Summary of Consolidated Financial Results for the Year Ended March 31, 2025

(Consolidated subsidiary) Fujimori Sangyo Co., Ltd.

(Overseas consolidated subsidiaries)

FS China CO., LTD.

C u s t o m e r s

(Consolidated subsidiary)

Matsuya Cellophane Co., Ltd.

(Overseas consolidated subsidiaries)

ZACROS (THAILAND) CO., LTD.

(Overseas consolidated subsidiaries)

ZACROS MALAYSIA SDN. BHD.

(Overseas consolidated subsidiaries)

ZACROS (HONG KONG)

CO., LTD.

(Overseas consolidated subsidiaries)

ZACROS (SHENZHEN) CO., LTD. Ltd.

1. Basic Policy on the Selection of Accounting Standards

   The ZACROS Group prepares its consolidated financial statements in accordance with Japanese GAAP. In so doing, it takes into account the comparability of financial information across periods and companies. The group's response to adopting the International Financial Reporting Standards (IFRS) will be based on developments in Japan and overseas.

2. Consolidated Financial Statements and Significant Notes Thereto
   1. Consolidated balance sheets

      (Millions of yen)

      	Fiscal year ended March 31, 2024	Fiscal year ended March 31, 2025
      Assets
      Current assets
      Cash and deposits	15,516	14,986
      Notes receivable - trade	6,414	6,299
      Accounts receivable - trade	33,971	32,978
      Contract assets	587	1,987
      Securities	16,596	7,495
      Merchandise and finished goods	7,920	7,928
      Work in process	2,136	2,153
      Raw materials and supplies	5,264	6,525
      Other	4,584	6,500
      Allowance for doubtful accounts	(106)	(72)
      Total current assets	92,885	86,783
      Noncurrent assets
      Property, plant and equipment
      Buildings and structures	47,790	56,613
      Accumulated depreciation	(29,828)	(29,568)
      Buildings and structures, net	17,961	27,044
      Machinery, equipment and vehicles	68,459	69,654
      Accumulated depreciation	(58,077)	(59,306)
      Machinery, equipment and vehicles, net	10,381	10,347
      Tools, furniture and fixtures	8,370	8,753
      Accumulated depreciation	(7,376)	(7,618)
      Tools, furniture and fixtures, net	993	1,135
      Land	8,718	9,138
      Construction in progress	3,738	12,355
      Other	2,499	2,614
      Accumulated depreciation	(1,136)	(1,176)
      Other, net	1,363	1,437
      Total property, plant and equipment	43,158	61,459
      Intangible assets
      Goodwill	162	102
      Other	637	767
      Total intangible assets	800	870
      Investments and other assets
      Investment securities	2,502	2,667
      Deferred tax assets	1,494	1,282
      Other	852	875
      Allowance for doubtful accounts	(13)	(11)
      Total investments and other assets	4,836	4,814
      Total noncurrent assets	48,795	67,143
      Total assets	141,680	153,926

      (Millions of yen)

      	Fiscal year ended March 31, 2024	Fiscal year ended March 31, 2025
      Liabilities
      Current liabilities
      Notes and accounts payable-trade	26,311	22,695
      Short-term loans payable	1,579	595
      Accounts payable-other	4,618	13,333
      Income taxes payable	1,813	994
      Contract liabilities	381	373
      Provision for bonuses	1,683	1,801
      Provision for directors' bonuses	119	138
      Allowance for contingent losses	2,198	-
      Other	2,075	2,634
      Total current liabilities	40,781	42,566
      Noncurrent liabilities
      Long-term loans payable	75	4,074
      Deferred tax liabilities	55	79
      Net defined benefit liability	4,956	4,204
      Provision for directors' retirement benefits	592	611
      Other	1,577	1,695
      Total noncurrent liabilities	7,257	10,665
      Total liabilities	48,038	53,231
      Net assets
      Shareholders' equity
      Capital stock	6,600	6,600
      Capital surplus	6,515	6,559
      Retained earnings	70,265	74,738
      Treasury shares	(2,220)	(2,576)
      Total shareholders' equity	81,161	85,322
      Accumulated other comprehensive income
      Valuation difference on available-for-sale securities	827	981
      Foreign currency translation adjustment	3,557	4,954
      Remeasurements of defined benefit plans	62	392
      Total accumulated other comprehensive income	4,446	6,328
      Subscription rights to shares	351	351
      Noncontrolling interests	7,682	8,692
      Total net assets	93,642	100,695
      Total liabilities and net assets	141,680	153,926

   2. Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income

      (Millions of yen)

      Fiscal year ended March 31, 2024	Fiscal year ended March 31, 2025
      Net sales	136,155	150,735
      Cost of sales	106,410	115,999
      Gross profit	29,744	34,735
      Selling, general and administrative expenses	21,400	24,618
      Operating income	8,344	10,116
      Nonoperating income
      Interest income	170	299
      Dividend income	75	65
      Insurance and dividend income	114	97
      Foreign exchange gains	41	163
      Subsidy income	58	3
      Income from recycling	85	116
      Other	131	195
      Total nonoperating income	678	941
      Nonoperating expenses
      Interest expenses	73	135
      Loss on investments in investment partnerships	27	22
      Costs for responding to system failures	-	237
      Losses associated with production stoppages	-	254
      Other	11	42
      Total nonoperating expenses	112	692
      Ordinary income	8,910	10,366
      Extraordinary income
      Gain on sales of noncurrent assets	21	12
      Gain on sales of investment securities	911	9
      Total extraordinary income	933	22
      Extraordinary losses
      Loss on sale of fixed assets	10	-
      Loss on retirement of noncurrent assets	49	45
      Loss on business transfers	-	57
      Impairment Loss	216	254
      Loss on sale of investment securities	-	1
      Loss on valuation of investment securities	145	404
      Provision for contingent loss	2,198	-
      Other	-	8
      Total extraordinary losses	2,619	773
      Income before income taxes	7,223	9,614
      Income taxes-current	2,666	2,332
      Income taxes-deferred	(548)	(165)
      Total income taxes	2,118	2,167
      Net income	5,104	7,447
      Net income attributable to noncontrolling interests	572	916
      Net income attributable to owners of parent	4,532	6,530

      Consolidated statements of comprehensive income

      (Millions of yen)

      Fiscal year ended March 31, 2024	Fiscal year ended March 31, 2025
      Net income	5,104	7,447
      Other comprehensive income
      Valuation difference on available-for-sale securities	(355)	152
      Foreign currency translation adjustment	1,590	1,625
      Remeasurements of defined benefit plans, net of tax	3	335
      Total other comprehensive income	1,238	2,113
      Comprehensive income	6,343	9,560
      Comprehensive income attributable to
      Owners of parent	5,458	8,412
      Noncontrolling interests	884	1,148

   3. Consolidated statement of changes in shareholders' equity Previous fiscal year (April 1, 2023-March 31, 2024) Statement of changes in shareholders' equity (Excerpt)

      (Millions of yen)
      	Shareholders' Equity
      	Capital Stock	Capital Surplus	Retained Earnings	Treasury Stock	Total Shareholders' Equity
      Balance at beginning of current period	6,600	6,498	66,780	(1,335)	78,544
      Changes of items during period
      Dividends of surplus			(1,581)		(1,581)
      Net income attributable to owners of parent			4,532		4,532
      Purchase of treasury shares				(974)	(974)
      Restricted share awards		10		51	61
      Exercise of stock options		(2)		37	35
      Changes in equity of parent due to transactions with noncontrolling interests		9			9
      Change in scope of consolidation			533		533
      Net changes of items other than shareholders' equity
      Total changes during the period	-	17	3,484	(885)	2,616
      Balance at end of period	6,600	6,515	70,265	(2,220)	81,161

      	Accumulated Other Comprehensive Income				Stock Acquisition Rights	Non controlling Interests	Total Net Assets
      	Valuation Difference on Available-for-Sale Securities	Foreign Currency Translation Adjustment	Remeasurements of Defined Benefit Plans	Total Other Comprehensive Income
      Balance at beginning of current period	1,197	2,269	53	3,520	386	6,829	89,281
      Changes of items during period
      Dividends of surplus							(1,581)
      Net income attributable to owners of parent							4,532
      Purchase of treasury shares							(974)
      Restricted share awards							61
      Exercise of stock options					(35)		0
      Changes in equity of parent due to transactions with noncontrolling interests							9
      Change in scope of consolidation							533
      Net changes of items other than shareholders' equity	(370)	1,287	9	926	-	852	1,779
      Total changes during the period	(370)	1,287	9	926	(35)	852	4,361
      Balance at end of period	827	3,557	62	4,446	351	7,682	93,642

      Current consolidated fiscal year (from April 1, 2024 to March 31, 2025)

      (Millions of yen)
      	Shareholders' Equity
      	Capital Stock	Capital Surplus	Retained Earnings	Treasury Stock	Total Shareholders' Equity
      Balance at beginning of current period	6,600	6,515	70,265	(2,220)	81,161
      Changes of items during period
      Dividends of surplus			(1,952)		(1,952)
      Net income attributable to owners of parent			6,530		6,530
      Purchase of treasury shares				(409)	(409)
      Restricted share awards		19		54	73
      Exercise of stock options
      Changes in equity of parent due to transactions with noncontrolling interests		24			24
      Change in scope of consolidation			(105)		(105)
      Net changes of items other than shareholders' equity
      Total changes during the period	-	44	4,472	(355)	4,161
      Balance at end of period	6,600	6,559	74,738	(2,576)	85,322

      	Accumulated Other Comprehensive Income				Stock Acquisition Rights	Non controlling Interests	Total Net Assets
      	Valuation Difference on Available-for- Sale Securities	Foreign Currency Translation Adjustment	Remeasurements of Defined Benefit Plans	Total Other Comprehensive Income
      Balance at beginning of current period	827	3,557	62	4,446	351	7,682	93,642
      Changes of items during period
      Dividends of surplus							(1,952)
      Net income attributable to owners of parent							6,530
      Purchase of treasury shares							(409)
      Restricted share awards							73
      Exercise of stock options
      Changes in equity of parent due to transactions with noncontrolling interests							24
      Change in scope of consolidation							(105)
      Net changes of items other than shareholders' equity	154	1,397	330	1,881	-	1,010	2,891
      Total changes during the period	154	1,397	330	1,881	-	1,010	7,052
      Balance at end of period	981	4,954	392	6,328	351	8,692	100,695

   4. Consolidated statements of cash flows

      (Millions of yen)

      Fiscal year ended March 31, 2024	Fiscal year ended March 31, 2025
      Cash flows from operating activities
      Income before income taxes	7,223	9,614
      Depreciation	5,866	5,987
      Impairment loss	216	254
      Amortization of goodwill	65	67
      Increase (decrease) in provision for directors' retirement benefits	15	19
      Increase (decrease) in provision for bonuses	377	135
      Increase (decrease) in provision for directors' bonuses	27	19
      Increase (decrease) in allowance for doubtful accounts	21	(43)
      Increase (decrease) in net defined benefit liability	117	(66)
      Increase(decrease) in provision for contingent losses	2,198	-
      Interest and dividend income	(246)	(365)
      Interest expenses	73	135
      Loss (gain) on sales and retirement of noncurrent assets	38	33
      Loss (gain) on business transfers	-	57
      Loss (gain) on sales of investment securities	(911)	(7)
      Valuation losses (gains) on investment securities	-	404
      Loss (gain) on investments in investment partnerships	27	22
      Share-based compensation expenses	62	61
      Decrease (increase) in notes and accounts receivable- trade	(5,351)	(852)
      Decrease (increase) in inventories	(368)	(1,557)
      Increase (decrease) in notes and accounts payable- trade	2,470	(3,355)
      Other	(570)	(982)
      Subtotal	11,353	9,581
      Interest and dividend income received	246	365
      Interest expenses paid	(73)	(134)
      Income taxes paid	(1,442)	(3,223)
      Net cash provided by (used in) operating activities	10,083	6,588
      Cash flows from investing activities
      Purchases of property, plant and equipment	(6,736)	(17,731)
      Proceeds from sales of property, plant and equipment	31	216
      Purchases of intangible assets	(202)	(374)
      Purchases of investment securities	(259)	(360)
      Proceeds from sales of investment securities	1,113	14
      Proceeds from business transfers	-	813
      Other	(55)	(40)
      Net cash provided by (used in) investing activities	(6,109)	(17,462)
      Cash flows from financing activities
      Net increase (decrease) in short-term loans payable	(366)	(455)
      Gains on long-term borrowing	-	4,220
      Repayment of long-term loans payable	(245)	(942)
      Proceeds from sales of treasury shares	0	-
      Purchases of treasury shares	(974)	(409)
      Cash dividends paid	(1,581)	(1,952)
      Dividends paid to noncontrolling interests	(69)	(66)
      Repayments to noncontrolling interests	9	(104)
      Other	(280)	(20)
      Cash flows from financing activities	(3,507)	269

      Effect of exchange rate change on cash and cash equivalents	512	973
      Net increase (decrease) in cash and cash equivalents	978	(9,630)
      Cash and cash equivalents at beginning of period	30,621	32,112
      Increase in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation	511	-
      Cash and cash equivalents at end of period	32,112	22,481

   5. Notes to the consolidated financial statements (Notes on assumptions of going concern)

      Not applicable.

      (Changes in significant subsidiaries during the fiscal year)

      Fujimori PlaChemical Co., Ltd., which was a consolidated subsidiary, has been excluded from the scope of consolidation because of its dissolution through an absorption-type merger.

      (Notes on changes in accounting policies)

      The Accounting Standard for Corporate, Inhabitant and Enterprise Taxes (ASBJ Statement No. 27, October 28, 2022; hereinafter, the 2022 Revised Accounting Standard) has been applied from the beginning of the current consolidated fiscal year under review.

      With respect to the revision to the classification of corporate tax and to taxation on other comprehensive income, the transitional treatments stipulated in the proviso of paragraph 20-3 of the 2022 Revised Accounting Standard and the proviso of paragraph 65-2 (2) of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022; hereinafter, the 2022 Revised Guidance) have been followed. This change in accounting policy had no effect on the consolidated financial statements.

      In addition, revisions related to the treatment in the consolidated financial statements of the deferral for tax purposes of gains or losses on sales of shares of subsidiaries and other securities arising from sales between consolidated companies have been applied based on the 2022 Revised Guidance from the beginning of the current consolidated fiscal year under review.

      This change in accounting policy has been applied retroactively to the consolidated financial statements for the previous fiscal year. However, the change had no effect on the consolidated financial statements for the previous fiscal year.

      (Additional Information) (Establishment of a subsidiary)
      1. Reason for establishment

         To meet the growing global demand for CUBITAINER® liquid containers for industrial use, the Company has decided to establish a new manufacturing and sales subsidiary in Wuxi, Jiangsu Province, China, with the aim of strengthening its supply structure in the Chinese market.

      2. Overview of the new subsidiary

         1. Name: ZACROS Precision Materials (Wuxi) Co., Ltd. (tentative)

         2. Location: Wuxi, Jiangsu Province, China

         3. Business: Manufacture and sale of CUBITAINER® liquid containers for industrial use

         4. Capital: RMB 28 million (approximately JPY 600 million)

         5. Establishment: Scheduled for May 2025

         6. Start of Production: Scheduled for April 2026

         7. Total Investment: Approximately JPY 1.3 billion (capital expenditure)