CORPORATE GOVERNANCE REPORTTokyo Seimitsu Co., Ltd

Last update: March 26th, 2024
Tokyo Seimitsu Co., Ltd
Ryuichi Kimura, President & COO
Inquiry: Koichi Kawamura, Executive Vice President and CFO
Code Number:7729
https://www.accretech.com/

The corporate governance of Tokyo Seimitsu Co., Ltd (the Company) is described below.

I. Policy on Corporate Governance, Capital Structure, Corporate Profile andOther Basic Information
1.

Corporate Governance Philosophy

Tokyo Seimitsu’s philosophy is “Growing together with partners and customers by collaborating
technology, knowledge and information to create the world’s No.1 products.” The Group seeks to achievesustainable growth and an increase of corporate value in a context of rapidly innovating technology and a
globalized economy – as reflected in its corporate brand “ACCRETECH”. To realize this goal, the Group
believes that strong corporate governance is essential to improving corporate value and conducting fair andtransparent business activities as a global corporate citizen, and has established the following five (5) corepolicies for corporate governance.
(*)ACCRETECH is a term coined by the Company, combining ACCRETE, meaning “to grow together,” andtechnology.
<Core Policies>
1. The Board of Directors strives to properly perform its roles and responsibilities to make transparent, fair,timely and committed decisions.
2. The Group respects the rights of shareholders and ensures the equality of shareholders.
3. The Group strives to have constructive dialogue with shareholders on investment policy that considers mid
to long-term returns for shareholders.
4. The Group strives to maintain appropriate collaboration with stakeholders other than shareholders.
5. The Group strives to ensure proper information disclosure and transparency.

[Reasons for Not Implementing the Respective Principles of the Corporate Governance Code]
The Company implements all principles of the Corporate Governance Code as revised in June 2021
(including those for the prime market).
[Disclosure Based on the Principles of the Corporate Governance Code] UPDATED
The information below is based on the Corporate Governance Code as revised in June 2021 (all principles,
including those for the prime market).
[Principle 1.4 Cross-Shareholdings]
1. Policy regarding cross-shareholdings
The Board of Directors shall comprehensively examine whether shares held as cross-holdings areworthwhile based on risk and return from perspective of mid to long-term economic rationality, andqualitative considerations such as purpose of holding and credit status. Shares held as cross-holdings thatare not considered worthwhile to be retained, as a result of the examination, shall be reduced in principle.
However, if it is determined that holding of such shares will contribute to the improvement of the mid tolong-term corporate value, they shall be retained.
As a result, the Company has sold 18 brands of cross-shareholdings (including shares subject to deemedholding) for 8,383 million yen from April 2015 to March 2024.
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

2. Policy regarding the exercise of voting rights
The Company shall exercise voting rights associated with cross-shareholdings after sufficientconsideration of each specific proposal based on concrete criteria.
[Principle 1.7 Related Party Transactions]
1. The Company shall not be engaged in any transactions with Directors and/or major shareholders that may
damage the interests of the Company or the common interests of the shareholders.
2. When a Director is intending to enter into a transaction with the Company for him/herself or for any third
parties, the Director shall obtain prior approval of the Board of Directors according to the rules of theBoard of Directors, and report important facts in that transaction at the board meeting. Terms andconditions for the transaction may be determined in the same manner as a transaction with third parties.
3. To identify any transactions involving a conflict of interest by Directors, the Company checks existenceof such transaction (excluding compensation) between the Company Group and Directors or their family
members within the second degree of kinship.
4. When the Company is intending to enter transactions between the Company and major shareholders orother related parties, then it shall be approved in advance by personnel with authority commensurate with
the importance and scale of the transaction in accordance with internal regulations determined by the
Board of Directors.
[Supplementary Principle 2.4.1 Policies and Goals for Ensuring Diversity in the Promotion to Core
Human Resources]
1. Policies for ensuring diversity
The Company Group believes that diverse perspectives and ideas stimulate each other to create newvalue and achieve synergies that exceed the sum of individual abilities. To this end, we prevent all
discriminatory acts on the basis of age, gender, race, religion, national origin, disability, etc., and strive torealize a workplace where diverse human resources can work in safety and health. The Company also
strives to create a workplace where diverse human resources can work in a safe and healthy environment,
where each employee's individuality is respected, where they can maximize their abilities, and where
they can work with a sense of fulfillment.
2. Goals and progress on ensuring diversity(1) Promotion of women to management positions
The Company believes that it is important to increase the number of full-time female employees
who will play an active role as core human resources in the medium to long term. Since FY2022/3,
the Company has been working to increase the number of full-time female employees and improvethe environment by setting a target of 20% women as a percentage of all full-time hires (18.3% in
FY2023/3) and 10% women as a percentage of all full-time employees (8.5% as of March 31, 2023).
In addition, the percentage of women in management positions at the Company is 2.4%..
(2) Midcareer hires and Promotion of foreign nationals
The Company’s midcareer hires have already become an indispensable asset to the Company, andthe Company hires and promotes excellent human resources regardless of nationality. Bothmidcareer hires and foreign nationals have demonstrated their ability to bring diverse perspectives
and ideas, and to work closely with overseas stakeholders. The ratio of foreign employees inmanagerial positions is 1.4%, and the ratio of midcareer hires is 42.9%.
3. Policies for human resource development, internal environment development, and these progresses toensure diversity
In order to create the world's No. 1 products through WIN-WIN work, the Company Group believes it
is necessary for each and every employee, our group's greatest asset, to accept diverse values, draw out
each other's strengths, and grow autonomously.
To support the growth of our employees, the Company Group provide educational and training
programs and other opportunities for them to take on new challenges in the workplace, and we areworking to create a workplace environment in which diverse human resources can feel fulfilled in their
work.
<Educations and Trainings ensure diversity >Woman’s career design training / e-learning (promotion of diversity) / Human resource development
skills training for managers, including diversity promotion
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

In addition, to support employees who are raising children or caring for family members, the Company
has established a leave system that far exceeds the legal requirements, as well as a long vacation system
to promote work-life balance.
Detail of the Human Resource Development Policy and the Company’s actions for ensuring diversity isin the Company’s website as linked below.
(Japanese)
https://www.accretech.com/jp/sustainability/esg/humanresources.html
https://www.accretech.com/jp/sustainability/esg/diversity.html(English)https://www.accretech.com/en/sustainability/esg/humanresources.html
https://www.accretech.com/en/sustainability/esg/diversity.html[Principle 2.6 Roles of Corporate Pension Funds as Asset Owners]
1. The Company has established a defined benefit pension plan and a defined contribution pension plan.
2. For the defined benefit pension plan, asset management policy and policy asset mix shall be determined tomaximize the benefit to employees.
3. Human resources with appropriate qualifications shall be assigned to the department responsible for thepension plans and their expertise shall be consistently improved through training such as periodic
participation at external seminars.
4. With respect to the selection and evaluation of asset management contractors, objective monitoring shallbe carried out in consideration of the response to the stewardship code and investment performance to
avoid conflicts of interest with employees.
5. Until February 2024, the Company held Investment Performance Committee eleven(11) times and revised
the expected rate of return for the defined benefit pension plan, revised the product lineup for the defined
contribution pension plan. Also, the Company confirms the deviation of assets under management for thedefined benefit pension plan from the policy asset mix and rebalances them.
[Principle 3.1 Full Disclosure]
1. Company philosophy, business strategies and business plans
The Group’s philosophy is “Growing together with partners and customers by collaborating technology,
knowledge and information to create the world’s No.1 products.”, and the Group has adopted as acorporate motto "Win-Win Relationships Create the World's No. 1 Products." and a corporate brand“ACCRETECH”. The Group is striving to maintain an effective structure that is capable of creatingworld-leading products.
For the mid-term business plan, please refer to the Earnings Conference document released on May 10th,
2022, titled “FY2022/3 Earnings and Mid-Term Business Plan for FY2023/3-FY2025/3”(Japanese)
https://www.accretech.com/jp/ir/library/presentation/main/0110/teaserItems1/06/linkList/00/link/BR_202
2_4q_J.pdf(English)https://www.accretech.com/en/ir/library/presentation/main/03/teaserItems1/07/linkList/0/link/BR_2022_
4q_E.pdf
2. Views and guidelines on corporate governance based on each of the principles of the Code
Please refer to [1.Corporate Governance Philosophy] above.
3. Board policies and procedures in determining the compensation of management executives and directors(1) Aims and structure of Remuneration Policy(i) The compensation scheme to reward senior management is designed to ensure that it functions
as an incentive system to make the corporate motto into reality.
(ii) Compensation shall be in accordance with the roles and responsibilities of each director as wellas the results achieved by them.
(iii) Compensation shall be conducive to motivation for improvement of business results andmedium to long-term corporate and shareholder value.
(iv) Compensation shall be revised in a timely and appropriate manner based on the economic
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

situation, business results of the Parent Company, external survey results, etc.
(v) And the decision-making process shall be highly objective and transparent.
(2) Compensation structure(i) The compensation of Directors not serving as an Audit and Supervisory Committee member nor
external corporate director (hereinafter referred to as Directors in charge of business execution)
shall consist of "base compensation", which is fixed, "performance-linked compensation" and“stock compensation” that are variable.
(ii) The compensation of Directors serving as an Audit and Supervisory Committee member andexternal corporate directors shall consist only of base compensation, in light of their
responsibilities of supervising and auditing business execution.
(iii) Base compensation to the directors is paid regularly every month. The compensation of
Directors, a total annual amount of base compensation and performance linked compensation
shall be determined not to exceed the upper limit approved by the general meeting ofshareholders. Base compensation amounts for each director is based on standard ofcompensation amount (*1) per post.
(*1: standard of compensation amount is the amount per each director’s post planned by Compensation Planning
Committee benchmarked on one for President ＆COO , and approved by Nomination and Compensation Council).

(iv) Performance-linked compensation to the Directors in charge of business execution is defined as
short-term compensation based on business performance and paid at a specific period in each
Fiscal Year. Total amount of base compensation and performance linked compensation shall be
determined not to exceed the upper limit approved by the general meeting of shareholders. The
performance linked compensation amount per each Director in charge of business execution
shall be calculated as follows.
Performance-linked compensation amount per each Director =(Base bonus amount (*2) ) x (Group Business performance coefficient (*3)) x (EachIntercompany performance coefficient (*4))(*2) :Base bonus amount = Consolidated net profit * 1% * Base compensation coefficient
Base compensation coefficient = ratio of base compensation per each director, divided by total amount basecompensation of Directors in charge of business execution(*3) Group Business performance coefficient = Calculated from their Operating profit results against FY target
Within +/- 10% from target: 1, +10% to +30%: 1.1, +30% to +50%:1.2, over +50%: 1.3,
-30% to -10%: 0.9, -50% to -30%:0.8, -50% or less:0.7 (when OP downs YoY, this coefficient will be less than 1)(*4) Each Intercompany business performance coefficient: Comprehensively evaluate from 0.9 to 1.1 based on
the Intercompany business results and other significant achievements.

(v) Stock compensation is defined as a medium to long-term incentive enabling profit sharing withshareholders and will be provided at specific period in each Fiscal Year. This stockcompensation shall be determined not to exceed the upper limit (limit of compensation amountand number of stocks and/or of stock option). Stock compensation to Directors in charge ofbusiness execution consisting of Restricted Stock and SSR (Share subscription rights) (stockcompensation type) shall be calculated as follows.
a) Calculation formula for Restricted Stock: = Base stock amount (*5) x Capital efficiency
coefficient (*6) x ESG coefficient (*7) x RS performance coefficient (*8)b)(*5) Base bonus amount: Formulated by Compensation Committee based on compensation amount per post,
and approved by Nomination and Compensation Council(*6) Capital efficiency coefficient: Most recent three (3) Fiscal years’ average consolidated ROE – Above
15%: 1.2, 10-15%:1, and below 10%: 0.8(*7) ESG coefficient: Evaluation of initiatives for ESG activities (0.9 to 1.1 by the Nomination andCompensation Council)(*8) RS performance coefficient: one based on the achievements of mid-term operating profit target
Core coefficient: 1, When target has been achieved: 2

Calculation formula for SSR (stock compensation type) = Basic stock unit (*9) x
Performance coefficient and others (*10)(*9) Base stock unit: Formulated by Compensation Committee based on compensation amount per post, andapproved by Nomination and Compensation Council(*10) Performance coefficient and other: Formulated by Compensation Committee comprehensively based on
business performance, stock price, and other factors, and approved by Nomination and Compensation Council(3) Process to Determine Amount of Compensation(i) The Board of Directors delegates the task of determining the compensation structure and4 of 22

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

compensation standards for each post to the Compensation Planning Committee, consisting of
the representative directors and some other directors.
(ii) To ensure transparency and objectivity, the proposal of Directors’ compensation amounts andrelated matters (such as compensation amount per post), and the amount for each directors’ basecompensation, performance-based compensation and stock compensation shall be deliberated by
the Nomination and Compensation Council, consisting of directors serving as an Audit andSupervisory Committee member and external corporate directors.
(iii) Compensation amounts for directors serving as Audit and Supervisory Committee members will
be discussed and resolved among directors serving as Audit and Supervisory Committee
members.
4. Board policies and assignment and dismissal of management executives and nomination of candidates for
directorships(1) Candidates for management executives’ roles such as CEO, COO and CFO as well as candidates for
Director roles shall have high dignity, moral standards and deep insights regardless of individual
attributes such as gender and nationality, and must be deeply versed in business management and thebusiness of the Company or have abundant experience in their field of expertise.
(2) In principle, assignment of management executives and nomination of candidates for directorships
shall be first proposed by the CEO and brought to the Nomination and Compensation Council, then,the Board of Directors meeting will deliberate on this proposal with opinions of the Nomination andCompensation Council. If a candidate is to be serving as an Audit and Supervisory Committee
member, approval from this Committee becomes a prerequisite. The Board of Directors resolves
nominating and/or assigning appropriate candidates who are capable to respond to the mandate fromshareholders.
(3) If a management executive acts in violation of laws and regulations and the articles of incorporation,
significantly damages the corporate value and integrity of the Company, and/or demonstrates his/herability, motivation and/or performance is inappropriate, then the Board of Directors shall consider
the dismissal or removal of such an executive upon advice from the Nomination and Compensation
Council.
(4) Candidates for external corporate directorships shall be able to oversee management from an
independent viewpoint and provide guidance on the activities of the Company based on their broad
experience and deep insights.
(5) To ensure continuity and stability of the Board of Directors, a mass election of new director
candidates at one time shall be carefully considered and/or avoided.
5. Explanations with respect to the individual appointments/dismissals and nominations
Director candidates (including management executives) name, background, and a reason for nomination
are stated in the reference document of the shareholder meeting.
(Japanese)
https://www.accretech.com/jp/ir/stock/meeting/main/08/teaserItems1/02/linkList/01/link/pdfFile.pdf(English)https://www.accretech.com/en/ir/stock/meeting/main/07/teaserItems1/01/linkList/00/link/pdfFileE.pdf
If a management executive is being dismissed, adequate explanation for the dismissal shall be given in
the document, including reference documents for the shareholder meeting, which the law and/or
regulation requires.
[Supplementary Principle 3.1.2 Disclosure Documents in English]
In order to provide fair information to overseas stakeholders, the Company Group discloses information in
English, including Timely disclosure materials, Financial Statements, Earnings conference materials, Annual
Securities Report, Sustainability Report, and Integrated Report.
[Supplementary Principle 3.1.3 Initiatives on Sustainability]
The Company aims to realize a sustainable society by promoting cooperation with all stakeholders basedon its corporate philosophy. In the midst of a drastically changing corporate environment, the Company has
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

established the Sustainability Policy and the Sustainability Committee and is working to resolve issues for thesustainable growth of our company and society.
1. Investment in human capital
The Company has established career paths for each of the following job categories: engineering, sales,
manufacturing, service, and management.
 Provide an environment and opportunities (platform) for each employee to participate based on his
or her own initiative Provide support for employees to acquire the necessary knowledge according to the timing of their
growthThe Company is working on human resource development based on the above concepts.
Detail of the investment in human capital are stated in the Company’s website as linked below.
(Japanese)
https://www.accretech.com/jp/sustainability/esg/humanresources.html(English)https://www.accretech.com/en/sustainability/esg/humanresources.html
2. Investment in Intellectual Property
 The Company formulates IP strategies appropriate to each business strategy and strive to contributeto the improvement of business competitiveness (pricing power), leading to higher profit margins.
 The Technology and Intellectual Property divisions regularly share market and intellectual property
information to obtain IP landscape information to create new business areas and create cutting-edge
technologies in existing business areas.
 The Company applies patent maps to understand the status of patents held by our own and othercompanies in our business areas, and by acquiring rights in necessary and effective technologicalareas, the Company strives to improve our business competitiveness (pricing power) to increase
profit margins and strengthen the continuity of our business activities.
 The Company is also working to increase the effectiveness of our investment in intellectual property
by assessing the value of each of our patents and taking stock of our asset holdings according to theweight of our business.
 The Company is actively investing in the development of products that utilize leading-edge
technologies and in the development of elemental technologies to cultivate the seeds of futuretechnologies. A number of patent rights held have increased by an average of more than 10% yearover-year during the previous mid-term target period and current mid-term business planconsecutively.
 The Company reports its Intellectual Property strategy at semi-annual meetings attended by thepresident and all directors, and simultaneously, the Company reports progress monthly
 In the development of new products, the Company also conducts verification from the patent
perspective by Intellectual Property division as part of our design review.
 As stipulated in the "ACCRETECH Group Code of Conduct”, the Company respects, protects, andproperly manages own intellectual property rights, and respects others’ intellectual property rights,
and take swift and decisive action against infringement or misuse of own intellectual property rights.
 In order to stimulate intellectual creative activities and ensure the protection of intellectual property,
the Company awards to departments and individuals who have applied for a large number of patents
and provides incentives for employee inventions. In addition, the Company provides opportunities
for successful development cases to be presented to all engineers by those who have contributed tothe success of the project, so that they can share the hardships and setbacks that led to their successand how they overcame them, thereby motivating development and bringing about new successful
cases.
3. Initiatives on Climate Change The Company considers climate change not only as the cause of major risks for society such astemperature rises, extreme natural disasters, but also as a significant threat to our business. On theother hand, the Company believes that addressing climate change issues can make the Company
stronger and products more competitive, offering opportunities to expand the Company’s business.
Information on business, strategic, and financial risks and opportunities, risk management status,
and related indicators and targets, are being disclosed as linked below.
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

(Japanese)
https://www.accretech.com/jp/sustainability/esg/tcfd.html(English)https://www.accretech.com/en/sustainability/esg/tcfd.html[Supplementary Principle 4.1.1 Specification of Its Own Decisions and the Scope and Content of the
Matters Delegated to Management]
In order to respond to the mandate from shareholders, the Board of Directors determines material mattersrequired by laws, regulations and the articles of incorporation and those pertaining to management, including
business plans, development and investment plans, as well as establishment and investment in subsidiaries,
and monitors the director’s business execution. For any matters which are not on the Board agenda,
substantial authority shall be delegated to the heads of internal companies within the scope of duties andauthority determined by internal regulations to accelerate decision making. The Company holds executive
officer meetings to discuss/share information for effective Company-wide deliberation and establishes
Company-wide committees such as the Risk Management, and Compliance Committees to examine andmonitor important issues from multiple angles and make proper decisions.
[Principle 4.9 Independence Standards and Qualifications for Independent External Corporate
Directors]
The Company has established an Independence Standard for independent external corporate directors. For
details, please refer to Ⅱ. 1. [Independent Directors] Other Information about Independent Directors.
[Supplementary Principle 4.10.1 Approach, Authority, and Role Regarding the Independence of theComposition of the Nomination and Compensation Council]
Please refer to Ⅱ. 1. [Voluntary committees] below.
[Supplementary Principle 4.11.1 Composition of the Board of Directors]
1. The Board of Directors shall consist of an appropriate number of members to allow substantial argument
and examination as well as prompt decision making, and in order to ensure the effectiveness of theBoard, appointment of Directors shall consider the balance of members in terms of proper risk control,
supervision of business execution and functions/divisions to be covered and shall comprehensively
examine such perspectives as diversity, knowledge, experience and competence.
2. The Board shall be inclusive at least one third (1/3) of external corporate directors in total, to reflect theopinions of external experts in business management and/or academic research in the management of theCompany. External corporate directors shall be independent external corporate directors who shall satisfy
the separately established criteria of independence.
3. The Audit and Supervisory Committee, as an independent organ, audits and supervises the state of thebusiness execution of directors not served as an Audit and Supervisory Committee members.
(1) Constitution of the Audit and Supervisory Committee
Number of Audit and Supervisory Committee members shall be in appropriate, five (5) or less, andover a half shall be independent external corporate directors those who shall satisfy the separately
established criteria of independencies. In addition, at least one (1) member shall be the one those
who have considerable expertise of finance and accounting.
(2) Regular Meetings with the Representative Directors
To deepen mutual understanding between them, the Audit and Supervisory Committee shall haveregular meetings with the Representative Directors and exchange opinions such as issues that theCompany must address, auditing circumstances by the Committee, and other significant issues inauditing, and if necessary, request decisions.
4. The composition of the Board of Directors (Skills Matrix) is shown at the reference document of theshareholder meeting. The notices of the shareholder meeting are being disclosed as linked below.
(Japanese)
https://www.accretech.com/jp/ir/stock/meeting/main/08/teaserItems1/02/linkList/01/link/pdfFile.pdf(English)https://www.accretech.com/en/ir/stock/meeting/main/07/teaserItems1/01/linkList/00/link/pdfFileE.pdf
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

[Supplementary Principle 4.11.2 Status of Concurrent Directorship at Other Listed Companies]
From the viewpoint of fiduciary duty, when the Company’s directors concurrently assume directorship at
any other listed company, it shall be limited to a reasonable scope to secure necessary time to perform duties
as a Director of the Company. Significant concurrent positions held by Directors shall be disclosed annually,such as through the annual business report and/or the shareholder meeting reference material.
[Supplementary Principle 4.11.3 Outline of Analysis for the Effectiveness of the Board of Directors]
An outline of effectiveness evaluation results are detailed in the news releases linked below.
(Japanese)
https://www.accretech.com/jp/ir/news/news-726152100920192.html(English)https://www.accretech.com/en/ir/news/news-010283749103836.html[Principle 4.14 Director Training]
Supplementary Principle 4.14.2 Plan for director training
Newly appointed internal corporate directors shall be given external training opportunities to learn andunderstand the roles and responsibilities of managers including legal aspects.
External corporate directors shall be given briefing of business outlines and/or functions prior of his/her
assignments to allow he/she to play their excepted roles. In addition, when necessary, an opportunity to visit
plants, offices, and subsidiaries of the Company shall be provided.
Incumbent Directors shall be given the opportunity to attend external training programs and be able toattend relevant additional programs as they request.
The expenses of any training programs described above shall be borne by the Company.
[Principle 5.1 Policy for Constructive Dialogue with Shareholders]
The Company shall establish a framework and take measures to promote constructive dialogue withinvestors including shareholders, which are considered beneficial to sustainable growth and mid to long term
improvement of its corporate value, based on the following policies:
1. Dialogue with shareholders shall be overseen by the Director in charge of IR, who shall pursue
constructive dialogue through such means as holding Earnings Conferences and/or IR meetings.
2. Management Support Dept. IR Team, shall support the Director in charge of IR in collaboration withrelated divisions and share IR information to determine IR directions and create documents fordisclosure.
3. In addition to holding Earnings Conference for investors and analysts, the Company expands
opportunities for dialogue by holding 1 on 1 meetings, participating in conferences moderated by
securities firms, and holding overseas roadshows.
4. In FY2024/3, the Company plans/proceeds Earnings conferences, 1 on 1 meetings, Conferencesmoderated by securities firms, Overseas roadshows, and Seminar for individual investors, and 1 on 1
meetings to exchange opinions with shareholders and investors. The QA summaries at earnings
conferences are available on the Company's website.
(Japanese)
https://www.accretech.com/jp/ir/library/presentation.html(English)https://www.accretech.com/en/ir/library/presentation.html
5. Information and opinions obtained through constructive dialogues with shareholders are collected as
appropriate and reported regularly at meetings such as the Board meeting and Executive Officers andother meetings and shared to relevant divisions as appropriate. In addition, the Company is striving topromote shareholders' understanding by reflecting matters of common interest in dialogue, such as theassumptions underlying earnings forecasts, in our financial results presentation materials.
6. The Company shall appropriately control insider information in accordance with the Company’s
regulations. Additionally, the Company sets specific periods before earnings release as “silent period” andwithholds such dialogues.
[Action to Implement Management That Is Conscious of Cost of Capital and Stock Price) ] (Disclosed in
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

English)
1. The Company's business consists of two business segments, Semiconductor Production Equipment
segment and Metrology Instruments segment, and the Company believes that " Gaging the future with
Metrology, Creating the future with Semiconductors" is the significance of the Company's existence andcontribution to society. The Company aims expand its business and increase its corporate value by
further refining our respective technologies and products, providing new solutions through the fusion andcombination of the technologies of the two businesses individually, and increasing the added value of its
products.
2. The Company has set a target of ROE: 15% or more in its mid-term business plan through the fiscal year
ending March 31st, 2025 (FY2025/3) and has also decided to introduce ROIC as an internal evaluation
criterion. The Company plans to establish a system to calculate ROIC by business segment in FY2023/3,
and to evaluate actual results from FY2024/3. The Company implements growth and precise financial
strategies with the aim of achieving ROIC that exceeds the cost of capital on an ongoing basis so that wewill be able to obtain the evaluation expected by the stock market for the stability of earnings and growthpotential over the medium to long term.

2.

Capital Structure

Ratio of Foreign Shareholders

Over 30%[Principal Shareholders] UPDATEDName
The Master Trust Bank of Japan, Ltd. Trust accountCustody Bank of Japan, Ltd. (Trust account)
SSBTC Client Omnibus Account
The Precise Measurement Technique Promotion Foundation
JP MORGAN CHASE BANK 385632
Mizuho Bank, Ltd.
Ayako Yano
State Street Bank and Trust Company 505103
JP Morgan Chase Bank 385781
State Street Bank and Trust Company 505234

Existence of Controlling
Shareholders Except Parent
Company
Existence of Parent Company

Number of Shares
Percentage of total
held)shares issued
6,721,100
16.66
3,237,800
8.02
2,372,999
5.88
1,058,700
2.62
985,398
2.44
672,204
1.67
614,2631.52
510,899
1.27
508,2391.26
507,000
1.26

No

Supplementary Information
Not applicable.

3.

Corporate Attributes

Listed Stock Market and its Section

Tokyo Stock Exchange, Prime Segment

Fiscal Year End
Type of Business
Number of Employees(Consolidated) as at the End ofPrevious Fiscal Year
Consolidated Sales Amount forPrevious Fiscal Year

March
Precision Equipment
Over 1,000 employees

Number of Consolidated

From 10 to 50 subsidiaries

From 100.0 billion to 1,000.0 billion Japanese Yen

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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

Subsidiaries as at the End ofPrevious Fiscal Year
4.

Policy on Measures to Protect Minority Shareholders in Conducting Transactions with
Controlling Shareholder
Not applicable.

5.

Other Special Circumstances which may have Material Impact on Corporate GovernanceNot applicable.

Ⅱ. Business Management Organization and Other Corporate Governance
Mechanisms regarding Decision-making, Business executions, and Oversight inManagement
1.

Organizational Composition and Operation
Organization form
Company with Audit and Supervisory Committee[Directors]
Maximum Number of Directors as
Stipulated in Articles of Incorporation
Term of Office as Stipulated in
Articles of Incorporation
Chairman of the Board of Directors
Number of Directors
Appointment of External Corporate
Directors
Number of External Corporate
Directors
Number of Independent Directors inExternal Corporate Directors

20
1 yearChairman (except in the case of a person who also serves as
President)
12
Yes
5
5

Relationship with the Company (1)NameAttributesaRelationship with the Company (*)
c
d
e
f
g
h
i

j
Yuriko Sagara
Attorney
Kiyoshi Takamasu
Academic
Masaki Sunaga
Certified Public accountant△
Tsuneko Murata
From another company△
Kazuya Mori
From another company
Legend of Relationship with Company”○” when the director presently falls or has recently fallen under the category“△” when the director fell under the category in the past“●” when a close relative of the director presently falls or has recently fallen under the category, and“▲”when a close relative of the director fell under the category in the pasta.
Executive of the Company and/or its subsidiariesb.
Executive and/or Non-executive director of a parent company of the Companyc.
Executive of a company under common control with the Companyd.
Person and/or a party whose major client/supplier is the Company or executives of such companye.
The Company’s major client/supplier or executives of such companyf.
A Consultant, Accounting expert, and/or Legal expert who received large amount of money and/or assets other than the
Director’s compensationg.
Principal shareholder of the Company (if it is a public company, an executive of such company)h.
An executive of the Company’s client/supplier (except d., e., nor f. above) (limited to himself/herself)i.
Executive of a company that the Company has mutual directorships (limited to himself/herself)

10 of 22bkThis document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

j.
k.

Executive of a party to which the Company donates
OthersRelationship with the Company (2)Name

YurikoSagaraAudit andSupervisory
Committee
memberO

KiyoshiTakamasu

Independence
Director

Supplementary Explanation of
the Relationship

O

-

O

-

MasakiSunagaO

O-

Tsuneko
MurataO

O

While the Company has
business transaction with
Panasonic Corporation where
she was once an executive,
exposure is less than 2% ofconsolidated sales amount.
She left her executive position
9 years ago. As of today, she
is not an executive of thatcompany.
While the Company has
business transaction withJapan Semiconductor
Corporation where he wasonce an executive, exposure isless than 2% of consolidated
sales amount. He left her
executive position 2 years
ago. As of today, he is not an
executive of that company.

KazuyaMoriO

Reasons of Appointment

Yuriko Sagara, including her close relatives, has
no conflict of interest such as entering legal/tax
consulting services with the Company, nor withother shareholders. Therefore the Company has
appointed her as an independent director.
Kiyoshi Takamasu, including his close relatives,
has no conflicts of interest such as executive
experiences in the Company’s majorclient/supplier, principal shareholder, nor
principal shareholding company. Therefore theCompany appoints him as an independent
director.
Masaki Sunaga, including his close relatives, has
no conflict of interest such as entering legal/tax
consulting services with the Company, nor withother shareholders. Therefore the Company
appoints him as an independent director.
Tsuneko Murata, including her close relatives, is
not an executive party with conflicts of interest,
such as the Company’s major client/supplier,principal shareholder, nor principal shareholding
company.
She passes the company criteria for
independence; therefore the Company appoints
her as an independent director.
Kazuya Mori, including his close relatives, is not
an executive party with conflicts of interest, suchas the Company’s major client/supplier, principal
shareholder, nor principal shareholding company.
He passes the company criteria for independence;
therefore the Company appoints him as anindependent director.

[Audit and Supervisory Committee]
Composition of the Committee and Attribution of a Chairman
Name
Audit and Supervisory
Committee

Total
Members

Existence of Directors and/or
Employees who Assist the Audit
and Supervisory Committee

4

Full timeMembers

1

Internal
Directors

1

External
Directors

Chairman
3 Internal
corporate
director

Yes

Matters on Ensuring the Independence of Directors/Employees who Assist the Audit and Supervisory
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

Committee
The Company assigns employees belonging to the Management Support Dept. or Audit Dept.to assist the
Audit and Supervisory Committee when necessary.
The employees who assist the Audit and Supervisory Committee do not receive any instructions fromsuperiors of the division they belong to for matters for which they receive instructions from the Audit andSupervisory Committee. The appointment and transfer of the employees who assist the Audit and Supervisory
Committee shall require the consent of the Audit and Supervisory Committee. To evaluate the employees who
assist the Audit and Supervisory Committee, opinions shall be obtained from the Audit and Supervisory
Committee.
Cooperation among Audit and Supervisory Committee, Financial Auditor and Internal Auditing Division
The Audit and Supervisory Committee shares opinions about auditing structure and auditing issues asnecessary among the Audit Dept. and Financial auditors to make Audit effective. In addition, the Audit andSupervisory Committee periodically obtains briefing about the results of internal audits (based on annual
schedule) and related matters.
[Voluntary committees]
Existence of Voluntary Committees
Equivalent to Nomination Committee
and/or Compensation Committee

Yes

Status of Voluntary Committee, Composition of the Committee and Attribution of a Chairman
Name

Name ofcommittee

Voluntary
Committee
Equivalent toNomination
Committee
Voluntary
Committee
Equivalent toCompensation
Committee

Nomination andCompensation
CouncilNomination andCompensation
CouncilNumber ofcommittee
members5

Full timeMembers

Internal
Directors

External
Directors

External
Experts

OthersChairman

0

0

5

0

0

External
corporate
director

5

0

0

5

0

0

External
corporate
director

Supplementary Information
The Company has established a Nomination and Compensation Council as a voluntary committee for the
purpose of clarifying the independence, objectivity and accountability of the Board of Director’s functions
especially in nomination of and compensation to the directors. The Council consists of members of the Audit
and Supervisory Committee and external corporate directors not serving as an Audit and Supervisory
Committee member. Independent external corporate directors are in the majority (Now all 5 members are
external corporate directors) in the Council to realize deliberations fully independent from management.
For a nomination of director(s), the Council deliberates/reports on matters related to nomination of
director(s) including appointments and dismissals.
For compensation to the directors, the Council deliberates on/resolves classification of compensation perpost, and deliberates/reports on matters related to compensation policies.
[Matters concerning nominations](Matters to be reported): (1) Policies and procedures for the election and dismissal of directors, (2)proposals to be submitted to the General Meeting of Shareholders for the election
and dismissal of directors, (3) Selection, dismissal, and division of duties ofrepresentative directors (CEO) and executive directors, (4) Succession plan, and(5) Other matters deemed necessary by the council in relation to (1) through (4)above.
[Matters concerning compensations]
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

(Matters to be determined):(1) Standard of compensation amount per post, (2) Group Business performancecoefficient in the calculation of Performance-linked compensation amount, (3) RS(Restriction Stock) performance coefficient in the calculation of Stockcompensation, and (4) Performance coefficient in the calculation of Share
Subscription Rights (Stock compensation type).
(Matters to be reported): (5) Policy, composition, and decision-making procedures for remuneration for
Directors, (6) Agenda items for the General Meeting of Shareholders regarding
remuneration for directors and corporate auditors, and (7) Other matters deemednecessary by the Council in relation to (1) through (6) above.
[Independent Directors]
Number of Independent Directors

5

Other Information about Independent Directors[Independence Standards for External Corporate Directors]
An external corporate director or external auditor must fulfill all the independence criteria below:
1. Not an executive (*1) of Tokyo Seimitsu Group (Accretech Group) within 10 years
2. Not the principal shareholder (*2) or its executive
3. Not an executive of the following company or party within 3 years(1) A company or party that Accretech Group is principal client/supplier for (*3)(2) A company or party that is Accretech Group’s principal client/supplier (*3)(3) A company or party that is Accretech Group’s principal lender (*4)
4. Not a certified public accountant belongs to Accretech Group’s financial accountant
5. Not an expert such as public accountant, tax accountant, attorney, judicial scrivener, nor patent attorneythat obtains significant amount of cash (*5) or assets from the Accretech Group6. Nor others as shown below(1) Not a person from the company with which the Company has mutual directorship(*6)(2) A person’s spouse, relative within the second degree of kinship, relative living together or those whoshare a living are all applicable from 1. to 5. above(3) Not having other significant conflicts of interest with the Company(*1) Executive: Directors in charge of business execution, Executive officer and/or equivalent responsibilities(*2) Principal shareholder: shareholder who directly or indirectly owns over 10% of total voting rights(*3) Principal client/supplier: Client/supplier whose sales amount at previous fiscal year is over 2% of consolidated sales
amount(*4) Principal lender: Lender that Accretech Group’s outstanding loans payable at previous fiscal year is over 10% of
total assets(*5) Significant amount of cash: over 10 million yen per year (in 3 years average) excluding directorship compensation(*6) Mutual directorship: A person from a Company that an Accretech Group employee (or ex-employee) is being
appointed to as an external director[Incentives]
Incentive Policies for Directors

Performance-linked bonus system, Stock compensation system,and others

Supplementary Information
Please refer to I.1. [Principle 3.1 Full Disclosure], 3.Board policies and procedures in determining thecompensation of senior management and directors.
Recipients of Stock Options

Internal corporate director, and others

Supplementary Information
Recipients are limited to those who have significant roles and responsibilities that may impact business13 of 22

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

performance though their business execution.
[Compensation for Directors]
Disclosure of (Individual Director’s)Compensation Amount

Yes (limited to specific directors)

Supplementary Information
Total amount of compensation paid to corporate directors (excluding directors serving as Audit andSupervisory Committee members and external corporate directors), directors serving as Audit andSupervisory Committee members (excluding external corporate directors) and external corporate directors aredisclosed in annual securities report and business reports. Also, in annual securities report, consolidated
compensation paid to individual directors who are paid over 100 million Yen per year by the Group are
individually disclosed.
Existence of Policy on Determining
Compensation Amount and Its
Calculation Method

Yes

Policy on Determining Compensation Amount and its Calculation Method
Please refer to I.1. [Principle 3.1 Full Disclosure], 3.Board policies and procedures in determining thecompensation of senior management and directors.
Total amount of compensation paid to directors in FY2023/3:
Directors (excluding directors serving as an Audit and Supervisory Committee member and external corporate
directors): 561 million Yen
Directors serving as an Audit and Supervisory Committee member (excluding external corporate directors):
21 million Yen
External corporate directors: 38 million Yen[Supporting System for External Corporate Directors]
To assist and enhance effective corporate governance, the Company assigns a secretary of the General Affairs
Dept. as a contact window to provide information or explanatory details as necessary to external corporate
directors. Also, to maximize effective attendance at Board meetings, the Company notifies dates and agenda
items well prior to meetings.
The Company also assigns 2 staff for assisting the Audit and Supervisory Committee. This staff also support
smooth information sharing with external corporate directors.
[Information on Retired Presidents]
Name of Corporate Advisers who used be Company President etc.
Name-

Position-

Roles andResponsibilities-

Number of Corporate Advisers who
used be President-

Terms and Condition(Full/Part-time,
Compensation. Etc.)

Date of retirementfrom President
-

Term
-

0

Supplementary Information
While the Company has the capacity to assign former Presidents etc. as Senior Adviser (part-time, 2 years inprinciple) or Corporate Adviser (part-time, 1 year in principle), as of the date of disclosure of this document,
there is no such former President etc. serving as a Senior Adviser nor Corporate Adviser.

2. Outline of Current System of Corporate Governance Mechanisms such as Business14 of 22

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

Executions, Audit and Supervision, and of methods of resolving nomination and/or
compensation
1. Outline of business executions(1) The Board of Directors holds regular monthly Board Meetings. At meetings, important matters
stipulated by the law, articles of incorporation and regulations related to Boards of Directors aredeliberated on and reviewed. The Company provides supplementary documents necessary fordeliberation to all directors, in addition, secures deliberation time to make it sufficient.
(2) In deliberations at the Board of Directors, directors with broad experience in management,
technology, sales, etc. and abundant experience in corporate management, technology, intellectual
property, legal affairs, and accounting/tax affairs and knowledgeable external corporate directors areable to examine management issues from multiple perspectives.
(3) To accelerate decision making, the Company delegates substantial authority to internal companies
within the scope of duties and authority determined by internal regulations to accelerate decision
making. Also, the Company holds executive officers meetings to discuss/share information for
effective Company-wide deliberation, and establishes Company-wide committees such as the Risk
Management, and Compliance Committees to examine and monitor important issues from multiple
angles and make proper decisions.
(4) The Board of Directors also monitors progress/status of issues which had been deliberated on andresolved to monitor business execution by directors. To assess the effectiveness of the Board, theCompany surveys all directors including external corporate directors, and according to the results,
the Company seeks to improve company/board relations.
2. Outline of audit and supervision(1) The Company has established the Nomination and Compensation Council as an advisoryorganization for the President and the Board of Directors. The Nomination and Compensation
Council is composed of Audit and Supervisory Committee members and external corporate directors(All 5 members are independent directors), and deliberates on such matters as nomination of
directors and directors compensation.
(2) The Company has established an Audit Dept. under the direct management of the President. The
Department manager, upon direct assignment by the President &COO , carries out appropriate
investigations.
(3) Based on internal audit regulations, the Audit Dept. conducts periodic internal audits. In addition,
the Audit Dept. periodically evaluates subjects to be audited, auditing methods, and revises practices
when necessary.
(4) If the Audit Dept. finds any violation of laws, regulations, the articles of corporation or internal
rules, or any performance of duties that may cause a loss due to some other reasons at the Company
or its subsidiaries, the General Manager of the Audit Dept. immediately notifies the President&COO and tells employees to implement corrective or improvement actions.
(5) To ensure effective auditing, the Audit Dept. requires each department to maintain related internal
regulations, guidelines and manuals and thoroughly inform all employees of the significance of the
Audit Dept. In addition, the Audit Dept. provides guidance to each department for immediate
reporting to Audit Dept. if any risk of loss as per these documents has arisen.
(6) The Management Support Dept. which is the primary support department of affiliates collects
information on important issues and serious risks at the subsidiaries to share information between
the Parent Company and the subsidiaries and properly perform duties in the interest of both the
Parent Company and subsidiaries.
(7) If the Management Support Dept. finds risks of material loss at a subsidiary, it immediately notifies
further information including details of the risk, estimated material loss, to the Board of Directors
and related departments.
(8) The Audit and Supervisory Committee and Audit Dept. exchange sufficient level information among
Auditor, Audit department, or equivalent department to notify and/or prevent any kind of irregularfunction and/or accounting matter related to the Company or subsidiary.
3. Outline of methods of resolving nomination and/or compensation
Please refer to I.1. [Principle 3.1 Full Disclosure], 3. Board policies and procedures in determining the
15 of 22

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

compensation of management executives and directors and 4. Board policies and procedures in theappointment/dismissal of management executives and nomination of candidates for directorships.

3.

Reasons for Adoption of Current Corporate Governance Mechanisms

The Company applies a structure called the Audit and Supervisory Committee, because the Company Group
believes such a governing body is the most appropriate one to realize a suitable balance between strengthening
auditing/monitoring of director’s business executions and timeliness, streamlining and optimizing of decision
making.
The Company ensures effective governance through constructive discussions at the Board of Directors and theutilization of external corporate directors, and realizes the sustainable growth of the Group in the medium tolong-term.

Ⅲ. Summary of Measures Implemented for Shareholders and Other
Stakeholders
1.

Measures to Vitalize General Shareholders Meetings and Smooth Exercise of Voting
Rights UPDATED

Early Notification of General
Shareholder Meeting

Scheduling of General Shareholders
Meeting that Avoids Overlapping with
Other General Shareholder Meetings
Electronic Exercise of Voting Rights
Participation in an Electronic Voting
Platform and Measures for Enhancing
the Exercise of Voting Rights
Provision of Notices of Convocation in
English2.

Outline of IR Activities UPDATED

Preparation and publication of adisclosure policy
Periodic Investor Briefings for
Individual Investors
Periodic Investor Briefings for Analysts
and Institutional Investors

Supplementary Information
The Notice of Annual General Meeting of Shareholders for 2023
was mailed to shareholders on June 6th, 2023 (20 days prior of
the meeting). In addition, a digital copy of the notice was also
posted to the Tokyo Stock Exchange and the Company website(Japanese: Full edition, English: Summary edition) 7 days prior
to mailing.
Where possible the Company sets the day of the Meeting not toconflict with other similar meetings.
(Annual General Meeting of Shareholders for 2023 was held on
June 26th , 2022).
The Company has utilized an online electronic voting systemsince the Meeting held on June 2016.
The Company has participated in a voting rights online platform
since June 2016 to improve the voting environment.
The Company provides a summary of the Notice in English,
including proposals and reference documents, via the Stock
Exchange and the Company website.
https://www.accretech.com/en/ir/stock/meeting.html
Supplementary Information
The Disclosure policy is being disclosed as
linked below.
(Japanese)
https://www.accretech.com/jp/ir/irpolicy.html(English)https://www.accretech.com/en/ir/irpolicy.html
The Company periodically participates in a
Conference for individual investors.
The Company holds Earnings Conferences inperson and/or virtually for Full Year (inMay) and each quarter (August, November,and February) hosted by director in charge ofIR. (100 participants on average).
16 of 22

Explanations by
the Company
Representatives

Yes
Yes

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

Periodic Investor Briefings for Overseas
Investors

IR Material Posting on Website

Establishment of Department and/or
Person in Charge of IR

Others3.

Also, The Company holds 1 on 1 meeting
when necessary.
The Company participates in conferences
mainly for overseas investors, with briefings
by the Representative and/or director in
charge of IR.
The Company holds meetings hosted by the
representative, director in charge of IR,
and/or Investor relations. In addition, theCompany holds 1 on 1 meeting whennecessary.
Information such as Timely disclosurematerials, Financial Statements, Earnings
conference presentation, its Q&A summary,Annual Securities Report, Investor notes,
performance highlights, share price, archiveof Seminar for individual investors, and otherdocuments are regularly posted.
(Japanese)
https://www.accretech.com/jp/ir/index.html(English)https://www.accretech.com/en/ir/index.html
The Management Support Dept. IR Team,
which reports directly to the President, hasbeen established as the department in charge.
In order to provide fair information to
overseas investors, the Company translates
disclosed information (including Timely
disclosure materials, financial statements,
earnings conference presentations, its Q&A
summaries, Annual security reports andinvestors’ notes) into English in principle,
and post them on its English website at thesame time as or as soon as possible after theJapanese information is disclosed.
https://www.accretech.com/en/ir/index.html

Yes

Measures to Ensure Due Respect for Stakeholders UPDATED
Stipulation of Internal Rules for
Respecting the Position of Stakeholders

Implementation of Environmental
Activities, CSR Activities etc.

Supplementary Information
Rules to Respect the positions of Stakeholders are set forth in
the internal regulations represented by “ACCRETECH Code of
Conduct” and “Internal Control Policy”.
The Company publishes “Sustainability Report” andsimultaneously posts it to the website, to explain the Company’s
governance, environmental activities and actions for social
responsibility.
In addition, the Company has established a Sustainability Dept.
and Sustainability Committee chaired by heads of each businessdivision and subsidiaries to maintain and monitor these
activities.
(Japanese)
https://www.accretech.com/jp/sustainability/index.html(English)https://www.accretech.com/en/sustainability/index.html
17 of 22

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

Development of Policies on Information
Provision to Stakeholders

In the "Sustainability Report", the Company proposes
engagement and information to all stakeholders including
customers, shareholders/investors, suppliers, employees,
industries and regions in line with its motto "Disclose corporate
activities to all stakeholders no matter actual or potential”. Also
the Company discloses its activities through notices to publicorganizations, Integrated report and IR information and its
website.

Ⅳ Matters Related to the Internal Control System
1.

Basic Views on Internal Control System and the Progress of System Development

The Board of Directors has ratified its Internal Control Policy as shown below.
1. Core Management Policy
Our corporate philosophy is "to create the world's No.1 products and grow with our partners andcustomers by integrating excellent technical knowledge, wisdom and information available in the world."
The corporate motto of Tokyo Seimitsu (the “Company”) is “win-win relationships create the world’s No.
1 products.” The Company will reinforce its corporate governance and compliance, and ensure the soundand transparent management of the Group to build win-win relationships with all stakeholders such as
customers, suppliers, shareholders, and employees for long-term sustainable growth.
2. A framework to ensure that performance of duties of Directors and employees of the Company andits subsidiaries is in compliance with relevant laws and regulations as well as the articles ofincorporation(1) To appropriately and soundly perform duties as a whole, from a viewpoint to further strengthen
corporate governance, the Boards of Directors of the Company and its subsidiaries seek to establish
an effective internal control system and a structure to comply with relevant laws, regulations and thearticles of corporation.
(2) The Company and its subsidiaries have established the ACCRETECH Group Code of Conduct
which defines the standards of behavior to ensure socially responsible conduct by Directors andemployees of the Company and its subsidiaries, based on a high level of morality, pursuant torelevant laws and regulations as well as the articles of corporation and internal regulations. Throughthe ACCRETECH Group Code of Conduct, the Company aims to permeate and establish awarenessof corporate ethics among the Directors and employees of the Company and its subsidiaries.
(3) The Company has established the Compliance Committee headed by the Head of Administration
Companies, upon an assignment of Compliance officer(s) and Compliance manager(s) at theCompany and each subsidiary, to improve the compliance system and understand and address
important issues in all business activities by the Directors and employees of the Company and its
subsidiaries.
(4) The Company has established a system under which, if any problem concerning compliance arises,
the nature and possible measures of the problem will be reported from Compliance officer(s)through the Compliance Committee without delay to the Boards of Directors and Audit andSupervisory Committee through the Director in charge of compliance and those responsible for eachHead of Companies.
(5) The Company has established the Audit Dept. under the direct management of the President&COO . This Department conducts internal audits to examine whether operations of the Company
and its subsidiaries are conducted in compliance with relevant laws and regulations as well asinternal rules, and assess the validity of control.
(6) The Company has established an internal whistleblower system to accept reports or provide
consultation on incorrect behaviors that are against social norms or corporate ethics. Appropriate
measures are taken to protect whistleblowers and maintain transparency.
(7) The Audit and Supervisory Committee audits the effectiveness and functions of the internal control
system.
18 of 22

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

3. A framework aimed at preservation and control of information relating to the performance of
duties by Directors of the Company(1) The Directors of the Company appropriately preserve and control information and documents
pertaining to performance of duties as provided in the Core Information Security Policy.
(2) The information control system is designed to allow access upon request of Directors.
4. A framework including rules concerning the control of risk of loss of the Company and its
subsidiaries(1) The Company seeks to prevent potential risk. When risk becomes apparent, all employees including
the President quickly and calmly respond to it.
(2) The Company has established Risk Control Rules to identify and control risks related to theperformance of duties at the Company and its subsidiaries, and has created the Risk Control
Committee head by the President & COO. This Committee puts in place a risk management systemthat prevents and gets prepared for potential risks pursuant to the Risk Control Rules.
(3) If the Audit Dept. finds any violation of laws, regulations, the articles of corporation or internal
rules, or any performance of duties that may cause a loss due to some other reasons at the Company
or its subsidiaries, the General Manager of the Audit Dept. immediately notifies the President &COO and tells employees to implement corrective or improvement actions.
(4) If a risk arises, when necessary, the Emergency Headquarters headed by the President & COO isestablished and measures are immediately taken to remedy the situation.
5. A framework to ensure the efficient performance of duties by Directors of the Company and its
subsidiaries(1) The Board of Directors of the Company and its subsidiaries determine material issues pertaining tomanagement policy and other items and oversees the performance of duties by the Directors, inaccordance with the internal rules including those of the Boards of Directors. They have aframework to ensure the distribution of sufficient materials related to the agenda to all the Directors.
(2) The Company has in place an executive officers system to make speedy decisions on productdevelopment planning and quick and flexible response to market trends. The Executive Officers
oversee the progress and implementation of business plans at regular Executive Management andExecutive Officers’ Meetings.
(3) The Company and its subsidiaries delegate authority and responsibility clearly defined by the rules
on job authority and functions, and other rules in performing duties.
6. A framework to ensure the proper performance of other duties at the Company and its subsidiaries(1) The Company has established the Rules on Matters to be Declared or Reported to Tokyo Seimitsu
from Subsidiaries, based on which important issues are reported to the Company, and some require
the approval of the President & COO of the Company or the Board of Directors.
(2) To facilitate this framework, the Company provides support and advice to its subsidiaries, and if
necessary, dispatches Directors and/or Auditors to monitor and/or audit its business operations.
(3) The Management Support Dept. under the direct control of the President & COO collects
information on important issues and serious risks at the subsidiaries to share information between
the Company and the subsidiaries and properly perform duties in the interest of both the Company
and subsidiaries.
(4) If the Management Support Dept. identifies a risk of loss at a subsidiary, it immediately reports to
the Board of Directors and divisions concerned the nature, degree and impact of the loss.
(5) The Company’s Audit and Supervisory Committee and the Company’s Audit dept. actively share
information with the Auditor and Audit Dept. and other relevant divisions of the Company or
subsidiaries in order to earlier detect and prevent improper transaction or accounting related to theCompany and subsidiaries.
7. A framework to ensure the credibility of financial statements(1) The Company has established the Core Policy on Internal Control over Financial Reporting to
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this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

sufficiently reduce risks against the credibility of financial reporting by the Company and its
subsidiaries.
(2) The Company and its subsidiaries strive to ensure the validity of financial reporting by segregating
responsibilities and conducting daily monitoring in the performance of their daily duties.
(3) The Internal Control Committee and the Audit Dept. evaluate and check the validity of internal
control systems related to financial reporting at the Company and its subsidiaries.
(4) For matters which are highly likely to have material impact on the financial situation, the Directors(excluding the Audit and Supervisory Committee members), Audit and Supervisory Committee
members, and Accounting Auditors properly share information among themselves.
8. Matters on the Assignment of Employees to Assist the Audit and Supervisory Committee
The Company assigns around two employees belonging to the Management Support Dept. or Audit Dept.
to assist the Audit and Supervisory Committee when necessary.
9. Matters on Ensuring the Independence of Employees who Assist the Audit and Supervisory
Committee from the Directors (excluding the Audit and Supervisory Committee members), andthose on the Effectiveness of Instructions of the Audit and Supervisory Committee to such
Employees(1) The employees who assist the Audit and Supervisory Committee described in the preceding
paragraph do not receive any instructions from superiors of the division they belong to for mattersfor which they receive instructions from the Audit and Supervisory Committee.
(2) The appointment and transfer of the employees who assist the Audit and Supervisory Committee
requires the consent of the Audit and Supervisory Committee.
(3) To evaluate the employees who assist the Audit and Supervisory Committee, opinions are obtained
from the Audit and Supervisory Committee.
10. Frameworks including those concerning reporting to the Audit and Supervisory Committee of theCompany by the Directors and employees of the Company and its subsidiaries, or the Auditors of
the Subsidiaries(1) The Directors and employees of the Company and its subsidiaries, and the Auditors of subsidiaries
make reports or provide information as necessary, as determined by the Audit and Supervisory
Committee of the Company, on request of the Audit and Supervisory Committee.
(2) The matters that may require reporting or information sharing as described in the preceding
paragraph are as follows: Internal Control System activities of the Audit Dept. and Management Support Dept.
 Activities of the Auditors and internal audit divisions of subsidiaries
 Major accounting policy and standards of the Company, and changes to them Business results and forecasts to be announced, and contents of important documents to bedisclosed Management of the internal whistleblower system and reported contents
 Distribution of internal Ringi and minutes of meetings requested by the Audit and Supervisory
Committee(3) The Company and its subsidiaries ensure that their Directors and employees and the Auditors ofsubsidiaries are not treated unreasonably because of such reporting or information provision to the
Audit and Supervisory Committee.
11. Other frameworks to ensure effective auditing by the Audit and Supervisory Committee(1) The Representative Directors of the Company hold regular meetings with the Audit and Supervisory
Committee members as appropriate to exchange opinions on the management of the Company andcommunicate each other, separately from the reporting of the performance of duties.
(2) The Board of Directors of the Company ensures that the Audit and Supervisory Committee members
participate in important meetings such as Executive Management Meetings to ensure proper
performance of their duties.
(3) The Company shall bear all the necessary expenses or debts for the Audit and Supervisory
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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

Committee members to perform their duties. Upon claim of advance payment of such expenses
pursuant to the Companies Act., it shall immediately pay after confirming with the relevant
divisions.
12. Basic Views and Activities to Severe Relationships with Anti-social Groups(1) The Company and its subsidiaries will not have any relationships with anti-social groups. Whencontacted by such groups, the Company and its subsidiaries provide information to relatedorganizations such as police, and work with attorneys to take steadfast action against unreasonableor violent demand as an organization.
(2) The ACCRETECH Group Code of Conduct prohibits any relationships with anti-social groups. The
Company and its subsidiaries work to collect updated information from the police and shareholder
registry administrators and other enforcement bodies. The Company has identified a section in
charge of responding to these issues and collaborates with external organizations when necessary.

2.

Basic Views on Eliminating Anti-Social Forces

Please refer to above internal control policy, 1-12. Basic Views and Activities to Severe Relationships
with Anti-social Groups.

Ⅴ. Others
1.

Basic Views on Eliminating Anti-Social Forces

Adoption of Anti-Takeover Measures

No

Supplementary Information
Not applicable.
2.

Other Matters Concerning to Corporate Governance
Overview of timely disclosure
In terms of timely disclosure, the Company maintains internal information controls and processes in its“Information Security Policy” and “Regulation for Insider Trading” and works for timely and appropriate
disclosure of the Company’s information such as significant resolutions, events, and/or earnings
information that may influence investor’s judgements.
The Timing and method of disclosure will be mutually decided by the Board of Directors and relatedorganizations, and will be handled by the General Affairs Dept., upon direction of the Information
management supervisor (Director in charge of information disclosure).
The Company utilizes disclosure methods widely so that our stakeholders enable to obtain the
Company’s information, including posting on the Timely Disclosure Network(TDnet) provided by the
Tokyo Stock Exchange, on the Company’s website and provision of news releases.

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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.

Reference: Diagram of Corporate Governance Structure

End of document

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This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for thistranslation or for direct, indirect or any other forms of damages arising from the translation.