The English translation is made for reference purposes only, and in the event of any discrepancies between
the English version and the Japanese version, the Japanese prevails.
Securities Code: 1720
June 6, 2022
To Our Shareholders:

1-16-14 Shibuya, Shibuya-ku, Tokyo

Tokyu Construction Co., Ltd.
Mitsuhiro Terada, Representative Director, President

Notice of the 19th Annual General Meeting of Shareholders
The Company would hereby like to announce shareholders the Company’s 19th Annual Meeting of Shareholders as
described below.
In consideration of preventing the spread of the novel coronavirus, we kindly request you to refrain from attending themeeting and exercise your voting rights in advance in writing or through the Internet or other means as much as possible.
Please read the following Reference Document for the Annual General Meeting of Shareholders and exercise your voting
rights by no later than 6:00 p.m. on June 23, 2022 (Thursday).
Sincerely yours,
1.

Date:

10:00 a.m., June 24 (Friday), 2022
(Reception will begin at 9:00 a.m.)2.

Venue:

Ballroom, B2F, Cerulean Tower Tokyu Hotel
26-1 Sakuragaoka-cho, Shibuya-ku, Tokyo

3.

Purposes:
Items to be reported:

1.

2.

Items to be resolved:
Agenda No. 1:
Agenda No. 2:
Agenda No. 3:
Agenda No. 4:

The business report, the consolidated financial statements and theresults of consolidated financial statement audits by the Accounting
Auditor and the Audit & Supervisory Board for the 19th business period(April 1, 2021 to March 31, 2022)
The non-consolidated financial statements for the 19th business period(April 1, 2021 to March 31, 2022)

Appropriation of Retained Earnings
Partial Amendment to the Articles of Incorporation
Election of Eight (8) Directors
Election of One (1) Audit & Supervisory Board Member

Please kindly note that no gifts will be given to attendees at this Annual General Meeting of Shareholders.
〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰 〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰〰

Of the documents included in the Appendix to this Notice of Convocation of the General Meeting of Shareholders, the Business Report is among the
documents audited by the Audit & Supervisory Board, and the Consolidated Financial Statements and Non-consolidated Financial Statements are among
the documents audited by the Accounting Auditor and the Audit & Supervisory Board. The circumstances of the accounting auditor and the system tosecure the appropriateness of business operations and the outline of the operating circumstances of the said system of the Business Report, theConsolidated Statements of Changes in Net Assets and the Notes to the Consolidated Financial Statements of the Consolidated Financial Statements,
and the Non-consolidated Statements of Changes in Net Assets and the Notes to the Non-consolidated Financial Statements of the Non-consolidated
Financial Statements are posted on the Company’s website in accordance with laws and ordinances and provisions of Article 16 of the Company’s
Articles of Incorporation.
Results of resolutions at this Annual General Meeting of Shareholders will be listed on the Company’s website via the Internet after this Annual General
Meeting of Shareholders, in lieu of notifying you in writing.
If there are any revisions to the Reference Document for the Annual Meeting of Shareholders, and/or the business report, the consolidated and the nonconsolidated financial statements, such revisions will be listed on the Company’s website.

Company’s website https://www.tokyu-cnst.co.jp/en/-1-Reference Document for the Annual Meeting of Shareholders
Meeting Agenda and Referential Matters
Agenda No. 1: Appropriation of Retained Earnings
The Company recognizes the importance of capital efficiency while emphasizing stable and sustained profit returns
to shareholders, which are less susceptible to short-term profit volatility. In line with this policy, the Company
aims to pay dividends of 4% or higher in the dividend on equity ratio (DOE) satisfying both ROE of 10% or higher,
which is a medium- to long-term performance target, and a consolidated payout ratio of 40% or higher.
However, regarding the year-end dividend, given the significant net loss for the fiscal year ended March 31, 2022,
and future business development, the Company will request appropriation of retained earnings as follows:
Year-end Dividend(1) Matters concerning allocation of dividend property to shareholders and total amount thereof
5 yen per common share of the Company

Total amount: ¥ 530,969,595

As a result, the annual dividend for the fiscal year ended March 31, 2022, will be 25 yen per share, combinedwith the interim dividend of 20 yen.
(2) Effective date on which dividends are disbursed from retained earnings
June 27, 2022

-2-

Agenda No. 2: Partial Amendment to the Articles of Incorporation
1.

Reasons for proposal(1) Since the revised provisions provided for in the proviso to Article 1 of the Supplementary Provisions of the
Act Partially Amending the Companies Act (Act No. 70 of 2019) are to be enforced on September 1, 2022, theCompany proposes to make the following amendments to its Articles of Incorporation in preparation for the
introduction of the system for providing informational materials for the general meeting of shareholders inelectronic format.
1) Article 16, (1) in “Proposed amendments” below will stipulate that the Company shall take measures forproviding information that constitutes the content of reference document for the annual meeting ofshareholders, etc. in electronic format.
2) Article 16, (2) in “Proposed amendments” below will establish a provision to limit the scope of the items to
be stated in the paper-based documents to be delivered to shareholders who requested the delivery of paperbased documents.
3) Since the provision for Internet disclosure and deemed provision of reference document for the annual
meeting of shareholders, etc. (Article 16 of the current Articles of Incorporation) will no longer be required,it will be deleted.
4) Accompanying the aforementioned establishment and deletion of provisions, supplementary provisions
regarding the effective date, etc. will be established.
(2) The Company proposes amendments so that electromagnetic methods may be used for providing advancenotice regarding diverse exercise of voting rights at the general meeting of shareholders.

2.

The details of revision
The details of revision of the Articles of Incorporation are as follows.
(Those to be amended are underlined.)
Current Articles of Incorporation

Proposed amendments(Internet Disclosure and Deemed Provision ofReference Document for the Annual Meeting of
Shareholders, Etc.)
Article 16

When the Company convenes a general(Deleted)

meeting of shareholders, if it discloses
information that is to be stated or presented in
the reference documents for the annual meetingof shareholders, business report, nonconsolidated financial statements andconsolidated financial statements through theInternet in accordance with the provisions
prescribed by the Ministry of Justice Order, it
may be deemed that the Company has provided
this information to shareholders.
(Measures for Providing Information in Electronic
Format, Etc.)(Newly stated)

Article 16
1. When the Company convenes a general meetingof shareholders, it shall take measures forproviding information that constitutes thecontent of reference documents for the annual-3-Current Articles of Incorporation

Proposed amendments
meeting of shareholders, etc. in electronic
format.
2. Among items for which the measures forproviding information in electronic format will
be taken, the Company may exclude all or someof those items designated by the Ministry ofJustice Order from statements in the paper-based
documents to be delivered to shareholders whorequested the delivery of paper-based documents
by the record date of voting rights.

(Diverse Exercise of Voting Rights)(Diverse Exercise of Voting Rights)

Article 19

Article 19

Shareholders who wish to diversely

Shareholders who wish to diversely

exercise their voting rights must notify theexercise their voting rights must notify theCompany in writing at least 3 days before theCompany in writing or by electromagnetic

date of the general meeting of shareholders.

methods at least 3 days before the date of thegeneral meeting of shareholders.
(Supplementary Provisions)(Newly stated)

1.

The deletion of Article 16 of the current Articles
of Incorporation (Internet Disclosure andDeemed Provision of Reference Document for
the Annual Meeting of Shareholders, Etc.) andthe establishment of proposed Article 16(Measures for Providing Information inElectronic Format, Etc.) shall be effective from
September 1, 2022, (hereinafter referred to as“Date of Enforcement”), which is the date ofenforcement of the revised provisions provided
for in the proviso to Article 1 of the
Supplementary Provisions of the Act Partially
Amending the Companies Act (Act No. 70 of2019).

2.

Notwithstanding the provision of the preceding
paragraph, Article 16 of the current Articles ofIncorporation shall remain effective regarding
any general meeting of shareholders held on adate within six months from the Date of
Enforcement.

3.

These Supplementary Provisions shall be deleted
on the date when six months have elapsed fromthe Date of Enforcement or three months haveelapsed from the date of the general meeting ofshareholders in the preceding paragraph,
whichever is later.

-4-

Agenda No. 3: Election of Eight (8) Directors

The terms of office of all of the current Directors will expire at the close of this General Meeting of
Shareholders.
Accordingly, we propose the election of eight (8) Directors (including four (4) External Directors), reducing
the number of Directors by two (2) to deliver faster decision-making and strengthen the supervisory
function by raising the ratio of External Directors.
The candidates for Directors are as follows.

[Reference: List of Candidates]
Candidate
No.

Name

1

Reappointed

Mitsuhiro Terada

2

Reappointed

Motoyuki Takagi

Attendance at Boardof Directors meetings
Representative Director,
15/15 meetings
Current positions

President(100%)

Representative Director,

15/15 meetings

Executive Vice President(100%)

Director, Senior
3

Masatoshi Shimizu

Reappointed

Managing Executive
Officer4

Reappointed

External

Independent Officer

Isao Onda

Director

5

Reappointed

External

Independent Officer

Kahori Yoshida

Director

6

Reappointed

External

Independent Officer

Kunihiro Koshizuka

Director

7

Reappointed

External

Independent Officer

Tsutomu Tsunashima

Director

8

Newly
Appointed

Note:

Setsu Hamana

15/15 meetings(100%)
15/15 meetings(100%)
15/15 meetings(100%)
12/12 meetings(100%)
12/12 meetings(100%)**

No description marked with * means not being applicable due to a newly appointed candidate.

-5-

1

Mitsuhiro Terada

Reappointed(March 1, 1957)

Brief profile, position, responsibility and significant concurrent positions

 Number of theCompany’s shares
owned
36,842 shares Term of Office for
Director
10 years Attendance at Board of
Directors meetings:
15/15 meetings (100%)

April 1979
June 2010
April 2012
June 2012
April 2013
April 2016
April 2018
June 2019

Joined Tokyu Construction Co., Ltd.
Executive Officer of the Company
Senior Executive Officer of the Company
Director, Managing Executive Officer of the Company
General Manager, Civil Engineering Division of the Company
Director, Senior Managing Executive Officer of the Company
Representative Director, Senior Executive Vice President of
the Company
Representative Director, President of the Company (topresent)

 Reasons for the election of candidate for Director
Mr. Terada has abundant management experience at the Company and strong
leadership as the Representative Director and President in the Group.
Accordingly, he has been re-elected as a candidate for Director.

2

Motoyuki Takagi

Reappointed(November 25, 1955)

Brief profile, position, responsibility and significant concurrent positions
April 1979
April 2011
April 2016
 Number of theCompany’s shares
owned
19,053 shares Term of Office for
Director
6 years Attendance at Board of
Directors meetings:
15/15 meetings (100%)

June 2016
June 2018
April 2020

Joined Tokyu Construction Co., Ltd.
Executive Officer of the Company
Managing Executive Officer of the Company
General Manager, Building Construction Division of theCompany
Director, Managing Executive Officer of the Company
Director, Senior Managing Executive Officer of the Company
Representative Director, Executive Vice President of theCompany (to present)
General Manager of Business Management, in charge of
Safety & Environment and International Business of theCompany (to present) Reasons for the election of candidate for Director
Mr. Takagi has served as Representative Director of the Company. He hasadvanced expertise in the overall construction business, as well as abundant
experience and extensive knowledge as a business manager. Accordingly, he
has been re-elected as a candidate for Director.

-6-

3

Masatoshi Shimizu

Reappointed(January 20, 1959)

Brief profile, position, responsibility and significant concurrent positions
April 1982
April 2012
April 2017
 Number of theCompany’s shares
owned
12,674 shares Term of Office for
Director
5 years Attendance at Board of
Directors meetings:
15/15 meetings (100%)

June 2017
April 2020
April 2021

Joined Tokyu Construction Co., Ltd.
Executive Officer of the Company
Managing Executive Officer of the Company
General Manager, Business Administration Division of theCompany
Director, Managing Executive Officer of the Company
Director, Senior Managing Executive Officer of the Company(to present)
General Manager of Corporate Strategy Division, in charge ofBusiness Administration Division of the Company (topresent)

 Reasons for the election of candidate for Director
Mr. Shimizu has been re-elected as candidate for Director due to his richmanagement experience at the Company and strong insights pertaining tooverall business administration.

-7-

4

 Number of theCompany’s shares
owned
0 shares Term of Office for
Director
2 years Attendance at Board of
Directors meetings:
15/15 meetings (100%)

Isao Onda(April 4, 1949)

Reappointed

External

Independent Officer

Brief profile, position, responsibility and significant concurrent positions
October 1973
Joined EIKO Accounting Corporation (current Ernst &Young ShinNihon LLC)
July 1990
Partner of Century Audit Corporation (“Century”),
Manager of Chiba office
June 1993
Director and Partner of Century, Manager of businessdevelopment department, and Manager of Chiba office
June 2002
Executive Director and Partner of Ernst & Young
ShinNihon Audit Corporation, General Manager incharge of public stock offering business and public
accounting business, Deputy General Manager in chargeof general consulting business, and Manager of Chiba
officeSeptember 2008
Executive Director of Ernst & Young ShinNihon LLC(“EY ShinNihon”), Department Head in charge ofoversight of advisory services
Ernst & Young Global Japan Area Advisor
September 2010
Advisor of EY ShinNihon
October 2010
Special Advisor of GTM Research Institute Inc.
April 2011
Representative Director, President of GTM ResearchInstitute Inc. (to present)
June 2012
Audit & Supervisory Board Member of the Company
January 2019
Partner of GTM Tax Co. (to present)
Visiting professor of Institute for Technology, Enterprise
April 2019
and Competitiveness, Doshisha University (to present)
June 2020
Director of the Company (to present)(Significant concurrent positions)Representative Director, President of GTM Research Institute Inc.
Partner of GTM Tax Co.
Visiting professor of Institute for Technology, Enterprise and Competitiveness,
Doshisha University
 Reasons for proposing the candidate for External Director and outline of
expected roles
Mr. Onda has abundant experience and broad insights as a business manager,
as well as his professional expertise as a certified public accountant andcertified tax accountant. He has been re-elected as a candidate for External
Director with the expectation that he will contribute to oversight of overallbusinesses with his beneficial advice and opinions through his expertise andexperience.

-8-

5

 Number of theCompany’s shares
owned
0 shares Term of Office for
Director
3 years Attendance at Board of
Directors meetings:
15/15 meetings (100%)

Kahori Yoshida(December 19, 1972)

Reappointed

External

Independent Officer

Brief profile, position, responsibility and significant concurrent positions
April 1996
Joined Recruit Cosmos Co., Ltd.
September 2010
Passed the bar examination
December 2011
Joined Yoshiko Takagi Law Firm (current T&T Partners
Law Office) (to present)
Registered as Lawyer
April 2012
Member of the Operation Committee for Housing
Dispute Examination Meeting, Daini Tokyo Bar
Association (to present)
November 2018
Special member of the Chuo Construction Project
Dispute Examination Committee, the Ministry of Land,
Infrastructure, Transport, and Tourism (to present)
June 2019
Director of the Company (to present)
August 2020
Member of the Central Review Council for Kenchikushi,
the Ministry of Land, Infrastructure, Transport andTourism (to present)
Professional Member of Architecture Subcommittee, theSocial Infrastructure Improvement Council, the Ministryof Land, Infrastructure, Transport and Tourism (Team forpreventive measures for accidents and disasters ofbuildings) (to present)
October 2020
Temporary Member of the Japanese Industrial Standards
Committee, the Ministry of Land, Infrastructure,
Transport and Tourism (to present)
October 2021
Commissioner of Tokyo housing Policy Making
Advisory Board (to present)
April 2022
Special researcher of Tokyo Metropolitan Building
Examination Committee (to present)(Significant concurrent positions)
Lawyer (T&T Partners Law Office) Reasons for proposing the candidate for External Director and outline of
expected roles
Ms. Yoshida has professional expertise as a lawyer and work experience in thereal estate industry, and has been re-elected for External Director with the
expectation that she will contribute to oversight of overall corporate businesses
with her beneficial advice and opinions through her expertise and experience.
Although she has no experience of having been directly engaged in corporate
management, the Company believes, based on the reason above, she will beable to accomplish her duties as External Director.

-9-

6

 Number of theCompany’s shares
owned
0 shares Term of Office for
Director
1 year Attendance at Board of
Directors meetings:
12/12 meetings (100%)

Kunihiro
Koshizuka

Reappointed

External(September 30, 1955)
Independent Officer

Brief profile, position, responsibility and significant concurrent positions
April 1981
Joined Konishiroku Photo Industry Co., Ltd. (current
KONICA MINOLTA, INC.)
April 2012
Executive Officer, Manager in charge of Technology
Strategy, Corporate R&D Department of KONICAMINOLTA, INC.
April 2013
Executive Officer, Manager in charge of Technology
Strategy and General Manager in charge of Developmentof KONICA MINOLTA, INC.
April 2014
Executive Vice President and Executive Officer, General
Manager in charge of Corporate R&D Headquarters andManager in charge of Technology Strategy of KONICAMINOLTA, INC.
April 2015
Executive Vice President and Executive Officer, General
Manager in charge of Business Development and General
Manager in charge of Corporate R&D Headquarters of
KONICA MINOLTA, INC.
June 2015
Director, Executive Vice President and Executive Officer,
General Manager in charge of Business Development andGeneral Manager in charge of Corporate R&D
Headquarters of KONICA MINOLTA, INC.
April 2016
Director, Executive Vice President and Executive Officer,
General Manager in charge of Business Development andin charge of Technology of KONICA MINOLTA, INC.
Senior Technical Advisor of KONICA MINOLTA, INC.
June 2019
May 2020
Outside Director of AEON MALL Co., Ltd. (to present)
June 2021
Director of the Company (to present)(Significant concurrent positions)
Outside Director of AEON MALL Co., Ltd.
Outside Director of WILL GROUP, INC. (scheduled to take office on June 21,
2022)
Outside Director of F.C.C. CO., LTD. (scheduled to take office on June 21,2022)
 Reasons for proposing the candidate for External Director and outline of
expected roles
Mr. Koshizuka has professional expertise in digital and science technology witha wealth of experience and broad insights with respect to technical strategy
formulation, new business creation, and large acquisition deals. He has been reelected as a candidate for External Director with the expectation that he willcontribute to oversight of the overall businesses with his beneficial advice andopinions through his expertise and experience.

-10-

7

 Number of theCompany’s shares
owned
0 shares Term of Office for
Director
1 year Attendance at Board of
Directors meetings:
12/12 meetings (100%)

 Term of Office for
Director― Attendance at Board of
Directors meetings:―

Reappointed

External(September 8, 1956)
Independent Officer

Brief profile, position, responsibility and significant concurrent positions
April 1979
Joined Yasuda Trust And Banking Company, Limited(current Mizuho Trust & Banking Co., Ltd.)
April 2007
Executive Officer, Manager of Osaka Branch, Mizuho
Trust & Banking Co., Ltd.
April 2008
Managing Executive Officer, Manager of Osaka Branch,
Mizuho Trust & Banking Co., Ltd.
April 2010
President & CEO of Urban Research Institute Corp.
June 2011
Outside Auditor of DYNIC CORPORATION
June 2015
Outside Audit & Supervisory Board Member of NIPPONSIGNAL CO., LTD.
Outside Director of Chuo Warehouse Co., Ltd.
June 2016
Director of the Company (to present)
June 2021
 Reasons for proposing the candidate for External Director and outline of
expected roles
Mr. Tsunashima has gained broad insights through his career with a wealth ofexperience as a business manager at a think tank specialized in the real estatebusiness, as well as years of experience as an officer in business execution at
the trust bank. He has been re-elected as a candidate for External Director withthe expectation that he will contribute to oversight of the overall businesses withhis beneficial advice and opinions through his expertise and experience.

8

 Number of theCompany’s shares
owned
0 shares

Tsutomu
Tsunashima

Setsu Hamana(July 25, 1960)

Newly
Appointed

Brief profile, position, responsibility and significant concurrent positions
April 1983
Joined Tokyu Corporation (“Tokyu”)
April 2011
Executive Officer of Tokyu
Executive General Manager of Building Headquarters,
Urban Life Development Business Unit of Tokyu
June 2014
Director & Executive Officer of Tokyu
April 2015
Deputy Executive General Manager of Urban
Development Business Unit of Tokyu
April 2017
Director & Corporate Consultant of Tokyu
President & Representative Director of Tokyu Facility
Service Co., Ltd.
April 2019
Director & Executive Officer of Tokyu
Executive General Manager of Building Operations
Business Headquarters of Tokyu
Director & Executive Officer of Tokyu
September 2019
Director & Managing Executive Officer of Tokyu (toApril 2020
present)(Significant concurrent positions)
Director & Managing Executive Officer of Tokyu Corporation
 Reasons for the election of candidate for Director
Mr. Hamana is the Director of Tokyu Corporation, a core company of the Tokyu
Group. He has been elected as candidate for Director due to his richmanagement experience in and broad insights into real estate, human resources,
labor, etc. as well as the Company’s expectations that he will contribute to theCompany’s management using his opinions from the viewpoint of one familiar
with the overall knowledge of business administration.

-11-

Notes:1. Special conflict of interests between the candidates and the Company(1) Mr. Setsu Hamana is Director of Tokyu Corporation and the company holds 15,362 thousand shares of theCompany (holding ratio of 14.47%). In addition, the company and the Company perform businesses under thesame category, and the company is a major counterpart for the Company’s deals. The Company has transactions
such as orders for construction projects with the company.
(2) There is no special conflict of interests between the other candidates and the Company.
2. Isao Onda, Kahori Yoshida, Kunihiro Koshizuka, and Tsutomu Tsunashima satisfy the Company’s criteria for the
independence of External Directors set forth in pages 16 and are candidates for independent officers pursuant to theregulations of the Tokyo Stock Exchange, Inc.
3. Limited liability agreement
The Company has concluded agreements with Isao Onda, Kahori Yoshida, Kunihiro Koshizuka, and Tsutomu
Tsunashima to limit their respective liabilities for damages referred to in Article 423 (1) of the Companies Act
pursuant to the provision of Article 427 (1) of said Act. The maximum amount of liability for damages prescribedin such agreement is the minimum liability amount stipulated in the items of Article 425 (1) of said Act. The
Company plans to extend the aforementioned limited liability agreements if their re-election is approved. The
Company also plans to conclude an agreement with the same terms and conditions with Setsu Hamana if his election
is approved.
4. Directors’ Liability Insurance Contracts
The Company has a directors’ liability insurance contract stipulated in Article 430-3, (1) of the Companies Act with
the insurance company which covers liability for damages and litigation costs of an insured person that arises fromcompensation claims to the insured person for damages due to the insured person’s acts in the use of his or her
position during the insurance period. Each candidate will become an insured person of the said contract upon theappointment as Director, and the said contract will be renewed in the midst of his or her term of office.
5. Candidates for Directors
Decisions have been made by the Board of Directors after receiving results of examination from the Appointments
and Remunerations Committee, the majority of whose members are Independent External Directors.

-12-Agenda No. 4: Election of One (1) Audit & Supervisory Board Member

The term of office of the current Audit & Supervisory Board Member, Yoshikazu Kato will expire at theclose of this General Meeting of Shareholders. Accordingly, we propose the election of one (1) Audit &Supervisory Board Member.
The Audit & Supervisory Board’s consent has been obtained for this Proposal.
The candidate for Audit & Supervisory Board Member is as follows.

Yoshikazu Kato

 Number of theCompany’s shares
owned
0 shares Term of Office for
Audit & Supervisory
Board Member
4 years Attendance at Board of
Directors meetings:
15/15 meetings (100%)
 Attendance at Audit &Supervisory Board
meetings:
7/7 meetings (100%)(September 9, 1956)

Reappointed

External

Independent Officer

Brief profile, position, and significant concurrent positions
April 1982
Joined the Science and Technology Agency, Cabinet
OfficeJuly 2001
Director of Research Environment and Industrial
Cooperation Division, Research Promotion Bureau,
Ministry of Education, Culture, Sports, Science andTechnology
July 2008
Counselor to Director General for Science, Technology
and Innovation Policy, Cabinet Office
July 2010
Deputy Director-General, Research and Development
Bureau, Ministry of Education, Culture, Sports, Scienceand Technology
April 2012
Vice President of Japan Aerospace Exploration Agency
April 2015
Director of Technology Division, Cabinet SatelliteIntelligence Center, Cabinet Intelligence and Research
Office, Cabinet Secretariat
November 2017
Specially Appointed Counselor, Remote Sensing
Technology Center of Japan
June 2018
Audit & Supervisory Board Member of the Company (topresent)
April 2022
Advisor of Remote Sensing Technology Center of Japan(to present)(Significant concurrent positions)
Advisor of Remote Sensing Technology Center of Japan
Visiting Professor of Fukui University of Technology
 Reasons for proposing the candidate for Audit & Supervisory Board
MemberMr. Kato has been re-elected as a candidate for Audit & Supervisory Board
Member as the Company expects him to reflect in the Company’s audit his richexperience in administrative agencies, etc. and broad insights accumulated
throughout his career. Although he has no experience of having been directly
engaged in corporate management, the Company believes, based on the reason
above, he will be able to accomplish his duties as Audit & Supervisory Board
Member.

Notes:
1. There is no special conflict of interests between the candidate and the Company.
2. Yoshikazu Kato satisfies the Company’s criteria for the independence of Audit & Supervisory Board Members set
forth in pages 16 and is a candidate for independent officer pursuant to the regulations of Tokyo Stock Exchange,
Inc.
3. Limited liability agreement
The Company has concluded an agreement with Yoshikazu Kato to limit his liabilities for damages referred to in
Article 423 (1) of the Companies Act pursuant to the provision of Article 427 (1) of said Act. The maximum amountof liability for damages prescribed in such agreement is the minimum liability amount stipulated in the items of
Article 425 (1) of said Act. The Company plans to extend the aforementioned limited liability agreement if his reelection is approved.
4. Directors’ Liability Insurance Contracts
The Company has a directors’ liability insurance contract stipulated in Article 430-3, (1) of the Companies Act with-13-

the insurance company which covers liability for damages and litigation costs of an insured person that arises fromcompensation claims to the insured person for damages due to the insured person’s acts in the use of his or her
position during the insurance period. The candidate will become an insured person of the said contract upon theappointment as Audit & Supervisory Board Member, and the said contract will be renewed in the midst of his termof office.

-14-

[Reference: Expertise and Experience of Candidates for Directors and Audit & Supervisory Board Members]
In order to achieve the long-term management plan, it is important for the Board of Directors to becomposed of a well-balanced group of members who have knowledge, experience, abilities, etc. describedin the following skill matrix.
The candidates for Director and Audit & Supervisory Board Member are selected taking into consideration
the balance and diversity of these skills.
Directors

Name

Mitsuhiro
TeradaMotoyuki
Takagi
Masatoshi
Shimizu
Isao Onda
Kahori
YoshidaKunihiro
Koshizuka
Tsutomu
Tsunashima
Setsu
Hamana

Sales

*

*

*

*

*

*

*

*

*

*
External
Independent
External
Independent
External
Independent
External
Independent

Audit & Supervisory Board Members

Name

Satoshi
HashimotoMadashiOchiai
Youichi
Saito
Yoshikazu
Kato
Kazuo
Kitamura

Corporate
management

Laws andCompliance**

FinanceandAccounting*

Developmentof HumanResources

International
MindsetDigitalInnovation

*

*
*

*
*

*

*

*

*

FinanceandAccounting

Developmentof HumanResources

Corporate
management

Sales

Laws andCompliance*International
MindsetDigitalInnovation**
External
Independent
External
Independent
External
Independent

*
*
*

*
*

-15-

[Reference: Standard for Independence of External Directors and Audit & Supervisory Board Members]

The Company determines External Officers (External Directors and Audit & Supervisory Board Members) who
satisfy with the following requirements as independent officers (Independent External Directors and Independent
Audit & Supervisory Board Members) without any risk of conflict of interest with general shareholders.
1.

External Officers do not fall into the following category:

1)

Executive persons1 of the Company and its subsidiaries (hereinafter, referred to as the “Group”);

2)

A counterparty which has transactions principally with the Group2, or its executive persons;

3)

Major counterparty3 of the Group or its executives;

4)

A consultant, accounting professional or legal professional who has been paid a large amount of moneyor other assets4 in addition to the External Director’s remunerations (in the event that such person is a
corporation or other association such as union, a person who belongs to such association);5)

An accounting auditor of the Group or a certified public accountant who belongs to an audit corporationthat is an accounting auditor of the Group;

6)

A person who receives donations or subsidies exceeding certain amount5 from the Group (in the eventthat a person who receives such donation or subsidy is a corporation or other association such as union,
executive persons of such association);7)

A major financial institution6 from which the Group has borrowed or executive persons of its parent
company or subsidiary;

8)

A major shareholder7 of the Group or in the event that such shareholder is a corporation, executive
persons of such corporation;

9)

Executive persons in a company which the Group is a major shareholder;10) A company which Director (regardless of full-time or part-time) is sent from the Group or executive
persons of its parent company or subsidiary; or
11) Persons who have recently fallen into the category of any of (1) to (10) above.
2.
3.

External officers are not close relative, etc.9 of persons who fall into the category of (1) to (11) in 1 above(limited to those who have important positions8).
Even though an External Officer satisfies the requirements of 1 and 2 above, if he/she is not considered to be
independent due to other reasons, the Company shall not deem him/her as an independent officer.

Notes:
1. Executive persons mean executives stipulated by Item 6 in Paragraph 3 of Article 2 of the Ordinance for Enforcementof the Companies Act and include executive Directors and employees, but not Audit & Supervisory Board Members
and Auditors.
2. A counterparty which has transactions principally with the Group means a counterparty which received paymentsfrom the Company, which accounted for more than 2% of its annual consolidated sales in any year of the most recent
three fiscal years.
3. A major counterparty of the Group is a counterparty whose payments to the Company accounted for more than 2%of the Company’s annual consolidated sales in any year of the most recent three fiscal years.
4. A large amount of money or other assets means money or other assets other than Director’s remuneration exceeding¥10 million per year in either year in the most recent three fiscal years.
5. Donation or subsidy exceeding certain amount means donation or subsidy exceeding ¥10 million per year in any
year of the most recent three fiscal years.
6. A major financial institution is a financial institution in which the Company has year-end loan balance of more than
2% of its consolidated total assets in any year of the most recent three fiscal years.
7. A major shareholder means a shareholder who has 10% or more of total voting rights (including both direct andindirect holding).
8. Those who have important positions include Directors (excluding External Directors), executive officers, corporate
officers and employees who are at the senior management level of manager or higher, certified public accountants
who belong to an audit corporation or accounting office, attorneys who belong to a law office, councilors who belong
to an incorporated foundation, incorporated association, educational corporation, or other corporation,
administrators such as Directors, or other persons who are objectively and reasonably deemed to have similar
importance.
9. Close relative, etc. means spouse or relative within the second degree.

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