(Translation)
Note: This document has been translated from a part of the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, the original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damage arising from the translation.
Securities Code 5233
June 4, 2024
(Start Date of Measures for Electronic Provision: May 30, 2024)
To Those Stockholders with Voting Rights
Yoshifumi Taura
President and Representative Director
Taiheiyo Cement Corporation
1-1-1, Koishikawa, Bunkyo-ku, TokyoNOTICE OF THE 26th ORDINARY GENERAL MEETING OF STOCKHOLDERS
You are cordially notified of the 26th Ordinary General Meeting of Stockholders of Taiheiyo Cement
Corporation (the “Company”). The meeting will be held as stated below.
In convening this General Meeting of Stockholders, the Company has taken measures for electronic
provision and matters subject to measures for electronic provision are posted on the following website.
The Company’s website: https://www.taiheiyo-cement.co.jp/english/ir/kabunushi.html
In addition to the above, the information is also posted on the following website.
・The Tokyo Stock Exchange’s website:
https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
Please access the above website and enter the Company’s name or securities code to search, and then select“Basic information” followed by “Documents for public inspection/PR information” to view the information.
・The Portal of Shareholders’ Meeting: https://www.soukai-portal.net
Please scan the QR code on the enclosed Voting Rights Exercise Form or access the website above and enter
the ID and password indicated on the form.
If you are unable to attend the meeting, you may exercise your voting rights in writing or via theInternet, so please review the attached Reference Documents for the General Meeting of Stockholders
and exercise your voting rights after reading the Voting Guide on page 3.
1. Date and Time:Thursday, June 27, 2024 at 10:00 a.m.

2. Place:

Head office of the Company
1-1-1, Koishikawa, Bunkyo-ku, Tokyo

3. Agenda of the Meeting:
Matters to be reported: 1. Business Report, Consolidated Financial Statements for the 26th Fiscal Term(from April 1, 2023 to March 31, 2024) and results of audits by the Accounting
Auditor and the Board of Auditors of the Consolidated Financial Statements
2. Non-Consolidated Financial Statements for the 26th Fiscal Term (from April 1,
2023 to March 31, 2024)
Proposals to be resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Nine Directors
Proposal No. 3: Election of One Substitute Corporate Auditor1

(Translation)
Notes:
 Regarding the matters subject to measures for electronic provision, the following matters are not included
in a paper copy delivered to stockholders who have requested the delivery of the paper copy, pursuant to
the provisions of laws and regulations and the Articles of Incorporation of the Company. The documents
subject to audit including the following matters have been audited by Corporate Auditors and the
Accounting Auditor.
- “Accounting Auditor” and “System to Ensure that Directors Comply with Laws and Ordinances and the
Articles of Incorporation in Executing Their Duties and Other Systems to Ensure Proper Execution of
Operations” of the Business Report- “Consolidated Statements of Changes in Net Assets” and “Notes to Consolidated Financial Statements”
of the Consolidated Financial Statements- “Non-consolidated Statements of Changes in Net Assets” and “Notes to Non-consolidated Financial
Statements” of the Non-consolidated Financial Statements If there are any revisions to the matters subject to measures for electronic provision, the details of therevisions will be posted on each website posting these matters.
 We are planning to distribute video streaming of a part of the meeting on the Company’s website at a later
date.
Please understand in advance that we will be shooting a video for the video streaming in the meeting venue
on the day of the meeting.

2

(Translation)
Voting Guide
If you are exercising your voting right prior to the Meeting:
Please review the attached Reference Documents for the General Meeting of Stockholders, and exercise yourvoting right by either of the following two methods.
(i) Exercise of voting rights by postal mail (paper ballot)- Please indicate your vote for or against the Proposals on the Voting Rights Exercise Form and send it
back, making sure that it will arrive by 5:00 p.m. on Wednesday, June 26, 2024 (Japan Standard Time).
- If you make no indication on the Voting Rights Exercise Form whether you are voting for or against the
Proposals, you shall be deemed to have voted FOR the Proposals.
(ii) Exercise of voting rights via the Internet, etc.
- Please exercise your voting right via the voting rights exercise site (https://www.web54.net) specified by
the Company before 5:00 p.m. on Wednesday, June 26, 2024 (Japan Standard Time).
- If you exercise your voting right via the Internet, etc. more than once, your final vote shall prevail.
If you are attending the Meeting:
Please hand in the enclosed Voting Rights Exercise Form at the front desk when you arrive at the venue.
If another stockholder is attending the Meeting on your behalf, he/she must submit a letter of proxy andyour Voting Rights Exercise Form as well as his/her Voting Rights Exercise Form at the front desk upon
arrival at the venue. (Please be advised that a proxy is limited to one person and must be anotherstockholder with the Company’s voting rights pursuant to the provisions of the Articles of Incorporation.)
If you vote both by postal mail and via the Internet, etc., the one received later shall prevail. If we receive
both on the same day, your vote cast via the Internet, etc. shall prevail.

3

(Translation)

Reference Documents for the General Meeting of Stockholders
Proposals and References
Proposal No. 1: Appropriation of Surplus
With respect to the year-end dividend for the term under review, the Company would like to pay out asfollows, in consideration of the business environment and our performance for the term under review, while
maintaining our basic policy of stable dividend payouts.
Matters concerning the year-end dividend(1) Type of Dividend
Cash(2) Matters concerning the distribution of dividends to stockholders and its total amount35 yen per share of common stock of the Company, for a total amount of 4,054,944,215 yen.
The annual dividend per share for the term under review will amount to 70 yen, which includes aninterim dividend already paid.
(3) Effective Date of Dividends from surplus
June 28, 20244

(Translation)
Proposal No. 2:

Election of Nine Directors

The term of office of all Nine Directors will expire at the close of this General Meeting of Stockholders.
Accordingly, the election of nine Directors, including three Outside Directors, is proposed.
The candidates for Director are as follows.
No.
1
2
3
4
5
6

7

8

9

Name
Reappointment
Masafumi Fushihara
Reappointment
Yoshifumi Taura
Reappointment
Hideaki Asakura
New Candidate
Koshiro Hidaka
New Candidate
Shinji Fukami
New Candidate
Isao Matsui
Reappointment
Yoshiko Koizumi
Outside Director
Independent Director
Reappointment
Hideyuki Furikado
Outside Director
Independent Director
New Candidate
Shingo Tsutsumi
Outside Director
Independent Director

Current position at the Company
Chairman and Director
President and Representative Director
Vice President and Representative Director
Senior Executive Officer
Senior Executive Officer
Senior Executive Officer

Director

Director5

(Translation)
No.

Name
(Date of birth)

Career summary, position, assignment andsignificant concurrent positions
April 1978
April 2007
May 2009
October 2010
April 2012

1

Joined Onoda Cement Co., Ltd.
General Manager, Business Promotion
Department of Environmental BusinessCompany of Taiheiyo Cement Corporation
General Manager, Sales Department ofEnvironmental Business Company
General Manager, Environmental Business
Development Department
Executive Officer and General Manager,
Environmental Business Development
Department
Managing Executive Officer
Director and Managing Executive Officer
Director, Managing Executive Officer andSenior General Manager, Cement Business
Division
Director, Senior Executive Officer and Senior
General Manager, Cement Business Division
President and Representative Director
Chairman and Director (to present)

Masafumi Fushihara April 2015
June 2015
Reappointment
April 2016
(May 18, 1954)
Attended 15 out of 15
meetings of the Board April 2017of Directors (100%)and will have served as April 2018
Director for 9 years at April 2024
close of this General
Meeting of
Reason for nominating Masafumi Fushihara as Director
Stockholders
Since 2015, Mr. Masafumi Fushihara has engaged inmanagement of the Company as Director, and currently serves as
Chairman and Director, after serving as President andRepresentative Director. He therefore has a wealth of experience,achievements, and knowledge as a manager. The Company has
judged that he is an appropriate person to aim to continuously
increase corporate value of the Group as he works on enhancing
the functions of the Board of Directors as Chairman of the Board,
determines important management matters, and supervises
business execution, etc., and requests that he continue to be a
candidate for Director.

Number ofshares of theCompany held

19,591

Notes:
1. If the election of Mr. Masafumi Fushihara is approved, the Company plans to enter into an agreementwith him, which would limit his liability for damages in respect of his responsibilities set out under
Article 423, Paragraph 1 of the Companies Act, to the minimum limit of liability set out under Article
425, Paragraph 1 of the same provided that he executes his duties in good faith and without grossnegligence.
2. No special relationship exists between the Company and Mr. Masafumi Fushihara.

6

(Translation)
No.

Name
(Date of birth)

Career summary, position, assignment andsignificant concurrent positions
April 1983
April 2013
April 2017
April 2019
June 2019
August 20192

Yoshifumi Taura
Reappointment
June 2020(March 4, 1960)
Attended 11 out of 11
meetings of the Boardof Directors (100%) April 2022
and will have served as
Director for 1 year at April 2023
close of this General
Meeting ofJune 2023
Stockholders
April 2024

Joined Onoda Cement Co., Ltd.
General Manager, Marketing & Trading
Department, International Business Division of
Taiheiyo Cement Corporation
Executive Officer and General Manager,
Marketing & Trading Department,International Business Division
Managing Executive Officer and Senior
General Manager, International Business
Division
Director, Managing Executive Officer andSenior General Manager, International
Business Division
Director, Managing Executive Officer andSenior General Manager, International
Business Division
Chairman of Taiheiyo Cement (China)
Investment Co., Ltd.
Managing Executive Officer, Senior General
Manager, International Business Division
Chairman of Taiheiyo Cement (China)
Investment Co., Ltd.
Managing Executive Officer, Senior General
Manager, International Business Division
Senior Executive Officer, Senior General
Manager, International Business Division
Director, Senior Executive Officer, Senior
General Manager, International Business
Division
President and Representative Director (topresent)

Number ofshares of theCompany held

14,886

Reason for nominating Yoshifumi Taura as Director
Since 2023, Mr. Yoshifumi Taura has engaged in management of
the Company as Director, and currently serves as President andRepresentative Director, after serving as Senior General Manager
of International Business Division. He therefore has a wealth ofexperience, achievements, and knowledge as a manager. The
Company has judged that he is an appropriate person to aim tocontinuously increase corporate value of the Group as he leads
the Group’s management, determines important management
matters, and supervises business execution, etc., and requests thathe continue to be a candidate for Director.
Notes:
1. Mr. Yoshifumi Taura was newly appointed at the 25th Ordinary General Meeting of Stockholders held on
June 29, 2023, and took office as Director on the same day. Accordingly, his attendance at meetings ofthe Board of Directors refers to those convened since he took office.
2. No special relationship exists between the Company and Mr. Yoshifumi Taura.

7

(Translation)
No.

Name
(Date of birth)

Career summary, position, assignment andsignificant concurrent positions
April 1982
April 2011
April 2016

April 2018

3

Joined Nihon Cement Co., Ltd.
General Director of Nghi Son Cement
Corporation
Executive Officer of Taiheiyo Cement
Corporation
General Director of Nghi Son Cement
Corporation
Executive Officer and General Manager, Sales
Department, Cement Business Division of
Taiheiyo Cement Corporation
Managing Executive Officer
Director and Managing Executive Officer
Managing Executive Officer
Senior Executive Officer
Director and Senior Executive Officer
Vice President and Representative Director
Assistant to the President
Overseeing Corporate Planning Department,
Sustainability Promotion Department andLegal Department (to present)

April 2019
Hideaki Asakura
June 2019
Reappointment
June 2020(November 20, 1959)
April 2022
Attended 15 out of 15 June 2022
meetings of the Board April 2024
of Directors (100%)and will have served as
Director for 2 years at
close of this General
Meeting ofStockholders
Reason for nominating Hideaki Asakura as Director
Since 2022, Mr. Hideaki Asakura has engaged in management of
the Company as Director, and currently serves as Vice President
and Representative Director. He therefore has a wealth ofexperience, achievements, and knowledge as a manager. The
Company has judged that he is an appropriate person to aim tocontinuously increase corporate value of the Group as he leads
the Group’s management, determines important management
matters, and supervises business execution, etc., and requests thathe continue to be a candidate for Director.

Note: No special relationship exists between the Company and Mr. Hideaki Asakura.

8

Number ofshares of theCompany held

12,385

(Translation)
No.

Name
(Date of birth)

Career summary, position, assignment andsignificant concurrent positions
April 1984
April 2015
April 2017

October 20174

Koshiro Hidaka
New Candidate(October 7, 1959)

April 2019
April 2021
April 2024

Joined Onoda Cement Co., Ltd.
General Manager, Ofunato Plant of Taiheiyo
Cement Corporation
General Manager, Maintenance & Engineering
Department and General Manager,
Engineering & Technology Department,International Business Division
General Manager, Maintenance & Engineering
Department
Executive Officer and General Manager,
Maintenance & Engineering Department
Managing Executive Officer
Senior Executive Officer (to present)

Reason for nominating Koshiro Hidaka as Director
Mr. Koshiro Hidaka has been engaged in the operation of
production and maintenance & engineering divisions for many
years. Since 2019, he has served as Executive Officer and has awealth of experience and insight on overall management. The
Company has judged that he is an appropriate person to aim tocontinuously increase corporate value of the Group and requests
that he be a new candidate for Director.
Note: No special relationship exists between the Company and Mr. Koshiro Hidaka.

9

Number ofshares of theCompany held

7,145

(Translation)
No.

Name
(Date of birth)

Career summary, position, assignment andsignificant concurrent positions
April 1986
April 2015
April 2018
April 20195

Shinji Fukami
New Candidate(July 28, 1960)

April 2022
April 2024

Joined Onoda Cement Co., Ltd.
General Manager, Business Planning
Department, International Business Division of
Taiheiyo Cement Corporation
General Manager, Environmental Business
Development Department
Executive Officer and General Manager,
Environmental Business Development
Department
Managing Executive Officer
Senior Executive Officer and Senior General
Manager, International Business Division (topresent)

Number ofshares of theCompany held

7,556

Reason for nominating Shinji Fukami as Director
Mr. Shinji Fukami has been engaged in the operation ofinternational business and environmental business for many
years. Since 2019, he has served as Executive Officer and has awealth of experience and insight on overall management. The
Company has judged that he is an appropriate person to aim tocontinuously increase corporate value of the Group and requests
that he be a new candidate for Director.
Note: The Company lends funds to Jiangnan-Onoda Cement Co., Ltd., of which Mr. Shinji Fukami is therepresentative.

10

(Translation)
No.

Name
(Date of birth)

Career summary, position, assignment andsignificant concurrent positions
April 1985
April 20156

Isao Matsui
New Candidate(May 24, 1961)

Joined Nihon Cement Co., Ltd.
General Manager, Construction Materials
Business Department of Taiheiyo Cement
Corporation
November 2018 General Manager, Construction Materials
Business Department and General Manager,
Business Planning & Administration
Department
April 2019
General Manager, Construction Materials
Business Department
April 2020
Executive Officer and General Manager,
Construction Materials Business Department
April 2021
Executive Officer of Taiheiyo Cement
Corporation
General Director of Nghi Son Cement
Corporation
April 2022
Managing Executive Officer and Deputy
Senior General Manager of International
Business Division of Taiheiyo Cement
Corporation
General Director of Nghi Son Cement
Corporation
April 2023
Managing Executive Officer
April 2024
Senior Executive Officer (to present)

Number ofshares of theCompany held

Reason for nominating Isao Matsui as Director
Mr. Isao Matsui has been engaged in the operation of construction
materials business and international business for many years.
Since 2020, he has served as Executive Officer and has a wealthof experience and insight on overall management. The Company
has judged that he is an appropriate person to aim to continuously
increase corporate value of the Group and requests that he be a
new candidate for Director.
Note: No special relationship exists between the Company and Mr. Isao Matsui.

11

5,854

(Translation)
No.

Name
(Date of birth)

Career summary, position, assignment andsignificant concurrent positions

Number ofshares of theCompany held

April 1972

Registered as a lawyer (Daini Tokyo Bar
Association)
January 1980
Partner, Masuda and Ejiri Law Office(predecessor of Nishimura & Asahi (Gaikokuho
Kyodo Jigyo))January 2008
Counsel, Nishimura & Asahi (Gaikokuho Kyodo
Jigyo)
April 2009
Partner, City-Yuwa Partners (to present)
June 2015
Outside Director of Taiheiyo Cement Corporation(to present)
Outside Director of Dowa Holdings Co., Ltd.
(to present)
June 2016
Outside Corporate Auditor of Sumitomo BakeliteCo., Ltd.
September 2017 Outside Corporate Auditor of Nippon Koei Co.,Ltd.
July 2023
Outside Director of Integrated Design &Engineering Holdings Co., Ltd. (to present)

7

Yoshiko Koizumi
Candidate for
Outside Director
Reappointment(September 25, 1943) (Significant concurrent positions)
Attended 15 out of 15 Outside Director of Dowa Holdings Co., Ltd.
meetings of the Board Outside Director of Integrated Design & Engineering Holdingsof Directors (100%) Co., Ltd.
and will have served Lawyer, Partner of City-Yuwa Partners
as Director for 9
years at close of this Reason for nominating Yoshiko Koizumi as Outside Director
General Meeting of and outline of expected roles
Although Ms. Yoshiko Koizumi has not engaged in corporate
Stockholders
management in the past other than serving as an outside officer oflisted companies, as a lawyer, she has a wealth of experience,achievements, and knowledge regarding corporate law. The
Company expects that she will provide precise recommendations
and advice from this perspective in the Board of Directors of theCompany, and promote the enhancement of the fairness,transparency and objectivity of the procedures for determining thenomination and compensation of Directors as Chairperson of theNomination and Compensation Advisory Committee. The
Company has judged that she makes significant contribution to themonitoring and supervision of overall management from an
objective standpoint independent from the management team that
executes business, and requests that she continue to be a candidate
for Director.

1,500

Notes:
1. Ms. Yoshiko Koizumi is nominated as an Outside Director.
2. The Company currently has an agreement with Ms. Yoshiko Koizumi, which limits her liability fordamages in respect of her responsibilities set out under Article 423, Paragraph 1 of the Companies Act,to the minimum limit of liability set out under Article 425, Paragraph 1 of the same provided that she
executes her duties in good faith and without gross negligence. If the election of Ms. Yoshiko Koizumi isapproved, the Company plans to continue said agreement with her.
3. Ms. Yoshiko Koizumi satisfies the Independence Criteria for Outside Officers defined by the Company,
and the Company has registered Ms. Yoshiko Koizumi as an independent director at Tokyo Stock
Exchange, Inc. and Securities Membership Corporation Fukuoka Stock Exchange. Additionally, theIndependence Criteria for Outside Officers defined by the Company is provided on page 18.
4. The Company receives legal advice as required from lawyers of City-Yuwa Partners other than Ms.
12(Translation)
Yoshiko Koizumi, where she serves as a partner, but the Company has not concluded an advisory
agreement with the law firm. The advisory fees paid to the law firm are less than 1% of annual sales foreach of the Company and the law firm, and there is no special interest relationship. Additionally, there
are no special interest relationships between the Company and any of the significant concurrent positions.
5. No special relationship exists between the Company and Ms. Yoshiko Koizumi.

13

(Translation)

No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1977
July 2004

8

Joined Ministry of Finance
Deputy Director-General of Financial Services
AgencyJuly 2010
Director of Policy Research Institute, Ministry of
Finance
December 2013 Retired from Ministry of Finance
June 2014
Senior Managing Director of Trust Companies
Hideyuki Furikado
Association of Japan
Outside Director of Taiheiyo Cement Corporation
Candidate for Outside June 2021
(topresent)
Director
Reappointment
Reason for nominating Hideyuki Furikado as Outside Director(August 3, 1954)
and outline of expected roles
Attended 15 out of 15 Although Mr. Hideyuki Furikado has not engaged in corporate
meetings of the Board management in the past, as a government official, he has a wealthof Directors (100%) of experience and extensive knowledge regarding public
and will have served as administration. The Company expects that he will provide precise
Director for 3 years at recommendations and advice from this perspective in the Board ofclose of this General Directors of the Company, and strive for the enhancement of the
Meeting of
fairness, transparency and objectivity of the procedures for
Stockholders
determining the nomination and compensation of Directors as
member of the Nomination and Compensation Advisory
Committee. The Company has judged that he will make significant
contribution to the monitoring and supervision of overallmanagement from an objective standpoint independent from the
management team that executes business, and requests that hecontinue to be a candidate for Director.

Number ofshares of theCompany
held

1,300

Notes:
1. Mr. Hideyuki Furikado is nominated as an Outside Director.
2. The Company currently has an agreement with Mr. Hideyuki Furikado, which limits his liability fordamages in respect of his responsibilities set out under Article 423, Paragraph 1 of the Companies Act, tothe minimum limit of liability set out under Article 425, Paragraph 1 of the same provided that he executes
his duties in good faith and without gross negligence. If the election of Mr. Hideyuki Furikado is approved,
the Company plans to continue said agreement with him.
3. Mr. Hideyuki Furikado satisfies the Independence Criteria for Outside Officers defined by the Company,
and the Company has registered Mr. Hideyuki Furikado as an independent director at Tokyo Stock
Exchange, Inc. and Securities Membership Corporation Fukuoka Stock Exchange. Additionally, theIndependence Criteria for Outside Officers defined by the Company is provided on page 18.
4. No special relationship exists between the Company and Mr. Hideyuki Furikado.

14

(Translation)

No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1981
June 2017
June 2019
June 2020

9

Shingo Tsutsumi
Candidate for Outside
Director
New Candidate(September 11, 1958)

Number ofshares of theCompany
held

Joined Toyo Soda Manufacturing Co., Ltd.
(currently Tosoh Corporation)
Director and Senior Vice President of Tosoh
Corporation
Director and Executive Vice President of Tosoh
Corporation
President and Director of Taiyo Vinyl Corporation(to present)

Reason for nominating Shingo Tsutsumi as Outside Director
and outline of expected roles
Mr. Shingo Tsutsumi has a wealth of experience, achievements, andinsight as a corporate manager. The Company expects that he will
provide precise recommendations and advice from this perspectivein the Board of Directors of the Company, and strive for theenhancement of the fairness, transparency and objectivity of theprocedures for determining the nomination and compensation of
Directors as he is scheduled to take office as member of theNomination and Compensation Advisory Committee. The
Company has judged that he will make significant contribution to
the monitoring and supervision of overall management from an
objective standpoint independent from the management team that
executes business, and requests that he be a new candidate for
Director.

0

Notes:
1. Mr. Shingo Tsutsumi is nominated as an Outside Director.
2. If the election of Mr. Shingo Tsutsumi is approved, the Company plans to enter into an agreement withhim, which limits his liability for damages in respect of his responsibilities set out under Article 423,
Paragraph 1 of the Companies Act, to the minimum limit of liability set out under Article 425, Paragraph
1 of the same provided that he executes his duties in good faith and without gross negligence.
3. Mr. Shingo Tsutsumi satisfies the Independence Criteria for Outside Officers defined by the Company,
and if the election of Mr. Shingo Tsutsumi is approved, the Company plans to register him as anindependent director at Tokyo Stock Exchange, Inc. and Securities Membership Corporation Fukuoka
Stock Exchange. Additionally, the Independence Criteria for Outside Officers defined by the Company isprovided on page 18.
4. No special relationship exists between the Company and Mr. Shingo Tsutsumi.
Directors and officers liability insurance contract
The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3, Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damages that may arise when theinsured assumes liability for the execution of his or her duties as corporate officer. If the election ofcandidates is approved, each of them will be insured under the insurance contract. In addition, theCompany plans to renew said insurance contract in July 2024.

15

(Translation)(Reference) Expertise and experience held by candidates for Director

Name
Masafumi
Fushihara
Yoshifumi
Taura
HideakiAsakuraKoshiroHidakaShinji
FukamiIsao
Matsui

GenderMale

Expertise and experience
Nomination andCompensation
Legal
Production
Attributes
Marketing Finance
GlobalCorporate
Advisory
Risk
Technologies
Sales Accounting
Business
Management
Committee
Management
Research
●

●

●

Male

●

Male

●

Male

●

●

Male

●

●

Male

●

YoshikoKoizumiFemaleHideyuki
Furikado

Male

ShingoTsutsumi

Male

OutsideDirector●
Independent (Chairperson)
Director
OutsideDirector●
Independent
Director
OutsideDirector●
Independent
Director

●

●

●
●

●
●

●

●

●

●
●

●

●

16

●

●

●

●

●

●

●
●

●

●

●

●

(Translation)
Proposal No. 3:

Election of One Substitute Corporate Auditor

In order to prepare for a case where a vacancy results in a shortfall in the number of Corporate Auditorsprescribed by laws, the Company proposes the election of one Substitute Corporate Auditor, to substitute for an
Outside Corporate Auditor.
The candidate for Substitute Corporate Auditor is as follows.
The Board of Auditors has previously given its approval to this proposal.
Name(Date of birth)

Career summary, position andsignificant concurrent positions

Number ofshares of theCompany held

April 1987
February 2008
July 2020

Joined the National Tax Agency
U.S. Certified Public Accountant (Delaware)
Regional Commissioner of Sapporo Regional
Taxation Bureau
July 2021
Retired from the National Tax Agency
September 2021 Registered as a Certified Public Tax Accountant
Special Advisor of Hongo Tsuji Tax & Consulting (topresent)
December 2021 Director of Tsuji Hongo IT Consulting Co., Ltd. (topresent)
April 2024
Professor at Faculty of Law, Asia University (topresent)

Shigeru Ino
Candidate for Outside(Significant concurrent positions)
Corporate Auditor
Certified Public Tax Accountant(January 4, 1962)
Professor at Faculty of Law, Asia University0

Reason for nominating Shigeru Ino as substitute Outside
Corporate Auditor
Mr. Shigeru Ino has served in important positions in the National Tax
Agency and has a wealth of experience and extensive knowledge mainly
as a government official and Certified Public Tax Accountant. The
Company has judged that he can audit the business execution of
Directors from an objective, independent, and fair standpoint, andrequests that he be a new candidate for substitute Outside Corporate
Auditor.
Notes:
1. Mr. Shigeru Ino is nominated as a substitute Outside Corporate Auditor.
2. In the event that Mr. Shigeru Ino takes office as an Outside Corporate Auditor, the Company plans toenter into an agreement with him, which would limit his liability for damages in respect of his
responsibilities set out under Article 423, Paragraph 1 of the Companies Act, to the minimum limit ofliability set out under Article 425, Paragraph 1 of the same provided that he executes his duties in goodfaith and without gross negligence.
3. The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3, Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damage to be borne by the insured
that may arise as a result of claims for damages caused by the execution of his or her duties as corporate
officer. If Mr. Shigeru Ino assumes the office of Outside Corporate Auditor, he will be insured under the
insurance contract. In addition, the Company plans to renew said insurance contract in July 2024.
4. Mr. Shigeru Ino satisfies the Independence Criteria for Outside Officers defined by the Company, and in
the event that he takes office as an Outside Corporate Auditor, the Company plans to register him as anindependent corporate auditor at Tokyo Stock Exchange, Inc. and Securities Membership Corporation
Fukuoka Stock Exchange. Additionally, the Independence Criteria for Outside Officers defined by theCompany is provided on page 18.
5. No special relationship exists between the Company and Mr. Shigeru Ino.
17

(Translation)(Reference)
Independence Criteria for Outside Officers
Outside officers are considered to be sufficiently independent from the Company if they do not fall under
any of the following items:
1. A person who is or was an executive (Note 1) of the Company or any of its subsidiaries;
2. A person who is or has recently been a person falling under any of the (1) through (7) below:(1) A major stockholder (Note 2) of the Company or an executive of a major stockholder of theCompany;(2) A party whose major business partner is the Company (Note 3) or an executive thereof;(3) A major business partner of the Company (Note 4) or an executive thereof;(4) A person belonging to an audit corporation that is the accounting auditor of the Company;(5) A party who receives a significant amount of donation or aid (Note 5) from the Company or an
executive thereof;(6) An individual who receives a significant amount of money (Note 6) or other property from theCompany as a lawyer, certified public accountant, tax accountant, consultant, etc., in addition to
the compensation that he/she receives from the Company as an outside officer; or(7) An executive of a legal entity, etc. that is a law firm, auditing firm, tax accounting firm, consulting
firm, etc., whose major business partner is the Company (Note 7).
3. A person who is a close relative (Note 8) of any of the persons listed in 1. and 2. above.
Notes:
1. An executive is an executive director, corporate officer, executive officer, or an employee who holds
a senior management position.
2. A major stockholder is a stockholder who holds 10% or more of the voting rights of the Company.
3. A party whose major business partner is the Company is a party who has carried out transactions with
the Company for an amount exceeding 2% of the annual consolidated total net sales for the latest
fiscal year of that party.
4. A major business partner of the Company is a party who has carried out transactions with the Company
for an amount exceeding 2% of the annual consolidated total net sales for the latest fiscal year of theCompany or a financial institution that has an outstanding balance of loans to the Company thatexceeds 2% of the consolidated total assets of the Company as of the end of the latest fiscal year of
the Company.
5. If the recipient is an individual, a significant amount of donation or aid means a donation or aid
exceeding an average of 10 million yen per year over the last three fiscal years. If the recipient is alegal entity, a significant amount of donation or aid means a donation or aid of an average of 10 million
yen per year over the last three fiscal years or 30% of the total annual expenses of said legal entity,
whichever the greater.
6. A significant amount of money means an amount of money exceeding an average of 10 million yen
per year over the last three fiscal years.
7. A legal entity, etc. whose major business partner is the Company is a legal entity, etc. that has carriedout transactions with the Company for an average amount per year over the last three years exceeding
2% of the annual consolidated total net sales of said legal entity, etc.
8. A close relative means a spouse or a relative within the second degree of kinship.

18

(Translation)(Appendix)

Business Report(April 1, 2023 - March 31, 2024)

1. Overview of the Company Group
1)

Business Progress and Results
During FY2023, the Japanese economy recovered gradually amid social and economic activities
returning to normal following the reclassification of novel coronavirus disease into a Class V Infectious
Disease, as well as improvements in the employment and income environment and corporate capital
investment. However, the economic outlook remains uncertain due to factors such as growing tension in
the Middle East, the protracted situation between Russia and Ukraine, and rising prices stemming fromyen depreciation.
Regarding the world economy, while the U.S. economy has grown, supported by personal
consumption and capital investments, the Chinese economy slowed due to weak consumer spending andthe stagnant real estate market.
Under these circumstances, in FY2023, the Group’s consolidated sales increased ¥76,733 million
from the previous year to ¥886,275 million. Consolidated operating profit was ¥56,470 million, up¥52,013 million, while consolidated ordinary profit was ¥59,472 million, up ¥58,457 million. Profit
attributable to owners of parent increased ¥76,479 million to ¥43,272 million and recovered from loss.
Reviews of operation by each business segment are as follows. The presented amounts are figures
before eliminating transactions between business segments.
Cement Business
Sales ¥629,870 million （up 13.9% year-on-year)
Operating Profit ¥32,783 million
While there was a certain level of demand for urban redevelopment projects and the construction of
new logistics facilities, domestic cement demand in the private sector was generally weak due to risingcosts and construction delays caused by the shortage of skilled workers at construction sites. Due tothis, as a whole, domestic cement demand decreased 7.3% from the previous year to 34.57 million tons,of which, imported cement decreased 5.1% from the previous year to 0.01 million tons. Total exports
decreased 15.8% from the previous year to 6.85 million tons.
Under these circumstances, the Group’s domestic cement sales by volume, including consignment
sales, decreased 1.4% from the previous year to 12.95 million tons, despite an increase in sales volume
from April 2023 owing to the acquisition of the cement sales business of Denka Company Limited.
Exports increased by 4.7% from the previous year to 2.55 million tons.
At U.S. West Coast cement businesses, sales volume increased from the previous year due to fullyear impact of the acquisition the Redding Plant and other assets. The cement business in Vietnam saw
an increase in sales volume from the previous year owing partly to an increase in exports, despite slow
recovery in private-sector demand after monetary easing. In the cement business in the Philippines,
sales volume increased from the previous year as production capacity recovered following equipment
repairs.
As a result of the above, sales increased ¥76,828 million from the previous year to ¥629,870 million,
and operating profit of ¥32,783 million was recorded, an improvement of ¥47,682 million from theprevious year.

19

(Translation)
Mineral Resources Business
Sales ¥87,674 million (up 6.0% year-on-year)
Operating Profit ¥8,455 million (up 52.2% year-on-year)
In the aggregates business, while sales volume decreased in the Tohoku region, sales remained robustin the Hokkaido and Kansai regions. In the mineral products business, sales volume of limestone foroverseas steel corporations decreased. In the geo-solutions business, sales volume of immobilizers
decreased from the previous year. In addition, the entire business saw efforts to pass various cost
increases onto selling prices bear fruit.
As a result, sales increased ¥4,968 million from the previous year to ¥87,674 million, and operating
profit increased ¥2,899 million to ¥8,455 million from the previous year.
Environmental Business
Sales ¥68,254 million (down 12.4% year-on-year)
Operating Profit ¥6,138 million (up 4.5% year-on-year)
Sales of calcium carbonate used for flue gas desulfurization and gypsum remained solid, but sales
remained sluggish in coal processing, fuel, and waste processing such as waste incineration ash
processing.
As a result, sales decreased ¥9,656 million from the previous year to ¥68,254 million, and operating
profit increased ¥266 million to ¥6,138 million from the previous year.
Construction Materials Business
Sales ¥73,456 million (up 7.6% year-on-year)
Operating Profit ¥4,208 million (up 78.9% year-on-year)
In addition to the strong performance for ground improvement projects and the shield tunnel
construction-related business, the Company worked to optimize selling prices for ALC (AutoclavedLightweight aerated Concrete) and construction and civil engineering materials.
As a result, sales increased ¥5,185 million from the previous year to ¥73,456 million, and operating
profit increased ¥1,856 million to ¥4,208 million from the previous year.
Other Business
Sales ¥89,397 million (up 2.8% year-on-year)
Operating Profit ¥4,691 million (down 8.2% year-on-year)
Although the data processing, transportation and warehousing, and engineering businesses
performed well, the chemical products business and the power supply business remained sluggish.
As a result, sales increased ¥2,471 million from the previous year to ¥89,397 million, and operating
profit decreased ¥417 million to ¥4,691 million from the previous year.
Sales and Operating Profit by Business Segment
Year-on-yearincrease (decrease)

Business Segment

Sales

CementMineral Resources
Environmental
Construction Materials
Other
Subtotal
Elimination or unallocated amounts
Total

629,870
87,674
68,25473,45689,397
948,653(62,378)
886,275

20

76,8284,968(9,656)
5,185
2,471
79,797(3,064)76,733(Unit: Millions of yen)
Operating
Year-on-year
profitincrease (decrease)(loss)
32,78347,682
8,455
2,899
6,138
266
4,208
1,856
4,691
(417)
56,27652,286193(273)
56,47052,013

(Translation)
2)

Capital Investments
The total amount of capital investments by the Group in the fiscal year under review decreased¥15,687 million from the previous year to ¥89,408 million, consisting of ¥67,855 million in the Cement
Business, ¥13,603 million in the Mineral Resources Business, ¥1,450 million in the Environmental
Business, ¥2,604 million in the Construction Materials Business, ¥3,736 million in the Other Businessand ¥158 million in Group wide assets.

3)

Financing
In September 2023, the Company issued the 31st unsecured straight corporate bonds of ¥12,700
million and 32nd unsecured straight corporate bonds of ¥7,300 million.

4)

Trends in Assets and Income
Item

23rd fiscal year
ended
March 31, 2021

Net sales
863,903(millions of yen)
Ordinary profit
65,744(millions of yen)
Profit attributable toowners of parent
46,800(millions of yen)
Profit per share
387.79(yen)
Total assets
1,044,227(millions of yen)
Net assets
506,821(millions of yen)
Note: Figures in parentheses represent losses.
5)

25th fiscal year
ended
March 31, 2023

26th fiscal year
ended
March 31, 2024
(Current)

708,201

809,542886,275

50,193

1,015

59,472

28,971(33,206)

43,272245.80(283.68)

371.091,103,007

1,268,862

1,338,251

544,799

528,857

596,384

24th fiscal year
ended
March 31, 2022

Issues to be Addressed
Looking ahead, the Japanese economy is expected to continue its moderate recovery, with corporate
capital investment picking up on the back of improvement in the employment and income environment.
However, the outlook remains uncertain due to factors such as the impact of global monetary tightening
and rising prices on consumer spending.
Under these circumstances, turning our attention to the Group’s business environment, in our core
domestic cement business, a certain amount of demand is expected to continue due to redevelopment
investment in urban areas, construction related to the Linear Chuo Shinkansen, countermeasureconstruction for national resilience, disaster prevention and mitigation measures and renewal of aging
social infrastructure, etc. On the other hand, there are concerns that slow construction progress andlengthening construction periods caused by the shortage of skilled workers at construction sites will weighon demand going forward. In addition, we will forge ahead with efforts to optimize selling prices to
respond to potential price increases for raw materials and fuels such as coal, and address various issues
related to becoming carbon neutral and the logistics industry.
In the U.S., the economy is expected to grow on the back of strong private consumption, full-scale
public investments fueled by an infrastructure investment bill, and investments related to the Los Angeles
Olympics and Paralympics scheduled to be held in 2028. However, attention should be paid to the impact
of monetary tightening as the country tackle prolonged inflation and the developments leading up to thepresidential election this fall.
Under these circumstances, we have established our Future vision targeting 2050 and Taiheiyo Vision
2030 to clarify the direction we will take in order to become an enterprise group that keeps moving
forward to development, while also contributing to the building of a sustainable society. Furthermore, wehave formulated the 26 Medium-Term Management Plan, which covers the period from FY2024 until
FY2026, as a medium-term plan to achieve these goals, which the Group will actively work toward.

21

(Translation)(1) Future vision targeting 2050
(i) Deploy around the world the Group’s overall capabilities and revolutionary technologies
including carbon neutrality.
(ii) Become a leader in the global cement industry.
(iii) Become a corporate group that supports a safe and secure decarbonized/recycling-based society.
(2) Taiheiyo Vision 2030
(i) Expand the Group’s presence in the Pacific Rim by utilizing its overall capabilities.
(ii) Contribute to the achievement of carbon neutrality and circular economies.
(iii) Become a robust corporate group that grow sustainably(3) Vision of the 26 Medium-Term Management Plan
“3D Approach for Sustainable Future —Three-dimensional approach toward the realization of asustainable society—”
The Group aims to promote a combination of three initiatives toward the realization of a sustainable
society to widely share the benefits gained through such initiatives with its stakeholders.
(i) Revitalize domestic business(ii) Further promote global strategy(iii) Promote sustainability management and contribute to carbon neutrality
Revitalizing Domestic BusinessIn a market environment in which domestic cement demand continues to decline, the Group will strive
to revitalize its domestic business by fundamentally revising our pricing policy to emphasize profitability,
providing total solutions through improvements such as greater efficiency of our sales systems, andoptimizing its production system on the premise of expanding exports of blended cement and ensuring astable supply to the domestic market.
Further Promote Global Strategy
The Group will promote a global strategy by strengthening the earnings base of its existing businesses
in the U.S. and the Philippines, growing its business areas by expanding into unexplored areas andundeveloped businesses, and expanding its trading business by developing blended cement operations
and strengthening its logistics network.
Promote Sustainability Management and Contribute to Carbon Neutrality
With the aim of achieving carbon neutrality in the entire supply chain by 2050, the Group will
implement a carbon neutral strategy, including initiatives for the carbon neutral model plant concept toestablish innovative cement manufacturing technologies and the promotion of blended cement byapplying existing technologies. The Group will also promote sustainability management by steadily
carrying out digital transformation (DX), human capital and IR strategies.
<Business Strategies>
Cement (Domestic)
The Group will revitalize its cement business in Japan by optimizing cement prices. In addition, theGroup will promote initiatives aimed at maintaining stable production by strengthening plant facilities,
ensuring a stable supply by responding to the shortage of drivers under the revision of regulation in 2024
and strengthening transportation system and achieving carbon neutrality such as exploring thecommercialization of Low-CO2 blended cement.
Cement (Overseas)
The Group will work to deepen its business in the U.S. market, which has a good balance between
stability and growth, and expand the Philippines business, where a renewal project will be completed.
Furthermore, the Group will implement business strategies that utilize cementitious materials such as
blended cement, slag, and fly ash in the countries in which it operates.
Mineral Resources
The Group will diligently work on medium- to long-term resource policies, such as strengthening theresilience of existing core businesses and building a long-term stable supply system for resources, thereby
establishing an earnings structure unaffected by fluctuations in cement demand.

22

(Translation)
Environmental BusinessIn addition to enhancing its competitive advantage in existing businesses, the Group will work toachieve sustainable growth while creating new added value by simultaneously promoting carbon
neutrality and a circular economy.
Construction Materials
The Group will endeavor to strengthen the profitability of existing businesses by optimizing selling prices
and investing in DX, among other measures. The Group will also introduce new products and enter into new
business areas, including overseas markets.
<Research & Development Strategies>
The Group aims to enhance its R&D capabilities to the highest level in the world to contribute to
management through the following core strategies: develop technologies to achieve carbon neutrality,
contribute to business expansion and earnings improvement, research and development for sustainablegrowth, and evolve into a group-wide research institute.
<Intellectual Asset Strategies>
The Group will work to build a patent network that supports the promotion of carbon neutrality
and expand the intellectual capital that supports each business.
The Group looks forward to your continued support and cooperation as our stockholder.

23

(Translation)
6)

Material Subsidiaries
Company name
DC Co., Ltd.
Clion Co., Ltd.
Myojyo Cement Co., Ltd.
Taiheiyo Materials
Corporation
CalPortland Company

The Company’s
percentage of equity
Principal businessparticipation
100
Manufacturing and sale of cement
Manufacturing and sale of autoclaved lightweight
99.3
aerated concrete (ALC)
100
Manufacturing and sale of cement
Manufacturing and sale of various construction
100
materials such as admixture and non-shrink grout
Manufacturing and sale of cement, ready-mixed
100
concrete, etc. in the United States

Jiangnan-Onoda Cement Co.,
88.5
Manufacturing and sale of cement in China
Ltd.
Dalian Onoda Cement Co.,
84.8
Manufacturing and sale of cement in China
Ltd.
Nghi Son Cement
65.0
Manufacturing and sale of cement in Vietnam
Corporation
Taiheiyo Cement Philippines,
Manufacturing and sale of cement in the
100
Inc.
Philippines(Notes) 1. The Company’s percentage of equity participation includes indirect ownership throughsubsidiaries.
2. Jiangnan-Onoda Cement Co., Ltd. ceased its business activities on February 28, 2023.
3. Dalian Onoda Cement Co., Ltd. ceased its business activities on December 30, 2022.
7)

Principal Businesses
Businesses of the Group’s are divided into Cement Business Segment, Mineral Resources Business
Segment, Environmental Business Segment, Construction Materials Business Segment and Other
Business Segment, and mainly consist of the following.
(i) Cement Business
Ordinary Portland cement and othervarious types of cement, white cement,
construction – material – purpose
cement, ecocement, cement-basedsolidifying agent, ready-mixed concrete,admixture, etc.

(iii) Environmental Business
Waste recycling business (recycling into cement
raw materials and fuels), flue gas desulfurizationmaterials, recycled products, chemicals, water-related
business, etc.
(iv) Construction Materials Business
Concrete products, construction materials, civilengineering and construction work, etc.

(ii) Mineral Resources Business
Aggregates, limestone, white marble, quicklime,
silica, heavy metal immobilizer, surplus
construction soil recycling business, etc.

(v) Other Business
Real estate business, engineering business, dataprocessing
business,financebusiness,transportation and warehousing business, chemical
products business, sports business, power supply
business, etc.

24

(Translation)
8)

Principal Business Locations(i) The Company’s principal business locations and plants
Head Office:1-1-1, Koishikawa, Bunkyo-ku, Tokyo, Japan
Central Research Laboratory: Sakura City, Chiba Prefecture, Japan
Branches and Plants
Branches
Name
Hokkaido Branch
Tohoku BranchTokyo Branch
Kanto Branch
Chubu Hokuriku
BranchKansai Shikoku
BranchChugoku Branch
Kyushu Branch

PlantsLocation
Sapporo City, Hokkaido
Prefecture
Sendai City, Miyagi
Prefecture
Minato-ku, Tokyo
Takasaki City, Gunma
Prefecture
Nagoya City, Aichi
Prefecture
Osaka City, Osaka
Prefecture
Hiroshima City, Hiroshima
Prefecture
Fukuoka City, Fukuoka
Prefecture

Name
Kamiiso Plant
Ofunato Plant
Kumagaya
Plant
Saitama Plant
Fujiwara Plant
Oita Plant

Location
Hokuto City, Hokkaido
Prefecture
Ofunato City, Iwate
Prefecture
Kumagaya City, Saitama
Prefecture
Hidaka City, Saitama
Prefecture
Inabe City, Mie
Prefecture
Tsukumi City, Oita
Prefecture(ii) Principal business locations of material subsidiaries
Name
Location
DC Co., Ltd.
Kawasaki City, Kanagawa Prefecture
Clion Co., Ltd.
Koto-ku, Tokyo
Myojyo Cement Co., Ltd.
Itoigawa City, Niigata Prefecture
Taiheiyo Materials Corporation
Kita-ku, Tokyo
CalPortland Company
California, USA
Jiangnan-Onoda Cement Co., Ltd.
Jiangsu, China
Dalian Onoda Cement Co., Ltd.
Liaoning, China
Nghi Son Cement Corporation
Thanh Hoa, Vietnam
Taiheiyo Cement Philippines, Inc.
Cebu, Philippines25

(Translation)
9)

Employees
Business Segment
Number of Employees (persons)Cement7,621
Mineral Resources
1,024
Environmental
157
Construction Materials
1,265
Other
2,182
Group-wide (common)
291
Total
12,540(Notes) 1. The number of employees refers to the number of persons on the payroll.
2. The above includes the following number of employees of the Company. The number of
employees stated below does not include employees on temporary retirement, seconded
employees, etc. (466 persons).
Number of
Increase or decrease from
Average age
Average
employees
previous year
length ofservice
1,821 persons
Decrease of 20 persons
39.7 years old
17.3 years

10)

Major Lenders and Amount of Borrowings

LenderMizuho Bank, Ltd.
Japan Bank for International Cooperation
Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.

Outstanding borrowings (millions of yen)
44,67032,704
28,812
20,27226

(Translation)

2. Shares of the Company
1) Total number of shares authorized to be issued

197,730,800 shares2) Total number of shares outstanding

121,985,078 shares
Note: Total number of shares outstanding includes
6,129,529 shares of treasury stock3) Number of stockholders

45,820 persons

4) Major stockholders
Stockholder name

Holding

Stockholding ratio(thousand shares)(%)

THE MASTER TRUST BANK OF JAPAN, LTD. (TRUSTACCOUNT)

20,438

17.6

CUSTODY BANK OF JAPAN, LTD. (TRUSTACCOUNT)

7,705

6.7

STATE STREET BANK AND TRUST COMPANY
505001

4,577

4.0

JP MORGAN CHASE BANK 385632

4,505

3.9

JP MORGAN CHASE BANK 380072

2,848

2.5

SSBTC CLIENT OMNIBUS ACCOUNT

1,918

1.7

MSIP CLIENT SECURITIES

1,800

1.6

STATE STREET BANK AND TRUST COMPANY
5052231,774

1.5

JP MORGAN CHASE BANK 385781

1,590

1.4

STATE STREET BANK AND TRUST COMPANY
505103

1,589

1.4(Notes)1. The Company holds 6,129,529 shares of treasury stock.
2. The stockholding ratio is calculated by excluding treasury stock.

5) Shares granted to Company Officers during the fiscal year under review as consideration for their
execution of business
Officerclassification
Directors (excluding Outside
Directors)

Number of shares

Number of persons granted to

16,029 shares

6 persons27

(Translation)

3. Company Officers
1)

Name, etc. of Directors and Corporate Auditors
Position

President and Representative
Director

Name

Significant concurrent positions

Masafumi Fushihara

Vice President and Representative
Director

Yuuichi Kitabayashi

Vice President and Director

Kunihiro Ando

Director

Tetsuya Ohashi

Director

Hideaki Asakura

Director

Yoshifumi Taura

Director

Yoshiko Koizumi

Director

Shinhachiro Emori

Director

Hideyuki Furikado

Corporate Auditor (Standing)

Katsuhide Fukuhara

Corporate Auditor (Standing)Masahiro Karino

Assistant to the President, Overseeing
Carbon Neutral Technology Development
Project Team and TCPI Renewal ProjectTeam
Assistant to the President, Overseeing
Mining Department and Mineral Resources
Business Department

Lawyer, Partner of City-Yuwa Partners
Outside Director of Dowa Holdings Co.,Ltd.
Outside Director of Integrated Design &Engineering Holdings Co., Ltd.

Corporate Auditor(Name on family
registration:
Wakako Akamatsu)

Lawyer, Partner of TANABE &PARTNERS
Outside Corporate Auditor of
SEIKAGAKU CORPORATION

Corporate Auditor

Toshihito Aoki

Certified Public Accountant

Wakako Mitani(Notes)

1.
2.
3.
4.
5.
6.
7.

8.

Directors Yoshiko Koizumi, Shinhachiro Emori and Hideyuki Furikado are Outside Directors.
Corporate Auditors Wakako Mitani and Toshihito Aoki are Outside Corporate Auditors.
Directors Yoshifumi Taura and Corporate Auditor Toshihito Aoki were newly elected at the 25th Ordinary
General Meeting of Stockholders held on June 29, 2023 and took office on the same day.
Directors Yukimasa Nakano and Corporate Auditor Yoshio Fujima retired from office at the close of the 25th
Ordinary General Meeting of Stockholders held on June 29, 2023.
Corporate Auditors Katsuhide Fukuhara and Masahiro Karino have practical experience in the business
management division of the Company and have considerable financial and accounting expertise.
Corporate Auditor Toshihito Aoki has the qualification of Certified Public Accountant and has considerable
financial and accounting expertise.
The Company receives legal advice as required from lawyers of City-Yuwa Partners other than Director
Yoshiko Koizumi, where she holds a significant concurrent position, but the Company has not concluded
an advisory agreement with the law firm. The advisory fees paid to the law firm is less than 1% of net sales
for each of the Company and the law firm, and there is no special interest relationship. Additionally, there
are no special interest relationships between the Company and any of the significant concurrent positionsof the other Outside Executives.
The Company has registered Directors Yoshiko Koizumi, Shinhachiro Emori and Hideyuki Furikado as
independent directors and Corporate Auditors Wakako Mitani and Toshihito Aoki as independent corporate
auditors at Tokyo Stock Exchange, Inc. and Securities Membership Corporation Fukuoka Stock Exchange.

28

(Translation)
9.

Resignation during the fiscal year under review regarding significant concurrent positions is as follows.
Significant concurrent
Position
Date of resignationName
positions
Outside Corporate
Director
Auditor of Nippon Koei
July 2, 2023
Yoshiko Koizumi
Co., Ltd.
There are no special interest relationships between the Company and Nippon Koei Co., Ltd.
10. The following executive changes were made on April 1, 2024:
Position, assignment and significant concurrent positions
Name
BeforeAfter
President
andRepresentative
Masafumi
Chairman and Director
Fushihara
Director
Yoshifumi Taura
Director
President and Representative Director
Vice President andRepresentative Director
Assistant to the President,
Yuuichi
Director
Overseeing Carbon Neutral
Kitabayashi
Technology Development
Project Team and TCPI Renewal
Project Team
Vice President and Director
Assistant to the President,
Kunihiro Ando
Overseeing Mining Department Director
and Mineral Resources Business
Department
Vice President and Representative Director
Assistant to the President, Overseeing Corporate
Hideaki Asakura
Director
Planning Department, Sustainability Promotion
Department and Legal Department
11. The Company has introduced an executive officer system; executive officers as of April 1, 2024 are as follows.
Position
Name
Assignment
Overseeing Production Department, Maintenance
Senior Executive Officer

Koshiro Hidaka

Senior Executive Officer

Shinji Fukami

Senior Executive Officer

Isao Matsui

Managing Executive
Officer

Naoyuki Kira

Managing Executive
Officer

Masahiro Ban

Managing Executive
Officer

Hiroyuki Takano

Managing Executive
Officer

Kenichi Hirata

Managing Executive
Officer

Yusuke Nemoto

Managing Executive
Officer

Tsuyoshi Hara

Executive Officer

Michitomo Beppu

29& Engineering Department, Carbon Neutral
Technology Development Department, and TCPI
Renewal Project Team
Senior General Manager of International Business
Division
Overseeing Environmental Business Development
Department, Construction Materials Business
Department, and Business Planning &Administration Department
Senior General Manager of Cement Business
Division
Overseeing Secretarial Department, Accounting &Finance Department, General Affairs Department,
and Purchasing Department
Overseeing Intellectual Property Department andCentral Research Laboratory
Overseeing Mining Department and Mineral
Resources Business Department
Overseeing Human Resources Department,Internal Auditing Department, and Real EstateBusiness Department
Deputy Senior General Manager of International
Business Division
President of Taiheiyo Cement U.S.A., Inc.
General Manager of Environmental Business
Development Department

(Translation)
Executive Officer

Kazuhiko Ichizawa

Executive Officer

Takashi Miyashita

Executive Officer

Takeshi Miyazaki

Executive Officer

Yutaka Murakami

Executive Officer

Fujio Nakamura

Executive Officer

Katsuya Kawata

Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

Takaji Kawabe
Hiroshi Hirao
Masayuki Yagame
Kouji Ozaki
Tomonori Yamamoto

Executive Officer

Hiroki Tsumura

General Director of Nghi Son Cement Corporation
General Director of Taiheiyo Cement Philippines,
Inc.
General Manager of Maintenance & Engineering
Department
General Manager of Marketing & Trading
Department, International Business Division
General Manager of Sales Department, Cement
Business Division
General Manager of Corporate Planning
Department
General Manager of Production Department
General Manager of Central Research Laboratory
General Manager of Oita Plant
General Manager of Tokyo Branch
General Manager of Chubu Hokuriku BranchPresident of Hokkaido Taiheiyo Kogyo
Corporation

2)

Overview of Limited Liability Agreement
The Company has concluded an agreement with each of Directors Yoshiko Koizumi, Shinhachiro
Emori, Hideyuki Furikado and each Corporate Auditor, which limits his/her liability for damages inrespect of his/her responsibilities set out under Article 423, Paragraph 1 of the Companies Act, to theminimum limit of liability set out under Article 425, Paragraph 1 of the same provided that he/she executes
his/her duties in good faith and without gross negligence.

3)

Directors and Officers Liability Insurance Contract
The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3 Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damages that may arise when theinsured assumes liability for the execution of his or her duties as corporate officer.

4)Compensation, etc. to Directors and Corporate Auditors for the Current Fiscal Year(i) Matters concerning the policy for determining compensation, etc. for individual Directors
The Company has determined policy for determining compensation, etc. for individual Directors at themeeting of Board of Directors. When determining compensation for Directors, the Company will clarify
management responsibilities, raise awareness of improving business performance, and strengthen the link
between the compensation and stockholders’ benefit, while offering the Directors incentives to achieve
improvement of the long-term business performance and corporate value of the Group and sharing moreof that value with the stockholders. The outline of Directors’ compensation determination process is asfollows: The Company establishes the Nomination and Compensation Advisory Committee, the majorityof whose members are Outside Directors and is chaired by an Outside Director, as an advisory body to
the Board of Directors. From the view of enhancing the fairness, transparency, and objectivity, thecompensation shall be discussed by said Committee, which reports to the Board of Directors, and shallbe determined at the discretion of Representative Directors at the Board of Directors meeting, within therange of suitable amount based on a resolution of the General Meeting of Stockholders and the regulationsof the Company, while also respecting the contents of report of the Nomination and Compensation
Advisory Committee to the maximum extent possible.
The compensation plan for Directors (excluding Outside Directors) consists of fixed compensation,
stock compensation and performance-linked compensation whereas the compensation plan for Outside
Directors consists only of fixed compensation.
・The amounts of fixed compensation and stock compensation are determined according to the rank ofposition.
・ The amount of the performance-linked compensation of Directors (excluding Outside Directors) is
calculated by multiplying the amount calculated as profit attributable to owners of parent for the current
fiscal year times 1% (an upper limit of ¥400 million) by the multiplier assigned to each position. It is
paid starting from July in the fiscal year following the end of the current fiscal year. However, thisamount can be reduced in consideration of the financial performance of the Company or other30

(Translation)
circumstances. In principle, performance-linked compensation is not paid if the amount of annual
dividend for the current fiscal year is less than ¥30 per share.
・Stock compensation is paid every year by granting restricted stock according to the rank of position. The
transfer restrictions will be canceled when a Director retires.
・The composition ratio of fixed compensation, stock compensation and performance-linked compensationin the amount of compensation is approximately 90% to 45% for fixed compensation, approximately
10% to 15% for stock compensation, and 0% to approximately 40% for performance-linked
compensation, depending on profit attributable to owners of parent.
・Profit attributable to owners of parent was chosen as an indicator with an aim to strengthen the link
between the compensation and stockholders’ benefit. Performance-linked compensation makes up 11%of the total compensation for the current fiscal year. The actual result of loss attributable to owners ofparent for FY2022, which serves as a basis for calculating the performance-linked compensation for thecurrent fiscal year, was ¥33.2 billion.
Based on the above, the Board of Directors of the Company has judged that the content of compensation,etc. for individual Director for FY2023 is in line with the determination policy.
(ii) Matters concerning the policy for determining compensation, etc. for individual Corporate Auditor
The compensation plans for Corporate Auditors of the Company consist only of fixed compensation.
The amounts of compensation of individual Corporate Auditors are determined by consultation among
Corporate Auditors.
(iii) Matters concerning resolutions of the General Meetings of Stockholders regarding compensation, etc.
for Directors and Corporate Auditors
The upper limits of compensation for Directors and Corporate Auditors are separately set by aresolution of the General Meeting of Stockholders. The date of resolution of the General Meeting ofStockholders on the compensation for Directors was June 29, 2021, and the number of Directors after
said General Meeting of Stockholders was nine (including three Outside Directors). The date of resolution
on the compensation for Corporate Auditors was June 29, 2000, and the number of Corporate Auditors
after said General Meeting of Stockholders was four. The content of the resolution of the General Meetingof Stockholders on the compensation for Directors is such that the amount shall be not more than ¥1,200
million per year (including an amount of ¥100 million for Outside Directors), and not more than ¥200
million per year (200,000 shares per year) shall be provided to Directors other than Outside Directors as
restricted stock compensation within the scope of the said compensation amount. The content of theresolution on the compensation for Corporate Auditors is such that the amount shall be not more than ¥13
million per month.
(iv) Matters concerning delegation related to determination of compensation, etc. for individual Director
Since it is appropriate that the amount of compensation for each Director is determined byRepresentative Director who supervises the overall business, the Company has made a resolution to leave
the determination of the amount of compensation, etc. for individual Director to the discretion of President
and Representative Director Masafumi Fushihara and Vice President and Representative Director(Assistant to the President, Overseeing Carbon Neutral Technology Development Project Team and TCPI
Renewal Project Team) Yuuichi Kitabayashi at the Board of Directors meeting including Outside
Directors held in June 2023, within the range of suitable amount based on a resolution of the General
Meeting of Stockholders and the regulations of the Company.
(v) Total Amount of Compensation, etc. to Directors and Corporate Auditors
Total amount
Total amount by type of compensation, etc.
of(millions of yen)
Number ofcompensation,
OfficertargetNonPerformanceetc.
classification
Officers
Fixedmonetary
linked(millions of(persons)
compensationcompensation,compensation
yen)
etc.
Directors
393
310
38
44
10
Corporate
72
72
5
Auditors(of which,Outside
(67)
(67)
(-)
(-)
(6)
Officers)(Note)The number of persons paid above includes one Director and one Corporate Auditor who
retired at the close of the 25th Ordinary General Meeting of Stockholders held on June 29,
2023.
31

(Translation)

5)

Outside Officers(i) Main Activities in Fiscal Year under Review
Attendance atAttendance at
PositionNamemeetings of Board
meetings of Board ofof Directors
Auditors

Comment status

Made comments as appropriate
at the meetings of the Board of
YoshikoDirectors based on her wealth of
Director
15 out of 15 meetings
experience and insight inKoizumicorporate management mainly
as a lawyer.
Made comments as appropriate
at the meetings of the Board of
Shinhachiro
Directors based on his wealth of
Director
15 out of 15 meetings
experience
mainlyasa
Emorimanagement executive of abusiness corporation.
Made comments as appropriate
at the meetings of the Board ofHideyuki
Director
15 out of 15 meetings
Directors based on his wealth of
Furikado
experience
mainlyasagovernment official.
Made comments as appropriate
at the meetings of the Board of
Directors and meetings of the
Corporate Wakako
15 out of 15 meetings 11 out of 11 meetings Board of Auditors based on her
AuditorMitaniwealth of experience and insightincorporate
management
mainly as a lawyer.
Made comments as appropriate
at the meetings of the Board of
Directors and meetings of the
Corporate Toshihito
11 out of 11 meetings 6 out of 6 meetings
Board of Auditors based on his
AuditorAoki
wealth of experience and insightin corporate accounting mainly
as a certified public accountant.
(Note) During the fiscal year under review, 15 Board of Directors meetings were held and 11 Board ofAuditors meetings were held. Eleven Board of Directors meetings and 6 Board of Auditors
meetings were held after Corporate Auditor Toshihito Aoki took office.

32

(Translation)(ii) Outline of duties performed by Outside Directors regarding their expected roles
As a lawyer, she has a wealth of experience, achievements, andknowledge in corporate legal affairs. The Company expects that
she will fulfill monitoring and supervision functions from thisperspective. She has provided active statements such as asking
questions and making suggestions regarding risk management
system, overseas investment of the Group, etc. based on thisDirector
Yoshiko Koizumi
perspective, and has played appropriate roles including
supervision and advice on business execution as Outside Directorof the Company. She also attends the Nomination andCompensation Advisory Committee as the Chairperson of suchcommittee, and has played a leading role especially in theconsideration process of determining compensations as the
Chairperson of such committee.
As a manager of a business corporation, he has a wealth ofexperience, achievements, and knowledge. The Company expects
that he will fulfill monitoring and supervision functions from thisperspective. He has provided active statements such as asking
questions and making suggestions regarding capital investment
plans, new business projects of the Group, etc. based on thisDirector
Shinhachiro Emori perspective, and has played appropriate roles including
supervision and advice on business execution as Outside Directorof the Company. He also attends the Nomination andCompensation Advisory Committee as a member of suchcommittee, and has provided active statements especially in theconsideration process of determining compensations as a memberof such committee.
As a government official, he has a wealth of experience,achievements, and knowledge regarding public administration. The
Company expects that he will fulfill monitoring and supervisionfunctions from this perspective. He has provided active statements
such as asking questions and making suggestions regarding
financial strategies, new business projects of the Group, etc. based
Director
Hideyuki Furikado on this perspective, and has played appropriate roles including
supervision and advice on business execution as Outside Directorof the Company. He also attends the Nomination andCompensation Advisory Committee as a member of suchcommittee, and has provided active statements especially in theconsideration process of determining compensations as a memberof such committee.
Figures stated in this Business Report are rounded down to the nearest unit of presentation, except for profit
per share, which is rounded off to the second decimal place, and percentages, average age and average lengthof service of employees of the Company, which are rounded off to the first decimal place.

33

(Translation)

Consolidated Financial Statements(April 1, 2023 - March 31, 2024)

Consolidated Balance Sheets
Account

FY2023(as of March 31, 2024)(Unit: Millions of yen)
(Reference)
FY2022(as of March 31, 2023)

Assets430,289

430,408

80,101

79,842

Notes and accounts receivable-trade, and contract assets

167,848

158,136

Electronically recorded monetary claims-operating

38,73524,826Merchandise and finished goods

49,34047,460Work in process

1,465

1,529

Raw materials and supplies

72,371

89,383

Short-term loans receivable

1,345

1,459

Other

19,27827,920Allowance for doubtful accounts

(198)

(150)

Non-current assets

907,961

838,454

Property, plant and equipment
Buildings and structures

653,910620,083

163,748

157,312

Machinery, equipment and vehicles

189,481

191,081Land

158,496

165,027

Leased assets

13,83813,398Construction in progress

59,61434,286

Other

68,731

58,977

Intangible assets
Goodwill

39,08339,766

103

101

Other

38,97939,665Investments and other assets
Investment securities

214,967

178,604

132,313

117,839

Long-term loans receivable

2,486

2,376

Retirement benefit asset

38,906

23,697

Deferred tax assets

8,595

8,167

Other

33,993

27,832

Allowance for doubtful accounts(1,327)(1,309)1,338,251

1,268,862

Current assets
Cash and deposits

Total assets

34

(Translation)
Account

Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term borrowings
Commercial papers
Current portion of bonds payable
Income taxes payable
Provision for bonuses
Provision for loss on business withdrawal
Other provisions
Other
Non-current liabilities
Bonds payable
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability
Provision for retirement benefits for directors (and otherofficers)
Provision for special repairs
Provision for product compensation
Provision for loss on business withdrawal
Other provisions
Lease liabilities
Asset retirement obligations
Other
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Non-controlling interests
Total net assets
Total liabilities and net assets

35

FY2023(as of March 31, 2024)(Reference) FY2022(as of March 31, 2023)

368,103
94,95017,502
142,915
－
－
5,446
6,502
96
321
100,367
373,762
70,000157,553
22,03823,005

385,784
84,162
11,613
149,573
27,00010,000
3,687
5,677
2,564
108
91,395354,22150,000166,911
18,32921,380

548

536

304
3,829
1,769
400
24,805
10,93058,576
741,866

227
4,498
1,924
472
26,5149,379
54,045740,005

497,409
86,17450,051
379,125(17,942)
65,801
17,475(19)
3,697
32,23012,41833,174596,384
1,338,251

465,045
86,17449,729342,880(13,738)
29,911
12,03803,610
13,730530
33,899528,857
1,268,862

(Translation)

Consolidated Statements of Income
Account

FY2023(Unit: Millions of yen)
(Reference)
FY2022(April 1, 2023 - March 31, 2024) (April 1, 2022 - March 31, 2023)

Net sales

886,275

809,542

Cost of sales

694,062

668,324

192,213141,218

135,743

136,761

Operating profit

56,4704,456

Non-operating income

10,619

4,911

4,040

2,392

861

－

Foreign exchange gains

2,651

－

Other

3,065

2,519

Non-operating expenses

7,616

8,352

Interest expenses

3,589

2,746

－

2,771

Other

4,027

2,834

Ordinary profit

59,472

1,015

Extraordinary income

5,292

4,348

Gain on disposal of non-current assets

1,479

1,053

Gain on sale of investment securities

942

1,307

Compensation income

－

1,766

Insurance claim income

2,512

－

358

221

6,730

21,730Loss on disposal of non-current assets

4,865

5,255

Loss on sale of investment securities

0442

Loss on valuation of investment securities

4

6

1,333

6,061

Business withdrawal loss

－

7,984

Product compensation expenses

－

1,277

Other

527

702

Profit (loss) before income taxes

58,034(16,366)

Income taxes-current

15,442

7,671

Income taxes-deferred(1,083)

10,200

Profit (loss)

43,675(34,239)403(1,032)

43,272(33,206)

Gross profit
Selling, general and administrative expenses

Interest and dividend income
Share of profit of entities accounted for using equity method

Share of loss of entities accounted for using equity method

Other
Extraordinary losses

Impairment losses

Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

36

(Translation)

Non-consolidated Financial Statements(April 1, 2023 - March 31, 2024)

Non-consolidated Balance Sheets
FY2023(as of March 31, 2024)(Unit: Millions of yen)
(Reference)
FY2022(as of March 31, 2023

AssetsCurrent assets
Cash and deposits
Notes receivable-trade
Electronically recorded monetary claims-operating
Accounts receivable-trade
Merchandise and finished goods
Raw materials and supplies
Prepaid expenses
Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
Vessels
VehiclesTools, furniture and fixtures
Land providing raw materials
Land
Leased assets
Construction in progress
Intangible assets
Mining right
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital
Investments in capital of subsidiaries and associates
Long-term loans receivable
Long-term prepaid expenses
Prepaid pension costs
Other
Allowance for doubtful accounts

156,186
8,636
9,812
21,131
60,831
16,94029,401
621
8,814
(0)
576,296
231,178
28,92760,43747,397
0
1,457
1,156
12,551
63,836
3,598
11,816
15,399
9,031
3,077
3,290
329,718
26,936
254,95535
2,262
18
13,037
19,827
25,685(13,041)

148,145
4,436
7,345
10,74155,017
15,81642,294675
11,818(0)570,013228,860
28,78959,062
48,934
－
1,562
1,133
12,612
63,7093,722
9,332
16,209
9,273
3,223
3,713
324,943
24,718245,63335
2,950
1712,06819,72041,093(21,296)

Total assets

732,483

718,159

Account37

(Translation)
FY2023(as of March 31, 2024)(Reference) FY2022(as of March 31, 2023)

185,527
8,243
38,431
96,827
－
－
1,039
9,922
21,240
521
74
348
1,776
2,093
5,008
267,091
70,000141,776
2,922
12,3491,208
3,384
31,502
3,607
339

202,188
6,222
26,13893,94227,00010,0001,043
9,928
14,055
345
79
207
1,807
1,663
9,753
259,099
50,000151,779
3,006
12,7102,380
4,501
30,8333,543
344

452,619461,287

Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Retained earnings
Other retained earnings
Reserve for mine prospecting
Reserve for tax basis adjustments of non-current assets
Retained earnings brought forward
Treasury shares
Valuation and translation adjustments
Valuation difference on available-for-sale securities

269,499
86,17442,21542,215
158,535
158,535
453
14,626
143,455(17,425)
10,365
10,365248,504
86,17442,21542,215
133,331
133,331424
14,868118,038(13,216)
8,367
8,367

Total net assets

279,864

256,871

Total liabilities and net assets

732,483

718,159

Account
Liabilities
Current liabilities
Electronically recorded obligations-operating
Accounts payable-trade
Short-term borrowings
Commercial papers
Current portion of bonds payable
Lease liabilities
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Unearned revenue
Provision for bonuses
Electronically recorded obligations-non-operating
Non-current liabilities
Bonds payable
Long-term borrowings
Lease liabilities
Deferred tax liabilities
Provision for loss on guarantees
Provision for loss on business of subsidiaries and associates
Long-term guarantee deposits
Asset retirement obligations
Other
Total liabilities
Net assets

38

(Translation)

Non-consolidated Statements of Income
Account

FY2023(Unit: Millions of yen)
(Reference)
FY2022(April 1, 2023 - March 31, 2024) (April 1, 2022 - March 31, 2023)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Dividend income
Foreign exchange gains
Other
Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts
Foreign exchange losses
Provision for loss on business of subsidiaries and associates
Other
Ordinary profit (loss)
Extraordinary income
Gain on disposal of non-current assets
Gain on sale of investment securities
Gain on sale of shares of subsidiaries and associates
Gain on sale of investments in capital of subsidiaries andassociates
Gain on exchange from dividends in kind
Insurance claim income
Extraordinary losses
Loss on disposal of non-current assets
Provision of allowance for doubtful accounts
Loss on liquidation of subsidiaries and associates
Loss on valuation of investment securities
Loss on valuation of shares of subsidiaries and associates
Loss on valuation of investments in capital of subsidiaries andassociates
Loss on sale of investment securities
Impairment losses
Profit (loss) before income taxes
Income taxes-current
Income taxes-deferred
Profit (loss)

39

335,889273,523
62,36561,093
1,271
35,06030,295
2,478
2,285
4,228
1,705
891
－
－
1,631
32,104
4,204
968
691
32

309,486
278,392
31,09364,736(33,643)
22,147
20,923
－
1,224
5,237
1,156
6
189
2,075
1,809
(16,733)
546
155
331
－

－

59

0
2,512
3,983
3,361
－
0
4
495

－
9,268
3,283
1,009
0
5
734

－

3,587

－
121
32,325125(1,243)33,443

123
526(25,455)(1)
7,428(32,882)

(Translation)

Independent Auditor’s Report
The Board of Directors of Taiheiyo Cement Corporation:
OpinionWe have audited the consolidated financial statements, which comprise the consolidated balance sheet, theconsolidated statement of income, the consolidated statement of changes in net assets and the related notesof Taiheiyo Cement Corporation (“the Company”) and its consolidated subsidiaries (collectively referred
to as “the Group”), as at March 31, 2024 and for the year from April 1, 2023 to March 31, 2024 inaccordance with Article 444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position and the results of operations of the Group for the period, for which theconsolidated financial statements were prepared, in accordance with accounting principles generally
accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Other Information
Other Information consists of the Business Report and the supplementary schedules.
Management is responsible for the preparation and presentation of Other Information. Corporate auditors
and the board of corporate auditors are responsible for overseeing the directors’ performance of their duties
including the design, implementation and maintenance of the Group’s reporting process on Other
Information.
Our audit opinion on the consolidated financial statements does not cover Other Information and we do
not express an opinion on Other Information.
Our responsibilities for the audit of the consolidated financial statements are to read through Other
Information and examine whether Other Information is materially inconsistent with the consolidated
financial statements or with the knowledge we obtained throughout our audit process, or if it otherwise
appears to be materially misstated.
If, based on the work performed, we conclude that there is a material misstatement in Other Information,
we are required to report such fact.
We have nothing to report concerning Other Information.
Responsibilities of Management and Corporate auditors and the board of corporate auditors for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties including the design, implementation and maintenance of the Group’s financial
reporting process.

40

(Translation)

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with auditing standards generally accepted in Japan will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Group to cease to continue as agoing concern.

Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation, structure
and content of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

41

(Translation)

We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and any
measures that have been taken to eliminate obstacles or safeguards that have been put in place to reduce theseobstacles to an acceptable level.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company and its
subsidiaries which are required to be disclosed pursuant to the provisions of the Certified Public
Accountants Act of Japan.
Reiji Kobayashi
Designated Engagement Partner
Certified Public Accountant
Yoshihiro Uehara
Designated Engagement Partner
Certified Public Accountant
Hiroko Sakurada
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, JapanMay 16, 202442

(Translation)

Independent Auditor’s Report
The Board of Directors of Taiheiyo Cement Corporation:
OpinionWe have audited the financial statements, which comprise the balance sheet, the statement of income, thestatement of changes in net assets and the related notes, and the supplementary schedules of Taiheiyo
Cement Corporation (“the Company”) as at March 31, 2024 and for the year from April 1, 2023 to March
31, 2024 in accordance with Article 436-2-1 of the Companies Act.
In our opinion, the financial statements and the supplementary schedules referred to above present fairly,
in all material respects, the financial position and the results of operations of the Company for the period,
for which the financial statements and the supplementary schedules were prepared, in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Financial Statements and Others section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements in Japan,
and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
Other Information consists of the Business Report and the supplementary schedules.
Management is responsible for the preparation and presentation of Other Information. Corporate auditors
and the board of corporate auditors are responsible for overseeing the directors’ performance of their duties
including the design, implementation and maintenance of the Group’s reporting process on Other
Information.
Our audit opinion on the financial statements and the supplementary schedules does not cover Other
Information and we do not express an opinion on Other Information.
Our responsibilities for the audit of the financial statements and the supplementary schedules are to readthrough Other Information and examine whether Other Information is materially inconsistent with thefinancial statements and the supplementary schedules or with the knowledge we obtained throughout our
audit process, or if it otherwise appears to be materially misstated.
If, based on the work performed, we conclude that there is a material misstatement in Other Information,
we are required to report such fact.
We have nothing to report concerning Other Information.
Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors for
the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the
supplementary schedules in accordance with accounting principles generally accepted in Japan, and forsuch internal control as management determines is necessary to enable the preparation of financial
statements and the supplementary schedules that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements and the supplementary schedules, management is responsible forassessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern in accordance with accounting principles generally accepted in Japan and using the going
concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties including the design, implementation and maintenance of the Company’s
financial reporting process.

43

(Translation)

Auditor’s Responsibilities for the Audit of the Financial Statements and Others
Our objectives are to obtain reasonable assurance about whether the financial statements and the
supplementary schedules as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted inJapan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements and the
supplementary schedules.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements and the
supplementary schedules, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher thanfor one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s reportto the related disclosures in the financial statements and the supplementary schedules or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause theCompany to cease to continue as a going concern.

Evaluate whether the presentation and disclosures in the financial statements and the supplementaryschedules are in accordance with accounting standards generally accepted in Japan, the overall
presentation, structure and content of the financial statements and the supplementary schedules,
including the disclosures, and whether the financial statements and the supplementary schedules
represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and any
measures that have been taken to eliminate obstacles or safeguards that have been put in place to reduce theseobstacles to an acceptable level.

44

(Translation)

Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which arerequired to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
Reiji Kobayashi
Designated Engagement Partner
Certified Public Accountant
Yoshihiro Uehara
Designated Engagement Partner
Certified Public Accountant
Hiroko Sakurada
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, JapanMay 16, 202445

(Translation)

Audit Report
The Board of Auditors has prepared this Audit Report following deliberations based on the respective audit reports
prepared by Corporate Auditors in relation to the execution of duties by Directors for the 26th fiscal term from April
1, 2023 to March 31, 2024. The report is as follows.
1. Method and Description of Audit by Corporate Auditors and the Board of Auditors(1) The Board of Auditors determined the audit policy, audit plan, etc., received reports from each Corporate
Auditor on the progress and results of his/her audit, in addition to receiving reports from Directors, etc. and the
Accounting Auditor on the execution status of their duties, and sought explanations as necessary.
(2) Each Corporate Auditor, based on the audit standards for Corporate Auditors established by the Board ofAuditors, followed the audit policy, audit plan, etc., communicated with Directors, the Internal Auditing
Department and other employees, etc., endeavored to collect information and develop an environment for the audit,
and implemented audits via the following methods.
1) We attended the meetings of the Board of Directors and other important meetings, received reports from
Directors, employees, etc. on the execution status of their duties, sought explanations as necessary, reviewed
important approval documents, etc., and investigated the status of operations and assets at the head office andprincipal places of business. With respect to subsidiaries, we verified the status of their management at theCompany’s major meetings, and requested explanation as necessary. We also communicated and exchanged
information with the directors, corporate auditors, etc. of subsidiaries besides conducting site audits, etc. inaccordance with audit plans.
2) We also monitored and verified the content of the resolution passed by the Board of Directors regarding thedevelopment of a system to ensure that Directors comply with laws, ordinances and the Articles of Incorporationin executing their duties and other systems stipulated in paragraphs 1 and 3 of Article 100 of the Ordinance for
Enforcement of the Companies Act that are required to ensure proper operations of a company group comprisedof a stock company and its subsidiaries, as well as the status of the system developed pursuant to such resolution(i.e., internal control system). In regards to internal controls over financial reporting, we received reports from
Directors, etc. and KPMG AZSA LLC on the evaluation and audit status of such internal controls, and sought
explanations as necessary.
3) We monitored and verified whether or not the Accounting Auditor had maintained its independence and whether
or not it had conducted its audit properly, received reports from the Accounting Auditor on the execution statusof its duties, and sought explanations as necessary. In addition, we were notified by the Accounting Auditor that
it is equipped with a system for ensuring that duties are performed properly (matters listed in the items of Article
131 of the Company Accounting Ordinance) in accordance with the Quality Control Standards for Audits (issued
by the Business Accounting Council), etc., and sought explanations as necessary.
Based on the above methods, we examined the Business Report and its supplementary schedules, Nonconsolidated Financial Statements (i.e., Non-consolidated Balance Sheets, Non-consolidated Statements of Income,Non-consolidated Statements of Changes in Net Assets and Notes to the Non-Consolidated Financial Statements)
and their supplementary schedules as well as the Consolidated Financial Statements (i.e., Consolidated Balance
Sheets, Consolidated Statements of Income, Consolidated Statements of Changes in Net Assets and Notes to theConsolidated Financial Statements) for the fiscal year under review.

46

(Translation)
2. Audit Results(1) Results of audit of Business Report, etc.
1. In our opinion, the Business Report and the supplementary schedules are in compliance with laws,
ordinances and the Articles of Incorporation, and fairly represent the Company’s position.
2. No material facts were identified regarding misconduct or violation of any laws, ordinances or the
Articles of Incorporation in relation to the execution of duties by Directors.
3. In our opinion, the Board of Directors’ resolution on the internal control system (including internal
controls over financial reporting) is adequate in content. We found no matters that need to be pointed out
in regards to the content of the records in the Business Report and the execution of duties by Directors in
relation to said internal control system. Of note, we received reports from Directors, etc. and KPMG AZSA
LLC that there are no material inadequacies to be disclosed in relation to internal controls over financial
reporting by the time of preparation of this Audit Report.
(2) Results of audit of Non-consolidated Financial Statements and their supplementary schedules
In our opinion, the methods and results of the audit conducted by Accounting Auditor KPMG AZSA LLC arereasonable.
(3) Results of audit of Consolidated Financial Statements
In our opinion, the methods and results of the audit conducted by Accounting Auditor KPMG AZSA LLC arereasonable.
May 20, 2024
Board of Auditors, Taiheiyo Cement Corporation
Corporate Auditor (Standing)

Katsuhide Fukuhara [Seal]

Corporate Auditor (Standing)Masahiro Karino[Seal]

Outside Corporate Auditor

Wakako Mitani[Seal]

Outside Corporate Auditor

Toshihito Aoki

[Seal]

47

(Translation)

This document has been translated from the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, the original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translation.
(Start Date of Measures for Electronic Provision: May 30, 2024)

MATTERS TO BE PROVIDED ELECTRONICALLY
ACCOMPANYING THE NOTICE OF THE 26th ORDINARY
GENERAL MEETING OF STOCKHOLDERS
Accounting Auditor
System to Ensure that Directors Comply with Laws and Ordinances
and the Articles of Incorporation in Executing Their Duties andOther Systems to Ensure Proper Execution of Operations
Consolidated Statements of Changes in Net Assets
Notes to Consolidated Financial Statements
Non-consolidated Statements of Changes in Net Assets
Notes to Non-consolidated Financial Statements(from April 1, 2023 to March 31, 2024)

Taiheiyo Cement Corporation
The content of this document is omitted from the paper copy provided to stockholders who maderequests for the provision of the paper copy, pursuant to laws and regulations and the Articles ofIncorporation of the Company.

1

(Translation)

Accounting Auditor(1)

Name of the Company’s Accounting Auditor
KPMG AZSA LLC(2)Accounting Auditor’s Compensation, etc. in Fiscal Year under Review¥ 130 million(Notes) 1. Under the audit agreement between the Company and its Accounting Auditor, the amount ofcompensation for audits pursuant to the Companies Act and audits pursuant to the Financial
Instruments and Exchange Act are not distinguished from each other and are indistinguishable
in practice. Therefore, the above amount includes compensation, etc. for audits pursuant to the
Financial Instruments and Exchange Act.
2. The Board of Auditors of the Company, in observance of the “Practical Guidelines for
Cooperation with Accounting Auditors” published by the Japan Audit & Supervisory Board
Members Association, has confirmed the time taken to audit each audit item, trends in audit
fees, and the status of execution of duties of the Accounting Auditor, and upon considering theappropriateness of the audit plan and appropriateness of audit fees for the fiscal year underreview, agrees to the fees, etc., of the Accounting Auditor under Article 399, Paragraph 1 of
the Companies Act.
3. In addition to the above, the Company paid additional compensation of ¥18 million inconnection with audits for the previous fiscal year.

(3)

Description of Non-audit Services to the Company involving Payment of Consideration to
Accounting Auditor
The Company entrusts to the Accounting Auditor the service of preparing comfort letters forissuance of corporate bonds, which are services other than the services set forth in Article 2,
Paragraph 1 of the Certified Public Accountants Act (non-audit services), and pays consideration
for said service.

(4)

Policy for Determination of Dismissal or Non-reappointment of Accounting Auditor
1) If the Accounting Auditor is deemed to correspond to any of the matters set forth in the items of
Article 340, Paragraph 1 of the Companies Act, the Board of Auditors will dismiss the Accounting
Auditor subject to the consent of all Corporate Auditors, in which case the Corporate Auditor selectedby the Board of Auditors will report the dismissal and the reason for the dismissal at the first Ordinary
General Meeting of Stockholders held after the dismissal.
2) The Board of Directors will specify the dismissal or non-reappointment of the Accounting Auditor
as an agenda of the General Meeting of Stockholders based on the Board of Auditors’ resolution incases where severe problems have arisen in the Company’s audit operations and in other such cases.

(5)

Total Amount of Money and Other Property Benefits Payable to Accounting Auditor by theCompany and its Subsidiaries¥ 271 million(Note) Among significant subsidiaries of the Company, CalPortland Company, Jiangnan-Onoda Cement
Co., Ltd., Dalian Onoda Cement Co., Ltd., Nghi Son Cement Corporation and Taiheiyo Cement
Philippines, Inc. have been audited (limited to audits under the provisions of the Companies Act
or the Financial Instruments and Exchange Act (including laws and ordinances of foreign countries
corresponding to said Acts)) by a Certified Public Accountant or an audit corporation other thanthe Company’s Accounting Auditor (including those with foreign qualifications equivalent to
CPA/auditor qualifications).

2

(Translation)
System to Ensure that Directors Comply with Laws and Ordinances and the Articles ofIncorporation in Executing Their Duties and Other Systems to Ensure Proper Execution of
Operations(1)

Summary of the System to Ensure the Proper Execution of Operations

The Company has systems to ensure the proper execution of operations (so-called internal control systems)
and defines them as shown below.
1)

System to ensure that Directors, Executive Officers and employees comply with laws andordinances and the Articles of Incorporation in executing their duties(i) The Company shall strengthen its system for ensuring that the actions of Directors, Executive
Officers and employees comply with laws and ordinances, the Articles of Incorporation and otherinternal company rules, and conventional wisdom in accordance with the Mission of the Taiheiyo
Cement Group, Business Principles, Basic Compliance Policy and Compliance Rules.
(ii) The Sustainability Management Committee, an interdepartmental committee under the direct
authority of the Board of Directors, pursues policies to promote compliance awareness among
Directors, Executive Officers and employees in accordance with the Sustainability Prospectus.
(iii) The Internal Auditing Department conducts audits of the business activities of each place of businesswithin the Company to determine whether Executive Officers and employees comply with laws andordinances, the Articles of Incorporation, etc. in executing their duties, provides advice andrecommendations after identifying items in need of improvement, and reports to the President aboutaudit results and then notifies Directors and Corporate Auditors.
(iv) The Company employs an internal reporting system that uses a compliance hotline to reach
representatives both inside and outside the Company (law firm) to enable an accurate response while
protecting the informer and ensuring transparency.

2)

System to store and manage information related to the execution of duties by Directors
The Company documents, stores and manages information related to the execution of duties by Directors
in accordance with the Board of Directors Rules, Decision Making Rules and Document Management
Rules. Directors and Corporate Auditors can review these documents at any time.

3)

Rules and other systems related to managing the risk of loss(i) The Company has prepared the Basic Risk Management Policy and Risk Management Rules
covering basic matters and specific responses to prevent and minimize the impact of risk items that
could significantly affect the business of the Taiheiyo Cement Group. The Sustainability
Management Committee is in charge of pursuing specific measures, and reports to the Board of
Directors about the status of these activities.
(ii) In the event of an emergency, the Company establishes an Emergency Headquarters led by the
President to pool information and exercise top-down leadership in tackling the emergency inaccordance with the provisions of the Risk Management Rules.

4)

System to ensure that Directors execute their duties efficiently(i) The Company delegates to Executive Officers the authority for certain business matters as stipulated
in the Decision Making Rules and elsewhere. Executive Officers, based on a Management by
Objectives, set clear targets for each responsible organization under their control and execute theirduties efficiently.
(ii) The Board of Directors efficiently allocates business resources from the perspective of optimizing
companywide resources and in accordance with the medium-term management plan and annual
management policy (President’s policy), and reviews the targets of Executive Officers and theprogress of policies reported from time to time.

5)

System for ensuring proper execution of operations within the company group, comprising theCompany and its subsidiaries
The Company, in accordance with its Group Companies Management Rules, takes the following steps toprovide appropriate management and support to its subsidiaries to enable the adequate functioning of
their management organizations (general meeting of stockholders, board of directors, corporate auditors,
and board of auditors) and the establishment of independent management based on self-responsibility.
(i) The Company assigns, in principle, Directors, Executive Officers and employees to serve as directors3(Translation)or corporate auditors at its subsidiaries. These corporate auditors conduct audits of internal control
systems.
(ii) The Internal Auditing Department conducts audits of the business activities according to the size,
nature of business, etc. of subsidiaries to determine whether the directors and employees of thesubsidiaries comply with laws and ordinances, the Articles of Incorporation, etc. in executing theirduties, provides advice and recommendations after identifying items in need of improvement, andreports to the President about audit results and then notifies Directors and Corporate Auditors.
(iii) The Company seeks to understand the business conditions of each subsidiary through performance
reports and other means and endeavors to share information through exchanges of opinions between
the Company and directors at subsidiaries (including directors serving concurrently as Directors,
Executive Officers or employees at the Company) by periodically holding Group Executive
Committee meetings.
(iv) The Company makes its subsidiaries appoint officers responsible for risk management andcompliance as well as risk management and compliance promoters according to their size, nature ofbusiness, etc. and strives to prevent and reduce risks in the Taiheiyo Cement Group by collaboratingwith each company, and adopts a system for reporting to Directors and Corporate Auditors of theCompany if a crisis occurs or if an event with the risk of developing into a crisis arises at a company.
6)

System to ensure reliability of financial reporting
The Company develops a system required to properly conduct financial reporting such as consolidated
financial statements.

7)

Matters related to personnel to assist Corporate Auditors and independence of such personnel from
Directors
The Company has established a Corporate Auditor’s Office which assists Corporate Auditors in
performing their duties, and assigns full-time personnel. The Company shall request and respect theopinion of the Board of Auditors in matters related to the transfer and evaluation of such full-time
personnel.

8)

System for reporting to Corporate Auditors by Directors, Executive Officers and employees of theCompany as well as directors, corporate auditors and employees of subsidiaries or persons who
received a report from them and other systems for reporting to Corporate Auditors(i) The Company employs a system in which Corporate Auditors can attend important meetings related
to business matters to receive reports from Directors and other employees about the status of theexecution of their duties.
(ii) The Company adopts a system in which any facts that may inflict serious damage to the Company
are reported to Corporate Auditors by Directors, Executive Officers and employees of the Company
as well as directors, corporate auditors and employees of subsidiaries or persons who received areport from them.
(iii) The Company prohibits the unfavorable treatment of anyone who has made a report under thepreceding item.

9)

Other systems to ensure effective auditing by Corporate Auditors(i) The Company employs a system in which Corporate Auditors are shown documents related toimportant decisions and can gain access to a variety of information, including management
information, at any time.
(ii) The Company provides a venue for Corporate Auditors to exchange opinions and information with
the Accounting Auditor.
(iii) When a Corporate Auditor requests the prepayment or payment of expenses required for performing
his/her duties, the Company promptly pays such expenses.

(2)

Summary of the Operational Status of the System to Ensure the Proper Execution of Operations

The Company’s Internal Control System is maintained through systems in line with the basic policy above
and is appropriately managed. Key measures are as follows.
1)

Compliance system(i) Based on the Sustainability Prospectus, a Sustainability Management Committee has been
established composed of all Directors with the President as the Chairman, and it is held once per4(Translation)quarter. The Sustainability Management Committee formulates a Sustainability Action Plan forevery fiscal year, understands and confirms its status of progress, and makes evaluations.
Additionally, the results are reported to the Board of Directors.
(ii) Directly under the Sustainability Management Committee, the Risk Management and Compliance
Committee was established as a subordinate body, and upon formulation of the action plan, it
understands and confirms the status of implementation. Additionally, the status of these measures isreported to the Sustainability Management Committee.
(iii) Officers responsible for risk management and compliance as well as risk management andcompliance promoters are selected, these persons engage in promotion of compliance, and theCompany also implements training for these responsible persons and leaders.
(iv) Education regarding compliance is conducted via forms such as training for new employees andtraining depending on job level, distributing action guideline casebooks, and self-checks utilizing elearning, all in an effort to thoroughly implement compliance.
2)

Risk management system(i) Based on the Basic Risk Management Policy, Risk Management Rules are defined, and while
promoting measures toward risk management, responses to emergency situations are defined in the
Crisis Management Rules.
(ii) The annual risk countermeasure plan is formulated, and based on a PDCA cycle, measures for risk
management are promoted.
(iii) In preparation for unexpected events such as disasters and accidents, etc., periodic disasterprevention drills and other training programs are implemented. Additionally, exercises such as initial
response simulation training in the event of a large-scale natural disaster are also conducted to aim
to increase awareness of response processes.
(iv) Under the Basic Information Security Policy, an information security management system has been
established, and while aiming for thorough protection of information assets and appropriate
management and handling, information risk countermeasures are promoted via information security
education such as e-learning.

3)

Ensuring proper execution of operations at the Group(i) Based on the Group Companies Management Rules, a system is maintained where group companies
and the Company deliberate on important matters, direction and management is conducted as
required, and support is provided to management.
(ii) While understanding the management conditions of each group company through periodic
achievement reporting, etc., a Group Executive Committee meeting is held twice per year to
exchange opinions on various themes and share information related to management of the Group.
(iii) Directors and Corporate Auditors of subsidiaries are seconded from the Company to supervise
business execution and implement audits regarding the internal control systems.
(iv) The Internal Auditing Department, upon formulating an audit implementation plan based on theannual audit policy, implements internal audits toward subsidiaries, and provides advice andrecommendations.

5(Translation)
4)

Execution of business by Directors(i) The Board of Directors is composed of nine persons, including three Outside Directors, and meetings
were held 15 times during the fiscal year under review, where deliberation and determination wasmade regarding important matters defined by laws and regulations and the Articles of Incorporation,in addition to supervision of the execution of business by Directors.
(ii) For important matters other than those to be deliberated by the Board of Directors, Executive
Committee meetings were held 21 times for deliberation.
(iii) To secure the efficiency of execution of business by Directors, reports on the status of businessexecution are made at the Board of Directors by dividing up duties among the Directors andExecutive Officers.
(iv) Regarding management execution, a certain level of authority is delegated to Executive Officers.
Executive Officers execute business via a Management by Objectives that is in line with theMedium-term Management Plan and the annual management policy (President’s policy), and theBoard of Directors reviews the status of progress.

5)

Execution of business by Corporate Auditors(i) Aside from Board of Directors meetings, Corporate Auditors attend important meetings such as the
Executive Committee to confirm the status of the development and operation of the internal control
system.
(ii) Corporate Auditors receive reports on the internal audits carried out by the Internal Audit Department,
while cooperating with the Internal Audit Department to efficiently carry out audits of each businessoffice, subsidiary, etc.
(iii) Periodic meetings are held with the Accounting Auditor to exchange information.
(iv) A Corporate Auditor’s Office has been established to assist Corporate Auditors in performing theirduties, and full-time personnel has been assigned.

Figures stated in this Business Report are rounded down to the nearest unit of presentation.

6

(Translation)

Consolidated Statements of Changes in Net Assets(April 1, 2023 - March 31, 2024)(Unit: Millions of yen)

Share capital
Balance at beginning of period

86,174

Capital surplus
49,729

Shareholders’ equity
Retained
Treasury sharesearnings
342,880(13,738)

Total shareholders’equity465,045

Changes during period
Change in ownership interest of parent due to transactions with221

non-controlling interests

221

Dividends of surplus(8,215)(8,215)

Profit attributable to owners of parent

43,272

43,272

Reversal of revaluation reserve for land

1,199

1,199

Purchase of treasury shares(5,022)(5,022)

Disposal of treasury shares

140

81

222

Increase (decrease) by share exchanges

(52)

736

684

Transfer from retained earnings to capital surplus

11

(11)

-

322

36,245(4,204)32,36386,17450,051

379,125(17,942)

497,409-

Net changes in items other than shareholders' equity
Total changes during period
Balance at end of period7

(Translation)(Unit: Millions of yen)

Accumulated other comprehensive income
Total
Valuation
Deferredgains
Foreigncurrency
Remeasurements
accumulateddifference on
Revaluationotheror losses on reservetranslationof defined benefit
for landavailable-for-salehedgesadjustment
planscomprehensive
securities
incomeBalance at beginning of period

12,03803,610

13,730530

29,911

Noncontrollinginterests

Total
net assets

33,899528,857

Changes during period
Change in ownership interest ofparent due to transactions with noncontrolling interests

221

Dividends of surplus(8,215)

Profit attributable to owners ofparentReversal of revaluation reserve forland

43,272
1,199

Purchase of treasury shares(5,022)

Disposal of treasury shares

222

Increase (decrease) by shareexchanges
Transfer from retained earnings tocapital surplus
Net changes in items other thanshareholders' equity

684
5,436

(20)

86

18,49911,88735,890(725)

35,164

Total changes during period

5,436

(20)

86

18,49911,88735,890(725)

67,527

Balance at end of period

17,475

(19)

3,697

32,23012,41865,80133,174596,3848

(Translation)

Notes to the Consolidated Financial Statements
1. Notes, etc. on Significant Matters serving as the Basis for Preparation of Consolidated Financial
Statements(1) Matters concerning Scope of Consolidation(i) Number of consolidated subsidiaries and name of major consolidated subsidiaries
Number of consolidated subsidiaries: 129
Name of major consolidated subsidiaries:
Major consolidated subsidiaries are DC Co., Ltd., Clion Co., Ltd., Myojyo Cement Co., Ltd., Taiheiyo
Materials Corporation, CalPortland Company, Jiangnan-Onoda Cement Co., Ltd., Dalian Onoda Cement
Co., Ltd., Nghi Son Cement Corporation and Taiheiyo Cement Philippines, Inc.
Of note, Ichihara Ecocement Corporation completed the liquidation process and was excluded from thescope of consolidation.
(ii) Name, etc. of major unconsolidated subsidiaries
Name of major unconsolidated subsidiaries:
Major unconsolidated subsidiaries are Taiheiyo Singapore Pte., Ltd., and Taiheiyo Services Co., Ltd.
Reason for excluding from the scope of consolidation:
All unconsolidated subsidiaries are small companies, and none of them have a material impact on the
consolidated financial statements in terms of the amount of equity interest including total assets, net sales,
net income and retained earnings as a whole; accordingly, they were excluded from the scope of
consolidation.
(2) Matters concerning Application of Equity Method(i) Number of unconsolidated subsidiaries and affiliates accounted for by the equity method and name ofmajor companies, etc.
Number of unconsolidated subsidiaries accounted for by the equity method: 4Name of major companies, etc.:
Major unconsolidated subsidiary accounted for by the equity method is Taiheiyo Singapore Pte., Ltd.
Number of affiliates accounted for by the equity method: 38
Name of major companies, etc.:
Major equity-method affiliates are Okutama Kogyo Co., Ltd., A&A Material Corporation, Fuji P.S
Corporation, Yakushima Denko Co., Ltd., Chichibu Railway Co., Ltd., Azuma Shipping Co., Ltd. and PT
Solusi Bangun Indonesia Tbk.

9

(Translation)(ii) Name, etc. of unconsolidated subsidiaries and affiliates not accounted for by the equity method
Name of major companies, etc.:(Unconsolidated subsidiaries)
Unconsolidated subsidiaries not accounted for by the equity method are Taiheiyo Services Co., Ltd.
and 66 other companies.
(Affiliates)
Affiliates not accounted for by the equity method are Cement Terminal Corporation and 64 othercompanies.
Reason for not applying the equity method:
Unconsolidated subsidiaries and affiliates not accounted for by the equity method were excluded from thescope of the equity method because the amount of equity interest including their respective net income andretained earnings all have minimal impact on the consolidated financial statements.
(iii) Particularly noteworthy matters concerning procedures for application of the equity method
For companies accounted for by the equity method whose fiscal year-end is different from the consolidated
fiscal year-end, their respective non-consolidated financial statements for the most recent fiscal year havebeen used.
(3) Fiscal periods of consolidated subsidiaries
Of the consolidated subsidiaries, Taiheiyo Cement U.S.A., Inc., Jiangnan-Onoda Cement Co., Ltd., Nghi
Son Cement Corporation, Dalian Onoda Cement Co., Ltd., GLACIER NORTHWEST, INC., Taiheiyo
Cement (China) Investment Co., Ltd., CalPortland Company, Taiheiyo Cement Philippines, Inc., Coronet
Industries Co., Ltd. and 27 other companies use December 31 as their closing date. In preparing theconsolidated financial statements, the Company used financial statements prepared as of that closing dateand made necessary consolidation adjustments for important transactions that occurred in the period throughthe consolidated closing date.
(4) Matters concerning Accounting Policies(i) Standards and methods for valuation of significant assets
a. Available-for-sale securitiesa) Securities other than shares, etc. without market price:
Such securities are stated at market value.
(Valuation differences are all charged/credited directly to net assets, and the cost of selling thesecurities is determined by the moving-average method.)b) Shares, etc. without market price:
Such securities are stated at cost, based on the moving-average method.
b. Derivatives
Derivatives are stated at market value.
c. Inventories
Inventories are mainly stated at cost, which is determined by the moving average method (subject to10(Translation)
write-down due to diminished profitability.)
However, the cost for contract work in process is determined by the specific identification cost method.
Of note, inventories at the consolidated subsidiary in the U.S. are stated at lower of cost or market, basedon the gross average method.
(ii) Depreciation method for significant depreciable assets
a. Property, plant and equipment (excluding leased assets)
The declining balance method is adopted by the Company and its domestic consolidated subsidiaries,
and the straight-line method by its consolidated overseas subsidiaries.
However, the depreciation of buildings (excluding accompanying facilities) purchased on and after April
1, 1998 and accompanying facilities and structures purchased on and after April 1, 2016 is computed
based on the straight-line method by the Company and its domestic consolidated subsidiaries.
The range of useful lives of main property, plant and equipment is as follows:
Buildings and structures:

10 - 75 years

Machinery, equipment and vehicles:

4 - 15 years

b. Intangible assets (excluding leased assets)
Intangible assets are amortized by the straight-line method.
However, mining rights are mainly amortized by the unit of production method and software is amortizedby the straight-line method over its useful life assuming in-house use (5 years).
c. Leased assets
Leased assets are depreciated by the straight-line method that assumes their lease periods are useful lives
and residual values are zero (or if there is a residual value guarantee, the guaranteed residual value).
(iii) Accounting standards for significant provisions
a. Allowance for doubtful accounts
Allowance for doubtful accounts is provided for by the Company and its domestic consolidated
subsidiaries at the estimated uncollectible amount, which is calculated based on the historical credit loss
ratio with respect to ordinary receivables, and in consideration of collectibility on a case-by-case basiswith respect to specified receivables such as doubtful accounts. Consolidated overseas subsidiaries
mainly provide for such allowance at the estimated uncollectible amount with respect to specified
receivables.
b. Provision for bonuses
To prepare for the payment of bonuses payable to employees, the Company and its domestic
consolidated subsidiaries record the estimated payable amount to be borne in the consolidated fiscal year
under review.
c. Provision for retirement benefits for directors (and other officers)
Certain consolidated subsidiaries provide for retirement allowances for directors and corporate auditors
at the necessary payment amount in full at the year-end based on their internal regulations.
d. Provision for special repairs
To prepare for the payment of expenses for special repairs of business-purpose facilities, certain
consolidated subsidiaries record the estimated amount for repairs in the future.
11

(Translation)e. Provision for product compensation
To prepare for the payment of expenses for measures against product malfunctions, certain consolidated
subsidiaries record the estimated amount for payments in the future.
f. Provision for loss on business withdrawal
Some consolidated subsidiaries in China provide for expenditures related to withdrawal from businessbased on the estimated amount of future expenditures.
(iv) Accounting standards for revenue and expenses recognition
The Group recognizes revenue based on the following five-step approach.
Step 1: Identify the contract with a customer.
Step 2: Identify separate performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate transaction price to performance obligations in the contract.
Step 5: Recognize revenue when each performance obligation is satisfied.
The Group’s main businesses are “Cement Business,” “Mineral Resources Business,” “Environmental
Business,” and “Construction Materials Business.” The Group sells goods and provides services in thesebusinesses.
For sales of goods, as goods are transferred to customers at the time of inspection of such goods, it isdeemed that performance obligations are satisfied, and revenue is recognized at the time of inspectionof such goods. In addition, applying the transitional treatment provided for in Paragraph 98 of“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30),for some domestic transactions, revenue is recognized at the time of shipment when the period between
shipment of the goods to said goods being transferred to the customer is standard.
For provision of services, performance obligations are deemed satisfied in accordance with contents ofthe contract, and revenue is recognized when service is provided or when service is completed.
In the cases where the Group acts as a principal in a direct transaction, revenue is presented in the total
amount of consideration received from the customer. For domestic purchase and sales transactions
mainly for products such as cement and ready-mixed concrete products, in the cases where the Group
acts as an agent for a third party to conduct the transaction, revenue is presented in the amount of the fee
calculated by deducting the amount collected for the benefit of the third party from the consideration
received from the customer.
Moreover, revenue is recognized in the amount of the consideration, etc. paid by the customer, which is
calculated by deducting discounts, kickbacks, sales incentives, rebates, etc. from the amount ofconsideration expected to be entitled to by the corporation as goods or services are transferred to or
exchanged with the customer.
(v) Standards for translating significant foreign currency assets and liabilities into Japanese yen
Monetary claims and obligations denominated in foreign currencies are translated into Japanese yen basedon the spot exchange rate as at the consolidated closing date, and translation gains (losses) are recognizedin profit (loss). Of note, consolidated overseas subsidiaries’ assets and liabilities are translated into
Japanese yen based on the spot exchange rate as at the closing date, revenue and expenses are translated12(Translation)
into Japanese yen based on the average exchange rate for the fiscal year, and translation gains (losses) are
included in “Foreign currency translation adjustment” and “Non-controlling interests” under Net Assets.
(vi) Significant hedge accounting methods
a. Method of hedge accounting
Gains/losses on hedges are deferred. Allocation treatment is applied when the currency swaps meetthe conditions for application of such allocation treatment. Exceptional treatment is applied when theinterest rate swaps meet the conditions for application of such exceptional treatment.
b. Hedging instruments and hedged items
Hedging instruments:
Interest rate swaps, currency swaps, raw materials and fuel swaps, interest-rate options, currency
options, raw materials and fuel options and forward exchange contracts are employed as hedging
instruments.
Hedged items:
Borrowings, accounts payable-trade, raw materials and fuel, etc.
c. Hedging policy
Hedging is limited to those aimed at hedging against the risk of interest rate, exchange rate, and raw
materials and fuel price fluctuations of the hedged items and those aimed at eliminating hedging.
d. Method of evaluating hedge effectivenessHedge effectiveness is verified on a transaction-by-transaction basis at the end of each accounting
period with respect to hedging instruments and hedged items; however, if the principal, interest rate,
period, and other such significant terms of the hedging instruments and hedged items are the same,
such verification is omitted.
(vii) Method and period of amortization of goodwill
Goodwill is amortized over the estimated number of years in cases that the number of years can be
estimated based on practical judgment starting from the fiscal year of acquisition while the entire amountof goodwill is amortized in the fiscal year of acquisition without analyzing the causes in cases that theamount of goodwill is insignificant.
(viii) Accounting procedures for retirement benefit liability
To prepare for the payment of retirement benefits to employees, retirement benefit liability is recorded in
the amount of retirement benefit obligation less plan assets based on the projected amount at the end of
the consolidated financial year under review.
Actuarial gains and losses and prior service cost are amortized in equal amounts as expenses by thestraight-line method over a certain number of years (primarily 10 years) within the average remaining
years of service of employees at the time of accrual, commencing in the consolidated fiscal year following
the year of accrual for actuarial gains and losses and in the consolidated fiscal year of accrual for priorservice cost.
Unrecognized actuarial gains and losses and unrecognized prior service cost are recorded as“Remeasurements of defined benefit plans” in “Accumulated other comprehensive income” under Net
Assets, after making tax effect adjustments. When the value of plan assets exceeds the amount of the13(Translation)
retirement benefit obligation, the amount of such excess is recorded in “Retirement benefit asset”.
(ix) Amounts shown in these consolidated financial statements are rounded down to the nearest million yen.
2. Changes in Accounting Policy
Not applicable.
3. Changes in Presentation
Not applicable.
4. Notes on Accounting EstimatesAmong the items recorded in the consolidated financial statements for the consolidated fiscal year underreview based on accounting estimates, the items that may have a significant impact on the consolidated
financial statements for the next consolidated fiscal year are as follows.
Impairment of non-current assets(i) Amount recorded in the consolidated financial statements for the consolidated fiscal year under review(Unit: Millions of yen)
Fiscal year underreview
Non-current assets

907,961

Non-current assets in the Company’s cement business

119,911

Property, plant and equipment

115,608

Intangible assets etc.

4,303(ii) Information contributing to the understanding of the contents of accounting estimates
When there is an indication of impairment of a business non-current asset, the Company determines
whether an impairment loss should be recognized by comparing the carrying amount of the asset with thetotal undiscounted future cash flows to be derived from the asset group. If the assessment indicates that an
impairment loss should be recognized, the carrying amount of the asset is reduced to its recoverable amount,and the reduction in the carrying amount is recognized as an impairment loss.
Although the Company’s cement business in the consolidated fiscal year under review showed signs of
impairment due to continuous negative operating income (loss), the Company determined that no
impairment loss was required because the undiscounted future cash flows exceeded the carrying amountof the assets.
The estimates of future cash flows used in this determination are based on the budget prepared bymanagement and the Medium-term Management Plan and are based on key assumptions such as domestic
cement demand forecasts, sales share ratios of competitors, unit selling prices of cement, and coal prices.
These estimates may be affected by the future economic environment and other factors.

14

(Translation)
5. Notes to the Consolidated Balance Sheets(1) Assets pledged as collateral and secured liabilities(i) Assets pledged as collateral
Cash and deposits¥653 million

Property, plant and equipment¥30,760 million

Intangible assets¥28 million

Investment securities¥87 million

Investments and other assets-other¥2,277 million

Total¥33,806 million(ii) Secured liabilities
Notes and accounts payable-trade¥4,737 million

Short-term borrowings¥4,007 million

Long-term borrowings¥954 million

Total¥9,700 million(2) Accumulated depreciation of property, plant and equipment¥ 1,351,190 million(3) Guarantee obligations
Guarantees for loans payable from banks, etc.
Guarantees for account payables to Ready-mixed Cooperative Association, etc.
(4) Discounted trade notes receivable and Trade notes receivable transferred byendorsement
Discounted trade notes receivable
Trade notes receivable transferred by endorsement¥9,263 million¥1,340 million¥2,558 million¥29 million

Discounts on electronically recorded monetary claims-operating
Electronically recorded monetary claims transferred by endorsement(5) Notes maturing at the end of the period
Accounting treatment for notes maturing at the end of the period is settled on the dateof exchange.
Since the last day of the consolidated fiscal year was a holiday for financial
institutions, the following notes maturing at the end of the period are included in thebalance at the end of the fiscal year.
Notes receivable-trade¥2,154 million¥126 million¥6,158 million

Electronically recorded monetary claims-operating¥8,583 million

Notes payable-trade¥6,921 million

Notes payable-facilities¥137 million

Electronically recorded obligations-operating¥2,767 million

Electronically recorded obligations-non-operating¥335 million(6) Revaluation of Land
A&A Material Corporation and Chichibu Railway Co., Ltd., the Company’s affiliates accounted for by theequity method, revalued their business-purpose land in accordance with the Act on Revaluation of Land
(Act No. 34, promulgated on March 31, 1998) and the Act on Partial Revision of the Act on Revaluation of15

(Translation)
Land (revised on March 31, 1999). With respect to the valuation difference, the amount of the Company’s
share in the valuation difference is recorded in Net Assets as “Revaluation reserve for land.”6. Notes to the Consolidated Statements of Changes in Net Assets(1) Class and total number of outstanding shares as at the end of the consolidated fiscal year under review:
Common stock

121,985,078 shares(2) Matters concerning dividends(i) Amount of dividends paid
Resolution

Total amount ofdividends(millions of yen)Class ofsharesAmount ofdividend per
share

Recorddate

Effective
date

Ordinary General
Common4,108March 31, June 30,
Meeting of Stockholders¥35.00stock(Note 1)
2023
2023
held on June 29, 2023
Meeting of Board ofSeptember December
Common4,118
Directors held on¥35.0030, 2023
4, 2023stock(Note 2)
November 9, 2023
(Notes) 1. Includes dividends of ¥5 million associated with treasury shares held by consolidated
subsidiaries.
2. Includes dividends of ¥5 million associated with treasury shares held by consolidated
subsidiaries.
(ii) Dividends whose record date is at the end of the consolidated fiscal year under review whereas its
effective date falls in the next consolidated fiscal year
The following matters concerning dividends for common stock are scheduled to be proposed at theOrdinary General Meeting of Stockholders.
Total amount of dividends:¥4,054 million

Amount of dividend per share:¥35.00Record date:

March 31, 2024

Effective date:June 28, 2024

Of note, the source of funding dividend payments is scheduled to be retained earnings.
Total amount of dividends includes dividends of ¥5 million associated with treasury shares heldby consolidated subsidiaries.

16

(Translation)(iii) Class and number of shares to be issued upon exercise of share options at the end of the consolidated
fiscal year under review (excluding those for which the first day of the exercise period has not yet
arrived)Not applicable
7. Notes on Financial Instruments(1) Matters concerning Status of Financial Instruments
The Taiheiyo Cement Group limits its fund management activities to short-term deposits, etc., and raises
funds principally by bank borrowings and corporate bonds. It performs derivative transactions for the purposeof averting risks due to future exchange-rate, interest-rate, and raw materials and fuel price fluctuations anddoes not perform speculative transactions.
While notes and accounts receivable-trade and electronically recorded monetary claims-operating, which areoperating receivables, are exposed to credit risk in relation to customers, each responsible department
periodically identifies the financial position, etc. of the counterparties and manages the due date andoutstanding balance with respect to each counterparty, in an effort to identify and reduce collectibility
concerns in the early stages. In addition, operating receivables denominated in foreign currencies related toexport transactions are exposed to exchange rate fluctuation risks. Investment securities are primarily sharesof companies with which the Company has a business relationship, and are exposed to the risk of market
price fluctuations.
Notes and accounts payable-trade and electronically recorded obligations-operating, which are operating
payables, have payment due dates within one year. For a portion of raw materials and fuel procurement,
derivative transactions (foreign exchange contracts, etc.) are used as hedging methods to limit risk of
exchange and price fluctuations of raw materials and fuel. Among borrowings, short-term borrowings aremainly funds raised in connection with business transactions, and long-term borrowings and bonds payable
are principally funds raised for the purpose of making capital investments. Some long-term borrowings havefinancial covenants and may influence liquidity risks regarding fund raising activities. Borrowings withvariable interest rates are exposed to interest rate fluctuation risk; however, to avert the risk of fluctuations ofinterest payable and fix interest expenses for some long-term borrowings, derivatives (interest rate swap
transactions) are used as hedging instruments on a contract-by-contract basis. Additionally, borrowings inforeign currencies are exposed to foreign exchange risk, but of these, for a portion of long-term borrowings,
derivative transactions (currency swap transactions) are used as a hedging method to avoid foreign currency
fluctuation risk.
(2) Matters concerning Market Value, etc. of Financial Instruments and Market Value Information by Level
within the Market Value Hierarchy
The consolidated balance sheet amount and market value of financial instruments and the difference between
the two at March 31, 2024 (i.e., end of the consolidated fiscal year under review) are shown in the following
table. Shares, etc. without market price (consolidated balance sheet amount: ¥51,935 million) are not included
in investment securities. In addition, cash and deposits, notes and accounts receivable-trade, electronically17(Translation)
recorded monetary claims-operating, notes and accounts payable-trade, electronically recorded obligationsoperating, and short-term borrowings are settled in a short period of time and their market value is more orless the same as carrying value market value of financial instruments, therefore the notes thereof are omitted.
Market value of financial instruments are categorized into the following three levels according to theobservability and materiality of the input used for calculation of market value.
Level 1 market value: Market value calculated based on quoted market price (unadjusted) of the same asset
or liability in active markets
Level 2 market value: Market value calculated using directly or indirectly observable inputs other than inputsof Level 1
Level 3 market value: Market value calculated using material unobservable inputs
In the case where multiple inputs that have material impact on the calculation of market value are used, among
the levels of each input, the financial instrument is categorized into the level that is least prioritized whencalculating market value.
(i) Financial assets and financial liabilities recorded in market value in the consolidated balance sheet(Unit: Millions of yen)
Market value

Category

Level 1

Level 2

Level 3

Total

Investment securities
-

-

-

-

Available-for-sale securities

35,834359-

36,194

Total assets

35,834359-

36,194

Derivative transactions*

-

3,557

1,545

5,102

Shares of affiliates* Net receivables and payables arising from derivative transactions are shown in net amount, and net payables
are presented in parentheses.
(ii) Financial assets and financial liabilities not recorded in market value in the consolidated balance sheet(Unit: Millions of yen)
Market value
Category

Level 1

Level 2

Consolidated

Level 3balance sheet

Total

Difference

amountInvestment securities
Shares of affiliates

27,949--27,94944,183(16,234)

Available-for-sale

-

-

-

-

-

-

27,949--27,94944,183(16,234)

Bonds payable-

68,405-68,40570,000(1,594)Long-term borrowings-

215,036-

215,036

216,932(1,895)

Total liabilities-

283,442-

283,442286,932(3,489)securities
Total assets18

(Translation)(Note) Details of valuation method used in calculation of market value and inputs used in calculation ofmarket value
Investment securities
For listed stocks, the market value shall be marked at the closing price or the closing quote at the main
stock exchange, and it is categorized as Level 1. For other investment securities, when only observable
inputs are used in the calculation, or when no material impact occurred from using unobservable inputs
in the calculation, it will be categorized as Level 2.
Bonds payable
The calculation method involves discounting the sum of the principal and interest by an interest ratethat takes into account the credit risk and is categorized as Level 2. The presentation of market valueof bonds payable includes the current portion of bonds payable.
Long-term borrowings
The calculation method involves discounting the sum of the principal and interest by the interest ratethat is expected to be applied if a similar new loan is taken out. A portion of long-term borrowings are
subject to appropriated treatment for currency swaps and exceptional treatment for interest rate swaps,
and the calculation method involves discounting the sum of the principal, which is an aggregate of thecurrency swap and interest rate swap, with a reasonably-estimated interest rate that would be applied if
a similar loan is taken out, with all long-term borrowings categorized as Level 2. The presentation ofmarket value of long-term borrowings includes the current portion of long-term borrowings that ispresented as short-term borrowings.
Derivative transactions
Those categorized as Level 2 are interest rate swaps and forward exchange, etc., of which their market
value is calculated by an appropriate valuation method based on observable inputs.
Those categorized as Level 3 are option transactions for the acquisition of non-current assets and are
calculated based on the most recent information available from the counterparty company or third
parties, taking into account the possibility of acquiring non-current assets in the company. A significant
unobservable input in the calculation is the possibility of non-current assets.
8. Notes on Real Estate for Rent, etc.
(1) Matters concerning status of real estate for rent, etc.
The Company and some of its consolidated subsidiaries have plants, warehouses (including land), etc. forlease purposes in Tokyo and other regions.
(2) Matters concerning market value of real estate for rent, etc.
(Unit: Millions of yen)
Consolidated balance sheet amountMarket value

51,179124,687(Notes) 1. Consolidated balance sheet amount equals the acquisition cost minus accumulated depreciation andaccumulated impairment loss.
2. The market value of major properties as at the end of the consolidated fiscal year under review is the19

(Translation)amount based on a real estate appraisal conducted by an outside real estate appraiser, whereas themarket value of other properties is a certain appraisal value or the amount calculated in-house basedon indicators deemed to properly reflect the market price. However, if there are no significant changes
in a certain level of valuation amounts or indices which are believed to accurately reflect market
values from the most recent evaluation, amounts utilizing these valuations and indices are applied.

9. Notes on Per Share Information
Net assets per share:
Profit per share:¥4,872.94¥371.09

10. Notes on Significant Subsequent Events(1) Cancellation of treasury stock
At the Board of Directors meeting held on May 14, 2024, a resolution was passed to cancel treasury stock
pursuant to Article 178 of the Companies Act.
1. Class of shares to be cancelled

Common stock of the Company

2. Number of shares to be cancelled

3,793,500 shares(3.11% of the total issued shares before cancellation)

3. Scheduled date of cancellation

May 31, 2024

11. Notes on Revenue Recognition(1) Breakdown of revenue
The Group runs Cement Business, Mineral Resources Business, Environmental Business, Construction
Materials Business, and Other Business, and net sales to each of the businesses were ¥621,626 million,¥64,378 million, ¥64,503 million, ¥72,230 million, and ¥63,536 million. These amounts are net sales
against external customers.
Within net sales, revenue generated from contracts with customers was ¥879,837 million.
(2) Outstanding contract amountThe balance of receivables from contracts with customers, contract assets, and contract liabilities at theend of the consolidated fiscal year under review are as follows.
(Unit: Millions of yen)
Receivables from contracts with customers¥204,848

Notes receivable–trade¥22,029

Accounts receivable-trade¥144,083

Electronically recorded monetary claims-operating¥38,735

Contract assets¥1,627

Contract liabilities¥4,350(3) Transaction price allocated to remaining performance obligations
The transaction price allocated to performance obligations not yet satisfied (or, partially not yet satisfied)at the end of the consolidated fiscal year under review was ¥12,017 million. Such performance obligations
20

(Translation)
consist of mainly construction contracts and system development contracts that take more than one year
to complete such long-term performance obligations.
12. Other Notes(Notes on Impairment Loss)
The Company’s assets are grouped together based on segments by business type, except for assets forrent, important idle properties and assets scheduled for disposal, which are grouped together by treating
individual property as a single unit.
In the case of consolidated subsidiaries, in principle, a business company is deemed as a single asset group,
and in the case of important companies, assets are grouped together based on management accountingclassifications, etc., except for important assets for rent, idle properties and assets scheduled for disposal,
which are grouped together by treating individual property as a single unit.
As a result, the carrying value was reduced to the recoverable amount with respect to assets for businessand assets for rent with reduced profitability due to a substantial fall in the market value of land, etc. andidle properties that are not expected to be used in the future as follows, and such reduction in the amountof ¥1,333 million was recorded as impairment losses under extraordinary losses.
(Unit: Millions of yen)
PurposeAssets for business
Assets for rent
Idle properties

LocationType

Impairment loss

Kumagaya City, Saitama Buildings and structures, machinery,
Prefecture
equipment and vehicles, etc.
Kameyama City, Mie
Land
Prefecture
Ichihara City, Chiba
Buildings and structures, machinery,
Prefecture, etc.
equipment and vehicles, land, etc.

30
377
925

* Breakdown of impairment loss by purpose(Unit: Millions of yen)
PurposeAssets for business
Assets for rent
Idle properties

Breakdown
Buildings and structures: 21, Machinery, equipment and vehicles: 7, Other: 1,
Total: 30
Land: 377, Total: 377
Buildings and structures: 106, Machinery, equipment and vehicles: 69, Land: 666,
Other: 83, Total: 925

Recoverable amount is measured at the higher of net selling price or value in use.
If it is measured at net selling price, it is calculated by making reasonable adjustments based on realestate appraisal standards, etc.
If it is measured at value in use, it is calculated by discounting future cash flows by 7.92%.

21

(Translation)

Non-consolidated Statements of Changes in Net Assets(April 1, 2023 - March 31, 2024)(Unit: Millions of yen)SharecapitalBalance at beginning of period

86,174

Shareholders’ equity
Retained
Capital surplus
earnings
Legal
Other
Total
Other retained
capitalcapitalcapitalearnings
surplussurplussurplus(Note)
42,21542,215
133,331

Valuation and translation adjustments
Treasuryshares(13,216)

Total
shareholders’equityValuation difference
on available-for-salesecurities

Total valuation andtranslation
adjustments

248,504

8,367

8,367

Total net
assets

256,871

Changes during period
Dividends of surplus(8,227)(8,227)(8,227)

Profit33,44333,44333,443Purchase of treasury shares(5,021)(5,021)(5,021)

Disposal of treasury shares

(1)

(1)

75

74

74

Cancellation of treasury shares
Increase (decrease) by share exchanges

(9)

(9)

736

726

726

11

11

-

-

Transfer from retained earnings to capitalsurplus
Net changes in items other thanshareholders' equity
Total changes during period
Balance at end of period

(11)

1,998

1,998

1,998

-

-

-

-

25,203(4,209)20,994

1,998

1,998

22,99386,17442,215-42,215

158,535(17,425)

269,499

10,365

10,365279,86422

(Translation)(Note) The breakdown of other retained earnings is as follows.

(Unit: Millions of yen)
Other retained earnings
Reserve for tax basis
Retained earnings brought
adjustments of non-current
forwardassetsReserve for mineprospecting
Balance at beginning of period

424

14,868

Total other retained
earnings

118,038

133,331-

Changes during period
Reversal of reserve for mine prospecting

(79)

79

Provision of reserve for mine prospecting

108

(108)

Reversal of reserve for tax basis adjustments of non-current
assets

(241)

241

-

Dividends of surplus(8,227)(8,227)

Profit33,44333,443(11)(11)

Transfer from retained earnings to capital surplus
Total changes during period

28

(241)

25,41725,203

Balance at end of period

453

14,626

143,455

158,535

23

(Translation)

Notes to the Non-Consolidated Financial Statements
1. Notes on Matters concerning Significant Accounting Policies(1) Standards and methods for valuation of assets(i) Standards and methods for valuation of securities
a. Shares of subsidiaries and shares of affiliates
Stated at cost, based on the moving-average method.
b. Available-for-sale securitiesa) Securities other than shares, etc. without market price:
Such securities are stated at market value. (Valuation differences are all charged/credited directly to
net assets, and the cost of selling the securities is determined by the moving-average method.)b) Shares, etc. without market price:
Stated at cost, based on the moving-average method.
In addition, if net asset value has significantly decreased, the Company records loss on valuation,
except when substantiated by proof of sufficient recoverability.
(ii) Method for valuation of derivatives
Stated at market value.
(iii) Standards and methods for valuation of inventories
Stated at cost, based on the moving average method (subject to write-down due to diminishedprofitability.)(2) Depreciation method for non-current assets(i) Property, plant and equipment (excluding structures for mining purposes, land providing raw materials
and leased assets)
Declining balance method, except for buildings (excluding accompanying facilities) purchased on andafter April 1, 1998 and accompanying facilities and structures purchased on and after April 1, 2016,
which are computed based on the straight-line method.
(ii) Property, plant and equipment (structures for mining purposes, raw materials land)
Unit of production method(iii) Intangible assets (excluding mining rights and software)
Straight-line method(iv) Intangible assets (mining rights)
Unit of production method(v) Intangible assets (software)
Amortized by the straight-line method over its useful life assuming in-house use (5 years).
(vi) Leased assets (leased assets in finance lease transactions that do not transfer ownership)
Leased assets are depreciated by the straight-line method that assumes their lease periods are useful lives
and residual values are zero (or if there is a residual value guarantee, the guaranteed residual value).

24

(Translation)(3) Accounting standards for provisions(i) Allowance for doubtful accounts
To prepare against losses from notes and accounts receivable-trade, loans receivable, etc. turning into
bad debt, allowance for doubtful accounts is provided for at the estimated uncollectible amount, whichis calculated based on the historical credit loss ratio with respect to ordinary receivables, and inconsideration of collectibility on a case-by-case basis with respect to specified receivables such as
doubtful accounts.
(ii) Provision for bonuses
To prepare for the payment of bonuses to employees, the estimated payable amount is recorded.
(iii) Provision for retirement benefits
To prepare for the payment of retirement benefits to employees, provision for retirement benefits isrecorded in the amount deemed to have accrued at the end of the fiscal year under review based on the
projected amount of retirement benefit obligation and plan assets at the end of the financial year underreview.
Actuarial gains and losses and prior service cost are amortized in equal amounts as expenses by thestraight-line method over a certain number of years (10 years) within the average remaining years ofservice of employees at the time of accrual in each period, commencing in the period following theperiod of accrual in the case of the former and in the period of accrual in the case of the latter.
As plan assets to be recognized at the end of the fiscal year under review exceeds the amount of theretirement benefit obligation minus actuarial gains and losses etc., the amount of such excess isrecorded as prepaid pension costs.
Also, the Company established a retirement benefit trust by contributing some shares from its holdings.
(iv) Provision for loss on guarantees
To prepare against losses from debt guarantees to subsidiaries and affiliates, the estimated amount oflosses at the end of the fiscal year under review is recorded in consideration of the financial position,etc. of those provided with such guarantees.
(v) Provision for loss on business of subsidiaries and affiliates
To prepare against losses from businesses of subsidiaries and affiliates, the estimated amount of losses
is recorded in consideration of the financial position, etc. of such companies.
(4) Accounting standards for revenue and expenses recognition“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29), etc. have been applied that theCompany recognizes revenue when promised goods or services are transferred to a customer, in an amountthat reflects the consideration to which the Company expects to be entitled to in exchange for those goods
or services.
(5) Accounting method for retirement benefits
In the non-consolidated financial statements, the treatment of unrecognized actuarial gains and losses andunrecognized prior service cost in the non-consolidated balance sheets is different from the treatment in
the consolidated financial statements. In the non-consolidated balance sheets, the amount of retirement
benefit obligation after making adjustments for unrecognized actuarial gains and losses and unrecognized25

(Translation)prior service costs, less the amount of plan assets, is recorded as prepaid pension costs.
(6) Amounts shown in these non-consolidated financial statements are rounded down to the nearest million
yen.
2. Changes in Accounting Policy
Not applicable.
3. Changes in Presentation
Not applicable.
4. Notes on Accounting EstimatesAmong the items recorded in the non-consolidated financial statements for the fiscal year under review basedon accounting estimates, the items that may have a significant impact on the non-consolidated financial
statements for the next fiscal year are as follows.
Impairment of non-current assets(i) Amount recorded in the non-consolidated financial statements for the fiscal year under review(Unit: Millions of yen)
Fiscal year underreview
Non-current assets

576,296

Non-current assets in the Company’s cement business

119,911

Property, plant and equipment

115,608

Intangible assets etc.

4,303(ii) Information contributing to the understanding of the contents of accounting estimates
Omitted as already presented “4. Notes on Accounting Estimates” in the notes to the consolidated
financial statements.

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(Translation)
5. Notes to the Non-consolidated Balance Sheets(1) Assets pledged as collateral and secured liabilities
Not applicable(2) Accumulated depreciation of property, plant and equipment(3) Outstanding balance of guarantee obligations¥697,561 million¥8,479 million(4) Notes maturing at the end of the period
Accounting treatment for notes maturing at the end of the period
is settled on the clearing day.
Since the last day of the fiscal year was a holiday for financial
institutions, the following notes maturing at the end of the period
are included in the balance at the end of the fiscal year.
Notes receivable-trade¥3,039 million

Electronically recorded monetary claims-operating¥6,425 million

Electronically recorded obligations-operating¥3,044 million

Electronically recorded obligations-non-operating¥364 million(5) Monetary claims and obligations to subsidiaries and affiliates
Short-term monetary claims¥42,389 million

Long-term monetary claims¥15,421 million

Short-term monetary obligations¥33,041 million

Long-term monetary obligations¥2,401 million

6. Notes to the Non-consolidated Statements of Income
Amount of transactions with subsidiaries and affiliates
Amount of business transactions
Sales¥118,060 million

Purchases¥104,059 million

Amount of non-business transactions¥30,074 million

7. Notes to the Non-consolidated Statements of Changes in Net Assets
Class and number of shares of treasury stock as at the end of the fiscal year under review:
Common stock

6,129,529 shares

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(Translation)
8. Notes on Tax-effect Accounting
Breakdown of major components of deferred tax assets and deferred tax liabilities(i) Deferred tax assets
Allowance for doubtful accounts¥3,913 million

Provision for bonuses¥626 million

Provision for retirement benefits¥7,508 million

Loss on valuation of shares, etc. of subsidiaries and affiliates¥12,500 million

Loss on valuation of golf memberships¥143 million

Depreciation and amortization¥138 million

Impairment loss

¥5,675 million

Business structure reform expenses¥2,463 million

Losses carried forward¥13,748 million

Other¥4,945 million

Deferred tax assets - Subtotal¥51,662 million

Valuation allowance¥(48,308) million

Deferred tax assets - Total¥3,354 million(ii) Deferred tax liabilities
Reserve for mine prospecting¥(199) million

Reserve for tax basis adjustments of non-current assets¥(6,455) million

Exchange gains (losses), etc. in equity transactions¥(526) million

Valuation difference on available-for-sale securities¥(4,585) million

Gain on contribution of securities to retirement benefit trust¥(3,307) million

Other¥(628) million

Deferred tax liabilities - Total¥(15,703) million

Net deferred tax liabilities¥(12,349) million

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(Translation)
9. Notes on Transactions with Related Parties(Unit: Millions of yen)
Attribute

Subsidiary

Subsidiary

Subsidiary

Name of company,etc.
Kiyosumi Golf Club
Co., Ltd.
Taiheiyo Cement
Philippines, Inc.

Percentage of voting rights,
etc. of related party held by
the Company (or vice versa)
Directly holds 100%

Relationship with

Description ofTransaction

related party

transaction

amountPayment of deposits

Payment of deposits

Dispatch of officer(Note 1)－

Account“Other” in Investments
and other assets (Note 2)

Closingbalance
13,304

Acceptance of capital
Directly holds 100%

Dispatch of officer

increase

11,864－－(Note 3)

TC Trading Co.,

Directly holds 69.3%

Ltd.

Indirectly holds 5.8%

Sales of theSales of the Company’s

Company’s products

products

Dispatch of officer(Note 4)24,729Accounts receivabletrade

6,308

Terms of transactions, policies for determining terms of transactions, etc.
(Note 1) No interest is charged for lending funds, etc. to this company.
(Note 2) For loans receivable, etc. from this company, allowance for doubtful accounts totaling ¥10,704 million is recorded.
(Note 3) Capital increase by allotment of shares to existing stockholders. Additionally, the transaction amount includes ¥3,182 million of incomplete stock issuances for the fiscal
year.
(Note 4) The terms of sales of the Company’s products are determined by referring to market prices, etc.

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(Translation)
10. Notes on Per Share Information
Net assets per share:
Profit per share:¥2,415.63¥286.08

11. Notes on Significant Subsequent Events(1) Cancellation of treasury stock
At the Board of Directors meeting held on May 14, 2024, a resolution was passed to cancel treasury stock
pursuant to the provisions of Article 178 of the Companies Act. For details, please refer to “10. Notes on
Significant Subsequent Events” in the notes to consolidated financial statements.
12. Notes on Revenue Recognition
Information that is the foundation to understand revenue generated from contracts with customers is alreadypresented in “11. Notes on Revenue Recognition” in the notes to the consolidated financial statements, thus
omitted.

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