To Our Shareholders
We would like to take this opportunity to express our heartfelt appreciation to you for your continued support
of PACIFIC METALS CO., LTD.
We hereby report the overview of the Group’s business for the 98th fiscal year (from April 1, 2023 to March
31, 2024).
May 2024
Masayuki Aoyama
President & Representative Director
Company Philosophy
Leverage the power of people to deliver the earth’s resources in more useful forms and contribute to thehappiness of humankind
Company Policy
1. Integrate the management strategies of the entire Group to maximize the synergy effects of each Group
company.
2. Focus on the development and quality improvement of world-class smelting technology, and establish theworld-leading platform for management efficiency and competitiveness.
3. Promote compliance.
4. Secure appropriate profits through fair, transparent and free competition.
5. Actively tackle all environmental problems to protect the irreplaceable earth.
6. To develop the individuality of employees and fully demonstrate their creativity, pursue a sense of comfort
and affluence both physically and mentally, and realize a rewarding workplace.
7. Promote wide-ranging exchanges with society and actively disclose fair corporate information.

-1-

Note: This document has been translated from a part of the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, the original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translation.
(Securities Code 5541)
May 31, 2024
To Shareholders with Voting Rights:
Masayuki Aoyama
President & Representative Director
PACIFIC METALS CO., LTD.
6-1, Otemachi 1-Chome, Chiyoda-ku,
Tokyo, JapanNOTICE OF CONVOCATION OF
THE 98TH ANNUAL GENERAL SHAREHOLDERS MEETING
We would like to express our appreciation for your continued support and patronage.
Please be informed that the 98th Annual General Shareholders Meeting of PACIFIC METALS CO., LTD.
(the “Company”) will be held for the purposes as described below.
In convening this year’s Annual General Shareholders Meeting, the Company has taken measures forelectronic provision of information contained in the reference documents for the General Shareholders Meetingand posted the information on the Company’s website below. Please access the website below and refer to thenotice. In addition to the Company’s website, the notice is also posted on the website of the Tokyo Stock
Exchange (TSE) and the Portal of Shareholders’ Meeting provided by Sumitomo Mitsui Trust Bank.
No.
1

Website and URL
The Company’s website
https://www.pacific-metals.co.jp/en/ir/else.php2

Listed Company Search (Tokyo Stock Exchange)
https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show

3

The Portal of Shareholders’ Meeting (Sumitomo Mitsui Trust Bank)
https://www.soukai-portal.net(in Japanese)

Access method
Click “Notice of Convocation of the 98th
Annual General Shareholders Meeting”
under the headline “THE 98TH.”
Enter “Pacific Metals” in the “Issue name(company name)” field or the Company’s
securities code “5541” in the “Code” fieldand click “Search,” select “Basic
information,” then “Documents for public
inspection/PR information,” and select the
Notice.
Scan the QR code on the enclosed Voting
Form, or enter your ID and initial password
that are also printed on the enclosed Voting
Form.
.

If you do not attend the meeting, you may exercise your voting rights via the Internet, etc. or in writing. Please
review the Reference Documents for the General Shareholders Meeting (contained in the electronically provided
information) and, following the instructions stated in the Guide to Exercising Voting Rights below (Japaneseoriginal), exercise your voting rights by 5:30 p.m. Japan time on Thursday, June 20, 2024.

-2-

1. Date and Time:
2. Place:

Friday, June 21, 2024 at 10:00 a.m. Japan time
Iidabashi Rainbow Building (7F) located at
11 Ichigayafunagawaramachi, Shinjuku-ku, Tokyo

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for the Company’s
98th Fiscal Year (April 1, 2023 - March 31, 2024) and results of audits of theConsolidated Financial Statements by the Accounting Auditor and the Board
of Auditors
2. Non-consolidated Financial Statements for the Company’s 98th Fiscal Year
(April 1, 2023 - March 31, 2024)
Proposals to be resolved:
Partial amendments to the Articles of Incorporation
Proposal 1:
To respond to the future diversification of the Company’s business, an addition
will be made to the purposes of the Company in Article 2 (Purpose) of thecurrent Articles of Incorporation.
Proposal 2:

Election of nine (9) Directors
Proposal for the election of the following nine (9) Directors:
Reappointment
1. Masayuki Aoyama
Reappointment
2. Yoshiharu Inomata
Reappointment
3. Kenichi Hara
4. Terunobu Matsuyama Reappointment
Reappointment
5. Hiroaki Ichiyanagi
Reappointment
6. Kazuo Iwadate
Reappointment
7. Shinya Matsumoto
Reappointment
8. Hikari Imai
Reappointment
9. Yukari Sakai

Proposal 3:

Election of one (1) Auditor
Proposal for the election of the following one (1) Auditor:
Kyosuke Miyazaki New candidate

4. Matters determined forconvocation







(1) If you exercise your voting rights by proxy, the proxy must submit your
Voting Rights Exercise Form and the letter of attorney. You may appoint
only one proxy.
(2) If neither a vote for nor against a proposal is indicated on the Voting
Rights Exercise Form, it shall be deemed a vote for.
(3) If you exercise your voting rights in duplicate via the Internet, etc. and inwriting, the vote that arrives at the Company later shall be deemed valid.
However, if both of them arrive on the same day, the voting rights
exercised via the Internet, etc. shall be deemed valid. If you exercise yourvoting rights more than once via the Internet, etc., the last vote exercised
shall be deemed as valid.

The reception desk at the venue is scheduled to open at 9:00 a.m. When attending the meeting, please submit
the enclosed Voting Rights Exercise Form to the reception desk
The documents sent to shareholders who requested the paper copy do not include Consolidated Statementof Changes in Equity, Notes to Consolidated Financial Statements, Non-consolidated Statement of Changes
in Equity and Notes to Non-consolidated Financial Statements in accordance with provisions of laws andregulations as well as Article 17 of the Company’s Articles of Incorporation. Therefore, the said documents
are part of the documents audited by Auditors and the Accounting Auditor when they prepared theirrespective audit reports.
If there are any revisions in the matters provided electronically, the matters before revision and the mattersafter the revision will be posted on the Company’s website, the TSE website, and the Shareholders’ Meeting
web portal (Japanese only).
Please note that any of these websites may be temporarily inaccessible due to scheduled maintenance orother reasons. If you are unable to access one of the websites indicated, please access a different website
or wait for a while and try again.

-3-

Reference Documents for the General Shareholders Meeting
Proposals and References
Partial amendments to the Articles of Incorporation
Proposal 1:
1. Reason for amendment
To respond to the future diversification of the Company’s business, an addition will be made to the purposesof the Company in Article 2 (Purpose) of the current Articles of Incorporation.
2. Details of amendment
The details of the amendment are as follows. (Amended parts are underlined.)

Current Articles of Incorporation

Proposed Amendment(Purpose)(Purpose)

Article 2

Article 2

The purposes of the Company shall be to engage (Unchanged)
in the following businesses:
1. – 10. (Omitted)

1. – 10. (Unchanged)(Newly established)

11. Sale, purchase, procurement, and supply ofelectricity

11. – 13. (Omitted)

12. – 14. (Unchanged)-4-

Proposal 2:

Election of nine (9) Directors

The terms of office of all nine (9) Directors will expire at the conclusion of this year’s Annual General
Shareholders Meeting. Accordingly, the election of nine (9) Directors is proposed. The candidates are as
follows.
Details about each candidate such as career summary, reason for nomination and other information arestated on pages 6-11.
No.

Name

GenderTermofofficePosition

Responsibilities

Attendance atBoard ofDirectors meeting

Male

10
years

President Director

Representative Director
Member of Nomination andCompensation Committee

22 out of 22
meetings(100.0%)

Director & Senior
Managing
Executive Officer

Assistant to the President,
In charge of Corporate
Planning, Recycling Business& Technology Development

22 out of 22
meetings(100.0%)In charge of Procurement,
General Manager of Sales &Marketing Dept.

22 out of 22
meetings(100.0%)1

Masayuki
Aoyama2

Yoshiharu
Inomata

Reappointment

Male

7
years

3

Kenichi Hara

Reappointment

Male

6
years

Director &Managing
Executive Officer

Reappointment

In charge of Internal Control,
IR, General Administration,
Finance & Accounting, General
Manager of Personnel & Labor
Relation Dept.
In charge of Quality Control &Environmental Management,
General Manager, Resources &Technology Development
Project Dept.
In charge of Safety & HealthManagement, Utility &Maintenance and Production,
General Manager of Business
Process Reengineering Dept.

22 out of 22
meetings(100.0%)

4

Terunobu
Matsuyama

Reappointment

Male

6
years

Director &Managing
Executive Officer

5

HiroakiIchiyanagi

Reappointment

Male

4
years

Director & Senior
Executive Officer

6

Kazuo
IwadateReappointment

Male

4
years

Director & Senior
Executive Officer

7

ShinyaMatsumoto

Reappointment
OutsideIndependent

Male

11
years

Outside Director

Chairperson of Nomination andCompensation Committee

22 out of 22
meetings(100.0%)8

Hikari Imai

Reappointment
OutsideIndependent

Male

8
years

Outside Director

Member of Nomination andCompensation Committee

21 out of 22
meetings(95.5%)

9

Yukari Sakai

Reappointment
OutsideIndependent

Female3years

Outside Director

Member of Nomination andCompensation Committee

22 out of 22
meetings(100.0%)Note: Term of office, position and responsibilities are as at the time of this Annual General Shareholders Meeting.

Reappointment: Candidate for Director to be reappointed
Outside: Candidate for Outside Director
Independent: Independent Director-5-22 out of 22
meetings(100.0%)22 out of 22
meetings(100.0%)

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1975

Joined the Company

December 2004

May 2010

Deputy General Manager, Utility &Maintenance Dept., Production Div. andManager, Electric Power Sec.
Associate General Manager, Utility &Maintenance Dept., Production Div.
General Manager, Utility & MaintenanceDept., Production Div.
Director, Pacific Energy Center Co., Ltd.

June 2011

Executive Officer

June 2014

Director, Rio Tuba Nickel Mining Corporation

June 2014

Director, Taganito Mining Corporation

June 2014

Director

June 2014

Senior Executive Officer

June 2014

General Manager, Production Div.

May 2017

President & Representative Director, Pacific
Gas Center Co., Ltd.
Managing Executive Officer

December 2008
April 2009

Masayuki Aoyama(December 7, 1954)

1

June 2018
July 2019

Reason for nomination as
candidate for Director

Number ofshares of theCompany
held

5,900

In charge of Business Process Reengineering,
Production and Recycling Business
June 2020
President & Representative Director (topresent)
May 2021
Member of Nomination and Compensation
Committee (to present)
The Company nominated Masayuki Aoyama as a candidate for Director because hehas experience in engaging in the creation of new ferronickel manufacturing
technologies/facilities and maintenance of existing ones and dealing in electric
power facilities, etc., and is also involved in the management of affiliates in Japanand overseas, and we determined that he has the experience and abilities suited to achief executive officer of the Company by leveraging such experience and trackrecord.

-6-

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1975

Joined the Company

December 2004

Yoshiharu Inomata(June 6, 1954)

2

Reason for nomination as
candidate for Director

Number ofshares of theCompany
held

Deputy General Manager, Quality Control
Dept., Production Div. and Manager, Analysis
Sec.
December 2006
Deputy General Manager, Quality Control
Dept., Production Div., Manager, Quality
Assurance Sec. and Manager, Analysis Sec.
December 2007
Associate General Manager, Quality Control
Dept., Production Div., Manager, Quality
Assurance Sec. and Manager, Analysis Sec.
July 2008
General Manager, Quality Control Dept.,
Production Div., Manager, Quality Assurance
Sec. and Manager, Analysis Sec.
April 2009
General Manager, Quality Control Dept. andManager, Quality Assurance Sec.
June 2012
Executive Officer and General Manager,
Quality Control Dept.
June 2014
Senior Executive Officer
June 2014
General Manager, Quality Control Dept. andGeneral Manager, Environmental
Management Dept.
July 2016
General Manager, Quality Control &Environmental Management Dept.
September 2016
General Manager, Quality Control &Environmental Management Dept., General
Manager, Technical Research & Development
7,827
Dept. and Manager, Pyrometallurgy
Development Sec.
June 2017
Director (to present)
June 2017
In charge of Safety & Health Management,
Quality Control & Environmental
Management
June 2017
General Manager, Technical Research &Development Dept.
July 2019
In charge of Safety & Health Management andResources & Technology Development
Project
July 2019
General Manager, Quality Control &Environmental Management Dept.
June 2020
Managing Executive Officer
June 2020
In charge of Corporate Planning, Safety &Health Management, Quality Control &Environmental Management
June 2021
Senior Managing Executive Officer (topresent)
June 2021
Assistant to President (to present)
June 2021
In charge of Corporate Planning, Recycling
Business
April 2023
In charge of Corporate Planning, Recycling
Business & Technology Development (topresent)
The Company nominated Yoshiharu Inomata as a candidate for Director because
he has extensive experience in quality control, environmental management fields
and technical research & development, and we determined that he has theexperience and abilities suited to a Director who can take charge of the
management of the Company by leveraging such experience and track record.

-7-

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1988
October 2010

Kenichi Hara

(May 20, 1964)

3

Reason for nomination as
candidate for Director

Terunobu Matsuyama(December 16, 1969)

4

Reason for nomination as
candidate for Director

Number ofshares of theCompany
held

Joined the Company
Assistant General Manager, Environment &Recycle Business Dept.
December 2011
Assistant General Manager, Ferro Nickel
Sales Dept.
December 2012
Associate General Manager, Ferro Nickel
Sales Dept.
June 2014
Executive Officer
June 2014
General Manager, Ferro Nickel Sales Dept.
4,300
June 2017
Senior Executive Officer
March 2018
Director, Pacific Sowa Corporation (topresent)
June 2018
Director (to present)
June 2018
In charge of Sales
July 2019
General Manager, Sales & Marketing Dept.
(to present)
June 2020
In charge of Procurement (to present)
June 2021
Managing Executive Officer (to present)
The Company nominated Kenichi Hara as a candidate for Director because he has
extensive experience in the sales field, and we determined that he has theexperience and abilities suited to a Director who can take charge of the
management of the Company by leveraging his past experience and track record.
April 1988
Joined the Company
December 2010
Assistant General Manager, Finance &Accounting Dept.
December 2013
Associate General Manager, Finance &Accounting Dept.
May 2014
Auditor, Pacific Gas Center Co., Ltd.
June 2014
General Manager, Finance & Accounting
Dept., the Company
June 2017
Executive Officer
June 2018
Director (to present)
June 2018
Senior Executive Officer
6,443
June 2020
In charge of IR (to present)
May 2021
Director, Taiheiyo Kosan Co., Ltd. (to present)
June 2021
Managing Executive Officer, the Company (topresent)
June 2021
In charge of Internal Control (to present)
June 2021
In charge of General Administration (topresent)
June 2021
In charge of Finance & Accounting (topresent)
June 2021
General Manager of Personnel & Labor
Relation Dept. (to present)
The Company nominated Terunobu Matsuyama as a candidate for Director because
he has a wealth of knowledge in the accounting/financial fields, and we determinedthat he has the experience and abilities suited to a Director who can take charge ofthe management of the Company by leveraging such experience and track record.

-8-

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 2003
December 2009

Hiroaki Ichiyanagi(April 24, 1960)

5

Reason for nomination as
candidate for Director

Kazuo Iwadate(January 14, 1967)

6

Reason for nomination as
candidate for Director

Number ofshares of theCompany
held

Joined the Company
Deputy General Manager, Ore Purchasing &Mining Engineering Dept.
December 2012
Associate General Manager, Ore Purchasing& Mining Engineering Dept.
June 2014
Executive Officer
June 2014
General Manager, Ore Purchasing & Mining
Engineering Dept.
June 2017
Senior Executive Officer (to present)
2,200
June 2018
Director, Rio Tuba Nickel Mining Corporation(to present)
June 2018
Director, Taganito Mining Corporation (topresent)
July 2019
General Manager, Resources & Technology
Development Project Dept., the Company (topresent)
June 2020
Director (to present)
June 2021
In charge of Quality Control & Environmental
Management (to present)
The Company nominated Hiroaki Ichiyanagi as a candidate for Director because hehas a wealth of knowledge in the ore procurement and overseas resources
development fields, and is also involved in the management of overseas affiliates,
and we determined that he has the experience and abilities suited to a Director who
can take charge of the management of the Company by leveraging such experienceand track record.
April 1985
Joined the Company
December 2009
Deputy General Manager, Production Dept.,
Production Div.
December 2012
General Manager, Production Dept.,
Production Div.
November 2015
General Manager, Production Dept. andGeneral Manager, Environmental Business
Dept., Production Div.
June 2017
Executive Officer
June 2017
Assistant General Manager, Production Div.,
General Manager, Utility & MaintenanceDept. and General Manager, Environmental
2,051
Business Dept.
July 2019
General Manager, Business Process
Reengineering Dept. (to present)
May 2020
President & Representative Director, Pacific
Gas Center Co., Ltd. (to present)
June 2020
Director (to present)
June 2020
Senior Executive Officer (to present)
June 2020
In charge of Utility & Maintenance andProduction (to present)
June 2021
In charge of Safety & Health Management (topresent)
The Company nominated Kazuo Iwadate as a candidate for Director because hehas extensive experience in the production and maintenance fields, and wedetermined that he has the experience and abilities suited to a Director who cantake charge of the management of the Company by leveraging his past experienceand track record.

-9-

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1987

[Candidate for Outside
Director]
Shinya Matsumoto(August 12, 1959)

7

Reason for nomination as
candidate for Outside
Director and expected roles[Candidate for Outside
Director]
Hikari Imai
(July 23, 1949)

8

Reason for nomination as
candidate for Outside
Director and expected roles

Number ofshares of theCompany
held

Registered as attorney, joined Marunouchi
Sogo Law Office
July 1996
Partner and attorney, Marunouchi Sogo Law
OfficeJune 2001
Outside Corporate Auditor, Impress
Corporation (now Impress Holdings, Inc.)(to present)
June 2006
Member of Special Committee, theCompany0June 2007
Outside Director, The Shibusawa Warehouse
Co., Ltd. (to present)
October 2011
Partner and Representative Attorney,
Marunouchi Sogo Law Office (to present)
June 2013
Outside Director, the Company (to present)
May 2021
Chairperson of Nomination andCompensation Committee, the Company (topresent)
The Company nominated Shinya Matsumoto as a candidate for Outside Director
because we determined that he is capable of properly performing his duties as
Outside Director based on his professional perspective and broad insight as an
attorney. We expect him to promote the enhancement of compliance andimprovement of corporate governance at the Company by leveraging the abovementioned perspective and insight.
April 1974
Joined Yamaichi Securities Co., Ltd.
January 1986
Joined Morgan Stanley Japan Securities Co.,Ltd.
April 1993
Joined Merrill Lynch Japan Incorporated
January 1999
Deputy Chairman, and Chairman, Investment
Banking Division, Merrill Lynch Japan
Securities Co., Ltd
November 2007
Vice-President and Director, RECOF
Corporation
April 2008
President, RECOF Corporation
0
July 2010
Advisor, Ebara Foods Industry, Inc.
April 2012
Outside Director, Olympus Corporation
June 2015
Outside Director, CYBERDYNE Inc.
June 2016
Outside Director, the Company (to present)
November 2019
Outside Director, SHIMACHU CO., LTD.
May 2021
Member of Nomination and Compensation
Committee, the Company (to present)
December 2022
Outside Director, FUJI SOFT
INCORPORATED (to present)
The Company nominated Hikari Imai as a candidate for Outside Director because
we determined that he is capable of properly performing his duties as Outside
Director based on his extensive experience as a corporate manager over many
years. We expect him to promote the improvement of corporate governance and theenhancement of the foundation of corporate management at the Company byleveraging the above-mentioned experience.

- 10 -

Name(Date of birth)

No.

Career summary, positions, responsibilities
and significant concurrent positions

April 1991

Number ofshares of theCompany
held

Joined Nomura Securities Co., Ltd.
Director of Corporate Tune Co., Ltd.
Standing Outside Audit and Supervisory
Board Member of UNITED ARROWS LTD.
June 2008
Outside Auditor of REPROCELL Inc.
September 2013
Outside Auditor of Beauty Kadan Co., Ltd.
June 2016
Outside Director (Standing Audit andSupervisory Committee Member) of UNITED
ARROWS LTD. (to present)
0
October 2017
Outside Director (Audit and Supervisory
Committee Member) of Tea Life Co., Ltd.
March 2019
External Director (Audit & Supervisory Board
Member) of Uzabase, Inc.
June 2021
Outside Director, the Company (to present)
June 2022
Member of Nomination and Compensation
Committee, the Company (to present)
June 2022
Outside Director, TOYO KANETSU K.K. (topresent)
The Company nominated Yukari Sakai as a candidate for Outside Director because
we determined that she is capable of properly performing her duties as Outside
Director based on her extensive experience as a corporate manager in a wide rangeof business fields. We expect her to promote the enhancement and reinforcement ofcorporate governance at the Company based on a variety of perspectives from theviewpoint of diversity, by leveraging the above-mentioned experience.
January 2005
June 2005[Candidate for Outside
Director]
Yukari Sakai(June 23, 1968)

9

Reason for nomination as
candidate for Outside
Director and expected roles

Notes:

1.
2.

3.

4.

There are no special interests between each candidate and the Company.
Contract for limited liability with Directors
The Company has entered into a contract for limited liability with each of the candidates for Directors Mr. Shinya
Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai pursuant to the provisions of Article 427, Paragraph 1 of theCompanies Act and Article 30 of the Articles of Incorporation, and plans to continue the said contract subject to theapproval of their reappointment.
The gist of the said contract for limited liability is that the liability referred to in Article 423, Paragraph 1 of theCompanies Act shall be limited to the amount provided for in laws and regulations when the three Directors haveacted in good faith and without gross negligence in performing their duties as Directors.
Directors and officers liability insurance contract with Directors
The Company has entered into a directors and officers liability insurance contract with an insurance company tocover damages and litigation expenses to be borne by the insureds, in the event of a claim for damages arising fromthe insured’s conduct (including omissions) in the course of their duties as directors and officers of the Company.
The candidates for Director will be insured under the relevant insurance contract. The contract is scheduled to be
renewed with the same terms and conditions at the next renewal.
Matters concerning Outside Directors are as follows.
(1) Candidates Mr. Shinya Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai are candidates for Outside Directors
provided for in Article 2, Paragraph 3 (vii) of the Ordinance for Enforcement of the Companies Act.
The Company has designated Mr. Shinya Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai as Independent
Directors pursuant to the regulations set forth by the Tokyo Stock Exchange and submitted a notification of
their designation to the said exchange.
(2) Number of years served as Outside Directors by candidates for Outside Directors since their appointment(i) Mr. Shinya Matsumoto will have served as Outside Director of the Company for eleven years at theconclusion of this Annual General Shareholders Meeting.
(ii) Mr. Hikari Imai will have served as Outside Director of the Company for eight years at the conclusion ofthis Annual General Shareholders Meeting.
(iii) Ms. Yukari Sakai will have served as Outside Director of the Company for three years at the conclusion ofthis Annual General Shareholders Meeting.
(3) Candidates Mr. Shinya Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai have never been Executives orOfficers (excluding those who are Executives) of a Specified Associated Service Provider (Article 2, Paragraph
3 (xix) of the Ordinance for Enforcement of the Companies Act) of the Company over the past ten years.
(4) Candidates Mr. Shinya Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai each have held office as a directorof other stock companies over the past five years, and there are no circumstances indicating unfair execution ofbusiness during their terms of office at these companies.

- 11 -

Proposal 3:

Election of one (1) Auditor

The terms of office of one (1) Auditor will expire at the conclusion of this year’s Annual General
Shareholders Meeting. Accordingly, the election of one (1) Auditor is proposed. The candidate is as follows.
This proposal has prior consent of the Board of Auditors.
April 1983

October 2005
January 2008
[New candidate][Candidate for Outside
Auditor]Kyosuke Miyazaki(August 18, 1960)

May 2011
April 2018
April 2020
April 2021
June 2023

Reason for nomination as
candidate for Outside
Auditor
Notes:

1.
2.
3.

4.

Joined The Fuji Bank, Ltd.

Credit Assessor, Credit Supervision Division I,
Mizuho Bank, Ltd.
Deputy General Manager, Corporate Credit
Department No. 1, Mizuho Bank, Ltd.
Executive Officer, Division Chief, Mizuho
Real Estate Services Co., Ltd.
Executive Officer, The Shonai Bank, Ltd.
Director and Executive Officer, The Shonai
Bank, Ltd.
Director and Executive Officer, General
Manager, Corporate Management Dept., The
Shonai Bank, Ltd.
Outside Auditor, J-WAVE Inc. (to present)

0

The Company nominated Kyosuke Miyazaki as a candidate for Outside Auditor
because we determined that he is capable of properly performing his duties as
Auditor based on his broad insight and wealth of knowledge and experience as
director and auditor at other companies.

Mr. Kyosuke Miyazaki is a new candidate for Auditor.
There are no special interests between Mr. Kyosuke Miyazaki and the Company.
Contract for limited liability with Auditors
If the candidate for Auditor Mr. Kyosuke Miyazaki is elected at this Annual General Shareholders Meeting, theCompany plans to enter into a contract with him that limits liability for damages under Article 423, Paragraph 1 of
the Companies Act, in accordance with the provisions of Article 423, Paragraph 1 of the Companies Act and Article
39 of the Articles of Incorporation, pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act. The
gist of the said contract for limited liability is that the liability referred to in Article 423, Paragraph 1 of theCompanies Act shall be limited to the amount provided for in laws and regulations when they have acted in goodfaith and without gross negligence in performing their duties as Auditors.
Matters concerning the candidate for Outside Auditor is as follows.
(1) Candidate Mr. Kyosuke Miyazaki is a candidate for Outside Auditor provided for in Article 2, Paragraph 3(viii) of the Ordinance for Enforcement of the Companies Act.
The Company plans to designate Mr. Kyosuke Miyazaki as Independent Auditor pursuant to the regulations set
forth by the Tokyo Stock Exchange and submit a notification of his designation to the said exchange, if he iselected as Outside Auditor of the Company.
(2) Candidate Mr. Kyosuke Miyazaki has never been an Executive or Officer (excluding those who are Executives)of a Specified Associated Service Provider (Article 2, Paragraph 3 (xix) of the Ordinance for Enforcement of
the Companies Act) of the Company over the past ten years.

- 12 -

(Reference)

Directors

Reappointment●●

Yoshiharu Inomata

Reappointment○○

Kenichi Hara

Reappointment○

Terunobu Matsuyama

Reappointment○

Hiroaki Ichiyanagi

Reappointment○

Kazuo Iwadate

Reappointment○

Shinya Matsumoto

Reappointment
OutsideIndependent○

Hikari Imai

Reappointment
OutsideIndependent

●

○

○

Yukari Sakai

Reappointment
OutsideIndependent

○

●

○

●
●
○

●
○

●

○
○

●

○

●

○

●

●

○
●

●

11) Audit

○
○

○

○

10) ESG andsustainability

9) Global
management

8) Personnel andlabor relations7) Risk management

6) Law

5) Research/development/IT

4) Manufacturing

Masayuki Aoyama

Kiichi Tatsunaka

Auditors

3) MarketingName2) Finance/accounting

1) Corporate
management

Skills matrix for Directors and Auditors

●
○

●

○
○

○

○
○

○
●
○

○

○

○

Ken Yasuda

OutsideIndependent

○

○

○

Yutaka Iimura

OutsideIndependent

○

○

○

Kyosuke Miyazaki

New candidate
OutsideIndependent

○

○

○

Note: The skills matrix classifies knowledge and experience considered to be important for the Company and indicates the fields in which
the Directors and Auditors have appropriate expertise (○) and the fields for which the Company has high expectations (●) of the
Directors and Auditors.
The table above shows the skills matrix after the General Shareholders Meeting should Proposals 2 and 3 be approved as proposed.

- 13 -

Guidelines for fulfilling each item in the skills matrix
1) Corporate management• Experience as president or a director of a company, etc.
• Knowledge, experience, and track record in all aspects of corporate
management to develop and implement the Company’s medium- tolong-term business plans
2) Finance/accounting• Experience as a director in charge or general manager of a department
related to accounting• Experience as a director in charge or general manager of a department
related to financial management or fund procurement• Experience at a financial institution, etc.
3) Marketing• Experience as a director in charge or general manager of corporate
planning and coordination• Experience as a director in charge or general manager of a department
related to sales• Experience as president or a director of a related company• Experience as a director in charge or general manager of business
investment, etc.
4) Manufacturing• Knowledge related to the Company’s business
5) Research/• Experience as a director in charge or general manager of a department
development/IT
related to R&D• Experience as a director in charge or general manager of a department
related to manufacturing technology or production facilities• Experience as a director in charge or general manager of a department
related to IT or information systems
6) Law• Experience as a director in charge or general manager of legal affairs orcompliance promotion• Experience as an attorney-at-law7) Risk management• Experience as a director in charge or general manager of risk
management
8) Personnel and labor• Experience as a director in charge or general manager of a department
relationsrelated to HR (diversity promotion) or labor• Experience as a member of another company’s nomination orcompensation committee
9) Global management• Experience of overseas posting• Officer experience or business experience at an overseas subsidiary10) ESG and sustainability• Experience as a director in charge or general manager of a department
related to ESG/CSR• Experience as a director in charge or general manager of a department
related to sustainability- 14 -

●Criteria for determining independence of independent officers
The Company has established the criteria for determining independence of its independent officers as follows.
1. An independent officer shall be an Outside Director or an Outside Auditor with no risk of conflict of interest
arising with general shareholders.
2. An independent officer shall not be a major business partner (supplier or buyer) of the Company or a director,
executive or auditor thereof.
3. An independent officer shall not be a consultant, attorney, certified public accountant, certified tax accountant,etc. to whom the Company pays annual compensation amounting to one million yen or more other than officer’s
compensation.
4. An independent officer shall not be a shareholder of the Company.
5. An independent officer shall not be a friend of a Director or Auditor of the Company.
6. An independent officer shall not formerly or currently be:(1) A director, executive, auditor or accounting advisor of the Company or the Company’s subsidiaries, etc.;(2) A shareholder who holds 5% or more of the Company’s shares or a director, executive or auditor of an
institutional shareholder who holds 5% or more of the Company’s shares;(3) A director, executive or auditor of the parent company of the shareholder referred to in paragraph (2) above;(4) A member of a corporation organized by a consultant, attorney, certified public accountant, certified tax
accountant, etc. to whom the Company pays annual compensation amounting to one million yen or moreother than officer’s compensation;(5) A major business partner (supplier or buyer) of the Company or a former member of such client other thandirector, executive or auditor thereof;(6) A shareholder who holds 5% or more of the Company’s shares or a former member of an institutional
shareholder who holds 5% or more of the Company’s shares other than director, executive or auditor thereof;(7) A former member of the parent company of the shareholder referred to in paragraph (6) above other thandirector, executive or auditor of such parent company;(8) A member of a company whose relationship with the Company involves having outside officers from bothparties;(9) A recipient of donations from the Company or a former member thereof; or(10) A relative within third degree of kinship to any of the aforementioned persons.
[End of document]- 15 -

(Appendix)

Business Report(April 1, 2023 - March 31, 2024)

1. Overview of the Corporate Group(1)

Business Progress and Results
During the fiscal year ended March 31, 2024, although the simultaneous occurrence of the high resource
prices and the appreciation of the U.S. dollar led to price hikes, and concerns about the impact on economic
activities and uncertainty remained, corporate earnings remained steady, and there was a moderate recoveryof the Japanese economy despite signs of standstill.
As for overseas economies, weaknesses were seen in some regions due to concerns about the effects ofsevere real estate market conditions in China, global monetary tightening, the increasing volatility of thesituations in the Middle East and Ukraine, and the still high inflation rate. While the employment and income
environment remained steady, the pace of economic recovery seemed to have slowed down somewhat.
Under these circumstances, in the stainless steel industry, the primary source of demand for the nickel
business that accounts for the majority of the Group’s sales and profit and loss, despite the high capacity
utilization rate in China, the expectations preceded the weak movement of actual demand, and high inventory
levels have been piling up. Moreover, intermittent adjustments were evident in some areas, and the capacity
utilization rates of production facilities generally remained varied and lacked momentum.
The demand for ferronickel continued to slow down since, in addition to the environment described above,overseas producers of stainless steel shifted some of their procurement to nickel pig iron, which has a priceadvantage, and moreover, due to reviewing of the stainless steel scrap blending ratio with carbon neutrality
in mind.
On the procurement front, prices of nickel ore, the primary raw material for ferronickel products, havebeen high against the backdrop of a robust demand for nickel ore. Moreover, although there was some signof global prices of various raw materials and fuel settling down from their previous extremely high levels,
they remained elevated, which also kept production costs up.
Nickel prices on the London Metal Exchange (LME) remained slightly weaker due to complex factors,
including the slowdown of the Chinese economy, fluctuations in foreign exchange rates and financial andcapital markets, and the increasingly volatile situations in the Middle East and Ukraine.
In this situation, the Company’s ferronickel sales volume decreased by 51.4% year on year as a whole
due to a decrease in both domestic and overseas sales. The Company continued its policy with the objectiveof strategically controlling volume so as to secure a certain level of profitability, since the price of nickel pig
iron, which has a price advantage mentioned above, is also affecting the selling price of the Company’s
products.
The ferronickel production volume decreased year on year due to the policy of controlling sales volume.
Regarding the selling price of ferronickel products, the LME nickel price applicable to the Company
declined by 16.9% year on year, while the average exchange rate of the Japanese yen against the U.S. dollar
applicable to the Company was 6.8% weaker year on year. Moreover, in addition to the market prices
applicable to the Company, as mentioned previously, the selling price level of the Company’s ferronickel
products also partly referred to the price of nickel pig iron, resulting in the lowering of the selling price.
Therefore, the selling environment continued to be challenging, with stagnant revenue growth due to lower
selling prices compared to before.
Despite this harsh business environment, the Company is striving to thoroughly focus on the profitabilityof orders, thereby building a flexible production and sales system. Furthermore, the Company continues its
efforts to improve business performance and stabilize earnings through measures such as the early realizationof overseas business development and new business development, initiatives to reduce GHG emissions toachieve carbon neutrality, and reinforcement of operational efficiency improvement measures to pursue cost
minimization.
As a result, consolidated net sales for the fiscal year under review decreased by 55.5% year on year to- 16 -

¥15,521 million. On the profit front, the Company posted an operating loss of ¥9,114 million (comparedwith the operating loss of ¥12,588 million for the same period of the previous fiscal year), owing to anincrease in cost of sales due to an inventory write-down following a downturn in profitability, on top of thedecrease in net sales, and ordinary loss was ¥2,119 million (compared with the ordinary loss of ¥4,960
million for the same period of the previous fiscal year), reflecting the recording of ¥6,053 million in shareof profit of entities accounted for using the equity method under non-operating income. Loss attributable toowners of parent was ¥1,074 million (compared with the loss attributable to owners of parent of ¥5,026
million for the same period of the previous fiscal year), including ¥2,638 million of gain on sale of investment
securities included in extraordinary income and ¥977 million of impairment losses included in extraordinary
losses.
Operating results by business segment are as follows.
(i) Nickel business
The operating results of the nickel business are described above.
As a result, net sales in this segment decreased by 56.9％ year on year to ¥14,727 million with anoperating loss of ¥9,082 million (compared with the operating loss of ¥12,441 million for the previous
fiscal year).
(ii) Gas businessIn the gas business, the recording of costs associated with facility repair resulted in recording a loss
despite stable operations.
As a result, net sales in this segment increased by 4.7% year on year to ¥811 million with anoperating loss of ¥14 million (compared with the operating profit of ¥4 million for the previous fiscal
year).
(iii) Other
The segment of other businesses recorded a loss, despite concluding sales contracts in the real estatebusiness, because the sales proceeds failed to exceed costs such as administrative expenses.
As a result, net sales in this segment increased by 57.2% year on year to ¥61 million with anoperating loss of ¥26 million (compared with the operating loss of ¥160 million for the previous fiscal
year).

Net sales by business segment
97th Term
Year ended March 31, 2023
Segment
AmountShare
Nickel business
Gas business
Other
Inter-segment
eliminations
Total(Million yen)

34,135
774
38

%

97.9
2.2
0.1

(Million yen)

(97)
34,852(Million yen)

ChangeAmountShare

14,727
811
61

%

94.9
5.2
0.4

(Million yen)

(19,408)3622(56.9)
4.7
57.2

(0.2)

(78)

(0.5)

18

—

100.0

15,521

100.0(19,331)(55.5)

Operating profit (loss) by business segment
97th Term
Year ended March 31, 2023
Segment
AmountShare
Nickel business
Gas business
Other
Inter-segment
eliminations
Total

98th Term
Year ended March 31, 2024
AmountShare

98th Term
Year ended March 31, 2024
AmountShare(12,441)
4
(160)

%

98.8
(0.0)
1.3

(Million yen)

9
(12,588)%

ChangeAmountShare(9,082)
(14)
(26)

%

99.6
0.2
0.3

(Million yen)

3,358
(18)
133

—
—
—

(0.1)

9

(0.1)

0

0.3

100.0

(9,114)

100.0

3,473

—

- 17 -%

(2) Issues to Be Addressed
1) Future Outlook
With regard to the consolidated financial forecast, the economic outlook has become even more uncertain
as the domestic and overseas economies continue to be affected by concerns of a downturn against the
backdrop of the problems in China’s real estate market conditions, the increasing volatility of the situationsin the Middle East and Ukraine, and the cumulative impact of monetary tightening in Europe, the UnitedStates, and elsewhere.
In terms of volumes of the Company’s ferronickel products, our forecast is for a harsh environment, as
there have been no major changes. As such, following on from the previous fiscal year, the Company willcontinue to implement its policy of controlling volumes from the perspective of profitability.
Regarding profit and loss, in terms of the selling price of ferronickel products, the forecast is for a pricelevel that partially refers to the price of nickel pig iron, which has a price advantage, in addition to the market
price applicable to the Company. On the procurement price front, the price of nickel ore, the primary raw
material for ferronickel products, and the prices of other raw materials, fuel, and electricity are expected toremain at high levels. Accordingly, a significant impact on the price front is expected.
Although the circumstances remain severe, response measures to address such a business environment
are consistent with activities to be undertaken under the basic policies set forth in the Group’s Medium-termManagement Plan, and the Company will continue to strongly push forward with these measures.
2) Medium-term Business Plan “PAMCO-2024” (formulated in May 2022)
In order to establish a management platform capable of responding to changes in the businessenvironment and to achieve continuous growth, we established the long-term vision, “Become a world-classferronickel manufacturer with comprehensive power,” and endeavored to achieve this long-term vision.
However, the business environment surrounding the Company has become increasingly severe due to thematerialization of resource nationalism in the nickel ore-producing countries, changes in the market
structure of mainstay products, and other factors. The situation is unpredictable due to soaring resource andenergy prices, etc., caused by the tense situation in Ukraine.
In this business environment, having positioned further strengthening of the platform, contributing to
the SDGs, and becoming carbon neutral as important issues for the Company, we aim to evolve as asustainable company by building and developing a business structure based on problem-solving.
Based on the above, we have set forth a new long-term vision, “A comprehensive materials company
that co-creates a sustainable, recycling-oriented society,” and have formulated a medium-term business plan
covering the period from FY2022 to FY2024 (hereinafter, PAMCO-2024) to realize this vision.

- 18 -

Positioning of Medium-term Management Plan

Priority Measures and State of Progress
Restructuring of ferronickel
production and sales systems
with emphasis on
profitability

Acceleration of considerationof expansion into overseas
smelting business

Creation of new businesses
that contribute to society

Establishment of optimal production system by reviewing
production strategy• Establish optimal production system to further strengthen theplatform.
Strengthening of cost competitiveness by reviewing procurement
strategy• Review and strengthen procurement strategies for fuels and otherraw materials, according the highest priority to costcompetitiveness.
Promotion of overseas smelting projects and start-up of
production• Establish optimal ferronickel production and sales system bycombining domestic and overseas smelting operations.
 Restarted project after obtaining permits from local national
government
Promotion of production and sales of raw materials for LIB
materials• Create a business to manufacture and sell raw materials for LIB
materials by utilizing hydrometallurgical technologies.
Realization of production and sales of raw materials for LIB
materials
 Established cobalt sulfate manufacturing process (applied forpatent) and studied commercialization with LIB-related
business operator, but decided to postpone
 Continued development of rare metal manufacturing process
for LIB applications from different raw materials
Development of LIB recycling technology
 Completed joint technological development with Emulsion
Flow Technologies Ltd. for extracting rare metals from blackmass for LIB applications and moved project up to
demonstration phase
Promotion of new metal smelting project- 19 -

•

Diversification of business inJapan to contribute to a
recycling-oriented society

Enhancement of corporate
value by addressing
sustainability issues

Leverage the smelting technology cultivated in various ferroalloy
manufacturing businesses since our foundation to venture into
metal smelting business using new resources.

 Feasibility study of new metal smelting business from seabedresources- Build smelting process that accommodates thecharacteristics of polymetallic nodule- Currently estimating equipment design and capital
investment- Currently obtaining technical and equipment data
concerning polymetallic nodule through pilot demonstration
trials- Plan to estimate economic feasibility* Promoting project with primary consideration ofenvironment and society, while monitoring and respecting
developments in various organizations
Restructuring of recycling business• Promote restructuring of our recycling business throughcollaboration with other companies, etc.
Production and sale businesses of raw materials for steelmaking
and raw materials for battery materials
 Continued marketing of production and sale businesses of raw
materials for steelmaking and raw materials for battery
materials
Reduction of GHG emissions• To achieve carbon neutrality by FY2050, implement measures withclear targets, including use of carbon-free energy and introductionof new technologies.
Reference:
Succeeded in calcination of nickel ore in microwave bench testwith Microwave Chemical Co., Ltd.
 Confirmed removal of crystalline water within nickel ore Confirmed nickel ore reduction reaction and obtained resultscomparable to conventional method
 Obtained data from continuous feed tests, and currently
identifying challenges for scaling up to commercial deployment
and performing economic feasibility studies
Reference
Diagram comparing conventional method and microwave method- 20 -

Comparison between conventional method and microwave method
Conventional
Microwave
methodmethodEnergyMajor
Minor
consumption
CO2 emissions
Major
Minor
Sustainability Promotion Council• Positioning the response to climate change and the realization of asustainable society as the most important management issue,
promote specific measures across PAMCO, including discussions
on medium- to long-term initiatives and directions concerningmaterial sustainability issues.
Climate change initiatives
 Responded to Task Force on Climate-related Financial
Disclosures (TCFD) Recommendations* Please refer to the “Sustainability” section of the Company’s
website for details.
Human rights initiatives
 Promoted initiatives for respecting human rights based oninternational norms and standards* Please refer to the “Sustainability” section of the Company’s
website for details.
Diversity initiatives
 Held diversity management training to raise awareness Lifted the retirement age to 65 years in FY2022 and developed
a framework in which employees can demonstrate the same
performance while being considerate of their health
Promotion of active participation of women Held seminar on supporting active participation of women Worked to improve environment from dual facets of tasks andfacilities to promote the active participation of womenDisclosure of financial and non-financial information
 Integrated Report (published annually)* Please refer to the “Sustainability” section of the Company’s
website for details.
Promotion of symbiosis by contributing to the development ofregions and resource-rich countries• Promote symbiosis through activities that contribute to thedevelopment of the region and resource-rich countries.
State of social contribution activities Assistance to regional educational activities; assistance to Kids
Cafés nationwide; donated to disaster relief for Noto Peninsula
Earthquake through Red Cross Japan
Promotion of constructive dialogue with stakeholders• Disclose operating and financial conditions in a timely,
appropriate, and fair manner, and actively communicate andpromote constructive dialogue on the market environment and ourunique strengths.
Reduction of cross-shareholdings
 Reduced a portion of holdings of one stock in FY2023- 21 -

State of dialogue with shareholders (FY2023)
 Financial results briefing sessions; individual shareholder
relations meetings; individual investor relations meetings
For details, please also refer to our website• Medium-term Management Plan: https://www.pacific-metals.co.jp/en/ir/term.php• Sustainability:
https://www.pacific-metals.co.jp/en/sustainability/
We would like to ask for the continued support and encouragement of our shareholders.
(3)

Capital Expenditures, Etc. and Financing
The total amount of capital expenditures conducted in the fiscal year under review was ¥331 million.
The Company did not conduct any financing at the end of the fiscal year under review.

(4)

Transfer, Absorption-type Split or Incorporation-type Split of Businesses
Not applicable.

(5)

Acquisition of Business from Other Companies
Not applicable.

(6)

Succession of Rights and Obligations regarding Businesses of Other Corporations via Absorptiontype Merger or Absorption-type Split
Not applicable.

(7)

Acquisition or Disposition of Shares and Other Equity or Share Acquisition Rights of Other
Corporations
Not applicable.

(8)

Trends in Assets and Profit (Loss)

Item

Net sales
Ordinary profit (loss)
Profit (loss) attributable toowners of parent
Basic earnings per share(yen)
Total assets
Net assets
Net assets per share (yen)(Million yen)

95th Term
Year ended
March 31,2021

96th Term
Year ended
March 31,2022

97th Term
Year ended
March 31,2023

98th Term
Year ended
March 31,2024

(Fiscal year
under review)

32,217
3,344

57,12912,99934,852(4,960)15,521(2,119)

1,162

11,368(5,026)(1,074)59.61 yen

582.93 yen(257.75) yen(55.10) yen

75,48467,014
3,421.84 yen

89,85280,153
4,095.12 yen

78,82572,034
3,678.90 yen

73,79069,0603,527.21 yen

Note: Basic earnings (loss) per share is calculated based on the average number of shares issued and outstanding
during the fiscal year, while net assets per share are calculated based on the number of shares issued andoutstanding at the end of the fiscal year. Treasury shares are excluded from the total number of shares issued
and outstanding.

- 22 -

(9)Significant Subsidiaries
Company name

CapitalThe Company’s
share of voting
rights(Thousand yen)%

Taiheiyo Kosan Co., Ltd.

50,000

74.00

Pacific Gas Center Co., Ltd.

100,000

50.00

Major business lines

Transportation andcontracting, realestate-related
business, etc.
Manufacture and saleof gases

Notes: 1. The Company has two (2) consolidated subsidiaries and seven (7) associates accounted for using theequity method.
2. An overview of their business results for the fiscal year under review is stated above in “(1) Business
Progress and Results” (Pages 16-17).

(10) Principal Business (as of March 31, 2024)
Business segment
Major business lines
Nickel business
Manufacture and sale of ferronickel and slag products
Gas business
Manufacture and sale of gases
Other
Transportation and contracting, real estate-related business, etc.
(11) Principal Business Locations (as of March 31, 2024)
1) The Company
Business location nameHead Office
Chiyoda-ku, Tokyo
Hachinohe Head Office
Hachinohe City, Aomori2) Significant subsidiaries
Business location nameTaiheiyo Kosan Co., Ltd.
Hachinohe City, Aomori
Pacific Gas Center Co., Ltd. Hachinohe City, Aomori(12) Employees (as of March 31, 2024)
Number of employees
459

Location

Location

Year-on-year increase (decrease)(9)(13) Major Lenders (as of March 31, 2024)
Not applicable.

- 23 -

2. Shares of the Company (as of March 31, 2024)(1) Total number of shares authorized to be issued

50,000,000 shares(2) Total number of shares issued and outstanding

19,501,466 shares(excluding 75,605 treasury shares)
17,871 persons (up 1,556 from the end of theprevious fiscal year)(3) Number of shareholders(4) Major shareholders (top ten shareholders)Number of shares
held
Thousand shares

Shareholder’s name

Percentage ofshareholding%

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

2,999

15.38

NIPPON STEEL Stainless Steel Corporation

2,049

10.51

Custody Bank of Japan, Ltd. (Trust account)

917

4.70

Tachibana Securities Co., Ltd.

647

3.32

J.P. MORGAN SECURITIES PLC FOR AND ON
BEHALF OF ITS CLIENTS JPMSP RE CLIENTASSETS-SEGR ACCT

300

1.54

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FEAC)

253

1.30

AVI JAPAN OPPORTUNITY TRUST PLC

249

1.28

Business Partners’ Shareholding Association, PACIFICMETALS CO., LTD.

237

1.22

JP JPMSE LUX RE NOMURA INT PLC 1 EQ CO

232

1.19

Nihon Kisetsu K.K.

228

1.17

Notes: 1. Numbers of shares held have been rounded down to the nearest thousand.
2. Percentage of shareholding has been calculated based on the number of shares(19,501,466 shares) obtained by subtracting treasury shares from the total number ofshares issued and outstanding.

(5) Other important matters concerning shares
Not applicable.

- 24 -

3. Share Acquisition Rights, etc., of the Company (as of March 31, 2024)(1)

Status of share acquisition rights, etc. held by the officers of the Company that are issued asremuneration for the execution of duties
Not applicable.

(2)

Status of share acquisition rights, etc. issued to employees of the Company as remuneration for
the execution of duties during the fiscal year under review
Not applicable.

(3)

Other significant matters concerning share acquisition rights, etc.
Not applicable.

- 25 -

4. Company Officers(1)

Directors and Auditors (as of March 31, 2024)
Position

Name

President

Masayuki Aoyama

Director & Senior
Managing Executive
Officer

Yoshiharu Inomata

Director & Managing
Executive Officer

Kenichi Hara

Director & Managing

Terunobu

Executive Officer

Matsuyama

Director & Senior

HiroakiExecutive Officer

Ichiyanagi

Director & Senior
Executive Officer

Director

Kazuo Iwadate

ShinyaMatsumotoResponsibilities and significant concurrent positions
Representative Director, Member of Nomination andCompensation Committee
Assistant to the President,
In charge of Corporate Planning, Recycling Business &Technology Development
In charge of Procurement, General Manager of Sales &Marketing Dept.
Director, Pacific Sowa Corporation
In charge of Internal Control, IR, General Administration,
Finance & Accounting, General Manager of Personnel &Labor Relation Dept.
Director, Taiheiyo Kosan Co., Ltd.
In charge of Quality Control & Environmental
Management, General Manager, Resources & Technology
Development Project Dept.
Director, Rio Tuba Nickel Mining Corporation
Director, Taganito Mining Corporation
In charge of Safety & Health Management, Utility &Maintenance and Production; General Manager ofBusiness Process Reengineering Dept.
President & Representative Director, Pacific Gas Center
Co., Ltd.
Chairperson of Nomination and Compensation Committee
Outside Auditor, Impress Holdings, Inc.
Outside Director, The Shibusawa Warehouse Co., Ltd.
Partner and Representative Attorney, Marunouchi Sogo
Law Office

Hikari Imai

Member of Nomination and Compensation Committee
Outside Director, FUJI SOFT INCORPORATED

Director

Yukari Sakai

Member of Nomination and Compensation Committee
Outside Director (Standing Audit and Supervisory
Committee Member), UNITED ARROWS LTD.
Outside Director, TOYO KANETSU K.K.

Full-time Auditor

Kiichi Tatsunaka

AuditorKen Yasuda

AuditorShuzo Ikeda

AuditorYutaka Iimura

Director

External Auditor, NIHON PLAST CO., LTD.

Notes: 1. Mr. Hideki Ogata, Auditor, retired from his position at the end of his term of office at the conclusion of the Annual
General Shareholders Meeting held on June 27, 2023.
2. Mr. Yutaka Iimura was newly elected as and assumed the position of Auditor at the Annual General Shareholders
Meeting held on June 27, 2023.
3. Mr. Shinya Matsumoto, Mr. Hikari Imai, and Ms. Yukari Sakai are Outside Directors as set forth in Article 2,
Item 15 of the Companies Act. Furthermore, the Company has designated Mr. Shinya Matsumoto, Mr. Hikari
Imai, and Ms. Yukari Sakai as Independent Directors pursuant to the regulations set forth by the Tokyo Stock- 26 -

Exchange and submitted a notification of their designation to the said exchange.
4. Mr. Ken Yasuda, Mr. Shuzo Ikeda, and Mr. Yutaka Iimura are Outside Auditors as set forth in Article 2, Paragraph
16 and Article 335, Paragraph 3 of the Companies Act. Furthermore, the Company has designated Auditors Mr.
Ken Yasuda, Mr. Shuzo Ikeda, and Mr. Yutaka Iimura as Independent Auditors pursuant to the regulations set
forth by the Tokyo Stock Exchange and submitted a notification of their designation to the said exchange.
5. Prior to his assumption of office as Auditor, Permanent Auditor Mr. Kiichi Tatsunaka belonged to the Finance &Accounting Department of the Company, and he possesses considerable knowledge in the finance and accounting
fields.
6. Auditors Mr. Ken Yasuda, Mr. Shuzo Ikeda, and Mr. Yutaka Iimura all hail from financial institutions and possess
considerable knowledge in the finance and accounting fields and also as auditors.

Reference: The other Executive Officers are as follows. (As of March 31, 2024)
Position

Names

Senior Executive Officers

Chitaru Okamura, Satoshi Kawabata

Executive Officers

Tomoyuki Matsumura, Tetsuji Kimura(2)

Summary of Agreement on Limitation of Liability
The Company and three (3) Outside Directors and three (3) Outside Auditors have entered into
contracts to limit liability for damages pursuant to the respective provisions of Article 427, Paragraph
1 of the Companies Act, Article 30 of the Articles of Incorporation, which stipulates the contract tolimit liability of Outside Directors, and Article 39 of the Articles of Incorporation, which stipulates
the contract to limit liability of Outside Auditors. The limit of liability for damages under the said
contracts shall be the amount provided for by laws and regulations.

(3)

Summary of Directors and Officers Liability Insurance Contract
The Company has entered into a directors and officers liability insurance contract stipulated in
Article 430-3, Paragraph 1 of the Companies Act with an insurance company. Directors, Auditors,
Executive Officers, and managerial employees of the Company are within the scope of the insured
under the said insurance contract, and the insured do not bear the premiums. The said insurance
contract covers legal expenses and damages for claims brought against the insured during theinsurance period.
However, in order to ensure that the insured’s execution of their duties is not impaired, there arecertain exemptions, such as coverage not being provided for damages arising from an act committed
by the insured with knowledge that the act was in violation of the law.

(4)

Remuneration, etc. of Directors and Auditors in the Fiscal Year Under Review
1) Matters regarding the policy for determining the content of remuneration for individual
Directors and Auditors
The Company’s Nomination and Compensation Committee has established the policy described
below for determining the content of remuneration for individual Directors. This basic policy has
been decided by the Company’s Board of Directors as the Officers’ Remuneration Rules.
The Company’s policy for determining the content of remuneration for individual Auditors
has also been decided by the Company’s Board of Directors as the Officers’ Remuneration Rules,
and the maximum amount was resolved at the General Shareholders Meeting and the details are
determined through mutual consultation among the Auditors.
2) Summary of the determination policyi) Basic policy
The basic policy for Director’s remuneration is to link the remuneration system with the benefitsof shareholders in order to make the system fully functional, as an incentive to pursue thesustainable improvement of corporate value, and to determine the individual Director’s
remuneration at an appropriate level according to his/her responsibilities.
Specifically, Directors’ remuneration consists of “basic remuneration for officers” as fixed
remuneration and “bonuses for officers (cash and shares)” as performance-linked remuneration.
Regarding Outside Directors who assume the responsibility of oversight, only “basic
remuneration for officers” is paid in light of their duties.
ii) Policy for determining the amounts of basic remuneration (monetary compensation) for individual
Directors (including policy regarding the determination of the timing or conditions of granting- 27 -

remuneration)
Basic remuneration for Directors of the Company is fixed monthly remuneration and its amountis deliberated and determined by the Nomination and Compensation Committee.
iii) Policy for determining the contents and the amount or quantity of performance-linked remuneration(including policy regarding the determination of the timing or conditions of granting remuneration)
Regarding performance benchmark, performance-linked remuneration is payable when
dividends are paid. Using net income as the source of funds, performance-linked remuneration
is calculated based on the distribution standard according to the level of net income determined
separately. The performance benchmark is selected to raise awareness of the performance
improvement for each fiscal year, contribute to the improvement of corporate value, and sharebenefits with all stakeholders.
The payment is made at a fixed time each year in an amount calculated based on theperformance for each fiscal year as a bonus.
iv) Policy for determining the amount of monetary remuneration and the amount of performance-linked
remuneration as percentages of the amount of remuneration for individual Directors
a. Fixed monthly remuneration◇Basic remuneration for officers
 Fixed remuneration in cash according to the position based on the degree of responsibilities
b. Performance-linked remuneration◇Bonuses for officers (cash) Performance-linked remuneration as a short-term incentive, which fluctuates based on the
Company’s business performance during a fiscal year.
 Up to the amounts of individual monthly fixed remuneration for five months
 The payment of remuneration shall be made annually after the determination of theCompany’s performance and other items for each fiscal year.
◇Bonuses for officers (shares) As performance-linked stock remuneration, points will be granted for delivery of shares
during the term of office in order to promote the sharing of benefits and risks withshareholders from a medium- to long-term perspective.
 Shares, etc. will be issued to Directors at the time of their retirement.
Regarding the ratio by remuneration type, the ratio of fixed remuneration to performance-linked
remuneration is in the range between 10:0 and 7:3.
v) Matters relating to the determination of the content of remuneration for Directors
In determining a draft proposal on monthly individual Directors’ remuneration, the President
Director carefully evaluates the role expected of each Director by the Company, submits thedraft proposal to the Nomination and Compensation Committee, which deliberates anddetermines remuneration for individual Directors, and then the President Director submits the
proposal on the total amount to the Board of Directors, which makes a decision.
The total amount of bonuses for Directors, which are performance-linked remuneration, isdetermined in accordance with the distribution standards, and the President Director submits a
proposal on the total amount to be paid to the Board of Directors, which makes a decision.
Distribution to individuals is done proportionally based on the amount of fixed monthly
remuneration according to position.

3) Matters regarding the resolution of the General Shareholders Meeting concerning
remuneration of Directors and Auditors
The 80th Annual General Shareholders Meeting on June 29, 2006 passed a resolution to stipulatethat the amount of monetary remuneration for Directors shall be up to 350 million yen per year
(excluding the portion of employee salary of Directors who concurrently serve as employees).
There were ten (10) directors (including one (1) Outside Director) at the time of the conclusionof the said Annual General Shareholders Meeting.
The 80th Annual General Shareholders Meeting on June 29, 2006 passed a resolution to
stipulate that the amount of monetary remuneration for Auditors shall be up to 60 million yen per
year. There were four (4) auditors at the time of the conclusion of the said Annual General
Shareholders Meeting.
4) Matters regarding the entrustment of the determination of remuneration, etc. for individual
Directors
Regarding the amount of each individual Director’s remuneration, the maximum amount
was resolved at the General Shareholders Meeting, and the Nomination and Compensation
Committee, entrusted by the Board of Directors, deliberates on the total amount of
remuneration to be paid to Directors for the applicable period based on the Directors’- 28 -

Remuneration Policy established separately, and the President submits the proposal
reflecting results of its deliberations to the Board of Directors, which makes a decision.
The reason for delegating authority to the Nomination and Compensation Committee isto ensure the fairness, transparency, and objectivity of the procedures for determining
remuneration since the Nomination and Compensation Committee, of which a majority ofmembers are Outside Directors, is a voluntary advisory body to the Board of Directors of
the Company.
The Board of Directors has taken measures to ensure that such authority is properly
exercised by the Nomination and Compensation Committee, which deliberates on the matter,and based on its report, the President Director submits the matter to the Board of Directors
for decision. Since the amount of individual Director’s remuneration is determined throughsuch procedures, the Board of Directors believes that the content of such remuneration is inline with the determination policy.
Regarding the details pertaining to the fiscal year under review, the Nomination andCompensation Committee (Chairperson: Outside Director Mr. Shinya Matsumoto;
Members: Outside Director Mr. Hikaru Imai, Outside Director Yukari Sakai, President
Director Mr. Masayuki Aoyama) determined the details of remuneration for individual
Directors. The content of its authority is defined by the Committee’s Regulations and covers
formulation of the basic policy regarding the remuneration system, proposals on the
remuneration framework (including the calculation method), and specific amounts ofremuneration for individual Directors (including the calculation method).
5) Total amount of remuneration, etc. of Directors and Auditors
Officer Category

Total amount of
remuneration,etc.
(million yen)

Total amount by remuneration type (million yen)
PerformanceNon-monetary
Basic (fixed)
linkedremuneration,
remuneration
remuneration,
etc.
etc.

Number of
eligible
officers

Directors (of
186
—
—
9
which, Outside
186
(19)
(—)
(—)
(3)
Directors)
Auditors (of39——5which, Outside
39
(18)
(—)
(—)
(4)
Auditors)
Notes: 1. The amount of remuneration for Auditors includes that for one Auditor who retired at the conclusion of the97th Annual General Shareholders Meeting held on June 27, 2023.
2. The indicator for performance-linked remuneration for the fiscal year under review is the payment ofdividends with a consolidated payout ratio of 30%. Since the actual result was a loss attributable to ownersof parent of 1,074 million yen, the Company decided not to pay dividends from surplus. As a result, theCompany decided not to pay bonuses for officers to six (6) Directors (excluding Outside Directors) inaccordance with the Directors’ Remuneration Policy.
3. The Board of Directors’ meeting, held on May 22, 2006, resolved to abolish the retirement benefits systemfor officers, and the 80th Annual General Shareholders Meeting, held on June 29, 2006, resolved to grant
final payments in conjunction with the abolishment of the retirement benefits system. The total amount of
the final payments in the future as of the end of the fiscal year under review is as follows.
A total of 6 million yen for one Auditor
4. Outside Directors and Auditors do not receive officers’ remuneration, etc., from subsidiaries.-- 29 -

(5)Outside Directors and Auditors
1) Status of Activities at the Board of Directors During the Fiscal Year Under Review
Position at theCompanySignificant concurrent
positionsShinya Matsumoto

Director
Independent Officer

Outside Auditor, Impress
Holdings, Inc.
Outside Director, The
Shibusawa Warehouse Co.,Ltd.
Partner and Representative
Attorney, Marunouchi
Sogo Law Office

Hikari Imai

Director
Independent Officer

Outside Director, FUJI
SOFT INCORPORATED

Director
Independent Officer

Outside Director (Standing
Audit and Supervisory
Committee Member),
UNITED ARROWS LTD.
Outside Director, TOYOKANETSU K.K.

Name

Yukari Sakai- 30 -

Main activities and summary of duties
performed with respect to the role
expected of Outside Directors
Mr. Matsumoto attended 22 of the 22
Board of Directors meetings held
during the fiscal year under review,expressing opinions from theperspective of compliance with laws
and regulations based on his
professional perspective and broad
insight as an attorney. (Board of
Directors attendance rate: 100.0%)
In addition, by leveraging the abovementioned perspective and insight, heserves as the chairperson of theNomination and Compensation
Committee of the Company and isplaying an appropriate role inenhancing the fairness andtransparency of the Company’s Boardof Directors.
Mr. Imai attended 21 of the 22 Board of
Directors meetings held during the
fiscal year under review, expressing
opinions from the perspective ofenhancing and strengthening corporate
management, based on his extensive
experience as a corporate manager overmany years. (Board of Directors
attendance rate: 95.5%)
In addition, by leveraging the abovementioned experience, he serves as amember of the Nomination andCompensation Committee of theCompany and is playing an appropriaterole in enhancing the fairness andtransparency of the Company’s Boardof Directors.
Ms. Sakai attended 22 of the 22 Boardof Directors meetings held during the
fiscal year under review, expressing
opinions from the perspective ofenhancing and strengthening corporate
management, based on her extensive
experience as a corporate manager overmany years. (Board of Directors
attendance rate: 100.0%)
In addition, by leveraging the abovementioned experience, she is providing
advice, as appropriate, on various
issues related to the Company’s
corporate management based on avariety of perspectives from theviewpoint of diversity and is playing anappropriate role in enhancing theeffectiveness of the Company’s Boardof Directors.

2) Status of Activities at the Board of Auditors During the Fiscal Year Under Review
Name

Position at theCompanySignificant concurrent
positions

Main activities

Mr. Yasuda attended 22 of the 22 Boardof Directors meetings and 15 of the 15
Board of Auditors meetings held during
the fiscal year under review, expressing
Auditoropinions from the perspective of
Ken Yasuda
Independent Officer
appropriate auditing, based on his
operational experience. (Board of
Directors attendance rate: 100.0%;
Board of Auditors attendance rate:
100.0%)
Mr. Ikeda attended 22 of the 22 Boardof Directors meetings and 15 of the 15
Board of Auditors meetings held during
the fiscal year under review, expressing
AuditorExternal Auditor, NIHON
opinions from the perspective of
Shuzo Ikeda
Independent Officer
PLAST CO., LTD.
appropriate auditing, based on his
operational experience. (Board of
Directors attendance rate: 100.0%;
Board of Auditors attendance rate:
100.0%)
Mr. Iimura attended 16 of the 16 Boardof Directors meetings and 8 of the 8
Board of Auditors meetings held during
the fiscal year under review, expressing
Auditoropinions from the perspective of
Yutaka Iimura
Independent Officer
appropriate auditing, based on his
operational experience. (Board of
Directors attendance rate: 100.0%;
Board of Auditors attendance rate:
100.0%)
Notes: 1. There are no transactional relationship or special interests between Directors Mr. Shinya Matsumoto, Mr.
Hikari Imai, and Ms. Yukari Sakai and Auditors Mr. Ken Yasuda, Mr. Shuzo Ikeda, and Mr. Yutaka Iimuraand the Company.
2. There are no special interests between the corporations, etc., where Directors Mr. Shinya Matsumoto, Mr. Hikari
Imai, and Ms. Yukari Sakai and Auditor Mr. Shuzo Ikeda serve in concurrent positions and the Company.
3. Auditor Mr. Yutaka Iimura’s attendance at meetings is for Board of Directors meetings and Board of Auditors
meetings held after he assumed his position on June 27, 2023.

- 31 -

5. Accounting Auditor(1)

Accounting Auditor’s Name
KPMG AZSA LLC(2)Amount of accounting auditor’s remuneration, etc. and reasons for the Board of Auditors tohave agreed on accounting auditor’s remuneration, etc. for the fiscal year under review
Amount paid
Category(Million yen)
Remuneration for the year ended March 31, 2024
41
Total amount of cash and other property interest payable by the
41
Company or its subsidiaries to Accounting Auditor

Notes: 1. The audit agreement between the Company and the accounting auditor does not differentiate the amount ofaccounting auditor’s remuneration, etc. under the Companies Act from the amount of remuneration for the audit
under the Financial Instruments and Exchange Act. And as such differentiation is practically impossible, theamount of remuneration, etc. is presented as the total of these amounts.
2. No certified public accountant or audit firm other than the Company’s accounting auditor conducts audits ofthe financial statements of the Company’s consolidated subsidiaries.
3. Description of non-audit services
The Company has concluded a Procedural Work Contract Pursuant to Article 21, Paragraph 2, Item 3 of the
Enforcement Regulation of the Act on Special Measures Concerning Procurement of Electricity from
Renewable Energy Sources by Electricity Utilities (Ministry of Economy, Trade and Industry Ordinance No.
46) (October 2023), and pays ¥0 million as remuneration for the said contract.
4. Based on the Practical Guidelines for Collaboration with Accounting Auditors published by Japan Audit &Supervisory Board Members Association, the Board of Auditors has given consent to the remuneration, etc. tobe paid to the Accounting Auditor pursuant to Article 399, Paragraph 1 of the Companies Act as a result ofconfirming actual audit hours per audit item and grade in the auditing schedules of past years, trends inremuneration amounts, and the status of the execution of duties by the accounting auditor and examining thevalidity of auditing schedule and the remuneration amount for the fiscal year under review.

(3)

Policy on Determination of Dismissal or Non-reappointment of Accounting Auditor
The Company’s Board of Auditors shall dismiss the Accounting Auditor with the unanimous consent
of all Auditors if it is judged that the Accounting Auditor falls under any of the items set forth in
Article 340, Paragraph 1 of the Companies Act. In such an event, an Auditor selected by the Board
of Auditors shall report the dismissal of the Accounting Auditor and the reasons for that dismissal at
the first General Shareholders Meeting convened after the dismissal.
The Board of Auditors shall decide on the reappointment or non-reappointment of the Accounting
Auditor taking into account factors such as the number of years of continuous provision of audits by
the Accounting Auditor.

6. Systems to Ensure the Appropriateness of the Company’s Business Operations andthe State of Their Implementation
(1)

(2)

(3)

System of retention and management of information concerning the execution of duties of the
Directors of the Company
1)
Reports related to the execution of duties of Directors are made in writing or in electronic
media.
2)
Information concerning the execution of duties of Directors is retained and managed
according to the document control rules and other internal rules of the Company.
Rules and other systems concerning the management of risk of loss of the Company
1)
In order to cope with major accidents, disasters, and corporate scandals, the Company
has established the Risk Management Committee, which takes measures at normal times,
and the Crisis Management Manual in which basic responses to be taken in emergency
situations are described.
2)
Business management risks are presented to the Board of Directors to determine
countermeasures.
3)
Daily operational risks are handled by documenting management rules and businessexecution manuals, etc.
System to ensure the efficient execution of duties of the Directors of the Company and its
subsidiaries
1)
The Company has introduced an executive officer system to vitalize the Board of
Directors through clarifying that the role of the Board of Directors is to determine theoverall corporate management policies and supervise business execution. The Company- 32 -

2)

3)
4)

works to accelerate decision-making and enhance the business execution function at thepractical level through clarifying the roles and responsibilities of persons responsible forbusiness execution.
In the business operation of the Company, the Management Planning Committee,
consisting of Directors and the General Manager of the department in charge, formulates
operation policy and management plans. The Board of Directors discusses anddetermines the said policy and plans, and systematic and organizational execution ofbusiness is conducted based on the policy and plans. Executive Officers in charge
regularly report the progress of business execution to the Board of Directors forverification.
The Company has set basic rules and other matters concerning IT control in order toensure the efficiency of the business execution of the Company and its subsidiaries.
The Company has formulated rules and introduced a teleconference system between the
Hachinohe Head Office and the Tokyo Head Office in order to enable the participationof Outside Directors in all the Board of Directors meetings for decision-making.

(4)

System to ensure the execution of duties of Directors and employees of the Company incompliance with laws and regulations and the Articles of Incorporation of the Company
1)
The Board of Directors has set the Management Policy, the Corporate Code of Ethics,
and the Standard of Corporate Conduct, among others.
2)
The Company works to enhance compliance through establishing the Internal Control
Committee as a structure to ensure the execution of duties of the Directors and employees
in compliance with laws and regulations and the Articles of Incorporation of theCompany.
3)
The Company eliminates any relationship with anti-social forces and other similar groups
that threaten the order and safety of civic society, and resolutely rejects any requests fromthem. The Company has already established a contact point, and centrally manages
information and always collaborates with the police, the Tokyo Metropolitan Police
Department’s Special Violence Prevention Measures Association (Tokubouren), andexternal expert institutions.
4)
The Company has introduced a teleconference system between the Hachinohe Head
Office and the Tokyo Head Office in order to enable the participation of Outside
Directors in all the Board of Directors meetings for decision-making.
5)
The Company has established the Internal Audit Dept. under the direct control of theBoard of Directors, and the department implements “organizational and system audits,”“operational audits,” “accounting audits,” and “daily monitoring” in collaboration with
Auditors.
6)
The Company has established a whistle-blowing system (internal and external contact
points) based on the Rules of Whistle-blowing System. Whistle-blowing reports are
submitted to the Board of Auditors, and specific cases are reported to the Board of
Directors.
Disadvantageous treatment of whistle-blowers as a result of whistle-blowing is
prohibited.

(5)

System to ensure the appropriateness of duties at the Group1)
The Company has established a system to ensure the appropriateness of duties ofsubsidiaries through assigning persons in charge of internal control and crisis
management at its subsidiaries under the guidance of the Company and making thepersons attend the Internal Control Committee and the Risk Management Committee at
the Company as necessary.
2)
The Internal Audit Dept. of the Company implements audits in order to ensure theappropriateness of duties at consolidated subsidiaries.
3)
Directors of each consolidated subsidiary regularly report the operating conditions of theconsolidated subsidiary to the Board of Directors.
4)
The Company has established a whistle-blowing system (internal and external contact
points) based on the Rules of Whistle-blowing System. Whistle-blowing reports are
submitted to the Board of Auditors, and specific cases are reported to the Board of
Directors.
The whistle-blowing system covers matters concerning subsidiaries, associates, andbusiness partners, and other related entities. The Company ensures that thewhistleblowers will not receive disadvantageous treatment in association with such
- 33 -

internal reporting and prohibits such disadvantageous treatment.
(6)

System of employees to support the duties of Auditors of the Company
At the requests of Auditors, the Company may appoint employees belonging to the Internal
Audit Dept. as persons to support the duties of Auditors, in order to strengthen the collaboration
between Auditors and the Internal Audit Dept., and have the employees support Auditors to theextent that it does not negatively affect their primary duties. The Board of Directors exchanges
opinions with the Board of Auditors as needed.

(7)

System for Directors and employees of the Company to report to Auditors of the Company
1)
Directors of the Company immediately report to Auditors in accordance with laws andregulations when they identify facts which may potentially cause substantial damage to
the Company.
2)
Directors of the Company allow Auditors to attend the Board of Directors meetings andother important meetings. Directors shall follow the instruction of Auditors with regard
to the inspection of Auditors’ important documents and the investigation into the businessand assets of the Company.
3)
As regards whistle-blowing reports to Auditors, employees, etc. of the Company,
directors, auditors, and employees, etc. of its subsidiaries, and those who have received
reports from them shall not be treated disadvantageously.
4)
The Company shall promptly process the prepayment and redemption of expenses
incurred in connection with the execution of duties of Auditors, expenses for the
execution of the said duties, and debt disposal.
5)
For the fair execution of duties of Directors of the Company, the Company enables all of
the four Auditors (of which three are Outside Auditors), including part-time Auditors, toattend all Board of Directors meetings.

(8)

System to ensure the reliability of financial reports of the Company
In order to ensure the reliability of financial reports of the Company and its subsidiaries, theCompany sets various related rules, identifies and manages the risks of causing fraud or error
in financial reports, designs, operates and evaluates prevention and monitoring functions, andcorrects deficiencies, if any.

(9)

Overview of the status of implementation of systems to ensure the appropriateness of theCompany’s business operations
1)
The Board of Directors met 22 times to decide on matters stipulated by laws andregulations, etc. and important matters concerning management. Communication among
the Directors is encouraged, and the Directors oversee the execution of each other’s
duties.
2)
The Board of Auditors met 15 times to discuss and decide audit policies and schedules
and to audit the Directors’ execution of their duties and the status of compliance withlaws and regulations, the Articles of Incorporation, etc.
3)
The Risk Management Committee met 4 times to confirm the status of management ofrisks concerning the Company as a whole and activity policies for the following year,
deal with accidents, and conduct tsunami evacuation plans and training.
The Committee has also established a Crisis Management Manual for situations that are
anticipated to cause a material impact on management and is making efforts to establish
measures for dealing with such events and preventing them from happening.
4)
The Internal Control Committee met three times to evaluate the establishment of internal
control systems and the status of their implementation. It is also working to strengthen
compliance through regular confirmation of the status of compliance with laws andregulations and through education.
5)
Auditors and the internal audit division held four information exchange meetings andthey exchange information when necessary regarding internal audit results, etc.
Outside Directors also take part in these information exchanges.
6)
Whistle-blowing contact points have been established within and outside the Company
for reporting breaches of laws and regulations and internal rules, etc. They provide
thorough protection of whistleblowers and strive for the early detection and remediationof breaches, etc.

- 34 -

7. Policy Concerning Decisions on Distribution of Surplus, etc.
(1)

Dividend Policy
The Company considers the return of profits to shareholders to be an important management
issue and distributes dividends with the aim of a consolidated payout ratio of 30%, whileworking to enhance and strengthen the corporate structure.
The Company also positions internal reserves as a fund for responding functionally to changes
in the management environment and will use them for various purposes, including securingresources, the development of new technologies, capital expenditure, and the acquisition of treasury
shares as part of the Company’s capital policy.

(2)

Distribution of Surplus
The Company's basic policy is to pay dividends twice a year, an interim dividend and a year-end dividend,
and the Articles of Incorporation stipulate that the Company may pay dividends from surplus by
resolution of the Board of Directors, pursuant to Article 459, Paragraph 1 of the Companies
Act.
With regard to dividends for the fiscal year under review, in accordance with the Company’s
dividend policy, we regret to inform you that we will forego payment of year-end dividends
following interim dividends, as the Company recorded a loss attributable to owners of parent for thefull fiscal year in the extremely severe business environment.

The amounts shown in this Business Report and the figures for the number of shares are rounded to theunit used for presentation.

- 35 -

Consolidated Balance Sheets(Million yen)
Description(Reference)
As of March
31, 2023(Reference)
As of March
31, 2023

As of March
31, 2024

2,539

1,674

760

234

1,018

892

Income taxes payable

747

Provision for bonuses

95

117

Provision for restoration cost

–

5

657

376

4,252

3,055

50

59

2,087

1,135

631

547

11

2

Provision for loss contract

1,273

1,273

Provision for restoration cost

187

14

Other

10

23

6,791

4,729

67,491

66,609

Share capital

13,922

13,922

Capital surplus

3,481

3,481

Retained earnings

50,54049,658

(452)

(452)

4,254

2,176

3,831

1,183

593

400

(510)

179

340

412

287

274

Total net assets

72,03469,060Total liabilities and net assets

78,82573,790

As of March
31, 2024

Description
Liabilities

AssetsCurrent assets

44,247

41,814Current liabilities

Cash and deposits

16,84821,758Notes and accounts payable trade

Accounts receivable - trade

6,593

5,001

Securities

1,500

2,199

8,204

7,303

361

257

5,836

3,521

Merchandise and finished
goodsWork in process
Raw materials and supplies

4,904

1,773

(1)

(1)

34,577

31,975

8,383

7,388

2,424

2,059

852

945

Land

4,777

4,304

Other

329

77

Intangible assets

239

285

25,95424,301

25,51823,687Retirement benefit asset

198

476

Other

243

142

(5)

(5)

78,82573,790Other
Allowance for doubtful
accounts
Non-current assets
Property, plant andequipment
Buildings and structures
Machinery, equipment andvehiclesInvestments and otherassetsInvestment securities

Allowance for doubtful
accounts
Total assets

Accrued expenses

Other
Non-current liabilities
Retirement benefit liability
Deferred tax liabilities
Deferred tax liabilities forland revaluation
Provision for environmental
measuresTotal liabilities
Net assets
Shareholders’ equity

Treasury shares
Accumulated othercomprehensive income
Valuation difference on
available-for-sale securities
Revaluation reserve for land
Foreign currency translation
adjustment
Remeasurement of defined
benefit plans
Non-controlling interests- 36 -

Consolidated Statements of Income(Million yen)

(Reference) From April 1, 2022 From April 1, 2023 to March
to March 31, 2023
31, 2024

Description
Net sales

34,852

15,521

Cost of sales

45,144

22,637Gross loss

(10,292)(7,115)

2,296

1,998

852

344

1,443

1,653

(12,588)(9,114)

7,803

7,183

Interest income

13

24

Dividend income

459

229

Rental income from real estate

103

107

7,066

6,053

–

696

160

73

175

188

Interest expenses

00Foreign exchange losses

4–

Rental expenses on facilities

18

15

Commitment fees

26

27

Commission for syndicated loans

453

Loss on disposal of inventories–

31

Foreign withholding tax

64

33

Provision for environmental measures

34

13

Other

22

13

Ordinary profit (loss)(4,960)(2,119)Extraordinary income

1,241

2,646

Gain on sale of non-current assets

07Gain on sale of investment securities

386

2,638

Received incentive

854–

Extraordinary losses

567

1,137

Impairment losses–

977

Loss on retirement of non-current assets

115

160

Loss on retirement of inventories

34–

Restoration expenses on facilities

418–

Profit (loss) before income taxes(4,287)(611)

Income taxes - current

501

390

Income taxes - deferred

237

85

(5,026)(1,087)0(13)(5,026)(1,074)

Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Operating loss
Non-operating income

Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Non-operating expenses

Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent- 37 -

Non-Consolidated Balance Sheets
Description(Reference)
As of March
31, 2023

As of March
31, 2024

Description(Million yen)
(Reference)
As of March
31, 2023

As of March
31, 2024

2,458

1,624

Liabilities

AssetsCurrent assets

43,733

41,344Current liabilities

Cash and deposits

16,315

21,298

Accounts payable - trade

768

237

Accounts receivable - trade

6,528

4,928

Accounts payable - other

525

255

Accrued expenses

976

886

Securities

1,500

2,199

Provision for bonuses

74

102

Merchandise

417

301

Provision for restoration cost–

5

Finished goods

7,883

7,090

113

138

3,819

2,276

Raw materials

4,890

2,697

68

–

Work in process

365

260

Provision for retirement
benefits
Deferred tax liabilities

1,637

426

Supplies

885

752

631

547

Advance payments to
suppliers

1,302

1,273

11

2

Other

3,645

541

Provision for loss contract

1,273

1,273

(0)

(0)

Provision for restoration cost

187

14

Other

17,956

12,2381012

Non-current assets

Total liabilities

Property, plant andequipment

6,278

3,901

8,197

7,213

Net assets

Buildings

2,262

1,822

51,06648,257

Share capital

13,922

13,922

Land

4,777

4,304

Capital surplus

3,481

3,481

Other

1,156

1,086

3,481

3,481

34,11631,307239

285

Legal retained earnings

382

382

Investments and otherassets

9,519

4,739

Other retained earnings

33,73430,925General reserve

10,30010,300Investment securities

6,908

2,206

23,434

20,625

Shares of subsidiaries andassociates

Retained earnings brought
forward

2,378

2,378

(452)

(452)

–

20

4,344

1,423

238

138

3,751

1,022

(5)

(5)

593

400

Total net assets

55,411

49,681

61,68953,582

Total liabilities and net assets

61,68953,582

Allowance for doubtful
accounts

Intangible assets

Prepaid pension costs
Other
Allowance for doubtful
accounts
Total assets

Other
Non-current liabilities

Deferred tax liabilities forland revaluation
Provision for environmental
measuresShareholders’ equity

Legal capital surplus
Retained earnings

Treasury shares
Valuation and translation
adjustments
Valuation difference on
available-for-sale securities
Revaluation reserve for land

- 38 -

Non-Consolidated Statements of Income(Million yen)
(Reference) From April 1, 2022 From April 1, 2023 to March
to March 31, 2023
31, 2024

Description
Net sales

34,095

14,752

Cost of sales

44,427

21,868Gross profit(10,331)(7,116)

2,232

1,935

882

360

1,350

1,575

Operating profit (loss)(12,564)(9,051)Non-operating income

5,470

5,008

Interest income

13

24

Dividend income

5,214

4,126

113

114

–

696

129

46

167

188

Interest expenses

00

Rental expenses on facilities

18

15

Commitment fees

26

27

Commission for syndicated loans

453Foreign withholding tax

64

33

Provision for environmental measures

34

13

Loss on disposal of inventories

–

31

Other

18

13

Ordinary profit (loss)(7,261)(4,231)

Extraordinary income

1,238

2,646

Gain on sale of non-current assets–

7

Gain on sale of investment securities

386

2,638

Received incentive

852–

Extraordinary losses

567

1,124

Impairment losses–

963

Loss on retirement of non-current assets

115

160

Loss on retirement of inventories

34–

Facility restoration expenses

418–

Profit (loss) before income taxes(6,590)(2,709)

Income taxes - current

491

387

Income taxes - deferred

17

(95)

(7,098)(3,000)

Selling, general and administrative expenses
Selling expenses
General and administrative expenses

Rental income from real estate
Foreign exchange gains
Other
Non-operating expenses

Profit (loss)- 39 -