(Translation)
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. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translation.
Securities Code 5233
June 2, 2022
To Those Stockholders with Voting Rights
Masafumi Fushihara
President and Representative Director
Taiheiyo Cement Corporation
1-1-1, Koishikawa, Bunkyo-ku, TokyoNOTICE OF THE 24th ORDINARY GENERAL MEETING OF STOCKHOLDERS
You are cordially notified of the 24th Ordinary General Meeting of Stockholders of Taiheiyo Cement
Corporation (the “Company”). The meeting will be held as stated below.
From the perspective of preventing further spread of the novel coronavirus disease, we urge ourstockholders to exercise their voting rights in advance by paper ballot or via the Internet wherever
possible and refrain from attending the meeting regardless of their health conditions.
Please review the attached Reference Documents for the General Meeting of Stockholders, and either return
the Voting Rights Exercise Form with your selections towards proposals, or vote via the Internet.
1. Date and Time:

Wednesday, June 29, 2022 at 10:00 a.m.

2. Place:

Head office of the Company
1-1-1, Koishikawa, Bunkyo-ku, Tokyo

3. Agenda of the Meeting:
Matters to be reported: 1. Business Report, Consolidated Financial Statements for the 24th Fiscal Term(from April 1, 2021 to March 31, 2022) and results of audits by the Accounting
Auditor and the Board of Auditors of the Consolidated Financial Statements
2. Non-Consolidated Financial Statements for the 24th Fiscal Term (from April 1,
2021 to March 31, 2022)
Proposals to be resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Partial Amendments to the Articles of Incorporation
Proposal No. 3: Election of Nine Directors
Proposal No. 4: Election of One Corporate Auditor
Proposal No. 5: Election of One Substitute Corporate Auditor1

(Translation)
Notes:
 Of the documents required to be included in this notice of convocation, “Consolidated Statements of
Changes in Net Assets” and “Notes to the Consolidated Financial Statements” of the Consolidated
Financial Statements, and “Non-consolidated Statements of Changes in Net Assets” and “Notes to the Nonconsolidated Financial Statements” of the Non-consolidated Financial Statements are, pursuant to theprovisions of laws and regulations and the Articles of Incorporation of the Company, posted on the
Company’s website (https://www.taiheiyo-cement.co.jp), and are therefore not contained in the Appendix
attached to this notice of convocation.
The Consolidated Financial Statements and the Non-consolidated Financial Statements audited by
Corporate Auditors and the Accounting Auditor include “Consolidated Statements of Changes in Net
Assets,” “Notes to the Consolidated Financial Statements,” “Non-consolidated Statements of Changes in
Net Assets” and “Notes to the Non-consolidated Financial Statements” which are posted on the Company’s
website, in addition to each document included in the Appendix of this notice of convocation.
 Subsequent amendments to the Reference Documents for the General Meeting of Stockholders, theBusiness Report, the Consolidated and Non-Consolidated Financial Statements (if any) will be listed on
the Company’s website (https://www.taiheiyo-cement.co.jp).
 Please understand that in order to provide a video streaming service, video shooting will take place at themeeting.

2

(Translation)

Measures against Further Spread of the Novel Coronavirus Disease
We have taken the following measures to prevent further spread of the novel coronavirus disease. We ask
for your understanding and cooperation.
 Requests to our stockholders

From the perspective of preventing further spread of the novel coronavirus disease, we urge ourstockholders to exercise their voting rights in advance by paper ballot or via the Internet wherever
possible and refrain from attending the meeting regardless of their health conditions.



Other than the notice of convocation, documents such as summaries of financial results and integrated
reports are also posted on the Company’s website (https://www.taiheiyo-cement.co.jp). Access to awide variety of information is guaranteed without attending the meeting.



A portion of the meeting will be streamed via video on the Company’s website (https://www.taiheiyocement.co.jp) at a later date.

 Information for our stockholders who will attend the meeting
This General Meeting of Stockholders will have in place appropriate countermeasures to prevent
further spread of the novel coronavirus disease and will be operated as described below. We ask for yourunderstanding.
If, due to change of conditions up to the date of this General Meeting of Stockholders, there are
significant changes to these measures, details of the changes made will be posted on the Company’s website(https://www.taiheiyo-cement.co.jp).
Please wear a face mask when attending the meeting. You may be denied admission if you are notwearing a face mask. In addition, please cooperate in using the alcohol disinfectant solution, which
will be available at the venue.



We will measure your body temperature at the entrance. If you have a fever or show signs of ill
health, you may not be admitted to the venue.

The Company has cut down a significant number of seats as we must ensure adequate space between
stockholders. There may be a case where you may not be admitted even if you come to the venue.

All staff operating this General Meeting of Stockholders will be wearing a face mask.

In the perspective of shortening the time duration of this General Meeting of Stockholders, detailed
explanation for the matters to be reported and the proposals will be omitted at the meeting.

3

(Translation)
Voting Guide
If you are exercising your voting right prior to the Meeting:
Please review the attached Reference Documents for the General Meeting of Stockholders, and exercise yourvoting right by either of the following two methods.
(i) Exercise of voting rights by postal mail (paper ballot)- Please indicate your vote for or against the Proposals on the Voting Rights Exercise Form and send it
back, making sure that it will arrive by 5:00 p.m. on Tuesday, June 28, 2022 (Japan Standard Time).
- If you make no indication on the Voting Rights Exercise Form whether you are voting for or against the
Proposals, you shall be deemed to have voted FOR the Proposals.
(ii) Exercise of voting rights via the Internet, etc.
- Please exercise your voting right via the voting rights exercise site (https://www.web54.net) specified by
the Company before 5:00 p.m. on Tuesday, June 28, 2022 (Japan Standard Time).
- If you exercise your voting right via the Internet, etc. more than once, your final vote shall prevail.
If you are attending the Meeting:
Please hand in the enclosed Voting Rights Exercise Form at the front desk when you arrive at the venue.
If another stockholder is attending the Meeting on your behalf, he/she must submit a letter of proxy andyour Voting Rights Exercise Form as well as his/her Voting Rights Exercise Form at the front desk upon
arrival at the venue. (Please be advised that a proxy is limited to one person and must be anotherstockholder with the Company’s voting rights pursuant to the provisions of the Articles of Incorporation.)
If you vote both by postal mail and via the Internet, etc., the one received later shall prevail. If we receive
both on the same day, your vote cast via the Internet, etc. shall prevail.

4

(Translation)

Reference Documents for the General Meeting of Stockholders
Proposals and References
Proposal No. 1: Appropriation of Surplus
With respect to the year-end dividend for the term under review, the Company would like to pay out asfollows, in consideration of the business environment and our performance for the term under review, while
maintaining our basic policy of stable dividend payouts.
Matters concerning the year-end dividend(1) Type of Dividend
Cash(2) Matters concerning the distribution of dividends to stockholders and its total amount35 yen per share of common stock of the Company, for a total amount of 4,107,806,150 yen.
The annual dividend per share for the term under review will amount to 70 yen, which includes aninterim dividend already paid.
(3) Effective Date of Dividends from surplus
June 30, 20225

(Translation)
Proposal No. 2: Partial Amendments to the Articles of Incorporation
1. Reasons for the amendments(1) The amended provisions stipulated in the proviso to Article 1 of the supplementary provisions of the“Act Partially Amending the Companies Act” (Act No. 70 of 2019) will be enforced on September 1,
2022, and the system for providing general stockholder meeting materials in electronic format will be
implemented. As such, the Company proposes to make the following amendments to the Company’s
Articles of Incorporation.
(i) Article 16, Paragraph 1 of the proposed amendments stipulates that the Company shall takemeasures for electronic provision of information that is the content of Reference Documents for the
General Meeting of Stockholders, etc.
(ii) Article 16, Paragraph 2 of the proposed amendments establishes stipulations to limits on thescope of matters to be included in physical documents that are provided to stockholders who request
the provision of physical documents.
(iii) As the current provision on disclosure via the Internet and deemed provision of Reference
Documents for the General Meeting of Stockholders (Article 16 of the current Articles ofIncorporation) will no longer be necessary, this will be deleted.
(iv) Supplementary provisions will be established concerning the effective date, etc., in line with the
new establishment and deletion described above.
(2) As the Company expands its business, for the purpose of further strengthening the management
structure, the Company proposes to amend Article 23 of the current Articles of Incorporation to
enable the election of multiple Vice President and Directors by resolution of the Board of Directors.
2. Details of the proposed amendments
Details of the proposed amendments are stated below.
(Underlined parts are amended.)
Current Articles of Incorporation
Proposed Amendments(Disclosure via the Internet and Deemed Provisionof Reference Documents for the General Meeting of(Deleted)
Stockholders, etc.)
Article 16. The Company shall be deemed to haveprovided the stockholders with thenecessary information with respect to thematters to be stated or indicated in thereference documents for the general
meeting of stockholders, the business
reports, the non-consolidated financial
statements and the consolidated financial
statements, by disclosing suchinformation via the Internet inaccordance with the Ordinance of the
Ministry of Justice.
(Measures for Electronic Provision, etc.)
Article 16. In convening the general meetings ofstockholders, the Company shallelectronically provide information
contained in the reference documents forthe general meeting of stockholders, etc.
2. Of the matters to be provided
electronically, the Company may choose
not to include all or part of matters
stipulated in the Ordinance of the Ministryof Justice in the physical documents
provided to stockholders who maderequests for provision of physicaldocuments by the record date for voting
rights.
(Representative Directors and Directors with Title)(New)(Representative Directors and Directors with Title)
6

(Translation)
Current Articles of Incorporation
Article 23.
(omitted)2.

Article 23.

(omitted)2.

3. The Board of Directors may, by its
resolution, appoint one (1) Chairman, one(1) vice Chairman, and one (1) Vice
President.

Proposed Amendments(unchanged)(unchanged)

3. The Board of Directors may, by its
resolution, appoint one (1) Chairman,one (1) vice Chairman, and several Vice
Presidents.
Supplementary Provisions
Article 1. The deletion of Article 16 (Disclosure via
the Internet and Deemed Provision ofReference Documents for the General
Meeting of Stockholders, etc.) before
amendment and the establishment of new
Article 16 (Measures for Electronic
Provision, etc.) of the proposed
amendments shall take effect on
September 1, 2022, which is the date ofenforcement of the amended provisions
stipulated in the proviso to Article 1 of the
supplementary provisions of the Act
Partially Amending the Companies Act(Act No. 70 of 2019; the “Enforcement
Date”).

(New)

(New)

Article 2. Notwithstanding the provisions of thepreceding article, for the general meetingof stockholders to be held on a day within
six months from the Enforcement Date,
Article 16 (Measures for Electronic
Provision, etc.) of the Articles ofIncorporation of the proposed
amendments does not apply, and Article
16 (Disclosure via the Internet andDeemed Provision of Reference
Documents for the General Meeting ofStockholders, etc.) of the Articles ofIncorporation before amendment shallremain in force.

(New)

Article 3. These supplementary provisions shall bedeleted after the lapse of six months fromthe Enforcement Date or the lapse of threemonths from the date of the general
meeting of stockholders set forth in thepreceding article, whichever is later.

7

(Translation)
Proposal No. 3:

Election of Nine Directors

The term of office of all Nine Directors will expire at the close of this General Meeting of Stockholders.
Accordingly, the election of nine Directors, including three Outside Directors, is proposed.
The candidates for Director are as follows.
No.
1
2
3
4
5
6

7

8

9

Name
Reappointment
Masafumi Fushihara
Reappointment
Yuuichi Kitabayashi
Reappointment
Kunihiro Ando
Reappointment
Tetsuya Ohashi
New Candidate
Hideaki Asakura
New Candidate
Yukimasa Nakano
Reappointment
Yoshiko Koizumi
Outside Director
Independent Director
Reappointment
Shinhachiro Emori
Outside Director
Independent Director
Reappointment
Hideyuki Furikado
Outside Director
Independent Director

Current position at the Company
President and Representative Director
Vice President and Representative Director
Director and Senior Executive Officer
Director and Senior Executive Officer
Senior Executive Officer
Senior Executive Officer

Director

Director

Director8

(Translation)
No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1978
April 2007
May 2009

October 2010
April 2012

1

Joined Onoda Cement Co., Ltd.
General Manager, Business Promotion
Department of Environmental BusinessCompany of Taiheiyo Cement Corporation
General Manager, Sales Department ofEnvironmental Business Company
General Manager, Environmental Business
Development Department
Executive Officer and General Manager,
Environmental Business Development
Department
Managing Executive Officer
Director and Managing Executive Officer
Director, Managing Executive Officer andSenior General Manager, Cement Business
Division
Director, Senior Executive Officer and Senior
General Manager, Cement Business Division
President and Representative Director(to present)

Masafumi Fushihara April 2015
June 2015
Reappointment
April 2016
(May 18, 1954)
Attended 15 out of 15
meetings of the Board April 2017of Directors (100%)and will have served as April 2018
Director for 7 years at
close of this General
Meeting of
Reason for nominating Masafumi Fushihara as Director
Stockholders
Since 2015, Mr. Masafumi Fushihara has engaged inmanagement of the Company as Director, and currently serves as
President and Representative Director, after serving as Senior
General Manager of the Cement Business Division. He therefore
has a wealth of experience, achievements, and knowledge as amanager. The Company has judged that he is an appropriate
person to aim to continuously increase corporate value of theGroup as he leads the Group’s management, determines
important management matters, and supervises businessexecution, etc., and requests that he continue to be a candidate for
Director.

Note: No special relationship exists between the Company and Mr. Masafumi Fushihara.

9

Number ofshares of theCompany held

10,979(Translation)
No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1978
May 2009
April 2011
April 2013
June 2013
April 2016

2

Joined Nihon Cement Co., Ltd.
General Manager, Kamiiso Plant of Taiheiyo
Cement Corporation
Executive Officer and General Manager,
Production Department
Managing Executive Officer
Director and Managing Executive Officer
Representative Director and Senior Executive
Officer
Vice President and Representative Director
Overseeing Corporate Planning Department
Vice President and Representative Director
Overseeing Carbon Neutral Technology
Development Project Team and TCPI Renewal
Project Team (to present)

April 2017
Yuuichi Kitabayashi
Reappointment
April 2021
(June 2, 1955)
Attended 15 out of 15
meetings of the Boardof Directors (100%)and will have served as Reason for nominating Yuuichi Kitabayashi as Director
Director for 9 years at Since 2013, Mr. Yuuichi Kitabayashi has engaged in management
close of this General of the Company as Director, and since 2016, he has served as
Representative Director. He therefore has a wealth of experience,
Meeting ofachievements, and knowledge as a manager. Moreover, since
Stockholders
2021, he has been making significant contribution to thedevelopment of the Group as an officer overseeing the Carbon
Neutral Technology Development Project Team and TCPI
Renewal Project Team. The Company has judged that he is anappropriate person to aim to continuously increase corporate
value of the Group as he leads the Group’s management,
determines important management matters, and supervises
business execution, etc., and requests that he continue to be a
candidate for Director.

Note: No special relationship exists between the Company and Mr. Yuuichi Kitabayashi.

10

Number ofshares of theCompany held

10,070(Translation)
No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1980
April 2011
April 2013

3

Joined Onoda Cement Co., Ltd.
General Manager, Ofunato Plant of Taiheiyo
Cement Corporation
Executive Officer and General Manager, Oita
Plant
Executive Officer and General Manager,
Mineral Resources Business Department
Managing Executive Officer
Director and Managing Executive Officer
Director and Senior Executive Officer(to present)

April 2015
Kunihiro Ando
Reappointment
April 2016
June 2016(May 4, 1957)
Attended 15 out of 15 April 2020
meetings of the Boardof Directors (100%)and will have served as Reason for nominating Kunihiro Ando as Director
Director for 6 years at Since 2016, Mr. Kunihiro Ando has engaged in management ofclose of this General the Company as Director, and has been making significant
contribution to the development of the Group as an officer
Meeting ofoverseeing the mineral resources business and environmental
Stockholders
business. The Company has judged that he is an appropriate
person to aim to continuously increase corporate value of theGroup as he determines important management matters, andsupervises business execution, etc., and requests that he continue
to be a candidate for Director.

Note: No special relationship exists between the Company and Mr. Kunihiro Ando.

11

Number ofshares of theCompany held

9,698

(Translation)
No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)

April 1982
October 2010
April 2015
April 2016

4

Joined Onoda Cement Co., Ltd.
President of Taiheiyo Cement U.S.A., Inc.
General Manager, Business Development
Department, International Business Division of
Taiheiyo Cement Corporation
Executive Officer and General Manager,
Business Development Department,International Business Division
Managing Executive Officer
Director and Managing Executive Officer
Managing Executive Officer
Senior Executive Officer
Director and Senior Executive Officer(to present)

Tetsuya Ohashi
April 2019
Reappointment
June 2019(March 7, 1960)
June 2020
Attended 11 out of 11 April 2021
meetings of the Board June 2021
of Directors (100%)and will have served as
Director for 1 year at Reason for nominating Tetsuya Ohashi as Director
close of this General Since 2021, Mr. Tetsuya Ohashi has engaged in management of
Meeting of
the Company as Director, and has been making significant
Stockholders
contribution to the development of the Group as an officer
overseeing corporate planning and human resources divisions.
The Company has judged that he is an appropriate person to aim
to continuously increase corporate value of the Group as hedetermines important management matters, and supervises
business execution, etc., and requests that he continue to be a
candidate for Director.

Number ofshares of theCompany held

9,698

Notes:
1. Mr. Tetsuya Ohashi was newly appointed at the 23rd Ordinary General Meeting of Stockholders held on
June 29, 2021, and took office as Director on the same day. Accordingly, his attendance at meetings ofthe Board of Directors refers to those convened since he took office.
2. No special relationship exists between the Company and Mr. Tetsuya Ohashi.

12

(Translation)
No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1982
April 2011
April 2016

April 20185

Hideaki Asakura
New Candidate(November 20, 1959)

April 2019
June 2019
June 2020
April 2022

Joined Nihon Cement Co., Ltd.
General Director of Nghi Son Cement
Corporation
Executive Officer of Taiheiyo Cement
Corporation
General Director of Nghi Son Cement
Corporation
Executive Officer and General Manager, Sales
Department, Cement Business Division of
Taiheiyo Cement Corporation
Managing Executive Officer
Director and Managing Executive Officer
Managing Executive Officer
Senior Executive Officer (to present)

Reason for nominating Hideaki Asakura as Director
Since 2022, Mr. Hideaki Asakura has served as Senior Executive
Officer and has been making significant contribution to thedevelopment of the Group as an officer overseeing accounting &finance, legal, and auditing divisions, and real estate business.
The Company has judged that he is an appropriate person to aim
to continuously increase corporate value of the Group andrequests that he be a new candidate for Director.
Note: No special relationship exists between the Company and Mr. Hideaki Asakura.

13

Number ofshares of theCompany held

6,109

(Translation)
No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1982
April 2012
April 2015
April 2016
April 2017
April 2018
April 2020

6

Yukimasa Nakano
New Candidate(May 7, 1957)

April 2022

Joined Onoda Cement Co., Ltd.
General Manager, Chubu Hokuriku Branch of
Taiheiyo Cement Corporation
General Manager, Sales Department, Cement
Business Division
General Manager, Kyushu Branch
Executive Officer and General Manager,
Kyushu Branch
Executive Officer and General Manager,
Tokyo BranchManaging Executive Officer and Senior
General Manager, Cement Business Division
Senior Executive Officer and Senior General
Manager, Cement Business Division(to present)(Significant concurrent positions)
Outside Director, P.S. Mitsubishi Construction Co., Ltd.
Reason for nominating Yukimasa Nakano as Director
Since 2022, Mr. Yukimasa Nakano has served as Senior
Executive Officer and has been making significant contribution
to the development of the Group as an officer overseeing cementbusiness. The Company has judged that he is an appropriate
person to aim to continuously increase corporate value of theGroup and requests that he be a new candidate for Director.
Note: No special relationship exists between the Company and Mr. Yukimasa Nakano.

14

Number ofshares of theCompany held

5,289

(Translation)
No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1972

7

Registered as a lawyer (Daini Tokyo Bar
Association)
January 1980
Partner, Masuda and Ejiri Law Office(predecessor of Nishimura & Asahi)
January 2008
Counsel, Nishimura & Asahi
April 2009
Partner, City-Yuwa Partners
June 2015
Outside Director of Taiheiyo Cement Corporation
Outside Director, Dowa Holdings Co., Ltd.
Partner, City-Yuwa Partners
June 2016
Outside Director of Taiheiyo Cement Corporation
Outside Director, Dowa Holdings Co., Ltd.
Outside Corporate Auditor, Sumitomo BakeliteCo., Ltd.
Partner, City-Yuwa Partners
September 2017 Outside Director of Taiheiyo Cement Corporation
Outside Director, Dowa Holdings Co., Ltd.
Outside Corporate Auditor, Sumitomo BakeliteCo., Ltd.
Yoshiko Koizumi
Outside Corporate Auditor, Nippon Koei Co.,Ltd.
Candidate forPartner,City-Yuwa Partners
Outside Director
June
2019
OutsideDirector of Taiheiyo Cement Corporation
Reappointment
Outside Director, Dowa Holdings Co., Ltd.
(September 25, 1943)
Outside Corporate Auditor, Nippon Koei Co., Ltd.
Attended 14 out of 15
Partner, City-Yuwa Partners
meetings of the Board(to present)of Directors (93.3%)
and will have served (Significant concurrent positions)as Director for 7
Outside Director, Dowa Holdings Co., Ltd.
years at close of this Outside Corporate Auditor, Nippon Koei Co., Ltd.
General Meeting of Lawyer, Partner of City-Yuwa Partners
Stockholders
Reason for nominating Yoshiko Koizumi as Outside Director
and outline of expected roles
Although Ms. Yoshiko Koizumi has not engaged in corporate
management in the past other than serving as an outside officer oflisted companies, as a lawyer, she has a wealth of experience,achievements, and knowledge regarding corporate law. The
Company expects that she will provide precise recommendations
and advice from this perspective in the Board of Directors of theCompany, and promote the enhancement of the fairness,transparency and objectivity of the procedures for determining thenomination and compensation of Directors as Chairman of theNomination and Compensation Advisory Committee. The
Company has judged that she makes significant contribution to themonitoring and supervision of overall management from an
objective standpoint independent from the management team that
executes business, and requests that she continue to be a candidate
for Director.

Number ofshares of theCompany held

1,500

Notes:
1. Ms. Yoshiko Koizumi is nominated as an Outside Director.
2. The Company currently has an agreement with Ms. Yoshiko Koizumi, which limits her liability fordamages in respect of her responsibilities set out under Article 423, Paragraph 1 of the Companies Act,to the minimum limit of liability set out under Article 425, Paragraph 1 of the same provided that she
15

(Translation)
executes her duties in good faith and without gross negligence. If the election of Ms. Yoshiko Koizumi isapproved, the Company plans to continue said agreement with her.
3. Ms. Yoshiko Koizumi satisfies the Independence Criteria for Outside Officers defined by the Company,
and the Company has registered Ms. Yoshiko Koizumi as an independent director at Tokyo Stock
Exchange, Inc. and Securities Membership Corporation Fukuoka Stock Exchange. Additionally, theIndependence Criteria for Outside Officers defined by the Company is provided on page 21.
4. The Company receives legal advice as required from lawyers of City-Yuwa Partners other than Ms.
Yoshiko Koizumi, where she serves as a partner, but the Company has not concluded an advisory
agreement with the law firm. The advisory fees paid to the law firm are less than 1% of annual sales foreach of the Company and the law firm, and there is no special interest relationship. Additionally, there
are no special interest relationships between the Company and any of the significant concurrent positions.
5. No special relationship exists between the Company and Ms. Yoshiko Koizumi.

16

(Translation)

No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1975
June 2010
June 2011
June 2012

8

Number ofshares of theCompany
held

Joined Toyo Soda Manufacturing Co., Ltd.
(currently TOSOH CORPORATION)
Director of TOSOH CORPORATIONManaging Director of TOSOH CORPORATION
Representative Managing Director of TOSOHCORPORATION
President and Representative Director of TAIYOVINYL CORPORATION
Outside Director of Taiheiyo Cement Corporation(to present)

Shinhachiro Emori June 2015
Candidate for Outside
June 2020
Director
Reappointment(February 2, 1953)
Reason for nominating Shinhachiro Emori as Outside Director
Attended 15 out of 15 and outline of expected roles
meetings of the Board Mr. Shinhachiro Emori has a wealth of experience, achievements,of Directors (100%) and insight as a corporate manager. The Company expects that heand will have served as will provide precise recommendations and advice from thisDirector for 2 years at perspective in the Board of Directors of the Company, and strive forclose of this General the enhancement of the fairness, transparency and objectivity of the
Meeting ofprocedures for determining the nomination and compensation of
Stockholders
Directors as member of the Nomination and Compensation
Advisory Committee. The Company has judged that he makes
significant contribution to the monitoring and supervision of overallmanagement from an objective standpoint independent from the
management team that executes business, and requests that hecontinue to be a candidate for Director.

300

Notes:
1. Mr. Shinhachiro Emori is nominated as an Outside Director.
2. The Company currently has an agreement with Mr. Shinhachiro Emori, which limits his liability fordamages in respect of his responsibilities set out under Article 423, Paragraph 1 of the Companies Act, tothe minimum limit of liability set out under Article 425, Paragraph 1 of the same provided that he executes
his duties in good faith and without gross negligence. If the election of Mr. Shinhachiro Emori is approved,
the Company plans to continue said agreement with him.
3. Mr. Shinhachiro Emori satisfies the Independence Criteria for Outside Officers defined by the Company,
and the Company has registered Mr. Shinhachiro Emori as an independent director at Tokyo Stock
Exchange, Inc. and Securities Membership Corporation Fukuoka Stock Exchange. Additionally, theIndependence Criteria for Outside Officers defined by the Company is provided on page 21.
4. No special relationship exists between the Company and Mr. Shinhachiro Emori.

17

(Translation)

No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1977
July 2004

9

Joined Ministry of Finance
Deputy Director-General of Financial Services
AgencyJuly 2010
Director of Policy Research Institute, Ministry of
Finance
December 2013 Retired from Ministry of Finance
June 2014
Senior Managing Director of Trust Companies
Association of Japan
Hideyuki Furikado
June 2021
Outside Director of Taiheiyo Cement Corporation
Candidate for Outside(to present)
Director
Reappointment
Reason for nominating Hideyuki Furikado as Outside Director(August 3, 1954)
Attended 11 out of 11 and outline of expected roles
meetings of the Board Although Mr. Hideyuki Furikado has not engaged in corporateof Directors (100%) management in the past, as a government official, he has a wealthand will have served as of experience and extensive knowledge regarding public
Director for 1 year at administration. The Company expects that he will provide precise
close of this General recommendations and advice from this perspective in the Board of
Directors of the Company, and strive for the enhancement of the
Meeting of
fairness,transparency and objectivity of the procedures for
Stockholders
determining the nomination and compensation of Directors as
member of the Nomination and Compensation Advisory
Committee. The Company has judged that he will make significant
contribution to the monitoring and supervision of overallmanagement from an objective standpoint independent from the
management team that executes business, and requests that hecontinue to be a candidate for Director.

Number ofshares of theCompany
held

300

Notes:
1. Mr. Hideyuki Furikado is nominated as an Outside Director.
2. Mr. Hideyuki Furikado was newly appointed at the 23rd Ordinary General Meeting of Stockholders heldon June 29, 2021, and took office as Director on the same day. Accordingly, his attendance at meetingsof the Board of Directors refers to those convened since he took office.
3. The Company currently has an agreement with Mr. Hideyuki Furikado, which limits his liability fordamages in respect of his responsibilities set out under Article 423, Paragraph 1 of the Companies Act, tothe minimum limit of liability set out under Article 425, Paragraph 1 of the same provided that he executes
his duties in good faith and without gross negligence. If the election of Mr. Hideyuki Furikado is approved,
the Company plans to continue said agreement with him.
4. Mr. Hideyuki Furikado satisfies the Independence Criteria for Outside Officers defined by the Company,
and the Company has registered Mr. Hideyuki Furikado as an independent director at Tokyo Stock
Exchange, Inc. and Securities Membership Corporation Fukuoka Stock Exchange. Additionally, theIndependence Criteria for Outside Officers defined by the Company is provided on page 21.
5. No special relationship exists between the Company and Mr. Hideyuki Furikado.
Directors and officers liability insurance contract
The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3, Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damages that may arise when theinsured assumes liability for the execution of his or her duties as corporate officer. If the election ofcandidates is approved, each of them will be insured under the insurance contract. In addition, theCompany plans to renew said insurance contract in July 2022.

18

(Translation)(Reference) Expertise and experience held by candidates for Director

Name

Expertise and experience
Nomination andCompensation
Legal
Production
Attributes
GlobalSales
Finance
Corporate
Advisory
Risk
Technologies
Business
Marketing Accounting
Management
Committee
Management
Research

Masafumi
Fushihara
Yuuichi
Kitabayashi
Kunihiro
Ando
Tetsuya
Ohashi
HideakiAsakura
Yukimasa
NakanoOutsideDirector
Independent
Director
OutsideShinhachiro Director
Emori
Independent
Director
OutsideHideyuki Director
Furikado Independent
Director
YoshikoKoizumi

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●
●

●
●

●

●

●

●

●

●

19

●

●
●

●

●

●

●

●

●

●

●

●
(Chairman)●

(Translation)
Proposal No. 4:

Election of One Corporate Auditor

Mr. Shigeru Matsushima will resign from office at the close of this General Meeting of Stockholders.
Accordingly, the Company would like to propose the election of one Corporate Auditor.
The candidate for Corporate Auditor is as follows.
The Board of Auditors has previously given its approval to this proposal.
Name(Date of birth)

Career summary, position andsignificant concurrent positions
April 1980
April 2004
April 2013

Masahiro Karino
New Candidate(March 23, 1957)

April 2016
June 2016
April 2019
April 2022

Joined Nihon Cement Co., Ltd.
General Manager, Legal Department of Taiheiyo
Cement Corporation
Executive Officer and General Manager, Legal
Department
Managing Executive Officer
Director and Managing Executive Officer
Director and Senior Executive Officer
Director (to present)

Number ofshares of theCompany
held

10,198

Reason for nominating Masahiro Karino as Corporate Auditor
As an officer of the Company, Mr. Masahiro Karino has been in
charge of a wide range of operations in human resources, legal andauditing divisions, and has a wealth of experience and knowledge
accumulated through his duties. Aiming to sustainably improve thecorporate value of the Group, the Company has judged that he willappropriately audit the execution of Directors’ duties, and requests
that he be a new candidate for Corporate Auditor.

Notes:
1. If the election of Mr. Masahiro Karino is approved, the Company plans to enter into an agreement withhim, which limits his liability for damages in respect of his responsibilities set out under Article 423,
Paragraph 1 of the Companies Act, to the minimum limit of liability set out under Article 425, Paragraph
1 of the same provided that he executes his duties in good faith and without gross negligence.
2. The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3, Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damages that may arise when theinsured assumes liability for the execution of his or her duties as corporate officer. If the election of Mr.
Masahiro Karino is approved, he will be insured under the insurance contract. In addition, the Company
plans to renew said insurance contract in July 2022.
3. No special relationship exists between the Company and Mr. Masahiro Karino.

20

(Translation)
Proposal No. 5:

Election of One Substitute Corporate Auditor

In order to prepare for cases where a vacancy results in a shortfall in the number of Corporate Auditorsprescribed by laws, the Company proposes the election of one Substitute Corporate Auditor, to substitute for an
Outside Corporate Auditor.
The candidate for Substitute Corporate Auditor is as follows.
The Board of Auditors has previously given its approval to this proposal.
Name(Date of birth)

Career summary, position andsignificant concurrent positions
October 1983
August 1987
July 1999
August 2014

Number ofshares of theCompany held

Joined Tetsuzo Ota & Co. (currently Ernst & Young
ShinNihon LLC)
Registered as a Certified Public Accountant
Partner of Showa Ota & Co. (currently Ernst &Young ShinNihon LLC)
Retired from Ernst & Young ShinNihon LLC(Significant concurrent positions)
Toshihito Aoki
Certified Public Accountant
Candidate for Outside
Corporate Auditor
Reason for nominating Toshihito Aoki as substitute Outside
Corporate Auditor(April 7, 1954)
Although Mr. Toshihito Aoki has not engaged in corporate managementin the past, he has been practicing corporate accounting for many years,
and has a wealth of experience, achievements, and insight as a Certified
Public Accountant. The Company has judged that he can audit thebusiness execution of Directors from an objective, independent, and fairstandpoint, and requests that he continue to be a candidate for substituteOutside Corporate Auditor.

0

Notes:
1. Mr. Toshihito Aoki is nominated as a substitute Outside Corporate Auditor.
2. In the event that Mr. Toshihito Aoki takes office as an Outside Corporate Auditor, the Company plans toenter into an agreement with him, which would limit his liability for damages in respect of his
responsibilities set out under Article 423, Paragraph 1 of the Companies Act, to the minimum limit ofliability set out under Article 425, Paragraph 1 of the same provided that he executes his duties in goodfaith and without gross negligence.
3. The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3, Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damages that may arise when theinsured assumes liability for the execution of his or her duties as corporate officer. If Mr. Toshihito Aoki
assumes the office of Outside Corporate Auditor, he will be insured under the insurance contract. In
addition, the Company plans to renew said insurance contract in July 2022.
4. Mr. Toshihito Aoki satisfies the Independence Criteria for Outside Officers defined by the Company, andin the event that he takes office as an Outside Corporate Auditor, the Company plans to register him as
an independent corporate auditor at Tokyo Stock Exchange, Inc. and Securities Membership Corporation
Fukuoka Stock Exchange. Additionally, the Independence Criteria for Outside Officers defined by theCompany is provided on page 21.
5. No special relationship exists between the Company and Mr. Toshihito Aoki.

21

(Translation)(Reference)
Independence Criteria for Outside Officers
Outside officers are considered to be sufficiently independent from the Company if they do not fall under
any of the following items:
1. A person who is or was an executive (Note 1) of the Company or any of its subsidiaries;
2. A person who is or has recently been a person falling under any of the (1) through (7) below:(1) A major stockholder (Note 2) of the Company or an executive of a major stockholder of theCompany;(2) A party whose major business partner is the Company (Note 3) or an executive thereof;(3) A major business partner of the Company (Note 4) or an executive thereof;(4) A person belonging to an audit corporation that is the accounting auditor of the Company;(5) A party who receives a significant amount of donation or aid (Note 5) from the Company or an
executive thereof;(6) An individual who receives a significant amount of money (Note 6) or other property from theCompany as a lawyer, certified public accountant, tax accountant, consultant, etc., in addition to
the compensation that he/she receives from the Company as an outside officer; or(7) An executive of a legal entity, etc. that is a law firm, auditing firm, tax accounting firm, consulting
firm, etc., whose major business partner is the Company (Note 7).
3. A person who is a close relative (Note 8) of any of the persons listed in 1. and 2. above.
Notes:
1. An executive is an executive director, corporate officer, executive officer, or an employee who holds
a senior management position.
2. A major stockholder is a stockholder who holds 10% or more of the voting rights of the Company.
3. A party whose major business partner is the Company is a party who has carried out transactions with
the Company for an amount exceeding 2% of the annual consolidated total net sales for the latest
fiscal year of that party.
4. A major business partner of the Company is a party who has carried out transactions with the Company
for an amount exceeding 2% of the annual consolidated total net sales for the latest fiscal year of theCompany or a financial institution that has an outstanding balance of loans to the Company thatexceeds 2% of the consolidated total assets of the Company as of the end of the latest fiscal year of
the Company.
5. If the recipient is an individual, a significant amount of donation or aid means a donation or aid
exceeding an average of 10 million yen per year over the last three fiscal years. If the recipient is alegal entity, a significant amount of donation or aid means a donation or aid of an average of 10 million
yen per year over the last three fiscal years or 30% of the total annual expenses of said legal entity,
whichever the greater.
6. A significant amount of money means an amount of money exceeding an average of 10 million yen
per year over the last three fiscal years.
7. A legal entity, etc. whose major business partner is the Company is a legal entity, etc. that has carriedout transactions with the Company for an average amount per year over the last three years exceeding
2% of the annual consolidated total net sales of said legal entity, etc.
8. A close relative means a spouse or a relative within the second degree of kinship.

22

(Translation)(Appendix)

Business Report(April 1, 2021 - March 31, 2022)

1. Overview of the Company Group
1)

Business Progress and Results
During FY2021, although Japan’s economy has been recovering, the impact of the spread of the novel
coronavirus disease has prolonged due to its variants, and with on-and-off restrictions on social-economic
activities, consumer spending and housing investments, etc. were weak. Currently, the increasing price ofcoal and crude oil due to the situation between Russia and Ukraine has been a key factor in pressure on
the corporate earnings of manufacturers and others.
Regarding the world economy, while the balance between measures against the novel coronavirus
disease and social-economic activities has contributed to a recovery trend in the economies mainly inEuropean and North American countries, commodity prices continue to rise due to the lack of supply of
resources and materials. Moreover, as the situation between Russia and Ukraine has had a major impact
on not only the price of resources but also the price of food, it is anticipated that uncertainties surrounding
the world economy will escalate.
Under these circumstances, in FY2021, the Group's consolidated sales decreased ¥155,702 million
from the previous year to ¥708,201 million. Consolidated operating profit was ¥46,701 million, down
¥16,908 million, while consolidated ordinary profit was ¥50,193 million, down ¥15,550 million and profit
attributable to owners of parent decreased ¥17,828 million to ¥28,971 million.
As the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020),
etc. has been applied from the beginning of the fiscal year under review, the Group's consolidated sales
decreased ¥191,479 million, consolidated operating profit increased ¥23 million, and consolidated
ordinary profit and profit before income taxes each increased ¥26 million.
Reviews of operation by each business segment are as follows. The presented amounts are figures
before eliminating transactions between business segments.
Cement Business
Sales ¥463,214 million (down 25.4% year-on-year)
Operating Profit ¥24,188 million (down 41.4% year-on-year)
Domestic cement demand in both the private and public sectors has been sluggish, and in the private
sector, recovery has been weak since the spread of the novel coronavirus disease despite signs of asolid start for redevelopment projects in urban areas, while in the public sector there has been difficultyin making and winning bids. As a whole, domestic cement demand decreased 2.0% from the previous
year to 37.88 million tons, of which, imported cement decreased 47.9% from the previous year to 0.01
million tons. Total exports increased 3.3% from the previous year to 11.48 million tons.
Under these circumstances, the Taiheiyo Cement Group’s domestic cement sales by volume,
including consignment sales, decreased 3.0% from the previous year to 13.36 million tons, whilst
exports increased 9.7% to 4.14 million tons.
In addition, due to a deterioration in cost affairs such as a significant rise in the price of coal, which
is used in cement production, sales prices for cement were modified in January 2022.
At our US West Coast cement businesses, against a background of strong demand in housing, bothsales volumes and prices have increased from the previous year. The cement business in China saw adecrease in sales volumes from the previous year. The cement business in the Philippines and Vietnam
was affected by the further spread of the novel coronavirus disease from July onward and quarantine
measures in the communities, and domestic sales volumes in both countries decreased from theprevious year.
Due to the application of the Accounting Standard for Revenue Recognition, etc., consolidated sales
decreased by ¥175,269 million.
As a result of the above, consolidated sales decreased ¥157,830 million from the previous year to¥463,214 million, and consolidated operating profit decreased ¥17,138 million to ¥24,188 million.

23

(Translation)
Mineral Resources Business
Sales ¥77,182 million (up 1.8% year-on-year)
Operating Profit ¥6,034 million (down 0.5% year-on-year)
In the aggregates business, sales by volume in the Kanto region and the Tohoku region decreased.
In addition to increased sales by volume of limestone for domestic steel corporations in the mineralproducts business, intake of surplus construction soil in the geo-solutions business increased from theprevious year.
Due to the application of the Accounting Standard for Revenue Recognition, etc., consolidated sales
decreased by ¥2,080 million.
As a result, consolidated sales increased ¥1,405 million from the previous year to ¥77,182 million,
and consolidated operating profit decreased ¥36 million to ¥6,034 million.
Environmental Business
Sales ¥72,315 million (down 7.3% year-on-year)
Operating Profit ¥6,647 million (up 3.1% year-on-year)
Sales in coal processing, fuels, gypsum and calcium carbonate used for flue gas desulfurization
remain solid despite the spread of the novel coronavirus disease.
Due to the application of the Accounting Standard for Revenue Recognition, etc., consolidated sales
decreased by ¥16,955 million.
As a result, consolidated sales decreased ¥5,726 million from the previous year to ¥72,315 million,
and consolidated operating profit increased ¥200 million to ¥6,647 million.
Construction Materials Business
Sales ¥65,096 million (down 10.8% year-on-year)
Operating Profit ¥3,493 million (down 1.9% year-on-year)
Although ground improvement projects remain strong, sales for materials for shield tunnel
construction and ALC (Autoclaved Lightweight aerated Concrete) were sluggish.
Due to the application of the Accounting Standard for Revenue Recognition, etc., consolidated sales
decreased by ¥10,169 million.
As a result, consolidated sales decreased ¥7,906 million from the previous year to ¥65,096 million,
and consolidated operating profit decreased ¥71 million to ¥3,493 million.
Other Business
Sales ¥89,025 million (down 2.6% year-on-year)
Operating Profit ¥6,920 million (up 12.7% year-on-year)
Despite sales of the transportation and warehousing business being sluggish, the engineeringbusiness, chemical products business and data processing business remain solid.
Due to the application of the Accounting Standard for Revenue Recognition, etc., consolidated sales
decreased by ¥5,289 million.
As a result, consolidated sales decreased ¥2,379 million from the previous year to ¥89,025 million,
and consolidated operating profit increased ¥784 million to ¥6,920 million.
Sales and Operating Profit by Business Segment
Business Segment

Sales

CementMineral Resources
Environmental
Construction Materials
Other
Subtotal
Elimination or unallocated amounts
Total

463,214
77,182
72,31565,09689,025
766,835(58,633)
708,201

24

Year-on-yearincrease (decrease)(157,830)
1,405(5,726)(7,906)(2,379)(172,438)
16,736(155,702)(Unit: Millions of yen)
Operating
Year-on-year
profitincrease (decrease)
24,188(17,138)
6,034
(36)
6,647
200
3,493
(71)
6,920
784
47,285(16,260)
(583)
(647)
46,701(16,908)

(Translation)
2)

Capital Investments
The total amount of capital investments by the Group in the fiscal year under review increased ¥7,370
million from the previous year to ¥73,373 million, consisting of ¥46,361 million in the Cement Business,¥13,078 million in the Mineral Resources Business, ¥492 million in the Environmental Business, ¥2,326
million in the Construction Materials Business, ¥7,289 million in the Other Business and ¥3,825 million
in Group wide assets.

3)

Financing
The Company issued the 30th unsecured straight corporate bonds of ¥10,000 million in September
2021.

4)

Trends in Assets and Income
Item
Net sales(millions of yen)
Ordinary profit(millions of yen)
Profit attributable toowners of parent(millions of yen)
Profit per share(yen)
Total assets(millions of yen)
Net assets(millions of yen)

5)

21st fiscal year
ended
March 31, 201922nd fiscal year
ended
March 31, 2020

23rd fiscal year
ended
March 31, 2021

24th fiscal year
ended
March 31, 2022
(Current)

916,071884,350

863,903708,201

64,30660,54165,74450,19343,45239,15146,80028,971351.72319.89387.79245.801,034,428

1,032,923

1,044,227

1,103,007

450,645473,241

506,821544,799

Issues to be Addressed
Looking ahead, the Japanese economy is expected to continue to recover. However, fear over further
spread of the novel coronavirus disease due to its new variants, as well as concerns over increasing risesin the price of resources and food due to the situation between Russia and Ukraine have resulted in
growing uncertainties for a full economic recovery.
Under these circumstances, turning our attention to the Group’s business environment, in our core
domestic cement business, it is expected that a certain amount of demand will continue owing to theredevelopment investment in urban areas, disaster prevention and mitigation measures, countermeasureconstruction for national resilience, and construction related to Linear Chuo Shinkansen, etc. However,the Japanese government has announced, as additional sanction on Russia, that it will phase out importof Russia-produced coal. While the Company has been working on the procurement of coal from othercountries, it is possible the price of coal will further rise due to lack of supply on a global scale, etc. If
current circumstances prolong, it will have a major impact on the Company’s performance, and it will benecessary that we continue to adjust our prices for cement in accordance with rising coal prices.
Moreover, it should be noted that due to impact of the novel coronavirus disease and rising commodity
prices, there are concerns over demand for cement being pushed down due to the possibility of shrinking
capital investments and housing investments, as well as the impact of worsening labor shortage in theconstruction industry and the logistics industry, and the aging of the population.
Additionally, although it is expected that the economy in the US will continue to recover on the backof strong consumer spending, housing investment and the employment environment, concerns overprolongation of high inflation and trends ahead of midterm elections this Autumn must be monitored
closely.
Under these circumstances, the Group aims “to become an enterprise group that utilizes all of its
capabilities to provide a sense of safety and security to society in the Pacific Rim region,” within theframework of our vision and direction targeting the mid-2020s. The Group is working to achieve this goalin three steps. The Group has positioned 23 Medium-Term Management Plan which covers the three-year
period from FY2021 until FY2023 as its third step. In FY 2022, the second year of the Medium-Term
Management Plan, the Group will actively work toward with the following management tasks.
25

(Translation)
Basic Policies of 23 Medium-Term Management Plan
In the 23 Medium-Term Management Plan, the Group aims to establish a new business model that
only the Company can achieve, in which all the businesses of the Group function comprehensively andin an integrated manner, that is, to become an “overwhelming leading company” in accordance with thefollowing basic policies.
(i) Establish an enterprise group that keeps moving forward to development.
(ii) Contribute to establishment of a safe and secure society as a member of the social infrastructureindustry.
(iii) Strengthen the earnings base and steadily implement investment in growth areas.
Efforts to Achieve Carbon Neutrality
The Group has formulated the roadmap for technology development for “Carbon Neutral Strategy
2050” and concrete measures for the 2030 mid-term targets, established technologies ready for public
implementation at an early stage as a global front runner, and aims to achieve net carbon neutrality by
2050 throughout our supply chain.
Business Strategies< Cement (Domestic) >In a market environment where large growth in domestic cement demand cannot be expected, theGroup will maximize its overall capacity and provide a stable supply to national projects, etc., and actively
work toward the achievement of carbon neutrality by applying a variety of measures.
< Cement (Overseas) >The Group will work to strengthen its business in North America, establish a new business portfolioin Asia, expand its business in Southeast Asia, restructure its logistics network and expand its tradingbusiness throughout the Pacific Rim including Indonesia, which will be the new trading hub.
< Mineral Resources >The Group will promote the establishment of a foundation for stable long-term supply of resources
such as limestone, which it has in abundance, demonstrate the overall capacity of the Group, increase theearnings of existing core businesses, and focus on development of new businesses to enable sustainable
development.
< Environmental Business >The Group will accurately grasp changes in the external environment and expand into new businesses
that meet the trends of the times under the keywords “climate change response,” “digital,” “materials”
and “energy,” as well as establish a new resource recycling model and work to contribute to realizing acarbon-neutral society.
< Construction Materials >By strengthening market competitiveness, the Group will improve the profitability of its existing businesses,
and actively develop new business areas that can generate synergies within the Group.
< Other (Individual companies) >While strengthening the profitability of individual companies, the Group will work to establish a new
business model that can be expected to generate synergies within the Group.
Research & Development Strategies
In order to contribute to society and the sustainable growth of the Group, the Group will positionand eagerly pursue technological development for the achievement of carbon neutrality as its biggest
theme, and will focus particularly on the deepening of its fundamental technologies, development ofrecycling technologies, innovative materials, and development of technologies for the future.
Strengthening Management Foundations
The Group will seek to improve corporate value through continuous efforts to enhance and strengthen
corporate governance. In addition, the Group will steadily work toward the realization of the threequantitative targets (Prevention of Accidents, Reduction of Greenhouse Gas Emissions and Workplace
Diversity) as prescribed in the “CSR Objectives for 2025.”
The Group looks forward to your continued support and cooperation as our stockholder.
26

(Translation)
6)

Material Subsidiaries
Company name
DC Co., Ltd.
Clion Co., Ltd.
Myojyo Cement Co., Ltd.
Taiheiyo Materials
Corporation
CalPortland Company

The Company’s
percentage of equity
Principal businessparticipation
100
Manufacturing and sale of cement
Manufacturing and sale of autoclaved lightweight
99.2
aerated concrete (ALC)
100
Manufacturing and sale of cement
Manufacturing and sale of various construction
100
materials such as admixture and non-shrink grout
Manufacturing and sale of cement, ready-mixed
100
concrete, etc. in the United States

Jiangnan-Onoda Cement Co.,
88.5
Manufacturing and sale of cement in China
Ltd.
Dalian Onoda Cement Co.,
84.8
Manufacturing and sale of cement in China
Ltd.
Nghi Son Cement
65.0
Manufacturing and sale of cement in Vietnam
Corporation
Manufacturing and sale of cement in the
Taiheiyo Cement Philippines,
100
Philippines
Inc.
(Note) The Company’s percentage of equity participation includes indirect ownership throughsubsidiaries.
7)

Principal Businesses
Businesses of the Taiheiyo Cement Group are divided into Cement Business Segment, Mineral
Resources Business Segment, Environmental Business Segment, Construction Materials Business
Segment and Other Business Segment, and mainly consist of the following.
(i) Cement Business
Ordinary Portland cement and othervarious types of cement, white cement,
construction – material – purpose
cement, ecocement, cement-basedsolidifying agent, ready-mixed concrete,admixture, etc.

(iii) Environmental Business
Waste recycling business (recycling into cement
raw materials and fuels), flue gas desulfurizationmaterials, recycled products, chemicals, water-related
business, etc.
(iv) Construction Materials Business
Concrete products, construction materials, civilengineering and construction work, etc.

(ii) Mineral Resources Business
Aggregates, limestone, white marble, quicklime,
silica, heavy metal immobilizer, surplus
construction soil recycling business, etc.

(v) Other Business
Real estate business, engineering business, dataprocessing
business,financebusiness,transportation and warehousing business, chemical
products business, sports business, power supply
business, etc.

27

(Translation)
8)

Principal Business Locations(i) The Company’s principal business locations and plants
Head Office:1-1-1, Koishikawa, Bunkyo-ku, Tokyo, Japan
Central Research Laboratory: Sakura City, Chiba Prefecture, Japan
Branches and Plants
Branches
Name
Hokkaido Branch
Tohoku BranchTokyo Branch
Kanto Branch
Chubu Hokuriku
BranchKansai Shikoku
BranchChugoku Branch
Kyushu Branch

PlantsLocation
Sapporo City, Hokkaido
Prefecture
Sendai City, Miyagi
Prefecture
Minato-ku, Tokyo
Takasaki City, Gunma
Prefecture
Nagoya City, Aichi
Prefecture
Osaka City, Osaka
Prefecture
Hiroshima City, Hiroshima
Prefecture
Fukuoka City, Fukuoka
Prefecture

Name
Kamiiso Plant
Ofunato Plant
Kumagaya
Plant
Saitama Plant
Fujiwara Plant
Oita Plant

Location
Hokuto City, Hokkaido
Prefecture
Ofunato City, Iwate
Prefecture
Kumagaya City, Saitama
Prefecture
Hidaka City, Saitama
Prefecture
Inabe City, Mie
Prefecture
Tsukumi City, Oita
Prefecture(ii) Principal business locations of material subsidiaries
Name
Location
DC Co., Ltd.
Kawasaki City, Kanagawa Prefecture
Clion Co., Ltd.
Koto-ku, Tokyo
Myojyo Cement Co., Ltd.
Itoigawa City, Niigata Prefecture
Taiheiyo Materials Corporation
Kita-ku, Tokyo
CalPortland Company
California, USA
Jiangnan-Onoda Cement Co., Ltd.
Jiangsu, China
Dalian Onoda Cement Co., Ltd.
Liaoning, China
Nghi Son Cement Corporation
Tinh Thanh Hoa, Vietnam
Taiheiyo Cement Philippines, Inc.
Cebu, Philippines28

(Translation)
9)

Employees
Business Segment
Number of Employees (persons)Cement7,688
Mineral Resources
975
Environmental
161
Construction Materials
1,245
Other
2,175
Group-wide (common)
298
Total
12,542(Notes) 1. The number of employees refers to the number of persons on the payroll.
2. The above includes the following number of employees of the Company. The number of
employees stated below does not include employees on temporary retirement, seconded
employees, etc. (491 persons).
Number of
Increase or decrease from
Average age
Average length of
employees
previous year
service
1,874 persons
Increase of 36 persons
40.4 years old
18.1 years

10)

Major Lenders and Amount of Borrowings

LenderMizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation

Outstanding borrowings (millions of yen)
28,146
21,67429

(Translation)

2. Shares of the Company
1) Total number of shares authorized to be issued

197,730,800 shares2) Total number of shares outstanding

121,985,078 shares
Note: 1. On May 31, 2021, 5,155,200 shares oftreasury stock were cancelled.
2. Total number of shares outstanding
includes 4,619,188 shares of treasurystock3) Number of stockholders

52,322 persons

4) Major stockholders
Stockholder name

Holding

Stockholding ratio(thousand shares)(%)

THE MASTER TRUST BANK OF JAPAN, LTD. (TRUSTACCOUNT)

18,982

16.1

CUSTODY BANK OF JAPAN, LTD. (TRUSTACCOUNT)

6,304

5.3

JP MORGAN CHASE BANK 385632

4,460

3.8

STATE STREET BANK AND TRUST COMPANY
505001

4,174

3.5

GOLDMAN SACHS INTERNATIONAL

2,852

2.4

JP MORGAN CHASE BANK 380072

2,394

2.0

MIZUHO BANK, LTD.

2,000

1.7

NORTHERN TRUST CO. (AVFC) RE
U.S. TAX EXEMPTED PENSION FUNDS

1,902

1.6

STATE STREET BANK AND TRUST COMPANY
505103

1,659

1.4

MEIJI YASUDA LIFE INSURANCE COMPANY

1,527

1.3

(Notes)1. The Company holds 4,619,188 shares of treasury stock.
2. The stockholding ratio is calculated by excluding treasury stock.

5) Shares granted to Company Officers during the fiscal year under review as consideration for their
execution of business
Officerclassification
Directors (excluding Outside
Directors)

Number of shares

Number of persons granted to18,422 shares

6 persons30

(Translation)

3. Company Officers
1)

Name, etc. of Directors and Corporate Auditors
Position

Name

Chairman and Director

Shuji Fukuda

President and Representative
Director

Masafumi Fushihara

Vice President and Representative
Director

Yuuichi Kitabayashi

Director

Masahiro Karino

Director

Kunihiro Ando

Director

Tetsuya Ohashi

Director

Yoshiko Koizumi

Director

Shinhachiro Emori

Director

Hideyuki Furikado

Corporate Auditor (Standing)Shigeru Matsushima

Corporate Auditor (Standing)

Katsuhide Fukuhara
Wakako Mitani

Significant concurrent positions
Outside Director (Member of Audit &Supervisory Committee) of Sapporo
Holdings Limited
Outside Audit & Supervisory Board
Member of TOBU RAILWAY CO., LTD.

Overseeing Carbon Neutral Technology
Development Project Team and TCPI
Renewal Project Team

Lawyer, Partner of City-Yuwa Partners
Outside Director of Dowa Holdings Co.,Ltd.
Outside Corporate Auditor of Nippon
Koei Co., Ltd.

Corporate Auditor(Name on family
registration:
Wakako Akamatsu)

Lawyer, Partner of TANABE &PARTNERS

Corporate Auditor

Yoshio Fujima

Certified Public Accountant(Notes)

1.
2.
3.

4.
5.
6.
7.

8.

Directors Yoshiko Koizumi, Shinhachiro Emori and Hideyuki Furikado are Outside Directors.
Corporate Auditors Wakako Mitani and Yoshio Fujima are Outside Corporate Auditors.
Directors Tetsuya Ohashi and Hideyuki Furikado, and Corporate Auditor Katsuhide Fukuhara was newly
elected at the 23rd Ordinary General Meeting of Stockholders held on June 29, 2021, and took office on thesame day.
Corporate Auditor Toshihide Nishimura retired from office at the close of the 23rd Ordinary General Meetingof Stockholders held on June 29, 2021.
Corporate Auditors Shigeru Matsushima and Katsuhide Fukuhara have hands-on experience in the business
management division of the Company and have considerable financial and accounting expertise.
Corporate Auditor Yoshio Fujima has the qualification of Certified Public Accountant and has considerable
financial and accounting expertise.
The Company receives legal advice as required from lawyers of City-Yuwa Partners other than Director
Yoshiko Koizumi, where she holds a significant concurrent position, but the Company has not concluded
an advisory agreement with the law firm. The advisory fees paid to the law firm is less than 1% of net sales
for each of the Company and the law firm, and there is no special interest relationship. Additionally, there
are no special interest relationships between the Company and any of the significant concurrent positionsof the other Outside Executives.
The Company has registered Directors Yoshiko Koizumi, Shinhachiro Emori and Hideyuki Furikado as
independent directors and Corporate Auditors Wakako Mitani and Yoshio Fujima as independent corporate31

(Translation)
auditors at Tokyo Stock Exchange, Inc. and Securities Membership Corporation Fukuoka Stock Exchange.
The following executive changes were made on April 1, 2022:
Position, assignment and significant concurrent positions
Name
BeforeAfter
Shuji Fukuda
Chairman and Director
Director and Executive Adviser
10. The Company has introduced an executive officer system; executive officers as of April 1, 2022 are as
follows.
Position
Name
Assignment
Overseeing Mining Department and Mineral
Senior Executive Officer
Kunihiro Ando*
Resources Business Department
Overseeing Corporate Planning Department andSenior Executive Officer
Tetsuya Ohashi*
Human Resources Department
Overseeing Accounting & Finance Department,
Senior Executive Officer
Hideaki Asakura
Legal Department, Internal Auditing Department
and Real Estate Business Department
Senior General Manager of Cement Business
Senior Executive Officer
Yukimasa Nakano
Division
Senior General Manager of International Business
Managing Executive
Yoshifumi Taura
Officer
Division
9.

Managing Executive
Officer

Takayoshi Okamura

Managing Executive
Officer

Koshiro Hidaka

Managing Executive
Officer

Masaki Takahashi

Managing Executive
Officer

Shinji FukamiManaging Executive
Officer

Isao Matsui

Executive Officer

Naoyuki Kira

Executive Officer

Hideki Mori

Executive Officer

Yoshihito Izawa

Executive Officer

Terumasa Kitamura

Executive Officer

Hiroyuki Takano

Executive Officer

Masahiro Ban

Executive Officer

Kenichi Hirata

Executive Officer

Michitomo Beppu

Executive Officer

Kazuhiko Ichizawa

Executive Officer

Yusuke Nemoto

Executive Officer

Tsuyoshi Hara

Executive Officer

Hideto Sasaki

Overseeing Intellectual Property Department andCentral Research Laboratory
Overseeing Production Department andMaintenance & Engineering Department
Overseeing General Affairs Department,
Construction Materials Business Department andBusiness Planning & Administration Department
Overseeing Secretarial Department, Purchasing
Department and Environmental Business
Development Department
Deputy Senior General Manager of International
Business Division
General Director of Nghi Son Cement Corporation
General Manager of Sales Department, Cement
Business Division
General Manager of Tokyo Branch
General Director of Taiheiyo Cement Philippines,
Inc.
General Manager of Production Department
General Manager of Central Research Laboratory
General Manager of Accounting & Finance
Department
General Manager of Mining Department
General Manager of Environmental Business
Development Department
General Manager of Kamiiso Plant
General Manager of Human Resources
Department
General Manager of Business Development
Department, International Business Division
Senior Adviser of Chichibu Mining Co., Ltd.

Persons who concurrently serve as Directors are marked with an asterisk (*).

32

(Translation)
2)

Overview of Limited Liability Agreement
The Company has concluded an agreement with each of Directors Shuji Fukuda, Yoshiko Koizumi,
Shinhachiro Emori, Hideyuki Furikado and each Corporate Auditor, which limits his/her liability fordamages in respect of his/her responsibilities set out under Article 423, Paragraph 1 of the Companies
Act, to the minimum limit of liability set out under Article 425, Paragraph 1 of the same provided thathe/she executes his/her duties in good faith and without gross negligence.

3)

Directors and Officers Liability Insurance Contract
The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3 of the Companies Act, that insures all Directors, Corporate Auditors and Executive Officers withan insurance company. Said insurance contract covers damages that may arise when the insured assumes
liability for the execution of his or her duties as corporate officer.

4)Compensation, etc. to Directors and Corporate Auditors for the Current Fiscal Year(i) Matters concerning the policy for determining compensation, etc. for individual Directors
The Company has determined policy for determining compensation, etc. for individual Directors at themeeting of Board of Directors. When determining compensation for Directors, the Company will clarify
management responsibilities, raise awareness of improving business performance, and strengthen the link
between the compensation and stockholders’ benefit, while offering the Directors incentives to achieve
improvement of the long-term business performance and corporate value of the Group and sharing moreof that value with the stockholders. The outline of Directors’ compensation determination process is asfollows: The Company establishes the Nomination and Compensation Advisory Committee, the majorityof whose members are Outside Directors and is chaired by an Outside Director, as an advisory body to
the Board of Directors. From the view of enhancing the fairness, transparency, and objectivity, thecompensation shall be discussed by said Committee, which reports to the Board of Directors, and shallbe determined at the discretion of Representative Directors at the Board of Directors meeting, within therange of suitable amount based on a resolution of the General Meeting of Stockholders and the regulationsof the Company, while also respecting the contents of report of the Nomination and Compensation
Advisory Committee to the maximum extent possible.
The compensation plan for Directors (excluding Outside Directors) consists of fixed compensation,
stock compensation and performance-linked compensation whereas the compensation plan for Outside
Directors consists only of fixed compensation.
・The amounts of fixed compensation and stock compensation are determined according to the rank ofposition.
・The amount of the performance-linked compensation of Directors (excluding Outside Directors) is
calculated by multiplying the amount calculated as profit attributable to owners of parent for thecurrent fiscal year times 1% (an upper limit of ¥400 million) by the multiplier assigned to eachposition. It is paid starting from July in the fiscal year following the end of the current fiscal year.
However, this amount can be reduced in consideration of the financial performance of the Company orother circumstances. In principle, performance-linked compensation is not paid if the amount ofannual dividend for the current fiscal year is less than ¥30 per share.
・Stock compensation is paid every year by granting restricted stock according to the rank of position.
The transfer restrictions will be canceled when a Director retires.
・The composition ratio of fixed compensation, stock compensation and performance-linked
compensation in the amount of compensation is approximately 90% to 45% for fixed compensation,
approximately 10% to 15% for stock compensation, and 0% to approximately 40% for performancelinked compensation, depending on profit attributable to owners of parent.
・Profit attributable to owners of parent was chosen as an indicator with an aim to strengthen the link
between the compensation and stockholders’ benefit. Performance-linked compensation makes up
32% of the total compensation for the current fiscal year. The actual result of profit attributable toowners of parent for FY2020, which serves as a basis for calculating the performance-linked
compensation for the current fiscal year, was ¥46.8 billion.
Based on the above, the Board of Directors of the Company has judged that the content of compensation,etc. for individual Director for FY2021 is in line with the determination policy.
(ii) Matters concerning the policy for determining compensation, etc. for individual Corporate Auditor
The compensation plans for Corporate Auditors of the Company consist only of fixed compensation.
The amounts of compensation of individual Corporate Auditors are determined by consultation among
Corporate Auditors.
(iii) Matters concerning resolutions of the General Meetings of Stockholders regarding compensation, etc.
33

(Translation)
for Directors and Corporate Auditors
The upper limits of compensation for Directors and Corporate Auditors are separately set by aresolution of the General Meeting of Stockholders. The date of resolution of the General Meeting ofStockholders on the compensation for Directors was June 29, 2021, and the number of Directors after
said General Meeting of Stockholders was nine (including three Outside Directors). The date of resolution
on the compensation for Corporate Auditors was June 29, 2000, and the number of Corporate Auditors
after said General Meeting of Stockholders was four. The content of the resolution of the General Meetingof Stockholders on the compensation for Directors is such that the amount shall be not more than ¥1,200
million per year (including an amount of ¥100 million for Outside Directors), and not more than ¥200
million yen per year (200,000 shares per year) shall be provided to Directors other than Outside Directors
as restricted stock compensation within the scope of the said compensation amount. The content of theresolution on the compensation for Corporate Auditors is such that the amount shall be not more than ¥13
million per month.
(iv) Matters concerning delegation related to determination of compensation, etc. for individual Director
Since it is appropriate that the amount of compensation for each Director is determined byRepresentative Director who supervises the overall business, the Company has made a resolution to leave
the determination of the amount of compensation, etc. for individual Director to the discretion of President
and Representative Director Masafumi Fushihara and Vice President and Representative Director(Overseeing Carbon Neutral Technology Development Project Team and TCPI Renewal Project Team)
Yuuichi Kitabayashi at the Board of Directors meeting including Outside Directors held in June 2021,
within the range of suitable amount based on a resolution of the General Meeting of Stockholders and theregulations of the Company.
(v) Total Amount of Compensation, etc. to Directors and Corporate Auditors
Total amount
Total amount by type of compensation, etc.
of(millions of yen)
Number ofcompensation,
OfficertargetNonPerformanceetc.
classification
Officers
Fixedmonetary
linked(millions of(persons)
compensationcompensation,compensation
yen)
etc.
Directors
512
327
150
35
9
Corporate
72
72
5
Auditors(of which,
(63)
(63)
(-)
(-)
(5)
OutsideOfficers)(Note)The number of persons paid above includes one Corporate Auditor who retired or resigned
at the close of the 23rd Ordinary General Meeting of Stockholders held on June 29, 2021.

34

(Translation)
5)

Outside Officers(i) Main Activities in Fiscal Year under Review
Attendance atAttendance at
PositionNamemeetings of Board
meetings of Board ofof Directors
Auditors

Comment status

Made comments as appropriate
at the meetings of the Board of
YoshikoDirectors based on her wealth of
Director
14 out of 15 meetings
experience and insight inKoizumicorporate management mainly
as a lawyer.
Made comments as appropriate
at the meetings of the Board of
Shinhachiro
Directors based on his wealth of
Director
15 out of 15 meetings
experience
mainlyasa
Emorimanagement executive of abusiness corporation.
Made comments as appropriate
at the meetings of the Board ofHideyuki
Director
11 out of 11 meetings
Directors based on his wealth of
Furikado
experience
mainlyasagovernment official.
Made comments as appropriate
at the meetings of the Board of
Directors and meetings of the
Corporate Wakako
15 out of 15 meetings 16 out of 16 meetings Board of Auditors based on her
AuditorMitaniwealth of experience and insightincorporate
management
mainly as a lawyer.
Made comments as appropriate
at the meetings of the Board of
Directors and meetings of theBoard of Auditors based on his
Corporate Yoshio
14 out of 15 meetings 16 out of 16 meetings
wealth of experience and insight
AuditorFujimain corporate accounting mainlyasaCertifiedPublicAccountant.
(Note)
During the fiscal year under review, 15 Board of Directors meetings were held. Eleven Board of
Directors meetings were held after Director Hideyuki Furikado took office.

35

(Translation)(ii) Outline of duties performed by Outside Directors regarding their expected roles
As a lawyer, she has a wealth of experience, achievements, andknowledge in corporate legal affairs. The Company expects that
she will fulfill monitoring and supervision functions from thisperspective. She has provided active statements such as asking
questions and making suggestions regarding risk management
system, new business projects of the Group, etc. based on thisDirector
Yoshiko Koizumi
perspective, and has played appropriate roles including
supervision and advice on business execution as Outside Directorof the Company. She also attends the Nomination andCompensation Advisory Committee as the Chairman of suchcommittee, and has played a leading role especially in theconsideration process of determining compensations as the
Chairman of such committee.
As a manager of a business corporation, he has a wealth ofexperience, achievements, and knowledge. The Company expects
that he will fulfill monitoring and supervision functions from thisperspective. He has provided active statements such as asking
questions and making suggestions regarding overseas investment,
capital investment plans of the Group, etc. based on thisDirector
Shinhachiro Emori perspective, and has played appropriate roles including
supervision and advice on business execution as Outside Directorof the Company. He also attends the Nomination andCompensation Advisory Committee as a member of suchcommittee, and has provided active statements especially in theconsideration process of determining compensations as a memberof such committee.
As a government official, he has a wealth of experience,achievements, and knowledge regarding public administration. The
Company expects that he will fulfill monitoring and supervisionfunctions from this perspective. He has provided active statements
such as asking questions and making suggestions regarding
financial strategies, overseas investment of the Group, etc. based
Director
Hideyuki Furikado on this perspective, and has played appropriate roles including
supervision and advice on business execution as Outside Directorof the Company. He also attends the Nomination andCompensation Advisory Committee as a member of suchcommittee, and has provided active statements especially in theconsideration process of determining compensations as a memberof such committee.

36

(Translation)

4. Accounting Auditor
1)

Name of the Company’s Accounting Auditor
KPMG AZSA LLC

2)Accounting Auditor’s Compensation, etc. in Fiscal Year under Review¥ 113 million(Notes) 1. Under the audit agreement between the Company and its Accounting Auditor, the amount ofcompensation for audits pursuant to the Companies Act and audits pursuant to the Financial
Instruments and Exchange Act are not distinguished from each other and are indistinguishable
in practice. Therefore, the above amount includes compensation, etc. for audits pursuant to the
Financial Instruments and Exchange Act.
2. The Board of Auditors of the Company, in observance of the “Practical Guidelines for
Cooperation with Accounting Auditors” published by the Japan Audit & Supervisory Board
Members Association, has confirmed the time taken to audit each audit item, trends in audit
fees, and the status of execution of duties of the Accounting Auditor, and upon considering theappropriateness of the audit plan and appropriateness of audit fees for the fiscal year underreview, agrees to the fees, etc., of the Accounting Auditor under Article 399, Paragraph 1 of
the Companies Act.

3)

Description of Non-audit Services to the Company involving Payment of Consideration to
Accounting Auditor
The Company entrusts to the Accounting Auditor the service of preparing comfort letters forissuance of corporate bonds, which are services other than the services set forth in Article 2,
Paragraph 1 of the Certified Public Accountants Act (non-audit services), and pays consideration
for said service.

4)

Policy for Determination of Dismissal or Non-reappointment of Accounting Auditor
1) If the Accounting Auditor is deemed to correspond to any of the matters set forth in the items of
Article 340, Paragraph 1 of the Companies Act, the Board of Auditors will dismiss the Accounting
Auditor subject to the consent of all Corporate Auditors, in which case the Corporate Auditor selectedby the Board of Auditors will report the dismissal and the reason for the dismissal at the first Ordinary
General Meeting of Stockholders held after the dismissal.
2) The Board of Directors will specify the dismissal or non-reappointment of the Accounting Auditor
as an agenda of the General Meeting of Stockholders based on the Board of Auditors’ resolution incases where severe problems have arisen in the Company’s audit operations and in other such cases.

5)

Total Amount of Money and Other Property Benefits Payable to Accounting Auditor by theCompany and its Subsidiaries¥ 252 million(Note) Among significant subsidiaries of the Company, CalPortland Company, Jiangnan-Onoda Cement
Co., Ltd., Dalian Onoda Cement Co., Ltd., Nghi Son Cement Corporation and Taiheiyo Cement
Philippines, Inc. have been audited (limited to audits under the provisions of the Companies Act
or the Financial Instruments and Exchange Act (including laws and ordinances of foreign countries
corresponding to said Acts)) by a Certified Public Accountant or an audit corporation other thanthe Company’s Accounting Auditor (including those with foreign qualifications equivalent to
CPA/auditor qualifications).

37

(Translation)

5.

System to Ensure that Directors Comply with Laws and Ordinances and the Articles ofIncorporation in Executing Their Duties and Other Systems to Ensure Proper Execution of
Operations(1)

Summary of the System to Ensure the Proper Execution of Operations

The Company has systems to ensure the proper execution of operations (so-called internal control systems)
and defines them as shown below.
1)

System to ensure that Directors, Executive Officers and employees comply with laws andordinances and the Articles of Incorporation in executing their duties(i) The Company shall strengthen its system for ensuring that the actions of Directors, Executive
Officers and employees comply with laws and ordinances, the Articles of Incorporation and otherinternal company rules, and conventional wisdom in accordance with the Mission of the Taiheiyo
Cement Group, Business Principles, Basic Compliance Policy and Compliance Rules.
(ii) The CSR Management Committee, an interdepartmental committee under the direct authority of theBoard of Directors, pursues policies to promote compliance awareness among Directors, Executive
Officers and employees in accordance with the CSR Prospectus.
(iii) The Internal Auditing Department conducts audits of the business activities of each place of businesswithin the Company to determine whether Executive Officers and employees comply with laws andordinances, the Articles of Incorporation, etc. in executing their duties, provides advice andrecommendations after identifying items in need of improvement, and reports to the President aboutaudit results and then notifies Directors and Corporate Auditors.
(iv) The Company employs an internal reporting system that uses a compliance hotline to reach
representatives both inside and outside the Company (law firm) to enable an accurate response while
protecting the informer and ensuring transparency.

2)

System to store and manage information related to the execution of duties by Directors
The Company documents, stores and manages information related to the execution of duties by Directors
in accordance with the Board of Directors Rules, Decision Making Rules and Document Management
Rules. Directors and Corporate Auditors can review these documents at any time.

3)

Rules and other systems related to managing the risk of loss(i) The Company has prepared the Basic Risk Management Policy and Risk Management Rules
covering basic matters and specific responses to prevent and minimize the impact of risk items that
could significantly affect the business of the Taiheiyo Cement Group. The CSR Management
Committee is in charge of pursuing specific measures, and reports to the Board of Directors about
the status of these activities.
(ii) In the event of an emergency, the Company establishes an Emergency Headquarters led by the
President to pool information and exercise top-down leadership in tackling the emergency inaccordance with the provisions of the Risk Management Rules.

4)

System to ensure that Directors execute their duties efficiently(i) The Company delegates to Executive Officers the authority for certain business matters as stipulated
in the Decision Making Rules and elsewhere. Executive Officers, based on a Management by
Objectives, set clear targets for each responsible organization under their control and execute theirduties efficiently.
(ii) The Board of Directors efficiently allocates business resources from the perspective of optimizing
companywide resources and in accordance with the medium-term management plan and annual
management policy (President’s policy), and reviews the targets of Executive Officers and theprogress of policies reported from time to time.

5)

System for ensuring proper execution of operations within the company group, comprising theCompany and its subsidiaries
The Company, in accordance with its Group Companies Management Rules, takes the following steps toprovide appropriate management and support to its subsidiaries to enable the adequate functioning of
their management organizations (general meeting of stockholders, board of directors, corporate auditors,
and board of auditors) and the establishment of independent management based on self-responsibility.
(i) The Company assigns, in principle, Directors, Executive Officers and employees to serve as directors38

(Translation)or corporate auditors at its subsidiaries. These corporate auditors conduct audits of internal control
systems.
(ii) The Internal Auditing Department conducts audits of the business activities according to the size,
nature of business, etc. of subsidiaries to determine whether the directors and employees of thesubsidiaries comply with laws and ordinances, the Articles of Incorporation, etc. in executing theirduties, provides advice and recommendations after identifying items in need of improvement, andreports to the President about audit results and then notifies Directors and Corporate Auditors.
(iii) The Company seeks to understand the business conditions of each subsidiary through performance
reports and other means and endeavors to share information through exchanges of opinions between
the Company and directors at subsidiaries (including directors serving concurrently as Directors,
Executive Officers or employees at the Company) by periodically holding Group Executive
Committee meetings.
(iv) The Company makes its subsidiaries appoint officers responsible for risk management andcompliance as well as risk management and compliance promoters according to their size, nature ofbusiness, etc. and strives to prevent and reduce risks in the Taiheiyo Cement Group by collaboratingwith each company, and adopts a system for reporting to Directors and Corporate Auditors of theCompany if a crisis occurs or if an event with the risk of developing into a crisis arises at a company.
6)

System to ensure reliability of financial reporting
The Company develops a system required to properly conduct financial reporting such as consolidated
financial statements.

7)

Matters related to personnel to assist Corporate Auditors and independence of such personnel from
Directors
The Company has established a Corporate Auditor’s Office which assists Corporate Auditors in
performing their duties, and assigns full-time personnel. The Company shall request and respect theopinion of the Board of Auditors in matters related to the transfer and evaluation of such full-time
personnel.

8)

System for reporting to Corporate Auditors by Directors, Executive Officers and employees of theCompany as well as directors, corporate auditors and employees of subsidiaries or persons who
received a report from them and other systems for reporting to Corporate Auditors(i) The Company employs a system in which Corporate Auditors can attend important meetings related
to business matters to receive reports from Directors and other employees about the status of theexecution of their duties.
(ii) The Company adopts a system in which any facts that may inflict serious damage to the Company
are reported to Corporate Auditors by Directors, Executive Officers and employees of the Company
as well as directors, corporate auditors and employees of subsidiaries or persons who received areport from them.
(iii) The Company prohibits the unfavorable treatment of anyone who has made a report under thepreceding item.

9)

Other systems to ensure effective auditing by Corporate Auditors(i) The Company employs a system in which Corporate Auditors are shown documents related toimportant decisions and can gain access to a variety of information, including management
information, at any time.
(ii) The Company provides a venue for Corporate Auditors to exchange opinions and information with
the Accounting Auditor.
(iii) When a Corporate Auditor requests the prepayment or payment of expenses required for performing
his/her duties, the Company promptly pays such expenses.

(2)

Summary of the Operational Status of the System to Ensure the Proper Execution of Operations

The Company’s Internal Control System is maintained through systems in line with the basic policy above,and is appropriately managed. Key measures are as follows.
1)

Compliance system(i) Based on the CSR Prospectus, a CSR Management Committee has been established composed of all
Directors with the President as the Chairman, and it is held once per quarter. The CSR Management39

(Translation)
Committee formulates a CSR Action Plan for every fiscal year, understands and confirms its statusof progress, and makes evaluations. Additionally, the results are reported to the Board of Directors.
(ii) Directly under the CSR Management Committee, the Risk Management and Compliance Committee
was established as a subordinate body, and upon formulation of the action plan, it understands andconfirms the status of implementation. Additionally, the status of these measures is reported to the
CSR Management Committee.
(iii) Officers responsible for risk management and compliance as well as risk management andcompliance promoters are selected, these persons engage in promotion of compliance, and theCompany also implements training for these responsible persons and leaders.
(iv) Education regarding compliance is conducted via forms such as training for new employees andtraining depending on job level, distributing action guideline casebooks, and self-checks utilizing elearning, all in an effort to thoroughly implement compliance.
2)

Risk management system(i) Based on the Basic Risk Management Policy, Risk Management Rules are defined, and while
promoting measures toward risk management, responses to emergency situations are defined in the
Crisis Management Rules.
(ii) The annual risk countermeasure plan is formulated, and based on a PDCA cycle, measures for risk
management are promoted.
(iii) In preparation for unexpected events such as disasters and accidents, etc., periodic disasterprevention drills and other training programs are implemented. Additionally, exercises such as initial
response simulation training in the event of a large-scale natural disaster are also conducted to aim
to increase awareness of response processes.
(iv) Under the Basic Information Security Policy, an information security management system has been
established, and while aiming for thorough protection of information assets and appropriate
management and handling, information risk countermeasures are promoted via information security
education such as e-learning.

3)

Ensuring proper execution of operations at the Group(i) Based on the Group Companies Management Rules, a system is maintained where group companies
and the Company deliberate on important matters, direction and management is conducted as
required, and support is provided to management.
(ii) While understanding the management conditions of each group company through periodic
achievement reporting, etc., a Group Executive Committee meeting is held twice per year to
exchange opinions on various themes and share information related to management of the Group.
During the fiscal year under review, the Group Executive Committee meeting scheduled for May
2021 was cancelled owing to the effects of the spread of COVID-19, so the meeting was only held
once during the year.
(iii) Directors and Corporate Auditors of subsidiaries are seconded from the Company to supervise
business execution and implement audits regarding the internal control systems.
(iv) The Internal Auditing Department, upon formulating an audit implementation plan based on theannual audit policy, implements internal audits toward subsidiaries, and provides advice andrecommendations.

40

(Translation)
4)

Execution of business by Directors(i) The Board of Directors is composed of nine persons, including three Outside Directors, and meetings
were held 15 times during the fiscal year under review, where deliberation and determination wasmade regarding important matters defined by laws and regulations and the Articles of Incorporation,in addition to supervision of the execution of business by Directors.
(ii) For important matters other than those to be deliberated by the Board of Directors, Executive
Committee meetings were held 14 times for deliberation.
(iii) To secure the efficiency of execution of business by Directors, reports on the status of businessexecution are made at the Board of Directors by dividing up duties among the Directors andExecutive Officers.
(iv) Regarding management execution, a certain level of authority is delegated to Executive Officers.
Executive Officers execute business via a Management by Objectives that is in line with theMedium-term Management Plan and the annual management policy (President’s policy), and theBoard of Directors reviews the status of progress.

5)

Execution of business by Corporate Auditors(i) Aside from Board of Directors meetings, Corporate Auditors attend important meetings such as the
Executive Committee to confirm the status of the development and operation of the internal control
system.
(ii) Corporate Auditors receive reports on the internal audits carried out by the Internal Audit Department,
while cooperating with the Internal Audit Department to efficiently carry out audits of each businessoffice, subsidiary, etc.
(iii) Periodic meetings are held with the Accounting Auditor to exchange information.
(iv) A Corporate Auditor’s Office has been established to assist Corporate Auditors in performing theirduties, and full-time personnel has been assigned.

Figures stated in this Business Report are rounded down to the nearest unit of presentation (first decimal placein the case of percentages), except for profit per share, which is rounded off to the second decimal place, andaverage age and average length of service of employees of the Company, which are rounded off to the firstdecimal place.

41

(Translation)

Consolidated Financial Statements(April 1, 2021 - March 31, 2022)

Consolidated Balance Sheets
Account

FY2021(as of March 31, 2022)(Unit: Millions of yen)
(Reference)
FY2020(as of March 31, 2021)

AssetsCurrent assets
Cash and deposits

340,550

327,333

60,27173,074

Notes and accounts receivable-trade
Notes and accounts receivable - trade, and contract
assetsElectronically recorded monetary claims-operating－

142,515

143,178－

23,354

19,234Merchandise and finished goods

34,40929,421Work in process

1,277

2,079

Raw materials and supplies

58,502

43,873

Short-term loans receivable

1,921

2,557

Other

17,942

15,373

Allowance for doubtful accounts

(307)

(795)

Non-current assets

762,457

716,893

Property, plant and equipment

557,829

540,342

Buildings and structures

153,705

138,410

Machinery, equipment and vehicles

170,433

154,207Land

156,031

164,193

Leased assets

19,064

20,400Construction in progress

32,67637,186

Other

25,91725,944

Intangible assets

27,56628,192

80

159

Other

27,48528,033

Investments and other assets

177,061

148,358

Investment securities

118,359

91,926Long-term loans receivable

1,391

1,538

Retirement benefit asset

22,68023,099Deferred tax assets

11,081

9,635

Other

25,431

28,296

Allowance for doubtful accounts(1,883)(6,137)

1,103,007

1,044,227

Goodwill

Total assets

42

(Translation)
Account

Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term borrowings
Commercial papers
Current portion of bonds payable
Income taxes payable
Provision for bonuses
Other provisions
Other
Non-current liabilities
Bonds payable
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability
Provision for retirement benefits for directors (and otherofficers)
Provision for special repairs
Provision for product compensation
Other provisions
Lease liabilities
Asset retirement obligations
Other
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Non-controlling interests
Total net assets
Total liabilities and net assets

43

FY2021(as of March 31, 2022)(Reference) FY2020(as of March 31, 2021)

309,768
79,685
8,751
102,986
21,000
－
4,198
6,246
213
86,685
248,440
60,00086,60010,02022,701

304,83173,596
7,744
103,538－
10,000
4,590
6,265
404
98,691
232,574
50,00084,5638,130
24,703

512

503

258
3,330
478
13,481
8,703
42,352558,208180－
511
14,352
7,821
41,807537,405506,291
86,17449,729384,154(13,766)
4,325
11,737
6
4,897(11,322)(992)
34,181
544,799
1,103,007

485,946
86,17460,292
365,593(26,113)(15,025)
12,4291
4,898(29,917)(2,438)35,899506,8211,044,227

(Translation)

Consolidated Statements of Income
Account

FY2021(Unit: Millions of yen)
(Reference)
FY2020(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021)

Net sales

708,201

863,903

Cost of sales

532,818

672,631

175,382

191,272

128,681

127,661

Operating profit

46,701

63,610Non-operating income

8,311

8,428

Interest and dividend income

2,193

1,874

Share of profit of entities accounted for using equity method

1,913

1,879

453

1,042

3,750

3,632

Non-operating expenses

4,819

6,295

Interest expenses

2,195

3,498

Other

2,623

2,797

Ordinary profit

50,19365,744Extraordinary income

8,054

7,226

Gain on disposal of non-current assets

6,386

3,247

Gain on sale of investment securities

615

3,567

1,051

411

15,426

7,865

Loss on disposal of non-current assets

7,301

5,494

Loss on sale of investment securities

428

61

Loss on valuation of investment securities

20

47

2,407

969

277

547

Product compensation expenses

3,506

－

Other

1,485

744

Profit before income taxes

42,82065,105

Income taxes-current

11,542

9,170

Income taxes-deferred

227

6,285

Profit31,05149,649Profit attributable to non-controlling interests

2,079

2,848

Profit attributable to owners of parent

28,97146,800Gross profit
Selling, general and administrative expenses

Foreign exchange gains
Other

Other
Extraordinary losses

Impairment losses
Loss on temporary suspension of operations

44

(Translation)

Non-consolidated Financial Statements(April 1, 2021 - March 31, 2022)

Non-consolidated Balance Sheets
FY2021(as of March 31, 2022)(Unit: Millions of yen)
(Reference)
FY2020(as of March 31, 2021)

AssetsCurrent assets
Cash and deposits
Notes receivable-trade
Electronically recorded monetary claims-operating
Accounts receivable-trade
Merchandise and finished goods
Raw materials and supplies
Prepaid expenses
Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land providing raw materials
Land
Leased assets
Construction in progress
Intangible assets
Mining right
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital
Investments in capital of subsidiaries and associates
Long-term loans receivable
Long-term prepaid expenses
Prepaid pension costs
Other
Allowance for doubtful accounts

113,027
2,387
7,926
7,763
48,737
11,19827,480
571
6,963
(0)
512,020
227,344
28,17958,92948,453
1,687
1,265
12,661
63,880
4,066
8,219
16,295
9,521
2,617
4,156
268,379
23,567200,284
35
7,240
1711,647
19,071
27,332(20,817)103,358
10,273
10,3085,458
45,958
7,648
16,936
520
6,269
(14)
475,628
220,582
26,07450,54342,3491,153
1,298
12,74364,052
4,314
18,052
15,960
9,790
1,467
4,702
239,085
25,801
168,981
35
9,372
24
10,79518,03030,612(24,568)

Total assets

625,047

578,986

Account45

(Translation)
FY2021(as of March 31, 2022)(Reference) FY2020(as of March 31, 2021)

153,372

131,402

7,498
27,07353,87421,000－
1,053
11,731
13,248
354
1,477
301
1,571
2,178
12,009－175,058
60,00068,181
3,361
4,710
1,933
2,425
30,631
3,479
334

8,105
21,61247,609－10,0001,030
12,967
13,159
124
386
273
1,548
2,180
12,168235
160,378
50,00066,564
3,648
5,646
1,058
－
30,2002,773
487

328,431291,781

Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Other retained earnings
Reserve for mine prospecting
Reserve for tax basis adjustments of non-current assets
Retained earnings brought forward
Treasury shares
Valuation and translation adjustments
Valuation difference on available-for-sale securities

289,546
86,17442,21542,215－
174,458
174,458523
15,189158,745(13,302)
7,070
7,070

278,829
86,17456,27542,215
14,060162,029
162,029405
15,489146,133(25,650)
8,375
8,375

Total net assets

296,616

287,205

Total liabilities and net assets

625,047

578,986

Account
Liabilities
Current liabilities
Electronically recorded obligations-operating
Accounts payable-trade
Short-term borrowings
Commercial papers
Current portion of bonds payable
Lease liabilities
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Unearned revenue
Provision for bonuses
Electronically recorded obligations-non-operating
Other
Non-current liabilities
Bonds payable
Long-term borrowings
Lease liabilities
Deferred tax liabilities
Provision for loss on guarantees
Provision for loss on business of subsidiaries and associates
Long-term guarantee deposits
Asset retirement obligations
Other
Total liabilities
Net assets

46

(Translation)

Non-consolidated Statements of Income
Account

FY2021(Unit: Millions of yen)
(Reference)
FY2020(April 1, 2021 - March 31, 2022) (April 1, 2020 - March 31, 2021)

Net sales

287,525

295,277

Cost of sales

221,803214,580

65,72180,69764,137

63,716

Operating profit

1,584

16,981Non-operating income

31,101

9,491

Dividend income

29,2396,534

Reversal of allowance for doubtful accounts

757－

Foreign exchange gains

95

574

1,008

2,383

Non-operating expenses

2,135

3,277

Interest expenses

822

955

Provision of allowance for doubtful accounts

－

1

Other

1,313

2,320

Ordinary profit

30,551

23,195Extraordinary income

1,001

5,518

Gain on disposal of non-current assets

211

1,273

Gain on sale of investment securities

498

249

Gain on sale of shares of subsidiaries and associates
Gain on sale of investments in capital of subsidiaries andassociates
Gain on exchange from dividends in kind

204

－

－

3,995

87

－

9,134

6,215

3,649

3,833

359

0

Loss on valuation of investment securities

94

Loss on valuation of shares of subsidiaries and associates

－

1,576

Loss on sale of investment securities

92

48

Provision for loss on guarantees

1,022

－

Provision for loss on business of subsidiaries and associates

2,425

－

Impairment losses

958

753

Accident related loss

616－

Profit before income taxes

22,41822,498

Income taxes-current

193

392

Income taxes-deferred

(298)

3,571

Profit22,524

18,534Gross profit
Selling, general and administrative expenses

Other

Extraordinary losses
Loss on disposal of non-current assets
Loss on liquidation of subsidiaries and associates

47

(Translation)

Independent Auditor’s Report
The Board of Directors of Taiheiyo Cement Corporation:
OpinionWe have audited the consolidated financial statements, which comprise the consolidated balance sheet,the consolidated statement of income, the consolidated statement of changes in net assets and the related
notes of Taiheiyo Cement Corporation (“the Company”) and its consolidated subsidiaries (collectively
referred to as “the Group"), as at March 31, 2022 and for the year from April 1, 2021 to March 31, 2022
in accordance with Article 444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position and the results of operations of the Group for the period, forwhich the consolidated financial statements were prepared, in accordance with accounting principles
generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Other Information
Other Information consists of the Business Report and the supplementary schedules.
Management is responsible for the preparation and presentation of Other Information. Corporate auditors
and the board of corporate auditors are responsible for overseeing the directors’ performance of theirduties including the design, implementation and maintenance of the Group’s reporting process on Other
Information.
Our audit opinion on the consolidated financial statements does not cover Other Information and we do
not express an opinion on Other Information.
Our responsibilities for the audit of the consolidated financial statements are to read through Other
Information and examine whether Other Information is materially inconsistent with the consolidated
financial statements or with the knowledge we obtained throughout our audit process, or if it otherwise
appears to be materially misstated.
If, based on the work performed, we conclude that there is a material misstatement in Other Information,
we are required to report such fact.
We have nothing to report concerning Other Information.
Responsibilities of Management and Corporate auditors and the board of corporate auditors for
the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties including the design, implementation and maintenance of the Group’s
financial reporting process.

48

(Translation)

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with auditing standards generally accepted in Japan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.

Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation, structure
and content of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

49

(Translation)

We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company and its
subsidiaries which are required to be disclosed pursuant to the provisions of the Certified Public
Accountants Act of Japan.
Reiji Kobayashi
Designated Engagement Partner
Certified Public Accountant
Yoshihiro Uehara
Designated Engagement Partner
Certified Public Accountant
Hiroko Sakurada
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, JapanMay 16, 202250

(Translation)

Independent Auditor’s Report
The Board of Directors of Taiheiyo Cement Corporation:
OpinionWe have audited the financial statements, which comprise the balance sheet, the statement of income, thestatement of changes in net assets and the related notes, and the supplementary schedules of Taiheiyo
Cement Corporation (“the Company”) as at March 31, 2022 and for the year from April 1, 2021 to March
31, 2022 in accordance with Article 436-2-1 of the Companies Act.
In our opinion, the financial statements and the supplementary schedules referred to above present fairly,
in all material respects, the financial position and the results of operations of the Company for the period,
for which the financial statements and the supplementary schedules were prepared, in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Financial Statements and Others section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Other Information
Other Information consists of the Business Report and the supplementary schedules.
Management is responsible for the preparation and presentation of Other Information. Corporate auditors
and the board of corporate auditors are responsible for overseeing the directors’ performance of theirduties including the design, implementation and maintenance of the Group’s reporting process on Other
Information.
Our audit opinion on the financial statements and the supplementary schedules does not cover Other
Information and we do not express an opinion on Other Information.
Our responsibilities for the audit of the financial statements and the supplementary schedules are to readthrough Other Information and examine whether Other Information is materially inconsistent with thefinancial statements and the supplementary schedules or with the knowledge we obtained throughout our
audit process, or if it otherwise appears to be materially misstated.
If, based on the work performed, we conclude that there is a material misstatement in Other Information,
we are required to report such fact.
We have nothing to report concerning Other Information.
Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors for
the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the
supplementary schedules in accordance with accounting principles generally accepted in Japan, and forsuch internal control as management determines is necessary to enable the preparation of financial
statements and the supplementary schedules that are free from material misstatement, whether due tofraud or error.
In preparing the financial statements and the supplementary schedules, management is responsible forassessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern in accordance with accounting principles generally accepted in Japan and using thegoing concern basis of accounting unless management either intends to liquidate the Company or tocease operations, or has no realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties including the design, implementation and maintenance of the Company’s
financial reporting process.

51

(Translation)

Auditor’s Responsibilities for the Audit of the Financial Statements and Others
Our objectives are to obtain reasonable assurance about whether the financial statements and the
supplementary schedules as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level ofassurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally
accepted in Japan will always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements andthe supplementary schedules.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements and the
supplementary schedules, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements and the supplementary schedules or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.

Evaluate whether the presentation and disclosures in the financial statements and the supplementaryschedules are in accordance with accounting standards generally accepted in Japan, the overall
presentation, structure and content of the financial statements and the supplementary schedules,
including the disclosures, and whether the financial statements and the supplementary schedules
represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.

52

(Translation)

Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which arerequired to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
Reiji Kobayashi
Designated Engagement Partner
Certified Public Accountant
Yoshihiro Uehara
Designated Engagement Partner
Certified Public Accountant
Hiroko Sakurada
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, JapanMay 16, 202253

(Translation)

Audit Report
The Board of Auditors has prepared this Audit Report following deliberations based on the respective audit reports
prepared by Corporate Auditors in relation to the execution of duties by Directors for the 24th fiscal term from April
1, 2021 to March 31, 2022. The report is as follows.
1. Method and Description of Audit by Corporate Auditors and the Board of Auditors(1) The Board of Auditors determined the audit policy, audit plan, etc., received reports from each Corporate
Auditor on the progress and results of his/her audit, in addition to receiving reports from Directors, etc. and the
Accounting Auditor on the execution status of their duties, and sought explanations as necessary.
(2) Each Corporate Auditor, based on the audit standards for Corporate Auditors established by the Board ofAuditors, followed the audit policy, audit plan, etc., communicated with Directors, the Internal Auditing
Department and other employees, etc., endeavored to collect information and develop an environment for the audit,
and implemented audits via the following methods.
1) We attended the meetings of the Board of Directors and other important meetings, received reports from
Directors, employees, etc. on the execution status of their duties, sought explanations as necessary, reviewed
important approval documents, etc., and investigated the status of operations and assets at the head office andprincipal places of business. With respect to subsidiaries, we verified the status of their management at theCompany’s major meetings, and requested explanation as necessary. We also communicated and exchanged
information with the directors, corporate auditors, etc. of subsidiaries besides conducting site audits, etc. inaccordance with audit plans.
2) We also monitored and verified the content of the resolution passed by the Board of Directors regarding thedevelopment of a system to ensure that Directors comply with laws, ordinances and the Articles of Incorporationin executing their duties and other systems stipulated in paragraphs 1 and 3 of Article 100 of the Ordinance for
Enforcement of the Companies Act that are required to ensure proper operations of a company group comprisedof a stock company and its subsidiaries, as well as the status of the system developed pursuant to such resolution(i.e., internal control system). In regards to internal controls over financial reporting, we received reports from
Directors, etc. and KPMG AZSA LLC on the evaluation and audit status of such internal controls, and sought
explanations as necessary.
3) We monitored and verified whether or not the Accounting Auditor had maintained its independence and whether
or not it had conducted its audit properly, received reports from the Accounting Auditor on the execution statusof its duties, and sought explanations as necessary. In addition, we were notified by the Accounting Auditor that
it is equipped with a system for ensuring that duties are performed properly (matters listed in the items of Article
131 of the Company Accounting Ordinance) in accordance with the Quality Control Standards for Audits (issued
by the Business Accounting Council on October 28, 2005), etc., and sought explanations as necessary.
Based on the above methods, we examined the Business Report and its supplementary schedules, Nonconsolidated Financial Statements (i.e., Non-consolidated Balance Sheets, Non-consolidated Statements of Income,Non-consolidated Statements of Changes in Net Assets and Notes to the Non-Consolidated Financial Statements)
and their supplementary schedules as well as the Consolidated Financial Statements (i.e., Consolidated Balance
Sheets, Consolidated Statements of Income, Consolidated Statements of Changes in Net Assets and Notes to theConsolidated Financial Statements) for the fiscal year under review.

54

(Translation)
2. Audit Results(1) Results of audit of Business Report, etc.
1. In our opinion, the Business Report and the supplementary schedules are in compliance with laws,
ordinances and the Articles of Incorporation, and fairly represent the Company’s position.
2. No material facts were identified regarding misconduct or violation of any laws, ordinances or the
Articles of Incorporation in relation to the execution of duties by Directors.
3. In our opinion, the Board of Directors’ resolution on the internal control system (including internal
controls over financial reporting) is adequate in content. We found no matters that need to be pointed out
in regards to the content of the records in the Business Report and the execution of duties by Directors in
relation to said internal control system. Of note, we received reports from Directors, etc. and KPMG AZSA
LLC that there are no material inadequacies to be disclosed in relation to internal controls over financial
reporting as at the time of preparation of this Audit Report.
(2) Results of audit of Non-consolidated Financial Statements and their supplementary schedules
In our opinion, the methods and results of the audit conducted by Accounting Auditor KPMG AZSA LLC arereasonable.
(3) Results of audit of Consolidated Financial Statements
In our opinion, the methods and results of the audit conducted by Accounting Auditor KPMG AZSA LLC arereasonable.
May 18, 2022
Board of Auditors, Taiheiyo Cement Corporation
Corporate Auditor (Standing)Shigeru Matsushima[Seal]

Corporate Auditor (Standing)

Katsuhide Fukuhara[Seal]

Outside Corporate Auditor

Wakako Mitani[Seal]

Outside Corporate Auditor

Yoshio Fujima[Seal]

55