Shimano : Information Omitted from the Paper Copy of the Notice of Convocation of the 117th Ordinary General Meeting of Shareholders 2024

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

Information Omitted from the Paper Copy

of the Notice of Convocation of

the 117th Ordinary General Meeting of Shareholders

The 117th Fiscal Year (from January 1, 2023 to December 31, 2023) Business Report

Systems to Ensure the Appropriateness of Operations (Internal Control Systems) and the Status of Implementation of Such Systems

Consolidated Financial Statements

Consolidated Statement of Shareholders' Equity

Notes relating to Consolidated Financial Statements

Non-consolidated Financial Statements

Non-consolidated Statement of Shareholders' Equity

Notes relating to Non-consolidated Financial Statements

SHIMANO INC.

The Company provides these documents on its website on the Internet (https://www.shimano.com/en/ir/shareholdermeeting.html) and Tokyo Stock Exchange website (Tokyo Stock Exchange Listed Company Search) (https://www2.jpx.co.jp/tseHpFront/JJK020030Action.do) pursuant to provisions of laws and regulations as well as Article 16 of its Articles of Incorporation.

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Business Report

Systems to Ensure the Appropriateness of Operations (Internal Control Systems) and the Status of Implementation of Such Systems

(1) Systems to Ensure the Appropriateness of Operations

In accordance with the provisions of the Companies Act, the Board of Directors has decided on the implementation of systems to ensure that the execution of duties by Directors is in compliance with laws, regulations and the Articles of Incorporation and systems to ensure the appropriateness of other operations. The Company will continue to ensure the appropriateness of management and operations and endeavor to improve the internal control systems described below, while making such alterations as may be required by changes in the business environment.

Basic Policies on Establishment of Internal Control Systems

1. System to ensure that the execution of duties by the Company's Directors is in compliance with laws and regulations and the Articles of Incorporation
   The Company shall establish Compliance Regulations and various other rules and regulations and take the initiative to ensure compliance throughout the Company and its subsidiaries (hereinafter referred to as the "Shimano Group").
2. Systems governing the storage and management of information relating to the execution of duties by the Company's Directors
   Any information relating to the execution of duties by Directors that requires storage shall be recorded and stored by the responsible operating department(s) of the Company in accordance with the Information Control Regulations.
3. Regulations and other systems governing management of the risk of losses

1. The departments in charge of each business operational function shall identify operational risks relevant to

them, assess the risks, and take countermeasures against them.

1. Certain matters including operational risks shall be deliberated, and decisions shall be made through the approval request system or by the Board of Directors.
2. Rules on how to handle emergencies shall be created, and organizational measures, such as the establishment of emergency response headquarters as necessary, shall be taken.
3. A department to oversee governance shall be established to manage risks globally.
4. The internal audit organization shall perform internal audits of the status of operations in each part of the organization in accordance with the Internal Audit Regulations to assess the status. Any points that require improvement in terms of risk management shall be advised immediately, and subsequent checks shall be made to follow up on any required changes.

1. Systems to ensure the efficient execution of duties by the Company's Directors

1. Regular meetings of the Board of Directors shall be convened once a month, in principle. The Board of Directors shall deliberate and decide matters contained in each meeting's agenda, which is created and managed according to the Board of Directors Regulations.
2. The Board of Directors shall decide important matters relating to business policies, laws and regulations and all other important business-related matters, and oversee the overall operation of the business.
3. Directors shall endeavor to manage those parts of the organization entrusted to them in accordance with the Regulations for Division of Duties and the Regulations for Clarification of Authority swiftly and efficiently so as to improve the performance of these operations.

1. Systems to ensure that the execution of duties by the Company's employees is in compliance with laws and regulations and the Articles of Incorporation

1. Various internal regulations, including the Compliance Regulations, shall be established to ensure that the execution of duties by employees is in full compliance with laws and regulations and the Articles of Incorporation.
2. The internal audit organization shall perform internal audits of the status of compliance, in accordance with the Internal Audit Regulations and other regulations mentioned above. The results shall be reported in a timely fashion to the Board of Directors and the Audit & Supervisory Board.
3. The Company shall conduct education and training to ensure that employees have an adequate understanding of the Compliance Regulations.

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6. Systems for reporting of matters concerning execution of duties by subsidiaries' directors etc. to the Company

1. When a subsidiary makes an important management decision, it shall implement necessary measures such

as requesting the Company's prior approval in accordance with internal regulations.

1. Subsidiaries shall periodically report their financial conditions to the Company.

7. Regulations and other systems governing subsidiaries' management of the risk of losses

The Company's Directors in charge shall comprehensively provide advice and guidance concerning subsidiaries' business operations and risk management systems.

8. Systems to ensure efficient execution of duties by subsidiaries' directors

Information technology shall be utilized appropriately and effectively, such as the introduction of a shared system for consolidated accounting, throughout the Shimano Group for communication of information between the Company and subsidiaries and for business processes to the extent applicable.

1. Systems to ensure that the execution of duties by subsidiaries' directors and employees is in compliance with laws and regulations and the Articles of Incorporation
   Each subsidiary shall establish compliance systems through the establishment of regulations similar to the Company's Compliance Regulations or other internal rules and regulations, according to each subsidiary's individual situation.
2. Other systems to ensure the appropriateness of operations across the Shimano Group consisting of the Company and its subsidiaries
   With the aim of instituting effective internal controls across the whole Shimano Group, the Company shall appoint managers with requisite responsibilities, assess situations of legal/regulatory compliance and risk management, and swiftly implement necessary countermeasures.
3. Matters concerning employees who provide assistance to Audit & Supervisory Board Members, in the case that the Company's Audit & Supervisory Board Members request that the Company assign employees as assistants to support their duties
   If deemed necessary by Audit & Supervisory Board Members, appropriate personnel shall be exclusively assigned to provide assistance to Audit & Supervisory Board Members.
4. Matters concerning the independence of employees mentioned in (11) above from the Company's Directors
   Employees mentioned in (11) above shall be outside the Directors' chain of command and follow instructions of the Audit & Supervisory Board Members.
5. Matters concerning the ensuring of effectiveness of instructions of the Company's Audit & Supervisory Board Members to employees mentioned in (11) above
   Employees mentioned in (11) above, in accordance with the instructions issued by the Audit & Supervisory Board Members, shall have authority to perform investigations.
6. Systems for reporting by the Company's Directors and employees to the Company's Audit & Supervisory Board Members
   Directors and employees shall swiftly report the status of performance of internal audits, as well as statutory matters, to the Company's Audit & Supervisory Board Members.
7. Systems for reporting by subsidiaries' directors, audit & supervisory board members and employees, or persons who received reports from such persons, to the Company's Audit & Supervisory Board Members
   Subsidiaries' directors, audit & supervisory board members and employees shall swiftly report the matters which the Company's Audit & Supervisory Board Members request, as well as statutory matters. Persons who received reports from subsidiaries' directors, audit & supervisory board members and employees shall do the same.
8. Other systems for reporting to the Company's Audit & Supervisory Board Members
9. 1. Upon request of any Audit & Supervisory Board Member, reporting and information gathering shall be swiftly conducted, in accordance with the stipulations of the Audit & Supervisory Board.
   2. The internal audit organization shall closely collaborate with the Audit & Supervisory Board, including by means of discussion and exchange of opinions.

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1. Systems to ensure that reporting persons mentioned in (14)-(16) above do not receive discriminatory treatment as a result of such reports

1. Regarding persons who reported to Audit & Supervisory Board Members, the fact of such reporting and the content of the reporting shall be kept confidential, and it is prohibited to discriminate against persons who have reported to Audit & Supervisory Board Members for that reason alone.
2. Regarding persons who reported to the designated internal or external point of contact for compliance matters for swift recognition of violations of laws and regulations and/or unethical behaviors, the fact of such reporting and the content of the reporting shall be kept confidential, and it is prohibited to discriminate against persons who reported to the point of contact for that reason alone.

1. Matters concerning procedures for advance payment or reimbursement of expenses incurred in the course of execution of duties by the Company's Audit & Supervisory Board Members and policies related to processing of expenses or liabilities arising from execution of duties

Audit & Supervisory Board Members may consult lawyers, certified public accountants, and/or other external experts, as necessary, and expenses incurred shall be borne by the Company.

1. Other systems to ensure effective performance of audits by the Company's Audit & Supervisory Board Members

1. Opportunities shall be made available for Audit & Supervisory Board Members to attend meetings of the Board of Directors and other important meetings so that Audit & Supervisory Board Members can identify important internal issues and state their views, as necessary.
2. Forums shall be established, as necessary, to facilitate exchanges of views between the Audit & Supervisory Board and Representative Directors.

1. Status of Implementation of the Systems to Ensure the Appropriateness of Operations

1. Internal workshops and seminars on basic compliance matters, for which external instructors are invited, are held in house for officers and employees of the Company and its subsidiaries, in order to instill the consciousness of compliance.
2. An assessment of the effectiveness of internal controls over financial reporting, based on the Financial Instruments and Exchange Act, concluded that no material violations were detected in the fiscal year ended December 31, 2023, and internal control systems are appropriately implemented.
3. Reports on the Company's and subsidiaries' businesses are periodically made, not only at meetings of the Company's Board of Directors, but also at important internal meetings. If issues requiring improvement or problems arise, instructions are issued to the departments concerned, as necessary.

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Consolidated Statement of Shareholders' Equity

(From January 1, 2023 to December 31, 2023)

								(Millions of yen)
		Shareholders' equity
	Common			Retained			Treasury		Total
	Capital surplus					shareholders'
	stock		earnings			stock
						equity
Balance at beginning of year	35,613	5,640		638,141			(12,909)		666,485
Changes of items during the year
Cash dividends paid				(25,797)					(25,797)
Net income attributable to owners of parent				61,142					61,142
Acquisition of treasury stock							(14,724)		(14,724)
Disposal of treasury stock		0		(1)			56		55
Cancelation of treasury stock		(0)		(26,312)			26,313		－
Net changes of items other than shareholders' equity
Total changes of items during the year	－	－		9,031			11,645		20,677
Balance at end of year	35,613	5,640		647,172			(1,264)		687,162
	Accumulated other
	comprehensive income	Non-
				Total			Total net assets
	Unrealized gain	Foreign currency	accumulated	controlling
	(loss) on other	translation	other	interests
	securities	adjustments	comprehensive
				income
Balance at beginning of year	3,537	70,085		73,623			986	741,095
Changes of items during the year
Cash dividends paid								(25,797)
Net income attributable to owners of parent								61,142
Acquisition of treasury stock								(14,724)
Disposal of treasury stock								55
Cancelation of treasury stock									－
Net changes of items other than shareholders' equity	1,364	39,015		40,380			243	40,624
Total changes of items during the year	1,364	39,015		40,380			243	61,301
Balance at end of year	4,902	109,101		114,003			1,230	802,396

Note: Amounts are rounded down to the nearest million yen.

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Notes relating to Consolidated Financial Statements

1. Notes relating to basis of presenting consolidated financial statements

1. Consolidation

1. The consolidated financial statements include the accounts of the Company and the following 48 subsidiaries. Shimano (Singapore) Pte. Ltd.
   Shimano Components (Malaysia) Sdn. Bhd. Shimano (Kunshan) Bicycle Components Co., Ltd. Shimano (Mersing) Sdn. Bhd.
   PT Shimano Batam Shimano (Philippines) Inc. MSC Pte. Ltd.
   Shimano (Cambodia) Co., Ltd. Shimano (Taiwan) Co., Ltd.
   PRO (Taiwan) Procurement Co., Ltd. Shimano (Kunshan) Fishing Tackle Co., Ltd. Shimano (Shanghai) Sales Corporation Shimano (Tianjin) Bicycle Components Co., Ltd. Shimano (Lianyungang) Industrial Co., Ltd. Shimano South Asia Private Limited Shimano North America Holding, Inc.
   Shimano Canada Ltd. G.Loomis, Inc. Innovative Textiles, Inc. Shimano Europe B.V.
   Shimano Germany Fishing GmbH Shimano Benelux B.V.
   Shimano UK Ltd. Shimano Italia S.R.L. Shimano Belgium N.V. Lazer Sport N.V. Shimano France S.A.S. Shimano Iberia, S.L.
   Shimano Italia S.p.A. in liquidazione Shimano Czech Republic, s.r.o. Shimano Nordic AB
   Shimano Nordic OY Shimano Nordic AS Shimano Nordic Denmark ApS Shimano Polska Sp. z o.o.
   Shimano Menat Spor Etkinlikleri Spor Malzemeleri ve Ekipmanlari Ticaret Limited Sirketi Shimano Bisiklet Parca ve Ekipmanlari Satis Servis Ticaret Anonim Sirketi
   Shimano Balikcilik Malzemeleri ve Ekipmanlari Satis Ticaret Anonim Sirketi Shimano Australia Cycling Pty. Ltd.
   Shimano Oceania Holdings Pty. Ltd. Shimano Australia Fishing Pty. Ltd. Shimano New Zealand Limited
   Shimano Bike & Fishing Mexico S.A. de C.V. Shimano Latin America Representacao Comercial Ltda. Shimano Uruguay S.A.
   Shimano Argentina S.A.U. Shimano Sales Co., Ltd. Shimano Kumamoto Co., Ltd.
2. The remaining subsidiaries including Shimano Adachi Co., Ltd. are excluded from consolidation since the aggregate amounts of the total assets, net sales, net income and retained earnings of these subsidiaries are immaterial to the comparable amounts in the accompanying consolidated financial statements.

1. Applications of the equity method

None of the unconsolidated subsidiaries and affiliated companies (20 to 50 percent-owned companies) including Sanbo Co., Ltd. is accounted for by the equity method since the aggregate amounts of net income and retained earnings of these companies are immaterial to the comparable amounts in the accompanying consolidated financial statements.

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(3) Fiscal year of the consolidated subsidiaries

The fiscal year of Shimano Italia S.p.A. in liquidazione ends on November 30 and its financial statements as of November 30 are used for preparation of the consolidated financial statements. Any material effects occurring during the period from December 1 to December 31 are adjusted in the consolidated financial statements.

1. Summary of material accounting policies

1. Valuation basis and method for principal assets Securities
   Other securities (syn. Available-for-sale securities)
   Other securities except for shares, etc. with no market prices
   Other securities except for shares, etc. with no market prices are stated at the market value method.
   Unrealized gains and losses on these securities are reported, net of applicable income taxes, as a separate component of net assets. Realized gains and losses on sales of these securities are credited or charged to income, with cost determined on the moving average basis.
   Shares, etc. with no market prices
   Shares, etc. with no market prices are stated at moving average cost.

Inventories

Inventories held for sale in the ordinary course of business are stated principally at cost (the book value devaluation method based on decline in profitability), and their valuation methods are as follows.

Merchandise, finished goods, work in process and raw materials are stated principally at cost determined by the weighted average method.

Supplies are stated principally at the most recent purchase method.

1. Depreciation and amortization of principal fixed assets Property, plant and equipment
   Property, plant and equipment acquired on or before March 31, 2007 (excluding leased assets)
   Property, plant and equipment of the Company and its consolidated domestic subsidiaries are depreciated principally by the former declining-balance method.
   Molds for die casting and mechanical pressing are depreciated by the straight-line method based on the estimated useful lives of the respective assets.
   Buildings (excluding building fixtures) acquired on or after April 1, 1998, are depreciated by the former straight-line method. Depreciation of property, plant and equipment of consolidated foreign subsidiaries is principally computed by the straight-line method based on the estimated useful lives of the respective assets.
   Property, plant and equipment acquired on or after April 1, 2007 (excluding leased assets)
   Property, plant and equipment of the Company and its consolidated domestic subsidiaries are depreciated principally by the declining- balance method.
   Molds for die casting and mechanical pressing are depreciated by the straight-line method based on the estimated useful lives of the respective assets.
   Buildings (including building fixtures) are depreciated by the straight-line method.
   Depreciation of property, plant and equipment of consolidated foreign subsidiaries is principally computed by the straight-line method based on the estimated useful lives of the respective assets.
   Property, plant and equipment acquired on or after April 1, 2016 (excluding leased assets)
   Property, plant and equipment of the Company and its consolidated domestic subsidiaries are depreciated principally by the declining- balance method.
   Molds for die casting and mechanical pressing are depreciated by the straight-line method based on the estimated useful lives of the respective assets.
   Buildings (including building fixtures) and structures are depreciated by the straight-line method.
   Depreciation of property, plant and equipment of consolidated foreign subsidiaries is principally computed by the straight-line method based on the estimated useful lives of the respective assets.
   Leased assets
   Leased assets related to finance lease transactions without ownership transfer
   Depreciation of leased assets related to finance lease transactions without ownership transfer is principally computed by the straight- line method based on the period of the leasing contract as the useful lives and with no residual value.
   Right-of-use assets
   Depreciation of right-of-use assets is computed by the straight-line method based on the useful lives of right-of-use assets or the period of the leasing contract, whichever is shorter.
   Intangible assets
   Intangible assets are amortized principally by the straight-line method. Amortization of software for internal use is computed by the straight-line method over an estimated useful life (principally 5 years).
2. Provision for principal allowances and reserves

Allowance for doubtful accounts

The allowance for doubtful accounts is provided in an amount sufficient to cover possible losses on collection. Such amount is computed by applying bad debt loss ratios based on past experience for general receivables and by individually reviewing collectability for specific doubtful accounts.

Accrued employee bonuses

Accrued employee bonuses are provided in an amount corresponding to the fiscal year based on the projected amount sufficient to meet future payments of bonuses to employees.

Accrued officer bonuses

Accrued officer bonuses are provided in an amount corresponding to the fiscal year based on the projected amount sufficient to meet future payments of bonuses to officers.

Provision for product warranties

Provision for product warranties is recorded to provide for the expenses associated with free inspection and replacement of specific products sold in the past, in an amount corresponding to the individually-estimated expense.

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(d) Revenue and expenses

The Shimano Group is mainly engaged in the manufacture and sale of bicycle components and fishing tackle.

Performance obligations are considered to be satisfied at the time of delivery of products or merchandise under sales contracts with customers, and revenue from the sale of products or merchandise is recognized in the amount expected to be received in return for the products or merchandise. The Group applies the alternative treatment set forth in Paragraph 98 of the Implementation Guidance on Accounting Standard for Revenue Recognition, recognizing revenue from products or merchandise sold within Japan at the time of shipment, as there is a normal period of time between shipment and delivery. For chargeable supplied transactions where the Group carries the obligation of buying back the supplied items, the disposal of the supplied items is not recognized.

(e) Translation of assets and liabilities denominated in foreign currencies into yen

Monetary assets and liabilities of the Company denominated in foreign currencies are translated into Japanese yen at applicable current exchange rates at the balance sheet date. However, receivables and payables denominated in foreign currencies covered by forward exchange contracts are translated at the contracted rates. Differences arising from translation are charged or credited to income. Assets and liabilities of consolidated overseas subsidiaries are translated into Japanese yen at the rate of exchange at the balance sheet date, and revenue and expense accounts are translated into Japanese yen at the average rates over the fiscal year. Differences arising from translation are included in foreign currency translation adjustments and non-controlling interest in net assets.

1. Accounting for hedges Method of hedge accounting
   With respect to receivables and payables denominated in foreign currencies covered by forward exchange contracts, appropriation accounting is applied.
   Hedging instrument and risk hedged
   Foreign exchange forward contracts serve as hedges against risk of fluctuation in currency exchange rates concerning foreign currency- denominated assets and liabilities and for scheduled foreign currency-denominated transactions.
   Hedging policy
   Hedging transactions are only adopted in order to appropriately control and reduce risks associated with export and import. Assessing the effectiveness of a hedge
   Hedge accounting is applied in accordance with the "Practical Guidelines Concerning Accounting for Financial Instruments" (The Japanese Institute of Certified Public Accountants).
2. Method and period of amortization of goodwill

Goodwill is amortized by the straight-line method over a reasonable number of years within 20 years, based on judgment of individual items. Goodwill whose amount is immaterial is fully amortized as incurred.

1. Other material accounting policies for preparation of consolidated financial statements Accounting for employee retirement benefits
   Net defined benefit liability (or net defined benefit asset, in cases where the amount of pension assets exceeds the retirement benefit obligation), including both the unfunded lump-sum benefit and the funded pension plan, is calculated as the difference between the expected and discounted future retirement and Shimano corporate pension payments, and the assets under the pension plan to meet such future payments. All the past service costs and actuarial gains and losses are expensed in the fiscal year in which they occur.

In calculating retirement benefit obligation, the benefit formula basis is applied to allocate projected retirement benefits to the periods until the end of the current fiscal year.

Certain consolidated subsidiaries use the simplified method whereby the amount that would be required to be paid if all their eligible employees voluntarily terminated their employment as of the balance sheet date is treated as retirement benefit obligation for the calculation of net defined benefit liability and retirement benefit cost.

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1. Notes relating to changes in presentation method
   Consolidated balance sheet
2. 
   In the previous fiscal year, "provision for product warranties" (1,393 million yen for the fiscal year ended December 31, 2022) was included in "others" under "current liabilities." As this item has become material in value, it has been reported as a separate item for the fiscal year ended December 31, 2023.
3. Notes relating to accounting estimates
4. 1. Amount recorded in the consolidated financial statements for the fiscal year ended December 31, 2023

Provision for product warranties

16,017 million yen

1. Information on the contents of material accounting estimates for the identified item
2. 1. Method for calculating the amount recorded in the consolidated financial statements for the fiscal year ended December 31, 2023 and key assumptions used in the calculation
      Provision for product warranties for the fiscal year ended December 31, 2023 is recorded at an estimated amount mainly of expenses associated with free inspection and replacement of bonded 11-speed HOLLOWTECH II road cranksets produced by the Company, calculated based on information currently available.
      Future expenditures arising from the free inspection and replacement primarily consist of expenses associated with free inspection (hereinafter referred to as "inspection cost") and expenses associated with the manufacturing of substitute parts to be used at the time of free replacement (hereinafter referred to as "manufacturing cost").
      Future expenditures arising from the free inspection and replacement are calculated at an amount estimated to be incurred in the future based on information currently available. Specifically, the inspection cost is calculated by multiplying the number of units projected to be inspected in the future by the unit cost per inspection. The manufacturing cost is calculated by multiplying the number of units projected to be replaced in the future by the production cost per unit.
   2. Impact on the consolidated financial statements for the following fiscal year
      The estimated amount to be incurred in the future mainly comprises the inspection cost and manufacturing cost, as reasonably calculated based on information currently available. However, the estimated amount may differ from the actual amount incurred.
      In that case, the difference may have a material impact on the amount of provision for product warranties to be recorded in the consolidated financial statements for future fiscal years.

4. Notes relating to consolidated balance sheet

Accumulated depreciation of property, plant and equipment

194,525 million yen

5. Notes relating to consolidated statement of income

1. Selling, general and administrative expenses

Main components of selling, general and administrative expenses for the fiscal year ended December 31, 2023:

Salaries and wages	25,590 million yen
Advertising and sales promotion expenses	13,927 million yen
R&D expenses	5,881 million yen
(2) R&D expenses

R&D expenses included in selling, general and administrative expenses and manufacturing expenses for the fiscal year ended

		December 31, 2023		14,611 million yen
(3)	Write-down of inventories held for ordinary sales purposes due to a decline in profitability
		Cost of sales		4,602 million yen
(4)	Loss on free inspection
		Some bonded 11-speed HOLLOWTECH II road cranksets produced by the Company on and before June 30, 2019 show bonding separation
		and delamination, which may produce gap and clearance. The Shimano Group therefore recorded expenses associated with free inspection and
		replacement.
		The amount of loss recorded includes provision for free inspection and replacement, as reasonably estimated based on information currently
		available to the Company.
(5)	Impairment loss
		The Shimano Group recorded impairment loss on the following asset.
		Location	Use	Category	Amount
		Lazer Sport N.V.	Bicycle components	Goodwill	909 million yen

(Background)

As a result of reviewing the profit plan of Lazer Sport N.V., a consolidated subsidiary, the book value of goodwill was reduced to the recoverable amount and the amount of decline was recorded as an impairment loss because lower cash flow over the initially expected period was estimated.

(Method of grouping)

The Shimano Group assets are grouped by reportable segment and in the minimum unit that produces cash flow.

(Method of calculation of a recoverable amount)

The recoverable amount is measured by the value in use, which is calculated by discounting future cash flows at the rate of 10.2%.

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6. Notes relating to consolidated statement of shareholders' equity

(1) Total number of issued shares as of the end of the fiscal year ended December 31, 2023 90,022,000 shares

1. Cash dividends paid during the fiscal year ended December 31, 2023

1. Payment of cash dividends

At the Ordinary General Meeting of Shareholders held on March 29, 2023, the following resolutions were made.

・Matters concerning dividends for shares of common stock
Total amount of cash dividends	12,914 million yen
Cash dividends per share	142.50 yen
Record date	December 31, 2022
Effective date	March 30, 2023

(b) Payment of interim cash dividend

At the meeting of the Board of Directors on July 25, 2023, the following resolutions were made.

・Matters concerning dividends for shares of common stock
Total amount of cash dividends	12,882 million yen
Cash dividends per share	142.50 yen
Record date	June 30, 2023
Effective date	September 4, 2023

(3) Cash dividends paid after the end of the fiscal year ended December 31, 2023

At the Ordinary General Meeting of Shareholders to be held on March 27, 2024, the following resolutions are expected to be made.

・Matters concerning dividends for shares of common stock
Total amount of cash dividends	12,820 million yen
Source of dividends	Retained earnings
Cash dividends per share	142.50 yen
Record date	December 31, 2023
Effective date	March 28, 2024

7. Notes relating to financial instruments

1. Policies on financial instruments

The Shimano Group restricts its fund management to deposits with financial institutions with high credit standing and raises funds mainly by means of bank loans.

The Shimano Group manages customer credit risk from notes and accounts receivable-trade on the basis of internal credit control guidelines. Investment securities are primarily stocks and the Shimano Group monitors fair value of listed stocks on a quarterly basis.

The Shimano Group uses derivatives for the purpose of hedging risks in accordance with the internal guidelines.

(2) Fair values of financial instruments

Carrying amounts, fair values and the differences between carrying amounts and fair values as of December 31, 2023, are as follows:

			(Millions of yen)
	Carrying amount	Fair value	Difference
Investment securities	14,913	14,913	-
Assets	14,913	14,913	-
Long-term loans payable	-	-	-
Liabilities	-	-	-
Derivatives	-	-	-

Notes:

1. Cash and time deposits, notes and accounts receivable-trade, accounts payable-trade,short-term loans payable, and income taxes payable are not included in the table above because these instruments are cash-based and their carrying amount approximates fair value because of their short-term maturities.
2. Shares, etc. with no market prices (8,867 million yen on the consolidated balance sheet) are not included in "Investment securities."
3. The carrying amount and fair value of long-term loans payable include the current portion of long-term loans payable.

Derivatives

Not applicable because no derivative transactions existed at the end of fiscal year 2023.

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