NIPPON STEEL CORPORATION
Notice of the 100th General Meeting of Shareholders

Nippon Steel Corporation
6-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8071

May 31, 2024
Dear Shareholders:Eiji Hashimoto
Representative Director, Chairman and CEO
NIPPON STEEL CORPORATION (Code Number 5401) (the “Company”)
6-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan

Notice of the 100th General Meeting of Shareholders
We are pleased to inform you of the 100th General Meeting of Shareholders which will be held
at 10 a.m., Friday, June 21, 2024, at the banquet room TSURU (Banquet Floor (1st Floor), the Main
Building), Hotel New Otani Tokyo, 4-1, Kioi-cho, Chiyoda-ku, Tokyo, Japan, the agenda of which isset forth below.
In convening the General Meeting of Shareholders, the information that constitutes the content of
the Reference Documents for Exercising Voting Rights, etc. (matters to be provided in electronic format)
is provided in electronic format, and is posted on the Company’s website.
The Company’s website: https://www.nipponsteel.com/en/ir/individual/meeting.html
In addition to the Company’s website above, the matters to be provided in electronic format arealso available on the websites of the Tokyo Stock Exchange (TSE), the Nagoya Stock Exchange (NSE), theFukuoka Stock Exchange (FSE), and the Sapporo Securities Exchange (SSE).
TSE (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
NSE (Listed Company Search):https://www.nse.or.jp/listing/search/ (in Japanese)
FSE (Listings Directory):
https://www.fse.or.jp/english/listed/search.php
SSE (List of Listed Companies):
https://www.sse.or.jp/listing/list (in Japanese)(How to access the information)
For the TSE, NSE, and FSE websites:Enter either Nippon Steel’s security code (5401) or company name (Nippon SteelCorporation).
To see the matters to be provided in electronic format on the TSE website, when the Nippon
Steel name is displayed, select “Basic information” and then “Documents for public
inspection/PR information.” On the NSE website, when the Nippon Steel name is displayed,
select “Timely Disclosure Information.” On the FSE website, select “Detailed information.”
For the SSE website: Look for NIPPON STEEL in the “Steel” category to view the matters tobe provided in electronic format.
In the event of unavoidable circumstances, such as a disaster, we may change the venue and otherdetails of this General Meeting of Shareholders. In such case, notice of any changes will be posted on the
Company’s website. Please check the website mentioned above in advance.
If you wish to exercise your voting rights in advance instead of attending the General
Meeting of Shareholders in person, please review the “Reference Documents for Exercising Voting
Rights” and exercise your voting rights using one of the following methods.

-1-

(Voting via the Internet)
Please read the “Exercise of Voting Rights via the Internet” on page 34 and cast your vote by 5p.m., Thursday, June 20, 2024 (Tokyo time). If you exercise your voting rights multiple times
via the Internet, the last vote will be treated as the vote of record. Meanwhile, institutional
investors can use the Internet voting rights exercise platform operated by ICJ, Inc.
(Voting by mail)Please indicate your choices on the enclosed Voting Rights Exercise Form and return it so that it
will arrive at the Company by 5 p.m., Thursday, June 20, 2024 (Tokyo time).
When votes are registered by both methods, the vote registered via the Internet will be treated as
the vote of record.

-2-

AGENDA
Matters to be reported to the shareholders:
Report on operations for the 99th term (from April 1, 2023 to March 31, 2024), consolidated financial
statements and non-consolidated financial statements, and reports of accounting auditors and the Audit &Supervisory Committee on consolidated financial statements for the 99th term.
Matters for approval by the shareholders:< Company Proposals (Items 1 through 5) >Item 1: Appropriation of Surplus for the 99th Term (from April 1, 2023 to March 31, 2024)
Item 2: Election of Ten (10) Directors (Excluding Directors who are Audit & Supervisory Committee
Members)
Item 3: Election of Five (5) Directors who are Audit & Supervisory Committee Members
Item 4: Revision of the Amount of Compensation for Directors (Excluding Directors who are Audit &Supervisory Committee Members)
Item 5: Revision of the Amount of Compensation for Directors who are Audit & Supervisory Committee
Members<Shareholder Proposals (Items 6 through 8>
Item 6: Partial Amendment to the Articles of Incorporation
Item 7: Partial Amendment to the Articles of Incorporation
Item 8: Partial Amendment to the Articles of Incorporation
The Company’s Board of Directors opposes each of these shareholder proposals (Items 6 through 8).
About handling of your votes
In exercising your voting rights in writing, you will be deemed to have approved the company proposals
and have disapproved the shareholder proposals, should no indication be made on the voting form ofwhether you approve or disapprove each proposal.
1. Doors will open at 9 a.m.
2. Attendees are requested to submit the enclosed Voting Rights Exercise Form at the reception desk upon
arrival at the meeting. When the voting rights are exercised by a proxy, the said proxy is requested tosubmit the Voting Rights Exercise Form of the principal at the reception desk, together with a power ofattorney in this matter. Meanwhile, please note that a proxy must be another shareholder entitled toexercise voting rights.
3. If revisions are made to the matters to be provided in electronic format, the revisions will be indicated on
the websites of the Company, the TSE, the NSE, the FSE, and the SSE indicated above.

-3-

Reference Documents for Exercising Voting Rights< Company Proposals (Items 1 to 5) >Item 1 Appropriation of Surplus for the 99th Term (from April 1, 2023 to March 31, 2024)

The Board of Directors proposes that the term-end dividend for the 99th term will be paid
according to the “Surplus Distribution Policy” described on page 54 as follows:(1)

Kind of Dividend
Cash

(2)

Dividend Payment and Total Payment
85 yen per share
Total payment: 78,381,387,620 yen(3)Effective Date of Dividend
Monday, June 24, 2024

(Reference)
For more information on dividends per share and dividend payout ratio
on a consolidated basis for the 99th Term as well as those trends, see page 46.

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Item 2 Election of Ten (10) Directors (Excluding Directors who are Audit & Supervisory
Committee Members)
The term of office of all ten (10) Directors (excluding Directors who are Audit & Supervisory
Committee Members) ends at the conclusion of the 100th General Meeting of Shareholders. The Board of
Directors proposes that ten (10) Directors (excluding Directors who are Audit & Supervisory Committee
Members) be elected. The candidates are set forth below. Mr. Tetsuro Tomita and Ms. Kuniko Urano are
candidates for Outside Directors.
Candidates for Directors (Excluding Directors who are Audit & Supervisory Committee Members)Name (date of birth)
Brief personal history (with material concurrent
Number of shares of
positions)the Company owned
1 Eiji Hashimoto
April 1979:
Joined NSC(December 7,
April 2009:
Director (under the Executive
1955)
Management System), Director, Plate
Division and Director, Structurals
Division of NSC
April 2011:
Director (under the Executive
Management System) of NSC
October 2012: Executive Officer of the Company
April 2013:
Managing Executive Officer of theCompany
July 2015:
Managing Executive Officer, Vice
Head of Global Business
Development and Project Leader,
Usiminas Project, Global Business
47,192Development Sector of the Company
April 2016:
Executive Vice President and Headof Global Business Development of
the Company
June 2016:
Representative Director, Executive
Vice President and Head of Global
Business Development of theCompany
April 2019:
Representative Director andPresident of the Company
Assumed current position as Representative Director,
Chairman and CEO of the Company in April 2024
(Material concurrent position)
Vice Chair, KEIDANREN (Japan Business
Federation)-5-

Name (date of birth)2

Tadashi Imai(May 22, 1963)

Brief personal history (with material concurrent
positions)
April 1988:
Joined NSC
April 2016:
Executive Officer and Head ofWorks, Nagoya Works of theCompany
April 2019:
Managing Executive Officer of theCompany
June 2020:
Managing Director, Member of theBoard of the Company
April 2021:
Managing Director, Member of theBoard and Deputy Project Leader,Zero-Carbon Steel Project; Deputy
Project Leader, Next-Generation Hot
Strip Mill Project of the Company
February
Managing Director, Member of the2022:
Board and Project Leader, Thai Steel
Project, Global Business
Development Sector; Deputy Project
Leader, Zero-Carbon Steel Project;
Deputy Project Leader, NextGeneration Hot Strip Mill Project of
the Company
April 2022:
Managing Director, Member of theBoard and Project Leader, Thai Steel
Project, Global Business
Development Sector; Vice Head ofGreen Transformation Development;
Deputy Project Leader, NextGeneration Hot Strip Mill Project of
the Company
April 2023:
Representative Director andExecutive Vice President, Head ofGreen Transformation Development;
Deputy Project Leader, Next
Generation Hot Strip Mill Project of
the Company
June 2023:
Representative Director andExecutive Vice President, Head ofGreen Transformation Development;
Project Leader, Electric Furnace
Project; Deputy Project Leader, Next
Generation Hot Strip Mill Project of
the Company
Assumed current position as Representative Director,
President and COO in April 2024
(Responsibilities)
Chairman, The Japan Iron and Steel Federation-6-

Number of shares of
the Company owned

17,751Name (date of birth)

3

Takahiro Mori
(October 3, 1957)

Brief personal history (with material concurrent
positions)
April 1983:
Joined NSC
April 2014:
Executive Officer, Vice Head ofUnit, Flat Products Unit of theCompany
June 2016:
Vice President of Usiminas
Siderúrgicas de Minas Gerais S.A.USIMINAS
April 2020:
Managing Executive Officer, Head ofUnit, Plate Unit, Head of Unit, Pipe
& Tube Unit, Project Leader, VSB
Project, Global Business
Development Sector of the Company
April 2021:
Executive Vice President, Head of
Global Business Development, andProject Leader, India Iron and Steel
Project, Global Business
Development Sector of the Company
June 2021:
Representative Director andExecutive Vice President, Head of
Global Business Development, andProject Leader, India Iron and Steel
Project, Global Business
Development Sector of the Company
April 2023:
Representative Director andExecutive Vice President, Head of
Global Business Development, andProject Leader, India Project, Global
Business Development Sector of theCompany
Assumed current position as Representative Director,
Vice Chairman and Executive Vice President, Head of
Global Business Development; Project Leader, India
Project, Global Business Development Sector; Project
Leader, USS Project of the Company in April 2024
(Responsibilities)
Rendering assistance to Chairman and CEO, andcooperating with President and COO on large-scale
overseas projects
Head of Global Business Development; Project
Leader, India Project, Global Business Development
Sector; Project Leader, USS Project
Accounting & Finance; Overseas Offices (including
locally incorporated companies)(Material concurrent position)
Vice Chairman, WISCO-NIPPON STEEL TinplateCo., Ltd.

-7-

Number of shares of
the Company owned

16,920Name (date of birth)

4

Naoki Sato
(March 23, 1961)

Brief personal history (with material concurrent
positions)
April 1983:
Joined NSC
April 2018:
Managing Executive Officer andHead of Works, Kashima Works of
the Company
April 2020:
Executive Vice President and Headof Works, East Nippon Works of theCompany
April 2021:
Executive Vice President, Project
Leader, Next-Generation Hot Strip
Mill Project, and Deputy Project
Leader, India Iron and Steel Project,
Global Business Development Sectorof the Company
June 2021:
Representative Director andExecutive Vice President, Project
Leader, Next-Generation Hot Strip
Mill Project, and Deputy Project
Leader, India Iron and Steel Project,
Global Business Development Sectorof the Company
April 2022:
Representative Director andExecutive Vice President, Project
Leader, Next-Generation Hot Strip
Mill Project, Project Leader,
Ironmaking Operations Project, and
Deputy Project Leader, India Iron
and Steel Project, Global Business
Development Sector of the Company
April 2023:
Representative Director andExecutive Vice President, Project
Leader, Next-Generation Hot Strip
Mill Project, Project Leader,
Ironmaking Operations Project, and
Deputy Project Leader, India Project,
Global Business Development Sectorof the Company
Assumed current position as Representative Directorand Executive Vice President, Deputy Project Leader,
India Project, Global Business Development Sector;
Deputy Project Leader, Thai Steel Project, Global
Business Development Sector; Deputy Project Leader,
USS Project of the Company in April 2024
(Responsibilities)
Digital Innovation; Information & Communication
Technology; Plant Engineering and Facility
Management; Plant/Machinery Engineering &Construction Management; Ironmaking Technology;
Steelmaking Technology; Energy Technology
Deputy Project Leader, India Project, Global Business
Development Sector; Deputy Project Leader, Thai
Steel Project, Global Business Development Sector;
Deputy Project Leader, USS Project
Cooperating with Executive Vice President H. Minato
on Production and Facilities stabilization concerning
Technical Administration & Planning
Cooperating with Executive Vice President T. Hirose
on Production and Facilities stabilization concerning
Steel Products Units
Cooperating with Executive Vice President T. Morion Technology and Facilities concerning Global
Business Development-8-

Number of shares of
the Company owned

12,031Name (date of birth)

5

Takashi Hirose(April 19, 1962)

Brief personal history (with material concurrent
positions)
April 1986:
Joined NSC
April 2019:
Managing Executive Officer, Head ofUnit, Plate Unit, and Vice Head ofUnit, Flat Products Unit of theCompany
April 2020:
Managing Executive Officer, Head ofUnit, Flat Products Unit, and Project
Leader, Shanghai-Baoshan Coldrolled & Coated Sheet Products
Project, Global Business
Development Sector of the Company
April 2021:
Managing Executive Officer, Head ofUnit, Flat Products Unit, Project
Leader, Shanghai-Baoshan Coldrolled & Coated Sheet Products
Project, Global Business
Development Sector, and Deputy
Project Leader, Next-Generation Hot
Strip Mill Project of the Company
April 2022:
Executive Vice President, Head ofUnit, Flat Products Unit, and Deputy
Project Leader, Next-Generation Hot
Strip Mill Project of the Company
June 2022:
Representative Director andExecutive Vice President, Head ofUnit, Flat Products Unit, and Deputy
Project Leader, Next-Generation Hot
Strip Mill Project of the Company
April 2023:
Representative Director andExecutive Vice President and Deputy
Project Leader, Next-Generation Hot
Strip Mill Project of the Company
January 2024: Representative Director andExecutive Vice President, Head ofUnit, Pipe & Tube Unit, and Deputy
Project Leader, Next-Generation Hot
Strip Mill Project of the Company
Assumed current position as Representative Directorand Executive Vice President and Deputy Project
Leader, Next-Generation Hot Strip Mill Project of theCompany in April 2024
(Responsibilities)
Marketing Administration & Planning; Transportation& Logistics; Project Development; Raw Materials;
Machinery & Materials Procurement; Steel ProductsUnits; Domestic Office and Branches
Deputy Project Leader, Next-Generation Hot Strip
Mill Project
Cooperating with Executive Vice President T. Morion Overseas Offices (including locally incorporated
companies)(Material concurrent position)
Chairman, Baosteel-Nippon Steel Automotive Steel
Sheets Co., Ltd.
Chairman, The Japan Ferrous Raw Materials
Association-9-

Number of shares of
the Company owned

1,291

Name (date of birth)

6

Kazuhisa Fukuda(December 8,
1960)

Brief personal history (with material concurrent
positions)
April 1986:
Joined NSC
April 2018:
Managing Executive Officer andHead of Works, Hirohata Works of
the Company
April 2020:
Managing Executive Officer andHead of Works, Setouchi Works of
the Company
April 2021:
Executive Vice President and Headof Works, Setouchi Works of theCompany
April 2022:
Executive Vice President and Headof Research and Development of theCompany
Assumed current position as Representative Directorand Executive Vice President, and Head of Researchand Development of the Company in June 2023
(Responsibilities)
Head of Research and Development
Cooperating with Executive Vice President H. Minato
on Green Transformation Development(Material concurrent position)
Chairman, The Iron and Steel Institute of Japan
Chairman, The Japan Research and Development
Center For Metals-10-

Number of shares of
the Company owned

9,420

Name (date of birth)7

Hirofumi
Funakoshi(June 17, 1963)

Brief personal history (with material concurrent
positions)
July 1987:
Joined NSC
April 2019:
Executive Officer and Head of
Division, Corporate Planning
Division of the Company
April 2021:
Managing Executive Officer of theCompany
April 2022:
Managing Executive Officer andVice Head of Green Transformation
Department of the Company
April 2023
Executive Vice President of theCompany
Assumed current position as Representative Directorand Executive Vice President of the Company in June
2023
(Responsibilities)Corporate Planning; Group
Companies Planning; General Administration; Legal;Internal Control & Audit; Human Resources;
Environmental Planning; Business Transformation &Standardization; Policy issues concerning Green
Transformation DevelopmentCooperating with
Executive Vice President H. Minato on Environmental
Technology & Management(Material concurrent position)
Representative Director, Nippon Steel Arts
Foundation-11-

Number of shares of
the Company owned

3,271

Name (date of birth)

8[New Candidate]
Hiroyuki Minato(February 23,
1965)

Brief personal history (with material concurrent
positions)
April 1989:
Joined NSC
Executive Officer and Head ofApril 2018:
Division, Technical Administration& Planning Division of the Company
April 2020:
Executive Officer and Head of
Muroran Works of the Company
April 2021:
Managing Executive Officer andHead of Muroran Works of theCompany
April 2022:
Managing Executive Officer of theCompany
April 2023:
Managing Executive Officer and
Deputy Project Leader, Thai Steel
Project, Global Business
Development Sector of the Company
Assumed current position as Representative Directorand Executive Vice President, Project Leader, NextGeneration Hot Strip Mill Project, and Project Leader,Electric Furnace Project of the Company in April
2024(Responsibilities)
Intellectual Property; Safety; Environmental
Technology & Management; Technical
Administration & Planning (includingStandardization); Quality Management; Slag, Cement& Resource Recycling; Technical issues concerning
Green Transformation Development
Project Leader, Next-Generation Hot Strip Mill
Project; Project Leader, Electric Furnace Project
Cooperating with Executive Vice President H.
Funakoshi on Production & Facilities Planning
concerning Corporate Planning
Cooperating with Executive Vice President H.
Funakoshi on Environmental Planning
Cooperating with Executive Vice President T. Hirose
on Steel Products Units
Cooperating with Executive Vice President T. Hirose
on Transportation & Logistics Technology-12-

Number of shares of
the Company owned

5,627

Name (date of birth)9[Outside
Director][Independent
Director]
Tetsuro Tomita(October 10,
1951)

Status ofattendance at theBoard ofDirectors (Fiscal
Year 2023):
93% (13 out of 14
meetings)

Brief personal history (with material concurrent
positions)
April 1974:
Joined Japanese National Railways
April 1987:
Joined East Japan Railway Company
June 2000:
Director and General Manager ofManagement Administration
Department, Corporate Planning
Headquarters of East Japan Railway
Company
June 2003:
Executive Director and Deputy
Director General of Corporate
Planning Headquarters of East Japan
Railway Company
July 2004:
Executive Director and Deputy
Director General of Corporate
Planning Headquarters, General
Manager of IT Business Department,
Corporate Planning Headquarters ofEast Japan Railway Company
June 2005:
Executive Director and Deputy
Director General of Corporate
Planning Headquarters of East Japan
Railway Company
June 2008:
Executive Vice President andRepresentative Director, and Director
General of Life-Style Business
Development Headquarters of East
Japan Railway Company
June 2009:
Executive Vice President andRepresentative Director, and Director
General of Corporate Planning
Headquarters of East Japan Railway
Company
April 2012:
President and Representative
Director, and Director General of
Corporate Planning Headquarters ofEast Japan Railway Company
June 2012:
President and Representative
Director of East Japan Railway
Company
April 2018:
Chairman and Director of East Japan
Railway Company
Assumed current position as Outside Director of theCompany in June 2020
Assumed current position as Advisor of East Japan
Railway Company in April 2024
(Material concurrent position)
Outside Director, ENEOS Holdings, Inc.
Outside Director, Nippon Life Insurance Company- Reasons for the election as Outside Director
Candidate and outline of expected roles
The Board of Directors has proposed the re-election of
Mr. Tetsuro Tomita as an Outside Director because it
believes that he is well-qualified for the position byreason of the deep insight and ample experience in-13-

Number of shares of
the Company owned

3,947

(Notes)1)2)
3)

corporate management, as well as his appropriate
actions and remarks as an Outside Director of theCompany since his appointment at the 96th General
Meeting of Shareholders held on June 24, 2020.
Mr. Tetsuro Tomita is expected to contribute to,among others, decision-makings from various
perspectives, enhancement of supervisory functions
over management and management transparency, ofthe Board of Directors, by actions such as expressing
his opinions and exercising his voting rights from an
independent standpoint in such opportunities as
meetings of the Board of Directors, based on his deep
insight and ample experience.
Mr. Tetsuro Tomita currently serves as an Outside Director of the Company, and will have
served as an Outside Director of the Company for four (4) years as of the conclusion of this
General Meeting of Shareholders.
The Company has already filed Mr. Tetsuro Tomita as a candidate for an “independent
director” with each financial exchange in Japan where it is listed.
Mr. Tetsuro Tomita is not engaged in the execution of business of East Japan Railway
Company, which has a business relationship with the Company for transactions of steel andother products/services. Since the amount of transactions with the said company accountfor less than 1% of the consolidated revenue of the Company, the said company is not a
specified associated service provider of the Company.

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Name (date of birth)

10 [Outside
Director][Independent
Director]
Kuniko Urano(October 19,
1956)

Brief personal history (with material concurrent
positions)
April 1979:
Joined Komatsu Ltd.
April 2011:
Executive Officer, General Manager
of Corporate Communications
Department of Komatsu Ltd.
April 2014:
Executive Officer, General Manager
of Human Resources Department of
Komatsu Ltd.
April 2016:
Senior Executive Officer, General
Manager of Human Resources
Department of Komatsu Ltd.
June 2018:
Director and Senior Executive
Officer of Komatsu Ltd.
April 2021:
Director of Komatsu Ltd.

Number of shares of
the Company owned

Assumed current position as Advisor of Komatsu Ltd.
in June 2021
Assumed current position as Outside Director of theCompany in June 2022
(Material concurrent position)
Status of
Outside Director, Yokogawa Electric Corporation
attendance at the
1,000
Outside Director, MORINAGA & CO., LTD.
Board of- Reasons for the election as Outside Director
Directors (Fiscal
Candidate and outline of expected roles
Year 2023):
The Board of Directors has proposed the re-election of
100% (14 out of
Ms. Kuniko Urano as an Outside Director because it
14 meetings)
believes that she is well-qualified for the position byreason of the deep insight and ample experience incorporate management, as well as her appropriate
actions and remarks as an Outside Director of theCompany since her appointment at the 98th General
Meeting of Shareholders held on June 23, 2022.
Ms. Kuniko Urano is expected to contribute to, among
others, decision-makings from various perspectives,enhancement of supervisory functions overmanagement and management transparency, of theBoard of Directors, by actions such as expressing her
opinions and exercising her voting rights from an
independent standpoint in such opportunities as
meetings of the Board of Directors, based on her deep
insight and ample experience.
(Notes) 1) Ms. Kuniko Urano currently serves as an Outside Director of the Company, and will have
served as an Outside Director of the Company for two (2) years as of the conclusion of this
General Meeting of Shareholders.
2) The Company has already filed Ms. Kuniko Urano as an “independent director” with eachfinancial exchange in Japan where it is listed.
3) Ms. Urano is currently a non-executive officer of Komatsu Ltd., which has a business
relationship with the Company for transactions of steel and other products/services. Since
the amount of transactions with the said company account for less than 1% of theconsolidated revenue of the Company, the said company is not a specified associatedservice provider of the Company.

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(Liability Limitation Agreements)
The Company has concluded an agreement with Mr. Tetsuro Tomita and Ms. Kuniko Urano
limiting their liability under Article 423, Paragraph 1 of the Companies Act to 20 million yen or the amountstipulated under Article 425, Paragraph 1 of the Companies Act, whichever is greater, as long as they act
unknowingly and are not grossly negligent in performing their duties. Upon approval of Item 2 as proposed
herein, the agreements will continue to be in effect.
(Indemnity Agreements)
The Company has concluded an agreement with each of Mr. Eiji Hashimoto, Mr. Tadashi Imai,
Mr. Takahiro Mori, Mr. Naoki Sato, Mr. Takashi Hirose, Mr. Kazuhisa Fukuda, Mr. Hirofumi Funakoshi,
Mr. Tetsuro Tomita and Ms. Kuniko Urano that the Company indemnifies each of them for the costs
stipulated in Article 430-2, Paragraph 1, Item (i) of the Companies Act and the losses stipulated in Item (ii)of the same Paragraph to the extent stipulated by laws and regulations. Upon approval of Item 2 as proposed
herein, the agreements will continue to be in effect with each individual.
Upon approval of Item 2 as proposed herein, the Company intends to conclude an agreement withthe same terms and conditions as those of the above with Mr. Hiroyuki Minato.
(Directors and Officers Liability Insurance Contract)
The Company has concluded a directors and officers liability insurance contract with theinsurance company with persons including directors, audit & supervisory board members, executive
officers, and important employees, of the Company, its subsidiaries, and other related entities as the insured.
Under the contract, the insurance company will cover, among others, legal compensation for damages andlitigation costs to be incurred by the insured as a result of claims for damages arising from acts (including
inaction) of the insured pursuant to their positions. Upon approval of Item 2 as proposed herein andassumption of office as Directors of the Company (excluding Directors who are Audit & Supervisory
Committee Members), the candidates will be insured under the insurance.
The Company plans to renew the insurance contracts with the same details for the duration of thecandidates’ term of office.

[Opinion of the Audit & Supervisory Committee]
The Audit & Supervisory Committee examined the election of Directors (excluding Directors
who are Audit & Supervisory Committee Members) in accordance with the Audit & Supervisory
Committee Auditing Standards in consideration of developments including the outline of discussions by
the Nomination and Compensation Advisory Committee.
As a result, the Committee concluded that there is nothing in particular to be pointed out
regarding the election of Directors (excluding Directors who are Audit & Supervisory Committee
Members).

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Item 3

Election of Five (5) Directors who are Audit & Supervisory Committee Members

The term of office of all five (5) Directors who are Audit & Supervisory Committee Members ends atthe conclusion of the 100th General Meeting of Shareholders. The Board of Directors proposes that five (5)Directors who are Audit & Supervisory Committee Members be elected. The candidates are set forth below.
The submission of this proposal has been consented to by each member of the Directors who are Audit& Supervisory Committee Members. Mr. Kenji Hiramatsu, Ms. Aiko Sekine, and Ms. Sumiko Takeuchi are
candidates for Outside Directors.

Candidates for Directors who are Audit & Supervisory Committee Members
Name (date of birth)
Brief personal history (with material concurrent
positions)
Joined NSC
1 [New Candidate] April 1987:
April 2018:
Executive Officer and Head of
Kazumasa
Division, General Administration
Shinkai
Division of the Company(October 4, 1962) April 2021:
Managing Executive Officer andHead of Division, General
Administration Division of theCompany
April 2023:
Managing Executive Officer of theCompany
Assumed current position as Executive Officer andAdvisor to the President of the Company in April
2024
2[New Candidate]
Eiji Sogo(June 16, 1966)

Joined NSC
Executive Officer and Head of
Division, Human Resources Divisionof the Company
April 2022:
Managing Executive Officer andHead of Division, Human Resources
Division of the Company
April 2023
Managing Executive Officer of theCompany
Assumed current position as Executive Officer andAdvisor to the President of the Company in April
2024

Number of shares of
the Company owned

5,338

April 1989:
April 2019:

-17-

4,387

Name (date of birth)

Brief personal history (with material concurrent
Number of shares of
positions)the Company owned
3 [New Candidate] April 1979:
Joined Ministry of Foreign Affairs ofJapan[Outside
July 2008:
Director-General for Latin American
Director]and Caribbean Affairs Bureau andEconomic Affairs Bureau of Ministry[Independentof Foreign Affairs of Japan
Director]
January 2011: Director-General for Global Issues of
Ministry of Foreign Affairs of Japan
Kenji Hiramatsu
September
Director-General, Foreign Policy(December 22,
2012:
Bureau of Ministry of Foreign
1956)
Affairs of Japan
NovemberAmbassador of Japan to the Republic
2015:
of India
January 2016: Ambassador of Japan to the Republicof India and Ambassador of Japan to
the Kingdom of Bhutan
September
Ambassador of Japan to the Kingdom
2019:of Spain
November
Retired from Ministry of Foreign
2022:
Affairs of Japan
Assumed current position as Chairman of the Institute,
Institute for International Strategy, Japan ResearchInstitute in December 2022
- Reasons for the election as Outside Director who is0an Audit & Supervisory Committee Member
Candidate and outline of expected roles
The Board of Directors has proposed the election of
Mr. Kenji Hiramatsu as an Outside Director who is an
Audit & Supervisory Committee Member because it
believes that he is well-qualified for the position byreason of the deep insight regarding international
affairs, economy, culture, etc., cultivated in the
Ministry of Foreign Affairs as well as ample
experience earned as Ambassador Extraordinary andPlenipotentiary and other important positions,notwithstanding the fact that he does not haveexperience participating in corporate management.
Mr. Kenji Hiramatsu is expected to contribute to,among others, surveys related to operation and statusof assets, in addition to decision-makings fromvarious perspectives, enhancement of audit andsupervisory functions over management andsecurement of management transparency, of the Boardof Directors, by actions such as expressing his
opinions and exercising his voting rights from an
independent standpoint in such opportunities as
meetings of the Board of Directors and the Audit &Supervisory Committee, based on his deep insight andample experience.
(Note)The Company has already filed Mr. Kenji Hiramatsu as a candidate for an “independent
director” with each financial exchange in Japan where it is listed.

-18-

Name (date of birth)

Brief personal history (with material concurrent
Number of shares of
positions)the Company owned
4 [New Candidate] April 1981:
Joined Citibank, N.A., Tokyo Branch
October 1985: Joined Aoyama Audit Corporation[Outside
March 1989:
Certified as Public Accountant, Japan
Director]
July 2001:
Partner of Chuo Aoyama Audit
Corporation[Independent
SeptemberPartner of Aarata Audit Corporation
Director]
2006:(currently PricewaterhouseCoopers
Japan LLC)
Aiko Sekine
July 2016:
Chairman and President of Japanese(May 13, 1958)
Institute of Certified Public
Accountants
Assumed current position as Advisor of JapaneseInstitute of Certified Public Accountants in July 2019
Assumed current position as Professor of Waseda
University, Faculty of Commerce in December 2020
(Material concurrent position)
Audit & Supervisory Board Member (Outside), IHI
Corporation
Member of the Board of Directors (Outside Director),
ORIX- Reasons for the election as Outside Director who is
an Audit & Supervisory Committee Member
Candidate and outline of expected roles
The Board of Directors has proposed the election of
1,000
Ms. Aiko Sekine as an Outside Director who is an
Audit & Supervisory Committee Member because it
believes that she is well-qualified for the position byreason of her deep insight as a certified public
accountant possessing deep familiarity with corporate
accounting, and her ample experience as a Partner ofan audit corporation and Chairman and President ofJapanese Institute of Certified Public Accountants andother important positions, notwithstanding the factthat she does not have experience participating in
corporate management other than serving as an
outside director/auditor.
Ms. Aiko Sekine is expected to contribute to, among
others, surveys related to operation and status ofassets, in addition to decision-makings from various
perspectives, enhancement of audit and supervisory
functions over management and securement ofmanagement transparency, of the Board of Directors,
by actions such as expressing her opinions andexercising her voting rights from an independent
standpoint in such opportunities as meetings of theBoard of Directors and the Audit & Supervisory
Committee, based on her deep insight and ample
experience.
(Notes)1) The Company has already filed Ms. Aiko Sekine as a candidate for an “independent director”
with each financial exchange in Japan where it is listed.
2) Ms. Sekine is a professor at Waseda University, Faculty of Commerce, and is engaged in theexecution of business of the university. The Company conducts joint research with Waseda
University, Faculty of Science and Engineering, and pays it, among others, contract researchexpenses, which account for less than 1% of the consolidated selling, general and administrative
expenses of the Company. Therefore, the university is not a specified associated service providerof the Company.
-19-

3)

Ms. Aiko Sekine’s name in the family register is Aiko Sano.

-20-

Name (date of birth)

Brief personal history (with material concurrent
Number of shares of
positions)the Company owned
Joined Tokyo Electric Power
5 [New Candidate] April 1994:
Company, Incorporated
April 2016:
Visiting Professor of University of[Outside
Tsukuba
Director]
April 2018:
Visiting Professor of Kansai
University[Independent
Assumedcurrent
position as Director and SeniorDirector]
Fellow of International Environment and Economy
Sumiko Takeuchi Institute in January 2012
Assumed current position as Co-representative of(June 21, 1971)
U3Innovations LLC in October 2018
Assumed current position as Specially Appointed
Professor of Tohoku University in April 2020
(Material concurrent position)
Outside Director of the Board of Japan Pulp & Paper
Co., Ltd.
Outside Director of GRID co.
- Reasons for the election as Outside Director who is
an Audit & Supervisory Committee Member
Candidate and outline of expected roles
0
The Board of Directors has proposed the election of
Ms. Sumiko Takeuchi as an Outside Director who is
an Audit & Supervisory Committee Member because
it believes that she is well-qualified for the position byreason of the deep insight she has cultivated as a
researcher in the fields of environment and energy at
an NPO and universities, as well as her ample
experience in corporate management.
Ms. Sumiko Takeuchi is expected to contribute to,among others, surveys related to operation and statusof assets, in addition to decision-makings fromvarious perspectives, enhancement of audit andsupervisory functions over management andsecurement of management transparency, of the Boardof Directors, by actions such as expressing her
opinions and exercising her voting rights from an
independent standpoint in such opportunities as
meetings of the Board of Directors and the Audit &Supervisory Committee, based on her deep insight andample experience.
(Notes)1) The Company has already filed Ms. Sumiko Takeuchi as a candidate for an “independent
director” with each financial exchange in Japan where it is listed.
2) In March 2024, Japan Pulp & Paper Co., Ltd. (“Japan Pulp & Paper”), for which Ms. Takeuchi
serves as Outside Director of the Board, was found by the Japan Fair Trade Commission to havebeen engaged in acts violating Article 3 of the Act on Prohibition of Private Monopolization and
Maintenance of Fair Trade (prohibition of unreasonable restraint on trade), since June 2017 at
the latest, in connection with general competitive biddings for recycled paper rolls ordered by
the National Printing Bureau. Japan Pulp & Paper has applied to the commission for leniency,
and has not received any cease and desist orders or surcharge payment orders. As Outside
Director of the Board of Japan Pulp & Paper, Ms. Takeuchi has been proactively making
recommendations concerning the importance of compliance and risk management at its Boardof Directors meetings from an objective and neutral standpoint. Moreover, after the
aforementioned facts came to light, Ms. Takeuchi has fulfilled her duties by continuously
expressing her opinions to prevent recurrence and regularly monitoring initiatives related tooverall compliance activities.
3) Ms. Sumiko Takeuchi’s name in the family register is Sumiko Kobayashi.

-21-

(Liability Limitation Agreements)
Upon approval of Item 3 as proposed herein, the Company intends to conclude an agreement with
Mr. Kazumasa Shinkai, Mr. Eiji Sogo, Mr. Kenji Hiramatsu, Ms. Aiko Sekine and Ms. Sumiko Takeuchi
limiting their liability under Article 423, Paragraph 1 of the Companies Act to 20 million yen or the amountstipulated under Article 425, Paragraph 1 of the Companies Act, whichever is greater, as long as they act
unknowingly and are not grossly negligent in performing their duties.
(Indemnity Agreements)
Upon approval of Item 3 as proposed herein, the Company intends to conclude an agreement with
Mr. Kazumasa Shinkai, Mr. Eiji Sogo, Mr. Kenji Hiramatsu, Ms. Aiko Sekine and Ms. Sumiko Takeuchithat the Company indemnifies each of them for the costs stipulated in Article 430-2, Paragraph 1, Item (i)of the Companies Act and the losses stipulated in Item (ii) of the same Paragraph to the extent stipulated
by laws and regulations.
(Directors and Officers Liability Insurance Contract)
The Company has concluded a directors and officers liability insurance contract with theinsurance company with persons including directors, audit & supervisory board members, executive
officers, and important employees, of the Company, its subsidiaries, and other related entities as the insured.
Under the contract, the insurance company will cover, among others, legal compensation for damages andlitigation costs to be incurred by the insured as a result of claims for damages arising from acts (including
inaction) of the insured pursuant to their positions. Upon approval of Item 3 as proposed herein andassumption of office as Directors who are Audit & Supervisory Committee Members of the Company, thecandidates will be insured under the insurance.
The Company plans to renew the insurance contracts with the same details for the duration of thecandidates’ term of office.

-22-

(For reference) Composition of the Board of Directors and Skills Matrix of Directors
If Items 2 and 3 are approved as proposed herein, the Directors of the Company after this Ordinary General Meeting of Shareholders will be as indicated in the tablebelow. Outside Directors will account for one-third (5 out of 15) of all members of the Company’s Board of Directors.
The Company believes that its Board of Directors, as a whole, must have the necessary skills and experience based on the Company’s Group corporate philosophy
and medium- to long-term management plan, etc. The main skills and experience possessed by each candidate for Director are as shown in the table below.
Skill / Experience

Kenji Hiramatsu

Aiko Sekine

Sumiko Takeuchi

New
OutsideIndependent
New
OutsideIndependent
New
OutsideIndependent

✓

✓

✓
✓
✓

✓

✓

✓

✓

✓

✓
✓

✓

✓

✓
✓
✓

✓

✓

Director✓✓

Senior Audit & Supervisory Committee Member (fulltime)
Senior Audit & Supervisory Committee Member (fulltime)

✓

✓

✓

✓

✓

✓

Audit & Supervisory Committee Member✓

Audit & Supervisory Committee Member

✓
✓

✓

✓

✓

(Notes) 1. New: New candidate Outside: Outside Director Independent: Independent Director
2. The check mark indicates the main skills and experience (up to four in principle) possessed by each Director candidate, based on their career history and experience.

-23-

✓

✓

✓

Audit & Supervisory Committee Member

✓
✓
✓

✓

✓

PublicAdministration /Public Policy

New

✓

✓

Environment /Sustainability

Eiji Sogo✓

GlobalNew✓✓

Sales /
Purchasing /MarketingDirectors who are Audit &Supervisory Committee Members

Kazumasa Shinkai✓Technology /R&D

Kuniko Urano

Director✓

Governance /RiskManagement /Legal /
Compliance

Tetsuro Tomita

New
OutsideIndependent
OutsideIndependent✓✓

Personnel /Labor affairs /HR Development

Directors (Excluding Directors who are
Audit & Supervisory Committee
Members)

Takahiro Mori

Representative Director, Chairman and CEO
Representative Director, President and COO
Representative Director, Vice Chairman and Executive
Vice President
Representative Director and Executive Vice President
Representative Director and Executive Vice President
Representative Director and Executive Vice President
Representative Director and Executive Vice President
Representative Director and Executive Vice President

Finance /Accounting,Monetary /EconomyPosition (Planned)

Eiji Hashimoto
Tadashi Imai

Naoki Sato
Takashi Hirose
Kazuhisa Fukuda
Hirofumi Funakoshi
Hiroyuki Minato

Corporate
Planning /Business strategy

Name

✓

✓

✓

✓

Item 4 Revision of the Amount of Compensation for Directors (Excluding Directors who are
Audit & Supervisory Committee Members)
The amount of compensation for Directors (excluding Directors who are Audit & Supervisory
Committee Members) of the Company was approved at the 96th General Meeting of Shareholders held on June24, 2020, and has been to date, within 140 million yen per month (of which the amount of compensation for
Outside Directors has been within 12 million yen per month).
The Company would like to request approval for the amount of compensation for Directors (excluding
Directors who are Audit & Supervisory Committee Members) to be set within 290 million yen per month (ofwhich the amount of compensation for Outside Directors shall be within 14 million yen per month) in
consideration of trends in the levels and systems of executive compensation in other companies and changes in
economic circumstances, among other factors. This is to set a compensation level and system that ensures, for
Directors (excluding Directors who are Audit & Supervisory Committee Members and Outside Directors), that
the Company can continuously secure excellent personnel that can achieve the Group’s sustainable growth andenhance its mid- and long-term corporate value, and provide Directors with appropriate performance-based
incentives, as the Company aims to establish a profit base that brings in a stable, high-level profit regardless ofexternal environment and, beyond that, enables the achievement of the Group’s future vision of one trillion yen
in business profit, while facing increasingly high level and diverse management issues, including expanding its
global business and advancing toward the achievement of carbon neutrality, and for Outside Directors (excluding
Directors who are Audit & Supervisory Committee Members), that the Company can continuously secure diverse
and excellent personnel that possess, among other qualities, deep insight and ample experience.
If this proposal is approved, the Company plans to revise its Policies regarding Decisions on theAmount of Compensation for Directors (excluding Directors who are Audit & Supervisory Committee
Members). Specifically, compensation for Directors (excluding Directors who are Audit & Supervisory
Committee Members) will be set based on an appropriate composition of fixed compensation and performancelinked compensation. The base amount of fixed compensation and performance-linked compensation (i.e., theamount of compensation when the Company’s consolidated performance reaches a certain level) will be
determined for each position in consideration of compensation level commensurate with the skills andresponsibilities required, and for performance-linked compensation, the amount of monthly compensation to be
determined for each Director will vary within a certain range based on the Company’s consolidated performance.
As indicators for performance-linked compensation, the Company will use consolidated underlying annual
profit/loss (which is consolidated business profit/loss excluding inventory valuation impact and other items, andrecognized as representing the Group’s actual profitability) in order to set an appropriate compensationcommensurate with performance for the corresponding term, while taking into account other factors including
the revenue targets in the medium- to long-term management plan. The ratio of fixed compensation to
performance-based compensation within the base amount will be set at 50% to 50% for Representative Directors,
and approximately 70% to 30% for Directors in other positions (excluding Directors who are Audit &Supervisory Committee Members and Outside Directors). Compensation for Outside Directors (excluding
Directors who are Audit & Supervisory Committee Members) will consist solely of fixed compensation. The
Company plans to stipulate, among other items, all the above in its Policies regarding Decisions on the Amountof Compensation, etc. for Directors (excluding Directors who are Audit & Supervisory Committee Members).”
The Company considers this proposal to be essential and reasonable for setting the compensation, etc.
of Directors (excluding Directors who are Audit & Supervisory Committee Members) in accordance with such
revised policies. This proposal has been deliberated by the Nomination and Compensation Advisory Committee
consisting of the Chairman, the President and three (3) or more Outside Directors appointed by the President
who serves as the chairman of the committee. The Company therefore believes that the content of this proposal
is appropriate.
There are currently ten (10) Directors (excluding Directors who are Audit & Supervisory Committee
Members) (including two (2) Outside Directors). If Item 2 is approved as proposed herein, the number of
Directors (excluding Directors who are Audit & Supervisory Committee Members) will continue to be ten (10)(including two (2) Outside Directors).
[Opinion of the Audit & Supervisory Committee]
The Audit & Supervisory Committee examined the proposed revision of the amount ofcompensation of Directors (excluding Directors who are Audit & Supervisory Committee Members) inaccordance with the Audit & Supervisory Committee Auditing Standards in consideration of developments
including the outline of discussions by the Nomination and Compensation Advisory Committee.

-24-

As a result, the Committee concluded that there is nothing in particular to be pointed out regarding
the proposed revision of the amount of compensation of Directors (excluding Directors who are Audit &Supervisory Committee Members).

-25-

Item 5 Revision of the Amount of Compensation for Directors who are Audit & Supervisory
Committee Members
The amount of compensation for Directors who are Audit & Supervisory Committee Members of theCompany was approved at the 96th General Meeting of Shareholders held on June 24, 2020, and has been todate, within 22 million yen per month.
The Company would like to request approval for the amount of compensation for Directors who are
Audit & Supervisory Committee Members to be set within 25 million yen per month, in consideration of trends
in the levels and systems of executive compensation in other companies and changes in economic circumstances,among other factors. This is to set a compensation level and system that ensures that the Company cancontinuously secure diverse and excellent personnel that possess, among other qualities, deep insight and ample
experience, as the responsibilities and expected roles of Directors who are Audit & Supervisory Committee
Members grow in line with the changes in the business environment, including the expansion of the Company’s
global business.
If this proposal is approved, the Company plans to revise its Policies regarding Decisions on theAmount of Compensation, etc. for Directors who are Audit & Supervisory Committee Members. Specifically,
the Company plans to stipulate in its policies, among other items, that compensation for Directors who are Audit& Supervisory Committee Members will consist solely of fixed compensation and the amount of monthly
compensation for each Director will be determined by considering, among other factors, the duties of the
Director’s position and whether the Director is full-time.
The Company considers this proposal to be essential and reasonable for setting the compensation, etc.
of Directors who are Audit & Supervisory Committee Members in accordance with such revised policies. This
proposal has been deliberated by the Nomination and Compensation Advisory Committee consisting of the
Chairman, the President, and three (3) or more Outside Directors appointed by the President, who serves aschairman of the committee. The Company therefore believes that the content of this proposal is appropriate.
There are currently five (5) Directors who are Audit & Supervisory Committee Members. If Item 3 isapproved as proposed herein, the number of Directors who are Audit & Supervisory Committee Members willcontinue to be five (5).

-26-

<Shareholder Proposals (Items 6 through 8)>
About Shareholder Proposals
The Companies Act recognizes shareholder proposal rights under certain conditions. The Company is obliged to include
proposals made by shareholders and the reasons for those proposals in the Reference Documents for the General Meeting of
Shareholders, unless there are violations of laws and regulations or the Articles of Incorporation or other reasons.

Items 6 and 7 are jointly proposed by two shareholders (with an aggregate voting rights ratio of lessthan 0.01%), and Item 8 is jointly proposed by two shareholders (with an aggregate voting rights ratio of lessthan 0.30%).
The Company’s Board of Directors opposes each of these Items proposed by the shareholders asshown in the following statement.
The following title of each Item, details of the proposal, and reason for the proposal (as for the reasonof the proposal of Item 6, an outline of the reason submitted by the relevant shareholders) are quoted fromrelevant parts of the original documents submitted by the relevant shareholders.

Opinions of the Board of Directors common to the shareholder proposal Items 6 through 8Company’s Efforts to Address Climate Change Issues
In March 2021, the Company announced the Nippon Steel Carbon Neutral Vision 2050, which setsout a target of reducing CO2 emissions in Scopes 1 and 2 by 30% from 2013 levels by 2030 and a vision ofachieving carbon neutrality by 2050. The Nippon Steel Carbon Neutral Vision 2050 contributes to the Japanese
government’s Climate Change Adaptation Plan based on the Paris Agreement and Japan’s Nationally
Determined Contribution (NDC).
The steel industry currently does not have mass production technology needed to achieve carbon
neutrality, and the Company is working diligently to develop innovative process technologies and commercialize
them based on the results of such development. Specifically, as described below in Roadmap of Nippon SteelCarbon Neutral Vision 2050, the Company aims to develop and commercialize three breakthrough technologies:
technologies for “hydrogen injection into BF” (COURSE50 and Super-COURSE50), technologies for “highgrade steel production in large-size EAF” and technologies for “hydrogen direct reduction of iron.” Through amulti-track approach, taking measures including carbon offset by CCUS, the Company aims to realize a carbonneutral steel production processes by 2050. In particular, as for “hydrogen injection into BF,” the Company has
been engaged in technology development of COURSE50 since 2008 and has already completed verification tests
using a pilot test furnace. The Company has started the installation of demonstration facilities in preparation for
full-scale blowing tests of hydrogen-based gas using a large-scale commercial BF (4,500m3), which is scheduled
to start in fiscal 2026. In addition, the Company aims to start trials of “high-grade steel production in large-size
EAF” and “hydrogen direct reduction of iron” in fiscal 2024 and fiscal 2025, respectively. The Company expects
that R&D expenses of approximately 500 billion yen and capital expenditures for commercialization of
approximately 4-5 trillion yen, including, among others, government support, will be required for such extremely
challenging innovation.

-27-

-28-

In addition to reducing CO2 emissions from the Company’s steelmaking processes, the Company iscontributing to reducing CO2 emissions in society by providing high-performance products and solution
technologies.
The Company launched NSCarbolexTM as a brand family that collectively identifies the Company’s
products and solution technologies that contribute to reducing CO2 emissions in society. NSCarbolexTM
consists of two brands—NSCarbolexTM Neutral and NSCarbolexTM Solution—which represent the twovalues the Company provides.

Decarbonization of the steelmaking processes is an extremely ambitious challenge. In addition todeveloping carbon-neutral technology options, it is also essential to develop social infrastructure for greenhydrogen, green power, CCUS, and other technologies. These are national challenges that should be addressedby the entire nation in cooperation with society, based on (1) policy packages to achieve both international
competitiveness of industries and carbon neutrality as well as (2) policies for national strategies that include
strong and continuous support, including from the financial side.
In order to maintain and strengthen the international competitiveness of Japanese industries, theintroduction of drastic policies and systems based on national strategies is more important than anything else.
To achieve this, the Company is taking various opportunities to make proposals on Japan’s climate change
measures and energy policies based on the Paris Agreement. The Company is also spearheading activities
through industry associations such as the Japan Iron and Steel Federation and the Japan Business Federation(Keidanren).
For example, in government councils and committees and in discussions at Keidanren, the Company
has advocated the need for a Japanese-style policy package that integrates climate change measures with themaintenance and strengthening of the international competitiveness of industries. The Company has also
advocated the need for, among others, the following measures: a shift in the energy supply structure, including
the active promotion of the use of nuclear power; policies aimed at the realization of carbon neutrality in thematerials industry; measures to promote strong and continuous public-private investment across all stages of thedecarbonization transition from R&D to facility implementation; measures to secure equal footing for hydrogen,electricity and raw material operation cost increases; and a roadmap to realize CCUS. Some of these proposals
have been reflected in the GX Promotion Act and the GX Decarbonized Power Supply Act, which is an exampleof the Company’s contribution to policy formulation.
In addition, the Japan Iron and Steel Federation has declared that the Japanese steel industry will boldly
take on the challenge of achieving carbon neutrality. In March 2022, the Federation set a target for reducing CO2
emissions from energy sources by 30% from 2013 levels by fiscal 2030, which is an ambitious target even ininternational terms. In May 2022, Keidanren published “Towards Green Transformation (GX)” and has been
proposing necessary measures to achieve carbon neutrality by 2050 (such as GX policy Package).
Concerning the Company’s efforts to address climate change issues, important matters are reported to
the Board of Directors as they arise, and major progress is reported on a regular basis. In addition, opinions
received from various stakeholders, including institutional investors, are regularly reported and fed back to theBoard of Directors.
In addition, the Company is a signatory to the statement of support for the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD) and has been disclosing information in accordancewith the recommendations. The Company has also been making disclosures through business reports, securities
reports, integrated reports, sustainability reports, IR materials on financial results, and individual press releases.
The Company will continue to work on appropriate disclosure of its efforts to address climate change issues,
taking into account trends in, among others, disclosure standards. (For details of the Company’s efforts to address
climate change issues, see: https://www.nipponsteel.com/csr/)-29-

* Task Force on Climate-related Financial Disclosures: An international disclosure framework to disclose information on theimpact of climate change on corporate finances in four categories: governance, strategy, risk management, and indicators andtargets.

-30-

Item 6 Partial Amendment to the Articles of Incorporation(1) Details of the proposal
The following clause shall be added to the Articles of Incorporation:
1. The Company shall set and disclose short- and medium-term GHG emission reductions targets aligned to thegoals of the Paris Agreement for scope 1, 2 and 3 emissions for all operations and affiliates.
2. The Company shall prepare and disclose transition plan that include, planned capital allocation for
decarbonisation investment over the forward 3 years, along with the estimated emissions reduction impact ofeach investment, to achieve the short- and medium-term reduction targets.
3. The Company shall report, in its annual reporting, on its progress against such targets and transition plans at
reasonable cost omitting proprietary information.
(2) Reason for the proposal
The Company’s long-term corporate value depends upon a credible decarbonisation strategy and GHG
emissions reduction targets aligned with the goals of the Paris Agreement. The Company should commit to therecommendation of the TCFD which recommends disclosure of group-wide scope 1, 2 and 3 emissions and therelated risks.
The Company’s emissions reduction targets towards 2030 are not aligned to the goals of the Paris
Agreement and the Company’s decarbonisation strategy relies heavily on technologies that have not been provento materialise. Not having Paris aligned targets together with the uncertainty of its technology investment
strategy presents a range of material risks to shareholders, including the risk of stranded assets.
Setting Paris-aligned targets, and disclosing credible business plans to achieve them, would best manage
these risks and protect corporate value. Disclosure of the Company’s forward capital expenditure and alignment
with emissions reduction targets would assist shareholders assessment of the Company’s plans.
[Opinion of the Board of Directors on the shareholder proposal Item 6]
The Company’s Board of Directors opposes this shareholder proposal.
(Reasons for the opposition)
The Articles of Incorporation stipulate basic matters such as the organization of the Company, and it is
not appropriate to stipulate in the Articles of Incorporation specific, individual matters such as the formulationand publication of targets related to specific management issues, including climate change measures, as thiswould hinder the timely and flexible formulation and modification of policies and business execution in responseto changes in the business environment.
In addition, as described in “Company’s Efforts to Address Climate Change Issues,” the Company has
announced Nippon Steel Carbon Neutral Vision 2050, which will contribute to the Japanese government’s
Climate Change Adaptation Plan based on the Paris Agreement and Japan’s Nationally Determined Contribution(NDC), and has been working to achieve the target of reducing CO2 emissions in Scopes 1 and 2 by 30% from2013 levels by 2030 and realize the vision of achieving carbon neutrality by 2050. Based on the assumption thatthe technological development necessary for the realization of carbon-neutral steel production processes and thecommercialization of the technologies based on the results thereof will require, including government support,
approximately 500 billion yen in R&D expenses and approximately 4-5 trillion yen in capital expenditures forthe commercialization, the Company has been making steady advances in, among others, technologicaldevelopment and demonstration experiments, and has been disclosing such progress as appropriate, as describedabove in Roadmap of Nippon Steel Carbon Neutral Vision 2050. Moreover, the Company also contributes toreducing CO2 emissions in society by providing high-performance products and solution technologies.
Furthermore, the Company will continue to timely and flexibly work on the matter of how to deal withthe scope of setting CO2 emission reduction targets (such as covered subsidiaries and affiliates and Scope 3) as
it conducts business in Japan and overseas, in light of, among others, international trends in climate change
measures and trends in laws, systems, and disclosure standards in each country.

-31-

Item 7 Partial Amendment to the Articles of Incorporation(1) Details of the proposal
The following clause shall be added to the Articles of Incorporation:
The Company shall set and disclose, in its annual reporting, details of how the Company’s compensation system
incentivises and rewards progress for achieving the Company’s GHG emissions reduction targets.
(2) Reason for the proposal
Long-term institutional investors in the Company consider a direct linkage between remuneration andachievement of the Company’s GHG emissions reduction targets, to be in the Company’s interests, as animportant mechanism to incentivise executive performance towards achievement of the Company’s strategy andgoals and protect corporate value.
[Opinion of the Board of Directors on the shareholder proposal Item 7]
The Company’s Board of Directors opposes this shareholder proposal.
(Reasons for the opposition)
The Articles of Incorporation stipulate basic matters such as the organization of the Company, and it is
not appropriate to stipulate in the Articles of Incorporation specific, individual matters such as the establishment
and disclosure of a compensation system that responds to specific management issues, as this would hinder thetimely and flexible formulation and modification of policies and business execution in response to changes inthe business environment.
In addition, as described in “Company’s Efforts to Address Climate Change Issues,” the Company regards
climate change measures as its top priority management issue, and, believing that achieving carbon neutrality
will contribute to enhancing mid- to long-term corporate value, the Company has established and strengthened
its officers and organizational structures and is promoting various measures to achieve that goal, thus steadily
producing results.
The Company intends to propose a revision of the amount of compensation for Directors in Items 4 and5 at the 100th General Meeting of Shareholders after the deliberation of the Nomination and Compensation
Advisory Committee consisting of the Chairman, the President and three or more Outside Directors appointed
by the President who serves as the chairman of the committee. If each of these proposals is approved, theCompany will continue to properly address its management issues, including the challenge of achieving carbon
neutrality under the new compensation levels and system.

-32-

Item 8 Partial Amendment to the Articles of Incorporation(1) Details of the proposal
The following clause shall be added to the Articles of Incorporation:
The Company shall disclose annually, climate-related and decarbonisation-related policy positions and lobbying
activities globally, including its own direct lobbying and industry association memberships, and review these foralignment with the Company’s goals of carbon neutrality by 2050 and explain the actions it will take if these
activities are determined to be misaligned.
(2) Reason for the proposal
To manage strategy and risks to protect company value, it is in the Company’s best interests for its
climate- and decarbonisation-related policy positions and direct and indirect lobbying activities to be alignedwith the Company’s goal of carbon neutrality by 2050 and the achievement of its GHG emissions reduction
targets.
The Filing Shareholder believes that disclosure of climate-related and decarbonisation-related policy
positions and lobbying activities globally and their alignment to the Company’s goals are required by good
governance and essential to long-term value creation.
The current level of the Company’s disclosures in these regards means shareholders cannot properly assess if
the Company’s lobbying activities are sufficiently coordinated and optimised to ensure the global policy
environment supports its decarbonisation goals and are in line with the goals of the Paris Agreement.
[Opinion of the Board of Directors on the shareholder proposal Item 8]
The Company’s Board of Directors opposes this shareholder proposal.
(Reasons for the opposition)
The Articles of Incorporation stipulate basic matters such as the organization of the Company, and it is
not appropriate to stipulate in the Articles of Incorporation specific, individual matters such as the disclosure of
the Company’s position and policy proposal efforts on certain policies, as this would hinder the timely andflexible formulation and modification of policies and business execution in response to changes in the businessenvironment.
In addition, as described in “Company’s efforts to address climate change issues,” the Company is taking
various opportunities to make proposals on Japan's climate change measures and energy policies based on the
Paris Agreement and is spearheading activities through industry associations. The Company also discloses
information regarding these policy proposals and activities. The Company will continue to work on enhancing
disclosure of information including major policy proposals and activities it has conducted, as well as policy
positions in conducting these proposals and activities.

-33-

Exercise of Voting Rights via the Internet
In exercising your voting rights via the Internet, please review and confirm following instructions
before exercising your voting rights.
Deadline for exercising voting rights
via the Internet:
5 p.m., Thursday, June 20, 2024 (JST)Please access the following website and enter your “voting right exercise code” and “password”
indicated in the Voting Rights Exercise Form. Please follow the instructions that appear on the display andindicate whether you are for or against each Item.
Internet Voting Website: (https://www.web54.net)• Treatment of votes
If you exercise your voting rights both by mail and via the Internet, the vote exercised via theInternet will be treated as the vote of record. If you exercise your voting rights multiple times via theInternet, the last vote will be treated as the vote of record.
• Inquiries about the operation of personal computers and other issues
For inquiries on how to exercise your voting rights via the Internet, please call:
0120-652-031 (toll free within Japan) (9 a.m. ~ 9 p.m.)
This is a dedicated line for website support provided by the transfer agent, Sumitomo Mitsui Trust Bank,
Limited.

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Business Report
99th Term: From April 1, 2023 to March 31, 2024
1. Current Situations of the NIPPON STEEL Group(1) Progress and Results of Business Operations and Tasks Ahead
General Review
In fiscal 2023, the global economy showed signs of a further slowdown due to factors such as
progressive inflation stemming from the situation in Ukraine and the effects of monetary tightening in Europe
and the United States. The Japanese economy recovered moderately, but domestic demand lacked strength.
Steel demand fell into an unprecedented dire level in the second half of fiscal 2023, which became
further depressed toward the end of the fiscal year, against the background of the sluggish economy in China
and the deteriorating economic sentiment in the United States and Europe. In addition, due to factors including
India's continued spot purchases of coal and China's continued high-level production despite sluggish economy
and significant increase in exports, raw material prices have remained high while product prices have beensluggish in ASEAN and other countries. These factors have led to the continued historically low level of the
spread (price difference between raw materials and steel products) in the overseas general spot market, and thedecoupling of raw materials and products has become more evident.
In response to this business environment, the Nippon Steel Group (“the Group”) implemented various
measures aimed at achieving the four pillars of its medium- to long-term management plan (formulated in March
2021): “Rebuilding the domestic steel business and strengthening the Group’s management,” “Promoting a
global strategy to deepen and expand the overseas business,” “Taking on the challenge of carbon neutrality,” and“Promoting digital transformation strategies.”
Business Segment Review
The NIPPON STEEL Group’s business segments strived to respond to their changing businessenvironments and have applied their utmost management effort.
・Steelmaking and Steel Fabrication
Although the business environment remained extremely harsh, the Steelmaking and Steel Fabrication
segment continued to implement drastic profit restructuring measures. In addition, the segment strived to evolve
toward having a further vertically-integrated business structure that could achieve the Group’s future vision of¥1 trillion in business profit. The segment has also built a foundation that is planned to enable it to record evenhigher profits regardless of the external environment. As a result, the segment recorded revenue of ¥8,076.3
billion and business profit of ¥821.0 billion.
Specifically, the following efforts were made during fiscal 2023.
We are steadily implementing facility structural measures, with or without a short-term improvementin the business environment. We have also aimed to establish an integrated business structure that encompasses
everything from raw materials to manufacturing and distribution, strengthen competitiveness across the entire
supply chain, and create a more resilient business structure (a business structure with a robust profit base), onethat contributes importantly toward the achievement of carbon neutrality. During fiscal 2023, the Company madeselective investments in facilities having competitive advantages. These investments included measures toimprove the capacity and quality of strategic products, such as the next-generation hot-strip mill at the Nagoya
Works, and electrical steel sheet facilities at the Setouchi Works Hanshin Area (Sakai) and the Kyushu Works
Yawata Area. Coupled with the shut-down of less competitive facilities, we have made production facilities moreadvanced, streamlined, and efficient, promoted the sophistication of product types, and optimized the scale ofproduction capacity and fixed costs. In the raw materials business, we have acquired a 20% interest in Elk Valley
Mining Limited Partnership, a Canadian coking coal company, as we aim to ensure steady procurement of highgrade coking coal for steelmaking that contributes to promoting carbon neutrality and to establish a profit
structure that is less susceptible to the external environment. In addition, Nippon Steel Trading Corporation wasdelisted and has become a subsidiary of Nippon Steel, and we have been working to enhance and raise efficiencyof the Group’s trading company functions, to enhance the direct sales ability by making an integrated use of oursales knowhow and our infrastructure, and to further increase sophistication of the supply chain. We intend tocontinue evolving toward having a further vertically-integrated business structure.

-35-

Overseas, the Steelmaking and Steel Fabrication segment is working to ensure capturing of local
demand and securing high integrated added-value by expanding integrated manufacturing bases in “markets withpromising growth in steel demand” and “markets where Nippon Steel’s technologies and products are highly
appreciated.” In India, where future market expansion and further development of domestic production are
expected, we are expanding capacity through several approaches: by acquisition of bases and construction of a
new integrated steelworks now being studied by ArcelorMittal Nippon Steel India Limited, among othermeasures. Moreover, we have decided to acquire United States Steel Corporation in the United States. The UnitedStates is a country that has the highest demand for high-grade steel, and where we can make use of ourtechnological and product strengths. This means for us to secure three key areas, which are adding the UnitedStates to India and our home market of ASEAN, leading to the diversification of our global bases. We aim tocontinue improving profitability through expansion of our integrated production system in these major overseas
markets, thereby advancing toward the realization of 100 million tons in global crude steel capacity.

About our efforts to achieve carbon neutrality, we have implemented various measures to realize the
Nippon Steel Carbon Neutral Vision 2050. In order to decarbonize our steelmaking processes, we are developing
three breakthrough technologies: for injection of hydrogen into blast furnaces, for 100% hydrogen use in the
direct reduction process, and for high-grade steel production in large-sized electric arc furnaces (EAFs). Our
recent progress in technological development includes the Super COURSE50 development test at a pilot test
furnace in the East Nippon Works Kimitsu Area, which confirmed the effect of reducing CO2 emissions by 33%,
the world’s highest level for reduction. In addition, we started full-scale studies on shifting from the blast furnacesteelmaking process to the EAF process in the Kyushu Works Yawata Area and the Setouchi Works Hirohata
Area as candidate sites. In addition, NSCarbolexTM Neutral (a steel product that is certified to reduce CO2
emissions in the steelmaking process) and NSCarbolexTM Solution (a high-performance product and solution
technology that contributes to reducing CO2 emissions in society) are the two products of value we provide forcarbon neutralization, supporting our customers’ international competitiveness. These efforts have led to areaffirmation of the importance of the steel industry’s role in decarbonization initiatives and the Green Innovation
Fund has significantly increased the allocation of its fund to the steel industry. We are therefore working toaccelerate and move forward development and practical implementation in these areas. It deserves mention herethat the Company’s climate change risk information based on its CO2 emission reduction targets and theframework of the Task Force on Climate-related Financial Disclosures (TCFD) are disclosed in the Sustainability
Report 2023, per https://www.nipponsteel.com/en/csr/report/.

-36-

As to DX strategy, we have promoted business and production process reforms that make full use ofdata and digital technology. As an example of a specific initiative in fiscal 2023, we established and commenced
operation of a system that enables real-time acquisition of operating information for management of vessel
allocation when shipping raw materials by sea. We believe that this facilitates faster decision-making, andcontributes to improve the efficiency of the supply chain, from raw material procurement to transportation andproduction. The resultant improvement of efficiency in operation and transportation will also help efforts onbehalf of realization of a carbon-neutral society. A second example of what we are doing is, in collaboration with
NS Solutions Corporation, applying mathematical optimization technology in development of a steel output
scheduling system for high-speed production planning in the steelmaking process. Full-scale use of the system
is now under way at the East Nippon Works Kimitsu Area. This has enabled equal or greater plans, and fasterplans, to be derived compared to those made by skilled technicians. Planning time has been reduced by about
70% compared to conventional systems. Going forward, we plan to start using the system at each steelworks,
one by one, and promote the unification of production plans for the entire company. We also continue to workon various DX measures in areas such as remote management, predictive monitoring, and automation ofoperations and equipment maintenance using IoT and AI, as well as centralization and acceleration of
performance management and integrated production planning.
・Engineering and Construction
Nippon Steel Engineering Co., Ltd. increased overall sales year-on-year. Solid sales were posted in
the business of offshore wind power plants, waste-to-energy facilities, and other components in the Environment
and Energy sector as well as in the business of construction work and seismic isolation devices in the Urban
Infrastructure sector, centering on large-scale logistics facilities, while experienced a decrease in sales in the
Steelmaking Plants sector. The segment’s profit decreased year-on-year due to the impact of large losses causedby the breakdown of a crane of its own marine workship and the surge in the prices of materials and fuel. For
fiscal 2023 the Engineering and Construction segment recorded revenue of ¥409.2 billion and business loss of¥1.3 billion.

-37-

・Chemicals and Materials
Nippon Steel Chemical & Material Co., Ltd. posted a year-on-year decrease in profits despite utmost
efforts to reduce costs and improve selling prices amid a severe business environment in which demand
continued to be sluggish due to soaring raw material and fuel prices worldwide and inventory adjustments forsemiconductors and other products. In the Coal Tar Chemicals business, sales of carbon black for tires were firm,
but demand for needle coke used in graphite electrodes, its main product, remained sluggish. In the Chemicals
business, the benzene market remained generally stable, but sales of styrene monomer decreased due to a delayin the recovery of demand for derivatives in Japan, and the continued expansion of new production facilities in
China led to stagnate the styrene monomer market. In the Functional Materials and Composite Materials business,recovery of production remained weak due to the impact of the deterioration in the Chinese economy, and theprolonged sluggish demand for semiconductors as well as end products such as smartphones and PCs. Amongcarbon fiber composite materials, the sales volume of carbon fiber reinforced materials for civil engineering andconstruction, which are the main product responding to demand for infrastructure upgrades, increased, and salesof carbon fiber continued to be strong, mainly in the sports and space fields. The overall Chemicals and Materials
segment recorded revenue of ¥260.8 billion and business profit of ¥15.3 billion.
・System Solutions
In response to stepped-up corporate DX initiatives, NS Solutions Corporation is working to expand
business by making corporate-wide efforts to satisfy the needs of DX at maximum while deepening relationships
with customers. As an example of its initiatives in fiscal 2023, NS Solutions jointly developed and commenced
full-scale operation of a production planning system that realizes operational reforms by applying mathematicaloptimization technology, jointly with Nippon Steel. In addition, the company introduced a local 5G system topower plant premises, which enables power companies to conduct efficient maintenance and inspection work,
etc. through remote monitoring of sites using video and audio links, and facilitates the transfer of technology. In
addition, the company has provided ConSeekTM, an integrated business management platform service forfinancial institutions to its customers, and has launched a modernization project for mission-critical systems of
insurance companies. As investments for growth, NS Solutions formed business alliances with AI start-up
companies and Nippon Steel Texeng Co., Ltd. in the field of digital manufacturing, and entered into an agreement
to make Texeng Solutions Corporation (renamed to NS Solutions BizTech Corporation) a group company. Thesedevelopments were to enhance its ability to respond to customers’ DX needs. The System Solutions segment
recorded revenue of ¥311.5 billion and business profit of ¥35.5 billion.

-38-

Revenue and Profit
For fiscal 2023, although the business environment remained extremely harsh, the Company strived
to maximize profit by continuing to implement measures such as to fundamentally improve profit structure. As
a result, the Company recorded consolidated revenue of ¥8,868.0 billion, business profit of ¥869.6 billion, andprofit attributable to owners of the parent of ¥549.3 billion.
An overview of the revenue and business profit of each business segment in fiscal year 2023 is asfollows:
Revenue and Business Profit by Business Segment(Billions of yen)
Steelmaking
and steelfabrication

Engineeringandconstruction

Chemicals andmaterials

Revenue

8,076.3

409.2

260.8

Business
profit

821.0

(1.3)

15.3

Systemsolutions

Adjustments

Consolidated
total

311.5

(189.8)8,868.0

35.5

(1.0)

869.6

Non-consolidated financial result for fiscal year 2023 was net sales of ¥4,876.5 billion, operating profitof ¥331.6 billion, ordinary profit of ¥453.1 billion and profit of ¥324.2 billion.
Assets, Liabilities, and Equity
Consolidated total assets as of March 31, 2024 were ¥10,714.6 billion, an increase of ¥1,147.5 billion
from ¥9,567.0 billion as of March 31, 2023. The main factors contributing to the increase were business
investments in such as Nippon Steel Trading Corporation, becoming a subsidiary, resulting in an increase intrade and other receivables (¥525.5 billion), an increase in inventories (¥190.6 billion), an increase in property,
plant and equipment (¥196.7 billion), and an increase in investments accounted for using the equity method(¥327.3 billion), among other factors.
Consolidated total liabilities as of March 31, 2024 were ¥5,358.7 billion, an increase of ¥438.0 billion
from ¥4,920.6 billion as of March 31, 2023. Trade and other payables increased (¥298.5 billion) due to theaforementioned consolidation of subsidiaries, deferred tax liabilities also increased (¥102.8 billion).
Consolidated total equity as of March 31, 2024 was ¥5,355.8 billion, an increase of ¥709.4 billion
from ¥4,646.4 billion as of March 31, 2023. This was primarily contributed by an increase from profit attributableto owners of the parent of ¥549.3 billion, a decrease in dividend payment (¥152.1 billion), and an increase in theforeign exchange differences on translation of foreign operations (¥105.9 billion), and an increase in noncontrolling interests resulting from the consolidation of Nippon Steel Trading Corporation (¥112.8 billion),among other factors. As a result, total equity attributable to owners of the parent as of March 31, 2023 amounted
to ¥4,777.7 billion, and the ratio of interest-bearing debt to total equity attributable to owners of the parent (D/E
ratio) was 0.57 times (0.45 times after adjusting for equity credit attributes of subordinated loans andsubordinated bonds).
Dividends
The Company’s basic profit distribution policy is to pay dividends from distributable funds at the endof the first half (interim) and second half (year-end) of the fiscal year, in consideration of the consolidated
operating results and such factors as capital requirements for investment and other activities aimed at raising
corporate value and performance prospects, while also considering the financial structure of the Company on
both consolidated and non-consolidated bases. The Company has adopted a consolidated annual payout ratio
target of around 30% as the benchmark for the “payment of dividends from distributable funds in considerationof the consolidated operating results.” The level of the interim dividend is determined in consideration of thefirst-half performance results and forecasts for the full fiscal year.
NIPPON STEEL paid a dividend of ¥75 per share at the end of the first half. Regarding the fiscal yearend dividend based our policy of providing continuous, high-level shareholder returns, as disclosed at the third
quarter results announcement (February 7, 2024), management has decided to pay a year-end dividend of ¥85
per share (the annual dividend will be ¥160 per share).

-39-

Tasks Ahead
・Outlook for Operations in Fiscal Year 2024
The unprecedented severe situation concerning global steel demand is likely to continue for theforeseeable future. Recovery in actual demand is hard to predict at this point, and it is expected to take time forthe market to recover. There is also a risk that the decoupling structure between raw materials and products willcontinue for the time being.
Even in this situation where the business environment has become increasingly severe and is expected
to remain so for the time being, we will continue to implement the existing profit structure measures. At the sametime, we will steadily advance measures to evolve to a further vertically-integrated business structure, and toadvance toward achieving the Group’s future vision of ¥1 trillion in business profit, and build a foundation thatenables us to record even higher profits regardless of the external environment. We will also make investments
in forward-looking initiatives to recruit and retain diverse talent.
For fiscal 2024, we forecast underlying business profit of ¥750 billion or more and business profit of¥650 billion or more. Profit attributable to owners of the parent is expected to be around ¥300 billion, due in partto a large loss on business restructuring, the loss being related to the completion of the production facility
structural measures. For fiscal 2025, the final year of the ongoing medium- to long-term management plan, we
will strive hard to secure underlying consolidated business profit of ¥900 billion or more by realizing the benefits
from capital expenditures, notably sales expansion of high-grade steel products, and expanding overseas
businesses including that of India, in addition to the impacts of restructuring measures. Moreover, by acquiring
United States Steel Corporation, we aim to achieve the Group’s future vision of ¥1 trillion in business profit at
the earliest possible time.
While profit attributable to owners of the parent is forecasted to stay at around ¥300 billion in fiscal
2024 and no significant turnaround in the business environment is expected in fiscal 2025, we will strive hard in
fiscal 2025 to secure underlying consolidated business profit of ¥900 billion or more, and most losses fromreorganization are expected to be eliminated, thanks to the almost-secured effects of various measures including
the restructuring measures and capital expenditures. Based on these assumptions and our policy of providing
continuous, high-level shareholder returns, we plan to distribute a full-year dividend of ¥160 per share in fiscal
2024, maintaining the same level as in fiscal 2023.
With the aim of becoming “the best steelmaker with world-leading capabilities,” the Company iscommitted to steadily implementing various measures aimed at achieving the four pillars of its medium- to longterm management plan: “Rebuilding the domestic steel business and strengthening the Group’s management”;“Promoting a global strategy to deepen and expand the overseas business”; “Taking on the challenge of carbon
neutrality” and “Promoting digital transformation strategies.”
NIPPON STEEL wishes to take this opportunity to ask its shareholders for their understanding of theaforementioned circumstances and for their continued support.

-40-

(For reference) Progress of NIPPON STEEL Group’s
Medium-to Long-term Management Plan
Below is an explanation of the current status of implementation of the NIPPON STEEL Group’s
Medium- to Long-term Management Plan formulated in March 2021.
Four pillars of the management plan
1. Rebuilding our domestic steel business and strengthening our group’s management
2. Promoting a global strategy to deepen and expand our overseas business3. Taking on the challenge of carbon neutrality
4. Promoting digital transformation strategies
1. Rebuilding our domestic steel business
The Group’s basic policies are “to realize a higher-level order mix through aggressive investment instrategic products,” “to renew and improve facilities to ensure technological strength leading to profit generation,”and “to make the production framework streamlined and more efficient by selective concentration on certain
products and facilities.” Based on these overall basic policies, we are striving to build an optimal production
framework for our domestic steel business, strengthen our earnings base by re-establishing cost competitiveness,
which will overwhelm our competitors, and securing appropriate margins.

-41-

2. Deepening and expansion of overseas business
NIPPON STEEL will move away from our traditional business of exporting steel products, mainly
high-grade steel, and supplying them through overseas companies in charge of producing predominantly coldrolled and plating products. We will move toward 100 million ton global crude steel capacity through expanding
integrated production framework in areas with demand and firmly capturing local demands in “districts and areas
where demand is promisingly expected to grow” and in “sectors in which our technologies and products areappreciated.”-42-

3. Taking on the challenge of carbon neutrality
Adopting “Nippon Steel Carbon Neutral Vision 2050,” as our own new initiative against climatechange, a critical issue affecting human beings, NIPPON STEEL will strive to achieve carbon neutrality by 2050
as our top priority management issue.

-43-

4. Promoting digital transformation strategies
Over the five years, we will invest ¥100 billion or more into our digital transformation strategy, withthe aim of becoming a digitally advanced company in the steel industry.

-44-

(2) Capital Procurement
There have been no major increases in capital or capital procurement through the issuing of bonds
during fiscal year 2023.
(3) Plant and Equipment Investments
Classification

Title

Relining of No. 3 coke oven, including fixtures andfittings (Kimitsu, East Nippon Works, NIPPONSTEEL)
Major ongoing plant and equipment investment during
Establishment of next-generation hot-strip millfiscal year 2023
(Nagoya Works, NIPPON STEEL)
Relining of No. 2 coke oven, including fixtures andfittings (Oita, Kyushu Works, NIPPON STEEL)(4) Transfer of Business
NIPPON STEEL acquired the shares of common stock of NIPPON STEEL TRADINGCORPORATION through a tender offer under the Financial Instruments and Exchange Act of Japan, and madeit a subsidiary as of April 14, 2023.

-45-

(5) Changes in Assets and Profits/Losses
Fiscal Term

96th Term

97th Term

98th Term

37.65

44.46

40.32

99th Term(fiscal year
2023)
40.51

4,829.2[1,611.1]
110.0(32.4)

6,808.8[2,707.0]
938.1
637.3

7,975.5[3,239.8]
916.4
694.0

8,868.0[3,416.6]
869.6
549.3

7,573.9
2,759.9

8,752.3
3,466.7

9,567.0
4,181.1

10,714.6
4,777.7(35.22) yen
2,997.53
yen
10.00 yen[-]692.16 yen
3,764.69
yen
160.00 yen[70.00 yen]753.66 yen
4,540.59yen
180 yen[90.00 yen]596.59 yen
5,187.32
yen
160 yen[75.00 yen]Classification
Crude steel production(million tons)
Revenue (billions of yen)(Overseas revenue shown inbrackets)
Business profit (billions of yen)
Profit for the year attributable toowners of the parent (billions ofyen)
Total assets (billions of yen)
Total equity attributable to ownersof the parent (billions of yen)
Basic earnings per share
Total equity attributable to ownersof the parent per share

Dividends per share(Interim dividends shown inbrackets)
Ratio of cash dividends to
23.1
23.9
*26.8
consolidated profit (%)(Notes)(1) The consolidated financial statements of NIPPON STEEL are prepared in accordance with theInternational Financial Reporting Standards (“IFRS”), pursuant to the provisions of Article 120, Paragraph
1 of the Rules of Corporate Accounting.
(2) The figures for crude steel production include production amounts of consolidated subsidiaries, in addition
to NIPPON STEEL’s production.
(3) Business profit on consolidated statements of profit or loss indicates the results of sustainable businessactivities, and is an important measure to compare and evaluate the Company’s consolidated performancecontinuously. It is defined as being deducted cost of sales, selling general and administrative expenses andother operating expenses from revenue, and added share of profit in investments accounted for using theequity method and other operating income. Other operating income and expenses are composed mainlyof dividend income, foreign exchange gains or losses, and losses on disposal of fixed assets.
(4) The figures with an asterisk (*) are values on the assumption that the proposal on the year-end dividend
payment is approved as originally proposed at the 100th General Meeting of Shareholders.

-46-(6) Major Business Operations (as of March 31, 2024)
Business
Segment
Steelmaking
and Steel
Fabrication

EngineeringandConstruction

Main Products
Bars and shapes

Billets, rails, sheet piles, H-beams, othershapes bars, bars, bars-in-coils, wire rods,
special wire rods
Flat-rolled products
Heavy plates, medium plates, hot-rolledsheets, cold-rolled sheets, tinplates, tin-freesteel, hot-dipped galvanized sheets, othermetallic coated sheets, pre-coated sheets,
cold-rolled electrical sheets
Pipe and tubes
Seamless, butt-welded, electric resistancewelded, electric-arc welded, cold-drawn,
coated pipes and tubes, coated steel pipes
Railway/automotive/machinery Parts for railway vehicles, die-forgedparts
products, forged aluminum wheels,
Steelretarders, ring-rolled products, forged steel
Products
products
Specialty steel
Stainless steel, machine structural carbon
steel, structural alloy steel, spring steel,bearing steel, heat-resistant steel, freecutting steel, piano wire rods, high tensile
strength steel
Secondary steel products
Steel and synthetic segments, NS-BOX,
metro deck, PANZERMAST, vibrationdamping sheets and plates, structural steel
sheet members, columns, welding materials,
drums, bolts/nuts/washers, wire products,
OCTG accessories, building and civilengineering materials
Pig iron, steel ingots and others
Steelmaking pig iron, foundry pig iron, steel
ingots, iron and steel slag products, cement,
foundry coke
Businesses incidental to Steelmaking and
Design/maintenance/installation of
Steel Fabrication
machines/electrical equipment/measurement
apparatuses, marine transport, port/harbortransport, land transport, loading/unloading,warehousing, packaging, material
testing/analysis, measurement of working
environments, surveys on technicalinformation, operation and management offacilities, security services, services related
to payment of raw materials, iron-andsteelmaking plant construction engineering,
operating assistance, steelmaking knowhow provision, rolls
OthersRolled titanium products, food and textile
products, power supply, real estate, services
and others
Iron and steelmaking plants, industrial machinery and equipment, industrial furnaces,
resources recycling and environment restoration solutions, environmental plants,
waterworks, energy facilities and plants, chemical plants, storage tanks, on-land andoffshore pipelines laying works, energy-related solutions, offshore structure
fabrication/construction, civil engineering work, building construction, steel-structure
construction, trusses, standardized buildings products, base-isolation and vibration-control
devices-47-

Business
Segment
ChemicalsandMaterials

SystemSolutions

Main Products
Pitch coke, pitch, naphthalene, phthalic anhydride, carbon black, styrene monomer,
bisphenol A, styrene resin, epoxy resin, adhesive-free copper-clad laminated sheet for
flexible printed circuit boards, liquid crystal display materials, organic EL materials,
UV/thermosetting resins, rolled metallic foils, semiconductor bonding wire and microballs,
fillers for semiconductor encapsulation materials, carbon-fiber composite products, metal
catalyst carriers for cleaning automotive emissions, porous carbon materials
Computer systems engineering and consulting, outsourcing and other services using IT(7) Major Plants, Research Laboratories, Head Office, Office, Marketing Branches and Overseas
Offices (as of March 31, 2024)

PlantsNorth Nippon Works (Muroran, Kamaishi), East Nippon Works (Kashima /Kimitsu / Kamaishi / Joetsu), Nagoya Works (Tokai), Kansai Works(Wakayama / Kainan / Sakai / Osaka / Amagasaki), Setouchi Works (Himeji /Sakai / Saijo / Amagasaki), Kyushu Works (Kitakyushu / Oita / Hikari)

Research
Laboratories

Steel Research Laboratories, Advanced Technology Research Laboratories,
Process Research Laboratory (Located in Futtsu, Amagasaki, Kamisu)
R&D laboratories (Located within Steelworks of North Nippon, East Nippon,
Nagoya, Kansai, Setouchi, Kyushu)

Head Office, Officeand Marketing
Branches

Head Office (Chiyoda-ku, Tokyo)
Osaka Office (Osaka)
Hokkaido Marketing Branch (Sapporo), Tohoku Marketing Branch (Sendai),
Niigata Marketing Branch (Niigata), Nagoya Marketing Branch (Nagoya),
Chugoku Marketing Branch (Hiroshima), Kyushu Marketing Branch (Fukuoka)

Overseas Offices

NIPPON STEEL Beijing Representative Office (China),
NIPPON STEEL Shanghai Representative Office (China),
NIPPON STEEL Guangzhou Representative Office (China),
NIPPON STEEL Dubai Office (UAE),NIPPON STEEL NORTH AMERICA, INC. (USA),NIPPON STEEL AMÉRICA DO SUL LTDA. (Brazil),
NIPPON STEEL EUROPE GmbH (Germany),
NIPPON STEEL AUSTRALIA PTY. LIMITED (Australia),
NIPPON STEEL CONSULTING (BEIJING) CO., LTD. (China),
PT. NIPPON STEEL INDONESIA (Indonesia),
NIPPON STEEL VIETNAM COMPANY LIMITED (Vietnam)
NIPPON STEEL SOUTHEAST ASIA CO., LTD. (Thailand),NIPPON INDIA PRIVATE LIMITED (India)(Notes)(1) Overseas Offices include local subsidiaries.
(2) See “(9) Principal Subsidiaries and Affiliates” for a listing of major subsidiaries and their locations.
(3) As of April 1, 2024, the overseas office (a locally incorporated company) NIPPON STEEL
SOUTHEAST ASIA CO., LTD. has changed its trade name to NIPPON STEEL (THAILAND) CO.,
LTD.

-48-

(8) Employment Data (as of March 31, 2024)
1) NIPPON STEEL Group
Business Segment
Number of employees
Steelmaking and Steel Fabrication
97,316 [12,796]
Engineering and Construction
4,997 [1,752]
Chemicals and Materials
3,454 [587]
System Solutions
7,872 [59]Total
113,639 [15,194](Notes)(1) Number of employees represents the number of employees engaged in each business at NIPPON STEEL
and its subsidiaries.
(2) Temporary workers are not included. Numbers of temporary workers (average number of temporary
workers employed during fiscal year 2023) are shown in brackets.
2) NIPPON STEEL
Number of employees

Average age

Average number of years
employed

28,543 [1,397] employees

39.9 years old

17.6 years(Note)
Temporary workers are not included. Number of temporary workers (average number of temporary
workers employed during fiscal year 2023) is shown in brackets.

-49-

(9) Principal Subsidiaries and Affiliates (as of March 31, 2024)
Steelmaking and Steel Fabrication
Company(Location of head office)[Subsidiaries]
Sanyo Special Steel Co., Ltd.
(Himeji)Paid-in
capitalSharehol
ding
Ratio

Millionyen
53,800%Business content*53.1 Makes and markets special steel products

NIPPON STEEL TRADINGCORPORATION(Chuo-ku, Tokyo)

16,389NIPPON STEEL COATED SHEETCORPORATION(Chuo-ku, Tokyo)
Osaka Steel Co., Ltd.
(Osaka)NIPPON STEEL METALPRODUCTS CO., LTD.
(Chiyoda-ku, Tokyo)

12,588Krosaki Harima Corporation(Kitakyushu)
NIPPON STEEL TEXENG. CO.,LTD. (Chiyoda-ku, Tokyo)

5,537

NIPPON STEEL PIPE CO., LTD.
(Chiyoda-ku, Tokyo)
NIPPON STEEL Stainless SteelCorporation(Chiyoda-ku, Tokyo)
NIPPON STEEL LOGISTICS CO.,LTD.
(Chuo-ku, Tokyo)
NIPPON STEEL SG WIRE CO., LTD.
(Chiyoda-ku, Tokyo)
Geostr Corporation(Bunkyo-ku, Tokyo)

5,000

100.0 Conducts engineering, maintenance, andoperations relating to machinery, electricalinstrumentation, systems, and construction forsteel-production and other facilities
100.0 Makes, coats and markets steel pipes and tubes

5,000

100.0 Makes and markets stainless steel

4,000

100.0 Undertakes ocean and land transportation andwarehousing

3,634

100.0 Makes and markets bars and wire rods

3,352

* 44.6 Makes and markets concrete and metal
products for civil engineering and building
construction work
100.0 Makes and markets welding materials andapparatuses

8,769
5,912

5,468

NIPPON STEEL WELDING &ENGINEERING CO., LTD.
(Koto-ku, Tokyo)
NIPPON STEEL DRUM CO., LTD.
(Koto-ku, Tokyo)
NIPPON STEEL PROCESSING Co.,Ltd.
(Sakai)

2,100

NIPPON STEEL CEMENT CO., LTD.
(Muroran)
NIPPON STEEL FINANCE Co., Ltd.
(Chiyoda-ku, Tokyo)
NIPPON STEEL STAINLESS STEELPIPE CO., LTD.
(Chiyoda-ku, Tokyo)

80.0 Markets, imports and exports iron and steel,industrial machinery, infrastructure, food andtextile, and other products
100.0 Makes and markets galvanized sheets,
prepainted galvanized sheets, coated sheets,and construction materials*61.0 Makes and markets shapes, bars, flat steels
and billets
100.0 Makes and markets structural materials forbuildings and civil engineering work, prepainted
galvanized sheets, steelmaking fluxes, and CC
powders*42.9 Makes, markets and constructs refractories

1,654

100.0 Makes and markets drums

1,530

1,500

*63.1 Makes, processes, and markets cold-heading
wire, cold-finished bars, other secondary
processed products using bars and wires,drawn steel tubes, and machine parts
85.0 Makes and markets cement

1,000

100.0 Engages in the Group’s financing operations

916

-50-

100.0 Makes and markets stainless-steel pipesCompany(Location of head office)
NIPPON STEEL Eco-Tech
Corporation(Minato-ku, Tokyo)
G Steel Public Company Limited(Rayong State, Thailand)
G J Steel Public Company Limited(Chon Buri State, Thailand)
NS-Siam United Steel Co., Ltd.
(Rayong State, Thailand)
NIPPON STEEL PIPE (THAILAND)
CO., LTD.
(Chon Buri State, Thailand)
PT KRAKATAU NIPPON STEELSYNERGY(Cilegon, Indonesia)
Standard Steel, LLC(Pennsylvania, U.S.A.)
WHEELING-NIPPON STEEL, INC.
(West Virginia, U.S.A.)
PT. PELAT TIMAH NUSANTARATBK.
(Jakarta, Indonesia)
NIPPON STEEL Processing(Thailand) Co., Ltd.
(Rayong State, Thailand)
NIPPON STEEL PIPE AMERICA,
INC.
(Indiana, U.S.A.)

Paid-in
capitalSharehol
ding
Ratio

500

THB
144,643
million
THB
24,467
million
THB
13,007
millionTHB
8,336
million
US$186
million
US$77
millionUS$
71
millionUS$
26
millionTHB
571
millionUS$
10
million-51-

Business content*84.2 Designs, builds, operates, maintains, andmanages water-treatment and other systems;
designs civil-engineering projects; andperforms environmental and chemical analysis*60.2 Makes and markets hot-rolled steel sheets*57.6 Makes and markets hot-rolled steel sheets*95.2 Makes and markets cold-rolled sheets andgalvanized sheets*100.0 Makes and markets steel pipes and tubes

84.8 Makes and markets cold-rolled sheets andgalvanized sheets*100.0 Makes and markets railway wheels and axles*100.0 Makes and markets galvanized sheets*40.0 Makes and markets tinplate*70.1 Makes and markets cold-heading wire andcold-finished bars
*80.0 Makes and markets steel pipes and tubes

Company(Location of head office)

Sharehol
ding
Ratio

Paid-in
capital[Companies accounted for using theMillionequity method]yen
Usinas Siderúrgicas de Minas Gerais
R$13,200
S.A.-USIMINAS
million(Estado do Minas Gerais, Brazil)
Baosteel-Nippon Steel Automotive
RMB
Steel Sheets Co., Ltd.
3,000
(Shanghai, China)
millionWISCO-NIPPON STEEL Tinplate Co.,
RMB
Ltd.
2,310
(Hubei, China)
millionAMNS Luxembourg Holding S.A.
US$229(Luxembourg, Luxembourg)
millionJamshedpur Continuous Annealing &INR
Processing Company Private Limited
14,320(West Bengal, India)
million
UNIGAL Ltda.
R$584(Estado do Minas Gerais, Brazil)
million-52-

Business content%
22.2 Makes and markets steel products

50.0 Makes and markets automotive steel sheets

50.0 Makes and markets tinplate and tinplate sheets

40.0 A holding company of ArcelorMittal Nippon
Steel India Limited
49.0 Makes and markets automotive cold-rolled
steel sheets*30.0 Makes galvanized sheets

Engineering and Construction
Company(Location of head office)[Subsidiaries]
NIPPON STEEL ENGINEERING
CO., LTD.
(Shinagawa-ku, Tokyo)

Sharehol
ding
Ratio

Paid-in
capitalMillionyen
15,000Business content%
100.0 Makes and markets industrial machinery andequipment and steel structures; undertakes
civil engineering and building constructions
work; waste and regeneration treatment
business; electricity, gas, and heat supply
business

Chemicals and Materials
Company(Location of head office)[Subsidiaries]
NIPPON STEEL Chemical & MaterialCo., Ltd.
(Chuo-ku, Tokyo)

Sharehol
ding
Ratio

Paid-in
capitalMillionyen
5,000

Business content%
100.0 Makes and markets coal chemicals,
petrochemicals, electronic materials,
semiconductor components and materials,
electronic components and materials, carbonfiber composite products, and metal-processed
products

System Solutions
Company(Location of head office)[Subsidiaries]
NS Solutions Corporation(Minato-ku, Tokyo)

Sharehol
ding
Ratio

Paid-in
capitalMillionyen
12,952Business content%
63.4 Provides engineering and consulting
pertaining to computer systems, outsourcing

and other services using IT(Notes)(1) Figures with asterisks (*) include shares held by subsidiaries(2) The percentage of the Group’s ownership of Krosaki Harima Corporation, Geostr Corporation and PT
PELAT TIMAH NUSANTARA TBK. is 50% or less. However, NIPPON STEEL has determined that it
effectively has control over these companies and has included them in the scope of consolidation as
subsidiaries.
(3) Starting from fiscal year 2023, the standards for the companies to be listed above have been revised.

-53-

(10) Major Lenders (as of March 31, 2024)
Funds borrowed(Billions of yen)

LenderSumitomo Mitsui Banking Corporation

362.6

MUFG Bank, Ltd.

349.2

Mizuho Bank, Ltd.

321.2

Sumitomo Mitsui Trust Bank, Limited

121.0

Development Bank of Japan Inc.

100.0(11) Surplus Distribution Policy
1) Dividends
NIPPON STEEL’s basic profit distribution policy is to pay dividends from distributable funds at theend of the first half (interim) and second half (year-end) of the fiscal year in consideration of the consolidated
operating results and such factors as capital requirements for investment and other activities aimed at raising
corporate value and performance prospects while also considering the financial structure of NIPPON STEEL on
a consolidated and a non-consolidated basis.
NIPPON STEEL aims to achieve a consolidated annual payout ratio target of approximately 30% asbenchmark for the payment of dividends from distributable funds in consideration of the consolidated operating
results.
The level of the first half dividend is determined in consideration of the first-half performance results
and full-year earnings forecasts.
As in the past, the year-end dividend payment will be made according to the resolution of the General
Meeting of Shareholders, and any other form of distribution and appropriation of surplus (including the interim
dividend) will be made according to the resolution of the Meeting of the Board of Directors as provided in Article
33 of the Articles of Incorporation and with the aim of securing flexibility in financial operations.
2) Acquisition of treasury stocks
The Company will acquire treasury stocks according to the resolution of the Meeting of the Board of
Directors, as provided by Article 33 of the Articles of Incorporation and with the aim of securing flexibility infinancial operations. At the Meeting of the Board of Directors, the acquisition of treasury stocks will becomprehensively determined after examining the needs of flexible financial operations management and after
studying the effect of such an acquisition on NIPPON STEEL’s financial structure.
(12) Others
On October 30, 2018, December 21, 2023, and January 11, 2024, the Supreme Court of Korea
dismissed the appeals by NIPPON STEEL (NIPPON STEEL lost the appeals) of a decision concerning threelawsuits originally filed in the Republic of Korea by certain South Korean plaintiffs claiming damages for theirwork as draftees for Japan Iron & Steel Co., Ltd. during the Second World War, and handed down decisions(ordering NIPPON STEEL to pay aggregated 14 plaintiffs in the three lawsuits a total of 1.2 billion Won(approximately 130 million yen) and accrued interest).
Additionally, in connection with the series of so-called draftee cases in the Republic of Korea,
including the above lawsuits, the assets of NIPPON STEEL located in the country (a portion of the shares in
POSCO-Nippon Steel RHF Joint Venture Co., Ltd. owned by NIPPON STEEL) is currently under seizure. The
procedures to convert such assets to cash are pending.
NIPPON STEEL will deal appropriately with this matter, taking into account the status of diplomaticnegotiations between the governments of Japan and South Korea and other factors.

-54-

2.

Shares and Stock Acquisition Rights(1) Overview of Shares (as of March 31, 2024)
1) Total number of shares authorized to be issued2) Total number of shares issued(Note)

2,000,000,000 shares
950,549,305 shares(including 28,415,333 treasury stocks)
Due to the exercise of stock acquisition rights between April 1, 2024 and April 30,
2024, the total number of shares outstanding as of April 30, 2024 was 951,460,919.

3) Number of shareholders

629,748

4) Top 10 shareholders
Shares held(Thousand shares)

Name of shareholder

Percentage ofownership(%)

The Master Trust Bank of Japan, Ltd. (Trust
119,86313.0
Account)
Custody Bank of Japan, Ltd. (Trust Account)
46,803
5.1
Nippon Life Insurance Company
19,179
2.1
STATE STREET BANK WEST CLIENT 17,424
1.9
TREATY 505234
Meiji Yasuda Life Insurance Company
13,712
1.5
JPMorgan Securities Japan Co., Ltd.
12,859
1.4
Nippon Steel Group Employees Shareholding
12,337
1.3
Association
Mizuho Bank, Ltd.
11,046
1.2
Sumitomo Mitsui Banking Corporation
10,252
1.1
MUFG Bank, Ltd.
8,933
1.0
(Note)The percentage of ownership is calculated based on the total number of shares issued excluding treasury stocks.
5) Shares delivered to Directors as compensation for the execution of their duties during the current
fiscal year
No matters to be reported during this period.

-55-

(2) Stock Acquisition Rights (as of March 31, 2024)
The Company has issued Zero Coupon Convertible Bonds due 2024 and Zero Coupon
Convertible Bonds due 2026 on October 4, 2021.

[Outline of Stock Acquisition Rights under Zero Coupon Convertible Bonds due 2024]

Class, contents, andnumber of shares to beissued upon exercise ofstock acquisition rights

The class and contents of shares to be delivered upon
exercise of the stock acquisition rights shall be shares ofcommon stock of the Company (100 shares constituting
one unit). The number of shares of common stock of theCompany to be delivered by the Company upon exerciseof such rights shall be determined by dividing the total
face value of the bonds subject to the exercise request by
the applicable conversion price as detailed below.
Fractions of less than one share shall be discarded and no
cash adjustment will be made in respect thereof. If shares
not constituting a unit of shares are delivered upon
exercise of stock acquisition rights, such non-unit sharesshall be delivered to the bondholders with stockacquisition rights in the same manner as the sharesconstituting a whole unit of shares, and no cash amounts
shall be paid by the Company in respect of such non-unit
shares.

Number of stockacquisition rights

15,000 at the time of issuance (14,945 remaining)

Conversion price*2,413.3 yen

Period during whichstock acquisition rights
may be exercised

From October 18, 2021 to September 20, 2024 (local timeat the place where the bonds are deposited to exercise ofstock acquisition rights). However, the Terms andConditions of Zero Coupon Convertible Bonds due 2024
provide additional period during which stock acquisitionrights may be exercised in the event of certain events.

Contents of assets to becontributed for the
exercise of stockacquisition rights and theamount thereof

Upon the exercise of each stock acquisition right, thebonds pertaining to such stock acquisition right shall becontributed, and the value of such bonds shall be equal to
the face value thereof.

Balance of the bonds
with stock acquisitionrights

149.45 billion yen(Notes)(1) Of conversion price with an asterisk (*), in accordance with the approval of the payment of aninterim dividend of 75 yen per share of common stock of the Company at the meeting of theBoard of Directors of the Company held on November 1, 2023, the conversion price wasadjusted from 2,468.3 yen to 2,413.3 yen on and after October 1, 2023 pursuant to the Terms
and Conditions of Zero Coupon Convertible Bonds due 2024.
(2) Due to the exercise of stock acquisition rights between April 1, 2024 and April 30, 2024, thenumber of stock acquisition rights remaining as of April 30, 2024 was 14,725, and the balanceof the bonds with stock acquisition rights was 147.25 billion yen.

-56-

[Outline of Stock Acquisition Rights under Zero Coupon Convertible Bonds due 2026]

Class, contents, andnumber of shares to beissued upon exercise ofstock acquisition rights

The class and contents of shares to be delivered upon
exercise of the stock acquisition rights shall be shares ofcommon stock of the Company (100 shares constituting
one unit). The number of shares of common stock of theCompany to be delivered by the Company upon exerciseof such rights shall be determined by dividing the total
face value of the bonds subject to the exercise request by
the applicable conversion price as detailed below.
Fractions of less than one share shall be discarded and no
cash adjustment will be made in respect thereof. If shares
not constituting a unit of shares are delivered upon
exercise of stock acquisition rights, such non-unit sharesshall be delivered to the bondholders with stockacquisition rights in the same manner as the sharesconstituting a whole unit of shares, and no cash amounts
shall be paid by the Company in respect of such non-unit
shares.

Number of stockacquisition rights

15,000 at the time of issuance (15,000 remaining)

Conversion price*2,528.8 yen

Period during whichstock acquisition rights
may be exercised

From October 18, 2021 to September 24, 2026 (local timeat the place where the bonds are deposited to exercise ofstock acquisition rights). However, the Terms andConditions of Zero Coupon Convertible Bonds due 2026
provide additional period during which stock acquisitionrights may be exercised in the event of certain events.

Contents of assets to becontributed for the
exercise of stockacquisition rights and theamount thereofBalance of the bonds
with stock acquisitionrightsUpon the exercise of each stock acquisition right, thebonds pertaining to such stock acquisition right shall becontributed, and the value of such bonds shall be equal to
the face value thereof.

150 billion yen(Note) Of conversion price with an asterisk (*), in accordance with the approval of the paymentof an interim dividend of 75 yen per share of common stock of the Company at themeeting of the Board of Directors of the Company held on November 1, 2023, theconversion price was adjusted from 2,586.4 yen to 2,528.8 yen on and after October 1,
2023 pursuant to the Terms and Conditions of Zero Coupon Convertible Bonds due 2026.

-57-

3.

Basic Philosophy of Corporate Governance
The Company has established a corporate governance system suited to the businesses of the NIPPONSTEEL Group in order to achieve the sound and sustainable growth of the NIPPON STEEL Group andincrease its corporate value over the medium- to long-term, in response to the delegation of responsibilities
by and trust of all stakeholders, including its shareholders and business partners.
The Company has adopted a company structure with an Audit & Supervisory Committee for the
purpose of, among others, expediting management decision-making, enhancing discussions by the Board of
Directors relating to matters such as the formulation of management policies and strategies by limiting thenumber of items for deliberation by the Board of Directors, and strengthening the supervisory function of
the Board of Directors over management.
Currently, the Board of Directors of NIPPON STEEL is comprised of fifteen (15) members, of whomten (10) are Directors (excluding Directors who are Audit & Supervisory Committee Members) and five (5)are Directors who are Audit & Supervisory Committee Members. By all Directors appropriately fulfilling
their respective roles and responsibilities, prompt decision-making is achieved corresponding andtransparent decision-making by the Board of Directors are secured. In addition, Directors who are Audit &Supervisory Committee Members have voting rights on the Board of Directors regarding decisions on
proposals for the election and dismissal of Directors as well as the election and dismissal of Representative
Directors, and other decisions in general regarding business execution (excluding decisions that have beendelegated to Directors). The Audit & Supervisory Committee has the authority to give its opinions at theGeneral Meeting of Shareholders regarding the election, compensation, etc. of Directors, excluding
Directors who are Audit & Supervisory Committee Members. This structure strengthens the supervisory
function of the Board of Directors over management.
If Items 2 and 3 are approved as proposed herein at the 100th General Meeting of Shareholders, Outside
Directors will continue to account for one-third (5 out of 15) of all members of the Company’s Board of
Directors.

-58-

4. Members of the Board of Directors(1) Executive Officers as of March 31, 2024
Title and name
Representative Director andChairman
Kosei Shindo

Representative Director andPresident
Eiji Hashimoto

Representative Directors andExecutive Vice Presidents
Naoki Sato

Takahiro Mori

Responsibilities/positions and material concurrent positions

Material concurrent positions
Outside Director, Japan Post Holdings Co., Ltd.
Outside Director, Tokio Marine Holdings, Inc.
Outside Member of the Board of Directors, Development Bank of Japan

Material concurrent positions
Vice Chair, KEIDANREN (Japan Business Federation)

Digital Innovation; Information & Communication Technology; Intellectual
Property; Safety; Environmental Technology & Management; Plant Safety;
Technical Administration & Planning (including Standardization); Quality
Management; Plant Engineering and Facility Management; Plant/Machinery
Engineering & Construction Management; Ironmaking Technology;
Steelmaking Technology; Energy Technology; Slag, Cement & Resource
Recycling
Project Leader, Next-Generation Hot Strip Mill Project; Project Leader,
Ironmaking Operations Project; Deputy Project Leader, India Project, Global
Business Development Sector
Cooperating with Executive Vice President T. Imai on Green Transformation
Development
Cooperating with Executive Vice President H. Funakoshi on Environmental
Planning
Head of Global Business Development; Project Leader, India Project, Global
Business Development Sector
Accounting & Finance; Overseas Offices (including locally incorporated
companies)
Material concurrent positions
Vice Chairman, WISCO-NIPPON STEEL Tinplate Co., Ltd.

Takashi Hirose

Marketing Administration & Planning; Transportation & Logistics; Project
Development; Raw Materials; Machinery & Materials Procurement; Steel
Products Units; Domestic Office and Branches
Head of Unit, Pipe & Tube Unit; Head of Division,
Raw Materials Division-II; Deputy Project Leader, Next-Generation Hot
Strip Mill Project
Cooperating with Executive Vice President T. Mori on Overseas Offices(including locally incorporated companies)
Material concurrent positions
Chairman, Baosteel-Nippon Steel Automotive Steel Sheets Co., Ltd.
Chairman, The Japan Ferrous Raw Materials Association

Kazuhisa Fukuda

Head of Research and Development
Cooperating with Executive Vice President T. Imai on Green Transformation
Development
Material concurrent positions
Vice Chairman, The Iron and Steel Institute of Japan
Chairman, The Japan Research and Development Center For Metals-59-

Title and nameResponsibilities/positions and material concurrent positions

Tadashi ImaiHead of Green Transformation Development; Project Leader, Electric
Furnace Project; Deputy Project Leader, Next-Generation Hot Strip Mill
Project
Cooperating with Executive Vice President H. Funakoshi on Production &Facilities Planning concerning Corporate Planning
Material concurrent positions
Vice Chairman, The Japan Iron and Steel Federation

Hirofumi Funakoshi

Corporate Planning; Group Companies Planning; General Administration;
Legal; Internal Control & Audit; Human Resources; Environmental
Planning; Business Transformation & Standardization;
Cooperating with Executive Vice President N. Sato on Environmental
Technology & Management
Cooperating with Executive Vice President T. Imai on Green Transformation
Development
Material concurrent positions
Representative Director, Nippon Steel Arts Foundation

Directors, Member of theBoard (Outside Directors)
Tetsuro Tomita

Kuniko Urano

Chairman and Director, East Japan Railway Company
Material concurrent positions
Outside Director, ENEOS Holdings, Inc.
Outside Director, Nippon Life Insurance Company
Advisor of Komatsu Ltd.
Material concurrent positions
Outside Director, Yokogawa Electric Corporation
Outside Director, MORINAGA & CO., LTD.

Senior Audit & Supervisory
Committee Members (fulltime)
Shozo Furumoto
Audit & Supervisory
Committee Members (fulltime)
Masayoshi Murase
Audit & Supervisory
Committee Members (Outside
Directors)
Seiichiro Azuma
Certified Public Accountant, Seiichiro Azuma Certified Public Accountant
OfficeHiroshi Yoshikawa
Masato Kitera

Material concurrent positions
Outside Director, Marubeni Corporation
Outside Director, Japan Tobacco Inc.

-60-

(Notes)(1) The Company has concluded an agreement with each Outside Director (excluding Executive
Directors etc.) limiting their liability under Article 423, Paragraph 1 of the Companies Act to 20
million yen or the amount stipulated under Article 425, Paragraph 1 of the Companies Act,
whichever is greater, as long as he/she acts unknowingly and is not grossly negligent in performing
his/her duties.
(2) The Company has concluded an agreement with each Director that the Company indemnifies eachof them for the costs stipulated in Article 430-2, Paragraph 1, Item (i) of the Companies Act and thelosses stipulated in Item (ii) of the same Paragraph to the extent stipulated by laws and regulations.
The agreement stipulates, among others, that the Company shall not be obligated to compensate
each of them for the costs incurred by a Director in the event that the Company makes a claim
seeking liability against that Director (excluding cases of shareholder derivative suits), or the costsin the event that a Director has acted in bad faith or gross negligence in performing their duties.
(3) The Company has concluded a directors and officers liability insurance contract with the insurancecompany with persons including directors, audit & supervisory board members, executive officers,
and important employees, of the Company, its subsidiaries, and other related entities as the insured.
Under the contract, the insurance company will cover, among others, legal compensation fordamages and litigation costs to be incurred by the insured as a result of claims for damages arisingfrom acts (including inactions) of the insured pursuant to their positions. All insurance premiums
are paid by the Company and its subsidiaries. The contract stipulates a deductible amount and also
stipulates that damages caused by criminal acts of the insured or damages caused by acts committed
by the insured that the insured knew were in violation of laws and regulations are not covered.
(4) Representative Director and President Eiji Hashimoto served as Vice Chairman of The Japan Iron
and Steel Federation until March 29, 2024.
(5) Audit & Supervisory Committee Member Seiichiro Azuma is a certified public accountant with
substantial knowledge of finance and accounting.
(6) The Company elected Mr. Shozo Furumoto and Mr. Masayoshi Murase as full-time Audit &Supervisory Committee Members to ensure the effectiveness of audits.
(7) The Company has filed all five Outside Directors as its “independent directors” with each financial
exchange in Japan where it is listed.

-61-

(2) Executive Officers after April 1, 2024
Title and nameResponsibilities/positions

Representative Director,
Chairman and CEO
Eiji Hashimoto
Representative Director,
President and COO
Tadashi Imai
Representative Director,
Vice Chairman andExecutive Vice President
Takahiro Mori

Rendering assistance to Chairman and CEO, and cooperating with President
and COO on large-scale overseas projects
Head of Global Business Development; Project Leader, India Project, Global
Business Development Sector; Project Leader, USS Project
Accounting & Finance; Overseas Offices (including locally incorporated
companies)

Representative Directors andExecutive Vice Presidents
Naoki Sato

Digital Innovation; Information & Communication Technology; Plant
Engineering and Facility Management; Plant/Machinery Engineering &Construction Management; Ironmaking Technology; Steelmaking Technology;
Energy Technology
Deputy Project Leader, India Project, Global Business Development Sector;
Deputy Project Leader, Thai Steel Project, Global Business Development Sector;
Deputy Project Leader, USS Project
Cooperating with Executive Vice President H. Minato on Production andFacilities stabilization concerning Technical Administration & Planning
Cooperating with Executive Vice President T. Hirose on Production and Facilities
stabilization concerning Steel Products Units
Cooperating with Executive Vice President T. Mori on Technology and Facilities
concerning Global Business Development

Takashi Hirose

Marketing Administration & Planning; Transportation & Logistics; Project
Development; Raw Materials; Machinery & Materials Procurement; Steel
Products Units; Domestic Office and Branches
Deputy Project Leader, Next-Generation Hot Strip Mill Project
Cooperating with Executive Vice President T. Mori on Overseas Offices(including locally incorporated companies)

Kazuhisa Fukuda

Head of Research and Development
Cooperating with Executive Vice President H. Minato on Green Transformation
Development

Hirofumi Funakoshi

Corporate Planning; Group Companies Planning; General Administration; Legal;Internal Control & Audit; Human Resources; Environmental Planning; BusinessTransformation & Standardization; Policy issues concerning Green
Transformation Development
Cooperating with Executive Vice President H. Minato on Environmental
Technology & Management-62-

Title and nameResponsibilities/positions

Directors, Member of the
Board
Kosei Shindo

Senior Advisor

Directors, Member of theBoard (Outside Directors)
Tetsuro Tomita

Advisor, East Japan Railway Company

Kuniko Urano

Advisor, Komatsu Ltd.

Senior Audit & Supervisory
Committee Members (fulltime)
Shozo Furumoto(full-time)Masayoshi Murase
Masayoshi Murase
Audit & Supervisory
Committee Members (Outside
Directors)
Seiichiro Azuma

Certified Public Accountant, Seiichiro Azuma Certified Public Accountant
OfficeHiroshi Yoshikawa
Masato Kitera-63-

(3) Compensation Paid to Company Officers
Position
Number of
Total amountrecipients(yen)
Directors(excluding
Directors who are
Audit &
Supervisory
Committee
Members)
OutsideDirectors
Directors who are
Audit &
Supervisory
Committee
Members
OutsideDirectors
Total

Total amount by type (yen)Monthly
Non-monetary
Other
compensation*compensationcompensation

11

1,175,320,000

1,175,320,000

-

-

2

34,560,000

34,560,000

-

-

5

172,790,000

172,790,000

-

-

3

51,840,000

51,840,000

-

-

16

1,348,110,000

1,348,110,000--(Notes)(1) The above number of recipients includes one (1) Director (excluding Directors who are Audit &Supervisory Committee Members) who retired at the conclusion of the 99th General Meeting of
Shareholders held on June 23, 2023.
(2) Of monthly compensation with an asterisk (*), matters regarding performance-linked compensation are
as follows.
(i) Monthly compensation for Directors (excluding Directors who are Audit & Supervisory Committee
Members and Outside Directors) is wholly based upon the performance of NIPPON STEEL. As indicators
for performance-linked compensation, NIPPON STEEL uses consolidated annual profit/loss (however,corrections were made for the sake of fair remuneration commensurate with earnings for the term by
excluding the portion of gains/losses from reorganization for production facility structural measures;
hereinafter the same in (ii) and (iii) below), which clearly indicates its business performance and earnings
power, and consolidated EBITDA, while taking into account other factors including the revenue targets
in the Medium- to Long-term Management Plan.
(ii) Monthly compensation for Directors who are Audit & Supervisory Committee Members (excluding
Outside Directors) is fixed compensation in principle, but the amount of compensation will be increased
or decreased only in the event of significant changes in the consolidated annual profit/loss andconsolidated EBITDA of NIPPON STEEL.
(iii) Monthly compensation for Outside Directors is fixed compensation in principle, but the amount ofcompensation may be increased or decreased only in the event of significant changes in the consolidated
annual profit/loss of NIPPON STEEL.
As for monthly compensation for Directors, the base amount of compensation for each position, etc.
fluctuates within a certain range based on each of the above indicators, and the amount of each Director’smonthly compensation is determined within the limit approved by the General Meeting of Shareholders.
The consolidated profit for the year attributable to owners of the parent and consolidated EBITDA in
fiscal year 2021, which were used to determine the monthly compensation for Directors from April 2023
to June 2023, were 637.3 billion yen and 1,290.2 billion yen. The consolidated profit for the year
attributable to owners of the parent and consolidated EBITDA in fiscal year 2022, which were used todetermine the monthly compensation for Directors from July 2023 to March 2024 were 694.0 billion yen
and 1,256.6 billion yen.
(3) The specific amount of monthly compensation for each Director (excluding Directors who are Audit &Supervisory Committee Members) is, as detailed in (3) 1) (a) (i) c. below, determined by the Board of
Directors after discussion in the “Nomination and Compensation Advisory Committee.” The specificamount of monthly compensation for each Director who is Audit & Supervisory Committee Member isdetermined by discussions of the Directors who are Audit & Supervisory Committee Members.
(4) The limit on the amount of compensation for Directors (excluding Directors who are Audit & Supervisory
Committee Members) was approved at the 96th General Meeting of Shareholders held on June 24, 2020
to be within 140 million yen per month (including compensation for Outside Directors of within 12
million yen per month). The number of Directors (excluding Directors who are Audit & Supervisory
Committee Members) was 11 (including 3 Outside Directors) at the conclusion of the 96th General-64-Meeting of Shareholders.
(5) The limit on the amount of compensation for Directors who are Audit & Supervisory Committee
Members was approved at the 96th General Meeting of Shareholders held on June 24, 2020 to be within
22 million yen per month. The number of Directors who are Audit & Supervisory Committee Members
was 7 (including 4 Outside Directors) at the conclusion of the 96th General Meeting of Shareholders.

-65-(4) Policies regarding Decision on the Amount of Compensations for Directors
1) Content of policies
The policies regarding the decisions on the amount of compensation, etc. for Directors of NIPPONSTEEL are as detailed in items (i) and (ii) below.
NIPPON STEEL abolished its retirement benefits for Directors in 2006. Furthermore, the policies
relating to their bonuses were removed from the “Policies regarding the Decisions on the Amount ofCompensation” for Directors, etc. in 2013.
(i)

Directors (excluding Directors who are Audit & Supervisory Committee Members)a. Basic policy
NIPPON STEEL sets the base amount of compensation for each position as it deems appropriate
in consideration of the skills and responsibilities it requires of each Director. This base amount varies
within a certain range based on NIPPON STEEL’s consolidated performance. The Company thendetermines the amount of monthly compensation for each Director within the limit approved by theGeneral Meeting of Shareholders.
b. Policy on performance-linked compensation
In accordance with the basic policy in the above a, compensation of Directors (excluding
Directors who are Audit & Supervisory Committee Members and Outside Directors) consists solely
of monthly compensation, and the amount of compensation is wholly based upon the performance of
NIPPON STEEL, in order to give incentives for the sustainable growth of NIPPON STEEL’s groupand improvement of its corporate value. As indicators for performance-linked compensation, NIPPONSTEEL uses consolidated annual profit/loss (however, corrections were made for the sake of fair
remuneration commensurate with earnings for the term by excluding the portion of gains/losses fromreorganization for production facility structural measures; hereinafter the same in this section), whichclearly indicates its business performance and earning power, and consolidated EBITDA, while taking
into account other factors including the revenue targets in the Medium- to Long-term Management
Plan.
Compensation for Outside Directors (excluding Directors who are Audit & Supervisory
Committee Members) consists solely of monthly compensation, and fixed compensation in principle,
but the amount of compensation may be increased or decreased only in the event of significant changes
in the consolidated annual profit/loss of NIPPON STEEL.
c. Method of determining compensation for each individual
The specific amount of monthly compensation for each Director (excluding Directors who are
Audit & Supervisory Committee Members) is determined by the Board of Directors after the
deliberation of the “Nomination and Compensation Advisory Committee.”(ii) Directors who are Audit & Supervisory Committee Members
NIPPON STEEL determines the monthly compensation for each Director who is an Audit &Supervisory Committee Member, within the limit approved by the General Meeting of Shareholders, byconsidering the duties of the Director’s position and whether the Director is full-time or part-time.

2) Methods of determining the policies
The policies described in 1) above for Directors (excluding Directors who are Audit & Supervisory
Committee Members) are determined by resolution of the Board of Directors, after the deliberation of the“Nomination and Compensation Advisory Committee,” while for Directors who are Audit & Supervisory
Committee Members, the policies described in 1) above are determined through discussion by Directors
who are Audit & Supervisory Committee Members.
The Nomination and Compensation Advisory Committee conducts discussions on a wide-range of
topics including the system of Directors’ compensation and the appropriateness of the compensationlevels by position, taking into account the survey results of directors’ compensation levels of othercompanies obtained from the third-party research organizations.

3) Reason the Board of Directors judged that the content of compensation, etc., for individual Directors(excluding Directors who are Audit & Supervisory Committee Members) for the current fiscal year is inline with the policy stated in 1) above-66-

Compensation, etc., for individual Directors (excluding Directors who are Audit & Supervisory
Committee Members) for the current fiscal year were determined by the Board of Directors following
confirmation that those amounts are in line with the policy stated in 1) above, after the deliberation of the“Nomination and Compensation Advisory Committee.” Therefore, the Board of Directors judged that thecontent of the compensation, etc., for each individual is in line with the policy stated in 1) above.

-67-

(5) Outside Directors
1) Material concurrent positions held by Outside Directors
Such positions are shown on pages 59 to 61
2) Activities of the Outside Directors
Position
Name
Director
Tetsuro Tomita(excluding Directors
who are Audit &Supervisory
Committee
Members)

Kuniko Urano

Main activities
Mr. Tomita has attended Board Meetings and Nomination
and Compensation Advisory Committee meetings,
presented his views based on knowledge and experience incorporate management, and exercised his voting rights at
Board Meetings. Outside Directors, including Mr. Tomita,
regularly hold meetings with the Chairman, the President,
etc., to share the management challenges and exchange
opinions. Through these actions, Mr. Tomita contributes to,among others, decision-makings from various perspectives,enhancement of supervisory functions over management
and management transparency, of the Board of Directors,
thereby appropriately fulfilling the expected roles of an
Outside Director.
Board Meeting attendance rate: 93% (13 out of 14
meetings)
Nomination and Compensation Advisory Committee
meeting attendance rate: 100% (3 out of 3 meetings)
Ms. Urano has attended Board Meetings and Nomination
and Compensation Advisory Committee meetings,
presented her views based on knowledge and experience incorporate management, and exercised her voting rights at
Board Meetings. Outside Directors, including Ms. Urano,
regularly hold meetings with the Chairman, the President,
etc., to share the management challenges and exchange
opinions. Through these actions, Ms. Urano contributes to,among others, decision-makings from various perspectives,enhancement of supervisory functions over management
and management transparency, of the Board of Directors,
thereby appropriately fulfilling the expected roles of an
Outside Director.
Board Meeting attendance rate: 100% (14 out of 14
meetings)
Nomination and Compensation Advisory Committee
meeting attendance rate: 100% (3 out of 3 meeting)-68-Position
Directors who are
Audit & Supervisory
Committee Members

Name
Seiichiro Azuma

Hiroshi Yoshikawa

Masato Kitera

Main activities
Mr. Azuma has attended Board Meetings and Audit &Supervisory Committee meetings, conducted hearings on
business conditions of each Division, as well as visits to ourmajor steelworks, presented his views based on his
knowledge and experience as a certified public accountant
possessing deep familiarity with corporate accounting, andexercised his voting rights at Board Meetings. Outside
Directors, including Mr. Azuma, regularly hold meetings
with the Chairman, the President, etc., to share themanagement challenges and exchange opinions. Throughthese actions, Mr. Azuma contributes to, among others,
decision-makings from various perspectives, enhancementof audit and supervisory functions over management andmanagement transparency, of the Board of Directors,
thereby appropriately fulfilling the expected roles of an
Outside Director.
Board Meeting attendance rate: 100% (14 out of 14
meetings)
Audit & Supervisory Committee meetings attendance rate:
100% (18 out of 18 meetings)
Mr. Yoshikawa has attended Board Meetings and Audit &Supervisory Committee meetings, conducted hearings on
business conditions of each Division, as well as visits to ourmajor steelworks, presented his views based on his
knowledge and experience in economics as an expert, andexercised his voting rights at Board Meetings. Outside
Directors, including Mr. Yoshikawa, regularly holdmeetings with the Chairman, the President, etc., to share themanagement challenges and exchange opinions. Throughthese actions, Mr. Yoshikawa contributes to, among others,
decision-makings from various perspectives, enhancementof audit and supervisory functions over management andmanagement transparency, of the Board of Directors
thereby appropriately fulfilling the expected roles of an
Outside Director.
Board Meeting attendance rate: 93% (13 out of 14
meetings)
Audit & Supervisory Committee meetings attendance rate:
100% (18 out of 18 meetings)
Mr. Kitera has attended Board Meetings, Audit &Supervisory Committee meetings and Nomination andCompensation Advisory Committee meetings, conductedhearings on business conditions of each Division, as well as
visits to our major steelworks, presented his views based on
knowledge and experience regarding international affairs,
economy, culture, etc., and exercised his voting rights at
Board Meetings. Outside Directors, including Mr. Kitera,
regularly hold meetings with the Chairman, the President,
etc., to share the management challenges and exchange
opinions. Through these actions, Mr. Kitera contributes to,among others, decision-makings from various perspectives,enhancement of audit and supervisory functions overmanagement and management transparency, of the Boardof Directors, thereby appropriately fulfilling the expectedroles of an Outside Director.
Board Meeting attendance rate: 100% (14 out of 14
meetings)
Audit & Supervisory Committee meetings attendance rate:
100% (18 out of 18 meetings)
Nomination and Compensation Advisory Committee
meeting attendance rate: 100% (3 out of 3 meetings)

3) Total amount of compensation, etc.
Total amount of compensation, etc. paid to outside directors is as shown on page 64 to 65.

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5. Certain Matters concerning Accounting Auditor(1) Name
KPMG AZSA LLC(Note) NIPPON STEEL NORTH AMERICA, INC. and some other subsidiaries of the Company areaudited by audit firms other than the above-mentioned audit firm.
(2) Amount of Compensations, etc. of Accounting Auditor and Grounds for Consent to Such
Compensations, etc. by Audit & Supervisory Committee
1) Amount of compensations paid
170,000,000 yen
2) The amount of compensations payable by NIPPON STEEL and
1,171,246,099 yen
its subsidiaries to accounting auditor for its audit certification
services3) Total amount of cash and other financial benefit payable by
1,173,466,099 yen
NIPPON STEEL and its subsidiaries to accounting auditor(Note) With respect to 1) above, the compensations for audit services under the Companies
Act and the compensations for audit services under the Financial Instruments andExchange Act are not clearly distinguished and it is not practically possible todistinguish them, therefore, their total amount is shown above.
The Audit & Supervisory Committee, having confirmed the audit plan of the Accounting Auditor,
the status of execution of their duties, the data used to calculate the estimated compensation, and otherrelated matters, have determined that the compensation of the Accounting Auditor is reasonable, and havegiven their consent in accordance with Article 399, Paragraph 1 of the Companies Act.
(3) Policy regarding Decision on Dismissal or Non-Reelection of Accounting Auditor
NIPPON STEEL will dismiss the accounting auditor by unanimous consents of the Audit &Supervisory Committee Members upon occurrence of events justifying such dismissal, pursuant to laws andregulations. In addition, the Audit & Supervisory Committee shall resolve and submit proposal to dismiss or not
to reelect the accounting auditor to the General Meeting of Shareholders if any event materially interferes with
continuation of the audit services occurs.

-70-6. Outline of the Resolution Concerning Establishment and Management of the System to Ensure
Appropriateness of Business, etc. and Status of Operation of the System(1) Basic policy on internal control system (system to ensure appropriateness of business, etc.)
The resolutions made to ensure appropriateness of its business are as follows.
NIPPON STEEL is aiming at continuous improvement of its corporate value and winning the trust ofsociety under the “Corporate Philosophy of the Nippon Steel Corporation Group.” In addition, NIPPONSTEEL will establish and appropriately manage an internal control system (system to ensure appropriatenessof business, etc.) as follows to comply with applicable laws and regulations, and ensure integrity of financial
reporting, and effectiveness and efficiency of business, and will continue to improve such system in view offurther enhancement of corporate governance.
I. Matters Necessary for the Execution of Duties of the Audit & Supervisory Committee
1. Matters related to Directors and Employees to Assist the Audit & Supervisory Committee of NIPPONSTEEL in its Duties
NIPPON STEEL will establish the Audit & Supervisory Committee Members’ Office and assign fulltime employees (the “dedicated staff members”), in order to assist the Audit & Supervisory Committee inthe smooth execution of its duties. No Directors will be assigned to assist the Audit & Supervisory
Committee in its duties.
2. Matters related to the Independence of the Dedicated Staff Members from Other Directors (Excluding
Directors Who are Audit & Supervisory Committee Members) and Matters related to Ensuring theEffectiveness of Instructions of the Audit & Supervisory Committee to the Dedicated Staff Members
The dedicated staff members are full-time employees and perform their duties under the direction of
the Audit & Supervisory Committee. In addition, the Head of the Human Resources Division discusses with
the Audit & Supervisory Committee in advance the transfer and evaluation, etc. of the dedicated staff
members to ensure their independence from the executive divisions and the effectiveness of the Audit &Supervisory Committee’s instructions to the dedicated staff members.
3. System for Directors, Employees, Etc. of NIPPON STEEL and Its Subsidiaries to Report to the Audit& Supervisory Committee
The Directors (excluding Directors who are Audit & Supervisory Committee Members), Executive
Officers, General Managers, and other employees of NIPPON STEEL will report to the Audit & Supervisory
Committee in a timely and appropriate manner in accordance with laws and regulations or NIPPON STEEL’s
rules, either directly or through the related divisions such as the Internal Control & Audit Division, on thestatus of the execution of duties, the maintenance and operation of the internal control system (hereinafter
including the status of whistleblower systems.), major accidents and incidents, and other matters related torisk management. They will also report important management matters to the Board of Directors, theCorporate Policy Committees and the Risk Management Committees, and other corporate committees, andthereby share such information with the Audit & Supervisory Committee.
In addition, the directors, audit & supervisory board members, employees, etc. of each Group company
of NIPPON STEEL will report to the Audit & Supervisory Committee in a timely and appropriate mannerin accordance with laws and regulations or NIPPON STEEL’s rules and other regulations, either directly or
through the related divisions such as the Internal Control & Audit Division, on the status of the execution ofduties, the maintenance and operation of internal control systems, major accidents and incidents, and othermatters related to risk management at each Group company.
4. System to Ensure that the Person Who Made the Report Referred to in the Preceding Paragraph will
not be Treated Unfavorably for the Reason of Making Such Report
NIPPON STEEL will stipulate Rules for the Whistleblower System, which state that NIPPON STEEL
shall not unfavorably treat a person who has reported as stated in the preceding paragraph, for reasons ofsuch report, make such rules known, and implement them appropriately.
5. Matters related to the Policy for the Handling of Expenses Incurred in the Performance of Duties by
Audit & Supervisory Committee Members
NIPPON STEEL will record in its budget such expenses as it deems necessary for the execution ofduties of Audit & Supervisory Committee Members. If an Audit & Supervisory Committee Member requests
reimbursements of such expenses, NIPPON STEEL will handle them appropriately in accordance with theprovisions of the Companies Act.
-71-

6. Other Systems to Ensure that Audits by the Audit & Supervisory Committee are Conducted
Effectively
The General Manager of the Internal Control & Audit Division and the heads of each functional
division of NIPPON STEEL cooperate closely with the Audit & Supervisory Committee through means suchas exchanging opinions on the operation of the internal control system and other matters on a regular basis
or whenever necessary. In addition, NIPPON STEEL will strive to create an environment that enables the
Audit & Supervisory Committee to conduct audits in an organized and efficient manner.
II. System to Ensure that Execution of Duties by the Directors of NIPPON STEEL Complies with
Applicable Laws and Regulations and the Articles of Incorporation and Other Systems to Ensure
Appropriateness of Operation in the Corporate Group Consisting of NIPPON STEEL and its
Subsidiaries
1. System to Ensure that Performance of Responsibilities by the Directors of NIPPON STEEL Complies
with Applicable Laws and Regulations and the Articles of Incorporation.
The Board of Directors will make decisions or receive reports on important matters of management inaccordance with the Rules of the Board of Directors and other relevant internal rules.
In accordance with the resolution at the Board of Directors, each of the Executive Directors will, in
his/her assigned area, perform his/her responsibilities and supervise the performance of responsibilities of
employees, and report such supervisory status to the Board of Directors.
2. System for the Preservation and Management of Information in relation to the Performance ofResponsibilities by the Directors of NIPPON STEELNIPPON STEEL will appropriately preserve various information in relation to the performance of
responsibilities, including minutes of Meetings of the Board of Directors, by, among others, specifying
managers in charge of information preservation and management, and classifying each information by
security level, in accordance with the internal rules for information management.
NIPPON STEEL will seek to make timely and accurate disclosure of important corporate information,such as its management plan and financial information, in addition to such disclosure as required byapplicable laws and regulations.
3. Rules and Other Systems with respect to Loss-related Risk Management of NIPPON STEELThe General Manager of each division will identify and evaluate risks associated with business in
his/her division, and carry out his/her duties in accordance with the authority and responsibilities set out ininternal rules for organization and operation.
With respect to risks related to areas such as safety and health, environment and disaster prevention,
information management, intellectual properties, quality control, and integrity of financial reporting, thedivision in charge of each specific area (each functional division) will establish rules and other systems froma company-wide perspective, inform other divisions of such rules and systems, identify and evaluate thestatus of risk management at other divisions through monitoring and other methods, and provide guidance
and advice to such divisions.
Upon the occurrence of an accident, disaster, compliance issue, or other event which causes a material
effect on the management, the Executive Directors will immediately convene “Emergency Control
Headquarters” and other meetings, and take necessary actions in order to minimize the damage, impact, andother effects.
4. System to Ensure Efficiency in the Performance of Responsibilities by Directors of NIPPON STEELThe Board of Directors will make decisions on the execution of management plans and businessstrategies, as well as important business executions such as capital expenditure, and investments andprovision of loans, after such matters are deliberated by companywide Committees for relevant areas such as
ordinary budget, plant and equipment investment budget, investment and financing, and technology
development, and the Corporate Policy Committee.
The business execution under the resolution at the Board of Directors and other corporate
organizations is performed promptly by the Executive Directors, Executive Officers, and General Managers.

-72-

5. System to Ensure that Performance of Responsibilities by Employees of NIPPON STEEL Complies
with Applicable Laws and Regulations and the Articles of Incorporation
NIPPON STEEL will build and maintain an internal control system based on autonomous internal
controls.
Each General Manager will develop an autonomous internal control system in his/her Division, andstrive to ensure thorough compliance with applicable laws and regulations and internal rules, and prevent any
violation of applicable laws and regulations in business and affairs. NIPPON STEEL will also develop andenhance an employee-education system that includes regular seminars, and the creation and distribution ofmanuals for the purpose of ensuring compliance with applicable laws and regulations and internal rules.
When each General Manager becomes aware of any potentially illegal acts or facts, he or she will
immediately report such matters to the General Manager for the Internal Control & the Audit Division.
The General Manager of the Internal Control & Audit Division will confirm the status of developing
and operating company-wide internal control systems, and identify and evaluate each Division’s situation ofcompliance with applicable laws and regulations and internal rules, and take necessary measures such as
preventing violations of applicable laws and regulations and internal rules. Moreover, the General Manager
will report on such matters to the Risk Management Committee, and further report on important items amongsuch matters to the Corporate Policy Committee and the Board of Directors. The General Manager will alsoestablish and operate a whistleblower system that provides consultations and takes reports regarding risks inthe operation of business. Employees are obligated to comply with applicable laws and regulations andinternal rules and to appropriately perform their responsibilities.
Employees who violate applicable laws and regulations and internal rules will be subject todisciplinary action under the Rules of Employment.
6. System to Ensure Appropriateness of Operation in the Corporate Group Consisting of NIPPONSTEEL and its Subsidiaries
Under the “Corporate Philosophy of the NIPPON STEEL Group,” NIPPON STEEL and each Group
company will share business strategy and conduct their business in a unified manner, taking into accounteach company’s business characteristics, and will familiarize their respective employees with their respective
business operation policies and other related matters. With respect to control of the Group companies,
NIPPON STEEL will set forth basic rules in the Rules for Control of group companies, and ensure theirappropriate application.
Each Group company will build and maintain its internal control system based on autonomousinternal controls, and seek to improve measures relating to internal control through, among other measures,information sharing with NIPPON STEEL. Each responsible division of NIPPON STEEL will confirm thestatus of internal controls at each Group company, and provide assistance in its improvements, where
necessary.
The General Manager of the Internal Control & Audit Division will coordinate with each functional
division, and identify and evaluate the situation of internal control of the Group companies as a whole, andprovide guidance and advice to each responsible division and each Group company.
The specific systems under the views above are as follows.
(i)
System for Reporting to NIPPON STEEL in relation to the Performance of Responsibilities
by the Group Companies’ Directors
The responsible divisions of NIPPON STEEL will request that each Group company reporton important management matters in relation to NIPPON STEEL’s consolidated
management or each Group company’s management, including business plans, significant
business policies, and financial results, and give advice and other guidance.
(ii)

Rules and Other Systems with respect to Group Companies’ Loss-related Risk
Management
The responsible divisions of NIPPON STEEL will request that each Group company reporton the situation of risk management in each Group company, and give advice and otherguidance.
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(iii)

System to Ensure Efficiency in the Performance of Responsibilities by the Group
Companies’ Directors
The responsible divisions of NIPPON STEEL will evaluate the business performance ofeach Group company, and give support for the management.

(iv)

System to Ensure that the Performance of Responsibilities by Group Companies’ Directors
and Employees Complies with Applicable Laws and Regulations and the Articles ofIncorporation
The responsible divisions of NIPPON STEEL will request that Group companies report on
their respective situation on compliance with applicable laws and regulations, and thedevelopment and operation of internal control systems, and give necessary support, advice,and other guidance. Additionally, such divisions will request that each Group company
report on any actions and facts in such Group company that may violate applicable laws
and regulations, and promptly report to the General Manager of the Internal Control &Audit Division.

(2) Outline of status of operation
1) Operational organization
NIPPON STEEL has established an operational organization for its internal control systems.
This organization consists of the Internal Control & Audit Division (19 full-time and 22 concurrently
with their other posts), which is responsible for the internal control plan and internal audits, andfunctional divisions responsible for managing risk in each field (about 800 staff members). NIPPONSTEEL has also designated a person in charge of risk management (about 130 for NIPPON STEEL)
and a person responsible for risk management (about 550 in group companies) who are engaged inplanning and promoting autonomous internal-control activities in each division and Group company.
This organization operates the internal control system as follows.
2) Specific status of operationa) Internal control plan
In March of each year, NIPPON STEEL develops an annual plan on internal control for
NIPPON STEEL Group as a whole based on changes in the related laws and the businesscircumstances. This plan includes a basic policy, separate plans for each function, including safety,
environment, plant safety, and quality, an internal audit plan, and an education plan. Each division
and Group company creates its own plan for the fiscal year based on such annual plan developed
by NIPPON STEEL.
b) Autonomous internal control activities
In accordance with the annual plan, each division and Group company autonomously
performs internal control activities based on the characteristics of each business and its inherent
risks. Specifically, such activities include establishment, education and voluntary inspections ofoperational rules, manuals and other documentation; third-party monitoring; and improvements tooperations based on the results thereof.
Such divisions and Group companies immediately report any accidents, disasters, facts that
may violate applicable laws and regulations, etc. to the Internal Control & Audit Division, andcoordinate with the relevant divisions to take corrective measures, such as measures to prevent
recurrence. The Internal Control & Audit Division compiles case studies of such incidents andshares them within the NIPPON STEEL Group. Each division and Group company then performs
inspections for similar risks.

c) Internal audits, etc.
Internal audits confirm the status of internal controls via internal-control checklists and otherdocuments. Additionally, the Internal Control & Audit Division and each functional divisionmonitor each division and group company.
As measures to complement NIPPON STEEL’s internal controls, NIPPON STEEL also-74-

operates a hotline for internal reporting and consultations within the company and at external
professional organizations, which are open to officers and employees of NIPPON STEEL andgroup companies and their families, as well as employees of NIPPON STEEL’s suppliers andothers. In fiscal year 2023, there were 441 cases of internal reporting and consultations. NIPPONSTEEL and its major group companies regularly conduct employee awareness surveys regarding
internal controls.

d) Assessment and improvement
The Internal Control & Audit Division and each functional division report the status ofoperation of the internal control system at the quarterly meeting of the Risk Management
Committee. They also report important matters at meetings of the Corporate Policy Committee
and the Board of Directors. In addition, the status of operation of the internal control system isalso shared with each division and Group company at the meeting of the persons in charge of risk
management and the meeting of the persons responsive for risk management, which meet quarterly.
The Internal Control & Audit Division also assesses the effectiveness of its internal control
system as of the end of each fiscal year, and compiles a report of its assessment based on the status
of internal-control activities, internal audits, etc. This assessment is then reported to the Risk
Management Committee, Corporate Policy Committee, and Board of Directors.
Based on the results of these assessments, NIPPON STEEL establishes measures to improvethe effectiveness of its internal control system, and incorporates them into the next fiscal year’sinternal control plan.

e) Education and awareness raising
The Company educates officers and employees of NIPPON STEEL and those of its groupcompanies through sessions on internal controls prepared by NIPPON STEEL. The sessions
include position-specific training, and are given to everyone from new hires to executive
management. The Company also works actively to raise awareness of its approach to internal
controls, establishment of better workplace culture, and other topics through a dialog between theInternal Control & Audit Division, and each division of NIPPON STEEL, and its group companies.
f) Coordination with the Audit & Supervisory Committee and Accounting Auditor
The Internal Control & Audit Division reports the status of internal controls to the Audit &Supervisory Committee each quarter. It also reports and discusses the status of internal controls
with the Risk Management Committee with the attendance of Audit & Supervisory Committee
Members selected by the Audit & Supervisory Committee. The Internal Control & Audit Division
is also committed to sharing information and coordinating, including holding monthly liaison
meetings.
It reports and discusses such matters as the results of assessments of internal controls relating
to the status of operation of the Risk Management Committee and reporting of financial statements
to the Accounting Auditor periodically.

-75-

7.

Basic Policy regarding the Control of NIPPON STEEL

Basic Policy on the Composition of Persons to Control Decision-Making over the Financial and Business
Policies of NIPPON STEEL
Under the corporate philosophy that the NIPPON STEEL group will pursue world-leading
technologies and manufacturing capabilities, and contribute to society by providing excellent products andservices, the NIPPON STEEL group aims to improve its corporate value, and further the common interests of its
shareholders, by enhancing its competitiveness and profitability through the planning and execution ofmanagement strategies.
NIPPON STEEL believes that in the event a third party proposes the acquisition of substantial
shareholdings in NIPPON STEEL (a “Takeover Proposal”), the ultimate decision as to whether or not to accept
the Takeover Proposal should be made by the then shareholders of NIPPON STEEL. On the other hand, NIPPONSTEEL believes that such Takeover Proposals could include those with the potential to cause clear damage tothe corporate value of NIPPON STEEL or the common interests of the shareholders of NIPPON STEEL or thosewith the potential to practically coerce shareholders into selling their shares of NIPPON STEEL.
Consequently, NIPPON STEEL will pay close attention to the status of trading of shares of NIPPONSTEEL and changes of its shareholders in order to prepare for such disadvantages to the shareholders of NIPPONSTEEL in the event a Takeover Proposal is made by a third party, and, for the occasions where a Takeover
Proposal is actually made, will make efforts to enable its shareholders to make an appropriate informed judgment
based on sufficient information and with a reasonable time period to consider such proposal.
If a Takeover Proposal is reasonably judged to damage the corporate value of NIPPON STEEL, which
could result in harm to the common interests of shareholders of NIPPON STEEL, NIPPON STEEL will aim toprotect its corporate value and the common interests of its shareholders by taking prompt and appropriate
measures to the extent permitted under the then applicable laws and regulations.

(Note)
With respect to amount of money and numbers of shares expressed in this Business Report, the amount less than unit
are truncated.

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● Consolidated Financial Statements(1) Consolidated Statements of Financial Position(Millions of Yen)ASSETS

March 31, 2024

Current assets :Losses on natural disaster
Cash and cash equivalents
Losses from reorganization

LIABILITIESMarch 31, 2024

Current liabilities :448,892

Trade and other payables

1,890,718

Trade and other receivables

1,587,979

Bonds, borrowings and lease liabilities

Inventories

2,276,665

Other financial liabilities

7,036

Other financial assets

33,927

Income taxes payable

80,269Other current assets

212,919

Other current liabilities

62,353

Total current assets

4,560,384

Total current liabilities

541,495

2,581,874

Non-current liabilities :Bonds, borrowings and lease liabilities
Non-current assets :2,170,148

Other financial liabilities

146

3,380,436

Defined benefit liabilities

116,309

Right-of-use assets

100,601

Deferred tax liabilities

140,532

Goodwill

70,207

Other non-current liabilities

349,737

Intangible assets

177,853

Property, plant and equipment

Investments accounted for using the equity method

1,537,936

Total non-current liabilities

2,776,874

Total liabilities

5,358,748

Other financial assets

675,942

Defined benefit assets

127,579

Deferred tax assets

75,893

Other non-current assets

7,791 EQUITY

Total non-current assets

6,154,242

Common stock

398,914Retained earnings

3,525,585

Treasury stock(58,149)

Other components of equity

491,576

Total equity attributable to owners of the parent
Non-controlling interests

Total assets

419,799

Capital surplus

10,714,627-77-

4,777,727
578,150

Total equity

5,355,878

Total liabilities and equity

10,714,627

(2) Consolidated Statements of Profit or Loss (April 1, 2023―March 31, 2024)(Millions of Yen)
Fiscal 2023

Revenue

8,868,097

Cost of sales(7,481,331)

Gross profit

1,386,765

Selling, general and administrative expenses(730,388)

Share of profit in investments accounted for using the equity method

144,326

Other operating income

178,085

Other operating expenses(109,131)

Business profit

869,657

Losses on reorganization(90,995)

Operating profit

778,662

Finance income

21,540Finance costs(36,230)

Profit before income taxes

763,972

Income tax expense(176,074)

Profit for the year

587,898

Profit for the year attributable to :Owners of the parent

549,372

Non-controlling interests

38,526-78-

(3) Consolidated Statements of Changes in Equity
Fiscal 2023 (April 1, 2023―March 31, 2024)(Millions of Yen)
Equity attributable to owners of the parent

Other components of equity

Balance as of March 31, 2023

CommonCapitalRetained

Treasurystock

surplusearnings

stock

419,524

399,366

3,079,144

Changes in fairvalue of financial
assets measured Remeasurements
at fair value of defined benefit
through otherplans
comprehensive
income(58,054)

194,905—

126,397

15,685

126,397

15,685(33,500)(15,685)

Changes of the year
Comprehensive income
Profit for the year

549,372

Other comprehensive income
Total comprehensive income

—

—

275

275

—

549,372

Transactions with owners and others
Conversions of convertible bonds(152,117)

Cash dividends(84)

Purchases of treasury stock
1

Disposals of treasury stock

49

(729)

Changes in ownership interests in subsidiaries
Transfer from other components of equity
to retained earnings

49,186(59)

Changes in scope of consolidation
Subtotal transactions with owners and others
Balance as of March 31, 2024

275

(452)

(102,930)(94)(33,500)(15,685)

419,799

398,914

3,525,585(58,149)

287,802—

Total equity
attributable toowners of theparentNon-controllinginterests

341,173

4,181,155

465,261

4,646,417―

549,372

38,526

587,898

Equity attributable to owners of the parent
Other components of equity

Balance as of March 31, 2023

Changes in fairvalue of cash
flow hedges

Foreign exchange
differences ontranslation offoreign
operations

92,69953,568

Total

Total equity

Changes of the year
Comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income(48,486)

105,993

199,589

199,589

23,344

222,933(48,486)

105,993

199,589

748,961

61,870810,831(11,959)(164,076)

Transactions with owners and others
Conversion of convertible bonds―

550

Cash dividends―(152,117)

Purchases of treasury stock

―

(84)

Disposals of treasury stock―

51

Changes in ownership interests in subsidiaries

―

(729)

(49,186)—

Transfer from other components of equity
to retained earnings

Balance as of March 31, 2024

(84)
51
50

(679)
—

―

(59)

62,92862,868——(49,186)(152,389)

51,018(101,370)

44,212

159,561

491,576

4,777,727

578,150

5,355,878

Changes in scope of consolidation
Subtotal transactions with owners and others

550

-79-

Notes to the consolidated financial statements
I. Material accounting policies for consolidated financial statements
1. Standards for preparation of consolidated financial statements
The consolidated financial statements of the Company have been prepared in conformity with the International Financial
Reporting Standards (“IFRS”) pursuant to the provisions of Article 120, paragraph (1) of the Ordinance on Accountingof Companies. Some of the items in the consolidated financial statements required to be disclosed by IFRS have been
omitted in accordance with the provisions of the second sentence of Article 120, paragraph (1) of the Ordinance on
Accounting of Companies.
2. Scope of consolidation
Number of consolidated subsidiaries: 434 companies
Principal consolidated subsidiaries are presented in “1. Current Situations of the Nippon Steel Group, (9) Principal
Subsidiaries and Affiliates.”
In fiscal 2023, the scope of consolidation expanded by 95 companies, including 90 newly acquired companies and 4
newly established companies, etc. 21 companies—14 merged companies and 5 liquidations, etc.—were eliminated fromthe scope of consolidation in fiscal 2023.
As part of the above, the acquisition of Nippon Steel Trading Corporation on April 14, 2023, added 89 companies to thescope of consolidation.
3. Application of equity method
Number of equity-method affiliates (associates, joint operations and joint ventures): 113 companies
Principal equity-method affiliates are presented in “1. Current Situations of Nippon Steel Group, (9) Principal
Subsidiaries and Affiliates.”
During fiscal 2023, 27 companies were added to the scope of equity-method affiliates and 11 companies were removed
from the scope of equity-method affiliates.
As part of the above, the acquisition of Nippon Steel Trading Corporation on April 14, 2023, added 16 companies to thescope of equity method.
4. Accounting principles(1) Financial instruments
1) Recognition and measurement
The Group recognizes financial assets when it becomes a party to the contractual provisions of the assets.
Financial assets purchased or sold in a regular way are recognized on the trade date. Financial assets other thanderivative financial instruments are classified at initial recognition as those measured at amortized cost or at fairvalue through other comprehensive income. Financial assets measured at amortized cost and at fair value throughother comprehensive income are initially recognized at their fair value plus transaction costs that are directly
attributable to the acquisition of the assets. However, the trade receivables that do not contain a significant
financing component are recognized initially at their transaction price.
(i)Financial assets measured at amortized cost
Financial assets are classified as financial assets measured at amortized cost only if the assets are held within
the Group’s business model with an objective of collecting contractual cash flows, and if the contractual termsof the financial assets give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.
(ii)Financial assets measured at fair value through other comprehensive income
For certain equity instruments held primarily for the purpose of maintaining or strengthening business
relationship with investees, the Group designates these instruments as financial assets measured at fair value
through other comprehensive income at initial recognition.
Subsequent changes in fair value are recognized in other comprehensive income. When these financial assets
are derecognized or significant deterioration of fair value occurs, a gain or loss accumulated in othercomprehensive income is reclassified to retained earnings. Dividends from the financial assets measured atfair value through other comprehensive income are recognized in profit or loss when the Group’s right toreceive dividends is established.
2) Derecognition
Financial assets are derecognized when the contractual rights to the cash flows from the financial assets expire,or when the Group transfers the financial assets and substantially all the risks and rewards of ownership of the-80-

assets to another party.
3) Impairment of financial assets measured at amortized cost
The Group assesses expected credit loss at the end of each reporting period for the impairment of financial assets
measured at amortized cost.
The loss allowance is measured at an amount equal to the lifetime expected credit losses for trade receivables
and financial assets with a significant increase in credit risk since initial recognition.
The Group determines whether credit risk has significantly increased based on changes in the risk of a default
occurring on the financial assets. When determining whether there are changes in the risk of a default occurringon the financial assets, the Group considers the following;- Significant deterioration in the financial conditions of an issuer or a borrower;- A breach of contract, such as default or past-due payment of interest or principal; or- It has become probable that a borrower will enter into bankruptcy or other financial reorganization(2) Derivatives and hedge accounting
The Group utilizes derivatives, including foreign exchange forward contracts, interest rate swaps and currency swaps,
to hedge foreign currency risk and interest rate risk. These derivatives are initially recognized at fair value when thecontract is entered into, and are subsequently measured at fair value.
Changes in fair value of derivatives are recognized in profit or loss. However, the effective portion of cash flow
hedges is recognized in other comprehensive income.
The Group formally documents relationships between hedging instruments and hedged items, as well as its risk
management objective and strategies for undertaking various hedge transactions in an internal rule titled“Administrative Provisions on Transactions of Derivative Instruments”. The rule stipulates that derivativetransactions are conducted only for the purpose of mitigating risks arising from the Group’s principal businessactivities (including forecast transactions) and the trading of derivatives for speculative purposes is prohibited.
The Group evaluates whether the derivatives designated as a hedging instrument offsets changes in fair value or the
cash flows of the hedged items to a great extent when designating a hedging relationship and on an ongoing basis.
A hedging relationship that qualifies for hedge accounting is classified and accounted for as follows:
1) Fair value hedges
Changes in fair value of derivative as a hedging instrument are recognized in profit or loss. Changes in fair valueof a hedged item adjust the carrying amount of the hedged item and are recognized in profit or loss.
2) Cash flow hedges
The effective portion of changes in fair value of derivative as a hedging instrument is recognized in othercomprehensive income. Any ineffective portion of changes in fair value of derivative as the hedging instrument
is recognized in profit or loss.
The amount accumulated in other comprehensive income is reclassified to profit or loss when the hedgedtransactions affect profit or loss. When a hedged item results in the recognition of a non-financial asset or a nonfinancial liability, the amount recognized as other components of equity is reclassified as an adjustment of initialcarrying amount of the non-financial asset or non-financial liability.
(3) Inventories
Inventories are measured at the lower of cost or net realizable value. The cost of inventories is measured mainly
based on the weighted average method, and comprises all costs of purchasing and processing as well as other costs
incurred in bringing the inventories to their present location and condition. Net realizable value represents theestimated selling price in the ordinary course of business less the estimated costs of completion and the estimatedcosts necessary to make the sale.
(4) Property, plant and equipment
1) Recognition and measurement
Property, plant and equipment is initially measured at cost and presented at cost less accumulated depreciationand impairment losses. Acquisition cost includes costs directly attributable to the acquisition of the asset andcosts of dismantling, removing and restoration of the asset.
2) Depreciation
Depreciation of property, plant and equipment is mainly computed by the straight-line method over the estimateduseful lives of each component based on the depreciable amount. The depreciable amount is the cost of the asset
less the respective estimated residual values.
The estimated useful lives of major property, plant and equipment are as follows:-81-- Buildings:
Principally 31 years- Machinery:Principally 14 years
The depreciation methods, estimated useful lives and residual values are reviewed at the end of each reporting
period, and modified as necessary.
(5) Goodwill and intangible assets
Intangible assets are measured at cost. Intangible assets with finite useful lives are presented at cost less accumulated
amortization and impairment losses. Goodwill and intangible assets with indefinite useful lives are presented at costless accumulated impairment losses.
1) Goodwill
When the total of consideration transferred in business combinations and amount of non-controlling interests inthe acquiree exceeds the net of identifiable assets acquired and liabilities assumed on the acquisition date, theexcess amount is recognized as goodwill.
Goodwill is not amortized and is allocated to cash-generating units or groups of cash-generating units.
Regarding accounting policy for impairment of goodwill, refer to (7) “Impairment of non-financial assets”.
2) Intangible assets
Intangible assets acquired separately are measured at cost at the date of initial recognition. The costs of intangible
assets acquired in business combinations are measured at fair value at the acquisition date. Expenditures related
to internally generated intangible assets are recognized as expenses when incurred, unless development expenses
meet the criteria for capitalization.
3) Amortization
Amortization of intangible assets with finite useful lives is recognized as an expense by the straight-line method
over their estimated useful lives from the date when the assets are available for their intended use. The
amortization methods and useful lives are reviewed at the end of each reporting period, and modified as necessary.
The estimated useful lives of major intangible assets with finite useful lives are as follows:- Software:
Principally 5 years- Mining rights:
Principally 25 years
Intangible assets with indefinite useful lives and intangible assets not yet available for use are not amortized.
(6) Leases
The Group determines whether a contract is, or contains, a lease based on the substance of the contract rather thanits legal form at the commencement date of the lease.
The Group recognizes right-of-use assets and lease liabilities at the commencement date of a lease contract or acontract which is determined to contain a lease. Lease liabilities are measured at the discounted present value of thetotal lease payments that are not paid at the lease commencement date.
Right-of-use assets are initially measured at the amount of initial measurement of the corresponding lease liability,
adjusted mainly by any initial direct costs, and any prepaid lease payments, plus costs including restoration
obligations under the lease agreement. Right-of -use assets are depreciated mainly on a straight-line basis over thelease term. Finance costs are presented separately from depreciation costs on right-of-use assets on the consolidated
statements of profit or loss.
For leases with an initial term of 12 months or less and leases for which the underlying asset is of low value, theGroup applied an exemption of IFRS 16 and elected not to recognize the lease payments associated with those leases
as right-of-use assets or lease liabilities. The Group recognizes such lease payments as expenses mainly on a straightline basis over the lease term.
(7) Impairment of non-financial assets
For the non-financial assets other than inventories and deferred tax assets, the Group assesses whether there is any
indication of impairment on each asset or the cash-generating unit to which the asset belongs at the end of eachreporting period. If any indication of impairment exists, the recoverable amount of the asset or the cash-generating
unit to which the asset belongs is estimated and impairment tests are performed. Goodwill, intangible assets withindefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually andwhenever an indication of impairment exits.
The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its
value in use. When the recoverable amount of the individual asset cannot be estimated, the Group estimates therecoverable amount of the cash-generating unit or the group of cash-generating units to which the asset belongs. The-82-

value in use is calculated by discounting the estimated future cash flows to the present value, and a pre-tax discountrate that reflects the time value of money and the risks specific to the asset is used as a discount rate.
The cash flows are based on the medium- to long-term management plan and the latest business plan, which
incorporate the steel supply and demand forecast and manufacturing cost improvement as key assumptions.
Projections of steel supply and demand and manufacturing cost improvements are subject to a high degree of
uncertainty, and management's judgments regarding these factors are expected to have a material impact on future
cash flows.
An impairment loss is reversed if there are indications that an impairment loss recognized in prior periods for an
asset other than goodwill may no longer exist or may have decreased and the recoverable amount of the asset isgreater than its carrying amount. The amount to be reversed would not exceed its carrying amount that would havebeen determined had no impairment loss been recognized for the asset in prior years. An impairment loss recognized
in goodwill is not reversed.
(8) Revenue
Revenue is recognized based on the following five-steps.
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when or as the Group satisfies a performance obligation
Revenue generated from Steelmaking and Steel Fabrication segment and Chemicals and Materials segment primarily
consists of revenue generated from sale of goods while revenue generated from Engineering and Construction
segment primarily consists of construction contracts and revenue generated from System Solutions segment mainly
consists of services rendered and construction contracts (built-to-order software).
1) Performance obligations satisfied at a point in time
The Group recognizes revenue from sale of goods at the point of shipment as the customer obtains control of thegoods and therefore a performance obligation is satisfied at a point in time where the Group no longer retains
physical possession of the goods upon shipment, the Group has the right to be paid from the customer and theirlegal title is transferred to the customer.
With respect to revenue from rendering of service whose performance obligation is satisfied at a point in time, theGroup recognizes revenue when the rendering of service is completed.
Revenue is measured at the amount of consideration received or receivable less discounts and rebates.
The consideration of the transaction is primarily collected within one year after the satisfaction of its performanceobligation and it does not contain a significant financing component.
2) Performance obligations satisfied over time
The Group recognizes revenue from construction contracts and built-to-order software on the basis of progress
towards satisfaction of performance obligation as the Group transfers control over time. The progress is measured
on the basis of percentage of actual costs incurred to date to estimated total costs as it is considered that costs
incurred properly reflect the progress of the services. (input methods)
With respect to revenue from rendering of services whose performance obligation is satisfied over time, the Group
recognizes revenue evenly throughout the duration of the service.
(9) Employee benefits
Employee benefits include short-term employee benefits, retirement benefits, and other long-term employee
benefits.
1) Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are recognized as expenses
when the related service is provided.
A liability is recognized for the amount expected to be paid under short-term cash incentive plans if the Group
has a present legal or constructive obligation to pay in exchange for services provided by the employees in theprior period, and such obligation can be reliably estimated.
2) Retirement benefits
Retirement benefit plans comprise of defined benefit corporate pension plans, defined contribution plans, andlump-sum retirement payment plans. These retirement benefit plans are accounted for as follows:-83-

(i) Defined benefit corporate pension plans and lump-sum retirement payment plans
The net defined benefit liabilities or assets of defined benefit plans are recognized as the present value of
defined benefit obligations less the fair value of any plan assets. If the defined benefit plan has surplus, thedefined benefit asset is limited to the asset ceiling that is the present value of any future economic benefits
available in the form of reductions in the future contributions to the plan or cash refunds.
The present value of defined benefit obligations is calculated annually by qualified actuaries using the
projected unit credit method. The discount rates are based on the market yields of high quality corporate bonds
at the end of each reporting period that have terms consistent with the discount period, which is establishedas the estimated term of the retirement benefit obligations through to the estimated dates for payments offuture benefits.
Remeasurements of defined benefit plans are immediately recognized in other comprehensive income whenincurred and then directly transferred to retained earnings, while past service costs are recognized in profit or
loss.
(ii) Defined contribution plans
Contributions to defined contribution retirement plans are recognized as expenses in the period when theemployees render the related services.
(10) Income taxes
Income taxes comprise of current taxes and deferred taxes, and are recognized in profit or loss, except for theitems which are recognized directly in equity or other comprehensive income.
Current taxes are measured at the amounts expected to be paid or recovered from the taxation authorities using
the tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax assets and deferred tax liabilities are recognized based on future tax consequences attributable totemporary differences between the carrying amounts of assets or liabilities for accounting purposes and the tax
bases of the assets or liabilities, carryforward of unused tax losses and tax credits. Deferred tax assets arerecognized to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, unused tax losses and unused tax credits can be utilized. Deferred tax assets are reviewed
at the end of each reporting period and recognized only to the extent that it is probable that the tax benefits can berealized. However, deferred tax assets are not recognized if it arises from the initial recognition of an asset or
liability in a transaction that is not a business combination, affects neither accounting profit nor taxable profit, anddoes not give rise to equal taxable and deductible temporary differences at the time of the transaction.
Deferred tax assets arising from deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements are recognized only to the extent of the following circumstances:- The temporary difference will reverse in the foreseeable future; and- Taxable profit will be available against which the temporary difference can be utilized.
Deferred tax liabilities are recognized for all taxable temporary differences, except for the following
circumstances:- On the initial recognition of goodwill;- On the initial recognition of an asset or liability in a transaction that is not a business combination, affects
neither accounting profit nor taxable profit, and does not give rise to equal taxable and deductible temporary
differences at the time of the transaction;- Taxable temporary differences associated with investments in subsidiaries to the extent that the parent
company is able to control the timing of the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future.
The Group assesses the recoverability of deferred tax assets using all the future information available such as
projections of the future taxable profit based on the medium- to long-term management plan and the latest businessplan which incorporate the steel supply and demand forecast and manufacturing cost improvement as key
assumptions. Although the Group recognizes its deferred tax assets to the extent that it is probable that the related
tax benefits will be realized, the recoverable amount may vary depending on the factors such as the changes in
the projections of the future taxable profit in case of not achieving the goal of the medium- to long-term
management plan and business plan due to unfavorable business environment or tax reforms including the changes
in the statutory tax rate.
Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to offset current
tax assets against current tax liabilities and in either of the following circumstances:-84-

- Income taxes are levied by the same taxation authority on the same taxable entity; or- Different taxable entities intend either to settle current tax assets and current tax liabilities on a net basis, or to
realize the current tax assets and settle the current tax liabilities simultaneously.
The Group has applied International Tax Reform—Pillar Two Model Rules (Amendments to IAS 12 Income
Taxes) (announced in May 2023). With regard to the recognition and disclosure of deferred tax assets andliabilities related to Pillar Two income taxes, the exceptions set forth in these amendments are applied.
(Changes in Accounting Policies)
The Group has initially applied the following standard from the beginning of the year ended March 31, 2024.
The application of this standard does not have a material impact on the various items of the consolidated financial
statements.
Content
Standards
Name of Standards

IAS 12

Income Taxes

Amendments clarify that deferred taxes related to transactions
such as leases and decommissioning obligations(when an entity recognizes both assets and liabilities)
cannot be exempted from recognition.

5. Material accounting estimates and judgments
The preparation of consolidated financial statements in accordance with IFRS requires management to makejudgments, estimates and assumptions that affect the application of accounting policies and the reported amountsof assets, liabilities, income and expenses. However, actual results could differ from these estimates.
The estimates and their underlying assumptions are reviewed on an ongoing basis. The effects of changes inaccounting estimates are recognized prospectively in the period in which the estimates are revised.
Information about uncertainty of key estimates and assumption that may have material risks of causing material
adjustments to the carrying amount of assets and liabilities in the subsequent reporting year, particularly the
impairment of non-financial assets and the recoverability of deferred tax assets that the Group considers material,is included in the following notes.
-I. Material accounting policies for consolidated financial statements 4. Accounting principles(7) Impairment of non-financial assets-The carrying amounts in the consolidated financial statements as of the year ended March 31, 2024
Property, plant and equipment¥ 3,380,436 million
Right-of-use assets
100,601 million
Goodwill
70,207 million
Intangible assets
177,853 million
Investments accounted for using the equity method
1,537,936 million-I. Material accounting policies for consolidated financial statements 4. Accounting principles(10) Income taxes-The carrying amounts in the consolidated financial statements as of the year ended March 31, 2024
Deferred tax assets¥ 75,893 million
II. Notes to the consolidated statements of financial position
1. Assets pledged as collateral and secured debts
Assets pledged as collateralAmount(Millions of Yen)

Land

5,740

Buildings and structures

2,038

Machinery and vehicles

612

Other

10,029Total

18,420-85-

Secured debts

Amount(Millions of Yen)
630

Short-term borrowings
Other

1,028
Total

1,658

In addition to the pledged assets listed above, ¥461 million of shares of associates are pledged as collateral for affiliates’loans.
2. Inventories
Merchandise and finished goods (including semi-finished products)
Work in progress
Raw materials and supplies
3. Allowance for doubtful accounts directly deducted from assets
Trade and other receivables
Other financial assets
4. Accumulated depreciation of property, plant and equipment¥ 1,244,000 million
98,217 million
934,446 million¥ 2,325 million
10,141 million¥9,768,168 million

5. Loan guarantees
The Group provides guarantees for the bank loans of its joint ventures and associates which would require the Groupto repay the loan in the event of a default. The following amount includes reserved guarantees of loans, etc.
Guarantee for debts of joint ventures and associates¥ 429,418 million
III. Notes to the consolidated statements of profit or loss
(Business profit)
Business profit on consolidated statements of profit or loss indicates the results of sustainable business activities, and is
an important measure to compare and evaluate the Company’s consolidated performance continuously. It is defined as
being deducted cost of sales, selling general and administrative expenses and other operating expenses from revenue, andadded share of profit in investments accounted for using the equity method and other operating income. Other operating
income and expenses are composed mainly of dividend income, foreign exchange gains or losses, and losses on disposalof fixed assets.
(Losses on reorganization)
Losses on reorganization were recorded owing to business reorganization and withdrawal, and the details are described
below.
Losses on inactive facilities and others¥ 90,995 million
Losses on inactive facilities and others were mainly incurred due to termination and demolition losses based on thedecision to close the hot strip mill, pickling line, etc. of Setouchi Works Kure Area.
IV. Notes to the consolidated statements of changes in equity
1. Number and class of shares outstanding at the end of fiscal 2023
Number of shares outstanding at the end of the period (including treasury stock)
Ordinary shares
950,549,305 shares
Number of treasury stock at the end of the period
Ordinary shares
29,510,730 shares-86-

2. Dividends(1) Dividends paid
Date of resolution

Class ofshare

Total amount ofdividends(Millions of yen)

Dividends
per share (Yen)Record date

Effective date

Shareholders’ meeting
held on June 23, 2023

Ordinaryshares82,97390

March 31, 2023

June 26, 2023

Board of Directors’ meeting Ordinary
held on November 1, 2023
shares69,14375

September 30, 2023 November 30, 2023

(2) Dividends that belong to the current consolidated reporting year but become effective in the subsequentconsolidated reporting year (planned)
Date of resolution
Shareholders’ meeting
held on June 21, 2024

Class of Source of Total amount of
Dividends
dividends
share dividends (Millions of yen) per share (Yen)
Ordinary Retained
shares earnings

78,381

85

Record date

Effective date

March 31, 2024

June 24, 2024

(3) Class and number of shares to be issued upon exercise of stock acquisition rights at the end of the consolidated
fiscal year (excluding those for which the first day of the exercise period has not yet arrived).
Ordinary shares
121,244,321 shares
V. Notes to the financial instruments
1. Current status of financial instruments(1) Capital management
Under the presumption that a certain level of financial stability is maintained, the Group has capital management
policies which emphasize operational efficiency of invested capital, maximize corporate value by utilizing funds ininvestments (including investments in capital expenditure, research and development and M&A) which are expected
to generate revenue which exceeds the cost of capital to enable sustainable growth and, at the same time, meet thedemands of shareholders by providing returns to shareholders based on profits. The necessary funds to achieve thisare primarily provided through cash flows from operating activities which are generated from maintaining andenhancing the Group’s earnings power, and the Group raises funds through borrowings from banks and the issuanceof corporate bonds, as necessary.
(2) Risk management
The Group is exposed to various financial risks (market risk, credit risk and liquidity risk) arising from its businessactivities and implements risk management processes to minimize these financial risks.
1) Market risk management
A. Foreign currency risk
Trade receivables denominated in foreign currencies arising from exports of products are exposed to foreign
currency risk.
Trade payables, notes payable and other payables are, in principle, come due within one year. Certain trade
payables are denominated in foreign currencies arising from imports of raw materials and exposed to foreign
currency risk.
The Group enters into forward exchange contracts and currency swaps to hedge foreign exchange risk arisingfrom sales and capital transactions and investing and financing activities of the Group.
Derivative transactions are executed in accordance with the internal derivative transaction policy. According
to the internal derivative transaction policy, the policy for entering into a derivative transaction of financial
instruments is discussed and approved by the Financial Management Committee and reported as necessary at
the Board of Directors’ meeting. Subsequently the Financial Controller approves the implementation ofderivatives within the approved authority limits and reports that transaction amounts as well as gains or losses
arising from derivative transactions to the Financial Management Committee on a regular basis.

-87-

B. Interest rate risk
Certain bonds and long-term borrowings are floating-rates debts. The interest expenses vary depending on
interest rates.
The Group enters into interest rate swap contracts in order to mitigate the risk of interest rate fluctuations andto maintain the proportion of assets and liabilities bearing fixed and variable interest rates.
C. Market price fluctuation risk
Marketable equity instruments mainly represent the shares of trade counterparties for which are purchased tostrengthen business alliances and are exposed to market price fluctuation risk. The Group monitors the market
price on a regular basis and regularly evaluates the necessity to retain the respective investments.
2) Credit risk management
In accordance with the internal credit management policy, the Group shares customer credit records with related
departments, and provides for credit protection measures as necessary. Trade receivables, including notes andaccounts receivable, are exposed to the credit risk of customers. The Group limits transactions to customers who
are also the principal suppliers of the Group such that the trade receivables due from the customers may be offset
with the trade payables and borrowings, or to customers with high credit ratings where and the Group concludes
that there are limited credit risks.
3) Liquidity risk management
The Group manages its liquidity risk on financing activities (the risk that debts cannot be paid by the due dates) by
preparing and regularly updating a cash flow forecast based on the reports obtained from respective departments.
Furthermore, the Group has a line of credit to cover for unforeseen circumstances.
2. Fair value of financial instruments
The carrying amount and fair value of financial instruments as of March 31, 2024 are as in the following table.
The Group does not disclose the financial instruments measured at fair value in the consolidated statements of financial
position and the financial instruments with fair value being nearly equal to their carrying amount.
(Millions of Yen)
Fair value

Carrying amount
Bonds and borrowings

2,308,686

Level 1

Level 2

Level 3

647,471―

1,649,122

Notes:Classification by levels in the fair value hierarchy
Level 1: Fair value measured with quoted prices in active markets for identical assets or liabilities;
Level 2: Fair value measured using inputs that are directly or indirectly observable for assets or liabilities other thanthose in Level 1;
Level 3: Fair value measured using inputs that are not based on observable market data for assets or liabilities.
Notes:
Valuation techniques used to measure the fair value of financial instruments- The fair value of a bond is measured with reference to its market price.
- The fair value of convertible bonds with stock acquisition rights is measured at the present value discounted by theyield of similar bonds that do not have an equity conversion option.
- The fair value of a borrowing is measured at the present value of the total amounts of principal and interest
discounted by the Group’s incremental borrowing rate with a similar term.
VI. Notes to the per share information
Total equity attributable to owners of the parent per share
Basic earnings per share¥5,187.32¥596.59

VII. Notes to the material subsequent events(Exercises of the stock acquisition rights of the convertible bonds)
Between April 1, 2024 and April 30, 2024, as a result of the exercises of the stock acquisition rights, the total numberof shares outstanding increased by 911,614 shares, and common stock and capital surplus increased by ¥1,100 million
each.
-88-

VIII. Notes to the revenue recognition
1. Disaggregation of revenue(Millions of Yen)

Revenue

Steelmaking andSteel Fabrication

Engineering andConstruction

Chemicals andMaterials

System Solutions

Consolidated

8,010,655

381,600

243,327

232,513

8,868,097

Ⅸ. Business combinations
Acquisition of NIPPON STEEL TRADING CORPORATION
1. Overview(1) Name of the acquiree and the description of its business
Name of the acquiree: NIPPON STEEL TRADING CORPORATION (Nippon Steel Trading Corporation)
Description of business: Marketing and import/export of steel, industrial supply and infrastructure,
foodstuffs, textiles and others(2) Acquisition date: April 14, 2023
(3) Ratio of acquired voting equity interest
Ratio of voting rights held prior to the acquisition date: 34.54%
Ratio of voting rights after additional acquisition on the acquisition date: 70.21%
Ratio of voting rights after the company's stock consolidation and the handling of fractions of less than one
share: 80.00%(4) Primary reason for business combination
The Company Group believes that to enhance its ability to promptly and appropriately respond to structuralchanges in the global steel market, it must increase direct contact with domestic and overseas customers andenhance its ability to conduct integrated operations regarding steel transactions, and further strengthen its
competitiveness throughout the supply chain in order to ensure integrated profitability of the Company Group by
optimizing and streamlining from steel manufacturing to distribution and processing thereof, and creating new
added value. Under such understanding, the Company determined that it is desirable to make Nippon Steel
Trading Corporation a consolidated subsidiary of the Company and delist Nippon Steel Trading Corporation inorder to make the relationship between the Company and Nippon Steel Trading Corporation stronger andimplement measures with a medium- to long-term perspective.
(5) Form of control acquisition of the acquirees
Acquisition of shares for cash
2. Consideration transferred(Millions of Yen)Cash136,543
Fair value of equity interests held before the acquisition date, etc. (Note 1)
103,616
Total consideration transferred (Note 2)
240,159
Note:
1. The Company recorded a profit of 36,430 million yen as other operating income in the consolidated statements
of profit or loss as a result from fair value measurement conducted at the acquisition date of the equity
Interests of Nippon Steel Trading Corporation held prior to the acquisition date.
2. The Group recorded acquisition-related costs of 1,081 million yen as selling, general and administrative
expenses in the consolidated statements of profit and loss.

-89-

3. Fair value of the assets acquired and liabilities assumed, non-controlling interests and bargain purchase gain
The fair value of the assets acquired and liabilities assumed, non-controlling interests and bargain purchase gain has
been confirmed at the end of fiscal 2023.
(Millions of Yen)
Current assets
991,604
Non-current assets
183,003
Total assets
1,174,608
Current liabilities
690,620
Non-current liabilities
147,867
Total liabilities
838,488
Total identifiable net assets acquired
336,120
Non-controlling interests (Note 1)
89,987
Total equity attributable to owners of the parent
246,132
Total consideration transferred
240,159
Bargain purchase gain (Note 2)
5.972
Note:
1. Non-controlling interests are measured at the proportionate share of the fair value of the acquirees’ identifiable
total equity.
2. The total equity attributable to owners of the parent of 246,132 million yen, which is determined by subtracting
the non-controlling interests from the fair value of assets acquired and liabilities assumed based on reasonable
information available at the time (such as financial and assets conditions based on due diligence performed by athird-party and valuation of shares performed by a financial advisor), exceeds the consideration transferred forthe acquisition of Nippon Steel Trading Corporation of 240,159 million yen. The Group recorded a bargain
purchase gain of 5,972 million yen arising from the difference between those two as “Other operating income”
in the consolidated statements of profit or loss for the year ended March 31, 2024.
4. Net cash used in the transaction
Cash consideration transferred
Cash and cash equivalents held by the acquirees at the acquisition date
Net cash used in the transaction(Millions of Yen)
136,543(28,899)
107,643

5. Revenue and profit or loss of the acquirees after the acquisition date(Millions of Yen)
2,098,224
32,040

Revenue
Profit or loss

6. Revenue and profit or loss of the Group if the business combination had been completed at the beginning of the year
Information about revenue and profit or loss of the Groups if business combination had been completed at the
beginning of the year is not disclosed as it is immaterial to the consolidated financial statements.

-90-(For reference 1)● Consolidated Statements of Cash-Flows
Fiscal 2023 (April 1, 2023―March 31, 2024)(Millions of Yen)

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Other
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year-91-

1,010,159(710,654)(543,945)
22,922(221,518)
670,410448,892

(For reference 2)●Segment Information
Fiscal 2023 (April 1, 2023―March 31, 2024)(Millions of Yen)
Reportable segment
Steelmaking Engineering Chemicals
and SteelandandFabrication Construction Materials

SystemSolutions

Total

Adjustments Consolidated

Revenue
Revenue from external customers

8,010,655

381,600

243,327

232,513

8,868,097－

8,868,097

Inter-segment revenue or transfers

65,68927,632

17,506

79,058

189,887(189,887)－

8,076,345

409,233

260,834

311,572

9,057,985(189,887)

8,868,097

821,065(1,340)15,39035,588870,704(1,046)

869,657

Total
Segment profit(loss)<Business Profit>-92-

● Non-Consolidated Financial Statements(1) Non-Consolidated Balance Sheet(Millions of Yen)ASSETS
Current assets :Cash and bank deposits
Accounts receivable
Finished products
Semi-finished products
Work in process
Raw materials
Supplies
Advance payments-otherPrepaid expenses
Accounts receivable-other
Other
Total current assets
Fixed assets :Tangible fixed assets :Buildings (net)
Structures (net)
Machinery and equipment (net)
Vehicles (net)
Tools, furniture and fixtures (net)Land
Leased assets (net)
Construction in progress

Intangible fixed assets :Patents and utility rights
SoftwareLeased assets

Investments and others :Investments in securities
Shares of subsidiaries and affiliates
Investments in capital of subsidiaries and affiliates
Long-term loans receivable
Long-term loans receivable from subsidiaries and affiliates
Long-term prepaid expenses
Deferred tax assets
Other
Less: Allowance for doubtful accounts

Total fixed assets

LIABILITIESMarch 31, 2024

209,498
198,259
234,952
441,038
6,357
403,210
204,627
79,55936,873
125,630
13,002
1,953,012

265,633
209,072
919,309
4,816
52,464
461,833
1,559
199,753
2,114,442

1,959
93,192
91
95,244

407,319
1,534,517
52,574
4
295,393
69,74258,387
17,463(8,697)2,426,705

Current liabilities :Accounts payable
Short-term loans payable
Bonds due within one year
Current portion of lease obligations
Accounts payable-otherAccrued expenses
Income tax payable
Advances received
Deposits received
Other

353,175
242,621
199,450476
607,33154,73833,453
1,813
483,686
9,896

Total current liabilities

1,986,645

Long-term liabilities :Bonds and notes
Long-term loans payable
Lease obligations (excluding current portion)
Accrued pension and severance costs
Other

680,000
1,231,717
1,250
57,832250,977

Total long-term liabilities

2,221,778

Total liabilities

4,208,424

NET ASSETS
Shareholders' equity :Common stock
Capital surplus
Legal capital surplus
Other capital surplus

4,636,393-93-

111,807269,909

26,233
1,416,267

Total retained earnings
Less: Treasury stock, at cost
Total shareholders' equity

1,442,500(54,861)
2,189,156

Total valuation and translation adjustments

6,589,405

419,799

Total Capital surplus
Retained earnings :Other retained earnings
Reserve for advanced depreciation of fixed assets
Retained earnings carried forward

Valuation and translation adjustments :Unrealized gains on available-for-sale securities
Deferred hedge income (loss)

Total assets

March 31, 2024

381,717

188,560
3,263
191,824

Total net assets

2,380,980

Total liabilities and net assets

6,589,405

(2) Non-Consolidated Statements of Operations (April 1, 2023―March 31, 2024)(Millions of Yen)
Fiscal 2023
Operating revenues :Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating profit and loss :Non-operating profit :Interest and dividend income
Other4,876,550
4,272,460
604,089
272,392
331,697

170,837
76,347
247,184

Non-operating loss :Interest expense
Other
Ordinary profit
Extraordinary profit and loss :Extraordinary profit :Gain on contribution of securities to retirement benefit trust
Extraordinary loss :Losses on inactive facilities

18,071
107,696
125,768
453,11335,13535,13582,57382,573405,676
46,76934,671
81,441
324,235

Profit before income taxes
Income taxes - current
Income taxes - deferred
Profit for the year-94-

(3) Non-Consolidated Statements of Changes in Net Assets
Fiscal 2023 (April 1, 2023―March 31, 2024)(Millions of Yen)
Shareholders' equity
Retained earnings
Other retained earnings
Reserve
Retainedfor advanced
earnings carried
depreciation of
forwardfixed assets

Capital surplus
Commonstock

Balance as of March 31, 2023

Legalcapitalsurplus

Othercapitalsurplus419,524

111,532

275

275

Total
capitalsurplus270,305

381,837

26,385

1,243,997

Total
retainedearnings

1,270,382

Treasury stock,at costTotal shareholders'equity(54,789)

2,016,955

Changes of the year

Conversions of convertible bonds

—

550

152

—

—

275

Reversal of reserve for advanced depreciation of
fixed assets—

Cash dividends—(152,117)(152,117)(152,117)

Profit for the year—

324,235

324,235

324,235

Purchases of treasury stock

—

—

(73)

(73)

1

1

—

2

4

(396)

(396)

—

Disposals of treasury stock

Decrease by corporate division

(152)

(396)

Net changes of items
other than shareholders' equity

Total change for fiscal 2023

Balance as of March 31, 2024

275

275

(395)

(120)

(152)

172,270

172,118(71)

172,201

419,799

111,807269,909381,717

26,233

1,416,267

1,442,500(54,861)

2,189,156

Valuation and translation adjustments
Unrealized
Total
gains onvaluation
Deferred hedge
available-for-sale income (loss) and translation
securities
adjustments
Balance as of March 31, 2023

116,841

1,596

118,437

Total
net assets

2,135,393

Changes of the year

Conversions of convertible bonds

550

Reversal of reserve for advanced depreciation of
fixed assets—

Cash dividends(152,117)

Profit for the year

324,235

Purchases of treasury stock(73)

Disposals of treasury stock4

Decrease by corporate division(396)

Net changes of items
other than shareholders' equity

71,7191,666

73,38673,386

Total change for fiscal 2023

71,7191,666

73,386245,587

Balance as of March 31, 2024

188,560

3,263

191,824

2,380,980-95-

Notes to the non-consolidated financial statements
I. Material accounting policies
1. Basis and method of valuation of assets(1) Marketable securities• Shares of subsidiaries and affiliates: Stated at cost determined by the moving-average method• Available-for-sale securities:
Investments in securities other than equity securities without market prices: Stated at fair value (Net unrealized
gains or losses are comprehensively included in net assets, and the cost of securities sold is determined by themoving-average method.)
Investments in equity securities without market prices: Stated at cost determined by the moving-average method(2) Inventories• Products, semi-finished products, work in process, and raw materials: Cost accounting method based on the
periodic average method (Regarding balance sheet values, this method is designed to reduce book value when thecontribution of inventories to profitability declines.)• Supplies: Cost accounting method mainly based on the first-in, first-out method (Regarding balance sheet values,
this method is designed to reduce book value when the contribution of inventories to profitability declines)
2. Depreciation methods for fixed assets(1) Tangible fixed assets (excluding leased assets)
Depreciation of tangible fixed assets is mainly calculated using the straight-line method.
Useful lives of tangible fixed assets are generally as follows:
Buildings:
Principally 31 years
Machinery and equipment:
Principally 14 years(2) Intangible fixed assets (excluding leased assets)
Amortization of intangible fixed assets is calculated using the straight-line method.
Software products made by the Company are amortized over the projected usage periods that are of 5 years.
(3) Leased assets• Assets concerning finance leases in which ownership is not transferred to the lessee
These assets are depreciated to a residual value of zero based on the straight-line method over a useful life period
corresponding to the lease contract period.
3. Accounting basis for allowances(1) Allowance for doubtful accounts
To provide for potential losses on doubtful accounts, the allowance for doubtful accounts is computed based on thehistorical experienced default ratio for non-specific receivables, as well as the estimated irrecoverable portion of
specific doubtful receivables calculated on an individual basis.
(2) Accrued pension and severance costs
To provide for employee retirement benefits, an allowance is calculated based on projections of retirement benefit
obligations and the pension fund asset balance at the end of the fiscal year. The employee retirement benefit
obligation is computed based on the benefit formula basis using the projected retirement benefit obligation at theend of the fiscal year. Prior service cost is appropriated using the straight-line method over a specified period (10years) within the employees’ average remaining service period at the time when such costs accrues. Actuarial
differences are principally charged to expenses proportionally using the straight-line method from the fiscal year
following the year in which such differences accrue over a specified period (10 years) within the employees’ averageremaining service period at the time when such differences accrue.
4. Recognition criteria for revenue and expenses
Basic information for understanding revenue is omitted because the same information is disclosed in "Accounting
principles" included in “Notes to the consolidated financial statements.”-96-

5. Other material accounting policies for financial statements(1) Assets and liabilities denominated in foreign currencies and foreign currency translation
Monetary assets and liabilities of the Company denominated in foreign currencies are translated into yen at the spot
rate prevailing on the closing date of accounts, and the resulting foreign exchange gains or losses are recognized asincome or expenses.
(2) Method of hedge accounting
In principle, the Company applies the deferred hedging accounting method. For foreign exchange forward contracts
and currency swaps whose amounts, currency, and period meet the conditions of hedged items, the “assigning”
method is applied. In addition, for interest swaps whose amounts, index, and period meet the conditions for hedged
items, the “exceptional” method is applied.
(3) Method and period for amortization of goodwill
Goodwill is amortized using the straight-line method over the period, where it is possible to estimate such a period,
for which the excess cost is expected to have an effect on the balance sheets. Otherwise, the excess cost is amortizedproportionately over 5 years.
(4) Retirement benefit accounting policy
The accounting methods for unrecognized actuarial differences associated with the retirement benefits andunrecognized past service liability used herein differ from the methods used in the consolidated financial
statements.
(5) Application of the group tax sharing system
The Company applies the group tax sharing system.
(6) Application of Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System
The Company applies the group tax sharing system. The accounting treatment and disclosures of national and local
corporate income taxes and tax effect accounting for these are in accordance with the “Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System” (ASBJ Practical Solution No.42, August 12,2021).
6. Accounting estimates
Items of accounting estimates recorded in the financial statements for the current fiscal year that may have a material
impact on the financial statements for the following fiscal year, are as follows.
(1) Impairment of fixed assets• The carrying amounts in the financial statements as of fiscal 2023
Tangible fixed assets
Intangible fixed assets¥2,114,442 million
95,244 million• Other information that contributes to understanding of the details of accounting estimates
This information is omitted because the same information is described in "Material accounting estimates andjudgments" included in “Notes to the consolidated financial statements.”(2) The recoverability of deferred tax assets• The carrying amounts in the financial statements as of fiscal 2023
Deferred tax assets (after offsetting deferred tax liabilities)¥58,387 million• Other information that contributes to understanding of the details of accounting estimates
This information is omitted because the same information is described in "Material accounting estimates andjudgments" included in “Notes to the consolidated financial statements.”-97-II. Notes to the non-consolidated balance sheet
1. Accumulated depreciation of tangible fixed assets¥6,755,042 million

2. Contingent liabilities
The Company guarantees loans from financial institutions and other sources held by other companies.
(1) Loan Guarantee Liabilities(Outstanding amounts as of March 31, 2024)
AMNS Luxembourg Holding S.A.
¥367,986 million
AM/NS Calvert LLC
115,083
NS Architectural Steel Services
7,108
Corporation
NIPPON STEEL SPIRAL PIPE
2,271
VIETNAM CO., LTD.
Other
2,184
Total
¥494,634(Substantial amounts)¥367,986 million
60,213
7,108
2,271
2,184
¥439,764(2) Reserved guarantees of loans¥24 million(The substantial amount guaranteed is ¥24 million.)
3. Accounts receivable and payable to subsidiaries and affiliates
Short-term accounts receivable¥175,628 million
Long-term accounts receivable295,393 million
Short-term accounts payable
905,208 million
Long-term accounts payable
10,940 million
III. Notes to the non-consolidated statements of operations
Transactions with subsidiaries and affiliates
Operating transactions
Net sales
Purchases
Non-operating transactions
Proceeds from the transfer of assets, etc.
Expenditures from the transfer of assets, etc.

¥1,911,379 million
1,320,107 million¥530,028 million
146,983 million

IV. Notes to the statements of changes in net assets
Number and class of treasury stocks outstanding at the end of the fiscal year
Ordinary shares
28,415,333 shares
V. Notes to the tax-effect accounting
Deferred tax assets primarily arise from the exclusion from expenses of accrued bonus, impairment losses and losses on
inactive facilities. Deferred tax liabilities primarily arise from unrealized gains on available-for-sale securities.

-98-VI. Notes to the related party information
Subsidiaries and affiliates
Category

Name

Equityownership
percentage

Affiliate

AMNS
Luxembourg
Holding S.A.

Holding 40%
directly

Relation withrelated party

Loanguarantee

AmountDescriptionofoftransaction Accounttransaction (Millions of
Yen)
Loan
guarantee(*1)

367,986―

Resultingaccountbalances(Millions of
Yen)
―

NS
Underwriting
Canadian
Holding 100%of capital
Subsidiary―
183,648――
Resources,
directly
increaseInc.
(*2)
Terms and conditions applied to related party transactions:(*1) The Company provided a guarantee for 40% of the loan which AMNS Luxembourg Holding S.A. procured frombanks.
(*2) The Company underwrote the capital increase by the subsidiary in full.
VII. Notes to the per share information
Net assets per share
Earnings per share¥2,582.03¥351.69

VIII. Notes to the material subsequent events(Exercises of the stock acquisition rights of the convertible bonds)
This information is omitted because the same information is described in "Notes to the material subsequent events" included
in “Notes to the consolidated financial statements.”-99-

Report of Accounting Auditor on Consolidated Financial Statements (Copy)[English Translation of the Auditors’ Report Originally Issued in the Japanese Language]
Independent Auditor’s Report
May 10, 2024

Mr. Tadashi Imai
Representative Director and President
Nippon Steel Corporation
KPMG AZSA LLC
Tokyo Office
Yutaka Terasawa
Designated Limited Liability Partner
Certified Public Accountant
Hirotaka Tanaka
Designated Limited Liability Partner
Certified Public Accountant
Takahiro Toyama
Designated Limited Liability Partner
Certified Public Accountant

OpinionPursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying consolidated
financial statements, which comprise the consolidated statement of financial position, the consolidated statementof profit or loss, the consolidated statement of changes in equity and the notes to the consolidated financial
statements of Nippon Steel Corporation (the “Company”) for the fiscal year from April 1, 2023 through March
31, 2024.
In our opinion, the above consolidated financial statements present fairly, in all material respects, the financial
position and results of operations of the corporate group, which consists of the Company and its consolidated
subsidiaries, for the period covered by the consolidated financial statements in accordance with the accounting
principles prescribed in the latter part of Article 120, Paragraph 1 of the Regulation on Corporate Accounting,which omits certain disclosure items required under the designated International Financial Reporting Standards.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility
under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Consolidated Financial
Statements.” We are independent of the Company and its consolidated subsidiaries in accordance with theprovisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor.
We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit
opinion.
Other Information
The other information comprises the business report and its supplementary schedules. Management is
responsible for the preparation and presentation of the other information. The Audit & Supervisory Committee
is responsible for overseeing the Directors’ performance of their duties with regard to the design, implementationand maintenance of the reporting process for the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.

-100-Responsibilities of Management and the Audit & Supervisory Committee for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance with the accounting principles prescribed in the latter part of Article 120, Paragraph 1 of theRegulation on Corporate Accounting, which omits certain disclosure items required under the designatedInternational Financial Reporting Standards. This includes designing and operating such internal control as
management determines is necessary to enable the preparation and fair presentation of the consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing whether it isappropriate to prepare the consolidated financial statements in accordance with the premise of a going concern,and for disclosing matters relating to going concern when it is required to do so in accordance with the accounting
principles prescribed in the latter part of Article 120, Paragraph 1 of the Regulation on Corporate Accounting,which omits certain disclosure items required under the designated International Financial Reporting Standards.
The Audit & Supervisory Committee is responsible for monitoring the execution of Directors’ duties related todesigning and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to express an opinion on the
consolidated financial statements from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably expected
to, either individually or collectively, influence the decisions of users taken on the basis of the consolidated
financial statements.
We make professional judgment in the audit process in accordance with auditing standards generally acceptedin Japan, and perform the following while maintaining professional skepticism.
Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement
audit procedures to address the risks of material misstatement. The audit procedures shall be selected andapplied as determined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained
to provide a basis for the audit opinion.
In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in orderto design audit procedures that are appropriate in the circumstances, although the purpose of the audit of
the consolidated financial statements is not to express an opinion on the effectiveness of the entity’s internal
control.
Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and the adequacyof related notes.
Determine whether it is appropriate for management to prepare the consolidated financial statements on thepremise of a going concern and, based on the audit evidence obtained, determine whether there is asignificant uncertainty in regard to events or conditions that may cast significant doubt on the entity’s ability
to continue as a going concern. If there is a significant uncertainty concerning the premise of a going
concern, the auditor is required to call attention to the notes to the consolidated financial statements in theaudit report, or if the notes to the consolidated financial statements pertaining to the significant uncertainty
are inappropriate, issue a modified opinion on the consolidated financial statements. While the conclusionsof the auditor are based on the audit evidence obtained up to the date of the audit report, depending on
future events or conditions, an entity may be unable to continue as a going concern.
Besides assessing whether the presentation of and notes to the consolidated financial statements are inaccordance with the accounting principles prescribed in the latter part of Article 120, Paragraph 1 of theRegulation on Corporate Accounting, which omits certain disclosure items required under the designatedInternational Financial Reporting Standards, assess the presentation, structure, and content of theconsolidated financial statements including related notes, and whether the consolidated financial statements
fairly present the transactions and accounting events on which they are based.
Obtain sufficient and appropriate audit evidence regarding the financial information of the Company andits consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The
auditor is responsible for instructing, supervising, and implementing the audit of the consolidated financial
statements, and is solely responsible for the audit opinion.
The auditor reports to the Audit & Supervisory Committee regarding the scope and timing of implementation of
the planned audit, material audit findings including material weaknesses in internal control identified in thecourse of the audit, and other matters required under the auditing standards.
The auditor provides the Audit & Supervisory Committee with a statement that the auditor has complied with
relevant ethical requirements regarding independence, and communicate with them all relationships and other-101-matters that may reasonably be thought to bear on our independence, and where applicable, actions taken toeliminate threats or safeguards applied.
Interest
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries requiring
disclosure under the provisions of the Certified Public Accountants Act of Japan.

-102-

Report of Accounting Auditor on Non-Consolidated Financial Statements (Copy)[English Translation of the Auditors’ Report Originally Issued in the Japanese Language]
Independent Auditor’s Report
May 10, 2024
Mr. Tadashi Imai
Representative Director and President
Nippon Steel Corporation
KPMG AZSA LLC
Tokyo Office
Yutaka Terasawa
Designated Limited Liability Partner
Certified Public Accountant
Hirotaka Tanaka
Designated Limited Liability Partner
Certified Public Accountant
Takahiro Toyama
Designated Limited Liability Partner
Certified Public Accountant

OpinionPursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the accompanying financial
statements, which comprise the balance sheet, the statement of income, the statement of changes in net assets
and the related notes, and the accompanying supplementary schedules of Nippon Steel Corporation (the“Company”) for the 99th fiscal year from April 1, 2023 through March 31, 2024.
In our opinion, the financial statements and the accompanying supplementary schedules referred to above present
fairly, in all material respects, the financial position of the Company as of March 31, 2024, and the results of its
operations for the year then ended in conformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility
under the auditing standards is stated in “Auditor’s Responsibility for the Audit of the Financial Statements andthe Accompanying Supplementary Schedules.” We are independent of the Company in accordance with theprovisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor.
We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit
opinion.
Other Information
The other information comprises the business report and its supplementary schedules. Management is
responsible for the preparation and presentation of the other information. The Audit & Supervisory Committee
is responsible for overseeing the Directors’ performance of their duties with regard to the design, implementationand maintenance of the reporting process for the other information.
Our opinion on the financial statements and the accompanying supplementary schedules does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements and the accompanying supplementary schedules, our
responsibility is to read the other information and, in doing so, consider whether the other information ismaterially inconsistent with the financial statements and the accompanying supplementary schedules or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit & Supervisory Committee for the Financial Statements
and the Accompanying Supplementary Schedules
Management is responsible for the preparation and fair presentation of the financial statements and theaccompanying supplementary schedules in accordance with accounting principles generally accepted in Japan,
and for designing and operating such internal control as management determines is necessary to enable thepreparation and fair presentation of the financial statements and the accompanying supplementary schedules thatare free from material misstatement, whether due to fraud or error.

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In preparing the financial statements and the accompanying supplementary schedules, management is
responsible for assessing whether it is appropriate to prepare the financial statements and the accompanying
supplementary schedules in accordance with the premise of a going concern, and for disclosing matters relating
to going concern when it is required to do so in accordance with accounting principles generally accepted inJapan.
The Audit & Supervisory Committee is responsible for monitoring the execution of Directors’ duties related todesigning and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Financial Statements and the Accompanying Supplementary
Schedules
Our responsibility is to obtain reasonable assurance about whether the financial statements and theaccompanying supplementary schedules as a whole are free from material misstatement, whether due to fraud
or error, and to express an opinion on the financial statements and the accompanying supplementary schedules
from an independent standpoint in an audit report, based on our audit. Misstatements can occur as a result offraud or error, and are deemed material if they can be reasonably expected to, either individually or collectively,
influence the decisions of users taken on the basis of the financial statements and the accompanying
supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally acceptedin Japan, and perform the following while maintaining professional skepticism.
Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement
audit procedures to address the risks of material misstatement. The audit procedures shall be selected andapplied as determined by the auditor. In addition, sufficient and appropriate audit evidence shall be obtained
to provide a basis for the audit opinion.
In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in orderto design audit procedures that are appropriate in the circumstances, although the purpose of the audit of
the financial statements and the accompanying supplementary schedules is not to express an opinion on theeffectiveness of the entity’s internal control.
Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and the adequacyof related notes.
Determine whether it is appropriate for management to prepare the financial statements and theaccompanying supplementary schedules on the premise of a going concern and, based on the audit evidence
obtained, determine whether there is a significant uncertainty in regard to events or conditions that may castsignificant doubt on the entity’s ability to continue as a going concern. If there is a significant uncertainty
concerning the premise of a going concern, the auditor is required to call attention to the notes to thefinancial statements and the accompanying supplementary schedules in the audit report, or if the notes tothe financial statements and the accompanying supplementary schedules pertaining to the significant
uncertainty are inappropriate, issue a modified opinion on the financial statements and the accompanying
supplementary schedules. While the conclusions of the auditor are based on the audit evidence obtained up
to the date of the audit report, depending on future events or conditions, an entity may be unable to continue
as a going concern.
Besides assessing whether the presentation of and notes to the financial statements and the accompanying
supplementary schedules are in accordance with accounting principles generally accepted in Japan, assess
the presentation, structure, and content of the financial statements and the accompanying supplementaryschedules including related notes, and whether the financial statements and the accompanying
supplementary schedules fairly present the transactions and accounting events on which they are based.
The auditor reports to the Audit & Supervisory Committee regarding the scope and timing of implementation of
the planned audit, material audit findings including material weaknesses in internal control identified in thecourse of the audit, and other matters required under the auditing standards.
The auditor provides the Audit & Supervisory Committee with a statement that the auditor has complied with
relevant ethical requirements regarding independence, and communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, actions taken toeliminate threats or safeguards applied.
Interest
Our firm and engagement partners have no interests in the Company requiring disclosure under the provisionsof the Certified Public Accountants Act of Japan.

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Report of Audit & Supervisory Committee on Business Report and other issues, Consolidated Financial
Statements and Non-Consolidated Financial Statements (Copy)[English Translation of the Audit & Supervisory Committee Members’ Report Originally Issued in theJapanese Language]

Audit Report
The Audit & Supervisory Committee has audited the performance of duties by Directors of Nippon SteelCorporation (“NIPPON STEEL”) for the 99th fiscal year from April 1, 2023 to March 31, 2024. The Audit &Supervisory Committee hereby reports the method and result of its audit as follows:
1. Auditing Method and Details Thereof
The Audit & Supervisory Committee received explanations from the Directors and other relevant personnel on
the details of the resolutions of the Board of Directors concerning matters listed in Article 399-13, Paragraph 1,
Item 1 (b) and (c) of the Companies Act and the status of establishment and operation of the frameworks
established based on such resolutions (hereinafter referred to as the “Internal Control System”), and scrutinized
the explanations and expressed opinion thereon, and conducted an audit in the following manner. With respect
to the internal control on financial reporting, each Audit & Supervisory Committee Member received a reporton the assessment of such internal control and auditing thereof also from KPMG AZSA LLC and sought
explanations as necessary.
(1) In compliance with the standards for the Audit & Supervisory Committee’s audits, which was establishedby the Audit & Supervisory Committee, and in accordance with auditing policy, the audit plan, and theassignment of duties, etc., the Audit & Supervisory Committee Members defined the status of establishment
and operation of the Internal Control System and the status of promotion of various measures for theManagement Plan as priority audit items, cooperated closely with the department in charge of internal audits,
attended meetings of the Board of Directors, management meetings and other meetings, received reports
from Directors, employees and other relevant personnel regarding the status of execution of their duties,
sought explanations as necessary, inspected important documents, and examined the operations and financial
position of NIPPON STEEL at the Head Office and Works of NIPPON STEEL. As for the subsidiaries of
NIPPON STEEL, each Director and Audit & Supervisory Committee Member endeavored to keep
communication and shared information with the Audit & Supervisory Board Members and other related
personnel of the subsidiaries, and received reports from the subsidiaries regarding their businesses andsought explanations as necessary.
(2) As for the Basic Policy on the Composition of Persons to Control Decision-Making over the Financial andBusiness Policies of NIPPON STEEL as described in the Business Report, each Audit & Supervisory
Committee Member examined its contents based on discussions at the Meetings of Board of Directors andother relevant meetings.
(3) The Audit & Supervisory Committee Members confirmed whether the Accounting Auditor maintained its
independence and implemented appropriate audits, as well as received reports from the Accounting Auditor
regarding the performance of its duties and sought explanations as necessary. The Audit & Supervisory
Committee Members also received notification from the Accounting Auditor that system for ensuring
appropriate execution of the duties of the Accounting Auditor has been prepared and sought explanations asnecessary.
Based on the foregoing method, the Audit & Supervisory Committee Members reviewed the Business Reportfor this fiscal year and the supplementary schedules thereof, the non-consolidated financial statements for thisfiscal year (non-consolidated balance sheet, non-consolidated statement of operations, non-consolidated
statement of changes in net assets and the related notes) and supplementary schedules as well as the consolidated
financial statements for this fiscal year (consolidated statements of financial position, consolidated statements
of profit or loss, consolidated statements of changes in equity and the related notes).
2. Audit Results(1) Audit Results on the Business Report, etc.
1) In our opinion, the Business Report and the supplementary schedules fairly represent NIPPON STEEL’scondition in conformity with the applicable laws and regulations of Japan as well as the Articles ofIncorporation of NIPPON STEEL.
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2) We have found no evidence of misconduct or material facts in violation of the applicable laws andregulations, nor of any violation with respect to the Articles of Incorporation of NIPPON STEEL, related
to performance of duties by the Directors.
3) In our opinion, the content of the resolutions of the Board of Directors regarding the Internal Control
System is appropriate, and we have found no matters to remark in regard to the implementation thereof,
including internal control on financial reporting. In addition, we have found no matters to remark inregard to the description in the Business Report relating to the internal control system.
4) We have found no matters to remark in regard to the Basic Policy on the Composition of Persons toControl Decision-Making over the Financial and Business Policies of NIPPON STEEL as described in
the Business Report.
(2) Results of Audit of the Non-Consolidated Financial Statements and Supplementary Schedules
In our opinion, the method and the results of the audit used and conducted by KPMG AZSA LLC, the
Accounting Auditor, are appropriate.
(3) Results of Audit of the Consolidated Financial Statements
In our opinion, the method and the results of the audit used and conducted by KPMG AZSA LLC, the
Accounting Auditor, are appropriate.

May 14, 2024
The Audit & Supervisory Committee of Nippon Steel Corporation
Senior Audit & Supervisory Committee Member(full-time)
Audit & Supervisory Committee Member (full-time)
Audit & Supervisory Committee Member
Audit & Supervisory Committee Member
Audit & Supervisory Committee Member(Note)

Shozo Furumoto (Seal)
Masayoshi Murase (Seal)
Seiichiro Azuma (Seal)
Hiroshi Yoshikawa (Seal)
Masato Kitera (Seal)

Audit & Supervisory Committee Members, Seiichiro Azuma, Hiroshi Yoshikawa and Masato Kitera
are Outside Directors as stipulated in Article 2, Item 15 and Article 331, Paragraph 6 of theCompanies Act.

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Report of Audit & Supervisory Committee on Business Report and other issues, Consolidated Financial
Statements and Non-Consolidated Financial Statements (Copy)[English Translation of the Audit & Supervisory Committee Members’ Report Originally Issued in theJapanese Language]

Audit Report
The Audit & Supervisory Committee has audited the performance of duties by Directors of Nippon SteelCorporation (“NIPPON STEEL”) for the 99th fiscal year from April 1, 2023 to March 31, 2024. The Audit &Supervisory Committee hereby reports the method and result of its audit as follows:
1. Auditing Method and Details Thereof
The Audit & Supervisory Committee received explanations from the Directors and other relevant personnel on
the details of the resolutions of the Board of Directors concerning matters listed in Article 399-13, Paragraph 1,
Item 1 (b) and (c) of the Companies Act and the status of establishment and operation of the frameworks
established based on such resolutions (hereinafter referred to as the “Internal Control System”), and scrutinized
the explanations and expressed opinion thereon, and conducted an audit in the following manner. With respect
to the internal control on financial reporting, each Audit & Supervisory Committee Member received a reporton the assessment of such internal control and auditing thereof also from KPMG AZSA LLC and sought
explanations as necessary.
(1) In compliance with the standards for the Audit & Supervisory Committee’s audits, which was establishedby the Audit & Supervisory Committee, and in accordance with auditing policy, the audit plan, and theassignment of duties, etc., the Audit & Supervisory Committee Members defined the status of establishment
and operation of the Internal Control System and the status of promotion of various measures for theManagement Plan as priority audit items, cooperated closely with the department in charge of internal audits,
attended meetings of the Board of Directors, management meetings and other meetings, received reports
from Directors, employees and other relevant personnel regarding the status of execution of their duties,
sought explanations as necessary, inspected important documents, and examined the operations and financial
position of NIPPON STEEL at the Head Office and Works of NIPPON STEEL. As for the subsidiaries of
NIPPON STEEL, each Director and Audit & Supervisory Committee Member endeavored to keep
communication and shared information with the Audit & Supervisory Board Members and other related
personnel of the subsidiaries, and received reports from the subsidiaries regarding their businesses andsought explanations as necessary.
(2) As for the Basic Policy on the Composition of Persons to Control Decision-Making over the Financial andBusiness Policies of NIPPON STEEL as described in the Business Report, each Audit & Supervisory
Committee Member examined its contents based on discussions at the Meetings of Board of Directors andother relevant meetings.
(3) The Audit & Supervisory Committee Members confirmed whether the Accounting Auditor maintained its
independence and implemented appropriate audits, as well as received reports from the Accounting Auditor
regarding the performance of its duties and sought explanations as necessary. The Audit & Supervisory
Committee Members also received notification from the Accounting Auditor that system for ensuring
appropriate execution of the duties of the Accounting Auditor has been prepared and sought explanations asnecessary.
Based on the foregoing method, the Audit & Supervisory Committee Members reviewed the Business Reportfor this fiscal year and the supplementary schedules thereof, the non-consolidated financial statements for thisfiscal year (non-consolidated balance sheet, non-consolidated statement of operations, non-consolidated
statement of changes in net assets and the related notes) and supplementary schedules as well as the consolidated
financial statements for this fiscal year (consolidated statements of financial position, consolidated statements
of profit or loss, consolidated statements of changes in equity and the related notes).
2. Audit Results(1) Audit Results on the Business Report, etc.
1) In our opinion, the Business Report and the supplementary schedules fairly represent NIPPON STEEL’scondition in conformity with the applicable laws and regulations of Japan as well as the Articles ofIncorporation of NIPPON STEEL.
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2) We have found no evidence of misconduct or material facts in violation of the applicable laws andregulations, nor of any violation with respect to the Articles of Incorporation of NIPPON STEEL, related
to performance of duties by the Directors.
3) In our opinion, the content of the resolutions of the Board of Directors regarding the Internal Control
System is appropriate, and we have found no matters to remark in regard to the implementation thereof,
including internal control on financial reporting. In addition, we have found no matters to remark inregard to the description in the Business Report relating to the internal control system.
4) We have found no matters to remark in regard to the Basic Policy on the Composition of Persons toControl Decision-Making over the Financial and Business Policies of NIPPON STEEL as described in
the Business Report.
(2) Results of Audit of the Non-Consolidated Financial Statements and Supplementary Schedules
In our opinion, the method and the results of the audit used and conducted by KPMG AZSA LLC, the
Accounting Auditor, are appropriate.
(3) Results of Audit of the Consolidated Financial Statements
In our opinion, the method and the results of the audit used and conducted by KPMG AZSA LLC, the
Accounting Auditor, are appropriate.

May 14, 2024
The Audit & Supervisory Committee of Nippon Steel Corporation
Senior Audit & Supervisory Committee Member(full-time)
Audit & Supervisory Committee Member (full-time)
Audit & Supervisory Committee Member
Audit & Supervisory Committee Member
Audit & Supervisory Committee Member(Note)

Shozo Furumoto (Seal)
Masayoshi Murase (Seal)
Seiichiro Azuma (Seal)
Hiroshi Yoshikawa (Seal)
Masato Kitera (Seal)

Audit & Supervisory Committee Members, Seiichiro Azuma, Hiroshi Yoshikawa and Masato Kitera
are Outside Directors as stipulated in Article 2, Item 15 and Article 331, Paragraph 6 of theCompanies Act.

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NIPPON STEEL CORPORATION GROUP Corporate Philosophy
Our Values
Nippon Steel Corporation Group will pursue world-leading technologies and manufacturing capabilities, andcontribute to society by providing excellent products and services.
Management Principles
1. We continue to emphasize the importance of integrity and reliability in our actions.
2. We provide products and services that benefit society, and grow in partnership with our customers.
3. We pursue world-leading technologies and manufacturing capabilities.
4. We continually anticipate and address future changes, innovative from within, and pursue unending progress.
5. We develop and bring out the best in our people to make our Group rich with energy and enthusiasm.

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Shareholder Reference Information
Fiscal year end

March 31 each year

General Meeting of Shareholders

Latter part of June each year

Record date for the General Meeting of
Shareholders

Shareholders entitled to exercise the right at theGeneral Meeting of Shareholders shall be those whoare electronically recorded as having the voting
rights in the latest Register of Shareholders of March
31 each year.

Record date for dividends

NIPPON STEEL may distribute its surplus to theshareholders or pledgees of shares registered in thelatest Register of Shareholders as of March 31,
September 30 and such other date as determined by
the Board of Directors.

Website for electronic public notices

https://www.nipponsteel.com/index.html

Articles of Incorporation and Regulations
Relating to Shares

Articles of Incorporation and Regulations Relating toShares are posted on NIPPON STEEL’s website
under “Investor Relations.”

Registration agent

Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo,
Japan

Place of business of registration agent(Mailing address and telephone enquiries)

Sumitomo Mitsui Trust Bank, Limited,
Stock Transfer Agency Business Planning
Department
8-4, Izumi 2-chome, Suginami-ku, Tokyo, 1680063, Japan
Telephone number designated for NIPPON STEEL’s
shareholders:0120-785-401 (toll free within Japan)
Main number of transfer agent:
0120-782-031 (toll free within Japan)

Change of address, and request for sale and purchase of shares less than one unit
Please contact and consult with the securities firm in where you have an account.
Shareholders for whom special accounts have been opened due to their lack of an account in asecurities firm should contact Sumitomo Mitsui Trust Bank, Limited, our administrator of the special
accounts.
Payment of accrued dividends
Please contact Sumitomo Mitsui Trust Bank, Limited, our registration agent.
Fees concerning sale and purchase of less than one unit of shares
Charged at the amount specified separately (please refer to “Investor Relations” on NIPPON STEEL’s
website).
Nippon Steel Corporation
6-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8071
Tel.: +81-3-6867-4111
https://www.nipponsteel.com/en/index.html-110-