This document has been translated from the Japanese original version for the reference and convenience of non-Japaneseshareholders without any warranty for its accuracy or otherwise. In the event of any discrepancy between this translation
version and the Japanese original version, the Japanese original shall prevail.

Securities identification code: 6376
March 10, 2021

To our shareholders:Toshihiko Kai

President & Representative Director

NIKKISO CO., LTD.
4-20-3 Ebisu, Shibuya-ku, TokyoNOTICE OF THE 80TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
We are pleased to announce the 80th Ordinary General Meeting of Shareholders of NIKKISO CO., LTD.
(the “Company”), which will be held as described below.
To prevent the spread of novel coronavirus disease (COVID-19), we ask that all shareholders exercise
their voting rights in advance by postal mail or via the Internet as much as possible (see Page 3). Pleaseindicate your approval or disapproval of the proposals on the enclosed voting form after reviewing theattached Reference Documents for the General Meeting of Shareholders, and return it by postal mail or
via the Internet to reach us no later than 5:30 p.m., Monday, March 29, 2021 (Japan Standard Time).

Meeting Details
1.

Date and time:

Tuesday, March 30, 2021, at 10:00 a.m. (Japan Standard Time)(The reception desk will open from 9:00 a.m.)2.

Venue:

Nikkiso Higashimurayama Plant, R&D Center
Multi-Purpose Bldg. 7F, Conference Room
2-16-2 Noguchi-cho, Higashimurayama-shi, Tokyo* As was the case for last year’s meeting, the number of seats available thisyear will be fewer than in normal years to provide spacing between seats so
as to prevent the spread of COVID-19. Consequently, some shareholders
may not be permitted entry to the venue on the day of the meeting. We ask
for your understanding in this matter.

3.

Purposes:
Items to be reported:
1. Business Report and Consolidated Financial Statements for the 80th Term (from January 1,
2020 to December 31, 2020), as well as the results of audits of the Consolidated Financial
Statements by the Accounting Auditors and the Audit & Supervisory Board
2. Non-Consolidated Financial Statements for the 80th Term (from January 1, 2020 to
December 31, 2020)
Items to be resolved:
Proposal 1:
Election of seven (7) Directors
Proposal 2:
Election of two (2) Audit & Supervisory Board Members

14.

Other decisions concerning convocation of this General Meeting of Shareholders(1)

Voting by postal mail(2)

Voting via the Internet(3)

Voting by multiple methods
such as by postal mail andvia the Internet(4)

Voting multiple times via
the Internet

Please follow the “Instructions on How to Exercise Voting Rights”(Page 3), indicate your approval or disapproval of each proposal on theenclosed voting form, and return it by mail to reach us by the below
deadline.
Monday, March 29, 2021, at 5:30 p.m. (Japan Standard Time)
Please follow the “Instructions on How to Exercise Voting Rights via
the Internet” (Page 4, Japanese only), and exercise your voting rights
by the below deadline from the voting website designated by theCompany (https://www.web54.net).
Monday, March 29, 2021, at 5:30 p.m. (Japan Standard Time)If you have exercised your voting rights through multiple methods suchas by postal mail and via the Internet, etc., the vote that has reached theCompany last shall be deemed effective.
However, if voting rights are exercised by postal mail and via theInternet on the same date, the exercise of voting rights via the Internet
shall be deemed effective.
If you exercise your voting rights multiple times via the Internet, thelast exercise shall be deemed effective.

 If you will attend the meeting, please submit the enclosed voting form at the reception desk of the General
Meeting of Shareholders.
* To prevent the spread of COVID-19, the staff of the Company who are administering the general
meeting of shareholders will wear masks. Also, alcohol-based sanitizer will be available close to venue
entrances and exits. We ask that all shareholders considering attending the meeting cooperate byspraying their hands and fingers with alcohol-based sanitizer and wearing a mask. Uncooperative
shareholders may not be permitted entry to the venue. Note that factory tours will not be held after thegeneral meeting. We ask for your understanding in this matter.
 Of the documents to be submitted upon this notification, the following matters are posted on the Company’s
website (https://www.nikkiso.co.jp) pursuant to laws and regulations as well as Article 19 of the Company’s
Articles of Incorporation, and thus these documents are not included in the attached documents.
1) Stock Acquisition Rights, Etc. of the Company; Overview of System to Ensure Business Appropriateness andOperation Status of Said System; and Basic Policy for Controlling the Company in the Business Report2) Notes to the Consolidated Financial Statements
3) Notes to the Non-Consolidated Financial Statements
These items are included in the Business Report, Consolidated Financial Statements and Non-Consolidated
Financial Statements audited when the Audit & Supervisory Board Members prepare the Audit Report. In
addition, items 2) and 3) in the above are included in the Consolidated Financial Statements and NonConsolidated Financial Statements audited when the Accounting Auditors prepare the Accounting Audit Report.
 In the event of circumstances requiring amendments to the Business Report, Consolidated Financial Statements,
Non-Consolidated Financial Statements, and Reference Documents for the General Meeting of Shareholders, thematters that have been amended will be posted on the Company’s website (https://www.nikkiso.co.jp).

2

Instructions on How to Exercise Voting Rights
Voting rights can be exercised via the following three (3) methods.
To prevent the spread of COVID-19, we ask that all shareholders exercise their voting rights
in advance by postal mail or via the Internet as much as possible.
When exercising your voting rights by postal mail (voting form)
Please indicate your approval or disapproval of the proposals on the enclosed voting form, and thenreturn the form to us by postal mail without affixing a stamp.
Deadline forexercising yourvoting rights:

Must be received by the Company by 5:30 p.m. on Monday, March 29, 2021
(Japan Standard Time)

When exercising your voting rights via the Internet
Follow the instructions given under “Instructions on How to Exercise Voting Rights via the Internet”
on the next page (Japanese only). If you are unsure about exercising your voting rights via theInternet, please contact Stock Transfer Agency Web Support, Sumitomo Mitsui Trust Bank, Limited,
listed on the next page (Japanese only).
Deadline forexercising yourvoting rights:

Must be exercised by 5:30 p.m. on Monday, March 29, 2021 (Japan
Standard Time)

When attending the General Meeting of Shareholders
Please submit the enclosed voting form at the reception desk of the General Meeting of
Shareholders. (You are not required to sign and affix a seal on this form.)
Date and time:
Venue:

Tuesday, March 30, 2021, at 10:00 a.m. (Japan Standard Time)(The reception desk will open from 9:00 a.m.)
Nikkiso Higashimurayama Plant, R&D Center
Multi-Purpose Bldg. 7F, Conference Room
* Please refrain from coming to the venue by car.

3

Reference Documents for the General Meeting of Shareholders
Proposals and Reference Information

Proposal 1:

Election of seven (7) Directors

The terms of all of the current seven (7) Directors will expire at the conclusion of this Ordinary
General Meeting of Shareholders. The Company proposes that seven (7) Directors be elected in thenext term (81st Term).
The Directors of the Company have a fiduciary duty and accountability to the shareholders, and theyalso have a responsibility to sustainably grow the Company’s Group (“the Group”) and improve
medium- and long-term corporate value through the implementation of efficient and effective
corporate governance.
The candidates for Director are shown below. These candidates are nominated in accordance with
the Company’s Policies and Procedure for Nominating Candidates for Director (Page 18).
Current position andresponsibilities in the Company

Significant concurrent
positions outside theCompany

No.

Name

1

Toshihiko Kai

President & Representative
Director[Reelection]

2

YoshihikoKinoshita

Director, Executive Officer,
General Manager of Medical
Business Unit, and General
Manager of Medical Division[Reelection]

3

Shoichi Nagato

Director, Executive Officer,
General Manager of Aerospace
Business Unit, and General
Manager of Aerospace
Division[Reelection]

4

Masaru Yamamura Director, Executive Officer,
General Manager of Industrial
Business Unit, and General
Manager of Industrial Division[Reelection]

5

Susumu Koito

Director, Executive Officer,
General Manager of Corporate
Unit, General Manager of
Administration Division, andGeneral Manager of Corporate
Planning Division[Reelection]

6

Haruko Hirose

Outside Director

7

Mitsuaki Nakakubo Outside Audit & Supervisory
Board Member

President, Japan Morocco[Reelection]
Association[Independent Officer]
Outside Director, S&B Foods [Outside Officer]
Inc.
Outside Director,
MITSUBISHI GASCHEMICAL COMPANY,
INC.

4

Attorney (Partner, Asahi Law [New election]
Offices)[Independent Officer]
Outside Audit & Supervisory [Outside Officer]
Board Member, Nippon
Kodo Holdings Co., Ltd.
Outside Director, FANCLCORPORATION

Notes:1. There is no special interest between each candidate and the Company.
2. The name of Haruko Hirose in the family register is Haruko Makinouchi.
3. Summary of contents of liability insurance agreement for Directors and other officers to enter into withcandidates:
In order to establish an environment that promotes active and decisive decision-making and execution of duties of
Directors and other officers while ensuring that the execution of said duties remains appropriate, the Company
has entered into a liability insurance agreement for Directors and other officers of the Company and its Group
companies inside and outside of Japan with an insurance company in which the Company takes responsibility forthe entire insurance premium to compensate Directors and other officers for damages that may arise due to their
liability for the execution of their duties or due to being interrogated on said liability. When a candidate assumes
a position as a Director, said individual shall be covered by this insurance agreement. A summary of the contentsof this insurance agreement is as follows:
Insurance period
Insured parties
Exemptions
Planned update

One year from the commencement of the agreement
Directors and other officers of the Company and its Group companies inside and outsideof Japan (Directors, Audit & Supervisory Board Members, Executive Officers, etc.)
Personal profits or favors illegally obtained by the insured party, criminal acts of theinsured party, acts performed by the insured party with full knowledge that said acts areillegal, etc.
June 2021 with the same or similar terms and conditions

5

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

February 1996

General Manager of Dai-Ichi Kangyo
Bank Nederland N.V.

March 2000

Joined the Company

April 2001

Executive Officer of the Company

April 2002

President, Medical Equipment Unit
(currently Medical Division) of theCompany

June 2003

Director of the Company (present
position)

December 2004

President & Representative Director of
the Company (present position)

Toshihiko Kai(August 19, 1946)[Reelection]

Number of theCompany’s
shares owned

62,473[Position and areas of responsibility at the Company]
1

President & Representative Director[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Toshihiko Kai set management goals of (i) sustaining the Company’s position as a top supplier worldwide
that uses excellent technological capabilities for its primary business and (ii) becoming a strong profitablecorporate group, has exhibited strong leadership over many years and has executed multiple policies
designed for medium- to long-term growth in the Company’s primary business. Furthermore, in 2020—thefirst year of the first three years making up phase one of the “Nikkiso 2025,” new medium-term businessplan—he exhibited excellent management capabilities and steadily promoted the strengthening of thebusiness foundation as President amid increasing management unpredictability stemming from the global
spread of COVID-19. His powerful leadership and experienced management capability will continuously
enable him to realize the sustainable growth of the Group and to improve medium- and long-term corporate
value. As such, he is nominated as a candidate for Director.

6

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Yoshihiko Kinoshita(September 13, 1966)

April 1989

Joined the Company

October 2011

Deputy General Manager, Medical
Division of the Company

January 2016

General Manager of Medical Division of
the Company (present position)

October 2016

Director, Vice Chairman, Weigao
Nikkiso (Weihai) Dialysis Equipment
Co., Ltd. (the Company’s equity method
affiliated company in China) (present
position)January 2017

Executive Officer of the Company(present position)

March 2017

Director (present position) and in chargeof Medical Business Unit of theCompany

October 2017

CEO, Managing Director, Nikkiso
Europe GmbH (the Company’s
consolidated subsidiary in Germany)

January 2019

General Manager of Medical Business
Unit of the Company (present position)[Reelection]

2

Number of theCompany’s
shares owned

19,371[Position and areas of responsibility at the Company]
Director, Executive Officer, General Manager of Medical
Business Unit, and General Manager of Medical Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Yoshihiko Kinoshita has obtained extensive experience and made many achievements while in charge of theMedical Business for a long time. Furthermore, he has been responsible for the management of theCompany and the Group since assuming the position of Director of the Company in March 2017. Amid thestrict restrictions on business activities inside and outside of Japan due to the global spread of COVID-19,
he has vigorously worked in the field he is in charge of to implement various policies such as expanding theoverseas market for the hemodialysis business, promoting the sale of health care finished goods andreducing costs via work optimization. It has been determined that he can further strengthen the management
function and the supervisory function of the Board of Directors of the Company by using these experiences
and past results. As such, he is nominated as a candidate for Director.

7

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Shoichi Nagato(August 9, 1956)

October 1987

Joined the Company

April 2009

Executive Officer (present position),
General Manager of Aerospace Divisionof the Company

March 2016

President & Representative Director,
Nikkiso Giken Co., Ltd. (the Company’s
consolidated subsidiary)

October 2016

General Manager of Precision Equipment
Business Division of the Company

December 2017

General Manager of Aerospace Divisionof the Company (present position)

January 2019

General Manager of Aerospace Business
Unit of the Company (present position)
Chairman, Nikkiso Vietnam, Inc. (theCompany’s consolidated subsidiary in
Vietnam) (present position)

March 2019

Director of the Company (present
position)[Reelection]

3

Number of theCompany’s
shares owned

11,491[Position and areas of responsibility at the Company]
Director, Executive Officer, General Manager of Aerospace
Business Unit, and General Manager of Aerospace Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Shoichi Nagato has obtained extensive experience and made many achievements while in charge of thePrecision Equipment Business and Aerospace Business in the Industrial Business Unit of the Company.
Furthermore, he has been responsible for the management of the Company and the Group since assuming
the position of Director of the Company in March 2019. In response to the changes in the management
environment where the demand for aircraft has declined due to the global spread of COVID-19, he has
vigorously worked in the fields he is in charge of to implement various policies such as strengthening thebusiness structure via optimizing management resources and promoting research and development. It has
been determined that he can further strengthen the management function and the supervisory function of theBoard of Directors of the Company by using these experiences and past results. As such, he is nominated asa candidate for Director.

8

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

Masaru Yamamura

November 1990

Joined the Company

October 2009

General Manager of Business Promotion
Department, Medical Division of theCompany

July 2012

General Manager of Osaka Branch of theCompany

April 2017

General Manager of Industrial Divisionof the Company (present position)

January 2018

Executive Officer of the Company(present position)

January 2019

General Manager of Industrial Business
Unit of the Company (present position)

March 2019

Director of the Company (present
position)(May 27, 1965)[Reelection]

4

Number of theCompany’s
shares owned

11,879[Position and areas of responsibility at the Company]
Director, Executive Officer, General Manager of Industrial
Business Unit, and General Manager of Industrial Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Masaru Yamamura has obtained extensive experience and made many achievements while in charge of theIndustrial Business after holding successive important positions in the Medical Business. Furthermore, he
has been responsible for the management of the Company and the Group since assuming the position of
Director of the Company in March 2019. Amid the global spread of COVID-19 and the continuing decline
in demand for oil, he has vigorously worked in the field he is in charge of to implement various policies
such as strengthening the business structure to expand overseas business, strengthening after-sales services
and reducing costs. It has been determined that he can further strengthen the management function and thesupervisory function of the Board of Directors of the Company by using these experiences and past results.
As such, he is nominated as a candidate for Director.

9

No.

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)

Name (Date of birth)

April 1981

Joined the Company

April 2006

General Manager of Accounting &Finance Department of the Company

April 2007

General Manager of Human Resources
Department of the Company

July 2011

General Manager of Administration
Division, General Manager of Human
Resources Department of the Company

April 2012

Executive Officer (present position),
General Manager of Administration
Division, and General Manager of
Human Resources Department of theCompany

January 2019

General Manager of Corporate Unit of
the Company (present position)

March 2020

Director of the Company (present
position)January 2021

General Manager of Administration
Division, and General Manager ofCorporate Planning Division of theCompany (present position)

Susumu Koito(November 4, 1958)[Reelection]

5

Number of theCompany’s
shares owned

19,821[Position and areas of responsibility at the Company]
Director, Executive Officer, General Manager of Corporate
Unit, General Manager of Administration Division, andGeneral Manager of Corporate Planning Division[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Director]
Susumu Koito has obtained extensive experience and made many achievements in business management
such as financial affairs, human resources, legal affairs and general affairs. Furthermore, he has been
responsible for the management of the Company and the Group since assuming the position of Director of
the Company in March 2020. Amid the global spread of COVID-19, he has vigorously worked in the field
he is in charge of to thoroughly implement measures to track infection rates in Japan and overseas andprevent infection, and put in place personnel systems while actively implementing various policies,
including those to strengthen corporate governance and personnel management of the Group, support thepromotion of business, and strengthen the business management of the Group. It has been determined that
he can further strengthen the management function and the supervisory function of the Board of Directors of
the Company by using these experiences and past results. As such, he is nominated as a candidate for
Director.

10

No.

Name (Date of birth)

Haruko Hirose(September 23, 1945)

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)
December 1968

Appointed to the National Personnel
Authority of Japan

January 1992

Director, Bureau of Human Resources
Management of Headquarters, United
Nations Educational, Scientific andCultural Organization (UNESCO)

September 2002

Deputy to the Director General andManaging Director of Programme
Coordination and Field Operations
Division, United Nations Industrial
Development Organization (UNIDO)

November 2006

Japanese Ambassador Extraordinary andPlenipotentiary to Kingdom of Morocco

May 2014

President, Japan Morocco Association(present position)

June 2016

Outside Director, S&B Foods Inc.
(present position)

March 2018

Outside Director of the Company(present position)

June 2020

Outside Director, MITSUBISHI GASCHEMICAL COMPANY, INC. (present
position)[Reelection][Independent Officer][Outside Officer]

6

Number of theCompany’s
shares owned

2,875[Position and areas of responsibility at the Company]
Outside Director[Significant concurrent positions outside the Company]
President, Japan Morocco Association
Outside Director, S&B Foods Inc.
Outside Director, MITSUBISHI GAS CHEMICALCOMPANY, INC.
[Reasons for selection as a candidate for Outside Director]
Haruko Hirose possesses extensive international experience and advanced knowledge about personnel
development, acquired by providing meritorious service in areas such as personnel, financial affairs andindustrial development for the United Nations and by endeavoring in activities for developing personnel
who are active on the world stage. She has performed duties as an Outside Director of the Company since
March 2018, primarily providing beneficial suggestions regarding items such as the development ofinternationally active personnel and engineers and the promotion of diversity including the activities offemale personnel. It has been determined that she can provide instructions and advice for the managementof the Company and supervise management from an objective, independent and fair point of view by using
these experiences and past results. As such, she is nominated as a candidate for Outside Director. Although
she has not been involved in corporate management in the past except as an Outside Officer, it has been
determined that she will appropriately fulfill her duties as an Outside Director for the reasons outlined
above.
Note:

Haruko Hirose is a candidate to be our Outside Director.
Summary of contents of limited
The Company has executed with her, pursuant to the provisions ofliability agreement
Articles of Incorporation for an Outside Director, a limited
liability agreement that provides that the higher amount of either
five (5) million yen or the minimum total liability specified bylaws and regulations shall be the maximum amount of liability fordamages. When she assumes the position of Outside Director, theCompany plans to maintain the limited liability agreement.
Tenure as Outside Director

She is currently one of the Company’s Outside Directors, and she
will have been in this position for three (3) years at the conclusionof this Ordinary General Meeting of Shareholders.

11Notification of Independent Officer

At the current time, the Company has registered her with theTokyo Stock Exchange, Inc. as an Independent Officer. When she
assumes the position of Outside Director, the Company plans tocontinue registering her as an Independent Officer.

12

No.

Name (Date of birth)

Career summary, position and areas of responsibility(significant concurrent positions outside the Company)
April 1995

Registered as an attorney of Japan(affiliated with the Daini Tokyo Bar
Association) (to present)

April 2001

Partner, Asahi Law Offices (present
position)

June 2008

Substitute Audit & Supervisory Board
Member of the Company

October 2011

Auditor, Bicycle Parking Facilities
Provision Foundation, a public interest
incorporated foundation

June 2015

Outside Audit & Supervisory Board
Member of the Company (present
position)

June 2017

Outside Audit & Supervisory Board
Member, Nippon Kodo Holdings Co.,
Ltd. (present position)

June 2019

Outside Director, FANCLCORPORATION (present position)

Mitsuaki Nakakubo(November 24, 1966)[New election][Independent Officer][Outside Officer]
7

Number of theCompany’s
shares owned

5,883[Position and areas of responsibility at the Company]
Outside Audit & Supervisory Board Member[Significant concurrent positions outside the Company]
Attorney (Partner, Asahi Law Offices)
Outside Audit & Supervisory Board Member, Nippon Kodo
Holdings Co., Ltd.
Outside Director, FANCL CORPORATION[Reasons for selection as a candidate for Outside Director]
As an attorney, Mitsuaki Nakakubo has mainly acted in areas such as disputes on officers’ liability,
copyright-related matters, matters related to the Unfair Competition Prevention Act of Japan, and mattersrelated to real estate. Furthermore, he has performed duties as an Outside Audit & Supervisory Board
Member of the Company since June 2015, primarily providing beneficial suggestions regarding items suchas labor issues, foreign and domestic legislation, compliance and corporate governance. It has been
determined that he can provide instructions and advice for the management of the Company and supervise
management in an objective, independent and fair manner using these experiences and past results. As such,
he is nominated as a candidate for Outside Director. Although he has not been involved in corporate
management in the past except as an Outside Officer, it has been determined that he will appropriately
fulfill his duties as an Outside Director for the reasons outlined above.
Note:

Mitsuaki Nakakubo is a candidate to be our Outside Director.
Summary of contents of limited
The Company has currently executed with him, pursuant to theliability agreement
provisions of Articles of Incorporation for an Outside Audit &Supervisory Board Member, a limited liability agreement thatprovides that the higher amount of either three (3) million yen or
the minimum total liability specified by laws and regulations shallbe the maximum amount of liability for damages. If he assumes
the position of Outside Director, the Company plans to executewith him, pursuant to the provisions of Articles of Incorporation
for an Outside Director, a limited liability agreement that provides
that the higher amount of either five (5) million yen or theminimum total liability specified by laws and regulations shall be
the maximum amount of liability for damages.
Tenure as Audit & Supervisory Board He is currently one of the Company’s Outside Audit &MemberSupervisory Board Members, and he will have been in thisposition for five (5) years and nine (9) months at the conclusion ofthis Ordinary General Meeting of Shareholders. He will retire

13

from office as Audit & Supervisory Board Member at theconclusion of this meeting due to his resignation.
Notification of Independent Officer

At the current time, the Company has registered him with theTokyo Stock Exchange, Inc. as an Independent Officer. When heassumes the position of Outside Director, the Company plans tocontinue registering him as an Independent Officer.

(Reference) Planned Positions and Areas of Responsibility After Election
If this proposal is approved and adopted in its original form, each candidate will assume the position as follows:1
Toshihiko Kai
President & Representative Director
2

Yoshihiko Kinoshita

3

Shoichi Nagato

4

Masaru Yamamura

5

Susumu Koito

6

Haruko Hirose

Director, Executive Officer, General Manager of Medical Business
Unit, and General Manager of Medical Division
Director, Executive Officer, General Manager of Aerospace Business
Unit, and General Manager of Aerospace Division
Director, Executive Officer, General Manager of Industrial Business
Unit, and General Manager of Industrial Division
Director, Executive Officer, General Manager of Corporate Unit,
General Manager of Administration Division, and General Manager
of Corporate Planning Division
Outside Director

7

Mitsuaki Nakakubo

Outside Director

14

Proposal 2:

Election of two (2) Audit & Supervisory Board Members

Akira Ohsawa, who is currently an Audit & Supervisory Board Member, will leave office due toresignation at the conclusion of this Ordinary General Meeting of Shareholders. Additionally,
Mitsuaki Nakakubo, who is currently an Outside Audit & Supervisory Board Member, will assume
the position of Outside Director in the event that Proposal 1 of this Ordinary General Meeting of
Shareholders is approved and adopted in its original form. As such, he will leave office as an Audit& Supervisory Board Member at the conclusion of this meeting due to his resignation, so theCompany proposes the election of two (2) new Audit & Supervisory Board Members.
The Audit & Supervisory Board Members and the Audit & Supervisory Board of the Company havea fiduciary duty to the shareholders and have the main duty of, from a position independent of the
Directors and the Board of Directors, effectively auditing the Directors and the Board of Directors toensure that they fulfill their duties in a legal and appropriate manner.
The candidates for Audit & Supervisory Board Member are shown below. These candidates arenominated in accordance with the Company’s Policies and Procedure for Nominating Candidates for
Audit & Supervisory Board Member (Page 18).
In addition, the Audit & Supervisory Board has given its consent to this proposal.

No.

Career summary and position(significant concurrent positions outside the Company)

Name (Date of birth)

Hiroaki Asakura(July 29, 1962)

April 1985

Joined the Company

April 2007

General Manager of Plant Sales
Department, General Project
Headquarters, Fluid Technologies Unit
(currently Industrial Division) of theCompany

July 2013

General Manager of Human Resources
Department of the Company

January 2016

General Manager of Industrial Divisionof the Company

July 2017

General Manager of Higashimurayama
Plant of the Company (present position)[New election]
1

Number of theCompany’s
shares owned

8,273[Position at the Company]
General Manager of Higashimurayama Plant[Significant concurrent positions outside the Company]–[Reasons for selection as a candidate for Outside Audit & Supervisory Board Member]
Hiroaki Asakura has been in charge of the Industrial Business for a long time and has obtained extensive
experience, made many achievements and is thoroughly knowledgeable regarding business management,
including in the Industrial Business, as he has built his career as General Manager of the Human Resources
Department and General Manager of the Higashimurayama Plant in addition to holding successive important
positions, primarily in the Sales Department. From these experiences and past results, it has been determinedthat he can appropriately audit the performance of duties by Directors in an objective, independent and fairmanner. As such, he is nominated as a new candidate for Audit & Supervisory Board Member.

15

No.

Name (Date of birth)

Career summary and position(significant concurrent positions outside the Company)
April 1968

Joined Japan CIOS Association

September 1970

Joined Distribution Industry ResearchInstitute, The Seibu Department Stores,
Ltd.

April 1994

Associate Professor, Josai International
University

April 1998

Professor, Josai International University

March 2001

Director, Japan Center for Area
Development Research

July 2009

Director, Japan Industrial Association

June 2014

Director, The Defense of Green Earth
Foundation (present position)

Junko Fukuda(June 22, 1945)[New election][Independent Officer]

April 2016

Visiting Professor, Josai International
University

August 2020

Committee Member, Yokohama-shi
Central Wholesale Market establishment
management meeting (present position)[Outside Officer]
2

Number of theCompany’s
shares owned

100[Position at the Company]
To be elected as Audit & Supervisory Board Member[Significant concurrent positions outside the Company]
Director, The Defense of Green Earth Foundation
Committee Member, Yokohama-shi Central Wholesale
Market establishment management meeting[Reasons for selection as a candidate for Outside Audit & Supervisory Board Member]
Junko Fukuda engaged in teaching and research for a long time at Josai International University,
specializing in management studies, marketing and distribution. From this and important positions held at
various organizations promoting environmental conservation and regional development, she has obtained
extensive specialized knowledge and experience in management and ESG. From these experiences and past
results, it has been determined that she can appropriately audit the performance of duties by Directors in an
objective, independent and fair manner. As such, she is nominated as a new candidate for Outside Audit &Supervisory Board Member. Although she has not been involved in corporate management in the past
except as an Outside Officer, it has been determined that she will appropriately fulfill her duties as an
Outside Audit & Supervisory Board Member for the reasons outlined above.
Notes:
1. There is no special interest between each candidate and the Company.
2. Summary of contents of limited liability agreement with Hiroaki Asakura
When he assumes the position of Audit & Supervisory Board Member, the Company plans to execute with him,
pursuant to the provisions of Articles of Incorporation, a limited liability agreement that provides that the higher
amount of either three (3) million yen or the minimum total liability specified by laws and regulations shall be
the maximum amount of liability for damages.
3. Junko Fukuda is a candidate to be our Outside Audit & Supervisory Board Member.
Summary of contents of limited
When she assumes the position of Audit & Supervisory Board
liability agreement
Member, the Company plans to execute with her, pursuant to theprovisions of Articles of Incorporation, a limited liability
agreement that provides that the higher amount of either three (3)million yen or the minimum total liability specified by laws andregulations shall be the maximum amount of liability for damages.
Notification of Independent Officer

When she assumes the position of Outside Audit & Supervisory
Board Member, the Company plans to register her with the Tokyo
Stock Exchange, Inc. as an Independent Officer.
4. Summary of contents of liability insurance agreement for Directors and other officers to enter into with eachcandidate16

In order to establish an environment that promotes active and assertive execution of duties of Directors and otherofficers while ensuring that the execution of said duties remains appropriate, the Company has entered into aliability insurance agreement for Directors and other officers of the Company and its Group companies inside andoutside of Japan with an insurance company in which the Company takes responsibility for the entire insurance
premium to compensate Directors and other officers for damages that may arise due to their liability for the
execution of their duties or due to being interrogated on said liability. When each candidate assumes a position as
an Audit & Supervisory Board Member, each candidate shall be covered by this insurance agreement. A
summary of the contents of this insurance agreement is as follows:
Insurance period
Insured parties
Exemptions
Planned update

One year from the commencement of the agreement
Directors and other officers of the Company and its Group companies inside and outsideof Japan (Directors, Audit & Supervisory Board Members, Executive Officers, etc.)
Personal profits or favors illegally obtained by the insured party, criminal acts of theinsured party, acts performed by the insured party with full knowledge that said acts areillegal, etc.
June 2021 with the same or similar terms and conditions(Reference)

Composition of the Audit & Supervisory Board if This Proposal Is Approved in Its OriginalForm
If this proposal is approved and adopted in its original form, the composition of the Audit & Supervisory
Board shall be as follows. The current number of board members (two (2) Audit & Supervisory Board
Members and two (2) Outside Audit & Supervisory Board Members) shall remain unchanged.
Position

Name

Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberIndependent Officer
Outside Audit & Supervisory
Board Member

Toshiaki Mitsumi

Independent Officer
Outside Audit & Supervisory
Board Member

Junko Fukuda

Significant concurrent positions outside theCompany

Hiroaki Asakura
Hiroyuki Muneta

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Representative Director, Biotech System
Machinery Co., Ltd.
Certified public accountant
Licensed tax accountant
Outside Audit & Supervisory Board
Member, InterPia Co., Ltd.
Director, The Defense of Green Earth
Foundation
Committee Member, Yokohama-shi Central
Wholesale Market establishment
management meeting(Reference) Policies and Procedure for Nominating Candidates for Director and Audit &Supervisory Board Member<Criteria for the Election of Directors>➢ For a Director, we designate a person who has knowledge, capability and leadership that will
enable him or her to gain an overview of the management environment of our Group, promote
important management issues speedily and decisively, and achieve results, and who can becommitted to establish corporate governance that supports the realization of our corporate
philosophy.
<Criteria for the Election of Audit & Supervisory Board Members>➢ For an Audit & Supervisory Board Member, we designate a person who can perform businessaudits and accounting audits as well as actively exercise his or her authority and give
appropriate opinions at the Board of Directors. Furthermore, at least one (1) Audit &Supervisory Board Member shall possess appropriate expertise related to financial affairs andaccounting.
<Criteria for the Election, Independence Judgment Criteria and Concurrent Post Restrictions of
Outside Officers>➢ For an Outside Director, we designate a person who can sufficiently fulfill his or her role insupervising the decision-making and execution of duties of Directors from an objective andexpert standpoint independent from the execution of the Company’s operations while clearlyproviding advice based on his or her knowledge in order to promote the sustainable growth of
the Group and improve medium- and long-term corporate value.
➢ For an Outside Audit & Supervisory Board Member, we designate a person who cansufficiently fulfill his or her role in auditing the decision-making and execution of duties of
Directors from an objective and expert standpoint independent from the execution of theCompany’s operations while providing instructions and advice related to items such as
management strategy risks on the basis of extensive expertise.
➢ The independence of Outside Officers shall be judged strictly in accordance with theindependence criteria of Tokyo Stock Exchange, Inc.
➢ Independent Outside Officers shall not concurrently hold positions as Director or Audit &Supervisory Board Member at more than three (3) public companies other than the Company asa general rule.
<Procedure for Nominating Candidates for Director and Audit & Supervisory Board Member>➢ The Company shall explain the candidates to the Independent Outside Officers and receive theiradvice on the nominations in advance.

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(Reference) Nikkiso Group Corporate Governance System
1. Basic Approach concerning Corporate Governance
The Group believes that structuring the Company as a company with an Audit & Supervisory
Board is an important step towards achieving our ideal corporate governance through which we
can secure transparency and fairness in decision-making while realizing our corporate philosophy
through speedy and decisive decision-making. In line with the following basic approach, we will
construct the appropriate corporate governance that conforms to the development stage of theGroup.
(i) Respect the rights of our shareholders and ensure equality to them.
(ii) Respect the profits of the stakeholders and cooperate appropriately with them.
(iii) Disclose the information of the Group appropriately to ensure transparency.
(iv) Endeavor to separate the supervision and execution of management.
Ensure effective supervision and auditing of management through cooperation among
Independent Outside Officers, the Accounting Auditors and Internal Auditors. In addition,
establish within the Group an environment in which the operations business unit can focus
on the improvement of business profitability.
(v) Have constructive conversations with shareholders with an investment policy that meets themedium- and long-term profits of shareholders.
2. Composition and Duties of the Board of Directors
In accordance with the Articles of Incorporation, the Board of Directors shall be made up of nine(9) or less Directors, two (2) or more of which are independent Outside Directors. The Board of
Directors has a fiduciary duty and accountability to the shareholders. It also has a duty tosustainably grow the Group and it aims to maximize medium- and long-term corporate value
through the implementation of efficient and effective corporate governance. The Board of
Directors serves the following roles to fulfill these duties.
(i) Indicating major management directions such as management strategies(ii) Establishing corporate structures that support speedy and decisive management decisions(iii) Demonstrating supervisory functions for the whole of management in order to secure
fairness and transparency in management
3. Duties of the Audit & Supervisory Board
The Audit & Supervisory Board Members and the Audit & Supervisory Board have a fiduciary
duty to the shareholders and have the main duty of, from a position independent of the Directors
and the Board of Directors, auditing the Directors and the Board of Directors to ensure that they
fulfill their duties in a legal and appropriate manner. To fulfill these duties, Audit & Supervisory
Board Members and the Audit & Supervisory Board not only exercise the authority permitted bylaws and regulations in an active and assertive manner but also work in close cooperation with
Outside Directors and the Accounting Auditors in order to improve sustainable growth andmedium- and long-term corporate value of the Group. Furthermore, without excessively
restraining their own functions, they appropriately offer opinions on management to the Board of
Directors and the management team.
4. Reason for Adopting an Organization as a Company with an Audit & Supervisory Board
As a company with an Audit & Supervisory Board, the Company shall not only transfer theauthority for the execution of individual business operations from the Board of Directors to theoperations business unit wherever possible but shall also establish and improve a system for theeffective supervision and auditing of management through cooperation between Full-time Audit& Supervisory Board Members, Independent Outside Officers, Internal Auditors and the
Accounting Auditors.

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The existence of Full-time Audit & Supervisory Board Members thoroughly knowledgeable in thebusiness and organization of the Group effectively complements the independent and objective
supervision of management by Independent Outside Officers and is also useful in daily
cooperation between the Accounting Auditors and Internal Auditors in the Company.
Furthermore, it is vital to provide Independent Outside Officers with information pertaining to the
execution of business so as to allow for supervision by said officers. The existence of Full-time
Audit & Supervisory Board Members helps realize this provision of information.
5. Initiatives to Improve the Effectiveness of the Board of Directors
The Company is working to promote the strengthening of corporate governance of the Group andto enhance fairness and transparency in management, thereby leading to improvement incorporate value. In order to bring this about, the Company is strengthening the supervisionfunction of the Board of Directors through implementing initiatives to improve the effectivenessof the Board of Directors.
Over the period from November to December 2020 during this fiscal year under review, aquestionnaire was issued to all Directors and Audit & Supervisory Board Members, including
Outside Officers, for their response on the following: composition, operation and status of
discussions by the Board of Directors (particularly those concerning management strategy) of theBoard of Directors, response to issues identified from effectiveness evaluation of the previous
fiscal year, and officer training opportunities. An evaluation of the effectiveness of the Board of
Directors overall was then implemented.
As a result, the evaluation concluded that in response to the effectiveness evaluation of theprevious fiscal year, various measures had been implemented to distribute meeting materials
earlier, enhance the details of those materials and enhance education for officers. To further
enhance the effectiveness, we will work on achieving further improvements, including efforts toenhance and broaden the provision of information and support for Outside Officers.

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