These documents have been translated from Japanese originals for reference purposes only.
In the event of any discrepancy between these translated documents and the Japanese originals, the originals
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translations.

NOTICE OF THE 201ST ANNUAL GENERAL MEETING OF SHAREHOLDERS

Date and Time:

Monday, June 28, 2021 at 10 a.m. Japan time (Reception begins at 9:30 a.m.)

Place:

Marunouchi Hall, seventh floor, Marunouchi Building, located at 2-4-1
Marunouchi, Chiyoda-ku, Tokyo, Japan
Please note that no souvenirs or coffee will be provided at this general meeting.

Proposals to be resolved:
Proposal No. 1: Election of Six (6) Directors (Excluding Directors Serving as Audit andSupervisory Committee Members)
Proposal No. 2: Election of One (1) Director Serving as Audit and Supervisory Committee
Member
Proposal No. 3: Renewal of Measures to Respond to a Large-scale Purchaser of the Company’s
Share Certificates, etc. (Takeover Defense Measures)
Contents:
Convocation Notice ...................................................................................................................... 3
Reference Documents for the General Meeting of Shareholders.................................................. 5
Consolidated Financial Statements ............................................................................................. 38
Non-Consolidated Financial Statements ..................................................................................... 40

Daitobo Co., Ltd.
(Securities Code 3202)

1

Dear Shareholders,
We would like to give our utmost gratitude to our shareholders for their daily support.
First, we would like to express our deepest sympathies to all those who contracted COVID-19 and pray for
their speedy recovery. We would also like to express our heartfelt appreciation to all healthcare workers
devoting their time and energy to contain the virus. Moreover, our heart goes out to all those making efforts toprevent infection.
We present this notice of convocation for our 201st Annual General Meeting of Shareholders for yourperusal.
In the fiscal year under review, due to COVID-19 infections spreading worldwide, Japan’s economic
environment continued to be significantly impacted by the virus. Personal consumption remained weak amid
continuation of a harsh employment and income environment.
Even in this tough situation, we continued to work diligently to achieve success in our efforts under “Get
Ahead of the Future mid-term management policy,” of which the fiscal year ended March 31, 2021 was the
final year. In the commercial facility business, although we faced severe circumstances as rent concessions
were provided to the tenants of “SUN TO MOON Kakitagawa,” a leading commercial facility in Shizuoka
Prefecture, who suspended their businesses during the first wave due to the spread of COVID-19 infections,
except some tenants, the business gradually recovered from the second half of the fiscal year under review,
owing mainly to the opening of “SUN TO MOON Oasis” at the end of the previous fiscal year bringing about
a positive effect and the release of the movie “Demon Slayer: Kimetsu no Yaiba.” Meanwhile, in the healthcare business and the textile and apparel businesses, we strove to promote sales of items including masks andantibacterial materials, but we continued to struggle over the course of the year as the effects of COVID-19
were prolonged.
As a result, net sales decreased, and operating income and ordinary income both fell in turn. However,profit attributable to owners of parent increased after recording deferred tax assets through the application oftax effect accounting.
On May 14, 2021, we announced our “Breakthrough 2024 – PROGRESS IN THE NEW NORMAL
mid-term management plan” which was resolved at the Board of Directors and incorporates effects fromCOVID-19 infections, new accounting standards for revenue recognition, and our new sales strategy.
We will respond flexibly to changes based on our management philosophy, “enterprising spirit,” while
making the utmost efforts based on “Breakthrough 2024 – PROGRESS IN THE NEW NORMAL mid-term
management plan” newly launched to achieve sustainable growth and enhance corporate value over the midto long-term. We appreciate our shareholders’ continued encouragement and support.
Kazuhiro Yamauchi
President and Representative Director
Daitobo Co., Ltd.

2

(Securities Code 3202)
June 4, 2021
To Shareholders with Voting Rights:
Kazuhiro Yamauchi
President and Representative Director
Daitobo Co., Ltd.
1-6-1 Nihonbashihon-cho, Chuo-ku,
Tokyo, JapanNOTICE OF THE 201ST ANNUAL GENERAL MEETING OF SHAREHOLDERS
We would like to express our appreciation for your continued support and patronage.
The 201st Annual General Meeting of Shareholders of Daitobo Co., Ltd. (the “Company”) and its
subsidiaries (collectively, the “Group”) will be held for the purposes as described below.
Under normal circumstances, we would invite all shareholders to attend the meeting and provide areport directly in person. However, also this year, from the perspective of COVID-19 prevention, we
strongly suggest that you exercise your voting rights in writing or via the Internet. Please take oursuggestion into consideration, and we appreciate your understanding on this matter.
When exercising your voting rights in writing or via the Internet, please review the Reference Documents
for the General Meeting of Shareholders (described hereinafter), indicate your vote for or against the proposalon the enclosed Voting Rights Exercise Form and return it, or review the “Instructions for Exercising Voting
Rights via the Internet” (on pages 3 to 4, in Japanese only) and vote via the Internet. In either of the above
cases, please note that for your vote to be valid, it has to be received by 5:25 p.m. on Friday, June 25, 2021
Japan time.
1. Date and Time:

Monday, June 28, 2021 at 10 a.m. Japan time

2. Place:

Marunouchi Hall, seventh floor, Marunouchi Building, located at 2-4-1
Marunouchi, Chiyoda-ku, Tokyo, Japan

3. Meeting Agenda:
Matters to be reported: The Business Report, Non-Consolidated Financial Statements, and Consolidated
Financial Statements for the Company’s 201st Fiscal Year (April 1, 2020 March 31, 2021) and results of audits by the Accounting Auditor and the Audit
and Supervisory Committee of the Consolidated Financial Statements
Proposals to be resolved:
Proposal No. 1: Election of Six (6) Directors (Excluding Directors Serving as Audit andSupervisory Committee Members)
Proposal No. 2: Election of One (1) Director Serving as Audit and Supervisory Committee
Member
Proposal No. 3: Renewal of Measures to Respond to a Large-scale Purchaser of the Company’s
Share Certificates, etc. (Takeover Defense Measures)○ When attending the meeting, please submit the enclosed Voting Rights Exercise Form at the receptiondesk.
○ Of the documents to be provided with this Convocation Notice, Systems to Ensure the Appropriateness ofCorporate Business Operations and the Status of Operation Thereof, Basic Policy Regarding Control of theCompany, Consolidated Statement of Changes in Equity, Non-Consolidated Statement of Changes in Equity,
Notes to the Consolidated Financial Statements and Notes to the Non-Consolidated Financial Statements
are posted on the Company’s website on the Internet (http://www.daitobo.co.jp/) pursuant to provisions of laws3

and regulations as well as Article 16 of the Articles of Incorporation of the Company.
○ Any updates to the Reference Materials for the General Meeting of Shareholders, the Business Report, theConsolidated Financial Statements, and the Non-Consolidated Financial Statements will be posted on the
Company’s website on the Internet (http://www.daitobo.co.jp/).

4Reference Documents for the General Meeting of Shareholders
Proposal No. 1:

Election of Six (6) Directors (Excluding Directors Serving as Audit and Supervisory
Committee Members)

The terms of office of all four (4) incumbent Directors (excluding Directors serving as Audit andSupervisory Committee Members) will expire at the conclusion of this year’s General Meeting of
Shareholders. Accordingly, in order to strengthen governance and the management structure, the election ofsix (6) Directors (excluding Directors serving as Audit and Supervisory Committee Members) is proposed,
increasing the number of Outside Directors by two (2). Moreover, among the candidates, three (3) are newly
appointed Outside Directors.
The candidates for Directors (excluding Directors serving as Audit and Supervisory Committee
Members) are as follows.
Additionally, the nomination of candidates for Directors (excluding Directors serving as Audit andSupervisory Committee Members), is made via resolution of the Board of Directors with reference to theopinions on the selection of candidates contained in reports from the Advisory Committee, composed
primarily of Independent Outside Directors and including the President, which comprehensively consider
factors such as experience, insight, and abilities as managers.
Furthermore, the Audit and Supervisory Committee has judged that the election of each candidate for
Director is appropriate as they can be expected to contribute to improving corporate value in the future when
taking into account each candidate’s possession of deep specialized knowledge, wealth of experience, andsuitability as Director, in addition to other factors such as a diverse composition of Officers.

No.

Name

GenderCurrent positions andresponsibilities at the Company
President and Representative
Director
Director and Managing Executive
Officer, General Manager,
Business Management
Headquarters, in charge of internal
control
Executive Officer, General
Manager, Health Care Business
Headquarters, General Manager,
Tokyo Sales Division

Attendanceat meetingsof the Boardof Directors
100%(17 / 17)

1

Reappointment

Kazuhiro Yamauchi

Male

2

Reappointment

Shogo Mieda

Male

3

New appointment

Shiro Nomura

Male

Shusaku Okumura

Male

Director serving as Audit andSupervisory Committee Member

100%(17 / 17)

Toshiki Yamagata

Male

－

－

Noriko Morota

Female

－

－

4
5
6

New appointment
OutsideIndependent Officer
New appointment
OutsideIndependent Officer
New appointment
OutsideIndependent Officer

5100%(17 / 17)

－

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company
April 1979

Number ofshares of theCompany held

Joined Mitsui Trust and Banking Company, Limited(currently Sumitomo Mitsui Trust Bank, Limited)
February 2002 General Manager, Personnel Planning Dept. of Chuo
Mitsui Trust and Banking Company, Limited (currently
Sumitomo Mitsui Trust Bank, Limited)
January 2004 General Manager, Osaka Branch Business Dept. II
January 2007 General Manager, Shinjuku Nishiguchi Branch
June 2009
Director and General Manager, Corporate Planning
Division of the Company
August2010
Managing Director and General Manager, Business
Kazuhiro Yamauchi
Management Headquarters, General Manager, Corporate(January 5, 1957)
Planning Division
June 2012
Senior Managing Director and General Manager, Business
Reappointment
90,200Management Headquarters, Deputy General Manager, RealsharesAttendance at
Estate Headquarters, in charge of internal control
meetings of the Board July 2013
Director and Senior Managing Executive Officer, Generalof Directors
Manager, Business Management Headquarters, General
17 / 17
Manager, Personnel Division, in charge of business1
strategy and internal control
June 2015
President and Representative Director (current post)
Chairman of DAITOBOSHOKU (SHANGHAI)CORPORATION (current post)(to the present)
Significant concurrent positions
Chairman of DAITOBOSHOKU (SHANGHAI) CORPORATION* DAITOBOSHOKU (SHANGHAI) CORPORATION is a wholly owned
subsidiary of the Company.
Reasons for selecting the candidate for Director
As President and Representative Director of the Company, Mr. Kazuhiro Yamauchi has achievements in leading
the overall group with strong leadership and action, and possesses advanced insights and knowledge regarding
overall management based on many years of experience at a financial institution and abundant management
experience at the Company. The Company has determined that he will continue to be essential for the
management of the Company to accomplish the mid-term management plan that was newly initiated in the fiscal
year under review, and to achieve sustainable growth of the Company and improvement in mid- to long-term
corporate value, and thus proposes his continued appointment as Director of the Company.

6

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company

Number ofshares of theCompany held

April 1990
Joined the Company
September 2010 Accounting Group Leader, Administration Division
June 2012
General Manager, Corporate Planning Division, Business
Management Headquarters
Shogo Mieda
June 2015
Director and Executive Officer, General Manager,(February 12, 1969)
Business Management Headquarters, in charge of internal
control
Reappointment
29,500June 2019
Director and Senior Executive Officer, General Manager,
sharesBusiness
Management
Headquarters,inchargeofinternal
Attendance atcontrolmeetings of the Board
June 2020
Director and Managing Executive Officer, Generalof Directors
2Manager,Business Management Headquarters, in charge
17 / 17of internal control(to the present)
Significant concurrent positions
None
Reasons for selecting the candidate for Director
As Director and Managing Executive Officer of the Company, Mr. Shogo Mieda has achievements in supervisingoverall administration divisions such as business management and internal control, and has years of experienceand deep knowledge regarding accounting and corporate planning at the Company. The Company has determinedthat he is essential to achieve sustainable growth of the Company and improvement in mid- to long-term
corporate value, and thus proposes his continued appointment as Director of the Company.

7

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company
April 1979

Number ofshares of theCompany held

Joined The Mitsui Bank, Ltd. (currently Sumitomo Mitsui
Banking Corporation)
April 1991
Joined WATEX Co., Ltd.
April 1992
Director
Shiro Nomura
April 1995
Vice President and Representative Director(June 1, 1956)
April 2000
President and Representative Director
April 2019
Company President, WATEX, Health Care BusinessNew appointment
2,000
Headquarters of the Company
sharesJune
2020
Executive
Officer,
DeputyGeneralManager,
HealthCare
Attendance atBusiness Headquarters, Chief of Kansai Region
meetings of the Board
March 2021
Executive Officer, General Manager, Health Care Businessof Directors
3
Headquarters, General Manager, Tokyo Sales Division－(current post)(to the present)
Significant concurrent positions
None
Reasons for selecting the candidate for Director
Mr. Shiro Nomura has achievements as Executive Officer and General Manager of Health Care Business
Headquarters of the Company, and has abundant management experience and advanced insights as President of
the former WATEX Co., Ltd. The Company has determined that he can be expected to contribute greatly inachieving future growth of the Company’s health care business to lead to the sustainable growth of the Company
and improvement in mid-to long-term corporate value, and thus proposes his appointment as Director.

8

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company
April 1977

Number ofshares of theCompany held

Joined Sumitomo Marine & Fire Insurance Co., Ltd.
(currently Mitsui Sumitomo Insurance Company, Limited)
General Manager, Nursing Care & Service Office of
Shusaku Okumura April 2003
Mitsui
Sumitomo Insurance Company, Limited(June 16, 1952)
April 2006
President and Representative Director of American
Appraisal Japan Co., Ltd.
New appointment
April 2008
General Manager, Risk Management Division of Mitsui
Outside10,900Independent Officer
Sumitomo Insurance Company, Limited
shares
October 2010 General Manager, Corporate Risk Management Dept. ofAttendance at
MS&AD Insurance Group Holdings, Inc.
meetings of the Board June 2016
Director serving as Audit and Supervisory Committeeof Directors
Member of the Company (current post)
17 / 17(to the present)
Significant concurrent positions
4
None
Reasons for selecting the candidate for Outside Director and overview of expected roles
Mr. Shusaku Okumura, as the Company’s Outside Director serving as Audit and Supervisory Committee
Member, has been deepening his knowledge of the Company’s business for many years, and providing
appropriate advice and supervision in regard to the Company’s management. Moreover, as he has experience as amanager in nursing care related business at a major domestic non-life insurance company and as a manager of
the Japanese arm of an American company, in addition to a wealth of operational experience relating to internal
control, the Company has determined that he has advanced insights and abundant experience. Although he iscurrently a Director serving as Audit and Supervisory Committee Member, the Company proposes his
appointment as Outside Director. In the future, the Company believes that he can be expected to provide advice
regarding the overall business activities and appropriately supervise the business execution of the Company froma broad and advanced perspective. In addition, Mr. Okumura has requested to resign as Director serving as Audit
and Supervisory Committee Member at the conclusion of this General Meeting of Shareholders, and his request
has been accepted by the Audit and Supervisory Committee. Furthermore, his term of office as an Outside
Director will be five (5) years at the conclusion of this General Meeting of Shareholders.

9

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company
April 1982
June 1988

Number ofshares of theCompany held

Joined Haseko Corporation
Completed Master of Business Administration (MBA),
Drucker School of Management, Claremont Graduate
University (U.S.)
September 1997 Vice President of Haseko (Hawaii), Inc.
October 2004 Joined Sundance Resort Ltd.
Toshiki Yamagata July 2009
President and Representative Director(May 7, 1958)
April 2015
President and Representative Director of Soh Mechanical& Electrical engineers Corporation
New appointment
April 2016
President and Representative Director of MYSTAR
Outside0
ENGINEERING CORP.
Independent Officer
sharesJuly 2018
Senior Manager, Solution Management Department,
Business
Operation Headquarters of Vortex Co., Ltd.
Attendance atmeetings of the Board December 2019 Executive Officer, General Manager, Business Operation
Headquarters
of Directors
5
July 2020
Executive Officer, General Manager, Business−
Management Headquarters (current post)(to the present)
Significant concurrent positions
Executive Officer, General Manager, Business Management Headquarters
of Vortex Co., Ltd.
No special interest exists between Vortex Co., Ltd. and the Company.
Reasons for selecting the candidate for Outside Director and overview of expected roles
Mr. Toshiki Yamagata has many years of experience through his involvement in the real estate business utilizing
his expertise in real estate as well as broad, abundant experience as President and Representative Director at alisted company. The Company has determined that he possesses deep knowledge and advanced insights
regarding the real estate business and overall management, and thus proposes his appointment as Outside
Director. In the future, the Company believes that he can be expected to provide advice regarding the Company’s
overall management activities including the commercial facility business, the Company’s core business, andappropriately supervise the business execution of the Company from a broad and advanced perspective.

10

No.

Name
(Date of birth)

Career summary, positions and responsibilities at the Company
April 1961

Number ofshares of theCompany held

Started work in Tokyo-certified Ito Arts and Crafts
Technical
School (currently TOKYO KNIT FASHION
Noriko Morota
ACADEMY)(January 27, 1939)
July 1988
Principal of Ito Fashion Technical School (currently
TOKYO KNIT FASHION ACADEMY)
New appointment
September 1992 Principal of TOKYO KNIT FASHION ACADEMY
Outside0(current post)
Independent Officer
sharesApril 2013
Technical Adviser of the Company
Attendance at
May 2021
Resigned as Technical Adviser
meetings of the Board Significant concurrent positionsof Directors
Principal of TOKYO KNIT FASHION ACADEMY−6
No special interest exists between TOKYO KNIT FASHION ACADEMY
and the Company.
Reasons for selecting the candidate for Outside Director and overview of expected roles
Ms. Noriko Morota, as a pioneer of human resource development in the knitwear industry, has many years ofexperience in contributing to the expansion of the knitwear industry and engaging in human resource
development as a manager of a vocational school for knit fashion. She is also extensively well-connected withpeople in the apparel industry. Furthermore, as she has provided advice as Technical Adviser of the Company’s
knitwear related business, the Company determined that she has deep knowledge and advanced insights
regarding the apparel business and overall management, and thus proposes her appointment as Outside Director.
In the future, the Company believes that she is expected to provide advice regarding the overall businessactivities including the Company’s founding apparel business and appropriately supervise the business executionof the Company from a broad and advanced perspective.
(Notes) 1. No special interest exists between the Company and any of the candidates for Directors(excluding Directors serving as Audit and Supervisory Committee Members).
2. Furthermore, other matters related to the candidate for Outside Director are as follows:
1) Messrs. Shusaku Okumura, Toshiki Yamagata, and Ms. Noriko Morota are candidates for
Outside Directors as stipulated in Article 2, Paragraph 3, Item 7 of the Ordinance for
Enforcement of the Companies Act.
2) Messrs. Shusaku Okumura, Toshiki Yamagata, and Ms. Noriko Morota satisfy the Criteria for
Independence of Outside Officers set forth by the Company. The Company plans to designatethem as independent officers stipulated by the Tokyo Stock Exchange and Nagoya Stock
Exchange. In the event they are elected and appointed as Directors, the Company intends toregister them as independent officers.
3) In the event Messrs. Shusaku Okumura, Toshiki Yamagata, and Ms. Noriko Morota areelected and appointed as Directors, the Company plans to enter into agreements with them tolimit their liability for damages, as stipulated in Article 423, Paragraph 1 of the Companies
Act, to the minimum liability amount set forth in Article 425, Paragraph 1 of the same.
4) The Company has entered into a directors and officers liability insurance contract that insures
Directors (excluding Directors serving as Audit and Supervisory Committee Members) as
stipulated in Article 430-3, Paragraph 1 of the Companies Act with an insurance company,
and the Company plans to extend and renew the contract. In the event each candidate isreappointed or elected, each person will be insured under the insurance contract.
Among the liability of Directors to third parties and the Company, the insurance contract
covers damages to be borne by insured persons arising from shareholder derivative lawsuits,
third party litigations, and corporate litigations.

11

Proposal No. 2:

Election of One (1) Director Serving as Audit and Supervisory Committee Member

One (1) incumbent Director serving as Audit and Supervisory Committee Member, Mr. Shusaku
Okumura, will resign at the conclusion of this year’s General Meeting of Shareholders. Accordingly, theelection of one (1) Director serving as Audit and Supervisory Committee Member is proposed.
The resignation of the incumbent Director serving as Audit and Supervisory Committee Member and this
Proposal has been consented by the Audit and Supervisory Committee.
The candidate for Director serving as Audit and Supervisory Committee Member is as follows:
Name(Date of birth)

Career summary, positions and responsibilities at the Company

April 1989
Joined SUMITOMO LIFE INSURANCE COMPANY
March 1994
Joined Japan Medical Planning
November 1995 Co-founded Komiya Consultants CO., LTD
New appointment
April 2015
Vice President and Director
OutsideApril 2017
President and Representative Director
Independent Officer April 2020
Vice Chairman and Director (current post)(to the present)
Attendance at
Significant concurrent positions
meetings of the Board Vice Chairman and Director of Komiya Consultants CO., LTD
of Directors
No special interest exists between Komiya Consultants CO., LTD and the−Company.

Number ofshares of theCompany held

Shogo Hirai(October 11, 1965)

0sharesAttendance atmeetings of the Audit
and Supervisory
Committee−
Reasons for selecting the candidate for Outside Director and overview of expected roles
Mr. Shogo Hirai is well versed in corporate management and personnel and labor matters from his many years ofexperience as a management consultant. The Company has determined that he possesses expertise and advanced
insights regarding management, and thus proposes his appointment as Outside Director serving as Audit andSupervisory Committee Member. In the future, the Company believes that he is expected to provide advice
regarding the overall business activities of the Company and supervise management from a broad and advanced
perspective, including management as well as personnel and labor aspects.
(Notes) 1. No special interest exists between the Company and the candidate for Director serving as Audit
and Supervisory Committee Member.
2. Furthermore, other matters related to the candidate for Outside Director are as follows:
1) Mr. Shogo Hirai is a candidate for Outside Director as stipulated in Article 2, Paragraph 3,
Item 7 of the Ordinance for Enforcement of the Companies Act.
2) Mr. Shogo Hirai satisfies the Criteria for Independence of Outside Officers set forth by theCompany. The Company plans to designate him as an independent officer stipulated by the
Tokyo Stock Exchange and Nagoya Stock Exchange. In the event he is elected and appointed
as Director, the Company intends to register him as an independent officer.
3) In the event Mr. Shogo Hirai is elected and appointed as a Director, the Company plans toenter into an agreement with him to limit his liability for damages, as stipulated in Article
423, Paragraph 1 of the Companies Act, to the minimum liability amount set forth in Article
425, Paragraph 1 of the same.
4) The Company has entered into a directors and officers liability insurance contract that insures
Directors serving as Audit and Supervisory Committee Members as stipulated in Article
430-3, Paragraph 1 of the Companies Act with an insurance company, and the Company
plans to extend and renew the contract. In the event Mr. Shogo Hirai is elected, he will be
insured under the insurance contract.
Among the liability of Directors to third parties and the Company, the insurance contract
covers damages to be borne by insured persons arising from shareholder derivative lawsuits,
third party litigations, and corporate litigations.

12[Opinion of the Audit and Supervisory Committee]
The Audit and Supervisory Committee has carefully considered the election of Directors of the Company,
including confirming the discussions of the Advisory Committee. The Audit and Supervisory Committee
has judged that the procedures for nomination when electing Directors are appropriate, and that thecandidates are suitably qualified as Directors of the Company as a result of comprehensively considering
the candidates’ experience, insights, and abilities as managers taking into account the candidates’
backgrounds thus far, and other factors.

13

(Reference)[Policy on the Election of Directors of the Company]
The Company selects candidates with the prerequisite that they possess a high level of expertise, andqualities and insight as a manager, taking into account business scale, business scope, and other factors, withthe requirement that the number of candidates is within the limits of the number of Directors stipulated in
the Articles of Incorporation. In addition, the Company elects candidates for Independent Outside Director
who possess a high level of insight and will supervise management, etc. from an objective standpoint andprovide views and advice that will contribute to enhancing corporate value. On the other hand, the Company
has introduced an Executive Officer System, thereby clarifying the responsibility of supervising
management and the responsibility of business execution. In addition, in June 2016, the Company
transitioned to a company with an Audit and Supervisory Committee. Through above initiatives, the basic
approach of the Board of Directors is to create a system that is capable of supervising management
efficiently and effectively. Furthermore, the Company shall elect at least one (1) Director Serving as Audit
and Supervisory Committee Member with a sufficient knowledge of finance and accounting.
[Procedures for the Election of Directors of the Company]
The nomination of candidates for Director (excluding Directors serving as Audit and Supervisory
Committee Members) and Directors serving as Audit and Supervisory Committee Members shall be
determined by resolution of the Board of Directors, with reference to views regarding the candidates
reported by the Advisory Committee, which mainly comprises Independent Outside Directors and includes
the President, comprehensively considering candidates’ experience, insight, ability, etc. as a manager.
[Criteria for Independence of Outside Directors of the Company]
If the Board of Directors of the Company judges that an Outside Director does not fall under any of thefollowing items, he or she shall be considered independent.
1) An executing person of the Company or its subsidiaries, either currently or in the past2) A major shareholder of the Company (refers to a shareholder with a voting rights ownership ratio of
10% or more) or an executing person thereof, either currently or in the past five (5) years
3) A party whose major business partner is/was the Company (refers to a party for whom sales to theGroup account for 2% or more of the consolidated net sales of the business partner in any of the past
three (3) fiscal years) or an executing person thereof, either currently or in the past five (5) years
4) A party who is/was a major business partner of the Company (refers to a party who accounts for 2%
or more of the Group’s consolidated net sales in any of the past three (3) fiscal years) or an
executing person thereof, either currently or in the past five (5) years5) An executing person of a major lender to the Company (refers to a financial institution that theGroup borrows from, and whose total outstanding lending to the Group exceeds 10% of the Group’s
total outstanding borrowing at the end of the most recent fiscal year), either currently or in the past
five (5) years
6) A consultant, an accounting professional, or a legal professional receiving a significant amount(refers to an amount exceeding 10 million yen in any of the past three (3) fiscal years) of money orother assets from the Company other than executive remuneration
7) An executing person of a body receiving (or making) a donation or aid of a significant amount(refers to an amount exceeding 10 million yen in any of the past three (3) fiscal years) from (to) the
Company8) An executing person of a party which has a mutual relationship with the Company through outside
officers9) A spouse, a relative within two degrees of kinship, or a cohabiting relative of an individual who has
fallen under any of criteria 1 through 810) A person whose total term of office as Outside Director exceeds eight (8) years.

14

Proposal No. 3: Renewal of Measures to Respond to a Large-scale Purchaser of the Company’s Share
Certificates, etc. (Takeover Defense Measures)
The Company introduced measures to respond to a large-scale purchase of the Company’s sharecertificates, etc. judged to violate the realization of the corporate value of the Company, corporate interests,
and shareholders’ common interests (hereinafter, the “Takeover Defense Measures”), after receiving
shareholders’ approval at the 195th Annual General Meeting of Shareholders of the Company held on June25, 2015. Thereafter, at the 198th Annual General Meeting of Shareholders of the Company held on June 27,
2018, the Company received shareholders’ approval to reintroduce the Takeover Defense Measures(hereinafter, the “Former Plan”) after making changes in line with the Company’s transition to a Company
with Audit and Supervisory Committee. The Former Plan is effective until the conclusion of the Annual
General Meeting of Shareholders of the Company for the fiscal year ended March 31, 2021, and will expire
at the conclusion of the 201st Annual General Meeting of Shareholders of the Company to be held on June
28, 2021 (hereinafter, “this Annual Meeting”).
After considering the matter from the perspective of further protecting and enhancing the corporate valueof the Company and shareholders’ common interests, while also taking into consideration changes in socialand economic trends, discussions regarding takeover defense measures, and other factors, the Company has
decided, by unanimous approval of all Directors of the Company at a meeting of the Board of Directors heldon May 14, 2021, to renew the Former Plan as described below (hereinafter, referred to as the “Renewal,”and the takeover defense measures of the Company after the Renewal are referred to as “this Plan” in this
Proposal below), subject to receiving shareholders’ approval at this General Meeting of Shareholders.
In this Proposal, the Company requests shareholders’ approval in regard to this Plan. The details of thisPlan are as follows.
Furthermore, all Directors serving as Audit and Supervisory Committee Members of the Company
attended the meeting of the Board of Directors where the renewal of this Plan was determined, and all
expressed views approving of this Plan, subject to the specific implementation of this Plan being
appropriately conducted.
The main changes accompanying the Renewal are as follows, and the Company has not made any
substantial changes to its contents.
Change 1. The content of the below item II “Special initiatives to contribute to the realization of the basic
policy” has been amended to reflect various measures related to the Company’s mid-term
management plan.
Change 2. Other formal changes such as amendments to dates in line with renewal have been made.
I Basic policy regarding persons controlling decisions about the Company’s financial and business
policies
The Company believes that persons controlling decisions about the Company’s financial and business
policies must understand the sources of the Company’s corporate value, and be persons who are able toprotect and enhance the corporate value of the Company, corporate interests, and shareholders’ common
interests, on an ongoing and sustainable basis. As a public company, the free trade of the Company’s sharecertificates, etc. by shareholders and investors is recognized, and the Board of Directors of the Company
believes that the status of persons controlling decisions about the Company’s financial and business policies
should ultimately be determined by the will of shareholders as a whole, and that in the event of a large-scalepurchase (as defined in the below item III 2. (3) 1); hereinafter, the same applies) of the Company’s sharecertificates, etc., judgments regarding whether or not to accept the large-scale purchase should ultimately be
entrusted to the Company’s shareholders.
Recently, however, in capital markets in Japan, there is a trend toward one-sided large-scale purchases
being forced through without the approval of the management team of the target company. Among suchlarge-scale purchases, it may be expected that there are some that will not contribute to the corporate valueof the target company, corporate interests, and shareholders’ common interests, such as those that will clearlyharm corporate value, corporate interests, or shareholders’ common interests in view of the objectives, etc. ofthe large-scale purchase, those that may effectively force shareholders to sell share certificates, etc., thosethat do not provide sufficient time or information for the Board of Directors of the target company andshareholders to consider the content of the purchase proposal and any alternative proposal by the Board of
Directors of the target company, etc., and those that require consultation or negotiation by the Board of
Directors of the target company with the large-scale purchaser to secure more advantageous terms than thosepresented by the large-scale purchaser (as defined in the below item III 2. (3) 1); hereinafter, the same
applies).
The Company believes that persons conducting such large-scale purchases that will not contribute to15

enhancing the corporate value of the Company, corporate interests, and shareholders’ common interests are
not appropriate as persons controlling decisions about the Company’s financial and business policies, andbelieves that necessary and appropriate countermeasures must be taken in the event that such a person
appears.
II

Special initiatives to contribute to the realization of the basic policy
1. Sources of the Company’s corporate value
The Company was established as Japan’s first wool company in February 1896 with investment from
the Mitsui family and other influential figures in the financial world of Tokyo. Subsequently, the Company
contributed to economic and social development over many years as a leading company in the textile
industry, a driver of Japan’s economic growth from the Meiji period to the beginning of the Showa period.
By quickly establishing an integrated production structure for wool products, the Company also utilized its
strength in the uniform business for public and private demand, and had many achievements, including
supplying uniforms for the police, fire department, and other government departments, and uniforms
related to the previous Tokyo Olympics. In addition, in the 1960s, the Company also participated widely inthe development of the apparel industry, including creating a mass production structure for men’s suits andcollaborating with influential U.S. brands. Furthermore, going into the 1990s, the Company entered thetextile business in China, including establishing a men’s suit manufacturing factory in a joint venture with
the Shanshan Group, an influential Chinese conglomerate, and also in 2008 took over the proposal-based
OEM business of Cosmoei Co., Ltd., which was strong in the knitwear business, and began knitwear
planning consulting. In particular, the “uniform business” and “knitwear planning consulting,” which arewool-related businesses that are expected to support the future textile and apparel business, are a group ofbusinesses that was developed over the course of this history. Furthermore, amid the slump in the domestic
textile industry, the Company also implemented decisive restructuring measures as necessary, including
closing the Suzuka Plant, the Company’s largest domestic cotton mill, in 2002, dissolving a subsidiaryengaged in selling menswear owing to worsening business conditions and other factors in 2015, and thecomplete exit from the men’s suits manufacturing business at the joint venture factory in China in 2017.
On the other hand, amid the protracted slump in the domestic textile industry, the Company began
developing “SUN TO MOON Kakitagawa,” a large commercial facility with close regional ties, on the siteof the Company’s former Mishima Plant in Sunto, Shizuoka Prefecture in 1997, and at present, thecommercial facility business has developed into the Company’s main source of earnings. In March 2018,
we launched Stage 4 Development and in March 2020 opened “SUN TO MOON Oasis,” a new mall withthree floors and approximately 7,000 square meters of leasable space, and make further contributions toregional development.
In addition, in regard to the bedding manufacturing business, the predecessor to the current health carebusiness, the Company launched this business in the Suzuka Plant in 1980, and focused on new businessdevelopment from 1990 to 1991, including establishing a bedding products sales subsidiary andestablishing a bedding products manufacturing subsidiary in Tokamachi, Niigata Prefecture, and engaged
in an integrated manufacturing and sales business over many years. Subsequently, in 2014, the Company
further developed the bedding business in anticipation of the aging society, and has established a new
Health Care Business Headquarters focused on the three areas of “health products, health and medical
devices, and health foods,” in which further growth may be expected. In 2017, the Company implemented
initiatives for the development of a society with a long and healthy lifespan, including conducting a capitaland business alliance with Ito Co., Ltd., a medical device manufacturer. Moreover, we acquired the healthcare business from the textile trading company WATEX Co., Ltd. in March 2019 and expanded thespectrum of our businesses.
Furthermore, to further progress strategies in all businesses, in 2017, the Company entered into a
capital and business alliance with First Brothers Co., Ltd., which is listed on the First Section of the Tokyo
Stock Exchange, and its subsidiaries, and continues initiatives aimed at further developing its businesses.
As a result, we recorded positive profit attributable to owners of parent for six consecutive fiscal years
up to the fiscal year under review as we move forward to further improve corporate value.
At present, the Company is implementing the following measures, based on the “Breakthrough 2024 –PROGRESS IN THE NEW NORMAL mid-term management plan” started in April 2021.
Firstly, to cope with the market changes in the “new normal” post-COVID-19, the Company plans toreview its business portfolio and promote a shift to operations with better profitability and future prospects.
While continuing to focus management resources on the commercial facility business, the pillar of
earnings, the Company will scale down on manufacturing and sales in part of the apparel OEM market andof conventional bedding products with low functionality, which are showing a delay in recovery of the16market under the impact of COVID-19. At the same time, the Company will further promote the shift togender-free apparel OEM mainly targeting working women and sales of highly functional health careproducts. In doing so, the Company will focus on business development in line with the Sustainable
Development Goals (SDGs) while maintaining a firm awareness of ESG (environmental, social, andgovernance) and other concepts. The Company will promote businesses, steadily capturing new business
opportunities under the new normal by providing best solutions to customers stretching beyond theboundaries of sectors as “All Daitobo,” and making use of non-face-to-face channels such as theCompany’s own e-commerce website.
An overview for our main business strategies is as follows.
A. Response to changes in the market post-COVID-19
1) New business development under the new normal is as follows:a. - Accumulate and enhance expertise for commercial facility operations in the new era- Further enhancement of the Company’s unique qualities by leveraging our close ties with thecommunity, which is our strength.
- Work on master leasing operations (sub-leasing of whole floors).
b. Pursue “Daitobo quality” that goes beyond the boundaries of business divisions- Respond to customer needs by mobilizing the All Daitobo technologies in health care andtextile.
c. Initiatives that ride on the wave of digitalization such as Internet-related business- Enhance our Daitobo Healthcare Shop and Shingu no Takumi (the art of bedding) websites.
- Strengthen B to C operations by leveraging social media, etc.
d. Manufacture Takumi no Ippin Shingu (select crafted bedding) with the Japan quality that will
gently resonate with the feelings of the elderly- Build a new brand image for the domestic Group factory (in Niigata)2) Businesses to be scaled down under the new normal are as follows.
We will scale down on business operations in markets deemed to have little future prospects.
a. Scale down on manufacturing and sales of low-functionality duvets and futons with markets
deemed unlikely to expand.
b. Scale down on OEM business operations that have low profitability and low added-value.
c. Constantly monitor credit risk to build a business portfolio with adequate credit.
The Company will work on the following in terms of business management.
3) Financial strategy- Strengthening financial management
The Company has accumulated commensurate interest-bearing debt as we proactively invest in
the commercial facility business. As such, we will continue to steadily cut down oninterest-bearing debt by methods such as setting targets for the indicator Net Debt to Equity Ratio(DER) and continuing to reinforce cash flow management.
4) Developing human resources- Strengthening organizational capabilities with focus on quality than quantity
While continuously raising the basic level of human resources company-wide, we will specificallymake efforts in developing professional human resources for the commercial facility business, andin development of female salespersons and female managers.
- Improving work-life balance
Taking into our stride the new-era perspective of remote working as the norm and improving
work-life balance, we will work on reinforcing organizational management and further improve
communication inside the Company.
5) Further enhancing governanceDue to the market restructuring of the Tokyo Stock Exchange, the market of listed stock issuers are
required to have a higher level of governance in the future. It has been announced that “allPrinciples of the revised Corporate Governance Code shall be adopted” especially in the Prime
Market. The Company has been striving to comply with the Corporate Governance Code and will
steadily respond to these changes in the environment and work on enhancing governance with more
effectiveness.
As a result of the above, the Group has overcome a long and difficult period and recorded positive
consolidated business results for six consecutive fiscal years under the current management team owing toour shareholders and various other stakeholders. From now on, in the new normal era, against the backdropof the history and traditions of the Company covering more than 125 years, the Group will utilize the abovemeasures and build on its management philosophy, “enterprising spirit” and “mindset of benefitting
17

ourselves and others,” to leverage its creative force and engage with unlimited possibilities. In this way, theGroup intends to achieve sustainable growth and enhance corporate value over the mid- to long-term, while
also becoming a company that serves a purpose in society, that is conscious of the environment, and thatvalues people’s happiness, and thereby contributing to the realization of SDGs and creating a better future
for Japan.
The source of the Company’s corporate value lies in the Group’s business partners, with whom theCompany has built relationships of trust over many years, and its employees, who have abundant experienceand expert skills, coming together to develop the Company’s businesses based on this history and theseachievements, and the Company believes that it is possible to protect and enhance corporate interests andshareholders’ common interests on an ongoing and sustainable basis by understanding these sources ofcorporate value when engaging in operations.
2. Status of corporate governance(1) Corporate governance systems
With the approach of prioritizing corporate value in management, the Company considers corporate
governance as one of the most important management issues, and its basic policy is to secure thetransparency, soundness, and legality of management in order to respond to the rapidly changing
management environment, while also prioritizing accountability toward all stakeholders, endeavoring toensure timely and appropriate information disclosure, making management more efficient anddecision-making more prompt, and enhancing management monitoring functions, and it has thus createdthe following corporate governance systems.
The Board of Directors is positioned as a body for management decision-making and supervision of
the execution of duties by Directors, and comprises Directors (excluding Directors serving as Audit andSupervisory Committee Members) and Directors serving as Audit and Supervisory Committee Members,
pursuant to provisions of the Articles of Incorporation, with a majority of Independent Outside Directors.
Meetings of the Board of Directors are held once per month, in principle, with extraordinary meetings ofthe Board of Directors also held as necessary, and in addition to deliberating, reporting on, anddetermining important management matters, the Board of Directors is also a system for appropriately
supervising the execution of business operations by Directors, including receiving reports on the statusof the execution of business operations.
The Audit and Supervisory Committee comprises four (4) Directors serving as Audit and Supervisory
Committee Member (including three (3) Independent Outside Directors). The Audit and Supervisory
Committee has one (1) full-time Audit and Supervisory Committee Member, and meetings of the Audit
and Supervisory Committee are held once per month, in principle, to audit the execution of business
operations by Directors, and create audit reports. In principle, Directors serving as Audit andSupervisory Committee Members conduct audits related to legality and validity through internal control
systems, and audits of the execution of duties by Directors, by attending meetings of the Board of
Directors and meetings of the Audit and Supervisory Committee, and the Director serving as full-time
Audit and Supervisory Committee Member attending meetings of the General Manager Committee andother important internal meetings. Additionally, Directors serving as Audit and Supervisory Committee
Members appropriately exchange views with the Internal Audit Office and hold an Internal Audit
Liaison Meeting once per month on a regular basis, while also maintaining close cooperation with the
Accounting Auditor by ensuring opportunities for consultation and analysis of important accounting
issues, in addition to regular accounting audits.
The Outside Officer Committee is a forum for active debate on effective advice for ensuring thesustainable growth of the Company and enhancing corporate value and suggestions regarding thesupervision of management, from a new, external perspective, and comprises only Independent Outside
Directors, with one (1) of the Independent Outside Directors, which constitute a majority of the
Directors, as the lead Outside Director.
The Advisory Committee is a forum for obtaining appropriate advice from Independent Outside
Directors when considering important matters, such as matters related to the nomination andremuneration of Directors and other senior executives, and is established under the Board of Directors,
with a majority of Independent Outside Directors.
The Internal Controls Committee meets once per month, in principle, and is chaired by the President
with the General Manager of the Internal Audit Office as Secretariat. It is attended by Directors(excluding Directors serving as Audit and Supervisory Committee Members), the Director serving as
full-time Audit and Supervisory Committee Member, and officers and employees of the rank of General
Manager and above, and broadly consults and reports on the status of matters related to risk management,
matters related to internal controls, and related issues.
18In addition, the General Manager Committee comprises Directors (excluding Directors serving as
Audit and Supervisory Committee Member), Executive Officers, the Director serving as full-time Audit
and Supervisory Committee Member, and officers and employees of the rank of General Manager andabove, and meets once per month to consider important issues related to management policies andimportant matters related to the execution of business operations. For Group companies, meetings areheld once per month, in principle, to receive reports on the progress of business operations.
(2) Status of creation of internal control systems
The Company has formulated a basic policy regarding the creation of internal control systems, andtakes steps to establish systems to ensure the appropriateness of corporate business operations, andstrengthen internal control functions. In addition, the General Manager of the Business Management
Headquarters leads efforts by the Group as a whole to promote the creation of internal controls related tofinancial reporting in accordance with the Financial Instruments and Exchange Act, and other measures.
(3) Status of creation of risk management systems
The Company discusses important legal issues and matters related to compliance with its legal
advisers, etc., and utilizes external experts as necessary to prevent violations of laws and regulations andthe Articles of Incorporation in advance. In addition, the Company has strengthened its corporate
governance systems, including making it such that in the event a Director discovers a violation of laws
and regulations or the Articles of Incorporation by another Director, he or she shall immediately report itto the Audit and Supervisory Committee and the Board of Directors. Regarding information
management, the Company has formulated a basic policy on information security and regulations on
information security and management, and stores and manages it in an appropriate, secure manner. In
addition, in the event of a large earthquake or other disaster, the Company shall respond in an organized,
planned manner in accordance with basic rules on disaster prevention and crisis management, in order tominimize harm.
III Initiatives to prevent decisions about the Company’s financial and business policies being
controlled by inappropriate persons in light of the basic policy
1. Enhancement of corporate value and the realization of corporate interests and shareholders’ common
interests(1) Existence of a large-scale purchase of share certificates, etc. that violates the enhancement ofcorporate value and the realization of corporate interests and shareholders’ common interests
As described above, the Group intends to focus all its efforts on enhancing corporate value andrealizing corporate interests and shareholders’ common interests, but in capital markets in recent years, itcannot be denied that there has been a trend toward sudden large-scale purchases of share certificates,etc. being forced through without giving sufficient time to shareholders for consideration, or going
through processes such as sufficient consultation and agreement with the management team of the target
company.
Essentially, even if it does not have the approval of the management team of the target company, alarge-scale purchase of share certificates, etc. should not be rejected on the occasion that it leads to theefficient utilization of corporate assets and enhances corporate value and realizes corporate interests andshareholders’ common interests.
However, among these large-scale purchases, it cannot be denied that there may be some that are
so-called “abusive purchases,” whereby it is clear that corporate value, corporate interests, andshareholders’ common interests will be considerably harmed, such as those that are not intended toproperly participate in corporate management and whose objective is solely to cause the stock price ofthe company to increase and force parties related to the target company, etc. to repurchase sharecertificates, etc. at a high price.
In addition, as mentioned above, the Company firmly believes that maintaining good relationships
with various stakeholders, including maintaining and developing relationships of trust built withcustomers over many years, will lead to enhancement in the corporate value of the Company over themid- to long-term, and the realization of shareholders’ interests. If a large-scale purchaser of theCompany’s share certificates, etc. does not fully understand this and will not protect and enhance thesefactors over the mid- to long-term, then the corporate value of the Company, and corporate interests andshareholders’ common interests will be considerably harmed.

19

(2) Necessity of renewal of this Plan
Freedom of transfer is a basic principle of the Company’s share certificates, etc., and they are freely
traded by many investors on stock exchanges. Accordingly, whether or not to accept a proposal
regarding a large-scale purchase of the Company’s share certificates, etc. should ultimately be entrusted
to the judgment of shareholders.
In the event of a large-scale purchase being conducted in conditions such as those described in theabove item (1), the Company believes it is essential that appropriate and sufficient information isprovided by both the large-scale purchaser and the Board of Directors of the Company, and thatsufficient time is ensured for consideration, in order for shareholders to appropriately assess whether or
not the large-scale purchase will contribute to enhancing the corporate value of the Company andrealizing corporate interests and shareholders’ common interests, and to decide whether or not to accept
the proposal regarding the large-scale purchase of the Company’s share certificates, etc. In addition, inthe event that the Board of Directors of the Company judges that it is necessary to change or improve theterms or method of the large-scale purchase from the perspective of protecting or enhancing thecorporate value of the Company and corporate interests and shareholders’ common interests, theCompany believes it will be necessary to negotiate with the large-scale purchaser and present analternative proposal to shareholders, etc., and so the necessary time should be sufficiently ensured forthat purpose.
Based on this approach, the Company has decided to renew this Plan as follows, with necessary
amendments to the Former Plan. This Plan requires compliance with this Plan from the large-scalepurchaser, and also sets forth countermeasures if the large-scale purchaser does not comply with thisPlan, and if it is judged that the large-scale purchase will considerably harm the corporate value of theCompany or corporate interests and shareholders’ common interests.
At present, the Company has not received any proposal relating to a large-scale purchase. In addition,
the status of the Company’s major shareholders as of March 31, 2021 is shown on Attachment 1.
2. Content of this Plan
(1) Overview of this Plan
Under this Plan, large-scale purchasers shall be required to follow prescribed procedures when
conducting a large-scale purchase, and, in principle, a gratis allotment of subscription rights to sharesshall be made to shareholders as a countermeasure against a large-scale purchase if the large-scalepurchaser does not comply with these procedures, and even in the event that these procedures arefollowed, if it is judged that the large-scale purchase will considerably harm the corporate value of theCompany, and corporate interests and shareholders’ common interests. In addition, othercountermeasures may be used if it is judged that it is appropriate to activate other countermeasurespermitted by the Companies Act and other laws and regulations, and the Articles of Incorporation of theCompany.
For the subscription rights to shares to be allotted in accordance with this Plan (hereinafter, the“Subscription Rights to Shares”), the Company intends to attach provisions including: 1) exercise terms
prohibiting their exercise by the large-scale purchaser and his or her related parties; and 2) acquisition
clauses whereby the Company may deliver shares in the Company to shareholders who are not thelarge-scale purchaser or his or her related parties in exchange for the acquisition of the Subscription
Rights to Shares by the Company.
If a gratis allotment of Subscription Rights to Shares is conducted, there is a possibility that the
proportion of voting rights held by the large-scale purchaser and his or her related parties against the
total voting rights of the Company may be greatly diluted as a result of these exercise terms andacquisition clauses.
(2) Procedures for renewal of this Plan ― approval at this Annual Meeting
The Former Plan was reintroduced upon receiving approval at the 198th Annual General Meeting of
Shareholders of the Company held on June 27, 2018, based on the provisions of Article 19 of theCompany’s Articles of Incorporation. In order to appropriately reflect the will of shareholders, therenewal of this Plan shall is also subject to receiving approval at this Annual Meeting, based on the same
Article of the Articles of Incorporation.
(3) Procedures related to the activation of this Plan
1) Applicable large-scale purchases
This Plan shall apply to purchases of the Company’s share certificates, etc., other transfers withconsideration, and other similar actions, and their proposals by persons (hereinafter, “specified
20

shareholders”) for whom, as a result of the purchase, other transfer with consideration, or othersimilar action pertaining to more than a certain number of the Company’s share certificates, etc.,
either:i. the total ownership ratio1 of share certificates, etc.2 pertaining to the Company’s sharecertificates, etc. held3 by a holder4 of the Company’s share certificates, etc.; orii. the total ownership ratio 5 of share certificates, etc. pertaining to the Company’s sharecertificates, etc. that are held6 by or that will be held by the person conducting a purchase of
the Company’s share certificates, etc.7, other transfer with consideration, or other similaraction, and the Company’s share certificates, etc. held by his or her specially related parties8
will be 20% or more (however, this excludes those previously approved by the Board of Directors of
the Company; hereinafter, a purchase, etc. to which this Plan applies shall be referred to as a“large-scale purchase,” and a person conducting or attempting to conduct a large-scale purchase shallbe referred to as a “large-scale purchaser”).
2) Disclosure under this Plan and requests for information from the large-scale purchaser
The Company shall make timely disclosure regarding this Plan in accordance with all theregulations set forth by Tokyo Stock Exchange, Inc. and Nagoya Stock Exchange, Inc., and shall also
post this Plan on the Company’s website (http://www.daitobo.co.jp/).
Excluding cases otherwise provided for by the Board of Directors of the Company, the large-scalepurchaser shall provide a purchase proposal with the information necessary for consideration of thedetails of the large-scale purchase set forth in each of the items below (hereinafter, referred to as the“Required Information”) to the Board of Directors of the Company ahead of the implementation of
the large-scale purchase, written in Japanese and including a statement of intent to the effect that heor she shall comply with the procedures set forth in this Plan.
Furthermore, a certified copy of the commercial register, a copy of the Articles of Incorporation,and other documents proving the existence of the large-scale purchaser shall be attached to thepurchase proposal.
If the Board of Directors of the Company receives the above purchase proposal, it shall promptly
provide it to the Independent Committee set forth in the below item 4). In the event that the Board of
Directors of the Company reasonably judges that the information provided by the large-scalepurchaser is insufficient for the assessment of shareholders and the evaluation and consideration of
the Board of Directors of the Company, etc., in light of the content or format, etc. of the large-scalepurchase, the large-scale purchaser shall provide additional information separately requested by the
Board of Directors of the Company, in Japanese (however, the Board of Directors of the Company
shall not request the provision of additional information that exceeds a level necessary forshareholders to appropriately judge the appropriateness of the purchase, and for the evaluation andconsideration of the Board of Directors of the Company, etc., taking into consideration such factors
as the characteristics of the large-scale purchaser, the details of the large-scale purchase proposed by
the large-scale purchaser, and the content and nature of the Required Information).
Such requests for the provision of additional information shall be made within ten business daysof receiving the purchase proposal as described above or subsequently receiving any additional
information, after determining an appropriate deadline for a reply (of up to 30 days, in principle).
i. Details of the large-scale purchaser and his or her group (including joint holders, speciallyrelated parties, and (in the case of funds) members and other constituents) (including specificname, capital structure, business content, financial details, and experience in businesses of the
1 Refers to the ownership ratio of share certificates, etc. as provided for in Article 27-23, Paragraph 4 of the Financial Instruments and ExchangeAct. The same shall apply hereinafter.
2 Refers to share certificates, etc. as provided for in Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act. The same shallapply hereinafter.
3 Refers to holding as provided for in Article 27-23, Paragraph 4 of the Financial Instruments and Exchange Act. The same shall apply
hereinafter.
4 Refers to a holder as provided for in Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act, including persons deemedholders pursuant to Paragraph 3 of the same. The same shall apply hereinafter.
5 Refers to the ownership ratio of share certificates, etc. as provided for in Article 27-2, Paragraph 8 of the Financial Instruments and ExchangeAct. The same applies hereinafter unless otherwise provided for.
6 Refers to holding as provided for in Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Act. The same shall apply
hereinafter.
7 Refers to share certificates, etc. as provided for in Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Act. The same applies
in item ii below.
8 Refers to a specially related party as provided for in Article 27-2, Paragraph 7 of the Financial Instruments and Exchange Act. However, inregard to persons set forth in item 1 of the same, this shall exclude persons provided for in Article 3, Paragraph 2 of the Cabinet Office Orderon Disclosure Required for Tender Offer for Share Certificates, etc. by Person Other than Issuer. The same shall apply hereinafter.

21

same type as the Company’s businesses)
Number of the Company’s share certificates, etc. actually held by the large-scale purchaser
and his or her group, and the status of transactions in the Company’s share certificates, etc. by
the large-scale purchaser during the 60 days prior to the submission of the purchase proposaliii. The large-scale purchase objective (if the objective is to acquire control or participate inmanagement, portfolio investment or strategic investment, transfer the Company’s sharecertificates, etc. to a third party after the large-scale purchase, etc., make a material proposal,
etc. (refers to a material proposal, etc. as provided for in Article 27-26, Paragraph 1 of the
Financial Instruments and Exchange Act, Article 14-8-2, Paragraph 1 of the Order for
Enforcement of the same, and Article 16 of the Cabinet Office Order on Disclosure of the
Status of Large-Volume Holdings in Share Certificates) or any other objective, notice to that
effect and an overview thereof; furthermore, if there are multiple objectives, details of all
objectives shall be provided), method, and details (including the type and number of theCompany’s share certificates, etc. intended for acquisition in the large-scale purchase, theamount and type of consideration for the large-scale purchase, the timing of the large-scalepurchase, the structure of any related transactions, the legality of the method of large-scalepurchase, and the possibility of implementation of the large-scale purchase)iv. An overview of the calculation basis for the large-scale purchase price (including the facts
and assumptions used as the basis for calculation, the method of calculation, numerical data
used in the calculation, and the amount and basis for calculation of any synergies expected toarise as a result of related transactions)v. Backing for the large-scale purchase funds (including the specific name of any providers offunds (including de facto providers), method of raising funds, and details of any relatedtransactions)vi. Management policies pertaining to the Group after the large-scale purchase, management
candidates (including information regarding experience in businesses of the same type as thebusinesses of the Company and the Group), business plans, financial plans, capital policy,
dividend policy, and measures to utilize assets (however, in the event that the purchaseproposal by the large-scale purchaser is a cash purchase for 100% of the Company in which
no minority shareholders shall remain, a summary shall be sufficient for the provision of theinformation in this item)vii. Policies pertaining to the treatment of the Group’s employees, business partners, clients, andother stakeholders of the Group after the large-scale purchaseviii. Policies pertaining to the return of capital invested for the large-scale purchaseix. Whether there are any relationships with antisocial forces or terrorist organizations (regardlessof whether they are direct or indirect), and if there are any relationships, the details thereof
x. Any other information that the Board of Directors of the Company reasonably judges
necessary.
Furthermore, if the Board of Directors of the Company recognizes that a large-scale purchaser has
appeared, or if it receives a purchase proposal or additional information, the Board of Directors of theCompany shall promptly disclose information pertaining to those facts to shareholders. Information
pertaining to all or part of the content of the information provided to the Board of Directors of theCompany by the large-scale purchaser, etc. shall be disclosed to shareholders at the point that it isjudged necessary for the assessment of shareholders by the Board of Directors of the Company.
ii.

3) Procedures related to consideration by the Board of Directors of the Company
If the Board of Directors of the Company judges that the Required Information in the purchaseproposal submitted by the large-scale purchaser fulfills the standard necessary for shareholders toappropriately judge the appropriateness of the purchase, and for the evaluation and consideration of
the Board of Directors of the Company, etc. (including cases when the Board of Directors of theCompany judges that it has received information that is sufficient as the Required Information
together with the purchase proposal, owing to the submission of Required Information additionally
requested by the Board of Directors of the Company for the reason that the information submitted by
the large-scale purchaser was insufficient), then it shall promptly notify the large-scale purchaser andthe Independent Committee of that fact, together with the start and end of the Board of Directors
Evaluation Period described below, and shall disclose related information to shareholders in a timely
and appropriate manner. Within 60 days (for purchases of all of the Company’s share certificates, etc.
by tender offer where the consideration is cash (Japanese yen) only) or 90 days (for other large-scalepurchases) of the day following the dispatch of this notification to the large-scale purchaser
22

(hereinafter, this period of within 60 or 90 days shall be referred to as the “Board of Directors
Evaluation Period”), the Board of Directors of the Company shall carefully compile its opinion withregard to the large-scale purchase after sufficiently evaluating and considering the Required
Information provided, while obtaining the advice of third parties in an independent position from theCompany as necessary (including investment banks, securities firms, financial advisers, attorneys,
certified public attorneys, and other experts), and respecting the recommendation of the Independent
Committee set forth in the below item 4) to the maximum extent possible, and shall notify thelarge-scale purchaser, and disclose related information to shareholders in a timely and appropriatemanner. As necessary, the Board of Directors of the Company may also negotiate the terms andmethod of the large-scale purchase with the large-scale purchaser, and furthermore, present analternative proposal to shareholders as the Board of Directors of the Company.
Furthermore, if there are unavoidable circumstances regarding the Board of Directors of theCompany not reaching a resolution on whether to activate or not activate countermeasures within the
Board of Directors Evaluation Period, such as the Independent Committee not making a
recommendation on whether to activate or not activate countermeasures within the Board of
Directors Evaluation Period, then the Board of Directors may extend the Board of Directors
Evaluation Period within a necessary range of up to 30 days (calculated from the day after the final
day of the initial Board of Directors Evaluation Period), based on the recommendation of the
Independent Committee. If the Board of Directors of the Company resolves to extend the Board of
Directors Evaluation Period, it shall notify the large-scale purchaser and the Independent Committeeof the specific period of this extension and the reasons the extension is necessary, and shall also
disclose this information to shareholders in a timely and appropriate manner.
The large-scale purchaser may only commence the large-scale purchase after the Board of
Directors Evaluation Period has passed. However, if notification is received of a decision not toactivate countermeasures as set forth in the below item 7), then the large-scale purchaser may
conduct the large-scale purchase from the business day after the notification is received.
4) Independent Committee establishment
The Board of Directors of the Company will ultimately judge whether the procedures have been
followed in accordance with the rules set forth in this Plan, and, in the event that the rules set forth in
this Plan have been complied with, whether to implement certain countermeasures considerednecessary to protect and enhance the corporate value of the Company, and corporate interests andshareholders’ common interests, but in order to guarantee the reasonableness and fairness of that
judgment, the Company shall establish an Independent Committee as a body that is independent fromthe Board of Directors of the Company. The Independent Committee shall comprise three (3) to five(5) members, who shall be elected by the Board of Directors of the Company from among Outside
Directors, attorneys, licensed tax accountants, certified public accountants, academics, persons
familiar with investment banking operations, Directors of other companies, external parties withexperience as executives, etc.
Furthermore, the names and career summaries of the planned members of the Independent
Committee at the renewal of this Plan are as described in Attachment 2, “Names and Career
Summaries of Independent Committee Members.” An overview of the Independent Committee
regulations are described in Attachment 3, “Overview of the Independent Committee Regulations.”
In addition, information related to an overview of the judgment of the Independent Committee shallbe disclosed to shareholders in a timely and appropriate manner.
5) Procedures for the activation of countermeasures
When assessing the activation of countermeasures, the Board of Directors of the Company shallfollow the procedures below, in order to guarantee the reasonableness and fairness of the assessment.
First, ahead of the activation of countermeasures, the Board of Directors of the Company shallconsult the Independent Committee regarding the appropriateness of activating countermeasures, and,based on this consultation, the Independent Committee shall make a recommendation to the Board of
Directors of the Company regarding the appropriateness of activating countermeasures, after
obtaining the advice of third parties in an independent position from the Company, at the Company’s
expense, as necessary (including investment banks, securities firms, financial advisers, attorneys,
certified public accountants, and other experts). When judging whether or not to activate
countermeasures, the Board of Directors of the Company shall respect the recommendation of the
Independent Committee to the maximum extent possible.
In addition, when the Board of Directors of the Company activates countermeasures, it shall do so23

with a resolution to activate with the unanimous approval of all members, after obtaining theapproval of all Directors serving as Audit and Supervisory Committee Members. If the Board of
Directors of the Company makes such a resolution, it shall promptly disclose information related toan overview of the resolution and any other matters judged appropriate by the Board of Directors of
the Company to shareholders.
Furthermore, in addition to the above consultation with the Independent Committee, the Board of
Directors of the Company shall assess the appropriateness of activating countermeasures after
evaluating and considering, etc. the large-scale purchaser and the specific details of the large-scalepurchase, and the effect of the large-scale purchase on the corporate value of the Company andcorporate interests and shareholders’ common interests, etc., while obtaining the advice of third
parties in an independent position from the Company, as necessary (including investment banks,
securities firms, financial advisers, attorneys, certified public accountants, and other experts), basedon the Required Information submitted by the large-scale purchaser.
6) Conditions for the activation of countermeasuresi. If the large-scale purchaser conducts or attempts to conduct a large-scale purchase without
following the procedures set forth in this Plan
If the large-scale purchaser conducts or attempts to conduct a large-scale purchase without
following the procedures set forth in this Plan, then regardless of the specific terms or method, etc. ofthe large-scale purchase, the Board of Directors of the Company shall view the large-scale purchaseas considerably harming the corporate value of the Company and corporate interests andshareholders’ common interests, and shall implement the necessary and appropriate countermeasures
to protect and enhance the corporate value of the Company, and corporate interests and shareholders’common interests, while respecting the recommendation of the Independent Committee to the
maximum extent possible.
ii. If the large-scale purchaser conducts or attempts to conduct a large-scale purchase while following
the procedures set forth in this Plan
If the large-scale purchaser conducts or attempts to conduct a large-scale purchase while
following the procedures set forth in this Plan, then, in principle, the Board of Directors of theCompany shall not implement countermeasures against the large-scale purchase, even in cases when
it is opposed to the large-scale purchase and expresses its opposing opinion, presents an alternative
proposal, and provides an explanation to shareholders, etc. Shareholders shall judge whether or not to
accept the large-scale purchase proposal for the Company’s share certificates, etc. by the large-scalepurchaser, after considering the Required Information regarding the large-scale purchase, the opinionof the Board of Directors of the Company in regard to the Required Information, any alternative
proposal, etc.
However, even if the large-scale purchaser conducts or attempts to conduct a large-scale purchasewhile following the procedures set forth in this Plan, in the event that the Board of Directors of theCompany recognizes that the large-scale purchase based on the purchase proposal by the large-scalepurchaser will considerably harm the corporate value of the Company, and corporate interests andshareholders’ common interests, as a result of considering the content of the large-scale purchase by
the large-scale purchaser, consulting and negotiating with the large-scale purchaser, etc., then the
Board of Directors of the Company shall implement the necessary and appropriate countermeasures
to protect and enhance the corporate value of the Company and corporate interests and shareholders’common interests, while respecting the recommendation of the Independent Committee to the
maximum extent possible, regardless of the start or end of the Board of Directors Evaluation Period.
Specifically, if it is judged that it falls under any of the categories listed below, then, in principle, thelarge-scale purchase based on the purchase proposal shall be viewed as considerably harming thecorporate value of the Company, and corporate interests and shareholders’ common interests.
(i) If the aim of the purchase is to demand that shares are bought back at a high price;(ii) If the aim of the purchase is to realize the interests of the large-scale purchaser based on thesacrifice of the Company, such as acquiring important assets and technical information, etc. ata low cost;(iii) If the purchase is such that there will be clear harm to the corporate value of the Company andcorporate interests and shareholders’ common interests, owing to the appropriation of
corporate assets as collateral for debt or repayment funds;(iv) If the purchase is such that there will be clear harm to the corporate value of the Company andcorporate interests and shareholders’ common interests, owing to the disposal of high-value
24corporate assets and use of gains from the disposal to pay a temporarily high dividend, or takeadvantage of the increase in share price caused by the temporarily high dividend to sell sharesat a high price;(v) If the purchase is one where the purchase terms for the Company’s share certificates, etc. areconsiderably insufficient or inappropriate in light of the corporate value of the Company;(vi) If the purchase is one where shareholders may effectively be forced to sell share certificates,
etc., such as a tender offer whereby applications for the purchase of all share certificates, etc.
are not solicited in the initial purchase, and purchase terms for the second stage areunfavorable or not made clear;(vii) If the corporate value of the Company in the event that the large-scale purchaser acquires
control will be considerably diminished compared with the corporate value of the Company inthe event that the large-scale purchaser does not acquire control, in a comparison of mid- tolong-term future corporate value;(viii) If the large-scale purchaser is considerably inappropriate as a controlling shareholder of theCompany from the perspective of public order and good morals;(ix) If the purchase fulfills any of the following criteria, other than the above items:
a. If it is presumed in an objective and reasonable manner that there is a risk of considerable
harm to the corporate value of the Company, and corporate interests and shareholders’common interests;b. If it is presumed in an objective and reasonable manner that, if countermeasures are notactivated, considerable harm to the corporate value of the Company, and corporate interestsand shareholders’ common interests will be unavoidable, or that there is a risk thereof.
7) Decisions to activate or not activate countermeasures by the Board of Directors of the Company
In either case described in the above items 6) i. and ii., the Board of Directors of the Company
shall decide to activate or not activate countermeasures, while respecting the recommendation of the
Independent Committee to the maximum extent possible.
If the Board of Directors of the Company makes a decision to activate or not activate
countermeasures, it shall promptly notify the large-scale purchaser of an overview of the decision
and any other matters recognized as appropriate by the Board of Directors of the Company(hereinafter, a notification pertaining to a decision not to activate countermeasures shall be referred toas a “Non-activation Decision Notification”), and shall disclose related information to shareholders.
The large-scale purchaser may conduct the large-scale purchase after the Board of Directors
Evaluation Period has passed, or from the business day after the day a Non-activation Decision
Notification is received from the Board of Directors of the Company.
8) Reconsideration by the Board of Directors of the Company
Even after Board of Directors of the Company has made a decision regarding whether or notcountermeasures should be activated, if there are changes to the facts, etc. that formed the basis forthe decision, such as the large-scale purchaser changing the terms pertaining to the large-scalepurchase or canceling the large-scale purchase, then the Board of Directors of the Company may
deliberate the issue again after consulting with the Independent Committee, and make a decision
regarding the activation or cancellation of countermeasures, while respecting the recommendation of
the Independent Committee to the maximum extent possible.
If the Board of Directors of the Company makes such a decision, it shall promptly notify thelarge-scale purchaser of an overview of the decision and any other matters recognized as appropriateby the Board of Directors of the Company, and disclose related information to shareholders.
(4) Overview of countermeasures
In principle, the Board of Directors of the Company shall conduct a gratis allotment of Subscription
Rights to Shares in accordance with Attachment 4 “Important Information Regarding the Subscription
Rights to Shares,” as a countermeasure under this Plan. Subscription Rights to Shares shall be allotted toshareholders (however, this excludes the Company) listed or recorded in the final shareholder register ona certain day (hereinafter, the “Allotment Date”) determined by the Board of Directors of the Company
when resolving to conduct a gratis allotment of Subscription Rights to Shares, in a ratio determined by
the Board of Directors of the Company of one or more subscription right to shares per share held.
The amount of property (cash) to be contributed when exercising a Subscription Right to Shares(exercise price) shall be one (1) yen, and through the exercise of one (1) Subscription Right to Shares, anumber of common shares in the Company determined by the Board of Directors of the Company of one
25

(1) share or less (if adjusted, it shall be the number of shares after adjustment) shall be delivered toholders of the Subscription Rights to Shares (hereinafter, “Subscription Rights to Shares Holders”).
Furthermore, if the Subscription Rights to Shares are exercised and there are fractions amounting to lessthan one share in the number of shares to be delivered to the Subscription Rights to Shares Holders, theCompany shall treat fractions in accordance with applicable laws and regulations.
However, the specified shareholder and his or her related parties shall not be able to exercise theSubscription Rights to Shares. In addition to cases when the Subscription Rights to Shares are exercised,
the Company may also acquire the Subscription Rights to Shares in exchange for common shares in the
Company, from Subscription Rights to Shares Holders who are not the specified shareholder or his or
her related parties, based on certain conditions, in accordance with the acquisition clause attached to the
Subscription Rights to Shares. Furthermore, the Company may also acquire all of the Subscription
Rights to Shares without consideration, based on certain conditions.
Furthermore, the approval of the Board of Directors of the Company shall be required for theacquisition of the Subscription Rights to Shares by transfer.
As described in the above item (1), in addition to a gratis allotment of Subscription Rights to Shares,
if it is judged that the activation of other countermeasures permitted by the Companies Act, other laws
and regulations, and the Articles of Incorporation of the Company is appropriate, then those othercountermeasures may be used.
If the Board of Directors of the Company activates countermeasures under this Plan, the Board of
Directors of the Company shall disclose information related to matters recognized as appropriate by the
Board of Directors of the Company to shareholders in a timely, appropriate manner.
(5) Effective period of this Plan, discontinuation, and changes
The effective period of this Plan shall be from the conclusion of this General Meeting of
Shareholders until the conclusion of the Annual General Meeting of Shareholders of the Company forthe final fiscal year ending within three (3) years from that time. However, even prior to the end of theeffective period, if 1) a resolution is made at a General Meeting of Shareholders of the Company todiscontinue this Plan, or 2) a resolution is made by the Board of Directors of the Company todiscontinue this Plan, then this Plan shall be discontinued at that point.
In addition, even during the effective period of this Plan, the Board of Directors of the Company may
make technical amendments or changes to this Plan within the scope delegated in the resolution at thisAnnual Meeting, taking into consideration the opinion of the Independent Committee, as necessary.
Furthermore, the provisions of laws and regulations in effect as of May 14, 2021 form the basis for thisPlan, so in the event that it is necessary to make amendments to the provisions of this Plan owing to the
new establishment or abolition of laws and regulations, etc. on or after this date, the appropriate words
and phrases in this Plan shall be deemed to be replaced within a range that does not violate the basic
approach of this Plan, in accordance with the intent of the laws and regulations.
If this Plan is discontinued, amended, or changed, information related to the fact of the
discontinuation, amendment, or change, and any other matters recognized as appropriate by the Board of
Directors of the Company shall be promptly disclosed.
In addition, regarding the content of this Plan after the conclusion of the Annual General Meeting of
Shareholders of the Company for the final fiscal year ending with three (3) years of the conclusion ofthis General Meeting of Shareholders, the Company intends to confirm the will of shareholders
concerning approval or rejection for the continuation and renewal of this Plan, or the introduction of aplan with new content, etc., after making the necessary amendments.
3. Effect on shareholders and investors(1) Effect on shareholders and investors when this Plan is renewed
Countermeasures will not actually be activated when this Plan is renewed, so there will be no direct,
specific impact on the statutory rights and economic interests of shareholders and investors.
(2) Effect on shareholders and investors from the gratis allotment of Subscription Rights to Shares
Subscription Rights to Shares shall be allotted gratis to shareholders on the Allotment Date in a ratio
determined by the Board of Directors of the Company of one (1) or more per share held, and therefore,
assuming the Subscription Rights to Shares are exercised, no dilution shall occur in the value of shares
held by a shareholder in the Company as a whole.
Essentially, if a shareholder does not exercise the Subscription Rights to Shares during the exercise
period of the Subscription Rights to Shares, then the value of his or her shares held in the Company shallbe diluted owing to the exercise of Subscription Rights to Shares by other shareholders. However, based26

on a decision of the Board of Directors of the Company, the Company may acquire Subscription Rights
to Shares from shareholders who are not forbidden to exercise the Subscription Rights to Shares inaccordance with the important information regarding the Subscription Rights to Shares and delivercommon shares in the Company in exchange, through the procedures described below in item (4) 2). If
the Company performs these acquisition procedures, shareholders who are not forbidden to exercise theSubscription Rights to Shares in accordance with the important information regarding the Subscription
Rights to Shares shall receive common shares in the Company without exercising the Subscription
Rights to Shares or making payment of cash equivalent to the exercise price, and dilution in the value
per share held will occur, but no dilution shall occur in the value of shares held by a shareholder in the
Company as a whole.
Furthermore, if, after the shareholders who should receive the gratis allotment of Subscription Rights
to Shares have been confirmed, the Company cancels the gratis allotment of Subscription Rights toShares or acquires the Subscription Rights to Shares that were allotted gratis without consideration, no
dilution in the per-share value of the Company’s shares shall occur, and therefore investors who haveconducted a transaction based on the assumption that a dilution in the per-share value of the Company’s
shares would occur may suffer a commensurate loss caused by fluctuations in the share price.
(3) Effect on shareholders and investors when the Subscription Rights to Shares are exercised or acquired
after the gratis allotment of Subscription Rights to Shares is conducted
The attachment of discriminatory terms regarding the exercise and acquisition of the Subscription
Rights to Shares is planned, and therefore it is expected that when exercising or acquiring the
Subscription Rights to Shares the statutory rights and economic interests of the specified shareholder
and his or her related parties shall be diluted, but even in this case, no direct, specific effect is expectedon the statutory rights and economic interests pertaining to shares in the Company held by shareholders
and investors who are not the specified shareholder or his or her related parties. Please note that thetransfer of the Subscription Rights to Shares shall be restricted and therefore, if common shares in the
Company are delivered to shareholders as a result of the exercise of the Subscription Rights to Shares ortheir acquisition by the Company on or after the Allotment Date, the return of invested capital bytransfer in regard to the portion of the value of shares held in the Company by shareholders attributable
to the Subscription Rights to Shares may be restricted during the period until the Company’s commonshares are recorded in shareholders’ book-entry accounts.
(4) Procedures required of shareholders accompanying the gratis allotment of Subscription Rights toShares, etc.
1) Procedures for the exercise of the Subscription Rights to Shares
The Company shall, in principle, send to shareholders listed or recorded in the final shareholder
register on the Allotment Date the exercise request form for the Subscription Rights to Shares (in aform prescribed by the Company that includes the details and number of Subscription Rights toShares to be exercised, necessary matters such as the date of exercise of the Subscription Rights toShares and the book-entry account for recording the Company’s shares (excluding special accounts),
representations and warranties regarding matters such as the fact that the shareholder fulfills theconditions for exercising the Subscription Rights to Shares, indemnity clauses, and other covenants),
and other documents necessary for the exercise of the Subscription Rights to Shares. After thegratis allotment of Subscription Rights to Shares, a number of common shares in the Company
determined by the Board of Directors of the Company of one (1) share or less per Subscription Rightto Shares (if adjusted, it shall be the number of shares after adjustment) shall be delivered toshareholders who submit the necessary documents during the exercise period and make payment ofone (1) yen per Subscription Right to Shares to the payment handling location.
Furthermore, please note that common shares in the Company delivered as a result of the exerciseof Subscription Rights to Shares may not be recorded in special accounts owing to the provisions of
the Act on Book Entry of Corporate Bonds and Shares, so when exercising the Subscription Rights toShares, shareholders must open a securities account or other book-entry account.
2) Procedures for the acquisition of the Subscription Rights to Shares by the Company
If the Board of Directors of the Company decides to acquire the Subscription Rights to Shares, theCompany shall acquire the Subscription Rights to Shares after the Board of Directors passes a
resolution and a public announcement is made to subscription rights to shares holders, for eachacquisition clause if there are multiple acquisition clauses, in accordance with the procedures set
forth in laws and regulations. In addition, if the Company decides to deliver common shares in the27Company to shareholders in exchange for acquiring the Subscription Rights to Shares, it shallpromptly deliver the shares.
Furthermore, in this case, these shareholders may be required to separately submit a document in
a form prescribed by the Company that includes representations and warranties regarding matterssuch as the fact that he or she is not the specified shareholder or a related party, indemnity clauses,
and other covenants.
In addition to the above, the Company shall disclose or notify shareholders of the details of themethod of allotment, method of exercise, and the method of acquisition of the Subscription Rights toShares after the Board of Directors of the Company has made a decision to implement the gratis
allotment of Subscription Rights to Shares.
IV Reasonableness of this Plan (the fact that this Plan is consistent with the basic policy, will notharm the common interests of the Company’s shareholders, and does not have the objective of
maintaining the positions of the Company’s officers, and the reasons thereof)
For the reasons below, the Board of Directors of the Company believes that this Plan is consistent withthe basic policy described in the above item I, will not harm the common interests of the Company’s
shareholders, and does not have the objective of maintaining the positions of the Company’s officers.
1. Fully satisfies the requirements of the Guidelines Regarding Takeover Defense, etc.
This Plan fully satisfies the three principles set forth in the “Guidelines Regarding Takeover Defense
for the Purpose of Protection and Enhancement of Corporate Value and Shareholders’ Common Interests”
announced by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005(“the principle of protecting and enhancing corporate value and the interests of shareholders as a whole,”“the principle of prior disclosure and shareholder’ will,” and “the principle of ensuring the necessity andreasonableness”), and is also consistent with the intent of all regulations pertaining to the introduction of
takeover defense measures set forth by Tokyo Stock Exchange, Inc.
Furthermore, this Plan also takes into consideration the content of the “Takeover Defense Measures inLight of Recent Environmental Changes” report by the Corporate Value Study Group established in the
Ministry of Economy, Trade and Industry, announced on June 30, 2008.
2. Renewed with the objective of protecting and enhancing corporate value and corporate interests andshareholders’ common interests
This Plan shall be renewed with the objective of protecting and enhancing the corporate value of theCompany and corporate interests and shareholders’ common interests by securing the necessary
information and time to allow shareholders to make a judgment of whether or not to accept a proposal
regarding a large-scale purchase if a large-scale purchase for the Company’s share certificates, etc. isconducted, and for the Board of Directors of the Company to present an alternative proposal toshareholders and conduct negotiations with the large-scale purchaser, etc., as described in item III above.
3. Prioritizes the will of shareholders
In order to ensure an opportunity to appropriately reflect the will of shareholders in its renewal, therenewal of this Plan shall be subject to receiving the approval of shareholders at this Annual Meeting. As
described in the above item III 2. (2), this Plan is hereby submitted in this Proposal at this Annual Meeting
requesting approval, and in the event that this Proposal is not approved, this Plan shall not be renewed.
Furthermore, if a resolution is passed to discontinue this Plan at a General Meeting of Shareholders of theCompany, even prior to the end of the effective period of this Plan, then this Plan shall be discontinued atthat point, so in that sense, the will of shareholders shall be reflected not just in the renewal of this Plan,
but also in its continuation.
In addition, the activation conditions of countermeasures based on this Plan shall be specificallyestablished depending on the individual case and presented to shareholders, based on the assumption thatshareholders shall entrust the judgment of whether to activate or not activate the countermeasures to theBoard of Directors. Accordingly, the will of shareholders shall be reflected in the activation ofcountermeasures in accordance with these activation conditions.
4. Prioritizes the judgment of highly independent external parties
As described in the above item III 2. (3) 4), when renewing this Plan, the Company has established an
Independent Committee as a body that is independent from the Board of Directors, in order to guarantee
the reasonableness and fairness of judgments of the Board of Directors of the Company.
In this way, a mechanism is ensured whereby this Plan shall be implemented in a manner that is28

consistent with the corporate value of the Company and corporate interests and shareholders’ common
interests, as the arbitrary activation of countermeasures based on this Plan by the Board of Directors of theCompany shall be prevented by their making a decision while respecting the recommendation of the
Independent Committee to the maximum extent possible, and information regarding an overview of thejudgment of the Independent Committee shall be disclosed to shareholders in a timely and appropriatemanner.
5. Establishes reasonable and objective requirements
As described in the above item III 2. (3), a mechanism is ensured whereby arbitrary activation by the
Board of Directors of the Company will be prevented, as this Plan is designed such that countermeasures
will not be activated unless reasonable and objective requirements set forth in advance are fulfilled.
6. Has a capability to obtain advice from third party experts in an independent position
As described in the above items III 2. (3) 3) and 5), if a large-scale purchaser appears, the Board of
Directors and the Independent Committee may obtain the advice of third parties in a position that is
independent from the Company, at the Company’s expense (including investment banks, securities firms,
financial advisers, attorneys, certified public accountants, and other experts). Therefore, a mechanism isensured whereby the fairness and reasonableness of judgments by the Board of Directors and theIndependent Committee are more firmly guaranteed.
7. Not dead-hand or slow-hand type takeover defense measures
As described in the above item III 2. (5), this Plan may be discontinued at any time by resolution of theBoard of Directors, which comprises Directors elected at the General Meeting of Shareholders of theCompany, and therefore does not constitute dead-hand type takeover defense measures, whose activation
may not be prevented, even if a majority of the members of the Board of Directors are replaced.
In addition, in accordance with regulations on the term of office of Directors in the Companies Act inrelation to a Company with Audit and Supervisory Committee, the term of office of Directors (excluding
Directors serving as Audit and Supervisory Committee Members) is one (1) year, and that of Directors
serving as Audit and Supervisory Committee Members is two (2) years, and the Company does not use astaggered term system, and therefore this Plan does not constitute slow-hand type takeover defense
measures, whose activation requires time to prevent, as all members of the Board of Directors cannot be
replaced at one time.

29

(Attachment 1)
Status of Shareholders (as of March 31, 2021)
1. Total number of authorized shares
2. Total number of issued shares
3. Number of shareholders
4. Major Shareholders (top ten)

96,000,000 shares
30,000,000 shares (including 68,749 treasury shares)
13,629Name

Number of shares

The Master Trust Bank of Japan, Ltd. (Trust Account)
844,400
First Brothers Co., Ltd.
682,000
JPMBL RE NOMURA INTERNATIONAL PLC 1 COLL
567,100
EQUITY
SEED CO., LTD.
501,000
Developer Sanshin inc.
500,000
Custody Bank of Japan, Ltd. (Trust Account 5)
474,500
Custody Bank of Japan, Ltd. (Trust Account 6)
430,500
Daiwa Securities Co. Ltd.
374,400
Shinyo Co., Ltd.
280,000
Custody Bank of Japan, Ltd. (Trust Account 2)
265,000(Note) The Company has 68,749 treasury shares apart from the shares above.

30

Holding ratio
against issued
shares (%)
2.81
2.27
1.89
1.67
1.66
1.58
1.43
1.24
0.93
0.88

(Attachment 2)
Names and Career Summaries of Independent Committee Members
Name:
Date of birth:
Career summary:

Yasunobu Sawada
January 9, 1953
April 1976
Joined the Ministry of Labour (currently Ministry of Health, Labourand Welfare)
January 1989
Joined A.T. Kearney, Inc. (currently A.T. Kearney K.K.)
assigned to Tokyo Office
October 1997
Director of Practice Management
April 2002
Executive Director of Enterprise IG Japan K.K. (currently Brand
Union/WPP Group)
July 2003
Representative Director of VieBrand Consulting Inc. (current post)
June 2015
Appointed as Outside Director of Daito Woolen Spinning &Weaving Company, Limited (currently Daitobo Co., Ltd.)(to the present)(Note)

No special interest exists between Mr. Yasunobu Sawada and the Company.
Furthermore, Mr. Yasunobu Sawada is an Outside Director of the Company, and theCompany has designated him as an independent officer stipulated by the Tokyo Stock
Exchange and Nagoya Stock Exchange, and registered him with the Exchanges.

Name:
Date of birth:
Career summary:

Haruki Iinuma
April 19, 1948
April 1976
April 1978
June 2011
June 2016(Note)

Registered as an attorney
Established IINUMA LAW OFFICE (current position)
Appointed as Part-time Corporate Auditor of Daito Woolen
Spinning & Weaving Company, Limited (currently Daitobo Co.,Ltd.)
Appointed as Director serving as Audit and Supervisory Committee
Member of Daito Woolen Spinning & Weaving Company, Limited(currently Daitobo Co., Ltd.)(to the present)

No special interest exists between Mr. Haruki Iinuma and the Company.
Furthermore, Mr. Haruki Iinuma is an Outside Director of the Company, and theCompany has designated him as an independent officer stipulated by the Tokyo Stock
Exchange and Nagoya Stock Exchange, and registered him with the Exchanges.

31Name:
Date of birth:
Career summary:

Kakuji Takano
April 7, 1940
April 1963
May 1968
May 1981
December 1996
June 2001
April 2007
June 2007
October 2008
July 2010
June 2014

Joined Kohkoku Chemical Industry Co., Ltd. (currently ACHILLESCORPORATION)
Joined Shoichi Ikeda Audit Corporation (currently Ernst & Young
ShinNihon LLC)
Established Takano Sogo Accounting Firm
Appointed as Representative Partner of Century Audit Corporation(currently Ernst & Young ShinNihon LLC)
Left Century Audit Corporation
Appointed as Outside Corporate Auditor of MARUZEN CO., LTD.
Appointed as Outside Corporate Auditor of NIPPON SHUPPANHANBAI INC.
Appointed as Councilor of Kanagawa Institute of Technology,
Ikutoku Gakuen, Incorporated Educational Institution (current
position)
Appointed as Managing Partner of Certified Public Tax
Accountant’s Co. Takano Sogo Accounting Firm and Takano Sogo
Group in line with organizational changes (current position)
Appointed as Outside Auditor of SOURCENEXT Corporation(current position)(to the present)

32

(Attachment 3)
Overview of the Independent Committee Regulations
Article 1

Along with the introduction and renewal of measures to respond to a large-scale purchase of theCompany’s share certificates, etc. (takeover defense measures; hereinafter, “this Plan”), theCompany shall establish an Independent Committee. The objective of the Independent
Committee is to make a recommendation regarding activating or not activating countermeasures
based on this Plan, following consultation with the Board of Directors, and thereby contribute toensuring the fairness and neutrality of the judgment of the Board of Directors.

Article 2

The Independent Committee shall comprise three (3) to five (5) members, who shall be electedfrom among persons who fulfill the following conditions. Elected members shall enter into acontract with the Company when appointed that includes a duty of due care clause, etc. toward
the Company, etc., in principle.
1) Persons who are not currently, and have not previously been a Director (excluding Outside
Directors; the same shall apply hereinafter) or Corporate Auditor (excluding Outside
Corporate Auditors; the same shall apply hereinafter), etc. of the Company, or a subsidiary oraffiliate of the Company (hereinafter, collectively referred to as “the Company, etc.”);2) Persons who are not a relative within a certain range of someone who is currently or has
previously been a Director or Corporate Auditor, etc. of the Company, etc.;
3) Persons who have not been a Director or Corporate Auditor, etc. within the past three (3)years at a financial institution that has actual transactions with the Company, etc.;
4) Persons who have not been a Director or Corporate Auditor, etc. within the past three (3)years at a business partner that has more than a certain level of transactions with theCompany, etc.;
5) Persons who are not business partners of the Company, etc., and who do not have any special
interests with the Company, etc.;
6) Persons with more than a certain level of experience regarding corporate management,
experts, etc. (corporate managers with a record of achievement, persons familiar withinvestment banking operations, attorneys, certified public accountants, researchers mainly
researching the Companies Act, etc., and other equivalent persons).
2 Members shall be elected and dismissed by resolution of the Board of Directors. However,resolutions to dismiss members shall be made by approval of two thirds or more of the Directors
in attendance.
3 Unless otherwise provided for in the contract set forth in Paragraph 1, Clause 2, the term ofoffice of members shall be from the conclusion of the Annual General Meeting of Shareholders
for the fiscal year ended March 31, 2021 (however, for members elected during the period of thisPlan, it shall be from the time of election), until the conclusion of the Annual General Meeting of
Shareholders for the final fiscal year ending within three (3) years of the conclusion of the same
Annual General Meeting of Shareholders.

Article 3

In principle, the Independent Committee shall deliberate and make resolutions regarding thematters described in each of the following items, and shall make recommendations to the Boardof Directors of the content of those resolutions, together with the reasons thereof. The Board of
Directors must respect the recommendation of the Independent Committee to the maximum
extent possible.
1) Whether the large-scale purchaser has complied with the procedures set forth in this Plan;
2) Determination of whether the content of the purchase proposal will considerably harm thecorporate value of the Company or corporate interests and shareholders’ common interests,
and whether to activate or not activate countermeasures;3) Suspension of countermeasures;
4) Matters for which authority has been granted to the Independent Committee under this Plan,in addition to items 1) through 3);5) Matters about which the Board of Directors has consulted the Independent Committee inregard to this Plan;
6) Matters the Board of Directors has determined that the Independent Committee may
separately perform.

33

Article 4

In principle, resolutions of the Independent Committee shall be made by a majority of members
when all members are in attendance. However, in case of an accident occurring to the members
or if there are other special circumstances, resolutions shall be made a majority of members
when all members excluding these members are in attendance.

Article 5

The Independent Committee may obtain the advice of third parties in a position that is
independent from the Company, at the Company’s expense (including investment banks,
securities firms, financial advisers, attorneys, certified public accountants, and other experts).

Article 6

The Board of Directors may convene the Independent Committee by resolution.

Article 7

If the Board of Directors recognizes that it is necessary when the Independent Committee
conducts deliberations, it may appoint one (1) Director to attend meetings of the Independent
Committee, and request that the Independent Committee provides opportunities to explain
necessary matters.

Article 8

The Independent Committee must respond to the requests of the Board of Directors and explain
the reasons for making the recommendation and the basis thereof.

34

(Attachment 4)
Important Information Regarding the Subscription Rights to Shares
1. Shareholders eligible for the allotment
Subscription rights to shares shall be allotted to shareholders (however, this excludes the Company)
listed or recorded in the final shareholder register on a certain day (hereinafter, the “Allotment Date”)
determined by the Board of Directors of the Company when resolving to conduct the gratis allotment ofsubscription rights to shares described in this important information (hereinafter, the “Resolution for theGratis Allotment of Subscription Rights to Shares”), in a ratio determined by the Board of Directors of
the Company of one (1) or more subscription right to shares per share held.
2. Total number of subscription rights to shares to be issued
The total number of subscription rights to shares to be issued shall be a number determined by the Boardof Directors of the Company that is the same as or greater than the final total number of common sharesin the Company outstanding on the Allotment Date (excluding the number of common shares in the
Company held by the Company).
3. Effective date of the gratis allotment of subscription rights to shares
The effective date shall be determined in the Resolution for the Gratis Allotment of Subscription Rights
to Shares.
4. Type and number of shares underlying the subscription rights to shares
1) Type of shares underlying the subscription rights to shares
The type of shares underlying the subscription rights to shares shall be common shares in the
Company.
2) Number of shares underlying the subscription rights to shares
The number of shares underlying each subscription right to shares (hereinafter, the “applicable
number of shares”) shall be a number determined by the Board of Directors of the Company that is
one share or less.
However, if the applicable number of shares is adjusted based on Paragraph 5, the total number ofshares underlying the subscription rights to shares shall be adjusted in accordance with the applicable
number of shares after adjustment.
5. Adjustment to the number of shares underlying the subscription rights to shares
1) If, after the Allotment Date, the Company conducts a split or consolidation of the Company’s shares,
or a merger or corporate split, etc., the applicable number of shares shall be appropriately adjusted,taking into consideration the terms of the share split, consolidation, merger, or corporate split, etc.
2) When adjusting the applicable number of shares, the Company shall notify each subscription right toshares holder in advance in writing, or publicly announce by a method set forth in the Articles ofIncorporation, the fact of the adjustment and the reasons thereof, the applicable number of shares
before adjustment, the applicable number of shares after adjustment, the date the adjustment isapplied, and any other necessary matters. However, if the Company is unable to notify shareholders
or make a public announcement as described above by the day before the adjustment is applied, it
shall promptly do so on or after the day the adjustment is applied.
6. Amount to be paid for the subscription rights to shares
The subscription rights to shares shall be allotted gratis.
7. Amount of property to be contributed when exercising the subscription rights to shares
The amount of property (cash) to be contributed when exercising each subscription right to shares shallbe one (1) yen (hereinafter, the “exercise price”).
8. Exercise period of the subscription rights to shares
The exercise period of the subscription rights to shares shall be a period determined in the Resolution for
the Gratis Allotment of Subscription Rights to Shares, with the first day of the exercise period(hereinafter, the “Start Date of the Exercise Period”) also determined in the resolution. However, if theCompany acquires the subscription rights to shares based on Paragraph 10, the subscription rights toshares may not be exercised during the period from the date the Company makes a notification or public
35

announcement of the acquisition to the date of acquisition. If the final day of the exercise period is not abanking business day, the final day shall be the following banking business day.
9. Exercise conditions of the subscription rights to shares
1) Unless otherwise provided for, the following terms shall have the meanings set forth below in thisimportant information.
a. A “specified shareholder” refers to a person for whom, as a result of conducting a purchase of theCompany’s share certificates, etc., other transfer with consideration, or other similar actions, eitherof the following will be 20% or more:i. the total ownership ratio of share certificates, etc. pertaining to the Company’s sharecertificates, etc. held by a holder of the Company’s share certificates, etc.; orii. the total ownership ratio of share certificates, etc. pertaining to the Company’s sharecertificates, etc. that are owned by or that will be owned by the person conducting a purchaseof the Company’s share certificates, etc., other transfer with consideration, or other similaraction, and the Company’s share certificates, etc. held by his or her specially related parties.
b. “Share certificates, etc.” in item a. i refers to share certificates, etc. as provided for in Article
27-23, Paragraph 1 of the Financial Instruments and Exchange Act. The same applies hereinafter
unless otherwise provided for. “Share certificates, etc.” in item a. ii refers to share certificates, etc.
as provided for in Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Act.
c. A “holder” refers to a holder as provided for in Article 27-23, Paragraph 1 of the Financial
Instruments and Exchange Act, including persons deemed holders pursuant to Paragraph 3 of thesame.
d. To “hold” refers to holding as provided for in Article 27-23, Paragraph 4 of the Financial
Instruments and Exchange Act.
e. “Ownership ratio of share certificates, etc.” refers to the ownership ratio of share certificates, etc.
as provided for in Article 27-23, Paragraph 4 of the Financial Instruments and Exchange Act.
f. To “own” refers to ownership as provided for in Article 27-2, Paragraph 1 of the Financial
Instruments and Exchange Act.
g. A “specially related party” refers to a specially related party as provided for in Article 27-2,
Paragraph 7 of the Financial Instruments and Exchange Act. However, in regard to persons set
forth in Item 1 of the said paragraph, this shall exclude persons provided for in Article 3,
Paragraph 2 of the Cabinet Office Order on Disclosure Required for Tender Offer for Share
Certificates, etc. by Person Other than Issuer.
h. “Ownership ratio of share certificates, etc.” refers to the ownership ratio of share certificates, etc.
as provided for in Article 27-2, Paragraph 8 of the Financial Instruments and Exchange Act.
2) The persons set forth below may not exercise the subscription rights to shares:
The specified shareholder, his or her joint holders (refers to joint holders as provided for in Article
27-23, Paragraph 5 of the Financial Instruments and Exchange Act, and including persons deemedjoint holders pursuant to Paragraph 6 of the same), specially related parties, and persons judged by
the Board of Directors of the Company to be effectively controlled by such persons, to effectively
control such persons, to be under joint control by such persons, or to act in concert with such persons(however, this shall not apply to persons for whom the Board of Directors of the Company recognizes
that their acquiring or holding of the Company’s share certificates, etc. will not considerably harm thecorporate value of the Company, and corporate interests and shareholders’ common interests).
3) In accordance with the provisions of the above item 2), even if the holders of subscription rights toshares are unable to exercise the subscription rights to shares, the Company shall not bear any
liability for compensation or any other liability.
4) Partial exercise of any subscription right to shares is not permitted.
10. Acquisition of subscription rights to shares by the Company
1) If the Board of Directors of the Company judges that the acquisition of the subscription rights toshares is appropriate during the period from the day after the effective date of the gratis allotment of
the subscription rights to shares (however, if the Board of Directors of the Company determines a day
to replace this, it shall be the relevant day) until the day before the Start Date of the Exercise Period,
then the Company may acquire all subscription rights to shares without consideration on a day
determined by the Board of Directors of the Company.
2) On a day determined by the Board of Directors of the Company, during the period until the end of theexercise period of the subscription rights to shares described in Paragraph 8, the Company may
acquire the subscription rights to shares of persons who can exercise the subscription rights to shares36

in accordance with Paragraph 9, in exchange for the applicable number of common shares in the
Company per subscription right to shares.
11. Exercise of voting rights at the General Meeting of Shareholders by shareholders in the event that theseshareholders have newly acquired shares in the Company through the exercise of subscription rights toshares or the acquisition of subscription rights to shares by the Company
After the record date determined by the Company, shareholders who have newly acquired shares in the
Company through the exercise of subscription rights to shares or the acquisition of subscription rights toshares by the Company may exercise voting rights at the General Meeting of Shareholders.
12. Matters related to the transfer of the subscription rights to shares
The acquisition of the subscription rights to shares by transfer shall require the approval of the Board of
Directors of the Company.
13. Delivery of the subscription rights to shares and the terms thereof in the event of a merger, corporate
split, share exchange, or share transfer
The Board of Directors of the Company shall determine the above in the Subscription Rights to Shares
gratis allotment resolution.
14. Non-issuance of certificates for the subscription rights to shares
Certificates for the subscription rights to shares shall not be issued.
15. Increase in capital stock and legal capital surplus in the event new shares are issued owing to theexercise of subscription rights to shares
The amount by which capital stock and legal capital surplus will increase in the event that commonshares in the Company are issued owing to the exercise of subscription rights to shares shall be an
amount that is determined in the Subscription Rights to Shares gratis allotment resolution.
16. Subscription rights to shares exercise request and payment method
The subscription rights to shares shall be exercised through the submission of the prescribed exercise
request form (in a form prescribed by the Company that includes the details and number of subscription
rights to shares to be exercised, necessary matters such as the date of exercise of the subscription rights
to shares and the book-entry account for recording the Company’s shares (excluding special accounts),
representations and warranties regarding matters such as the fact that the shareholder fulfills theconditions for exercising the subscription rights to shares, indemnity clauses, and other covenants), after
filing out the necessary matters and completing sign and stamp, to the payment handling location during
the period set forth in Paragraph 8, together with any other documents separately required for the
exercise of the subscription rights to shares, as necessary, and other documents required at that time
under the Companies Act, the Financial Instruments and Exchange Act, and related laws and regulations(including the regulations, etc. set forth by the Japan Securities Dealers Association and Japanesefinancial instruments exchanges) (hereinafter, the “attached documents”), and payment of money
equivalent to the total exercise price of the subscription rights to shares to be exercised to the payment
handling location.
17. Timing of the effectiveness of the exercise of subscription rights to shares, etc.
The exercise of the subscription rights to shares shall become effective when the exercise request form
and the attached documents described in Paragraph 16 arrive at the payment handling location, andmoney equivalent to the total exercise price of the subscription rights to shares to be exercised is paid tothe payment handling location.
18. Amendments to laws and regulations, etc.
If, after the gratis allotment of subscription rights to shares, amendments to the provisions of thisimportant information are necessary owing to the establishment, amendment, or discontinuation of laws
and regulations, then the provisions of this important information shall be reasonably deemed to be
replaced, taking into consideration the intent and phrasing of the relevant establishment, amendment, ordiscontinuation of laws and regulations.

37

Consolidated Balance Sheet(As of March 31, 2021)
Description

Amount(Assets)
Current assets
Cash and deposits
Notes and accounts
receivable-trade
Inventories
Other
Allowance for doubtful accounts

Description(Thousands of yen)Amount(Liabilities)
3,020,276

Current liabilities

1,495,413
789,985
678,776
57,840(1,740)1,907,250

Notes and accounts payable-trade

514,013

Short-term loans payable
Income taxes payable
Provision for bonuses
Provision for shareholder benefit
program

607,992
4,084
39,974

Other719,186

Non-current assets

18,888,972

Property, plant and equipment

18,206,374

Buildings and structures

8,755,427

Long-term loans payableLand

9,268,089

Lease obligations

Non-current liabilities

22,00015,386,741
10,884,622
60,669Leased assets

79,633

Guarantee deposits received

Other
Intangible assets
Goodwill

103,223
195,191
171,297

Deferred tax liabilities for land
revaluation
Net defined benefit liability

Other

23,893

Asset retirement obligations

54,622

Investments and other assets

487,406

Other

58,385Investment securities

326,538

Total liabilities

1,550,731
2,476,495
301,215

17,293,992(Net assets)

Claims provable in bankruptcy,
claims provable in rehabilitationand other

83,256

Deferred tax assets

Shareholders’ equity(6,710)Capital stock

100,000

93,619Retained earnings(96,928)

Other

64,221

Treasury shares(9,781)

Allowance for doubtful accounts(80,228)

Accumulated other comprehensive
incomeValuation difference on
available-for-sale securities(58,385)

Revaluation reserve for land

4,664,864

Subscription rights to shares
21,909,249(13,568)

Deferred gains or losses on hedges
Foreign currency translation adjustment

Total assets

4,596,067

3,156
25,899Total net assets

4,615,257

Total liabilities and net assets

21,909,249

38

Consolidated Statement of Income(April 1, 2020 - March 31, 2021)(Thousands of yen)
Description

AmountNet sales

4,617,518

Cost of sales

3,454,477

Gross profit

1,163,041

Selling, general and administrative expenses

909,248

Operating income

253,792

Non-operating income
Interest income

56

Dividend income
Share of profit of entities accounted for using
equity method
Other

6,260
1,852
6,686

14,856

Non-operating expenses
Interest expenses

209,076

Other

37,657

246,733

Ordinary income

21,915

Profit before income taxes

21,915

Income taxes-current

4,759

Income taxes-deferred(80,357)(75,598)

Profit

97,513

Profit attributable to owners of parent

97,51339

Non-Consolidated Balance Sheet(As of March 31, 2021)
Description(Assets)
Current assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Inventories
Other
Allowance for doubtful accounts

AmountDescription

2,403,823
1,024,092
193,837
500,713666,185
20,734(1,740)Non-current assets
Property, plant and equipment
Buildings and structures
Land
Leased assets
Other
Intangible assets
Goodwill
Other
Investments and other assets
Investment securities
Shares and investments in capitalof subsidiaries and associates

19,094,757
18,401,754
8,754,968
9,470,591
79,63396,561
195,136
171,297
23,838497,866
237,843

Long-term loans receivable

181,550

104,629(Liabilities)
Current liabilities
Notes payable-trade
Accounts payable-trade
Short-term loans payable
Income taxes payable
Provision for bonuses
Provision for shareholder benefit
program
Other
Non-current liabilities
Long-term loans payable
Lease obligations
Guarantee deposits received

1,467,027
152,279
338,752
607,992587
32,29022,000313,126
15,378,486
10,884,622
60,6691,571,518

Deferred tax liabilities for land
revaluation

2,476,495

Provision for retirement benefits
Asset retirement obligations

279,376
47,419Other

58,385

Total liabilities

16,845,514(Net assets)

Claims provable in bankruptcy,
claims provable inrehabilitation and other

83,256

Deferred tax assets
Other
Allowance for doubtful accounts

90,21562,150(261,778)

Total assets(Thousands of yen)Amount21,498,580

40

Shareholders’ equity
Capital stock
Retained earnings
Other retained earnings
Retained earnings brought
forwardTreasury shares
Valuation and translation
adjustments
Valuation difference on
available-for-sale securities
Deferred gains or losses onhedges
Revaluation reserve for land
Subscription rights to shares
Total net assets
Total liabilities and net assets

34,256
100,000(58,524)(58,524)(58,524)(7,219)4,592,910(13,568)(58,385)
4,664,864
25,8994,653,066
21,498,580

Non-Consolidated Statement of Income(April 1, 2020 - March 31, 2021)(Thousands of yen)
Description

AmountNet sales

3,650,897

Cost of sales

2,527,036

Gross profit

1,123,861

Selling, general and administrative expenses

868,949

Operating income

254,911

Non-operating income
Interest income

906

Dividend income

6,260

Reversal of allowance for doubtful accounts

250

Other

3,218

10,635Non-operating expenses
Interest expenses

209,076

Other

37,613

246,689

Ordinary income

18,858

Profit before income taxes

18,858

Income taxes-current

587

Income taxes-deferred(80,667)

Profit(80,080)
98,93841