In late November, we held a briefing session on the Group's interim financial results for fiscal year 2021.

The financial result briefing is an opportunity for the company to explain its financial results and the background behind them, and to answer questions from institutional investors and analysts of securities companies.

This time, the briefing was held remotely and 23 people participated.

Since institutional investors who hold our company's shares and investors who are considering purchasing our company's shares participate in the meeting, we always try to respond to them sincerely and politely.

Questions and answers (partial)

Q: Regarding the revised full-year plan announced this time, how did you make it?

A: The plan was made by checking internal data, mainly information from each customer at the time of the announcement.

This time, we considered the impact on business profits due to the sharp rise in the price of raw materials, especially steel.

Q: What is the status of passing on the soaring cost of raw materials to sales prices?

A: We forecast that the price of steel products in the second half of the fiscal year may nearly triple compared to last year.

Therefore, we will ask each customer to reflect the price hike in their sales prices at the agreed timing.

However, since this sudden price hike does not apply to the agreed conditions, we are appealing to our customers to reflect the price in real time.

Although part of the price hike has been approved by the customers and incorporated into the revised published prices, we will continue to discuss the issue with customers patiently, without forgetting the spirit of "Fusu-furi”.

We believe it is necessary to continue to monitor how the prices of other raw materials will change in the future.

Dear Employees,

This time, the focal points of institutional investors and analysts were as follows;

“Amidst the continuing severe external business environment, are we really transforming our management structure to a more solid one?” and,

“Will we be able to recover from the impact of soaring raw material costs in the next fiscal year?”

I replied, "We are making steady progress in our transformation to a more solid structure. However, we regret that we were not able to achieve the targeted figures we announced at the beginning of the year due to the significant impact of the external environment".

In the second half of the year, we may have changes beyond our anticipation. However, let us all grow together into a company that can reliably secure profits, precisely with the spirit of "Creating a corporate culture that responds flexibly to change without being bound by past concepts”.

For major issues in the organization, the management level and people in charge of each job division take the lead in considering solutions and promoting them.

On the other hand, it is also important to solve issues that arise in our daily work and to continue to implement kaizen activities.

There is no end to the improvement of daily work and the factory floor.

In order to implement these efforts continuously, communication between each and every one of you and your supervisors and management is important.

Please tackle your daily work aiming at “Shinyo-kakujitsu” and “Fusu-furi” with the spirit of Banji-nissei”.

2021.12