新京成電鉄（9014） – 104th Term Notice of the Ordinary General Meeting of Shareholders

Important Notice to U.S. Shareholders This share exchange and business combination is made for the securities of a foreign company. The offer is subject to disclosure requirements of a foreign country (Japan), which are different from those of the United States. Financial statements included in this document, if any, have been prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies. It may be difficult for you to enforce your rights and any claim you may have arising under the federal securities laws, since the issuer is located in a foreign country, and some or all of its officers and directors may be residents of a foreign country. You may not be able to sue a foreign company or its officers or directors in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a foreign company and its affiliates to subject themselves to a U.S. court’s judgment. You should be aware that the issuer may purchase securities otherwise than under the exchange offer, such as in open market or privately negotiated purchases. This document has been translated from the Japanese-language original for reference purposes only. While this English translation is believed to be generally accurate, it is subject to, and qualified by, in its entirety, the Japanese-language original. Such Japanese-language original shall be the controlling document for all purposes. Term 104th Notice of the Ordinary General Meeting of Shareholders Date and time: Tuesday, June 28,2022, at 10:00 a.m. Venue: Conference Room in the Head Office Shin-Keisei Electric Railway Co., Ltd. 4-1-12, Kunugiyama, Kamagaya-shi, Chiba (Nearest station: Kunugiyama, Shin-Keisei Line) Everyday, for something a bit new Shin-Keisei Electric Railway Co., Ltd. Company Code 9014 Contents Notice of the 104th Ordinary General Meeting of Shareholders ··············································· Reference Materials for the General Meeting of Shareholders Proposal No.1: Approval for the Share Exchange Agreement between Shin-Keisei Electric Railway Co., Ltd. and Keisei Electric Railway Co., Ltd. Proposal No. 2: Disposition of Surplus ················ Proposal No. 3: Election of 11 Directors ············ (Attached Materials) Business Report ········································ Consolidated Financial Statement ················· Non-consolidated Financial Statements ·········· Audit Reports ············································ 1 6 42 43 56 75 78 81 Deadline voting rights in writing for exercising By no later than 6:00 p.m. on Monday, June 27, 2022 To shareholders: (Company code 9014) June 3, 2022 4-1-12, Kunugiyama, Kamagaya-shi, Chiba Shin-Keisei Electric Railway Co., Ltd. President C.E.O. Yukihito Mashimo Notice of the 104th Ordinary General Meeting of Shareholders You are cordially notified of the 104th Ordinary General Meeting of Shareholders of Shin-Keisei Electric Railway Co., Ltd. (the “Company”), which will be held as described in this notice. You are requested to consider refraining from attending the meeting in person at the venue below to help prevent the spread of COVID-19 infections. Shareholders may exercise your voting rights in advance in writing, which we strongly urge you to do. If you exercise your voting rights in writing, please review the attached “Reference Materials for the General Meeting of Shareholders,” indicate your vote of approval or disapproval on the enclosed Voting Rights Exercise Form, and return it to the Company. The Form must be received by the Company by no later than 6:00 p.m. on June 27, 2022, the previous day of the meeting. 1 Date and time 2 Venue Tuesday, June 28, 2022 at 10:00 a.m. Conference Room in the Head Office Shin-Keisei Electric Railway Co., Ltd. 4-1-12, Kunugiyama, Kamagaya-shi, Chiba (Nearest station: Kunugiyama, Shin-Keisei Line) 3 Purpose of the meeting Matters to reported be 1. The Business Report and Consolidated Financial Statements for the 104th Term (from April 1, 2021 through March 31, 2022), and Audit Reports of the Accounting Auditor and the Audit & Supervisory Board concerning the results of the audits of the Consolidated Financial Statements 2. Non-consolidated Financial Statements for the 104th Term (from April 1, 2021 through March 31, 2022) – 1 – Proposal No. 1: Approval for the Share Exchange Agreement between Matters to resolved be Shin-Keisei Electric Railway Co., Ltd. and Keisei Electric Railway Co., Ltd. Proposal No. 2: Appropriation of Surplus Proposal No. 3: Election of Eleven (11) Members of the Board – 2 – ■ For those attending the meeting on the day stated above, please submit the enclosed Voting Rights Exercise Form at the reception desk. ■ “Systems to Ensure Appropriateness of Operations and Outline of the Operational Status of the Systems” in the Business Report, and “Consolidated Statements of Changes in Net Assets” and “Notes to Consolidated Financial Statements” in the Consolidated Financial Statements, and “Non-consolidated Statements of Changes in Net Assets” and “Notes to Non-consolidated Financial Statements” in the Non-consolidated Financial Statements are posted on the Company website (https://www.shinkeisei.co.jp/) pursuant to the provisions of the relevant laws and regulations and Article 16 of the Articles of Incorporation of the Company, and thus, they are not included in the materials attached to this convocation notice of the 104th Ordinary General Meeting of Shareholders. The Business Report, Consolidated Financial Statements and Non-consolidated Financial Statements audited by the Audit & Supervisory Board members and Accounting Auditor are included in the materials attached to this convocation notice of the 104th Ordinary General Meeting of Shareholders, and also provided on the Company website above. Among the materials regarding the Proposal No. 1 “Approval for the Share Exchange Agreement between Shin-Keisei Electric Railway Co., Ltd. and Keisei Electric Railway Co., Ltd.,” the Articles of Incorporation of Keisei Electric Railway Co., Ltd. and Non-consolidated Financial Statements of the said company for the latest fiscal year are posted on the Company website (https://www.shinkeisei.co.jp/) pursuant to the provisions of the relevant laws and regulations and Article 16 of the Articles of Incorporation of the Company, and, thus, not included in the materials attached to this convocation notice of the 104th Ordinary General Meeting of Shareholders. ■ Please be informed that any amendments made to the Reference Materials for the General Meeting of Shareholders, Business Report, Consolidated Financial Statements and Non-the Company’s website consolidated Financial Statements will be posted on (https://www.shinkeisei.co.jp/). The spread of COVID-19 infections remains to be a serious concern. We will inform you on the Company website (https://www.shinkeisei.co.jp/), if we will be forced to significantly adjust the operation of the 104th Ordinary General Meeting of Shareholders due to factors including changes in infection status. – 3 – – 4 – – 5 – 【第１・２号議案】 【Proposal No. 1 & Proposal No. 2】 賛成の場合：「賛」の欄に〇印 To mark your approval: Circle “for” 否認の場合：「否」の欄に〇印 To mark your disapproval: Circle “against” 【第３号議案】 【Proposal No. 3】 全員賛成の場合：「賛」の欄に〇印 To mark your approval of all candidates: Circle “for” 全員否認の場合：「否」の欄に〇印 To mark your disapproval of all candidates: Circle “against” 一部の候補者を否認する場合： To mark your disapproval of some of the candidates: 「賛」の欄に〇印をご表示のうえ、 Circle “for,” and then write the number attached to 否認する候補者の番号をご記入ください。 every candidate you disapprove 　議決権行使書（Voting Rights Exercise Form）　新京成電鉄株式会社 御中　（To Shin-Keisei Electric Railway Co., Ltd.）基準日現在のご所有株式数　　　　　株　株主総会日　議決権の数　　　　　　　　　　　個(number)議決権の数　　　　　個議案(Proposal)Number of your voting rights: _____ 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇第１号（No. 1）賛（for）否（ against） 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇第２号（No. 2）賛（for）否（ against）賛（for）否（ against）1.〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇2.〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇 〇〇〇〇〇〇〇〇〇〇〇〇〇〇〇 〇〇〇〇〇〇〇〇〇3.〇〇〇〇〇〇〇〇〇 〇〇〇〇〇〇〇〇〇新京成電鉄株式会社（Shin-Keisei Electric Railway Co., Ltd.）議決権の数は１単元ごとに１個となります。但し　　　を除く(Excluding)(Number of your voting rights)　(Date of the General Meeting of Shareholders)原案に対する賛否(For or against for proposal)第３号（No. 3）Note: The number of voting rights shallbe one for every Share Unit.　年　月　日 (Year)(Month) (Date) 　年　月　日 (Year)(Month) (Date) Number of shares you hold as of the record date: _____ sharesお願い（Request）Reference Materials for General Meeting of Shareholders Proposal No. 1 for the Share Exchange Agreement Approval between Shin-Keisei Electric Railway Co., Ltd. and Keisei Electric Railway Co., Ltd. Shin-Keisei Electric Railway Co., Ltd. (“Shin-Keisei” or the “Company”) and Keisei Electric Railway Co., Ltd. (“Keisei”) (collectively the “Companies”), at their respective board of directors meetings held on April 28, 2022, resolved to conduct such a share exchange between the Companies that will make Keisei the wholly-owning parent company and Shin-Keisei its wholly-owned subsidiary (the “Share Exchange”), and a share exchange agreement (the “Share Exchange Agreement”) was executed by and between the Companies on the same date, as stated below. We would therefore like to request your approval for the Share Exchange Agreement. Keisei will execute a simplified share exchange procedure under Article 796, Paragraph 2 of the Companies Act (Law, No. 86, of 2005, as amended. The same shall apply hereinafter.) without obtaining approval from a general meeting of shareholders, and the Company will execute the Share Exchange after obtaining approval for the Share Exchange Agreement by a resolution of this General Meeting of Shareholders, with the effective date of September 1, 2022. On August 30, 2022, prior to September 1, 2022 (the “Planned Date”), the effective date for the Share Exchange, the common stock of the Company (“Shin-Keisei Stock”) will be delisted from the Standard Market of the Tokyo Stock Exchange, Inc. (the “Tokyo Stock Exchange”) (with the final trading day Reason for the Share Exchange, Outline of the Share Exchange Agreement, and other items being August 29, 2022). regarding this proposal are stated as below. 1. Reason for the Share Exchange Keisei was founded in June 1909 as Keisei Denki Kido Co., Ltd. (subsequently renamed as Keisei Electric Railway Co., Ltd. in June 1945), a train service operator for religious pilgrimages to – 6 – Naritasan Shinshoji Temple. In November 1912, Keisei Electric Railway came into operation, commencing a five-car train service between Oshiage and Edogawa and between Takasago and Shibamata along a 11.5-km line. Keisei has since worked to expand its railway network and deliver improved customer convenience through: i) becoming in December 1960 Japan’s first surface railway operator to share tracks with a subway operator; ii) extending its railway line to Narita International Airport in May 1978; iii) linking the railway directly to a basement terminal of the airport in March 1991; and iv) launching the Narita Sky Access Line service in July 2010 as a new line from central Tokyo to the airport. Keisei, developing various enterprises based on the foundation of its railway service, launched a directly operated bus business in July 1932 and a real estate company in November 1933. It later expanded into the distribution business and was a leisure and service operator from the 1950s onward. As of April 28, 2022, the Keisei Electric Railway Group comprises Keisei, 89 subsidiaries, and eight affiliates (the “Keisei Group”). Under the group business philosophy of contributing to social development by providing high-quality, safe, and comfortable goods and services that satisfy customers and facilitating the growth of sound businesses, the Keisei Group provides various services such as transportation, real estate, and distribution businesses as a comprehensive lifestyle corporate group, mainly in eastern Tokyo, Chiba, and Ibaraki. In April 2019, the Keisei Group established its Medium-Term Management Plan (the “E4 Plan”) and executed it for three years to March 31, 2022 in order to increase its revenue and grow in a sustainable manner even amid the changing environment for the Group. The E4 Plan has taken into account a future decline in population, due to a falling birth rate and aging population, in areas along its train lines and the need for further development of Narita International Airport. The E4 Plan’s basic strategies are to: i) engage with local stakeholders to raise the Keisei Group’s profile; ii) manage the Group more effectively and strengthen its corporate governance; iii) cultivate the inbound tourism market; iv) increase earnings by strengthening existing businesses; v) ensure safety and security and improve service quality; and vi) establish a new growth vision. The Keisei Group has been achieving stable results by working to develop lineside areas in a sustainable manner, meeting increasingly diverse social needs, providing safe and highly satisfactory services on a Group-wide basis, and expanding its business domains. The environment surrounding the Keisei Group, most notably arising from the novel coronavirus – 7 – (“COVID-19”), affected its flagship transportation business, coupled with leisure and service business. The pandemic resulted in declining demand in the recent past for inbound tourism and reduced human travel activity following a period of growing airport transportation driven by the inbound tourism boom. Effects from COVID-19 should gradually subside, putting Keisei Group back on a growth track helped by increasing airline passengers from Narita International Airport as the airport continues to improve its functionality. However, the fear of increased operating costs may become reality due to soaring fuel prices while lineside areas are predicted to suffer a decline in the working-age population due to the low birth rate and aging population in the medium to long term. In our view, these are factors that will threaten the Keisei Group’s flagship business revenue-earning opportunities in the future. Meanwhile, founded in October 1946 for the purpose of developing the northwestern part of Chiba Prefecture, the Company took over a military practice train line belonging to the former Japanese army to conduct service using four-car trains along a 2.5-km route between Shintsudanuma and Yakuendai since December 1947. Subsequently, the Company extended the entire network to Matsudo in April 1955 on a single-track basis, turned the route between Shintsudanuma and Matsudo into a double-track line in February 1975, and connected to the Keisei Chiba line from December 2006, thereby enhancing transportation capacity and improving customer convenience. Based on its railway business, the Company operated various businesses. It launched a bus business in January 1949, and expanded to real estate in February 1955 and services from the 1970s onward. As of April 28, 2022, the organization consists of the Company, seven subsidiaries, and two affiliates (the “Shin-Keisei Group”). Upholding the brand slogan of “Every Day, A Little, and New,” the Shin-Keisei Group undertakes transportation, real estate, and convenience operations mainly in northwestern Chiba Prefecture. In April 2019, the Shin-Keisei Group formulated its Medium-Term Management Plan (the “S4 Plan”) and carried it out for three years to March 2022. The purpose of the S4 Plan is to make the Shin-Keisei Group a company trusted by customers and local communities through business operations focused on safety, security, and comfort, while building attractive lineside areas where people want live and want move to through providing services that anticipate their needs. The S4 Plan upheld a basic strategy to: i) fulfill the Shin-Keisei Group’s responsibilities as a social and public infrastructure operator; ii) complete the Kamagaya City railway elevation project and – 8 – develop areas beneath elevated railway lines; iii) build local community spaces, driven by the company’s flagship business, and pursue new businesses; and vi) achieve a robust corporate structure for future generations. The Company has been making steady progress in its endeavors to raise the value of lineside areas by proactively implementing permanent measures for safety and security, reinforcing its flagship business and expanding its peripheral businesses, and improving the quality of services delivered. The Shin-Keisei Group aims to build its level of trust with customers and local communities by enhancing its appeal through further strengthening its business foundations, creating new enterprises, and revitalizing local areas via coexistence with and support of communities along lineside areas, and improving its local brand power based on such efforts. The Shin-Keisei Group has been taking a range of measures to counter the effects on its long-term revenue arising from the low birth rate and aging population, coupled with a decreasing working-age population, in its lineside areas. These areas are home to many housing complexes and homes that were developed during Japan’s high-growth era. The Shin-Keisei Group, however, has recently been experiencing the decreasing number of passengers in its transportation businesses due to declining human travel activity since February 2020, owing to the spread of COVID-19. This is despite the fact that the Shin-Keisei Group, being an organization whose flagship business is commuting-centric local transportation, is predicted to achieve an earnings recovery relatively earlier than its peers. Even amid the challenging operating environment marked by future uncertainty as described above, the Companies consider it necessary to strengthen their business fundamentals and competitiveness in their fields operation to achieve medium- to long-term growth, as well as to improve their corporate value. Furthermore, as a trend in the transportation industry to which they belong, they must run their businesses in a way that emphasizes corporate social responsibility and environmental efforts. These include contributing to attaining SDGs and addressing ESG and the Task Force on Climate-related Financial Disclosures (TCFD). Keisei and the Company, as companies responsible for providing social and public infrastructure, have offered safe, secure, and comfortable transportation services, while implementing measures such as introducing energy-saving trains with barrier-free designs, new facilities, etc., and activities in cooperation with local municipalities and organizations along the train – 9 – lines. We also think that the Companies must create and deliver greater added-value, with the aim of contributing to attaining SDGs and helping to build a sustainable society with diversity and inclusion where no one is left behind. To date, Keisei has been collaborating with the Company, an equity-method affiliate, in northwestern Chiba Prefecture in the form of exchanging information on marketing and safety measures, joint development of train cars, and joint purchasing of materials in the railway business. In addition, they have been exchanging information on marketing and safety measures and shared operations for express lines in the bus business. Keisei, however, thinks that both companies, while now running their operations independently as listed companies, do not necessarily apply their business resources efficiently enough and lack flexibility in their decision making. One issue is the fact that the Company does not necessarily prioritize seeking business synergy through collaboration with Keisei because, for example, the Company must always compare transactions with Keisei with third-party transactions with respect to need and rationality in consideration of a potential conflict of interest with the Company’s shareholders other than Keisei (hereinafter, the “Minority Shareholders”) and for the purpose of remaining independent as a listed company. Business resources injected by Keisei into the Company end up being more restrained than if the latter was turned into a wholly owned subsidiary, because at least half of the capital injected to the latter is attributed to Minority Shareholders’ profit when premised on the existing capital structure. To improve both companies’ corporate value and enable them to grow in the medium to long term as above described amid the aforementioned challenging operating environment, while contributing to attaining SDGs and addressing ESG and the Task Force on Climate-related Financial Disclosures (TCFD), Keisei concluded that it would be essential to: i) convert the Company into a wholly-owned subsidiary of Keisei; ii) promptly build a structure in which to speed up decision-making by efficiently utilizing finite group business resources; iii) further enhance collaboration between both companies; and iv) operate the Keisei Group and Shin-Keisei Group to operate with a sense of unity. For this reason, in October 2021 Keisei submitted to the Company an initial proposal intended to convert the latter into a wholly-owned subsidiary of the former in the Share Exchange. Upon receiving the initial proposal from Keisei, the Company began to consider the proposed Share Exchange. In so doing, the company decided to consult with Keisei after arranging for a consideration of readiness such as establishing on January 28, 2022 a special committee composed solely of – 10 – independent members who have no interest in Keisei (hereafter referred to as the “Special Committee”; for details, see “3.(3) 2) Measures to avoid a conflict of interest,” shown below) in order to secure fairness, transparency, and objectivity for the Company’s board of directors’ decision-making process regarding the initial proposal from Keisei and to prevent arbitrary or unfair decision-making. To date, the Shin-Keisei Group and the Keisei Group have been striving to evolve to become companies of choice by reinforcing their respective corporate structures through formulating and executing medium- to long-term management plans. However, to grow sustainably and fulfill their social responsibilities as locally rooted companies amid the challenging operating environment described above, it was concluded after discussions within each company that to improve their corporate value, the companies would benefit from building a solid cooperative relationship through converting the Company into a wholly owned subsidiary of Keisei and leveraging economies of scale and business resources such as operational expertise. Specifically, we think the Share Exchange will bring about the following synergies: (i) reinforcing both companies’ business foundation in northwestern Chiba Prefecture and revitalizing local communities; (ii) strengthening both companies’ competitiveness and expanding their business scale through mutual use of their business resources; (iii) achieving an efficient collaborative framework through leveraging economies of scale. Based on such understanding, the Companies have reached an agreement through consideration and discussion of the terms and conditions of the proposed Share Exchange, including the share exchange ratio, and, at their respective board of directors’ meetings held on April 28, 2022, resolved to conduct the Share Exchange and entered into the Share Exchange Agreement on April 28, 2022. This recognition will enable the Keisei Group to optimize its business resources and efficiently and further share operating strategies with the Comapny, thus reinforcing both Companies’ competitiveness, which in our view will enhance their corporate value and prove to be a reorganization beneficial to shareholders of both Companies. – 11 – 2. Outline of the Share Exchange Agreement The content of the Share Exchange Agreement executed between the Companies as of April 28, 2022 is as follows: Share Exchange Agreement (Copy) This Share Exchange Agreement (hereinafter this “Agreement”) is made and entered into by and between Keisei Electric Railway Co., Ltd. (hereinafter “Keisei”) and Shin-Keisei Electric Railway Co., Ltd. (hereinafter “Shin-Keisei”) as of April 28, 2022. The parties hereto agree as follows: Article 1. Share Exchange The parties shall conduct a share exchange that makes Keisei the wholly-owning parent company and Shin-Keisei its wholly-owned subsidiary (hereinafter the “Share Exchange”). By the Share Exchange, Keisei shall acquire all the issued shares in Shin-Keisei (excluding the shares in Shin-Keisei that are owned by Keisei). Article 2. Trade Name and Address of Companies That Become the Wholly-owning Parent Company and the Wholly-owned Subsidiary Due to the Share Exchange. The trade name and address of the parties shall be as follows: 1. Keisei (Wholly-owning parent company) Trade name: Keisei Electric Railway Co., Ltd. Address: 3-3-1 Yawata, Ichikawa-shi, Chiba 2. Shin-Keisei (Wholly-owned subsidiary) Trade name: Shin-Keisei Electric Railway Co., Ltd. Address: 4-1-12 Kunugiyama, Kamagaya-shi, Chiba Article 3. Shares Granted upon the Share Exchange and Allotment Thereof 1. Upon the Share Exchange, Keisei shall grant to the shareholders of Shin-Keisei (shareholders excluding Keisei after the retirement of Shin-Keisei’s treasury stock under Article 8; the same shall apply hereinafter in this Article) as of the time immediately before the – 12 – acquisition by Keisei of all the issued shares in Shin-Keisei in the Share Exchange (hereinafter the “Record Date”) the number of shares of common stock of Keisei that is calculated by multiplying the total number of shares of common stock of Shin-Keisei held by those shareholders of Shin-Keisei by 0.82, as money, etc. in lieu of the shares of common stock of Shin-Keisei. 2. Upon the Share Exchange, Keisei shall allot the shares of its common stock to each shareholder of Shin-Keisei as of the Record Date at the rate of 0.82 shares of common stock of Keisei for one share of common stock of Shin-Keisei held by such shareholder. 3. If any fraction less than one share arises when calculating the number of shares of common stock of Keisei to be allotted to a shareholder of Shin-Keisei in accordance with the provisions of the preceding two paragraphs, Keisei shall sell the number of shares of its common stock equivalent to the total of those fractional shares (if the total has any fraction less than one share, it shall be rounded down) pursuant to the provisions of Article 234 of the Companies Act and other applicable laws and distribute the sales proceeds to each of those shareholders according By the Share Exchange, Keisei’s capital and reserves shall be increased by the amounts 2. Amount of capital reserve: Amount determined by Keisei in accordance with the provisions to the number of his or her fractional shares. Article 4. Amount of Keisei’s Capital and Reserves specified below: 1. Amount of capital: 0 yen of Article 39 of the Ordinance on Company Accounting 3. Amount of retained earnings reserve: 0 yen Article 5. Effective Date The Share Exchange shall come into force on September 1, 2022 (hereinafter the “Effective Date); provided, however, that this date may be changed by consultation and agreement between the parties, if such change is necessary for the procedures of the Share Exchange or for other reasons. Article 6. Approval of the General Meeting of Shareholders – 13 – 1. Keisei shall conduct the Share Exchange pursuant to Article 796, Paragraph 2 of the Companies Act without obtaining the approval of the general meeting of shareholders for this Agreement as provided in Article 795, Paragraph 1 of the Companies Act; provided, however, that if it is necessary to obtain approval for this Agreement by a resolution of the general meeting of shareholders of Keisei pursuant to the provisions of Article 796, Paragraph 3 of the Companies Act, Keisei shall request that the general meeting of shareholders adopt a resolution for the approval of this Agreement and the matters necessary for the Share Exchange no later than the day immediately prior to the Effective Date. 2. Keisei shall request that the ordinary general meeting of shareholders to be held on June 28, 2022 (hereinafter the “Ordinary General Meeting of Shareholders of Keisei”) adopt a resolution for the approval of this Agreement and the matters necessary for the Share Exchange. 3. The parties may change the date of the Ordinary General Meeting of Shareholders of Keisei by consultation and agreement, if such change is necessary for the procedures of the Share Exchange or for other reasons. Article 7. Business Operation, etc. During the period from the date of execution hereof to the Effective Date, the parties shall perform their duties, manage their property and operate their business with the due care of a prudent manager. If either party intends to perform any act that greatly affects its property, rights or obligations, the parties shall consult with each other and reach an agreement before performing that act. Article 8. Retirement of Treasury Stock Shin-Keisei shall retire all shares of treasury stock held by Shin-Keisei on the Record Date (including shares acquired by Shin-Keisei due to a share repurchase request exercised by its shareholders under Article 785 of the Companies Act in connection with the Share Exchange) by a resolution of a meeting of the Board of Directors of Shin-Keisei held no later than the day immediately prior to the Effective Date. Article 9. Dividends of Surplus 1. The parties shall not adopt a resolution for dividends of surplus specifying, as the record date, any day after the date of execution hereof before the Effective Date, except for the – 14 – dividends specified in the following paragraph. 2. Notwithstanding the provisions of the preceding paragraph, dividends of surplus may be paid (i) by Keisei to its shareholders entered or recorded in the final shareholder registry as of March 31, 2022 or registered pledgees of shares up to 1,460 million yen in total and (ii) by Shin-Keisei to its shareholders entered or recorded in the final shareholder registry as of March 31, 2022 or registered pledgees of shares up to 140 million yen in total; provided, however, that the parties may amend the amount of such dividends of surplus by a written agreement. Article 10. Amendment and Cancellation of the Share Exchange If any event causes, or is found to cause, a serious problem about the implementation of the Share Exchange during the period from the date of execution hereof to the Effective Date or renders the achievement of the purpose of this Agreement difficult, the parties shall consult with each other in good faith and may, by agreement, amend the conditions of the Share Exchange or other provisions of this Agreement, cancel the Share Exchange or terminate this Agreement. Article 11. Effect of This Agreement This Agreement shall lose its effect if the parties cannot obtain the approval of the general meeting of shareholders of Keisei set forth in the proviso of Article 6, Paragraph 1 by the day immediately prior to the Effective Date (only when this Agreement needs to be approved by the general meeting of shareholders of Keisei pursuant to the provisions of Article 796, Paragraph 3 of the Companies Act), approval of the general meeting of shareholders of Shin-Keisei or approval of the relevant authorities, etc. required for the Share Exchange under laws and regulations or if the Share Exchange is cancelled or this Agreement is terminated in accordance with the preceding Article. Article 12. Governing Law and Court of Jurisdiction 1. This Agreement shall be governed by and construed in accordance with the laws of Japan. 2. The parties agree that the Tokyo District Court shall have exclusive jurisdiction for the first instance over all disputes in court arising in connection with this Agreement. Article 13. Consultation Any matter not provided herein or any doubt arising in connection with the provisions hereof shall be settled by consultation between the parties in good faith. – 15 – IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate by affixing their names and seals hereto, and each party shall retain one original copy hereof. April 28, 2022 Keisei: 3-3-1 Yawata, Ichikawa-shi, Chiba Keisei Electric Railway Co., Ltd. Representative Director and President Toshiya Kobayashi [Seal] Shin-Keisei: 4-1-12 Kunugiyama, Kamagaya-shi, Chiba Shin-Keisei Electric Railway Co., Ltd. President C.E.O. Yukihito Mashimo [Seal] – 16 – 3. Matters related to the reasonableness of the consideration for the Share Exchange (1) Total number of shares as a consideration for the Share Exchange and matters related to the reasonableness of allotment 1) Description of allotment for the Share Exchange Keisei (wholly owning parent company) Shin-Keisei (wholly owned subsidiary) Allotment ratio for the Share Exchange Number of shares to be granted due to the Share Exchange Note 1: Allotment ratio for common stock １ 0.82 Common stock of Keisei: 4,983,417 shares (planned) 0.82 shares of common stock of Keisei (“Keisei Stock”) will be allotted for one share of Shin-Keisei stock. However, for shares of Shin-Keisei held by Keisei (4,899,895 shares as of April 28, 2022), no shares will be allotted in the Share Exchange. If any significant change is made to any of the various conditions forming the basis of calculation, there is potential for the aforementioned allotment ratio for the Share Exchange (“Share Exchange Allotment Ratio”) to be revised after being discussed and agreed to by both companies. Note 2: Number of shares of Keisei to be granted due to the Share Exchange: 4,983,417 shares (planned) The aforementioned number of shares was calculated in accordance with the number of outstanding shares of Shin-Keisei (11,023,228 shares) on March 31, 2022 and the number of shares of its treasury stock (45,994 shares on March 31, 2022 and the number of shares of Shin-Keisei held by Keisei (4,899,895 shares) on April 28, 2022. Keisei will grant, in place of the shares of Shin-Keisei it holds, shares of Keisei in a number calculated in accordance with the ratio of the Share Exchange to parties that are shareholders of Shin-Keisei on a date immediately prior to Keisei acquiring all outstanding shares of Shin-Keisei in the Share Exchange (excluding shares of Shin-Keisei held by Keisei) (“Record Date”) (referring to parties that are shareholders after the treasury stock set forth below is retired, and excluding Keisei). Keisei will appropriate shares of treasury stock it holds (1,605,651 shares on April 28, 2022) as shares of Keisei to be granted in the Share Exchange, and will refrain from issuing new shares. To maximize shareholder profit through expeditiously and flexibly – 17 – implementing capital policies as well as improve in capital efficiency, Keisei will separately acquire treasury stock in a number up to 5,000,000 shares (the “Treasury Stock Acquisition”). The outline of the treasury stock acquisition is as follows: (i) type of stock subject to the acquisition: Keisei Stock; (ii) maximum total number of shares that can be acquired: 5,000,000 shares (percentage of the total number of outstanding shares (excluding the treasury stock): 2.93%); (iii) total amount of the stock acquisition: (up to) 18,000,000,000 yen; (iv) period for the treasury stock acquisition: from April 29, 2022 to August 31, 2022; (v) acquisition method: market purchase including treasury stock purchase through the off-hours trading system (ToSTNeT-3) of the Tokyo Stock Exchange; (vi) other items required: all decisions on the required items other than (i) to (v) above regarding the treasury stock acquisition shall be left entirely to the Representative Director and President; (vii) (reference) treasury stock held as of April 28, 2022: total number of outstanding shares (excluding the treasury stock), 170,805,534 shares and number of treasury stock, 1,605,651 shares. All shares of treasury stock held by Shin-Keisei on the Record Date (including shares of treasury stock to be acquired by Shin-Keisei due to the share repurchase request exercised pursuant to Article 785, Paragraph 1 of the Companies Act in the Share Exchange) will be retired with immediate effect by resolution of a board of directors meeting held no later than a day prior to The total number of shares of Keisei to be granted in the Share Exchange is subject to change in the future due to acquisition the Planned Date for the Share Exchange. or retirement of treasury stock by Shin-Keisei. Note 3: Handling of shares in quantities smaller than a Round Lot Shareholders of Shin-Keisei that will hold shares of Keisei in quantities smaller than 100 shares (a “Round Lot”) due to the Share Exchange will be allowed to use the programs shown below. Shares in quantities smaller than a Round Lot cannot be sold on a financial instrument exchange. (i) Program for repurchase of shares in quantities smaller than a Round Lot (sale of shares in quantities smaller than a Round This is a program in which shareholders of Shin-Keisei that will hold shares of Keisei in quantities smaller than a Round Lot are entitled to request that Keisei repurchase such shares pursuant to Article 192, Paragraph 1 of the Companies Act. (ii) Program for additional purchase of shares in quantities smaller than a Round Lot (additional purchase of shares to make Lot) up a Round Lot) This is a program in which shareholders of Shin-Keisei that will hold shares of Keisei in quantities smaller than a Round Lot are entitled to request that Keisei sell shares of it that, if combined with shares totaling quantities smaller than a Round Lot they hold, reach a Round Lot and to additionally purchase shares of Keisei pursuant to Article 194, Paragraph 1 of the – 18 – Companies Act and the Articles of Incorporation of Keisei. Note 4: Handling of fractional shares For shareholders of Shin-Keisei that will be granted fractional shares of Keisei that in total are less than one share due to the Share Exchange, shares of Keisei will be sold in a number equivalent to the number of combined total fractional shares (any fraction less than one share included in the combined total number will be truncated) pursuant to Article 234 of the Companies Act and other applicable laws, and proceeds from the sale will be granted to each of such shareholders in accordance with the number of his/her fractional shares. 2) Grounds for allotment involved in the Share Exchange (i) Grounds and reasons for allotment As stated in the section above titled “1. Reason for the Share Exchange,” Keisei in October 2021 put forward the proposal for the Share Exchange to Shin-Keisei, followed by discussions and negotiations taking place repeatedly in earnest by the Companies. As a result, the Companies concluded that, in order to improve the corporate value of each of them, it would be the best possible decision for Keisei to convert Shin-Keisei into a wholly owned subsidiary of Keisei. In calculating the ratio of the Share Exchange stated in the section titled “1) Description of allotment for the Share Exchange,” a ratio that is used for the Share Exchange, each of the Companies decided to individually request a third-party calculation agency independent from them to calculate the ratio of the Share Exchange in order to ensure that the calculations are fair and reasonable. Keisei selected Mizuho Securities Co., Ltd. (“Mizuho Securities”) as a financial advisor and third-party calculation agency for the company, while Shin-Keisei selected the Development Bank of Japan Inc. (“Development Bank of Japan”) as a financial advisor and third-party calculation agency for the company. fairness.” Keisei concluded it was appropriate to conduct the Share Exchange using the ratio for the Share Exchange. This is because it realized that the ratio was reasonable and beneficial to its minority shareholders as a result of having consulted and deliberated discreetly in consideration of a Share Exchange ratio calculation document received from third-party calculation agency Mizuho Securities on April 27, 2022, advice from legal advisor Takusyou Sogo Law Office, and the result of due diligence on Shin-Keisei conducted by Keisei, as stated in the section below titled “(3) 1) Measure to secure – 19 – Meanwhile, Shin-Keisei concluded it was appropriate to conduct the Share Exchange using the ratio from the Share Exchange. This is because it realized that the ratio was reasonable and beneficial to its shareholders as a result of having discreetly consulted and deliberated multiple times with Keisei on the terms and conditions of the Share Exchange, including the ratio for the Share Exchange, in consideration of a Share Exchange ratio calculation document received from third-party calculation agency the Development Bank of Japan on April 27, 2022, advice from legal advisor Oh-Ebashi LPC & Partners, and the result of due diligence on Keisei performed by Shin-Keisei, instruction and advice from this special committee composed solely of independent members that are not interested parties of Keisei, and a recommendation letter received on April 27, 2022 from the committee, as stated in the sections below titled “(3) 1) Measure to secure fairness” and “(3) 2) Measures to avoid a conflict of interest.” Based on the considerations set forth above, the Companies held negotiations and discussions and as a result, decided to conduct the Share Exchange using the Share Exchange ratio. The Share Exchange Agreement was entered into by and between the Companies by resolution of their respective boards in board meetings held on April 28, 2022, as they recognized that doing so was reasonable and in the interests of their shareholders. The ratio for the Share Exchange is subject to change upon consultation by the Companies if any significant revision is made to the terms and conditions forming the basis for the calculation. (ii) Matters related to calculation (a) Name of calculation agency and its relationship with the Companies Mizuho Securities, a third-party calculation agency for Keisei, is a calculation agency independent from the Companies and the Share Exchange, does not constitute an interested party of the Companies, and has no significant interest in them that involves a conflict of interest with the Companies with respect to the Share Exchange. Mizuho Securities has status as a shareholder of Keisei, and Mizuho Bank, Ltd. (“Mizuho Bank”), a group company of Mizuho Securities has status as a shareholder of both Keisei and Shin-Keisei. Mizuho Trust & Banking Co., Ltd. (“Mizuho Trust & Banking”), a group company of Mizuho Securities and Mizuho Bank, has loan transactions with Keisei as part of ordinary banking transactions and Mizuho Bank has loan transactions with Shin-Keisei as part of ordinary banking transactions. Mizuho – 20 – Securities states that, pursuant to Article 36, Paragraph 2 of the Financial Instruments and Exchange Act (Act 25 of 1948; hereinafter including subsequent revisions to it) and Article 70-4 of the Cabinet Ordinance on Financial Instruments Business (Cabinet Ordinance 52 of 2007; hereinafter including subsequent revisions to it), and other applicable laws, the company takes appropriate measures to prevent any adverse effects, such as blocking information transfer between its financial advisory unit and its other units holding shares of Keisei and between the financial advisory unit and its other units holding shares of Keisei and Shin-Keisei. Because of these measures, the financial advisory unit calculates the stock value of Keisei and Shin-Keisei from a standpoint independent from those of Mizuho Securities, Mizuho Bank, and Mizuho Trust & Banking as shareholders of, and lenders to, Keisei and Shin-Keisei, avoiding a conflict of interest with them regarding the Share Exchange. Keisei selected Mizuho Securities as a third-party calculation agency independent of Keisei and Shin-Keisei considering that: i) the company takes appropriate measures to prevent any adverse effects, such as blocking information transfer between its financial advisory unit and other units of Mizuho Securities’ and Mizuho Bank’s other units that hold Keisei and Shin-Keisei shares; ii) Mizuho Securities is kept independent as a third-party calculation agency as it enters into transactions with Keisei under transaction terms and conditions identical to those for ordinary business partners; and iii) Mizuho Securities acted as a third-party calculation agency for past projects of similar kinds. The Development Bank of Japan, a third-party calculation agency for Shin-Keisei, does not constitute an interest party in Keisei and Shin-Keisei due to being a calculation agency independent from them. Although the Development Bank of Japan has loan transactions with Keisei and Shin-Keisei as part of its ordinary banking transactions, the bank has no significant interest in them that constitutes a conflict of interest with them with respect to the Share Exchange. The Development Bank of Japan states that, pursuant to Article 36, Paragraph 2 of the Financial Instruments and Exchange Act and Article 70-4 of the Cabinet Office Ordinance on Financial Instruments Business, and other applicable laws, the company takes appropriate measures to prevent any adverse effects, such as blocking information transfer between its unit responsible for financial advisory and value calculation for Shin-Keisei stock and its other units. Because of these measures, the unit responsible for financial advice and value calculation for Shin-Keisei stock calculates the stock value from a standpoint independent from the status of the bank as a lender to Keisei and Shin-Keisei, avoiding a conflict of interest with them regarding the Share Exchange. – 21 – Shin-Keisei selected the Development Bank of Japan as a third-party calculation agency independent from Keisei and Shin-Keisei because: i) the bank takes appropriate measures to prevent any adverse effects, such as internal blocking information transfer; ii) the bank is kept independent as a third-party calculation agency, as it conducts transactions with Shin-Keisei under transaction terms and conditions identical to those for ordinary business partners; and iii) the bank acted as a third-party calculation agency for past projects of a similar kind. (b) Outline of calculation Mizuho Securities made calculations by using: i) the market stock price standard method for Keisei and Shin-Keisei, as they had market prices with the former being listed on the Tokyo Stock Exchange Prime Market and the latter on the Tokyo Stock Exchange Standard Market; ii) the peer-comparison method for Keisei and Shin-Keisei, as it was possible to presume their stock value by a peer comparison given that there existed multiple companies that engage in businesses similar to those of Keisei and Shin-Keisei to a certain extent, mainly from the perspective of analyzing the Share Exchange ratio range, although they were unable to be directly compared with Keisei and Shin-Keisei; and iii) the discounted cash-flow method (the “DCF Method”) for Keisei and Shin-Keisei in order to reflect their future business activities in the calculations. Shown below are calculation ranges for the number of Keisei shares to be granted for one Shin-Keisei share by each valuation method. Calculation range for the share exchange Market stock price standard method Method in use DCF method ratio 0.62 to 0.69 0.50 to 1.42 For the market stock price standard method, a simple average closing price applying a stock price on a calculation record date of April 27, 2022 was used, as well as closing stock prices during one month, three months, and six months before the calculation record date. The financial forecasts for Keisei and Shin-Keisei used by Mizuho Securities as the premise for DCF – 22 – method-based calculation include fiscal years in which significant profit rise or fall is predicted. Specifically, the following are predicted in the business plans used to calculate the stock value of Keisei: operating income of approximately 21.5 billion yen for fiscal year ending March 31, 2023 due in part to the expected gradual recovery of inbound demand and the flow of people in Japan and to the expected recovery of revenue by continuing to increase leased investment properties in the real estate business during the year and an increase in profit by approximately 40% on a year-on-year basis for fiscal year ending March 31, 2024, despite a temporary drop in revenue mainly in the transportation business in fiscal year ended March 31, 2021 and fiscal year ending March 31, 2022 due to the impact of the COVID-19 pandemic. On the other hand, the following are predicted in the business plans used to calculate the stock value of Shin-Keisei: operating income of approximately 1 billion yen for fiscal year ending March 31, 2023 and an increase in profit by approximately 40% and 30% for fiscal years ending March 31, 2024 and March 31, 2025, respectively, on a year-on-year basis, as a result of recovery from a decrease in operating income due to the impact of infections through the end of fiscal year ending March 31, 2022; also an increase in profit by approximately 40% on a year-on-year basis for fiscal year ending March 31, 2026 by carrying out regional development The financial forecasts for Keisei and Shin-Keisei are not premised on the execution of the Share in the real estate business. Exchange. In calculating the Share Exchange ratio, Mizuho Securities relied upon and premised its calculation on, the fact that all information used at that time as the essential grounds for calculating the Share Exchange ratio, among all disclosed information considered by the company, as well as financial and other information that was provided by Keisei and Shin-Keisei to the company or deliberated on by the company and Keisei and Shin-Keisei, was accurate and complete. Mizuho Securities did not independently verify the accuracy and completeness of such information, and is neither responsible nor obligated to do so. Information stated in the Share Exchange ratio calculation document has the potential to differ from reality if: i) there is any matter that renders information provided to the company or deliberated on by the company, Keisei, or Shin-Keisei seriously erroneous, ii) there occurs any event or circumstance that fails to be disclosed at the time of delivering the Share Exchange ratio calculation document; or iii) there occurs any event or circumstance after delivery of the Share Exchange ratio calculation document (including events that – 23 – potentially occur at the time of delivery of the Share Exchange ratio calculation document and that are subsequently revealed).Mizuho Securities premised the calculation on the fact that neither of the Companies’ management were aware of any fact that caused any misunderstanding, or that rendered the information provided to Mizuho Securities or deliberated on by the company, Keisei, or Shin-Keisei incomplete. Mizuho Securities did not independently value or appraise assets and liabilities of Keisei, Shin-Keisei, and their subsidiaries and affiliates (including derivatives, off-balance-sheet assets and liabilities, and contingent liabilities) and allowances and provisions for these companies. Mizuho Securities has neither been independently provided with any valuation or appraisal from a third party, nor has it requested any valuation or appraisal from a third party. Mizuho Securities is not obligated to examine assets and facilities of Keisei, Shin-Keisei, and their subsidiaries and affiliates, and has not assessed or valued shareholders’ equity, solvency, and fair values of Keisei, Shin-Keisei, and their subsidiaries and affiliates under laws on bankruptcy and business failure. In calculating the Share Exchange ratio, Mizuho Securities used hypotheses it believed were reasonable and appropriate for any matter: i) on which neither any information nor any disclosure was provided by Keisei and Shin-Keisei; ii) whose effect on their stock value was currently uncertain despite information or disclosure provided; iii) that could not be used by Mizuho Securities as a basis for valuation even when using another method; and iv) that could not convince Mizuho Securities that it was usable as a basis for valuation even when using another method. Mizuho Securities has not verified how the future financial conditions of Keisei and Shin-Keisei would be affected by any of the hypotheses that have the potential to be revealed as materially differing from the facts. Mizuho Securities premised that financial forecasts and forward-looking information that were disclosed to it had been prepared, created, and adjusted rationally by the management of Keisei and Shin-Keisei, based on the best forecasts and judgements currently able to be made concerning their business performance and future financial position. Mizuho Securities has neither independently verified the feasibility of the aforementioned premise and financial forecasts as well as business plans materializing, nor expressed any opinion on analyses and forecasts referred to in the Share Exchange ratio calculation document and hypotheses forming the basis for them because the company relied on such premise, financial forecasts, and business plans. Mizuho Securities personnel, not being experts in law, regulation, and tax affairs, relied on assessments and valuations done by external experts for Keisei and Shin-Keisei with respect to such matters. – 24 – This Share Exchange is based on the premise that the transaction not subject to tax under Japanese corporate tax law. Mizuho Securities’ calculation result was submitted to Keisei at its request for the sole purpose of serving as reference information in order for Keisei’s board of directors to determine a ratio for the Share Exchange. The calculation result is not intended for Mizuho Securities to express an opinion on the reasonableness of the ratio for the Share Exchange. Meanwhile, the Development Bank of Japan used the market stock price method to perform calculations for Keisei due to market price availability, as Keisei was listed on the Prime Market of the Tokyo Stock Exchange and Shin-Keisei was listed on the Standard Market of the Tokyo Stock Exchange. To reflect these Companies’ future business activities in the calculations, the bank used the DCF when doing its calculations. Shown below are the calculation ranges for the number of Keisei shares to be granted for one Shin-Keisei share under different valuation methods. Calculation range for the Share Exchange Method used Market stock price method DCF method ratio 0.60 to 0.70 0.57 to 1.31 Regarding the market stock price method, the Development Bank of Japan used a simple average closing price, applying a stock price on a calculation record date of April 27, 2022 as well as closing stock prices during one month, three months, and six months before the calculation record date. The financial forecasts that the bank used for Keisei and Shin-Keisei as the premise for DCF method-based calculation include some fiscal years in which a significant profit rise or fall is predicted. Specifically, the following are predicted in the business plans used to calculate the stock value of Keisei: operating income of approximately 10 billion yen for fiscal year ending March 31, 2023 and an increase in profit by approximately 40%, 50% and 40% for fiscal years ending March 31, 2024, March 31, 2025 and March 31, 2026, respectively, on a year-on-year basis, due to the expected – 25 – gradual pick up of inbound demand, despite it being impacted by reduced flow of people as a result of the ongoing spread of COVID-19 throughout the fiscal year ending March 31, 2022. On the other hand, the following are predicted in the business plans used to calculate the stock value of Shin-Keisei: operating income of approximately 1 billion yen for fiscal year ending March 31, 2023 and an increase in profit by approximately 40% and 30% for fiscal years ending March 31, 2024 and March 31, 2025, respectively, on a year-on-year basis, as a result of recovery from a decrease in operating income due to the impact of infections through the end of fiscal year ending March 31, 2022; also an increase in profit by approximately 40% on a year-on-year basis for fiscal year ending March 31, 2026 by carrying out regional development in the real estate business. The financial forecasts for Keisei and Shin-Keisei are not premised on the execution of the Share Exchange. In calculating the Share Exchange ratio, the Development Bank of Japan relied upon and premised its calculations on, the fact that all information used at the time as the essential grounds for calculating the Share Exchange ratio, among all disclosed information considered by the company as well as financial and other information that was provided by Keisei and Shin-Keisei to the bank or deliberated on by the bank and Keisei and Shin-Keisei, was accurate and complete. The Development Bank of Japan did not independently verify the accuracy and completeness of such information, and is neither responsible for doing so nor obligated to do so. Information stated in the Share Exchange ratio calculation document has the potential to differ from reality if: i) there is any matter that renders seriously erroneous information provided to the bank or deliberated on by it, Keisei, or Shin-Keisei seriously erroneous, ii) there occurs any event or circumstance that fails to be disclosed at the time of delivering the Share Exchange ratio calculation document; or iii) there occurs any event or circumstance after delivery of the Share Exchange ratio calculation document (including events that potentially occur at the time of delivery of the Share Exchange ratio calculation document and that are subsequently revealed).The Development Bank of Japan premised that neither of the Companies’ management were aware of any fact that caused any misunderstanding, or that rendered the information provided to the bank or deliberated on by it, Keisei, or Shin-Keisei incomplete. The Development Bank of Japan did not independently value or appraise assets and liabilities of Keisei, Shin-Keisei, and their subsidiaries and affiliates (including derivatives, off-balance-sheet assets and liabilities, and contingent liabilities) and allowances and provisions for these companies. The bank – 26 – has neither been independently provided with any valuation or appraisal from a third party, nor has it requested any valuation or appraisal from a third party. The Development Bank of Japan is not obligated to examine assets and facilities of Keisei, Shin-Keisei, and their subsidiaries and affiliates, and has not assessed or valued shareholders’ equity, solvency, and fair values of Keisei, Shin-Keisei, and their subsidiaries and affiliates under laws on bankruptcy and business failure. In calculating the Share Exchange ratio, the Development Bank of Japan used hypotheses it believed were reasonable and appropriate for any matter: i) on which neither any information nor any disclosure was provided by Keisei and/or Shin-Keisei; ii) whose effect on their stock value was currently uncertain in spite of information or disclosure provided; iii) that could not be used by the bank as a basis for valuation even when using another method; and iv) that could not convince the bank that it was usable as a basis for valuation even when using another method. The Development Bank of Japan has not verified how the future financial conditions of Keisei and Shin-Keisei would be affected by any of the hypotheses that have the potential to be revealed as materially differing from the facts. The Development Bank of Japan premised that financial forecasts and forward-looking information that were disclosed to it had been prepared, c