Based on the recognition that the sustainability of society as a whole will have a significant impact on the future of our corporate activities, we identify as material issues those of high priority among the important social issues that we aim to resolve through our corporate activities. We continuously review these material issues and other matters in order to ensure that we can appropriately identify and respond to changes in the business environment and other factors in a timely and appropriate manner. Once we have identified these material issues, we incorporate them into our business activities, and disclose details and the results of our initiatives in our Sustainability website.
Initially, in the fiscal year ended March 2008, we identified nine material issues of the Group by conducting a material issue assessment based on the framework of the GRI Guidelines, a set of international guidelines that address sustainability reporting. In the fiscal year ended March 2016, we reorganized the items into seven. Later, in response to changes in the external environment and other factors, we updated them to ten items in the Medium-term Management Strategy announced in March 2020.
In addition, in the Medium-term Management Strategy FY2031 that was announced in February 2023, we identified key factors from various perspectives and arranged these elements along two axes, in terms of their importance for each stakeholder, and their degree of importance in relation to Our Commitment. Following extensive discussion on the importance of each key factor undertaken by the Strategic Management Committee and the Board of Directors, an order of priority was established, and we re-established the key themes for each material issue and the nature and objectives of initiatives for each key theme.
We updated the framework to comprise seven items under the Medium-term Management Strategy (FYE March 2027–2029), which commenced in the fiscal year ending March 2027. Under this Medium-term Management Strategy, the Group has adopted the basic policy of “creating the future through resource circulation.” Through our resource circulation business, we aim to maximize the use of limited resources while transforming waste into new value, thereby achieving both the reduction of environmental impacts and the creation of economic value. In reviewing the material issues in parallel with the formulation of the Medium-term Management Strategy, the Group conducted an evaluation from both the perspective of the impact of our business activities on the environment and society (impact materiality), and the financial impact of environmental and social issues on the Group (financial materiality). Furthermore, by aligning the results of this evaluation with the direction of our business strategy, we made comprehensive determinations of materiality while placing emphasis on balancing our responses to social issues with the enhancement of corporate value.

• Promotion of Resource Circulation 
  Recognizing that our resource circulation business is currently in its implementation phase as a core business, we have revised some of our key themes to better align with specific business activities. Specifically, we have established “Expansion of secondary smelting (global expansion)”  and “Improving our tungsten recycling rate” to clarify the core initiatives of our resource circulation business. 
• Enhancement of Human Capital
  We have shifted our focus from a problem-solving approach, in which we attempted to address issues such as labor shortages and improving worker experiences, to viewing human capital as a source of competitiveness and value creation, and redefined our key themes as “Strategic recruitment, development, and deployment of talent,” “Transformation to enhance productivity and capital efficiency,” and “Building a foundation for co-creation and growth.” We have also reorganized our human resources initiatives from the perspective of supporting business transformation and growth.
• Providing High-Value-Added Products and Solutions / Strengthening R&D and Production Engineering Capabilities
  We have reorganized the items previously covered comprehensively under the pre-review materiality “Pursuit of value creation.” Elements related to the value provided to customers and the creation of revenue opportunities have been categorized as “Providing high added-value products and solutions.” Concurrently, elements related to the foundational technologies and new technologies that support these have been consolidated under “Strengthening of development and production capabilities,” clarifying the relationship between these initiatives.
• Strengthening Digital Strategies We have reorganized “Deepening of DX” and “Strengthening information security,” which were 
  previously set as separate initiatives. We have also established “Business model transformation through the use of AI and digital tools” and “Strengthening IT/OT security and resilience” as key themes, respectively, and we are advancing our initiatives accordingly.

The materiality and key themes as of April, 1, 2026 are as follows.

Identification of issues
Extracted key factors from among those identified from the perspectives of ESG and sustainability in 2015 in light of information such as GRI indicators, the OECD Guidelines for Multinational Enterprises and SRI categories. We identify issues from the perspective of social, environmental and economic trends, trends in markets related to the Company, and initiatives undertaken by the Group to increase our corporate value in the medium- to long-term. We also consider international guidelines and principles when selecting elements of these issues.

Organization and assessment of issues
The impact and importance of each issue is organized in terms of both the impact that Group business activities have on the environment and society (impact materiality) and the financial impact that environmental and social issues have on the Group (financial materiality). We compare and examine the issues, taking into account their relationship with management strategy and medium- to long-term importance.
After all of our Executive Officers and Directors have organized the issues and key themes, they are discussed from the perspective of their importance to our stakeholders and the Company.

Selection of issues
Based on the evaluation results, issues judged to be of high importance are identified as material issues. In addition, for each material issue, we establish “key themes” for the Group to focus on. During the review process, we confirm the priorities that management must address through discussions at the Strategic Management Committee and Board of Directors meetings.

Establishment of nature and objectives of initiatives
The nature and objectives of initiatives to address the redefined material issues and key themes are established. The progress and results of these initiatives are regularly disclosed. Review is conducted annually to identify factors such as changes in the business environment in a timely and appropriate manner, then take measures as required.