Dividend Policy

Daio Paper (“the Company”) places top priority on the return of profit to shareholders and sets a basic policy to continue to pay stable dividends, while taking into consideration factors such as the status of business and the sufficiency of retained earnings. The Company’s basic policy is to pay dividends twice a year, an interim dividend and a year-end dividend. The decision-making bodies for the distribution of retained earnings are the General Meeting of Shareholders for the year-end dividend and the Board of Directors for the interim dividend. For the fiscal year ended March 31, 2020, we paid an annual dividend of ¥13.50 per share, which includes an interim dividend of ¥5.00, in line with the policy described above. Retained earnings are used effectively for upfront investments in growth areas, capital expenditures to enhance future corporate competitiveness, and the improvement of our financial position, to further strengthen our corporate foundation. In its articles of incorporation, the Company stipulates that “the Company may, by a resolution of the Board of Directors, pay interim dividends to the shareholders or registered share pledgees whose names appear or are recorded as such on the register of shareholders as at the closing thereof on the 30th day of September each year.”

Treasury stock

Class of shares, etc.

Acquisition of common stock under Article 155(vii) of the Companies Act

1. Status of acquisition based on resolution approved at the General Meeting of Shareholders Not applicable.
2. Status of acquisition based on resolution approved by the Board of Directors Not applicable.
3. Contents of acquisition of treasury shares not based on a resolution approved at the General Meeting of Shareholders or by the Board of Directors

   Classification	Number of Shares (shares)	Total Amount of Acquisition Price (yen)
   Treasury stock acquired during the fiscal year ended March 31, 2020	795	1,150,438
   Treasury stock acquired between April 1, 2020 and May 31, 2020	–	–

   ※ The number of treasury stocks acquired between April 1, 2020 and May 31, 2020 does not include shares less than one full unit purchased between June 1, 2020 and the date of submission of the annual securities report (June 26, 2020).
4. Status of disposition and holding of acquired treasury stocks

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   Classification	Fiscal year ended March 31, 2020		April 1, 2020 to May 31, 2020
   	Number of Shares (shares)	Total Amount of Disposal Price (yen)	Number of Shares (shares)	Total Amount of Disposal Price (yen)
   Acquired treasury stock for which subscribers were solicited	–	–	–	–
   Acquired treasury stock that was retired	–	–	–	–
   Acquired treasury stock that was transferred in association with merger, share exchange or corporate split	–	–	–	–
   	–	–	–	–
   Other (disposal of treasury stock through third-party allotment)	301,987	264,709,168	–	–
   Number of treasury stocks held	2,615,001	–	2,615,001	–

   ※1 The number of treasury stocks held between April 1, 2020 and May 31, 2020 does not include shares less than one full unit purchased between June 1, 2020 and the date of submission of the annual securities report (June 26, 2020). ※2 Other (disposal of treasury stock through third-party allotment) during the fiscal year ended March 31, 2020 is the disposal of treasury stock by allotting the Company’s stocks to Sumitomo Mitsui Trust Bank, Limited (Re-trustee: Japan Trustee Services Bank, Ltd. (trust account)) carried out on October 16, 2019 following the establishment of trusts for delivery of stocks to directors and executive officers in relation to the stock-based incentive system. ※3 The number of treasury stocks held does not include the stocks held by trust bank in relation to the trusts for delivery of stocks.