S.T. CORPORATION Note: This document has been translated from a part of 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.
Securities code: 4951
Date of mailing: May 31, 2024
Start date of measures for electronic provision: May 27, 2024
To our shareholders:
Yo Kozuki
President & CEO
S.T. CORPORATION
4-10, Shimoochiai 1-chome,
Shinjuku-ku, Tokyo, Japan
NOTICE OF THE 77TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
You are cordially invited to attend the 77th Ordinary General Meeting of Shareholders of S.T. CORPORATION (hereinafter the "Company"; this meeting, the "Meeting") to be held as indicated below.
When convening this general meeting of shareholders, the Company takes measures for providing information that constitutes the content of reference documents for the general meeting of shareholders, etc. (matters for which measures for providing information in electronic format are to be taken) in electronic format, and posts this information on the following websites. Please access these sites to review the information.
The Company website: https://www.st-c.co.jp/ir/meeting.html(in Japanese)
In addition to the Company website, matters for which measures for providing information in electronic format are to be taken are also posted on the website for the Tokyo Stock Exchange (TSE).
TSE website (Listed Company Search): https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)
(Access the TSE website by using the internet address shown above, enter "S.T." in "Issue name (company name)" or the Company's securities code "4951" in "Code," and click "Search." Then, click "Basic information" and select "Documents for public inspection/PR information." Under "Filed information available for public inspection," click "Click here for access" under "[Notice of General Shareholders Meeting /Informational Materials for a General Shareholders Meeting].")
If you are unable to attend the Meeting in person, you may exercise your voting rights in writing or via the Internet. Please review the attached Reference Documents for the Ordinary General Meeting of Shareholders, and exercise
your voting rights by 5:00 p.m. on Monday, June 17, 2024 (Japan Standard Time).
- 1 -
- Date and Time: 10:00 a.m., Tuesday, June 18, 2024
- Location: Royal Hall on the third floor of the RIHGA Royal Hotel Tokyo 104-19,Totsuka-machi1-chome,Shinjuku-ku, Tokyo, Japan
- Agenda:
Matters to be reported- Business Report, Consolidated Financial Statements and Audit Report on Consolidated Financial Statements by the Accounting Auditor and Audit Committee for the 77th fiscal term (from April 1, 2023 to March 31, 2024)
-
Non-ConsolidatedFinancial Statements for the 77th fiscal term (from April 1, 2023 to March 31, 2024)
Matters to be resolved
Proposal No. 1 Approval of Partial Share Exchange Plan
Proposal No. 2 Election of Nine (9) Directors
- Matters Determined Concerning the Convocation
If any shareholder wishes to split a vote, he or she must notify the Company in writing or via electronic means to that effect and the reasons for splitting the vote at least three days before the Meeting.
- If you attend the Meeting in person, please deliver the ballot sent to you and this notice of convocation to the reception desk at the Meeting site. No souvenirs will be made available.
- If revisions are made to matters for which measures for providing information in electronic format are to be taken, a notice of the revisions and the matters before and after the revisions will be posted on each of the aforementioned websites.
- Paper-basedcopies containing the matters for which measures for providing information in electronic format are to be taken will be sent along with this notice of convocation to those shareholders who request paper-based copies, but the following matters will not be included, in accordance with the provisions of laws and regulations and the Articles of Incorporation of the Company.
- The "System to Ensure Appropriate Operations" from the Business Report
- The "Consolidated Statements of Changes in Net Assets" and the "Notes to Consolidated Financial Statements" from the Consolidated Financial Statements
- The "Non-Consolidated Statements of Changes in Net Assets" and the "Notes to Non-Consolidated Financial Statements" from the Non-Consolidated Financial Statements
As such, the Business Report, Consolidated Financial Statements, and Non-Consolidated Financial Statements in this paper-based copy are part of the documents that are audited when the accounting auditors create their accounting audit reports and when the Audit Committee creates its audit report.
- 2 -
Shareholder opinion contact form
- The Company maintains a shareholder contact page on our corporate website for inquiries, opinions, questions and other communications from our shareholders. If you have any comments or suggestions regarding matters for reporting or resolution at this year's General Meeting of Shareholders, please contact us through the shareholder contact page on our website. Based on the feedback we received through the year, we plan to provide explanations about topics that we think most shareholders will be interested in at the General Meeting of Shareholders. Please note that feedback regarding the General Meeting of Shareholders this year does not constitute a notification as set forth in Article 71, item (i), (a) of the Regulations for Enforcement of the Companies Act, and the Company may therefore not respond to each individual feedback.
********************************************************************
Shareholder contact page (in Japanese) (https://www.st-c.co.jp/contact/inquiry/index/3)
********************************************************************
Viewing the Meeting on-demand
A video of the Meeting will be available on-demand on our website at a later date.
- 3 -
Proposal No. 1 | Approval of Partial Share Exchange Plan |
The Company resolved at its Board of Directors meeting held on May 20, 2024, to conduct a partial share exchange (hereinafter the "Partial Share Exchange") where the Company will be a parent company resulting from a share partial exchange and Shaldan Co., Ltd. (hereinafter "Shaldan") will be a subsidiary company resulting from a partial share exchange, and approved a partial share exchange plan (hereinafter the "Partial Share Exchange Plan" or the "Plan") for the Partial Share Exchange.
The Proposal is to request your approval for the Partial Share Exchange Plan stated below.
Reasons for conducting the Partial Share Exchange, details of the Partial Share Exchange Plan, and other matters regarding the Proposal are as follows.
1. Reasons for conducting the Partial Share Exchange
Since its establishment in 1946, the Company has embraced a management philosophy of contributing to society by providing customers with the most reliable products, and has grown by offering solutions to a variety of trouble and inconvenience in daily lives and providing customers with "freshness and comfort."
Meanwhile, the Company recognizes that its surrounding business environment has been changing at an accelerated pace. The Company acknowledges that it needs to contribute to solving various issues in response to social needs for further efforts in corporate ESG (Environmental, Social and Governance) strategies and governance-related actions, on top of dealing with the lifestyle diversification observed before and after the COVID-19 pandemic in particular, and to steadily take necessary measures in anticipation of upcoming risks.
Under these conditions, the Group is working on "further increasing profits in existing core businesses," "countermeasures to soaring material costs," "investment towards domains for growth and development of new businesses," and "creating a base to survive periods of ESG" in order to improve its brand value and enable sustainable growth. Among them, in "creating a base to survive periods of ESG," the Group has formulated a sustainability policy and revised its environment, human rights, and procurement policies to clarify its stance on sustainability and ESG. In addition, the Group has developed a plan based on these policies and thoroughly discusses them at the newly established Sustainability Committee.
In terms of corporate governance, the Company, as a global company listed on the Prime Market of TSE, is strengthening its governance and working on improvement of capital efficiency by changing its management indicator from "operating income margin" to "return on equity (ROE)," in order to conduct management with an awareness of capital cost and return on invested capital. The Company will also set the agile execution of capital policies in response to the management environment as one of its material issues.
In the course of such efforts, the Company, under the current management execution structure launched in June 2023, considered the revision of its capital policies and concluded that promptly resolving the discrepancy between demands from the capital market and the Company's current shareholder composition and its stock liquidity would be a significant issue in enhancing its corporate value.
That is, Shaldan Co., Ltd., the Company's largest shareholder and an unlisted company (owning 5,587,000 shares and 24.8% of voting rights of the Company), also falls under the category of "other affiliated companies" and this shareholder composition has contributed to securing the Company's management stability, whereas the capital and management of the companies have continued to appear practically integrated as the Company's founding family is among shareholders of Shaldan. Also, due to this shareholder composition, liquidity of the Company's stock has been relatively restricted.
As a means to improve the above situation, the Company has decided to conduct the Partial Share Exchange making Shaldan a subsidiary. Through the Partial Share Exchange, the Company's shares held by Shaldan will be directly held by individuals and companies that are shareholders of Shaldan responding to the Partial Share Exchange, and resultantly, no fixed major shareholders will exist for the Company, which will likely lead to enhancement of corporate governance and improvement of stock liquidity in terms of shareholder composition. Also, the Company believes that a partial share exchange, unlike a share exchange, would enable the Company to make Shaldan a subsidiary while also respecting the will of Shaldan's shareholders, and that this scheme is the most desirable method for the Company from the medium- to long-term perspective.
In addition, the Company will issue only its shares in the Partial Share Exchange as consideration for shares of Shaldan, which will become a subsidiary of the Company, and thus no funds will flow out of the Company. This way, the Company believes that the Partial Share Exchange would help improve the Company's shareholder composition
- 4 -
and its stock liquidity, consequently contributing to further enhancement and improvement of corporate governance and shareholder value.
After conducting the Partial Share Exchange, the Company plans to conduct a merger where the Company will be surviving and Shaldan will be disappearing. This merger is a response to Shaldan, which will have become a subsidiary of the Company after the completion of the Partial Share Exchange, being required to dispose of the Company's shares it holds at an appropriate time (Article 135, paragraph (3) of the Companies Act). Also, the Company's shares will temporarily increase, but the Company will examine the cancellation of treasury shares toward enhancing its corporate value.
2. Outline of details of the partial share exchange plan
An outline of details of the partial share exchange plan is as follows.
Partial Share Exchange Plan (Copy)
S.T. Corporation (hereinafter the "Company") shall formulate a partial share exchange plan (hereinafter the "Plan") as follows, in conducting a partial share exchange (hereinafter the "Partial Share Exchange") where the Company will be a parent company resulting from a partial share exchange and Shaldan Co., Ltd. (hereinafter "Shaldan") will be a subsidiary company resulting from a partial share exchange.
Article 1 | Name and address of the subsidiary company resulting from the partial share exchange |
The name and address of Shaldan are as follows. | |
Name: | Shaldan Co., Ltd. |
Address: | 17-11, Sakurashinmachi 1-chome,Setagaya-ku, Tokyo |
Article 2 Lower limit number of shares of the subsidiary company resulting from the partial share exchange to be accepted by the parent company resulting from the partial share exchange in the Partial Share Exchange
The lower limit number of common shares of Shaldan to be accepted by the Company shall be 136,000 shares.
Article 3 Shares to be delivered to the transferor of shares of the subsidiary company resulting from the partial share exchange in the Partial Share Exchange and the allotment thereof
- In the Partial Share Exchange, the Company shall deliver to the transferor of common shares of Shaldan the number of common shares of the Company obtained by multiplying the total number of common shares of Shaldan to be transferred by 20.41 as consideration for such common shares.
- In the Partial Share Exchange, the Company shall allot to the transferor of common shares of Shaldan 20.41 common shares of the Company for one (1) common share of Shaldan.
Article 4 Amount of stated capital and reserves of the parent company resulting from the partial share exchange
The amount of stated capital and reserves of the Company that should be increased in the Partial Share Exchange shall be as follows.
(1) Amount of stated capital
(2) Amount of capital reserves
(3) Amount of retained earnings reserves
Article 5 Date of application for the transfer of shares of the subsidiary company resulting from the partial share exchange
The date of application for the transfer of common shares of Shaldan shall be June 28, 2024. However, the Company shall be entitled to change the above schedule if it is necessary to do so for procedural needs regarding the Partial Share Exchange or for other reasons.
- 5 -
Article 6 Effective date for the Partial Share Exchange
The effective date (hereinafter the "Effective Date") for the Partial Share Exchange shall be July 1, 2024. However, the Company shall be entitled to change the above schedule if it is necessary to do so for procedural needs regarding the Partial Share Exchange or for other reasons.
Article 7 Conditions for execution of the Partial Share Exchange
The Plan shall cease to be valid if it fails to obtain approval by resolution at the Company's General Meeting of Shareholders by the date prior to the Effective Date.
Article 8 Changes in the Plan and cancellation of the Partial Share Exchange
The Company shall be entitled to change the details of the Plan or cancel the Partial Share Exchange if such an event occurs as may materially affect the execution of the Partial Share Exchange in the period between the date of formulating the Plan and the Effective Date, making it difficult to achieve the purpose of the Partial Share Exchange.
Article 9 Non-prescribed matters
In addition to matters prescribed in the Plan, the Company shall determine matters regarding the Partial Share Exchange in accordance with the purpose of the Partial Share Exchange.
May 20, 2024
Yo Kozuki
President & CEO
S.T. CORPORATION
4-10, Shimoochiai 1-chome,
Shinjuku-ku, Tokyo, Japan
- 6 -
3. Overview of details of the items prescribed in Article 213-2 of the Regulations for Enforcement of the Companies Act (excluding item (vi) and item (vii))
- Reasons for determining that the lower limit number of shares of the subsidiary company resulting from the partial share exchange to be accepted by the parent company resulting from the partial share exchange meets the requirement prescribed in Article 774-3, paragraph (2) of the Companies Act (Article 213-2, item (i) of the Regulations for Enforcement of the Companies Act)
In the Partial Share Exchange Plan, the Company has set the lower limit number of common shares of Shaldan to be accepted at 136,000 shares.
The Company has confirmed, based on the registration information of Shaldan as of May 17, 2024, that the total number of issued common shares of Shaldan was 204,000 shares as of the same day and that Shaldan had issued no class shares with voting rights as of the same day, and has verified with Shaldan that the registration information accurately reflected the status of the issued shares of Shaldan as of the same day and that Shaldan had no plan to issue or grant shares, share options, bonds with share options, and other rights convertible to shares of Shaldan in the period between the same day and the Effective Date.
Taking the above into consideration, the Company has determined that setting the lower limit number of common shares of Shaldan to be accepted in the Partial Share Exchange at 136,000 shares meets the requirement prescribed in Article 774-3, paragraph (2) of the Companies Act.
- Matters regarding the appropriateness in the provisions on the matters set forth in Article 774-3, paragraph (1), item (iii) through item (vi) (Article 213-2, item (ii) of the Regulations for Enforcement of the Companies Act)
1) Details of allotment in the Partial Share Exchange
The Company will allot and deliver 20.41 common shares of the Company for one (1) common share of Shaldan. All the common shares the Company will deliver as allotment in the Partial Share Exchange will be shares the Company will newly issue. The lower limit number of common shares of Shaldan to be accepted by the Company will be 136,000 shares. The number of common shares of the Company to be allotted and delivered when the Company accepts this lower limit number of shares will be 2,775,760 shares, the number of common shares of the Company to be allotted and delivered when the Company accepts all shares of Shaldan will be 4,163,640 shares, and the ratios to the Company's total number of issued shares of 23,000,000 as of March 31, 2024 will be 12.1% and 18.1%, respectively.
S.T. | Shaldan | |
Parent Company in the Partial Share | Subsidiary Company in the Partial | |
Exchange | Share Exchange | |
Delivery Ratio of Common Shares in | 1 | 20.41 |
the Partial Share Exchange | ||
Number of Shares to Be Delivered in | Number of common shares: 4,163,640 shares (plan) | |
the Partial Share Exchange | ||
Notes: 1. Handling of shares less than one share unit
Shaldan's shareholders who receive an allotment of common shares of the Company constituting less than one share unit (100 shares) (hereinafter the "Shares Less Than One Share Unit") as a result of the Partial Share Exchange cannot sell the Shares Less Than One Share Unit they hold on the Tokyo Stock Exchange. Pursuant to the provision of Article 192, paragraph (1) of the Companies Act, Shaldan's shareholders who hold Shares Less Than One Share Unit may request that the Company purchase the Shares Less Than One Share Unit they hold.
2. Treatment of fractional shares less than one share
For Shaldan's shareholders who receive an allotment of a fractional share less than one share of the Company as a result of the Partial Share Exchange, the Company may, pursuant to the provisions of Article 234 of the Companies Act and other relevant laws and regulations, sell the number of shares of the Company equivalent to the sum of the fractional shares and deliver the proceeds from the sale to those shareholders in proportion to the fractional shares attributed to them.
- Grounds, etc. for details of allotment in the Partial Share Exchange
- Grounds and reasons for details of allotment
In considering the partial share exchange ratio for the Partial Share Exchange, with the aim of ensuring the fairness and appropriateness, the Company selected KPMG FAS Co., Ltd., a third-party institution independent of the Company and Shaldan, and obtained a report on calculation of partial share exchange ratio as of May 17, 2024.
- 7 -
Referring to these calculation results, the Company comprehensively considered and conducted repeated analyses on the status of assets and liabilities of Shaldan, its current situation and future prospects and other factors. As a result, the Company decided that the partial share exchange ratio specified in the above "(2) 1) Details of allotment in the Partial Share Exchange" would be appropriate, not undermining the interest of the Company's shareholders, as it is within the partial share exchange ratio range calculated by KPMG FAS Co., Ltd.
In the event of any material change in the terms and conditions on which the calculation is based, or as a result of deliberations between the Company and shareholders of Shaldan, the partial share exchange ratio may be changed.
(ii) Matters regarding calculation
(a) Name of the valuation institution and its relationship with the Company and Shaldan
KPMG FAS Co., Ltd. is not classified as a related party of either the Company or Shaldan, and has no significant interest in the Partial Share Exchange.
(b) Outline of calculation
When evaluating the Company's share value as consideration in the Partial Share Exchange, KPMG FAS Co., Ltd. determined that the market price method would provide sufficiently appropriate results, on the grounds that the Company's common stock is listed on the Prime Market of TSE and has a certain degree of liquidity, and thus used the market price method in its calculation. When evaluating Shaldan's share value, KPMG FAS Co., Ltd. used the adjusted net asset method in its calculation to reflect unrealized gains/losses on assets, considering that Shaldan is an unlisted company and that its main asset is the Company's shares.
The calculation result of the partial share exchange ratio for one (1) common share of Shaldan, when the value for one (1) common share of the Company is one (1), is as follows.
Calculation Result of Partial Share Exchange Ratio
19.29―22.21
In the market price method, with May 17, 2024 set as the reference date for calculation, the Company's share value was analyzed based on the closing price on the Prime Market of TSE on the reference date for calculation and the simple average closing prices for the preceding one-month, three -month, and six-month periods.
Calculation Method | Calculation Result (Per-Share Value) |
Market Price Method | 1,527―1,549 yen |
In the adjusted net asset method, Shaldan's share value was analyzed by calculating the amount of adjusted net assets that reflected unrealized gains, etc. of the Company's shares held by Shaldan in the book-value net assets on the balance sheet of Shaldan as of February 29, 2024. Unrealized gains of the Company's shares held by Shaldan were calculated by applying a certain discount on the abovementioned market price method analysis.
Calculation Method | Calculation Result (Per-Share Value) |
Adjusted Net Asset | 29,461―34,395 yen |
Method | |
In calculating the partial share exchange ratio, KPMG FAS Co., Ltd., used information provided by the Company and Shaldan and publicly available information, etc. basically as they are, assumed that the documents and information, etc. are accurate and complete with no facts that may materially affect its calculation of the partial share exchange ratio remaining undisclosed to KPMG FAS Co., Ltd., and has not independently verified their accuracy and completeness. In addition, KPMG FAS Co., Ltd. has not undertaken any independent evaluation, appraisal or assessment of any of the assets or liabilities of the Company and Shaldan (including contingent liabilities except for the Company's shares held by Shaldan) including any analysis or evaluation of each individual asset or liability, nor has it made any request to a third-party institution for an appraisal or assessment of such. The calculation results by KPMG FAS Co., Ltd. reflect the information and economic conditions available as of May 17, 2024. The calculation results of the partial share exchange ratio by KPMG FAS Co., Ltd., are not to express its opinion on the fairness of
- 8 -
the partial share exchange ratio in the Partial Share Exchange, and the Company has not obtained any written opinion expressing that the partial share exchange ratio in the Partial Share Exchange is fair for general shareholders of the Company from the financial point of view (the "Fairness Opinion").
(iii) Measures to ensure fairness
Since Shaldan, the subsidiary company resulting from the Partial Share Exchange, holds 24.8% of voting rights of total shareholders of the Company (as of March 31, 2024), the following measures have been taken to ensure the fairness of the Partial Share Exchange.
(a) Calculation report from independent third-party valuation institution
In conducting the Partial Share Exchange, in order to ensure the fairness of the Partial Share Exchange, the Company obtained a report on calculation of partial share exchange ratio from KPMG FAS Co., Ltd., a third-party valuation institution independent of the Company and Shaldan. Also, the Company has not obtained from KPMG FAS Co., Ltd., any written opinion expressing that the partial share exchange ratio in the Partial Share Exchange is appropriate from the financial point of view (the "Fairness Opinion").
(b) Advice from financial advisor
The Company selected Capital Strategy Consulting Co., Ltd., as its financial advisor for the Partial Share Exchange, and has obtained advice from the financial point of view with respect to calculation of the partial share exchange ratio, etc.
(c) Advice from law office
The Company selected Nishimura & Asahi (Gaikokuho Kyodo Jigyo) as its legal advisor and has obtained advice in procedures and decision-making method and process, etc. for the Partial Share Exchange from the legal point of view, and based on this advice, the Company has worked on the formulation of the Partial Share Exchange Plan, etc.
(iv) Measures to avoid conflicts of interest
As no shareholder or director of Shaldan is among directors of the Company, there is no possible conflict of interest. Nevertheless, from the perspective of quickly ensuring the appropriateness and fairness of the Partial Share Exchange for general shareholders of the Company, a special committee (hereinafter the "Special Committee") was set up comprising independent outside directors of the Company Shinzo Maeda, Shoichiro Iwata, Hiroko Noda, Yoko Wachi and Masayoshi Miyanaga, and in considering the Partial Share Exchange, the Company has sought advice from the Special Committee, regarding 1) the validity and reasonableness of the purpose of the Partial Share Exchange; 2) the fairness and appropriateness of the terms and conditions for the Partial Share Exchange; 3) the fairness of the procedures for the Partial Share Exchange; 4) whether or not the Partial Share Exchange may be considered not disadvantageous to general shareholders of the Company; and 5) whether or not the Company's Board of Directors should execute the Partial Share Exchange based on the above points 1) through 4).
The Special Committee held a total of four meetings in the period between March 7, 2024, and May 20, 2024.
The Special Committee reviewed relevant documents and received explanations from related parties. Under such circumstances, after carefully considering the calculation results in the report on calculation of partial share exchange ratio and details of explanations, etc. from related parties, the Company submitted to its Board of Directors as of May 20, 2024, a report indicating that the Partial Share Exchange can be determined not disadvantageous to general shareholders of the Company on the grounds that the Partial Share Exchange would contribute to corporate value enhancement; the purpose of the Partial Share Exchange is valid and reasonable; the partial share exchange ratio in the Partial Share Exchange can be recognized as fairly determined and appropriate; the negotiation process leading to the Partial Share Exchange and procedures for the Partial Share Exchange are fair.
- Matters regarding the appropriateness of the amounts of increases in the Company's stated capital and reserves in the Partial Share Exchange
The amounts of increases in the Company's stated capital and reserves in the Partial Share Exchange are as follows. The Company considers this treatment appropriate as the Company has comprehensively taken into account the Company's capital policies and other circumstances after the Partial Share Exchange, and it has been determined to be within the scope of laws and regulations.
Amount of stated capital | 0 yen |
Amount of capital reserves | The amount to be prescribed separately by the Company pursuant to |
Article 39-2 of the Regulations on Corporate Accounting | |
- 9 - |
Amount of retained earnings reserves | 0 yen |
- Matters regarding the appropriateness in the provisions on share options, etc. to be delivered in a partial share exchange (Article 213-2, item (iii) of the Regulations for Enforcement of the Companies Act)
Not applicable.
- Matters regarding a subsidiary company in a partial share exchange (Article 213-2, item (iv) of the Regulations for Enforcement of the Companies Act)
1) Details of financial statements, etc. in the last fiscal year
The financial statements, etc. of Shaldan in the last fiscal year are as shown in Appendix.
- Details of extraordinary financial statements, etc. after the end of the last fiscal year Not applicable.
- Significant subsequent events after the end of the last fiscal year
Not applicable.
- Matters regarding a parent company in a partial share exchange (Article 213-2, item (v), (a) of the Regulations for Enforcement of the Companies Act)
The Company, at the Board of Directors meeting held on May 20, 2024, resolved to conduct the Partial Share Exchange and approved the Partial Share Exchange Plan. The details of the Partial Share Exchange Plan are as shown in the above 2. and the Company, after conducting the Partial Share Exchange, plans to execute a merger where the Company will be surviving and Shaldan will be disappearing.
- 10 -
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
S.T.Corporation published this content on 03 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 June 2024 05:17:01 UTC.
