Note: This is an unofficial translation of the Japanese original version and is provided foryour reference and convenience only. Where there are any discrepancies between
the Japanese original and the translated document, the original Japanese
document shall prevail.
To Our Shareholders:

Stock Code: 6741
May 28, 2021
Nippon Signal Co., Ltd.
5-1, Marunouchi, 1-Chome,
Chiyoda-ku, Tokyo
President & CEO
Hidehiko Tsukamoto

Notice of Convocation of the Ordinary General Meeting of
Shareholders for the 138th Business Term
Notice is hereby given that the Ordinary General Meeting of Shareholders for the 138th
Business Term of Nippon Signal Co., Ltd. (hereinafter referred to as the ‘Company’) will
be held as described below.
Your attendance at the meeting is cordially requested.

1. Date and Time: Friday, June 25, 2021 at 10:00 a.m. (Japan time)(Reception will start at 9:00 a.m.)
2. Venue:Hall of Otemachi Sankei Plaza 4th Floor, Tokyo Sankei Building
7-2, Otemachi 1-chome, Chiyoda-ku, Tokyo

3. Agenda for the Meeting：[Matters for Reporting]
1 - Reports on the contents of the Business Report and Consolidated Financial
Statements for the 138th Business Term (from April 1, 2020 to March 31, 2021),
and reports on the Auditing Results of Accounting Auditor and Audit & Supervisory
Board regarding the Consolidated Financial Statements.
2 - Reports on the content of the Financial Statements for the 138th Business Term(from April 1, 2020 to March 31, 2021).
[Matters for Resolution]
1 - Election of nine Directors
2 - Election of one Audit & Supervisory Board Member
3 - Election of Accounting Auditor
The Company will hold its General Meeting of Shareholders upon implementing
appropriate precautionary measures in order to prevent the spread of the novel
coronavirus infection.
This General Meeting of Shareholders will be streamed live via the Internet.
Shareholders are requested to exercise the voting rights in advance by postal mail or1via the Internet, and from the standpoint of preventing the spread of the infection,
consider watching the proceedings online instead of attending the Meeting in person.

2

Guide to the Exercise of Voting Rights
Voting by postal mail:Please indicate your approval or disapproval concerning the proposals shown on the
Voting Form and send it back to us.
Deadline for exercising voting rights:
Voting Form must be received by 5:05 p.m. on Thursday, June 24, 2021 (Japan time)
Internet
Please input your approval or disapproval concerning each proposal via the voting
website designated by the Company (https://soukai.mizuho-tb.co.jp/).
Deadline for exercising voting rights:
No later than 5:05 p.m. on Thursday, June 24, 2021 (Japan time)
Voting by “Smart Exercise”
Please input your approval or disapproval by the deadline for exercising voting rights
after scanning the QR code for “Smart Exercise” on the lower right of the enclosed
Voting Form using a smartphone or tablet device.
Deadline for exercising voting rights:
No later than 5:05 p.m. on Thursday, June 24, 2021 (Japan time)● When you exercise the voting rights through a proxy, such proxy must be only one
shareholder who is entitled to attend the general meeting of shareholders. In this case,please submit a written power of attorney and the enclosed Cards for Exercise of
Voting Rights to the receptionist of the Meeting.
● Any changes in the matters described in Reference Documents for General Meetingof Shareholders, Business Report, Consolidated Financial Statements and Financial
Statements will be posted on our website (https://www.signal.co.jp/ir/).
● In accordance with the provisions of laws and regulations and Article 16 of the Articles
of Incorporation, the following items are posted on our website(https://www.signal.co.jp/ir/library/meeting.html) and thus they are not included in thisNotice of Convocation.
• “Basic Policy on Parties Who Control Decisions on the Company’s Financial andBusiness Policies” in the Business Report.
• “Consolidated Statements of Changes in Net Assets” and “Note to Consolidated
Financial Statements” in Consolidated Financial Statements• “Statements of Changes in Net Assets” and “Notes to Financial Statements” inFinancial Statements
The above documents disclosed on our website have been audited as part of theBusiness Report audited by the Audit & Supervisory Board Members, and theConsolidated Financial Statements and the Financial Statements audited by the
Audit & Supervisory Board Members and the Accounting Auditor.

3

No.1 – Election of nine Directors
The terms of all nine Directors will expire at the end of this General Meeting of
Shareholders. Accordingly, the Company requests the election of nine Directors.
The candidates for the Directors are as follows.
In addition, in selecting candidates for the Directors, the Company receives a
recommendation by the “Appointment and Remuneration Committee,” a majority ofthe members of which are Independent Outside Directors, in order to enhance theobjectivity and transparency in the decision-making process.

No.

Name

Current status

Reappointment

Yohei
Furuhata

Director and Chairman

Reappointment

Hidehiko
TsukamotoPresident and Chief
Executive Officer andChief Operating Officer

3

Reappointment

TakeshiFujiwara

Director
Deputy Chief
Executive Officer

4

Reappointment

Hideo
OshimaDirector
Managing Executive
Officer5

Reappointment

12

Primary
responsibilities
Overallmanagement
Overallmanagement
In charge ofdomestic andoverseasbusinesses
Branch offices
Overseasbusiness
In charge ofinternational
projects

Masahiro
Kubo

Director
Managing Executive
Officer

In charge ofbusiness
administration

Managing Executive
Officer

Kuki Plant
In charge oftechnology,
research anddevelopment

Attendanceat the Boardof Directors’Meetings
14 / 14
meetings
14 / 14
meetings

14 / 14
meetings

14 / 14
meetings
10 / 10meetings(After his
appointment on June23, 2020)

6

New Appointment

Masayoshi
Sakai

7

Reappointment
OutsideIndependent

YasukoMatsumotoOutside Director–

14 / 14
meetings

8

Reappointment
OutsideIndependent

Yuriko Inoue

Outside Director–

14 / 14
meetings

9

New Appointment
OutsideIndependent

Yoshiyuki
Murata–-–-* The Company’s “Criteria for the Independence of Outside Officers” is described on pages 20 and 21.
* The Company has entered into a directors and officers liability insurance agreement as stipulated in Article
430-3, Paragraph 1 of the Companies Act with an insurance company. The insurance covers damages tobe borne by the insured parties that arise from the insured parties as individuals being subject to a claim
for damages such as derivative lawsuits and third-party lawsuits. The candidates will be included as
insured parties under the insurance agreement. The Company intends to renew the agreement with theabove contents at the time of renewal in July 2021.

4

Competence (knowledge, experience, and capabilities) required of candidates for
Director
The Group aims to continue being a provider that supports evolution of infrastructure with safe
and trustworthy solutions. In order to lead sustainable business growth, the Company selects
as candidates for Director those who possess strong acumen and experience as a corporate
manager, deep insight into technological development surrounding the Company, capabilities
to drive the expansion of business domains conducted on a global scale, and expert knowledge
that contributes to corporate governance.
[Candidates for Director selected from within the Company]
The Company selects those who possess strong acumen for overall management, withknowledge regarding the business environment surrounding the Company and its industries,
understanding of the Company’s strengths and issues through manufacturing, technologicalresearch and development, marketing, and sales activities, and experience in managementadministration such as accounting, legal affairs, and risk management.
[Candidates for Outside Director]
The Company selects those who can provide advice on management strategies and perform
an effective supervisory function on management by drawing on advanced and specialized
knowledge and experience in fields other than the Group’s business domains, while
appropriately ensuring well-rounded diversity.
In order to enhance transparency of management, the Company selects those who meet therequirements for Independent Officers as stipulated by the Tokyo Stock Exchange, Inc. as
candidates for Outside Director. In addition, the Company selects candidates for Director sothat at least one-third of the candidates are candidates for Outside Director.

5

No.

Name
(Date of birth)

Biography, status, and responsibilities
April 1974
April 1997

1

Joined the Company
General Manager ofAutomatic Fare Collection
Sales Dept. of Sales andMarketing Head Office
June 2000
Executive Officer
June 2004
Director
Managing Executive
OfficerJune 2006
Deputy Chief Executive
OfficerJune 2008
Representative Director
Reappointment
President & Chief
Operating Officer
Yohei Furuhata June 2012
Chief Executive Officer(May 28,1949) June 2016
ChairmanAge:72
May 2017
Outside Auditor of
Matsuya Co., Ltd. (toYears in office aspresent)
Director: 17 years
Director and(at the end of this June 2020
Meeting)
Chairman of theCompany (toAttendance at theBoard of Directors’present)
meetings:[Significant concurrent positions]
14 / 14 (100%)
Outside Auditor of Matsuya Co., Ltd.
[Reason for nomination as a candidate for
Director]
Yohei Furuhata possesses a wealth ofexperience and achievements as a manager.
We have determined that he is qualified toplay an important role in realizing theCompany’s group management promotion andaiming at the sustained enhancement ofcorporate value, considering his deep insightgained through his connection to other global
companies and organizations. Therefore, wehave nominated him as a candidate tocontinue as a Director.

Number of theCompany’s
shares held

103,800

There are no special interests between the Company and Yohei Furuhata.

6

No.

Name
(Date of birth)

Biography, status, and responsibilities
April 1982
May 2005

2

Joined the Company
General Manager ofAutomatic Fare Collection
Sales Dept. of Automatic
Fare Collection Systems
Division
June 2006
Executive Officer
June 2010
Director
Managing Executive
Officer
Reappointment
June 2014
Deputy Chief Executive
Officer
Hidehiko
April 2015
Representative Director
TsukamotoExecutive Vice President(September& Chief Operating Officer
15, 1958)
June 2016
President (to present)
June 2020
Chief Executive Officer
Age:62
April 2021
Chief Executive Officer (topresent)
Years in office as
Director: 9 years[Significant concurrent positions](at the end of thisNone
Meeting)[Reason for nomination as a candidate for
Attendance at the
Director]
Board of Directors’
Hidehiko Tsukamoto, as the Company’s
meetings:
14 / 14 (100%)
Representative Director, possesses a wealthof experience and achievements in leading thebusiness management of the Company. We
have determined that he is qualified to play animportant role as the Company pursues
business structural reforms to adapt to rapidchanges in the business environment such as
globalization and technical innovations since
he is also well-versed in technicaldevelopment and has contributed to creating
new businesses and expanding businessareas. Therefore, we have nominated him as a
candidate to continue as a Director.

Number of theCompany’s
shares held

75,500

There are no special interests between the Company and Hidehiko Tsukamoto.

7

No.

Name
(Date of birth)

Biography, status, and responsibilities
April 1983
July 20093

Joined the Company
General Manager ofPrivate Railways Sales
Dept. of Railway Signal
Systems Division
June 2010
Executive Officer
April 2013
Managing Executive
Officer
Reappointment
June 2013
Director (to present)
April 2016
Chief General
TakeshiManager of Sales
Fujiwaraand Marketing Head
(November 7,
Office1959)
April 2019
Responsible for Domestic
Age:61Business and Branch
Offices
Years in office as
April 2020
Deputy Chief Executive
Director: 8 years(at the end of this
Officer (to present)
Meeting)
Responsible for Domestic
and Overseas Businesses
Attendance at theand Branch Offices
Board of Directors’
June 2020
Responsible for Smartmeetings:
14 / 14 (100%)
Mobility Section
April 2021
In charge of Domestic andOverseas Businesses andresponsible for Branch
Offices (to present)[Significant concurrent positions]
None[Reason for nomination as a candidate for
Director]
Takashi Fujiwara has achievements of leading
our domestic business, having held positions
including the manager of the Business Head
Office handling railway signals and Automatic
Fare Collection systems, and deep insightbased on his broad experience. We havedetermined that he is qualified to lead theCompany in expanding its business areas
including those overseas and enhancing its
competitiveness in the future. Therefore, wehave nominated him as a candidate tocontinue as a Director.

Number of theCompany's
shares held

43,100

There are no special interests between the Company and Takeshi Fujiwara.

8

No.

Name
(Date of birth)

Biography, status, and responsibilities
April 1979
September 2004

Number of theCompany's
shares held

Joined the Company
General Manager of
MEMS Business
Development Dept. of
Visionary Business Center
July 2008
Chief General Manager of
Visionary BusinessCenterApril 2009
Chief General Manager ofReappointment
Overseas Division
May 2011
Executive Officer
Hideo Oshima April 2016
Managing Executive Officer(to present)(July 25, 1956)
June
2016
Director(to present)
Age: 64
April 2019
Responsible for Corporate
Strategy Department andYearsin
officeas
438,600
Director: 5 years
Overseas Business(at the end of thisApril 2020
Responsible for Kuki
Meeting)
Plant and Total Quality
Attendance at theManagement Promoting
Board of Directors’
Department
meetings:
14 / 14 (100%)
April 2021
Responsible for Overseas
Business and in charge ofInternational Projects (topresent)[Significant concurrent positions]
None[Reason for nomination as a candidate for
Director]
Hideo Oshima possesses experienceand achievements, having held positions
including the manager of the new businesses
and the Overseas Division and contributing to
the expansion of businesses. We havedetermined that his knowledge will bebeneficial to the Company in further
expanding the business areas and promoting
global management. Therefore, we havenominated him as a candidate to continue asa Director.
There are no special interests between the Company and Hideo Oshima.

9

No.

Name
(Date of birth)

Biography, status, and responsibilities
April 1983

Number of theCompany's
shares held

Joined the Company

July 2006

General Manager of
Accounting Dept.
July 2009
General Manager of
Tohoku Branch Office
June 2014
General Manager ofGeneral Affairs Dept.,
Business Administration
Division
April 2016
Executive Officer,
General Manager ofCorporate Strategy Dept.
April 2018
Chief General Manager ofKuki Plant, Monodukuri
Reappointment
Division
Masahiro Kubo
April 2019
Senior Executive Officer,(April 13,
General Manager of1960)
Corporate Strategy Dept.,
Age: 61
Responsible for FinanceDept.
525,700Years in office as
April 2020
Managing Executive
Director: 1 year
(at the end of this
Officer (to present), In
Meeting)
Charge of Business
Administration (toAttendance at theBoard of Directors’present)
meetings:
June 2020
Director (to present)
10 / 10 (100%)[Significant concurrent positions]
None[Reason for nomination as a candidate for
Director]
Masahiro Kubo possesses experience andachievements in strengthening themanagement foundation of the Group, having
held positions including the manager of a wide
range of divisions such as the Business
Administration Division of the Company. We
have determined that his knowledge will bebeneficial to the Company in pursuingsustained enhancement of corporate value.
Therefore, we have nominated him as a
candidate to continue as a Director.
There are no special interests between the Company and Masahiro Kubo.

10

No.

Name
(Date of birth)

Biography, status, and responsibilities
April 1985
July 2006

July 2010

June 2014

April 2016

New Appointment

6

Masayoshi
Sakai(September 20,
1960)

April 2020

Age: 60
Attendance at theBoard of Directors’
meetings:- / - (-%)

April 2021

Joined the Company
General Manager of
Safety Technology
Research Dept.,
Research Center
Chief General Manager ofResearch & Development
CenterChief General Manager ofKuki Plant, Monodukuri
Division
Executive Officer,
Chief General Manager ofResearch & Development
Center, TechnicalDevelopment Head Officeand Chief General
Manager of Visionary
Business Center
Senior Executive Officer,
In charge of research anddevelopment, Chief
General Manager ofResearch & Development
Section, Chief General
Manager of ANSHIN
Center, General Manager
of Safety Technology
Research Dept., andGeneral Manager ofAdvanced Railway
System Development
SectionManaging Executive
Officer (to present),
Responsible for Kuki
Plant and in charge oftechnology, research anddevelopment (to present),
Chief General Manager ofResearch & Development
Section, General
Manager of PatentManagement Dept.,
11

Number of theCompany's
shares held

17,500General Manager ofAdvanced Railway
System Development
Section (to present), andResponsible for Total
Quality Management
Promoting Department (topresent)[Significant concurrent positions]
None[Reason for nomination as a candidate for
Director]
Having held positions including the manager
of research and development divisions,
Masayoshi Sakai possesses experience andachievements in promoting advanced
technological strategies that make use of ICT.
We have determined that he is qualified tolead the development of new technologies
utilizing IoT and AI. Therefore, we havenominated him as a new candidate for a
Director.
There are no special interests between the Company and Masayoshi Sakai.

12

No.

Name
(Date of birth)

Biography, status, and responsibilities
April 1978

Reappointment
OutsideIndependent

7

YasukoMatsumoto(September 2,
1953)
Age: 67
Years in office as
Director: 6 years(at the end of thisMeeting)

Registered as Attorney
Joined Yamashita Oshima
Law Office
Part-time Lecturer ofApril 2000
Seikei University
Member of Independent
February 2001
Administrative Institution
Evaluation Committee, theMinistry of Economy,
Trade and Industry
Part-time Lecturer ofApril 2007
Tokyo University of theArts
Outside Director of theJune 2015
Company (to present)[Significant concurrent positions]
None

Number of theCompany's
shares held

3,100

[Reason for nomination as a candidate for
Outside Director and an outline of
Attendance at the
expected roles]
Board of Directors’
Yasuko Matsumoto possesses advanced
meetings:
14 / 14 (100%)knowledge and experience as a legal expert,
and has provided advice and proposals on
legitimacy and adequacy from a professional
viewpoint. We expect that she will exercise
effective supervisory function on the
Company’s management. Therefore, we havenominated her as a candidate to continue as
an Outside Director.
Yasuko Matsumoto has served as an Outside
Director for six years at the end of this General
Meeting of Shareholders.
1. There are no special interests between the Company and Yasuko Matsumoto.
2. Yasuko Matsumoto is an Outside Director candidate.
3. Yasuko Matsumoto meets the conditions of an Independent Officer as defined by
Tokyo Stock Exchange, Inc.
4. If Yasuko Matsumoto is elected as an Outside Director, the Company plans to enter
into a limited liability agreement with her, which limits her liability for damages
under Article 423, Paragraph 1 of the Companies Act. However, based on theagreement, the minimum liability amount will be the amount prescribed by laws
and regulations.

13

No.

Name
(Date of birth)

Biography, status, and responsibilities
November 1993

8

Full-time Lecturer ofGraduate Schools for Law
and Politics, The
University of Tokyo
April 2004
Professor of Graduate
School of Law, Kobe
University
October 2010
Professor of The Graduate
School of International
Corporate Strategy,
Hitotsubashi University
April 2018
Professor of Business Law
Department, Graduate
School of Law,
Hitotsubashi University
June 2018
Outside Director of theReappointment
Company (to present)
OutsideOutside Director of
IndependentDai-ichi Life Holdings, Inc.
(to present)
Yuriko Inoue
April 2020
Professor of Business Law(May 29, 1963)
Department, Graduate
School of Law,
Age: 58
Hitotsubashi University
Years in office as(Chair of Department) (toDirector: 3 years
present)(at the end of this[Significant
concurrent
positions]Meeting)
Professor of Business Law Department,
Attendance at theGraduate School of Law, Hitotsubashi
Board of Directors’
University (Chair of Department)
meetings:
14 / 14 (100%)
Outside Director of Dai-ichi Life Holdings, Inc.
[Reason for nomination as a candidate for
Outside Director and an outline of
expected roles]
Yuriko Inoue is a professional in intellectual
property right and possesses sophisticatedand specialized knowledge and experience.
We expect that she will offer advice on the
Company’s management and strategies
including advice mainly on corporate law,data governance and brand strategy, andexercise effective management supervisory
function by making use of her capabilities inher specialized field. Therefore, we havenominated her as a candidate to continue as
an Outside Director. Yuriko Inoue has served

Number of theCompany's
shares held

14

1,400

No.

Name
(Date of birth)

Biography, status, and responsibilities

Number of theCompany's
shares held

as an Outside Director for three years at theend of this General Meeting of Shareholders.
A subsidiary of Dai-ichi Life Holdings, Inc.,the Dai-ichi Life Insurance Company, Limited
where Yuriko Inoue serves as an Outside
Director is a major shareholder and business
partner of the Company. However, its voting
rights ratio is less than 10% and thetransaction amount is immaterial (less than
0.5% of the consolidated net sales of the said
company and of the Company), and wetherefore believe that it does not affect her
independence as an Outside Director.
1. There are no special interests between the Company and Yuriko Inoue.
2. Yuriko Inoue is an Outside Director candidate.
3. Yuriko Inoue meets the conditions of an Independent Officer as defined by Tokyo
Stock Exchange, Inc.
4. If Yuriko Inoue is elected as an Outside Director, the Company plans to enter intoa limited liability agreement with her, which limits her liability for damages under
Article 423, Paragraph 1 of the Companies Act. However, based on the agreement,
the minimum liability amount will be the amount prescribed by laws and regulations.

15

No.

Name
(Date of birth)

Biography, status, and responsibilities
April 20099

President andRepresentative Directorof TAISEI HOUSINGCORPORATION
April 2011
Executive Officer of
TAISEI CORPORATION
April 2013
Managing Executive
Officer of TAISEICORPORATION
June 2013
Member of the Board of
TAISEI CORPORATION
April 2015
President and Chief
Executive Officer,
Representative Directorof TAISEICORPORATION
June 2020
Vice Chairman,
New
Representative Director
Appointment
of TAISEI
OutsideCORPORATION (toIndependent
present)
June 2021
Director and Executive
Yoshiyuki
Vice President of DAIWA
MurataHOUSE INDUSTRY CO.,(July 19, 1954)
LTD. (scheduled to beAge: 66
appointed)[Significant concurrent positions]
Attendance at theBoard of Directors’ Vice Chairman, Representative Director of
TAISEI CORPORATION (scheduled to retire
meetings:- / - (-%)
on June 25, 2021)

Number of theCompany's
shares held

[Reason for nomination as a candidate for
Outside Director and an outline of
expected roles]
Yoshiyuki Murata possesses a wealth ofexperience, achievements and knowledge asa manager, and we expect him to use thesecapabilities for the benefit of the Company’s
management and exercise effective
management supervisory function.
Therefore, we have nominated him as a new
candidate for an Outside Director.
TAISEI CORPORATION, where Yoshiyuki
Murata serves as Vice Chairman,
Representative Director is a major
shareholder of the Company. However, its
16

0

No.

Name
(Date of birth)

Biography, status, and responsibilities

Number of theCompany's
shares held

voting rights ratio is less than 10% and thetransaction amount is immaterial (less than
0.5% of the consolidated net sales of the said
company and of the Company), and wetherefore believe that it does not affect his
independence as an Outside Director.
Furthermore, he is scheduled to retire fromthe office of Director of the said company.
1. There are no special interests between the Company and Yoshiyuki Murata.
2. Yoshiyuki Murata is an Outside Director candidate.
3. Yoshiyuki Murata meets the conditions of an Independent Officer as defined by
Tokyo Stock Exchange, Inc.
4. TAISEI CORPORATION, where Yoshiyuki Murata serves as Representative
Director, has received a cease and desist order from the Japan Fair Trade
Commission in December 2020 on the grounds of violating the Antimonopoly Act inrelation to construction work on the Chuo Shinkansen. However, the said company
has filed an action for the revocation of the order, and the case is now pending.
5. If Yoshiyuki Murata is elected as an Outside Director, the Company plans to enter
into a limited liability agreement with him, which limits his liability for damages
under Article 423, Paragraph 1 of the Companies Act. However, based on theagreement, the minimum liability amount will be the amount prescribed by laws
and regulations.

17No.2 – Election of one Audit & Supervisory Board Member
Audit & Supervisory Board Member Shoji Kawada will resign at the end of this
General Meeting of Shareholders. Accordingly, the Company requests the election of
one Audit & Supervisory Board Member as his substitute.
The term of office of this candidate for an Audit & Supervisory Board Member shallbe the remaining term of office of the retiring Audit & Supervisory Board Member inaccordance with the provisions of Article 30, Paragraph 2 of the Articles ofIncorporation of the Company.
Furthermore, the Company has obtained the consent of the Audit & Supervisory
Board for this proposal.
The candidate for Audit & Supervisory Board Member is as follows.

Biography and status

Number of theCompany's
shares held

Joined the Company
General Manager of
Production Control Dept. ofKuki Plant
June 2008
Executive Officer
General Manager ofCorporate Strategy Dept.
May 2011
Managing Executive Officer
June 2011
Director
June 2014
Deputy Chief Executive
Officer
April 2018
Chief General Manager ofBusiness Administration
Division
April 2019
Director and Executive Vice
President (to present),
Executive Vice President andExecutive Officer
In Control of Plants andGroup Companies,
Responsible for IT Strategy
Department
April 2020
Assistant to President, In
Control of Plants (assigned to
Kuki Plant)
June 2020
Responsible for Total Quality
Management Promoting
Department[Significant concurrent positions]None65,400Name(Date of birth)
April 1982
July 2006

New Appointment

Yoshitaka
Tokubuchi(November 21,
1957)
Age: 63

18

[Reason for nomination as a candidate for
Audit & Supervisory Board Member]
Yoshitaka Tokubuchi possesses a wealth ofexperience and achievements in managementfrom having served as the manager of theBusiness Administration Division and the
Monodukuri Division, as well as expert knowledge
in finance and accounting. We expect that he willoffer auditing and advice on the Company’s
management by making use of these capabilities.
Therefore, we have nominated him as a new
candidate for Audit & Supervisory Board Member.
1. There are no special interests between the Company and Yoshitaka Tokubuchi.
2. The Company has entered into a directors and officers liability insurance agreement as
stipulated in Article 430-3, Paragraph 1 of the Companies Act with an insurancecompany. The insurance covers damages to be borne by the insured parties that arise
from the insured parties as individuals being subject to a claim for damages such asderivative lawsuits and third-party lawsuits. The candidate will be included as an insured
party under the insurance agreement. The Company intends to renew the agreementwith the above contents at the time of renewal in July 2021.

19

(Reference) Criteria for the Independence of Outside Officers
The Company prescribes the following criteria for the independence of Outside Officers
to objectively determine the independence of Outside Officers. If an Outside Officer falls
under any of the following items, the Company determines that the Outside Officer is not
sufficiently independent from the Company.
An Outside Officer designated as an Independent Officer as stipulated under the Tokyo
Stock Exchange, Inc. shall endeavor to maintain independence as prescribed in thisCriteria until resignation. If the Outside Officer loses his/her independence, the Outside
Officer shall notify the Company in advance (or as soon as possible after an event underunavoidable circumstances).
1. A person who is, or has been in the past 10 years, a business executor (*1) or
Non-executive Director (if the person is an Outside Audit & Supervisory Board
Member) at the Group (i.e. the Company or its subsidiaries).
2. Any person (party) who falls under any of the following items (1) to (8) in thepast three years.
(1) A party for whom the Group is a major business partner (*2) or a business executorof such party(2) A major business partner of the Group (*3) or a business executor of such partner(3) A consultant, accounting professional, or legal professional who has received asignificant amount of money (*4) or other property from the Group other than officer
remunerations (if a party who receives such property is a corporation, association,or any other entity, a party who belongs to the relevant entity)(4) A current major shareholder of the Group (*5) or a business executor of suchshareholder(5) A business executor of a corporation that is a current major shareholder of theGroup (*5)(6) A person who belongs to the appointed audit firm for the statutory audit of theGroup(7) A business executor of an entity whose Outside Officer is also a businessexecutor of the Group(8) A person, an officer or other business executor of a corporation, association, or
any other entity who receives a large amount of donation or grant (*6) from theGroup
3. If a person who falls under 1. and 2. above is a key person (*7), close relatives(spouse, first or second degree relatives) of such person
4. A person who has assumed the office of Outside Officer for more than eight
years in total

20

(*1) A business executor refers to a person who executes the duties of a Director (excluding an
Outside Director), Executive Officer, or employees, etc.
(*2) A party for whom the Group is a major business partner refers a party who has business
transactions with the Group, with total amount of sales in any of the fiscal year within the last
three fiscal years exceeding 2% of the consolidated net sales of such business partner. Suchbusiness partner shall include its parent company and important subsidiaries if suchbusiness partner is a corporation.
(*3) A major business partner of the Group refers to a party with whom the Group has business
transactions, with total amount of sales in any of the fiscal year within the last three fiscal
years exceeding 2% of the consolidated net sales of the Group, or a party who has made aloan to the Group in the amount at 2% or more of the consolidated net assets of the Company
at the end of the most recent fiscal year.
(*4) A significant amount of money refers to the yearly average money exceeding 10 million yen
over the three most recent fiscal years.
(*5) A major shareholder refers a shareholder who holds, directly or indirectly, 10% or more of thetotal voting rights. Such major shareholder shall include its parent company or important
subsidiaries if such major shareholder is a corporation.
(*6) A large amount of donation or grant refers to a yearly average amount exceeding 10 million
yen over the three most recent fiscal years.
(*7) A key person refers to a Director, Corporate Officer, Executive Officer, business executor
who serves as a General Manager or in a higher rank, or business executor who has
authority equivalent to that of a General Manager or higher position.

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No.3 – Election of Accounting Auditor
At the end of this General Meeting of Shareholders, KPMG AZSA LLC, theCompany’s Accounting Auditor, will retire due to expiry of its term of office.
Accordingly, the Company requests the election of a new Accounting Auditor basedon a resolution by the Audit & Supervisory Board.
The Audit & Supervisory Board has selected Grant Thornton Taiyo LLC as thecandidate for Accounting Auditor because the Audit & Supervisory Board has
determined that Grant Thornton Taiyo LLC is qualified for this role, comprehensively
taking into account of factors such as its quality control systems as Accounting Auditor,
expertise and independence necessary for accounting audits, global auditing
structure, understanding of the Group, and auditing fees.
Details of Grant Thornton Taiyo LLC, including its principal office and history, areas follows.
(As of March 31, 2021)
Name

Grant Thornton Taiyo LLC

Offices

Principal office:
Other offices:

History

September 1971
October 1994
January 2006
July 2012
October 2013
October 2014
July 2018

Overview

Akasaka K-tower 22F, 1-2-7 Motoakasaka,
Minato-ku, Tokyo
Osaka Office and seven other offices
Taiyo Audit Corporation established
Joined the Grant Thornton Internationalgroup
Merged with ASG Audit Corporation to
become Taiyo ASG Audit Corporation
Merged with Eisho Audit Corporation
Merged with Kasumigaseki Audit Corporation
Changed its name to Grant Thornton Taiyo
LLC
Merged with YUSEI Audit & Co.

Organization
Representative partners/partners:
Special partners:
CPAs:
Employees who have passed the CPA exam:
Other specialists:

84
4
308
227
199

Administrative staff:
Contract staff:
Total:

85
203
1,110

Audits pursuant to the Financial Instruments and Exchange Act andthe Companies Act: 257 companies

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