Taiheiyo Cement : Notice Regarding Business Suspension of Chinese Consolidated Subsidiary

This document is a translated version of the Japanese original. In the event of any discrepancy between

this translated document and the Japanese original, the original shall prevail.

October 25, 2022

Notice Regarding Business Suspension of Chinese Consolidated Subsidiary

Taiheiyo Cement Corporation (hereinafter "Taiheiyo Cement") hereby announces that its Chinese consolidated subsidiary, Dalian Onoda Cement Co., Ltd. (hereinafter "Dalian Onoda"), has decided to suspend the cement manufacturing and sales business in Dalian City, Liaoning Province.

1. Reason for the suspension

Dalian Onoda, a consolidated subsidiary of Taiheiyo Cement, was established in Dalian City, Liaoning Province, China in 1989 and has developed high trust and evaluation through manufacturing and selling cement. Furthermore, by using Taiheiyo Cement's waste treatment technologies, Dalian Onoda has also contributed to recycling by receiving waste from surrounding areas and using it as raw material for cement manufacture.

Dalian Onoda has been operating 33 years in the area and the land use contract concluded at the time of establishment is approaching the final year. Therefore, the business will be suspended in December this year according to the contract period.

As for the future, Taiheiyo Cement will consider several matters toward the dissolving of Dalian Onoda, and the impact of this suspension on consolidated financial results for the fiscal year ending March 2023 is insignificant. Furthermore, in the future Taiheiyo Cement will promptly announce any matters that need to be disclosed.

2. Outline of Dalian Onoda to be suspended

(1)	Name	Dalian Onoda Cement Co., Ltd.
(2)	Location	No. 5, New Cement Road, Ganjingzi District, Dalian City,
		Liaoning Province, China
(3)	Name and Title of	Yoshifumi Taura, Chairman
	Representative

(4)	Description of	Manufacturing and selling cement
	Business
(5)	Capital	USD 82,780 thousand (on 31st December 2021)
(6)	Date of	28th July 1989
	establishment
(7)	Investor and	Taiheiyo Cement Corporation 84.83%
	ownership ratio	Dalian Jinhai Yangfan Venture Capital Co., Ltd. 15.17%
(8)	Relationship	Capital	Taiheiyo Cement owns 84.83% equity of Dalian
	between Taiheiyo	relationship	Onoda and Dalian Onoda is a consolidated
	Cement and		subsidiary.
	Dalian Onoda
	Human	Taiheiyo Cement's Managing Executive Officer
		relationship	concurrently serves as Chairman of Dalian
			Onoda. Four Taiheiyo Cement employees
			concurrently serve as directors of Dalian Onoda,
			and three employees are seconded to Dalian
			Onoda (two of whom are appointed as
			directors).
		Business	There is no business relationship to be declared.
		relationship
		Related party	Dalian Onoda is a consolidated subsidiary of
		relationship	Taiheiyo Cement and is a related party.

(9) Operating results and financial condition of Dalian Onoda in the last three years*

Accounting period	Fiscal 2019	Fiscal 2020	Fiscal 2021
Net assets	USD 119,707	USD 124,100	USD 110,444
	thousand	thousand	thousand
Total assets	USD 135,566	USD 138,054	USD 122,982
	thousand	thousand	thousand
Net Sales	USD 72,989	USD 72,631	USD 80,076
	thousand	thousand	thousand
Operating profit	USD 15,384	USD 17,043	USD 15,891
	thousand	thousand	thousand
Ordinary profit	USD 18,121	USD 25,559	USD 19,745
	thousand	thousand	thousand
Net profit	USD 15,138	USD 19,531	USD 14,916
	thousand	thousand	thousand

* non-consolidated basis due to Dalian Onoda having no consolidation indicator.