This document has been translated from the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail. The
Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages
arising from the translation.

Securities code: 7769
June 6, 2024
(Start date of measures for electronic provision: May 30, 2024)
To Shareholders with Voting Rights:
Takeo Yumoto
President and Representative
Director

RHYTHM CO., LTD.

299-12, Kitabukurocho 1-chome,
Omiya-ku, Saitama-shi, Saitama,Japan

NOTICE OF
THE 4th ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
We hereby inform you that the 4th Annual General Meeting of Shareholders of RHYTHM CO., LTD.
(the “Company”) will be held as described below. You are cordially invited to attend the meeting.
For the convocation of this General Meeting of Shareholders, the Company has taken measures forelectronic provision. The information contained in the Reference Documents for the General Meeting of
Shareholders (matters for electronic provision) is posted on the websites indicated in “4. Websites where
Matters for Electronic Provision are Posted” (Japanese only). Please access and verify this information.
If you are unable to attend the meeting in person, you may exercise your voting rights via the Internet,
etc., or in writing. We respectfully request that you exercise your voting rights by either of thesemethods. The details of each agenda item can be found in the Reference Documents for the General
Meeting of Shareholders posted on the websites mentioned in “4. Websites where Matters for Electronic
Provision are Posted” (Japanese only). Please review these documents and, following the instructions
below, exercise your voting rights by 5:45 PM on Thursday, June 20, 2024, Japan time.
1. Date and Time:

Friday, June 21, 2024 at 10:00 a.m. Japan time
(Reception will open at 9:00 a.m. Japan Time.)

2. Place:

Emerald 2F, Hotel Brillante Musashino,
2-2 Shintoshin, Chuo-ku, Saitama-shi, Saitama(The venue has changed from the previous year. Please check the back of thisnotice.)3. Meeting Agenda:
Matters to be reported:1. The Business Report and Consolidated Financial Statements for theCompany’s 4th Fiscal Year (April 1, 2023 - March 31, 2024) and resultsof audits by the Accounting Auditor and the Audit and Supervisory
Committee of the Consolidated Financial Statements
2. Non-consolidated Financial Statements for the Company’s 4th Fiscal
Year (April 1, 2023 - March 31, 2024)
Proposals to be resolved: [Company proposals] (Proposals 1 to 3)
Proposal 1: Appropriation of Surplus
Proposal 2: Election of Six (6) Directors (Excluding Directors Who Are Audit andSupervisory Committee Members)-1-

Proposal 3: Election of Five (5) Directors Who Are Audit and Supervisory Committee
Members[Shareholder proposal]
Proposal 4: Appropriation of Surplus-2-

Reference Documents for the General Meeting of Shareholders
Proposal 1:

Appropriation of Surplus

The Company proposes to pay year-end dividends for the fiscal year as described below, in
consideration of performance for the fiscal year, future business development and other factors inaccordance with the Company’s basic dividend policy.
(1) Type of dividend assets
Cash(2) Allocation of dividend assets to the shareholders and total amount of dividends
Amount per share of common stock: ¥48.50
Total amount of dividends: ¥400,376,230(3) Effective date of dividends of surplus
June 21, 2024

(4) Date of commencement of payment of dividends
July 12, 2024

-3-

Proposal 2:

Election of Six (6) Directors (Excluding Directors Who Are Audit and Supervisory
Committee Members)

The terms of office of all four (4) Directors (excluding Directors who are Audit and Supervisory
Committee Members) will expire at the conclusion of this Annual General Meeting of Shareholders.
Therefore, to strengthen the control of and cooperation among individual divisions, the Company
proposes to increase the number of Directors (excluding Directors who are Audit and Supervisory
Committee Members) by two (2) and hereby requests the election of six (6) Directors (excluding
Directors who are Audit and Supervisory Committee Members).
The candidates for Directors (excluding Directors who are Audit and Supervisory Committee
Members) are as follows.
Number of
Name
Career summary, positions, responsibilities,
No.
sharesof the(Date of birth)and significant concurrent positions
Company held
Joined KYOSHIN KOGYO CO., LTD. (later
March 1978
renamed RHYTHM KYOSHIN CO., LTD.; current
RHYTHM CO., LTD.)Managing Director, KYOSHIN KOGYO CO.,
June 2006
LTD.
Vice President and Representative Director,
June 2009
KYOSHIN KOGYO CO., LTD.
June
2010
President and Representative Director, KYOSHIN
Hiromi Hirata
KOGYO CO., LTD.
(May 12, 1955)
President, Representative Director, and Chief
August 2011
60,307
Male
Executive Officer, KYOSHIN KOGYO CO., LTD.
President and Representative Director, RHYTHM
June 2013[Reappointment]
KYOSHIN CO., LTD.
Director in charge of the Connected Terminal
June 2013
Division, the Company
June 2016
Director and Managing Executive Officer in charge
1of the Connected Terminal Division, the Company
April 2019
President and Representative Director, the Company
April 2023
Chairman and Director, the Company (to thepresent)[Reason for nomination as candidate for Director and expected roles]
Since the integration of KYOSHIN KOGYO CO., LTD. into the Group in 2011, Mr. Hiromi Hirata has
dedicated himself to the business management and integration of the Group. In addition, he possesses abundant
experience and expertise in corporate management, having led the growth of the current RHYTHM CO., LTD.
after serving as Representative Director of RHYTHM KYOSHIN CO., LTD., Executive Officer in charge of
the Company’s Connected Terminal Division, and then as President and Representative Director from April
2019 to March 2023.
The Company has judged that he remains an appropriate person to further enhance the Group’s corporate
value and strengthen the supervisory function of the Board of Directors, and hereby requests his reelection as a
Director.
[Attendance at the Board of Directors meetings]
17 out of 17 meetings (100.0%)

-4-

No.

Name
(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Joined the Company
Director, the Company
President and Representative Director, RHYTHM
INDUSTRIAL (H.K.) LTD.
President and Representative Director, RHYTHM
January 2011
INDUSTRIAL (DONG GUAN) LTD.
President and Representative Director, Tohoku
Takeo Yumoto
June 2012
Rhythm CO., LTD. (current RHYTHM CO., LTD.)(February 6, 1955)
June
2013
Directorin charge of the Precision Division, the14,700Male
Company
June 2019
Director and Managing Executive Officer in charge[Reappointment]of the Precision Division, the Company
October 2020
Director and Senior Executive Officer, and General
Manager of Production Headquarters, the Company
Executive Vice President and Director, and General
April 2022
Manager of Production Headquarters, the Company
April 2023
President and Representative Director, the Company(to the present)[Reason for nomination as candidate for Director and expected roles]
Mr. Takeo Yumoto possesses abundant experience and expertise in corporate management. After engaging
in management as the Representative Director of Tohoku Rhythm CO., LTD., he served as the Director in
charge of the Precision Division from 2013 and led the Company’s manufacturing overall as the Director in
charge of Production Headquarters management from 2020. Following a stint as an Executive Vice President
and Director, he currently demonstrates his leadership and acumen in the overall management of the Group as
President and Representative Director.
The Company has judged that he remains an appropriate person to further enhance the Group’s corporate
value and strengthen the supervisory function of the Board of Directors, and hereby requests his reelection as a
Director.
[Attendance at the Board of Directors meetings]
17 out of 17 meetings (100.0%)
April 1973
June 2004
April 20092

Number ofshares of theCompany held

-5-

No.

Name
(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Joined KYOSHIN KOGYO CO., LTD. (later
renamed RHYTHM KYOSHIN CO., LTD.; current
RHYTHM CO., LTD.)
Director, KYOSHIN KOGYO CO., LTD.
June 2011
June 2013
Managing Director, RHYTHM KYOSHIN CO.,LTD. (current RHYTHM CO., LTD.)
Senior Managing Director, RHYTHM KYOSHIN
May 2017
CO., LTD.
Katsuhiko Yamazaki April 2019
Executive Officer in charge of the Connected(November 6, 1966)
Terminal Division, the Company
13,392
Male
May 2019
President and Representative Director, RHYTHMKYOSHIN CO., LTD.
[Reappointment]
July 2020
Director and Executive Officer in charge of theConnected Terminal Division, the Company
Director and Managing Executive Officer, andOctober 2020
General Manager of Corporate Administration
Headquarters, the Company
April 2024
Director and Managing Executive Officer in chargeof Corporate Administration Headquarters andCompliance/Risk Management Office, the Company(to the present)[Reason for nomination as candidate for Director and expected roles]
Mr. Katsuhiko Yamazaki possesses abundant experience and expertise in corporate management. After
serving as an Executive Officer in charge of the Connected Terminal Division and as the Representative
Director of a Group company in Japan, he currently uses his administrative capabilities in the overallmanagement of the Corporate Administration Headquarters as a Director and Managing Executive Officer. In
2024, he assumed charge of the Compliance/Risk Management Office of the Company.
The Company has judged that he remains an appropriate person to further enhance the Group’s corporate
value and strengthen the supervisory function of the Board of Directors, and hereby requests his reelection as a
Director.
[Attendance at the Board of Directors meetings]
17 out of 17 meetings (100.0%)
March 1987

3

Number ofshares of theCompany held

-6-

No.

4

5

Name
(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

September 1984 Joined KYOSHIN KOGYO CO., LTD. (later
renamed RHYTHM KYOSHIN CO., LTD.; current
RHYTHM CO., LTD.)
General Manager of Technology Department,
April 2011
Yoshikazu Kitajima
KYOSHIN KOGYO CO., LTD.
(May 29, 1962)
May 2015
Director, KYOSHIN VIETNAM CO., LTD.
3,600
Male
Director, RHYTHM KYOSHIN CO., LTD.
May 2017
Executive Officer and Deputy General Manager ofOctober 2020
[New appointment]
Production Headquarters, the Company
Executive Officer and General Manager ofApril 2024
Production Headquarters, the Company (to thepresent)[Reason for nomination as candidate for Director and expected roles]
Mr. Yoshikazu Kitajima possesses abundant experience and knowledge in corporate management. He haslong been engaged in the technology and production areas in the precision parts business (formerly theConnected Terminal Division), as well as in corporate management as a Director of Group companies both inJapan and overseas. Having served as an Executive Officer of the Company since 2020, he is currently
responsible for the overall management of production as an Executive Officer and General Manager of the
Production Headquarters.
The Company has judged that he is an appropriate person to further enhance the Group’s corporate value
and strengthen the supervisory function of the Board of Directors, and hereby requests the new election of him
as a Director.
[Attendance at the Board of Directors meetings]－out of－meetings (－%)
April 1990
Joined The Kyowa Bank, Ltd. (current Resona
Bank, Limited)
Chief Executive Officer, Resona Merchant Bank
July 2017
Asia Ltd.
Joined the Company
July 2019
Tatsuya Aizawa
General Manager of Group Management
April 2020
(May 31, 1966)
Department, the Company
3,100
Male
Executive Officer, Deputy General Manager ofOctober 2020
Corporate Administration Headquarters, and[New appointment]
General Manager of Corporate Planning
Department, the Company
April 2024
Executive Officer, General Manager of Corporate
Administration Headquarters, and General Manager
of Corporate Planning Department, the Company (tothe present)[Reason for nomination as candidate for Director and expected roles]
Mr. Tatsuya Aizawa possesses abundant experience and expertise in corporate management. In addition toexperience gained at financial institutions both in Japan and overseas, he has served as a CEO of an overseas
subsidiary. After joining the Company, he served as a General Manager of the Group Management Department
and is currently engaged in the overall management of the Group as an Executive Officer, General Manager ofCorporate Administration Headquarters, and General Manager of the Corporate Planning Department.
The Company has judged that he is an appropriate person to further enhance the Group’s corporate value andstrengthen the supervisory function of the Board of Directors, and hereby requests the new election of him as a
Director.
[Attendance at the Board of Directors meetings]－out of－meetings (－%)

-7-

No.

Name
(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

Joined KYOSHIN KOGYO CO., LTD. (later
renamed RHYTHM KYOSHIN CO., LTD.; current
RHYTHM CO., LTD.)
Norihisa Yamamoto
General Manager of Sales Department, KYOSHIN
April 2013
(August 14, 1969)
KOGYO CO., LTD
4,600
Male
May 2017
Director, KYOSHIN KOGYO CO., LTD.
Executive Officer, Deputy General Manager ofOctober 2020
[New appointment]
Sales Headquarters, the Company
Executive Officer, General Manager of Sales
April 2023
Headquarters, the Company (to the present)[Reason for nomination as candidate for Director and expected roles]
Mr. Norihisa Yamamoto possesses abundant experience and knowledge in corporate management. He has
been continuously engaged in sales in the precision parts business (formerly the Connected Terminal Division),
as well as in corporate management as a Director of Group companies both in Japan and overseas. Having
served as an Executive Officer of the Company since 2020, he is currently responsible for the overallmanagement of sales as an Executive Officer and General Manager of Sales Headquarters.
The Company has judged that he is an appropriate person to further enhance the Group’s corporate value
and strengthen the supervisory function of the Board of Directors, and hereby requests the new election of him
as a Director.
[Attendance at the Board of Directors meetings]－out of－meetings (－%)
June 1989

6

Notes: 1. There is no special interest between the candidates and the Company.
2. The Company has entered into indemnity agreements with Mr. Hiromi Hirata, Mr. Takeo
Yumoto, and Mr. Katsuhiko Yamazaki in accordance with Article 430-2, Paragraph 1 of theCompanies Act, under which the Company shall indemnify them against the expenses
stipulated in Item 1 and the losses stipulated in Item 2 of the same paragraph to the extent
specified by laws and regulations. However, there are certain exclusions, such as in cases
where a candidate seeks to gain an unfair advantage for himself or a third party, is found tohave performed his duties with the intention of causing damage to the Company, fails ordelays in providing information or reporting to the Board of Directors, or is sued for damages
due to malice or gross negligence in the performance of his duties. If this proposal isapproved and passed and each candidate is re-elected, the Company intends to continue theseindemnity agreements with each of them. In addition, if Mr. Yoshikazu Kitajima, Mr. Tatsuya
Aizawa, and Mr. Norihisa Yamamoto, who are candidates for Director, are elected as
proposed, the Company plans to conclude the same indemnity agreement with each of them.
3. The Company has concluded a directors and officers liability insurance contract with aninsurance company. The contract covers the directors, corporate auditors, and executive
officers of the Company and its group companies both in Japan and overseas, and if eachcandidate is elected, he/she will become an insured person under the contract. In the eventthat a claim for damages is brought by a shareholder, third party, or other party, the insurance
contract shall compensate for damages including compensation for damages and legal
expenses to be borne by the insured. The full cost of this insurance contract is borne by theCompany. However, it does not apply to claims for damages arising from crimes or violationsof laws, and other exemptions stipulated in the contract. Also, the Company plans to renew
this insurance contract in August 2024.

-8-

Proposal 3: Election of Five (5) Directors Who Are Audit and Supervisory Committee Members
The terms of office of all five (5) Directors who are Audit and Supervisory Committee Members
will expire at the conclusion of this Annual General Meeting of Shareholders. Therefore, the Company
hereby requests the election of five (5) Directors who are Audit and Supervisory Committee Members.
The content of this proposal has the approval of the Audit and Supervisory Committee.
The candidates for Directors who are Audit and Supervisory Committee Members are as follows.
No.

Name
(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions
July 1983
April 2009

1

Number ofshares of theCompany held

Joined the Company
General Manager of Clock Planning Department,
Clock Planning Headquarters, Clock Division, theCompany
June 2012
President and Representative Director, RHYTHM
INDUSTRIAL (H.K.) LTD.
Kiyotaka Sakai
President and Representative Director, RHYTHM(April 16, 1956)
INDUSTRIAL (DONG GUAN) LTD.
6,700
Male
June 2016
Executive Officer and General Manager of Clock
Division, the Company[Reappointment]
Executive Officer, General Manager of Compliance
April 2018
Department, and General Manager of Internal Audit
Department, the Company
April 2020
Executive Officer, the Company
July 2020
Director who is an Audit and Supervisory
Committee Member, the Company (to the present)[Reason for nomination as candidate for Director who is Audit and Supervisory Committee Member and expectedroles]
Mr. Kiyotaka Sakai possesses high-level expertise and sufficient knowledge to ensure the soundness ofmanagement with regard to the Company and other Group companies. In addition to an abundance of businessexecution experience obtained in Japan and internationally, until March 2020, he was in charge of the Internal
Audit Department and the Compliance Department as an Executive Officer.
It is expected that he will use this abundant and wide-ranging expertise and knowledge to be of assistance inimproving the Company’s audit and supervisory functions as before, and that this expertise will also be utilized
for the appropriate decision-making of the Board of Directors of the Company. The Company hereby requests
the reelection of him as a Director who is an Audit and Supervisory Committee Member.
[Attendance at the Board of Directors meetings]
17 out of 17 meetings (100.0%)[Attendance at the Audit and Supervisory Committee meetings]
12 out of 12 meetings (100.0%)

-9-

No.

Name
(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions
October 1979

2

3

Kinya Suzuki(November 7, 1953)
Male

May 2000
July 2014
August 2014

[Reappointment][Outside][Independent]

June 2015
June 2016
June 2018

Joined Nishikata Audit Corp. (current Deloitte
Touche Tohmatsu LLC)
Representative Partner, Tohmatsu & Co.
Retired from Deloitte Touche Tohmatsu LLC
Established Kinya Suzuki Accounting Office (to thepresent)
Outside Auditor, Soshin Electric Co., Ltd.

Number ofshares of theCompany held

4,100

Corporate Auditor, the Company
Director who is an Audit and Supervisory
Committee Member, the Company (to the present)
Director Audit & Supervisory Committee Member,June 2021
Soshin Electric Co., Ltd.
[Reason for nomination as candidate for Director who is Audit and Supervisory Committee Member and expectedroles]
Having worked for a major auditing firm for many years, Mr. Kinya Suzuki possesses an abundance ofknowledge and experience concerning financial affairs and accounting as a Certified Public Accountant, and hehas duly executed his duties as an Outside Audit and Supervisory Member of the Company.
It is expected that he will continue to utilize his wide-ranging experience and knowledge in improving theCompany’s audit and supervisory functions and for the appropriate decision-making of the Board of Directorsof the Company. The Company hereby requests the reelection of him as an Outside Director who is an Audit
and Supervisory Committee Member.
[Attendance at the Board of Directors meetings as an Outside Audit and Supervisory Committee Member]
17 out of 17 meetings (100.0%)[Attendance at the Audit and Supervisory Committee meetings]
12 out of 12 meetings (100.0%)
Joined Computer Services Corporation (current
April 1983SCSK Corporation)
Hitomi Uchida
May 2003
Joined Recruit Co., Ltd.
(May 9, 1962)
September 2004 Joined Pasona career assets Inc. (current Pasona
FemaleInc.)
300
February 2015
Established HUGRES Inc.; Representative Director,[Reappointment]
HUGRES Co., Ltd (to the present)[Outside]
Director, SAIKISS Inc. (to the present)
August 2021
[Independent]
June 2022
Director who is an Audit and Supervisory
Committee Member, the Company (to the present)[Reason for nomination as candidate for Director who is Audit and Supervisory Committee Member and expectedroles]
Ms. Hitomi Uchida possesses high-level expertise and sufficient knowledge to ensure the diversities of thecorporate management of the Company and Group companies and the Group’s human resources. After having
served in consulting for supporting second careers and changing careers, she started up a new business in 2015
with the objectives of supporting women’s advancement in the workplace and human resources development.
It is expected that she will continue to utilize her wide-ranging experience and knowledge in improving theCompany’s audit and supervisory functions and for the appropriate decision-making of the Board of Directorsof the Company. The Company hereby requests the reelection of her as an Outside Director who is an Audit andSupervisory Committee Member.
[Attendance at the Board of Directors meetings as an Outside Audit and Supervisory Committee Member]
17 out of 17 meetings (100.0%)[Attendance at the Audit and Supervisory Committee meetings]
12 out of 12 meetings (100.0%)- 10 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Appointed as a prosecutor.
Registered as an attorney-at-law
Hideyasu Yoshida(August 20, 1959)
Joined Abe, Yoshida and Sanpei Legal andAccounting Firm (to the present)
Male
Practicing-attorney-professor, The Legal Training
January 2004
0and Research Institute of Japan[New appointment]
Professor, Graduate School of Law, Toyo
April 2011
[Outside]
University[Independent]
April 2017
Professor, Graduate School of Law, Waseda
University[Reason for nomination as candidate for Director who is Audit and Supervisory Committee Member and expectedroles]
Mr. Hideyasu Yoshida possesses high-level expertise and sufficient knowledge in legal affairs andpromotion of compliance at the Company and Group companies. He served as a prosecutor and has beenpracticing as an attorney-at-law for many years and has also contributed to the guidance of the younger
generation in the legal profession.
It is expected that he will utilize his abundant experience and legal expertise in the appropriate decisionmaking of the Board of Directors of the Company, including the improvement of audit and supervisory
functions. The Company hereby requests the new election of him as an Outside Director who is an Audit andSupervisory Committee Member.
[Attendance at the Board of Directors meetings as an Outside Audit and Supervisory Committee Member]－out of－meetings (－%)
[Attendance at the Board of Directors meetings]－out of－meetings (－%)
April 1987
April 1994
May 1997

4

Number ofshares of theCompany held

- 11 -

No.

Name(Date of birth)

Career summary, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

Joined Saitama Bank, Ltd. (current Saitama Resona
Bank, Limited)
June 2010
Executive Officer in charge of Tama Area, Resona
Bank, Limited
April 2015
Executive Officer in charge of Credit Division andCredit Management Division, Saitama Resona
Takashi Miyajima
Bank, Limited(December 9, 1960) April 2016
Managing Executive Officer in charge of Credit
Male
Division, Saitama Resona Bank, Limited
President and Representative Director, Resona
0April 2017
[New appointment]
Capital Co., Ltd.
Outside Auditor, ITO EN, LTD.
July 2019[Outside]June
2020
Outside Director who is an Audit and Supervisory[Independent]
Committee Member, TOTOKU ELECTRIC CO.,LTD. (current TOTOKU INC.)
June 2021
Outside Auditor, MONTEROZA Co., Ltd. (to thepresent)
July 2023
Outside Auditor, Alpha Club Musashino Co., Ltd.
(to the present)[Reason for nomination as candidate for Director who is Audit and Supervisory Committee Member and expectedroles]
Mr. Takashi Miyajima possesses high-level expertise based on his experience in corporate management andsufficient knowledge to ensure corporate soundness. He has been involved in a wide range of corporate
management as an executive officer at financial institutions and served as the President and Representative
Director of Resona Capital Co., Ltd.
It is expected that he will utilize his abundant experience in improving the Company’s audit and supervisory
functions and appropriate decision-making of the Board of Directors of the Company. The Company hereby
requests the new election of him as an Outside Director who is an Audit and Supervisory Committee Member.
[Attendance at the Board of Directors meetings as an Outside Audit and Supervisory Committee Member]－out of－meetings (－%)
[Attendance at the Board of Directors meetings]－out of－meetings (－%)
April 1984

5

Notes: 1. There is no special interest between the candidates and the Company.
2. Matters relating to the candidates for Outside Director are as follows.
i.
Of the candidates, Mr. Kinya Suzuki, Ms. Hitomi Uchida, Mr. Hideyasu Yoshida, and Mr.
Takashi Miyajima are candidates for Outside Directors.
ii.
The term in office as Outside Director for Mr. Kinya Suzuki will be eight years at theconclusion of this Annual General Meeting of Shareholders (of which, two years as Outside
Corporate Auditor). With the resolution of the 92nd Annual General Meeting of
Shareholders held on June 20, 2018, the Company transitioned to a company with an audit
and supervisory committee.
The term in office as Outside Director for Ms. Hitomi Uchida will be two years at theconclusion of this Annual General Meeting of Shareholders.
iii.
In order for the Outside Directors to fulfill the role expected of them, the Articles ofIncorporation specify that the Company may conclude an agreement limiting the liability ofsuch Directors for damages as stipulated in Article 427, Paragraph 1 of the Companies Act.
Based on this agreement, the limit for the amount of liability is the minimum amountstipulated by law.
Currently, the Company has concluded such agreements with Mr. Kinya Suzuki and Ms.
Hitomi Uchida and, in the event their reelections are approved and passed in the resolutionsof this Annual General Meeting of Shareholders, the Company plans to continue these
agreements with them. In the event that the elections of Mr. Hideyasu Yoshida and Mr.
Takashi Miyajima are approved, the Company plans to conclude an agreement limiting
liability with them in the same manner.

- 12 -

iv.

v.

vi.

The Company has entered into indemnity agreements with Mr. Kiyotaka Sakai, Mr.
Kinya Suzuki, and Ms. Hitomi Uchida, in accordance with Article 430-2, Paragraph 1 of
the Companies Act, under which the Company shall indemnify them against theexpenses stipulated in Item 1 and the losses stipulated in Item 2 of the same paragraphto the extent specified by laws and regulations. However, there are certain exclusions,such as in cases where a candidate seeks to gain an unfair advantage for himself or athird party, is found to have performed his duties with the intention of causing damage
to the Company, fails or delays in providing information or reporting to the Board of
Directors, or is sued for damages due to malice or gross negligence in the performanceof his duties. If this proposal is approved and passed and each candidate is re-elected,
the Company intends to continue these indemnity agreements with each of them. In
addition, if Mr. Hideyasu Yoshida and Mr. Takashi Miyajima, who are candidates for
Director, are elected as proposed, the Company plans to conclude the same indemnity
agreement with each of them.
The Company has concluded a directors and officers liability insurance contract with aninsurance company. The contract covers the directors, corporate auditors, and executive
officers of the Company and its group companies both in Japan and overseas, and if
each candidate is elected, he/she will become an insured person under the contract. In
the event that a claim for damages is brought by a shareholder, third party, or otherparty, the insurance contract shall compensate for damages including compensation fordamages and legal expenses to be borne by the insured. The full cost of this insurance
contract is borne by the Company. However, it does not apply to claims for damages
arising from crimes or violations of laws, and other exemptions stipulated in thecontract. Also, the Company plans to renew this insurance contract in August 2024.
The Company has designated the candidates for Outside Directors as independent officers
in accordance with the rules of the Tokyo Stock Exchange, and reported to the Exchange
accordingly.

- 13 -

Reference

Composition of Directors After Proposals 2 and 3 Are Approved(Management Structure on and after June 21, 2024)

Directors’ Skills Matrix
Experience Area Which the Company Expects from Directors
Post in the Company
Name (gender/age)
Chairman and Director
Hiromi Hirata (Male/69)
President and Representative
Director

Corporate
Management

Business
Strategy /Marketing

ManufacFinance /Legalturing /Administra- Affairs /Technology
tionCompliance

●

●

●

●

●

●

GlobalBusiness

IT /DX

Intertype
Experience●●

Takeo Yumoto (Male/69)
Director and Managing
Executive Officer

●

●

●

●

Katsuhiko Yamazaki (Male/57)

Director, Executive Officer●

Yoshikazu Kitajima (Male/62)
Director, Executive Officer
Tatsuya Aizawa (Male/58)●

Director, Executive Officer

Kiyotaka Sakai (Male/68)
Director (Audit and Supervisory
Committee Member / Independent)

Kinya Suzuki (Male/70)
Director (Audit and Supervisory
Committee Member / Independent)

Hitomi Uchida (Female/62)

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Hideyasu Yoshida (Male/64)

Takashi Miyajima (Male/63)●●

Director (Audit and Supervisory
Committee Member / Independent)

Director (Audit and Supervisory
Committee Member / Independent)●●

Norihisa Yamamoto (Male/54)
Director (Audit and Supervisory
Committee Member / Full-time)

●

●

●

●

●

* The above ages of Directors are current as of June 21, 2024.

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Shareholder Proposal
Proposal 4 is a joint proposal made by certain shareholders (hereinafter “the proposing
shareholders”). The particulars of and reasons for the proposal are presented in the original wording of
the Shareholder Proposal document submitted.
Proposal 4: Appropriation of Surplus
1. Appropriation of Surplus(1) Outline of Proposal
To appropriate surplus as described below. If the Board of Directors of the Company presents a
proposal regarding the appropriation of surplus (hereinafter “the Company’s appropriation of profits
proposal” at the Company’s Annual General Meeting of Shareholders scheduled for June 2024
(hereinafter “this Annual General Meeting of Shareholders), this proposal shall be independent of andadditional to the Company’s appropriation of profits proposal.
(a) Type of dividend assets
Cash(b) Dividend amount per share
Distribute a dividend amount per share of common stock obtained by subtracting from 179 yen thedividend amount per share of common stock of the Company based on the Company’s appropriationof profits proposal presented to this General Meeting of Shareholders by the Board of Directors of
the Company (hereinafter, the “Company-proposed dividend amount”) (130.5 yen if the Companyproposed dividend amount is 48.5 yen), in addition to the Company-proposed dividend amount.
If the amount (hereinafter referred to as “the amount equivalent to DOE of 5%”) obtained bymultiplying the amount of net assets per share on March 31, 2024 (excluding treasury shares;
rounded down to the nearest yen; the same shall apply hereinafter) by 0.05 differs from 179 yen, the179 yen at the beginning of this paragraph shall be read as “the amount equivalent to DOE of 5%.”(c) Allocation of dividend assets to the shareholders and total amount of dividends
Dividend amount per share described above per share of common stock
The total amount of dividends shall be the amount calculated by multiplying the dividend amount per
share by the total number of issued shares of common stock of the Company (excluding treasury
shares) as of March 31, 2024.
(d) Effective date of dividends of surplus
Date of this Annual General Meeting of Shareholders(e) Date of commencement of payment of dividends
July 12, 2024
(2) Reason for proposal
This proposal seeks a dividend equivalent to 5% of net assets per share (DOE of 5%). If it is realized,
the dividend yield at a stock price with a PBR of 1 (3,575 yen) will be 5%.
A PBR of 1 is the level that the Tokyo Stock Exchange considers as an indicator that a company is
not achieving capital profitability that exceeds the cost of capital or that it suggests that investors are notseeing enough growth potential in the company.

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Amid calls for “management that is conscious of cost of capital and stock price,” it will take time for
the Company to realize earnings commensurate with its invested funds, due to the continued stagnationof its performance. On the other hand, in light of the Company’s high equity ratio of approximately
70%, cash and deposits and available-for-sale assets such as cross-shareholdings and real estate worth
over 15.0 billion at market value, and the potential to earn profits exceeding the 1.5 billion yen in total
dividends at a DOE of 5% (for example, the net profit target for FY2024 in the Medium-termManagement Plan is 1.6 billion yen), we believe that a DOE of 5% is achievable and appropriate as astandard for long-term stable dividends.
Link to detailed analysis: di-i.co.jp

Opinion of the Board of Directors of the Company[AGAINST] The Board of Directors is against this proposal.
In its medium-term management plan (FY2022-2024) announced on March 23, 2022 (hereinafter,
the “Medium-term Plan”), the Company set forth its basic policies of “expansion of growth areas througha unified manufacturing/sales/technology strategy” and “strategic investments with an emphasis on
business growth and the improvement of shareholder returns” and has been pursuing initiatives aimed at
the improvement of performance and the enhancement of corporate value. Further, in its “Responses for
the Realization of Management that is Conscious of Cost of Capital and Stock Price” announced in
March this year, the Company listed various responses and is putting those responses into action. They
include the promotion of ROIC-focused management, proactive investment in growth areas, including
capital investment, R&D investment, human capital investment, and M&As, initiatives for improving
shareholder returns and capital policies, the strengthening of investor relations activities, and theimprovement of corporate governance.
Under these circumstances, the Company recognizes shareholder returns as an issue of the highest
priority and, with a payout ratio of 30% or more as its basic dividend policy, intends to distribute further
dividends in accordance with the status of performance, cash-in-hand, and investment. In addition, it hasestablished a minimum of at least 30 yen per share and intends to continue to pay stable dividends.
Based on this policy, the Company increased the dividend per share in the fiscal year ended March
31, 2022 and the fiscal year ended March 31, 2023. For the fiscal year ended March 31, 2024, despite afall in profits, the Company intends not to reduce the dividend but to maintain it at 48.50 yen per share(payout ratio of 83.8%). In addition, the Company plans to increase the dividend further to 73 yen(payout ratio of 50.2%) in the fiscal year ending March 31, 2025, against the background of growth inperformance.
On the other hand, the Company believes that it is business growth that will enhance corporate value
and contribute to the enhancement and continuation of shareholder returns, and that such business growthis essential for the improvement of ROE and PBR.
Performance in the fiscal year ended March 31, 2024 ultimately suffered a downward swing fromthe plan, impacted by external factors such as a fall in customer operating rates due to the semiconductor
shortage and major fluctuations in exchange rates, as well as the non-recurring costs for structuralreforms, including the reorganization and bolstering of unprofitable businesses. For the fiscal year ending
March 31, 2025, the end of inventory adjustments by customers and a full-year contribution from
Rhythm Shoei are expected in the precision parts business, and through the expansion of comfort
products that it has been pursuing in the livingware business, and the improvement of profits throughstructural reforms, the Company expects performance to be significantly higher than the previous year.

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Regarding investment that is imperative and urgent for this business growth, the Company isprogressively injecting generated operating cashflow, cash in hand, and funds from the divestment ofassets. To repeat, the Company has secured dividends at a level higher than the Medium-term Plan.
In these ways, the Company is actively making investments for business growth and simultaneously
striving to improve shareholder returns, considering the best balance between the two as it pursues its
responses.
On the other hand, this shareholder proposal seeks a dividend equivalent to a DOE of 5% (188 yen
per share against net assets of 3,772.88 yen per share as of March 31, 2024). This represents a payout
ratio of 324.9%, which is significantly higher than the net profit of 57.86 yen per share for the fiscal year
ended March 31, 2024, and the total amount of dividends, 1,552 million yen, also exceeds the Company’s
retained earnings. This is clearly an excessive level that would entail the payment of dividends fromother capital surplus.
This kind of shareholder proposal would markedly hinder investments in equipment, R&D, humancapital, and other investments needed for future growth and would harm the Company’s medium- tolong-term corporate value. The Company has concluded that this is an excessive dividend proposal thatwould result in hindering the securing and improvement of shareholders’ common interests.
With the intention of rewarding its shareholders for their support, the Company will continue in its
efforts toward management that is conscious of cost of capital and stock price and aim for the recovery
and expansion of performance, and the implementation of stable and sustainable shareholder returns.
Accordingly, the Board of Directors of the Company is against this shareholder proposal.

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