[Translation for Reference and Convenience Purposes Only]Note. This document has been translated to English from the Japanese original for reference andconvenience purposes only. In the event of any discrepancy between this translated document and
the Japanese original, the Japanese original shall prevail. Some pictures, graphs, charts and reference
matters in the Japanese original have been omitted from this translated document.

Nippon Sanso Holdings Corporation(Securities Code: 4091)[Notice of Convocation of
the 20th Ordinary General Meeting of Shareholders]Date and time: Wednesday, June 19, 2024, 10:00 a.m. (Registration desk open from 9:00 a.m.)
Venue: Grand Prince Hotel Takanawa, in Prince Room on basement floor B1
3-13-1 Takanawa, Minato-ku, Tokyo
Agenda:Proposal 1:
Proposal 2:
Proposal 3:

Appropriation of surplus
Election of nine directors
Election of two audit & supervisory board members* Video recording of part of the Meeting is scheduled to be made available on our corporate website from lateJune ( https://www.nipponsanso-hd.co.jp/ir/stock/meeting.html ) (Japanese language version only).
A camera will be set up at the venue on the day of the meeting for the above-stated video recording. To respect
the privacy of shareholders in attendance, the recording will be basically limited to the images around thechairperson’s and officers’ seats. However, if an image of an attending shareholder is captured for unavoidable
reasons due to the venue, etc., the image will be processed to ensure that the individual cannot be identified.
Q&A session part will be cut off from the video. Thank you for your understanding.
*Only this Notice of Convocation and the ballot form will be sent to shareholders who did not request paper
copy.

Important Notice – Trading of Nippon Sanso Holdings Corporation Common Stock, Disclaimer Regarding Unsponsored American
Depository Receipts
Nippon Sanso Holdings Corporation ("NSHD”) encourages anyone interested in buying or selling its common stock to do so on theTokyo Stock Exchange, which is where its common stock is listed and primarily trades. NSHD’s disclosures are not intended tofacilitate trades in, and should not be relied on for decisions to trade, unsponsored American Depository Receipts (“ADRs”).
NSHD has not and does not participate in, support, encourage, or otherwise consent to the creation of any unsponsored ADR
programs or the issuance or trading of any ADRs issued thereunder in respect of its common stock. NSHD does not represent to any
ADR holder, bank or depositary institution, nor should any such person or entity form the belief, that (i) NSHD has any reporting
obligations within the meaning of the U.S. Securities Exchange Act of 1934 (“Exchange Act”) or (ii) NSHD’s website will containon an ongoing basis all information necessary for NSHD to maintain an exemption from registering its common stock under the
Exchange Act pursuant to Rule 12g3-2(b) thereunder.
To the maximum extent permitted by applicable law, NSHD and its affiliates disclaim any responsibility or liability to ADR holders,banks, depositary institutions, or any other entities or individuals in connection with any unsponsored ADRs representing its common
stock.

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6

Securities Code: 4091
May 29, 2024

To Our Shareholders

1-3-26, Koyama, Shinagawa-ku, Tokyo, Japan
Nippon Sanso Holdings Corporation
Toshihiko Hamada, President, Representative Director and CEO

Notice of Convocation of
the 20th Ordinary General Meeting of Shareholders
Nippon Sanso Holdings Corporation (“we” or “Company”) will hold its 20th Ordinary General
Meeting of Shareholders (“Meeting”) as detailed below.
In convening the Meeting, the Company is providing the information contained in the reference
documentation, etc. for the general meeting of shareholders electronically (Electronically Provided
Information) on the following websites. Please access one of the websites to review the material.
Corporate Website
https://www.nipponsanso-hd.co.jp/en/ir/stock/meeting.html
Tokyo Stock Exchange website (Tokyo Stock Exchange Listed Company Search Service)https://www2.jpx.co.jp/tseHpFront/JJK020030Action.do?Show=Show(Access the above Tokyo Stock Exchange website and enter “Nippon Sanso Holdings” in the “Issue
name (company name)” field, or enter our securities Code “4091” in the "Code” field, to search for
the Company, and select “Basic Information” tab, then the “Documents for public inspection/PR
information” tab, and access the “Notice of General Shareholders Meeting/Informational Materials
for a General Shareholders Meeting” under the “Filed information available for public inspection” toreview the material.)
If you are unable to attend the Meeting, you may exercise your voting rights using any of the methods
described below. Please review the reference documentation for the general meeting of shareholders
described below or on the above websites and exercise your voting rights no later than 5:40 p.m. on
Tuesday, June 18, 2024.
By Postal Mail
Indicate your approval or disapproval of each of the proposals on the ballot form that will be sent
together with this Notice of Convocation and return it by mail to arrive by the deadline given above.
Via the Internet, Etc.
Access our designated shareholder voting website (https://soukai.mizuho-tb.co.jp [in Japanese only])and vote on the tendered proposals by the deadline given above.

7

Meeting of Shareholders
1． Date and time: Wednesday, June 19, 2024, 10:00 a.m.
(Registration desk open from 9:00 a.m.)
2． Venue
Grand Prince Hotel Takanawa, in Prince Room on basement floor B1
3-13-1 Takanawa, Minato-ku, Tokyo
3． Agenda
Matters to Be Reported
1.
Business report, consolidated financial statements, and the findings ofaudits of the consolidated financial statements carried out by the accounting
auditor and the Audit & Supervisory Board for the FYE2024 March (April 1,
2023 to March 31, 2024)
2.
Report on the non-consolidated financial statements for the FYE2024
March (April 1, 2023, to March 31, 2024)
Matters to Be Resolved
Proposal 1: Appropriation of surplus
Proposal 2: Election of nine directors
Proposal 3: Election of two audit & supervisory board membersooo

If you plan to exercise your voting rights by proxy, you may authorize another shareholder with voting
rights to attend the Meeting on your behalf. Your proxy will need to present written proof of his or her
power to act as your proxy.
If you plan to attend the Meeting, please bring the ballot form that will be sent together with this Noticeof Convocation with you and present it at the registration desk.
If electronically provided information is revised, the fact that it has been revised and the information
before and after the revision will be posted on each of the above-stated websites.

8o Only this Notice of Convocation and the ballot will be sent to shareholders who did not request
paper copy.
o Among the electronically provided information, the following are to be omitted from the
documents to be delivered to shareholders who requested paper copies in accordance with theprovisions of applicable Japanese law and Article 17 of our Articles of Incorporation. Therefore,
they are not included in the documents:
1. “ System to Ensure the Appropriateness of Business Operations and Implementation Status of
Such Systems” and “Basic Policy on the Control over the Company” in the business report
2. “Consolidated statement of changes in equity” and “Notes to consolidated financial
statements” in consolidated financial statements
3. “Statement of changes in equity” and “Notes to non-consolidated financial statements” in nonconsolidated financial statements
The matters stated in the aforesaid section 1. are included in the business report audited by the Audit &Supervisory Board members for preparation of the audit report. Also, the matters stated in the aforesaid
section 2. and 3. are included in the consolidated and non-consolidated financial statements audited by
the accounting auditor and the Audit & Supervisory Board members for preparation of the accounting
audit report and the audit report.
o A paper copy of the result of the resolutions at this Meeting will not be sent by postal mail, and will be
posted on the corporate website ( https://www.nipponsanso-hd.co.jp/en/ir/stock/meeting.html ) after theconclusion of this Meeting.

If you have any questions about the Electric Provision and request of paper copies, you may contact
the following number of our Shareholder Directory Administrator, Mizuho Trust & Banking Co., Ltd.,or, if any, securities company you have an account.
Number dedicated to the Electric Provision: 0120-524-324 (toll-free, 9:00 a.m. to 5:00 p.m. except
Saturday, Sunday and National Holiday) [in Japanese only]
FAQ for the Electric Provision: [in Japanese only]
https://contact.www.mizuho-tb.co.jp/category/show/72?site_domain=daikou

9Instructions for Voting
You may exercise your voting rights using any of the following three methods.
･ Attendance at the Meeting*1
Present the ballot form that will be sent together with this Notice of Convocation at the registration desk when
you arrive for the Meeting. (You do not need to affix your seal or signature.)
Date and time: Wednesday, June 19, 2024, 10:00 a.m. (Registration desk open from 9:00 a.m.)･ By postal mail*2
Indicate your approval or disapproval of each of the proposals on the ballot form that will be sent together withthis Notice of Convocation and return it by postal mail (No mailing stamp required within Japan).
Deadline: The ballot must be received no later than 5:40 p.m. on Tuesday, June 18, 2024.
･ Via the Internet, etc.
Access our designated shareholder voting website (https://soukai.mizuho-tb.co.jp/ [in Japanese only]) and follow
the on-screen instructions to enter your vote.
Deadline: 5:40 p.m. on Tuesday, June 18, 2024.
More information on next page*1 If you plan to attend the Meeting in person, there is no need to submit a ballot by postal mail or via the Internet,etc.
*2 If the approval or disapproval of each of the proposals is not indicated on the returned ballot form, company proposals
will be deemed to be approved, and shareholder proposals will be deemed to be disapproved.
Note for Institutional Investors
You may also exercise your voting rights by making use of the Electronic Voting Platform (run by Investor
Communications Japan).

10Instructions for Voting via the Internet, etc.
[Method 1: Scanning QR code® “Smart Vote”]
You can simply login to the website for exercising voting rights without entering your voting code andpassword.
1 Please scan the QR code® located on the bottom right of the voting form.
* “QR code” is a registered trademark of DENSO WAVE INCORPORATED.
2 Indicate your approval or disapproval by following the instructions on the screen.
Note that your voting rights can be exercised only once by using the “Smart Vote” method.
If you need to make a correction to the content of your vote after you have exercised your voting rights, please
access the website for personal computer and login by entering your “voting code” and “password” printed on
the voting form, and exercise your voting rights again.
* You can access the website for personal computer by scanning the QR code® again.

[Method 2: Entering voting code and password]
1 Please access the shareholder voting website.
Click “Next.”

https://soukai.mizuho-tb.co.jp/ [in Japanese only].

2 Enter your “voting code” printed on the ballot form.
Enter the “voting code.”
Click “Next.”
3 Enter your password printed on the ballot form.
Enter the “initial password.”
Set the new password you are going to use.
Click “Register.”
4 Indicate your approval or disapproval by following the instructions on the screen.

Matters to Be Noted:(1) The deadline for voting is 5:40 p.m. on Tuesday, June 18, 2024. You will need to complete the voting processby that time. We encourage you to vote early.
(2) In the event votes submitted via the Internet (including via “Smart Vote”) are duplicated by the submissionof a written ballot, the votes submitted via the Internet will prevail. If votes are submitted multiple times via
the Internet, the final vote will prevail.
(3) Passwords (including new passwords selected by shareholders after initial login) will be valid for thisMeeting only. New passwords will be issued for the next General Meeting of Shareholders.
(4) Shareholders will bear any costs incurred for voting via the Internet.
In case you need instructions for how to operate your personal computer/smartphone/mobile phone in order toexercise your voting rights via the Internet, please contact:
Securities Agent Dept. of Mizuho Trust & Banking Co., Ltd. Internet Help Dial 0120-768-524(9:00 a.m. to 9:00 p.m. (excluding the year-end and New Year holidays season) (JST)11Reference Documentation
For the General Meeting of Shareholders
Proposal 1: Appropriation of surplus
The Company proposes that the surplus be appropriated as follows.
1． Year-end dividend
Our proposed year-end dividend for this term is detailed below. This reflects our interest in using ourinternal reserves to improve and reinforce the Company’s management foundation, as well as our corepolicy of returning profits to our shareholders on a stable and sustained basis, in keeping with ourdividend policy, which takes into account linkages with consolidated results.
(1) Type of dividend
Cash(2) Allocation and total amount of dividend
24 yen per common share in the Company
Total dividend: 10,389,739,032 yen(3) Effective date of distribution of dividend from surplus
June 20, 2024
Including the interim dividend of 20 yen per share that was paid in December last year, the total annual
dividend will be 44 yen per share.
2． Other matters concerning the appropriation of surplus
None

12

Proposal 2: Election of nine directors
The terms of office of nine directors (Toshihiko Hamada, Kenji Nagata, Thomas Scott Kallman,
Eduardo Gil Elejoste, Miri Hara, Katsumi Nagasawa, Masako Miyatake, Hideo Nakajima, andKatsuhito Yamaji) will expire at the conclusion of this Meeting. Accordingly, the Company proposes
the election of nine directors (including five outside directors).
The candidates for directors are listed below.

No.

1．

2．

Name

New appointment/Reappointment/ outside/
independent

GenderCurrent position and responsibilities

Reappointment

Male

Chairman of the Board of Directors
Representative director and President CEO
Member of Advisory Committee on Appointments and Remuneration
Director

Reappointment

Director

Reappointment

Toshihiko Hamada

Kenji Nagata
Male

3．

Thomas Scott Kallman
Male

4．

5．

6．

7．

8．

9．

New appointment

Raoul Giudici
Male

--

FemaleDirector
Member of Advisory Committee on Appointments and Remuneration

Reappointment
outside director
independent

Male

Director
Chairman of Advisory Committee on Appointments and Remuneration

Reappointment
outside director
independent

FemaleDirector
Member of Advisory Committee on Appointments and Remuneration

Reappointment
outside director
independent

Male

Director
Member of Advisory Committee on Appointments and Remuneration

Reappointment
outside director
independent

Male

Director
Member of Advisory Committee on Appointments and Remuneration

Reappointment
outside director
independent

Miri Hara

Katsumi Nagasawa

Masako Miyatake

Hideo Nakajima

Katsuhito Yamaji

Notes
The candidates for directors were selected by the Board of Directors following recommendations by the Advisory Committee on Appointments
and Remuneration*1, which consists of the Representative Director and President CEO and independent outside directors.
The Company has established Standards for the Independence of Outside Directors and the Audit & Supervisory Board members*2, detailed
on Page 26. These standards have been met by the five candidates nominated for outside director positions in this Proposal.
*1 See “Reference: Advisory Committee on Appointments and Remuneration” on page 26 below for the outline of the Advisory Committee
on Appointments and Remuneration.
*2 See “Reference: Standards for the Independence of Outside Directors and Audit & Supervisory Board members” on page 26 below.

13

<Skills Matrix of Candidates for Directors>
The Company believes that members of the Board of Directors shall be composed of diverse
individuals with the knowledge and experience required for corporate management in order for the
Board of Directors to function more effectively. Accordingly, the fields of particular importance to theGroup management are defined as Corporate Management, Financial Affairs & Accounting, Legal
Affairs & Risk Management, Sales & Marketing, Development & Technology, and Production &Procurement. The knowledge and experience acquired by all of the officers through their career and intheir expert areas comprise the necessary skills for the Group to promote sustainability management.
The Company will strive to further enhance the effectiveness of the Board of Directors, assigningpersonnel with such knowledge and experience in the right places at the right time.
Skills Matrix: areas of expertise and experience of candidates for Directors
No.

1．

2．

3．

4．

5．

Name

Financial Legal Affairs
Corporate
Affairs && RiskManagement Accounting Management

Sales &
Production
Development
Marketing& Procure& Technology
mentBusiness
Overseas
Experience at
Assignment
Independence
Other
Companies

Toshihiko Hamada
●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Kenji Nagata

Thomas Scott Kallman

Raoul Giudici

Miri Hara
●

6．

8．

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

Masako Miyatake

Hideo Nakajima
●

9．

●

Katsumi Nagasawa
●

7．

●

Katsuhito Yamaji●●●* Detailed Definition of Skills
Corporate Management: Career background as president (CEO), corporate executive officer or executive officer of a publicly listedcompany; or president (CEO) of a local subsidiary of a global company
Business Experience at Other Companies: work experience at companies other than the Group companies or the parent group companies

14❶ Toshihiko Hamada(Date of birth: September 28, 1956) Male

Career summary, position and responsibilities in the Company

April 1981

Joined the Company

July 2002

Executive Vice President responsible for Specialty Gas Technology, Matheson Tri-Gas, Inc.

October 2005

Deputy general manager of Semiconductor Gas Section of Electronics Division

April 2006

General manager of Semiconductor Gas Section of Electronics Division

January 2010

Subordinate directly to General manager of Electronics Division and general manager of Business Strategy
Promotion Section

Reappointment
Number of Company shares
owned:
6,900
Years of service as a director:
4
Record of attendance at the Boardof Directors meetings:
12 appearances at 12 meetings

June 2014

Managing director, NISSAN TANAKA CORPORATION

June 2016

Senior Managing director, NISSAN TANAKA CORPORATION

June 2017

President and representative director, NISSAN TANAKA CORPORATION

June 2020

Executive vice president (aid to the president), Director of the Company

June 2021

President, Representative Director, and CEO, the Company (current)

Significant concurrent positions

None

After experiencing a wide range of sales activities for semiconductor gas in Japan and overseas, andserving as the general manager of the Semiconductor Gas Section, Toshihiko Hamada assumed the
Reasons fornomination as
candidate fordirector position

position of president and representative director of NISSAN TANAKA CORPORATION from June2017 to June 2020. Having engaged in groupwide management as an assistant to the president after
assuming the posts of executive vice president and director in the Company in June 2020, he has served
as the President, Representative Director and CEO of the Company since June 2021.
In view of his extensive background, we have nominated Mr. Hamada for a position as director in the
expectation that his experience and insight will contribute significantly to enhancing Groupmanagement.

Special interests

Toshihiko Hamada has no special interests in the Company.

15❷ Kenji Nagata(Date of birth: February 28, 1959) Male

Career summary, position and responsibilities in the Company

April 1981

Joined the Company

June 2009

President, National Oxygen Pte. Ltd. (now Leeden National Oxygen Ltd.)

June 2013

Executive officer, general manager of North Kanto Branch

April 2016

Executive officer, deputy general manager of Industrial Gases Division, general manager of Gases Business
Unit, general manager of Product Management Unit

June 2016

Senior executive officer, deputy general manager of Industrial Gases Division, general manager of Gases
Business Unit, general manager of Product ManagementUnit

Reappointment
Number of Company shares
owned:
12,400Years of service as a director:
6
Record of attendance at the Boardof Directors meetings:
12 appearances at 12 meetings

April 2017

Senior executive officer, general manager of Industrial Gases Division

June 2018

Senior managing executive officer, director, general manager of Industrial Gases Division

October 2020

Director, the Company (current), Representative Director, President, TAIYO NIPPONSANSO CORPORATION (current)

Significant concurrent positions

Representative Director, President, TAIYO NIPPON SANSO CORPORATION
Kenji Nagata has wide-ranging experience in the areas of industrial gas logistics, sales, and planning.
Following his tenure as president of one of our overseas subsidiaries and as general manager of our KitaReasons for

Kanto Regional Branch, he was appointed to serve as general manager of our Industrial Gases Divisionnomination as

from April 2017 to September 2020. After the Company moved to a holding company structure incandidate for

October 2020, he assumed Representative Director, President, TAIYO NIPPON SANSO

director position

CORPORATION which is our group company engaging in the industrial gases business in Japan.
In view of his extensive background, we have nominated Mr. Nagata for a position as director in the
expectation that his experience and insight will contribute significantly to Group management.

Special interests

Kenji Nagata has no special interests in the Company.

16❸ Thomas Scott Kallman((Date of birth: October 17, 1954) Male

Career summary, position and responsibilities in the Company

July 1981

Joined BOC Group, plc.

January 2000 Vice President, General Manager responsible for Eastern Region, BOC Group, plc.
January 2005 Executive Vice President responsible for Industrial Gas Group, Matheson Tri-Gas, Inc.

Reappointment
Number of Company shares
owned:
0Years of service as a director:
5
Record of attendance at the Boardof Directors meetings:
12 appearances at 12 meetings

January 2008

Senior Executive Vice President and COO, Matheson Tri-Gas, Inc.

June 2009

President and COO, Matheson Tri-Gas, Inc.

January 2013

President and CEO, Matheson Tri-Gas, Inc.

June 2017

Chairman, President, and CEO, Matheson Tri-Gas, Inc.

April 2019

Chairman and CEO, Matheson Tri-Gas, Inc. (current)

June 2019

Director of the Company (current)

Significant concurrent positions

Chairman and CEO, Matheson Tri-Gas, Inc.

Reasons fornomination as
candidate fordirector position

Thomas Scott Kallman has worked for many years in the industrial gas industry in the United States, andsince 2013 has worked as CEO of Matheson Tri-Gas, Inc., a Company subsidiary engaged in theindustrial gas business in the United States. In view of his extensive background, we have nominated Mr.
Kallman for a position as director in the expectation that his experience and insight will contributesignificantly to Group management.

Special interests

Thomas Scott Kallman has no special interests in the Company.

17❹ Raoul Giudici(Date of birth: June 25, 1969) Male

Career summary, position and responsibilities in the Company

New appointment
Number of Company shares owned:
0

September 1995

Joined Rivoira S.p.A. (now Nippon Gases Italia S.r.l.)March 2004

Director Marketing and Bulk Sales Development, Revoira S.p.A.

February 2007

European Marketing Director , Praxair Euroholding S.L.

January 2010

Sales and Marketing Director Italy, Rivoira S.p.A.

February 2013

Managing Director, Rivoira S.p.A.

November 2013

Managing Director and President, Rivoira S.p.A.

January 2015

Managing Director and President, Praxair Italia S.r.l. (now Nippon Gases Italia S.r.l.)

April 2024

Executive Vice President, Nippon Gases Euro-Holding S.L.U. (current)

Significant concurrent positions

Executive Vice President*, Nippon Gases Euro-Holding S.L.U.

Raoul Giudici has worked for many years in the industrial gas business in Europe, and was in charge of
Reasons for

Italy at the European business of Praxair, Inc., acquired by the Company. He is currently serving as thenomination as

Executive Vice President of Nippon Gases Euro-Holding S.L.U., which manages the Group’s European

candidate forbusiness, and is scheduled to be appointed as its Chairman and President in July 2024.

director position

In view of his extensive background, we have nominated Mr. Giudici for a position as director in the
expectation that his experience and insight will contribute significantly to Group management.

Special interests

Raoul Giudici has no special interests in the Company.
* Scheduled to be appointed as Chairman and President of Nippon Gases Euro-Holding S.L.U. on July 1, 2024.

18❺ Miri Hara

(Date of birth: December 20, 1961) Female

Career summary, position and responsibilities in the Company

June 1988

Director, Hara Jisho Co., Ltd. (current)

October 2017 Founded Tax Corporation Yokohama Benten Accounting, Inc., and assumed Representative Certified Public
Tax Accountant (current)
June 2020

Outside director, SECOM CO., LTD. (current)

June 2021

Outside director, the Company (current)

Significant concurrent positions

Reappointment

Representative Certified Public Tax Accountant, Tax Corporation Yokohama Benten Accounting, Inc.
Outside director, SECOM CO., LTD.

outside director
independent
Reasons for

Number of Company shares
owned:
0

nomination as
candidate foroutside director

Years of service as an outside
director:3

position

Miri Hara has served as a director of real estate management company over many years, and also has
wide-ranging experience of serving as Representative Certified Public Tax Accountant of Tax
Corporation, and an outside director at a publicly listed company. We have nominated Ms. Hara as a
candidate for outside director in the expectation that she will effectively apply her wide experience andprofessional expertise of corporate accounting as a Certified Public Tax Accountant to the managementof our Group, also from the viewpoint of promoting diversity and women's empowerment.

Record of attendance at the Boardof Directors meetings:
Special interests
12 appearances at 12 meetings
Miri Hara has no special interests in the Company.
Reporting of independent director status

Miri Hara is a candidate for the position of outside director. Also, she satisfies the requirements for independent directors as set
forth by the Securities Listing Regulations of the Tokyo Stock Exchange, and we have notified the Tokyo Stock Exchange ofher selection as an independent director. If this Proposal is approved and adopted, we will notify the Tokyo Stock Exchange ofher continued selection as an independent director.
Overview of liability limitation agreement

With regard to liability for damages as provided for in Article 423, Paragraph 1 of the Companies Act, the Company and Miri
Hara have entered into a liability limitation agreement that limits said liability to the amount stipulated by law in accordancewith the provisions of Article 427, Paragraph 1 of the Companies Act. This agreement with Ms. Hara will be extended if she
is reelected as a director.

19❻ Katsumi Nagasawa(Date of birth: October 18, 1956) Male

Career summary, position and responsibilities in the Company

April 1980
April 2006
October 2008
October 2010
January 2011
April 2012
April 2014

Reappointment
outside director
independent
Number of Company shares
owned:
700

April 2016
April 2017
April 2019
June 2020
June 2022

Joined Hitachi, Ltd.
General Manager of Nuclear Power Business Development & Management Division, Nuclear Systems
Division, Power Systems Group, Hitachi, Ltd.
Vice President of Hitachi Power Systems America, Ltd. (now Mitsubishi Power Americas, Inc.*)
General Manager of Global Business Division, Power Systems Company, Hitachi, Ltd.
General Manager of Global Business Division, Power Systems Company, Hitachi, Ltd., and CSO of
Hitachi-GE Nuclear Energy, Ltd.
Corporate Officer for Hitachi, Ltd.; General Manager of Hitachi Works, Power Systems Company, Power
Systems Group, Hitachi, Ltd.
Vice President and Executive Officer, President & CEO of Power Systems Company, Power Systems
Group, Hitachi, Ltd.
Vice President and Executive Officer, CEO of Nuclear Business Unit, Hitachi, Ltd.
Senior Corporate Officer for Hitachi, Ltd., General Manager of Global Nuclear Business Division, Nuclear
Business Unit, Hitachi, Ltd.
Chairman of the Board, Hitachi-GE Nuclear Energy, Ltd.
Outside director, Sugino Machine Limited (current)
Outside director, the Company (current)

Significant concurrent positions

Outside director, Sugino Machine Limited
Years of service as an outside
director:
2
Record of attendance at the Boardof Directors meetings:
12 appearances at 12 meetings

Re a s o n s fornomination as
candidate foroutside director
position

Katsumi Nagasawa had been engaged in the nuclear power business for many years at a general electricalappliance manufacturer, and subsequently served as a corporate executive officer of the company and as
the chairman of the board of directors of its group company, among other important positions. We havenominated Mr. Nagasawa as a candidate for outside director in the expectation that he will effectively
apply his wide experience and professional expertise in the field of technology, and a wealth of experiencein corporate management in the manufacturing industry to the management of our Group.

Special interests

Katsumi Nagasawa has no special interests in the Company.
Reporting of independent director status

Katsumi Nagasawa is a candidate for the position of outside director. Also, he satisfies the requirements for independent
directors as set forth by the Securities Listing Regulations of the Tokyo Stock Exchange, and we have notified the Tokyo Stock
Exchange of his selection as an independent director. If this Proposal is approved and adopted, we will notify the Tokyo Stock
Exchange of his continued selection as an independent director.
Overview of liability limitation agreement

With regard to liability for damages as provided for in Article 423, Paragraph 1 of the Companies Act, the Company andKatsumi Nagasawa have entered into a liability limitation agreement that limits said liability to the amount stipulated by law
in accordance with the provisions of Article 427, Paragraph 1 of the Companies Act. This agreement with Mr. Nagasawa will
be extended if he is reelected as a director.
*The nuclear power-related business of the former Hitachi Power Systems America, Ltd. was transferred to Hitachi America,
Ltd.

20

❼ Masako Miyatake(Date of birth: August 19, 1958) Female

Career summary, position and responsibilities in the Company

April 1983
October 2002
October 2002
June 2004
November 2014
November 2014

Reappointment
outside director
independent
Number of Company shares
owned:
0Years of service as an outside
director:
2
Record of attendance at the Boardof Directors meetings:
12 appearances at 12 meetings

April 2015
April 2018
December 2018
March 2019
April 2019
April 2021
June 2022
April 2024

Joined The Chase Manhattan Bank N.A (now JPMorgan Chase Bank, N.A.)
Registered as an attorney(Deregistered in 2011 to study abroad and reregistered in 2014)
Joined Koga & Partners
Joined Asahi & Koma Law Offices (now Nishimura & Asahi)
Joined Nakano Law Office
Reconciliator, Dispute Reconciliation Center for Nuclear Damage Compensation regarding
Fukushima Nuclear Plant, Ministry of Education, Culture, Sports, Science and Technology(current)
Conciliation Commissioner, Tokyo Family Court (current)
Joined Blakemore & Mitsuki (current)
Deputy Secretary-General, Japan International Dispute Resolution Center
Outside director, SUMIDA CORPORATION
Visiting Professor, Keio University Law School
Professor, Keio University Law School
Outside director, the Company (current)
Visiting Professor, Keio University Law School (current)

Significant concurrent positions

Visiting Professor, Keio University Law School
Special Counsel, Blakemore & Mitsuki

Re a s o n s fornomination as
candidate foroutside director
posi tion

Having accumulated a wealth of experience as an international lawyer over many years, Masako
Miyatake has been practicing law in the fields of international transactions, finance, corporate
governance, and litigation, arbitration and conciliation. Furthermore, she served as an outside director atanother publicly listed company. We have nominated her as a candidate for outside director in the
expectation that she will effectively apply her wide experience and professional expertise as an attorney
as well as her wide experience in international transactions and global point of view to the managementof our Group. Aside from her duties as an outside director, Ms. Miyatake has not been directly involvedin corporate management. However, we believe she is capable of effectively fulfilling the role of an
outside director at our Company, for the reasons given above.

Special interests

Masako Miyatake has no special interests in the Company.
Reporting of independent director status

Masako Miyatake is a candidate for the position of outside director. Also, she satisfies the requirements for independent
directors as set forth by the Securities Listing Regulations of the Tokyo Stock Exchange, and we have notified the Tokyo
Stock Exchange of her selection as an independent director. If this Proposal is approved and adopted, we will notify the Tokyo
Stock Exchange of her continued selection as an independent director.
Overview of liability limitation agreement

With regard to liability for damages as provided for in Article 423, Paragraph 1 of the Companies Act, the Company and
Masako Miyatake have entered into a liability limitation agreement that limits said liability to the amount stipulated by law inaccordance with the provisions of Article 427, Paragraph 1 of the Companies Act. This agreement with Ms. Miyatake will be
extended if she is reelected as a director.

21

❽ Hideo Nakajima(Date of birth: July 23, 1955) Male

Career summary, position, and responsibilities in the Company

April 1978

Joined the Ministry of Finance of Japan

July 2002

Director General of Budgeting and Personnel Management, Asian Development Bank(in Manila,Philippines)

July 2005

Commissioner, Japan Fair Trade Commission (in charge of international affairs)

January 2014

Secretary General, Japan Fair Trade Commission

September 2017 Special Advisor, White & Case LLP/White & Case Law Offices (Registered Association) (current)
June 2023

Outside director, the Company (current)

Reappointment

Significant concurrent positions

outside director

Special Advisor, White & Case LLP/White & Case Law Offices (Registered Association)

independent
Number of Company shares
owned:
0

Reasons fornomination as
candidate forYears of service as an outside
director:
1
Record of attendance at the Boardof Directors meetings:
10 appearances at 10 meetingsoutside director
position

Hideo Nakajima has occupied important posts at the Ministry of Finance and the Japan Fair Trade
Commission. He is currently serving as a special advisor to a law firm that provides global services. We
have nominated him as a candidate for outside director in the expectation that he will apply his wealth ofexperience and professional expertise to the management of our Group. Mr. Nakajima has not been
directly involved in corporate management. However, we believe he is capable of effectively fulfilling
the role of an outside director at our Company, for the reasons given above.

Special interests

Hideo Nakajima has no special interests in the Company.
Reporting of independent director status

Hideo Nakajima is a candidate for the position of outside director. Also, he satisfies the requirements for independent directors
as set forth by the Securities Listing Regulations of the Tokyo Stock Exchange and we have notified the Tokyo Stock Exchangeof her selection as an independent director. If this Proposal is approved and adopted, we will notify the Tokyo Stock Exchangeof his continued selection as an independent director.
Overview of liability limitation agreement

With regard to liability for damages as provided for in Article 423, Paragraph 1 of the Companies Act, the Company and Hideo
Nakajima have entered into a liability limitation agreement that limits said liability to the amount stipulated by law inaccordance with the provisions of Article 427, Paragraph 1 of the Companies Act. This agreement with Mr. Nakajima will be
extended if he is reelected as a director.

22❾ Katsuhito Yamaji(Date of birth: November 28, 1958) Male

Career summary, position and responsibilities in the Company

April 1982
April 2003
July 2009

outside director

Joined Yamaha Motor Co., Ltd.
Director, Yamaha Motor da Amazonia Ltda.
Senior General Manager, Manufacturing and Engineering Section, Technology Center, Yamaha Motor Co.,Ltd.
March 2012
Executive Officer, Senior General Manager, EG Manufacturing Section, Manufacturing Center, Yamaha
Motor Co., Ltd.
January 2014 Executive Officer, Chief General Manager, Manufacturing Center, Yamaha Motor Co., Ltd.
March 2015
Senior Executive Officer, Chief General Manager, Manufacturing Center, Yamaha Motor Co., Ltd.
January 2017 Senior Executive Officer, Chief General Manager, Manufacturing Center, concurrently in charge ofProcurement Center, Yamaha Motor Co., Ltd.
March 2017
Senior Executive Officer and Director, Yamaha Motor Co., Ltd.
March 2019
Managing Executive Officer and Director, Yamaha Motor Co., Ltd.
March 2022
Advisor, Yamaha Motor Co., Ltd. (current)
June 2023
Outside director, the Company (current)

independent

Significant concurrent positions

Reappointment

Number of Company shares
owned:
0Years of service as an outside
director:
1
Record of attendance at the Boardof Directors meetings:
10 appearances at 10 meetings

Advisor, Yamaha Motor Co., Ltd.

Reasons fornomination as
candidate foroutside director
position

Katsuhito Yamaji has worked for many years in the areas of technology development and production
and procurement at a transport equipment manufacturer, and engaged in management after assuming thepost of a director. We have nominated Mr. Yamaji as a candidate for outside director in the expectationthat he will effectively apply his professional expertise in overall technology and wide experience
including procurement, as well as experience in corporate management in the manufacturing industry, tothe management of our Group.

Special interests

Katsuhito Yamaji has no special interests in the Company.
Reporting of independent director status

Katsuhito Yamaji is a candidate for the position of outside director. Also, he satisfies the requirements for independent directors
as set forth by the Securities Listing Regulations of the Tokyo Stock Exchange and we have notified the Tokyo Stock Exchangeof his selection as an independent director. If this Proposal is approved and adopted, we will notify the Tokyo Stock Exchangeof his continued selection as an independent director.
Overview of liability limitation agreement

With regard to liability for damages as provided for in Article 423, Paragraph 1 of the Companies Act, the Company andKatsuhito Yamaji have entered into a liability limitation agreement that limits said liability to the amount stipulated by law inaccordance with the provisions of Article 427, Paragraph 1 of the Companies Act. This agreement with Mr. Yamaji will be
extended if he is reelected as a director.

=============================================================================(Note) Matters common to all candidates for directors
The Company has entered into a directors and officers (D&O) liability insurance agreement with an insurance company
as stipulated in Article 430-3, Paragraph 1 of the Companies Act. In the event that claims for damages including third
party litigations, derivative lawsuits, and corporate litigations are made against the insured persons including directorsof the Company due to the acts in the course of their duties as directors and officers of the Company, the said insurance
agreement shall compensate for legal damages and litigation expenses to be borne by the insured. (However, the said
insurance agreement shall not cover damages arising from any criminal acts, etc. committed by the insured.) If eachcandidate is reelected or elected, each candidate will be insured under the said insurance agreement. Also, the Company
intends to renew the said insurance agreement at the time of next renewal.

23

Proposal 3: Election of two Audit & Supervisory Board members

The terms of office of Audit & Supervisory Board members Masahiro Osada and Kazuya Kobayashi will expire
at the conclusion of this Meeting. Accordingly, the Company proposes election of two Audit & Supervisory Board
members. This Proposal has the consent of the Audit & Supervisory Board (hereinafter, sometimes referred as“A&S Board”). The candidates for Audit & Supervisory Board member are as follows.
Notes
The candidates for Audit & Supervisory Board members were selected by the Board of Directors following
recommendation by the Advisory Committee on Appointments and Remuneration*, which consists of therepresentative director and president CEO, and independent outside directors.
* See “Reference: Advisory Committee on Appointments and Remuneration” on page 26 below for the outline of
the Advisory Committee on Appointments and Remuneration.

❶ Kentaro Akashi(Date of birth: September 6, 1961) Male

Career summary, position and responsibilities in the Company

April 1984
April 2008
April 2010
April 2011
July 2013
April 2014

New appointment

April 2015

outside A&S Board
memberApril 2016independent

April 2017
June 2017
April 2018
April 2021
April 2024

Number of Company shares
owned:
0

Joined Fuji Bank, Ltd. (now Mizuho Bank, Ltd.)
General Manager of Products Operation Management Department, Mizuho Corporate Bank, Ltd. (nowMizuho Bank, Ltd.)
General manager, Hong Kong Branch, Mizuho Corporate Bank
Executive Officer, General Manager of Hong Kong Corporate Banking Division No. 1 and No.2, Mizuho
Corporate Bank Hong Kong
Executive Officer, General Manager of Hong Kong Corporate Banking Division No. 1 and No.2, Mizuho
Bank Hong Kong
Managing Executive Officer, Mizuho Securities Co., Ltd., Chairman of Mizuho Securities Asia Limited,
In charge of Investment Banking GroupManaging Executive Officer, Mizuho Securities Co., Ltd., Chairman of Mizuho Securities Asia
Limited, In charge of Investment Banking Business
Managing Executive Officer, Mizuho Securities Co., Ltd., Chairman of Mizuho Securities Asia Limited,
In charge of Global Investment Banking Business
Senior General Manager, Mizuho Securities Co., Ltd.
Executive in charge of investment management, Corporate Strategy Division, JTB Corp.
Executive Officer, In charge of Investment Strategy, Corporate Strategy Division, JTB Corp.
Executive Officer, In charge of Investment Financial Strategy, JTB Corp.
Advisor of the Company (current)

Significant concurrent positions（＊）

None

Reasons fornomination as
candidate foroutside Audit &Supervisory
Board member

Kentaro Akashi has amassed a long career in financial institutions, and possesses wide-ranging
experience in the fields of accounting and finance.
In view of his extensive background, we have nominated Mr. Akashi for a position as an outside Audit& Supervisory Board member in the expectation that his experience and insight will contributesignificantly to the audit system of our Group.

Special interests
Kentaro Akashi has no special interests in the Company.
Reporting of independent A&S Board member status
Kentaro Akashi is a candidate for the position of outside Audit & Supervisory Board member. Also, he satisfies therequirements for independent A&S Board member as set forth by the Securities Listing Regulations of the Tokyo Stock
Exchange, and we have notified the Tokyo Stock Exchange of his selection as an independent A&S Board member If this
Proposal is approved and adopted, we will notify the Tokyo Stock Exchange of his selection as an independent A&S Board
member.
（＊）

Scheduled to be appointed as part-time Audit & Supervisory Board member of Taiyo Nippon Sanso Corporation on June 18,
2024.

24

❷ Kohei Ichiya(Date of birth: January 12, 1964) Male

Career summary, position and responsibilities in the Company

April 1987
April 2013

Joined Mitsubishi Chemical Industries Limited (now Mitsubishi Chemical Corporation)
Group Manager of Corporate Strategy Office, Mitsubishi Chemical Holdings Corporation (nowMitsubishi Chemical Group Corporation)

April 2017
April 2018

Group Manager, Corporate Management Department, Mitsubishi Chemical Corporation
General Manager, Finance Department, Mitsubishi Chemical Holdings Corporate Staff, Inc. (nowMitsubishi Chemical Group Corporation)

New appointment
outside A&S Board
memberNumber of Company shares
owned:
0

April 2020

Director, General Manager of Finance and Accounting Division, Japan Polychem Corporation

April 2024

Advisor of the Company (current)

Significant concurrent positions
None

Re a s o n s fornomination as
candidate foroutside Audit &S u pervisory
Board member

Kohei Ichiya has worked for many years in the field of corporate management and finance andaccounting at chemical companies, and possesses wide-ranging experience in the fields of accounting
and finance.
In view of his extensive background, we have nominated Mr. Ichiya for a position as an outside Audit &Supervisory Board member in the expectation that his experience and insight will contribute significantly
to the audit system of our Group.

Special interests

Kohei Ichiya has no special interests in the Company.
* The above section of “Career summary and positions in the Company” for Kohei Ichiya includes positions and responsibilities
as an executive at the Company’s parent company Mitsubishi Chemical Group Corporation and its subsidiaries during the pastten years.

============================================================================(Note) Matters concerning all candidate for Audit & Supervisory Board members
The Company has entered into a directors and officers (D&O) liability insurance agreement with an insurance company
as stipulated in Article 430-3, Paragraph 1 of the Companies Act. In the event that claims for damages including third
party litigations, derivative lawsuits, and corporate litigations are made against the insured persons including Audit &Supervisory Board members of the Company due to the acts in the course of their duties as directors and officers of theCompany, the said insurance agreement shall compensate for legal damages and litigation expenses to be borne by the
insured. (However, the said insurance agreement shall not cover damages arising from any criminal acts, etc. committed
by the insured.) If each candidate is elected, the candidate will be insured under the said insurance agreement. Also, theCompany intends to renew the said insurance agreement at the time of next renewal.

25Reference: Advisory Committee on Appointments and Remuneration
The Company has established an Advisory Committee on Appointments and Remuneration as adiscretionary advisory committee under the Board of Directors. The Company representative director
and president CEO and five independent outside directors are the members of this committee. The
committee is chaired by an independent outside director.
The Board of Directors consults with and receives advise from the Advisory Committee on
Appointments and Remuneration on the election of candidates for the position of director and Audit& Supervisory Board member, appointment and removal of the president (CEO), election anddismissal of executive officers, and revisions to the internal regulations governing the remunerationof the Board of Directors, thereby ensuring the transparency and objectivity of decision making.
Reference: Standards for the Independence of Outside Directors
and Audit & Supervisory Board members
The Company considers a candidate for the position of Outside Director or Audit & Supervisory
Board member to be independent provided the candidate does not fit any of the descriptions listed
below as a result of a reasonable and feasible investigation by the Company.
1． A person who executes business for the Company and for a Company subsidiary (collectively
the “Group”)*1.
2． A person who executes business for the Company’s parent company or one of the Company’ssister companies.
3． A major shareholder of the Company (who directly or indirectly holds 10% or more of the total
voting rights), or a person who executes business for such a shareholder.
4． A major business partner of the Group, or a person who executes business for such a partner:(1) A major supplier*3 of the Company or important subsidiary of the Company*2, or a person
who executes business for such a supplier(2) A major client*4 of the Company or important subsidiary of the Company, or a person who
executes business for such a client(3) A major financial institution*5 from which the Group raised funds, or a person who executes
business for such a financial institution.
5． A person who executes business for an auditing firm which is the Group’s accounting auditor.
6． A person who executes business for a company in which an individual with an executive role in
the Group serves as an outside director or an outside audit & supervisory board member.
7． A consultant, accounting professional, legal professional or any other individual who receives
on average 10 million yen or more in cash or other assets per year in the last three fiscal years
from the Group in addition to officer’s remuneration*6.
8． A person, or board member or other persons executing business for a judicial person, partnershipor other organizations, who receives on average 10 million yen or more per year as donation in
the last three fiscal years from the Group.
9． A spouse or relative within the second degree of kinship of a person who falls under any of thefollowing (excluding non-important personnel):
A person as described in 1 through 8 above
However, those who are considered applicable shall fall under 1 or 2 above for the past ten years,
and under 3 through 8 above for the past three years.
Supplementary provision: These Standards shall be effective for persons newly appointed from April
1, 2022 onwards.
*1 A person who executes business refers to a director, corporate executive officer, executive officer, managing member
who executes operations, board member and those equivalent thereto and employees of a judicial person, partnership,or other organizations.
*2 Important subsidiaries of the Company refer to TAIYO NIPPON SANSO CORPORATION, Matheson Tri-Gas, Inc.,
Nippon Gases Euro-Holding S.L.U., and THERMOS K.K.
*3 A major supplier refers to a party who received payment of 2% or more of that supplier’s annual consolidated net sales
in the most recent fiscal year from the Company or its important subsidiaries.
*4 A major client refers to a party to whom the Company or its important subsidiaries sold goods or services of 2% ormore of its consolidated net sales in the most recent fiscal year.
*5 A major financial institution refers to a party whose outstanding loans to the Group exceed 2% of the Company’s
consolidated total assets at the end of the most recent fiscal year.
*6 If the recipient is a judicial person, partnership, or other organization, this includes persons belonging to thatorganization.
-end of page of - Reference Documentation for the General Meeting of Shareholders-26(Attachment)

Business Report
From April 1, 2023
to March 31, 2024

1. Current Status of Corporate Group(1) Business conditions in fiscal year under review
1) Overview of Business Results for the Fiscal Year Under Review
Nippon Sanso Holdings Group (NSHD Group) delivered positive profit growth for the fiscal year under review(from April 1, 2023 to March 31, 2024) despite challenging geopolitical issues, rising trade tensions, global inflation,
JPY depreciation, and a soft semiconductor market. Air separation gases (oxygen, nitrogen, and argon) transported
via either truck or on-site pipeline to steel, chemical, and petroleum refining sectors, have decreased compared to theprevious fiscal year. In addition, compared to prior year, there has been a moderation of energy related production
costs, where they previously had been high. Furthermore, price management has been successful in passing costs
through to our customers and our robust productivity projects continue to yield positive financial result. These factors
enabled the NSHD Group to achieve the following results for the full fiscal year under review.
Revenue on a consolidated basis increased by 5.8% year-on-year to ¥1,255,081 million, core operating income
increased by 34.8% to ¥165,996 million, operating income increased by 43.9% to ¥172,041 million, and net income
attributable to owners of the parent increased by 44.9% to ¥105,901 million.
As for the impact of foreign exchange rates year-on-year, JPY depreciated against the USD from ¥136.00 to ¥145.31(+¥9.31, or +6.8%), against the EUR from ¥141.62 to ¥157.72 (+¥16.10, or +11.4%). As a result, overall revenue andcore operating income were favorably impacted by approximately ¥59.8 billion and ¥7.5 billion respectively.
Core operating income is calculated by excluding from operating income certain gains and losses attributable to nonrecurring factors such as losses incurred due to business withdrawal or downsizing.
(Overview of business performance by reportable segment)
A breakdown of business performance by reportable segment is as follows.
Segment income represents core operating income.

27

a. Japan
In the industrial gas-related business, revenue increased year-on-year mainly due to price management activities
against rising costs, despite lower shipment volumes of core products such as air separation gases and LP gas. In addition,
the shipment volume of specialty gases for the electronics industry declined. In equipment and installation, bothindustrial gas-related and electronics-related businesses posted higher revenues, mainly due to medium and large sized
projects which are accounted for on a percentage-of-completion basis. Meanwhile, there was a decrease in revenue due
to two items: the conversion of a consolidated on-site subsidiary to a joint operation entity and the deconsolidation of a
subsidiary responsible for resident-use LP gas.
As a result, in the Japan segment, revenue decreased by 1.4% year-on-year to ¥414,365 million and segment income
increased by 35.7% to ¥42,998 million.
b. United States
In the industrial gas-related business, revenue increased year-on-year mainly due to impact of the weak JPY and pricemanagement activities. Air separation gases experienced lower shipment volumes due to soft industrial trends. In
equipment and installation, industrial gas-related sales were flat to the previous fiscal year, but electronics-related
equipment sales were favorable, thereby increasing sales.
As a result, in the United States segment, revenue increased by 14.5% year-on-year to ¥347,054 million and segment
income increased by 34.9% to ¥50,004 million.

28

c. Europe
Revenue increased in the industrial gas-related business year-on-year mainly due to the impact of the weak JPY andprice management activities despite slightly lower core product volumes such as air separation gases. Equipment andinstallation, continues with positive performance in both industrial gas-related sales and medical-related equipment.
As a result, in the Europe segment, revenue increased by 10.8% year-on-year to ¥302,477 million, and segment
income increased by 52.6% to ¥532,59 million.
d. Asia & Oceania
In the industrial gas-related business, revenue increased year-on-year mainly due to price management activities
against rising costs and weak JNY, despite lower shipment volumes of core products such as air separation gases. In
LP gas, of which a large portion of sales are in the Australia region, sales volumes slightly decreased. In the electronicsrelated business, revenue declined significantly in East Asia due to softness in both gas and equipment demand due tocustomer inventory adjustments and customer postponements of capital investment.
As a result, in the Asia & Oceania segment, revenue increased by 0.2% year-on-year to ¥160,327 million and segment
income increased by 3.1% to ¥15,948 million.

29

e. Thermos
In Japan, sales from portable vacuum-insulated mugs and sports bottles were firm, and revenue increased. Overseas,revenues were flat to the previous fiscal year. Segment income decreased due to rising raw material prices from inflationand production costs increased due to the weak JPY.
As a result, the Thermos segment revenue increased by 1.9% year-on-year to ¥30,765 million, the segment income
decreased by 7.6% to ¥5,566 million.

(Note) The core operating income of ¥165,996 million yen for the fiscal year is the total amount of core operating incomeof each segment minus the adjustment amount of ¥1,780 million. The negative adjustment of segment income is comprisedof (¥313) million of intersegment eliminations and companywide expenses of (¥1,467) million that were not allocated to any
particular reportable segment. The companywide expenses are related principally to group management expenses that were
not allocated to a particular reportable segment.

30

(Reference) Industrial gas supply systems

312) Plant & equipment investments
The Group makes capital investments primarily to acquire new facilities, including gas production facilities,
upgrade existing facilities, rationalize, and conduct research and development.
The total investment in the Group’s plant and equipment in the fiscal year under review was 139,138 million yen.
The breakdown by segment is as follows.
Segment

Capital expenditureJapan

24,674 mil. yen

United States

64,210 mil. yen

Europe37,738 mil. yen

Asia & Oceania

11,810 mil. yen

Thermos Business

1,022 mil. yen(Note) In addition to the above, companywide (common) capital investment amounted to 35 million yen, andintersegment eliminations amounted to -353 million yen.

3) Fund procurements
Item

Balance at the beginning Balance at the end of theof the period

periodChangeBorrowings

676,354 mil. yen

675,801 mil. yen-552 mil. yen

Bonds and commercial papers

223,665 mil. yen

214,457 mil. yen-9,208 mil. yen

Total

900,020 mil. yen

890,259 mil. yen-9,761 mil. yen

4) Important organizational restructuring, etc.
Our subsidiary, Taiyo Nippon Sanso Energy Corporation, merged with Atmos Retailing Corporation in anabsorption-type merger on January 1, 2024, and changed its name to Atmos Retailing Corporation. The Company’s
share ratio after the absorption-type merger is 35%, and its related company category was changed from “subsidiary”
to “affiliated company.”32

(2) Assets & profits/losses in the past three fiscal years
Category
Revenue(millions of yen)Core operating income(millions of yen)
Operating income(millions of yen)

(FY Under Review)FYE March 2021

FYE March 2022

FYE March 2023

818,238

957,169

1,186,683

1,255,081

87,251

102,710

123,124

165,996

88,846

101,183

119,524

172,041

55,214

64,10373,080105,901

127.59148.13168.85244.66

1,836,294

1,977,026

2,158,950

2,409,083

543,900

661,137

757,996

946,112FYE March 2024

Net income attributableto owners of the parent(millions of yen)
Basic earnings per
share (yen)(FY Under Review)
Total assets(millions of yen)
Total equity(millions of yen)

(Note) The Group has applied the International Financial Reporting Standards (IFRS) from the fiscal year ended March 31, 2017.

33

(3) Status of parent company & significant subsidiaries
1) Status of parent company
Our parent company is Mitsubishi Chemical Group Corporation, which owns 218,996,000 shares or 50.59% of
Nippon Sanso Holdings Corporation stock.
The Company concluded a master agreement with Mitsubishi Chemical Group Corporation, dated May 13, 2014.
The agreement calls for Mitsubishi Chemical Group Corporation to respect the autonomy of the Company and toprovide us with comprehensive support and cooperation under the parent company’s “group management rules.”The Company paid Mitsubishi Chemical Group Corporation 1,361 million yen as outsourcing fees during the fiscal
year under review. The Company was given a necessary and sufficient explanation on the basis of the calculation before
the amount of the fees was determined. Additionally, the Board of Directors has carefully considered the explanationand concluded that these outsourcing fees are appropriate in light of the nature of the services to be provided.

2) Status of significant subsidiaries
Segment

Subsidiary nameTaiyo Nippon Sanso
Corporation

Capitalmil. yen
1,500

NSHD’sOwnership
Percentage (%)

Main business lines

100

Manufacture & sales of oxygen,nitrogen, argon, helium,hydrogen, gas-related equipment,
specialty gases, electronicsrelated equipment & installation,
semiconductor-producing
equipment, machinery & plants,liquefied petroleum gas, medicaluse gases, medical equipment,
stable isotopes

Japan
Nippon Ekitan
Corporation

mil. yen
600*85.30

Taiyo Nippon Sanso Gas& Welding Corporation

mil. yen
100*100

Matheson Tri-Gas, Inc.

US dollar
55.77

100

Western International
Gas & Cylinders, Inc.

US dollar
1,246,000*100

Manufacture & purchase andwholesale distribution ofacetylene, propylene, cylindergas, etc.

Nippon Gases EuroHolding S.L.U.

Euro
100,000,000

100

Ownership of shares in relatedcompanies in Europe

Nippon Gases Italia S.r.l.

Euro
30,000,000*100

Ownership of shares in relatedcompanies in Italy

Nippon Gases Espana
S.L.U.

Euro
1,012,180.16*100

Manufacture & sales of industrial
gases, medical-use gases, andrelated instruments in Spain

United States

EuropeManufacture & sales of liquefied
carbon dioxide, dry ice, and salesof various compressed andliquefied gases
Sales of cutting and welding
equipment, and manufacture &sales of various compressed
gases
Manufacture & sales of oxygen,nitrogen, argon, specialty gases,
hydrogen, equipment, sales of
cutting & welding equipment

34

Segment

Subsidiary name
Nippon Sanso Holdings
Singapore Pte. Ltd.
Leeden National Oxygen
Ltd.

NSC (Australia) Pty Ltd

Supagas Pty Ltd
Asia & Oceania Taiyo Nippon Sanso(China) Investment Co.,Ltd.
Taiyo Nippon Sanso
Trading (Shanghai) Co.,
Ltd.
Nippon Sanso Taiwan,(Note) 1.

Singapore dollar
233,436,140
Singapore dollar
53,483,649
Australian dollar
514,267,883
Australian dollar
3,600,000
US dollar
87,195,449
US dollar
2,870,000
New Taiwan dollar

Inc.

160,000,000

Matheson Gas Products

Korean won

Korea Co., Ltd.
Thermos

CapitalThermos K.K.

10,572,500,000
mil. yen
300

NSHD’sOwnership
Percentage (%)

Main business lines

100

Ownership of shares in relatedcompanies in Singapore*100

Manufacture, purchase, and salesof welding related instrument,
safety goods, and high-pressuregas, and manufacture & sales ofoxygen, nitrogen, and argon

98.95

Ownership of shares in relatedcompanies in Australia*100

Filling and sales of liquefied
petroleum gas and various
industrial gases, sales and rentalof related instruments

100

Ownership of shares in relatedcompanies in China*100

Sales of specialty gases*100

Manufacture & sales of nitrogen,sales of specialty gases andequipment*100

Manufacture & sales of specialty
gases

100

Manufacture & sales ofhousewares

Figures marked with an asterisk indicate our ownership ratio, including investment by subsidiaries.

2. Since the related companies’ category of K.K. JFE Sanso Center was changed from “subsidiary” to “affiliatedcompany” on June 30, 2024, the same was excluded from significant subsidiaries.

3. Continental Carbonic Products, Inc., was merged with Matheson Tri-Gas, Inc., on December 31, 2023, with
Matheson Tri-Gas, Inc. as the surviving company and was excluded from significant subsidiaries.

3) Status of specified wholly owned subsidiaries
None.

35

(4) Challenging issues to be addressed
The Company is operating its business in accordance with “NS Vision 2026—Enabling the Future” (hereinafter,“NS Vision 2026”), which the Company developed as its medium-term management plan covering the four years
from FYE March 2023 to FYE March 2026 toward achieving the Group Vision.
In the business environment surrounding the Group, inflationary trends in Europe and the U.S.A. and the impact ofpolicy rate hikes affected the global economy. Geopolitical issues, including the Russia-Ukraine conflict anddeteriorating Middle Eastern affairs, created the need to cultivate a new procurement route, which increased
navigation time and cost due to detour transportation. Energy price volatility and labor shortages also continued. The
Company actively implemented groupwide measures to promote price management and enhance productivity inresponse to the cost fluctuation arising from these factors.
We will continue carefully monitoring geopolitical risks, supply chain disruptions, and energy price fluctuation andrespond appropriately. In addition, the Company expects further development of digitalization, including thepromotion of the use of generative AI, the expansion of new production sites by semiconductor manufacturers due tothe increased tension between the US and China, and society-wide efforts to decarbonize in response to climatechange risks will accelerate, among other things. Therefore, the Company must capture new business opportunities
and establish its governance structure from a medium- to long-term perspective.
NS Vision 2026 established non-financial KPI targets in addition to financial KPI targets, with the following five
focused fields. Based on the recognition of the above environment, the Company will implement the plan while
reviewing individual measures as needed.
I.

Promote sustainability management: The Company endorsed Keidanren’s “Declaration of Biodiversity
and Action Policy” in FYE March 2024 and now participates in the “Keidanren Initiative for Biodiversity
Conservation.” In the environmental field, we remain committed to reducing greenhouse gas emissions
from our Group’s business activities and strive to provide a wider variety and higher quality of goods,
products, and services that contribute to the environment for our customers. Moreover, we are promoting
sustainable business operations through our endeavor to ensure process safety and improve product andservice quality, respecting human rights, ensuring diversity and inclusion of human resources to remain acompany trusted by society, and striving to enhance and gain support for compliance promotion activities.

II.

Explore new business toward carbon neutrality: The Group is committed to reducing greenhouse gas
emissions by our customers by providing goods, products, and services that contribute to the environmentand solutions. This fiscal year, we promoted proprietary technology development, including oxygenammonia and hydrogen-oxygen burners for industrial furnaces and ammonia decomposition hydrogenproduction technology. We also promoted business tie-ups and investments to build strategic relationships
with technological partners. Furthermore, we are enhancing the dedicated website on our Group initiatives.
We will continue to strengthen communication on our Group initiatives toward carbon neutrality.

III.

Expand the electronics business: We are reviewing our semiconductor gas and related equipment
production sites and enhancing our production capacity in response to the needs for semiconductor supply
chain management prompted by the heightened geopolitical risks. In the current fiscal year, we have
expanded the Taiwan factory that manufactures semiconductor gas-related equipment in response to thegrowing demand. In addition, we have been selected by a customer who aims to mass produce nextgeneration semiconductors in Japan as the architect and builder of their gas-related facilities and a supplierof bulk gases for their pilot line. We are promoting initiatives to commercialize ultra-high purity air
separation units that will be required to cater for the strong demand in large semiconductor manufacturing
plant construction.

36

IV.

Pursue operational excellence: Each operating company strongly promoted productivity improvement
to maximize profit. In this fiscal year, we launched a project to promote operational excellence tostrengthen Group cooperation and further improve the effectiveness of our productivity improvement
activities. Best practice by each operating company is introduced at the “Operational Excellence Day”
event to enhance awareness of productivity improvement by each company. In addition, the Group ismaking a collective effort to promote the initiative by establishing a separate working group in eachcompany to further promote lateral deployment of the project.

V.

Promote DX initiatives leading to new value creation: Each operating company promotes upgrading
its business model using digital data to improve productivity and product price management. In Thermos,
the Group’s B2C business, digital data is promoted for initiatives to enhance customer and employee
satisfaction, including expanding the members’ site for customers and using AI for customer support.

Each industrial gas business in the four geographic hubs focuses on the above five key strategies while addressing
management issues specific to each region.
⚫ Japan: We will continue to review our business portfolio and implement various programs to enhance
profitability. We will also work to strengthen new products and services by expanding facilities to capture thevarious demands created by the expansion of the domestic electronics industry and provide stable supply. In
addition, we will realize innovation, starting with using gas, and aim to explore and expand new businessareas.
⚫ United States: We will seek to increase the density and scale of the business by expanding new on-sitebusiness, continuing pricing activities in response to inflationary trends, and expanding production bases tocapture the demand for dry ice from the cold chain logistics system. We will also promote the smooth
implementation of large capital expenditures, such as constructing large-scale hydrogen production plants
using renewable fuel.
⚫ Europe: We will focus on resilient markets such as food and health care and promote measures to capture thedemand for related products in response to the expansion of the European electronics market. We also aim tocapture environment-related business opportunities in the region. As part of such efforts, we will promote
expanding the oxygen combustion technology area and activities to win projects for expanding thebiomethane market.
⚫ Asia and Oceania: We are making efforts to acquire large-scale on-site projects, increase the ASUs’ capacity,and expand products for the electronics market, which has significant room for growth in the region. In
addition to air separation gases, we will promote increased production of various industrial gases, including
carbon dioxide. As the region is expected to maintain strong economic growth, we will continue to focus on
expanding new products, services, and business areas, while also striving to gain support for productivity
enhancement activities to improve the profitability of each operating company.
In Thermos, the Group’s sole B2C business, we aim to boost demand by actively launching new products while
using flexible advertisement and offering storefront promotions. We will expand directly operated stores and ecommerce to diversify our sales channels.

37

(5) Contents of main business lines (as of March 31, 2024)
Segment

Main products & services
Oxygen, nitrogen, argon, carbon dioxide, helium, hydrogen, acetylene, gas-relatedJapanequipment, specialty gases (electronic material gas, pure gas, etc.), electronics-related

United Statesequipment & installation, semiconductor-producing equipment, cutting & welding

Europeequipment, welding materials, machinery & plants, liquefied petroleum gas & related

Asia & Oceania

equipment, medical-use gases (oxygen, nitrous oxide, etc.), medical equipment, stable
isotopes

Thermos BusinessHousewares(6) Main business offices, etc. (as of March 31, 2024)
1) Company
Head office

Shinagawa-ku, Tokyo

2) Subsidiaries
Company nameLocation of head office

Taiyo Nippon Sanso Corporation

Shinagawa-ku, Tokyo, Japan

Nippon Ekitan Corporation

Minato-ku, Tokyo, Japan

Taiyo Nippon Sanso Gas & Welding Corporation

Osaka City, Osaka., Japan

Matheson Tri-Gas, Inc.

Texas, U.S.A.

Western International Gas & Cylinders, Inc.

Texas, U.S.A.

Nippon Gases Euro-Holding S.L.U.

Madrid, Spain

Nippon Gases Italia S.r.l.

Milano, Italy

Nippon Gases Espana S.L.U.

Madrid, Spain

Nippon Sanso Holdings Singapore Pte. Ltd.

Singapore

Leeden National Oxygen Ltd.

Singapore

NSC (Australia) Pty Ltd.

New South Wales, Australia

Supagas Pty Ltd.

New South Wales, Australia

Taiyo Nippon Sanso (China) Investment Co., Ltd.

Liaoning, China

Taiyo Nippon Sanso Trading (Shanghai) Co., Ltd.

Shanghai, China

Nippon Sanso Taiwan, Inc.

Hsinchu, Taiwan

Matheson Gas Products Korea Co., Ltd

Asan, South Korea

Thermos K.K.

Tsubame City, Niigata Pref., Japan

38

(7) Employees (as of March 31, 2024)
Segment

No. of employees

Japan

5,916

-408

United States

4,705

+157

Europe

3,124

+111

Asia & Oceania

4,377

+98

Thermos Business

1,320

-7

Segments Total

19,442

-49

91

+3

19,533-46

Companywide (common)
Total

Year-on-year changes(Note) The numbers are those of employees.

(8) Main sources of borrowings (as of March 31, 2024)
Source of Borrowings

Amount of Borrowings

Mizuho Bank, Ltd.

278,520 mil. yen

MUFG Bank, Ltd.

140,483 mil. yen

The Norinchukin Bank

139,090 mil. yen

39

2. Status of Company(1) Status of shares (as of March 31, 2024)
1) No. of authorized shares
2) No. of shares issued
3) No. of shareholders
4) Major shareholders (top 10)

1,600,000,000
433,092,837
18,129Status of investment in Company

Shareholder

Shares held

Shares held(in 1,000 shares)(%)

Mitsubishi Chemical Group Corporation

218,996

50.59

The Master Trust Bank of Japan, Ltd. (trust account)

29,632

6.85

Client shareholding association of Taiyo Nippon Sanso Corporation

16,706

3.86

Custody Bank of Japan, Ltd. (trust account)

11,4222.64

Meiji Yasuda Life Insurance Company

9,006

2.08

Mizuho Bank, Ltd.

4,332

1.00

The Bank of New York Mellon 140044

3,393

0.78

State Street Bank West Client – Treaty 505234

3,179

0.73

Ibiden Co., Ltd.

3,004

0.69

JP Morgan Chase Bank 385632

2,806

0.65

(Note) 1. Our Company has 187,000 treasury shares.
2. The shareholding ratio excludes treasury shares.

40

(2) Status of Company officers
1) Status of directors & Audit & Supervisory Board members (as of March 31, 2024)
Name

GenderPosition

Duties in charge & main concurrent posts
Chairperson of the Board

Toshihiko Hamada

Male

Representative Director

CEO
Member ofAdvisory Committee onAppointments andPresident

Remuneration
Kenji Nagata
Thomas Scott
Kallman
Eduardo Gil Elejoste

Representative Director & President, Taiyo Nippon Sanso

Male

Director

Male

Director

Chairman and CEO, Matheson Tri-Gas, Inc.

Male

Director

Chairman and President, Nippon Gases Euro-Holding S.L.U.

Corporation

Member ofAdvisory Committee onAppointments andRemuneration
Miri Hara

FemaleRepresentative Certified Public Tax Accountant, Tax

Director

Corporation Yokohama Benten Accounting, Inc.
Member of the Board (Outside director), SECOM CO., LTD.
Chairman ofAdvisory Committee onAppointments and
Katsumi Nagasawa

Male

Remuneration

Director

Outside director, Sugino Machine Limited
Member ofAdvisory Committee onAppointments and
Masako Miyatake

FemaleRemuneration

Director

Professor, Keio University Law School
Special Counsel, Blakemore & Mitsuki
Member of Advisory Committee on Appointments

Hideo Nakajima

Maleand Remuneration

Director

Special Advisor, White & Case LLP/White & Case Law
Offices (Registered Association)
Member of Advisory Committee on Appointments and

Katsuhito Yamaji

Male

Remuneration

Director

Advisor, Yamaha Motor Co., Ltd.
Satoshi Wataru

Male

Akihiro Hashimoto

Male

Masahiro Osada

Male

Kazuya Kobayashi

Male

A&S Board member(Full-time)
A&S Board member(Full-time)
A&S Board member(Full-time)
A&S Board member

A&S Board member (Part-time), Taiyo Nippon Sanso
Corporation(Full-time)

41

(Notes) 1. Representative Director and President Toshihiko Hamada is appointed CEO because he has abundant knowledge
and experience over management and because he is expected to be capable of promoting the growth of ourCompany Group.
2. Directors Miri Hara, Katsumi Nagasawa, Masako Miyatake, Hideo Nakajima, and Katsuhito Yamaji are outside
directors.
3. A&S Board members Akihiro Hashimoto, Masahiro Osada, and Kazuya Kobayashi are outside A&S Board
members.
4. A&S Board members Satoshi Wataru, Akihiro Hashimoto, Masahiro Osada, and Kazuya Kobayashi havesignificant financial and accounting knowledge as follows.
・A&S Board member Satoshi Wataru has long-term professional experience at the Company as the generalmanager of the Finance Department and officer of the Corporate Planning Office and possesses substantial
financial and accounting knowledge.
・A&S Board member Akihiro Hashimoto has long-term professional experience at financial institutions, andpossesses a substantial level of financial and accounting knowledge.
・A&S Board member Masahiro Osada has long-term professional experience at the accounting department ofa chemical company, and possesses a substantial level of financial and accounting knowledge.
・A&S Board member Kazuya Kobayashi has long-term professional experience at financial institutions, andpossesses a substantial level of financial and accounting knowledge.
5. The Company has designated Directors Miri Hara, Katsumi Nagasawa, Masako Miyatake, Hideo Nakajima, andKatsuhito Yamaji, and A&S Board members Akihiro Hashimoto and Kazuya Kobayashi as independent directors/
A&S Board members based on the Tokyo Stock Exchange’s listing rules, and has reported them to the exchange.
6. Director Masako Miyatake retired as a Professor of Keio University Law School on March 31, 2024, and serves
as a Visiting Professor of Keio University Law School from April 1, 2024.

2) Overview of liability-limiting contract
In accordance with the Articles of Incorporation of the Company and Article 427 (1) of the Companies Act, theCompany has an agreement in place with each of its outside directors to limit their liability for damages stipulated in
Article 423 (1) of the Companies Act. The Company has set each outside director’s maximum liability amount fordamages in accordance with Article 425 (1) of the Companies Act.

3) Overview of contents of directors and officers (D&O) liability insurance agreement
The Company has entered into a directors and officers (D&O) liability insurance agreement with an insurancecompany as stipulated in Article 430-3, Paragraph 1 of the Companies Act. In the event that claims for damages
including third party litigations, derivative lawsuits, and corporate litigations are made against the insured persons dueto the acts in the course of their duties, the said insurance agreement shall compensate for legal damages and litigation
expenses to be borne by the insured.
The insured parties of the insurance policy are directors, A&S Board members, and executive officers, etc. of theCompany and all of its subsidiaries. The Company and the subsidiaries bear the full premium and the insured parties do
not need to pay. Also, to ensure the appropriateness of execution of duties by the insured, damages arising from illegal
receipt of private benefit or convenience by the insured, and criminal acts or acts committed with the knowledge thatthey violate laws and regulations, etc. by the insured, are not covered by the insurance policy.

4) Directors and A&S Board members who resigned or were discharged during the businessyear
A&S Board member Junzo Tai resigned as of the conclusion of the 19th Ordinary General Meeting of Shareholders
held on June 20, 2023.

42

5) Total amount of remunerations, etc. for directors & A&S Board members

Category of officers

Director(of which outside directors)
A&S Board members(of which outside A&S
Board members)

Total
remunerations(millions of yen)

Total amount of remunerations by type(millions of yen)

207

151

(60)
103

(60)
103

(―)
－

(―)
－

(7)
5

(75)

(75)

(―)

(―)

(3)

Basic
remuneration

Non-financial
KPI-linked
remuneration
9

No. ofcorresponding
officers

Performancelinked
remuneration
46

11

310
255
46
9
16
Total
(of which outside officers)
(135)
(135)
(―)
(―)
(10)
(Notes) 1. The Company does not pay a director-cum-employee the employee portion of his/her pay.
2. The total amount of remunerations for directors was limited to 800 million yen per year (including 50
million or less for outside directors, excluding their employee portion) under a resolution passed at the
11th Ordinary General Meeting of Shareholders held on June 23, 2015. (The number of directors as ofthe end of the relevant Ordinary General Meeting of Shareholders was 11, including two outside
directors.)
Due to the increase in the number of outside directors, etc., a resolution was passed at the 18th Ordinary
General Meeting of Shareholders on June 17, 2022, to retain the limit of 800 million yen as remuneration
for directors, of which the portion for outside directors will be “up to 100 million yen on an annual basis”(excluding the salary under employee status). The number of directors as of the end of the relevant
Ordinary General Meeting of Shareholders was 9 (including five outside directors).
3. The total amount of remunerations for A&S Board members is limited to 200 million yen per year undera resolution passed at the 3rd Ordinary General Meeting of Shareholders held on June 28, 2007. (Thenumber of A&S Board members as of the end of the relevant Ordinary General Meeting of Shareholders
was 4.)
4. The above total amount of remunerations includes remuneration, etc. paid to two directors who retired
and one A&S Board member who resigned during the fiscal year under review.

6) Matters related to performance-linked remunerations, etc.
a. Outline of performance-linked remunerations, etc.
The Board of Directors and the Audit and Supervisory Board consult with the Advisory Committee on Appointment& Remuneration about the appropriateness of the remuneration system for the directors and A&S Board members. The
Advisory Committee on Appointment & Remuneration discusses the issue and submits the result to the Board of
Directors and the Audit and Supervisory Board.
Remunerations for directors consist of (i) fixed “Basic Monthly Remuneration,” which is a base salary specific toeach rank; (ii) “Performance-linked Bonuses,” which vary according to business results; and (iii) “Non-financial KPIlinked Bonuses,” which are linked to the degree of achievement of “lost time injury frequency rate” and “rate ofreceiving compliance training” of non-financial KPIs set in the medium-term management plan. Remuneration for
directors is based, in principle, on the annual salary system, with the amount paid monthly equivalent to one-12th of theannual salary. Revision of remuneration is reflected in the payment made in July each year.
Of the remuneration, the amount of “(ii) Performance-linked Bonuses” is calculated corresponding to the degree ofachievement of each fiscal year’s budget based on medium-term management plan targets and improvements inbusiness results, and the amount of (iii) “Non-financial KPI-linked Bonuses” is calculated corresponding to the degreeof achievement of certain targets among the non-financial KPI. They are reflected separately in the remuneration paid
from July of the following business year (for example, the amount calculated based on the business results, etc., for FYEMarch 2023 (April 1, 2022 to March 31, 2023) is reflected in the directors’ remuneration paid from July 2023).
The proportion of (i) “Basic Monthly Remuneration,” (ii) “Performance-linked Bonuses,” and (iii) “Non-financial
KPI-linked Bonuses” are approximately five to four to one, respectively.

43

Also, outside directors and directors who mainly serve as officers of subsidiaries receive the fixed “Basic Monthly
Remuneration” only as remuneration for directors of the Company.
The Performance-linked Bonuses and Non-financial KPI-linked Bonuses are determined on the basis of thefollowing formulas, respectively.
••

Performance-linked Bonuses (variable) = Rank-specific standard amount x “coefficient based on evaluation
related to Performance-linked Bonuses” *Non-financial KPI-linked Bonuses (variable) = Rank-specific standard amount x “coefficient based on evaluation related
to Non-financial KPI-linked Bonuses” (*)* The following figures are applied to the “coefficient based on evaluation related to Performance-linked Bonuses”
and “coefficient based on evaluation related to Non-financial KPI-linked Bonuses,” respectively, in order to judge thestatus of achievements of medium-term management plan targets while strengthening the extent of their interlocking
with the Company’s business results as well as improving their objectivity and transparency.
Coefficient based on evaluation related to Performance-linked Bonuses➢ Degree of achievements of each fiscal year’s budget based on medium-term management plan targets(consolidated revenue and consolidated core operating profit margin)➢ Improvements in business results of each fiscal year (consolidated revenue, consolidated core operating
profit, and profit attributable to owners of the parent company)
Coefficient based on evaluation related to Non-financial KPI-linked Bonuses➢ The degree of achievement each fiscal year of (certain) non-financial KPIs set in the medium-term
management plan (“progress in lost time injury rate for each fiscal year” and “rate of receiving compliancetraining”)

44

b. Targets & results of indicators tied to Performance-linked Bonuses, etc. for directors (excluding outside directors
and directors who mainly serve as officers of subsidiaries) in FYE March 2024
1. Performance-linked Bonuses (100%)(1) Degree of achievements of FYE March 2023 budget based on medium-term management plan targets(41%)
Indicator for evaluation

Weight for evaluation

Consolidated revenue

20.5%

Consolidated core
operating profit margin

20.5%

FYE March 2023
Target950,000 mil. yen

FYE March 2023
Results
1,186,683 mil. yen

11.3%

10.4%

(2) FYE March 2023 performance improvements from FYE March 2022 results (59%)
Indicator for evaluation

Weight for evaluation

Consolidated revenue

19.6%

Consolidated core
operating profit

19.6%

Net income attributable toowners of the parent

FYE March 2022
Results

19.6%

FYE March 2023
Results

957,169 mil. yen

1,186,683 mil. yen

102,710 mil. yen

123,124 mil. yen

64,103 mil. yen

73,080 mil. yen

2. Non-financial KPI-linked Bonuses (100%)
Degree of achievement of (certain) non-financial KPIs set in the medium-term management plan
Indicator for evaluation

Weight for evaluationFYE March 2022
Results

FYE March 2023
Results

Lost time injury rate

70%

2.1

1.5

Rate of receiving
compliance training

30%

–

99%

The medium-term management plan sets the lost time injury rate target at 1.6 or less by FYE March 2026. The target
rate of receiving compliance training is 100% every fiscal year.

7) Details of non-monetary remuneration
None8) Matters related to resolutions at General Meeting of Shareholders regarding remuneration,etc. for directors & A&S Board members

This is as described in the above (Notes) 2. and 3. of “5) Total amount of remunerations, etc. for directors & A&S
Board members.”

459) Policy on determining contents of remuneration, etc. for individual directors
a. Method of determining policy on contents of remuneration, etc. for individual directors
The Board of Directors approved a policy on determining contents of remuneration, etc. for individual directors at its
meeting held on May 11, 2016. The Board also approved establishment of the Advisory Committee on Appointments& Remuneration and revision to the Company’s internal regulations on remuneration for directors at its meeting on June
21 that year. The Committee comprises two or more independent outside directors and the Representative Director, withan outside director acting as its chairman. The Committee has been discussing remuneration for directors continuously
and, based on the Committee’s recommendation, the internal regulations on remuneration for directors have beenrevised several times.
b. Overview of determination policy
The amount of remuneration, etc. for directors and A&S Board members is determined by a resolution adopted at theGeneral Meeting of Shareholders in the form of a cap on the total amount for all directors and another cap on the total
amount for all A&S Board members.
The amount of remuneration for each director is determined on the basis of the policy described in “6) Matters related
to performance-linked remunerations, etc.”
The amount of remuneration for individual directors in the fiscal year under review is calculated according to theinternal regulations on remuneration for directors approved by the Board of Directors on the basis of the above policy
on determining contents of remuneration, etc. for individual directors. Therefore, the Company believes the amount of
remuneration is in line with that policy.

10) Matters on delegation of authority on fixing remuneration, etc. for individual directors
At its meeting on June 20, 2023, the Board of Directors passed a resolution delegating the decision-making authority
to Representative Director and President Toshihiko Hamada regarding details of the amount of remuneration for
individual directors. The contents of the delegated authority are calculations and decisions regarding the monthly
amount of remuneration, performance-linked renumeration, and non-financial KPI-linked remuneration based on theinternal regulations on remuneration for directors. The reason for delegating these powers is that the Representative
Director and President who is in a position to supervise the Company’s business execution is best suited for determining
remuneration amounts based on the internal regulations.
The amount of remuneration for directors is to be unambiguously calculated from their rank and performance, etc.,
based on the internal regulations, and it is possible to verify the results of calculations by the Representative Director
and President. The result of the calculation is reported to the Advisory Committee on Appointments & Remuneration.

11) Matters related to outside officers
a. Status of significant concurrent jobs at other firms & relationship between Company & other firms•
Director Miri Hara is the Representative Certified Public Tax Accountant, Tax Corporation Yokohama Benten
Accounting, Inc., and an Outside director, SECOM CO., LTD. The Company and the two entities where she
concurrently works have no special interests in each other.
•
Director Katsumi Nagasawa is an outside director at Sugino Machine Limited. The Company and the entity
where he concurrently works have no special interests in each other.
•
Director Masako Miyatake is a professor at Keio University Law School* and a special counsel at Blakemore& Mitsuki. The Company and the two entities where she currently works have no special interests in eachother.
•
Director Hideo Nakajima is a Special Advisor at White & Case LLP/White & Case Law Offices (Registered
Association). The Company and the entity where he concurrently works have no special interests in each other.
•
Director Katsuhito Yamaji is an advisor at Yamaha Motor Co., Ltd. The Company and the entity where heconcurrently works have no special interests in each other.
* Director Masako Miyatake has retired as the Professor of Keio University Law School as of March 31, 2024, andis serving as a Visiting Professor of Keio University law School from April 1, 2024.

46

b. Main activities in fiscal year under review
・Main activities of outside directors & outside A&S Board members

Category

Outsidedirector

Outsidedirector

Outsidedirector

Outsidedirector

Name

Miri Hara

KatsumiNagasawa

MasakoMiyatake

Hideo Nakajima

Board meeting
attendance

Audit &
Supervisory Board
meeting
attendance

Main activities, remarks & overview of duties done in
relation to role expected of outside director―

Her experience as director of real estate managementcompany for many years, expert knowledge as Certified
Public Tax Accountant, and perspective of the promotionof diversity and women’s empowerment, were expected
to be effectively applied to the management of ourGroup. While offering necessary advice on the
promotion of diversity in the Company, she expressed
opinions, as a member of the Advisory Committee on
Appointments & Remuneration, in discussing theselection of candidates for directors/A&S Board
members, planning a successor to the President/CEO,mulling desirable remuneration for directors, etc.

12 appearances at
12 meetings

12 appearances at
12 meetings―

12 appearances at
12 meetings

10 appearances at
10 meetings

47

His wide experience and professional expertise mainly inthe field of technology, and a wealth of experience incorporate management in the manufacturing industry
was expected to be effectively applied to the
management of our Group. While offering necessary
advice and proposals on desirable ways of governanceand discussions on agenda items, he played a leadingrole, as Chairman of the Advisory Committee on
Appointments & Remuneration, in discussing theselection of candidates for directors/A&S Board
members, planning a successor to the President/CEO,mulling desirable remuneration for directors, etc.

―

Her wide experience and professional expertise as an
attorney as well as her experience in internationaltransactions and global point of view was expected to beeffectively applied to the management of our Group.
While offering necessary advice and proposals ondesirable ways of governance and discussions on agenda
items, she expressed opinions, as a member of theAdvisory Committee on Appointments & Remuneration,in discussing the selection of candidates for
directors/A&S Board members, planning a successor to
the President/CEO, mulling desirable remuneration for
directors, etc.

―

His rich experience at administrative organizations andexpert knowledge were expected to be effectively applied
to the management of our Group. While offering
necessary advice and proposals on desirable ways ofgovernance and discussions on agenda items, he
expressed opinions, as a member of the Advisory
Committee on Appointments & Remuneration, in
discussing the selection of candidates for directors/A&S
Board members, planning a successor to the
President/CEO, mulling desirable remuneration for
directors, etc.

CategoryOutsidedirector

Outside A&S
Board
memberOutside A&S
Board
memberOutside A&S
Board
memberName

Katsuhito
Yamaji

Akihiro Hashimoto

Masahiro Osada

Kazuya Kobayashi

Board meeting
attendance

Audit &
Supervisory Board
meeting
attendance

Main activities, remarks & overview of duties done in
relation to role expected of outside director―

His wide experience including procurement andprofessional expertise in the whole field of technology,
and a wealth of experience in corporate management in
the manufacturing industry was expected to be effectively
applied to the management of our Group. While offering
necessary advice and proposals on desirable ways ofgovernance and discussions on agenda items, he
expressed opinions, as a member of the Advisory
Committee on Appointments & Remuneration, in
discussing the selection of candidates for directors/A&S
Board members, planning a successor to the
President/CEO, mulling desirable remuneration for
directors, etc.

15 appearances at
15 meetings

He has provided the Board of Directors with advice toensure appropriateness of decision-making. Also, as afull-time A&S Board member, he also has held hearings
with directors on the status of business execution,exchanged opinions with the Representative Director andPresident, and visited subsidiaries on an audit mission.

15 appearances at
15 meetings

He has provided the Board of Directors with advice toensure appropriateness of decision-making. Also, as afull-time A&S Board member, he also has held hearings
with directors on the status of business execution,exchanged opinions with the Representative Director andPresident, and visited subsidiaries on an audit mission.

15 appearances at
15 meetings

He has provided the Board of Directors with advice toensure appropriateness of decision-making. Also, as afull-time A&S Board member, he also has held hearings
with directors on the status of business execution,exchanged opinions with the Representative Director andPresident, and visited subsidiaries on an audit mission.

10 appearances at
10 meetings

12 appearances at
12 meetings

12 appearances at
12 meetings

12 appearances at
12 meetings(Note) The Board of Directors were held 12 meetings in the fiscal year under review. In addition, a written resolution in lieu
of a resolution in accordance with Article 370 of the Companies Act was held once.

48

(3) Status of accounting auditor
1) Name: Ernst & Young ShinNihon LLC.
2) Amount of remuneration, etc.
Amount paid
Remuneration, etc. for accounting auditor associated with audit
for fiscal year under review
Total amount of money and other economic benefits to be paidby the Company and its subsidiaries to accounting auditor

108 mil. yen
233 mil. yen(Note) 1. Among the significant subsidiaries of the Company, the financial statements of Matheson Tri-Gas, Inc.,
Western International Gas & Cylinders, Inc., Nippon Gases Euro-Holding S.L.U., Nippon Gases Italia
S.r.l., Nippon Gases Espana S.L.U., Nippon Sanso Holdings Singapore Pte. Ltd., Leeden National OxygenLtd., NSC (Australia) Pty Ltd, Supagas Pty Ltd, Taiyo Nippon Sanso (China) Investment Co., Ltd., Taiyo
Nippon Sanso Trading (Shanghai) Co., Ltd., Nippon Sanso Taiwan, Inc., and Matheson Gas Products
Korea Co., Ltd. are audited (limited to audits stipulated in the Companies Act or the Financial
Instruments and Exchange Act [including similar foreign laws]) by a certified public accountant or an
auditing firm (including overseas auditors possessing qualifications similar to the Accounting Auditorof the Company) other than the Accounting Auditor of the Company.
２． Under our audit contract between the Company and its accounting auditor, remuneration, etc. for audits
are not clearly distinguishable between audits based on the Companies Act and those based on the
Financial Instruments & Exchange Act, and it is practically impossible to distinguish these in effect.
Therefore, the amount of remuneration, etc. paid to the accounting auditor in connection with the audits
for the fiscal year under review is listed as a total sum of payments for these audits.

3) Contents of non-auditing service
The Company has commissioned the accounting auditor to prepare a comfort letter and perform other duties
outside the services stipulated by Article 2 (1) of the Certified Public Accountants Act.

4) Consent to remuneration amount, etc. for accounting auditor
The Audit & Supervisory Board confirmed audit plans in the past and the status of their execution while discussing
the appropriateness of audit hours and remuneration estimates in the fiscal year under review. As a result, the Board
offered its consent regarding remuneration, etc. for the accounting auditor in line with Article 399 (1) of theCompanies Act.

5) Policy on dismissal or refusal of reappointment of accounting auditor
The Audit & Supervisory Board shall dismiss the accounting auditor by the unanimous consent of all Board
member auditors if that accounting auditor is deemed to be pursuant to any of the provisions in Article 340 (1) of theCompanies Act. In that event, a Board member auditor selected by the Audit & Supervisory Board shall report thedismissal of that accounting auditor and its reasons to the first General Meeting of Shareholders convened after thedismissal.
If deemed necessary, including in case of significant difficulty in the continuation of the accounting auditor’s
duties, the Audit & Supervisory Board shall propose by its resolution “the dismissal or refusal of reappointment of
the accounting auditor” to the General Meeting of Shareholders.
=======================================================================(Notes) Figures in the above tables are shown based on the following method.
1. In the amount of money shown in millions of yen, figures less than a million are omitted.
2. In the number of shares shown in thousands of shares, figures less than 1,000 are omitted.
3. Shareholding and investment ratios are rounded off at the third decimal point.

49

50

51

(Reference) Condensed consolidated statements of Cash flows (unaudited)(Unit: ¥ bn.)

FYE2023

FYE2024

YoY

Full-term

Full-term

Difference %Change

Income before income taxes

105.5

150.7

+ 45.2

Depreciation andamortization

105.7

112.4

+6.7

Changes in working capital

-22.2

-20.6

+1.6

Others

-1.0

-26.5

-25.5

Cash flows from operating
activities

187.9

215.9

+28.0

Capital expenditures-91.8-118.3-26.5

Investments and loans

-2.9

-2.5

+0.4

Others (asset sales, etc.)

-3.3

-3.7

-0.4

Cash flows from investing
activities-98.0-124.6-26.6+27.1%

89.8

91.3

+1.5

+1.6%

-54.4

-110.0-55.6+102.2%

Free cash flow
Cash flows from financing
activities+ 42.9%+14.9%(Note) This “(Reference)Condensed consolidated statements of Cash flows” is solely for the convenience of shareholders andis outside scope of independent auditor’s nor Audit & Supervisory Board Member’s audit.
(Note) Fractions of 100 million yen are rounded off.

52

(Note) Fractions of one million yen are rounded off.

53

(Note) Fractions of one million yen are rounded off.

54

Copy of Report of Accounting Auditor Regarding Consolidated Financial
Statements

Independent Auditors’ Audit Report
May 14, 2024
To: Board of Directors of Nippon Sanso Holdings Corporation

Ernst & Young ShinNihon LLC
Tokyo Office
Maruyama Takao
Designated Limited Liability Partner, Managing Partner
Certified Public Accountant
Yamamoto Takao
Designated Limited Liability Partner, Managing Partner
Certified Public Accountant
Opinion
Under Article 444, Paragraph 4 of the Companies Act, we have audited the consolidated financial
statements (i.e., consolidated statement of financial position, consolidated statement of income,consolidated statement of changes in equity, important basic matters for the preparation of theconsolidated financial statements, and other notes) of Nippon Sanso Holdings Corporation for the fiscal
year from April 1, 2023 to March 31, 2024.
In our opinion, the above-mentioned consolidated financial statements, in all material respects, appropriately
present the financial position and results of the operations of the group consisting of Nippon Sanso Holdings
Corporation and its consolidated subsidiaries for the period covered by these statements, in compliance withthe accounting standards that omit some items whose disclosure is required by the designated International
Financial Reporting Standards as stipulated by the provision of the latter part of Article 120, Paragraph 1 of
the Regulations on Corporate Accounting.

Basis for the Opinion
We conducted our audit by auditing standards generally accepted in Japan. Our responsibility under theauditing standards is stated in “Auditor’s Responsibility for Auditing the Consolidated Financial
Statements.” We are independent of the Company and its consolidate subsidiaries under the provisions
related to professional ethics in Japan, and we fulfill other ethical responsibilities as auditors. We believethat we have obtained sufficient and appropriate audit evidence that serves as a basis for presenting our
opinion.

Other descriptions“Other descriptions” means the business report and its supplementary schedules. Management is responsible
for preparing and disclosing other descriptions. The Audit & Supervisory Board and its members are
responsible for monitoring the performance of duties by the Directors in their development and operation of
the reporting process of the other descriptions.
Our firm’s audit opinion for the consolidated financial statements does not cover the other descriptions. We
do not express any opinion about the other descriptions.
In the audit of the consolidated financial statements, we have the responsibility to read over the otherdescriptions and, during that reading, to examine whether there are any material differences between theother descriptions and the consolidated financial statements or our knowledge obtained during our audit, andto check to see whether there are any signs of material errors in the other descriptions besides such material
differences.
If, based on our work, we determine that there are material errors in the other descriptions, we are required toreport that fact. The other descriptions have no issues that should be reported by us.

55Responsibility of Management, Audit & Supervisory Board Members, and the Audit &Supervisory Board for the Consolidated Financial Statements
Management is responsible for preparing and appropriately presenting consolidated financial statements incompliance with the accounting standards that omit some items whose disclosure is required by thedesignated International Financial Reporting Standards as stipulated by the provision of the latter part ofArticle 120, Paragraph 1 of the Regulations on Corporate Accounting. The responsibility includes
development and operation of internal controls that management determines are necessary to prepare andappropriately present the 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 evaluating theappropriateness of doing so on a going concern assumption, and for disclosing matters related to a going
concern when such disclosure is obligatory in compliance with the accounting standards that omit someitems whose disclosure is required by the designated International Financial Reporting Standards as
stipulated by the provision of the latter part of Article 120, Paragraph 1 of the Regulations on Corporate
Accounting.
The Audit & Supervisory Board and its members are responsible for monitoring the execution of duties by
the Directors in their development and operation of the financial reporting process.

Auditor’s Responsibility for Auditing the Consolidated Financial Statements

The auditor’s responsibility is to obtain reasonable assurance on if the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to express an opinion in
the audit report on these consolidated financial statements from an independent position based on the audit
conducted by the auditor. Misstatement can occur due to fraud or error. Misstatement is deemed material
when it is reasonably estimated to individually or cumulatively influence the decision-making of the usersof the consolidated financial statements.
In its auditing process, the auditor makes judgments as a professional specialist and conducts the following
while maintaining professional skepticism by auditing standards generally accepted in Japan:•Identify and assess the risks of material misstatement due to fraud or error. Design and perform audit
procedure that deals with the risks of material misstatement. The selection and application of the audit
procedures depend on the auditor’s judgement. Moreover, obtain sufficient and appropriate audit
evidence to provide a basis for expressing the audit opinion.
•The purpose of auditing the consolidated financial statements is not to express an opinion on theeffectiveness of the entity’s internal control. But in assessing risks, the auditor considers internal
controls relevant to the audit in order to design audit procedures that are appropriate for thecircumstances.
•Evaluate the appropriateness of accounting policies and their application methods adopted bymanagement, the reasonableness of accounting estimates made by management and the propriety of therelevant notes.
•Conclude whether or not it is appropriate for management to prepare the consolidated financial
statements under the going concern assumption. Also, conclude whether or not the audit evidence
obtained informs some material uncertainties about events or conditions that cast serious doubt on thegoing concern assumption. When uncertainties about the going concern assumption is acknowledged, it
is required to issue an alert about the notes to the consolidated financial statements in the audit report.
When the notes to the consolidated financial statements about material uncertainties are inappropriate, it
is required to express an opinion with qualifications about these statements. The auditor’s conclusion isbased on audit evidence obtained up until the issue date of the audit report. Future events or conditions
may cause the Company to stop continuing as a going concern.
- Evaluate whether the presentation of the consolidated financial statements and the notes to them comply
with the accounting standards that omit some items whose disclosure is required by the designatedInternational Financial Reporting Standards as stipulated by the provision of the latter part of Article
120, Paragraph 1 of the Regulations on Corporate Accounting. Also evaluate the presentation, structure,and content of the consolidated financial statements including their related notes, as well as whether the
consolidated financial statements appropriately present the underlying transactions and accounting
events.
•Obtain sufficient and appropriate audit evidence about the financial information of the Company and its
consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The
auditor is responsible for instructing, monitoring, and conducting the audit of the consolidated financial
statements. The auditor is solely responsible for the audit opinion.
The auditor reports to the Audit & Supervisory Board and its members on the scope and timing of theplanned audits, material audit findings identified during the audit including any material weakness ininternal controls, and other matters required by the auditing standards.
The auditor reports to the Audit & Supervisory Board and its members on its compliance with theprovisions in Japan for professional ethics about independence, matters that are reasonably considered toinfluence the independence of the auditor, and the description of any measures to eliminate impediments
or any safeguard measures to reduce impediments to an acceptable level, where applicable.

Conflicts of Interests
The Company and its consolidated subsidiaries have no interest relationship with our audit firm or its
managing partners that should be stated under the Certified Public Accountants Act.

56

Copy of Report of Accounting Auditor Regarding Non-Consolidated Financial
Statements

Independent Auditors’ Audit Report
May 14, 2024
To: Board of Directors of Nippon Sanso Holdings Corporation

Ernst & Young ShinNihon LLC
Tokyo Office
Maruyama Takao
Designated Limited Liability Partner, Managing Partner
Certified Public Accountant
Yamamoto Takao
Designated Limited Liability Partner, Managing Partner
Certified Public Accountant
Opinion
Under Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the non-consolidated
financial statements and their related documents (i.e., non-consolidated balance sheet, non-consolidated
statement of income, non-consolidated statement of changes in equity, notes to the non-consolidated
financial statements, and supplementary schedules) of Nippon Sanso Holdings Corporation for the fiscal
year from April 1, 2023 to March 31, 2024.
In our opinion, the above-mentioned non-consolidated financial statements and their related documents, inall material respects, appropriately present the financial position and results of operations for the period
covered by these statements and documents by accounting principles generally accepted in Japan.

Basis for the Opinion
We conducted our audit by auditing standards generally accepted in Japan. Our responsibility under theauditing standards is stated in “Auditor’s Responsibility for Auditing the Non-consolidated Financial
Statements and Their Related Documents.” We are independent of the Company under the provisions
related to professional ethics in Japan, and we fulfill other ethical responsibilities as auditors. We believethat we have obtained sufficient and appropriate audit evidence that serves as a basis for presenting our
opinion.

Other descriptions“Other descriptions” means the business report and its supplementary schedules. Management is responsible
for preparing and disclosing other descriptions. The Audit & Supervisory Board and its members are
responsible for monitoring the performance of duties by the Directors in their development and operation of
the reporting process of the other descriptions.
Our firm’s audit opinion for the non-consolidated financial statements and their related documents does notcover the other descriptions. We do not express any opinion about the other descriptions.
In the audit of the non-consolidated financial statements and their related documents, we have theresponsibility to read over the other descriptions and, during that reading, to examine whether there are any
material differences between the other descriptions and the non-consolidated financial statements and theirrelated documents or our knowledge obtained during our audit, and to check to see whether there are any
signs of material errors in the other descriptions besides such material differences.
If, based on our work, we determine that there are material errors in the other descriptions, we are required toreport that fact.
The other descriptions have no issues that should be reported by us.

57Responsibility of Management, Audit & Supervisory Board Members, and the Audit &Supervisory Board for the Non-consolidated Financial Statements and Their Related Documents
Management is responsible for preparing and appropriately presenting the non-consolidated financial
statements and their related documents by accounting principles generally accepted in Japan. The
responsibility includes development and operation of internal controls that management determines arenecessary to prepare and appropriately present the non-consolidated financial statements and their related
documents that are free from material misstatement, whether due to fraud or error.
In preparing the non-consolidated financial statements and their related documents, management is
responsible for evaluating the appropriateness of doing so on a going concern assumption, and fordisclosing matters related to a going concern when disclosure is obligatory by accounting principles
generally accepted in Japan.
The Audit & Supervisory Board and its members are responsible for monitoring the execution of duties by
the Directors in their development and operation of the financial reporting process.

Auditor’s Responsibility for Auditing the Non-consolidated Financial Statements and Their
Related Documents

The auditor’s responsibility is to obtain reasonable assurance on if the non-consolidated financial
statements and their related documents as a whole are free from material misstatement, whether due tofraud or error, and to express an opinion in the audit report on these statements and documents from an
independent position based on the audit conducted by the auditor. Misstatement can occur due to fraud or
error. Misstatement is deemed material when it is reasonably estimated to individually or cumulatively
influence the decision-making of the users of the non-consolidated financial statements and their related
documents.
In its auditing process, the auditor makes judgments as a professional specialist and conducts the following
while maintaining professional skepticism by auditing standards generally accepted in Japan:• Identify and assess the risks of material misstatement due to fraud or error. Design and perform audit
procedure that deals with the risks of material misstatement. The selection and application of the audit
procedures depend on the auditor’s judgement. Moreover, obtain sufficient and appropriate audit
evidence to provide a basis for expressing the audit opinion.
• The purpose of auditing the non-consolidated financial statements and their related documents is not to
express an opinion on the effectiveness of the entity’s internal control. But in assessing risks, theauditor considers internal controls relevant to the audit in order to design audit procedures that areappropriate for the circumstances.
• Evaluate the appropriateness of accounting policies and their application methods adopted bymanagement, the reasonableness of accounting estimates made by management and the propriety of
the relevant notes.
• Conclude whether or not it is appropriate for management to prepare the non-consolidated financial
statements and their related documents under the going concern assumption. Also, conclude whether
or not the audit evidence obtained informs some material uncertainties about events or conditions thatcast serious doubt on the going concern assumption. When uncertainties about the going concern
assumption is acknowledged, it is required to issue an alert about the notes to the non-consolidated
financial statements and their related documents in the audit report. When the notes to the nonconsolidated financial statements and their related documents about material uncertainties areinappropriate, it is required to express an opinion with qualifications about these statements anddocuments. The auditor’s conclusion is based on audit evidence obtained up until the issue date of theaudit report. Future events or conditions may cause the Company to stop continuing as a going
concern.
• Evaluate whether the presentation of the non-consolidated financial statements and their related
documents and the notes to them are prepared by principles generally accepted in Japan. Also, evaluate
the presentation, structure, and content of these statements and documents including their notes, aswell as whether these statements and documents appropriately present the underlying transactions andaccounting events.
The auditor reports to the Audit & Supervisory Board and its members on the scope and timing of theplanned audits, material audit findings identified during the audit including any material weakness ininternal controls, and other matters required by the auditing standards.
The auditor reports to the Audit & Supervisory Board and its members on its compliance with theprovisions in Japan for professional ethics about independence, matters that are reasonably considered toinfluence the independence of the auditor, and the description of any measures to eliminate impediments
or any safeguard measures to reduce impediments to an acceptable level, where applicable.

Conflicts of Interests
No interest relationship exists between the Company and our audit firm or its managing partners thatshould be stated under the Certified Public Accountants Act.

58

Copy of the Audit & Supervisory Board Audit Report

Audit Report
In regard to the Directors' performance of their duties for the business year from April 1, 2023, to March 31, 2024, the Audit& Supervisory Board has prepared this Audit Report after deliberations based on the audit reports prepared by each
Audit & Supervisory Board member and reports as follows.
1. Method and Contents of Audits by the Audit & Supervisory Board and Its Members(1) The Audit & Supervisory Board determined the audit policies and division of duties, etc. and received reports fromeach Audit & Supervisory Board member regarding the implementation status and results of their audits, inaddition to which it received reports from the Directors, etc. and the accounting auditor regarding the status of theperformance of their duties and requested explanations as necessary.
(2) In compliance with the audit standards established by the Audit & Supervisory Board and in accordance with theaudit policies and division of duties, etc., each Audit & Supervisory Board member communicated with the
Directors, the internal audit department, and other employees, etc., endeavored to gather information and develop
the audit environment, and conducted audits using the following methods.
(i)
The Audit & Supervisory Board members attended meetings of the Board of Directors and otherimportant meetings either online or in person, received reports from the Directors and employees, etc.
regarding the status of the performance of their duties, requested explanations as necessary, reviewed
important decision-making documents, etc., and inspected the status of operations and assets.
Additionally, in regard to subsidiaries, the Audit & Supervisory Board members communicated andexchanged information with the Directors and Audit & Supervisory Board members, etc. of
subsidiaries either online or in person and received reports on business from subsidiaries as necessary.
(ii)
In regard to the content of resolutions of the Board of Directors regarding the development of systems
to ensure that the Directors' performance of their duties complies with laws, regulations, and the Articles
of Incorporation and other systems provided for in Article 100, paragraph (1)and paragraph (3) ofRegulations for Enforcement of the Companies Act as systems necessary to ensure the appropriatenessof operations of the corporate group composed of a stock company and its subsidiaries, as well as thesystems developed pursuant to those resolutions (i.e., internal control systems) stated in the Business
Report, the Audit & Supervisory Board members periodically received reports from the Directors andemployees, etc. regarding the status of the establishment and operation of those systems and requested
further explanations as necessary and expressed opinions in regard thereto.

(iii)

(iv)

The Audit & Supervisory Board members also received reports from the Directors, etc. and Ernst &Young ShinNihon LLC on their evaluation of internal controls for financial reporting and on the statusof auditing such internal controls and requested further explanations as necessary.
In regard to the basic policies provided for in Article 118, item (iii)(a) of Regulations for Enforcementof the Companies Act, the efforts provided for in item (iii)(b) of that article, the matters given due
consideration provided for in item (v)(a) of that article, and the judgment and reasons provided for initem (v)(b) of that article, each as stated in the Business Report, the Audit & Supervisory Board
members considered the contents thereof taking into account matters such as the status of deliberations
at meetings of the Board of Directors and by any other method.
The Audit & Supervisory Board members monitored and checked whether the accounting auditor
maintained an independent position and conducted appropriate audits, received reports from theaccounting auditor on the status of the performance of its duties, and requested further explanations asnecessary. Additionally, the Audit & Supervisory Board members received notification from theaccounting auditor that, in accordance with the “Quality Control Standards for Audits” (BusinessAccounting Council), etc., it had developed systems in order to ensure that its duties are appropriately
performed (as listed in each item of Article 131 of the Ordinance on Accounting of Companies) andrequested further explanations as necessary.

Using the methods above, the Audit & Supervisory Board examined the Business Report, the supplementaryschedules thereto, the accounting documents (i.e., the balance sheet, statement of income, statement of changes in net
assets, and explanatory notes to accounting documents), the supplementary schedules to the accounting documents,
and the consolidated accounting documents (i.e., the consolidated statement of financial position, consolidated
statement of income, consolidated statement of changes in equity, and explanatory notes to consolidated accounting
documents) for the business year.

59

2. Audit Results(1) Results of audit of business report, etc.
(i)
We acknowledge that the Business Report and the supplementary schedules thereto accurately present
the status of the Company in accordance with laws, regulations, and the Articles of Incorporation.
(ii)
We do not acknowledge any misconduct nor any material fact constituting a violation of any law,regulation, or the Articles of Incorporation in relation to the Directors' performance of their duties.
(iii)
We acknowledge the content of the resolutions of the Board of Directors regarding internal control
systems to be reasonable. Additionally, we do not acknowledge any matters that should be commented
upon in regard to the statements in the Business Report or the Directors' performance of their duties
relating to the internal control systems, including the internal controls for financial reporting.
(iv)
We do not acknowledge any matters that should be commented upon in regard to the basic policy
regarding persons who control the determination of financial and business policies of the Company
stated in the Business Report. We acknowledge that the efforts provided for in Article 118, item (iii)(b)of Regulations for Enforcement of the Companies Act and stated in the Business Report are incompliance with that basic policy and do not harm the common interests of the shareholders of theCompany, and that their purpose is not to maintain the positions of the Directors of the Company.
(v)
In regard to transactions with the parent company stated in the Business Report, we do not
acknowledge any matters that should be commented upon, in regard to the matters given due
consideration so that the interests of the Company are not harmed when engaging in such transactions,the judgment of the Board of Directors regarding whether or not such transactions harm the interests of
the Company, and the reasons for that judgment.
(2) Results of audit of accounting documents and supplementary schedules thereto
We acknowledge the methods and results of the audit by the accounting auditor, Ernst & Young ShinNihon LLC,
to be reasonable.
(3) Results of audit of consolidated accounting documents
We acknowledge the methods and results of the audit by the accounting auditor, Ernst & Young ShinNihon LLC,
to be reasonable.
May 15, 2024
The Audit & Supervisory Board of Nippon Sanso Holdings Corporation
Audit and Supervisory Board Member (Full-time)

Satoshi Wataru

Audit and Supervisory Board Member (Full-time)

Akihiro Hashimoto

Audit and Supervisory Board Member (Full-time)Masahiro Osada

Audit and Supervisory Board Member (Full-time)

Kazuya Kobayashi(Note) Audit & Supervisory Board Members Akihiro Hashimoto, Masahiro Osada, and Kazuya Kobayashi are
Outside Company Auditors specified by Article 2, Item (xvi) and Article 335, Paragraph (3) of the Companies Act.

60

Memo

61

Memo

62

Map to the Venue of the 20th Ordinary General Meeting of Shareholders
Venue:
Grand Prince Hotel Takanawa, in Prince Room on basement floor B1
3-13-1 Takanawa, Minato-ku, Tokyo
Telephone: (03) 3447-1111
Nearest stations:Shinagawa Station (Takanawa Exit) of JR Line and Keihin Kyuko Line (9-minute walk)
Takanawadai Station (A1 Exit) of Toei Asakusa Line (7-minute walk)63