Toho : The 76th Annual General Meeting of Shareholders Other Matters Subject to Measures for Electronic Provision (Matters Not Included in Delivered Documents)

The 76th Annual General Meeting of Shareholders

Other Matters Subject to Measures for Electronic Provision

(Matters Not Included in Delivered Documents)

System to Ensure Proper Execution of Business and Status of Operation of the System	Page 1
Consolidated Statement of Changes in Shareholders' Equity	Page 6
Notes to Consolidated Financial Statements	Page 7
Statement of Changes in Shareholders' Equity	Page 24
Notes to Non-consolidated Financial Statements	Page 25

TOHO HOLDINGS CO., LTD.

System to Ensure Proper Execution of Business and Status of Operation of the System

The following descriptions outline the decisions made with respect to the system to ensure that the Directors' execution of duties complies with laws and regulations and the Articles of Incorporation, and other systems to ensure the proper execution of business of the Company.

Pursuant to the provisions of the Companies Act, the Company has established the following "Basic Policies for the Internal Control System," and will faithfully comply with the Basic Policies in order to ensure the legality and efficiency of the Company's business and to manage risks. In response to changes in social and economic conditions and other environments surrounding the Company, the Company will review the Basic Policies and seek to improve and enhance the Basic Policies.

1. System to ensure that the Directors execute their duties in compliance with laws and regulations and the Articles of Incorporation
   1) Under the "Kyoso Mirai Group Ethical Code" (hereinafter referred to as the "Ethical Code"),the Company has formulated the ethical standards and a code of conduct that must be followed in compliance with laws and regulations, as well as social norms. Directors and employees of the Kyoso Mirai Group act in accordance with this Ethical Code.
   2) Pursuant to the provisions of laws and regulations, the Articles of Incorporation and the Board of Directors Rules, the Board of Directors makes decisions on the Company's execution of business and monitors and supervises the execution of business of group companies.
   3) In order to ensure that the execution of duties of each Director will be supervised by the Board of Directors, each Director properly reports to the Board of Directors on the status of business execution by the Company and group companies and the Directors mutually monitor and supervise each other's execution of duties.
   4) By executing duties in compliance with laws and regulations, the Articles of Incorporation, the Board of Directors Rules, Decision-Making (Ringi) Rules, etc., the Directors ensure proper decision-making and the execution of duties.
   5) Pursuant to the provisions of the Financial Instruments and Exchange Act, the Directors establish and continuously operate and assess the system in which internal control over financial reporting of group companies is effectively and appropriately conducted, and ensure the reliability and appropriateness of the financial reporting of the Company group.
   6) In order to ensure that the Company group's directors and employees execute their duties in compliance with laws, regulations, the Articles of Incorporation, and other rules, the Company shall introduce an internal reporting system, establish internal and external reporting contacts, and ensure that whistleblowers are not treated disadvantageously.
   7) The Company shall establish four committees as an advisory body to the Board of Directors as follows:
   a. the Nomination and Compensation Committee, whose purpose is to contribute to transparency of management by having necessary discussions about nominations for candidates for directors, a policy on compensation for directors and other matters (It is composed of three or more members who are directors, a majority of which are appointed from among outside directors.).
   b. the Sustainability Promotion Committee, whose purpose is to recognize responses pertaining to sustainability as important issues in management and promote sustainability management.
   c. the Investment Committee, whose purpose is to have discussions about the appropriateness of investment projects in making a decision on the investment projects.
   d. the Management Strategy Committee, whose purpose is to consider important management and business strategies, etc., connected with the Company and the Group toward sustained enhancement of corporate value.
2. System to ensure that the execution of duties by employees will be in compliance with laws and regulations and the Articles of Incorporation
   1) In order to ensure that employees execute their duties while always being conscious of compliance, the Company strives so that the Ethical Code will be practically and fully applied. In particular, the Company makes efforts for maintaining and strengthening the system to ensure compliance with laws and regulations related to pharmaceutical affairs, laws and regulations for securing fair competition such as the Antimonopoly Act, strict control of corporate information and personal information, etc., and for providing employees with education and enlightening employees about the system.
   2) The Company fully ensures that the business will be executed and managed through the office organization. If any problem arises, the Company will deal with them in a proper and strict manner in accordance with the rules of employment and immediately take measures to prevent any recurrence of such problem.
   3) By periodically conducting internal audits, the Company checks whether the execution of duties by employees of the Company group complies with laws and regulations, the Articles of Incorporation, and various

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rules, and maintains and strengthens the proper execution of duties.

(3) System to preserve and control information concerning the Directors' execution of their duties

1. The Company properly preserves and controls the documents (including electronic records) related to the Directors' execution of their duties and other important information in accordance with laws and regulations and the "Document Handling Rules."
2. By undergoing audits conducted by the Audit and Supervisory Committee Members, the Company ensures the appropriateness of the creation, preservation, and control of information concerning the Directors' execution of duties.

(4) Rules and other systems related to the control of the risk of loss

1. Pursuant to the "Risk Management Basic Rules," the Company promotes the establishment of the Company group's risk management system, and makes efforts for early detection and understanding of any actual or potential risks that come to exist within the Company group, and for taking proper measures for such risks.
2. Through the Group Compliance Risk Management Committee, Group Disaster Countermeasure Committee, etc., the Company provides the Group Management Committee with risk information, and makes efforts for maintaining and improving the risk management system by taking appropriate measures.
3. If any unexpected circumstance occurs to the Company group, a task force will be established at the Company or a business operating company. The task force will be directed by the President (or a person appointed by the President) and take swift actions to organize a system to minimize damage and to maintain and establish the supply system for pharmaceuticals.
4. In order to maintain the normal operation of the computer processing systems, the Company introduced a back-up system by maintaining multiple data centers and has properly established a system in preparation for accidents.
5. In order to maintain information security, the company establishes "Basic Rules on Information Security" and information security committee, which maintains company-wide management system to protect information assets.

(5) System to ensure that the Directors execute their duties in an efficient manner

1. As the basis for the system to ensure the Directors execute their duties in an efficient manner, the Company holds the Board of Directors meeting on a specified date each month, and extraordinary meetings of the Board of Directors as necessary. The Board of Directors meeting deliberates important issues related to business management, passes resolutions for such issues, and supervises the Directors' execution of their duties, etc.
2. The Group Management Committee sufficiently examines in advance any matters to be discussed and reported to the Board of Directors, so that the Company will be able to maintain the efficient and practical operation of the Board of Directors meeting.
3. In order to ensure that the Directors execute their duties in an efficient manner, the Company stipulates the "Organizational Rules," "Rules on Division of Duties," and "Rules on Duties and Authorities," appoints a person in charge of each set of rules, and formulates procedures for the enforcement of each set of rules.
4. Through the Board of Directors meeting, the Company periodically checks the progress of the Company group's business activities based on a medium-term management plan and an annual management plan.

(6) System to ensure the proper business execution of the Company group

1. System under which the Directors, etc., of subsidiaries report to the Company about matters related to the execution of their duties
   The Company has established decision-making standards for business execution by subsidiaries. Any business execution that is considered important under the standards will be discussed at and reported to the Group Management Committee, and where necessary, discussed at and reported to the Board of Directors meeting. Subsidiaries are required to make reports pursuant to the "Affiliates Management Rules," for the purpose of subsidiary management.
2. Rules and other systems concerning the management of the risk of loss of subsidiaries

In order to properly address the "management risk" referred to in the "Risk Management Basic Rules," the Company has established the Group Compliance Risk Management Committee, for the purpose of promoting group-wide risk management.

1. System to ensure that the Directors, etc., of subsidiaries execute their duties in an efficient manner Pursuant to the basic policies stipulated in the "Affiliates Management Rules," the Company has established the reporting system shall have the Company's Board of Directors approve and receive reports on important matters connected with subsidiaries' business and management.
2. System to ensure that the Directors, etc., and employees of subsidiaries execute their duties in compliance with laws and regulations and the Articles of Incorporation

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a. The Company shall have its subsidiaries be thorough in practicing behavior standards under the ethical standards as specified in the Code of Ethics to secure properness of operations.

b. Through internal audits periodically conducted by the Company, the Company audits the business of subsidiaries in order to ensure the proper business execution of subsidiaries.

1. System related to certain employees to be assigned to assist with the duties of the Audit and Supervisory Committee
   1) Where necessary, the Company appoints certain employees to be assigned to assist the Audit and Supervisory Committee.
   2) When the Company appoints certain employees to be assigned to assist with the duties of the Audit and Supervisory Committee, matters related to the personnel changes and personnel evaluations and other personnel affairs of such employees will be determined through discussion with the Audit and Supervisory Committee or with the Full-time Audit and Supervisory Committee Member.
2. Matters concerning reports to the Audit and Supervisory Committee

1. The Audit and Supervisory Committee Members attend important decision-making meetings including the Board of Directors meetings or inspect minutes and other materials thereof as necessary, and receive reports on important matters from the Directors and employees of the Company group.
2. If there is any significant event that may cause considerable damage to the Company, such as a violation of laws and regulations and the Articles of Incorporation, the Directors and any equivalent employees will immediately report such event to the Audit and Supervisory Committee or to the Full-time Audit and Supervisory Committee Member.
3. Decision-makingdocuments (Ringi documents) are forwarded to the Audit and Supervisory Committee Members immediately after the final decision has been made on the decision-making documents.

1. System to ensure that any person who has made a report to the Audit and Supervisory Committee will not be treated disadvantageously on the grounds of having made such report
   When any of the officers and employees of the Company group has made a report to the Audit and Supervisory Committee or to the Full-time Audit and Supervisory Committee Member, it is prohibited to treat him/her disadvantageously on the grounds of having made such report, and all the officers and employees of the Company will be fully familiarized with such prohibition.
2. Matters related to the advance payment or reimbursement procedures for expenses incurred for the Audit and Supervisory Committee Members' execution of their duties, and other policies concerning the processing of expenses or obligations incurred for the Audit and Supervisory Committee Members' execution of their duties 1) The Company bears the expenses necessary for the audits conducted by the Audit and Supervisory Committee, including expenses for lawyers, certified public accounts, consultants, etc., exclusively hired by the Audit and Supervisory Committee.
   2) In addition to the expenses described above, the Company also bears any other expenses necessary for the Audit and Supervisory Committee Members' execution of their duties.
3. Other systems to ensure that the Audit and Supervisory Committee will conduct the audits in an effective manner
   1) The Representative Director exchanges opinions and communicates with the Audit and Supervisory Committee, by holding periodical meetings with the Audit and Supervisory Committee to discuss various issues, including issues to be addressed by the Company, the status of improvement of the environment for the Audit and Supervisory Committee's audits, and important issues related to the audits.
   2) The Audit and Supervisory Committee periodically receives reports from the Accounting Auditors about plans, methods and results of the accounting audits, and exchanges information with the Accounting Auditors, for the purpose of conducting audits in an efficient manner.
   3) The Internal Audit Division provides the Audit and Supervisory Committee with internal audit results, internal audit information and other necessary information, and maintains close collaboration with the Audit and Supervisory Committee. Furthermore, the Audit and Supervisory Committee may request investigation on audit matters and other relevant issues to the Internal Audit Division as necessary.
   4) The Company assures the Audit and Supervisory Committee Members that the Audit and Supervisory Committee Members are entitled to conclude a consultancy contract with lawyers who are dedicated to the Audit and Supervisory Committee, in addition to the corporate lawyers hired by the Company.
4. Basic concept and system for the elimination of antisocial forces

The Company will stand firmly against antisocial forces and organizations that threaten the order and safety of

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civil society. In order to prevent antisocial forces and organizations from being involved in the Company's management activities and from harming the Company, the Company will stipulate, as its basic policy, in the Ethical Code that it thoroughly cuts off relations with antisocial forces and organizations. At the same time, the Company will work to eliminate relations with them by developing its organizational system, collecting information on them in cooperation with the police, and raising awareness among its directors and employees.

The following outlines the operational status of the internal control system, pursuant to the basic policies described above, during the fiscal year under review.

(1) Efforts to ensure the properness and efficiency of business execution

In addition to holding Board of Directors once a month, as a rule, the Company secures proper business execution and aims at quick decision-making by holding an extraordinary Board of Directors, as necessary. In the fiscal year under review, it held 13 Board of Directors.

Also, to make decisions efficiently at Board of Directors, the Company has established the Group Management Committee that is composed of the directors and corporate officers, etc., of the Group companies, in addition to Directors and Corporate Officers, as a panel to in advance discuss subjects to be presented to Board of Directors, and a Group Management Committee meeting is held once a month, as a rule.Three of the Company's nine Directors are Outside Directors, all three of whom serve as Audit and Supervisory Committee Members. They attend important meetings, including the aforementioned meetings, and express their opinions as necessary from time to time. With regard to other important matters, the Company has established and operated a system to circulate requests for approval and other information necessary for audits to Audit and Supervisory Committee Members.

1. Compliance promotion and risk management system 1) Compliance
   a. The Group obligates all employees to receive training in compliance and provides the training monthly. In addition, it obligates employees engaged in sales work to receive training focusing on compliance with industry- related laws and regulations, including the Antimonopoly Act, twice a year.
   b. The Company takes advantage of the code of ethics to provide training and mount information campaigns, among other awareness-raising and knowledge-building efforts across the Group.
   c. The Company has established an internal reporting system can be used by employees of the Group and by employees of the Company's our business partners, etc., with the aim of early detection and prevention of violations of laws and regulations, misconduct, etc., as well as enhancement of self-purification. Moreover, the state of operation of the system is reported to the Group Compliance Risk Management Committee and the Board of Directors.

2) Risk management

a. Important issues about risk management at the Company and the Group companies are discussed at Group Compliance Risk Management Committee meetings, which are held twice a year to resolve on a policy.

b. Risks related to sustainability and climate change are under the responsibility of the Sustainability Promotion Committee, which identifies and assesses business risks and revenue opportunities arising from sustainability issues. The Committee reports the results to the Board of Directors in cooperation with the Group Compliance and Risk Management Committee and the Group Disaster Countermeasures Committee.

c. With regard to information security, the Company has formulated the "Basic Information Security Policy" and the "Basic Information Security Rules", considering the protection of information assets entrusted to us by suppliers and information assets held by the Company in the course of business as our responsibility. The Information Security Committee also plans and promotes information security measures to ensure information security throughout the Group.

(3) Group management system

In terms of the management of the Company's group companies, the Company organizes the reporting system for the management of subsidiaries with respect to ascertaining business conditions and important projects of major subsidiaries, and has established the system in which important issues are discussed with the Group Management Committee, pursuant to the "Affiliates Management Rules." The Group Audit Office, as the Company's internal audit division, conducts internal audits of group companies, in accordance with audit plans.

(4) Efforts to ensure the effectiveness of audits

The Company's Audit and Supervisory Committee Members attend important meetings such as the Board of Directors meetings and the Group Management Committee meetings, to obtain information regarding business execution and management and information relevant to the effectiveness of the internal control system.

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Furthermore, in order to ensure the effectiveness of audits, the Company has ensured close cooperation, including a system where the Audit and Supervisory Committee Members receive reporting on a periodical and occasional basis from, and exchange opinions with, the Accounting Auditor and the Group Audit Office, as well as a system where the Audit and Supervisory Committee Members periodically hold meetings and exchange opinions with the Representative Director, the head of each division and other employees.

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Consolidated Statement of Changes in Shareholders' Equity

(April 1, 2023 - March 31, 2024)

												(In millions of yen)
							Shareholders' equity
				Share capital	Capital surplus	Retained earnings	Treasury stock		Total shareholders'
					equity
Balance as of April 1, 2023			10,649	49,146	191,531	-	23,107	228,219
Changes of items during the consolidated
fiscal year
Dividends from surplus							2,235						2,235
Profit attributable to owners of parent				20,657					20,657
			-						-
Purchase of treasury stock								-	12,002	-	12,002
						7			29		37
Disposal of treasury stock
Cancellation of treasury stock			-3,941		-230		4,172			-
Change in the scope of consolidation					17						17
Reversal of revaluation reserve for land					6						6
Net changes of items other than
shareholders'	equity	during	the
consolidated fiscal year
Total changes of items during the			3,933	18,215		-7,800			6,481
consolidated fiscal year
				10,649	45,212	209,746	-	30,907	234,701
Balance as of March 31, 2024			-
				Accumulated other comprehensive income		Subscription rights	Non-controlling
				Valuation difference	Revaluation reserve	Total accumulated		Total net assets
				on available-for sale	other comprehensive	to shares		interests
				securities	for land	income
Balance as of April 1, 2023			18,734		4,276	14,458		146			92		242,916
Changes of items during the consolidated		-
fiscal year
Dividends from surplus																	2,235
Profit attributable to owners of parent														20,657
													-
Purchase of treasury stock															-	12,002
																	37
Disposal of treasury stock
Cancellation of treasury stock																-
Change in the scope of consolidation															17
Reversal of revaluation reserve for land															6
Net changes of items other	than	35		-6		28		-	2			12				38
shareholders'	equity	during	the
consolidated fiscal year
Total changes of items during	the	35	-	-6		28			2			12				6,520
consolidated fiscal year			18,770	4,283	14,486		144			104		249,437
Balance as of March 31, 2024
						-

(Note) Reported amounts are rounded down to the nearest million yen.

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Notes to Consolidated Financial Statements

1. Basis for Preparation of Consolidated Financial Statements

(1) Scope of consolidation

1. Consolidated subsidiaries
2. • Number of consolidated subsidiaries: 23
   • Names of principal consolidated subsidiaries:

TOHO PHARMACEUTICAL Kyushu Toho

SAYWELL Koyo

SQUARE-ONE Toho System Service Pharma Cluster Pharma-Daiwa

J. Mirai Medical

Shimizu Pharmacy Pharma Mirai Seiko Medical Brain Strelitzia

VEGA PHARMA Cure

Aobado

Kosei

KYOSOMIRAI PHARMA

Tokyo Research Center of Clinical Pharmacology

ALF

Nextit Research Institute eKenkoshop eHealthcare

1. 1. Non-consolidatedsubsidiaries
   2. • Names of principal non-consolidated subsidiaries: Okinawa Toho Co., Ltd.
      • Reason for exclusion from the scope of consolidation:
        The non-consolidated subsidiary is excluded from the scope of consolidation, because its business size is small, it does not have a significant impact on the total assets, net sales, consolidated net income or loss, and retained earnings, etc., and its overall impact is negligible.
2. Application of the equity method
3. 1. Number of affiliates to which the equity method is applied: 3
   2. • Names of principal companies:
        SAKAI MEDICINES CO., LTD. AYUMI Pharmaceutical Holdings AYUMI Pharmaceutical Corporation
        The goodwill of AYUMI Pharmaceutical Holdings arising from the application of the equity method is amortized on a straight-line basis over 20 years.
   3. Non-consolidatedsubsidiaries and affiliates to which the equity method is not applied:
   4. • Names of principal non-consolidated subsidiaries: Okinawa Toho Co., Ltd.

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• Names of principal affiliates: Wakaba
• Reason for exclusion from the scope of application of the equity method:

The non-consolidated subsidiary and affiliate to which the equity method is not applied is excluded from the scope of application of the equity method, because it does not have a significant impact on the consolidated net income or loss, and retained earnings, etc., and they are overall negligible.

1. Fiscal year, etc. of consolidated subsidiaries
   The last day of the fiscal year of consolidated subsidiaries is the same as the day of the consolidated settlement.
2. Accounting standards

1. Standards and methods for the valuation of securities Held-to-maturity bonds: Amortized cost method (Straight-line method) Other securities
2. • Securities other than shares, etc. without market value:
     The fair value method based on the market price, etc., as of the last day of the consolidated fiscal year (All valuation differences are reported as a component of net assets, with the cost of securities sold calculated according to the moving-average method.)
   • Shares, etc. without market value:
     The cost method using the moving-average method.
     For securities with no market value, the Company compares the amount of net assets per share with the acquisition cost and considers whether or not impairment is necessary if the amount of net assets per share is less than 50% of the acquisition cost. However, if it is deemed reasonable to take the value reflecting future excess earning power, etc. as the real value, the Company considers whether or not impairment is necessary for the real value to be applied instead of the amount of net assets.
     As for investments in limited liability investment partnerships and other similar partnerships (considered as securities according to Article 2, Paragraph 2 of the Financial Instruments and Exchange Act), the net amount equivalent to equity based on the most recent available financial report of the partnership, according to the reporting date stipulated in the partnership contract, is recorded.
3. Valuation standards and valuation method for inventories: The cost method using the moving-average method is used for the 4 consolidated subsidiaries (TOHO PHARMACEUTICAL, Kyushu Toho, SAYWELL and Koyo) (The method of writing down the book value due to decreased profitability).
   KYOSOMIRAI PHARMA CO., LTD. is stated at cost method of the first-in,first-out basis (method of write-down of book value due to decline in profitability).
   The cost method using the last cost method is used for other consolidated subsidiaries (The method of writing down the book value due to decreased profitability).

1. Depreciation method for fixed assets
2. 1. Property, plant and equipment (excluding lease assets)
      The fixed-rate method is applied (However, the straight-line method is applied for buildings (excluding auxiliary facilities of buildings) acquired on or after April 1, 1998 and for auxiliary facilities of buildings and structures acquired on or after April 1, 2016).

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Principal useful lives are as follows:

Buildings and structures:	8-50 years
Machinery, equipment and vehicles: 4-8 years
Furniture and fixtures:	5-15 years

ii) Intangible assets (excluding lease assets)

The straight-line method. However, the straight-line method over the internal useful life (five years) is used for computer software for internal use.

1. 1. Lease assets
      Lease assets pertaining to finance lease transactions, without transferring the ownership of the leased assets to the lessee.
      The straight-line method with no residual value is applied and the lease term is considered to be the useful life.
2. Standards for reporting significant allowances and provisions

1. Allowance for doubtful accounts
   The allowance for doubtful accounts is provided to cover bad-debt losses on accounts receivable, loans, etc. In cases of ordinary receivables, the amount calculated using the loan loss ratio is provided, and in cases of specific receivables such as doubtful accounts, the recoverability is individually assessed and the estimated irrecoverable amount is provided.
2. Provision for bonuses
   The reserve for the payment of bonuses to employees and officers who perform duties as employees is provided, based on the estimated amount of bonuses payable for the consolidated fiscal year under review.
3. Provision for directors' bonuses
   The reserve for the payment of bonuses to directors is provided, based on the estimated amount of bonuses payable for the consolidated fiscal year under review.
4. Provision for loss on the Antimonopoly Act

To prepare for the occurrence of losses related to the Antimonopoly Act, an estimated amount is recorded as of the end of consolidated fiscal year under review.

v) Provision for loss on guarantees

To provide for losses on debt guarantees, an estimated amount of losses borne is recorded by taking into account the financial condition of guaranteed parties and other factors.

5) Revenue and expense recording standards

The details of major performance obligations of major businesses relating to revenue arising from contracts with customers of the Company and its consolidated subsidiaries and the ordinary time of fulfillment of such performance obligations (ordinary time of recognition of revenue) are as follows. i) Pharmaceutical Wholesaling

In Pharmaceutical Wholesaling, the Company sells prescription pharmaceuticals, reagents, test equipment, customer support systems, etc. to medical institutions, etc., and provides maintenance services related to customer support systems. In addition, equipment manufacturers, etc. are involved in some of the sales of test equipment, etc., and the Company group's performance obligation is to arrange for the equipment manufacturers, etc. to provide test equipment, etc. to customers and collect the money

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