Note: This document has been translated from a part of the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, the original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translation.
(Stock Exchange Code 4987)(June 8, 2022)
To Shareholders with Voting Rights:
Kenichi Tsuji
President and Representative Director
Teraoka Seisakusho Co., Ltd.
Head Office: 1-4-22 Hiromachi,
Shinagawa-ward, TokyoNOTICE OF CONVOCATION
OF THE 112TH ANNUAL GENERAL MEETING OF SHAREHOLDERS
We would like to express our appreciation for your continued support and patronage.
You are cordially invited to attend the 112th Annual General Meeting of Shareholders of Teraoka Seisakusho
Co., Ltd. (the “Company”). The meeting will be held for the purposes as described below.
From the viewpoint of preventing the spread of COVID-19, we ask you to refrain, if at all possible, from
attending the General Meeting of Shareholders in person on the day. In place of attending the meeting, you may
exercise your voting rights in writing. In this case, after reviewing the attached Reference Documents for the
General Meeting of Shareholders, please indicate your vote for or against each proposal on the enclosed Voting
Rights Exercise Form and return it so that it shall be received by 5:20 p.m. on Wednesday, June 22, 2022, Japantime.
1. Date and Time:Thursday, June 23, 2022, at 10:00 a.m. Japan time (reception starts at 9:00 a.m.)

2. Venue:

OSAKI BRIGHT CORE HALL
3F OSAKI BRIGHT CORE, 5-5-15 Kitashinagawa, Shinagawa-ward, Tokyo*Please note that the venue is different from the previous meeting.

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
112th Fiscal Year (April 1, 2021 - March 31, 2022) and results of audits by the
Accounting Auditor and the Board of Auditors of the Consolidated Financial
Statements
2. Non-consolidated Financial Statements for the Company’s 112th Fiscal Year
(April 1, 2021 - March 31, 2022)
Proposals to be resolved:
Proposal 1:
Distribution of Surplus
Proposal 2:
Partial Amendment to Articles of Incorporation
Proposal 3:
Election of 10 Directors
Election of 1 Substitute Auditor
Proposal 4:-1-

4. Matters to be Determined Upon Convocation:
Exercise of Voting Rights by Proxy
Proxies to whom the exercise of voting rights may be delegated are limited to one other shareholder who
holds voting rights, in accordance with the Articles of Incorporation of the Company. If attending themeeting by proxy, please submit a written proof of the authority of representation (power of attorney, etc.)
together with the Voting Rights Exercise Forms of the shareholder and proxy at the reception desk.

◎

◎

◎

◎

When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk. Additionally,please bring this Notice with you for use as meeting material.
Please refer to the enclosed document for details of the live-stream of the meeting on the Internet on the day and of ondemand streaming that will be available on a later date.

Of the documents to be provided with this Notice, “Consolidated Statements of Changes in Net Assets” and“Notes to Consolidated Financial Statements” in the Consolidated Financial Statements and “Nonconsolidated Statements of Changes in Net Assets” and “Notes to Non-consolidated Financial Statements” in
the Non-consolidated Financial Statements are posted on the Company’s website(https://www.teraokatape.co.jp/) on the Internet in accordance with the provisions of laws and regulations aswell as the Company’s Articles of Incorporation, and therefore are not provided in the attachment to thisNotice. Accordingly, the documents provided with this Notice form part of the documents audited by the
Audit & Supervisory Board Members and Accounting Auditor in the preparation of their Audit Reports.
Should the Reference Documents for the General Meeting of Shareholders, Business Report, Non-consolidated Financial
Statements, or Consolidated Financial Statements require revisions, the revised versions will be posted on the Company’s
website (https://www.teraokatape.co.jp/).

[Measures to Prevent the Spread of COVID-19]◎
To prevent the spread of COVID-19 and with the safety of shareholders as our top priority, shareholders are
asked to refrain from attending the General Meeting of Shareholders in person on the day and to exercise
their voting rights in advance if at all possible.
◎
A certain distance has been placed between seats in the meeting room. For this reason, entry into the meetingroom will be limited to the first 60 shareholders to arrive. If the number of arrivals exceeds the number ofseats available, we may refuse entry into the room.
◎No gifts will be given to shareholders attending the General Meeting of Shareholders.
◎If you do attend the venue in person, please check your own physical condition and take measures to prevent
infection, such as washing your hands and wearing a mask.
◎
All speakers and operational staff will take preventive measures, including wearing masks.
◎Your temperature will be checked near the entrance to the venue, and any person who has a high temperature,seems unwell, or is not wearing a mask will be refused entry.

-2-

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

Distribution of Surplus

The Company considers the return of profits to shareholders as one of the most important management
issues and positions the continuation of stable dividends as a basic policy of returning profits. The Company’s
basic approach to the return of profits to shareholders is to make a decision after comprehensively taking into
consideration various factors that affect the dividend level, including business performance for the fiscal year
under review, financial position, cash flows, and the dividend payout ratio, in addition to future businessstrategy, business development policies, forecasts, and other factors, while also securing the funds forinvestment.
In accordance with this basic policy, the Company plans to pay a term-end dividend for the 112th fiscal year
as follows.
Items Related to Term-end Dividend(1) Items related to the allocation of dividend property to shareholders and its total amount5 yen per share of common stock
Total of 126,660,235 yen(2) Effective date of distribution of surplus
June 24, 2022

-3-

Proposal 2:
1.

Partial Amendment to Articles of Incorporation

Reasons for the Amendment
The amended provisions stipulated in the proviso of Article 1 of the supplementary provisions of the “ActPartially Amending the Companies Act” (Act No. 70 of 2019) will be enforced on September 1, 2022.
Accordingly, in order to prepare for the introduction of the system for electronic provision of materials forgeneral meetings of shareholders, the Articles of Incorporation of the Company shall be amended as follows.
(1) The proposed Article 13, Paragraph 1 provides that information contained in the reference materials
for the general meeting of shareholders, etc. shall be provided electronically.
(2) The purpose of the proposed Article 13, Paragraph 2 is to establish a provision to limit the scope ofmatters to be included in the paper copy to be sent to shareholders who have requested it.
(3) The provisions related to the internet disclosure and deemed provision of the reference materials forthe general meeting of shareholders, etc. (Article 13 of the current Articles of Incorporation) will
become unnecessary and will therefore be deleted.
(4) In line with the above establishment and deletion of the provisions, supplementary provisions related
to the effective date, etc. shall be established.

2. Details of the Amendment
The details of the amendments are as follows.
(Amended sections are underlined.)
Proposed Amendments

Current Articles of Incorporation(Internet Disclosure and Deemed Provision ofReference Materials for the General Meeting of
Shareholders, Etc.)<Deleted>

Article 13 The Company may, when convening ageneral meeting of shareholders, deem that it has
provided information to shareholders pertaining
to matters to be described or indicated in thereference materials for the general meeting ofshareholders, business report, non-consolidated
financial statements, and consolidated financial
statements, by disclosing such information
through the internet in accordance with theprovisions provided in the Ordinance of the
Ministry of Justice.
<Newly established>(Measures for Electronic Provision, Etc.)
Article 13 The Company shall, when convening
a general meeting of shareholders, provide
information contained in the reference materials
for the general meeting of shareholders, etc.
electronically.
2. Among the matters to be provided electronically,
the Company may choose not to include all, orpart of the matters stipulated in the Ordinance ofthe Ministry of Justice in the paper copy to besent to shareholders who have requested it by
the record date for voting rights.

-4-Current Articles of Incorporation<Newly established>

Proposed Amendments(Supplementary provisions)
1. The amendment of Article 13 of the Articles ofIncorporation shall come into effect on
September 1, 2022, the date of enforcement of
the amended provisions stipulated in the proviso
of Article 1 of the supplementary provisions of
the Act Partially Amending the Companies Act(Act No. 70 of 2019) (the “Effective Date”).
2. Notwithstanding the provisions of the preceding
paragraph, Article 13 (Internet Disclosure andDeemed Provision of Reference Materials for
the General Meeting of Shareholders, Etc.) shallremain in force with respect to a general
meeting of shareholders to be held on a datewithin six months from the Effective Date.
3. These supplementary provisions shall be deleted
after the lapse of six months from the Effective
Date or the lapse of three months from the dateof the general meeting of shareholders set forthin the preceding paragraph, whichever is later.

-5-

Proposal 3:
Election of 10 Directors
The terms of all 10 Directors will expire at the conclusion of this Annual General Meeting of Shareholders.
Accordingly, the election of 10 Directors is proposed.
Regarding the policies and procedures for the determination of Director candidates, their selection andappointment are conducted by a resolution of the Board of Directors taking into comprehensive considerationof the following factors: the candidate has a deep understanding of the Company’s corporate philosophy andmanagement principles; may be expected to contribute to the further development of the Company; has theability to accurately grasp issues in the divisions under their control and cooperate with other officers andemployees to resolve issues; and possesses the attitude and knowledge to comply thoroughly with laws,
regulations and the corporate ethics.
The candidates for Director are as follows:
No.

Current Positions in the
Company

Name

Representative Director
and Chairman
Representative Director
and President

Term of Office as
Director

1

Reelection

Keishiro Teraoka

2

Reelection

Kenichi Tsuji

3

Reelection

Masakazu Naitou

Managing Director

10 years4

Reelection

Taiji Namekawa

Director

4 years

5

Reelection

Nobuhisa Ishizaki

Director

4 years

6

Reelection

Tatsuya Kubo

Director

4 years

7

Reelection

Shinji Asakura

Director

1 year8

Reelection

Tatsuya Kamikawa

External Director

2 years

9

Reelection

Keiko Hatta

External Director

2 years

10

Reelection

Katsunori Furuichi

External Director

1 yearExternal
External
Independent
External
Independent-6-

34 years
10 years

No.

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions
January 1986
June 1988
March 1992
June 1994
June 2000
June 2018

1

Joined the Company
Director
Director, Ibaraki Plant Manager
Senior Managing Director; Executive General Manager,
Administrative Division
President and Representative Director
Chairman and Representative Director (current position)(to present)

Number ofshares of theCompany held

773,675
shares[Reelection]
Keishiro Teraoka(November 6, 1951)

2[Reason for nomination as a candidate for Director and outline of expected role]
Mr. Keishiro Teraoka has led the group management for the Company’s growth and enhancement of corporate value withhis strong leadership by leveraging his abundant experience and deep insight as a corporate manager over the years in the
Company and its group companies at home and abroad since he assumed the position of President in 2000. Based on his
insight and capabilities, the Company has judged that he will be able to perform his managerial duties through appropriate
business judgement and decision-making and provide objective oversight of the management and has thus renominated him
as a candidate for Director.
April 1984
Joined ITOCHU Corporation
Apr. 2010
Acting General Manager, Industrial Textile & Lifestyle
Department
May 2012
Seconded to the Company
June 2012Managing Director
June 2015
Senior Managing Director
April 2017
Senior Managing Director in charge of Sales and Marketing,
15,377
Research and Development, and Manufacturing divisions
sharesApril 2018
Transferred to the Company, Senior Managing Director in
charge of overall corporate management
June 2018
President and Representative Director (current position)[Reelection](to present)
Kenichi Tsuji(September 3, 1960)[Reason for nomination as a candidate for Director and outline of expected role]
Mr. Kenichi Tsuji possesses a wealth of experience and achievements in the sales field in ITOCHU Corporation and hasenhanced the Company’s management base while also promoting fundamental structural reforms since he had been
temporarily seconded to the Company. In addition to his initiatives promoting the Third Mid-Term Business Plan, he is wellversed in the global competitive environment surrounding the Company. Based on his insight and capabilities, the Company
has judged that he will be able to perform his managerial duties through appropriate business judgement and decisionmaking and provide objective oversight of the management and has thus renominated him as a candidate for Director.

-7-

No.

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions

Number ofshares of theCompany held

April 1980
September 2009
April 2010
October 2011

3

4

Joined The Mitsubishi Bank, Ltd. (currently MUFG Bank, Ltd.)
Joined the Company
General Manager, Accounting Department
Deputy Executive General Manager, Administrative Division;
General Manager, Accounting Department
January 2012
Deputy Executive General Manager, Administrative Division;
General Manager, Corporate Planning Office; General
Manager, Accounting Department
June 2012
Director; Executive General Manager, Administrative Division;
General Manager, Corporate Planning Office; General
Manager, Accounting Department[Reelection]
10,000December 2013 Director; Executive General Manager, Administrative Division;
sharesExecutive General Manager, PTI Division; General Manager,
Masakazu Naitou
Corporate Planning Office; General Manager, Accounting(September 27, 1955)
Department
June 2015
Managing Director (current position); Executive General
Manager, Administrative Division; Executive General Manager,
PTI Division; General Manager, Corporate Planning Office
April 2017
In charge of Administration and Corporate Planning Office(current position)
April 2018
In charge of overall business management (current position)and Quality Assurance Department (current position)(to present)[Reason for nomination as a candidate for Director and outline of expected role]
Mr. Masakazu Naitou has abundant experience and achievements in fields of corporate planning, business management,
corporate governance, and overseas strategies in addition to taking responsibility for the group company’s administrationand the operation of a overseas production subsidiary. Based on his insight and capabilities, the Company has judged that hewill be able to provide oversight of the management and has thus renominated him as a candidate for Director.
April 1983
Joined the Company
November 2009 Sano Plant Manager
June 2010
Operating Officer; Sano Plant Manager
January 2014
Operating Officer; PT.Teraoka Seisakusho Indonesia PresidentDirector
April 2015
Operating Officer; Deputy Executive General Manager, PTIDivision
11,885June 2016
Operating Officer;
sharesPresident-Director, PT.Teraoka Seisakusho Indonesia
April 2018
Operating Officer; Executive General Manager,Engineering[Reelection]
Division
June 2018
Director (current position); in charge of Engineering (current
Taiji Namekawa
position)(October 20, 1959)(to present)[Reason for nomination as a candidate for Director and outline of expected role]
Mr. Taiji Namekawa has a wealth of frontline-oriented experience and knowledge as well as advanced expertise gained
through engaging adhesive tape-related technology and production over the years and taking responsibility for the operationof a overseas production subsidiary in an effort to maintain a consistent production structure. Based on his insight andcapabilities, the Company has judged that he will be able to perform his duties through appropriate business judgement anddecision-making and provide objective oversight of the management and has thus renominated him as a candidate for
Director.

-8-

No.

Name

Past experience, positions, responsibilities
and significant concurrent positions(Date of birth)

Number ofshares of theCompany held

April 1980

5

6

Joined The Daiwa Bank, Limited (currently Resona Bank,
Limited)
October 2005
Joined the Company
April 2006
General Manager, Research Office
December 2013
Deputy Executive General Manager, Administrative
Division; General Manager, Research Office
April 2016
Deputy Executive General Manager, Administrative
Division; General Manager, General Affairs Department
June 2016
Operating Officer; Deputy Executive General Manager,
6,385
Administrative Division[Reelection]
sharesApril 2017
Operating Officer; General Manager, Administrative
Management OfficeNobuhisa Ishizaki
April
2018
Operating Officer: Executive General Manager,(January 4, 1956)
Administrative Division
June 2018
Director (current position); Executive General Manager,
Administrative Division (current position)
April 2021
General Manager, Safety, Health, and Hygiene Promotion
Office (current position)(to present)[Reason for nomination as a candidate for Director and outline of expected role]
Mr. Nobuhisa Ishizaki has abundant experience and achievements in the fields of business management and corporate
governance in addition to taking responsibility for the group company’s administration and internal auditing. In addition,
he contributes to strengthening the Company’s compliance structure as well as the operation and establishment of effective
corporate governance, and the Company considers that he will be able to contribute significantly to the enhancement of our
top-priority issue, internal management structure. Based on his insight and capabilities, the Company has judged that hewill be able to perform his duties through appropriate business judgement and decision-making and provide objective
oversight of the management and has thus renominated him as a candidate for Director.
April 1985
Joined ITOCHU Corporation
October 2013
Seconded to Guangzhou Gki Car Interior Parts Co.,Ltd.
(Director and General Manager)
April 2018
Seconded to the Company; Executive General Manager,
Sales Division
June 2018
Director (current position); Executive General Manager,
Sales Division (current position)
6,308
April 2020
Transferred to the Company
shares(to present)[Reelection]
Tatsuya Kubo
(November 7, 1961)[Reason for nomination as a candidate for Director and outline of expected role]
Mr. Tatsuya Kubo has a wealth of experience and achievements in the sales field in ITOCHU Corporation, as well as
insights on global business management cultivated while he engaged in corporate management in China. Based on his
insight and capabilities, the Company has judged that he will be able to perform his duties through appropriate businessjudgement and decision-making and provide objective oversight of the management and has thus renominated him as a
candidate for Director.

-9-

No.

Name
(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions
April 1992
April 2017
October 2017
April 2021

June 2021
7[Reelection]

Joined ITOCHU Corporation
Seconded to the Company
General Manager, Overseas Sales Division (current position)
Deputy Executive General Manager, Sales Division (current
position); Chairman, TERAOKA SEISAKUSHO (HONG
KONG) CO., LTD.(current position).; Chairman, TERAOKASEISAKUSHO (SHANGHAI) CO., LTD. (current position);
Chairman, TERAOKA SEISAKUSHO (SHENZHEN) CO.,LTD. (current position)
Director (current position)(to present)

Number ofshares of theCompany held

3,985
shares

Shinji Asakura(June 25, 1968)[Reason for nomination as a candidate for Director and outline of expected role]
Mr. Shinji Asakura has abundant experience and achievements in sales fields in ITOCHU Corporation, and, since his
temporary secondment in 2017, he has worked hard on the expansion of sales channels, etc. as the person responsible for theCompany’s overseas sales division. The Company has judged that he can be expected to offer proactive proposals andadvice to the Board of Directors for the Company’s further development of global markets and has thus renominated him asa candidate for Director.
April 1992
Joined ITOCHU Corporation
April 2020
General Manager, Industrial Textile & Lifestyle Department(current position)
June2020
Director of the Company (current position)(to present)0
shares8[Reelection][External]
Tatsuya Kamikawa(September 18, 1969)[Reason for nomination as a candidate for External Director and outline of expected role]
Mr. Tatsuya Kamikawa has abundant experience and achievements in sales fields in ITOCHU Corporation and is
expected to actively provide comments and advice from the perspective of promoting management reform at meetings of theBoard of Directors. In addition, the Company has judged that he is independent from the management team, that there is norisk of conflicts of interest with general shareholders, and that he will contribute significantly to strengthening the corporate
governance of the Company and has thus renominated him as a candidate for External Director.

- 10 -

No.

Name(Date of birth)

Past experience, positions, responsibilities
and significant concurrent positions
April 1984
May 2010
December 2010
April 2011

9

[Reelection][External][Independent]

October 2011
March 2013
April 2014
September 2017
June 2020

Joined Japan Airlines Co., Ltd.
Operating Officer; General Manager, Funding Center, JAL
Capital Co., Ltd.
General Manager, Financing and Lease Group, Finance
Department, Japan Airlines International Co., Ltd. underrehabilitation
General Manager, Insurance and Lease Group, Finance
Department, Japan Airlines Co., Ltd.
Retired from the company
Representative Director, Hakko Ltd. (current position)
Part-time Lecturer, Saitama Prefectural University
Part-time Lecturer, Toita Women’s College (current position)
Director, the Company (current position)(to present)

Number ofshares theCompany held0
sharesKeiko Hatta(September 13, 1959)

10[Reason for nomination as a candidate for External Director and outline of expected role]
Ms. Keiko Hatta has abundant experience and deep insights in the finance and accounting fields. In addition, by electing
her as Director, the Company can ensure the diversity of the members of the Board of Directors and may be expected toenhance the functions of the Board of Directors. In addition, she is independent from the management team, that there is norisk of conflicts of interest with general shareholders, and therefore the Company has judged that she will contributesignificantly to strengthening the corporate governance of the Company and has thus renominated her as a candidate forExternal Director.
April 1985
Joined NIPPON TELEGRAPH AND TELEPHONECORPORATION
November 1998
General Manager, Corporate Planning Department, LUCENT
Technologies
July 2000
Senior General Manager, Product Planning & Marketing
Department, LEVEL (3) Communications
January 2002
Vice President, REACH Networks
March 2003
Manager, PRTM Management Consulting
1,000
April 2007
Partner, PRTM Management Consulting
sharesJune 2008
Operating Officer and President, Verisign Japan K.K.
March 2009
President and Representative Director[Reelection]
August 2013
President and Managing Director, K.K. Box Japan (current[External]
position)[Independent]
November 2018
External Director, TeamSpirit Inc. (current position)
June 2021
Director of the Company (current position)
Katsunori Furuichi(to present)(May 11, 1961)[Reason for nomination as a candidate for External Director and outline of expected role]
Mr. Katsunori Furuichi has a wealth of management experience at other companies and is currently the President andManaging Director of K.K. Box Japan, giving him a thorough knowledge of information systems. For these reasons, theCompany has judged that he would provide appropriate advice in the strengthening of its information systems. Further, theCompany has judged that he is independent from the management team, that there is no risk of conflicts of interest withgeneral shareholders, and that he will contribute significantly to strengthening the corporate governance of the Company andhas thus renominated him as a candidate for External Director.

- 11 -

(Notes)
1. There are no special interests between the candidates and the Company.
2. The number of the Company’s shares each candidate holds includes shares in the shareholding association.
3. Mr. Tatsuya Kamikawa, Ms. Keiko Hatta and Mr. Katsunori Furuichi are candidates for External Director.
4. Mr. Shinji Asakura and Mr. Tatsuya Kamikawa are executives at ITOCHU Corporation, which has an important business
relationship with the Company (major trading partner).
5. The term of office of Mr. Tatsuya Kamikawa and Ms. Keiko Hatta as External Director of the Company shall be 2 years,
and that of Mr. Katsunori Furuichi shall be 1 year as of the conclusion of this Annual General Meeting of Shareholders.
6. The Company has registered Ms. Keiko Hatta and Mr. Katsunori Furuichi as independent external directors inaccordance with the rules and regulations of Tokyo Stock Exchange, Inc. If both are reappointed as Directors, they willcontinue to be independent external directors.
7. The Company has entered into a liability limitation agreement with External Directors, Mr. Tatsuya Kamikawa, Ms.
Keiko Hatta, and Mr. Katsunori Furuichi, pursuant to Article 427, Paragraph 1 of the Companies Act and our Articles ofIncorporation, to limit their liability to compensate for damages under Article 423, Paragraph 1 of the said Act to theminimum amount of liability set forth by Article 425, Paragraph 1 of the said Act. If each of them is reappointed, theCompany will continue the limited liability agreement.
8. The Company has entered into a directors and officers liability insurance contract with an insurance company. This
insurance policy will cover any losses or damage that the insured Directors would bear if they were to assume
liability for the performance of their duties or be subject to a claim for the pursuit of such liability. However, there
are grounds for exemptions. For example, losses or damage caused intentionally or with gross negligence will not
be covered. If each candidate assumes office as Director, each of them will be insured under the insurance contract,which is to be renewed during their terms of office- 12 -

Proposal 4:

Election of 1 Substitute Auditor

In order to prepare for the contingency in which the number of Auditors falls below that required by laws
and regulations, we propose the election of 1 Substitute External Auditor.
Furthermore, the effectiveness of the election in this proposal may be cancelled by resolution of the Boardof Directors, with the consent of the Board of Auditors, provided it is prior to candidate’s assumption of office.
The Board of Auditors has previously given its approval to this proposal.
The candidate for Substitute Auditor is as follows:
Name(Date of birth)

Past experience, positions,and significant concurrent positions
April 1991
April 2013
June 2016
April 2018
July 2018[External][Independent]
Masayuki Sugaya(March 7, 1969)

October 2020
January 2021
October 2021

Joined KANADEN CORPORATION
General Manager, Corporate Planning Department, Corporate
Strategy Office
General Manager, Corporate Planning Department, Corporate
Strategy Office; General Manager, Accounting Department,
Accounting and Finance Office
General Manager, Business Planning Department, Business
Promotion Office
General Manager, Accounting and Finance Department,
Administration Management Office
General Manager, Accounting and Finance Department
General Manager, Accounting Department (current position)
General Manager, Accounting Department; General Manager,
Export Management Department (current position)(to present)

Number ofshares of theCompany held0
shares[Reason for nomination as a candidate for Substitute External Auditor]
Mr. Masayuki Sugaya has engaged in the accounting duties at KANADEN CORPORATION after his involvement in thatcompany’s corporate planning. We believe that if appointed as External Auditor, he will be able to utilize his abundant experienceand wide-ranging insight in the auditing operations of the Company and supervise Directors’ execution of duties from an
objective and fair perspective and have thus renominated him as a candidate for Substitute External Auditor.
(Notes)1. There are no special interests between the candidate and the Company.
2. Mr. Masayuki Sugaya is a candidate for Substitute External Auditor.
3. If the election of Mr. Masayuki Sugaya is approved and he assumes his office, the Company intends to enter into a liability
limitation agreement with him, pursuant to Article 427, Paragraph 1 of the Companies Act and our Articles ofIncorporation, to limit his liability to compensate for damages under Article 423, Paragraph 1 of said Act to the minimum
amount of liability set forth by Article 425, Paragraph 1 of said Act.
4. If Mr. Masayuki Sugaya is appointed as Auditor, the Company intends to register him as an independent external auditor
with Tokyo Stock Exchange, Inc.
5. The Company has entered into a directors and officers liability insurance contract with an insurance company. This
insurance policy will cover any losses or damage that the insured Auditors would bear if they were to assume liability forthe performance of their duties or be subject to a claim for the pursuit of such liability. However, there are grounds for
exemptions. For example, losses or damage caused intentionally or with gross negligence will not be covered. If Mr.
Masayuki Sugaya assumes office as Auditor, he will become an insured person under the insurance policy.

- 13 -

[Evaluation of the Effectiveness of the Board of Directors]
1. Outline of Evaluation of the Effectiveness of the Board of Directors
Item

Description

TargetAll 10 Directors and all 4 Auditors in office in fiscal year 2021
Implementation of the following items by external attorneys who have secured
independence
Implementation(i) Implementing and analyzing questionnaires for all the targets
Method(ii) Implementing individual interviews(iii) Attendance at multiple meetings of the Board of Directors and confirmation of
the operation status
Questions concerning the following items
Detailsof (i) Composition of the Board of Directors
Questionnaire(ii) Operation of the Board of Directors
Questions Asked by (iii) Agenda for the Board of Directors meetings
External Attorneys(iv) Structure to support the Board of Directors(v) Other items
After a third-party evaluation was conducted by external attorneys based on thetarget’s questionnaire responses and interview responses, the results of the third-party
Evaluation Method
evaluation were analyzed and evaluated by the Board of Directors with reference tothe results of the said third-party evaluation.
2. Outline of Evaluation Results(1) General Comments
As a result of the evaluation by the Company’s Board of Directors, the Company confirmed that theeffectiveness of the Board of Directors is mostly ensured.
(2) Individual Evaluation by External Attorneys and the Company’s Views on the Evaluation(i) Composition of the Board of Directors
It was pointed out that, while 2 of all 10 Directors are Independent External Directors, it would bedesirable to have at least one-third of Directors be Independent External Directors. The Company
considers that the measure to increase the number of Independent External Directors to more than
one-third is a future issue.
(ii) Operation of the Board of Directors
Many officers commented that improvements had been made in summarizing, simplifying, andpaperless materials, as well as the change to a discussion-oriented Board of Directors meeting.
However, it was pointed out that further efforts are required to organize and rationalize the distributed
materials.
(iii) Agenda for the Board of Directors meetings(a) It was pointed out that there has been no discussion on the succession plan for the Representative
Director. Based on the principles of the Corporate Governance Code, the Company will proceedwith establishing of human resource requirements including election and dismissal criteria, aselection process that ensures objectivity, timeliness, and transparency, and a succession plan.
(b) It was pointed out that the Company should enhance the review and discussion of the progress of the
mid-term business plan. While the Company has previously managed the progress of the plan
including a one-year rolling review, from this fiscal year, the Company intends to conduct periodic
management reviews and activate discussions at the Board of Directors meetings.
(iv) System to support the Board of Directors
Many officers commented that the function of the Audit Office has improved, and it was pointed outthat further strengthening of the supervisory system is expected in the future.

- 14 -

Based on the results of this evaluation of the Board of Directors, the Company will continue its efforts tomaintain and improve the effectiveness of the Board of Director.

- 15 -