Fuji Oil : Financial Results 4Q （April 1, 2025 - March 31, 2026）

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. May 12, 2026 Consolidated Financial Results for the Fiscal Year Ended March 31, 2026 (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 for ordinary general meeting of shareholders: June 23, 2026 Scheduled date to commence dividend payments: June 24, 2026 Scheduled date to file annual securities report: June 22, 2026 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 Fiscal Year Ended March 31, 2026 (April 1, 2025 - March 31, 2026) Consolidated operating results (Percentages indicate year-on-year changes.) Net sales Business profit Operating profit Profit before tax Profit Fiscal year ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % Millions of yen % March 31, 2026 772,288 15.1 36,048 171.8 29,822 159.1 23,430 239.5 11,510 113.6 March 31, 2025 671,207 - 13,261 - 11,508 - 6,900 - 5,387 - Profit attributable to owners of parent Total comprehensive income Basic earnings per share Diluted earnings per share Return on equity Ratio of profit before tax to total assets Ratio of business profit to net sales Fiscal year ended Millions of yen % Millions of yen % - - Yen Yen % % % March 31, 2026 11,142 188.4 38,549 129.60 - 5.0 3.8 4.7 March 31, 2025 3,863 - △248 44.94 - 1.8 1.3 2.0 (Note) Share of profit of investments accounted for using equity method For the fiscal year ended March 31, 2026: 239 million yen For the fiscal year ended March 31, 2025: 1,690 million yen 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 Equity attributable to owners of parent per share As of Millions of yen Millions of yen Millions of yen % Yen March 31, 2026 636,933 244,477 240,159 37.7 2,793.12 March 31, 2025 597,076 210,926 206,923 34.7 2,406.81 Consolidated cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of fiscal year Fiscal year ended March 31, 2026 March 31, 2025 Millions of yen 54,840 △48,828 Millions of yen △46,847 △21,753 Millions of yen △38,590 113,188 Millions of yen 46,811 70,840 Cash dividends Annual dividends per share Total dividends (annual) Payout ratio (consolidated) Ratio of dividends to equity attributable to owners of parent (consolidated) First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Fiscal year ended March 31, 2025 Fiscal year ended March 31, 2026 Yen Yen Yen Yen Yen Millions of yen % % - - 26.00 26.00 - - 26.00 26.00 52.00 52.00 4,475 4,483 115.7 40.1 2.1 2.0 Fiscal year ending March 31, 2027(Forecast) - 31.00 - 31.00 62.00 27.3 Consolidated forecasts for the fiscal year ending March 31, 2027 (April 1, 2026 - March 31, 2027) (Percentages indicate year-on-year changes.) Net sales Business profit Profit attributable to owners of parent Profit per share Fiscal year ending March 31, 2027 Millions of yen 754,000 % △2.4 Millions of yen 37,500 % 4.0 Millions of yen 19,500 % 75.0 Yen 226.79 * 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 or changes in accounting estimates 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 March 31, 2026 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 March 31, 2026 1,586,896 shares As of March 31, 2025 1,595,432 shares Average number of shares outstanding during the period Fiscal Year ended March 31, 2026 85,979,274 shares Fiscal Year ended March 31, 2025 85,970,724 shares Consolidated financial results reports are exempt from review 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. Actual results may differ from the forecasts in this report due to various factors. For matters related to the above forecast, please see "1. Qualitative Information on Results fot the Fiscal Year Ended March 31, 2026, (3) Future Outlook (P.4, Accompanying Materials)". 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 "3. Consolidated Financial Statements, (5) Notes to 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 materials on financial results Supplementary materials on financial results are disclosed in Investor Relations on our company's website on the same day. Accompanying Materials - Contents Qualitative Information on Results for the Fiscal Year Ended March 31, 2026 2 Details of Operating Results 2 Details of Financial Position 3 Future Outlook 4 Basic Policy on the Payment of Dividends and Dividends for the Fiscal Year under Review and Next Fiscal Year… 5 Basic Concept concerning the Selection of Accounting Standards… 6 Consolidated Financial Statements 7 Consolidated Statements of Financial Position 7 Consolidated Statements of Income and Comprehensive Income 9 Consolidated Statements of Income 9 Consolidated Statements of Comprehensive Income 10 Consolidated Statements of Changes in Equity 11 Consolidated Statements of Cash flows 12 Notes to Consolidated Financial Statements 14 (Notes Relating to Assumptions for the Going Concern) 14 (Segment Information) 14 (Per Share Information) 17 (First-Time Adoption of IFRS) 18 Qualitative Information on Results for the Fiscal Year Ended March 31, 2026 Details of Operating Results During the current consolidated fiscal year, business conditions remained challenging due to concerns over U.S. tariff policies, the economic impact associated with rising geopolitical risks and economic trends in China. In Japan, although the effects of rising prices continued, consumer spending remained firm supported by factors such as improvements in employment and income conditions. The Group has formulated a Mid-Term Management Plan, United for Growth 2027, for the three-year period between fiscal year 2025 and fiscal year 2027. With the aim of sustainable growth in corporate value, the Group has set three basic policies of Enhance Governance, Further Strengthen Growth Fields, and Establish New Business Fields. Under these policies, the Group will focus on implementing an effective governance structure across the business and functional axes, further strengthening its core competencies in growth areas such as vegetable fats for chocolate (CBE) and compound chocolate, and fostering unique and innovative business fields that will serve as new pillars of business. The fiscal year ended March 31, 2026, the first year of the Mid-Term Management Plan, the Group demonstrated its core competencies in growth areas centered on vegetable fats for chocolate (CBE), leading to improvements in profitability. Blommer Chocolate Company, LLC (USA, hereinafter "Blommer") has been promoting a structural reform program announced in March 2024 and remains in the process of recovery after recording a loss in fiscal year 2024, reflecting higher procurement prices for cocoa. However, due to prolonged weak demand and increased fixed costs caused by improving business operation, disparities arose between the initial business plan and actual results. Under these circumstances, we determined that it would take time to realize the earnings initially anticipated for Blommer, we have recorded an impairment loss on goodwill and a deferred tax expense resulting from the reversal of deferred tax assets related to Blommer. To improve Blommer's profitability, the Group is implementing measures such as reducing risks by strengthening governance systems and expanding sales of compound chocolate by leveraging the Group's technological strengths. Operating results for the fiscal year ended were as follows. Net sales Business profit Profit before tax Profit attributable to owners of parent Fiscal year ended March 31, 2026 March 31, 2025 Millions of yen 772,288 671,207 Millions of yen 36,048 13,261 Millions of yen 23,430 6,900 Millions of yen 11,142 3,863 Change +101,080 +22,787 +16,529 +7,278 +15.1% +171.8% +239.5% +188.4% 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 bean prices following a surge in 2024. Business profit increased due to steady sales of vegetable fats for chocolate in the Vegetable Oils and Fats segment and stabilization of cocoa beans prices and a decline in cocoa bean-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 recognition of an impairment loss on goodwill and a deferred tax expense resulting from the reversal of deferred tax assets related to Blommer. 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 271,076 +63,747 +30.7% 33,394 +6,612 +24.7% Industrial Chocolate 370,904 +36,219 +10.8% 2,391 +16,560 - Emulsified and Fermented Ingredients 97,432 +3,180 +3.4% 1,144 △556 △32.7% Soy-based Ingredients 32,874 △2,066 △5.9% △874 △57 - Adjustment - - - △8 +226 - Total 772,288 +101,080 +15.1% 36,048 +22,787 +171.8% (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 bean-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 consolidated fiscal year is as follows. (Millions of yen) As of March 31, 2025 As of March 31, 2026 Change Current assets Non-current assets 363,997 233,079 359,051 277,881 △4,946 +44,802 Assets 597,076 636,933 +39,856 Interest-bearing debt Other 283,721 102,428 268,381 124,074 △15,340 +21,645 Liabilities 386,150 392,455 +6,305 Equity 210,926 244,477 +33,550 (Assets) Current assets decreased due to a decrease in cash and cash equivalents despite an increase in inventories and trade receivables attributable to rising raw material prices and a newly consolidated company. 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 39,856 million yen from the end of the previous consolidated fiscal year to 636,933 million yen. (Liabilities) Liabilities increased due to an increase in trade payables which are included in other despite a decrease in interest-bearing debt from a decrease in working capital. As a result, liabilities increased by 6,305 million yen from the end of the previous consolidated fiscal year to 392,455 million yen. (Equity) Equity increased by 33,550 million yen from the end of the previous year to 244,477 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, euro, and Brazilian real. Details of Consolidated Cash Flows The cash flows for the fiscal year ended are as follows. (Millions of yen) Fiscal year ended March 31, 2025 Fiscal year ended March 31, 2026 Change Cash flows from operating activities △48,828 54,840 +103,669 Cash flows from investing activities △21,753 △46,847 △25,094 Free Cash flows △70,581 7,993 +78,575 Cash flows from financing activities 113,188 △38,590 △151,778 Cash and cash equivalents at end of period 70,840 46,811 △24,029 (Cash flows from operating activities) Cash flows from operating activities for the current consolidated fiscal year resulted in income of 54,840 million yen. Income increased by 103,669 million yen compared to 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 current consolidated fiscal year resulted in expenditures of 46,847 million yen. Expenditures increased by 25,094 million yen compared to 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 current consolidated fiscal year resulted in expenditures of 38,590 million yen. Expenditures increased by 151,778 million yen compared to the previous consolidated fiscal year due to the rebound of the previous year and the repayment of borrowings using of funds in hand. Future Outlook For the fiscal year ending March 31, 2027, the Company forecasts consolidated net sales of 754,000 million yen, business profit of 37,500 million yen, and profit attributable to owners of parent of 19,500 million yen. The Fuji Oil Group has formulated the Mid-Term Management Plan "United for Growth 2027," covering the three-year period from fiscal year 2025 to fiscal year 2027. In the Vegetable Oils and Fats segment, we expect market uncertainty to continue due to factors such as climate change and geopolitical viewpoint. Under these circumstances, we aim to build a profit structure that does not affected by price competition by further enhancing the value of raw materials through sustainable procurement from the raw material stage and advancing the sophistication of functional products.In the Industrial Chocolate segment, we will work to restore Blommer's fundamental earnings capacity while advancing the establishment of a supply system for compound chocolate. Across the entire business, we will leverage our strengths in compound chocolate manufacturing technologies and application proposal capabilities to expand sales.In the Emulsified and Fermented Ingredients segment, we will accelerate expansion into regions with strong growth potential, such as Southeast Asia and China, while optimizing product lineups in accordance with the market characteristics of each region. In the Soy-based Ingredients Business, amid a challenging business environment marked by intensifying competition with Chinese products, we will strengthen cost competitiveness including further improvements in productivity and promote initiatives to improve profitability. In addition, by strengthening Group-wide management control framework and risk management, and by advancing the centralized oversight and optimal allocation of resources, we will ensure the realization of the growth trajectory outlined in this Mid-Term Management Plan, even amid a challenging business environment, and continue to enhance corporate value. Basic Policy on the Payment of Dividends and Dividends for the Fiscal Year under Review and Next Fiscal Year The Company regards stable payment, aiming for a dividend payout ratio of 30% to 40% after taking into consideration the internal reserves necessary for investment in future growth and business development, as an important policy of return to shareholders. Based on the policy, we plan to pay a year-end dividend of 26 yen per share for the current fiscal year, bringing the total annual dividend to 52 yen per share, in order to respond to the support of our shareholders. For the next fiscal year, we plan to pay an annual dividend of 62 yen per share. Basic Concept concerning the Selection of Accounting Standards The Group has voluntarily adopted International Financial Reporting Standards ("IFRS") for its consolidated financial statements from the first three months of the fiscal year ending March 31, 2026. Consolidated Financial Statements Consolidated Statements of Financial Position (Millions of yen) Transition Date (As of April 1, 2024) As of March 31, 2025 As of March 31, 2026 Assets Current assets Cash and cash equivalents 28,499 70,840 46,811 Trade receivables 92,399 112,298 115,202 Inventories 109,349 160,718 182,031 Other financial assets 2,888 1,304 2,736 Other current assets 13,427 10,197 12,270 Assets held for sale - 8,637 - Total current assets 246,565 363,997 359,051 Non-current assets Property, plant and equipment 141,344 138,081 165,950 Right-of-use assets 10,048 9,257 13,200 Intangible assets 33,605 32,572 41,317 Goodwill 21,907 20,763 26,632 Investments accounted for using equity method 11,134 13,426 16,102 Retirement benefit asset 39 39 - Deferred tax assets 2,496 10,218 5,398 Other financial assets 9,426 8,400 8,790 Other non-current assets 624 319 488 Total non-current assets 230,628 233,079 277,881 Total assets 477,193 597,076 636,933 (Millions of yen) Transition Date (As of April 1, 2024) As of March 31, 2025 As of March 31, 2026 Liabilities Current liabilities Trade payables 41,013 46,538 68,082 Borrowings 64,373 195,284 158,541 Current portion of bonds payable 34,989 - - Lease liabilities 2,410 2,062 2,615 Income taxes payable 4,316 7,566 4,712 Other financial liabilities 6,148 10,093 8,140 Other current liabilities 15,589 14,063 15,231 Liabilities directly associated with assets held for sale - 259 - Total current liabilities 168,842 275,867 257,324 Non-current liabilities Bonds payable 5,978 30,811 30,859 Long-term borrowings 43,496 57,625 78,980 Lease liabilities 7,168 6,668 10,101 Deferred tax liabilities 14,627 10,777 10,870 Retirement benefit liability 1,985 1,784 1,678 Other non-current liabilities 2,526 2,613 2,640 Total non-current liabilities 75,781 110,282 135,131 Total liabilities 244,624 386,150 392,455 Equity Share capital 13,208 13,208 13,208 Capital surplus 15,323 8,443 8,715 Retained earnings 151,046 150,944 157,829 Treasury shares △1,947 △1,919 △2,154 Other components of equity 42,846 36,245 62,560 Equity attributable to owners of parent 220,477 206,923 240,159 Non-controlling interests 12,091 4,003 4,318 Total equity 232,569 210,926 244,477 Total liabilities and equity 477,193 597,076 636,933 Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income (Millions of yen) Fiscal year ended March 31, 2025 Fiscal year ended March 31, 2026 Net sales 671,207 772,288 Cost of sales 589,572 661,343 Gross profit 81,635 110,944 Selling, general and administrative expenses 71,473 77,611 Other income 2,008 1,957 Other expenses 662 5,468 Operating profit 11,508 29,822 Finance income 1,280 1,550 Finance costs 7,579 8,182 Share of profit (loss) of investments accounted for using equity method 1,690 239 Profit (loss) before tax 6,900 23,430 Income tax expense 1,512 11,919 Profit (loss) 5,387 11,510 Profit (loss) attributable to Owners of parent 3,863 11,142 Non-controlling interests 1,523 367 Earnings (loss) per share Basic earnings (loss) per share (yen) Diluted earnings (loss) per share (yen) 44.94 - 129.60 - Consolidated Statements of Comprehensive Income (Millions of yen) Fiscal year ended March 31, 2025 Fiscal year ended March 31, 2026 Profit (Loss) 5,387 11,510 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 145 667 118 49 △0 △1 Total of items that will not be reclassified to profit or loss 263 716 Items that may be reclassified to profit or loss Cash flow hedges 6 1,646 Exchange differences on translation of foreign operations △6,372 23,720 Share of other comprehensive income of investments accounted for using equity method 465 955 Total of items that may be reclassified to profit or loss △5,899 26,323 Total other comprehensive income △5,636 27,039 Comprehensive income △248 38,549 Comprehensive income attributable to Owners of parent △1,543 38,010 Non-controlling interests 1,294 539 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) - - 3,863 - - 3,863 1,523 5,387 Other comprehensive income - - - - △5,407 △5,407 △229 △5,636 Comprehensive income - - 3,863 - △5,407 △1,543 1,294 △248 Dividends of surplus - - △4,475 - - △4,475 △2,699 △7,174 Purchase of treasury shares - - - △0 - △0 - △0 Disposal of treasury shares - - - 28 - 28 - 28 Changes in ownership interest in subsidiaries Transfer from other components of equity to retained earnings - - △6,858 - - 509 - - 606 △509 △6,252 - △6,683 - △12,936 - Share-based payment transactions - △20 - - - △20 - △20 Other - - - - △1,290 △1,290 - △1,290 Total transactions with owners - △6,879 △3,965 27 △1,193 △12,011 △9,382 △21,394 Balance at end of period 13,208 8,443 150,944 △1,919 36,245 206,923 4,003 210,926 For the fiscal year ended March 31, 2025 For the fiscal year ended March 31, 2026 (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) - - 11,142 - - 11,142 367 11,510 Other comprehensive income - - - - 26,867 26,867 171 27,039 Comprehensive income - - 11,142 - 26,867 38,010 539 38,549 Dividends of surplus - - △4,479 - - △4,479 △329 △4,808 Purchase of treasury shares - - - △421 - △421 - △421 Disposal of treasury shares - 259 - 186 - 446 - 446 Changes in ownership interest in subsidiaries Transfer from other components of equity to retained earnings - - - - - 221 - - - △221 - - - - - - Share-based payment transactions - 11 - - - 11 - 11 Other - - - - △331 △331 104 △226 Total transactions with owners - 271 △4,257 △235 △553 △4,774 △224 △4,999 Balance at end of period 13,208 8,715 157,829 △2,154 62,560 240,159 4,318 244,477 Consolidated Statements of Cash flows (Millions of yen) Fiscal year ended March 31, 2025 Fiscal year ended March 31, 2026 Cash flows from operating activities Profit (loss) before tax 6,900 23,430 Depreciation and amortization 19,337 21,356 Decrease (increase) in retirement benefit asset 0 39 Increase (decrease) in retirement benefit liability 18 △166 Interest and dividend income △1,060 △1,098 Interest expenses 6,712 7,884 Impairment losses 113 5,516 Loss on disaster - 46 Share of loss (profit) of investments accounted for using equity method △1,690 △239 Loss (gain) on disposal of non-current assets 239 407 Loss (gain) on sale of shares of subsidiaries and associates △291 - Decrease (increase) in trade receivables △22,866 8,426 Decrease (increase) in inventories △53,458 △4,563 Increase (decrease) in trade payables 7,372 13,367 Decrease (increase) in advance payments to suppliers 4,240 △268 Other △446 1,051 Subtotal △34,878 75,189 Interest and dividends received 1,478 1,103 Interest paid △6,285 △8,188 Income taxes refund (paid) △9,142 △13,229 Proceeds from insurance income - 8 Payments for loss on disaster - △43 Net cash provided by (used in) operating activities △48,828 54,840 Cash flows from investing activities Purchase of property, plant and equipment △21,189 △26,408 Proceeds from sale of property, plant and equipment 529 188 Purchase of intangible assets △3,165 △3,094 Payments for acquisition of subsidiaries - △16,726 Proceeds from sale of shares of subsidiaries 1,819 - Purchase of shares of associates △583 △1,482 Payments for investments in capital △82 △34 Other 919 710 Net cash provided by (used in) investing activities △21,753 △46,847 (Millions of yen) Fiscal year ended March 31, 2025 Fiscal year ended March 31, 2026 Cash flows from financing activities Net increase (decrease) in short-term borrowings 125,537 △88,581 Net increase (decrease) in commercial papers 10,000 - Proceeds from long-term borrowings 17,629 64,921 Repayments of long-term borrowings △6,635 △7,080 Proceeds from issuance of bonds 25,000 - Redemption of bonds △35,000 - Dividends paid △4,475 △4,479 Dividends paid to non-controlling interests △2,699 △329 Payments for acquisition of interests in subsidiaries from non-controlling interests △12,936 - Purchase of treasury shares △0 △0 Other △3,231 △3,040 Net cash provided by (used in) financing activities 113,188 △38,590 Effect of exchange rate changes on cash and cash equivalents △265 6,567 Net increase (decrease) in cash and cash equivalents 42,341 △24,029 Cash and cash equivalents at beginning of period 28,499 70,840 Cash and cash equivalents at end of period 70,840 46,811 Notes to Consolidated Financial Statements (Notes Relating to Assumptions for the Going Concern) Not applicable. (Segment Information) Reported segment The Company's reportable segments are the constituent units of the Company for which separate financial information is available and which are subject to periodic review by the Board of Directors in order to determine the allocation of management resources and evaluate performance. The Group is mainly engaged in the manufacture and sale of vegetable oils and fats products, industrial chocolate products, emulsified and fermented ingredients products and soy-based ingredients products, and is engaged in business activities in Japan and overseas for each product group handled. Therefore, the Group is composed of business segments based on product groups, and the four reportable segments are "vegetable oils and fats business", "industrial chocolate business", "emulsified and fermented ingredients business" and "soy-based ingredients business." The business activities of each reported segment are as follows. Reported segments Business activities Vegetable Oils and Fats Manufacturing and sales of edible processed oils and fats, edible oils, and fats for chocolate products, using vegetable oils such as palm oil and palm kernel oil Industrial Chocolate Manufacturing and sales of chocolate products, compound chocolate, and cocoa products Emulsified and Fermented Ingredients Manufacturing and sales of cream, margarine, fillings, and other related products Soy-based Ingredients Manufacturing and sales of soy protein ingredients, soy protein foods, and water-soluble soy polysaccharides From the current fiscal year, the Company has allocated corporate expenses that were previously not allocated to each reported segment and were included in "Adjustment". The segment information for the previous fiscal year has been presented in accordance with the changed allocation method. Reported segment information Profits of reportable segments are based on business profit. Intersegment sales are based on prevailing market prices. Transition date (as of April 1, 2024) (Millions of yen) Reported segments Total Adjustment Consolidated total Vegetable Oils and Fats Industrial Chocolate Emulsified and Fermented Ingredients Soy-based Ingredients Segment asset 127,192 222,420 60,398 45,096 455,107 22,086 477,193 Previous consolidated fiscal year (April 1, 2024 - March 31, 2025) (Millions of yen) Reported segments Total Adjustment (Note 1) Consolidated total Vegetable Oils and Fats Industrial Chocolate Emulsified and Fermented Ingredients Soy-based Ingredients Net sales Sales to external customers Intersegment sales 207,329 27,509 334,684 3,877 94,252 5,594 34,941 199 671,207 37,181 - △37,181 671,207 - Total 234,839 338,561 99,846 35,141 708,389 △37,181 671,207 Business profit (loss) (Note 2) 26,781 △14,168 1,700 △817 13,496 △235 13,261 Others Depreciation and amortization Impairment losses Investments accounted for using equity method Capital expenditure (Note 3) 5,086 - 12,965 5,477 7,465 - 460 17,173 3,862 - - 3,121 2,923 113 - 4,528 19,337 113 13,426 30,301 - - - 579 19,337 113 13,426 30,881 Segment asset 151,895 312,341 61,320 41,305 566,862 30,214 597,076 (Note) 1. Adjustment of business profit (loss) △235 million yen includes the elimination of intersegment transactions. 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. Capital expenditure includes amounts attributable to right-of-use assets. Consolidated fiscal year under review (April 1, 2025 - March 31, 2026) (Millions of yen) Reported segments Total Adjustment (Note 1) Consolidated total Vegetable Oils and Fats Industrial Chocolate Emulsified and Fermented Ingredients Soy-based Ingredients Net Sales Sales to external customers Intersegment sales 271,076 33,273 370,904 4,305 97,432 7,111 32,874 70 772,288 44,760 - △44,760 772,288 - Total 304,350 375,209 104,543 32,945 817,048 △44,760 772,288 Business profit (loss) (Note 2) 33,394 2,391 1,144 △874 36,056 △8 36,048 Others Depreciation and amortization Impairment losses Investments accounted for using equity method Capital expenditure (Note 3) 6,327 204 15,434 8,126 8,313 4,260 667 14,948 3,865 226 - 4,834 2,850 825 - 3,722 21,356 5,516 16,102 31,632 - - - 780 21,356 5,516 16,102 32,412 Segment asset 203,671 300,789 62,453 40,751 607,665 29,267 636,933 (Note) 1. Adjustment of business profit (loss) △8 million yen includes the elimination of intersegment transactions. 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. Capital expenditure includes amounts attributable to right-of-use assets. The adjustments from business profit to profit (loss) before tax are as follows: Fiscal Year Ended March 31, 2025 (Millions of yen) Fiscal Year Ended March 31, 2026 Business profit 13,261 36,048 Gain on sale of fixed assets 64 64 Loss on disposal of fixed assets △303 △471 Gain on sale of shares of associates 291 － Impairment losses △113 △5,516 Share of loss (profit) of investments accounted for using the equity method △1,690 △239 Other 0 △62 Operating profit 11,508 29,822 Finance income 1,280 1,550 Finance costs △7,579 △8,182 Share of profit (loss) of investments accounted for using equity method 1,690 239 Profit (loss) before tax 6,900 23,430 (Per Share Information) Basic earnings per share and the basis for its calculation are as follows. Since no dilutive potential ordinary shares exist, diluted earnings per share is omitted. Fiscal Year Ended March 31, 2025 Fiscal Year Ended March 31, 2026 Basic earnings per share (yen) 44.94 129.60 (Basis for Calculation) Profit attributable to owners of parent (millions of yen) 3,863 11,142 Weighted average number of common shares (thousand shares) 85,970 85,979 (Notes) The Company is applying stock remuneration system for its directors (excluding outside directors and directors serving as audit and supervisory committee member) and executive officers. The weighted average number of shares during the consolidated fiscal year under review, which is the basis for calculating "Basic earnings per share," includes the Company shares held by the Trust in treasury stock, which are deducted in the calculation. The weighted average number of such treasury shares during the period deducted for the calculation of basic earnings per share is 183,308 shares for the consolidated fiscal year under review (103,709 shares for the previous consolidated fiscal year). (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 March 31, 2025 (The previous consolidated 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 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 Reconciliation of profit or loss and comprehensive income for the previous fiscal year (April 1, 2024 - 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 papers 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 (expenses), 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 income", "Other 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. In addition, the portion of actuarial gains and losses and past service cost arising from the plan that were not recognized as an expense were recognized in accumulated other comprehensive income and subsequently recognized in profit or loss over a certain future period. 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. The fair value of the applicable property, plant and equipment as of the transition date was 2,901 million yen, which was 2,532 million yen lower than the carrying amount under Japanese GAAP. 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 March 31, 2025 Non-marketable equity instruments (see Note A) 193 115 Goodwill (see Note B) - 2,285 Deferred tax assets and liabilities (see Note C) 368 608 Employee benefits (see Note D) △4,207 △4,621 Deemed cost (see Note E) △1,908 △1,908 Lease liabilities and right-of-use assets (see Note F) △60 △46 Provision for paid absence (see Note G) △789 △862 Levies (see Note H) △388 △381 Inventories (see Note I) △253 △309 Financial instrument (Foreign exchange forward contracts) (see Note J) - 13 Change in Scope of Consolidation (see Note K) 37 239 Other 604 606 Reconciliation of retained earnings △6,403 △4,260 Reconciliation of cash flows for the previous fiscal year ended March 31, 2025 (April 1, 2024 - March 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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