ASKA Pharmaceutical : June 12 2023 Matters Subject to Measures for Electronic Provision of the Notice of the 2nd Annual General Meeting of Shareholders

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.

Matters Subject to Measures for Electronic Provision of the Notice of the 2nd Annual General Meeting of Shareholders

Notes to Consolidated Financial Statements

Notes to Non-Consolidated Financial Statements

(From April 1, 2022 to March 31, 2023)

ASKA Pharmaceutical Holdings Co., Ltd.

In accordance with the provisions of laws and regulations and Article 16 of the Articles of Incorporation, "Notes to Consolidated Financial Statements" and "Notes to Non- Consolidated Financial Statements" are excluded from the paper-based documents delivered to shareholders who have made a request for delivery of documents stating matters for which measures for providing information in electronic format are to be taken.

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Notes to Consolidated Financial Statements

[Notes to Important Items That Form the Basis of Preparing Consolidated Financial Statements]

1. Scope of consolidation

Status of consolidated subsidiaries:

The consolidated financial statements include the accounts of the Company and all of its subsidiaries.

• Number of consolidated subsidiaries: 3
• Consolidated subsidiaries:

ASKA Pharmaceutical Co., Ltd.

ASKA Pharma Medical Co., Ltd.

ASKA Animal Health Co., Ltd.

2. Application of equity method

1. Status of affiliates accounted for by the equity method
2. • Number of affiliates accounted for by the equity method: 3
   • Principal affiliates:

Ha Tay Pharmaceutical Joint Stock Company

JAPAN GLASS INDUSTRY CO., LTD. and 1 other company

1. Status of affiliates not accounted for by the equity method
2. • Affiliates not accounted for by the equity method: KCIS Co., Ltd. and 1 other company
   • Reasons for not accounted for by the equity method:

This company is excluded from the scope of the equity method since such exclusion has immaterial effect on the Company's consolidated financial statements in terms of profit or loss (amount corresponding to the Company's equity position), retained earnings (amount corresponding to the Company's equity position) and other indicators, and they are not material as a whole.

(3) Special note on the application of the equity method

The fiscal year-ends of certain entities accounted for using the equity method differ from the consolidated fiscal year-end date, and accordingly the consolidated financial statements have been prepared using the financial statements for the respective fiscal years of these entities.

3. Fiscal years of consolidated subsidiaries

The fiscal year-end of all consolidated subsidiaries coincides with the consolidated balance sheet date.

4. Accounting policies

1. Valuation standards and methods for significant assets
2. 1. Securities

Available-for-sale securities

1. • Items other than shares without market value:
     Stated at market value based on market price on the closing date (Net unrealized holding gains or losses, net of the applicable income taxes, are directly included in a component of net assets. The cost of securities sold is determined by the moving-average method.)
   • Shares without market value:
     Stated at cost determined by the moving-average method
2. Inventories

Stated at cost determined by the gross average method

Balance sheet amounts are written down based on a decline in profitability.

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(2) Depreciation method for significant depreciable assets a) Property, plant and equipment

Depreciated by the declining-balance method (However, buildings (excluding accompanying facilities) obtained on or after April 1, 1998 and facilities accompanying buildings and structures obtained on or after April 1, 2016 are depreciated by the straight-line method.)

b) Intangible assets

Amortized by the straight-line method

Software used internally is amortized using the straight-line method over the useful life of the assets as estimated by the Company (within five years).

1. Accounting standards for significant allowances
2. 1. Allowance for doubtful accounts

To provide against losses on defaults of notes and accounts receivable - trade, the Company and its consolidated subsidiaries provides the allowance for doubtful accounts based on a historical experience for general claims and on an estimate of collectability of specific doubtful receivables from customers in financial difficulties.

b) Provision for bonuses

The Company and its consolidated subsidiaries provide a provision for bonus payments to employees at the amount estimated based on the period subject to the bonus payment.

c) Provision for bonuses for directors

The Company provides a provision for bonus payments to directors and other officers at the amount estimated at the end of the fiscal year.

(4) The standards for recognition of significant revenues and expenses

The Company and its consolidated subsidiaries have adopted the "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan ("ASBJ") Statement No. 29, March 31, 2020) and "Implementation Guidance on Accounting Standard for Revenue Recognition" (ASBJ Guidance No. 30, March 26, 2021). Accordingly, the Company recognizes revenue at the amount expected to be received in exchange for promised goods or services when control of said goods or services is transferred to the customer.

1. Other important matters for the basis of preparing consolidated financial statements Recognition of retirement benefit liability
   To prepare for employees' retirement benefits, retirement benefit liability is recorded at the amount remaining after deducting pension assets from retirement benefit obligations based on estimated amounts at the end of the fiscal year under review. Actuarial differences are amortized by the straight-line method over a specified period (10 years) within the average remaining service years of employees at the time of accrual in each fiscal year, from the following fiscal year of the respective accruals. Unrecognized actuarial differences and unrecognized past service costs are posted, factoring in tax effects, as remeasurements of defined benefit plans in accumulated other comprehensive income under net assets. In the calculation of retirement benefit obligations, the method of attributing expected retirement benefits to the period up to the fiscal year under review is the benefit formula basis.

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[Notes to Changes in Accounting Policies]

We have applied the Implementation Guidance on Accounting Standard for Fair Value Measurement (Accounting Standards Board of Japan Guidance No. 31, June 17, 2021; hereinafter "Fair Value Measurement Implementation Guidance") and relevant ASBJ regulations since the start of the consolidated fiscal year under review. Pursuant to the transitional treatment described in Paragraph 27-2 of the Fair Value Measurement Implementation Guidance, the new accounting policies stipulated in the Fair Value Measurement Implementation Guidance will be applied to the future. This change has had no impact on the consolidated financial statements.

[Notes to Accounting Estimates]

1. Deferred tax assets

1. Amounts recorded in the consolidated financial statements for the fiscal year under review

(Unit: In Millions of yen)

	As of March 31, 2023
Deferred tax assets	1,717

1. Information on the content of significant accounting estimates for identified items
   Deferred tax assets are estimated based on future business plans, using the period in which taxable income will arise and the amount. The estimate may be affected by factors such as changes in uncertain future economic conditions. If the actual period and amount of taxable income arisen differs from the estimate, this may have a material impact on the amount of deferred tax assets in the consolidated financial statements for the next consolidated fiscal year.

2. Valuation of goodwill for equity-method affiliates

1. Amounts recorded in the consolidated financial statements for the fiscal year under review

(Unit: In Millions of yen)

	As of March 31, 2023
Investment securities	1,046

1. Information on the content of significant accounting estimates for identified items
2. 1. Calculation method of amount

The investment securities recorded on the consolidated balance sheet includes goodwill for equity- method affiliates. If it is determined that there are signs of goodwill impairment, the impairment is determined by comparing an amount equivalent to the affiliate's equity in estimated future cash flows over the remaining amortization period of the goodwill with the book value. The Company has not identified any signs of goodwill impairment in the current fiscal year.

b) Assumptions used in calculation of amount

The above processes to assess whether or not there are any signs of impairment and the recognition and measurement of impairment losses are based on the business plans of equity-method affiliates, which include assumptions such as market conditions, etc.

c) Impact on the consolidated financial statements for the following year

If changes in market conditions, etc., required impairment loss to be recognized in the next consolidated fiscal year, the book value of the goodwill listed above will be reduced to the recoverable amount and impairment losses will be recorded as share of loss of investments accounted for using equity method under non-operating expenses.

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[Additional Information]

Transactions of Delivering the Company's Own Stock to Employees, etc. through Trust

The Company conducts transactions to deliver the Company's shares to the ASKA Pharmaceutical Employee Shareholders' Association (ESOP) through trust, with the aim of enhancing employee benefits.

1. Description of transactions

The Company establishes a trust with employees participating in the ESOP who satisfy certain requirements as beneficiaries. The trust acquires shares of the Company in the number expected to be acquired by the ESOP en bloc and sells the shares of the Company to the ESOP on a certain date every month. If there is any profit from trust due to an increase in the share price at the end of the trust, the money is distributed to employees according to the proportion of contributions. If there is any loss from trust due to a decrease in the share price, the Company is to make a lump-sum repayment to the bank.

2. Company's shares remaining in trust

The Company's shares remaining in trust is recorded as treasury shares under net assets at the book value in trust (excluding the amount as ancillary expenses). The book value and number of shares of the relevant treasury shares are ¥65 million and 58 thousand shares as of March 31, 2022 and ¥9 million and 8 thousand shares as of March 31, 2023.

3. Book value of borrowings recorded using the gross method As of March 31, 2022: ¥97 million

As of March 31, 2023: ¥48 million

(Accounting estimates associated with the COVID-19 pandemic)

The Group implements impairment accounting for property, plant and equipment and accounting estimates on the recoverability of deferred tax assets based on information available at the time of creating consolidated financial statements. The effects of the COVID-19 pandemic on the Group are limited at present, and we have determined that they do not have a significant impact on estimates for the current fiscal year.

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