ラクト・ジャパン（3139） – Notice of Convocation Annual General Meeting 2022

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damage arising from the translation. To Shareholders with Voting Rights: Securities code: 3139 February 7, 2022 Motohisa Miura Managing Director Lacto Japan Co., Ltd. 2-11-2 Nihonbashi, Chuo-ku Tokyo, Japan NOTICE OF THE 24TH ANNUAL GENERAL MEETING OF SHAREHOLDERS We would like to express our appreciation for your continued support and patronage. Please be informed that the 24th Annual General Meeting of Shareholders of Lacto Japan Co., Ltd. (the “Company”) will be held as described below. You may exercise your voting rights via postal mail or the Internet, etc. and whichever method you choose to use, please complete the procedures so that your votes arrive by 5:30 p.m. on Thursday, February 24, 2022, Japan time. (Please refer to the Guide to Exercising Voting Rights on pages 3 and 4 of the Japanese original.) In order to ensure the safety of shareholders and prevent the spread of COVID-19, we would like to ask you to utilize the option to exercise your voting rights in advance via postal mail or the Internet, etc. and refrain from attending the General Meeting of Shareholders in person. 1. Date and Time: 2. Place: Friday, February 25, 2022 at 10:00 a.m. Japan time (Reception begins at 9:00 a.m.) Royal Hall, 3rd Floor, Royal Park Hotel 2-1-1 Nihonbashi-Kakigara-cho, Chuo-ku, Tokyo, Japan 3. Meeting Agenda: Matters to be reported: 1. The Business Report and Consolidated Financial Statements for the Proposals to be resolved: Proposal 1: Proposal 2: Company’s 24th Fiscal Year (December 1, 2020 – November 30, 2021) and results of the audits of the Consolidated Financial Statements by the Accounting Auditor and the Audit and Supervisory Committee 2. Non-consolidated Financial Statements for the Company’s 24th Fiscal Year (December 1, 2020 – November 30, 2021) Appropriation of Surplus Election of Six (6) Directors (excluding Directors who are Audit and Supervisory Committee Members) ◼ If attending the meeting in person, please submit the enclosed Form for Exercising Voting Rights at the venue’s reception desk. We would also like to ask you to bring this Notice of the General Meeting of Shareholders as agenda materials. ◼ If revisions are made to the Reference Documents for the General Meeting of Shareholders, the Business Report, the Non-consolidated Financial Statements, or the Consolidated Financial Statements, the revised items will be posted online on the Company’s website. ◼ Among the documents to be provided along with this Notice of the General Meeting of Shareholders, the following items are made available online on the Company’s website in accordance with the provisions of laws and regulations and Article 14 of the Articles of Incorporation, so they have not – 1 – been stated in the documents provided along with this Notice. Accordingly, the documents provided along with this Notice are part of the documents audited by the Audit and Supervisory Committee and the Accounting Auditor when preparing their audit reports. (1) Systems to ensure the properness of operations (2) Overview of implementation of systems to ensure the properness of operations (3) Basic policy on control of the company (4) Consolidated Statements of Changes in Net Assets (5) Notes to Consolidated Financial Statements (6) Non-consolidated Statement of Changes in Net Assets (7) Notes to Non-consolidated Financial Statements The Company’s website: https://www.lactojapan.com/en/Top.html – 2 – Reference Documents for the General Meeting of Shareholders Proposals and References Proposal 1: Appropriation of Surplus management issue. The Company positions the appropriate return of profits to shareholders as an important In addition, the Company aims to increase corporate value on a sustained basis and works to make investments necessary for future growth and strengthen its financial structure. Specifically, it anticipates making capital investments in the cheese manufacturing division of the Asian business, which is positioned as a pillar of the Company’s growth strategy, and business investments for building next-generation businesses and strengthening equity capital for such business expansion. Based on this policy, the Company intends to pay a year-end dividend for the fiscal year under review as indicated below. 1. Type of dividend property Cash 3. Effective date of dividend of surplus February 28, 2022 2. Matters concerning allocation of dividend property and the total amount Dividend per share of common stock of the Company: ¥32 Total: ¥315,564,128 – 3 – 4 5 Proposal 2: Election of Six (6) Directors (Excluding Directors who are Audit and Supervisory Committee Members) The terms of office of all six (6) Directors (excluding Directors who are Audit and Supervisory Committee Members; hereinafter the same shall apply in this Proposal) will end as of the conclusion of this General Meeting of Shareholders. Accordingly, the Company proposes the election of six (6) Directors. No. Name Positions and responsibilities at the Company The candidates for Director are as follows. 1 Motohisa Miura [Reappointment] Male 2 Masayuki Maekawa [Reappointment] Male 3 Koji Sukino [Reappointment] Male Takashi Abe [Reappointment] Male Shin Kojima [Reappointment] Male Managing Director In charge of overall management, Internal Audit Office and Quality Assessment Office Director Supervision of administrative divisions, in charge of Corporate Staff Division Director Assistant to the President, supervision of sales divisions and overseas business, in charge of processed meat products business and Overseas Business Office Director In charge of Asian business and Managing Director of LACTO ASIA PTE LTD. Director In charge of dairy ingredients and cheese business and Business Development Division 6 Yoshihiko Soma Male Outside Director [Reappointment] [Outside] [Independent] – 4 – No. Name (Date of birth) Career summary, positions and responsibilities at the Company, and significant concurrent positions Number of shares of the Company held April 1978 January 1999 May 2006 April 2007 June 2008 Joined Toshoku Ltd. Joined the Company General Manager of Sales Division 1, Leader of Dairy Ingredients Team One, the Company General Manager of Sales Division 1, the Company Managing Director, LACTO ASIA PTE LTD. Executive Officer, General Manager of Sales Division 1, the Company Managing Director, LACTO ASIA PTE LTD. Director, the Company Director, supervision of sales divisions and affiliates, the Company February 2017 Managing Director, the Company February 2021 Managing Director, in charge of overall management, Internal Audit Office and Quality Assessment Office, the Company (current position) February 2011 April 2014 1 Motohisa Miura (September 25, 1954) [Reappointment] [Reason for nomination as candidate for Director] Mr. Motohisa Miura has extensive business experience as the person responsible for sales divisions and overseas subsidiaries, and as a Director since 2011 and as Representative Director and Managing Director since 2017, he has been deeply involved in the Company’s management. Mr. Miura possesses knowledge related to overall management, global business management, and administration and operations, and the Company has judged him to be appropriate as a candidate for Director. April 1980 April 2000 April 2008 March 2011 February 2013 March 2013 April 2014 February 2021 Joined Toshoku Ltd. Joined the Company General Manager of Administrative Division, the Company Executive Officer, General Manager of Administrative Division, the Company Director, General Manager of Administrative Division, the Company Director, supervision of Administrative Division, the Company Director, supervision of Corporate Staff Division, the Company Director, supervision of administrative divisions, in charge of Corporate Staff Division, the Company (current position) 2 Masayuki Maekawa (October 6, 1957) [Reappointment] [Reason for nomination as candidate for Director] Mr. Masayuki Maekawa has extensive business experience in administrative divisions, including accounting and finance, serving as the person in charge of them, and as a Director since 2013, he has been involved in the Company’s management. Mr. Maekawa possesses knowledge related to the Group’s administration and operations, and the Company has judged him to be appropriate as a candidate for Director. 251,262 163,744 – 5 – No. Name (Date of birth) Career summary, positions and responsibilities at the Company, and significant concurrent positions Number of shares of the Company held April 1979 June 2003 April 2009 March 2011 April 2012 February 2014 March 2014 April 2014 February 2017 March 2018 February 2021 Joined Toshoku Ltd. Joined the Company General Manager of Sales Division 2, the Company Executive Officer, General Manager of Sales Division 2, the Company Executive Officer, General Manager of Meat and Ingredients Division, the Company Director, General Manager of Meat and Ingredients Division, the Company Director, the Company Managing Director, LACTO ASIA PTE LTD. Director, supervision of Asian business, the Company Managing Director, LACTO ASIA PTE LTD. Director, supervision of sales divisions, Asian business, and affiliates, the Company Managing Director, LACTO ASIA PTE LTD. Director, supervision of sales divisions, Asian business, and affiliates, the Company Director, Assistant to the President, supervision of sales divisions and overseas business, in charge of processed meat products business and Overseas Business Office, the Company (current position) 36,963 3 Koji Sukino (October 13, 1956) [Reappointment] [Reason for nomination as candidate for Director] Mr. Koji Sukino has extensive sales experience as the person responsible for the Processed Meat Products Division, including having launched the division, and as a Director he has overseen the Asian business since 2014 and sales divisions and affiliates since 2017. Through his extensive business experience in sales divisions and the overseas business, Mr. Sukino possesses knowledge related to the Group’s administration and operations, and the Company has judged him to be appropriate as a candidate for Director. – 6 – No. Name (Date of birth) Career summary, positions and responsibilities at the Company, and significant concurrent positions Number of shares of the Company held April 1991 December 1998 April 2013 April 2016 April 2018 March 2020 Joined Toshoku Ltd. Joined the Company General Manager of Cheese Business Division, the Company Executive Officer, General Manager of Cheese Business Division, the Company Executive Officer, overall control of sales divisions, the Company Senior Executive Officer, overall control of sales divisions, the Company Senior Executive Officer, overall control of sales divisions, General Manager of Business Development Division, the Company Director, in charge of dairy ingredients and cheese business and Business Development Division, the Company Company Managing Director, LACTO ASIA PTE LTD. (current position) December 2021 Director, in charge of Asian business, the 119,777 Takashi Abe (May 31, 1967) [Reappointment] 4 April 2020 February 2021 [Reason for nomination as candidate for Director] Mr. Takashi Abe has been involved in dairy ingredients sales for many years, and as an Executive Officer since 2016 and a Senior Executive Officer since 2020, he has served as the person responsible for domestic sales divisions including dairy ingredients, acquiring extensive sales experience. In addition, as a Director since 2021, he has been in charge of the dairy ingredients and cheese business and Business Development Division and is currently in charge of the Asian business. Through his extensive business experience in sales divisions overall, Mr. Abe possesses knowledge related to the Group’s administration and operations, and the Company has judged him to be appropriate as a candidate for Director. – 7 – No. Name (Date of birth) Career summary, positions and responsibilities at the Company, and significant concurrent positions Number of shares of the Company held April 1994 March 1999 April 2014 April 2016 Joined Toshoku Ltd. Joined the Company General Manager of Dairy Ingredients Division 1, the Company Executive Officer, General Manager of Dairy Ingredients Division 1, the Company September 2016 Executive Officer, the Company March 2020 February 2021 Shin Kojima (May 9, 1970) [Reappointment] 5 Managing Director, LACTO ASIA PTE LTD. Senior Executive Officer, the Company Managing Director, LACTO ASIA PTE LTD. Director, in charge of Asian business, the Company Managing Director, LACTO ASIA PTE LTD. December 2021 Director, in charge of dairy ingredients and cheese business and Business Development Division, the Company (current position) 155,777 [Reason for nomination as candidate for Director] Mr. Shin Kojima has been involved in dairy ingredients sales for many years, and as an Executive Officer since 2016 and a Senior Executive Officer since 2020, he has served as the person responsible for Asian business divisions, a pillar of the Company’s growth strategy, driving the growth of the business. In addition, as a Director since 2021, he has been in charge of Asian business divisions and is currently in charge of the dairy ingredients and cheese business and the Business Development Division. Through his extensive business experience related to domestic and overseas sales activities and manufacturing business operations, Mr. Kojima possesses knowledge related to the Group’s administration and operations, and the Company has judged him to be appropriate as a candidate for Director. – 8 – No. Name (Date of birth) Career summary, positions and responsibilities at the Company, and significant concurrent positions Number of shares of the Company held April 1973 June 1999 April 2005 April 2007 June 2007 June 2011 June 2015 July 2015 February 2016 June 2016 January 2021 Joined Nippon Reizo Inc. (currently Nichirei Corporation) Director, General Manager of Wide-area Sales Department, Nichirei Corporation Director, Executive Officer, Nichirei Corporation Director, Managing Executive Officer, Nichirei Corporation Director, Senior Managing Executive Officer, Nichirei Corporation Representative Director and President, IMPERIAL HOTEL KITCHEN Corporation Retired as Representative Director and President of IMPERIAL HOTEL KITCHEN Corporation Advisor, the Company Outside Director, the Company (current position) Representative Director and President, Nacx Nakamura Corporation (currently Nacx Corporation) Chairman, Nacx Corporation (current position) – 6 Yoshihiko Soma (April 19, 1950) [Reappointment] [Outside] [Independent] [Reason for nomination as candidate for Outside Director and expected roles] Mr. Yoshihiko Soma has extensive experience and a wide range of knowledge as a business executive in the food industry. The Company believes he will draw on this experience and insight to strengthen oversight of the Company’s management and provide beneficial advice on overall management, and it has therefore judged him to be appropriate as a candidate for Outside Director. Notes: 1. There are no special interest relationships between the candidates for Director and the Company. 2. Mr. Yoshihiko Soma is a candidate for Outside Director. 3. Mr. Yoshihiko Soma, who is a candidate for Outside Director, is currently an Outside Director of the Company, and he will have served in this role for six years as of the end of this General Meeting of Shareholders. 4. The Company has entered into an agreement with Mr. Yoshihiko Soma to limit his liability for damages stipulated in Article 423, Paragraph 1 of the Companies Act to the minimum liability amount stipulated in Article 425, Paragraph 1 of the act in accordance with the provisions of the Company’s Articles of Incorporation and Article 427, Paragraph 1 of the act, and if Mr. Soma’s election is approved as proposed, the Company intends to continue the said agreement. 5. Mr. Yoshihiko Soma has been registered as an independent officer based on the rules of the Tokyo Stock Exchange, and if he is elected as proposed, he will continue to be an independent officer. 6. The Company has entered into a directors and officers liability insurance agreement with an insurance company as stipulated in Article 430-3, Paragraph 1 of the Companies Act, with directors (including Audit and Supervisory Committee Members) of the Company and its subsidiaries as the insured persons. (Provided, however, that the subsidiaries of the Company that have independently entered into their own directors and officers liability insurance agreements are excluded.) The terms and conditions of the said agreement are stated on page 31 of the Japanese original. The Company intends to renew the said insurance agreement with the same terms and conditions at the next renewal. – 9 – [For Reference] The Company is aiming in the medium to long term to be a multifaceted food products company that develops trading and manufacturing operations on a global basis with dairy products as its core, and it will appoint Directors with skills that match each of its growth stages. As of the present, the skills that the Board of Directors should possess and how this corresponds with the skills of each Director have been compiled as a skills matrix from the following three perspectives. Knowledge and experience for appropriately leading management and business Corporate management and management strategy Sales and marketing International business Industry knowledge Experience in corporate management and as a corporate officer, and knowledge of and experience in formulating management strategy Knowledge and experience related to product sales and marketing Global business experience, including overseas assignments Knowledge and experience in the dairy products and meat industries and the manufacturing business Practical experience and expertise Practical experience and expertise Knowledge and experience for establishing and maintaining an appropriate management foundation Financial accounting and finance Legal affairs and compliance Personnel and human resources development Overarching perspective for ensuring sustainability Governance and sustainability Diversity and experience in other industries Governance knowledge for achieving soundness, transparency, and sustainable growth Diversity in terms of gender, nationality, executive experience in other sectors, etc. Practical experience and expertise Corporate management and management strategy Sales and marketing International business Industry knowledge Financial accounting and finance Legal affairs and compliance Personnel and human resources development Governance and sustainability Diversity and experience in other industries ◼ Directors (excluding Directors who are Audit and Supervisory Committee Members) Motohisa Miura Masayuki Maekawa Koji Sukino ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Takashi Abe Shin Kojima Yoshihiko Soma* ◼ Directors who are Audit and Supervisory Committee Members Shinichi Yamada Naofumi Hara* Toshio Hoga* Hiroko Sakamoto* ● ● ● ● *Outside Director ● ● ● ● – 10 – [For Reference] Independence Criteria for Outside Directors When selecting candidates for independent Outside Director, the Board of Directors shall determine their independence after verifying that the independence criteria established by financial instruments exchanges are met and also confirming whether or not any of items (1) through (14) below applies to the person involved either currently or within the past three fiscal years. In addition, the Board of Directors shall select as candidates for independent Outside Director the persons who can be expected to fulfill their roles and duties from an independent and objective standpoint upon consideration of the candidate’s character, insight, abilities, relationship with the Company, and other factors. (1) A person for whom the Company is a main business partner, or its business executive ・“A person for whom the Company is a main business partner” in the aforesaid refers to a person for whom payments by the Company in transactions with the Company in any of the past three fiscal years account for 2% or more of the consolidated net sales of that company in that fiscal year. (2) A main business partner of the Company, or its business executive ・“A main business partner of the Company” in the aforesaid refers to a person for whom the Company’s net sales to that company in any of the past three fiscal years account for 2% or more of the Company’s consolidated net sales in that fiscal year. (3) A consultant, accounting specialist, or legal specialist receiving a large sum of money or other property from the Company other than executive compensation (if the person receiving such property is a corporation, union, or other such organization, then a person belonging to that organization) ・A “large sum of money” in the aforesaid refers to a sum of ¥10 million or more per annum on average for the past three years if the person receiving such money is an individual, or in the case of an organization, a payment amount from the Company on average for (that organization’s) past three fiscal years that is ¥10 million or more, or 2% or more of that organization’s consolidated net sales, whichever is higher. (4) The representative partner or an employee of the Company’s accounting auditor or another accounting specialist in charge of auditing the Company or a subsidiary of the Company (5) A major shareholder of the Company, or its business executive ・“Major shareholder” in the aforesaid refers to a person who holds 10% or more of voting rights in the Company either directly or indirectly. (6) A director (limited to persons involved in business execution) or other business executives of an organization to which the Company makes large donations. ・“Large donations” in the aforesaid refers to donations that exceed ¥20 million per annum on average for the past three fiscal years. (7) A major lender of the Company, or its parent company, or their business executives ・A “major lender” of the Company in the aforesaid refers to a lender from whom the Company’s borrowings exceed 2% of consolidated total assets. (8) A person who was a business executive of the Company or a subsidiary of the Company at any time during the ten years prior to appointment (9) A business executive of a company with a director from the Company – 11 – (10) If an organization exists that corresponds to (1), (2), or (3) above at the time of appointment, then a person who belonged to that organization at any time during the three years prior to appointment (11) A person who corresponded to (4) above at any time during the three years prior to appointment (12) If an organization exists that corresponds to (6) above at the time of appointment, then a person who belonged to that organization at any time during the three years prior to appointment (13) A person who corresponded to (5) or (7) above at any time during the three years prior to (14) A close relative of a person indicated in any of (A) to (C) below (excluding persons without appointment significance) (A) A person indicated in any of (1) to (3) or in (10) or (11) above. (Provided, however, that regarding (1) and (2), executive directors, executives, and executive officers are regarded as significant persons. Also, regarding (10), if the person belongs to an organization, then employees and partners of that organization are regarded as significant persons, and regarding (11), employees, partners and other accounting specialists directly in charge of auditing the Group are regarded as significant persons.) Provided, however, that this shall not apply when independence is deemed to be effectively ensured upon comprehensive consideration of the relationship of the person involved and the close relative involved, and the qualifications, attributes, and experience, etc. of the close relative involved. (B) A business executive of a subsidiary of the Company (C) A person who corresponded to (B) above or a business executive of the Company at any time during the year prior to appointment *1. “Business executive” refers to persons stipulated in Article 2, Paragraph 3, Item 6 of the Ordinance for Enforcement of the Companies Act *2. “Close relative” refers to a relative within the second degree of kinship. – 12 –