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 shall prevail.

[Securities Code: 7102]
June 6, 2024
To our shareholders:Mamoru Tanaka, President and CEO
NIPPON SHARYO, LTD.
1-1, Sanbonmatsu-cho, Atsuta-ku, Nagoya, Aichi, Japan

Notice of the 195th Annual General Meeting of Shareholders
The 195th Annual General Meeting of Shareholders of NIPPON SHARYO, LTD. (the “Company”) will be convened
as described below.
In convening this Annual General Meeting of Shareholders, the Company has taken measures for providing
information that constitutes the content of reference documents, etc. for the general meeting of shareholders (matterssubject to electronic provision measures) in electronic format, and has posted the information on each of thefollowing websites. Please access either of the websites to view the information.
The Company’s website:
https://www.n-sharyo.co.jp/finance/meeting.html (in Japanese)
In addition to the Company’s website, the matters subject to electronic provision measures are also posted on thefollowing Tokyo Stock Exchange (TSE) website and the Website for posted informational materials for the General
Meeting of Shareholders.
TSE website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)(Access the TSE website by using the URL shown above, enter “NIPPON SHARYO” in “Issue name (company
name)” or the Company’s securities code “7102” in “Code,” and click “Search.” Then, click “Basic information”
and select “Documents for public inspection/PR information.” Under “Filed information available for public
inspection,” click “Click here for access” under “[Notice of General Shareholders Meeting /Informational Materials
for a General Shareholders Meeting].”)Website for posted informational materials for the General Meeting of Shareholders:
https://d.sokai.jp/7102/teiji/ (in Japanese)
Other than attending the meeting, you may also exercise your voting rights in writing or by electromagnetic method(via the internet, etc.), so please review the Reference Documents for the General Meeting of Shareholders below
and exercise your voting rights no later than 5:10 p.m., Wednesday, June 26, 2024 (JST).
1. Date and Time: Thursday, June 27, 2024 at 10:00 a.m. (JST)
2. Venue:
NIPPON SHARYO Head Office
1-1, Sanbonmatsu-cho, Atsuta-ku, Nagoya, Aichi, Japan
3. Agenda of the Meeting
Matters to be reported:
1. The content of the business report and consolidated financial statements, and the audit reports of the
Financial Auditor and the Audit & Supervisory Board regarding the consolidated financial statements forthe 195th fiscal year (April 1, 2023–March 31, 2024)
2. The content of non-consolidated financial statements for the 195th fiscal year (April 1, 2023–March 31,
2024)

-1-

Matters to be resolved:<Company proposals>
Proposal No. 1
Appropriation of Retained Earnings
Proposal No. 2
Election of Seven Directors
Proposal No. 3
Election of One Audit & Supervisory Board Member<Shareholder proposal>
Proposal No. 4
Appropriation of Retained Earnings
The summary of the proposal related to the shareholder proposal (Proposal No. 4) is as described in the“Reference Documents for the General Meeting of Shareholders” (pages 14 to 16) below.
4. Other Matters Concerning Voting Rights(1) If you exercise your voting rights in writing (by postal mail) and do not indicate approval or disapproval fora proposal on the voting form, it will be considered an indication of approval for the Company’s proposal
and disapproval for the shareholder’s proposal.
(2) Because Proposals No. 1 and No. 4 have a conflicting relationship, if you exercise your voting rights inwriting or via the Internet and indicate approval of both Proposals No. 1 and No. 4, your exercise of voting
rights for Proposals No. 1 and No. 4 will be treated as invalid.
(3) When voting rights are exercised multiple times via the internet etc., the latest vote received shall be deemed
effective.
(4) When voting rights are exercised both in writing and via the internet etc., the vote received via the internet
shall be deemed effective.
- If attending the meeting in person, please present the enclosed voting form at the reception desk.
- If revisions to the matters subject to electronic provision measures arise, a notice of the revisions and the detailsof the matters before and after the revisions will be posted on each of the aforementioned websites.
- Regarding this Annual General Meeting of Shareholders, the documents containing the matters subject toelectronic provision measures will be sent to all shareholders in writing, regardless of whether or not a request fordelivery of paper-based documents has been made. In accordance with the provisions of laws and regulations andArticle 20 of the Articles of Incorporation of the Company, among the matters subject to electronic provision
measures, the following matters are not provided in the paper-based documents.
(i) Business Report: “System to Ensure Appropriateness of Operations and Overview of Operation of the
System”(ii) Consolidated Financial Statements: “Consolidated Statements of Changes in Net Assets,” “Notes to theConsolidated Financial Statements”(iii) Non-Consolidated Financial Statements: “Statements of Changes in Net Assets,” “Notes to the NonConsolidated Financial Statements”
Accordingly, the Business Report, Consolidated Financial Statement and the Non-Consolidated Financial
Statement which are on the paper-based documents are part of the documents included in the scope of audits by
the Financial Auditor to prepare Audit Report and Audit & Supervisory Board Members to prepare Auditing
Report.

-2-

Reference Documents for the General Meeting of Shareholders
Proposals and Reference Information<Company Proposals (Proposal No. 1 to Proposal No. 3)>
Proposal No. 1
Appropriation of Retained Earnings
It is the basic policy of the Company to proactively promote business development and maintain long-term stability
in its dividends in order to secure stable shareholder benefit into the future.
In accordance with this policy, the Company has given consideration to matters including the business performanceof the fiscal year and internal reserves, and it proposes to pay year-end dividends for the fiscal year as follows:
Year-end dividends(1) Type of dividend property
Cash(2) Allotment of dividend property to shareholders and their aggregate amount¥15 per common share of the Company Aggregate amount: ¥216,476,940(The annual dividend, including the interim dividend of ¥10 per share, will total ¥25 per share.)(3) Effective date of the dividends of Retained Earnings
June 28, 2024

-3-

Proposal No. 2

Election of Seven Directors

At the conclusion of this meeting, the terms of office of all seven Directors will expire. Therefore, the Company
proposes the election of seven Directors.
The candidates for Director are as follows:
Candidate
No.

Name

Positions in the Company
Representative Director
Director, President and CEO
Representative Director
Director and Executive Vice PresidentManaging Director
Division Chief & General Manager of Corporate Planning andStrategy Division
Director
Division Chief & General Manager of Construction Equipment
Division

1

Mamoru Tanaka

2

Akira Koyasu

3

Minoru Tayama

4Michikazu Fukaya

5Atsushi Niimi

Outside Director

6

Akira Nishihata

Outside Director

7

Michiko Kato

Outside Audit & Supervisory Board Member

Reelection
New election
OutsideIndependent

Reelection candidate for Director
New candidate for Director
Outside Director candidate
Independent officer as stipulated in stock exchange regulations-4-

Reelection
Reelection
Reelection

Reelection
Reelection
OutsideIndependent
Reelection
OutsideIndependent
New election
OutsideIndependent

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1982
June 2010

June 2014

June 2016
Mamoru Tanaka(August 5, 1958)
Male
Reelection

June 2016
June 2018

1
June 2020

June 2023

Joined Japanese National Railways
General Manager of Rolling Stock Department,
Shinkansen Operations Division of Central
Japan Railway Company
Corporate Officer and Director General of
Kansai Branch Office of Central Japan Railway
Company
Corporate Officer, Deputy Director General of
General Technology Division and General
Manager of Technology Planning Department,
General Technology Division of Central Japan
Railway Company
Audit & Supervisory Board Member of theCompany
Director, Corporate Executive Officer andDirector General of Shinkansen Operations
Division of Central Japan Railway Company
Executive Vice President and Representative
Director, in charge of Shinkansen andConventional Lines Operations Division and in
charge of Transportation Safety Section ofCentral Japan Railway Company
President and CEO of the Company (current
position)

Number of theCompany’s shares
owned

100

[Reasons for nomination as a Director candidate]
Mamoru Tanaka has worked at Central Japan Railway Company, primarily in operations related to technology anddevelopment of rolling stock, and after serving as Director and Corporate Executive Officer and Executive Vice
President and Representative Director, he has been serving as President and CEO of the Company from 2023. He hasabundant experience and broad insight concerning all aspects of technology and all aspects of business management,
and the Company believes that his abilities, insights, and career are suitable for maintaining the sound management andfurther development of the Group, making him an appropriate candidate for the Company’s Director.

-5-Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1980
June 2006
Feb. 2009

June 2010

2

Akira Koyasu(January 27, 1958)

Oct. 2010

Male
Reelection

June 2016

June 2018

June 2023

Joined the Company
General Manager of Material Department,
Rolling Stock Division of the Company
General Manager of Business Planning
Department, Rolling Stock Division of theCompany
Executive Officer and General Manager ofBusiness Planning Department, Rolling Stock
Division of the Company
Executive Officer of the Company
President and CEO of NIPPON SHARYO
U.S.A., INC.
Managing Executive Officer of the Company
President and CEO of NIPPON SHARYO
U.S.A., INC.
Representative Director and Senior Managing
Director, Division Chief & General Manager of
the Corporate Planning and Strategy Division,and in charge of administration and complianceof the Company
Representative Director and Executive Vice
President, and in charge of administration andcompliance of the Company (current position)

Number of theCompany’s shares
owned

3,300

[Reasons for nomination as a Director candidate]
Akira Koyasu has primarily worked in the Company’s operations related to materials and business planning in therolling stock business and he has served as a Representative Director and Senior Managing Director of the Company
from 2018, and Representative Director and Executive Vice President and Representative Director from 2023. He hasabundant experience and broad insight concerning the rolling stock business and all aspects of business management,
and the Company believes that his abilities, insights, and career are suitable for maintaining the sound management andfurther development of the Group, making him an appropriate candidate for the Company’s Director.

-6-

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1985
Oct. 2010
Apr. 2015

June 2016
June 2017
Minoru Tayama(July 22, 1962)
Male
Reelection

June 2019
June 20193

June 2020

June 2023

Joined the Company
General Manager of Production Department,
Rolling Stock Division of the Company
General Manager of High Speed Train
Production Management Department, Rolling
Stock Division of the Company
General Manager of Toyokawa Plant, Rolling
Stock Division of the Company
Executive Officer, Deputy Chief & General
Manager of Rolling Stock Division, andGeneral Manager of Business Planning
Department, Rolling Stock Division of theCompany
Director (part time) of Nagoya Rinkai Rapid
Transit Co., Ltd. (current position)
Executive Officer, Deputy Chief & General
Manager of Rolling Stock Division, and Chief
Engineer of Rolling Stock Division of theCompany
Director and Division Chief & General
Manager of Corporate Planning and Strategy
Division of the Company
Managing Director and Division Chief &General Manager of Corporate Planning andStrategy Division of the Company (current
position)

Number of theCompany’s shares
owned

1,000

[Reasons for nomination as a Director candidate]
Minoru Tayama has primarily worked in the Company’s operations related to manufacturing and planning in the rollingstock business and he has served as Managing Director and Division Chief & General Manager of Corporate Planningand Strategy Division since 2023. He has abundant experience and broad insight concerning the rolling stock businessand all aspects of business management, and the Company believes that his abilities, insights, and career are suitable formaintaining the sound management and further development of the Group, making him an appropriate candidate for theCompany’s Director.

-7-

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1982
Jan. 1999
June 2010

Dec. 2012
Michikazu Fukaya(December 22, 1959)
Male
Reelection
4

July 2017
June 2018
June 2020

June 2022

Apr. 2024

Joined Nichiyu Koki,Ltd.
Joined the Company
General Manager of Administrative
Department, Industrial & Electrical Equipment
Division of the Company
General Manager of Narumi Plant, Industrial &Electrical Equipment Division of the Company
Deputy General Manager of Human Resources
Department of the Company
Executive Officer and General Manager ofGeneral Affairs Department of the Company
Executive Officer and Division Chief &General Manager of Industrial & Electrical
Equipment Division of the Company
Director and Division Chief & General
Manager of Industrial & Electrical Equipment
Division of the Company
Director and Division Chief & General
Manager of Construction Equipment Division(current position)

Number of theCompany’s shares
owned

800

[Reasons for nomination as a Director candidate]Michikazu Fukaya has primarily worked in the Company’s operations related to planning in the construction equipment
business and he served as Director and Division Chief & General Manager of Industrial & Electrical Equipment
Division from 2022 (and as Director and Division Chief & General Manager of Construction Equipment Division since
the organizational reform in April 2024). He has abundant experience and broad insight concerning the construction
equipment business, and the Company believes that his abilities, insights, and career are suitable for maintaining thesound management and further development of the Group, making him an appropriate candidate for the Company’s
Director.

-8-

Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1971

5

Number of theCompany’s shares
ownedJoined Toyota Motor Co., Ltd. (currently
Toyota Motor Corporation)
June 2000
Director and Manager of Motomachi Plant andTsutsumi Plant of Toyota Motor Corporation
June 2004
Director of Toyota Motor Corporation
June 2005
Senior Managing Director and Chief Officer of
Production Control & Logistics Group andManufacturing Group of Toyota Motor
Corporation
June 2006
Senior Managing Director and Chief Officer ofAtsushi Niimi
Production Planning Group of Toyota Motor(July 30, 1947)
Corporation
June 2007
Senior Managing Director and Chief Officer of
1,000
Male
Purchasing Group of Toyota Motor Corporation
Reelection
OutsideJune 2009
Representative Director and Executive Vice
Independent
President of Toyota Motor Corporation
June 2009
Audit & Supervisory Board Member of JTEKTCORPORATION
June 2013
Representative Director and Chairman of
JTEKT CORPORATION
June 2014
Director (part time) of Nagoya Stock Exchange,
Inc. (current position)
Mar. 2015
Director of Yamaha Motor Co., Ltd.
June 2016
Outside Director of the Company (current
position)[Reason for nomination as a candidate for Outside Director and expected role]
Atsushi Niimi has abundant experience and broad insight relating to production management and corporate
management as he has served in positions including Representative Director and Executive Vice President of Toyota
Motor Corporation and Representative Director and Chairman of JTEKT CORPORATION. Based on his abilities,
insights, and career, the Company expects him to provide supervision and valuable advice as an Outside Director tomaintain the sound management and further development of the Group.

-9-Candidate
No.

Name
(Date of birth)

Career summary, positions and responsibilities in the Company,
and significant concurrent positions outside the Company
Apr. 1980

6

7

Notes:

Number of theCompany’s shares
ownedJoined Mitsui Engineering & Shipbuilding Co.,
Ltd. (currently Mitsui E&S Holdings Co., Ltd.)
June 2013
Director, in charge of Corporate Planning Dept.
of Mitsui Engineering & Shipbuilding Co., Ltd.
June 2015
Director, in charge of Corporate Planning Dept.
and Research & Development Hq. of Mitsui
Engineering & Shipbuilding Co., Ltd.
Apr. 2016
Director and Managing Executive Officer, incharge of Corporate Planning Dept., Research& Development Hq., Marketing Promotion
Dept. and environmental & safety control, andGeneral Manager of Ocean Business Promotion
Akira Nishihata
Dept. of Mitsui Engineering & Shipbuilding(May 27, 1955)
Co., Ltd.
400
MaleOct. 2016
Director and Managing Executive Officer,
Reelection
General Manager of Corporate Planning Hq., in
Outsidecharge of Research & Development Hq. andIndependent
environmental & safety control of Mitsui
Engineering & Shipbuilding Co., Ltd.
Apr. 2017
Director and Managing Executive Officer, incharge of procurement and environmental &safety control, and General Manager ofResearch & Development Hq. of Mitsui
Engineering & Shipbuilding Co., Ltd.
Apr. 2018
Director, in charge of Technical Co-ordination
Dept. and Auditing Dept. of Mitsui E&S
Holdings Co., Ltd.
June 2021
Outside Director of the Company (current
position)[Reason for nomination as a candidate for Outside Director and expected role]
Akira Nishihata has abundant experience and broad insight relating to all aspects of technology and corporate
management as he has served in positions including Director and Director and Managing Executive Officer of Mitsui
E&S Holdings Co., Ltd. Based on his abilities, insights, and career, the Company expects him to provide supervisionand valuable advice as an Outside Director to maintain the sound management and further development of the Group.
Apr. 1980
Registered as an attorney at law and joined the
Nagoya Bar Association (currently the Aichi
Bar Association)
Joined Hata Law OfficeMichiko Kato
Apr. 1998
Vice-President of Nagoya Bar Association(August 20, 1953)
Apr. 2001
Opened Kato Sogo Law Office (currently Kato
Ueda Sogo Law Office)
1,200
FemaleNew election
Apr. 2005
Chair of Training Committee of Aichi Bar
OutsideAssociation
Independent
Apr. 2007
Professor of Nagoya University Graduate
School of Law
June 2015
Outside Audit & Supervisory Board Member of
the Company (current position)[Reason for nomination as a candidate for Outside Director and expected role]
Michiko Kato is qualified as an attorney at law, and has abundant experience and broad insight, including having served
as a Professor of Nagoya University Graduate School of Law. She has served as Outside Audit & Supervisory Board
Member of the Company by leveraging this experience and insight. Based on her abilities, insights, and career, theCompany expects her to provide supervision and valuable advice as an Outside Director to maintain the soundmanagement and further development of the Group.
Though she has never been involved in corporate management in the past other than as an outside officer, for the abovementioned reasons, the Company has determined that she will appropriately perform her duties as an Outside Director.
1. There is no special interest between any of the candidates and the Company.

- 10 -

2. Mamoru Tanaka has been serving as a person executing business at the Company’s parent company Central Japan Railway
Company for 10 years, and his position and responsibility are provided in “Career summary, positions and responsibilities
in the Company and significant concurrent positions outside the Company” above.
3. Atsushi Niimi, Akira Nishihata and Michiko Kato are Outside Director candidates.
4. Atsushi Niimi and Akira Nishihata are currently serving as Outside Directors and their terms of office as of the conclusionof this meeting will reach eight years and three years, respectively.
5. Atsushi Niimi and Akira Nishihata are currently serving as members of the Nomination and Compensation Committee
and the special committee for important transactions, etc. with the parent company, etc., respectively. If Mr. Niimi and Mr.
Nishihata are elected, the Company plans for them to continue to be involved as members of the Nomination andCompensation Committee in the selection of candidates for the Company’s officers and determination for compensationof Directors, as well as to be involved as members of the special committee for important transactions, etc. with the parent
company, etc. to discuss matters on important transactions with the parent company, etc., taking an objective and neutral
standpoint from both roles. If the election of Michiko Kato is approved, the Company plans for her to be involved as amember of the Nomination and Remuneration Committee, as well as to be involved as a member of the special committee
for important transactions, etc. with the parent company, etc., taking an objective and neutral standpoint from both roles.
6. In accordance with the provisions of Article 427, paragraph (1) of the Companies Act, the Company has concluded
agreements with Atsushi Niimi and Akira Nishihata to limit their liability to the amount specified in Article 425, paragraph(1) of the Companies Act. If the reelection of Mr. Niimi and Mr. Nishihata is approved, the Company plans to continue
these agreements. The Company has concluded an agreement with Michiko Kato to limit her liability as an Outside Audit& Supervisory Board Member, and if her election as an Outside Director is approved, the Company plans to conclude asimilar agreement with her to limit her liability.
7. The Company has entered into a directors and officers liability insurance policy as provided for in Article 430-3, paragraph(1) of the Companies Act with an insurance company. A summary of the details of the policy is presented in the Business
Report (in Japanese only). If the election of the candidates is approved, each of them will be included as an insured in thepolicy. In addition, the Company plans to renew the policy with the same terms upon the next renewal.
8. Per the stipulations of the Tokyo Stock Exchange and Nagoya Stock Exchange, the Company has filed the relevant
notifications designating Atsushi Niimi and Akira Nishihata as independent officers. If the reelection of Atsushi Niimi andAkira Nishihata is approved, the Company plans to maintain their positions as independent officer. Michiko Kato satisfies
the requirements of an independent officer stipulated by the Tokyo Stock Exchange. If her election is approved, theCompany plans to designate her as an independent officer.

- 11 -

[Skills Matrix]
Circle marks (●) have been placed in categories for which the Company has particularly high expectations inaccordance with the knowledge, experience, and abilities of each Director candidate.
Director candidate

Corporate Finance and Sales and International
management accounting marketing
matters

Mamoru Tanaka●

Akira Koyasu●

Minoru Tayama

●

●

●

Legal
Manufacturing
affairs andand quality
compliance
control
●
●

●
●

●

●

●

OutsideMichiko Kato
Note: The matrix above does not represent the entirety of the knowledge possessed by each Director candidate.

●

Atsushi Niimi

Outside●Akira Nishihata

Outside●●●●Michikazu Fukaya●

Technology
anddevelopment
●

●

●

●

●

●
●

- 12 -●

Proposal No. 3

Election of One Audit & Supervisory Board Member

The term of office of current Audit & Supervisory Board Member Michiko Kato will be expired at the conclusion ofthis meeting. Therefore, the Company proposes the election of one Audit & Supervisory Board Member.
The agreement of the Audit & Supervisory Board has been received for this proposal.
The candidate for Audit & Supervisory Board Member is as follows:
Name
Yasushi Fukuizumi
Reelection
New election
OutsideIndependent
Name(Date of birth)

Positions in the Company–

Candidate
attributes
New election
OutsideIndependent

Reelection candidate for Audit & Supervisory Board Member
New candidate for Audit & Supervisory Board Member
Outside Audit & Supervisory Board Member candidate
Independent officer as stipulated in stock exchange regulations
Career summary, position in the Company, and significant concurrent
positions outside the Company
Apr. 1982
Apr. 2011

Number of theCompany’s shares
ownedJoined Mitsubishi Heavy Industries, Ltd.
Senior Vice President of Mitsubishi Power Systems
Americas
Yasushi Fukuizumi
Apr. 2015
Associate General Manager of Planning & Administration(July 16, 1958)
Department of Power Systems of Mitsubishi Heavy
Industries, Ltd.
–
Male
Apr. 2017
Senior Officer and Vice President of Power Systems of
New election
Mitsubishi Heavy Industries, Ltd.
OutsideApr. 2019
Executive Officer and Vice President of Energy Systems of
Independent
Mitsubishi Heavy Industries, Ltd.
Apr. 2023
Executive Adviser of Energy Systems of Mitsubishi Heavy
Industries, Ltd.
[Reasons for nomination as an Outside Audit & Supervisory Board Member candidate]
Yasushi Fukuizumi has abundant experience and broad insight concerning all aspects of technology and corporate management,
having served in positions including Senior Vice President of an overseas subsidiary and as Executive Officer and Vice President ofEnergy Systems at Mitsubishi Heavy Industries, Ltd. The Company believes that his abilities, insights, and career are appropriate forsupervising the execution of duties by Directors, and that he is qualified to serve as an Outside Audit & Supervisory Board Memberof the Company.
Notes: 1. There is no special interest between the candidate and the Company.
2. Yasushi Fukuizumi is an Outside Audit & Supervisory Board Member candidate. If his election is approved, he will
become an independent officer in accordance with the provisions of the Tokyo Stock Exchange and Nagoya Stock
Exchange.
3. If the election of Outside Audit & Supervisory Board Member candidate Yasushi Fukuizumi is approved, the Company
plans, in accordance with the provisions of Article 427, paragraph (1) of the Companies Act, to enter into an agreementwith him to limit his liability to the amount specified in Article 425, paragraph (1) of the Companies Act.
4. The Company has entered into a directors and officers liability insurance policy as provided for in Article 430-3, paragraph(1) of the Companies Act with an insurance company. A summary of the details of the policy is presented in the Business
Report (in Japanese only). If the election of the candidate is approved, he will be included as an insured in the policy. In
addition, the Company plans to renew the policy with the same terms upon the next renewal.

- 13 -

<Shareholder Proposal (Proposal No. 4)>
Proposal No.4 has been proposed by a shareholder.
The content of the shareholder proposal is the English translation of the original text of the relevant parts of the
document concerning the shareholder proposal submitted by the proposing shareholder, except for conventional
modifications (reasons for proposal are as stated in the content submitted).
The Company’s Board of Directors opposes to the shareholder proposal as described below.
Proposal No. 4

Appropriation of Retained Earnings

1. Outline of proposal
The dividend is ¥50 per common share of the Company.
(Including the interim dividend of ¥10, the annual dividend will total ¥60.)
2. Reasons for proposal(1) Net sales of the Company have remained strong for the past few years, and operating profit and ordinary
profit are also recovering and rising. In addition, the Company’s net assets are also increasing (refer to theCompany’s interim report 5 for the fiscal year (the 195th term) and the Summary of Consolidated Financial
Results for the Nine Months Ended December 31, 2023).
(2) On the other hand, when we look at the status of the Company’s dividends (amount of dividends and dividend
payout ratio), dividends have been transitioning as stated in the attached document under the Company’s
basic policy to “maintain long-term stability in its dividends,” and the dividend for the fiscal year is expected
to be ¥20 in total, including the interim dividend of ¥10.
(3) However, as stated in (1) above, in addition to the rising trend of the Company’s business performance, thedividend payout ratio of the Company has remained at a low level, while the corresponding ratio of its
competitors (The Kinki Sharyo Co.,Ltd., Kawasaki Heavy Industries, Ltd.) have all remained at a high levelas stated in the attached document. Furthermore, the Company has not provided clear and specificexplanation to its shareholders as to why the dividend amount has been kept low.
(4) In addition, the Company paid ¥5 per share from 2010 to 2014, and ¥2.5 per share in 2015, then consolidated
10 shares of its common shares to one share on October 1, 2018. From the perspective of appropriately
distributing profit to shareholders, the dividend amount should be increased in proportion to the consolidationof shares to a substantial extent, however, the Company paid no dividends from 2016 to 2020, and ¥10 to¥20 per share after that. It can be hardly said that reasonable dividends aligned with the share value havebeen paid.
(5) By taking into consideration each of the circumstances described above, the Company should return profit
to its shareholders by appropriately paying dividends of Retained Earnings at this point of time, even if ittakes into consideration the need to aim for stable management over a long term and secure a certain levelof internal reserves.
As for the specific amount of dividend, the year-end dividend should be ¥50 per share, in view of reasonsstated above.
(Shareholder Proposal Attached Document)
Transition of dividends
The Company
Fiscal year ended March 31,
2020
Fiscal year ended March 31,
2021
Fiscal year ended March 31,
2022
Fiscal year ended March 31,2023

Unit: Yen
Kawasaki Heavy Industries,Ltd.

The Kinki Sharyo Co.,Ltd.
0

0

35

10

30

0

20

30

40

20

50

90

- 14 -

Transition of dividend payout ratio
The Company
Fiscal year ended March 31,
2020
Fiscal year ended March 31,
2021
Fiscal year ended March 31,
2022
Fiscal year ended March 31,2023

Unit: %
Kawasaki Heavy Industries,Ltd.

The Kinki Sharyo Co.,Ltd.
0

0

31.3

1.8

31.2

0

5.5

7.5

53

9.3

29.1

28.4

3. Opinion of the Board of Directors
Opinion of the Board of Directors on the shareholder proposal
The Company’s Board of Directors opposes to the shareholder proposal for the following reasons.
(Reasons)
The Company’s fundamental philosophy is to contribute broadly to the improvement and development of social
infrastructure by creating things of highest quality as an “infrastructure creation company” under soundmanagement. Under this fundamental philosophy, the Company determines its dividends based on the basic
policy to pay dividends stably and over a long term and by comprehensively considering the trend of businessresults, financial position and the improvement of internal reserves for future business development.
The Company recognizes that improving shareholders return while aiming to align with this basic dividend
policy is one of its important issues. The Company had continued to pay annual dividends of ¥50 per share (*)
in the past, however, in light of the deterioration of its financial results due to losses in its North America business,
the Company had stopped paying dividends from the fiscal year ended March 31, 2016. However, the Company
has resumed dividend payments and paid ¥10 in the fiscal year ended March 31, 2021. Moreover, in Proposal 1of this Annual General Meeting of Shareholders, the Company is proposing to increase its annual dividend from
¥20 to ¥25 (with the year-end dividend to be increased from ¥10 to ¥15) for the fiscal year ended March 31,
2024, and plans to restore the level of the annual dividend for the fiscal year ending March 31, 2025 to ¥30.
Based on the basic policy for dividends, the Company is making efforts to increase its medium- to long-term
corporate value so that it will be able to further improve shareholder returns.
Meanwhile, in terms of the Company’s financial position, the balance of its long-term borrowings was ¥37.6
billion at the end of March 31, 2024. This was a result of transferring assets of three plants of the Company toCentral Japan Railway Co. (hereinafter, the “Parent Company”) in April 2017 to respond to the deterioration offinancial conditions due to a large amount of loss incurred in the North America business in the past, as well as
receiving a long-term loan in the amount of ¥35 billion from the Parent Company in November 2017.
Since the fiscal year ended March 31, 2019, the Company has stabilized its financial base to a certain extent bysteadily producing profit and accumulating cash on hand. Consequently, the Company started repaying the longterm loan mentioned above in the fiscal year ended March 31, 2022, and repurchased Toyokawa Plant in March
2023, which is one of the three plants the Company had transferred to the Parent Company in 2017. Nevertheless,
the Company will continue to pay ¥2.9 billion per year for the long-term loan, and needs to consider securing
funds to repurchase the remaining plants, i.e., Narumi Plant and Kinuura Plant. Moreover, as a manufacturing
company, the Company needs to maintain and update its production equipment in a planned manner. In addition,
as a harsh management environment, such as the decreasing demand of railway operators for updating rollingstock in the post COVID-19 era, is expected to continue, we believe that, in order to increase the Company’s
medium- to long-term corporate value, it is essential for the Company to also proactively conduct research anddevelopment and make capital investments so that it will be able to earn revenue in the future.
As can be seen from the above, the Company has been accumulating cash on hand so that it will be able to utilize
funds needed to continue its business and increase its medium- to long-term corporate value, in addition toproviding shareholder returns, and we believe the Company needs to continue securing a level of cash on handthat enables the Company to achieve those objectives.
Under these circumstances, as described above, Proposal 1 of this Annual General Meeting of Shareholders is
proposing to increase year-end dividends by ¥5 per share and pay ¥15 per share for the year ended March 31,- 15 -

2024, and if Proposal 1 is approved and adopted at this Annual General Meeting of Shareholders, the annual
dividend will be ¥25 per share in total, including the interim dividend of ¥10.
On the other hand, the shareholder proposal proposes “year-end dividends of ¥50 per common share of theCompany for the fiscal year ended March 31, 2024 (annual dividend of ¥60 per share in total, including interim
dividend of ¥10).” This shareholder proposal is not in alignment with policies, etc., for the future utilization offunds over the medium to long term based on the Company’s basic policy for dividends, financial position andmanagement environment as described above. Consequently, we have determined that it will not lead to theimprovement of the Company’s medium- to long-term corporate value.
Therefore, the Company’s Board of Directors opposes to the shareholder proposal.
Note: As the Company consolidated 10 shares of its common shares to one share as of October 1, 2018, the stated amount is theamount after taking into account the share consolidation.

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