Annual Securities Report
From January 1, 2023 to December 31, 2023
(72nd Term)-1-

Annual Securities Report
1. This Report was prepared from data submitted via EDINET (Electronic
Disclosure for Investors’ NETwork) for the Annual Securities Report as
required by Article 24, Paragraph 1, of the Financial Instruments andExchange Act of Japan, pursuant to Article 27-30-2 of that Act. This Reportadds pagination and a table of contents.
2. The audit report attached to the Annual Securities Report submitted by theabove method and the Internal Controls Report and Confirmation Letter
submitted together with the above Annual Securities Report are attached at
the end of this Report.

-2-

Contents

Page
Annual Securities Report for 72nd Term
Cover sheet ......................................................................................................................................................................................4
Part 1. Company information ....................................................................................................................................................5I.

Company overview ........................................................................................................................................................5
1. Trends in KPIs, etc. .................................................................................................................................................5
2. History .....................................................................................................................................................................7
3. Lines of business .....................................................................................................................................................8
4. Affiliate companies .................................................................................................................................................10
5. Employees ...............................................................................................................................................................11II.

Business conditions........................................................................................................................................................13
1. Management policies, business environment, topics, etc.........................................................................................13
2. Sustainability concepts and initiatives .....................................................................................................................15
3. Business and other risks ..........................................................................................................................................19
4. Management’s analysis of financial standing, business results, and cash flows ......................................................20
5. Important business contracts, etc. ............................................................................................................................25

III.

6. Research and development activities .......................................................................................................................25
Facilities.........................................................................................................................................................................27
1. Overview of capital investment ...............................................................................................................................27
2. Status of major equipment .......................................................................................................................................27

IV.

3. Plans for new facilities, removal of facilities, etc. ...................................................................................................28
Status of the Company ...................................................................................................................................................29
1. Stock, etc. ................................................................................................................................................................29
2. Acquisition of treasury share, etc. ...........................................................................................................................33
3. Dividend policy .......................................................................................................................................................34
4. Corporate governance ..............................................................................................................................................35

V.

VI.

Accounts ........................................................................................................................................................................59
1. Consolidated financial statements, etc. ....................................................................................................................60
2. Financial statements, etc. .........................................................................................................................................97
Overview of stock administration by the Company .......................................................................................................110

VII. Reference information on the Company ........................................................................................................................111
1. Information on the parent company of the Company ..............................................................................................111
Part 2.

2. Other reference information ....................................................................................................................................111
Information on the Company’s guarantors ....................................................................................................................112

Audit Report
Internal Controls Report
Confirmation Letter-3-

Cover sheet
Document submitted:

Annual Securities Report

Underlying legal provisions:

Article 24, Paragraph 1, of the Financial Instruments and Exchange Act of Japan

Submitted to:

Director, Kinki Local Finance Branch Bureau

Date submitted:

March 28, 2024

Business year:

72nd Term (January 1 – December 31, 2023)

Company name:

ザ・パック株式会社

Company name in English:

The Pack Corporation

Name and title of representative:

Hideaki Yamashita, President & CEO

Head office:9-3 Higashiobase, Higashinari-ku, Osaka, JapanTel.:+81-6-4967-1221

Administrative contact:

Ikuo Shimomura, Divisional General Manager of Corporate Division

Nearest contact address:

9-3 Higashiobase, Higashinari-ku, Osaka, JapanTel.:+81-6-4967-1221

Administrative contact:

Ikuo Shimomura, Divisional General Manager of Corporate Division

Viewing locations:

The Pack Corporation
9-3 Higashiobase, Higashinari-ku, Osaka, JapanTokyo Stock Exchange, Inc.
2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo, Japan-4-

Part 1. Company information
I.

Company overview

1.

Trends in KPIs, etc.
(1)

Indicators of consolidated business performance
Fiscal year

Fiscal year ended

68th

69th

70th

71st

72nd

December
2019

December
2020

December
2021

December2022

December
2023

Net sales(¥ million)

95,50278,44579,69089,06097,714

Ordinary income(¥ million)

7,199

3,606

4,422

6,353

8,063

Profit attributable to owners ofparent(¥ million)

4,700

2,392

2,824

4,058

5,652

Comprehensive income(¥ million)

4,763

2,368

3,325

4,362

7,059

Net assets(¥ million)

58,49559,73962,03265,371

71,156

Total assets(¥ million)

88,446

83,55687,422

94,36598,847

Net assets per share(¥)

3,076.27

3,141.09

3,261.64

3,436.46

3,736.44

Net income per share(¥)

243.89126.01148.71

213.55297.07

Diluted net income per share(¥)

243.50125.85148.53213.38296.86

Capital adequacy ratio

(%)

66.0

71.4

70.9

69.2

71.9

Return on equity

(%)

8.2

4.1

4.6

6.4

8.3

Price-to-earnings ratio(times)

16.2

22.4

18.1

11.3

11.4

Cash flows from operating
activities(¥ million)

6,599

3,155

7,217

5,380

4,443

Cash flows from investing
activities(¥ million)(4,136)(5,013)(3,460)(3,762)(3,962)(¥ million)(3,319)(1,214)(1,029)(1,124)(1,407)(¥ million)

18,307

15,22418,067

18,653

17,812

1,252

1,240

1,198

1,183

1,183

(505)

(480)

(468)

(472)

(515)

Cash flows from financing
activities
Ending balance of cash andcash equivalents
Employees[average number of temporary
employees, not included
above](persons)

Note: The Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan [ASBJ] Statement No. 29, March
31, 2020) and related guidance have been applied since the 71st term. KPIs and other data for the 70th term reflect retroactive
application of these accounting standards.

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(2)

Indicators for the Company
Fiscal year

68th

69th

70th

71st

72nd

Fiscal year ended

December
2019

December
2020

December
2021

December2022

December
2023

Net sales(¥ million)

84,59969,05569,557

77,11785,485

Ordinary income(¥ million)

6,549

3,305

3,748

5,214

6,713

Net income(¥ million)

4,306

2,232

2,175

3,268

4,670

Capital(¥ million)

2,553

2,553

2,553

2,553

2,553

(thousand shares)

19,90019,90019,90019,90019,900Net assets(¥ million)

54,98955,67057,05359,426

63,790Total assets(¥ million)

81,19576,327

79,17285,29987,903(¥)

2,893.13

2,928.01

3,000.23

3,123.70

3,349.40

55.00

60.00

50.00

65.00

90.00

(¥)

(25.00)(30.00)(25.00)(30.00)(35.00)Net income per share(¥)

223.44117.61114.51

171.97245.44

Diluted net income per share(¥)

223.08117.45114.38171.83245.27

Capital adequacy ratio

(%)

67.6

72.9

72.0

69.6

72.5

Return on equity

(%)

8.0

4.0

3.9

5.6

7.6

Price-to-earnings ratio(times)

17.7

24.0

23.6

14.0

13.8

Dividend payout ratio

(%)

24.6

51.0

43.7

37.8

36.7

893

881

841

835

840

(416)

(402)

(390)

(393)

(436)

132

97

94

87

122

(118)

(127)

(143)

(140)

(179)

Total shares issued
and outstanding

Net assets per share
Dividends per share[interim dividend per share,included above]

Employees[average number of temporary
employees, not included
above](persons)

Total returns to shareholders[Indicator for comparison:
TOPIX including dividends](%)

Highest share price

(¥)

4,320

4,245

3,270

2,817

3,450

Lowest share price

(¥)

2,827

2,557

2,537

2,107

2,355

Note: Highest and lowest share prices are prices on the Prime Market of the Tokyo Stock Exchange since April 4, 2022, and on theFirst Section of the Tokyo Stock Exchange for earlier periods.

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2.

History

May 1952
July 1955

Nippon Case Corporation established and launches sales of paper cartons and apparel boxes.
Hanazono Plant opens in Higashiosaka. Integrated in-house production begins for products ranging fromMay 1957

corrugated boxes to apparel boxes.
Production of paper shopping bags begins.

December 1957
June 1958

Kobe Office (now Kobe Branch) opens.
Nagoya Office (now Nagoya Branch) opens.

September 1959
August 1960

Konoike Plant (now Osaka Plant) opens in Higashiosaka; production facilities expanded.
Fukuoka Branch and Kyoto Office (now the Kyoto Branch) open.

March 1961
September 1964

Tokyo Branch opens (now the Tokyo Head Office).
Expansion work completed at Konoike Plant. Hanazono Plant relocated. Full-scale multifaceted

July 1965

production and management structures established.
Sapporo Office (now the Hokkaido Branch) opens.

May 1966
May 1967

Hiroshima Office (now the Hiroshima Branch) opens.
Okayama Office (now the Okayama Branch) opens.

April 1968
September 1969

Sendai Office (now the Tohoku Branch) opens.
Nara Plant opens in Yamatokoriyama as a plant specializing in corrugated boxes. Urawa Plant opens inAugust 1974

Urawa.
Production of plastic bags begins.

September 1979
July 1983

Saitama Plant opens in Sakado; Urawa Plant relocated.
Company is renamed The Pack Corporation.

January 1987
November 1987

Yokohama Office (now the Yokohama Branch) opens.
The Pack America Corp. (now a consolidated subsidiary) established in the United States

August 1991
September 1991

Ibaraki Plant opens in Hitachi.
Stock listed on second section of Osaka Securities Exchange

January 1996
January 1998

The Nicols established
Kanto Branch opens.

January 1999
December 1999

Ibaraki Plant earns ISO 14001 (environmental management systems) certification.
Headquarters earns ISO 14001 (environmental management systems) certification.

April 2000
September 2001

Nara Plant earns ISO 9001 (quality management) certification.
Stock listed on second section of Tokyo Stock Exchange

October 2001
April 2002

Osaka, Saitama, and Ibaraki plants earn ISO 9001 (quality management) certification.
Nara Plant earns ISO 14001 (environmental management systems) certification.

October 2002
June 2003

Osaka and Saitama plants earn ISO 14001 (environmental management systems) certification.
Stock listed on first sections of Tokyo Stock Exchange and Osaka Securities Exchange

October 2003
December 2003

Keihin Tokushu Printing Corp. (now a consolidated subsidiary) established
Shanghai Office opens in China.

March 2006
November 2006

The Pack (Shanghai) Corporation (now a consolidated subsidiary) established in China
All sites earn ISO 14001 (environmental management systems) certification.

April 2007
August 2007

Additional shares acquired in Nikko Print Corporation (now a consolidated subsidiary)
The Pack (Changshu) Co., Ltd. (now a consolidated subsidiary) established in China

February 2009

Headquarters, Tokyo and Osaka plants, and sales offices earn FSC® CoC certification (FSC® C020517).
Pack Takeyama Co., Ltd. (now a consolidated subsidiary) established

April 2009
July 2011

All sites earn ISO 9001 (quality management) certification.
Tokyo Plant opens in Hidaka, Saitama Prefecture; Saitama Plant relocated.

January 2014
June 2014

The Nicols merged through absorption-type merger
Acquired all shares of stock in Nishinihon Printing Co., Ltd. (now a consolidated subsidiary), making it

December 2016

a wholly owned subsidiary
All paper products production and sales sites in Japan earn FSC® CoC certification (FSC® C020517).

April 2018
December 2018

Acquired stock in Kannaru Printing Co., Ltd. (now a consolidated subsidiary), making it a subsidiary.
Tokyo and Osaka plants earn FSSC 22000 (food safety) certification.

April 2022
March 2023

Listing transferred to the Prime Market of the Tokyo Stock Exchange
New headquarter building completed in Higashinari-ku, Osaka

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3.

Lines of business
The Pack Group consists of nine companies, the Pack Corporation and eight consolidated subsidiaries.
The Group’s business activities include the manufacture and sale of paper products, film packaging, and other products, as well
as related research, logistics, services, and other activities.
The Group’s businesses are positioned as outlined below.
Segment
Paper Products

Lines of businessCompanies

Manufacture, purchase, and sale of paperbags, printed folding paper cartons,

The Pack Corporation
Keihin Tokushu Printing Corp.

corrugated boxes, etc.

Nikko Print Corporation
Pack Takeyama Co., Ltd.
Nishinihon Printing Co., Ltd.
Kannaru Printing Co., Ltd.
The Pack America Corp.
The Pack (Shanghai) Corporation
The Pack (Changshu) Co., Ltd.

Film Packaging

Manufacture, purchase, and sale of plastic
bags, garment bags, etc.

The Pack Corporation
Pack Takeyama Co., Ltd.
The Pack America Corp.
The Pack (Shanghai) Corporation

Other Businesses

Purchase and sale of gifts, supplies, pricetags, design production, advertising and

The Pack Corporation
Pack Takeyama Co., Ltd.

promotional materials, etc.

Nishinihon Printing Co., Ltd.
Kannaru Printing Co., Ltd.
The Pack America Corp.
The Pack (Shanghai) Corporation

The Pack America Corp. is a U.S. subsidiary selling products primarily in the U.S.
The Pack (Shanghai) Corporation and The Pack (Changshu) Co., Ltd. are Chinese subsidiaries. The Pack (Shanghai) Corporation
sells products primarily in China, while The Pack (Changshu) Co., Ltd. produces paper bags for sale in China and to theCompany in Japan.

-8-

Products

Subcontracting ofproduction(Manufacture, purchase, and saleof paper products, gifts, etc.)

Products☆Kannaru Printing Co., Ltd.
Receipt of products(Manufacture, purchase, and saleof paper products, gifts, etc.)
Subcontracting ofproduction☆Nishinihon Printing Co., Ltd.
(Manufacture, purchase, and saleof paper products, film packaging,
gifts, etc.)

Products☆Pack Takeyama Co., Ltd.
Receipt of products andin-process products(Printing and sale of paper
products)☆Keihin Tokushu Printing
Corp.
Transactions

Subcontracting ofproduction

Receipt of in-process
products(Printing and sale of paper
products)

Products☆Nikko Print Corporation(Purchase and sale of paper
products, film packaging, gifts,
etc.)

Products☆The Pack America Corp.

(Purchase and sale of paper
products, film packaging, gifts,
etc.)☆The Pack (Shanghai)
Corporation
Subcontractingof production

Receipt of products

Subcontracting ofproduction(Manufacture of paper products)

Receipt of products☆The Pack (Changshu) Co.,
Ltd.

Note: ☆ Consolidated subsidiary-9-

Products

Customers(Manufacture, purchase, and sale of paper products, film packaging, gifts, etc.)
The Pack Corporation

Transactions

4.

Affiliate companies
Name

Address

Capital orinvestment(¥ million)

Main lines of business

Ownership
ratio of voting
rights(%)

Relationship(Consolidated
subsidiary)
Keihin Tokushu Printing
Corp.

Higashinari Ward,
Osaka

10

Paper Products business

100.0

Sale of our products; purchase of paper
products; concurrent posting of officers;
secondment of employees; lending offunds; lending of equipment

Nikko Print Corporation

Higashinari Ward,
Osaka

20

Paper Products business

100.0

Purchase of paper products; concurrent
posting of officers; secondment of
employees; lending of funds; lending ofequipment

Pack Takeyama Co., Ltd.

Higashinari Ward,
Osaka

90

Paper Products business
Film Packaging business
Other Businesses

100.0

Sale of our products; purchase of paper
products; concurrent posting of officers;
secondment of employees; payment
agency services

Nishinihon Printing Co.,Ltd.

Higashinari Ward,
Osaka

45

Paper Products business
Other Businesses

100.0

Sale of our products; purchase of paper
products; concurrent posting of officers;
secondment of employees

Kannaru Printing Co.,Ltd.

Yodogawa Ward,
Osaka

12

Paper Products business
Other Businesses

100.0

Sale of our products; concurrent posting of
officers; secondment of employees;
lending of funds

The Pack America Corp.

New York, N.Y.,
U.S.A.

US$1,000,000

Paper Products business
Film Packaging business
Other Businesses

100.0

Concurrent posting of officers;
secondment of employees

The Pack (Shanghai)
Corporation

Shanghai, China

US$500,000

Paper Products business
Film Packaging business
Other Businesses

100.0

Concurrent posting of officers;
secondment of employees

The Pack (Changshu)
Co., Ltd.
(See Note 2.)

Changshu, Jiangsu
Province, China

US$3,900,000

Paper Products business

93.6

Purchase of paper products; concurrent
posting of officers; secondment of
employees; lending of funds

Notes:
1. Details under Important Lines of Business indicate business segment names as used under Segment Information.
2. Qualifies as designated subsidiary.
3. None of the above companies submits securities notices or annual securities reports.

- 10 -

5.

Employees(1)

Employees of consolidated companies
As of December 31, 2023
Segment

Employees

Paper Products business

894

(423)

Film Packaging business

122

(64)

Other Businesses

44

(7)

Companywide

123

(21)

1,183

(515)

Total
Notes:

1. Numbers of employees indicate numbers employed; annual average numbers of temporary employees are shown inparentheses.
2. In addition to the above, the Group employs 12 executive officers.
(2)

Employees of the Company
As of December 31, 2023
Employees
840

Average age (years)

Average years ofcontinuous service(years)Average annual salary
(¥)

41.3

17.5

7,385,937(436)

Segment

Employees

Paper Products business

551

(344)

Film Packaging business

122

(64)

Other Businesses

44

(7)

Companywide

123

(21)

840

(436)

Total

Notes:
1. Numbers of employees indicate numbers employed; annual average numbers of temporary employees are shown inparentheses.
2. In addition to the above, the Company employs 10 executive officers and 15 employees seconded to subsidiaries andother companies.
3. Average annual salary includes bonuses and nonstandard wages.
(3)

Labor unions
The Company’s employees are not unionized.
The name, number of members, and superior organization of the labor union of consolidated subsidiaries are shown below.
As of December 31, 2023
Name
Kannaru Printing Labor Union

Union members

Superior organization
52

UA ZENSEN

There are no matters requiring reporting regarding labor-management relations.

- 11 -

(4)Female employees as a percentage of those in managerial positions, percentage of male employees taking childcare leave,and male-female wage disparities(i)

Submitting company
Fiscal year under review
Male-female wage disparities (%)(See Note 1.)
Permanent fullPart time and fixedtime employees
term employees
All workers(included among all (included among all
workers)
workers)

Female employees asa percentage of thosein managerial
positions (%)(See Note 1.)

Percentage of male
employees taking
childcare leave (%)(See Note 2.)

8.8

40.0

55.8

75.1

64.5

Notes:
1. Calculated pursuant to the provisions of the Act on the Promotion of Women’s Active Engagement in ProfessionalLife (Act No. 64 of 2015)
2. Calculated as the percentage taking childcare or other leave under Article 71-4, Paragraph 1 of the Enforcement
Regulations to the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers
Caring for Children or Other Family Members (Ministry of Labour Ordinance No. 25 of 1991) pursuant to the Act
on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or
Other Family Members (Act No. 76 of 1991)(ii) Consolidated subsidiaries
Fiscal year under review
Name

Female employees as a percentage of
those in managerial positions (%)(See Note 1.)

Percentage of male employees taking
childcare leave (%)(See Note 2.)--

Pack Takeyama Co., Ltd.

Notes:
1. Calculated pursuant to the provisions of the Act on the Promotion of Women’s Active Engagement in ProfessionalLife (Act No. 64 of 2015)
2. Calculated as the percentage taking childcare or other leave under Article 71-4, Paragraph 1 of the Enforcement
Regulations to the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers
Caring for Children or Other Family Members (Ministry of Labour Ordinance No. 25 of 1991) pursuant to the Act
on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or
Other Family Members (Act No. 76 of 1991)
3. Omits male-female wage disparities because the information is not subject to mandatory disclosure under theprovisions of the Act on the Promotion of Women’s Active Engagement in Professional Life (Act No. 64 of 2015).
4. Figures for other consolidated subsidiaries are omitted because they are not subject to mandatory disclosure under
the provisions cited above.

- 12 -

II. Business conditions
1.

Management policies, business environment, topics, etc.
The Group’s management policies, business environment, topics, etc. are reviewed below.
Forward-looking statements in the text express the Group’s judgments as of the end of the consolidated fiscal year under review.
(1)

Corporate Philosophy
The Pack Group strives to meet shareholder expectations while aiming to achieve sustained growth in businessperformance and corporate value, based on the following Corporate Philosophy:
 We value and nurture people.
 We seek to accommodate society’s every change.
 We fulfill our social responsibilities by promoting initiatives related to the global environment and other issues.
 As a company offering total solutions related to packaging, we seek to contribute to societal development and to thrivingsocieties.
As is expressed in The Pack Group’s corporate motto, we are passionate and dedicated to our partnerships in all our
activities. Furthermore, we pursue sustainable management in keeping with the purpose of our existence (purpose): toprovide packaging solutions to contribute to a prosperous society and bring satisfaction to people. As a company offering
total solutions related to packaging, we help solve the many issues facing our stakeholders through the creation of newvalue in packaging, thereby contributing to a prosperous and sustainable society. To this end, we strive to deliverenvironmental, social, and economic value that is unique to The Pack Group, based on sustained growth and the ability toadapt to social change.

(2)

Targets and KPIs
The Pack Group must maintain a solid financial standing not only to improve earnings in each of our businesses, but toremain a stable, reliable partner to all our stakeholders, from shareholders to suppliers, employees, and many others. We
strive to strengthen both our capital adequacy ratio and returns on invested capital while also accounting for our obligation
to provide stable dividends.

(3)

Priority business and financial topics
We operate in a mature industry in which marked growth is considered difficult to achieve based on existing customers andproducts alone. For this reason, we have developed sales markets and products such as rice bags, disposable diaper
products, and packages for food products, in addition to our main product lines. We will continue to grow our businesses byfocusing on developing new markets and products for which demand can be expected and undertaking aggressive capital
investment where appropriate.
In recent years, in addition to rising costs of raw materials and imports we also face rising costs in areas such as logistics
and energy. We plan to achieve further improvements in business results through sales at appropriate prices by increasing
customer satisfaction through enhanced proposal-based sales and quality control, achieving a more robust profit structure
through further streamlining based on business reforms, and making steady progress on medium- and long-term businessstrategies.
At the same time, based on our management principles that call for fulfilling our social responsibilities by promoting
initiatives related to the global environmental and contributing to societal development and thriving societies as a company
offering total solutions related to packaging, we established the Package Laboratory in 1981 as a domestic and international
center for research and communication related to packages and packaging. In 1993, we began contributing to forest
conservation activities. In 2000, while taking active steps in these ways to develop new eco-friendly products andtechnologies in our core businesses, we established The Pack Forest® Environment Fund, through which we promoteforestation and forest conservation activities in cooperation with nonprofits. In 1999, the Ibaraki Plant became our first
facility to earn ISO 14001 environmental management systems certification. Today, all commercial sites in Japan, including
our four plants, have earned ISO 14001 environmental management systems certification and ISO 9001 quality
management systems certification. In addition, all plants producing package products using paper materials and all sales
sections have earned FSC® CoC certification (FSC® C020517); the manufacturing lines for folding paper containers forfood products at the Tokyo and Osaka plants have earned FSSC22000 certification. In 2023, we established the Sustainable
Committee to promote sustainable management in the Group. We’re committed to making ongoing contributions to social
progress and prosperity through our energetic efforts to address environmental issues.

- 13 -

(4)Medium- to long-term business strategies
The slogan of the Group’s Medium-Term Management Plan is “Evolution: Start of purpose-based management andSustainable Management.” Under this plan, we are targeting consolidated net sales of ¥107 billion and operating profit of¥8.3 billion (in the period ending December 2025).
(i)

Growth strategies
a. Focusing on the food products market (including convenience stores and fast food)We will enhance efforts in the areas of capital investments and new-product development to grow sales of primary
paper containers for food product use, while also strengthening our design proposals through use of technologies
such as 3D printers and 3D computer graphics and proposing forms for molded products.
b. Focusing on the e-commerce and mail-order markets and the logistics industry
While continuing actively to make proposals in the areas of switching to paper packaging and environmental
solutions, we also will propose improvements to the forms and specifications of packaging materials and laborsaving and mechanization solutions to automate our work lines.
c. Strengthening our efforts in the general retail market and elsewhere
We will grow our share of paper bags and carry out further proposal-based sales for switching to paper packaging
while promoting sales of products suited to recycling, reuse, and reduction (the Three Rs). In addition, we will
promote contributions to society together with customers by contributing a portion of revenue earned from ecofriendly products toward forest conservation activities through The Pack Forest Environment Fund, operated by

an NPO.
(ii) Human capital strategies
a. Securing diverse human resources Enhancing midcareer hiring
 Promoting women in the workplace (increasing the proportion of regular employees and managerial posts
accounted for by women) Expanding employment of people with disabilities
b. Human resource development
 Enhancing training structures Supporting autonomous skills improvements and reskillingc. Normalizing human resource assignments
 Making effective use of the talent management system
 Expanding employment opportunities (referrals and welcoming back former employees)
d. Improving work environments
 Enhancing diverse workstyles and systems
 Well-being (promoting health management)
e. Maximizing employee engagement
 Enhancing appropriate wage structures and benefits
 Increasing sense of business participation via the employee stock ownership program Stimulating employee exchange and communication
 Engagement surveys(iii) Financial strategies
We seek to support efficient and sustained growth through optimal plans for use of funds through investments ingrowth (i.e., capital investment, investment in new businesses, human investment, investment in computer system
upgrades, and R&D) and returns to shareholders (i.e., maintaining a dividend payout ratio of 35% or above andpurchase of up to ¥1 billion in treasury share in each of FY2024 and FY2025).
(5)

Other important management topics
Considerable time has passed since the construction of both the Osaka and Nara plants. We plan to rebuild both of theseplants for purposes of future improvements to work environments as well as increasing productivity through labor savingby automating work in the plants. We aim to develop production structures to produce high-value-added products for the
future.

- 14 -

2.

Sustainability concepts and initiatives
The Group’s thinking on sustainability and its sustainability initiatives are reviewed below.
Forward-looking statements in the text express the Group’s judgments as of the end of the consolidated fiscal year under review.
(1)

Governance(i)

Basic policy on sustainable management
As is expressed in The Pack Group’s corporate motto, we are passionate and dedicated to our partnerships in all our
activities. Furthermore, we pursue sustainable management in keeping with the purpose of our existence (purpose): toprovide packaging solutions to contribute to a prosperous society and bring satisfaction to people. As a company
offering total solutions related to packaging, we help solve the many issues facing our stakeholders through thecreation of new value in packaging, thereby contributing to a prosperous and sustainable society. To this end, we
strive to deliver environmental, social, and economic value that is unique to The Pack Group, based on sustained
growth and the ability to adapt to social change.

(ii) Materiality topics
The Pack Group has identified materiality topics for each theme related to the environment, society, and governance(ESG) for use in promoting sustainable management. The priority themes based on materiality are Environmental
Contributions, Cyclical Society/Climate Change, Employment and HR/Workplace Development, Community
Development/Coexistence, and Corporate Governance Structural Enhancements. For each of these materiality topics,
we establish key performance indicators (KPIs) as necessary, formulate action plans to realize them, and build
management structures. We will contribute to a prosperous and sustainable society by promoting and enhancing these
activities and delivering solutions to societal challenges through our business activities to achieve sustainable growth(value creation).
(a) Materiality topic identification process
To identify materiality topics, we began by identifying management capital (financial capital, manufacturing
capital, human capital, intellectual capital, social and relationship capital, and natural capital) in line with ourvalue chain. We then formulated themes for maintaining and growing this management capital and defined
initiatives for each topic. Materiality topics were then decided on after considering their importance tostakeholders and to the Company.
The Sustainable Committee submitted the materiality topics to the Board of Directors for approval.
(b) Materiality topics and KPIs
See the Sustainability page on our website for information on our sustainability initiatives, including materiality
topics and KPIs.
(URL https://www.thepack.co.jp/en/sustainability.html)(iii) Sustainability promotion structure
In January 2023, The Pack established the Sustainable Committee to promote sustainable management within theGroup. In cooperation with the Conference of Business Division, business sections, and Group companies, thiscommittee and its executive arm, the Sustainable Committee Secretariat, deliberate and make decisions on matterssuch as formulating policies on the operation and promotion of sustainable management and other important themes,managing the progress of sustainability initiatives, and reflecting the findings in the Medium-Term Management
Plans. The Sustainable Committee Secretariat handles tasks including the promotion of action plans and managementof key performance indicators (KPIs), in cooperation with each section and Group member company.
In consultation with the Sustainable Committee, the Board of Directors makes decisions on policies and oversees
sustainability management. The Conference of Business Division collaborates and shares information with the
Sustainable Committee. Each section and Group member company executes various measures and provides
information on their results along with related data.
The Audit and Supervisory Board and the Audit Office conduct supplementary audits of these initiatives.

- 15 -

Auditing Audit and Supervisory

Board of Directors
Inquiries

Board

Responses /reportingInternal
auditing

Sustainable Committee

Collaboration

Audit Office

Chair: President & CEO

Sustainable Committee Secretariat

Instruction

Collaboration

Conference ofBusiness Division

ReportingOperating sections / Group companies(2)

Strategies(i) Climate change
We undertook scenario analysis for the year 2030 for The Pack Corporation. We considered two scenarios: the 2°C
scenario and the 4°C scenario. In considering these scenarios, we referred to the World Energy Outlook scenarios
published by the International Energy Agency (IEA), Shared Socioeconomic Pathways (SSPs) scenarios employed by
the Intergovernmental Panel on Climate Change (IPCC), Representative Concentration Pathway (RCP) scenarios, andvarious future projections and plans issued by the Japanese government and other organizations. We assessed eachphenomenon along the two axes of likelihood and impact, grouping business risks into the three categories of high,medium, and low.
(ii) Human capital
Under the corporate motto, Passionate and Dedicated to Our Partnerships, we have established the Corporate
Philosophy, expressed by the following words: We value and nurture people. In line with this philosophy, we see
human resources as a priority in our capital management. Our HR systems seek to establish environments in whichpeople can grow; build environments in which employees can work with peace of mind; develop employees whose
talents will be recognized universally; and build strong organizations. We pursue HR development efforts andmaintain workplace environments in accordance with these aims.
The Medium-Term Management Plan includes a human capital strategy intended to enable the growth and vitality of
The Pack and individuals within the organization. Under these strategies, we secure, train, and develop diverse humanresources, ensure appropriate staffing assignments, improve working environments, and maximize employee
engagement.

(3)

Risk management
The Sustainable Committee’s individual project teams analyze risks related to sustainability, evaluate their importance, andformulate and implement responses intended to maximize opportunities and minimize risk. In addition, the Sustainable
Committee regularly reports to and advises the Board of Directors regarding the state of related activities.
To manage risks and opportunities related to climate change, the Sustainable Committee reviews our assessments of risks
and opportunities annually. Risks and opportunities are assessed based on various considerations, including their individual
likelihood and potential impact and whether responses are in place, after which a decision is made regarding theirsignificance. In reviewing assessment of risks and opportunities, we refer to various scenarios from IEA, IPCC, and othersources and interview where necessary with the related business divisions. Risks and opportunities related to climatechange of the highest significance are reported to the Board of Directors through the Sustainable Committee. The
Sustainable Committee drafts responses to risks and opportunities and manages their progress using KPIs.

(4)

KPIs and targets(i) Climate change
Our climate change KPIs and targets are given below. Under the management of the Sustainable Committee, eachbusiness section carries out efforts to achieve these targets. Each plant seeks to continue to adopt and deploy more
efficient machinery and equipment in line with related guidelines. Investment in machinery and equipment willcontinue in 2024 and beyond to help curb CO2 emissions.

- 16 -

[Target]By 2030, we hope to reduce CO2 emissions (Scopes 1 and 2) by 46% vs. FY2018.
[Scope 1 and 2 results]
In 2023, Scope 1 and Scope 2 emissions increased 8.8% year-on-year. We will maintain activities that conserve
energy, including efficiency improvements in manufacturing and logistics sections.
CO2 emissions (Scopes 1 and 2)
Target KPI
Emissions[t-co2]
16,756

Reduced by
46% vs. FY2018

2018

2019

2020

2021

2022

2023

2030
Target[CO2 emissions (Scopes 1, 2, and 3) across the supply chain]
A look at our CO2 emissions across the supply chain shows that Category 1 (purchased goods and services) of Scope
3 accounted for 81.7% of total emissions. We will continue to study ways to reduce supply chain emissions.
Percentage

Emissions(t-CO2)

Scope/Category
Supply chain emissions

Scope 3

Scope 1, 2, 3

710,655-

100.0%

Scope 1

5,118

-

0.7%

Scope 2

11,638-

1.6%

Scope 3

693,899

100.0%

97.7%

Category 1

Purchased goods and services

580,437

83.6%

81.7%

Category 2

Capital goods

15,958

2.3%

2.3%

3,138

0.5%

0.4%

27,3433.9%

3.9%

Category 3
Category 4

Fuel- and energy-related activities notincluded in Scope 1 or Scope 2
Upstream transportation anddistribution

Category 5

Waste generated in operations

937

0.1%

0.1%

Category 6

Business travel

349

0.1%

0.1%

Category 7

Employee commuting

1,290

0.2%

0.2%

Category 8

Upstream leased assets

-

-

-

Category 9

Downstream transportation anddistribution

5,310

0.8%

0.7%

Category 10

Processing of sold products

320

0.0%

0.0%

Category 11

Use of sold products

-

-

-

Category 12

End-of-life treatment of sold products

58,8178.5%

8.3%

Category 13

Downstream leased assets

-

-

-

Category 14

Franchises

-

-

-

Category 15

Investments

-

-

-

- 17 -

(ii) Human capital
We consider an environment in which women can succeed to be one that is more comfortable for all our employees.
We have analyzed the related issues and identified the following KPIs and targets for building workplaceenvironments in which women can work with peace of mind over the long term.
Target for March
Results
KPI
2026(FY under review)
Women as a percentage of permanent full-time
25% or more
21.5%
employees
Women as a percentage of permanent full-time
35% or more
50.0%
employees hired (new graduates)
Women as a percentage of those in managerial positions
10% or more
6.5%
(section manager and above)- 18 -

3.

Business and other risks
Among the information contained in this Annual Securities Report concerning matters such as business conditions andaccounting, the items described below are ones that could have major impacts on investor decision-making. This section includes
forward-looking statements, which reflect the Group’s judgments as of the end of the consolidated fiscal year under review.
Recognizing the possibility of these risks, the Group will endeavor to prevent their occurrence and respond appropriately if they
do arise.
(1)

Decreased domestic demand and lower market prices
The Group operates in an industry that is largely driven by domestic demand, and its net sales are impacted strongly bydomestic economic trends. The Group’s financial standing and business results may be impacted negatively by decreased
domestic demand and falling market prices in the event of a large-scale downturn in Japan’s economy.

(2)

Legal, regulatory, and litigation risks
The Group’s businesses are subject to various laws and regulations concerning the environment, intellectual property, andother subjects. As a result, it faces the risk of litigation or other legal issues.
The Group’s financial standing and business results may be impacted negatively as a result of litigation.

(3)

Product liability
The Group’s products may be subject to demands for compensation for damages based on product liability.
While it has not received any major demands for compensation for damages at present, it could face such demands in the
future.
While the Group is insured against product liability, there is a risk that this insurance might be insufficient to cover its
potential product liability.

(4)

Raw materials procurement and purchase of products
The Group strives to maintain stable supplies and prices by purchasing raw materials and products from multiple domestic
and international suppliers. However, a breakdown in the balance between supply and demand caused by factors such as
soaring oil prices may damage the Group’s financial standing and business results.

(5)

Asset-impairment accounting
There is a risk of losses resulting from factors such as usage of fixed assets or other assets held.

(6)

Customer credit risk
While the Group pays close attention to customer credit risk, its financial standing and business results may be impacted
negatively in the event of manifestation of customer credit risk due to worsening of the credit standing of a major customer
as a result of poor business performance or other causes.

(7)

Hostile-takeover risk
There is a risk of third-party purchases of a large number of shares of Company stock, which could impair corporate value
or joint returns to shareholders. The Group’s financial standing and business results could be impacted negatively as aresult.

(8)Impact of disasters
While the Group makes every effort to minimize the possible impact of disasters, there is no guarantee that it will be able toprevent or minimize every possible effect of disasters. There is a risk that the Group’s financial standing and businessresults could be impacted negatively by causes such as reduced production capacity or higher manufacturing costs if it isunable to prevent or minimize the effects of a disaster.

- 19 -

4.

Management’s analysis of financial standing, business results, and cash flows(1)

Overview of business results, etc.
The financial standing, business results, and cash flows (“business results, etc.” hereinafter) of The Pack Group (The Pack
Corporation and its consolidated subsidiaries) in the consolidated fiscal year under review are reviewed below.
(i)During the consolidated fiscal year under review, with COVID-19 reclassified as a Class 5 infectious disease and
COVID restrictions lifted, Japan’s economy saw growing demand for in-person dining and accommodations. A trend
toward recovery in manufacturing also continued. The economy exhibited gentle recovery driven by recovery in
inbound tourism demand, rising wages, and other factors. Nevertheless, other factors, including the lingering effects
of soaring oil prices and exchange rate fluctuations, spurred inflation in daily commodities and materials, and theoutlook remains uncertain.
In the United States, where employment conditions are favorable and real wages are rising, spending is growing onservices such as transportation, healthcare, and entertainment. At the same time, fiscal tightening is continuing withthe aim of suppressing inflation, and there are concerns about an economic downturn.
While China’s economy recovered rapidly at the start of the year after the lifting of the nation’s zero-COVID policy,
the economy slowed toward the end of the year for various reasons, including substantial decrease in investment inreal estate development, centered on residential properties, and slowing exports.
Under such conditions, The Pack Group worked to improve business performance through new market development,
aggressive capital investment, improved quality control, and other efforts under the Medium-Term Management
Plan’s slogan: Evolution—Start of purpose-based management and Sustainable Management.
As a result, in the consolidated fiscal year under review net sales grew by 9.7% year on year to ¥97,714 million,
operating profit grew by 29.7% to ¥7,743 million; ordinary profit grew 26.9% to ¥8,063 million, and profit
attributable to owners of parent grew by 39.3% to ¥5,652 million.

Factors affecting operating profit
Growth in sales volumes and rising average sale prices strengthened operating profit(Unit: ¥ million)

Period ended
December 2022
Operating profit

Growth in
sales
volumes

Risingaverage salepricesHigher raw
material
costs+1,358+3,747-1,141

Other
Rising labor
increases incosts
manufacturing
expenses
-383

5,972

-1,085

Risinglogistics
costs

-312

Other
increases in Period ended
selling and December 2023
administrative
expenses Operating profit
-413
7,743

◆ Sales volumes grew due to the recovery in consumer spending, centering on paper bags (up 5.5%).
◆ Average sale prices rose due to efforts to optimize prices and to proposal-based sales for high value added
products (paper bags up 11.0%, paper cartons up 6.5%, corrugated boxes up 12.5%, plastic bags up 14.8%).
◆ Materials costs rose, due mainly to soring raw material costs.
◆ Labor costs rose due to expanded hiring and to wage hikes averaging 5.01%.
◆ Other SG&A expenses rose due to various factors, including costs associated with building a newheadquarters building and expenses accompanying an upgrade of the backbone computer system.

- 20 -

Business results by segment are reviewed below.
Paper Products Segment
The paper products segment in 2023 accounted for 71.0% of Group consolidated sales. entire year free of COVID
restrictions, sales of paper bags, which accounted for 30.3% of consolidated sales, were buoyed by continued recovery
in domestic consumer spending and tourism demand. Net sales in this segment rose by 13.0% year on year to ¥29,653
million.
Sales of folding paper cartons, which accounted for 25.6% of consolidated sales, grew by 12.2% year on year to¥25,000 million. Sales of packages for takeout/delivery food products and to the souvenirs sector, centered on foodproducts, were strong.
Sales of corrugated boxes, which accounted for
12.7% of consolidated sales, grew by 1.7% year on
year to ¥12,419 million due to continuing robust
sales to the manufacturing and e-commerce sectors.
Printing sales, which accounted for 2.4% ofconsolidated sales, grew 6.4% year on year to¥2,325 million, driven by strong sales at Keihin
Tokushu Printing Corp. and Nikko Print
Corporation.
Overall, sales in this segment rose 10.3% year on
year to ¥69,399 million. Segment operating profit
rose by 28.6% year on year to ¥6,858 million.

Film Packaging Segment
In the fiscal year under review, the film packaging

Trends in net sales and operating profits

segment accounted for 14.1% of Group consolidated
sales. Segment sales were up 15.1% year on year to¥13,798 million. Sales of disposable diaper products
and film packaging for food products remained
strong. Sales to the e-commerce and specialty retailstore segments were steady. Operating profits grew
46.7% year on year to ¥856 million.

Other Businesses Segment
In the fiscal year under review, other businesses
accounted for 14.9% of Group consolidated sales.
Despite lower sales for products related to COVID19 vaccinations, sales in this segment grew 2.7%
year on year to ¥14,516 million. Operating profits
grew 19.7% year on year to ¥1,267 million thanks tosales of sewn products and nonwoven bags to
specialty retail stores.

- 21 -

Trends in net sales and operating profits

Turning to financial position, assets totaled ¥98,847 million at the end of 2022, up ¥4,481 million from ¥94,365
million at the end of the previous consolidated fiscal year. Liabilities stood at ¥27,691 million, down ¥1,303 million
from ¥28,994 million in the previous consolidated fiscal year. Net assets grew by ¥5,785 million to ¥71,156 million
from ¥65,371 at the end of the previous consolidated fiscal year.
(ii) Cash FlowsThe balance of cash and cash equivalents at the end of the consolidated fiscal year under review was down 4.5%, or¥840 million, from the end of the previous consolidated fiscal year to ¥17,812 million.
Cash flows from operating activities
In the consolidated fiscal year under review, operating activities provided net cash of ¥4,443 million (down 17.4%
from ¥5,380 million in the previous consolidated fiscal year). The principal factors were profits before income taxesof ¥7,941 million, depreciation of ¥2,082 million, contributions to the employee retirement benefits trust of ¥1,900
million, and payments of ¥2,244 million in income taxes.
Cash flows from investing activities
Investment activities during the consolidated fiscal year under review used net cash of ¥3,962 million (vs. ¥3,762
million in the previous consolidated fiscal year). The principal factors were outlays of ¥9,000 million for purchases of
securities, ¥5,581 million for purchases of property, plant, and equipment, and ¥1,702 million for purchases ofintangible fixed assets. Proceeds from sales of securities were ¥12,500 million.
Cash flows from financing activities
Due mainly to ¥1,334 million in cash dividends paid, financing activities used net cash of ¥1,407 million (vs. ¥1,124
million in the previous consolidated fiscal year).
(iii) Production, orders received, and salesa. Production
Shown below is production by segment in the consolidated fiscal year under review.
Segment

Production (¥ million)

YoY change (%)

Paper Products business

28,990112.5

Film Packaging business

3,366

123.3

Other Businesses

-

-

Total

32,357

113.6

Note: Amounts shown are calculated based on cost of manufacturing.
b. Orders received
Shown below are orders received in the consolidated fiscal year under review by segment.
Orders received
YoY change
Balance of orders
Segment(¥ million)(%)(¥ million)

YoY change(%)

Paper Products business

68,495

109.8

7,282

89.0

Film Packaging business

13,739

111.8

1,068

94.8

Other Businesses

14,705

104.7

315

249.4

Total

96,940

109.3

8,666

91.8

Note: Production to order is not conducted in part of the Other Businesses segment.

- 22 -

c. Sales results
Shown below are sales results in the consolidated fiscal year under review by segment.
Segment(2)

Sales (¥ million)

YoY change (%)

Paper Products business

69,399110.3

Film Packaging business

13,798115.1

Other Businesses

14,516

102.7

Total

97,714

109.7

Analysis and study of business results, etc. from management’s perspective
Management’s understanding of Group business results, etc. and details of their analysis and study are reviewed below.
Forward-looking statements in the text represent management’s judgments as of the end of the consolidated fiscal year
under review.
(i)

Key accounting estimates and assumptions used in such estimates
The Group’s consolidated financial statements are prepared based on generally accepted principles of corporate
accounting in Japan. Major accounting policies employed in preparation of the consolidated financial statements aredescribed under “V. Accounts: Consolidated financial statements, etc.: (1) Consolidated financial statements(Important matters serving as bases for the preparation of the consolidated financial statements).”
In preparation of the Group’s consolidated financial statements, various assumptions considered reasonable in light ofpast results and information currently available are taken into consideration in making estimates and judgments that
could impact the states of profits, losses, or assets. However, actual results may differ from such estimates due to theinherent uncertainty of estimates. This does not include important accounting estimates and the assumptions used inthem.

(ii) Analysis of business results in the consolidated fiscal year under review
a. Net sales
Net sales in the consolidated fiscal year under review rose by 9.7% year on year to ¥97,714 million, spurred by
growth in sales as personal consumption recovered thanks to extensive lifting of COVID-19 restrictions.
b. Gross profit
Cost of sales in the consolidated fiscal year under review was up 8.3% year on year to ¥72,949 million thanks toincreased sales.
Gross profit rose by ¥3,087 million (14.2%) year on year over the same period to ¥24,765 million as a result ofefforts to improve costs through increased productivity.
c. Operating profit
Selling, general, and administrative expenses rose by 8.4% year on year to ¥17,021 million in the consolidated
fiscal year under review, as increased personnel and logistics costs exceeded the results of continuing efforts to cut
Group costs through control of expenses.
Even so, operating profit in the consolidated fiscal year under review grew by ¥1,771 million (29.7%) from theprevious year to ¥7,743 million.
d. Ordinary profit
Under non-operating income, both interest income and dividend income increased.
As a result, ordinary profit was up ¥1,710 million (26.9%) year on year to ¥8,063 million.
e. Profit attributable to owners of parent
Profit attributable to owners of parent was up ¥1,593 million (39.3%) year on year to ¥5,652 million.

- 23 -

(iii) Analysis of financial standing in the consolidated fiscal year under review
a. Assets
Total assets at the end of the consolidated fiscal year under review stood at ¥98,847 million, up ¥4,481 million
from the end of the previous consolidated fiscal year. Major factors included increases of ¥2,022 million inbuildings and structures; ¥2,284 million in land; ¥1,635 million in intangible fixed assets; and ¥1,381 million in
investment securities; and a decrease of ¥4,400 million in securities.
b. Liabilities
Liabilities in the consolidated fiscal year under review decreased by ¥1,303 million from the end of the previous
consolidated fiscal year to ¥27,691 million. Major factors were an increase of ¥575 million in electronicallyrecorded obligations-operating and a decrease of ¥1,951 million in obligations related to retirement benefits.
c. Net assets
Net assets at the end of the consolidated fiscal year under review stood at ¥71,156 million, up ¥5,785 million fromthe end of the previous consolidated fiscal year. Key factors were increases of ¥4,321 million in retained earningsand ¥1,026 million in valuation difference on available-for-sale securities.
(iv) Strategic conditions and outlook
The Company’s strategic conditions and outlook are described under “II. Business conditions: 1. Management
policies, business environment, topics, etc.”(v)

Analysis of sources of capital and liquidity of funds
The state of cash flows during the consolidated fiscal year under review is described under “II. Business conditions: 4.
Management’s Analysis of Financial Standing, Business Results, and Cash Flows: (1) Overview of Business Results,
etc.: (ii) Cash Flows.”
Trends in cash flow indicators are shown below.
Period ended
Period ended
December
December
2019
2020

Capital adequacy ratio (%)

66.0

71.4

Period ended
December
2021

Period ended
December
2022

Period ended
December
2023

70.9

69.2

71.9

48.6

65.2

0.0

0.0

2,935.1

4,273.4

Capital adequacy ratio
84.7
64.3
58.6
based on market prices (%)
Interest-bearing debt to
0.0
0.1
0.0
cash flow ratio (year)
Interest coverage ratio
2,257.9
2,570.0
5,405.8(times)
Notes:
1. Cash flow indicators are calculated as follows using consolidated figures:
Capital adequacy ratio: Owner’s equity/Total assets
Capital adequacy ratio based on market prices: Market capitalization/Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt/Operating cash flows
Interest coverage ratio: Operating cash flows/Interest payments

2. Market capitalization is calculated by multiplying the closing share price at the end of the period by the number ofissued and outstanding shares at the end of the fiscal year, net of treasury shares.
3. Interest-bearing debt includes all liabilities on the consolidated balance sheet incurring interest.
4. Operating cash flows and interest payments, respectively, are taken from “Net cash provided by (used in) operating
activities” and “Interest expenses paid” on the consolidated statement of cash flows.
Regarding sources of capital and liquidity of funds, the Company’s main operating expenses include productpurchasing, manufacturing expenses, and selling, general, and administrative expenses. Demand for funds forinvestment purposes comes mainly from capital investment.
The Group’s basic policy is to secure stable liquidity of funds and sources of funds needed in business operations.
Short-term operating capital is provided mainly by funds on hand and short-term loans from financial institutions,while funds for capital investment and long-term operating capital are raised primarily through long-term loans fromfinancial institutions.
The balance of debts at the end of the consolidated fiscal year under review stood at ¥34 million, while the balance of
cash and cash equivalents was ¥17,812 million.

- 24 -

5.

Important business contracts, etc.
Not applicable.

6.

Research and development activities
The Pack Group (The Pack Corporation and its consolidated subsidiaries) is moving forward with development of new products
and processing technologies, and is also pursuing research on technologies and materials for the future under the concepts ofsafety and environmental protection. Based on joint efforts involving the manufacturing, engineering, and product development
sections, these efforts address the entire scope of packaging materials, including corrugated boxes, folding paper cartons, paperbags, and plastic film bags.
Since research themes are shared across business segments, we do not separate R&D activities by segment. In the consolidated
fiscal year under review, R&D expenses totaled ¥413 million Groupwide and primarily targeted the following themes:(1)

Printing technologies(i) We are pursuing research on functional and high-value-added printing technologies in gravure and offset rotary
printing, including flexography.
(ii) We are working to develop eco-friendly products by adopting water-based flexography in the packages field, while
also promoting adoption of high-resolution water-based flexographic printing to improve flexography technology andenvironmental performance. We are making progress in efforts to reduce our environmental impact still further byswitching from traditional solvent developers to water-based photographic developers.

(2)

Eco-friendly materials(i) To contribute to the achievement of the United Nations Sustainable Development Goals (SDGs), we are proposing
most suitable packages from paper, plastic, eco-friendly materials, recycled materials, or other materials to meetpackaging needs and circumstances.
(ii) In response to the growing practice of charging fees for shopping bags, we are developing eco-friendly bags such as
convenient reusable bags that shoppers can easily carry with them; bags consisting of materials with thicknesses of 50
microns or more for repeated use; bags consisting of materials made entirely of marine biodegradable plastics andbags consisting of at least 25% biomass materials.
(iii) We are continuing to develop new base papers through joint efforts with paper producers, including the developmentof eco-friendly base paper products with high recycled paper content. We contribute a portion of sales of theseproducts to The Pack Forest® Environment Fund, which funds forest conservation activities.
(iv) We develop and propose flexible corrugated cushioning sheets via the efficient lamination of thin paper not previously(v)used for cardboard as a paper cushioning material to replace plastic materials.
We propose printing solutions that suppress the generation of volatile organic compounds (VOCs) and CO2

emissions, by using eco-friendly plant-based inks and water flexography in printing of all packages.
(vi) We are developing the Craft series of paper film packaging as functional materials for food product packages.
(3)

Other fields(i)Seeking to achieve universal package design, we are developing product packages and production machinery to meet
emerging demand in the areas of design, function, convenience, and the environment.

(ii) We are advancing R&D efforts to improve high speed production equipment suitable for systems for producing small
lots with short lead times and for reducing and recycling ink sludge, a waste produced during printing.
(iii) We are developing systems capable of producing products, including material paper for corrugated boxes, folding
paper cartons, and paper bags, certified by the Forest Stewardship Council® reflecting high levels of environmental
awareness, through verification of processing and logistics processes from forest management through delivery toconsumers.
(iv) We propose efficient environmental equipment and package materials for distribution and logistics solutions tailoredto specific user needs.
(v)

We propose box coordination services to cut shipping costs by adjusting the layouts of boxes used for packing
products.

(vi) We design packages that incorporate thin paper, cardboard, and other easily recyclable paper materials as cushioning
materials to reduce use of plastics and CO2 emissions.
(vii) We are developing and proposing CC-PACK® delivery solutions based on eco-friendly materials, including flexible
cardboard cushioning sheets. The flexibility of these products improves efficiency during packing and makes it- 25 -

possible to deliver products in packages sized to match their contents. They also help reduce environmental impact byminimizing plastic use and reducing materials to a single material (paper) as alternatives to plastic foam cushioning
materials.
(viii) We are proposing solutions to streamline materials management by designing packages that can be used to holdmultiple products.
(ix) We patented a simple method for producing easy-open paper bags that can be resealed for mail order and other(x)

deliveries.
We patented hanger boxes and the corresponding hanger bars, which can be used to transport apparel on hangers.
Despite being made entirely of corrugated cardboard, they are capable of supporting the weight of large volumes ofapparel without deformation of or damage to the box itself.

(xi) We patented containers for food and other items characterized by simple structures. These containers can be sealed
and feature lids that open at a touch.
(xii) The Tsutsumo wo shiru (“Learn about packaging”) blog on our website provides information useful to prospective
customers considering package production, including answers to inquiries about packages, packaging, and related
trends available nowhere else.

- 26 -

III. Facilities
1.

Overview of capital investment
During the consolidated fiscal year under review, the Group continued to make capital investments for various purposes,
including enhancing production facilities.
Capital investments during the consolidated fiscal year under review totaled ¥7,406 million. Major capital investments in eachbusiness segment are reviewed below.
Paper Products
Paper cartons
We invested ¥883 million in paper carton production equipment at our Tokyo Plant. This investment is intended to enhance
production capacity and improve production efficiency.
Common to all businesses
We invested ¥1,909 million at the Osaka Plant and ¥375 million at the Tokyo Plant to increase land holdings as part of plans toincrease productivity.
We invested ¥2,267 million to construct the new headquarters building.
We invested ¥1,659 million to change our backbone computer system. This investment is intended to improve businessefficiency.
Funding for these capital investments was allocated from funds on hand.

2.

Status of major equipment(1)

The Company
As of December 31, 2023
Book value (¥ million)

Site name(location)

Headquarters(Higashinari-ku,
Osaka)
Tokyo Head Officebuilding and 23 othersites(Shibuya-ku, Tokyoand elsewhere)

Segment

Paper Products
Business
Film Packaging
Business
Other Businesses
Companywide
Paper Products
Business
Film Packaging
Business
Other Businesses

Land
Machinery,(thousandequipment, square metersand vehicles
of surfacearea)

Details ofequipment

Buildings
andstructures

Other equipment

2,271

165

1,179
(16)
[0]

146

3,763

37(6)

Sales equipment

1,007

0

2,578
(3)

25

3,611

364(58)

494

1,307

1,812
(30)

886

4,501

150(139)

61

464

238
(9)

32

797

43(26)

Other

Total

Number of
employees

Film Packaging
Business

Production equipment
for paper bags, paper
cartons, and otherpaper products
Production equipment
for plastic bags

Nara Plant(Yamatokoriyama,
Nara Prefecture)

Paper Products
Business

Production equipment
for corrugated boxes

128

620

394
(38)

37

1,181

75(30)

Tokyo Plant(Hidaka, Saitama
Prefecture)

Paper Products
Business

Production equipment
for paper bags, paper
cartons, and otherpaper products

3,019

1,977

2,315
(50)

628

7,941

139(147)

Film Packaging
Business

Production equipment
for plastic bags

263

735

210
(10)

17

1,227

32(30)

Paper Products
Business

Printing equipment

6

22

663
(6)

0

692

-(-)

Osaka Plant(Higashiosaka, Osaka
Prefecture)

Ibaraki Plant(Hitachi, Ibaraki
Prefecture)
Keihin Tokushu
Printing Corp.
(Seya-ku, Yokohama)

Paper Products
Business- 27 -

(2)Domestic subsidiaries
As of December 31, 2023
Book value (¥ million)

Company name

Segment

Details of equipment

Buildings
andstructures

Land
Machinery,(thousandequipment, square metersand vehicles
of surface
area)

Other

Total

Number of
employees

Keihin Tokushu
Printing Corp.
(Seya-ku, Yokohama)Nikko Print
Corporation(Higashiosaka, Osaka
Prefecture)
Pack Takeyama Co.,
Ltd.
(Tsushima, Aichi
Prefecture)

Paper Products
Business

Printing equipment

289

364

(-)

11

665

40(2)

Paper Products
Business

Printing equipment

15

244

(-)

3

263

34(7)

Paper Products
Business

Rebuilding thewarehouse/office

102

408

75
(5)

18

603

93(23)

Nishinihon Printing
Co., Ltd.
(Hakata-ku, Fukuoka)

Paper Products
Business

Expansion to boost
the capacity ofprinting andproduction equipment

98

69

1,080
(15)

1

1,250

46(20)

Kannaru Printing Co.,Ltd.
(Yodogawa-ku, Osaka)

Paper Products
Business

Production equipment
for paper bags, etc.

388

61

275
(0)
[1]

13

738

68(25)

Notes:
1. “Other” under book value represents the total for tools, furniture and fixtures and construction in progress accounts.
2. The Company and its domestic subsidiaries rent some land properties. Annual rent paid on land was ¥7 million for the Company
and ¥21 million for domestic subsidiaries. The surface area of land rented is indicated separately, in brackets ([ ]).
3. The Company owns some of the fixed assets of Keihin Tokushu Printing Corp., which are indicated above.
4. The Company and its domestic subsidiaries rent some building properties. Annual rent paid on buildings was ¥442 million for theCompany and ¥42 million for domestic subsidiaries.
5. Numbers of employees indicated above are permanent employees. Average numbers of temporary employees are indicatedseparately in parentheses (( )).

3.

Plans for new facilities, removal of facilities, etc.
(1)

Important new facilities, etc.

Company/site name(location)

The Pack Corporation
Osaka Plant(Higashiosaka, Osaka
Prefecture)

The Pack Corporation
Tokyo Plant(Hidaka, Saitama
Prefecture)
Keihin Tokushu
Printing Corp.
(Seya-ku, Yokohama)Nikko Print
Corporation(Higashiosaka, Osaka
Prefecture)
Pack Takeyama Co.,
Ltd.
(Tsushima, Aichi
Prefecture)

Segment

Details of equipment
Expansion of production
equipment for paper bags

Paper Products
Business

Paper Products
Business

Expansion of production
equipment for paper bags
Expansion of production
equipment for paper bags

Planned investment
amount (¥ million)
Already
Total
paid

Fundraising
methodStart ofconstruction

Planedcompletion of
construction

Capacity
added after
completion

449

253 Funds on hand

May 2023

June 2024

See Note.

291

165 Funds on hand

Apri 2023

June 2024

See Note.

116 Funds on hand

November
2023

January 2025

See Note.
See Note.

344
219- Funds on hand

February 2023

September
2024

202

- Funds on hand

February 2023

January 2025

See Note.

Expansion of production
equipment for paper bags403

- Funds on hand

October 2023

August 2024

See Note.

Paper Products
Business

Rebuilding thewarehouse/office392- Funds on hand

March 2024

September
2024

See Note.

Paper Products
Business

Expansion of printing
and production
equipment

295- Funds on handJune 2023

June 2024

See Note.

Paper Products
Business

Expansion of production
equipment for paper bags

149

- Funds on hand

July 2023

August 2024

See Note.

Note: Capacity added after completion is not shown because the new facilities are intended to improve quality and streamline
operations.
(2)

Significant removal of facilities, etc.
No significant removal of facilities, etc. took place aside from removal, etc. for ordinary equipment renovation.

- 28 -

IV. Status of the Company
1.

Stock, etc.
(1)

Total numbers of shares, etc.
(i)

Total numbers of shares
Class

Authorized total number of shares

Common share

77,000,000

Total

77,000,000(ii) Shares issued and outstandingClass

Common share
Total

(2)

Name of listed financial
Shares issued andShares issued andinstruments exchange oroutstanding at end of outstanding at date of association of financial
Detailsbusiness year
submission
instruments business(December 31, 2023)(March 28, 2024)
operators at which
registration is authorized
Prime Market, Tokyo
The authorized trading
19,900,000
19,900,000
Stock Exchange
unit is 100 shares.
19,900,000

19,900,000--

Status of share acquisition rights(i)

Details of stock option program

Date of resolution

March 27, 2015

March 30, 2016

March 30, 2017

March 29, 2018

March 28, 2019

Category and number ofCompany Directors 9 Company Directors 10 Company Directors 10 Company Directors 9 Company Directors 7
persons awarded
Corporate Officers 7 Corporate Officers 7 Corporate Officers 5 Corporate Officers 7 Corporate Officers 9
options
Number of share
21(19)
29(26)
34(31)
36(33)
38(34)
acquisition rights*
See Note 1.
See Note 1.
See Note 1.
See Note 1.
See Note 1.
Class, details, andnumber of shares
Common share
Common share
Common share
Common share
Common sharesubject to share
2,100(1,900)
2,900(2,600)
3,400(3,100)
3,600(3,300)
3,800(3,400)
acquisition rights
See Note 2.
See Note 2.
See Note 2.
See Note 2.
See Note 2.
(shares)*
Pay-in amount on
exercise of share1acquisition rights(yen)*
Exercise period of share May 11, 2015 –May 10, 2016 –May 10, 2017 –May 10, 2018 –May 9, 2019 –acquisition rights*
May 10, 2040
May 9, 2041
May 9, 2042
May 9, 2043
May 8, 2044
Issue price of shares
and amount allocated to Issue price: 2,251 Issue price: 2,338 Issue price: 2,970 Issue price: 3,497 Issue price: 2,911
capital when issuing
Amount allocatedAmount allocatedAmount allocatedAmount allocatedAmount allocatedshares on exercise of
to capital:
1,126 to capital:
1,169 to capital:
1,485 to capital:
1,749 to capital:
1,455
share acquisition rights
See Note 3.
See Note 3.
See Note 3.
See Note 3.
See Note 3.
(yen)*
Conditions of exerciseof share acquisition
See Note 4.
rights*Provisions concerning
Prior approval by resolution of the Board of Directors is required to obtain share acquisition rights throughtransfer of sharetransfer.
acquisition rights*
Provisions concerning
exchange of shareacquisition rights
See Note 5.
accompanying acts ofreorganization** The details shown are as of the end of the business year under review (December 31, 2023). Items revised from the endof the business year under review to the end of the month before the date of submission are represented by indicating inparentheses (( )) details as of the end of the month before the date of submission. No other items have changed since
the end of the business year under review,- 29 -

Notes:1. The class of share subject to share acquisition rights is Company common share. The number of shares subject toeach share acquisition right (“shares allotted” hereinafter) is 100 shares.
In the event of a stock split (hereinafter, this includes gratis allocation of shares of Company common share) orreverse stock split on Company common share after the date of allocation of share acquisition rights (“allocationdate” hereinafter), the number of shares allotted will be adjusted based on the formula given below. This adjustment
will be made for the number of shares of stock subject to share acquisition rights yet to be exercised as of the time ofadjustment. Any remainders of less than one share resulting from the adjustment will be rounded down.
Adjusted number of shares = Number of shares prior to adjustment x Ratio of stock split/reverse stock split
The adjusted number of shares shall apply from the day after the basis date of the stock split (or the effective date if
no basis date is specified) in the case of a stock split or on the effective date in the case of a reverse stock split.
However, in the event of a stock split conditional on the approval by the Company General Meeting of Shareholders
of a resolution on increase of capital or reserves drawing on the surplus, in which the basis date of the stock split
precedes the ending date of the relevant General Meeting of Shareholders, the adjusted number of shares shall apply
from the day after the ending date of the relevant General Meeting of Shareholders.
In addition to the above cases, if the Company must adjust the number of shares allotted due to a merger, corporate
spin-off, stock swap, or similar reason after the allocation date, the Company may adjust the number of subject sharesallotted as judged necessary by the Company Board of Directors.
2. The trading unit of shares shall be 100 shares.
3. The amount of the increase in capital when issuing shares through exercise of share acquisition rights shall be theamount derived by multiplying by one-half the limit on increased capital, etc., calculated in accordance with theprovisions of Article 17, Paragraph 1 of the Regulation on Corporate Accounting, with any remainder of less than one
yen resulting from such calculation to be rounded up to the nearest whole yen. The amount of the increase in capitalreserves when issuing shares through exercise of share acquisition rights shall be the above limit on increased capital,
etc., minus the amount of the increase in capital above.
4. Conditions of exercise of share acquisition rights(i) A holder of share acquisition rights may exercise them only during the period of 10 days (or until the next
business day if the 10th day is a holiday) from the day after his or her loss of the status of a Company (a)Director or (b) Corporate Officer (or the status after change in the event of a change during this period to thestatus of Company Corporate Auditor or Corporate Officer in case (a) or to the status of a Company Director,
Corporate Auditor, or employee in case (b)).
(ii) Only when the rate of growth in consolidated financial results (net sales and operating income) in the fiscal year
in which the share acquisition rights were allotted was at least 100% vs. the previous fiscal year may an eligible
person exercise all share acquisition rights allotted in that fiscal year. If the rate of growth was less than 100%,
only a portion of the share acquisition rights allotted in that fiscal year, based on the rate of growth, may be
exercised.
(iii) Notwithstanding (i) above, if a resolution is passed by the Company General Meeting of Shareholders (or by the
Board of Directors or Corporate Officer to whom such authority is delegated under Article 416, Paragraph 4 of
the Companies Act if a General Meeting of Shareholders is unnecessary) approving a merger agreement
whereby the Company would be the extinguished company, a corporate spin-off agreement or plan whereby theCompany would be the spun-off company, or a stock swap agreement or stock transfer plan whereby theCompany would become a wholly-owned subsidiary, the share acquisition rights may be exercised no later than
30 days from the day after the date of such approval. However, this does not include cases in which shareacquisition rights in the reorganized company are allotted to holders of share acquisition rights in accordancewith the provisions on exchange of share acquisition rights accompanying an act of reorganization, as described
below.
(iv) Other conditions shall be as stipulated in the Share Acquisition Right Allotment Agreement concluded between
the Company and holders of share acquisition rights.
5. Provisions concerning exchange of share acquisition rights accompanying acts of reorganization
In the event of the merger of the Company (only those in which the Company would be extinguished by the merger),an absorption-type corporate split or corporate split involving the establishment of a new company (only those inwhich the Company would be the spun-off company), or a stock swap or stock transfer (only those in which theCompany would become a wholly-owned subsidiary) (referred to collectively as “acts of reorganization” hereinafter),holders of the balance of share acquisition rights remaining (“remaining balance of share acquisition rights”- 30 -

hereinafter) immediately before the effective date of the act of reorganization (hereinafter, this shall refer to theeffective date of the absorption-type merger in the case of an absorption-type merger, the date of establishment of the
new merged company in the case of a merger involving the establishment of a new company, the effective date of theabsorption-type corporate split in the case of an absorption-type corporate split, the date of establishment of the new
split company in the case of a corporate split involving the establishment of a new company, the effective date of thestock swap in the case of a stock swap, or the date of establishment of the wholly owning parent company to whichstock was transferred in the case of a stock transfer) shall be issued share acquisition rights in the corporation
indicated in Article 236, Paragraph 1, Subparagraph 8, A-E of the Companies Act (“reorganized company”
hereinafter). However, this shall be conditional on the absorption-type merger agreement, agreement on merger
involving the establishment of a new company, absorption-type corporate split agreement, plan for corporate split
involving the establishment of a new company, stock swap agreement, or stock transfer plan providing for issue ofshare acquisition rights in the reorganized company.
(ii) Details of rights plan
Not applicable(iii) Information on other share acquisition rights, etc.
Not applicable(3)

Status of exercise of corporate debentures with share acquisition rights subject to revision of exercise price, etc.
Not applicable(4)

Trends in total shares issued and outstanding, capital stock, etc.
Change in total
Balance of total
Change inshares issued and shares issued andDatecapital stock
outstanding
outstanding(¥ million)(thousand shares) (thousand shares)
September 29, 2009190
19,900124
See Note.

Balance ofcapital stock(¥ million)

Change incapitalreserve(¥ million)

Balance ofcapital reserve(¥ million)

2,553

124

2,643

Note: Third-party allotment of shares at a premium (third party capital increase related to sale through overallotment)
Issue price:¥1,309.28
Amount transferred to capital:
Recipient of allotment:(5)¥654.64
Nomura Securities Co., Ltd.

Shareholders
As of December 31, 2023
Status of shares (trading unit: 100 shares)

Category

Shareholders

Foreign corporations,
National
Financialetc.
and local Financial
Other
Individuals,
instrument
government institutions
corporations
etc.
Nonbrokers
Individuals
agencies
individual
-

21

18

318

86

19

14,124

Total

Shares in lessthan trading
unit (shares)

14,586-

Shares held
53,4882,570
59,454
24,68725
58,697 198,921
7,900(trading units)
Percentage ofshares held
26.9
1.3
29.9
12.4
0.0
29.5
100
(%)
Note: Treasury share of 868,136 shares is included under “Individuals, etc.” (8,681 trading units) and “Shares in less than
trading unit” (36 trading units).

- 31 -

(6)Major shareholders

Name

Morita Kinen Fukushizaidan
The Master Trust Bank of Japan, Ltd.
(Trust Account)
BBH for Fidelity Low-Priced Stock Fund
(Principal All Sector Subportfolio)(Standing proxy: MUFG Bank, Ltd.)The Pack Trading Partners Stock
Ownership Plan
Custody Bank of Japan, Ltd.
(Trust Account)
Custody Bank of Japan, Ltd.
(Trust Account 4)
Custody Bank of Japan, Ltd.
(re-entrusted by Resona Bank; Hokuetsu
Corporation retirement benefits trust
account)
Daio Paper Corporation
MUFG Bank, Ltd.
Shichijo Paper Trading Co., Ltd.
Total
(7)

Sharesowned(thousand)Address
1984-40 Nakatomigaoka 2-chome,
Nara, Nara Prefecture
11-3 Hamamatsucho 2-chome,
Minato-ku, Tokyo, Japan
245 Summer Street, Boston,
Massachusetts 02210, USA(7-1 Marunouchi 2-chome,
Chiyoda-ku, Tokyo, Japan)
9-9 Higashiobase 2-chome,
Higashinari-ku, Osaka, Japan
1-8-12 Harumi, Chuo-ku, Tokyo,Japan
1-8-12 Harumi, Chuo-ku, Tokyo,Japan
1-8-12 Harumi, Chuo-ku, Tokyo,Japan
2-60 Mishimakamiyacho,
Shikokuchuo, Ehime Prefecture, Japan
7-1 Marunouchi 2-chome,
Chiyoda-ku, Tokyo, Japan
20-10 Nihonbashi 2-chome,
Chuo-ku, Tokyo, Japan-

As of December 31, 2023
Percentage of total sharesissued and outstanding (notincluding treasury share)
(%)

2,081

10.94

1,523

8.00

1,258

6.61

1,248

6.56

901

4.73

876

4.60

622

3.27

573

3.01

494

2.60

474

2.49

10,05552.84

Voting rights(i)

Shares issued and outstanding
As of December 31, 2023
Category

Number of shares

Number of voting rights

Details

Non-voting shares

-

-

-

Shares with restricted voting rights(e.g., treasury shares)

-

-

-

Shares with restricted voting rights(other)

-

-

-

-

-

Shares with full voting rights(e.g., treasury shares)(Treasury shares)
Common share

868,100

Shares with full voting rights(other)Common share

19,024,000

Shares in less than one trading unit

Common share

7,900

-

This shall refer to sharesin lots numbering fewer
than 100 shares (onetrading unit).

Total shares issued and outstanding

19,900,000--

Total shareholder voting rights-

190,240

190,240--

Note: The shares of common share under “Shares in less than one trading unit” include 36 shares of treasury share ownedby the Company.

- 32 -

(ii) Treasury shares, etc.

2.

As of December 31, 2023
Shares held as a
Number of
Number of Total number
percentage of total
shares held shares held inof shares
shares issued andin own name other names
heldoutstanding (%)

Name or title of owner

Address of owner(Treasury shares ownedby the Company)
The Pack Corporation

9-3 Higashiobase
2-chome, Higashinari-ku,
Osaka, Japan

868,100-

868,100

4.36

Total

-

868,100-

868,100

4.36

Acquisition of treasury share, etc.
Stock class, etc.:
Acquisition of common shares under Article 155, Paragraph 3 of the Companies Act, Acquisition of common shares under
Article 155, Paragraph 7 of the Companies Act, and Acquisition of common shares under Article 155, Paragraph 13 of theCompanies Act(1)

Acquisition by resolution of the General Meeting of Shareholders
Not applicable(2)

Acquisition by resolution of the Board of Directors
Category

SharesStatus of Board of Directors (February 9, 2024)
resolution (acquisition period: February 13 –December 31, 2024)
Treasury shares acquired during this period
Percentage not yet exercised as of the submission
date (%)(3)

Total price (¥)
300,000

1,000,000--

100.00100.00Details of treasury share not acquired by resolution of the General Meeting of Shareholders or Board of Directors
Category

SharesTotal price (¥)

Treasury share acquired during the business year underreview

503

583,018

Treasury share acquired during the current period

630Note: Treasury share acquired during the current period does not include shares acquired through purchase of remaindersof stock in less than the trading unit from March 1, 2024, to the date of submission of this Annual Securities Report.

- 33 -

(4)Status of disposal and holding of treasury share acquired
Business year under review
Category

Total disposal price(¥)

SharesTreasury share acquired subject toseeking underwriters

Current period
Total disposal price(¥)

Shares

-

-

-

-

-

-

-

-

-

-

-

-

Other (exercise of stock options)200

597,624

1,200

3,584,472

Other (disposal of treasury sharethrough transfer-restricted sharebased remuneration)

22,82868,210,639

6,587

-

Shares of treasury share held

868,136-860,349-

Treasury share acquired subject todisposal of cancellation
Treasury share acquired subject totransfer related to merger, stock
swap, issuance of shares, or
corporate split

Notes:
1. Treasury share disposed of and held during the current period does not include shares disposed of from March 1, 2024,
to the date of submission of this Annual Securities Report.
2. Treasury share disposed of and held during the current period does not include shares for which stock options were
exercised from March 1, 2024, to the date of submission of this Annual Securities Report.

3.

Dividend policy
The Company determines dividends while striving both to maintain stable dividends and to enhance internal reserves. Its basic
policy calls for paying dividends twice per business year as year-end dividends based on a resolution of the Regular General
Meeting of Shareholders and as interim dividends based on a resolution of the Board of Directors. Based on this policy, during
the business year under review, the Company paid interim dividends of ¥35 per share and year-end dividends of ¥55 per share,reflecting consideration of financial results during the business year. As a result, the Company paid annual dividends of ¥90 per
share.
Internal reserves are intended to enhance the Company’s financial structure and to meet demand for funds for R&D, acquisitionof production equipment, and other purposes. This is intended to contribute to stable and growing dividends to shareholders
through contributing to future growth in profits.
The Company Articles of Association state as follows: “Surplus may be distributed as interim dividends by a resolution of theBoard of Directors, with a basis date of June 30 each year.”
Dividends of surplus in the business year under review are shown below.
Date of resolution

Total amount of dividends(¥ million)

Dividends per share(¥)

August 7, 2023,
Board of Directors resolution

666

35

March 28, 2024,
Regular General Meeting of
Shareholders resolution

1,046

55

- 34 -

4.

Corporate governance(1)

Overview of corporate governance(i) Basic policy on corporate governance
Based on strong recognition of the importance of corporate governance, The Pack Corporation has established basic
policies for maintaining improving management efficiency, ensuring compliance with corporate ethics, andmaintaining a structure capable of monitoring that management activities are carried out properly while disclosing in atimely manner important information concerning shareholder interests.
(ii) Overview of the corporate governance system and reasons for its adoption
The Pack Corporation is a company with corporate auditors. It has established an Audit and Supervisory Board andadopted the structure of a company with an Audit and Supervisory Board, reflecting its judgment that an auditing
structure consisting of corporate auditors including external auditors is an effective way to undertake management
oversight functions. This is intended to enhance corporate governance.
In addition to the board of directors required by law, the Company employs Conference of Business Division
meetings in which executives of the level of business division general manager and above participate to allow rapid
decision-making and promulgate such decisions throughout the Company, reflecting current conditions throughmonthly meetings. In April 2005, the Company adopted a Corporate Officer system to enable dynamic businessexecution.
The Articles of Association call for up to nine directors. They also provide for the appointment of directors by aresolution passed with the support of a majority of voting rights present in a meeting attended by shareholders
representing at least one-third of voting rights, without use of cumulative voting.
Three of the nine Directors are External Directors. The External Directors have no transactional relationships with orother interests in the Company.
In addition to enhanced management oversight functions achieved by appointing External Officers, the Company
secures the neutrality and objectivity of management policies and strategies involving the establishment of a
Nomination Committee, Remuneration Committee, Compliance Committee, and Sustainable Committee.
Members of the Board of Directors
Chairperson: Director Hideaki Yamashita
Members:

Director Teruo Takinoue, Director Norio Ashida, Director Haruyasu Ito, Director Naoki Nakamura,
Director Ikuo Shimomura, External Director Hirofumi Hayashi, External Director Uichiro Nishio,
External Director Kaoru Kasahara

Members of the Nomination Committee
Chairperson: External Director Uichiro Nishio
Members:

Director Hideaki Yamashita, Director Teruo Takinoue, External Director Hirofumi Hayashi, External
Director Kaoru Kasahara

Members of the Remuneration Committee
Chairperson: External Director Hirofumi Hayashi
Members:
Director Hideaki Yamashita, Director Ikuo Shimomura, External Director Uichiro Nishio, External
Director Kaoru Kasahara
Members of the Sustainable Committee
Chairperson: Director Hideaki Yamashita
Members:
Director Norio Ashida, Director Haruyasu Ito
The Company has four Corporate Auditors, two of whom are External Corporate Auditors. The External Corporate
Auditors have no transactional relationships with or other interests in the Company.
Members of the Audit and Supervisory Board
Chairperson: Standing Corporate Auditor Shinji Noda
Members:

Standing Corporate Auditor Yasuhiro Takagi, External Corporate Auditor Hisayoshi Tamakoshi,
External Corporate Auditor Norimasa Iwase- 35 -

Pursuant to Article 427, Paragraph 1 of the Companies Act, the Company has concluded with its External Directors
and External Corporate Auditors contracts limiting their liability for compensation for damages under Article 423,
Paragraph 1 of the Companies Act to the minimum limit amount under Article 425, Paragraph 1 of the Companies
Act, as long as the duties that led to such liability were carried out in good faith and free of gross negligence.
In addition, the Company has concluded with an insurer an executive liability insurance policy as stipulated in Article
430-3, Paragraph 1 of the Companies Act, naming Directors and Corporate Auditors of the Company and the Groupas the insured. The insured are not charged premiums under this insurance policy. This policy covers losses related toliability and claims for liability borne by the insured in connection with the performance of their duties. However, toensure that it would not have a detrimental impact on the proper execution of duties of the insured persons, the policy
does not cover losses such as those attributable to criminal actions by the insured.
The Company’s corporate governance structure is illustrated below.
Corporate governance structural diagram
General Meeting of Shareholders
Appointment, dismissal

Board of External
Officers
Cooperation

Audit and Supervisory Board

Responses

Expressing opinions,
proposalInquiries

Board of Directors

Accounting auditor

Oversight
Inquiries
Account
auditing

Responses, reporting
Cooperation

Cooperation

Sustainable Committee

ReportingInternal audit
Cooperation

Audit OfficeInstruction
Business auditing

Reportingonimportantmatters

Reporting, recommending
improvements, and disposition

Instruction and oversighton important policies andproposals

Conference ofBusiness Divisions

Compliance Committee

Instruction on policies
and measures
Investigation, instructing
improvements
Operating sections,

ReportingGroup Companies

Recommendations

Convened for deliberationin response to individual
matters

Compliance Officer

Reporting, consultation
Reporting

Cooperation

Legal Department

Nomination Committee,
Remuneration Committee(optional)

Attorneys

Appointment, dismissal

Compliance guidance

C-Line Contact

Whistleblowing on
legal/regulatory violations, etc.

(iii) Other matters concerning corporate governance(a) Structure for ensuring that the performance of duties of Group directors and employees conforms to laws,
regulations, and the Articles of Association
 Corporate Auditors conduct Group Corporate Auditor Audits based on the Rules of the Audit and Supervisory
Board and the Corporate Auditor Audit Standards. The Audit Office conducts internal audits of the Group basedon the Internal Audit Rules.
 The General Manager of the Corporate Division oversees Group compliance management and maintains related
structures.
 The Company conducts awareness promotion and training for Group Directors, Corporate Officers (Group
Directors and Corporate Officers are referred to collectively hereinafter as “Directors and others”), and Corporate
Auditors regarding compliance with The Pack Group Code of Conduct and compliance.
 The C Line internal whistleblowing program is maintained to provide Group employees with access toconsultations related to compliance and a point to which to submit reports of violations of laws, regulations, or the
Articles of Association. Efforts are made to discover, prevent, and rectify any real or potential improprieties.
 The Company appoints External Directors to maintain and enhance its oversight functions regarding businessexecution.
(b) Systems related to the retention and management of information concerning the performance of duties of Group
Directors
 Minutes of meetings of the Group’s Board of Directors and other important meetings, in-house applications forapproval, and other important documents related to the performance of duties of Directors are retained. Their
preparation, retention, management, etc. are conducted based on the Document Rules, Approval Application
Procedure Rules, Confidential Information Management Rules, and other in-house rules, etc.

- 36 -

 Company Directors and Corporate Auditors may view the minutes of important meetings, in-house applications
for approval, and other documents referred to in the preceding subparagraph.
(c) Rules and other systems regarding management of risks of losses to the Group Risk management related to everyday business operations, including credit management, quality control, andhealth and safety management, is undertaken based on the in-house rules established by the Company and Group
companies, manuals, procedures, and other documents, and the Company guides individual Group companies
regarding their maintenance and operation.
 The managerial structure for risk management related to information security will be reviewed in response to theincreasing importance of information management due to broadening use of IT in business and other factors.
 We respond swiftly to disasters, major accidents, and other business-related emergencies under the guidance ofthe president of the Company or the individual Group company involved, based on the Emergency Response
Rules and other in-house rules, thereby stemming progress of any subsequent damage.
 If the Audit Office in an internal audit discovers a risk of losses to the Group, it reports the matter to the head of
the relevant section and promptly reports the matter to the President in accordance with the Internal Auditing
Rules.
(d) Systems for ensuring the efficient performance of the duties of Group Directors
 To enable efficient management, in addition to the Board of Directors, the Company holds monthly Conference ofBusiness Division meetings attended by the Directors and other members of management of the rank of businessdivision heads or above, as well as Group company presidents. Conference of Business Division meetings
consider the state of business execution as reported by each section in charge and Group company and allow
deliberations on policies for executing the decisions of the Board of Directors.
 Organizations, posts, division of responsibilities, and job authority related to business execution are based on thein-house rules of each Group company.
 The Company has adopted a Corporate Officer system to enable prompt and efficient business administration, by
dividing responsibilities between Directors, who are responsible for decision-making and oversight functions, andCorporate Officers responsible for business execution.
 The nomination and remuneration committees have been established as advisory bodies under the Board of
Directors to enhance corporate governance by strengthening fairness, transparency, objectivity, and accountability
in procedures related to matters such as compensation of Directors and Corporate Officers.
(e) Systems to ensure the propriety of Group company operations
 Management of Group companies is undertaken based on the Affiliate Company Management Rules. Systems aremaintained for periodic reports to the Company on matters such as the state of business execution and finances ofindividual Group companies and reports to the Company on the business results of Group companies, both
periodically and if any material fact emerges.
 The Company instructs each Group company to carry out awareness promotion and training regarding compliancewith The Pack Group Code of Conduct and with in-house rules and other internal control systems to address
various risks related to the Group’s business activities. If a Group company requests assistance, guidance, or othersupport regarding such efforts, the General Manager of the Company’s Corporate Division will instruct the Legal
Department or other related section to respond appropriately. The purpose here is to manage risks Groupwide
through mutual cooperation among Group companies.
 The Company appoints sections responsible for the management of individual Group companies to carry out
Group management appropriately and efficiently and provides guidance on maintaining and operating IT andother infrastructures within an extent required to ensure effective communication between the Company andGroup companies and for business operations.
(f) Systems concerning employees appointed to assist in the duties of Corporate Auditors if requested to do so by
Corporate Auditors
 For now, no employees are appointed to assist in the duties of Corporate Auditors. However, the Audit Office
performs such roles concurrently with its other duties, providing the assistance needed in the performance of theduties of Corporate Auditors under their command and control.

- 37 -

(g) Matters concerning the independence from Directors of employees assisting in the duties of Corporate Auditors
 The Audit Office is under no command and control other than that of Corporate Auditors with regard to assistingin the performance of the duties of Corporate Auditors under their command and control.
 The consent of The Audit and Supervisory Board is required for personnel transfers, personnel evaluations,
treatment, and disciplinary action regarding staff members of the Audit Office.
(h) Systems for reporting to Corporate Auditors by Group directors, employees, and others, other systems related toreporting to Corporate Auditors, and systems for ensuring that those who have submitted reports will not suffer
disadvantageous treatment as a result
 In addition to attending meetings of the Board of Directors and Conference of Business Division meetings,
Corporate Auditors may attend any other meetings as they deem necessary, including those of Group companies.
 The Company and Group companies provide Corporate Auditors with requested documents, including minutes
and materials from important meetings, materials concerning important litigation and disputes, materials
concerning the results of inspections by regulators and other outside parties, materials concerning improprieties
such as matters reported through the internal whistleblowing program, and other necessary materials.
 Company executives and employees are requested to report immediately to Corporate Auditors any information
discovered and posing the risk of significant harm to the Company. Company executives and employees areprotected from dismissal or other disadvantageous treatment as the result of submitting such reports.
 Group employees are protected from dismissal from the Company or a Group company or other disadvantageous
treatment as the result of having consulted regarding compliance or reported violations of laws, regulations, or the
Articles of Association via the C Line internal whistleblowing program.
 The Compliance Committee is led by the General Manager of the Administrative Division and with membership
appointed by that General Manager to promote compliance within the Company and its subsidiaries.
(i) Procedures for prepayment or reimbursement of the costs of performance of the duties of Corporate Auditors andother matters concerning policies related to the processing of costs or obligations arising in connection with theperformance of such duties
 Demands received from Corporate Auditors for the payment of expenses necessary for the performance of theirduties shall be paid promptly.
 As judged necessary by Corporate Auditors, necessary audit costs, such as those involving the employment of
attorneys, certified public accountants, consultants, and other external advisors, are authorized to support audits
by Corporate Auditors.
(j) Other systems intended to ensure the efficacy of audits by Corporate Auditors Group executives, etc. and employees cooperate actively in audits by Corporate Auditors.
 Based on their own independent plans and schedules and in close cooperation with the Audit Office, Corporate
Auditors may interview the heads and employees of the sections audited.
 Corporate Auditors exchange opinions with the President and the accounting auditor through meetings held
periodically and at other times as needed.
(k) Sustainable Committee
 The Sustainable Committee established under the Board of Directors and the Sustainable Committee Secretariat,
its business execution organization, cooperate with Conference of Business Division meetings, business sections,and Group companies to consider and respond to climate change.
 The Board of Directors consults with the Sustainable Committee regarding decisions on and oversight of related
policies. The Audit and Supervisory Board and the Audit Office audit these initiatives in an auxiliary manner.
(l) Maintenance of in-house rules, etc.
 In-house rules, programs, systems, manuals, procedures, and other matters related to this basic policy shall be
reviewed continuously by the Group and amended, abolished, formulated, improved, established, etc. as needed.

- 38 -

(m) Maintaining the risk management structure We strive to maintain a systematic risk management structure to respond to risks in various areas, such as
business, management, markets, and credit (including risk prevention), and to accurately ascertain, analyze, andaddress risks such as human risks, natural disasters, and both internal and external risks.
 In the sphere of legal and regulatory compliance, we have established The Pack Group Code of Conduct to set
forth principles to serve as standards for actions and judgments with which executives and employees of Group
companies must comply.
(n) Matters subject to resolution by the General Meeting of Shareholders that may be determined by the Board of
Directors
 With regard to the purchase of treasury shares, the Company, pursuant to the provisions of Article 165, Paragraph
2 of the Companies Act, may acquire treasury share through market transactions and other methods by aresolution of the Board of Directors. This is intended to enable dynamic execution of management policies,
including those concerning financial measures, in response to changes in economic conditions.
 Based on the rules established in Article 454, Paragraph 5 of the Companies Act, the Articles of Association
stipulate that interim dividends may be paid by a resolution of the Board of Directors. This is intended to make itpossible to provide returns dynamically to shareholders by delegating authority for interim dividends of surplus to
the Board of Directors.
(o) Requirements of special resolutions by the General Meeting of Shareholders
 The Articles of Association stipulate that special resolutions by the General Meeting of Shareholders under Article
309, Paragraph 2 of the Companies Act require the support of two-thirds of voting rights present in a meeting
attended by shareholders representing at least one-third of voting rights that can be exercised on the resolution.
This is intended to enable the smooth operation of General Meetings of Shareholders by easing quorum
requirements for special resolutions by the General Meeting of Shareholders.
(iv) Basic policy concerning control of the Company(a) Details of the basic policy
The Company believes that it has been built up and supported by tangible and intangible assets that are both
important and essential to Company management, including the human resources, organization, equipment,
product capabilities, technological capabilities, relationships of trust between management and employees,
relationships of trust between the Company and its customers, suppliers, and other stakeholders, and management
measures drafted and implemented to date.
To increase the Company’s corporate value and contribute to the common interests of shareholders, it is vital thatthose who control decision-making on Company financial and business policies maintain and improve theseelements of management.
Quite clearly, shareholders are determined based on the principle of a free market and free trade. We ultimately
believe that those parties who control decisions on Company financial and business policies should make theirdecisions based on the views of shareholders as a whole.
For this reason, we will not necessarily reject any or all efforts by individual parties or groups to acquire control
of or influence decision-making on Company financial and business policies via the acquisition of large volumesof Company stock, even if such actions involve the unilateral acquisition of large volumes of Company stock
without the consent of Company management, if they would contribute to the Company’s corporate value or thecommon interests of shareholders.
However, if such efforts may be detrimental to the Company’s corporate value or to the common interests ofshareholders—for example, by damaging the above elements of management—we would consider the party to beinappropriate to control decision-making on Company financial and business policies and take appropriate
measures to the extent permitted by laws, regulations, and the Articles of Association.
This is our basic policy on parties controlling decision-making on Company financial and business policies.
(b) Efforts to prevent control of decision-making on Company financial and business policies by inappropriate parties
under the basic policy
In the event that a party attempts to acquire large volumes of Company stock and the Company determines thatsuch acquisition would be made by the inappropriate party, we will establish a task force that includes a certain- 39 -

number of outside experts; make a careful judgment regarding the intent of the party, the details of its proposals,
and other matters in light of the above basic policy and the common interests of shareholders; and promptly
decide on and implement practical defensive measures, where deemed appropriate and necessary.
(c) Judgment by the Board of Directors concerning the initiatives under (b) above
The Company Board of Directors believes that the initiatives under (b) above are not contrary to the common
interests of shareholders, since they have been formulated in accordance with the basic policy on control of theCompany under (a) above and are intended to secure the Company’s corporate value and the common interests ofshareholders.

- 40 -

(2)Executives(i) List of executives
Male: 12 members; female: one member (women account for 7.7% of executives)
Title

Name

Date of birthPresident and CEO

Hideaki Yamashita

June 7, 1957

Vice President
Divisional General
Manager, Production
Division

Teruo Takinoue

April 30, 1961

Career history
April 1982
January 2008
January 2011
March 2013
January 2016
March 2017
January 2019
January 2019
March 2022
April 1984
January 2008
March 2011
January 2012
April 2014
March 2015
January 2017Managing Director
Deputy Divisional
General Manager, Sales
Division
Divisional General
Manager, Packaging
Products Market
Division

Norio Ashida

November 20, 1963

March 2018
March 2022
April 1986
January 2011
January 2015
January 2019
January 2019
January 2019
March 2020
March 2024

Director
Deputy Divisional
General Manager,
Production Division

Haruyasu Ito

November 30, 1961

April 1984
January 2016
January 2019
March 2020
February 2022
March 2022
January 2023
March 2024

Managing Director
General Manager,
Western Japan Sales
Division

Naoki Nakamura

June 5, 1965

April 1989
January 2008
January 2013
January 2017
January 2019
January 2019

Director
Divisional General
Manager, Corporate
Division

Ikuo Shimomura

November 11, 1965

January 2021
March 2024
April 1989
January 2009
January 2016
January 2021
January 2023
March 2024
March 2024

Director

Hirofumi Hayashi

August 17, 1965

October 1991
August 1995
January 2001
March 2001
February 2010
March 2014
March 2015

- 41 -

Joined the Company
General Manager, Tokyo Sales Division No. 2
Corporate Officer
Director
Divisional General Manager, Eastern Japan
Sales Division
Managing Director
Senior Managing Director
Divisional General Manager, Sales Division
President and CEO (to present)
Joined the Company
General Manager, Osaka Production Division
Director
Deputy Divisional General Manager,
Production Division
Divisional General Manager, Packaging
Products Division
Managing Director
Divisional General Manager, Production
Division (to present)
Senior Managing Director
Vice President (to present)
Joined the Company
General Manager, Tokyo Sales Division No. 4
Corporate Officer
Managing Corporate Officer
Divisional General Manager, Eastern Japan
Sales Division
Managing Director (to present)
Deputy Divisional General Manager, Sales
Division (to present)
Divisional General Manager, Sales Division(to present)
Joined the Company
General Manager, Section 2 of Tokyo Sales
Division No. 2
Managing Director, Kannaru Printing Co.,Ltd.
President and CEO, Kannaru Printing Co., Ltd
Director, the Company (to present)
Deputy Divisional General Manager,
Production Division (to present)
In charge of Quality Management Control
Dept. (to present)
General Manager, Nara Production Division(to present)
Joined the Company
General Manager, Department No. 3, Tokyo
Sales Division No. 1
General Manager, Chugoku-Shikoku Sales
Division
Corporate Officer
Managing Corporate Officer
General Manager, Western Japan Sales
Division (to present)
General Manager, Kyushu Sales Division
Managing Director (to present)
Joined the Company
General Manager, Department No. 3, Tokyo
Sales Division No. 3
General Manager, Tokyo Sales Division No. 2
Corporate Officer
Deputy Divisional General Manager,
Corporate Division
Director (to present)
Divisional General Manager, Corporate
Division (to present)
Joined Century Audit Corporation
Registered as certified public accountant
Established Hayashi CPA and Tax Accountant
Office (to present)
Registered as a certified tax accountant
External Auditor, Kawakami Paint
Manufacturing Co., Ltd.
Corporate Auditor, the Company
Director (to present)

Term ofofficeShares held
(thousand)See Note 4.

21

See Note 4.

19

See Note 4.

7

See Note 4.

2

See Note 4.

1

See Note 4.

1

See Note 4.

1

TitleName

Date of birth

Director

Uichiro Nishio

March 7, 1955

Director

Kaoru Kasahara

Standing Corporate
AuditorShinji Noda

Standing Corporate
AuditorYasuhiro Takagi

Corporate Auditor

Hisayoshi
Tamakoshi

Corporate Auditor

Norimasa Iwase

Career history

March 1982 Registered as certified public accountant
December 1983 Registered as certified tax accountant
July 1999
Representative Partner, Seiwa Audit &Accounting Firm
July 2002
Representative Partner, Deloitte Touche
Tohmatsu LLC
April 2005
Professor, Institute of Business andAccounting, Professional Graduate School,
Kwansei Gakuin University (to present)
March 2015 Corporate Auditor, the Company
June 2015
External Auditor, Araya Industrial Co., Ltd.
(to present)
June 2016
External Auditor, KMEW Co., Ltd. (topresent)
March 2018 Director (to present)
December 14, 1961
March 1989 Joined Pigeon Corporation
February 2010 President and COO, Pigeonwill Corporation
February 2014 Corporate officer and Deputy Division
Manager, Domestic Baby & Mother Care
Business Division, Pigeon Corporation
February 2015 Corporate officer and Division Manager,
Research and Development Division, Pigeon
Corporation
February 2019 Director, Pigeon Manufacturing Ibaraki
Corporation
March 2022 Director, the Company (to present)
April 2023
Outside Independent Director, Morozoff Ltd.
(to present)
April 28, 1959
April 1983
Joined the Company
January 2017 Department Manager, Legal Dept.
March 2018 Standing Corporate Auditor (to present)
January 13, 1965
April 1987
Joined the Company
January 2010 General Manager, Tokyo Purchasing
Department, Purchasing Division
January 2012 General Manager, Purchasing Administration
Department, Purchasing Division
January 2016 General Manager, Purchasing Division
March 2024 Standing Corporate Auditor (to present)
August 25, 1964
April 1992
Registered as attorney-at-law
August 1998 Established Tamakoshi Law Firm (to present)
June 2013
External Auditor, Tomoshia Holdings Co.,
Ltd. (to present)
March 2015 Corporate Auditor, the Company (to present)
November 20, 1958
April 1983
Joined Nisshin Audit Corporation
March 1986 Registered as certified public accountant
November 1989 Registered as certified tax accountant
May 1992
Established Iwase CPA Office (to present)
March 2018 Corporate Auditor, the Company (to present)

Term ofofficeShares held
(thousand)See Note 4.

3

See Note 4.

0

See Note 7.

8

See Note 5.

1

See Note 7.

2

See Note 6.

1

73

Notes:
1. Directors Hirofumi Hayashi, Uichiro Nishio, and Kaoru Kasahara are External Directors.
2. Corporate Auditors Hisayoshi Tamakoshi and Norimasa Iwase are External Corporate Auditors.
3. The Company has adopted a Corporate Officer system to invigorate the activities of the Board of Directors and to
improve management efficiency by clearly differentiating between the Board’s functions of decision-making andoversight of business execution and the business execution functions of individual business divisions.
The Company has nine Corporate Officers: Ryuichi Watanabe, Divisional General Manager, Eastern Japan Sales
Division; Haruyuki Kochi, General Manager, Sales Administration Department; Satoshi Nishiura, General Manager,
Kansai Sales Division No. 1; Yoshihisa Tanaka, in charge of the Logistics Management Division; Mitsusada Maeda,
General Manager, Kansai Sales Division No. 2; Yoshio Iwabashi, General Manager, Tokyo Sales Division No. 3;
Masami Kadotani, Divisional General Manager, Packaging Products Market Division; Shoichi Kimata, General
Manager, Osaka Production Division/General Manager, General Affairs Department, Osaka Production Division; andYuko Nakata, General Manager, Human Resources Department, Corporate Division.
4. The terms of office of Directors run from the end of the Regular General Meeting of Shareholders held March 28,
2024, to the end of the Regular General Meeting of Shareholders for the period ending December 2024.
5. The terms of office of Corporate Auditors run from the end of the Regular General Meeting of Shareholders held
March 28, 2024, to the end of the Regular General Meeting of Shareholders for the period ending December 2026.
6. The terms of office of Corporate Auditors run from the end of the Regular General Meeting of Shareholders held
March 28, 2023, to the end of the Regular General Meeting of Shareholders for the period ending December 2026.

- 42 -

7. The terms of office of Corporate Auditors run from the end of the Regular General Meeting of Shareholders held
March 30, 2022, to the end of the Regular General Meeting of Shareholders for the period ending December 2025.
(ii) External Officers
A. Numbers of External Directors and External Corporate Auditors
The Company has three External Directors and two External Corporate Auditors.
B. Personal, capital, and transactional relations with the Company and other interests in the Company
While External Directors Hirofumi Hayashi, Uichiro Nishio, and Kaoru Kasahara own shares of Company stock(in the quantities indicated in the column for shares of stock held in (i) List of executives above), they have noother relevant interests in the Company.
While Hirofumi Hayashi was affiliated with the Company’s accounting auditor Ernst & Young ShinNihon LLC
from October 1991 to January 2001 (as Century Audit Corporation at the time he joined the organization andCentury Ota Showa & Co. when he left), we have designated him as an Independent Director under the provisions
established by the Tokyo Stock Exchange based on the determination that there is no risk of a conflict of interest
between him and ordinary shareholders. This determination is based on the considerable time since he last served
as accounting auditor. Additionally, since that time, he has operated an independent certified public accountant
and certified tax accountant office. There are no transactional relations between the Company and him or his
office.
While External Corporate Auditors Hisayoshi Tamakoshi and Norimasa Iwase own shares of Company stock (inthe quantities shown in the column for shares of stock held in (i) List of Executives above), they have no otherpersonal, capital, or transactional relations with the Company or other interests in the Company and maintain theirfull independence from the Company. Accordingly, we have designated both of them as Independent Director
under the provisions established by the Tokyo Stock Exchange.
C. Functions and roles to be fulfilled by External Directors and two External Corporate Auditors in corporate
governance and perspectives on their appointment
External Directors are responsible for making Company corporate governance more effective through oversightfrom an objective and neutral standpoint, drawing on their specialized knowledge and experience. Accordingly,
we have appointed as External Directors Hirofumi Hayashi and Uichiro Nishio, who are qualified as certified
public accountants and certified tax accountants and possess special expertise concerning tax, finances, andaccounting, and Kaoru Kasahara, who brings a wealth of business knowledge and expertise on marketing,development, and manufacturing sections with a company listed on the Prime Market of the Tokyo Stock
Exchange in an industry that differs from ours.
External Corporate Auditors are responsible for making Company corporate governance more effective throughaudits undertaken from an objective and neutral standpoint, drawing on their specialized knowledge andexperience. Accordingly, we have appointed as External Corporate Auditors Norimasa Iwase, who is qualified as acertified public accountant and certified tax accountant and offers special expertise regarding tax, finances, andaccounting, and Hisayoshi Tamakoshi, who is qualified as an attorney at law and offers special expertise
concerning legal affairs.
D. Standards and policies concerning independence from the Company
Our basic perspective on appointments of External Directors calls for the appointment of those with theknowledge and experience needed to audit the legal and regulatory compliance and business administration of
Directors in accordance with the requirements for External Directors under the Companies Act and standards forindependence established by financial instruments exchanges. These individuals must be capable of serving asExternal Directors from perspectives independent of the Company management team.

- 43 -

(iii) Cooperation between oversight or audits by External Directors or External Corporate Auditors and internal audits,
audits by Corporate Auditors, and account audits and relationship to internal control sections
External Directors attend meetings of the Board of Directors and implement oversight functions through appropriate
contributions based on their individual expertise, experience, and knowledge of internal controls and other key topics.
External Corporate Auditors attend meetings of the Board of Directors and the Audit and Supervisory Board andimplement audit functions by reviewing reports on the results of internal audits, audits by Corporate Auditors, accountaudits, etc.
External Directors and External Corporate Auditors enhance mutual cooperation through the exchange of informationand opinions, mainly at meetings of the Board of Directors and of the Audit and Supervisory Board.
(3)

Audits(i) Audits by Corporate Auditors
The Company’s Audit and Supervisory Board has four members, including two External Corporate Auditors. The
status of each Corporate Auditor and their attendance at meetings of the Audit and Supervisory Board held during thebusiness year under review are reviewed below.
Title

Name

Career history, etc.

Attendance atmeetings of the Audit
and Supervisory
Board

After joining the Company, Mr. Noda worked in the sales andlegal departments, rising to the post of Department Manager ofStanding
the Legal Department before his appointment as Corporate
Corporate
Shinji Noda
13/13 meetings
Auditor in 2018. He currently chairs the Audit and Supervisory
AuditorBoard. He brings to his assigned position a wealth of businessexperience and commensurate acuity of judgment.
After joining the Company, Mr. Nakamura worked in sales,
audit, and financial departments, rising to the post of Deputy
Standing
Shuichi
Divisional General Manager in the Corporate Division before
Corporate
13/13 meetings
Nakamura
his appointment as Corporate Auditor in 2022. He brings to his
Auditorassigned position a wealth of business experience andcommensurate acuity of judgment.
After registering as an attorney-at-law in 1992, Mr. Tamakoshi
External
was appointed Company Corporate Auditor in 2015. In addition
Hisayoshi
Corporate
to years of experience in corporate law and high-level insight as
13/13 meetings
Tamakoshi
Auditoran attorney, he also brings to his assigned position a wealth ofexperience as an External Corporate Auditor with other firms.
After registering as a certified public accountant in 1986, Mr.
External
Iwase was appointed Company Corporate Auditor in 2018. He
Norimasa
Corporate
brings to his assigned duties years of experience in corporate
13/13 meetings
Iwase
Auditoraccounting, strong insight, and a wealth of experience in financeand accounting.
In implementing on-site audits, the Standing Corporate Auditors continue to draw on their wide-ranging businessexperience with the Company to gather important information from wide-ranging perspectives concerning theCompany’s business operations as a whole. Utilizing their discernment and experience in their areas of expertise,
External Corporate Auditors provide important information and participate from a neutral perspective in the exchangeof opinions among Corporate Auditors.
(ii) Activities of the Audit and Supervisory Board
In principle, the Audit and Supervisory Board meets monthly, and meets at other times as needed. It met 13 times
during the business year under review, with each meeting lasting approximately 90 minutes.
a. Main reports and information sharing Reports on audit activities: Presentations by each Corporate Auditor on the details of investigations and other audit
activities
 Reports on business results: Reports by Standing Corporate Auditors to External Corporate Auditors on the mostrecent monthly business results (sales, profits)
 Review of Board of Directors activities: Reviews of related matters based on the minutes and other documentsfrom recent Board of Directors meetings and reports by Standing Corporate Auditors to External Corporate
Auditors on progress with regard to each matter after the Board of Directors meeting Reports on internal audits: Information sharing on the results of business audits by the Audit Office, which
oversees internal audits, based on internal audit reports- 44 -

 Other: Reports by Standing Corporate Auditors to External Corporate Auditors on the particulars of matterssubmitted to C Line (the internal whistleblowing program), major complaints, and related matters, and on
measures to prevent their recurrenceb. Key topics of study and resolutions
 Formulation of audit policies, division of responsibilities, and audit plans
Priority policies: Implementing audits with a focus on the efficacy of corporate governance and internal
controls; audits of validity and compliance in light of the Act against Delay in Payment of
Subcontract Proceeds, etc. to Subcontractors, the Labor Standards Act, in-house rules on asset
management, internal regulations, and other Company rules, in particular concerning theprevention and control of major potential risks to the Group
Division of responsibilities in audits: Only Standing Corporate Auditors are involved in everyday audits.
External Corporate Auditors undertake audits based on information obtained by attending
meetings, information from reports by Standing Corporate Auditors, and information gleaned
from on-site audits.
 Review of Audit and Supervisory Board Rules and audit standards
 Approval of annual consolidated financial statements, nonconsolidated financial statements, and their annexed
details; of business reports and their annexed details
 Preparing audit reports
 Evaluating the account auditor and determining whether to submit resolutions to the General Meeting of
Shareholders calling for the reappointment or dismissal of the auditor
 Schedules and topics of interviews with the President and Division heads in audit plans
 Reviewing the internal whistleblowing program and advising Board of Directors on its appropriate operation
 Consenting to decisions on audit remuneration paid to the account auditor
 Deliberations and decisions among Corporate Auditors concerning Corporate Auditor remuneration
 Consenting to resolutions on the appointment of Corporate Auditors(iii) Corporate Auditors obligations
a. Attendance at important meetings (numbers of meetings held and numbers of meetings attended indicated for
Board of Directors meetings only)
Meeting
Name
Board of Directors

Conference ofBusiness Division

Executive
Committee

Shinji Noda



17/17 meetings

Shuichi Nakamura

17/17 meetings

Hisayoshi Tamakoshi

17/17 meetings

Norimasa Iwase

17/17 meetings



Other
Nomination Committee
Remuneration Committee

External Officers’
Conference, etc.

Note: Conference of Business Division: Meetings at which the heads of individual business divisions or other persons
responsible report on various matters, including monthly accounts settlements, activity status, and future forecasts
for each section and Group subsidiary
Corporate Auditors attend meetings of the Board of Directors and other important meetings, audit meeting
management and decision-making processes, and offer opinions, as necessary.
b. Interviews with Directors
 The President & CEO is interviewed on a quarterly basis.
 The General Manager of the Production Division is interviewed.
c. Checking on important decision-making documents, etc.
 Viewing and checking on applications for approval and minutes of important meetings, such as those of the Boardof Directors
d. Interviews and exchange of opinions with account auditor
 Exchange of opinions on audit policies, priority items, and candidates as KAMs
 Quarterly reports on the state of audits and reviews of audit results
 Other exchange of information as necessary; six interviews took place during the business year under review.

- 45 -

e. Exchange of information with internal audit section
 Exchange of opinions on audit policies and audit plans Checking on the details of audit reports for business site audits undertaken by the Audit Office
f. On-site audits
 Important matters checked in on-site audits* Workstyle reforms, including compliance with Article 36 agreements* Asset management, in particular compliance with rules on physical inventory check* Compliance with the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors—inparticular, provisions related to the issue of documents under Article 3 and strict compliance with collection
deadlines* Status of receipt of contracts and order forms
 Following the lifting of voluntary restraints on activities intended to prevent the spread of COVID-19, we
undertook on-site inspections and interviews with persons responsible at two Group subsidiaries and one of theCompany’s plants.
g. Ascertaining the state of business activities at and supporting the governance of consolidated subsidiaries
 Standing Corporate Auditors also serve as part-time Corporate Auditors for domestic subsidiaries. They attend
meetings of their boards of directors and other core management meetings and implement business audits.
 Audit accounting documents from accounts settlements each quarter(iv) Status of internal audits
Our internal audits are periodic internal audits carried out by the Audit Office, which has a staff of two members. The
purpose of these audits is to investigate and assess whether the Group’s maintenance and improvement of internal
controls systems under the Companies Act and the Financial Instruments and Exchange Act, as well as its businessexecution, are implemented effectively, efficiently, and in compliance with applicable laws and regulations, various
rules, and management plans. Audit results are reported to the Directors and Corporate Auditors.
(v)

Account auditinga. Name of audit firm
Ernst & Young ShinNihon LLC
b. Period of continual auditing
Since 1990
Due to the extreme difficulty of investigating this information, the period of continual auditing may exceed thetimeframe indicated above.
c. Certified public accountants responsible for operations
Yasuhiro Kozaki
Ryoichi Hayamad. Assistants involved in audit operations
Four certified public accountants and twelve other individuals serve as assistants involved in Company accountaudit operations
e. Policy on and reasons for selecting the account auditor
The Audit and Supervisory Board formulates its own independent audit firm evaluation standards, referring tovarious guidelines from the Japan Audit & Supervisory Board Members Association, and prepares, on that basis,
evaluation documents addressing various matters, including the audit firm’s audit structure, independence, audit
quality, and status of the execution of audit duties. If this evaluation indicates the need to switch to another audit
firm, a decision on the selection thereof is made based on these evaluation standards and a comprehensive
assessment of its audit structure, independence, audit quality, and other key aspects.

- 46 -

f.

Evaluation of the account auditor by the Corporate Auditors and Audit and Supervisory Board
Based on the above evaluation standards during the period under review, the Audit and Supervisory Board verified
the status of the execution of audits by Ernst & Young ShinNihon LLC. The Audit and Supervisory Board
interviewed Ernst & Young ShinNihon regarding the establishment of and compliance with policies andprocedures for ensuring independence and those concerning the appointment and rotation of its employees incharge of audits and training plans for audit staff and the state of their implementation, based on interviews withthe account auditor. The goal was to confirm that the audit firm is indeed independent and competent. On thisbasis, the Audit and Supervisory Board concluded that it would be appropriate to reappoint Ernst & Young
ShinNihon LLC.

(vi) Details of audit remuneration, etc.
a. Remuneration of certified public accountants and others involved in audits
Previous consolidated fiscal year

Consolidated fiscal year under review

Remuneration basedon audit certification
operations (¥ million)

Remuneration basedon non-audit
operations (¥ million)

Remuneration basedon audit certification
operations (¥ million)

Remuneration basedon non-audit
operations (¥ million)

The Company

39

-

39

-

Consolidated
subsidiaries

-

-

-

-

Total

39

-

39

-

Categoryb. Remuneration of certified public accountants and others involved in audits and their network (excluding thoseunder a.)Not applicablec. Details of remuneration based on other important audit certification operations
Not applicabled. Policies concerning decisions on audit remuneration
The Company makes appropriate decisions on audit remuneration for certified public accountants and others
involved in audits with the consent of the Audit and Supervisory Board, taking into account various factors,
including the time required for each audit phase, remuneration amounts per unit, the nature of the activities carriedout, and policies at other companies.
e. Reasons for Audit and Supervisory Board consent for account auditor remuneration
The Company’s Audit and Supervisory Board granted consent for remuneration for the account auditor under
Article 399, Paragraph 1, of the Companies Act based on an analysis and evaluation of audit results in theprevious consolidated fiscal year and study and after confirming the propriety of the audit plans, audit timetable,
staffing plans, and estimated remuneration amounts for the consolidated fiscal year under review.
(4)

Executive remuneration, etc.
(i)

Matters concerning amounts of executive remuneration, etc. or policies on decisions related to their calculation
methodsa. Basic policy on executive remuneration
The Company’s executive remuneration system is intended to maintain a competitive position within the industry
while improving business results, continually strengthening corporate value, sharing profits with shareholders, andreflecting job responsibilities and results.

- 47 -

b. Remuneration structure Based on the resolution passed in the 58th Regular General Meeting of Shareholders held March 30, 2010, total
executive remuneration may not exceed the annual figures of ¥470 million for Directors (the total number of
Directors at the time of that General Meeting of Shareholders was 11) and ¥70 million for Corporate Auditors (thetotal number of Corporate Auditors at the time of the General Meeting of Shareholders in question was four). The
63rd Regular General Meeting of Shareholders held March 27, 2015, approved the payment of annual amounts of
up to ¥30 million in compensation related to share acquisition rights in the form of stock options as share-based
compensation for Directors, within these maximum remuneration limits. The 68th Regular General Meeting of
Shareholders held March 26, 2020, approved the payment of a total annual amount of up to ¥30 million ofmonetary remuneration claims as part of a transfer-restricted share-based compensation program.
 Remuneration for Directors (excluding External Directors) consists of base remuneration at fixed levels reflecting
the scope of their duties, bonuses determined based on their contributions to the businesses they oversee, andtransfer-restricted share-based remuneration (through the 68th fiscal period, stock options).
 External Directors and External Corporate Auditors are paid base remuneration only.
c. Remuneration calculation methods and decision-making processes(A) Procedure for calculating remuneration
 Base remuneration
Base remuneration is determined by considering the base remuneration determined in accordance with the
Director’s position and responsibilities as remuneration for job execution. It is paid as a fixed monthly
amount.
 Bonuses (performance-linked remuneration)
Bonuses serve as an incentive to improve business results and increase corporate value over the short term.
They are paid based on a fixed percentage of the indicator of annual consolidated operating income. The
Remuneration Committee determines bonuses with consideration for the contribution of each Director to
the businesses of which he or she is in charge, and they are paid at fixed times each year. This indicator
was chosen because it makes it possible to verify objectively the results and responsibilities of the
management team.
 Share-based remuneration stock options (performance-linked remuneration)
The share-based remuneration stock options program awards share acquisition rights on Company stock to
Directors as an incentive to improve business results and increase corporate value over the medium to longterm based on shared awareness with shareholders of the risks and rewards of stock-price fluctuations.
Only when the rate of growth in consolidated financial results (net sales and operating income) in thefiscal year in which the share acquisition rights were allotted was at least 100% vs. the previous fiscal year
may a holder of share acquisition rights exercise all share acquisition rights allotted in that fiscal year. If
the rate of growth was less than 100%, then only a portion of the share acquisition rights allotted in that
fiscal year, based on the rate of growth, may be exercised.
With the adoption of a share-based remuneration program based on transfer-restricted shares, stock options
other than those already allotted have been discontinued. New options will not be issued.
 Share-based remuneration program through transfer-restricted shares (performance-linked compensation;“program” hereinafter)
The share-based remuneration program based on transfer-restricted shares is a remuneration program
adopted to replace the share-based remuneration program of stock options. The goal is to enhance valuesharing with shareholders and contribute to mid- to long-term growth in corporate value.
Based on a resolution of the Company Board of Directors, monetary remuneration claims are paid eachbusiness year as remuneration related to transfer-restricted shares. Each Director is allotted shares ofCompany common share through the payment of all monetary remuneration claims as investments in kind.
Later, restrictions on the transfer of allotted shares are waived after the Director resigns.

- 48 -

(B) Decision-making process
A policy on determining the specifics of remuneration for individual Directors was approved by a resolutionof the Board of Directors in its March 29, 2022, meeting. In deliberating on this resolution, the Board
solicited the opinions of the Remuneration Committee regarding the details of the resolution decided on inadvance by Executive Directors. The Board also checks to make sure that the method of deciding the details
of individual remuneration, etc., and the details of such remuneration, etc., for Directors in the business year
under review are consistent with Board resolutions on decision policies and that the views of theRemuneration Committee are given sufficient weight. The Board has determined that this remuneration does
comply with such policies.
Remuneration of Corporate Auditors is determined through discussions among the Corporate Auditors,
based on monthly base amounts reflecting various considerations, including their standing or non-standing
status and years of experience as Corporate Auditors.
(ii) Total remuneration, total amounts by type per executive, numbers of eligible executives

Executive category

Directors(excluding External Directors)
Corporate Auditors(excluding External Corporate
Auditors)
External Officers

Total remuneration, etc. by type (¥ million)

Total
remuneration,etc.
(¥ million)Base
remuneration

250

209

23

17

6

37

37

-

-

2

41

41

-

-

5

Transferrestricted
share-based
remuneration

Bonus

Number of
subject
executives(iii) Total consolidated remuneration, etc. by executive
Not indicated since no executive received total consolidated remuneration, etc. exceeding ¥100 million(iv) Material employee salaries earned by executives serving concurrently in employee positions
Not applicable(5)

Status of ownership of stock(i)Standards and rationale underlying equity investment categories
The Company categorizes equity investments into those held purely for investment purposes, held to gain fromfluctuations in stock prices or dividends, and those held for other than purely investment purposes (crossshareholding). Currently, we hold no shares of stock purely for investment purposes.

(ii) Equity investments held for other than purely investment purposesa. Holding policies, method of verifying feasibility of holdings, and details of verification by the Board of Directors
whether to hold individual issues
1) Policy on cross-shareholdings
The Company’s basic policy is not to hold cross-shareholdings except when their holding is recognized to beimportant. The importance of such holdings is judged based on whether they would contribute to sustained
business growth and the strengthening of transaction relationships through joint efforts with the issuer
company.
2) Verification of the feasibility of cross-shareholdings
Together with quantitative verification of the propriety of the economic value and capital cost of each issue,
we also take into comprehensive consideration qualitative perspectives such as strategic relations andimportance in verifying the feasibility of holdings. The Board of Directors reviews them in detail on aquarterly basis and reduces shareholdings if they are judged not to comply with this policy.

- 49 -

3) Standards on exercise of voting rights related to cross-shareholdings
Voting rights are exercised appropriately through close examination of the details of resolutions to determine
whether they would contribute to increased shareholder value. We do not support any resolutions that could
markedly harm shareholder interests. When voting against a resolution, we report such fact to the Board of
Directors. In principle, we exercise voting rights on all resolutions.
b. Number of issues and amount on balance sheet
Number ofissuesUnlisted shares

Total amount on balance
sheet (¥ million)

10

181

Shares other than unlisted
56
5,382
sharesNote: In addition to the above, the investment securities account includes one issue of investment in an
investment limited liability partnership. This does not constitute a shareholding.
(Issues for which the number of shares increased in the business year under review)
Total purchase price
Number of
related to increase inReason for increase in sharesissuesshares, etc. (¥ million)
Unlisted shares
Shares other than unlisted
shares--14

Acquisition of shares via the Trading
Partners Stock Ownership Plan or25
other means to create business
opportunities(Issues for which numbers of shares decreased in the business year under review)
Total sale price related to
Number of
decrease in shares, etc.
issues(¥ million)
Unlisted shares--

Shares other than unlisted
shares1

1- 50 --

c. Information on numbers of shares per issue and amount on balance sheet of specified investment shares andIssue

imputed share holdings
Specified investment sharesBusiness year under Previous business
review
year
SharesSharesAmount on balance Amount on balance
sheet (¥ million)
sheet (¥ million)
209,000

Daiwa House
Industry Co., Ltd.
892

830,000
Kosaido Holdings
Co., Ltd.
630

253,000
Marubeni
Corporation
563

370,000
Hokuetsu
Corporation
524

20,918
Takara Standard
Co., Ltd.
523

110,561
Marui Group Co.,
Ltd.
261

110,300
Look Holdings
Incorporated
255

Purpose of holding, quantitative effects of holding,and reason for increase in shares

To maintain and enhance transaction relationships
209,000 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and635 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
166,000 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits andrisks of holding shares are commensurate with capital
351 costs is verified both quantitatively and qualitatively.
* The increase in numbers of shares was due to a
stock split.
To maintain and enhance transaction relationships
253,000 involving Company products, etc. (purchasing).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and
383 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
370,000 involving Company products, etc. (purchasing).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and
281 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain319,346 transaction relationships in line with sales and otherpolicies, and the number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
441 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
Additional shares acquired to maintain and enhancetransaction relationships involving Company products,
110,561
etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and241
risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
Additional shares acquired to maintain and enhancetransaction relationships involving Company products,
110,300
etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and265
risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.

- 51 -

Holds
shares ofCompany
stock?

Y

Y

Y

Y

N

N

Y

IssueBusiness year underreview
SharesAmount on balance
sheet (¥ million)
222,000

Daio Paper
Corporation
249

Mitsubishi UFJ
Financial Group,
Inc.

Sumitomo Realty& Development
Co., Ltd.

200,000

242

52,500220

50,600Superbag Co., Ltd.
122

41,123
Fuji Maxvalu
Nishinihon Co.,
Ltd.
78

192,148
Mac House Co.,Ltd.
72

21,963
Aeon Co., Ltd.
69

24,622Rock Field Co.,
Ltd.
39

Previous business
year
SharesAmount on balance
sheet (¥ million)

Purpose of holding, quantitative effects of holding,and reason for increase in shares

To maintain and enhance transaction relationships
222,000 involving Company products, etc. (purchasing).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and224 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance financial transaction
200,000 relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and
177 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
52,500 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and
163 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
50,600 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and38 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
40,257 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
73 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
182,828 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
69 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
21,963 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and61 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
23,566 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
35 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.

- 52 -

Holds
shares ofCompany
stock?

Y

N(See Note
1.)

Y

Y

Y

N

N

N

IssueBusiness year underreview
SharesAmount on balance
sheet (¥ million)
29,000

Daicel Corporation
39

15,000Okura IndustrialCo., Ltd.
38

17,274
Eat&Holdings Co.,Ltd.
36

16,946
Heiwado Co., Ltd.
36

9,750
Aeon Delight Co.,Ltd.
34

29,747
Aoki Holdings Inc.
33

38,539Chiyoda Co., Ltd.
33

Previous business
year
SharesAmount on balance
sheet (¥ million)

Purpose of holding, quantitative effects of holding,and reason for increase in shares

To maintain and enhance transaction relationships
29,000 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and27 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
Shares purchased to maintain smooth transaction
relationships involving Company products, etc.
15,000 (purchasing) in the Film Packaging business andenhance efforts such as joint development of ecofriendly products.
Numerical figures on results of holding are notdisclosed because they include confidential sales
27 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
16,098 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
37 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
16,148 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
34 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
9,750 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and29 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
27,788 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
19 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
33,420 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
26 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.

- 53 -

Holds
shares ofCompany
stock?

N

Y

N

N

N

N

N

IssueFukuyama
Transporting Co.,
Ltd.

Sumitomo Mitsui
Financial Group,
Inc.

Japan Pulp And
Paper Company
LimitedBusiness year underreview
SharesAmount on balance
sheet (¥ million)
8,000

32

4,230

29

5,689

28

6,662
Izumi Co., Ltd.
24

Sumitomo Mitsui
Trust Holdings,
Inc.

8,294

22

16,000Morito Co., Ltd.
20

10,978Marudai Food Co.,Ltd.
17

11,500Isetan Mitsukoshi
Holdings Ltd.
17

Kintetsu
Department Store
Co., Ltd.

6,200

16

Previous business
year
SharesAmount on balance
sheet (¥ million)

Purpose of holding, quantitative effects of holding,and reason for increase in shares

To maintain and enhance transaction relationships
8,000 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and24 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance financial transaction
4,230 relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and22 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
5,689 involving Company products, etc. (purchasing).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and29 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
6,662 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and19 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance financial transaction
4,147 relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and19 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
16,000 involving Company products, etc. (purchasing).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and
11 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
10,978 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and
15 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and streamline transaction relationships
11,500 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and16 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
6,200 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and16 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.

- 54 -

Holds
shares ofCompany
stock?

N

N(See Note
1.)

Y

N

N
(See Note
1.)

Y

N

N

N

IssueBusiness year underreview
SharesAmount on balance
sheet (¥ million)

14,514Previous business
year
SharesAmount on balance
sheet (¥ million)

13,913Tenmaya Store
Co., Ltd.
16

14

2,827

2,827

Seven & I
Holdings Co., Ltd.
15

16

20,45020,450Haruyama
Holdings Inc.
12

8

4,000

4,000

FP Corporation
11

15

6,518

6,518

Lixil Group
11

13

4,356

4,356

Royal Holdings
Co., Ltd.
11

10

5,086

4,304

4℃ Holdings Co.,
Ltd.
10

7

25,43425,434

Konaka Co., Ltd.
10

8

Purpose of holding, quantitative effects of holding,and reason for increase in shares(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintaintransaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
involving Company products, etc. (purchasing).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintaintransaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.

- 55 -

Holds
shares ofCompany
stock?

N

N

Y

N

N

N

N

Y

IssueBusiness year underreview
SharesAmount on balance
sheet (¥ million)
2,600

Ito En, Ltd.
94,400
Chofu Seisakusho
Co., Ltd.
8

9,850
Okuwa Co., Ltd.
8

1,713
Jins Holdings Inc.
8

21,125
Izutsuya Co., Ltd.
8

5,050
Edion Corporation
7

12,304
Oji Holdings
Corporation
6

Previous business
year
SharesAmount on balance
sheet (¥ million)

Purpose of holding, quantitative effects of holding,and reason for increase in shares

To maintain and enhance transaction relationships
2,600 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and
10 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
4,400 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and8 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
8,989 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
7 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
1,368 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
6 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
19,167 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
7 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
5,050 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and6 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
12,304 involving Company products, etc. (purchasing).。
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and6 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.

- 56 -

Holds
shares ofCompany
stock?

N

N

N

N

N

N

Y

IssueBusiness year underreview
SharesAmount on balance
sheet (¥ million)
4,680

Xebio Group4

12,000G-Foot3

2,079
H2O Retailing
Corp.
3

4,218
Right-On Co., Ltd.
1

1,200
Shimojima Co.,
Ltd.
1

1,455
Scroll Corporation
1

3,000
Heiwa Paper Co.,Ltd.
1

11,000Taka-Q Co., Ltd.
0Previous business
year
SharesAmount on balance
sheet (¥ million)

Purpose of holding, quantitative effects of holding,and reason for increase in shares

To maintain and enhance transaction relationships
4,680 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and4 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
12,000 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and3 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
2,079 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and2 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
4,218 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and2 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
1,200 involving Company products, etc. (purchasing).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and1 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
(Shares acquired through Trading Partners Stock
Ownership Plan) These shares are held to maintain
1,249 transaction relationships in line with sales and otherpolicies. The number of shares was increased tostrengthen these relationships.
Numerical figures on results of holding are notdisclosed because they include confidential sales
0 information. However, the fact that the benefits andrisks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
3,000 involving Company products, etc. (purchasing).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and1 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
11,000 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and0 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.

- 57 -

Holds
shares ofCompany
stock?

N

N

N

N

Y

N

Y

N

Business year underreview
SharesAmount on balance
sheet (¥ million)

Issue

1,000
Nozaki Insatsu
Shigyo Co., Ltd.
0205
Palemo Holdings
Co., Ltd.
0Japan Craft
Holdings Co., Ltd.
-

Previous business
year
SharesAmount on balance
sheet (¥ million)

Purpose of holding, quantitative effects of holding,and reason for increase in shares

To maintain and enhance transaction relationships
1,000 involving Company products, etc. (purchasing).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and0 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
205 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and0 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.
To maintain and enhance transaction relationships
2,600 involving Company products, etc. (sales).
Numerical figures on results of holding are notdisclosed because they include confidential sales
information. However, the fact that the benefits and1 risks of holding shares are commensurate with capitalcosts is verified both quantitatively and qualitatively.

Holds
shares ofCompany
stock?

N

N

N(See Note2.)

Notes:
1. While the company in which we hold shares does not own Company stock, a subsidiary of the company does own
Company stock.
2. “-” indicates no holdings of the relevant issue.
(iii) Equity investments held purely for investment purposes
Not applicable- 58 -

V. Accounts
1.

Method for preparing consolidated and non-consolidated financial statements(1) The Company’s consolidated financial statements are prepared based on the Regulation on Terminology, Forms, andPreparation Methods of Consolidated Financial Statements (Ministry of Finance Order No. 28 of 1976).
(2)

The Company’s nonconsolidated financial statements are prepared based on the Regulation on Terminology, Forms, andPreparation Methods of Financial Statements (Ministry of Finance Order No. 59 of 1963).
Since it qualifies as a company submitting exceptional financial statements, the Company prepares financial statements
pursuant to the provisions of Article 127 of the Regulation on Financial Statements, etc.

2.

Audit certification
Pursuant to the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, the Company’s
consolidated financial statements for the consolidated fiscal year under review (from January 1, 2023 to December 31, 2023) andnonconsolidated financial statements for the fiscal year under review (from January 1, 2023 to December 31, 2023) have been
audited by Ernst & Young ShinNihon LLC.

3.

Special efforts to ensure the accuracy of consolidated financial statements, etc.
The Company makes special efforts to ensure the accuracy of its consolidated financial statements, etc. Specifically, to maintaina structure that enables it to ascertain appropriately the content of accounting standards, etc., it is a member of the Financial
Accounting Standards Foundation and takes part in activities, including training provided by the bodies establishing accounting
standards and other organizations.

- 59 -

1.

Consolidated financial statements, etc.
(1)

Consolidated financial statements(i) Consolidated Balance Sheet(¥ million)
Previous fiscal year
(December 31, 2022)

AssetsCurrent assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant, and equipment
Buildings and structures, net
Machinery, equipment, and vehicles, net
Tools, furniture and fixtures, net
LandConstruction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Retirement benefit assets
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 60 -

Fiscal year under review(December 31, 2023)

16,163

16,322*1 4,530*1 4,572

19,355
12,500
6,015
1,032
1,108
792
(14)
61,48420,081
8,100
7,038
1,058
981
936
(11)
59,080

6,132
5,641
348
8,539
3,068
*2 23,729
1,044

8,154
6,443
347
10,823
1,632*2 27,401
2,679

6,746
421
992
(53)
8,106
32,881
94,365

8,127
385
106
1,116
(51)
9,685
39,766
98,847(¥ million)
Previous fiscal year
(December 31, 2022)
Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations-operating
Current portion of long-term loans payable
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and other officers)
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Retirement benefit liability
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition rights
Total net assets
Total liabilities and net assets- 61 -

Fiscal year under review(December 31, 2023)*1 14,370*1 13,890*1 6,689*1 7,264

25
1,349
291
45
*3 3,283
26,054

25
1,397
322
52
*3 3,652
26,605

34
2,294
431
178
2,939
28,994

9
343
664
67
1,085
27,691

2,553
3,166
60,654(2,661)
63,7132,553
3,156
64,975(2,593)68,092

1,391
(3)
89
134
1,611
46
65,371
94,365

2,417
(2)
235
369
3,018
45
71,156
98,847

(ii) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income(¥ million)
Previous fiscal year
(from January 1, 2022
to December 31, 2022)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rent income Compensation income
Compensation receipts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Cost of lease revenue
Compensation for damages
Loss (gain) on investments in partnership
Foreign exchange gains
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Gain on sales of non-current assets
Government subsidy
Total extraordinary income
Extraordinary losses
Loss on sales on non-current assets
Loss on retirement of non-current assets
Loss on valuation of investments securities
Loss on sales of investment securities
Impairment loss
Loss on depreciation of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent- 62 -

Fiscal year under review(from January 1, 2023
to December 31, 2023)*1 89,060*1 97,714*2,*4 67,382*2,*4 72,949

21,677

24,765*3,*4 15,705*3,*4 17,021

5,972

7,743

128
136
46
65
51
428

150
145
39
31
367

1
20
9
8
6
47
6,353

1
5
8
30
3
48
8,063

66

0

*5 1

*5 0

67

49
49

*6 0

-

*7 40

*7 12265
65*8 323
495
5,925
1,947
(72)
1,875
4,050
(8)
4,058

49
171
7,941
2,276
12
2,288
5,652
5,652

Consolidated Statement of Comprehensive Income(¥ million)
Previous fiscal year
(from January 1, 2022
to December 31, 2022)
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests- 63 -

Fiscal year under review(from January 1, 2023
to December 31, 2023)
4,050

5,652

179
(4)
189
(51)
*1 312
4,362

1,026
1
145
234
*1 1,407
7,059

4,370

7,059

(7)

-

(iii) Consolidated Statement of Changes in Equity
Previous fiscal year (from January 1, 2022 to December 31, 2022)(¥ million)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

2,553

Retained earnings

3,164

Total shareholders’equityTreasury shares

57,640(2,704)60,654

Changes in items during period
Dividends of surplus(1,045)(1,045)

Profit attributable to owners ofparent

4,058

4,058

Purchase of treasury shares

(0)

(0)

42

39

Disposal of treasury shares(3)

Increase (decrease) in equity
resulting form acquisition ofshares in consolidated
subsidiaries

55

Net changes in items otherthan shareholders’ equity--

Total changes in items during
periodBalance at end of current period

-

2

3,013

42

3,058

2,553

3,166

60,654(2,661)

63,713Foreign currencytranslation adjustment

Remeasurements ofdefined benefit plans

Total accumulated
other comprehensive
income

(98)

185

1,300

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Balance at beginning of current
periodDeferred gains orlosses on hedges

1,212

0

Changes in items during period
Dividends of surplus-

Profit attributable to owners ofparent-Purchase of treasury shares-

Disposal of treasury shares-

Increase (decrease) in equity
resulting form acquisition ofshares in consolidated
subsidiaries-

Net changes in items otherthan shareholders’ equity

178

(4)

188

(51)

311

Total changes in items during
period

178

(4)

188

(51)

311

Balance at end of current period

1,391

(3)

89

134

1,611

Share acquisition rights
Balance at beginning of current
period63

Non-controllinginterests

Total net assets
13

62,032

Changes in items during period
Dividends of surplus(1,045)

Profit attributable to owners ofparent

4,058

Purchase of treasury shares(0)

Disposal of treasury shares

39

Increase (decrease) in equity
resulting form acquisition ofshares in consolidated
subsidiaries

5

Net changes in items otherthan shareholders’ equity

(17)

(13)

280

Total changes in items during
period

(17)

(13)

3,338

Balance at end of current period

46-

65,371- 64 -

Fiscal year under review (from January 1, 2023 to December 31, 2023)(¥ million)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus

2,553

Retained earnings

3,166

Total shareholders’equityTreasury shares

60,654(2,661)

63,713

Changes in items during period
Dividends of surplus(1,331)(1,331)

Profit attributable to owners ofparent

5,652

5,652

Purchase of treasury shares
Disposal of treasury shares

(9)

(0)

(0)

68

58

Increase (decrease) in equity
resulting form acquisition ofshares in consolidated
subsidiaries
Net changes in items otherthan shareholders’ equity--

Total changes in items during
periodBalance at end of current period

-

(9)

4,321

68

4,379

2,553

3,156

64,975(2,593)68,092Foreign currencytranslation adjustment

Remeasurements ofdefined benefit plans

Total accumulated
other comprehensive
income

89

134

1,611

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Balance at beginning of current
periodDeferred gains orlosses on hedges

1,391

(3)

Changes in items during period
Dividends of surplus-

Profit attributable to owners ofparent-Purchase of treasury shares-

Disposal of treasury shares-

Increase (decrease) in equity
resulting form acquisition ofshares in consolidated
subsidiaries-

Net changes in items otherthan shareholders’ equity

1,026

1

145

234

1,407

Total changes in items during
period

1,026

1

145

234

1,407

Balance at end of current period

2,417

(2)

235

369

3,018

Share acquisition rights
Balance at beginning of current
period46

Non-controllinginterests

Total net assets-

65,371

Changes in items during period
Dividends of surplus(1,331)

Profit attributable to owners ofparent

5,652

Purchase of treasury shares(0)

Increase (decrease) in equity
resulting form acquisition ofshares in consolidated
subsidiaries

58

Disposal of treasury shares-

Net changes in items otherthan shareholders’ equity(1)

Total changes in items during
period

(1)

-

5,785

Balance at end of current period

45-

71,156

1,405- 65 -

(iv) Consolidated Statement of Cash Flows(¥ million)
Previous fiscal year
(from January 1, 2022
to December 31, 2022)
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors
and other officers
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit assets
Contribution to employee retirement benefits trust
Interest and dividend income
Interest expenses
Loss (gain) on investments in partnership
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Loss on depreciation of non-current assets
Government subsidy
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of securities
Proceeds from sales of securities
Purchase of property, plant, and equipment
Proceeds from sales of property, plant, and equipment
Purchase of intangible assets
Payments for asset retirement obligations
Purchase of investment securities
Proceeds from sales of investment securities
Payments for leasehold and guarantee deposits
Proceeds from government subsidy
Other, net
Net cash provided by (used in) investment activities
Cash flows from financing activities
Repayments of long-term loans payable
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 66 -

Fiscal year under review(from January 1, 2023
to December 31, 2023)
5,925
1,992
323
5
23

7,941
2,082
(5)
31

13

7

(213)
(264)
1
(0)
40
(0)
65
(2,825)(1,704)
3,264
68
6,715
275
(1)
(1,608)
5,380

285
(385)
(1,900)
(296)
1
8
(0)
122
49
(49)
(0)
(692)
(914)
66
37
6,390
298
(1)
(2,244)
4,443(10,000)
12,000(3,109)3(433)(2,357)
204
(39)
(29)
(3,762)(9,000)12,500(5,581)0(1,702)
(52)
(36)
1
(212)
49
70
(3,962)(25)(1,043)(55)(1,124)91
585
18,067*1 18,653(25)(1,334)(48)(1,407)86(840)
18,653*1 17,812

[Notes]
Important matters serving as bases for the preparation of the consolidated financial statements
1. Scope of consolidation
Number of consolidated subsidiaries: 8 companies
Names of consolidated subsidiaries shown are shown under “I. Company overview: 4. Affiliate companies” and are
therefore omitted.
2. Application of equity method accounting
The Company has no nonconsolidated subsidiaries or affiliates.
3. Business years of consolidated subsidiaries and other matters
The businesses years of consolidated subsidiaries end on the same date as for consolidated accounts settlements.
4. Accounting policies(1) Valuation standards and valuation methods for important assets(i) Investment securities
Bonds held to maturity
Amortized cost method (straight line method)
Available-for-sale securitiesThose other than stocks, etc. with no market value…… Mark-to-market (Valuation differences are charged or credited directly to owners’ equity. The cost of
securities sold is computed by the moving average method.)
Stocks, etc. with no market value…… Stated at cost by the moving average method
Investments in investment limited liability partnerships and similar partnerships (those deemed
securities under Article 2, Paragraph 2, of the Financial Instruments and Exchange Act) are valued
based on the net amount equivalent to equity based on the most recent financial statements available, in
accordance with the reporting date of accounts settlements stipulated in the partnership agreement.
(ii) Derivatives…… Mark-to-market(iii) Inventories
Merchandise and finished goods, work in process, raw materials…… Stated at cost based on the weighted average method (Amounts shown on the Balance Sheet reflectmarked down book values based on decreases in profitability.)
Supplies…… Stated at cost based on the last purchase price method (Amounts shown on the Balance Sheet reflectmarked down book values based on decreases in profitability.)(2) Depreciation methods for important depreciable assets(i) Property, plant, and equipment (excluding leased assets)
The Company and domestic consolidated subsidiaries apply the declining balance method. Overseas
consolidated subsidiaries apply the straight line method.
However, for properties (excluding facilities attached to buildings) acquired on or after April 1, 1998, and forfacilities attached to buildings and structures acquired on or after April 1, 2016, the Company and domestic
consolidated subsidiaries apply the straight line method.
Useful life is given below.
Buildings and structures:
Machinery, equipment, and vehicles:

10-50 years
5-12 years(ii) Intangible fixed assets (excluding leased assets)
The straight line method applies.
For software, the straight line method applies, based on the estimated usable period (five years).

- 67 -

(iii) Lease assets
Lease assets related to finance lease transactions not involving transfer of ownership
The straight line method applies, with the lease period serving as the useful life and zero as the residual value.
(3) Accounting standards for important reserves(i) Allowance for doubtful accounts
In preparation for losses from default on claims, the amount anticipated of unrecoverable claims is booked
based on the actual rate of recoverability for ordinary claims. The possibility of recovery is considered for eachclaim for specific claims, such as those considered unlikely to be recoverable.
(ii) Provision for bonuses
Set aside for employee bonuses, this amount is booked based on the estimated bonuses to be paid during theconsolidated fiscal year.
(iii) Provision for executive bonuses
Set aside for executive and executive officer bonuses, this amount is booked based on the estimated amounts ofbonuses to be paid at the end of the consolidated fiscal year.
(4)

Accounting methods for retirement benefits
To prepare for payments for employee retirement benefits, this amount is booked based on estimated retirement

benefit obligations and pension assets at the end of the fiscal year.
(i) Method for allocating estimated retirement benefits to fiscal periods
For calculations of retirement benefits, the standards that apply to benefits calculation formulas are used toallocate estimated retirement benefits through the period extending to the end of the consolidated fiscal year.
(ii) Method for processing actuarial differences and past employment costs as expenses
Actuarial differences are expensed from the following consolidated fiscal year by the straight line method basedon a fixed number of years (10 years) within the average remaining number of service years of employees at thetime the actuarial differences are incurred.
Past employment costs are expensed in the consolidated fiscal year in which they were incurred by the straightline method based on a fixed number of years (10 years) within the average remaining number of service yearsof employees at the time they are incurred.
(iii) Application of the simplified method for small companies, etc.
For calculations of retirement benefit obligations and retirement benefit costs, some consolidated subsidiaries
apply the simplified method of recognizing amounts of retirement benefits that need to be paid for voluntary
retirement at the end of the period as retirement benefit obligations.
(5) Accounting standards for significant revenues and expenses
Sale of finished goods and merchandise
The Group primarily manufactures and sells paper products and similar products. In sales of such finished goods
and merchandise, performance obligations are judged complete when the customer secures control of the finishedgoods and merchandise at the point in time at which they are delivered to the customer. As such, revenues arerecognized at the time of delivery of the finished goods and merchandise. However, if the time from shipment todelivery to the customer in domestic sales in Japan is of ordinary duration, revenues are recognized at the time of
shipment. In addition, if the Group is involved in sales of merchandise as an agent, revenues are recognized in net
amounts. Whether the Company is engaged in a transaction as a direct party or an agent is determined based onwhether it has control of the specified merchandise before its transfer to the customer.
In addition, revenues are measured at the prices pledged in the contract with the customer, minus returns,
discounts, rebates, and other such sums. The prices of transactions are received within one year after thefulfillment of performance obligations and do not involve material financial elements.

- 68 -

(6)Standards for conversion of assets or liabilities denominated in foreign currency to Japanese currency
Monetary assets and liabilities denominated in foreign currency are converted to Japanese yen using the spot
exchange rate on the date of accounts settlements. Any resulting valuation differences are recorded as gains orlosses.
Assets and liabilities of overseas subsidiaries are converted to Japanese yen using the spot exchange rate on thedate of accounts settlements of the overseas subsidiary, and gains and losses are converted to yen using the
average exchange rate during the period. Any resulting valuation differences are included in Foreign currencytranslation adjustments and Non-controlling interests under net assets.

(7)

Important hedge accounting methods(i)

Hedge accounting methods
Deferred hedge accounting is employed.
Designated hedge accounting is employed for foreign currency monetary obligations to which forward foreignexchange contracts are attached.

(ii) Hedging methods and targets
Hedging methods: forward foreign exchange contracts
Hedging targets: foreign currency monetary obligations, planned transactions in foreign currency(iii) Hedging policy
Forward foreign exchange contracts are formed within the range of actual demand to reduce the risk of
exchange rate fluctuations.
(iv) Assessing hedging efficacy
Assessments of hedging efficacy on the date of accounts settlements is omitted for forward foreign exchange
contracts because the method of allocation in the same foreign currency and with the same maturity dates,
which ensures correlation under later exchange rate fluctuations, is employed instead.
(8)

Scope of funds contributing to Consolidated Statement of Cash FlowsThe scope of funds (cash and cash equivalents) included on the Consolidated Statement of Cash Flows consist of
cash on hand, demand deposits, and short-term investments that are easily convertible to cash, involve minor risksof fluctuating values, and mature or become redeemable within three months.

Accounting standards, etc., not applied
1. Practical Solution on the Accounting for and Disclosure of the Issuance and Holding of Electronically Recorded
Transferable Rights that Must be Indicated on Securities, etc.
 Practical Solution on the Accounting for and Disclosure of the Issuance and Holding of Electronically Recorded
Transferable Rights that Must be Indicated on Securities, etc. (ASBJ Practical Solution No. 43, August 26, 2022)(1)

Overview
The Act for the Partial Revision of the Payment Services Act to Address the Diversification of Financial
Transactions based on Advances in Information Technology (Act No. 28 of 2019), enacted in May 2019, amends the
Financial Instruments and Exchange Act to make initial coin offerings (ICOs; a term referring in general toelectronic tokens issued by businesses and other issuers to raise funds from investors) subject to regulation under the
Financial Instruments and Exchange Act. In light of this fact and the development of various related regulations, the
ASBJ issued this Practical Solution to elucidate accounting for and disclosure of the issuance and holding ofelectronically recorded transferable rights that must be indicated on securities, etc. under the Cabinet Office Orderon Financial Instruments Business.

(2)

Scheduled application dateTo apply from the start of the period ending December 2024

- 69 -

(3)Effect of application of this accounting standard, etc.
We are currently evaluating the scope of the potential impact on consolidated financial statements of application of
the Practical Solution on the Accounting for and Disclosure of the Issuance and Holding of Electronically Recorded
Transferable Rights that Must be Indicated on Securities, etc.

2. Accounting Standard for Current Income Taxes, etc.
 Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, October 28, 2022)
 Accounting Standard for Presentation of Comprehensive Income (ASBJ Statement No. 25, October 28, 2022)
 Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022)(1)

Overview
In February 2018, the ASBJ issued ASBJ Statement No. 28, Partial Amendments to Accounting Standard for Tax
Effect Accounting, and related documents, and the Japanese Institute of Certified Public Accountants (JICPA)
completed transfer of practical guidance on tax effect accounting to the ASBJ. In the process of related deliberations,the following two points were reconsidered and related documents issued after the issue of ASBJ Statement No. 28
and related documents.
 Accounting categories of tax effect accounting (taxation of other comprehensive income) Tax effects of sales of subsidiary stock shares, etc. (shares of stock in subsidiaries and affiliates) when applying
the group corporate taxation system(2)

Planned date of application
To be applied from the start of the fiscal year ending December 2025(3)

Effect of application of this accounting standard, etc.
We are currently evaluating the scope of the potential effect on consolidated financial statements of application of
the Accounting Standard for Current Income Taxes, etc.

Consolidated Balance Sheet*1 In account processing of notes and other transaction documents maturing on the ending date of the period, we process
settlement of accounts based on the dates of exchange or other transactions of the notes.
Since the ending date of the consolidated fiscal year was a holiday for financial institutions, notes and other transaction
documents maturing on the ending date of the next period include ending balances.

Previous consolidated fiscal year
(December 31, 2022)(¥ million)
Consolidated fiscal year underreview(December 31, 2023)
257

Notes receivable

246

Notes payable
Electronically recorded obligationsoperating

165

103

187

226

*2 Cumulative depreciation of property, plant, and equipment
Previous consolidated fiscal year
(December 31, 2022)
38,528(¥ million)
Consolidated fiscal year underreview(December 31, 2023)
39,467*3 The amount of contract liabilities included under “Other” is shown in the consolidated financial statements under“Notes: Revenue recognition: 3. (1) Balance of contract liabilities, etc.”- 70 -

Consolidated Statement of Income*1 Revenue from contracts with customers
Net sales are not differentiated into revenue from contracts with customers and other revenue. The revenue arising fromcontracts with customers is shown in the consolidated financial statements under “Notes: Revenue recognition: 1.
Analysis of revenues from contracts with customers.”*2 Ending inventories are shown in amounts that reflect marking down book value based on decreases in profitability. The
following losses on valuation of inventories are included in cost of sales.

Previous consolidated fiscal year
(from January 1, 2022
to December 31, 2022)
45(¥ million)
Consolidated fiscal year underreview(from January 1, 2023
to December 31, 2023)
38*3 The main costs included in selling, general, and administrative expenses, and their amounts, are presented below.

Previous consolidated fiscal year
(from January 1, 2022
to December 31, 2022)(¥ million)
Consolidated fiscal year underreview(from January 1, 2023
to December 31, 2023)
4,209

Freightage and packing expenses

4,122

Salaries and allowances

4,246

4,659

Director compensation

415

497

Provision of allowance for doubtful accounts

14

4

Provision for bonuses

156

173

Provision for director bonuses

41

49

Retirement benefit expenses

244

234

Depreciation

433

469

Rent expenses

2,892

3,122

*4 Total R&D expenses included in general and administrative expenses and manufacturing costs during the period arepresented below.

Previous consolidated fiscal year
(from January 1, 2022
to December 31, 2022)
386(¥ million)
Consolidated fiscal year underreview(from January 1, 2023
to December 31, 2023)
413*5 Details of gain on sales of non-current assets are presented below.

Previous consolidated fiscal year
(from January 1, 2022
to December 31, 2022)(¥ million)
Consolidated fiscal year underreview(from January 1, 2023
to December 31, 2023)-

Machinery, equipment, and vehicles

1

Tools, furniture and fixtures

-

0

Total

1

0

- 71 -

*6 Details of loss on sales on non-current assets are presented below.

Previous consolidated fiscal year
(from January 1, 2022
to December 31, 2022)
Machinery, equipment, and vehicles

0

Total

0

(¥ million)
Consolidated fiscal year underreview(from January 1, 2023
to December 31, 2023)-*7 Details of loss on retirement of non-current assets are presented below.

Previous consolidated fiscal year
(from January 1, 2022
to December 31, 2022)(¥ million)
Consolidated fiscal year underreview(from January 1, 2023
to December 31, 2023)
1

Buildings and structures

11

Machinery, equipment, and vehicles

28

20

Tools, furniture and fixtures0

4

Construction in progress-

3

Removal costs

-

93

Total

40

122

*8 Impairment loss
The Group recorded impairment loss on the following asset groups:
Previous consolidated fiscal year (from January 1, 2022 to December 31, 2022)
The Company recorded impairment loss on the following assets during this consolidated fiscal year:
Location
The Pack Corporation(Hidaka, Saitama Prefecture)
The Pack (Changshu) Co., Ltd.
(Changshu, Jiangsu Province, China)

Impairment loss

Use

Type

Assets planned for sale

Machinery and equipment

188

Assets for business use

Machinery, equipment, etc.

134(¥ million)

The Group groups assets into the smallest units for which cash flow is generated individually and revenues andexpenditures can be ascertained continually, based on business categories.
In accordance with a decision on sale, the book value of assets planned for sale has been marked down to theirrecoverable value and the amount of the decrease (¥188 million) recorded under extraordinary losses as impairment loss.
Recoverable values are measured based on net sale price, which is calculated based on the planned price of sale.
Due to their declining recoverability— anticipated revenues are not expected to be secured as a result of continued losses
from business activities—the Company’s consolidated subsidiary The Pack (Changshu) Co., Ltd. has marked down thebook value of assets for business use to their recoverable values and recorded the amount of this decline (¥134 million)
under extraordinary losses as impairment loss.
Recoverable values are measured based on value in use. Since undiscounted future cash flow is negative, no descriptionof the discount rate is provided.
Consolidated fiscal year under review (January 1 – December 31, 2023)
Not applicable- 72 -

Consolidated Statement of Comprehensive Income*1 Adjustment amounts and tax effects related to other comprehensive income

Previous consolidated fiscal year
(from January 1, 2022
to December 31, 2022)(¥ million)
Consolidated fiscal year underreview(from January 1, 2023
to December 31, 2023)

Valuation difference on available-for-sale securities
Amount arising during the period

262

1,459

Adjustment amounts

(0)

(0)

262

1,459

(82)

(432)

179

1,026

(6)

1

Before tax effect adjustments
Tax effects
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Amount arising during the period
Adjustment amounts--

Before tax effect adjustments(6)

1

Tax effects

2(0)Deferred gains or losses on hedges

(4)

1

189

145

Foreign currency translation adjustment
Amount arising during the period
Remeasurements of defined benefit plans
Amount arising during the period

(51)

349

Adjustment amounts

(22)

(12)

Before tax effect adjustments

(73)

337

Tax effects

22

(102)

Remeasurements of defined benefit plans

(51)

234

312

1,407

Total other comprehensive income

Consolidated Statement of Changes in Equity
Previous consolidated fiscal year (from January 1, 2022 to December 31, 2022)
1. Total shares issued and outstanding
Start of the consolidated
Class of share
Increase
Decrease
fiscal year
Common share (shares)

19,900,000-

End of the consolidated
fiscal year-

19,900,000

2. Treasury share
Class of share

Start of the consolidated
fiscal year

Increase

Decrease

Common share (shares)
904,91744(See Note.)
Note: A breakdown of increases and decreases in treasury share is given below.

14,300 Increase due to purchase of shares in less than the trading unit
 Decrease due to exercise of stock options
 Decrease due to transfer-restricted share-based remuneration

44 shares
5,800 shares- 73 -

8,500 shares

End of the consolidated
fiscal year
890,661

3. Share acquisition rights

-

-

4

-

-

-

6

-

-

-

-

10

-

-

-

-

-

13

-

-

-

-

-

11

-

-

-

-

46

Breakdown

Share acquisitionrights as 2015 stock
options---

Share acquisitionrights as 2016 stock
options--

Share acquisitionrights as 2017 stock
options-

Share acquisitionrights as 2018 stock
options
Share acquisitionrights as 2019 stock
options

CompanyThe
Company

End of theconsolidated
fiscal year

Balance at
end of theconsolidated
fiscal year(¥ million)

Number of subject sharesClass ofsubject
sharesStart of theconsolidated
fiscal year

Total

Increase

Decrease

4. Dividends(1)

Dividends paid
Resolution

Regular General
Meeting of
Shareholders held
March 30, 2022
Board of Directors
meeting held August 5,
2022
(2)

Class of share

Total dividends(¥ million)

Dividends per
share (¥)

Common share474

25.00 December 31, 2021

March 31, 2022

Common share

570

30.00

September 2, 2022

Basis dateJune 30, 2022

Effective date

Dividends with basis dates during the consolidated fiscal year but effective dates in the next consolidated fiscal
year
Resolution

Class of share

Source ofdividend
funds

Regular General
Meeting of
Shareholders held
March 28, 2023

Common share

Retainedearnings

Total dividends Dividends per(¥ million)
share (¥)
665

35.00

Basis date

Effective date

December 31,
2022

March 29,2023

Consolidated fiscal year under review (from January 1, 2023 to December 31, 2023)
1. Total shares issued and outstanding
Start of the consolidated
Class of sharefiscal year
Common share (shares)

Increase

19,900,000

End of the consolidated
fiscal year

Decrease--

19,900,000

2. Treasury share
Class of share

Start of the consolidated
fiscal year

Increase

Common share (shares)
890,661503(See Note.)
Note: A breakdown of increases and decreases in treasury share is given below.
 Increase due to purchase of shares in less than the trading unit
 Decrease due to exercise of stock options
 Decrease due to transfer-restricted share-based remuneration- 74 -

Decrease
23,028503 shares
200 shares
22,828 shares

End of the consolidated
fiscal year
868,136

3. Share acquisition rights

-

-

4

-

-

-

6

-

-

-

-

10

-

-

-

-

-

12

-

-

-

-

-

11

-

-

-

-

45

Breakdown

Share acquisitionrights as 2015 stock
options---

Share acquisitionrights as 2016 stock
options--

Share acquisitionrights as 2017 stock
options-

Share acquisitionrights as 2018 stock
options
Share acquisitionrights as 2019 stock
options

CompanyThe
Company

End of theconsolidated
fiscal year

Balance at
end of theconsolidated
fiscal year(¥ million)

Number of subject sharesClass ofsubject
sharesStart of theconsolidated
fiscal year

Total

Increase

Decrease

4. Dividends(1)

Dividends paid
Resolution

Regular General
Meeting of
Shareholders held
March 28, 2023
Board of Directors
meeting held August 7,
2023
(2)

Class of share

Total dividends(¥ million)

Dividends per
share (¥)

Common share665

35.00 December 31, 2022

March 29, 2023

Common share

666

35.00

September 4, 2023

Basis dateJune 30, 2023

Effective date

Dividends with basis dates during the consolidated fiscal year but effective dates in the next consolidated fiscal
year
Resolution

Class of share

Source ofdividend
funds

Regular General
Meeting of
Shareholders held
March 28, 2024

Common share

Retainedearnings

Total dividends Dividends per(¥ million)
share (¥)

1,046

55

Basis date

Effective date

December 31,
2023

March 29,2024

Consolidated Statement of Cash Flows*1 Relationship between ending balance of cash and cash equivalents and amounts of accounts shown on Consolidated
Balance Sheet

Previous consolidated fiscal year
(from January 1, 2022
to December 31, 2022)
Cash and deposits
Time deposits with deposit terms of more than threemonthsSecurities redeemable within three months from thedate of purchaseCash and cash equivalents

16,163- 75 -(¥ million)
Consolidated fiscal year underreview(from January 1, 2023
to December 31, 2023)
16,322

(10)

(10)

2,500

1,500

18,653

17,812

Lease transactions
Finance lease transactions
LesseeFinance lease transactions without transfer of ownership(1) Lease asset details
Property, plant, and equipment
Machinery, equipment, and vehicles used in the Paper Products business(2)

Depreciation method for lease assets
The straight line method is applied, using the lease period as the useful life and zero as the residual value.

Financial instruments
1. Status of financial instruments(1)

Policy on financial instruments
The Group raises necessary funds through bank borrowings in line with capital investment plans. It invests
temporary surplus funds in highly stable financial assets and raises short-term working funds through bankborrowings. Derivatives are used to mitigate the risks described below and are not traded on speculation.

(2)

Details and risks related to financial instruments and risk management structures
Notes and accounts receivable - trade, which represent operating receivables, are exposed to the credit risk ofcustomers. The group manages such risks in accordance with its credit control rules, managing payment due dates
and balances by entity and periodically reviewing the credit status of major transaction partners.
Since our investment of temporary surplus funds in securities is restricted to bonds with high credit ratings,
reflecting our emphases on securing liquidity and stability of principal, it is exposed only to minor credit risk.
Stocks categorized as investment securities are exposed to the risk of fluctuating market prices. However, sincethese consist mainly of shares in companies with which we have business relations, they are checked periodicallyand their current market values are reported to the Board of Directors.
Most notes and accounts payable-trade and electronically recorded obligations-operating, which represent
operating payables, become payable within one year. Some of these are denominated in foreign currency inconnection with import of products, etc., and these are exposed to the risk of exchange-rate fluctuations.
While operating payables and borrowings are exposed to liquidity risk, the Group companies manage this risk
through preparation of monthly cash-flow plans.
As derivative transactions, we use forward foreign exchange contracts to hedge against the risk of exchange-ratefluctuations on operating payables denominated in foreign currency. For those subject to real demand, we employ
forward foreign exchange contracts on foreign-currency operating payables for which planned import-relatedtransactions can be reliably expected to occur, subject to a limit of two years. In addition, to mitigate credit risk
we use derivatives only with highly rated financial institutions. See “Important matters serving as bases for the
preparation of the consolidated financial statements: 4. Accounting policies: (7) Important hedge accounting
methods” regarding matters such as the means and subjects of hedging, hedging policy, and methods of assessing
efficacy of hedging.

(3)

Supplementary information on the fair value of financial instruments
Calculations of the fair value of financial instruments involve variables. As such, values may fluctuate if different
assumptions are used.

2. Fair value of financial instruments
The following table shows the carrying value on the consolidated balance sheet, fair value, and gains or losses related
to financial instruments.
Deposits, notes receivable, accounts receivable–trade, notes payable, accounts payable–trade, and electronicallyrecorded obligations–operating are omitted because their fair values approximate book values since they are settled in
short periods of time.

- 76 -

Previous consolidated fiscal year (December 31, 2022)
Carrying value on the
consolidated balance
sheet(¥ million)(1) Securities and investment securities*1, *2(i) Bonds held to maturity
14,600Gains/losses(¥ million)

Fair value(¥ million)

14,517(83)(ii) Other securities

4,416

4,416

-

Total assets

19,017

18,934

(83)

(5)

(5)

-

Derivative transactions *3*1 Items such as shares of stock with no market prices are not included under (1) Securities and investment
securities. The carrying value on the consolidated balance sheet of such financial instruments is given below.
Category

Previous consolidated fiscal year(¥ million)

Unlisted shares

185*2 Investments in investment limited liability partnerships and similar partnerships are omitted. The carrying valueon the consolidated balance sheet of such investments is ¥43 million.
*3 Net receivables and payables arising from derivative transactions are stated as net amounts. Amounts inparentheses indicate those for which the total amount is a net obligation.
Consolidated fiscal year under review (December 31, 2023)
Carrying value on the
consolidated balance
sheet(¥ million)(1) Securities and investment securities*1, *2(i) Bonds held to maturity
10,100Fair value(¥ million)

Gains/losses(¥ million)

10,083(16)(ii) Other securities

5,900

5,900

-

Total assets

16,00015,984

(16)

(3)

(3)

-

Derivative transactions *3*1 Items such as shares of stock with no market prices are not included under (1) Securities and investment
securities. The carrying value on the consolidated balance sheet of such financial instruments is given below.
Category

Previous consolidated fiscal year(¥ million)

Unlisted shares

185*2 Investments in investment limited liability partnerships and similar partnerships are omitted. The carrying valueon the consolidated balance sheet of such investments is ¥41 million.
*3 Net receivables and payables arising from derivative transactions are stated in net amounts. Amounts inparentheses indicate those for which the total amount is a net obligation.

- 77 -

Note: Planned redemption amounts of monetary payables and maturing securities after the date of consolidated settlement ofaccounts
Previous consolidated fiscal year (December 31, 2022)

Deposits

Within more than Within more thanWithin more than
one but no more five but no more
10 years
than five years
than 10 years(¥ million)(¥ million)(¥ million)
16,131-

Notes receivable

4,530

-

-

-

Accounts receivable – trade

19,355---

Securities and investment securities
Bonds held to maturity (e.g., commercial
paper)
Total

12,500

2,100

-

-

52,519

2,100

-

-

Within one year(¥ million)

Consolidated fiscal year under review (December 31, 2023)

Deposits

Within more than Within more thanWithin more than
one but no more five but no more
10 years
than five years
than 10 years(¥ million)(¥ million)(¥ million)
16,295-

Notes receivable

4,572

-

-

-

Accounts receivable – trade

20,081---

Securities and investment securities
Bonds held to maturity (e.g., commercial
paper)
Total

8,100

2,000

-

-

49,049

2,000

-

-

Within one year(¥ million)

3. Breakdown of fair value of financial instruments by level, etc.
Fair values of financial instruments are divided into the following three levels in accordance with the observability
and importance of inputs related to calculation thereof:
Level 1 fair value: Fair values calculated using current market values of assets or liabilities subject to fair value
calculation on active markets, included among observable fair value calculation inputs
Level 2 fair value: Fair values calculated using inputs for calculations other than Level One inputs, included amongobservable fair value calculation inputs
Level 3 fair value: Fair value calculated using inputs for calculations of unobservable prices
When using multiple inputs that could have major impacts on calculations of fair value, fair value is assigned to thelevel having the lowest priority in calculations of fair value among the levels to which those inputs belong.
(1)

Financial instruments recorded to the Consolidated Balance Sheet at fair value
Previous consolidated fiscal year (December 31, 2022)
Fair value (¥ million)
Category
Level 1

Level 2

Level 3

Total

Securities and investment securities
Available-for-sale securities
StocksTotal assets
Derivative transactions- 78 -

4,416

-

-

4,416

4,416

-

-

4,416

-

(5)

-

(5)

Consolidated fiscal year under review (December 31, 2023)
Fair value (¥ million)
Category
Level 1

Level 2

Level 3

Total

Securities and investment securities
Available-for-sale securities
StocksTotal assets

5,900

-

-

5,900

5,900

-

-

5,900

-

(3)

-

(3)

Derivative transactions(2)

Financial instruments other than those recorded to the Consolidated Balance Sheet at fair value
Previous consolidated fiscal year (December 31, 2022)
Fair value (¥ million)
Category
Level 1

Level 2

Level 3

Total

Securities and investment securities
Bonds held to maturity
Bonds

-

13,021-

13,021

Corporate debentures

-

1,496

-

1,496

Total assets-

14,517-

14,517

Consolidated fiscal year under review (December 31, 2023)
Fair value (¥ million)
Category
Level 1

Level 2

Level 3

Total

Securities and investment securities
Bonds held to maturity
Bonds

-

9,584

-

9,584

Corporate debentures

-

499

-

499

Total assets-

10,083-

10,083

Note: Explanation of evaluation techniques used in calculations of fair value and inputs related to calculations of fairvalue
Securities and investment securities
Since listed shares are valued at their prices on securities exchanges and traded in active markets, their fairvalue is assigned to Level 1. However, since the bonds and corporate debentures held by the Company aretraded infrequently on the markets and no market prices on active markets are recognized for them, their fairvalue is assigned to Level 2.
Derivatives
Since fair values of forward foreign exchange contracts are calculated based on prices provided by thecounterparty financial institutions, their fair value is assigned to Level 2.

- 79 -

Securities
1. Bonds held to maturity
Previous consolidated fiscal year (December 31, 2022)
Carrying value on theCategory
consolidated balance sheet(¥ million)
Those for which fair value exceeds
the carrying value on the
consolidated balance sheet
Those for which fair value does
not exceed the carrying value on
14,600the consolidated balance sheet
Total

Fair value(¥ million)

14,600Consolidated fiscal year under review (December 31, 2023)
Carrying value on theCategory
consolidated balance sheet(¥ million)
Those for which fair value exceeds
the carrying value on the
2,500
consolidated balance sheet
Those for which fair value does
not exceed the carrying value on
7,600
the consolidated balance sheet
Total

Gains/losses(¥ million)--

14,517(83)

14,517(83)

Fair value(¥ million)

10,100

2. Available-for-sale securities
Previous consolidated fiscal year (December 31, 2022)
Carrying value on theCategory
consolidated balance sheet(¥ million)
Those for which the carrying valueon the consolidated balance sheet
exceeds the acquisition cost
Stocks4,035

Gains/losses(¥ million)
2,502

2

7,581

(18)

10,083(16)

Acquisition cost(¥ million)

Gains/losses(¥ million)

1,727

2,308

-

-

-

4,035

1,727

2,308

381

498

(116)

-

-

-

Subtotal

4,416

498

(116)

Total

4,416

2,225

2,191

Other
SubtotalThose for which the carrying valueon the consolidated balance sheet
does not exceed the acquisition cost
Stocks
Other

Note: Acquisition cost in the table above refers to the book value after asset impairment.

- 80 -

Consolidated fiscal year under review (December 31, 2023)
Carrying value on theCategory
consolidated balance sheet(¥ million)
Those for which the carrying valueon the consolidated balance sheet
exceeds the acquisition cost
Stocks5,881

Gains/losses(¥ million)

2,160

3,720

-

-

-

5,881

2,160

3,720

18

23

(4)

-

-

-

Other
SubtotalThose for which the carrying valueon the consolidated balance sheet
does not exceed the acquisition cost
StocksAcquisition cost(¥ million)

Other
Subtotal

18

23

(4)

Total

5,900

2,183

3,716

Note: Acquisition cost in the table above refers to the book value after asset impairment.
3. Available-for-sale securities sold during the consolidated fiscal year
Previous consolidated fiscal year (December 31, 2022)
Category

Sale price (¥ million)

Stocks
Total

Total gains on sale(¥ million)

Total losses on sale(¥ million)

204

66

65

204

66

65

Consolidated fiscal year under review (December 31, 2023)
Category

Sale price (¥ million)

Stocks
Total

Total gains on sale(¥ million)

Total losses on sale(¥ million)

1

0

-

1

0

-

4. Securities subjected to asset impairment
During the consolidated fiscal year under review, three issues of stock included in available-for-sale securities were
subjected to asset impairment in the amount of ¥65 million.
For asset impairment, if the fair value at the end of the period is down by 50% or more from the acquisition cost, theentire amount is subjected to asset impairment. If the fair value at the end of the period is down by roughly 30-50%
from the acquisition cost, asset impairment is undertaken for the amount for which it is deemed necessary based on
consideration of recoverability and other factors.

- 81 -

Derivative transactions
Derivative transactions subject to hedge accounting
Currency-related
Previous consolidated fiscal year (December 31, 2022)(¥ million)
Hedge accounting
methodType of derivativetransactions, etc.

Main subject ofhedging

Contracted
amount, etc.

Contracted
amount, etc.,with term of
more than one
year

Fair value

Forward foreignexchange contracts
Principle
processing

Buy
USD

Accounts
receivable-trade

126

-

(5)

Accounts
receivable-trade

125

-

(4)

251

-

(9)

Forward foreignexchange contracts
Allotment

Buy
USD
Total

Consolidated fiscal year under review (December 31, 2023)(¥ million)
Hedge accounting
methodType of derivativetransactions, etc.

Main subject ofhedging

Contracted
amount, etc.

Contracted
amount, etc., withterm of more than
one year

Fair value

Forward foreignexchange contracts
Principle
processing

Buy
USD

Accounts
receivable-trade

89

-

(3)

Accounts
receivable-trade

84

-

(4)

174

-

(7)

Forward foreignexchange contracts
Allotment

Buy
USD
Total

Retirement benefits
1. Overview of retirement benefits program employed
The Company and its consolidated subsidiaries employ savings-based and non-savings-based defined benefit
programs to fund retirement benefits for employees. Some consolidated subsidiaries employ an SME retirement
benefits mutual aid program and a defined contribution program.
The defined benefit program includes a defined benefit corporate pension plan and programs for lump sum retirement
benefits. (Although these are non-savings-based programs, some are effectively savings-based programs due to theestablishment of retirement benefit trusts.) The Company makes lump-sum and pension payments through a pointsbased program, while consolidated subsidiaries make such payments based on salary and service period.
Retirement benefit trusts have been established for certain lump sum retirement benefit programs.
The Company and certain consolidated subsidiaries are members of corporate pension fund programs for multiple
employers. For such programs for which the amount of pension assets contributed by the Company is difficult to
calculate, the same accounting treatment employed for defined contribution programs is employed.
When an employee retires, increased retirement benefits not subject to retirement benefit obligations may be paid
through numerical calculations meeting the requirements of retirement benefit accounting.
Some consolidated subsidiaries employ the simplified method in calculations of retirement benefit obligations andcosts.

- 82 -

2. Defined benefit program(1)

Adjustments of starting and ending balances of retirement benefit obligations (excluding those under (3))(¥ million)
Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)
5,333

Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)
5,044

296

269

3

13

Difference from numerical calculation

(148)

(180)

Amount of retirement benefits paid

(439)

(450)

5,044

4,696

Starting balance of retirement benefit obligations
Employment expenses
Interest expenses

Ending balance of retirement benefit obligations(2)

Adjustments of starting and ending balances of pension assets (excluding those under (3))(¥ million)
Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)
3,209

Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)
3,086

Returns on investment during period

48

52

Difference from numerical calculation

(199)

169

Employer contribution

290

144

-

1,900

(262)

(269)

3,086

5,082

Starting balance of pension assets

Contribution to employee retirement benefits trust
Amount of retirement benefits paid
Ending balance of pension assets(3)

Adjustments of starting and ending balances of obligations related to retirement benefits under programs subject
to the simplified calculation method(¥ million)
Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)

Starting balance of obligations related to retirement
benefits
Retirement benefit expenses
Amount of retirement benefits paid
Contributions to programs
Ending balance of obligations related to retirement
benefits- 83 -

310

Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)
336

62

66

(17)

(39)

(18)

(19)

336

343

(4)

Adjustments of ending balances of retirement benefit obligations and pension assets and assets and liabilities
related to retirement benefits shown on Consolidated Balance Sheet(¥ million)
Previous consolidated
Consolidated fiscal year
fiscal year
under review(December 31, 2022)(December 31, 2023)
Retirement benefit obligations under savings-based plans
3,286
4,947
Pension assets
Retirement benefit obligations under non-savings-based
plans
Net amount of assets and liabilities shown on
Consolidated Balance Sheet
Retirement benefit liabilities(3,343)(5,333)

(57)

(385)

2,352

343

2,294

(41)

2,294

343

Retirement benefit assets(385)
Net amount of assets and liabilities shown on
2,294
(41)
Consolidated Balance Sheet
Note: Since retirement benefit trusts have been established for the lump sum retirement benefits program, retirement
benefit obligations under savings-based plans include the lump sum retirement benefits program. Similarly,
pension assets include retirement benefit trusts.
(5)

Amounts of retirement benefit expenses and components thereof

Employment expenses

Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)
296(¥ million)
Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)
269

3

13

(48)

(52)

20

38

(43)

(50)

62

66

37

6

328

291

Interest expenses
Expected return on investment
Amount of difference from numerical calculation
recorded as expenses
Amount of past employment expenses recorded as
expenses
Costs of retirement benefits calculated using thesimplified method
Other
Retirement benefit expenses related to defined benefit
programs(6)

Adjustment amounts related to retirement benefits
A breakdown of items recorded as adjustment amounts related to retirement benefits (before deduction of tax
effects) is given below.
(¥ million)
Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)

Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)

Past employment expenses

(43)

(50)

Difference from numerical calculation

(30)

387

Total

(73)

337

- 84 -

(7)Cumulative adjustment amounts related to retirement benefits
A breakdown of items recorded as cumulative adjustment amounts related to retirement benefits (before deductionof tax effects) is given below.
Previous consolidated
fiscal year
(December 31, 2022)(355)(¥ million)
Consolidated fiscal year
under review(December 31, 2023)(304)

Unrecognized difference from numerical calculation

162

(225)

Total

(193)

(530)

Unrecognized past employment expenses(8)

Pension assets(i)

Breakdown of main types of pension assets
Percentages of main types of assets included in total pension assets are presented below.
Previous consolidated
Consolidated fiscal year
fiscal year
under review(December 31, 2022)(December 31, 2023)
Bonds
43%
25%
General account

26%

16%

Stocks

15%

13%

Other

16%

46%

Total

100%

100%

Note: Total pension assets in the consolidated fiscal year under review include 38% retirement benefit trusts for thelump sum retirement benefits program.
(ii) Method used to identify long-term expected rate of return on investment
The current and projected allocation of pension assets and current and expected future long-term rates of returnon the diverse assets included in pension assets are taken into consideration to determine the long-term
expected rate of return on investment for pension assets.
(9)

Bases of numerical calculations
Bases of main numerical calculations (stated as weighted averages)
Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)
Discount rate
0.2%
Long-term expected rate of return on investment

Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)
1.2%

1.5%

1.5%

3. Multiple employer programThis program is accounted for by processing similar to that of the defined contribution program. The amount ofcontributions to the corporate pension fund required under the multiple employer program was ¥152 million in theprevious consolidated fiscal year and ¥160 million in the consolidated fiscal year under review.
(1)

Most recent state of savings under the multiple employer program(¥ million)

Amount of pension assets
Total of numerical obligations under pension financecalculations and minimum amount of liability reserves
Difference- 85 -

Previous consolidated
fiscal year
(December 31, 2022)
5,470

Consolidated fiscal year
under review(December 31, 2023)
5,405

3,891

3,793

1,579

1,612

(2)

The Group’s share of contributions to the multiple employer program
Previous consolidated fiscal year:
43.7% (from April 1, 2021 to March 31, 2022)
Consolidated fiscal year under review: 45.1% (from April 1, 2022 to March 31, 2023)(3)

Supplementary explanation
Previous consolidated fiscal year (as of March 31, 2022)
The difference in amounts under (1) above was due to a ¥1,579 million surplus in the fiscal year.
The percentage under (2) above does not match the actual share of Group costs.
Consolidated fiscal year under review (as of March 31, 2023)
The difference in amounts under (1) above was due to a ¥1,612 million surplus in the fiscal year.
The percentage under (2) above does not match the actual share of Group costs.

4. Defined-contribution program
The contributions required to the defined contribution program for consolidated subsidiaries was ¥9 million in theprevious consolidated fiscal year and ¥9 million in the consolidated fiscal year under review.
Stock options
1. Expenses recorded and accounts related to stock options(¥ million)
Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)

Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)
Share-based compensation expenses
under selling, general, andadministrative expenses--

2. Amounts recorded as gains from expiration due to failure to exercise stock options(¥ million)
Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)

Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)
Gain on reversal of share acquisitionrights0

3. Stock options details, scale, and fluctuations(1) Details of stock optionsFirst share
Second shareacquisition rights
acquisition rights
Company nameDate of resolution

0

Third shareacquisition rights
The Company

Fourth shareacquisition rights

Fifth shareacquisition rights

March 27, 2015
9 Company
Category andDirectors
number of person
7 Company
eligible for allotment
Executive Officers
Class and number of 8,900 shares ofshares awardedcommon share

March 30, 2016
10 Company
Directors
7 Company
Executive Officers
9,900 shares ofcommon share

March 30, 201710 Company
Directors
5 Company
Executive Officers
8,100 shares ofcommon share

March 29, 2018
9 Company
Directors
7 Company
Executive Officers
8,200 shares ofcommon share

March 28, 2019
7 Company
Directors
9 Company
Executive Officers
7,700 shares ofcommon share

Date of allotment
Conditions of
finalization of rights
Eligible period of
employment
Period for exerciseof rights

May 11, 2015

May 10, 2016

May 10, 2017

May 10, 2018

May 9, 2019

None establishedSame as at left

Same as at left

Same as at left

Same as at left

None establishedSame as at left

Same as at left

Same as at left

Same as at left

May 11, 2015 –May 10, 2040

May 10, 2016 –May 9, 2041

May 10, 2017 –May 9, 2042

May 10, 2018 –May 9, 2043

May 9, 2019 –May 8, 2044

- 86 -

(2)(i)

Scale of and fluctuations in stock options
The numbers of stock options in effect in the consolidated fiscal year under review (ended December 2023) are
shown converted to numbers of shares.
Numbers of stock optionsFirst share
Second shareacquisition rights
acquisition rights

Company nameDate of resolution
Rights not yet finalized(shares)
End of previous
consolidated fiscal
year
AwardedMarch 27, 2015

March 30, 2016

Third shareacquisition rights
The Company

Fourth shareacquisition rights

Fifth shareacquisition rights

March 30, 2017

March 29, 2018

March 28, 2019

-

-

-

-

-

-

-

-

-

-

Expired

-

-

-

-

-

Rights finalized

-

-

-

-

-

-

-

-

-

-

2,100

2,900

3,400

3,800

4,000

-

-

-

-

-

Rights exercised

-

-

-

100

100

Expired

-

-

-

100

100

2,100

2,900

3,400

3,600

3,800

(ii) Unit prices
First shareacquisition rights

Second shareacquisition rights

Third shareacquisition rights
The Company

Fourth shareacquisition rights

Fifth shareacquisition rights

May 9, 2016

May 9, 2017

May 9, 2018

May 8, 2019

Balance not yet
finalized
Rights finalized (shares)
End of previous
consolidated fiscal
year
Rights finalized

Balance not yet
exercisedCompany nameDate of resolution
Exercise price (¥)
Average share price attime of exercise (¥)
Official assessed unit
price on date ofallotment (¥)

May 8, 2015
1

1

1

1

1

-

-

-

2,397

2,397

2,250

2,337

2,969

3,496

2,910

4. Estimating the number of stock options for which rights are finalized
Not applicable because rights are finalized at time of allotment.

- 87 -Tax effect accounting
1. Details of deferred tax assets and deferred tax liabilities by major source(¥ million)
Consolidated fiscal year
under review(December 31, 2023)

Previous consolidated
fiscal year
(December 31, 2022)
Deferred tax assets
Allowance for doubtful accounts

40

19

Provision for bonuses

89

99

Accrued enterprise tax

79

88

Retirement benefit liability

713

603

Impairment loss

169

120

Tax loss carryforward (See Note 2.)

321

323

Other

305

349

Deferred tax assets (subtotal)
Valuation reserves related to tax loss carryforward (SeeNote 2.)
Valuation reserves related to totals of temporary
differences in future deductions, etc.
Valuation reserves (subtotal) (See Note 1.)

1,719

1,605

(313)

(318)

(325)

(315)

(639)

(633)

Total deferred tax assets

1,080

971

Deferred tax liabilities
Prepaid pension cost

-

(22)

Reserve for advanced depreciation of non-current assets

(36)

(34)

Valuation difference on available-for-sale securities
Difference on fair-market valuation of consolidated
subsidiaries
Other

(640)

(1,073)

(398)

(398)

(14)

(0)

(1,089)(1,529)

(9)

(557)

Total deferred tax liabilities
Deferred tax assets (liabilities), net

Notes:
1. There has been a major change in an amount deducted from deferred tax assets (valuation reserves). This change
consisted mainly of an increase in valuation reserves related to impairment loss on noncurrent assets and a decrease invaluation reserves related to tax loss carryforward.
2. Amounts of tax loss carryforward and deferred tax assets by deadline for deferral
Previous consolidated fiscal year (December 31, 2022)
Within more Within more Within more Within more
Within more
Within one than one but than two but than three but than four but
than five
Total
year
no more than no more than no more than no more thanyears(¥ million)(¥ million)
two years
three years
four years
five years(¥ million)(¥ million) (¥ million)(¥ million) (¥ million)
Tax losscarryforward *1

6

85

71

-

-

159

321

Valuation reserves

(4)

(82)

(67)

-

-

(159)

(313)

Deferred tax assets

2

2

3

-

-

-

(*2)8

*1 Tax loss carryforward was multiplied by the statutory effective tax rate.
*2 Deferred tax assets of ¥8 million have been recorded on tax loss carryforward of ¥321 million. These deferred tax
assets on tax loss carryforward are considered to be recoverable under expected future income tax.

- 88 -

Consolidated fiscal year under review (December 31, 2023)
Within more Within more Within more Within more
Within more
Within one than one but than two but than three but than four but
than fiveyear
no more than no more than no more than no more thanyears(¥ million)
two years
three years
four years
five years(¥ million)(¥ million) (¥ million) (¥ million) (¥ million)

Total(¥ million)

Tax losscarryforward *1

72

71

-

-

-

179

323

Valuation reserves

(70)

(67)

-

-

-

(179)

(318)

Deferred tax assets

2

3

-

-

-

-

(*2)5

*1 Tax loss carryforward was multiplied by the statutory effective tax rate.
*2 Deferred tax assets of ¥5 million have been recorded on tax loss carryforward of ¥323 million. These deferred tax
assets on tax loss carryforward are considered to be recoverable under expected future income tax.
2. Factors resulting in major differences between statutory effective tax rate and rate of income and other taxes paid after
tax effect accounting, if any
Previous consolidated fiscal year Consolidated fiscal year under review(December 31, 2022)(December 31, 2023)
Notes
are
omittedbecausethe
Statutory effective tax rate
30.4%
difference between the
Adjustments:
statutory effective tax rate andItems not included in losses permanently, the rate of income and other0.3%
such as entertainment expenses
taxes paid after tax effectItems not included in profits
accounting is less than 5% of(0.1%)
permanently, such as dividend income
the statutory effective tax rate.
Residents’ tax per-capita rate, etc.
0.7%
Valuation reserves(0.1%)Tax exemption(2.6%)

Other

0.2%

Rate of income and other taxes paid after
tax effect accounting

28.8%

Revenue recognition
1. Analysis of revenues from contracts with customers
Information on analysis of revenues from contracts with customers is described under “Notes: Segment and otherinformation.”
2. Basic information for grasping revenue from contracts with customers
Basic information for grasping revenue from contracts with customers is described under “Important matters serving asbases for the preparation of the consolidated financial statements: 4. Accounting policies: (5) Accounting standards for
significant revenues and expenses.”
3. Relationship between fulfillment of performance obligations based on contracts with customers and cash flows andamounts and periods of revenues from contracts with customers in effect at the end of the consolidated fiscal year
expected to be recognized in the following consolidated fiscal year or beyond(1)Balance of contractual obligations, etc.
Previous consolidated fiscal year (from Janyuary 1, 2022 to Decemberh 31, 2022)
Previous consolidated fiscal year (¥ million)
Starting balanceEnding balance
210

Contractual obligations

207

Contractual obligations consist mainly of advances received from customers before delivery of products. These aretransferred upon recognition of revenues. They are included under “Other” current liabilities on Consolidated
Balance Sheet.

- 89 -

The revenues recognized in the previous consolidated fiscal year included in the balance of contract labilities as ofthe start of the period was ¥210 million.
Consolidated fiscal year under review (from Janyuary 1, 2023 to Decemberh 31, 2023)
Consolidated fiscal year under review (¥ million)
Starting balanceEnding balance
207

Contractual obligations

237

Contractual obligations consist mainly of advances received from customers before delivery of products. These aretransferred upon recognition of revenues. They are included under “Other” current liabilities on the Consolidated
Balance Sheet.
The revenue recognized in the consolidated fiscal year under review included in the balance of contract liabilities asof the start of the period was ¥207 million.
(2)

Transaction prices allocated to remaining balance of performance obligations
The Group applies the practical method of omitting statements of transaction prices allocated to the remainingbalance of performance obligations because it has no important contracts for which contracted amounts initially are
expected to extend beyond one year. Additionally, the transaction prices include all important amounts arising fromcontracts with customers.

Segment and other information
Segment information
1. Segment overview
The reportable segments of The Pack Group are the smallest units for which separate financial information can beobtained and for which regular examinations are performed by the Board of Directors to determine resource
allocation and evaluate operational results.
The Group is engaged primarily in the manufacture and sale of paper bags, folding paper cartons, corrugated boxes,and plastic bags.
Based on the nature of the products, there are two reportable segments: Paper Products and Film Packaging.
The Group’s major products are paper bags, folding paper cartons, corrugated boxes, and printing in the Paper
Products segment and plastic bags and garment bags in the Film Packaging segment.
2. Determining net sales, profit or loss, assets, liabilities, and other items by reportable segment
Accounting methods used for the reportable segments are generally the same as those described under “Importantmatters serving as bases for the preparation of the consolidated financial statements.”
Profit for reportable segments is stated on an operating profit basis.

- 90 -

3. Net sales and profit or loss and breakdown of profit by reportable segment
Previous consolidated fiscal year (from January 1, 2022 to December 31, 2023)(¥ million)
Amountposted in
Adjustment Consolidated(See Note 2.) Statement of
Income(See Note 3.)

Reportable segment
Paper
Products

Film
Packaging

Other
businesses(See Note 1.)

Subtotal

Total

Net sales
Paper bags

26,252-

26,252-

26,252-

26,252

Folding paper cartons

22,283-22,283-22,283-22,283

Corrugated boxes

12,210-12,210-12,210-12,210Printing

2,186

-

2,186

-

2,186

-

2,186

Film Packaging-

11,988

11,988-

11,988-

11,988

Other

-

-

-

14,13814,138-14,13862,932

11,98874,921

14,13889,060-89,060

-

-

-

-

-

-

-

Sales to externalcustomers
Intersegment sales andtransfers

62,932

11,98874,921

14,13889,060-89,060

-

-

-

-

-

-

-

Subtotal

62,932

11,98874,921

14,13889,060-89,060

Segment profit

5,333

583

5,917

1,059

6,976

(1,004)

5,972

Segment assets

46,706

7,590

54,297

7,632

61,92932,436

94,365

1,573

292

1,866

78

1,944

48

1,992

2,073

122

2,196

1,409

3,605

Revenue from contracts
with customers
Other revenue

Other items
Depreciation expense

Increase in tangible andintangible noncurrent
1,592
480
assets
Notes:
1. “Other” includes supplies and other sundry items.
2. Adjustment amounts are reviewed below.
(1)

The adjustment amount of -¥1,004 million to segment profit includes ¥12 million in elimination of intersegment
transactions and -¥1,016 million in Companywide costs, which are not allocated to individual reporting segments.
Companywide costs consist mainly of costs related to parent company administrative sections.

(2)

The adjustment amount of ¥32,436 million to segment assets consists of Companywide assets, which are not allocated toindividual reporting segments. Companywide assets consist mainly of surplus operating assets of the parent company(¥11,565 million in cash and deposits, ¥12,500 million in securities), long-term investment funds (¥6,270 million in
investment securities), and ¥2,100 million in land and property belonging to the parent company.

(3)

The adjustment amount to depreciation expenses and the increase in property, plant, and equipment and intangible
noncurrent assets concern headquarters assets of the parent company.
3. Segment profit is adjusted against operating profit on the Consolidated Statement of Income.

- 91 -

Consolidated fiscal year under review (from January 1, 2023 to December 31, 2023)(¥ million)
Amountposted in
Adjustment Consolidated(See Note 2.) Statement of
Income(See Note 3.)

Reportable segment
Paper
Products

Film
Packaging

Other
businesses(See Note 1.)

Subtotal

Total

Net sales
Paper bags

29,653-29,653-29,653-29,653

Folding paper cartons

25,000-25,000-25,000-25,000Corrugated boxes

12,419-12,419-12,419-12,419Printing

2,325

-

2,325

-

2,325

-

2,325

Film Packaging-

13,798

13,798-

13,798-

13,798

Other

-

-

-

14,516

14,516-

14,516

69,39913,79883,197

14,516

97,714-

97,714

-

-

-

-

-

-

-

69,39913,79883,197

14,516

97,714-

97,714

-

-

-

-

-

-

-

69,39913,79883,197

14,516

97,714-

97,714

Segment profit

6,858

856

7,715

1,267

8,983

(1,239)7,743

Segment assets

54,7908,847

63,637

8,023

71,661

27,186

98,847

1,537

364

1,901

142

2,044

38

2,082

6,576

927

7,503

733

8,237

(830)

7,406

Revenue from contracts
with customers
Other revenue
Sales to externalcustomers
Intersegment sales andtransfers
Subtotal

Other items
Depreciation expense
Increase in tangible andintangible noncurrent
assets
Notes:

1. “Other” includes supplies and other sundry items.
2. Adjustment amounts are reviewed below.
(1)

(2)

The adjustment amount of -¥1,239 million to segment profit includes ¥12 million in elimination of intersegment
transactions and -¥1,251 million in Companywide costs, which are not allocated to individual reporting segments.
Companywide costs consist mainly of costs related to parent company administrative sections.
The adjustment amount of ¥27,186 million to segment assets consists of Companywide assets, which are not allocated toindividual reporting segments. Companywide assets consist mainly of surplus operating assets of the parent company(¥10,495 million in cash and deposits, ¥8,100 million in securities), long-term investment funds (¥7,564 million in(3)

investment securities), and ¥1,027 million in land and property belonging to the parent company.
The adjustment amount to depreciation expenses and the increase in property, plant, and equipment and intangible

noncurrent assets concern headquarters assets of the parent company.
3. Segment profit is adjusted against operating profit on the Consolidated Statement of Income.

- 92 -

Related information
Previous consolidated fiscal year (from January 1, 2022 to December 31, 2022)
1. Information on individual products and services
This is omitted because the same information is provided under segment information.
2. Information on individual regions(1)

Net sales
This is omitted because sales to external customers in Japan account for more than 90% of net sales on theConsolidated Statement of Income.

(2)

Property, plant, and equipment
This is omitted because amounts of property, plant, and equipment located in Japan account for more than 90%of the amount of property, plant, and equipment on the Consolidated Balance Sheet.

3. Information on individual major customers
This is omitted because no counterparty in sales to external customers accounts for 10% or more of net sales on theConsolidated Statement of Income.
Consolidated fiscal year under review (from January 1, 2023 to December 31, 2023)
1. Information on individual products and services
This is omitted because the same information is provided under segment information.
2. Information on individual regions(1) Net sales
This is omitted because sales to external customers in Japan account for more than 90% of net sales on theConsolidated Statement of Income.
(2)

Property, plant, and equipment
This is omitted because amounts of property, plant, and equipment located in Japan account for more than 90%of the amount of property, plant, and equipment on the Consolidated Balance Sheet.

3. Information on individual major customers
This is omitted because no counterparty in sales to external customers accounts for 10% or more of net sales on theConsolidated Statement of Income.
Impairment loss on non-current assets by reporting segment
Previous consolidated fiscal year (from January 1, 2022 to December 31, 2022)(¥ million)
Reporting segment
Paper Products Film Packaging
Impairment loss

323-

Subtotal

Other

323

Consolidated fiscal year under review (from January 1, 2023 to December 31, 2023)
Not applicable
Amortization of goodwill and unamortized balance by reporting segment
Not applicable
Negative goodwill by reporting segment
Not applicable
Related parties
Not applicable- 93 -

Companywide/
elimination
-

-

Total
323

Per-share information
Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)
Net assets per share

Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)¥3,436.46¥3,736.44

Basic earnings per share¥213.55¥297.07

Diluted earnings per share¥213.38¥296.86

1. Presented below are basic earnings per share, diluted earnings per share, and the basic assumptions underlying the
calculations thereof.
Previous consolidated
Consolidated fiscal year
fiscal year
under review(from January 1, 2022
(from January 1, 2023
to December 31, 2022)
to December 31, 2023)
Basic earnings per share
Profit attributable to owners of parent (¥ million)

4,058

5,652

-

-

4,058

5,652

19,00519,027

Adjustment to profit attributable to owners of parent(¥ million)--

Increase in number of common shares (thousand shares)

15

13

(15)

(13)

Amounts not available to common shareholders(¥ million)
Profit attributable to owners of parent related tocommon shares (¥ million)
Average number of common shares outstanding during
the period (thousand shares)

Diluted earnings per share(Share acquisition rights included above [thousand
shares])Antidilutive securities excluded from diluted earnings per
share calculations-

2. Presented below are the basic assumptions underlying calculations of net assets per share.
Previous consolidated
fiscal year
(from January 1, 2022
to December 31, 2022)
Total net assets (¥ million)

Consolidated fiscal year
under review(from January 1, 2023
to December 31, 2023)

65,371

71,156

Amounts deducted from total net assets (¥ million)

46

45(Share acquisition rights included above [¥ million])

(46)

(45)

Ending net assets related to common shares (¥ million)

65,324

71,111Ending number of common shares used to calculate net
assets per share (thousand shares)

19,00919,031- 94 -

Material subsequent events
Acquisition of treasury share
In its meeting held February 9, 2024, the Company Board of Directors resolved as follows to acquire treasury share
pursuant to the provisions of Article 156 of the Companies Act applicable, mutatis mutandis, under Article 165, Paragraph
3 of that Act.
1. Reason for acquisition of treasury share
The treasury share will be acquired for various purposes, including the enhancement of returns to shareholders andimprovements in capital efficiency, as part of the capital policies of the Medium-Term Management Plan.
2. Details of acquisition(1)(2)

Class of share to be acquired:Company common share
Maximum total number of shares to be acquired: No more than 300,000 shares(1.57% of total shares issued and outstanding [not including
treasury share])

(3)
(4)

Total purchase price of treasury share:
Acquisition period:

Up to ¥1.0 billion
February 13 – December 31, 2024

(5)

Acquisition method:

Market purchase on the Tokyo Stock Exchange- 95 -

(v)Details annexed to consolidated financial statements
Detailed statement of corporate debentures
Not applicable
Detailed statement of loans payable, etc.
Category

Starting balance(¥ million)

Short-term loans payable

-

-

-

-

25

25

-

-

47

43

-

-

34

9

1.1

May 2025

Lease obligations (excluding current
portion)

77

34

-

August 2025 –October 2026

Other interest-bearing debts

-

-

-

-

185

112

-

-

Current portion of long-term loans
payableLease obligations planned for
repayment within one year
Long-term loans payable (excluding
current portion)

Total

Ending balance(¥ million)

Average interest
rate (%)

Repayment deadline

Notes:
1. Average interest rate indicates the weighted average of interest rates on balances of loans payable at the end of theperiod.
No average interest rate is shown for lease obligations because they are recorded on the Consolidated Balance Sheet inamounts before deducting the amount corresponding to the interest included in total lease charges.
2. The table below gives the planned repayment amounts of long-term loans payable and lease obligations (excluding
current portions) within five years after the date of the consolidated settlement of accounts.
Within more than Within more than Within more than Within more than
one but no more two but no more three but no more four but no more
Category
than two years
than three years
than four years
than five years(¥ million)(¥ million)(¥ million)(¥ million)
Long-term loans
9payableLease obligations

30

4

-

-

Detailed statement of asset retirement obligations
This is omitted because the amounts of asset retirement obligations at the start and end of the consolidated fiscal
year under review accounted for less than 1% of total liabilities and net assets at the start and end of theconsolidated fiscal year under review.
(2)

Other information
Quarterly information during the consolidated fiscal year under review, etc.
Cumulative period
Net sales

Q1

Q2

Consolidated
fiscal year underreview

Q3(¥ million)

21,42444,87867,586

97,714

Profit before income taxes (¥ million)

1,489

3,129

4,684

7,941

Profit attributable toowners of parent(¥ million)

1,001

2,133

3,205

5,652

(¥)

52.64

112.16168.46297.07

Basic earnings per share

Fiscal period
Basic earnings per share

Q1
(¥)

Q2
52.64

- 96 -

Q4

Q3
59.52

56.30

128.592.

Financial statements, etc.
(1)

Financial statements(i) Balance Sheet(¥ million)
Fiscal year under review(December 31, 2023)

Previous fiscal year
(December 31, 2022)
AssetsCurrent assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Advances paid
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant, and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Construction in progress
Total property, plant, and equipment
Intangible assets
Leasehold rights
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates
Long-term loans receivable
Claims provable in bankruptcy, claims provable inrehabilitation and otherPrepaid pension cost
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 97 -

11,565

10,495*2 3,797*2 3,871*1 16,873*1 17,616

12,500
5,529
782
898
*1 759*1 737(6)
53,438

8,100
6,462
855
773
*1 728*1 814(4)
49,711

5,200
38
4,313
13
313
7,108
3,054
20,042*3 7,183

30
119
880
1,030

30
86
2,549
2,666

6,313
2,116

7,605
2,116

58

58

*1 1,542*1 1,374

10

8

389
474
(116)
10,78831,861
85,299

74
609
(181)
11,66438,19187,903

69
5,288
6
305
9,393
1,613
23,859(¥ million)
Previous fiscal year
(December 31, 2022)
Liabilities
Current liabilities
Notes payable
Electronically recorded obligations-operating
Accounts payable-trade
Accounts payable-other
Income taxes payable
Consumption taxes payable
Provision for bonuses
Provision for bonuses for directors (and other officers)
Notes payable - facilities
Other
Total current liabilities
Non-current liabilities
Provision for retirement benefits
Long-term accounts payable - other
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for reduction entry of replaced
property
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Total valuation and translation adjustments
Share acquisition rights
Total net assets
Total liabilities and net assets

Fiscal year under review(December 31, 2023)*2 2,040

5,735*1 11,691
1,160
1,123
122
259
37
273
*1 1,130
23,573- 98 -*2 1,692

6,230*1 11,362

1,315
1,169
180
288
45
342
*1 1,186
23,813

2,151
7
140
2,299
25,873

219
3
41
34
299
24,112

2,553

2,553

2,643
510
3,153

2,643
500
3,143

449

449

84

78

47,201
7,162
54,897(2,661)
57,942

47,201
10,50658,235(2,593)
61,340

1,440
(3)
1,436
46
59,42685,299

2,407
(2)
2,405
45
63,79087,903

(ii) Statement of Income(¥ million)
Previous fiscal year
(from January 1, 2022
to December 31, 2022)
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts
Compensation for damage
Foreign exchange gains
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Gain on sales of non-current assets
Government subsidy
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on valuation of investments in capital of subsidiaries
and associates
Impairment loss
Loss on depreciation of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Profit- 99 -

Fiscal year under review(from January 1, 2023
to December 31, 2023)

77,11785,485*1 58,292*1 63,992

18,825

21,492*1,*2 13,890*1,*2 15,028

4,934

6,464

*1 127*1 147*1 118*1 128*1 159

*1 91

405

367

0
63
9
32
20
126
5,214

0
67
0
40
9
118
6,713

66
1
67

0
49
49

0
39
65
65

121
-

*3 96

-

188
456
4,824
1,582
(26)
1,556
3,268

49
171
6,592
1,893
28
1,921
4,670

(iii) Statement of Changes in Equity
Previous fiscal year (from January 1, 2022 to December 31, 2022)(¥ million)
Shareholders’ equity
Capital surplus
Capital stock

Balance at beginning ofcurrent period

2,553

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus

2,643

513

3,157

Changes during period
Dividends of surplus-

Net profit-

Transfers from reserve
for reduction entry of
replaced property
Purchase of treasury
shares
Disposal of treasury
sharesChanges during period
in accounts other thanshareholders’ equity(net)
Total changes during
periodBalance at end of current
period

(3)

(3)

-

-

-

(3)

(3)

2,553

2,643

510

3,153

Shareholders’ equity
Retained earnings
Other retained earnings
Treasury shares

Total
shareholders’equity(2,704)55,680Legal retained
earnings

Reserve for
reduction entryof replaced
property

General reserve

Retainedearnings
brought forward

449

89

47,201

4,933

52,673

Dividends of surplus(1,045)(1,045)(1,045)

Net profit

3,268

3,268

3,268

5

-

-

Balance at beginning ofcurrent period

Total retained
earnings

Changes during period

Transfers from reserve
for reduction entry of
replaced property
Purchase of treasury
shares
Disposal of treasury
sharesChanges during period
in accounts other thanshareholders’ equity(net)
Total changes during
periodBalance at end of current
period

(5)

-

(0)

(0)

-

42

39

-

-

-

(5)

-

2,229

2,223

42

2,262

449

84

47,201

7,162

54,897(2,661)

57,942- 100 -

Valuation and translation adjustments

Balance at beginning ofcurrent period

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments

1,308

0

1,309

Share
acquisitionrights63

Total net assets

57,053

Changes during period
Dividends of surplus-(1,045)

Net profit

-

3,268

-

-

-

(0)

-

39

Transfers from reserve
for reduction entry of
replaced property
Purchase of treasury
shares
Disposal of treasury
sharesChanges during period
in accounts other thanshareholders’ equity(net)
Total changes during
periodBalance at end of current
period

131

(4)

127

(17)

109

131

(4)

127

(17)

2,372

1,440

(3)

1,436

46

59,426- 101 -

Fiscal year under review (from January 1, 2023 to December 31, 2023)(¥ million)
Shareholders’ equity
Capital surplus
Capital stock

Balance at beginning ofcurrent period

2,553

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus

2,643

510

3,153

Changes during period
Dividends of surplus-

Net profit-

Transfers from reserve
for reduction entry of
replaced property
Purchase of treasury
shares
Disposal of treasury
sharesChanges during period
in accounts other thanshareholders’ equity(net)
Total changes during
periodBalance at end of current
period

-

(9)

(9)

-

-

-

(9)

(9)

2,553

2,643

500

3,143

Shareholders’ equity
Retained earnings
Other retained earnings
Treasury shares

Total
shareholders’equity(2,661)

57,942

Legal retained
earnings

Reserve for
reduction entryof replaced
property

General reserve

Retainedearnings
brought forward

449

84

47,201

7,162

54,897

Dividends of surplus(1,331)(1,331)(1,331)

Net profit

4,670

4,670

4,670

5

-

-

Balance at beginning ofcurrent period

Total retained
earnings

Changes during period

Transfers from reserve
for reduction entry of
replaced property
Purchase of treasury
shares
Disposal of treasury
sharesChanges during period
in accounts other thanshareholders’ equity(net)
Total changes during
periodBalance at end of current
period

(5)

-

(0)

(0)

-

68

58

-

-

-

(5)

-

3,344

3,338

68

3,397

449

78

47,201

10,50658,235(2,593)

61,340- 102 -

Valuation and translation adjustments

Balance at beginning ofcurrent period

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments

1,440

(3)

1,436

Share
acquisitionrights46

Total net assets

59,426

Changes during period
Dividends of surplus(1,331)

Net profit

4,670

Transfers from reserve
for reduction entry of
replaced property
Purchase of treasury
shares
Disposal of treasury
sharesChanges during period
in accounts other thanshareholders’ equity(net)
Total changes during
periodBalance at end of current
period

-

(0)
58

967

1

968

(1)

967

967

1

968

(1)

4,364

2,407

(2)

2,405

45

63,790- 103 -

[Notes]
Important accounting policies
1. Valuation standards and methods for assets(1)

Valuation standards and method for securities
Bonds held to maturity
Amortized cost method (straight line method)
Shares of stock in subsidiaries…… Stated at cost by the moving average method
Available-for-sale securitiesThose other than stocks, etc., with no market value…… Mark-to-market (Valuation differences are charged or credited directly to owners’ equity. The cost of
securities sold is computed by the moving average method.)
Stocks, etc., with no market value…… Stated at cost by the moving average method
Investments in investment limited liability partnerships and similar partnerships (those deemed securities
under Article 2, Paragraph 2, of the Financial Instruments and Exchange Act) are valued based on the net
amount equivalent to equity based on the most recent financial statements available in accordance with thereporting date of settlement of accounts stipulated in the partnership agreement.

(2)

Valuation standards and methods for derivatives
Mark-to-market(3)

Valuation standards and methods for inventories
Merchandise and finished goods, work in process, raw materials…… Stated at cost using the periodic average method (Amounts shown on the Balance Sheet reflect marking
down book value based on decreases in profitability.)
Supplies…… Stated at cost using the last purchase price method (Amounts shown on the Balance Sheet reflect marking
down book value based on decreases in profitability.)

2. Depreciation methods for important noncurrent assets(1)

Property, plant, and equipment (excluding leased assets)
The declining-balance method is applied. However, for properties (excluding facilities attached to buildings)
acquired on or after April 1, 1998, and for facilities attached to buildings and structures acquired on or after April
1, 2016, the straight line method is applied.
Indicated below are the main useful lives.
Buildings and structures:
10-50 years
Machinery, equipment, and vehicles:(2)

5-12 years

Intangible noncurrent assets (excluding leased assets)
The straight line method is applied.
For software used by the Company, the straight line method is applied based on the estimated usable period at theCompany (five years).

(3)

Lease assets
Lease assets related to finance lease transactions not involving transfer of ownership
The straight line method is applied using the lease period as the useful life and zero as the residual value.

3. Accounting standards for reserves(1)

Allowance for doubtful accounts
In preparation for losses from default on claims, the anticipated amount of unrecoverable claims is booked basedon the actual rate of unrecoverability for ordinary claims. The likelihood of recovery is determined on a claim byclaim basis for claims deemed unlikely to be recovered.

- 104 -

(2)Provision for bonuses
Set aside for employee bonuses, this is booked based on estimates of bonuses to be paid during the fiscal year.

(3)

Provision for executive bonuses
Set aside for executive and executive officer bonuses, this is booked based on estimates of bonuses to be paid atthe end of the fiscal year.

(4)

Provision for retirement benefits
Set aside for employee retirement benefits, this is booked based on estimates of retirement benefit obligations andpension assets at the end of the fiscal year.

(i)

Method for allocating estimated retirement benefits to fiscal periods
For calculations of retirement benefit obligations, benefit calculation formulas are applied to allocate estimatedretirement benefits to the period extending to the end of the fiscal year.

(ii) Method for processing actuarial differences and past employment costs as expenses
Actuarial differences are expensed from the following fiscal year by the straight line method based on a fixed
number of years (10 years) within the average remaining number of employee service years at the time theactuarial differences are incurred.
Past employment costs are expensed in the fiscal year in which they were incurred by the straight line method
based on a fixed number of years (10 years) within the average remaining number of employee service years at
the time they are incurred.
4. Accounting standards for revenues and expenses
Sale of finished goods and merchandise
The Company primarily manufactures and sells paper products and similar products. In sales of such finished goods
and merchandise, performance obligations are deemed fulfilled when the customer secures control of the finished goods
and merchandise at the point in time at which they are delivered to the customer. As such, revenues are recognized at
the time of delivery of the finished goods and merchandise.
However, for cases involving typical times from shipment to delivery to the customer in domestic sales in Japan,
revenues are recognized at the time of shipment.
In addition, revenues are measured as the price promised under the contract with the customer minus returns, discounts,
rebates, and other such costs. In such cases, the transaction amounts are assumed to be received within one year after
the fulfillment of performance obligations and pose no other material financial concerns.
5

Other important bases for preparing financial statements(1) Hedge accounting methods(i)

Hedge accounting methods
Deferred hedge accounting is applied.
Designated hedge accounting is applied for foreign currency monetary obligations to which forward foreignexchange contracts are attached.

(ii) Hedging means and targets
Means of hedging: forward foreign exchange contracts
Hedging targets: foreign currency monetary obligations and anticipated foreign currency transactions(iii) Hedging policy
Forward foreign exchange contracts are established within the scope of actual demand to reduce the risk of
exchange rate fluctuations.
(iv) Methods for assessing hedging efficacy
Assessments of hedging efficacy on the date of settlement of accounts is omitted for forward foreign exchange
contracts because we deem it more effective to employ the method of allocation in the same foreign currency
and with the same maturity dates; this also ensures correlation under any future exchange rate fluctuation
conditions.

- 105 -

(2)Accounting methods for retirement benefits
Accounting methods for unrecognized actuarial differences and unrecognized past employment costs related toretirement benefits differ from those for the consolidated financial statements.

Balance Sheet*1 Assets and liabilities of affiliate companies
Amounts of monetary claims or obligations on affiliate companies other than those stated separately are presented
below.
(¥ million)
Fiscal year under review(December 31, 2023)

Previous fiscal year
(December 31, 2022)
Short-term monetary claims

966

915

Long-term monetary claims

1,265

1,097

297

248

Short-term monetary obligations*2 In account processing of notes maturing on the ending date of the period, we process settlements of accounts based on
the dates of exchange of the notes in question.
Since the ending date of the fiscal year was a holiday for financial institutions, notes maturing on the ending date of thenext period include ending balances.
(¥ million)
Previous fiscal year
(December 31, 2022)

Fiscal year under review(December 31, 2023)

Notes receivable

158

154

Notes payable

152

89

*3 During the period under review, the Company recorded reduced-value entry of ¥49 million on Buildings through receipt
of state subsidiaries.
Shown below is the cumulative amount of reduced-value entry through receipt of state subsidies on property, plant andequipment.
(¥ million)
Previous fiscal year
(December 31, 2022)
Buildings

Fiscal year under review(December 31, 2023)-- 106 -

49

Statement of Income*1 Amounts included in each account that correspond to affiliate companies are presented below.
(¥ million)
Previous fiscal year
(from January 1, 2022
to December 31, 2022)

Fiscal year under review(from January 1, 2023
to December 31, 2023)

2,228

2,469

377

353

Operating transactions
Transactions other than operatingtransactions*2 The main costs included in selling, general, and administrative expenses, and their amounts, are presented below.
(¥ million)
Previous fiscal year
(from January 1, 2022
to December 31, 2022)

Fiscal year under review(from January 1, 2023
to December 31, 2023)

Freightage and packing expenses

3,843

3,964

Salaries and allowances

3,477

3,796

Provision for bonuses

143

158

Provision for director bonuses

36

44

Retirement benefit expenses

224

210

Depreciation

410

443

Rent expenses

2,749

2,926

6

1

Selling expenses

79.8%

77.7%

General and administrative expenses

20.2%

22.3%

Provision of allowance for doubtful accounts
Rough percentages*3 Loss on valuation of investments in capital of subsidiaries and associates
Previous fiscal year (from January 1, 2022 to December 31, 2022)
Loss on valuation of investments in capital of subsidiaries and associates represented loss on valuation on investments in
The Pack (Changshu) Co., Ltd., a consolidated Company subsidiary.
Securities
Previous fiscal year (December 31, 2022)
The amount recorded on the Balance Sheet of shares of stock, etc., with no market prices is given below.
Category

Previous fiscal year(¥ million)
2,116

Shares of subsidiaries

Fiscal year under review (December 31, 2023)
The amount recorded on the Balance Sheet of shares of stock, etc., with no market prices is given below.
Category

Fiscal year under review(¥ million)
2,116

Shares of subsidiaries- 107 -Tax effect accounting
1. Details of deferred tax assets and deferred tax liabilities by major source(¥ million)
Previous fiscal year
(December 31, 2022)

Fiscal year under review(December 31, 2023)

Allowance for doubtful accounts

37

56

Provision for bonuses

79

88

Accrued enterprise tax

67

78

Provision for retirement benefits

656

646

Impairment loss

100

63

Other

516

566

Deferred tax assets (subtotal)

1,457

1,499

Valuation reserves

(484)

(533)

Total deferred tax assets

973

965

-

(22)

Reserve for advanced depreciation of non-current assets

(36)

(34)

Valuation difference on available-for-sale securities

(547)

(949)

Total deferred tax liabilities(583)(1,007)

Deferred tax assets (liabilities), net

389

(41)

Deferred tax assets

Deferred tax liabilities
Prepaid pension cost

2. Factors leading to major differences between the statutory effective tax rate and rate of income and other taxes paid
after tax-effect accounting, if any(¥ million)
Previous fiscal year
(December 31, 2022)
30.4%

Statutory effective tax rate
Adjustments:
Items not included in losses permanently, such asentertainment expenses
Items not included in profits permanently, such as
dividend income
Residents’ tax per capita rate etc.

0.5%
(0.1%)
1.1%

Valuation reserves

1.1%

Other
Rate of income and other taxes paid after tax-effectaccounting(0.7%)

Fiscal year under review(December 31, 2023)
Notes are omitted because
the difference between thestatutory effective tax rate
and the rate of income andother taxes paid after tax
effect accounting is lessthan 5% of the statutory
effective tax rate.

32.3%

Revenue recognition
Basic information for grasping revenue from contracts with customers is omitted here because it is identical to theinformation presented under “Notes: Revenue recognition” for the Consolidated Financial Statements.
Material subsequent events
Acquisition of treasury share
In its meeting held February 9, 2024, the Company Board of Directors resolved to acquire treasury share pursuant to theprovisions of Article 156 of the Companies Act applicable, mutatis mutandis, under Article 165, Paragraph 3 of that Act.
The specifics are provided under “1. Consolidated financial statements, etc.: Notes (Material subsequent events)” in “V.
Accounts.”- 108 -

(iv) Details annexed to the financial statements
Detailed statement of property, plant, and equipment

Asset typeStarting book
Increase
Decreasevalue
during period during period(¥ million)(¥ million)(¥ million)

Redemption
amountduringperiod(¥ million)

Endingbalance(¥ million)

Accumulated
depreciation(¥ million)

Property, plant, andequipment
Buildings

5,200

2,389

0

404

7,183

11,578Structures

38

38

0

7

69

606

4,313

2,053

44

1,033

5,288

17,593

Vehicles

13

1

0

8

6

80

Tools, furniture andfixtures

313

136

4

139

305

1,857

7,108

2,284

-

-

9,393

-

3,054

3,002

4,444

-

1,613

-

20,042

9,905

4,494

1,594

23,85931,716

Leasehold rights

30

-

-

-

30

-

Software

119

13

-

46

86

161

Other

880

1,674

4

0

2,549

4

1,030

1,687

4

46

2,666

165

Machinery andequipment

Land
Construction inprogress
Total property,
plant and equipment
Intangible assets

Total intangible assets

Notes:
1. Major changes during the period are presented below.
Land

Osaka Plant
Tokyo Plant¥1,909 million¥375 million

Buildings
Machinery and equipment

Rebuilding of the head office building
Printers at Tokyo Plant¥2,267 million¥883 million

Other (software in progress)

Development of backbone system¥1,659 million

Detailed statement of reserves
Starting balance(¥ million)

Increase during
period(¥ million)

Decrease during
period(¥ million)

Ending balance(¥ million)

Allowance for doubtful
accounts

53

69

0

122

Provision for bonuses

237

259

237

259

Provision for executive
bonuses

25

37

25

37

Category(2)

Main details of assets and liabilities
Omitted because consolidated financial statements are prepared.

(3)

Other
Not applicable- 109 -

VI. Overview of stock administration by the Company
Business year

January 1, 2021 through December 31

Regular Meeting of
Shareholders

Held in March

Basis date

December 31

Basis dates for dividends ofsurplusJune 30, December 31

Stock minimum trading unit

100 shares

Repurchase and increased
purchase of shares in amountsof less than the minimum
trading unit
Location of handling(Special account)
Mitsubishi UFJ Trust and Banking Corporation
Osaka Securities Agency Div.
6-3 Fushimicho 3-chome, Chuo-ku, Osaka

Administrator ofshareholder list

(Special account)
Mitsubishi UFJ Trust and Banking Corporation
4-5 Marunouchi 1-chome, Chiyoda-ku, Tokyo

Brokerage-

Fee for repurchase andincreased purchase

None

Method of publicannouncement

The Company’s public announcements are announced electronically. However, they are
published in the Nihon Keizai Shimbun if public announcements issued electronically are notpossible.
URL of public announcements: https://www.thepack.co.jp/

Special benefits forshareholders

Each year, the Company presents Quo Cards worth ¥1,000 each to shareholders as ofDecember 31 and book cards worth ¥500 each to shareholders as of June 30.

Notes:
Restrictions on rights regarding shares in amounts of less than the minimum trading unit are described below.
Company shareholders cannot exercise rights other than the following for shares they own in amounts of less than the minimum
trading unit:(i) The rights enumerated in Article 189, Paragraph 2 of the Companies Act(ii) The right to exercise put options for shares with put options(iii) The right to receive allotment of shares offered and share acquisition rights offered in accordance with numbers of shares heldby shareholders(iv) The right to demand additional purchase for shares in amounts of less than the minimum trading unit

- 110 -

VII. Reference information on the Company
1.

Information on the parent company of the Company
The Company has no parent company.

2.

Other reference information
The Company has submitted the following documents from the first day of the consolidated fiscal year through the datesubmitted for the Annual Securities Report.
(1)

Annual Securities Report, attachments thereto, and confirmation letter
For Business Year 71st term (from January 1, 2022 to December 31, 2022): Submitted to the Director of the Kinki Local
Finance Bureau on March 28, 2023

(2)

Internal Controls Report and its attachments
Submitted to the Director of the Kinki Local Finance Bureau on March 28, 2023

(3)

Quarterly reports and confirmation letters
For the first quarter of 72nd term (from January 1, 2023 to March 31, 2023):

Submitted to the Director of the Kinki Local
Finance Bureau on May 11, 2023

For the second quarter of 72nd term (from April 1, 2023 to June 30, 2023):

Submitted to the Director of the Kinki Local
Finance Bureau on August 10, 2023

For the third quarter of 72nd term (from July 1, 2023 to September 30, 2023): Submitted to the Director of the Kinki Local
Finance Bureau on November 9, 2023
(4)

Extraordinary Report
Extraordinary Report under the provisions of Article 19, Paragraph 2, Subparagraph 9, 2 of the Cabinet Directive on
Disclosure of Corporate Details etc.
Submitted to the Director of the Kinki Local Finance Bureau on March 29, 2023

(5)

Report on status of purchase of treasury shares
Submitted to the Director of the Kinki Local Finance Bureau on March 7, 2024 for the reporting period (February 1 – 29,2024).

- 111 -

Part 2. Information on the Company’s guarantors
Not applicable- 112 -

Reports on Audit by Independent Auditor and Internal Controls Audit
March 28, 2024
To: The Board of Directors,
The Pack Corporation

Ernst & Young ShinNihon LLC
Osaka Office

Designated Limited Partner
Engagement Partner

Yasuhiro Kozaki,
Certified Public Accountant

Designated Limited Partner
Engagement Partner

Ryoichi Hayama,
Certified Public Accountant<Audit of financial statements>
Auditor’s opinion
We have audited the consolidated financial statements of The Pack Corporation for the consolidated fiscal year from January 1, 2023
through December 31, 2023, for the purposes of auditing and verification pursuant to the provisions of Article 193-2, Paragraph 1 of
the Financial Instruments and Exchange Act. In so doing, we audited the Consolidated Balance Sheet, the Consolidated Statement of
Income, the Consolidated Statement of Changes in Shareholders’ Equity, the Consolidated Statement of Comprehensive Income,Consolidated Statement of Cash Flows, Important Matters Serving as Bases for Preparation of the Consolidated Financial Statements,and other notes to the financial statements and attendant details.
In our opinion, the consolidated financial statements referred to above fairly and accurately present all material points on the financial
state as of December 31, 2023, as well as business performance and cash flow in the fiscal year ending on that date of The Pack
Corporation and its consolidated subsidiaries, in compliance with the principles of corporate accounting generally accepted in Japan.
Evidence for the auditor’s opinion
We implemented our audit in accordance with audit principles generally accepted in Japan. Our responsibilities under these audit
principles are described under “Auditor’s responsibilities in auditing consolidated financial statements.” In accordance withprofessional ethical standards in Japan, we are independent of the Company and its consolidated subsidiaries and fulfill all otherethical obligations that apply to auditors. We believe that we have obtained sufficient and appropriate grounds for the basis for thestatement of our opinion on the audit.
Important matters considered in the audit
Important matters considered in the audit are those deemed as particularly important by the auditors, as professionals, in auditing theconsolidated financial statements for this consolidated fiscal year. Important matters considered in the audit correspond to the process
of auditing the consolidated financial statements as a whole and to the formation of the auditor’s opinion. They are not intended toexpress our individual opinion on the matters in question.

- 113 -

The Pack Corporation’s recognition of revenue in the ending month of the fiscal period
Details of important matters to be considered in the audit andreasons underlying our decision
The Pack Corporation (“Company” hereinafter) and its
consolidated subsidiaries primarily manufacture and sell paper
products, film packaging, and other finished goods andmerchandise. While their primary customers belong to the
distribution industry in Japan, they sell to numerous diverse
counterparties from various industries.
For the consolidated fiscal year under review, the Consolidated
Statement of Income shows ¥97,714 million in net sales, while
the Company’s nonconsolidated Statement of Income shows¥85,485 million in net sales. As such, net sales of the Company
account for 87% of Group consolidated net sales.
Viewed by quarter, consolidated net sales in the fourth quarter,at ¥30,127 million, account for 31% of annual consolidated net
sales. Note that net sales tend to increase in the fourth quarter,
particularly during December, due to demand growth driven by
year-end sales and other factors.
Net sales are one indicator emphasized by management andusers of the financial statements. As such, net sales of theCompany, which account for a large share of consolidated net
sales, are especially important. Of these, there is relatively highrisk of the incorrect attribution of net sales in December, whentransaction volumes are high. As such, these sales figures need
to be considered carefully during audits.
We have determined that the Company’s revenue recognition in
the final month of the period qualifies as an important matter tobe considered in the audit.

Handling in the audit
In considering the Company’s revenue recognition in the final
month of the period, we primarily employed the following audit
procedures: We audited the status of the maintenance and operation ofinternal controls based on an understanding of the process of
ensuring the propriety of allocation of net sales by period.
 We considered whether any sales transactions at or above acertain amount or otherwise qualitatively important wererecorded in December 2023 and checked such transactions
against the documented evidence.
 We compared sales transactions in December 2023 andJanuary 2024 to those in the same months of the previous
years on a daily basis.
 We considered whether any discount or return transactions at
or above a certain amount or otherwise qualitatively important
were recorded in January 2024 and checked such transactions
against documented evidence.
 We compared discount and return transactions in January 2024
to those in the same month of the previous year on a daily
basis.
 We looked for important adjustments between sales systems
and accounting systems.

Other descriptions
Other descriptions refer to information included in the securities report other than that on the consolidated and nonconsolidated
financial statements and the audit reports thereon. The responsibility of management is to prepare and disclose such other descriptions.
The Corporate Auditors and the Board of Corporate Auditors are responsible for monitoring the performance of the duties of thedirectors in maintaining and operating the reporting process for other descriptions.
Other descriptions are excluded from the scope of our audit opinions on the consolidated financial statements; we give no opinion onsuch other descriptions.
Our responsibilities in auditing the consolidated financial statements are to read through the other descriptions and, in so doing, to seekout any material discrepancies between the other descriptions and the consolidated financial statements or knowledge gained in theprocess of our audit and any signs of material errors in the other descriptions aside from such material discrepancies.
We are required to report on any material errors identified in the other descriptions through our work.
We found no matters worthy of report concerning the other descriptions.
Responsibilities of management, Corporate Auditors, and Board of Corporate Auditors regarding the consolidated financial statements
Management is responsible for the proper preparation of consolidated financial statements in accordance with the principles ofcorporate accounting generally accepted in Japan. This includes the development and operation of internal controls as deemednecessary by management for the purpose of preparing consolidated financial statements that present information accurately and arefree of material misrepresentations due to malfeasance or error.
In preparing the consolidated financial statements, management is responsible for assessing the propriety of the consolidated financial
statements prepared based on the going concern assumption and disclosing, as necessary, matters related to the going concern
assumption in accordance with the principles of corporate accounting generally accepted in Japan.
The Corporate Auditors and the Board of Corporate Auditors are responsible for monitoring the performance of the duties of thedirectors in maintaining and operating the financial reporting process.

- 114 -

Auditor’s responsibilities in auditing consolidated financial statements
Our responsibilities are to secure, based on our audit, reasonable assurance as to whether the consolidated financial statements as awhole are free of material misrepresentations due to malfeasance or error and to state, in the audit report, an independent opinion on
the consolidated financial statements. Misstatements may arise due to malfeasance or error and are deemed to constitute material
misstatements if it can reasonably be expected to impact decision-making by users of the consolidated financial statements, either
individually or in sum.
Based on the audit process in accordance with audit principles generally accepted in Japan, we implemented the following measures
based on our judgment as specialists and in the spirit of professional and skeptical inquiry:
 Identification and assessment of the risks of material misrepresentation due to malfeasance or error; drafting and implementation ofaudit procedures appropriate given the risks of material misrepresentation; making judgments on selecting and applying audit
procedures; and securing sufficient and appropriate audit evidence to serve as the basis for the statement of our opinion.
 While the purpose of a consolidated financial statements audit is not to offer an opinion on the efficacy of internal controls, inassessing risks, we do consider internal controls related to the audit for the purpose of proposing audit procedures appropriate to thecircumstances.
 We assess the propriety of the accounting policies adopted by management and their methods for application, as well as thereasonableness of accounting estimates made by management and the propriety of related notes.
 We reach a conclusion on whether management’s preparation of consolidated financial statements based on the going concern
assumption is appropriate and whether, based on the audit evidence obtained, any material uncertainties can be identified with regard
to phenomena or circumstances that could lead to material doubts regarding the going concern assumption. If any material
uncertainties are recognized regarding the going concern assumption, attention must be drawn to the notes to the consolidated
financial statements in the audit report. If the notes to the consolidated financial statements concerning material uncertainties areinappropriate, then an opinion must be expressed that mentions such exceptions to the consolidated financial statements. The
auditor’s conclusions are based on the audit evidence obtained through the date of the audit report, and there is a possibility that
future events or conditions could make it impossible for the Company to continue as a going concern.
 We assess whether the presentation and notes in the consolidated financial statements conform to the principles of corporate
accounting generally accepted in Japan; and the presentation, structures, contents of the consolidated financial statements, including
related notes, and the consolidated financial statements accurately present the transactions and accounting facts on which they arebased.
 We obtain sufficient and appropriate audit evidence concerning the financial information of the Company and its consolidated
subsidiaries to serve as the basis for the statement of our opinion on the consolidated financial statements. We are responsible for
instructions, oversight, and implementation related to the audits of the consolidated financial statements. We are responsible forexpression of an independent audit opinion.
We report to the Corporate Auditors and to the Board of Corporate Auditors on the scope and timing of the planned audit; any material
discoveries of the audit, including material deficiencies in internal controls systems identified in the process of auditing; and othermatters required under auditing standards.
We report to the Corporate Auditors and to the Board of Corporate Auditors on measures to maintain independence in accordance withprofessional ethical standards in Japan, on any matters that might reasonably be deemed to affect the independence of auditors, and thenature and specifics of any measures taken to eliminate any such impediments or safeguards taken to mitigate them to tolerable levels.
We identify as important matters to be considered in the audit matters deemed especially important in auditing the consolidated
financial statements for this consolidated fiscal year from among those items we discussed with the Corporate Auditors and the Boardof Corporate Auditors and describe these in the audit report. However, such items are not described in cases such as when theirdisclosure is prohibited under laws, regulations, etc. or the extremely rare cases in which we have determined that they should not bereported because the disadvantages of reporting them in the audit report would be reasonably considered to exceed any public benefit
from their disclosure.
<Audit of internal controls>
Auditor’s opinion
We have audited the Internal Controls Report of The Pack Corporation as of December 31, 2023, for the purposes of auditing andverification pursuant to the provisions of Article 193-2, Paragraph 2 of the Financial Instruments and Exchange Act.
In our opinion, the above Internal Controls Report indicating that the internal controls of The Pack Corporation are valid with regard
to financial reporting as of December 31, 2023, conforms to the standards on assessments of internal controls related to financial
reporting generally accepted in Japan and accurately presents the results of assessment of internal controls related to financial
reporting on all material points.

- 115 -

Evidence for the auditor’s opinion
We implemented our audit of internal controls in accordance with audit principles generally accepted for internal controls related tofinancial reporting in Japan. Our responsibilities under these audit principles of internal controls related to financial reporting aredescribed under “Auditor’s responsibilities in auditing internal controls.” In accordance with professional ethical standards in Japan,
we are independent of the Company and its consolidated subsidiaries and fulfill all other ethical obligations that apply to auditors. We
believe that we have obtained sufficient and appropriate grounds for the basis for the statement of our opinion on the audit.
Responsibilities of management, Corporate Auditors, and Board of Corporate Auditors regarding the Internal Controls ReportManagement is responsible for developing and operating internal controls on financial reporting and for proper preparation anddisclosure of the Internal Controls Report conforming to the standards on assessments of internal controls related to financial reporting
generally accepted in Japan.
The Corporate Auditors and the Board of Corporate Auditors are responsible for monitoring and verifying the status of themaintenance and operation of internal controls related to financial reporting.
Note that it is next to impossible to entirely prevent or detect misrepresentation in financial reports through internal controls on
financial reporting.
Auditor’s responsibilities in auditing internal controls
Our responsibilities are to secure, based on our audit, reasonable assurance as to whether the Internal Controls Report is free ofmaterial misrepresentations and to state, in the internal controls audit report, an independent opinion on the Internal Controls Report.
Based on the audit process in accordance with audit principles generally accepted for internal controls related to financial reporting inJapan, we implemented the following measures based on our judgment as specialists and in the spirit of professional and skepticalinquiry: Audit procedures to obtain grounds for the audit regarding the results of assessment of internal controls related to financial reportingin the Internal Controls Report. The auditor has the option of choosing to apply and implement audit procedures for internal controls
based on an assessment of the importance of their impact on the reliability of financial reporting.
 Consideration of the overall presentation of the Internal Controls Report, including the scope of assessment of internal controls
related to financial reporting, assessment procedures, and management’s description of the results of assessment
 Securing sufficient and appropriate audit evidence regarding the results of assessment of internal controls related to financial
reporting in the Internal Controls Report. We are responsible for instructions, oversight, and implementation related to the audits of
the Internal Controls Report. We are responsible for expression of an independent audit opinion.
We report to the Corporate Auditors and to the Board of Corporate Auditors on the scope and timing of the planned internal controls
audit; any material discoveries of the audit, including material deficiencies in internal controls systems identified in the process ofauditing and results of correction measures for them; and other matters specified by internal controls auditing standards.
<Remuneration information>
Amounts of remuneration based on audit certification work for the Company and its subsidiaries and non-audit work paid to us andmembers of our network are described in “(3) Audits” under “Corporate Governance, etc.,” included in Status of the Company.
Conflicts of interest
There are no conflicts of interest between the Company and consolidated subsidiaries and our firm or the Engagement Partners whose
disclosure is required by the provisions of the Certified Public Accountants Act.

Notes:
1. The original of the above Auditor’s Report is retained by the Company (Company submitting the Securities Report).
2. XBRL data are excluded from the scope of the audit.

- 116 -

Independent Auditor’s Report
March 28, 2024
To: The Board of Directors,
The Pack Corporation

Ernst & Young ShinNihon LLC
Osaka Office

Designated Limited Partner
Engagement Partner

Yasuhiro Kozaki,
Certified Public Accountant

Designated Limited Partner
Engagement Partner

Ryoichi Hayama,
Certified Public Accountant

Auditor’s opinion
We have audited the financial statements of The Pack Corporation for the 72nd fiscal year from January 1, 2023 through December
31, 2023, for the purposes of auditing and verification pursuant to the provisions of Article 193-2, Paragraph 1 of the Financial
Instruments and Exchange Act. In so doing, we audited the Balance Sheet, the Statement of Income, the Statement of Changes inShareholders’ Equity, the Important Accounting Policies, and other notes to the financial statements and attendant details.
In our opinion, the financial statements referred to above fairly and accurately present all material points on the financial state as ofDecember 31, 2023, and the business performance in the fiscal year ending on that date of The Pack Corporation, in compliance withthe principles of corporate accounting generally accepted in Japan.
Evidence for the auditor’s opinion
We implemented our audit in accordance with audit principles generally accepted in Japan. Our responsibilities under these audit
principles are described under “Auditor’s responsibilities in auditing financial statements.” In accordance with professional ethicalstandards in Japan, we are independent of the Company and fulfill all other ethical obligations that apply to auditors. We believe that
we have obtained sufficient and appropriate grounds for the basis for the statement of our opinion on the audit.
Important matters considered in the audit
Important matters considered in the audit are ones deemed of particular importance by the auditors, as professionals, in auditing thefinancial statements for this fiscal year. Important matters considered in the audit correspond to the process of auditing the financial
statements as a whole and to the formation of the auditor’s opinion. They are not intended to express our individual opinion on thematters in question.
Revenue recognition in the final month of the fiscal period
This is omitted here because it remains unchanged from the description of important matters considered in the audit (The Pack
Corporation’s recognition of revenue in the ending month of the fiscal period) in the audit report on the consolidated financial
statements.
Other descriptions
Other descriptions refer to information included in the securities report other than that on the consolidated and nonconsolidated
financial statements and the audit reports thereon. The responsibility of management is to prepare and disclose such other descriptions.
The Corporate Auditors and the Board of Corporate Auditors are responsible for monitoring the performance of the duties of thedirectors in maintaining and operating the reporting process for other descriptions.
Other descriptions are excluded from the scope of our audit opinions on the financial statements; we give no opinion on the otherdescriptions.

- 117 -

Our responsibilities in auditing the financial statements are to read through the other descriptions and, in so doing, to look for any
material discrepancies between the other descriptions and the financial statements or information learned in the process of our audit
and any signs of material errors in the other descriptions aside from such material discrepancies.
We are required to report on any material errors identified in the other descriptions through our work.
We found no matters worthy of report concerning the other descriptions.
Responsibilities of management, Corporate Auditors, and Board of Corporate Auditors regarding the financial statements
Management is responsible for the proper preparation and disclosure of financial statements in accordance with the principles ofcorporate accounting generally accepted in Japan. This includes the development and operation of internal controls as deemednecessary by management for the purpose of preparing financial statements that present information accurately and are free of material
misrepresentations due to malfeasance or error.
In preparing the financial statements, management is responsible for assessing the propriety of preparing financial statements based on
the going concern assumption and disclosing, as necessary, matters related to the going concern assumption in accordance with theprinciples of corporate accounting generally accepted in Japan.
The Corporate Auditors and the Board of Corporate Auditors are responsible for monitoring the performance of the duties of thedirectors in maintaining and operating the financial reporting process.
Auditor’s responsibilities in auditing financial statements
Our responsibilities are to secure, based on our audit, reasonable assurance as to whether the financial statements as a whole are free ofmaterial misrepresentations due to malfeasance or error and to state, in the audit report, an independent opinion on the financial
statements. Misstatements may arise due to malfeasance or error and are deemed to constitute material misstatements if they canreasonably be expected to impact decision-making by users of the financial statements, either individually or in sum.
By following the audit process in accordance with audit principles generally accepted in Japan, we implemented the following
measures based on our judgment as specialists and in the spirit of professional and skeptical inquiry:
 Identification and assessment of the risks of material misrepresentation due to malfeasance or error; drafting and implementation ofaudit procedures appropriate given the risks of material misrepresentation; making judgments on selecting and applying audit
procedures; and securing sufficient and appropriate audit evidence to serve as the basis for the statement of our opinion.
 While the purpose of a financial statements audit is not to offer an opinion on the efficacy of internal controls, in assessing risks, we
do consider internal controls related to the audit for the purpose of proposing audit procedures appropriate to the circumstances.
 We assess the propriety of the accounting policies adopted by management and their methods for application, as well as thereasonableness of accounting estimates made by management and the propriety of related notes.
 We reach a conclusion on whether management’s preparation of financial statements based on the going concern assumption isappropriate and whether, based on the audit evidence obtained, any material uncertainties can be identified with regard tophenomena or circumstances that could lead to material doubts regarding the going concern assumption. If any material uncertainties
are recognized regarding the going concern assumption, attention must be drawn to the notes to the financial statements in the audit
report. If the notes to the financial statements concerning material uncertainties are inappropriate, then an opinion must be expressedthat mentions such exceptions to the financial statements. The auditor’s conclusions are based on the audit evidence obtained
through the date of the audit report, and there is a possibility that future events or conditions could make it impossible for theCompany to continue as a going concern.
 We assess whether the presentation and notes in the financial statements conform to the principles of corporate accounting generally
accepted in Japan; and the presentation, structures, contents of the financial statements, including related notes, and the financial
statements accurately present the transactions and accounting facts on which they are based.
We report to the Corporate Auditors and to the Board of Corporate Auditors on the scope and timing of the planned audit; any material
discoveries of the audit, including material deficiencies in internal controls systems identified in the process of auditing; and othermatters required under auditing standards.
We report to the Corporate Auditors and to the Board of Corporate Auditors on measures to maintain independence in accordance withprofessional ethical standards in Japan, on any matters that might reasonably be deemed to affect the independence of auditors, and thenature and specifics of any measures taken to eliminate any such impediments or safeguards taken to mitigate them to tolerable levels.
We identify as important matters to be considered in the audit matters deemed especially important in auditing the financial statements
for this fiscal year from among those items we discussed with the Corporate Auditors and the Board of Corporate Auditors anddescribe these in the audit report. However, such items are not described in cases such as when their disclosure is prohibited underlaws, regulations, etc. or the extremely rare cases in which we have determined that they should not be reported because thedisadvantages of reporting them in the audit report would be reasonably considered to exceed any public benefit from their disclosure.

- 118 -

<Remuneration information>
Remuneration information is covered in the audit report on the consolidated financial statements.
Conflicts of interest
There are no conflicts of interest between the Company and our firm or the Engagement Partners whose disclosure is required by theprovisions of the Certified Public Accountants Act.

Notes:
1. The original of the above Auditor’s Report is retained by the Company (Company submitting the Annual Securities Report).
2. XBRL data are excluded from the scope of the audit.

- 119 -

Cover sheet
Document submitted:

Internal Controls Report

Applicable provisions:

Article 24-4, Paragraph 1 of the Financial Instruments and Exchange Act

Submitted to:

Director, Kinki Local Finance Bureau

Date submitted:

March 28, 2024

Company name:

ザ・パック株式会社

Company name in English

The Pack Corporation

Name and title of representative:

Hideaki Yamashita, President & CEO

Name and title of Chief Financial

Not applicable

Officer:
Location of head office:9-3 Higashiobase 2-chome, Higashinari-ku, Osaka, Japan

Location where available for public

The Pack Corporation

inspection:

9-3 Higashiobase 2-chome, Higashinari-ku, Osaka, JapanTokyo Stock Exchange Co., Ltd.
2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo- 120 -

1. Matters related to the basic framework of internal controls related to financial reporting
President & CEO Hideaki Yamashita is responsible for maintaining and operating the Company’s internal controls related tofinancial reporting. The Company maintains and operates internal controls related to financial reporting in conformity with thebasic framework for internal controls described in “Establishment of Standards for Evaluation and Auditing of Internal Controls
related to Financial Reporting and Implementation Standards for Evaluation and Auditing of Internal Controls related to
Financial Reporting (Opinion),” published by the Business Accounting Council.
Internal controls represent an attempt to achieve their objectives to a reasonable extent through functioning as an integrated
system in which the basic elements thereof are linked organically to one another. As such, there is a risk that internal controls
related to financial reporting are not fully able to prevent or detect misstatements in financial reporting.

2. Matters related to the scope of evaluation, basis date, and evaluation procedures
Evaluation of internal controls related to financial reporting is conducted using the last day of the fiscal year under review(December 31, 2023) as the basis date. The evaluation conforms with generally accepted standards for evaluation of internal
controls related to financial reporting.
After assessing internal controls having a material impact on financial reporting as a whole on a consolidated basis(Companywide internal controls), business processes subject to evaluation are selected based on the results of such assessment.
In evaluation of these business processes, after first analyzing the selected business processes the efficacy of internal controls is
evaluated by identifying important control points that have material impacts on the reliability of financial reporting andassessing the status of the maintenance and operation regarding these important control points.
The scope of evaluation of internal controls related to financial reporting is determined as the scope necessary from theperspective of importance of impact on reliability of financial reporting, for the Company and consolidated subsidiaries. The
importance of the impact on the reliability of financial reporting is determined with consideration for the importance ofmonetary and qualitative impacts, and the scope of evaluation of internal controls related to business processes is determinedbased on the results of assessment of companywide internal controls for the Company and four consolidated subsidiaries. Fourconsolidated subsidiaries are not included in the scope of evaluation of internal controls on a companywide basis because they
have been judged to be of minor importance from monetary and qualitative perspectives.
The scope of evaluation of internal controls related to business processes is determined through totalization starting with thefacilities with the highest amounts of planned net sales for the consolidated fiscal year under review (after eliminatingtransactions among consolidated companies), selecting as important business facilities those accounting for roughly two-thirdsof planned consolidated net sales for the consolidated fiscal year under review. Business facilities selected as important are
subjected to evaluation of business processes employed in deriving net sales, accounts receivable-trade, and inventories, as
accounts strongly related to corporate business objectives. Furthermore, business processes related to important accounts
involving estimates and forecasts, in which there is a high risk of material misstatement, and business processes related tobusinesses or operations engaging in high-risk transactions, have been added to the scope of evaluation as business processes
especially important in consideration of their impact on financial reporting, including those at business sites other than those
selected as important business sites.

3. Matters related to results of evaluation
As a result of the above evaluation, we have judged internal controls related to the Company’s financial reporting to be valid asof the ending date of the fiscal year under review.

4. Addendum
Not applicable

5. Special notes
Not applicable- 121 -

Cover sheet
Document submitted:

Confirmation letter

Applicable provisions:

Article 24-4-2, Paragraph 1 of the Financial Instruments and Exchange Act

Submitted to:

Director, Kinki Local Finance Bureau

Date submitted:

March 28, 2024

Company name:

ザ・パック株式会社

Company name in English:

The Pack Corporation

Name and title of representative:

Hideaki Yamashita, President & CEO

Name and title of Chief Financial

Not applicable

Officer:
Location of head office:9-3 Higashiobase 2-chome, Higashinari-ku, Osaka, Japan

Location where available for public

The Pack Corporation

inspection:

9-3 Higashiobase 2-chome, Higashinari-ku, Osaka, JapanTokyo Stock Exchange Co., Ltd.
2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo, Japan- 122 -

1. Matters concerning the accuracy of descriptions in the Annual Securities Report
Hideaki Yamashita, the Company’s President & CEO, has confirmed that the descriptions in the Company’s Annual Securities
Report for the 72nd term (January 1, 2023 – December 31, 2023) are presented accurately and in accordance with laws andregulations concerning the handling of financial instruments.

2. Special notes
No notable matters were identified in the confirmation process.

- 123 -