Note: This document has been translated from a part of the Japanese original for reference purposes only. In
the event of any discrepancy between this translated document and the Japanese original, the original shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.
(Stock Exchange Code 1961)
June 9, 2020
To Shareholders with Voting Rights:
Hirokazu Ishida
Representative Director and President
SANKI ENGINEERING CO., LTD.
8-1, Akashicho, Chuo-ku, TokyoNOTICE OF CONVOCATION OF
THE 96th ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
Please be informed that the 96th Annual General Meeting of Shareholders of SANKI ENGINEERING CO.,LTD. (the “Company”) will be held for the purposes as described below.
To prevent the spread of COVID-19, the national and local governments have been strongly requesting
citizens to stay home. Carefully considering this situation, we have decided to take appropriate measures toprevent infections and hold the General Meeting of Shareholders.
From the perspective of infection prevention, for this General Meeting of Shareholders, we strongly urge all
shareholders to exercise their voting rights in writing or via the Internet beforehand and refrain from visiting
the venue on the day of the General Meeting of Shareholders, irrespective of their health condition.
You may exercise your voting rights by either of the methods below. Please review the attached Reference
Documents for the General Meeting of Shareholders, and exercise your voting rights by no later than 5:00 p.m.
Japan time on Wednesday, June 24, 2020.
[Exercising Voting Rights in Writing]
Please indicate your proposals on the enclosed Voting Rights Exercise Form, and return it such that it
arrives by the above deadline for exercise.
[Exercising Voting Rights via the Internet]
Please review the “Guide to Exercising Voting Rights via the Internet” on page 5 (Japanese version only),
access the voting rights exercise website designated by the Company (https://www.web54.net), and enter yourproposals by the above deadline for exercise, in accordance with the on-screen instructions.
Please note that we will not be giving out souvenirs to shareholders who attend the meeting this time.

-1-1. Date and Time:Thursday, June 25, 2020 at 10:00 a.m. Japan time
(Reception opens: 9:00 a.m.)

2. Place:

Sakura Room, 4th Floor, Main Building, Imperial Hotel Tokyo
1-1, Uchisaiwai-cho 1-chome, Chiyoda-ku, Tokyo

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
96th Fiscal Year (April 1, 2019 - March 31, 2020) and results of audits by the
Accounting Auditor and the Audit & Supervisory Board of the Consolidated
Financial Statements
2. Non-consolidated Financial Statements for the Company’s 96th Fiscal Year
(April 1, 2019 - March 31, 2020)
Proposals to be resolved:
Proposal 1:
Appropriation of Surplus
Proposal 2:
Election of 10 Directors
Proposal 3:
Election of 1 Audit & Supervisory Board Member
Proposal 4:
Election of 1 Substitute Audit & Supervisory Board Member
Proposal 5:
Revision of Amount of Remuneration for External Directors

1.
2.

3.
4.

English versions of this Notice of Annual General Meeting of Shareholders and the Reference Documents for the General
Meeting of Shareholders will be posted on the Company’s website (https://www.sanki.co.jp/).
Of the documents to be included in this notice of the General Meeting of Shareholders, the Consolidated Statement of
Changes in Equity, Statement of Changes in Equity, Notes to the Consolidated Financial Statements and Notes to the
Non-consolidated Financial Statements are posted on the Company’s website (https://www.sanki.co.jp/) pursuant to laws
and regulations as well as Article 16 of the Articles of Incorporation of the Company, and are therefore not provided in the
Appendix of this notice of the General Meeting of Shareholders. The Consolidated Financial Statements andNon-consolidated Financial Statements described in the Appendix of this notice of the General Meeting of Shareholders are
excerpt of the Consolidated Financial Statements and Non-consolidated Financial Statements audited by the Accounting
Auditor and the Audit & Supervisory Board Members in preparing the accounting audit report and audit report,
respectively.
Should the Appendix and the Reference Documents for the General Meeting of Shareholders require revisions, the revised
versions will be posted on the Company’s website (https://www.sanki.co.jp/).
When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk.

-2-Requests to All Shareholders
•

•

•
•

•
•

Depending on the developments of the COVID-19 outbreak and announcements, etc. to be made by thegovernment, etc. by the day of the General Meeting of Shareholders, the response method might bealtered. Please be sure to check the Company’s website (https://www.sanki.co.jp/) for the latest
information.
The exercising of voting rights using the Voting Rights Exercise Form comes with the risk of infection in
the process of returning the form, and in the operations of consolidating results. Therefore, if you will be
exercising your voting rights beforehand, as far as possible, please exercise your voting rights via theInternet.
We will prepare alcohol disinfectant for shareholders near the reception at the venue.
If you will be attending the meeting, please bring and wear a face mask on the day.
We shall be measuring the temperatures of all attendees near the reception at the venue. If you have afever, are feeling unwell, or have been overseas in the past two weeks, you may be refused entry to themeeting and we may request for you to leave. For shareholders who have been overseas in the past weeks,
please report it at the reception.
The operating staff at this General Meeting of Shareholders shall be wearing masks as they measuretemperatures and check whether shareholders are feeling unwell.
From the standpoint of shortening the duration of this General Meeting of Shareholders in order toprevent the spread of COVID-19, the explanation of the matters to be reported (including the audit
report) and the proposals at the meeting hall may be abbreviated. We hereby request all shareholders toread this Notice of Convocation of the General Meeting of Shareholders beforehand.

-3-

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal 1:

Appropriation of Surplus

The Company considers the return of profits to shareholders an important management policy.
The fiscal year under review (FY2019) is the first year of Phase 2 of the medium-term management plan
“Century 2025.” Among the Group’s management goals for Phase 2, a total payout ratio of 70% or higher
has been set as a target, with a basic policy of paying a stable dividend of 60 yen or more per share eachyear.
We deliberated on the dividend amount after careful examination of the impact of the COVID-19
outbreak on social conditions and the Company’s business results. Even under such circumstances, we wereable to record a profit exceeding our forecast and celebrate our 95th anniversary. Based on the above, wewish to contribute to the recovery and revitalization of the economy after the COVID-19 outbreak ends by
retuning profits to shareholders, who are stakeholders of ours.
Accordingly, the Company proposes a year-end dividend for the fiscal year under review as follows, inaddition to a special dividend.
1. Items Related to the Year-end Dividend(1) Items related to the allocation of dividend property to shareholders and its total amount
60 yen per common share of the Company(Including an ordinary dividend of 35 yen and a special dividend of 25 yen)
Total of 3,458,082,840 yen(2) Effective date of the appropriation of surplus
June 26, 2020
Furthermore, the Company paid an interim dividend of 35 yen per share, and therefore the total
dividend for the fiscal year under review will be 95 yen per share.

-4-

Proposal 2:

Election of 10 Directors

The terms of office of all Directors (12 Directors) will expire at the conclusion of this year’s Annual
General Meeting of Shareholders. Accordingly, the election of 10 Directors is proposed.
The candidates for Director are as follows:

No.

Name

Current positions and responsibilities

1

Reappointed

Tsutomu
Hasegawa

Representative Director andChairman (of the Board)
Representative Director andPresident
Director; Senior Executive Officer;
General Manager, Mechanical &Electrical Contracting Headquarters
Director; Senior Executive Officer;
General Manager, Plants &Machinery Systems Headquarters
Director; Managing Executive
OfficerFull-time Audit & Supervisory Board
MemberExecutive Officer; General Manager,
Accounting Division2

Reappointed

Hirokazu Ishida

3

Reappointed

Eiji Mitsuishi

4

Reappointed

TakashiMotomatsu

5

Reappointed

Masayuki Kudo

6

Newly
appointed

Hirotoshi Fukui

7

Reappointed

Yoshio Kawabe

8

Reappointed

Yukiteru
Yamamoto

External
Independent

External Director

9

Reappointed

Makoto Nukaga

External
Independent

External Director

10

Reappointed

Kazuhiko
Kashikura

External
Independent

External Director-5-

Attendance at
the Board of
Directors’
meetings
100%(12/12)100%(12/12)100%(12/12)91%(11/12)100%(12/12)––91%(11/12)100%(12/12)100%(12/12)No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1975
June 2008
April 2009
April 2010

Tsutomu Hasegawa(March 4, 1953)
Reappointed

1

April 2011
April 2012
June 2012
April 2013
April 2015
April 2020

Joined the Company
Executive Officer; Deputy General Manager, Tokyo Branch,
Mechanical & Electrical Contracting Headquarters
Executive Officer; General Manager, Business Strategy
Division, Mechanical & Electrical Contracting Headquarters
Superior Executive Officer; General Manager, Tokyo Branch,
Mechanical & Electrical Contracting Headquarters
Managing Executive Officer; General Manager, Tokyo Branch
Senior Executive Officer; General Manager, Sales
Administration Division
Director; Senior Executive Officer; General Manager, Sales
Administration Division
Representative Director; Senior Executive Officer; General
Manager, Mechanical & Electrical Contracting Headquarters
Representative Director and President
Representative Director and Chairman (of the Board)
To present

Number ofshares of theCompany held

27,900<Responsibilities>
Secretarial Office, CSR Promotion Division and Chief Cost Inspector Office2

Reason for nomination
Since April 2015, as Representative Director, President and Executive Officer, Mr. Tsutomu Hasegawa has continuallydemonstrated his leadership in a myriad of situations and engaged in business operations. Since April 2020, he has
displayed his managerial abilities, insight and capabilities cultivated over the years in the position of Representative
Director and Chairman. The Company has judged that he is essential for the Group to enhance its corporate value, and has
therefore nominated him as a candidate for Director.
April 1983
Joined the Company
April 2012
Executive Officer; Deputy General Manager, Sales
Administration Division
April 2013
Executive Officer; General Manager, Hokkaido Branch Office
April 2016
Managing Executive Officer; General Manager, Sales
Administration Division, Mechanical & Electrical Contracting
Hirokazu Ishida
Headquarters(January 22, 1959) June 2017
Director; Managing Executive Officer; General Manager, Sales
21,900Administration Division, Mechanical & Electrical Contracting
Reappointed
Headquarters
Director; Senior Executive Officer; General Manager,
April 2018
Management Planning Office
April 2020
Representative Director and President
To present<Responsibilities>
Management Planning Office and Legal Affairs Office
Reason for nomination
Since joining the Company, Mr. Hirokazu Ishida engaged in the facilities construction business for many years, andpossesses abundant experience, knowledge and achievements related to the Company’s business. He also has experience
serving in the important post of General Manager of the Management Planning Office, and has been doing his utmost to
promote strengthening of the management foundation and the long-term vision “Century 2025” since April 2020, as
Representative Director and President. The Company has judged that he is essential for the Group to enhance its corporate
value, and has therefore nominated him as a candidate for Director.

-6-

No.

Name
(Date of birth)

Eiji Mitsuishi(February 24, 1952)
Reappointed

3

Past experience, positions, responsibilities,
and significant concurrent positions
April 1972
April 2011
April 2013
April 2017
June 2017

Joined the Company
Executive Officer; Deputy General Manager, Chubu BranchManaging Executive Officer; General Manager, Chubu Branch
Senior Executive Officer; General Manager, Mechanical &Electrical Contracting Headquarters
Director; Senior Executive Officer; General Manager,
Mechanical & Electrical Contracting Headquarters
To present

Number ofshares of theCompany held

26,600<Responsibilities>
Mechanical & Electrical Contracting Headquarters, Labor Safety, Health, Quality
Management & Environment Promotion Office
Reason for nomination
Mr. Eiji Mitsuishi has many years of experience in operation and division management of the facilities construction
business. Currently, he serves as General Manager of the Mechanical & Electrical Contracting Headquarters, and is making
efforts in the promotion of workstyle reforms at construction sites and the prevention of work accidents. The Company has
judged that his above experience and achievements are essential for the Group to further enhance its corporate value, andhas therefore nominated him as a candidate for Director.

-7-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1976
April 2012
October 2012
June 2014

Takashi Motomatsu(February 1, 1953)
Reappointed

April 2015
June 2015

4
April 2018

Joined the Company
Executive Officer; Deputy General Manager, Environmental
Systems Administration Division
Executive Officer; General Manager, Environmental Systems
Administration Division
Managing Executive Officer; General Manager, Plants &Machinery Systems Headquarters; General Manager,
Environmental Systems Administration Division
Managing Executive Officer; General Manager, Plants &Machinery Systems Headquarters
Director; Managing Executive Officer; General Manager, Plants& Machinery Systems Headquarters
Director; Senior Executive Officer; General Manager, Plants &Machinery Systems Headquarters
To present

Number ofshares of theCompany held

16,900<Responsibilities>
Plants & Machinery Systems Headquarters
Reason for nomination
Mr. Takashi Motomatsu has many years of experience in operation and division management of the environmental systems
business. Currently, as General Manager of the Plants & Machinery Systems Headquarters, he contributes to thedevelopment of the machinery systems business and the environmental systems business. The Company has judged that his
above experience and achievements are essential for the Company to further enhance corporate value, and has therefore
nominated him as a candidate for Director.

-8-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1985
June 2014
April 2017

Masayuki Kudo
(June 27, 1959)
Reappointed

5

6April 2018
June 2018

Joined the Company
Executive Officer; General Manager, Facility Systems Division
Managing Executive Officer; Deputy General Manager,
Mechanical & Electrical Contracting Headquarters
Managing Executive Officer
Director; Managing Executive Officer
To present

Number ofshares of theCompany held

11,100<Responsibilities>
Information Systems Office, International Business Administration Division of the
Mechanical & Electrical Contracting Headquarters, Facility Systems Division andReal Estate Business Office

Reason for nomination
After getting abundant operational experience, including experience overseas, as an engineer in the facilities construction
business, Mr. Masayuki Kudo served as General Manager of the Facility Systems Division. Currently, he is demonstrating
his outstanding skills as an officer responsible for the Information Systems Office, the International Business Office, theFacility Systems Division and the Real Estate Business Office. The Company has judged that his above experience andinsights are essential for the Group to enhance its corporate value, and has therefore nominated him as a candidate for
Director.
April 1982
Joined the Company
April 2012
Executive Officer; General Manager, Technology Development
Hirotoshi Fukui
Division(May 12, 1958)
April 2013
Executive Officer; General Manager, Technology Research
16,200Institute
Newly appointed
April 2016
Executive Officer
June 2016
Full-time Audit & Supervisory Board Member
To present
Reason for nomination
Since joining the Company, Mr. Hirotoshi Fukui has amassed a wide range of operational experience as an engineer in thefacilities construction business. Thereafter, he served as the manager responsible for the technology development
departments, and currently contributes to the enhancement of corporate governance as a Full-time Audit & Supervisory
Board Member. The Company has judged that his above experience and insights are essential for the Group to enhance its
corporate value, and has therefore nominated him as a candidate for Director.

-9-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1984
April 2015
June 2015

7

8

Yoshio Kawabe(October 31, 1960)

April 2017

Reappointed

June 2017

Joined the Company
Executive Officer; General Manager, Administration Division
Director; Executive Officer; General Manager, Administration
Division
Director; Executive Officer; General Manager, Accounting
Division
Executive Officer; General Manager, Accounting Division
To present

Number ofshares of theCompany held

6,800

<Responsibilities>
Accounting Division
Reason for nomination
Since joining the Company, Mr. Yoshio Kawabe has engaged mainly in accounting and finance-related operations and thepromotion of internal control. After serving as a manager responsible for the administration departments including generalaffairs and human resources, he currently serves as General Manager of the Accounting Division and focuses on capital andfinance policies. The Company has judged that his above experience and insights are essential for the Group to enhance its
corporate value, and has therefore nominated him as a candidate for Director.
April 1977
Joined MITSUI LIFE INSURANCE MUTUAL COMPANY
June 2008
Director; Managing Executive Officer, MITSUI LIFE
INSURANCE COMPANY LIMITED
April 2009
Representative Director and President; Chief Operating Officer;
Yukiteru Yamamoto
General Manager, Operational Improvement Promotion Division(June 3, 1953)
April 2012
Representative Director and President; Chief Operating Officer
June 2013
Special Advisor
7,000
External
June 2014
External Director, the Company
Independent Officer
To present
Reappointed
April 2015
Advisor, MITSUI LIFE INSURANCE COMPANY LIMITED
March 2017Retired from MITSUI LIFE INSURANCE COMPANY
LIMITED
Reason for nomination
Mr. Yukiteru Yamamoto has served in positions including Representative Director and President of MITSUI LIFE
INSURANCE COMPANY LIMITED (currently TAIJU LIFE INSURANCE COMPANY LIMITED), and was also active
as an Executive Member of the Policy Board of the Japan Business Federation from August 2013 to March 2017, and hethus possesses abundant operational experience and wide-ranging knowledge regarding corporate management. In order toutilize his experience and insight developed through this background, the Company has nominated him again as a candidate
for External Director.

- 10 -

No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1970
May 1988
May 1990

May 1991
May 1992
September 1994
Makoto Nukaga
March 1996
(December 21, 1946)
October 1997

9

External
Independent Officer
Reappointed

June 1998
June 2010
December 2010
January 2011
September 2015
June 201610

Joined The Bank of Japan
Manager, Overseas Research Section, Research and Statistics
Department
Manager, Management Planning Section, Management
Administration Department
Manager, General Affairs Section, International Department
General Manager, Niigata Branch
Examiner, Examination Department
General Manager, Kobe Branch
Retired from The Bank of Japan
Director and Vice President, Chibagin Research InstituteCorporation
Director and President
Director and Chairman
Retired from Chibagin Research Institute Corporation
President, Organization for Workers’ Retirement Allowance
Mutual Aid
Retired from Organization for Workers’ Retirement Allowance
Mutual Aid
External Director, the Company
To present

Number ofshares of theCompany held

11,300Reason for nomination
Mr. Makoto Nukaga worked at The Bank of Japan for many years, and served in managerial positions in key departments,
in addition to serving as Director and President of Chibagin Research Institute Corporation and President of theOrganization for Workers’ Retirement Allowance Mutual Aid, etc., and he thus possesses abundant operational experienceand wide-ranging knowledge. In order to utilize his experience and insight developed through this background, theCompany has nominated him again as a candidate for External Director.
April 1977
Joined Mitsui Bank Co., Ltd.
June 2005
Executive Officer; General Manager, Operations Audit Division,
Sumitomo Mitsui Banking Corporation
April 2008
Executive Officer
April 2008
Retired from Sumitomo Mitsui Banking Corporation
Kazuhiko Kashikura May 2008
Representative Director and President, SMBC Staff Service Co.,(April 13, 1954)
Ltd.
May 2013
Retired from SMBC Staff Service Co., LTD.
1,500
External
June 2013
Representative Director and President, SMBC Finance Service
Independent Officer
Co., Ltd.
Reappointed
June 2017
Representative Director and Chairman
June 2018
External Director, the Company
To present
Retired from the position of Representative Director andChairman, SMBC Finance Service Co., Ltd.
Reason for nomination
Mr. Kazuhiko Kashikura has served as Executive Officer of Sumitomo Mitsui Banking Corporation and a top executive at
the same group companies and he thus has abundant experience and broad insight in corporate management. In order toutilize his experience and insight developed through this background, the Company has nominated him again as a candidate
for External Director.

(Notes) 1. There are no special interests between the candidates and the Company.
2. (1) Mr. Yukiteru Yamamoto, Mr. Makoto Nukaga, and Mr. Kazuhiko Kashikura are candidates for External Director.
(2) The Company has registered Mr. Yukiteru Yamamoto, Mr. Makoto Nukaga, and Mr. Kazuhiko Kashikura with theTokyo Stock Exchange as Independent Officers with no possibility of a conflict of interest occurring with generalshareholders, whose designation is required by the Exchange. If they are reappointed and assume office as Directors,
they will contribute to be Independent Officers.
3. Number of years since candidates for External Director were appointed External Director(1) Mr. Yukiteru Yamamoto’s term in office as External Director will be six years at the conclusion of this General
Meeting of Shareholders.
(2) Mr. Makoto Nukaga’s term in office as External Director will be four years at the conclusion of this General Meeting- 11 -

of Shareholders.
(3) Mr. Kazuhiko Kashikura’s term in office as External Director will be two years at the conclusion of this General
Meeting of Shareholders.
4. Liability limitation agreements with candidates for Director
The Company has entered into agreements with Mr. Yukiteru Yamamoto, Mr. Makoto Nukaga, and Mr. Kazuhiko
Kashikura to limit their liabilities as provided for in Article 423, Paragraph 1, of the Companies Act, and the maximum
amount of liability under this agreement shall be the greater of 10 million yen or the minimum amount stipulated in laws
and regulations.
5. If Mr. Yukiteru Yamamoto is reappointed and assumes office as Director, he will assume the office of Chair of the Boardof Directors.

- 12 -

Proposal 3:

Election of 1 Audit & Supervisory Board Member

The term of office of Audit & Supervisory Board Member Hirotoshi Fukui will expire at the conclusionof this year’s Annual General Meeting of Shareholders. Accordingly, the election of 1 Audit & Supervisory
Board Member is proposed.
Furthermore, the Audit & Supervisory Board has given its approval to this proposal.
The candidate for Audit & Supervisory Board Member is as follows:
No.

Name
(Date of birth)

Past experience, positions
and significant concurrent positions
April 1974
April 2010

Kazuo Saito(August 23, 1951)
Newly appointed

1

April 2011
April 2013
June 2014

April 2020

Joined the Company
Executive Officer; General Manager, Hokkaido Branch Office,Mechanical & Electrical Contracting Headquarters
Executive Officer; General Manager, Hokkaido Branch Office
Executive Officer; General Manager, Technical Administration
Division, Mechanical & Electrical Contracting Headquarters
Managing Executive Officer; General Manager, Technical
Administration Division, Mechanical & Electrical Contracting
Headquarters
Managing Executive Officer
To present

Number ofshares of theCompany held

19,500Reason for nomination
Mr. Kazuo Saito engages in the technical field of the facilities construction business of the Company. He has been involvedin numerous construction management projects, and has abundant operational experience, such as in department
management and in serving as the manager of technical administration departments in the facilities construction business.
In order to utilize his abundant operational experience and insights developed through this background to audit theCompany, the Company has nominated him as a candidate for Audit & Supervisory Board Member.
(Notes) 1. There are no special interests between the candidate and the Company.
2. Liability limitation agreement with the candidate for Audit & Supervisory Board Member
If Mr. Kazuo Saito is elected and appointed as Audit & Supervisory Board Member, the Company intends to enter into
an agreement with him to limit his liability as provided for in Article 423, Paragraph 1 of the Companies Act, and the
maximum amount of liability under this agreement shall be the greater of 10 million yen or the minimum amountstipulated in laws and regulations.

- 13 -

Proposal 4:

Election of 1 Substitute Audit & Supervisory Board Member

Substitute Audit & Supervisory Board Member Takaya Abe was elected at the 95th Annual General
Meeting of Shareholders held on June 27, 2019, and the effectiveness of his election will expire at theconclusion of this year’s Annual General Meeting of Shareholders. Therefore, in order to prepare for cases
where the number of Audit & Supervisory Board Members falls below prescribed by laws and regulations,the Company proposes the election of Mr. Takaya Abe as a substitute Audit & Supervisory Board Member.
Furthermore, the Audit & Supervisory Board has given its approval to this proposal.
The candidate for Substitute Audit & Supervisory Board Member is as follows:
Name(Date of birth)

Takaya Abe(February 19, 1952)
External
Independent Officer
Reappointed

Past experience, positions
and significant concurrent positions
January 1982
April 1984
May 1995
May 2001
July 2010
June 2014
July 2014

Joined Shinwa Audit Corporation
Registered as certified public accountant
Partner, Asahi Audit Corporation
Representative Partner
Partner, KPMG AZSA LLC
Retired from KPMG AZSA LLC
Established Abe Certified Public Accountant Office
To present<Significant concurrent position>
Certified public accountant (Abe Certified Public Accountant Office)Number ofshares of theCompany held

None

Reason for nomination
In order to utilize Mr. Takaya Abe’s expertise and experience, etc. developed as a certified public accountant to strengthen theaudit systems of the Company, the Company has nominated him as a candidate for substitute External Audit & Supervisory Board
Member. Although he does not have experience of being directly involved in corporate management, for the reasons stated above,
the Company believes that he will be able to execute the duties as an External Audit & Supervisory Board Member of theCompany properly.
(Notes) 1. There are no special interests between the candidate and the Company.
2. (1) The candidate is a candidate for substitute External Audit & Supervisory Board Member.
(2) If Mr. Takaya Abe assumes office as Audit & Supervisory Board Member, the Company intends to register him with
the Tokyo Stock Exchange as Independent Officer with no possibility of a conflict of interest occurring with generalshareholders, whose designation is required by the Exchange.
3. Liability limitation agreement with the candidate for substitute External Audit & Supervisory Board Member
If Mr. Takaya Abe is appointed as Audit & Supervisory Board Member, the Company intends to enter into an agreementwith him to limit his liability as provided for in Article 423, Paragraph 1 of the Companies Act, and the maximum
amount of liability under this agreement shall be the greater of 10 million yen or the minimum amount stipulated in laws
and regulations.

- 14 -

Proposal 5:

Revision of Amount of Remuneration for External Directors

Regarding remuneration amounts for the Company’s Directors, it was approved at the 94th Annual
General Meeting of Shareholders held on June 27, 2018 that remuneration shall be not more than 650 million
yen per annum for Directors (including 50 million yen per annum for External Directors).
As stated in Proposal 2, the election of 3 External Directors is proposed. In order to further strengthen
corporate governance, after the conclusion of this year’s Annual General Meeting of Shareholders, 1External Director will become a full-time Audit & Supervisory Board Member, and the Company plans toappoint him as Chair of the Board of Directors, in order to utilize his experience and insights to an evengreater extent than before.
On top of this, in line with changes in economic conditions and the business environment in recent years,
the roles and duties required from External Directors can be expected to increase in the future. Accordingly,
without changing the total amount of remuneration for Directors (not more than 650 million yen per year),the Company proposes to revise only the amount of remuneration for External Directors from not more than
50 million yen per year to not more than 100 million yen per year.
There are currently 12 Directors (including 3 External Directors). If Proposal 2 is approved as originallyproposed, there will be 10 Directors (including 3 External Directors).

- 15 -

<Reference>[Policy on nomination of a candidate for Director and Audit & Supervisory Board Member]
The Company established the “Sanki Engineering Corporate Governance Guidelines” and stipulated apolicy about nomination of a candidate for Director and Audit & Supervisory Board Member as follows.
1. Candidates for Director(Policy on nomination of candidates for Director)(1) The Board of Directors shall nominate as a candidate for Director a person who has abundant operational
experience and knowledge, excellent insight, and high ethics and is expected to fulfill the role of a Director and theBoard of Directors as listed below.
(2) The Board of Directors shall nominate as a candidate for External Director a person who is expected to provide
advice from an independent and objective standpoint in addition to qualifications listed in the preceding paragraph.
(3) If any Director becomes unable to fulfill his/her duties as the Director of the Company for health or medical
reasons or causes any damage to the corporate value of the Company due to nonfulfillment of his/her duties, anagenda regarding the dismissal of the Director shall be deliberated by the Board of Directors through examinationby the Advisory Committee on Nomination and Remuneration.
(Roles of Directors and the Board of Directors)(1) Directors and the Board of Directors shall make effort to realize sustainable growth and enhance corporate value
over the medium to long term as entrusted by the shareholders by realizing efficient and effective corporate
governance, conducting important decision-making of the Company, and supervising execution of duties.
(2) Directors and the Board of Directors shall make effort to build internal control systems, establish risk management
systems, and make information disclosure in a timely and appropriate manner.
(3) The Board of Directors shall supervise the state of progress regarding election of a successor to the chief executive
officer whenever necessary.
(4) The Board of Directors shall establish procedures on transactions with conflicts of interest and deliberate andapprove transactions.
2. Candidates for Audit & Supervisory Board Member(Policy on nomination of candidates for Audit & Supervisory Board Member)(1) The Board of Directors shall nominate as a candidate for Audit & Supervisory Board Member a person who has
excellent insight and high ethics and is expected to fulfill the role of an Audit & Supervisory Board Member as
listed below, subject to prior consent from the Audit & Supervisory Board.
(2) The Board of Directors shall nominate as a candidate for External Audit & Supervisory Board Member a person
who is expected to provide advice from an independent and objective standpoint in addition to qualifications listed
in the preceding paragraph.
(3) The Board of Directors shall make effort to nominate as a candidate for Audit & Supervisory Board Member at
least one person who has appropriate knowledge regarding finance and accounting.
(Roles of Audit & Supervisory Board Members)
Audit & Supervisory Board Members who shall play a part of supervision functions in cooperation with the Board of
Directors shall make efforts to realize sound and sustainable growth and enhancement of corporate value over the medium
to long term, and establish a superior corporate governance structure that can respond to social trust, while maintaining
appropriate cooperation with stakeholders by auditing the execution of duties of Directors as an independent organization
entrusted by the shareholders.

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[Independence Standards for External Officers]
The Company established the “Independence Standards for External Officers” and designates those notapplicable to all of categories listed below as an Independent Officer.
1. A person whose major business partner (Note 1) is the Company or an executive person (Note 2) of the same if such
person is a juridical person, etc. (Note 3).
2. A major business partner (Note 1) of the Company or a major lender (Note 4) of the Company or an executive person(Note 2) of the same if such person is a juridical person, etc. (Note 3).
3. A consultant, accounting professional, or legal professional who receives a significant amount of money or other assets(Note 5) from the Company other than Officer remuneration.
4. A person who has fallen under any of items 1 to 3 above in a recent period (Note 6)
5. A relative within the second degree of relationship of a person who falls under any of items (a) to (d) below (excluding
a person with whom relationship was dissolved due to a divorce, dissolution, etc.).
(a) A person who falls under any of items 1 to 4.
(b) An executive person (Note 2) of the Company’s subsidiary(c) A Non-executive Director of the Company’s subsidiary (in the case that an External Audit & Supervisory
Board Member is nominated as an Independent Officer)(d) A person who has fallen under the preceding (b) or (c) or an executive person (Note 2) of the Company in a
recent period (Note 6)
6. A major shareholder of the Company holding 10% or more of the Company’s total shares for three or moreconsecutive years in a recent period (Note 6) or an executive person (Note 2) of the same if such person is a juridical
person, etc. (Note 3).
(Note 1) A “Major business partner” refers to a business partner with which the Company has transactions
corresponding to, in principle, 3% or more of annual consolidated sales of the Company for three or moreconsecutive years (3% of annual consolidated sales is approximately 6,230 million yen in fiscal 2019)(Note 2) An “executive person” refers to an Executive Director or employee in the General Manager position orequivalent managerial position and other equally important position(Note 3) A “juridical person, etc.” refers to a juridical person or any organization other than a juridical person (including
agricultural cooperatives and management associations)(Note 4) A “major lender” refers to a lender from which the balance of loans as of the end of each fiscal year is, inprinciple, 2% or more of the consolidated total assets of the Company on the same day for three or moreconsecutive years (2% of the consolidated total asset is approximately 3,616 million yen in fiscal 2019)(Note 5) A “significant amount of money or other assets” refers to that with a value equivalent to a cash amount of 10
million yen or more per annum(Note 6) A “recent period” refers to a five-year period before the time point in which the election proposal to besubmitted to the shareholder’s meeting is determined- 17 -