Note: This document has been translated from a part of the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, the original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translation.
Securities Code 5233
June 3, 2021
To Those Stockholders with Voting Rights
Masafumi Fushihara
President and Representative Director
Taiheiyo Cement Corporation
1-1-1, Koishikawa, Bunkyo-ku, TokyoNOTICE OF THE 23rd ORDINARY GENERAL MEETING OF STOCKHOLDERS
You are cordially notified of the 23rd Ordinary General Meeting of Stockholders of Taiheiyo Cement
Corporation (the “Company”). The meeting will be held as stated below.
From the perspective of preventing further spread of the novel coronavirus disease, we firmly urge ourstockholders to exercise their voting rights by paper ballot or via the Internet wherever possible and refrainfrom attending the meeting regardless of their health conditions.
Please review the attached Reference Documents for the General Meeting of Stockholders, and either return
the Voting Rights Exercise Form with your selections towards proposals, or vote via the Internet.
1. Date and Time:

Tuesday, June 29, 2021 at 10:00 a.m.

2. Place:

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

3. Agenda of the Meeting:
Matters to be reported: 1. Business Report, Consolidated Financial Statements for the 23rd Fiscal Term(from April 1, 2020 to March 31, 2021) and results of audits by the Accounting
Auditor and the Board of Auditors of the Consolidated Financial Statements
2. Non-Consolidated Financial Statements for the 23rd Fiscal Term (from April 1,2020 to March 31, 2021)
Proposals to be resolved:
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Nine Directors
Proposal No. 3: Election of Two Corporate Auditors
Proposal No. 4: Election of One Substitute Corporate Auditor
Proposal No. 5: Determination of Compensation for Granting Restricted Stock to Directors Other
Than Outside Directors and Revisions of Compensation Amounts for Directors
4. Voting Guide
If you are exercising your voting right prior to the Meeting:
Please review the attached Reference Documents for the General Meeting of Stockholders, and exercise yourvoting right by either of the following two methods.
(i) Exercise of voting rights by postal mail (paper ballot)- Please indicate your vote for or against the Proposals on the Voting Rights Exercise Form and send it
back, making sure that it will arrive by 5:00 p.m. on Monday, June 28, 2021 (Japan Standard Time).
- If you make no indication on the Voting Rights Exercise Form whether you are voting for or against the
Proposals, you shall be deemed to have voted FOR the Proposals.

(ii) Exercise of voting rights via the Internet, etc.
- Please exercise your voting right via the voting rights exercise site (https://www.web54.net) specified by
the Company before 5:00 p.m. on Monday, June 28, 2021 (Japan Standard Time).
- If you exercise your voting right via the Internet, etc. more than once, your final vote shall prevail.
If you are attending the Meeting:
Please hand in the enclosed Voting Rights Exercise Form at the front desk when you arrive at the venue.
If another stockholder is attending the Meeting on your behalf, he/she must submit a letter of proxy andyour Voting Rights Exercise Form as well as his/her Voting Rights Exercise Form at the front desk upon
arrival at the venue. (Please be advised that a proxy is limited to one person and must be anotherstockholder with the Company’s voting rights pursuant to the provisions of the Articles of Incorporation.)
If you vote both by postal mail and via the Internet, etc., the one received later shall prevail. If we receive
both on the same day, your vote cast via the Internet, etc. shall prevail.

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

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

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



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

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



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

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



All Officers attending and staff operating this General Meeting of Stockholders will be wearing a face
mask.



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

Reference Documents for the General Meeting of Stockholders
Proposals and References
Proposal No. 1:
Appropriation of Surplus
With respect to the year-end dividend for the term under review, the Company would like to pay out asfollows, in consideration of the business environment and our performance for the term under review, while
maintaining our basic policy of stable dividend payouts.
Matters concerning the year-end dividend(1) Type of Dividend
Cash(2) Matters concerning the distribution of dividends to stockholders and its total amount
30 yen per share of common stock of the Company, for a total amount of 3,566,754,840 yen.
The annual dividend per share for the term under review will amount to 60 yen, which includes aninterim dividend already paid.
(3) Effective Date of Dividends from surplus
June 30, 2021

Proposal No. 2:

Election of Nine Directors

The term of office of all Seven Directors will expire at the close of this General Meeting of Stockholders.
Accordingly, to strengthen the supervisory functions of the Board of Directors, the election of nine Directors(including three Outside Directors) is proposed, an increase of two Directors including one Outside Director.
The candidates for Director are as follows.
No.
1
2
3
4
5
6

7

8

9

Name
Reappointment
Shuji Fukuda
Reappointment
Masafumi Fushihara
Reappointment
Yuuichi Kitabayashi
Reappointment
Masahiro Karino
Reappointment
Kunihiro Ando
New Candidate
Tetsuya Ohashi
Reappointment
Yoshiko Koizumi
Outside Director
Independent Director
Reappointment
Shinhachiro Emori
Outside Director
Independent Director
New Candidate
Hideyuki Furikado
Outside Director
Independent Director

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

Director

Director

No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1974
June 1999
April 2004
April 2006
April 2008

October 2008

1

Joined Onoda Cement Co., Ltd.
General Manager, Accounting & Finance
Department of Taiheiyo Cement Corporation
General Manager, Accounting & Finance
Department and General Manager, Accounting& Finance Business Operation Center
General Manager, Hokuriku Branch
Executive Officer and General Manager,
Human Resources Department and General
Manager, Personnel Business Operation
CenterExecutive Officer and General Manager,
Human Resources Department
Director, Managing Executive Officer andGeneral Manager, Human Resources
Department
Director and Managing Executive Officer
President and Representative Director
Chairman and Director (to present)

Shuji Fukuda
August 2010
Reappointment(December 20, 1951)
Attended 13 out of 13 October 2010
meetings of the Board April 2012of Directors (100%) April 2018
and will have served as
Director for 10 years (Significant concurrent positions)and 10 months at close Outside Director, Sapporo Holdings Limited
Outside Audit & Supervisory Board Member, TOBU RAILWAY
of this GeneralCO., LTD.
Meeting ofStockholders
Reason for nominating Shuji Fukuda as Director
Since 2010, Mr. Shuji Fukuda has engaged in management of theCompany as Director, and currently serves as Chairman and
Director after serving as President and Representative Director.
He therefore has a wealth of experience, achievements, andknowledge as a manager. The Company has judged that he is anappropriate person to aim to enhance the function of the Board of
Directors as a chairman of the Board meetings, and continuously
increase corporate value of the Group as he leads the Group’s
management, determines important management matters, andsupervises business execution, etc., and requests that he continue
to be a candidate for Director.

Number ofshares of theCompany held

3,900

Notes:
1. The Company currently has an agreement with Mr. Shuji Fukuda, which limits his liability for damages
in respect of his responsibilities set out under Article 423, Paragraph 1 of the Companies Act, to theminimum limit of liability set out under Article 425, Paragraph 1 of the same provided that he executes
his duties in good faith and without gross negligence. If the election of Mr. Shuji Fukuda is approved,
the Company plans to continue said agreement with him.
2. No special relationship exists between the Company and Mr. Shuji Fukuda.

No.

Career summary, position, assignment andsignificant concurrent positions

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

October 2010
April 2012

2

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

Masafumi Fushihara April 2015
June 2015
Reappointment
April 2016
(May 18, 1954)
Attended 13 out of 13
meetings of the Board April 2017of Directors (100%)and will have served as April 2018
Director for 6 years at
close of this General
Meeting of
Reason for nominating Masafumi Fushihara as Director
Stockholders
Since 2015, Mr. Masafumi Fushihara has engaged inmanagement of the Company as Director, and currently serves as
President and Representative Director, after serving as Senior
General Manager of the Cement Business Division. He therefore
has a wealth of experience, achievements, and knowledge as amanager. The Company has judged that he is an appropriate
person to aim to continuously increase corporate value of theGroup as he leads the Group’s management, determines
important management matters, and supervises businessexecution, etc., and requests that he continue to be a candidate for
Director.

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

Number ofshares of theCompany held

6,500

No.

Career summary, position, assignment andsignificant concurrent positions

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

3

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

Yuuichi Kitabayashi
Reappointment
April 2017
(June 2, 1955)
Attended 13 out of 13 April 2021
meetings of the Boardof Directors (100%)and will have served as
Director for 8 years at
close of this General Reason for nominating Yuuichi Kitabayashi as Director
Since 2013, Mr. Yuuichi Kitabayashi has engaged in management
Meeting ofof the Company as Director, and since 2016, he has served as
Stockholders
Representative Director. He therefore has a wealth of experience,achievements, and knowledge as a manager. The Company has
judged that he is an appropriate person to aim to continuously
increase corporate value of the Group as he leads the Group’s
management, determines important management matters, andsupervises business execution, etc., and requests that he continue
to be a candidate for Director.

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

Number ofshares of theCompany held

6,400

No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1980
April 2004

4

Number ofshares of theCompany held

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

April 2013
Masahiro Karino
April 2016
Reappointment
June 2016(March 23, 1957)
April 2019
Attended 13 out of 13
meetings of the Boardof Directors (100%) Reason for nominating Masahiro Karino as Director
and will have served as Since 2016, Mr. Masahiro Karino has engaged in management of
Director for 5 years at the Company as Director, and has been making significant
close of this General contribution to the development of the Group as an officer
Meeting ofoverseeing human resources and legal divisions. The Company
Stockholders
has judged that he is an appropriate person to aim to continuously
increase corporate value of the Group as he determines importantmanagement matters, and supervises business execution, etc., andrequests that he continue to be a candidate for Director.

Note: No special relationship exists between the Company and Mr. Masahiro Karino.

7,200

No.

Career summary, position, assignment andsignificant concurrent positions

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

5

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

April 2015
Kunihiro Ando
Reappointment
April 2016
June 2016(May 4, 1957)
Attended 13 out of 13 April 2020
meetings of the Boardof Directors (100%)and will have served as Reason for nominating Kunihiro Ando as Director
Director for 5 years at Since 2016, Mr. Kunihiro Ando has engaged in management ofclose of this General the Company as Director, and has been making significant
contribution to the development of the Group as an officer
Meeting ofoverseeing the mineral resources business and environmental
Stockholders
business. The Company has judged that he is an appropriate
person to aim to continuously increase corporate value of theGroup as he determines important management matters, andsupervises business execution, etc., and requests that he continue
to be a candidate for Director.

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

Number ofshares of theCompany held

6,800

No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)

April 1982
October 2010
April 2015
April 2016

6

Tetsuya Ohashi
New Candidate(March 7, 1960)

April 2019
June 2019
June 2020
April 2021

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

Reason for nominating Tetsuya Ohashi as Director
Since 2021, Mr. Tetsuya Ohashi has served as Senior Executive
Officer and has been making significant contribution to thedevelopment of the Group as an officer overseeing general affairs
and corporate planning divisions. The Company has judged that
he is an appropriate person to aim to continuously increase
corporate value of the Group and requests that he be a new
candidate for Director.
Note: No special relationship exists between the Company and Mr. Tetsuya Ohashi.

Number ofshares of theCompany held

5,200

No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)
April 1972

7

Registered as a lawyer (Daini Tokyo Bar
Association)
January 1980
Partner, Masuda and Ejiri Law Office(predecessor of Nishimura & Asahi)
January 2008
Counsel, Nishimura & Asahi
April 2009
Partner, City-Yuwa Partners
June 2015
Outside Director of Taiheiyo Cement Corporation
Outside Director, Dowa Holdings Co., Ltd.
Partner, City-Yuwa Partners
June 2016
Outside Director of Taiheiyo Cement Corporation
Outside Director, Dowa Holdings Co., Ltd.
Outside Corporate Auditor, Sumitomo BakeliteCo., Ltd.
Partner, City-Yuwa Partners
September 2017 Outside Director of Taiheiyo Cement Corporation
Outside Director, Dowa Holdings Co., Ltd.
Outside Corporate Auditor, Sumitomo BakeliteCo., Ltd.
Yoshiko Koizumi
Outside Corporate Auditor, Nippon Koei Co.,Ltd.
Candidate forPartner,City-Yuwa Partners
Outside Director
June
2019
OutsideDirector of Taiheiyo Cement Corporation
Reappointment
Outside Director, Dowa Holdings Co., Ltd.
(September 25, 1943)
Outside Corporate Auditor, Nippon Koei Co., Ltd.
Attended 13 out of 13
Partner, City-Yuwa Partners
meetings of the Board(to present)of Directors (100%)and will have served (Significant concurrent positions)as Director for 6
Outside Director, Dowa Holdings Co., Ltd.
years at close of this Outside Corporate Auditor, Nippon Koei Co., Ltd.
General Meeting of Lawyer, Partner of City-Yuwa Partners
Stockholders
Reason for nominating Yoshiko Koizumi as Outside Director
and outline of expected roles
Although Ms. Yoshiko Koizumi has not engaged in corporate
management in the past, as a lawyer, she has a wealth ofexperience, achievements, and knowledge regarding corporate law.
The Company expects that she will provide precise
recommendations and advice from this perspective in the Board of
Directors of the Company, and promote the enhancement of thefairness, transparency and objectivity of the procedures fordetermining the nomination and compensation of Directors as
Chairman of the Nomination and Compensation Advisory
Committee established by the Company in March 2021. The
Company has judged that she makes significant contribution to themonitoring and supervision of overall management from an
objective standpoint independent from the management team that
executes business, and requests that she continue to be a candidate
for Director.

Number ofshares of theCompany held

1,500

Notes:
1. Ms. Yoshiko Koizumi is nominated as an Outside Director.
2. The Company currently has an agreement with Ms. Yoshiko Koizumi, which limits her liability fordamages in respect of her responsibilities set out under Article 423, Paragraph 1 of the Companies Act,to the minimum limit of liability set out under Article 425, Paragraph 1 of the same provided that sheexecutes her duties in good faith and without gross negligence. If the election of Ms. Yoshiko Koizumi isapproved, the Company plans to continue said agreement with her.
3. Ms. Yoshiko Koizumi satisfies the Independence Criteria for Outside Officers defined by the Company,
and the Company has registered Ms. Yoshiko Koizumi as an independent director at Tokyo Stock
Exchange, Inc. and Securities Membership Corporation Fukuoka Stock Exchange. Additionally, theIndependence Criteria for Outside Officers defined by the Company is provided on page 21.
4. The Company receives legal advice as required from lawyers of City-Yuwa Partners other than Ms.
Yoshiko Koizumi, where she serves as a partner, but the Company has not concluded an advisory
agreement with the law firm. The advisory fees paid to the law firm are less than 1% of annual sales foreach of the Company and the law firm, and there is no special interest relationship. Additionally, there
are no special interest relationships between the Company and any of the significant concurrent positions.
5. No special relationship exists between the Company and Ms. Yoshiko Koizumi.

No.

Career summary, position, assignment andsignificant concurrent positions

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

8

Number ofshares of theCompany
held

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

June 2015
Shinhachiro Emori
Candidate for Outside June 2020
Director
Reappointment
Reason for nominating Shinhachiro Emori as Outside Director(February 2, 1953)
Attended 10 out of 10 and outline of expected roles
meetings of the Board Mr. Shinhachiro Emori has a wealth of experience, achievements,of Directors (100%) and insight as a corporate manager. The Company expects that heand will have served as will provide precise recommendations and advice from thisDirector for 1 year at perspective in the Board of Directors of the Company, and strive forclose of this General the enhancement of the fairness, transparency and objectivity of theprocedures for determining the nomination and compensation of
Meeting of
Directors as member of the Nomination and Compensation
Stockholders
Advisory Committee established by the Company in March 2021.
The Company has judged that he makes significant contribution to
the monitoring and supervision of overall management from an
objective standpoint independent from the management team that
executes business, and requests that he continue to be a candidate
for Director.

100

Notes:
1. Mr. Shinhachiro Emori is nominated as an Outside Director.
2. Mr. Shinhachiro Emori was newly appointed at the 22nd Ordinary General Meeting of Stockholders heldon June 26, 2020, and took office as Director on the same day. Accordingly, his attendance at meetingsof the Board of Directors refers to those convened since he took office.
3. The Company currently has an agreement with Mr. Shinhachiro Emori, which limits his liability fordamages in respect of his responsibilities set out under Article 423, Paragraph 1 of the Companies Act, tothe minimum limit of liability set out under Article 425, Paragraph 1 of the same provided that he executes
his duties in good faith and without gross negligence. If the election of Mr. Shinhachiro Emori is approved,
the Company plans to continue said agreement with him.
4. Mr. Shinhachiro Emori satisfies the Independence Criteria for Outside Officers defined by the Company,
and the Company has registered Mr. Shinhachiro Emori as an independent director at Tokyo Stock
Exchange, Inc. and Securities Membership Corporation Fukuoka Stock Exchange. Additionally, theIndependence Criteria for Outside Officers defined by the Company is provided on page 21.
5. No special relationship exists between the Company and Mr. Shinhachiro Emori.

No.

Career summary, position, assignment andsignificant concurrent positions

Name(Date of birth)

Number ofshares of theCompany
held

April 1977
July 2004

Joined Ministry of Finance
Deputy Director-General of Financial Services
AgencyJuly 2010
Director of Policy Research Institute, Ministry of
Finance
December 2013 Retired from Ministry of Finance
June 2014
Senior Managing Director of Trust Companies
Association of Japan (to present)

9

Hideyuki Furikado
Candidate for Outside
Director
New Candidate(August 3, 1954)

Reason for nominating Hideyuki Furikado as Outside Director
and outline of expected roles
Although Mr. Hideyuki Furikado has not engaged in corporate
management in the past, as a government official, he has a wealthof experience and extensive knowledge regarding public
administration. The Company expects that he will provide precise
recommendations and advice from this perspective in the Board of
Directors of the Company, and strive for the enhancement of thefairness, transparency and objectivity of the procedures fordetermining the nomination and compensation of Directors as
member of the Nomination and Compensation Advisory
Committee established by the Company in March 2021. The
Company has judged that he will make significant contribution to
the monitoring and supervision of overall management from an
objective standpoint independent from the management team that
executes business, and requests that he be a new candidate for
Director.

0

Notes:
1. Mr. Hideyuki Furikado is nominated as an Outside Director.
2. If the election of Mr. Hideyuki Furikado is approved, the Company plans to enter into an agreement withhim, which limits his liability for damages in respect of his responsibilities set out under Article 423,
Paragraph 1 of the Companies Act, to the minimum limit of liability set out under Article 425, Paragraph
1 of the same provided that he executes his duties in good faith and without gross negligence.
3. Mr. Hideyuki Furikado satisfies the Independence Criteria for Outside Officers defined by the Company,
and in the event that he takes office as an Outside Director, the Company plans to register him as anindependent director at Tokyo Stock Exchange, Inc. and Securities Membership Corporation Fukuoka
Stock Exchange. Additionally, the Independence Criteria for Outside Officers defined by the Company isprovided on page 21.
4. No special relationship exists between the Company and Mr. Hideyuki Furikado.
Directors and officers liability insurance contract
The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3, Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damages that may arise when theinsured assumes liability for the execution of his or her duties as corporate officer. If the election ofcandidates is approved, each of them will be insured under the insurance contract. In addition, theCompany plans to renew said insurance contract in July 2021.

Proposal No. 3:

Election of Two Corporate Auditors

The term of office of Mr. Toshihide Nishimura and Ms. Wakako Mitani will expire at the close of this
General Meeting of Stockholders. Accordingly, the Company would like to propose the election of two
Corporate Auditors.
The candidates for Corporate Auditors are as follows.
The Board of Auditors has previously given its approval to this proposal.
No.

Career summary, position andsignificant concurrent positions

Name(Date of birth)
April 1981
April 2013
April 2015
April 2017
June 2017
June 2020
April 2021

1

Katsuhide Fukuhara
New Candidate(September 25, 1956)

Number ofshares of theCompany
held

Joined Onoda Cement Co., Ltd.
General Manager, Corporate Planning Department
of Taiheiyo Cement Corporation
Executive Officer and General Manager,
Corporate Planning Department
Managing Executive Officer
Director and Managing Executive Officer
Managing Executive Officer
Advisor and Assistant to Corporate Auditors’
Office (to present)

Reason for nominating Katsuhide Fukuhara as Corporate
AuditorAs an officer of the Company, Mr. Katsuhide Fukuhara has been in
charge of a wide range of operations in the Construction Materials
Business and administrative division of group company to promote
the management of the Group, and has a wealth of experience andknowledge accumulated through his duties. Aiming to sustainably
improve the corporate value of the Group, the Company has judgedthat he will appropriately audit the execution of Directors’ duties,
and requests that he be a new candidate for Corporate Auditor.

6,800

Notes:
1. If the election of Mr. Katsuhide Fukuhara is approved, the Company plans to enter into an agreement withhim, which limits his liability for damages in respect of his responsibilities set out under Article 423,
Paragraph 1 of the Companies Act, to the minimum limit of liability set out under Article 425, Paragraph
1 of the same provided that he executes his duties in good faith and without gross negligence.
2. No special relationship exists between the Company and Mr. Katsuhide Fukuhara.

No.

Name
(Date of birth)

Career summary, position andsignificant concurrent positions

April 2000
Registered as a lawyer (Daiichi Tokyo Bar
Wakako Mitani
Association)(Name on family
July 2001
Joined TANABE & PARTNERS
registration: Wakako April 2012
Partner of TANABE & PARTNERS
Akamatsu)
February 2018 Outside Corporate Auditor of Taiheiyo Cement
Corporation
Candidate for Outside
Partnerof TANABE & PARTNERS (to present)
Corporate Auditor
Reappointment(Significant concurrent positions)(January 4, 1974)
Lawyer, TANABE & PARTNERS
Attended 13 out of 13
2 meetings of the Board
Reason for nominating Wakako Mitani as Outside Corporateof Directors (100%), Auditor
14 out of 14 meetings of Although Mr. Wakako Mitani has not engaged in corporate
the Board of Auditors management in the past, she has been involved in practical work in(100%) and will have the field of corporate legal affairs over many years, and has a wealthserved as Corporate of experience, achievements, and knowledge as a lawyer. The
Auditor for 3 years and Company has judged that she will audit the execution of Directors’
4 months at close of this duties from an independent, objective and fair standpoint, andrequests that she continue to be a candidate for Outside Corporate
General Meeting ofAuditor.
Stockholders

Number ofshares of theCompany
held

1,900

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

Directors and officers liability insurance contract
The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3, Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damages that may arise when theinsured assumes liability for the execution of his or her duties as corporate officer. If the election ofcandidates is approved, each of them will be insured under the insurance contract. In addition, theCompany plans to renew said insurance contract in July 2021.

Proposal No. 4:

Election of One Substitute Corporate Auditor

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

Name(Date of birth)
October 1983
August 1987
July 1999
August 2014

Number ofshares of theCompany held

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

0

Notes:
1. Mr. Toshihito Aoki is nominated as a substitute Outside Corporate Auditor.
2. In the event that Mr. Toshihito Aoki takes office as an Outside Corporate Auditor, the Company plans toenter into an agreement with him, which would limit his liability for damages in respect of his
responsibilities set out under Article 423, Paragraph 1 of the Companies Act, to the minimum limit ofliability set out under Article 425, Paragraph 1 of the same provided that he executes his duties in goodfaith and without gross negligence.
3. Mr. Toshihito Aoki satisfies the Independence Criteria for Outside Officers defined by the Company, andin the event that he takes office as an Outside Corporate Auditor, the Company plans to register him as
an independent corporate auditor at Tokyo Stock Exchange, Inc. and Securities Membership Corporation
Fukuoka Stock Exchange. Additionally, the Independence Criteria for Outside Officers defined by theCompany is provided on page 21.
4. No special relationship exists between the Company and Mr. Toshihito Aoki.
Directors and officers liability insurance contract
The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3, Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damages that may arise when theinsured assumes liability for the execution of his or her duties as corporate officer. If Mr. Toshihito Aoki
assumes the office of Outside Corporate Auditor, he will be insured under the insurance contract. In
addition, the Company plans to renew said insurance contract in July 2021.
Proposal No. 5:

Determination of Compensation for Granting Restricted Stock to Directors Other
Than Outside Directors and Revisions of Compensation Amounts for Directors

Although at the 9th Ordinary General Meeting of Stockholders held on June 27, 2007, approval was received

for an amount of compensation, etc. for Directors of the Company, taking into consideration current economic
trends and other conditions, the Company proposes to change the amount of compensation, etc. for Directors
from a monthly amount to an annual amount and the annual compensation amount shall be within ¥1,200
million (including an annual amount of ¥100 million or less for Outside Directors),. Additionally, with theobjectives of offering incentives to the Company’s Directors (excluding Outside Directors; hereinafter the“Eligible Directors”) to achieve sustained improvement of the corporate value of the Company and sharing
more of that value with the Eligible Directors and our stockholders, the Company proposes new plan to provide
compensation for granting restricted stock to the Eligible Directors within the above-mentioned compensation
limit.
The total amount of the compensation for granting restricted stock to the Eligible Directors based on this
proposal shall be ¥200 million or less per year, which is an amount deemed to be appropriate based on theabove objectives.
Furthermore, based on resolution of the Board of Directors of the Company, the Eligible Directors shallmake in-kind contribution of all monetary compensation claims which will arise under this proposal and shall,in return, receive issuance or disposal of the common stock of the Company, and the total number of common
stock of the Company to be issued or disposed of through this process shall be 200,000 shares or less per year
(however, in case that the Company conducts stock splits (including gratis allocation of its common stock) orreverse stock splits of its common stock which are effective on or after the date of the approval of this proposal,
the total number of shares should be adjusted according to the stock split ratio or reverse stock split ratio.).
The amount paid in per share shall be the closing price of the common stock of the Company in the Tokyo
Stock Exchange on the business day immediately prior to the date of each resolution of the Board of Directors(in the case when any stock transaction has not been concluded on that day, the closing price on the most recent
trading day preceding that day). The specific time of payment and allocation for each of the Eligible Directors
shall be decided by the Board of Directors.
The Company has determined a policy for determining compensation, etc. for individual Director at a
meeting of Board of Directors as described in the Business Report on page 34 to 36. The purpose of introducing
the plan is as described above. The Company considers that the contents of this proposal are appropriate since
the plan is in line with the policy. Furthermore, if this proposal is approved and passed as proposed, theCompany plans to partially change the policy.
If Proposal No. 2 “Election of Nine Directors” is approved and passed as proposed, there will be nine
Directors (including three Outside Directors) and six Eligible Directors.
* If this proposal is approved and passed as proposed, the Company also plans to introduce a similar
restricted stock compensation plan for managing executive officers who have concluded a delegation
contract with the Company.
When issuing or disposing of the common stock of the Company through this process, a contract forallocation of restricted stock (hereinafter the “Allocation Contract”) containing the following overview shallbe concluded between the Company and the Eligible Directors.
(1) Transfer Restriction Period
Eligible Directors shall not transfer, pledge, or otherwise dispose the common stock of the Company
allocated under the Allocation Contract (hereinafter the “Allocated Shares”) during the period (hereinafter
the “Transfer Restriction Period”) from the date on which allocation is made under the Allocation Contract tothe date on which they retire from the post of Director of the Company (in principle, if they concurrently
serve as managing executive officer of the Company or if they assume the office of managing executive
officer at the same time as their retirement from the post of Director, “retire” or “retirement” means that they
are no longer either Director or managing executive officer of the Company. The same applies below.)(hereinafter the “Transfer Restrictions”).
(2) Cancellation of the Transfer Restrictions
The Company shall cancel the Transfer Restrictions on all of the Allocated Shares (however, if theCompany acquires all or part of the Allocated Shares without contribution pursuant to (3) 2) below, theremainder after such acquisition) at the expiry of the Transfer Restriction Period on the condition that thereason of retirement of the Eligible Directors is admitted legitimate by the Board of Directors.
(3) Acquisition of the Allocated Shares without consideration
1) When the Transfer Restriction Period expires, the Company shall automatically acquire the AllocatedShares for which the Transfer Restrictions have not been canceled based on the provisions in (2)above without consideration.

2) In addition, if the Eligible Directors retire within the period of execution of duties, which is under theperiod subject to compensation for the Allocated Shares, the Company shall acquire a certain numberof Allocated Shares without consideration according to the remaining period. If the Eligible Directors
engage in actions that contravene laws and regulations, or on other grounds as stipulated in the
Allocation Contract, the Company shall acquire all or part of the Allocated Shares without
consideration.
(4) Treatment in the Event of Organizational Restructuring, etc.
Notwithstanding the provisions in (1) above, in the case where matters regarding merger contracts underwhich the Company becomes the merged company, share exchange agreements or share transfer plans underwhich the Company becomes a wholly owned subsidiary of another company, or any other organizational
restructuring, etc. are approved at the General Meeting of Stockholders of the Company (or at theCompany’s Board of Directors meeting in the case where approval by the General Meeting of Stockholders
is not required regarding said organizational restructuring, etc.) during the Transfer Restriction Period, theCompany shall cancel the Transfer Restrictions before the effective date of said organizational restructuring,etc. with regard to the number of Allocated Shares reasonably determined by taking into account the period
from the starting date of the Transfer Restriction Period to the effective date of said organizational
restructuring, etc. Furthermore, in such a case, the Company shall acquire the Allocated Shares for which theTransfer Restrictions have not been canceled at the time immediately after the cancellation of Transfer
Restrictions without consideration.
(5) Other Matters Determined by the Board of Directors
In addition to the above, the method of manifestation of intention and notification under the Allocation
Contract, the method of revision of the Allocation Contract, and any other matters determined by the Boardof Directors shall be included in the contents of the Allocation Contract.
Furthermore, during the Transfer Restriction Period, the Allocated Shares to be granted to the Eligible
Directors under the plan will be managed by a dedicated account established by the Eligible Directors at asecurities company specified by the Company to prevent transfer, pledging, and other disposals of the shares.

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

(Appendix)

Business Report(April 1, 2020 - March 31, 2021)

1. Overview of the Company Group
1)

Business Progress and Results
During FY2020, although Japan’s economy remained in an extremely difficult situation due to theimpact of the spread of the novel coronavirus disease and the stagnation of economic activities following
the issuance of the declaration of a state of emergency, etc., signs of recovery could be seen in corporate
earnings and capital investment due to the effects of various economic measures and the economic
recovery in the US and China.
Regarding the world economy, while vaccinations are progressing in each country, there are regional
differences in the state of economic recovery depending on the status of the relaxation of restrictions on
economic activities and economic measures, and economic prospects remain uncertain since it isunpredictable when the novel coronavirus disease will be brought under control.
Under these circumstances, in FY2020, the Group's consolidated sales decreased ¥20,446 million
from the previous year to ¥863,903 million. Consolidated operating income was ¥63,610 million, up¥2,602 million, while consolidated ordinary income was ¥65,744 million, up ¥5,202 million and profit
attributable to owners of parent increased ¥7,649 million to ¥46,800 million.
Reviews of operation by each segment are as follows.
Cement Business
Sales¥621,045 million (down 1.1% year-on-year)
Operating Income ¥41,326 million (up 13.1% year-on-year)
Domestic cement demand in both the public and private sector has been sluggish due to the impact
of process delays and the prolongation of construction periods caused by the lack of construction
workers, although the impact of suspension of work, etc. due to the spread of the novel coronavirus
disease has decreased since June. As a whole, domestic cement demand decreased 5.6% from theprevious year to 38.67 million tons, of which, imported cement decreased 9.9% from the previous year
to 0.02 million tons. Total exports increased 5.5% from the previous year to 11.11 million tons.
Under these circumstances, the Taiheiyo Cement Group’s domestic cement sales by volume,
including consignment sales, decreased 4.8% from the previous year to 13.78 million tons, whilst
exports decreased 2.2% to 3.77 million tons.
Although shipment volume served by our US West Coast cement and ready-mixed concretebusinesses was affected by the spread of the novel coronavirus disease, many states have allowedbusiness to continue recognizing that the construction industry is indispensable. In addition, owing tostrong demand in housing, sales volumes and prices increased. The cement business in China saw lower
sales volumes. The cement business in Vietnam was affected by competition with other products,
among other factors, however sales volume increased. For the cement business in the Philippines, sales
volume decreased due to the stagnation of some construction works caused by the impact of movement
restrictions as measures against the novel coronavirus disease.
As a result of the above, consolidated sales decreased ¥7,371 million from the previous year to¥621,045 million, and consolidated operating income increased ¥4,800 million to ¥41,326 million.

Mineral Resources Business
Sales¥75,777 million (down 5.4% year-on-year)
Operating Income ¥6,071 million (down 15.4% year-on-year)
In the aggregates business, sales by volume in the Kanto region and the Tohoku region decreased
and in the mineral products business, shipments of limestone for steel corporations were sluggish. As
a result, consolidated sales decreased ¥4,369 million from the previous year to ¥75,777 million, andconsolidated operating income decreased ¥1,107 million to ¥6,071 million.
Environmental Business
Sales¥78,042 million (down 7.5% year-on-year)
Operating Income ¥6,447 million (down 16.3% year-on-year)
Sales of biomass fuel increased following the operation commencement of the power supply
business in Iwate prefecture. Furthermore, efforts were made in disaster waste processing operations
amid the aftermath of Typhoon Hagibis the year before last and heavy rain in Kyushu last year.
However, sales in coal processing, gypsum, fuels and calcium carbonate used for flue gas
desulfurization decreased due to a decline in electricity demand and in the operation rate of coal-fired
power generation following the spread of the novel coronavirus disease. As a result, consolidated sales
decreased ¥6,379 million from the previous year to ¥78,042 million, and consolidated operating income
decreased ¥1,259 million to ¥6,447 million.
Construction Materials Business
Sales¥73,003 million (down 10.2% year-on-year)
Operating Income ¥3,564 million (down 21.4% year-on-year)
As of a result of sluggish sales of ground improvement projects and ALC (autoclaved lightweightaerated concrete), etc., consolidated sales decreased ¥8,300 million from the previous year to ¥73,003
million, and consolidated operating income decreased ¥972 million to ¥3,564 million.
Other Business
Sales¥91,404 million (up 10.0% year-on-year)
Operating Income ¥6,135 million (up 15.1% year-on-year)
Due to the operation commencement of the power supply business in Iwate prefecture in 2020, in
addition to the transportation and warehousing business remaining solid, consolidated sales increased¥8,373 million from the previous year to ¥91,404 million, and consolidated operating income
increased ¥808 million to ¥6,135 million.
Sales and Operating Income by Business Segment
Business Segment

Sales

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

621,045
75,77778,04273,00391,404
939,273(75,370)
863,903Year-on-yearincrease (decrease)(7,371)(4,369)(6,379)(8,300)8,373(18,047)(2,398)(20,446)(Unit: Millions of yen)
Operating
Year-on-year
incomeincrease (decrease)
41,3264,800
6,071(1,107)
6,447(1,259)
3,564
(972)
6,135
808
63,5462,267
64
334
63,6102,602

2)Capital Investments
The total amount of capital investments by the Group in the fiscal year under review decreased¥11,674 million from the previous year to ¥66,003 million, consisting of ¥41,682 million in the Cement
Business, ¥12,410 million in the Mineral Resources Business, ¥638 million in the Environmental
Business, ¥2,223 million in the Construction Materials Business, ¥6,017 million in the Other Businessand ¥3,031 million in Group wide assets.

3)

Financing
The Company issued the 28th unsecured straight corporate bonds of ¥15,000 million and the 29th
unsecured straight corporate bonds of ¥15,000 million in December 2020.

4)

Trends in Assets and Income
Item

20th fiscal year
ended
March 31, 2018

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

23rd fiscal year
ended
March 31, 2021
(Current)

Net sales
871,113916,071884,350
863,903(millions of yen)
Ordinary income
64,36664,30660,54165,744(millions of yen)
Profit attributable toowners of parent
38,52543,45239,15146,800(millions of yen)
Net income per share
311.40351.72319.89387.79(yen)
Total assets
1,020,111
1,034,428
1,032,923
1,044,227(millions of yen)
Net assets
432,326
450,645473,241
506,821(millions of yen)
(Note) The Company, with an effective date of October 1, 2017, conducted a reverse stock split for
its common stock at a ratio of one for 10. As a result, net income per share is calculated assumingthat said share consolidation had been conducted at the beginning of the 20th fiscal year ended
March 31, 2018.
5)

Issues to be Addressed
Looking ahead, the Japanese economy is expected to continue to recover. However, althoughvaccinations for the novel coronavirus disease are progressing, the Group expects that it will take aconsiderable amount of time for a full economic recovery amid a situation where the infection continues tospread.
Under these circumstances, turning our attention to the Group’s business environment, in our core
domestic cement business, it is expected that a certain amount of demand will continue owing to theredevelopment investment in urban areas, disaster prevention and mitigation measures, additionalcountermeasure construction for national resilience and upcoming full-fledged construction related toLinear Chuo Shinkansen. Meanwhile, as the timing of the containment of the novel coronavirus diseaseremains unpredictable, there are risks that demand for cement will be pushed down due to concerns overpossibilities of oppressed demand in capital investments and housing investments. Furthermore, theimpact on the construction industry during the Tokyo Olympics and Paralympics, rising logistics costs, aworsening labor shortage, and the aging of the population must continue to be taken into consideration.
Additionally, with regard to the global economy, although global vaccination is expected to progressin the future, the Group should closely monitor to what extent the novel coronavirus disease will affectthe economies of each country in the future, as governments are compelled to make difficult decisions torelax restrictions on economic activities and while also implementing infection prevention measures.
Under these circumstances, the Group has been working on the 20 Medium-Term Management Plancovering the three-year period from FY2018 until FY2020, as the second step to realize its vision anddirection targeting the mid-2020s. From FY2021, as the third step, the Group will formulate the 23
Medium-Term Management Plan which covers the three-year period until FY2023 and will work towardsustainable growth and the establishment of a stable business foundation over the long term.

Vision and Direction
With Taiheiyo Cement Group’s management philosophy in mind, the Group aims “to become anenterprise group that utilizes all of its capabilities to provide a sense of safety and security to society in
the Pacific Rim region,” within the framework of our vision and direction targeting the mid-2020s. The
Group is working to achieve this goal in three steps.
Basic Policies of 23 Medium-Term Management Plan
In the 23 Medium-Term Management Plan, the Group aims to establish a new business model that
only the Company can achieve, in which all the businesses of the Group function comprehensively andin an integrated manner, that is, to become an “overwhelming leading company” in accordance with thefollowing basic policies.
(i) Establish an enterprise group that keeps moving forward to development.
(ii) Contribute to establishment of a safe and secure society as a member of the social infrastructureindustry.
(iii) Strengthen the earnings base and steadily implement investment in growth areas.
Efforts to Achieve Carbon Neutrality
In the cement industry, which emits a large amount of CO2, establishing carbon-neutral technologythat achieves net zero CO2 emissions is one of its top priorities that will pave the way to the future of theindustry. The Group considers efforts to achieve this goal (zero carbon cement) as its growth strategy.
The Group has formulated a long-term vision of greenhouse gas emissions reduction toward 2050. In
order to achieve this long-term vision, it is essential to develop innovative technologies and raise them toa practical level including costs, in addition to applying and developing existing technologies. The Group
has newly established the Carbon Neutral Technology Development Project Team as an in-house crossdivisional project team responsible for promoting the development of such innovative technologies. With
this project team at the core, the Group will establish technologies ready for public implementation at an
early stage and aims to achieve net carbon neutrality by 2050.
Business Strategies
1. Cement (Domestic)
In a market environment where large growth in domestic cement demand cannot be expected, theGroup aims to rebuild the domestic cement business through flexible thinking and dynamic actions. By
strengthening plant equipment, building a complex sales system between mineral resources business andthe environmental business and optimizing the logistics system through AI and automation, the Groupwill maximize its overall capacity and fulfill its responsibility of providing a stable supply to national
projects, etc.
Furthermore, while pursuing efficiency of its production and logistics systems through AI and IoT,
the Group will actively work toward the achievement of carbon neutrality through new production andtechnology development and activities in its supply chain.
2. Cement (Overseas)
The Group will work to establish a new business portfolio in Asia, expand its business in Southeast
Asia, restructure its logistics network and expand its trading business throughout the Pacific Rim
including Indonesia, which will be the new trading hub. In expanding its business, the Group will promotecore businesses such as mineral resources, environmental and construction materials businesses in
addition to the cement business, while aiming to establish an organic, comprehensive, and complex
business.
3. Mineral Resources
The Group will promote the establishment of a foundation for stable long-term supply of resources
such as limestone, which it has in abundance, demonstrate the overall capacity of the Group, increase theearnings of existing core businesses, and focus on development of new businesses to enable sustainable
development.
4. Environmental Business
The Group will accurately grasp changes in the external environment and expand into new businesses
that meet the trends of the times under the keywords “climate change response,” “digital,” “materials”
and “energy.” It will establish a new resource recycling model and work to contribute to realizing acarbon-neutral society.
5. Construction Materials
By strengthening market competitiveness, the Group will improve the profitability of its existing businesses,
and actively develop new business areas that can generate synergies within the Group.
6. Other (Individual companies)
While strengthening the profitability of individual companies, the Group will work to establish a new
business model that can be expected to generate synergies within the Group.
Research & Development Strategies
In order to contribute to society and the sustainable growth of the Group, the Group will positionand eagerly pursue technological development for the achievement of carbon neutrality as its biggest
theme, and will focus particularly on the deepening of its fundamental technologies, development ofrecycling technologies, innovative materials, and development of technologies for the future.
Strengthening Management Foundations
The Group will seek to improve corporate value through continuous efforts to enhance and strengthen
corporate governance. In addition, continuing from the 20 Medium-Term Management Plan, the Groupwill steadily work toward the realization of the three quantitative targets (Prevention of Accidents,
Reduction of Greenhouse Gas Emissions and Workplace Diversity) as prescribed in the “CSR Objectives
for 2025.”
The Group looks forward to your continued support and cooperation as our stockholder.

6)

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

The Company’s
percentage of equity
Principal businessparticipation
100
Manufacturing and sale of cement
Manufacturing and sale of autoclaved lightweight
97.7
aerated concrete (ALC)
100
Manufacturing and sale of cement
Manufacturing and sale of various construction
100
materials such as admixture and non-shrink grout
Manufacturing and sale of cement, ready-mixed
100
concrete, etc. in the United States

Jiangnan-Onoda Cement Co.,
88.5
Manufacturing and sale of cement in China
Ltd.
Dalian Onoda Cement Co.,
84.8
Manufacturing and sale of cement in China
Ltd.
Nghi Son Cement
65.0
Manufacturing and sale of cement in Vietnam
Corporation
Taiheiyo Cement Philippines,
Manufacturing and sale of cement in the
100
Inc.
Philippines(Notes) 1. The Company’s percentage of equity participation includes indirect ownership throughsubsidiaries.
2. Qinhuangdao Asano Cement Co., Ltd., which was a subsidiary as of the end of the previous
consolidated fiscal year, has been excluded from the subsidiaries of the Company, due to equity
transfer during the fiscal year under review.
7)

Principal Businesses
Businesses of the Taiheiyo Cement Group are divided into Cement Business Segment, Mineral
Resources Business Segment, Environmental Business Segment, Construction Materials Business
Segment and Other Business Segment, and mainly consist of the following.
(i) Cement Business
Ordinary Portland cement and othervarious types of cement, white cement,
construction – material – purpose
cement, ecocement, cement-basedsolidifying agent, ready-mixed concrete,admixture, etc.
(ii) Mineral Resources Business
Aggregates, limestone, white marble, quicklime,
silica,lightweightaggregatesandlightweight fill material, heavy metal
immobilizer, surplus construction soil recycling
business, etc.

(iii) Environmental Business
Waste recycling business (recycling into cement
raw materials and fuels), flue gas desulfurizationmaterials, recycled products, chemicals, water-related
business, etc.
(iv) Construction Materials Business
Concrete products, construction materials, civilengineering and construction work, etc.
(v) Other Business
Real estate business, engineering business, dataprocessing
business,financebusiness,transportation and warehousing business, chemical
products business, sports business, power supply
business, etc.

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

Location
Sapporo City, Hokkaido
Prefecture
Sendai City, Miyagi
Prefecture
Bunkyo-ku, Tokyo

PlantsName
Kamiiso Plant
Ofunato Plant
Kumagaya
Plant
Saitama Plant

Location
Hokuto City, Hokkaido
Prefecture
Ofunato City, Iwate
Prefecture
Kumagaya City, Saitama
Prefecture
Hidaka City, Saitama
Prefecture
Inabe City, Mie
Prefecture
Tsukumi City, Oita
Prefecture

Takasaki City, Gunma
Prefecture
Nagoya City, Aichi
Fujiwara Plant
Chubu Hokuriku
BranchPrefecture
Kansai Shikoku
Osaka City, Osaka
Oita Plant
BranchPrefecture
Chugoku Branch
Hiroshima City, Hiroshima
Prefecture
Kyushu Branch
Fukuoka City, Fukuoka
Prefecture(Note) The Company relocated its Tokyo Branch from Bunkyo-ku, Tokyo to Minato-ku, Tokyo
on May 10, 2021.
(ii) Principal business locations of material subsidiaries
Name
Location
DC Co., Ltd.
Kawasaki City, Kanagawa Prefecture
Clion Co., Ltd.
Koto-ku, Tokyo
Myojyo Cement Co., Ltd.
Itoigawa City, Niigata Prefecture
Taiheiyo Materials Corporation
Kita-ku, Tokyo
CalPortland Company
California, USA
Jiangnan-Onoda Cement Co., Ltd.
Jiangsu, China
Dalian Onoda Cement Co., Ltd.
Liaoning, China
Nghi Son Cement Corporation
Tinh Thanh Hoa, Vietnam
Taiheiyo Cement Philippines, Inc.
Cebu, Philippines

9)

Employees
Business Segment
Number of Employees (persons)Cement7,780
Mineral Resources
967
Environmental
163
Construction Materials
1,215
Other
2,167
Group-wide (common)
294
Total
12,586(Notes) 1. The number of employees refers to the number of persons on the payroll.
2. The above includes the following number of employees of the Company. The number of
employees stated below does not include employees on temporary retirement, seconded
employees, etc. (524 persons).
Number of
Increase or decrease from
Average age
Average length of
employees
previous year
service
1,838 persons
Increase of 40 persons
40.7 years old
18.5 years

10)

Major Lenders and Amount of Borrowings

LenderMizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation

Outstanding borrowings (millions of yen)
29,62724,187

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

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

127,140,278 shares(including 8,248,450 shares of treasury stock)3) Number of stockholders

51,601 persons

4) Major stockholders
Stockholder name

Holding

Stockholding ratio(thousand shares)(%)

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

11,746

9.8

CUSTODY BANK OF JAPAN, LTD. (TRUSTACCOUNT)

6,031

5.0

STATE STREET BANK AND TRUST COMPANY
5050013,505

2.9

THE BANK OF NEW YORK MELLON 140044

2,267

1.9

MIZUHO BANK, LTD.

2,000

1.6

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

1,908

1.6

CUSTODY BANK OF JAPAN, LTD. (TRUSTACCOUNT 5)

1,815

1.5

STATE STREET BANK WEST CLIENT - TREATY
505234

1,741

1.4

CUSTODY BANK OF JAPAN, LTD. (TRUSTACCOUNT 6)

1,609

1.3

MEIJI YASUDA LIFE INSURANCE COMPANY

1,527

1.2

(Notes)1. The Company holds 8,248,450 shares of treasury stock.
2. The stockholding ratio is calculated by excluding treasury stock.

3. Company Officers
1)

Name, etc. of Directors and Corporate Auditors
Position

Name

Chairman and Director

Shuji Fukuda

President and Representative
Director

Masafumi Fushihara

Vice President and Representative
Director

Yuuichi Kitabayashi

Director

Masahiro Karino

Director

Kunihiro Ando

Director

Yoshiko Koizumi

Director

Shinhachiro Emori

Corporate Auditor (Standing)Toshihide Nishimura

Corporate Auditor (Standing)Shigeru Matsushima
Wakako Mitani

Significant concurrent positions
Outside Director of Sapporo Holdings
LimitedOutside Audit & Supervisory Board
Member of TOBU RAILWAY CO., LTD.

Overseeing Corporate Planning
Department

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

Corporate Auditor(Name on family
registration:
Wakako Akamatsu)

Lawyer, Partner of TANABE &PARTNERS

Corporate Auditor

Yoshio Fujima

Certified Public Accountant(Notes)

1.
2.
3.
4.

5.

6.
7.

8.

9.

Directors Yoshiko Koizumi and Shinhachiro Emori are Outside Directors.
Corporate Auditors Wakako Mitani and Yoshio Fujima are Outside Corporate Auditors.
Director Shinhachiro Emori was newly elected at the 22nd Ordinary General Meeting of Stockholders
held on June 26, 2020, and took office on the same day.
Directors Keiichi Miura, Katsuhide Fukuhara, Toshiaki Suzuki, Yoshiyuki Uenoyama, Hideaki Asakura,
Tetsuya Ohashi, Yoshifumi Taura and Yuzo Arima retired from office at the close of the 22nd Ordinary
General Meeting of Stockholders held on June 26, 2020.
Corporate Auditors Toshihide Nishimura and Shigeru Matsushima have hands-on experience in thebusiness management division of the Company and have considerable financial and accounting
expertise.
Corporate Auditor Yoshio Fujima has the qualification of Certified Public Accountant and has
considerable financial and accounting expertise.
The Company receives legal advice as required from lawyers of City-Yuwa Partners other than
Director Yoshiko Koizumi, where she holds a significant concurrent position, but the Company has
not concluded an advisory agreement with the law firm. The advisory fees paid to the law firm isless than 1% of net sales for each of the Company and the law firm, and there is no special interest
relationship. Additionally, there are no special interest relationships between the Company and anyof the significant concurrent positions of the other Outside Executives.
The Company has registered Directors Yoshiko Koizumi and Shinhachiro Emori as independent
directors and Corporate Auditors Wakako Mitani and Yoshio Fujima as independent corporate
auditors at Tokyo Stock Exchange, Inc. and Securities Membership Corporation Fukuoka Stock
Exchange.
The following executive changes were made on April 1, 2021:

Position, assignment and significant concurrent positions
Name
BeforeYuuichi
Kitabayashi

Vice President andRepresentative Director
Overseeing Corporate
Planning Department

After

Vice President andRepresentative Director
Overseeing Carbon Neutral
Technology Development
Project Team and TCPI
Renewal Project Team

10. The Company has introduced an executive officer system; executive officers as of April 1, 2021 are
as follows.
Position
Name
Assignment
Overseeing Human Resources Department,
Senior Executive Officer
Masahiro Karino*
Legal Department and Internal Auditing
Department
Overseeing Mining Department, Mineral
Resources Business Department andSenior Executive Officer
Kunihiro Ando*
Environmental Business Development
Department
Overseeing Secretarial Department, Corporate
Senior Executive Officer
Tetsuya Ohashi
Planning Department and General Affairs
Department
Overseeing Accounting & Finance Department,
Managing Executive
Hideaki Asakura
Purchasing Department, and Real Estate
OfficerBusiness Department
Senior General Manager of International
Business Division
Managing Executive
Yoshifumi Taura
Officer
Chairman of Taiheiyo Cement (China)
Investment Co., Ltd.
Senior General Manager of Cement Business
Managing Executive
Yukimasa Nakano
Officer
Division
Overseeing Intellectual Property Department andManaging Executive
Officer

Takayoshi Okamura

Managing Executive
Officer

Koshiro Hidaka

Managing Executive
Officer

Masaki Takahashi

Executive Officer

Susumu Miyazaki

Executive Officer

Naoyuki Kira

Executive Officer

Shinji Fukami

Executive Officer

Tetsuya Suemura

General Manager of Internal Auditing Department

Executive Officer

Hiroaki Matsubara

Executive Officer

Hidenobu Makino

Executive Officer

Akihiko Domoto

Executive Officer

Isao Matsui

General Manager of Tohoku Branch
General Manager of Human Resources
Department
General Manager of Mineral Resources
Business Department
General Director of Nghi Son Cement
Corporation

Executive Officer

Hideki Mori

General Manager of Tokyo Branch

Executive Officer

Yoshihito Izawa

General Director of
Taiheiyo Cement Philippines, Inc.

Central Research Laboratory
Overseeing Production Department andMaintenance & Engineering Department andPresident of Ofunato Power Inc.
Overseeing Construction Materials Business
Department and Business Planning &Administration Department
General Manager of Purchasing Department
General Manager of Sales Department, Cement
Business Division
General Manager of Environmental Business
Development Department

Executive Officer

Terumasa Kitamura

General Manager of Production Department

General Manager of Central ResearchLaboratory
Persons who concurrently serve as Directors are marked with an asterisk (*).
Executive Officer

Hiroyuki Takano

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

3)

Directors and Officers Liability Insurance Contract
The Company has concluded a directors and officers liability insurance contract provided for in Article
430-3, Paragraph 1 of the Companies Act, that insures all Directors, Corporate Auditors and Executive
Officers with an insurance company. Said insurance contract covers damages that may arise when theinsured assumes liability for the execution of his or her duties as corporate officer.

4)Compensation, etc. to Directors and Corporate Auditors for the Current Fiscal Year(i) Matters concerning the policy for determining compensation, etc. for individual Directors
The Company has determined policy for determining compensation, etc. for individual Directors(hereinafter the “Officer Compensation Determination Policy”) at the meeting of Board of Directors.
When determining compensation for Directors, the Company will clarify management responsibilities,
raise awareness of improving business performance, and strengthen the link between the compensationand stockholders’ benefit. The outline of Directors’ compensation determination process is as follows:
The Company establishes the Nomination and Compensation Advisory Committee, the majority of whose
members are Outside Directors and is chaired by an Outside Director, as an advisory body to the Boardof Directors. From the view of enhancing the fairness, transparency, and objectivity, the compensation
shall be discussed by said Committee, which reports to the Board of Directors, and shall be determinedat the discretion of Representative Directors at the Board of Directors meeting, within the range of suitableamount based on a resolution of the General Meeting of Stockholders and the regulations of the Company,
while also respecting the contents of report of the Nomination and Compensation Advisory Committee tothe maximum extent possible.
The Company established the Nomination and Compensation Advisory Committee in March 2021. As
a result of consulting said Committee on compensation for Directors for FY2020, the Board of Directors
has received a report to the effect that the compensation is in line with said policy and appropriate, as it
was determined within the range of suitable amount based on a resolution of the General Meeting ofStockholders and the regulations of the Company.
The compensation plan for Directors (excluding Outside Directors) consists of fixed compensation andperformance-linked compensation whereas the compensation plan for Outside Directors consists only of
fixed compensation.
・The amounts of fixed compensation are determined according to the rank of position.
・The amount of the performance-linked compensation of Directors (excluding Outside Directors) is
calculated by multiplying the amount calculated as profit attributable to owners of parent for thecurrent fiscal year times 1% (an upper limit of ¥400 million) by the multiplier assigned to eachposition. It is paid starting from July in the fiscal year following the end of the current fiscal year.
However, this amount can be reduced in consideration of the financial performance of the Company orother circumstances. In principle, performance-linked compensation is not paid if the amount ofannual dividend for the current fiscal year is less than ¥30 per share.
・The composition ratio of fixed compensation and performance-linked compensation in the amount ofcompensation is 100% to approximately 60% for fixed compensation and 0% to approximately 40%
for performance-linked compensation, depending on profit. Performance-linked compensation makes
up 33% of the total compensation for the current fiscal year.
・Profit attributable to owners of parent was chosen as an indicator with an aim to strengthen the link
between the compensation and stockholders’ benefit. The actual result of profit attributable to ownersof parent for FY2019, which serves as a basis for calculating the performance-linked compensation forthe current fiscal year, was ¥39.1 billion.
Based on the above, the Board of Directors of the Company has judged that the content of compensation,etc. for individual Director for FY2020 is in line with the determination policy.
Furthermore, the Company determined to revise the Officer Compensation Determination Policy at theBoard of Directors meeting held on May 20, 2021, subject to the approval of Proposal No. 5“Determination of Compensation for Granting Restricted Stock to Directors Other Than Outside Directors
and Revisions of Compensation Amounts for Directors” at the 23rd Ordinary General Meeting ofStockholders to be held on June 29, 2021. The determination was made after discussion within theNomination and Compensation Advisory Committee, which has reported to the effect that revised Officer
Compensation Determination Policy was appropriate. The contents of revised Officer Compensation
Determination Policy are as follows.
The Company has determined policy for determining compensation, etc. for individual Directors(hereinafter the “Officer Compensation Determination Policy”) at the meeting of Board of Directors.
When determining compensation for Directors, the Company will clarify management responsibilities,
raise awareness of improving business performance, and strengthen the link between the compensationand stockholders’ benefit, while offering the Directors incentives to achieve improvement of the longterm business performance and corporate value of the Group and sharing more of that value with thestockholders. The outline of Directors’ compensation determination process is as follows: The Company
establishes the Nomination and Compensation Advisory Committee, the majority of whose members are
Outside Directors and is chaired by an Outside Director, as an advisory body to the Board of Directors.
From the view of enhancing the fairness, transparency, and objectivity, the compensation shall be
discussed by said Committee, which reports to the Board of Directors, and shall be determined at thediscretion of Representative Directors at the Board of Directors meeting, within the range of suitableamount based on a resolution of the General Meeting of Stockholders and the regulations of the Company,
while also respecting the contents of report of the Nomination and Compensation Advisory Committee tothe maximum extent possible.
The compensation plan for Directors (excluding Outside Directors) consists of fixed compensation,
stock compensation and performance-linked compensation whereas the compensation plan for Outside
Directors consists only of fixed compensation.
・The amounts of fixed compensation and stock compensation are determined according to the rank ofposition.
・The amount of the performance-linked compensation of Directors (excluding Outside Directors) is
calculated by multiplying the amount calculated as profit attributable to owners of parent for thecurrent fiscal year times 1% (an upper limit of ¥400 million) by the multiplier assigned to eachposition. It is paid starting from July in the fiscal year following the end of the current fiscal year.
However, this amount can be reduced in consideration of the financial performance of the Company orother circumstances. In principle, performance-linked compensation is not paid if the amount ofannual dividend for the current fiscal year is less than ¥30 per share.
・Stock compensation is paid every year by granting restricted stock according to the rank of position.
The transfer restrictions will be canceled when a Director retires.
・The composition ratio of fixed compensation, stock compensation and performance-linked
compensation in the amount of compensation is approximately 90% to approximately 45% for fixedcompensation, approximately 10% to approximately 15% for stock compensation, and 0% toapproximately 40% for performance-linked compensation, depending on profit.
・Profit attributable to owners of parent was chosen as an indicator with an aim to strengthen the link
between the compensation and stockholders’ benefit.
(ii) Matters concerning the policy for determining compensation, etc. for individual Corporate Auditor
The compensation plans for Corporate Auditors of the Company consist only of fixed compensation.
The amounts of compensation of individual Corporate Auditors are determined by consultation among
Corporate Auditors.
(iii) Matters concerning resolutions of the General Meetings of Stockholders regarding compensation, etc.
for Directors and Corporate Auditors
The upper limits of compensation for Directors and Corporate Auditors are separately set by aresolution of the General Meeting of Stockholders. The date of resolution of the General Meeting ofStockholders on the compensation for Directors was June 27, 2007, and the number of Directors after
said General Meeting of Stockholders was eleven. The date of resolution on the compensation for
Corporate Auditors was June 29, 2000, and the number of Corporate Auditors after said General Meetingof Stockholders was four. The content of the resolution of the General Meeting of Stockholders on thecompensation for Directors is such that the amount shall be not more than ¥100 million per month, andthe content of the resolution on the compensation for Corporate Auditors is such that the amount shall be
not more than ¥13 million per month.
(iv) Matters concerning delegation related to determination of compensation, etc. for individual Director
Since it is appropriate that the amount of compensation for each Director is determined byRepresentative Director who supervises the overall business, the Company has made a resolution to leave
the determination of the amount of compensation, etc. for individual Director to the discretion of President
and Representative Director Masafumi Fushihara and Vice President and Representative Director(Overseeing Corporate Planning Department) Yuuichi Kitabayashi at the Board of Directors meetingincluding Outside Directors held in June 2020, within the range of suitable amount based on a resolutionof the General Meeting of Stockholders and the regulations of the Company.
(v) Total Amount of Compensation, etc. to Directors and Corporate Auditors
Officer
Total amount of
Total amount by type of
Number of target
classificationcompensation,compensation, etc.
Officers
etc.
(millions of yen)(persons)(millions of
Fixed
Performanceyen)compensation
linkedcompensation
Directors
552
379
173
15
Corporate Auditors
72
72
4(of which, Outside
(51)
(51)
(-)
(5)
Officers)(Note)The number of persons paid above includes eight Directors (including one Outside Officer)
who retired or resigned at the close of the 22nd Ordinary General Meeting of Stockholders
held on June 26, 2020.
5)

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

Comment status

Made comments as appropriate
at the meetings of the Board of
YoshikoDirectors based on her wealth of
Director
13 out of 13 meetings
experience and insight inKoizumicorporate management mainly
as a lawyer.
Made comments as appropriate
at the meetings of the Board of
Shinhachiro
Directors based on his wealth of
Director
10 out of 10 meetings
experience
mainlyasa
Emorimanagement executive of abusiness corporation.
Made comments as appropriate
at the meetings of the Board of
Directors and meetings of the
Corporate Wakako
13 out of 13 meetings 14 out of 14 meetings Board of Auditors based on her
AuditorMitaniwealth of experience and insightincorporate
management
mainly as a lawyer.
Made comments as appropriate
at the meetings of the Board of
Directors and meetings of theBoard of Auditors based on his
Corporate Yoshio
13 out of 13 meetings 14 out of 14 meetings
wealth of experience and insight
AuditorFujimain corporate accounting mainlyasaCertifiedPublicAccountant.
(Notes) 1. During the fiscal year under review, 13 Board of Directors meetings were held. Ten Board of
Directors meetings were held after Director Shinhachiro Emori took office.
2. In addition to the number of Board of Directors meetings held as stated above, pursuant to theprovisions of Article 370 of the Companies Act and Article 24 of the Articles of Incorporation of
the Company, a written resolution was made, for which the Company deems that the resolution
was made at the Board of Directors meeting.
3. During the fiscal year under review, 14 Board of Auditors meetings were held.

(ii) Outline of duties performed by Outside Directors regarding their expected roles
As a lawyer, she has a wealth of experience, achievements, andknowledge in corporate legal affairs. The Company expects that
she will fulfill monitoring and supervision functions from thisperspective. She has provided active statements such as asking
Director
Yoshiko Koizumi
questions and making suggestions regarding overseas investment,
new business projects, human resource development plans, etc.
based on this perspective, and has played appropriate roles
including supervision and advice on business execution as Outside
Director of the Company.
As a manager of a business corporation, he has a wealth ofexperience, achievements, and knowledge. The Company expects
that he will fulfill monitoring and supervision functions from thisperspective. He has provided active statements such as asking
Director
Shinhachiro Emori questions and making suggestions regarding capital investment
plans of the Group, new business projects, etc. based on thisperspective, and has played appropriate roles including
supervision and advice on business execution as Outside Directorof the Company.

4. Accounting Auditor
1)

Name of the Company’s Accounting Auditor
KPMG AZSA LLC

2)Accounting Auditor’s Compensation, etc. in Fiscal Year under Review¥ 114 million(Notes) 1. Under the audit agreement between the Company and its Accounting Auditor, the amount ofcompensation for audits pursuant to the Companies Act and audits pursuant to the Financial
Instruments and Exchange Act are not distinguished from each other and are indistinguishable
in practice. Therefore, the above amount includes compensation, etc. for audits pursuant to
the Financial Instruments and Exchange Act.
2. The Board of Auditors of the Company, in observance of the “Practical Guidelines for
Cooperation with Accounting Auditors” published by the Japan Audit & Supervisory Board
Members Association, has confirmed the time taken to audit each audit item, trends in audit
fees, and the status of execution of duties of the Accounting Auditor, and upon considering theappropriateness of the audit plan and appropriateness of audit fees for the fiscal year underreview, agrees to the fees, etc., of the Accounting Auditor under Article 399, Paragraph 1 of
the Companies Act.

3)

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

4)

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

5)

Total Amount of Money and Other Property Benefits Payable to Accounting Auditor by theCompany and its Subsidiaries¥ 255 million(Note) Among significant subsidiaries of the Company, CalPortland Company, Jiangnan-Onoda Cement
Co., Ltd., Dalian Onoda Cement Co., Ltd., Nghi Son Cement Corporation and Taiheiyo Cement
Philippines, Inc. have been audited (limited to audits under the provisions of the Companies Act
or the Financial Instruments and Exchange Act (including laws and ordinances of foreign countries
corresponding to said Acts)) by a Certified Public Accountant or an audit corporation other thanthe Company’s Accounting Auditor (including those with foreign qualifications equivalent to
CPA/auditor qualifications).

5.

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

Summary of the System to Ensure the Proper Execution of Operations

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

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

2)

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

3)

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

4)

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

5)

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

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

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

7)

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

8)

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

9)

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

(2)

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

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

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

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

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

3)

Ensuring proper execution of operations at the Group(i) Based on the Group Companies Management Rules, a system is maintained where group companies
and the Company deliberate on important matters, direction and management is conducted as
required, and support is provided to management.
(ii) While understanding the management conditions of each group company through periodic
achievement reporting, etc., a Group Executive Committee meeting is held twice per year to
exchange opinions on various themes and share information related to management of the Group.
During the fiscal year under review, the Group Executive Committee meeting scheduled for May
2020 was cancelled owing to the effects of the spread of COVID-19, so the meeting was only held
once during the year.
(iii) Directors and Corporate Auditors of subsidiaries are seconded from the Company to supervise
business execution and implement audits regarding the internal control systems.
(iv) The Internal Auditing Department, upon formulating an audit implementation plan based on theannual audit policy, implements internal audits toward subsidiaries, and provides advice andrecommendations.

4)

Execution of business by Directors(i) The Board of Directors is composed of seven persons, including two Outside Directors, and meetings
were held 13 times during the fiscal year under review, where deliberation and determination wasmade regarding important matters defined by laws and regulations and the Articles of Incorporation,in addition to supervision of the execution of business by Directors. In addition to the number ofBoard of Directors meetings held as stated above, a written resolution was made, for which theCompany deems that the resolution was made at the Board of Directors meeting, pursuant to theprovisions of Article 370 of the Companies Act and Article 24 of the Articles of Incorporation of theCompany.
(ii) For important matters other than those to be deliberated by the Board of Directors, Executive
Committee meetings were held 17 times for deliberation.
(iii) To secure the efficiency of execution of business by Directors, reports on the status of businessexecution are made at the Board of Directors by dividing up duties among the Directors andExecutive Officers.
(iv) Regarding management execution, a certain level of authority is delegated to Executive Officers.
Executive Officers execute business via a Management by Objectives that is in line with theMedium-term Management Plan and the annual management policy (President’s policy), and theBoard of Directors reviews the status of progress.

5)

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

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

Consolidated Financial Statements(April 1, 2020 - March 31, 2021)

Consolidated Balance Sheets
Account

FY2020(as of March 31, 2021)(Unit: Millions of yen)
(Reference)
FY2019(as of March 31, 2020)

AssetsCurrent assets

327,333

318,502

Cash and deposits

73,07451,641

Notes and accounts receivable-trade142,515

159,048

Electronically recorded monetary claims-operating

19,234

13,507

Merchandise and finished goods

29,42130,897Work in process

2,079

2,310

Raw materials and supplies

43,87345,075

Short-term loans receivable

2,557

3,289

Other

15,373

14,035

Allowance for doubtful accounts(795)(1,302)

Noncurrent Assets

716,893

714,420

Property, plant and equipment

540,342

544,553

Buildings and structures

138,410

138,947

Machinery, equipment and vehicles

154,207

162,944Land

164,193

164,869

Lease assets

20,40021,941

Construction in progress

37,18630,665

Other

25,94425,184

Intangible assets

28,19229,814

159

179

Other

28,033

29,634

Investments and other assets

148,358

140,053

Investment securities

91,92682,931Long-term loans receivable

1,538

1,880

Deferred tax assets

9,635

21,118Assets for retirement benefits

23,099

11,090Other

28,29629,359Allowance for doubtful accounts(6,137)(6,327)

1,044,227

1,032,923

Goodwill

Total Assets

Account

Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Short-term loans payable
Commercial papers
Current portion of bonds
Income taxes payable
Provision for bonuses
Other provision
Other
Noncurrent liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities
Liability for retirement benefits
Provision for directors' retirement benefits
Provision for special repairs
Other provision
Lease obligations
Asset retirement obligations
Other
Total liabilities
Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Retirement benefits liability adjustments
Non-controlling interests
Total net assets
Total liabilities and net assets

FY2020(as of March 31, 2021)(Reference) FY2019(as of March 31, 2020)

304,83173,596
7,744
103,538－
10,000
4,590
6,265
404
98,691
232,574
50,00084,5638,130
24,703503
180
511
14,352
7,821
41,807537,405

313,771
83,4305,330
120,783
12,000
－
6,024
6,158
139
79,906245,91030,000103,332
7,491
24,999521
128
828
17,996
7,341
53,270559,682

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

456,395
86,17460,233
326,086(16,098)(19,716)
6,723
(0)
4,968
(21,413)(9,995)36,563473,241
1,032,923

Consolidated Statements of Income
Account

FY2020(Unit: Millions of yen)
(Reference)
FY2019(April 1, 2020 - March 31, 2021) (April 1, 2019 - March 31, 2020)

Net sales

863,903884,350

Cost of sales

672,631689,321

191,272

195,029

127,661

134,020

Operating income

63,61061,008Non-operating income

8,428

8,075

Interest and dividends income

1,874

1,808

Equity in earnings of unconsolidated subsidiaries and affiliates

1,879

2,427

Foreign exchange gains

1,042

1,035

Other

3,632

2,803

Non-operating expenses

6,295

8,541

Interest expenses

3,498

3,876

Other

2,797

4,665

Ordinary income

65,74460,541

Extraordinary income

7,226

3,838

Gain on disposal of non-current assets

3,247

754

Gain on sales of investment securities

3,567

205

Compensation income

－

2,730

Other

411

147

7,865

12,602

Loss on disposal of non-current assets

5,494

5,580

Loss on sales of investment securities

61

36

Loss on valuation of investment securities

47

222

Impairment loss

969

5,451

Loss on temporary suspension of operations

547

－

Other

744

1,311

Income before income taxes

65,105

51,777

Income taxes-current

9,170

11,223

Income taxes-deferred

6,285

(300)

Profit49,64940,854

Profit (loss) attributable to non-controlling interests

2,848

1,703

Profit attributable to owners of parent

46,80039,151Gross profit
Selling, general and administrative expenses

Extraordinary loss

Non-consolidated Financial Statements(April 1, 2020 - March 31, 2021)

Non-consolidated Balance Sheets
Account

FY2020(as of March 31, 2021)(Unit: Millions of yen)
(Reference)
FY2019(as of March 31, 2020)

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

103,358
10,273
10,3085,458
45,958
7,648
16,936
520
6,269
(14)
475,628
220,582
26,07450,54342,3491,153
1,298
12,74364,052
4,314
18,052
15,960
9,790
1,467
4,702
239,085
25,801
168,981
35
9,372
24
10,79518,03030,612(24,568)

106,317
4,011
14,7253,289
47,764
8,092
17,537474
10,422(0)471,832
216,01224,65150,70440,935713
1,082
12,81165,782
4,096
15,234
15,236
10,052
694
4,489
240,584
20,536
170,55435
12,15539
10,613
17,43433,804(24,589)

Total Assets

578,986

578,149

Account

FY2020(as of March 31, 2021)(Reference) FY2019(as of March 31, 2020)

Liabilities
Current liabilities
Electronically recorded obligations-operating
Accounts payable-trade
Short-term loans payable
Commercial papers
Current portion of bonds
Lease obligations
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Unearned revenue
Provision for bonuses
Electronically recorded obligations-non-operating
Other
Noncurrent liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for loss on guarantees
Guarantee deposits received
Asset retirement obligations
Other

131,4028,105
21,61247,609－10,0001,030
12,967
13,159
124
386
273
1,548
2,180
12,168235
160,378
50,00066,564
3,648
5,646
1,058
30,2002,773
487

148,058
8,861
21,55259,52412,000－958
14,236
12,771
1,283
907
293
1,394
2,082
11,933257
148,003
30,00079,346
3,459
353
2,173
29,515
2,552
602

Total liabilities

291,781

296,061

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

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

277,613
86,17456,27642,215
14,061
150,798
150,798285
15,823
134,689(15,635)
4,474
4,474

Total net assets

287,205

282,088

Total liabilities and net assets

578,986

578,149

Net Assets

(Translation)

Non-consolidated Statements of Income
Account

FY2020(Unit: Millions of yen)
(Reference)
FY2019(April 1, 2020 - March 31, 2021) (April 1, 2019 - March 31, 2020)

Net sales

295,277

314,427

Cost of sales

214,580

228,648

80,69785,77863,71665,475

Operating income

16,981

20,302Non-operating income

9,491

8,087

Dividends income

6,534

6,158

Reversal of provision for loss on guarantees

1,115

－

574

1,162

1,268

767

Non-operating expenses

3,277

3,585

Interest expenses

955

874

1

8

900

－

Other

1,420

2,702

Ordinary income

23,19524,804Extraordinary income

5,518

466

Gain on disposal of non-current assets

1,273

336

Gain on sales of investment securities

249

120

-

9

3,995

-

6,215

7,132

3,833

3,844

Loss on liquidation of subsidiaries and affiliates

00Loss on valuation of investment securities

4

32

1,576

235

－

1,432

48

0

Impairment loss

753

645

Compensation expenses－

943

Income before income taxes

22,49818,137

Income taxes-current

392

4,220

Income taxes-deferred

3,571(1,432)

Net income

18,534

15,349Gross profit
Selling, general and administrative expenses

Foreign exchange gains
Other

Provision of allowance for doubtful accounts
Bad debts written off

Gain on sales of shares of subsidiaries and affiliates
Gain on sales of investments in capital of subsidiaries andaffiliates
Extraordinary loss
Loss on disposal of non-current assets

Loss on valuation of shares of subsidiaries and affiliates
Loss on valuation of investments in capital of subsidiaries andaffiliates
Loss on sales of investment securities

1(Translation)

Independent Auditor’s Report
The Board of Directors of Taiheiyo Cement Corporation:
OpinionWe have audited the consolidated financial statements, which comprise the consolidated balance sheet,the consolidated statement of income, the consolidated statement of changes in net assets and the related
notes of Taiheiyo Cement Corporation (“the Company”) and its consolidated subsidiaries (collectively
referred to as “the Group"), as at March 31, 2021 and for the year from April 1, 2020 to March 31, 2021
in accordance with Article 444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position and the results of operations of the Group for the period, forwhich the consolidated financial statements were prepared, in accordance with accounting principles
generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Responsibilities of Management and Corporate auditors and the board of corporate auditors for
the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties including the design, implementation and maintenance of the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with auditing standards generally accepted in Japan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Group’s internal control.
2

(Translation)



Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.

Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation, structure
and content of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company and its
subsidiaries which are required to be disclosed pursuant to the provisions of the Certified Public
Accountants Act of Japan.
Reiji Kobayashi (Seal)
Designated Engagement Partner
Certified Public Accountant
Yoshihiro Uehara (Seal)
Designated Engagement Partner
Certified Public Accountant
Akihisa Sada (Seal)
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, JapanMay 17, 2021

3

(Translation)

Independent Auditor’s Report
The Board of Directors of Taiheiyo Cement Corporation:
OpinionWe have audited the financial statements, which comprise the balance sheet, the statement of income, thestatement of changes in net assets and the related notes, and the supplementary schedules of Taiheiyo
Cement Corporation (“the Company”) as at March 31, 2021 and for the year from April 1, 2020 to March
31, 2021 in accordance with Article 436-2-1 of the Companies Act.
In our opinion, the financial statements and the supplementary schedules referred to above present fairly,
in all material respects, the financial position and the results of operations of the Company for the period,
for which the financial statements and the supplementary schedules were prepared, in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Auditof the Financial Statements and Others section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors for
the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the
supplementary schedules in accordance with accounting principles generally accepted in Japan, and forsuch internal control as management determines is necessary to enable the preparation of financial
statements and the supplementary schedules that are free from material misstatement, whether due tofraud or error.
In preparing the financial statements and the supplementary schedules, management is responsible forassessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern in accordance with accounting principles generally accepted in Japan and using thegoing concern basis of accounting unless management either intends to liquidate the Company or tocease operations, or has no realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties including the design, implementation and maintenance of the Company’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements and Others
Our objectives are to obtain reasonable assurance about whether the financial statements and the
supplementary schedules as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level ofassurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally
accepted in Japan will always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements andthe supplementary schedules.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements and the
supplementary schedules, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.

4

(Translation)

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an opinion
on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting andbased on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements and the supplementary schedules or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.

Evaluate whether the presentation and disclosures in the financial statements and the supplementaryschedules are in accordance with accounting standards generally accepted in Japan, the overall
presentation, structure and content of the financial statements and the supplementary schedules,
including the disclosures, and whether the financial statements and the supplementary schedules
represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which arerequired to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
Reiji Kobayashi (Seal)
Designated Engagement Partner
Certified Public Accountant
Yoshihiro Uehara (Seal)
Designated Engagement Partner
Certified Public Accountant
Akihisa Sada (Seal)
Designated Engagement Partner
Certified Public Accountant

KPMG AZSA LLC
Tokyo Office, JapanMay 17, 2021.

5

(Translation)
Board of Auditors’ Audit Report (Copy)

Audit Report
The Board of Auditors has prepared this Audit Report following deliberations based on the respective audit reports
prepared by Corporate Auditors in relation to the execution of duties by Directors for the 23rd fiscal term from April
1, 2020 to March 31, 2021. The report is as follows.
1. Method and Description of Audit by Corporate Auditors and the Board of Auditors(1) The Board of Auditors determined the audit policy, audit plan, etc., received reports from each Corporate
Auditor on the progress and results of his/her audit, in addition to receiving reports from Directors, etc. and the
Accounting Auditor on the execution status of their duties, and sought explanations as necessary.
(2) Each Corporate Auditor, based on the audit standards for Corporate Auditors established by the Board ofAuditors, followed the audit policy, audit plan, etc., communicated with Directors, the Internal Auditing
Department and other employees, etc., endeavored to collect information and develop an environment for the audit,
and implemented audits via the following methods.
1) We attended the meetings of the Board of Directors and other important meetings, received reports from
Directors, employees, etc. on the execution status of their duties, sought explanations as necessary, reviewed
important approval documents, etc., and investigated the status of operations and assets at the head office andprincipal places of business. With respect to subsidiaries, we verified the status of their management at theCompany’s major meetings, and requested explanation as necessary. We also communicated and exchanged
information with the directors, corporate auditors, etc. of subsidiaries by conducting site audits, etc. inaccordance with audit plans and holding regular meetings with the corporate auditors of major subsidiaries.
2) We also monitored and verified the content of the resolution passed by the Board of Directors regarding thedevelopment of a system to ensure that Directors comply with laws, ordinances and the Articles of Incorporationin executing their duties and other systems stipulated in paragraphs 1 and 3 of Article 100 of the Ordinance for
Enforcement of the Companies Act that are required to ensure proper operations of a company group comprisedof a stock company and its subsidiaries, as well as the status of the system developed pursuant to such resolution(i.e., internal control system). In regards to internal controls over financial reporting, we received reports from
Directors, etc. and KPMG AZSA LLC on the evaluation and audit status of such internal controls, and sought
explanations as necessary.
3) We monitored and verified whether or not the Accounting Auditor had maintained its independence and whether
or not it had conducted its audit properly, received reports from the Accounting Auditor on the execution statusof its duties, and sought explanations as necessary. In addition, we were notified by the Accounting Auditor
that it is equipped with a system for ensuring that duties are performed properly (matters listed in the items of
Article 131 of the Company Accounting Ordinance) in accordance with the Quality Control Standards for Audits(issued by the Business Accounting Council on October 28, 2005), etc., and sought explanations as necessary.
Based on the above methods, we examined the Business Report and its supplementary schedules, Nonconsolidated Financial Statements (i.e., Non-consolidated Balance Sheets, Non-consolidated Statements of Income,Non-consolidated Statements of Changes in Net Assets and Notes to the Non-Consolidated Financial Statements)
and their supplementary schedules as well as the Consolidated Financial Statements (i.e., Consolidated Balance
Sheets, Consolidated Statements of Income, Consolidated Statements of Changes in Net Assets and Notes to theConsolidated Financial Statements) for the fiscal year under review.

6

(Translation)
2. Audit Results(1) Results of audit of Business Report, etc.
1. In our opinion, the Business Report and the supplementary schedules are in compliance with laws,
ordinances and the Articles of Incorporation, and fairly represent the Company’s position.
2. No material facts were identified regarding misconduct or violation of any laws, ordinances or the
Articles of Incorporation in relation to the execution of duties by Directors.
3. In our opinion, the Board of Directors’ resolution on the internal control system (including internal
controls over financial reporting) is adequate in content. We found no matters that need to be pointed out
in regards to the content of the records in the Business Report and the execution of duties by Directors in
relation to said internal control system. Of note, we received reports from Directors, etc. and KPMG
AZSA LLC that there are no material inadequacies to be disclosed in relation to internal controls overfinancial reporting as at the time of preparation of this Audit Report.
(2) Results of audit of Non-consolidated Financial Statements and their supplementary schedules
In our opinion, the methods and results of the audit conducted by Accounting Auditor KPMG AZSA LLC arereasonable.
(3) Results of audit of Consolidated Financial Statements
In our opinion, the methods and results of the audit conducted by Accounting Auditor KPMG AZSA LLC arereasonable.
May 19, 2021
Board of Auditors, Taiheiyo Cement Corporation
Corporate Auditor (Standing)Toshihide Nishimura[Seal]

Corporate Auditor (Standing)Shigeru Matsushima[Seal]

Outside Corporate Auditor

Wakako Mitani[Seal]

Outside Corporate Auditor

Yoshio Fujima[Seal]

7