On May 14, 2024, Bunka Shutter Co., Ltd., announced in its press release that it had received a shareholder proposal from Strategic Capital Inc. for its 78th Annual General Meeting of Shareholders. The proposals are as follows, i) Appropriation of Surplus, ii) Amendment to the Articles of Incorporation (disposal of policy shareholdings below cost of capital): If there are shares for which the benefits from holding are reported to be less than the cost of capital and which the Company continues to hold at the end of the previous period, the Company shall sell all shares subject to non-derogation during the current period, iii) Amendment to the Articles of Incorporation (disclosure of policy shareholdings below cost of capital): In the annual report, the Company shall disclose the name of each share subject to non-derogation and the reason for the continued holding of the share, iv) Add remuneration disclosure conditions to performance-linked remuneration and share-based remuneration for representative directors: This proposal seeks disclosure of the amount and calculation method of performance-linked remuneration or share-based remuneration paid to representative directors and states that in the event that the Company pays variable remuneration to a director who has representation rights, the Company shall announce the total amount and calculation method of the variable remuneration, to the director concerned via TDnet by the end of the previous year of the year in which the variable remuneration is paid, v) Add clawback clauses to remuneration for directors: The proposal seeks to defer the remuneration to be paid to directors who are liable for damages in respect of losses incurred by the Company as a result of violations of the Act on Prohibition of Private Monopolies and Maintenance of Fair Trade. The company has opposed the proposals for the following reasons, i) The Shareholder Proposal is to pay out the full amount of net profit for the year ending 31 March 2024, but the Company believes that paying out such a dividend may hinder the achievement of medium- and long-term management tasks and raise concerns that will make it difficult to provide stable shareholder returns to shareholders in the future, ii) The Board of Directors of the Company makes a comprehensive decision on the appropriateness of holding shares by examining whether the dividends, related transactions and other related revenues of each individual issue are in line with the Company's cost of capital and referring to the results of such examinations.

The company believes that it is inappropriate to stipulate in the Articles of Incorporation such a rigid disposal of policy shareholdings in this manner, iii) The company believes that it is inappropriate to stipulate such rigid disclosure of policy shareholdings in the Articles of Incorporation in light of the nature of the Articles of Incorporation, which are the fundamental rules of the company, iv) With regard to disclosure, the Company discloses the total amount of remuneration by director category, the total amount of remuneration by type and the number of directors in the business report and annual securities report in accordance with laws and regulations. In the Annual Securities Report, the Company discloses sufficient information to enable shareholders to confirm the appropriateness of the level of remuneration and the relationship between performance and the level of remuneration, etc. The Board of Directors believes that the procedures for determining the level of remuneration, the method of calculation and the method of disclosure are appropriate, v) The content of the Shareholder's Proposal is to make directors subject to deferment or forfeiture of remuneration regardless of whether or not they have breached their duty of care, based solely on the fact that they held the position of director during a certain period of time on which a specific surcharge is calculated, without taking into consideration individual specific circumstances.

This deviates from the clawback clauses or so-called Mars clauses introduced in director remuneration practice and could reduce or limit the authority and decision-making flexibility of the Board of Directors, Nomination and Remuneration Committee, etc., and hinder appropriate institutional decision-making.