NoticeConcerningRenewalofPolicyRegardingLarge-quantityPurchasesoftheCompanysshares

May 14, 2025

To whom it may concern:

Company Name: SAKAI HEAVY INDUSTRIES, LTD.

Representative: Ichiro Sakai, President and Representing Director Securities Code: 6358 (Tokyo Stock Exchange Prime Market) Contact: Yasuyuki Fujikawa,

General Manager of Administration Division Telephone: +81-3-3434-3401

Notice Concerning Renewal of Policy Regarding Large-quantity Purchases of the Company's shares (Anti-takeover Measures)

SAKAI HEAVY INDUSTRIES, LTD. (the "Company") hereby announces that at the board of directors meeting held on May 14, the Company confirmed its stance on its anti-takeover measures as follows and resolved to renew its anti-takeover measures for a period of three years.

The Company has a history of over 100 years as a specialized manufacturer of road construction machinery, a niche field even within the construction machinery industry. The Company intends to grow further through the global market by specializing and continuing to improve in this road construction machinery business.

The business is an accumulation of know-how supported by extensive experience in the manufacture and sales of road construction machinery, starting with rollers. Although the construction machinery business is the type of business that rides on boom and bust cycles due to fluctuation in public investment, a highly specialized global niche business such as the Company's has the opposite of short-sighted management positions, which largely change technological development investments and development plans due to short-term achievements.

Furthermore, from a legal aspect, under current Japanese laws, even in the event of a large-quantity purchase of shares that violates the Company's corporate value and the common interest of shareholders, the fact is there is danger of not having enough time to consider the contents and obtain reasonable time and information in order to suggest an alternative.

The Company, taking into consideration the aforementioned points, has passed a resolution at the Board of Directors Meeting aimed at continuing the anti-takeover measures for another three years, as described below. By presenting the proposal at the Company's 77th Annual General Meeting of Shareholders planned to be held on June 27, 2025, the plan is to receive approval from the shareholders.

The Company, at the Board of Directors Meeting held on May 15, 2013, together with determining basic policy regarding persons who control the Company's decisions on financial matters and business policies, (Prescribed in Article 118, Item 3 of the Regulations for Enforcement of the Companies Act; the "Basic Policy") as framework to prevent decisions on the Company's financial matters and business policies to be controlled by persons not appropriate according to the Basic Policy (Article 118, Item 3, b (2) of the Regulations for Enforcement of the Companies Act), measures (the "Plan") regarding acts of acquisition (Prescribed in (Note 1) below; the "Special Acquisitions Act.") of 20% or more of the Company's shares were decided to be introduced. At the Company's 65th Annual General Meeting of Shareholders held on June 27, 2013, the shareholders approved to introduce.

Furthermore, as of June 26, 2015, the Company has transitioned to a company with an Audit and Supervisory Committee, and necessary changes to the Plan have been made (Please see the notice related to the partial revision of the policy regarding large-quantity purchases of the Company's shares (anti-takeover measures), dated June 26, 2015).

Recently, the Plan's term of validity was until the end of the Board of Directors Meeting to be held upon the end of the 77th Annual General Meeting of Shareholders (the "Annual General Meeting of Shareholders") planned to be held on June 27, 2025. It was decided at the Board of Directors Meeting held on May 14, 2025, with approval at the Annual General Meeting of Shareholders as a requirement, to renew the Plan. From this, the Plan, in the event of obtaining approval from the shareholders at the Annual General Meeting of Shareholders, will come into effect on the same day after resolution at the Board of Directors Meeting to be held upon the end of the Annual General Meeting of Shareholders.

Regarding renewal of the Plan, as for today's Board of Directors Meeting, approval with the support of all Directors including two outside Directors who are Audit and Supervisory Committee Members have been obtained, as well as approval from the Audit and Supervisory Committee. Furthermore, regarding the contents, there are no substantial changes to the current contents.

Furthermore, as of today at this time, there are no concrete proposals of large-quantity purchases of the Company's shares.

(Note 1) "Special acquisitions act" is an act applicable to either of the following 1) or 2).

1. The Board of Directors will determine purchases or acts corresponding to purchases of the Company's share certificates, etc. (Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act), with an ownership ratio of share certificates, etc. (Article 27-23, Paragraph 4 of the Financial Instruments and Exchange Act), of 20% or more.*

   ⁎ The contents of the resolution, "The Board of Directors will determine purchases or acts corresponding to purchases of the Company's share certificates, etc., with an ownership ratio of share certificates, etc., of 20% or more" made today by the Board of Directors is as follows.

   Acts applicable to one of the following (a) through (d). Furthermore, regardless of the following (a) through (d), share certificates, etc. (Article 27-23, Paragraph 1 of the Financial Instruments and Exchange Act. Unless otherwise specified, the below is the same.), which the Company issues, or

   sales of share certificates, etc. (including mergers, share exchange, share transfer, company splits, and delivery of share by the Company), which are held by the Company, are not included in the Company's acquisition of share certificates, etc.

   1. Act pursuant to Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Act, "purchases, etc.," (Acts pursuant to enforcement orders of Article 6, Paragraph 3 of the Financial Instruments and Exchange Act that transfers by purchases or other compensation and similar acts of share certificates, etc. (Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Act.).) that allows a person's ownership ratio of share certificates, etc., to be 20% or more of the Company's share certificates, etc.

   2. Act with the condition other than the above (a) pursuant to Article 27-23, Paragraph 1 and Paragraph 3 of the Financial Instruments and Exchange Act where a "holder's" ownership ratio of share certificates, etc., becomes 20% or more of the Company's share certificates, etc.

   3. Act whereby the ownership ratio of share certificates, etc., of a joint holder of a holder of the Company's share certificates, etc. (Article 27-23, Paragraph 5 of the Financial Instruments and Exchange Act), becomes 20% or more of the Company's share certificates, etc.

   4. Act whereby the ownership ratio of share certificates, etc., of the Company's share certificates, etc., becomes 20% or more by having a relationship with a holder of the Company's share certificates, etc., pursuant to Article 27-23, Paragraph 6 of the Financial Instruments and Exchange Act.

2. Act starting tender offer ("ownership ratio of share certificates, etc., after purchasing" is decided based on what is listed in the tender offer registration form for the tender offer, and the business day after the day of tender offer notice is given is when the "special acquisitions act" occurs.) whereby the ownership ratio of share certificates, etc. (Article 27-2, Paragraph 8 of the Financial Instruments and Exchange Act; provided, however, that it is the total ownership ratio of share certificates, etc. of the tender offeror (Article 27-3, Paragraph 2 of the Financial Instruments and Exchange Act) and its specially related parties (Article 27-2, Paragraph 7 of the Financial Instruments and Exchange Act)), after purchasing becomes 20% or more of the Company's share certificates, etc. (Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Act)

1. Basic policy regarding persons who control decisions on the Company's financial and business policies

   The Company's view is the persons who control decisions on the Company's financial and business policies need to sufficiently understand the Company's corporate values and management philosophy, source of corporate value of the Company, and relationship of trust with the Company's stakeholders, such as customer corporations, to ensure and improve the Company's corporate value and the common interest of shareholders.

   On the other hand, the Company, as a party whose shares are listed on a financial instruments exchange, respects the free trading of shares of the Company in the market and does not unconditionally deny a large-scale purchase of shares of the Company by a particular party involved with transferring the company's right to control as long as it contributes to ensuring and improving the Company's corporate value and the common interest of shareholders. Furthermore, in regard to whether to accept a proposal concerning a large-scale purchase, etc., of

   the Company's shares, we believe the decision should ultimately be entrusted to the shareholders.

   However, within proposals concerning a large-scale purchase, etc., of the Company's shares, there are those that do not sufficiently reflect the Company's corporate value, those where the purpose obviously violates corporate value and the common interest of shareholders, those where the sale of shares is effectively coerced from shareholders, and those where the Company shareholders and Board of Directors consider the contents of a purchase or acquisition proposal but are not given the reasonably necessary time or information for the Company's Board of Directors to suggest an alternative.

   The Company, in addition to the aforementioned examples, views persons who violate corporate value and the common interest of shareholders by large-scale purchase, etc., of the Company's shares unsuitable as persons who control the Company's financial and business policies. In regard to these persons who purchase the Company's shares, necessary and appropriate countermeasures will be adopted, and along with ensuring information and time for the shareholders to consider whether to accept a large-scale purchase, we feel the need to protect the Company's corporate value and the common interest of shareholders.

2. Initiatives contributing to the implementation of the basic policy
   1. About the management philosophy as well as the basic management policy

      The Company, through the road construction machinery business, contributes to social work via national land development as the basic policy of management. The Company feels its existence and duty are to provide manufactured goods and services that users everywhere can trust, to attempt to constantly deepen skills as a road construction machinery specialist, to create beneficial skills to develop the road business, and to make use of expertise cultivated by road construction machinery for businesses in nearby fields.

      Based on this basic policy, with capital provided by shareholder investment as well as company management that brings forth the maximum ability of employees, we do our best to meet the expectations of shareholders with achievement.

   2. Initiatives to improve corporate value

      Recently, there has been a sudden change in the Japanese construction machinery industry due to a reduction in domestic construction investment and intensification of global competition, and at the present time, it is entering a significant turning point. As for the Company, our policy is to proceed with strengthening reform of business structure by specializing further in our strength, the road construction machinery business, and moving toward internationalization of the company. To this end, we aim for the position as the leading manufacturer in the international market by (1) stabilizing domestic businesses, (2) expanding overseas businesses, (3) deciding on new product development with merit as a medium-term management subject, and improving international competitiveness and establishing a stable earnings structure for domestic and international businesses.

   3. About corporate governance

      The Company has chosen to adopt the "Company with an Audit and Supervisory Committee System" as its corporate governance structure, and to strengthen the supervisory function, the composition of the Board of Directors shall be such that more than one-third of all Directors are independent outside Directors.

      As for the operation of the Board of Directors, in order to ensure the separation of the supervisory and business execution functions of the Board of Directors and to secure cooperation between Directors and Executive Officers, the Board of Directors is divided into the Monitoring Board (all Directors), which focuses on the supervisory function, and the Management Board (all Directors and all Executive Officers), which focuses on the business execution function.

      The Board of Directors, as a monitoring board, shall in principle meet once a quarter of the fiscal year, and shall have the basic roles of dismissing Representative Directors and supervising the execution of Directors' duties, as well as supervising management from an objective, medium- to long-term perspective and deliberating on important matters concerning the direction of management, including nominations and compensation, with a focus on the auditing functions of management.

      The Board of Directors, as a management board, shall consist of Directors plus all Executive Officers and in principle meets once a month, and shall have the basic roles of making decisions on basic management policies and the development of systems, as well as reporting and deliberating on important matters concerning the execution of business operations.

      Each Audit and Supervisory Committee Member participates in the deliberations of the Board of Directors as a Director and, as an Audit and Supervisory Committee Member, shall have the basic role of auditing the execution of duties by Directors, preparing audit reports, deciding proposals for the selection and dismissal of accounting auditors, decision-making regarding selection and dismissal of Directors and Director compensation, as well as auditing appropriateness and legality of the execution of Directors' duties.

      The accounting auditor, PricewaterhouseCoopers Japan LLC, audits the non-consolidated financial statements and their supplementary schedules, the extraordinary financial statements, and the consolidated financial statements, and prepares the accounting audit report, and audits the internal control and prepares the internal control audit report.

      Under this corporate governance system, we ensure the effectiveness of corporate governance through highly effective supervision of Directors and fair and prompt decision-making in the execution of business.

3. Purpose, outline, and contents of the renewal of the Plan
   1. Purpose of the renewal of the Plan

      The Company, in regard to a special acquisitions act which violates the Company's corporate value and the common interest of shareholders, recognizes the necessity to ensure the Company's corporate value and the common interest of shareholders by taking appropriate countermeasures quickly and precisely. Recognizing this, the Company, in the event of a special acquisitions act, has decided to renew the Plan so the shareholders can decide whether the purchase violates the Company's corporate value and the common interest of shareholders, and to make it possible for the Board of Directors, on behalf of the shareholders, to negotiate with the large-scale purchaser to create a framework to ensure time to provide necessary information related to the special acquisitions act along with valuating, considering, negotiating, forming an opinion, and devising an alternative to the contents in advance.

   2. Outline of the Plan

(1)Procedures, etc., for the renewal of the Plan