Financial Results 2Q （July 1, 2025 - September 30, 2025）

November 11, 2025

Company name: FUJI OIL CO., LTD. Listing: Tokyo Stock Exchange

Securities code: 2607

URL: https://www.fujioil.co.jp/en/ Representative: Tatsuji Omori, President and CEO

Inquiries: Masaaki Nakanishi, Deputy General Manager, Finance and Accounting Headquarters Telephone: +81-(0)3-4477-5416

Scheduled date to commence dividend payments: December 10, 2025 Preparation of supplementary material on financial results: Yes

Holding of financial results briefing: Yes (for institutional investors and analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the six months ended September 30, 2025 (April 1, 2025 - September 30, 2025)
   1. Consolidated operating results (cumulative)

      (Percentages indicate year-on-year changes.)

      	Net sales		Business profit		Operating profit		Profit before tax		Profit
      Six months ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      September 30, 2025	375,696	18.9	15,369	131.6	13,886	132.5	11,179	198.0	8,653	203.7
      September 30, 2024	315,957	-	6,635	-	5,971	-	3,751	-	2,849	-

      	Profit attributable to owners of parent		Total comprehensive income		Basic earnings per share	Diluted earnings per share
      Six months ended	Millions of yen	%	Millions of yen	% - -	Yen	Yen
      September 30, 2025	8,539	325.0	14,529		99.32	-
      September 30, 2024	2,009	-	△8,262		23.37	-

      (Note) Business Profit is calculated by adding share of profit (loss) of investments accounted for using equity method to operating profit and excluding gains and losses due to non-recurring factors.

   2. Consolidated financial position

      	Total assets	Total equity	Equity attributable to owners of parent	Ratio of equity attributable to owners of parent to total assets
      As of	Millions of yen	Millions of yen	Millions of yen	%
      September 30, 2025	650,437	223,187	219,320	33.7
      March 31, 2025	597,076	210,926	206,923	34.7

2. Cash dividends

   	Annual dividends per share
   	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
   Fiscal year ended March 31, 2025 Fiscal year ending March 31, 2026	Yen - -	Yen 26.00 26.00	Yen -	Yen 26.00	Yen 52.00
   Fiscal year ending March 31, 2026 (Forecast)			-	26.00	52.00

   (Note) Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated forecasts for the fiscal year ending March 31, 2026 (April 1, 2025 - March 31, 2026)

(Percentages indicate year-on-year changes.)

(Note) Revisions to the consolidated forecast most recently announced: None

1. Significant changes in the scope of consolidation during the period: Yes New company: 2 companies (PROVENCE HUILES S.A.S, etc.)

   Excluded company: 1 company (The former FUJI OIL CO., LTD.)

2. Changes in accounting policies, changes in accounting estimates, and restatement

   1. Changes in accounting policies required by IFRS: None

   2. Changes in accounting policies due to other reasons: None

   3. Changes in accounting estimates: None

3. Number of issued shares (common shares)

   1. Total number of issued shares at the end of the period (including treasury shares)

      As of September 30, 2025	87,569,383 shares
      As of March 31, 2025	87,569,383 shares

   2. Number of treasury shares at the end of the period

      As of September 30, 2025	1,586,816 shares
      As of March 31, 2025	1,595,432 shares

   3. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

• Semi-annual financial results reports are exempt from review conducted by certified public accountants or an audit firm.

• Explanations and other special notes concerning the appropriate use of business results forecasts

  The forward-looking statements included in this document are based on the information available at the time of this announcement. The actual results may differ from the forecasts in this report due to various factors.

  The Group has voluntarily adopted International Financial Reporting Standards (IFRS) from the first quarter of the fiscal year ending March 31, 2026, and figures for the previous fiscal year have been reclassified to IFRS basis. Please refer to "2. Semi-annual Consolidated Financial Statements (First-Time Adoption of IFRS) (Accompanying Materials)" for the differences of the consolidated financial figures between Japanese Generally Accepted Accounting Principles (hereinafter, "Japanese GAAP") and IFRS.

• How to access supplementary material on financial results

  Supplementary material on financial results is disclosed in Investor Relation on our company's website on the same day.

  Accompanying Materials - Contents

  1. Qualitative Information on Results for the Six Months Ended September 30, 2025 2

     1. Details of Operating Results 2

     2. Details of Financial Position 3

     3. Information on the Future Outlook, Including Consolidated Business Results Forecasts 4

  2. Semi-annual Consolidated Financial Statements 5

     1. Semi-annual Consolidated Statements of Financial Position 5

     2. Semi-annual Consolidated Statements of Income and Comprehensive Income 7

        Semi-annual Consolidated Statements of Income 7

        Semi-annual Consolidated Statements of Comprehensive Income 8

     3. Semi-annual Consolidated Statements of Changes in Equity 9

     4. Semi-annual Consolidated Statements of Cash flows 10

     5. Notes to Semi-annual Consolidated Financial Statements 12

(Notes Relating to Assumptions for the Going Concern) 12

(Segment Information) 12

(First-Time Adoption of IFRS) 14

1. Qualitative Information on Results for the Six Months Ended September 30, 2025
   1. Details of Operating Results

      Operating results for the first six months of the current consolidated fiscal year were as follows.

      	Net sales	Business profit	Profit before tax	Profit attributable to owners of parent
      Six months ended September 30, 2025 September 30, 2024	Millions of yen 375,696 315,957	Millions of yen 15,369 6,635	Millions of yen 11,179 3,751	Millions of yen 8,539 2,009
      Change	+59,739	+8,734	+7,428	+6,530
      	+18.9%	+131.6%	+198.0%	+325.0%

      Net sales increased due to higher sales prices to reflect rising key raw material prices, driven by an increase in palm oil prices compared to the same period last year, as well as sustained high cocoa beans prices following the soaring in 2024. Business profit increased due to steady sales of vegetable fats for chocolate in the Vegetable Oils and Fats segment and a decline in cocoa beans related costs at Blommer Chocolate Company, LLC (USA, hereinafter "Blommer"). Profit attributable to owners of parent increased due to an increase in business profit despite an increase in interest expenses.

      From the current fiscal year, the Company has allocated corporate expenses which were not allocated to each reported segment and were included in "Adjustment". Therefore, segment information for the previous fiscal year has been analyzed comparatively by allocating corporate expenses to each reported segment.

      The operating results by reported segment are shown below.

      	Net sales			Business profit
      		Year-on-year change			Year-on-year change
      	Millions of yen	Millions of yen	%	Millions of yen	Millions of yen	%
      Vegetable Oils and Fats	131,905	+35,174	+36.4%	18,650	+7,251	+63.6%
      Industrial Chocolate	180,341	+24,432	+15.7%	△3,537	+2,322	-
      Emulsified and Fermented Ingredients	46,932	+1,619	+3.6%	421	△583	△58.1%
      Soy-based Ingredients	16,515	△1,487	△8.3%	35	△142	△80.0％
      Adjustment	-	-	-	△200	△113	-
      Total	375,696	+59,739	+18.9%	15,369	+8,734	+131.6%

      (Vegetable Oils and Fats)

      Net sales increased due to higher sales prices to reflect rising raw material prices and expansion of demand. Business profit increased mainly due to steady sales of vegetable fats for chocolate and frying oils and fats.

      (Industrial Chocolate)

      Net sales increased due to higher sales prices to reflect rising raw material prices. Business profit increased due to a decline in cocoa beans related costs at Blommer despite a decrease in sales volume at Blommer.

      (Emulsified and Fermented Ingredients)

      Net sales increased due to higher sales prices to reflect rising raw material prices. Business profit decreased due to a decline in profitability resulting from higher procurement prices.

      (Soy-based Ingredients)

      Net sales and business profit decreased mainly due to the decrease in sales volume of functional ingredients.

   2. Details of Financial Position

      1. Details of Consolidated Financial Position

         The consolidated financial position at the end of the six months of the fiscal year is as follows.

         (Millions of yen)

         		As of March 31, 2025	As of September 30, 2025	Change
         	Current assets Non-current assets	363,997 233,079	383,585 266,852	+19,588 +33,772
         Assets		597,076	650,437	+53,360
         	Interest-bearing debt Other	283,721 102,428	309,490 117,760	+25,768 +15,332
         Liabilities		386,150	427,250	+41,100
         Equity		210,926	223,187	+12,260

         (Assets)

         Current assets increased due to an increase in trade receivables and inventories attributable to rising raw material prices, increase in inventory levels ahead of the peak season and a newly consolidated company despite a decrease in cash and cash equivalents. Non-current assets increased due to an increase in goodwill resulting from the acquisition of shares of a newly consolidated company and purchase of property, plant and equipment. As a result, assets increased by 53,360 million yen from the end of the previous consolidated fiscal year to 650,437 million yen.

         (Liabilities)

         Liabilities increased due to an increase in trade payables which are included in other, as well as an increase in interest-bearing debt such as the acquisition of shares of a newly consolidated company and an increase in working capital. As a result, liabilities increased by 41,100 million yen from the end of the previous consolidated fiscal year to 427,250 million yen.

         (Equity)

         Equity increased by 12,260 million yen from the end of the previous year to 223,187 million yen mainly due to an increase in other components of equity resulting from growth in retained earnings and the yen depreciation against real and euro.

      2. Details of Consolidated Cash Flows

         The cash flows for the first six months of the consolidated fiscal year are as follows.

         (Millions of yen)

         	Six months ended September 30, 2024	Six months ended September 30, 2025	Change
         Cash flows from operating activities	△25,794	△9,515	+16,279
         Cash flows from investing activities	△8,930	△33,123	△24,193
         Free Cash flows	△34,725	△42,638	△7,913
         Cash flows from financing activities	42,899	17,374	△25,525
         Cash and cash equivalents at end of period	34,917	45,382	+10,464

         (Cash flows from operating activities)

         Cash flows from operating activities for the first six months of the current consolidated fiscal year resulted in expenditures of 9,515 million yen. Expenditures decreased by 16,279 million yen compared to the first six months of the previous consolidated fiscal year mainly due to improvement in working capital requirements.

         (Cash flows from investing activities)

         Cash flows from investing activities for the first six months of the current consolidated fiscal year resulted in expenditures of 33,123 million yen. Expenditures increased by 24,193 million yen compared to the first six months of the previous consolidated fiscal year mainly due to the acquisition of shares of a newly consolidated company and purchase of property, plant and equipment.

         (Cash flows from financing activities)

         Cash flows from financing activities for the first six months of the current consolidated fiscal year resulted in income of 17,374 million yen. Income decreased by 25,525 million yen compared to the first six months of the previous consolidated fiscal year mainly due to the rebound of the previous year and using of funds in hand.

   3. Information on the Future Outlook, Including Consolidated Business Results Forecasts

      The consolidated business results forecasts for the full year remain unchanged from the business performance forecast announced on May 12, 2025

2. Semi-annual Consolidated Financial Statements
   1. Semi-annual Consolidated Statements of Financial Position

      (Millions of yen)

      	Transition Date (As of April 1, 2024)	As of March 31, 2025	As of September 30, 2025
      Assets
      Current assets
      Cash and cash equivalents	28,499	70,840	45,382
      Trade receivables	92,399	112,298	123,412
      Inventories	109,349	160,718	183,813
      Other financial assets	2,888	1,304	1,911
      Other current assets	13,427	10,197	29,064
      Assets held for sale	-	8,637	-
      Total current assets	246,565	363,997	383,585
      Non-current assets
      Property, plant and equipment	141,344	138,081	154,679
      Right-of-use assets	10,048	9,257	11,409
      Intangible assets	33,605	32,572	32,792
      Goodwill	21,907	20,763	33,989
      Investments accounted for using equity method	11,134	13,426	15,141
      Retirement benefit asset	39	39	-
      Deferred tax assets	2,496	10,218	9,822
      Other financial assets	9,426	8,400	8,729
      Other non-current assets	624	319	286
      Total non-current assets	230,628	233,079	266,852
      Total assets	477,193	597,076	650,437

      (Millions of yen)

      	Transition Date (As of April 1, 2024)	As of March 31, 2025	As of September 30, 2025
      Liabilities
      Current liabilities
      Trade payables	41,013	46,538	65,438
      Borrowings	64,373	195,284	197,779
      Current portion of bonds payable	34,989	-	-
      Lease liabilities	2,410	2,062	2,462
      Income taxes payable	4,316	7,566	6,211
      Other financial liabilities	6,148	10,093	8,246
      Other current liabilities	15,589	14,063	13,667
      Liabilities directly associated with assets held for sale	-	259	-
      Total current liabilities	168,842	275,867	293,805
      Non-current liabilities
      Bonds payable	5,978	30,811	30,835
      Long-term borrowings	43,496	57,625	80,874
      Lease liabilities	7,168	6,668	8,720
      Deferred tax liabilities	14,627	10,777	8,368
      Retirement benefit liability	1,985	1,784	1,933
      Other non-current liabilities	2,526	2,613	2,712
      Total non-current liabilities	75,781	110,282	133,445
      Total liabilities	244,624	386,150	427,250
      Equity
      Share capital	13,208	13,208	13,208
      Capital surplus	15,323	8,443	8,676
      Retained earnings	151,046	150,944	157,269
      Treasury shares	△1,947	△1,919	△2,154
      Other components of equity	42,846	36,245	42,320
      Equity attributable to owners of parent	220,477	206,923	219,320
      Non-controlling interests	12,091	4,003	3,866
      Total equity	232,569	210,926	223,187
      Total liabilities and equity	477,193	597,076	650,437

   2. Semi-annual Consolidated Statements of Income and Comprehensive Income

      Semi-annual Consolidated Statements of Income (First six months period)

      (Millions of yen)

      	Six months ended September 30, 2024	Six months ended September 30, 2025
      Net sales	315,957	375,696
      Cost of sales	275,679	323,385
      Gross profit	40,277	52,310
      Selling, general and administrative expenses	35,067	38,156
      Other income	1,195	651
      Other expenses	433	920
      Operating profit	5,971	13,886
      Finance income	618	597
      Finance costs	3,719	3,899
      Share of profit (loss) of investments accounted for using equity method	880	596
      Profit before tax	3,751	11,179
      Income tax expense	901	2,525
      Profit	2,849	8,653
      Profit attributable to
      Owners of parent	2,009	8,539
      Non-controlling interests	840	114
      Earnings per share Basic earnings per share (yen) Diluted earnings per share (yen)	23.37 -	99.32 -

      Quarterly Consolidated Statements of Comprehensive Income (First six months period)

      (Millions of yen)

      	Six months ended September 30, 2024	Six months ended September 30, 2025
      Profit	2,849	8,653
      Other comprehensive income Items that will not be reclassified to profit or loss Net change in fair value of equity instruments measured through other comprehensive income Remeasurements of defined benefit plans	79 △7	326 △47
      Total of items that will not be reclassified to profit or loss	71	279
      Items that may be reclassified to profit or loss
      Cash flow hedges	△721	696
      Exchange differences on translation of foreign operations	△10,455	5,274
      Share of other comprehensive income of investments accounted for using equity method	△7	△374
      Total of items that may be reclassified to profit or loss	△11,184	5,596
      Total other comprehensive income	△11,112	5,875
      Comprehensive income	△8,262	14,529
      Comprehensive income attributable to
      Owners of parent	△8,737	14,444
      Non-controlling interests	474	84

   3. Semi-annual Consolidated Statements of Changes in Equity

      	Share capital	Capital surplus	Retained earnings	Treasury shares	Other components of equity	Equity attributable to owners of parent	Non-controlling interests	Total equity
      Balance at beginning of period	13,208	15,323	151,046	△1,947	42,846	220,477	12,091	232,569
      Profit	-	-	2,009	-	-	2,009	840	2,849
      Other comprehensive income	-	-	-	-	△10,746	△10,746	△366	△11,112
      Comprehensive income	-	-	2,009	-	△10,746	△8,737	474	△8,262
      Dividends of surplus	-	-	△2,237	-	-	△2,237	△2,699	△4,937
      Purchase of treasury shares	-	-	-	△0	-	△0	-	△0
      Disposal of treasury shares	-	-	-	28	-	28	-	28
      Transfer from other components of equity to retained earnings	-	-	△77	-	77	-	-	-
      Share-based payment transactions	-	△28	-	-	-	△28	-	△28
      Other	-	-	-	-	△1,254	△1,254	-	△1,254
      Total transactions with owners	-	△28	△2,315	28	△1,177	△3,493	△2,699	△6,193
      Balance at end of period	13,208	15,294	150,740	△1,919	30,922	208,247	9,865	218,112

      For the six months ended Septemper 30, 2024

      For the six months ended September 30, 2025

      (Millions of yen)

      (Millions of yen)

      	Share capital	Capital surplus	Retained earnings	Treasury shares	Other components of equity	Equity attributable to owners of parent	Non-controlling interests	Total equity
      Balance at beginning of period	13,208	8,443	150,944	△1,919	36,245	206,923	4,003	210,926
      Profit	-	-	8,539	-	-	8,539	114	8,653
      Other comprehensive income	-	-	-	-	5,904	5,904	△29	5,875
      Comprehensive income	-	-	8,539	-	5,904	14,444	84	14,529
      Dividends of surplus	-	-	△2,237	-	-	△2,237	△319	△2,557
      Purchase of treasury shares	-	-	-	△421	-	△421	-	△421
      Disposal of treasury shares	-	259	-	186	-	446	-	446
      Transfer from other components of equity to retained earnings	-	-	22	-	△22	-	-	-
      Share-based payment transactions	-	△26	-	-	-	△26	-	△26
      Other	-	-	-	-	192	192	97	289
      Total transactions with owners	-	233	△2,215	△234	169	△2,047	△221	△2,268
      Balance at end of period	13,208	8,676	157,269	△2,154	42,320	219,320	3,866	223,187

   4. Semi-annual Consolidated Statements of Cash flows (First six months period)

      (Millions of yen)

      	Six months ended September 30, 2024	Six months ended September 30, 2025
      Cash flows from operating activities
      Profit before tax	3,751	11,179
      Depreciation and amortization	9,713	10,144
      Decrease (increase) in retirement benefit asset	0	39
      Increase (decrease) in retirement benefit liability	26	1
      Interest and dividend income	△542	△557
      Interest expenses	3,299	3,676
      Impairment losses	-	686
      Share of loss (profit) of investments accounted for using equity method	△880	△596
      Loss (gain) on disposal of non-current assets	74	163
      Loss (gain) on sale of shares of subsidiaries and associates	△291	-
      Decrease (increase) in trade receivables	△7,780	△6,389
      Decrease (increase) in inventories	△20,818	△15,364
      Increase (decrease) in trade payables	△1,302	15,358
      Decrease (increase) in advance payments to suppliers	△919	△15,904
      Other	△3,720	△1,948
      Subtotal	△19,389	490
      Interest and dividends received	879	549
      Interest paid	△2,638	△3,832
      Income taxes refund (paid)	△4,646	△6,722
      Net cash provided by (used in) operating activities	△25,794	△9,515
      Cash flows from investing activities
      Purchase of property, plant and equipment	△8,911	△13,482
      Proceeds from sale of property, plant and equipment	83	76
      Purchase of intangible assets	△1,494	△1,576
      Payments for acquisition of subsidiaries	-	△16,726
      Proceeds from sale of shares of subsidiaries	1,819	-
      Purchase of shares of associates	△326	△1,461
      Payments for investments in capital	△36	△13
      Other	△66	59
      Net cash provided by (used in) investing activities	△8,930	△33,123

      (Millions of yen)

      	Six months ended September 30, 2024	Six months ended September 30, 2025
      Cash flows from financing activities
      Net increase (decrease) in short-term borrowings	34,881	△37,635
      Net increase (decrease) in commercial papers	10,000	-
      Proceeds from long-term borrowings	17,631	59,921
      Repayments of long-term borrowings	△2,757	△812
      Proceeds from issuance of bonds	25,000	-
      Redemption of bonds	△35,000	-
      Dividends paid	△2,237	△2,237
      Dividends paid to non-controlling interests	△2,699	△319
      Other	△1,918	△1,542
      Net cash provided by (used in) financing activities	42,899	17,374
      Effect of exchange rate changes on cash and cash equivalents	△1,756	△193
      Net increase (decrease) in cash and cash equivalents	6,418	△25,457
      Cash and cash equivalents at beginning of period	28,499	70,840
      Increase or decrease in cash and cash equivalents resulting from transferring to assets held for sale	△0	-
      Cash and cash equivalents at end of period	34,917	45,382

   5. Notes to Semi-annual Consolidated Financial Statements (Notes Relating to Assumptions for the Going Concern) Not applicable.

From the first six months period of the current fiscal year, the Company has allocated corporate expenses which were not allocated to each reported segment and were included in "Adjustment". The segment information for the first six months period of the previous fiscal year has been presented in accordance with the changed allocation method.

First six months period of the previous fiscal year (April 1, 2024 - September 30, 2024)

(Millions of yen)

(Note) 1. Adjustment of business profit △86 million yen includes the elimination of intersegment transactions.

2. Business profit is calculated by adding share of profit (loss) of investments accounted for using equity method to operating profit and excluding gains and losses arising from non-recurring factors.

First six months period of the previous fiscal year (April 1, 2025 - September 30, 2025)

(Millions of yen)

(Note) 1. Adjustment of business profit △200 million yen includes the elimination of intersegment transactions.

2. Business profit is calculated by adding share of profit (loss) of investments accounted for using equity method to operating profit and excluding gains and losses arising from non-recurring factors.

The adjustment from business profit to profit before tax is as follows:

Six months ended September 30, 2024

(Millions of yen)

Six months ended September 30, 2025

Business profit 6,635 15,369

Gain on sale of fixed assets 40 28

Loss on disposal of fixed assets △115 △192

Gain on sale of shares of associates 291 －

Impairment losses － △686

Share of profit (loss) of investments accounted for using equity method

880 596

Profit before tax 3,751 11,179

The Group prepared its consolidated financial statements in compliance with IFRS from the current fiscal year. The most recent consolidated financial statements prepared in accordance with Japanese GAAP are those for the fiscal year ended March 31, 2025, and the transition date to IFRS is April 1, 2024.

1. Exemptions and mandatory exceptions under IFRS 1

   In principle, IFRS requires that companies adopting IFRS for the first time (hereinafter, "First-time Adopter") apply the standards required under IFRS retrospectively. However, for some of the standards required under IFRS, IFRS 1 First-Time Adoption of International Financial Reporting Standards (hereinafter, "IFRS 1") specifies standards for which the exemption is applied mandatorily and those for which the exemption is applied voluntarily. The impact based on the application of these exemptions is adjusted in retained earnings and other components of equity at the transition date.

   The exemptions that the Group applies in connection with the transition from Japanese GAAP to IFRS are as follows:

   ・Business combinations

   IFRS 1 permits a First-time Adopter to elect not to apply IFRS 3 Business Combinations (hereinafter,"IFRS 3") retrospectively to business combinations that occurred before the transition date to IFRS. If any business combination is restated upon retrospective application, all later business combinations shall be restated to comply with IFRS 3.

   The Group has elected not to apply IFRS 3 retrospectively to business combinations that occurred before the transition date. Accordingly, goodwill and equivalent to goodwill in equity method affiliates arising from business combinations that occurred before the transition date were recorded at the carrying amount under Japanese GAAP at the transition date.

   However, goodwill was tested for impairment as of the transition date irrespective of whether there was any indication of impairment.

   ・Use of deemed cost

   Under IFRS 1, the fair value of property, plant and equipment at the transition date can be used as deemed cost. The Group uses the fair value at the transition date as the deemed cost for certain items of property, plant and equipment.

   ・Designation of financial instruments recognized before the transition date

   IFRS 1 permits First-time Adopter to designate financial assets in accordance with IFRS 9 Financial Instruments (hereinafter,"IFRS 9") on the basis of the facts and circumstances that exist as at the transition date. The Group has designated equity instruments that were held as at the transition date as financial instruments measured at fair value through other comprehensive income (equity instruments) on the basis of the circumstances that existed as at the transition date.

   ・Leases (as lessee)

   IFRS 1 permits First-time Adopter to determine whether or not an arrangement contains a lease on the basis of facts and circumstances existing at the transition date. When First-time Adopter that is a lessee recognizes lease liabilities and right-of-use assets, it may measure lease liabilities and right-of-use assets for all of its leases at the transition date. The Group measured lease liabilities at the transition date at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate at the transition date. The Group measured right-of-use assets at the transition date at an amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments relating to the leases recognized in the statement of financial position immediately before the transition date.

   ・Share-based payments

   IFRS 1 permits First-time Adopter to elect not to apply IFRS 2 Share-based Payment (hereinafter, "IFRS 2") to share-based payments vested before the transition date. The Group elected not to apply IFRS 2 to share-based payments vested before the transition date.

2. Mandatory exceptions to retrospective application under IFRS 1

   IFRS 1 prohibits the retrospective application of IFRS for certain items including "estimates," "derecognition of financial assets and financial liabilities," "hedge accounting," "non-controlling interests," and "classification and measurement of financial assets." The Group has applied IFRS to these items prospectively from the transition date.

3. Reconciliations

The reconciliations required to be disclosed under IFRS 1 are as follows. "Change in FYE" includes reconciliations that reflect the alignment of subsidiaries' fiscal year ending with the Group's as part of the transition to IFRS. "Reclassification" includes reconciliations that do not affect retained earnings and comprehensive income. "Difference in recognition and measurement" includes reconciliations that affect retained earnings and comprehensive income.

Reconciliation of equity as of April 1, 2024 (The transition date)

(Millions of yen)

(Millions of yen)

Reconciliations of equity as of September 30, 2024 (First six months period of the previous fiscal year)

(Millions of yen)

(Millions of yen)

Reconciliations of equity as of March 31, 2025 (The previous fiscal year consolidated financial statements)

(Millions of yen)

(Millions of yen)

Reconciliations of profit or loss and comprehensive income for the first six months period of the previous fiscal year (April 1, 2024 - September 30, 2024)

(Millions of yen)

Reconciliation of profit or loss and comprehensive income for the previous fiscal year (From April 1, 2024 to March 31, 2025)

(Millions of yen)

Notes on reconciliations

1. Reclassification

   1. Inventories

      Merchandise, finished goods, raw materials, and supplies, which were separately presented under Japanese GAAP are reclassified to "Inventories" under IFRS.

   2. Other financial assets (current assets)

      Foreign exchange forward contracts, etc., included in other (current assets) under Japanese GAAP are reclassified to "Other financial assets" (current assets) under IFRS.

   3. Other current assets

      Advance payment, suspense paid income tax and income taxes receivable, etc., which were included in other (current assets) under Japanese GAAP are reclassified to "Other current assets" under IFRS.

   4. Assets held for sale, Liabilities directly associated with assets held for sale

      Assets or asset group held for sale are reclassified to "Assets held for sale" and "Liabilities directly associated with assets held for sale" under IFRS.

   5. Property, plant and equipment

      Buildings and structures, machinery equipment and vehicles, and land, etc., which were separately presented under Japanese GAAP are reclassified to "Property, plant and equipment" under IFRS.

   6. Intangible assets

      Customer-related intangible assets which were separately presented under Japanese GAAP and right of trademark and software, etc., included in other (intangible assets) under Japanese GAAP are reclassified to "Intangible assets" under IFRS.

   7. Investments accounted for using equity method

      Investments accounted for using equity method included in investment securities under Japanese GAAP, are reclassified to "Investments accounted for using equity method" under IFRS.

   8. Other financial assets (non-current assets)

      Listed shares and unlisted shares included in investment securities under Japanese GAAP, and guarantee deposits and investment in capital, etc., included in other (investments and other assets) under Japanese GAAP, are reclassified to "Other financial assets" (non-current assets) under IFRS.

   9. Other non-current assets

      Long-term prepaid expenses, etc., included in other (investments and other assets) under Japanese GAAP, are reclassified to "Other non-current assets" under IFRS.

   10. Lease liabilities

       Lease liabilities included in other (current liabilities) under Japanese GAAP are reclassified to "Lease liabilities (current liabilities)" under IFRS.

   11. Borrowings

       Commercial paper separately presented under Japanese GAAP are reclassified to "Borrowings" under IFRS.

   12. Other financial liabilities (current liabilities)

       Construction accounts payable and accounts payable, etc., included in other (current liabilities) under Japanese GAAP are reclassified to "Other financial liabilities" (current liabilities) under IFRS.

   13. Other current liabilities

       Provision for bonuses which were separately presented under Japanese GAAP and accrued expenses, etc., included in other (current liabilities) under Japanese GAAP are reclassified to "Other current liabilities" under IFRS.

   14. Other non-current liabilities

       Deposits Received - Long Term, etc., included in other (non-current liabilities) under Japanese GAAP are reclassified to "Other non-current liabilities" under IFRS.

   15. Other components of equity

       Foreign currency translation adjustment, remeasurements of defined benefit plans, valuation difference on available-for-sale securities, and deferred gains or losses on hedges, which were separately presented under Japanese GAAP are reclassified to "Other components of equity" under IFRS.

   16. Non-operating income (losses), Extraordinary income (losses)

       Income and expenses, which were presented as non-operating income, non-operating expenses, extraordinary income, and extraordinary losses under Japanese GAAP, are included in "Finance income" and "Finance costs" for finance-related items, "Cost of sales" for impairment losses, etc., and "Other operating income", "Other operating expenses" and "Share of profit (loss) of investments accounted for using equity method" for the other items under IFRS.

   17. Income tax expense

       Income taxes - current and income taxes - deferred, which were separately presented under Japanese GAAP are reclassified in total as "Income tax expense" under IFRS.

2. Differences in recognition and measurement

1. Non-marketable equity instruments

   Under Japanese GAAP, non-marketable equity instruments were carried at cost. Under IFRS, they are designated as equity instruments measured at fair value through other comprehensive income in accordance with IFRS 9, and accordingly, equity instruments are measured at fair value, regardless of whether they are marketable or not, with the changes in fair value recognized through other comprehensive income.

2. Goodwill

   Under Japanese GAAP, goodwill was amortized on a straight-line basis over a reasonably estimated period during which its effect is expected to continue. Under IFRS, goodwill arising from business combinations is not amortized but tested for impairment each fiscal year.

3. Deferred tax assets and liabilities

   Under Japanese GAAP, deferred tax assets on unrealized profits from intercompany inventories transactions were measured using the seller's effective tax rate. Under IFRS, they are measured using the buyer's effective tax rate. As a result of the transition to IFRS, adjustments were made to deferred tax assets and liabilities due to temporary differences and the reassessment of the recoverability of deferred tax assets.

4. Employee benefits

   Under Japanese GAAP, service cost, interest expense, and expected return on plan assets for retirement benefits under defined benefit plans were recognized in profit or loss. Actuarial gains and losses and past service cost arising from the plans were also recognized in profit or loss in the fiscal year in which they were incurred.

   Under IFRS, on the other hand, current service cost and past service cost for retirement benefits under defined benefit plans are recognized in profit or loss, and interest expense is recognized in profit or loss at an amount calculated by multiplying the net defined benefit liability (asset) by the discount rate. Remeasurement of the net defined benefit liability (asset) is recognized in other comprehensive income, and directly reclassified to retained earnings from other components of equity when incurred without being recognized through profit or loss. Remeasurement consists of actuarial gains and losses on defined benefit obligations and return on plan assets (excluding interest income on plan assets).

   In addition, if defined benefit assets exceed obligation, the asset ceiling is determined as the present value of the future economic benefits available in the form of refunds from the plan or reductions in future contributions.

5. Deemed cost

   In applying IFRS, the Group elected to use the deemed cost exemption under IFRS 1 and measured certain items of property, plant and equipment at fair value as of the transition date.

6. Lease liabilities and right-of-use assets

   Under Japanese GAAP, leases as a lessee were classified as either finance leases or operating leases, and operating leases were accounted for in a similar manner to ordinary rental transactions. Under IFRS, leases as a lessee are not classified as finance leases or operating leases, and right-of-use assets and lease liabilities are recognized for lease transactions.

7. Provision for paid absence

   Unused paid absences, which were not required to be recognized under Japanese GAAP, are recognized as a provision under IFRS.

8. Levies

   Under Japanese GAAP, levies such as fixed asset taxes were expensed over the fiscal year in which the payment obligation arose. Under IFRS, the full amount is expensed when the obligating event occurs.

9. Inventories

   Under Japanese GAAP, some subsidiaries included transportation costs to deliver products to customers in the cost of inventories. Under IFRS, all costs except for those incurred in bringing the inventories to their present location or condition are recognized as "Selling, general and administrative expenses" when they are incurred.

10. Financial instruments (Foreign exchange forward contracts)

    Under Japanese GAAP, some subsidiaries designated allocation method for foreign exchange forward contracts. Under IFRS, these transactions are subject to cash flow hedge accounting.

11. Change in Scope of Consolidation

    Under Japanese GAAP, subsidiaries and affiliates of insignificant materiality were accounted for using the cost method. Under IFRS, such entities are included in the scope of consolidation as subsidiaries or equity-method associates.

12. Reconciliation of retained earnings

The impact of the reconciliations on retained earnings is as follows (figures in parentheses represent loss).

(Millions of yen)

Reconciliation of cash flows for the six months ended September 30, 2024 (from 4/1/2024 to 9/30/2024) and the fiscal year ended March 31, 2025 (from 4/1/2024 to 3/31/2025)

There are no significant differences between the consolidated cash flows statements based on Japanese GAAP and the consolidated cash flows statements based on IFRS.