Nifco : Notice of the 72nd Annual General Meeting Of Shareholders

Notice of 72nd Annual

General Meeting of

Shareholders

Date and time	Proposals
Thursday, June 20, 2024	Proposal 1	Appropriation of Surplus
10 a.m. (reception begins at 9:30 a.m.)	Proposal 2	Election of Five Directors Who Are Not Audit
		and Supervisory Committee Members
Venue	Proposal 3	Partial Revision to Stock-Based Compensation
	System for Directors, etc. Who Are Not Audit
4-1-23 Shiba, Minato-ku, Tokyo		and Supervisory Committee Members
Mita NN Hall, B1F (1st basement floor), Mita NN Building
Table of Contents
Notice of the 72nd Annual General Meeting of Shareholders	.. 1
Business Report	5
Consolidated Financial Statements	20
Non-consolidated Financial Statements	37
Audit Report	46
Reference Documents for the General Meeting of Shareholders
................................................................................................	52
To Our Shareholders
The right to vote at general meetings of shareholders is an important right of shareholders.		Nifco Inc.
Please review the attached Reference Documents for the General Meeting of Shareholders
before exercising your voting rights.
For details of how to exercise your voting rights, please see page 3.			Securities Code: 7988

To Shareholders

Securities Code: 7988 June 4, 2024 (Start date of electronic provision measures: May 29, 2024)

5-3Hikari-no-oka, Yokosuka, Kanagawa

	Nifco Inc.
President & Representative Director	Masaharu Shibao

Notice of the 72nd Annual General Meeting of Shareholders

We would like to express our gratitude for your continued support.

You are cordially invited to attend the 72nd Annual General Meeting of Shareholders of the Company, which will be held as described below.

For this General Meeting of Shareholders, we have taken electronic provision measures for the Reference Documents for the General Meeting of Shareholders, etc. (electronic provision measures). For such documents, please refer to one of the following websites:

[Company website]

https://www.nifco.com/en/news/detail/2024shoushuu.html

(Please access the above website and select "Notice of the 72nd Annual General Meeting of Shareholders.")

[Website for the materials for the General Meeting of Shareholders]

https://d.sokai.jp/7988/teiji/

[Tokyo Stock Exchange website (TSE-listed company information service)]

https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show

(In the TSE website, enter "Nifco Inc." in Issue name (company name) or "7988" in code and click search. In the page that appears, select [Basic Information] -> [Documents for public inspection / PR information] to display the list of available documents. From the list, select [Click here for access] under Notice of General Shareholders Meeting / Information Materials for a General Shareholders Meeting.)

Please review the attached Reference Documents for the General Meeting of Shareholders before exercising your voting rights.

[Voting in writing (by mail)]

Please indicate your approval or disapproval of the proposals on the agenda on the enclosed Voting Rights Exercise Form and return it to us to arrive by no later than 5 p.m. on Wednesday, June 19, 2024.

[Voting via the Internet]

To exercise your voting rights via the Internet, please enter your approval or disapproval of the proposals in accordance with the onscreen instructions by no later than 5 p.m. on Wednesday, June 19, 2024, by (1) scanning the login QR code or (2) accessing the website for exercising voting rights designated by the Company (https://soukai.mizuho-tb.co.jp/).

- 1 -

If you exercise your voting rights via the Internet, please refer to "Guide to Exercising Voting Rights via the Internet, etc." on page 4.

If you do not indicate your approval or disapproval of a proposal when you exercise your voting rights by means of the Voting Rights Exercise Form, it will be treated as an approval.

1	Date and time	Thursday, June 20, 2024, at 10 a.m. (reception begins at 9:30 a.m.)
2	Location	Mita NN Hall, B1F (1st basement floor), Mita NN Building 4-1-23 Shiba, Minato-ku, Tokyo
3	Objectives	Reports	1. Business Report, Consolidated Financial Statements and Results of Audit of
			Consolidated Financial Statements by the Accounting Auditor and the Audit and
			Supervisory Committee for the 72nd fiscal year (from April 1, 2023, to March 31,
			2024)
			2. Non-consolidated Financial Statements for the Company's 72nd fiscal year (from
			April 1, 2023, to March 31, 2024)
		Resolutions	Proposal No. 1:	Appropriation of Surplus
			Proposal No. 2:	Election of Five Directors Who Are Not Audit and Supervisory
				Committee Members
			Proposal No. 3:	Partial Revision to Stock-Based Compensation System for Directors,
				etc. Who Are Not Audit and Supervisory Committee Members
4	Guide to Exercising Voting	Please refer to the "Guide to Exercising Voting Rights" on page 3.
	Rights

• When attending the meeting, please present the enclosed Voting Rights Exercise Form to the receptionist at the meeting.
• If any amendments are made to the Electronic Provision Measures, a notice to that effect along with the matters before and after amendment will be posted on each website indicated above.

There will be no social gathering or gifts on the day of the General Meeting of Shareholders. We would appreciate your

understanding.

- 2 -

Guide to Exercising Voting Rights

The right to vote at general meetings of shareholders is an important right of shareholders.

Please review the attached Reference Documents for the General Meeting of Shareholders before exercising your voting rights.

There are three ways to exercise your voting rights:

Voting via the Internet

Enter your approval or disapproval of each proposal according to the instructions on the next page.

Deadline

Entries completed by 5 p.m. on Wednesday, June 19, 2024

Voting in writing (by mail)

Indicate your approval or disapproval of the proposals on the enclosed voting form and return it to us.

Deadline

Voting cards must arrive by

5 p.m. on Wednesday,

June 19, 2024

Attending the General

Meeting of Shareholders

Submit the enclosed Voting Rights Exercise Form to the receptionist at the meeting.

Date and time

Thursday, June 20, 2024

10 a.m.

(Reception starts at 9:30 a.m.)

Instructions for Filling Out the Voting Rights Exercise Form

If you exercise your voting rights both in writing (by mail) and via the Internet, etc., the exercise of your voting rights via the Internet, etc. will be treated as valid. If you exercise your voting rights more than once via the Internet, etc., the last vote will be treated as the valid vote.

- 3 -

Guide to Exercising Voting Rights via the Internet

Scanning login QR code:

"Smart Voting"

You can log in to the voting website without entering your voting code and password.

Entering your voting code and

password

Voting website

https://soukai.mizuho-tb.co.jp/

If you are not sure how to operate your computer, smartphone, or mobile phone when exercising your voting rights via the Internet, please contact us with the information on the right.

Internet Help Dial, Stock Transfer Agency Department,

Mizuho Trust & Banking Co., Ltd.

0120-768-524

(Business hours: 9:00 to 21:00)

Institutional investors can use the electronic voting platform for institutional investors operated by ICJ, Inc.

- 4 -

Business Report (April 1, 2023, to March 31, 2024)

1. Current Status of the Corporate Group

(1) Business in the Current Fiscal Year

Business Progress and Results During the fiscal year under review (hereinafter "the period"), the Japanese economy experienced production cuts in the automobile industry and weak exports of goods in the manufacturing sector due to the suspension of shipments by some automobile manufacturers and other factors. On the other hand, in the non-manufacturing sector, business confidence improved significantly due to factors such as a recovery in inbound demand, increased margins from price pass-through, and progress in digitalization. Looking overseas, in the Chinese economy, although business conditions made a rapid recovery going into 2023 on the lifting of the zero-COVID-19 policy, they have slowed since spring because of factors such as the end of stay-at-home demand, a slowdown in exports of IT-related products, and a stagnant real estate market. The European economy also experienced a slowdown due to global sluggishness in demand for goods, as well as pent-up demand and inbound demand running their course post-COVID-19 in the service sector. In the U.S. economy, the manufacturing sector continued to increase production of automobiles and high-tech-related goods in industrial production, while a trend of a production decline continued in other manufacturing sectors. Meanwhile, in the non-manufacturing sector, business conditions improved in areas such as agriculture, forestry, and fisheries, accommodation and food services, and health care, boosting the economy overall. As a result, the global economy was generally on a recovery trend despite some regional weaknesses. However, the outlook remains uncertain due to factors such as the stagnant real estate market within the Chinese economy, continuing tension in the Middle East, and anticipated changes in the international political balance as a result of elections in various countries around the world. With regard to automobile manufacturers, which are the main customers of Nifco Inc. (the "Company") and its consolidated subsidiaries (collectively, the "Group"), in the Japanese market, both production volume and sales volume increased year on year for the period, despite the impact from factors such as suspended shipments by some automobile manufacturers. In overseas markets as well, due to the easing of semiconductor supply constraints, etc., both production and sales volumes in China, Europe, the U.S.A., and other markets increased year on year. As a result, the Group's consolidated earnings were as follows. Net sales for the period amounted to 371,639 million yen, up 15.5% year on year. In terms of profits, operating profit increased 27.5% year on year to 43,925 million yen, due to controlling increases in fixed costs such as depreciation and personnel expenses, despite the soaring prices of raw materials and electricity. Ordinary profit increased 31.1% year on year to 49,665 million yen due to foreign exchange gains resulting from the depreciating yen. Profit attributable to owners of parent decreased 13.8% year on year to 18,252 million yen, mainly due to the posting of 18,765 million yen in extraordinary losses, including an allowance for losses on business transfer related to the transfer of the German business and an impairment loss. The recognition, analysis, and examination of operating results by segment are as follows. Net sales in each segment are to external customers. Industrial Plastic Parts & Components (For the domestic automobile industry) For automotive production in Japan, sales exceeded the initial plan and the previous year's results from the first to the third quarter due to increased production in response to the elimination of the shortage of semiconductors. However, fourth quarter sales did not exceed the plan due to a series of production cuts in connection with certification test irregularities by a number of automobile manufacturers since December 2023 and the Noto Peninsula Earthquake. However, the full-year sales total exceeded the plan due to factors such as contributions from mold sales associated with the launch of new vehicles, compensation for electric power charges, compensation for production cutbacks, and price revision negotiations. - 5 -

(For the overseas automobile industry)

Overseas, both net sales and profits exceeded the plan and increased year on year thanks to support from generally strong automobile demand. In particular, business for Korean OEMs remained strong due to factors such as increased production by customers, and both net sales and profits substantially exceeded the plan and increased year on year, especially in South Korea, North America, and Europe. For Japanese OEMs, net sales and profits grew overall supported by strong sales by customers in the U.S., where sales and profits increased, and also firm performance mainly in India and Indonesia. However, in China, Japanese OEMs struggled due to sluggish sales, resulting in an overall decrease in net sales and profit. Furthermore, in Europe, the German OEM business faced a difficult time in terms of profits. In particular, the U.S. subsidiary that conducts business for German customers suffered losses due to operational problems. In the current fiscal year, we aim to further boost profitability by improving our business portfolio through the sale of the German OEM business to purge loss-making businesses, while strengthening capital investment in the strong Korean OEM business and the Japanese OEM business in North America and India.

[For other industries]

In the housing and living sector, the number of new housing starts was sluggish due to soaring construction costs and real estate prices, leading to a decline in production related to household equipment, where the Group has major customers, and this resulted in performance falling short of the initial plan. In the sports and outdoor sector, sites in China delivered higher profits due to aggressive sales activities to brands made in China, but performance fell short of the initial plan due to continued significant production cutbacks at major customers in Europe and the U.S. caused by a drop in consumption due to global inflation.

As a result of the above, net sales in the industrial plastic parts & components business increased 15.9% from the previous fiscal year to 334,729 million yen. Segment profit was up 25.8% year on year to 42,840 million yen.

1. Bed and furniture business

In the bedding & furniture business, both net sales and profits increased due to steady sales to retailers and exports, as well as strong demand from hotels, partly reflecting inbound demand recovery, although the market in Japan was affected by factors such as soaring raw material prices and cost increases due to the yen's depreciation. Meanwhile, demand overseas from hotels increased at all sites, as it did in Japan, and wholesale and retail sales grew steadily, especially in China, resulting in higher net sales and profits. As a result, net sales in the bedding & furniture business increased 11.7% year on year to 36,910 million yen. Segment profit rose 11.2% year on year to 6,544 million yen.

- 6 -

Net Sales and Production by Business Category

Business category	Net sales	Comparison with the	Output	Comparison with the
previous period	previous period
	Million yen	%	Million yen	%
Industrial Plastic Parts &	334,729	115.9	229,414	112.1
Components
Bed and furniture business	36,910	111.7	13,193	113.5
Total	371,639	115.5	242,607	112.2

Capital Investment

Capital expenditures in the current period totaled 10,018 million yen. These included the acquisition of molds and equipment at Nifco America Corporation, our subsidiary.

In addition, the ongoing construction and expansion of major facilities during the current period is for the acquisition of production facilities to promote future global expansion and production automation in the industrial plastic parts & components, our core business.

Funding Status

No noteworthy financing was conducted during the current period.

(2) Assets and Income for the Previous Three Fiscal Years

		69th Period	70th Period	71st Period	72nd Period
		(Current period)
		(April 1, 2020,	(April 1, 2021,	(April 1, 2022,
		(April 1, 2023,
		to March 31, 2021)	to March 31, 2022)	to March 31, 2023)
		to March 31, 2024)
Net sales	(Million yen)	256,078	283,777	321,771	371,639
Ordinary profit	(Million yen)	29,535	33,602	37,876	49,665
Profit attributable to	(Million yen)	18,402	22,959	21,170	18,252
owners of parent
Profit per share		181.09 yen	227.27 yen	211.28 yen	183.26 yen
Total assets	(Million yen)	307,127	333,068	359,150	380,405
Net assets	(Million yen)	178,649	200,875	226,127	247,052
Net assets per share		1,737.80 yen	1,978.36 yen	2,237.06 yen	2,455.97 yen

(Notes) 1. Profit per share is calculated based on the average number of shares outstanding during the period and net assets per share is calculated based on the total number of shares outstanding at the end of the period. The total number of shares outstanding excludes treasury shares.

2. The Company introduced the Executive Compensation BIP Trust in the 65th fiscal year and the Stock Grant ESOP Trust in the 66th fiscal year, and the shares of the Company held by these trusts are recorded as treasury shares in the consolidated financial statements. For this reason, in the calculation of profit per share, these shares are included in treasury shares that are excluded in calculating the average number of shares during the period, and in the calculation of net assets per share, these shares are included in treasury shares that are excluded in calculating the total number of shares outstanding at the end of the period.

- 7 -

(3) Statuses of Parent Company and Major Subsidiaries

Status of the Parent Company Not applicable. Status of Major Subsidiaries Voting rights of the Company name Share capital Company (%) Main Business Direct Indirect Nifco America Corporation US$ 3,500 thousand 100.00 － Manufacturing and sales of industrial plastic parts & components Nifco Central Mexico S. de R. L. de C. V. 325,258 thousand Mexican 47.49 52.51 Manufacturing and sales of industrial plastic pesos parts & components Nifco UK Ltd. 14,510 thousand pounds － 100.00 Manufacturing and sales of industrial plastic parts & components Nifco Korea Poland Sp. z o.o. 6,000 thousand zloty － 100.00 Manufacturing and sales of industrial plastic parts & components Nifco Germany GmbH 25 thousand euros － ※100.00 Manufacturing and sales of industrial plastic parts & components Shanghai Nifco Plastic Manufacturer Co., US$3,000 thousand － 100.00 Manufacturing and sales of industrial plastic Ltd. parts & components Dongguan Nifco Co., Ltd. HK$75,000 thousand － 90.00 Manufacturing and sales of industrial plastic parts & components Beijing Nifco Co., Ltd. US$ 14,534 thousand － 100.00 Manufacturing and sales of industrial plastic parts & components Nifco Taiwan Corporation NT$150,000 thousand 92.00 － Manufacturing and sales of industrial plastic parts & components Nifco Korea Inc. 34,400,000 thousand won 100.00 － Manufacturing and sales of industrial plastic parts & components Nifco (Thailand) Co., Ltd. 320,000 thousand baht 100.00 － Manufacturing and sales of industrial plastic parts & components Union Nifco Co., Ltd. 100,000 thousand baht 50.00 － Manufacturing and sales of industrial plastic parts & components Nifco Poland Sp. z o.o. 9,000 thousand zloty － 100.00 Manufacturing and sales of industrial plastic parts & components Simmons Co., Ltd. 259,150 thousand yen 99.96 － Manufacture and sale of beds, import and sale of furniture Simmons Bedding & Furniture (HK) HK$10,000 thousand － 100.00 Bed and furniture business Limited (Notes) 1. Percentages of voting rights of the Company are rounded down to the indicated decimals. 2. On April 15, 2024, the Company transferred all shares of Nifco Germany GmbH. Challenges to Be Addressed The automotive industry, which is a major market in the Group, is expected to continue to grow on a global basis, but various changes such as geopolitics are taking place, and demands from customers are becoming more diverse and complex. Therefore, in order for the Group to make further advancement and growth, it is important to respond appropriately to these issues and needs and to improve customer satisfaction on a global basis. To achieve this goal, we are focusing on developing products and production process technologies that accurately and quickly respond to the needs of each user, the improvement of working styles, the development of human resources and Nifco's job-type personnel system (a method of clearly defining jobs, and then hiring people with the appropriate skills and work experience to perform those jobs), and constructing information systems for security and IT utilization. At the same time, we are currently working to further strengthen the budget control of global group companies, build a cooperative framework among regional bases through the introduction of an overseas regional control system, and promote rapid decision-making in the field. - 8 -

The Company respects the intellectual property rights of other companies. We strive to avoid infringing the intellectual property rights of other companies by conducting patent research and other activities from the development stage to ensure that the Company's products do not infringe their intellectual property rights, thereby reducing the risk of litigation related to intellectual property. During the current period, there were no lawsuits filed by a third party concerning intellectual property rights.

(5) Main Business (as of March 31, 2024)

Th Group is primarily engaged in the industrial plastic parts & components, including industrial plastics and fasteners and plastic functional precision components. The Group's subsidiaries also engage in the bed and furniture business.

(6) Major Offices and Plants (as of March 31, 2024)

Nifco Inc.	Headquarters	5-3Hikari-no-oka, Yokosuka, Kanagawa
	Branch office	Minato-ku, Tokyo
	Plant	Nagoya, Sagamihara
	Business office	Utsunomiya, Saitama, Asaka, Ota, Suzuka, Hamamatsu, Osaka,
		Hiroshima
	Research institute	Yokosuka
Nifco America Corporation	Headquarters	Ohio, U.S.A.
Nifco Central Mexico S. de R. L. de C. V.	Headquarters	Guanajuato, Mexico
Nifco UK Ltd.	Headquarters	Stockton-on-Tees, United Kingdom
Nifco Korea Poland Sp. z o.o.	Headquarters	Zory, Poland
Shanghai Nifco Plastic Manufacturer Co., Ltd.	Headquarters	Shanghai, China
Dongguan Nifco Co., Ltd.	Headquarters	Guangdong Province, China
Beijing Nifco Co., Ltd.	Headquarters	Beijing, China
Nifco Taiwan Corporation	Headquarters	Taoyuan, Taiwan
Nifco Korea Inc.	Headquarters	Asan-si, South Korea
Nifco (Thailand) Co., Ltd.	Headquarters	Chonburi, Thailand
Union Nifco Co., Ltd.	Headquarters	Bangpakong, Thailand
Nifco Poland Sp. z o.o.	Headquarters	Swidnica, Poland
Simmons Co., Ltd.	Headquarters	Minato-ku, Tokyo
	Plant	Oyamacho, Sunto-gun, Shizuoka
Simmons Bedding & Furniture（HK）Limited	Headquarters	Hong Kong

- 9 -