(No explains)(No explains)Since last year, we have been working on various activities under the policy of solidifying
our footing “GLOCALly”, with a priority on preventing infection and maintaining employment
and production.
In the first quarter, our business performance was strong, due in part to our cost
improvement efforts to date and solid customer production. Amidst a changing businessenvironment, including a significant reduction in production by customers due to the impactof parts supply by COVID-19 in Asia in September, we implemented thorough profit
improvement activities, including measures for closure, cost reduction, and fixed cost
reduction.
Although we will continue to be affected by the prolonged effects of COVID-19 and thepower shortage in China, we will continue to strengthen our footing “GLOCALly” to prepare
the system for recovery production.

1

In the second quarter of this fiscal year, our customers' automobile production has beenstrong globally, continuing from the first quarter. However, since mid-August, parts havebeen in short supply due to the expansion of COVID-19 in Southeast Asia, and production
was significantly reduced in September, but production was strong throughout the 6months.
The Group's net sales increased by 21% YoY to JPY78.4 billion but did not reach the forecast
due to the production cutback in September. The adoption of the new revenue recognition
standard had a negative impact of JPY1.3 billion compared to the previous standard.
As for profits, thanks to strong production and sales, improved profitability, and continued
promotion of fixed cost reduction activities, operating income was JPY5 billion, ordinary
income was JPY5.7 billion, and net income was JPY4.3 billion, all record highs for the second
quarter. The effect of the adoption of the revenue recognition standard on earnings is minor.

2

In terms of factors behind the change in operating income, it increased significantly from
JPY0.8 billion in the first half of the previous fiscal year to JPY5 billion, mainly due to arecovery in sales volume and cost improvements.

3

Sales in the Press and Plastics segment increased by JPY7.5 billion YoY to JPY53.2 billion,
and operating income increased by JPY1.9 billion from a loss in the previous year to JPY1.6
billion. As a result of the application of the revenue recognition standard, net sales
decreased by JPY1.4 billion from the previous standard. This was due to an increase of
JPY0.7 billion from the impact of lump-sum recording of mold cost recovery and a decreaseof JPY2.1 billion from the impact of offsetting display of sales and cost of sales of parts andmaterials supplied from customers.
Sales in the Valve business increased by JPY6 billion to JPY25 billion, and operating income
increased by JPY2.2 billion to JPY3.3 billion. In the Valve Manufacturing business, the effectof the adoption of the revenue recognition standard was minor.

4

Both sales and profits increased due to the recovery in sales volume in all regions, including
Japan, Europe, the United States, and Asia.
Sales in Japan increased JPY2.7 billion YoY to JPY33.4 billion, and operating income
increased JPY2.5 billion to JPY3.1 billion. Sales in the US and Europe increased by JPY7.2
billion to JPY29.7 billion, and operating income increased by JPY0.8 billion to JPY0.5 billion.
In Asia, sales increased by JPY3.5 billion to JPY15.1 billion and operating income increasedby JPY0.8 billion to JPY1.3 billion.

5

We have revised our forecast for the full year by incorporating the current production andthe latest production plans of our customers and other factors into the forecast for thesecond half of the year, based on the results of the first half of the second quarter.
Net sales for the full year are expected to be JPY164 billion, an increase of JPY13.5 billion
from the previous year. Although there is no change from the previous forecast, we expect
to increase sales by the same amount in the second half of the year to offset the JPY4.5
billion decrease in sales in the first half.
The exchange rate assumption has been changed from JPY105 to JPY110 to USD1, and as
a result of this change and the sharp rise in the materials market, there will be a change inthe price of materials in the transaction price. Excluding the increase in revenue, sales
volume is expected to decrease due to production cutbacks.
Operating income is expected to increase JPY1.5 billion YoY to JPY10.5 billion. Comparedto the previous forecast, we expect a decrease of JPY2 billion due to the impact of
production cutbacks.
As I mentioned earlier, we have set our exchange rate assumption at JPY110. Exchange
rate sensitivity is JPY100 million per year.

6We expect operating income for the full year to be JPY10.5 billion, an increase of JPY1.5
billion from the previous year.
Even in the midst of temporary production cuts by our customers, we flexibly changed our
production system to avoid incurring extra labor and expenses. A recovery production is
expected in the future. We will continue to focus on improving profitability so that we canmaintain our supply chain and benefit from increased production.

7

Sales in the Press and Plastics business increased by JPY9 billion YoY to JPY113.6 billion.
Operating income is expected to increase by JPY200 million to JPY4.2 billion.
Due to the impact of the adoption of the revenue recognition principle, net sales are
expected to decrease by JPY4.2 billion. This includes an increase of JPY0.7 billion due tothe impact of the lump-sum recording of mold cost recovery and a decrease of JPY4.9
billion due to the impact of the offsetting display of sales and cost of sales of parts andmaterials supplied from customers.
Sales in the Valve Manufacturing business are expected to increase by JPY4.3 billion YoY to
JPY50.1 billion, and operating income is expected to increase by JPY1.3 billion to JPY6.3
billion. The impact of the adoption of the revenue recognition standard on the Valve
Manufacturing business is minor.

8

Sales in Japan increased by JPY1.5 billion YoY to JPY71.8 billion, and operating income
increased by JPY1.1 billion to JPY6.3 billion. Sales in the US and Europe increased by JPY7.1
billion to JPY59.5 billion, and operating income increased by JPY0.1 billion to JPY1.7 billion.
Sales in Asia are expected to increase by JPY4.9 billion to JPY32.7 billion, and operating
income is expected to increase by JPY0.5 billion to JPY2.4 billion.

9

We have decided to pay an interim dividend of JPY16 per share as previously forecasted.
We expect to pay a year-end dividend of JPY17 and an annual dividend of JPY33 for the full
year.

10

In the first quarter of the previous fiscal year, sales decreased significantly due to the impact
of COVID-19, and we were in the red. However, since the second quarter, sales andoperating income have increased each quarter and reached a new record high, thanks to
the recovery of production and the improvement of our company's structure.
In the second quarter of the current fiscal year, both sales and profits will decrease due toa significant reduction in production caused by a shortage of customer’s parts. Althoughproduction cuts are continuing in October, there are reports that the production cuts will
weaken in November, and we can expect a recovery in production after that.
We will continue to work on improving our profitability by establishing a system that can
flexibly respond to production fluctuations so that we can generate profits when production
increases.

11

As in the previous fiscal year, we will continue to make necessary and effective investmentsin the current fiscal year. We plan to invest JPY18 billion in plant and equipment, and
JPY16.3 billion in depreciation and amortization, an increase of JPY1.7 billion over theprevious fiscal year.
In addition to preparing for production associated with the launch of new products, we areinvesting in plant expansion, the addition of large presses, and new TPMS lines at our 3
main bases in Japan, North America, and China.
In addition to increasing production capacity, we will also reorganize within the production
division to build a more efficient production system to meet the needs of our customers.
This concludes the report on our business performance, and I will now explain oursustainability management and priority measures.

12The automotive industry is in the midst of a once-in-a-century period of great change, andin addition to the structural transformation of automobiles represented by CASE, energy
conservation, weight reduction, AI, and progress in IoT, there is an urgent need to address
the issue of carbon neutrality.
We have put together a value creation model to sustainably improve our corporate value
by focusing our management resources on our strengths against business opportunities
and risks to address social issues.
In addition to the existing Stamping Press/Resin business and Valve business, we will
promote sustainability management through the New Product business, in which the entire
Group will strive together to create the future.

13

In light of the changes in the external environment over the medium term, we will
accelerate the development of new technologies, materials, and construction methods, andpromote the development of bases under the medium-term management plan OCEAN-22.
In addition to meeting social demands such as carbon neutrality and the SDGs, we will
speed up our efforts to create manufacturing and work systems using the digitaltransformation accelerated by the outbreak of COVID-19 and promote sustainability
management.

14

As a company that develops and produces parts, based on LCA, in the supply chain andwork on Scope 1 in cooperation with suppliers in addition to our own development,
production technology and production processes, and promote Scope 2 through the use ofrenewable energy.

15

To achieve this goal, under our long-term vision PACIFIC GLOCAL VISION, we will use theactivities of presses and resins, valves, TPMS, and new businesses as the warp threads ofour medium-term management plan OCEAN-22, and the 4 weft threads of the SDGs tocontribute to the enrichment and sustainability of life in the next-generation mobility society.
In this way, we hope to contribute to affluent and sustainable lifestyles in the nextgeneration mobility society through manufacturing.

16

To promote sustainability management, we have identified 4 important themes and 15
materialities related to the PACIFIC GLOCAL VISION.
In the area of solving social and customer issues through our products, we will continue todevelop environmentally friendly products and work to minimize our environmental impact
by using resources in a sustainable manner in response to climate change.
We will strive for health management, create an environment that emphasizes respect forhuman rights, diversity, and inclusion, etc., and promote the respect and success of ourhuman resources by valuing the new ideas and challenges of our employees.
We will also share information on climate change with research institutes, local communities,business partners, etc., and work to build relationships of trust with our stakeholders toachieve sustainable growth.

17We have formulated PACIFIC Environmental Challenge 2050 in order to minimize ourenvironmental impact.
Our goal for 2050 is to achieve net zero CO2 emissions, minimize waste emissions, andminimize water consumption, and our mid-term goal for 2030 is to reduce CO2 emissions
by 50%.
We would like to proceed with daily improvements, innovative technologies, use ofrenewable energy, and improvement of emission factors, considering future increases
based on 2019.

18

In our daily improvement activities, we will go back to the basics of manufacturing to findair leaks and other small energy wastes, and work on improving CO2 emissions as well as
maintaining and improving safety, quality, and productivity.
We improve and innovate our internal infrastructure by introducing high-efficiency
equipment when upgrading facilities, using LEDs, and converting heavy oil to city gas.
As for the use of renewable energy, we will promote the introduction of solar power
generation systems on a global basis.
To implement the plan with a sense of speed, we have introduced ICP ( Internal Carbon
Pricing), which will be used as 1 of the criteria for our decision making, to promote thereduction of CO2 emissions.
I will explain the solutions to social and customer issues through our products in the section
on OCEAN-22 business initiatives later in this report.

19

As a manufacturing company, we have been working on the basis that manufacturing is ahuman resource development. We will also continue to respect and promote the activitiesof our human resources.
Regarding human rights, we formulated a human rights policy in February this year, andare working on action guidelines and supplier CSR guidelines, which we are rolling out toour employees and suppliers in Japan and overseas.
In addition, we consider it an important management resource that our employees canwork in good health, and we have been working on work-life balance since 2005. In 2006,
we registered our business as part of the Declaration for the Creation of a Healthy
Workplace promoted by the Gifu Labor Bureau, and we are continuing to promote themental and physical health of our employees.
In September 2021, we reiterated the Pacific Industrial Group Health Declaration and madeit even clearer, and we have been working to create a healthy and safe workplace so that
our employees can work vigorously.

20Regarding fostering trust with stakeholders, we are making efforts to become a company
that can coexist and prosper with the trust of our stakeholders, including employees,
suppliers, customers, shareholders, and local communities.
We have also organized our sustainability management initiatives and KPIs related tomateriality, and are promoting initiatives throughout the supply chain, including thedevelopment of a policy system that will serve as the foundation for all activities, thedissemination of education, and the dissemination of guidelines to employees and suppliers.
These efforts are being strongly promoted as information disclosure on our website and in
our Sustainability Report and have been highly evaluated by external evaluation
organizations such as CDP.
In May, we also expressed our support for the TCFD, an international proposal for climatechange-related information disclosure. In line with the framework of the recommendations,
we will continue to disclose our governance, strategy, risk management, metrics andtargets based on the risks and opportunities that climate change presents to our business.
Last year, to mark the 90th anniversary of our company's founding, we donated a PCR
inspection car to Gifu Prefecture and an ambulance to a local hospital in Thailand. We havealso built a new mask production line and continue to distribute and donate masks toemployees, suppliers, and local communities.
We will continue to value our relationship of trust with our stakeholders and contribute to
the development of the community and society.

21I would now like to explain how we are solving social and customer issues through our
products, along with our initiatives in the Press & Plastics business, Valve Products business,and New Products business in OCEAN-22, our medium-term management plan which is thevertical thread of our sustainability management.

22

The Press and Resin business accounts for 70% of our company's sales.
Our presses are used for body frame parts that form the framework of automobiles, andfunctional parts such as trunk hinges and battery cases, and our main customers are the
Toyota Group.
Our resin products include wheel caps, center ornaments, engine covers, gas pedals, andother interior and exterior parts. Our products are supplied to many Japanesemanufacturers, including the Toyota Group, Honda, Suzuki, Daihatsu, and Subaru, and wehave a high market share.

23

In light of the shift to electric vehicles, reducing vehicle weight and improving collisionsafety and fuel efficiency are major issues in the design of vehicle body frames, and there
is a growing demand to reduce vehicle weight while reducing CO2 emissions during parts
production.
We see this as a growth opportunity and are accelerating the development of related
products.
From the standpoint of LCA and carbon neutrality, we will strategically promotetechnological development with a focus on cold super hi-ten processing, which uses lessenergy during parts production. To expand the processing area, we are actively promoting
proposals to replace hot stamping with cold stamping.
In addition, we will actively promote structural proposals as subassemblies by evolving ourstructural analysis and evaluation technologies and shifting to the cold press method, which
has a lower environmental impact, as well as optimizing body design, including collisionsafety, and reducing costs. In addition, we will aim to expand our business domain by
optimizing body design, including collision safety, and reducing costs.

24

In the Resins business, we have expanded our lineup of all-urethane engine cover products
by developing urethane foam materials with improved NV performance, and we arestrengthening our competitiveness by reducing weight and cost and improving functionality.
In addition, with the shift to electric vehicles, the need for noise prevention against new
types of noise, such as motor noise, will further increase. We will develop new materials
such as polyurethane foam through functional analysis of noise prevention and meet newneeds including construction methods and product design.
The film decoration technology developed by our company and adopted for the first time
for automobile exterior panels, is an environmentally friendly product that does not require
plating and is 100% recyclable.
In addition, we are developing wheel caps that not only contribute to the design, but also
to the weight reduction of aluminum wheels and improve aerodynamic characteristics.
Our products have been adopted by many Japanese manufacturers using our overseas
bases. We are also making approaches to overseas automakers to expand our business.

25

As a result of these efforts, ultra-high tensile strength cold-pressed parts made of 1,470
megapascal material have been used for the first time in the roof center reinforcement of
Toyota vehicles, and mass production is scheduled to begin for vehicles releasing this fall.
In the Plastics business, we developed an engine undercover using GFRP, Glass Fiber
Reinforced Plastic, which excels in strength and weight reduction, and adopted it for the
new Land Cruiser. It was adopted for the first time in the world for SUVs, and while ensuring
excellent running performance at the bottom of the body on off-road vehicles, it achieved
a significant weight reduction of 76% compared to the conventional model, and received a
project commendation from Toyota Motor Corporation.

26

In the Valve Products business, we provide products that utilize fluid sealing technology,
including valve cores and tire valves, which are our founding products, as well as valves for
car air conditioners, industrial valves, and TPMS.
We have a 100% share of the tire valve market in Japan and 50% overseas. We have a
50% share of the global market for charge valves for car air conditioners and an 80% shareof the global market for relief valves, securing a high market share for our niche products.
With the acquisition of Schrader Valve business in 2018, we have also integrated industrial
and aircraft valves into our product lineup.
With the addition of the Schrader brand, which is strong in the US and European markets,
to the PACIFIC brand, which is strong in the Japanese and Asian markets, we havecustomers in 4 regions around the world and are expanding our development, production,and sales system.

27

In the area of the Valve business, we see carbon neutrality and electrification as growth
opportunities and are developing new products.
In particular, due to changes in the powertrain associated with electrification, the exhaust
heat from the engine will no longer be available and there will be a shortage of heat sources
for heating, so car air conditioners will shift to heat pump systems.
We are developing multifunctional electric expansion valves and new control valves byutilizing the technology of heat pump systems for home appliances.
In cooperation with Schrader's bases in France and the US, we would like to speed up
development and improve efficiency, which will lead to a global sales structure.

28

TPMS monitors tire pressure, temperature, and G-force during driving, and transmits thedata wirelessly to notify the driver of a loss of air pressure, thereby promoting driving safety
and preventing fuel consumption deterioration.
In recent years, the demand for condition monitoring has been increasing, and we aredeveloping related IoT products based on the core technology of TPMS with implemented
AI according to the product.
Most recently, HACCP regulations have been strengthened for product management in the
supply chain transportation process, and GDP guidelines have been introduced forpharmaceuticals to ensure quality in the distribution process.
In the livestock industry, there is a growing demand for various types of monitoring, suchas individual management needs to improve productivity.
We will continue to develop not only hardware, but also solutions using AI, IoT, and ICT.

29

Using the core technology of TPMS, we launched e-WAVES, a multi-sensing logger that canmonitor the status of the transportation process, in April.
The system enables real-time monitoring of conditions during transportation, and is used
for quality control of foodstuffs, pharmaceuticals, and vaccines that need to be transported
and stored at low temperatures.
As vaccination is progressing across the country, several municipalities in Gifu and Aichi
prefectures have adopted our system. We will continue to develop, provide, and deploy thisproduct to provide new value to future logistics solutions.

30A new press welding plant will be constructed in Ogaki City, adjacent to the current Higashi
Ogaki Plant. The site has already been acquired, and construction will begin in Novemberof this year, with the aim of starting operations in mid-2023. The total floor area is 43,000
square meters, and the investment is approximately JPY13 billion.
We had been expanding our overseas bases to meet the growing demand for ultra-hightensile processing. In the years to come, demand for electric vehicles is expected to growfurther, and we will strive to respond to the increased production of products centered on
ultra-high-tensile processing in response to the growing need for lighter weight.
In addition, as a global mother factory, we will pursue efficiency manufacturing, incorporate
innovations to achieve carbon neutrality, and strive to create a workplace environment
where employees can work with enthusiasm.
To achieve our target of 50% CO2 emissions for FY2030, we will work to reduce CO2
emissions by upgrading the specifications of our factories and buildings, switching theenergy used for electricity and power in our factories, and introducing high-efficiency
production equipment. We also aim to reduce CO2 emissions by 50% compared toconventional plants by introducing solar power generation and other measures.
There will be no impact on the current fiscal year's business results due to these plans.
In addition, we have published the Sustainability Report 2021, and we disclose information
about these issues on our website.

31

We would also like to announce that we have resolved to select the Prime Market and apply
to the Tokyo Stock Exchange for the transition to the new market classification of the Tokyo
Stock Exchange scheduled for April 2022.
We will continue to strategically focus on these measures to create a better tomorrow, withthe goal of becoming a 100-year company.

32