Corporate Governance
Last updated: June 23, 2023

INNOTECH CORPORATION
Nobuyuki Otsuka, President and Representative Director
Contact： Corporate Planning Dept. +81-45-474-9030
Stock code： 9880
https://www.innotech.co.jp/english/

Following is the status of corporate governance at INNOTECH Corporation (hereinafter referred to as “INNOTECH”)

Ⅰ Basic Views on Corporate Governance and Capital Structure, Corporate Attributes, and Other Basic Information
１．Basic Views
Based on the recognition that corporate governance functioning effectively is indispensable for a company to remain competitive and efficient, andthus to maximize the return on investment for our shareholders, INNOTECH pursues fair and sound management in line with the global standards.
INNOTECH has established its Corporate Governance Guidelines (hereinafter "Guidelines").
Please refer to the various basic policies and approaches related to INNOTECH's governance,
https://www.innotech.co.jp/english/corporate/pdf/guideline_en.pdf【Disclosure in Accordance with Principles of Corporate Governance Code】 Updated【Principle 1 - 4 Cross-Shareholdings】
Please refer to Article 24 and 25 of the Guidelines.
【Principle 1 - 7 Transactions between related parties】
Please refer to Article 13 of the Guidelines.
【Principle 2 - 4 Ensuring Diversity, Including Active Participation of Women】
Supplementary Principle 2-4-1
1. Policy for Core Personnel Assignment and Promotion
INNOTECH aims at providing workplace where each employee is motivated, is encouraged to demonstrate his or her unique talent and personality, andworks with different work style and makes new challenges. Regardless of their age, gender and gender identity, sexual orientation, nationality, andhandicap, each employee is respected and diversity in the organization will be in increased. INNOTECH will assign and promote qualified employees tomanagerial positions and ensure diversity regardless of their age, gender and gender identity, sexual orientation, nationality, and work history such as being
hired as new graduates or hired by mid-career recruitment,
2． Numerical Target of Diversity
INNOTECH recognizes that the difference in percentage of male and female management employees at domestic group companies in Japan is an issue interms of ensuring diversity in human resources. INNOTECH has set the percentage of female management employees at domestic group companies inJapan as one of the main key performance indicators (KPIs) and will take measures to achieve the following targets;
Percentage of Female Management Employees at Domestic Group Companies in Japan
FY2022 (Actual)
FY2025 Target
FY2030 Target
3.6％
5.0％
10.0％
INNOTECH does not recognize any specific difference in assigning and promoting employees to managerial positions by nationality in terms of ensuring
diversity in human resources. Thus, the company does not devise and disclose numerical targets for management employees with foreign nationalities.
Percentage of management employees hired by mid-career recruitment has already reached to more than 50%.
INNOTECH is making following efforts as key measures to achieve above-mentioned goals;<<Key Measures>>* Provide opportunities for female employees to exchange views and opinions with the management team on a regular basis;* Provide periodic training programs which are targeted to promote diversity;* Achieve 30% or higher rate of new graduate female employees;* Promote flexible and efficient work style, such as by enhancing consumption of annual paid leaves, and making short-time working system for child careand working from home available.
Please refer to the relevant page on our ESG website (https://www.innotech.co.jp/esg/human_resource/data/) for our human resources data trends.
3. Policy to Nurture Human Resources
As for INNOTECH policy to nurture human resources, see “Efforts on Human Resources”. (https://www.innotech.co.jp/esg/human_resources/)【Principle 2-6: Exercise function as an asset owner of corporate pension plans】
INNOTECH recognizes that the management of corporate pension plans affects the asset formation of employees and its own financial situation, andassigns appropriately qualified personnel, such as the heads of the finance and accounting and human resources departments, to the asset management
staff, and also operates in cooperation with employee representatives to ensure that conflicts of interest are properly managed. In addition, themanagement of corporate pension funds is entrusted to investment institutions that have announced their acceptance of the Stewardship Code, and thestatus of pension asset management by each investment institution is monitored on a regular basis.
【Principle 3 - 1 Full Disclosure】(i)Company objectives （Management Philosophy and so on）, business strategies and management plan

Please refer to the following official corporate website and Article 3 of the Guidelines for our management philosophy. Also, please refer to thepresentation of the Financial Results and the message from the top manager which are posted on INNOTECH official corporate website for ourbusiness strategies and Mid-Term management plan.
Message from Top Manager https://www.innotech.co.jp/english/ir/policy/message/
Management Philosophy https://www.innotech.co.jp/english/corporate/rinen/
Medium-Term Vision https://www.innotech.co.jp/english/ir/policy/midterm/
IR materials https://www.innotech.co.jp/english/ir/library/(ii) Basic views and policy on corporate governance
Please refer to “I Basic Views on Corporate Governance and Capital Structure, Corporate Attributes, and Other Basic Information １．Basic Views”
of this report or the Guidelines.
(iii) Board policies and procedures in determining remuneration of Corporate Officers
Please refer to Article 10 of the Guidelines.
Also, INNOTECH has established the Advisory Committee whose majority of members consist of the Independent Directors as a voluntary advisory
body to the Board of Directors and the Committee deliberates, provides suggestions and advice with respect to the content of the remuneration paid
to the corporate officers.
(iv) Appointment policies and procedures of executives and nomination of candidates of Directors
Please refer to Article 7 to 9 of the Guidelines.
INNOTECH has established the Advisory Committee whose majority of members consist of the Independent Directors as a voluntary advisory body to
the Board of Directors and the Committee deliberates, provides suggestions and advice with respect to the election and dismissal of Directors.
(v) Reasons for appointment of executives as well as nomination of candidates of Directors based on the provision of (iv) above
Reasons for nomination of the Inside Directors are attached to this report.
Reasons for nomination of Outside Directors and Directors who are Audit & Supervisory Committee Members are included in this report.
Supplementary Principle 3-1-3Please refer to the following official corporate website as to INNOTECH’s initiatives on sustainability and basic policies of sustainability.
https://www.innotech.co.jp/english/esg/innotech_esg/sustainability/
https://www.innotech.co.jp/english/esg/innotech_esg/materiality/
https://www.innotech.co.jp/english/esg/innotech_esg/esg_system/
https://www.innotech.co.jp/english/esg/innotech_esg/stakeholder/
https://www.innotech.co.jp/english/esg/innotech_esg/innotech_sdgs/
https://www.innotech.co.jp/english/esg/supply_chain/https://www.innotech.co.jp/english/esg/environment/tcfd/
INNOTECH has devoted large amounts of R&D expenses, and will keep R&D continuously. The actual amount has been timely disclosed at seminars
on our financial results. Please refer to the following official corporate website.
https://www.innotech.co.jp/english/ir/library/presentation/
About information on investments in human capital and intellectual properties, please refer to the following official corporate websites.
https://www.innotech.co.jp/english/esg/human_resource/
https://www.innotech.co.jp/esg/society/intellectual_property/【Principle 4 - 1 Roles and Responsibilities of the Board of Directors (1)】・Supplementary Principle 4-1-1
Please refer to Article 7 of the Guidelines.
【Principle 4 - 9 Independence Standards and Qualifications for the Independent Outside Directors】
Please refer to Article 14 of the Guidelines.
【Principle 4-10 Use of Optional Approach】
・Supplementary Principle 4-10-1
In order to strengthen the independence, objectivity and accountability of board function on the matters that President and Representative Director are
delegated to submit proposal, INNOTECH has established the voluntary advisory committee. To ensure independence, the majority of the advisorycommittee members are independent Directors, and independent outside Director is served as chairperson of the committee.
The advisory committee deliberates, and provides advice and recommendations to the Board of Directors as to (i) Appointment and dismissal of directors
and Executive Officers, representative director, directors with special titles and Executive Officers with special titles, (ii) succession planning ofrepresentative director, and (iii) remuneration policy and details of directors and Executive Officers, and so on.

【Principle 4-11: Prerequisites for ensuring the effectiveness of the Board of Directors and the Audit & Supervisory Committee】
The voluntary advisory committee deliberates on the selection and dismissal of Directors and provides advice and recommendations. In order to fulfill
its roles and responsibilities in a practical manner, INNOTECH's Board of Directors is composed of Directors with different knowledge, experience, andabilities, including female Directors to ensure diversity.
・Supplementary Principle 4-11-1
Please refer to Article 7 of the Guidelines as to the policies and procedures for nominating directors.
INNOTECH states so-called skill matrix, in which INNOTECH lists the skills, knowledge and experiences for each directors to be expected, in
notice of calling of shareholders’ meetings.
https://www.innotech.co.jp/english/news/
・Supplementary Principle 4-11-2
INNOTECH states in the Notice of Convocation of the General Meeting of Shareholders and the Annual Securities Report the status of Directorsof INNOTECH holding concurrent positions as Directors and the Audit & Supervisory Board Members of other listed companies.

・Supplementary Principle 4-11-3
INNOTECH started evaluation on the effectiveness of the Board of Directors since FY2015. This year, we outsourced questionnaire to a third party
in order to adopt new objective viewpoints. This year, we outsourced questionnaire to a third party in order to adopt new objective viewpoints. For
the results of FY2020 evaluation, please refer to “II 2．2 Evaluation on the Effectiveness of the Board of Directors” of this report.
【Principle ４－14 Training for Directors and Audit & Supervisory Board Members】
・Supplementary Principle 4-14-2
Please refer to Article 11 of the Guidelines.
【Principle ５－１ Policy for Constructive Dialogue with Shareholders】
Please find our IR Policy which is disclosed on the INNOTECH official corporate website;
https://www.innotech.co.jp/english/ir/policy.html

２．Capital Structure
Percentage of shares owned
by foreign shareholders

20% or above and below 30%【Major Shareholders】
Shareholders

Number of shares held

Percentage of shares held

The Master Trust Bank of Japan, Ltd. (Trust Account)

1,634,900

12.40

Castlewilder Unlimited Company

456,000

3.46

Custody Bank of Japan.（Trust Account）

441,500

3.35

Mizuho Bank Ltd.
Makoto Sumita

420,000
410,200

3.19
3.11

DFA INTL SMALL CAP VALUE PORTFOLIO

334,700

2.54

Sumitomo Mitsui Banking Corporation

320,000

2.43

Employee stockholding association of Innotech

313,700

2.38

THE HOKURIKU BANK, LTD.

265,400

2.01

Kazuo Kato

202,500

1.54

Controlling shareholders――(excluding the Parent Company)
Parent Company

None

Supplementary Explanation【Major Shareholders】
INNOTECH holds 516,918 shares of treasury stock (3.77%) as of March 31, 2023, but they are excluded from the list above.

３．Corporate Attributes
Listed exchange and market segment

Tokyo Stock Exchange, Prime Market

Fiscal year-end

March

Industry

Electric Appliances

Number of employees at the mostrecent fiscal year-end (consolidated)

1,000 or more

Consolidated net sales for the mostrecent fiscal year

Between 10 billion and less than 100 billion

Number of consolidated subsidiaries at
the most recent fiscal year-end

Between 10 and less than 50

４．Guidelines on Measures to Protect Minority Shareholders When Dealing with Controlling Shareholders――

５．Other Special Circumstances that may Materially Affect Corporate Governance――

Ⅱ Corporate Governance Structure for Management Administration Pertaining to Management Decision-making, Execution,and Supervision, and Others
１．Matters concerning Institutional Structure and Organizational Operations
Organization Form

Company with an Audit & Supervisory Committee【Director】
Number of Directors specified in the
Articles of Incorporation

10 or lessTerms of office specified in the Articles
of Incorporation

1 yearChairperson of the Board of Directors

Outside Director

Number of Directors

5Outside Directors appointed

Yes

Number of Outside Directors

3

Number of Outside Directors designatedas Independent Officers

3

Outside Directors’ relationship with the Company (1)NameAttribute

Ichiro Anjo

From another company

Kimito Nakae

From another company

Shino Hirose

AttorneyaRelationship with the Company (※)
b c d e
f
g h
i
j

k

△

※ Categories for “Relationship with the Company”※ “〇” when Director presently falls or has recently fallen under the category; “△” when Director fell under the category in the past.
※ “●” when a close relative of Director presently falls or has recently fallen under the category; “▲” when a close relative of Director
fell under the category in the past.
a
Executive of the Company or its subsidiarybNon-executive Director or executive of a parent company of the Companyc
Executive of a fellow subsidiary company of the CompanydA party whose major client or supplier is the Company or an executive thereofeMajor client or supplier of the Company or an executive thereoffConsultant, accountant or legal professional who receives a large amount of monetary compensation or other property from the Company
besides compensation as a DirectorgMajor shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity)hExecutive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (Director himself/herself only)i
Executive of a company, between which and the Company Outside Directors/Audit & Supervisory Board Members are mutually appointed(Director himself/herself only）
j
Executive of a company or organization that receives a donation from the Company (Director himself/herself only)k
OthersOutside Directors’ relationship with the Company (2)Independent
Officers

Supplementary explanation of Attributes

Ichiro Anjo○

INNOTECH had transactions based on a consulting
agreement with Jisso Partners Inc. of which Mr. Ichiro
Anjo is the representative Director. However, theagreement was terminated on May 31, 2016, and thetransaction amount was 600 thousand yen, which was
insignificant. Therefore, INNOTECH believes that
there is no materiality that would create a special
interest relationship.
Based on the Companies Act of Japan, Article 427(1),INNOTECH and Mr. Anjo have executed a liability
limitation agreement under Article 423(1) with the
Minimum Liability Amount which is prescribed in
Article 425(1).

Kimito Nakae○

Shino Hirose

○

Name

Reason for assignment

INNOTECH has determined that Ichiro Anjo isable to provide accurate advice on
INNOTECH’s management from independent
standpoint by taking advantage of his many
years of experience and deep insight in thesemiconductor business, and therefore he isassigned as an Outside Director.
INNOTECH has designated and notified him as
an independent Director because he is a highly
independent person with no possibility ofconflict of interest with general shareholders, isindependent from the management team, andcan fulfill the role expected of an independent
Director from the viewpoint of protecting
general shareholders.
Kimito Nakae has many years of experience andspecialist expertise in the administrative
organizations and the financial industry, andtherefore is assigned as an Outside Director,
with the expectation that he is able tosupervise and provide effective advices from a
Based on the Companies Act of Japan, Article 427(1),broad range of view to improve management
INNOTECH and Mr. Saka have executed a liability
and administration of the Company.
limitation agreement under Article 423(1) with the
INNOTECH has designated and notified him as
Minimum Liability Amount which is prescribed in
an independent Director because he is a highly
Article 425(1).
independent person with no possibility ofconflict of interest with general shareholders, isindependent from the management team, andcan fulfill the role expected of an independent
Director from the viewpoint of protecting
general shareholders.
In addition to a wealth of experience in theareas of corporate law and compliance as an
attorney, Shino Hirose has a broad range ofexpertise in international businesses andcorporate activities. Therefore, she is assigned
as an Outside Director, with the expectation
Based on the Companies Act of Japan, Article 427(1), that such highly-specialized experience and
INNOTECH and Mr. Saka have executed a liability perspectives are utilized in the overall
limitation agreement under Article 423(1) with the management of the Company.
Minimum Liability Amount which is prescribed in INNOTECH has designated and notified her as
an independent Director because she is a highly
Article 425(1).
independent person with no possibility ofconflict of interest with general shareholders, isindependent from the management team, andcan fulfill the role expected of an independent
Director from the viewpoint of protecting
general shareholders.

Voluntary Committee corresponding toNomination Committee or Remuneration
Committee

Yes【Audit & Supervisory Committee】
Members of the Audit & Supervisory Committee and attributes of the Chairperson
Number of
Number of Inside
Number of
Fulltime Members
Directors
Outside Directors

Number ofMembers
Audit & Supervisory Committee

3

0

0

3

Commissioner(Chairperson)
Outside Director

Appointment of Directors and/or employees tosupport duties of the Audit & Supervisory
Committee

Yes

Matters related to Independence of such Directors and/or employees from Executive Directors
INNOTECH has established the Internal Audit Office, and verifies whether the Company’s administration appropriately and validly complies with laws, regulations,
the Articles of Incorporation and the rules of the company based on the Rule of Internal Audit. As of the date of submission of this report, the Internal Audit
Department has 4 full-time employees.
The Audit & Supervisory Committee, the Internal Audit Office, and the Accounting Auditors regularly meet to exchange opinions and information, or attend audits
as necessary, in order to improve the effectiveness of the audits. The Internal Audit Office reports the result of internal audits to the President andRepresentative Director and the Audit & Supervisory Committee.
The Internal Control Office, in consultation and cooperation with the accounting auditors, prepares annual plans and manages their progress. The Audit &Supervisory Committee, the Internal Audit Department, and the Accounting Auditors work together with the Internal Control Office as appropriate to share andunderstand relevant information.

Cooperation among Audit and Supervisory Committee, Accounting Auditor and internal audit departments
Linkage among the supervision by Outside Directors and the internal audits, audits by the Audit & Supervisory Committee and the accounting audits, andrelationship with the Internal Control Department.
All 3 Outside Directors are the members of the Audit & Supervisory Committee. Outside Directors regularly meet to exchange opinions and information with theInternal Audit Office and the Accounting Auditors, or attend audits as necessary, in order to improve the reliability of financial reporting. In addition, Outside
Directors regularly receive reporting on the operation status of internal control at the Board Meeting to share and understand relevant information.

【Voluntary Committee】
Voluntary committees, their members, and attributes of the Commissioners (Chairperson)

Committee
Name

Number ofMembers

Number of
Fulltime
Members

Number of
InsideDirectors

Number of
OutsideDirectors

Number of
OutsideExperts

OthersCommissioner(Chairperson)

Voluntary Committee
corresponding toNomination Committee

Advisory
Committee

4

0

1

3

0

0

OutsideDirector

Voluntary Committee
corresponding to
Remuneration Committee

Advisory
Committee

4

0

1

3

0

0

OutsideDirector

Supplementary explanation
Commissioner: Shino Hirose, Outside Director
Frequency of the committee meetings: whenever as necessary
Secretariat: Corporate Planning Dept.

【Independent Officers】
Number of independent officers

3

Other matters concerning independent officers――【Incentives】

Measures granting incentives to Directors

Introduction of performance-based compensation system and others

Supplementary explanation
INNOTECH's policy on compensation for executive Directors is to provide, in addition to monthly compensation, performance-linked compensationand compensation linked to shareholders' long-term interests that reflect the value of INNOTECH's shares (stock-related compensation),
respectively, in order to motivate them to increase INNOTECH's corporate value.
The index of performance-based compensation, the reason for adoption of such index, and the method of determining remuneration or calculation ofsuch performance- based compensation are described in the [Director Remuneration] Policy.

Recipients of Stock Options

Supplementary explanation――【Director Remuneration】
Disclosure of individual Directors’
remuneration

The Company does not disclose remuneration data of individual Director

Supplementary explanation

Remuneration for Directors and the Audit & Supervisory Committee Members of INNOTECH as of March 2023 was as follows;(Remuneration for Corporate Officers)
Remuneration paid to Directors (excluding Outside Directors): 192,183 thousand yen (basic compensation: 166,200 thousand yen,
performance-based compensation: 0 thousand yen, compensation by restricted stock: 25,983 thousand yen)
Remuneration paid to the Audit & Supervisory Board Members (excluding the Outside members of the Audit & Supervisory Board): 13,200
thousand yen (basic compensation: 13,200 thousand yen)
Remuneration paid to the Outside Officers: 49,200 thousand yen (basic compensation: 49,200 thousand yen
Grand Total: 254,583 thousand yen(Note) INNOTECH has transferred from a company with an Audit & Supervisory Board to a company with an Audit & Supervisory Committee on
June 23, 2023. “Total remuneration amount for each category of officers, total remuneration amount for each type of remuneration and number ofreferred officers are those as of the 37th fiscal year (ending March 31, 2023), which is prior to the transfer to the company with an Audit &Supervisory Committee.
(Note) The total amount of compensation does not include 92,079 thousand yen in total compensation to Directors of INNOTECH's consolidated
subsidiaries who concurrently serve as Directors of such subsidiaries.
(Note) Targets and actual results of consolidated operating income, which is an evaluation index for determining performance-linked compensation,
are as follows.
Consolidated operating income for the 37th fiscal year (ending March 31, 2023)
Initial target: 2,650 million yen/Actual: 2,319 million yen
Net Income Attributable to Owners of the Parent for the 37th Fiscal Year (ending March 31, 2023)
Initial target: 1,700 million yen/Actual: 1,666 million yen

Policy to determine remuneration andYescalculation method
Disclosure of Policy for Determining Remuneration or Calculation Method
Matters related to the policy for determining remuneration of officers and calculation method.
INNOTECH resolved to change its Articles of Incorporation to become a company with an Audit & Supervisory Committee and to introduce Executive
Officer System at its Annual General Meeting of Shareholders held on June 23, 2023, and INNOTECH transferred from a company with an Audit &Supervisory Board to a company with an Audit & Supervisory Committee on the same date..
INNOTECH resolved the company policy to determine the content of individual compensations of Directors at the Board Meeting. Prior to the resolution,
the Board of Directors consulted with the Advisory Committee, which was established as a voluntary advisory body to the Board of Directors, whose
majority of members consist of the Independent Outside Directors and whose commissioner is one of the Independent Outside Directors. The Advisory
Committee provided its advice to the Board of Directors.

The policy which was resolved is as follows;
Basic Policy・Remuneration structure depends on a role and the duty of each Director.
・Remuneration works as an appropriate incentive to enhance business performance and corporate value.
・Remuneration structure contributes to enhance corporate value for mid-term and long-term, and make directors share a profit-based awareness fromthe perspective of stockholders.
・Transparency in decision-making processes, objectiveness and fairness of remuneration standards are ensured.
・Remuneration structure and standards are reviewed and updated based on the economic and social conditions and the business environment of
INNOTECH Group as appropriate.
Remuneration paid to Directors consists of “Monthly Compensation” as fixed compensation, “Performance-based Compensation” which is linked toshort-term business performance, and “Restricted Stock Compensation” as mid-term and long-term incentives. Remuneration for other Directors than
Executive Directors, such as Outside Directors and Directors who are Audit & Supervisory Committee Members, is “Monthly Compensation” only, taking
their role to supervise and provide advices on management into consideration.
・Monthly Compensation：Paid to all Directors to compensate their duty to supervise management and execute business affairs, taking each Director’s
position and role into account.
・Performance-based Compensation：Bonus paid to Directors (excluding Outside Directors and Directors who are Audit & Supervisory Committee
Members) and Executive Officers based on the Company’s consolidated business results, and payment is made if and when each fiscal year’s target of
the Net Income Attributable to Owners of the Parent is achieved. Payment amount depends on its excess target rate. The reason to adopt the Net
Income Attributable to Owners of the Parent as a profit target is that INNOTECH believes it is an important management index which directly contributes
to enhancements of corporate value and shareholder returns.
The maximum amount is 300% of the total Monthly Compensation of Directors and Executive Officers to be paid. The distribution for each Directors andExecutive Officers is determined after taking the contribution level of each business area where he is in charge to the consolidated operating profit,
achievement level of the original business plan made in the beginning of the fiscal year for the said business area, results of ESG/SDGs-related activities,
and his position and duty into account. As for an indicator of the performance evaluation, INNOTECH believes that the consolidated operating income isan appropriate indicator since they are responsible for the company’s business performance.
・Restricted Stock Compensation：Offered in order to give Directors (excluding Outside Directors and Directors who are Audit & Supervisory Committee
Members) incentives to sustainably enhance the corporate value of INNOTECH Group and to have them share a profit-based awareness from theperspective of stockholders. The maximum number of stocks offered to all Directors is determined, utilizing the consolidated ROE and PBR of theconsolidated fiscal year before as indicators on a fifty-fifty basis. Afterward the number of stocks offered to each Director is determined within the above
scope, evaluating each Director’s mid-term and long-term contributions to enhance corporate value.
The Advisory Committee deliberates the appropriateness and the fairness of total remuneration amount and individual compensation amount of “Monthly
Compensation” and “Restricted Stock Compensation” paid to Directors including the President and Representative Director (excluding Outside Directors
and Directors who are Audit & Supervisory Committee Members, hereinafter the same shall apply), based on the resolution made by the General Meetingof Shareholders as well as the standards prescribed by the “Corporate Officers’ Remuneration Rules” and the performance evaluation, and reports to theBoard of Directors. Based on the report from the Advisory Committee, the Board of Directors determines the individual compensation amount.
For “Performance-based Compensation” paid to Directors including the President and Representative Director and Executive Officers, the Board of
Directors resolved the maximum total payment amount and that the individual compensation amount would be up to the sole discretion of the President
and Representative Director, Nobuyuki Otsuka. The authority delegated to the President and Representative Director was to evaluate and distribute
Performance-based Compensation paid to each Director, taking contribution level of each business area where he is in charge to the consolidated
operating profit, achievement level of the original business plan made in the beginning of the fiscal year for the said business area, results of ESG/SDGsrelated activities, and his position and duty into account. The reason why such authority was delegated to the President and Representative Director wasthat he was considered to be the best person to evaluate the business area where each Director and Executive Officer is in charge, overlooking theperformance of the entire INNOTECH Group. The Advisory Committee deliberates the appropriateness and the fairness of individual compensation amountof “Performance-based Compensation” paid to Directors and Executive Officers including the President and Representative Director, based on the
resolution made by the General Meeting of Shareholders as well as the standards prescribed by the “Corporate Officers’ Remuneration Rules” and theperformance evaluation, and reports to the President and Representative Director. Based on the report from the Advisory Committee, the President andRepresentative Director determines the individual compensation amount under his authority which is delegated by the Board of Directors.
As for determining the content of individual compensations of Directors, since the Advisory Committee reviewed the draft proposal from various aspects,
including its consistency with the relevant company policy, the Board of Directors has decided to respect the report presented by the Advisory
Committee and to follow the relevant company policy in principle. Remuneration amount of Directors (excluding Outside Directors and Directors who are
Audit & Supervisory Committee Members. The number of Directors at INNOTECH Corporation is prescribed as 5 or less in its Articles of Incorporation)
was resolved as 300 million yen or less on an annual basis at the 37th Annual General Meeting of Shareholders held on June 23, 2023 which does notinclude the employee-portion salary for a Director who also holds an employee post at the Company). Also, at the 37th Annual General Meeting of
Shareholders held on June 23, 2023, separately from the said maximum amount of the remuneration, it was resolved that Directors (excluding Outside
Directors and Directors who are Audit & Supervisory Committee Members) may receive 150 million yen or less of compensation by Restricted Stocks onan annual basis.
The number of Directors (excluding Directors who are Audit & Supervisory Committee Members) is 2, and the number of Directors who are Audit &Supervisory Committee Members is 3 (the number of Outside Directors is 3) at the 37th Annual General Meeting of Shareholders held on June 23, 2023.

【Support System for Outside Directors (Outside Audit & Supervisory Board Members)】
Outside Directors and the Outside Audit & Supervisory Board Members exchange views and information with the Internal Audit Office, Internal Control
Department, and accounting auditors as appropriate to strengthen the monitoring function and enhance the effectiveness of audits. In order to fulfill
the roles and responsibilities of the Board of Directors, INNOTECH has established a support system that includes receiving individual explanationsof the background, purpose, and content of Board of Directors meeting agendas and reports in advance from the department in charge of Board of
Directors operations.

When a Director or employee discovers a fact that violates laws and regulations or that may cause significant damage to INNOTECH, he or she must
promptly report the matter concerning such fact to the Audit & Supervisory Committee Members. In addition, when requested by the Audit &Supervisory Committee Members to report on matters related to the execution of business operations, INNOTECH must promptly report such matters.
The Audit & Supervisory Committee Members and the employees to support the duties of the Audit & Supervisory Committee are allowed to attend
the Management Committee, which deliberates important matters concerning management and business execution, and the Sales Committee, which
reports monthly on the status of sales and priority measures of each sales division.

２．Functions Including Business Execution, Audit, Supervision, Appointment, and Determining Remuneration (Outline of Current
Corporate Governance Systems)
１． Corporate Governance Scheme
INNOTECH transferred from a company with the Audit & Supervisory Board to a company with the Audit & Supervisory Committee on June 23,
2023 by the resolution of the 37th Annual General Meeting of Shareholders held on the same date to partially amend the Articles of Incorporation.
The objectives of this transfer were that (i) by adding the Audit & Supervisory Committee Members, who are in charge of audit of execution of duties
by Directors, to the members of the Board of Directors, INNOTECH believes that it can reinforce the supervisory function of the Board of Directors
and further strengthen its monitoring mechanism, thus enhance the quality of its corporate governance, (ii) by enabling the Board of Directors todelegate the decision making on a wide range of important business operations to the designated Director, the supervisory functions of management
and execution of business are segregated, the speed of managerial decision-making is accelerated, and its corporate value will become higher.
In addition, INNOTECH has adopted the Executive Officer System to reinforce execution of business and improve its corporate governance by the
resolution of the 37th Annual General Meeting of Shareholders to partially amend the Articles of Incorporation to establish such system.
INNOTECH has 5 Directors (one of them is a female director) who are appointed and in order to clarify the responsibility and flexibly to cope with thechanges of the management environment, their term of service is one year (the term of Directors who are Audit & Supervisory Committee Members
is two years). Majority of the members, who are 3 out of 5 are Outside Directors. The Board Members are, Nobuyuki Otsuka as the President andRepresentative Director, Yoshinori Tanahashi as the Representative Senior Managing Director, Ichiro Anjo as the chairman of the Board of Directors,
and Kimito Nakae, and Shino Hirose who are Outside Directors.
3 Audit & Supervisory Committee Members (one of them is a female member) are appointed at INNOTECH and by having three of them from outside
the company, INNOTECH believes that audits are conducted independently enough. The Audit & Supervisory Committee Members are Outside
Directors, Kimito Nakae (Chairman), Ichiro Anjo and Shino Hirose.
The Advisory Committee whose majority of members consist of the Independent Outside Directors is established as a voluntary advisory body to theBoard of Directors to provide advices and recommendations with respect to election and dismissal of Directors and Executive Officers andremuneration of such Directors and Executive Officers, thus strengthens the independence, objectiveness and the accountability of the function of
the Board of Directors. The members of the Advisory Committee are the Independent Outside Directors Shino Hirose (Chairperson), Ichiro Anjo, andKimito Nakae, and the President and Representative Director Nobuyuki Otsuka.
(Status of Audits by the Audit & Supervisory Committee Members and Internal Audits)
Directors who are Audit & Supervisory Committee Members attend regular and extraordinary meetings of the Audit & Supervisory Committee. In
addition to audits by the Audit & Supervisory Committee Members in accordance with the Companies Act and other laws and regulations, regularinternal audits are conducted on all divisions of the Group in cooperation with the Internal Audit Department. INNOTECH has established theInternal Audit Department, which verifies, in accordance with the "Internal Audit Regulations," whether INNOTECH's business operations areproperly and effectively executed in accordance with laws, the Articles of Incorporation, and internal regulations. As of the date of submission ofthis report, the Internal Audit Department has 4 full-time employees.
(Status of Accounting Audits)
INNOTECH receives fair and non-biased accounting audits and provides corporate management information correctly, based on the Companies Act andthe Financial Instruments and Exchange Act, appointing Deloitte Touche Tohmatsu LLC as its auditors.
２．Evaluation on the Effectiveness of the Board of Directors
INNOTECH annually conducts analysis and evaluation on the Effectiveness of the Board of Directors and discloses the outline of the results so thatINNOTECH maximizes its corporate value through the improvement of the effectiveness of the Board of Directors. This year, INNOTECH conducted
self-evaluation on the Effectiveness of the Board of Directors with all Directors and the Audit & Supervisory Board Members as follows;<Method of evaluation>（１）Last year, INNOTECH outsourced the survey to a third party, but this year, INNOTECH conducted the survey, distributing the “Questionnaireon the Effectiveness of the Board of Directors” to all 9 Directors and all 4 Audit & Supervisory Board Members in March, 2023 through the inhouse platform, and received their answers. The answers in the Questionnaire were taken with their names so that Directors and the Audit &Supervisory Board Members could be interviewed by the Secretariat of the Board.
（２）The answers were analyzed by their scores, compared to other companies’ scores, and the comments and opinions were reviewed.
（３）At the Board Meeting held in April, 2023, the Secretariat of the Board made a report with respect to the Evaluation on the Effectiveness of theBoard of Directors, explained the actual answers given by each Director/Audit & Supervisory Board Member, and presented the analysis results of
the Questionnaire. At this Board Meeting, all the members reviewed the report and decided to make improvements based on the report. In addition,
Outside Directors made the final report with respect to the Evaluation on the Effectiveness of the Board of Directors. After discussion, the Board
officially confirmed and adopted the results of the FY2022 Evaluation on the Effectiveness of the Board of Directors.
<Items of the Questionnaire>Major items of the FY2022 Questionnaire on the Effectiveness of the Board of Directors are as follow. Each item was evaluated by five grades anda respondent could provide comments freely as well. These items were adjusted, keeping consistency with the items from the year before, so thatthe questions will be relevant to the current issues of the company.
1. Institutional Design and Structure and Diversity of the Board of Directors.
2. Appointment/Election/Dismissal of Directors, and Evaluation of the Advisory Committee
3. Providing Information and Training Opportunities to Directors
4. Roles and Expertise of Directors
5. Operation of the Board Meetings
6. Performance Evaluation and Remuneration for the Management Team, and Evaluation of the Advisory Committee
7. Discussions at the Board Meetings, ESG-related matters, and Communication with Investors
8. Satisfaction Level of Outside Directors
9. Evaluation on the Effectiveness of the Board of Directors< Improvement Status of the Problems Identified the Year Before>
The Board of Directors and the Secretariat took following measures in FY2022, based on the results of the FY2021 Evaluation on the Effectivenessof the Board of Directors.
・Securing Human Resources
Though the score of the FY2021 Evaluation on the Effectiveness of the Board of Directors on this item was not low, some members mentioned theneed to improve discussion on securing human resources. Therefore, INNOTECH introduced a stock compensation plan for employees, provided a
special allowance to help employees cope with the inflation, and conducted an employee engagement survey. In addition to such efforts, theseissues were discussed at the Board Meeting as well, after reviewing details at the ESG/SDGs Promotion Committee. INNOTECH will continue its
discussion on human capital management as the company’s priority agenda item.
・Providing Communication Opportunities between Outside Officers
As the COVID-19 pandemic continued, INNOTECH could not actively provide communication opportunities to its Outside Directors last year.
However, INNOTECH is gradually increasing such opportunities these days, such as by organizing convivial lunch meetings and visiting tours to thesubsidiaries for Outside Directors, paying attention to the infection status.
・Clarification of Election/Dismissal Criteria
The Advisory Committee had many discussions on the succession plan. The Advisory Committee is considering a development plan of the nextgeneration management team and clearer qualification criteria necessary for the management members, referring to the third parties’ views andopinions.
<Evaluation Results of FY2022>
After the analysis and the discussions on the results of the FY2022 Evaluation on the Effectiveness of the Board of Directors, the following content
was confirmed;-As to the Institutional Structure of the Board of Directors and Diversity, it was concluded to be appropriate in general in terms of its scale,composition ratio, balance of expertise, concurrent positions held by the Board Members, and so on.
-As to the Appointment/Election/Dismissal of Directors and the Evaluation of the Advisory Committee, it was concluded to be appropriate ingeneral in terms of their process, results of election, composition of the Advisory Committee and validity of advice given by the Advisory
Committee.
-As to the Roles and Expertise of the Directors, it was evaluated to be appropriate in general. Various opinions were given with respect to the roles
and expertise of Outside Directors and Outside Audit & Supervisory Board Members, but the evaluation score on this item was not low.
-As to the Operation of the Board of Directors and Providing Information and Training Opportunities to Directors, it was evaluated that discussions
were made actively and they were generally appropriate. As to the quality of information and opportunities of providing information, there was no
dissatisfaction in general.
-As to the Performance Evaluation and Remuneration for the Management Team, and the Evaluation of the Advisory Committee, the evaluation
results on the remuneration system and the process of determination were generally good.
-As to Discussion at the Board Meetings, ESG-related Matters and Communication with Investors, and Satisfaction by Outside Directors, theevaluation results were generally good in terms of discussion on the management strategies and management plan, ESG-related matters, and so on.
-As to the Evaluation on the Effectiveness of the Board of Directors, the evaluation results were generally good.
<Future Issues>
As a result of improvement in these years, there are less obvious issues regarding the Effectiveness of the Board of Directors. The result may
indicate that the significance of the evaluation is becoming less. Future issues are i) matters which are still work in progress, such as Criteria ofElection for Outside Directors and Hiring and Training Policies, ii) Institutional Structure of the Board of Directors, and iii) identification of theissues to be discussed at the Board Meetings related to the Institutional Structure of the Board of Directors.

３．Reasons for Adopting the current Corporate Governance Scheme
INNOTECH has adopted the current corporate governance scheme since June 23, 2023 with a belief that it will enhance the quality of its corporate
governance and increase its corporate value as the company accelerates the speed of decision-making and execution of work by delegating authorityof the Board of Directors to Directors and reinforces the supervisory function on management through exercising voting right at the Board Meetingsby the Audit & Supervisory Committee Members, who are in charge of audit of execution of duties by Directors.

Ⅲ Measures Relating to Shareholders and Other Stakeholders
１．Efforts to Invigorate General Meeting of Shareholders and Exercising of Voting Rights
Supplementary explanation

Sending the Notice of Convocation of theshareholders’ meeting at early timing

INNOTECH provides Reference material for the General Meeting of Shareholders,
Financial Statement (Non-consolidated and Consolidated), and Business Report etc. on
the company website more than 3 weeks prior to the date of the General Meeting of
Shareholders. The Notice of Convocation of the 37th Annual General Meeting of
Shareholders (held on June 23, 2023) was sent on June 7, 2023. Reference material for
the General Meeting of Shareholders, etc., was posted on the company website on June
1, 2023.

Holding our General Meeting of Shareholders Our General Meeting of Shareholders this year was held on June 23, 2023, avoiding the
avoiding the date when many otherdate when many other companies held their shareholders’ meetings so that many
companies hold their shareholders’ meetings shareholders could attend our meeting.
Voting by electromagnetic means

Shareholders may exercise their voting rights via Internet (including by cell phones).

Participation into the electronic voting
platform and making other efforts toenhance the environment for institutional
investors to exercise their voting rights

By introducing the electronic voting platform, INNOTECH is able to provide the content of
the Notice of Convocation promptly to shareholders.

Providing the Notice of Convocation(summarized version) in English

２．Activities Relating to ＩＲ

INNOTECH provides the Notice of Convocation in English on the company website.

UpdatedSupplementary explanation

Presentation byRepresentative

Developing and announcing the disclosure
policyIR policy is referred to on the INNOTECH official corporate website;
https://www.innotech.co.jp/english/ir/policy.html

Holding periodic briefing sessions forindividual investors

Briefing for individual investors was held online in August 2022
and March 2023.

Yes

Holding periodic seminars for analysts
and institutional investors

Two seminars on our financial results (in May and November) are
held every year. In November 2022 and May 2023, the seminar
was held in webinar.

Yes

Posting of IR materials on the Company’s
websiteINNOTECH provides materials such as financial highlights,
financial statements, and IR calendar on the official corporatewebsite. https://www.innotech.co.jp/english/ir/

Establishment of a department (responsible
person) in charge of IR

IR Contact: Corporate Planning Dept. TEL +81-45-474-9030
Management in charge of IR matters：Yoshinori Tanahashi, Senior
Managing Executive Officer and Representative Director

OthersFor the better understanding of the company, INNOTECH provides
a seminar on our financial results on the official corporate website
for a certain period of time.

３．Efforts to ensure Due Respect for Stakeholders
Supplementary explanation

Establishment of rules to ensure due respect
for stakeholders including company rules

In the Management Philosophy section of the official corporate website, INNOTECH provide“Our Vision”, “Our Actions” and the “INNOTECH Group lnternal Code of Conduct andEthics” and employees work hard on a daily basis to enforce them.
https://www.innotech.co.jp/english/corporate/rinen/
https://www.innotech.co.jp/english/corporate/csr/compliance/

○ISO
INNOTECH have obtained ISO 14001 and ISO 9001 certification.
○Activities for Energy Conservation
In February 2018, we received the Kanto Region Electricity Usage Rationalization
Committee's highest award for the significant reduction of electricity consumption in ourbuildings. In addition, INNOTECH set up a solar panel system on the rooftop of theheadquarter building. It provides the electricity including lighting for the office and thecommon areas of the building.
○Resource-saving Measures and Recycling
INNOTECH is working hard to go paperless, such as digitizing various forms and reports,
distributing meeting materials electronically prior to the meetings and sharing suchmaterials utilizing tablets, taking statistics of monthly total numbers of copies and printing
materials and publishing such numbers inside the company to increase employees
awareness and to motivate them to make further progress on going paperless.

Environmental preservation activities,
CSR activities, etc.

○Participation in the Kanagawa Upcycle Consortium
In Kanagawa Prefecture, where INNOTECH headquarter is located, a feasibility study for aso-called upcycling is conducted, utilizing “LIMEX” which is new material mainly made oflimestone without using almost any water nor wood and turned into alternatives of paper
and plastic. The word “upcycling” means to turn used materials to higher value-added
materials than the original materials, while recycling means turning the used materials backto reusable materials (often with lower quality than original materials).
INNOTECH supports the upcycling efforts and participates as one of the partner companies
in the “Kanagawa Upcycle Consortium”, which promotes the upcycling models proposed by
Kanagawa Prefecture.
INNOTECH utilizes LIMEX for its company brochures and we save 4.1 trees and 20,500
litters of water per 1,000 copies of our company brochures.
○Supporting General Incorporated Association F・Marinos Sports Club
YOKOHAMA MARINOS LTD., which is the parent organization of the Yokohama F. Marinos,
a member team of the Japan Professional Football League (J. League), has founded theGeneral Incorporated Association F. Marinos Sports Club to help accelerate theachievement of its objectives, such as “Realizing Sustainable Local Community” and“Nurturing Athletes who Compete Globally”.
The F. Marinos Sports Club engages in activities to enrich daily lives for people in its home
town by promoting sports and physical activities and contributing to the local community,
closely working together with the local administration and the residents through the “Fureai
Football Project” and so on. INNOTECH supports F. Marinos Sports Club and assists
people with various disabilities through management of the powerchair football tournamentand other projects.
○Assistance to the areas where the natural disasters struck hard
INNOTECH Group is making financial contributions via Japanese Red Cross Society for the2011 off the Pacific Coast of Tohoku Earthquake and the 2016 Kumamoto Earthquake.
○Nurturing the IT Expertise
INNOTECH has financially contributed to Life is Tech Inc. which provides education forcomputer programming mainly to junior high and high school students. Its plan is toprovide opportunities for education in the IT area for young people, women, and people
from overseas who will lead our future and to contribute to addressing and resolvingsocial issues.
○SANEI HYTECHS Focusing on the STEM Education
SANEI HYTECHS Co., Ltd. contributes to the local community and nurtures engineers
who will lead the future science and technology through the so-called “STEM (Science,
Technology, Engineering and Mathematics)” education by providing its original Kids
Education Program (an education program on robotics for elementary school pupils), cosponsoring the non-profit organization “FIRST (For Inspiration and Recognition of
Science and Technology) Japan”, and so on.

Establishment of policies for providing
information to stakeholders

IR Policy is referred to on the INNOTECH official corporate website;
https://www.innotech.co.jp/english/ir/policy.html

Ⅳ Matters Related to Internal Control System
１．Basic Views on Internal Control System and Progress of System Development
INNOTECH, in line with the Companies Act of Japan and the Ordinance for Enforcement of the Companies Act of Japan, establishes its “Basic Policy
on Internal Management and Control” with a resolution of the Board of Directors. Also, INNOTECH organizes and operates its internal control system
under the leadership of the Internal Management and Control Office which is established in the company. INNOTECH has set forth its “Basic Policy on
Internal Management and Control” as follows.
（１） Scheme to ensure that execution of duties by Directors as well as employees comply with laws and regulations as well as its Articles ofIncorporation
1. INNOTECH Group shall devise the “INNOTECH Group Internal Code of Conduct and Ethics” so that INNOTECH Group Directors will thoroughly
comply with applicable laws and regulations and act sincerely.
2. In the event that any of Directors discovers any material violations of laws and regulations or of the company internal rules inside the company,
such Directors shall, without delay, report such violations at the Board Meeting.
3. INNOTECH Corporation shall designate the “INNOTECH Group External Whistleblowing Office” as a whistleblower System at INNOTECH Group.
（２） Scheme for Maintenance and management of information and records related to execution of duties by Directors
1. INNOTECH Corporation shall appropriately maintain the records and manage information based on its company internal rules such as the“Document Management Rules” for any documents, electronic records and other important information related to its execution of duties.
2. Directors as well as the Audit & Supervisory Board Members may access to such documents and information any time
3. INNOTECH Corporation shall establish an organization which is in charge of appropriate disclosure of company’s material information as well asother disclosure and Directors shall immediately and thoroughly organize and appropriately disclose such information which must be disclosed under
the applicable laws and regulations.
（３） Rules and scheme to manage risk of loss
1. INNOTECH Corporation shall establish the “Corporate Crisis and Risk Management Rules” which address risk management and any risk of loss
which could take place at INNOTECH Group, as well as make sure that employees are fully informed and aware of INNOTECH Group measuresagainst such risk.
2. In the event of company crisis, INNOTECH Corporation shall immediately organize a special task force.
（４） Scheme to ensure efficient execution of duties by Directors
1. Periodic Board Meetings shall be held monthly as a principle so that they will serve as the basis for efficient execution of duties by INNOTECHGroup Directors; Extraordinary Board Meetings shall be held on a needed basis.
2. Segregation of business shall be determined at the Board of Directors and duties of Directors shall be efficiently executed based on each
Director’s authority set by the Administrative Authority Rules.
3. Management Meetings shall be held periodically to set management policies and discuss and review important matters.
（５） Scheme to ensure fairness of work at INNOTECH Group
1. INNOTECH shall set up “Affiliate Companies Management Rules” to ensure fairness of work as a whole in INNOTECH Group
2. Directors of INNOTECH Corporation shall also serve as the Group companies’ Directors so that the Group companies’ business status and otherimportant matters are reported to them in a constant and appropriate manner.
3. INNOTECH Corporation Internal Audit Office shall conduct audits of INNOTECH Group companies and ensure effectiveness and appropriatenessof internal control throughout INNOTECH Group.
（６） Matters related to employees who are requested by the Audit & Supervisory Board Members to assist their work as well as such employees’
independence from Directors
1. Employees who are requested to assist the Audit & Supervisory Board Members shall collect necessary information for audits conducted by the
Audit & Supervisory Board Members based on such Audit & Supervisory Board Members’ instructions and directions and the employees shallappropriately report to such Audit & Supervisory Board Members with respect to the status and progress of their work.
2. Activities of employees to assist the Audit & Supervisory Board Members shall not be unfairly prejudiced by Directors and the Internal
Audit Office.
（７） Scheme for reporting to the Audit & Supervisory Board Members by Directors as well as by employees and other reporting
1. INNOTECH Group Directors and employees shall report their status and progress of work to the Audit & Supervisory Board Members as requested
by such Audit & Supervisory Board Members as well as report other matters which may materially affect the company to the Audit & Supervisory
Board Members.
2. INNOTECH Group Directors and employees shall report matters related to their work to the Audit & Supervisory Board Members upon requestfrom such Audit & Supervisory Board Members.
3. Internal Audit Office as well as its related divisions shall report all the issues brought to the INNOTECH Group Whistleblowing Office to the Audit& Supervisory Board Members on a periodic basis.
4. Any employees shall not be treated unfairly by reason of making reports to the Audit & Supervisory Board Members.
（８） Other scheme for the Audit & Supervisory Board Members to conduct their audits effectively
1. Audit & Supervisory Board Members shall comply with the audit policies and the audit plan set by the Audit & Supervisory Board and shallconstantly exchange views and opinions with the Representative Director, accounting auditors and the Internal Audit Office.
2. Audit & Supervisory Board Members shall attend important company meetings such as Board Meetings and go through materials which are used insuch meetings to ensure effectiveness of their audits.
3. Audit & Supervisory Board Members may consult with experts such as attorneys, certified public accountants, tax accountants and so on
whenever they determine as necessary for their execution of work, and expenses for such professional services required by the Audit & Supervisory
Board Members shall be borne by the company.
4. In the event that the Audit & Supervisory Board Members request advance payment of expenses for their execution of work, the company shallpromptly address such requests unless its necessity is denied.
（９） Scheme to ensure reliability of financial reports
In order to ensure reliability and properness of INNOTECH Group financial reports according to the Financial Instruments and Exchange Act ofJapan, INNOTECH shall lay groundwork for its internal control under the instructions of the Representative Director; INNOTECH Internal Audit
Office shall be in charge of execution of such groundwork and its evaluation from operational point of view.
（10） Fundamental policies and measures in eliminating antisocial forces
From the viewpoint of avoiding any involvement with and any influence from economic activities by the antisocial forces, INNOTECH Group shalldevise the “INNOTECH Group Internal Code of Conduct and Ethics” as well as the “Rules to Counter Antisocial Forces” so that the employees will
have official rules and guidance on how to counter antisocial forces and make efforts to eliminate them.

２．Basic Policy on Elimination of Anti-Social Forces and Status of Its Development
The policy is set forth in “1. Basic Views on Internal Control System and Progress of System Development”, paragraph (10) above, specifically as follows.
INNOTEC Group recognizes that it is important not only from the standpoint of compliance but also from the standpoint of corporate defense to sever any
relationship with antisocial forces. The Group clearly states in the "INNOTEC Group Code of Ethical Conduct" that "the Group shall sever any
relationship, whether legal or illegal, with antisocial activities or forces that threaten the order and safety of civil society and obstruct economic activities.
In accordance with the "INNOTEC Group Code of Ethical Conduct," all employees and others are required to fulfill their responsibilities to deal with
antisocial forces.
If an employee receives an unreasonable request from an antisocial force, he/she is required to immediately report such information to the General
Manager of the General Affairs and Personnel Department.
If necessary, we will work closely with police authorities and related organizations to develop a system that will enable us to respond in an organizedmanner.

Ⅴ Others
１．Introduction of Defenses against Hostile Takeovers
Introduction of defense mechanism
against hostile takeovers

None

Supplementary explanations――

２．Other matters Concerning Corporate Governance System, etc.
――

Appendix: Reasons for Election/Appointment of Inside Directors
Position

Name

President andRepresentative
Director
Executive
Officer

Nobuyuki
OtsukaSeniorManaging
Executive
Officer andRepresentative
Director

Yoshinori
Tanahashi

Reason for assignment
In addition to experience and a track record in launching and developing thesemiconductor testing business of INNOTECH, Nobuyuki Otsuka has
participated in the management of domestic and overseas subsidiaries, andhas a wealth of experience in management. He has been involved in the
management of INNOTECH as Representative Senior Managing Director sinceApril, 2019, and as Representative Director since April, 2021. He is assigned
as a Director with the expectation that such experience will be continuously
utilized in the management of INNOTECH.
Yoshinori Tanahashi has a wide track record of involvement in the
management of fields such as finance and planning through his extensive
experience in the financial industry and the corporate planning division of theoperational company. He has been involved in the management of INNOTECH
as Senior Managing Director since April, 2021. He is assigned as a Director
with the expectation that such experience will be continuously utilized in the
management of INNOTECH.

INNOTECH Corporate Governance System (Model Chart)

General Meeting of Shareholders
Election/dismissal

Advisory
Committee

Election/dismissal

Election/dismissal

Board of Directors

ConsultationCoordination

Audit

Director(excluding Audit & Supervisory
AdviceCommittee member)Supervisory

Accounting
Auditors

Audit and Supervisory
Committee
Dismissal
Audit

Coordination

Accounting

Coordination【Business Operation】

Election/dismissal

Audit

Internal Audit
Department
ReportPresident

Executive Officer
Supervision

Each Business Unit and Administrative Division

Management
Committee
Risk Management
Committee

Audit