March 26, 2024
To Whom It May Concern
Company name:
Konishi Co., Ltd.
Representative name: Keiichi Oyama,President and Representative Director(Securities Code: 4956 TSE Prime)
Inquiries:
Shinichi Okamoto,Director and Managing ExecutiveOfficer(TEL 06-6228-2877)

Initiatives towards the realization of managementwith a focus on capital costs and stock prices

At a meeting of the Board of Directors held on March 26, 2024, Konishi Co., Ltd. discussed the current
status of its capital cost and capital profitability, its plans, and the status of its efforts to date.
The appendix refers to the details of its initiatives towards the realization of management with a focus oncapital costs and stock prices.

Initiatives towards therealization of managementwith a focus on capitalcosts and stock prices

March 26, 2024

Initiatives towards the realization of management with a focus on capital costs and stock prices

We hereby report on the current status of our capital cost, capital profitability andmarket valuation, our plans, and the status of our efforts to date.

We consider it is essential to achieve return-on-equity (ROE) above the cost ofshareholder’s equity continuously.
Believing that capital efficiency enhancement would lead to obtaining an appropriate
reputation on the stock markets and contribute to the improvement of price-book value
ratio (PBR), we have implemented the capital measures stated in the “Medium-termManagement Plan 2026 (from the FY ending March 2024 to the FY ending March2026)” which was announced on May 26, 2023.
1[1] Status Analysis 1/2
Capital cost and capital profitability• We estimate that the cost of shareholder’s equity is about 6.7% at present.
• We have achieved ROE above the cost of shareholder’s equity continuously.
• From the FY ended March 2019 through the FY ended March 2022, ROE had declined due to the accumulation of capital, narrowing the gap between the cost of shareholder’s equity and ROE.
• We recorded an unusually high ROE of 13.8% for the FY ended March 2023 due to the incurrence of a gain on sale of non-current assets (extraordinary gain) . The real ROE excluding thiseffect was 7.2%.
• We expect the real ROE for the FY ending March 2024 to rise due to an increase in operating profit and a decrease in capital as a result of purchasing treasury shares.
13.8%

Cost of shareholder’s equity

ROE
7.8%

4.5%
FY ended
March 2019

Operating profit

77.8%

7.9%

5.2%

4.8%

FY ended
March 2020

FY ended
March 2021

Profit attributable to owners of parent

Real ROE
7.2%

6.5%

5.6%
FY ended
March 2022

FY ended
March 2023

107.4

4.4

4.6

4.9

5.1

FY ended
March 2019

FY ended
March 2020

FY ended
March 2021

FY ended
March 2022

8.8%

Our approach to calculating cost of shareholder’s equity(using CAPM)
6.7%
Risk-free rate

(Unit: Billion yen)

7.3

7.1

7.1

7.7%

FY endingMarch 2024
(Forecast)

10.5+

Beta (β)

0.65%

=0.94

×

Risk premium
6.4%

Cost of shareholder’sequity
6.7%

6.8
• The 10-year government bond yield is used as the risk-free rate.
• β is vs. TOPIX 60-month historical beta.

FY ended
March 2023

FY endingMarch 2024
(Forecast)2[1] Status Analysis 2/2
Stock price and market reputation• From the FY ended March 2019 to the FY ended March 2023, the stock price and PBR remained almost flat, with PBR failing to stay at 1.
• The EPS forecast for the FY ended March 2023 almost doubled due to the recording of a gain on sale of non-current assets, resulting in a low price-earnings ratio of 7.1.
• One of the reasons we consider why we failed to continue achieving PBR of 1 until the FY ended March 2023 was that we did not clearly disclose the “Specific directionof our cash allocation and shareholder return policy.” For this reason, we, for the first time, clearly stated our cash allocation plan and shareholder return policy for thenext three years in the Medium-term Management Plan 2026 disclosed in May 2023.
• We recognized that the stock price rose in the FY ending March 2024 as we were accepted in the market with a high evaluation of earnings growth and the enhanced
shareholder return policy. PBR achieved 1 or more, and PER also increased.

Stock price (yen)億Market capitalization (Billion yen)

1,456
802
58.1

716
51.9

898
63.9

783
55.8

958

PER

11.9

FY ended
March 2020

FY ended
March 2021

FY ended
March 2022

14.314.6
10.5

10.4

94.9

7.1

67.8
1.05

FY ended
March 2019

PBR

FY ended
March 2023

FY endingMarch 2024
(As ofFebruary-end)

FY ended
March 2019

0.90
FY ended
March 2020

1.08
FY ended
March 2021

0.86

0.99

FY ended
March 2022

FY ended
March 2023

Note: We implemented a stock split which became effective on January 1, 2024, at a ratio of 2 common shares per share. The figures before the FY ended March 2023 were stated based on the stock
price at March-end after an adjustment for the stock split.

1.34
FY endingMarch 2024
(As of Februaryend)3[2] Goals towards improving market reputation
The Konishi Group formulated Medium-Term Management Plan 2026 for the three-year period starting from the current period.
(Disclosed on May 26, 2023)
While aiming to achieve record-high net sales and operating profit, we clearly stated, for the first time, our capital policies (cashallocation plan and shareholder return policy for the next three years) for further capital efficiency.
We plan to review the Medium-term Management Plan, as we expect to achieve in the current period the operating profit andROE targets for the FY ending March 2026, the final year of the Plan.
Medium-Term Management Plan 2026: Numerical Targets
FY ended March2023

Medium-Term Management Plan 2026: Cash Allocation PlanFY ending March 2026

Capital expenditure necessary for growth, and enhancement of shareholder return by way ofstable dividend payments and purchase of treasury shares

Cash allocation plan (for three years)(vs. FY ended March 2023)

Net sales

123.3 billion yen

Net sales

Operating profit

7.4 billion yen

Operating profit

EBITDA

9.6 billion yen

EBITDA(Operating profit and depreciation
and amortization of goodwill)(Depreciation and amortization ofgoodwill: About 2.2 billion yen)

(Operating profit and depreciation andamortization of goodwill)(Depreciation and amortization of goodwill: About 3.2 billion yen)ROE

7.2 %*ROE

8.0 %Capitalexpenditure

8.5 billion yen

Capital expenditure15.0 billion yen

Shareholder return

6.2 billion yen

Shareholder return12.0 billion yen

About 27.0 billion(Three-year total)yen(Recent three-year total)(Total dividends and total purchasecosts of treasury shares)(Recent three-year total)* Excluding an impact of a gain on sale of non-current
assets (extraordinary gain of 7.1 billion yen)

(Total dividends and total purchasecosts of treasury shares)

140.8 billion yen (+14.1%)
9.7 billion yen (+30.9%)*

Cash inflow (procurement)

12.9 billion yen (+34.5%)

Cash flow fromoperatingactivities(Three-year total)* The reason for expecting a lower increase in operating profit in the final fiscal year comparedwith “operating profit forecast for the FY ending March 2024 of 9.3 billion yen” (Note) is thatdepreciation of capital expenditures increases significantly in the final fiscal year.

Aim to achieve record-high net sales and operating profit in Bond, Chemicals, and Construction
businesses by strengthening new business development and focusing on growth areas!
Implement capital expenditure and shareholder return on a record-high scaleNote: Disclosed in “Summary of Financial
Results for the FY ending March 2024”
dated April 28, 2023

Cash outflow (allocation)

Capitalexpenditure
About 15.0 billionyen

Shareholder return
About 12.0 billion yen
Total return ratio 60%Growth investment for the purposeof expanding and streamlining
business

Production

Logistics

DX (core systems)

Purchase of treasury
sharesAbout 6.0 billion yen
Record highDividends about 6.0 billion yen
Dividend payout ratio 30%* Funds necessary for an M&A will be provided from cash on hand.
* Treasury shares purchased will be cancelled in principle.
* The above diagram is an image of cash allocation for the three years and does not reflect animpact of changes in working capital.

4[3] Status of initiatives towards the achievement of targets in the current period 1/2(i) Implementation of capital policy
Purchase of treasury shares

We planned to purchase treasury shares of about 6.0 billion yen during the three years in the cash allocation plan of Mediumterm Management Plan 2026. However, we purchased treasury shares of about 6.7 billion yen (number of shares after stock
split: 5,704,100) in the current period, the initial year of the plan.

Cancellation of treasury shares

We cancelled 11,000,000 treasury shares (number of shares after stock split) as of October 13, 2023.

The number is equivalent to 13.5% of the total number of outstanding shares before cancellation.

Stock split

We implemented a stock split for the purpose of expanding the investor base and improving stock liquidity.
(1) Method of stock split“2-for-1” stock split(2) Record date

December 31, 2023

(3) Effective date

January 1, 2024

5

[3] Status of initiatives towards the achievement of targets in the current period 2/2(ii) Expansion of remuneration for directors (and other officers) linked to shareholder profits
Basic policy

The remuneration system is designed to link to shareholder profits in order to function as an incentive to seek sustainable improvement of corporate value.
Director remuneration composition ratio

At a meeting of the Board of Directors in April 2023, we reviewed the director remuneration composition ratio and decided to increase the percentage ofshare-based remuneration for the purpose of enhancing profit-sharing with shareholders.
(Before revision) About 65%

Basic remuneration: About 60%(Before revision) 15%
remuneration:
Bonuses: About 20% Share-based
About 20%

The share-based remuneration system is also adopted for executive officers who do not serve as a director concurrently. In addition, outside directors whoserve supervisory functions are paid only fixed remuneration in consideration of their duties.

(iii) Expansion of an employee stock ownershipassociation

70%

71%

69%

Employees are encouraged to participate in the employee
stock ownership association in order to grant incentives toseek improvement of corporate value.

1,368

1,406

1,469

The employee stock ownership association system hastargeted employees of Konishi Co., Ltd, the parent company.
However, from the second half of the current fiscal year, thesystem also targeted employees of domestic affiliates.

74%

74%
Rate of participation byemployees

1,528

1,486

Number of shares held(1,000 shares)* As of March-end
Number of shares after stock split
on January 1, 2024

FY ended
March 2019

FY ended
March 2020

FY ended
March 2021

FY ended
March 2022

FY ended
March 2023

(6th)

(5th)

(5th)

(5th)

(6th)

Shareholder rankings
are in parentheses.

(iv) The contents of dialogue with shareholders and investors are shared at the Board of Directors periodically
We have IR division in place, and as a general rule, personnel of the IR division are in charge of dialogue with shareholders and investors.
Directors including the representative director also attend meetings when necessary.
From the current period, the contents of dialogue and opinions are reported to the Board of Directors on a quarterly basis and reflected inmeasures at appropriate times.

6Disclaimer
Earnings forecasts, etc. are based on information available at the time of preparation of this material andcertain assumptions that we consider reasonable. Actual earnings may differ depending on various risks,
uncertainties and other factors. This material is not intended as an investment solicitation. Investment
decisions should be made at the user’s own discretion.

<IR Contact>
Corporate Planning department,
Konishi Co., Ltd.
TEL: 06-6228-2877
E-mail: konishi-ir@bond.co.jp