emissions in fiscal 2022 to ensure the reliability of our
figures. In fiscal 2023, we will also seek third-party assurance for Scope 3 emissions in addition
to Scope 1 and 2. Furthermore, we responded to the CDP Climate Change Program 2022
questionnaire conducted by the CDP (an international NPO). Based on the evaluation of our
response, we received a rating of “B,” an improvement of two ranks from “C” last year.
We have begun efforts toward early realization of carbon neutrality at each business site. The
annualized amount of CO2 reduction (indirect emissions mainly at business sites) at businesssites that have signed contracts directly with power suppliers as of March 31, 2023, was 64.6%
of total emissions in fiscal 2013, and 97.4% of business sites that have completed conversion
to renewable energy. Our goal is to achieve a 100% conversion rate in 2023. The rate ofrenewable energy conversion at all business sites, including tenants, is 59.4%, and we plan torealize 100% conversion to renewable energy by around 2040.
The Company’s head office building has acquired ISO 14001 certification, an international
standard for environmental management systems. Furthermore, as part of our effort to engage in
responsible corporate activities, a rooftop garden (J-Garden) has been installed at theCompany’s head office building and green parking lots (J-eco Parking) have been installed at our
Kishiwada store and 51 other stores (as of end of March 2023) in order to mitigate the urban
heat island effect. Our social mission is to maintain and create an environment where people in
the local community can live in safety, comfort, and good health. We carry out sales promotion
activities for energy-saving home appliances, actively promote energy saving, energy generation,and energy storage, and conduct activities such as estimating the installation cost of householdcharging outlets for electric vehicles.
In order to promote compliance and make policies regarding the social responsibilities whichshould be fulfilled by the Group, the Company has established a standard Code of Conduct for
the Group through the operation of the Sustainability Committee. The Company has alreadyenacted the Basic Policy on Information Security and the Personal Information Protection Policy,
and has established an information security management system and a personal information
protection management system. It is also expanding promotional activities for these across theentire Group in order to protect information assets, including the personal information ofcustomers. As a result, Joshin was certified by the Japan Information Processing Development
Center (currently the Japan Institute for Promotion of Digital Economy and Community) with the“Privacy Mark” on April 25, 2005, the first for a large corporate retailer, and the mark has beenused since May 13, 2005.
Furthermore, we have established systems and promote activities to fulfill our social
responsibilities toward the stakeholders of the Group, including enactment of the Basic Policyon the Construction of the Internal Control System in May 2006 (last revised on June 20, 2023)
and the Product Safety Voluntary Action Guidelines in December 2007. As a result, we were
the first to receive the METI Minister’s Award at the Best Contributors to Product Safety Awards
in the large retailer category three consecutive times, in November 2008, November 2010, andNovember 2012. We were also first awarded METI’s newly established Gold Product Safety
Company mark in June 2014, and first received an additional “★” certification mark indicating ahigher level of achievement under the program’s follow-up assessment in 2019. In January
2017, we became the first major retailer in Japan to acquire ISO 22301:2012 certification forour business continuity management system to prepare for significant risks and respond tonegative impacts efficiently and effectively. In 2021, we were also certified in the transition to
the new standard, ISO 22301:2019.
These initiatives are disclosed in our integrated report.
(https://www.joshin.co.jp/en/ir/library/report.html)

20

Formulating policies forprovision of information
to stakeholders

The Joshin Group Disclosure Policy was made publicly available in December 2022. The
Company stipulates the policy for disclosure of corporate information to stakeholders in the
Joshin Group Code of Conduct and informs all employees of the Group. Based on theseprovisions, the Company has established an internal system to enable prompt, accurate, fair andtimely disclosure to all stakeholders, including shareholders and investors, and provides
information in a timely and appropriate manner through its website, briefings on six-month andfull-year financial results, and IR seminars for individual investors.

IV. Matters related to internal control systems, etc.
1. Basic concept on internal control system and the status of its maintenance
The Company has established the following basic policy regarding the creation of an internal control system. Based on thisbasic policy, the Company has created and operates a system to ensure the appropriateness of the Group’s operations as
stipulated in the Companies Act and the Regulations for Enforcement of the Companies Act, as well as internal control overfinancial reporting as stipulated in the Financial Instruments and Exchange Act.
(1) System to ensure that the execution of duties by directors and employees are in compliance with laws and regulations andthe Articles of Incorporation
1) The Sustainability Committee, chaired by the Representative Director, President and Executive Officer, shall oversee
compliance in general.
2) To promote compliance, we shall enact the Human Rights Policy, D&I Policy, Procurement Policy and Procurement
Guidelines, Anti-Corruption Policy, Basic Environmental Policy, Disclosure Policy, Basic Policy on Information Security,
Personal Information Protection Policy, Product Safety Voluntary Action Guidelines, Code of Conduct, and other Groupwide policies. We shall provide guidance through training and other means to ensure that all officers and employees of
the Company and its subsidiaries view compliance as an issue that concerns them, and conduct their business
operations accordingly.
3) In the event that a compliance-related incident should occur, a system shall be established whereby the details of theincident and measures to handle it shall be reported to top management, the Board of Directors, the Board of Executive
Officers, and the auditors through the Chief Compliance Officer (the director appointed under the sustainability promotion
framework).
4) The Company shall establish the Whistleblower System Operating Standards and establish a contact point for
consultation and reporting on organizational and individual violations of laws and regulations, and introduce awhistleblower system that specifically stipulates that whistleblowers will not be treated unfavorably on the grounds thatthey have made a consultation or report.
5) The Company shall not have any connections with antisocial forces and groups which threaten the order and safety ofcivil society, and shall thoroughly educate all employees in accordance with the Basic Policy on Exclusion of Antisocial
Forces and the Joshin Group Code of Conduct to resolutely respond to such forces and groups, and shall establish asystem to deal with such forces and groups.
(2) System for the storage and management of information related to the execution of duties by directors
1) Information and documents related to the execution of duties by directors shall be stored and managed in accordancewith the Company’s internal regulations and related manuals, etc., and the status of operation shall be verified and theregulations, etc. shall be reviewed as needed.
2) For information management, information security management standards and personal information management
standards shall be established.
(3) Regulations for managing the risk of loss and other systems
1) As an organization for managing the risk of loss, the Risk Management Committee chaired by the Chief Risk
Management Officer (the director appointed under the sustainability promotion framework) shall be established and thedevelopment of a risk management system shall be promoted by identifying, analyzing and evaluating various risks
around the corporate group consisting of the Company and its subsidiaries, and implementing appropriate measures.
2) The Risk Management Committee shall closely cooperate with the Compliance Subcommittee established under the
Sustainability Committee, the Internal Control Subcommittee which handles the internal control system, and othercommittees established for each individual business for risk management.
3) The Risk Management Committee shall establish the BCMS Implementation Working Meeting under the Risk
Management Committee in order to develop and promote the Business Continuity Management System (BCMS) as asystem for effective and functional business continuity even in the event of an emergency.
4) In the event of an unforeseen event, the Disaster (Accident) Countermeasures Committee shall be convened inaccordance with the Risk Management Rules to prevent the spread of damage.
5) The Company shall establish the Audit Department, which reports directly to the President and shall be in charge ofinternal auditing of the Company and its subsidiaries. The Audit Department shall conduct internal audits on a regular21

basis in accordance with the Internal Audit Regulations. The Audit Department shall periodically review the items andmethods of audit implementation.
6) The executive officer in charge of internal control shall report to the Board of Directors on the status of internal control
operations in the Company and its subsidiaries on a quarterly basis.
(4) System to ensure that the execution of duties by directors is carried out efficiently
1) Management of the operation plan shall be based on the annual and medium-term management plans formulated eachyear according to the management philosophy, and each business line shall work to achieve its goals.
2) The Board of Directors shall hold regular meetings at least once a month to make decisions on important matters and tosupervise the execution of duties by the directors.
3) Based on the Board of Directors regulations, executive officer regulations, regulations for division of duties, and rules for
decision-making, the authority to make decisions on business execution shall be transferred to executive officers, and themonitoring functions of the Board of Directors shall be strengthened.
4) Directors and executive officers shall report the status of their own duties that they execute to the Board of Directors on aquarterly basis.
5) Independent outside directors shall be appointed to further vitalize deliberations by the Board of Directors and strengthen
the management supervision function.
6) The term of office of the directors shall be one year in order to promptly respond to a rapidly changing businessenvironment.
7) Digitalization shall be promoted in order to improve operational efficiency.
(5) System to ensure the appropriateness of business operations of the corporate group1) Directors of subsidiaries shall be appointed from the directors, executive officers, and executives of the Company.
2) Auditors of subsidiaries shall be appointed from the auditors of the Company.
3) The Company and each of its subsidiaries shall appoint a person in charge of compliance promotion, and the Chief
Compliance Officer shall oversee and promote compliance.
4) Regarding management of subsidiaries, the Company shall periodically request a report on their business activities anddiscuss important matters with them in advance, while respecting their autonomy.
5) As a system to ensure efficient execution of duties by the directors, etc. of the subsidiaries, (4) 1) 6) ) shall apply mutatis
mutandis to the subsidiaries.
(6) In cases where an auditor requests employees to assist in duties, matters related to the independence of such employees
from the directors
1) In the event an auditor requests that an employee be appointed to assist him/her in his/her duties, such employee shallbe appointed by resolution of the Board of Directors.
2) Specific personnel matters of such employees shall be determined by the Board of Directors with the consent of theauditors.
(7) System for directors, executive officers and other employees to report to auditors
1) If any director, executive officer or other employee discovers a fact which may cause significant damage to the Company,
he or she shall immediately report it to the auditors in accordance with laws and regulations.
2) Directors, executive officers and other employees shall prepare the necessary reports and provide information in
response to requests from each auditor in accordance with the provisions of the Board of Auditors.
3) Directors, auditors and employees of the Company’s subsidiaries shall promptly prepare the appropriate reports whenrequested by the auditors of the Company to report on matters related to the execution of business.
4) The Company shall prohibit any disadvantageous treatment of its directors, auditors and employees and those of its
subsidiaries who have reported to the auditors for the reason that they have made such reports, and shall inform all
directors, auditors and employees of the Company and its subsidiaries to that effect.
5) The aforementioned 1) to 4) shall apply mutatis mutandis to outside directors in order for them to effectively perform theirduties.
(8) System to ensure that audits by an auditor are carried out effectively
1) Auditors shall attend meetings of the Board of Directors and other important meetings, inspect major documents requiring
managerial approval and other important documents related to the execution of business, and request explanations fromdirectors, executive officers and other employees as needed.
2) Auditors shall receive reports from the accounting auditor regarding details of the accounting audit, exchange information,
and actively collaborate with the accounting auditor to raise the effectiveness of the audit as needed.
3) Auditors shall receive reports from the Audit Department on the details of internal audits of the Company and eachsubsidiary company, exchange information, and actively collaborate to raise the effectiveness of the audit as needed.

224) In the event that an auditor requests prepayment or reimbursement of expenses to the Company in connection with theexecution of his or her duties, the Company shall promptly process such expenses or debts after deliberation by thedepartment in charge, unless such expenses or debts related to such request are proven not to be necessary for the
performance of the auditor’s duties.
5) The aforementioned 1) to 4) shall apply mutatis mutandis to outside directors in order for them to effectively perform theirduties.
2. Basic concept on the elimination of antisocial forces and the status of its maintenance
The Company has established the following basic policy regarding elimination of antisocial forces.
In accordance with the “Guidelines for Enterprises to Prevent Damage Caused by Antisocial Forces” (published by the
Meeting of Cabinet Ministers for Anti-Crime Measures), the Company and its Group Companies will resolutely oppose andreject any intervention by antisocial forces that threaten social order and safety.
In addition, the Company shall adhere to the following basic principles to fulfill its social responsibility as a businessenterprise and to be a company that is trusted by society.
(1) Basic Principles to Prevent Damage Caused by Antisocial Forces
1) Organizational measures2) Cooperation with external specialized agencies
3) Severing relations, including business transactions4) Civil and criminal legal response in cases of emergency
5) Prohibition of backdoor transactions and funding(2) Response based on basic principles
1) Unreasonable demands by antisocial forces can cause anxiety and fear in a person’s mind, and if the manager or
department in charge takes measures alone, he may be forced to comply with the demands. Therefore, the entire
organization shall respond to the matter.
2) The Company shall ensure the safety of employees who respond to unreasonable demands from antisocial forces.
3) In preparation against unreasonable demands from antisocial forces, the Company shall establish close solidarity withexternal specialized agencies such as the police, the Center for Elimination of Boryokudan, lawyers, etc.
4) The Company shall not have any connection, including business relationships, with antisocial forces. The Company shallalso reject unreasonable demands from antisocial forces.
5) The Company will take legal action, both civil and criminal, against unreasonable demands from antisocial forces.
6) The Company shall not engage in backdoor transactions to conceal the facts, even if unreasonable demands byantisocial forces are based on scandals in the business activities or misconduct of employees in the Company.
7) The Company shall not provide funds to antisocial forces.
V. Others
1. Introduction of takeover countermeasures
Introduction of takeover countermeasures

Yes

Supplementary explanation on corresponding matters
Basic policy regarding control of the Company(1) Outline of the contents of the basic policy
The Company holds that persons who control decisions on the Company’s financial and business policies (hereinafterreferred to as “policy decisions”) shall be persons who can ensure and enhance the corporate value of the Company and thecommon interests of its shareholders over the medium and long term, by taking full advantage of the trusted relationships
built by the Company over many years with customers, business partners, employees, etc.
The Company does not unilaterally reject the large-scale purchase of Company shares, as long as such purchase
contributes to the corporate value of the Company and the common interests of its shareholders. In addition, whether a
proposal for a large-scale purchase that would involve the transfer of control of the Company should be accepted or notshould ultimately be decided based on the consensus of the shareholders.
However, there is a possibility of cases of large-scale purchase of shares or purchase proposals in which sufficient time orinformation may not be available for the Company or its shareholders to consider the details of the purchase proposal or
alternative plans, cases where there is a mechanism to coerce shareholders into accepting the purchase, cases where theterms of the purchase are insufficient or inappropriate in light of the original corporate value of the Company, and cases
which may damage the corporate value of the Company and the common interests of its shareholders in view of the
purpose of the purchase or the management policy after the purchase.

23

The Company believes that a person who may damage the corporate value of the Company and the common interests ofshareholders by such large-scale purchases or purchase proposals is not appropriate as a person to control policy
decisions.
(2) Outline of specific measures to achieve the basic policy
1) Special initiatives which contribute to achieving the basic policy
Through various highly specialized stores and Internet shops, the Company offers home appliances, information andcommunication equipment, entertainment products, housing equipment-related products, renovation, etc. to support the
comfortable lifestyles of its customers.
Additionally, the Company seeks to build a relationship of trust with its customers in the original founding spirit of“Sincere Service,” including high expertise, lifestyle proposals, a wide product selection, reasonable prices, and reliable
after-service.
At present, the environment surrounding the Company is continuing to undergo great changes. The population and thenumber of households is decreasing due to low birthrates and the aging of society and there are other demographic
changes, such as the increase in the number of elderly living alone. ICT is becoming more advanced. The concept ofdiversity and inclusion—where we respect and accept individuality regardless of gender, age, nationality, or othercharacteristic—is taking root. Furthermore, there are major changes under way that affect the way the society we live infunctions and the environment—such as climate change—that are altering our values. Amidst this, we are trying to adapt
how we live our lives.
Considering the current state of societal transformations and social issues, and in accordance with the fundamental
spirit of our Corporate Credo of Thoughtfulness (meaning “to always think and act in consideration of the other’s
perspective”)—the basis for our philosophical system—in fiscal 2021, we updated our management philosophy for the
first time in 57 years.
Management Philosophy
Connecting people and society to the future with a smile
Our management philosophy encapsulates the view we take of the future from a long-term perspective, our future ideal
for what society should look like, and our desire to pass on to future generations a sustainable society in which no one isleft behind.
We have organized our efforts to create new social value into two areas: supporting and strengthening resilience in our
aging society and achieving carbon neutrality in the home. To do so, we formulated a management vision of “becoming a
hub for the infrastructure of life through the power of home appliances and ICT.”For our retail business, which mainly sells home appliances, we believe that there are two main factors that will have amajor impact on our future. The first factor is the declining birthrate and aging population. The decrease in population andthe number of households and the increase in the number elderly single-person households, due to the declining birthrate
and aging population, have implications on issues such as changes to consumer purchasing behavior, shrinking market
size, and a shrinking working population. While we are addressing this issue as a risk, we also regard it as a business
opportunity. For this reason, we have chosen to support and strengthen the resilience in our aging society as an initiative
for social value creation the Company should work on to support the sustainable development of society.
We consider “resilience” to mean not only “restoration to the original state” but also “adaptation to change.” In light ofthe ongoing transformation into a super-aged society, we aim to seek out opportunities in the changing environment while
utilizing finance and capital, fixed capital, human capital, intellectual capital, and social capital to create and continue tooffer new added value.
The second factor is climate change. In July 2021, we announced our support for the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD). Environmental problems such as climate change not only
threaten biodiversity but are also serious risks that adversely impact the world economy. As a countermeasure to thisissue, achieving a carbon-neutral society is a universal goal, and Japan has pledged before the world to aim for complete
carbon neutrality by 2050. With the frequent occurrence of large-scale natural disasters around the world, there is
growing recognition that tackling climate change is an urgent issue. Environmental issues pose a risk for companies, butthere are also ways to turn increased awareness of the environment into an opportunity. Through home appliance sales,
we will popularize home appliances with high performance in energy generation, storage, and saving (solar power
generation, storage batteries, energy-saving appliances, etc.), and actively work on building a recycling-based society
through the 3Rs (reduce, reuse, recycle) while contributing to the enhancement of social values.
We believe that the initiatives detailed above will raise the Joshin Group’s corporate value, thereby reducing the risk oflarge-scale purchases of Company shares, which would have a major negative impact on the interests of allshareholders.
2) Initiatives to prevent policy decisions from being controlled by inappropriate parties in light of the basic policy
The Company adopted a “Response Policy for Large Scale Purchases of the Company’s Shares (Anti-Takeover
Measures)” by resolution of the Annual General Meeting of Shareholders held on June 22, 2007. The Company has sincerevised this policy five times, and updated it with the approval of shareholders.
(3) Decisions by the Board of Directors regarding special initiatives and their reasons

241) Regarding special initiatives which contribute to achieving the basic policy
Regarding special initiatives which contribute to achieving the basic policy, securing and enhancing corporate value aresought by providing customers with a comfortable lifestyle, striving to build relationships of trust, and enhancing corporate
governance. This in turn leads to securing and improving the common interests of shareholders, without impairing thecommon interests of shareholders.
In addition, all of these initiatives are in line with the basic policy that persons who may damage corporate value andthe common interests of shareholders are not considered appropriate as officers who control policy decisions, and work
to maintain the status of the officers of the Company.
2) Regarding initiatives to prevent policy decisions from being controlled by inappropriate parties in light of the basic policy
The Board of Directors of the Company decided to renew the Response Policy in the event that a large-scale purchaser
appears, in order to enable shareholders to make decisions with sufficient time and information, etc., and to deter largescale purchases that violate the corporate value of the Company and the common interests of the shareholders. This
Response Policy is considered to be an initiative that is in line with the basic policy.
Regarding the contents of the Response Policy, specific rules to which large-scale purchasers must comply shall be set
in advance, and specific countermeasures shall be taken only in the event that a large-scale purchaser does not comply
with these rules or in cases where even though the rules are observed, the Board of Directors determines that thecorporate value of the Company and the common interests of its shareholders would be significantly impaired.
Consequently, this Response Policy is considered to be an initiative to secure the corporate value of the Company andthe common interests of the shareholders, and does not impair the common interests of its shareholders.
In addition, in order for the Board of Directors of the Company to properly carry out the Response Policy and prevent
arbitrary decisions by the Board of Directors, a committee independent of the Board of Directors has been established asa third-party organization. When taking a decision on whether or not to implement countermeasures against a large-scalepurchaser, the Board of Directors shall consult with the independent committee, and based on the consultation,
recommendations by the independent committee shall be respected to the maximum extent, thereby eliminating arbitrary
decisions by the Board of Directors. For this reason, the purpose of the Response Policy is not to maintain the status of
the directors of the Company.
Moreover, when the independent committee recommends that countermeasures be implemented, a requirement thatshareholders be sounded out in advance can be attached.
Furthermore, the Response Policy shall satisfy three principles (I: Ensuring and enhancing the corporate value andshareholders’ common interests, II: Prior disclosure and the will of the shareholders, and III: Ensuring necessity andreasonableness) as stipulated by “Guidelines Regarding Takeover Countermeasures for the Purposes of Protection andEnhancement of Corporate Value and Shareholders’ Common Interests” jointly released by Ministry of Economy, Tradeand Industry and the Ministry of Justice on May 27, 2005, and shall be a very rational measure.
Similar to the Pre-response Policy, shareholders are scheduled to vote on the continuation of the Response Policy
every three years. From this point as well, the Company believes that the Response Policy does not impair the common
interests of shareholders.
For details of the Response Policy, please see the “Notice of Renewal of the Response Policy for Large-Scale
Purchases of the Company’s Shares (Anti-Takeover Measures)” posted on May 6, 2022 on the Company’s website.
https://www.joshin.co.jp/ja/ir/news/news20220506102419/main/0/link/20220505162900.pdf (in Japanese only)
2. Other matters concerning corporate governance system, etc.
Overview of the timely disclosure system
1) Basic policy of the timely disclosure
As a listed Company that participates in the securities market, the Company recognizes that in order to build and maintaina relationship of trust with its shareholders and investors, the Company has the extremely important responsibility to provide
prompt, accurate, fair and timely disclosure of important facts and financial information that may affect investment decisions
and the Company and works to provide such.
2) In-house system for timely disclosure
The Company’s internal system for timely disclosure is shown in the attachment.
3) Method of timely disclosure
In principle, timely disclosure is made through the “Timely Disclosure Network (TDnet)” operated by the Japan ExchangeGroup. Resources are also posted to each press club. In addition, disclosure resources are promptly posted on the
Company’s website.
[Outline diagram (reference data)][Overview of the timely disclosure system (outline diagram)]
End

25

Corporate governance system
General Meeting of Shareholders
Appoint/dismiss

Appoint/dismiss

Appoint/dismiss

Directors

Auditors
Monitor

Coordinate
ReportBoard of Auditors

Board of Auditors

Report2 Representative
Directors

Audit

Chairperson

1 Internal
Auditor3 Independent
Outside Auditors(1 female auditor)(1 full time
corporate auditor)

4 Independent Outside
Directors( 2 female directors)

5 Internal
Directors

Appoint/dismiss,supervise

Board of Directors Evaluation Committee

Evaluate

4 independent outside directors + 4 auditors

Report, makerecommendations

Business Execution Framework

Coordinate

Board of Executive Officers
Independent outside directors also
attend as observers

Audit Department(Internal audit division )Instructinvestigations
ReportPresident andExecutive Officer

Company-Wide committees

・Sustainability Committee（newly established in fiscal 2021）
・Management Meetings
・CSR Committee（Above Meetings and Committee have been
integrated.）・Risk Management Committee
・Labor-Management Council

Audit

Promote, enlighten, control,and lead activities

Business divisions & management divisions

Audit

Instruct

4 Independent Outside
Directors

Chairman of the committee is elected fromamong the outside directors

Audit

Coordinate

Nomination and Compensation Committee

Consult

ReportFC Store

Subsidiary
Company

ReportSubsidiarycompany[Schematic diagram of timely disclosure system]

Information onorganizationand personnel

Information related to
management, sales,affiliated companies, public
relations and IR

Information on
accounting, financeand stock

Human Resources &General Affairs Department

Management Planning
Department

Accounting
Department

Board of Executive Officers
Board of Directors

Chief Compliance Officer
Chief Information Security Officer

TDnet data registration

Information disclosure(Japan Exchange Group)

Board of Auditors