CONTENTS
Profile .........................................................................

1

Milestones of FREUND Group .................................

2

Value Creation Cycle of FREUND Group ................

3

Global Network of FREUND Group .........................

4

Manufacturing Process for
Pharmaceutical Products and
FREUND Group’s Business Scope ..........................

5

Overview of Business Segments andRelationship with Society .........................................

6

The Formulation of Long-term Vision andan Overview of the 9th Medium-termManagement Plan .....................................................

7

Top Message .............................................................

8

On the Site: Business

Global: Enhancing Collaboration within
the Group .................................................................. 11
Global: About Freund S.r.l. ...................................... 12
Machinery Division .................................................... 13
Chemical Division ..................................................... 14

On the Site: Technology Development

Technical Services .................................................... 15
Chemical Development Section .............................. 16

Sustainable Management Foundation

Efforts toward a Modal Shift .................................... 17
Introduction of Board Members .............................. 18
Corporate Governance ............................................. 19
Risk Management ..................................................... 20
10-Year Consolidated Financial Data of
FREUND Group ......................................................... 21
Company and Stock Information ............................ 22

PROFILEWe have grown based on our business model that combines “Hardware (products such as pharmaceutical productmanufacturing equipment and pharmaceutical excipients)” and “Software (drug formulation technologies).” Currently,
we have 6 Group companies in Asia, including Japan, the U.S. and Europe. We are expanding our business segment
not only to the pharmaceutical product field but also to the non-pharmaceutical product field. Based on our corporate
philosophy, “Develop the Future Through Creativity®,” we provide indispensable products and services to people
around the world, challenging ourselves to promote business activities that will create a better tomorrow.

Corporate Philosophy“Develop the Future through Creativity ”®

Group Management Vision

Long-term Vision

Creating essential technologies
for a brighter tomorrow
At the FREUND Group, our mission is to build a healthier,more prosperous future by contributing to the steady supplyof pharmaceuticals, and providing solutions forthe freshness and safety of food.
We deliver the knowledge and the products that can help
solve diverse issues.
By applying our creativity and our technological capabilities
to providing indispensable products and services topeople around the world, we are working to create
a better tomorrow.

NUMBER

ONLY

BE

ONE

ONE

ONE

“Number One” ineach businesssegment“Only One” forclients and society

Unite toa “Be One” group*“ONE FREUND” refers to values which
the FREUND Group holds precious

Disclaimer: Forward looking statement

This Report contains forward looking plans, estimates, strategies,
financial results and other statements. Such information
is based on the most accurate information available at thetime of production of this Report. Therefore, the Company’s
actual financial results may diverge largely from statements
represented in this Report due to the influence of various risks
and uncertainties. Influencing factors include the economic
environment, competitive pressures, related regulations and laws,changes in product development conditions and fluctuations inforeign exchange rates relating to the Company’s businesses.
Furthermore, the factors influencing the Company’s estimatesand other statements are not limited to the above.
Note: The details of this Report are based on the results of the
fiscal year ended February 29, 2024 (from March 1, 2023 to
February 29, 2024). (However, new information available after
March 2024 has also been included in this Report).

1

MILESTONEof FREUND GROUP

Focusing on film coating technologies for tablets, we were the first in the world to successfully
develope “automated film coating machine” and “film coating liquid.” Since our foundationin 1964, FREUND CORPORATION has followed a path as a research and development-oriented
company based on granulation/coating technologies, under the corporate philosophy of “Develop
the Future through Creativity®.”

FREUND Report 2024

2

VALUE
CREATION CYCLE
of FREUND GROUP

Since our founding, we have grown our business in solid dosage
manufacturing equipment, such as tablets and granules, and pharmaceutical
excipients. We are a unique research and development-oriented group ofcompanies involved in both formulation of machines and excipients in thepharmaceutical field, and are the only one of its kind in the world. In recent
years, while expanding our fundamental particle processing technologies
into non-pharmaceutical fields such as food and industrial applications,
we have added powder handling equipment used in the ancillary processes
for pharmaceutical products to our business domain and are promoting
global business activities. Furthermore, we are taking on the challenge ofrealizing sustained growth based on our management vision, for example,
by launching a unique engineering services to solve problems with existing
equipment operating at our clients’ manufacturing sites.

Sustainability Policy
For FREUND Group, sustainability means aiming forsustained growth of stakeholders, the Group and society,based on our corporate philosophy of “Develop the
Future through Creativity ®.” We will contribute throughthe value we provide to our clients in our corporate
activities, while taking into consideration issues suchas abnormal weather, resource depletion, deforestation,and human rights. We will also strive to contribute to therealization of a long-term sustainable society from an
ESG (Environment, Social and Governance) perspective,
taking into consideration D&I (Diversity & Inclusion).

3

GLOBAL
NETWORKof FREUND GROUPIn July 2021, we established Shanghai FC Center, a technology development research center in China, and we held an opening
ceremony of the center and began its operations in June 2023. With the addition of this new site, our Group’s global network in
the pharmaceutical product field now consists of a five-pillar-structure, i.e. Japan, the U.S., India, Italy and China. The addition of
manufacturing sites in India and Italy to the existing sites in Japan and the U.S. has strengthened the business development in
the pharmaceutical emerging regions. For China, a huge pharmaceutical emerging market, we will handle both machinery andchemical products at the Shanghai FC Center to increase awareness of our products. Through these efforts, we will provide better
products suited to the market, respond to regional needs for services including maintenance and cultivate high-quality local
agents. With the establishment of the five-pillar-structure as a cornerstone, we aim to expand our global market share by pursuingsynergies among group companies. The business domains developed at each site and the functions of each site are as follows.

FREUND Report 2024

4

Manufacturing Process for Pharmaceutical Products and FREUND Group’s Business Scope

Our main products are machinery equipment and chemical products such as excipients, which are used in the process of manufacturing pharmaceutical products(tablets and granules, etc.). FREUND is the only enterprise in the world that conducts both the machinery equipment and chemical businesses in pharmaceutical
related business. Furthermore, in November 2020, the Group’s product lineup expanded significantly with Italy’s Freund S.r.l. joining the Group, which manufacturespowder handling equipment that is used in the ancillary processes for pharmaceutical products.
Please see here for
product details.

5Overview ofBusiness Segments andRelationship with Society

Based on technologies such as granulating,coating, pulverizing, classifying, the FREUND
Group is expanding its businesses into thenon-pharmaceutical product field including
food and other industrial applications inaddition to the pharmaceutical productfield. The Group is thereby taking on new
challenges that can contribute to improving
the quality of health and life of people.

MachineryBusiness
Segment

Manufacture and salesof granulating andcoating equipment forpharmaceutical, food,cosmetic and other products

Characteristics◦ G ranulating/coating equipment sales among
the top in the world and Japan.

◦ In addition to Asian markets, the Group is expanding
its business in the other developed and emerging
countries in cooperation with our subsidiaries in
the U.S. and Italy.
◦ D eveloping equipment based on drug
formulation technologies◦ Focusing on sales expansion of equipment for otherindustrial business fields by integrating granulating/coating and pulverizing/classifying technologies

ChemicalBusiness
Segment

Manufacture and sales ofpharmaceutical excipients,
food preservatives andhealth foods

Characteristics◦ P harmaceutical excipients manufactured at
GMP* certified facilities◦ Food preservatives used to preserve the quality ofvarious foods contributing to food safety*GMP: Good Manufacturing PracticeSocial value to be provided to the medical site

Improving the quality of medical careby increasing the value addition ofpharmaceutical products
Improving drug efficacy through granulating
and coating technologies
For over half a century, FREUNDCORPORATION has leveraged its corecompetencies of granulating and coating
technologies, along with its products
and drug formulation technologies, toincrease the value of pharmaceuticalproducts. At the same time, FREUND
has conducted manufacturing thatenables more people to access highvalue-added pharmaceutical products,
and the Group strives to improve thequality of medical care worldwide.

Continuous granulation anddrying system “Granuformer”

Contributing to aging society by
pursuing “easy to ingest” drugs
Active pharmaceutical ingredients ofmedicine accounts for a small percentof the total. The remaining portion is
excipients that are used to make drugs
into sizes that are easy to swallow andfor coating of the surface to mask thebitter taste. FREUND is strengthening
the development of orally disintegratingtablet (ODT) related products which use
a unique drug formulation technology
and allows for easier ingestion of drugs
by assisting the swallowing process.

Better taste and health; supporting
enriched lives of people
Pursuing fresh taste, safety and security
Food preservatives are small pouches
placed inside of packaging to protect
the flavor and ensure the safety andsecurity of freshly cooked pastries andbreads, Japanese confectionaries andother products. FREUND develops foodquality prolonging agents based on its“ethanol evaporation” technology which
preserves bacteriostatic effects in orderto deliver fresh, tasty products as well
as safety and security.

Pharmaceutical excipients“Granutol F (Fine)”

Food preservatives“Antimold-Mild”

Maximizing the effect of effective food ingredientswith advanced drug formulation technologies
Along with the increased concern for
health, demand for supplements andhealth foods is on the rise. FREUND iscontributing to healthy lives together
with health support manufacturers
by using advanced drug formulation
technologies to promote the function ofeffective food ingredients and enableeasier ingestion.

Preventing medical mistakes caused bydispensing errors
In the dispensing field, there areincidents of medical mistakes due
to patients taking the wrong drugs
because they are similar in appearance
and name. FREUND prints on drugs
to allow for easy identification andcontributes to prevention of medical
mistakes worldwide. To do so, FREUND
developed the industry’s first safe drug
ingestion concept that involves a newgeneration tablet printing/inspection
machine and specialized inks.

Social value to be provided to the food and health

Food coating agent “Chitocoat”

Social value to be provided to
the leading-edge industry

Taking on challenges in newtechnological fields to supportenriched and convenient lives
Creating new markets for the next
generation using FREUND’s uniquepulverizing technologies

Tablet printing machine“TABREX Rev.”The FREUND Group’s powder
pulverization technology is used tocreate products in the cosmetic, foodand other industries that support
peoples’ daily lives. For example,
this technology is used in make up
foundations which many women wear
daily. The fine powders manufactured by
the Group’s equipment help to produce“healthy looking and clean skin.”High viscosity wet grinding
mill and separator“AQUA TURBO TZ”

FREUND Report 2024

6

The Formulation of Long-term Vision and an Overview of the 9th Medium-term Management Plan

In formulating the 9th Medium-term Management Plan,
the Group has drawn up a long-term vision for the next ten years.
Long-term Vision

The Group aims to go beyond “ONE FREUND,” the slogan that describes its values,and has established the following management targets for FY2033, when it willcelebrate its 70th anniversary: consolidated net sales of ¥40 billion, operating profit of¥3.2 billion, and an ROE of at least 10%.

[ Vision ]⃝U se innovative ideas to enable people worldwide to enjoy⃝Long-term Vision – Management Objectives (Consolidated)⃝9th Medium-term Management Plan/Key Strategies

healthy and fulfilling lives.

⃝E xpand the areas covered by the machinery business andstrive to become one of the world’s top three suppliers.
In the chemical business, aim to become Japan’s leading
specialty chemical company.
⃝C reate a corporate group with a diverse and productive workforce,
fostering an environment where people can upgrade skills andadvance their careers.
The New Medium-term Management Plan, which pioneered these developments,
aims to achieve consolidated net sales of ¥25 billion and operating profit of ¥1.6
billion by FY2026, in accordance with three basic policies. To achieve sustainablegrowth, it plans to invest approximately ¥5 billion in facilities, ¥2.5 billion in R&D, and¥0.7 billion in human capital during the New Medium-term Management Plan period.
7

Top Message
Develop the Future through Creativity®

By applying our creativity and technologicalcapabilities to providing indispensable products
and services to people around the world,
we work to create a better tomorrow.
Our company celebrated its 60th anniversary in April 2024. I am deeply
grateful for the support our stakeholders have provided over the years.
In celebration of our 60th anniversary, we are reexamining our corporate
philosophy, which is to “Develop the Future through Creativity ®.”We are reviewing our management vision for implementing that philosophy,
and have updated our “ONE FREUND” values as a new long-term vision* 1.
We interviewed Iwao Fusejima, President and CEO, to get an overview of
our Group’s current activities, the 9th Medium-term Management Plan
that launched in March 2024, and the new initiatives being planned in
anticipation of our 70th anniversary.
*1 Please refer to page 1 for more information about our new management vision and long-term vision.

Iwao Fusejima
President and CEO

Creating essential technologies fora brighter tomorrow
FREUND Report 2024

8

FY2023:
Overview of Business Activities
In the Japanese market, we have seen strong demandfor capital investment by the pharmaceutical industry,
particularly generic drug manufacturers. This is in responseto the recent drug shortage issue. The pharmaceuticalindustry, which is our main customer, has been actively
making capital investment to expand production capacity
and to renew old facilities.
The global market is forecast to grow in the future against
the backdrop of an aging population in developed countries
and population growth and rising medical standards inemerging countries. Our Group launched local operationsin China in June 2023 and has been developing a global
five-pillar structure. We also rebranded Freund-Vector
Corporation and Cos.Mec. S.r.l., two overseas groupsubsidiaries, as Freund Inc.*2 and Freund S.r.l.*2, respectively,
as part of our efforts to strengthen cooperation between
group companies, generate synergistic effects, and raise
the profile of the “FREUND” brand in global markets.

.

Overview of Chemical Business Segment Activities  
The world markets excluding Japan have been affectedby supply chain disruptions and raw material priceincreases, but lead times have normalized, and the markets
have entered a recovery phase. Freund Inc. posted a profit
due to sales growth in Central and South America. Freund
S.r.l. has made progress in acquiring projects, particularlyin emerging countries, and its business activities haveprogressed as planned.

Non-pharmaceutical product field: Both net sales

and profits increased at FREUND-TURBO. Orders received
decreased year-on-year due to an order from a large client
during the previous fiscal year, but our order backlog
remained as usual.

Pharmaceutical excipients: Net sales of major

pharmaceutical excipient products remained strong in theJapanese market in particular. We recorded our highest
net sales ever, and production capacity utilization rates
remained high as well.
Food preservatives: Although sales to the bakery
industry declined, confectionery demand has been steadily
improving due to recovery of tourism. We maintained strong
sales that exceeded the previous fiscal year’s level, resulting
in our highest net sales ever. On the development side,
we have been launching products that are conscious ofenvironmental issues as part of our efforts aimed at benefiting
future generations.

Operating Performances by Business Segment*2	T he Freund Inc. rebranding occurred on June 3, 2024, and Freund S.r.l.
on March 29, 2024.

Net sales for FY2023 were thehighest in our history.
Overview of Machinery Business Segment Activities  Pharmaceutical product field: Business conditions

both inside and outside of Japan have been improving,
and we achieved record net sales and orders received.
In the Japanese market, net sales were significantly higher
than in the previous fiscal year as a result of active capital
investment by the industry as a whole and by generic drug
manufacturers in particular, as well as efforts made together
with partner companies to provide earlier delivery times.
Our order backlog at end of period was the highest ever.

9The 9th Medium-termManagement Plan

With regard to food preservatives, we will strive to both reduce
costs and maintain quality by optimizing our supply chain.

Our New Medium-term Management Plan consists of threebasic policies: (1) strengthen and expand core businesses,(2) develop new products and businesses, and (3) build astronger base of operations.

❶ Strengthen andexpand core businesses
Machinery Business Segment: In the pharmaceuticalproduct field, we are focused on creating synergies between
group companies by unifying company names and productbrands of overseas group companies, organizing andintegrating our sales networks, and entering new emerging
countries and regions. In the Japanese market, we will strive
to expand supply capacity and to improve quality, delivery
times, and costs. We are also working to expand our aftersales service from the perspective of helping customers
achieve stable operation of their production equipment.
Chemical Business Segment: We plan to construct a
new plant for pharmaceutical excipients on the premises of
our Hamamatsu plant by 2026. Our intent with these plans
is to improve our quality management system and our ability
to provide a stable supply of products in response growing
demand. In addition, during 2024, we also plan to launch a
new spherical granule excipient that will help our customers
to reduce delivery times and manufacturing costs.

Summary ofConsolidated Financial
Forecasts for FY2024

FY2023 (Actual)❷ Develop new products andbusinesses
Machinery Business Segment: In the pharmaceuticalproduct field, we are leveraging our global five-pillar
structure to localize and promote products and services thatare tailored to each target country. In Japan, we are working
to achieve quality management, stable production, anddeveloping continuous production systems through AI-driven
labor saving and automation. In the non-pharmaceuticalproduct field, we will accelerate the global development ofbattery-related products as energy solutions.
Chemical Business Segment: In the area ofpharmaceutical excipients, we will promote the developmentof excipients for direct compression tablet production thatwill shorten formulation development time and improve
production efficiency. In the area of food preservatives,
we will step up our development of environmentally friendly
products, which is already in progress.

❸ Build a stronger base of operations
In accordance with our Group’s sustainability policy, we will
strive to achieve sustainable growth for the Group over the
medium- to long-term and increase corporate value throughinitiatives related to human capital development,

FY2024 (Forecasts)

YoY Changes(¥ million)

%

+2.6

Net sales

22,90323,500

+596
–170

–3.4

Ordinary profit

1,285

1,100

–185

–14.4

+5

+0.7

45.46

45.76

+0.30

+0.7

—

—

539

—
—

—

—

—

—

—

Operating profit
Profit attributable to owners of parent

EPS (¥)

Capital investment
Depreciation

R&D expenses

1,270
764
732
634

1,100
770

engagement improvement, global environmental
conservation, and diversity promotion.
As for our dividend policy, we regard the return of profits
to shareholders as one of our most important management
issues, and we will maintain a balance between investment
for sustainable growth and stable dividend payments.
For FY2024, we plan to increase our dividend by ¥5 tocommemorate our 60th anniversary.

To Our Stakeholders
Our new management vision is “creating essential
technologies for a brighter tomorrow.” Accordingly, we
have enacted a long-term vision called “ONE FREUND &BEYOND” that incorporates the idea of “going beyond.”
Through creativity and technology, our Group will create
added value in order to please not only our customers
but also patients and other users beyond our customers,
creating a better tomorrow.

Thoughts on Our 60th
Anniversary Logo
We have designed a 60th anniversary logo with aclassic look that expresses both FREUND’s history
up to the present as well as excitement for the futurethat lies ahead for the FREUND Group. The zero
represents the earth and our efforts toward further
global development. The sun rising at the edge ofthe earth implies a stable supply of drugs and foodproducts that are in short supply today, as well as
our desire to create a brighter future.

FREUND Report 2024

10

On the Site: Business
Global: Enhancing Collaboration within the GroupWe interviewed the Overseas Management Division, which aims to strengthen
our global five-pillar structure through greater collaboration within group companies,
about its future initiatives.
We will do our utmost to expand
our machinery business in Asian countries
and to accelerate the creation of
global group synergies.

Hiroshi Nakayama

Senior General Manager, Overseas Management Division
FREUND CORPORATIONThe Overseas Management Division is responsible for our machinery business in overseas markets.
It has two major roles. Its first role is conducting sales and technical support for our Group’s
products in the Asian region excluding Japan. Its second role is improving collaboration within groupcompanies and accelerating the creation of group synergies through our global five-pillar structure.
In the Asian region excluding Japan, we have been selling machinery from FREUNDCORPORATION and US subsidiary Freund Inc. We have finally begun receiving orders for powder
handling machines manufactured by Italian subsidiary Freund S.r.l. We will achieve further businessexpansion in the future by increasing the orders we receive from developing markets in Asia.
We have also added major new local sales agents in Indonesia and elsewhere. In order to bolster
our technical support capabilities in this region and to develop a more international technicalsupport team, we have hired two new engineers who are foreign nationals.
The creation of synergy involving Freund S.r.l., which joined our Group at the end of 2020,
has been delayed by the impact of the COVID-19 pandemic, but we are accelerating those efforts
now. This Division will play a central role in promoting sales of Freund S.r.l. products in the Asian
region for FY2024, and it will lead the way in collaboration between FREUND CORPORATION,
Freund Inc., and Freund S.r.l. The unification of our brands also provides the opportunity tofoster a sense of group unity and to achieve greater synergy in terms of sales and marketing.
In March 2024, Alessio Wagner became the new president of Freund S.r.l. He is leadinga charge with new ideas and new challenges. Freund S.r.l., whose strengths lie in emerging
markets, has already added a tablet coating machine to its product lineup. Going forward,
we will continue to support the development of new products and technologies as a unified group,
combine the technological development of our three group companies based in Japan, the U.S.,
and Europe, and create stronger synergies in areas that are close to customers and markets.

As the product engineering division at
the FREUND Group head office, we will
provide support for the Group’s five-pillar
structure from the technological side.

Yuya Tabira(photo at right)
Senior Engineer, Engineering Section,
Overseas Management Division
FREUND CORPORATIONMay Myat Noe Lwin(photo at left)
Engineering Section,
Overseas Management Division
FREUND CORPORATION

Tabira: Since joining our company in 2009, I have been in charge of after-sales services that
include installing, testing, and maintenance for our machinery in Japan, and I have been working
in the Overseas Management Division since 2021. Initially, I was a service technician within theSales Section, but I have since joined the Engineering Section, which was newly establishedduring FY2023.
May Myat: I am originally from Myanmar and joined the Company in November 2023. I am
currently in my on-the-job training period, learning product engineering by observing machineryinstallation and adoption at workplaces in Japan while being tasked with preparing drawings
and generating quotation. The people in the Engineering Section actively communicate with me
in English, and the job involves a lot of respect among us, so I believe it is a wonderful place for
non-Japanese people to work. I would like to polish my Japanese and English skills, to learn
the technical side of the job, and to become a trusted engineer.
Tabira: In our line of work, even when considering the same model of machinery, eachcustomer’s needs will be different, requiring us to provide a custom-made solution. Every job
feels fresh and new, and that is attributed to a big motivation for me.
The creation of the Engineering Section as a product engineering segment within the
FREUND Group head office has laid the foundation for our global five-pillar structure.
Post the COVID-19 pandemic, making direct communication with overseas partners became
possible again, so I would like to pursue technical collaboration in order to achieve synergy
through our five pillars.

11

On the Site: Business
Global: About Freund S.r.l.

Freund S.r.l. (Italy) appointed a new president in March 2024.
We asked two directors—one who oversees business management, and the other who oversees
administrative affairs and finance—about their ambitions under the new management team.
Alessio Diego Wagner

Makoto Ito

ProfileAfter studying mechanical engineering, Wagner joined an Italian machine tool
manufacturer in 2005. In 2009, after working in sales for Latin America and Europe,
he was appointed Asian sales supervisor at an Italian cable and wire company.
Later, he held key positions in several areas, including equipment for thepharmaceutical market, at a general industrial machinery manufacturer in Italy.
In March 2024, he was appointed president of Freund S.r.l.

ProfileIto joined a major Japanese general trading company in 1984. His main duties involved
overseas business in the Consumer Business Division. He was later stationed in
Italy and then in the U.K. Subsequently, he worked in business management asa director for joint business ventures with group operating companies and local
partners. He joined FREUND CORPORATION in 2022 and took on Italian business
management support duties at the company’s head office. He was seconded toFreund S.r.l. in 2023, and then has been in the current post since March 2024.

General Manager
Freund S.r.I.

Administration and Finance Director
Freund S.r.I.

“Communicating with each and every employee is important toensure they all know and understand the Group vision.”“A key mission is to encourage employees to embrace bothchange and challenges in line with the Group’s vision.”

We have just restarted with a new management team at Freund S.r.l. Our company is reinforcing
two divisions in particular in order to bolster its business activities even further as a member of
the FREUND Group that operates in global markets. Those divisions are the Sales Division and
the After-Sales Division. In particular, we believe that the key to success in the marketplace lies
in how we improve our post-sales services. It is important for us to provide valuable services toour customers, with our diverse experience and knowledge as well as the strength of our brandbased on that experience and knowledge.
As the new president, my intention is to change the mindset of every employee who contributes
to our business activities. The change in the management team may cause some employees
to be anxious about the future, but with the support of the FREUND Group, we will provide
guidance for the employees through positive messages so that we can embrace change andwork together to achieve our goals.
As a full-fledged member of the FREUND Group, Freund S.r.l. will add unprecedented newvalue to the Group. We value communication with each and every employee, and we will strive toincrease their understanding of our Group’s management vision and to achieve that vision.

The company, which was formerly called Cos.Mec S.r.l. and was established in 1991, expanded
its operations and joined the FREUND Group in 2020. With the transition to a new management
team in March 2024, the company changed its name to Freund S.r.l. and took a new step
forward. The company has added new equipment with technical support from FREUNDCORPORATION, and is expanding sales of its powder handling machines into new regions
through FREUND CORPORATION and Freund Inc. Going forward, I have high expectations for
greater cooperation and great contributions by Freund S.r.l. to the FREUND Group.
I am encouraged and gratified that our employees understand the mindset of Mr. Wagner,
the president, and his management team regarding our company’s new direction. I believethat further growth, not only for our company but for the FREUND Group as well, will comefrom our employees thinking for themselves and proactively engaging with their work throughunconventional approaches and working styles.
My role is to promote further enhancements and improvements to our management structure
and to support and motivate employees. My intention is to foster proactive communication witheach and every employee with the primary goal of being fair and equitable toward all employees.
In accordance with the FREUND Group’s management vision, we will steadfastly carry out our
key mission of encouraging employees to embrace change and challenges as we move toward
the next stage of the company’s development.

FREUND Report 2024

12

On the Site: Business
Machinery Division

We asked the Machinery Division, which is responsible for
granulating/coating equipment and other machinery products,
about the current status of its business activities and development.
To address social issues, we are focusing
on “autonomation” (automation with humansupervision) to incorporate new technologies
and to contribute to the attainment ofhealthy and prosperous lifestyles.

Toshiaki Honda

Director and Division Director,
Machinery Division

In March 2023, to respond more rapidly to increasingly diverse needs and challenges and tochart a path toward business growth and stability, we reorganized our operations according toeach business segment and established the Machinery Division.
In FY2023, we received strong orders in Japan, particularly from generic drug manufacturers
who were expanding their production facilities, resulting in our highest-ever order backlog.
While we still face difficulties in procuring some parts and materials, such as semiconductors,
and the lead time from procurement to shipment is increasing, we have managed to deliver toour customers more-or-less as planned through strategic parts inventory.
On the sales front, orders were driven by the HICOATER HV (HC-HV for short), which
achieves high productivity with lower labor requirements. HC-HV utilizes a tablet coating
PAT system called TACT in order to perform an automated series of processes from tablet
sampling to weight measurement and endpoint control. We propose “autonomation” and digitaltransformation projects utilizing AI and other technologies with the aim of developing solutions
that keep the existing machinery market in mind.
Although our customers are mainly pharmaceutical companies, we are looking beyond B-to-B
operations and are pushing for product development that considers to B-to-B-to-C with a viewto contributing to pharmacists and patients as well. In the future, we would like to go a stepfurther and help to solve societal issues by contributing to a stable supply of pharmaceuticalproducts even under circumstances where the working population is expected to shrink. Japan
has excellent technology, including sensors, AI, and robotics, and we will incorporate thosetechnologies into our own products while contributing to healthy and prosperous lifestyles.

We are pursuing “autonomation” using TACT asa springboard to develop products that provide
solutions for the pharmaceutical industry.

Masaki Takeuchi

Autonomation Promotion Section, Machinery Development Department,
Machinery Division

Our company’s “autonomation” consists of automated processes that are monitored byhumans, and our first step in that direction is the product called TACT. A variety of patterns
were implemented during the development process, and commercialization of the product wasachieved through repeated trial and error.
The need for “autonomation” is likely to increase in the future. By aiming for greater“autonomation” that incorporates the latest various technologies, such as AI, robotics, big data,
and IoT, we are working to develop products that provide solutions for the pharmaceutical industry.

We are promoting digital transformation in
new areas, such as product stabilization,using AI in order to contribute to the development
and stable supply of pharmaceutical products.

Takero Adachi

Digital Transformation Promotion Section, Machinery Development Department,
Machinery Division

As a result of our reorganization, machinery and control-related development has been
consolidated under the Machinery Development Department. This has improved both thefrequency and the quality of our communication, and I feel that development has been going
more smoothly than ever before.
The Digital Transformation Promotion Section has been looking into ways of addressing thedomain of product stabilization through AI. We are currently developing a system that uses
AI to detect anomalies before they occur in order to prevent product defects. Going forward,
we will continue to utilize AI in our contributions toward the development and stable supply ofpharmaceutical products that can be taken with confidence.
13

On the Site: Business
Chemical Division

We asked the Chemical Division, which oversees the development andmanufacturing of pharmaceutical excipients and food preservatives,
about their business foundation.
We are contributing to the future of medicalcare and health by bolstering our production
and supply foundation to ensure a stablesupply of products.

Toshifumi Moriguchi
Director and Division Director,
Chemical Division

In FY2023, net sales of pharmaceutical excipients used in oral pharmaceuticals reacheda record high, due in part to an increase in orders from a large user in Japan that was
expanding production. Net sales of food preservatives similarly reached a record high as
the COVID-19 pandemic subsided, leading to a gradual economic recovery and a steadyincrease in demand for confectionery products, including demand from visitors to Japan.
As far as the Chemical Division is concerned, providing a stable supply of products wasa major concern in FY2023. In cooperation with the Development Division, we focused on
developing an overseas production and supply function, but delays in raw material procurement
caused problems related to changing suppliers and adjusting our production accordingly.
Our Division’s overall control of sales, development, and supply has enabled us to achieve
results in line with our sales plan.
For FY2024, we will focus even more on efforts towards ensuring a stable supply of products.
We are taking into account Japan’s so-called “2024 problem” and a BCP perspective,
and are working to rebuild our entire supply chain platform in addition to pursuing a modal shift
in collaboration with MEDICEO CORPORATION.
Our customers are pharmaceutical companies, but we are also aware of the patients beyond them.
We will fulfill our responsibility to supply products, being mindful of our corporate philosophy
at all times.

Through our “ONE FREUND” initiative, we areworking to visualize and share our supply chain
in order to ensure a stable supply of products
to customers.

Yasukazu Toma

General Manager, Excipients Supply Chain Department, Chemical Division

Personnel from our sales, procurement, production, and quality control departments related toour excipient supply chain meet quarterly to develop production, testing, sales, and inventory
plans for each product. The personnel in all our departments are independent-minded people
who hold inter-departmental discussions and achieve consensus for developing plans and forvisualizing and sharing our entire supply chain. Our company procures most of its raw materials
from other countries. Although it isn’t easy, I feel that following the “ONE FREUND” approachinstead of relying on IT systems is an advantage for our company.

By leveraging the comprehensive capabilities of
the Chemical Division, we are striving to ensurea stable supply of products and to take on thechallenge of reaching a new stage.

Masafumi Tokaji

General Manager, Excipients Sales Department, Chemical Division

In FY2023, there were times when we were worried that deliveries to customers might bedelayed, but we managed to overcome this challenge through the establishment of the
Chemical Division, which has enabled closer communication throughout our entire supply
chain. This new stage poses new challenges for our company, including platform restructuring
and a modal shift. As a sales representative, I am focused on ensuring that products are reliably
delivered to customers without delay, since any change in our manufacturing processes canimpact customers as well.

FREUND Report 2024

14

On the Site: Technology Development
Technical Services

We talked to the TS Section, which uses a “pen-and-ink” approachin applying its knowledge and expertise in granulation andcoating technology to customers.
Hayato MisonoManager

Takuma Kanno
Pohao Kuang
Yukako Takiue

Technical Service Section,
Hamamatsu Technical CenterIn the photo from left to right: Kanno, Kuang, Takiue, and Misono

Misono: TS, the name of our section, stands for Technical Services. The TS Section is
responsible for test operation and for operation and performance checks after machinery andequipment have been delivered to our customers. We also provide customers with our expertise
related to operating the machinery and using it for drug formulation. We are also involved in
improving and enhancing existing products and developing new products in collaboration with
the Equipment Development Section.
The TS Section is closely involved with product sales. Our section is responsible for testing
to meet customer requirements, and also as a next step, inquiry testing leading to equipment
orders. For customer testing, each person works together with the customer as a team.
I try at all times to be an engineer who earns the customer’s trust through communication whileproviding the customer with detailed and thorough explanations based on accurate knowledge
so they can trust us with peace of mind.
Kanno: Our company, which uses the pen-and-ink business model, is not just a company
that sells machinery. The TS Section in particular has accumulated technical knowledge andexpertise related to granulation and coating, and that is something that makes us unique.
We will develop these technical capabilities even further in the future, and at the same time,
we will work to pass on and share the skills possessed by individual employees through the useof digital transformation and other means. We will also apply that technical knowledge to thedevelopment of new products.

Kuang: One of the key policies of the TS Section is the active dissemination of technicalknowledge, and I am currently working to disseminate technical knowledge through training
sessions organized by our company. We are also working to improve customer satisfaction byfilming maintenance videos for our machinery and equipment and providing those videos to
our customers. Whenever we communicate with our customers, we always try to be aware ofwhether our own perceptions align with the issues they are facing.
Takiue: I have only been with the Company for four months. I am currently involved in
preparation and assistance for testing operations while I learn about granulation andcoating technologies. I believe that the TS Section needs to standardize the techniques
and knowledge needed to operate our machinery, and I personally would like to learn thosetechniques and skills so I can stand on my own as a human resource before long. I want tolearn from senior employees not only the technical aspects of the job but how to communicate
with customers as well.
Misono: I want the members of the TS Section to become human resources who are capable ofcontributing to the safety and reliability of medical care and food by taking each test seriously,
and I have the same expectations for myself. I think that by continuously aiming to be that kindof employee, we justify the TS Section’s existence.

Yukako Takiue

A DIVERSITYBASEDPERSPECTIVE

Technical Service Section,
Hamamatsu Technical Center

The workplaces where our company’s
machinery is used employ female
employees as well. I want to improveand enhance our products in terms ofuser-friendliness from a uniquely female
perspective.

15

On the Site: Technology Development
Chemical Development Section

We talked to chemical development personnel who are responsible for
product development inspired by new ideas and based on
proactive communication.
Kazuhisa Takeda
General Manager,
Development Department

Yasuaki Morimoto

Manager, Development Section

Keisuke Ai

Development Section (Excipients Staff)

Tokiya Fukazawa
Development Section(Food Preservatives Staff)
Chemical Division
In the photo from left to right: Kanno, Kuang, Takiue, and Misono

Takeda: The Development Section of our division has twelve staff members and is divided
into two teams that are primarily responsible for developing excipients and food preservatives
respectively. These two teams were originally separate departments, but in order to achievesynergy through consolidation, they were combined into the Development Section at thestart of 2023. Excipients are substances added to solid pharmaceuticals and supplements toincrease productivity, or added to pharmaceuticals to increase their functionality or enableeasier ingestion. Food preservatives are small packs inserted into food containers that inhibit
the growth of mold and other microbes and prolong the taste of food products and best-before
period. In the Development Section, our focus is on creating a work environment that values
communication between members and facilitates free, broad-minded discussion witheveryone on an equal footing.
Morimoto: Our Excipients Team develops value-added particles for use in pharmaceuticalproducts, making them smaller for easier ingestion and more durable and unbreakable for easier
handling. Furthermore, in the area of coprocessed excipients for which special processing
techniques are used to combine multiple compounds, we are working to apply our granulation
technology to the development of high-value-added products. Our Food Preservatives Teamis focused on developing environmentally friendly products. In addition to our development
work, we are creating more thorough documentation related to our applied technology in order
to expand sales of existing products. We are also putting the “ONE FREUND” concept into
practice by collaborating with the Sales Division to discuss how to promote our products tothe targeted potential users using that documentation.
Ai: Our Technology Development Research Center has a large selection of machinery andequipment, both large and small, providing many options when considering development.
In addition, many of my colleagues have a high level of expertise related to machinery, whichmakes it easy for me to consult with them regarding machinery improvements and so on.
I proactively communicate with people both inside and outside our Laboratory to stay up-to-dateon the latest information and come up with new development ideas. This is my sixth year since
I joined the Company. Right now, my highest priority is to improve my development expertise,but I would also like to increase my knowledge of manufacturing, quality control, and marketing.
In order to achieve development from multiple perspectives, I would like to gain experiencein various departments in the future, allowing me to eventually apply that experience to thedevelopment of new products.
Fukazawa: I’m always on high alert, gathering information from every field with my sights set
on developing a revolutionary new product. Besides developing new products, we’ve beenworking together with the sales and production departments, examining means of ensuring
a stable supply of existing products as well as expanding sales for those products,
and addressing the needs of customers. These activities provide us with new insight into new
product development. Our management vision of “building more prosperous future” includes
consideration for the environment. As an employee involved in food preservative development,
I want to work on developing environmentally friendly products that will make our company
a market pioneer.
Takeda: I believe that new ideas and inspiration, which are important for product development,
will be derived from organic connection between multiple items of information, events, individual
insights, and thoughts through communication. As everyone has commented, there are alreadynumerous opportunities for collaboration with the sales and production departments, but under
our new Medium-term Management Plan, we would like to implement more proactive personnel
exchanges between departments to facilitate even more lively communication.

FREUND Report 2024

16

Sustainable Management Foundation
Promoting Sustainable Management: Efforts toward a Modal Shift

Reduce CO2 emissions by 70%.
We have commenced a modal shift* in the transportation ofpharmaceutical excipients in partnership with MEDICEO CORPORATION.
As part of our efforts to reduce greenhouse gas emissions and address the 2024 logistics issue, we havecommenced a modal shift in the transportation of pharmaceutical excipients by using railroad containers totransport our products from their point of manufacture at our Hamamatsu plant to the Okayama Center.
This is a joint project between the Company and MEDICEO CORPORATION, and it is also being implemented
with the cooperation of Japan Oil Transportation Co., Ltd., Japan Freight Railway Company, and Japan
Freight Liner Company. Each company is lending its own technology and expertise to the logistics process,which includes procuring containers and loading containers onto trains.

The results expected from this modal shift❶ A reduction in greenhouse gas emissions

The transport of pharmaceutical excipients from our Hamamatsu Plant (in Hamamatsu, Shizuoka
Prefecture) to the Okayama Center (in Okayama, Okayama Prefecture) produces approximately
8.2 tons p.a. of greenhouse gas emissions via conventional ground shipping using large trucks. Thisinitiative is expected to reduce greenhouse gas emissions by approximately 5.8 tons p.a., or 70%.

❷ An improvement in drivers’ work environments

Ground transportation from Shizuoka Prefecture to Okayama Prefecture requires two drivers ora relay crew due to the long hours involved. This initiative will improve the drivers’ work environmentand reduce logistics costs because the long-distance transportation will take place by train.

❸ A reduction in accidents and shipping delays

Changing the mode of transportation from trucks to trains reduces the risk of traffic accidents andshipping delays. Trains are safer and more reliable means of transportation.

We are also considering the implementation of a modal shift for shipping from the Okayama Center to the factories of pharmaceuticalcompanies in the future. This initiative is part of our company’s sustainability activities, and we will be expanding it further. Moreover,
we will continue to work toward achieving a sustainable society from a variety of perspectives through our future business activities.
*Modal shift: The conversion of freight transport from trucks and other vehicles to railroads and ships, which have a smaller environmental impact.

Top: A truck being loaded / Middle: Transport by train /Bottom: The Hamamatsu Plant

17

Sustainable Management Foundation
Introduction of Board Members
Honorary Chairman and Directors

Yasutoyo Fusejima
Honorary Chairman

Hisashi Tanaka

Iwao Fusejima

Audit & Supervisory Board Members

Toshiaki Honda

President and CEO

Director

Toshifumi Moriguchi
Director

Sakae Hirano

Full-time Audit &Supervisory Board Member

Reason for Appointment

Reason for Appointment

Sakae Hirano was
appointed as Full-time
Audit & Supervisory
Board Member as he wasdeemed to have more thanadequate ability to oversee
the management based on
his knowledge of financeand accounting as well as
superior insight regarding
management in general.

Sayoko Izumoto was
appointed as external
audit & supervisory board
member as she wasdeemed to satisfy this roleby leveraging on her longexperience as a certified
public accountant and on
her vast insight regarding
finance and accounting.

Reason for Appointment

Reason for Appointment

Reason for Appointment

Hisashi Tanaka was
appointed as External
Director as he was deemed
to be able to contribute tostrengthening management
oversight and corporate
governance by having
abundant experience andwide-ranging insight asa manager.

Ryuichi Kume wasappointed as External
Director as he was deemed
to be a manager with
abundant experience andwide-ranging insight in thepharmaceutical industry,
and able to contributeto strengthening ofmanagement oversight andcorporate governance.

Kazunari Hamada was
appointed as External
Audit & Supervisory Board
Member as he was deemedto satisfy this role having
specialized knowledge
and experiences as an
attorney from an objective
standpoint as a legal expert.

External Director

Ryuichi Kume
External Director

Skill Matrix

Audit &
Supervisory
Board Members

Directors

Name

Tenure(years)Re-appointed

Iwao Fusejima

16

12/12

Re-appointed

Toshiaki Honda

3

12/12

Re-appointed

Toshifumi Moriguchi

1

8/8

Re-appointed

Hisashi Tanaka

3

Re-appointed

Ryuichi Kume

1

Current Position Sakae Hirano

5

Current Position Sayoko Izumoto

7

Current Position Kazunari Hamada

3

12/12
8/8

Nominating andRemuneration
Committee
Member of the Nominating andRemuneration Committee

External Audit &Supervisory Board Member

Fields expected to cover
Human
Resources/
Legal/Risk
Labor/Human
Management
Resources
Relations

Corporate
Management/
Top
Management
Experience

Marketing/
Sales

●

●

●

●

●

Finance/
Accounting

IT/Security●
Chairman of the Nominating andRemuneration Committee
Member of the Nominating andRemuneration Committee

Board of Directors:
12/12
Audit & Supervisory Board: 17/17
Board of Directors:
12/12
Audit & Supervisory Board: 17/17

Observer of the Nomination andRemuneration Committee

Board of Directors:
11/12
Audit & Supervisory Board: 16/17

Observer of the Nomination andRemuneration Committee

External Audit &Supervisory Board Member

Kazunari Hamada

Advisory Committee
Attendance at Board of Directors
and Audit & Supervisory Board(times)

Sayoko Izumoto

●

●
●
●

GlobalExaperience

●

●

●

●
●
●

●
●

Manufacturing/
Development/
ESG/
Research and Sustainaability
Development

●

●

●

●

●

●

●

●

●

●

●
●

●

FREUND Report 202418

Sustainable Management Foundation
Corporate Governance

The Group’s basic policy and objective of corporate governance is tocontinuously enhance corporate value by increasing corporate transparency,
ensuring legal compliance, fairness, and independence from the perspective of
all stakeholders, including shareholders, investors, and users.

Corporate Governance Structure (As of the end of May, 2024)

Basic Policy

Overview of the Corporate Governance Structure
The Company has a Board of Directors, Audit & Supervisory Board, and accounting
auditors. The Executive Officers execute business operations, while the Board of
Directors sets management policies and targets for the entire Group and supervises the
management and business operations of each group company. The Board of Directors
consists of five members (two of whom are External Directors) with diverse experience,
knowledge and expertise, and in principle meets once a month. Three external auditors(one of whom is a full-time auditor) also participate in the Board of Directors meetings toensure appropriate and prompt decision-making and to further strengthen the supervisory
function. Auditors work closely with the Internal Audit Office, which reports directly to the
President and CEO, and the accounting auditors to enhance the effectiveness of audits.

For more detailed information,please refer to the “Corporate Governance” section of our website.

Internal Audit
OfficeBased on our corporate philosophy, “Develop the Future Through Creativity ®,”the Company engages in business activities that embody its management vision ofcreating essential technologies for brighter tomorrow. We aim to increase our corporate
value by providing products and services useful to our customers under fair andappropriate competition and thereby pursuing reasonable profits.

Basic Approach to Internal Control and Outline of the Structure
The Company identifies the internal control function as “a framework for management tocontrol operational execution divisions.” The Board of Directors assumes responsibility indesigning basic scheme of internal controls for the group companies, and in supervising
maintenance, operation and assessment of internal controls based on the Companies
Act and other relevant laws as well as the Company’s articles of incorporation andother internal rules.
To fulfill its corporate social responsibility, which is the basis of its corporate philosophyof “Develop the Future through Creativity ®,” we are working to instill compliance andestablish a risk management system, and have established the Compliance and Risk
Management Committee and the Internal Control Committee, which comprehensively
manages internal controls.

https://www.freund.co.jp/english/company/governance.html
19

Sustainable Management Foundation
Risk Management

The Group perceives risks as latent factors in its corporate business activities
that could lead to deterioration in its social credibility or to damages in its
corporate value. The Group is exposed to various potential risks as listed below,
and its financial results may unexpectedly be influenced in the event that any ofthese risks occur. The Group maintains a policy to acknowledge the possibilityof such occurrences, and prevent the occurrence of these risks to the best of
its ability, while also responding quickly and adequately in the case that they
do occur. It should be noted that not all risks are cited here. Furthermore,factors related to the future mentioned here represent those recognized as ofthe end of FY2023.

Business Risks❶	Risks Related to the Economic

Environment and Market Trends❷ Industry Trend Risk
❸ Raw Materials Procurement Risk
❹ Business Partner Relationship Risk
❺ Overseas Business Operational Risk
❻ Pricing Competition Risk
❼ Human Resources Risk

❽ Natural Disaster Risk
❾ Foreign Exchange Fluctuation Risk
❿ Intellectual Property Risk
⓫ Product Liability Risk
⓬ Public Regulations-Related Risk
⓭ Risks Related to Legal Compliance⓮ Information Leakage Risk
⓯ Impairment Risk for Non-Current Assets

Risks to Be Watched Closely in the Future
In FY2023, expectations for an economic recovery have increased due to the normalizationof the economy with the subsiding of the COVID-19 pandemic, improvements in employment
and the income environment, and other factors. However, geopolitical tensions, such as
the worsening situations in Ukraine and the Middle East, and the continued rise in prices
due to the weak yen have created an ongoing condition of uncertainty. FREUND Group isaware of the following risks that should be watched closely in the future.

Industry trend risk
In Japan, in addition to the ongoing reduction in drug prices, quality and supply stability
issues that have arisen in the generic drug industry have triggered a movement toreorganize the pharmaceutical industry. In the midst of these developments, the Groupis increasing its presence in overseas markets and accelerating global expansion in
the pharmaceutical product field through such measures as the M&A of Cos.Mec S.r.l.
(currently Freund S.r.l.) in Italy in November 2020 and the establishment of the Shanghai
FC Center in July 2021, while simultaneously promoting machinery and chemicalbusinesses related to non-pharmaceutical product fields, such as the chemical, food,and battery industries, and expanding its geographical and business areas.

Overseas business operational risk
Trends in financials and healthcare policies around the world affect the management ofpharmaceutical companies. Pharmaceutical companies in the U.S. and other developed
countries are taking cost-cutting measures, such as transferring manufacturing tolower cost emerging countries. The Group's priority countries and regions for businessexpansion are emerging countries such as China and the countries of Southeast Asia,
Africa, and South and Central America, where populations and incomes are expected
to grow, and we are required to manage risks related to business expansion in thesecountries and regions. To this end, the Group is strengthening its understanding ofconditions by country/region, drafting strategies, and monitoring individual transactions.

For details of each risk item,
please refer to the "Corporate Governance/Risk Management" section of our website.

https://www.freund.co.jp/english/company/governance.html
FREUND Report 2024

20

Information

10-Year Consolidated Financial Data of FREUND Group(¥million)

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

Net sales

17,42419,027

21,16419,801

18,408

16,772

16,765

17,632

19,65822,903For the year
Cost of sales

11,97812,921

14,343

12,985

12,22011,344

11,126

11,62013,66515,859Selling, general and administrative expenses

4,295

4,759

4,779

4,845

4,964

4,870

4,528

5,030

5,541

5,773

Operating profit

1,150

1,346

2,041

1,971

1,223

558

1,111

981

451

1,270

695

961

1,064

1,477

843

381

970

543

(538)

764

Profit (loss) attributable to owners of parent

1,473

1,692

2,393

2,332

1,598

950

1,599

1,639

1,113

1,824

Orders received (Machinery)

12,407

13,112

16,358

11,513

11,83910,227

12,386

15,621

14,63018,600Order backlog at end of period (Machinery)

EBITDA*

1

6,682

7,086

8,561

5,822

5,428

4,695

6,615

10,574

12,826

15,842

Depreciation

308

321

338

344

344

386

461

570

565

539

R&D expenses

592

687

640

862

832

725

526

580

622

634

Cash flows from operating activities

822

290

3,605

594

435

(27)

2,280

701

(196)

2,368

Cash flows from investing activities

(240)

(432)

(351)

(493)

(566)

(852)

(1,726)

(680)

(666)

(739)

Cash flows from financing activities

(284)

(331)

(277)

(499)

(921)

(325)

(371)

(427)

451

(874)

At end of period
Total assets

17,277

17,206

19,101

19,125

17,46518,505

20,57522,27322,75825,789Net assets

11,18011,52912,185

13,242

13,25013,243

13,85814,354

14,11715,023

10,987

11,52912,185

13,242

13,25013,243

13,85814,354

14,11715,023(Equity)
Per share data*

2

Earnings per share (EPS, ¥)

40.36

55.74

61.72

85.69

50.15

22.79

57.96

32.46

(32.15)45.46

Book value per share (BPS, ¥)637.19668.57706.62767.91

791.34790.94827.67857.28843.09889.03

Dividend*3 per share (DPS, ¥)

15.00

25.00

20.00

20.00

20.00

20.00

20.00

20.00

20.00

20.00

6.6

7.1

9.6

10.0

6.6

3.3

6.6

5.6

2.3

5.5

Major indicators

Operating profit margin (%)

Return on assets (ROA, %)

4.0

5.6

5.6

7.7

4.8

2.1

4.7

2.5

(2.4)

3.2

Return on equity (ROE, %)

6.6

8.5

9.0

11.6

6.4

2.9

7.2

3.9

(3.8)

5.3

Dividend payout ratio* 4 (%)

37.2

22.4

32.4

23.3

39.9

87.8

34.5

61.6

—

44.0

Equity ratio (%)

63.6

67.0

63.8

69.2

75.9

71.6

67.4

64.4

62.0

58.3

*1. EBITDA = Operating profit + Technical support fee income + Depreciation + Amortization of goodwill*2. The Company carried out a 2-for-1 split of common shares on March 1, 2016. The “per share” calculations are based on the assumption that the stock splits were conducted at the beginning of FY02/15.
*3. Dividend per share includes commemorative dividends of ¥2.50 (for FY2014) and ¥5.00 (for FY2016).
*4. Consolidated dividend payout ratio for FY2022 is not available due to loss attributable to owners of parent.

21

Information

Company and Stock Information (As of February 29, 2024)

Corporate Profile

Major Shareholders

Sharesowned(thousandshares)Ownership
ratio
(%)

K. K. Fusejima Yokosha

1,648

9.75

Yasutoyo Fusejima

1,217

7.21

PERSHING-DIV. OF DLJ SECS. CORP.

1,211

7.17

MUFG Bank, Ltd.

836

4.95

Sumitomo Mitsui Banking Corporation

744

4.40

Okawara Mfg. Co., Ltd.

673

3.99

Freund Employee Shareholding Circle

443

2.63

Company NameFREUND CORPORATION

Established

April 22, 1964

Capital Stock¥1,035,600,000

Employees

468 (Consolidated)

Head Office Location

FREUND Bldg. 6-25-13 Nishishinjuku
Shinjuku-ku, Tokyo 160-0023

Websitehttps://www.freund.co.jp/english/

Stock Listing

TSE Standard (securities code 6312)

Fiscal Year

From March 1 to the last day of
February next year

Annual General
Shareholders’ Meeting

Held in May of every year

Shareholder Registry
Administrator

Mitsubishi UFJ Trust and Banking
Corporation

The Shizuoka Bank, Ltd.

368

2.18

Total Number of
Shares Issued

18,400,000 shares

Meiji Yasuda Life Insurance Company

360

2.13

Total Number of
Shareholders

21,203

Iwao Fusejima

298

1.77

The Company has 1,501,000 shares (8.16%) of treasury shares.
Shareholding percentage stakes are calculated after excluding
1,501,000 shares of treasury shares.

Shareholder Distribution byType of Shareholders

No. of shares held
(thousand shares)

Percentage

2,495

13.56%

387

2.10%

Other Corporations

2,986

16.22%

Foreign Corporations

1,780

9.68%

Individuals, Others

10,75258.44%

Financial Institutions
Financial Instruments Firms

NOTE: Treasury shares are included in the category of "Individuals, Others"

Trends of Share Price, Trading Volume and TOPIX

NOTE: Share prices and trading volumes
prior to the stock split shown in thechart have been adjusted to reflect thestock split. The values of FREUND and
TOPIX are based on the closing pricedata of March 1, 2021 as 100.

FREUND Report 2024

22

FREUND CORPORATIONFREUND Bldg. 6-25-13 Nishishinjuku, Shinjuku-ku, Tokyo, 160-0023
Please contact with us for any inquiry at the E-mail address below.
Corporate Planning Division Phone +81-3-6890-0747 Fax +81-3-6890-0870 E-mail ir@freund.co.jp URL https://www.freund.co.jp/english/