Regarding the 64th Annual General Meeting of Shareholders held on Thursday, May 30, 2024, we will respond to the questions and opinions received from our shareholders.
Thank you very much for your valuable feedback.
We will take your feedback into consideration for the future and kindly ask for your continued support.
Q-1. Regarding the realization of management conscious of capital cost and stock price, the response was withheld because the directors did not reach a consensus on the preliminary question. Does unifying opinions not contradict the independence of outside directors? We would like to hear the opinions of the outside directors.
A-1. [ Shoichi Kobayashi President
Discussions have not progressed so far, so we have not reached a conclusion as a company. We intend to deepen discussions and present our views in the future.
Director Asami Ito
I believe that there is no such thing as a perfect company. I feel there are many things we need to address, including the happiness of our employees, and for that reason, I will continue to speak up at the Board of Directors meetings. While we cannot change things overnight, I hope you will continue to watch over us.
Director Tsuneo Negoro
We have always listened to opinions fairly and provided advice. We will continue to offer advice at future board meetings.
Q-2. The stock price has declined significantly compared to ten years ago, and the dividend amount has not increased. How will you work to enhance corporate value and gain market trust?
A-2. We consider work style reform and globalization to be important. We will monitor to ensure there are no errors in the direction set by the board of directors.
Q-3. The cause of ROE remaining below 8% for over ten years is believed to be a distorted capital structure due to excess capital. How do you think it can be optimized?
A-3. We intend to allocate it to future investment projects. We plan to have it resolved by the board of directors and proceed in the next fiscal year.
Q-4. Excess capital is hindering the 'Sanpo Yoshi' principle. A contributing factor is the net cash of 14 billion yen. Have you ever made proposals to the board of directors regarding salary increases for employees, capital investment for growth, or active shareholder returns?
A-4. I have spoken about returns to employees. Currently, we are engaging in dialogue and caring for the organizational structure.
Q-5. Please inform us of the timing for disclosing measures aimed at realizing management conscious of capital cost and stock price.
A-5. We have begun analyzing the indicators, so we will disclose them as soon as the disclosure timing becomes clear.
Q-6. Please explain the reason for holding 15.7% of treasury shares without canceling them.
A-6. We are prioritizing the recovery of our performance. We will continue discussions at the Board of Directors meetings.
Q-7. Please explain the reason for the lack of disclosure regarding the progress of the Mid-term Management Plan.
A-7. From the 5th Mid-term Management Plan onward, there has been a deviation due to significant market changes caused by COVID-19. We intend to promptly hold repeated discussions to advance the creation of the next 6th Mid-term Management Plan and aim to disclose it.
Q-8. Please explain the deviation from the Mid-term Management Plan, the non-execution of capital investment, and shareholder returns.
A-8. We are proceeding with investments aligned with carbon-free initiatives and the relocation of R&D equipment to the Mie Plant. We intend to report as soon as we have clarity.
Q-9. Please explain why the performance of the Digital Twin Business Division, which was questioned at the financial results briefing, is not documented on the website.
A-9. There is no history of intentional deletion. We will address this promptly.
Q-10. What are your thoughts on enhancing the materials for the financial results briefings?
A-10. We will sincerely address this, taking into account the advice received from everyone.
Q-11. Please tell us about the U.S. operations, which continue to report losses.
A-11. For the past six and a half years, we have focused on developing new business worldwide to become profitable. We have also worked on reducing losses and implemented staff reductions last fiscal year. For this business year, we aim to achieve a break-even point.
Q-12. What are your thoughts on the temporary delisting?
A-12. We intend to maintain the listing. We believe it is important to have a healthy internal opposition within the company.
Q-13. Please tell us about the reduction of policy-held shares.
A-13. We are proceeding with the unwinding of cross-shareholdings.
Q-14. If there is a budget for KIMOTO VOICE, we request the enhancement of financial results briefing materials.
A-14. We will take your advice into consideration.
Q-15. Please explain the intention behind Chairman Kimoto relinquishing his representative authority.
A-15. This is to promote autonomous and decentralized group management. We believe that if the three representative directors demonstrate their capabilities, they will surpass Chairman Kimoto. We look forward to your continued support.
Q-16. Please tell us about the transition to a holding company structure.
A-16. We are not considering a transition.
Q-17. Will functions also be relocated due to the change in the head office location?
A-17. The head office will be moved to Mie, but the functions in Saitama will be carried out using the global network.
Q-18. Regarding the gifts for the shareholders' meeting, why has the sake been discontinued?
A-18. We aimed to sell in Singapore, but progress did not go as planned. Therefore, we have decided to temporarily halt sake production and reconsider from the marketing stage.