Pack : Annual Securities Report for the 72nd Term

Annual Securities Report

From January 1, 2023 to December 31, 2023

(72nd Term)

- 1 -

Annual Securities Report

1. This Report was prepared from data submitted via EDINET (Electronic
   Disclosure for Investors' NETwork) for the Annual Securities Report as required by Article 24, Paragraph 1, of the Financial Instruments and Exchange Act of Japan, pursuant to Article 27-30-2 of that Act. This Report adds pagination and a table of contents.
2. The audit report attached to the Annual Securities Report submitted by the above method and the Internal Controls Report and Confirmation Letter submitted together with the above Annual Securities Report are attached at the end of this Report.

- 2 -

Contents

			Page
Annual Securities Report for 72nd Term
Cover sheet	4
Part 1.	Company information	5
I.	Company overview	5
	1.	Trends in KPIs, etc	5
	2.	History	7
	3.	Lines of business	8
	4.	Affiliate companies	10
	5.	Employees	11
II.	Business conditions	13
	1.	Management policies, business environment, topics, etc	13
	2.	Sustainability concepts and initiatives	15
	3.	Business and other risks	19
	4.	Management's analysis of financial standing, business results, and cash flows	20
	5.	Important business contracts, etc	25
	6.	Research and development activities	25
III.	Facilities	27
	1.	Overview of capital investment	27
	2.	Status of major equipment	27
	3.	Plans for new facilities, removal of facilities, etc	28
IV.	Status of the Company	29
	1.	Stock, etc	29
	2.	Acquisition of treasury share, etc	33
	3.	Dividend policy	34
	4.	Corporate governance	35
V.	Accounts	59
	1.	Consolidated financial statements, etc	60
	2.	Financial statements, etc	97
VI.	Overview of stock administration by the Company	110
VII. Reference information on the Company	111
	1.	Information on the parent company of the Company	111
	2.	Other reference information	111
Part 2.	Information on the Company's guarantors	112

Audit Report

Internal Controls Report

Confirmation Letter

- 3 -

Cover sheet

Document submitted:	Annual Securities Report
Underlying legal provisions:	Article 24, Paragraph 1, of the Financial Instruments and Exchange Act of Japan
Submitted to:	Director, Kinki Local Finance Branch Bureau
Date submitted:	March 28, 2024
Business year:	72nd Term (January 1 - December 31, 2023)
Company name:	ザ・パック株式会社
Company name in English:	The Pack Corporation
Name and title of representative:	Hideaki Yamashita, President & CEO
Head office:	9-3 Higashiobase, Higashinari-ku, Osaka, Japan
Tel.:	[phone]
Administrative contact:	Ikuo Shimomura, Divisional General Manager of Corporate Division
Nearest contact address:	9-3 Higashiobase, Higashinari-ku, Osaka, Japan
Tel.:	[phone]
Administrative contact:	Ikuo Shimomura, Divisional General Manager of Corporate Division
Viewing locations:	The Pack Corporation
	9-3 Higashiobase, Higashinari-ku, Osaka, Japan
	Tokyo Stock Exchange, Inc.
	2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo, Japan

- 4 -

Part 1. Company information

1. Company overview

1. Trends in KPIs, etc.

1. Indicators of consolidated business performance

Fiscal year		68th	69th	70th	71st	72nd
Fiscal year ended		December	December	December	December	December
	2019	2020	2021	2022	2023
Net sales	(¥ million)	95,502	78,445	79,690	89,060	97,714
Ordinary income	(¥ million)	7,199	3,606	4,422	6,353	8,063
Profit attributable to owners of	(¥ million)	4,700	2,392	2,824	4,058	5,652
parent
Comprehensive income	(¥ million)	4,763	2,368	3,325	4,362	7,059
Net assets	(¥ million)	58,495	59,739	62,032	65,371	71,156
Total assets	(¥ million)	88,446	83,556	87,422	94,365	98,847
Net assets per share	(¥)	3,076.27	3,141.09	3,261.64	3,436.46	3,736.44
Net income per share	(¥)	243.89	126.01	148.71	213.55	297.07
Diluted net income per share	(¥)	243.50	125.85	148.53	213.38	296.86
Capital adequacy ratio	(%)	66.0	71.4	70.9	69.2	71.9
Return on equity	(%)	8.2	4.1	4.6	6.4	8.3
Price-to-earnings ratio	(times)	16.2	22.4	18.1	11.3	11.4
Cash flows from operating	(¥ million)	6,599	3,155	7,217	5,380	4,443
activities
Cash flows from investing	(¥ million)	(4,136)	(5,013)	(3,460)	(3,762)	(3,962)
activities
Cash flows from financing	(¥ million)	(3,319)	(1,214)	(1,029)	(1,124)	(1,407)
activities
Ending balance of cash and	(¥ million)	18,307	15,224	18,067	18,653	17,812
cash equivalents
Employees		1,252	1,240	1,198	1,183	1,183
[average number of temporary	(persons)	(505)	(480)	(468)	(472)	(515)
employees, not included
above]

Note: The Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan [ASBJ] Statement No. 29, March 31, 2020) and related guidance have been applied since the 71st term. KPIs and other data for the 70th term reflect retroactive application of these accounting standards.

- 5 -

1. Indicators for the Company

Fiscal year		68th	69th	70th	71st	72nd
Fiscal year ended		December	December	December	December	December
	2019	2020	2021	2022	2023
Net sales		(¥ million)	84,599	69,055	69,557	77,117	85,485
Ordinary income		(¥ million)	6,549	3,305	3,748	5,214	6,713
Net income		(¥ million)	4,306	2,232	2,175	3,268	4,670
Capital		(¥ million)	2,553	2,553	2,553	2,553	2,553
Total shares issued	(thousand shares)	19,900	19,900	19,900	19,900	19,900
and outstanding
Net assets		(¥ million)	54,989	55,670	57,053	59,426	63,790
Total assets		(¥ million)	81,195	76,327	79,172	85,299	87,903
Net assets per share		(¥)	2,893.13	2,928.01	3,000.23	3,123.70	3,349.40
Dividends per share			55.00	60.00	50.00	65.00	90.00
[interim dividend per share,	(¥)	(25.00)	(30.00)	(25.00)	(30.00)	(35.00)
included above]
Net income per share		(¥)	223.44	117.61	114.51	171.97	245.44
Diluted net income per share	(¥)	223.08	117.45	114.38	171.83	245.27
Capital adequacy ratio		(%)	67.6	72.9	72.0	69.6	72.5
Return on equity		(%)	8.0	4.0	3.9	5.6	7.6
Price-to-earnings ratio		(times)	17.7	24.0	23.6	14.0	13.8
Dividend payout ratio		(%)	24.6	51.0	43.7	37.8	36.7
Employees			893	881	841	835	840
[average number of temporary	(persons)	(416)	(402)	(390)	(393)	(436)
employees, not included
above]
Total returns to shareholders		132	97	94	87	122
[Indicator for comparison:		(%)	(118)	(127)	(143)	(140)	(179)
TOPIX including dividends]
Highest share price		(¥)	4,320	4,245	3,270	2,817	3,450
Lowest share price		(¥)	2,827	2,557	2,537	2,107	2,355

Note: Highest and lowest share prices are prices on the Prime Market of the Tokyo Stock Exchange since April 4, 2022, and on the First Section of the Tokyo Stock Exchange for earlier periods.

- 6 -

2. History

May 1952	Nippon Case Corporation established and launches sales of paper cartons and apparel boxes.
July 1955	Hanazono Plant opens in Higashiosaka. Integrated in-house production begins for products ranging from
	corrugated boxes to apparel boxes.
May 1957	Production of paper shopping bags begins.
December 1957	Kobe Office (now Kobe Branch) opens.
June 1958	Nagoya Office (now Nagoya Branch) opens.
September 1959	Konoike Plant (now Osaka Plant) opens in Higashiosaka; production facilities expanded.
August 1960	Fukuoka Branch and Kyoto Office (now the Kyoto Branch) open.
March 1961	Tokyo Branch opens (now the Tokyo Head Office).
September 1964	Expansion work completed at Konoike Plant. Hanazono Plant relocated. Full-scale multifaceted
	production and management structures established.
July 1965	Sapporo Office (now the Hokkaido Branch) opens.
May 1966	Hiroshima Office (now the Hiroshima Branch) opens.
May 1967	Okayama Office (now the Okayama Branch) opens.
April 1968	Sendai Office (now the Tohoku Branch) opens.
September 1969	Nara Plant opens in Yamatokoriyama as a plant specializing in corrugated boxes. Urawa Plant opens in
	Urawa.
August 1974	Production of plastic bags begins.
September 1979	Saitama Plant opens in Sakado; Urawa Plant relocated.
July 1983	Company is renamed The Pack Corporation.
January 1987	Yokohama Office (now the Yokohama Branch) opens.
November 1987	The Pack America Corp. (now a consolidated subsidiary) established in the United States
August 1991	Ibaraki Plant opens in Hitachi.
September 1991	Stock listed on second section of Osaka Securities Exchange
January 1996	The Nicols established
January 1998	Kanto Branch opens.
January 1999	Ibaraki Plant earns ISO 14001 (environmental management systems) certification.
December 1999	Headquarters earns ISO 14001 (environmental management systems) certification.
April 2000	Nara Plant earns ISO 9001 (quality management) certification.
September 2001	Stock listed on second section of Tokyo Stock Exchange
October 2001	Osaka, Saitama, and Ibaraki plants earn ISO 9001 (quality management) certification.
April 2002	Nara Plant earns ISO 14001 (environmental management systems) certification.
October 2002	Osaka and Saitama plants earn ISO 14001 (environmental management systems) certification.
June 2003	Stock listed on first sections of Tokyo Stock Exchange and Osaka Securities Exchange
October 2003	Keihin Tokushu Printing Corp. (now a consolidated subsidiary) established
December 2003	Shanghai Office opens in China.
March 2006	The Pack (Shanghai) Corporation (now a consolidated subsidiary) established in China
November 2006	All sites earn ISO 14001 (environmental management systems) certification.
April 2007	Additional shares acquired in Nikko Print Corporation (now a consolidated subsidiary)
August 2007	The Pack (Changshu) Co., Ltd. (now a consolidated subsidiary) established in China
	Headquarters, Tokyo and Osaka plants, and sales offices earn FSC® CoC certification (FSC® C020517).
February 2009	Pack Takeyama Co., Ltd. (now a consolidated subsidiary) established
April 2009	All sites earn ISO 9001 (quality management) certification.
July 2011	Tokyo Plant opens in Hidaka, Saitama Prefecture; Saitama Plant relocated.
January 2014	The Nicols merged through absorption-type merger
June 2014	Acquired all shares of stock in Nishinihon Printing Co., Ltd. (now a consolidated subsidiary), making it
	a wholly owned subsidiary
December 2016	All paper products production and sales sites in Japan earn FSC® CoC certification (FSC® C020517).
April 2018	Acquired stock in Kannaru Printing Co., Ltd. (now a consolidated subsidiary), making it a subsidiary.
December 2018	Tokyo and Osaka plants earn FSSC 22000 (food safety) certification.
April 2022	Listing transferred to the Prime Market of the Tokyo Stock Exchange
March 2023	New headquarter building completed in Higashinari-ku, Osaka

- 7 -

3. Lines of business

The Pack Group consists of nine companies, the Pack Corporation and eight consolidated subsidiaries.

The Group's business activities include the manufacture and sale of paper products, film packaging, and other products, as well as related research, logistics, services, and other activities.

The Group's businesses are positioned as outlined below.

Segment	Lines of business	Companies
Paper Products	Manufacture, purchase, and sale of paper	The Pack Corporation
	bags, printed folding paper cartons,	Keihin Tokushu Printing Corp.
	corrugated boxes, etc.	Nikko Print Corporation
		Pack Takeyama Co., Ltd.
		Nishinihon Printing Co., Ltd.
		Kannaru Printing Co., Ltd.
		The Pack America Corp.
		The Pack (Shanghai) Corporation
		The Pack (Changshu) Co., Ltd.
Film Packaging	Manufacture, purchase, and sale of plastic	The Pack Corporation
	bags, garment bags, etc.	Pack Takeyama Co., Ltd.
		The Pack America Corp.
		The Pack (Shanghai) Corporation
Other Businesses	Purchase and sale of gifts, supplies, price	The Pack Corporation
	tags, design production, advertising and	Pack Takeyama Co., Ltd.
	promotional materials, etc.	Nishinihon Printing Co., Ltd.
		Kannaru Printing Co., Ltd.
		The Pack America Corp.
		The Pack (Shanghai) Corporation

The Pack America Corp. is a U.S. subsidiary selling products primarily in the U.S.

The Pack (Shanghai) Corporation and The Pack (Changshu) Co., Ltd. are Chinese subsidiaries. The Pack (Shanghai) Corporation sells products primarily in China, while The Pack (Changshu) Co., Ltd. produces paper bags for sale in China and to the Company in Japan.

- 8 -

Products

and sale of paper products, film packaging, gifts, etc.)	The Pack Corporation
(Manufacture, purchase,

Subcontracting of

production

Receipt of products

Subcontracting of

production

Receipt of products and

in-process products

Subcontracting of

production

Receipt of in-process

products

(Manufacture, purchase, and sale of paper products, gifts, etc.)

☆Kannaru Printing Co., Ltd.

Transactions

(Manufacture, purchase, and sale of paper products, gifts, etc.)

☆Nishinihon Printing Co., Ltd.

(Manufacture, purchase, and sale of paper products, film packaging, gifts, etc.)

☆Pack Takeyama Co., Ltd.

(Printing and sale of paper

products)

☆Keihin Tokushu Printing

Corp.

Transactions

(Printing and sale of paper products)

☆Nikko Print Corporation

(Purchase and sale of paper products, film packaging, gifts, etc.)

☆The Pack America Corp.

(Purchase and sale of paper products, film packaging, gifts, etc.)

☆The Pack (Shanghai)

Corporation

Products

Products

Products

Products

Products

Customers

	Subcontracting	Receipt of products
	of production
Subcontracting of
production	(Manufacture of paper products)

	☆The Pack (Changshu) Co.,
Receipt of products	Ltd.

Note: ☆ Consolidated subsidiary

- 9 -

4. Affiliate companies

		Capital or		Ownership
			ratio of voting
Name	Address	investment	Main lines of business	Relationship
rights
		(¥ million)
			(%)
(Consolidated
subsidiary)
					Sale of our products; purchase of paper
Keihin Tokushu Printing	Higashinari Ward,	10	Paper Products business	100.0	products; concurrent posting of officers;
Corp.	Osaka	secondment of employees; lending of
					funds; lending of equipment
					Purchase of paper products; concurrent
Nikko Print Corporation	Higashinari Ward,	20	Paper Products business	100.0	posting of officers; secondment of
Osaka	employees; lending of funds; lending of
					equipment
			Paper Products business		Sale of our products; purchase of paper
	Higashinari Ward,			products; concurrent posting of officers;
Pack Takeyama Co., Ltd.	90	Film Packaging business	100.0
Osaka	secondment of employees; payment
		Other Businesses
				agency services
Nishinihon Printing Co.,	Higashinari Ward,		Paper Products business		Sale of our products; purchase of paper
45	100.0	products; concurrent posting of officers;
Ltd.	Osaka	Other Businesses
		secondment of employees
Kannaru Printing Co.,	Yodogawa Ward,		Paper Products business		Sale of our products; concurrent posting of
12	100.0	officers; secondment of employees;
Ltd.	Osaka	Other Businesses
		lending of funds
	New York, N.Y.,		Paper Products business		Concurrent posting of officers;
The Pack America Corp.	US$1,000,000	Film Packaging business	100.0
U.S.A.	secondment of employees
		Other Businesses
The Pack (Shanghai)			Paper Products business		Concurrent posting of officers;
Shanghai, China	US$500,000	Film Packaging business	100.0
Corporation	secondment of employees
		Other Businesses
The Pack (Changshu)	Changshu, Jiangsu				Purchase of paper products; concurrent
Co., Ltd.	US$3,900,000	Paper Products business	93.6	posting of officers; secondment of
Province, China
(See Note 2.)				employees; lending of funds

Notes:

1. Details under Important Lines of Business indicate business segment names as used under Segment Information.
2. Qualifies as designated subsidiary.
3. None of the above companies submits securities notices or annual securities reports.

- 10 -