(Translation)

Please note that this English version is not an official translation of the original Japanese document. In cases where
any differences occur between the English version and the original Japanese version, the Japanese version shallprevail. This translation may be used only for reference purposes.

Corporate Governance Report
Last Update: June 28, 2023
YUSHIN PRECISION EQUIPMENT CO., LTD.
Takayo Kotani, Representative Director and President
Contact: Kota Oda, Director and Executive Vice President, General Manager of Admin. Div.
Securities Code: 6482
The corporate governance of YUSHIN PRECISION EQUIPMENT CO., LTD. (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other
Basic Information

1.

Basic Views
The Company aims at achieving sustainable growth and maximizing the enterprise value for medium- andlong-term under the business philosophy with obtaining credibility from all stakeholders surrounding us
including shareholders. We strive to strengthen corporate governance with the basic policy of following fiveitems.
1.
2.
3.
4.
5.

The Company respects the rights of shareholders and ensures equality, as well as strives to improve theenvironment for executing rights appropriately and protect rights.
The Company strives to sincerely cooperate with stakeholders excluding our shareholders with good sense.
The Company strives to ensure the transparency by appropriately making disclosure according to laws andregulations and voluntarily providing information excluding the disclosure.
The Board of Directors strives to execute its roles and duties appropriately for transparent/fair and flexible
decision-making.
The Company strives to positively communicate with shareholders after sharing the direction of its stable
growth for long-term.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code] Updated
The Company implements all the principles of the corporate governance code as revised in June 2021.
[Disclosure Based on the Principles of the Corporate Governance Code] Updated
All principles are stated based on the code revised in June 2021.
[Principle 1-4: Strategic Shareholdings]
The Company may hold the shares of business partners for the purpose of sustainable increases in enterprisevalue, keeping and strengthening business relations, and stable business management. Among holding shares,
the main shares are verified in respect of economic rationality for medium- and long-term based on risk andreturn and future prospect. The results of verification are periodically reported to the Board of Directors. In FY
2023, as a result of the verification, the Company confirmed that there is validity of possession of all the shares
held.
In response to future changes in circumstances, the Company will review such as reducing the number ofshares held if it is not deemed adequacy of possession.
Regarding the exercise of voting rights of strategic shareholdings, the Company makes judgments based on
the following two points.
(1) Will it increase the corporate value of investee companies in the medium- to long-term and contribute tosustainable growth? (Financial soundness, no illegal acts done)(2) Will the corporate value of the Company improve and lead to shareholder's medium- and long-term
benefits?

-1-

(Translation)[Principle 1-7: Related Party Transactions]
The Company’s “Regulations of the Board of Directors” provides that approval for competitive business andconflict-of-interest transactions by Directors require the resolution of the Board of Directors. The same isapplicable to the case where counterparty is a major shareholder.
[Supplementary Principle 2-4-1: Diversity of Core Human Resources of the Company]
The Company is committed to sustainable growth and medium- to long-term enhancement of corporate value
through the creation of an organization that makes the most of the values and perspectives of its diverse humanresources. The Company promotes the recruitment and development of diverse human resources, focusing on
the penetration of the Company’s corporate philosophy, and aims to create an environment in which each
employee can maximize his or her characteristics and abilities and continue to work with vitality and enthusiasm.
The Company has set a target of 5% for the ratio of women in management positions, and the actual figure asof March 2022 was 4.7%. The Company recognizes that the ratio of women in management positions is an issue
and is implementing various initiatives to support the formation of career plans for women.
In addition, regardless of nationality or employment category, such as new graduates or mid-career hires, theCompany's promotion to management positions is based on the experience and ability required to perform thejob and on personnel evaluations. At present, the Company has not set targets for the promotion of mid-careerhires or non-Japanese employees specifically to management positions.
For details, please refer to the following.
Securities Report: https://ir.ype.co.jp/ja/library/securities.html[Principle 2-6: Fulfilling Function as the Asset Owner of Corporate Pensions]Regarding management of conflicts of interest that may arise between the beneficiaries of the corporate
pension and the Company, the Basic Policy on Investment is established based on the guidelines of the Ministryof Health, Labor and Welfare to maximize the benefit of the beneficiaries. In addition, the Company has inhouse responsibilities regarding the operation of corporate pension funds, and a consultation system to external
specialized agencies.
[Principle 3-1: Enhancement of Disclosure](1) Business philosophy, strategy and medium-term management plan are disclosed on “the Company’s
website,” “Securities Report,” “Investor Presentation Material” and others.
(2) The basic policy for corporate governance is disclosed on “the Company’s website” and “Corporate
governance report.”(3) Individual Directors’ Remuneration are made of monthly remuneration, short-term performance bonus, andmedium-term performance/stock price-linked bonus based on the new executive compensation system.
The amount of the monthly remuneration is limited within the range defined for each position, and isdecided by Representative Director and President, who is entrusted by the Board of Directors, based on theevaluations on the directors which are decided after the deliberations in the Nomination and Remuneration
Committee.
The short-term performance bonus and medium-term performance/stock price-linked bonus is decided by
the Representative Director and President, who is entrusted by the Board of Directors, based on the formuladecided by the Nomination and Remuneration Committee and the Board of Directors and the evaluations
on the directors decided after the deliberations in the Nomination and Remuneration Committee.
(4) The Company has the policy for nominating candidates of Directors, Corporate Auditors and appointing
Executive Officers that those qualified to perform the duties and responsibility of Directors and Corporate
Auditors shall be nominated/appointed sufficiently taking account of personality and insights. The External
Directors and Corporate Auditors are expected to perform the function and role of objective and appropriate
oversight or audits based on technical knowledge, and they are appointed based on the basic view that there
are no threats of conflicts of interest with general shareholders. They are disclosed on the “Notice ofConvocation for Ordinary General Meeting of Shareholders” and “Securities Report.”
The selection of candidates of Directors and Corporate Auditors is discussed by the Nomination andRemuneration Committee, and a report or opinion is given to the Board of Directors, and is determined by
the Board of Directors. The appointment of Directors and Corporate Auditors is subject to the resolution of
the General Meeting of Shareholders. The policies and procedures for the appointment / dismissal of
Directors and Corporate Auditors are stipulated in the “Regulations of the Board of Directors.”-2-

(Translation)(5) For the appointment / dismissal of Directors and Corporate Auditors, and the nomination of Directors /Corporate Auditors’ candidates, explanation of each of appointment / dismissal and nomination will be
disclosed at the “Notice of Convocation for Ordinary General Meeting of Shareholders.”[Supplementary Principle 3-1-3: Sustainability]
Based on our business philosophy, we aim to achieve sustainable corporate growth and maximize corporate
value over the medium- and long-term while earning the trust of our shareholders and all other stakeholders
surrounding us.
We recognize that addressing issues surrounding sustainability is one of the most important management
challenges. Therefore, we are striving to develop products that contribute to the energy conservation of ourcustomers’ plants, and are aiming to reduce the environmental impact of our operations by reducing electricity
consumption and CO2 emissions in our activities.
With regard to investment in human capital and intellectual property, in order to accelerate our global businessdevelopment, we are hiring and training the human resources we need and working to improve compensation sothat we can maintain employment.
In addition, we are promoting measures to strengthen our management and organizational foundations, suchas improving efficiency through the use of IT tools and other means, and supporting the activities of women.
As part of our corporate identity (CI) activities, we have adopted the slogan, “Above all, reach people’s hearts.”
in order to set a corporate philosophy and direction to focus on in the future, and to achieve further growth andleaps forward, and we are working to improve productivity that our customers expect, and create a safe work
environment.
We believe that these ideas and approaches are closely related to the United Nations Sustainable Development
Goals (SDGs), and we will continue to strive to strengthen sustainability through our business activities.
Please visit our website for the details of information disclosure which is based on TCFD recommendations.
Website: https://ir.ype.co.jp/en/sustainability.html
Securities report: https://ir.ype.co.jp/ja/library/securities.html[Supplementary Principle 4-1-1: Roles/Duties of the Board of Directors]
The Company defines the matters to be resolved at the Board of Directors in “Regulations of Board of
Directors” which is: the matters on the general management, the General Meeting of Shareholders, organizationand personnel system, subsidiary management, Directors, business execution, financial results, matters
authorized by the resolution of the General Meeting of Shareholders, and matters of which the Board
acknowledges the necessity. Meanwhile the Company introduced the executive officer system in April 1, 2003
to clarify the responsibilities in the management and, to speed up decision-making by delegating authorities, andto separate the business execution from the management monitoring. The Company now has three executive
officers who are not Director.
[Principle 4-9: Criterion for Independence of and Qualification for Independent External Director]
The Independent External Directors of the Company are expected to perform the function and role of objective
and appropriate oversight, and give advice based on technical knowledge, and are appointed based on the basic
view that there are no threats of conflicts of interest with general shareholders. The Company has established its
own criterion for the independence, given the independence criterion established by the financial instruments
exchange.
[Supplementary Principle 4-10-1: The Nomination and Remuneration Committee]
Of the Company's eight directors, three are independent External Directors, which does not constitute amajority of the Board of Directors. However, from the perspective of ensuring the transparency and objectivityof deliberations, the Company has established the Nomination and Remuneration Committee chaired by anindependent External Director, which deliberates on the selection and dismissal of officers, the compensation
system, and other matters requested by the Board of Directors. The Nomination and Remuneration Committee
is composed of a majority of independent External Directors, including the chairperson who is an independent
External Director, and they provide fair and appropriate involvement and advice from an objective standpoint,
including from the perspective of the diversity and skills of the Board of Directors.
[Supplementary Principle 4-11-1: Preconditions for Ensuring Effectiveness of Board of Directors and Board of
Corporate Auditors]
Under rapidly changing business environment and advancement of globalization, the Company appoints
candidates of Directors with a focus on balance among knowledge, experience and expertise, diversity and global
viewpoints. Now 8 Directors, including External Directors, take office. The Company will keep the number of-3-

(Translation)

the board members that immediate decision-making is conducted with each member providing his or her
expertise and exchanging opinions each other. The independent External Directors includes those withmanagement experience at other companies. Furthermore, the Company formulated a skills matrix that lists theknowledge, experience, and abilities of each director and corporate auditor. The matrix is published on the
Company's website and in the convocation notice.
[Supplementary Principle 4-11-2: Preconditions for Ensuring Effectiveness of Board of Directors and Board of
Corporate Auditors]
Concurrent holding of positions of other companies by External Directors and Corporate Auditors is annually
disclosed at “the Notice of Convocation for the Ordinary General Meeting of Shareholders,” “Securities Report”
and “Corporate Governance Report.” No Executive Directors concurrently serve as an officer of other listedcompanies, excluding those of our group, and the system is established that Executive Directors can be devoted
on works of Directors. The Full-time Corporate Auditor does not concurrently serve as an officer of othercompanies, and the system is established that he can be devoted to his work at all times.
[Supplementary Principle 4-11-3: Preconditions for Ensuring Effectiveness of Board of Directors and Board of
Corporate Auditors]
External Directors now analyze and evaluate whole of the Board of Directors. In order to further improve theBoard, we carry out internal surveys to analyze and evaluate the effectiveness of the Board as a whole, assess
the results, and make improvements.
Integrated report: https://ir.ype.co.jp/en/library/IRFiling.html[Supplementary Principle 4-14-2: Training of Directors and Corporate Auditors]
Given the roles and duties expected and qualification and knowledge required of Directors and Corporate
Auditors, the Company holds a training session for all Directors, Corporate Auditors and Executive Officers
once or more a year. The Company also gives explanations about the corporate profile and holds plant tours forExternal Directors and Corporate Auditors when they take office as well as provides and arranges opportunities
to receive the training necessary for each Director or Corporate Auditor and owes the expenses for the training.
[Principle 5-1: Policy for Constructive Communication with Shareholders](1) The administrator in charge of the communication is the IR Executive Officer.
(2) The department in charge of the communication is the Corporate Planning Office, which works closelywith related departments to ensure rational and smooth communication with shareholders.
(3) As a means of the communication, in addition to individual meetings, mainly online, the Company holds
financial results briefings and second quarter financial results briefings for analysts and institutional
investors. Moreover, the Company regularly participate in corporate briefings for individual investors
sponsored by securities companies and consulting companies. In addition, the Company discloses
information through its website and Integrated Report in order to provide information to a wide range ofstakeholders.
(4) Opinions obtained through the communications with shareholders are appropriately fed back to the Boardof Directors in the form of IR activity reports (once a month).
(5) Regarding the management of insider information during the communications, the Company ensurescompliance with the Internal Information Management Regulations that stipulate management standards
for internal information. In addition, the Company refrains from communications related to financial results
during the “silent” period stipulated in the Disclosure Policy.
(6) Communications are mainly held on the business results for the period announced, the basis for theannounced forecasts, and medium- to long-term strategies.
[Principle 5-2: Formulation and Publication of Management Strategies and Plans]
The Company recognizes that the most important management issue is to continuously increase corporate
value while improving YUSHIN Group's performance. The Company places importance on management
indicators such as Net sales, Operating profit, Ordinary profit, and EPS (earnings per share), and discloses its
medium-term targets and measures to achieve them in its financial results presentation materials.
With regard to the Company’s business portfolio, the Company will allocate resources to our core business of
take-out robots for injection molding machines, while adequately identifying opportunities for new businesses.

2.

Capital Structure
Foreign Shareholding Ratio

More than 10% but less than 20%-4-

(Translation)[Status of Major Shareholders] Updated
Name / Company Name
Yushin Industry Co., Ltd.

Number of Shares Owned
11,992,378

Percentage (%)
35.24

The Master Trust Bank of Japan, Ltd. (Trust Account)
Takayo Kotani
Miki Murata
Custody Bank of Japan, Ltd. (Trust Accounts)
The Kyoto Chuo Shinkin Bank, Ltd.

2,592,000
1,968,532
1,847,032
1,253,100
1,088,974

7.62

Mayumi Kotani
RBC IST 15 PCT NON LENDING ACCOUNT CLIENT ACCOUNTMUFG Bank, Ltd.
STATE STREET BANK AND TRUST COMPANY
505001

968,202

2.84

862,0202.53

849,986

2.50

832,635

2.45

Controlling Shareholder (except for Parent Company)-

Parent Company

None

5.78
5.43
3.68
3.20

Supplementary Explanation Updated
Foreign Shareholding Ratio and Status of Major Shareholders are stated as of March 31, 2023.

3.

Corporate Attributes

Fiscal Year-End

Prime Marketof the Tokyo Stock Exchange
MarchType of Business

Machinery

Listed Stock Market and Market Section

Number of Employees (consolidated) as of the End of thePrevious Fiscal YearSales (consolidated) as of the End of the Previous Fiscal Year
Number of Consolidated Subsidiaries as of the End of thePrevious Fiscal Year

From 500 to less than 1000
From ¥10 billion to less than ¥100 billion
From 10 to less than 50

4.

Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder-

5.

Other Special Circumstances which may have Material Impact on Corporate Governance-

II. Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Oversight in Management
1.

Organizational Composition and Operation
Organization Form

Company with board of corporate auditors-5-

(Translation)[Directors]
Maximum Number of Directors Stipulated in Articles of Incorporation

15

Term of Office Stipulated in Articles of Incorporation

1 yearChairperson of the Board

President

Number of Directors

8

Appointment of External Directors

Appointed

Number of External Directors

3

Number of Independent Directors

3

External Directors’ Relationship with the Company (1)NameAttribute

Relationship with the Company*
a

b

c

d
B

e

f

g

h
B
B

I

Yasuo Nishiguchi
From another company
Hiroshi Matsuhisa
From another company
Reiko Nakayama
From another company* Categories for “Relationship with the Company”* “A” when the director presently falls or has recently fallen under the category,“B” when the director fell under the category in the past
* “C” when a close relative of the director presently falls or has recently fallen under the category,“D” when a close relative of the director fell under the category in the past
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.

j

k

A

Executive of the Company or its subsidiaries
Non-executive director or executive of a parent company of the Company
Executive of a fellow subsidiary company of the Company
A party whose major client or supplier is the Company or an executive thereof
Major client or supplier of the listed company or an executive thereof
Consultant, accountant or legal professional who receives a large amount of monetary consideration orother property from the Company besides compensation as a director/Corporate Auditor
Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is alegal entity)
Executive of a client or supplier company of the Company (which does not correspond to any of d, e, orf) (the director himself/herself only)
Executive of a company, between which and the Company external directors/Corporate Auditors aremutually appointed (the director himself/herself only)
Executive of a company or organization that receives a donation from the Company (the director
himself/herself only)
Others-6-

(Translation)

External Directors’ Relationship with the Company (2) Updated
Name
Yasuo
Nishiguchi

HiroshiMatsuhisa

Designation as
Independent
Director
Yes

Yes

Supplementary Explanation of
the Relationship

Reasons of Appointment

Yasuo Nishiguchi had served as
the Representative Director of
KYOCERA Corporation which is
our client. The Company has
insignificant transactions withKYOCERA Corporation, andthere are no importance affecting
on the independence.
HANDY Co., Ltd., that he is
the Representative Director, andthe Company had entered into
advisory agreements to receive
guidance and advice on future
management policies, etc.
However, the contract was
terminated as of March 31, 2021.
Currently, he meets theCompany's criteria of
independence as an external
director established by theCompany, and there are noimportance affecting on the
independence.

Yasuo Nishiguchi has held such
positions as the President andRepresentative Director, and the
Chairman and Representative Director
at KYOCERA Corporation. Based on
his knowledge and experience ingeneral management cultivatedthrough prominent corporate positions,
we asked him to give the Company
advice and supervision of operations
from an independent position. Thus,
because we can expect to strengthen
the function of the Company’s Boardof Directors, the Company appointed
Yasuo Nishiguchi as External Directorof the Company.
He is appointed as an Independent
Officer of the Company because hemeets criteria of independence as anexternal officer established by theCompany and there are no risks ofconflicts of interest with generalshareholders.

The instruction contract
concerning R&D was entered into
between the Company andHiroshi Matsuhisa in the past, but
the Company had insignificant
transactions with him and there
are no importance affecting on the
independence.

Based on the specialized knowledge
by the person with academic standing
in engineering of Kyoto University, we
asked him to give the Company advice
and supervision of operations from an
independent position. Thus, because
we can expect to strengthen thefunction of the Company’s Board of
Directors, the Company appointed
Hiroshi Matsuhisa as External Directorof the Company.
He is appointed as an Independent
Officer of the Company because hemeets criteria of independence as anexternal officer established by theCompany and there are no risks ofconflicts of interest with generalshareholders.

-7-(Translation)

Reiko
Nakayama

Yes

The Company had insignificant
transactions with Mandom
Corporation, that Reiko
Nakayama was Outside Director,
and there are no importanceaffecting on the independence.

Based on her experience of
securities company underwriter, andmanagement executive officer andexternal officers of operatingcompanies, we asked her to give theCompany advice and supervision ofoperations from an independent
position. Because this will strengthen
the function of the Company’s Boardof Directors, the Company appointed
Reiko Nakayama as External Director.
She is appointed as an Independent
Officer of the Company because shemeets criteria of independence as anexternal officer established by theCompany and there are no risks ofconflicts of interest with generalshareholders.

Voluntary Establishment of Committee(s) Corresponding to Nomination
Committee or Remuneration Committee

Yes

Establishment of optional advisory committees, committee composition, and attributes of the chairperson
UpdatedCommittee members

Optional committee equivalent toNomination Committee
Nomination and Remuneration
Committee
5

Optional committee equivalent toRemuneration Committee
Nomination and Remuneration
Committee
5

Full-time members

00Internal directors

1

1

External directors

3

3External experts

00

Others11Chairperson

External Director

External Director

Committee

Supplemental Remarks Updated
The Nomination and Remuneration Committee has been established as an advisory body aiming to increase
the objectivity, appropriateness and transparency of the composition of the Board of Directors and thenomination and remuneration of Directors, etc. to link the medium- to long-term growth of the Company groupand increase its corporate value.
“1” in the “Others” is External Corporate Auditor.

-8-

(Translation)[Corporate Auditor]
Establishment of Board of Corporate Auditors
Maximum Number of Corporate Auditors Stipulated in Articles ofIncorporation
Number of Corporate Auditors

Established4
3

Cooperation among Corporate Auditors, Accounting Auditors and Internal Audit Departments
Regarding the cooperation among Corporate Auditors and Accounting Auditors, Corporate Auditors receive
the explanation about the audit plan of Accounting Auditors as well as reports on a review at the end of thequarter and the proceedings of the audit at the year-end audit.
As for results of the audit by the Internal Audit Office, Corporate Auditors also inspect the internal audit
reports and exchange opinions as necessary.
Full-time Corporate Auditor is voluntarily present at internal auditing and attends a briefing to the president
held by Internal Audit Office.
Appointment of External Corporate Auditors

Appointed

Number of External Corporate Auditors

2

Number of Independent Corporate Auditor

2

External Corporate Auditors’ Relationship with the Company (1) Updated
Name

Attribute

Relationship with the Company*
a

b

c

d

e

f

g

h

I

j
B

k

l

m

Hiroho Kamakura
CPA
Tetsuya Nonaka
Attorney* Categories for “Relationship with the Company”* “A” when the director presently falls or has recently fallen under the category;“B” when the director fell under the category in the past
* “C” when a close relative of the director presently falls or has recently fallen under the category;“D” when a close relative of the director fell under the category in the past
Executive of the Company or its subsidiaryNon-executive director or accounting advisor of the Company or its subsidiaries
Non-executive director or executive of a parent company of the Company
Corporate Auditor of a parent company of the Company
Executive of a fellow subsidiary company of the Company
A party whose major client or supplier is the Company or an executive thereof
Major client or supplier of the Company or an executive thereof
Consultant, accountant or legal professional who receives a large amount of monetary consideration orother property from the Company besides compensation as a Corporate Auditor
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is alegal entity)
j. Executive of a client or supplier company of the Company (which does not correspond to any off, g or h)(the Corporate Auditor himself/herself only)
k. Executive of a company, between which and the Company external directors/Corporate Auditors aremutually appointed (the Corporate Auditor himself/herself only)
l. Executive of a company or organization that receives a donation from the Company (the Corporate Auditor
himself/herself only)
m. Others
a.
b.
c.
d.
e.
f.
g.
h.

-9-

(Translation)

External Corporate Auditors’ Relationship with the Company (2) Updated

Name
HirohoKamakura

TetsuyaNonakaDesignation as
Independent
Corporate
AuditorYes

Yes

Supplementary Explanation of
the Relationship
Hiroho Kamakura is acertified public accountant andhad worked for the Company’s
Accounting Auditor Deloitte
Touche Tohmatsu LLC in thepast.
The Company has
insignificant transactions with
Deloitte Touche Tohmatsu
LLC, and there are noimportance affecting on the
independence.

Tetsuya Nonaka has no
special interests in the
Company.

[Independent Directors/Corporate Auditors]
Number of Independent Directors/Corporate
Auditors

5

Matters relating to Independent Directors/Corporate Auditors-[Incentives]
Incentive Policies for Directors

None- 10 -

Reasons of Appointment
Hiroho Kamakura was appointed
as External Corporate Auditor of theCompany because the specialized
knowledge as a Certified Public
Accountant in finance and accounting
is expected to be put to effective use
for the auditing operation. The
Company believes that this must help
strengthen the Company’s audit
competence.
He is appointed as an Independent
Officer of the Company because hemeets criteria of independence as anexternal officer established by theCompany and there are no risks ofconflicts of interest with generalshareholders.
Tetsuya Nonaka was appointed asExternal Corporate Auditor of theCompany because the specialized
knowledge as attorney and extensive
insight into corporate legal affairs is
expected to be put to effective use forthe auditing operation. The Company
believes that this must help
strengthen the Company’s audit
competence. Although he has noexperience for businessadministration directly, the Company
judges that he has the ability toperform duty properly as External
Corporate Auditor of the Company asmentioned above.
He is appointed as an Independent
Officer of the Company because hemeets criteria of independence as anexternal officer established by theCompany and there are no risks ofconflicts of interest with generalshareholders.

(Translation)

Supplementary Explanation[Director Remuneration] It is described in the section of Policy on Determining Remuneration Amounts andCalculation Methods.
Recipients of Stock Options
Supplementary Explanation-[Director Remuneration]
Disclosure of Individual Directors’ Remuneration

No Individual Disclosure

Supplementary Explanation Updated
The Company paid 189,380 thousand yen as remuneration to 8 Directors for the fiscal year ended March 2023.
Policy on Determining Remuneration Amounts andCalculation Methods Updated

Yes

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
At the meeting of the Board of Directors held on March 7, 2022, the Company resolved a policy for
determining the details of remuneration of individual Directors. The details to be decided were previously
discussed by the Nomination and Remuneration Committee in order to make such decisions at the meeting. The
Board has confirmed that the method and details of the decision on individual Director remuneration for thecurrent fiscal year have been considered in accordance with the relevant decision-making policy and that thedeliberations of the Nomination and Remuneration Committee have been respected, and has determined that thisremuneration in line with the relevant decision-making policy.
The remuneration of the Company's Directors consists of monthly remuneration, short-term performancebonuses, and medium-term performance and stock-price-linked bonuses. Monthly remuneration is determinedby Takayo Kotani, the Representative Director and President, who is delegated by the Board of Directors, basedon the evaluation of Directors determined through deliberation by the Nomination and Remuneration Committee,
within the maximum limit resolved by the General Meeting of Shareholders and within the monthly
remuneration range (upper and lower limits) for each position. In addition, with regard to the method of deciding
the indicators and the amount of performance-linked bonus, short-term performance bonuses are determined bymultiplying the base salary of the position by a performance coefficient based on the achievement of theconsolidated Ordinary profit, and by reflecting the overall contribution of the Directors based on target
management and qualitative assessment. The medium-term performance and stock-price-linked bonuses are
determined based on the base salary of the position, reflecting the medium-term performance coefficient basedon the growth rate of "Earnings Per Share (EPS)" and the stock price-linked coefficient based on the growth rateof the stock price. The makeup of the remuneration is determined by position with reference to the external
standards of the companies in the same industry and of the same size as the Company (the total of short-term
performance bonus and medium-term performance/stock-price-linked bonus is approximately 30%). The
remuneration of External Directors and Auditors consists of fixed remuneration. It is our policy not to pay
performance-linked remuneration in order to maintain independence in the conduct of business.
The remuneration of the Company's Directors was decided at the General Meeting of Shareholders held on
June 22, 2021. It was decided that the total remuneration for Directors would be within 700,000 thousand yen
per year (including the remuneration of External Directors, which is within 100,000 thousand yen) and that the
number of Directors at the end of the Meeting would be eight (8) (including three (3) External Directors.) The
remuneration of the Company's Auditors was decided at the General Meeting of Shareholders held on June 20,
2016. It was decided that the total remuneration for Auditors would be within 100,000 thousand yen per year
and that the number of Auditors at the end of the Meeting was four (4).
- 11 -

(Translation)

The main indicator of the performance-linked bonus in the current fiscal year is the consolidated Ordinary
profit. YUSHIN has adopted the indicators as they are important to YUSHIN Group, and should be consideredin both the short- and medium-term. (The indicator of the consolidated Ordinary profit, which is the mainindicator in the current fiscal year in terms of performance-linked remuneration, is 3,100,000 thousand yen, andthe actual amount is 2,787,011 thousand yen.)In addition, the amount of remuneration for Directors is determined by the Representative Director andPresident, who is delegated by the Board of Directors, based on the Director evaluation determined throughdeliberations by the Nomination and Remuneration Committee, which serves as an advisory body to the Boardof Directors. The authority of the Representative Director and President is to determine the amount of each
Director's monthly remuneration and the evaluation and distribution of bonuses based on performance. The
reason for the delegation is that the Company determined that Representative Director and President is the mostappropriate person to evaluate the duties of each Director in charge, while taking into consideration the
Company's overall performance and other factors. The Nomination and Remuneration Committee deliberates inadvance on important policies, and the Representative Director and President makes decisions on the delegatedmatters based on the Committee’s deliberations. The Company believes that this constitutes a measure to ensurethat authority is exercised appropriately. The Nomination and Remuneration Committee is chaired by Yasuo
Nishiguchi, External Director. The other members of the Committee are Takayo Kotani, Representative Director
and President, and Hiroshi Matsuhisa, External Director, and Reiko Nakayama, External Director, and Hiroho
Kamakura, External Corporate Auditor.
With regard to the activities and procedures of the Board of Directors and the Nomination and Remuneration
Committee in the process of determining the bonus of the Directors for the current fiscal year, the Board of
Directors has confirmed that the method and details of the decision on the individual remuneration of Directors
for the current fiscal year have been considered in accordance with the relevant decision-making policy and thatthe deliberations of the Nomination and Remuneration Committee have been respected.
The Company does not pay any non-monetary remuneration to Directors.

[Supporting System for External Directors and/or Corporate Auditors]
Regarding the information transfer to External Directors and Corporate Auditors, the system is establishedthat External Directors and Corporate Auditors can obtain information through reports filed with the monthlyheld Board of Directors meeting (monthly account settlement report, business reports from Directors and reports
from senior staff) as necessary.
Full-time Corporate Auditor also informs External Corporate Auditors details of significant internal meetings.
The Corporate Planning Office, etc. respond as needed to assist External Directors and External Corporate
Auditors.

- 12 -

(Translation)[Status of persons retired from Representative Director and President, etc.]
Names, etc., of advisors (“sodanyaku,” “komon,” etc.) who have formerly served as Representative
Director and President, etc. Updated

Name

Title/Position

Mayumi
Kotani

Honorary
Chairperson

Activity
Description
No businessconduct based oncontract.

Working Arrangement /Conditions（Full-time / Part-time,
Remuneration, etc.）
Remuneration - No

Total number of advisors (“sodanyaku,” “komon,” etc.) who have formerly
served as Representative Director and President, etc.

Date of
Retirement
From President,
etc.
June 22, 2021

Term of
OfficeNot
defined

1

Other Information-2.

Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System) Updated
The Company conducts its business on the basis that, in order to fulfill its fiduciary responsibility toshareholders, it must provide a stable management base, strive to improve return on equity, promote returns toshareholders through dividend increases and other means, and be accountable through appropriate disclosure.
(1) The Company has established the Nomination and Remuneration Committee as an advisory body to theBoard of Directors in order to enhance objectivity, appropriateness and transparency of the composition of
the Board of Directors and the nomination and compensation of directors, etc., which will lead to mediumto long-term growth of YUSHIN Group and improvement of corporate value. The Nomination andRemuneration Committee is chaired by Yasuo Nishiguchi, External Director. The Committee consists offour members in addition to the chairman. The members are three (3) Directors (two of them are External
Directors) and one (1) part-time auditor (who is External Corporate Auditor). The three (3) Directors are
Takayo Kotani, the Representative Director and President; Hiroshi Matsuhisa, External Director; Reiko
Nakayama, External Director. The part-time auditor is Hiroyasu Kamakura, External Corporate Auditor.
The Committee deliberates on the selection of candidates for Directors and Corporate Auditors and the
remuneration system for Directors, and submits reports or opinions to the Board of Directors.
(2) The Board of Directors is chaired by Takayo Kotani, Representative Director and President. The othermembers consist of eight (8) Directors (three (3) of whom are External Directors): Kota Oda, Director andExecutive Vice President; Yasushi Kitagawa, Executive Managing Director; Tomohiro Inano, Managing
Director; Masahito Fukui, Director; Yasuo Nishiguchi, External Director; Hiroshi Matsuhisa, External
Director; and Reiko Nakayama, External Director. In principle, the Board of Directors meets once a month,and extraordinary meetings are held as necessary. The Board of Directors determines the Company's
business execution policies and supervises the execution of duties by the directors. The Board of Directors
also deliberates on all important matters, discusses the progress of business performance, and examines
countermeasures. In addition, all corporate auditors attend the Board of Directors meetings, enabling themto monitor the directors' execution of the duties.
(3) The Company has adopted a board of corporate auditors system. The Board of Corporate Auditors consistsof one (1) full-time and two (2) part-time Corporate Auditors, two of whom are External Corporate
Auditors: Katsumi Noda, Full-time Corporate Auditor; Hiroyasu Kamakura, External Corporate Auditor;
and Tetsuya Nonaka, External Corporate Auditor. In addition to regular meetings of the Board of Corporate
Auditors, they hold extraordinary meetings of the Board of Corporate Auditors as necessary. Full-time
Corporate Auditor attends meetings of the Board of Directors and other important meetings, such as the
Executive Meeting, and express his opinions as necessary, thereby enabling him to constantly monitor the
Directors' execution of their duties. He also exchanges information and opinions with the Internal Audit
Office and the accounting auditor as necessary to improve the auditing function.
- 13 -

(Translation)(4) The Committee of Internal Control is an organization that facilitates internal control based on the “Basic
Policy for Internal Control System,” which is the basic policy for establishing a system to ensure that theexecution of duties by the Directors complies with laws and regulations and the Articles of Incorporation,and that other company operations are conducted properly. The Committee is chaired by Director Masahito
Fukui and attended by department heads appointed by the chairman. The Committee provides educationand guidance to each division, department, and the group companies on group-wide compliance, risk
management, information management, and operational efficiency.
(5) The Sustainability Committee is chaired by Takayo Kotani, Representative Director and President. The
other members of the committee consist of four (4) Directors (including zero (0) External Directors) and 1
Executive Officer, for a total of five (5) members: Kota Oda, Executive Vice President; Yasushi Kitagawa,
Executive Managing Director; Tomohiro Inano, Managing Director; and Mitsuharu Hamahata, Executive
Officer. The activities of the committee are to formulate a basic policy on sustainability, promote measuresin line with the basic policy, report the results to the Board of Directors, and announce the results to the
public.
(6) The Executive Meeting is chaired by Takayo Kotani, Representative Director and President. The othermembers consist of five (5) Directors (including 0 External Director), one (1) Full-time Auditor, and three(3) Executive Officers, for a total of nine (9) members: Kota Oda, Director and Executive Vice President;
Yasushi Kitagawa, Executive Managing Director; Tomohiro Inano, Managing Director; Masahito Fukui,
Director; Katsumi Noda, Full-time Corporate Auditor; Naoki Tsuji, Executive Officer; Miki Murata,
Executive Officer; and Mitsuharu Hamahata, Executive Officer. The Executive Meeting meets once a week
in principle. It deliberates on proposals and progress reports on important management matters, anddiscusses, decides, and manages policies and plans for business execution.

3.

Reasons for Adoption of Current Corporate Governance System Updated
The reason for adopting this system is to ensure that the Board of Directors, composed of directors with a highlevel of expertise and a wealth of experience, decides the Company's business execution policies and ensuresthat all business execution is carried out appropriately and smoothly. The Company has a single business, andconsidering the current size of business, the Company believes that the current system, which enables prompt
decision-making and flexible business execution by a small number of directors, is reasonable. In addition tothis, this system ensures that management is well monitored through rigorous audits by the Board of Corporate
Auditors, which includes External Corporate Auditors with a wealth of expertise.

III. Implementation of Measures for Shareholders and Other Stakeholders
1.

Measures to Vitalize the General Meeting of Shareholders and Smooth Exercise of Voting Rights
UpdatedSupplementary Explanations
Early sending out of convocation notices for YUSHIN is working to send out the notice of convocation for
the general meeting of shareholders
the Ordinary General Meeting of Shareholders earlier than thelegal fixed date.
Setting up GMS* during off-peak times
GMS are held during off-peak times.
Electronic voting
Shareholders can exercise their voting rights via the Internetby accessing from their computer or smartphone.
Participation in the Electronic Voting
YUSHIN uses a voting platform for institutional investors.
Platform system and other efforts to improvean environment in which institutional
investors can exercise their voting rights
Providing Convocation Notice in English
The convocation notice in English is available at theCompany’s website in English.
The convocation notice is posted on the Company's website
Otherand sent to shareholders. At the General Meeting of
Shareholders, a presentation is made using a video projector,
together with an explanation of the documents attached to the
convocation notice.
*General Meeting of Shareholders- 14 -

(Translation)

2.

IR Activities Updated
Supplementary Explanations

Explanation byRepresentative

Preparation and Publicationof Disclosure Policy

Regular Investor Briefings
for Individual Investors
Regular Investor Briefings
for Analysts andInstitutional Investors
Regular Investor Briefings
for Overseas Investors
Posting of IR Materials on
WebsiteEstablishment of
Department and/orManager in Charge of IR

3.

The Company establishes and states the basic policy for
information disclosure, manner of timely disclosure, silent
period, third-party disclosure and financial forecast andpositioning of information disclosure at IR information siteon the website.
The Company participates in briefings for individual
investors hosted by securities firms or consulting firms atleast twice a year.
The Company holds financial results briefings and second
quarter financial results briefings online. The Company isavailable for regular visits by analysts and institutional
investors, as well as for telephone and web-based interviews
as needed.
The Company individually holds meetings with overseas
investors mainly in the United States, the United Kingdom,Hong Kong and Singapore, etc.
Financial Results (in Japanese and English), Investor
Presentation Material (in Japanese and English), Business
Reports for Shareholders (in Japanese), Integrated Reports(in Japanese and English), Notice of Convocation for theOrdinary General Meeting of Shareholders (in Japanese andEnglish), and Corporate Governance Report (in Japanese andEnglish) are posted on the website.
The Corporate Planning Office, which reports directly to theRepresentative Director, is in charge of IR.

No
Yes

Yes

Measures to Ensure Due Respect for Stakeholders Updated
Supplementary Explanations
Stipulation of Internal Rules for
It is included in the business philosophy.
Respecting the Position of Stakeholders
Implementation of Environmental
See [Supplementary Principle 3-1-3: Sustainability] above.
Activities, CSR Activities etc.

IV. Matters Related to the Internal Control System
1.

Basic Views on Internal Control System and the Progress of System Development
The Company has established the Basic Policy for Internal Control System for the purpose of developing asystem to ensure that the performance of duties by Directors complies with laws and regulations and the Articles
of Incorporation, and other systems to ensure the properness of the Company's operations (Board of Directors
Resolution dated June 12, 2015). The main points of the Basic Policy are as follows.
1.

System to ensure that business execution of Directors and employees complies with laws and regulations
and the Articles of Incorporation
The Company raises the awareness for and holds training on legal compliance to increase awareness ofcompliance as well as establishes “Whistle-Blowing Regulations” providing the procedure for reporting
violations.

2.

System for keeping and managing the information on business execution of the Company’s Directors
Information is kept and managed according to laws and regulations, and internal regulations (including“Document Regulations,” “Contract management rules,” “Internal Information Management Regulations,”“Basic policy on information security,” “Information System Management Regulations,” “Personal- 15 -

(Translation)

3.

Information Management Regulations,” “Personal Information Protection Policy (Privacy Policy)” and“Regulations for the Proper Handling of Specific Personal Information,” etc.).
Regulations on and other systems for risk management of losses of the Company and its subsidiaries
Risk of currently estimated losses is managed by setting a committee and making discussion according
to degree of its significance. Events delivering losses to the Company would be reported to Directors andCorporate Auditors by the Executive in charge and discussed and managed by all executives.

4.

System to ensure effective business execution by Directors of the Company and its subsidiaries
Effective business execution by Directors is ensured by followings:(1) The Board of Directors determines significant matters and oversees business execution by Directors.
(2) Information is shared among Directors, Executives, and Corporate Auditors at executive meetings.
(3) Notice of significant matters on management, understanding of status and business instructions are
conducted at management meetings and YSM management conference.
(4) The information about the Company and subsidiaries are shared at the subsidiary meeting, andsignificant matters are discussed in the Board of Directors to solve issues.

5.

The systems to ensure appropriate works of the corporate group consisting of the Company and its
subsidiaries, and to make reports to the Company on matters concerning business execution by Directorsof subsidiaries
The Internal Control System is developed as “Subsidiaries Management Regulations” obligate
subsidiaries to make periodic reports relating to business results, fiscal conditions and other significant
information of subsidiaries.
The information about the Company and subsidiaries are shared at the subsidiary meeting, andsignificant matters are discussed in the Board of Directors to solve issues.

6.

System to ensure effective Corporate Auditors’ audit
Corporate Auditors attend the Board of Directors Meetings and required significant meetings including
management conference as well as read major approval documents and other significant documents
concerning business execution and receives explanation from Directors and employees of the Company
and Directors of subsidiaries as necessary.

7.

System on employees assisting works of the Company’s Corporate Auditors when Corporate Auditors
require allocation of the assisting employees
Employees assisting the work of the Company’s Corporate Auditors can be allocated as staff as necessary.
Corporate Auditor has the authority to give instructions and orders to the staff.

8.

System to ensure that those reporting to Board of Corporate Auditors and Corporate Auditors, etc. are notunfavorably treated for the reason of the report
The Company ensures that executives and employees reporting to Board of Corporate Auditors andCorporate Auditors are not treated unfavorably because of the report and thoroughly inform the whole
company of this. In the “Whistle-Blowing Regulations,” it is prescribed to prohibit dismissal and give otherunfavorable treatment for the reason of the report.

9.

Matters on the policy for dealing with expenses or debts resulting from business execution of theCompany’s Corporate Auditors
The Company, when Corporate Auditors require the Company to make advance payment in respect ofbusiness execution according to Article 388 of the Companies Act, immediately deals with the relevant
expenses and debts unless it is considered unnecessary to make advance payments.

In order to improve the effectiveness and efficiency of operations, to ensure reliability of financial reports,
and to expansively develop the operations of the internal control system aimed at securing assets and complianceto laws and regulations pertaining to business activities according to the Basic Policy for Internal Control System,
the Internal Control Regulations and the Committee of Internal Control Operations Regulations have beenenacted.
The scope of responsibility of the Board of Directors and Corporate Auditors as well as the system for
implementation and details of activities for executives and employees, and the procedures for evaluation andreporting were clarified in the Internal Control Regulations. Furthermore, basic policy on the maintenance andoperation of Internal Control is formulated. The structure of the committee aimed at facilitating internal control- 16 -

(Translation)

as well as how to promote its mission and activities were clarified in the Committee of Internal Control
Operations Regulations, and the activities are promoted.

2.

Basic Views on Eliminating Anti-Social Forces
The Company assumes a resolute attitude to anti-social forces threatening order and security of civil society
as well as closely exchanges information and cooperates with the relevant specialized agencies including police
against anti-social forces and thoroughly informs employees of the above policy.

V. Others
1.

Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not Adopted

Supplementary Explanation-

2.

Other Matters Concerning to Corporate Governance System<Timely Disclosure System>
1. Basic Policy on Information Disclosure
The Company strives to maintain its established system of proactive and fair disclosure of information toshareholders, investors, and other stakeholders.
2.

Information Disclosure Policy and Internal System
The Company adopts the following policies and internal system as the basis for information disclosure.
(1) Company information to be discloseda) Information required to be disclosed in accordance with the Financial Instruments and Exchange
Act and the Timely Disclosure Regulations set by the Tokyo Stock Exchange (decisions,
incidents and financial information)b) Information other than a) above considered to have a significant influence on investment
decisions(2) Disclosure procedurea) Procedure concerning decisions and incidents
For decisions and incidents, the Accounting Department, General Affairs Department, or otherdepartment in charge prepares the materials necessary for disclosure. Upon completion ofinternal procedures, including approval by the Board of Directors, the disclosure of information
will be carried out by the Information Manager or the Disclosure Manager.
b) Procedure concerning financial information
For financial information, the Accounting Department prepares the materials necessary fordisclosure. Upon completion of internal procedures, including approval by the Board of Directors,
the disclosure of information will be carried out by the manager of corporate management
department.
(3) Methods of disclosure
Information will be disclosed through registration with the TDnet Company Announcements
Distribution Service of the Tokyo Stock Exchange as well as through the Company’s website and via
other applicable means.
(4) Inquiries following disclosure
Disclosure-related inquiries will be handled by the Information Manager or the Disclosure Manager.

3.

Improvements on Monitoring of the Timely Disclosure System
Through periodically implemented audits by corporate auditors, internal audits, and external audits, theCompany aims to ensure the appropriateness of information disclosure contents, information disclosure
procedures, and other related aspects.

- 17 -

(Translation)

Corporate Governance Structure- 18 -