Inabata & Co., Ltd.
May 09, 2024

Implementation Status of Dialogue with Shareholders in FY2023
At Inabata & Co., Ltd., we actively engage in dialogue with shareholders and investors,
with the aim of promoting sustainable growth and enhancing our corporate value over the
medium to long term. The following is a report on the implementation of our dialogue withshareholders in FY2023.
1. Structure for Promoting Investor Relations (IR)⚫

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Our President leads the IR efforts, supported by Director, Senior Managing Executive
Officer, a designated officer responsible for IR (“IR Officer”). The president and the
director/senior managing executive officer, who is a designated officer responsible forinvestor relations (“IR officer”), mainly engage in dialogue with shareholders andinvestors, with some engagements handled by the IR Department.
Our dedicated IR Department works in collaboration with related departments to gather
and analyze various business data. This ensures the timely and accurate distribution of
information within the company and to the public.

2. Summary of IR Activities
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We proactively seek to arrange meetings with investors to the extent reasonable.
We also consider accommodating requests for engagement with our outside
directors to the extent practical.
We organize biannual financial result briefings where we explain the progress of our
Medium-Term Management Plan and present an overview of our financial results.
We foster opportunities for dialogue with individual shareholders and investors byparticipating in IR events.
We actively disseminate information through various mediums such as our website,
integrated reports, shareholder newsletters, and shareholder meeting notices.

[Record of IR Activities for FY2023]
Activities

Frequency

Financial results briefings

2 times

One-on-one meetings with institutional investors & analysts

62 times(including foreign investors and analysts)
One-on-one meetings between the Company's outside directors andinstitutional investors

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May 09, 2024

3. Feedback to the Board of Directors
Our Board regulations require that shareholder opinions and concerns gathered throughour dialogue with shareholders be incorporated into the IR Officer's activity report at least
once a year. In practice, we regularly provide feedback regarding meetings with investors to
the Board of Directors approximately three times a year. In FY2023, we reported on IRrelated matters, including providing feedback on specific opinions and requests frominvestors, at the Board of Directors meetings held in May and August 2023, and January
2024.
4. Main Topics of Discussion
1) Direction of the Next Medium-Term Management Plan
Discussion with: Domestic institutional investors (active fund managers)
Q: Under the current medium-term management plan, it looks like you will be able toachieve record profits even though the business environment is not necessarily favorable,
but I think further growth will not be easy going forward. What is your vision for growth in
the next fiscal year and beyond?
A: We plan to pursue growth mainly in fields where market growth is expected and where
we have strengths. In the two major segments of Information & Electronics and Plastics,
which are currently our earnings drivers, we are considering presenting medium- and longterm target figures for the environmental and energy fields (Information & Electronics) andautomotive resins (Plastics), which we believe will drive future growth. In addition to
growing organically, we believe we need to accelerate investments at the same time.
[Our views, understanding, and response]
While there were doubts about our growth going forward, we were able to explain to
stakeholders our vision for growth by providing specific examples of business fields andmethods and gain their understanding. In addition, we began presenting numericaltargets for environmental and energy fields and automotive resins in our new mediumterm management plan, which kicked off this fiscal year, based on our impression frominvestor meetings that presenting numerical targets for growth-driving businesses andfields would be more convincing.
* Disclosed Medium-term Management Plan NC2026 on May 9, 2024.
https://www.inabata.co.jp/english/investor/management/midterm_plan/2

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May 09, 2024

2) Business Model and Our Company's Strengths
Discussion with: Domestic and foreign institutional investors (active fund managers andresponsible investment managers)
Q: I believe you have the opportunity to talk with various investors, but are there any areas
you feel investors do not fully understand or are not aware of?
A: Foreign investors often do not understand the business model of trading companies, and
it is difficult for them to picture our growth. Trading companies fulfill a wide range of functions,which are often difficult to convey unless they are explained with specific examples, butsometimes it is difficult to provide in-depth explanations because they involve customer
information. We believe that we have strengths in manufacturing and processing functions
such as for compounds, as well as procurement capabilities in specific fields where we canleverage our long-cultivated relationships with customers and information intermediaryfunctions when supply chains are disrupted, as we demonstrated during the COVID-19
pandemic. We must communicate as clearly as possible why we are able to perform thesefunctions.
[Our views, understanding, and response]
We are having an increasing number of first-time one-on-one meetings with both
domestic and foreign investors, and have reaffirmed the need to carefully explain andhave them understand how trading companies, and in particular our company, provide
added value in the supply chain and why we are an essential component of it. We would
like to explain this at financial results briefings and through dialogue while presenting as
many easy-to-understand examples and materials as possible.

3) Target Fields for Growth Investment, etc.
Discussion with: Domestic institutional investors (active fund managers)
Q: What fields are you looking into in terms of investments aimed at accelerating growth?
A: We are considering strengthening our manufacturing and processing functions. For
example, the business environment is changing in our core Plastics business, and we see
opportunities there. With regard to our compounding capabilities*, which are one of ourstrengths, the level of quality assurance and other requirements from manufacturers, ourcustomers, is on the rise. Accordingly, we are looking at strategies to enhance ourcompounding capabilities to differentiate our products and expand earnings in the Plastics
business.
In addition, customers are increasingly requesting to procure recycled plastics that have
low environmental impact even if they cost more, and we believe that by responding tothese requests, including collecting materials, we will be able to expand our earnings.
*Compounding capabilities: Adding colorants, flame retardants, etc. to raw material resins to give themnew properties according to the intended use of the plastic. We operate seven compound manufacturing3

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May 09, 2024

and processing bases in seven countries, mainly in Asia, with a total annual production capacity of
approximately 190,000 MT/Y.

[Our views, understanding, and response]
Since we have not made significant growth investments in the past, investors had concerns
about our specific investment vision and scale, as well as whether we have attractive
investment target fields as we move toward making more proactive growth investments.
By explaining our approach using examples from our Plastics business, an area in which
we have strengths, we were able to help investors understand the synergies with our corebusiness and picture how it would contribute to earnings growth.

4) Track record of growth investment
Discussion with: Foreign institutional investors (active fund managers)
Q: There seems to be an increase in new investment projects recently. Could you tell us
about the details and aims of some of the major ones?
A: We are accelerating our pace of investment in the current Medium-Term Management
Plan. For example, in the environmental and energy fields, we are participating in a biomass
power generation project. We are involved in this project mainly to procure unused thinned
wood for fuel, which we consider to be a meaningful business that makes use of Japan's
forest resources. Some of the fuel is imported from overseas, but we aim to increase the ratioof domestic procurement.
Also in the environmental and energy fields, we have established a new company in the US
with Toyo Ink SC Holdings Company, Limited (now artience Co., Ltd.) and are involved in thebusiness of lithium-ion battery-related materials. With EV demand projected to grow over the
medium to long term, we are making investments commensurate with our scale, and this is
a project that could lead to the next phase of development.
Furthermore, in the Life Industry segment, we made Daigo Tsusho, which processes andsells eels, a subsidiary to expand into the upstream and downstream areas of the foodindustry. Daigo Tsusho also operates an e-commerce site, and in the future, we expect
synergies such as selling processed agricultural and marine products that we procure
domestically and internationally on this site.
[Our views, understanding, and response]
During our investor dialogue in FY2022, we received comments that our disclosure
regarding our growth investment track record was inadequate, and we havestrengthened our efforts to provide explanations through timely disclosures and postingsummaries of our growth investment performance on our website. As a result, in FY2023,
this subject came up more frequently during our dialogue, and we were able to deepen
investor understanding not only of individual projects, but also of our business andstrategy.

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May 09, 2024

5) Presentation of Capital Allocation Plan
Discussion with: Domestic institutional investors (responsible investment managers)
Q: It is very important for investors to know how a company intends to use its funds to makean investment decision. We would also like to see the capital allocation plan when the new
Medium-Term Management Plan is disclosed.
A: We plan to disclose this information in the new Medium-Term Management Plan. Since
we have made ample progress in improving our financial position, we intend to present our
respective allocations in a manner that strikes a balance between investments andshareholder returns.
[Our views, understanding, and response]
Taking into consideration the fact that our financial health has improved compared to thepast, we have been stepping up shareholder returns and investment since FY2021. As aresult, we have very frequently received questions about whether we will place moreemphasis on shareholder returns or growth investment in the next Medium-Term
Management Plan, as well as how significant our growth investment will be.
We have always had a view of capital allocation internally and decided to present it in the
new Medium-Term Management Plan, as we believe that clearly stating it will help
investors in their decision-making process.
* Disclosed the capital allocation in the Medium-term Management Plan NC2026 on May 9, 2024.
https://www.inabata.co.jp/english/investor/management/midterm_plan/

6) Measures to Realize Management Conscious of Cost of Capital and Share Prices
Discussion with: Domestic and foreign institutional investors (active fund managers andresponsible investment managers)
Q: I appreciate that you provided early and detailed disclosures. You have listed several
measures to boost share price, but what do you consider to be the most important?
A: We believe the most important measure is to raise growth expectations by steadily
implementing growth measures. To date, we have not made many significant investments,
but with existing businesses steadily growing and our financial position improving, we intend
to accelerate our growth by making more proactive investments.
Q: On the other hand, what specific initiatives will you be carrying out to improve return on
capital and lower the cost of capital?
A: It is difficult to boost return on capital in a single leap for a trading company, but we arelooking at initiatives such as increasing manufacturing and processing functions to add value
and raise our return on capital.
As for lowering our cost of capital, we need to reduce our information gap in the market byfurther enhancing information disclosure and dialogue (explanation) with investors, while also5Inabata & Co., Ltd.
May 09, 2024

taking direct actions such as using debt and repurchasing and canceling treasury shares.
[Our views, understanding, and response]
In FY2023, many investors brought up our disclosure regarding the company’s measures
to realize management conscious of cost of capital and share prices in discussions. We
believe that by disclosing our policy at a relatively early date on June 5, 2023, we wereable to have discussions based on the content of the disclosure, thus gaining investor
understanding for the most part. Going forward, we plan to present our progress at the
FY03/24 Financial Results Briefing in June 2024.
* We disclosed our measures to realize management conscious of cost of capital and share prices at our
financial results briefing held on June 2023. We also plan to present our progress at our financial results
briefing to be held in June 2024.
https://www.inabata.co.jp/archives/001/202403/ir_briefing20230605.pdf

7) Gender Balance on the Board of Directors
Inabata representative: Independent external directors
Discussion with: Domestic and foreign institutional investors (responsible investment
managers)
Q: What do you view as issues with regard to promoting diversity on the Board of
Directors?
A: We believe that it is still a work in progress, and we are actively engaging in discussions
to respond to the needs and changes in the world. Specifically, we recognize that it is notenough to simply have one female director, but that we need to ensure further diversity, andthe Nominating and Remuneration Committee is discussing ways to identify candidates forfemale directors. In addition, the committee is also engaged in discussions on taking abroader view of diversity that goes beyond gender to appoint non-Japanese and otherdirectors with diverse backgrounds.
[Our views, understanding, and response]
Starting in June 2022, we transitioned to a monitoring-centered board in which outside
directors make up the majority of the board. By explaining in detail how outside directors
with various skills and backgrounds play a role in actual board discussions, etc., we
believe that we have been able to help investors understand our approach regarding thebenefits of ensuring diversity and our determination to promote it further.

8) Utilizing Human Capital
Discussion with: Domestic institutional investors (responsible investment managers)
Q: What do you think is necessary to promote female participation in the company, such asappointing female internal officers?
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May 09, 2024

A: In general, trading companies as an industry lag behind in promoting women, and weneed to start by increasing the number of female managers. This is something we need todo systematically, including through our personnel system, in line with the target set by theJapanese government in its “Priority Policy for Women's Advancement and Gender Equality
2023” to increase the ratio of female managers to 30% or more by 2030.
Furthermore, we believe that we must promote changes in our corporate culture andinternal awareness. Since there is still a strong preconceived notion in Japanese society as
a whole, including our company, that housework and childcare are primarily the
responsibility of women, we need to work steadily to increase the rate of male employees
taking childcare leave, among other things.
[Our views, understanding, and response]
We have been working on improving our systems not only for female participation but
also senior participation, etc. By introducing specific initiatives, we were able to gain acertain level of understanding of our stance and approach. Going forward, we willcontinue to report on our progress based on targets such as the ratio of female
managers and the ratio of male employees taking childcare leave. Regarding the topic ofutilizing human capital, one of our issues lies in further training local staff and promoting
them to senior management positions at our overseas subsidiaries. We intend to report
our progress on this as well.
Disclosed Medium-Term Sustainability Plan on May 9, 2024
https://www.inabata.co.jp/sustainability/about/midterm_plan/9) Sustainability Disclosure
Discussion with: Domestic institutional investors (responsible investment managers)
Q: You are moving forward with sustainability initiatives and disclosures, such as by starting
to provide disclosures in line with TCFD recommendations in June 2022, but what are yourpriorities for future initiatives?
A: The main focus will be on addressing climate change and making contributions throughour business, such as by expanding sales of products that reduce environmental load.
For reducing greenhouse gas emissions, we are looking into setting a concrete path towardachieving our already disclosed 2050 Carbon Neutrality Declaration. In addition, withregard to making contributions through our business, we plan to set specific KPIs andtarget figures and report on our progress regularly.
.
Q: Regarding your carbon neutrality initiatives, you currently cover Scope 1 and 2
emissions, but are you considering setting targets that include Scope 3 emissions in the
future?
A: Trading companies are involved in purchasing goods from a wide variety of sources,
which falls under Category 1 of Scope 3, and this inevitably results in a higher GHG
emissions figure. In addition, it is difficult to exercise control over product selection. On the7Inabata & Co., Ltd.
May 09, 2024

other hand, we are aware that investors expect us to set targets that include Scope 3, andwe would like to get creative where possible and explore ways of disclosing information.
[Our views, understanding, and response]With the emergence of various issues related to sustainability, we believe that we havereached a point where we need to systematically organize and disclose what issues wewill prioritize, what KPIs and targets we will set, and how we will manage progress.
Accordingly, we decided to summarize this information and disclose it as our MediumTerm Sustainability Plan in May 2024.

10) Information Security and Digital Strategy
Discussion with: Domestic institutional investors (responsible investment managers)
Q: Since trading companies have many business partners and many overseas offices, I
believe information security becomes an important priority, but what is your company's
approach and initiatives toward ensuring information security?
A: We believe enhancing information security for the entire group is an importantmanagement priority, and in light of remote work and other increasingly diverse work styles,
we have introduced and are operating a system in line with an international framework forincident response. Specifically, we were among the first to adopt the so-called zero trust
approach, and have introduced an endpoint security system, including at overseas bases.
We have also established an in-house CSIRT (security incident response team) andestablished a 24-hour, 365-day monitoring system in cooperation with externalorganizations.
In addition, we are introducing a new data management platform as we believe it isimportant to support sales activities and various operations through digital technology,
including by using generative AI and RPA, to expand existing businesses and develop new
projects.
[Our views, understanding, and response]
We have historically made efforts to take various measures to ensure information
security, and we believe that we should appropriately disclose these measures andexplain the main points in our dialogue going forward.
Furthermore, we would like to explain our initiatives and progress in utilizing digitaltechnology, which will help boost earnings.

5) Future Approach
Since FY2023 was the final year of our medium-term management plan NC2023, many
dialogue with shareholders and investors focused on our intent and vision for growth in thefollowing fiscal year and beyond. Based on the opinions and suggestions gained from such
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May 09, 2024

dialogue, we held discussions involving all directors. We incorporated the views of those
responsible for business execution divisions to formulate our new Medium-Term
Management Plan NC2026, which we announced today on May 9, 2024.
Moreover, in FY2023, we were able to engage in a lot of dialogue and received usefulcomments and suggestions thanks to the relatively early disclosure of our measures torealize management conscious of cost of capital and share prices.
For FY2024, we will continue to pursue initiatives to ensure sustainable growth andenhance corporate value through constructive dialogue, focusing on the details of our new
Medium-Term Management Plan, NC2026. We will continue to report on our progress atthe same time next year.
We held slightly more one-on-one meetings in FY2023 than in FY2022, but the number isstill need to be large. We will continue to improve our information disclosure in various
ways, and we hope you will take an interest in our activities.
Kenichi Yokota, Director, Senior Managing Executive Officer in charge of IR

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