Corporate Governance
NAGAWA Co.,Ltd.

Last Update: July 31,2023
NAGAWA Co.,Ltd.
President Ryoh Shimmura
Contact: Senior Executive Officer Masayoshi Kunou
Stock Code : 9663
https://group.nagawa.co.jp
The corporate governance of NAGAWA 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 recognizes the importance of accurate information and prompt decision-making in realizing growth
based on a sound long-term outlook. Also, in light of the increasing importance of compliance with laws andregulations, the Company has established a Code of Conduct for Directors and Employees and is striving to maintaina high-level corporate philosophy. In addition, the Company strives to disclose information promptly.

[Reasons for Non-Compliance with the Principles of the Corporate Governance Code]The items in this report are based on the Corporate Governance Code revised in June 2021.
[Supplementary Principle 1.2.4 Improvement of the environment for the electronic exercise of voting rights andEnglish translation of the convening notices for general shareholder meeting]As part of efforts to improve the environment for the exercise of voting rights, the Company has introduced a systemthat enables the exercise of voting rights via the internet, although it does not use a voting platform.
[Supplementary Principle 2.4.1 Diversity of core human resources]
Currently, more than 80% of managers are midcareer hires, and we recognize that we are not in a position to set
measurable targets for midcareer hires. On the other hand, the Company recognizes that securing diversity byappointing women and non-Japanese nationals as core human resources is an issue at present.
At present, we have not set any measurable targets for appointing women and non-Japanese nationals as core humanresources. However, since last year, we have started efforts to ensure diversity, including the hiring of female sales
representatives.
As for non-Japanese employees, we will continue to hire a small number of new graduates every year with a view tofuture management.
The Company’s basic policy is to appoint employees in accordance with their abilities and achievements, regardlessof their characteristics, such as “women,” “non-Japanese,” or “midcareer employees.” The Company will further
promote various measures aimed at ensuring diversity, and will consider formulating and disclosing personnel
development policies, internal environment improvement policies, and specific targets.
[Supplementary Principle 4.1.3 Successor plan]
The Company does not currently have a successor plan for the President and CEO. Not only for the position of
President, but also for each officer, the Board of Directors shall select the person the Company considers to be themost appropriate taking into account their experience, ability, personality and other qualities, and in accordance withthe business situation and issues to be addressed from time to time, and in consideration of the deliberations of theNomination and Remuneration Committee.
[Supplementary Principle 4.2.1 Introduction of incentive-type remuneration]
Compensation for Directors is determined based on a comprehensive review of performance, the state ofachievement of management policies and goals, and contribution to performance, within the total limit resolved at
the General Meeting of Shareholders.
At present, the Company has not introduced stock compensation, but in the future, we will consider the introductionof stock compensation, etc., based on the discussions of the Nomination and Compensation Committee, in order tobuild a system in which more appropriate incentives function to improve corporate value over the medium tolongterm.

[Disclosure Based on the Principles of the Corporate Governance Code][Principle 1.3 Basic Strategy for Capital Policy]
The Company’s basic capital policy is to utilize internal funds from a long-term perspective, including thedevelopment of new products and new construction methods necessary for business expansion, the reinforcement of
the sales and distribution system, and the expansion and renewal of loan assets.
In addition, a total payout ratio of approximately 30% or more is used as a guideline after taking into account longterm and comprehensive factors such as growth in business results and future business development and capital
investment. We will continue to provide returns to our shareholders by increasing dividends and acquiring treasury
stock in consideration of capital investment trends in the future.
[Principle 1.4 Cross-Shareholdings](Policy for Holding)
The Company attaches importance to communication with its business partners. In cases where it is recognized that
it will contribute to the improvement of the Company’s corporate value due to the further strengthening of businessalliances or maintaining and strengthening stable business relationships, and in consideration of the trends of crossshareholding companies, the state of transactions and the market value of such shares, the Company holds shares forthe purpose of cross-shareholding.
The Board of Directors verifies the significance of holding cross-shareholdings and the medium to long-term
economic rationality of doing so, and reduces as appropriate holdings of stocks whose holding is recognized to havediminished in significance after also taking into account matters such as the impact on the market.
(Results of Verification by the Board of Directors)
This year, the significance of all cross-shareholdings and the medium to long-term economic rationality of doing sowere recognized, and holding continued.
(Criteria for the Exercise of Voting Rights)
When exercising voting rights pertaining to cross-shareholdings, the Company does not approve the proposals of thecompany unconditionally. Instead, the exercise of voting rights is based on the exercise of voting rights from theviewpoint of whether it contributes to the improvement of the Company’s corporate value by maintaining andstrengthening business alliances and business relationships with the Company.
Based on this, votes may be cast against proposals that harm shareholder value or that are likely to harm the corporate
value of the company concerned.
[Principle 1.7 Related Party Transactions]
In principle, the Company prohibits, transactions with directors and other related parties such as people within thesecond degree of kinship of directors.
When conducting transactions with related parties, explanations are required at meetings of the Board of Directors
in accordance with laws and regulations and internal rules. In such cases, from the perspective of ensuring the fairness
and impartiality of transactions, the relevant officers are excluded from such resolutions as special interested parties,
and approval resolutions are obtained with regard to the reasonableness of transactions and their terms andconditions. When such transactions are executed, their details are reported to the Board of Directors.
In addition, the Company has established a system to manage transactions with related parties by conducting aquarterly questionnaire survey of all officers and executive officers, including the Company and its subsidiaries, toconfirm whether there are transactions with related parties. When transactions occur with these related parties,
disclosure is made in accordance with relevant laws and regulations such as the Companies Act and the Financial
Instruments and Exchange Act, as well as the rules established by the stock exchanges.
[Principle 2-6 Roles of Corporate Pension Funds as Asset Owners]
The Company has adopted a statutory defined benefit corporate pension plan.
In order to ensure that pension benefits, etc. are provided in the future, the Company has formulated a basic policy
for investment, such as the composition ratio of investment assets, from a medium to long-term perspective, andentrusts the management of pension assets to an external institution.

In addition, the Company is striving to build an appropriate management system by systematically appointing
personnel who have knowledge of the management of pension assets and actively incorporating expert knowledge
from external advisors.
At the same time, we monitor the state of investment of pension assets regularly, evaluate them not only from aquantitative perspective but also from qualitative aspects such as investment policy and risk management, and review
asset allocation and investment management contractors as necessary.
[Principle 3-1 Full Disclosure](i) Company objectives (management philosophy, etc.), management strategies, and management plans.
The Company’s management philosophy is to create a company that is trusted by customers and local
communities through management based on the mottos “Be Cheerful” “With Vigor” and “Be Positive.”
The details can be found on our website.
https://group.nagawa.co.jp/company/philosophy.html
The Medium–Term Business Plan is also available on the Company’s website.
https://group.nagawa.co.jp/ir/plan.html(ii) Basic concepts and basic policies concerning corporate governance based on the respective principles of the
Code.
The Company’s basic views on corporate governance are described in “1. Basic Views” of “I. Basic Views on
Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information”(iii) Policies and procedures for the Board of Directors to determine the compensation of senior management anddirectors
The remuneration of the Company’s directors consists of basic remuneration and bonuses.
Decisions are made within the total limits approved at the General Meeting of Shareholders, taking into accountoverall performance, the state of achievement of the management policies and targets formulated for eachbusiness year, and the degree of contribution.
A rough draft of the specific remuneration amount for each Director is determined by the Representative
Director, taking into account overall performance, management policies, the state of achievement of goals, andthe degree of contribution. The Board of Directors deliberates and makes decisions based on the draft.
The Company has also established a Nomination and Remuneration Committee, half of whose members are
Independent Outside Directors. From the next fiscal year, the Board of Directors will consult with theNomination and Compensation Committee and make decisions on the compensation system for Directors, thepolicy for determining compensation, and the details of compensation for individual Directors.
(iv) Policies and procedures for the Board of Directors to select and dismiss senior management and nominate
candidates for director and Audit & Supervisory Board members(Nomination policy for Candidates)
The selection criteria for candidates for director are having a wealth of experience and knowledge in each field,
capabilities and qualifications as a corporate manager, and a broad perspective in global management.
The Company nominates candidates for external director who have extensive knowledge and experience andsufficient experience in their fields of origin, and who satisfy the Company’s “Independence Standards forExternal Directors/Auditors” in order to further strengthen the management supervision function.
The selection criteria for candidates for Audit & Supervisory Board member include the requirement that they
have advanced knowledge and skills in auditing the overall business of the Company, including auditing ofaccounting.
The Company appoints candidates for Outside Audit & Supervisory Board member who have a high level of
specialized knowledge and abundant experience in finance, accounting, technology, corporate management, etc.,
and satisfy the Company’s standards on the independence of external executives in order to further strengthen
the neutrality of the audit system.
Candidates for director and Audit & Supervisory Board member are recruited actively not only from within the
Company but also from outside the Company, regardless of nationality, race, gender, age or work history.

(Procedures for the appointment of management)
The nomination of candidates for director is deliberated and determined by the Board of Directors.
In addition, the nomination of candidates for Audit & Supervisory Board member is subject to deliberation by
the Board of Directors and determined with the consent of the Audit & Supervisory Board.
The Company has established a Nomination and Remuneration Committee, half of whose members are
independent external directors. From the next fiscal year, the Nomination and Remuneration Committee will
be consulted with regard to candidates for director and candidates for Audit & Supervisory Board member will
be selected by the Board of Directors with the consent of the Audit & Supervisory Board.
(Procedures for the dismissal of management)
If any of the following criteria are met with respect to an executive, including the representative director, theNomination and Remuneration Committee will be consulted in advance and the Board of Directors will
determine a proposal for the dismissal of the executive.
1. It is recognized that an executive has a relationship with anti-social forces that should be condemned socially.
2. An executive has violated laws
and regulations, the Articles of Incorporation, or other rules of the Group, thereby causing a major loss or
hindrance to the business operations of the Group. 3. An executive has caused significant hindrance to the
execution of duties.
4. It has become clear that the respective requirements of the selection criteria are not met.

(v) Individual explanation of each appointment, removal or nomination when the Board of Directors appoints orremoves senior management or nominates candidates for director or corporate auditor based on (iv) above
The reasons for selecting each candidate for director and Audit & Supervisory Board member are described in
the reference documents for the General Meeting of Shareholders in the “Notice of Convocation of the General
Meeting of Shareholders.”
https://group.nagawa.co.jp/ir/stock/meeting.html[Supplementary Principle 3.1.3 Sustainability initiatives]-Disclosure of information on sustainability, human capital, intellectual property, etc.
Our basic policy on sustainability is to contribute to the achievement of the SDGs, which are common goals for theinternational community, through our business activities.
Specifically, we are working to contribute to society by supplying emergency temporary housing and temporary
school buildings in times of disaster, and to contribute to the environment by deepening and continuing to promote
5R businesses such as the Super House rental system.
Details of our efforts are posted on our website.
https://group.nagawa.co.jp/company/csr.html
The Company has also established a “Support and Reward System for the Acquisition of Qualifications” in thebusiness domain in order to realize business continuity and sustainable growth through investment in human capital.
Under this system, bonuses are paid to employees who have acquired the qualifications and licenses designated by
the Company. In addition, the Company bears the expenses necessary for acquiring and renewing such qualifications
and licenses, and is working actively to secure and develop human resources.
As for investments in intellectual property, we are working to improve the safety and efficiency of our business bydeveloping safety blocks to ensure the safety of our employees in the production, assembly and disassembly of unit
houses.
<Information disclosure based on the TCFD recommendations>
The Company considers it important from the perspective of our sustainable development to analyze medium tolong-term risks and opportunities in the climate change that surrounds us, and to promote management strategies
and risk management based on them.

Based on the above, we will support the purpose of the TCFD proposal and will organize and disclose informationon our sustainability efforts under the supervision of the Board of Directors in an easy-to-understand manner.
[Supplementary Principle 4.1.(1) Roles and responsibilities of the Board of Directors]
The Board of Directors makes decisions on basic management policies and other important management matters,
as well as on the execution of important business matters to be decided by the Board of Directors in accordance withlaws and regulations and the Articles of Incorporation. The standards for such decisions are stipulated in the Boardof Directors Regulations.
The decision-making and execution of other matters are delegated to the executive bodies of the representative
director and below, and the standards are clearly stated in the Regulations for Duties and Authority and other internal
regulations.
[Principle 4-9 Independence Standards and Qualification for Independent Directors]
When appointing an independent external director, the Company considers whether the candidate satisfies thequalifications for independent directors stipulated by the Tokyo Stock Exchange, and whether the candidate is acandidate who can provide useful advice and effective supervision from a position independent from management atmeetings of the Board of Directors.
[Supplementary Principle 4.10.(1) Optional Nominating Committee and Remuneration Committee]
The Company has established a Nomination and Remuneration Committee in order to strengthen the supervisory
function of the Board of Directors and enhance the corporate governance system by ensuring the transparency andobjectivity of the evaluation and decision-making process concerning the nomination and remuneration of directors
and auditors.
The authority and role of this committee is to deliberate on the following matters it is consulted about by the Boardof Directors and report to the Board of Directors.
- Matters concerning the composition of the Board of Directors- Matters concerning the election and dismissal of directors and auditors- Selection criteria for external directors and external auditors- Matters concerning the selection and removal of representative directors and executive directors- Matters concerning the independence standards for external directors- Matters concerning the selection and removal of the members of the Nomination and Remuneration Committee- Matters concerning policies and procedures for determining the remuneration of directors, auditors and executive
officers- Matters concerning the content of remuneration for directors and executive officers- Matters concerning the successor plan
- Proposals for the General Meeting of Shareholders (proposals for appointment and removal, remuneration
proposals)
The committee’s Regulations stipulate that at least half of its members must be external directors, and that an
external director must serve as the chair, thereby ensuring its independence.
[Supplementary Principle 4.11.(1) Views on the balance of knowledge and experience, diversity, etc., of the Board of
Directors]
Considering the scale of the Company’s business and other factors, the Articles of Incorporation stipulate that the
number of Directors must be no more than 15. Regardless of nationality, race, gender, age or work history, theCompany nominates people who it considers to be the most suitable as candidates for director and appoints them at
the General Meeting of Shareholders.
Currently, the Board of Directors of the Company comprises a total of eight directors: four directors who haveextensive knowledge and experience in corporate management and who also have knowledge in their respective areasof responsibility; and four independent external directors (one of whom is female) who possess advanced expertise
and who are expected to provide advice and supervision over management from a broad perspective.
Specific skill combinations are shown in the skill matrix included in this report.
The policies and procedures for the election of directors are described under Principle 3.1.(iv).

[Supplementary Principle 4.11.2 State of concurrent appointment of officers]
In cases where directors and corporate auditors serve concurrently as officers of other companies, the Company
confirms that the number of concurrent positions is reasonable enough to secure the time and effort required tofulfill their roles and responsibilities as directors and corporate auditors of the Company.
Important concurrent positions of directors and Audit & Supervisory Board members are disclosed annually in the
Annual Securities Report and in the Notice of Convocation of the General Meeting of Shareholders.
[Supplementary Principle 4.11.3 Preconditions for ensuring the effectiveness of the Board of Directors and the Audit& Supervisory Board]
The Company evaluates the effectiveness of the Board of Directors every year.
As the method of implementation, based on the advice of external consultants, the Company conducts aquestionnaire regarding the operation of the Board of Directors among directors and auditors, and reports the results
to the Board of Directors. Based on this report, we strive to improve the effectiveness of the Board of Directors bypromoting initiatives that contribute to its more effective management.
This fiscal year, we conducted an effectiveness evaluation based on the above policy. The result this year confirmedthat the effectiveness of the Company’s Board of Directors has been ensured.
On the other hand, “initiatives to ensure the diversity of core human resources” and “the state of development andsupervision of the internal reporting system” were cited as items that should be discussed further at Board of
Directors meetings, and certain issues were also identified.
We will continue to implement measures to improve the effectiveness of the Board of Directors, including the
expansion of the abovementioned discussions.
[Supplementary Principle 4.14.2 Training policy for officers]
At the time of assuming the office of external director, the Company provides related materials and explains theoutline and issues. Even after assuming office, the Company provides opportunities to deepen external directors’
understanding of the Company by attending Directors’ and General Managers’ Liaison Meetings and conducting
on-site inspections.
The Company provides internal officers with opportunities to acquire the knowledge required by officers byattending external seminars and other events as appropriate at the time of their appointment.
The Company also recommends that, after assuming office, internal officers participate voluntarily in seminars,
workshops and exchange meetings held by external organizations in order to acquire and renew the knowledge
required as an officer of a listed company.
The costs of such activities are borne by the Company.
[Principle 5.1 Policy for Constructive Dialogue with Shareholders]
In order to promote constructive dialogue with shareholders, the Company has established the following systems andis working to promote dialogue with shareholders.
(i) The Company has appointed a director in charge of IR and has assigned Planning Department as the department
in charge of IR.
(ii) Planning Department, which is the department in charge of IR, plays a central role, and related departments
such as General Affairs Department hold meetings as needed and respond in cooperation with them.
(iii) As a means of dialogue other than individual interviews, the Company holds a financial results briefing once
each half year, and also holds small meetings and individual interviews in succession.
(iv) The opinions of shareholders and investors obtained through IR activities are reported to the Board of Directors
by the Director in charge of IR, and information is shared among the Board of Directors.
(v) When communicating with shareholders and investors, the Company manages insider information appropriately
in accordance with the Insider Trading Regulations, the Timely Disclosure Regulations, and the Corporate
Ethics Regulations.

Capital Structure
Foreign Shareholding Ratio

10% or more and less than 20%[Major Shareholders]Name / Company Name
Osamu Takahashi
THE SFP VALUE REALIZATION MASTER FUND LIMITEDThe Master Trust Bank of Japan Co., Ltd. (trust account)
Manabu Takahashi
Kenji Sugai
North Pacific Bank, Ltd.
The MUFG Bank, Ltd.
THE CHASE MANHATTAN BANK, N.A. LONDON
SPECIAL OMNIBUS SECS LENDING ACCOUNT
N/T Shokai Co., Ltd.
Etsuo Takahashi
Controlling Shareholder (except for Parent Company)—

Parent—Parent company listing—

Number of Shares Owned
2,011,240
1,678,700
1,525,000
1,000,000
741,000
683,400
610,000

Percentage (%)
12.79
10.67
9.69
6.35
4.71
4.34
3.87

542,900

3.45

492,600
475,400

3.13
3.02

Supplementary Explanation—

2. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange, Prime Market

Fiscal Year-End

MarchType of Business

Services

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

500 or more and less than 1,000\10 billion or more and less than \100 billion
Less than 10

3. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with the Controlling Shareholder—
4. Other Special Circumstances Which May Have a Material Impact on Corporate GovernanceNone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 Audit & Supervisory Board members[Directors]
Maximum Number of Directors Stipulated in the
Articles of Incorporation
Term of Office of Directors stipulated in the
Articles of Incorporation15
2 years

Chairperson of the Board

President

Number of Directors

9

Appointment of External Directors

Appointed

Number of External Directors

4

Number of Independent Directors

4External Directors’ Relationship with the Company (1)NameAttributeab

Relationship with the Company*
c
d
e
f
g
h
i

j

k

Mikio Kinose
LawyerSyuji Inooka
From another company
Hideki Nishida
CPA
Junko Takahashi
Tax accountant* Categories for “Relationship with the Company”* “○” when the director presently falls or has recently fallen under the category, and “△” 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 or its subsidiaries
b. Non-executive director or executive of a parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the Company or an executive thereof
f. Consultant, accountant, or legal professional who receives a large amount of monetary consideration orother property from the Company besides compensation as a director / Audit & Supervisory Board member
g. Major shareholder of the Company (or an executive of said major shareholder if the shareholder is a legal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f)(the director himself / herself only)
i. Executive of a company, between the Company and which external directors / Audit & Supervisory Board
members are mutually appointed (the director himself / herself only)
j. Executive of a company or organization that receives a donation from the Company(the director himself / herself only)
k. OtherExternal Directors’ Relationships with the Company (2)Designation
Name

as
Independent

Supplementary Explanation of the Relationship

Reasons of Appointment

May 1995

Joined the Daini Tokyo Bar Association

As a corporate manager, he has sufficient

Joined Suzuki & Wada Law Officequalifications and experience to supervise theApr. 2001

Established Suzuki, Wada and Kinose Law Offices

execution of duties in a neutral and objective

Dec. 2010

Representative Attorney, Suzuki Sogo Law Officesmanner.

Apr. 2015

Appointed Director of the Kanto Federation of Bar<Reasons for designation as an independent

Associations

officer>

Representative Attorney, Mikio Kinose Law Office

The Company believes that there is no(to present)

business relationship between the Company

Director

Mikio
Kinose○Feb. 2020

and the current attorney’s office and thatsuch relationship will not have an impact ondecision-making.
Apr. 1972

Joined Yokogawa Bridge Works, Ltd.

He has served as Representative of Yokogawa(currently Yokogawa Bridge Holdings Corp.)

System Building Corporation, and is well

Apr. 2002

Director, Yokogawa System Corporation

versed in system building. In addition, heJune 2008

Representative Director and President, Yokogawa

possesses sufficient insight to govern

System Corporation

corporate management. Therefore, theJune 2016

Advisor, Yokogawa System Corporation

Company has appointed him as director

Sep. 2017Retired from Yokogawa System Corporation, Advisor

having judged that he will be able to perform
his duties as an external director of the

Syuji
InookaCompany appropriately.

○<Reasons for designation as an independent
officer>
The Company believes that he maintains aneutral and fair position because the business
relationship between the Company andYokogawa System Building Corporation isextremely light and he has already retired
from Yokogawa System Building
Corporation.
Mar.1987

Joined Glory Accounting Office

The Company has appointed him as an(currently EY Ernst & Young ShinNihon LLC)

external director having judged that he willMar.1990

Registered as a Certified Public Accountant

be able to perform duties that further

May 2005

Representative Partner, New Japan Audit Corporation

improve corporate value and management(currently EY New Japan Audit Corporation)transparency appropriately based on his

Retired from Ernst & Young ShinNihon LLC (present

advanced experience and knowledge of

EY Ernst & Young ShinNihon LLC).

accounting and finance.

Representative, Nishida Certified Public Accountant<Reasons for designation as an independent

Office (to present)

officer>June 2017
Hideki
Nishida○July 2017

There is no business relationship between the
Company and the current certified public
accountant office, and it is determined that
there will be no impact on decision-making.
The Company has also determined that hemaintains a neutral and fair position as acertified public accountant.

Apr. 1974

Joined Tokyo Regional Taxation Bureau

Although she has never been involved inJuly 2010

Assumed the post of Deputy Chief of Meguro Tax

corporate management other than as an

Officeindependent director, she possesses a highAssumed the post of Inspector General, Tokyo

level of knowledge of taxation and accounting

Inspector General of the National Tax Agency.

as a certified public tax accountant, and theJuly 2015

Assumed office as Chief of the Gangseo Tax Office.

Company has nominated her as a new

Dec.2017

Junko Takahashi Tax Accountant Office (to present)

candidate for external director expecting that

July 2012

she will contribute to ensuring the soundnessof the Company’s management.
Junko
Takahashi<Reasons for designation as an independent○

officer>
The Company has judged that there is nobusiness relationship between the Company
and the currently established certified public
tax accountant office that could have an
impact on decision-making as there is nobusiness relationship at all.
The Company has determined that she
maintains a neutral and fair position as acertified public tax accountant.

[Voluntary Establishment of Committee(s)]Voluntary Establishment of Committee(s)Corresponding to Nomination Committee orRemuneration Committee

Established

Status of Establishment of Voluntary Committee, Composition of Committee and Attributes of Committee
Chair (Chairperson)

Total number of members

Voluntary committee
corresponding
to a nominating committee
Nomination and Remuneration
Committee
4

Voluntary committee
corresponding
to a remuneration committee
Nomination and Remuneration
Committee
4

Number of full-time members

00Number of internal directors

2

2

Number of external directors

2

2

Number of internal experts

00

Number of other members

00Committee chair (chairperson)

External director

External director

Name of committee

Supplementary Explanation
The newly established Nomination and Remuneration Committee serves as both a nomination committee and a
remuneration committee. The details of the Committee are described in [Supplementary Principle 4.11.(1) Views
on the balance of knowledge and experience, diversity, etc. of the Board of Directors] of [Disclosure Based on the
Principles of the Corporate Governance Code][Audit & Supervisory Board]
Establishment of Audit & Supervisory Board

Established

Maximum Number of Audit & Supervisory
Board Members Stipulated in the Articles of Incorporation

5

Number of Audit & Supervisory Board Members

3

Cooperation among Audit & Supervisory Board Members, Independent Auditors and Internal Audit
Departments
The Audit & Supervisory Board members and the accounting auditors cooperate to conduct audits in accordancewith laws and regulations.
The Company has elected EY Ernst & Young ShinNihon LLC as the accounting auditors and has been audited
accordingly. The Board of Directors, Audit & Supervisory Board members and the accounting auditors hold audit
reviews four times a year.
When necessary, the Company also receives advice on various accounting and auditing issues, including theexchange of opinions and information on business conditions and the status of internal controls.
The certified public accountants who executed the audit are Kazuya Kitazumi and Mika Nezu, who are designatedlimited liability employees and business execution employees. The audit corporation has introduced a replacement
system based on the Certified Public Accountants Act, related laws and regulations, and the ethics rules of theJapanese Institute of Certified Public Accountants.
The composition of assistants for accounting audit services is determined based on the selection criteria of theauditing firm. Specifically, there are three certified public accountants and six others.
Appointment of External Audit & Supervisory
Appointed
Board Members
Number of External Audit & Supervisory Board
2
Members
Number of Independent Audit & Supervisory
2
Board Members
External Audit & Supervisory Board Member’s Relationship with the Company (1)NameAttributeabc

Relationship with the Company*
d
e
f
g
h
i
j
k

l

m

Takao Toriumi
From another company
Nobutaka Motohashi
From another company* Categories for “Relationship with the Company”* “○” when the member presently falls or has recently fallen under the category, and “△” when the member fell
under the category in the past
* “●” when a close relative of the member presently falls or has recently fallen under the category, and “▲”when a close relative of the member fell under the category in the pasta. Executive of the Company or its subsidiaries
b. Non-executive director or accounting advisor of the Company or its subsidiaries
c. Non-executive director or executive of a parent company of the Company
d. audit & supervisory board member of a parent company of the Company
e. Executive of a fellow subsidiary company of the Company
f. A party whose major client or supplier is the Company or an executive thereof
g. Major client or supplier of the Company or an executive thereofh. Consultant, accountant, or legal professional who receives a large amount of monetary consideration or otherproperty from the Company besides compensation as an Audit & Supervisory Board member
i. Major shareholder of the Company (or an executive of said major shareholder if the shareholder is a legal entity)
j. Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h)(the Audit & Supervisory Board member himself / herself only)

k. Executive of a company, between the Company and which external directors / Audit & Supervisory Board
members are mutually appointed (the audit & supervisory board member himself / herself only)
l. Executive of a company or organization that receives a donation from the Company (the Audit & Supervisory
Board member himself / herself only)
m. Other

External Audit & Supervisory Board Members’ Relationships with the Company (2)Name

Designation as
Independent Audit& Supervisory
Board Member

Supplementary Explanation of
the Relationship

Takao
ToriumiThe Company has designatedhim as an independent officer.
○

Representative, Toriumi
Certified Public Accountants
OfficeNobutaka
Motohashi
The Company has designatedhim as an independent officer.
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Representative, Nobutaka
Motohashi Certified Public
Accountant & Tax Accountant
OfficeReasons of Appointment

As a corporate manager, he has sufficient qualifications
and experience to supervise the execution of duties in aneutral and objective manner.
<Reasons for designation as an independent officer>
The Company has determined that there is no business
relationship between the Company and the currently
established certified public accountant office that could
have an impact on decision-making, as there is no such
relationship at all.
The Company has also determined that he maintains aneutral and fair position as a certified public accountant.
As a corporate manager, he has sufficient qualifications
and experience to supervise the execution of duties in aneutral and objective manner.
<Reasons for designation as an independent officer>
The Company has determined that there is no business
relationship between the Company and the currently
established certified public accountant office that could
have an impact on decision-making, as there is no such
relationship at all.
The Company has also determined that he maintains aneutral and fair position as a certified public accountant.

[Independent Directors/Audit & Supervisory Board Members]
Number of Independent Directors/Audit &6
Supervisory Board Members
Other Matters Relating to Independent Directors/Audit & Supervisory Board Members
None[Incentives]
Incentive Policies for Directors

None

Supplementary Explanation
The Company determines remuneration and bonuses for directors and corporate auditors by taking into accountnot only the Company’s business performance but also the state of achievement of the policies and goals that areformulated each fiscal year.

Recipients of Stock Options

None

Supplementary Explanation—[Director Remuneration]
Disclosure of Individual Directors’ Remuneration

No individual disclosure

Supplementary Explanation
The total amount of remuneration is disclosed in the securities report and business report. (FY ended March 2023)
Director compensation (8 in total): \153 million (including \19 million for external director compensation)
Corporate auditor compensation (4 in total): \31 million (including \9 million for external auditor compensation)
Policy on the Determination of Remuneration Amounts
and Calculation Methods

None

Disclosure of Policy on the Determination of Remuneration Amounts and Calculation Methods—[Supporting System for External Directors and/or External Audit & Supervisory Board Members]
External Audit & Supervisory Board members attend the meetings of the Board of Directors and Audit &Supervisory Board held once a month to receive explanations of the decisions made by management concerning theexecution of business. In addition, General Affairs Department sends important internal information, such as theminutes of the weekly Directors’ and General Managers’ Liaison Meeting and the Internal Audit Report, by mailand other means as appropriate.
The Company is also audited and reviewed by the accounting auditors four times a year.

2. Matters Concerning the Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System)
The Board of Directors is positioned as the function that makes decisions on basic management policies, matters
stipulated by laws and regulations, and other important management matters, as well as supervising the state ofbusiness execution.
Directors are assigned to each business division in order to ensure the efficient management of the Company.
Audit Office is in charge of internal audits and conducts the necessary audits and investigations on a regular basis.
The results of these audits are reported to the Directors’ and General Managers’ Liaison Meeting.
Audit & Supervisory Board members may participate in internal audits and monitor their status.
Reasons for Adoption of Current Corporate Governance System
Since the supervision of directors by the Board of Directors and the auditing of directors by the auditors arefunctioning fully at present, the Company has continued to adopt an organizational system centered on the directors
and auditors system. External directors and external Audit & Supervisory Board members are elected to ensure theeffectiveness of corporate governance.
The Company believes that external directors and external Audit & Supervisory Board members fulfill their roles inmanagement monitoring sufficiently, such as supervising the execution of business by the directors and providing
advice from an external perspective.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. State of Measures to Vitalize the General Meeting of Shareholders and Enable the Smooth Exercise of Voting Rights
Supplementary Explanations
Early Notification of General
Meeting of Shareholders
Scheduling of the General Meetingof Shareholders Avoiding PeakDays
Exercise of Voting Rights by
Electronic or Magnetic Means
Provision of Convocation Notice(Summary)in English

The convocation notice for the fiscal year ended March 31, 2023 wasposted on the Company’s website on May 29 and mailed out on June 2.
The ordinary general meeting of shareholders for the year ended March
31, 2023 was held on June 20.
Voting rights can be exercised via the Internet.
The Company prepares the convocation notice in English and posts it on
its website.

2. IR Activities
Supplementary Explanations
Regular Investor Briefings forAnalysts and Institutional Investors

Posting of IR Materials on Website

Establishment of Department
and/or Manager in Charge of IR

The Company holds regular explanatory meetings
once every six months, and also implements small
meetings in a timely manner in response to requests
from investors.
The Company discloses financial information (such as
financial results, securities reports, and quarterly
reports), timely disclosure information (IR news),
materials for explanatory meetings on financial results,
and company profile.
Officer in charge of IR :Senior Executive Officer and General Manager ofGeneral Affairs Department, Masayoshi Kunou

Explanation byRepresentativeNone

3. Measures to Ensure Due Respect for Stakeholders
Supplementary Explanations
We believe that the ideal form of company is to accompany the prosperityof society. As a company grows, in which fields of society can it be useful?
How can it contribute to the preservation of the global environment? Inorder to put this into practice, Nagawa is always conscious of the triple
bottom line. The company as a whole is determined to fulfill its corporatesocial responsibility from the three perspectives of social value,environmental value and economic value.
Implementation ofEnvironmental Activities, CSR
Activities, etc.

-Recycle
Because of the high durability of factory manufactured standard parts,
they can be recovered and reused. We strive to create products that are
free from waste by making effective use of limited resources.
-RefuseWe use environmentally conscious materials for each part used in our
products, and we try to select only materials that are really necessary.
-Reduce
In consideration of resource conservation and long life from the design
stage, parts and modules are used commonly. By completingapproximately 90% of our products at our plants, we are able to reduce
waste materials as much as possible on site.
-Repair
After customers purchase our products, we provide after sales service
nationwide. We repair our products so that they can be used for as long as
possible.
-ReuseAfter the end of the rental period, a collected Super House undergoes
strict quality checks and careful maintenance before being reborn as a
new Super House.

IV. Matters Related to the Internal Control System
1. Basic Views on the Internal Control System and the Progress of System Development
The Company’s Board of Directors has decided on the “Basic Policy for Establishing an Internal Control System”
as follows.
1. System to ensure that the execution of duties by directors and employees complies with laws and regulations andthe Articles of Incorporation(1) General Affairs Department develops regulations concerning the compliance system, establishes a code of
conduct for directors and employees of the Company and its subsidiaries (hereinafter referred to as the“Group”) to act in compliance with laws and regulations, the Articles of Incorporation, and the Group’s
management philosophy, and provides education and other services to directors and employees.
(2) The above activities reported on regularly to the Board of Directors and the Audit & Supervisory Board.
2. System for Storage and Management of Information on the Execution of Duties by Directors(1) The documents listed in the following items (including electromagnetic records; the same applies hereinafter)are preserved together with related materials in accordance with the Document Management Rules.
a. Minutes of Shareholders Meetingsb. Minutes of meetings of the Board of Directors
c. Minutes of Directors’ and General Managers’ Liaison Meetingsd. Copies of documents submitted to the tax office, other government agencies, securities exchanges, industry
associations, etc.
e. Other documents specified in the Document Management Rules(2) The place and method of storage of the above documents are a place and method such that they can be viewed
at head office within two business days when requests to do so are made by directors or auditors.
(3) Unless otherwise provided for in laws and regulations, the retention period of the above documents is specified
for each type of document in the Document Management Rules.
3. Regulations and Other Systems for Managing Risk of Loss
(1) The Company has established crisis management rules that regulate risk management systematically.
(2) In addition to meetings of the Board of Directors, the Directors’ and General Managers‘ Liaison Meeting,which is held once a week, has established and operates a management system that enables effective measures
to be taken against risks that the Group may face in the future by examining and evaluating business problems,manufacturing problems, management problems, etc., from a company-wide perspective.
4. System to Ensure Efficient Execution of Duties by Directors(1) As a system for ensuring the efficient execution of duties by Directors, the Company holds regular meetingsof the Board of Directors once a month as well as meetings to make prompt and appropriate decisions onimportant matters in a timely manner.
(2) Performance management is conducted based on annual plans formulated based on the management policy.
(3) In the course of day-to-day business execution, the Company promotes appropriate information transmission
and communication among officers and employees of the Group through the use of information systems.
At the same time, authority is delegated in accordance with the Regulations on Duties and Authority and theDivision Regulations, etc., and the responsible person executes business in accordance with the decisionmaking rules in each phase.
5. System for ensuring the appropriateness of the business operations of the Group(1) The Group strives to improve the corporate value of the Group as a whole. At the same time, the Group works
to ensure the proper operation of the Group as a whole by providing guidance, advice, and evaluation in close
cooperation within the corporate group, including commands, instructions and communication, in accordancewith the management rules of affiliated companies based on the Group Management Philosophy.
(2) Audit Office conducts internal audits of the Company’s subsidiaries.

(3) Audit Office audits the daily activities of each department as necessary.
(4) General Affairs Department, Audit Office and Audit & Supervisory Board members cooperate with each otherto investigate and examine the company-wide compliance system and whether there are any compliancerelated problems.
6. In cases where an Audit & Supervisory Board member requests the assignment of an employee to assist in theperformance of their duties, matters related to the employee, matters related to the independence of the employee
from the Directors, and matters related to ensuring the effectiveness of instructions given to the employee(1) Company auditors may order Audit Office to assist in audit operations as assistants.
(2) Personnel changes, personnel evaluations, and disciplinary actions for the above-mentioned assistants are
discussed in advance with the full-time corporate auditor and their consent obtained.
7. System for Directors and Employees to Report to Audit & Supervisory Board Members, Other Systems for
Reporting to Audit & Supervisory Board Members, and System to Ensure That a Person Who Made a Report is
Not Subject to Unfavorable Treatment on the Grounds of Making Such Report(1) Officers and employees of the Group must report promptly to Audit & Supervisory Board members facts that
may cause significant damage to the Group and other important matters for business operations.
Notwithstanding the above, Audit & Supervisory Board members may request reports on the execution ofbusiness from officers and employees of the Group at any time as necessary.
(2) Audit Office reports the results of audits to Audit & Supervisory Board members in a timely and appropriatemanner.
(3) The Group prohibits officers and employees of the Group who have made a report to Audit & Supervisory
Board members from being treated disadvantageously on the grounds that the report has been made, andmust make this fact known to all officers and employees of the Group.
8. Matters Concerning Policies for the Treatment of Expenses or Liabilities Arising from the Execution of Duties by
Audit & Supervisory Board Members
In cases where a company auditor requests the advance payment or reimbursement, etc., of expenses arising fromthe execution of their duties, the expenses or obligations are processed promptly, except in cases where it is foundto be unnecessary for the execution of the duties of that company auditor.
9. Other Systems to Ensure that Audits by Audit & Supervisory Board Members Are Conducted Effectively(1) The Audit & Supervisory Board exchanges opinions with the President and Representative Director and theaudit corporation as necessary.
(2) The contents of audits conducted by Audit & Supervisory Board members are summarized in an audit reportand submitted to the Board of Directors and the Audit & Supervisory Board.
10. System to Ensure the Reliability of Financial Reporting
In order to ensure the reliability and appropriateness of financial reporting, the Company strengthens companywide control activities and control activities for each business process, and constructs an operating system forthem.

2. Basic Views on Excluding Antisocial Forces and the Progress of System Development
Based on the Ministry of Justice’s “Guidelines for Preventing Companies from Being Harmed by Anti-Social Forces,”the Company has established the following basic policy for the purpose of eliminating anti-social forces and is taking
action accordingly.
(1) If only the person in charge or the department in charge deals with the situation, there may be a situation inwhich there is no choice but to respond to a request. Therefore, the company will respond to the request
without leaving it to the person in charge or the department in charge, and the safety of employees will beensured in relation to the unreasonable request.
(2) Establish close cooperative relationships with the Metropolitan Police Department and other prefectural
police headquarters, competent police stations, prefectural centers for the elimination of violence, lawyers,
and other external specialized agencies.

(3) In the event that the Company engages in a transaction without knowing that the other party is an anti-social
force, the transaction must be cancelled promptly when the other party is found to be, or suspected of being,an anti-social force.
(4) In the event that an employee engages in an inappropriate relationship with an anti-social force unknowingly,
the employee must notify the Company in the prescribed manner when the other party is found to be, orsuspected of being, an anti-social force.
(5) In the event that it becomes necessary to take legal action with the cooperation of the police and external
specialized agencies such as lawyers, the Company will communicate actively with these agencies and takelegal action from both the civil and criminal aspects.
(6) Even if an unreasonable demand by anti-social forces is caused by misconduct in the business activities of theCompany or misconduct by officers or employees, the Company will never engage in secret dealings to conceal
the facts. Furthermore, the government will never provide funds to anti-social forces privately.
In order to realize the above basic policy, we are promoting the development of departments and systems forsupervising responses, centralized management and storage of information, training for employees, andpreparation of a response manual.
In addition, in the event that a question arises regarding a business partner’s relationship with an anti-social
force, the Company will request an external investigation body to confirm, and determine whether or not tocommence transactions based on the result.
In addition, when concluding contracts, the Company endeavors to include a provision on cancellation of thecontract if a relationship with an anti-social force is discovered.

V. Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Yes

Supplementary Explanation—
2. Other Matters Concerning the Corporate Governance System
Please refer to the attached materials at the end of this report for the Corporate Governance System, Timely
Disclosure System, and Skill Matrix for Directors.
[Chart of the corporate governance system (reference)]

[Overview of the timely disclosure system (chart)][Skill Matrix]
Name
Osamu
Takahashi
Ryoh
Shimmura
Kenji
Sugai
Arata
HamanoMasaki
Mizoguchi

Corporate

MarketingManagement/Sales○Manufacturing/ Technology
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Business

Legal/

Finance/knowledge

Compliance

Accounting

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Nishida
Junko
Takahashi
Takahashi
Takao
ToriumiNobutaka
MotohashiInternational
Experience

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CG

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HidekiManabu○○KinoseInookaAcquisitions

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Mikio
Syuji

and

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Mergers

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