Note: This document has been translated from a part of the Japanese original for reference purposes only. In
the event of any discrepancy between this translated document and the Japanese original, the original shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.
(Stock Exchange Code 1961)
June 7, 2018
To Shareholders with Voting Rights:
Tsutomu Hasegawa
Representative Director and President
SANKI ENGINEERING CO., LTD.
8-1, Akashicho, Chuo-ku, TokyoNOTICE OF CONVOCATION OF
THE 94th ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
You are cordially invited to attend the 94th Annual General Meeting of Shareholders of SANKI
ENGINEERING CO., LTD. (the “Company”). The meeting will be held for the purposes as described below.
If you are unable to attend the meeting, you may exercise your voting rights by either of the methods below.
Please review the attached Reference Documents for the General Meeting of Shareholders, and exercise yourvoting rights by no later than 5:00 p.m. Japan time on Tuesday, June 26, 2018.
[Exercising Voting Rights in Writing]
Please indicate your proposals on the enclosed Voting Rights Exercise Form, and return it such that it
arrives by the above deadline for exercise.
[Exercising Voting Rights via the Internet]
Please review the “Guide to Exercising Voting Rights via the Internet” on page 3 (Japanese version only),
access the voting rights exercise website designated by the Company (https://www.web54.net), and enter yourproposals by the above deadline for exercise, in accordance with the on-screen instructions.
1. Date and Time:

Wednesday, June 27, 2018 at 10:00 a.m. Japan time
(Reception opens: 9:00 a.m.)

2. Place:

Sakura Room, 4th Floor, Main Building, Imperial Hotel Tokyo
1-1, Uchisaiwai-cho 1-chome, Chiyoda-ku, Tokyo

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
94th Fiscal Year (April 1, 2017 - March 31, 2018) and results of audits by the
Accounting Auditor and the Audit & Supervisory Board of the Consolidated
Financial Statements
2. Non-consolidated Financial Statements for the Company’s 94th Fiscal Year
(April 1, 2017 - March 31, 2018)
Proposals to be resolved:
Appropriation of Surplus
Proposal 1:
Partial Amendments to the Articles of Incorporation
Proposal 2:
Election of 12 Directors
Proposal 3:
Election of 2 Audit & Supervisory Board Members
Proposal 4:
Election of 1 Substitute Audit & Supervisory Board Member
Proposal 5:
Revision of Amount of Remuneration for Directors and Audit & Supervisory
Proposal 6:
Board Members

-1-

1.
2.
3.

English versions of this Notice of Annual General Meeting of Shareholders and the Reference Documents for the General
Meeting of Shareholders will be posted on the Company’s website (http://www.sanki.co.jp).
Should the Appendix and the Reference Documents for the General Meeting of Shareholders require revisions, the revised
versions will be posted on the Company’s website (http://www.sanki.co.jp).
When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk.

-2-

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal 1:

Appropriation of Surplus

The Company considers the return of profits to shareholders an important management policy. The
Company recognizes its dividend policy as the foundation of its shareholder return policy, and has increased
its dividends in accordance with its business performance while maintaining a basic policy of a stabledividend, and taking into consideration the balance of ongoing business development and short-term returns
to shareholders.
The Company has maintained a high level of profits from the previous fiscal year, and therefore proposesa year-end dividend for the fiscal year under review as follows, in addition to a special dividend, in
acknowledgment of shareholders’ ongoing support.
Items Related to the Year-end Dividend(1) Items related to the allocation of dividend property to shareholders and its total amount
20 yen per common share of the Company(Including an ordinary dividend of 10 yen and a special dividend of 10 yen)
Total of 1,211,631,780 yen(2) Effective date of the appropriation of surplus
June 28, 2018
Furthermore, the Company paid an interim dividend of 15 yen per share, and therefore the total
dividend for the fiscal year under review will be 35 yen per share.

-3-

Proposal 2:

Partial Amendments to the Articles of Incorporation

1. Reason for the amendment
In order to establish a more sophisticated corporate governance structure in the future, the Company mustenhance mid- to long-term corporate value by balancing the functions of execution and supervision byforming a Board of Directors with persons that possess wide-ranging knowledge, experience, andcapabilities. To address such issues, the Company proposes to amend the maximum number of Directors
prescribed in Article 19 of the current Articles of Incorporation.
2. Details of the amendment
Details of the amendment are as follows.
Current Articles of Incorporation
Chapter 4 Directors and Board of Directors(Amended part is underlined.)
Proposed amendments to Articles of Incorporation
Chapter 4 Directors and Board of Directors

Article 19 The Company shall have not more thantwelve (12) Directors.

Article 19 The Company shall have not more thansixteen (16) Directors.

-4-

Proposal 3:

Election of 12 Directors

The terms of office of all Directors (10 Directors) will expire at the conclusion of this year’s Annual
General Meeting of Shareholders. Accordingly, the election of 12 Directors is proposed, by increasing 2
Directors (including 1 Non-executive Director) in order to further strengthen the corporate governancestructure.
The candidates for Director are as follows:
No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1968
June 2003
June 2004
April 2005
June 2005

Takuichi Kajiura(September 22, 1943)
1

June 2007
April 2008
April 2010
April 2011
April 2012
April 2012
April 2015
April 2017

2

Joined the Company
Director; Deputy General Manager, Air-Conditioning &Plumbing Division
Managing Executive Officer; General Manager,
Air-Conditioning & Plumbing Division
Managing Executive Officer; General Manager, Sales
Headquarters
Senior Executive Officer; General Manager, Sales
Headquarters
Director; Senior Executive Officer; General Manager, Sales
Headquarters
Director; Senior Executive Officer; General Manager,
Mechanical & Electrical Contracting Headquarters
Representative Director and Executive Vice President; General
Manager, Mechanical & Electrical Contracting Headquarters
Representative Director and Executive Vice President
Director
Representative Director and President
Representative Director and Chairman
Director and Chairman
To present

Number ofshares of theCompany held

81,200Reason for nomination
Mr. Takuichi Kajiura focuses on enhancing the corporate governance of the Company as Chair of the Board of Directors
and as Non-executive Director. In addition, he contributes to the enhancement of corporate value of the Company bydemonstrating his outstanding skills in activities of various economic organizations. The Company has judged that his
excellent experience and insights are essential for the overall Group to promote solid management, and has therefore
nominated him as a candidate for Director.
April 1975
Joined the Company
June 2008
Executive Officer; Deputy General Manager, Tokyo Branch,
Mechanical & Electrical Contracting Headquarters
April 2009
Executive Officer; General Manager, Business Strategy
Division, Mechanical & Electrical Contracting Headquarters
April 2010
Superior Executive Officer; General Manager, Tokyo Branch,
Mechanical & Electrical Contracting Headquarters
Managing Executive Officer; General Manager, Tokyo Branch
Tsutomu Hasegawa April 2011
22,500(March 4, 1953)
April 2012
Senior Executive Officer; General Manager, Sales
Administration Division
June 2012
Director; Senior Executive Officer; General Manager, Sales
Administration Division
April 2013
Representative Director; Senior Executive Officer; General
Manager, Mechanical & Electrical Contracting Headquarters
April 2015
Representative Director and President
To present
Reason for nomination
Mr. Tsutomu Hasegawa has continually demonstrated his leadership in the decision-making processes of the overall Groupas Representative Director and President. In addition, he has been taking the initiative in the promotion of workstylereforms, placing importance on communication with employees. As his capability as an executive and attractive personality
will bring unity among all employees, the Company has judged that he is essential for the Company to achieve its
Medium-Term Management Plan, and has therefore nominated him as a candidate for Director.

-5-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1972
June 2005
April 2008
April 2009
April 2011
April 2013

Nobuo Kumura(November 1, 1949)

June 2013
June 20143
April 2015
April 2017

Joined the Company
Executive Officer; Deputy General Manager, Kansai Branch
OfficeExecutive Officer; Deputy General Manager, Kansai Branch,
Mechanical & Electrical Contracting Headquarters
Managing Executive Officer; General Manager, Kansai Branch,
Mechanical & Electrical Contracting Headquarters
Managing Executive Officer; General Manager, Kansai BranchManaging Executive Officer; General Manager, Kansai Branch(in Charge of West Japan)
Director; Managing Executive Officer; General Manager, Kansai
Branch (in Charge of West Japan)
Director; Managing Executive Officer; General Manager, CSR
Promotion Division
Director; Senior Executive Officer; General Manager, CSR
Promotion Division
Representative Director and Executive Vice President
To present

Number ofshares of theCompany held

22,700<Responsibilities>
CSR Promotion Division, Chief Cost Inspector Office, Accounting Division, Real
Estate Business Office4

Reason for nomination
Mr. Nobuo Kumura has many years of experience in operation and division management of the facilities construction
business and deeply understands the conditions of the Group. With such a foundation, he currently assists the President as
Representative Director and Executive Vice President on a continuous basis and has responsibility for the CSR promotion
departments and accounting departments. The Company has judged that his above experience and abundant insights are
essential for the Company to promote solid management, and has therefore nominated him as a candidate for Director.
April 1973
Joined the Company
June 2006
Executive Officer; General Manager, Chugoku Branch Office
April 2008
Executive Officer; Deputy General Manager, Tokyo Branch,
Mechanical & Electrical Contracting Headquarters
Retired from the Company
March 2010
April 2010
Representative Director and President, Sanki Techno Support
Co., Ltd.
March 2012Retired from Sanki Techno Support Co., Ltd.
April 2012Managing Executive Officer; General Manager, Tokyo Branch,
the Company
April 2013
Managing Executive Officer; General Manager, Tokyo Branch
Hidemi Fujii(in Charge of East Japan)
17,700(January 1, 1951)
June 2013
Director; Managing Executive Officer; General Manager, Tokyo
Branch (in Charge of East Japan)
June 2014
Director; Managing Executive Officer; Deputy General
Manager, Mechanical & Electrical Contracting Headquarters(Supervising East Japan and West Japan)
April 2015
Director; Senior Executive Officer; General Manager,
Mechanical & Electrical Contracting Headquarters
April 2017
Representative Director and Executive Vice President
To present<Responsibilities>
Information Systems Office, General Affairs and Human Resources Division
Reason for nomination
Mr. Hidemi Fujii, who has a thorough knowledge regarding business of the facilities construction business, has served as adepartmental manager and President of Sanki Techno Support Co., Ltd. (a facilities construction business subsidiary) anddeeply understands the conditions of the Group. With such a foundation, he currently assists the President as
Representative Director and Executive Vice President on a continuous basis and has responsibility for general affairs,
human resources, and information systems departments. The Company has judged that his above experience and abundantinsights are essential to steady development of the Company, and has therefore nominated him as a candidate for Director.

-6-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1972
April 2011
April 2013
April 2017

Eiji Mitsuishi(February 24, 1952)
5

6

June 2017

Joined the Company
Executive Officer; Deputy General Manager, Chubu BranchManaging Executive Officer; General Manager, Chubu Branch
Senior Executive Officer; General Manager, Mechanical &Electrical Contracting Headquarters
Director; Senior Executive Officer; General Manager,
Mechanical & Electrical Contracting Headquarters
To present

Number ofshares of theCompany held

20,000<Responsibilities>
Mechanical & Electrical Contracting Headquarters, Labor Safety, Health, Quality
Management & Environment Promotion Office
Reason for nomination
Mr. Eiji Mitsuishi has many years of experience in operation and division management of the facilities construction
business and deeply understands the conditions of this business. With such a foundation, he currently demonstrates his
excellent management skills as the person responsible for mechanical & electrical contracting departments. The Company
has judged that his above experience and management skills are essential for the Company to further enhance corporate
value, and has therefore nominated him as a candidate for Director.
April 1976
Joined the Company
April 2012
Executive Officer; Deputy General Manager, Environmental
Systems Administration Division
October 2012
Executive Officer; General Manager, Environmental Systems
Administration Division
June 2014
Managing Executive Officer; General Manager, Plants &Machinery Systems Headquarters; General Manager,
Environmental Systems Administration Division
Takashi Motomatsu
April 2015
Managing Executive Officer; General Manager, Plants &12,200(February 1, 1953)
Machinery Systems Headquarters
June 2015
Director; Managing Executive Officer; General Manager, Plants& Machinery Systems Headquarters
April 2018
Director; Senior Executive Officer; General Manager, Plants &Machinery Systems Headquarters
To present<Responsibilities>
Plants & Machinery Systems Headquarters
Reason for nomination
Mr. Takashi Motomatsu has many years of experience in operation and division management of the environmental systems
business and has full knowledge regarding the conditions of related departments. With such a foundation, he currently has
responsibility for the machinery systems administration departments and environmental systems administration
departments. The Company has judged that his above experience and excellent management skills are essential for theCompany to further enhance corporate value, and has therefore nominated him as a candidate for Director.

-7-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1983
April 2012
April 2013
April 2016

Hirokazu Ishida(January 22, 1959)
7

June 2017

April 2018

Joined the Company
Executive Officer; Deputy General Manager, Sales
Administration Division
Executive Officer; General Manager, Hokkaido Branch Office
Managing Executive Officer; General Manager, Sales
Administration Division, Mechanical & Electrical Contracting
Headquarters
Director; Managing Executive Officer; General Manager, Sales
Administration Division, Mechanical & Electrical Contracting
Headquarters
Director; Senior Executive Officer; General Manager,
Management Planning Office
To present

Number ofshares of theCompany held

16,500<Responsibilities>
Management Planning Office8

Reason for nomination
Mr. Hirokazu Ishida has many years of experience in operation and division management of the facilities construction
business. He is currently involved in overall management of the Group as General Manager of the Management Planning
Office and is significantly contributing to the enhancement of the Company’s corporate value. The Company has judgedthat his past experience and insights into business management of the Group are essential to the further development of theCompany, and has therefore nominated him as a candidate for Director.
April 1985
Joined the Company
April 2014
Executive Officer; General Manager, Facility Systems Division
April 2017Managing Executive Officer; Deputy General Manager,
Mechanical & Electrical Contracting Headquarters*Masayuki Kudo
April 2018
Managing Executive Officer
5,100(June 27, 1959)
To present<Responsibilities>
Food Service Equipment Office, Mechanical & Electrical Contracting Headquarters,
Facility Systems Division, International Business Division
Reason for nomination
Mr. Masayuki Kudo has abundant operational experience including overseas as an engineer in the facilities construction
business. In addition, he has experienced division management in the facility systems business for many years, and has fullknowledge regarding business of both related departments. With such a foundation, he is currently demonstrating hisoutstanding skills as an officer responsible for international business, facility systems, and food service equipment. The
Company has judged that his experience in the Company and insights are essential to management of the Company, andhas therefore nominated him as a candidate for Director.

-8-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1971
July 1997
April 2000
January 2004

Masato Komura(July 12, 1947)

9

November 2005
June 2006
June 2007

April 2012
June 2012
June 2014

10

Joined Meiji Life Insurance Company
Director; General Manager, Finance Division, Meiji Life
Insurance Company
Executive Managing Director, Meiji Life Insurance Company
Senior Executive Director; General Manager, AssetManagement Division, Meiji Yasuda Life Insurance Company
Retired from Meiji Yasuda Life Insurance Company
Representative Director and Chairman, TOWA KOSAN
Retired from TOWA KOSAN
Director; Senior Executive Officer; General Manager, CSR
Promotion Division, the Company
Director
Director; Senior Executive Officer; General Manager, CSR
Promotion Division
Full-time Audit & Supervisory Board Member
To present

Number ofshares of theCompany held

39,000Reason for nomination
Mr. Masato Komura has worked at an asset management division of a life insurance company for many years and has athorough knowledge regarding finance and accounting. In addition, at the Company, he has experienced the management of
TOWA KOSAN (a real estate management subsidiary) and served as an officer responsible for environmental systems
administration departments and CSR promotion departments and has broad insight. Furthermore, he has contributed to theenhancement of corporate governance since June 2014 when he assumed office as full-time Audit & Supervisory Board
Member. In order to utilize his abundant operational experience and insight, the Company has nominated him as a
candidate for Non-executive Director.
April 1977
Joined MITSUI LIFE INSURANCE MUTUAL COMPANY
June 2008
Director; Managing Executive Officer, MITSUI LIFE
INSURANCE COMPANY LIMITED
April 2009
Representative Director and President; Chief Operating Officer;
General Manager, Operational Improvement Promotion Division
April 2012
Representative Director and President; Chief Operating Officer
Yukiteru Yamamoto
June 2013
Special Advisor
4,500(June 3, 1953)
June 2014
External Director, the Company
To present
April 2015
Advisor, MITSUI LIFE INSURANCE COMPANY LIMITED
March 2017Retired from MITSUI LIFE INSURANCE COMPANY
LIMITED
Reason for nomination
Mr. Yukiteru Yamamoto has served in positions including Representative Director and President of MITSUI LIFE
INSURANCE COMPANY LIMITED, was also active as an Executive Member of the Policy Board of the Japan Business
Federation from August 2013 to March 2017, and he thus possesses abundant operational experience and wide-ranging
knowledge regarding corporate management. In order to utilize his experience and insight developed through thisbackground, the Company has nominated him as a candidate for External Director.

-9-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1970
May 1988
May 1990

Makoto Nukaga(December 21, 1946)
11

May 1991
May 1992
September 1994
March 1996
October 1997

June 1998
June 2010
December 2010
January 2011
September 2015
June 2016

12

Joined The Bank of Japan
Manager, Overseas Research Section, Research and Statistics
Department
Manager, Management Planning Section, Management
Administration Department
Manager, General Affairs Section, International Department
General Manager, Niigata Branch
Examiner, Examination Department
General Manager, Kobe Branch
Retired from The Bank of Japan
Director and Vice President, Chibagin Research InstituteCorporation
Director and President
Director and Chairman
Retired from Chibagin Research Institute Corporation
President, Organization for Workers’ Retirement Allowance
Mutual Aid
Retired from Organization for Workers’ Retirement Allowance
Mutual Aid
External Director, the Company
To present

Number ofshares of theCompany held

5,500

Reason for nomination
Mr. Makoto Nukaga worked at The Bank of Japan for many years, and served in managerial positions in key departments,
in addition to serving as Director and President of Chibagin Research Institute Corporation and President of theOrganization for Workers’ Retirement Allowance Mutual Aid, etc., and he thus possesses abundant operational experienceand wide-ranging knowledge. In order to utilize his experience and insight developed through this background, theCompany has nominated him as a candidate for External Director.
April 1977
Joined Mitsui Bank Co., Ltd.
June 2005
Executive Officer; General Manager, Operations Audit Division,
Sumitomo Mitsui Banking Corporation
April 2008
Executive Officer
April 2008
Retired from Sumitomo Mitsui Banking Corporation
May 2008
Representative Director and President, SMBC Staff Service Co.,Ltd.
*Kazuhiko Kashikura
May 2013
Retired from SMBC Staff Service Co., LTD.
None
(April 13, 1954)
June 2013
Representative Director and President, SMBC Finance Service
Co., Ltd.
June 2017
Representative Director and Chairman, the Company
To present<Significant concurrent positions>Representative Director and Chairman, SMBC Finance Service Co., Ltd.
Outside Corporate Auditor, Muromachi Co.,Ltd
Reason for nomination
Mr. Kazuhiko Kashikura has served as Executive Officer of Sumitomo Mitsui Banking Corporation and a top executive at
the same group companies and he thus has abundant experience and broad insight in corporate management. In order toutilize his experience and insight developed through this background, the Company has nominated him as a candidate forExternal Director.

(Notes) 1. * indicates a new candidate for Director.
2. Mr. Masato Komura is currently serving as Audit & Supervisory Board Member and is scheduled to resign as Audit &Supervisory Board Member at the conclusion of this General Meeting of Shareholders.
3. There are no special interests between the candidates and the Company.
4. (1) Mr. Yukiteru Yamamoto, Mr. Makoto Nukaga, and Mr. Kazuhiko Kashikura are candidates for External Director.
(2) The Company has registered Mr. Yukiteru Yamamoto and Mr. Makoto Nukaga with the Tokyo Stock Exchange as
Independent Officers with no possibility of a conflict of interest occurring with general shareholders, whose
designation is required by the Exchange. If they are reappointed and assumes office as Directors, They will contributeto be Independent Officers.
(3) If Mr. Kazuhiko Kashikura is appointed and assumes office as Director, the Company intends to register him with theTokyo Stock Exchange as Independent Officer with no possibility of a conflict of interest occurring with general- 10 -

shareholders, whose designation is required by the Exchange.
5. Number of years since candidates for External Director were appointed External Director(1) Mr. Yukiteru Yamamoto’s term in office as External Director will be four years at the conclusion of this General
Meeting of Shareholders.
(2) Mr. Makoto Nukaga’s term in office as External Director will be two years at the conclusion of this General Meetingof Shareholders.
6. Liability limitation agreements with candidates for Director(1) The Company has entered into agreements with Mr. Takuichi Kajiura, Mr. Yukiteru Yamamoto, and Mr. Makoto
Nukaga to limit their liabilities as provided for in Article 423, Paragraph 1, of the Companies Act, and the maximum
amount of liability under this agreement shall be the greater of 10 million yen or the minimum amount stipulated inlaws and regulations. In addition, if Mr. Kazuhiko Kashikura is appointed and assumes office as Director, theCompany intends to enter into the same agreement with him.
(2) The Company has entered into an agreement with Mr. Masato Komura as Audit & Supervisory Board Member tolimit his liability as provided for in Article 423, Paragraph 1, of the Companies Act. The maximum amount ofliability under this agreement shall be the greater of 10 million yen or the minimum amount stipulated in laws andregulations. If he is appointed and assumes office as Director, the Company intends to newly enter into the agreementwith him as Director.

- 11 -

Proposal 4:

Election of 2 Audit & Supervisory Board Members

The Company proposes that the number of Audit & Supervisory Board Members be increased by 1 tostrengthen and improve the audit structure. In addition, Audit & Supervisory Board Member Masato Komura
will resign at the conclusion of this year’s Annual General Meeting of Shareholder. Therefore the election of
2 Audit & Supervisory Board Members is proposed.
Furthermore, the Audit & Supervisory Board has given its approval to this proposal.
The candidates for Audit & Supervisory Board Member are as follows:
No.

Name
(Date of birth)*Etsuji Hitomi(May 13, 1951)

1

2

Past experience, positions
and significant concurrent positions
April 1970
July 2003
June 2007
March 2013
April 2013
June 2014
March 2017
April 2017

Joined the Company
General Manager, Accounting Department, Accounting Division
General Manager, Internal Audit Office
Retired from the Company
Director, SANKI KANKYO SERVICE CO., LTD.
Executive Managing Director
Retired from SANKI KANKYO SERVICE CO., LTD.
Management Planning Office, the Company
To present

Number ofshares of theCompany held

1,000

Reason for nomination
Mr. Etsuji Hitomi had worked at the accounting and finance departments of the Company for many years and has athorough knowledge regarding finance and accounting. In addition, he engaged in audits of compliance as General
Manager of Internal Audit Office and served as Executive Managing Director of SANKI KANKYO SERVICE CO., LTD.
(a plant facilities business subsidiary) and he thus has abundant operational experience and wide-ranging knowledge
regarding corporate management. In order to utilize his abundant operational experience and insight, the Company has
nominated him as a candidate for Audit & Supervisory Board Member.
April 1976
Appointed as a public prosecutor
June 2006
Director-General of the Rehabilitation Bureau, The Ministry ofJusticeJanuary 2008
Director-General of the Public Security Division, Supreme
Public Prosecutors Office
July 2008
Director-General of Citizen Judge Trial Division
Superintending Prosecutor, Hiroshima High Public Prosecutors
June 2010
OfficeDecember 2010 Superintending Prosecutor, Nagoya High Public Prosecutors
OfficeAugust 2011Retired from Nagoya High Public Prosecutors Office
September 2011 Registered as an attorney-at-law*Shozo Fujita
None
June 2012
Representative Director and President, The Resolution and(August 1, 1948)
Collection Corporation
October 2015
Retired from The Resolution and Collection Corporation
Joined OKUNO & PARTNERS
To present<Significant concurrent positions>
Attorney-at-law (OKUNO & PARTNERS)
Outside Director, Member of Audit and Supervisory Committee, AssetManagement One Co., Ltd.
Outside Director, Eco’s Co, Ltd
Outside Director-Audit and Supervisory Committee Member, Bunka Shutter Co.,Ltd.
Reason for nomination
Mr. Shozo Fujita has expertise as a public prosecutor and attorney-at-law, and abundant experience and wide-ranging
insights through experience including as Representative Director and President of The Resolution and Collection
Corporation and as a director who serves as an audit and supervisory committee member at other companies. In order toutilize his experience and insight developed through this background to audit the Company, the Company has nominatedhim as a candidate for External Audit & Supervisory Board Member.

(Notes) 1. * indicates a new candidate for Director.
2. Special interests between the candidates and the Company
Mr. Shozo Fujita is serving concurrently as Outside Director and Member of Audit and Supervisory Committee of Asset- 12 -

Management One Co., Ltd., with which the Company has transactions including a facilities construction subcontracting
agreement.
3. (1) Mr. Shozo Fujita is a candidate for External Audit & Supervisory Board Member and fulfills the criteria in the
Independence Standards for External Officers established by the Company, as in the most recent three fiscal years,transactions with Asset Management One Co., Ltd. described in the above (Note) 2. accounted for less than 1% ofconsolidated net sales, respectively.
(2) If Mr. Shozo Fujita is appointed and assumes office as Audit & Supervisory Board Member, the Company intends toregister him with the Tokyo Stock Exchange as Independent Officer with no possibility of a conflict of interest
occurring with general shareholders, whose designation is required by the Exchange.
4. Liability limitation agreements with candidates for Audit & Supervisory Board Members.
If Mr. Etsuji Hitomi and Mr. Shozo Fujita are appointed and assume office as Audit & Supervisory Board Members, theCompany intends to enter into agreements with them to limit their liabilities as provided for in Article 423, Paragraph 1,of the Companies Act, and the maximum amount of liability under this agreement shall be the greater of 10 million yenor the minimum amount stipulated in laws and regulations.

- 13 -

Proposal 5:

Election of 1 Substitute Audit & Supervisory Board Member

Substitute Audit & Supervisory Board Member Takaya Abe was elected at the 93rd Annual General
Meeting of Shareholders held on June 27, 2017, and the effectiveness of his election will expire at theconclusion of this year’s Annual General Meeting of Shareholders. Therefore, in order to prepare for cases
where the number of Audit & Supervisory Board Members falls below prescribed by laws and regulations,the Company proposes the election of Mr. Takaya Abe as a substitute Audit & Supervisory Board Member.
Furthermore, the Audit & Supervisory Board has given its approval to this proposal.
The candidate for Substitute Audit & Supervisory Board Member is as follows:
Name(Date of birth)

Takaya Abe(February 19, 1952)

Past experience, positions
and significant concurrent positions
January 1982
April 1984
May 1995
May 2001
July 2010
June 2014
July 2014

Joined Shinwa Audit Corporation
Registered as certified public accountant
Partner, Asahi Audit Corporation
Representative Partner
Partner, KPMG AZSA LLC
Retired from KPMG AZSA LLC
Established Abe Certified Public Accountant Office
To present<Significant concurrent position>
Certified public accountant (Abe Certified Public Accountant Office)Number ofshares of theCompany held

None

Reason for nomination
In order to utilize Mr. Takaya Abe’s expertise and experience, etc. developed as a certified public accountant to strengthen theaudit systems of the Company, the Company has nominated him as a candidate for substitute External Audit & Supervisory Board
Member.
(Notes) 1. There are no special interests between the candidate and the Company.
2. (1) The candidate is a candidate for substitute External Audit & Supervisory Board Member.
(2) If Mr. Takaya Abe assumes office as Audit & Supervisory Board Member, the Company intends to register him with
the Tokyo Stock Exchange as Independent Officer with no possibility of a conflict of interest occurring with generalshareholders, whose designation is required by the Exchange.
3. Liability limitation agreements with the candidate for substitute External Audit & Supervisory Board Member
If Mr. Takaya Abe is appointed as Audit & Supervisory Board Member, the Company intends to enter into an agreementwith him to limit his liability as provided for in Article 423, Paragraph 1 of the Companies Act, and the maximum
amount of liability under this agreement shall be the greater of 10 million yen or the minimum amount stipulated in laws
and regulations.

- 14 -

<Reference>[Policy on nomination of a candidate for Director and Audit & Supervisory Board Member]
The Company established the “Sanki Engineering Corporate Governance Guidelines” and stipulated apolicy about nomination of a candidate for Director and Audit & Supervisory Board Member as follows.
1. Candidates for Director(Policy on nomination of candidates for Director)(1) The Board of Directors shall nominate as a candidate for Director a person who has abundant operational
experience and knowledge, excellent insight, and high ethics and is expected to fulfill the role of a Director and theBoard of Directors as listed below.
(2) The Board of Directors shall nominate as a candidate for External Director a person who is expected to provide
advice from an independent and objective standpoint in addition to qualifications listed in the preceding paragraph.
(Roles of Directors and the Board of Directors)(1) Directors and the Board of Directors shall make effort to realize sustainable growth and enhance corporate value
over the medium to long term as entrusted by the shareholders by realizing efficient and effective corporate
governance, conducting important decision-making of the Company, and supervising execution of duties.
(2) Directors and the Board of Directors shall make effort to build internal control systems, establish risk management
systems, and make information disclosure in a timely and appropriate manner.
(3) The Board of Directors shall supervise the state of progress regarding election of a successor to the chief executive
officer whenever necessary.
(4) The Board of Directors shall establish procedures on transactions with conflicts of interest and deliberate andapprove transactions.
2. Candidates for Audit & Supervisory Board Member(Policy on nomination of candidates for Audit & Supervisory Board Member)(1) The Board of Directors shall nominate as a candidate for Audit & Supervisory Board Member a person who has
excellent insight and high ethics and is expected to fulfill the role of an Audit & Supervisory Board Member as
listed below, subject to prior consent from the Audit & Supervisory Board.
(2) The Board of Directors shall nominate as a candidate for External Audit & Supervisory Board Member a person
who is expected to provide advice from an independent and objective standpoint in addition to qualifications listed
in the preceding paragraph.
(3) The Board of Directors shall make effort to appoint at least one Audit & Supervisory Board Member who hasappropriate knowledge regarding finance and accounting.
(Roles of Audit & Supervisory Board Members)
Audit & Supervisory Board Members who shall play a part of supervision functions in cooperation with the Board of
Directors shall make efforts to realize sound and sustainable growth and enhancement of corporate value over the medium
to long term, and establish a superior corporate governance structure that can respond to social trust, while maintaining
appropriate cooperation with stakeholders by auditing the execution of duties of Directors as an independent organization
entrusted by the shareholders.

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[Independence Standards for External Officers]
The Company established the “Independence Standards for External Officers” and designates those notapplicable to all of categories listed below as an Independent Officer.
1. A person whose major business partner (Note 1) is the Company or an executive person (Note 2) of the same if such
person is a juridical person, etc. (Note 3).
2. A major business partner (Note 1) of the Company or a major lender (Note 4) of the Company or an executive person(Note 2) of the same if such person is a juridical person, etc. (Note 3).
3. A consultant, accounting professional, or legal professional who receives a significant amount of money or other assets(Note 5) from the Company other than Officer remuneration.
4. A person who has fallen under any of items 1 to 3 above in a recent period (Note 6)
5. A relative within the second degree of relationship of a person who falls under any of items (a) to (d) below (excluding
a person with whom relationship was dissolved due to a divorce, dissolution, etc.).
(a) A person who falls under any of items 1 to 4.
(b) An executive person (Note 2) of the Company’s subsidiary(c) A Non-executive Director of the Company’s subsidiary (in the case that an External Audit & Supervisory
Board Member is nominated as an Independent Officer)(d) A person who has fallen under the preceding (b) or (c) or an executive person (Note 2) of the Company in a
recent period (Note 6)
6. A major shareholder of the Company holding 10% or more of the Company’s total shares for three or moreconsecutive years in a recent period (Note 6) or an executive person (Note 2) of the same if such person is a juridical
person, etc. (Note 3).
(Note 1) A “Major business partner” refers to a business partner with which the Company has transactions
corresponding to, in principle, 3% or more of annual consolidated sales of the Company for three or moreconsecutive years (3% of annual consolidated sales is approximately 5,104 million yen in fiscal 2017)(Note 2) An “executive person” refers to an Executive Director or employee in the General Manager position orequivalent managerial position and other equally important position(Note 3) A “juridical person, etc.” refers to a juridical person or any organization other than a juridical person (including
agricultural cooperatives and management associations)(Note 4) A “major lender” refers to a lender from which the balance of loans as of the end of each fiscal year is, inprinciple, 2% or more of the consolidated total assets of the Company on the same day for three or moreconsecutive years (2% of the consolidated total asset is approximately 3,571 million yen in fiscal 2017)(Note 5) A “significant amount of money or other assets” refers to that with a value equivalent to a cash amount of 10
million yen or more per annum(Note 6) A “recent period” refers to a five-year period before the time point in which the election proposal to besubmitted to the shareholder’s meeting is determined- 16 -

Proposal 6:

Revision of Amount of Remuneration for Directors and Audit & Supervisory Board
Members

Regarding remuneration amounts for the Company’s Directors and Audit & Supervisory Board Members,
it was approved at the 82nd Annual General Meeting of Shareholders held on June 28, 2006 that
remuneration shall be not more than 450 million yen per annum for Directors and not more than 100 million
yen per annum for Audit & Supervisory Board Members, which remains effective to this day. However, toenable the Company to flexibly operate the remuneration system for officers by revising the amount of
remuneration stated above in consideration of an increase in the number of Directors and Audit &Supervisory Board Members associated with the strengthening of the Company’s corporate governancestructure and the possibility of further increase in responsibilities of Directors and Audit & Supervisory
Board Members due to changes in economic conditions and the business environment, the Company
proposes to revise the amount of remuneration to not more than 650 million yen (of which, not more than 50
million yen for External Directors) per annum for Directors and not more than 120 million yen per annum
for Audit & Supervisory Board Members.
The number of Directors is currently 10 and the number of Audit & Supervisory Board Members iscurrently four. If Proposal 3 and Proposal 4 are approved, the number of Directors and Audit & Supervisory
Board Members will be 12 (including three External Directors) and five (including three External Audit &Supervisory Board Members), respectively.

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