Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

Securities code: 4362
June 10, 2024

To our shareholders:

Hiroshi Yano
Representative Director, President
NIPPON FINE CHEMICAL CO., LTD.
4-9, Bingomachi 2-chome, Chuo-ku, Osaka

Notice of the 156th Annual General Meeting of Shareholders
We are pleased to announce that the 156th Annual General Meeting of Shareholders of NIPPON FINE CHEMICAL
CO., LTD. (the “Company”) will be held as set forth below.
The Company takes measures for providing information that constitutes the content of reference documents for thegeneral meeting of shareholders, etc. (excluding voting form) in electronic format, so kindly access the Company’s
website below to review the information.
The Company’s website: https://www.nipponseika.co.jp/ (in Japanese)
Please access the above website and select “IR” and then “General Meeting of Shareholders” to review.
For items subject to measures for electronic provision, the Company also posts this information in electronic format
on the website of the Tokyo Stock Exchange (TSE).
To access this information from the latter website, access the TSE website (Listed Company Search) by using theinternet address shown below, enter “NIPPON FINE CHEMICAL” in the “issue name (company name)” or “4362[half-width characters]” in securities “Code,” and click “Search,” and then click “Basic information” and select“Documents for public inspection/PR information.”
TSE website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)
If you are unable to attend on the day of the meeting, you can exercise your voting rights via postal mail or the internet
in advance, so please refer to the following Reference Documents for the General Meeting of Shareholders and send
the enclosed voting form or exercise voting rights on the internet, etc., by no later than Tuesday, June 25, 2024, at 5:40
p.m. (JST) in accordance with the following guidance.
1. DateWednesday, June 26, 2024, at 10:00 a.m. (JST)

2. Venue

Nihon Mengyo Club (Cotton Industry House) New Building 7th Floor
5-8, Bingomachi 2-chome, Chuo-ku, Osaka

3. Purposes
Matters to be reported
1. The Business Report, the Consolidated Financial Statements and the Audit Results Report of the Financial
Auditor and the Audit & Supervisory Board on the Consolidated Financial Statements for the 156th fiscal
year (from April 1, 2023 to March 31, 2024)
2. Report on the Non-Consolidated Financial Statements for the 156th fiscal year (from April 1, 2023 to March
31, 2024)-1-

Matters to be resolved< Company Proposals >Proposal No. 1

Appropriation of Surplus

Proposal No. 2

Election of Five Directors< Shareholder Proposal >Proposal No. 3

Purchase of Treasury Shares

4. Matters Decided upon Convocation
1. If there is no indication of approval or disapproval for each proposal on the voting form when exercising
voting rights in writing, it will be treated as an indication of approval for the Company’s proposal and an
indication of opposition to the shareholder’s proposal.
2. If you exercise your voting rights both in writing and via the internet, etc., we will treat the exercise of yourvoting rights via the internet, etc. as valid. In addition, if you exercise your voting rights multiple times via
the internet, etc., we will treat the last exercise as the valid exercise of your voting rights.

When attending this meeting in person, please submit the enclosed voting form at the reception.

Regarding this General Meeting of Shareholders, regardless of whether or not there is a request for documentary delivery, we have
uniformly sent a document that describes the items subject to measures for electronic provision.

Of the items subject to measures for electronic provision, “Notes to the Consolidated Financial Statements” and “Notes to the NonConsolidated Financial Statements” are not included in the documents we send under the provisions of laws and regulations and the
Articles of Incorporation of the Company. The Audit & Supervisory Board Members and the Financial Auditor have audited the
documents subject to audit, including the above items.



If revisions to the items subject to measures for electronic provision arise, a notice of the revisions and the details of the items before
and after the revisions will be posted on the Company’s website and the TSE website described above (in Japanese).



We do not provide souvenirs to shareholders attending this General Meeting of Shareholders. Your understanding will be highly
appreciated.

-2-

Reference Documents for the General Meeting of Shareholders
Proposals and References< Company Proposals (Proposals No. 1 and 2) >Proposal No. 1

Appropriation of Surplus

Returning profits to shareholders is one of the Company’s important priorities. In this regard, the Company seeks toincrease the consolidated basic earnings per share. The Company targets a basic policy to achieve a benchmark DOE(dividend on equity) of 3.5%, and aim to improve and stabilize the level of dividends to pay dividends of surplus.
Based on the dividend policy, the year-end dividend shall be paid in cash and the dividend of ¥35 per share (aggregate
amount of ¥787,181,745) shall be paid to shareholders at the end of the fiscal year under review. Accordingly,
including the interim dividend of ¥35 per share, the annual dividends per share will be ¥70.
The effective date (starting date of payments) of the year-end dividend will be Thursday, June 27, 2024.

-3-

Proposal No. 2

Election of Five Directors

The term of office of all six Directors will expire at the conclusion of this meeting. Therefore, the Company proposes
the election of five Directors (including two Outside Directors).
The candidates for Director are as follows.
The Nomination and Remuneration Committee where Independent Outside Directors hold a majority has discussed
the nomination of candidates for Director in order to capitalize on the knowledge and advice of Independent Outside
Directors as well as to ensure the fairness, transparency and objectiveness of the procedures.
Candidate
No.

Name(Date of birth)

Hiroshi Yano
(June 29, 1964)
Male
1

2

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Apr. 1989
Sept. 2006
June 2010
Apr. 2011
June 2015

Apr. 2017
June 2020

Joined the Company
General Manager of Planning Office
Corporate Officer
General Manager of Corporate Planning OfficeDirector
Senior General Manager of Fine Chemicals
Department
General Manager of Lipid Division
Representative Director, President (current
position)
Senior General Manager of Lipid Division

Number of theCompany’s shares
owned

40,655 shares

Oct. 2021(Reasons for election)
Mr. Hiroshi Yano has worked on strengthening the Company’s governance structure through leading and supervising
the Company’s overall management as Representative Director, President since 2020 after assuming the position of
Corporate Officer in 2010. He also has experience serving as Director, Corporate Officer. The Company has judged thatit can hope that he will be able to contribute to enhancing the Company’s sustained corporate value based on theseabundant experience and in-depth insight about the overall businesses and therefore nominated him as a candidate for
Director for another term.
Apr. 1974
Joined the Company
Mar. 2005
General Manager of Takasago Plant
June 2008
Corporate Officer
Oct. 2008
Senior General Manager of Manufacturing &Technology Division
Masanobu Kawabayashi
June 2010
Director (current position)(September 5, 1955)
34,589 shares
June 2015
Director, Executive Corporate Officer (current
Maleposition)
June 2017
Group Production Management (current
position)
Apr. 2024
In charge of Plant Engineering Department(current position)(Reasons for election)
Mr. Masanobu Kawabayashi has reflected knowledge and experience gained so far for the Company’s overallmanagement as Director as well as supervised the manufacturing technology area after assuming Corporate Officer in
2008, serving as Director, Corporate Officer in 2010, and then assuming the position of Director, Executive Corporate
Officer in 2015. The Company has judged that it can hope that he will be able to contribute to enhancing theCompany’s sustained corporate value based on these abundant experience and in-depth insight about the overallbusinesses and therefore nominated him as a candidate for Director for another term.

-4-Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company
Sept. 2000
Sept. 2005
June 2006
June 2008
Apr. 2009

Yukihiro Ohashi(July 26, 1960)
Male
3

Apr. 2011
June 2011
May 2013
June 2021
Apr. 2023

4

Joined the Company
General Manager of Cosmetic Ingredients
Research Laboratory Office
General Manager of Cosmetic Ingredients
Research Laboratory Department
Corporate Officer
Deputy Senior General Manager of ResearchLaboratory Division
Senior General Manager of Cosmetics
Ingredients Division
Director (current position)
General Manager of Research Laboratory(current position)
Director, Senior Corporate Officer (current
position)
Senior General Manager of ResearchLaboratory Division (current position)

Number of theCompany’s shares
owned

67,938 shares(Reasons for election)
Mr. Yukihiro Ohashi has reflected knowledge and experience gained so far for the Company’s overall management as
Director as well as supervised the cosmetic ingredients area, and then the R&D area since 2023, after assuming
Corporate Officer in 2008, serving as Director, Corporate Officer in 2011, and then assuming the position of Director,
Senior Corporate Officer in 2021. The Company has judged that it can hope that he will be able to contribute toenhancing the Company’s sustained corporate value based on these abundant experience and in-depth insight about theoverall businesses and therefore nominated him as a candidate for Director for another term.
Apr. 1975
Joined Toray Industries, Inc.
June 2006
Director of Toray Industries (Malaysia) Sdn.
Bhd., and President of Penfibre Sdn. Bhd.
June 2013
CEO & COO of Kansai TEK Co., Ltd.
Susumu Ota(currently Toray Engineering West Co., Ltd.)(October 13, 1952)
Jan. 2015
CEO & COO of Toray Engineering Co., Ltd.
[Outside]
0 shares[Independent]
June 2019
AdvisorMale
June 2021
Director of the Company (current position)(Significant concurrent positions outside the Company)
Outside Audit & Supervisory Board Member of YMC CO.,LTD.
(Reasons for election and outline of expected role)
Mr. Susumu Ota has abundant knowledge and experience about corporate management. The Company has considered it
as his expected role to present a long-term vision and give proper opinions from a perspective different from theCompany’s previous idea regarding the Company’s management as well as to seek to reinforce the supervisory functionof the Board of Directors with high independence and therefore nominated him as a candidate for Outside Director for
another term.

-5-Candidate
No.

Name
(Date of birth)

Career summary, position and responsibility in the Company,
and significant concurrent positions outside the Company

Number of theCompany’s shares
owned

Oct. 2000

5(Notes)Joined ChuoAoyama Audit Corporation(currently PricewaterhouseCoopers Japan LLC)
Apr. 2004
Registered as a Certified Public Accountant
Nov. 2005
Joined Nippon Yusen Kabushiki Kaisha
Jan. 2017
Founder and Representative Director andEriko Matsuwaka
President of Stand by C Woman Co., Ltd.
(July 25, 1978)(current position)[New election]
0 shares
Mar. 2020
Director and Audit and Supervisory Committee[Outside]
Member of Dynapac Co., Ltd. (current[Independent]
position)
Female(Significant concurrent positions outside the Company)
Representative Director and President of Stand by C Woman
Co., Ltd.
Director and Audit and Supervisory Committee Member ofDynapac Co., Ltd.
(Reasons for election and outline of expected role)
Ms. Eriko Matsuwaka is a certified public accountant well versed in corporate accounting and has abundant knowledge
and experience about corporate management. The Company has considered it as her expected role to present a longterm vision and give proper opinions from a perspective different from the Company’s previous idea regarding theCompany’s management as well as to seek to reinforce the supervisory function of the Board of Directors with highindependence and therefore newly nominated her as a candidate for Outside Director.
1. There is no special interest between any of the candidates and the Company.
2. Candidates Mr. Susumu Ota and Ms. Eriko Matsuwaka are candidates for Outside Director.
3. The Company has submitted notification to the Tokyo Stock Exchange that candidate Mr. Susumu Ota has been designatedas an independent officer as provided for by the aforementioned exchange. If he is reelected, he will continue to be an
independent officer. If candidate Ms. Eriko Matsuwaka is elected, she will be an independent officer as well.
4. At the conclusion of this meeting, candidate Mr. Susumu Ota’s tenure as Outside Director of the Company will have been
three years.
5. Limited liability agreements with Outside Directors
The Company specifies that the liability of Outside Directors can be exempted within the range provided for by theCompanies Act so that they can properly perform their expected duties as well as stipulates in its current Articles ofIncorporation that the Company can enter into agreements with Outside Directors to limit their liability for damages for theCompany caused by negligence of their duties within a certain range to make it more smoothly to bring in competent humanresources suitable for Outside Directors. The Company has entered into a limited liability agreement with candidate for
Outside Director Mr. Susumu Ota. If his reelection is approved, the Company plans to continue the said limited liability
agreement with him. If the election of candidate for Outside Director Ms. Eriko Matsuwaka is approved, the Company
plans to enter into the said limited liability agreement with her.
The outline of this agreement is as follows:(i) This agreement limits liabilities provided for by Article 423, paragraph (1) of the Companies Act to the total of theamounts stipulated in each item of Article 425, paragraph (1) of the aforementioned Act.
(ii) The aforementioned limitation of liability shall apply only when an Outside Director performs duties that have caused
the liability in good faith and without gross negligence.
6. The Company has entered into a directors and officers liability insurance (D&O insurance) policy with an insurancecompany as stipulated in Article 430-3, paragraph (1) of the Companies Act. Under the said insurance policy, legal
compensation for damages and damages for litigation expenses to be shouldered by the insured shall be supplemented.
The insured on the said insurance policy shall be Directors and Audit & Supervisory Board Members of the Company andits subsidiaries (excluding its overseas subsidiaries). If the election of each candidate for Director is approved under this
proposal, candidates to be reelected will continue to be the insured and new candidate Ms. Eriko Matsuwaka will be newly
insured. The Company plans to renew the said insurance policy in November 2024.
7. Ms. Eriko Matsuwaka’s name in the family register is Ms. Eriko Matsumoto.

-6-

(Reference)

Audit & Supervisory Board
Members

Candidates for Director

Skill matrix of candidates for Director and Audit & Supervisory Board Members

Name

Corporate
management

Sustainability
and ESGHiroshi Yano〇〇

Masanobu Kawabayashi〇

Yukihiro Ohashi
Susumu Ota〇

Eriko Matsuwaka〇

Financesandaccounting

GlobalLegal affairs
and riskmanagement

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇
〇

Masanori Mitsuki〇

Tetsuo Masuda〇〇

Businessstrategyandmarketing〇Kiyoshi Horie

Kazufumi Suzuki

Manufacturing,R&D andquality

〇

〇

〇
〇

〇

〇

-7-

〇

〇

〇

< Shareholder Proposal (Proposal No. 3) >The shareholder proposal is provided as written on the shareholder proposal form submitted by the shareholder who
submitted the proposal.
Proposal No. 3(1)

Purchase of Treasury Shares

Outline of the Proposal
Pursuant to the provisions of Article 156, paragraph (1) of the Companies Act, the Company shall purchase a
total of up to 2,537,000 ordinary shares of the Company for a maximum total purchase amount of¥7,611,000,000 in exchange for the delivery of cash, within one year from the conclusion of this Annual
General Meeting of Shareholders.

(2)

Reasons for the Proposal
By resolution of the Board of Directors on October 30, 2023, the Company resolved to acquire treasury shares
between November 1, 2023 and March 29, 2024, with a maximum number of 350,000 shares (1.53% of thetotal number of issued shares (excluding treasury shares)) to be acquired at a maximum acquisition price of¥1.0 billion. We believe these measures are worthy of some recognition from the viewpoint that the Company
has implemented measures for enhancement of shareholder returns and improvement of capital efficiency.
However, the Company’s stock price has been stagnant for the past year, and it can be said that the market
perceives the Company’s countermeasures as still insufficient. In addition, while the Company has no debt orother borrowings, its balance sheet has expanded more than necessary, with cash and deposits ofapproximately ¥10.3 billion and investment securities, including cross-shareholdings, of ¥12.3 billion in thefinancial results for the six months ended September 30, 2023, diluting its ROE, which measures its return on
equity, and thereby causing the market to undervalue its quality business.
Therefore, in order to enhance shareholder returns and improve capital efficiency further, it is believed that
the Company should purchase approximately 10% of the total number of issued shares (excluding treasury
shares) as treasury shares, and take measures to cancel them pursuant to the provisions of Article 178 of theCompanies Act.

Opinion of the Board of Directors of the Company Regarding Proposal No. 3(1)

Opinion of the Board of Directors of the Company
The Board of Directors of the Company opposes this shareholder proposal.

(2)

Reasons for Opposition
The Company recognizes that the purchase of treasury shares is effective for enhancing capital efficiency andshareholder returns, as well as the execution of flexible capital policies in response to changes in the
management environment. Recently, pursuant to a resolution at a meeting of the Board of Directors held in
October 2023, the Company acquired a total of 350,000 of its own shares for a total purchase amount of¥985,975,000 on the Tokyo Stock Exchange between November 1, 2023 and January 31, 2024. In addition,
we have continued to work to improve shareholder returns as follows.

-8-Trend of shareholder returns

Classification
Annual dividends
per share
Purchase oftreasury shares
Dividend payout
ratio
Total return ratio*1.

Fiscal year
ended March
31, 2021

Fiscal year
ended March
31, 2022

Fiscal year
ended March
31, 2023

Fiscal year
ended March
31, 2024

Fiscal year
ending March 31,
2025
Forecast

¥35

¥54

¥57

*1 ¥70*2 ¥74–¥0.27 billion¥1.89 billion¥0.99 billion

–

30%

37%

33%

48%

*2 48%

30%

45%

79%

77%

–

The annual dividends per share for the fiscal year ended March 31, 2024 is subject to approval of the Company Proposal at the156th Annual General Meeting of Shareholders.

*2.

The annual dividends per share and dividend payout ratio for the fiscal year ending March 31, 2025 are forecasts.

The Company has set ROIC (return on invested capital) of 8.0% (FY2022: 7.9%) as a target indicator for the
final year of the medium-term management plan (FY2026) starting in April 2023. In the medium-term
management plan, we plan to make more aggressive investments in human capital, fixed assets and R&D for
further growth, and by setting an ROIC target, we will also aim at growth that emphasizes capital efficiency.
In addition, last year, by changing the DOE from the former target of 3.0% to a target of 3.5%, we have further
enhanced shareholder returns. Furthermore, setting a goal of reducing the ratio of cross-shareholdings to 17%
or less by the end of FY2026 (FY2022: about 25%), we will meet the expectations of our stakeholders bysecuring the funds obtained from the sale of cross-shareholdings to maintain financial stability, while also
allocating in a well-balanced manner to growth investments and shareholder returns.
The Company believes that, taking into consideration the liquidity of the Company’s shares, the purchase of¥7,611,000,000 of treasury shares in one year on the market is not realistic, and if a proposal like this is passed,
there is not only a risk that the financial resources for growth investment would be harmed and the mediumto long-term growth and enhancement of corporate value of the Company would stall, there is also a risk that
financial stability would be harmed, which could harm shareholders’ interests as a result. The Company
believes that the purchase of treasury shares should be performed at an appropriate time, while taking into
consideration the balance with investments in human capital, fixed assets and R&D for future growth, basedon the status of trading in the Company’s shares and the share price.

-9-