Informational Materials for the 56th Ordinary General Meeting of Shareholders

Start date of measures for electronic provision: July 2, 2025

Informational Materials for the 56th Ordinary General Meeting of Shareholders

(The matters subject to measures for electronic provision that have not been stated in the paper-based documents for shareholders who have requested the delivery of paper-based documents pursuant to laws and regulations or the Articles of Incorporation)

• Business Report

  Main business activities Main offices

  Status of employees Status of main lenders

  Other material matters regarding the current status of the Company Group

  Status of accounting auditor

  System for ensuring the appropriateness of business and the status of operation of said system

  Basic policy regarding control of the Company Policy regarding decision of dividends of surplus, etc.

• Consolidated Financial Statements Consolidated statements of changes in shareholders' equity

  Notes to consolidated financial statements

• Financial Statements Balance sheet Statement of income

  Non-consolidated statements of changes in shareholders' equity

  Notes to non-consolidated financial statements

• Audit Report

Accounting audit report on the consolidated financial statements

Accounting audit report on the non-consolidated financial statements

Audit Report by Board of Corporate Auditors

AIN HOLDINGS INC.

1. Dispensing pharmacy business segment

   Insurance pharmacy business that dispenses prescription drugs to patients with prescriptions issued by a medical facility

2. Retail business segment

The cosmetic store business that sells drugs, cosmetics, and other products to general consumers, and the interior furnishing shop business that plans, manufactures, and sells furniture and homeware products, etc.

Company's headquarters 5-2-4-30, Higashisapporo, Shiroishi-ku, Sapporo Company's Tokyo Office 2-1-5, Yoyogi, Shibuya-ku, Tokyo

Note that the status of distribution of Group stores (regions and number of stores) is as shown below.

1. Status of employees of Company Group

   Segment by business type	Number of employees	Change from end of previous fiscal year
   Dispensing Pharmacy Business	11,119 [1,188]	679 [21]
   Retail Business	1,231 [2,048]	649 [974]
   Companywide (Shared)	659 [122]	207 [41]
   Total	13,009 [3,358]	1,535 [1,036]

   Note: The number of employees denotes regular employees. Part-time and temporary employees are indicated in square brackets as the average number of said personnel for the full year and are not included in the number of employees.

2. Status of Company employees

Note: The number of employees denotes regular employees. Part-time and temporary employees are indicated in square brackets as the average number of said personnel for the full year and are not included in the number of employees.

On May 28, 2025, the Company executed a share transfer agreement for the acquisition of all shares of NSSK-WW Co., Ltd. and its conversion into a subsidiary, making the Sakura Pharmacy Group a subsidiary.

Please refer to the notes on significant subsequent events in the notes to consolidated financial statements and the notes to non-consolidated financial statements for further details.

1. Name Ernst & Young ShinNihon LLC

2. Amount of remuneration

   	Amount paid
   Amount of remuneration for the accounting auditor for the fiscal year under review	¥61 million
   Total amount of cash and other property benefits that should be paid by the Company and its subsidiaries to the accounting auditor	¥79 million

   Notes: 1. In audit agreements between the Company and the accounting auditor, amounts of audit remuneration for audits based on the Companies Act and audits based on the Financial Instruments and Exchange Act are not clearly categorized, nor can they be essentially categorized. As such, the total amount of said remuneration is stated in the amount of remuneration for the accounting auditor for the fiscal year under review.

   2. After performing necessary verification to determine whether the content of the audit plans of the accounting auditor, the status of the execution of accounting audit duties, the basis of calculation for remuneration estimates, etc. are appropriate, the Board of Corporate Auditors granted consent under Article 399, paragraph (1) of the Companies Act with respect to the remuneration amount for the accounting auditor.

3. Description of non-auditing services

   The Company has paid remuneration to Ernst & Young ShinNihon LLC for its support related to human rights due diligence.

4. Decision policy for dismissal or non-reappointment of accounting auditor

In cases where the accounting auditor is found to apply to matters stipulated under each item of Article 340, paragraph (1) of the Companies Act, the Board of Corporate Auditors will dismiss the accounting auditor based on the consent of all Corporate Auditors.

Also, in addition to the above cases, in cases where the proper performance of audits is found to be difficult due to the occurrence of the likes of events that compromise the suitability and/or independence of the accounting auditor, the Board of Corporate Auditors will decide on the content of an agenda to submit to the General Meeting of Shareholders regarding the dismissal or non-reappointment of the accounting auditor.

An overview of the nature of decisions and status of operation with respect to the system for ensuring that the performance of duties by Directors complies with relevant laws, regulations, and the Articles of Incorporation, as well as other systems for ensuring the appropriateness of the business of the Company is as follows.

1. System for ensuring that the performance of duties by Directors and employees complies with relevant laws, regulations, and the Articles of Incorporation

   • The Board of Directors, pursuant to the provisions of the relevant laws, regulations, the Articles of Incorporation, and the Rules of the Board of Directors, makes decisions on important matters relating to business execution and supervises the execution of duties by Directors.

   • In order to maintain and enhance the Directors' supervisory function over the execution of duties, the Group separates the execution and supervisory functions by adopting the executive officer system and continuously appoints outside Directors, considering their independence.

   • The officers and the employees of the Group (hereinafter referred to as the "Officers and Employees"), in accordance with the Group's Code of Conduct, strive for corporate activities with common sense and ethics, always recognizing that they are engaged in the business of people's health as well as complying with the relevant laws, regulations, the Articles of Incorporation and other rules.

   • For the purpose of executing the duties of the Group in accordance with the relevant laws, regulations, the Articles of Incorporation, and the Group's internal rules and enhancing compliance therewith, the Company has created the Compliance Committee to manage compliance throughout the Group.

   • The Group has developed the Compliance Hotline, which enables direct notification to outside contractors, in order to detect and correct violations of the relevant laws and regulations and other compliance-related problems as early as possible.

   • Based on the "Anti-insider Trading Rules," the Group conducts thorough management on undisclosed material facts, makes appropriate efforts to disclose information in a timely and appropriate manner, and develops a system to prevent insider trading.

   • Corporate Auditors, as an independent organization, audit the execution of duties by Directors, including the construction and operational status of the internal control system.

   • The Internal Audit Office, from a viewpoint independent from the business execution organizations, conducts audits on the status of compliance by the Officers and Employees of the Group with the relevant laws, regulations, the Article of Incorporation and other rules.

   • The Group has declared in the Group's Code of Conduct that it has no relationship with any anti-social forces and developed the "Rules for Dealing with Anti-social Forces," and strives as a whole organization to block involvement with anti-social forces in cooperation with the police, corporate lawyers, etc.

2. Systems related to the retention and management of information relating to the performance of duties by Directors

   • The Company, in accordance with the "Document Handling Rules," has systems in place to retain and manage information relating to the performance of duties by Directors appropriately by recording such information in writing or in electromagnetic media in a manner that is accessible by Directors and Corporate Auditors as required.

3. Rules and other systems related to management of the risk of loss

   • The Company has formulated the "Risk Management Rules" and the "Risk Management Guidelines," both of which stipulate risk management for the entire Group, and designates the departments in charge for each risk category and manages the risks for the entire Group exhaustively and comprehensively.

   • The Company has created the Risk Management Office as a section that supervises the risk management status of all Group companies, and manages issues and countermeasures relating to the promotion of Group-wide risk management.

   • The Internal Audit Office conducts field audits to inspect compliance by and effectiveness of the risk management system of the Group.

   • The Company has formulated the Group's "Business Continuity Plan (BCP)" in order to ensure the continuity of the businesses of the Group in the event of a crisis, and ensures that all Officers and Employees of the Group are fully aware of it.

4. System for ensuring efficient execution of duties by Directors

   • Each Director of the Group executes one's allocated area of duties at one's own responsibility pursuant to the "Rules for Segregation of Duties." The Internal Audit Office and the Board of Corporate Auditors form a system to check whether Directors follow the above appropriately.

   • The Company develops the management plans of the Group, and, for the purpose of giving shape to such plans, sets management targets and allocates budget for the entire Group for each fiscal year.

5. Systems to ensure the appropriateness of business in the Group and systems for reporting the Company on matters concerning the execution of the duties by subsidiary Directors

   • In order to ensure the appropriateness of business activities as a corporate group, the Company applies the "Rules for Management of Affiliated Companies" to each of its subsidiaries, obliging them to give periodic reports on their important management matters requiring careful decision-making (including facts of occurrence).

   • The Company holds regular Group management meetings attended by Directors of the Company and its subsidiaries and obliges subsidiaries to report any significant events at such meetings.

6. Matters concerning employees if Corporate Auditors have requested that those employees be appointed to assist with their duties

   • In the event that Corporate Auditors request to appoint employees who assist them in their duties, the Company appoints appropriate employees as assistants to them after consultation with those Corporate Auditors.

7. Matters concerning the independence of employees described in the preceding clause from Directors and matters concerning the ensuring of the effectiveness of instructions given to employees who should assist with the duties of Corporate Auditors

   • In order to ensure the independence of employees described in the preceding clause from Directors, the Company informs Corporate Auditors of personnel changes or evaluations of such employees in advance and requests their opinions.

   • The Company has specified in the "Corporate Audit Standards" the authority to give directions and instructions to employees who assist Corporate Auditors.

8. The following systems and other systems relating to reporting to the Company's Corporate Auditors

   • System to require the Company's Directors and employees to give reports to Corporate Auditors

     In the event that Directors detect any facts that are likely to cause significant damage to the Company in the course of business execution, they report the matters relating to such facts to the Corporate Auditors.

     The Internal Audit Office reports the execution of its business to the Corporate Auditors on a regular basis.

     The Corporate Auditors request reports from Corporate Auditors or employees if deemed necessary to fulfill their duties.

   • System to report to the Corporate Auditors from the Directors, Corporate Auditors and employees of subsidiaries or from persons who received reports from such Directors, Corporate Auditors and employees

     The Officers and Employees of the Group give appropriate reports promptly when they are requested by the Corporate Auditors of the Company to report on the matters concerning the execution of their duties.

     In the event that Officers and Employees of the Group detect any facts that are likely to cause significant damage to the Company in the course of business execution, they report the matters relating to such facts to the Corporate Auditors.

     The Internal Audit Office reports the execution of its business to the Corporate Auditors on a regular basis.

     The Risk Management Office, which is in charge of the whistle-blowing system, reports the status of whistle-blowing from the Officers and Employees of the Group to the Corporate Auditors of the Company on a regular basis.

9. System to ensure that persons who have conducted the whistle-blowing set forth in the preceding clause will not be treated unfavorably on the basis of such whistle-blowing

   • The Company prohibits treating Officers and Employees of the Group who conducted whistle-blowing to the Corporate Auditors of the Group unfavorably on the grounds of such whistle-blowing and ensures that all Officers and Employees of the Group are fully aware of it.

10. Matters concerning the policy for expenses and debts arising from the execution of duties by the Corporate Auditors

    • In the event that Corporate Auditors request that an advance payment of expenses or a settlement of debts be made in connection with the execution of their duties, the Company promptly settles such expenses and debts in accordance with the "Corporate Audit Standards."

      In the event that the Board of Corporate Auditors requests outside experts, such as attorneys and certified public accountants, to fulfill the duties of Corporate Auditors, the Company bears the cost thereof.

      The Board of Corporate Auditors budgets in advance for expenses deemed necessary to fulfill their duties.

11. Other systems to ensure effective audits by Corporate Auditors

    • The Corporate Auditors may request to work with attorneys at law, certified public accountants or other external specialists if they deem it necessary for the execution of their duties.

12. Overview of status of operation of systems for ensuring the appropriateness of the business

1. Initiatives regarding compliance

   The Company continuously conducts initiatives to comply with the relevant laws, regulations and the Articles of Incorporation by administering training on compliance to employees through internal training and meeting bodies.

   Additionally, through the ongoing operation of its "Compliance Hotline," which enables direct notification to outside contractors, the Company regularly makes reports to Corporate Auditors.

2. Initiatives regarding risk management

   Based on its "Risk Management Rules" and the "Risk Management Guidelines," the Company manages the risks for the entire Group exhaustively and comprehensively, and inspects the status of operation of those rules and guidelines through field audits by the Internal Audit Office.

3. Execution of duties of Directors

   In the fiscal year under review, 14 meetings of the Board of Directors were held to provide supervision in order to ensure that the execution of the duties of Directors and employees complied with relevant laws, regulations and the Articles of Incorporation.

   Additionally, the Board of Directors maintains its supervisory functions by continuously electing outside Directors.

4. Execution of duties of Corporate Auditors

In the fiscal year under review, 13 meetings of the Board of Corporate Auditors were held to audit the execution of the duties of Directors, including the construction and operational status of the internal control system.

Additionally, the Board of Corporate Auditors maintains the effectiveness of audits by verifying the status of execution of business by the Internal Audit Office and cooperating with certified public accountants and other outside experts.

The Company recognizes that it has to address purchases (or proposed acquisitions) intended to acquire large quantities of shares by carefully examining and determining the impact of said purchase acts (or proposed acquisitions) on the corporate value of the Company and common interests of shareholders based on the business activities, plans and past investment activity, etc. of the relevant purchaser.

This does not mean that concrete threats pertaining to the purchase of large quantities of the Company's shares have arisen at this time. Moreover, the Company does not predetermine concrete initiatives for cases where such purchasers appear (so-called "countermeasures against acquisitions").

The Company considers the return of profits to shareholders as an important management issue. Its basic policy is to allocate profits proportionately to performance, and to maintain payments at stable levels. The Company's basic policy is to pay dividends of surplus once each year at the end of the fiscal year. The organs deciding dividends of surplus are the General Meeting of Shareholders for year-end dividends and the Board of Directors for interim dividends.

Internal reserves are held to strengthen the corporate structure and in preparation for new store openings and future development of the business. The Company will make effective use of these funds to generate profits to be returned to shareholders in the future. Additionally, the Company will adequately conduct acquisitions of treasury shares while taking into consideration its financial position, stock price trends and other factors in order to improve its capital efficiency and execute flexible capital policies that accommodate changes in its operating environment.

Consolidated statements of changes in shareholders' equity (from May 1, 2024 to April 30, 2025)

(Million yen)

Notes to consolidated financial statements

1. Significant Matters as Basis for Preparing Consolidated Financial Statements

   1. Scope of consolidation

      1. Status of consolidated subsidiaries

         • Number of consolidated subsidiaries:

         • Names of consolidated subsidiaries:

           32

           AIN PHARMACIEZ INC. DAICHIKU Co., Ltd.

           AIN CHUO INC. AIN SHINSHU INC.

           PHARMACY Co. Ltd.

           A&M Co., Ltd.

           WHOLESALE STARS Co., Ltd. MEDIWEL Corp.

           AYURA LABORATORIES Inc.

           Francfranc Corporation

           Plus 21 other dispensing pharmacy business companies and one retail business company

      2. Status of unconsolidated subsidiaries

         • Names of major unconsolidated There are no major unconsolidated subsidiaries subsidiaries

         • Reason for exclusion from scope Unconsolidated subsidiaries have been excluded from the scope of

           of consolidation

   2. Application of equity method

      consolidation because they are of a small scale, have a minor impact on total assets, net sales, net profit or loss and retained earnings (the amount corresponding to the ownership interest), and are not of overall significance.

      1. Status of unconsolidated subsidiaries and associates accounted for using equity method No applicable matters are present.

      2. Status of unconsolidated subsidiaries and associates that are not accounted for using equity method

         • Name of major company, etc. There are no major unconsolidated subsidiaries and associates.

         • Reason for the non-application of the equity method

           Each company has been excluded from the application of the equity method because they are of a small scale, have a minor impact on consolidated net profit or loss and retained earnings (the amount corresponding to the ownership interest), and are not of overall significance.

      3. Special matters concerning equity method application procedures No applicable matters are present.

   3. Matters relating to changes in scope of consolidation and scope of equity method

      1. Changes in scope of consolidation

         13 dispensing pharmacy business companies and two retail business companies that became consolidated subsidiaries through purchase of shares during the current consolidated fiscal year have been added to the scope of consolidation from the consolidated fiscal year under review.

         In addition, 11 dispensing pharmacy business companies have been extinguished by mergers between subsidiaries, and have been excluded from the scope of consolidation.

      2. Change in scope of equity method No applicable matters are present.

   4. Fiscal year of consolidated subsidiaries

      Among the consolidated subsidiaries, the balance sheet date for AIN PHARMACIEZ INC., MEDIWEL Corp., AYURA LABORATORIES Inc., Francfranc Corporation, and Francfranc HONGKONG LIMITED is April

      30. In addition, two dispensing pharmacy business companies have a balance sheet date of the final day of February, one has a balance sheet date of June 30, one has a balance sheet date of December 31, and the balance sheet date of the other consolidated subsidiaries is March 31.

      In the preparation of the consolidated financial statements, non-consolidated financial statements that are as of the balance sheet date or that have been provisionally prepared in accordance with regular balance sheet have been used; adjustments have been made as necessary for consolidation in relation to any significant transactions that occurred in the period until the consolidated balance sheet date.

   5. Accounting policies

      1. Valuation basis and methods for significant assets

         1. Other securities

            • Securities other than shares, etc., that do not have a market price

            • Shares, etc., that do not have a market price

              Stated at fair value (valuation differences are booked directly in a separate component of net assets, and cost of securities sold is determined by the moving average method)

              Stated at cost determined by the moving average method

         2. Valuation basis and methods for inventories

         • Merchandise Cosmetic store: Mainly stated at cost determined by the retail method (balance sheet values are calculated using the book value write-down

           method based on decreased profitability)

           Interior furnishing shop: Mainly stated at cost determined by the moving-average method (balance sheet values are calculated using the book value write-down method based on decreased profitability)

         • Dispensing medicine Mainly stated at cost determined by the weighted-average method

           (balance sheet values are calculated using the book value write-down

           method based on decreased profitability)

         • Supplies Last purchase cost method

      2. Accounting methods for depreciation of significant depreciable assets

         1. Property, plant and equipment The declining balance method (however, for buildings [excluding

            (excluding leased assets)

         2. Intangible assets (excluding leased assets)

            facilities attached to buildings] acquired on or after April 1, 1998, as well as facilities attached to buildings and structures that were acquired on or after April 1, 2016, the straight-line method is applied)

            Straight-line method (software for internal use is amortized using the straight-line method over its useful life as internally determined (five years))

         3. Leased assets The straight-line method is applied assuming the lease period as the useful life without residual value.

         4. Long-term prepaid expenses The straight-line method

      3. Accounting policy for significant provisions

         1. Allowance for doubtful accounts

            To prepare for credit losses on receivables, an estimated uncollectable amount is provided at the amount estimated by either using the historical rate of credit loss for general receivables, or based on individual consideration of collectability for specific receivables such as highly doubtful receivables.

         2. Provision for bonuses For appropriation for the payment of bonuses to employees, of the

            estimated amount of bonuses to be paid, the amount estimated to cover

            the consolidated fiscal year under review is provided.

         3. Provision for bonuses for directors (and other officers)

         In preparation for expenditure on bonuses for directors (and other officers), the amount is recorded based on the estimated amount of bonuses to be paid for the consolidated fiscal year under review.

      4. Accounting policy for revenue and expenses

         The Company and consolidated subsidiaries recognize revenue at the time control of the promised goods or services is transferred to the customer, and at the amount that is expected to be received in exchange for such goods or services.

         1. Dispensing Pharmacy Business

            The Dispensing Pharmacy Business primarily consists of dispensing pharmacies, and revenue is recognized at the time a drug is delivered to the customer.

         2. Retail Business

         The Retail Business primarily consists of cosmetics stores and interior furnishing shops, and revenue is recognized at the time a product is delivered to the customer.

         However, in the provision of services under our customer loyalty program in which points are granted at the time of purchase, as our performance obligation will not be fulfilled for points granted by our company that do not end up being used by the customer, contract liabilities are recorded at the amount allocated to the transaction price based on the stand-alone selling price, which has been set in consideration of future expiration prospects and usage rates, etc., performance is considered satisfied when the points are used or expired, and revenue is then recognized accordingly.

      5. Standards for the translation of important foreign currency-based assets or liabilities into Japanese yen

         Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the spot exchange rate prevailing as of the consolidated balance sheet date, and translation differences are accounted for as profit or loss.

         Moreover, assets and liabilities of overseas subsidiaries are translated into Japanese yen at the spot exchange rate prevailing as of the balance sheet date, and their revenue and expenses are translated into Japanese yen at the average exchange rate during the period. Translation differences are included in foreign currency translation adjustment in net assets.

      6. Significant hedge accounting methods

         1. Hedge accounting methods Mainly the deferral hedge accounting is applied.

            In cases of forward exchange contracts that satisfy the requirements for the furiate-shori (designated exceptional hedge accounting under Japanese GAAP), furiate-shori is applied.

         2. Hedging instrument and hedged item

            Hedging instrument: forward exchange contracts Hedged item: foreign currency-based trade payable

         3. Hedging policy Hedges are used for the objective of avoiding the risk of future

            fluctuations in exchange rates and interest rates, and we do not engage

            in speculative transactions.

         4. Method for assessing the hedge effectiveness

         As the key terms related to the hedged item and the hedging instrument are identical and the hedge is highly effective, the determination of hedge effectiveness is omitted.

      7. Other significant matters for preparing consolidated financial statements

         1. Accounting policy for retirement benefit liability

            To prepare for payment of retirement benefits for employees, projected retirement benefit obligations and plan assets at the end of the fiscal year are recorded based on deemed either accrued or realized amount as of the end of the fiscal year.

            It should be noted that in the calculation of retirement benefit obligations, expected retirement benefits are attributed to the period up to the consolidated fiscal year under review on a benefit formula basis.

            Past service cost is amortized using the straight-line method over a certain number of years (six years) within the average remaining service years of employees when incurred.

            Actuarial gains and losses are amortized using the declining balance method over a certain number of years (six years) within the average remaining service years of employees when incurred in each fiscal year, from the fiscal year following the accrual of each gain or loss.

            Unrecognized actuarial gains and losses and unrecognized past service costs are recorded, after adjusting for tax effects, in "Remeasurements of defined benefit plans" under accumulated other comprehensive income in net assets.

         2. Accounting method and period for amortization of goodwill

         The amortization of goodwill is performed in equal installments over a period of 5 to 20 years, upon having estimated the period during which the investment effect will be realized.

2. Notes on changes in accounting policies

   (Application of Accounting Standard for Corporate Tax, Inhabitant Tax and Enterprise Tax, etc.)

   The Company has applied the "Accounting Standard for Corporate Tax, Inhabitant Tax and Enterprise Tax, etc." (ASBJ Statement No. 27, October 28, 2022) from the beginning of the fiscal year under review.

   This does not have any impact on the consolidated financial statements.

3. Notes on changes in presentation (Consolidated Balance Sheet)

   "Asset retirement obligations," which was included in "Other" under "Non-current liabilities" up until the previous fiscal year, has been presented as a separate item from the fiscal year under review due to an increase in financial materiality.

   It should be noted that "Asset retirement obligations" for the previous fiscal year were ¥2,001 million. (Consolidated statement of income)

   "Subsidy income," which was included in "Other" under "Non-operating income" up until the previous fiscal year, and "Gain on sale of businesses," which was included in "Other" under "Extraordinary income," have been presented as separate items from the fiscal year under review due to their increases in financial materiality.

   It should be noted that the "Subsidy income" for the previous fiscal year was ¥298 million, and the "Gain on sale of businesses" was ¥7 million.

4. Notes on accounting estimates

   1. Assessment of intangible assets (trademark rights) associated with acquisition of shares, etc. in Francfranc Corporation and period of amortization of goodwill

      1. Amount recorded in the consolidated financial statements for the consolidated fiscal year under review

         Item	Amount
         Goodwill	¥39,685 million
         Intangible assets (trademark rights)	¥4,123 million

         As stated in "Notes on business combination" under "Other notes," the period of amortization of the goodwill is estimated to be 20 years.

      2. Information on the content of accounting estimates relating to identified items

         1. Calculation method

            The Group recognizes the excess earning power expected at the time of acquisition as goodwill for the respective target company, and groups assets by target company.

            When allocating the acquisition cost of shares, etc. in Francfranc, the intangible asset (trademark rights) portion of identifiable assets is calculated using the income approach method (relief from royalty method) that incorporates business plans formulated by management, royalty rates, and other material assumptions. The amortization period for goodwill is determined by the period for which excess earnings power arising from the acquisition of Francfranc shares, etc. is predicted to continue, based on business plans and the outlook for the market environment.

         2. Main assumptions

            The valuation of these intangible assets of Francfranc (trademark rights) takes into account business plans formulated by management, royalty rates, and other main assumptions. In addition, the main assumption for estimates of the amortization period for goodwill related to Francfranc is the period for which excess earnings power is predicted to continue, based on business plans and the outlook for the market environment.

         3. Impact on the consolidated financial statements for the next consolidated fiscal year

         The main assumptions related to estimating future cash flows are subject to a high level of uncertainty, and actual performance may differ from the forecast values. If a deviation from a forecast value occurs, an impairment loss may be incurred in the following consolidated fiscal year.

   2. Impairment of goodwill (excluding store non-current assets)

      1. Amount recorded in the consolidated financial statements for the consolidated fiscal year under review

         Item	Amount
         Goodwill (excluding store non-current assets)	¥74,039 million
         Impairment losses (relating to the goodwill above)	¥93 million

         The amount of goodwill (excluding store non-current assets) above includes goodwill associated with the acquisition of the shares, etc. of Francfranc Corporation.

      2. Information on the content of accounting estimates relating to identified items

         1. Calculation method

            The Group recognizes the excess earning power expected at the time of acquisition as goodwill for the respective target company, and groups assets by target company.

            In cases where there are signs of impairment for each asset group, and the total of the non-discounted future cash flows corresponding to the remaining amortization period of the goodwill to be obtained from that asset group is less than the carrying amount, an impairment loss is recognized, the value in use is calculated using the discounted present value of the future cash flows, the book value is reduced to said value in use, and is recorded as an impairment loss.

         2. Main assumptions

            Estimations of future cash flows are made based on budgets that have been approved by the Board of Directors and planned figures that have been prepared based on operating profit forecasts at the time of acquisition, with the main assumptions being the number of prescriptions and prescription prices for the Dispensing Pharmacy Business, and the number of customers and average customer spend for the Retail Business.

         3. Impact on the consolidated financial statements for the next consolidated fiscal year

         The main assumptions related to estimating future cash flows are subject to a high level of uncertainty, and actual performance may differ from the forecast values. If a deviation from a forecast value occurs, an impairment loss may be incurred in the following consolidated fiscal year.

   3. Impairment of store non-current assets

      1. Amount recorded in the consolidated financial statements for the consolidated fiscal year under review

         Item	Amount
         Property, plant and equipment	¥43,112 million
         Intangible assets	¥13,519 million
         Investments and other assets (long-term prepaid expenses)	¥6,262 million
         Impairment losses (relating to store non-current assets)	¥1,711 million

      2. Information on the content of accounting estimates relating to identified items

         1. Calculation method

            The Group has made stores, which are business assets, its basic unit as the smallest unit that generates cash flow, and groups assets for lease and idle assets by property unit. Indications of impairment include stores for which profits from operating activities are consistently negative, stores at which changes have been made in the scope or method of use that significantly reduces the recoverable amount, and idle asset groups for which the fair value has declined significantly.

            If there are signs of impairment for an asset or asset group, and the total of the non-discounted future cash flows to be derived from the asset or asset group is less than its carrying amount, the carrying amount is reduced to its recoverable amount and this reduction is recorded as an impairment loss.

         2. Main assumptions

            Estimations of future cash flows are made based on budgets that have been approved by the Board of Directors, with the main assumptions for the Dispensing Pharmacy Business being the number of prescriptions and prescription prices, and the main assumptions for the Retail Business being the number of customers and average customer spend.

         3. Impact on the consolidated financial statements for the next consolidated fiscal year

         The main assumptions related to estimating future cash flows are subject to a high level of uncertainty, and actual performance may differ from the forecast values. If a deviation from a forecast value occurs, an impairment loss may be incurred in the following consolidated fiscal year.

5. Notes on changes to accounting estimates No applicable matters are present.

6. Notes on consolidated balance sheet

   Accumulated depreciation of property, plant and equipment ¥39,546 million

7. Notes to consolidated statements of changes in shareholders' equity

   1. Total number of issued shares

      Class of shares	Number of shares at beginning of the consolidated fiscal year under review	Increase	Decrease	Number of shares at the end of the consolidated fiscal year under review
      Common shares	35,428 thousand shares	- thousand shares	- thousand shares	35,428 thousand shares

   2. Number of treasury shares

      Class of shares	Number of shares at beginning of the consolidated fiscal year under review	Increase	Decrease	Number of shares at the end of the consolidated fiscal year under review
      Common shares	433 thousand shares	0 thousand shares	79 thousand shares	354 thousand shares

      (Note) The increase of 0 thousand shares in treasury shares in common shares was due to the purchase of 0 thousand shares of less than one minimum trading unit. The decrease of 79,000 shares of common shares in treasury shares was due to the disposal of 2,000 shares by the grant of restricted stock compensation and the disposal of 76,000 shares through sales to the Employee Shareholders Association. The number of treasury shares as of the end of the consolidated fiscal year under review includes the Company's shares (257,000 shares) held by Custody Bank of Japan, Ltd. (Trust Account E) related to the Stock-Based Benefit Trust (Employee Shareholders Association Purchase Type).

   3. Dividends of surplus

      1. Dividends paid, etc.

         Dividends resolved at the 55th Ordinary General Meeting of Shareholders held on July 30, 2024

         • Total dividends ¥2,826 million

         • Dividends per share ¥80

         • Record date April 30, 2024

         • Effective date July 31, 2024

           (Note) The total amount of dividends based on the resolution of the 55th Ordinary General Meeting of Shareholders held on July 30, 2024 includes a dividend of ¥26 million to Custody Bank of Japan, Ltd. (Trust Account E).

      2. Dividends whose effective date falls in the fiscal year following the fiscal year of the record date

         The following will be submitted to the 56th Ordinary General Meeting of Shareholders that is to be held on July 30, 2025.

         • Total dividends ¥2,826 million

         • Dividends per share ¥80

         • Record date April 30, 2025

         • Effective date July 31, 2025

           (Note) The total amount of dividends based on the resolution of the 56th Ordinary General Meeting of Shareholders held on July 30, 2025 includes a dividend of ¥20 million to Custody Bank of Japan, Ltd. (Trust Account E).

8. Notes on financial instruments

   1. Status of financial instruments

      1. Policy on financial instruments

         The Group is promoting business expansion through the opening of dispensing pharmacies, cosmetics stores and interior furnishing shops, as well as through M&A.

         The funds required for opening new stores are primarily raised from operating cash flow, however, in order to secure extraordinary funds for M&A funds and other such purposes, we raise funds through bank borrowings and, where necessary, public offerings of new shares, and manage these funds with highly liquid financial assets.

      2. Details of financial instruments and risks associated with such financial instruments

         Almost all of the accounts receivable, which are trade receivables, are receivables from the National Health Insurance Organization and the Health Insurance Claims Review & Reimbursement Services in the form of dispensing fees, and in addition, almost all of the accounts receivable are collected within a short period of time, so there are no particular risks, etc.

         Almost all of the investment securities are shares in companies with which the company has business relationships, and are exposed to the risk of fluctuations in market prices.

         Leasehold and guarantee deposits are mainly segregated deposits entrusted to lessors of dispensing pharmacies, cosmetics stores and interior furnishing shops, and are exposed to the credit risk of the respective lessor. Additionally, some of these involve foreign currency transactions related to the import of goods, which are subject to the effects of exchange rate fluctuations. However, the exchange rate fluctuation risk is hedged through forward exchange contracts.

         Most accounts payable, which are trade payables, have a payment due date of within three months.

         Lease liabilities related to finance lease transactions, which are included in other borrowings and liabilities, are mainly intended to raise funds for working capital and capital expenditure.

      3. Risk management system for financial instruments

         1. Management of credit risk (risk relating to contractual defaults, etc., by trading partners)

            The main trade receivables of the company are held against the National Health Insurance Organization and the Health Insurance Claims Review & Reimbursement Services in the form of dispensing fees, and in addition, almost all of the accounts receivable are collected within a short period of time, so no particular management is performed for such risk.

            When lending or holding bonds with the purpose of holding to maturity, the investment recipient and investment amount, etc., are carefully decided after internal review based on the Loan Investment Standards and Securities Investment Standards; in addition, after the start of investment, the investment target's situation is regularly monitored in order to identify and mitigate any concerns about recovery at an early stage.

            For leasehold and guarantee deposits, credit management is performed through credit checks, etc., at the time of contracting and at regular intervals thereafter, and the risk of the non-performance of contracts, etc., is managed accordingly.

         2. Management of market risk (risk of fluctuations in exchange rates and interest rates, etc.)

            The Group mainly takes out long-term borrowings in order to reduce the risk of fluctuations in interest payments on borrowings.

            In regard to investment securities, for unlisted issuing companies, their financial status, etc., is regularly assessed and for listed companies, our holdings are continuously reviewed taking into account market conditions and relationships with trading partner companies.

            The exchange rate fluctuation risk associated with foreign currency-denominated purchase transactions is hedged by using forward exchange contracts. The execution and management of derivative transactions are carried out by the department in charge in accordance with internal regulations and with the approval of the authorized decision-maker.

         3. Management of liquidity risk related to fund raising (risk of not being able to make payments on payment due dates)

         The Group manages liquidity risk by creating a cash flow plan based on the annual capital expenditure budget and updating the actual performance and plans on a monthly basis.

         In addition, the Group aims to maintain a certain level of liquidity in order to be able to flexibly respond to extraordinary capital needs arising from M&A, etc.

   2. Fair values of financial instruments

      Carrying amounts, fair values and the differences between them in the consolidated balance sheet on April 30, 2025 were as follows. It should be noted that shares, etc., that do not have a market price are not included in the table below. In addition, notes have been omitted for cash, and notes have been omitted for deposits, accounts receivable - trade, accounts receivable, accounts payable - trade, and deposits as they are settled within short periods and their fair values are approximate to their book values.

      	Carrying amount (Million yen)	Fair value (Million yen)	Difference (Million yen)
      	994 31,091 (54)	994	-
      	31,037	28,657	(2,380)
      Total assets	32,031	29,651	(2,380)
      	12,151	12,130	(21)
      (2) Long-term borrowings	26,469	26,042	(427)
      Total liabilities	38,621	38,172	(448)
      Derivatives (*2)	[193]	[193]	-

      1. Investment securities

      2. Leasehold and guarantee deposits Allowance for doubtful accounts(*1)

      1. Short-term borrowings (including current portion of long-term borrowings)

      (*1) Excludes the allowance for doubtful accounts that is separately recorded in leasehold and guarantee deposits

      (*2) Net receivables and net payables arising from derivative transactions are presented on a net basis, and items that result in a net payable are indicated in [ ].

      (Note 1) Shares, etc., that do not have a market price

      Category	Carrying amount (Million yen)
      Unlisted shares	1,891

      These are not included in "Assets (1) Investment securities" above.

      Category	Carrying amount (Million yen)
      Investments in limited liability investment partnerships	347

      In addition, investments in partnerships and other equivalent business entities in which the amount equivalent to the equity interest is recorded at net value are not included in shares, etc., that do not have a market price. The carrying amounts of such financial instruments recorded on the consolidated balance sheet are as follows.

      (Note 2) Expected redemption amounts of monetary claims and securities with maturity after the consolidated balance sheet date

      	Within 1 year (Million yen)	After 1 year through 5 years (Million yen)	After 5 years through 10 years (Million yen)	After 10 years (Million yen)
      (1) Investment securities	-	-	-	-
      (2) Leasehold and guarantee deposits	6,956	7,674	7,157	9,303

      (Note 3) Repayment schedule of borrowings after the consolidated balance sheet date

      	Within 1 year (Million yen)	After 1 year through 5 years (Million yen)	After 5 years through 10 years (Million yen)	After 10 years (Million yen)
      Short-term borrowings (including (1) current portion of long-term borrowings)	12,151	-	-	-
      (2) Long-term borrowings	-	20,174	6,295	-

   3. Breakdown, etc., of financial instruments by fair value level

      The fair values of financial instruments are classified into the following three levels in accordance with observability and the significance of the inputs used to determine the fair values.

      Level 1 fair value: Fair value calculated based on quoted (unadjusted) prices in active markets for the same assets or liabilities

      Level 2 fair value: Fair value calculated using directly or indirectly observable inputs other than Level 1 inputs

      Level 3 fair value: Fair value calculated using significant unobservable inputs

      If multiple inputs that have a significant impact on the calculation of fair value are used, the fair value is classed as the level to which each of those inputs belongs that has the lowest priority level in the calculation of fair value.

      1. Financial assets and financial liabilities recorded on the consolidated balance sheet at carrying amount

         Category	Fair value (Million yen)
         	Level 1	Level 2	Level 3	Total
         Investment securities Shares	994	-	-	994
         Total assets	994	-	-	994
         Derivatives	-	[193]	-	[193]

      2. Financial assets and financial liabilities not recorded on the consolidated balance sheet at carrying amount

         Category	Fair value (Million yen)
         	Level 1	Level 2	Level 3	Total
         (1) Investment securities	-	-	-	-
         (2) Leasehold and guarantee deposits	-	28,657	-	28,657
         Total assets	-	28,657	-	28,657
         Short-term borrowings (including current portion of long-term borrowings)	-	12,130	-	12,130
         Long-term borrowings	-	26,042	-	26,042
         Total liabilities	-	38,172	-	38,172

         Note: Explanation of valuation techniques and inputs used in the determination of fair value Investment securities

         Investment securities for which quoted prices in an active market can be used are classified as Level 1 fair value.

         Leasehold and guarantee deposits

         The fair values of leasehold and guarantee deposits are calculated based on the present value of the amounts to be repaid based on the contract period, discounted based on appropriate interest rates such as government bond yield rates, and are classified as Level 2 fair value.

         Short-term borrowings, long-term borrowings

         For short-term borrowings and long-term borrowings, fair value is calculated by discounting the total of principal and interest at an interest rate that would be charged for similar new loans, and such borrowings are classified as Level 2 fair value.

         Derivatives

         The derivatives is measured by the discounted cash flow method using interest rates, exchange rates and other observable inputs, and is classified as Level 2.

9. Notes on derivatives

   1. Derivatives of which hedge accounting is not applied No applicable matters are present.

   2. Derivatives of which hedge accounting is applied

      Hedge accounting methods	Type of derivatives, etc.	Main hedged item	Contract amount, etc. (Million yen)	Contract amount, etc. of over one year	Fair value (Million yen)
      Forward exchange contracts for which the furiate-shori is applied	Forward exchange contracts Purchased U.S. dollars	Accounts payable -trade	5,185	-	(192)
      Forward exchange contracts for which the furiate-shori is applied	Forward exchange contracts Purchased HK dollars	Accounts payable -trade	44	-	(0)

10. Notes on revenue recognition

    1. Information on revenue from contracts with customers

       	Reportable segment (Million yen)			Amount (Million yen)
       	Dispensing Pharmacy Business	Retail Business	Other businesses
       Dispensing pharmacies	380,302	-	-	380,302
       Cosmetic stores	-	36,020	-	36,020
       Interior furnishing shop	-	25,021	-	25,021
       Retail store business	-	-	8,150	8,150
       Other	4,480	-	1,935	6,416
       Revenue from contracts with customers	384,783	61,041	10,086	455,911
       Other revenue (Note)	-	-	893	893
       Sales to third parties	384,783	61,041	10,979	456,804

       Notes: 1 Other revenue includes lease revenue based on the "Accounting Standard for Lease Transactions" (ASBJ Statement No. 13, March 30, 2007).

       2 Effective from the current consolidated fiscal year, the name "cosmetics and drug stores" has been changed to "cosmetic stores."

    2. Information serving as basis for understanding revenue from contracts with customers

       The information serving as basis for understanding revenue is described in "1. Significant Matters as Basis for Preparing Consolidated Financial Statements, (5) Accounting policies, (iv) Accounting policy for revenue and expenses" in the notes to consolidated financial statements.

    3. Information concerning the relationship between the fulfilling of performance obligations under contracts with customers and the cash flows arising from those contracts, as well as the amount and timing of revenue expected to be recognized in the next consolidated fiscal year and thereafter from contracts with customers that were in effect as of the end of the consolidated fiscal year under review

       1. Balance, etc., of contract liabilities

          	Consolidated Fiscal Year Under Review (Million yen)
          	Beginning balance	Ending balance
          Receivables arising from contracts with customers	15,851	22,294
          Contract liabilities	465	534

          Receivables arising from contracts with customers are included in "Accounts receivable - trade" on the consolidated balance sheet.

          Contract liabilities primarily relate to customer loyalty programs in which points are granted at the time of sale. Contract liabilities are recorded at the time the points are granted, and the performance obligation for these is deemed to have been met, and the contract liability is reversed, at the time the points are used or have expired.

          The amount of revenue recognized during the consolidated fiscal year under review that was included in the contract liabilities balance as of the beginning of the fiscal year was ¥465 million.

       2. Transaction price allocated to outstanding performance obligations

          As the company and our consolidated subsidiaries have no significant transactions with contract periods that are initially expected to exceed one year, the practical expedient has been applied and the disclosure of information concerning outstanding performance obligations has been omitted.

          In addition, there is no significant amount of consideration arising from contracts with customers that is not included in transaction price.

11. Notes on per share information

    1. Net assets per share ¥4,063.53

    2. Earnings per share ¥264.32

       (Note) In calculating net assets per share, the Company's shares held by the Custody Bank of Japan, Ltd. (Trust Account E) have been included in treasury shares, which have been deducted from the total number of shares issued as of the end of the fiscal year (257,000 shares in the fiscal year under review). In addition, in earnings per share, the shares deducted from the calculation of the average number of shares during the period have been included in treasury shares (291,000 shares in the fiscal year under review).

12. Notes on significant subsequent events (Business combination through acquisition)

    On May 28, 2025, the Company executed a share transfer agreement for the acquisition of all shares of NSSK-WW Co., Ltd. and its conversion into a subsidiary, making the Sakura Pharmacy Group a subsidiary.

    1. Overview of business combination

       1. Name and business of acquired company

          Name of acquired company: NSSK-WW Co., Ltd.

          Details of business: A holding company (the wholly owned holding company of NSSK-W Co., Ltd.)

       2. Main reasons for the business combination

          The Group operates a nationwide chain of dispensing pharmacies. Together with Group companies, the Company is actively opening new dispensing pharmacies and utilizing M&A to expand the business. The Company is also working to provide community-focused healthcare services in all regions of Japan, such as through home-based dispensing and continuous monitoring of patient medication in partnership with medical institutions, and by enhancing the primary care capabilities of its pharmacists and dispensing pharmacies.

          The Sakura Pharmacy Group, the shares of which the Company is acquiring, has developed a dispensing pharmacy business under the "Sakura Pharmacy Group" brand and is one of the leading companies in the industry, with approximately 800 stores located mainly in densely populated areas such as the Tokyo metropolitan area (Tokyo, Kanagawa, Chiba, Saitama), the Kansai region (Osaka, Hyogo), and the Tokai region (Aichi, Shizuoka).

          The addition of the Sakura Pharmacy Group will result in the number of dispensing pharmacy stores in the Group exceeding 2,000, thereby enabling a further expansion of our store network. By integrating the business expertise of both parties and enhancing services for patients and local healthcare, we are aiming to strengthen our role as a local healthcare infrastructure provider across Japan and to further enhance the corporate value of the Group.

       3. Business combination date August 2025 (scheduled)

       4. Legal form of business combination Acquisition of shares

       5. Name of company after acquisition No change

       6. Share of voting rights acquired 100%

       7. Main basis for determining company has been acquired

          On the grounds that the Company will acquire the shares in exchange for cash.

    2. Breakdown of acquisition cost and payments

       NSSK-WW Co., Ltd. Common Shares ¥59,100 million

       * The final acquisition cost is subject to change by the price adjustments prescribed in the share transfer

       agreement. Advisory fees, etc. are not included as they have not yet been determined.

13. Other notes

    (Additional Information)

    (Transactions in which shares of the company are issued to employees, etc., through a trust)

    The company engages in transactions for the issuance of shares of the company to an employee stock ownership association through a trust with the objective of enhancing employee benefits and providing incentives for improving the corporate value of the company.

    1. Overview of transactions

       The company introduced the "Stock-Based Benefit Trust (Employee Shareholders Association Purchase Type)" (hereinafter referred to as "the Plan") in April 2024.

       At the time of the introduction of the Plan, the company entered into a Stock-Based Benefit Trust (Employee Shareholders Association Purchase Type) Agreement (the "Trust Agreement") with the company as the trustor and Mizuho Trust & Banking Co., Ltd. as the trustee (hereinafter referred to as the "Trustee") (the trust established based on the Trust Agreement is hereinafter referred to as "the Trust"). In addition, the Trustee has entered into an agreement with the Custody Bank of Japan, Ltd., to re-entrust the management of trust assets such as securities to the Custody Bank of Japan Ltd., as the sub-trustee.

       The Custody Bank of Japan, Ltd., will acquire a lump sum of shares of the company in advance for Trust Account E equivalent to the number of the Company's shares that are expected to be purchased by the "AIN HOLDINGS Employee Shareholders Association" (the "Shareholders Association") over a period of five years from the establishment of the trust, and thereafter will sell the shares of the company at the time the Shareholders Association purchases shares. If an amount equivalent to the gains on sales of shares is accumulated in the trust assets of the Trust via the sale of the Company's shares up until the time of the Trust's termination, this cash shall be distributed as residual assets to the members of the Shareholders Association (employees) who satisfy the beneficiary eligibility requirements.

       In addition, since the Company provides a guarantee when the Trustee takes out a loan in order for the Trust E Account to acquire the Company's shares, in a case in which the Trustee has an outstanding loan balance equal to the loss on the sale of shares as of the time of Trust's termination due to a drop in the Company's share price or the like, the Company will pay off the outstanding loan balance pursuant to the guarantee agreements.

    2. Shares of the company remaining in the trust

       The shares of the company remaining in the trust are recorded as treasury shares in the net assets section at acquisition cost in the trust (incidental expenses are excluded). The carrying amount and number of such treasury shares for the consolidated fiscal year under review were ¥1,422 million and 257,000 shares, respectively.

    3. Carrying amount of borrowings recorded through the application of the gross method Consolidated Fiscal Year Under Review: ¥1,523 million

(Notes on business combination)

(Business combination through acquisition)

At a meeting of the Board of Directors held on July 3, 2024, the Company resolved the acquisition of all the shares in Francfranc Corporation (head office: Minato-ku, Tokyo; "Francfranc") to make it a subsidiary, a process that was completed on August 20, 2024. In addition, on August 21, 2024, the Company concluded an absorption-type split agreement with an effective date of October 1, 2024, whereby the interior goods and sundries retail sales business of Francfranc, a wholly owned subsidiary of the Company, was split off and taken over by AIN PHARMACIEZ INC., also a wholly owned subsidiary of the Company.

1. Overview of business combination

   1. Name and business of acquired company

      Name of acquired company: Francfranc Corporation

      Details of business: Planning, development and sales of interior goods and sundries

   2. Main reasons for the business combination

      The Group has two core businesses - the Dispensing Pharmacy Business and the Retail Business -through which it seeks to play a key role in regional communities.

      In the Dispensing Pharmacy Business, the Group operates a chain of dispensing pharmacies nationwide. Together with Group companies, the Company is actively opening new dispensing pharmacies and utilizing M&A to expand the business. The Company is also working to provide community-focused healthcare services in all regions of Japan, such as through home-based dispensing and continuous monitoring of patient medication in partnership with medical institutions, and by enhancing the primary care capabilities of its pharmacists and dispensing pharmacies.

      In the Retail Business, the Company operates the chain of AINZ & TULPE cosmetic stores. AINZ & TULPE aims to be a unique and comprehensive beauty retailer that satisfies customer needs with an always-fresh lineup of cosmetic and beauty products through stores offering a fun shopping experience. The brand is targeting further growth and aims to clearly differentiate itself from other beauty retailers by means of a lineup of original products focused on cosmetics.

      Francfranc became a subsidiary after the acquisition of all its shares by the Company. Since its establishment, Francfranc has operated a business selling interior goods and sundries aimed at a wide range of customers, mainly women in their 20s and 30s, centered on the Francfranc flagship brand. Through the operation of 157 stores in Japan, 8 stores overseas (as of April 30, 2025), and ecommerce sales, Francfranc offers urban and sophisticated lifestyle proposals. AINZ & TULPE and Francfranc have stores in similar markets and target customer segments with similar values, but they are complementary in terms of product lineups and retail categories. The Company believes that Francfranc's addition to the Group will generate synergies by leveraging the strengths of both companies. Specifically, the Company envisages the following synergies.

      1. Cross merchandising

         With strengths in different product categories, AINZ & TULPE and Francfranc stores will be able to display their respective in-house products, offering a wider choice to customers, improving customer satisfaction and increasing sales per customer.

      2. Strategic store development

         AINZ & TULPE and Francfranc stores are compatible, as they are located in station buildings and commercial facilities, primarily in major cities, and target similar customer segments. This offers further opportunities for business expansion through the opening of a wider range of different store formats, such as strategic joint stores in large commercial facilities.

      3. Development of appealing products using shared know-how

         In line with their mission of offering lifestyle proposals, AINZ & TULPE and Francfranc have both focused on developing products that influence customers' values. By sharing product development know-how, both companies will be able to create products that offer even higher levels of satisfaction. The Company believes that combining the complementary strengths of both companies in this way will improve customer service and enhance the corporate value of the Group.

   3. Business combination date August 20, 2024

   4. Legal form of business combination Acquisition of shares

   5. Name of company after acquisition No change

   6. Ratio of voting rights acquired 100%

   7. Main basis for determining company has been acquired

      On the grounds that the Company will acquire the shares in exchange for cash.

2. Period of the acquired company's results included in the consolidated statement of income From September 1, 2024 to April 30, 2025

3. Breakdown of acquisition cost and payments

   Consideration for acquisition Cash ¥49,975 million

   Expenses directly related to the acquisition Cash ¥149 million Acquisition cost ¥50,125 million

4. Details and amount of major acquisition-related expenses Advisory fees, etc. ¥149 million

5. Amount of goodwill recognized, the reason for recognition, and the method and period of amortization

   1. Amount of goodwill recognized

      ¥41,048 million

   2. Reason for recognition

      Mainly due to the excess earning power expected to be driven by the future expansion of the business.

   3. Accounting method and period for amortization Straight-line method over 20 years

6. Amounts of assets and liabilities assumed on the date of business combination and their main breakdown Current assets ¥15,019 million

   Non-current assets ¥11,154 million

   Total assets ¥26,174 million

   Current liabilities ¥8,897 million

   Non-current liabilities ¥8,349 million

   Total liabilities ¥17,246 million

7. Estimated amount of impact on the consolidated statement of income for the fiscal year under review, assuming the business combination had been completed on the start date of the fiscal year, and method of calculating the estimated amount

Net sales ¥16,362 million

Operating profit ¥1,612 million

Ordinary profit ¥1,563 million

Profit before income taxes ¥1,182 million

Profit attributable to owners of parent ¥876 million Earnings per share ¥25.02

Calculation method of estimated amount

The estimated amount of impact is calculated by taking the net sales and profit and loss information of the said company for the period from May 1, 2024 to August 31, 2024, and adding or subtracting to that the amortization of goodwill and trademark rights, assuming that the goodwill and trademark rights recognized at the time of the business combination arose on the start date of the fiscal year.

The calculation of these estimated amounts has not undergone an audit certification.

(As of April 30, 2025)

(Million yen)