Corporate
Governance

Currently, the Company publishes the business plan for each business year; however, we do not disclose the medium term business plan. The Company seeks to achieve business innovation and sustainable growth. Therefore, even if we formulate a medium term business plan and publish numerical targets, we believe that said numerical values would have limited effectiveness. Rather, we believe that the disclosure of numerical targets could cause shareholders and investors to make judgments which are in contrast to the intentions of the Company; therefore, we do not publish a medium term business plan.
Conversely, regarding any difference between the single year business plan and the actual figures, we discuss appropriate measures through monitoring at the Board of Directors meetings and the meetings composed of management executives, and then incorporate the measures in our future business development. Based on this series of processes, we explain our business plans and future business development to shareholders and investors at financial results briefings and through other channels.

The Company recognizes that a succession plan for the Chief Executive Officer (CEO) is an important decision as we aim for sustainable growth and enhancement of corporate value over the medium to long term.
Although the Company has not defined a clear succession plan for the CEO at this time, we intend to deepen discussion in a way that is most appropriate for the Company at the Nomination and Compensation Committee meetings in the future based on suggestions from Independent Outside Directors meetings in the future based on suggestions from Independent Outside Directors.

Although the Company’s basic policy is not to own listed shares as cross shareholdings, this does not apply if such cross shareholdings are deemed necessary for business activities such as maintaining and strengthening transactions contributing to sustainable growth of the Group and enhancement of corporate value. Also, the Company determines the appropriateness of holding listed shares as cross shareholdings by annually assessing each individual issue from both qualitative and quantitative aspects. Qualitatively, we assess the necessity of holding from a perspective of the business strategy including transactions such as product development. Quantitatively, we assess the necessity based on the status of unrealized profit or loss and other factors. As of the end of the fiscal year ended August 31, 2024, the Company owned one issue of listed shares (97 million yen) as cross shareholdings for maintaining stable relationships with a joint development partner. Although it is difficult to describe the quantitative effect of those cross shareholdings, the necessity of holding is assessed based on the status of unrealized profit or loss and other factors, as aforementioned. We determine a policy for exercising voting rights for cross shareholdings based on a comprehensive judgment, including whether our voting will contribute to the enhancement of the medium to long term corporate value of the companies whose shares we hold and impact on us, rather than a uniform standard.

The Board of Directors makes a resolution on competitive transactions by Directors and transactions involving conflicts of interest between Directors and the Company as necessary based on applicable laws and the Board of Directors Regulations.

The Company believes that, in planning, manufacturing, and sales, the development of a working environment for employees working at headquarters and stores as well as in the supply chain is an important theme. We are advancing initiatives with the understanding that we have a responsibility to respect the human rights of all employees involved in the Company and to ensure their physical and mental health and safety. With a belief that creating an environment in which diverse employees feel comfortable to work enables us to respond to various eyewear needs, we are implementing various initiatives to promote diversity. Also, the Company raised the base wage for regular employees at stores twice, in September 2023 and April 2024, and revised the number of days of annual leave to improve employee treatment and contribute to local economies. We focus on creating an organization and environment for generating new value by internalizing diverse values and ways of thinking through these initiatives and by implementing various efforts with a focus on human capital.
In human resource development, we actively hire mid-career employees as immediate assets and hire new graduates on an ongoing basis, while striving to enhance training systems of all kinds for store staff and headquarter employees according to their capabilities and careers. We also focus on developing human resources. The efforts include JINS Academy, an internal educational institute established for the purpose of helping employees obtain the qualification of eyeglass manufacturing engineer, a new national qualification launched in 2022. We also provide assistance to employees who are in charge of training and development, and encourage them to attend optometry schools outside the Company. On our corporate website, we disclose our initiatives on promoting diversity and developing human resources, as well as the current state of childcare leave and other various systems, the ratios of female managers and female store managers, the ratio of employees taking childcare leave, the promotion of international personnel transfers, and our goals and directions for 2030.

100% of the Company’s corporate pension funds are defined contribution pension funds, and employees eligible for corporate pension funds manage their assets individually.

1. The Company’s management philosophy and management strategy are listed on our website. With regard to the business plan, the earnings forecast for each fiscal year is announced at the financial results briefing.
2. The Company’s fundamental thought process related to corporate governance is described in “4 4. Corporate Governance” of the Annual Securities Report.
3. The policy for determining the remuneration of Directors is described in the “[Director Remuneration] Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods” section of the Corporate Governance Report. Remuneration of Executive Officers is determined by the Board of Directors in accordance with the Executive Officer Regulations.
4. As for candidates for Director, the qualified candidates are appropriately selected based on a comprehensive consideration of factors including experience, insight, expertise, and career by the Nomination and Compensation Committee (comprised of the Representative Director and Independent Outside Directors, with Independent Outside Directors comprising a majority), a voluntary advisory body to the Board of Directors. After a resolution is passed by the Board of Directors, the selected candidates are put before the General Meeting of Shareholders for election.
5. The reasons for the selection and nomination of candidates for Director, the career background of each candidate, and the skill matrix of each Director are described in the Reference Documents for the General Meeting of Shareholders when the election of Di rectors is proposed. Appointments and dismissals of Executive Officers are resolved by the Board of Directors in accordance with the Executive Officer Regulations, taking into account business expertise, management execution ability, innovation, and leadership. At the time of each appointment or dismissal, the reasons for the appointment or dismissal are fully explained at a meeting of the Board of Directors.

The Company discloses the state of initiatives on sustainability on its corporate website. We recognize that, in sustainability management, the impact of climate change on our business is particularly an important theme, and thus make disclosure in accordance with the TCFD recommendations.
For details, please see “TCFD Report” and “Sustainability Report.”

TCFD Report

Sustainability Report

In addition to the provisions in applicable laws and the Articles of Incorporation, the details of the resolutions of the Board of Directors are stipulated in the Board of Directors Regulations. With respect to important matters other than those resolved by the Board of Directors, standards for decision making authority are defined in the Management Committee Regulations and the Business Authority Regulations, and decisions are made promptly.

The Company deliberates the independence of Outside Directors at meetings of the Board of Directors based on standards in accordance with the independence standards of the Tokyo Stock Exchange to select candidates for Independent Outside Director.

The Company has appointed five Independent Outside Directors among eight Directors, with Independent Outside Directors comprising a majority. The nomination and remuneration of Directors are appropriately managed, having established the Nomination and Compensation Committee (comprised of the Representative Director and Independent Outside Directors, with Independent Outside Directors comprising a majority), which is a voluntary advisory body to the Board of Directors.

The Articles of Incorporation stipulate that the Company shall have no more than twelve Directors. The Company’s Board of Directors is composed of eight Directors (including six Outside Directors) who possess diverse knowledge and experience, as well as the knowledge and ability to innovatively create medium to long term corporate value. The Company shall maintain an appropriate size of the Board of Directors to ensure the most efficient functioning of decision making and supervision of overall management. For Inside Directors, the Company appoints human resources who possess a high level of expertise in the Company’s business and are able to accurately and fairly supervise overall management. For Outside Directors, the Company appoints human resources who possess a wide range of knowledge necessary for management and a high level of insight in specific fields, and who have the qualities to provide accurate and fair supervision from an objective perspective independent of business execution. In addition to the skill matrix of its Directors, the Company disclosed that of Executive Officers since 2022.

Concurrent appointment as officers of other listed corporations for the Directors of the Company shall be within a reasonable scope. Furthermore, the status of important concurrent positions is disclosed annually in the convocation notice of the General Meeting of Shareholders and the Annual Securities Report.

The Company conducts self-evaluation and self-analysis of the effectiveness of the Board of Directors with the aim of enhancing the functionality of the Board of Directors and corporate value.

1. Evaluation Process
   We obtain cooperation from an external body for conducting self-evaluation and self-analysis.
   Specifically, online questionnaire surveys were conducted targeting all Directors who were members of the Board of Directors as of September 2024 and Auditors about overall matters of the Board of Directors including its composition, operation methods, discussion status, and monitoring functions. Based on the survey results, analysis, discussions, and evaluations are conducted. Surveys answers were received directly by the external body and anonymity was secured so that they could comfortably provide frank opinions.
2. Issues Identified in Last Year's Evaluation Results and Responses Thereto
   Issues:
   An issue was raised with regard to the business portfolio of the entire Group, in terms of establishing policies and periodically reviewing them from the perspectives of sustainable profitability and capital costs.
   Countermeasures:
   ・Enhance business reporting that incorporates external analysis based on market conditions and competitive conditions.
   ・Analyze the profitability and capital costs of each business on a quarterly basis and report the results to the Board of Directors.
3. Overview of This year’s Evaluation Results and Issues
   1.Summary
   Survey results and evaluation summary are as follows. Although there are some items that require improvement, favorable opinions were generally obtained and it is evaluated that the effectiveness of the Board of Directors as a whole has been ensured.
   (Composition)
   The number of Directors is appropriate. The number of Outside Directors exceeds that of internal Directors and such composition is effective for governance. As the proportion of overseas business increases, it is necessary to consider personnel appointments from an international perspective.
   (Operation)
   Frequency of the meetings and discussion hours are appropriate. Generally, no problems are found in operations of the secretariat.
   (Discussions)
   Free, vigorous, and constructive exchanges of opinions are held. While discussions on sales enhancement and marketing are actively taking place, it is necessary to improve the efficiency of corporate value creation by discussing strategies with profitability and capital costs in mind.
   2.Issues and Measures
   Issues were identified regarding whether the Company sets appropriate KPIs, both financial and non-financial, to ensure sustainable growth. In response to this issue, we are taking the following actions:
   ・Developing comprehensive KPIs for capital efficiency indicators such as ROE and ROIC, non-financial indicators, including ESG related metrics and customer satisfaction, and human capital indicators, such as recruitment and employee engagement scores, to support sustainable growth;
   ・Reviewing each indicator periodically to assess whether it is functioning appropriately toward the achievement of medium to long term strategic goals; and
   ・Introducing a management dashboard to standardize the most important management indicators in each country, set targets through benchmarking, and accurately check progress, and strengthen the control by the Directors and the management, as well as the execution capabilities of executives.
   We will enhance the decision making process that supports sustainable growth by improving the KPI setting at the Board of Directors meetings.
   We will continue to make improvements based on the evaluation results of the effectiveness of the Board of Directors to strengthen our governance system and create corporate value.

In response to requests by Directors, the Company shall provide Directors with the opportunity to acquire knowledge necessary for their duties, with the aim of enabling them to fully engage in management oversight and auditing functions. In such cases, the Company shall pay for the costs associated with knowledge acquisition.

1. Basic policy regarding general dialogue with shareholders:
   In order to contribute to the sustainable growth of the Company and the enhancement of corporate value over the medium to long term, the Company promotes constructive dialogue with shareholders to a reasonable extent. Managing Executive Officer & CFO over sees the general dialogue with shareholders and works to enhance dialogue working with related departments such as general affairs, accounting, and legal affairs in the Administration Division. The Company comprehensively considers the wishes and interests of shareholders and investors, and holds individual meetings and web or telephone conference calls as necessary. Moreover, the Company takes other measures to enhance dialogue. For example, the Company holds financial results briefings every six months, at which the management team explains the Company’s financial situation and management policy to shareholders and investors.
2. Means of dialogue other than individual meetings:
   In addition to holding biannual financial results briefings for institutional investors, the Company uses a website to disclose a summary of financial results, financial results briefing materials, monthly sales status, and other information.
3. Feedback measures:
   Information on IR activities, related feedback, and the status of changes in shareholders is reported as necessary to the management team and the Board of Directors, and is shared with Directors and the Auditors.
4. Measures for management of insider information:
   The period from the day after the end of each quarterly account settlement until the disclosure of the financial report is stipulated as a silent period. During this period, the Company refrains from commenting on financial results. Furthermore, the Company constantly pays attention to the management of insider information when engaging in dialogue with shareholders, investors, and analysts. Our basic policy regarding overall dialogue with shareholders is listed in the Disclosure Policy on our website.