These documents have been translated from Japanese originals for reference purposes only.
In the event of any discrepancy between these translated documents and the Japanese originals, the originals shall prevail. The
Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translations.

Securities Code 6409
June 1, 2021

To Shareholders with Voting Rights

Yoshio Kito
President & CEO

KITO CORPORATION

2000, Tsuijiarai, Showa-cho,
Nakakoma-gun, Yamanashi, Japan

Notice of the 77th Ordinary General Meeting of Shareholders
Dear Shareholders:
We are pleased to notify you of the 77th Ordinary General Meeting of Shareholders
of KITO CORPORATION (the “Company” or “KITO”), which is to be held according to
the following schedule.
Appropriate measures will be taken at the Meeting to prevent the spread of
COVID-19, as there are still concerns regarding its spread. From the perspective ofpreventing the spread of infection, we request all shareholders to consider notattending the Meeting in person. You may exercise your voting rights in advance inwriting or via the Internet, etc. Please review the attached Reference Materials for the
General Meeting of Shareholders and exercise your rights no later than 5:30 pm on
Monday, June 21, 2021 (JST), following “Guide to Exercise of Voting Rights” (pages 3 - 4).

Schedule
1. Date and Time:
2. Venue:
3. Agenda of the Meeting
Matters to be Reported:

Matters to be Resolved:

At 10:00 am on Tuesday, June 22, 2021 (JST) (Reception starts at 9:00 am)
Tower Hall, 49th floor of Roppongi Hills Mori Tower
6-10-1 Roppongi, Minato-ku, Tokyo
1. The Business Report, the Consolidated Financial Statements and theaudit results of the Consolidated Financial Statements by the
Accounting Auditor and Board of Corporate Auditors for the 77th
Term (from April 1, 2020 to March 31, 2021).
2. The Non-consolidated Financial Statements for the 77th Term (from
April 1, 2020 to March 31, 2021)
Proposal No. 1 Distribution of Surplus
Proposal No. 2

Election of Seven (7) Directors

Proposal No. 3

Election of One (1) Substitute Corporate Auditor

1Internet Disclosure
Any amendment to the Reference Materials for the General Meeting of Shareholders, Business		

Report, Consolidated Financial Statements, or Non-consolidated Financial Statements shall be
published on the Company’s website.
The Company’s website

https://kito.com/jp/
https://kito.com/

Measures for preventing the spread of infection
at the General Meeting of Shareholders◎

Alcohol-based hand sanitizers will be provided for shareholders at the General Meeting of
Shareholders venue. Those attending the Meeting are asked to bring and wear face masks. In
addition, please note that we will be scanning temperatures near the venue entrance. Your
understanding and cooperation are appreciated.

◎

Some of the Company officers may participate in the General Meeting of Shareholders online.

◎

The staff operating the General Meeting of Shareholders will be wearing face masks, inaddition to checking physical conditions including taking temperatures.

◎

Depending on the status of the spread of COVID-19, it may be necessary to change the venue
or starting time. In this event, we will post details to the Company’s website on the Internet(see above). Shareholders planning to attend the Meeting are asked to check the Company’s
website in advance.

◎

Gifts will not be given out to shareholders. The get-together with shareholders will not beheld following the General Meeting of Shareholders.

Live streaming via the Internet		

In order to prevent the spread of COVID-19, the General Meeting of Shareholders will be
streamed live from our website. (“Information on Live Streaming via the Internet” pages 5 to
6). Although due care will be taken with respect to the portrait rights and privacy ofshareholders in attendance when streaming the meeting from the back of the venue, please
note that shareholders attending the meeting may be visible in the stream under unavoidable
circumstances.

2

Guide to Exercise of Voting Rights
Please review the Reference Materials for the General Meeting of Shareholders (page 7-24) andexercise your voting rights.
You can exercise your voting rights by any of the following three methods.

A

TYPE

Attending the General
Meeting of Shareholders

B

TYPE

Exercising voting
rights in writing

C

TYPE

Exercising voting rights
via the Internet, etc.

Please submit the enclosed Voting
Rights Exercise Form at the reception.
Also, please bring this Notice of the77th Ordinary General Meeting of
Shareholders.

Please indicate your approval ordisapproval of each of the proposals
on the enclosed Voting Rights Exercise
Form and return the form before thedeadline.

Please indicate your approval or disapprovalof each of the proposals, in accordance with
the instructions on the following page.

Date of the General Meeting of
Shareholders

Deadline

Deadline

10:00 am on Tuesday,June 22, 2021 (JST)

Attendance of proxies

5:30 pm on Monday,
June 21, 2021 (JST)Please see the following page for details.

5:30 pm on Monday,
June 21, 2021 (JST)(1) Please note that those other than shareholders with voting rights, such as proxies who are not shareholders
or companions, will not be able to enter the venue.
(2) If a proxy is attending the meeting, a document proving the proxy rights shall be required in addition to the
Voting Rights Exercise Form. Exercise of voting rights by proxy shall be limited to one another shareholder
who holds voting rights at the Company.

Handling of Voting Rights Exercised in Writing

When you exercise your voting rights in writing, if you do not indicate approval or disapproval of a proposal, it
shall be considered that you have indicated approval.

Multiple Exercise of Voting Rights(1) If you have exercised your voting rights more than once, such as both in writing and via the Internet, etc., theexercise of the voting rights via the Internet, etc., shall be treated as effective.
(2) If you have exercised your voting rights more than once via the Internet, etc., the final exercise of the voting
rights shall be treated as effective.
For inquiries on other stock related business (change in address, number of shares held, etc.) please contact below.
(1) For shareholders with an account at a securities Company
		 Please contact your securities company.
(2) For those who do not have an account at a securities company (shareholders with special account)

		 Stock Transfer Agency Department, Sumitomo Mitsui Trust Bank, Limited
Toll free:

0120-782-031 (Excluding weekends and holidays)(Open from 9 am to 5 pm)

3voting rights Deadline
C Exercising
5:30 pm on Monday, June 21, 2021 (JST)via the Internet, etc.

TYPE

Exercising voting rights using“Smart Exercise”

Exercising voting rights by “entering yourvoting rights exercise code and password”

1

1

Voting rights can be exercised via
the Internet using your computer,smartphone, or mobile phone only
by using our designated website forthe exercise of voting rights(https://www.web54.net).

2

Enter the “voting rights exercise code” printed
on the Voting Rights Exercise Form.

You can easily exercise your voting rights without
the need to enter voting rights exercise code andpassword, by scanning the QR code at the bottom
right corner of the Voting Rights Exercise Form.

Note

2

Enter the “voting
rights exercise code”

To change your vote after exercising
your voting rights, you must scan the QR
code again and enter the “voting rights
exercise code” and “password” printed
on the Voting Rights Exercise Form.

Follow the instructions shown on-screen andindicate your approval or disapproval for each item.

Click “Login”

3

Enter the “password” printed on the Voting
Rights Exercise Form.

Enter the“password”

Please refer to theenclosed leaflet
for information
regarding the useof “Smart
Exercise.”

Click “Next”

4
If you are unclear how to exercise your voting rights
via the Internet using your computer, smartphone, ormobile phone, contact the number shown at right.

Follow the instructions shown on-screen andindicate your approval or disapproval for each item.

Stock Transfer Agency Web Support Help Line,
Sumitomo Mitsui Trust Bank, Limited* “QR code” is a registered trademark of DENSO WAVE INCORPORATED.

Toll free:

0120-652-031(Open from 9 am to 9 pm)*	If you have made prior application to use the platform for the electronic exercise of voting rights
operated by ICJ, Inc., you can use the platform to exercise voting rights.

4

Information on Live Streaming via the Internet

In order to prevent the spread of COVID-19 infections, the 77th Ordinary General Meeting of
Shareholders will be streamed live from our website.
[Information for shareholders attending the General Meeting of Shareholders in person]
As indicated below, the General Meeting of Shareholders will be streamed live. Although due
care will be taken with respect to the portrait rights and privacy of shareholders in attendance
when streaming the meeting from the back of the venue, please note that shareholders attending
the meeting may be visible in the stream under unavoidable circumstances.

1. Streaming date and time
Tuesday, June 22, 2021, from 10:00 a.m. until the Meeting ends
* The live streaming website will be accessible from 9:30 a.m., 30 minutes before the meeting
begins.
2. How to view the streamed Meeting(1) Access the following website from your computer, smartphone, or other device.

Streaming website URL

https://www.cmstream.com/77kito(2) After accessing the streaming website, follow the instructions shown onscreen and enter thefollowing ID.
ID<How to log in>Enter “” as the ID, then click “View live stream screen.”53. Important notes regarding viewing the streamed Meeting(1) The live stream of the Meeting is not considered the site of the General Meeting of Shareholders
under the Companies Act. Thus, shareholders viewing the live stream will not be able to makeany comments or ask any questions. Please exercise your voting rights in advance in writing or
via the Internet, as indicated on pages 3 to 4.
(2) Shareholders will be responsible for bearing all expenses involved in accessing our website andviewing the streamed Meeting (internet connection charges, transmission fees, etc.).
(3) While every effort will be made to ensure that the Meeting is streamed smoothly, please notethat there may be video or audio issues or delays as well as interruptions, in the event of system
failures, communications problems, issues that negatively affect the communication environment,or other factors. Streaming of the Meeting may also become impossible. If we decide to cancel
the streaming of the Meeting due to unavoidable circumstances, we will provide notice on our
website (https://kito.com/jp).
(4) Some shareholders may be unable to view the streamed Meeting depending on their devices
and network environments. Please perform a stream viewing test as described below. Please
note that we do not guarantee that shareholders will be able to view the streamed Meeting inevery environment.
(5) Please note that the Company will not bear any responsibility for any adverse effects that occur
to shareholders as the result of being unable to view the streamed Meeting, in whole or in part.
(6) The filming, video recording, audio recording, saving, and public releasing of the streamed
Meeting such as posting to social media, are strictly prohibited.
4. How to perform a stream viewing test
The following stream viewing environment test website is available for shareholders until 9:30
am, Tuesday, June 22, 2021, to test their stream viewing environment by entering the ID as
provided in “2. How to view the streamed Meeting.”
Stream viewing environment test
website URL

https://www.cmstream.com/test77kito

5. Inquiries regarding streaming
Please direct technical inquiries regarding network environments, etc., to the inquiry point
below.
IR Partners. Inc.
KITO General Meeting of
Shareholders Streaming Manager
Reception hours

03-3221-1347
Monday to Friday
9:30 a.m. to 5:00 p.m.

(Note) On the date of the General Meeting of Shareholders, reception hours will end at theend of the Meeting.

6Reference Materials for the General Meeting of Shareholders
Proposals and References
Proposal No. 1:

Distribution of Surplus

The Company believes it is important to secure sufficient retained earnings to reinforce themanagement basis and prepare for future business development, in addition to appropriately
returning profits to shareholders commensurate with the Company’s performance.
Under this policy, the Company is striving to increase the dividend payment, targeting a
consolidated payout ratio of 20% or higher, subject to the overall consideration of its consolidated
results and financial position. In comprehensive consideration of the Company’s consolidated results
and financial position for the year ended March 31, 2021, the Company hereby proposes toincrease its year-end dividend amount by 6 yen per share for the year ended March 31, 2021 asfollows, in accordance with “Upward Revisions to the Consolidated Business Forecasts and Dividend
Forecast” issued by the Company on March 24, 2021.

1. Form of dividend property
Cash

2. Matters concerning allotment of dividend property and total amount18 yen per share of the Company’s common stock
Total dividend: 369,355,914 yen

3. Effective date of the distribution of surplus
June 23, 2021

7

Proposal No. 2:

Election of Seven (7) Directors

The terms of office of all seven (7) Directors will expire at the conclusion of this General
Meeting of Shareholders. Accordingly, the election of seven (7) Directors is proposed.
The candidates for Director are as follows:
Term ofofficeGenderSignificant
concurrent
positions

Affiliation

Attendance atboard
meetings

1

Yoshio Kito

29 yearsMale

2

Inside100%(14 out of 14
meetings)

2

Edward W. Hunter5 years
Male

2

Inside100%(14 out of 14
meetings)

3

Tsuneo Yuzurihara

11 years
Male

1

Inside100%(14 out of 14
meetings)

4

Shigeki Osozawa(Age: 58)

7 years
Male

2

Inside100%(14 out of 14
meetings)

5

Katsumi Nakamura(Age: 67)

5 yearsMale

2

OutsideIndependent
director100%(14 out of 14
meetings)

6

Takashi Hirai

4 yearsMale

3

OutsideIndependent
director100%(14 out of 14
meetings)

7

Koji Osawa

2 yearMale

2

OutsideIndependent
director100%(14 out of 14
meetings)

Candidate
NumberName(Age: 58)

(Age: 55)

(Age: 63)

(Age: 56)

(Age: 59)8

Candidate
Number1

Yoshio Kito June 4, 1963 (Age: 58) Term of office 29 years

MaleRe-election

InsidePersonal history, positions, responsibilities
and significant concurrent positions

November 1988 Joined the Company
June 1992
Director
Managing Director
June 1998
April 1999
Senior Managing Director
Senior Managing Director, Senior Managing Executive Officer
July 2000
April 2005
Vice President & Representative Director, Vice President
Executive Officer
January 2006 President & Representative Director, President Executive Officer,
Chief Executive Officer
November 2011 President & CEO, President Executive Officer and General
Manager of Domestic Sales Division
President & CEO, President Executive Officer, Chief ProductApril 2016
Officer (to present)[Significant concurrent positions]

KITO Americas, Inc. / Director
JIANGYIN KITO CRANE CO., LTD. / Chairman

Number of shares of the Company held
176,603 shares
Attendance at board meetings
14 out of 14 meetings

Reasons for the election:

Mr. Yoshio Kito, since becoming President & CEO of the Company in January 2006, has displayed leadership centeringon aiming to increase corporate value and realize the corporate mission. He has achieved results including overseas
business expansion, new product development, and execution of M&As, and is fulfilling his duties as CEO.
He is nominated as a candidate for Director as his experience and track record of leading the Group’s management, as
well as his extensive insight regarding its businesses, are deemed essential for strengthening the management of theGroup and for its sustainable growth.

Message to our shareholders:

The demands of society placed on companies have changed rapidly with SDGs gaining momentum. Amid suchchanges, we will strive to achieve further growth and increased corporate value by continuing to pursue the universal
value of creating safe and highly efficient workplace environments. Due in part to the COVID-19 crisis, we wereconfronted with a sudden and unavoidable contraction of demand especially during the first half of the previous
fiscal year, but demand gradually recovered during the second half of the year. While the outlook remains uncertain,
we intend to respond to changes in the market in anticipation of the post COVID-19 period, and continue toreinforce our business foundation while taking advantage of growth opportunities.

9Candidate
Number

2

Edward W. Hunter July 3, 1965 (Age: 55) Term of office 5 years

MaleRe-election

InsidePersonal history, positions, responsibilities
and significant concurrent positions
May 2004
April 2008
April 2011

April 2013

April 2016
June 2016

Joined Harrington Hoists, Inc. / President & Director
Joined the Company / Executive Officer, KITO Americas, Inc. /President & Director and Harrington Hoists, Inc. / President &Director
Senior Executive Officer, Head of Americas Business Operation,
General Manager of Business Division - Americas, KITO
Americas, Inc. / President & Director and Harrington Hoists, Inc.
/ President & Director
Senior Executive Officer, Head of Americas & EMEA Business
Operation, General Manager of Business Division - Americas &EMEA, KITO Americas, Inc. / President & Director and Harrington
Hoists, Inc. / President & Director
Executive Vice President, Co-Chief Market Officer
Executive Vice President, Executive Vice President Officer and
Co-Chief Market Officer (to present)[Significant concurrent positions]
KITO Americas, Inc. / Chairman
ERIKKILA OY / Director

Number of shares of the Company held
54,648 shares
Attendance at board meetings
14 out of 14 meetings

Reasons for the election:

Since joining the group company of the Company in May 2004, Mr. Edward W. Hunter has promoted businessexpansion of the Americas Business focused on the United States and contributed to improvements of corporate valueof the Company.
He is nominated as a candidate for Director as his abilities continue to be deemed necessary to achieve further growthof the Company as a global entity by strengthening business in the Americas, which is expected to continue to see
growth, and actively conducting business and promoting product strategies in major global markets such as Europe.

Message to our shareholders:

In 2020 our societies, our governments, our families, and KITO Corporation itself faced a threat not seen ingenerations. SARS CoV 2 (COVID 19) changed the shape of our global business, but it did not change the corestrength of KITO. During the pandemic KITO was in a unique position because we are considered a critical supplierof infrastructure. KITO products support the production of pharmaceuticals, agriculture and food, energy, paper
products, and transportation. Because of our unique niche in the global supply chain of life sustaining products andservices, we were able to maintain production, though with great operational modifications to protect our team. As afellow shareholder and an executive within KITO, I witnessed how the strength of our relationships with customers,
the high quality of our products, and the creativity and spirit of our KITO team members helped KITO survive theglobal downturn and position our business for the future. Our teams around the world will now build on theefficiency and market share gains we made during the crisis and we are excited about the possibility of delivering
better service and economic returns as the crisis eases. Thank you, as always, for your continued support.

10

Candidate
Number3

Tsuneo Yuzurihara December 26, 1957 (Age: 63) Term of office 11 years

MaleRe-election

InsidePersonal history, positions, responsibilities
and significant concurrent positions
April 1980
April 2007

Number of shares of the Company held
37,093 shares
Attendance at board meetings
14 out of 14 meetings

Joined the Company
Executive Officer, Deputy General Manager of Development & Technology
Division
April 2009
Executive Officer, General Manager of Development & Technology Division
April 2010
Executive Officer, General Manager of Development & Technology Division
and General Manager of Manufacturing Division
Director, Executive Officer, General Manager of Development &June 2010
Technology Division and General Manager of Manufacturing Division
April 2011
Managing Director, Senior Executive Officer, Head of Global Manufacturing,
Quality Assurance, Development & Technology Division and General
Manager of Development & Technology Division
April 2013
Managing Director, Senior Executive Officer, Head of Global Manufacturing,
Quality Assurance, Development & Technology Division and General
Manager of Procurement DivisionDecember 2013 Managing Director, Senior Executive Officer, Head of Global Manufacturing,
Quality Assurance, General Manager of Development & Technology
Division and General Manager of Procurement Division
April 2015
Managing Director, Senior Executive Officer, Head of Global Manufacturing,
Quality Assurance, General Manager of Development & Technology
Division and General Manager of Procurement Division
April 2016
Managing Director, Senior Executive Officer, Chief Quality Officer andGeneral Manager of Quality Assurance Division
April 2017Managing Director, Senior Executive Officer, Chief Quality Officer, Chief
Manufacturing Officer, General Manager of Quality Assurance Division andGeneral Manager of Procurement Division
April 2018
Managing Director, Senior Executive Officer, Chief Quality Officer, Chief
Manufacturing Officer and Head/General Manager of Quality Assurance
Division (to present)[Significant concurrent positions]
KITO HOIST THAI CO., LTD. / Director

Reasons for the election:

Since becoming Director of the Company in June 2010, Mr. Tsuneo Yuzurihara has fulfilled his duties as Director, withachievements in creating new frameworks including overseas development in development, manufacturing,procurement, and quality assurance.
He is nominated as a candidate for Director as his ability and experience continue to be deemed necessary for theCompany to maintain the high level of quality of its products while promoting global production strategies.

Message to our shareholders:

The domestic and international situation remains chaotic due to various factors in addition to the COVID-19 crisis,
and there are concerns about how this will affect KITO’s business. Even under such circumstances, we remain
dedicated to sustainability management, and plan to continuously take on short- to medium- and long-term issues.
We will thoroughly disseminate KITO quality, KITO’s core value, throughout all Group companies, and engage inproduction and quality activities that improve customer loyalty. Through these efforts, we will further increase ourcorporate value and earn the long-term trust of society.

11Candidate
Number4

Shigeki Osozawa October 12, 1962 (Age: 58) Term of office 7 years

MaleRe-election

InsidePersonal history, positions, responsibilities
and significant concurrent positions
April 1985
July 2008
April 2011
April 2012

Number of shares of the Company held
39,493 shares
Attendance at board meetings
14 out of 14 meetings

Joined the Company
Senior Manager of Corporate Planning Department
Executive Officer, General Manager of Corporate Planning Office
Executive Officer, General Manager of Corporate Planning Officeand General Manager of Corporate Management Division
June 2012
Director, Executive Officer, General Manager of Corporate
Planning Office and General Manager of Corporate Management
Division
Director, Executive Officer, General Manager of Corporate
April 2016
Management Division and Senior Manager of Legal Affairs Office
June 2016Retired from the position of Director
Executive Officer, General Manager of Corporate Management
Division and Senior Manager of Legal Affairs Office
April 2017
Senior Executive Officer, Chief Financial Officer, General Manager
of Financial Management Division and Business Strategy Division
October 2017 Senior Executive Officer, Chief Financial Officer and General
Manager of Financial Management Division
June 2018
Managing Director, Senior Executive Officer, Chief Financial
Officer and General Manager of Financial Management Division
July 2018
Managing Director, Senior Executive Officer, Chief Financial
Officer, General Manager of Corporate Management Division
and General Manager of Financial Management Division (topresent)[Significant concurrent positions]JIANGYIN KITO CRANE CO., LTD. / Director
KITO HOISTS & CRANES ASIA PTE. LTD. / Director

Reasons for the election:

Since becoming Managing Director of the Company in June 2018, Mr. Shigeki Osozawa has achieved results in the areasof corporate planning, business strategy, and finance, etc., and has contributed to increasing the Company’s businessperformance.
He is nominated as a candidate for Director as his abilities and experience are deemed necessary for the developmentof the Group based on a healthy governance system with this support from a financial and corporate management
perspective for global development and sustainable corporate value improvement.

Message to our shareholders:

The global COVID-19 pandemic has posed questions regarding the significance of our Company and its contributions
to global environmental problems, which are inextricably linked to harmonious coexistence with nature, and tosolving the various problems faced by society.
The Company seeks to deliver satisfaction and inspiration to our customers through our business activities that offer
freedom from the constraints of gravity. Through this, we will continue to earn the trust of our customers, pursue
long-term and social profit, and seek steady growth.

12

Candidate
Number5

Katsumi Nakamura June 23, 1953 (Age: 67) Term of office 5 years

MaleRe-election

OutsideIndependent director

Personal history, positions, responsibilities
and significant concurrent positions
April 1978
January 2000
April 2001
July 2003
May 2008
June 2009
June 2013

Joined Nissan Motor Co., Ltd.
Director of Program Management officeSenior Executive Officer
President of Dongfeng Motor Company Limited
EVP of Renault S.A.S.
EVP of Renault S.A.S. and Director of Nissan Motor Co., Ltd.
Chairman & Director of Calsonic Kansei Corporation (currently
Marelli Corporation)
June 2015
Outside Director of Inabata & Co., Ltd.
June 2016
Chairman of Calsonic Kansei Corporation (currently Marelli
Corporation),
Outside Director and Member of the Audit and Supervisory
Committee of Kansai Airports (to present) and Director of theCompany (to present)
January 2019 Senior Advisor of The Black Stone Group L.P. (to present)[Significant concurrent positions]
Number of shares of the Company held
400 shares

Kansai Airports / Outside Director, Member of the Audit and Supervisory
Committee
The Black Stone Group L.P. / Senior Advisor

Attendance at board meetings

14 out of 14 meetings

Reasons for the election and overview of expected roles:

Mr. Katsumi Nakamura has many years of experience as an executive and technician in the automobile industry, which
is one of Japan’s core industries.
The Company expects him to continue to leverage his abundant business management knowledge and manufacturingexperience in order to provide the Company with appropriate advice and recommendations from a global management
perspective, and to oversee management from an independent and objective perspective. For these reasons, he is again
nominated as a candidate for Outside Director.

Message to our shareholders:I have been involved in the automobile industry through my positions in Nissan Motor and France-based Renault. The
automobile industry has already undergone globalization, and a massive once-in-a-century wave of transformation isapproaching. I hope that I can use the knowledge accumulated by having been involved in business management in
the globalization of the automobile industry, to support KITO’s future global growth and transformation. I feel that
KITO’s manufacturing strengths and its people have great potential. For KITO to grow globally, it will need toincrease its manufacturing competitiveness, organize and prioritize the wide-ranging challenges it must face in orderto grow, and move steadily forward in tackling these challenges. I am looking forward to supporting KITO in its
efforts to take on these challenges.

13Candidate
Number6

Takashi Hirai February 24, 1965 (Age: 56) Term of office 4 years

MaleRe-election

OutsideIndependent director

Personal history, positions, responsibilities
and significant concurrent positions
April 1989
July 1997
March 2000

Joined Bain & Company Japan, Inc. / Senior Consultant
Dell Japan Inc. / Director of Relationship Marketing
Crayfish Co., Ltd. (currently e-machitown Co., Ltd.) / Director &Chief Marketing Officer
April 2001
Starbucks Coffee Japan, Ltd. / Head of Corporate Planning
Division / Officer
September 2003 Executive Officer, Senior Partner of Roland Berger Ltd.
September 2014 Visiting Professor of Graduate School of Business Administration,
Keio University
Visiting Professor of Graduate School of Business and Finance,
April 2015
Waseda University (to present)
March 2017 Professor of Graduate School of Business Sciences, MBA Programin International Business, University of Tsukuba (to present)
June 2017
Director of the Company (to present)
June 2019
Outside Director of MITSUI-SOKO HOLDINGS Co., Ltd. (topresent)[Significant concurrent positions]
Number of shares of the Company held
7,500 shares
Attendance at board meetings
14 out of 14 meetings

University of Tsukuba / Professor of Graduate School of Business Sciences, MBA
Program in International Business
Waseda University / Visiting Professor of Graduate School of Business andFinance
Outside Director / MITSUI-SOKO HOLDINGS Co., Ltd.

Reasons for the election and overview of expected roles:

Mr. Takashi Hirai has many years of experience working as a consultant in a consulting firm operating internationally andexperience as an executive in business companies in Japan and the United States, in addition to experience indevelopment of global human resources at a graduate school of corporate management.
The Company expects him to continue to provide appropriate advice and recommendations regarding the formulationof corporate strategies, and to oversee management from an independent and objective perspective. For these reasons,he is again nominated as a candidate for Outside Director.

Message to our shareholders:

Although vaccination levels are rising, the threat of COVID-19 has yet to subside both globally and domestically. This
uncertain business environment is expected to continue. However, KITO is using the hardships it has encountered asa driving force and is steadily advancing its business, which supports the infrastructure of society and the economy.
As an Outside Director, I will make the best use of my experience as a strategic consultant, my practical businessexperience, and my knowledge of the latest business theories, to help achieve KITO’s growth strategies and enhance
our operation strengths.

14

Candidate
Number7

Koji Osawa October 9, 1961 (Age: 59) Term of office 2 years

MaleRe-election

OutsideIndependent director

Personal history, positions, responsibilities
and significant concurrent positions

April 1985
Joined Mitsubishi Corporation
October 1993 Palo Alto Office, Mitsubishi International Corporation
March 1999 Returned to Mitsubishi Corporation
May 1999
Retired from Mitsubishi Corporation
July 1999
Global Catalyst Partners L.P. / Managing Principal & Co-Founder(to present)
August 2014 Global Catalyst Partners Japan / Managing Director & CoFounder (to present)
June 2019
Director of the Company (to present)[Significant concurrent positions]Global Catalyst Partners L.P. / Managing Principal & Co-Founder
Global Catalyst Partners Japan / Managing Director & Co-FounderNumber of shares of the Company held
5,700 shares
Attendance at board meetings
14 out of 14 meetings

Reasons for the election and overview of expected roles:

Mr. Koji Osawa, after working at a general trading company, was engaged in venture capital fund management for many
years in Silicon Valley.
As a fund manager, he has experience with discovering and developing new businesses, as well as with objectively
evaluating and overseeing businesses. Furthermore, he is deeply knowledgeable with regard to cutting-edge
technologies such as IoT. The Company expects him to continue to provide appropriate advice and recommendations
that contribute to the development of the Company’s business and the acquisition of cutting-edge technologies, and tooversee management from an independent and objective perspective. For these reasons, he is again nominated as a
candidate for Outside Director.

Message to our shareholders:

I lived in Silicon Valley, U.S., for 23 years starting in 1993, and for 17 of those years I was engaged in investing in anddeveloping numerous global venture companies through a venture capital fund that I founded myself. In anticipationof the new normal in the post COVID-19 era, I will do my utmost to use my accumulated experience and knowledge
to support KITO as it aims to develop further by reinforcing its management foundation, advancing its global
operations, and formulating growth strategies.

15

(Notes) 1.

2.
		
3.
4.
		
		
		
5.
		

6.
		

The Company has business transactions including product sales with JIANGYIN KITO
CRANE CO., LTD., at which Mr. Yoshio Kito serves as Chairman and Mr. Shigeki
Osozawa serves as Director. No conflict of interest exists between the Company andthe other candidates.
Messrs. Katsumi Nakamura, Takashi Hirai and Koji Osawa are candidates for Outside
Directors.
The Company has designated Messrs. Katsumi Nakamura, Takashi Hirai and Koji Osawa
as independent directors and notified the Tokyo Stock Exchange.
Messrs. Katsumi Nakamura, Takashi Hirai and Koji Osawa do not have the applicableattributes for reporting in the notification form for independent directors stipulated by
the Tokyo Stock Exchange.
Number of years of service since the candidates were first appointed as Outside
Directors1)	Mr. Katsumi Nakamura’s term of office as an Outside Director, as of the conclusionof this General Meeting of Shareholders, is 5 years.
2)	Mr. Takashi Hirai’s term of office as an Outside Director, as of the conclusion of this
General Meeting of Shareholders, is 4 years.
3)	Mr. Koji Osawa’s term of office as an Outside Director, as of the conclusion of this
General Meeting of Shareholders, is 2 years.
Liability limitation agreement with the candidates
Pursuant to Article 427, Paragraph 1 of the Companies Act, the Company has
concluded agreements with Messrs. Katsumi Nakamura, Takashi Hirai and Koji Osawa
limiting their liability for damages under Article 423, Paragraph 1 of the same Act. The
maximum amount of liability under those agreements is the total of the amounts
specified in each item of Article 425, Paragraph 1 of the Companies Act, and if the reelection of Messrs. Katsumi Nakamura, Takashi Hirai and Koji Osawa is approved, theCompany plans to continue those agreements with them.
Directors and Officers liability insurance contract
The Company has entered into a Directors and Officers liability insurance contract withan insurance company that insures all Directors. In the event of a claim for damages
submitted by a shareholder or a third party, etc., the said insurance contract shallcompensate for damages including compensation for damages and legal expenses tobe borne by the insureds. However, the above insurance policy does not apply tocompensation for damages arising from the insureds’ unlawful gain or benefit. The
Company bears the entire premium for the insured parties. If the candidates areappointed as Directors, each of them will be insured under the insurance contract.
Furthermore, the Company plans to renew this insurance contract with equivalentdetails while the Directors are in office, after deliberation by the Board of Directors.

16

Proposal No. 3:

Election of One (1) Substitute Corporate Auditor

In order to prevent the number of Corporate Auditors from falling below the legally stipulated
number, the election of one (1) Substitute Outside Corporate Auditor is proposed. With regard to
the effectiveness of this proposal, appointment may only be cancelled before the appointment by
a resolution of the Board of Directors with the agreement of the Board of Corporate Auditors.
The Board of Corporate Auditors has given its consent to this proposal. The candidate
for Substitute Corporate Auditor is as follows:

Masahide Kamachi May 18, 1981 (Age: 40)

Male

OutsideIndependent corporate auditor

Personal history, positions,and significant concurrent positions

Number of shares of the Company held
— shares

November 2005 Joined Chuo Aoyama Tax Accountants (currently PwC Tax
Japan)
September 2009 Registered as a Certified Public Accountant
December 2014 Registered as a Certified Tax Accountant
November 2016 Established Kamachi Certified Public Accountants Office, Partner(to present)
Managing Partner of Kamachi Certified Tax Accountants Office(to present)
Outside Director of SOU Inc. (currently Valuence Holdings Inc.)
January 2017 Representative Director of WILL CONSULTING (to present)
March 2017 Outside Member of the Audit and Supervisory Board of Medley
Inc. (to present)
May 2017
Outside Member of the Audit and Supervisory Board of CHIBO
Corporation
September 2018 Outside Director of CHIBO Holdings Co., Ltd. (to present)
November 2019 Outside Director and Member of the Audit & Supervisory
Committee of Valuence Holdings Inc. (to present)
Outside Director of SOU Technologies Inc. (currently Valuence
Technologies Inc.) (to present)
April 2020
Full-time Associate Professor at Graduate School ofManagement, Globis University (to present)[Significant concurrent positions]

Partner / Kamachi Certified Public Accountants Office
Managing Partner / Kamachi Certified Tax Accountants Office
Representative Director / WILL CONSULTING
Outside Member of the Audit and Supervisory Board / Medley, Inc.
Outside Director / CHIBO Holdings Co., Ltd.
Outside Director and Member of the Audit & Supervisory Committee / Valuence Holdings Inc.
Outside Director / Valuence Technologies Inc.
Full-time Associate Professor / Graduate School of Management, Globis University

Reasons for the election:

Mr. Masahide Kamachi has broad-ranging expert knowledge regarding finance and accounting as a certified public
accountant. He has also been involved in the management of several companies as an outside director. He is nominatedas a candidate for Substitute Corporate Auditor, as his extensive experience is deemed necessary for the Company’s fairand objective decision-making and oversight of business execution status.

17

(Notes) 1.
2.
3.

4.

5.

Mr. Masahide Kamachi is a candidate for Substitute Outside Corporate Auditor.
No conflict of interest exists between the candidate and the Company.
In the event there is a vacancy in the position of Corporate Auditor and Mr. Masahide
Kamachi is appointed, pursuant to Article 427, Paragraph 1 of the Companies Act, theCompany will conclude an agreement that limits his liability for damages under Article
42, Paragraph 1 of the same Act. The maximum amount of liability under the agreement
is the total of the amounts specified in each item of Article 425, Paragraph 1 of theCompanies Act.
The Company has entered into a Directors and Officers liability insurance contract withan insurance company. In the event of a claim for damages submitted by a shareholder
or a third party, etc., the said insurance contract shall compensate for damages
including compensation for damages and legal expenses to be borne by the insureds.
However, the above insurance policy does not apply to compensation for damages
arising from the insureds’ unlawful gain or benefit. The Company bears the entire
premium for the insured parties. If Mr. Masahide Kamachi is appointed as Corporate
Auditor, he will be insured under the insurance contract. Furthermore, the Company
plans to renew this insurance contract with equivalent details while Corporate Auditors
are in office, after deliberation by the Board of Directors.
If this proposal is approved and in the event Mr. Masahide Kamachi is appointed as a
Corporate Auditor, the Company plans to notify the Tokyo Stock Exchange that he is anindependent officer as stipulated by the Tokyo Stock Exchange.

18

Reference information related to the exercise of voting rights
Basic Principles System of Corporate Governance
The Company will, with the aim of achieving sustainable growth and improvement of corporate value on a
medium to long-term basis, make efforts to enhance corporate governance in accordance with the basic
concepts described below based on the belief that the essence of corporate governance lies in increasing the
dynamism of management by securing the transparency and fairness thereof and making management decisions
in a prompt and decisive manner.
(1) To respect the rights of the shareholders and secure equality among them,(2) To consider the interests of the stakeholders including the shareholders and cooperate with them in an
appropriate manner,(3) To disclose corporate information in an appropriate manner to secure transparency of management.
(4) To have the board of directors, taking into account the fiduciary responsibility and accountability toshareholders, enhance separation of the execution of management from the supervision thereof and thefunction of management supervision by outside directors to ensure the sustainable growth of theCompany, enhancement of corporate value on a medium to long-term basis, and improvement of
profitability and capital efficiency, and(5) To have constructive dialogue with the shareholders.
The Company’s corporate governance system is as follows.

General Meeting of Shareholders
Election, Dismissal

RecomNomination & Compensation mendaBoard of Directors Audit Board of Corporate Auditors
Committee
tion

insidedirectors

2

outsidedirectors

3

insidedirectors

4

outsidedirectors

3

Selection, Dismissal

Executive Organization

insideauditors1

Audit

outsideauditors

2

Accounting
AuditorAccounting Audit
Audit of Internal Control

President & CEO
Internal Audit Division
Board of Executive OﬃcersFunction Divisions

Business Divisions

Suggestion,
Guidance

Outside Specialists

Election, Dismissal(Attorney, Licensed Tax Accountant,
Patent Attorney, etc.)

Election, Dismissal

19

●Management System
If this proposal is approved, the Company will engage in business using the following system.
Board of Directors

Directors’ term of office: one year

Inside Directors

Yoshio Kito
Edward W. Hunter
Tsuneo Yuzurihara
Shigeki Osozawa

Outside Directors

Katsumi Nakamura
Takashi Hirai
Koji Osawa

Board of Corporate
Auditors

Corporate Auditors’ term of office:four years

Inside Corporate
Auditor

Kentaro Yoneyama

Outside Corporate
Auditors

Kiyohito Hamada
Eiko Hakoda

Appointed from among members both inside andoutside of the Company with abundant experienceand a high level of knowledge and specialization.
Of the seven Directors, three are Outside Directors
with management transparency and a high level ofsoundness.
The three Outside Directors are Independent
Directors.
Appointed from among members with expertiseand accumulated experience.
Outside Corporate Auditors comprise one certified
public accountant and tax accountant and one
lawyer, reinforcing the audit functions.
One of the Outside Corporate Auditors is an
Independent Auditor.

Board of Executive Officers
Executive Officers’ term of office: one year
Persons with abilities and who are well-versed in operations are actively appointed, regardless ofrace, nationality, etc.
CEO Yoshio Kito
Chief Executive Officer

CFO

CQO

CPO

Chief Financial Officer

Chief Quality Officer

Chief Product Officer

Shigeki Osozawa

Tsuneo Yuzurihara

Yoshio Kito

The Americas
Business

Carlo Lonardi
Marc Premont

Co-CMO Edward W. Hunter
Domestic Sales

EMEA Business

Kenji Okuma

Martin Rothe

Kazuishi Kaneko

Kazumitsu Ishikawa

Powered Chain
HoistsScott D. Miller

Co-CMO Longlin Huang

CMO Tsuneo Yuzurihara

Hoist
Manufacturing

CMO

Chief Manufacturing Officer

Edward W. Hunter
Tsuneo Yuzurihara
Longlin Huang
Asia Pacific(APAC) Business

CPO Yoshio Kito

Development &Technology

CMO

Chief Market Officer

Kimiaki Hayakawa

Chain
Manufacturing
Toshio Kono

JIANGYIN KITO
CFO Shigeki Osozawa
Corporate
Planning

Masafumi Kokubo

20

●Election of Officers (Nomination & Compensation Committee)

Members of the Nomination & Compensation Committee
Inside Directors

Outside Directors

The majority of the members are Outside Directors to ensure the independence
and neutrality of the committee.
Inside Directors (two) Outside Directors (three)

Recommendation①Recommend thecandidates for Directors,
Corporate Auditors andSenior Executive Oﬃcers
to the Board of
Directors.
②Recommend to theBoard of Directors thecompensation of
President & Representative Director, Directors
and Executive Oﬃcers
based on the evaluationof their performance.

Board of Directors

Nomination & Compensation Committee

Selection ofcandidates

General Meeting of Shareholders

In the Company, the Nomination & Compensation Committee, a voluntary committee of which
the majority is comprised of Outside Directors, deliberates and makes recommendations to theBoard of Directors regarding candidates for Directors, Corporate Auditors, and Senior Executive
Officers.
The Company established the standards for independence of Outside Directors described in thefollowing page and will judge the independence of the candidates for Outside Directors inaccordance with the standards.

21

●Standards for Independence of Outside Directors
The Company will judge the independence of its outside directors from the viewpoints of whether they canbe expected to make positive suggestions and raise questions concerning the Company’s business development,in addition to their satisfaction of the standards of independence prescribed by the Tokyo Stock Exchange, Inc.
Specifically, independence of the outside directors will be evaluated based on the viewpoints mentioned above
to the extent they do not fall under any of the following categories.
1.
2.
3.
4.
5.
6.

7.
8.
9.
10.

A person for whom the Company and the Company’s group are principal trading partners or a businessexecutive thereof,
A principal trading partner of the Company or a business executive thereof,
A major shareholder of the Company or a business executive thereof,
A business executive of a person for whom the Company and the Company’s group are major investors,
A person receiving a large donation from the Company and the Company’s group or a business executive
thereof,
A consultant, certified public accountant, other professional accountant, lawyer, or other legal specialistthat receives a large amount of money or other assets other than the compensation for a director from theCompany and the Company’s group (assets in excess of the amount equivalent to 2% of its total sales
turnover or gross income or 10 million yen whichever is larger on average in the preceding 3 years, otherthan the compensation for a director) (In the case that the person receiving the assets is a corporation,
association or other group, a person belonging to such group),
A person belonging to the auditing firm who performs a statutory audit of the Company and the Company’sgroup,A person from a corporation for which a business executive of the Company and the Company’s groupassumed the post of its outside director on a reciprocal basis within the preceding 3 years,
A person falling under the category of Items 1 through 8 hereof within the preceding 3 years,
A close relative (within the 2nd degree of relationship) of a person listed below:a) A person who falls under the category of Items 1 through 9 hereof,b)	A director, corporate auditor, executive officer or principal employee of the Company or the Company’sgroup.

(Note)“Person for whom the Company and the Company’s group are principal trading partners” refers to a person who
received from the Company and the Company’s group a payment of the amount in excess of 2% of its annual
consolidated sales turnover or gross income or 100 million yen whichever is larger in the immediately precedingbusiness year.
“Principal trading partner of the Company and the Company’s group” refers to a person who made to theCompany and the Company’s group a payment of the amount in excess of 2% of the Company’s annual
consolidated sales turnover or gross revenue or 100 million yen whichever is larger in the immediately precedingbusiness year.
“Major shareholder of the Company and the Company’s group” refers to a person directly or indirectly holding
10% or more of the voting rights of the Company’s and the Company’s group’s entire shareholders.
“Person for whom the Company’s group is a major investor” refers to a person the Company’s group invests in to
hold directly or indirectly 10% or more of its total voting rights.
“Person receiving a large donation from the Company and the Company’s group” refers to a person who
received from the Company and the Company’s group a donation in excess of 10 million yen or 2% of its annual
sales turnover or gross income whichever is larger on average in the preceding 3 years.

22●Evaluation of the Effectiveness of the Company’s Board of Directors
Below are the results of the most recent (fiscal 2020, the fiscal year ended March 31, 2021)
evaluation of the effectiveness of the Company’s Board of Directors.
1. Method of evaluation
A questionnaire was sent to all seven Directors and three Corporate Auditors to obtain theiropinions on the following items, with a five-point scale for each item and a column for free entry of
opinions. The evaluation items for fiscal 2020 year are the same as the evaluation items for fiscal
2019 (based on the TSE Corporate Governance Code revised in June 2018).
[Questionnaire items](1) Composition of the Board of Directors (including composition, number and ratio of outside
directors, diversity, term of office)(2) Method of operation of the Board of Directors (including role of the Board of Directors,
contents of materials, delegation of authority, and level of active discussion)(3) Selection of agenda items (including status of discussions on remuneration, election anddismissal, and compliance, and status of responses to previous issues)(4) S ystems supporting the Board of Directors (including opportunities and frequency of
information exchange, status of cooperation with related departments, and access to
information)(5) Q uestions on voluntary committees (including composition, status of discussions on
remuneration, election and dismissal, and succession planning)
2. Evaluation results (summary)
As a result of the evaluation, the effectiveness of the Board of Directors as a whole was assessed
to be adequately ensured. In particular, at the Board of Directors meeting where the evaluation
results were reported, it was reconfirmed that each Director and Corporate Auditor can freely andopenly engage in constructive discussions and opinions, and that any meeting has become a forum
for transparent, fair, prompt and decisive decision-making. On the other hand, positive evaluationsof “(3) Selection of agenda items” and “(4) System to support the Board of Directors” remained ataround 70% this year. This is because the three issues recognized as a result of the effectivenessevaluation in fiscal 2018 and 2019 have not yet been resolved in fiscal 2020, although it was
unavoidable due to the Covid-19 outbreak, and we have reached a common understanding thatthey will continue to be addressed in fiscal 2021.

23

Set a total of 35 evaluation items
Questions on the Structureof the Board of Directors

2020

２

Questions on Operationsof the Board of Directors

2020

44%

40%

15%

1%

2019

41%

43%

15%

1%

３

Questions on the Agenda itemsof the Board of Directors

2020

26%

2019

25%

４

System to support the Board of Directors

2020

24%

５

The Nomination and Compensation
Committee

１

63%

2019

2019
2020
2019
0%

67%

5% 3%

25%

25%

41%

11% 2%

23%

44%

32%

18%

36%
51%
28%

40%

60%

3%3%3%
7% 7%
11%

33%

46%

4% 3%1%

25%

37%

20%

7% 3%

27%

23%

80%

5%
3%

100%

Strongly Disagree Not answered
DisagreeStrongly Agree Agree
Neutral(Somewhat appropriate) (Neither appropriate nor inappropriate) (Somewhat inappropriate) (Inappropriate)(Appropriate)

3. Issues to be addressed
As explained in “2. Evaluation Results (Summary)” above, based on the results of this evaluation,
the Board of Directors has come to the conclusion that the three issues identified as a result of theeffectiveness evaluation for fiscal 2018 and fiscal 2019 need to be continued to be addressed. In
fiscal 2021, the Company will continue to address and improve the issues identified in order tofurther enhance the effectiveness of the Board of Directors as it formulates the next medium-term
management plan.
The three issues identified as a result of the effectiveness assessment and the policy foraddressing them are as follows:
IssuesResponse Policy

Deepen discussions on medium- and Discussions started in FY2020, but still halfway through due to thelong-term strategies, product strategies, Covid-19 outbreak; quality of discussions will be improved in FY2021 anddiscussions will be deepened in conjunction with the formulation of theand regional strategies
next medium-term management plan (scheduled to start in FY2022).
Increase the frequency of risk discussions Based on what we experienced in the Covid-19 outbreak, we will shareand conduct regular reviews
the risks of our business and conduct sufficient analysis and consideration.
S p e c i f i c a l l y d i s c u s s m a n a g e m e n t ’ s While progress has been made in the development of management
succession plan
succession, we will continue to discuss and advance a succession plan for
the President and Representative Director.

24

(Appendix)

Business Report (April 1, 2020 - March 31, 2021)

1 Overview of the Company Group(1) Business Progress and Results

During fiscal 2020 (ended March 31, 2021), the Group was forced to steer through a difficult
business environment from the beginning of the year due to the temporary stagnation of economic
activity caused by the COVID-19 pandemic. With the aim of maintaining customer services, theGroup focused on securing its supply chain and continued to engage in steady production activities.
The Group placed its highest priority on ensuring the health and safety of employees, and promoted
working from remote environments. As a result, operations were revised and efficiency increased.
Furthermore, the Company strived to secure profits by curbing Company-wide expenses.
During the first quarter of fiscal 2020, there was a major decline in demand due to the impact of
COVID-19. However, demand saw a gradual recovery from the second quarter onwards. While
concerns of resurging number of infections remained, during the fourth quarter, demand had
recovered to roughly the same levels in the same quarter of the previous year. As a result, net sales
amounted to ¥51,805 million (down 11.8% year on year), operating income was ¥4,457 million(down 18.6%), and ordinary income was ¥4,550 million (down 8.8%). Net income attributable toowners of parent was ¥2,344 million (down 26.8%), due to recording roughly ¥500 million during
fiscal 2020 in impairment losses of a Dutch subsidiary and restructuring expenses of an Australiansubsidiary.

Net sales

Operating income

Million yen

58,72276th Term

51,80577th Term

Ordinary income

Million yen

5,474

76th Term

4,457

77th Term

Million yen

4,991

4,550

Net income attributableto owners of parent

Million yen

3,204
2,344

76th Term

77th Term

76th Term

77th Term

25

Results by segment are as follows. The Kito Group’s business activities are classified bygeographical segment for the Company and its consolidated group companies.
Segment

Net sales[YoY change in %]Operating income (loss)[YoY change in %]Japan

21,534 million yen[down 19.4%]

4,313 million yen[down 21.5%]

The Americas

24,013 million yen[down 14.8%]

1,157 million yen[down 25.4%]

China

7,104 million yen[down 5.3%]

1,043 million yen[up 6.5%]

Asia

2,934 million yen[down 8.7%]

207 million yen[up 13.7%]

Europe4,462 million yen(368) million yen[down 2.5%] [303 million yen of operating loss for the previous FY]

Other

1,504 million yen(35) million yen[up 2.8%] [48 million yen of operating loss for the previous FY]

Japan:
Demand in the Japanese market slowly but steadily recovered from the second quarter onwards.
In the fourth quarter, demand recovered to the level of the same period of the previous fiscal year.
With regard to exports, shipments to subsidiaries fell due to the reduction in demand in overseas
markets. As a result, net sales amounted to ¥21,534 million (down 19.4% year on year) with
operating income of ¥4,313 million (down 21.5%).

The Americas:
Business gradually recovered from the second quarter onwards. Although business was impacted
by postponements of investments due to expectations for the new administration’s economic
policies, as well as the disarray of port functions on the west coast during the final phases of the
fiscal year, net sales during the fourth quarter recovered to the level of the same period of theprevious fiscal year. As a result, net sales in the Americas amounted to ¥24,013 million (down
14.8% year on year), with operating income of ¥1,157 million (down 25.4%).

China:
China rapidly shook off the impact of the COVID-19 crisis, and business performance recovered
quickly. Net sales amounted to ¥7,104 million (down 5.3% year on year) with operating income of26

¥1,043 million (up 6.5%). Since the fiscal year of the China Segment ends in December, the fiscal
year results are for the period from January to December.

Asia:
Capital investment in Southeast Asia saw continued sluggishness in industries such as theautomotive industry, due to the impact of the COVID-19 crisis. On the other hand, LCD-related sales
in South Korea, which had fallen significantly in the previous fiscal year, recovered. As a result, net
sales in Asia amounted to ¥2,934 million (down 8.7% year on year), with operating income of ¥207
million (up 13.7%).

Europe:While economic activity stagnated throughout Europe, the synergy from each subsidiary theGroup acquired through M&A’s over the past several years have been showing results, and steadyprogress was made in the establishment of the brand in the European market and differentiationfrom other companies’ products.
In addition, at the end of the fiscal year, the Group consolidated a Dutch subsidiary in the Europe
Segment that customizes hoists based on customer specifications, for use in special environments,
etc. As a result, net sales amounted to ¥4,462 million (down 2.5% year on year). The Group posted
an operating loss of ¥368 million (compared to operating loss of ¥303 million in the previous fiscal
year).

Other:
This segment currently comprises business in Australia only. Due to the early recovery of
economic activity, net sales amounted to ¥1,504 million (up 2.8% year on year), with an operating
loss of ¥35 million (compared to operating loss of ¥48 million in the previous fiscal year).

27

(2) Capital investment

The total amount of capital investment in the consolidated fiscal year ended in March 31, 2021
was 1,833 million yen, comprising primarily investments in sales-related systems, investments aimed
at increasing the production capacity of the Head Office & Factory, and updating aging plants andequipment.

(3) Financing

In the consolidated fiscal year ended in March 31, 2021, the Company financed 1,100 million
yen in the form of loans from financial institutions.

(4) Corporate challenges to be addressed

In addition to working to achieve KITO’s unswerving mission of creating safe and highly
productive working environments, we will also strive to achieve further growth by addressing thefollowing challenges in order to reduce the environmental impact of our business activities.
❶ Enhance Customer Experience		 • We will expand our product fields and product lineup with an aim to maximize customer
trust. Furthermore, we will strive to increase the value of KITO products, differentiate themfrom competitors’ products, and expand our solution range.
		 • We will improve our user training and other services, shorten lead times, and work to further
enhance customer service.
		 • We will also strengthen our quality control and quality assurance systems globally.
		 • We will actively leverage digital technologies to provide new added value.
❷ Create an Efficient Organization and Enhance Production Efficiency
		 • We will upgrade and strengthen our global IT and business platform infrastructure.
		 • We will also work to improve our supply chain management, increasing the operational
efficiency of our four manufacturing bases in Japan, China, the United States, and in Asia,
improving delivery services, and reducing inventories.
		 • We will work to optimize our chain production system, which boasts the largest production
volume for link chains in the world, building around our presence in Japan, the United Statesand Europe.
❸ Invest in People and Develop Our Human Resources		 • We are working to build an attractive organization by reforming the awareness of ouremployees and our corporate culture.
		 • By further evolving diversity, the aim will be to develop business leaders who can realize
teamwork by organizing team members of differing cultures and promote the developmentof business in global markets.
		 • We will enhance the training provided to all KITO Group employees regarding the universal
values we provide to society.

28

(5) Changes in assets and earnings
Net sales
55,168Net income attributable to owners of parent

Ordinary income
Million yen

61,238 58,722

Million yen

5,748

51,805

4,991

3,791

Million yen

4,064
4,550

2,836

3,204
2,344

74th Term 75th Term 76th Term 77th Term

74th Term 75th Term 76th Term 77th Term

74th Term 75th Term 76th Term 77th Term

Net income per share

Total assets

Net assets

Yen

Million yen

61,854 62,078 62,804 65,067

199.14156.64139.52Million yen

23,697

26,687 27,927

30,567114.2974th Term 75th Term 76th Term 77th Term

74th Term 75th Term 76th Term 77th Term

74th Term 75th Term 76th Term 77th Term

(In millions of yen, except per share amounts)

Item
Net sales
Ordinary income
Net income
attributable to ownersof parent
Net income per share
Total assets
Net assets

74th Term

75th Term

76th Term

77th Term(FY2020)
April 1, 2020
through
March 31, 2021

April 1, 2017
through
March 31, 2018

April 1, 2018
through
March 31, 2019

April 1, 2019
through
March 31, 2020

55,168
3,791

61,238
5,748

58,722
4,991

2,836

4,064

3,204

2,344

139.52 yen
61,854
23,697199.14 yen
62,07826,687156.64 yen
62,80427,927114.29 yen
65,06730,56751,8054,550(Notes) 1. Net income per share is calculated based on the average number of shares outstanding during the period.
2. Amounts less than one million yen, except per share amounts, are rounded down.

29

(6) Description of principal business (as of March 31, 2021)

The Group’s principal business consists of the development, manufacture, and sales ofequipment such as hoists, cranes, and chains. The Group handles mass-produced products, which
are standardized based on sales estimates, and customized products that meet various needs
depending on the type of cargo handling and the operating environment, as well as after-sales
services through parts provision and maintenance.
❶ Principal products handled by the Group
		 Cranes			 This achieves three-dimensional movements
in combination with hoists. There are various
types depending on the application, such as
overhead cranes, jib cranes, and bridge cranes.
		 Hoists			 This product hoists and lowers heavy objects
by manually operating the hand chain or runningthe electric motor. Chain and wire rope variants
are available.
		 Below-the-hook devices			 This is an attachment for lifting heavy objects.
A range of variations is available depending on
the type of heavy objects, including chain,magnetic, and fiber.
		 Various chain products			 These include tire chains and marine chain
products.
❷ The Group’s sales structure		 In Japan, we have adopted a distribution andsales system, and mainly conduct sales activities
through authorized distributors under the umbrellaof exclusive agents. Overseas, we supply products
and services to more than 50 countries, includingin North America, Asia, and Europe, throughoverseas subsidiaries and distributors.

30

(7) Main business locations and major subsidiaries of the Company❶ Main business locations of the Company
		 Head Office
Head Office & Factory (Yamanashi)
Business Office

Tokyo Head Office (Tokyo)① Sapporo Office (Hokkaido)③ Kita Kanto & Shin’etsu Office (Gunma)⑤ Central-Japan Sales Group (Aichi)⑦ Chugoku & Shikoku Office (Okayama)❷ Status of Major Subsidiaries
Company nameCountry andregion(Consolidated subsidiaries)

Capital② Sendai Office (Miyagi)④ Yokohama Office (Kanagawa)⑥ Osaka Sales Group (Osaka)⑧ Fukuoka Office (Fukuoka)

Percentage
of votingrightsDescription ofprincipal business
Manufacture and sales of the Company’s
products
Manufacture and sales of chains and chainrelated products, and holding company forthe purpose of investing in SCC JapanGODO KAISHA

Harrington Hoists, Inc.

U.S.

(Thousand USD)

*100.0%PEERLESS CHAIN COMPANY

U.S.

(Thousand USD)

*100.0%

Canada(Thousand CAD)

800

100.0%

Sales of the Company’s products

KITO DO BRASIL COMÉRCIO DETALHAS E GUINDASTES LTDA

Brazil(Thousand BRL)

12,971100.0%

Sales of the Company’s products

SCC JAPAN

Japan(Thousand JPY)

10,000*100.0%KITO Americas, Inc.

U.S.

(Thousand USD)

100.0%PEERLESS INDUSTRIAL GROUP,
INC.

U.S.

(Thousand USD)

*100.0%JIANGYIN KITO CRANE CO., LTD

China(Thousand USD)

90.0%

KITO HOISTS & CRANES(SHANGHAI) CO., LTD.

Sales of PEERLESS CHAIN COMPANY
products
Holding company for the purpose ofinvesting in Harrington Hoists, Inc. and
PEERLESS INDUSTRIAL GROUP, INC., andmanaging trademark rights and intellectual
property rights concerning the products ofHarrington Hoists, Inc.
Holding company for the purpose ofinvesting in PEERLESS CHAIN COMPANY
Manufacture and sales of wire-rope hoist
products, etc. and manufacture ofcomponents of the Company’s products

China(Thousand USD)

7,000

*94.0%

Sales of the Company’s products

KITO TAIWAN CO., LTD.

Taiwan(Thousand NTD)

96,500

55.0%

Sales of the Company’s products and cranes

KITO KOREA CO., LTD.

Korea

(Thousand KRW)

4,453,080

93.26%

SIAM KITO CO., LTD.

Thailand(Thousand THB)

100,000*80.0%

India(Thousand INR)

Manufacture and sales of the Company’s
products and cranes
Manufacture and sales of the Company’s
products and cranes

37,555100.0%

Sales of the Company’s products

Indonesia(Thousand IDR)

40,473,560

100.0%

Sales of the Company’s products and cranes

KITO CANADA INC.

KITO INDIA PRIVATE LIMITED
PT. KITO INDONESIA

9,500

20,00020,00020,00026,00031

Company name
Kito Europe GmbH
KITO CHAIN ITALIA S.R.L.
ERIKKILA OY
Van Leusden B.V.
PWB ANCHOR LIMITEDCountry andregionCapitalPercentage
of votingrightsDescription ofprincipal business

Germany(Thousand EUR)

3,000

100.0%

Sales of the Company’s products

Italy(Thousand EUR)

10100.0%

Finland(Thousand EUR)

40

*100.0%

The Netherlands(Thousand EUR)

*100.0%Australia(Thousand AUD)

Manufacture and sales of chains and chainrelated products
Manufacture and sales of light craneproducts, etc.
Manufacture and sales of customized hoists
and cranes products, etc., with rustproof andexplosion-proof specifications*100.0%

45.4
18.8

Sales of the Company’s products(Notes) 1. Investment ratio with (*) include indirect holding of shares.
2.	Effective July 1, 2020, Van Leusden B.V. became a wholly-owned subsidiary of the Company through stockacquisitions.

❸ Status of specified wholly-owned subsidiaries of the Company as of March 31, 2021
		 There are no companies classified as specified wholly-owned subsidiaries.

32

(8) Status of employees (as of March 31, 2021)❶ Status of employees of the Group
Number of employees

Increase/decrease from the end of the previous fiscal year

2,262 persons (296 persons)

Decrease of 66 persons(Notes) 1. The number of employees is the number of workers.
2.	The number in parentheses in the number of employees column is the annual average number of temporary
employees.
		 Temporary employees include part-time staff, temporary staff, and dispatched staff.

❷ Status of employees of the Company
Number of employees

Increase/decrease fromthe end of the previous
fiscal year

677 persons

Decrease of 1 person

Average age
43.8 years old

Average years ofservice17.4 years(Note)	The number of employees is the number of workers excluding employees seconded from the Company toanother company and including employees seconded from another company to the Company.

(9) Principal lenders (as of March 31, 2021)
Lenders

Loan balance (millions of yen)

Sumitomo Mitsui Banking Corporation

8,924

MUFG Bank, Ltd.

4,520

The Yamanashi Chuo Bank, Ltd.

2,786

Sumitomo Mitsui Trust Bank, Limited

2,394(Note) Amounts less than one million yen are rounded down.

(10) Other important information concerning the current status of the corporateGroup
Not applicable.

33

2 Matters Concerning the Company’s Shares(1) Total number of shares authorized:

94,000,000 shares(2) Total number of shares issued:

20,519,773 shares(3) Number of shareholders:

4,245 persons(excluding 528,427 shares of treasury stock)(4) Major shareholders (top ten shareholders)
Percentage ofshareholding

Name of shareholder

Number of shares

MISAKI ENGAGEMENT MASTER FUND

2,045,000 shares

9.96%

The Master Trust Bank of Japan, Ltd. (Trust account)

1,784,600 shares

8.69%

THE BANK OF NEW YORK-JASDECNON-TREATY ACCOUNT

993,900 shares

4.84%

GOVERNMENT OF NORWAY

940,110 shares

4.58%

Custody Bank of Japan, Ltd. (Trust account)

918,600 shares

4.47%

YK Capital Co., Ltd.

740,000 shares

3.60%

Custody Bank of Japan, Ltd. (Trust account 9)724,300 shares

3.52%

Sumitomo Mitsui Banking Corporation

670,400 shares

3.26%

RE FUND 107 – CLIENT AC

414,700 shares

2.02%

Custody Bank of Japan, Ltd. (Securities investment trust account)

410,300 shares

1.99%(Notes) 1.	The Company holds 528,427 shares of treasury stock and those shares are excluded from the major
shareholders above.
2.	The percentage of shareholding is calculated after deducting the treasury stock, and rounded down to two
decimal places.

(5) S tatus of shares issued to officers as compensation for the execution of theirduties during the fiscal year under review
The details of stock-based compensation is as follows.
Category
Directors (excluding Outside Directors)

No. of recipients3

No. of shares
13,289 shares

34

3 Matters Concerning Officers(1) Names, etc. of Directors and Corporate Auditors (as of March 31, 2021)
Name

Responsibilities and significant
concurrent positions

Status of principal activities

President &CEOYoshio Kito

President Executive Officer
Chief Executive Officer
Chief Product Officer
KITO Americas, Inc. / Director
JIANGYIN KITO CRANE CO., LTD. /Chairman—

Executive
Vice
President

Edward W.
HunterExecutive Vice President Officer
Co-Chief Market Officer
KITO Americas, Inc. / Chairman
ERIKKILA OY / Director—

Tsuneo Yuzurihara

Senior Executive Officer
Chief Quality Officer
Chief Manufacturing Officer
Head / General Manager of Quality
Assurance Division
KITO HOIST THAI CO., LTD. /Director—

Shigeki Osozawa

Senior Executive Officer
Chief Financial Officer
General Manager of Corporate
Management Division
General Manager of Financial
Management Division
JIANGYIN KITO CRANE CO., LTD. /Director
KITO HOISTS & CRANES ASIA PTE.
LTD. / Director—

Kansai Airports / Outside Director,
Member of the Audit andSupervisory Committee
The Black Stone Group L.P. / Senior
AdvisorMr. Katsumi Nakamura attended all
14 board meetings. He leveraged his
extensive experience with managementin the manufacturing industry andhis wide-ranging knowledge ofmanufacturing, and made various
remarks such as sharing his opinions
on overall management from a
global management perspective.
Furthermore, he serves as a memberof the Nomination & Compensation
Committee, which was established to
improve transparency and objectivity
in selecting candidates for Directors,
etc., and making decisions regarding
compensation.

PositionManaging
Director

Managing
Director

OutsideDirector

Katsumi Nakamura

35

Position

OutsideDirector

Name

Takashi Hirai

Responsibilities and significant
concurrent positions

Status of principal activities

University of Tsukuba / Professor of
Graduate School of Business
Sciences, MBA Program inInternational Business
Waseda University / Visiting
Professor of Graduate School ofBusiness and Finance
MITSUI-SOKO HOLDINGS Co., Ltd. /Outside Director

Mr. Takashi Hirai attended all 14 board
meetings. Based on his many years ofexperience working as a consultant in aworld-famous consulting firm, he madevarious remarks, including sharing his
opinions on important management
issues such as the formulation of
growth strategies and the enhancementof global management strengths.
Furthermore, he serves as a member of
the Nomination & Compensation
Committee, which was established to
improve transparency and objectivity inselecting candidates for Directors, etc.,
and making decisions regarding
compensation.

Global Catalyst Partners L.P. /Managing Principal & Co-Founder
Global Catalyst Partners Japan /Managing Director & Co-Founder

Mr. Koji Osawa attended all 14 board
meetings. Based on his experience
working at a general trading company
and managing a venture capital fund,he made various remarks, including
sharing his opinions on the search for
growth fields, investment strategies,
and external negotiation policies.
Furthermore, he serves as a member of
the Nomination & Compensation
Committee, which was established to
improve transparency and objectivity inselecting candidates for Directors, etc.,
and making decisions regarding
compensation.

OutsideDirector

Koji Osawa

Standing
Corporate
Auditor

Kentaro Yoneyama——

OutsideCorporate
AuditorKiyohito Hamada

Yotsuba-sogo Accounting Office /Partner
Medical Data Vision Co., Ltd. /Outside Corporate Auditor
Valuence Holdings Inc. / Outside
Director, Audit & Supervisory
Committee member
Convano Inc. / Outside Director
Nice Corporation / Outside Director

Mr. Kiyohito Hamada attended all 14
board meetings and all 11 Board of
Corporate Auditors’ meetings. He has
made remarks based on his extensive
experience and expert knowledge as acertified public accountant and tax
accountant, such as providing valuable
insights at board meetings and the
Corporate Auditors’ meetings.

OutsideCorporate
AuditorEiko Hakoda

Mori Hamada & Matsumoto / LPC
Partner

Ms. Eiko Hakoda attended all 14 board
meetings and all 11 Board of Corporate
Auditors’ meetings.
She has made remarks based on her
extensive experience and expert
knowledge as an attorney, such asproviding valuable insights at board
meetings and the Corporate Auditors’
meetings.

36

(Notes) 1.	There are no important business transactions or other relationships between the Company and the entities
at which Directors Katsumi Nakamura, Takashi Hirai, and Koji Osawa hold concurrent positions.
2.	There are no important business transactions or other relationships between the Company and the entities
at which Corporate Auditors Kiyohito Hamada and Eiko Hakoda hold concurrent positions.
3.	Corporate Auditor Kiyohito Hamada is a certified public accountant and a certified tax accountant, and has
considerable knowledge of finance and accounting.
4.	The Company has designated Directors Katsumi Nakamura, Takashi Hirai, and Koji Osawa and Corporate
Auditor Kiyohito Hamada as independent director/auditor with no potential conflict of interest with generalshareholders, the designation of which is required by the Tokyo Stock Exchange, and notified the Tokyo
Stock Exchange as such.
5.	The Company has adopted an executive officer system in order to expedite decision-making and clarify
management responsibilities. Please see page 20 for information regarding these responsibilities.
6.	In addition to the meetings of the Board of Directors indicated above, a total of six resolutions in writing
were made, deemed to be resolutions of the Board of Directors pursuant to Article 370 of the Companies
Act and Article 25 of the Company’s Articles of Incorporation.

(2) Overview of the contents of the liability limitation agreement

Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act and Article 40,
Paragraph 2 of the Company’s Articles of Incorporation, the Company has concluded an agreementwith each Outside Director and Outside Corporate Auditor, limiting their liability for damages under
Article 423, Paragraph 1 of the same Act.
The maximum amount of liability under the agreement for each Outside Director and Outside
Corporate Auditor is the total of the amounts specified in each item of Article 425, Paragraph 1 of
the Companies Act.

(3) Overview of the contents of the Directors and Officers liability insurance contract

The Company has entered into a Directors and Officers liability insurance contract with aninsurance company. In the event of a claim for damages submitted by a shareholder or a third party,
etc., the said insurance agreement shall compensate for damages including compensation fordamages and legal expenses to be borne by the insureds. However, the above insurance policy
does not apply to compensation for damages arising from the insureds’ unlawful gain or benefit. The
Company bears the entire premium for the insured parties. The parties insured under theseinsurance agreements are Directors, Corporate Auditors, Executive Officers, and other key
executives of the Company, Group subsidiaries, and Group affiliates.

(4) Amount of compensation, etc. paid to Directors and Corporate Auditors for the
fiscal year under review

The Company’s policy governing decision-making regarding the contents of compensation, etc.,
for individual Directors is determined by the Board of Directors. In making these decisions, theNomination & Compensation Committee deliberates and reports its findings to the Board of
Directors. The details of Officer compensation, etc., of the Company, determined in accordance withthis policy, are as follows.

37❶	Matters concerning the determination policy regarding the contents of compensation, etc., forindividual Directors
		 Director compensation of the Company consists of compensation linked to shareholder
returns to ensure that the compensation functions effectively as an incentive for achieving
sustainable growth and improvement of medium- and long-term corporate value of the Group.
The Group’s basic policy is to decide on compensation for individual Directors that iscommensurate with their respective duties. Specifically, Director compensation comprises basic
compensation (fixed compensation), performance-based compensation, and stock-based
compensation. Outside Directors and Corporate Auditors, who are responsible for overseeing
functions, are paid only basic compensation in consideration of the nature of their duties.
Basic compensation

Fixed compensation is paid on a monthly basis. The amount of fixed compensation is decided
through comprehensive consideration of positions and duties, taking into account factors suchas compensation standards at other companies, the Company’s business performance, andemployee salary standards.

Performance-based
compensation(cash bonuses)

Bonuses as cash remuneration reflecting business performance indicators are paid at a given
period each year, with the aim of promoting a greater focus on improving business results eachfiscal year. The amounts of cash bonuses are calculated based on the level of achievement ofconsolidated net sales and EBITDA targets for each fiscal year, as well as evaluations performed
using the targets set for each individual each year. The consolidated net sales and EBITDA
targets are determined from business plans formulated each year, which are based on mediumterm management plans, and on publicly announced figures. These targets are revised asnecessary upon consultation with the Nomination & Compensation Committee to reflectchanges in the business environment.

Stock-based
compensation(transfer-restricted
stock)

A standard annual amount is determined by the Board of Directors for each position, and theCompany’s common stock equivalent to that amount is granted annually at a given period eachyear. Transfer restrictions are lifted on the date on which the grantee resigns from the post ofboth Director and Executive Officer of the Company or the Company’s subsidiary.

		 Compensation composition (the percentages of each type of compensation) is based oncompensation standards which use as their benchmark the compensation offered in companies
equivalent in scale to the Company and companies in the same business fields or with the samebusiness formats. Performance-based compensation is weighed more heavily for upper level
positions and duties. Compensation composition is deliberated by the Nomination &Compensation Committee and their findings are reported to the Board of Directors. The Board of
Directors delegates decision-making regarding the details of compensation for individuals(amounts for basic compensation and performance-based compensation) to the President &CEO, within the scope indicated in the report from the Nomination & Compensation Committee.
The standard for ratio of compensation by type is as follows: basic compensation : performancebased compensation : stock-based compensation = 6 : 3 : 1 (when performance indicator targets
have been met 100%).
Position

Basic compensation

Performance-based
compensation

Stock-based compensation

President & CEO

58%

29%

13%

Managing Director

62%

28%

10%

38

		 To ensure that this decision-making authority is exercised appropriately by the President &CEO, the Board of Directors consults with the Nomination & Compensation Committee regarding
the draft proposal for compensation and receives their report. The President & CEO, to whom
the aforementioned authority is delegated, then makes decisions on compensation in accordancewith the content of this report. With regard to stock-based compensation, the Board of Directors
passes resolutions regarding the number of shares to be allocated to individual Directors, basedon the report from the Nomination & Compensation Committee.
		 The Board of Directors deems the compensation for individual Directors observe thedetermination policy, as the amounts of compensation for individual Directors are determinedthrough the above process.
❷	M atters concerning resolutions at the General Meeting of Shareholders regarding
compensation, etc., for Directors and Corporate Auditorsa.	The amounts of compensation paid to the Company’s Directors and Corporate Auditors wereapproved at the Ordinary General Meeting of Shareholders held on June 26, 2007 as follows.
The number of members as of the conclusion of said Ordinary General Meeting of
Shareholders was eight Directors (of which three are Outside Directors) and three Corporate
Auditors (of which two are Outside Corporate Auditors).
		 - Compensation for Directors: not more than 300 million yen per year (including not more than
30 million yen per year for Outside Directors; however, not including the employee salary
portion of Directors who serve concurrently as employees)
		 - Compensation for Corporate Auditors: not more than 80 million yen per yearb.	In addition to the abovementioned compensation, with regard to stock-based compensation,
it was resolved at the Ordinary General Meeting of Shareholders held on June 21, 2019 thatthe amount of compensation of transfer-restricted stock shall be no more than 100 million yen
per year, and the maximum number of shares shall be no more than 100 thousand shares per
year. The number of members as of the conclusion of said Ordinary General Meeting of
Shareholders was four Directors (excluding Outside Directors).
❸ Amount of compensation, etc. for Directors and Corporate Auditors
Non-monetarycompensation, etc.

Classification

Payment
Basic
recipients compensation

Directors
6 persons(Of which, Outside Directors)(3 persons)
Corporate Auditors
3 persons(Of which, Outside Corporate Auditors) (2 persons)Total
9 persons(Of which, Outside Directors/Corporate Auditors) (5 persons)

105 million yen(21 million yen)
28 million yen(14 million yen)
133 million yen(36 million yen)

Total
Performance Stock-based
amount of-basedcompensation
Stock option compensation,compensation(transferetc.
compensation-restricted
stock)
55 million yen
(—)
—
(—)
55 million yen(—)

16 million yen
(—)
—
(—)
16 million yen(—)

1 million yen
(—)
—
(—)
1 million yen(—)

177 million yen(21 million yen)
28 million yen(14 million yen)
206 million yen(36 million yen)

39

(Notes) 1.	With regard to the abovementioned basic compensation for fiscal 2020, given the harsh businessenvironment resulting from the impact of the COVID-19 pandemic, Officers have requested to decline
acceptance of some of their compensation for the three month period from May to July of 2020. The
abovementioned amounts of basic compensation reflect these reductions.
		 - President & CEO: 20% reduction in basic compensation
		 - Directors (excluding Outside Directors): 15% reduction in basic compensation
		 - Corporate Auditors (excluding Outside Corporate Auditors): 10% reduction in basic compensation
2.	The number of Directors and Corporate Auditors as of March 31, 2021 is seven Directors and three
Corporate Auditors. The abovementioned payment recipients among Directors and Corporate Auditors
exclude one Director without compensation.
3.	For the fiscal year under review, at the board meeting held on June 23, 2020, the Board of Directors
resolved to delegate decision-making regarding the specific details of compensation for individual Directors
to President & CEO Yoshio Kito, within the scope approved at the General Meeting of Shareholders andwithin the scope indicated in the report from the Nomination & Compensation Committee. The details of thedelegated authority and the measures implemented to ensure the said delegated authority is exercised
appropriately, are as indicated in “❶ Matters concerning the determination policy regarding the contents ofcompensation, etc., for individual Directors.” The reasons for this delegation of authority is that the President& CEO is best suited to fairly evaluating the Directors, for he has a comprehensive understanding of theperformance of individual Directors.
4.	Performance-based compensation is determined after the fiscal year-end and the settlement of accounts, bycalculating the achievement level of targets (performance achievement rate) and conducting evaluations on
an individual basis. The amounts of performance-based compensation for the fiscal year under review have
not yet been finalized, and the abovementioned performance-based compensation amounts are scheduled
payment amounts.
5.	Due to the impact of COVID-19, low performance-based compensation target values have been set for fiscal
2020, since both revenue and profit were forecast to be significantly lower than in the previous fiscal year.
Therefore, even if the targets for the current fiscal year are met, the performance-based compensation
amount paid will be less than the usual standard amount.
6.	The amount of performance-based compensation for fiscal 2019 was finalized in June 2020. This amount is
not included in the abovementioned performance-based compensation amounts. The finalized amount was
based on the performance achievement rate for the fiscal year (67.6%) and reflects evaluations of eachindividual. The finalized amount was 54 million yen, which is a reduction of just over 10 million yen from theperformance-based compensation amount (65 million yen) disclosed in the fiscal 2019 business report.
7.	Directors are issued stock-based compensation as non-monetary compensation. The content of stock-based
compensation and the state of its issuance is as indicated in “ ❶ Matters concerning the determination policy
regarding the contents of compensation, etc., for individual Directors” and “2. Matters Concerning theCompany’s Shares.”8.	The stock option compensation amount is the amount recorded as expenses related to stock acquisitionrights granted in the form of stock options during the fiscal year under review.
9.	Stock option compensation and Directors’ retirement benefits system have been abolished as of theconclusion of the 75th Ordinary General Meeting of Shareholders held on June 21, 2019.
10. Amounts less than one million yen are rounded down.

40❹	Matters related to performance-based compensation
		 The method used to calculate amounts of performance-based compensation is as indicated in“❶ Matters concerning the determination policy regarding the contents of compensation, etc., forindividual Directors.”		 The details of business performance indicators selected for use in calculations of performancebased compensation, the reasons for their selection, and the results of their use for fiscal 2020are as indicated below.
Indicators

FY2020Targets

Reason for selection as indicator

Results

Consolidated
net sales

51,330 million yen

51,806 million yen

Selected as an indicator of market growth potential

EBITDA

6,680 million yen

7,503 million yen

Selected as an indicator of cash generating ability(Notes) 1.	Targets are determined from business plans formulated each year, based on medium-term management
plans and on business forecasts.
2.	Amounts are rounded to the nearest million yen.

(5) Other important matters concerning officers
Not applicable.

41

4 Matters Concerning Accounting Auditor(1) Name of Accounting Auditor

PricewaterhouseCoopers Aarata LLC(2) Amount of compensation, etc. paid to Accounting Auditor for the fiscal year
under review
Amount paid❶	Amount of compensation, etc. related to duties stipulated in Article 2,
Paragraph 1 of the Certified Public Accountants Act

59 million yen❷	Amount of compensation, etc. related to duties other than those
stipulated in Article 2, Paragraph 1 of the Certified Public Accountants Act

8 million yen

Total of cash and other financial benefits payable by the Company and its subsidiaries

67 million yen(Notes) 1.	Under the audit agreement between the Company and the Accounting Auditor, the amount of compensation,etc. for the audit in accordance with the Companies Act and the amount for the audit in accordance with the
Financial Instruments and Exchange Act are not clearly distinguished, and it is impractical to categorize theamounts. As such, the total of these amounts is stated in the amount of compensation, etc. for the fiscal year
under review.
2.	The Company outsources to the Accounting Auditor advisory duties regarding revenue recognition, which
are duties other than those stipulated in Article 2, Paragraph 1 of the Certified Public Accountants Act (nonaudit duties), and pays consideration thereof.
3.	The Company’s Board of Corporate Auditors has reviewed and considered items including the audit plan of
the Accounting Auditor, the implementation status of audits, and the basis for calculating estimates, in lightof the “Practical Guidelines for Cooperation with Accounting Auditors” published by the Japan Audit &Supervisory Board Members Association, and has given consent prescribed in Article 399, Paragraph 1 of theCompanies Act for compensation paid to the Accounting Auditor.
4.	Amounts less than one million yen are rounded down.

(3) The Company’s consolidated subsidiaries audited by audit corporations otherthan the Company’s Accounting Auditor

Consolidated subsidiaries are audited by a certified public accountant or audit corporation otherthan PricewaterhouseCoopers Aarata LLC.

(4) P olicy concerning decision on dismissal or non-reappointment of Accounting Auditor

In the event that the execution of duties by the Accounting Auditor is disrupted, or whenotherwise deemed necessary, the Company’s Board of Corporate Auditors shall determine thecontent of a proposal in relation to the dismissal or non-reappointment of the Accounting Auditor.
In addition, if the Accounting Auditor is deemed to fall under any of the items set forth in Article
340, Paragraph 1 of the Companies Act, the Board of Corporate Auditors shall dismiss the
Accounting Auditor with the unanimous consent of all Corporate Auditors. In such case, a Corporate
Auditor designated by the Board of Corporate Auditors shall report the dismissal of the Accounting
Auditor and the reasons for dismissal at the first General Meeting of Shareholders convened after
such dismissal.

42

Consolidated financial statements

Consolidated balance sheets Consolidated fiscal year 2020 (As of March 31, 2021)
Accounts

Amounts

Accounts

AssetsCurrent assets

43,735
13,734

Notes and accounts receivable

11,369Merchandise and finished goods

12,905Work in process

1,254

Raw materials and supplies

3,181

Other

1,367
(78)

Noncurrent assets

21,332

Property, plant and equipment

12,628

Buildings and structures

4,595

Machinery, equipment and vehicles

4,205

Land

1,469

Construction in progress

983

Other

1,374

Intangible assets

5,003

Goodwill

1,195

Software

784

Other

3,023

Investments and other assets

3,701

Investment securities

1,287

Deferred tax assets

1,465

Retirement benefit asset
Other
Total assets

Amounts

Liabilities

Cash and deposits

Allowance for doubtful receivables

Million yen

73
874
65,067

Note: Amount less than one million yen are rounded down.

Current liabilities
Notes and accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Provision for bonuses
Provision for product warranties
Provision for sales returns
Provision for business restructuring
Other
Non-current liabilities
Long-term loans payable
Net defined benefit liability
Deferred tax liabilities
Other
Total liabilities

23,011
5,028
7,955
4,028
2,601
271
844
91
401
85
1,702
11,488
7,894
2,184
638
771
34,500Net assets

Minority interests

29,138
3,976
5,056
20,561
(455)
399
0
(69)
523
(54)
63
966

Total net assets

30,567

Total liabilities and net assets

65,067

Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurement of defined benefit plans
Subscription rights to shares

43

Consolidated statement of income Consolidated fiscal year 2020 (From April 1, 2020 to March 31, 2021)
Accounts

Amounts

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange gains
Rents received
Subsidy income
Proceeds from the sales of scrap
Other

36
58
72
163
36
109

Non-operating expenses
Interest expenses
Arrangement fees
Other

233
55
94

Ordinary income
Extraordinary income
Gain on sale of noncurrent assets

5

Extraordinary loss
Loss on sale of noncurrent assets
Impairment loss
Loss on retirement of noncurrent assets
Business restructuring expenses
Loss on termination of retirement benefit plan
Income before income taxes
Income taxes-current
Income taxes-deferred
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent
Note: Amount less than one million yen are rounded down.

Million yen

3
334
41
188
305

51,80533,081
18,724
14,266
4,457
475

383

4,550
5
873

3,682
1,159
72
2,450
106
2,344

44

Non-consolidated financial statements

Non-consolidated balance sheets Fiscal year 2020 (As of March 31, 2021)
Accounts

Amounts

Accounts

AssetsMillion yen

Amounts

Liabilities

Current assets
Cash and deposits
Notes receivable – trade
Electronically recorded monetaryclaims – operating
Accounts receivable – trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Accounts receivable – otherConsumption taxes receivable
Short-term loans receivable fromsubsidiaries and associates
Other
Noncurrent assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Intangible assets
SoftwareTelephone subscription right
Other
Investments and other assets
Shares of subsidiaries andassociates
Investments in capital ofsubsidiaries and associates
Long-term loans receivable fromsubsidiaries and associates
Long-term prepaid expenses
Deferred tax assets
Other

21,776
8,735
21

Total assets

47,680

41
5,232
2,416
791
2,301
255
469
62
1,382
66
25,903
6,097
2,292
212
1,750
12
283
1,000
0
544
763
653
3
105
19,043
5,611
6,854
5,360
31
1,004
180

Note: Amount less than one million yen are rounded down.

Current liabilities
Notes payable – trade
Accounts payable – trade
Short-term loans payable
Current portion of long-termloans payable
Current portion of long-termborrowings from subsidiaries
and associates
Lease obligations
Accounts payable – otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Provision for bonuses
Provision for product warranties
Provision for sales returns
Notes payable - facilities
Accounts payable - facilities
Other
Non-current liabilities
Long-term loans payable
Provision for retirement benefits
Other

17,298
294
2,678
6,900
4,008

Total liabilities

27,319

392
0
25
1,777
233
16
32
380
65
0
69
368
55
10,020
7,885
1,787
348

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Retained earnings
Other retained earnings
Reserve for tax purpose reduction
entry of non-current assets
General reserve
Retained earnings brought forward
Treasury shares
Valuation and translation
adjustments
Deferred gains or losses on hedges
Subscription rights to shares

20,367
3,976
5,199
5,199
11,646
11,64611
150
11,485
(455)
(69)
(69)
63

Total net assets

20,361

Total liabilities and net assets

47,68045

Non-consolidated statement of income Fiscal year 2020 (From April 1, 2020 to March 31, 2021)
Accounts

Amounts

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Non-operating expenses
Interest expenses
Arrangement fees
Other
Ordinary income
Extraordinary income
Gain on sale of noncurrent assets
Extraordinary loss
Loss on sale of noncurrent assets
Loss on retirement of noncurrent assets
Income before income taxes
Income taxes-current
Income taxes-deferred
Net income

Million yen

137
1,021
68
101
208
55
49

0

2
21

21,534
13,194
8,339
6,182
2,157
1,328

313

3,172
0
23

3,149
606
82
2,460

Note: Amount less than one million yen are rounded down.

46

AUDITOR’S REPORT

Certified Copy of the Accounting Auditor’s Report Relating to Statutory Reports (Consolidated)

INDEPENDENT AUDITOR’S REPORTThe Board of Directors
KITO CORPORATION

May 17, 2021
PricewaterhouseCoopers Aarata LLC

Tokyo Office

Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Junji Ichihara (seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Mamoru Honda (seal)
OpinionPursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying consolidated financial
statements, which comprise the consolidated balance sheets, the consolidated statement of income, the consolidated
statement of changes in net assets and the notes to the consolidated financial statements of KITO CORPORATION (the“Company”) for the fiscal year from April 1, 2020 through March 31, 2021.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position and results of operations of KITO CORPORATION, which consists of the Company and its consolidated
subsidiaries, for the period covered by the consolidated financial statements in conformity with accounting principles
generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under
the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Consolidated Financial Statements.” We are
independent of the Company and its consolidated subsidiaries in accordance with the provisions related to professional
ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that we have obtained sufficient andappropriate audit evidence to provide a basis for our audit opinion.
Responsibilities of Management, Corporate Auditors and the Board of Corporate Auditors for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with accounting principles generally accepted in Japan, and for designing and operating such internal control
as management determines is necessary to enable the presentation and fair presentation of the consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing whether it is appropriate toprepare the consolidated financial statements in accordance with the premise of a going concern, and for disclosing
matters relating to going concern when it is required to do so in accordance with accounting principles generally acceptedin Japan.
The Corporate Auditors and the Board of Corporate Auditors are responsible for monitoring the execution of Directors’
duties related to designing and operating the financial reporting process.

47

Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to express an opinion on the consolidated financial
statements from an independent standpoint in an audit report, based on our audit. Misstatements can occur as a result offraud or error, and are deemed material if they can be reasonably expected to, either individually or collectively, influence
the decisions of users taken on the basis of the consolidated financial statements.
We make professional judgment in the audit process in accordance with auditing standards generally accepted inJapan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit
procedures to address the risks of material misstatement. The audit procedures shall be selected and applied asdetermined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis forthe audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order to design
audit procedures that are appropriate in the circumstances, although the purpose of the audit of the consolidated
financial statements is not to express an opinion on the effectiveness of the entity’s internal control.
・ Assess the appropriateness of accounting policies adopted by management and the method of their application, as wellas the reasonableness of accounting estimates made by management and the adequacy of related notes.
・ Determine whether it is appropriate for management to prepare the consolidated financial statements on the premise ofa going concern and, based on the audit evidence obtained, determine whether there is a significant uncertainty in regard
to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If there is asignificant uncertainty concerning the premise of a going concern, the auditor is required to call attention to the notes tothe consolidated financial statements in the audit report, or if the notes to the consolidated financial statements
pertaining to the significant uncertainty are inappropriate, issue a modified opinion on the consolidated financial
statements. While the conclusions of the auditor are based on the audit evidence obtained up to the date of the audit
report, depending on future events or conditions, an entity may be unable to continue as a going concern.
・ Besides assessing whether the presentation of and notes to the consolidated financial statements are in accordance withaccounting principles generally accepted in Japan, assess the presentation, structure, and content of the consolidated
financial statements including related notes, and whether the consolidated financial statements fairly present thetransactions and accounting events on which they are based.
・ Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its consolidated
subsidiaries in order to express an opinion on the consolidated financial statements. The auditor is responsible for
instructing, supervising, and implementing the audit of the consolidated financial statements, and is solely responsible forthe audit opinion.
The auditor reports to the Corporate Auditors and the Board of Corporate Auditors regarding the scope and timing of
implementation of the planned audit, material audit findings including material weaknesses in internal control identified in
the course of the audit, and other matters required under the auditing standards.
The auditor reports to the Corporate Auditors and the Board of Corporate Auditors regarding the observance ofprovisions related to professional ethics in Japan as well as matters that are reasonably considered to have an impact on
the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Interest
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries requiring disclosure
under the provisions of the Certified Public Accountants Act of Japan.

48

Certified Copy of the Accounting Auditor’s Report Relating to Statutory Reports

INDEPENDENT AUDITOR’S REPORTThe Board of Directors
KITO CORPORATION

May 17, 2021
PricewaterhouseCoopers Aarata LLC

Tokyo Office

Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Junji Ichihara (seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Mamoru Honda (seal)
OpinionPursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the accompanying financial
statements, which comprise the non-consolidated balance sheets, the non-consolidated statement of income, the nonconsolidated statement of changes in net assets and the notes to the non-consolidated financial statements, and theaccompanying supplementary schedules of KITO CORPORATION (the “Company”) for the 77th fiscal year from April 1, 2020
through March 31, 2021.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above present fairly,
in all material respects, the financial position of the Company as of March 31, 2021, and the results of its operations for theyear then ended in conformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under
the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying
Supplementary Schedules.” We are independent of the Company in accordance with the provisions related to professional
ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that we have obtained sufficient andappropriate audit evidence to provide a basis for our audit opinion.
Responsibilities of Management, the Corporate Auditors and the Board of Corporate Auditors for the Financial Statements
and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and the accompanying
supplementary schedules in accordance with accounting principles generally accepted in Japan, and for designing andoperating such internal control as management determines is necessary to enable the preparation and fair presentation of
the financial statements and the accompanying supplementary schedules that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements and the accompanying supplementary schedules, management is responsible forassessing whether it is appropriate to prepare the financial statements and the accompanying supplementary schedules inaccordance with the premise of a going concern, and for disclosing matters relating to going concern when it is required to
do so in accordance with accounting principles generally accepted in Japan.
The Corporate Auditors and the Board of Corporate Auditors are responsible for monitoring the execution of Directors’
duties related to designing and operating the financial reporting process.

49

Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying Supplementary Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and the accompanying
supplementary schedules as a whole are free from material misstatement, whether due to fraud or error, and to express an
opinion on the financial statements and the accompanying supplementary schedules from an independent standpoint in anaudit report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemed material if they canbe reasonably expected to, either individually or collectively, influence the decisions of users taken on the basis of thefinancial statements and the accompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally accepted inJapan, and perform the following while maintaining professional skepticism.
・ Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit
procedures to address the risks of material misstatement. The audit procedures shall be selected and applied asdetermined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained to provide a basis forthe audit opinion.
・ In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order to design
audit procedures that are appropriate in the circumstances, although the purpose of the audit of the financial statements
and the accompanying supplementary schedules is not to express an opinion on the effectiveness of the entity’s internal
control.
・ Assess the appropriateness of accounting policies adopted by management and the method of their application, as wellas the reasonableness of accounting estimates made by management and the adequacy of related notes.
・ D etermine whether it is appropriate for management to prepare the financial statements and the accompanying
supplementary schedules on the premise of a going concern and, based on the audit evidence obtained, determine
whether there is a significant uncertainty in regard to events or conditions that may cast significant doubt on the entity’s
ability to continue as a going concern. If there is a significant uncertainty concerning the premise of a going concern, theauditor is required to call attention to the notes to the financial statements and the accompanying supplementaryschedules in the audit report, or if the notes to the financial statements and the accompanying supplementary schedules
pertaining to the significant uncertainty are inappropriate, issue a modified opinion on the financial statements and theaccompanying supplementary schedules. While the conclusions of the auditor are based on the audit evidence obtained
up to the date of the audit report, depending on future events or conditions, an entity may be unable to continue as agoing concern.
・ B esides assessing whether the presentation of and notes to the financial statements and the accompanying
supplementary schedules are in accordance with accounting principles generally accepted in Japan, assess thepresentation, structure, and content of the financial statements and the accompanying supplementary schedules including
related notes, and whether the financial statements and the accompanying supplementary schedules fairly present thetransactions and accounting events on which they are based.
The auditor reports to the Corporate Auditors and the Board of Corporate Auditors regarding the scope and timing of
implementation of the planned audit, material audit findings including material weaknesses in internal control identified in
the course of the audit, and other matters required under the auditing standards.
The auditor reports to the Corporate Auditors and the Board of Corporate Auditors regarding the observance ofprovisions related to professional ethics in Japan as well as matters that are reasonably considered to have an impact on
the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles.
Interest
Our firm and engagement partners have no interests in the Company requiring disclosure under the provisions of theCertified Public Accountants Act of Japan.

50

Certified Copy of Audit Report of the Board of Corporate Auditors
AUDIT REPORTThe Board of Corporate Auditors, following review and deliberations on the audit reports made by each Corporate
Auditor concerning the execution of duties by Directors for the 77th fiscal term from April 1, 2020 to March 31, 2021, have
prepared this Audit Report, and hereby submit it as follows:1.

Auditing Methods and Contents of Audit by Corporate Auditors and Board of Corporate Auditors(1)	Board of Corporate Auditors established the auditing policies and division of duties, received reports and explanations
regarding the implementation status and results thereof from the respective Corporate Auditors, as well as reports andexplanations regarding the status of the execution of duties from Directors and the Accounting Auditor, and requested
explanations as necessary.
(2)	In accordance with the auditing standards for Corporate Auditors determined by the Board of Corporate Auditors andauditing policies and the division of duties, each Corporate Auditor made efforts to collect information and establishedauditing circumstances through communication with internal audit staff and other employees, and audits were
implemented in the following methods.
1) Each Corporate Auditor attended the Board of Directors meeting and other important meetings to receive reports
regarding execution of duties from Directors and employees, and requested explanations as necessary. Each
Corporate Auditor also inspected the approved documents and examined the status of operations and conditionsof assets at its Head Office and principal offices. Corporate Auditors received from subsidiaries their reports asnecessary through communication and information sharing with their Directors and Corporate Auditors.
2) With regard to the resolutions adopted by the Board of Directors regarding the establishment of the system forensuring that the Directors’ duties described in the business report are performed in conformity of laws, regulations
and the Articles of Incorporation of the Company as well as the establishment of the system necessary to ensure
proper business operations of the Corporate Group that comprises the Company and its subsidiaries as set forth inParagraphs 1 and 3 of Article 100 of Regulation for Enforcement of the Companies Act and the systems (Internal
Control System) established in accordance with the resolution of the Board of Directors, each Corporate Auditor
also received reports on a regular basis from Directors and employees regarding its status of design and operation,
requested explanations as necessary and expressed their opinions.
3) Corporate Auditors monitored and examined whether or not the Accounting Auditor is maintaining an independent
position and conducting the audits appropriately, and also obtained reports and requested explanations asnecessary on the status of execution of duties from the Accounting Auditor. In addition, Corporate Auditors were
informed by the Accounting Auditor the “the system to ensure the duties are performed properly” (the matters
stipulated in the respective items of Article 131 of Regulation on Corporate Accounting) has been implemented inaccordance with the “quality management standards concerning audits” (Business Accounting Council, October 28,2005), and requested explanations as necessary.
In accordance with the aforementioned procedures, the Corporate Auditors reviewed the business report,
supplementary schedules thereto, the statutory reports (non-consolidated balance sheets, non-consolidated statement ofincome, non-consolidated statement of changes in net assets, notes to the non-consolidated financial statements),
supplementary schedules thereto, and consolidated statutory reports (consolidated balance sheets, consolidated statementof income, consolidated statement of changes in net assets, and notes to the consolidated financial statements) for the year
ended on March 31, 2021.

51

2.

Results of Audit(1) Results of Audit on Business Report, etc.
1) The business report and supplementary schedules thereto fairly present the financial condition of the Company inaccordance with the laws, regulations and the Articles of Incorporation of the Company.
2) Regarding the execution of duties by Directors, there were no instances of misconduct or material matters inviolation of laws, regulations, or the Articles of Incorporation of the Company.
3) The contents of resolutions by the Board of Directors with regard to the internal control system are reasonable.
Additionally, regarding the description of the relevant internal control system in the business report and theexecution of duties by Directors under the relevant internal control system, there are no matters to be pointed out.
(2) Results of audit of the nonconsolidated statutory reports and supplementary schedules thereto		 The auditing methods and results of the Accounting Auditor, PricewaterhouseCoopers Aarata LLC are fair andreasonable.
(3) Results of audit of the consolidated statutory reports		 The auditing methods and results of the Accounting Auditor, PricewaterhouseCoopers Aarata LLC are fair andreasonable.
May 17, 2021

Board of Corporate Auditors of KITO CORPORATION
Standing Corporate Auditor
Outside Corporate Auditor
Outside Corporate Auditor

Kentaro Yoneyama (seal)
Kiyohito Hamada (seal)
Eiko Hakoda (seal)52