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 3, 2021
To Shareholders with Voting Rights:
Hirokazu Ishida
Representative Director and President
SANKI ENGINEERING CO., LTD.
8-1, Akashicho, Chuo-ku, TokyoNOTICE OF CONVOCATION OF
THE 97th ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
We wish to extend our sincere sympathy to all those affected by the COVID-19 outbreak since last year.
Please be informed that the 97th Annual General Meeting of Shareholders of SANKI ENGINEERING CO.,LTD. (the “Company”) will be held for the purposes as described below.
Carefully considering this situation in response to the spread of COVID-19, we have decided to takeappropriate measures to prevent infections and hold the General Meeting of Shareholders.
From the perspective of infection prevention, for this General Meeting of Shareholders, we strongly urge all
shareholders to exercise their voting rights in writing or via the Internet beforehand and refrain from visiting
the venue on the day of the General Meeting of Shareholders, irrespective of their health condition.
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 your voting rights by no later than 5:00 p.m.
Japan time on Tuesday, June 22, 2021.
[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 5 (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.
Please note that we will not provide souvenirs to shareholders attending the meeting.

-1-1. Date and Time:

Wednesday, June 23, 2021 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
97th Fiscal Year (April 1, 2020 - March 31, 2021) 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 97th Fiscal Year
(April 1, 2020 - March 31, 2021)
Proposals to be resolved:
Appropriation of Surplus
Proposal 1:
Election of 11 Directors
Proposal 2:
Election of 1 Substitute Audit & Supervisory Board Member
Proposal 3:
Determinations of Details of Stock Acquisition Rights to Directors as
Proposal 4:
Stock-based Compensation Stock Options

1.
2.

3.
4.

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 (https://www.sanki.co.jp/).
Of the documents to be included in this notice of the General Meeting of Shareholders, “Matters relating to the Company's
Stock Acquisition Rights,” “Matters relating to Accounting Auditor” and “Company's Structure and Policy” of the Business
Report and “Consolidated Statement of Changes in Equity” and “Notes to the Consolidated Financial Statements” of theConsolidated Financial Statements as well as “Statement of Changes in Equity” and “Notes to the Non-consolidated
Financial Statements” of the Non-consolidated Financial Statements are posted on the Company’s website(https://www.sanki.co.jp/) pursuant to laws and regulations as well as Article 16 of the Articles of Incorporation of theCompany, and are therefore not provided in the Appendix of this notice of the General Meeting of Shareholders. The
Business Report, Consolidated Financial Statements and Non-consolidated Financial Statements described in the Appendix
of this notice of the General Meeting of Shareholders are excerpt of the Consolidated Financial Statements andNon-consolidated Financial Statements audited by the Accounting Auditor in preparing the accounting audit report, and theBusiness Report, Consolidated Financial Statements and Non-consolidated Financial Statements audited by the Audit &Supervisory Board Members in preparing the audit report.
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 (https://www.sanki.co.jp/).
When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the reception desk.

-2-

Response to Prevent the Spread of COVID-19
We would like to announce the following matters in response to COVID-19 during this General Meeting of
Shareholders. We would appreciate your understanding and cooperation.
1. Request all shareholders to exercise their voting rights in writing or via the Internet beforehand
We request our shareholders to exercise their voting rights in writing or via the Internet in advance whenpossible.
2. Announcement regarding video streaming before and after the meeting
Streaming video of the Business Report for the fiscal year ended March 31, 2021 and the Issues to be
Addressed will be posted on the Company’s website (https://www.sanki.co.jp/) around Thursday, June 17,
2021 before the day of the meeting.
In addition, the on-demand video of this General Meeting of Shareholders will be delivered through theCompany’s website (https://www.sanki.co.jp/).
3. Guidance on the call for questions before the meeting
We will accept questions about the Matters to be Reported and Proposals to be Resolved in this General
Meeting of Shareholders on the Company’s website (https://www.sanki.co.jp/).
<Deadline> Tuesday, June 22, 2021 at 5:00 p.m.
4. Request to shareholders attending in personi) Our response on the day of the General Meeting of Shareholders• Please note that the number of shareholders to enter the venue may be limited, depending on the numberof attendees in order to provide sufficient space between attendees. We would like to ask for your kindunderstanding in advance.
• We will prepare alcohol disinfectant for shareholders near the reception at the venue.
If you will be attending the meeting, please bring and wear a face mask on the day.
• We shall be measuring the temperatures of all attendees near the reception at the venue. If you have afever, are feeling unwell, or have been overseas in the past two weeks, you may be refused entry to themeeting and we may request for you to leave. For shareholders who have been overseas in the past two
weeks, please report it at the reception.
• The operating staff at this General Meeting of Shareholders shall be wearing masks as they measuretemperatures and check whether shareholders are feeling unwell.
• From the standpoint of shortening the duration of this General Meeting of Shareholders in order toprevent the spread of COVID-19, the explanation of the matters to be reported (including the audit
report) and the proposals at the meeting hall may be abbreviated. We hereby request all shareholders toread this Notice of Convocation of the General Meeting of Shareholders beforehand.
ii) Communication of information up until the day of the General Meeting of Shareholders• Depending on the developments of the COVID-19 outbreak and announcements, etc. to be made by thegovernment, etc. by the day of the General Meeting of Shareholders, the response method might bealtered. Please be sure to check the Company’s website (https://www.sanki.co.jp/) for the latest
information.

-3-

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.
In fiscal year 2019 as the first year of Phase 2 of the medium-term management plan “Century 2025,”
among the Group’s management goals for Phase 2, a total payout ratio of 70% or higher has been set as atarget, with a basic policy of paying a stable dividend of 60 yen or more per share each year and flexibly
acquiring the Company’s treasury stock of approximately 500 million shares during the period of Phase 2.
In the fiscal year under review (FY2020), we had significant impact in every aspect, arising from factors
such as the sharp drop in the economy due to the COVID-19 outbreak and lifestyle changes. Even undersuch circumstances, the Group believes that our contribution to the recovery and revitalization of theeconomy by returning profits to shareholders, who are stakeholders of ours, will help to realize a sustainable
society.
Accordingly, the Company proposes a year-end dividend for the fiscal year under review as follows, inaddition to a special dividend.
1. Items Related to the Year-end Dividend(1) Items related to the allocation of dividend property to shareholders and its total amount
45 yen per common share of the Company(Including an ordinary dividend of 35 yen and a special dividend of 10 yen)
Total of 2,552,342,130 yen(2) Effective date of the appropriation of surplus
June 24, 2021
Furthermore, the Company paid an interim dividend of 35 yen per share, and therefore the total
dividend for the fiscal year under review will be 80 yen per share.

-4-

Proposal 2:

Election of 11 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 addition of one (1) Director in order to further strengthen
the corporate governance structure and the election of 11 Directors is proposed.
The candidates for Director are as follows:

No.

Current positions andresponsibilities

Name

1

Reappointed

Tsutomu
Hasegawa

2

Reappointed

Hirokazu Ishida

3

Reappointed

Eiji Mitsuishi

4

Reappointed

Masayuki Kudo

5

Newly

Kazuaki Iijima

6

Reappointed

Hirotoshi Fukui

7

Reappointed

Yoshio Kawabe

8

Reappointed

9

Reappointed

10

Newly

11

Newly

appointed

appointed
appointed

Yukiteru
Yamamoto
Kazuhiko
Kashikura
Keiji Kono
Akihiko Matsuda

External
Independent
External
Independent
External
Independent
External
Independent

Representative Director andChairman (of the Board)
Representative Director andPresident
Director; Senior Executive Officer;
General Manager, Mechanical &Electrical Contracting Headquarters
Director; Senior Executive Officer;
General Manager, CSR Promotion
DivisionManaging Executive Officer;
General Manager, Plants &Machinery Systems Headquarters
Director; Executive Officer; General
Manager, General Affairs andHuman Resources Division
Director; Executive Officer; General
Manager, Accounting Division;
Chief Financial Officer
External Director; Chair of theBoard of Directors
External Director

Attendance at
the Board of
Directors’
meetings
91%(11/12)100%(12/12)100%(12/12)100%(12/12)–100%(11/11)100%(11/11)100%(12/12)91%(11/12)

–

–

–

–

-5-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1975
June 2008
April 2009
April 2010

Tsutomu Hasegawa(March 4, 1953)
Reappointed

1

April 2011
April 2012
June 2012
April 2013
April 2015
April 2020
<Responsibilities>
Secretarial Office2

Joined the Company
Executive Officer; Deputy General Manager, Tokyo Branch,
Mechanical & Electrical Contracting Headquarters
Executive Officer; General Manager, Business Strategy
Division, Mechanical & Electrical Contracting Headquarters
Superior Executive Officer; General Manager, Tokyo Branch,
Mechanical & Electrical Contracting Headquarters
Managing Executive Officer; General Manager, Tokyo Branch
Senior Executive Officer; General Manager, Sales
Administration Division
Director; Senior Executive Officer; General Manager, Sales
Administration Division
Representative Director; Senior Executive Officer; General
Manager, Mechanical & Electrical Contracting Headquarters
Representative Director and President
Representative Director and Chairman (of the Board)
To present

Number ofshares of theCompany held

32,200Reason for nomination
Since April 2015, as Representative Director and President, Mr. Tsutomu Hasegawa has continually demonstrated hisleadership in a myriad of situations and engaged in business operations. Since April 2020, he has displayed his managerial
abilities, insight and capabilities cultivated over the years in the position of Representative Director and Chairman. The
Company has judged that he is essential for the Group to enhance its corporate value, and has therefore nominated him as a
candidate for Director.
April 1983
Joined the Company
April 2012
Executive Officer; Deputy General Manager, Sales
Administration Division
April 2013
Executive Officer; General Manager, Hokkaido Branch Office
April 2016
Managing Executive Officer; General Manager, Sales
Administration Division, Mechanical & Electrical Contracting
Hirokazu Ishida
Headquarters(January 22, 1959) June 2017
Director; Managing Executive Officer; General Manager, Sales
26,200Administration Division, Mechanical & Electrical Contracting
Reappointed
Headquarters
Director; Senior Executive Officer; General Manager,
April 2018
Management Planning Office
April 2020
Representative Director and President
To present<Responsibilities>
Management Planning Office and Legal Affairs Office
Reason for nomination
Since joining the Company, Mr. Hirokazu Ishida engaged in the facilities construction business for many years, andpossesses abundant experience, knowledge and achievements related to the Company’s business. He also has served inpositions including General Manager of the Management Planning Office, and has been doing his utmost to promotestrengthening of the management foundation and the long-term vision “Century 2025” since April 2020, as Representative
Director and President. The Company has judged that he is essential for the Group to enhance its corporate value, and has
therefore nominated him as a candidate for Director.

-6-

No.

Name
(Date of birth)

Eiji Mitsuishi(February 24, 1952)
Reappointed

3

4

Past experience, positions, responsibilities,
and significant concurrent positions
April 1972
April 2011
April 2013
April 2017
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<Responsibilities>
Mechanical & Electrical Contracting Headquarters (excluding International
Business Administration Division), Labor Safety, Health, Quality Management &Environment Promotion Office

Number ofshares of theCompany held

31,500Reason for nomination
Mr. Eiji Mitsuishi has many years of experience in operation and division management of the facilities construction
business. Currently, he serves as General Manager of the Mechanical & Electrical Contracting Headquarters, and is making
efforts in the promotion of workstyle reforms at construction sites and the prevention of work accidents. The Company has
judged that his above experience and achievements are essential for the Group to further enhance its corporate value, andhas therefore nominated him as a candidate for Director.
April 1985
Joined the Company
June 2014
Executive Officer; General Manager, Facility Systems Division
April 2017Managing Executive Officer; Deputy General Manager,
Mechanical & Electrical Contracting Headquarters
April 2018
Managing Executive Officer
Masayuki Kudo
June 2018
Director; Managing Executive Officer(June 27, 1959)
April 2021
Director; Senior Executive Officer; General Manager, CSR
16,400
Promotion Division
Reappointed
To present<Responsibilities>
CSR Promotion Division, Chief Cost Inspector Office, Information Systems Office,International Business Administration Division of the Mechanical & Electrical
Contracting Headquarters, Facility Systems Division
Reason for nomination
After getting abundant operational experience, including experience overseas, as an engineer in the facilities construction
business, Mr. Masayuki Kudo served as General Manager of the Facility Systems Division. Currently, he is demonstrating
his outstanding skills to ensure compliance in the workplace as General Manager of the CSR Promotion Division. The
Company has judged that his above achievements and insights are essential for the Group to enhance its 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 1984
April 2016

Kazuaki Iijima(August 12, 1958)
Newly appointed

56

October 2018
April 2021

Joined the Company
Executive Officer; General Manager, Technology ResearchInstituteExecutive Officer; General Manager, Technical Research &Development Center
Managing Executive Officer; General Manager, Plants &Machinery Systems Headquarters
To present<Responsibilities>
Plants & Machinery Systems Headquarters, Technical Research & Development
CenterNumber ofshares of theCompany held

10,400Reason for nomination
Since joining the Company, Mr. Kazuaki Iijima has achievements as an engineer and experience as a manager in the
research and development and the energy saving business. Currently, as General Manager of the Plants & Machinery
Systems Headquarters, he contributes to the development of the machinery systems business and the environmental
systems business. The Company has judged that his above experience and achievements are essential for the Company tofurther enhance corporate value, and has therefore nominated him as a candidate for Director.
April 1982
Joined the Company
April 2012
Executive Officer; General Manager, Technology Development
Division
April 2013
Executive Officer; General Manager, Technology ResearchInstitute
Hirotoshi Fukui(May 12, 1958)
April 2016
Executive Officer
18,200June 2016
Full-time Audit & Supervisory Board Member
Reappointed
June 2020
Director; Executive Officer; General Manager, General Affairs
and Human Resources Division
To present<Responsibilities>
General Affairs and Human Resources Division
Reason for nomination
Since joining the Company, Mr. Hirotoshi Fukui has amassed a wide range of operational experience as an engineer in thefacilities construction business. Thereafter, he served as the manager responsible for the technology development
departments, and currently contributes to the enhancement of human resource development and working environment as
General Manager of the General Affairs and Human Resources Division. The Company has judged that his above
experience and insights are essential for the Group to enhance its corporate value, and has therefore nominated him as a
candidate for Director.

-8-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1984
April 2015
June 2015

Yoshio Kawabe(October 31, 1960)
Reappointed

7

April 2017
June 2017
June 2020

Joined the Company
Executive Officer; General Manager, Administration Division
Director; Executive Officer; General Manager, Administration
Division
Director; Executive Officer; General Manager, Accounting
Division
Executive Officer; General Manager, Accounting Division
Director; Executive Officer; General Manager, Accounting
Division; Chief Financial Officer
To present<Responsibilities>
Accounting Division

8

Number ofshares of theCompany held

7,700

Reason for nomination
Since joining the Company, Mr. Yoshio Kawabe has engaged mainly in accounting and finance-related operations and thepromotion of internal control. After serving as a manager responsible for the administration departments including generalaffairs and human resources, he currently serves as General Manager of the Accounting Division and focuses on capital andfinance policies. The Company has judged that his above experience and insights are essential for the Group to enhance its
corporate value, and has therefore nominated him as a candidate for 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;
Yukiteru Yamamoto
General Manager, Operational Improvement Promotion Division(June 3, 1953)
April 2012
Representative Director and President; Chief Operating Officer
June 2013
Special Advisor
9,600
External
June 2014
External Director, the Company
Independent Officer
April 2015
Advisor, MITSUI LIFE INSURANCE COMPANY LIMITED
Reappointed
March 2017Retired from MITSUI LIFE INSURANCE COMPANY
LIMITED
June 2020
External Director; Chair of the Board of Directors, the Company
To present
Reason for nomination
Mr. Yukiteru Yamamoto has served in positions including Representative Director and President of MITSUI LIFE
INSURANCE COMPANY LIMITED (currently TAIJU LIFE INSURANCE COMPANY LIMITED) and Executive
Member of the Policy Board of the Japan Business Federation, and he thus possesses abundant operational experience andwide-ranging knowledge regarding corporate management. He currently contributes to the enhancement of corporate
governance as Chair of the Board of Directors of the Company. His advice and supervision based on the experience andinsights developed through this background will lead to sustainable enhancement of the corporate value, and the Company
has therefore nominated him again as a candidate for External Director.

-9-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1977
June 2005

Kazuhiko Kashikura(April 13, 1954)

9

10

External
Independent Officer
Reappointed

April 2008
April 2008
May 2008
May 2013
June 2013
June 2017
June 2018

Joined Mitsui Bank Co., Ltd.
Executive Officer; General Manager, Operations Audit Division,
Sumitomo Mitsui Banking Corporation
Executive Officer
Retired from Sumitomo Mitsui Banking Corporation
Representative Director and President, SMBC Staff Service Co.,Ltd.
Retired from SMBC Staff Service Co., LTD.
Representative Director and President, SMBC Finance Service
Co., Ltd.
Representative Director and Chairman
External Director, the Company
To present
Retired from the position of Representative Director andChairman, SMBC Finance Service Co., Ltd.

Number ofshares of theCompany held

2,800

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. His advice andsupervision based on the experience and insights developed through this background will lead to sustainable enhancementof the corporate value, and the Company has therefore nominated him again as a candidate for External Director.
Joined The Bank of Japan
April 1980
May 1999
Manager, Price Statistics Section, Research and Statistics
Department
February 2001
Manager, Economic Statistics Section, Research and Statistics
Department
November 2002 Deputy General Manager, Nagoya Branch
March 2004
General Manager, Matsue Branch
July 2006
Associate Director-General, Financial Markets Department
November 2007 General Manager, Fukuoka Branch
May 2009
Director-General, Information System Services Department
April 2010Retired from The Bank of Japan
Keiji Kono
May 2010
Full-time Advisor, Chugai Pharmaceutical Co., Ltd.
(September 18, 1957) October 2010
Executive Officer; Deputy Head, Lifecycle Management
Marketing Unit
None
External
November 2010 Executive Officer; Head, Lifecycle Management Unit 2,
Independent Officer
Lifecycle Management Marketing Unit
Newly appointed
April 2012
Executive Officer; Deputy Head, Marketing & Sales Division
January 2013
Executive Officer; Head, IT Supervisory Division
October 2015
Executive Officer in charge of Global Health Policy; Head, IT
Supervisory Division
January 2017
Executive Officer in charge of External Affairs Department andGlobal Health Policy
April 2017
Senior Vice President in charge of External Affairs Department
and Global Health Policy
April 2021
Part-time Advisor
To present<Significant concurrent position>
Part-time Advisor, Chugai Pharmaceutical Co., Ltd.
Reason for nomination
Mr. Keiji Kono has served in managerial positions in key departments of The Bank of Japan as a financial specialist. In
Chugai Pharmaceutical Co., Ltd., he has held the office of Executive Officer serving as Head of the IT Supervisory
Division and fulfilled roles including promoting overseas activities that contribute to society, and he thus has abundant
experience and broad insight in corporate management. His advice and supervision based on the experience and insights
developed through this background will lead to sustainable enhancement of the corporate value, and the Company has
therefore nominated him as a candidate for External Director.

- 10 -

No.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1985
April 2013

Akihiko Matsuda(January 7, 1960)

11

External
Independent Officer
Newly appointed

Joined Tokyo Gas Co., Ltd.
Technical Solution Department
Managing Director, Energy Advance Co., Ltd.
March 2015
Retired from Energy Advance Co., Ltd.
April 2015
General Manager, Energy Proposal Promotion Department,
Tokyo Gas Co., Ltd.
April 2017
Executive Officer
President and Representative Director, Tokyo Gas Living
Engineering Co., Ltd.
March 2020
Retired from Tokyo Gas Living Engineering Co., Ltd.
April 2020
Advisor, Tokyo Gas Co., Ltd.
To present<Significant concurrent position>
Advisor, Tokyo Gas Co., Ltd.

Number ofshares of theCompany held

None

Reason for nomination
Mr. Akihiko Matsuda has served as Executive Officer in Tokyo Gas Co., Ltd. and a top executive at the same groupcompanies and he thus has abundant experience and broad insight in the overall energy business. His advice andsupervision based on the experience and insights developed through this background will lead to sustainable enhancementof the corporate value, and the Company has therefore nominated him as a candidate for External Director.

(Notes) 1. There are no special interests between the candidates and the Company.
2. (1) Mr. Yukiteru Yamamoto, Mr. Kazuhiko Kashikura, Mr. Keiji Kono, and Mr. Akihiko Matsuda are candidates forExternal Director.
(2) The Company has registered Mr. Yukiteru Yamamoto and Mr. Kazuhiko Kashikura 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 assume office as Directors, they will continue tobe Independent Officers.
(3) If Mr. Keiji Kono and Mr. Akihiko Matsuda are appointed and assume office as Directors, the Company intends toregister them 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.
3. 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 seven years at the conclusion of this General
Meeting of Shareholders.
(2) Mr. Kazuhiko Kashikura’s term in office as External Director will be three years at the conclusion of this General
Meeting of Shareholders.
4. Liability limitation agreements with candidates for Director
The Company has entered into agreements with Mr. Yukiteru Yamamoto and Mr. Kazuhiko Kashikura 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 in laws and regulations. If Mr.
Keiji Kono and Mr. Akihiko Matsuda are appointed and assume office as Directors, the Company intends to enter into
the same agreements with them.
5. Outline of the directors’ and officers’ liability insurance insuring candidates for Director
The Company has entered into a directors’ and officers’ liability insurance agreement with an insurance company. The
policy covers damages, which are to be borne by the insured, that may arise from those insured persons assuming
liability in connection with the execution of their duties or through receiving claims pertaining to the pursuit of suchliability. All candidates for Director will be insured under said agreement. The Company will renew said agreement
under the same terms and conditions at the time of the next renewal.

- 11 -

Proposal 3:

Election of 1 Substitute Audit & Supervisory Board Member

Substitute Audit & Supervisory Board Member Takaya Abe was elected at the 96th Annual General
Meeting of Shareholders held on June 25, 2020, 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)
External
Independent Officer
Reappointed

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. Although he does not have experience of being directly involved in corporate management, for the reasons stated above,
the Company believes that he will be able to execute the duties as an External Audit & Supervisory Board Member of theCompany properly.

(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 agreement 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.
4. Outline of the directors’ and officers’ liability insurance insuring the candidate for substitute Audit & Supervisory Board
Member
The Company has entered into a directors’ and officers’ liability insurance agreement with an insurance company. The
policy covers damages, which are to be borne by the insured, that may arise from those insured persons assuming
liability in connection with the execution of their duties or through receiving claims pertaining to the pursuit of suchliability. The candidate for substitute Audit & Supervisory Board Member will be insured under said agreement. The
Company will renew said agreement under the same terms and conditions at the time of the next renewal.

- 12 -

Proposal 4: Determinations of Details of Stock Acquisition Rights to Directors as Stock-based
Compensation Stock Options
Since the shareholders’ approval at the 89th Annual General Meeting of Shareholders held on June 26,
2013, stock acquisition rights have been granted to Directors (excluding External Directors) as stock-based
compensation stock options.
In line with recent amendments to the Companies Act, approval from a General Meeting of Shareholders
is required for specific matters to grant stock acquisition rights to Directors. Accordingly, to maintain thestock option plan in its original form, the Company requests approval for the content of stock acquisitionrights below. Matters to be newly approved at this time are solely the underlined portions (Conditions forpurchase of stock acquisition rights).
With regard to the amount of compensation to Directors, the resolution adopted at the 94th Annual
General Meeting of Shareholders held on June 27, 2018 instituted an amount to be paid of up to a maximumof 650 million yen annually. However, the Company seeks approval to grant stock acquisition rights as
stock-based compensation stock options within the overall limit of compensation.
There are currently 10 Directors (including 3 External Directors). If Proposal 2 is approved as originallyproposed, there will be 11 Directors (including 4 External Directors).
1. Reason for introducing stock-based compensation stock options (stock acquisition rights)
Directors can not only benefit from a rise in stock prices but also share the risk associated with adecline in stock prices with shareholders, by which the Company aims to issue stock-based compensation
stock options (stock acquisition rights) in order to improve the morale and motivation of Directors(excluding External Directors) to contribute to the Company’s medium to long-term performance growth
and to maximize its corporate value.
2. Terms of stock acquisition rights as stock-based compensation stock options(1) Total number of stock acquisition rights
The maximum number of stock acquisition rights to be granted within one (1) year of the date of
the Annual General Meeting of Shareholders for each fiscal term shall be 500.
(2) Class and number of shares to be granted upon exercise of the stock acquisition rights
The class of shares to be granted upon exercise of the stock acquisition rights shall be Ordinary
shares in the Company, and the number of shares to be granted upon exercise of each stockacquisition right (the “Number of Shares to be Granted”) shall be 100.
Provided, however, that in the event that the Company conducts a stock split (including a gratis
allotment of ordinary shares; the same applies in descriptions of company splits hereinafter) or reverse
stock split on or after the date of the allocation of stock acquisition rights (the “Allocation Date”), thenumber of stock acquisition rights that have not yet been exercised at the time of the stock split orreverse stock split shall be adjusted based on the following formula.
Post-adjustment Number of Shares to be Granted = pre-adjustment Number of Shares to be Granted
x split or reverse split ratio
In addition to the above, if unavoidable circumstances necessitate an adjustment to the Number of
Shares to be Granted, the Company may adjust the Number of Shares to be Granted as deemednecessary by the Board of Directors of the Company.
Fractions less than one share generated as a result of the adjustment shall be rounded down.
(3) Amount of payment for stock acquisition rights
The amount to be paid in for the stock acquisition rights will be the product of the fair value unit
price per share calculated by a third party assessment organization in accordance with theBlack-Scholes Model on the Allocation Date of the stock acquisition rights multiplied by the Numberof Shares to be Granted.
Holders of share acquisition rights (the “Right Holders”) shall set off the obligation to be paid in forthe stock acquisition rights against the compensation claim he/she holds against the Company, insteadof paying the amount to be paid in.
(4) Value of assets to be contributed upon the exercise of stock acquisition rights
The value of assets to be contributed upon the exercise of each stock acquisition right shall be 1 yenfor each share that may be issued upon the exercise of the stock acquisition rights, multiplied by the
Number of Shares to be Granted.
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(5) Period when stock acquisition rights are exercisable
The period shall be within 30 years from the day following the Allocation Date.
(6) Conditions for the exercise of stock acquisition rights
1) The Right Holder may only exercise his or her stock acquisition rights in the period stipulated in(5) above within ten days (or the next business day of the 10th day if the 10th day is a holiday) of
the day following the Holder loss of their position as Director and Executive Officer. Said stockacquisition rights may only be exercised on a lump-sum basis.
2) In case the Right Holder dies, only an heir of the Right Holder, his/her spouse or his/her relation in
the first degree may exercise his/her stock acquisition rights. Said stock acquisition rights may only
be exercised on a lump-sum basis.
(7) Restriction on acquisition of stock acquisition rights through transfer
Acquisition of stock acquisition rights through transfer shall require the approval by the Board of
Directors.
(8) Conditions for purchase of stock acquisition rights
1) In case the Right Holder comes to be unable to exercise the stock acquisition rights prior to theexercise of his/her rights pursuant to the provisions of (6) above or under the Stock Acquisition
Rights Allocation Agreement, the Company may acquire the stock acquisition rights withoutcompensation on the day prescribed by the Board of Directors.
2) In case a proposal for approval of any of the matters in a. to e. below is approved (or, if approvalof the General Meeting of Shareholders is not required, is resolved at the Board of Directors), theCompany may acquire the stock acquisition rights without compensation on the day prescribed by
the Board of Directors.
a. Merger agreement, under which the Company shall be the dissolved company;b. Split agreement or split plan, under which the Company shall be the split company;c. A share exchange agreement or a share transfer plan, under which the Company shall be awholly-owned subsidiary;d. Amendments to the Articles of Incorporation in which a provision requires approval from theCompany to acquire said acquisition rights of all the stock issued by the Company throughtransfer; ore. Amendments to the Articles of Incorporation in which a provision requires approval from theCompany to acquire the class shares to be granted upon exercise of the stock acquisition rights
through transfer or the acquisition of all of said class shares by resolution of a General Meetingof Shareholders.
(9) Other details of stock acquisition rights
Other details of stock acquisition rights shall be determined by the Board of Directors when theterms of the subscription for the stock acquisition rights are determined.

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<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.
(3) If any Director becomes unable to fulfill his/her duties as the Director of the Company for health or medical
reasons or causes any damage to the corporate value of the Company due to nonfulfillment of his/her duties, anagenda regarding the dismissal of the Director shall be deliberated by the Board of Directors through examinationby the Advisory Committee on Nomination and Remuneration.
(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 nominate as a candidate for Audit & Supervisory Board Member at
least one person who has appropriate 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 5,702 million yen in fiscal 2020)(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 3,426 million yen in fiscal 2020)(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 -