LPPM Responsible Platinum and Palladium Compliance Report
The LPPM Responsible Platinum and Palladium Guidance has been established for Good DeliveryRefiners to adopt high standards of due diligence in order to combat systematic or widespread abusesof human rights, to avoid contributing to conflict, to comply with high standards of anti-money launderingand to combat terrorist financing practice.
This report summarises how Materials Eco-Refining Co., Ltd. has complied with the requirements of
the LPPM Responsible Platinum and Palladium Guidance Version4.
Table 1: Refiner’s detailsRefiner’s name

Materials Eco-Refining Co., Ltd.

Location

15-1, Aza-Fukimatsu, Onahama, Iwaki,
Fukushima, 971-8101 JAPAN

Reporting year-end

31 March 2024

Date of Report

25 June 2024

Senior management responsible for this report

Koji Iwami
President___________________________________

Materials Eco-Refining Co., Ltd. evaluation
Table 2: Summary of activities undertaken to demonstrate compliance
Step 1: Establish strong company management systems
Compliance Statement with Requirement:
We have fully complied with Step 1: Establish strong management systems.
Has the Refiner adopted a company policy regarding due diligence for supply chains ofPlatinum/Palladium?
Comments and Demonstration of Compliance:In fiscal 2019, we established our Responsible Minerals Control Policy, which was consistent with themodel policy set out in the Annex II of the OECD Due Diligence Guidance. This sets out ourresponsibility for conducting risk-based due diligence, screening and monitoring of transactions andgovernance structures in place. In fiscal 2023, we revised our Responsible Minerals Control Policy tomake clear that we consider ESG factors in the purchasing of platinum- and palladium-bearing
material.

URL: http://www.mercompany.co.jp/en/pdf/mineralscontrolpolicy.pdf

Has the Refiner set up an internal management structure to support supply chain due diligence?
Comments and Demonstration of Compliance:
An internal management system has been set up to define the governance, roles and responsibilities,
internal audit, communication and senior management review as per the adopted policy. The
compliance officer has been assigned to manage the process, and has a direct line of reporting to thesenior management. In fiscal 2023, we conducted internal audit and reported the results to the seniormanagement.
Has the Refiner established a strong internal system of due diligence, controls and transparency
over Platinum/Palladium supply chain, including traceability and identification of other supply chain
actors?
Comments and Demonstration of Compliance:
We have a ‘lot’ receipts process, and specific documents must be received and transactional details
entered before we process the platinum- and palladium-bearing material. We only use bank transfers
as a payment method to our precious metals suppliers. We do not use cash as a payment method.
Has the Refiner strengthened company engagement with Platinum/Palladium-supplying
counterparties, and where possible, assisted platinum and palladium supplying counterparties inbuilding due diligence capabilities?
Comments and Demonstration of Compliance:
We sent a letter of notification on our “Responsible Minerals Control Policy” to our new suppliers infiscal 2023 and requested them to cooperate with us in our responsible sourcing system and asked
them to adopt a similar policy as ours. In addition, we require suppliers to sign a letter of consent toour Responsible Minerals Control Policy before commencing transactions with them.

Has the Refiner established a company-wide communication mechanism to promote broad-based
employee participation and risk identification to management?
Comments and Demonstration of Compliance:
We have established a functional mailbox to which employees can send any concerns over theplatinum and palladium supply chain or a newly identified risk anonymously. In addition to this, weestablished a grievance mechanism on our website in 2019, where customers and other external
stakeholders may raise concerns on our platinum and palladium supply chain anonymously.
URL: https://www.mmc.co.jp/mmcg/form/merc/en/eiti-sslform.html

Step 2: Identify and assess risks in the supply chain
Compliance Statement with Requirement:
We have fully complied with Step 2: Identify and assess risks in the supply chain.
Does the Refiner have a process to identify risks in the supply chain?
Comments and Demonstration of Compliance:
We identify and assess risks in the supply chain. For every supplier of materials containing platinumand palladium, we have established a client database and evaluate the risk level according to our risk
assessment criteria. This process is now a formal requirement before entering any business
relationship with a platinum and palladium supplying counterparty. We review and revise as necessary
the list of Conflict-Affected and High-Risk Areas (CAHRAs) at least once a year based on information
available from the Export Trade Control Order, Financial Action Task Force and other external sources.
The latest revision was made in April 2024.

Does the Refiner assess risks in light of the standards of their due diligence system?
Comments and Demonstration of Compliance:
Supply chain due diligence comprising all measures required by the LPPM Responsible Platinum andPalladium Guidance is performed before entering a business relationship with any platinum andpalladium supplying counterpart. We shall perform enhanced due diligence for higher-risk supplychains, which include those where platinum or palladium originates from or transits via a conflictaffected or human rights abuse high-risk area. In addition, we conduct scrutiny and monitoring oftransactions undertaken through the course of the relationship.
Does the Refiner report risk assessment to the designated manager?
Comments and Demonstration of Compliance:
The Compliance officer provides a commentary report to the senior management on an annual basis.
The senior management must approve all new suppliers classified as high risk. Senior management
retains the ultimate control and responsibility for the platinum and palladium supply chain.
Step 3: Design and implement a management system to respond to identified risks
Compliance Statement with Requirement:
We have fully complied with Step 3: Design and implement a management system to respond toidentified risks.
Has the Refiner devised a strategy for risk management of an identified risk by either (i) mitigationof the risk while continuing to trade, (ii) mitigation of the risk while suspending trade or (iii)
disengagement from the risk?
Comments and Demonstration of Compliance:
We have a strategy to respond to the identified risk. We assess platinum- and palladium-bearing

materials and their suppliers. If it is discovered that there is a possibility of procuring raw materials fromhigh-risk suppliers, risk mitigation shall be undertaken, and in case it is impossible to mitigate risk, thetransaction shall be suspended or halted depending on the risk level.
If we are to resume such a transaction, it is necessary to acquire additional information or data thatnegate high-risk factors through a site visit. The transaction shall only be resumed after having approvalof the senior management.
Where a management strategy of risk mitigation is undertaken, it should include measurable steps
to be taken and achieved, monitoring of performance, periodic reassessment of risk and regular
reporting to designated senior management.
Comments and Demonstration of Compliance:
As a result of risk assessment on the platinum- and palladium-containing materials which we purchased
during the reporting year, we have determined that we did not purchase any materials which wereclassified as high risk in fiscal 2023.
Step 4: Arrange for an independent third-party audit of the supply chain due diligence
Compliance Statement with Requirement:
We have fully complied with Step 4: Arrange for an independent third-party audit of the supply chain
due diligence.
Comments and Demonstration of Compliance:
We engaged the services of the assurance provider KPMG AZSA Sustainability Co., Ltd. and their
independent limited assurance report is attached hereto.
URL:independentassurancereport_2023.pdf (mercompany.co.jp)
Step 5: Report on supply chain due diligence
Compliance Statement with Requirement:
We have fully complied with Step 5: Report on supply chain due diligence.
URL:compliancereport_2023.pdf (mercompany.co.jp)[Comments]
Further information and specific details of how MERC’s systems, procedures, processes and controls
have been implemented to align to the specific requirements in the LPPM Responsible Platinum andPalladium Guidance have been set out in our Responsible Minerals Control Policy which is available
on our company website: http://www.mercompany.co.jp/en/pdf/mineralscontrolpolicy.pdf.

Table 3: Management conclusion
Is the Refiner in compliance with the requirements of the LPPM Responsible Platinum and Palladium
Guidance for the reporting period?
Yes.

[Comments]

In conclusion, MERC implemented effective management systems, procedures, processes
and practices to conform to the requirements of the LPPM Responsible Platinum andPalladium Guidance, as explained above in Table 2, for the reporting year ended 31 March2024.

Table 4: Other report comments[Comments]
If users of this report wish to provide any feedback to MERC with respect to this report, they can contact
the Compliance Officer on osanaih@mmc.co.jp.