Fuji Oil : Financial Results 3Q （October 1, 2025 - December 31, 2025）

About this update from Fuji Oil Co. Ltd.

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. February 10, 2026 Consolidated Financial Results for the Nine Months Ended December 31, 2025 (Q3 FY2025) (Under IFRS) 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: － 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.) Consolidated financial results for the nine months ended December 31, 2025 (April 1, 2025 - December 31, 2025) Consolidated operating results (cumulative) (Percentages indicate year-on-year changes.) Net sales Business profit Operating profit Profit before tax Profit Nine months ended Millions of yen % Millions of yen % Millions of yen % - - Millions of yen % - - Millions of yen % - - December 31, 2025 582,783 18.5 28,805 700.7 27,536 22,802 16,596 December 31, 2024 491,884 - 3,597 - 2,328 △291 △387 Profit attributable to owners of parent Total comprehensive income Basic earnings per share Diluted earnings per share Nine months ended Millions of yen % - - Millions of yen % Yen Yen December 31, 2025 16,376 36,355 651.8 190.47 - December 31, 2024 △1,639 4,835 - △19.07 - (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. 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 % December 31, 2025 679,691 243,170 239,033 35.2 March 31, 2025 597,076 210,926 206,923 34.7 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 Consolidated forecasts for the fiscal year ending March 31, 2026 (April 1, 2025 - March 31, 2026) (Percentages indicate year-on-year changes.) Net sales Business profit Profit attributable to owners of parent Profit per share Fiscal year ending March 31, 2026 Millions of yen 772,000 % 15.0 Millions of yen 36,500 % 175.2 Millions of yen 16,500 % 327.0 Yen 191.92 (Note) Revisions to the consolidated forecast most recently announced: Yes Please refer to the "Notice of Revision to the Full-Year Earnings Forecast" released today for further details. * Notes Significant changes in the scope of consolidation during the period: Yes New company: 2 companies (PROVENCE HUILES S.A.S, etc.) Excluded company: 2 companies (The former FUJI OIL CO., LTD. etc.) Changes in accounting policies, changes in accounting estimates, and restatement Changes in accounting policies required by IFRS: None Changes in accounting policies due to other reasons: None Changes in accounting estimates: None Number of issued shares (common shares) Total number of issued shares at the end of the period (including treasury shares) As of December 31, 2025 87,569,383 shares As of March 31, 2025 87,569,383 shares Number of treasury shares at the end of the period As of December 31, 2025 1,586,816 shares As of March 31, 2025 1,595,432 shares Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) Nine months ended December 31, 2025 85,978,201 shares Nine months ended December 31, 2024 85,969,636 shares Quarterly 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. Quarterly 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 Qualitative Information on Results for the Nine Months Ended December 31, 2025 2 Details of Operating Results 2 Details of Financial Position 3 Information on the Future Outlook, Including Consolidated Business Results Forecasts 4 Quarterly Consolidated Financial Statements ……………………………………………………………………………… 5 Quarterly Consolidated Statements of Financial Position ……………………………………………………………… 5 Quarterly Consolidated Statements of Income and Comprehensive Income …………………………………………… 7 Quarterly Consolidated Statements of Income ………………………………………………………………………… 7 Quarterly Consolidated Statements of Comprehensive Income ……………………………………………………… 8 Quarterly Consolidated Statements of Changes in Equity ……………………………………………………………… 9 Quarterly Consolidated Statements of Cash flows 10 Notes to Quarterly Consolidated Financial Statements ………………………………………………………………… 12 (Notes Relating to Assumptions for the Going Concern) 12 (Segment Information) 12 (First-Time Adoption of IFRS) 14 Qualitative Information on Results for the Nine Months Ended December 31, 2025 Details of Operating Results Operating results for the first nine months of the current consolidated fiscal year were as follows. Net sales Business profit Profit before tax Profit attributable to owners of parent Nine months ended December 31, 2025 December 31, 2024 Millions of yen 582,783 491,884 Millions of yen 28,805 3,597 Millions of yen 22,802 △291 Millions of yen 16,376 △1,639 Change +90,899 +25,208 +23,093 +18,015 +18.5% +700.7% - - Net sales increased due to higher sales prices to reflect rising key raw material price such as cocoa beans. 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. The business combination with PROVENCE HUILES S.A.S and other that occurred in 28,April 2025 had been accounted for on a provisional basis in both the first quarter consolidated cumulative period and the interim consolidated accounting period, We finalized from our provisional accounting during the third-quarter consolidated cumulative period. 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, the 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 201,714 +49,958 +32.9% 26,645 +8,043 +43.2% Industrial Chocolate 282,646 +40,625 +16.8% 1,357 +17,901 - Emulsified and Fermented Ingredients 73,389 +2,171 +3.0% 1,361 △556 △29.0% Soy-based Ingredients 25,033 △1,856 △6.9% △234 △97 - Adjustment - - - △324 △82 - Total 582,783 +90,899 +18.5% 28,805 +25,208 +700.7% (Vegetable Oils and Fats) Net sales increased due to higher sales prices to reflect rising raw material prices and expansion of demand, in addition to new consolidation during the current first quarter consolidated cumulative period. Business profit increased mainly due to steady sales of vegetable fats for chocolate. (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 and a decrease in sales volume in Asia. (Soy-based Ingredients) Net sales and business profit decreased mainly due to a decrease in sales volume of functional ingredients. Details of Financial Position Details of Consolidated Financial Position The consolidated financial position at the end of the nine months of the fiscal year is as follows. (Millions of yen) As of March 31, 2025 As of December 31, 2025 Change Current assets Non-current assets 363,997 233,079 400,331 279,359 +36,334 +46,280 Assets 597,076 679,691 +82,614 Interest-bearing debt Other 283,721 102,428 323,251 113,269 +39,529 +10,841 Liabilities 386,150 436,521 +50,370 Equity 210,926 243,170 +32,244 (Assets) Current assets increased due to an increase in trade receivables and inventories attributable to 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 82,614 million yen from the end of the previous consolidated fiscal year to 679,691 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 from the acquisition of shares of a newly consolidated company and an increase in working capital. As a result, liabilities increased by 50,370 million yen from the end of the previous consolidated fiscal year to 436,521 million yen. (Equity) Equity increased by 32,244 million yen from the end of the previous year to 243,170 million yen mainly due to an increase in other components of equity resulting from growth in retained earnings and the yen depreciation against US dollar and euro. Details of Consolidated Cash Flows The cash flows for the first nine months of the consolidated fiscal year are as follows. (Millions of yen) Nine months ended December 31, 2024 Nine months ended December 31, 2025 Change Cash flows from operating activities △48,358 △8,958 +39,399 Cash flows from investing activities △13,162 △41,163 △28,001 Free Cash flows △61,521 △50,122 +11,398 Cash flows from financing activities 70,993 19,764 △51,229 Cash and cash equivalents at end of period 38,847 43,800 +4,952 (Cash flows from operating activities) Cash flows from operating activities for the first nine months of the current consolidated fiscal year resulted in expenditures of 8,958 million yen. Expenditures decreased by 39,399 million yen compared to the first nine months of the previous consolidated fiscal year mainly due to an improvement in working capital requirements. (Cash flows from investing activities) Cash flows from investing activities for the first nine months of the current consolidated fiscal year resulted in expenditures of 41,163 million yen. Expenditures increased by 28,001 million yen compared to the first nine 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 nine months of the current consolidated fiscal year resulted in income of 19,764 million yen. Income decreased by 51,229 million yen compared to the first nine months of the previous consolidated fiscal year mainly due to the rebound of the previous year and using of funds in hand. Information on the Future Outlook, Including Consolidated Business Results Forecasts The consolidated business results forecast for the full year has been revised from the previous forecast announced on May 12, 2025. Please refer to the "Notice of Revision to the Full-Year Earnings Forecast" released today for further details. Quarterly Consolidated Financial Statements Quarterly Consolidated Statements of Financial Position (Millions of yen) Transition Date (As of April 1, 2024) As of March 31, 2025 As of December 31, 2025 Assets Current assets Cash and cash equivalents 28,499 70,840 43,800 Trade receivables 92,399 112,298 137,324 Inventories 109,349 160,718 192,899 Other financial assets 2,888 1,304 2,673 Other current assets 13,427 10,197 23,633 Assets held for sale - 8,637 - Total current assets 246,565 363,997 400,331 Non-current assets Property, plant and equipment 141,344 138,081 161,837 Right-of-use assets 10,048 9,257 11,705 Intangible assets 33,605 32,572 40,647 Goodwill 21,907 20,763 30,229 Investments accounted for using equity method 11,134 13,426 15,327 Retirement benefit asset 39 39 - Deferred tax assets 2,496 10,218 10,659 Other financial assets 9,426 8,400 8,705 Other non-current assets 624 319 247 Total non-current assets 230,628 233,079 279,359 Total assets 477,193 597,076 679,691 (Millions of yen) Transition Date (As of April 1, 2024) As of March 31, 2025 As of December 31, 2025 Liabilities Current liabilities Trade payables 41,013 46,538 59,775 Borrowings 64,373 195,284 213,604 Current portion of bonds payable 34,989 - - Lease liabilities 2,410 2,062 2,462 Income taxes payable 4,316 7,566 6,235 Other financial liabilities 6,148 10,093 6,407 Other current liabilities 15,589 14,063 13,817 Liabilities directly associated with assets held for sale - 259 - Total current liabilities 168,842 275,867 302,303 Non-current liabilities Bonds payable 5,978 30,811 30,847 Long-term borrowings 43,496 57,625 78,798 Lease liabilities 7,168 6,668 8,883 Deferred tax liabilities 14,627 10,777 10,904 Retirement benefit liability 1,985 1,784 1,990 Other non-current liabilities 2,526 2,613 2,791 Total non-current liabilities 75,781 110,282 134,217 Total liabilities 244,624 386,150 436,521 Equity Share capital 13,208 13,208 13,208 Capital surplus 15,323 8,443 8,676 Retained earnings 151,046 150,944 162,981 Treasury shares △1,947 △1,919 △2,154 Other components of equity 42,846 36,245 56,320 Equity attributable to owners of parent 220,477 206,923 239,033 Non-controlling interests 12,091 4,003 4,137 Total equity 232,569 210,926 243,170 Total liabilities and equity 477,193 597,076 679,691 Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statements of Income (First nine months period) (Millions of yen) Nine months ended December 31, 2024 Nine months ended December 31, 2025 Net sales 491,884 582,783 Cost of sales 437,270 498,043 Gross profit 54,613 84,740 Selling, general and administrative expenses 53,261 57,539 Other income 1,419 1,495 Other expenses 442 1,159 Operating profit 2,328 27,536 Finance income 1,342 1,200 Finance costs 5,284 6,221 Share of profit (loss) of investments accounted for using equity method 1,322 287 Profit (loss) before tax △291 22,802 Income tax expense 96 6,205 Profit (loss) △387 16,596 Profit (loss) attributable to Owners of parent △1,639 16,376 Non-controlling interests 1,251 220 Earnings (loss) per share Basic earnings (loss) per share (yen) Diluted earnings (loss) per share (yen) △19.07 - 190.47 - Quarterly Consolidated Statements of Comprehensive Income (First nine months period) (Millions of yen) Nine months ended December 31, 2024 Nine months ended December 31, 2025 Profit (Loss) △387 16,596 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 277 △9 455 △57 Total of items that will not be reclassified to profit or loss 267 397 Items that may be reclassified to profit or loss Cash flow hedges 2,477 1,070 Exchange differences on translation of foreign operations 1,793 18,746 Share of other comprehensive income of investments accounted for using equity method 685 △456 Total of items that may be reclassified to profit or loss 4,955 19,361 Total other comprehensive income 5,223 19,758 Comprehensive income 4,835 36,355 Comprehensive income attributable to Owners of parent 3,175 35,999 Non-controlling interests 1,660 355 Quarterly 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 (loss) - - △1,639 - - △1,639 1,251 △387 Other comprehensive income - - - - 4,814 4,814 408 5,223 Comprehensive income - - △1,639 - 4,814 3,175 1,660 4,835 Dividends of surplus - - △4,475 - - △4,475 △2,698 △7,174 Purchase of treasury shares - - - △0 - △0 - △0 Disposal of treasury shares - - - 28 - 28 - 28 Transfer from other components of equity to retained earnings - - 78 - △78 - - - Share-based payment transactions - △22 - - - △22 - △22 Other - - - - △1,770 △1,770 - △1,770 Total transactions with owners - △22 △4,397 28 △1,848 △6,239 △2,698 △8,938 Balance at end of period 13,208 15,300 145,010 △1,919 45,812 217,413 11,052 228,466 For the nine months ended December 31, 2024 For the nine months ended December 31, 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 (loss)t - - 16,376 - - 16,376 220 16,596 Other comprehensive income - - - - 19,623 19,623 135 19,758 Comprehensive income - - 16,376 - 19,623 35,999 355 36,355 Dividends of surplus - - △4,479 - - △4,479 △324 △4,804 Purchase of treasury shares - - - △421 - △421 - △421 Disposal of treasury shares - 259 - 186 - 446 - 446 Transfer from other components of equity to retained earnings - - 140 - △140 - - - Share-based payment transactions - △26 - - - △26 - △26 Other - - - - 591 591 103 694 Total transactions with owners - 233 △4,339 △234 450 △3,889 △221 △4,111 Balance at end of period 13,208 8,676 162,981 △2,154 56,320 239,033 4,137 243,170 Quarterly Consolidated Statements of Cash flows (First nine months period) (Millions of yen) Nine months ended December 31, 2024 Nine months ended December 31, 2025 Cash flows from operating activities Profit (loss) before tax △291 22,802 Depreciation and amortization 14,540 15,787 Decrease (increase) in retirement benefit asset 0 39 Increase (decrease) in retirement benefit liability 38 △9 Interest and dividend income △849 △804 Interest expenses 4,941 5,804 Impairment losses 113 686 Share of loss (profit) of investments accounted for using equity method △1,322 △287 Loss (gain) on disposal of non-current assets 124 256 Loss (gain) on sale of shares of subsidiaries and associates △291 - Decrease (increase) in trade receivables △32,654 △15,605 Decrease (increase) in inventories △31,693 △17,098 Increase (decrease) in trade payables 13,289 7,087 Decrease (increase) in advance payments to suppliers 2,497 △9,764 Other △5,379 △1,211 Subtotal △36,936 7,683 Interest and dividends received 1,285 804 Interest paid △4,683 △6,125 Income taxes refund (paid) △8,023 △11,330 Proceeds from insurance income - 8 Net cash provided by (used in) operating activities △48,358 △8,958 Cash flows from investing activities Purchase of property, plant and equipment △12,869 △21,044 Proceeds from sale of property, plant and equipment 306 173 Purchase of intangible assets △2,127 △2,278 Payments for acquisition of subsidiaries - △16,726 Proceeds from sale of shares of subsidiaries 1,819 - Purchase of shares of associates △325 △1,461 Payments for investments in capital △73 △26 Other 107 199 Net cash provided by (used in) investing activities △13,162 △41,163 (Millions of yen) Nine months ended December 31, 2024 Nine months ended December 31, 2025 Cash flows from financing activities Net increase (decrease) in short-term borrowings 66,784 △29,503 Net increase (decrease) in commercial papers 10,000 - Proceeds from long-term borrowings 17,628 59,921 Repayments of long-term borrowings △3,666 △3,607 Proceeds from issuance of bonds 25,000 - Redemption of bonds △35,000 - Dividends paid △4,475 △4,479 Dividends paid to non-controlling interests △2,698 △324 Other △2,578 △2,241 Net cash provided by (used in) financing activities 70,993 19,764 Effect of exchange rate changes on cash and cash equivalents 875 3,318 Net increase (decrease) in cash and cash equivalents 10,348 △27,039 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 38,847 43,800 Notes to Quarterly Consolidated Financial Statements (Notes Relating to Assumptions for the Going Concern) Not applicable. (Segment Information) From 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 nine months period of the previous fiscal year has been presented in accordance with the changed allocation method. First nine months period of the previous fiscal year (April 1, 2024 - December 31, 2024) (Millions of yen) Reported segments Adjustment (Note 1) Consolidated total Vegetable Oils and Fats Industrial Chocolate Emulsified and Fermented Ingredients Soy-based Ingredients Total Net sales Sales to external customers 151,755 242,020 71,218 26,889 491,884 - 491,884 Transactions with other segments 19,824 2,897 4,150 138 27,009 △27,009 - Total 171,579 244,918 75,368 27,027 518,893 △27,009 491,884 Business profit (loss) (Note 2) 18,601 △16,544 1,918 △136 3,839 △241 3,597 (Note) 1. Adjustment of business profit (loss) △241 million yen includes the elimination of intersegment transactions. 2. Business profit (loss) 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 nine months period of the current fiscal year (April 1, 2025 - December 31, 2025) (Millions of yen) Reported segments Adjustment (Note 1) Consolidated total Vegetable Oils and Fats Industrial Chocolate Emulsified and Fermented Ingredients Soy-based Ingredients Total Net Sales Sales to external customers 201,714 282,646 73,389 25,033 582,783 - 582,783 Transactions with other segments 25,600 3,304 5,031 50 33,986 △33,986 - Total 227,314 285,950 78,421 25,083 616,770 △33,986 582,783 Business profit (loss) (Note 2) 26,645 1,357 1,361 △234 29,130 △324 28,805 (Note) 1. Adjustment of business profit (loss) △324 million yen includes the elimination of intersegment transactions. 2. Business profit (loss) 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 (loss) before tax is as follows: Nine months ended December 31, 2024 (Millions of yen) Nine months ended December 31, 2025 Business profit 3,597 28,805 Gain on sale of fixed assets 46 45 Loss on disposal of fixed assets △170 △302 Gain on sale of shares of associates 291 － Impairment losses △113 △686 Share of loss (profit) of investments accounted for using the equity method △1,322 △287 Other 0 △39 Operating profit 2,328 27,536 Finance income 1,342 1,200 Finance costs △5,284 △6,221 Share of profit (loss) of investments accounted for using equity method 1,322 287 Profit (loss) before tax △291 22,802 (First-Time Adoption of IFRS) 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. 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. 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. 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) Accounts under Japanese GAAP Japanese GAAP Change in FYE Reclassification Difference in recognition and measurement IFRS Key Notes Accounts under IFRS Assets a b c Assets Current assets Cash and cash equivalents Trade receivables Inventories Other financial assets Other current assets Current assets Cash and deposits 27,490 829 △10 189 28,499 Notes and accounts receivable - trade 90,024 2,614 △238 △1 92,399 Merchandise and finished goods 51,724 509 57,277 △161 109,349 Raw materials and supplies 57,277 - △57,277 - - Other 10,579 - △10,579 - - Allowance for doubtful accounts △238 - 238 - - - 1,092 1,621 173 2,888 - 4,260 9,006 160 13,427 Total current assets 236,858 9,307 38 360 246,565 Total current assets Non-current assets Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Goodwill Investments accounted for using equity method Retirement benefit asset Deferred tax assets Other financial assets Other non-current assets Property, plant and equipment - - 143,868 △2,524 141,344 e, E Buildings and structures, net 47,780 28 △47,809 - - Machinery, equipment and vehicles, net 62,851 93 △62,945 - - Land 20,057 124 △20,182 - - Right-of-use assets, net 7,655 △63 82 2,374 10,048 F Construction in progress 9,273 571 △9,844 - - Other, net 3,131 34 △3,165 - - Intangible assets - - 33,605 - 33,605 f Goodwill 21,840 67 - - 21,907 B Customer-related assets 19,035 174 △19,209 - - Other 14,345 53 △14,398 - - Investments and other assets - - 11,224 △89 11,134 g Investment securities 16,002 - △16,002 - - Retirement benefit asset 7,064 - - △7,024 39 D Deferred tax assets 669 - - 1,827 2,496 C Other 3,683 - △3,683 - - Allowance for doubtful accounts △60 - 60 - - - 18 7,873 1,533 9,426 h, A - - 527 96 624 i Total non-current assets 233,332 1,103 - △3,806 230,628 Total non-current assets Deferred assets Bond issuance costs 30 - - △30 - Total deferred assets 30 - - △30 - Total assets 470,221 10,410 38 △3,476 477,193 Total assets (Millions of yen) Accounts under Japanese GAAP Japanese GAAP Change in FYE Reclassification Difference in recognition and measurement IFRS Key Notes Accounts under IFRS Liabilities Liabilities Current liabilities Trade payables Borrowings Current portion of bonds payable Lease liabilities Income taxes payable Other financial liabilities Other current liabilities Current liabilities Notes and accounts payable - trade 42,321 △1,441 - 134 41,013 Short-term borrowings 33,151 21,222 10,000 - 64,373 k Current portion of bonds payable 35,000 - - △10 34,989 Commercial papers 10,000 - △10,000 - - - △5 1,721 693 2,410 j, F Income taxes payable 4,310 - - 6 4,316 Provision for bonuses 3,354 58 △3,412 - - Provision for bonuses for directors (and other officers) 40 - △40 - - Other 18,758 - △18,758 - - - 237 5,904 7 6,148 l - △659 14,573 1,675 15,589 m, G, H Total current liabilities 146,936 19,412 △12 2,506 168,842 Total current liabilities Non-current liabilities Bonds payable Long-term borrowings Lease liabilities Deferred tax liabilities Retirement benefit liability Other 6,000 46,135 5,110 17,223 2,022 2,500 - - △2,639 △57 △1,327 - - 25 - - - - - △2,500 2,500 △21 - 2,115 △1,268 △37 - - 5,978 43,496 7,168 14,627 1,985 - 2,526 F C n Non-current liabilities Bonds payable Long-term borrowings Lease liabilities Deferred tax liabilities Retirement benefit liability Other non-current liabilities Total non-current liabilities 78,993 △3,998 - 787 75,781 Total non-current liabilities Total liabilities 225,929 15,413 △12 3,294 244,624 Total liabilities Net assets Equity Share capital Capital surplus Retained earnings Treasury shares Other components of equity Equity attributable to owners of parent Non-controlling interests Shareholders' equity Share capital 13,208 - - - 13,208 Capital surplus 14,757 - 51 514 15,323 Retained earnings 163,810 △6,359 - △6,403 151,046 L Treasury shares △1,947 - - - △1,947 Accumulated other comprehensive income - - 43,714 △867 42,846 o, A Valuation difference on available-for-sale securities 1,868 - △1,868 - - Deferred gains or losses on hedges 726 - △726 - - Foreign currency translation adjustment 39,122 1,356 △40,479 - - Remeasurements of defined benefit plans 639 - △639 - - - - - - 220,477 Non-controlling interests 12,105 - - △14 12,091 Total net assets 244,291 △5,002 51 △6,770 232,569 Total equity Total liabilities and net assets 470,221 10,410 38 △3,476 477,193 Total liabilities and equity Reconciliations of equity as of December 31, 2024 (First nine months period of the previous fiscal year) (Millions of yen) Accounts under Japanese GAAP Japanese GAAP Reclassification Difference in recognition and measurement IFRS Key Notes Accounts under IFRS Assets a b c d Assets Current assets Cash and cash equivalents Trade receivables Inventories Other financial assets Other current assets Assets held for sale Current assets Cash and deposits 38,621 △10 237 38,847 Notes and accounts receivable - trade 125,724 △207 △0 125,516 Merchandise and finished goods 59,873 84,426 △210 144,090 Raw materials and supplies 84,426 △84,426 - - Other 18,147 △18,147 - - Allowance for doubtful accounts △264 264 - - - 6,106 383 6,489 - 11,944 251 12,196 - 9,807 - 9,807 Total current assets 326,529 9,757 661 336,948 Total current assets Non-current assets Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Goodwill Investments accounted for using equity method Retirement benefit asset Deferred tax assets Other financial assets Other non-current assets Property, plant and equipment - 138,640 △2,525 136,114 e, E Buildings and structures, net 46,430 △46,430 - - Machinery, equipment and vehicles, net 61,096 △61,096 - - Land 20,061 △20,061 - - Right-of-use assets, net 7,281 35 2,051 9,368 F Construction in progress 17,473 △17,473 - - Other, net 3,236 △3,236 - - Intangible assets - 33,457 - 33,457 f Goodwill 19,842 - 1,684 21,526 B Customer-related assets 18,541 △18,541 - - Other 14,926 △14,926 - - Investments and other assets - 12,811 213 13,024 g Investment securities 17,496 △17,496 - - Retirement benefit asset 7,497 - △7,458 39 D Deferred tax assets 1,496 - 1,765 3,262 C Other 3,286 △3,286 - - Allowance for doubtful accounts △47 47 - - - 7,581 1,692 9,274 h, A - 342 54 397 i Total non-current assets 238,621 △9,634 △2,522 226,464 Total non-current assets Deferred assets Bond issuance costs 195 - △195 - Total deferred assets 195 - △195 - Total assets 565,346 122 △2,056 563,412 Total assets (Millions of yen) Accounts under Japanese GAAP Japanese GAAP Reclassification Difference in recognition and measurement IFRS Key Notes Accounts under IFRS Liabilities Liabilities Current liabilities Trade payables Borrowings Lease liabilities Income taxes payable Other financial liabilities Other current liabilities Liabilities directly associated with assets held for sale Current liabilities Notes and accounts payable - trade 53,680 △94 501 54,087 Short-term borrowings 122,889 20,000 - 142,889 k Commercial papers 20,000 △20,000 - - - 1,319 652 1,972 j, F Income taxes payable 4,994 - 730 5,724 Provision for bonuses 2,045 △2,045 - - Other 19,967 △19,967 - - - 8,897 △153 8,744 l - 11,299 1,279 12,578 m, G, H - 722 - 722 d Total current liabilities 223,577 131 3,010 226,719 Total current liabilities Non-current liabilities Bonds payable Long-term borrowings Lease liabilities Deferred tax liabilities Retirement benefit liability Other 31,000 59,801 4,750 8,137 2,053 2,722 - - - △38 - - △2,722 2,722 △199 △69 1,863 △1,756 △38 - - 30,800 59,732 6,575 6,381 2,014 - 2,722 F C n Non-current liabilities Bonds payable Long-term borrowings Lease liabilities Deferred tax liabilities Retirement benefit liability Other non-current liabilities Total non-current liabilities 108,466 △38 △200 108,226 Total non-current liabilities Total liabilities 332,043 93 2,809 334,946 Total liabilities Net assets Equity Share capital Capital surplus Retained earnings Treasury shares Other components of equity Equity attributable to owners of parent Non-controlling interests Shareholders' equity Share capital 13,208 - - 13,208 Capital surplus 14,757 29 514 15,300 Retained earnings 149,744 - △4,733 145,010 L Treasury shares △1,919 - - △1,919 Accumulated other comprehensive income - 46,438 △626 45,812 o, A Valuation difference on available- for-sale securities 1,845 △1,845 - - Deferred gains or losses on hedges 1,430 △1,430 - - Foreign currency translation adjustment 42,592 △42,592 - - Remeasurements of defined benefit plans 571 △571 - - - - - 217,413 Non-controlling interests 11,073 - △20 11,052 Total net assets 233,303 29 △4,866 228,466 Total equity Total liabilities and net assets 565,346 122 △2,056 563,412 Total liabilities and equity Reconciliations of equity as of March 31, 2025 (The previous fiscal year consolidated financial statements) (Millions of yen) Accounts under Japanese GAAP Japanese GAAP Reclassification Difference in recognition and measurement IFRS Key Notes Accounts under IFRS Assets a b c d Assets Current assets Cash and cash equivalents Trade receivables Inventories Other financial assets Other current assets Assets held for sale Current assets Cash and deposits 70,616 △10 234 70,840 Notes and accounts receivable - trade 112,520 △222 0 112,298 Merchandise and finished goods 72,946 88,081 △309 160,718 Raw materials and supplies 88,081 △88,081 - - Other 10,871 △10,871 - - Allowance for doubtful accounts △206 206 - - - 1,169 134 1,304 - 9,924 273 10,197 - 8,637 - 8,637 Total current assets 354,830 8,833 333 363,997 Total current assets Non-current assets Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Goodwill Investments accounted for using equity method Retirement benefit asset Deferred tax assets Other financial assets Other non-current assets Property, plant and equipment - 140,606 △2,525 138,081 e, E Buildings and structures, net 45,349 △45,349 - - Machinery, equipment and vehicles, net 59,628 △59,628 - - Land 19,705 △19,705 - - Right-of-use assets, net 7,287 33 1,936 9,257 F Construction in progress 21,334 △21,334 - - Other, net 3,200 △3,200 - - Intangible assets - 32,572 - 32,572 f Goodwill 18,602 - 2,161 20,763 B Customer-related assets 17,287 △17,287 - - Other 15,295 △15,295 - - Investments and other assets - 13,112 313 13,426 g Investment securities 16,631 △16,631 - - Retirement benefit asset 6,638 - △6,598 39 D Deferred tax assets 7,336 - 2,881 10,218 C Other 3,299 △3,299 - - Allowance for doubtful accounts △47 47 - - - 6,547 1,853 8,400 h, A - 224 95 319 i Total non-current assets 241,550 △8,588 117 233,079 Total non-current assets Deferred assets Bond issuance costs 183 - △183 - Total deferred assets 183 - △183 - Total assets 596,564 245 267 597,076 Total assets (Millions of yen) Accounts under Japanese GAAP Japanese GAAP Reclassification Difference in recognition and measurement IFRS Key Notes Accounts under IFRS Liabilities Liabilities Current liabilities Trade payables Borrowings Lease liabilities Income taxes payable Other financial liabilities Other current liabilities Liabilities directly associated with assets held for sale Current liabilities Notes and accounts payable - trade 46,075 △74 537 46,538 Short-term borrowings 175,284 20,000 - 195,284 k Commercial papers 20,000 △20,000 - - - 1,376 685 2,062 j, F Income taxes payable 7,571 - △5 7,566 Provision for bonuses 3,941 △3,941 - - Provision for bonuses for directors (and other officers) 47 △47 - - Other 20,284 △20,284 - - - 10,213 △120 10,093 l - 12,718 1,345 14,063 m, G, H - 259 - 259 d Total current liabilities 273,204 220 2,443 275,867 Total current liabilities Non-current liabilities Bonds payable Long-term borrowings Lease liabilities Deferred tax liabilities Retirement benefit liability Other 31,000 57,691 4,805 10,873 1,851 2,613 - - - △5 - - △2,613 2,613 △188 △65 1,868 △96 △66 - - 30,811 57,625 6,668 10,777 1,784 - 2,613 F C n Non-current liabilities Bonds payable Long-term borrowings Lease liabilities Deferred tax liabilities Retirement benefit liability Other non-current liabilities Total non-current liabilities 108,835 △5 1,452 110,282 Total non-current liabilities Total liabilities 382,040 214 3,895 386,150 Total liabilities Net assets Equity Share capital Capital surplus Retained earnings Treasury shares Other components of equity Equity attributable to owners of parent Non-controlling interests Shareholders' equity Share capital 13,208 - - 13,208 Capital surplus 8,503 30 △91 8,443 Retained earnings 155,205 - △4,260 150,944 L Treasury shares △1,919 - - △1,919 Accumulated other comprehensive income Valuation difference on available- for-sale securities - 1,305 35,499 △1,305 746 - 36,245 - o, A Deferred gains or losses on hedges △560 560 - - Foreign currency translation adjustment Remeasurements of defined benefit plans 34,898 △143 △34,898 143 - - - - - - - 206,923 Non-controlling interests 4,025 - △22 4,003 Total net assets 214,524 30 △3,628 210,926 Total equity Total liabilities and net assets 596,564 245 267 597,076 Total liabilities and equity Reconciliations of profit or loss and comprehensive income for the first nine months period of the previous fiscal year (April 1, 2024 - December 31, 2024) (Millions of yen) Accounts under Japanese GAAP Japanese GAAP Reclassification Difference in recognition and measurement IFRS Key Notes Accounts under IFRS Net sales 491,888 - △4 491,884 Net sales Cost of sales 439,630 279 △2,638 437,270 p, I Cost of sales Gross profit 52,258 △279 2,634 54,613 Gross profit Selling, general and administrative expenses 51,753 163 1,344 53,261 B, I Selling, general and administrative expenses - 918 500 1,419 p Other income - 299 142 442 p Other expenses Operating profit 504 175 1,648 2,328 Operating profit Non-operating income 2,812 △2,812 - - Non-operating expenses 5,552 △5,552 - - Extraordinary income 547 △547 - - Extraordinary losses 310 △310 - - - 1,552 △209 1,342 p Finance income - 5,270 13 5,284 p Finance costs - 1,038 283 1,322 p, B Share of profit (loss) of investments accounted for using equity method Profit (loss) before income taxes △1,999 - 1,708 △291 Profit (loss) before tax Income taxes - current Income taxes - deferred 369 △395 △395 395 122 - 96 - q Income tax expense Profit (loss) △1,972 - 1,585 △387 Profit (loss) Other comprehensive income 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 Items that may be reclassified to profit or loss Cash flow hedges Exchange differences on translation of foreign operations Share of other comprehensive income of investments accounted for using equity method Valuation difference on available-for-sale securities △23 - 300 277 A Remeasurements of defined benefit plans, net of tax △68 - 59 △9 D Deferred gains or losses on hedges 707 - 1,770 2,477 J Foreign currency translation adjustment Share of other comprehensive income of entities accounted for using equity method 1,856 662 - - △63 22 1,793 685 Total other comprehensive income 3,134 - 2,089 5,223 Total other comprehensive income Comprehensive income 1,161 - 3,674 4,835 Comprehensive income Reconciliation of profit or loss and comprehensive income for the previous fiscal year (From April 1, 2024 to March 31, 2025) (Millions of yen) Accounts under Japanese GAAP Japanese GAAP Reclassification Difference in recognition and measurement IFRS Key Notes Accounts under IFRS Net sales 671,211 - △3 671,207 Net sales Cost of sales 591,984 446 △2,858 589,572 p, I Cost of sales Gross profit 79,227 △446 2,855 81,635 Gross profit Selling, general and administrative expenses 69,332 171 1,969 71,473 B, I Selling, general and administrative expenses - 1,398 609 2,008 p Other income - 523 138 662 p Other expenses Operating profit 9,895 256 1,356 11,508 Operating profit Non-operating income 3,267 △3,267 - - Non-operating expenses 7,858 △7,858 - - Extraordinary income 990 △990 - - Extraordinary losses 443 △443 - - - 1,914 △633 1,280 p Finance income - 7,530 48 7,579 p Finance costs - 1,315 375 1,690 p, B Share of profit (loss) of investments accounted for using equity method Profit before income taxes 5,850 - 1,049 6,900 Profit before tax Income taxes - current 12,654 △10,586 △554 1,512 q Income tax expense Income taxes - deferred △10,586 10,586 - - Profit 3,783 - 1,604 5,387 Profit Other comprehensive income A D J 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 Share of other comprehensive income of investments accounted for using equity method Items that may be reclassified to profit or loss Cash flow hedges Exchange differences on translation of foreign operations Share of other comprehensive income of investments accounted for using equity method Valuation difference on available-for-sale securities △563 - 709 145 Remeasurements of defined benefit plans, net of tax △783 - 901 118 - - 0 0 Deferred gains or losses on hedges △1,283 - 1,290 6 Foreign currency translation adjustment Share of other comprehensive income of entities accounted for using equity method △6,254 420 - - △117 45 △6,372 465 Total other comprehensive income △8,464 - 2,828 △5,636 Total other comprehensive income Comprehensive income △4,681 - 4,432 △248 Comprehensive income Notes on reconciliations Reclassification Inventories Merchandise, finished goods, raw materials, and supplies, which were separately presented under Japanese GAAP are reclassified to "Inventories" under IFRS. 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. 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. 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. 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. 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. 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. 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. 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. Lease liabilities Lease liabilities included in other (current liabilities) under Japanese GAAP are reclassified to "Lease liabilities (current liabilities)" under IFRS. Borrowings Commercial paper separately presented under Japanese GAAP are reclassified to "Borrowings" under IFRS. 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. 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. 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. 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. 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. 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. Differences in recognition and measurement 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. 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. 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. 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. 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. 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. Provision for paid absence Unused paid absences, which were not required to be recognized under Japanese GAAP, are recognized as a provision under IFRS. 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. 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. 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. 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. Reconciliation of retained earnings The impact of the reconciliations on retained earnings is as follows (figures in parentheses represent loss). (Millions of yen) As of April 1, 2024 (Transition Date) As of December 31, 2024 As of March 31, 2025 Non-marketable equity instruments (see Note A) 193 108 115 Goodwill (see Note B) - 1,719 2,285 Deferred tax assets and liabilities (see Note C) 368 421 608 Employee benefits (see Note D) △4,207 △4,738 △4,621 Deemed cost (see Note E) △1,908 △1,908 △1,908 Lease liabilities and right-of-use assets (see Note F) △60 △65 △46 Provision for paid absence (see Note G) △789 △789 △862 Levies (see Note H) △388 3 △381 Inventories (see Note I) △253 △219 △309 Financial instrument (Foreign exchange forward contracts) (see Note J) - 55 13 Change in Scope of Consolidation (see Note K) 37 225 239 Other 604 454 606 Reconciliation of retained earnings △6,403 △4,733 △4,260 Reconciliation of cash flows for the nine months ended December 31, 2024 (from 4/1/2024 to 12/31/2024) 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.

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