Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event ofany discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

June 19, 2023
Company: TODA CORPORATION
Representative: Seisuke Otani, President and Representative Director(Securities Code: 1860 TSE Prime Market)
Contact: Kaname Miwa, Corporate Officer, General Manager, Financial & IR Div.
(Phone: 03-3535-1357)

TODA CORPORATION’s Views on the ISS Report
TODA CORPORATION (the “Company”) obtained information that Institutional Shareholder
Services Inc. (“ISS”), a proxy voting advisory firm, has issued a report (the “ISS Report”)
recommending approval or disapproval of the proposals for the 100th Annual General Meetingof Shareholders of the Company to be held on June 29, 2023.

The Company presents its viewson the ISS Report as set out below.
We invite our shareholders to kindly review the Notice of Convocation for the Annual General
Meeting of Shareholders together with our views and ask for understanding regarding theproposals.
1.

Proposal No. 3 “Election of Seven (7) Directors”Recommendation by ISS
ISS recommends a vote against a company’s top executive if the company allocates 20%
or more of its net assets to cross-shareholdings.

Failing to meet the ISS threshold, ISS

recommends a vote against the election of Masanori Imai, Chairperson and Representative
Director, and a vote against Seisuke Otani, President and Representative Director, as top
management is responsible for the company’s capital misallocation.
The Company’s Views
The Company’s policy on cross-shareholdings:
Our basic policy is to reduce the balance of such holdings to mitigate risks of owningcross-shareholdings and improve capital efficiency.
1If we find no reasonableness incontinuing to hold shares of a specific issue after verifying the meaning and economic
rationality, we engage in sufficient dialogue with our partner company before proceedingwith any sale.
Under the “Medium-Term Management Plan - 2024 Rolling Plan” (announced in May2022, the “Medium-Term Management Plan”) from the perspective of securing financial
resources for investments in growth while maintaining capital efficiency and financial
soundness, it is our policy to sell at least ¥30 billion (market value basis) of crossshareholdings over the three-year period from FY2022 to FY2024.

Based on this policy,

the Company sold 12 stocks with approximately ¥4.5 billion in FY2021, while we sold 10
stocks with approximately ¥11.6 billion in FY2022, significantly increasing the amount soldand accelerating the reduction.

As a result, the ratio of cross-shareholdings to net assets

declined from 51.4% as of March 31, 2022 to 49.4% as of March 31, 2023.
As described above, the Company has been steadily reducing such holdings in accordancewith its policy on cross-shareholdings, giving due consideration to the appropriate allocationof capital.
Masanori Imai and Seisuke Otani, who are recommended against election by ISS, have
served as Chairperson and Representative Director and President and Representative
Director, respectively, and are indispensable in the continued and strong promotion ofbusiness portfolio reform through strengthening the competitiveness of the construction
business and growth investments to build a new revenue base.

The Company nominates

them as candidates for the Board of Directors because it expects them to continue tocontribute to the sustainable growth of the Group and the enhancement of the corporate value.
Each candidate has been reviewed and evaluated by the Personnel and Compensation
Committee (chaired by an outside director), which consists of four (4) outside directors andone (1) inside director.

Please refer to the Notice of Convocation for the Annual General

Meeting of Shareholders for the reasons for nomination of each director candidate and theskills of the Company's directors who will assume office after the Annual General Meetingof Shareholders.

2[Reference]
Balance(¥ bil)

27,821

28,041172.6

163.9159.5

113.4

104.5

102.9

61.9

59.2

59.4

56.5

March 2020

March 2021

March 2022

March 2023

29,178250
200

Nikkei stock
average price (¥)

Balance of Cross-shareholdings (Non-consolidated)

18,917
135.8

150
100

73.9

50
0Book value
Valuation difference
Nikkei average

20,00010,0005,000
0March 2024

March 2025
¥ mil

FY2019FY2020

FY2021

FY2022

2,882

5,770

4,520

11,5841321

12Number of stocks sold

25,00015,000

Cross-shareholdings Sold (Non-consolidated)

Sales value

30,000

FY2023

FY2024

10To be sold more than ¥30 bil in 3 years2.

Proposal No. 5 “Partial Amendments to and Continuation of Policy Regarding a Large-Scale
Purchase of the Company’s Shares and Other Securities (Takeover Defense Measure)”
Recommendation by ISS
ISS recommends a vote against Proposal No. 5 on the grounds that the total duration of thePolicy Regarding a Large-Scale Purchase of the Company's Shares and Other Securities(Takeover Defense Measures, the “Plan”) exceeds three (3) years and that the Company has
management-friendly shareholders (the Company has other types of takeover defense).
The Company’s Views(i)The reasonableness of the total duration:
ISS limits the total duration from the time of its initial introduction of a takeover
defense plan to no more than three (3) years, but the Company does not see any
rationality in limiting the total duration to three (3) years.
The Plan stipulates that the effective period is three (3) years, and that every three (3)years, after considering the risk of abusive takeovers, the existence of the need for atakeover defense measure is confirmed and approved at a General Meeting of
Shareholders, and that the shareholders’ intention is to be confirmed when actually
implementing countermeasures.

The Company, therefore, believes that the total

duration of a takeover defense measure should not be an issue.
In the current stock market, we understand that there are cases in which shareholders
do not always have sufficient information and consideration period to determine theappropriateness of a takeover, such as a share acquisition in a short period of time in anin-market purchase that is not subject to tender offer regulations.

The situation may

not change after three (3) years have passed since the introduction of the Plan, and we3believe that it is still necessary to establish a transparent framework for the transfer ofcontrol of the Company.
With respect to ensuring sufficient information and consideration period as statedabove, the draft guideline presented by the “Fair Acquisition Study Group” of the
Ministry of Economy, Trade and Industry (released on April 28, 2023) states that“although the information disclosure requirements under the tender offer system do not
apply when an purchaser makes an in-market purchase, in a situation where a purchaser
acquires control of a company through an in-market purchase within a short period oftime, it is desirable to provide the same level of information as that contained in theTender Offer Notification, such as the purpose of the purchase, the number of shares tobe purchased, a summary of the purchaser, the basic management policy after theacquisition, and other important items, to the capital market and the target company ina voluntary manner so that shareholders can make a decision whether to accept thepurchase after understanding the impact of the purchase on the corporate value of thetarget company”.
(ii) The existence of major shareholders friendly to the Company’s management (theCompany has other types of takeover defense):
The Company's largest shareholder, Daiichi Shokusan, and the founding family
related shareholders together hold approximately 26% of the Company's shares.

It isnot certain whether the founding family related shareholders will continue to hold theCompany's shares, and the Company recognizes the possibility that their shareholding
ratio may decrease in the future.

Therefore, we do not believe that the Company falls

under the category of "having other types of takeover defense” as pointed out by ISS.
(iii) Supplementary information on the necessity of the Plan and the amendments made insubmitting the proposal:
Under these circumstances, the Company believes that in the event of a large-scalepurchase that may damage our corporate value and the common interests of ourshareholders, it may be difficult in some cases to take appropriate measures to ensuresufficient information and consideration period for our shareholders to determine theappropriateness of the acquisition, and we recognize that the continuation of the Plan isnecessary from the perspective of enhancing corporate value.
In submitting the proposal for the continuation of the Plan, in addition to the majorityof directors being independent outside directors at last year's Annual General Meetingof Shareholders, as a mechanism to eliminate arbitrary operation by the management,4

the Company has made amendments to the Plan such as confirmation of shareholders'intention at a General Meeting of Shareholders is, in principle, mandatory whenimplementing countermeasures, setting the maximum period for the provision ofinformation, and changing the composition of the Independent Committee members(from the current three (3) members to a five (5) member committee consisting of four(4) outside directors and one (1) outside corporate audit & supervisory board member).
3.

Proposal No. 6 “Acquisition of Treasury Stock”, a shareholder proposal
Recommendation by ISS
ISS recommends a vote for the shareholder proposal for acquisition of treasury stock, on
the grounds that the authorization would not bind the Company to actually repurchase any
shares and the vote is rather symbolic and can be used as a tool to raise concern over capitalefficiency.
The Company’s Views
In the Company’s growth and financial strategies, we recognize the importance of securingfunds for proactive investments for sustainable growth, which we are implementing basedon our Medium-Term Management Plan, and maintaining financial soundness as thefoundation for long-term development.
If the shareholder proposal were to be implemented, it would not only hinder the executionof proactive growth investment, which is the core of the Medium-Term Management Plan,
but would also lead to damage to the financial stability of the Company, and as a result,would be detrimental to the medium- to long-term interests of shareholders.
The Company is proceeding with a business portfolio reform, which involves
strengthening its core construction business and investing in growth areas such as the new
TODA BUILDING, overseas business, and floating offshore wind power generation
business.

We aim to achieve our profitability target of ROE of 8% or more and improve

P/B ratio by prioritizing the use of retained earnings for investments in growth and bycontinuing to emphasize capital efficiency through measures such as verifying that return on
invested capital (ROIC) for each business segment exceeds the cost of capital.
With respect to shareholder returns, the Company’s Medium-Term Management Plan
calls for “DOE (dividend on equity) of 2.5% or more, with a total return ratio of 40% ormore”, while paying attention to securing funds for proactive investments and to maintaining
5

financial soundness as the foundation for long-term development.

The Company iscommitted to actively return profits to shareholders and we believe that the acquisition oftreasury stock should be implemented flexibly at appropriate timings and scale.

We viewthat the shareholder proposal to initiate a large scale repurchase program of approximately¥21.6 billion in one year will hinder the execution of the growth strategy based on theMedium-Term Management Plan and will not contribute to the enhancement of corporate
value over the medium- to long-term.

The Company concludes that the shareholder

proposal is inappropriate in light of our shareholder return policy.
[Reference]

END6