Note: This document has been translated from a part of the Japanese original for reference purposes only. In
the event of any discrepancy between this translated document and the Japanese original, the original shallprevail. The Company assumes no responsibility for this translation or for direct, indirect or any other formsof damages arising from the translation.
(Stock Exchange Code 1852)
June 5, 2020
To Shareholders with Voting Rights:
Makoto Asanuma
Representative President
Asanuma Corporation
Main Office: 1-2-3 Minatomachi,
Naniwa-ku, Osaka

NOTICE OF CONVOCATION OF
THE 85TH ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
We would like to inform you that the 85th Annual General Meeting of Shareholders of Asanuma
Corporation (the “Company”) will be held as described below.
If you will not attend the meeting, please exercise your voting rights in advance in writing or via theInternet, etc. Please review the attached Reference Documents for the General Meeting of Shareholders below
and exercise your voting rights by 5:15 p.m. on Thursday, June 25, 2020, Japan time.
1. Date and Time:

Friday, June 26, 2020 at 10:00 a.m. Japan time

2. Place:

Snowberry Banquet Room, 21st Floor, Hotel Monterey Grasmere Osaka
1-2-3 Minatomachi, Naniwa-ku, Osaka

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
85th Fiscal Year (April 1, 2019 - March 31, 2020) and results of audits of theConsolidated Financial Statements by the Accounting Auditor and the Audit& Supervisory Board
2. Non-consolidated Financial Statements for the Company’s 85th Fiscal Year
(April 1, 2019 - March 31, 2020)
Proposals to be resolved:<Company Proposals>
Appropriation of Surplus
Proposal 1:
Election of Nine (9) Directors
Proposal 2:
Election of One (1) Audit & Supervisory Board Member
Proposal 3:<Shareholder Proposals>
Amendments to Articles of Incorporation Pertaining to Sale of Strategic Shares
Proposal 4:
Appropriation of Surplus
Proposal 5:
Details of each Proposal are described in the attached Reference Documents for the General Meetingof Shareholders.

-1-

◎

Of the documents required to be appended to this Notice of Convocation as attachments, the following
matters have been posted on the Company’s website (http://www.asanuma.co.jp/) in accordance withlaws and regulations and Article 16 of the Articles of Incorporation, and are therefore not included in theattached documents.
(1) Notes to the Consolidated Financial Statements(2) Notes to the Non-consolidated Financial Statements
The Consolidated Financial Statements and the Non-consolidated Financial Statements included in theattachment to this Notice of Convocation, constitutes a part of the documents audited by the Audit &Supervisory Board Members and the Accounting Auditor in the preparation of the audit report andaccounting audit report, respectively.
◎ Should matters to be described in the Reference Documents for the General Meeting of Shareholders andthe attached documents (Business Report, Non-consolidated Financial Statements and Consolidated
Financial Statements) require revisions, the revised versions will be posted on the Company’s website(http://www.asanuma.co.jp/).

-2-

Instructions for the Exercise of Voting Rights

If you are attending the meeting

Exercise of voting rights by attending the meeting
Date and time: Friday, June 26, 2020 at 10:00 a.m. Japan time
Please submit the enclosed Voting Rights Exercise Form at the reception desk. You are asked to bringthis Notice of Convocation with you as a means of resource-saving.

If you will not attend the meeting

Exercise of voting rights in writing
Deadline: 5:15 p.m. on Thursday, June 25, 2020 (time of receipt)
Please indicate your vote for or against the proposals on the enclosed Voting Rights Exercise Form andreturn it by mail so that it is received by the deadline.
For details, please refer to page 4.



Exercise of voting rights over the Internet, etc.
Deadline: 5:15 p.m. on Thursday, June 25, 2020
Please access the voting website (https://www.web54.net) and enter your vote for or against the
proposals by the deadline by following the instructions on the screen.
For details, please refer to page 5.

-3-

Reference Documents for the General Meeting of Shareholders<Company Proposals (Proposals No. 1 to No. 3)>
Proposals and References
Proposal 1:

Appropriation of Surplus

The Company considers the return of profits to shareholders as one of its most important management
initiatives, and to this end, maintains a basic policy of allocating dividends in line with its businessperformance by developing new technologies that are necessary for the future expansion of the business,while striving to sustain and reinforce the Company’s competitiveness.
With regard to the year-end dividend, the Company has taken various factors into consideration,
including its financial condition and business performance. Therefore, the Company proposes to pay forthe fiscal year ended March 31, 2020 a year-end dividend of ¥216 per share.
Since the shareholders have submitted a proposal for appropriation of surplus besides this Proposal as
described below, the payment of the dividend will start on July 15, 2020, in order to pay the dividends
smoothly.

(1) Type of dividend property
Cash(2) Allotment of dividend property and the aggregate amount¥216 per common share of the Company
Aggregate amount of dividends will be ¥1,740,594,528.
(3) Effective date of dividends of surplus
June 26, 2020
(4) Start date of the dividend payment
July 15, 2020

-4-

Proposal 2:

Election of Nine (9) Directors

The terms of office of all eight (8) Directors will expire at the conclusion of this year’s Annual General
Meeting of Shareholders.
Accordingly, the Company proposes the election of nine (9) Directors, including three (3) new candidates,
as described below. The Company will appoint six (6) Inside Directors in accordance with its basic policy,
while it will appoint three (3) Outside Directors for the purpose of ensuring the transparency of corporate
management and enhancing corporate governance.
If this Proposal is approved as originally proposed, more than one third of the Directors of the Company
will be Independent Officers.
Composition of the Board of Directors of the Company
The Company endeavors to appoint Directors so that the composition of the Board of Directors is
well-balanced as a whole between knowledge, experience and competence, and achieves both diversity andappropriate size.
The composition of Inside Directors and Independent Outside Directors is as follows:Composition of Inside Directors
The Company has a basic policy which is laid out in the Internal Rules of the Nomination andCompensation Committee to appoint six (6) Inside Directors consisting of Officer in charge of Building
Construction Headquarters who is responsible for building construction segments, Officer in charge of Osaka
Main Office who is responsible for building construction segments administered by Osaka Main Office,
Officer in charge of Tokyo Main Office who is responsible for building construction segments administeredby Tokyo Main Office, Officer in charge of Civil Construction Headquarters who is responsible for civil
construction segments, Officer in charge of President’s Office who is responsible for administration segments,
alongside Representative President.
Although the Company reduced the number of Inside Directors by one to five Directors in the 84th Fiscal
Year (the prior fiscal year) due to several reasons, the Company will appoint six Inside Directors again in the85th Fiscal Year as in the 83rd Fiscal Year (the second prior fiscal year). Accordingly, although the number of
Inside Directors will formally increase by one from the prior fiscal year, this change is virtually an act offilling a vacancy, and it will be done to adjust the number of Inside Directors in accordance with the Internal
Rules of the Nomination and Compensation Committee.
Changes in the number of Inside Directors since the 82nd Fiscal Year
Fiscal Year

Number of Inside Directors

82nd Fiscal Year
83rd Fiscal Year84th Fiscal Year
85th Fiscal Year(current fiscal year)

66
5

Changes in the number of Inside
Directors(compared to the prior fiscal year)
None
None
Decreased by one

6

Increased by oneComposition of Independent Outside Directors
In accordance with the Internal Rules of the Nomination and Compensation Committee, the Company will
appoint three (3) Independent Outside Directors. The Company has appointed three (including one female)
Independent Outside Directors since the 84th Fiscal Year, and more than one third of the Directors of theCompany have been Independent Outside Directors since then.

-5-The candidates for Directors are as follows:No.

1

Positions andResponsibilities at theCompany

Attendanceat Board of
Directors’
meetingYears
served as
Director

Membershipin Nomination
andCompensation
Committee

Representative President,
C.E.O.

17 out of 172◯

17 out of 178◯

17 out of 17

2

14 out of 14

1

-

-

-

-

Director

17 out of 17

3◎

Director

14 out of 14

1

◯

-

-

◯

Name

MakotoAsanumaReappointment
Male

2

Morio
Yamakoshi

Reappointment
Male

3

Yukihiro
Ueshiba

Reappointment
Male

4

KazuhiroMoriyama

Reappointment
Male

5

AkihiroToyotaNew Appointment
Male

6

Masahiro
Fujisawa

New Appointment
Male

7

Masafumi
Fukuda8

MiwakoFunamoto

9

TakuyaMorikawa

Reappointment
Outside Director
Independent
Male
Reappointment
Outside Director
Independent
FemaleNew Appointment
Outside Director
Independent
Male

Representative Director,
Senior Managing Officer,
Officer in charge of
President’s Office andOverseas Operations
Director, Senior Managing
Officer, Officer in chargeof Building Construction
Headquarters
Director, Senior Managing
Officer, Officer in chargeof Civil Construction
Headquarters
Managing Officer, Officer
in charge of Osaka Main
Office, Deputy Officer incharge of Building
Construction Headquarters
Managing Officer, Officer
in charge of Tokyo Main
Office, Deputy Officer incharge of Building
Construction Headquarters,
General Manager,
Marketing & Sales
Promotion Office, Building
Construction Headquarters-

Notes: 1. Members of the Nomination and Compensation Committee (“◎” indicates the Chairperson) are the expected members
after this year’s Annual General Meeting of Shareholders.
2. The record of attendances at the Board of Directors’ meetings for Mr. Kazuhiro Moriyama and Ms. Miwako Funamoto isdifferent from other candidates as they assumed office on June 26, 2019 (the date of the 84th Annual General Meeting of
Shareholders).

-6-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1996
June 2009
April 2015

1

[Reappointment][Male]

April 2016

Makoto Asanuma(April 18, 1972)

April 2018
June 2018

Joined the Company
Assistant General Manager in charge of President’s Office,General Manager, General Affairs Division
Executive Officer, Officer in charge of Renovation Division,
General Manager, Renovation Marketing & Sales Division,
Tokyo Main Office
Executive Officer, General Manager, Marketing & Sales
Promotion Office, Building Construction Headquarters, incharge of Renovation and Real Estate
Executive Vice President, Officer in charge of Building
Construction Headquarters
Representative President, C.E.O. (to present)

Number ofshares of theCompany held

137,588[Significant concurrent positions]・Representative Director and President, ASANUMA TATEMONO K.K.
・Chairman, Asanuma Construction Ltd., International[Reason for nomination as candidate for Director]
Mr. Asanuma has been nominated as a candidate for Director for his background as set forth above and with his extensive
experience in corporate management acquired through his years as Representative Director of the Company.
Note:

No.

There are no special interests between the Company and Mr. Asanuma.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
June 2002

2

Note:

Number ofshares of theCompany held

Joined Sumitomo Mitsui Banking Corporation
General Manager, Shinjuku Corporate Banking Dept. II
June 2003
Senior Manager, Tokyo Head Office
April 2004
General Manager, Nagoya Corporate Banking Dept. II
April 2006
Senior Manager, Internal Audit Dept.
June 2007
Joined the Company
Executive Officer, in charge of Building Construction Marketing& Sales, Tokyo Main Office
April 2012Managing Officer,[Reappointment]
Deputy General Officer in charge of Business Headquarters[Male]
June 2012
Director, Managing Officer,
Deputy Officer in charge of Business Headquarters
2,400
Director, Managing Officer,
Morio Yamakoshi January 2013
Officer in charge of President’s Office(September 3, 1955)
April 2015
Director, Managing Officer,
Officer in charge of President’s Office and Overseas Operations
April 2017
Director, Senior Managing Officer,
Officer in charge of President’s Office and Overseas Operations
June 2018
Representative Director, Senior Managing Officer,
Officer in charge of President’s Office and Overseas Operations(to present)[Significant concurrent positions]
Director, SINGAPORE PAINTS & CONTRACTOR PTE. LTD.
[Reason for nomination as candidate for Director]
Mr. Yamakoshi has been nominated as a candidate for Director for his background as set forth above and with recognition
to his management experience and insight, acquired through his career in a financial institution, along with the fact that hehas extensive knowledge in overall operations, mainly within the Company’s Main Office and its Overseas Operations.
There are no special interests between the Company and Mr. Yamakoshi.

-7-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

April 1974
April 2013

3

Note:

No.

Joined the Company
General Manager, Building Construction Department, Osaka
Main Office
April 2015
Executive Officer, Deputy Officer in charge of Osaka Main
[Reappointment]
Office (in charge of Building Construction)[Male]
April 2017Managing Officer, Officer in charge of Osaka Main Office
April 2018
Managing Officer, Officer in charge of Osaka Main Office,
1,000
Deputy Officer in charge of Building Construction Headquarters
Yukihiro Ueshiba
June 2018
Director, Managing Officer, Officer in charge of Osaka Main
(April 8, 1955)
Office, Deputy Officer in charge of Building Construction
Headquarters
April 2019
Director, Senior Managing Officer, Officer in charge of Building
Construction Headquarters (to present)[Reason for nomination as candidate for Director]
Mr. Ueshiba has been nominated as a candidate for Director for his background as set forth above and because he has
extensive experience in overall operations and management, mainly within the building construction business of theCompany.
There are no special interests between the Company and Mr. Ueshiba.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1974
April 2012

4

Note:

Number ofshares of theCompany held

Joined the Company
General Manager, Civil Engineering Division, Osaka Main
OfficeApril 2014
Deputy Officer in charge of Osaka Main Office (in charge ofCivil Engineering)
General Manager, Civil Engineering Division, Osaka Main
[Reappointment]
Office[Male]
April 2015
Deputy Officer in charge of Civil Construction Headquarters
1,800
April 2016
Executive Officer, Deputy Officer in charge of Civil
Kazuhiro Moriyama
Construction Headquarters(June 2, 1955)
April 2018
Managing Officer, Officer in charge of Civil Construction
Headquarters
June 2019
Director, Managing Officer, Officer in charge of Civil
Construction Headquarters
April 2020
Director, Senior Managing Officer, Officer in charge of Civil
Construction Headquarters (to present)[Reason for nomination as candidate for Director]
Mr. Moriyama has been nominated as a candidate for Director for his background as set forth above and because he has
extensive experience in overall operations and management, mainly within the Company’s civil construction business.
There are no special interests between the Company and Mr. Moriyama.

-8-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

April 1981
October 2010

5

Note:

No.

Joined the Company
General Manager, Marketing & Sales Division, Hiroshima
BranchApril 2013
Deputy Officer in charge of Osaka Main Office(in charge of Marketing & Sales)[New Appointment]
November 2014 Deputy Officer in charge of Osaka Main Office[Male](in charge of Marketing & Sales), Building Construction
600
Headquarters
Akihiro Toyota
April 2015
Executive Officer, Deputy Officer in charge of Osaka Main
(February 15, 1959)
Office (in charge of Marketing & Sales), Building Construction
Headquarters
April 2019
Managing Officer, Officer in charge of Osaka Main Office,Deputy Officer in charge of Building Construction Headquarters(to present)[Reason for nomination as candidate for Director]
Mr. Toyota has been nominated as a candidate for Director for his background as set forth above and because he has
extensive experience in overall operations and management, mainly within the building construction business of theCompany’s Osaka Main Office.
There are no special interests between the Company and Mr. Toyota.

Name(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions
April 1982
October 2011

6

Note:

Number ofshares of theCompany held

Joined the Company
General Manager, Marketing & Sales Section No.3,
Tokyo Main Office
April 2012
General Manager, Marketing & Sales Section No.2 and No.3,
Tokyo Main Office
April 2013
Deputy Officer in charge of Tokyo Main Office(in charge of Building Construction Marketing & Sales),[New Appointment]
Building Construction Headquarters[Male]
April 2016
Executive Officer, Deputy Officer in charge of Tokyo Main300
Office (in charge of Building Construction Marketing & Sales),Masahiro Fujisawa
Building Construction Headquarters(May 15, 1959)
April 2018
Executive Officer, Deputy Officer in charge of Building
Construction Headquarters, General Manager, Marketing &Sales Promotion Office, Building Construction Headquarters
April 2019
Managing Officer, Officer in charge of Tokyo Main Office,Deputy Officer in charge of Building Construction
Headquarters, General Manager, Marketing & Sales Promotion
Office, Building Construction Headquarters (to present)[Reason for nomination as candidate for Director]
Mr. Fujisawa has been nominated as a candidate for Director for his background as set forth above and because he has
extensive experience in overall operations and management, mainly within the building construction business of theCompany’s Tokyo Main Office.
There are no special interests between the Company and Mr. Fujisawa.

-9-

No.

Name
(Date of birth)

Past experience, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

April 1971

7

Notes:

No.

Joined the Ministry of Construction (current Ministry of Land,
Infrastructure, Transport and Tourism)
October 1999
Director-General, Shikoku Region Construction Bureau (current
Shikoku Regional Development Bureau, Ministry of[Reappointment]
Construction)[Outside Director]
November 2001 Director, Water Resources Development Public Corporation[Independent(current Japan Water Agency)
Officer]
May 2008
Head Director, Shikoku Kensetsu Kosaikai Inc Association[Male](Shikoku Create Association)
Masafumi Fukuda June 2017
Advisor, Shikoku Kensetsu Kosaikai Inc Association (Shikoku(August 25, 1944)
Create Association) (to present)
June 2017
Outside Director of the Company (to present)[Significant concurrent positions]
・Advisor, Shikoku Kensetsu Kosaikai Inc Association (Shikoku Create Association)[Reason for nomination as candidate for Outside Director and reason why the Company has determined that he is capableof properly performing duties as Outside Director]
Mr. Fukuda has been nominated as a candidate for Outside Director because the Company believes that his background as
set forth above and his extensive knowledge, expertise and experience acquired from having been involved in theconstruction field for many years would be well suited for Outside Director, even though he has no experience in being
directly involved in company management.
1. There are no special interests between the Company and Mr. Fukuda.
2. Mr. Fukuda will have served as an Outside Director of the Company for three years at the conclusion of this year’s
Annual General Meeting of Shareholders.
3. The Company has concluded a limitation of liability agreement with Mr. Fukuda to limit his liability to the amountstipulated by laws and regulations so that he may fully perform his duties as Outside Director.
4. The Company has designated Mr. Fukuda as an Independent Officer and has notified the Tokyo Stock Exchange as such.

Name(Date of birth)[Reappointment][Outside Director][Independent
Officer][Female]8

Notes:

Past experience, positions, responsibilities,
and significant concurrent positions
February 2014
April 2015
June 2019
January 2020

Number ofshares of theCompany held

Admitted to the bar
Joined Risolute Law OfficeCommittee Member, Special Committee on Tax Matters, Tokyo
Bar Association (to present)
Outside Director of the Company (to present)
Joined Toranomon Daiichi Law Office (to present)-

Miwako Funamoto(July 30, 1979)[Reason for nomination as candidate for Outside Director and reason why the Company has determined that she is capableof properly performing duties as Outside Director]
Ms. Funamoto has been nominated as a candidate for Outside Director because the Company believes that her backgroundas set forth above, her expertise as an attorney-at-law and extensive experience in corporate legal affairs would be well
suited for Outside Director, even though she has no experience in being directly involved in company management.
1. There are no special interests between the Company and Ms. Funamoto.
2. Ms. Funamoto will have served as an Outside Director of the Company for one year at the conclusion of this year’s
Annual General Meeting of Shareholders.
3. The Company has concluded a limitation of liability agreement with Ms. Funamoto to limit her liability to the amountstipulated by laws and regulations so that she may fully perform her duties as Outside Director.
4. The Company has designated Ms. Funamoto as an Independent Officer and has notified the Tokyo Stock Exchange assuch.

- 10 -

No.

Name(Date of birth)[New Appointment][Outside Director][Independent
Officer][Male]

9Notes:

Past experience, positions, responsibilities,
and significant concurrent positions

Number ofshares of theCompany held

April 1982
June 2005

Joined KOKUYO Co., Ltd.
Director of the Board, KOKUYO Co., Ltd. (to present)
Representative Director and President, KOKUYO S&T Co., Ltd.
April 2015
Group Senior Executive Officer, KOKUYO Co., Ltd.
January 2019
Executive Vice President, Special Officer (to present)[Significant concurrent positions]Takuya Morikawa ・Director and Executive Vice President, Special Officer, KOKUYO Co., Ltd.
(October 7, 1959)[Reason for nomination as candidate for Outside Director]
Mr. Morikawa has been nominated as a candidate for Outside Director because the Company believes that his backgroundas set forth above and his extensive knowledge, expertise and experience acquired from having been involved inmanagement of major domestic stationery and furniture makers for many years would be well suited for Outside Director.
Mr. Morikawa has worked for one of the customers of the Company. However, the transaction value between the twocompanies is insignificant since the transaction value during the most recent business year is less than 1% of consolidated
net sales of both companies. Accordingly, the Company has determined that Mr. Morikawa is independent.
1. There are no special interests between the Company and Mr. Morikawa.
2. The Company plans to conclude a limitation of liability agreement with Mr. Morikawa to limit his liability to theamount stipulated by laws and regulations so that he may fully perform his duties as Outside Director.
3. The Company plans to designate Mr. Morikawa as an Independent Officer under the provision set forth by the Tokyo
Stock Exchange if he is elected as Outside Director.

- 11 -

Proposal 3:

Election of One (1) Audit & Supervisory Board Member

The term of office of Audit & Supervisory Board Member Akiyoshi Nakanishi will expire at theconclusion of this year’s Annual General Meeting of Shareholders. Accordingly, the election of one (1) Audit& Supervisory Board Member is proposed.
The Audit & Supervisory Board has previously given its approval to this Proposal.
If this Proposal is approved as originally proposed, three out of four (i.e., the majority of) Audit &Supervisory Board Members of the Company will be Independent Officers.
The candidate is as follows:
Name(Date of birth)

Past experience, positions
and significant concurrent positions

Number ofshares of theCompany held

Joined Matsushita Electric Industrial Co., Ltd.
Director, CFO, Matsushita Radio Singapore Pte. Ltd.
Chief Accountant, China Hualu Panasonic AVC Networks Co.,LTD.
April 2007
General Manager, Corporate Accounting Group, Head Office,Panasonic Corporation
April 2009
Executive Officer
April 2011
Managing Director
Yoshiaki Nakagawa
April 2014
President, Member of the Board, SANYO Electric Co., Ltd.
(February 14, 1954)
April 2018
Special Advisor, Hardlock Industry Co., Ltd. (to present)[Reason for nomination as candidate for Outside Audit & Supervisory Board Member]
Mr. Nakagawa has been nominated as a candidate for Outside Audit & Supervisory Board Member because the Company
believes that his background as set forth above and his extensive knowledge, expertise and experience acquired from having been
involved in management of major electrical equipment makers for many years would be well suited for Outside Audit &Supervisory Board Member.
Mr. Nakagawa has worked for one of the customers of the Company. However, transaction value between the two companies isinsignificant since the transaction value during the most recent business year is less than 1% of consolidated net sales of bothcompanies. Accordingly, the Company has determined that Mr. Nakagawa is independent.

[New Appointment][Outside Audit &Supervisory Board
Member][Independent Officer][Male]

Notes:

April 1976
September 1990
January 2001

1. There are no special interests between the Company and Mr. Nakagawa.
2. The Company plans to conclude a limitation of liability agreement with Mr. Nakagawa to limit his liability to theamount stipulated by laws and regulations so that he may fully perform his duties as Outside Audit & Supervisory Board
Member.
3. The Company plans to designate Mr. Nakagawa as an Independent Officer under the provision set forth by the Tokyo
Stock Exchange if he is elected as Outside Audit & Supervisory Board Member.

- 12 -

(Reference)
If this Proposal is approved as originally proposed, the composition of the Audit & Supervisory Board will be
as follows:

Name

Yuichi
SasakiTakashiIshijima

MamoruYamawaki

YoshiakiNakagawa

Note:

Reappointment
Male
Reappointment
Outside Audit &Supervisory Board
MemberIndependent Officer
Male
Reappointment
Outside Audit &Supervisory Board
MemberIndependent Officer
Male
New Reappointment
Outside Audit &Supervisory Board
MemberIndependent Officer
Male

Positions at the Company

Attendance atBoard ofDirectors’
meeting

Attendance at
Audit &
Supervisory
Board
meetings

Years served
as Audit &Supervisory
Board
MemberFull-time Audit &Supervisory Board
Member14 out of 14

11 out of 11

1

Audit & Supervisory
Board Member

15 out of 17

13 out of 15

10

Audit & Supervisory
Board Member

17 out of 17

14 out of 15

7

-

-

-

-

The record of attendances at the Board of Directors’ meetings and the Audit & Supervisory Board meetings for Mr. Yuichi
Sasaki is different from other Audit & Supervisory Board Members as Mr. Sasaki assumed office on June 26, 2019 (the dateof the 84th Annual General Meeting of Shareholders).

- 13 -

<Shareholder Proposals (Proposal No. 4 and No. 5)>
Proposal No. 4 and No. 5 were submitted by two shareholders (hereinafter referred to as “Proposing
Shareholders”).
The details of the Proposals submitted by Proposing Shareholders and reasons behind them are organized
per Proposal and described as they are.
Proposal 4: Amendments to Articles of Incorporation Pertaining to Sale of Strategic Shares
1. Details of Proposal
Newly establish the following chapter and article in the current Articles of Incorporation.
Chapter 8 Sale of Strategic Shares
Article 35 (Sale of Strategic Shares)
The strategic shares recognized on the balance sheet as of the effective date of the amendment to add this
Article to the Articles of Incorporation shall be promptly sold within the three fiscal years from the 86th to88th Fiscal Year.
2. Reason for Proposal
During the fiscal year ended March 31, 2019, the Company had bought 100,000 additional shares of
Sumitomo Realty & Development Co., Ltd. as strategic shares. The amount of the shares of Sumitomo
Realty & Development Co., Ltd. recognized on the balance sheet had almost doubled from 668 million yen
in the prior fiscal year to 1,238 million yen as of the end of March 2019. Furthermore, the Company held 55
issues of strategic shares in the amount of 9,267 million yen recognized on the balance sheet as of the end of
March 2019.
According to the Company’s securities report submitted as of June 27, 2019, the issuer companies of
those strategic shares are the business partners of the Company, and the purpose of such shareholdings is
explained as “for strengthening friendly relations with business partners” and “for strengthening business
relationships.” It is hard to believe that strengthening friendly relations with those business partners will
increase shareholder value of the Company, and moreover, it is difficult to understand why suchshareholdings will lead to strengthening business relationships.
Such strategic shareholdings mean that the Company holds those shares as a stable shareholder,cooperating with the self-protection of the directors of those issuer companies. It is not appropriate to use theCompany’s important capital entrusted by shareholders for such inappropriate purposes, i.e., cooperation
with the self-protection of the directors of other companies and leave the capital dormant as strategic shares,
or non-performing assets; efficient utilization of capital should be pursued.
The Company should promptly sell all strategic shares currently held and use the proceeds from such saleto increase shareholder value of the Company. More specifically, the Company shall sell those strategic
shares within the next three fiscal years including the current fiscal year.

- 14 -

Opinion of the Board of Directors
The Board of Directors of the Company opposes this Proposal.
The Company held listed shares in the amount of 6,900 million yen (value recognized on the
consolidated balance sheet) as of the end of March 2020. However, the Company has adopted a policy to
reduce strategic shares if the dividends or the benefits from construction gross profit are lower than “the costof capital (weighted average cost of capital)” as of the end of said fiscal year, until the end of the fiscal year
ended March 31, 2019. Similarly, the company has adopted a policy to reduce strategic shares if thedividends or the benefits from construction gross profit are lower than “the cost of shareholder’s equity” asof the end of said fiscal year since the beginning of the fiscal year ended March 31, 2020. The Company
verifies the appropriateness of shareholdings of each individual issue at the regular meeting of the Board of
Directors held at the beginning of the following fiscal year.
Accordingly, the Company sold 3 issues in the amount of 997 million yen during the fiscal year ended
March 31, 2019, and 3 issues in the amount of 139 million yen during the fiscal year ended March 31, 2020.
The Company will continue to follow the above policy and further reduce the balance of strategic shares
so that it accounts for less than 10% of the Company’s consolidated net assets by the end of the fiscal year
ending March 31, 2022.
Based on the above, the Board of Directors of the Company judges that this Proposal, i.e., amendment to
the Articles of Incorporation to require the sale of all strategic shares within the three fiscal years (from April
2020 to March 2023) from the 86th fiscal year (the fiscal year ending March 31, 2021) to the 88th fiscal year(the fiscal year ending March 31, 2023), neither corresponds to the aforementioned policy nor does it
contribute to enhancing the Company’s corporate value. Therefore, the Board of Directors of the Company
opposes this Proposal.

- 15 -

Proposal 5: Appropriation of Surplus
1. Details of Proposal(1) Type of dividend property
Cash(2) Allotment of dividend property and the aggregate amount
Pay the amount of dividend per common share that is obtained by deducting from 518 yen the amount ofdividend per common share (hereinafter referred to as the “Company-proposed Amount of Dividend”) basedon the proposal for disposal of surplus which is proposed by the Board of Directors of the Company andapproved at the 85th Annual General Meeting of Shareholders (hereinafter referred to as the “Company’s
Proposal for Appropriation of Surplus”), in addition to the Company-proposed Amount of Dividend.
If the amount obtained by rounding off the decimal point of the amount of profit per share for the 85th
fiscal year (hereinafter referred to as “Actual EPS”) is not 518 yen, the aforementioned 518 yen shall be
replaced with the Actual EPS.
It should be noted that the total amount of dividend will be the amount obtained by multiplying the
aforementioned amount of dividend per common share by the number of shares subject to dividends as of thedate to exercise voting rights for the Company’s 85th Annual General Meeting of Shareholders.
(3) Effective date of dividends of surplus
Day after the date of the 85th Annual General Meeting of Shareholders of the Company
It should be noted that, if the Company’s Proposal for Appropriation of Surplus is submitted at the 85th
Annual General Meeting of Shareholders, this Proposal shall be submitted independently from, compatible
with and in addition to such Company’s Proposal.
2. Reason for Proposal
The “518 yen” described in “No. 2 Details of Proposal, 2. Appropriation of Surplus” is the Company’s
most recent forecast of profit per share as of April 23, 2020. This is a proposal that aims at the distribution of
all profit for the fiscal year, or a dividend payout ratio of 100%, regardless of the amount of dividend pershare proposed by the Company.
The Company’s equity ratio was 36.6% as of the end of March 2019, having risen to the highest levelever on an annual reporting basis. Considering together with the fact that the Company plans to enhance theequity ratio to 41% as of the end of the fiscal year ended March 31, 2020, the ROE is expected to decrease in
the future if the Company’s profit continues to remain at the level equivalent to those of past years.
Furthermore, the Company not only intends to further build up the equity ratio but also owns cash andsimilar assets at the sufficient level, i.e., approximately 25.5 billion yen in cash and deposits, approximately
9.7 billion yen in investment securities and approximately 9.8 billion yen in interest-bearing debt as of theend of December 2019.
The Company does not need to reserve any more funds within it; it will only reduce ROE if the Company
builds up more equity. The Company should significantly increase the dividend of surplus, as the return ofsurplus funds to shareholders will increase shareholder value and thus improve the share price.
It should be noted that the appropriation of surplus proposed this time will, even if implemented, notsignificantly change the level of the Company's equity and cash and deposits as of the end of the prior fiscal
year because the total amount of dividend proposed is within the profit for the current fiscal year, leaving theCompany's financial position sound and stable.
For detailed explanation of the above Proposal, see https://proposal-for-asanuma-from-sc-2020.com/ or
the special site link https://stracap.jp/ in the upper right of the Strategic Capital Inc. website.
Note from the Company: the start date of the dividend payment for this Proposal will be the same date as the start date of thedividend payment on the Company Proposal “Proposal 1: Appropriation of Surplus.”- 16 -

Opinion of the Board of Directors
The Board of Directors of the Company opposes this Proposal.
With respect to the appropriation of surplus, the Company, as its basic policy of shareholder return,considers the return of profits to shareholders as one of the most important initiatives, and to this end,
maintains a basic policy of allocating dividends in line with its business performance by developing newtechnologies that are necessary for the future expansion of the business, among others, while striving tosustain and reinforce the Company’s competitiveness.
The Company paid no dividend for three consecutive fiscal years from the fiscal year ended March 31,
2012 due to deteriorating business performance, whereas it resumed dividend payment in the fiscal year
ended March 31, 2015 while improving its financial position, and disclosed to adopt “30% or more
consolidated dividend payout ratio in the fiscal year ended March 31, 2019, 40% or more in the fiscal year
ending March 31, 2020, 50% or more in the fiscal year ending March 31, 2021” as its dividend policy for theThree-Year Medium-Term Plan (covering the fiscal year ended March 31, 2019 to the fiscal year ending
March 31, 2021) in May 2019.
In accordance with this policy, the Company carried a dividend of 153 yen per share and consolidated
dividend payout ratio of 30.3% for the fiscal year ended March 31, 2019, and will submit a dividend of 216
yen per share and consolidated dividend payout ratio of 40.5% for the fiscal year ended March 31, 2020, as aproposal at the 85th Annual General Meeting of Shareholders scheduled in June 2020. The consolidated
dividend payout ratio of the fiscal year ending March 31, 2021 will be higher than 50%, while the dividend
per share of said fiscal year has not been decided as the impact of COVID-19 on the Company’s businessperformance is still unclear at this stage.
With regard to the utilization of funds held and funds generated from annual profits remaining after thepayment of the dividends, the Company plans in the Three-Year Medium-Term Plan to “invest 20.0 billion
yen in technology and research, ICT, concession business and overseas business and for switching payment
to subcontractors to cash in three years.” The Company believes that such utilization of funds contributes tostable growth of the Company’s business performance and is essential to continuously return achievements
to shareholders.
The Company spent 15.0 billion yen in total for the above uses of funds in the fiscal year ended March
31, 2019 and the fiscal year ended March 31, 2020. The Company will decide the amount of the funds tospend for the above uses for the fiscal year ending March 31, 2021, which is the final fiscal year of theThree-Year Medium-Term Plan, while assessing the impact of COVID-19.
Therefore, the Board of Directors of the Company judges that this Proposal, which seeks a 100%
dividend payout of the profit for the 85th Fiscal Year, neither conforms to the Company’s basic policy ofshareholder return or capital utilization policy, which is essential for sustainable growth, nor does it
contribute to enhancing the Company’s corporate value. Therefore, the Board of Directors of the Company
opposes this Proposal.
End of document- 17 -