Niterra : Announcement Regarding Change in Shareholder Return Policy

Niterra Co., Ltd.	April 30, 2024
URL	https://www.ngkntk.co.jp/english
Stock listing	Tokyo Prime, Nagoya Premier
Code number	5334
Head office	1-1-1 Higashisakura, Higashi-ku, Nagoya, Aichi, 461-0005, Japan
Representative	Takeshi Kawai, President and COO

Announcement Regarding Change in Shareholder

Return Policy

Niterra Co., Ltd. (the "Company"), hereby announces that it has decided to change the shareholder return policy as follows.

1. Reason for the change

According to the early achievement of profit target of the medium-term management plan from the fiscal year ending March 31, 2022 to the fiscal year ending March 31, 2025, in order to achieve stable shareholder returns, add to the dividend payout ratio, the Company has additionally decided to use the "dividend on equity (DOE)," which is unlikely to be affected by business performance in a single fiscal year, as an indicator for shareholder returns.

2. Details of the change

Before change

In order to clarify our stance of prioritizing the return of profits to shareholders, the Company has a fully performance-linked dividend policy, with a basic policy of maintaining a full-year consolidated dividend payout ratio of 40%. In addition, the amounts of dividends are linked to profit for the year attributable to owners of the parent, excluding one-time profit and loss arising separately from our normal business activities.

Furthermore, the Company considers any excess equity that exceeds an appropriate level as eligible for returning to shareholders, including the acquisition of treasury stock, after comprehensively taking into consideration factors such as the transformation of the business portfolio, which is an issue for the Company, the necessary research and development for future growth, capital investment for business expansion and rationalization, and the level of achievement of medium- to long-term management targets for internal reserves to allocate to investment. An appropriate level of equity, as defined in the current medium-term management plan, is a level that enables us to maintain our current credit rating to ensure stable funding, based on the assumption that funds will be raised as interest-bearing liabilities.

In order to return profits more flexibly, the Board of Directors makes resolutions concerning the payment of dividends of surplus, etc., as set forth in the Articles of Incorporation.

After

change

The Company considers the return of profits to shareholders one of its most important management policies.

For the dividend policy, the Company aims for stable dividend policy, therefore, combine the stable dividend policy which is aiming at lower limit dividend on equity (DOE) of around 4%, and performance-linked dividend policy which is aiming at payout ratio of around 10%.

Furthermore, the Company considers any excess equity that exceeds an appropriate level as eligible for returning to shareholders, including the acquisition of treasury stock, after taking into consideration factors such as the transformation of the business portfolio, which is an issue for the Company, investment for human capital, the necessary research and development for future growth, capital investment for business expansion and rationalization, and capital allocation for investment.

In addition, in order to improve sustainable corporate value, the Company will continuously revise the shareholder return policy and appropriate level of equity based on the medium-term and long-term management plan with considering the maintaining of credit rating for the effective use of interest-bearing liabilities.

In order to return profits more flexibly, the Board of Directors makes resolutions concerning the payment of dividends of surplus, etc., as set forth in the Articles of Incorporation.

3. Timing of the change

The change will be applied from fiscal 2024 (the fiscal year ending March 2025).