This is αn English trαnslαtion of the releαse issued in Jαpαnese.

March 31, 2023
For Immediate Release
Company name: Suminoe Textile Co., Ltd.
Representative: Teppei Nagata, President(Securities Code: 3501, Prime Market, TSE)
Contact: Hiroaki Usugi, Managing Director,General Manager, Corporate Planning Department(Telephone: +81-6-6251-6803)

Notice on Progress of the Plan for Compliance with Listing Maintenance Criteria
On December 21, 2021, Suminoe Textile Co., Ltd. (hereinafter, “the Company”) notified and disclosed the content ofits plan for compliance with the Continued Listing Criteria for the Prime Market. We hereby announce the progress statusof the plan as of December 31, 2022 as follows.

1.

Trend of the Company’s Progress Status on Compliance with the Continued Listing Criteria and the Period of the Plan
The Company’s status and the trend of compliance with the Continued Listing Criteria for the Prime Market as ofDecember 31, 2022 are described below. Regarding the “average trading value per day”, the standard was met as ofDecember 31, 2022, the calculation reference date, in accordance with the notice from the Tokyo Stock Exchange.
The Company will continue to take every possible measure to improve “Tradable share market capitalization” withthe aim of meeting the Continued Listing Criteria by May 31, 2024.

TheCompany’s
status andtrend ofcompliance

June 30, 2021*1(As of thetransitionreference date)
December 31,
2022*2

No. ofshareholders

No. of Tradable
SharesTradable Share MarketCapitalization

Tradable Share
Ratio

―

27,068 units

5.44 billion yen

35.2%―――

Listing maintenance criteria

800

Status of compliance and theperiod of the plan describedin the initial plan

Conformed

20,000 units

10 billion yen

Conformed

May 31, 2024―

Daily average tradingvalue

7 million yen

47 million yen

35%

Conformed

20 million yen

Conformed*1 The values representing the status of the Company’s compliance have been calculated based on TSE data concerning thedistribution status of the Company’s shares, etc. as of the reference date.
*2 This description is based on the notification from the Tokyo Stock Exchange concerning the state of compliance with thelisting maintenance criteria (trading volume standard) for the period January to December 2022.

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2.

Status and Evaluation of the Measures Taken for Compliance with the Continued Listing Criteria
In the “Plan for Compliance with Listing Maintenance Criteria for the New Market Segment (hereinafter, “the Plan”)”

announced on December 21, 2021, the Company established its basic policy to meet the Continued Listing Criteria for thePrime Market. The Company decided that the plan to achieve the Continued Listing Criteria for the Prime Market by May
31, 2024 has been progressing steadily, and believes that changes to the plan are unnecessary as of today.
In the Plan, the key issues were tradable share market capitalization and daily average trading value. According tothe notification received from the Tokyo Stock Exchange, the daily average trading value as of December 31, 2022 was inconformity with the standard. We will continue to strive not to go lower than the present level. Furthermore, for thepurpose of meeting the criterion for tradable share market capitalization, the Company will endeavor to improve corporate
value, enhance communication with investors, improve disclosure documents and corporate governance, and increase thenumber of tradable shares under the stock policy. The details of those measures are described below.
1)

Enhancing corporate value through strengthening existing businesses and aggressive capital investments and M&A
Based on the medium- to long-term management targets, “SUMINOE GROUP WAY 2022-2024-2027,” as thebasic policy, the Company implements measures to strengthen the existing businesses. In addition, the Company
endeavors to improve corporate value by aggressively making capital investments for the expansion of the existing
businesses and business scales, and engaging in M&A to increase synergies.
➢Growth strategy for existing businesses
Interior Fittings

Automotive Textiles

Traffic Facilities

Functional Materials・Increase product lineups and sales of environmentally conscious products.

・

Develop new products for housing.

・

Increase new customers.

・Enhance transmission and penetration of our brand image.

・

Strengthen directly operated EC business.

・Development and sales of environmentally conscious products

・

Development of interiors for next-generation vehicles

・

Cost reduction through the optimization of material procurement

・Horizontal development to overseas markets

・

Development of products for new parts, and those produced with less man-hours

・Development of fabric materials using new production methods

・

Development in line with the situation and challenges of each global base・

Increase order receipts for renovation and replacement works.

・

Develop and increase sales of new products.

・

Develop environmentally friendly fabrics.

・

Increase market shares.

・

Propose and receive orders for SUMICUBE® with a new tactile impression.

・Optimize the production and supply systems of textile-based electric heatingappliances.

・

Promote development of new applications of functional materials by using
processing technologies.

・

Increase sales of products made by functionally processing technologies, such as
deodorant treatment and anti-virus treatment.

・Promote commercialization of smart textiles.

・Cooperate with the development section and strengthen the capability ofdevelopment and sales.

2/4➢Environmental initiatives in our business and external evaluation
The Company has proactively implemented initiatives to contribute to the reduction of environmental
impact through our business since it established its philosophy of “KKR+A,” or Kenko (Health), Kankyo(Environment), Recycling and Amenity,” in 1998. In 2022, the Company established the “SecondSUMINOE Environmental Declaration – Under the Slogan of KKR+A,” setting a long-term target for thereduction of greenhouse gas (CO2) emissions. Based on this declaration, the Company will work to promote
its global strategies so that its products will be used by many more people and KKR+A will spreadworldwide.
Through our business, we will continue to ensure Responsible Production as a manufacturer to help
society achieve zero carbon emissions while striving to enhance corporate value and achieve sustainablegrowth.

➢Investment and capital policy
The Company plans to make investments totaling 10 billion yen over a three-year period from thefiscal year ended May 2022 to the fiscal year ending May 2024 for business expansion, core system
restructuring, and reorganization of factories. In the fiscal year ended May 2022, the Company spentapproximately 4.0 billion yen on capital investments. On May 31, 2022, the Company completed thereorganization of Nara Factory. As a result, we expect an improvement in productivity by disposing ofunnecessary production facilities and concentration, and improved supply chain efficiency by expanding
distribution warehouses and reducing external warehouse costs. In the fiscal year ending May 2023, theCompany plans to spend approximately 3.5 billion yen on capital expenditure in the restructuring ofmission-critical systems and the establishment of a new production line for synthetic leather at a Mexicansubsidiary.

➢M&AWe have been actively carrying out M&A. In 2020, we converted CPO Co., Ltd., a company withextensive knowledge of store designing and outstanding construction know-how, into a Group company inorder to expand our interior business and shift from offering only two-dimensional products such as curtains
and carpets to three-dimensional design of the entire space. The effect of such M&A has already beenobserved. Furthermore, in 2022, PRETERIOR-TEXTILE Inc., a company involved in the sale of interior
options centered on curtains, and Seki Textile Co., Ltd., a company that produces and sells jacquard clothand dobby moquette cloth, joined the SUMINOE GROUP.
Going forward, the Company will continue to engage in M&A, which contribute to the enhancementof business synergies, with the aim of expanding the Space Design Business, strengthening existing
businesses, and expanding the scale of our operations.

2)

Enhancing communication with investors through proactive investor relations activities
To date, we have implemented the following initiatives: Translating already-issued IR documents into
English; publishing chargeable analyst reports to provide information from an objective standpoint; increasing thenumber of one-on-one meetings with institutional investors; explaining our business to independent financial
advisors and other information providers who provide information to individual investors; and holding briefing
meetings for individual investors. Going forward, we will also strive to raise the Company’s stock price byincreasing the visibility and credibility of the Company both inside and outside Japan.

3)

Improvement of disclosure materials
In November 2022, we published an Integrated Report for the purpose of announcing what kind of value theGroup intends to create on a medium- to long-term basis and how we will implement initiatives for the improvementof corporate value. The company aims to obtain appropriate stock market evaluations by promoting understanding of
the Company’s businesses by further improving IR information.

3/44)

Improving corporate governance
The Company has been working on application of the Corporate Governance Code, centering on theprinciples applicable to companies listed on the Prime Market of the Tokyo Stock Exchange.
Supplementary principles
1-2 Ⅳ

Toward application

Companies listed on the Prime Market should makeAppliedan electronic voting platform available, at least to
institutional investors.
3-1 Ⅱ

Companies listed on the Prime Market should

We have already begun disclosing information indisclose and provide necessary information in theirEnglish, for example, through issuing an English

disclosure documents in English.

version of earnings briefings. We will disclose more
information in other documents in English.

3-1 Ⅲ

Companies listed on the Prime Market should

In 2022, the Company supported the TCFD

enhance the quality and quantity of disclosure

recommendations. Going forward, the Company willbased on the TCFD recommendations or an

disclose information in line with required disclosure

equivalent framework.

items by analyzing climate change risks and earnings
opportunities.

4-8

Companies listed on the Prime Market shouldApplied

appoint at least one-third of their directors (themajority of directors when necessary) as
independent outside directors.
4-10 Ⅰ

Companies listed on the Prime Market should

We established the nomination and remuneration

basically have the majority of the members of bothcommittees in July 2019, and they currently consist of

the nomination and remuneration committees be

two representative directors of the Company and three

independent outside directors, and should discloseoutside directors (two of whom are independent outside

the mandates and roles of the committees, as welldirectors). While aiming to have the majority of theas the policy regarding the independence of thecommittee members be independent outside directors,composition.

we will disclose the mandates and roles of thecommittees, as well as the policy regarding theindependence of the composition.

5)

Increasing the number of shares outstanding by taking appropriate measures
After the TSE primary determination date, the Company disposed of shares held by business corporations,etc., which had been excluded from tradable shares, through off-floor distribution and sale on the market, andintroduced a shareholder benefit program.
We will continue to carefully watch the direction of our corporate management. Based on that, we will
endeavor to achieve a tradable share ratio of 50% or more by reducing the shareholding ratio of some existing
shareholders, and consider a stock split to further raise stock liquidity.

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