Investigation into Misconduct at a Consolidated Subsidiary and Financial Impact

「In addition, ¥101.506 million in investigation costs has been recorded as non-operating expenses.」

「At SANRITSU LOGISTICS AMERICA Inc. (hereinafter “SLA”), a consolidated subsidiary of the Company, we conducted an investigation into misconduct by a former employee seconded to SLA (the “former employee”), as well as misconduct by certain Company employees who received instructions from the former employee and by SLA employees (the “misconduct”), and received an investigation report from an external investigation firm. As the impact on results for each prior period is not material enough to require correction, no corrections have been made to prior-period securities reports or quarterly securities reports. Based on the investigation findings, the impact of the misconduct on interim results for the current interim consolidated accounting period, including the personal use of expenses, fraudulent financial reporting and the provision for allowance for doubtful accounts recorded in connection with these matters, is expected to increase operating income by ¥60.505 million, ordinary income by ¥49.243 million and interim net income by ¥32.313 million. Misconduct occurring during the current fiscal year has been corrected in the current interim consolidated accounting period. In addition, ¥92.665 million in non-operating expenses has been recorded as investigation costs.」