Translation
Note:

This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the eventof any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Securities Code: 9843
April 25, 2018
To our shareholders:Toshiyuki Shirai,
Representative Director & Chief Operating
Officer

Nitori Holdings Co., Ltd.
1-2-39 Shinkotoni 7-jo, Kita-ku, Sapporo-shi,
Hokkaido

Notice of the 46th Annual General Meeting of Shareholders
You are cordially invited to attend the 46th Annual General Meeting of Shareholders of Nitori Holdings Co., Ltd.
(the “Company”), which will be held as indicated below.
If you are unable to attend the Meeting in person, you may exercise your voting rights in writing or via theinternet. Please review the attached Reference Documents for the General Meeting of Shareholders, andexercise your voting rights following the guidance below by 6:30 p.m. on Wednesday, May 16, 2018 (JST).
1. Date and Time:Thursday, May 17, 2018, at 10:00 a.m. (JST)

2. Venue:

Conference Room, 6th floor, Sapporo Head Office of the Company
1-2-39 Shinkotoni 7-jo, Kita-ku, Sapporo-shi, Hokkaido

3. Purpose of the Meeting
Matters to be reported
1. The Business Report and the Consolidated Financial Statements for the 46th fiscal year
(from February 21, 2017 to February 20, 2018), and the results of audits of theConsolidated Financial Statements by the Financial Auditor and the Audit &Supervisory Committee
2. The Non-consolidated Financial Statements for the 46th fiscal year (from February 21,
2017 to February 20, 2018)
Matters to be resolved
Proposal No. 1: Election of Six Directors (Excluding Directors Who Are Audit & Supervisory
Committee Members)
Proposal No. 2: Election of Four Directors Who Are Audit & Supervisory Committee Members
Proposal No. 3: Election of Financial Auditorz If you attend the Meeting in person, please present the enclosed voting form at the reception.
z Of the documents that should be provided with the original Japanese version of this notice, the “Consolidated Statement of Changes in
Equity,” “Notes to Consolidated Financial Statements,” “Non-consolidated Statement of Changes in Equity” and “Notes to
Non-consolidated Financial Statements” are posted (in Japanese only) on the Company’s website (http://www.nitorihd.co.jp/ir/) pursuant
to the provisions of laws and regulations and the Article 16 of the Company’s Articles of Incorporation, and are not included in theoriginal Japanese version of this notice.
Accordingly, the original Japanese version of the attached documents constitutes one part of the documents that were audited by the Audit& Supervisory Committee in preparing the audit report and by the Financial Auditor in preparing the financial audit reports.

z Any corrections in the Reference Documents for the General Meeting of Shareholders, Business Report, Consolidated Financial
Statements or Non-consolidated Financial Statements will be posted (in Japanese only) on the Company’s website above.

1

Reference Documents for the General Meeting of Shareholders

Proposal No. 1:

Election of Six Directors (Excluding Directors Who Are Audit & Supervisory
Committee Members)

The terms of office of all seven Directors (excluding Directors who are Audit & Supervisory Committee
Members; applicable to the rest of this proposal) will expire at the conclusion of this General Meeting.
Therefore, the Company proposes the election of six Directors.
Regarding this proposal, the Audit & Supervisory Committee has judged that all the candidates for Director are
qualified for the role.

The candidates for Director are as follows:

Candidate No.

Name

1

[Reappointment]

Akio Nitori

2[Reappointment]

Toshiyuki Shirai

3[Reappointment]

Masanori Ikeda

4[Reappointment]

Fumihiro Sudo

5

[Reappointment]

Masanori Takeda

6[Reappointment][Outside][Independent]

Takaharu Ando

2

Current positions
and responsibilities
in the Company
Representative
Director &Chairperson
Representative
Director &President
Senior Managing
Director
Officer in Chargeof Overseas Sales
Operations
Senior Managing
Director
General Manager
of Store
Development
DivisionManaging Director
Managing Directorof Nitori Co., Ltd.
General Manager
of Merchandising
Division
Outside Director

Attendance atmeetings of theBoard of Directors
12 out of 13
meetings (92.3%)
13 out of 13
meetings (100%)

13 out of 13
meetings (100%)

12 out of 13
meetings (92.3%)

10 out of 10
meetings (100%)

12 out of 13
meetings (92.3%)

Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company, and significant
concurrent positions outside the Company

Number of
the Company’s
shares owned

Mar. 1972 Founded the Company, Senior Managing Director
May 1978 Representative Director & President of the Company
Feb. 2003 Director of P.T. MARUMITSU INDONESIA (currently P.T.
NITORI FURNITURE INDONESIA)
Director of Marumitsu Co., Ltd. (currently Nitori Furniture Co.,
Ltd.) (current position)
Oct. 2003 Director of MARUMITSU-VIETNAM EPE (currently NITORIFURNITURE VIETNAM EPE) (current position)
Nov. 2009 Representative Director & Chairperson of Nitori Public Co., Ltd.
Mar. 2010 Representative Director & President of Deco Home Co., Ltd.
(current position)
May 2010 Chairperson of DECOHOME CHINA Co., Ltd.
Aug. 2010 Representative Director & President of Nitori Co., Ltd.
Representative Director & President of Home Logistics Co., Ltd.
Aug. 2011 Representative Director & President of Nitori Facility Co., Ltd.
May 2012 Director & Chairperson of Nitori USA, Inc.
Akio Nitori(March 5, 1944)

June 2013 Representative Director, Chairperson & President of Nitori PublicCo., Ltd.

May 2014 Representative Director & Chairperson of Nitori Co., Ltd.
(current position)[Reappointment]
1

Representative Director & Chairperson of Home Logistics Co.,
Attendance atLtd.
meetings of theRepresentative Director & Chairperson of Nitori Facility Co., Ltd.
Board of(current position)
Directors:
Mar.
2015
Representative Director & Chairperson of Nitori Public Co., Ltd.
12 out of 13
May 2015 Director & Senior Advisor of Home Logistics Co., Ltd.
meetings(92.3%)
Feb. 2016 Representative Director & Chairperson (CEO) of the Company(current position)
May 2016 Outside Director of KOHNAN SHOJI CO., LTD. (current
position)
June 2016 Chairperson of NITORI (CHINA) HOLDING Co., Ltd.
Mar. 2017 Director & Senior Advisor of Nitori Public Co., Ltd. (current
position)
May 2017 Director & Senior Advisor of Home Logistics Co., Ltd. (current
position)
Outside Director of IZUMI Co., Ltd. (current position)
Reasons for nomination as candidate for Director:
The candidate founded the Company in 1972 and since then, aiming to achieve
the Company’s roman (vision), “to present the whole world with abundant
home decoration,” and while always making the most of his excellent foresightand strong leadership, has led Nitori to grow from being one furniture store to
one of Japan’s top home furnishing chains. The Company proposes the electionof the candidate, believing him to be qualified to continue as a Director thattakes responsibility of decision making related to management policies andcorporate strategy and supervisory functions regarding business execution.

3

3,409,612
sharesCandidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company, and significant
concurrent positions outside the Company
Apr. 1979

Joined the Company

May 2001

Director of the Company

May 2004

Managing Director of the Company

May 2008

Senior Managing Director of the Company

May 2010

Director & Senior Managing Executive Officer of the Company

Aug. 2010

Director of Nitori Co., Ltd.

Number of
the Company’s
shares owned

Director of Home Logistics Co., Ltd.
Dec. 2010

Director & General Manager of Merchandising Division of Nitori
Co., Ltd.

May 2012

Director of Nitori USA, Inc.

May 2014

Representative Director & Executive Vice President of theCompany
Representative Director & President of Nitori Co., Ltd. (current
position)
Representative Director & President of Home Logistics Co., Ltd.

Toshiyuki Shirai(December 21,
1955)[Reappointment]
2

Representative Director & President of Nitori Facility Co., Ltd.
(current position)
Mar. 2015

Representative Director & President of Nitori Public Co., Ltd.

May 2015

Representative Director & Chairperson of Home Logistics Co.,
Ltd. (current position)

Attendance atmeetings of the Feb. 2016
Board ofDirectors:
Mar. 201713 out of 13
meetings (100%)

Representative Director & President of the Company (current
position)
Representative Director & Chairperson of Nitori Public Co., Ltd.
(current position)
Chairperson of NITORI (CHINA) HOLDING Co., Ltd. (current
position)
Representative Director & Chairperson of HOME DECO CO.,LTD. (current position)

Apr. 2017

Chairperson of Nitori Taicang Trading & Logistics Co. Ltd.
(current position)

June 2017

External Director of KATITAS Co., Ltd. (current position)

Reasons for nomination as candidate for Director:
The candidate has had a broad range of business experience since joining theCompany such as being involved in store operations, personnel, productdevelopment, logistics, and overseas business, and has abundant experienceand knowledge related to management gained from serving positions such as
Representative Director & President of Nitori Co., Ltd. from May 2014, andRepresentative Director & President of the Company from February 2016. The
Company proposes the election of the candidate, believing that he can continue
to make use of his abilities and experience in the supervision and direction ofbusiness execution.

4

41,652sharesCandidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company, and significant
concurrent positions outside the Company
Apr. 1979

Joined the Company

May 2001

Director of the Company

May 2004

Managing Director of the Company

May 2010

Managing Executive Officer of the Company

Aug. 2010

General Manager of Store Operations Division of Nitori Co., Ltd.

Masanori Ikeda May 2014
(February 22,
1957)[Reappointment]
3

Oct. 2015

Number of
the Company’s
shares owned

Senior Managing Director of the Company
Senior Managing Director & General Manager of Merchandising
Division of Nitori Co., Ltd.
Senior Managing Director & Officer in Charge of China Sales
Operations of the Company

Senior Managing Director of Nitori Co., Ltd. (current position)
Attendance atmeetings of the June 2016 President of NITORI (CHINA) HOLDING Co., Ltd.
Board ofApr. 2018 Senior Managing Director & Officer in Charge of Overseas Sales
Directors:
Operations of the Company (current position)
13 out of 13
meetings (100%) Reasons for nomination as candidate for Director:
The candidate has had a broad range of business experience since joining theCompany such as being involved in product development, sales planning,
management planning, store operations, and overseas business, and hasabundant experience and knowledge related to management gained fromcurrently serving positions such as Senior Managing Director at the Company
and at Nitori Co., Ltd. Accordingly, the Company proposes the election of thecandidate.

37,806
sharesMar. 1979 Joined SHIMACHU CO., LTD.
Sept. 2000 Representative Director of KANSAI SHIMACHU CO., LTD.
Fumihiro Sudo
(May 5, 1956)

Apr. 2001 Joined the Company

May 2005 Executive Officer of the Company[Reappointment] May 2008 Managing Director of the Company
4

Attendance atmeetings of theBoard ofDirectors:
12 out of 13
meetings(92.3%)

May 2010 Managing Executive Officer & General Manager of Store
Development Division of the Company
May 2014 Senior Managing Director & General Manager of Store
Development Division of the Company (current position)
Reasons for nomination as candidate for Director:
The candidate has abundant experience at the Company focused on store
development operations, and has abundant experience and knowledge related to
management gained from currently serving positions such as Senior Managing
Director. Accordingly, the Company proposes the election of the candidate.

512,826
sharesCandidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company, and significant
concurrent positions outside the Company

Number of
the Company’s
shares owned

Mar. 2004 Joined the Company
Feb. 2008 Manager of Recruitment Division of the Company
Oct. 2012 Merchandising Manager of Soft Goods Department of
Merchandising Division of Nitori Co., Ltd.
Masanori
Takeda(January 10,
1966)[Reappointment]
5

Sept. 2013 Merchandising Manager of Furniture Department of
Merchandising Division of Nitori Co., Ltd.
May 2014 Executive Officer of the Company
Merchandising Manager of Furniture Department of
Merchandising Division of Nitori Co., Ltd.
Oct. 2015 Executive Officer of the Company
General Manager of Merchandising Division of Nitori Co., Ltd.

May 2016 Senior Executive Officer of the Company
Attendance atGeneral Manager of Merchandising Division of Nitori Co., Ltd.
meetings of the
May 2017 Managing Director of the Company (current position)
Board ofManaging Director & General Manager of Merchandising
Directors:
Division of Nitori Co., Ltd. (current position)
10 out of 10
meetings (100%) Reasons for nomination as candidate for Director:

8,034 shares

The candidate has abundant business experience and keen management insightowing to his broad experience in major operations of the Store Operations
Division, Recruitment Division, and Merchandising Division, etc. and his
currently serving positions such as Managing Director of the Company andManaging Director & General Manager of Merchandising Division of Nitori
Co., Ltd. Accordingly, the Company proposes the election of the candidate.
Apr. 1972 Joined National Police Agency
Sept. 1994 Chief of Gunma Prefectural Police Headquarters
Aug. 1999 Director of Public Security Department of Metropolitan Police
Department
Aug. 2004 Director General of Commissioner-General’s Secretariat of
National Police Agency
Takaharu Ando
(August 31,
1949)

6

Notes:

Aug. 2007 Deputy Commissioner General of National Police Agency
June 2009 Commissioner General of National Police Agency

Oct. 2011 Retired from National Police Agency[Reappointment] May 2013 Outside Director of the Company (current position)[Outside][Independent] June 2014 Outside Director of Toyoko Inn Co., Ltd. (current position)
2,000 shares
June 2016 External Director of AMUSE INC. (current position)
Attendance at June 2017 Outside Director of ZENSHO HOLDINGS CO., LTD. (current
meetings of theposition)
Board of
Reasonsfornominationas candidate for Outside Director:
Directors:
The
candidatehasabundant
experience and broad insight gained from serving
12 out of 13
important positions such as the Commissioner General of the National Police
meetings
Agency and, based on this specialist experience and insight, he provides(92.3%)
appropriate supervision and advice for the Company’s overall management as
an Outside Director of the Company. Although the candidate has not directly
taken part in corporate management, based on his experience and insight, theCompany judges that he will continue to appropriately fulfill his duties as
Outside Director. Accordingly, the Company proposes the election of thecandidate.
Tenure as Outside Director: 5 years (at the conclusion of this meeting)
1. There is no special interest between any of the candidates and the Company.
2. Takaharu Ando is a candidate for Outside Director. He meets the “Independence Criteria for Outside Directors”
established by the Company. Please refer to page 13 for the “Independence Criteria for Outside Directors.”
Furthermore, during the period from May 2012 to May 2013, before he assumed office as Outside Director of
the Company, Takaharu Ando served as a Special Advisor (part-time) of the Company. The primary purpose forassigning him this role was to receive his opinions and suggestions concerning overall corporate management
based on his abundant experience and insight, while increasing his knowledge in regard to the state of affairs of
the furniture retail industry and the business models of the Company. His remuneration for this role was lessthan ¥10 million annually, and therefore is considered to be an immaterial amount.

6

3.

4.

5.
6.

The Company reported Takaharu Ando as an independent officer pursuant to the regulations of the Tokyo Stock
Exchange and the Sapporo Securities Exchange. If his reelection is approved, the Company plans for his
designation as an independent officer to continue.
Pursuant to the provisions of Article 427, paragraph 1 of the Companies Act, the Company has entered into anagreement with Takaharu Ando to limit his liability for damages under Article 423, paragraph 1 of theCompanies Act to the minimum liability amount provided for by Article 425, paragraph 1 of the same Act. If
his reelection is approved, the Company plans to renew the limited liability agreement with him.
Regarding the attendance of Masanori Takeda at meetings of the Board of Directors, the number indicated isthe number of meetings held after he assumed office as a Director on May 11, 2017.
Director Muneto Tamagami will retire from his position as Director when his term of office expires at theconclusion of this General Meeting.

7

Proposal No. 2:

Election of Four Directors Who Are Audit & Supervisory Committee Members

The terms of office of all four Directors who are Audit & Supervisory Committee Members will expire at
the conclusion of this General Meeting. Therefore, the Company proposes the election of four Directors who
are Audit & Supervisory Committee Members.
The Audit & Supervisory Committee has given its approval to this proposal.

The candidates for Directors who are Audit & Supervisory Committee Members are as follows:

Candidate
No.

1

2

3

4

Name

[Reappointment][Reappointment][Outside][Independent][Reappointment][Outside][Independent][Reappointment][Outside][Independent]

Takao Kubo

Kazuhiko
Takeshima
Kazuhiro
Suzuki
Tsuneyoshi
Tatsuoka

Current positions andresponsibilities in the
Company
Director(Full-time Member ofAudit & Supervisory
Committee)
Outside Director(Audit & Supervisory
Committee Member)
Outside Director(Audit & Supervisory
Committee Member)
Outside Director(Audit & Supervisory
Committee Member)

8

Attendance atmeetings ofthe Board of
Directors

Attendance atmeetings of
the Audit &Supervisory
Committee

13 out of 13
meetings(100%)

7 out of 7
meetings(100%)

13 out of 13
meetings(100%)
11 out of 13
meetings(84.6%)
12 out of 13
meetings(92.3%)

7 out of 7
meetings(100%)
6 out of 7
meetings(85.7%)
7 out of 7
meetings(100%)

Candidate
No.

1

Name
(Date of birth)

Career summary, position and responsibility in the Company, and significant
concurrent positions outside the Company

Takao Kubo
(January 14,
1946)

Dec. 1977 Joined the Company

Number of
the Company’s
shares owned

Feb. 1989 General Manager of Management Policy Office of the Company
May 1993 Full-time Corporate Auditor of the Company[Reappointment] May 2001 Director & General Manager of Management Planning Office of
the Company
Attendance at Apr. 2003 Director & General Manager of President’s Office of the Company
meetings of the
May 2004 Full-time Corporate Auditor of the Company
Board of
Aug. 2010 Corporate Auditor of Nitori Co., Ltd. (current position)
Directors:
13 out of 13
Corporate Auditor of Home Logistics Co., Ltd. (current position)
meetings (100%)
May 2016 Director (Full-time Member of Audit & Supervisory Committee)of the Company (current position)
Attendance at
Reasonsfornominationas candidate for Director:
meetings of the
Audit &
The candidate has considerable knowledge regarding finance and accounting
Supervisoryand has abundant experience covering the Company’s overall management
Committee:
gained from serving positions of Director & Corporate Auditor at the
7 out of 7
Company. Accordingly, the Company proposes the election of the candidate.
meetings (100%)

923,652sharesCandidate
No.

Name
(Date of birth)

Kazuhiko
Takeshima(March 16,
1943)

2

Career summary, position and responsibility in the Company, and significant
concurrent positions outside the Company
Apr. 1965

Joined the Ministry of FinanceJuly 1994

Deputy Director-General for Policy Coordination in the
Minister’s Secretariat of Ministry of FinanceMay 1995

Director General of Economic Planning Agency (currently
Cabinet Office)

July 1997

Commissioner of National Tax Agency

Jan. 1998

Head of Domestic Affairs Office of Cabinet Secretariat[Reappointment] Jan. 2001
[Outside]
July 2002[Independent] Sept. 2012

Assistant Chief Cabinet Secretary of Cabinet Secretariat

Number of
the Company’s
shares owned

Chairman of Japan Fair Trade Commission
Retired from officeAttendance at May 2013 Director (Outside Director) of the Company
meetings of the June 2013 Outside Auditor of Japan Airport Terminal Co., Ltd. (current
position)
Board ofDirectors:
May 2016 Outside Director (Audit & Supervisory Committee Member) of
13 out of 13
the Company (current position)
meetings (100%)
Reasons for nomination as candidate for Outside Director:
Attendance at The candidate has abundant experience and broad insight gained from serving
meetings of the important positions such as the Chairman of the Japan Fair Trade Commission
and, based on this specialist experience and insight, he provides appropriate
Audit &
supervision and advice for the Company’s overall management as an Outside
Supervisory
Director of the Company. Although the candidate has not directly taken part inCommittee:
corporate management, based on his experience and insight, the Company
7 out of 7
meetings (100%) judges that he will continue to appropriately fulfill his duties as Outside
Director. Accordingly, the Company proposes the election of the candidate.
Tenure as Outside Director: 5 years (at the conclusion of this meeting)Tenure as Director who is an Audit & Supervisory Committee Member: 2 years(at the conclusion of this meeting)

10

2,000
sharesCandidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company, and significant
concurrent positions outside the Company
Apr. 1976

Appointed as public prosecutor

Jan. 2009

Director of the Criminal Affairs Department of Supreme Public
Prosecutors Office

June 2010
Kazuhiro Suzuki(September 4, Aug. 2011
1951)
June 2012[Reappointment][Outside]
Jan. 2014[Independent]
May 2014

3

4

Notes:

Chief Prosecutor of Tokyo District Public Prosecutors Office
Superintending Prosecutor of Hiroshima High Public Prosecutors
OfficeSuperintending Prosecutor of Fukuoka High Public Prosecutors
OfficeRetired from prosecutor position
Registered as attorney (Dai-Ichi Tokyo Bar Association)

Attendance atmeetings of theBoard ofDirectors:
11 out of 13
meetings(84.6%)

June 2014

Attendance atmeetings of the
Audit &
Supervisory
Committee:
6 out of 7
meetings(85.7%)

Reasons for nomination as candidate for Outside Director:
The candidate is a legal professional who has served important positions suchas the Superintending Prosecutor of the Fukuoka High Public Prosecutors
Office and, utilizing his abundant experience and specialist insight, he provides
appropriate opinions for the Company’s management as an Outside Director of
the Company. Although the candidate has not directly taken part in corporate
management, based on the above reasons, the Company judges that he willcontinue to appropriately fulfill his duties as Outside Director. Accordingly, theCompany proposes the election of the candidate.
Tenure as Outside Director: 2 years (at the conclusion of this meeting)Tenure as Director who is an Audit & Supervisory Committee Member: 2 years(at the conclusion of this meeting)Tsuneyoshi
Tatsuoka(January 29,
1958)

Number of
the Company’s
shares owned

President of Japan International Training Cooperation
Organization (current position)

May 2015

Corporate Auditor (Outside Corporate Auditor) of the Company

June 2015

Outside Auditor of Saitama Resona Bank, Limited (current
position)

May 2016

Outside Director (Audit & Supervisory Committee Member) of
the Company (current position)–
sharesApr. 1980 Joined the Ministry of International Trade and Industry (currently
Ministry of Economy, Trade and Industry)
July 2008 Deputy Director-General in the Manufacturing Industries Bureauof the Ministry of International Trade and Industry
July 2009 Director-General for Policy Planning and Coordination of the
Ministry of International Trade and Industry[Reappointment] Jan. 2010 Councilor of Cabinet Secretariat[Outside][Independent] Aug. 2011 Deputy Vice-Minister of the Ministry of International Trade andIndustry
Attendance at June 2013 Vice-Minister of Economy, Trade and Industry
meetings of the July 2015 Retired from office
Board ofMay 2016 Outside Director (Audit & Supervisory Committee Member) of
Directors:
the Company (current position)
12 out of 13
June 2016 Outside Director of Asahi Kasei Corporation (current position)
meetings(92.3%)
Reasons for nomination as candidate for Outside Director:–
shares

The candidate has abundant experience and specialist insight gained from
Attendance atserving important positions such as the Vice-Minister of Economy, Trade andmeetings of theIndustry and, utilizes them to strengthen the Company’s corporate governance
Audit &and compliance system. Although the candidate has not directly taken part inSupervisory
corporate management, based on the above reasons, the Company judges that
Committee:
he will continue to appropriately fulfill his duties as Outside Director.
7 out of 7
Accordingly, the Company proposes the election of the candidate.
meetings (100%)
Tenure as Outside Director: 2 years (at the conclusion of this meeting)Tenure as Director who is an Audit & Supervisory Committee Member: 2 years(at the conclusion of this meeting)
1. There is no special interest between any of the candidates and the Company.
The Japan International Training Cooperation Organization, where Kazuhiro Suzuki serves as President, was

11

2.

3.

4.

not engaged in a transactional relationship with the Group in the most recent fiscal year.
Kazuhiko Takeshima, Kazuhiro Suzuki and Tsuneyoshi Tatsuoka are candidates for Outside Director, who allmeet the “Independence Criteria for Outside Directors” established by the Company. Please refer to page 13 forthe “Independence Criteria for Outside Directors.”
The Company reported Kazuhiko Takeshima, Kazuhiro Suzuki and Tsuneyoshi Tatsuoka as independent
officers pursuant to the regulations of the Tokyo Stock Exchange and the Sapporo Securities Exchange. If theirreelection in this proposal is approved, the Company plans for their designation as independent officers tocontinue.
Pursuant to the provisions of Article 427, paragraph 1 of the Companies Act, the Company has entered into
agreements with Takao Kubo, Kazuhiko Takeshima, Kazuhiro Suzuki and Tsuneyoshi Tatsuoka to limit their
liabilities for damages under Article 423, paragraph 1 of the Companies Act to the minimum liability amountprovided for by Article 425, paragraph 1 of the same Act. If their reelection is approved, the Company plans torenew the limited liability agreement with each candidate.

12

For reference

Independence Criteria for Outside Directors
The Company designates Outside Directors who do not fall under any of the following items as
independent Directors.
1) A person who is currently or was in the past ten years an executive director, executive officer, manager,
or any other employee (hereinafter collectively referred to as “Executive”) of the Company or asubsidiary of the Company.
2) A person or the Executive of a corporation who holds either directly or indirectly 10% or more of thetotal number of the voting rights of the Company.
3) A person or the Executive of a corporation for whom the Company or a subsidiary of the Company is amajor business partner (Note 1), and a person or the Executive of a corporation who is a major business
partner (Note 2) of the Company or a subsidiary of the Company.
4) The financial auditor or one of their employees, etc., for the Company or for a subsidiary of theCompany.
5) A consultant, attorney at law, certified public accountant, certified public tax accountant, etc., whoreceived from the Company or a subsidiary of the Company monetary payment or other property
benefits exceeding ¥10 million annually other than director/corporate auditor remuneration (referring to
the person belonging to the organization if the one who received the relevant property is anorganization such as a corporation or partnership).
6) A person or the Executive of a corporation who received donations or aid funds exceeding ¥10 million
annually from the Company or a subsidiary of the Company.
7) A person who has fallen under any of 2) through 6) in the past three years.
8) A person whose spouse or relative who is within the second degree of kinship falls under any of 1)
through 7). However, in the event that the person who falls under 1) through 7) is the Executive, this islimited to the important Executive (Note 3).
9) Any other person, even if they do not fall under 1) through 8), for whom there is potential for constantconflict of interests with general shareholders as a whole.
Notes:

1.
2.

3.

A business partner for whom 2% or more of its annual consolidated net sales in the most recent fiscal year was
paid by the Company or a subsidiary of the Company.
A business partner who paid 2% or more of the annual consolidated net sales of the Company to the Company
or a subsidiary of the Company in the most recent fiscal year, or a business partner who loaned money thatmakes up 2% or more of the consolidated total assets of the Company to the Company or a subsidiary of theCompany at the end of the most recent fiscal year.
A person, among the Executives, who executes important business such as a director (excluding an outside
director), executive officer, manager or a person in charge of a department.

13

Proposal No. 3:

Election of Financial Auditor

Based on a decision by the Audit & Supervisory Committee, regarding the Company’s Financial Auditor, inplace of Ernst & Young ShinNihon LLC whose term of office will expire at the conclusion of this General
Meeting, the Company newly proposes the election of Deloitte Touche Tohmatsu LLC.
1.

Reasons for nomination of Deloitte Touche Tohmatsu LLC as new Financial Auditor
The Audit & Supervisory Committee has nominated Deloitte Touche Tohmatsu LLC as a candidate forFinancial Auditor with expectations for audits conducted from a new perspective, considering the numberof continuous audit years by the current Financial Auditor. In addition, considering the independence,
quality control system and global auditing system of Deloitte Touche Tohmatsu LLC based on theevaluation and selection criteria for Financial Auditors established by the Audit & Supervisory Committee,
the candidate was judged appropriate for the role.

2.

Candidate for Financial Auditor
The candidate for Financial Auditor is as follows:
Name

Deloitte Touche Tohmatsu LLC

Location of main office

Shinagawa Intercity, 2-15-3 Konan, Minato-ku, Tokyo

Overseas business partner

Deloitte Touche Tohmatsu Limited

History

May

1968

May

1975

Oct.

1986

Feb.

1990

July

2009

CapitalPersonnel
composition

Overview

Audit services
delivered to

Established as Tohmatsu Awoki & Co.
Joined Touche Ross International Alliance (TRI) (currently
Deloitte Touche Tohmatsu Limited [DTTL])
Merged with Sanwa Audit Corporation and renamed as
Tohmatsu Awoki & Sanwa
Merged with Mita Audit Corporation and renamed as Tohmatsu& Co.
Reorganized as a Limited Liability Audit Corporation andrenamed as Deloitte Touche Tohmatsu LLC
968 million yen(as of February 28, 2018)
Employees (certified public
530
accountants [CPA])
Specified equity members
51
Staff CPA
2,829
Personnel who have passed
the CPA examination, etc.
1,188(including accounting
assistants)
Other specialists
1,791
Administrative staff
293
Total
6,682
(as of February 28, 2018)
3,399 companies(as of May 31, 2017)14