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 1898)
June 7, 2022
To Shareholders with Voting Rights:
Yoshikazu Taira
Director, President
SEIKITOKYU KOGYO CO., LTD.
3-13-16 Mita, Minato-ku, Tokyo, Japan

Notice of the 73rd Annual General Meeting of Shareholders
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
Please be notified that SEIKITOKYU KOGYO CO., LTD. (the “Company”) will hold the 73rd Annual General Meetingof Shareholders for the purposes as described below.
If you are not attending the meeting, you can exercise your voting rights in writing or via the Internet etc. Please
review the attached Reference Documents for the General Meeting of Shareholders, and exercise your voting rights
by 6:00 p.m. (JST) on Wednesday, June 22, 2022.
1. Date and Time:Thursday, June 23, 2022 at 10:00 a.m. (JST)

2. Venue:ZUIUN, 5F, HOTEL MIELPARQUE TOKYO
2-5-20, Shibakoen, Minato-ku, Tokyo, Japan

3. Purpose of the Meeting
Matters to be reported: 1. The Business Report, Consolidated Financial Statements, and Audit Reports
for the Consolidated Financial Statements by the Accounting Auditor and the
Audit & Supervisory Board for the 73rd fiscal year (from April 1, 2021 toMarch 31, 2022)
2. Non-consolidated Financial Statements for the 73rd fiscal year (from April 1,
2021 to March 31, 2022)
Proposals to be resolved:
Company Proposals (Proposals 1 to 4)
Appropriation of Surplus
Proposal 1:
Partial Amendments to the Articles of Incorporation
Proposal 2:
Election of Seven (7) Directors
Proposal 3:
Election of Two (2) Audit & Supervisory Board Members
Proposal 4:
Shareholder Proposals (Proposals 5 and 7)
Appropriation of Surplus
Proposal 5:
Amendment to the Articles of Incorporation Pertaining to the Abolition of the
Proposal 6:
Advisor Position
Amendment to the Articles of Incorporation Pertaining to the Disclosure of
Proposal 7:
Individual Remuneration for Advisors
Proposals 5 to No. 7 have been proposed by two shareholders of the Company and the Board of Directors opposes
both of the proposals. The content of each proposal is as shown in the attached Reference Documents for the General
Meeting of Shareholders.

-1-◎ When attending the meeting, please submit the enclosed voting rights exercise form to the reception desk.
◎ Any updates to the Reference Documents for the General Meeting of Shareholders, the Business Report, theConsolidated Financial Statements and Non-consolidated Financial Statements will be posted on the Company’s
website.
◎ The Business Report, which is included in the documents attached to this Notice, is part of the documents audited by
the Audit & Supervisory Board Members, and the Consolidated Financial Statements and Non-consolidated Financial
Statements are part of the documents audited by the Accounting Auditor and the Audit & Supervisory Board Members.
“System to Ensure the Appropriateness of Operations and Overview of the Operational Status” in the Business Report,“Consolidated Statements of Changes in Shareholders’ Equity” and “Notes to the Consolidated Financial Statements,”
which are part of the Consolidated Financial Statements, and “Non-consolidated Statements of Changes in Shareholders’Equity” and “Notes to the Non-consolidated Financial Statements,” which are part of the Non-consolidated Financial
Statements, have been posted on the Company’s website in accordance with laws and regulations and Article 16 of the
Articles of Incorporation of the Company. Please access the website to view these documents.
◎ The novel coronavirus infection has been spreading recently. If there are any significant changes to the holding or
operation of the General Meeting of Shareholders due to future situations, the Company will make an announcementon its website.
The Company’s website: https://www.seikitokyu.co.jp/-2-Reference Documents for the General Meeting of Shareholders
Proposals and references
Company Proposals (Proposals 1 to 4)
Proposal 1:

Appropriation of Surplus

The Company proposes the appropriation of surplus as follows.
Matters concerning year-end dividends
The Company’s basic policy is to provide stable returns to its shareholders continuously, in consideration of the resultsof operations for the current fiscal year, financial condition, future business environment and other factors, while working
to strengthen the business foundation for sustainable growth and maintain and enhance its earning power. In addition, in
the Medium-term Management Plan (FY2021 - FY2023), the Company set out its stance on its shareholder return policy,
stating that it makes stable and continuous shareholder returns with a target payout ratio of approximately 30% and atarget total return ratio of 50% or higher.
As a result of consideration based on the above policies, the year-end dividend for the current fiscal year shall be as
follows.
(1) Type of dividend property
Cash(2) Allotment of dividend property to shareholders and its total amount
30 yen per share of common stock of the Company
Total amount of dividends:

1,122,524,940 yen(3) Effective date of dividend from surplus
June 24, 2022

-3-

Proposal 2:
1.

Partial Amendments to the Articles of Incorporation

Reasons for amendments(1) In order to respond to the diversification of the Company’s business activities and prepare for its future businessdevelopment, Article 2 of the current Articles of Incorporation on the purpose of business shall be amended for
addition.
(2) The amended provisions stipulated in the proviso of Article 1 of the supplementary provisions of the “Act Partially
Amending the Companies Act” (Act No. 70 of 2019) will be enforced on September 1, 2022. Accordingly, in orderto prepare for the introduction of the system for electronic provision of materials for general meetings of shareholders,the Articles of Incorporation of the Company shall be amended as follows.
1)
2)
3)
4)

The proposed Article 16, Paragraph 1 provides that information contained in the reference documents for thegeneral meeting of shareholders, etc. shall be provided electronically.
The purpose of the proposed Article 16, Paragraph 2 is to establish a provision to limit the scope of matters to
be included in the paper copy to be sent to shareholders who have requested it.
The provisions of Article 16 of the current Articles of Incorporation will become unnecessary and will therefore
be deleted.
In line with the above establishment and deletion of the provisions, supplementary provisions related to theeffective date, etc. shall be established.

2.
Details of amendments
The details of the amendments are as follows.
Current Articles of Incorporation
Article 2 The purposes of the Company shall be toengage in the following businesses.
1. to 6. [Omitted]<Newly established>

7. [Omitted](Amended parts are underlined.)
Proposed Amendments
Article 2 The purposes of the Company shall be toengage in the following businesses.
1. to 6. [No change]
7. Generation of electricity from renewableenergy sources and other sources and supply
and sale of electricity
8. [No change]

Article 16 The Company may, when convening ageneral meeting of shareholders, deem that it
has provided information to shareholders
pertaining to matters to be described orindicated in the reference documents for thegeneral meeting of shareholders, business
report, non-consolidated financial statements,
and consolidated financial statements, bydisclosing such information through theinternet in accordance with the provisions
provided in the Ordinance of the Ministry ofJustice.

<Deleted><Newly established>

Article 16 The Company shall, when convening ageneral meeting of shareholders, provide
information contained in the reference
documents for the general meeting ofshareholders, etc. electronically.
2. Among the matters to be provided
electronically, the Company may choose not
to include all or part of the matters stipulated
in the Ordinance of the Ministry of Justice inthe paper copy to be sent to shareholders who-4-Current Articles of Incorporation

Proposed Amendments
have requested it by the record date for voting
rights.

<Newly established>

Supplementary provisions
Article 1. The deletion of Article 16 of the current
Articles of Incorporation and theestablishment of proposed Article 16 shallcome into effect on September 1, 2022, thedate of enforcement of the amended
provisions stipulated in the proviso of Article
1 of the supplementary provisions of the Act
Partially Amending the Companies Act (ActNo. 70 of 2019) (the “Effective Date”).
2. Notwithstanding the provisions of thepreceding paragraph, Article 16 of the current
Articles of Incorporation shall remain in force
with respect to a general meeting ofshareholders to be held on a date within six (6)months from the Effective Date.
3. These supplementary provisions shall bedeleted after the lapse of six (6) months fromthe Effective Date or the lapse of three (6)months from the date of the general meetingof shareholders set forth in the preceding
paragraph, whichever is later.

-5-

Proposal 3:

Election of Seven (7) Directors

The terms of office of all nine (9) of the current Directors will expire at the conclusion of this General Meeting of
Shareholders. Accordingly, the Company proposes the election of seven (7) Directors.
The candidates for Director are as follows.
Attendance at theCurrent
positionsandBoardof Directors
No.
Name
responsibilities at the Company
meetings in thecurrent fiscal year
[Reappointment]
Representative Director, President
14/14
1
Yoshikazu Taira[Male]
President, Executive Officer(100%)
Representative Director
Vice President, Executive Officer;
14/14[Reappointment]
Tsukasa2
General Manager, Business
Furukawa(100%)[Male]
Promotion Division; Work Style
Reform Project Leader
Director
Managing Executive Officer,
General Manager, Business
14/14[Reappointment]
Administration Division; General
3
Kazushi Ishida(100%)
Manager, Corporate Planning[Male]
Department; Sustainable
Management Strategy Project
LeaderDirector
Managing Executive Officer,
11/11[Reappointment]
Deputy General Manager,
4
Yuji Ooteki(100%)
Business Promotion Division;[Male]
General Manager, Engineering
Department[Reappointment]
14/14[Outside]
Director
5
Shinya Fukuda(100%)[Independent][Male][Reappointment]
14/14[Outside]
Director
6
Masato Tamura(100%)[Independent][Male][Reappointment]
14/14[Outside]
Director
7
Rena Shimizu(100%)[Independent][Female]Note: Attendance at the Board of Directors meetings in the current fiscal year indicated for Mr. Yuji Ooteki is for the Boardof Directors meetings held after her assumption of office on June 23, 2021.

-6-

No.

Name
(Date of birth)

Yoshikazu Taira(November 23, 1961)[Reappointment][Male]
1

Term of office (as of the conclusion ofthis General Meeting of Shareholders):
5 years

Career summary, positions, responsibilities
and significant concurrent positions

April 1984
April 2011
April 2011

Joined the Company
Executive Officer, the Company
General Manager, Kanto Branch and Tokyo Branch,Business Promotion Division, the Company
Managing Executive Officer, the Company
Deputy General Manager, Business Promotion Division;
General Manager, Engineering Department, the Company
Director, the Company
Director, President, the Company (current)
President, Executive Officer, the Company (current)

April 2015
April 2017
June 2017
April 2019
April 2019

[Reasons for nomination as a candidate for Director]

Since joining the Company, he had been engaged mainly in the construction
Attendance at the Board of Directors
meetings:
departments, accumulating a wealth of experience in and broad insight into
14/14 (100%) operational management of the construction departments. He then oversaw thebusiness departments as a whole and is currently engaged in the management

Number of shares of the Company held:
47,417 shares of the Company as Director, President. The Company renominates him as

Director as it believes that he can continue to take charge of management of
the Company towards enhancing the corporate value, utilizing the above
experience and knowledge.

-7-

No.

Name
(Date of birth)

Tsukasa Furukawa

Career summary, positions, responsibilities
and significant concurrent positions

April 1980
April 2008
April 2011
April 2012

Joined Tokyu Road KK
General Manager, Finance Department, the Company
Executive Officer, the Company
General Manager, Business Administration Division;
General Manager, Corporate Planning Department, theCompany
Director, the Company (current)Managing Executive Officer, the Company
Senior Managing Executive Officer, the Company
General Manager, Business Promotion Division, theCompany (current)
Vice President, Executive Officer, the Company (current)
Work Style Reform Project Leader (current)(February 7, 1958)[Reappointment][Male]
2

Term of office (as of the conclusion ofthis General Meeting of Shareholders):
10 yearsJune 2012
April 2014
April 2018
April 2019
April 2022

Attendance at the Board of Directors
April 2022
meetings:[Reasons
for nomination as a candidate for Director]
14/14 (100%)

Since joining the Company, he had been engaged mainly in the administrative

Number of shares of the Company held: departments, accumulating a wealth of experience in and broad insight into
42,957 shares operational management of the Company as a whole. He currently oversees3

the business departments as a whole as Vice President, Executive Officer. The
Company renominates him as Director as it believes that he can continue totake charge of management of the Company towards enhancing the corporate
value, utilizing the above experience and knowledge.
April 1985
Joined the Company
April 2013
General Manager, Internal Control Department, theCompany
Kazushi Ishida
April 2018
Executive Officer, the Company(August 10, 1961)
April 2019
Managing Executive Officer, the Company (current)
April 2019
General Manager, Business Administration Division;[Reappointment]
General Manager, Corporate Planning Department[Male](current)
Term of office (as of the conclusion ofJune 2019
Director, the Company (current)
this General Meeting of Shareholders):
April
2022
Sustainable Management Strategy Project Leader, the3 years
Company (current)
Attendance at the Board of Directors[Reasons for nomination as a candidate for Director]
meetings:
Since joining the Company, he had been engaged mainly in the back office,14/14 (100%)

compliance and internal control departments, accumulating a wealth of

Number of shares of the Company held: experience in and broad insight into management and administration of the
21,838 shares Company. He currently oversees the administrative departments as Managing

Yuji Ooteki(May 1, 1964)[Reappointment][Male]
4

Executive Officer. The Company renominates him as Director as it believes
that he can continue to take charge of management of the Company towards
enhancing the corporate value, utilizing the above experience and knowledge.
April 1988
Joined the Company
April 2016
General Manager, Kyushu Branch, the Company
April 2017
Executive Officer, the Company
April 2020
General Manager, Engineering Department, Business
Promotion Division, the Company (current)
April 2021
Managing Executive Officer, the Company (current)
April 2021
Deputy General Manager, Business Promotion Division,
the Company (current)
June 2022
Director, the Company (current)

Term of office (as of the conclusion ofthis General Meeting of Shareholders):
1 year [Reasons for nomination as a candidate for Director]

Since joining the Company, he had been engaged mainly in the construction

Attendance at the Board of Directors
departments, accumulating a wealth of experience in and broad insight into
meetings:
11/11(100%) operational management of the construction departments. He currently

oversees the construction business as Managing Executive Officer. The

Number of shares of the Company held: Company nominates him as Director as it believes that he can take charge of
15,723 shares management of the Company towards enhancing the corporate value, utilizing

the above experience and knowledge.

-8-

September 1966
January 1971

Shinya Fukuda(February 26, 1944)[Reappointment][Outside][Independent][Male]
5

Joined CPA Hiroshi Kawakita Office
Joined Tohmatsu Awoki & Co. (currently Deloitte
Touche Tohmatsu)
March 1971
Registered as Certified Public Accountant
May 1987
Representative Partner, Tohmatsu Awoki & Co.
July 1992
Executive Board Member, The Japanese Institute ofCertified Public Accountants
July 2007
Member, Securities and Exchange SurveillanceCommission, Financial Services Agency
December 2013
Established CPA Shinya Fukuda Office (current)
June 2016
Director, the Company (current)(Significant concurrent positions)Certified Public Accountant

Term of office (as of the conclusion ofthis General Meeting of Shareholders):[Reasons for nomination as a candidate for Outside Director and overview of the
6 years

expected role]

The Company renominates him as Outside Director as it believes that he canAttendance at the Board of Directors
meetings:
provide valuable guidance and advice regarding management as a whole as
14/14 (100%) well as continue to appropriately oversee the execution of duties of theCompany from an independent standpoint based on a technical perspective andNumber of shares of the Company held:
0 shares a high level of insight backed by his deep knowledge and a wealth ofexperience in corporate accounting as a certified public accountant.
He had been involved in the accounting audit of the Company up to the year
ended March 31, 2002 as a Representative Partner of Deloitte Touche
Tohmatsu (currently Deloitte Touche Tohmatsu LLC), which had been theaccounting auditor of the Company until June 2007, and therefore has insight
into the Company’s management.

-9-

July 1971
June 1991

6

Joined Ministry of Construction
Director, Land Division, Kanto Regional Development
Bureau, Ministry of Construction
Masato Tamura
July 1997
Deputy Director General, National Land Agency(August 3, 1946)
July 1998
Executive Board Member, Japan Parking Facilities
Promotion Organization[Reappointment]
June 2002
Managing Director, West Japan Construction Surety Co.,
[Outside]
Ltd.
[Independent][Male]
April 2013
Chief Executive, National Housing Industry Association
June 2016
Director, the Company (current)
Term of office (as of the conclusion of(Significant
concurrent
positions)this General Meeting of Shareholders):
6 years Director (Outside Director), NISSHIN GROUP HOLDINGS Company,
LimitedAttendance at the Board of Directors[Reasons for nomination as a candidate for Outside Director and overview of themeetings:
14/14 (100%) expected role]

The Company renominates him as Outside Director as it believes that he can

Number of shares of the Company held: provide valuable guidance and advice regarding management as a whole as
0 shares well as continue to appropriately oversee the execution of duties of theRena Shimizu(July 3, 1973)[Reappointment][Outside][Independent][Female]7

Company from an independent standpoint based on a wealth of experience andbroad insight backed by his experience engaging in a broad range of
operations including social capital development in the administrative fields.
April 1996
Joined Recruit Cosmos Co., Ltd.
January 2002
Joined Manpower Japan Co., Ltd.
January 2008
Joined COACH A Co., Ltd.
June 2010
Opened Rena Shimizu OfficeFebruary 2012
Established CHANCE for ONE Co., Ltd.
February 2012
Director, President, CHANCE for ONE Co., Ltd. (current)
June 2020
Director, the Company (current)(Significant concurrent positions)Representative Director, President, CHANCE for ONE Co., Ltd.

Term of office (as of the conclusion ofthis General Meeting of Shareholders): [Reasons for nomination as a candidate for Outside Director and overview of the
2 years

expected role]

As an expert on women’s empowerment and a corporate manager, she
Attendance at the Board of Directors
provides consultation to companies and local governments, gives lectures, andmeetings:
14/14 (100%) conducts diverse activities. The Company renominates her as Outside Director
as it believes that she can provide valuable guidance and advice regarding

Number of shares of the Company held:
287 shares management as a whole, including diversity, as well as continue toappropriately oversee the execution of duties of the Company from an
independent standpoint based on a wealth of experience and broad insight.

Notes: 1. The number of shares of the Company held by each of the Director candidates is as of March 31, 2022, and includes each candidate’s
shareholdings in Seikitokyu Officers’ Shareholding Association.
2. There are no special interests between Director candidates and the Company.
3. Shinya Fukuda, Masato Tamura and Rena Shimizu are Outside Director candidates.
4. The Company has entered into a liability limitation contract with Shinya Fukuda, Masato Tamura and Rena Shimizu to limit theliability for damages provided in Article 423, Paragraph 1 of the Companies Act. The limit of liability under the above contract shallbe the amount stipulated in laws and regulations. The Company plans to renew this contract when the reelection of each of thecandidates is approved.
5. The Company has entered into a directors and officers liability insurance contract, as stipulated in Article 430-3, Paragraph 1 of theCompanies Act, with an insurance company. The said insurance contract covers damages that may arise when compensation fordamages and litigation expenses are to be borne by the insured in the event that a claim for damages is filed due to an act committed(including failure to act) by the insured in execution of his/her duties. However, damages caused as a result of any criminal act orwillful misconduct committed by the insured are outside the scope of the insurance coverage so as not to compromise theappropriateness of execution of duties. The insurance premiums are fully borne by the Company. Each Director candidate will be theinsured under the said insurance contract.
6. The Company has designated Shinya Fukuda, Masato Tamura and Rena Shimizu as independent director/auditor based on the rulesof Tokyo Stock Exchange, Inc. and notified the Exchange as such.

- 10 -

Proposal 4:

Election of Two (2) Audit & Supervisory Board Members

The term of office of Yoshihiko Suzuki and Yoichi Saito will expire at the conclusion of this General Meeting of
Shareholders. Accordingly, the Company proposes the election of two (2) Audit & Supervisory Board Members.
The consent of the Audit & Supervisory Board has been obtained in advance for this proposal.
The candidates for Audit & Supervisory Board Members are as follows.
No.

Name
(Date of birth)

Tsunehisa Otsuki

Career summary, positions and significant concurrent positions
April 1979
October 2012
April 2013

Joined MITSUI CONSTRUCTION CO., LTD.
Executive Officer, Sumitomo Mitsui Construction Co., Ltd.
Deputy Division Director, Civil Engineering Division,
Sumitomo Mitsui Construction Co., Ltd.
Managing Executive Officer, Sumitomo Mitsui Construction
Co., Ltd.
Chairman of the Board, SMC Tech Co., Ltd.
President and Director, SMC Tech Co., Ltd.
Director, SMC Tech Co., Ltd.

(April 2, 1956)[New appointment]

1[Outside][Independent][Male]

April 2014
June 2019
June 2020
April 2022

[Reasons for nomination as a candidate for Audit & Supervisory Board Member]

He has engaged in diverse areas of work in the construction business and has awealth of experience and broad insight as a corporate manager. The Company
Number of shares of the Company held:
0 shares nominates him as Outside Audit & Supervisory Board Member as it believes that

Yoichi Saito(December 12, 1973)[Reappointment][Outside][Independent][Male]

2

he can appropriately perform his duties as an Outside Audit & Supervisory Board
Member based on his expertise mentioned above.
September 2007 Registered as Attorney
September 2007 Member of Crime Victim Support Center of Daini

Tokyo Bar Association

September 2008
September 2015
April 2016

Joined Saito SogoLaw Office (current)
Member of Discipline Committee of Daini Tokyo Bar
Association
Member of Legal Apprenticeship Committee of Daini Tokyo
Bar Association (current)

Term of office (as of the conclusion of thisJune 2018
Audit & Supervisory Board Member, the Company (current)
General Meeting of Shareholders):
4 years (Significant concurrent positions)

Attorney

Attendance at the Board of Directors
Audit & Supervisory Board Member of Tokyu Construction Co., Ltd.
meetings:[Reasons
for nomination as a candidate for Outside Audit & Supervisory Board Member]
14/14 (100%)

He has legal expertise and a wealth of experience in legal matters as an attorney. The

Attendance at the Audit & Supervisory
Company nominates him as Outside Audit & Supervisory Board Member as it
Board meetings:
believes that he can appropriately perform his duties as an Outside Audit &9/9 (100%)
Supervisory
Board Member based on a technical perspective and a high level of
Number of shares of the Company held:
0 share insight.

Notes: 1. There is no special interest between the Audit & Supervisory Board Member candidates and the Company.
2. Tsunehisa Otsuki and Yoichi Saito are candidates for Outside Members of the Audit & Supervisory Board.
3. The Company has entered into a liability limitation contract with Yoichi Saito to limit the liability for damages provided in
Article 423, Paragraph 1 of the Companies Act. The limit of liability under the above contract shall be the amount stipulated inlaws and regulations. The Company plans to renew this contract when the reelection of the candidate is approved. The Company
plans to enter into a contract to the same effect also with Tsunehisa Otsuki if his election is approved.
4. The Company has entered into a directors and officers liability insurance contract, as stipulated in Article 430-3, Paragraph 1of the Companies Act, with an insurance company. The said insurance contract covers damages that may arise whencompensation for damages and litigation expenses are to be borne by the insured in the event that a claim for damages is filed
due to an act committed (including failure to act) by the insured in execution of his/her duties. However, damages caused as aresult of any criminal act or willful misconduct committed by the insured are outside the scope of the insurance coverage so as
not to compromise the appropriateness of execution of duties. The insurance premiums are fully borne by the Company. The
Audit & Supervisory Board Member candidate will be the insured under the said insurance contract.
5. The Company has designated Yoichi Saito as independent director/auditor based on the rules of Tokyo Stock Exchange, Inc.
and notified the Exchange as such. The Company plans to designate Tsunehisa Otsuki as independent director/auditor based on
the rules of Tokyo Stock Exchange, Inc. and notify the Exchange as such if his election is approved.

- 11 -

[Reference] Management structure following the approval and resolution of Proposals 3 and 4 as originally proposed(scheduled)
Areas where officers have particular expertise and experience

●

●

●

●

●

●

◎

◎

●

Director◎○●

Director

◎

○

●
●

◎

●
●

●

●

Director

Full-time Audit& Supervisory
Board Member
Full-time Audit& Supervisory
Board Member
Audit &
Supervisory
Board Member
Audit &
Supervisory
Board Member●

Empowerment of women●

Human resources / laboraffairs

Notes:●

Finance / accounting

Yukio
Ono

●

Administrative experience

Yoichi
Saito●

Legal affairs / compliance

Tsunehisa
Otsuki●Management experience

Masayuki
Koide

Products

ShinyaFukudaMasatoTamuraRena
Shimizu●

Construction

Yuji
Ooteki○Business administration

Kazushi
Ishida○Engineering field

Tsukasa
Furukawa

Non-engineering fieldYoshikazu
Taira

Representative
Director,
President,
President,
Executive
Officer
Representative
Director
Vice President,
Executive
Officer
Director
Managing
Executive
Officer
Director
Managing
Executive
Officer

Nomination andCompensation Committee

Position

Outside Officer

Name

●
●

◎

●

●
●
●

●

●
●

◎

●

1. ◎ in the “Outside Officer” column indicates that the person is an independent director/auditor.
2. ◎ in the “Nomination and Remuneration Committee” column indicates that the person chairs the committee.

- 12 -●

Shareholder Proposals (Proposals 5 to 7)
Proposals 5 to 7 are based on proposals from two shareholders (hereinafter referred to as “Proposing Shareholders”).
With respect to Proposals 2, 4 and 5 below (“AOI Amendment Proposals”), if approval or rejection of any other proposal(including those proposed by the Company) at this Annual General Meeting of Shareholders necessitates any formal
adjustment (including, but not limited to, the adjustment of subsequent article numbers) to the proposed text of any of thechapters or articles in the AOI Amendment Proposal, then the text proposed in the AOI Amendment Proposal shall be
replaced by duly adjusted text. A press release from Strategic Capital, Inc. should be referenced for detailed explanation
on each of the Shareholder Proposals below. All figures about the Company mentioned in the Shareholder Proposals are
based on the consolidated financial statements unless noted as “(unconsolidated).”Company Note:

Above is the description of the details of the proposal and the reason for the proposal as containedin the original shareholder proposal letter submitted by a Proposing Shareholder. “Proposals 4 and5” in the above text means “Proposals 6 and 7” below.

Proposal 5:
Appropriation of Surplus
1. Details of proposal(1) Type of dividend property
Cash(2) Allotment of dividend property to shareholders and its total amountThe amount of dividend per share of common stock calculated by deducting the amount of dividend pershare of common stock (hereinafter referred to as the “Company-proposed Dividend Amount”) based on the
proposal regarding appropriation of surplus proposed by the Board of Directors of the Company, which wasapproved at the 73rd Annual General Meeting of Shareholders (hereinafter referred to as the “Company
Proposal Regarding Profit Appropriation”), from 86 yen, shall be distributed together with the Companyproposed Dividend Amount.
If the amount of earnings per share of the 73rd term rounded down to the decimal point (hereinafter referred
to as “Actual EPS”) differs from 86 yen, the 86 yen in the preceding paragraph shall be deemed Actual EPS.
The total amount of dividends shall be the above-mentioned dividend per common share multiplied by the
number of shares subject to dividends as of the record date of the voting rights for the 73rd Annual General
Meeting of Shareholders of the Company.
(3) Effective date of dividend from surplus
The day after the 73rd Annual General Meeting of Shareholders of the Company
This proposal is independent of and compatible with the Company Proposal Regarding Profit Appropriation,
if such proposal is proposed at the 73rd Annual General Meeting of Shareholders.
1. Reason for proposal
The Company published its Long-term Vision and Medium-term Management Plan (“MTMP”) in May 2021
which set numerical targets of 50% for equity ratio and 10% for ROE for figures at the end of March 2031.
However, the MTMP at the same time mentions “a total return ratio of 50%.” According to our calculation basedon this shareholder return policy, then equity ratio is estimated to increase to 63.2% and ROE is estimated todecrease to 8.2% by the end of March 2031. Hence, the shareholder return policy indicated by the MTMP will leadto building up the Company’s equity and decreasing ROE, but not to increasing shareholder value. It should be
noted that the Company’s management team including Representative Director, President itself has admitted thatthe equity ratio will exceed the target set in the MTP while the numerical target for ROE will not be attained.
In light of the fact that the Company already has a solid financial base with an equity ratio of 53.7% and equity
capital of 39. 2 billion yen as of the end of December 2021, if the Company increases its equity further, ROE will
only decrease. Returning surplus funds to shareholders will raise shareholder value and, consequently, lead to anincrease in the share price, so dividends from surplus should be greatly increased. And the Company should adopt
a payout ratio of 100% as its capital policy for the medium to long term.
As of December 31, 2021, the Company had cash and deposits of about 14.9 billion yen and interest-bearing
debt of no more than about 5.1 billion yen. The amount obtained by deducting interest-bearing debt from cash anddeposits (hereinafter referred to as “net cash”) was about 9.8 billion yen. Accordingly, even if the proposed
appropriation of surplus is implemented, the total amount of dividends would be within the scope of profit, andtherefore the Company’s levels of net cash and equity would not change significantly, and the Company’s financial
condition would remain healthy.
Company Note:

The above is a description of the details of the proposal and the reason for the proposal in the- 13 -

shareholder proposal submitted by a Proposing Shareholder.

- 14 -

Opinion of the Board of Directors
The Board of Directors of the Company opposes this proposal.
As the Company’s corporate philosophy is “creating infrastructure for living that contributes to the creation of aprosperous community,” the Company is aware that continuous investment and ensuring financial soundness areindispensable for it to secure healthy sustainability and continuous growth and thereby increase corporate value
over the medium to long term. Accordingly, the Company’s basic policy in its capital policy is to strive to maintainnecessary shareholders’ equity while taking into account the balance between capital efficiency and shareholder
returns. In the Long-term Vision established and published in May 2021, “Where We Should Be in 2030,” theCompany has set the targets for fiscal year 2030 in terms of Key Performance Indicators (KPI), which are “equityof 50.0 billion yen,” “equity ratio of 50.0%” and “ROE of 10%”. In terms of cash flow allocations, while
maintaining a total return ratio of 50%, the Company plans to allocate the remaining free cash flow in a best possible
manner by finding out the best balance of measures including additional shareholder return, strengthening its
financial position and additional investment, based on management decisions as occasions arise, with a view toattaining the Long-term Vision.
In addition, with regard to the distribution of profits, the Company has a basic policy of implementing stable andcontinuous shareholder returns while comprehensively taking into account the business results for the current fiscal
year, financial condition, future business environment, etc., while strengthening the management base forsustainable growth and maintaining and improving profitability. Under the “Medium-term Management Plan
(FY2021 - FY2023)” which started from the fiscal year ended March 31, 2022, the Company revised its policy onshareholder returns to “stable and continuous shareholder returns with a target payout ratio of approximately 30%
and a target total return ratio of 50% or higher” in a change from the former target of “stable and continuous
shareholder returns with a target total return ratio of approximately 30%,” and is striving to further enhanceshareholder returns.
Based on these policies, the Company’s proposal “Proposal 1: Appropriation of Surplus” states that the year-end
dividend for the year ended March 31, 2022 shall be 30 yen per share (total return ratio of 35.4%).
Furthermore, in fiscal 2021, the Company purchased its own shares at a total cost of 2.5 billion yen, taking into
account the operating results and the situation regarding improvement of the financial condition during the period
covered by the “Medium-term Management Plan (FY2018 - FY2020).” As a result, the total shareholder return
ratio for the fiscal year ended March 2022 was 109.6%.
As announced on May 11, 2022, based on the above policies, the Company intends to purchase its own shareswithin fiscal 2022 at a maximum total cost of 800 million yen or up to 1.2 million shares for the purpose ofenhancing shareholder returns and improving capital efficiency.
On the other hand, the shareholder proposal proposing change in shareholder return policy to continuously
achieve a payout ratio of 100% and the payment of the full amount of profit as dividends for the year ended March
31, 2022 is based on a short-term perspective that does not take into account future changes in the businessenvironment and the need for continuous business investment. As a result, the Company believes there is a risk ofdamaging shareholder interests.
Therefore, from the viewpoint of realizing healthy sustainability and continuous growth and thereby increase
corporate value over the medium to long term, the Company judges that it is not appropriate to dispose of surplus
as in the shareholder proposal.
[Reference]
As for the Company’s financial position as of March 31, 2022, the balance of cash and deposits was 12.8 billion
yen, the balance of interest-bearing debt was 7.0 billion yen, and the balance of cash and deposits minus the balanceof interest-bearing debt ("net cash") was 5.8 billion yen. The balance of cash and deposits, the balance of interestbearing debt, and net cash have now changed considerably from the figures cited by the Proposing Shareholder inthe reason for the proposal, which were 14.9 billion yen, 5.1 billion yen, and 9.8 billion respectively.

Proposal 6:

Amendment to the Articles of Incorporation Pertaining to the Abolition of the Advisor Position

1. Details of proposal- 15 -

Article 28 of the current Articles of Incorporation shall be deleted and each of the subsequent article numbers
shall be forwarded by one.
2. Reason for proposal
Although the Company currently has no Advisor in office, it has disclosed that Mr. Toshiaki Sato ("Mr. Sato"),who had previously served as President and Chairman and was Director and Chairman as of April 1, 2022, isscheduled to assume the position of Advisor in late June of the same year. Concerning the advisor/counselor system,"Practical Guidelines for Corporate Governance Systems (CGS Guidelines) (Revised on September 28, 2018)" (the"CGS Guidelines") pointed out problems associated with it on page 47 and thereafter, and a number of listedcompanies have since abolished this system.
The Company only abstractly describes the role of an Advisor as "to provide advice at the Company's request
based on experience and knowledge gained through years of engagement in management," and no explanation is
given as to the rationale for hiring Mr. Sato as an Advisor and paying him remuneration.
In addition, while Mr. Sato served as Representative Director and President of the Company from 2012 to 2019,
he not only failed to prevent the six (6) cases of violation of the Antimonopoly Act committed by the Company
between 2011 and 2015, but also failed to detect the Company’s repeated violations of the Antimonopoly Act until
the Japan Fair Trade Commission conducted an on-site inspection in 2015.
To the contrary, in a shareholder derivative suit against four (4) of the Company's Directors and former Directors,
including Mr. Sato, seeking damages from the Company, the Tokyo District Court found that Mr. Sato had beenaware of and tolerated, since March 2011 at the latest, the violations of the Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade ("Antimonopoly Act") committed by the Company between 2011
and 2015. The Tokyo District Court thus found that Mr. Sato breached his duty of care as a Director and ordered
him to pay 1,732,270,000 yen in damages (hereinafter referred to as the "Judgment"). The Proposing Shareholder
believes that eliminating the influence of a person who was found by the Judgment to have overlooked or tolerated
the six (6) violations of the Antimonopoly Act despite being in a top management position would contribute toimproving shareholder value of the Company over the medium to long term, rather than expecting him to provide
useful advice to the Company.
In order to prevent the occurrence of such a condition in which a person whose influence should be eliminatedcan be appointed as an Advisor, the Company should enhance its corporate governance by abolishing the advisor
system itself, which is not deemed reasonable.
Company Note:

The above is the description of the details of the proposal and the reason for the proposal in theshareholder proposal submitted by a Proposing Shareholder. (The correct Japanese spelling of thefull name of “Mr. Sato” is “佐藤俊昭.”)

Opinion of the Board of Directors
The Board of Directors of the Company opposes this proposal.
The Company has appointed former Directors and Auditors to serve as Advisors as necessary. Their role is toprovide advice on general management issues at the request of the President and other officers and to engage inexternal activities beneficial to the smooth operation of the Company's business. We believe that the current system
under which the Company can appoint advisors at the request of the Board of Directors is beneficial to increasing
the Company's corporate value.
According to the "Practical Guidelines on Corporate Governance Systems" provided by the Ministry of Economy,
Trade and Industry of Japan, when appointing a former president as an advisor or the like, companies are expected
to disclose the number and roles of such persons. Accordingly, in an effort to ensure transparency, the Company
discloses through timely disclosure its plans to appoint an advisor or the like whenever it has any, and also discloses
when applicable, in the Corporate Governance Report submitted to the Tokyo Stock Exchange, the names ofadvisors or the like who have served as a president or other officer, their duties, whether they are remunerated, andthe process of their appointment.
It should be noted also that Advisors do not attend meetings of the Board of Directors, etc., and are not involvedin any of the Company's decision-making on management. Furthermore, the Company ensures objectivity byconsulting with the Nomination and Compensation Committee prior to appointing any Advisor, and Independent
Outside Directors constitute more than one-third of the Company's Board of Directors, which ensures anenvironment that eliminates the risk of undue influence by Advisors on decision making. In the light of these, we
do not believe that there are any governance concerns regarding the appointment of Advisors.
We therefore believe that the amendments to the Articles of Incorporation proposed in this Proposal are not- 16 -

necessary.
[Reference]
The Proposing Shareholder states as the reason for the proposal that the person who is scheduled to be appointed as an
Advisor in June this year is unsuitable as an Advisor because he failed to prevent the Company’s violations of the
Antimonopoly Act. However, the person is also highly knowledgeable in compliance issues and thus made a businessdecision to apply for the leniency program for a reduction or exemption of surcharge ahead of others in the industry. The
Company believes that he can contribute to the enhancement of the Company’s corporate value by assisting in management
as an Advisor.
Proposal 7:
Amendment to the Articles of Incorporation Pertaining to the Disclosure of Individual
Remuneration for Advisors
1. Details of proposal
Provided that Proposal 4 is rejected, the following chapter and article shall be added to the current Articles ofIncorporation.
Chapter 8 Disclosure of Individual Remuneration for Advisors(Disclosure of Individual Remuneration for Advisors)
Article 43 The Company shall disclose the amounts paid as remuneration (including nonmonetary remuneration) to each Advisor in the previous fiscal year individually in
the Corporate Governance Report that the Company submits to the Tokyo Stock
Exchange.
2. Reason for proposal
This proposal is intended to have disclosure of the individual remuneration for Mr. Sato as an Advisor for the
fiscal year ending March 31, 2023 and thereafter if Proposal 4 is rejected, in light of the plan to appoint Mr. Satoas an Advisor in late June 2022.
The Companies Act, in the first place, requires a resolution of the general meeting of shareholders to determine
the total amount of remuneration to be paid to directors. It also requires a policy for determining individual
remuneration for directors to be established by the board of directors, urging companies to establish governanceregarding remuneration for directors. The act of appointing him nevertheless as an Advisor after the retirement asa Director and automatically paying him remuneration as an Advisor is contrary to the intent of the Companies Act.
Furthermore, Mr. Sato voluntarily returned 30% of his monthly remuneration from October 2016 to December
2016, when he was Representative Director, President, in response to the discovery of violations of the
Antimonopoly Act and the resulting cease and desist order from the Japan Fair Trade Commission. On page 51 of
the CGS Guidelines, it is pointed out that the advisor's remuneration “has almost the same meaning as a deferredpayment" of the remuneration the person should have received as a director. If Mr. Sato is paid an Advisor’s
remuneration as a deferred payment of the remuneration he should have received as a director, the return of his
remuneration during his service as Representative Director would lose its meaning as a sanction for violating the
Antimonopoly Act and also as a deterrent for preventing recurrence in future.
According to the Judgment, Mr. Sato is found liable for the violation of the Antimonopoly Act and is obligatedto pay compensation of 1,732,270,000 yen to the Company. However, not only has the Company's Board of
Directors failed to hold Mr. Sato sufficiently accountable to date, it has not withdrawn its intent to appoint him as
an Advisor even after the Judgement. In light of the above, there is a strong concern that an unhealthy cozy
relationship has developed between the Board of Directors or the Nomination and Compensation Committee and
Mr. Sato, and thus governance cannot be expected to work in determining Mr. Sato's remuneration as an Advisor.
In order to dispel the above concerns, the Company should disclose the remuneration for its advisors individuallyto show that the remunerations they receive as advisors are reasonable.
Company Note:

The above is the description of the details of the proposal and the reason for the proposal in theshareholder proposal submitted by a Proposing Shareholder. “Proposal 4” therein means“Proposal 6.”- 17 -

Opinion of the Board of Directors
The Board of Directors of the Company opposes this proposal.
When that the Company appoints an Advisor as necessary, the Company sets an appropriate amount of
remuneration commensurate with the role of the Advisor always after ensuring objectivity with respect toremuneration by consulting the Nomination and Compensation Committee. We also believe that the disclosure of
the specific amounts of individual remunerations should be restricted from the standpoint of privacy protection.
Therefore, we do not believe that it is appropriate to establish such a provision in the Articles of Incorporation
as proposed in this proposal.

- 18 -