Juki : CORPORATE GOVERNANCE REPORT

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.

CORPORATE GOVERNANCE REPORT

JUKI CORPORATION

Last Update: August 1, 2022

JUKI CORPORATION

Shinsuke Uchinashi

Representative Director President & COO

Contact: Human Resources & General Affairs Department

Securities Code: 6440

https://www.juki.co.jp/en/

The corporate governance of JUKI CORPORATION (the " Company") is described below.

1. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and

Other Basic Information

1. Basic Views

The Company regards the appropriate maintenance and operation of its corporate governance system as one of its most important matters from the viewpoint of ensuring sound and efficient management and responding to the trust of stakeholders and strives to develop and enhance it. We will also increase management transparency through timely and accurate disclosure of information.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code]

The information below is based on the Corporate Governance Cord as revised in June 2021. The Company complies with all the principles of the Corporate Governance Code.

[Disclosure Based on the Principles of the Corporate Governance Code]

[Principle 1.4 Cross-Shareholdings] 1. Policy on Cross-Shareholdings

Cooperative relationships with various companies are essential for business expansion and sustainable development. From a medium- to long-term perspective, the Company aims to increase its corporate value by comprehensively considering factors such as the importance of business strategies, business relationships with business partners, returns and risks, and by holding shares that are strategically necessary.

Each year, the Company examines the appropriateness of the purpose of cross-shareholdings, the status of transactions, and the benefits and risks associated with holding such as dividend income, in relation to the cost of capital. If, as a result of such verification, it is determined that the shares are not worth holding, the Company will reduce the number of shares as appropriate.

At the meeting of the Board of Directors held in July 2021, the Board of Directors examined the listed shares held by the Company as of the end of 2020 from the viewpoints of the appropriateness of purpose, investment profitability, business benefits, and holding risks in accordance with the above examination criteria and determined that the holding will continue.

2. Exercise of voting rights

While respecting the management policies of the investee companies, the Company will exercise its voting rights by comprehensively deciding whether to vote for or against each proposal from the perspectives of medium - to long-term corporate value improvement, shareholder return policy, corporate governance, and social responsibility. In particular, the Company will carefully decide whether to approve or disapprove

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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.

proposals that may damage corporate value, such as proposals for the election of officers, proposals related to anti-takeover measures, and proposals related to organizational restructuring, in the event that the investee company's business performance continues to be sluggish over the medium to long term or if misconduct or other similar incidents occur.

[Principle 1.7 Related Party Transactions]

The Company requires approval and reporting by the Board of Directors for conflict of interest transactions with officers.

In addition, the Company conducts transactions in compliance with laws and regulations in its corporate activities and conducts fair, transparent, and free competition in its commercial transactions. The same principle applies to transactions when a business partner is a major shareholder. In addition, the Company has established the "JUKI Group Employee's Code of Conduct" based on this policy to ensure that transactions with related parties do not harm the interests of the Company and shareholders.

[Principle 2.4 Policies and Goals for Ensuring Diversity in the Promotion to Core Human Resources] [Supplementary Principle 2.4.1]

(1) Promoting diversity

JUKI's diversity management system accepts diverse work styles and makes the most of every person's diverse qualities regardless of gender, nationality, or age. We aim to maximize organizational performance by leveraging the diversity of persons of all ages, gender identities, and nationalities based on the three pillars of diversity management: "promoting the advancement of female employees," "assigning global human resources," and "promoting the advancement of specialized employees." We have set a new goal of increasing the percentage of female managers to 10% of the total managers by fiscal 2026. We are finding ways to give female employees more opportunities to play active roles, gain work experience, and expand their job portfolios.

1. Global human resource development Recognizing that people are the key to business growth, we provide educational support to strengthen on-site capabilities and promote domestic and overseas
   human resource exchanges geared to globalization. On the educational front, we develop human
   resources by offering education organized by job level, function, and specialized field. We also hold remote training sessions and educate young employees in e-learning sessions at an expanded scope even during the coronavirus pandemic.
2. Internal environment development

At the end of 2019 we completed the development of an IT infrastructure called the JUKI Global Platform (JGP) to accelerate diverse work styles throughout the JUKI Group. Telework has become an urgent priority with the advent of the global pandemic. JUKI has been implementing full-fledged telework and remote meetings since April of 2020. Remote collaborations have progressed seamlessly with help from Microsoft Teams and other tools in a secure IT infrastructure environment

Detail of the Company's actions for ensuring diversity is in the Company's website as linked below. (JUKI Corporate Report)

https://www.juki.co.jp/en/ir/library/

[Principle 2.6 Roles of Corporate Pension Funds as Asset Owners]

The Company manages defined benefit corporate pension plans in accordance with its agreement. For the management of reserves, we have established a basic policy for asset management and set a policy asset composition ratio. In addition, the Pension Funds Management Committee, which consists of members selected from the Human Resources, Accounting and Finance Departments, has been established to select fund managers and products and monitor fund managers (including those engaged in stewardship activities). We will strive to improve the quality of our operations by assigning persons with appropriate qualifications to be in charge of the operations and conducting periodic training.

[Principle 3.1 Full Disclosure]

1. Company objectives (e.g., management principles), management strategies, and management plans

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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 has clarified its basic ideas in the "C orporate Philosophy," "Basic Management Policy," "Corporate Slogan," and "JUKI Corporate Code of Con duct," and posted them on the Company's website. In addition, management strategies, management plans (medium-term management plans), and management initiatives in each business field are also posted on the Company's website as "Results briefing materials" and "Business Report."

1. Basic Views and Policies on Corporate Governance As described in [1. Basic Views].
2. Policies and Procedures for Determining Remuneration for Senior Management and Directors

The relevant information is stated under [Director Remuneration] in [1. Organizational Composition and Operation] from [II. Business Management Organization and Other Corporate Governance Systems regarding Decision-Making, Execution of Business, and Oversight in Management] in this report.

1. Policies and Procedures for Appointment and Dismissal of Senior Management and Nomination of Candidates for Directors and Audit & Supervisory Board Members
   With regard to the appointment of senior management (Representative Director Chairman & CEO, Representative Director President & COO, Executive Director, and Corporate Officer with special titles) and the nomination of candidates for Director, the Company comprehensively examines them from the perspective of placing the right person in the right position, while taking into account appropriate and prompt decision- making, risk management, monitoring of business execution, and a balance that can cover each function of the Company and each business division.
   With regard to the nomination of candidates for Audit & Supervisory Board Members, the Company comprehensively examines the matter from the perspective of placing the right person in the right position while ensuring a balance between knowledge on finance and accounting, on laws, and diverse perspectives on corporate management.
   Nomination of candidates for Directors and Audit & Supervisory Board Members is subject to deliberation and decision by the Board of Directors upon receiving a report from the Designation and Reward Advisory Committee based on the above policy.
   The Designation and Reward Advisory Committee annually evaluates the status of business execution, including business performance, of senior management (Representative Director Chairman & CEO, Representative Director President & COO, Executive Director, and Corporate Officer with special titles), and deliberates on whether or not to appoint Directors, and reports the results to the Board of Directors. With regard to the dismissal of senior management (Representative Director Chairman & CEO, Representative Director President & COO, Executive Director, and Corporate Officer with special titles), the Designation and Reward Advisory Committee has established standards for dismissal in advance. If the Committee determines that such standards are met, the Designation and Reward Advisory Committee deliberates on the appropriateness of dismissal and reports its opinion to the Board of Directors. Based on this, the Board of Directors deliberates on the appropriateness and decides whether or not to dismiss.
2. Explanation of individual appointments and nominations

The Company discloses the backgrounds of each candidate for Director and Audit & Supervisory Board Member, as well as the election in the Reference Documents for the General Meeting of Shareholders.

[Supplementary Principle 3.1.3(First Part)]

(1) Our Implement of Sustainability

The JUKI Group will ramp up its efforts to solve the social challenges targeted under the SDGs. We are committed to realizing the prosperous and sustainable society the SDGs aim to create by ensuring that all of our employees steadily carry out their activities based on the Corporate Philosophy and Medium-term Management Plan. Most urgently, we will aim to achieve carbon neutrality by 2025 in order to cope with the ever-more serious crises brought by climate change and other trends in the global environment.

Detail of the Company's actions for ensuring diversity is in the Company's website as linked below. (JUKI Corporate Report)

https://www.juki.co.jp/en/ir/library/

(2) Investment in human capital

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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.

Development and assignment of human resources including investment in human capital is mentioned in Principle 2.4.1 above.

Detail of the Company's actions for ensuring diversity is in the Company's website as linked below. (JUKI Corporate Report)

https://www.juki.co.jp/en/ir/library/

(3) Investment in Intellectual Property

The Company is working actively on R&D activities regarding the products and services in accordance with "Corporate value creation flow" in order to maintain and improve business competitiveness and business continuity.

Detail of the Company's actions for ensuring diversity is in the Company's website as linked below. (Annual Securities Report (Japanese))

https://www.juki.co.jp/ir/library/(JUKI Corporate Report)https://www.juki.co.jp/en/ir/library/

[Principle 4.1 Roles and Responsibilities of the Board of Directors (1)] Supplementary Principle 4.1.1

The Company has established rules for the Board of Directors, clarifying what the Board of Directors makes decisions on its own, and delegating other matters to the management.

The management team is engaged in management based on the authority rules determined according to the scale and nature of transactions and operations.

[Principle 4.9 Independence Standards and Qualification for Independent Outside Directors]

In addition to the requirements under the Companies Act, the election of Outside Directors focuses on their abundant experience and deep insight in corporate management, etc., as well as their sufficient knowledge of corporate governance systems. The Company has designated independent directors who satisfy the requirements for independent directors set forth by the stock exchanges on which they are listed and who are unlikely to have conflicts of interest with general shareholders.

[Principle 4-11. Preconditions for Board of Directors and Audit & Supervisory Board Effectiveness] Supplementary Principle 4.11.1

The Company strives to maintain a small number of members of the Board of Directors in order to enhance the substance of discussions at the Board of Directors.

The Board of Directors consists of Directors who are elected based on the fields and experience of each business necessary for business operations. The Board of Directors consists of five members, three full-time and two outside members, and strives to maintain transparency and soundness of management while maintaining a balance.

The composition of the Board of Directors (Skill Matrix) is shown at the end of this document.

[Supplementary Principle 4.11.2]

The Company discloses important concurrent positions held by Directors and Audit & Supervisory Board Members at other listed companies in the Business Report and Reference Materials for the General Meeting of Shareholders.

[Supplementary Principle 4.11.3]

The operating status of the Company's Board of Directors is as follows.

1. In accordance with the Board of Directors Regulations, the Board of Directors selects all important matters as proposals and meets monthly in principle to discuss them in a timely and appropriate manner.
2. Prior to deliberation by the Board of Directors, problems, issues, risks and their countermeasures are clarified at meetings such as the Corporate Strategy Committee, and the effectiveness of discussions is enhanced.
3. In order for the Board of Directors to conduct smooth and active discussions and conduct sufficient deliberations, materials for the Board of Directors are distributed in advance, and in particular, the content is explained to Outside Directors and Outside Audit & Supervisory Board Members in advance.
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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 conducts self-evaluation through questionnaires once a year for Directors and Audit & Supervisory Board Members, and after totaling the self-evaluation, the Board of Directors conducts

"Analysis and Evaluation of the Effectiveness of the Board of Directors."

In the evaluation for fiscal 2021, we confirmed that the effectiveness of the Board of Directors as a whole is ensured for the following reasons.

1. The composition of the Board of Directors is appropriate in light of the content and scale of the Company's business.
2. The management of the Board of Directors is appropriately conducted from the viewpoints of the frequency of meetings and the content of materials.
3. The deliberations of the Board of Directors are appropriate from the perspective of the content of the deliberations, such as the selection of agenda items, the deliberation time, and the statements of the attendees.
4. The system to support Directors is appropriate from the perspective of opportunities to exchange information with top management or to deepen understanding of the contents of proposals and business other than the Board of Directors.
   Based on the "Analysis and Evaluation of the Effect iveness of the Board of Directors of the fiscal 2021", the Board of Directors will make further efforts to ensure the effectiveness of the Board of Directors by further enhancing of closer communication, further improving the amount of materials to be distributed, and the time for deliberation etc. at the Board of Directors. In this way, the Board of Directors will aim to build a more satisfactory corporate governance system and further increase corporate value.

[Principle 4-14. Training for Directors and Audit & Supervisory Board Members] Supplementary Principle 4.14.2

The Company has appointed persons who can fully fulfill the roles and responsibilities expected of Directors and Audit & Supervisory Board Members, including Outside Officers.

In light of this, the Company promotes the understanding of the roles and responsibilities expected of Directors, including legal knowledge, of newly appointed officers, who have been promoted internally, by utilizing external training sessions and such.

As for Outside Directors and Outside Audit & Supervisory Board Members, the Company conducts activities to understand the business and functions of the Company at the time of their appointment and periodically thereafter.

[Principle 5.1 Policy for Constructive Dialogue with Shareholders]

In order to promote constructive dialogue with shareholders, the Company provides easy-to-understand explanations of its management company's management policy and management status, and strives to gain the understanding of shareholders.

1. Dialogue with shareholders is supervised by the officer in charge of IR, and efforts are made to enable constructive dialogue through activities such as financial results briefings and individual interviews.
2. In order to support dialogue with shareholders, the Company cooperates with related divisions such as finance and accounting, and actively cooperates in creating materials and sharing necessary information.
3. As a means of dialogue other than individual interviews, the Company holds financial results briefings for institutional investors and analysts twice a year (in the interim and at the end of the fiscal year) in which the President himself provides explanations.

Every year, after the General Meeting of Shareholders, we hold product tours at our exhibition room for those who wish to attend.

1. Opinions obtained through dialogue with shareholders are aggregated as necessary and reported to the management and related divisions to share information.
2. The period prior to the announcement of financial results is a silent period in which dialogue with investors is restricted.

2. Capital Structure

Foreign Shareholding Ratio	From 10% to less than 20%

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