Notice Regarding Recognition of Extraordinary Losses and Extraordinary Gains in Separate Financial Statements

Overview of the Financial Statement Revisions

This notice concerns revisions to the fiscal 2025 financial statements by recognizing extraordinary losses and extraordinary gains. Following the third-party committee investigation, accounting frauds were confirmed, including deferral of inventory impairment, avoidance of fixed asset impairments, and capitalization of expenditures. As a result, special investigation expenses and related items were recorded as extraordinary losses, and various impairment losses and provisions related to affiliates were recorded. Conversely, items such as reversals of allowances for doubtful accounts of affiliates and reversals of provision for business losses of affiliates generated extraordinary gains; these items are eliminated in consolidation, so the impact on consolidated financial statements is described as limited.

Future Disclosures and Impact

These matters have been reflected in the securities report and financial summary (IFRS) for the fiscal year ending March 2026. The company will promptly disclose any items that should be reported going forward. The total extraordinary losses amount to approx. 3,309 hundred million yen and extraordinary gains amount to approx. 543 hundred million yen, indicating significant movements in special-account related items. Because the effects are eliminated in the consolidated financial statements, the company explains that the impact on full-year consolidated results is limited.