UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM CB

TENDER OFFER/RIGHTS OFFERING NOTIFICATION FORM

Please place an X in the box(es) to designate the appropriate rule provision(s) relied upon to file this Form:

Shin-Keisei Electric Railway Co., Ltd.

(Name of Subject Company)

Not applicable

(Translation of Subject Company’s Name into English (if applicable)

Japan

(Jurisdiction of Subject Company’s Incorporation or Organization)

Keisei Electric Railway Co., Ltd.

Shin-Keisei Electric Railway Co., Ltd.

(Name of Person(s) Furnishing Form)

Common Stock

(Title of Class of Subject Securities)

Not applicable

(CUSIP Number of Class of Securities (if applicable))

Yugo Hayashi

Manager, Group Strategy Department

Keisei Electric Railway Co., Ltd.

3-3-1 Yawata

Ichikawa, Chiba 272-8510

Japan

(Tel) (+81) 47-715-7038 

(Name, Address (including zip code) and Telephone Number (including area code)

of Person(s) Authorized to Receive Notices and Communications on Behalf of Subject Company)

Copy to:

David R. Brown

Nixon Peabody LLP

70 W. Madison St., Suite 5200

Chicago, Illinois 60602

Telephone: (312) 977-4400

May 27, 2022

(Date Tender Offer/Rights Offering Commenced)

PART I – INFORMATION SENT TO SECURITY HOLDERS

(a)

Exhibits:    

(b) Not applicable.

A legend complying with Rule 802 under the Securities Act of 1933, as amended, has been included in the press release referred to in Item I.

PART II – INFORMATION NOT REQUIRED TO BE SENT TO SECURITY HOLDERS

(1) Not applicable.

(2) Not applicable.

(3) Not applicable.

PART III – CONSENT TO SERVICE OF PROCESS

Keisei Electric Railway Co., Ltd. furnished an irrevocable consent and power of attorney on Form F-X filed April 28, 2022.

PART IV – SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: May 27, 2022

EXHIBIT 99.1

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.

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.

Instructions for Exercising Your Voting Rights

Reference Materials for General Meeting of Shareholders

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 being August 29, 2022).

Reason for the Share Exchange, Outline of the Share Exchange Agreement, and other items 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

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

(“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

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

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

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.

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:

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

Note 1: Allotment ratio for common stock

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

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 Planned Date for the Share Exchange.

The total number of shares of Keisei to be granted in the Share Exchange is subject to change in the future due to acquisition 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 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 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 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

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.

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 fairness.”

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

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.

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.

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

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 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, 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

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.

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.

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

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

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, created, and adjusted rationally by the management of Keisei and Shin-Keisei, based on the best possible forecasts and judgements currently able to be made concerning their business performance and future financial position. However, Shin-Keisei had some concerns about the feasibility of Keisei’s financial forecasts Keisei materializing in light of its financial results for the fiscal year ended March 31, 2022. Therefore, the Development Bank of Japan used financial forecasts for the fiscal years ending March 31, 2023, March 31, 2024, and March 31, 2025 that were adjusted to some extent upon checking with Shin-Keisei. The bank 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 that form the basis for them, since the company relied on such premise, financial forecasts, and business plans. The Development Bank of Japan 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.

This Share Exchange is based on the premise that the transaction not subject to tax under Japanese corporate tax law.

The Development Bank of Japan’s calculation result was submitted to Keisei at its request for the sole purpose of serving as reference information in order for Shin-Keisei’s board of directors to determine a ratio for the Share Exchange. The calculation result is not intended for the bank to express an opinion on the reasonableness of the ratio for the Share Exchange.

(2) Reason for choosing Keisei stock as a consideration for the Share Exchange

The Companies have chosen Keisei stock as a consideration for the Share Exchange.

Keisei stock is listed in the Tokyo Stock Exchange Prime Market and therefore stock trading opportunities will be ensured even after the Share Exchange. In addition, the shareholders of Shin-Keisei are expected to enjoy the synergy associated with the Share Exchange. For this reason, Shin-Keisei thinks that it is appropriate to choose Keisei stock as a consideration for the Share Exchange.

Shin-Keisei stock will be delisted on August 30, 2022 (the final trading date will be August 29, 2022) through a specified procedure under the delisting standard of the Tokyo Stock Exchange Standard Market. This is because the Share Exchange will turn Shin-Keisei into a wholly owned subsidiary of Keisei on September 1, 2022 (planned), the date on which the Share Exchange will come into effect.

After the delisting, it will no longer be possible to trade Shin-Keisei stock on financial instrument exchanges. However, Keisei stock, the shares of which will be allotted to shareholders of Shin-Keisei on the date when the Share Exchange comes into effect, is listed on the Tokyo Stock Exchange Prime Market. As a result, it will still be possible to trade shares in quantities of at a least Round Lot on financial instrument exchanges, with stock liquidity being secured. This is despite the fact that some shareholders of Shin-Keisei could potentially be allotted only shares in quantities smaller than a Round Lot.

Shareholders that will begin to hold shares of Keisei stock in quantities smaller than a Round Lot due to the Share Exchange will be allowed to use a repurchase program for such quantities of shares, but they will not be able to sell them on financial instrument exchanges. They will, however, be allowed to use a program for purchasing additional shares in amounts smaller than a Round Lot to buy Keisei shares in a number that brings their total holding to at least a Round Lot if combined with shareholdings smaller than a Round Lot. For an outline of this procedure, see the section above titled

(1) 1) “Note 3: Handling of shares in quantities smaller than a Round Lot.” For details of handling of fractional shares occurring due to the Share Exchange, see the section above titled (1) 1) “Note 4: Handling of fractional shares.”

Shareholders of Shin-Keisei may continue to trade their shares in Shin-Keisei as before until August 29, 2022 (planned), the planned final trading date, on the Tokyo Stock Exchange Standard Market, and will be able to exercise until the Record Date their lawful rights stipulated in the Companies Act and other applicable laws.

(3) Matters to which attention is paid to avoid harming the interests of shareholders of Shin-Keisei

　1) Measure to secure fairness

A measure to secure fairness was taken by the Companies as shown below, because they judged it necessary to secure fairness in the Share Exchange given that Keisei held 4,899,895 shares (44.64% of the 10,977,234 total of Shin-Keisei outstanding shares as of March 31, 2022 (excluding treasury stock) (any third decimal place was rounded off to the nearest second place; hereinafter this applies to calculation of the ownership ratio)). Furthermore, Shin-Keisei fell under an equity-method affiliate of Keisei due to being served concurrently by directors who were officers or employees of Keisei and by directors who had previously been Keisei personnel.

(i) Acquisition of a Share Exchange ratio calculation document from an independent third-party calculation agency

On April 27, 2022, Keisei acquired a Share Exchange ratio calculation document from Mizuho Securities, a third-party calculation agency independent from Keisei and Shin-Keisei.

For an outline of the document, see the section above titled (1) 2) (ii) “Matters related to calculation.” Keisei has not acquired from Mizuho Securities an opinion on whether the Share Exchange ratio is fair for shareholders of Keisei from a financial perspective (fairness opinion).

Meanwhile, on April 27, 2022, Shin-Keisei acquired a Share Exchange ratio calculation document from the Development Bank of Japan, a third-party calculation agency independent from Keisei and Shin-Keisei. For an outline of the document, see the section above titled (1) 2) (ii) “Matters related to calculation.” Fees for the bank include a contingency fee to be paid on the condition that the Share Exchange is executed. Shin-Keisei has not acquired from Mizuho Securities an opinion on whether the Share Exchange ratio is fair for shareholders of Keisei from a financial perspective (fairness opinion).

(ii) Advice from an independent law office

Keisei selected Takusyou Sogo Law Office as a legal advisor for the Share Exchange, and obtained advice from it from a legal perspective on the procedures for the Share Exchange and on the method and process for decision-making by the board of directors. Takusyou Sogo Law Office, being

independent from Keisei and Shin-Keisei, has no significant interest in either of them.

Meanwhile, Shin-Keisei selected Oh-Ebashi LPC & Partners as a legal advisor for the Share Exchange, and obtained advice from it from a legal perspective on the procedures for the Share Exchange and on the method and process for decision-making by the board of directors. Oh-Ebashi LPC & Partners, being independent from Keisei and Shin-Keisei, has no significant interest in either of them. Fees for the legal advisor comprise only an hourly fee to be paid regardless of whether the Share Exchange is executed, and do not include a contingency fee to be paid on the condition that the Share Exchange is executed.

　2) Measures to avoid a conflict of interest

　To avoid a conflict of interest, Shin-Keisei took the following measures. This is because Keisei held 4,899,895 shares of the former (44.64% of the total 10,977,234 outstanding shares on March 31, 2022 (excluding treasury stock)), Shin-Keisei falls under the definition of an equity-method affiliate of Keisei, and Shin-Keisei is served by directors who concurrently serve as officers or employees of Keisei and who previously served Keisei.

(i) Establishment of an independent special committee at Shin-Keisei and acquisition of a recommendation letter

By resolution of a board of directors meeting held on January 28, 2022, Shin-Keisei established a special committee composed of: i) Mr. Hitoshi Ikeda, Outside Audit & Supervisory Board Member of Shin-Keisei who does not have an interest in Keisei and is an independent officer registered with the Tokyo Stock Exchange (Sanyo to the ChibaBank, Ltd.); ii) Mr. Kouichi Yamakado, Outside Audit & Supervisory Board Member of Shin-Keisei who does not have an interest in Keisei and is an independent officer registered with the Tokyo Stock Exchange (former Director, Managing Executive Officer of Sumitomo Mitsui Trust Bank, Limited; and iii) Mr. Hiroki Sakuraba, an independent external expert who has no interest in Keisei or Shin-Keisei (lawyer, Okuno & Partners). This was in order for Shin-Keisei to: i) make decisions on the Share Exchange with due care; ii) keep the decision-making process of its board of directors free of potential arbitrariness and conflicts of interest; iii) secure the fairness of the process; and iv) verify that the decision by the board of directors to proceed with the Share Exchange would not harm the interests of Shin-Keisei’s minority shareholders. It selected

these three individuals as members of the special committee from the start, and has not replaced them. Shin-Keisei intends to pay to them a fixed amount of remuneration or an hourly fee as the reward for their service regardless of their recommendations.

Then, in pondering the Share Exchange, Shin-Keisei requested an opinion from the special committee on the following points: (a) the rationality of the purpose of the Share Exchange (including on whether the Share Exchange would contribute to improving the corporate value of Shin-Keisei); (b) the reasonableness of the Share Exchange’s transaction terms and conditions (including the Share Exchange ratio); (c) the fairness of the procedures for the Share Exchange (including a description of the measures to secure fairness and the extent to which such measures should be taken); and (d) whether the Share Exchange would harm the interests of Shin-Keisei’s minority shareholders in consideration of the items above from (a) to (c) and of other matters (the items from (a) to (d) are collectively referred to as the “Main Items for Inquiry” hereinafter).

In establishing the special committee, Shin-Keisei’s board of directors resolved to make decisions on the Share Exchange with the utmost respect to the committee’s judgment, and to assign to it the authority to: (a) check with officers and employees of Shin-Keisei concerning policy on negotiations with Keisei in advance, and express opinions and issue instructions and requests at important stages; (b) obtain from officers and employees of Shin-Keisei information required for considering the Share Exchange and making decisions on it; (c) approve a financial advisor, third-party calculation agency, and legal advisor selected by Shin-Keisei (and subsequently approve them); and (d) select or appoint a financial advisor, third-party calculation agency, and legal advisor for the committee as required (Shin-Keisei will bear such expenses incurred).

The special committee held 11 meetings between February 14, 2022 to April 27, 2022 to examine the Share Exchange and express opinions, exchanged and gathered information via email, and held discussions from time to time as required. Specifically, the committee verified that the Development Bank of Japan, a financial advisory and third-party calculation agency selected by Shin-Keisei, and Oh-Ebashi LPC & Partners, a legal advisory selected by it, had appropriate independence and expertise, and so approved the selections. Then, Shin-Keisei provided an overview of Shin-Keisei’s and Shin-Keisei Group’s businesses, future prospects for the businesses, merits and demerits of conducting the Share Exchange considered by Shin-Keisei, and the procedure for formulating and content of Shin-Keisei’s business plans used as the premise for calculation of the Share Exchange

ratio, followed by a question and answer session. Keisei then provided an overview of Keisei’s and Keisei Group’s businesses, the positioning of Shin-Keisei in the Keisei Group, background and circumstances that led to the Share Exchange, reason for choosing the Share Exchange, details of synergy and other impacts expected from the Share Exchange, and management policy and treatment of employees following the Share Exchange, followed by a question and answer session. The Development Bank of Japan, which is a financial advisor and third-party calculation agency for Shin-Keisei, explained the method for calculating the allotment ratio for the Share Exchange and calculation result, followed by a question and answer session to verify the reasonableness of the result. In addition, Shin-Keisei’s legal advisor Oh-Ebashi LPC & Partners advised on the decision-making process of Shin-Keisei’s board of directors regarding the Share Exchange, measures to secure fairness of the procedure for the Share Exchange including the management of this special committee and measures to avoid conflicts of interest, and explained the result of legal due diligence on Keisei, followed by a question and answer session. Moreover, AGS Consulting Co., Ltd. (This special committee has confirmed that the company has no significant interest in Keisei.), which conduced financial and tax due diligence on Keisei based on a request from Shin-Keisei, explained the result of the aforementioned financial and tax due diligence, followed by a question and answer session. Note that this special committee is substantially involved in the negotiation process with Keisei, by deliberating on a negotiation policy and other matters more than once and giving advice to Shin-Keisei, after receiving a report on the progress and content of discussions and negotiations for the Share Exchange between Keisei and Shin-Keisei in a timely manner.

This special committee, as a result of having discreetly discussed and examined the Main Items for Inquiry multiple times through such procedure, submitted the recommendation letter to the effect that the Share Exchange would not harm the interests of Shin-Keisei’s minority shareholders to Shin-Keisei’s board of directors on April 27, 2022. The outline of the special committee’s opinion is as follows.

(a) The rationality of the purpose of the Share Exchange (including on whether the Share Exchange would be beneficial to improving the corporate value of Shin-Keisei)

This special committee has a similar perception about the current business environment around Shin-Keisei and management issues of Shin-Keisei recognized by Keisei and Shin-Keisei as stated in the

section above titled “1. Reason for the Share Exchange” and has no objection to it.

In addition, in light of the aforementioned business environment and management issues, Shin-Keisei explained to this special committee that the transportation industry, which especially suffered serious damage due to the spread of infections, foresees trouble in restoring the number of passengers to the previous level due in part to the increasing working from home and that Shin-Keisei considers reviewing the fare rate system according to the streamlining of operations and actual usage and measures including programs that contribute to attracting travelers and increasing new businesses are crucial to secure profitability. Meanwhile, Keisei expressed its view to this special committee that not only the creation and expression of synergy such as the strengthened business foundation in the northwestern part of Chiba Prefecture, enhanced competitiveness and increased business scale through mutual utilization of management resources, and establishment of an efficient organizational structure leveraging economies of scale can be expected from Shin-Keisei becoming a wholly owned subsidiary of Keisei to pursue management in one united group through closer collaboration than before as well as to effectively use economies of scale as the Keisei Group and business know-how, but also Shin-Keisei can accelerate collaboration with Keisei without the restrictions arising from the current status of Keisei and Shin-Keisei being independent listed companies. Such explanation from Keisei and Shin-Keisei is concrete on the premise of the business environment surrounding Shin-Keisei and its management issues, consistent with the general explanation on the environment of the industry to which Shin-Keisei belongs and the respective market, and considered to be realistic for future strengthening of Shin-Keisei’s competitiveness and not particularly found to be unreasonable.

On the other hand, Shin-Keisei expressed concern about the Share Exchange to this special committee with respect to the lack of uniqueness and independence of Shin-Keisei, impact to the existing shareholders of Shin-Keisei (loss of benefits that they receive as shareholder incentives), impact on Shin-Keisei employees and hiring activities, and relationship with the labor union. Then, for each of these points, Keisei explained as follows: at the moment there is no plan to make a specific change in the organizational structure of Shin-Keisei following the Share Exchange; at the moment there is no plan to change the Shin-Keisei brand spreading in the lineside area; Keisei’s shareholder incentives will be distributed following the Share Exchange and the building of a system to exchange shareholder incentives to be distributed to the current Shin-Keisei shareholders with Shin-Keisei shareholder incentives is being considered in a positive manner; Keisei will provide cooperation so

that Shin-Keisei employees will take the Share Exchange that have a potential to improve their motivation positive as an opportunity to expand their areas of activity; and Keisei will cooperate with Shin-Keisei in creating a more satisfying workplace for Shin-Keisei employees together. In addition, Keisei stated it is considering neither a so-called scorched-earth management policy to sell Shin-Keisei Group businesses and assets nor financing for Keisei using Shin-Keisei businesses and assets at the moment. Based on these explanations from Keisei, not only the concerns about the Share Exchange expressed to this special committee from Shin-Keisei are considered to be mitigated to some extent, but specific probabilities of these concerns exceed or significantly damage the expected advantages of the Share Exchange cannot be recognized.

As such, this special committee concluded that the Share Exchange is considered beneficial to improving the corporate value of Shin-Keisei in light of the business environment surrounding Shin-Keisei and its management issues, and therefore the purpose of the Share Exchange is rational.

(b) The reasonableness of the Share Exchange’s transaction terms and conditions (including the Share Exchange ratio)

This special committee concluded that the Share Exchange’s transaction terms and conditions including the Share Exchange ratio is reasonable in consideration of: (I) the Share Exchange by means of forming a wholly owned subsidiary is reasonable because an opportunity to receive synergy effect following the Share Exchange is provided to Shin-Keisei minority shareholders, shareholders who wish to cash in shares can do so by selling Keisei stock, which is highly liquid, and the Share Exchange method is commonly used as a means to form a wholly owned subsidiary; (II) (A) the market stock price method and DCF method, the calculation methods used in the Share Exchange ratio calculation document created by the Development Bank of Japan are considered reasonable methods in light of the current business practice, the explanation on the basis of the discount rate in the DCF method is also reasonable, and the calculation content is considered appropriate in light of the current business practice, (B) the business plans of Shin-Keisei and Keisei used as the premise of the relevant calculation (Shin-Keisei’s business plans were partially modified with respect to the premise in light of a discussion in this special committee as Shin-Keisei and the special committee had some concerns regarding the feasibility of the business plans initially received from Keisei) are considered not unreasonable in light of the circumstances of the creation and the current situation of Keisei and Shin-Keisei, the Share Exchange rate exceeds the upper limit in the calculation result

based on the market stock price method and within the range of the calculation result based on the DCF method when compared with the assessment range for Shin-Keisei and Keisei stocks in the relevant calculation document; (III) the premium level of the Share Exchange rate against the market stock price is considered to be reasonable level when compared with the premium level in recent cases of Share Exchange for the purpose of forming a wholly owned subsidiary of a listed company in Japan, which are similar transactions to the Share Exchange; (IV) this special committee is assessed as being substantially involved in negotiations with Keisei as this special committee was established immediately after Shin-Keisei began full-scale consideration of the Share Exchange, whether the Share Exchange rate would harm Shin-Keisei minority shareholders was discussed multiple times, the result of the discussions was reflected in the policy for negotiation with Keisei, and negotiations with Keisei were conducted following instructions and requests under the relevant negotiation policy determined by the special committee; and (V) there is no specific circumstances that cause a doubt about the fairness of the decision-making process for the Share Exchange rate.

(c) The fairness of the procedures for the Share Exchange (including a description of the measures to secure fairness and the extent to which such measures should be taken)

This special committee concluded that the procedures for the Share Exchange is fair as measures to secure fairness are taken in the negotiation process leading to the Share Exchange in consideration of: (I) Shin-Keisei’s board of directors established this special committee, which is independent of Keisei and Shin-Keisei, to make decisions regarding the Share Exchange with the utmost respect to the committee’s judgment; (II) the structure that enables this special committee to substantially be involved in negotiation with Keisei was secured, negotiations with Keisei were conducted with substantial involvement of this special committee, and the same level of negotiation and discussion as those in transactions between independent parties is assessed to have been conducted with Keisei in light of the circumstances of negotiation with Keisei; (III) Shin-Keisei received legal advice from Oh-Ebashi LPC & Partners, which is independent of Keisei and Shin-Keisei and the success or failure of the Share Exchange; (IV) Shin-Keisei acquired a calculation document for the Share Exchange rate from the Development Bank of Japan, which is a financial advisor and third-party calculation agency independent of Keisei and Shin-Keisei; (V) after Shin-Keisei began full-scale consideration of the Share Exchange, it promptly built a structure in which not only Shin-Keisei officers and employees who also currently serve as Keisei officers and employees, but also other

Shin-Keisei officers and employees who were previously in the position of Keisei officers and employees would not be involved in the discussion and negotiation process concerning transaction terms and conditions for the Share Exchange between Shin-Keisei and Keisei as well as in Shin-Keisei’s business plan creation process; (VI) directors who currently serve as Keisei officers and employees, directors who were previously in the position of Keisei officers and employees, and audit & supervisory board members who also serve as Keisei directors were excluded from deliberation and resolution for the Share Exchange in the board of directors meetings, will be excluded from deliberation and resolution for the Share Exchange in the board of directors meeting to be held in April 28, 2022, and are not participated in discussions and negotiations for the Share Exchange from the standpoint of Shin-Keisei; (VII) Shin-Keisei has not entered into an agreement with Keisei that restricts Shin-Keisei from contacting a party who propose a hostile takeover other than Keisei, which is considered as so-called indirect market check being performed; on the other hand, although Shin-Keisei does not actively perform market check, it is not considered a harm to the fairness of the procedure in the faire exchange; (VIII) although the majority of minority condition will not be set up for the Share Exchange, the majority of minority condition not being set up is not considered a harm to the fairness of the Share Exchange procedure due in addition to setting up the majority of minority condition for the Share Exchange that is considered beneficial to improving corporate value and having appropriate transaction terms and conditions may destabilize the successful Share Exchange and may not be a benefit to the interest of minority shareholders on the contrary, Shin-Keisei has taken other sufficient measures to secure fairness for the Share Exchange; (IX) appropriate information disclosure is planned; and (X) a fact that leads to a presumption that Shin-Keisei having been subject to undue influence from Keisei in the course of discussion, consideration, and negotiation is not recognized.

(d) Whether the Share Exchange would harm the interests of Shin-Keisei’s minority shareholders in consideration of the items above from (a) to (c) and of other matters

The Share Exchange is recognized as beneficial to improving the corporate value of Shin-Keisei according to (a) above and the appropriateness of the transaction terms and conditions and fairness of the procedure as described in (b) and (c) above are also recognized. As such, resolving to conduct the Share Exchange in Shin-Keisei’s board of directors meetings is not considered a harm to Shin-Keisei minority shareholders.

(ii) Approval by all non-interested Shin-Keisei directors and no objections by any non-interested Shin-Keisei audit & supervisory board members

At the Shin-Keisei board of directors meeting held on April 28, 2022 that resolved the proposal for the Share Exchange, to avoid a conflict of interest, the proposal was deliberated on and resolved unanimously by eight members, excluding, among eleven Shin-Keisei directors, Mr. Yukihito Mashimo, as he had previously served Keisei, Mr. Toshiya Kobayashi, as he concurrently served as a director of Keisei, and Mr. Norio Saigusa, as he served as an Advisor to Keisei. To likewise avoid a conflict of interest, Messrs. Mashimo, Kobayashi, and Saigusa did not participate in consultations and negotiations on the Share Exchange as Shin-Keisei officers.

The aforementioned board of directors meeting was attended by two audit & supervisory board members who had no interest in Keisei (including one outside audit & supervisory board member), excluding Messrs. Takao Amano and Shokichi Kaneko, who each concurrently served as directors of Keisei, among four audit & supervisory board members of Shin-Keisei. The two attending audit & supervisory board members both said they had no objection to the aforementioned resolution. Considering that Messrs. Amano and Kaneko, both audit & supervisory board members of Shin-Keisei, each concurrently served as directors of Keisei, they did not participate in deliberations on the Share Exchange at the aforementioned board of directors meeting and refrained from expressing an opinion when the meeting resolved the proposal. Messrs. Amano and Kaneko did not participate in consultations and negotiations on the Share Exchange as Shin-Keisei officers.

(4) Matters related to the reasonableness of the amount of capital and reserves of Keisei, which becomes the wholly-owning parent company

By the Share Exchange, Keisei’s capital and reserves shall be increased by the amounts specified below. This treatment is deemed to be reasonable in light of laws and Keisei’s capital policy.

4. Matters for reference with regard to the consideration for the Share Exchange

(1) Provisions of the Articles of Incorporation of Keisei

The Articles of Incorporation of Keisei are posted on the Shin-Keisei website (https://www.shinkeisei.co.jp/ir/) pursuant to laws and Article 16 of the Articles of Incorporation of Shin-Keisei.

(2) Matters related to the method of realization of the consideration for the Share Exchange

1) Market where the consideration for the Share Exchange is traded

Keisei stock is traded in the Tokyo Stock Exchange Prime Market.

2) Person providing intermediary, brokerage or agency service for trading the consideration for the Share Exchange

Financial instruments exchange business operators (securities companies, etc.) in Japan provide intermediary, brokerage and other services for Keisei stock.

3) Details of restrictions on the transfer and disposal of the consideration for the Share Exchange

Not applicable

(3) Matters related to the market value of the consideration for the Share Exchange

　The average closing price of Keisei stock in the Tokyo Stock Exchange First Section and Prime Market for a period of one month, three months and six months before the business day immediately prior to the date on which the conclusion of the Share Exchange Agreement was announced (April 28, 2022) is 3,380 yen, 3,342 yen and 3,302 yen, respectively.

　The latest market value and other information of Keisei stock are available on the Tokyo Stock Exchange website (https://www.jpx.co.jp/).

(4) Details of Keisei’s balance sheet for each business year ended in the past five years

　Keisei submitted annual securities reports for all business years pursuant to the provisions of Article 24, Paragraph 1 of the Financial Instruments and Exchange Act. For this reason, the description of details is omitted here.

5. Matters related to the reasonableness of the provisions on share options for the Share Exchange

　Not applicable

6. Matters related to financial statements, etc.

(1) Details of financial statements, etc. for the final business year of Keisei

　The details of financial statements, etc. for the final business year of Keisei (term ending March 2022) are posted in the Shin-Keisei website (https://www.shinkeisei.co.jp/ir/) pursuant to laws and Article 16 of the Articles of Incorporation of Shin-Keisei.

(2) Details of a material disposal of assets, material assumption of debts and other events having a material impact on the status of the company’s assets

　1) Keisei

　(i) Execution of the Share Exchange Agreement

　　Keisei, at its board of directors meeting held on April 28, 2022, resolved to conduct the Share

Exchange that makes Keisei the wholly-owning parent company and Shin-Keisei its wholly-owned subsidiary, and the Share Exchange Agreement was executed on the same date. The content of the Share Exchange Agreement is as stated in the section above titled “2. Outline of the Share Exchange Agreement.”

(ii) Acquisition of treasury stock

Keisei, at its board of directors meeting held on April 28, 2022, adopted a resolution about matters related to the acquisition of treasury stock. During a period from April 29, 2022 to August 31, 2022, Keisei will acquire 5,000,000 shares (at the maximum) of Keisei stock at the acquisition price of 18,000,000,000 yen (at the maximum).

2) Shin-Keisei

(i) Execution of the Share Exchange Agreement

Shin-Keisei, at its board of directors meeting held on April 28, 2022, resolved to conduct the Share Exchange that makes Keisei the wholly-owning parent company and Shin-Keisei its wholly-owned subsidiary, and the Share Exchange Agreement was executed on the same date. The content of the Share Exchange Agreement is as stated in the section above titled “2. Outline of the Share Exchange Agreement.”

(ii) Retirement of treasury stock

Shin-Keisei will, on the Record Date, retire all shares of treasury stock held by Shin-Keisei on the Record Date (including the shares acquired by Shin-Keisei due to a share repurchase request exercised by its shareholders under Article 785, Paragraph 1 of the Companies Act in connection with the Share Exchange) by a resolution of a meeting of the board of directors held no later than the day immediately prior to the Effective Date of the Share Exchange.

The disposition of surplus will be as follows.

Matters related to year-end dividends

Our basic policy for dividends is to return profits stably and continuously to shareholders, while strengthening and stabilizing the management infrastructure and considering ensuring retained earnings to be used to make capital investments for safe transportation, improvement of customer service and the like and strengthen the corporate structure in the future.

Based on this policy, we have determined that the year-end dividend for the term should be 12.5 yen per share.

Because the interim dividend of 12.5 yen per share was already paid, the amount of annual dividends for the term is 25 yen per share.

　Money

　12.5 yen per share of Shin-Keisei common stock

　Total amount of the dividend: 137,215,425 yen

　June 29, 2022

　The term of office of all the current 11 directors will expire upon the conclusion of this ordinary general meeting of shareholders.

　For this reason, we would like to ask you to elect 11 directors. Director candidates are listed below.

Candidate No.		Yukihito Mashimo		Date of birth: February 1, 1962
1				Number of Shin-Keisei shares held: 20,000
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
			Apr. 1984	Joined Keisei Electric Railway Co., Ltd.
			Jun. 2013	Managing Director of Keisei
			Jun. 2015	Representative Director and Vice President of Shin-Keisei
			Jun. 2016	Representative Director and President of Shin-Keisei
				To the present
		Reason for designating him as a director candidate
		He has been engaged in making important management decisions and supervising the execution of business and has experience and ability suitable for a manager of Shin-Keisei. For this reason, we continue to designate him as a director candidate.

Candidate No.		Kazumi Taguchi		Date of birth: May 9, 1960
2				Number of Shin-Keisei shares held: 14,400
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
			Apr. 1984	Joined Shin-Keisei
			Jun. 2011	General Manager of the Railway Planning Department, Railway Business Division of Shin-Keisei
			Jun. 2012	General Manager of the Railway Sales Department, Railway Business Division of Shin-Keisei
			Jun. 2014	Director and General Manager of the Railway Sales Department, Railway Business Division of Shin-Keisei
			Jun. 2015	Director and General Manager of the General and Personnel Affairs Department of Shin-Keisei
			Jun. 2016	Managing Director and General Manager of the Railway Business Division of Shin-Keisei
			Jun. 2021	Senior Managing Director and General Manager of the Railway Business Division of Shin-Keisei
				To the present
		Reason for designating him as a director candidate
		He is familiar with overall operations of Shin-Keisei and has experience and ability suitable for a manager of Shin-Keisei. For this reason, we continue to designate him as a director candidate.

Candidate No.		Shinji Nagami		Date of birth: May 11, 1962
3				Number of Shin-Keisei shares held: 9,300
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
			Apr. 1986	Jointed Japan Development Bank (current Development Bank of Japan, Inc.
			Jun. 2010	General Manager of the Administration Department and Head of Otemachi Redevelopment Business Promotion Office of Development Bank of Japan, Inc.
			Jul. 2013	Representative Director and President of DBJ Real Estate Co., Ltd.
			Jun. 2015	Director and General Manager of the Financial Strategy Department of Shin-Keisei (vice in charge of development promotion)
			Jun. 2018	Managing Director and General Manager of the Financial Strategy Department of Shin-Keisei (in charge of development promotion)
			Jun. 2019	Managing Director of Shin-Keisei (in charge of financial strategy and development promotion)
				To the present
		Reason for designating him as a director candidate
		He has been engaged in corporate management so far and has experience and ability suitable for a manager of Shin-Keisei. For this reason, we continue to designate him as a director candidate.

Candidate No.		Kunihiko Yoshikawa		Date of birth: July 15, 1963
4				Number of Shin-Keisei shares held: 9,900
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
			Apr. 1987	Joined Shin-Keisei
			Jun. 2012	General Manager of the Financial Strategy Department of Shin-Keisei
			Jun. 2014	Head of the Internal Audit Office and Head of the Management Planning Office of Shin-Keisei
			Jun. 2016	Director, Head of the Internal Audit Office and Head of the Management Planning Office of Shin-Keisei
			Jun. 2018	Director and Head of the Internal Audit Office of Shin-Keisei (in charge of general and personnel affairs)
			Jun. 2021	Managing Director and General Manager of the Internal Audit Department of Shin-Keisei (in charge of general and personnel affairs)
				To the present
		Reason for designating him as a director candidate
		He is familiar with overall operations of Shin-Keisei and has experience and ability suitable for a manager of Shin-Keisei. For this reason, we continue to designate him as a director candidate.

Candidate No.		Yoshikazu Kawai		Date of birth: December 6, 1964
5				Number of Shin-Keisei shares held: 9,300
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
			Apr. 1987	Joined Shin-Keisei
			Jun. 2012	General Manager of the General and Personnel Affairs Department of Shin-Keisei
			Apr. 2015	General Manager of the General and Personnel Affairs Department and General Manager in charge of the Railway Technology Department, Railway Business Division of Shin-Keisei
			Jun. 2015	General Manager of the Railway Sales Department and General Manager in charge of the Railway Technology Department, Railway Business Division of Shin-Keisei
			Jun. 2016	Director, Vice General Manager of the Railway Business Division and General Manager of the Railway Sales Department of Shin-Keisei
			Jun. 2018	Director, Head of the Management Planning Office and General Manager in charge of the Vehicle Electricity Department, Railway Business Division of Shin-Keisei
			Jun. 2021	Managing Director (in charge of management planning) and Representative Director and Chairman of the Funabashi Shin-Keisei Bus Co., Ltd.
				To the present
			(Important concurrent positions)
			Outside director of Toyo Rapid Railway Co., Ltd.
			Representative Director and Chairman of Funabashi Shin-Keisei Bus Co., Ltd.
		Reason for designating him as a director candidate
		He is familiar with overall operations of Shin-Keisei and has experience and ability suitable for a manager of Shin-Keisei. For this reason, we continue to designate him as a director candidate.

Candidate No.		Soichi Tada		Date of birth: December 28, 1959
6				Number of Shin-Keisei shares held: 6,700
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
			Apr. 1983	Jointed JDC Corporation
			Apr. 2005	General Manager of the Construction Department, Civil Engineering Division, Tokyo Branch of JDC Corporation
			Apr. 2008	Joined Shin-Keisei
			Jun. 2012	General Manager of the Continuous Grade Separation Construction Department, Railway Business Division of Shin-Keisei
			Jun. 2016	General Manager of the Railway Facility Department, Railway Business Division of Shin-Keisei
			Jun. 2018	Director and General Manager of the Railway Facility Department, Railway Business Division of Shin-Keisei
				To the present
		Reason for designating him as a director candidate
		He is familiar with overall operations of Shin-Keisei and has experience and ability suitable for a manager of Shin-Keisei. For this reason, we continue to designate him as a director candidate.

Candidate No.		Sakae Aihara		Date of birth: August 10, 1964
7				Number of Shin-Keisei shares held: 8,300
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
			Apr. 1987	Joined Shin-Keisei
			Jun. 2014	General Manager of the Railway Technology Department, Railway Business Division of Shin-Keisei
			Jun. 2016	General Manager of the Vehicle Electricity Department, Railway Business Division of Shin-Keisei
			Jun. 2018	Director and General Manager of the Vehicle Electricity Department, Railway Business Division of Shin-Keisei
				To the present
		Reason for designating him as a director candidate
		He is familiar with overall operations of Shin-Keisei and has experience and ability suitable for a manager of Shin-Keisei. For this reason, we continue to designate him as a director candidate.
Candidate No.		Toshiya Kobayashi		Date of birth: July 30, 1959
8				Number of Shin-Keisei shares held: 700
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
Outside			Apr. 1982	Joined Keisei Electric Railway Co., Ltd.
			Jun. 2017	Representative Director and President of Keisei Electric Railway Co., Ltd.
			Jun. 2019	Outside Director of Shin-Keisei
				To the present
			Oct. 2021	Representative Director, President and Executive Officer of Keisei Electric Railway Co., Ltd.
				To the present
			(Important concurrent positions)
			Representative Director, President and Executive Officer of Keisei Electric Railway Co., Ltd.
			Auditor of Hokuso-Railway Co., Ltd.
		Reason for designating him as an outside director candidate and the outline of the expected role
		He has abundant management experience and broad knowledge that he has gained as a corporate manager and is expected to supervise and check the execution of directors’ duties related to general management issues of Shin-Keisei from an objective viewpoint. To ensure the objectivity and neutrality of management decisions, we continue to designate him as an outside director candidate. He will have served as an outside director of Shin-Keisei for three years upon the conclusion of this general meeting.

Candidate No.		Takako Amitani		Date of birth: July 21, 1958
9				Number of Shin-Keisei shares held: 700
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
Outside			Sep. 1993	Registered as a certified public accountant
Independent officer			Sep. 1993	President of Amiya Certified Public Accountant Office
				To the present
			Mar. 2005	Registered as a licensed tax accountant
			Jun. 2019	Outside director of Shin-Keisei
				To the present
		Reason for designating her as an outside director candidate and the outline of the expected role
		She has abundant experience and broad knowledge as a certified public accountant and is expected to supervise, and give advice for, directors’ execution of duties from a professional viewpoint particularly in connection with the finance and accounting departments. To ensure the objectivity and neutrality of management decisions, we continue to designate her as an independent outside director candidate. Although she has no experience in corporate management, we think that she is able to perform duties as an outside director appropriately for the reason stated above. She will have served as an outside director of Shin-Keisei for three years upon the conclusion of this general meeting.

Candidate No.		Hitoshi Ikeda		Date of birth: July 15, 1959
10				Number of Shin-Keisei shares held: 300
Reappointed			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
Outside			Apr. 1983	Joined the Chiba Bank, Ltd.
Independent officer			Jun. 2016	Advisor of the Chiba Bank, Ltd.
				To the present
			Jun. 2020	Outside Director of Shin-Keisei
				To the present
		Reason for designating him as an outside director candidate and the outline of the expected role
		He has abundant experience in financial affairs and as a manager and is expected to supervise, and give advice for, the execution of directors’ duties from an objective viewpoint. To ensure the objectivity and neutrality of management decisions, we continue to designate him as an independent outside director candidate. He will have served as an outside director of Shin-Keisei for two years upon the conclusion of this general meeting.

Candidate No.		Koji Yamada		Date of birth: January 27, 1968
11				Number of Shin-Keisei shares held: 0
New appointment			Brief personal history and status and duties in Shin-Keisei (important concurrent positions)
Outside			Apr.1991	Joined Keisei Electric Railway Co., Ltd.
			Oct.2021	Executive Officer of Keisei Electric Railway Co., Ltd.
				To the present
			(Important concurrent positions)
			Director and Executive Officer of Keisei Electric Railway Co., Ltd.
			Outside Director of Toyo Rapid Railway
		Reason for designating him as an outside director candidate and the outline of the expected role
		He has been nominated as a candidate for the position of Outside Director.
		He has management experience and extensive knowledge that he has amassed as a corporate executive. If elected, he is expected to oversee and check the directors’ execution of their overall management duties from an objective perspective and to ensure the objectivity and neutrality of management decisions made.

Business Report (from April 1, 2021 to March 31, 2022)

1. Matters concerning the status of the group of companies

(1) Business progress and results

During this consolidated fiscal year, Japan’s economy continued to face challenging conditions despite the fact that economy activities showed signs of recovery amid the ongoing impacts of the COVID-19 pandemic.

Under these circumstances, the Shin-Keisei Group continued to make efforts to strengthen its business management fundamentals and to improve its operational efficiency with a particular focus on the further improvement of safety management system.

As a result, operating income from all operations increased by 8.4 percent from 1,455 million yen to 18,871 million yen year on year. Operating profit from all operations were 603 million yen (operating loss of 689 million yen was incurred in the previous year), ordinary income was 861 million yen (ordinary loss of 364 million yen was incurred in the previous year), and net profit attributable to owners of the parent was 520 million yen (net loss attributable to owners of the parent of 1,085 million yen was incurred in the previous year).

The convenience store segment, which used to be classified as “Other,” has now been presented as a separate business segment due to its increased quantitative importance.

Transportation segment

In the train operations, digital ATS was installed and the external walls and roof of the Misaki Station building were improved as part of our efforts to provide safe transportation services. At Tokiwadaira Station and Takifudo Station, braille blocks with inward lines were installed and the station platforms were leveled to make the facilities barrier free. To provide better customer service, 80000 series one-car trains were introduced in November 2021 as well as the escalators at Takanekido Station were improved.

In an effort to reduce our environmental impact, the feeder cables for the up line and down line between the Goko substation and the Kamihongo substation were integrated, a VVVF inverter system installed on 8800 series one-car trains was upgraded, and LED lights were installed on trains.

For the enhancement of customer experience, we made various efforts to attract more passengers and increase sales. They include marketing commemorative tickets such as a “Cat Day Commemorative Takaneko Udan Train Ticket/Platform Ticket” and other original goods, which were all snapped up on the day they went on sale, introducing Chiba Lotte Marines and Chiba Jets Funabashi wrapping trains, and organizing recreational events such as fruit picking and healthy lineside hiking. In addition, we again operated a “Shin-Keisei Dream Train” which was decorated with children’s drawings, as we did in the previous year, to revitalize the local communities and to attract new customers.

In the bus operations, nine trains were replaced with ones that are more friendly to the environment and elderly passengers, and the “Andersen Liner” and “Takane Liner” trains were launched to increase passenger convenience. In the Tokyo 2020 Olympic and Paralympic Games, we were contracted to transport those involved in the Games, and also entered into a naming rights agreement that allowed us to name bus stops, in order to increase profit. As a project implemented with a grant from the Japan Tourism Agency, we organized a digital stamp rally where people visited places of interest in Matsudo. The purpose of this project was to revitalize the lineside communities and to encourage people to use buses. Funabashi Shin-Keisei Bus Co., Ltd. introduced mobile PASMO to better serve customers. Shin-Keisei has been certified as a One-Star Operator in the Workplace Certification System (officially known as Drivers’ Good Workplace Environment Certification System) developed by the Ministry of Land, Infrastructure, Transport and Tourism.

As a result, operating income increased by 8.9 percent from 1,089 million yen to 13,322 million yen year on year and operating loss was 967 million yen (operating loss of 2,148 million yen was incurred in the previous year).

Real estate segment

In the real estate lease operations, new leased properties located in Midorigaoka-nishi, Yachiyo-shi (Yoshihashi 85 district) and in Kanegasaku, Matsudo-shi became available for lease. We made active efforts to attract prospective tenants to increase and maintain the occupancy rate.

As a result, operating income increased by 1.1 percent from 37 million yen to 3,323 million yen year on year and operating profit increased by 4.9 percent from 67 million yen to 1,463 million yen year on year.

Convenience store segment

In the convenience store operations, we attempted to improve convenience and profitability by offering a wider selection of products that catered to customers’ changing needs during the pandemic. We also continued to sell regional products and specialties produced in partnership with lineside farmers as well as contributed to the local communities by organizing a “Shin-Keisei Marche” and a “Work Experience” program for elementary school children.

As a result, operating income increased by 16.6 percent from 337 million yen to 2,371 million yen year on year and operating profit increased by 129.1 percent from 46 million yen to 81 million yen year on year.

(2) Issues to be addressed

In the medium to long term, the business environment surrounding the Shin-Keisei Group is expected to be impacted by the declining birthrate and aging population as well as the decreasing working-age population among the lineside communities. Furthermore, changes in the business environment caused by the impact of the COVID-19 pandemic also affected our operations, resulting in lower revenue in transportation operations in particular.

In order to deal with this situation, the Shin-Keisei Group developed a medium-term management plan called “S4 Plan” in April 2019 and implemented it for three years until March 2022. The purpose of the plan is to make the Shin-Keisei Group a company trusted by customers and local communities by operating with safety, security, and comfort in mind while building attractive lineside communities where people want to continue to live or aspire to live, by providing services that foresee their needs.

Based on our past efforts and through the strengthening of our business management fundamentals and the creation of new business domains, regional vitalization by co-existing with and supporting local communities, and the improvement of regional brand power, we strive to enhance the appeal of the Group and to increase the level of trust by customers and local communities.

(3) Capital investment

Capital investments made by the Shin-Keisei Group in this consolidated fiscal year reached 4,131 million yen and they include:

Transportation segment

Installation of a digital train radio system

Improvement of an emergency alarm device

Installation of digital ATS (between Narashino Station and Takanekodan Station)

Leveling of the station platforms and installation of braille blocks with inward lines on the station platforms (Tokiwadaira Station)

Introduction of new trains (80000 series one-car trains)

Installation of a full SiC-applied VVVF inverter system on 8800 series trains

Improvement of station escalators (Takanekido Station)

Modification of station equipment in response to increased convenience of IC cards

Manufacture of new buses (nine buses)

Real estate segment

Construction of a leased property at Midorigaoka-nishi, Yachiyo-shi (Yoshihashi 85 district)

(4) Financing

The outstanding balance as of the end of the previous year was 10,949 million yen, an increase of 525 million yen from the end of the previous year.(5) Financial position and results of operations for the past three fiscal years

(6) Important status of parent company, subsidiaries, and business combination

1) Status of parent company

Not applicable

2) Important status of subsidiaries

Note: Shin-Keisei does not have any specified wholly-owned subsidiaries.　　

3) Important status of business combination

Note: Keisei Electric Railway Co., Ltd. holds 44.45 percent of Shin-Keisei’s outstanding shares.

(7) Principal business activities (as of March 31, 2022)

Transportation segment

Real estate segment

Convenience store segment

(8) Principal places of business (as of March 31, 2022)

(9) Employees (as of March 31, 2022)

1) Employees of the Shin-Keisei Group

Note: The number of employees represents the number of employees gainfully employed. The annual average number of temporary workers is not included in the number of employees and is indicated in parenthesis.

2) Employees of Shin-Keisei

Note: The number of employees represents the number of employees gainfully employed. The annual average number of temporary workers is not included in the number of employees and is indicated in parenthesis.

(10) Major lenders (as of March 31, 2022)

2. Matters concerning shares of Shin-Keisei (as of March 31, 2022)

(4) Major shareholders (top ten shareholders)

Note: Shareholding percentage has been calculated without including treasury stock (45,994 shares).

3. Matters concerning Officers

(1) Directors and audit & supervisory board members (as of March 31, 2022)

(2) Brief description of limited liability agreement

A limited liability agreement was executed between Shin-Keisei and Ms. Takako Amitani, Director; Mr. Hitoshi Ikeda, Director; and Mr. Kouichi Yamakado, Director. Under this agreement, their liability is limited to the maximum amount specified in the Companies Act if they perform their duties in good faith and there is no gross negligence on their part with respect to their liability under Article 423, Paragraph 1 of the Companies Act.

(3) Brief description of directors’ liability insurance

Shin-Keisei took out a directors’ liability insurance policy specified in Article 430-3, Paragraph 1 of the Companies Act, with an insurance company, with the directors and audit & supervisory board members of Shin-Keisei and its subsidiaries being named as the insured. The policy covers the insured’s liability arising in the execution of their duties or any damage that may be caused due to a claim filed to pursue such liability. However, the policy contains certain exclusions under which damage arising out of an act committed in the knowledge that such act constitutes a violation of law is not covered. Shin-Keisei pays the insurance premiums in full, and effectively, no payment is due from the insured.

(4) Remuneration etc. of directors and audit & supervisory board members

1) Policy for determining officers’ remuneration etc.

Shin-Keisei approved a policy to determine each director’s remuneration etc. at a meeting of the board of directors held on January 28, 2021.

In addition to basic remuneration, which is determined based on a director’s position, performance etc., full-time directors are given remuneration designed to allow them to acquire Shin-Keisei’s shares in order to motivate them to contribute to improving corporate value in the medium to long term. Fixed remuneration is paid on a monthly basis only. The decision on the amount of each director’s remuneration is left entirely to the president and CEO at a board meeting and then such amount is determined by the president and CEO to the extent approved by a resolution of a shareholders’ meeting.

The decision on each director’s remuneration etc. for this fiscal year has been left entirely to the president and CEO and the remuneration etc. has been determined based on the director’s position, performance, etc. and to the extent approved by a resolution of a shareholders’ meeting. For this reason, the board of directors believes that this is consistent with a policy approved by the board of directors

2) Matters concerning a shareholders’ meeting resolution about remuneration of directors and audit & supervisory board members

The maximum amount of remuneration for Shin-Keisei’s officers was approved at a shareholders’ meeting held on June 25, 2010. It was resolved that remuneration of directors must not exceed 260 million yen per year while remuneration of audit & supervisory board members must not exceed 65 million yen per year. The number of directors and audit & supervisory board members existing at the end of the shareholders’ meeting was 12 and 4, respectively. Moreover, it was resolved at a shareholders’ meeting held on June 28, 2016 that remuneration of outside directors must not exceed 30 million yen per year. The number of outside directors existing at the end of the shareholders’ meeting was four.

3) Matters concerning the delegation of decision-making on each director’s remuneration etc.

At Shin-Keisei, the decision on the amount of each director’s remuneration is left entirely to Mr. Yukihito Mashimo, President and CEO, at a board meeting and then such amount is determined by the president and CEO to the extent approved by a resolution of a shareholders’ meeting. The reason for the delegation is that Shin-Keisei believes the president and CEO is best suited to assess each director’s responsible department while considering the overall performance of Shin-Keisei.

4) Total amount of remuneration etc. paid to directors and audit & supervisory board members

(5) Major activities of outside officers during this fiscal year

- Outside directors

- Outside audit & supervisory board members

4. Matters concerning the accounting auditor

(1)         Name                  Crowe Toyo & Co.

(2)         Amount of remuneration

(3)         Policy for dismissing or not reappointing the accounting auditor

If Shin-Keisei is satisfied that the accounting auditor has fallen into any of the items of Article 340, Paragraph 1 of the Companies Act, Shin-Keisei will immediately investigate the situation. If Shin-Keisei determines that the accounting auditor is unable or unfit to perform audits, Shin-Keisei will take steps to dismiss or not to reappoint the accounting auditor in accordance with the procedures specified by the Companies Act.

5. Basic policy concerning control of Shin-Keisei

Currently, Shin-Keisei has no specific basic policy as to how to treat persons who have control over the determination of its financial and business policies.

* Figures and the number of shares presented in this business report have been rounded to the nearest whole number. Percentages have been rounded to two decimal places.

Consolidated Balance Sheet

Consolidated Statement of Income

Non-Consolidated Balance Sheet

Non-Consolidated Statement of Income

Accounting auditor's report for consolidated financial statements

Accounting Audit Report on Financial Statements

Report of the Audit & Supervisory Board

Map of the venue of the General Meeting of the Shareholders

EXHIBIT 99.2

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.

To all shareholders

Matters Disclosed on the Internet Concerning

Notice of Convocation of the Ordinary General

Meeting of Shareholders for the 104th Term

Business Report

　■ Systems for Ensuring Proper Business Operations and

　　Outline of Operational Status of the Systems

Consolidated Financial Statements

　■ Consolidated Statement of Changes in Shareholders’ Equity

　■ Notes to Consolidated Financial Statements

Non-Consolidated Financial Statements

　■ Statement of Changes in Shareholders’ Equity

　■ Notes to Non-Consolidated Financial Statements

(From April 1, 2021 to March 31, 2022)

Shin-Keisei Electric Railway Co., Ltd.

Systems for Ensuring Proper Business Operations and Outline of Operational Status of the Systems

1.         Systems for Ensuring Proper Business Operations

Shin-Keisei has developed the basic policy on the system for ensuring that directors execute their duties in compliance with laws and regulations as well as the Articles of Incorporation, and other systems for ensuring proper corporate business operations (hereinafter referred to as “Internal Control Systems”) as follows:

Basic Policy on Internal Control Systems

[Basic Management Policy]

Shin-Keisei and its group companies strive to continuously improve their corporate values for the purpose of being companies that contribute to the development of local communities based on legal and proper business activities in order to be trusted by customers, provide customers with safe and comfortable transportation and other services, and fulfill their corporate social responsibilities.

(1)         System for ensuring that directors and employees execute their duties in compliance with laws and regulations as well as the Articles of Incorporation

(2)         System for retaining and managing information related to duties executed by directors

(3)         Regulations and other systems for the management of risk of loss

(4)         System for ensuring the efficient execution of duties by directors

(5)         System for ensuring proper business operations in the corporate group consisting of Shin-Keisei and its subsidiaries

(6)         Matters related to employees who are to assist audit and supervisory board members in executing duties where the members request that such employees be assigned

(7)         Matters related to the independence of employees who are to assist audit and supervisory board members in executing duties from directors, and matters for ensuring the effectiveness of audit and supervisory board members’ instructions to the employees

(8)         System for reports to audit and supervisory board members

(9)         System for ensuring that persons who have reported to audit and supervisory board members are not treated in a disadvantageous manner on the grounds of such report

(10) Matters related to the policy on procedures for paying in advance or reimbursing expenses incurred by audit and supervisory board members in executing their duties, or other processing of expenses or obligations resulting from the execution of the duties

(11) Other systems for ensuring effective audits by audit and supervisory board members

2. Outline of Operational Status of Systems for Ensuring Proper Business Operations Shin-Keisei has developed systems listed in the “Basic Policy on Internal Control Systems” and based on the Basic Policy, been making the following efforts:

(1) Execution of duties by directors

The board of directors of Shin-Keisei held meetings eight (8) times to decide important matters in line with laws and regulations as well as the Articles of Incorporation, and to supervise directors in the performance of their business which was based on the mid-term management plan (amended plan for the fiscal year 2021).

(2) Thorough compliance

The compliance subcommittee constituted by Shin-Keisei and its subsidiaries held meetings twice to integrate various efforts including compliance training programs.

Through “compliance counters” established in and outside the company as a whistleblower system, the subcommittee strived to enhance the whistleblower system and continuously familiarized employees with the system.

In addition, the internal audit department conducted internal audits based on the audit plan with respect to the safeguarding of assets and the operation of business of Shin-Keisei and its subsidiaries.

The subcommittee also familiarized Shin-Keisei and its subsidiaries with the code of conduct for complying with social norms and fulfilling their corporate social responsibilities.

(3) Risk management

The risk management subcommittee constituted by Shin-Keisei and its subsidiaries held meetings four (4) times to regularly review the identification, classification and evaluation of risks, and verified measures taken therefor.

Various training programs were provided for ensuring transportation safety assuming railroad accidents should they occur.

For the spread of the novel coronavirus disease, the novel coronavirus response headquarters have been mainly taking measures to prevent infection spread according to the directions of the central and local governments.

(4) Proper business operations in subsidiaries

The department managing subsidiaries managed the companies based on the related company management regulations, and the meetings of the group company presidents were regularly held to share management information with Shin-Keisei.

(5) Execution of duties by audit and supervisor board members

The audit and supervisory board of Shin-Keisei held meetings seven (7) times and its members conducted audits based on the audit plan established by the board. The members confirmed the conduct of audits on directors in executing their duties, and the development and operation of internal controls, through attendance in meetings of the board of directors and regular exchange of opinions between the accounting auditor and the internal audit department.

Consolidated Statement of Changes in Shareholders’ Equity

(Unit: Thousands of yen)

Notes to Consolidated Financial Statements

[Notes on Important Matters that Serve as the Basis for Preparation of Consolidated Financial Statements]

Funabashi Shin-Keisei Bus Co., Ltd., Matsudo Shin-Keisei Bus Co., Ltd., Shinkeisei Retailing Net Co., Ltd.

SK-Service Co., Ltd., SP-Parking Co., Ltd., Shinkeisei Estate Co., Ltd., Shin-Keisei Frontier Kikaku Co., Ltd.

(Reason for exclusion from the scope of consolidation)

Non-consolidated subsidiaries are small-sized companies and their total assets, sales, current period profit or loss (amount corresponding to equity) and retained earnings (amount corresponding to equity) in total do not have a material impact on consolidated financial statements.

Names of the companies: Keisei Construction, Inc., Keisei Sharyo Kogyo Co., Ltd.

The fiscal year-ends of consolidated subsidiaries are consistent with the end of each consolidated accounting period.

(i) Securities

Other securities

(ii) Inventories

Valuation standards are according to the cost method (values in the consolidated balance sheet are subject to the book value reduction method based on decreased profitability).

Provision for bonuses

To appropriate to bonuses paid to employees, the amount borne in the current period from the amount expected to be paid in the future is recorded.

Contributions in aid of construction accepted by local governments (or the Ministry of Land, Infrastructure, Transport and Tourism) for the acquisition of noncurrent assets are recorded by reducing an amount equivalent to those contributions in aid of construction directly from the cost of acquisition of noncurrent assets at the completion of construction work. In the consolidated profit and loss statement, the amount of proceeds from contributions in aid of construction are recorded in extraordinary profits, and the amount directly reduced from the cost of acquisition of noncurrent assets is recorded in extraordinary losses as loss on reduction of noncurrent assets.

(i) Recording standards for revenue in the main business

Revenue is recognized in the amount expected to be received in exchange for promised goods or services when control over the goods or services is transferred to the customer.

With respect to a commuter pass sold by Shin-Keisei as a “transportation undertaking,” revenue is recognized over the period of validity of the pass depending on its type.

(ii) Recording standards for revenue in finance lease transactions

Sales and the cost of sales are recorded at the time of receipt of lease payments.

As the method of hedge accounting, special treatment is adopted for interest rate swaps.

Accounting related to retirement benefits

To prepare for the payment of retirement benefits to employees, the amount obtained by deducting the amount of pension assets from retirement benefit obligations is recorded as the net defined benefit liability based on the projected amount of the benefit obligations at the end of the current consolidated accounting period (however, if the amount of pension assets exceeds those obligations, that amount is recorded as the amount of the net defined benefit asset).

With respect to actuarial gain or loss arising in each consolidated accounting period, the amount prorated according to the straight-line method over certain years (10 years) within the average remaining years of service of employees at the time the gain or loss arises is processed mainly for the following consolidated accounting period.

Unrecognized actuarial gain or loss is recorded in remeasurements of defined benefit plans in accumulated other comprehensive income in net assets after tax effect adjustments.

[Notes on Changes in Accounting Policy]

1. Application of accounting standards for revenue recognition

From the beginning of the current consolidated accounting period, accounting standards including the “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan No. 29 of March 31, 2020; hereinafter referred to as the “Revenue Recognition Accounting Standard”) have applied, and it is thus decided that revenue is recognized in the amount expected to be received in exchange for promised goods or services when control over the goods or services is transferred to the customer. According to this, with respect to a commuter pass sold by Shin-Keisei as a “transportation undertaking,” the method of revenue recognition has been changed to the effect that revenue is recognized over the period of validity of the pass, while it was recognized over a certain period of time depending on the type of the pass based on the month it was sold in the past.

With respect to the application of accounting standards including the Revenue Recognition Accounting Standard, in accordance with the transitional treatment prescribed in the proviso to paragraph 84 of the Revenue Recognition Accounting Standard, the cumulative effect amount to be recognized in the case of retroactive application of the new accounting policy prior to the beginning of the current consolidated accounting period is added to or deducted from retained earnings at the beginning of the current consolidated accounting period for the application of the new policy from the beginning thereof.

As a result, sales in the current consolidated accounting period increased by 86,089,000 yen, and operating income, ordinary income and income before income taxes and others increased by 86,089,000 yen, respectively, while the balance of retained earnings at the beginning of the current period decreased by 59,866,000 yen.

2. Application of accounting standards for fair value measurement

From the beginning of the current consolidated accounting period, accounting standards including the “Accounting Standard for Fair Value Measurement (Accounting Standards Board of Japan No. 30 of July 4, 2019; hereinafter referred to as the “Fair Value Measurement Accounting Standard”) have applied, and in accordance with the transitional treatment prescribed in paragraph 19 of the Fair Value Measurement Accounting Standard and paragraph 44-2 of the “Accounting Standard for Financial Instruments” (Accounting Standards Board of Japan No. 10 of July 4, 2019), it is thus decided that the new accounting policy prescribed in accounting standards including the Fair Value Measurement Accounting Standard applies prospectively.

There is no impact of this application on consolidated financial statements.

[Notes on Changes in Method of Presentation]

Consolidated profit and loss statement

It is decided that “grant income,” which has been presented in “others” in non-operating income for the previous consolidated accounting period and prior thereto, is listed separately from the current consolidated accounting period since the grant income becomes more important in terms of the amount.

[Notes on Accounting Estimates]

1.         Impairment loss on noncurrent assets

　　　　Impairment loss:　　　-,000 yen

The Shin-Keisei Group groups its assets as the minimum unit of generating independent cash flows. Specifically, noncurrent assets - railway business are grouped by line as a whole, noncurrent assets - bus business are grouped by bus business operator, and noncurrent assets - real estate business are grouped by rental property. If an indication of impairment exists, the possibility of recognizing the impairment is determined based on future cash flow estimates.

For such future cash flow estimates, certain assumptions are made about factors including a percentage increase or decrease in the number of passengers carried due to trends of population along the railway or bus line or impacts of the novel coronavirus decease in the railway business and bus business, and the tenant retention rate in the real estate business.

These assumptions may be affected by factors such as changes in uncertain economic conditions in the future, and if it becomes necessary to review future cash flows, such review may have a material impact on consolidated financial statements for the following consolidated accounting period and thereafter.

2.         Recoverability of deferred tax assets

Deferred tax assets:                   5,976,000 yen

Deferred tax liabilities:         951,018,000 yen

With respect to deferred tax assets, unused tax loss carried forward and deductible temporary differences are recognized to the extent that available taxable income is highly likely to accrue. For the determination of the possibility that taxable income accrues, the time and amount in which taxable income may be earned in the future are reasonably estimated to measure the amount. These estimates will be affected by uncertain economic conditions and corporate business conditions in the future, and if the actual time and amount are different from the estimates, such difference may have a material impact on the amount recognized in consolidated financial statements for the following consolidated accounting period and thereafter. If the effective tax rate is changed due to a tax reform, such change may have a material impact on the amount recognized in consolidated financial statements for the following consolidated accounting period and thereafter.

3.         Impacts of spread of the novel coronavirus disease

The Shin-Keisei Group has been affected by the spread of the novel coronavirus disease, and makes accounting estimates including that on the recoverability of deferred tax assets, assuming that the situation will gradually return to normal, but certain impact will remain. Since estimates related to the spread or convergence of the novel coronavirus disease involve uncertainty, actual results may be different from these assumptions.

[Notes to Consolidated Balance Sheet]

1.         Pledged assets and collateral-related liabilities

4.        Amount of allowance for doubtful accounts directly deducted from the amount of assets

[Notes to Consolidated Profit and Loss Statement]

With respect to sales, revenue form contracts with customers and revenue other than that are not divided. The amount of revenue from contracts with customers is provided in “Notes on Revenue Recognition, 1. Information on disaggregation of revenue from contracts with customers.”

[Notes to Consolidated Statement in Shareholders’ Equity]

　　Common stock　　　11,023,228 shares

t

[Notes on Financial Instruments]

The Shin-Keisei Group manages funds limited to short-term deposits and raises funds through borrowings from financial institutions such as banks.

Customers’ credit risk associated with accounts receivable is managed for reduction in accordance with the internal management regulations. Investment securities are shares of stock, and the fair value of listed shares of stock is grasped on a quarterly basis.

Borrowings are used as working capital and finance capital expenditure, and for the interest volatility risk in some long-term borrowings, interest swap transactions are carried out for fixation of the interest expense. Derivatives are limited to the above transactions in accordance with the internal management regulations.

The amount, fair value and difference between them in the consolidated balance sheet as of March 31, 2022 are as follows:

(Unit: Thousands of yen)

　 (*) Those recorded as liabilities are shown in parentheses.

The fair value of financial instruments is classified into the following three levels according to the observability and importance of the input used for valuation:

If several inputs that have a material impact on the fair value measurement are used, the fair value is classified into the level whose priority in fair value measurement is the lowest among the levels to which those inputs are attributable.

(1) Financial instruments recorded in the consolidated balance sheet at the fair value

(Unit: Thousands of yen)

(2) Financial instruments other than those recorded in the consolidated balance sheet at the fair value

(Unit: Thousands of yen)

(Note) Valuation means used for fair value measurement and explanations on inputs related thereto

Investment securities

Listed shares of stock are valuated using quoted prices. Listed shares of stock are traded on active markets and classified into the level 1 fair value.

Lease investment assets

They are measured at the present value of the total amount of principal and interest discounted at a rate expected in cases of similar new lease transactions, and classified into the level 3 fair value due to the use of material unobservable input.

Long-term borrowings (including those to be repaid within one year)

They are measured at the present value of the total amount of principal and interest discounted at a rate expected in cases of similar new borrowings, and classified into the level 2 fair value.

[Notes on Leased Real Estate]

Shin-Keisei owns buildings for rent (including their land) in Chiba Prefecture.

[Notes on Per-Share Information]

[Notes on Material Event after Reporting Period]

Execution of the Share Exchange Agreement

The board of directors of Shin-Keisei adopted at its meeting held on April 28, 2022 the resolution that a share exchange in which Keisei Electric Railway Co., Ltd. (hereinafter referred to as “Keisei”) would be the wholly owning parent company resulting from the share exchange and Shin-Keisei would be the wholly owned subsidiary company resulting from the share exchange be carried out (hereinafter referred to as the “Share Exchange”), and on the same date, a share exchange agreement was entered into between the two companies (hereinafter referred to as the “Share Exchange Agreement”).

It is scheduled that the Share Exchange will be carried out on September 1, 2022 as the effective date without approval at any meeting of shareholders of Keisei through procedures for a simplified share exchange under the provisions of Article 796, paragraph 2 of the Companies Act, and with approval for the Share Exchange Agreement by an extraordinary resolution adopted at the ordinary general meeting of shareholders of Shin-Keisei to be held on June 28, 2022.

It is also scheduled that on August 30, 2022 prior to the effective date of the Share Exchange (scheduled to be September 1, 2022), common shares of stock of Shin-Keisei (hereinafter referred to as the “Shares of Shin-Keisei”) will be delisted from the standard market of Tokyo Stock Exchange, Inc. (hereinafter referred to as the “Tokyo Stock Exchange”) (to be last traded on August 29, 2022).

(1) Purpose of the Share Exchange

We think the Share Exchange will bring about the following synergies:

- reinforcing both companies’ business foundation in northwestern Chiba Prefecture and revitalizing local communities;

- strengthening both companies’ competitiveness and expanding their business scale through mutual use of their business resources;

- achieving an efficient collaborative framework through leveraging economies of scale.

(2) Outline of the Share Exchange

(i) Schedule for the Share Exchange

(ii) Share Exchange method

The Share Exchange will be one in which Keisei will become the wholly owning parent company of Shin-Keisei and Shin-Keisei will become Keisei’s wholly owned subsidiary. The Share Exchange will be conducted with September 1, 2022 as the Planned Date, where Keisei takes a simplified share exchange procedure under Article 796, paragraph 2 of the Companies Act without obtaining approval from a general meeting of shareholders, and after Shin-Keisei obtains approval for the Share Exchange Agreement by resolution of an ordinary general meeting of shareholders to take place on June 28, 2022.

(iii) Description of allotment for the Share Exchange

Note 1: Allotment ratio for common stock

0.82 shares of common stock of Keisei (“Keisei Stock”) will be allotted for one Share of Shin-Keisei. However, for the 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 changes are 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 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:

Keisei stock: 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 the 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 Share Exchange Ratio 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 the 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 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: 1. type of stock subject to the acquisition: Keisei Stock; 2. 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%); 3. total amount of the stock acquisition: (up to) 18,000,000,000 yen; 4. period for the treasury stock acquisition: from April 29, 2022 to August 31, 2022; 5. acquisition method: market purchase including treasury stock purchase through the off-hours trading system (ToSTNeT-3) of the Tokyo Stock Exchange; 6. other items required: all decisions on the required items other than 1. to 5. above regarding the treasury stock acquisition shall be left entirely to the Representative Director and President; 7. (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 Planned Date for the Share Exchange.

The total number of shares of Keisei to be granted in the Share Exchange is subject to change in the future due to acquisition or retirement of treasury stock by Shin-Keisei.

(3) Grounds and reasons for allotment involved in the Share Exchange

In calculating the Share Exchange Ratio, each company 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. as a financial advisor and third-party calculation agency for the company, while Shin-Keisei selected the Development Bank of Japan Inc. as a financial advisor and third-party calculation agency for the company. As legal advisors independent of the two companies, Keisei appointed Takusyou Sogo Law Office and Shin-Keisei appointed Oh-Ebashi LPC & Partners.

Based on the share exchange ratio calculation report received from the third-party calculation agency of each company, advice from the legal advisor of each company and the result of due diligence on the other company carried out by each company, the two companies have carefully considered the terms and conditions of the Share Exchange including the Share Exchange Ratio and repeatedly consulted with each other on several occasions. As a result, the companies came to the conclusion that a share exchange at the Share Exchange Ratio was reasonable and contributed to the interests of shareholders of each company, and thus decided to carry out the Share Exchange at the Share Exchange Ratio and entered into the Share Exchange Agreement.

The Share Exchange Ratio is subject to change upon consultation by the two companies if any significant revision is made to the terms and conditions forming the basis for the calculation.

[Notes on Revenue Recognition]

It is as provided in “Notes on Important Matters that Serve as the Basis for Preparation of Consolidated Financial Statements, 4. Matters related to the accounting policy, (5) Recording standards for important revenue and expenses, (i) Recording standards for revenue in the main business.”

[Other Notes]

An amount shown is rounded down to the nearest thousand yen.

Statement of Changes in Shareholders’ Equity

Notes to Non-Consolidated Financial Statements

[Notes on Important Matters related to Accounting Policy]

Other securities

Valuation standards are according to the cost method (values in the balance sheet are subject to the book value reduction method based on decreased profitability).

Tangible property (excluding leased assets)

However, for buildings as noncurrent assets - railway business and noncurrent assets - shared acquired on and after April 1, 1998 (excluding facilities attached thereto) and facilities attached to buildings and structures acquired on and after April 1, 2016, the straight-line method is adopted.

For replacement assets as noncurrent assets - railway business, the replacement method is adopted.

The estimated useful lives for the majority are as follows:

To appropriate to bonuses paid to employees, the amount borne in the current year from the amount expected to be paid in the future is recorded.

To prepare for the payment of retirement benefits to employees, the amount obtained based on the projected amount of retirement benefit obligations and pension assets at the end of the current fiscal year is recorded.

With respect to actuarial gain or loss arising in each fiscal year, the amount prorated according to the straight-line method over certain years (10 years) within the average remaining years of service of employees at the time the gain or loss arises is processed mainly for the following fiscal year.

With respect to golf course membership, market prices at the end of the current fiscal year that are less than security deposits are recorded.

To prepare for loss on investments in related companies, estimated loss is recorded taking into account any conditions such as financial conditions of investees.

Contributions in aid of construction accepted by local governments (or the Ministry of Land, Infrastructure, Transport and Tourism) for the acquisition of noncurrent assets are recorded by reducing an amount equivalent to those contributions in aid of construction directly from the cost of acquisition of noncurrent assets at the completion of construction work.

In the profit and loss statement, the amount of proceeds from contributions in aid of construction are recorded in extraordinary profits, and the amount directly reduced from the cost of acquisition of noncurrent assets is recorded in extraordinary losses as loss on reduction of noncurrent assets.

Revenue is recognized in the amount expected to be received in exchange for promised goods or services when control over the goods or services is transferred to the customer.

With respect to a commuter pass sold by Shin-Keisei in its railway business, revenue is recognized over the period of validity of the pass depending on its type.

Sales and the cost of sales are recorded at the time of receipt of lease payments.

As the method of hedge accounting, special treatment is adopted for interest rate swaps.

[Notes on Changes in Accounting Policy]

1. Application of accounting standards for revenue recognition

From the beginning of the current fiscal year, accounting standards including the “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan No. 29 of March 31, 2020; hereinafter referred to as the “Revenue Recognition Accounting Standard”) have applied, and it is thus decided that revenue is recognized in the amount expected to be received in exchange for promised goods or services when control over the goods or services is transferred to the customer. According to this, with respect to a commuter pass sold by Shin-Keisei in its railway business, the method of revenue recognition has been changed to the effect that revenue is recognized over the period of validity of the pass, while it was recognized over a certain period of time depending on the type of the pass based on the month it was sold in the past.

With respect to the application of accounting standards including the Revenue Recognition Accounting Standard, in accordance with the transitional treatment prescribed in the proviso to paragraph 84 of the Revenue Recognition Accounting Standard, the cumulative effect amount to be recognized in the case of retroactive application of the new accounting policy prior to the beginning of the current fiscal year is added to or deducted from retained earnings at the beginning of the current fiscal year for the application of the new policy from the beginning thereof.

As a result, sales in the current fiscal year increased by 86,089,000 yen, and operating income, ordinary income and income before income tax increased by 86,089,000 yen, respectively, while the balance of retained earnings at the beginning of the current year decreased by 59,866,000 yen.

2. Application of accounting standards for fair value measurement

From the beginning of the current fiscal year, accounting standards including the “Accounting Standard for Fair Value Measurement (Accounting Standards Board of Japan No. 30 of July 4, 2019; hereinafter referred to as the “Fair Value Measurement Accounting Standard”) have applied, and in accordance with the transitional treatment prescribed in paragraph 19 of the Fair Value Measurement Accounting Standard and paragraph 44-2 of the “Accounting Standard for Financial Instruments” (Accounting Standards Board of Japan No. 10 of July 4, 2019), it is thus decided that the new accounting policy prescribed in accounting standards including the Fair Value Measurement Accounting Standard applies prospectively.

There is no impact of this application on financial statements.

[Notes on Changes in Method of Presentation]

Profit and loss statement

It is decided that “life insurance bonus,” which has been presented in “others” in non-operating income for the previous fiscal year and prior thereto, is listed separately from the current fiscal year since the life insurance bonus becomes more important in terms of the amount.

[Notes on Accounting Estimates]

1. Impairment loss on noncurrent assets

Impairment loss:　　　-,000 yen

Shin-Keisei groups its assets as the minimum unit of generating independent cash flows. Specifically, noncurrent assets - railway business are grouped by line as a whole, and noncurrent assets - real estate business are grouped by rental property. If an indication of impairment exists, the possibility of recognizing the impairment is determined based on future cash flow estimates.

For such future cash flow estimates, certain assumptions are made about factors including a percentage increase or decrease in the number of passengers carried due to trends of population along the railway line or impacts of the novel coronavirus decease in the railway business, and the tenant retention rate in the real estate business.

These assumptions may be affected by factors such as changes in uncertain economic conditions in the future, and if it becomes necessary to review future cash flows, such review may have a material impact on financial statements for the following fiscal year and thereafter.

2. Recoverability of deferred tax assets

Deferred tax liabilities: 955,111,000 yen

With respect to deferred tax assets, deductible temporary differences are recognized to the extent that available taxable income is highly likely to accrue. For the determination of the possibility that taxable income accrues, the time and amount in which taxable income may be earned in the future are reasonably estimated to measure the amount. These estimates will be affected by uncertain economic conditions and corporate business conditions in the future, and if the actual time and amount are different from the estimates, such difference may have a material impact on the amount recognized in financial statements for the following fiscal year and thereafter. If the effective tax rate is changed due to a tax reform, such change may have a material impact on the amount recognized in financial statements for the following fiscal year and thereafter.

3. Valuation of shares of stock in related companies

Shares in related companies: 6,678,653,000 yen

* The provision for loss on investments related to shares in related companies 100,000,000 yen is directly deducted.

If the net asset value of shares in related companies significantly falls below the book value, the impaired assets are written down excluding those recoverable based on the business plan. In addition, a provision for loss on investments is recorded.

In the event of changes in conditions or assumptions such as market circumstances to which a business plan is subject, those changes may affect the valuation of recoverability of the net asset value of shares of stock and as a result, a valuation loss or bad debt may be incurred, which has a material impact on the amount of shares of stock in related companies in financial statements for the following fiscal year.

4. Impacts of spread of the novel coronavirus disease

It is as provided in the “Notes to Consolidated Financial Statements (Notes on Accounting Estimates, 3. Impacts of spread of the novel coronavirus disease)” to the consolidated financial statements.

[Notes to Balance Sheet]