Notice of the 76th Annual General Meeting of Shareholders

1. Date and Time: Thursday, June 27, 2024 at 10:00 a.m. (JST)

3. Purposes:

Items to be reported:

1. The Business Report and the Consolidated Financial Statements for the 76th fiscal year (from April 1, 2023 to March 31, 2024), and the results of audits of the Consolidated Financial Statements by the Financial Auditor and the Audit and Supervisory Committee
2. The Non-consolidated Financial Statements for the 76th fiscal year (from April 1, 2023 to March 31, 2024)

Items to be resolved:

Proposal No. 1

Proposal No. 2

Proposal No. 3

1. Instructions for Exercising Voting Rights
   Please refer to the "Instructions for Exercising Voting Rights" on page 3.
2. Matters related to electronic provision measures
   Along with this document, we will deliver the documents of matters subject to measures for electronic provision to shareholders who have requested paper-based delivery. However, the following items are excluded from the documents, pursuant to the provisions of laws and regulations and Article 15 of the Articles of Incorporation of the Company:
3. 1. "Resolutions regarding the System to Ensure the Appropriateness of Business Operations," "Basic Policy and Progress of System Development for Eliminating Antisocial Forces," "Overview of Operation Status to Ensure the Appropriateness of Business Operations," and "Basic Policy for Control of Stock Company" in the Business Report
   2. "Notes to Consolidated Financial Statements" in the Consolidated Financial Statements
   3. "Notes to Non-consolidated Financial Statements" in the Non-consolidated Financial Statements

Therefore, the delivered documents make up a part of the Consolidated Financial Statements and Non- consolidated Financial Statements audited by the Financial Auditor in preparing its Financial Auditor's Reports, and a part of the Business Report, Consolidated Financial Statements and Non-consolidated Financial Statements audited by the Audit and Supervisory Committee in preparing its Audit Report.

If you attend the meeting in person, please submit the voting form at the reception desk.

Should the matters subject to measures for electronic provision require revisions, the description of the revisions, the original versions, and the revised versions will be posted on the Company's website and TSE website, described above, on the Internet.

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Instructions for Exercising Voting Rights

The exercise of voting rights in the General Meeting of Shareholders is the important right of all shareholders.

Please exercise your voting rights after reviewing the Reference Documents for the General Meeting of Shareholders.

There are three ways to exercise your voting rights as described below.

Attending the General Meeting of Shareholders

Please submit the voting form at the reception desk.

Date and time: Thursday, June 27, 2024, at 10:00 a.m. (JST)

Exercising Voting Rights in Writing (by Postal Mail)

Please indicate your approval or disapproval of each proposal on the voting form, and post it without affixing postage stamps.

Exercise due date: to be received by 5:45 p.m. on Wednesday, June 26, 2024 (JST)

Exercising Voting Rights via the Internet

Please indicate your approval or disapproval of each proposal in accordance with the instructions on the following page.

Exercise due date: to be given by 5:45 p.m. on Wednesday, June 26, 2024 (JST)

Instructions for Filling Out the Voting Form

Proposals No. 1 and No. 3

• If you approve, put a circle in the box marked 賛.
• If you disapprove, put a circle in the box marked 否.

Proposals No. 2

• • If you approve all candidates, put a circle in the box marked 賛.
  • If you disapprove all candidates, put a circle in the box marked 否.
  • If you disapprove of some candidates, put a circle in the box marked 賛 and write the candidates' number of whom you disapprove.
• If you exercise your voting rights both in writing (by postal mail) and via the Internet, we will only accept the exercise of your voting rights via the Internet as effective. If you exercise your voting rights more than once via the Internet, only the last vote shall be deemed effective.
• If neither approval nor disapproval of a proposal is indicated on the voting form you sent by postal mail, it shall be deemed a vote of approval.

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Instructions for Exercising Voting Rights via the Internet, Etc.

How to scan the QR Code

You can log in to the voting rights exercising website without entering the login ID and temporary password indicated on the voting form.

1. Scan the QR Code indicated on the voting form.
   Note: "QR Code" is a registered trademark of DENSO WAVE INCORPORATED.
2. Indicate your approval or disapproval by following the on-screen instructions.
   How to enter your login ID and temporary password Voting rights exercising website (https://evote.tr.mufg.jp/)

1. Access the voting rights exercising website.
2. Enter the "login ID and temporary password" indicated on the voting form and click "Login."
3. Indicate your approval or disapproval by following the on-screen instructions.

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Reference Documents for the General Meeting of Shareholders

Proposal No. 1 Appropriation of Surplus

The Company proposes the appropriation of surplus as follows:

Year-end dividends

The Company works to secure a stable management base over the long term, and also places importance on the continuation of stable dividends, and makes it a basic policy to distribute results that are supported by business performance and a sound financial structure.

The Company has given comprehensive consideration to matters including the business performance of the fiscal year, and it proposes to pay year-end dividends for the fiscal year as follows:

1. Type of dividend property To be paid in cash.
2. Allotment of dividend property and their aggregate amount 195 yen per common share of the Company

Total dividends: 828,886,695 yen

Accordingly, the annual dividend for the fiscal year, including the interim dividend, will be 285 yen per share.

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Proposal No. 2 Election of Two Directors (Excluding Directors Who Are Audit and Supervisory Committee Members)

The terms of office of two Directors, excluding Directors who are Audit and Supervisory Committee Members, will expire at the conclusion of this meeting. Therefore, the Company proposes the election of two Directors, excluding Directors who are Audit and Supervisory Committee Members.

Candidates for the role of Director (excluding Director who is an Audit and Supervisory Committee Member) are as follows:

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Proposal No. 3 Election of One Director Who Is an Audit and Supervisory Committee Member

Out of three Directors who are Audit and Supervisory Committee Members, the term of office of Director Kaori Sato will expire at the conclusion of this meeting. Accordingly, the Company proposes to elect one Director who is an Audit and Supervisory Committee Member.

In addition, the consent of the Audit and Supervisory Committee has been obtained for this proposal. Candidate for the role of Director who is an Audit and Supervisory Committee Member is as follows:

Notes: 1. There is no special interest between the candidate and the Company.

1. Kaori Sato is a candidate for outside Director of the Company.
2. Kaori Sato is designated as an independent officer as provided for by the Tokyo Stock Exchange. If the election of Kaori Sato is approved, the Company will continue its designation of Kaori Sato as an independent officer.
3. Pursuant to Article 427, paragraph (1) of the Companies Act of Japan, the Company entered into an agreement with Kaori Sato to limit her liability for damages under Article 423, paragraph (1) of the same Act. The maximum amount of liability for damages based on such agreement shall be the minimum liability amount stipulated in Article 425, paragraph (1) of the same Act. In the event that Kaori Sato is reelected, the Company will continue this agreement with her.
4. The Company has entered into a directors and officers liability insurance policy with an insurance company as stipulated in Article 430-3, paragraph (1) of the Companies Act of Japan, and the policy covers damages and litigation expenses incurred by the insured, including the Company's Directors. (However, there are certain exemptions, such as damages not being covered for acts committed by the insured with the knowledge that they were in violation of laws and regulations). In the event that the candidate is elected and assumes the office as a Director, the candidate will be the insured under the policy. In addition, the Company plans to renew the policy with the same terms at the next renewal.
5. The transactions between SATO Co., ltd., for which Kaori Sato currently serves as Representative Director, and the Company are minimal, accounting for about 0.1% of the Company's consolidated net sales for the fiscal year under review. Therefore, there is no business relationship that should be noted as having an impact on the performance of her duties as an outside Director.

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Current status of the corporate group

1. Progress and results of operations
   The business environment affecting SAKAI HEAVY INDUSTRIES, LTD. and its subsidiaries (the "Group") during the fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024) experienced a new phase of change in the world's socio-economic situation as it entered a period of adjustment from the global expansion of inflation and monetary tightening policies and the rapid economic recovery post COVID-19, as well as the tense security situation due to expanding conflict in the Middle East and social structural changes associated with the increasing adoption of generative AI technologies.
   Under these circumstances, the Group has been working to transform its management structure to adapt to the new business environment by reforming its profit structure through sales price revisions and higher value addition, creating new value addition and improving productivity through human capital investment and DX, as well as modifying its supply chain and global business activities based on the premise of economic bloc creation.
   As a result, net sales for the fiscal year under review were 33,020 million yen, an increase of 5.0% year on year. This achievement was supported by covering the drop in sales to Japan and Asia by expanded sales to North America. Operating profit was 3,310 million yen, an increase of 32.4% year on year. This was contributed by progress made in profit structure reforms and the positive effect of yen depreciation. Consequently, ordinary profit was 3,320 million yen, an increase of 42.8% year on year, and profit attributable to owners of parent was 2,440 million yen, an increase of 44.0% year on year.
   The following presents net sales on a consolidated basis by geographic segment.
   Net sales in Japan were 14,320 million yen, a decrease of 5.8% year on year, due to a standstill in construction equipment investment in the face of repeated price revisions and the 2024 issue in construction and logistics, despite continued solid construction investment backed by the measures to accelerate national land resilience.
   Net sales to overseas were 18,690 million yen, an increase of 15.1% year on year, due to favorable sales in the North American and Indonesian markets amid a patchy market environment.
   Net sales to North America were 9,700 million yen, an increase of 25.1% year on year, as the Infrastructure Investment Act resulted in a continued high level of construction.
   Net sales to Asia were 7,560 million yen, a decrease of 2.9% year on year, due to a slowdown in the Chinese and ASEAN markets, despite a strong performance in the Indonesian market.
   Net sales to other markets were 1,430 million yen, an increase of 103.8% year on year, due to the steady trend in Oceania market and a buildup of ODA projects in Africa.

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Net sales in Japan and overseas are as presented in the following table.

Note: Major countries and regions that belong to each overseas geographic segment in the fiscal year under review

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