Annual Securities Report
For the 78th business term (April 1, 2023 to March 31, 2024)
Filed pursuant to Article 24-1 of the Financial Instruments and Exchange Act of Japan

388 Ohkura, Ranzan-machi,, Hiki-gun, Saitama 355-0222, JapanTAIYO HOLDINGS CO., LTD.

(E00913)-1-

Contents
Filing Notes

Page

Part I About Taiyo Holdings and the Taiyo Group ........................................................................................................... 4I.

Overview of Taiyo Holdings and the Taiyo Group .............................................................................................. 4
1. Key financial data ........................................................................................................................................ 4
2. Our history ................................................................................................................................................... 7
3. Our businesses .............................................................................................................................................. 9
4. Our associates............................................................................................................................................. 12
5. Our employees ........................................................................................................................................... 15
II. Trends and Outlooks ........................................................................................................................................... 17
1. Policies, business climate, challenges ........................................................................................................ 17
2. Sustainability approach and initiatives ....................................................................................................... 21
3. Business risks ............................................................................................................................................. 31
4. Financial position, operating results, cash flows ........................................................................................ 33
5. Key agreements .......................................................................................................................................... 39
6. Research & development ........................................................................................................................... 40
III. Our Facilities ...................................................................................................................................................... 44
1. Capital investment overview....................................................................................................................... 44
2. Key facilities .............................................................................................................................................. 44
3. Capital investment plans ............................................................................................................................ 48
IV. Non-consolidated (Taiyo Holdings Co., Ltd.) .................................................................................................... 49
1. Share information ....................................................................................................................................... 49(1) Number of shares .................................................................................................................................. 49(2) Stock options ........................................................................................................................................ 49(3) Convertible bonds with equity purchase warrants ................................................................................ 51(4) Outstanding shares and share capital .................................................................................................... 51(5) Share ownership ................................................................................................................................... 52(6) Major shareholders ............................................................................................................................... 53(7) Voting rights ......................................................................................................................................... 54(8) Employee stock ownership ................................................................................................................... 55
2. Treasury share purchases ........................................................................................................................... 56
3. Shareholder returns .................................................................................................................................... 58
4. Corporate governance ................................................................................................................................ 59(1) Outline of corporate governance system .............................................................................................. 59(2) Corporate officers ................................................................................................................................. 67(3) Auditing and supervision ...................................................................................................................... 73(4) Remuneration for corporate officers ..................................................................................................... 76(5) Shareholdings ....................................................................................................................................... 91
V. Financial Information ......................................................................................................................................... 93
1. Consolidated financial statements, other consolidated financial information ............................................ 94(1) Consolidated financial statements ........................................................................................................ 94(2) Other ................................................................................................................................................... 140
2. Financial statements, other financial information .................................................................................... 141(1) Financial statements ........................................................................................................................... 141(2) Main assets and liabilities ................................................................................................................... 153(3) Other ................................................................................................................................................... 153
VI. How Taiyo Holdings’ (the filing company’s) Stocks are Administered ........................................................... 154
VII. Referential Information about Taiyo Holdings (the filing company) ............................................................... 155
1. Parent company ........................................................................................................................................ 155
2. Other referential information.................................................................................................................... 155
Part II Taiyo Holdings’ (filing company’s) Guarantors ................................................................................................. 156-2-

Filing Notes
Document filed:Annual Securities Report

Applicable law:

Article 24-1 of the Financial Instruments and Exchange Act of Japan

Filed with:The Director General of the Kanto Local Finance Bureau

Date filed:

June 17, 2024

Fiscal year:

78th business term (Fiscal year ended March 31, 2024)(April 1, 2023 to March 31, 2024)

Company name in Japanese:

TAIYO HOLDINGS Kabushiki Kaisha

Company name in English:

TAIYO HOLDINGS CO., LTD.

Representative (title):

Eiji Sato (President and CEO)

Address of head office:388 Ohkura, Ranzan-machi, Hiki-gun, Saitama 355-0222, Japan

Contact phone number:(+81) 493 (62) 7777

Contact person (title):

Sayaka Tomioka (Managing Executive Officer, CFO)

Contact address:

16F, Metropolitan Plaza Bldg., 1-11-1 Nishi Ikebukuro, Toshima-ku, Tokyo
171-0021, Japan

Contact phone number:(+81) 3 (5953) 5200

Contact person (title):

Sayaka Tomioka (Managing Executive Officer, CFO)

Document available at:Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabuto-cho, Chuo-ku, Tokyo 103-8220, Japan)-3-

Part I

About Taiyo Holdings and the Taiyo GroupI.

Overview of Taiyo Holdings and the Taiyo Group
1. Key financial data
(1) Consolidated financial data
Business term

74th

75th

76th

77th

78th

Fiscal year ended

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023

Mar. 2024

million yen

70,62780,99197,966

97,338104,775

Ordinary income

"

8,898

13,81918,062

15,462

17,310

Profit attributable to ownersof parent

"

3,749

9,529

11,803

11,405

8,654

Comprehensive income

"

2,499

12,012

15,611

12,494

12,484

Net assets"

69,52376,49785,466

92,739100,398

Total assets"

142,192

179,001

189,273

187,263

212,751

Net assets per shareyen

1,217.11

1,348.42

1,522.11

1,663.25

1,795.14

Basic earnings per share

"

66.01

167.49209.13203.71154.89Diluted earnings per share

"

–

–

–

–

–

Equity ratio

%

48.7

42.5

45.2

49.5

47.2

Return on equity

"

5.4

13.1

14.6

12.8

9.0

Price earnings ratio

times

30.8

18.0

15.5

12.3

21.9

Cash flows from operating
activities

million yen

13,73916,312

18,30822,736

21,224

Cash flows from investing
activities"(45,912)(11,603)(11,258)(13,160)(21,069)

Cash flows from financing
activities"

31,59319,755(11,279)(13,942)

8,954

Cash and cash equivalents at
end of period"

29,11554,30951,15247,08857,664

1,988

2,067

2,137

2,120

2,210

[–]

[–]

[–]

[–]

[272]

Net sales

Number of employees (notincluding average number of
non-fulltime)[Average number of nonfulltime (excluded)]

employees

Notes:
1. Series I Class A Shares and Series II Class A Shares possess the same rights as common shares in regard to the right toreceive dividends of surplus and the right to receive distribution of residual assets. Accordingly, when calculating the net
assets per share and basic earnings per share, we include Class A-I and Class A-II shares in the number of outstanding
shares at period-end as well as in the average number of outstanding shares during the period. The provisions on Series I
Class A Shares and Series II Class A Shares were abolished after the Articles of Incorporation were revised on June 19,
2021.
2. A 2-for-1 stock split was executed on October 1, 2021. The net assets per share and basic earnings per share have been
calculated based on the assumption that the stock split was executed at the start of the 74th business term (fiscal year
ended March 31, 2020).
3. We have not disclosed diluted earnings per share because there were no dilutive shares.
4. We omitted the average number of non-fulltime or temporary employees during the 74th (fiscal year ended March 31,2020) to the 77th (fiscal year ended March 31, 2023) business terms because such employees accounted for less than 10%
of total employees.
5. We have applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and related
guidance from the start of the 76th business term (fiscal year ended March 31, 2022). Accordingly, the results for the main
management indicators are in accordance with the standard from fiscal year ended March 31, 2022 onward.

-4-

(2) Non-consolidated financial data (Taiyo Holdings Co., Ltd.)Business term

74th

75th

76th

77th

78th

Fiscal year ended

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023

Mar. 2024

Operating revenue

million yen

12,8997,830

11,747

14,016

15,463

Ordinary income

"

8,261

2,510

5,002

6,551

6,894

Profit

"

4,935

4,116

5,468

6,362

6,058

Share capital

"

9,428

9,499

9,612

9,761

9,903

57,939,294

57,997,004

58,083,128

58,185,501

58,291,559

Total issued shares

SharesNet assets

million yen

53,54552,85352,71553,96755,662

Total assets"

110,546

134,874

128,674

116,604

132,686

Net assets per shareyen

941.48936.04938.85967.91995.29Dividend per share

"

65.10

80.10

69.55

89.00

80.00

(Interim dividend per share)(")(32.55)(32.55)(32.55)(37.00)(38.00)

Basic earnings per share

"

86.87

72.34

96.89

113.64108.44

Diluted earnings per share

"

–

–

–

–

–

Equity ratio

%

48.4

39.2

41.0

46.3

41.9

Return on equity

"

9.3

7.7

10.4

11.9

11.1

Price earnings ratio

times

23.4

41.7

33.5

22.0

31.3

Dividend payout ratio

%

75.0

110.7

71.8

78.3

73.8

112

133

154

143

156

[–]

[–]

[–]

[–]

[–]

Number of employees (notincluding average number of
non-fulltime)

employees[Average number of nonfulltime (excluded)]
Total shareholder return

%

115.2

173.4

190.1

153.8

207.1

(Relative to dividend
included TOPIX data)%(90.5)(128.6)(131.2)(138.8)(196.2)Highest share price

yen

5,220

6,690

3,600

3,315

3,440

2,178

2,328

(6,300)
Lowest share price

yen

3,015

3,690

2,613
(4,820)Notes:
1. Series I Class A Shares and Series II Class A Shares possess the same rights as common shares in regard to the right toreceive dividends of surplus and the right to receive distribution of residual assets. Accordingly, when calculating the net
assets per share and basic earnings per share, we include Class A-I and Class A-II shares in the number of outstanding
shares at period-end as well as in the average number of outstanding shares during the period. However, the provisions on
Series I Class A Shares and Series II Class A Shares were abolished after the Articles of Incorporation were revised onJune 19, 2021.
2. A 2-for-1 stock split was executed on October 1, 2021. The net assets per share and basic earnings per share have been
calculated based on the assumption that the stock split was executed at the start of the 74th business term (fiscal year
ended March 31, 2020). The figures for dividend per share and interim dividend per share reflect the impact of the stock
split.
3. We have not disclosed diluted earnings per share because there were no dilutive shares.
4. We have omitted the average number of non-fulltime or temporary employees because such employees accounted for lessthan 10% of total employees.

-5-5. Number of employees indicates the number of full-time employees (this excludes employees that we second to othercompanies, but includes employees that other companies second to us).
6. The dividend per share for the 75th business term (fiscal year ended March 31, 2021) includes a 15-yen commemorative
dividend (reflecting the impact of the stock split) to celebrate 20 years of being listed on the First Section of the Tokyo
Stock Exchange (TSE).
7. The dividend per share for the 77th business term (fiscal year ended March 31, 2023) includes a 15-yen commemorative
dividend to celebrate our 70th anniversary.
8. Total shareholder return indicates the dividend per share reflecting the impact of the stock split.
9. The figures for highest share price and lowest share price are the highest and lowest prices on the first Section of the TSE
up to April 3, 2022 and on the TSE Prime Market from April 4, 2022 onward.
10. A 2-for-1 stock split was conducted on October 1, 2021. For the 76th business term (fiscal year ended March 31, 2022),
highest share price and lowest share price indicate the price after the forfeiture of rights resulting from the stock split. The
highest/lowest share prices before loss of rights are indicated in parentheses.
11. We have applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and related
guidance from the start of the 76th business term (fiscal year ended March 31, 2022). Accordingly, the results for the main
management indicators are in accordance with the standard from fiscal year ended March 31, 2022 onward.

-6-

2. Our history
September 1953
August 1970
May 1973
March 1982
June 1984
September 1988
September 1990
December 1990
March 1992
November 1993
September 1996
January 1999

August 1999
January 2001
April 2001
December 2001
September 2010
October 2010

May 2013
December 2014
April 2015
June 2015

October 2015
January 2017
August 2017
January 2018
April 2018

July 2018

Taiyo Ink Mfg. Co., Ltd. (our forerunner) was established in Minato-ku, Tokyo, as a printing ink
manufacturer and marketer
Launched sales of printed circuit board materials
Developed and launched sales of an epoxy resin-based and thermally curable single-component
solder resist ink
Established Ranzan Plant (now Ranzan Facility) in Ranzan-machi, Hiki-gun, Saitama
Developed and launched sales of a liquid photoimageable solder resist ink
Established Taiyo Ink Mfg. Co., (Korea) Ltd., as a manufacturing and sales company for printed
circuit board materials in South Korea.
Launched initial public offering in over-the-counter market
Established Taiyo America, Inc., a sales company in the U.S., to sell printed circuit board materials
and other materials (made a manufacturing and sales company in February 1995)
Relocated head office to Nerima-ku, Tokyo
Registered basic patent for a liquid photo-imageable solder resist ink in Japan
Established Taiwan Taiyo Ink Co., Ltd., as a manufacturing and sales subsidiary for printed circuitboard materials in Taiwan
Established Taiyo Ink International (Singapore) Pte Ltd as a sales subsidiary for printed circuitboard materials and other materials in Singapore.
Established Taiyo Ink International (HK) Limited as a sales subsidiary for printed circuit board
materials in China
Established Taiyo Japan Co., Ltd. (now Taiyo Ink Mfg. Co., Ltd.) as a manufacturing and sales
subsidiary for printed circuit board materials in Japan
Listed on the First Section of Tokyo Stock Exchange (TSE)Opened production base, Ranzan-Kitayama Facility, in Ranzan-machi, Hiki-gun, Saitama
Established Taiyo Ink (Suzhou) Co., Ltd. as a manufacturing and sales subsidiary for printed
circuit board materials in China
Established Taiyo Ink Trading (Shenzhen) Co., Ltd. as a sales subsidiary for printed circuit boards
in China
Adopted holding company structure, changing the corporate name to Taiyo Holdings Co., Ltd.
Transferred rights and responsibilities over domestic businesses to Taiyo Japan Co., Ltd., renaming
the subsidiary Taiyo Ink Mfg. Co., Ltd.
Acquired Taiwanese company Onstatic Technology Co., Ltd. as a consolidated manufacturing andsales subsidiary for printed circuit board materials in Taiwan
Established Taiyo Green Energy Co., Ltd. as a subsidiary mainly for power generation using
natural energy in Japan
Taiyo Ink Mfg. Co., Ltd. established Taiyo Ink Products Co., Ltd., as a sales subsidiary in South
Korea
Acquired Japanese company Chugai Kasei Co., Ltd. (now Taiyo Fine Chemicals Co., Ltd.) as aconsolidated manufacturing and sales subsidiary for dyes, pigments, pharmaceuticals and inks inJapan
Taiyo Ink Mfg. Co., Ltd. opened the Kitakyushu Facility, a production base (its second) in
Kitakyushu, Fukuoka
Entered a capital and business alliance with DIC Corporation
Established Taiyo Pharma Co., Ltd. as an ethical pharmaceuticals manufacturing and sales
subsidiary
Relocated head office to Toshima-ku, Tokyo
Established Taiyo Trading (Thailand) Co., Ltd. as a sales company for printed circuit board
materials and other materials in Thailand
Acquired Japanese company Micro Network Technologies Corp. (now funlead corp.) as aconsolidated subsidiary for systems engineering services in Japan
Made Thou-Management Corporation, a system engineering services company in Japan, aconsolidated subsidiary (subsumed by Micro Network Technologies Corp. (now funlead corp.) in
October 2019)-7-August 2019

October 2019
May 2020
June 2020
April 2022
July 2022

March 2024
April 2024
June 2024

Acquired Mega Solar 23, a special-purpose subsidiary that operates Odaike Floating Solar Power
Plant, a consolidated subsidiary (subsumed by Taiyo Green Energy Co., Ltd. in November 2022)
Acquired Mega Solar 28, a special-purpose subsidiary that operates Mimayaike Floating Solar
Power Plant, a consolidated subsidiary (subsumed by Taiyo Green Energy Co., Ltd. in November
2022)
Acquired Taiyo Pharma Tech Co., Ltd., whose core business is contract manufacturing of ethicalpharmaceuticals, as a consolidated subsidiary
Established Onstatic New Material (Jiangxi) Co., Ltd. as a sales subsidiary for printed circuitboard materials in China
Established Taiyo Ink Vietnam Co., Ltd. as a manufacturing and sales subsidiary for printed circuitboard materials in Vietnam
Following application, listed on the TSE’s new Prime Market
Ranzan Shokudo Co., Ltd., a company which operates cafeterias in Japan, spun off the cafeteria
business of its subsidiary, Taiyo Green Energy Co., Ltd., and acquired it as a consolidated
subsidiary
Acquired apex corp., a system development company in Japan, as a consolidated subsidiary
Opened InnoValley technology development center on the premises of the Ranzan Facility
Transitioned to a company with an Audit & Supervisory Committee-8-3. Our businesses(Glossary)
This document uses the following abbreviations and terminology.
Terminology
PCB
Solder resist
PKG
DF

Meaning
Printed circuit board
Also known as solder mask
Semiconductor package
Dry film

Our group is comprised of Taiyo Holdings Co., Ltd. (the filing company, “the Company”), 29
subsidiaries (25 of which are consolidated subsidiaries), one affiliated company, and one other associate. We
primarily engage in the Electronics business and the Medical and Pharmaceuticals business. In the Electronics
business, we develop, manufacture, purchase, and sell chemicals for PCBs and other electronic components. In
the Medical and Pharmaceuticals business, we develop, manufacture, sell, and provide contract manufacturingservices for ethical pharmaceuticals.
In our Electronics business, we provide PCB materials to the PCB production department of electronics
manufacturers as well as to manufacturers specializing in PCBs. The PCBs play vital roles in many home andcommercial digital appliances. Examples include PCs, smartphones, servers, and other IT devices. They arealso used in audiovisual appliances such as liquid crystal display TVs and automotive parts such as electric
control units (ECUs).
Our Medical and Pharmaceuticals business kicked off in January 2018, when Taiyo Pharma acquired
manufacturing and marketing rights/authorizations for 13 long listed pharmaceuticals. We currently provide 19
long listed pharmaceutical products, including one on which we acquired the manufacturing and marketingrights in April 2023. In October 2019, our subsidiary Taiyo Pharma Tech started contract manufacturing of
ethical pharmaceuticals after inheriting a pharmaceutical manufacturing plant from a corporate spin-off.
The table below lists our business segments and the relevant our subsidiaries and affiliates. The segment
titles “Electronics” and “Medical and Pharmaceuticals” match the titles in II. Trends and Outlooks, 4. Financial
position, operating results, cash flows, (1) Performance overview, 2) Operating results, and in V. Financial
Information, 1. Consolidated financial statements, other consolidated financial information, (1) Consolidated
financial statements: Notes.
We are a listed company as defined in Article 49-2 of the Cabinet Office Ordinance on Restrictions on
Securities Transactions. When determining “minor criteria” facts (material facts under insider trading
regulations), we use consolidated rather than non-consolidated figures.

-9-Segment

Business operations

Main company or companies–(*Note 1)• Sets The Taiyo Group’s broad strategic
direction• Provides management guidance tosubsidiaries• Researches and develops chemicals forelectronic components

Japan

Filing company (Taiyo Holdings)

Electronics

Develops, manufactures, stocks, andmarkets chemicals for PCBs and otherelectronic components

Japan

Taiyo Ink Mfg. Co., Ltd.

Stocks and markets chemicals ofaffiliates and associates for PCBs andother electronic components

Overseas Taiyo Ink International (HK) Limited,
Taiyo Ink Trading (Shenzhen) Co., Ltd.,
Onstatic Ink (Shenzhen) Co., Ltd.,
Onstatic Technology Co., Ltd., Taiyo Ink
Products Co., Ltd., Taiyo Ink International(Singapore) Pte Ltd, and Taiyo Trading(Thailand) Co., Ltd.

Manufactures and markets ethicalpharmaceuticals

Japan

Taiyo Pharma Co., Ltd.

Performs contract manufacturing of
ethical pharmaceuticals

Japan

Taiyo Pharma Tech Co., Ltd.

Manufactures and markets dyes,
pigments, pharmaceuticals, and ink

Japan

Taiyo Fine Chemicals Co., Ltd.

Supplies renewable energy, etc.

Japan

Taiyo Green Energy Co., Ltd.

Operates cafeterias, etc.

Japan

Ranzan Shokudo Co., Ltd.

Provides systems engineering servicesJapan

funlead corp.

Develops systems

Japan

apex corp.

Medical andPharmaceuticals

Other(*Note 2)

Overseas Taiyo Ink (Suzhou) Co., Ltd., Onstatic
New Material (Jianxi) Co., Ltd., Taiwan
Taiyo Ink Co., Ltd., Taiyo Ink Co.,
(Korea) Ltd., Taiyo America, Inc., andTaiyo Ink Vietnam Co., Ltd.

Notes:
1. We do not include Taiyo Holdings Co., Ltd. (the filing company) among the reportable segments.
2. These are collectively referred to as ICT and Sustainability business.

- 10 -

This is our organizational chart:- 11 -

4. Our associates(1) Consolidated subsidiaries

Name

Address

Equity(amount
invested incompany)

Main business

Ownership ratio(indirect
ownership ratioin parentheses)(%)

Nature of relationshipTaiyo Ink Mfg.
Co., Ltd.

Ranzan-machi,
Hiki-gun,
Saitama, Japan

Manufactures and
450 million
markets solder resists
yenfor PCBs• We license the company touse our trademarks• We have interlocking
100.0
directorates with the company• We lease real estate to thecompany• We lend to the company

Taiyo Ink
(Suzhou) Co., Ltd.
(*Note 1)

Suzhou, Jiangsu
Province,
China

Manufactures and
30 million
markets solder resists
USD
for PCBs• We license the company touse our trademarks
100.0• We have interlocking
directorates with the company

Onstatic New
Xinyu, Jiangxi
Material (Jiangxi) Province,Co., Ltd. (*Note 2) China

Manufactures and7 million
markets solder resists
USD
for PCBs

100.0 • We have interlocking(100.0)directorates with the company

Guanyin District,Taiwan Taiyo Ink
Taoyuan City,
Co., Ltd. (*Note 1)
TaiwanManufactures and
310 million
markets solder resists
TWD
for PCBs

100.0• We license the company touse our trademarks• We have interlocking
directorates with the company• We license the company touse our trademarks
100.0 • We have interlocking
directorates with the company• We lend to the company

Taiyo Ink Mfg.
Co., (Korea) Ltd.

Ansan-si,Gyeonggi
Province,
South Korea

2,698 Manufactures andmillion markets solder resists
KRW for PCBs

Taiyo America,
Inc.

Carson City,
Nevada,United States

Manufactures and2 million
markets solder resists
USD
for PCBs

100.0• We license the company touse our trademarks• We have interlocking
directorates with the company

Taiyo Ink Vietnam
Co., Ltd

Hanoi,
Vietnam

2,309 Manufactures andmillion markets solder resists
VDN for PCBs

100.0

• We have interlocking
directorates with the company• We lend to the company

Taiyo Ink
International (HK)
Limited (*Note 3)

Hunghom,
Kowloon, Hong
Kong,
China

10 million Markets solder resists
HKD for PCBs

100.0 • We borrow from the company

Taiyo Ink Trading(Shenzhen) Co.,
Ltd.(*Note 4)

Shenzhen,
Guangdong
Province,
China

800
Markets solder resists
thousandfor PCBs
USD

100.0

Onstatic Ink(Shenzhen) Co.,
Ltd. (*Note 2)

Shenzhen,
Guangdong
Province,
China

7 million Markets solder resists
USD for PCBs

100.0 • We have interlocking(100.0)directorates with the company

Onstatic
Technology Co.,
Ltd. (*Note 1)

Yingge District,
New Taipei City,
Taiwan313 million Markets solder resists
TWD for PCBs

100.0

Taiyo Ink Products
Co., Ltd. (*Notes
2 and 5)

Ansan-si,Gyeonggi
Province,
South Korea

100 million Markets solder resists
KRW for PCBs

100.0 • We have interlocking(100.0)directorates with the company

Taiyo Ink
International(Singapore) Pte
LtdSingapore

2 million Markets solder resists
SGD for PCBs

100.0

• We have interlocking
directorates with the company

Taiyo Trading(Thailand) Co.,Ltd.

Bangkok,Thailand11 million Markets solder resists
THB for PCBs

100.0

• We have interlocking
directorates with the company- 12 -• We have interlocking
directorates with the company• We have interlocking
directorates with the company

Name

Address

Equity(amount
invested incompany)

Main business

Ownership ratio(indirect
ownership ratioin parentheses)(%)

Nature of relationshipTaiyo Pharma Co.,
Ltd. (*Note 6)

Marunouchi,
Chiyoda-ku,
Tokyo, Japan

Manufactures and
450 million
markets ethicalyenpharmaceuticals

100.0• We have interlocking
directorates with the company• We lend to the company

Taiyo Pharma
Tech Co., Ltd.
(*Note 7)

Takatsuki-shi,
Osaka, Japan

Performs contract
300 million manufacturing of
yen ethicalpharmaceuticals

100.0• We have interlocking
directorates with the company

Taiyo Fine
Chemicals Co.,
Ltd.

Nihonmatsu-shi,
Fukushima, Japan

Manufactures andmarkets dyes,
49 million
pigments,yenpharmaceuticals, and
ink

100.0

• We have interlocking
directorates with the company• We lend to the company

Taiyo Green
Energy Co., Ltd.

Ranzan-machi,
Hiki-gun,
Saitama, Japan

10 million Supplies renewable
yen energy, etc.

100.0

• We have interlocking
directorates with the company• We lend to the company

Ranzan ShokudoCo., Ltd.

Nishi-Ikebukuro,
Toshima-ku,
Tokyo, Japan

15 million Operates cafeterias,
yen etc.

100.0

funlead corp.

Nishi-Ikebukuro,
Toshima-ku,
Tokyo, Japan80 million Provides systems
yen engineering services

100.0

apex corp.(*Note
2)

Minami-Otsuka,
Toshima-ku,
Tokyo, Japan

21 million
Develops systems
yen

100.0
(100.0)Peace Sea
Investments
Limited (*Notes 1
and 2)

Apia,
Samoa

13 million
Investment
USD

100.0
(100.0)Good AdvanceGroup Limited(*Notes 1 and 2)

Apia,
Samoa

13 million
Investment
USD

100.0
(100.0)

5 million
Investment
USD

99.0
(49.5)

Pegasus Tech
California,
Ventures Company
USA
IV, L.P. (*Note 2)
One othercompany- 13 -• We have interlocking
directorates with the company

Notes:1. The indicated company is a specified subsidiary as defined in the Cabinet Office Ordinance on the Disclosure of Corporate
Affairs.
2. Figures in parentheses indicate the indirect ownership ratio.
3. Sales of Taiyo Ink International (HK) Limited account for more than 10% of the Taiyo Group’s consolidated sales(excluding inter-company sales).
Main financial data
(1) Net sales: 19,484 million yen, (2) Ordinary income: 1,282 million yen, (3) Profit: 675 million yen(4) Net assets: 6,234 million yen, (5) Total assets: 10,471 million yen
4. Sales of Taiyo Ink Trading (Shenzhen) Co., Ltd. account for more than 10% of the Taiyo Group’s consolidated sales(excluding inter-company sales).
Main financial data
(1) Net sales: 11,006 million yen, (2) Ordinary income: 455 million yen, (3) Profit: 338 million yen(4) Net assets: 2,620 million yen, (5) Total assets: 7,013 million yen
5. Sales of Taiyo Ink Products Co., Ltd. account for more than 10% of the Taiyo Group’s consolidated sales (excluding intercompany sales).
Main financial data
(1) Net sales: 11,547 million yen, (2) Ordinary income: 682 million yen, (3) Profit: 542 million yen(4) Net assets: 2,411 million yen, (5) Total assets: 4,359 million yen
6. Sales of Taiyo Pharma Co., Ltd. account for more than 10% of the Taiyo Group’s consolidated sales (excluding intercompany sales).
Main financial data
(1) Net sales: 12,022 million yen, (2) Ordinary income: 89 million yen, (3) Profit: (3,651) million yen(4) Net assets: (1,223) million yen, (5) Total assets: 27,368 million yen
7. Sales of Taiyo Pharma Tech Co., Ltd. account for more than 10% of the Taiyo Group’s consolidated sales (excluding intercompany sales).
Main financial data
(1) Net sales: 17,319 million yen, (2) Ordinary income: 3,724 million yen, (3) Profit: 2,288 million yen(4) Net assets: 13,629 million yen, (5) Total assets: 31,502 million yen(2) Other associateCompany name

DIC Corporation

Address

Itabashi-ku,
Tokyo, Japan

Share capital(Millions ofyen)

Main business

Manufactures andmarkets organic
96,557
pigments andsynthetic resins- 14 -

Equity stake(%)

Nature of relationship• We procure raw materials
from the company

20.08% • We have interlocking
directorates with thecompany

5. Our employees(1) Consolidated (group wide)
As of March 31, 2024

Segment

Number of employees
1,344Electronics

[88]
427

Medical and Pharmaceuticals

[118]
439

Other and trans-segment(*Note 3)

[66]
2,210

Total

[272]

Notes:
1. Number of employees indicates the number of fulltime employees.
2. The average number of non-fulltime employees is indicated in the brackets as the number excluded.
3. “Other and trans-segment” includes the ICT and Sustainability business and corporate divisions.
(2) Non-consolidated (Taiyo Holdings Co., Ltd.)As of March 31, 2024

Number of employees
156

Average age

Average years of service

39.9

10.4

Average annual
remuneration (yen)9,078,164

Notes:
1. Number of employees indicates the number of fulltime employees (this excludes employees that we second to othercompanies but includes employees that other companies second to us).
2. We have omitted the average number of non-fulltime employees because such employees account for less than 10% of
total employees.
3. Average annual remuneration includes:- Extra wages- Bonuses- Shares provided under the employee stock ownership plan
- Annual amount set aside for the defined benefit pension plan
- Installments for the defined contribution pensions plan
(3) Labor organizations
Other than those employed in Taiyo Ink (Suzhou) Co., Ltd., Taiyo Ink Trading (Shenzhen) Co.,
Ltd., Taiyo Pharma Tech Co., Ltd., and Onstatic New Material (Jiangxi) Co., Ltd., our employees do notbelong to any labor organization. We enjoy strong employee relations.

- 15 -

(4) Percentage of female workers in management positions, percentage of eligible male workers who takechildcare leave, and gender pay gap
1) Non-consolidated (Taiyo Holdings Co., Ltd.)Fiscal year ended March 31, 2024
Percentage offemale workers
in management
positions (%)(*Note 1)

Percentage of
eligible maleworkers who takechildcare leave(*Note 2)

21.4

80.0

Wage gap between male and female workers (%)(*Notes 1 and 3)
All workers

Supplementary notes(of which, fulltime workers)(of which, part-timeand limited-term
contract workers)

76.1

−

76.9

Four of five males eligible to takechildcare leave took leaveNotes:
1. Calculated as specified in the Act on the Promotion of Women's Active Engagement in Professional Life (Act No. 64,
2015)
2. The percentage of workers taking childcare leave in Article 71, Paragraph 4-1 of the Ordinance for Enforcement of the Act
on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other
Family Members (Ordinance of the Ministry of Labor No. 25, 1991) was calculated as specified in the Act on the Welfareof Workers Who Take Care of Children or Other Family Members Including Child Care and Family Care Leave (Act No.
76, 1991).
3. Categories with less than five males or females are not disclosed because the resulting numerical bias is not in keepingwith the purpose of disclosure.

2) Consolidated subsidiaries
Fiscal year ended March 31, 2024
Wage gap between male and female workers (%)(*Notes 2 and 4)

Percentage offemaleworkers inmanagement
positions (%)(*Note 2)

Percentage of
eligible maleworkers whotake childcare
leave(*Note 3)

Taiyo Ink Mfg.
Co., Ltd.

4.7

33.3

78.7

78.0

−

One of three males eligible totake childcare leave took leave

Taiyo Pharma
Tech Co., Ltd.

11.6

50.0

71.7

75.3

66.8

One of two males eligible to takechildcare leave took leave

funlead corp.

8.3

50.0

70.7

71.2

−

One of two males eligible to takechildcare leave took leave

Name(of which,full-time
workers)

All workers(of which, parttime and limitedterm contract
workers)

Supplementary notes

Notes:
1. Only disclosed for those subsidiaries subject to the obligation of public disclosure, as specified in the Act on the
Promotion of Women's Active Engagement in Professional Life (Act No. 64, 2015).
2. Calculated as specified in the Act on the Promotion of Women's Active Engagement in Professional Life (Act No. 64,2015).
3. The percentage of workers taking childcare leave in Article 71, Paragraph 4-1 of the Ordinance for Enforcement of the Act
on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other
Family Members (Ordinance of the Ministry of Labor No. 25, 1991) was calculated as specified in the Act on the Welfareof Workers Who Take Care of Children or Other Family Members Including Child Care and Family Care Leave (Act No.
76, 1991).
4. Categories with less than five males or females are not disclosed because the resulting numerical bias is not in keepingwith the purpose of disclosure.

- 16 -

II. Trends and Outlooks
1. Policies, business climate, challenges
The business policies, business climate, and challenges of the Taiyo Group are detailed below. The
forward-looking statements are based on information available to the Taiyo Group as of the end of theconsolidated fiscal year under review.
(1) Business policies
We remain steadfastly committed to our goal of creating a cheerful society (as stated in “our corevalues” below). With this objective in mind, we will continue to grow while adapting to changes in thebusiness environment and strategies.
Our management philosophy“To achieve ‘a cheerful society’ by further advancing every technology in our Group and bycreating a wide range of innovative products to fulfill the dreams of the world.”
Our basic management policies
1. We will generate revenue and increase corporate value, thereby contributing to the well-being andprosperity of customers, communities, shareholders, and employees.
2. We will discharge our corporate social responsibility with regard to the achievement of ourmanagement philosophy, including complying with the law, protecting the environment, ensuring
thorough quality management, and contributing to society.
3. We will leverage our global system to always provide superior products and services.
4. We will constantly create opportunities for employees to challenge and develop themselves,aiming to have a corporate group composed of people who are highly motivated to be successful
and to achieve goals set by themselves.
5. We will increase our comprehensive corporate strengths by maximizing cooperation between the
Taiyo Group companies and strengthen the teamwork of all employees with emphasis on “speed
and communication”.
6. We aim to have a group of global companies able to contribute to the realization of a cheerfulsociety by constantly working for technological innovation and creating new products andbusinesses.
(2) The business climate, our strategies, and our operating and financial challenges
Business climate
During fiscal year ended March 31, 2024, the global economy continued to face increasing
uncertainty due to soaring resource and other prices caused by rising geopolitical risks, persistent risinginterest rates and foreign exchange fluctuations in the United States and European countries, theeconomic slump in China, and other uncertainties.
1) Electronics business
The electronics business is strongly affected by semiconductor industry. The semiconductor
industry was temporarily affected by reduced production of semiconductors. Despite this,semiconductor and other related demand is expected to grow over the medium and long term due tothe penetration of IoT and virtual space technologies in society and the spread of 5th-generation
mobile communication systems (5G), an increase in products related to generative AI, and progress on
digital transformation. Electrification associated with the spread of electric and hybrid vehicles and anincrease in electronic equipment for autonomous driving are also expected to propel expansion ofdemand for automotive-related products.

- 17 -

2) Medical and Pharmaceuticals industry
Mounting financial pressure on Japan’s health insurance system has prompted a revision of
drug pricing, leading to structural changes in the pharmaceuticals industry and increasingly diverse
healthcare needs. Structural changes in the pharmaceuticals industry include cost-control measures
such as introducing price controls on original drugs and encouraging the use of generics, and thedebate continues over further reforms to the medical system. Meanwhile, quality issues andaccompanying product defects are occurring frequently in the generic drug industry and this demands
improvements in reliability through revisions to the quality control system and stable supply.
Technological innovation and collaboration between industry, academia, and government in response
to diverse healthcare needs should drive innovative drug discovery.
Our strategies
Amid these conditions, we formulated “Beyond Imagination 2030,” our long-term management
plan, in June 2021 to achieve “a cheerful society,” our management philosophy, with an emphasis on the“chemistry” the Taiyo Group possesses.
A future that is beyond our imagination will unfold by 2030, with the evolution of technology,
thoughts on the environment, and various initiatives around the world.
We want to be a company that creates a wide range of innovative products that offer dreams forsuch a future. Our self-sufficient personnel will further develop our core Electronics and Medical andPharmaceuticals businesses, while continuing to work on our energy business and digital transformation
as Group-wide initiatives, even in such a dynamic environment.
“Beyond Imagination 2030,” our long-term management plan
Basic policies to implement
1) Develop and utilize self-sufficient personnel capable of acting independently, who respond todiversifying organizations and societies
2) Achieve continuous growth and explore new business areas in the Electronics business3) Grow the Medical and Pharmaceuticals business further
4) Transform and evolve through digital transformation
5) Create new businesses6) Execute strategic M&A
7) Strengthen efforts for SDGs (Sustainable Development Goals)
Targets
1) Profitability: Return on Equity (ROE) ratio of 18%
2) Shareholder return: Maintain the dividend on equity ratio (DOE) at 5% or higher
We do not aim to simply expand our business, but to fulfill our social responsibilities andmaximize shareholder value. Over the long-term, we will work to increase capital efficiency while
increasing profits, and to fully return profits to our shareholders. To promote these activities, we will aim
to achieve ROE of 18% as an indicator of profitability and maintain DOE of 5% or higher as an indicatorof shareholder return, as our targets for “Beyond Imagination 2030,” our long-term management plan. In
fiscal year ended March 31, 2024, ROE was 9.0% and DOE was 5.1%. We will continue activities aimed
at achieving these targets going forward.
We are implementing Group-wide initiatives for each of the basic policies of “Beyond Imagination
2030,” our long-term management plan, with particular emphasis on the following measures.

- 18 -

1. Develop and utilize self-sufficient personnel capable of acting independently, who respond todiversifying organizations and societies (Basic Policy 1)
A key challenge is to build a workforce that can adapt to organizational and social diversity andhelp the company grow in the years to come. By striking a three-way balance between work
motivation, workplace environment, and fair evaluations and compensation, we aim to be anorganization abounding in self-sufficient personnel capable of setting goals for themselves andenjoying the process of achieving those goals and producing results.
2. Achieve continuous growth and explore new business areas in the Electronics business (Basic Policy 2)
The mainstay of our Electronics business is solder resist. We hold a global top share in thesolder resist market, and over 90% of solder resist sales are in overseas countries. We are working on
the following measures to achieve continuous growth amid the global economic and electronics
industry conditions described above.
<Strengthening R&D>
We are investing aggressively in R&D facilities and make a determined effort to hire and train
outstanding researchers and technicians from Japan and around the world. During the fiscal year
ended March 31, 2024, we opened new InnoValley technology development center on the premises of
the Ranzan Facility for R&D. In the future, we plan to build a production technology center for R&D
on our mainstay product, dry film-type solder resist. We will energetically pursue external alliances in
addition to capital investment, and vigorously pursue business development.
<Bringing new products to market swiftly>
When we have a potentially marketable product in the Taiyo Group, we make a concerted effort toclear all of the intervening hurdles and speed up commercial production. We set up a dedicated projecttaskforce consisting of hand-picked personnel from marketing, manufacturing, and productdevelopment, and assign this taskforce the powers and duties to achieve commercial production.
<Managing foreign exchange risk>
Since many products in the Electronics business are priced and sold in foreign currencies, exchange
rate fluctuations can easily affect our business results. It is therefore important to mitigate foreignexchange risk. One way we do this is to produce products close to where we sell them. Another policy
is to step up local procurement to match the currency for revenues and expenditures.
3. Grow the Medical and Pharmaceuticals business further (Basic Policy 3)
The medical and pharmaceutical industry is facing an increasingly unpredictable environment
with supply disruptions due to quality issues and the promotion of medical system reforms to control
healthcare costs. To address these challenges, the Taiyo Group aims to establish a system that canensure a stable supply of existing drugs in the years ahead, and provide pharmaceuticals that will meetthe needs of medical institutions and patients.
<Further progress in contract manufacturing of ethical pharmaceuticals>
Taiyo Pharma Tech Co., Ltd. performs contract manufacturing of pharmaceuticals, a business it took
over when Daiichi Sankyo Propharma Co., Ltd. split off its Takatsuki Plant. In addition to providing
stable supplies to existing customers, it also began regular operation of a contract business in the new
field of regenerative medicine in the fiscal year ended March 31, 2024. Taiyo Pharma Tech aims togrow its contract manufacturing business in the future and continue to provide stable supplies of highquality products while working to develop contracts in new fields such as regenerative therapy andgene therapy products as well as contracts from new customers.
<Progress in ethical pharmaceuticals manufacturing and marketing business>
Taiyo Pharma Co., Ltd. has a line-up of 19 long listed pharmaceutical products transferred from
Chugai Pharmaceutical Co., Ltd., Nippon Boehringer Ingelheim Co., Ltd., AstraZeneca K.K., andJanssen Pharmaceutica NV. It continues to provide reliable, stable supplies of ethical pharmaceuticals
to the frontlines of healthcare. During the fiscal year ended March 31, 2024, it obtained approval for
manufacturing and marketing Madopar® L50 combination tablets, an additional dosage form of thetherapeutic for Parkinsonism. It will continue to develop and supply pharmaceutical formulations tomeet the demands from the frontlines of healthcare.
- 19 -

<Addressing the risk of pharmaceutical side-effects>
The manufacturing and marketing of pharmaceutical products involves risks of liability for productrecalls, suspension of sales and health risks. To manage this risk, we comply with the Pharma-Med
Act* and all applicable standards. We also have product liability insurance to minimize the financial
damage from any product liability claims.
* The Pharma-Med Act's full title is “Act on Securing Quality, Efficacy and Safety of Products
Including Pharmaceuticals and Medical Devices.”
4. Transform and evolve through digital transformation (Basic Policy 4)
To ensure global competitiveness in a rapidly changing business landscape, we must commit tocontinually improving workflows, processes, and our business model. We will digitize workflows andprocesses, including ordering, production management, R&D, and new business development, togenerate new value within the Group and for customers.
5. Create new businesses (Basic Policy 5)
To enhance corporate value in the medium to long term, we need to launch new businesses,
rather than relying only on our existing businesses. We will continue to expand and develop new core
revenue sources to complement our existing ones (electronics, medical and pharmaceuticals, ICT,
energy, and food).
6. Execute strategic M&As (Basic Policy 6)
To accelerate efforts to strengthen existing businesses and launch new ones, we will actively
explore potential business and capital tie-ups, M&A, and strategic collaboration projects in which we
can leverage external assets, instead of relying only on our own assets. During the fiscal year ended
March 31, 2024, funlead corp., which is responsible for our ICT business, acquired all of the shares of
Xseeds Co., Ltd. and RIT Inc.
7. Strengthen efforts for Sustainable Development Goals (SDGs) (Basic Policy 7)
Even before the SDG agenda garnered worldwide interest, we were integrating sustainability
into our business activities, believing that sustainability is crucial to continued enhancement ofcorporate value. More specifically, we opened floating solar power plants in Japan to realize adecarbonized society and opened the 16th floating solar power plant in the fiscal year ended March
31, 2024. We also participate in local events and charitable causes, and our canteens use local
produce. To promote diversity and inclusion, we have installed all-gender restrooms and have a highpercentage of women officers compared to the average for companies listed on the TSE Prime Market.
We will continue to actively pursue SDG initiatives in the future.

- 20 -

2. Sustainability approach and initiatives
We have specified “Strengthen efforts toward Sustainable Development Goals (SDGs)” as one of thebasic policies in “Beyond Imagination 2030,” our long-term management plan, as stated in our Corporate
Governance Report. The details of such initiatives are provided below. The forward-looking statements in thisreport are based on certain assumptions the Taiyo Group has deemed to be reasonable as of Date of filing ofAnnual Securities Report. Actual results may differ substantially due to various factors. The Corporate
Governance Report is posted on our website (https://www.taiyohd.co.jp/en/pdf/investor/governance/governance_en.pdf)(1) Sustainability
1) Governance
The Sustainability Promotion Committee, chaired by the President and CEO, is responsible forthe execution of all activities relating to sustainability. The Sustainability Promotion Committee
discusses the direction of activities relating to sustainability and progress on targets set based on
critical issues across the Taiyo Group. The committee receives instructions from the Board of
Directors concerning priority challenges.

2) Risk management
The Taiyo Group reassesses risks and opportunities by business several times a year to address
short-term, medium-term, and long-term risks and opportunities relating to each business. To perform
company-wide risk management on matters relating to sustainability that could have a particularserious impact, we have built a series of systems that the risk assessed and identified is then addressedby the execution division, and their response is managed and monitored by the Sustainability
Promotion Committee and the Board of Directors.
(2) Response to climate change
The Taiyo Group launched a floating solar power business in 2014 and actively engages in othersustainability efforts. Climate change is a serious social issue facing global society and is accordingly apriority management issue of the Taiyo Group. We therefore declared our support for TCFD* 1
recommendations in March 2022 and will continue to further strengthen relationships of trust with our
stakeholders by pursuing initiatives aligned with the TCFD framework and active disclosure of
information. The Taiyo Group also responded to the CDP Climate Change 2023 Questionnaireadministered by the CDP*2 for the first time and received a “B” rating.
*1 TCFD: A task force established by the Financial Stability Board (FSB) at the request of the G20 for
considering corporate information disclosure related to climate change and the response of financial
institutions*2 CDP: A global NGO which analyzes and evaluates the environmental initiatives of companies andother organizations
1) Governance
Governance related to climate change is included in governance of sustainability. See (1)Sustainability, 1) Governance for more information.
- 21 -

2) Strategies
We specify the risks and opportunities by analyzing long-term expected climate change
considering the 1.5° C and 4° C scenarios concerning the Sixth Assessment Report of theIntergovernmental Panel on Climate Change (IPCC) and the World Energy Outlook of theInternational Energy Agency (IEA).

Opportunity presented by progress on realizing a decarbonized society: Case 1
In response to the power shortages resulting from the Great East Japan Earthquake of 2011, ourGroup is focusing on floating solar power as we pursue the renewable energy business. The use offloating solar power plants on bodies of water, such as agricultural reservoirs, can help to increase theamount of electric power generated. This is achieved by the cooling effect that the water surface has on
solar panels, which mitigates the reduction in power generation efficiency that results from summer heat.
It also involves less land development and uprooting of vegetation than its ground-based counterparts,
which helps with environmental conservation, while reducing the burdens borne by municipalities andagricultural producers that own and manage reservoirs. As of March 31, 2024, the Taiyo Groups has
established a total of 16 floating solar power plants nationwide. These plants generate power equivalent to
the electricity purchased externally to power both our Electronics and Medical and Pharmaceuticals
businesses in Japan. Going forward, we will support the use of renewable energy by customers andsociety as a whole, in addition to our Group.

- 22 -

Opportunity presented by progress on realizing a decarbonized society: Case 2
Demand for electric vehicles (EV) is forecast to increase even more in the future because they do
not emit CO2 during operation. The area of automotive substrates installed in EVs is forecast to increaseby roughly 2.6 times by 2035, compared to 2020. We see this increase in the use of solder resists due tothe increase in substrate area as a business opportunity that will lead to an increase in sales of our Group’s
automotive-related products.
Forecast sales volume of automotive substrates** General Survey on Car-Mounted Electronic Devices & Components 2022, Fuji Chimera ResearchInstitute, Inc. (results for 2020; forecasts for 2025, 2030, and 2035)
Opportunity presented by progress on realizing a decarbonized society: Case 3
After alkaline developable solder resist ink is used to coat the entire surface, it is removed from theunneeded areas through the photolithography process, creating a pattern. However, inkjet solder resist canuse the inkjet printing method to coat only the areas where it is needed to create a pattern. Compared toalkaline developable solder resist, this inkjet printing method can therefore help to reduce solder resist
consumption and radically simplify the process for the customer.. Also, since it does not volatilize organic
solvents and generate liquid developer waste, it effectively reduces environmental load. The Taiyo Groupis developing inkjet coater-compatible products for a range of applications, including marking ink, plating
resists, etching resists, and display materials, in addition to solder resists.

- 23 -

3) Risk management
Management of risks related to climate change is included in sustainability risk management.
See (1) Sustainability, 2) Risk management for more information.
4) Metrics and targets
To achieve carbon neutrality by 2050, the target year set by the Japanese government, we haveset an even higher target before to reduce total Group CO 2 emissions by 40% in fiscal year ended
March 31, 2031 compared to fiscal year ended March 31, 2017. We also aim to achieve carbon
neutrality in the domestic Electronics business and a 70% reduction in CO2 emissions in the domestic
Medical and Pharmaceuticals business by fiscal year ended March 31, 2031, as well as carbon
neutrality for the entire Taiyo Group by 2050.

Our CO2 emissions results and targets are indicated below. We have set fiscal year ended
March 31, 2017 as the base year for the CO2 emissions reduction targets.
CO2 emissions for fiscal years ended March 31, 2017, 2023, and 2024,
and CO2 emissions target for fiscal year ending March 31, 2031
(kt-CO2)
CO₂ emissions

Fiscal year
ended March
31, 2017(Base year)

Fiscal year
ended March
31, 2023(Actual result)Fiscal year
ended March
31, 2024(Estimate)

Fiscal year
ending March
31, 2031(Target)*1

Scopes 1 + 2

41

50

48

24

Scope 1

16

15

16

Scope 2

25

34

32

Electronics (Japan)

Scopes 1 + 2

7

10

9

0

Medical andPharmaceuticals (Japan)

Scopes 1 + 2

18

20

19

5

Other*2

Scopes 1 + 2

15

19

19

Segment

Entire Group*1 Targets for Scopes 1 + 2 for the entire Group, the Electronics business in Japan, and the Medical andPharmaceuticals business in Japan*2 Other: Overseas Electronics business and ICT and Sustainability business, and the filing company

We will continue to respond to climate change through our businesses and disclose information on
our efforts by continuing to evaluate the impact of the risks and opportunities presented by climatechange on our businesses and pursuing efforts to mitigate such risks and capitalize on such opportunities,
in accordance with the framework of TCFD recommendations.
- 24 -

(3) Human capital
Basic Policy 1 in “Beyond Imagination 2030,” our long-term management plan, is “Develop andutilize self-sufficient personnel capable of acting independently, who respond to diversifying
organizations and societies.” We endeavor to develop self-sufficient personnel who set their own goals
and have high aspirations to achieve them by maintaining a good balance in work motivation, healthy
workplace environment, and fair evaluations and compensation.

1) Internal environment creationa. Strategies
We are implementing various health promotion measures to establish a healthy work
environment. Since July 2015, we have pursued a series of initiatives to gradually create a nosmoking environment in the office by introducing a health maintenance and improvement
allowance system that pays employees who do not smoke 3,000 yen a month, shrinking the space
allocated for smoking in each office, and other measures. In May 2019, the Ikebukuro Head Officeinitiated a complete ban on smoking before coming to work and during working hours (until an
employee has left the office). Our Ranzan Facility and consolidated subsidiaries in Japan now havecomplete bans on smoking in the office. We also hold many events to support employee health.
Various health events were held during fiscal year ended March 31, 2024, including stretching
exercises and “Radio Taiso” calisthenics, and Pilates and yoga classes held at the Company and“Radio Taiso” calisthenics and walking events at consolidated subsidiaries in Japan.
b. Metrics
The payout ratio for health maintenance and improvement allowances was 94.0% in fiscal
year ended March 31, 2024. Moreover, the payout ratio for all Group companies that haveintroduced the system was 85.2%. We will continue to create an environment that supports thehealth of each and every employee, including those at Group companies.

- 25 -

2) Organizational and human resource developmenta. Strategies
To realize our management philosophy amid the dizzying pace of change in society and thebusiness environment, we are implementing the Co-creation Initiative for the Future to develop
self-sufficient personnel from the perspectives of both the individual and the organization and areable to delineate their own aspirations for the future, grasp the essence of matters in making
decisions, and involve those around them in executing business.

- 26 -

Each department has been holding Co-creation for the Future Meetings since April 2019 as
one part of the Co-creation Initiative for the Future. The objective of the meetings are to createstrong individuals and a strong organization by instilling a growth mindset and improving thequality of team relationships and actions.
The Taiyo Values were introduced in October 2021 as the values that all employees shouldshare, follow, and apply. They were formulated through group dialog sessions among employees
over the course of two years. Currently, leaders are selected in each department to continue efforts
to further manifest the Taiyo Values. In fiscal year ended March 31, 2024, an offsite session for
Value Leaders was held to provide a venue for the leaders in Taiyo Holdings and its consolidated
subsidiaries in Japan to share their individual initiatives with the entire organization.

Holding Co-creation for the Future Meetings and applying the Taiyo Values in daily work
activities are improving human and organizational relationships and, as a Group, we feel thevalues we want to practice have also taken root. We are also strengthening team-based
performance management out of the desire to link this course of action to better work outcomes
and business results. In fiscal year ended March 31, 2024, a Performance Management Program
was launched for managers of Taiyo Holdings and Group companies in Japan (Taiyo Ink Mfg. Co.,
Ltd., Taiyo Pharma Co., Ltd., Taiyo Pharma Tech Co., Ltd., Taiyo Fine Chemicals Co., Ltd., Taiyo
Green Energy Co., Ltd., and Ranzan Shokudo Co., Ltd.; hereafter, the same). This program isdesigned to help them learn management styles that will improve independent career formation
and work performance of team members, and update their own interaction styles through practicalapplication and dialog.
On the point of human resource development, we are focusing on investment in employee
training, in addition to the Co-creation for the Future initiative described above. We also subsidize
the cost of acquiring company-recommended qualifications, the cost for new employees topurchase and read a newspaper, and the cost of purchasing books necessary for work to help each
employee to increase their knowledge and improve their skills. We also put effort into internal andexternal seminars and training as opportunities for growth. Another way we support employees isby providing them with a broad range of learning activities, in addition to activities directly tied toCompany business. One example is the Recreation System. In this system, an annual subsidy of
22,000 yen (including tax) per person is provided to stimulate communication within departments
and encourage employees to look at how they approach their work as a professional by engaging
in non-routine experiences (activities that enhance education and cultivate sensitivity). In August
2023, we also introduced a book subsidy system to help employees purchase books. This subsidy
is not limited to books that are directly related to their work. The purpose of this system is tosupport opportunities to gain insights and learn about a wide range of areas through hands-on
reading of printed material as one part of independent career formation.

- 27 -

b. Metrics
Roughly two and a half years have elapsed since the Taiyo Values were formulated and thepercentage of employees who consciously apply these values in their daily work has exceeded
50%. The percentage of employees who successfully embody these values in addition to
consciously applying them is also nearing 50% (hereafter, Group employee interview results). We
intend to continue such initiatives to instill the Taiyo Values as values that employees can always
depend on daily.

- 28 -

The following results have also been achieved in investment in employee education. To
establish an environment that encourages the self-sufficiency of each employee, we will continue
to provide support that will enable employees to broaden their education and gain insights.
Indicators for Investment in Employee Training

Fiscal year ended March 31, 2024

Cost of acquiring company-recommended qualifications per
employee, cost of newspaper subscriptions for new

Approx. 50,000 yen

employees, cost of purchasing books/publications necessary
for work
Cost of internal/external seminars and training per employee

Approx. 310,000 yen

Number of departments hosting recreational activities(Number of departments this covers: 112)

67 departments(including Group companies)
Recreation cost per employee (including Group companies)）

Approx. 18,000 yen

Book subsidy cost per employee

Approx. 30,000 yen* Costs for in-house training include expenses related to design, etc.
* The figures for “Number of departments hosting recreational activities” and “Recreation cost per employee” are actual results

for consolidated subsidiaries in Japan, excluding funlead corp. (funlead corp. has its own program); the figures for otherindicators are the actual results for Taiyo Holdings Co., Ltd. on an unconsolidated basis.
* For “Book subsidy cost per employee” only, the results cover the period from August 2023 to March 2024.

In order to convert the diversity of human resources to organizational strength to createbusinesses agilely in response to a rapidly changing market environment, we will also continue toactively and continuously secure diverse human resources (the table below shows results for fiscal
year ended March 31, 2024 (*reflecting personnel changes up to June 2024 only for the percentage
of female officers, the percentage of female executive officers, and the percentage of executive
officers of foreign nationality)). We will establish a workplace environment and internal training
system that will enable the fullest utilization of unique characteristics and abilities of eachindividual.
Indicators for Diversity of Human Resources

Fiscal year ended
March 31, 2024*

Percentage of female officers

42.9%

Percentage of female executive officers

12.5%

Percentage of female managers

21.4%

Percentage of female leaders

42.4%

Percentage of female new graduate hires

53.3%

Percentage of female mid-career hires

20.3%

Percentage of female employees

36.9%

Percentage of foreign national executive officers

12.5%

Percentage of foreign national managers

3.6%

Percentage of foreign national employees

4.0%

Percentage of mid-career hires as managers

71.4%

Percentage of mid-career hires

49.7%* The figures above indicate the percentages in Taiyo Holdings Co., Ltd..
* The definition of “officer” in “Percentage of female officers” is officers as defined in
the Companies Act (internal/outside board directors and Audit & Supervisory Committee
members).
* For “Percentage of female officers,” “Percentage of female executive officers,” and“Percentage of foreign national executive officers” only, the figures reflect personnel
changes up to June 2024.

- 29 -

When performing stress checks for all employees of Taiyo Holdings Co., Ltd. and somedomestic consolidated subsidiaries, we not only check the legally mandated elements; we also lookat employee satisfaction and other indicators generally referred to as overall indicators. We also
consider the results of these stress checks in regard to employee satisfaction in terms ofmanagement’s commitment to work motivation, a healthy work environment, and fair evaluations
and compensation. These various initiatives have also produced results. We outperformed thenationwide average in 32 (31 categories in fiscal year ended March 31, 2023) of 36 categories, andthe numbers for the general indicators were also good compared to nationwide averages.
Moreover, improvement from fiscal year ended March 31, 2023 was seen in three of the four
indicators in which we underperformed the nationwide average.

In terms of "workplace environment," we not only aim to create a clean and comfortableworkplace with the latest equipment, but also a work environment that will encourage employee
growth and awareness. For example, we display works of art in our workplaces because we want
employees to imagine how much effort an artist must exert to become a first-class professional andthen reflect on how they can approach their own work. We are also actively hiring mid-career
professionals to bring in the perspectives of diverse talent with different backgrounds, not only interms of concrete skills but also in terms of approaches and other qualitative aspects. (Percentageof mid-career professional hired by the filing company in fiscal year ended March 31, 2024:
49.7%)In April 2023, we revised the system of employee compensation to achieve fair evaluations
and compensation as applied to the recent changes in the work environment. We will continue torebalance work motivation, a healthy work environment, and fair evaluations and compensation toachieve a good balance and will strive to realize a cheerful society by creating the environment
and establishing the means for employees to contribute more actively as self-sufficient personnel.

- 30 -

3. Business risks
The following are the main risks that may influence the business development of the Taiyo Group. The
forward-looking statements are based on information available to us as of the end of the consolidated fiscal
year under review.
Risk type

Description of risk

Key actions for managing the risk

Risk associatedwith response tosocial issues• Corporate value may decline and business• The Board of Directors and Sustainability
opportunities may be lost when efforts toPromotion Committee specify priority
address environmental issues such as climate
challenges
change and other social issues are• We analyze risks and opportunities andinsufficient
conduct thorough risk management

Foreign exchangerisk• Fluctuation in foreign exchange rates may
cause stagnation of business activities
overseas• Fluctuations in foreign exchange rates andinterest rates may affect conversion of theoperating results of overseas subsidiaries
into yen• We may need to use forward exchange
contracts• We finance in countries with a low risk offluctuation in foreign exchange rates,
including the parent company• We promote sourcing local production for
local sales

Country-specificrisks• There may be unfavorable changes in local
regulatory requirements (including legal andtax requirements)• The country might experience military
conflict or civil disorder• We aim for an appropriately dispersed
network of global operations• We research trends in among customers andin the government of each country

Risk of disaster
affecting a
manufacturing
facility• A disaster affecting a manufacturing site
might cause manufacturing of products to besuspended• We aim to maintain appropriately dispersed
manufacturing sites in the Electronics
business• We own in-house power generationequipment that could be used at contract
manufacturing sites of the Medical andPharmaceuticals business

Infection risk

• We might need to suspend business if
corporate officers or employees get infected• We adhere to government policy• We have introduced work-from-homeprograms• We have installed hand sanitizer

Procurement risk

• Our supply chain might get disrupted if
suppliers suffer damage or shortages• Oil prices might lead to higher materials
costs• We source materials from multiple suppliers

Price war risk

• We might face pressure to lower sales prices• We produce and sell low-priced products• We monitor the competition

Client bankruptcy• Clients in Japan or overseas might
unexpectedly go bankrupt• We monitor clients’ performance andcreditworthiness to protect the recoverabilityof our receivables

Technologicalinnovation risk

• Technological innovation might yield
manufacturing techniques that do not rely on
our products (such as techniques for making
electronic parts without PCBs)• Techniques that do not use solder resist may
be applied to manufacturing PCBs

• We develop new manufacturing techniques

Patent risk

• We may fail to protect our patents• We manage risks related to intellectual• The Taiyo Group may infringe on the patents
property rights
and intellectual property of another company

Side-effects ofpharmaceuticals• Unexpected serious adverse effects or safetyissues may be discovered• We comply with the Pharma-Med Act andapplicable standards, and subscribe to thenecessary liability insurance

Pharmaceuticalregulation• There may be unfavorable changes in drug
pricing or other relevant aspects of the• We have a robust system of operatingprocedures with effective oversight- 31 -

Risk type

Description of risk

Key actions for managing the risk

national health system or national/local
government health policy

Impairment risk

• If Group assets markedly decline in fairvalue, or if the Group’s businesses become
unprofitable, we would recognize
impairment losses for the non-current assets• The Board of Directors reviews whether thepurchase price is appropriate• We use follow-up surveys to measure each
asset’s contribution to synergy, and weperiodically monitor each asset’s
macroeconomic context

Transfer pricing
taxation and othercross-border tax
risks• Differences of opinion between tax
authorities might incur additional or double
taxation• We comply with each country’s tax system• We consult external experts

Risk of failure tosecure humanresources• Delays in developing human resources, theaging of society with fewer children being
born, and population decline may contributedecline in the workforce pool due toemployee attrition and difficulty in hiring
personnel.

• We develop and utilize self-sufficientpersonnel capable of acting independently,
who respond to diversifying organizations
and societies• We maintain work motivation, a healthy
work environment, and fair evaluations andcompensation

Information
security risk

• Cyber attacks and other security threats may
result in information leaks and falsificationof information• Computer systems may shut down or
malfunction• We strengthen and maintain our information
management systems• We train employees and conduct practicedrills- 32 -

4. Financial position, operating results, cash flows(1) Performance overview
This section describes the financial position, operating results, and cash flows (hereafter,“performance”) of the Taiyo Group in the consolidated fiscal year under review.
1) Financial position
The table below shows year-on-year changes in assets, liabilities, and net assets, as well as themain factors for the changes.
(Millions of yen)
Consolidated
fiscal year
ended March
31, 2023
Current assets

90,050Consolidated
fiscal year
ended March
31, 2024

ChangeMain factors(Comparison with the end of the previous fiscalyear)

109,655

Increase of …
11,462 million yen in cash and deposits
19,604
5,617 million yen in notes and accounts
receivable - trade, and contract assets

Non-current assets

97,212103,096

Increase of…
8,198 million yen in buildings and structures
5,884
Decrease of…
2,116 million yen in construction in progress

Total assets

187,263

212,751

25,488112,353

Increase of...
10,824 million yen in long-term borrowings
17,829 (including current portion of long-termborrowings)
4,396 million yen in short-term borrowings

92,739100,398

Positive factors:
Recorded 8,654 million yen in profit
attributable to owners of parent
Increase of 3,542 million yen in foreign
7,658
currency translation adjustment account
Negative factors:
Decrease of 5,033 million yen in dividends ofsurplus187,263

212,751

25,488

Total liabilities

94,523

Total net assets

Total liabilities andnet assets

2) Operating results
Net sales for the consolidated fiscal year ended March 31, 2024 were 104,775 million yen (up7.6% year on year). Operating income was 18,203 million yen (up 14.0% year on year), and ordinary
income was 17,310 million yen (up 12.0% year on year). Profit attributable to owners of the parent
was 8,654 million yen (down 24.1% year on year), which reflects impairment losses recognized by
Taiyo Pharma Co., Ltd. as a result of reviewing the sales rights with declining profitability.
Results by segment were as follows.
The Group consists of segments based on operating subsidiaries and has two reportablesegments: the Electronics and Medical and Pharmaceutical businesses.

- 33 -Electronics
In rigid products, sales volume declined year on year for display-related materials andconsumer-related materials. Sales remained especially lean for display-related materials. In contrast,
automotive products and smartphone-related products saw year on year growth in sales volume. Sales
volume of automotive products, in particular, increased as automotive production fully recovered withhigher sales volume compared to the previous fiscal year, in which inventory adjustments occurred
due mainly to a shortage of semiconductors and parts.
In semiconductor package products (PKG), sales volume decreased for liquid materials while
increasing slightly for dry film materials from the previous fiscal year. Sales volume for smartphones,
PCs, tablets, and other products was low at the beginning of the fiscal year due to a decline in enduser demand, but saw a gradual rebound in demand during the period, mainly in products for memory.
Over 90% of sales in this segment are made overseas. Foreign exchange gains (a result of the
weak yen) therefore contribute to revenue and profit growth in the segment. Throughout the period
under review, JPY against USD averaged at JPY 144.4/USD, 9.4 yen lower than the previous period’s
average rate of JPY 135.0/USD.
As a result, net sales amounted to 71,415 million yen (up 4.4% year on year), and segment
profit came to 16,456 million yen (up 3.9% year on year).
Medical and Pharmaceuticals
Taiyo Pharma Co., Ltd.'s ethical pharmaceuticals manufacturing and marketing business saw
an increase in net sales from the previous fiscal year despite the negative impact of National Health
Insurance (NHI) drug price revisions. This increase resulted from an increase in demand
accompanying the transfer of assets for REMINYL ®, the new long-listed products, and a supply
shortage of other companies’ products with the same efficacy, antitussives, and other products.
Taiyo Pharma Tech Co., Ltd.'s ethical pharmaceuticals contract development andmanufacturing business saw an increase in net sales due to a change in product mix at the customer's
request and a revision of the selling price accompanying the surge in raw material and energy prices.
As a result, net sales amounted to 29,269 million yen (up 15.0% year on year), and segment
profit came to 3,248 million yen (up 70.4% year on year).

- 34 -

3) Cash flows
The following table shows the cash flows in the consolidated fiscal year under review as wellas the factors behind these cash flows.
(Millions of yen)
Consolidated
fiscal year
ended March
31, 2023

Consolidated
fiscal year
ended March
31, 2024

Main factors

22,736

Cash inflows:
12,102 million yen in profit before income taxes
8,676 million yen in depreciation
21,224 4,792 million yen in impairment losses
Cash outflows:(3,731) million yen in increase in trade receivables(2,642) million yen in income taxes paid

(13,160)

Cash outflows:(11,582) million yen in purchase of property, plant andequipment(21,069)(7,229) million yen in purchase of intangible assets(927) million yen in purchase of shares of subsidiaries andassociates

Net cashprovided by (used in)financing activities(13,942)

Cash inflows:
23,948 million yen in proceeds from long-term borrowings
3,335 million yen in net increase in short-term borrowings
8,954 Cash outflows:(13,107) million yen in repayment of long-termborrowings(5,028) million yen in dividends paid

Net increase (decrease) incash and cash equivalents(4,079)10,299Cash and cash equivalents
at end of period

47,08857,664

Net cashprovided by (used in)operating activities

Net cashprovided by (used in)investing activities- 35 -

4) Production, sales contracts, sales resultsa. Production volume
The following table shows segment specific production volume in the consolidated fiscal
year under review.
(Millions of yen)Segment

Consolidated fiscal year ended
March 31, 2024
(April 1, 2023
to March 31, 2024)

Year on year (%)

Electronics

58,558111.4

Medical and Pharmaceuticals

16,998118.4

Reportable segment total

75,556

112.9

1,485

101.8

77,042

112.7

Other
Total

Notes:
1. The monetary amounts above are based on sales prices, and they describe production volume prior to intersegment transfer
pricing.
2. The figure for the Medical and Pharmaceuticals segment excludes contract production by TAIYO Pharma Co., Ltd.

b. Sales contracts
Since we rely primarily on estimated production volume, we have omitted the data on sales
contracts.
c. Sales results
The following table shows segment specific sales results in the consolidated fiscal year
under review.
(Millions of yen)Segment

Consolidated fiscal year ended
March 31, 2024
(April 1, 2023
to March 31, 2024)

Year on year (%)

Electronics

71,415

104.4

Medical and Pharmaceuticals

29,269115.0

Reportable segment total

100,684

107.3

4,090

117.8

104,775

107.6

Other
Total
Note: The monetary amounts above exclude intersegment transactions.

- 36 -

(2) Management’s perspective on recognizing, analyzing, and examining the Group business performanceThis section describes the recognition, analysis, and examination of the group’s businessperformance from the perspective of management.
The forward-looking statements are based on information available to us as of the end of theconsolidated fiscal year under review.
1) Key accounting policies and accounting estimates
Our consolidated financial statements are based on generally accepted accounting
principles in Japan (GAAP). In compiling these statements, we rely on the accounting estimatesand assumptions described in two of the “notes on consolidated financial statements” in V.
Financial Information, specifically, “basic factors underlying our consolidated financial statement”
and “key accounting estimates.”2) Consolidated results and outlook
a. Consolidated results
See the “2) Operating results” section in II. Trends and Outlooks, 4. Financial position,
operating results, cash flows, (1) Performance overview.
b. Factors that significantly affect consolidated results
See “II. Trends and Outlooks, 3. Business risks.”c. Reserves and liquidity
Our financial policy is to maintain reasonable reserves for business activities, reasonableliquidity, and a healthy balance sheet. We acquired our reserves from regular business operations,bank loans, and other sources, and we feel that we have enough reserves for now. As of the end of
the consolidated fiscal year under review, our short-term and long-term borrowings amount to86,722 million yen. There is no significant seasonal change in the amount of loans that our grouprequires.
As of the end of the consolidated fiscal year under review, we have retained a sum of
57,664 million yen in cash and cash equivalents. This amount is primarily on a yen basis, but wealso hold foreign currency. The level of cash and cash equivalents we hold is approximately
equivalent to 6.6 months of sales revenue. We feel that this level provides sufficient liquidity toenable our group to conduct business. However, we understand we may lose some of our liquidity
if a recession occurs and causes markets to shrink or causes disruption in financial or currency
markets. To prepare for such an eventuality, we have signed an agreement for an overdraft facilityof up to 24,683 million yen.

- 37 -

d. Objective metrics we use to shape business policies and measure success
We have a long-term management plan covering the period from fiscal year ended March
31, 2022 to fiscal year ended March 31, 2031. The strategy is titled Beyond Imagination 2030.
Results achieved for each indicator are shown below.
KPI

Targets

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Return on equity
ratio (ROE)

18%

14.6%

12.8%

9.0%

Dividend on equity
ratio (DOE)

5% or higher

5.1%(achieved)

6.0%(achieved)

5.1%(achieved)

The ROE target for fiscal year ending March 31, 2031 is 18%, as set in Beyond
Imagination 2030. ROE declined to 9.0% in fiscal year ended March 31, 2024, from 12.8% in theprevious consolidated fiscal year. We will continue to take action to achieve this target as we growfood, energy, and other new business areas, in addition to our existing segments (Electronics,
Medical and Pharmaceuticals).
In the consolidated fiscal year under review, we achieved DOE of 5.1%, surpassing thetarget of “5% or higher” set in Beyond Imagination 2030 (the same target was set in our plan for
the FYE 2018–2021 period, NEXT STAGE 2020) and continuing the streak of achievement fromthe previous fiscal year. Our efforts to build corporate value will continue. Guided by Beyond
Imagination 2030, we will make our solder resist business more profitable, expand into areas
related to printed circuit boards (PCB) other than solder resists, and accomplish our strategic
objectives for the Medical and Pharmaceuticals business. We will also manage our capitaldynamically, balancing shareholder returns with the need to maintain the reserves necessary foradapting to market changes.
e. Analysis of financial position and operating results of each segment
See the “2) Operating results” section in II. Trends and Outlooks, 4. Financial position,
operating results, cash flows, (1) Performance overview.

- 38 -

5. Key agreements
Significant new agreements concluded in fiscal year ended March 31, 2024 are listed below.
Asset transfer agreement
The Taiyo Group and Janssen Pharmaceutica NV agreed that Janssen’s subsidiary Janssen
Pharmaceutical K.K. would transfer to Taiyo Pharma the right to manufacture and market in JapanREMINYL® (stylized as REMINYL®, generically named Galantamine Hydrobromide), a long-listed product.
Company nameCounterparty

Country
nameDescription of agreement

Date signed

Taiyo Pharma Co., Ltd.

Janssen Pharmaceutica
NV

Belgium

Asset transfer agreement for
REMINYL®, a long-listed
product

April 3, 2023

- 39 -

6. Research & development
Guided by the management philosophy of the Taiyo Group, “To achieve ‘a cheerful society’ by further
advancing every technology in our Group and by creating a wide range of innovative products to fulfill the
dreams of the world,” we conduct our Electronics business with the aim of contributing to the realization of anadvanced information society and a cheerful environment. To this end, we perform research & development on
insulating materials, high frequency-compatible materials, and display materials.
In the consolidated fiscal year under review, we spent a total of 6,194 million yen on research anddevelopment, 1,711 million yen more than in the previous fiscal year. The R&D spending in each segment was
as follows:
Electronics: 5,284 million yen
Medical and Pharmaceuticals: 725 million yen
Other: 183 million yen
The Electronics business is pursuing three strategies, which are to: 1. enhance customer base in solder
resists (existing markets and existing technology), 2. accelerate continuous launching of new products (existing
markets and new technology), and 3. promote development of new applications (new markets and existing
technology). These strategies are aimed at further increasing our share of the solder resist market and pursuingsustainable growth of our Electronics business by creating new businesses (new markets and new technology),
which will become the next pillar of earnings for other electronic materials after solder resists.

<Enhancing customer base in solder resist (existing markets and existing technology)>
Solder resists are a mainstay of the Taiyo Group and are used extensively in rigid boards (PCBs with arigid insulated substrate) and package substrates (PCBs used as an interposer when mounting dies). The
performance requirements for these products grow tougher each year. Accordingly, in developing our solder
resists, we emphasize communicating with clients effectively and streamlining the development process toaccommodate market demand in a timely manner.
In the rigid board area, we focus on developing solder resists for high-density interconnection (HDI)
substrates used in smartphones and for automotive substrates. Capitalizing on the rising demand for 5G
telecom equipment, we have developed new materials with low transmission loss ahead of our peers andexpect to begin receiving orders from telecom manufacturers soon. Looking ahead, we anticipate that
manufacturers will shift their preference from liquid to dry film (DF) solder resists in an attempt to produce
thinner materials. We have therefore started developing DF solder resists and introducing them to customers.
Across the globe, we see a rapid shift from gasoline-powered vehicles to hybrid and electric vehicles. Amid
this shift, solder resists for automotive substrates are expected to demonstrate an increasingly diverse array ofproperties. They must withstand harsh conditions, and their thermal cycling―the ability to cycle through twotemperature extremes―is particularly important. By altering the raw materials, we succeeded in producing a- 40 -

solder resist with the desired properties for next-generation automotive substrates. We managed to get thissolder resist approved by the end customer for use in such substrates. We are also engaging in open
innovation by joining consortia and through other external collaboration.
Package substrates are crucial for protecting semiconductor chips and ensuring solid connections withthe semiconductors and performance. The package substrate market continues to grow, particularly for PCs,
smartphones, tablets, and other electronic devices, amid the rising demand for online services. Package
substrates need solder resists that can both insulate the circuit pattern and ensure the reliability of the package
substrate. Taiyo Group’s solder resists are widely used in package substrates for major semiconductor
devices. These include central processing units (CPUs) for semiconductor chips, graphics processing units(GPUs) on semiconductor chips that provide the computational processing necessary for 3D graphics anddepicting other images, application processors that control smartphone transmission and operation, andDRAM and NAND flash memory. As smartphones become thinner and smaller, their parts are getting
smaller and high-performance. Amid this trend, a smartphone’s reliability will increasingly hinge upon thesolder resists used on its chips and other parts. Solder resists must demonstrate sufficient opening accuracy to
be compatible with the latest chips. They are also necessary to enhance thickness accuracy and surface
flatness to ensure that the package substrate has a high degree of dimensional accuracy and connection
reliability. Companies are increasingly using DF solder resists to meet these requirements. DF solder resists
can meet higher specifications than conventional liquid-based solder resists can. They benefit the package
substrate makers whom we supply, because they increase quality as well as productivity. The DF solder resistof the Taiyo Group can contribute to the development of circuit technology for the 5G and IoT applications
set to expand globally. Leveraging the core technology of the Taiyo Group, we aim to generate new value andto forge new markets by developing products with new added value and function. In recent productdevelopment, for example, we are creating DF matte products with an embossed surface that processes
concavity and convexity on the surface.
<Promote development of new applications (new markets and existing technology)>
Development of applications for electronic components
We are working to develop new applications for electronic components using existing materials. The
switch to high frequency electrical signals is beginning to make it difficult to use the materials previously
used in electronic components. To address the difficulties, we are proposing materials and processes based on
the knowledge we have accumulated in the printed circuit board market and our materials are already being
used in some electronic components. We will continue to propose products and processes that address theissues and needs of customers in this manner.
<Accelerate continuous launching of new products (existing markets and new technology)>
Solder resist for inkjet printing
We have started mass producing an inkjet coater-compatible solder resist after a customer decided touse the product in its automotive substrates. An inkjet coater significantly streamlines the coating process,thus minimizing substrate production costs as well as the environmental load. We will continue to develop
applications for flexible boards, the markets for which are set to expand. The Taiyo Group is also developing
inkjet coater-compatible products for a range of applications in addition to solder resists, including marking
ink, plating resists, etching resists, and display materials.
Interlayer insulating materials
We are developing and launching a range of DF-type interlayer insulating materials such as those thatenabled the highly integrated wiring seen in recent package substrates. Amid the increasing demand for
substrates for 5G communications, we are developing interlayer insulating materials with low-dielectric
properties and having them evaluated by customers. We are also working on photo-imageable DF solutions
for the next stage in micro wiring. Additionally, we are developing encapsulant dry film by leveraging our
know-how in interlayer insulation materials and this is increasing the uptake rate of encapsulant dry film
among customers. We will continue to develop and market products that address emerging needs in thismanner.

- 41 -

Photo-imageable coverlay
As smartphones and tablets become lighter and thinner, the internal space where circuit boards are
installed is shrinking. This trend has prompted demand to shift from traditional rigid substrates to more
flexible and foldable substrates. Our photo-imageable coverlay enables fine processing and mechanicalproperties such as heat resistance and flexibility, and it is seeing use in a number of electronics applications,
including smartphone cameras. We will continue to expand the applications for the new material by working
on technical solutions in a wide range of fields.

- 42 -

New seed film for fabricating wiring on high frequency
As use of the 5G mobile communications becomes more widespread, technology for forming copper
wiring is important for transmitting high-frequency signals without loss in the frequency bands used by 5G,
the Sub 6 GHz band and the high frequency mm-wave band above Sub 6. The higher the frequency band, theeasier it is for electrical signals to flow along the surface of copper wire in high frequency transmission. The
surface of the copper wiring must be smooth to minimize transmission loss for this electrical signal. Use ofthis film enables adhesion that creates an extremely smooth interface between the copper wiring and thesubstrate film. The conventional copper seed and Modified SemiAdditive Process (MSAP) are used as amethod for achieving higher precision in the formation of copper wiring. However, the copper wiring melts
along with the copper seed layer when etching and this exacerbates the problem of an uneven surface andsides of the wiring. Because this film uses a seed layer made of a different metal than copper, it is possible toetch only the seed layer and the copper wiring surface and sides can create a smooth, fine pattern.
<Create new businesses (new markets and new technology)>
Materials for wearable devices
The market for wearable devices is emerging, particularly in the healthcare sector, where there are
now a number of applications. Wearable devices in this sector include in-body devices such as skinpatchables. Because these devices must be stretchable, manufacturers have started using the stretchable
conductive materials of the Taiyo Group in these devices.
Display materials
Manufacturers are using mini LED displays and researching and developing micro LED displays tomeet the demand for displays that are high resolution, high brightness, and energy efficient. Our group has
developed highly reflective material, etc. for backlight units in such LED displays. We are supplying to themarket LED reflectors (for enhancing or sustaining the display’s brightness) that can be produced by liquidor dry films or by the inkjet coating process. Our white DF-type and white liquid-type are being used innumerous backlight units for LED displays. We are also developing shielding material for LED displays. Thisshielding material uses a black matrix to prevent backlight leakage and RGB color contamination. We areworking on material that can be applied using both the conventional process as well as the more efficient andenvironmentally friendly inkjet coating process.

- 43 -

III. Our Facilities
1. Capital investment overview
In the consolidated fiscal year under review, we invested a total of 13,652 million yen in property, plantand equipment, as well as in software. The investments were primarily for renewing or developing production
and research facilities.
The following table shows the breakdown of the capital investments.
(Millions of yen)
Consolidated fiscal year
Segment
ended March 31, 2024
Electronics

12,190

Medical and Pharmaceuticals

1,882

Other

556

Trans-segment (Note)

(977)

Total

13,652

Note: Primarily related to the holding company (company filing the consolidated financial statements).

2. Key facilities(1) Non-consolidated (Taiyo Holdings Co., Ltd.)As of March 31, 2024
Carrying amount (millions of yen) (*Note 1)
Facility(Address)

Segment(*Note 2)

Facility
description

Ranzan-Kitayama
Facility(Ranzan-machi, Hikigun, Saitama, Japan)(*Note 3)–

Ranzan Facility(Ranzan-machi, Hikigun, Saitama, Japan)

Buildings
andstructures

Machinery,equipment,
and vehicles

Rented office,factory

2,463

−

–

R&D facility

1,683

Head office(Toshima-ku, Tokyo,
Japan)–

Generalheadquarters

Marunouchi Kitaguchi
Building(Chiyoda-ku, Tokyo,
Japan) (Note 3)–

Former Head Office
Building(Nerima-ku, Tokyo,
Japan)
Other

Land
(m2)

Number of
employees

Other(*Note 4)

Total

2,025
(33,410)

9

4,497

10

0

296
(14,851)

104

2,085

52

454

−

−

49

503

94

Office

191

−

−

12

203

−

–

Office

118

−

370
(801)

0

488

−

–

Land, etc.

135

−

43
(2,387)

76

256

−

Notes:
1. Carrying amount excludes construction in progress.
2. We do not include the filing company’s assets in reportable segments.
3. Ranzan-Kitayama Facility and Marunouchi Kitaguchi Building serve primarily as offices for domestic subsidiaries. We
rent them out to the subsidiaries.
4. “Other” in the carrying amount indicates tools, furniture, and fixtures.

- 44 -

(2)Domestic subsidiaries
As of March 31, 2024
Carrying amount (millions of yen) (*Note 1)

Company
nameTaiyo Ink
Mfg. Co.,Ltd.

Facility(Address)

Taiyo Green
Energy Co.,Ltd.

Buildings Machinery,andequipment,
structures and vehicles

Numberof
Other
Total employees(*Note 2)

Land
(m2)

Head office(Ranzan-machi, Hikigun, Saitama, Japan)

Office,Electronics factory, R&D
facility

232

515

14
(2,346)

262

1,024

238

Kitakyushu Facility(Kitakyushu, Fukuoka,
Japan)

Electronics Factory

2,227

236

−

70

2,534

48

Ranzan Facility(Ranzan-machi, Hikigun, Saitama, Japan)

Electronics

R&D facility,
etc.

6,764

203

−

452

7,419

41

Medicaland
Office, factory
Pharmaceu
ticals

10,002

4,197

9,796
(65,865)820 24,816

371

Taiyo Pharma Head office
Tech Co.,(Takatsuki-shi, Osaka,
Ltd.
Japan)

Taiyo Fine
ChemicalsCo., Ltd.

Segment

Facility
description

Head office(Nihonmatsu-shi,
Fukushima, Japan)

Other

Office,factory, R&D
facility

533

156

306
(62,260)

27

1,023

47

Urawa Plant(Saitama-shi, Saitama,
Japan)

Other

Factory

25

30

50
(989)

1

107

5

Head office(Ranzan-machi, Hikigun, Saitama, Japan)

Other

Office,factory, power
generation
facility

11

7

−

0

18

12

Ranzan Floating Solar
Power Plant(Ranzan-machi, Hikigun, Saitama, Japan)

Other

Power
generation
facility

0

276

−

−

277

−

Ranzan Onuma
Floating Solar Power
Plant(Ranzan-machi, Hikigun, Saitama, Japan)

Other

Power
generation
facility

0

63

−

−

63

−

Anazawaike Floating
Solar Power Plant(Inami-cho, Kakogun,
Hyogo, Japan)

Other

Power
generation
facility

−

193

−

−

193

−

Uozumiike-Kusatani
Floating Solar Power
Plant(Inami-cho, Kakogun,
Hyogo, Japan)

Other

Power
generation
facility

−

311

−

−

311

−

Kobayashiike Floating
Solar Power Plant(Yamatokoriyama-shi,
Nara, Japan)

Other

Power
generation
facility

−

109

−

−

109

−

Hosoike Floating Solar
Power Plant(Yoro-cho, Yorogun,
Gifu, Japan)

Other

Power
generation
facility

−

441

−

−

441

−

Hayashiike Floating
Solar Power Plant(Nisshin-shi, Aichi,
Japan)

Other

Power
generation
facility

−

144

−

−

144

−

- 45 -

Carrying amount (millions of yen) (*Note 1)
Company
nameTaiyo Green
Energy Co.,Ltd.

Facility(Address)

Segment

Facility
description

Buildings Machinery,andequipment,
structures and vehicles

Land
(m2)

Other
(*Note 2)

Numberof
Total employees

Hiraike Floating Solar
Power Plant(Yoro-cho, Yorogun,
Gifu, Japan)

Other

Power
generation
facility

−

213

−

−

213

−

Shijukushinike Floating
Solar Power Plant(Iga-shi, Mie, Japan)

Other

Power
generation
facility

0

242

−

0

243

−

Shirainuma Reservoir
Floating Solar Power
Plant(Kawajima, Hikigun,
Saitama, Japan)

Other

Power
generation
facility

−

110

−

−

110

−

Asama Reservoir
Floating Solar Power
Plant(Kawajima, Hikigun,
Saitama, Japan)

Other

Power
generation
facility

−

111

−

−

111

−

Odaike Floating
Solar Power Plant(Takamatsu-shi,
Kagawa, Japan)

Other

Power
generation
facility

−

703

−

−

703

−

Mimayaike Floating
Solar Power Plant(Takamatsu-shi,
Kagawa, Japan)

Other

Power
generation
facility

−

714

−

−

714

−

Chuoike Floating Solar
Power Plant(Miki-shi, Hyogo,
Japan)

Other

Power
generation
facility

−

357

−

−

357

−

Nishimuroike Floating
Solar Power Plant(Katsuragi-shi, Nara,
Japan)

Other

Power
generation
facility

−

149

−

−

149

−

Shodaike Floating
Solar Power Plant(Izumisano-shi, Osaka,
Japan)

Other

Power
generation
facility

−

100

−

−

100

−

Notes:
1. Carrying amount excludes construction in progress.
2. “Other” in the carrying amount indicates tools, furniture, and fixtures.

- 46 -

(3) Overseas subsidiaries
As of March 31, 2024
Carrying amount (millions of yen) (*Note 1)
Company
nameFacility(Address)

Segment

Facility
description

Buildings Machinery,andequipment,
structures and vehicles

Land
(m2)

Other
(*Note 2)

Numberof
Total employees

Taiyo Ink
Suzhou, Jiangsu(Suzhou) Co., Province,
Ltd.
China

Office,Electronics factory, R&D
facility

394

1,232

−

130

1,757

267

Onstatic New
Xinyu, Jiangxi
Material
Province,(Jiangxi) Co.,
China
Ltd.

Office,Electronics factory, R&D
facility

1,039

172

−

84

1,297

118

Guanyin District,Taiwan Taiyo
Taoyuan City,
Ink Co., Ltd.
TaiwanOffice,Electronics factory, R&D
facility

2,548

281

824
(11,846)

65

3,720

134

Taiyo Ink
Mfg. Co.,(Korea) Ltd.

Ansan-si, Gyeonggi
Province,
South Korea

Office,Electronics factory, R&D
facility

1,167

169

232
(10,185)

157

1,726

130

Taiyo
Carson City, Nevada,America, Inc. United States

Office,Electronics factory, R&D
facility

84

139

54
(17,038)

4

283

41

Taiyo Ink
Hanoi,
Vietnam Co.,
Vietnam
Ltd

Office,Electronics factory, R&D
facility

403

324

−

6

734

40

Notes:
1. Carrying amount excludes construction in progress.
2. “Other” in the carrying amount indicates tools, furniture, and fixtures.

- 47 -

3. Capital investment plans
Our Group discloses planned investment for each segment.
For the one-year period following the consolidated fiscal year under review, we plan to invest a total of
8,200 million yen in property, plant and equipment as well as in software (building new facilities or developing
existing ones). The following table shows the segment breakdown.

Segment

Planned investments(as of March 31, 2025)(Millions of yen)

Main purposes

Source of funds

Electronics

5,200

Acquire facilities and other physicalassetsSelf-funded,borrowings

Medical and Pharmaceuticals

1,400

Acquire facilities and other physicalassetsSelf-funded,borrowings

600

Acquire facilities and other physicalassetsSelf-funded,borrowings

1,000

Acquire facilities and other physicalassetsSelf-funded,borrowings

Other
Trans-segment (Note)
Total

8,200

Note: Primarily related to the holding company (company filing the consolidated financial statements).

- 48 -

IV. Non-consolidated (Taiyo Holdings Co., Ltd.)
1. Share information(1) Number of shares
1) Total shares
Class

Total number of authorized shares

Common shares

100,000,000
Total

100,000,0002) Issued shares
Number of issued
shares(as of March 31, 2024)

Class

Number of shares
outstanding as of filingdate(shares)(as of June 17, 2024)

Stock exchanges where theshares are listed(or authorized financial
instruments associations)

Common shares

58,291,559

Tokyo Stock Exchange
58,291,559 (TSE)
Prime Market

Total

58,291,559

58,291,559–

Description

Number ofshares in one
unit
100(*Note)–Note: As resolved by the Board of Directors on June 27, 2023, we issued 106,058 new shares on July 14, 2023, to provide
for the restricted stock compensation and performance-linked stock compensation. The details are as follows.

(1)

Pay-in dateJuly 14, 2023

(2)

Number and class of shares

106,058 shares of common stock(3)

Issue price

2,677 yen per share(4)

Total value of issued shares

283,917,266 yen(5)Amount of funds raised

164,100,100 yen(6)Offering / allotment method

44,758 shares for the restricted stock compensation will be allottedwith specified transfer restrictions.
61,300 shares for performance-linked stock compensation will beallotted via third party allotment(7)

Contribution method

Allotment with specified transfer restrictions: Allottees exchangemonetary claims for the shares.
Third party allotment: Allottees purchase the shares with cash.

Recipients (number) andnumber of shares allotted

Allotment with specified transfer restrictions:
Four executive board directors of Taiyo Holdings to receive 44,758
sharesThird-party allotment:
Four executive board directors of Taiyo Holdings to receive 61,300
shares(8)(2) Stock options
1) System of stock options
None2) Shareholder rights planNone

- 49 -

3) Other stock options-related information
None- 50 -

(3) Convertible bonds with equity purchase warrants
None(4) Outstanding shares and share capital

Date

Increase
Balance of total
Increase
Increase(decrease) in
Balance of share
Balance of
number of(decrease) in(decrease) in
total number ofcapitalcapital surplus
outstanding
share capital
capital surplus
outstanding(Millions of yen)
(Millions of yen)shares(Millions of yen)
(Millions of yen)sharesJuly 16, 2019(*Note 1)

59,211

28,969,647

96

9,428

96

10,395

July 16, 2020(*Note 2)28,85528,998,502

71

9,499

71

10,467

July 16, 2021(*Note 3)

43,062

29,041,564

113

9,612

113

10,580

October 1, 2021(*Note 4)

29,041,564

58,083,128

–

9,612

–

10,580July 15, 2022(*Note 5)102,373

58,185,501

148

9,761

148

10,728July 14, 2023(*Note 6)

106,058

58,291,559

141

9,903

141

10,870Notes:
1. Share capital and capital surplus both increased by 96 million yen after we offered additional shares as part of specified
restricted stock compensation and performance-linked stock compensation.
Specified transfer-restricted stock, third party allotment method
Issue price:
3,250 yen
Stated value per share:
1,625 yen
Allottee (title):
Eiji Sato (President and CEO), Takayuki Morita*,
Eiji Takehara (Board Director), Hitoshi Saito (Board Director), Takao Miwa*
2. Share capital and capital surplus both increased by 71 million yen after we offered additional shares as part of specified
restricted stock compensation and performance-linked stock compensation.
Specified transfer-restricted stock, third party allotment method
Issue price:
4,970 yen
Stated value per share:
2,485 yen
Allottee (title):
Eiji Sato (President and CEO), Takayuki Morita*,
Eiji Takehara (Board Director), Hitoshi Saito (Board Director), Takao Miwa** The allottee resigned as board director on June 20, 2020.
3. Share capital and capital surplus both increased by 113 million yen after we offered additional shares as part of specified
restricted stock compensation and performance-linked stock compensation.
Specified transfer-restricted stock, third party allotment method
Issue price:
5,250 yen
Stated value per share:
2,625 yen
Allottee (title):
Eiji Sato (President and CEO), Eiji Takehara (Board Director), Hitoshi Saito (Board Director)
4. This was a result of a 2-for-1 stock split.
5. Share capital and capital surplus both increased by 148 million yen after we offered additional shares as part of specified
restricted stock compensation and performance-linked stock compensation.
Specified transfer-restricted stock, third party allotment method
Issue price:
2,903 yen
Stated value per share:
1,452 yen
Allottee (title):
Eiji Sato (President and CEO), Hitoshi Saito (Board Director), Eiji Takehara (Board Director),
Masao Arima (Board Director)
6. Share capital and capital surplus both increased by 141 million yen after we offered additional shares as part of specified
restricted stock compensation and performance-linked stock compensation.
Specified transfer-restricted stock, third party allotment method
Issue price:
2,677 yen
Stated value per share:
1,338 yen
Allottee (title):
Eiji Sato (President and CEO), Hitoshi Saito (Board Director), Eiji Takehara (Board Director),
Masao Arima (Board Director)- 51 -

(5) Share ownership
As of March 31, 2024
Share ownership (100 shares per share unit)
Category

National or
local publicorganizations

Financial
Overseas
Financial
Other
instruments
institutionsorganizations
operators
Organizations Individuals

Number ofshareholders

–

31

29

72

177

13

Total share
units held–

134,464

7,942

205,628

110,560

79

Ownership ratio
(%)

–

23.08

1.36

35.31

18.98

0.01

Individuals
Other

6,991

Total

Fractional
shares7,313–

123,864 582,537

37,85921.26

100.00Notes:
1. Of the 2,303,798 treasury shares, 23,037 share units are under “Individuals, Other,” and 98 shares are under “Fractional
shares.”2. The total share units held by “Other organizations” includes two units held in the name of Japan Securities Depository
Center, Inc.

- 52 -–

(6) Major shareholders
As of March 31, 2024

Name of individual ororganization

Address

Number ofshares held
(thousands)% of outstanding
shares(excluding
treasury shares)

DIC Corporation

35-58 Sakashita 3-chome, Itabashi-ku,
Tokyo, Japan

11,234

20.07

Kowa Co., Ltd.

4-8 Nakamura-kita 3-chome, Nerima-ku,
Tokyo, Japan

5,533

9.88

The Master Trust Bank of Japan,
Ltd. (manages our trust account)

Akasaka Intercity AIR, 8-1 Akasaka 1chome, Minato-ku, Tokyo, Japan

5,036

9.00

Custody Bank of Japan, Ltd.
(manages our trust account)

8-12 Harumi 1-chome, Chuo-ku, Tokyo,
Japan

3,176

5.67

Misaki Engagement Master Fund

190 Elgin Avenue, George Town, Grand
Cayman, KY 1-9005, Cayman Islands

2,477

4.42

SMBC Trust Bank Ltd.
(shares entrusted to Sumitomo
Mitsui Banking Corporation
retirement benefit trust account)

3-2 Marunouchi 1-chome, Chiyoda-ku,
Tokyo, Japan

2,232

3.99

Shikoku Kasei Holdings
Corporation

8-537-1, Doki-cho-higashi,
Marugameshi, Kagawa, Japan

1,490

2.66

The Bank of New York Mellon
140042240 Greenwich Street, New York, NY
10286, U.S.A.

1,166

2.08

Toshin Yushi Co., Ltd.

5-14-11 Umeda, Adachi-ku, Tokyo, Japan

1,077

1.92

Japan Post Insurance Co.,Ltd.

Otemachi Place West Tower, 3-1
Otemachi 2-chome, Chiyoda-ku, Tokyo,
Japan

1,004

1.79

–

34,427

61.49

Total

Notes:
1. Of the total number of shares held by The Master Trust Bank of Japan, Ltd., 4,985 thousand pertain to the trust account wekeep with this bank.
2. Of the total number of shares held by Custody Bank of Japan, Ltd., 3,174 thousand pertain to the trust account we keepwith this bank.

- 53 -

(7) Voting rights
1) Issued shares
As of March 31, 2024

Category

Number of voting
rightsNumber of shares

Description

Non-voting shares

−

−

−

Voting shares: treasury shares

−

−

−

Voting shares: other

−

−

−

Shares with full voting rights:
treasury, etc.

Common shares

2,365,900

622(*Note 1)

Full-voting shares: otherCommon shares

55,887,800

558,878(*Note 2)

Fractional shares

Common shares

37,859−(*Note 3)

Total issued shares

58,291,559−−

Total voting rights−

559,500−

Notes:
1. We hold 2,303,700 of these shares directly. The remaining 62,200 shares are held by The Master Trust Bank of Japan, Ltd.
(in the ESOP trust).
2. Of common shares listed in the “Number of shares” column, 200 are held in the name of Japan Securities Depository
Center, Inc. The center holds 2 of the full voting rights listed in the “Number of voting rights” column pertaining tocommon shares.
3. Includes 98 treasury shares owned by Taiyo Holdings Co., Ltd.

2) Treasury shares
As of March 31, 2024

Number of
Number of
Total number
shares held in shares held inof shares
own name
trust
held

% of
outstanding
sharesName of person ororganization

Address

Taiyo Holdings Co., Ltd.

388 Ohkura, Ranzanmachi,
Hiki-gun, Saitama, Japan2,303,700

62,2002,365,900

4.06

Total

−

2,303,700

62,2002,365,900

4.06

Notes:
1. The number of shares listed above does not include 138 fractional shares.
2. Reason for holding shares in trust:
They are held in trust as part of our ESOP. The trustee is The Master Trust Bank of Japan, Ltd. (address: Akasaka Intercity
AIR, 8-1 Akasaka 1-chome, Minato-ku, Tokyo, Japan).

- 54 -

(8) Employee stock ownership
1) Overview of employee stock ownership plan
Since we want our employees to dedicate themselves to improving our mid-to-long term
corporate value, we have introduced an employee stock ownership plan (ESOP) and a trust toadminister it.
ESOPs are common forms of employee ownership in the US. By adopting the ESOP model, acompany can offer a greater amount of stock compensation to its employees.
Under this ESOP, shares of the Company’s stock are held in a trust, the beneficiaries of which
are eligible employees of the Company. The trust purchases shares of the Company’s stock, either
from the Company or on the stock market, in an amount equivalent to the amount expected to bedelivered to the eligible employees. All purchases will comply with stock delivery rules established inadvance. Pursuant to said rules, the trust then delivers the shares to eligible employees during theirservice for no consideration, in an amount commensurate with the employee’s rank during the period
in which the shares were held in the trust. The trust’s purchases of shares are funded entirely by theCompany; employees bear none of the cost.
With an ESOP trust, our employees benefit financially when our stock price rises. Therefore,
they will keep our stock price in mind as they go about their duties and work all the harder. Anotherbenefit of an ESOP trust is that the voting rights from the shares underlying the trust property are
exercised in way that reflects the will of the recipient employees. In this way, the ESOP trust
encourages the employees to participate in management and thus help boost the corporate value.
2) Total number of shares we expect employees to receive
62,240 shares
3) Beneficiaries of the ESOP trust and those eligible for related benefits
Employees who meet the beneficiary requirements- 55 -

2. Treasury share purchases
Classes of shares
We purchase common shares as defined in Article 155-3 of the Companies Act, and common shares as
defined in Article 155-7 of said Act.
(1) Purchases approved by General Shareholders’ Meeting
None(2) Purchases approved by the Board of Directors
Category

Total purchase price(yen)

Number of shares

Purchase plan approved on May 1, 2023
(Purchase period: July 3, 2023 to March 29, 2024)

2,000,000

3,000,000,000

Treasury shares purchased before the fiscal year ended March
31, 2024−−

Treasury shares purchased during the fiscal year ended March
31, 2024−−

2,000,000

3,000,000,000

100.0

100.0

−

−

100.0

100.0

Outstanding approved purchases
Unexercised portion as of end of the fiscal year ended March
31, 2024 (%)
Treasury shares purchased during purchase period
Unexercised portion as of filing date (%)(3) Purchases approved by neither of the above
Category

Total purchase price(yen)

Number of shares

Treasury shares purchased during the fiscal year ended March
31, 2024
Treasury shares purchased during purchase period

248

653,568−−

Notes:
1. Treasury shares purchased during purchase period exclude fractional share purchases occurring between June 1, 2024 andthe date we filed this annual securities report.
2. The number of treasury shares purchased excludes treasury shares acquired by the ESOP trust.

- 56 -

(4) Treasury shares disposed, treasury shares held
Fiscal year ended March 31, 2024
Category

Purchase period

Total disposition
value
(Yen)

Number ofsharesTotal disposition
value
(Yen)

Number ofsharesTreasury shares for which we solicited
subscriptions

–

–

–

–

Treasury shares cancelled

–

–

–

–

Treasury shares we transferred as partof a merger, stock swap, sharesdelivered as payment, or company
split

–

–

–

–

Other
Treasury shares we purchased for
ESOP trust

63,360115,333,572

60

109,216

Treasury shares we continue to hold2,366,038−

2,365,978−Notes:
1. “Treasury shares we continue to hold” includes shares in our ESOP trust, which we purchased as follows:
Fiscal year under review: 62,240
Purchase period: 62,180
The number of treasury shares held in the ESOP trust during the purchase period includes those shares transferred from thetrust to employees between June 1, 2024 and the date we filed this annual securities report.
2. The treasury shares we continued to hold during the purchase period does not reflect any purchases or transfers offractional shares occurring between June 1, 2024 and the date we filed this annual securities report.

- 57 -

3. Shareholder returns
Returning profits to shareholders is a top priority for us. We deliver high returns to shareholders
consistently and sustainably. The dividend on equity (DOE) ratio target for shareholder returns in our longterm management plan is to maintain a consolidated DOE ratio of 5% or more over the long term.
Based on the above policy, we declared an interim (end of second quarter) dividend of 38.00 yen per
share.
The year-end dividend was set at 42.00 yen per share. These dividends combined bring the annual
dividend for the fiscal year under review to 80.00 yen per share, with a DOE ratio of 5.1%.
For the next fiscal year, we plan to pay a dividend of 80.00 yen per share. This includes an interim
dividend of 40.00 yen per share and a year-end dividend of 40.00 yen per share.
The following table shows the dividends from retained earnings for the fiscal year under review:
Date resolved

Total dividends(Millions of yen)

Dividend per share(Yen)

November 6, 2023
(resolved by the Board of Directors)

2,127

38.00

June 15, 2024
(resolved at Ordinary General
Meeting)

2,351

42.00

- 58 -

4. Corporate governance(1) Outline of corporate governance system
1) Our basic approach to corporate governance• The Company has set forth its aims as a corporate group under its “Management Philosophy” and“Basic Management Policy.”• Its “Management Philosophy” has been set forth as the following: “To achieve ‘a cheerful society’by further advancing ‘every technology’ in our Group and by creating a wide range of innovative
products to fulfill the dreams of the world.” It is expressly stated under this policy that the Group’s
reason for existence is to achieve a cheerful society by further advancing “every technology” at eachGroup company and by going beyond its existing products to create a wide range of innovate
products to fulfill the dreams of the world.
• The following is set forth as a part of the Company’s “Basic Management Policy:” “In achieving its
management philosophy, the Group will fulfill its corporate social responsibility, including
protecting the environment, enforcing quality control, and contributing to society.” It is expressly
stated under this policy that going beyond the pursuit of profit to fulfill the Group’s social
responsibility constitutes its basic management policy.
• Based on its “Management Philosophy” and “Basic Management Policy,” the Company recognizes
that the trust and support of its stakeholders is indispensable in growing in perpetuity as a listedcompany, and that securing management transparency, fulfilling its accountability and conducting
the satisfactory disclosure of information are musts to that end.
2) Corporate governance structures and the reasons for adopting them
• Outline of corporate governance structures
A resolution on partial amendment of the Articles of Incorporation to provide for transition to
a company with an Audit &Supervisory Committee was passed at the 78th Ordinary General
Shareholders’ Meeting held on June 15, 2024. Taiyo Holdings Co., Ltd. transitioned from a company
with an Audit & Supervisory Board to a company with an Audit & Supervisory Committee on thesame day. As a result of this transition, the organizational structure now consists of four board
directors (excluding board directors who are Audit & Supervisory Committee members, one ofwhom is an outside board director) and three board directors who are Audit & Supervisory
Committee members (two of whom are outside board directors). The supervisory function of theBoard of Directors has been strengthened by granting voting rights in Board of Directors meetings
to board directors who are Audit & Supervisory Committee members. The number of board
directors was also reduced from the previous nine (four of whom were outside board directors) toseven (three of whom are outside board directors). The objective of this reduction is to further
enhance the corporate governance system, mainly by speeding up and enhancing agility in making
decisions.

- 59 -

Our Board of Directors and our Audit & Supervisory Committee lie at the core of ourcorporate governance system. The directors on the Board of Directors and directors who are Audit &Supervisory Committee members and serve on the Audit & Supervisory Committee are elected byresolution of the General Shareholders' Meeting. The Board of Directors discusses and resolves allimportant matters and monitors business execution by the representative directors. The Audit &Supervisory Committee monitors the business activities of directors and operational status ofgovernance from a neutral and objective perspective to ensure sound development of the Taiyo
Group as a whole, based on an appropriate corporate governance system. We adopted a delegative
executive officer system to energize the Board of Directors and streamline the business execution
process. Executive officers provide support to enable the Company to adapt swiftly to changes in thebusiness climate by exercising discretionary power over a wide range of business matters. The
Nomination and Compensation Committee was established as an advisory body to the Board of
Directors and Audit & Supervisory Committee. This committee deliberates on the nomination ofboard directors and senior corporate executive officers, and on the compensation of board directors,
senior corporate executive officers, and executive officers to secure the reasonableness, objectivity,transparency, and fairness of the nomination and compensation policy. The committee reports theresults of these deliberations to the Board of Directors and the Audit & Supervisory Committee. The
Nomination and Compensation Committee have at least half of its members consist of independent
outside board directors to bolster its independence. The figure below shows the organizational
relationships between the bodies mentioned above.

Members of the Nomination andCompensation Committee
Eiji Sato (President and CEO)Keiko Tsuchiya (Outside Board Director)
Ikumi Sato (Outside Board Director)- 60 -

• Reasons for adoption of current corporate governance system
Our goal is to enhance corporate governance and realize swift decision-making. To
accomplish this, the Company has pursued the improvement of its organizational framework byintroducing an in-house company system and an executive officer system to delegate decisionmaking and execution. The transition to the institutional design of a company with an Audit&Supervisory Committee clearly separates the supervisory function from the business executionfunction and strengthens the Board of Directors monitoring function to further enhance corporate
governance. The Board of Directors can also delegate the authority to make decisions on businessexecution to directors. This streamlines management decision-making to further enhance corporate
value.
3) Other corporate governance matters• Internal controls and risk management
The Companies Act and the Ordinance for Enforcement of the Companies Act specify certain
compliance matters for which companies should develop structures and measures. Described below
are the structures and measures that we have developed for each compliance matter.
System for ensuring that the performance of duties by board directors and employees conforms withlaws, ordinances, and the Company’s Articles of Incorporation
a. A “CSR Philosophy” and “Code of Conduct” will be established and board directors andemployee awareness thereof will be enforced.
b. The scope of duties and powers of board directors (excluding board directors who are Audit &Supervisory Committee members) and employees as well as procedures for final approval will
be clarified in the “Board of Directors Regulations,” “Regulations of Segregation of Duties,”“Responsibilities and Authorities Table” and “Regulations on Internal Memos for Approval,” anda structure in which mutual controls function will be promoted.
c. An internal audit department independent from the execution department will be established toreport the results of audits by the former at meetings of the Board of Directors and Audit &Supervisory Committee and make reports to the accounting auditor as well if necessary.
d. A whistleblowing system will be operated with internal personnel and outside attorneys as thepoints of contact for receiving information.
e. Qualified candidates at the general manager level or above with knowledge of legal affairs andethics will be elected as “compliance officers.” An Ethics Committee made up of Board
Directors and employees will be established to examine significant issues from an ethical andlegal compliance standpoint. Employees will be elected to serve as personnel in charge of ethics
and promote associated activities.
f. The compliance officer will make regular reports on the status of ethics and legal compliance tothe Board of Directors.
Matters on the storage and management of information pertaining to execution of duties by Board
Directors (excluding Board Directors who are Audit & Supervisory Committee members)
Information pertaining to the execution of duties by Board Directors (excluding Board
Directors who are Audit & Supervisory Committee members) will be recorded in documents orelectromagnetic media and stored in accordance with the “Document Management Regulations.”
Board Directors may view these documents at any time.
Regulations on management of loss risk and other systems
a. One board director (excluding board directors who are Audit & Supervisory Committee
members) will be elected as the board director in charge of risk management.
b. Risk in standard business will be evaluated and responded to by the department in charge of thatbusiness in accordance with the “Risk Management Regulations.” Additionally, a Risk
Management Committee will be formed as necessary to laterally manage risk across the entire
Group and help reduce and prevent risk.
c. When emergency situations occur, prompt reporting, information-sharing and countermeasures
will be examined, formulated and implemented in accordance with “the Risk Management- 61 -

Regulations” and “Escalation Flow.” Additionally, an Emergency Response Headquarters will beestablished as necessary to help minimize damage (losses) under the command of said
headquarters.
System for ensuring that the duties of board directors (excluding board directors who are Audit &Supervisory Committee members) are being performed efficiently
a. Meetings of the Board of Directors will be held once a month in principle (with meetings to be
integrated with that for the prior or following month in some cases). If necessary, extraordinary
meetings of the Board of Directors will be held to flexibly make decisions on important matters.
b. Responsibilities and execution procedures pertaining to business execution will be prescribed in
the “Organization Regulations,” “Regulations on Segregation of Duties” and “Responsibilities
and Authorities Table.”c. Single-year management plans and medium- to long-term management plans will be formulated,and missions and short-, medium- and long-term challenges to address for each organization willbe established.
System for ensuring appropriateness of duties in corporate group made up of Company and its
subsidiaries
a. Persons to be in charge of each main subsidiary will be selected from board directors (excluding
board directors who are Audit & Supervisory Committee members) to administer management
guidance.
b. Meetings of a Board of Executive Directors consisting of executive officers of the Company andsubsidiary representatives will be held regularly, at least four times a year, to examine crosscompany issues of the corporate group.
c. Regarding the management of subsidiaries, the Company shall render final approval and a reportshall be made to the Company in accordance with the “Subsidiary Management Regulations”
and “Subsidiary Authority Table” while respecting subsidiary autonomy. Subsidiary management
shall be administered based on this.
d. The internal audit department, accounting and finance department, board directors who are Audit& Supervisory Committee members and accounting auditors will perform visiting audits ofsubsidiaries if necessary.
e. In order to ensure that the execution of duties by board directors, etc. and employees ofsubsidiaries conforms with laws, ordinances and the Company’s Articles of Incorporation, a“CSR Philosophy” that applies to all Group companies will be set forth, and a code of conduct
based on that “CSR Philosophy” will be set forth at each Group company.
Matters on employees who should assist Audit & Supervisory Committee in cases where theCommittee requests assignment of such employees and matters on independence of said employees
from board directors (excluding board directors who are Audit & Supervisory Committee members)a. When the Audit & Supervisory Committee requests the assignment of employees to assist withthe duties of board directors who are Audit & Supervisory Committee members, the employeesof the Company will be assigned as staff of board directors who are Audit & Supervisory
Committee members. The staffs will provide dedicated assistance under the command andcontrol of board directors who are Audit & Supervisory Committee members.
b. Personnel evaluations for full-time staff of board directors who are Audit & Supervisory
Committee members shall require the agreement of board directors who are Audit & Supervisory
Committee members.
System for board directors (excluding board directors who are Audit & Supervisory Committee
members) and employees to make reports to Audit & Supervisory Committee and other systems formaking reports to the Committeea. In addition to legally-stipulated matters, when they discover that violations of laws, ordinancesor the Company’s Articles of Incorporation are present or that matters that affect the businessresults of the Company and/or its subsidiaries are present, board directors (excluding board
directors who are Audit & Supervisory Committee members) will report them to board directors
who are Audit & Supervisory Committee members in each case.
- 62 -

b. When they discover that facts that run the risk of significantly damaging the Company and/or its
subsidiaries or that violations of laws, ordinances or the Company’s Articles of Incorporation arepresent, employees may directly report them to board directors who are Audit & Supervisory
Committee members. Note that the secrecy of the name, etc. of reporters will be strictly guarded
and that the disadvantageous treatment of reporters attributed to their reporting of the foregoingis prohibited.
Other systems for ensuring that audits by Audit & Supervisory Committee are effectively conducted
a. In addition to attending meetings of the Board of Directors, meetings of the Board of Executive
Officers and other key meetings, board directors who are Audit & Supervisory Committee
members will review important documents pertaining to business execution and, if necessary,ask board directors (excluding board directors who are Audit & Supervisory Committee
members) and/or employees to explain them.
b. Board directors who are Audit & Supervisory Committee members will perform audits while
mutually cooperating with the accounting auditor. This includes exchanging opinions on audit
plans and results.
c. An internal audit department independent from execution departments has been established. This
department maintains close cooperation with board directors who are Audit & Supervisory
Committee members, including reporting the results of internal audits to board directors who are
Audit & Supervisory Committee members and discussing the results with them.
d. The Company will post a budget every year for expenses that arise in the execution of duties byboard directors who are Audit & Supervisory Committee members and will also disburse areasonable amount for audit expenses that suddenly arise.
System for ensuring reliability of financial reporting
To ensure the reliability of financial reporting, an internal controls system pertaining tofinancial reporting will be established and operated. Ongoing evaluations of whether that system
is properly functioning as well as necessary corrections will be conducted. Through this, theeffective and appropriate submission of internal controls reports based on the Financial
Instruments Exchange Act will be conducted.
Basic views on elimination of anti-social forces and status of development
The Company does not respond whatsoever to illegal or unjust demands of anti-social
forces that run the risk of obstructing social order or sound corporate activities. Should theCompany be issued unjust demands from such a group or individual, it will respond firmly as anorganization while cooperating with the police and other related institutions.
• Limited liability agreements
Under Article 423-1 of the Companies Act, corporate officers are personally liable for any
damages resulting from breaches or non-performance of their fiduciary duties. As permitted by
Article 427-1, we have signed agreements with our non-executive directors limiting such liability to
the extent permitted by law. The maximum amount of liability for damages under this agreement is
the legally mandated amount. These agreements exclude cases where the breach or non-performance
constitutes willful misconduct or gross negligence by a board director (excluding board directors
who serve in an executive capacity).
• Number of board directors
Our Articles of Incorporation stipulate the number of board directors (excluding board
directors who are Audit & Supervisory Committee members) must be no more than ten. The numberof board directors who are Audit & Supervisory Committee members must be no more than four.

- 63 -

• Resolution requirements for electing board directors
Our Articles of Incorporation stipulate that shareholders elect board director candidates
through a majority of the voting rights of the shareholders present at the meeting where theshareholders holding one-third or more of the voting rights of the shareholders are present. In
addition, the Articles of Incorporation prohibit cumulative voting.
• Acquiring treasury shares
As specified in Article 165-2 of the Companies Act, we have included a stipulation in the
Articles of Incorporation permitting the company to acquire treasury shares with a resolution of theBoard of Directors. We included this stipulation because acquiring treasury shares through a market
transaction allows us to pursue capital policies flexibly according to business conditions.
• Dividends of surplus
To enable flexibility in returns to shareholders, the Articles of Incorporation provide for thedeclaration of dividends of surplus for which a discretionary record date is set, in addition to midterm and fiscal year-end dividends by resolution of the Board of Directors.
• Board of Directors, Compensation Advisory Committee, and Nomination Advisory Committee
activities
a. Board of Directors activities
During the fiscal year under review, the Board of Directors met 10 times. The attendance ofeach member is reported below.
Title

Name

Attendance record

President and CEO

Eiji Sato

100% (10/10)

Executive Vice President

Hitoshi Saito

100% (10/10)

Board Director

Eiji Takehara

100% (10/10)

Board Director

Masao Arima

100% (10/10)

Board Director

Tomoyuki Tanaka

100% (10/10)

Outside Board Director

Masayuki Hizume

100% (10/10)

Outside Board Director

Keiko Tsuchiya

90% (9/10)

Outside Board Director

Asako Aoyama

100% (10/10)

Outside Board Director

Yumiko Kamada

100% (10/10)

Outside Audit & Supervisory Board Member

Hidenori Sugiura

100% (10/10)

Audit & Supervisory Board Member

Kaori Terunuma

100% (10/10)

Outside Audit & Supervisory Board Member

Ikumi Sato

100% (10/10)

Outside Audit & Supervisory Board Member

Akihito Sakai

100% (2/2)

Notes:
1. There was one written resolution deemed to a Board of Directors resolution, pursuant to Article 370of the Companies Act and Article 28 of our Articles of Incorporation.
2. There were two Board of Directors meetings held before the resignation of Akihito Sakai, an outside
Audit and Supervisory Board member from the Audit and Supervisory Board at the conclusion of theOrdinary General Shareholders’ Meeting held on June 17, 2023.

Detailed description of deliberations〇 Board of Directors function and composition
Our Board of Directors delegates authority over execution of business to membersof management to facilitate swift decision-making. This serves to strengthen the corporate
governance system and separate the business supervision and execution functions. In thefiscal year ended March 31, 2024, The Board of Directors deliberated on an institutional
design and consequently resolved to transition to a company with an Audit &Supervisory- 64 -

Committee. We will continue to engage in a series of discussions concerning anappropriate governance system, and building and operating the system.
〇 Sustainability
Because sustainability is an important management issue, we have named
strengthening initiatives targeting achievement of the sustainable development goals(SDGs) as one of the basic policies of our long-term management plan. During the Boardof Directors meetings held in fiscal year ended March 31, 2024, directors engaged in aseries of discussions concerning initiatives mainly revolving around the four topics ofgovernance, strategy, risk management, and metrics and targets in relation to response to
climate change and investment in human capital, and determined the policy on
information disclosure. We will continue our deliberations to specify and resolve issues
relating to sustainability.
〇 Progress on the long-term management plan
The Board of Directors discusses how to achieve long-term growth and respondswiftly to changes in the business environment. During the Board of Directors meetings
held in fiscal year ended March 31, 2024, directors checked progress on “Beyond
Imagination 2030,” our long-term management plan, which was formulated in June 2021,
and discussed whether there were policies, plans, etc. that should be revised in the current
uncertain business environment. These discussions focused closely on whether thenecessary steps have been taken to mitigate country-specific risks, which could affect theElectronics business in particular. The Board of Directors will continue to discuss changes
in the business environment that could affect the accomplishment of our long-term
management plan, as appropriate.
b. Compensation Advisory Committee activities
During the fiscal year under review, the Compensation Advisory Committee met three times.
The attendance of each member is reported below.
Title

Name

Attendance record

Chair

Asako Aoyama

100% (3/3)

Member

Eiji Sato

100% (3/3)

MemberMasayuki Hizume

100% (3/3)

Note: In addition to the number of Compensation Advisory Committee meetings held, there was one
resolution of the committee deemed to be a written resolution.

Detailed description of deliberations
We have transitioned to a company with an Audit & Supervisory Committee, in
addition to introducing an in-house company business system and delegative executive
officer system to streamline decision-making by separating the auditing/supervisory function
from the executive function. The Compensation Advisory Committee discussed changing thecompensation system by introducing a post issuance-type restricted stock granting plan for
executive officers. We invited an external consultant to join deliberations as an opportunity toreceive advice and information from an objective and independent perspective. The
compensation system built through the series of deliberations was reported to the Board of
Directors. Based on the policy on determining compensation of board directors, thecommittee also deliberated on the base salary of board directors (excluding board directors
who are Audit & Supervisory Committee Members), the method of calculating performancelinked cash compensation and performance-linked stock compensation, and the amount of
restricted stock compensation for executive directors, and reported on such deliberations to
the Board of Directors.

- 65 -

c. Nomination Advisory Committee activities
During the period under review, the Nomination Advisory Committee met three times. The
attendance of each member is reported below.
Title

Name

Attendance record

Chair

Keiko Tsuchiya

100% (3/3)

Member

Eiji Takehara

100% (3/3)

MemberYumiko Kamada

100% (3/3)

MemberIkumi Sato

100% (3/3)

Detailed description of deliberations
The committee examined the composition of the Board of Directors in the next fiscal
year, accompanying the transition to a company with an Audit & Supervisory Committee. Aspart of this examination, the committee discussed changing the method and items in officer
evaluations as well as the appropriateness of candidates for new board director positions andfor newly established senior corporate executive officer positions. Following repeateddiscussions, the results of the evaluations of candidates for board director and senior
corporate executive officer positions in the next fiscal year were reported to the Board of
Directors.

- 66 -

(2) Corporate officers
1) List of corporate officers
We have four male and three female corporate officers (percentage of female corporate officers:
42.9%).
Title

Name

October 1999
June 2008
April 2010
July 2010 T
March 2011
April 2011

Eiji Sato

Shares held(Thousands)

Tohmatsu & Co. (now Deloitte Touche Tohmatsu LLC)
(Joined)es Networks Co., Ltd. President
Taiyo Holdings Co., Ltd. Board Director
Taiyo Holdings Co., Ltd. Executive Vice President andRepresentative Director
Taiyo Ink International (Singapore) Pte Ltd Director
es Holdings Co., Ltd. (currently es Networks Co., Ltd.) Director
Taiyo Holdings Co., Ltd. President, Chief Executive Officer,
Group Chief Executive Officer (present post)
Taiyo Ink (Suzhou) Co., Ltd. Director
Onstatic Technology Co., Ltd. Director
Taiyo Ink Mfg. Co., Ltd. President and Representative Board(*Note 2)
Director
Taiyo Green Energy Co., Ltd. President and Representative
Board Director
Taiyo Holdings Co., Ltd. Officer in charge of risk management(present post)
Taiyo Pharma Co., Ltd. Chairman of the Board andRepresentative Director (present post)
Taiyo Ink Mfg. Co., Ltd. Board Director
Taiyo Pharma Tech Co., Ltd. Board Director
Taiyo Pharma Tech Co., Ltd. President and Representative
Board Director (present post)
Taiyo Holdings Co., Ltd. CEO of Medical & Pharmaceutical
Company (present post)
funlead corp. Board Director (present post)(Common)507

Career history
April 1992

President
and CEO

Term ofofficeDate of birth

May 3, 1969

April 2012
December 2012
April 2014
December 2014
June 2016
August 2017
June 2018
April 2019
October 2019
May 2022
April 2023

- 67 -

TitleExecutive Vice
President

NameHitoshi
Saito

Term ofofficeShares held(Thousands)

November 1995 Win System Inc. (Win System Europe) Marketing Manager
September 1996 Taiyo Ink Mfg. Co., Ltd. (now Taiyo Holdings Co., Ltd.)(Joined)June 2001
Taiyo Ink International (Singapore) Pte Ltd Managing Director
July 2001
Taiyo Ink (Thailand) Co., Ltd. General Manager/Director
July 2010
Taiyo Ink Mfg. Co., Ltd. (now Taiyo Holdings Co., Ltd.)
General Manager of International Business Department
June 2012
Taiyo Ink Mfg. Co., Ltd. Board Director (present post)
April 2015
Taiyo Ink Products Co., Ltd. President and CEO
May 2016
Taiyo Ink Mfg. Co., (Korea) Ltd. President and CEO
June 2016
Taiyo Holdings Co., Ltd. Board Director
July 2016
Taiyo Holdings Co., Ltd. Board Director and Senior Executive
Officer
April 2019
Taiyo America, Inc. Board Director (present post)
October 2019
Taiyo Ink International (Singapore) Pte Ltd. Board Director(present post)
February 2020
Taiyo Trading (Thailand) Co., Ltd. Board Director (present
post)
April 2020
Taiyo Ink Mfg. Co., (Korea) Ltd. Chairman and CEO
April 2020
Taiyo Ink Products Co., Ltd. Chairman and CEO
May 2020
Taiwan Taiyo Ink Co., Ltd. Chairman of the Board (present
post)(*Note 2)
May 2020
Onstatic New Material (Jiangxi) Co., Ltd. Board Director(present post)June 2020 Onstatic Ink (Shenzhen) Co., Ltd.
Board Director
June 2020
Taiyo Circuit Automation, Inc. Board Director (present post)
June 2020
Taiyo Ink Vietnam Co., Ltd. Chairman (present post)
October 2021
Onstatic Technology Co., Ltd. Chairman of the Board (present
post)
December 2021 Taiyo Ink (Suzhou) Co., Ltd. Chairman of the Board (present
post)
December 2021 Onstatic Ink (Shenzhen) Co., Ltd. Chairman of the Board(present post)
January 2022
TBF Semiconductor Material (Shenzhen) Co., Ltd. Board
Director (present post)
January 2022
Taiyo Ink Trading (Shenzhen) Co., Ltd. Chairman of the Board
January 2022
Taiyo Ink Mfg. Co., (Korea) Ltd. Board Director (present post)
January 2022
Taiyo Ink Products Co., Ltd. Board Director (present post)
May 2022
Taiyo Holdings Co., Ltd. CEO of Electronics Company (present
post)June 2022
Taiyo Holdings Co., Ltd. Executive Vice President (present
post)
October 2023
Taiyo Ink Trading (Shenzhen) Co., Ltd. Chairman of the Board(present post)(Common)112

Date of birth

April 21,1965

Career history

April 1991
October 2012
January 2015
Board Director

Kiyofumi
TakanoNovember 4,
1965

January 2016
January 2019
January 2021

June 2024

Dainippon Ink and Chemicals, Incorporated (now DIC
Corporation) (Joined)
DIC Corporation General Manager of Core Value ResearchCenter, R&D Management Unit
DIC Corporation General Manager of Corporate Marketing
Department
DIC Corporation General Manager of New Business Planning
Department
DIC Corporation Executive Officer and General Manager of
New Business Development Headquarters
DIC Corporation Managing Executive Officer and General
Manager of New Business Development Headquarters (present
post)
Taiyo Holdings Co., Ltd. Board Director (present post)- 68 -(*Note 2)(Common)−TitleName

July 2004
October 2005

Keiko
Tsuchiya

May 13, 1960

January 2009
February 2011
August 2015
January 2016
June 2017
June 2019
June 2020
April 2024
April 2005
August 2013
March 2016
June 2019

Board Director
Full-time Audit &Supervisory
Committee
MemberJanuary 2020
Kaori
Terunuma

December 29,
July 2020
1982
October 2020
June 2022
June 2022
June 2024

April 1984
July 1998
July 2000
October 2003
April 2004
April 2005
Board Director
Full-time Audit &Supervisory
Committee Mmber

April 2006
HidenoriSugiuraShares held(Thousands)

Dentsu Inc. (Joined)
Ferag Japan Co., Ltd. (Joined)
Australian Trade Commission, Tokyo (Joined)
Becton Dickinson Co., Ltd. HR Planning & Organizational
Effectiveness Director
Human Value Inc. Chief Researcher & Producer
GE Toshiba Silicones Co., Ltd. (now Momentive Performance
Materials Japan LLC) Executive Officer and General Manager,
Human Resources for Pacific Region
Cisco Systems LLC Senior HR Manager
Johnson & Johnson Medical Company Vice President, Human
Resources
Adecco Ltd., Japan Chief Human Resources Officer
Adecco Ltd., Japan Director and General Manager of People
Value
Taiyo Holdings Co., Ltd. Outside Board Director (present post)
Teachers Initiative Director (present post)
Nippon Light Metal Holdings Co., Ltd. Outside Director(present post)
ToBeings Co., Ltd. Advisor (present post)(*Note 2)(Common)0

Mitsui & Co., Ltd. (Joined)
CROSS FIELDS (Joined)
coconala Inc. (Joined)
Taiyo Ink Mfg. Co., Ltd. (now Taiyo Holdings Co., Ltd.)(Joined)Taiyo Holdings Co., Ltd. General Manager of the Accounting
Department
Taiyo Ink (Suzhou) Co., Ltd. Auditor
Taiyo Ink Products Co., Ltd. Auditor
Taiyo Holdings Co., Ltd. Audit & Supervisory Board Member(present post)
Taiyo Ink Mfg. Co., Ltd. Audit & Supervisory Board Member(present post)
Taiyo Holdings Co., Ltd. Board Director (Audit & Supervisory
Committee Member) (present post)(*Note 3)(Common)1

The Long-Term Credit Bank of Japan, Ltd. (Joined)
UBS Trust & Banking (Japan) Ltd. (Joined)
IBJ Securities Co., Ltd. (now Mizuho Securities Co., Ltd.)(Joined)Mizuho Securities Co., Ltd. General Manager of Investment
Bank 4th Department, Investment Bank Group
Mizuho Securities Co., Ltd. General Manager of Corporate
Finance Division No. 1, Capital Markets Group
Mizuho Securities Co., Ltd. Senior Fellow of Strategic
Research Dept., Management Planning Group
Kyoto University Distinguished Associate Professor of
Graduate School of Management
Hitotsubashi University Part-time Lecturer of Graduate Schoolof Commerce and Management
Kyoto University Distinguished Professor, Graduate School ofManagement
Taiyo Holdings Co., Ltd. Outside Audit & Supervisory Board
MemberTaiyo Pharma Tech Co., Ltd. Audit & Supervisory Board
Member (present post)
ANZU no MORI FOUNDATION Auditor (present post)
Orion Breweries, Ltd. Outside Audit & Supervisory Board
Member (present post)
Taiyo Holdings Co., Ltd. Outside Board Director (Audit &Supervisory Committee Member) (present post)(*Note 3)(Common)−Career history
April 1981
April 1989
April 1991
January 1994

Board Director

Term ofofficeDate of birth

March 20,1961

October 2007
April 2008
June 2018
April 2019
April 2023
November 2023
June 2024- 69 -

TitleName

Date of birth

Career history

Shares held(Thousands)(*Note 3)(Common)−April 1990
March 1992

Board Director(Audit &Supervisory
Committee
Member)Ikumi Sato

Registered as an attorney at law (Tokyo Bar Association)
Cancellation of registration in Tokyo Bar Association for travelto the United States
September 1995 Registered as an attorney, State of New York, USA
September 1995 Re-registered as an attorney at law (Daini Tokyo Bar
Association)
March 2013
Yabuki Law Offices (Joined)
April 2017
Daini Tokyo Bar Association Deputy Chair
April 2018
Japan Federation of Bar Associations Executive Governor
April
2019
Ministry of Internal Affairs and Communications Information
December 25,
Disclosure and Personal Information Protection Commission
1963
MemberJune 2019
DAI-DAN Co., Ltd. Audit & Supervisory Board Member
January 2021
Nozomi Sogo Attorneys at Law Partner and Attorney (present
post)
April 2021
Japan Attorneys National Pension Fund Executive Governor
June 2021
DAI-DAN Co., Ltd. Outside Director (present post)
June 2022
Taiyo Holdings Co., Ltd. Outside Audit & Supervisory Board
MemberJune 2024
Taiyo Holdings Co., Ltd. Outside Board Director (Audit &Supervisory Committee Member) (present post)

Term ofoffice(Common)
621

Total

Notes:
1. Keiko Tsuchiya, Hidenori Sugiura, and Ikumi Sato are outside board directors.
2. From the conclusion of the 78th Ordinary General Shareholders’ Meeting held on June 15, 2024 until the conclusion of the final General Shareholders
Meeting in the fiscal year ending within one year of the 78th Ordinary General Shareholders Meeting.
3. From the conclusion of the 78th Ordinary General Shareholders’ Meeting held on June 15, 2024 until the conclusion of the final General Shareholders
Meeting in the fiscal year ending within two years of the 78th Ordinary General Shareholders Meeting.
4. We adopted an executive officer system to energize the Board of Directors and streamline the decision-making process. There are 16 executive officers:
Senior Corporate Executive Officer
Senior Corporate Executive Officer
Senior Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

Masao Arima
Shoji Minegishi
Daisuke Mishima
Taiyen Tsai
Naohiro Arata
Terumichi Tawara
Hideyuki Goto
Keiichi Kobayashi
Hidekazu Miyabe
Sayaka Tomioka
Takuji Maekawa
Bae Hyungki
Yukiko Yoshino
Taisuke Ikeda
Taro Onishi
Nobuhito Ito

5. Taiyo Holdings Co., Ltd. elects one standby Audit & Supervisory Committee member as specified in Article 329-3 of the Companies Act to prepare for asituation in which the company lacks the legally mandated number of Audit & Supervisory Committee members. The effective term of the Board of
Directors resolution on electing a board director as a standby Audit & Supervisory Committee member is for two years after election by the Ordinary
General Shareholders Meeting held on June 15, 2024, until the beginning of the final General Shareholders' Meeting in the fiscal year ending within thesecond year. The term of a board director as a standby Audit & Supervisory Committee member is from the date appointed until the expiration of the term
for the board director who was Audit & Supervisory Committee member and resigned before completion of that member’s term.
The career history of the board director serving as a standby Audit & Supervisory Committee member is provided below.
The board director serving as a standby Audit & Supervisory Committee member fulfills the requirements for an outside board director.
Name

Date of birth

Career history
April 1997

Masahiko Todo

July 17, 1968
January 2005

Registered as an attorney at law (Daini Tokyo Bar
Association)
Ushijima & Associates (now Ushijima & Partners, Attorneysat-Law) (Joined)
Ushijima & Partners Partner (present post)- 70 -

Shares held(Thousands)−

2) Outside board members
We have three outside board directors (two of whom are outside board directors who are Audit& Supervisory Committee members).
• Keiko Tsuchiya (outside board director) serves as an outside director of Nippon Light Metal
Holdings, a director of Teachers Initiative, and an advisor of ToBeings Co., Ltd. We have no special
relationship with any of those organizations.
• Hidenori Sugiura (outside board director) serves as auditor of ANZU no MORI Foundation, outside
Audit & Supervisory Board member of Orion Breweries, Ltd., and on the Audit & Supervisory
Board of Taiyo Pharma Tech Co., Ltd. We have no special relationship with ANZU no MORIFoundation and Orion Breweries, Ltd. Taiyo Pharma Tech Co., Ltd. is a consolidated subsidiary of
Taiyo Holdings Co., Ltd.
• Ikumi Sato (outside board director) is a partner of Nozomi Sogo Attorneys at Law and an outside
director of Dai-Dan Co., Ltd. We have no special relationship with any of those organizations.
• Shares held by outside officers are listed in 1) List of corporate officers.
We have established a set of criteria for confirming the independence of outside board
directors. The criteria are based on the TSE independence standards and qualification for independent
directors. We have deemed all of our outside board directors as independent under the TSE’s
independence standards, having judged that they present no actual or potential conflict of interest withgeneral shareholders. Moreover, they have all demonstrated the ability to duly supervise and audit the
management from an impartial perspective, drawing on their professional expertise and experience inother organizations.
Presented below is our set of criteria for determining independence.
Criteria for Determining the Independence of Outside Board Directors and Outside Audit &Supervisory Board Members
A board director poses no conflict of interest with general shareholders and is deemed
independent from its management of Taiyo Holdings Co., Ltd., if none of the following apply.
(1) Business relationship
1) The person is a major supplier of Taiyo Holdings or is a senior manager of such. “Major
supplier of Taiyo Holdings” means a supplier for which Taiyo Holdings accounts for at least
2% of the supplier’s average consolidated net sales for the most recent three years. “Senior
manager” means an executive director, non-fiduciary executive (usually known in Japan byterms such as “shikko-yaku” or “shikko-yakuin”), or someone with an equivalent role insenior management.
2) The person is a major client of Taiyo Holdings or is a senior manager of such. “Major clientof Taiyo Holdings” means a client that accounts for at least 2% of Taiyo Holdings’ average
consolidated net sales for the most recent three years.
3) The person is a major creditor of Taiyo Holdings or is a senior manager of such. “Major
creditor of Taiyo Holdings” means a creditor to which Taiyo Holdings owes an amountequivalent to at least 2% of its average consolidated assets for the most recent three years.
4) A consultant, accountant, attorney, or other professional who receives a certain amount ofcash and non-monetary property other than officer compensation exceeding an average of 10
million yen over the most recent three years. If the recipient of such cash/property is a
corporation, association, or other organization, it means a professional affiliated with thatorganization who receives cash/property exceeding 2% of the organization’s average
consolidated net sales for the most recent three years.

- 71 -

(2) The person currently serves or has at some stage in the past ten years served Taiyo Holdings as
an executive, or the person has at some stage in the past ten years served Taiyo Holdings as a
non-executive director or member of the Audit & Supervisory Board and has also served Taiyo
Holdings as an executive at some stage in the ten years preceding the time the person becamesuch.
(3) Major shareholder
The person is a major shareholder of Taiyo Holdings or an executive of such. “Major shareholder
of Taiyo Holdings” means a shareholder that holds, directly or indirectly, shares in Taiyo
Holdings worth at least 10% of the total voting rights.
(4) Financial beneficiary
Taiyo Holdings donates significant funds to the person or an organization the person represents.
“Significant funds” means donations averaging more than 10 million yen over the most recent
three years. However, if the recipient of such donations is a corporate, association, or otherorganization, this means a person directly involved in research, education, and/or other activities
associated with the donation, out of those affiliated with the organization.
(5) The person is a spouse or a first- or second-degree relative of someone who falls under any of
the criteria described in (1) through (4) above.
(6) The person poses a conflict of interest with Taiyo Holdings or is otherwise (despite not fallingunder any of the above criteria (1) through (5)) deemed incapable of discharging duties as anindependent outside board director.
3) Auditing and supervision by outside board directors, coordination with internal auditors and theaccounting auditor, and interaction with the internal control department
The outside board directors work closely with the internal audit department and the internal
control department to perform their audit and supervisory duties effectively. They also meet regularly
with our accounting auditors and actively exchange information and opinions.

- 72 -

(3) Auditing and supervision
1) Audits by the Audit & Supervisory Committeea. Organization and personnel for audits by the Audit & Supervisory Committee• Taiyo Holdings Co., Ltd. transitioned to a company with an Audit & Supervisory Committee upon
approval by the 78th Ordinary General Shareholders Meeting held on June 15, 2024. The activities
for the fiscal year ended March 31, 2024 therefore describe the activities of a company with an
Audit & Supervisory Board before the transition.
• Our Audit & Supervisory Committee consists of three board directors who are Audit & Supervisory
Committee members, two of whom are outside board directors. Hidenori Sugiura (outside board
director) has extensive insight in finance and accounting. He worked as a professor and lecturer atuniversities drawing on the financial expertise he gained in the business world. Kaori Terunuma(board director) has extensive knowledge and business experience in finance and accounting, andhas experience as an auditor of our overseas subsidiaries since 2020. Ikumi Sato (outside board
director) has extensive professional knowledge and experience as an attorney in corporate law, IT,
intellectual property, international law, and other legal areas.
b. Audits by Audit & Supervisory Board members• Audit & Supervisory Board members perform their duties according to an audit plan they draw up(the Audit & Supervisory Board Audit Plan). They audit and supervise our business operations andfinancial position and that of the group as a whole. One way they do this is by participating inmeetings of Taiyo Holdings’ key bodies, including the Board of Directors and the Executive
Council. They also question our corporate officers and mid-level managers and inspect our Japanand overseas group companies.
• In performing audits, Audit & Supervisory Board members emphasize tripartite audits. They work
closely with the accounting auditors and the Internal Audit Department to make accounting andoperational audits more effective and efficient.
• The Audit & Supervisory Board holds monthly meetings, in principle, to discuss and resolve audit
and supervisory matters and to share information about the group as a whole.
• During the fiscal year under review, the Audit & Supervisory Board met 10 times. The attendance ofeach member is reported below.
Title

Name

Attendance record

Full-time Audit & Supervisory Board Member

Hidenori Sugiura

100% (10/10)

Full-time Audit & Supervisory Board Member

Kaori Terunuma

100% (10/10)

Full-time Audit & Supervisory Board Member

Akihito Sakai

100% (2/2)

Audit & Supervisory Board Member

Ikumi Sato

100% (10/10)

Note: There were two Audit & Supervisory Board meetings held before the resignation of Akihito Sakai,
outside Audit and Supervisory Board member from the Audit and Supervisory Board at theconclusion of the Ordinary General Shareholders’ Meeting held on June 17, 2023.

The specific topics discussed at meetings include the general audit/supervisory plan, theactions members take under this plan, the establishment and operation of an internal control system,
the accounting auditor’s approach, and whether the accounting auditor’s results are valid.
Full-time members undertake the following actions: They liaise with board directors, attend
meetings of the Board of Directors and other important meetings, review documents concerning
important business decisions, and audit/supervise operations and finances at head office and key
workplaces. At subsidiaries, they liaise with the subsidiary’s board directors and with theiraudit/supervisory counterparts and review the subsidiary’s business report. Additionally, the fulltime
members review the accounting auditor’s actions and its report.

- 73 -

2) Audits by the Internal Audit Department• The Internal Audit Department has five members as of the Annual Securities Report filing date. The
department audits all Taiyo Holdings’ divisions and group companies according to its audit plan (theBasic Audit Plan). The Board of Directors may order the office to conduct special audits if
necessary. The department reports the results of such audits to the Board of Directors and Audit &Supervisory Committee. The Internal Audit Department holds quarterly meetings to report to the
Audit & Supervisory Committee. It shares information with the board directors who are Audit &Supervisory Committee members and endeavors to improve the effectiveness of internal audits.
3) Audits by the accounting auditor
a. Name of accounting auditor
PricewaterhouseCoopers Japan LLC
PricewaterhouseCoopers Aarata LLC merged with PricewaterhouseCoopers Kyoto on
December 1, 2023 and changed the corporate name to PricewaterhouseCoopers Japan LLC.
b. Period of continuous auditing
5 yearsc. Certified public accountants who conduct the accounting audits
Tsuyoshi Saito
Yoshihiro Shiribiki
Yoshitaka Sakuraid. Accounting auditor’s assistants
The accounting auditor is assisted by six certified public accountants, and 16 otherassistants.
e. Policy and reason for selecting the accounting auditor
Our Audit & Supervisory Committee follows the Criteria for Selecting the Accounting
Auditor in selecting our accounting auditor. We selected this accounting auditor following acomprehensive consideration, in which we noted that this auditor offered the necessary expertise,independence, and quality controls, along with an integrated global framework.
The Audit & Supervisory Committee may dismiss the accounting auditor with theunanimous consent of all board directors who are Audit & Supervisory Committee members, if theaccounting auditor falls under any of the items in Article 340-1 of the Companies Act. If theaccounting auditor is dismissed in this way, the Audit & Supervisory Committee will appoint aboard director who is an Audit & Supervisory Committee member to inform shareholders of thedismissal, as well as the reasons for the dismissal, at the next General Shareholders’ Meeting. If
the Audit & Supervisory Committee determines that the accounting auditor cannot discharge its
duties or is otherwise unfit for its role, it will determine the content of a proposal to the General
Shareholders’ Meeting to dismiss, or to not re-elect, the accounting auditor.
f. Evaluation of the accounting auditor by the Audit & Supervisory Committee and board directors
who are members thereof
Audit & Supervisory Committee and board directors who are members thereof evaluate theaccounting auditor according to the Criteria for Evaluating the Accounting Auditor. The members
have determined that PricewaterhouseCoopers Japan LLC is fit to serve as accounting auditor inview of the following factors: The firm is independent; it has robust quality controls; it has robust
workflow processes; and it effectively discharged its auditing duties in the fiscal year ended March
31, 2024.

- 74 -

4) Remuneration for audit services
a. Breakdown of remuneration paid for audit services rendered by accounting auditor(Millions of yen)
Consolidated fiscal year ended
March 31, 2023

Category

Remuneration forcertified audits

Consolidated fiscal year ended
March 31, 2024

Remuneration for Remuneration for
non-audit services certified audits

Remuneration for
non-audit services

Filing company (Taiyo Holdings)

95

−

91

−

Consolidated subsidiaries

32

−

25

−

128

−

116

−

Total

b. Breakdown of remuneration (other than that in a.) paid for audit services rendered by anorganization analogous to a certified public accountant (in this case, PricewaterhouseCoopers)(Millions of yen)
Consolidated fiscal year ended
March 31, 2023

Category

Remuneration forcertified audits

Consolidated fiscal year ended
March 31, 2024

Remuneration for Remuneration for
non-audit services certified audits

Remuneration for
non-audit services

Filing company (Taiyo Holdings)

−

94

−

−

Consolidated subsidiaries

40

5

50

4

40

99

50

4

Total

The non-audit services for which Taiyo Holdings Co., Ltd. (the filing company) paid 94
million yen in the previous consolidated fiscal year included professional advice on internal company
rules. The non-audit services for which the consolidated subsidiaries paid 5 million yen in theprevious consolidated fiscal year and 4 million yen in the consolidated fiscal year ended March 31,
2024 included professional advice on transfer pricing regulation and taxation.
c. Other notable remuneration for certified audits
Consolidated fiscal year ended March 31, 2023
None
Consolidated fiscal year ended March 31, 2024
None
d. Criteria for determining remuneration for audit services
We consider the size of our organization, the nature of its businesses, and the number ofdays the audit takes.
e. Basis on which the members of the Audit & Supervisory Board unanimously consented to theaccounting auditor’s remuneration
The members unanimously consented following a review in which they referred to theJapan Audit & Supervisory Board Members Association’s guidelines on establishing criteria forevaluating and selecting an accounting auditor. Specifically, after obtaining the necessary datafrom board directors, other internal parties, and the accounting auditor, the members reviewed theaudit workflows, timeframe, and estimated remuneration as stated in the audit plan. That review
resulted in unanimous consent of the Audit & Supervisory Board as specified in Article 399-1 of
the Companies Act.

- 75 -

(4) Remuneration for corporate officers
1) The amounts of remuneration for executives and matters regarding policy for the method ofdetermining such amounts
Upon receiving the recommendations of the Compensation Advisory Committee regarding ourpolicy for determining the compensation amounts for corporate officers, the Board of Directors
determined the remuneration for each board director as follows at a meeting held on June 18, 2022.
The purpose of the stock compensation package is to further motivate executive directors(meaning directors specified in Article 363-1 of the Companies Act ) to continuously contributetoward Taiyo Holdings’ corporate value and promote further value sharing between executive
directors and shareholders.
The Board of Directors determines, to the extent approved by shareholders and inconsideration of the findings of the Compensation Advisory Committee, the amount of each form ofcompensation (board directors’ base salary and executive directors’ performance-linked cash
compensation, performance-linked stock compensation, and restricted stock compensation) as well as
the methods and timing of payment, and how to allocate the compensation. By providing short-,
medium-, and long-term incentives, the stock compensation package motivates executive directors tocontribute to our corporate value over the medium and long term, and thus helps us recruit and retain
top-level managers. Additionally, because it delivers shares to executive directors, the stockcompensation package fosters a shareholder mindset.
a) Systems of remuneration for corporate officers, how each recipient’s amount is determined<General Shareholders' Meeting resolution on officer compensation>
Item

Base salary

Performance-linked
cash compensation

Performance-linked
stock compensation

Restricted stockcompensation

Class ofcompensation

Monetary

Monetary

Share-based

Share-based

Eligible officers

Executive directors(*Note 1)
Non-executive
directors
Audit &
Supervisory Board
members

Executive directors(*Note 1)

Executive directors(*Note 1)

Executive directors(*Note 1)

Description

Monthly salaries arepaid in cash

We determine the total
amount taking into
account profit before
income taxes alongwith effective tax rate
and profit attributable
to non-controllinginterests. We thendetermine theamounts for each
recipient according totheir officer status andpay these amounts incash.

We determine the total
amount taking into
account profit before
income taxes alongwith effective tax rate
and profit attributable
to non-controllinginterests. We thendetermine theamounts for each
recipient according totheir officer status andpay these amounts incash as a monetaryclaim to be exchanged
for the allottedcommon shares.

Recipients receive
monetary claimscommensurate withthe rank they served
during the eligibility
period. They agree toexchange thesemonetary claims fortheir allotted shares ofcommon stock.

- 76 -

Performance-linked
cash compensation

Performance-linked
stock compensation

Board director
salary:June 29, 2010
(64th Ordinary
Genera Meeting)
Audit &
Supervisory Board
member salary:
June 18, 2022
(76th Ordinary
General Meeting)June 18, 2022
(76th Ordinary
General Meeting)June 18, 2022
(76th Ordinary
General Meeting)June 19, 2021
(75th Ordinary
General Meeting)

Resolution

Board director
salary:Total monthly salary
capped at 300
million yen.
Audit &
Supervisory Board
member salary:
Total monthly salary
capped at 7 million
yen.

Executive directors
receive performancelinked cash
compensation within
an amount determinedby the following
formula (cap).
Performance-linked
cash compensation(cap)= Profit before
income taxes ×(*Note 2) × 1.6%

Executive directors
receive performancelinked stockcompensation within
an amount determinedby the following
formula (cap). The
maximum number of
performance-linked
shares that can beissued or allotted inany fiscal year(“Performance StockCap”) is 200,000(*Note 4).
Performance-linked
stock compensation(cap)= Profit before
income taxes × (Note2) × 3.4%

Executive directors
receive “restricted
stock compensation”(monetary claims)
capped at 300 million
yen annually. The
maximum number oftransfer-restricted
shares that can beissued or allotted inany fiscal year(“Restricted ShareCap”) is 80,000(*Note 5).

Number ofrecipients(at close of Ordinary
Genera Meeting)Board directors: 6
Audit andSupervisory Board
members: 4(3 of whom areoutside members)

4

4

3

Item

Base salary

Date approved byshareholders

Restricted stockcompensation<Policy on determination of each director’s compensation amount>
Item

Base salary

Performance-linked
cash compensation

Performance-linked
stock compensation

Restricted stockcompensation

Purpose−

Short-term incentive

Medium-term
incentive

Long-term incentive

Amount, calculationof compensation
other thanperformance-linked
or non-monetarycompensation

Board director
salary:Board directors
receive a monthly
salarycommensurate with
their rank.

−

−

−

−

(*Note 3)(*Note 4)−

Performance metricor formula used for
performance-linked
compensation- 77 -

Item
Form/amount of,formula used fornon-monetarycompensation

Base salary

Performance-linked
cash compensation

Performance-linked
stock compensation

Restricted stockcompensation−−(*Note 4)(*Note 5)

Reason for using
profit before income
taxes as metric−

Profit attributable to owners of parent is the
profit remaining after profits are distributed to
trading partners, employees, banks, national
and local governments, and other interested
parties, and thus represents the returns forshareholders. Part of these returns are
distributed to executive directors. Since a
portion of this amount is distributed to the
executive directors, we believe that this is areasonable measure from the perspective of
sharing value with shareholders.
We also take into account the averages for theeffective tax rate and the percentage profit
attributable to non-controlling interests inaddition to profit before income taxes for themost recent three fiscal years. Our indicatorthus represents profit attributable to owners ofparent in real terms. Therefore, using thismetric is tantamount to using profit attributableto owners of parent.
Additionally, in the case of both performancelinked cash compensation and performancelinked stock compensation, executive directors
will receive a low amount of compensation if
profit is low or negative, and they will receive
none if profit before income taxes is zero.

−

Formula for
determining
breakdown of each
recipient's
compensation

The balance between fixed and variable compensation policy is to be weighted toward thelatter. We keep the fixed portion relatively low so that the majority of the compensationconsists of variable compensation―and is thus linked to performance and share price,especially over the long term.
Stock compensation: For the restricted stock component, the amount of shares allocated isfixed according to the recipient’s rank, ensuring that the level of compensation paid remains
stable and thus provides a long-term incentive. The performance-linked component is variable
and could, depending on performance, amount to zero. The system is designed so that the ratioof performance-linked shares to restricted stock increases as the company grows. The idea isthat higher-ranked directors will receive a relatively larger portion of stock based
compensation.

Compensation
payment timing andpayment terms

Paid monthly

Paid within 1 month
Paid within 1 monthfrom Ordinary Genera from Ordinary
Meeting
General Meeting

Paid within 2 months
from Ordinary
General Meeting in
the previous fiscal
year (payment period)

Determination of the Respecting the findings of the Compensation Advisory Committee, the Board of Directors
amount for eachdetermines the specific amounts of compensation, within the scope approved by shareholders
recipientand in accordance with the committee’s findings.

- 78 -

<Policy on determination of each Audit & Supervisory Board member’s compensation amount >Base salary: The Audit & Supervisory Board members negotiate a salary.
Notes:
1. “Executive directors” refers to the class of directors in Article 69-9-1 of the Order for Enforcement of the
Corporation Tax Act.
2. (1 − Average effective tax rate for most recent three fiscal years − Percentage of profit attributable to noncontrolling interests for the most recent three fiscal years)• “Most recent three fiscal years” = Three fiscal years before the year in which performance-linked cash
compensation and performance-linked stock compensation will be paid.
• “Effective tax rate” = “Effective tax rate after application of tax effect accounting” described in “V.
Financial Information, 1. Consolidated financial statements, other consolidated financial information, (1)Consolidated financial statements: Notes.”• “Percentage of profit attributable to non-controlling interests” = Profit attributable to non-controllinginterests (rounded down to the nearest million yen) / Profit before income taxes (rounded down to thenearest million yen)
• The percentage derived from the formula “1 − Average effective tax rate for most recent three fiscal years− Percentage profit attributable to non-controlling interests for the most recent three fiscal years” isrounded to two decimal places.
3. Performance-linked cash compensationi) Overview
Using the calculation method described in ii) below, we determine the total amount of
performance-linked cash compensation for the fiscal year in question (the fiscal year preceding thatin which the payment date falls) and then distribute to each recipient an amount commensuratewith the rank the recipient held in that year.
ii) Calculation method
Performance-linked cash compensation (total amount to be paid) = Profit before income
taxes × (Note 2) × 0.8%
• This amount must be within what the Board of Directors determines to be the cap, or “defined
amount” (as used in this document, “defined amount” is as defined in Article 34-1-3-a-(1) of the
Corporation Tax Act).
• None of this compensation will be provided if profit before income taxes is in negative territory.
• The amount of profit before income taxes will be rounded down to the nearest million yen.
• For performance-linked cash compensation (total amount to be paid), fractional amounts of lessthan 1 yen will be discarded.
iii) Allocation among the recipients
We assign points to each executive director according to their officer status. The total
performance-linked share compensation is multiplied by an amount equivalent to the points
awarded to each director. We then divide this amount by the total points awarded to all directors.
The points to be allocated for each officer status are determined annually by the Board of Directors
based on the advice of the Compensation Advisory Committee, which considers the number of
persons in and the duties associated with each officer status. We also pay the compensation to any
executive directors who left their office (i.e., resigned from the company or lost their executive
director status) during the period they were eligible for the compensation (the period beginning on
the day of the Ordinary Shareholders’ Meeting pertaining to the fiscal year two fiscal years prior tothe one in which the payment occurs, and ending on the day before the Ordinary Shareholders’Meeting pertaining to the fiscal year preceding said year). In such case, we will pay the exexecutive director according to the period extending from the month following the month in which
the start date of the applicable period falls to the month in which the date of retirement falls, andthe points shall be prorated according to the number of months in that period.
4. Performance-linked stock compensationi) Overview
Using the calculation method described in ii) above, we determine the total amount of
performance-linked stock compensation for the fiscal year in question (the fiscal year precedingthat in which the payment date falls) and then distribute to each recipient a cash amountcommensurate with the rank the recipient held in that year as a monetary claim to be exchanged
for common shares. We allot common shares to the eligible executive directors to be paid
performance-linked stock compensation by issuing new shares or by disposing of treasury shares,
within the Performance Share Cap. We then deliver to each recipient an amount of the shares- 79 -

corresponding to the cash amount we paid them. However, excluded from performance cash are allincome tax, resident tax, and other taxes levied on the performance cash, all social security
premiums connected with the performance cash, all payment handling fees, and any fractional
portion (the rounded off portion).
Performance cash is contingent on the following: (1) The executive directors agree toexchange the entirety of their performance cash for their allotted shares, and (2) the executive
directors sign an agreement with Taiyo Holdings in which they agree not to transfer, pledge shares,
or otherwise dispose of the shares allotted for the duration of the transfer-restricted period (three
years from the date they purchased them).
However, it is possible that a law or judicial judgment could prevent Taiyo Holdings fromallotting the common shares to the executive directors in accordance with their performance-linked
stock compensation. In such case, the recipients will receive their performance-linked stockcompensation in cash only (without exchanging this cash for common shares).
Taiyo Holdings will also pay cash, as opposed to shares, for any portion of thecompensation that exceeds the Performance Stock Cap or the Holdings Cap (these caps are definedin Note 6: Allotment terms).
Furthermore, if an executive director succeeds their right to receive performance-linked
stock compensation to another person, this person will receive the compensation in cash only.
ii) Calculation method
Performance-linked stock compensation (total amount to be paid) = Profit before income
taxes × (Note 2) × 3.4%
• This amount must be within the defined amount determined by the Board of Directors.
• None of this compensation will be provided if profit before income taxes is in negative territory.
• The amount of profit before income taxes will be rounded down to the nearest million yen.
• For performance-linked stock compensation (total amount to be paid), fractional amounts of lessthan 1 yen will be discarded.
iii) Allocation among the recipients
We assign points to each executive director according to their officer status. The total
performance-linked stock compensation is multiplied by an amount equivalent to the points
awarded to each director. We then divide this amount by the total points awarded to all directors.
The points to be allocated for each officer status are determined annually by the Board of Directors
based on the advice of the Compensation Advisory Committee, which considers the number of
persons in and the duties associated with each officer status. We also pay the compensation to any
executive directors who left their office (i.e., resigned from the company or lost their executive
director status) during the period they were eligible for the compensation (the period beginning on
the day of the Ordinary Shareholders’ Meeting pertaining to the fiscal year two fiscal years prior tothe one in which the payment occurs, and ending on the day before the Ordinary Shareholders’Meeting pertaining to the fiscal year preceding said year). In such case, we will pay the exexecutive director according to the period extending from the month following the month in which
the start date of the applicable period falls to the month in which the date of retirement falls, andthe points shall be prorated according to the number of months in that period.
5. Restricted stock compensation
The maximum amount of the compensation is 300 million yen. We provide each executive
director, as of the time of allocation, with monetary claims with which they purchase the transferrestricted shares. The amount of the monetary claims is commensurate with the value of therecipient’s executive role as represented by their officer status during the time they are eligible forthe compensation (after the Ordinary General Shareholders’ Meeting held in the year preceding theyear of payment, and before the day before the Ordinary General Shareholders’ Meeting held in
the year of payment).
For restricted stock compensation, the eligible executive directors must agree to exchange
the entirety of their monetary claims for their allotted common shares, which we allot by issuing
new shares or by disposing of treasury shares within Restricted Share Cap. They must also sign anagreement with Taiyo Holdings in which they (1) agree not to transfer, hypothecate, or otherwise
dispose of the shares for the duration of a transfer-restricted period (10 years from the date theypurchased them) and (2) agree that Taiyo Holdings will reacquire their allotted shares for no
consideration if certain events occur during this period. Additionally, the compensation iscontingent upon the recipients having remained incumbent as of the time immediately before thedate they purchase the transfer-restricted stock, and upon there being no grounds for Taiyo
Holdings to cancel the allotment (such as an order to revoke or cease).

- 80 -

6. We have two stock-based remuneration systems: a system of restricted stock compensation and asystem of performance-linked stock compensation. Under both systems, we pay the remuneration toeligible executive officers by issuing additional stock or by reselling treasury shares. For restricted
stock compensation, we allot shares with specified transfer restrictions. For performance-linked stockcompensation, we use a third-party allotment. For both systems, we have set the following terms (i toiv).
Allotment termsi) The sum of (1) the total number of shares allotted for the both systems in a given fiscal year and(2) the total shares of common stock held by all executive directors eligible for the allotment (tobe eligible, the executive director must remain incumbent as of the time of the allotment) must
be within the Holdings Cap (2,840,000 shares. The cap was approved at 1,420,000 (shares) at the75th Ordinary General Shareholders’ Meeting, held on June 19, 2021, but the cap was restated as
2,840,000 following a 2-for-1 stock split on October 1 of that year.)ii) The Restricted Stock Cap, Performance Stock Cap, and Holdings Cap may be adjusted
proportionally, within reason, if Taiyo Holdings decides to undertake a stock split or reverse
stock split or if it otherwise becomes necessary to adjust the cap.
iii) We determine the amount of common shares to allocate based on the restricted stockcompensation system before we determine the amount for performance-linked sharecompensation.
iv) The Board of Directors determines the amount that executive directors pay in for each commonshare allotted to them under the transfer-restricted or perform-linked stock compensation plan.
Generally, the amount will be the closing price that the common stock fetches on the TSE as of
the business day preceding the resolution date (the date on which the Board of Directors resolves
the terms and conditions for applying to receive the common shares) or, if no trading is reported
on that day, the day before that. The amount must always remain within a range that gives noartificial advantage to the executive directors receiving the common shares.
7. Guidelines on share-based compensation
We formulate guidelines stipulating a shareholding policy for securing the common shares tobe paid to executive directors as performance-linked stock compensation and restricted stockcompensation. The guidelines specify a method for adjusting the amount of compensation for directors
in the case that a certain number of shares are held.
Following the guidelines, the Compensation Advisory Committee will review the amount ofcompensation for board directors and advise the Board of Directors on its findings. The Board of
Directors will then make the final decision on the compensation for board directors.
8. Amended policy
Proposal 6: “Establishment of the Amount of Aggregate Base Salary for Board Directors(Excluding Board Directors Who Are Audit & Supervisory Committee Members),” Proposal 7:“Establishment of Performance Cash Bonus, Performance Cash Bonus Deferral in Restricted Stock,and Restricted Stock Compensation for Board Directors (Limited to Executive Board Directors),” andProposal 8: “Establishment of the Amount of Aggregate Base Salary for Board Directors Who Are
Audit & Supervisory Committee Members” (hereafter, these three proposals are referred to as “theproposals”) were approved and passed at the 78th Ordinary General Shareholders Meeting held on
June 15, 2024.
The following “<Details of General Shareholders' Meeting resolutions on officer
compensation>” was revised as follows, upon passage of the proposals. At the Board of Directors
meeting held on June 15, 2024, the Board decided to make the following changes to the “<Policy on
how each director’s compensation amount is determined>.”- 81 -

(Underlined text indicates an amendment.)<General Shareholders' Meeting resolution on officer compensation>
Item

Base salary

Performance-linked
cash compensation

Performance-linked
stock compensation

Restricted stockcompensation

Class ofcompensation

Monetary

Monetary

Share-based

Share-based

Eligible officers

Board directors

Executive directors(*Note A)

Executive directors(*Note A)

Executive directors(*Note A)

Description

Monthly salaries arepaid in cash

We determine the total
amount taking into
account profit before
income taxes alongwith effective tax rate
and profit attributable
to non-controllinginterests. We thendetermine theamounts for each
recipient according totheir officer status andpay these amounts incash.

We determine the total
amount taking into
account profit before
income taxes alongwith effective tax rate
and profit attributable
to non-controllinginterests. We thendetermine theamounts for each
recipient according totheir officer status andpay these amounts incash as a monetaryclaim to be exchanged
for the allottedcommon shares.

Recipients receive
monetary claimscommensurate withthe rank they served
during the eligibility
period. They agree toexchange thesemonetary claims fortheir allotted shares ofcommon stock.

Date approved byshareholders

June 15, 2024
(78th Ordinary
General Meeting)June 15, 2024
(78th Ordinary
General Meeting)June 15, 2024
(78th Ordinary
General Meeting)June 15, 2024
(78th Ordinary
General Meeting)

Resolution(Directors(excluding directors
who are Audit &Supervisory
Committee
members))
Total base salarycompensation
capped at 300
million yen (ofwhich 60 million
yen is for outside
directors).
(Directors who are
Audit &
Supervisory
Committee
members)
Total monthly salary
capped at 7 million
yen.

Executive directors
receive performancelinked cash
compensation within
an amount determinedby the following
calculation method(cap).

Executive directors
receive performancelinked stockcompensation within
an amount determinedby the following
calculation method(cap). The maximum
number of
performance-linked
shares that can beissued or allotted inany fiscal year is
200,000 shares*.
(Calculation method)
Performance-linked
stock compensation(cap) = Profit before
income taxes × (NoteB) × 3.4%

Executive directors
receive “restricted
stock compensation”(monetary claims)
capped at 300 million
yen annually. The
maximum number oftransfer-restricted
shares that can beissued or allotted inany fiscal year is80,000*.

(Calculation method)
Performance-linked
cash compensation(cap) = Profit before
income taxes × (NoteB) × 1.6%- 82 -

Performance-linked
cash compensation

Item

Base salary

Number ofrecipients(at close of Ordinary
General Meeting)(Four directors(excluding directors
who are Audit &Supervisory
Committee
members, one ofwhom is an outside2
director))(Three directors
who are Audit &Supervisory
Committee members(two of whom areoutside directors))*

Performance-linked
stock compensation

2

Restricted stockcompensation

2

The cap may be adjusted within reason if necessary, according to the split/reverse split ratio, if Taiyo
Holdings decides to undertake a stock split or reverse stock split or if it otherwise becomes necessary toadjust the cap.

<Policy on how the compensation amount is determined for each director (excluding directors who are
Audit & Supervisory Committee members)>
Item
PurposeBase salary−

Performance-linked
cash compensation

Performance-linked
stock compensation

Restricted stockcompensation

Short-term incentive

Medium-term
incentive

Long-term incentive

Amount, calculationof compensation
other thanperformance-linked
or non-monetarycompensation

Board director
salary:Directors receive amonthly salarycommensurate with
their rank.

−

−

−

Performance metricor formula used for
performance-linked
compensation−(*Note C)(*Note D)−

Form/amount of,formula used fornon-monetarycompensation−−(*Note D)(*Note E)- 83 -

Item

Base salary

Performance-linked
cash compensation

Performance-linked
stock compensation

Restricted stockcompensation

Reason for using
profit before income
taxes as metric

Profit attributable to owners of parent is the
profit remaining after profits are distributed to
trading partners, employees, banks, national
and local governments, and other interested
parties, and thus represents the returns forshareholders. Part of these returns are
distributed to executive directors. Since a
portion of this amount is distributed to the
executive directors, we believe that this is areasonable measure from the perspective of
sharing value with shareholders.
We also take into account the averages for theeffective tax rate and the percentage profit
attributable to non-controlling interests inaddition to profit before income taxes for themost recent three fiscal years. Our indicatorthus represents profit attributable to owners ofparent in real terms. Therefore, using thismetric is tantamount to using profit attributableto owners of parent.
Additionally, in the case of both performancelinked cash compensation and performancelinked stock compensation, executive directors
will receive a low amount of compensation if
profit is low or negative, and they will receive
none if profit before income taxes is zero.

Formula for
determining
breakdown of each
recipient's
compensation

The balance between fixed and variable compensation policy is to be weighted toward thelatter. We keep the fixed portion relatively low so that the majority of the compensationconsists of variable compensation―and is thus linked to performance and share price,especially over the long term.
Stock compensation: For the restricted stock component, the amount of shares allocated isfixed according to the recipient’s rank, ensuring that the level of compensation paid remains
stable and thus provides a long-term incentive. The performance-linked component is variable
and could, depending on performance, amount to zero. The system is designed so that the ratioof performance-linked shares to restricted stock increases as the company grows. The idea isthat higher-ranked directors will receive a relatively larger portion of stock based
compensation.

Compensation
payment timing andpayment terms

Paid monthly

Paid within 1 monthfrom Ordinary
General Meeting

Paid within 1 monthfrom Ordinary
General Meeting

Payment date isdetermined by the
Board of Directors

Determination of the Respecting the findings of the Nomination and Compensation Committee, the Board ofamount for each
Directors determines the specific amounts of compensation, within the scope approved byrecipientshareholders and in accordance with the committee’s findings.
Notes:
A. “Executive directors” refers to the class of directors in Article 69-9-1 of the Order for Enforcement of
the Corporation Tax Act.
B. (1 − Average effective tax rate for most recent three fiscal years − Percentage of profit attributable tonon-controlling interests for the most recent three fiscal years)• “Most recent three fiscal years” = Three fiscal years before the year in which performance-linked
cash compensation and performance-linked stock compensation will be paid.
• “Effective tax rate” = “Effective tax rate after application of tax effect accounting” described in “V.
Financial Information, 1. Consolidated financial statements, other consolidated financial
information, (1) Consolidated financial statements: Notes.”• “Percentage of profit attributable to non-controlling interests” = Profit attributable to non-controllinginterests (rounded down to the nearest million yen) / Profit before income taxes (rounded down to
the nearest million yen)- 84 -

• The percentage derived from the formula “1 − Average effective tax rate for most recent three fiscal
years − Percentage profit attributable to non-controlling interests for the most recent three fiscal
years” is rounded to two decimal places.
C. Performance-linked cash compensationi) Overview
Using the calculation method described in ii) below, we determine the total amount of
performance-linked cash compensation for the fiscal year in question (the fiscal year precedingthat in which the payment date falls), up to the amount performance-linked cash compensation(cap) approved and passed by the General Shareholders' Meeting. We then distribute to each
recipient (executive directors and senior corporate executive officers; the same applies below) an
amount commensurate with the rank the recipient held in that year.
ii) Calculation method
Performance-linked cash compensation (total amount to be paid) = Profit before income
taxes × (Note b) × payment coefficient• This amount must be within what the Board of Directors determines to be the cap, or “defined
amount” (as used in this document, “defined amount” is as defined in Article 34-1-3-a-(1) of the
Corporation Tax Act).
• None of this compensation will be provided if profit before income taxes is in negative territory.
• The payment coefficient for performance-linked cash compensation commensurate with the rankof each recipient in each fiscal year is determined by the Board of Directors based on the adviceof the Nomination and Compensation Committee, depending on the number of recipients.
• The amount of profit before income taxes will be rounded down to the nearest million yen.
• For performance-linked cash compensation (total amount to be paid), fractional amounts of lessthan 1 yen will be discarded.
iii) Allocation among the recipients
We assign points to each recipient according to their officer status. The total performancelinked stock compensation is multiplied by an amount equivalent to the points awarded to each
recipient and divided by the total number of points awarded to all recipients. The points to beallocated for each officer status are determined annually by the Board of Directors based on theadvice of the Nomination and Compensation Committee, which considers the number of persons
in and the duties associated with each officer status. We also pay the performance-linked cash
compensation to any recipient who left their office (i.e., resigned from the company or lost theirrecipient status) during the period they were eligible for the compensation (the period beginningon the day of the Ordinary Shareholders Meeting pertaining to the fiscal year two fiscal years prior
to the one in which the payment occurs, and ending on the day before the Ordinary Shareholders
Meeting pertaining to the fiscal year preceding said year). In such case, we will pay the exrecipient according to the period extending from the month following the month in which the startdate of the applicable period falls to the month in which the date of retirement falls, and the points
shall be prorated according to the number of months in that period.
D. Performance-linked stock compensationi) Overview
Using the calculation method described in ii) above, we determine the total amount of
performance-linked stock compensation for the fiscal year in question (the fiscal year precedingthat in which the payment date falls), up to the amount of performance-linked stock compensation(cap) approved and passed by the General Shareholders' Meeting, and then distribute to each
recipient a cash amount commensurate with the rank the recipient held in that year as a monetaryclaim to be exchanged for common shares. We allot common shares to the recipients to be paid
performance-linked stock compensation by issuing new shares or by disposing of treasury shares,
up to 200,000 shares (hereafter, the Performance Stock Cap). We then deliver to each recipient anamount of the shares corresponding to the cash amount we paid them. However, excluded fromperformance cash are all income tax, resident tax, and other taxes levied on the performance cash,
all social security premiums connected with the performance cash, all payment handling fees, andany fractional portion (the rounded off portion).
Performance cash is contingent on the following: (1) The recipients agree to exchange theentirety of their performance cash for their allotted common shares, and (2) the recipients sign anagreement with Taiyo Holdings in which they agree not to transfer, pledge shares, or otherwise
dispose of the shares allotted for the duration of the transfer-restricted period (three years from thedate they purchased them).
- 85 -

However, it is possible that a law or judicial judgment could prevent Taiyo Holdings fromallotting the common shares to the recipients in accordance with their performance-linked stockcompensation. In such case, the recipients will receive their performance-linked stockcompensation in cash only (without exchanging this cash for common shares).
Taiyo Holdings will also pay cash, as opposed to shares, for any portion of thecompensation that exceeds the Performance Stock Cap or the Holdings Cap (these caps are definedin Note F: Allotment terms).
Furthermore, if a recipient cedes their right to receive performance-linked stockcompensation to a successor, this person will receive the compensation in cash only.
ii)
Calculation method
Performance-linked stock compensation (total amount to be paid) = Profit before income
taxes × (Note B) × payment coefficient• This amount must be within the defined amount determined by the Board of Directors.
• None of this compensation will be provided if profit before income taxes is in negative territory.
• The payment coefficient for performance-linked stock compensation commensurate with therank of each recipient in each fiscal year is determined by the Board of Directors based on theadvice of the Nomination and Compensation Committee, depending on the number of payment
recipients.
• The amount of profit before income taxes will be rounded down to the nearest million yen.
• For performance-linked stock compensation (total amount to be paid), fractional amounts of lessthan 1 yen will be discarded.
iii)

Allocation among the recipients
We assign points to each recipient according to their officer status. The total performancelinked stock compensation is multiplied by an amount equivalent to the points awarded to each
recipient. We then divide this amount by the total points awarded to all recipients. The points to beallocated for each officer status are determined annually by the Board of Directors based on theadvice of the Nomination and Compensation Committee, which considers the number of persons
in and the duties associated with each officer status. We also pay the performance-linked stockcompensation to any recipient who left their office (i.e., resigned from the company or lost theirrecipient status) during the period they were eligible for the compensation (the period beginningon the day of the Ordinary Shareholders’ Meeting pertaining to the fiscal year two fiscal years
prior to the one in which the payment occurs, and ending on the day before the Ordinary
Shareholders’ Meeting pertaining to the fiscal year preceding said year). In such case, we will pay
the ex-recipient according to the period extending from the month following the month in which
the start date of the applicable period falls to the month in which the date of retirement falls, andthe points shall be prorated according to the number of months in that period.
E. Restricted stock compensation
We provide each recipient, as of the time of allocation, with monetary claims with which theypurchase the transfer-restricted shares. The amount of the monetary claims is commensurate with thevalue of the recipient’s executive role as represented by their officer status during the time they are
eligible for the compensation (after the Ordinary General Shareholders Meeting held in the year
preceding the year of payment, and before the day before the Ordinary General Shareholders Meeting
held in the year of payment).
For restricted stock compensation, the recipients must agree to exchange the entirety of theirmonetary claims for their allotted common shares, which we allot by issuing new shares or bydisposing of treasury shares up to 80,000 shares (hereafter, the “Restricted Stock Cap”). They mustalso sign an agreement with Taiyo Holdings in which they (1) agree not to transfer, hypothecate, orotherwise dispose of the shares for the duration of a transfer-restricted period (10 years from the datethey purchased them) and (2) agree that Taiyo Holdings will reacquire their allotted shares for no
consideration if certain events occur during this period. Additionally, the compensation is contingent
upon the recipients having remained incumbent as of the time immediately before the date theypurchase the transfer-restricted stock, and upon there being no grounds for Taiyo Holdings to cancel
the allotment (such as an order to revoke or cease).
F. We have two stock-based compensation systems: a system of Restricted stock compensation and asystem of performance-linked stock compensation. Under both systems, we pay the compensation toeach recipient by issuing additional stock or by reselling treasury shares. For Restricted stockcompensation, we allot shares with specified transfer restrictions. For performance-linked stockcompensation, we use a third-party allotment. For both systems, we have set the following terms (i toiv).

- 86 -

Allotment termsi) The total number of common shares issued or allotted through the stock compensation system ina given fiscal year shall no more than 2,840,000 shares (hereafter, the “Recipient Share Cap”) for
the sum of all common shares owned by all recipients of the common shares (limited torecipients in Taiyo Holdings at the time of receipt).
ii) The Restricted Stock Cap, Performance Stock Cap, and Holdings Cap may be adjusted
proportionally, within reason, if Taiyo Holdings decides to undertake a stock split or reverse
stock split or if it otherwise becomes necessary to adjust the cap.
iii) We determine the amount of common shares to allocate based on the Restricted stockcompensation system before we determine the amount for performance-linked sharecompensation.
iv) The Board of Directors determines the amount that recipients pay in for each common shareallotted to them under the transfer-restricted or performance-linked stock compensation plan.
Generally, the amount will be the closing price that the common stock fetches on the TSE as of
the business day preceding the resolution date (the date on which the Board of Directors resolves
the terms and conditions for applying to receive the common shares) or, if no trading is reported
on that day, the day before that. The amount must always remain within a range that gives noartificial advantage to the recipients of the common shares.
b) Reason why the Board of Directors determined that board directors’ compensation for the fiscal year
in question is consistent with the company’s policy on board directors’ compensation
The Compensation Advisory Committee comprehensively deliberated and reported to the Boardof Directors based on our compensation policy, and the Board of Directors decided and implemented
the policy by respecting the content of the report.
c) Performance-linked cash compensation system, performance-linked stock compensation system, andrestricted stock compensation system in the 79th business term (ending March 31, 2025)
A system for senior corporate executive officers similar to that for executive directors wasintroduced at the Board of Directors meeting held on June 15, 2024. As a result, two executive
directors and two senior corporate executive officers are recipients of the performance-linked cash
compensation system, the performance-linked stock compensation system, and the restricted stockcompensation system in the 79th business term (ending March 31, 2025).
At the Board of Directors meetings held on the same date, the Board of Directors determined
the following items: The formula (“1 − Average effective tax rate for most recent three fiscal years －Percentage of profit attributable to non-controlling interests for the most recent three fiscal years”)
described in Note B, Note 8 Amended policy; the defined amounts and payment coefficients describedin ii) Calculation method for performance-linked cash compensation in Note C and for performancelinked stock compensation in Note D; and the rank-specific points for recipients in iii) Allocation
among the recipients in Note D.
Item

Performance-linked cash compensation(1 − Average effective
tax rate for most recent
three fiscal years −Percentage profit
attributable to noncontrolling interests
for the most recent
three fiscal years)(*Note 1)
Defined amount (cap)

Performance-linked stockcompensation

71.62%

192,000,000 yen

818,000,000 yen

0.8% yen

3.4% yen

Payment coefficient- 87 -

Item

Performance-linked cash compensation

Rank-specific points(*Note 2)

Performance-linked stockcompensation

Officer status

Points

Officer status

PointsChairman of the Board

96

Chairman of the Board

36

President and CEO

168

President and CEO

120

Executive Vice President

132

Executive Vice President

72

Senior Managing Board
Director

96

Senior Managing Board
Director

36

Managing Board
Director

84

Managing Board
Director

24

Board Director
appointed to a dedicatedposition72

Board Director appointed
to a dedicated position

12

Senior Corporate
Executive Officer

1272

Senior Corporate
Executive Officer

Officer status

NumberOfficer status

NumberPresident and CEO

1

President and CEO

1

Executive Vice President

1

Executive Vice President

1

Senior Corporate
Executive Officer

2

Senior Corporate
Executive Officer

2

Number of recipientsas of June 15, 2024

Notes:

1. The figure is rounded to two decimal places. The average effective tax rate for most recent threefiscal years and the average percentage profit attributable to non-controlling interests for the mostrecent three fiscal years are as follows. The figures presented here have been rounded to two decimal
places, but no such rounding was done during the calculation.
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Average for mostrecent three fiscal
years

Effective tax rate

29.25%

26.24%

28.50%

28.00%

Percentage profit
attributable to noncontrolling interests

1.14%(0.00)%(0.00)%

0.38%

2. Fractional amounts of less than 1 yen are rounded off in calculating the amount allocated to each
officer status, with the difference added to the President and CEO's compensation.
In the Consolidated Financial Results for the Fiscal Year Ended March 31, 2024, released on
May 1, 2024, we forecasted 12,000 million yen in profit attributable to owners of parent for the 79th
business term (ending March 31, 2025). We forecasted 16,800 million yen in profit before income
taxes based on that consolidated performance forecast. The following table shows amounts we would
provide in performance-linked cash compensation and performance-linked stock compensation for the79th business term under five hypothetical scenarios.

- 88 -

Simulated compensation forecast under each scenario
Forecasted
amount× 50%

Forecasted
amountForecasted
amount× 150%

Forecasted
amount× 200%

0

8,400

16,80025,20033,600President and CEO

−

18

36

54

72

Executive Vice President

−

14

28

42

57

Senior Corporate Executive
Officer (2)

−

15

31

46

62

Total

−

48

96

144

192

President and CEO

−

113

227

340

454

Executive Vice President

−

68

136

204

272

Senior Corporate Executive
Officer (2)

−

22

45

68

90

Total

−

204

409

613

818

Scenario assumption

0 yenProfit before income taxes

Performancelinked cash
compensation

Performancelinked stockcompensation(Millions of yen)

2) Compensation amounts (total and breakdown) for each officer status and the number of recipients ineach officer status
Total
compensation(Millions ofyen)

Officer status

Breakdown (Millions of yen)
Base salary

Performancelinked cash
compensation

Performancelinked stockcompensation

Restricted
stockcompensation

Numberofrecipients

Board Directors(excluding outside board
directors)

602

119

69

294

119

5

Audit & Supervisory Board
Members(excluding outside members)

20

20

−

−

−

1

Outside officers

75

75

−

−

−

7

Note:
1. The figure for restricted stock compensation indicates the amount we accrued in the fiscal year underreview.
2. Targeted and actual performance-linked compensation metric in the fiscal year under review
Profit before income taxes

TargetActual

14,200 million yen

12,102 million yen

Note: The target is noted in the Annual Securities Report for the 77th business term (fiscal year
ended March 31, 2023), which was announced on June 19, 2023. We are using 71.54% as
the percentage for the fiscal year under review calculated by (1 − Average effective tax rate
for most recent three fiscal years − Percentage of profit attributable to non-controllinginterests for the most recent three fiscal years).
3. The non-monetary compensation paid in fiscal year under review consisted of performance-linked
stocks and transfer-restricted stocks (pay-in date: July 15, 2023; amount paid in per share: 2,677
yen) as described below. This compensation was approved by the Board of Directors at a meetingon June 27, 2023.
Performance-linked stockcompensation

Restricted stock compensation

Recipients

Four executive directors

Four executive directors

Number of shares

61,300 shares

44,758 shares

Period of restriction

July 14, 2023 to July 13, 2026

July 14, 2023 to July 13, 2033

- 89 -

3) Consolidated compensation amounts for officers earning more than 100 million yen on consolidated
basis
Consolidated
total(Millions of
yen)

Name

Eiji Sato

282

Hitoshi Saito

186

Consolidated breakdown (Millions of yen)
Officer
statusCompany

Board
Director

Filing company(Taiyo Holdings)

Board
Director

Performancelinked cash
compensation

Performancelinked stockcompensation

Restricted stockcompensation

41

27

169

44

Taiyo Ink Mfg.
Co., Ltd.

0

−

−

−

Board
Director

Filing company(Taiyo Holdings)

35

21

91

36

Board
Director

Taiyo Ink Mfg.
Co., Ltd.

1

−

−

−

Base salaryNote: The figure for Restricted stock compensation indicates the amount we accrued in the fiscal year
under review.
4) Description/scope of authority invested in each party that exercises authority in the process fordetermining corporate officers’ remuneration (amounts and formulas)
The Board of Directors has the final say in determining directors’ compensation(total/individual amounts and calculation methods), but the Nomination and Compensation Committee(the Compensation Advisory Committee before the transition to a company with an Audit &Supervisory Committee), the majority of which is composed of independent outsiders (as defined in
Article 69-18 of the Order for Enforcement of the Corporation Tax Act), shall deliberate and report to
the Board of Directors. The Board of Directors shall respect the content of such report in making adecision.
More specifically, each year, the committee members check compensation benchmarks among
companies similar to ours (in terms of scale and categories of business) using market data on
executive compensation. They then review the Company’s board director compensation in light of thisdata, including the level of compensation and the share of compensation that is performance-linked.
The Nomination and Compensation Committee meetings are convened by the chair, and thefindings of the committee are resolved by a majority of Nomination and Compensation Committee
members in attendance representing the majority of all members (however, only the independent
members are entitled to vote in decisions about performance-linked cash compensation or
performance-linked stock compensation). The chair of the Nomination and Compensation Committee
submits the committee’s findings and proposals to the Board of Directors.
In the most recent business term, the Compensation Advisory Committee and Board of
Directors acted as follows in regard to determining compensation for corporate officers.
Compensation Advisory Committee
The committee met three times during the fiscal year under review. Committee members
conducted a comparative review of the compensation level and related factors based on market data
provided by external survey firms, and discussed the methods for calculating performance-linked cash
compensation and performance-linked stock compensation, and the amount of base salaries. They also
reviewed the policy on determining individual director compensation and revisions to the director
compensation system. The committee then reported its findings to the Board of Directors.

- 90 -

Board of Directors• Respecting the findings of the Compensation Advisory Committee, the Board of Directors
determined the compensation, within the scope approved by shareholders and in accordance with thecommittee’s findings.
• Respecting the findings of the Compensation Advisory Committee, the board determined theformulas for calculating the performance-linked cash compensation and performance-linked stockcompensation.
• In view of the committee’s findings, the Board of Directors is satisfied that the each board director’scompensation for the most recent fiscal year is consistent with the company’s policy on board
directors’ compensation.
• The Board of Directors respected the findings of the Compensation Advisory Committee in
determining revisions to board directors’ compensation, etc.
(5) Shareholdings
1) Criteria for categorizing investments
We classify equity securities in which we invest as “held purely for the purpose of investment”
when the purpose of the investment is to obtain profit from share price movements or dividends fromshares. We classify equity securities invested in for other purposes as being held for “other purposes.”
2) Equity securities held for other purposea. Shareholding policy, criteria for determining whether shareholdings are justified, Board of
Directors’ reviews of whether to hold shares in a particular company’s stock
Our basic policy is to hold shares in companies if the holdings will contribute to enhancing
our corporate value over the medium to long term. In each case, we review whether the issuing
company has growth potential, whether it is profitable, and whether the holding would strengthen
our trading relationship with the company. The Board of Directors will approve or report theholding depending on the price of the acquired shares. The board will also review holdings
regularly to check whether they are justified.
b. Number of companies in which shares are held; carrying value of the holdings
Number of company stocks
in which shares are held

Total carrying value(Millions of yen)

Unlisted shares−−

Other shares

1

109

Company stocks in which holdings increased in the current business term
None
Company stocks in which holdings decreased in the current business termNone

- 91 -

c. Specified equity securities and deemed holdings of equity securities by each company stock, andthe carrying value of the holdings
Specified equity securities

IssuerFiscal year ended
March 31, 2024

Fiscal year ended
March 31, 2023

Number of shares

Number of shares

Total carrying
value(Millions of yen)

Total carrying
value(Millions of yen)

150,000

Holding purpose, summary ofbusiness alliance, etc., quantitative
benefit from holding, and reason
for increase in the number ofshares held

Sharesheld in
Taiyo
Holdings

150,000 We acquired and hold sharesbecause we entered a capital andbusiness alliance with thecompany to strengthen the field of
regenerative therapy in our
Medical and Pharmaceuticals
183 business.

CyfuseBiomedical
K.K.
109

None

Note: We have not listed the quantitative benefits from holding the shares of each issuer because this isdifficult to determine. However, we verify the rationale for holding the shares as stated in “a.
Shareholding policy, criteria for determining whether shareholdings are justified, Board of
Directors’ reviews of whether to hold shares in a particular company’s stock” and take action asnecessary.

Deemed holdings of equity securities
None3) Active investing/securities held purely for the purpose of investment
Fiscal year ended March 31, 2024

Fiscal year ended March 31, 2023

Number ofcompany stocks inwhich shares are
held

Total carrying
value(Millions of yen)

Number ofcompany stocks inwhich shares are
held

Total carrying
value(Millions of yen)

Unlisted shares

5

149

6

150

Other shares

28

1,783

30

1,380

Category

Fiscal year ended March 31, 2024
Category

Total dividend
income(Millions of yen)

Total gain (loss)
on sale(Millions of yen)

Total valuation
gain (loss)(Millions of yen)

Unlisted shares

−

(0)

−

Other shares

27

25

796

4) Equity securities held “purely for the purpose of investment” that became shares held for “otherpurposes” during the fiscal year under review
None5) Equity securities held for “other purposes” that became shares “held purely for the purpose ofinvestment” during the fiscal year under review
None- 92 -

V. Financial Information
1. Basis of preparation of consolidated and non-consolidated financial statements(1) We prepare our consolidated financial statements according to the Ordinance on Terminology, Forms, andPreparation Methods for Consolidated Financial Statements (Ordinance of the Ministry of Finance No.
28, 1976).
(2) We prepare our non-consolidated financial statements according to the Ordinance on Terminology, Forms,
and Preparation Methods for Non-consolidated Financial Statements (Ordinance of the Ministry of
Finance No. 59, 1963; hereafter, “Ordinance on Non-consolidated Financial Statements”).
We are classed as a “Special Financial Statement Reporting Company,” meaning that we prepare
financial statements pursuant to Article 127 of the Ordinance on Non-Consolidated Financial Statements.

2. Audit certificate
Under Article 193-2-(1) of the Financial Instruments and Exchange Act, our financial statements require
an audit certificate. PricewaterhouseCoopers Japan LLC has certified our consolidated financial statements forthe consolidated fiscal year under review (April 1, 2023 to March 31, 2024) and our non-consolidated financial
statements for the fiscal year under review (April 1, 2023 to March 31, 2024).

3. Special efforts to ensure the appropriateness of our consolidated financial statements and other financial
information
We employ special efforts to ensure the appropriateness of our consolidated financial statements andother financial information. More specifically, we are members of the Financial Accounting Standards
Foundation. This membership helps us keep abreast of accounting standards and related guidance, and thus
enables us to develop the necessary structures for ensuring that our consolidated financial statements areaccurate and fair.
We also participate in the Financial Accounting Standards Foundation’s training programs.

- 93 -

1. Consolidated financial statements, other consolidated financial information(1) Consolidated financial statements
1) Consolidated balance sheet [Unaudited](Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(As of March 31, 2024)

47,12158,583

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, andcontract assets
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
LandConstruction in progress
Other
Total property, plant and equipment
Intangible assets
Goodwill
Sales rights
Customer-related assets
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets*1, *2

22,734
7,038
1,398
6,539
5,290
(72)
90,050*5

22,492
10,538
1,908
14,991
9,378
1,091
*4
60,401- 94 -*1, *2, *3

28,352

8,571
1,451
7,143
5,582
(30)
109,655*5

30,69012,032
2,380
15,084
7,261
1,403
*4
68,852

4,974
15,834
5,476
2,885
29,1702,896
13,9795,000
3,927
25,804

3,923
1,152
501
503
1,753
(193)
7,640
97,212
187,263

4,437
1,394
391
461
1,982
(227)
8,439
103,096
212,751

(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(As of March 31, 2023)
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Accounts payable - other
Income taxes payable
Provision for bonuses
Other provisions
Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Long-term borrowings
Retirement benefit liability
Other provisions
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6,513
5,424
12,902
5,374
1,031
1,108
87
2,672
35,115*5, *6- 95 -

Consolidated fiscal year
ended March 31, 2024
(As of March 31, 2024)

8,795
9,821
33,766
6,586
1,986
1,152
118
2,646
64,874*5, *6

3,974
53,174
108
55
1,006
1,088
59,407
94,523

1,200
43,134
292
48
1,386
1,415
47,478112,353

9,761
14,88367,561(6,107)86,098

9,903
15,02570,989(5,993)89,925

429

709

6,223
(14)
6,637
3
92,739187,2639,766(6)
10,4694
100,398
212,751

2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income [Unaudited](Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(April 1, 2022
to March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(April 1, 2023
to March 31, 2024)

97,33854,54742,791*1, *2
26,81815,972

104,775
55,944
48,830*1, *2
30,627
18,203

116
90
344
552

262
150
219
632

473
242
346
1,062
15,462

664
175
685
1,525
17,310−416

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary losses
Loss on valuation of shares of subsidiaries andassociates
Impairment losses
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent*2−−
15,462
3,634
422
4,057
11,405(0)
11,405- 96 -

*2

*3

4,792
5,208
12,102
3,741
(291)
3,449
8,652
(1)
8,654

Consolidated statement of comprehensive income [Unaudited](Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(April 1, 2022
to March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(April 1, 2023
to March 31, 2024)

11,405

8,652

108
1,036
(55)
*
1,089
12,494

280
3,543
8
*
3,832
12,484

12,494

12,485(0)(1)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests- 97 -

3) Consolidated statement of changes in equity [Unaudited]
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders' equity

Balance at beginning of period

Share capital

Capital surplus

Retained earnings

Treasury shares

9,612

14,73460,321(4,752)

Total shareholders'equity79,916

Changes during period
Dividends of surplus(4,165)(4,165)

Profit attributable to owners ofparent11,405

11,405(0)(0)

Change in scope of consolidation
Issuance of new shares

148

148

297

Purchase of treasury shares(1,500)(1,500)

Disposal of treasury shares

145

145

Net changes in items other thanshareholders' equity
Total changes during period
Balance at end of period

148

148

7,239

(1,354)

6,182

9,761

14,88367,561(6,107)86,098

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginning of period

321

Foreign currencytranslation
adjustment

Total
Remeasurements
accumulated otherof defined benefit
comprehensive
plansincome

5,187

40

5,549

Non-controllinginterests

1

Total net assets

85,466

Changes during period
Dividends of surplus(4,165)

Profit attributable to owners ofparent11,405

Change in scope of consolidation(0)

Issuance of new shares

297

Purchase of treasury shares(1,500)

Disposal of treasury shares

145

Net changes in items other thanshareholders' equity

108

1,036

(55)

1,088

1

1,090

Total changes during period

108

1,036

(55)

1,088

1

7,272

Balance at end of period

429

6,223

(14)

6,637

3

92,739- 98 -

Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)
Shareholders' equity

Balance at beginning of period

Share capital

Capital surplus

Retained earnings

Treasury shares

9,761

14,88367,561(6,107)

Total shareholders'equity86,098Changes during period
Dividends of surplus(5,033)(5,033)

Profit attributable to owners ofparent

8,654

8,654

Change in scope of consolidation

(192)

(192)

Issuance of new shares

141

141

283

Purchase of treasury shares

(0)

(0)

Disposal of treasury shares

115

115

Net changes in items other thanshareholders' equity
Total changes during period
Balance at end of period

141

141

3,427

114

3,826

9,903

15,02570,989(5,993)89,925

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginning of period

429

Foreign currencytranslation
adjustment

Total
Remeasurements
accumulated otherof defined benefit
comprehensive
plansincome

6,223

(14)

6,637

Non-controllinginterests

3

Total net assets

92,739Changes during period
Dividends of surplus(5,033)

Profit attributable to owners ofparent8,654

Change in scope of consolidation(192)

Issuance of new shares

283

Purchase of treasury shares(0)

Disposal of treasury shares

115

Net changes in items other thanshareholders' equity

280

3,542

8

3,831

0

3,832

Total changes during period

280

3,542

8

3,831

0

7,658

Balance at end of period

709

9,766

(6)

10,4694

100,398- 99 -

4) Consolidated statement of cash flows [Unaudited](Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(April 1, 2022
to March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(April 1, 2023
to March 31, 2024)

15,462
7,441−
334

12,102
8,676
4,792
290

−

416

(51)
(149)
(7)

(106)
59
(5)

(52)

(54)

(210)
(158)
473

(2)
(295)
664

667

(1,074)

5,597
1,585
(3,151)
2,262
30,042
158(476)(6,987)22,736(3,731)(1,690)1,262
2,808
24,111286(530)(2,642)
21,224(33)
414(11,667)
(739)
(950)
(324)
139
(13,160)(857)－(11,582)(7,229)
(394)
(927)
(77)
(21,069)

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Loss on valuation of shares of subsidiaries andassociates
Subsidy income
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Purchase of shares of subsidiaries and associates
Other, net
Net cash provided by (used in) investing activities- 100 -

(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(April 1, 2022
to March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(April 1, 2023
to March 31, 2024)(8,926)
18,672(17,492)(1,520)(4,164)
177(687)(13,942)

3,335
23,948(13,107)(0)(5,028)
164
(355)
8,954

286

1,189

(4,079)51,152

10,29947,08815

276

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Dividends paid
Proceeds from issuance of shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from
inclusion of subsidiaries in consolidation
Cash and cash equivalents at end of period*- 101 -

47,088*57,664

NotesBasic factors underlying our consolidated financial statement
1. Scope of consolidation(1) We have 25 consolidated subsidiaries.
The names of these subsidiaries are disclosed in “I. Overview of Taiyo Holdings and the Taiyo Group,
4. Our associates.”
apex corp. is included in the scope of consolidation from the consolidated fiscal year under review
because it has increased in significance.
(2) Major non-consolidated subsidiaries
Taiyo Circuit Automation, Inc. is a major non-consolidated subsidiary.
We exclude non-consolidated subsidiaries from the scope of consolidation because their total assets,
net sales, current net profit (as corresponds to equity), and retained earnings (as corresponds to equity) do
not significantly impact our consolidated financial statements.
2. Applying the equity method
Non-consolidated subsidiaries and affiliates outside of equity method
We do not apply the equity method to our non-consolidated subsidiaries and affiliates because they only
have minimal impact on current net profit (as corresponds to equity) and retained earnings (as corresponds toequity).
3. Accounting periods of consolidated subsidiaries
Taiyo Ink (Suzhou) Co., Ltd., Taiyo Ink Trading (Shenzhen) Co., Onstatic Ink (Shenzhen) Co., Ltd.,
Onstatic New Material (Jiangxi) Co., Ltd., and TBF Semiconductor Material (Shenzhen) Co., Ltd. have
December 31 as their settlement date. In our consolidated financial statements, the financial information forthese subsidiaries is based on a provisional settlement as of the consolidated settlement date.
No other consolidated subsidiary has a fiscal year-end that differs from the consolidated fiscal year end.
4. Accounting policies(1) Basis and method of valuation of significant assets
1) Securities
Shares of the non-consolidated subsidiaries and affiliates to which we do not apply the equity method
We state at cost, as determined by the moving average method
Other securities… with readily discernible value
We state at fair value, referring to the asset’s market value on the year-end date (weprocess valuation discrepancies by the total direct capitalization method, and determine costof sales by the moving average method).
…with no readily discernible value
We generally state at cost, as determined by the moving average method.
For our contributions to investment partnerships (only those defined as securities under
Article 2-2 of the Financial Instruments and Exchange Act), we state the net value of ourequity interest (as gleaned from available financial statements) according to the partnership’s
settlement date.
2) Derivatives
We state at fair value.
3) Inventories
Generally, we state at cost, as determined by the moving average method (we reduce the carrying
value when the contribution to profits declines).

- 102 -

(2) Depreciation methods for major depreciable assets
1) Property, plant and equipment
Buildings:
Generally, we apply the straight-line method.
Other:
Generally, we apply the declining balance method.
Some consolidated subsidiaries apply the straight-line method.
The useful life of these assets is generally as follows:
Buildings and structures:
7-60 years
Machinery, equipment, and vehicles:
4-20 years
Tools, furniture, and fixtures:
3-8 years
2) Intangible assets
Software (for internal use):
Other:

We apply the straight-line method based on the anticipated period ofuse for the software (namely, five years).
We apply the straight-line method.

The useful life of these assets is generally as follows:
Sales rights
6-15 years
Customer-related assets
15 years(3) Basis for major allowances
1) Allowance for doubtful accounts
We provide a bad debt reserve to cover the bad debt we expect to arise from our accounts receivableas a whole. We estimate the amount based on the doubtful accounts rate. If we have concerns withparticular debtors, we will consider how much we are likely to recover from the debtor in question andthen add the unrecoverable portion to the bad debt reserve.
2) Provision for bonuses
We and some of our consolidated subsidiaries provide a reserve to cover the bonuses we expect to pay
in the relevant consolidated fiscal year.
(4) Accounting methods for retirement benefits
1) Attributing the projected retirement benefits to periods of service
We use a benefit formula to estimate the amount of retirement benefit obligations. We then attribute
this projected amount to the consolidated fiscal year under review in question.
2) Amortizing actuarial gains/losses and prior service cost
To recognize prior service costs, we amortize the amount using the straight-line method. The
amortization period (five years) will always be shorter than the employees’ average remaining service
period.
We amortize actuarial gains/losses starting from the consolidated fiscal year following that in which
we recognized the gain/loss. The amortization period (five years) will always be shorter than theemployees’ average remaining service period.
For unrecognized actuarial gains/losses, we adjust for tax effects and then report them as“remeasurements of defined benefit plans” under the “accumulated other comprehensive income” entry in
the net assets section.
3) Simplified accounting procedures for smaller companies
Some of our consolidated subsidiaries use a simplified method for calculating net defined benefit
liability and retirement benefits. Under this method, the amount of retirement benefits paid for voluntary
resignations at period-end is included in retirement benefit obligations.

- 103 -

(5) Accounting standard for major revenues and expenses
We follow the five step approach to revenue recognition.
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when, or as, the entity satisfies a performance obligation
As an organization that develops, manufactures, stocks, and markets chemicals for printed circuitboards (PCB) and other electronic components, and that manufactures, sells, and provides contract
manufacturing services for ethical pharmaceuticals, we generally deem that the performance obligation
has been satisfied and that revenue should therefore be recognized when the customer obtains control
over the delivered good. We deem that the customer has obtained such control when the good is delivered
and inspected on delivery. However, for transactions in Japan, we recognize revenue at the point ofshipment unless there is a significant lag between shipment and delivery.
The revenue recognized is the transaction price agreed with the customer less any amount associatedwith product returns, price discounts, or rebates.
The transaction price is generally received within one year from the time the performance obligations
are satisfied, and it includes no major financial components.
(6) Translation methods of major foreign assets/liabilities
Foreign currency-denominated monetary claims and liabilities are translated to yen using the spot
exchange rate on the consolidated balance sheet date. Translation differences are charged to profit andloss in the corresponding fiscal year under review.
Assets and liabilities of overseas consolidated subsidiaries are translated to yen using the spot
exchange rate on the consolidated balance sheet date. Revenue and expenses thereof are translated to yen
using the average exchange rate during the period. Translation differences are included in foreign
currency translation adjustment and non-controlling interests in the section of net assets.
(7) Method and period for amortizing goodwill
Goodwill is amortized by the straight-line method within a period of 20 years.
(8) Scope of cash and cash equivalents on the consolidated statement of cash flows
Consists of cash on hand, deposits that can be quickly accessed, and easily convertible short-term
investments that are only mildly affected by market price fluctuations, that mature within three months ofacquisition, or that have a redemption date not more than three months away.
(9) Other key considerations in preparation of our consolidated financial statements
Application of group tax-sharing system
The Company and its domestic consolidated subsidiaries have adopted the group tax-sharing system.
Our accounting treatment of and tax effect accounting for national and local corporate taxes anddisclosure are in accordance with the Practical Solution on the Accounting and Disclosure Under theGroup Tax Sharing System (Practical Solution No. 42, August 12, 2021).

- 104 -

Key accounting estimates
1. Deferred tax assets/liabilities(1) Amounts reported on consolidated statements in year under review(Millions of yen)
Consolidated fiscal year
ended March 31, 2023

Consolidated fiscal year
ended March 31, 2024

Deferred tax assets

501

391

Deferred tax liabilities

3,974

1,200

(2) Basis for accounting estimate for recognized item
1) Formula used to calculate carrying value in year under review
When there is a difference between our balance sheet statements and our tax assets and liabilities, wereport the tax effects pertaining to the temporary difference to be deducted in the future as deferred tax
assets. If there is a possibility that we will not recover a portion of deferred tax assets, we deduct thisuncertain portion and report it as a valuation allowance.
2) Key assumptions underpinning amounts reported on consolidated balance sheet for the year under review
Collectability is estimated based on future taxable income estimates and feasible tax planning.
3) Impact on consolidated statements for next consolidated fiscal year
The amount of “income taxes – deferred” is liable to change if we need to revise the amount ofdeferred tax assets. Such a revision may occur if actual performance necessitates a revision in futuretaxable income estimates (since these estimates depend on actual performance).
2. Valuation of sales rights
In accordance with the Pharma-Med Act, Taiyo Pharma Co., Ltd. holds sales rights for long-listed drugs.
(1) Amounts reported on consolidated statements in year under review(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
Sales rights

15,834

Consolidated fiscal year
ended March 31, 2024
13,979(2) Basis for accounting estimate for recognized item
1) Formula used to calculate carrying value in year under review
Sales rights are grouped separately and evaluated for indications of impairment. Several internal andexternal criteria are used to identify indications of impairment, including the following:- Sales activities associated with the sales right have consistently produced losses- There is a marked deviation from the initial plan
- Demand for the long-listed item has slumped (e.g., sales forecasts for the long-listed item havemarkedly declined or there is a spate of returns)- There is a marked decline in the point value assigned to the item in the annual drug price ranges
announced by the Ministry of Health, Labor and Welfare- Efforts to reduce sales costs are markedly off track
In the consolidated fiscal year under review, sales rights that showed indications of impairment were
written down to the recoverable amount, since the total amount of undiscounted future cash flows to bereceived from those sales rights was less than the carrying amount. The impairment loss totaled 4,792
million yen. In measuring impairment losses, the recoverable amount is measured by the value in use.
Value in use was calculated as the discounted present value of future cash flows approved by management
based on what they considered to be the remaining useful life of the sales rights.. The discount rate used
was 9.1%. For more details, see Consolidated statement of income: *3 Impairment loss.

- 105 -

2) Key assumptions underpinning amounts reported on consolidated balance sheet for the year under review• Estimated sales volume
The sales rights pertain to long-listed items, and the estimated sales volume for these items depends
on, among other things, the market for long-listed items and the emergence of generics.
• Sales priceSales prices, including those for the future fiscal years, will be affected by any changes to theofficial drug price ranges announced by the Ministry of Health, Labor and Welfare.
• Sales costs
Sales costs depend on the outsourcing contract terms with the contract manufacturing organization(CMO) and on the progress of the company’s strategy for reducing the sales costs.
• Discount rate
Selecting the method of calculation, the input data, and other factors pertinent to the discount raterequires a high degree of expertise and judgment.
3) Impact on consolidated statements for next consolidated fiscal year
Impairment could potentially be recognized in the future if it becomes necessary to change theassumptions in view of emerging economic trends.

- 106 -

Accounting standards not yet applied
Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, revised October 28, 2022)
Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, revised October 28,
2022)
Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, revised October 28,
2022)(1) Outline
In February 2018, the Accounting Standards Board of Japan published Partial Amendments to
Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28, February 16, 2018) and related
guidance (hereafter, “ASBJ Statement No. 28 and related guidance”). The Japanese Institute of Certified
Public Accountants (JICPA) completed transfer of control over practical guidance on tax effectaccounting to ASBJ, but decided to reconsider the following two points of debate after ASBJ Statement
No. 28 and related guidance were published.
• Classification of tax expenses (tax on other comprehensive income)• Tax effect from the sale of shares of subsidiaries, etc. (shares of subsidiaries and affiliated companies)
when the group tax-sharing system is applied(2) Effective date
The standard and related guidance will apply to our financial statements from the beginning of fiscal
year ended March 31, 2025.
(3) Effect of adoption of the accounting standard
We are currently evaluating the financial impact that the application of standard and related guidance
will have on our consolidated financial statements.
.
Accounting for and Disclosure of Current Taxes Related to the Global Minimum Tax Rules (ASBJ Practical
Solution No. 46, March 22, 2024)(1) Outline
The countries participating in the Inclusive Framework on Base Erosion and Profit Shifting (BEPS),
established by the Organization for Economic Cooperation and Development (OECD) and the G20
countries and regions, reached agreement on a global minimum tax in October 2021. In response to this,Japan also specified the handling of the Income Inclusion Rules (IIR), one of the internationally agreed
upon global minimum tax rules, in the Act on Partial Amendment of the Income Tax Act, etc. (Act No. 3,2023), which was enacted on March 28, 2023 and came into force in the fiscal year beginning April 1,
2024.
The purpose of the global minimum tax is to have multinational corporate groups and other entities
which meet certain requirements pay a minimum effective corporate tax rate of 15% on profits in eachcountry. This is a new taxation system to address the differences between the company generating net
income, which constitutes the base of the tax assessment, and the company which is obligated to pay
taxes. Accounting for and Disclosure of Current Taxes Related to the Global Minimum Tax Rules
specifies the accounting treatment and disclosure of corporate national and local income taxes relating to
the global minimum taxation system.
(2) Effective date
The standard and related guidance will apply to our financial statements from the beginning of fiscal
year ended March 31, 2025.
(3) Effect of adoption of the accounting standard
We are currently evaluating the financial impact that the application of Accounting for and Disclosureof Current Taxes Related to the Global Minimum Tax Rules and related guidance will have on ourconsolidated financial statements.
- 107 -

Additional information
Delivering treasury shares to employees through a trust
The Company has applied the “Practical Solution on Transactions of Delivering the Company’s Own
Stock to Employees etc. through Trusts” (ASBJ PITF No. 30, March 26, 2015).
(1) Overview of transactions
On May 2, 2014, the Board of Directors resolved to introduce an ESOP trust with the aim of (1)fostering feelings of solidarity and a willingness to participate in management, (2) raising employees’
morale and motivating them to contribute to our long-term performance and stock price, and (3)encouraging employees to contribute to our medium to long-term corporate value. Under this ESOP,
shares of the Company’s stock are held in a trust, the beneficiaries of which are eligible employees of theCompany. The trust purchases shares of the Company’s stock, either from the Company or on the stock
market, in an amount equivalent to the amount expected to be delivered to the eligible employees. All
purchases will comply with stock delivery rules established in advance. Pursuant to said rules, the trustthen delivers the shares to eligible employees during their service for no consideration, in an amountcommensurate with the employee’s rank during the period in which the shares were held in the trust. The
trust’s purchases of shares are funded entirely by the Company; employees bear none of the cost. We
record the ESOP trust’s assets/liabilities on the balance sheet as our own assets/liabilities (using theaggregate method).
(2) Total number of shares we expect employees to receive
The shares of the Company that remain in the trust are stated as treasury shares under net assets, in an
amount equivalent to the trust’s carrying value (minus ancillary costs). In the previous year, these sharesconsisted of 125,600 shares, with a carrying value of 228 million yen. In the year under review, theseshares consist of 62,240 shares, with a carrying value of 113 million yen.

- 108 -

Consolidated balance sheet*1

Of the Notes receivable - trade, accounts receivable – trade, and contract assets, the amounts forreceivables and contract assets pertaining to claims generated from contracts with customers are as
follows:(Millions of yen)
Consolidated fiscal year ended
March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(As of March 31, 2024)

Notes receivable – trade

1,888

2,387

Accounts receivable – trade

20,84625,957−

7

Contract assets*2

Endorsed amount in notes receivable – trade(Millions of yen)
Consolidated fiscal year ended
March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(As of March 31, 2024)

610

1,155

Endorsed amount in notes receivable –
trade
*3

Notes maturing on the last day of the consolidated fiscal year
The accounting treatment of notes maturing on the last day of the consolidated fiscal year issettlement on the note clearance date.
Because the last day of the consolidated fiscal year under review was a financial institution holiday,
the following amount for the notes maturing on the last day of the consolidated fiscal year is included in
the balance at end of period for the consolidated fiscal year.
(Millions of yen)
Consolidated fiscal year ended
March 31, 2023
(As of March 31, 2023)

Notes receivable – trade*4−

Consolidated fiscal year ended
March 31, 2024
(As of March 31, 2024)
47

Accumulated depreciation(Millions of yen)
Consolidated fiscal year ended
March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(As of March 31, 2024)

42,86347,812

Accumulated depreciation forproperty, plant and equipment*5Collateral assets and secured obligations
Assets pledged as collateral are as follows:(Millions of yen)
Consolidated fiscal year ended
March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(As of March 31, 2024)

Buildings and structures

922

956

Total

922

956

Secured obligations are as follows:- 109 -

(Millions of yen)
Consolidated fiscal year ended
March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(As of March 31, 2024)

Short-term borrowings

194

208

Total

194

208

- 110 -

*6

Overdraft facility
Taiyo Group concluded an overdraft agreement with a bank to help ensure efficient cash flow
management. The unused portion of the overdraft as of the closing date was as follows:(Millions of yen)
Consolidated fiscal year ended
March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(As of March 31, 2024)

24,92824,683

Used portion of overdraft

564

416

Overdraft remaining

24,36424,266

Overdraft limit- 111 -

Consolidated statement of income*1

Selling, general and administrative expenses
The key entries and amounts under this category are as follows:(Millions of yen)
Consolidated fiscal year ended
March 31, 2023
(April 1, 2022 to March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(April 1, 2023 to March 31, 2024)

4,096

4,679

458

535

Commission expenses

2,288

2,407

Depreciation

2,674

3,780

R&D expenses

4,275

5,933

Retirement benefit costs

202

270

Outsourcing expenses

1,198

1,245

Salaries
Accrued employees’ bonuses*2*3

R&D expenses
The portion of general and administrative expenses and current total manufacturing expenses
pertaining to R&D expenses is as follows:
Consolidated fiscal year ended
March 31, 2023
(April 1, 2022 to March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(April 1, 2023 to March 31, 2024)

4,483 million yen

6,194 million yen

Impairment loss
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
None.
Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
Taiyo Group recorded impairment loss on the following asset group:
Location

Taiyo Pharma Co., Ltd.
(Chiyoda-ku, Tokyo, Japan)

PurposeRight to sell ethicalpharmaceuticals

Asset group
Sales rights

Impairment loss on
non-current assets
4,792 million yen

Generally, we group assets by business unit.
Taiyo Pharma Co., Ltd.
In its impairment tests, we group assets according to individual “sales rights.” In the fiscal year underreview, Taiyo Pharma Co., Ltd. sales rights affected by a decline in earning potential were written down
to the recoverable amount, with the difference recorded as impairment loss under extraordinary losses.
The recoverable amount of these rights was measured by value in use and was calculated using a discountrate of 9.1% to discount future cash flows.

- 112 -

Consolidated statement of comprehensive income* Reclassification adjustments and tax effects of other comprehensive income(Millions of yen)

Valuation difference on availablefor-sale securities:
Occurring in fiscal year underreview
Reclassification adjustment

Consolidated fiscal year ended
March 31, 2023
(April 1, 2022 to March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(April 1, 2023 to March 31, 2024)

158

428

−

(25)

Before tax effectTax effect

158
(50)

403
(123)

Valuation difference on availablefor-sale securities

108

280

1,036

3,543

−

−

1,036

3,543

(65)

11

Foreign currency translation
adjustment:
Occurring in fiscal year underreview
Reclassification adjustment
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans, net of tax:
Occurring in fiscal year underreview
Reclassification adjustment

(13)

1

Before tax effectTax effect

(79)
24

12
(3)

Remeasurements of defined
benefit plans, net of tax

(55)

8

1,089

3,832

Total other comprehensive income- 113 -

Consolidated statement of changes in equity
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
1. Outstanding shares and treasury shares (classes and amounts)
Beginning of
consolidated fiscal
year ended March
31, 2023

Increase

End of consolidated
fiscal year ended
March 31, 2023

Decrease

Outstanding shares
Common shares(*Note 1)

58,083,128

102,373−

58,185,501

1,933,885

575,085

79,8202,429,150

Treasury shares
Common shares(*Notes 2, 3, 4)Notes:
1. The increase of 102,373 shares of common shares reflects the issuance of additional shares in a third-party allotment.
2. The amounts for common treasury shares include the portion that we have entrusted to The Master Trust Bank of Japan,
Ltd. for our ESOP (there were 205,420 such shares at the beginning of the fiscal year under review and 125,600 at the end).
3. The 575,085-treasury share increase occurred after the Board of Directors authorized the reacquisition of 575,000 sharesand 85 fractional shares.
4. The 79,820-treasury share decrease occurred after we delivered 78,000 shares from the ESOP trust and disposed of 1,820
of the ESOP trust shares.

2. Dividends(1) Amounts paid in dividends
Class of shares

Total dividends(Millions ofyen)June 18, 2022
Ordinary General
Shareholders’ Meeting

Common shares

November 7, 2022
Board of Directors meeting

Common shares

Resolution

Dividend per
share
(Yen)

Reference date

Effective date

2,085

37.00 March 31, 2022

June 20, 2022

2,080

37.00

September 30,
2022

December 1,
2022

Notes:
1. Of the total dividends resolved at the Ordinary General Shareholders’ Meeting on June 18, 2022, 7 million yen pertains toshares that we have entrusted to The Master Trust Bank of Japan, Ltd. for the ESOP.
2. Of the total dividends resolved at the meeting of the Board of Directors on November 7, 2022, 4 million yen pertains tosuch shares.

(2) Dividends with a reference date in the consolidated fiscal year under review and an effective date in
the next consolidated fiscal year
Resolution

Class ofsharesTotal dividends(Millions ofyen)

Source ofdividends

June 17, 2023
Ordinary General
Shareholders’ Meeting

Commonshares2,905

Retainedearnings

Dividend
per share(Yen)

Reference date

Effective date

52.00 March 31, 2023

June 19, 2023

Note: Of the total dividends resolved at the Ordinary General Shareholders’ Meeting on June 17, 2023, 6 million yen pertains
to shares that we have entrusted to The Master Trust Bank of Japan, Ltd. for the ESOP.

- 114 -

Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
1. Outstanding shares and treasury shares (classes and amounts)
Beginning of
consolidated fiscal
year ended March
31, 2024

Increase

End of consolidated
fiscal year ended
March 31, 2024

Decrease

Outstanding shares
Common shares(*Note 1)

58,185,501

106,058−

58,291,559

2,429,150

248

63,3602,366,038

Treasury shares
Common shares(*Notes 2, 3, 4)Notes:
1. The increase of 106,058 shares of common shares reflects the issuance of additional shares in a third-party allotment.
2. The amounts for common treasury shares include the portion that we have entrusted to The Master Trust Bank of Japan,
Ltd. for our ESOP (there were 125,600 such shares at the beginning of the fiscal year under review and 62,240 at the end).
3. The 248-share increase in common treasury shares resulted from the purchase of fractional shares.
4. The 63,360-treasury share decrease occurred after we delivered 62,800 shares from the ESOP trust and disposed of 560 of
the ESOP trust shares.

2. Dividends(1) Amounts paid in dividends
Class of shares

Total dividends(Millions ofyen)June 17, 2023
Ordinary General
Shareholders’ Meeting

Common shares

November 16, 2023
Board of Directors meeting

Common shares

Resolution

Dividend
per share(Yen)

Reference date

Effective date

2,905

52.00 March 31, 2023

June 19, 2023

2,127

38.00

September 30,
2023

December 1,
2023

Notes:
1. Of the total dividends resolved at the Ordinary General Shareholders’ Meeting on June 17, 2023, 6 million yen pertains toshares that we have entrusted to The Master Trust Bank of Japan, Ltd. for the ESOP.
2. Of the total dividends resolved at the meeting of the Board of Directors on November 6, 2023, 2 million yen pertains tosuch shares.

(2) Dividends with a reference date in the consolidated fiscal year under review and an effective date in
the next consolidated fiscal year
Resolution

Class ofsharesTotal dividends(Millions ofyen)

Source ofdividends

June 15, 2024
Ordinary General
Shareholders’ Meeting

Commonshares2,351

Retainedearnings

Dividend
per share(Yen)

Reference date

Effective date

42.00 March 31, 2024

June 17, 2024

Note: Of the total dividends resolved at the Ordinary General Shareholders’ Meeting on June 15, 2024, 2 million yen pertains
to shares that we have entrusted to The Master Trust Bank of Japan, Ltd. for the ESOP.

- 115 -

Consolidated statement of cash flows* Ending balance of cash and cash equivalents, and the consolidated balance sheet entries from which thisbalance is derived

Cash and deposits
Time deposits exceeding 3 months
Cash and cash equivalents

Consolidated fiscal year ended
March 31, 2023
(April 1, 2022 to March 31, 2023)

Consolidated fiscal year ended
March 31, 2023
(April 1, 2023 to March 31, 2024)

47,121 million yen

58,583 million yen

(33)

(919)

47,08857,664

Lease transactions
1. Finance lease transactions
We have omitted disclosure of the transactions because they are not significant enough to warrant
disclosure.
2. Operating lease transactions
The following table shows the future payments for non-cancellable unexpired leases.
(Millions of yen)

Consolidated fiscal year ended
March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year ended
March 31, 2024
(As of March 31, 2024)

Due within one year

429

309

Due after one year

475

756

905

1,066

Total

- 116 -

Financial instruments
1. Overview(1) Our policy on financial instruments
We generally try to self-fund our operations. However, if a project requires a large sum of capital, we
will fund it through a bank loan or other means after considering market conditions.
When investing temporary surplus funds, we will only use financial instruments that are sufficiently
stable.
For derivatives, we minimize the associated risks (we discuss these risks in the following section) by
refraining from speculative transactions.
(2) Our financial instruments and the risks they entail
Trade receivables: “Notes and accounts receivable – trade” entails customer credit risk. Foreign
currency-denominated trade receivables (which occur in relation to our overseas business operations) alsoentail exchange risk.
Investment securities: Most of our investment securities are shares in our business associates. They
are vulnerable to fluctuations in market prices.
Trade payables: Most of our “notes and accounts payable – trade” are due within four months. Thosethat are denominated in a foreign currency entail exchange risk.
Derivatives: We use forward foreign exchange contracts to hedge the exchange risk associated with
our foreign currency-denominated trade receivables.
(3)

Our rules and measures for managing these risks

1) Managing credit risk (the risk that our trading partners will fail to perform their contractual obligations tous)Trade receivables: Under our credit control rules, Taiyo Group regularly monitors the financial
position of our trading partners and manages their payment dates and balances accordingly. In this way,
we try to identify cases where a trading partner will struggle to repay due to financial difficulties as
quickly as possible, and provide repayment relief as necessary. Our consolidated subsidiaries follow thesame rules.
Derivatives: We acquire all our derivatives from financial institutions, which have stable credit.
Therefore, we believe that credit risk associated with our derivatives is negligible.
2) Managing market fluctuation risk (exchange and interest risks)Foreign currency-denominated trade receivables/payables and long-term borrowings: We and some ofour consolidated subsidiaries manage the foreign exchange risk associated with thesereceivables/payables and long-term borrowings by analyzing them in relation to the monthly trends ofeach currency concerned.
Investment securities: We regularly monitor the fair value and the financial position of the issuer (whois usually a business associate). As regards shares, we continually revise our share ownership in
consideration of market conditions and our relationships with our trading partners.
Executing and managing derivative transactions: We have established rules defining who has authority
to approve derivative transactions and the maximum amounts of the derivatives to be traded. Under theserules, a business division must obtain approval from a designated officer before enacting a derivativetransaction. The Board of Directors is regularly updated on the derivative transactions executed.
3) Managing funding liquidity risk (the risk that we cannot settle obligations with funds in the bank by thepayment date)All companies in the Taiyo Group prepare cash-flow plans as necessary to ensure that they can settle
obligations in a timely manner.
(4) Additional note on fair value
We take into account certain variables in determining the fair value of financial instruments. The useof different assumptions could result in a change in fair value. In the notes on derivative transactions, thefigure for derivative contracts does not in itself indicate the market risks concerning derivativetransactions.
- 117 -

2. Fair value, consolidated carrying value, valuation difference
The following tables show the fair value, consolidated carrying value, and the difference between themfor our financial instruments as of the end of previous and consolidated fiscal year under review.
Consolidated fiscal year ended March 31, 2023 (As of March 31, 2023)
Consolidated
carrying value(*Note 4)(Millions of yen)
(1) Investment securities
Other securities (*Note 2)(2) Long-term borrowings(including current portion of long-termborrowings)
Derivative transactions
Transactions that do not qualify for hedge
accounting
Transactions that qualify for hedge accounting
Total derivative transactions (*Note 3)

Fair value(*Note 4)(Millions of yen)

Difference(Millions of yen)

1,912

1,912

−

(66,076)(66,066)

9

(11)

(11)

−

−
(11)

−
(11)

−
−

Notes:
1. We have omitted cash and deposits, notes and accounts receivable – trade, notes and accounts payable – trade, accounts
payable – other, income taxes payable, and short-term borrowings because the fair value of these items is determined overa short period and resembles their carrying amount.
2. We have omitted unlisted shares and contributions to investment partnerships from “(1) Investment securities, Other
securities” because they are assets with no market value. See Note 1.
3. We show the receivables/payables arising from derivative transactions on a net basis.
4. Parenthesized figures indicate liabilities.

Consolidated fiscal year ended March 31, 2024 (As of March 31, 2024)
Consolidated
carrying value(* Note 4)(Millions of yen)
(1) Investment securities
Other securities (*Note 2)(2) Long-term borrowings(including current portion of long-termborrowings)
Derivative transactions
Transactions that do not qualify for hedge
accounting
Transactions that qualify for hedge accounting
Total derivative transactions (*Note 3)

Fair value(* Note 4)(Millions of yen)

Difference(Millions of yen)

2,381

2,381

−

(76,901)(76,846)

54

(33)

(33)

−

−
(33)

−
(33)

−
−

Notes:
1. We have omitted cash and deposits, notes and accounts receivable – trade, notes and accounts payable – trade, accounts
payable – other, income taxes payable, and short-term borrowings because the fair value of these items is determined overa short period and resembles their carrying amount.
2. We have omitted unlisted shares and contributions to investment partnerships from “(1) Investment securities, Other
securities” because they are assets with no market value. See Note 1.
3. We show the receivables/payables arising from derivative transactions on a net basis.
4. Parenthesized figures indicate liabilities.

- 118 -

Notes: 1. Securities with no readily discernible value(Millions of yen)

Consolidated fiscal year ended Consolidated fiscal year ended
March 31, 2023
March 31, 2024
(As of March 31, 2023)(As of March 31, 2024)

Class of shares
Unlisted shares
Shares of subsidiaries and associates
Contributions to investment
partnerships

299
1,152

209
1,394

1,711

1,847

2. Repayment schedule for long-term borrowings due after the consolidated closing date
Consolidated fiscal year ended March 31, 2023 (As of March 31, 2023)(Millions of yen)
Within 1 year
Long-term borrowings(including current
portion of long-termborrowings)

12,902

Due between Due between Due between Due between
1 and 2 years 2 and 3 years 3 and 4 years 4 and 5 years

30,781

10,529

6,707

4,818

Due after
5 years

337

Consolidated fiscal year ended March 31, 2024 (As of March 31, 2024)(Millions of yen)
Within 1 year
Long-term borrowings(including current
portion of long-termborrowings)

33,766

Due between Due between Due between Due between
1 and 2 years 2 and 3 years 3 and 4 years 4 and 5 years

13,064- 119 -

9,241

7,352

8,679

Due after
5 years

4,796

3. Breakdown of financial instruments by level of fair value
We have delineated three levels of fair value inputs for determining the fair value of financial instruments
based on the observability and significance of the values input for calculation.
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active
markets
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either
directly or indirectly
Level 3: Unobservable inputs
When our method for measuring fair value includes multiple significant inputs, we categorize the asset or
liability at the lowest level among these significant inputs.
(1) Financial instruments stated on the consolidated balance sheet at fair value
Consolidated fiscal year ended March 31, 2023 (As of March 31, 2023)(Millions of yen)

Fair value
Class of shares
Level 1

Level 2

Level 3

Total

Investment securities
Other securities
Shares

1,708

−

−

1,708

−

−

203

203

1,708

−

203

1,912

−

(11)

−

(11)

−

(11)

−

(11)

Bonds, Other
Total assets
Derivative transactions
Total liabilities* Parenthesized figures indicate liabilities.

Consolidated fiscal year ended March 31, 2024 (As of March 31, 2024)(Millions of yen)

Fair value
Class of shares

Level 1

Level 2

Level 3

Total

Investment securities
Other securities
SharesBonds, Other
Total assets
Derivative transactions
Total liabilities

2,062

−

−

2,062

−

−

318

318

2,062

−

318

2,381

−

(33)

−

(33)

−

(33)

−

(33)

* Parenthesized figures indicate liabilities.

- 120 -

(2) Financial instruments other than those stated on the consolidated balance sheet at fair value
Consolidated fiscal year ended March 31, 2023 (As of March 31, 2023)(Millions of yen)

Fair value
Class of shares
Level 1

Level 2

Level 3Total

Long-term borrowings(including current portion of long-termborrowings)−(66,066)−(66,066)

Total liabilities−(66,066)−(66,066)* Parenthesized figures indicate liabilities.

Consolidated fiscal year ended March 31, 2024 (As of March 31, 2024)(Millions of yen)Class of shares

Fair value
Level 1

Level 2

Level 3Total

Long-term borrowings(including current portion of long-termborrowings)−(76,846)−(76,846)

Total liabilities−(76,846)−(76,846)* Parenthesized figures indicate liabilities.
Note: About the method used to measure fair value and the inputs used in this method

Investment securities
We measure the fair value of listed shares by their quoted market prices. Since listed shares are traded on
active markets, we categorize this input as Level 1. However, the inputs used for unlisted convertible bonds withequity purchase warrants held by our company do not have an observable fair value. We therefore categorize
them as Level 3.
Derivative transactions
We base fair value on the market price quoted by the relevant financial institution. We categorize this input at
Level 2.
Long-term borrowings (including current portion)
We calculate the present value by discounting the sum of the principal and interest for each period by what
would be a reasonable interest rate for a similar loan. We categorize this input at Level 2. We state long-termborrowings with variable interest rates at the carrying amount because they reflect short-term market interest rate
trends and because their fair value is similar to their carrying value since our credit rating has not markedly
changed after we took them on.
For long-term borrowings associated with interest rate swaps qualifying for special accounting treatment, wefirst calculate the sum of the principal and interest together with the cash flows from the swap, and discount thissum at what would be a reasonable interest rate for a similar loan.

- 121 -

Securities
1. Other securities
Consolidated fiscal year ended March 31, 2023 (As of March 31, 2023)(Millions of yen)Type of security
Securities whose consolidated
carrying value exceeds theiracquisition price
Securities whose consolidated
carrying value does not exceed
their acquisition priceConsolidated carrying
value

Acquisition price

Valuation difference(1) Shares

1,703

1,256

446

(2) Other

−

−

−

1,703

1,256

446

(1) Shares

5

8

(2)

(2) Other

203

203

−

209

211

(2)

1,912

1,468

443

Subtotal

Subtotal

Total

Note: The above data excludes the unlisted shares (consolidated carrying value: 299 million yen) and contributions toinvestment partnerships (consolidated carrying value: 1,711 million yen). These financial instruments lack a readily
determinable fair value because they are assets with no market value.

Consolidated fiscal year ended March 31, 2024 (As of March 31, 2024)(Millions of yen)Type of security
Securities whose consolidated
carrying value exceeds theiracquisition price
Securities whose consolidated
carrying value does not exceed
their acquisition priceConsolidated carrying
value

Acquisition price

Valuation difference(1) Shares

1,951

1,116

834

(2) Other

106

79

27

2,058

1,195

862

(1) Shares

111

154

(43)

(2) Other

211

226

(15)

323

381

(58)

2,381

1,577

803

Subtotal

Subtotal

Total

Note: The above data excludes the unlisted shares (consolidated carrying value: 209 million yen) and contributions toinvestment partnerships (consolidated carrying value: 1,847 million yen). These financial instruments lack a readily
determinable fair value because they are assets with no market value.

2. Other securities that we have sold
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
None
Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
We have omitted disclosure of the transactions because they are not significant enough to warrant
disclosure.

- 122 -

Derivative transactions
1. Transactions that do not qualify for hedge accounting
Currency-related
Consolidated fiscal year ended March 31, 2023 (As of March 31, 2023)(Millions of yen)Class of shares

Transaction

Contract value

Contract value forcontracts exceeding
one year

Fair value

Valuationdifference

Foreign exchangetransactions
Off market
transactions

USD denominated sales

1,513

−

(30)

(31)

Yen denominated purchases

11,657−00Euro denominatedpurchases

5,500

−

18

18

Consolidated fiscal year ended March 31, 2024 (As of March 31, 2024)(Millions of yen)Class of shares

Transaction

Contract value

Contract value forcontracts exceeding
one year

Fair value

Valuationdifference

Foreign exchangetransactions
Off market
transactions

USD sold/TWD purchased

579

−

(15)

(15)

USD sold/CNY purchased

14

−

(0)

(0)

USD sold/KRW purchased

1,078

−

(15)

(15)

KRW sold/JPY purchased

8,687

−

(1)

(1)

2. Transactions that qualify for hedge accounting
Consolidated fiscal year ended March 31, 2023 (As of March 31, 2023)
None
Consolidated fiscal year ended March 31, 2024 (As of March 31, 2024)
None- 123 -

Retirement benefits
1. Our system of retirement benefits
We provide a points-based retirement allowance system that accords with the defined benefit corporation
pension system, and a defined contribution plan.
Some of our consolidated subsidiaries use a defined contribution plan in addition to a defined-benefit
corporate pension plan.
Some of our consolidated subsidiaries use a simplified method for calculating net defined benefit liability
and retirement benefit costs. Under this method, the amount of retirement benefits paid for voluntary
resignations at the fiscal year end is included in retirement benefit obligations.
2. Defined-benefit systems (other than those that use the simplified accounting method)(1) Opening/closing balance of retirement benefit obligations and adjusting entries(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(April 1, 2022
to March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(April 1, 2023
to March 31, 2024)

Opening balance of retirement benefit obligations
Service cost
Interest cost
Actuarial differences
Retirement benefit payments
Foreign exchange differences

2,704
304
17
54
(179)
5

2,906
307
18
(26)
(246)
(17)

Closing balance of retirement benefit obligations

2,906

2,941

(2) Opening/closing balance of pension assets and adjusting entries(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(April 1, 2022
to March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(April 1, 2023
to March 31, 2024)

Opening balance of pension assets
Expected rate of return
Actuarial differences
Employer’s contribution
Retirement benefit payments
Foreign exchange differences

3,113
32
5
337
(179)
5

3,316
56
(6)
262
(246)
20

Closing balance of pension assets

3,316

3,403

- 124 -

(3) Closing balance of retirement benefit obligations and pension assets, and adjusting entries for net
defined benefit asset/liability reported on the consolidated balance sheet(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(As of March 31, 2023)
Funded retirement benefit obligations
Pension assets

Consolidated fiscal year
ended March 31, 2024
(As of March 31, 2024)

2,906(3,316)

2,941(3,403)

Net asset (liability) reported on the consolidatedbalance sheet

(410)

(461)

Retirement benefit liability
Retirement benefit asset

−
(410)

−
(461)

Net asset (liability) reported on the consolidatedbalance sheet

(410)

(461)

(4) Breakdown of retirement benefit costs(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(April 1, 2022
to March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(April 1, 2023
to March 31, 2024)

Service cost
Interest cost
Expected rate of return
Adjustment for actuarial differences

304
17
(32)
(33)

307
18
(56)
(29)

Retirement benefit cost for defined-benefit systems

255

239

(5) Remeasurements of defined benefit plans, net of tax
The following table shows the breakdown of “remeasurements of defined benefit plans” (before tax
effects).
(Millions of yen)

Actuarial differences
Total

Consolidated fiscal year
ended March 31, 2023
(April 1, 2022
to March 31, 2023)(79)

Consolidated fiscal year
ended March 31, 2024
(April 1, 2023
to March 31, 2024)
12

(79)

12

(6) Remeasurements of defined benefit plans
The following table shows the cumulative effects of the adjusting entries for retirement benefits(before tax effects).
(Millions of yen)

Unrecognized actuarial gain or loss
Total

- 125 -

Consolidated fiscal year
ended March 31, 2023
(As of March 31, 2023)(21)

Consolidated fiscal year
ended March 31, 2024
(As of March 31, 2024)
(8)

(21)

(8)

(7) Notes on pension assets
1) Key pension assets
The following table shows the main constituent assets of total pension assets.
Consolidated fiscal year
ended March 31, 2023
(As of March 31, 2023)
100 %General accounts assets
Total

100

Consolidated fiscal year
ended March 31, 2024
(As of March 31, 2024)
100 %
100

2) Method of setting the expected long-term rate of return for pension assets
We consider how we currently distribute the pension assets and how we expect to do so in the
future. We also consider the present and expected long-term rate of return for each constituent asset.
(8) Criteria for determining actuarial gains/losses
The following table shows the main criteria we use to determine actuarial gains/losses (the figuresindicate weighted averages).
Consolidated fiscal year
Consolidated fiscal year
ended March 31, 2023
ended March 31, 2024
(As of March 31, 2023)(As of March 31, 2024)
Discount rate
0.63 %
0.62 %
Expected long-term rate of return
1.0 %
1.0 %
Expected salary increase rate
7.28 %
6.66 %
3. Defined-benefit systems that use the simplified accounting method(1) Opening/closing balance of net defined benefit liability subject to the simplified accounting method andadjusting entries(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(April 1, 2022
to March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(April 1, 2023
to March 31, 2024)

Opening balance of net defined benefit liability
Retirement benefit costs
Retirement benefit payments
Contribution to system
Increase from new consolidations
Pension fund dissolution
Foreign exchange differences

115
(18)
(73)
(2)
−
−
(5)

16
8
(21)
−
197
92
−

Closing balance of net defined benefit liability

16

292

- 126 -

(2) Closing balance of retirement benefit obligations and pension assets, and adjusting entries for net
defined benefit asset/liability reported on the consolidated balance sheet(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(As of March 31, 2024)

Funded retirement benefit obligations
Pension assets

−
(92)

−
−

Net asset (liability) reported on the consolidatedbalance sheet

(92)

−

Non-funded retirement benefit obligations

108

292

Net asset (liability) reported on the consolidatedbalance sheet

108

292

Retirement benefit liability
Retirement benefit asset

108
(92)

292
−

Net asset (liability) reported on the consolidatedbalance sheet

16

292

(3) Retirement benefit costs
Retirement benefit costs determined using simplified accounting method
Previous consolidated fiscal year:(18 million yen)
Consolidated fiscal year under review:
8 million yen
4. Defined contribution plans
The contribution that we and some of our consolidated subsidiaries have made amounted to 263 million
yen in the previous consolidated fiscal year, and 298 million yen in the consolidated fiscal year under review.
Stock options
None- 127 -Tax effect accounting
1. Breakdown of the main factors that generate deferred tax assets and deferred tax liabilities(Millions of yen)
Consolidated fiscal year
ended March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(As of March 31, 2024)

49
284
306
117
1,074
880
827
318
669
770

108
432
312
136
1,537
736
275
417
2,135
1,047

Deferred tax assets subtotal
Valuation allowance for tax loss carried forward (*Note 2)
Valuation allowance for total future deductible temporary
differences

5,299(1,024)7,140(1,537)(3,477)(1,737)

Valuation allowance subtotal(4,502)(3,274)

Deferred tax assets
Retirement benefit liability
Deferred tax assets for unrealized gains
Denial of accrued employees’ bonuses
Denial of accrued enterprise tax
Loss carried forward (*Note 2)Over depreciation
Asset adjustment account
Asset retirement obligations
Impairment losses
Other

Deferred tax assets total
Deferred tax liabilities
Deferred tax liabilities for subsidiaries’ retained earnings
Valuation difference on available-for-sale securities
Retirement benefit asset
Customer-related assets
Other

796

3,865

1,869
195
154
1,709
340

2,197
318
132
1,560
465

Deferred tax liabilities total
Net deferred tax liabilities (*Note 1)

4,269
3,472

4,675
809

Note: 1. The net deferred tax assets (liabilities) for the current and previous consolidated fiscal year are includedin the following consolidated balance sheet entries.
(Millions of yen)

Non-current assets - Deferred tax assets
Non-current liabilities - Deferred tax liabilities- 128 -

Consolidated fiscal year
ended March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(As of March 31, 2024)

501
3,974

391
1,200

2. Tax loss carried forward and deferred tax assets by carry-forward period

Consolidated fiscal year ended March 31, 2023 (As of March 31, 2023)(Millions of yen)
Within 1 year

Due between
1 and 2 years

Due between
2 and 3 years

Due between
3 and 4 years

Due between
4 and 5 years

Tax loss carriedforward (*Note 1)

−

1

26

95

136

Valuation
allowance

−

(1)

(26)

(95)

(136)

Deferred tax assets

−

−

−

−

−

(Millions of yen)
Between 5 and Between 6 and Between 7 and Between 8 and Between 9 and6 years
7 years
8 years
9 years
10 years

Total

Tax loss carriedforward (*Note 1)

118

124

148

185

238

1,074

Valuation
allowance

(118)

(124)

(148)

(155)

(218)

(1,024)

−

−

−

29

20

(*Note 2) 49

Deferred tax assets

Notes:
1. Tax loss carried forward is multiplied by the legally effective tax rate.
2. Of the 1,074 million yen in tax loss carried forward, we recorded 49 million yen in deferred tax assets. The 49
million yen in deferred tax assets constitutes part of the 208 million yen balance of consolidated subsidiaries’
tax loss carried forward (multiplied by the legally effective tax rate). The tax loss carried forward that wasrecorded as “deferred tax assets” is the result of estimating future taxable income. As such, we do not recognize
valuation allowance based on recoverability estimation.

Consolidated fiscal year ended March 31, 2024 (As of March 31, 2024)(Millions of yen)
Within 1 year

Between 1 and Between 2 and Between 3 and Between 4 and2 years
3 years
4 years
5 years

Tax loss carriedforward (*Note 1)

1

26

95

136

345

Valuation
allowance

(1)

(26)

(95)

(136)

(345)

Deferred tax assets

−

−

−

−

−

(Millions of yen)
Between 5 and Between 6 and Between 7 and Between 8 and Between 9 and6 years
7 years
8 years
9 years
10 years

Total

Tax loss carriedforward (*Note 1)

122

148

155

222

282

1,537

Valuation
allowance

(122)

(148)

(155)

(222)

(282)

(1,537)

−

−

−

−

−

(*Note 2) −Deferred tax assets

Notes:
1. Tax loss carried forward is multiplied by the legally effective tax rate.
2. The full amount of the tax loss carried forward has been determined as unrecoverable.

- 129 -

2. Breakdown of the main factors underlying any differences between the legally effective tax rate and theactual effective tax rate after applying tax effect accounting
Consolidated fiscal year
ended March 31, 2023
(As of March 31, 2023)

Consolidated fiscal year
ended March 31, 2024
(As of March 31, 2024)

Legally effective tax rate
(Adjusting entries)
Tax rate differences with overseas subsidiaries
Tax rate differences associated with offset of dividend
incomeTax adjustments for overseas subsidiaries’ retained earnings
Tax rate differences associated with permanent differencessuch as entertainment expenses
Permanent differences on withholding tax on dividends notincluded in expenses
Tax adjustments for amortization of goodwill
Tax deductions for testing and research expenses
Other

30.62%

30.62%(4.03)(7.38)

0.46

0.48(0.52)

2.31

0.45

0.54

2.07

2.85

0.94
(3.17)(0.57)

1.20(5.04)
2.92

Actual effective tax rate after applying tax effect accounting

26.24

28.50

3. Accounting treatment of corporate and local income taxes and tax effect accounting for them
The Company and its domestic consolidated subsidiaries have adopted the group tax-sharing system. Our
accounting treatment of and tax effect accounting for national and local corporate taxes and disclosure are inaccordance with the Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing
System (Practical Solution No. 42, August 12, 2021).
Asset retirement obligations
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
We have omitted disclosure of the transactions because they are not significant enough to warrant
disclosure.
Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
We have omitted disclosure of the transactions because they are not significant enough to warrant
disclosure.
Rentals and other real-estate assets
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
We have omitted disclosure of the transactions because they are not significant enough to warrant
disclosure.
Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
We have omitted disclosure of the transactions because they are not significant enough to warrant
disclosure.

- 130 -

Revenue recognition
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
1. Breakdown of revenue generated from contracts with customers(Millions of yen)
Reportable segment
Medical andElectronics
Pharmaceuticals
Japan
China
TaiwanSouth Korea
Other
Revenue generated fromcontracts with customers

Other(*Note)

Total

Total

4,984
34,378
7,309
15,8105,936

25,447−−−−30,432
34,378
7,309
15,810
5,936

3,452
−
19
−
−

33,88534,378
7,328
15,8105,936

68,41925,447

93,866

3,472

97,338Other revenue

−

−

−

−

−

External sales

68,41925,447

93,866

3,472

97,338

Note: The “Other” category represents operating segments not included in reportable segments, and includes the
ICT, fine chemicals, energy, and food businesses. These are collectively referred to as ICT and Sustainability
business.

Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
1. Breakdown of revenue generated from contracts with customers(Millions of yen)
Reportable segment
Medical andElectronics
Pharmaceuticals
Japan
China
TaiwanSouth Korea
Other
Revenue generated fromcontracts with customers

Other(*Note)

Total

Total

4,099
39,987
6,995
14,087
6,245

29,269−−−−33,36839,987
6,995
14,087
6,245

4,090
−
−
−
−

37,45939,987
6,995
14,087
6,245

71,41529,269100,684

4,090

104,775

Other revenue

−

−

−

−

−

External sales

71,41529,269100,684

4,090

104,775

Note: The “Other” category represents operating segments not included in reportable segments, and includes the
ICT, fine chemicals, energy, and food businesses. These are collectively referred to as ICT and Sustainability
business.

2. Information that serves as a basis for discerning revenue generated from contracts with customers
This information can be found in “Basic factors underlying our consolidated financial statement, 4.
Accounting policies, (5) Accounting standard for major revenues and expenses.”
3. Information for discerning the relationship between satisfaction of performance obligations in a contract
with a customer and the cash flows pertaining to that contract; information for discerning the amount ofrevenue expected to be recognized in the next consolidated fiscal year and the timing of recognition from acontract with a customer at the end of the consolidated fiscal year under review- 131 -

(1) Balance of contract assets and contract liabilities, etc.
(Millions of yen)
Consolidated fiscal year Consolidated fiscal year
ended March 31, 2023
ended March 31, 2024
Receivables from contracts with customers: Opening balance

27,55822,734

Receivables from contracts with customers: Closing balance

22,734

28,345Contract assets: Opening balance−−Contract assets: Closing balance−

7(2) Transaction price distributed to outstanding performance obligations
We omit contracts that are expected to be completed within a year from the notes for practical
expedience. Since we generally base production on forecasts, we have no contracts with terms
expected to exceed one year.

- 132 -

Segment information and related information
Segment information
1. Overview of reportable segments
The reportable segments of the Group are components of the Group whose separate financial information
is available. These segments are periodically evaluated by the Board of Directors in deciding how to allocate
management resources and in assessing the performance.
The Group has operating subsidiaries for different products and services. Each operating subsidiary
formulates comprehensive domestic and overseas strategies and conducts business activities for the products
and services it handles.
Group business segments are, therefore, based on these operating subsidiaries and are divided into tworeportable segments: The Electronics and the Medical and Pharmaceuticals businesses.
The Electronics business develops, manufactures, sells, and procures and sells printed circuit board
materials and chemical products for use in electronic components. The Medical and Pharmaceutical businessengages in the manufacturing and marketing of ethical pharmaceuticals and provides contract development
and manufacturing organization (CDMO) services for ethical pharmaceuticals.
2. Information on the calculation of net sales, profit or loss, assets, and other items by reportable segment
The accounting method applied for the reportable segments is complied with the accounting policies
adopted for preparation of consolidated financial statements.
Profit by reportable segment represents operating income.
Inter-segment revenue and transfers are based on the market prices.
3. Information regarding net sales, profit or loss, assets and other items by reportable segment
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Reportable segment

Other(*Note 1)

Total

Electronics

Medical andPharmaceuticals

68,41925,447

93,866

3,472

97,338

0

−

0

293

293

Total
Segment profit

68,41915,84525,447
1,906

93,866
17,752

3,766
26

97,632
17,778Segment assets

72,07875,388147,466

8,001

155,468

2,433

3,981

6,414

388

6,803

3,299

8,072

11,371520

11,892

Net sales
External sales
Inter-segment sales ortransfers

Other items
Depreciation (*Note 2)
Increase in property, plantand equipment, andintangible assets

Total

Notes:
1. The “Other” category represents operating segments not included in reportable segments, and includes ICT
business, fine chemicals business, energy business, and food business. These are collectively referred to as ICT
and Sustainability business.
2. Depreciation does not include amortization of goodwill.

- 133 -

Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31 2024)(Millions of yen)
Reportable segment

Other(*Note 1)

Total

Electronics

Medical andPharmaceuticals

71,41529,269100,684

4,090

104,775

0

−

0

335

335

Total
Segment profit

71,415
16,45629,2693,248

100,684
19,704

4,425
78

105,110
19,783

Segment assets

86,953

66,265

153,218

10,013

163,232

2,749

5,068

7,818

396

8,215

12,342

7,388

19,731556

20,287

Net sales
External sales
Inter-segment sales ortransfers

Other items
Depreciation (*Note 2)
Increase in property, plantand equipment, andintangible assets

Total

Notes:
1. The “Other” category represents operating segments not included in reportable segments, and includes ICT
business, fine chemicals business, energy business, and food business. These are collectively referred to as ICT
and Sustainability business.
2. Depreciation does not include amortization of goodwill.

4. Differences between total amounts in reportable segments and the amount recorded on consolidated financial
statements, and details of thereof (reconciliation)(Millions of yen)

Consolidated fiscal year
ended March 31, 2023

Net sales

Consolidated fiscal year
ended March 31, 2024

Reportable segment total“Other” segment net sales
Inter-segment eliminations or transfers

93,866
3,766(293)

100,684
4,425
(335)

Net sales in the consolidated statement of income

97,338104,775(Millions of yen)

Consolidated fiscal year
ended March 31, 2023

Profit (Loss)

Consolidated fiscal year
ended March 31, 2024

Reportable segment total“Other” segment profit
Inter-segment eliminations or transfers
Profit (Loss) not allocated to business segments (Note)

17,75226(29)(1,776)

19,70478(22)(1,557)

Operating income in the consolidated statement ofincome15,972

18,203

Note: Profit (Loss) primarily related to the holding company (company filing the consolidated financial statements).
(Millions of yen)
Consolidated fiscal year
ended March 31, 2023

AssetsConsolidated fiscal year
ended March 31, 2024

Reportable segment total“Other” segment assets
Inter-segment eliminations or transfers
Assets not allocated to business segments (*Note)
Reclassification by tax effect147,466
8,001(61)
31,918(62)

153,218
10,013(92)
49,900(288)

Total assets reported in consolidated balance sheet

187,263

212,751

Note: Assets primarily related to the holding company (company filing the consolidated financial statements).

- 134 -

(Millions of yen)
Reportable segment
total
Other items

Other

Adjustments (*Note)

Amount on the
consolidated financial
statements

Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
ended March ended March ended March ended March ended March ended March ended March ended March
31, 2023
31, 2024
31, 2023
31, 2024
31, 2023
31, 2024
31, 2023
31, 2024

Depreciation

6,414

7,818

388

396

638

461

7,441

8,676

Increase in property,
plant and equipment,
and intangible assets

11,371

19,731

520

556

2,178

(639)

14,07019,648

Note: Primarily related to the holding company (company filing the consolidated financial statements).

Related information
I

Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
1. Information by product and service(Millions of yen)

Medical andPharmaceuticals

Electronics
External sales

68,41925,447

Other

Total

3,472

97,338

2. Information by region(1) Net sales(Millions of yen)

Japan

China

33,88534,378

TaiwanSouth Korea

7,328

15,810

Other
5,936

Total
97,338

Note: Net sales are classified by country or region based on the location of customers.

(2) Property, plant and equipment(Millions of yen)

Japan

China

49,226

3,769

TaiwanSouth Korea

3,883

1,749

Other
1,773

Total
60,401

3. Information by main customer(Millions of yen)

Customer Name

Net sales

Daiichi Sankyo Co., Ltd.
(*Note)Name of Related Segment
10,450

Medical and Pharmaceuticals

Note: Shows aggregated net sales posted to Daiichi Sankyo Espha Co., Ltd., which is affiliated with the Daiichi
Sankyo Co., Ltd. corporate group.

- 135 -

II Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
1. Information by product and service(Millions of yen)

Medical andPharmaceuticals

Electronics
External sales

71,415Other

29,269

Total

4,090

104,775

2. Information by region(1) Net sales(Millions of yen)

Japan

China

37,459Taiwan39,987

South Korea

6,995

Other

14,087

Total

6,245

104,775

Note: Net sales are classified by country or region based on the location of customers.

(2) Property, plant and equipment(Millions of yen)

Japan

China

54,996

Taiwan5,425South Korea

4,459

Other

1,809

Total

2,161

68,852

3. Information by main customer(Millions of yen)

Customer Name

Net sales

Name of Related Segment

Daiichi Sankyo Co., Ltd.
(*Note)12,746

Medical and Pharmaceuticals

Note: Shows aggregated net sales posted to Daiichi Sankyo Espha Co., Ltd., which is affiliated with the Daiichi
Sankyo Co., Ltd. corporate group.

Impairment loss on non-current assets in each reportable segment
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
None
Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)
Reportable segment
Electronics
Impairment losses−

Medical andPharmaceuticals
4,792

Total

Corporateandelimination

Other

4,792

−

−

Total
4,792

Amortization of goodwill and unamortized balance in each reportable segment
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Reportable segment
Electronics

Medical andPharmaceuticals

Total

Other

Corporateandelimination

Total

Amortization during
period

52

271

323

10

−

334

Balance at end of
period

526

4,423

4,949

24

−

4,974

Note: The figure for “Other” is the amount for the ICT and Sustainability business.

- 136 -

Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)
Reportable segment
Electronics

Medical andPharmaceuticals

Total

Other

Corporateandelimination

Total

Amortization during
period

53

225

279

10

−

290

Balance at end of
period

512

2,370

2,883

13

−

2,896

Note: The figure for “Other” is the amount for the ICT and Sustainability business.
Information on negative goodwill in each reportable segment
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
None
Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
None- 137 -

Related parties
Transactions with related parties
Transactions between us (the filer of the consolidated financial statements) and related parties(1) Transactions with parent and major shareholders (corporate shareholders only)
None(2) Transactions with non-consolidated subsidiaries and affiliates
None(3) Transactions with corporate officers and major shareholders (individual shareholders only)
Consolidated fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)

Party

Address

Equity(amount
invested incompany)(Millions ofyen)

Business
description/Job
title

Holding/Held Our relationshipratio (%)
with the party

Eiji Sato−−

President andCEO (Taiyo
Holdings Co.,Ltd.)

(Directly
held by the
party) 0.81

We issued
shares to theparty in a thirdparty allotment

We issued
shares to theparty in a thirdparty allotment

Hitoshi Saito−−

We issued
Board Director (Directly held
shares to the(Taiyo Holdings by the party)
party in a thirdCo., Ltd.)
0.14
party allotment

Name

Corporate
officer
Eiji Takehara−−

Board Director (Directly(Taiyo Holdings held by theCo., Ltd.)
party) 0.16

Masao Arima−−

Board Director (Directly(Taiyo Holdings held by theCo., Ltd.)
party) 0.05

Entry

Closingbalance(Millionsof yen)191−−

We issued
shares to theparty in a thirdparty allotment

51

−

−

We issued
shares to theparty in a thirdparty allotment

We issued
shares to theparty in a thirdparty allotment

34

−

−

We issued
shares to theparty in a thirdparty allotment

We issued
shares to theparty in a thirdparty allotment

19

−

−

Transaction

Transaction
amount(Millions ofyen)

Notes:
1. Information about the transactions and how we determined them:
The transactions concerned common shares that we issued as part of the transfer-restricted stock compensation
for the 76th business term (fiscal year ended March 31, 2022). We determined the transactions based on thecommon share price.
2. We calculated the ratios held by the parties after subtracting treasury shares.

Consolidated fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)

Party

Address

Equity(amount
invested incompany)(Millions ofyen)

Business
description/Job
title

Holding/Held Our relationshipratio (%)
with the party

Eiji Sato−−

President andCEO (Taiyo
Holdings Co.,Ltd.)

(Directly
held by the
party) 0.90

We issued
shares to theparty in a thirdparty allotment

We issued
shares to theparty in a thirdparty allotment

Hitoshi Saito−−

Board Director (Directly(Taiyo Holdings held by theCo., Ltd.)
party) 0.20

We issued
shares to theparty in a thirdparty allotment

Eiji Takehara−−

Board Director (Directly(Taiyo Holdings held by theCo., Ltd.)
party) 0.18

Masao Arima−−

Board Director (Directly(Taiyo Holdings held by theCo., Ltd.)
party) 0.07

Name

Corporate
officer

Entry

Closingbalance(Millionsof yen)138−−

We issued
shares to theparty in a thirdparty allotment

87

−

−

We issued
shares to theparty in a thirdparty allotment

We issued
shares to theparty in a thirdparty allotment

28

−

−

We issued
shares to theparty in a thirdparty allotment

We issued
shares to theparty in a thirdparty allotment

28

−

−

Transaction

Transaction
amount(Millions ofyen)

Notes:
1. Information about the transactions and how we determined them:
The transactions concerned common shares that we issued as part of the transfer-restricted stock compensation
for the 77th business term (fiscal year ended March 31, 2023). We determined the transactions based on thecommon share price.
2. We calculated the ratios held by the parties after subtracting treasury shares.

- 138 -

Per share information
Consolidated fiscal year ended
March 31, 2023
(April 1, 2022 to March 31,
2023)
Net assets per share
Basic earnings per share

Consolidated fiscal year ended
March 31, 2024
(April 1, 2023 to March 31,
2024)

1,663.25 yen

1,795.14 yen

203.71 yen

154.89 yen

Notes:
1. Diluted earnings per share is not presented because there are no dilutive shares.
2. In calculating net assets per share, treasury shares are deducted, and shares held in the trust account for shares
granted under the Employee Stock Ownership Plan (ESOP) are included in the treasury shares (previous
consolidated fiscal year: 125,600 shares; consolidated fiscal year under review: 62,240 shares).
3. Basis for calculating basic earnings per share is shown below:

Consolidated fiscal year ended
March 31, 2023
(April 1, 2022 to March 31,
2023)
Profit attributable to owners of parent(Millions of yen)Amount not attributable to common shareholders(Millions of yen)
Profit attributable to owners of parent forcommon shares (Millions of yen)
Average number of outstanding common shares
during the period (Shares)

Consolidated fiscal year ended
March 31, 2024
(April 1, 2023 to March 31,
2024)

11,405

8,654

−

−

11,4058,654

55,989,729

55,873,328

Note: In calculating the average number of outstanding common shares during the period, treasury shares are
deducted and shares held in the trust account for shares granted under the Employee Stock Ownership Plan
(ESOP) are included in the treasury shares (previous consolidated fiscal year: 150,258 shares; consolidated
fiscal year under review: 81,866 shares).

Significant subsequent events
None- 139 -

5) Consolidated supplementary schedules
Schedule of bonds payable
None
Schedule of loans payable
Balance atBalance at end of
beginning of
periodperiod(Millions of yen)
(Millions of yen)Class of shares

Average interest
rate
(%)

Repayment
periodShort-term borrowings

5,424

9,821

5.58

−

Current portion of long-termborrowings

12,902

33,766

0.24−

Long-term borrowings other than those
we expect to repay within one year

53,174

43,1340.32

2025-2034

Total

71,501

86,722−−

Notes:
1. Average interest rate indicates the weighted average interest rate for the closing balance.
2. We receive interest subsidies for some of the current portion of long-term borrowings.
3. The following table shows the scheduled repayments for long-term borrowings that we do not expect to repay within one
year. The repayments are scheduled for the five years following the consolidated settlement date.
(Millions of yen)Due between
1 and 2 years

Due between
2 and 3 years

Due between
3 and 4 years

Due between
4 and 5 years

13,064

9,241

7,352

8,679

Long-term
borrowings

Due after
5 years
4,796

Schedule of asset retirement obligations
Our asset retirement obligations were less than one-hundredth of the balance of our liabilities and net assets
as of the beginning and end of the current consolidated fiscal year under review. Accordingly, we have omitted
these obligations as permitted under Article 92-2 of the Ordinance on Terminology, Forms, and Preparation
Methods for Consolidated Financial Statements.
(2) Other
Quarterly consolidated information for the consolidated fiscal year ended March 31, 2024
(Cumulative period)

Q1

Net sales (Millions of yen)
Profit before income taxes(Millions of yen)
Profit attributable to owners ofparent (Millions of yen)
Basic earnings per share (yen)(Accounting period)
Basic earnings per share (yen)Q2

Consolidated fiscal
year ended March
31, 2024Q3

23,861

51,10778,040104,775

3,235

8,651

13,771

12,102

2,561

6,232

10,196

8,654

45.94

111.64182.54154.89

Q1

Q2
45.94

Q3
65.70

- 140 -

Q4
70.88

(27.58)

2. Financial statements, other financial information(1) Financial statements
1) Balance sheet [Unaudited](Millions of yen)
Fiscal year ended
March 31, 2023
(As of March 31, 2023)
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Short-term loans receivable from subsidiaries
and associates
Income taxes refund receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Land
Other
Total property, plant and equipment
Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates
Prepaid pension costs
Long-term loans receivable from subsidiaries
and associates
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 141 -

Fiscal year ended
March 31, 2024
(As of March 31, 2024)

12,382*1
597

33,392
*1
760

5,079

11,7191,625
2,638
22,323

*1

1,250
1,418
48,541

*1

4,645
2,735
2,311
9,692

4,563
2,735
738
8,037

1,361
57
1,419

1,172
327
1,500

3,337
42,6203,797
36,768

2,727

2,634

296

292

35,44634,190525(1,783)
83,16994,281
116,604570(3,647)74,606
84,145
132,686

(Millions of yen)
Fiscal year ended
March 31, 2023
(As of March 31, 2023)
Liabilities
Current liabilities
Short-term borrowings
Current portion of long-term borrowings
Accounts payable - other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Asset retirement obligations
Deferred tax liabilities
Provision for loss on guarantees
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets*1, *2

7,665
9,881
*1
1,118
25
224
128
19,044- 142 -

Fiscal year ended
March 31, 2024
(As of March 31, 2024)*1, *2

12,08329,773
*1
2,141
37
234
173
44,44443,01736474−
136
43,592
62,637

31,827
367
167
82
135
32,58077,024

9,761

9,903

10,7285,294
16,023

10,8705,294
16,165620

620

12,70020,53733,858(6,107)53,535

12,70021,56334,883(5,993)
54,959

431

702

431
53,967
116,604702
55,662
132,686

2) Statement of income [Unaudited](Millions of yen)

Operating revenue
Dividends from subsidiaries and associates
Royalty income
Information system fee revenue
Real estate lease revenue
Total operating revenue
Operating expenses
Operating income
Non-operating income
Interest income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on investment partnerships
Other
Total non-operating expenses
Ordinary income
Extraordinary losses
Provision of allowance for doubtful accounts for
subsidiaries and associates
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit- 143 -

Fiscal year ended
March 31, 2023
(April 1, 2022
to March 31, 2023)

Fiscal year ended
March 31, 2024
(April 1, 2023
to March 31, 2024)

10,492
3,026
68
429
*1
14,016*1, *2
7,227
6,788

11,785
3,185
62
429
*1
15,463*1, *2
8,227
7,236

322
194
*1
516

652
179
*1
831

422
－
330
*1
753
6,551

679
275
219
*1
1,173
6,894

997

1,863

997
5,553
(794)
(13)
(808)
6,362

1,863
5,030
(1,001)(26)(1,028)6,0583) Statement of changes in equity [Unaudited]
Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders' equity
Capital surplus
SharecapitalRetained earnings
Other retained earnings

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

10,5805,294

15,875620

Total
retainedearnings

Total
Treasuryshareholders'sharesequityGeneralreserve

Retainedearnings
brought
forward12,70018,34031,661Dividends of surplus(4,165)(4,165)(4,165)

Profit

6,362

6,362

6,362

Balance at beginning of period

9,612(4,752)

52,396

Changes during period

Issuance of new shares

148

148

148

297

Purchase of treasury shares(1,500)(1,500)

Disposal of treasury shares

145

145

Net changes in items otherthan shareholders' equity
Total changes during period
Balance at end of period

148

148

−

148

−

−

2,196

2,196

(1,354)

1,139

9,761

10,7285,294

16,023620

12,70020,53733,858(6,107)53,535

Valuation andtranslation adjustments
Valuation
Total
Total netdifference
valuationassetsonandavailabletranslation
for-saleadjustments
securities
Balance at beginning of period

319

319

52,715

Changes during period
Dividends of surplus(4,165)

Profit6,362

Issuance of new shares

297

Purchase of treasury shares(1,500)

Disposal of treasury shares

145

Net changes in items otherthan shareholders' equity

112

112

112

Total changes during period

112

112

1,251

Balance at end of period

431

431

53,967- 144 -

Fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)
Shareholders' equity
Capital surplus
SharecapitalRetained earnings
Other retained earnings

Legal
capitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

10,7285,294

16,023620

Total
retainedearnings

Total
Treasuryshareholders'sharesequityGeneralreserve

Retainedearnings
brought
forward12,70020,53733,858Dividends of surplus(5,033)(5,033)(5,033)

Profit

6,058

6,058

6,058

Balance at beginning of period

9,761(6,107)53,535

Changes during period

Issuance of new shares

141

141

141

283

Purchase of treasury shares

(0)

(0)

Disposal of treasury shares

115

115

Net changes in items otherthan shareholders' equity
Total changes during period
Balance at end of period

141

141

9,903

10,870141
5,294

16,165

Valuation andtranslation adjustments
Valuation
Total
Total netdifference
valuationassetsonandavailabletranslation
for-saleadjustments
securities
Balance at beginning of period

431

431

53,967

Changes during period
Dividends of surplus(5,033)

Profit6,058

Issuance of new shares

283

Purchase of treasury shares(0)

Disposal of treasury shares

115

Net changes in items otherthan shareholders' equity

270

270

270

Total changes during period

270

270

1,694

Balance at end of period

702

702

55,662- 145 -

620

12,700

1,025

1,025

114

1,424

21,56334,883(5,993)

54,959

NotesMain accounting policies
1. Basis and method of valuation of assets
Securities
1) Shares in subsidiaries and associates
We state at cost, as determined by the moving average method
2) Other securities… with readily discernible value
We state at fair value, as determined by the market price on the year-end date (we processvaluation discrepancies by the total direct capitalization method and calculate cost of sales by themoving average method).
…with no readily discernible value
We generally state at cost, as determined by the moving average method.
For our contributions to investment partnerships (only those defined as securities under
Article 2-2 of the Financial Instruments and Exchange Act), we state the net value of our equity
interest (as gleaned from available financial statements) according to the partnership’s settlementdate.
2. Depreciation methods for non-current assets(1) Property, plant and equipment
We apply the declining balance method. However, we apply the straight-line method forbuildings (excluding accompanying facilities) that we acquired after April 1, 1998, and foraccompanying facilities and structures that we acquired after April 1, 2016.
Useful lives of major property, plant and equipment are as follows:
Buildings: 15-50 years(2) Intangible assets
We apply the straight-line method. For software (for internal use), we apply this method based on the
period for which we expect to use the software (namely, five years).
3. Basis for allowances(1) Allowance for doubtful accounts
We provide a bad debt reserve to cover the bad debt we expect to arise from our accounts receivableas a whole. We estimate the amount based on the doubtful accounts rate. If we have concerns withparticular debtors, we will consider how much we are likely to recover from the debtor in question andthen add the unrecoverable portion to the bad debt reserve.
(2) Provision for bonuses
We provide a reserve to cover bonuses by accruing an amount that we expect to pay in the relevant
consolidated fiscal year.
(3) Provision for retirement benefits and prepaid pension cost
We provide for retirement benefits and prepaid pension cost based on the estimated amount of
retirement benefit obligations and pension assets as of the end of the fiscal year.
1) Attributing the projected retirement benefits to periods of service
We use a benefit formula to estimate the amount of retirement benefit obligations. We then attribute
this projected amount to the consolidated fiscal year in question.
2) Amortization of actuarial gains or losses
We amortize actuarial gains/losses starting from the fiscal year following that in which we recognized
the gain/loss. The amortization period (five years) will always be shorter than the employees’ averageremaining service period.
- 146 -

(4) Provision for loss on guarantees
A provision is made for future projected losses to prepare for a loss on guarantees of affiliatedcompany debt.
4. Accounting standard for major revenues and expenses
We follow the five step approach to revenue recognition.
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when, or as, the entity satisfies a performance obligation
As the group’s holding company, we set the group’s broad strategic direction, manage subsidiaries, andorganize research and development. The main revenue generated from contracts with customers is royalty
income from group companies. We recognize this revenue at the time it is generated, and we recognize it in
an amount commensurate with the sales the group company recorded.
5. Other key matters underlying our financial statements(1) Accounting treatment for retirement benefits
When processing unsettled amounts for retirement benefit-related unrecognized actuarial gains orlosses, we use a method that differs from that which we use for the consolidated financial statements.
(2) Application of group tax-sharing system
We have adopted the group tax-sharing system. Our accounting treatment of and tax effect accounting
for national and local corporate taxes and disclosure are in accordance with the Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System (Practical Solution No. 42, August 12,2021).
(3) Translation methods of foreign assets/liabilities
Foreign currency-denominated monetary claims and liabilities are translated to yen using the spot
exchange rate of the balance sheet date with translation differences charged to profit and loss in thecorresponding fiscal year under review.

- 147 -

Key accounting estimates
1. Valuation of loans to and other financing for negative-equity subsidiaries
We have established a policy for groupwide asset management with a view to ensuring the effective useof assets held by the parent company. Loans are provided to subsidiaries pursuant to this policy. Somesubsidiaries have negative shareholder equity, having received intragroup finance; for business reasons, thesesubsidiaries required sizeable upfront investment whose returns extend over a long timespan. If a negativeequity subsidiary borrows from another Group company, Taiyo Holdings Co., Ltd. guarantees the loan.
Before providing financing or debt guarantees to a subsidiary, we check the subsidiary’s business plan tosee whether the subsidiary has reasonable prospects of repaying the loan. We then collectively evaluate thesubsidiary’s capacity to meet its obligations in view of its strategic position, the scale of negative equity,
duration of any payment delinquency, the subsidiary’s business activities, and the outlooks for revenue andcash flow. Based on this evaluation, we estimate the amount recoverable and the amount of loss to assume ina given fiscal year.
(1) Amounts stated in financial statements for year under review(Millions of yen)

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Balance of loans to negative-equity subsidiaries

7,296

34,040Allowance for doubtful accounts(1,783)(3,647)

Provision for loss on guarantees−

82(2) Basis for accounting estimate for recognized item
1) Formula used to calculate book value for year under review
Some subsidiaries have negative shareholder equity because they have received intragroup financing
for sizable upfront investment for which returns extend over a long timespan.
Loans to negative-equity subsidiaries are treated as potentially doubtful accounts. The allowance for
doubtful accounts is recorded by estimating amounts of bad debts based on an assessment of thecollectability of individual loans. For debt guarantees to negative-equity subsidiaries, the financial
position of the main debtor is considered and the estimated amount of the future loss to be assumed isposted as a provision for loss on guarantees.
2) Key assumptions underpinning amounts reported on balance sheet for year under review
When estimating the amount debt recoverable from a subsidiary, we refer to subsidiary’s businessplan. Before providing financing or debt guarantees to a subsidiary, we check the subsidiary’s businessplan to see whether the subsidiary has reasonable prospects of repaying the loan. We then evaluate thesubsidiary’s capacity to meet its obligations in view of its strategic position, the scale of negative equity,
duration of any payment delinquency, the subsidiary’s business activities, and the outlooks for revenue
and cash flow. Based on this evaluation, we determine the amount recoverable and the estimated loss tobe assumed on debt guarantees in a given fiscal year.
3) Impact on financial statements for next fiscal year
We may potentially record an additional allowance for doubtful accounts and provision for loss on
guarantees if we conclude that the subsidiary’s business plan has become unachievable in view of missed
targets or other factors. The allowance for doubtful accounts and provision for loss on guarantees may
also be reversed if the subsidiary clear excess debt.
Additional information
Delivering treasury shares to employees through a trust
For details, see the “Notes, Additional information” in the consolidated financial statements.

- 148 -

Balance sheet*1. Monetary claims and obligations with associates(Millions of yen)

Fiscal year ended March 31, 2023
(As of March 31, 2023)

Fiscal year ended March 31, 2024
(As of March 31, 2024)

Short-term monetary claims

2,045

1,697

Short-term monetary obligations

3,028

3,876

*2. Overdraft facility
We concluded an overdraft facility with a bank to help ensure efficient cash flow management. The
unused portion of the overdraft as of the closing date was as follows:(Millions of yen)

Fiscal year ended March 31, 2023
(As of March 31, 2023)
Overdraft limit

21,00021,000−−21,00021,000Used portion of overdraft
Overdraft remaining

Fiscal year ended March 31, 2024
(As of March 31, 2024)

3. Debt guarantees
We have guaranteed the following loan from an affiliated company to the affiliated company below:(Millions of yen)

Fiscal year ended March 31, 2023
(As of March 31, 2023)

Fiscal year ended March 31, 2024
(As of March 31, 2024)

Taiyo Ink Vietnam Co., Ltd

267

1,210

Total

267

1,210

- 149 -

Statement of income*1. The following table shows our transactions with associates.
(Millions of yen)

Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

Volume of operating transactions
Operating revenue

14,00815,456

Operating expenses

796

809

Non-operating income

373

695

Non-operating expenses

36

119

Volume of non-operating transactions*2. The following table shows the main operating expense items and the amounts.
(Millions of yen)

Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

Lease costs

266

282

Wages

539

693

Officer compensation

786

684

Accrued employees’ bonuses

118

126

1,455

1,591

Depreciation

309

467

R&D expenses

1,233

1,551

950

1,014

Commission expenses

Advertising and promotional expenses
Securities
Fiscal year ended March 31, 2023 (As of March 31, 2023)

We have omitted our shares in subsidiaries (42,620 million yen in shares of subsidiaries and associates on
the balance sheet). This item is omitted on the balance sheet because it lacks a readily determinable fairvalue.
Fiscal year ended March 31, 2024 (As of March 31, 2024)
We have omitted our shares in subsidiaries (36,768 million yen in shares of subsidiaries and associates on
the balance sheet). This item is omitted on the balance sheet because it lacks a readily determinable fairvalue.

- 150 -Tax effect accounting
1. Breakdown of the main factors that generate deferred tax assets and deferred tax liabilities(Millions of yen)
Fiscal year ended
March 31, 2023
(As of March 31, 2023)

Fiscal year ended
March 31, 2024
(As of March 31, 2024)

Deferred tax assets
Denial of accrued employees’ bonuses
Asset retirement obligations
Allowance for doubtful accounts
Loss on valuation of shares of subsidiaries and associates
Impairment losses
Loss carried forward
Deemed distribution
Other

68
111
546
2,663
315
681
112
491

71
112
1,142
2,663
313
943
112
594

Deferred tax assets subtotal

4,992

5,953

Valuation allowance for tax loss carried forward
Valuation allowance for total future deductible temporary
differences

(681)

(943)

(4,015)(4,693)

Valuation allowance subtotal(4,697)(5,636)

Deferred tax assets total
Deferred tax liabilities
Valuation difference on available-for-sale securities
Prepaid pension cost
Other

294

316

190
90
87

309
89
84

Deferred tax liabilities total

369

484

Net deferred tax liabilities

74

167

2. Breakdown of the main factors underlying any differences between the legally effective tax rate and theactual effective tax rate after applying tax effect accounting

Legally effective tax rate
(Adjusting entries)
Items such as withholding tax on dividends that arepermanently excluded from deductible expenses
Items such as dividend income that are permanently
excluded from earnings
Inhabitant tax on per capita basis
Tax deductions for testing and research expenses
Valuation allowance
Tax sparing credits
Other
Actual effective tax rate after applying tax effect accounting

Fiscal year ended
March 31, 2023
(As of March 31, 2023)

Fiscal year ended
March 31, 2024
(As of March 31, 2024)

30.62%

30.62%

5.07

6.30(56.89)(71.05)0.15(1.83)
10.61(1.69)(0.60)

0.17(2.94)
18.82(1.62)(0.74)(14.56)(20.45)

3. Accounting treatment of corporate and local income taxes and tax effect accounting for them
We have adopted the group tax-sharing system and our accounting treatment of and tax effect accounting
for national and local corporate taxes and disclosure are in accordance with the Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System (Practical Solution No. 42, August 12,2021).

- 151 -

Revenue recognition
Our basis for recognizing revenue generated by customer contracts is disclosed in “Main accounting
policies, 4. Accounting standard for major revenues and expenses.”Significant subsequent events
None- 152 -

4) Supplementary schedules
Schedule of property, plant and equipment(Millions of yen)Class ofsharesProperty,plant andequipment

Intangible
assetsBalance at
beginning of
periodIncrease

Decrease

Buildings

4,645

274

0

355

4,563

8,574

Land

2,735

−

0

−

2,735

−

Other

2,311

852

2,299

126

738

2,199

Total

9,692

1,127

2,300

481

8,037

10,774

Software

1,361

188

17

360

1,172

872

Other

57

468

170

28

327

101

1,419

656

187

388

1,500

974

Type of asset

Total

Amortization Balance at end Accumulated
during periodof period
amortization

Notes:
1. The decrease in “Other” in “Property, plant and equipment” is due to partial transfer of the construction in progress
account to a consolidated subsidiary mainly for the technology development center, and transfer to the main account.
2. The increase in “Other” in “Intangible assets” is mainly due to the acquisition of patent rights.

Schedule of provisions(Millions of yen)
Entry

Balance at beginningof period

Increase

Balance at end of
periodDecrease

Allowance for doubtful
accounts

1,783

1,863

−

3,647

Provision for bonuses

224

234

224

234

Provision for loss on
guarantees

−

82

−

82

(2) Main assets and liabilities
We have omitted this information because we prepare consolidated financial statements.
(3) OtherNone- 153 -

VI. How Taiyo Holdings’ (the filing company’s) Stocks are AdministeredFiscal year

April 1 to March 31

Ordinary General Shareholders’Meeting

June

Record date

March 31

Record date for dividends ofsurplus

March 31
September 30

Number of shares constituting
one unit

100

Purchase and sale of fractional
sharesTransfer agent

Shareholder registrar(Special account)
4-5, Marunouchi 1-Chome, Chiyoda-ku, Tokyo
Stock Transfer Agency Department, Mitsubishi UFJ Trust and Banking
Corporation(Special account)
4-5, Marunouchi 1-Chome, Chiyoda-ku, Tokyo
Mitsubishi UFJ Trust and Banking Corporation

Purchasing and selling fee

None

Method of public notice

We issue public notices electronically. However, if we are unable to use thismethod due to an accident or other unavoidable reason, we will issue public
notice through Nihon Keizai Shimbun instead.
URL for public notices:
https://www.taiyo-hd.co.jp

Special privileges forshareholders

Not applicable

Note: Our Articles of Incorporation provide that shareholders’ rights regarding fractional shares are limited to: (1) the rights
listed in Article 189-2 of the Companies Act, (2) the right to exercise any put option pursuant to Article 166-1 of said
Act, (3) the right to be allotted shares for subscription and share options for subscription commensurate with thenumber of shares they hold, and (4) the right to exercise any call option attached to the fractional shares.

- 154 -

VII. Referential Information about Taiyo Holdings (the filing company)
1. Parent company
We have no parent company as defined in Article 24-7-(1) of the Financial Instruments and Exchange Act.
2. Other referential information
We filed the following disclosure documents between the start of the fiscal year under review and the date
we filed the present report.
(1) Annual securities report with accompanying documents and certificate
The 77th business term (April 1, 2022 to March 31, 2023):
Filed with the director-general of the Kanto Local Finance Bureau on June 19, 2023
(2) Internal control report with accompanying documents
Filed with the director-general of the Kanto Local Finance Bureau on June 19, 2023
(3) Quarterly report with certificate
The 1st quarter of the 78th business term (April 1, 2023 to June 30, 2023):
Filed with the director-general of the Kanto Local Finance Bureau on August 1, 2023
The 2nd quarter of the 78th business term (July 1, 2023 to September 30, 2023):
Filed with the director-general of the Kanto Local Finance Bureau on November 6, 2023
The 3rd quarter of the 78th business term (October 1, 2023 to December 31, 2023):
Filed with the director-general of the Kanto Local Finance Bureau on February 2, 2024
(4) Extraordinary report
Filed with the director-general of the Kanto Local Finance Bureau on June 19, 2023
Filed pursuant to Article 24-5-(4) of the Financial Instruments and Exchange Act and Article 19-2-(9)-2of the Cabinet Office Ordinance Concerning Disclosure of Corporate Affairs.
Filed with the director-general of the Kanto Local Finance Bureau on April 10, 2024
Filed pursuant to Article 24-5-(4) of the Financial Instruments and Exchange Act and Article 19-2-(4) of
the Cabinet Office Ordinance Concerning Disclosure of Corporate Affairs.
(5) Share buyback report
Reporting period (July 3-31, 2023): Filed with the director-general of the Kanto Local Finance Bureau on
August 10, 2023
Reporting period (August 1-31, 2023): Filed with the director-general of the Kanto Local Finance Bureau
on September 8, 2023
Reporting period (September 1-30, 2023): Filed with the director-general of the Kanto Local Finance
Bureau on October 10, 2023
Reporting period (October 1-31, 2023): Filed with the director-general of the Kanto Local Finance
Bureau on November 10, 2023
Reporting period (November 1-30, 2023): Filed with the director-general of the Kanto Local Finance
Bureau on December 8, 2023
Reporting period (December 1-31, 2023): Filed with the director-general of the Kanto Local Finance
Bureau on January 10, 2024
Reporting period (January 1-31, 2024): Filed with the director-general of the Kanto Local Finance Bureau
on February 9, 2024
Reporting period (February 1-29, 2024): Filed with the director-general of the Kanto Local Finance
Bureau on March 8, 2024
Reporting period (March 1-31, 2024): Filed with the director-general of the Kanto Local Finance Bureau
on April 10, 2024
(6) Securities registration statement with accompanying documents
Filed with the director-general of the Kanto Local Finance Bureau on June 27, 2023
- 155 -

Part II Taiyo Holdings’ (filing company’s) Guarantors
None- 156 -

Filing Notes
Document filed:

Certificate

Applicable law:
Filed with:

Article 24-4-2, Paragraph (1) of the Financial Instruments and Exchange Act
of JapanThe director general of the Kanto Local Finance Bureau

Date filed:

June 17, 2024

Company name in Japanese:

TAIYO HOLDINGS Kabushiki Kaisha

Company name in English:

TAIYO HOLDINGS CO., LTD.

Representative (title):

Eiji Sato (President and CEO)

Chief Financial Officer (CFO):

Sayaka Tomioka (Managing Executive Officer, CFO)

Address of head office:388 Ohkura, Ranzanmachi, Hiki-gun, Saitama 355-0222, Japan

Document available at:Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabuto-cho, Chuo-ku, Tokyo 103-8220, Japan)- 157 -

1. Appropriateness of Statements in the Annual Securities Report
Eiji Sato, President & CEO of Taiyo Holdings, Co., Ltd., has confirmed that the statements in the Annual
Securities Report for the 78th business term (April 1, 2023 to March 31, 2024) fulfill the integrity requirementsof the Financial Instruments and Exchange Act.

2. Special notes
None- 158 -

Filing Notes
Document filed:Internal control report

Applicable law:
Filed with:

Article 24-4-4, Paragraph (1) of the Financial Instruments and Exchange Act
of JapanThe director general of the Kanto Local Finance Bureau

Date filed:

June 17, 2024

Company name in Japanese:

TAIYO HOLDINGS Kabushiki Kaisha

Company name in English:

TAIYO HOLDINGS CO., LTD.

Representative (title):

Eiji Sato (President and CEO)

Chief Financial Officer (CFO):

Sayaka Tomioka (Managing Executive Officer, CFO)

Address of head office:388 Ohkura, Ranzanmachi, Hiki-gun, Saitama 355-0222, Japan

Document available at:Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabuto-cho, Chuo-ku, Tokyo 103-8220, Japan)- 159 -

1. Basic framework for internal controls relating to financial reporting
Eiji Sato, President & CEO and Sayaka Tomioka, CFO of Taiyo Holdings, Co., Ltd., are responsible fordeveloping and operating internal controls relating to financial reporting. They do so according to the basic
framework for internal controls relating to financial reporting set forth in the Business Accounting Council’s
revised opinion titled “On the Revision of the Standards and Practice Standards for Management Assessment
and Audit concerning Internal Control Over Financial Reporting (Council Opinions).”
Internal controls are supposed to work as part of an integrated whole to achieve the objectives for which
they were designed, as far as is reasonably practical. As such, internal controls relating to financial reporting
cannot absolutely guarantee success in preventing or detecting misstatements in financial reporting.

2. Evaluation scope, date, and procedures
We evaluated our internal controls relating to financial reporting on March 31, 2024, the last day of the
fiscal year under review. We based this evaluation on standards for such evaluations that are generally
accepted in Japan as fair and valid.
We first evaluated those organization-wide internal controls that significantly influence financial reporting
as a whole, on a consolidated basis. We then selected the business processes to evaluate based on the results.
Having selected the business processes to evaluate, we analyzed these processes to identify the key controls
relevant to the integrity of our financial reporting. We then evaluated the adequacy and operational
effectiveness of these key controls. From this evaluation, we determined whether the internal controls are
effective.
In determining the scope of our evaluation of internal controls related to financial reporting, we sought tocover all matters that are materially relevant to the integrity of our (Taiyo Holdings and our consolidated
subsidiaries) consolidated financial reporting, considering both monetary/quantitative and qualitative
relevance. After considering the results of our organization-wide evaluation, which covered Taiyo Holdings
and 13 consolidated subsidiaries, we determined a reasonable scope of financial reporting processes to target in
the evaluation. In this organization-wide evaluation, we did not consider those business sites that we deemed tohave negligible monetary/quantitative and qualitative relevance.
We determined the financial reporting processes to target as follows: First, we ranked all business entities
in descending order of their forecasted net sales for the consolidated fiscal year under review (discounting
inter-company transactions), which we forecasted in view of their actual net sales for the previous consolidated
fiscal year (again, discounting inter-company transactions). Next, we extracted the entities in order of rank
(working from the top-ranking entity downward) until we had extracted a group of entities collectively
representing two-thirds of the consolidated net sales. We defined this group as “monetarily/quantitatively andqualitatively relevant business entities.” There were eight such entities (Taiyo Holdings and seven consolidated
subsidiaries) in this group. We focused on evaluating the business processes of these eight entities related toaccounting categories that constitute significant indicators of our corporate objectives—namely, net sales,
accounts receivables, and inventories. We also evaluated some other business and workflow processes of otherbusiness locations that we deemed materially relevant to financial reporting because they constitute asignificant risk factor of material misstatements, even though these locations were not among the selectedsignificant business locations. These additional processes included those that pertain to the key accounting
categories underlying estimates and projections, and that involve high-risk transactions.

3. Evaluation outcome
Having conducted the above evaluation, we concluded that our internal controls relating to financial
reporting are effective as of the last day of the fiscal year under review (March 31, 2024).

4. Supplementary notes
None

5. Notes on special matters
None- 160 -