The 56th Annual
Shareholders’ Meeting

Convocation Notice
For January 1, 2018
to December 31, 2018
■ Date and time

March 8 (Friday), 201910 a.m. (Doors open at 9 a.m.)■ Venue (Refer to the back cover for details.)

Osaka: Swissotel Nankai Osaka(attended by the chairman)

Tokyo: Hotel New Otani

1st Section, TSE

CodePlanet Saitama, a distribution center launched on October 1, 2018 (Satte City, Saitama)

Convocation Notice

Notice of Convocation of the 56th
Annual Shareholders’ Meeting

Business Report

P2

Reference Materials for
Shareholders’ Meeting

P10

Reference Data

P31

At the 1F entrance of Planet Saitama[Engage in work that will live on in corporate history]

2

Generate “ideas,” “methods,” “systems,” “mechanisms” and “strategies” that lead to the evolution and development of the company andcreate a turning point. Selling, buying or making profits alone will not produce work that will live on in corporate history. The source of acompany’ s competitiveness is creativity. Ideas that no one else can come up with will lead to the growth of the company.

To our shareholders(Securities code: 9830)
February 19, 2019

Trusco Nakayama Corporation

Keep It Up, Japanese “Monozukuri” !!

4-28-1 Shimbashi, Minato-ku, Tokyo
Tetsuya Nakayama, President

I would first like to express my gratitude for your warm support.
Trusco Nakayama has made efforts to improve the convenience of customers by continuing its aggressive
capital investment in distribution facilities and equipment as well as its information system, and strategicallystrengthening its expansion of its product lineup and inventories in order to accurately meet the needs ofmonozukuri sites for a wide variety of items in small lots.
This year’s key phrase is “Engage in work that will live on in corporate history.” Work that will live on incorporate history is the generation of “ideas,” “methods,” “systems,” “mechanisms” and “strategies” that leadto the evolution and development, no matter how small, of the company, and create a turning point. The
source of a company’s competitiveness is creativity. Ideas that no one else can come up with will lead to thegrowth of the company. Selling, buying and making profits are highly valued in the world today, but suchachievements alone will not live on in corporate history.
This year also marks our 60th anniversary. I intend to make this year a year in which all of our employees
will engage in work with an awareness toward achieving work that will go down in corporate history so that we
can further advance from our developing stage and reach our 100th anniversary in 40 years’ time.
“Businesses and companies are only worthwhile if they are of use to people and society.” With this thought
always in mind, we will continue to strive to become a company that meets the needs of our customers andmarkets into the future.

■ Decided Matters upon the Convocation
Notice is hereby given that the 56th Annual Shareholders’ Meeting of Trusco Nakayama (the “Company”) will be held as described below, and that you
are invited to attend the Meeting. If you do not expect to attend the Meeting, please review the following “Reference documents for the annual shareholders’meeting” and return the enclosed voting form indicating your vote “for” or “against” each of the proposals, or access the Company’s website for voting,which is indicated on the voting form, and exercise your voting rights via the Internet.
1. Date and Time: March 8 (Friday), 2019 at 10:00 a.m. (Doors open at 9:00 a.m.)
2. Place :(1) Osaka (venue where the chairperson will attend)
Naniwa Room, 8th Floor, Swissotel Nankai Osaka, 5-1-60 Namba, Chuo-ku, Osaka(2) Tokyo
Fuyo Room, Banquet Floor, the Main Building, Hotel New Otani, 4-1 Kioi-cho, Chiyoda-ku, Tokyo*You may ask questions or exercise your voting rights at either venue.
3. Matters Constituting the Purpose of the Meeting- Matter to Be Reported: Reports on the Business Report and Financial Statements for the 56th Period (from January 1, 2018 to December 31, 2018)- Matters to Be Resolved:Proposal No.1: Partial Amendment to the Articles of Incorporation
Proposal No.2: Revision of the Total Amount of Directors’ Remuneration, etc.
Proposal No.3: Election of Nine (9) Directors
Proposal No.4: Election of One (1) Corporate Auditor
Proposal No.5: Election of One (1) Substitute Corporate Auditor
P8 and 9
4. Guide to the Exercising of Voting Rights ▶
(1) If you are attending the shareholders’ meeting
Please present the enclosed Voting Form to the receptionist at the venue of the Meeting. If you are attending the Meeting as a proxy (for only one
other shareholder that owns the Company’s voting rights), please present a document evidencing your authority as a proxy.
(2) If you are not attending the shareholders’ meeting
Please refer to “Guide to the Exercise of Voting Rights” on page 8, and exercise your voting rights within the time limit.
Time limit for exercising voting rights: March 7 (Thursday), 2019 at 5:30 p.m.
Website for exercising voting rights:https://www.web54.net～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～～

Please bring this Notice of Convocation as a material for proceedings and present the enclosed Voting Form to the receptionist at the venue of the Meeting.
- Of the documents to be provided, the Company has posted the [Basic Policy concerning the Control of the Company], [Matters concerning the Establishment of a
System to Ensure the Propriety of the Company’s Operations] of the Business Report and [Notes to Non-consolidated Financial Statements] of the Financial
Statements on the Company’s website (http://www.trusco.co.jp/ “Finance” → “IR Library” → “Shareholders Communication”) pursuant to the provisions of the law and
Article 15 of the Articles of Incorporation. Therefore, they are not stated in this Notice of Convocation. For reference, the Business Report and Financial Statements
attached to this Notice of Convocation are part of the documents that were audited by the corporate auditor and the accounting auditor upon preparing an audit report.
- In the event that an item in the reference materials for the Meeting, the Business Report or Financial Statements must be corrected by the day before the Meeting, thecorrection will be notified by posting the corrected item on the Company’s website (http://w w w.trusco.co.jp/ “Finance” →”IR Librar y ” →”Shareholders
Communication”).

3Organizational Chart(as of January 1, 2019)

Kenichi Saito

Tokyo
venue

Osaka Kuniaki Hagihara
venue Outside director

Outside director
Board Brain (BB)

Board Brain (BB)

Born November 15, 1949 (69 years old)[No. of shares held] 2,500
Career summary
1975: Joined McKinsey & Company
1996: Founded ForeSight & Company
President (present)
2016: Outside Director of the Company (present)
2017: Founded the Society for Problem Solving Proficiency
Representative Director of the Society (present)

What is Board Brain (BB)?

At Trusco Nakayama, we call outside directors “Board Brains.” This term alludes to our hope that they will provide advice and support based on their abundant
experience and knowledge, and contribute to the Company’s development.

Promotion

Kazuo Nakai

Tokyo
venue

Executive Officer
Head of Corporate
Management Division

Born July 7, 1969
49 years old; 25 years 9 months
at Trusco[No. of shares held] 2,700

Career summary
1993: Joined the Company
2002: Head of HC Niigata Sales Office
2004: HC Osaka Branch Manager
2010: Head of Human Resources
Section & Head of Healthcare Section
2013: Head of Corporate Planning Dept.
2017: Executive Officer & Head ofCorporate Planning Dept.
2019: Executive Officer & Head ofCorporate Management Division (present)

Corporate Management DivisionCorporate Planning Dept.
Concurrent

Osaka
venue

Hiroaki Imagawa

Executive Officer
Head of Corporate Planning Dept. &Head of Accounting Dept.

Born January 22, 1963
55 years old; 32 years 9 months
at Trusco[No. of shares held] 20,000

Administration Dept.

Osaka
venue

Toshihiko Maeda
Head of Administration Dept.

Born August 3, 1968
50 years old; 27 years 9 months
at Trusco[No. of shares held] 2,800

Promotion

Head of Information Systems
Division

Born September 10, 1970
48 years old; 25 years 9 months
at Trusco[No. of shares held] 2,700

New establishment(88 employees in total)
Accounting Dept.
Concurrent

Osaka Atsushi Kazumi
venue Executive Officer(41 employees

Information Systems Division in total)
Information Systems Dept.

Osaka
venue

Hiroaki Imagawa

Executive Officer
Head of Corporate Planning Dept. &Head of Accounting Dept.

Born January 22, 1963
55 years old; 32 years 9 months
at Trusco[No. of shares held] 20,000

New appointment

Tokyo Product Dept.

Tokyo
venue

Osaka
venue

Takayuki Kimura

Yutaka Yoneda

Born June 26, 1973
45 years old; 20 years 9 months
at Trusco[No. of shares held] 4,000

Born November 6, 1975
43 years old; 19 years 9 months
at Trusco[No. of shares held] 2,500

Head of Information Systems
Dept.

Head of Tokyo Product Dept.
Tokyo Product Dept.

A new organization has been launched.
I will cooperate with all divisions as the“control tower” of management!

I will enhance the sense of fulfillment
by valuing the company’s assets andpromoting effective use of them.

I will improve the quality of accounting
in an effort to strengthen the company!

I will establish a foundation for greater
convenience through system and IT
reforms.

I will realize an overwhelming productline-up that can address changes in
the market as well as high-level
collaboration with suppliers.

Career summary
1986: Joined the Company
2007: Director & Head of Sales Division
2013: Executive Officer & Head of Factory
Sales Dept. (East)
2016: Executive Officer & Head of Accounting Dept.
2019: Executive Officer & Headof Corporate Planning Dept. & Head of Accounting
Dept. (present)

Career summary
1991: Joined the Company
2006: Head of Numazu Sales Office
2010: Osaka Branch Manager
2014: Head of Administration Dept. (present)

Career summary
1986: Joined the Company
2007: Director & Head of Sales Division
2013: Executive Officer & Head of Factory
Sales Dept. (East)
2016: Executive Officer & Head of
Accounting Dept.
2019: Executive Officer & Head of Corporate
Planning Dept. & Head of Accounting Dept.
(present)

Career summary
1998: Joined the Company
2011: Yamaguchi Branch Manager
2013: Head of Human Resources
Development Section
2019: Head of Information Systems Dept.
(present)

Career summary
1999: Joined the Company
2005: Head of Shiga Sales Office
2009: Head of Recruitment Section
2013: Head of Corporate Planning Section
2017: Head of Tokyo Product Dept.
(present)

Corporate Planning, IR Section
Secretarial Section
Human Resources Development
SectionRecruitment Section
CSR Section(16 employees)

Tokyo Administration Section
Osaka Administration Section
Personnel Section
Healthcare Section
Legal Section
Property Section
Trusco Resort & Spa Hakone
Kyoto Kaguraoka Rengetsu-so
Trusco Nakayama Health Insurance Association
Establishment Preparation Office(49 employees)
Scheduled forestablishment in April 2019

Accounting Section
Finance Section(21 employees)

IT Planning Section
System Management Section
Data Management Section(40 employees)

Tokyo NB Product Section
Tokyo PB Product Section
Tokyo Supplier Development Section
PB Product Design Section
PB Quality Assurance Section
Overseas Purchase Section
Germany Representative Office(34 employees)

Tomoya Tamai

Secretariat, Trusco
Nakayama Health Insurance
Association Establishment
Preparation Office4

Born August 19, 1953 (65 years old)[No. of shares held] 2,000
Career summary
1976: Joined Hagihara Industries Inc.
1984: President of Hagihara Industries Inc.
2010: President & CEO
2016: Chairman (present)
2016: Outside Director of the Company (present)
2018: President of Toyo Heisei Polymer Co., Ltd.
(present)

Norihiro Higashi

Manager, Germany
Representative OfficeOsaka
venue
Osaka
venue

Takashi Nakai

Born December 24, 1958
60 years old; 37 years 9 months
at Trusco[No. of shares held] 1,874,900
Career summary
1981: Joined the Company
1984: Director
1987: Managing Director
1991: Representative Director &Senior Managing Director
1994: President (present)

Born January 16, 1955
63 years old; 40 years 9 months at Trusco[No. of shares held] 31,100
Career summary
1978: Joined the Company
1996: Tokyo Branch Manager
1998: Head of Corporate Planning Division
1999: Executive Officer & Head of Corporate
Planning Division
2004: Director & Head of Distribution Division
2007: Managing Director & Head of Product Division
2017: Senior Managing Director & Head ofCorporate Management Division
2019: Senior Managing Director & Assistantto President (present)

Career summary
1993: Joined the Company
2001: Head of Tsuchiura Sales Office
2006: Osaka Branch Manager
2010: Head of Catalog Media Section &Head of Dotto Kuru Section
2013: Head of e-Commerce Sales Dept.
2017: Executive Officer & Head of Mail
Order, e-Business Sales Dept.
2017: Executive Officer & Head ofInformation Systems Dept.
2019: Executive Officer & Head ofInformation Systems Division (present)

Product Division
Osaka Product Dept.
Newly appointed

Osaka
venue

Kenichi Ogasawara
Head of Osaka Product Dept.

Born January 13, 1970
48 years old; 24 years 9 months
at Trusco[No. of shares held] 600

Tetsuya Nakayama
President

Senior Managing Director
Assistant to President

Tokyo
venue

Shinsaku Miyata
Executive Officer
Head of Product Division

Born June 9, 1964
54 years old; 29 years 9 months[No. of shares held] 5,000

Catalogue Media Dept.

Osaka
venue

President

Osaka
venue

(1,443 employees in total)

Distribution Dept.

Tokyo
venue

Kiyoharu Kawai

Masashi Yamamoto

Born January 27, 1958
60 years old; 42 years 9 months
at Trusco[No. of shares held] 6,800

Born May 27, 1973
45 years old; 22 years 9 months
at Trusco[No. of shares held] 2,600

Executive Officer
Head of Catalog Media Dept.

Board of Directors

Career summary
1989: Joined the Company
1997: Head of Overseas Sales Office
1999: Nagoya Branch Manager
2001: Head of Kobe Sales Office
2008: Center Manager, Planet South Kanto
2011: Head of Product Dept.
2015: Executive Officer & Head of ProductDept.
2016: Executive Officer & Head of Tokyo
Head Office Product Dept.
2017: Executive Officer & Head of Product
Division (present)

Distribution Division(96 employees in total)

Shareholders’ Meeting

Head of Tokyo Metropolitan Area
Distribution Dept.

Tokyo
venue

Takeshi Okamoto

Osaka
venue

Takuma Fukui

Executive Officer
Head of East Japan Distribution
Dept.

Head of West Japan Distribution
Dept.

Born August 4, 1964
54 years old; 31 years 9 months
at Trusco[No. of shares held] 4,800

Born May 25, 1968
50 years old; 27 years 9 months
at Trusco[No. of shares held] 1,100

I will strengthen our partnerships with
suppliers.

A renewed Orange Book.Com has beenlaunched!!

Planet Saitama has been launched!
I will further improve the convenienceof all customers.

I will enhance our strength of delivery
by reinforcing our distributionfunctions.

I will achieve high-quality distribution
by integrating distribution facilities andpersonnel.

Career summary
1994: Joined the Company
2003: Head of HC Maebashi Sales Office
2014: Osaka Branch Manager
2019: Head of Osaka Product Dept. (present)

Career summary
1976: Joined the Company
1995: Head of Kanazawa Sales Office
2007: Head of NB Product Dept.
2013: Executive Officer & Head of Factory
Sales Dept. (West)
2016: Executive Officer & Head of Catalog
Media Dept. (present)

Career summary
1996: Joined the Company
2004: Head of Hamamatsu Sales Office
2010: Head of Auditor Office
2010: Head of Administration Section
2014: Center Manager, Planet Tohoku
2018: Head of Tokyo Metropolitan Area
Distribution Dept. (present)

Career summary
1987: Joined the Company
1999: Head of Toyohashi Sales Office
2008: Head of East Japan Sales Dept.
2011: Head of Accounting Dept.
2014: Executive Officer & Head of Accounting Dept.
2016: Executive Officer & Head of Sales
Planning Dept.
2019: Executive Officer & Head of East Japan
Distribution Dept. (present)

Career summary
1991: Joined the Company
2005: Himeji Branch Manager
2010: Center Manager, Planet Kyushu
2017: Head of West Japan Distribution Dept.
(present)

Osaka NB Product Section
Osaka PB Product Section
Osaka Supplier Development Section
Supplier Management Section(21 employees)

Trusco Orange Book Section
Trusco Orange Book.Com Section
Trusco Orange Book AI Section(38 employees)

Distribution Planning Section
Delivery Management Section
Planet Saitama
Planet East Kanto(274 employees)

Planet Hokkaido
Planet Tohoku
Planet North Kanto
Planet Tokyo
Planet South Kanto
HC East Japan Distribution Center(404 employees)

Planet Tokai
Planet Nagoya
Planet Shiga
Planet Osaka
Planet Kobe
Planet Sanyo
Planet Kyushu
HC West Japan Distribution Center
HC Kyushu Distribution Center
East Osaka Stock Center
Nara Stock Center
Okayama Stock Center
Hakata Stock Center
Kurume Stock Center(762 employees)* “Planet” is the name of the distribution centers.

5

Osakavenue

Board of Auditors
Corporate Auditor’s Office
Two employees(concurrent position)

Masaki Matsuda

Akira Takada

Tokyo
venue

Full-time Corporate Auditor

Born March 30, 1956
62 years old[No. of shares held] 14,600
Career summary
1978: Joined the Kyowa Bank, Ltd.
(currently Resona Bank, Ltd.)
2003: Chief Credit Officer of the OsakaNo. 3 Loan Dept., Resona Bank, Ltd.
2007: Full-time Corporate Auditor of
the Company (present)

Full-time Corporate Auditor

Born January 3, 1958
60 years old[No. of shares held] 100
Career summary
1981: Joined Nomura Securities Co., Ltd.
2001: Head of IB Consulting Office
2009: Managing Director of IB Business
Development Dept.
2012: Director of Nomura Investor Relations
Co., Ltd.
2015: Advisor of Nomura Investor Relations
Co., Ltd.
2018: Full-time Corporate Auditor of theCompany (present)

Audit Supervision Office

Two out of the four employees
hold concurrent positions.

Hideki Naoyoshi

Executive Officer
Head of Distribution Division

Born December 7, 1971
47 years old; 24 years 9 months
at Trusco[No. of shares held] 3,500

Career summary
1994: Joined the Company
2003: Head of Amagasaki Sales Office
2007: Head of Kokura Sales Office
2010: Head of Corporate Auditor’ s Office
2011: Head of Corporate Planning Section
2013: Head of Information Systems Dept.
2017: Executive Officer & Head of Information
Systems Dept.
2017: Executive Officer & Head of Distribution
Division (present)

Tokyo
venue

Tadahisa Yabuno
Managing Director
Head of Sales Division

Born March 13, 1962
56 years old; 34 years 9 months
at Trusco[No. of shares held] 29,300

Sales DivisionMarketing Dept.
Concurrent

Factory Sales Dept.

Tokyo
venue

Osaka
venue

Tsuyoshi Tsuchiya

Head of Marketing Dept. &Head of MRO Supply, e-Business
Sales Dept.

Born February 19, 1978
40 years old; 18 years 9 months
at Trusco[No. of shares held] 3,200

Tokyo
venue

Osaka
venue

Osaka
venue

Ryo Domori

Eitaro Shimoda

Mikio Adachi

Masato Otani

Born April 5, 1975
43 years old; 19 years 9 months
at Trusco[No. of shares held] 1,600

Born August 21, 1970
48 years old; 24 years 9 months
at Trusco[No. of shares held] 1,700

Born September 20, 1969
49 years old; 24 years 9 months
at Trusco[No. of shares held] 2,500

Born October 24, 1967
51 years old; 27 years 9 months
at Trusco[No. of shares held] 1,200

Head of Hokkaido/Tohoku/
North Kanto Factory Sales Dept.

Head of Tokyo Metropolitan Area
Factory Sales Dept.

Head of Shinshu/Hokuriku/
Tokai Factory Sales Dept.

Head of Kinki Area Factory
Sales Dept.

I will further improve the convenienceof customers by using digitaltechnology.

I will make efforts to expand ourcustomers’ business by exercising oursales and distribution abilities.

I will contribute to helping thebusiness expansion of our customers.

I will continue to strive to enable users
to use us more conveniently.

I will determine the information andproducts that are needed to try tosolve problems of customers.

Career summary
2000: Joined the Company
2007: Head of PR Section
2012: Yokkaichi Branch Manager
2016: Head of MRO Supply, e-Business Sales
Dept.
2019: Head of Marketing Dept. & Head of
MRO Supply, e-Business Sales Dept.
(present)

Career summary
1999: Joined the Company
2007: Center Manager, Planet North Kanto
2009: Head of Distribution Control Section
2015: Kanazawa Branch Manager
2018: Head of Hokkaido/Tohoku/North Kanto
Factory Sales Dept. (present)

Career summary
1994: Joined the Company
2002: Head of Yokohama North Sales Office
2007: Head of Corporate Planning Section
2014: Tokyo Branch Manager
2016: Head of Factory Sales Dept. (East)
2018: Head of Tokyo Metropolitan Area
Factory Sales Dept. (present)

Career summary
1994: Joined the Company
2002: Head of HC Nagoya Sales Office
2013: Center Manager, Planet North Kanto
2016: Head of Factory Sales Dept. (West)
2018: Head of Shinshu/Hokuriku/Tokai
Factory Sales Dept. (present)

Career summary
1991: Joined the Company
2008: Head of Kagoshima Sales Office
2014: Head of Human Resources Section
2018: Head of Kinki Area Factory Sales
Dept. (present)

Sales Planning Section
Brunch Support Section
Customer Service Office(17 employees)

615 branches

10 branches

14 branches

10 branches

Hokkaido/Tohoku block
SapporoHachinohe
Akita
Koriyama
North Kanto block
Mito
Satte
Utsunomiya Koyama
IsezakiOmiya
Niigata-kita(204 employees)

Tokyo metropolitan area block
Chiba
Matsudo Jonan
Itabashi
HachiojiTokyo
Edogawa Atsugi
Kawasaki
Shonan(143 employees)

Shinshu/Hokuriku block
Okaya
ToyamaFukui
Ueda
Kanazawa

Kinki block
Ryuo
Kyoto
Osaka
Minami-Osaka Higashi-Osaka
Kita-Osaka
HimejiKobe
Akashi
Wakayama(150 employees)

Sendai
KashimaKumagaya
Niigata

Tokai block
Shizuoka Fuji
KariyaYokkaichi
NagoyaKomaki(214 employees)

OkazakiHamamatsu
Meijo

Osakavenue

Hiroho Kamakura

Part-time Corporate Auditor

Born January 27, 1947
71 years old[No. of shares held] 2,500
Career summary
1971: Joined Tohmatsu Aoki & Co.
(currently Deloitte Touche Tohmatsu LLC)
1973: Registered as a certified public accountant
2012: Part-time Corporate Auditor of the Company(present)
Part-time corporate auditor of Yushin Precision
Equipment Co., Ltd. (present)
2013: Part-time corporate auditor of Fujio Food
System Co., Ltd. (present)

Career summary
1984: Joined the Company
1998: Head of Fujisawa Sales Office
2000: Kanagawa Branch Manager
2003: Executive Officer & Jonan Branch Manager
2007: Director & Head of Corporate Management Division
2014: Managing Director & Head of Corporate Management Division
2016: Officer in charge of Trusco Nakayama Indonesia (present)
2017: Managing Director & Head of Sales Division (present)
Officer in charge of Trusco Nakayama Thailand (present)

56th October Management Committee (55th Anniversary Hall, 3F, Tokyo Head Office)The meetings are held in a round-table layout so that everyone can see each other’ s faces.
The seating is changed each time so that the members can participate with a fresh feeling
each time.

(1,037 employees in total)
Home Center Sales Dept.

Osaka
venue

Yoshihiro Fujimoto
Head of Chugoku/Shikoku/
Kyushu Factory Sales Dept.

Born September 10, 1971
47 years old; 23 years 9 months
at Trusco[No. of shares held] 1,000

e-Business Sales Dept.

Tokyo
venue

Hiroyuki Hoshino

Head of Home Center Sales Dept.

Born March 14, 1971
47 years old; 26 years 5 months
at Trusco[No. of shares held] 2,700

Overseas Dept.

Concurrent

Tokyo
venue

Osaka
venue

Koichi Ezaki

Tsuyoshi Tsuchiya

Born February 3, 1975
43 years old; 21 years 9 months
at Trusco[No. of shares held] 2,500

Born February 19, 1978
40 years old; 18 years 9 months
at Trusco[No. of shares held] 3,200

Head of Mail Order, e-Business
Sales Dept.

Head of Marketing Dept. & Head of
MRO Supply, e-Business Sales Dept.

Tokyo
venue

Kiyonori Unto

Head of Overseas Dept.

Born February 9, 1962
56 years old; 31 years 1 monthat Trusco[No. of shares held] 5,100

I will improve our personal and sales
abilities to make further use ofmanagerial resources.

I will provide a broad range of products
and services that meet the needs ofphysical stores.

I will improve the formula“people=sales,” which connects
distribution and systems with the aimof further expansion.

I will further promote electronic
procurement by introducing the new
Orange Commerce.

We will enter a new phase, as we startto achieve consolidated results andthe new building in Indonesia iscompleted.

Career summary
1995: Joined the Company
2012: Kagoshima Branch Manager
2015: Fukuoka Branch Manager
2018: Head of Chugoku/Shikoku/Kyushu
Factory Sales Dept. (present)

Career summary
1991: Joined the Company
2007: Center Manager, Planet Nagoya
2012: Okazaki Branch Manager
2016: Head of Home Center Sales Dept.
(present)

Career summary
1997: Joined the Company
2003: Head of Yokohama Sales Office
2010: Representative Director, Managing
Director of Trusco Nakayama Thailand
2014: Hiroshima Branch Manager
2017: Head of Mail Order, e-Business Sales
Dept. (present)

Career summary
2000: Joined the Company
2007: Head of PR Section
2012: Yokkaichi Branch Manager
2016: Head of MRO Supply, e-Business
Sales Dept.
2019: Head of Marketing Dept. & Head of
MRO Supply, e-Business Sales Dept.
(present)

Career summary
1986: Joined the Company
1996: Head of Fukui Sales Office
2011: Head of Factory Sales Dept. (East)
2013: Head of Overseas Dept. (present)

2 branches

Overseas Sales Section*Overseas subsidiary service center(12 employees: incl. 6 staff on loan)

17 branches
Chugoku/Shikoku block
YonagoOkayama Hiroshima
Fukuyama Ube
ShunanTakamatsu Tokushima Matsuyama
Kyushu block
Fukuoka
KokuraTosu
Nagasaki Kumamoto Oita
Kagoshima Okinawa(192 employees)

6 branches
HC Tokyo No.1
HC Tokyo No.2
HC Osaka
OkazakiFukuoka
Okinawa*Includes 3 branches that also
serve as branches of the
Factory Sales Dept.
(41 employees)

3 branches
Mail Order Tokyo No.1
Mail Order Osaka(40 employees)

Mail Order Tokyo No.2

MRO Supply TokyoMRO Supply Kobe
(15 employees)*Overseas subsidiaries Officer in charge at Trusco Nakayama Corporation: Tadahisa Yabuno (38 employees in total)
TRUSCO NAKAYAMACORPORATION（THAILAND）LIMITED.

PT.TRUSCO NAKAYAMAINDONESIA

Capital: 390 mn. baht
(approx. 1.3 bn. yen)
Auditor: Kiyonori Unto
(3 staff on loan, 18 local staff)

Capital: 378.8 bn. rupiah(approx. 3.2 bn. yen)
Auditor: Kiyonori Unto
(3 staff on loan, 14 local staff)

Noboru Yasui
President

Mitsugu Okumura
Representative
Director & President

7

Guide to the Exerciseof Voting Rights
Voting Right Exercise Methods

Procedures of the
Shareholders’ Meeting

Voting Right Exercise Methods Page 8–

Business Report Page 10–

There are three methods to exercise your voting rights.

A By attending the Meeting[Date and time of the Meeting]March 8 (Friday), 2019

Please present the enclosed Voting
Form to the reception.

10:00 a.m.
(reception starts at 9:00 a.m.)

Please bring the form WITHOUT separating the right section.

B Via the Internet[Time limit for the exercise of voting rights]

To exercise your voting rights via the Internet, please access the website specified
by the Company and exercise your rights by following the instructions on the screen.

March 7 (Thursday), 20195:30 p.m.

1. Access the website for exercising voting rights.
Website for exercising voting rights:

https://www.web54.net

If using a smartphone, you may also
access the site from the code on theright.

Click
2. Log in.

The “Code for the Exercise of Voting Rights”
and the “Password” indicated in the enclosed
Voting Form are required.

Click

Notes
3. Enter a new password on the next screen andenter “For” or “Against” according to the
instructions on the screen.

- If you exercise your voting rights twice, by post (in writing) and via the Internet,
we will only accept the exercise of your voting rights via the Internet as effective.
- If you exercise your voting rights more than once via the Internet, we will only
accept the latest exercise of your voting rights as effective.
- Exercising voting rights with a PC or smartphone, etc., may not be possible
depending on your Internet environment. In addition, exercising voting rights may
not be possible with some mobile phones.

Inquiries on Exercising Voting Rights via the Internet
Please contact the number below for inquiries on the operation method of PCs and smartphones concerning the exercise of voting rights on the website.
Dedicated phone number for stock transfer agency web support of Sumitomo Mitsui Trust Bank

C By post

If exercising your voting rights bypost, please indicate your vote “For”
or “Against” for each proposal on the
Vo t i n g F o r m , t e a r o f f t h e r i g h t
section along the perforation, hide
your personal information
using the sticker, andPlease enter here
post the Form.
and post.

80120-652-031 (9:00 a.m. to 9:00 p.m., excluding year-end and New Year’s holidays)[Time limit for the exercise of voting rights]

March 7 (Thursday), 20195:30 p.m. (latest arrival time)* When attending the Shareholders’Meeting, do not post the Voting Formbut bring it to the venue of the
Meeting.

Initiatives in the 57th Period Page 15–

Outside Officer’s Report Page 22–

Proposal Details Page 31–

Q&A Page 42–

How to Fill in the Voting Form
Convocation Notice

Please enter your vote for each proposal by referring to pages 31 to 40 for the details of the proposals.

Circle “賛(For)” if you agree.
Circle “否(Against)” if you disagree.

- If you do not indicate your vote for each
proposal, your votes will be treated asaffirmative votes.
(Correct) (Incorrect)- Your vote will be
invalid if you circle
both “賛(For)” and“否(Against).”P2

Business Report

Attention:

Reference Materials for
Shareholders’ Meeting

P10

Voting on the Day
Based on the idea that it is important to judge “For” or “Against” after seeing the presentations,discussions, persons, etc. on the day of the Meeting, we hand voting forms to the shareholders. We
aggregate the results of the votes by our shareholders on the day of the Meeting and disclose them in
the notice of resolution or extraordinary reports.

1. If voting early via the Internet (refer to B on page 8) and attending the Meeting(Example)
Voted “Against”
a proposal inearly voting

Voted “For” theproposal using thevoting form at
the Meeting

The vote will bechanged andcounted as “For.”

For・ Against

For ・ Against

For ・ Against

Voting form
at the Meeting

Reference Data

Relationship between Prior Voting and Voting on the Day

P10

2. If attending the Meeting without voting early(Example)If you vote on a Voting
Form you have brought
to the venue, it will bedeemed invalid.

Voted “for” aproposal using
the voting form
at the Meeting

The vote result
will be aggregatedas “for.”For ・ Against

For ・ Against
At the Meeting, you will be
asked to place your voting
form in the ballot box.

■ Open Judge System (OJS) on the President
We consider the results of the votes on the day of the Meeting concerning the President by shareholders who have heard
the business report and Q&As to be an important evaluation indicator of the President as the “OJS on the President.” The
results will be posted on the notice of resolution on the Company’s website on March 11 (Monday), 2019 after the closing of
the Meeting. The results of the “OJS on the President” for the previous period (55th Period) are presented on page 33.

9Business Report for the 56th Period

Procedures of the
Shareholders’ Meeting(January 1, 2018 to December 31, 2018)

Voting Right Exercise Methods Page 8–

Business Report Page 10–(Attachment) Note: Figures are rounded to the nearest unit.

166

152

Sales
(100 million yen)

164

21.2%

＋16.0
●

＋15.8

Unchanged

＋12.2
●

＋12.2
＋10.7
●

Year on year

＋4.4

＋3.8
＋1.3

14,364 million yen+0.6%

14,642 million yen

January February March★ 18 days 19 days 21 days
(±0)

(-1)

(-1)

April

May

June

July

August September October November December

20 days(±0)

21 days(+1)

21 days(-1)

21 days(+1)

19 days
(±0)

●

●
●

●

●

883

●

878

●

853

845

841

900
●

889

862

●
●

819

●

-2.00 yen

January February March★ 18 days 19 days 21 days(±0)

☆ +10.1%(-1)+13.5％

(-1)

+9.4％

793

793

813

797

55th period(previous fiscal year)●

37.00 yen

749

●

767

●

800

●

-6.84 yen●

147.44 yen●

Increase/Decrease

891●

Dividend
per share

922

916
●

9,722 million yen

19 days(-1)

56th period (the fiscal
year under review)●

Increase/Decrease

21 days
(+1)

984

973

●

Net income
per share

22 days(+1)■ Average sales per day (million yen)

+0.4%

-4.4%

18 days(-2)★No. of operating days in the 56th period (year-on-year change)908

Net income

Year-on-yearchange(%)●

Year on year

+0.6 points●

Ordinary
income14.5%●

Operatingincome＋7.8●

Year on year

＋8.2
●

SG&A
expenses ratio

187

＋18.0

＋10.1

Year on year

10

171

●

Reference Materials for
Shareholders’ Meeting

168

193

●

Year on year

172

●

Gross
profit margin

+9.8%

179

194

187

●

Reference Data

214,297 million yen●

P31Year on year

Year-on-year change (%)

204

●

P10

Sales

Sales (100 million yen)●

Business Report

P2■ Monthly sales

Results for the 56th period(Year ended December 31, 2018)●

Convocation Notice■ Business Development and Results

742

753

April

May

June

July

August September October November December

20 days(±0)

21 days(+1)

21 days(-1)

21 days(+1)

19 days(±0)+12.2％+10.3％+13.3％+12.4％+10.7％

18 days(-2)+12.6％

22 days(+1)+10.7％★No. of operating days in the 56th period (year-on-year change)

21 days
(+1)

+6.9％

19 days
(-1)

+9.3％

☆Year-on-year change

During the fiscal year under review (January 1, 2018–December 31, 2018), the Japanese economy saw flat growth incompanies’ production activities in general, due to high levels of capital investment by companies on the back of labor-saving
efforts owing to labor shortage as well as IoT, despite heightened uncertainties due to the impact of multiple natural disasters
and the developments of the U.S. trade policy.
In the field of monozukuri, or manufacturing, in Japan, corporate earnings remained stable due to a rise in expectations
toward demand for restoration from the aforementioned natural disasters, despite capital investment in semiconductor
manufacturing equipment and industrial robots appearing to have paused.
Under these circumstances, Trusco Nakayama continued to make aggressive capital investment to accurately meet thefrequent needs of monozukuri sites for a wide variety of items in small lots.
Planet Saitama (gross floor area: 12,915 tsubo; inventories in possession: 360,000 items), Trusco Nakayama’s largest
distribution center which was launched on October 1, 2018, has strengthened the immediate delivery system by introducing
cutting-edge distribution facilities, such as an automated warehouse-type picking system, and establishing a unique
distribution system to improve the efficiency of distribution work. It has made efforts to improve customers’ convenience byincreasing the number of items handled and strengthened its inventory enhancement strategically toward the goal ofenhancing the number of inventory items of each area, centered around distribution centers, to 520,000 by 2023.

307

●

29
25

123

148

134

0.5

0.5

●

Overseas
manufacturers

Ordinary income(100 million yen)

- 0.1

55th period
Sales

56th period●

Ordinary income
12(100 million yen)
9.1
- 0.2

57th period
forecast

9.6

- 0.8

-1.0

56th period

57th period
forecast●

55th period●

0.5% of sales [±0 points yoy]

57th period
forecast●

The Company treats sales of the Overseas Department,
including sales to the subsidiaries Trusco Nakayama Thailand
and Trusco Nakayama Indonesia, as “Other.”

●

Sales

56th period

Outdoor work-related businesses,
general consumers, etc.

55th period

Overseas RouteSales: 963 million yen,
+5.3% year on year

33

243

●

[+43
year-on-year]

6.3% of sales [-0.1 points yoy]

Ordinary income
360(100 million yen)●197
companies

We strove to stimulate demand and change clients’accounts to us by proposing the improvement of sales floors
and reinforcing the development of store brand products
mainly at professional shops targeting users at construction
sites, etc.

57th period
forecast

Overseas
manufacturers, etc.

Sales

56th period●

Domestic manufacturers

55th period

Home Center RouteSales: 13,466 million yen,
+8.6% year on year

●

115

●

14.3% of sales [+1.9 points yoy]

118

117

●

We strengthened our unique distribution service that caters
to each customer ’s packaging format by accelerating
coordination between our product databases, which
encompass 1.86 million items, and customers’ systems. We
also carried out highly specialized sales activities to some of
our users, such as shortening the delivery time by delivering
products we received through our customers directly.

1,810

1,691

●

[+95
year-on-year]

1,574

e-Business RouteSales: 30,745 million yen,
+26.1% year on year

More than
1 million
companies

Ordinary income(100 million yen)

●

2,280
companies

78.9% of sales [-1.8 points yoy]

Sales

●

Factory Route

We strengthened our search and order functions throughthe renewal of Trusco Orange Book.Com, and promoted
customers’ product purchase by a one-stop service. We
continued to carry out sales activities, such as holding
distribution center tours for clients and promoting products ofmanufacturers with brand power.

[-10 yoy]

Manufacturers,
construction-related businesses, etc.

Four business routes
Total net sales: 214,297 million yen +9.8% year-on-year
Sales: 169,122 million yen,
+7.4% year on year

5,323 companies

Manufacturers,
general consumers, etc.

(Wholesale)

Home centers,
electronics retail stores, etc.

[Year-on-year
+138]

Users

(Retail)

Overseas dealers,
overseas subsidiaries, etc.

2,477 companies

Customers

Machinery tool dealers,
welding material dealers, etc.

Supplier(Manufacturer)

Online shopping firms, etc.

Business Model

Convocation Notice

Q&A Page 42–

P2

Business Report

Proposal Details Page 31–

P10
Reference Materials for
Shareholders’ Meeting

Outside Officer’s Report Page 22–

P31

Reference Data

Initiatives in the 57th Period Page 15–■ Sales and composition ratio by product category (Figures in brackets indicate year-on-year changes; pie-charts indicate the percentage of total sales.)Cutting tools

7,871 million yen (+9.0%)

3.7％

Production processing tools
17,920 million yen (+10.4%)

8.4％

Environmental safety equipment Distribution and storage equipment
33,720 million yen (+13.0%)

26,480 million yen (+10.6%)

15.7％

12.4％

Construction goods

Work supply

Hand tools

11.1％

17.9％

16.8％

23,785 million yen (+11.1%)

38,446 million yen (+7.2%)

35,973 million yen (+8.3%)

Research management equipment Office furniture and equipment Other
9,467 million yen (+10.2%)

4.4％

19,116 million yen (+11.8%)

8.9％

1,514 million yen (-9.4%)

0.7％

11

Business Report for the 56th Period(January 1, 2018 to December 31, 2018)

Procedures of the
Shareholders’ Meeting

Voting Right Exercise Methods Page 8–

Business Report Page 10–

Convocation Notice■ Business Development and Results■ Progress and plan of the Company’s important indices56th Period

55th Period

57th Period

Year ended December 2018

Fiscal year under review

Year ending December 2019
Plan
Next fiscal year

1,662,400 items (+233,000)

1,863,100 items (+200,700)

2,350,000 items (+486,900)

50,200 items (+4,600)

56,500 items (+6,300)

58,700 items (+2,200)

2,339 companies (+117)

2,477 companies (+138)

2,587 companies (+110)

Of which, No. of domestic suppliers

2,185 companies (+76)

2,280 companies (+95)

2,360 companies (+80)

Of which, No. of overseas suppliers

154 companies (+41)

197 companies (+43)

227 companies (+30)

336,800 items (+37,900)

374,600 items (+37,800)

384,150 items (+9,550)

89.5% (+0.7)

89.9% (+0.4)

90.0% (+0.1)

74 (+11)89 (+15)105 (+16)

24.3% (+1.6)

30.4% (+6.1)

35.8% (+5.4)

5,333 companies (- 15)

5,323 companies (- 10)

5,310 companies (- 13)

27,140 (+813)

26,168 (- 972)

26,700 (+532)

302 companies (+30)

312 companies (+10)

342 companies (+30)

992 (+216)

1,057 (+65)

1,174 (+117)

82.0％ (±0)

81.7％ (- 0.3)

82.0％ (+0.3)

38.6

38.2

39.0

Average annual income (Regular employees)

7.15 million yen(+0.4 million yen)

7.01 million yen(-0.14 million yen)

6.77 million yen(-0.24 million yen)

Of which, average performance-linked
bonus payment

0.4 million yen

0.23 million yen

0 yen

Total no. of employees (incl. part-time staff)

2,568 (+279)

2,719 (+151)

2,845 (+126)

No. of manufacturers listed

1,572 companies (+112)

1,719 companies (+147)

1,770 companies (＋51)

No. of items listed

359,800 items (+47,800)

401,600 items (+41,800)

444,000 items (+42,400)

Important indicesYear ended December 2017
Previous fiscal year

P2

No. of private brand (PB) product items
Product

Business Report

No. of items handled

P31

No. of inventory items
Distribution

Reference Materials for
Shareholders’ Meeting

P10

Total number of suppliers

Inventory hit rate

(Percentage of deliveries shipped frominventory out of total order intake)No. of own delivery trucks

Sales

Reference Data

Percentage of use of own delivery trucks
No. of customer firms
No. of customer accounts

IT

No. of companies connected to Orange
Commerce
No. of factories connected to Orange
Commerce
Online order intake ratio(Percentage of orders processed in thesystem out of total order intake)

Trusco Orange Book

Personnel

Average age (Regular employees)

12Notes: 1. Figures in brackets indicate year-on-year changes.
2. Average annual income includes executive officers and excludes financial bonds.

Initiatives in the 57th Period Page 15–

Outside Officer’s Report Page 22–

Proposal Details Page 31–

Q&A Page 42–

Category

47th Period(million yen)

48th Period

Year ended Mar.
2010

49th Period

Year ended Mar.
2011

50th Period

Year ended Mar.
2012

52th Period

51th Period

Year ended Mar.
2013

53th Period

Year ended Dec.
2014
(nine-month results)

Year ended Mar.
2014

54th Period

Year ended Dec.
2015

56th Period

55th Period

Year ended Dec.
2016

Year ended Dec.
2018
(Fiscal year under review)

Year ended Dec.
2017

Sales

99,201

115,477

129,912132,295

145,882

114,473

166,565

177,053

195,096214,297

Gross profit
margin

20.9％

20.4％

20.4％

20.3％

20.4％

20.9％

21.5％

21.7％

21.2％

21.2％

SG&A

17,036

18,075

18,134

18,451

19,58815,50422,78824,198

27,114

31,127

Operatingincome

3,745

5,479

8,369

8,356

10,133

8,477

12,976

14,163

14,276

14,364

Ordinary
income

3,665

5,378

8,315

8,311

10,078

8,494

13,211

14,433

14,581

14,642

Net income

1,607

2,874

3,933

4,818

5,954

5,474

8,242

9,963

10,173

9,722

Net income
per share

24.38 yen

43.57 yen

59.64 yen

73.05 yen

90.28 yen

83.01 yen

124.98 yen

151.08 yen

154.28 yen

147.44 yen

Net assets

73,55475,72378,541

82,28387,03990,917

97,777

105,836

113,680

120,648

Return on
equity (ROE)

2.2%

3.9%

5.1%

6.0%

7.0%

6.2%

8.7%

9.8%

9.3%

8.3%

Total assets

88,68792,85797,459100,032

109,738

109,917

120,141

128,044

147,363

170,216

Net assets
per share

1,115.07 yen

1,147.99 yen

1,190.73 yen

1,247.49 yen

1,319.67 yen

1,378.52 yen

1,482.65 yen

1,604.89 yen

1,723.87 yen

1,829.54 yen

Return on
assets (ROA)
Capitaladequacy ratio

4.2%

5.9%

8.7%

8.4%

9.6%

7.7%

11.5%

11.6%

10.6%

9.2%

82.9％

81.5％

80.6％

82.3％

79.3％

82.7％

81.4％

82.7％

77.1％

70.9％

Notes: 1. Net income per share is based on the total number of shares outstanding during the period minus the average number of treasury shares during the period.
2. Net assets per share are based on the number of outstanding shares at the end of period minus the number of treasury shares.
3. The Company carried out a stock split of two common shares to one as of January 1, 2017. Therefore, the “Net income per share” and “Net assets per share” are computed based on theassumption that the stock split took place at the beginning of the 47th period.

P2

Business Report

PeriodP10
Reference Materials for
Shareholders’ Meeting■ Performance indicators

Convocation Notice■ Assets and Profits of the Past 10 Years

P31■ Trend of cash flows
47th Period

PeriodCash flows from operating
activities
Cash flows from investing
activities
Cash flows from financing
activities
Balance of cash and cash
equivalents at end of period

48th Period

49th Period

50th Period

51th Period

53th Period

54th Period

Year ended Mar.
2011

Year ended Mar.
2012

Year ended Mar.
2013

Year ended Mar.
2014

Year ended Dec.
2014
(nine-month results)

Year ended Dec.
2015

Year ended Dec.
2016

Year ended Dec.
2017

Year ended Dec.
2018
(Fiscal year under review)

7,132

5,937

3,567

4,486

9,368

3,263

9,336

6,459

8,932

6,928

- 1,665- 8,674- 3,195- 5,293- 5,502- 4,385- 5,083- 7,806- 16,628- 18,144

- 629

- 662

- 892

- 1,187- 1,288- 1,735- 1,575- 2,262

7,424

12,492

17,812

14,413

13,893

11,89914,476

11,61814,296

10,682

10,412

11,685Inventory value (million yen)●●

■ Sales, ordinary income and inventory value
Sales (million yen)

56th Period

55th Period

Year ended Mar.
2010

214,297
Ordinary income (million yen)Sales(million yen)

195,096
37,004●177,053
166,565●

31,841

145,882●●

20,31025,017●●

20,224

114,473
21,759●18,35929,055132,295

115,477
99,201Inventoryvalue(million yen)●

129,912Reference Data

Category(million yen)
52th Period

14,642

●

2013

2016

2017

2018
(Fiscal year under review)

8,494
●

2012

●

●

8,311

Ordinary
income(million yen)

●

5,378

●

3,665

10,0788,315●

14,581●

14,433●

13,211●

16,058●●

16,225201020112014 Year
ended Mar.

2014 Year
ended Dec.
(nine-month results)

2015

13

Business Report for the 56th Period(January 1, 2018 to December 31, 2018)

Convocation Notice■ Major Capital Investments during the Fiscal Year under Review

Business Report

P2■ Capital investments during the 56th period
Launch of “Auto Store” at Planet North Kanto

Launch of distribution center, Planet Saitama

On April 2, we launched Auto Store, an automated warehouse-type
picking system at Planet North Kanto. Containers are placed in alimited space at high density and are conveyed by robots.

On October 1, we launched Planet Saitama, our largest distribution
center.

 Investment: Approx. 480 million yen
 No. of containers: 32,000
 No. of items expected to be stored: 77,800
 No. of conveyor robots: 24
 Storage efficiency improvement: 3.5 times
 Work efficiency improvement: 4 times

 Address: 988-7 Shinmeiuchi Akagi, Satte City, Saitama
 Site area: 14,297 tsubo
 Floor area: 12,915 tsubo
 Investment: Approx. 20 billion yen (land, building, equipment, supplies) No. of inventory items: 360,000 (as of end-Dec.)
520,000 items (during 2023)

Planet Saitama is our first distribution center to have a day nursery
and an employee canteen. Cooks, dietitians and nursery staff are also
regular employees of the Company.

Reference Materials for
Shareholders’ Meeting

P10

Reference Data

P31

Day nursery Trukids Saitama

Employee canteen Cherry Blossom

Started internal use of the product search system AI Orange Rescue
On June 1, we started internal use of AI Orange Rescue, a new system that uses AI. It
enables users to search from a vast number of products through natural conversation (natural
language), as well as narrowing down products when the product name or item number is
unknown, using ambiguous words such as usage and characteristics. We will first make the AI learn through internal use and enhance it forcustomers’ use in the future.

Reference Capital investments continued in the 57th period
Planet North Kanto (extension)

Planet Tohoku (extension)

Planet South Kanto (reconstruction)

 Isezaki City, Gunma Site area: 10,000 tsubo
 Floor area: 7,695 tsubo after extension
 Total investment: 1.9 billion yen
 No. of planned inventory items: 500,000 Extension scheduled for completion in Aug. 2019

 Sendai City, Miyagi
 Site area: 3,905 tsubo
 Floor area: 8,587 tsubo after extension
 Total investment: 7 billion yen
 No. of planned inventory items: 500,000 Extension scheduled for completion in Nov. 2019

 Isehara City, Kanagawa
 Site area: 3,662 tsubo
 Floor area: 7,885 tsubo after extension
 Total investment: 11.1 billion yen
 No. of planned inventory items: 500,000
 Reconstruction scheduled for completion in May

2020

Extended portion

Extended portion
Image of completed facility

Image of completed facility

Image of completed facility■ Financing
With the aim of enhancing functions to improve customers’ convenience, we financed 10 billion yen through bank borrowings in August 2017 and havemade aggressive capital investment. During the fiscal year under review, we financed 15 billion yen through bank borrowings in July 2018 to continue
investments in distribution facilities and information systems.

14

Initiatives in the 57th Period

Non-consolidated
business performance

56th Period
Year ended Dec. 2018
Fiscal year under review

57th Period
Year ending Dec. 2019
Budget58th Period
Year ending Dec. 2020
Expectation

Sales

214,297 million yen

233.0 billion yen

253.0 billion yen

21.2%

21.2%

21.1%

SG&A

31,127 million yen

34.3 billion yen

37.0 billion yen

Operating income

14,364 million yen

15.0 billion yen

16.5 billion yen

Ordinary income

14,642 million yen

15,250 million yen

16,750 million yen

Net income

9,722 million yen

10.3 billion yen

11.3 billion yen

147.44 yen

156.19 yen

171.35 yen

Gross profit margin(+14.8%)(+0.6%)(+0.4%)(-4.4%)Net income per share(-6.84 yen)(+8.7%)(+10.2%)(+4.4%)(+4.2%)(+5.9%)(+8.75 yen)(+8.6%)(+7.9%)(+10.0%)(+9.8%)(+9.7%)

P10

P31(+15.16 yen)

*Figures in brackets indicate year-on-year change.

Following the transition to consolidated results starting the fiscal year ending December 2019, we will disclose performance including the performanceof subsidiaries on other routes. The full-year consolidated performance forecasts are sales of 233,294 million yen, ordinary income of 15,179 million yen,
net income of 10,254 million yen, net income per share of 155.49 yen, and annual dividends of 39 yen.

Reference Data(+9.8%)

P2

Business ReportCompanies’ production activities are expected to remain stable in general due to the expected high level of companies’ capital investment on the backof continued labor-saving efforts owing to labor shortages as well as IoT, and to expectations toward demand for restoration from natural disasters. The
Company will establish a system that can meet the various needs of the market by aggressively carrying out capital investment toward the expansion ofsales.
With regard to the non-consolidated business performance of the next fiscal year, we forecast sales of 233.0 billion yen, operating income of 15.0
billion yen, ordinary income of 15.25 billion yen, and net income of 10.3 billion yen. The Company’ s sales budget is based on declarations from branchmanagers.

Reference Materials for
Shareholders’ Meeting■ Forecast for the 57th period (year ending December 2019) and subsequent years

Convocation Notice■ Issues Facing the Company■ Strategies for sustainable development
Product Strategy

We will improve our product supply ability by further expanding our industry’s largest product lineup(approx. 370,000 items), and increasing overseas brand products.

Logistics Strategy

Under the belief that the one who controls logistics controls the sales channels, we will enhance ourlogistics facilities toward our plan to hold half a million inventory items by 2023 to further accelerate delivery.

Sales Strategy

In addition to expanding the number of items handled and the number of inventory items, we will makeefforts mainly in the use of Trusco Orange Book, our paper catalog, and Trusco Orange Book.Com, ourdigital catalog, to increase customers’ business opportunities.
Product selection

Distribution optimization

Product adoption/
development

Personnel, labor

IT Strategy

We will continue to make aggressive investments to reinforce our IT capability, such as the introductionof AI, in order to establish ourselves as the company that offers the greatest convenience in the industry.

Human Resources Strategy

We will carry out thorough job rotation so that employees can adapt to any kind of job, and improve thequality of individual work as well as creating an environment where employees can work for many years.

15

Initiatives in the 57th Period

Procedures of the
Shareholders’ Meeting

Voting Right Exercise Methods Page 8–

Business Report Page 10–■ Takashi Nakai Senior Managing Director & Assistant to President
Convocation NoticeThis year’s keyword: Katsuyo (utilization)
The future is not promised
by investments alone, butwill open up only wheninvestments are utilized. I
intend to create the futurewith all of my wisdom
without being content witha privileged environment.

[Initiatives in the 57th period]

Establish a foundation
for the future!

Business Report

P2

Reference Materials for
Shareholders’ Meeting

P10

Reference Data

P31

1 Become a stronger company under a new organization

Tadahisa Yabuno
Managing Director
Head of Sales Division

We have been continuing aggressive capital investment in distribution, inventory andinformation systems ahead of a new stage.
In order to clarify the responsibilities toward investments, we have promoted the Information
Systems Department to a Division, and have reformed the organization to a five-divisionsystem starting January 2019.
We will make aggressive efforts to tackle medium- to long-term issues based on thisorganization.

 Promoted the Information Systems Dept. to a Division -> A five-divisionsystem Maintained the speed of management by directly linking the five division
heads and the president.
 All division heads are directors* = Grow by working hard together
Resolute determination (one year in service)(56 yrs old)

Shinsaku Miyata

Executive Officer
Head of Product Division(54 yrs old)

Tetsuya Nakayama
President(60 yrs old)

Kazuo Nakai

Executive Officer
Head of Corporate Management
Division(49 yrs old)

Atsushi Kazumi

Takashi Nakai

Senior Managing Director
Assistant to President(64 yrs old)

*Assuming election of the five heads at the Meeting.

Executive Officer
Head of Information Systems
Division(48 yrs old)

Hideki Naoyoshi

Executive Officer
Head of Distribution Division(47 yrs old)

2 Utilize “checks” toward new challenges
 It is indispensable to check the outlook and effects of investments.
 Utilize checks and raise awareness toward linking investments with the nextchallenge.

Ｐ(Plan)

D(Do)

C(Check)Distribution equipment introduced at Planet Saitama (launched Oct. 2018)

A(Action)Bucket automated warehouse

Ｐ(Plan)

D(Do)

C(Check)C(Challenge)

3 As Assistant to President
 Responsibility as a director = Efforts to strengthen the Company’s functions
 Alleviate the work of the busy president

Trusco Tokyo Head Office visit (May)16

SAS (Systema Streamer)
High-speed binding device

 Strengthen relations with clients
 Carry out enlightenment activities to revitalize human resources

Second quarter results presentation (August)Initiatives in the 57th Period Page 15–

Outside Officer’s Report Page 22–

Proposal Details Page 31–

Q&A Page 42–

Put colleagues first. Be brave
to choose the path thatshould be taken. Make
judgments based on faith andnot on self-protection. Liveeach day to the fullest andwithout regrets. I hope Trusco
will be such a company. I
hope to be such a person.

[Initiatives in the 57th period]

Expand the market by
All Trusco

By using our functions, sales agents will be able to deliver products quickly, leading to increased sales. I believe this will also lead to the improvement of users’convenience and the expansion of the market.

1 Strengthen our structure to be able to respond to any area, either physical or online■ Sales comparison by industry

2014

2018

2018

Reference Materials for
Shareholders’ Meeting

P10

710

2014

281
215

270
211

243

235

188

All industries have seen growth.

117

78

Machinery
tool dealers■ Index of sales with sales in 2014 as 100
Fiscal period

Sales amount (100 million yen)897

Hardware,Conduction machine, Welding material
tubing material, packaging material,
dealers
electronic material chemical dealers, etc.
dealers, etc.

40

Mail ordercompanies

135

72
4

MRO supplies

Home centers

10

Sales of the core factory route account for 80% of total sales.
2018 sales yoy change Share(%)(%)(100 mn. yen)

2014

2015

2016

2017

2018

Factory

100

105

109

118

127

1,691

+7.4

For mail order companies

100

135

176

233

301

235

+29.0

MRO supplies

100

106

128

154

181

72

+17.5

Home centers

100

97

102

105

114

135

+8.6

6.3

All companies (excl. overseas)

100

106

113

124

137

2,133

+9.9

100.0

Route

e-business

P31

Overseas

Reference Data

We w i l l r e s p o n d t o a w i d e r a n g e o f M R O(sub-material) needs of retailers, from physicalbusinesses such as manufacturing lines andconstruction sites that require products “now,” toonline and overseas businesses that require products
by “tomorrow.”

P2

Business Report

This year’s keyword: Shinnen (belief)

Convocation Notice■ Tadahisa Yabuno Managing Director & Head of Sales Division

79.3
14.4

Sales of the growing e-business route tripled over the last five years.

2 Expand the market of customers by offering a one-stop service.
(1) Measures to increase sales of product categories with room for growthi. Enhance product inventoryii. Conduct promotional activities through Trusco Orange Book.Com
iii. Encourage employees’ acquisition of product knowledge

Sales amount (100 million yen)
■ Excerpt of sales by360
product category (56th period)

337

No. of qualified employees

2017

2018

Total

Class 1 certified specialist of pneumatic device assembly

0

9

9

Class 2 certified specialist of pneumatic device assembly

15

146

161

Aim to increase salesof product categories
with room for growth

265

179

(2) Strengthen links with systems
i. Improve the rate of system order intake
 Target: 90% from 81.7% as of December 31, 2018

79

95

ii. Encourage the use of Trusco Orange Book.Com subscriber service
 The work of sales agents will be reduced if users request quotes, request orders, andinquire on inventory through Trusco Orange Book.Com.

Cutting tools

Research
Production Distribution Environment
management processing
&
&
goods
goods
storage goods safety goods

Hand tools

17Initiatives in the 57th Period

Procedures of the
Shareholders’ Meeting

Voting Right Exercise Methods Page 8–

Business Report Page 10–■ Shinsaku Miyata Executive Officer & Head of Product Division
Convocation NoticeThis year’s keyword: Kibin (agile)

Aim for earnings expansion
and social contribution
through product line-up

Reference Materials for
Shareholders’ Meeting

2020

2021

2022

2023

2024

No. of inventory items listed

365,000

390,000

410,000

440,000

480,000

520,000

No. of PB inventory
items (yoy)47,60049,60057,600(+5,600)(+2,000)(+8,000)

68,600(+11,000)

79,600(+11,000)

17.4
●

2019

12.7

14.0

16.5
●

Year of Orange Book listing

13.0

PB
●

Reference Data

(1) Reconstruct the basic balance between national brand (NB) products and private brand (PB)
products (five-year plan).
(2) Make detailed enhancements in the product groups that support the improvement of profitability.
(3) Offer volume services, such as small portions, by the internal processing of distribution.

15.5

NB

●

■ Percentage of no. of inventory items of NB and PB products●

P31

1 Accelerate the development of private brand (PB) products●

Business Report

P2

P10

Carefully look for opportunities,
make the optimal judgment, andtake action immediately. I hope
to be “agile” in responding tochanges in the environment
surrounding the Company, theminds of customers andsuppliers, and the mentality ofcolleagues.

[Initiatives in the 57th period]

40,000 PB product

Percentage of no.
of inventory itemsof PB products

520,000
items

items launched

90,600(+11,000)2019 2020 2021 2022 2023 2024

(Year of Orange Book listing)

2 Full-scale use of Trusco Universal Design (TUD)(1) Promote the development of functional assistance devices as measures against the aging of
manufacturing workers.
(2) Propose new values of “universal” in the concept of monozukuri.
(3) Create an environment of social contribution through joint
development with more than 2,400 suppliers.

Assisting suit

Wearable chair*Images

3 Create an environment for the introduction of a new industry platform(1) Propose a new mechanism that links suppliers and Trusco, and Trusco and customers, applying block chain technologies, etc.
(2) Automate the conventional work process, establish a research group for improving the efficiency of the overall industry, and play a leading role.
Inquiries on quotes

A new digital operation that improves
work efficiency even under labor shortage

Users

Sales
agentsUsers
Stage 1: Sales agents, suppliers, Trusco

Inquiries
on quotes

Sales
agentsStage 2: Connect with users

Suppliers

Apply block chains(Distributed ledger technology)

Large amount of workin each transaction

Suppliers

4 Full-scale offering of product search using AI
Product search and guidance chat functions will be available on smartphones (scheduled in June 2019).
What are you looking for today?
I’ m looking for a helmet for women.

Available on smartphones!
(Scheduled June 2019)

There are 41 hits.
What kind of site is it intended for?
An outdoor construction work site.
*Image of a chat18

Initiatives in the 57th Period Page 15–

Outside Officer’s Report Page 22–

Proposal Details Page 31–

Q&A Page 42–

Improve corporate value
and aim to become a more
attractive company

1 Initiatives in personnel strategies toward continuous corporate growth(1) I will strive to acquire personnel with creative ideas for
future growth.

■ Trusco Nakayama’ s unique personnel system (excerpts)(2) I will carry out unique personnel education by making
the most of trainings in which senior employees serve
as instructors.

Employees posted away from their families are allowed to come to work from their family’s home on Monday
morning. This is a happy program that allows them to spend Sunday night with their family.

(4) I will continue to enhance the personnel system underwhich employees can work with peace of mind, andcreate a system that will also lead to workstyle reforms.

Lovebird Transfer Program (since 2005)

Job relocations have basically been accompanied by family members since 15 years ago. If a spouse’s job isrelocated, whether internally or externally, employees are allowed to apply for a job transfer to their preferred area.

Welcome Back Program (since 2014)

Those who have resigned due to child/elder care or fertility treatment but wish to work at Trusco in the future canbe re-employed within up to 10 years by registering.

Trusco New Staff Support Program (since 2016)

In order to assist with personal preparation costs for starting a career, Trusco provides 200,000 yen to those who
require a house move and 100,000 yen to those commuting from home, one month before they start work.

▶

Details of the programs are described on page 26.

2 Measures for corporate PR and improving recognition

P10

P31

(1) We will make the most of the TV program Shirarezaru Gulliver and TV commercials in our PR and hiring activities.
We will also utilize them to expand our areas of business with our clients and build a strong relationship with them.
(2) We will increase opportunities for connecting with shareholders and clients through site visit tours and seminars, and continue to carry out open andstraightforward IR activities.
(3) We will make use of the Porter Prize, which we were awarded for our unique management strategies, in our PR and hiring activities.

A program that expresses our commitment to give confidence and energy to Japan

Reference Data

(3) I will allocate the right employees in the right jobs so as
to accelerate growth.

Happy Sunday Program (since 2002)

P2

Business Report

This year marks our 60th
anniversary and the startof our new five-divisionorganizational structure.
This year I will strive to act
toward achieving targets
by understanding whatmust be done in eachposition and forming astrong enjin (huddle) witheveryone.

[Initiatives in the 57th period]

Reference Materials for
Shareholders’ Meeting

This year’s keyword: Enjin (huddle)

Convocation Notice■ Kazuo Nakai Executive Officer & Head of Corporate Management Division

A prize awarded to Japanesecompanies that have succeededin competition with uniquestrategies
Host: Hitotsubashi ICS

Dec. 6 Porter Prize awarding
ceremony
Professor Kazuo Ichijo, Hitotsubashi
ICS (right)

3 We will create new history from our 60th anniversary toward our 100th anniversary.
(1) We will imagine the future
and act based on theassumption that there isno future that is anextension of the past.

■ Capital investment (100 million yen)

200

Systems and others

171

Buildings and facilities

144

33

Systemsand others
Buildings
and facilities

3529(2) We will respond to
globalization and equip ourselves with thestrength to take on challenges and the ability tosolve problems even in situations where change
is severe.

61
8.4(3) We will continue to make capital investment ininfrastructure necessary for continuous growthand lead it to earnings improvement.

FY endedMar. 2014

52

35
6
29

45
9.8
35

FY ended
FY 2015
Dec. 2014(nine-month results)

81
17

114

136

166

64
FY2016FY2017FY2018FY2019FY under review Forecast

19Initiatives in the 57th Period

Procedures of the
Shareholders’ Meeting

Voting Right Exercise Methods Page 8–

Business Report Page 10–■ Atsushi Kazumi Executive Officer & Head of Information Systems Division
Convocation NoticeThis year’s keyword: Mirai shiko (future-oriented)[Initiatives in the 57th period]

These are times whenmost of the things we
imagine can be realized. I
hope to sketch many
exciting ideas and makethis a vibrant year.

Aim for the highest
convenience in the industry
in systems

P2

Business Report

1 Strengthen system coordination functions to improve customers’ convenience

Reference Materials for
Shareholders’ Meeting

P10■ Initiatives of the Information Systems Division (concept chart) Establish a more convenient “Trusco Consent”
We will reinforce varied system coordination and connection,such as EDI (electronic data interchange) and the web, that meetthe needs of customers.
 Promote the use of more diverse “Trusco Information (Data)”
We will propose a scheme that allows our customers moreadvanced use of information assets, such as product data andinventory data, that we possess.

External systems/
external data

2 Sophisticated system development

3 Support business with stable system

We will seek to improve the quality of work by utilizing AI (artificial
intelligence) and RPA (robotic process automation) and establish ourown IT service.

With the percentage of automated order intake by the system rising eachyear, systems are supporting business.

using the latest technology

Users

Reinforcement of
coordination &connection

Business
partners

Suppliers

Reinforcement of
coordination &connection

Competitive advantage
and sophisticationof system

Distribution
centers

Data utilization

Corporate

Safe and secure operation
Personnel development (understanding of operations / IT skills)

External systems/
external data

operation■ Percentage of order intake by the system and the number of
inventory items

55.9
12.4 14.1

16.5

23.1
19.2 21.3

26.5

29.9

33.7

82

●●

●

67.4

●

63.1

●

●

71.9 72.7

81.7
●

82

●

82

●

79.9
●

●

No. of inventory items (10,000 items)
System order intake rate (%)
77.9●

 AI quote system
50,000 quotes everyday -> An automated quote system using
AI Digital MRO stocker
Stocked tools, a system that enables users to use ourinventory any time Real-time delivery status app
A smart app that notifies in real time when the product will bedelivered

Sales agents●

Reference Data

P31

We will establish a system that aims to optimize the entire supply chain
including our customers as a backyard of business.

System orderintake rate (%)

37.4 38.4
No. of inventory
items(10,000 items)

FY2010 FY2011 FY2012 FY2013 FY ended FY ended FY2015 FY2016 FY2017 FY2018 FY2019
Forecast
Mar. 2014 Dec. 2014
FY
(9-month results)
under review

Trusco’s major systems“paradise,” which supports order intake
and accounting
An order and accounting system that supports a daily intake of
150,000 orders“TRULOGIS,” which manages warehouse
operations
A distribution system that supports 160,000 daily receipts, shipping
and warehouse operations“Trusco Orange Book.Com,” enabling online
order intake
An EC site with 480,000 monthly users, handling 1.66 million items

Data center Solmare

We have set up a room in the Tokyo Head Office dedicated to systems toprepare for earthquakes and blackouts, and operate them internally.

20“Sterra,” integrated management of all
product data
A database that manages the data of 1.86 million products

Initiatives in the 57th Period Page 15–

Outside Officer’s Report Page 22–

Proposal Details Page 31–

Q&A Page 42–

This year’s keyword: Shinjitsu Banro (seeking the truth)[Initiatives in the 57th period]

There is nothing more convenient thanbeing able to provide all of the vasttypes of pro tools that the market
requires. We cannot stop distribution, alifeline, under any circumstances. This
year I hope to pursue the “truth” bytrying out all possible means.

Strengthen distributionfunctions by trying all
possible means

2 Strengthen functions of delivering

We will strive for immediate delivery and to improve customers’
convenience by carrying as varied pro tools listed on Trusco Orange Book
as possible as inventory at each distribution center.

We will shorten the lead time of delivering products to end users as muchas possible.

directly to users<Flow of goods>■ No. of inventory items and sales

Trusco Nakayama

Continue strengthening product line-up
●

●

●

2,142

●●

●●

●●

89.9

Delivery
Customer

P10

User

Sales
(100 million yen)

520,000
items
●●

●

●

●

●

●

●

1,458
992

●

Nine-monthresults●

3,000

DeliveryDirect delivery to user

(Background)- Pursuit of reduction of delivery costs and further reduction of delivery time
- A chronic shortage of labor

Inventory
hit rate (%)

Reference Materials for
Shareholders’ Meeting<Measures> Strengthen distribution centers’ ability to carry inventory
 Establish a distribution center specializing in stocking functions

Business ReportP2

1 Inventory enhancement and the improvementof inventory hit rates are the growth engine.

Convocation Notice■ Hideki Naoyoshi Executive Officer & Head of Distribution Division

P31

●●

●●

●●

Aiming to solve this issue is also our important mission.

●●

●●

78.7

A major distribution issue at monozukuri sites

No. ofinventory items(10,000 items)

26.5<Measures>
 Install automated packaging lines at major distribution centers
nationwide
 Respond to customers’ varied transportation needs, such asdelivery and direct shipment

19.2
14.1
11.7

Reference Data

●●
●●

37.4

83.1

Complete automation of packaging
Automatic packaging machine
I-Pack®
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Processing capacity: 720 items/hour(at one line)(Approx. 24 times the productivity ofmanual packaging)End-2023*Inventory hit rate: Of all orders received, the percentage of immediate delivery shippedfrom inventory

3 Preparations in view of distribution in the near future
We will seek to continuously strengthen the distribution system and the operational level.

(forecast) Strengthen shipping abilities
 Make the most of automation technologies
 Develop logistics employees (job specializing in distribution)●●

Sales 214.2 billion yen
374,000 inventory items●

19.4 million

37 million <Measures>

25.4 million●

Sales 166.5 billion yen
265,000 inventory items

Sales 300 billion yen
520,000 inventory items●■ Total number of shipments
per year

2015

2016

2017

2018
FY under review

2023
Forecast

Auto Store

Picking robot

21

Outside Officer’s Report

Convocation Notice

Reference Trusco Nakayama as seen from outside directors

Business Report

P2

Reference Materials for
Shareholders’ Meeting

P10

Reference Data

P31

Q How do you view Trusco’s governance system?
A I think Trusco is making its utmost efforts to be a responsible company. There
areregular opportunities for dialogue with major clients. In addition, the company
carries out thorough information disclosure to its shareholders through convocation
notices and its website, and encourages facility visits. The company’s issues are
discussed at the monthly Management Committee by all directors and department
heads. The disclosure of the minutes of the meetings to all employees is proof oftransparency. Most of all, the company’s workplace is always filled with laughter,
which I think signifies fairness.
Q What are the issues of the 57th period?
A One of the important issues is measures to improve productivity and the optimal
allocation of personnel in accordance with their achievements. Investments are
made in distribution systems and IT for continuous growth, and personnel are hired
accordingly. The improvement of the awareness of each individual and a review ofthe work process are constantly required, and personnel allocation with wide mobility
aiming to maximize the productivity of the entire company will become important.

Kenichi Saito
Outside Director■ Career summary
April 1975:
Joined McKinsey & Company
January 1996: Founded ForeSight & Company
President (present)
March 2016: Outside Director of the Company (present)
October 2017: Founded the Society for Problem Solving Proficiency
Representative Director of the Society (present)■ ‌Attendance at Board of
Directors’ meetings
100% (11/11 meetings)

Q How do you view our Management Committee?
A At the beginning of each monthly Management Committee, President Nakayama
states his opinions on business issues and current affairs of the past month. Hiscomments are truly virtuous and are mostly in accordance with the company’s
management philosophy. Through the meeting, they have a significant positive effecton the code of conduct of directors, executive officers, and other members of senior
management. Furthermore, the participants discuss investment projects, strategies
and tactics between themselves in a straightforward manner, with a common senseof mission of whether such investments, etc. would be useful to customers.
Q Please tell us your overall evaluation of the 56th period.
A The 56th period was a year of strategic investment to achieve further growth of thecompany. In particular, Planet Saitama, which started operation in October 2018,
was a large investment that will go down in the history of the company. Although thisstrategic investment has led to some decrease in profit, I believe that the increasein sales from the previous year amid a somewhat unfavorable business environment
surrounding the manufacturing industry of customers was due to the underlying
strength that is required of a specialized trading company.

Kuniaki Hagihara
Outside Director■ Career summary
March 1976:
Joined Hagihara Industries Inc.
December 1984: President of Hagihara Industries Inc.
January 2010: President & CEO
January 2016: Chairman (present)
March 2016:
Outside Director of the Company (present)
June 2018:
President of Toyo Heisei Polymer Co., Ltd. (present)■ The 56th Period
Management 		
Committee
Yo u c a n watc h avideo of the activitiesof the outside
directors from this
code.

22

■ ‌Attendance at Board of
Directors’ meetings
99% (10/11 meetings)

Map of business locations

As of January 1, 2019

Reference Map of sales & distribution locations

Number of locations

98

Distribution centers

17

Stock centers

5

Head offices

2

Establish a distribution
immediate delivery
74

Branches

No. of inventory items

370,000

Distribution center
Stock center (storage of bulk purchase inventory, etc.)

Total inventory value

Head office37.0 billion yen

BranchKinki block
Chugoku/Shikoku/Kyushu block

Trusco Nakayama Thailand
Since its founding in 2010, this subsidiary has continued to expand its sales to Japanesedealers and to major local dealers. It is making efforts to spread the Thai and English
versions of Trusco Orange Book Junior and increase its number of inventory items with theaim of becoming a company that is indispensable to Thailand’s monozukuri.

■ Company overview●

 Trade name: TRUSCO NAKAYAMA CORPORATION (THAILAND) LIMITED.
 President: Noboru Yasui Executive in charge at Trusco Nakayama Corporation:
200■ Sales & inventory items of Trusco Nakayama Thailand (million baht (million yen))
194
Tadahisa Yabuno(684)* Sales for each period in Japanese yen have been converted using the average exchange rate.
(665)(The exchange rate in the 8th period was 1 baht = 3.31 yen; in the 9th and 10th (forecast) periods
 Auditor: Kiyonori Unto
Sales
Million baht
it was 1 baht = 3.42 yen.) Capital: 390 mn. baht (approx. 1.3 bn. yen)(million yen)134
128
 No. of employees: 21
Sales
(443)
(394)
No. of60,785(incl. 3 from Trusco Nakayama Corporation)
106
No. of inventory items
inventory
96
51,523
 Established: September 2010
(359)
items
84
70,000(308)74
 Site area: 3,310 tsubo (1 tsubo = 3.3 sqm)
(298)
items
(201)
 Floor area: 1,431 tsubo
28,48937
 No. of inventory items: 60,785
0.8
16,177(97)(2)
 Inventory value: 490 million yen
9,768
4,736
4,968
 Capital investment amount:
3,472
3,195
Land 230 mn. yen / building 200 mn. yen, etc.
●

●

●

●

●

●

●

●

2nd Period(2012)

3rd Period(2013)

4th Period(2014)●●

1st Period(2012)(Two-month results)

5th Period(2015)

6th Period(2015)(Nine-month results)

7th Period(2016)

8th Period(2017)

9th Period(2018)FY under review

10th Period(2019)
Forecast

OPEN

23

network forof pro tools nationwide

Shinshu/Hokuriku/
Tokai block

Hokkaido/Tohoku/
North Kanto block

Overseas subsidiaries
THAILANDINDONESIATokyo metropolitan area block

Scheduled for launch in March 2019

Trusco Nakayama Indonesia
As time and effort are required for importing into Indonesia, our inventory, distribution
infrastructure and accurate deliveries offer significant advantages to Japanese companies
doing business in the country. We will continue to contribute to monozukuri in Indonesia,
which is set to accelerate on the back of domestic demand from 250 million people.

■ Company overview

40,759(317)●●

 Trade name: PT.TRUSCO NAKAYAMA INDONESIA
 President: Mitsugu Okumura
 Executive in charge at Trusco Nakayama Corporation:
Tadahisa Yabuno■ Sales & inventory items of Trusco Nakayama Indonesia (million rupiah (million yen))* Sales for each period in Japanese yen have been converted using the average exchange rate.
 Auditor: Kiyonori Unto
 Capital and capital surplus: 378.8 bn. rupiah (approx. 3.2 bn. yen) (The exchange rate in the 4th period was 1 rupiah = 0.0084 yen; in the 5th and33,199
 No. of employees: 17 (incl. 3 from Trusco Nakayama Corporation) 6th (forecast) periods it was 1 rupiah = 0.0078 yen.)(258)
 Established: January 2015
26,470Sales Site area: 4,894 tsubo (1 tsubo = 3.3 sqm)(222)
No. of inventory items
20,476
 Floor area: 3,155 tsubo(167)
 No. of inventory items: 55,418
 Inventory value: 330 million yen
55,41849,520 Planned capital investment amount: Land 1.0 bn. yen* / buildings
2,365
0.75 bn. yen, etc.
(18)
*Land has already been purchased.
28,2400●●

5th Period(2018)FY under review

6th Period(2019)
Forecast●

70,000
items

OPEN

24

1st Period(2014)

2nd Period(2015)

3rd Period(2016)

4th Period(2017)

Sales
Million rupiah(million yen)
No. ofinventory
items

ESG Activity Report

Environment (Activities concerning the environment)■ Services that customers use lead to the alleviation of environmental load

P2

CompanyB

A vast product line-up

Inventory(1.86 million items)

CompanyA(370,000 items)

CompanyC
Procurementfrom multiple
suppliers◆ A distribution service that delivers the necessary goods immediately

Route delivery byown delivery trucks

P10
Waste (packaging materials)

No packaging
material waste◆ An information service that enables users to find goods immediately

Catalog media

Uses AI (artificial intelligence)

Reduces work of
placing multiple orders

Image
searchVoicesearchRoute delivery does not
require packaging
materials.
Reduces consumption ofenergy and resource

P31

The reduction of thetrouble of searching
reduces workload andimproves production
efficiency.

■ The labor-saving leads to the alleviation of environmental load.

■ Environmental facilities lead to the alleviation of environmental load.

■ Introduction of labor-saving facilities
Auto Store■ Introduction of environmental facilities
Solar power generation equipment

Alleviates environmental load
by automation and labor-saving
in work that had been done byhuman workers●Storage efficiency
improvement: 3.5 times●Work efficiency improvement:
4 times

High-density storage system

The roof of Planet Saitama

LED rack lighting with human presence sensor

Cooling mist

LED rack lighting that responds individually witha sensor

Due to the presence sensor
integrated with each lighting
device, the system significantly
contributes to labor-saving,since lights only go on when aperson enters.

The side surface of the Tokyo Head Office Building

Reference Materials for
Shareholders’ Meeting

one bulk.

Reference Data

◆ A one-stop service, which provides all of the necessary goods in

Business Report

Our mission is to become a company that can address the needs of customers precisely by handling and stocking pro tools required atmonozukuri sites in as much variety as possible. If we can respond to demand for the required goods when they are needed in the required
amount, we will be able to reduce the energy workload, such as the number of order placements, and reduce the consumption of resources. In
other words, the expansion of services that customers use will lead to an alleviation of environmental load.

Convocation Notice

Reference

Our own power generationequipment is installed on theroofs and walls of distribution
centers, branches, and head
office buildings.
●No. of power generation
facilities: 18●Total power generation
capacity: 2,164 kW

Cool air can be circulated during
the summer by spraying mist
and cooling the outside air,combined with the use of
automatic ventilation equipment.

25

Convocation Notice

Reference

Business Report

P2

Reference Materials for
Shareholders’ Meeting

P10

Reference Data

P31

Social (Creating an employee-friendly environment)

Based on the idea that companies have a responsibility to provide an environment where employees can work with peace of mind and a senseof happiness, Trusco Nakayama employs all of its employees as regular employees. We will continue to enhance our unique programs to provide
an employee-friendly environment.

■ Introduction of programs

Workstyles

Childcare

Relaxed Work Hour Reduction Program (since 1996)

Welcome Back Program (since 2014)* The program has been used by 90 employees.

* The program has been used by 18 employees, of whom one
returned to work.

Allows work hours to be reduced to up to three hours per
day for employees during childcare (until the child is in
the sixth grade), nursing care of family members (until
such care is no longer required), and pregnancy.

Happy Sunday Program (since 2002)● When employees posted away from their families go towork from their family’s home but will not be on time forthe start of work even if they use the first train in themorning, they will not be treated as being late (priorapproval is required).
● Employees posted away from their families areprovided expenses for travel to their family’s home
twice a month, as well as singles corporate housing andallowances.

Transfer Request Program (since 2005)

Enables employees to apply for a job relocation to theirpreferred location due to marriage or elder care(unavoidable circumstances of the employee or family
member).
* The program has been used by 45 employees.

Lovebird Transfer Program (since 2005)

Allows employees to apply for a job relocation to theirpreferred area when a spouse (husband or wife) is
relocated.
* The program has been used by 22 employees.

Employees who have resigned due to child/elder care or
fertility treatments but wish to work at Trusco again in the
future can be re-employed within up to 10 years byregistering, once they can return to work.

Employment Extension Program (since 2015)

Enables employees who have reached the retirement ageof 65 to continue their employment until they are 70 years
old (the employment of all applicants is continued, inprinciple)* The program has been used by 24 employees.
* When employees who have reached the age of 70 wish tocontinue their employment, they can be employed until they are 75
years old as a part-timer, subject to the satisfaction of certain
criteria.

Work-from-home Program (since 2017)

Enables employees who have come to have difficultycommuting from home due to relocation or integration of
the office to work from home
* The program has been used by five employees.

Childcare Leave Graduation Program (since 2019)

Enables employees on childcare leave to choose their
number of working days and working hours, as well as
whether to work at the office or from home, after theirchildcare leave ends and until the child reaches the ageof three■ Situation of female employees

Our idea of developing female
employees

We adhere to the principle of ability, without
discriminating in employees’ work, allocation
across divisions, and job relocations on thebasis of gender. It is not our policy to appoint
female management intentionally, but webelieve it is the natural course for a company inwhich female executives are appointed as aresult of their achievements.

Enables employees to take leave from work for childcare
until the end of the month when the child reaches the ageof three* The program has been used by 101 employees.

Maternity Bonus Program (since 2005)
The company pays a bonus to employees on special
maternity leave (14 weeks), during which no salary is
paid.

New employees
Trusco New Staff Support Program (since 2016)

In order to help a smooth start of a career, the company
provides prospective employees with personal preparation costs (200,000 yen to those who need to move houseand 100,000 yen to others) one month before entering thecompany.
* The number of persons who have used the programs is the total number ofusers between 2016 and 2018 (as of December 31, 2018).

Total no. of female employees and the percentage offemale employees on a career path

Figures in brackets are the percentagesof female employees on a career path.
465

557

510

(Persons)
Total number offemale employees

404
349Interview of a second-year employee by a female
branch manager

No. of female employees in managerial posts (As of December 31, 2018)
Section heads, branch managers・
・
・
・
・
・
・
・
・
・6
Deputy center managers・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・2
Senior supervisors・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・7

Childcare Leave Program (since 1992)

Acting senior supervisors・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・32
Supervisors・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・74

* No. of female employees (average age: 30.9)・
・
・
・
・
・
・
・
・
・
・
・557 (34.6% of total employees)

123

92

(30.4%)

2014

2015

(26.4%)

150(32.3%)

161

178(31.6%)(32.0％）
Number of female
employees on acareer path

2016

2017

2018
(FY under review)■ Toward the establishment of Trusco Nakayama Health
Insurance Association (Scheduled for establishment in April 2019)“Aim to become a company where employees can work with peace of mind for many years.”
The health of employees is essential in order to achieve this end. Subject to administrative
approval, we plan to establish our own health insurance association in order to aggressively andflexibly carry out health management. For the final
procedures of establishment, we created the Trusco
Nakayama Health Insurance Association
中山 太郎
Establishment Preparation Office in January 2019.
ナカヤマ

タロウ

Health insurance card (sample)

26

President Nakayama and the establishing members, with the health insurance cardin handESG Activity ReportSocial (Social contribution) Public interest incorporated foundation: Nakayama Visually Impaired Welfare Foundation

20th anniversary commemorative ceremony■ Overview

 Established:

October 1, 1997
Became a public interest incorporated foundation in November 1, 2010
 Competent authority: Hyogo Prefecture Address:
Nakayama Memorial Hall 3-26, 5-chome, Kamiwaka-dori, Chuo-ku, Kobe, Hyogo 651-0067
 Working capital:
Securities: 4 million Trusco Nakayama Corporation shares (basic property)
Deposits: 500 million yen of public interest management activity capital (specific property)

The Foundation was established with the Nakayama family, including the chairman, contributing 4 million Trusco
Nakayama Corporation shares and 500 million in cash. The Foundation does not receive donations or sponsorships
from outside and operates its projects with dividends from the shares. Over 21 years, from its foundation to 2017, theFoundation has carried out a total of 697.46 million worth of projects, such as grants.

P10

FY2018
Guide dog, Nakayama-go
Chloe■ Director/Councilors Roster (As of January 1, 2019) In Japanese alphabetical order
Post

Name

Chairman

Tetsuya Nakayama

Trusco Nakayama Corporation, President

Senior Managing Director

Saori Nakayama

NR Holdings Co., Ltd., Representative Director, Certified Public Accountant

Managing Director

Atsushi Matsumae

Executive Director

Director

AuditorCouncilor

Professional affiliation

Takuji Iuchi

AS ONE Corporation, President

Tatsuya Otsuka

Earth Corporation, Chairman

Teruo Hashimoto

Nippon Lighthouse Welfare Center for the Blind, Chairman

Kenji Furuhashi

Hosiden Corporation, President & CEO

Masahiko Mori

DMG MORI Co., Ltd., President

Naoyuki Yamamoto

Yamamoto Kogaku Co., Ltd., COO & Chairman

Makoto Yukawa

Full-time Director

Kohei Nomura

Nomura & Partners, Attorney

Yoritomo Wada

Deloitte Touche Tohmatsu LLC, Partner, Certified Public Accountant

Yusuke Saraya

Saraya Co., Ltd., President & Representative Director

Shoichi Suganumata

Trusco Nakayama Corporation, Osaka Administration Section

Tomihiro Takamatsu

DyDo Group Holdings, Inc., Chairman & Director

Yuko Nakayama

NS Holdings Co., Ltd., Representative Director

Rie Nakayama

National Hospital Organization Tochigi Medical Center, Otolaryngologist

Motonobu Nishimura
Junji Hada
Kunio Yamada

Business Report

P2

Reference Materials for
Shareholders’ Meeting

Nakayama Visually Impaired Welfare Foundation was established in 1997 in response to the will of“wanting to serve visually impaired people” by Seiko, the mother of Tetsuya Nakayama (chairman of
the foundation), who was born with damaged optic nerves due to a forceps delivery. In 2010, theFoundation became a public interest incorporated foundation, and received the Hyogo Prefectural
Social Award in November 2011 as well as the Minister of Health, Labour and Welfare’s Award in
December 2013.
It celebrated its 20th anniversary in 2017 and received the Kobe Citizen Welfare Incentive Award in
September of the same year.

Convocation Notice

20 diligent years and more to come

P31

Reference Data

Reference

Mandom Corporation, President, Executive Officer & Director
ELECOM Co., Ltd., President
Rohto Pharmaceutical Co., Ltd., Chairman & CEO

Yoshiaki Yamamoto

Kobe Senior Manpower Center, Director of Western Center

Teiji Wakita

Wakita & Co., Ltd., President & Representative Director

27

Convocation Notice

At Nakayama Memorial Hall, which was opened in 2007, six non-profit organizations work in
conjunction with each other to offer overall support in response to consultations requested from many
and unspecified persons with visual impairment. The number of consultation projects at Nakayama
Memorial Hall amounts to approximately 2,400 per year.

Business Report

P2■ Public interest project 1
Nakayama Memorial Hall facilities lending business

New Nakayama Memorial HallWith the aim of creating an even more useful facility, we are planning to build a facility thatis 13-times larger than the current Nakayama Memorial Hall. We hope to make it a symbolic
building where persons with visual impairment, groups of concerned parties, and support
groups in the prefecture can gather without restraint.

Reference Materials for
Shareholders’ Meeting

P10

Reference Data

P31

Nakayama Memorial Hall (Chuo-ku, Kobe) Address:

New Nakayama Memorial Hall scheduled for completionin March 2021

2-1-3 Mizuki-dori, Hyogo-ku, Kobe, Hyogo(Three minutes on foot from Shin-kaichi station of the Kobe
Rapid Line) Site area:
424 tsubo Floor area:
2,753 tsubo
 Building size:
1 floor underground, 8 floors above ground Total construction cost: 4 billion yen■ Public interest project 2
Grant project for support groups of visually impaired persons and individual visually impaired persons
The Foundation provides grants to groups for visually impaired persons and support groups in financial difficulty, and provides scholarships
free of charge to university students and others.

■ Public interest project 3
Support for social participation activities of visually impaired persons
The Foundation supports social participation activities for visually impaired persons with the aim ofestablishing the concept of normalization, which aims to create a society in which persons with disabilities
can spend every day just like persons without disabilities, and can lead vigorous lives.
<Main projects> 1. Hyogo Prefecture Visually Impaired People Music Festival Project “Nakayama/KLC concert”*Concert organized by the Nakayama Visually Impaired Welfare Foundation in cooperation with the Kobe Light Center (KLC)

2. Guide dog lending business (lent a total of 38 dogs)
3. Personal computer course project
4. Music performance project “Nakayama Wonderful Festa”
5. Accompanying aid workers (guide helpers) training project
6. Barrier-free movie screening project “Nakayama UD Film Festival”*A film festival hosted by the Nakayama Visually Impaired Welfare Foundation. (UD: universal design)

Pianist Ms. Hiroko Shimizu at the
Nakayama/KLC Concert 2018

Nakayama Wonderful Festa vol. 21
The Festa, a concert that accommodates
participants with guide dogs or in wheelchairs toallow persons with visual impairment to enjoy it
without hesitation, has been held once a year since1998. In 2018, 1,910 people, including persons withvisual impairment and guide volunteers, attended
the festival.
Ms. Aki Yashiro’ s concert at
Nakayama Wonderful Festa vol. 21

28

Guide dog presentation ceremony

ESG Activity Report

Existence philosophy
Based on our mission to contribute tosociety through corporate activities, wewill realize the happiness of those
involved.

Idea

P2

Existencephilosophy
Management philosophy■ Trusco Nakayama’ s corporate philosophy

VisionTrusco Nakayama upholds “existence philosophy” as its ethicalstandard and practices its “management philosophy” as a corporate
vision as well as “action philosophy” as its social behavior based
thereon.

■ Top-Level Parties Conference (Board Meeting)Consisting of executives (excluding outside directors) and division
heads, the Board Meeting ensures objectivity and rational judgment,
and discusses and shares the company’s direction, upon which theBoard of Directors’ meeting (Management Committee) is held.

Behavior

Characteristics of the Management Committee(1) Seats are laid out in a round table style so that everyone can see eachother’s face (refer to the figure below).
(2) Seating is changed every time, with no top or lower seats.
(3) The Management Committee minutes, which not only include mattersthat were resolved but also each individual’s comments, are disclosed toall employees within a week.

Tsuchiya, Marketing & e-Business (MRO)
Takada, Corporate Auditor

Seating ofManagement
Committee
in January 2019

Maeda, Administration
Otani, Kinki Sales
Kawai, Exec. Officer, Catalog Media
Nakai, Senior Managing Dir., President Assistant
Hoshino, HC Sales
Yamamoto, Tokyo Met. Area Distribution

Ezaki, e-Business (Mail Order)
Nakai, Exec. Officer, Head of Corp. Management Div.

Saito, Outside Director
Shimoda, Tokyo Met. Area Sales

Imagawa, Exec. Officer, Corp. Planning & Accounting
Katagiri, Corp. Planning, PR/IR Section Head

Kazumi, Exec. Officer, Head of Info. Systems Div.
Kita, Head of HR Dev. & Secretarial Section &CSR Section
Female staff, Secretarial Section

Male staff, Corp. Planning, PR/IR Section
Female staff, Corp. Planning, PR/IR Section

Action philosophy

All stakeholders, including
employees and their families,
clients, and shareholders

Market- Value sincerity and propriety

Society- Creative ideas and meticulous
planning- Dynamic actions with conviction- Communication based on smiles
and trust■ Boss Conference (Nationwide Managers’ Conference)

This conference brings together Management Committee
members and nationwide managers to discuss management issues.
(The conference was not held during the fiscal year under review forcost reduction, in view of our forecast of an increase in sales and adrop in profit.)

P31

Unto, Overseas
Fukui, West Japan Distribution

Kamakura, Corporate Auditor
Fujimoto, Chugoku/Shikoku/Kyushu Sales

Yoneda, Tokyo ProductMatsuda, Corporate Auditor

P10

Involved persons

Miyata, Exec. Officer, Head of Product Div.
Nakayama, President

Hagihara, Outside Director
Ogasawara, Osaka ProductOkamoto, Exec. Officer, Sales Planning
Domori, Hokkai/Tohoku/North Kanto Sales- Foster entrepreneurship

Actionphilosophy

Decisions are made at the Board of Directors’ meetings that are
generally held once a month. The Management Committee seeks
the opinions of the participants, including executive officers anddepartment heads, in order to ensure a broader perspective andtransparency.

Adachi, Shinshu/Hokuriku/Tokai Sales
Yabuno, Managing Dir., Head of Sales Div.

- Respect people- Address the market with trust■ Board of Directors (Management Committee)

Kimura, Information Systems
Naoyoshi, Exec. Officer, Head of Distribution Div.

Management
philosophy- Make bold and solid steps

Business Report

Our company name and corporate logo are a direct expression of a“trust company,” which is trusted by all stakeholders. We intend to fulfil
our social mission by basing our everyday corporate activities on andembodying the practice of.

Reference Materials for
Shareholders’ Meeting■ Our idea of corporate governance

Convocation Notice

Governance

Reference Data

Reference■ Appointment of outside directors (Board Brain)

TRUSCO currently appoints two outside directors, not only for theprevention of improprieties, but for their broad knowledge andabundant experience concerning company management and fortheir ability to make contributions to sustainable growth and theimprovement of company value.

Management Committee members: 27
Total no. of managers:
123
Rank-and-file employees:
22
Boss Conference (Nationwide Managers’ Conference) held in November 2017

■ Director / Auditor / Executive Officer / Department Head OJS

We have adopted an original system for the evaluation of
executives and department heads. Every year, executives anddepartment heads are evaluated by around 160 managers, with theresults used as criteria for promotion/demotion.

Method of operating the executive evaluation system

1 Individual information of the voters is undisclosed.
2 Each of the six evaluation items is rated on a 4-point scale.
3 Based on the scores of the ballots, promotion to director candidate or
demotion from director or full-time corporate auditor is determined.
4 Evaluation is also performed for outside directors and part-time corporate
auditors as reference data.

In addition to evaluation by points, evaluation through comments
is also conducted, with the results fed back to the evaluation targets
for their reference.

29

Convocation NoticeBusiness Report

P2

Reference Materials for
Shareholders’ Meeting

P10

Reference Data

P31

■ Governance Structure (As of January 1, 2019)
Tours for shareholders

Annual Shareholders’ Meeting
Features of the Shareholders’ Meeting(1) Executives also participate to engage in dialog withshareholders.
(2) Held at head offices and distribution centers(1) President OJS (Open Judging System)(2) Held on an early date, avoiding days on which general meetings areconcentrated(3) Held simultaneously at two main venues of Tokyo and Osaka(4) The results of the resolutions, a portion of the Q&A session, and theresults of questionnaires are released on the website three days later.

Top-Level Parties Conference (Board Meeting)Board of Corporate Auditors

Composition Held once a month

Composition Held once a monthRepresentative director:
1
Executive directors:
2
Full-time corporate auditors*:
2
Part-time corporate auditor*:
1
Executive officers & heads of division: 4
Total:
10

Board of Directors (Management Committee)

Full-time corporate auditors*:
Part-time corporate auditor*:

Audit

2
1

ReportAccounting auditor

Held once a month

Board of Directors

Management Committee

Composition

Composition

Representative director:
1
Executive directors:
2
Outside directors:
2
Full-time corporate auditors*: 2Part-time corporate auditor*: 1
Total:
8

Members of the Boardof Directors:
Executive officers:
Department heads:
Total:

Deloitte Touche
Tohmatsu LLC

ReportReportWhistleblowing desk
8
7
15
30

Legal advisor

Direct contact
from
employees(hotline)

Execution of duties

Compliance Committee
CSR Section
Compliance Officer

ReportDirect contact
from
employees(hotline)

Audit Supervision OfficeTetsuya Nakayama

President

ReportAudits conducted through the“Fire Lookout Tower”
electronic auditing system
Audit / supervision■ Regular personnel transfers across divisions(1) Personnel, including manager positions, are transferred across divisions, generally every five years on average.
(2) Creates a company climate enabling multi-faceted staff training without factionalism(3) Prevents fraud through fresh monitoring
Corporate
Management Division

Information
Systems Division

Product
Division

Distribution
Division

Sales
Division

Kazuo Nakai

Atsushi Kazumi

Shinsaku Miyata

Hideki Naoyoshi

Tadahisa Yabuno

Executive Officer,
Head of Corporate
Management Div.

30

Executive Officer,
Head of Information
Systems Div.

Executive Officer,
Head of Product Div.

*Full-time corporate auditors and the part-time corporate auditor are outside corporate auditors.

Executive Officer,
Head of Distribution Div.

Managing Director,
Head of Sales Div.

Reference Materials for Shareholders’ Meeting
Proposal Details

Convocation Notice

Reference About the Officer Evaluation System
The Company operates an Open Judge System (OJS: 360 degrees evaluation), a unique evaluation system, as one of its standards forthe selection of candidates for executive directors.
At the Company, remarks by staff with executive posts of department head or higher at important meetings, etc. are shared with all
employees through the minutes. The voters evaluate the candidates based on their everyday work and remarks. The results of theevaluation will be used as standards for promoting the candidate to a director candidate or demoting him/her from director or corporate
auditor (full-time).
Conditions for demotion from director candidate
and corporate auditor (full-time)*1
Candidate for
executive
Conditions for promotion to director candidate
Average OJS
directorscore of less than
Result of evaluation by all
Experience as an executive officer for
Executive
officer

16 for two
consecutive years
Average OJSscore of less than
15 for two
consecutive years

Result of evaluation bydirectors, corporate auditors,
executive officers anddepartment heads

Department head

P2

Business Report

voterstwo years or more and an average OJSscore of 18 or more for two consecutive
years

*2

*1. Meeting either one of the conditions will make theofficer a candidate for demotion*2. Approx. 160 staff members with executive posts,
such as branch managers, section heads andcenter managers

P10

1
2
3
4
5
6

Sense of management, foresightHas vision and can talk about the company’s future within and outside the company

Full score: 4 points

Leadership

Has a belief and a will to carry through even against great opposition and leads the organization with enthusiasm

Full score: 4 points

Communication ability

Has the ability to listen to the voices of employees and convey them in an understandable way

Full score: 4 points

Fairness

Has high ethical standards, is strict with him/herself, is popular, and dislikes flattery and factions

Full score: 4 points

Originality

Constantly has new ideas and sends fresh wind to management

Full score: 4 points

Problem solving ability

Is reliable when needed and confronts problems with a sense of ownership

Full score: 4 points

Reference Materials for
Shareholders’ Meeting■ Assessment items for the OJS on Directors, Executive Officers and Department Heads

P31

Total full score: 24 points

Reference Data

(Note) The assessment items for the OJS on Corporate Auditors are different.

Reference Reason for Increasing the Number of Directors
To strengthen
the management system

To strengthen checking
functions

To invest in the future
We plan to increase the quota inanticipation that personnel with theability to improve the company’sfunctions during their term of officewill develop and act to evolve thecompany.

Apar t from the two outside directors,
t h e i nte r n a l d i r e c to r s c o m p r i s e t h e
President, the Senior Managing Director,
and the Managing Director. To further
improve checking functions between
internal officers, we plan to add multiple
internal directors who have knowledgeof products, management control,
information systems and distribution.

I n 2 0 07, we r e d u c e d t h e q u ot aof directors from 15 to 7 in orderto ac c e l e r ate d e c i s i o n - m a k i n g.
Following the expansion of the scale
and business of the company, weplan to increase the quota from
7 to 10 to suit the situation of ourbusiness.

2,330
Share split
1 share → 2 shares 2,142
Net sales●■ Net sales and the number of directors●

Net sales (100 million yen)

No. of employees(100 million yen)

No. of directors

Nine-monthaccounting term
Collapse of
Lehman Brothers

1,950
1,770

1,665
1,458
●

No. ofemployees

2,284
●

●

●

●

●

●

●

●

●

●

●

●

●

2,136

2,719

Increased by 4
Quota of directors

Increased by 2

7→10Election of outside director

2010

2011

2012

2013

2014

2014

2015

9

●

2009

5

●

2008

(Note) The number of employees includes part-time employees. Employees on loan are also included from 2018.

5

●

2007

Reduced by 1

6

●

2006

4

●

2005

4

●

Reduced by 1 Reduced by 1 Reduced by 1

5

●

5

●

5

●

5

●

5

●

5

●

5

●

2004

6

●

2003

7

●

2002

8

●

8

●

8

●

11

●

2001

1,144

992
1,897 1,972
1,684 1,717 1,710 1,776
1,680
1,661
1,552 1,581 1,585
1,394 1,487

Reduced by 3

2000

2,563

1,154

1,068

●

●

11

●

●

11

1,023 1,017

1,339 1,290
●

●

1,222

1,195

1,177

●

1,091
958

1,299 1,322

●

1,291

1,340 1,344

No. ofdirectors

Reduced by 1

2016

2017

2018

2019
Estimate31

Proposal No. 1

Partial Amendment to the Articles of Incorporation

Convocation Notice

1. Reason for the proposal

Business Report

P2

Reference Materials for
Shareholders’ Meeting

P10

P31

We intend to make the necessary amendments to the Articles of Incorporation to seek the growth of personnel withthe ability to improve the company’s functions and further enhance the management system in view of the future.

2. Details of the amendment

The details of the amendment are as follows.

(The amended section is underlined.)

Current Articles of Incorporation

Proposed amendment(Quota and election method)
Article 17 The Company’s directors shall be seven (7) persons
or less and elected at the Shareholders’ Meeting.

(Quota and election method)
Article 17 The Company’s directors shall be ten (10) persons
or less and elected at the Shareholders’ Meeting.

Proposal No. 2

Revision of the Total Amount of Directors’ Remuneration, etc.

The remuneration of the Company’s directors consists of fixed remuneration and the directors’ bonus (performance-linked).
With this proposal, we ask for a revision of the total amount of directors’ remuneration as follows:

1. Reason for the proposal

At this Meeting, we have submitted a partial amendment to the Articles of Incorporation to increase the quota of directors (from seven (7) or less to ten (10) or less) as Proposal No. 1. Furthermore, since we have also submitted theelection of a total of nine (9) directors (of whom two (2) are outside directors) as Proposal No. 3, we intend to revise themaximum amount of directors’ remuneration in consideration of the increase in the quota.
■ Basic policy concerning the decision of remuneration, etc. for directors and corporate auditors
The Company decides officers’ remuneration paid to directors and corporate auditors based on the following policies:(1) The level of remuneration enables officers’ willingness to improve their performance to be retained, and quality talentsfrom within and outside the company to be secured.
(2) The level takes into consideration changes in the management environment and external objective data, as well as thebalance between general levels, the company’s management conditions, and employees’ salaries.

Reference Data

(3) The level is within the maximum annual remuneration including the officers’ bonus.

2. Details of the revision
Maximum amount of officers’ remuneration(The amended section is underlined.)

Before the revision
Classification

Proposed amendment

Maximum amount of remuneration, etc.

Director

Classification
Director

400 million yen per annum

Outside director

Outside director

Maximum amount of remuneration, etc.
600 million yen per annum(Note) There will be no changes to the directors’ bonus (performance-linked), which will be paid within 3% of net profit, if net profit is booked at the time of account closing.

Reference Directors’ Remuneration
Directors’ remuneration system
Fixed remuneration

Directors’ bonus (performance-linked)

Monthly fixed remuneration(Paid in accordance with the position andevaluation of each officer)

Paid within 3% of net profit if net profit is bookedat the time of account closing■ Total amount of directors’ remuneration, etc. for the fiscal year under review
Number of recipients

Amount of remuneration, etc.

Director

3

306 million yen

Outside director

2

13 million yen(The amended section is underlined.)

Maximum amount of remuneration, etc.
400 million yen per annum(Notes) 1. Bonuses during the fiscal year under review are paid at 1.2% of net profit.
2. The figures indicated have been rounded down to the nearest specified unit.

■ Total amount of directors’ remuneration, etc. after the revision (conditional upon approval of this Proposal and Proposal No. 3)

32

Number of recipients

Amount of remuneration, etc.

Director

7—

Outside director

2—

Maximum amount of officers’ remuneration, etc.
600 million yen per annumProposal No. 3

Tetsuya Nakayama

Candidate no.

1■ Born December 24, 1958; 60 years old; 37 years 11 months with the Company■ No. of Company shares held		Reappointment

1,874,900 shares■ Attendance at Board of Directors’ meetings

Internal

100% (11/11 meetings)

Take on the challenge of a cutting-edge distribution system

In addition to our plan to increase the number of inventory items to 500,000, our urgent
issue is to establish a direct distribution system to users. To this end, we must introduce a
cutting-edge distribution system as soon as possible. I intend to continue making efforts
to enable Trusco Nakayama to fulfill its mission in any era by making preparations aheadof our peers in response to the needs of the times.
Tetsuya Nakayama,
Representative Director and President

P2

Business Report

The terms of office of Directors Tetsuya Nakayama, Takashi Nakai, Tadahisa Yabuno, Kenichi Saito, and Kuniaki Hagihara will expire at the closing of the Meeting.
Furthermore, Proposal No. 1 of the Meeting asks for a partial revision to the Articles of Incorporation to increase the quota of directors (from seven (7) or less to ten(10) or less). Therefore, we would like to ask our shareholders to appoint nine (9) directors (conditional upon the approval of Proposal No. 1). The director candidates
are as below.

Convocation NoticeElection of Five (9) Directors● March 1981

: Joined the Company● October 1984

: Director■ Reason for nomination as a director candidate
Mr. Nakayama has been nominated as a director candidate, taking into consideration the results of the OJS on
the President, which is a vote by shareholders who attended the previous 55th Annual Shareholders’ Meeting,as an important benchmark.

● December 1987 : Managing Director● December 1991 : Representative Director and Senior Managing Director

Approval rate

No. of attendees

No. of valid votes*

Affirmative votes

99.9%

1,790

1,611

1,609

* The number of valid votes does not include shareholders who did not vote on the day of the Meeting(abstention) or those the content of whose votes could not be determined (invalid).

● December 1994 : Representative Director and President (present)

Takashi Nakai

Candidate no.

2■ Born January 16, 1955; 64 years old; 40 years 11 months with the Company■ No. of Company shares held		Reappointment

31,100 shares■ Attendance at Board of Directors’ meetings

P31

Reference Data

■ Brief biography, status, business in charge of and important concurrent posts

Reference Materials for
Shareholders’ Meeting

P10

Internal

100% (11/11 meetings)

Continue to take on challenges based on verification!!

Amid aggressive capital investment, I will strive to carry out planning and verification
after launch as accurately as possible. This is because I want it to be the basis for ourchallenges toward the future, not to mention responding to any errors in estimation.
I intend to boldly take on challenges this year without being intimidated by the resultsof verification.
Takashi Nakai, Senior Managing Director &Assistant to the President■ Brief biography, status, business in charge of and important concurrent posts● March 1978

● April 1996
● April 1998

● May 1999
● January 2003
● April 2004

● April 2006

: Joined the Company● April 2007
● June 2007

: Tokyo Branch Manager: Head of Corporate Planning Division: Executive Officer & Head of Corporate Planning Division: Director & Head of Sales Planning Division: Director & Head of Product Division: Managing Director & Head of Product Division● January 2016

: Executive Officer & Head of Procurement Division● January2017: Senior Managing Director & Head of Corporate
Management Division● January 2019

: Senior Managing Director & Assistant to the
President (present): Managing Director, Head of Product Division &Officer in charge of Trusco Nakayama Thailand: Director & Head of Distribution Division■ Reason for nomination as a director candidate The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24 points: 4 points × 6 items).
Takashi Nakai
Average*2(Points*1)

Total

Sense ofmanagement, foresight

Leadership

Communication ability

Fairness

Originality

Problem solving
ability

17.8
17.5

3.2
3.0

2.8
3.0

3.3
3.0

2.9
2.9

2.6
2.8

3.0
2.9

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of 26 directors, executive officers and department heads* The candidate has no special interest in the Company.

33

Convocation Notice

Tadahisa Yabuno

Candidate no.

3■ Born March 13, 1962; 56 years old; 35 years with the Company■ No. of Company shares held		Reappointment

29,300 shares■ Attendance at Board of Directors’ meetings

Internal

100% (11/11 meetings)

Tread the path of a company of trust

P2

Business Report

I hope to develop a relationship of trust by deepening our customers’ understanding of ourcompany at the forefront. I hope our customers will use our system and purchase products
by a one-stop service. A workplace in which employees trust each other, are young andsincere, and can make their own decisions will support the company’s business.
“Officers are public servants.” I am ready to put my own affairs behind the public good.
Tadahisa Yabuno,
Managing Director & Head of Sales Division

Reference Materials for
Shareholders’ Meeting

P10■ Brief biography, status, business in charge of and important concurrent posts● March 1984

● April 1998
● April 2000

● April 2003
● October 2003

● January 2016

: Officer in charge of Trusco Nakayama Indonesia(present): Director & Head of Corporate Management Division ● January 2017

: Managing Director & Head of Sales Division(present)
Officer in charge of Trusco Nakayama Thailand(present): Executive Officer & Head of Corporate Planning
Division● June 2007

: Kanagawa Branch Manager● April 2014

: Jonan Branch Manager: Managing Director & Head of Corporate
Management Division: Executive Officer & Jonan Branch Manager■ Reason for nomination as a director candidate The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24 points: 4 points × 6 items).

P31
Tadahisa Yabuno
Average*2

Reference Data

● April 2004

: Joined the Company: Head of Fujisawa Sales Office(Points*1)

Total

Sense ofmanagement, foresight

Leadership

Communication ability

Fairness

Originality

Problem solving
ability

19.5
17.5

3.5
3.0

3.6
3.0

3.0
3.0

3.4
2.9

2.9
2.8

3.2
2.9

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of 26 directors, executive officers and department heads

Shinsaku Miyata

Candidate no.

4■ Born June 9, 1964; 54 years old; 29 years 11 months with the Company■ No. of Company shares heldNew
appointment

5,000 sharesInternal

I will aim to achieve both an expansion of business performanceand social contribution through the product lineup.

Ever since I joined the Company, I have focused on thinking and acting from a different
approach for everything without imitating others. Going forward, I intend to establish a
product lineup from a new perspective and develop products that match the changes ofthe social situation and stimulate potential demand, as well as cooperating with more than
2,000 suppliers to enhance functional assistance products not only for the manufacturing
sites, which continue to be robust, but also for aging Japanese manufacturing workers andthose with physical disabilities to help them work more smoothly.
Shinsaku Miyata,
Executive Officer & Head of Product Division■ Brief biography, status, business in charge of and important concurrent posts● March 1989

: Joined the Company● October 2001

: Head of Kobe Sales Office● January 2015

: Executive Officer & Head of Product Department● April 1997

: Head of Overseas Sales Office● October 2008

: Head of Planet South Kanto Center● January 2016

● April 1999

: Nagoya Branch Manager● April 2011

: Head of Product Department: Executive Officer & Head of Tokyo Head Office
Product Department● January 2017

: Executive Officer & Head of Product Division(present)■ Reason for nomination as a director candidate The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24 points: 4 points × 6 items).
Shinsaku Miyata
Average*2

34(Points*1)

Total

Sense ofmanagement, foresight

Leadership

Communication ability

Fairness

Originality

Problem solving
ability

17.1
17.5

3.1
3.0

3.1
3.0

2.3
3.0

2.5
2.9

3.3
2.8

2.8
2.9

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of 26 directors, executive officers and department heads* The candidate has no special interest in the Company.

Kazuo Nakai

Candidate no.

5■ Born July 7, 1969; 49 years old; 25 years 11 months with the Company■ No. of Company shares heldNew
appointment

2,700 sharesInternal

Aiming for further growth

Convocation NoticeElection of Five (9) Directors

P2

I feel rising expectations from our shareholders and clients for us to grow further. In order
to meet such expectations, I intend to maintain the ability to take on the challenges of new
projects as well as problem solving abilities even under drastic environmental changes, andlead them to growth. I will make company-wide efforts to enable us to become a company
that is cheerful, sincere, and trusted at any time, in character with Trusco Nakayama.
Kazuo Nakai, Executive Officer &Head of Corporate Management Division

Business Report

Proposal No. 3● April 1993

: Joined the Company● April 2010

: Head of Human Resources Section & Head ofHealthcare Section● April 2002

: Head of HC Niigata Sales Office● April 2013

: Head of Corporate Planning Department● April 2004

: HC Osaka Branch Manager● January 2017

: Executive Officer & Head of Corporate Planning
Department● January 2019

: Executive Officer & Head of Corporate
Management Division (present)■ Reason for nomination as a director candidate The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24 points: 4 points × 6 items).
Kazuo Nakai
Average*2(Points*1)

Total

Sense ofmanagement, foresight

Leadership

Communication ability

Fairness

Originality

Problem solving
ability

18.6
17.5

3.2
3.0

3.1
3.0

3.4
3.0

3.1
2.9

2.7
2.8

3.2
2.9

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of 26 directors, executive officers and department heads

Atsushi Kazumi

Candidate no.

6■ Born September 10, 1970; 48 years old; 25 years 11 months with the Company■ No. of Company shares heldNew
appointment

2,700 shares

P31

Reference Data

■ Brief biography, status, business in charge of and important concurrent posts

Reference Materials for
Shareholders’ Meeting

P10

Internal

Future-oriented, brave challenges

A corporate culture of constantly reforming oneself, an openness toward anything, andcolleagues who can help each other at any time and go forward cheerfully and positively.
On the other hand, there are also many points to be improved. Trusco Nakayama is on atireless path of reform and has ample room for growth. I will consider this an opportunity
to take on the challenge of creating a company that can continuously serve society.
Atsushi Kazumi, Executive Officer &Head of Information Systems Division■ Brief biography, status, business in charge of and important concurrent posts● April 1993

: Joined the Company● April 2001

: Head of Tsuchiura Sales Office● October 2010

● November 2002 : Head of Kanazawa Sales Office● April 2006

: Head of Catalog/Media Section & Head of
Dottokuru Section● January 2017

: Executive Officer & Head of e-Business Sales
Department in charge of Mail Order● October 2013

: Head of e-Commerce Sales Department● July 2017

● April 2014

: Head of e-Business Sales Department: Executive Officer & Head of Information Systems
Department● January 2019

: Executive Officer & Head of Information Systems
Division (present): Osaka Branch Manager■ Reason for nomination as a director candidate The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24 points: 4 points × 6 items).
Atsushi Kazumi
Average*2(Points*1)

Total

Sense ofmanagement, foresight

Leadership

Communication ability

Fairness

Originality

Problem solving
ability

18.8
17.5

3.3
3.0

3.4
3.0

2.8
3.0

3.0
2.9

3.1
2.8

3.2
2.9

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of 26 directors, executive officers and department heads* The candidate has no special interest in the Company.

35

Convocation Notice

Hideki Naoyoshi

Candidate no.

7■ Born December 7, 1971; 47 years old; 24 years 11 months with the Company

Newappointment■ No. of Company shares held: 3,500 sharesInternal

Achieve the highest quality distribution service

P2

Business Report

The convenience of having one company provide all the pro tools required by the market
cannot be overstated. I believe that providing as many unique and convenient services
using our abundant inventory as possible is the only way to win the support of customers.
I will aim to achieve the highest quality distribution service by promptly working on eachtheme.
Hideki Naoyoshi, Executive Officer &Head of Distribution Division

Reference Materials for
Shareholders’ Meeting

P10■ Brief biography, status, business in charge of and important concurrent posts● April 1994

: Joined the Company● October 2010

: Head of Corporate Auditor’s Office● January 2017● October 2003

: Head of Amagasaki Sales Office● October 2011

: Executive Officer & Head of Information Systems
Department: Head of Corporate Planning Section● July 2017

● April 2007

● February 2013 : Head of Information Systems Department: Executive Officer & Head of Distribution Division(present): Head of Kokura Sales Office■ Reason for nomination as a director candidate The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24 points: 4 points × 6 items).

P31
Hideki Naoyoshi

Reference Data

Average*2

Total

Leadership

Communication ability

Fairness

Originality

Problem solving
ability

19.4
17.5

3.4
3.0

3.5
3.0

3.0
3.0

3.1
2.9

3.0
2.8

3.3
2.9

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of 26 directors, executive officers and department heads

Green Terrace Café, 11F Tokyo Head Office36(Points*1)

Sense ofmanagement, foresight* The candidate has no special interest in the Company.

Proposal No. 3

Kenichi Saito

Candidate no.

8■ Born November 15, 1949; 69 years old
Reappointment
2,500 shares■ No. of Company shares held		
100% (11/11 meetings)■ Attendance at Board of Directors’ meetings
OutsideThree years as of the closing of the Meeting■ Term of office as outside director

Make the joy of others my own joy

Convocation NoticeElection of Five (9) Directors

P2

Business Report

Populism and self-centrism are leading the world in the wrong direction. Many companies
are only interested in improving their own figures, and many individuals prioritize thepursuit of their own profit. If you start to seek figures, customers and colleagues will
leave you. The important thing is to propose products and services that will help improvethe business performance of customers and to continue doing what will be of use to yourhardworking colleagues. It is only when you start to seek the joy of your customers andcolleagues that relationships of trust are established and you can achieve results. The
world is really fascinating.
Outside Director (Board Brain), Kenichi Saito■ Reason for nomination as an outside director candidate
The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24
points: 4 points × 6 items).

● April 1975

: Joined McKinsey & Company● January 1996

: Founded ForeSight & Company President (present)● March 2016

: Outside director of the Company (present)● October 2017

: Founded the Society for Problem Solving Proficiency
Representative Director of the Society for Problem
Solving Proficiency (present)(Points*1)

Candidate no.

9

Kuniaki Hagihara

Kenichi Saito
Average*2

Total

Sense ofmanagement,
foresight

Leadership

Communication
ability

Fairness

Originality

Problem solving
ability

18.1
17.5

3.1
3.0

3.0
3.0

3.1
3.0

2.7
2.9

3.3
2.8

2.9
2.9

P31

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of 26 directors, executive officers and department heads■ Born August 19, 1953; 65 years old
2,000 shares■ No. of Company shares held		
90.9% (10/11 meetings)■ Attendance at Board of Directors’ meetingsThree years as of the closing of the Meeting■ Term of office as outside director

Reappointment

Reference Data

■ Brief biography, status, business in charge of and important concurrent posts

Reference Materials for
Shareholders’ Meeting

P10

OutsideWe will continue to boldly take on challenges toward new
growth and development.

International competition is increasingly intensifying, shaking the international
superiority of Japan’s manufacturing industry. Trusco Nakayama will continue to take onchallenges without remaining in the status quo as a pro tools supplier that “supports Japan’s
monozukuri.” We will continue to push forward to improve customers’ convenience andgain their trust so that they will say, “Ask Trusco,” or “I knew Trusco would have them.”
Outside Director (Board Brain), Kuniaki Hagihara■ Brief biography, status, business in charge of and important concurrent posts● March 1976

: Joined Hagihara Industries Inc.

■ Reason for nomination as an outside director candidate
The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24
points: 4 points × 6 items).
(Points*1)● December 1984 : President of Hagihara Industries Inc.
● January 2010

: President & CEO● January 2016

: Chairman (present)● March 2016

: Outside director of the Company (present)● June 2018

: President of Toyo Heisei Polymer Co., Ltd. (present)

Total

Sense ofmanagement,
foresight

Leadership

Communication
ability

Fairness

Originality

Problem solving
ability

KuniakiHagihara

18.7

3.3

3.1

3.1

3.1

2.9

3.0

Average*2

17.5

3.0

3.0

3.0

2.9

2.8

2.9

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of 26 directors, executive officers and department heads

Trusco Nakayama’s criteria for independence of outside officers▶

P40

37

Convocation NoticeBusiness Report

P2

Reference Materials for
Shareholders’ Meeting

P10

Reference Data

P31

■ Reason for being nominated as an outside director candidate(1) Kenichi Saito
Mr. Kenichi Saito has experience in a c ompany
that conducts business globally and has founded amanagement consulting firm. He has been nominatedas a candidate for outside director for the fair andobjective guidance toward continuous improvement of theCompany’s corporate value, as expected of him, basedon his experience and knowledge as a management
professional.

(2) Kuniaki Hagihara
Mr. Kuniaki Hagihara has been nominated as a
candidate for outside director for his abundant experienceand broad knowledge as a manager in manufacturing,as well as his expected contribution to swift and bolddecision-making by the management, in addition tosupervisory functions and advice from a shareholder’s/
investor’s perspective toward a sustainable increase incorporate value.

■ Notes concerning outside director candidates

The two Outside Directors (Mr. Kenichi Saito (left) and Mr. Kuniaki Hagihara)(1) On independence
Mr. Kenichi Saito and Mr. Kuniaki Hagihara are outside director candidates as set forth in Item 7, Paragraph 3, Article 2 of theOrdinance for Enforcement of the Companies Act, and fulfill the Company’s outside director appointment criteria. In addition, we have
filed them as independent officers with the Tokyo Stock Exchange, as they also fulfill the requirements for independence stipulatedby the Tokyo Stock Exchange as well as the independence criteria for outside officers stipulated by the Company
P40）.* If Mr.
（▶
Saito and Mr. Hagihara’s reappointments are approved, we plan to continue to make them independent officers.

(2) On the contract for limitation of liability

In order to acquire personnel who would become outside officers and to secure their effectiveness, we have concluded a contract
for limitation of liability with Mr. Saito and Mr. Hagihara, with the amount of limited liability being the minimum total liability amount asprescribed in Paragraph 1, Article 425 of the Companies Act. If their reappointments are approved, we plan to continue the above
contract for limitation of liability.

(3) On special interest in the Company
We have had a long relationship with Mr. Saito since his participation in Trusco Nakayama’s CI competition (corporate innovation,
including company name change) in 1990, when he was deputy manager of McKinsey & Company’s Osaka branch. Other occasions
include his lecture on marketing at our Nationwide Boss Conference in 2008. There is no business or other relationship between the
Company and the companies that Mr. Saito concurrently serves; therefore, they have no special interest in the Company.
We have a business relationship of approximately 20 years with Hagihara Industries Inc., of which Mr. Hagihara is a
representative. Hagihara Industries’ sheet products such as blue sheets are highly valued as a subsidiary material at factories andconstruction work sites. Our procurement from Hagihara Industries accounts for less than 1% of our total procurement by amount(less than 5% of the consolidated net sales of said company), and there is no special interest that will hinder or be a problem in Mr.
Hagihara’s execution of his duties as an outside director.

Reference Standards for Appointment of Outside Officers
For the appointment of outside directors and outside corporate auditors, Trusco Nakayama Corporation (hereinafter referred to as the“Company”) sets out the following criteria.
1. Criteria for the Appointment of Outside Directors
The Company appoints outside directors from among those fulfilling the conditions set out below.
(1) Candidates shall be able to contribute to the continuous growth and improvement of the corporate value of the Company, and shallhave extensive knowledge and sufficient experience of business management.
(2) Candidates shall be subject to none of the grounds for disqualification as a director set out in the items of Paragraph 1, Article 331 of
the Companies Act.
(3) Candidates shall fulfill the requirements for an outside director set out in Item 15, Article 2 of the Companies Act.
2. Criteria for the Appointment of Outside Corporate Auditors
The Company appoints outside corporate auditors from among those fulfilling the conditions set out below.
(1) Candidates shall have knowledge in fields such as law, finance, accounting, corporate governance and the like, and shall be able tocontribute to the improvement of corporate value from a neutral and fair standpoint.
(2)	Candidates shall be subject to none of the grounds for disqualification as a corporate auditor set out in Item 1, Article 335 of theCompanies Act.
(3) Candidates shall fulfill the requirements for an outside corporate auditor set out in Item 16, Article 2 of the Companies Act.

38

Proposal No. 4

Election of One (1) Corporate Auditor

Candidate■ Born March 30, 1956; 62 years old■ No. of Company shares held		14,600 shares
100% (11/11 meetings)■ Attendance at Board of Directors’ meetings
100% (12/12 meetings)■ Attendance at Board of Auditors’ meetings
Eleven years nine months as of the■ Term of office as full-time corporate auditor		time of the closing of the Meeting

Reappointment
Full-time
OutsideP2

Continue being TRUSCO

Trusco Nakayama has created the present-day TRUSCO by continuously making various
unique efforts with the aim of being a TRUSTED COMPANY that is acknowledged byall. I hope to contribute to the continuous development of the Company by proactively
fulfilling the role and responsibilities of a corporate auditor, who plays a part in
TRUSCO’s corporate governance, so that Trusco Nakayama will continue to be a trusted
company in the coming stage of new advancement.
Masaki Matsuda,
Full-time Corporate Auditor

Business Report

Masaki Matsuda

Convocation Notice

The term of office of Corporate Auditor Mr. Masaki Matsuda will expire at the closing of the Meeting. Therefore, we would like to ask our shareholders to appoint one
corporate auditor. The consent of the Board of Auditors has been obtained for this Proposal. The corporate auditor candidate is as follows.

● April 1978

● March 2003

● June 2007

: Joined the Kyowa Bank, Ltd.
(currently Resona Bank, Ltd.)■ Reason for nomination as an outside corporate auditor candidate
The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24
points: 4 points × 6 items).
(Points*1)
Sense ofmanagement,
foresight

Fairness,sincerity

MasakiMatsuda

17.8

3.0

3.0

2.9

3.1

3.0

2.7

Average*2

17.8

3.0

3.0

3.0

3.1

2.8

2.8

: Chief Credit Officer of the Osaka No. 3
Loan Department, Resona Bank, Ltd.

: Full-time corporate auditor of the Company(present)

Objectivity,
Pointing out
neutrality,
problems,
common Compliance Communication
proposingsense,
improvements
knowledge

Total*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of three corporate auditors■ Reason for nomination as an outside corporate auditor candidate

Mr. Masaki Matsuda has a long history of experience in a financial institution and abundant knowledge of finance, etc. as well as deep
insight into management. He has been nominated as a candidate for outside corporate auditor for his expected neutral and fair opinions
on the Company’s business management and our judgment that he can appropriately execute his duties as an outside corporate auditor
based on his knowledge and insight as well as his objective stance as an outside corporate auditor.

P31

Reference Data

■ Brief biography, status, business in charge of and important concurrent posts

Reference Materials for
Shareholders’ Meeting

P10■ Notes concerning the outside corporate auditor candidate(1) On his independence
Mr. Masaki Matsuda is an outside corporate auditor candidate as set forth in Item 8, Paragraph 3, Article 2 of the Ordinance for
Enforcement of the Companies Act, and fulfills the Company’s outside corporate auditor appointment criteria (page 38). In addition,
since he fulfills the requirements for independence stipulated by the Tokyo Stock Exchange as well as the independence criteria foroutside officers stipulated by the Company (page 40), we have filed him as an independent officer with the Tokyo Stock Exchange. We
plan to continue to make him an independent officer if his reappointment is approved.

(2) On special interest in the Company

Mr. Masaki Matsuda worked at Resona Bank, Ltd., which is a business partner of the Company and from which the Company hasborrowings, but retired from the bank 11 years and nine months ago. There is no special interest that will hinder or be a problem in Mr.
Masaki Matsuda’s execution of his duties as an outside corporate auditor.

39

Proposal No. 5

Election of One (1) Substitute Corporate Auditor

Convocation Notice

The validity of the current appointment of a substitute corporate auditor is until the start of the Meeting. Therefore, we would like to ask our shareholders to appoint
one (1) substitute corporate auditor in the case that we lack a quorum of corporate auditors as stipulated in laws and regulations. This Proposal has obtained the consent
of the Board of Auditors. The substitute corporate auditor candidate is described below.

Kohei Nomura
Candidate

Business Report

It is due to his expertise and experience as a lawyer. Since he also has an excellent track record incorporate law, we have determined that he would be able to appropriately execute his duties as an
outside corporate auditor, and ask our shareholders to approve his appointment.

■ Notes concerning the substitute outside corporate auditor candidate(1) Mr. Kohei Nomura has exchanged an advisory contract with the Company.
(2) Mr. Nomura is a substitute outside corporate auditor candidate, and fulfills the requirements foroutside corporate auditor candidates as set forth in Item 8, Paragraph 3, Article 2 of the Ordinancefor Enforcement of the Companies Act.
(3) If Mr. Nomura is appointed as an outside corporate auditor, we plan to conclude a contract forlimitation of liability, with the amount of limited liability being the minimum total liability amount asprescribed in Paragraph 1, Article 425 of the Companies Act, in order to acquire personnel who will
become outside officers and secure their effectiveness.
(4) Although Mr. Nomura belongs to Nomura Law Office, with which the Company has business
relations through an advisory contract, the advisory fee is extremely small and therefore we plan
to file Mr. Nomura as independent officer with the Tokyo Stock Exchange if his appointment isapproved.

Reference Materials for
Shareholders’ Meeting

P10

Reference Data

Outside■ Reason for nomination as a substitute outside corporate auditor candidate

P2

P31

■ Born May 12, 1948; 70 years old■ No. of Company shares held: 870 shares■ Brief biography, status, business in charge of and important concurrent posts● April 1975

: Registered as a lawyer (Osaka Bar Association)● April 1977

: Established Nishikawa & Nomura Law Office(currently Nomura Law Office*) (present)*Nomura Law Office Location: Kita-ku, Osaka
Abiding by the motto, “There is no case that cannot be solved,” the law officeaccepts requests from a broad range of clients including companies, groups
and individuals, and handles cases in various fields from corporate law,
including the Companies Act and financial legislations, to general civil casesand criminal cases.

Reference Criteria for the Independence of Outside Officers
The Company has set out the criteria for independence as below, and deems that an outside officer is independent if none of the criteria
apply thereto.
(1) A major shareholder of the Company (holding 10% or more of the total voting rights in the Company at the end of the most recent fiscal year)
or an individual who serves as a key employee such as a director, corporate auditor, executive officer, manager, or any other post higher thandepartment head (hereinafter referred to as “Director, etc.”) in an entity that is a major shareholder of the Company(2) A director, etc. of a corporation or the like of which the Company is a major business partner (with annual business exceeding 5% ofconsolidated net sales)(3) A director, etc. of a corporation or the like that is a major business partner of the Company (with annual business exceeding 5% ofconsolidated net sales)(4) A director, etc. of a corporation or the like that is a major lender to the Company (the Company borrows more than 2% of its total assets fromthe lender)(5) An accounting auditor of the Company or its subsidiary, or an individual who is responsible for auditing the Company or its subsidiary as an
employee at the accounting auditor(6) A relative within the third degree of kinship or closer of an individual described in any of the items numbered 1 to 5 above(7) A relative within the third degree of kinship or closer of an officer, executive officer, or key employee in a post higher than department headof the Company or its subsidiary(8) An individual to whom any of the items numbered 1 to 7 above has applied within the last three years■ Notes concerning outside corporate auditors(1) T here are no special interests between Mr. Akira Takada, Mr. Hiroho Kamakura and the Company.
(2) Mr. Akira Takada and Mr. Hiroho Kamakura are outside corporate auditors as set forth in Item 16, Article 2 of the Companies Act, and havebeen filed as independent officers with the Tokyo Stock Exchange.
(3) In order to acquire personnel who would become outside officers and to secure their effectiveness, the Company and Mr. Hiroho Kamakura
have concluded a contract for limitation of liability, with the amount of limited liability being the minimum total liability amount as prescribed in
Paragraph 1, Article 425 of the Companies Act.

40

Introduction of Two (2)Corporate Auditors■ Born January 3, 1958; 61 years old■ No. of Company shares held		■ Attendance at Board of Directors’ meetings■ Attendance at Board of Auditors’ meetings■ Term of office as full-time corporate auditor					

Full-time

100 shares
100% (9/9 meetings)

Outside100% (9/9 meetings)
One year as of the time of theclosing of the Meeting

P2

Delve deeply into the company

As a full-time corporate auditor residing at the Tokyo head office, I intend to contributeto the continuous development of Trusco Nakayama Corporation by promptly andaccurately grasping important information on the decision-making of the Company
and engaging appropriately as an independent outside corporate auditor with no strings
attached.
Akira Takada,
Full-time Corporate Auditor

Business Report

Akira Takada

Convocation Notice

Reference Introduction of Corporate Auditors in Office● April 1981

: Joined Nomura Securities Co., Ltd.

■ Evaluation as Corporate Auditor
The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24 points: 4 points ×
6 items).
(Points*1)● December 2001 : Head of IB Consulting Office● March 2009

: Managing Director of IB Business Development
Department● April 2012

: Director of Nomura Investor Relations Co., Ltd.

Akira Takada
Average*2● April 2015

: Advisor of Nomura Investor Relations Co., Ltd.

● March 2018

: Full-time Corporate Auditor of the Company (present)

Total

Sense ofmanagement,
foresight

Fairness,sincerity

18.2
17.8

3.0
3.0

3.1
3.0

3.1
3.0

3.1
3.1

3.0
2.8

3.0
2.8

P31

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of three corporate auditors■ Born January 27, 1947; 72 years old■ No. of Company shares held
■ Attendance at Board of Directors’ meetings■ Attendance at Board of Auditors’ meetings■ Term of office as part-time corporate auditor

Hiroho Kamakura

Objectivity,
Pointing out
neutrality,
problems,
common Compliance Communication
proposingsense,
improvements
knowledge		Part-time

2,500 shares
81.8% (9/11 meetings)
100% (12/12 meetings)

Reference Data

■ Brief biography, status, business in charge of and important concurrent posts

Reference Materials for
Shareholders’ Meeting

P10

OutsideSix years eight months as of thetime of the closing of the Meeting

Contribute to sound and continuous development

The duty of an auditor is to carry out auditing activities as an independent institution forthe sound development of the company. I intend to actively contribute to the continuous
growth of the Company as an outside corporate auditor with expertise in finance andaccounting.
Hiroho Kamakura,Part-time Corporate Auditor■ Brief biography, status, business in charge of and important concurrent posts● November 1971 : Joined Tohmatsu Aoki & Co.
(currently Deloitte Touche Tohmatsu LLC)
● May 1973

● July 2012

● March 2013

■ Evaluation as Corporate Auditor
The following results of the FY2018 OJS on Directors have been adopted as an important benchmark (Full score of 24 points: 4 points ×
6 items).
(Points*1): Registered as a certified public accountant: Part-time Corporate Auditor of the Company (present)Part-time Corporate Auditor of Yushin Precision Equipment
Co., Ltd. (present): Part-time Corporate Auditor of Fujio Food System Co., Ltd.
(present)

Objectivity,
Pointing out
neutrality,
problems,
common Compliance Communication
proposingsense,
improvements
knowledge

Total

Sense ofmanagement,
foresight

Fairness,sincerity

HirohoKamakura

17.3

3.0

3.0

3.0

3.0

2.5

2.8

Average*

17.8

3.0

3.0

3.0

3.1

2.8

2.8

2

*1 The indicated scores have been rounded to the first decimal place.
*2 The average score of three corporate auditors

41

Frequently Asked
Questions

Procedures of the
Shareholders’ Meeting

Q&A Frequently Asked Questions to Trusco
Q1

42

What are your methods and purpose of

Business Report Page 10–

Answers to questions frequently asked by our shareholders

financing ?

We recognize that reinforcements of distribution functions and the IT infrastructure are essential for the future expansion of thecompany. Therefore, in order to enhance investment in distribution equipment and information systems, we financed 10 billion yen in
August 2017 and 15 billion yen in July 2018 through bank borrowings.

Q2
What is the reason for theincrease in sales and a drop in profit ?

It was due to an increase in freight and packaging costs owing to an increase in shipment following an increase in sales and a risein delivery prices, an increase in depreciation due to capital investment in Planet Saitama and others, and an increase in SG&A due
to rises in salaries and bonuses on the back of an increase in headcount.

Q3

How do you view yourCorporate governance

Reference Data

P31

Management, sales strategy

Business Report
Reference Materials for
Shareholders’ Meeting

P10

Shares, dividends, shareholder benefits, IR

Convocation Notice

Reference

P2

Voting Right Exercise Methods Page 8–

current payout ratio ?

We believe we can maximize returns to shareholders by achieving continuous growth. Based on the policy that continued capital
investment is essential for improving corporate value, we have focused our investments in distribution centers, IT infrastructure, andthe personnel that support them, and achieved solid growth as a result. Currently we intend to maintain a payout ratio of 25% basedon business performance as a result of considering the balance between returns by corporate value improvement through capital
investment and returns by dividends, and provide returns to shareholders with a comprehensive dividend amount. Starting the fiscal
year ending December 2019, we have adopted dividends based on consolidated net income, and set a basic policy of paying
dividends based on business performance with a consolidated payout ratio of 25% if the recorded profit exceeds a certain level, witha lower limit for stable dividends.

Q4
Are there any plans for ashare buyback ?

At the moment, we have no plans for share buybacks. Our ROE at the end of the fiscal year ended December 31, 2018 was 8.3%.
We believe it is important to improve sales and profits by effectively using funds to strengthen functions (investing in thereinforcement of distribution and growth areas such as IT), improving customers’ convenience, and contributing to monozukuri,
instead of aiming to improve corporate value with short-term methods. We hope to return our profits to our shareholders throughcorporate value improvement and dividends.

Q5
What isyour succession plan ?

We carry out personnel transfers across divisions on a regular basis, including not only rank-and-file employees but also
managers and heads of departments, in order to establish a foundation on which everyone can obtain a multi-faceted perspective.
Executives and department heads or above are evaluated by a total of around 160 executives, department heads and managers in
an open judging system (OJS, i.e., 360-degree evaluation), a personnel evaluation system, the results of which are used as criteria
for promotion and demotion. Furthermore, executives and department heads or above participate in the Management Committee
every month to discuss managerial issues. Through such mechanisms, we focus on creating an environment where manager
candidates are trained and fostered.

remuneration decided through transparent procedures ?

The remuneration of directors takes into consideration the balance between industry levels and business performance and isdetermined within a total remuneration limit decided at the Shareholders’ Meeting, upon discussion by the Board of Directors that
includes outside directors. The allocation of remuneration is left to the discretion of President Nakayama.
The remuneration of corporate auditors takes into consideration the balance between industry levels and business performanceand is determined through discussion by corporate auditors based on the amount indicated by a director within a total remuneration
limit decided at the Shareholders’ Meeting.
Directors’ bonuses and corporate auditors’ bonuses are determined within 3% of net income at the time of account closing within
the annual remuneration limit, which includes executives’ bonuses, in consideration of each executive’ s business execution status.

Convocation Notice

Q&A Page 42–

P2

Business ReportIs

Proposal Details Page 31–

P10
Reference Materials for
Shareholders’ Meeting

Q6

Outside Officer’s Report Page 22–

P31

Reference Data

Corporate governanceInitiatives in the 57th Period Page 15–43