June 13, 2024
To whom it may concern
Company Name:Tokyo Cosmos Electric Co.
Representative:Yoshiki Iwasaki, President and Representative Director(Code No.: 6772 Tokyo Stock Exchange Standard Market)
Inquiries:Satoshi Ueda, Director and General Manager, Administration Division(TEL: 046-253-2111)

Disclaimer
This document is an abridged English translation of the Company’s May 20, 2024 publication in
Japanese.
This English version of the publication is only for reference purpose.
The Japanese language original shall prevail over any conflict or inconsistency between the two
versions.

Opinion of the Board of Directors on the Shareholder Proposal
We, Tokyo Cosmos Electric Co., Ltd. (“the Company”) have received a shareholder proposal from
GLOBAL ESG STRATEGY (“GES”), a shareholder of the Company, concerning three agenda items forour company's 67th Ordinary General Meeting of Shareholders scheduled to be held on June 25, 2024 (the“Shareholder Proposal”). The Board of Directors of the Company resolved to oppose the Shareholder
Proposal at its meeting held today, as described below.
In our convocation notice of the said meeting, the three agenda items of GES’ shareholder proposal are
mentioned as Agenda Items 6, 7 and 8 (please see Exhibit A hereto).

Opinion of the Board of Directors on GES’ Shareholder Proposal Agenda Item 6

The Board of Directors of the Company is against GES’shareholder proposal Agenda Item 6 re Appropriation of
Surplus.
The Company, for the reasons stated in (1) through (3) below, believes that GES’s
proposal not only does not take into account the actual conditions and risks of theCompany's business and realistic financial strategies, but also will hinder the Company's
medium- to long-term growth and enhancement of corporate value.
（１） Investment plans, etc. based on the 2nd Mid-Term Management Plan
The Company recognizes that returning profits to shareholders is one of the mostimportant management issues, and the Company’s basic policy is to continue to pay stabledividends to shareholders using the dividend on equity ratio (DOE) as an indicator and todistribute profits appropriately based on business performance, while securing the funds
necessary for strategic investments aimed at increasing corporate value over the medium
to long term and strengthening the Company’s financial position.
As shown in the 2nd Mid-Term Management Plan, after the 1st Mid-Term
Management Plan that focused on operating profit-oriented management, the Company
have now turned the corner to the 2nd Mid-Term Management Plan with the theme of"investment for growth" and are in the phase of implementing aggressive investment andvarious measures to establish a growth foundation for the 3rd Mid-Term Management
Plan with the theme of "growth and expansion" over the medium to long term fromFY2027 onward. The amount of dividends from retained earnings for each fiscal year
should be kept within an appropriate and realistic range in order to sequentially executeand realize the management plan to enhance corporate value over the medium to longterm.
As described in the outline of initiatives for investment in growth in the Second
Medium-Term Management Plan, the Company has set forth the goals: (1) strengthen
technological development capabilities, (2) enhance profitability, (3) improve thefinancial position, and (4) strengthen shareholder returns (see "Second Medium-Term
Management Plan and Measures to Achieve Management Conscious of Cost of Capitaland Stock Price (「第 2 次中期経営計画の策定と資本コストや株価を意識した経営の実現に向けた対応について」in Japanese)") and will require a considerable amount of funds
to carry out the plans above. The Company plans to use the funds for at the least
following:- Capital Investments and R&D Expenditures (creation and acquisition of newtechnologies, investment of management resources (human and other assets), etc.):
2.0 billion yen- Improvement of financial structure (reduction of interest-bearing debt): 1.7 billion
yen- Investment for restructuring of existing production system and method: 600 million
yen- Actions in accordance with Sustainability Policy: 200 million yen, and- Dividends from surplus to shareholders: 600-700 million yen
Through these investments, the Company intend to "create and acquire newtechnologies", "discover new areas through expansion of elemental technologies", and"invest in R&D, human resources, and education, etc." as measures to strengthen
technological development to establish a foundation for growth; "increase product added
value," "restructure production systems and methods," and "improve productivity by
utilizing DX and AI" as measures to strengthen profitability; "reduce interest-bearingdebt" and "improve capital efficiency (improve ROA)" as measures to improve financial
strength to reform the operating structure; and "improve dividend on equity (DOE) ratio"
as a measure to strengthen shareholder returns. The Company will continue to implement
various measures to establish a foundation for growth.
The Company believes that the use of such funds to build a solid foundation for growth
will lead to the "growth and expansion" of the Company under its 3rd Mid-Term
Management Plan and is also essential for the stable and sufficient return of dividends to
its shareholders over the medium to long term.
Such large-scale use of funds to establish a foundation for growth is the very

"management that is conscious of the cost of capital and return on capital based on thebalance sheet" as requested by the TSE.
Thus, in this respect, the part of the reason for the shareholder proposal (stating "TheCompany still deviates from the ’management that is conscious of the cost of capital andreturn on capital based on the balance sheet’ requested by the TSE”) is incorrect.
In addition, the shareholder proposal from GES, which calls for a dividend of 571 yen
per share (total dividend of approximately 700 million yen, or approximately 80% of net
income), must be considered as an intention to pursue short-term profits, with no regard
to the content and importance of the Company's medium- to long-term investment plan.
（２） Significant dividend increase based on DOE index, etc.
From the viewpoint of increasing corporate value over the medium to long term, as
mentioned above, the Company’s basic policy is to maintain stable dividends toshareholders using the dividend on equity ratio (DOE) as an indicator and to distributeprofits appropriately based on business performance. Based on this basic policy, for the
fiscal year ending March 31, 2024, the Company have proposed a dividend of 145 yen
per share of common stock (DOE of approximately 3.0%), an increase from its initial plan
(95 yen per share), as its business performance exceeded its forecast. This is 2.4 times the
60 yen per share in the previous fiscal year, and the Company believes this amount isreasonable and appropriate in light of the investment plans in the 2nd Mid-Term
Management Plan.
The Company will continue to actively return profits to shareholders in accordancewith the shareholder return policy disclosed in the Second Mid-Term Management Plan
(FY2024-FY2026) (target DOE of 3.5% for FY2026).
（３） Necessity of Securing Funds for Contingencies
The Company plays a part of various industries that bear a significant responsibility associal infrastructure, including automobile manufacturing, and in order to ensure a stablesupply of high-quality products, the Company has multiple manufacturing and sales basesin Japan and overseas (five manufacturing bases in Shirakawa, Aizu, and Nakatsu in Japan,
and Yantai and Guangzhou outside Japan, and two sales bases in the U.S. and Taiwan (intotal seven manufacturing and sales bases). In the event of a natural disaster or other
unforeseen event that halts operations at these bases, it will be necessary for the Company
to flexibly secure and manage a vast amount of funds for restoration work, securing
alternative bases, and arranging supply methods. In addition, there is a risk in relying
on loans from financial institutions to secure flexible and sufficient funds. Taking theabove into consideration, The Company believes that ensuring financial soundness towithstand emergency and unforeseen circumstances is one of the most important factors
to fulfill the Company’s social significance and responsibility to provide a stable supplyof high-quality products as mentioned above.
As described above, the shareholder proposal of GES, which calls for a dividend of
571 yen per share, or 80% or more of net income, is incompatible with the Company's
basic policy on shareholder return and capital utilization measures to increase theCompany's corporate value over the medium to long term, and a speculative proposal
intended to gain short-term profits without considering the Company's social significanceand business risks, which will damage the Company's corporate value. Accordingly, theCompany opposes the GES’ shareholder proposal.

Opinion of the Board of Directors on GES’ Shareholder Proposal Agenda Item 7

The Board of Directors of the Company is against GES’
Shareholder Proposal Agenda Item 7 re Partial Amendments
to the Articles of Incorporation (Dividend Policy for Surplus).
The Company believes that the contents of the proposal should not be stipulated in the
Articles of Incorporation because, in light of (1) through (3) below, the contents of this
proposal are detrimental to the enhancement of the Company's medium- to long-term
corporate value and the common interests of shareholders, and it is also contrary to thenature of the Articles of Incorporation.
Please also refer to the dissenting opinion of the Company's Board of Directors on
Shareholder Proposal Agenda Item 6, which states that the distribution of surplus funds
equivalent to a dividend payout ratio (DPR) of 100% is inappropriate in relation to theCompany's investment plan for the second medium-term management plan period andwill undermine the Company's corporate value, etc.
（１） Enhancement of corporate value over the medium to long term and securing of the common
interests of shareholders
The Company believes that it is important to achieve an optimal balance between
securing funds for strategic investments that lead to sustainable growth and stable andcontinuous profit returns, from the perspective of enhancing the Company's corporate
value over the medium to long term and securing the common interests of shareholders.
This proposal requests that the Articles of Incorporation of the Company adopt a
dividend policy that the annual dividend amount shall satisfy the higher of a dividend
payout ratio (DPR) of 100% or a dividend on equity ratio (DOE) of 10% for the threeyear period from FY2024 to FY2026, and have the Company determine the annual
dividend amount in accordance with this dividend policy to the extent permitted underlaw.
If the use of funds is heavily biased toward shareholder returns over a three-year period
in the manner, this may result in insufficient funds being secured for strategic investments,
which will prevent the achievement of medium- to long-term improvements in corporate
value and, in turn, will hinder stable and continuous shareholder returns.
（２） Agility and flexibility of financial strategy
The Company, given the ever-changing circumstances surrounding it, believes that aflexible and agile financial strategy based on the circumstances of the moment is essential
for improving corporate value and securing the common interests of shareholders overthe medium to long term. For example, it may be necessary to invest in new businesses
that will generate value in the medium to long term, or to secure flexible funds forrestoration work at manufacturing and sales bases in Japan and overseas in the event of anatural disaster that force them to cease operations.
If the provisions in the Articles of Incorporation proposed in this proposal are
established, the Company will be required to determine the amount of dividends based ona uniform policy without taking into account the current business and financial conditions,etc., and it is clear this will undermine the mobility and flexibility of the Company's
financial strategy and hinder the enhancement of the Company's corporate value and thecommon interests of shareholders over the medium to long term.
The Company sets the term of office of directors at one year (two years for Audit
Committee members) and believes that it is appropriate that the Board of Directors makedecision flexibly on and execute the dividend policy from time to time based on theSecond Medium-Term Management Plan.
（３） Nature of Articles of Incorporation
The Articles of Incorporation set forth the basic principles of the organization andmanagement of the company, and it is contrary to the nature of the Articles ofIncorporation to set forth in the Articles of Incorporation the details of the specificformula for the distribution of surplus over several years, and the Company believes thisis inappropriate.
As stated above, the Company believes that the contents of this proposal should not be
stipulated in the Articles of Incorporation because it is contrary to the nature of the
Articles of Incorporation, in addition to being an obstacle to improving the Company's
corporate value and securing the common interests of shareholders over the medium tolong term.

Opinion of the Board of Directors on GES’ Shareholder Proposal Agenda Item 8

The Board of Directors of the Company is against GES’
Shareholder Proposal Agenda Item 8 re Partial Amendment to
the Articles of Incorporation (Directors’ Response to
Interviews with Shareholders).
The Company believes that the contents of this proposal should not be stipulated in the
Articles of Incorporation because, in light of (1) and (2) below, there is little need to
stipulate the contents of this proposal in the Articles of Incorporation and it is detrimental
to the Company's business.
（１） Active promotion of IR and SR activities
The Company recognize the importance of reflecting the opinions and requests of its
shareholders in an appropriate manner in its management through active dialogue withthem in order to achieve sustainable growth and enhance its corporate value over the
medium to long term, and also believe it is important to clearly present the Company’s
policies and gain the understanding on that of stakeholders, including its shareholders.
Based on understanding above, the Company disclosed its policy to further enhanceIR/SR activities as part of its basic policy in April 2, 2024 press release of the Company
titled "Formulation of the Second Medium-Term Management Plan and Actions toAchieve Management Conscious of the Cost of Capital and Stock Price". Under thispolicy, the Company plans to establish a system to better disseminate information toshareholders and investors, as well as to set up more active opportunities forcommunication (dialogue).
Specifically, while continuing efforts to disseminate information through the disclosureof quarterly financial results and video distribution of shareholder newsletters, theCompany will continue to disclose the progress of the Second Medium-Term
Management Plan, etc., and provide opportunities to disseminate information andexchange opinions with shareholders by holding regular performance reporting
conferences and other means.
In addition, same as before, the president and other directors will respond to requests
for individual interviews from shareholders to the extent reasonable, based on the wishes
and interests of the shareholder.
As stated above, the Company believes that there is little need to stipulate the contentsof this proposal in the Articles of Incorporation since the Company has disclosed its policy
to promote IR and SR activities more actively under the Company's basic policy.
（２） Harm to the Company’s businessThis proposal requires all directors of the Company to respond to requests forindividual interviews with shareholders holding 3% or more of the Company's voting
rights or their managers within 20 business days in principle. Furthermore, the number ofsuch meetings shall be no less than once per quarter in the case of directors (excluding
those who are members of the Audit and Supervisory Committee).
Essentially, the Corporate Governance Code Supplemental Principle 5-1 (i) states that"As for who should handle actual dialogue (interview) with shareholders, director
including executive management and outside director or statutory auditor should conduct
the interview to the extent reasonable, taking into consideration the shareholder's wishes
and the main concerns of the interview, this should be the basis for the interview.", which
only requires listed companies to conduct interviews with shareholders to a "reasonable
extent".
This proposal goes beyond the requirements of the Code and imposes excessive
restrictions and burdens on the Company in that it requires, in principle, all directors toalways respond to interviews within 20 business days.
If all directors of the Company were required to always respond within 20 businessdays of a request for an interview, this would compromise management's discretion andmanagement mobility.
Under the Corporation Law, "separation of ownership and management" is the key
principle in a joint stock company, and directors are in a position to perform their duties
at their discretion based on their election at a shareholders' meeting. It is contrary to theabove principle for directors to follow the demands, instructions, and supervision of aparticular shareholder. If this proposal is approved, directors of the Company will not beable to refuse to respond within 20 business days if requested to do so by a particularshareholder, such as the proposing shareholder. Such a mandate would be an undue
pressure on the discretion of directors of the Company.

Furthermore, according to the proposal, shareholders or managers holding 3% or moreof the voting rights have the authority for individual interviews, assuming this level ofrequirements, it will be easy to cause harmful effects of abuse of this authority. For
example, if a considerable number of shareholders or Managers holding 3% or more of
the voting rights appear and exercise this authority individually, the above restrictions andburdens on the Company's directors would be extremely large. In addition to this, even if
the Articles of Incorporation are amended after the Proposal is approved and the authority
for individual interviews is abused, it will be difficult to correct the above restrictions, etc.
because such amendment requires a special resolution at a general meeting ofshareholders of the Company.
Recently, the importance of human capital has been advocated. Directors are also
irreplaceable human capital for the Company, and their effective utilization is essential.
Any proposals that could lead to a situation in which the human resources of directors
are squandered under the undue restraint and pressure of frequent and mandatoryinterviews is unacceptable from the perspective of enhancing corporate value.
If the human resources of directors are unfairly constrained and the medium- to long-termsustainable growth of the company is hindered, this is in violation of the Corporate
Governance Code that aims for sustainable growth and medium- to long-term
enhancement of corporate value, and the Company believes this is an end run around theworld.
As such, the Company believes that the Proposal imposes excessive restrictions andburdens on the Company's way of being.
As stated above, the Company is against the proposal because there is little need forthe contents of this proposal to be stipulated in the Articles of Incorporation, and because
there would be significant harm to the Company's business if it were stipulated in the
Articles of Incorporation.

Exhibit A

GES’ Shareholder Proposals

Shareholder's Proposal Agenda Item 6: Appropriation of Surplusi.
Outline of the Agenda Item
The Appropriation of Surplus shall be as below.
In the event that the Board of Directors of the Company or any shareholder of theCompany other than GLOBAL ESG STRATEGY (“GES”) proposes the appropriation of
surplus at this General Meeting of Shareholders, this proposal shall be deemed to be an
additional agenda item independent of those proposals.
(a) Type of Dividend Propertycash(b) Dividend per Share
571 Japanese Yen (“yen”) per share of common stock, less the amount of dividends
from surplus per share of common stock pursuant to the proposal for appropriation of
surplus submitted by Board of Directors or shareholders of the Company other than us
and approved at this General Meeting of Shareholders (571 yen, if Board of Directors
or shareholders of the Company other than us do not submit a proposal for
appropriation of surplus at this General Meeting of Shareholders).
(c) Allocation and Total Amount of Dividend Property
Dividend per share as above (b) for each share of the Company's common stock (thetotal amount of dividend property shall be calculated by multiplying the amount ofdividend per share by the total number of the Company's outstanding shares (excluding
treasury stocks of the Company) as of March 31, 2024).
(d) Effective date of the Appropriation of Surplus
Date of this General Meeting of Shareholdersii.

Reason for Proposal
In April of this year, the Company announced its new medium-term management plan,
which calls for a dividend on equity (“DOE”) ratio of 3.5% for FY2026, with the aim ofincreasing dividends in stages, and the Company's policy of expanding shareholder returnmeasures deserves certain recognition. However, dividend payout ratio (“DPR”) of theCompany has remained at a low level for the past several years, and the Company haveended up with a net cash position of approximately 700 million yen, despite some share
repurchases by the Company. The Company has indicated to us that it expects to havemodest net cash position at the end of FY2026, which is not a sufficiently efficientfinancial plan. The Company still deviate from the "management that is conscious of thecost of capital and return on capital based on the balance sheet" requested by the Tokyo
Stock Exchange (“the TSE”) and has not shown an adequate investment plan at present.
Therefore, GES propose a DPR of 100% as a bold shareholder return. Assuming a DPRof 100% and a dividend yield of 3.0%, the Company's stock price is expected to rise toapproximately 19,000 yen (approximately 5 times the current stock price).

Shareholder Proposal: Agenda Item 7: Partial Amendments to the Articles of Incorporation(Dividend Policy for Surplus)（１） Outline of the Agenda Item
The following article shall be newly established as Article 41 in the "Chapter 7
Calculation" of the current Articles of Incorporation, and the number of articles after
Article 41 of the current Articles of Incorporation shall be moved down by one article
each.
In addition, if the article stated in this proposal requires formal adjustments(including, but not limited to, the correction of article numbers) as a result of theresolution of other proposals (including proposal by the Company) at the General
Meeting of Shareholders, the article shall be transposed into the article in which thenecessary adjustments is made.
(Dividend policy for retained earnings)
Article 41
The Company shall, during the period from FY2024 to FY2026, adopt
a dividend policy that the annual dividend amount shall satisfy the higher of a dividend
payout ratio (“DPO” calculated by dividing the total amount of dividends by the net
income (as shown in the consolidated financial statements) of 100% or a Dividend on
Equity (“DOE” calculated by dividing the total amount of dividends by the total net
assets (as shown in the consolidated financial statements) ratio of 10%, and shalldetermine the annual dividend amount in accordance with such dividend policy.
（２） Reason for Proposal
Although the new medium-term plan of the Company shows an improvement inshareholder returns by the Company, it is still inadequate as the plan implies that theCompany will still retain excessive funds. In addition to proposing a DPR of 100% for
the year-end dividend of FY2023, GES propose to maintain the same level of dividend
PR through FY2026 as a temporary allowance for the return of accumulated retained
earnings to shareholders, and to add the DPR and DOE to the dividend decision policy.
GES also propose that the DPR and DOE be added to the dividend policy.
GES have rationally verified the financial impact of the proposed dividend policy
based on the assumptions of new medium-term management plan of the Company,
including the sales and profit plan and capital investment plan, and found that the net
debt-to-equity ratio is 0.3 times, net debt/EBITDA is 1.0 times, and net asset ratio is
47% at the end of FY2026. According to the Company, under the new medium-term
plan, the Company is expected to result in a slight net cash position at the end of
FY2026. Based on the dividend policy of the proposal, although the Company will beslightly net debt, it is clear that it will not compromise the Company's financial healthand will continue to have sufficient financial capacity.

Shareholder Proposal: Agenda Item 8: Partial Amendment to the Articles of Incorporation(Director’s response to interviews with shareholders)（１） Outline of the Agenda Item
The following article shall be newly established as Article 33, in the chapter "Chapter
4 Directors and Board of Directors" of the current Articles of Incorporation, and thenumber of articles after Article 33 of the current Articles of Incorporation shall be moved
down by one article each.
In addition, if the article stated in this proposal requires formal adjustment (including,but not limited to, correction of article numbers) as a result of the resolution of otherproposals (including proposals by the Company) at the General Meeting of Shareholders,the articles shall be transposed into the articles in which after the necessary adjustment is
made.
(Directors' response to interviews with shareholders)
Article 33
Directors of the Company shall, upon receiving a request for anindividual interview from a shareholder holding 3% or more of the voting rights of theCompany or a person who has the authority necessary to invest in the Company's shares
held by such shareholder pursuant to a discretionary investment agreement or otheragreement or the provisions of law (hereinafter referred to as the "Manager"), respond tosuch request within 20 business days. Provided that, if an individual interview cannot beheld within the said period due to unavoidable reasons, the Company shall notify theshareholder or Manager who requested the interview within 5 business days and set a
separate date and time available for an individual interview. The number of times a
director (excluding members of the Audit Committee) responds to the requested interview
shall be at least once and per quarter period, and the number of times of the interview of
director who is a member of the Audit Committee responds shall be at least once per year,
per shareholder or Manager.
（２） Reason for Proposal
Prior to this general meeting of shareholders, GES repeatedly requested that theCompany hold individual interviews with all directors, but only some individualinterviews were held with some directors. The Corporate Governance Code states that
listed companies should engage in constructive dialogue with their shareholders outsideof the general meeting of shareholders in order to enhance corporate value. The principleof equal treatment of shareholders permits companies to make reasonable differences inthe treatment of shareholders according to the number of shares held and does notpreclude companies from holding individual interviews with major shareholders in order
to conduct dialogue from the perspective of improving corporate value. The fact that the
Articles of Incorporation clearly stipulate that directors are obliged to respond to therequested interview with major shareholders individually not only contributes to theimprovement of the Company's corporate value through the promotion of constructive
dialogue with shareholders, but is also groundbreaking as an expression of thetransparency and open attitude of the Company's management, and shows that theCompany is a pioneer among other listed companies, which will lead to an increase in the
Company's share price valuation in the market.