Yushin Precision Equipment : Report 2023

The impossible is the starting point for innovation.

Susumu Kotani, YUSHIN's Founder

INDEX

Vision and Strategy	Foreword, Business Philosophy and Motto	04
	History of Value-Creation	05
	Message from the President	07
	Vision and Medium-Term Management Targets	12
	Value Creation Process	13
	Human Capital - Interview with the Director in Charge	15
Business Results	The Three Pillars of YUSHIN	19
	YUSHIN's Strength	20
	Financial Highlights	21
	Non-Financial Highlights	22
	Sales by Product Category	23
	Sales by Region	24
	Sales by End-User Industry	25
Sustainable Management	Sustainability	26
	Risk Management	27
	ESG / SDGs	28
	ESG・Environmental	29
	ESG・Social	33
	External Directors Tripartite Talks	43
	ESG・Governance	47
	Skills Matrix	50
	Directors, Auditors and Executive Officers	51
	Dialogue and Engagement with Stakeholders	53
Data Collection	Financial Information	55
	Stock Information	61
	Global Network	63
	Corporate Information	65

Editorial policy	We have prepared this YUSHIN Report to help all of our stakeholders better understand how we create social and
	economic value and strive for sustainable growth. In preparing this report, we referred to the "International
	Integrated Reporting Framework" of the IFRS Foundation and the "Guidance for Collaborative Value Creation 2.0"
	of the Ministry of Economy, Trade and Industry.
Reporting period	The main period covered in this report is the fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023).
	Some of the contents include information outside of this period.
Scope of report	This report covers YUSHIN PRECISION EQUIPMENT CO., LTD. and its 13 consolidated subsidiaries.
Notes on the forecast and	The forecasts and outlooks contained in this YUSHIN Report 2023 are based on information available at the time
outlook	of preparation and are judged to be reasonable by the Company, and include potential risks, uncertainties and
other factors. Therefore, actual results may differ from the forecasts and outlooks due to changes in various
	factors.

Foreword

We sincerely thank you for reading the YUSHIN Report 2023.

We publish the YUSHIN Report (Integrated Report), a compilation of financial and non-financial information, to help all of our stakeholders better understand the YUSHIN Group. The "YUSHIN Report 2023" newly includes a growth story for the next 50 years, an interview with the Director in charge of human resources strategy, and a tripartite talks of the External Directors on future issues.

We will continue to utilize this report as a communication tool to continuously improve our corporate value.

YUSHIN PRECISION EQUIPMENT CO., LTD.

Business Philosophy and Motto

Business Philosophy

Act fairly and judiciously with all of our "strength, wisdom and courage" in order to earn the trust of our customers and shareholders.

Look outward far and wide, constantly seek technological innovation and give back to society for all it has given us.

Work cooperatively with our stakeholders in order for us to grow as a company and make the world a better place both physically and spiritually.

Motto

Today and every day,

devote yourself to even better service

and build even more faith in our company.

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04

History of Value-Creation

Since its establishment, YUSHIN PRECISION EQUIPMENT CO., LTD. has made take-out robots for plastic molding as main products, and has moved forward with the development of the industry. We have actively expanded its business overseas, and despite being the last entrant into take-out robot industry in Japan, has grown to hold the largest share of the global market in the 2000s. Based on our founder's philosophy of "The impossible is the starting point for innovation." we will continue to challenge new technologies and contribute to global society as a leading company of take-out robots.

50th Anniversary Commemorative Logo

YUSHIN PRECISION EQUIPMENT CO., LTD. celebrates its 50th anniversary in October 2023. We have created a 50th anniversary commemorative logo that expresses our desire to continue to positively challenge new frontiers for the next half century. The unusual design of the isosceles triangle with the corner pointing down, which is also used for the YUSHIN Precision Equipment company pin, represents our "unconventional and free thinking". The triangle points to the future, and the sides surrounding the Y symbolize people's determination to fly high in the future. In addition, the bright color expresses the gathering and development of individuals with many hidden possibilities.

Starting-up	Forming the basis		Boosting existing business	Accelerating overseas expansion		Building the foundation	Executing
	and expanding overseas	and challenging new areas		for growth strategy	growth strategy
1978	1989	1996	2002	2010	2017		2020

A swing type take-out robot released as the YUSHIN's first robot

(First in the Industry) SERVOLINER, all servo driven take-outrobot, released

(First in the Industry) YUSHIN robot equipped with colored touch-panelcontroller

(The Fastest in Industry) DRDIII, disc take-outrobot, released with the take-outtime of 0.069 seconds

(First in the Industry)

HSA, a take-out robot with an optimum design technology, released

(First in the Industry)	(
FRA, a high-endtake-out robot with	A
Active Vibration Control, released
INTU LINE, IoT service, released

Millions of yen	Non-consolidated sales	Consolidated domestic sales	Japan Society of Mechanical
	Engineers Technology Award	Japan Society of Mechanical	Red Dot	Machinery Industrial	JMF's Energy-Efficient
30,000		Consolidated overseas sales		Engineers Technology Award	Design Award	Design Award	Machinery Award	Medium-Term
25,000								Management Targets
20,000
15,000
10,000
5,000
0
1974	1980	1990	2000	2010			2020

1973

YUSHIN PRECISION EQUIPMENT CO., LTD. established at Higashiyama-ku Kyoto, Japan

Origins of

the Company name

1985	1988	2000	2013	2023
Relocated the headquarters to	YUSHIN AMERICA, INC. established	YUSHIN KOREA CO., LTD.	Technical Center opened	Acquisition of all shares in WEMO
Fushimi-ku Kyoto, Japan		established	in Minami-ku Kyoto, Japan	AUTOMATION AB (Sweden)

2004	2016
YUSHIN AUTOMATION LTD.	Current Headquarters opened
(UK) established	in Minami-ku Kyoto, Japan

YUSHIN's name comes from the founder's desire to "be a trustworthy company". 'Yu' means to exist and 'shin' means to trust.

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Message from the President

We aim to achieve growth through social contribution by providing "products and services that delight our customers" while improving our organizational structure to meet customers' needs and solve their problems.

We Are Committed to Growing Our Global Market Share Over the Next 50 Years.

YUSHIN celebrates its 50th anniversary in October 2023. We would like to take this opportunity to express our sincere gratitude to our customers, business partners, and all other stakeholders who have supported YUSHIN with their patronage and support.

We have pioneered the market with our unique technological capabilities and worked to increase our global market share through attentive sales, service, and quality improvement efforts. In the course of providing YUSHIN brand products to the world, we have challenged ourselves to meet the specifications and deadlines required by our customers by developing various work methods and other means.

For the next 50 years, we aim to be a company that "provides the best proposals and services around the world to satisfy and reassure our customers" in various automation equipment, centering on Cartesian coordinate robots including take-out robots, which we have cultivated in our own company. We will continue to provide new automation equipment that helps solve the demands of the times and social issues through all our employees, who are highly regarded by customers for their "diligence and sincerity," and promote the creation of a company where employees can work with a sense of fulfillment and peace of mind. We hope to move forward in the next 50 years by building a team that can create high value.

We Will Continue to Take on New Challenges Based on the Principle That "The Impossible Is the Starting Point for Innovation".

At present, there are a variety of issues and growth topics surrounding our company that need to be resolved, such as labor shortages in manufacturing locations, efforts to improve the working environment (business and human rights), the improvement of living standards especially in emerging countries, the rise of new industries such as electric vehicles (EVs), and climate change issues. In response to these challenges and changes in the environment, our company aims to provide unique and high value-added automation equipment centered on Cartesian coordinate robots and their after-sales services. As expressed in the words of our founder, "The Impossible is the starting point for innovation," we have boldly taken on the challenge of new technologies. In the future, we will continue to support factory automation by taking on the challenge of solving problems with an ever-increasing awareness of issues such as safety, productivity improvement, and energy conservation in the workplace.

We Aim to Return to a Growth Trajectory after 2025.

YUSHIN's business model is Fab - lite (minimum production facilities) Management. We recognize that strengthening our human capital is an important theme for achieving this goal. First, we have formulated a corporate identity (CI) that will serve as a compass for our employees, and we are reviewing our personnel and education systems. Human capital development is not something that can be achieved overnight. We are stepping up efforts to build an organization capable of steadily implementing human resource development from a medium- to long-term perspective. In line with our roadmap for strengthening human capital, we will strengthen our human capital investment and organizational development over the next two to three years, and after 2025, by returning to a growth trajectory through focused human capital investment, product development, and M&A effects, we will achieve our medium-term management goals of consolidated Net sales of 30 billion yen and consolidated Ordinary profit of 5 billion yen or more. We will steadily take steps toward achieving these goals.

Representative Director and President, Ph.D. in Engineering

Takayo Kotani

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Strengthening Value Creation through the Resolution of Social Issues

In August 2022, we established Sustainability Committee, which I chair, and in February 2023, we identified five materiality issues. We will work to increase YUSHIN's economic and social value by addressing these issues, while contributing to a sustainable society and environment.

For the newly identified materialities, a list of candidates was compiled from the perspective of s t a k e h o l d e r s a n d t h e Y U S H I N G r o u p . B a s e d o n discussions by members selected from each division and management meetings, these candidates were ranked according to their level of importance, and five items of high importance were identified.

First, we have set the following materialities in "Solving social issues through business": (1) Promotion of occupational safety, (2) Productivity improvement of the customers' factory, and (3) Tackling climate change . To improve occupational safety, we will contribute to factory safety by replacing manual labor with high-safety robots to perform hazardous tasks. In addition, we will provide industrial robot safety training to our customers . For ourselves and our own supply chain, we will implement ongoing efforts through the Health and Safety Committee and Human Rights Due Diligence, including suppliers.

I n a d d i t i o n t o d e v e l o p i n g h i g h - s p e e d , high - precision robots to improve our customers' productivity, we are also working to strengthen our sales and service network to ensure that our c u s t o m e r s c a n r e l y o n u s . I f o n e o f o u r r o b o t s stops due to a malfunction, it will have a significant impact on our customers' daily production volume.

1. well-developedservice system and rapid recovery support capability are required.
   With regard to responding to climate change, we will reduce CO2 emissions generated in the production process at our customers' factories by developing energy-saving products. For example, our mainstay RC-SE and YD series take-out robots are equipped with our proprietary Smart ECO Vacuum technology (PAT.P), which cuts air consumption by up to 78%, thereby contributing to energy conservation and decarbonization at customers' factories.

We Aim to Strengthen Our Management Base for Sustainable Growth.

Under "Strengthening the management base for the sustainable growth of YUSHIN Group," we have set the following materialities: (1) Strengthening human capital and (2) Strengthening corporate governance. With regard to strengthening human capital, we will foster a culture in which all employees work together to develop human resources capable of sustainable growth and innovation in order to achieve numerical management targets. We have concretized a long-term roadmap, measures, and targets, and are enhancing their effectiveness through PDCA (Plan-Do-Check-Act) cycles.

With respect to strengthening corporate governance, more than one - third of the Board of Directors is composed of External Directors, and one of the three External Directors is a woman from the capital market. The Nomination and Remuneration Committee, chaired by an External Director, ensures fair and appropriate discussions from an objective standpoint. In addition, we have established and disseminated an internal reporting system, conducted various types of compliance training for employees (Subcontract Act and Act on the Protection of Personal Information), and improved data security.

In the future, we aim to increasing effectiveness, contribute to a sustainable society and environment, and increase the corporate value of the YUSHIN Group by establishing target KPIs, monitoring functions, and other related policies.

Review of FY2023 Results and FY2024 Outlook

In FY2023, Net sales increased 7.2% year on year to 22.3 billion yen, a record high, due to increased demand for our mainstay take-out robots as well as the large scale custom-ordered medical equipment. However, Operating profit fell 8 . 7% year on year to 2 . 6 billion yen due to rising material and sea t r a n s p o r t a t i o n c o s t s a n d i n c r e a s e d l a b o r c o s t s associated with aggressive investment in human r e s o u r c e s , d e s p i t e i m p r o v e m e n t s i n o p e r a t i n g efficiency and the effect of the yen's depreciation. Although we took steps to revise product prices

in response to rising raw material prices, it was a very difficult year. For FY2024, we expect Net sales to increase 2.8% year on year to 23.0 billion yen, supported by strong demand for medical products in addition to our mainstay take-out robots, although uncertainty remains in the Chinese market. In terms of profit, we expect a 9.1% year on year decline to 2.4 billion yen due to continued high material prices and continued aggressive investment in human resources. Although the trend of declining profits is expected to continue in the current fiscal year, the effects of product price revisions are expected to be felt from the second half of the fiscal year. The need for automation against the backdrop of labor shortages in the manufacturing industry is strong worldwide, and demand continues to grow faster than expected. Rapid reinforcement of supply and service systems, including expansion of production capacity, will be required.

Together with WEMO, We Aim to Maximize Synergies.

On May 30, 2023, we acquired 100% of the shares of WEMO AUTOMATION AB, adding a new member to the YUSHIN Group . WEMO is a take - out robot manufacturer in Värnamo, southern Sweden, founded in 1987. The company has a high market share and customer base in the Nordic countries. In addition to take-out robots, the company also manufactures automation equipment and palletizing robots. We aim to be "a trusted company that provides products and

services that delight our customers," and the addition of WEMO as a group company is a major step toward achieving our goal of delivering high-quality products with attentive service in Europe, so that our customers can use our robots with confidence and increase their productivity. For many years, WEMO has been developing its business by focusing on value-added creation, such as innovation, productivity, and ease of use. WEMO and YUSHIN's goals are aligned, and as we work together to build the future, we believe that these shared values will become our group's strength, enabling us to deliver a higher level of "peace of mind" and "progress" to our customers around the world.

Through the Penetration of Corporate

Identity (CI) Activities, Employee Awareness

Is Being Raised.

As for "employee job satisfaction," we believe it is important for employees to feel that "their daily work is useful to customers" and "our work contributes to society." Through CI activities, we engage in "activities to put ourselves in the customer's shoes and think about what will benefit the customer" and "activities to engage in communication and information sharing that transcends departmental boundaries." One of the activities proposed by CI ambassadors (employees who propose and implement CI penetration measures on their own), who were selected from young and mid-career employees, was to "deliver customers'

Town hall meeting at WEMO

At the end of May 2023, a town hall meeting was held at WEMO AUTOMATION AB. President Kotani explained to WEMO employees that the values that the YUSHIN Group holds dear and the values that WEMO has cherished are similar, and that she expects the group to grow together.

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voices." By sharing information widely within the Company about what customers say in the field, we would like to make the Company a rewarding place to work, where all employees are aware of customers, think about what they can do for customers, and share their evaluations. We also believe that it is important to have a good working environment. We will always consider whether our company's organization and e n v i r o n m e n t a r e g o o d f r o m t h e p e r s p e c t i v e o f

shareholder returns with a dividend payout ratio of 30% or more. We also consider it important to i n c r e a s e i n t e r n a l r e s e r v e s s o t h a t w e c a n m a k e f l e x i b l e i n v e s t m e n t s a n d p r o v i d e p r o d u c t s a n d services on an ongoing basis as needed. We hope that our company-wide focus on investment in human resources, product development for the future, and the effects of M&A will bear fruit and put us on a growth trajectory, thereby improving ROE and PBR

Vision and Medium-Term Management Targets

Vision

A company that provides products and services that delight customers and earn their trust.

A company that contributes to society through its business activities.

A company that provides rewarding and safe work.

creating a comfortable workplace, and strive to make improvements.

We Will Strengthen Our Engagement with All Stakeholders

We w i l l c o n t i n u e t o d e v e l o p h i g h value-added products and strengthen our proposal capabilities to contribute to our customers' productivity improvement and provide the best services to satisfy and reassure them. Together with WEMO, we hope to expand our presence in the European market and accelerate our global expansion.

Y U S H I N ' s b u s i n e s s i s b u i l t o n c o o p e r a t i v e r e l a t i o n s h i p s w i t h o u r suppliers. We value the relationship of trust we have with our suppliers and w i l l c o n t i n u e t o w o r k w i t h t h e m o n issues such as our human rights policy to provide better value to society in the future.

With regard to our employees, we will work to create a "rewarding and safe work environment" where each employee can maximize his or her potential and feel happy to work for this company and with this group of people. We believe

through profit growth and strengthening shareholder returns.

Based on the founder's idea of "The impossible is the starting point for innovation", we will continue to take on challenges for the next 50 years. We look forward to your continued support for YUSHIN.

Medium-Term Management Targets

FY2023

Consolidated Net Sales: 22.3 billion yen

Consolidated Ordinary Profit: 2.7 billion yen

Consolidated Ordinary Profit Ratio: 12.5 %

EPS: 56 yen

Strategy 1 Increase Product Attractiveness

• Develop environmentally-friendlyrobots

-Contribute to energy savings with Smart ECO Vacuum (PAT.P)

• Expanded high-speed robot product line
• Achieved the clean room standards required by the medical, electronics and container industries

FRA series

Japan Society of Mechanical	Red Dot	Machinery Industrial	JMF's Energy-Efficient
Engineers Technology Award	Design Award	Design Award	Machinery Award

Medium-Term Management Targets

Consolidated Net Sales: 30 billion yen or more

Consolidated Ordinary Profit: 5 billion yen or more

Consolidated Ordinary Profit Ratio: 15 % or more

EPS: 75 yen or more

Strategy 3 Cultivate a New Generation of Pioneers

• Build the brand and human resources development policy on the concept of "Above all, reach people's hearts"
• Provide challenging jobs and a good working environment
  Establish "Innovation Project Suggestion System" to develop creative and independent human capital
• Improve the education system to support employees as they grow
  Technical training (including e-learning), next generation leadership training, and manager training
• Leverage mid-career recruits and foreign nationals to ensure global diversity
• Achieved 4.7% of female managers by promoting female power (industry average 3.6%*)

*Average in "Manufacture of production machinery" from "Basic Survey on Wage Structure" by Ministry of Health, Labor and Welfare (released in May, 2022)

that if each and every employee can use the Company as a vessel to work for society and lead a more fulfilling life, the Company itself will become stronger.

We consider the return of profits to s h a r e h o l d e r s t o b e o n e o f t h e m o s t important management issues, and we aim to achieve stable and continuous

Strategy 2	Strengthen Global Competitiveness	Strategy 4	Develop New Business
● Develop products that meet regional needs	● Launched palletizing robot in June, 2020
● Expand sales in Europe	- Attract new customers, especially in the food industry
● Target the world's leading companies / Attract more local	- Appeal small-footprint and easy-access
customers
● Enhance brand image - showroom opened

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Value Creation Process

Social issues and changing environment surrounding YUSHIN and the customers

[ Outcome ]

• Labor shortage in manufacturing industry
• Improvement in working environment in manufacturing industry, especially in developing countries
• Plastic recycling
• Growth opportunity in new industries
  (e.g. Electric vehicle, metaverse)
• Preventing global warming and energy conservation

• Improvement of living standard in countries around the world
• Growing geopolitical risks
• Serious natural disaster

Materiality P26 (Solving social issues)

• Promotion of occupational safety
• Productivity improvement of the customers' factory
• Tackling climate change

[ Business activities ]

Development

Fab-light company

Develop take-out robot business to system business

Social value

Contributing to the creation of sustainable societies

in which people around the world can lead safe and prosperous lives

Raising the standard of living of people around

●the world by supporting the delivery of high-quality,

low-cost products worldwide (Contributing to lighten

products and to improve sanitation standards through

[ Input ]

Technology

Trust

the use of plastics)

Responding to environmental conservation

●(climate change, chemical substance control measures)

Supporting production of biomass and biodegradable

●plastic moldings as effort to address plastic issues

Contributing to demand for labor saving due to labor

●shortage

●Contributing to the safety and security of factories

Management capital (FY2023)

Financial	Strong financial strength
capital	Equity ratio: 79.0%
Manufacturing	Fab-light management
capital	Capital investment: 319 million yen
Intellectual	Pursuit of take-out speed and green
engineering
capital	Research and development expenses:
	399 million yen
Human	Multinational workforce structure
Number of employees (consolidated): 715
capital
	(including foreign employees: 276)
Social and	Broad customer base
relationship	Number of sales and service base: 57
capital
Natural	Purchase of electricity from renewable
energy sources (JAPAN)
capital	Power usage: 2.195 million kWh (non-consolidated)
	Water intake: 4,336m� (HQ and factory)

Continuous user support for parts and maintenance service

Human Resource

Corporate Culture

The impossible is the starting point for innovation.

Susumu Kotani, YUSHIN's Founder

Corporate Identity (CI)

"Above all, reach people's hearts."

Management

New businesses

Global expansion

Finance

Sustainable Management

Materiality P26 (Strengthening the management base)

• Strengthening human capital
• Strengthening corporate governance

Philosophy

Economic value

• Helping client companies generate profits
• Helping client factories improve the productivity and the quality of their products
• Enhancing shareholder value

[ Output ]

Robots	Custom-Ordered	Parts and
Equipment		Maintenance
		Services
Improving customer		Improving employee
●satisfaction		●job satisfaction
Increasing the corporate	●	Cash generation
●brand value

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Human Capital - Interviews with the Director in Charge

All We Do Must on Behalf of Reaching People's Hearts.

We are committed to creating a company where a diverse workforce can maximize their abilities and work with a sense of fulfillment and peace of mind.

Q I would like to hear about your plans and progress in strengthening human capital.

A W e h a v e b e g u n f o r m u l a t i n g a n d disseminating the CI in FY2021. Currently, We are working on strengthening human capital in three stages for the period thereafter.

Q You have defined the basic concept of your personnel system. How will this approach and its operation lead to YUSHIN's future financial value?

A The philosophy of our personnel system has four pillars: (1) to encourage effor t and challenge and recognize those who achieve

Director and Executive Vice President

General Manager of Administration Division

Kota Oda

	What is your mission as the Director in
Q charge of human resources and how
	do you think about strengthening
	YUSHIN's human capital?
A	The role required of the human resources
Director is to participate in management from

a h u m a n r e s o u r c e s p e r s p e c t i v e a n d contribute to increasing corporate value and achieving sustainable growth. The following three points are important tasks.

• Human Resources Director's tasks

1. Contribute to improving management capabilities by strengthening human capital

(2) O v e r s e e a n d m a n a g e t h e p e r s o n n e l s y s t e m (recruitment and training system, evaluation system, wage system, etc.)

based on the penetration of our business philosophy, and create an environment in which each and every employee can continue to work actively and vigorously, demonstrating his or her characteristics and abilities to the fullest.

As specific measures, we are working on the following environmental improvements: (1) promotion of corporate identity (CI) activities, (2) development of a personnel system and human resources development policy that permeates our philosophy, (3) ensuring diversity of human resources, (4) enhancement of education system according to career stages, and (5) improvement of job satisfaction and work comfort.

We will aggressively invest in human resources and develop our organization across the Company to make a leap into the future.

YUSHIN's Human Resource Development Policy

We Provide Products and Services

That Reach People's Hearts and Contribute to Society

During the period from FY2021 to FY2023, we focused on building an organizational foundation for sustainable growth, and concentrated on creating a system and environment to formulate a CI, a new personnel system, and to improve employee job satisfaction. We have positioned FY2024 as a period for strengthening our human capital for further growth, and we will strengthen o u r o r g a n i z a t i o n a l d e v e l o p m e n t t h r o u g h t h e implementation of an employee survey, enhance our recruitment policy, and further strengthen our education system. From FY2026 onward, we intend to accelerate the creation of innovation and expand the growth of the organization on a global scale, while leveraging the efforts of the "period for building organizational foundations" and the "period for investing in human resources and strengthening organizational development".

Roadmap for Strengthening Human Capital

		Roadmap
FY2021 ~ Building the foundation
	of the organization
	FY2024 ~	Strengthen human capital investment
	and organizational development
Development of		FY2026 ~ Growth and expansion
organizational
infrastructure	Strengthening human
for sustainable

results; (2) to recognize those who put into practice our action guidelines; (3) to encourage the development of each individual's capabilities and sustainable employee growth; and (4) to develop a fair and open system. Our p e r s o n n e l s y s tem em p h a s iz es t h e p er s p e ct i ve of "s t re n g t h e n i n g t h e m a n a g e m e n t f o u n d a t i o n f o r sustainable growth".

In order to promote the key strategies set forth in our mid-term management goals (strengthening product competitiveness, global competitiveness, and developing new businesses), it is important to create an environment in which each and every employee can maximize his or her abilities. Strengthening the respective foundations of human resources, systems, and corporate culture will increase productivity as an organization and lead to the achievement of these goals and strategies, which in turn will lead to future financial value.

Medium-Term Management Targets

• Consolidated Net Sales : 30 billion yen or more
• Consolidated Ordinary Profit : 5 billion yen or more
• Consolidated Ordinary Profit Ratio : 15 % or more
• EPS : 75 yen or more

Strategy: Increase Product Attractiveness

Strategy: Strengthening of Global Expansion

Strategy: Develop New Businesses

1. Instill within the organization the philosophy and policies that the Company emphasizes.

We strengthen our human capital to:

1. Achieve YUSHIN's sustainable growth and increase its medium- to long-term corporate value by creating an

o r g a n i z a t i o n t h a t l e v e r a g e s t h e v a l u e s a n d perspectives of its diverse human resources.

(2) Promote the recruitment and training of human resources

[Human Capital Enhancement]

1. Promote corporate identity (CI) activities

2.Establish a personnel system and a human resources development policy that instill YUSHIN ideals.

3.Ensure diversity in human resources (Diversity Management)

4.Develop an education system that meets each career step

5.Create an Environment That Makes Work More Rewarding and Comfortable

PDCA

Strengthen

measures

growth	capital for further growth
●Formulation of	●Reinforcement of
organizational	Utilize diverse
CI	development through
●New	organizational	human resources
personnel	diagnosis survey	to expand growth
system	●Strengthen
●Creation of	recruitment policy	Create innovation
●Enhancement of
various	on a global scale
systems and	education system
environments	and programs
●Develop global
	human resources

Human		Recruiting and developing excellent human resources
Resources		and improving their professional and management skills
Systems		Establish a system to properly evaluate results and
	maximize each individual's strengths
Culture		Spread the CI guidelines and foster a corporate
	culture that encourages effort and challenge.

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	How is CI penetration linked to the
Q achievement of management
	objectives? And how do you drive
	behavioral change through CI
	penetration?
A	Another perspective that our personnel system
	emphasizes is to "disseminate within the
	organization the philosophy and action

guidelines that the Company emphasizes". In April 2020, we formulated a CI (Culture Book) and shared it within the Group in order to define the corporate philosophy and direction we should aim for, which we will continue to emphasize in the future, and to realize further growth and leaps forward. Based on the concept of "Above all, reach people's hearts", we have clarified our important ideas and action guidelines, and are working to disseminate them throughout the Group.

I have positioned the CI guidelines as the link between our management philosophy and our business activities and work style. By ensuring that these awareness and actions are thoroughly implemented in our daily work, we will be able to align our vectors with the direction the Company should take and build a human resource base.

We are developing the following specific activities to spread the concept: communications by top management and executive branding training and workshops, enhanced workplace dialog, employee-led ambassador project activities, and sharing of best practices.

We believe it is necessary to look at the effect of CI penetration on behavioral change from two aspects: (1)

CI Penetration Map

o r g a n i z a t i o n a l c h a n g e a n d ( 2 ) individual behavioral change.

We measure the i m p a c t o f o r g a n i z a t i o n a l c h a n g e t h r o u g h s u r v e y s o f C I penetration. The CI penetration survey, conducted about 1.5 years after the CI w a s f o r m u l a t e d , showed that it is d e s i r a b l e t o

promote penetration by proactively implementing the following activities as necessary for penetration: (1) initiatives that make the CI more familiar (such as the development of best practices and internal postings) and (2) initiatives that are linked to daily work (such as evaluations and awards based on the degree of CI implementation).

We also aim to incorporate and improve individual behavior into our personnel evaluation system. We have implemented a new personnel system based on our CI formulation. In it, we defined what is expected of employees in their respective jobs in terms of performance responsibility, human resource development and growth, and culture development, and set out the responsibilities and expectations of employees with respect to CI. In addition, performance and behavior evaluations are conducted as personnel evaluations to motivate employees to be aware of the CI guidelines in their work.

	Please tell us about your human
Q capital development efforts to
	achieve your management goals.
A	We have established Human Resource
Development Policy and are strengthening our

efforts through collaboration between each department and Human Resources Department.

YUSHIN's Human Resource Development Policy

1. Develop human resources who can embody and practice the corporate identity (CI) based behavioral guidelines
2. Encourage continued learning and growth as career progresses
3. Define role expectations and promote achievement of results through job performance
4. Encouraging effort and challenge, and providing various opportunities and venues for advancement
5. Supporting the realization of individual "career design"

As for employee education, we are engaged in the programs shown in the figure. Regarding the development of employees' key talents, while focusing on career and professional development in each workplace, we provide education to enhance the abilities and skills necessary to p e r f o r m t h e i r j o b s a n d s u p p o r t t h e m to a i m f o r autonomous growth. We also offer programs to develop leaders who can drive growth and challenge, as well as training to improve the management skills of managers.

As a recent initiative, we have introduced the "Innovation Project Activity Proposal System" to strengthen the development of human resources with "creativity" and "initiative" and to create opportunities for them to take on new challenges.

YUSHIN's Educational Programs

To strengthen the foundation for creating human resources that can create value in response to changes in the business environment, we will work to enhance our education system and training programs.

	Q	How do you approach employee
		surveys?
	A	As a new initiative this fiscal year, we
		conducted an organizational diagnosis survey.
		The purpose of the survey was to understand

the actual status and issues of the organization in order to improve "organizational productivity," "employee motivation," and "organizational engagement," which will lead to the consideration of future human resource policies.

The survey was conducted with the following diagnostic items: (1) penetration of philosophy and policies, (2) leadership and management, (3) human relations within the organization, (4) status of personnel system, (5) business execution mechanism, and (6) employee characteristics . As a result, 99% of all employees responded, indicating a high participation rate.

After the survey, we will plan to implement necessary measures in areas that need to be improved and strengthened, while developing our strengths obtained from the verification of the organizational diagnosis results. We hope to form a virtuous cycle of organizational and human resource management that will continue to provide new value to our customers through the growth of our employees and the enhancement of their job satisfaction.

	CI penetration workshop, training
Development of CI penetration measures in the departments	CI action award system
Creation and presentation of CI senryu poems by employees	CI-penetrating personnel evaluation system
	CI playing card production and communication
Formation of cognition	Building empathy	Promoting action
and understanding
CI Culture Book distribution	Internal development of customer feedback
Building a special CI website	Penetration through in-house newsletters

CI penetration poster production and display

Before joining

Younger employees

Middle-level employees

Leaders

Managers

the company

Training in

Pre-enrollment

Entry training

Business

skill improvement

training

Management

Management training

common

education

Follow-up training for new graduates

development education

Career support

Counselor

system

Elder system

Career design training

Professional

Technical and administrative training

education

Departmental

Departmental education, OJT

education

Compliance education

Thematic education

External training, seminars, internal study sessions

Leader development program

Selective

Overseas trainee system

education

Overseas pre-appointment education

Elder training

Counselor training

Self-development

Incentive program for correspondence

education, Online English conversation education system

Incentive program for the acquisition of qualifications

e-learning

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YUSHIN Report 2023

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