May 27, 2024
To whom it may concern,
Company name: MELCO HOLDINGS INC.
Representative: Hiroyuki Maki,
President and CEO(Securities code: 6676)
Inquiries:
Hideto Fukaya,
General Manager,
CEO’s Office(Telephone: +81-3-4213-1122)(Revised edition) Q&A-format Explanation Regarding
Dividends in Kind of Subsidiary Shares (Share-DistributionType Spin-off) and Change of Specified Subsidiaries
Regarding an arrangement to distribute all of the shares of the Company’s subsidiary Shimadaya Corporation (“Shimadaya”) held by the Company to shareholders
through dividends in kind (dividends of property other than cash) (the “Spin-off”), as notified through the “Notice Concerning Dividends in Kind of Subsidiary
Shares (Share-Distribution-Type Spin-off) and Change of Specified Subsidiaries” announced on May 13, 2024, the Company has prepared Q&As and additional
information. Please refer to these resources.

Please note that an answer was added to Q1-17 on May 27, 2024.

1

Table of Contents for Q&As
Page
Overview of the share-distribution-type spin-off and its generally expected effects .............................................................................................................. 3
Reasons and purpose of the Spin-off ....................................................................................................................................................................................... 4
Overview of the plan and schedule for the Spin-off ................................................................................................................................................................ 6
Transactions related to the Spin-off on the ex-rights date of the Company’s shares ............................................................................................................... 7
Tax treatment for dividends in kind......................................................................................................................................................................................... 8
Important notes concerning this matter ................................................................................................................................................................................... 9
1. Overview of the spin-off ........................................................................................................................................................................................................ 10
2. Procedures for dividends in kind ........................................................................................................................................................................................... 16
3. Trading of Shimadaya shares and the status of Shimadaya after the Spin-off ....................................................................................................................... 19
4. Trading of Company shares and the status of the Company after the Spin-off...................................................................................................................... 20
5. Tax treatment for dividends in kind ....................................................................................................................................................................................... 24
6. Accounting treatment by corporate shareholders, etc. ........................................................................................................................................................... 26

2

Overview of the share-distribution-type spin-off and its generally expected effects

3

Reasons and purpose of the Spin-off
The Company announced the “Policy for Organizational Restructuring of the Group” on May 18, 2023, as shown below. This spin-off listing of Shimadaya is carriedout as a part of such policy. The purposes and reasons for the organizational restructuring and spin-off are as described below.
“Policy for Organizational Restructuring of the Group” https://melco-hd.jp/news/202403/20230518saihen.pdf●

The Company made a shift to a pure holding company structure in 2003, and has been practicing “Forest-like Management.”●

Since the shift, the Group has steadily strengthened its management base and expanded its business fields. As its business fields have extended too widely, various
problems have emerged.

●

In order to resolve these problems and maximize long-term shareholder value in light of the current conditions of drastic changes in the business environment andsociety, the Company has come to the conclusion that it is essential to implement organizational restructuring, including the spin-off and listing of Shimadaya.

●

The Company also believes that the shift of Shimadaya to an independent listed company through the Spin-off and the listing on the Tokyo Stock Exchange willlead to improvement of motivation among employees of the Shimadaya Group to promote value creation through noodle products, as well as enable theimplementation of future business strategy and the acceleration of growth toward the 100th anniversary in 2031.

4

Reasons and purpose of the Spin-off (continued)

5Overview of the plan and schedule for the Spin-off

6Transactions related to the Spin-off on the ex-rights date of the Company’s shares

7

Tax treatment for dividends in kind8

Important notes concerning this matter(1) The Company plans to pay dividends in kind to shareholders who are recorded on the last shareholder list as of Monday, September 30, 2024, which is the distribution
record date, at a ratio of one common share of Shimadaya per common share of the Company held by shareholders of the Company. Accordingly, shareholders of theCompany as of the distribution record date will hold listed shares of two stocks, which are the Company’s shares and Shimadaya shares, as a result of the Spin-off.
(2) Generally, Shimadaya shares will be distributed on Tuesday, October 1, 2024 without requiring shareholders to take any particular action. Please contact your securities
company for confirmation.
(3) Shimadaya shares are planned to be listed on Tokyo Stock Exchange, Inc. (“Tokyo Stock Exchange”) on Tuesday, October 1, 2024. However, such listing has not beenassured at this moment, as it is contingent upon approval by the Tokyo Stock Exchange following future listing examinations by Japan Exchange Regulation.
(4) The Company’s common shares will remain listed on the Tokyo Stock Exchange and Nagoya Stock Exchange, Inc. (“Nagoya Stock Exchange”). If the Spin-off iscarried out, the ex-rights date for the Company’s shares will be Friday, September 27, 2024, and in theory, the value of the Company’s shares will be adjusted by thevalue of Shimadaya shares as of the same day. On the other hand, however, the Company’s shareholders will receive distribution of Shimadaya shares on Tuesday,
October 1, 2024.
At the time of ex-rights of the Company’s shares, since the total numbers of issued shares of the Company and Shimadaya excluding the number of treasury shares held
as of the distribution record date will be the same, trading is expected to be carried out on the Tokyo Stock Exchange on Friday, September 27, 2024, using the per shareprice calculated by the following formula as the Company’s base price. The base price refers to a price that is a basis of the daily price limit (a range within which theprice can fluctuate during a day) but does not refer to an actual trading price for each trading conducted on Friday, September 27, 2024. The Tokyo Stock Exchange willseparately announce the treatment of trading, including the calculation method of the base price.
Base price on the ex-rights date of the Company’s shares (Friday, September 27, 2024) = Closing price of shares on the Company’s last cum-rights date (Thursday,
September 26, 2024) - Interim (forecast) dividend per share at the end of the first half of the fiscal year ending March 31, 2025 - Opening price of Shimadaya shares(Note)(Note) If the sale of Shimadaya shares does not take place at the time of their listing, the trade reference price of Shimadaya shares in a direct listing as described in Q1-7
below will be used instead of the opening price of Shimadaya shares.
(5) Shimadaya will no longer be a consolidated subsidiary of the Company as a result of the Spin-off. In addition, after the Spin-off, the Company’s common shares andShimadaya’s common shares will trade independently, resulting in distinct price formations for each stock.

91. Overview of the spin-off
Question

Answer

Q1-1

A1-1

Please tell us about the

A share-distribution-type spin-off refers to the act of separating a specific subsidiary from the original company and establishing it as an

overview of the share-

independent entity. The shares of the subsidiary that is to become independent (spun-off company) will be delivered to the shareholders of the

distribution-type spin-off.

original company. At the time of the Spin-off, the shares of Shimadaya, a consolidated subsidiary of the Company, will be delivered to theCompany’s shareholders through so-called dividends in kind. As a result of the 2017 tax reform, a spin-off, which is the act of separating a
specific business from the original company and establishing it as an independent entity, has been included in the reorganization taxation system
in order to promote flexible business restructuring of companies. Due to this, taxation on capital gains and losses does not apply to the originalcompany at the time of the spin-off and taxation on dividends also does not apply to shareholders, making it possible to defer taxation on capitalgains and losses.

Q1-2

A1-2

What is an advantage of aGenerally speaking, the effects of a spin-off include: enabling the original company to focus on its core businesses; “effects of making

share-distribution-typemanagement independent,” such as enabling the spun-off company to make quick and flexible decisions; “effects of making the capital structurespin-off?

independent,” such as enhancement of flexibility of the capital policy and investment strategy of the spun-off company; “effects of the company
going public independently,” such as making it possible to attract investors who are interested in individual businesses if the spun-off company
goes public. These effects are expected to improve corporate value.

Q1-3

A1-3

Is a share-distribution-type

In the case of a general sale of a subsidiary, the subsidiary’s shares are sold to specific third parties or investors and the Company receives

spin-off different from theproceeds from the sale. On the other hand, in the case of a share-distribution-type spin-off, the subsidiary’s shares are distributed to thesale of a subsidiary?

Company’s shareholders through dividends in kind (dividends in the form of assets other than money). As a result of the Spin-off, shareholdersof the Company will hold listed shares of two stocks: the Company’s shares and Shimadaya shares. They can continue to hold rights asshareholders of both the Company and Shimadaya, which will be separated and become independent. The Spin-off is planned as a qualified
share distribution under the reorganization taxation system, which we believe offers greater tax advantages compared to selling a subsidiary's
shares.

10

Q1-4
Could you tell me if there
have been any previous
instances of similar spinoffs?

A1-4
We consider that the following case to be classified as a “spin-off” under the reorganization taxation system following the 2017 tax reform: In
2020, KOSHIDAKA HOLDINGS, which manages the karaoke box chain “Karaoke Manekineko,” spun off CURVES HOLDINGS, which
oversees companies including Curves Japan, which manages the fitness chain “Curves.”
We consider the following as examples of overseas spin-offs: the case where DuPont, a leading US-based chemical company, spun off its
performance chemicals business into a new company, Chemours, in 2015, and the case where eBay, a leading internet auction company, spunoff PayPal, an online payments company, in the same year.

Q1-5
Could you tell me about
the requirements that aspin-off must meet to beeligible under the
reorganization taxation
system?

A1-5
The requirements for share distribution qualified under the reorganization taxation system are outlined below. We believe the Spin-off satisfies
the following requirements.
(1) Non-control requirement (The corporation distributing dividends in kind (Note: the Company) shall not be under third-party control
immediately before the distribution, and the wholly-owned subsidiary (Note: Shimadaya) shall not be expected to come under thirdparty control after the share distribution)(2) Requirement for proportional distribution of shares only (All shares of the wholly-owned subsidiary shall be transferred, and only
shares of the wholly-owned subsidiary shall be distributed according to the number of shares held by shareholders of the distributing
corporation)(3) Employee continuity requirement (At least 80% of employees shall be expected to continue to perform work for the wholly-owned
subsidiary)(4) Business continuity requirement (The main business activities of the wholly-owned subsidiary shall be expected to continue being
conducted by that subsidiary after the share distribution)(5) Officer continuity requirement (Not all specified officers shall resign as a result of the share distribution)

Q1-6
Will Shimadaya shares belisted?

A1-6
To ensure that shareholders have opportunities to sell the share after the distribution of dividends in kind, the Spin-off is subject to the listing
approval by the Tokyo Stock Exchange and on condition that such approval is not revoked, etc.

11

Q1-7
Could you explain yourplan for listing Shimadaya
shares?

A1-7
From the standpoint of ensuring that shareholders have opportunities to purchase and sell Shimadaya shares, which will be distributed as
dividends in kind, the Spin-off will be based on the assumption that the shares of Shimadaya will be listed on the Tokyo Stock Exchange. For
that purpose, Shimadaya submitted a preliminary application for initial listing to the Tokyo Stock Exchange on April 24, 2024. The Company
will submit a main application for initial listing to the Tokyo Stock Exchange prior to the implementation of the Spin-off, and the Spin-off will
be on condition that Shimadaya obtains the listing approval from the Tokyo Stock Exchange and the said approval is not revoked. The listing of
Shimadaya shares and the timing thereof have not been assured at this moment, since they are on condition that the listing is approved by the
Tokyo Stock Exchange as a result of future listing examinations by Japan Exchange Regulation. The sale of Shimadaya’s common shares (“Saleof Shares”) will be conducted at the time of the initial listing. In the case that the Sale of Shares is conducted, it will be conducted at the pricedetermined by the book-building prescribed in Rule 246 of the Enforcement Rules for Securities Listing Regulations established by the Tokyo
Stock Exchange (a method of determining the selling price after understanding demand for the shares from investors by presenting a tentatively
set price range for the selling price to investors at the time of solicitation of subscriptions to acquire shares). At the time of ex-rights of theCompany’s shares, the base price of the Company’s shares will be calculated using the opening price of Shimadaya shares and trading is
expected to be carried out on the Tokyo Stock Exchange, as described in “Transactions related to the Spin-off on the ex-rights date of theCompany’s shares” (page 7). Determining the value of Shimadaya shares transparently through the book building method is expected to produce
effects of streamlining the trading of the Company’s shares after their ex-rights date. It has not been determined, however, whether or not andwhen the Sale of Shares will be conducted. If the Sale of Shares does not take place, the initial listing on the Tokyo Stock Exchange will be adirect listing (a domestic corporation that is not listed on a financial instruments exchange in Japan lists its shares without conducting a public
offering, etc. prior to the listing). In this case, the first special quote display (Reference Price) on the first day of listing of Shimadaya shares
will be the trade reference price determined by “a document containing the trade reference price of the stock, etc., pertaining to the initial listing
application” prepared by the managing trading participant prescribed in Rule 253-2, Paragraph 2 of the Enforcement Rules for Securities Listing
Regulations established by the Tokyo Stock Exchange.

Q1-8
Could you tell me about
the requirements forpassing a resolution on theSpin-off at theshareholders’ meeting?

A1-8
The Spin-off will issue dividends in kind that provide no right to demand distribution of monies (a right to demand delivery of monies in lieu ofdividends of the said property from a stock company) as defined in Article 454, Paragraph (4), Item (i) of the Companies Act, in order to satisfy
the requirements for qualification of the reorganization taxation system. For the Spin-off, therefore, the Company plans to acquire the approval
by a special resolution as set forth in Article 309, Paragraph (2), Item (x) of the Companies Act, at the annual shareholders’ meeting.

Q1-9
What will happen if theSpin-off is rejected at theshareholders’ meeting, if

A1-9
A proposal for the Spin-off will be submitted to the annual shareholders’ meeting, and the requirements indicated below need to be met to carryout the Spin-off. If either of the following requirements is not met, the Spin-off will be cancelled.
(1) Approval shall be obtained at the annual shareholders’ meeting; and12the listing approval for
Shimadaya shares is not
obtained, or if the Sale ofShares is cancelled?

(2) The listing approval for Shimadaya common shares shall be obtained from the Tokyo Stock Exchange and the said
approval shall not be revoked.
On the other hand, the Spin-off is not contingent on the sale of Shimadaya common shares at the time of the initiallisting.

Q1-10
What should I do to
exercise my voting right on
the proposal concerning
the Spin-off presented at
the shareholders’ meeting?

A1-10
Shareholders of the Company as of Sunday, March 31, 2024 (substantive record date: Friday, March 29, 2024) are entitled to exercise their voting
rights at the annual shareholders’ meeting of the Company.
To exercise your voting rights, please refer to the notice of convocation of the shareholders’ meeting, which we plan to send you in early June
2024.

Q1-11
What options are available
to shareholders?

A1-11
First, shareholders of the Company as of Sunday, March 31, 2024 (substantive record date: Friday, March 29, 2024) are requested to review the
proposal concerning the Spin-off presented at the annual shareholders’ meeting.
Then, if the Spin-off is carried out, shareholders of the Company as of the distribution record date (Monday, September 30, 2024) will receive
one share of Shimadaya for each share of the Company they hold. Therefore, as a result of the Spin-off, shareholders of the Company as of the
distribution record date will hold listed shares of two stocks: the Company’s shares and Shimadaya shares.
After the Spin-off, they can continue to hold rights as shareholders of both the Company and Shimadaya, or they can buy and sell the shares on
the market.

Q1-12
What options are available
to shareholders who holdfractional shares?

A1-12
To begin with, shareholders who hold less than 100 common shares (the share unit of the Company) as of Sunday, March 31, 2024 (substantive
record date: Friday, March 29, 2024), do not have voting rights. Therefore, they cannot exercise voting rights on the proposal concerning theSpin-off presented at the annual shareholders’ meeting.
In addition, as a result of the Spin-off, shareholders of the Company as of the distribution record date (Monday, September 30, 2024) will
receive one share of Shimadaya for each share of the Company they hold. Therefore, shareholders who hold fractional shares will also receive
Shimadaya shares in proportion to the fractional shares they hold. However, since the share unit of Shimadaya is also 100 shares, less than 100
shares of Shimadaya cannot be traded on the market (No restrictions based on the trading unit will not be imposed on purchases and sales
outside the market). In addition, Shimadaya will begin the process of buying back fractional shares after the listing.

13

Q1-13What will the compositionof shareholders of bothcompanies look like after
the Spin-off?

A1-13
As a result of the Spin-off, shareholders of the Company as of the distribution record date will receive one share of Shimadaya for each share of
the Company held by them. At the time when the Spin-off takes effect, therefore, the shareholder composition of both companies will be thesame. However, at the time of the initial listing, Shimadaya shares are expected to be sold by existing shareholders. This will change theshareholder composition. Furthermore, after the listing of Shimadaya shares, both companies’ stocks will be traded on the Tokyo Stock
Exchange, resulting in further changes to their respective shareholder bases.
In addition, we confirmed with Mr. Hiroyuki Maki, a shareholder of the Company and a member of the founding family, as well as the parent
company, MELCO Group Inc., that they will continue to hold Shimadaya shares for the mid- to long-term after the Spin-off, similarly to how
they previously held the shares of the Company. However, at the time of the Spin-off, a part of Shimadaya shares held by them are expected tobe sold to improve their liquidity.

Q1-14
What will the personnel
and capital relationships
with Shimadaya be like?

A1-14
After the Spin-off takes effect, there will be no officers holding concurrent positions at both the Company and Shimadaya, except for Mr.
Hiroyuki Maki, President and CEO of the Company and part-time director of Shimadaya. Shimadaya will no longer be a consolidated subsidiaryof the Company as a result of the Spin-off.

Q1-15
Could you tell me about
the likelihood of meeting
the requirements for
qualification under the
reorganization taxation
system?

A1-15
The Spin-off is on condition that the requirements for qualification under the reorganization taxation system are satisfied, and no obstacle to such
satisfaction is expected.

Q1-16
How is margin trading
processed (including rights
processing and theprohibition of the actual
receipt of purchased
stocks)? Additionally, how
are cumulative stock
investments and mini-stock
investments handled?

A1-16
For information on how margin trading, cumulative stock investments and mini-stock investments are handled, please contact your securities
company.

14

Q1-17
What can we expect
regarding dividends forthe fiscal year ending
March 31, 2025?

A1-17
The estimated amount of dividends differs depending on whether the Spin-off takes effect or not. For details of dividends for the fiscal year
ending March 31, 2025, please refer to “Summary of Consolidated Financial Results for the Year Ended March 31, 2024” dated today.
In addition, the specifics of dividends paid by Shimadaya have not yet been determined.
[Added on May 27, 2024] The situation regarding Shimadaya’s dividend distribution has not yet been determined. However, at the annual
shareholders’ meeting held in May 2024, it was resolved that the post-listing dividend policy will aim for stable distributions with a consolidated
payout ratio of approximately 30% to 40%, and that, after the listing, dividends will basically be distributed twice a year (interim and year-end).

15

2. Procedures for dividends in kind
Question

Answer

Q2-1

A2-1

Please explain the scheduleOn the condition that the Spin-off is approved at the annual shareholders’ meeting held on Wednesday, June 26, 2024 and that the listingfor dividends in kind.

approval for Shimadaya common shares is obtained from the Tokyo Stock Exchange and the said approval is not revoked, along with otherconditions, shareholders of the Company as of the distribution record date (Monday, September 30, 2024) will, on Tuesday, October 1, 2024,
receive one Shimadaya common share for each share of the Company they hold.

Q2-2

A2-2

What should I do to receive

As a result of the Spin-off, shareholders of the Company as of the distribution record date (Monday, September 30, 2024) will receive one share

Shimadaya shares asof Shimadaya for each share of the Company they hold. Therefore, you need to be a shareholder of the Company as of the distribution record

dividends in kind?

date. To become a shareholder of the Company as of the distribution record date, you need to place the buy order and execute it by the last cumrights date (Thursday, September 26, 2024).

Q2-3

A2-3

How many shares of

As a result of the Spin-off, Shimadaya shares will be delivered proportionally based on the number of the Company’s shares held by its

Shimadaya will beshareholders as of the distribution record date in order to satisfy the requirements for qualification under the reorganization taxation system.

delivered for each share ofMore specifically, shareholders of the Company as of the distribution record date (Monday, September 30, 2024) will receive one share of

the Company I hold?

Shimadaya for each share of the Company they hold. Regarding the number of shares to be delivered, the current total number of issued shares

Additionally, how did youof the Company (excluding treasury shares held) does not match the total number of issued Shimadaya shares. However, plans are in place todetermine the number ofalign the total number of shares issued by both companies through a stock split of Shimadaya shares by the time listing approval is obtained

shares?

from the Tokyo Stock Exchange. In addition, the Company plans to suspend receiving the request for purchasing additional fractional shares of
the Company for a period from Friday, July 5, 2024 to Tuesday, October 1, 2024 in order to finalize the number of shares to prepare for theabove procedure. Furthermore, if the total number of issued shares of the Company (excluding treasury shares held) decreases as a result of
requests for buying fractional shares, it is planned that Shimadaya will, on Friday, September 27, 2024, purchase the same number of its sharesas treasury stock as the number of the Company’s shares that have been delivered as a result of requests for purchasing fractional shares, therebyaligning the total number of issued shares of the Company (excluding treasury shares held) with the total number of issued Shimadaya shares(excluding treasury shares held). Therefore, in any case, all Shimadaya shares will be transferred to shareholders of the Company by delivering
one Shimadaya share for each share of the Company they hold.

16

Q2-4

A2-4

Are any fractional shares

As described in A2-3 above, the current total number of issued shares of the Company (excluding treasury shares held) does not match the total

generated as a result of thenumber of issued Shimadaya shares. However, plans are in place to align the total number of shares issued by both companies through a stock

delivery of Shimadaya

split of Shimadaya shares by the time listing approval is obtained from the Tokyo Stock Exchange. Therefore, no fractions are expected to beshares?

generated in shares to be delivered as a result of the Spin-off.

Q2-5

A2-5

What procedures are

On Tuesday, October 1, 2024, Shimadaya shares will be distributed to shareholders of the Company as of the distribution record date (Monday,

required for receiving

September 30, 2024) with no specific action required from them in general. At the time of the distribution, the shares are expected to be

Shimadaya shares asdelivered to the accounts of shareholders on Tuesday, October 1, 2024. To confirm the delivery, please contact your securities company.

dividends in kind?
Q2-6

A2-6

Do I need to make a

At the time of the Spin-off, shares of Shimadaya (a subsidiary of the Company) held by the Company will be delivered to shareholders of thepayment to receive

Company through dividends in kind (dividends in the form of assets other than money). Therefore, shareholders of the Company do not need to

Shimadaya shares?

make a special payment to receive Shimadaya shares.

Q2-7

A2-7

How can I verify if

The shares are expected to be delivered to the accounts of shareholders on Tuesday, October 1, 2024 when the distribution of dividends in kind

Shimadaya shares haveis reflected. To confirm the delivery, please contact your securities company.

been delivered?
Q2-8

A2-8

Is it possible to decline theAt the time of the Spin-off, shares of Shimadaya (a subsidiary of the Company) held by the Company will be delivered to shareholders of thereceipt of Shimadaya

Company through dividends in kind (dividends of property other than cash). Therefore, without exception, Shimadaya shares will be delivered

shares? Is it not possible toto shareholders of the Company as of the distribution record date (Monday, September 30, 2024), based on the number of the Company’s shares

receive the dividends inthey hold.

cash?

In addition, the Spin-off will issue dividends in kind that provide no right to demand distribution of monies (a right to demand delivery ofmonies in lieu of dividends of the said property from a company) as defined in Article 454, Paragraph (4), Item (i) of the Companies Act, inorder to satisfy the requirements for qualification of the reorganization taxation system. Due to this, you cannot receive the dividends in cash,
and must receive shares as dividends.
However, it is possible to sell the shares on the market after they are listed.

17

Q2-9

A2-9

Could you tell me about

Normally, no particular expenses will be incurred to receive dividends in kind.

the expenses incurred as aresult of receiving
dividends in kind?
Q2-10

A2-10

For the spin-off, what

Around the end of October 2024, the Company plans to send a distribution allocation notice and a notice on the proportion of distributed assets

documents will be sent,

to shareholders of the Company as of the distribution record date (Monday, September 30, 2024) who will receive Shimadaya shares. For

where, and when?

confirmation on whether any written notices will be sent from your securities company and for other information, please contact them.

Q2-11

A2-11

To which accounts will

Typically, Shimadaya shares to be distributed are expected to be delivered to the respective accounts where shareholders hold shares of the

Shimadaya shares be

Company. Our understanding is that if shareholders hold Company shares in specified accounts, Shimadaya shares will be delivered to thosedelivered—specified or

specified accounts, and if shareholders hold Company shares in general accounts, Shimadaya shares will be delivered to those general accounts.

general accounts?

However, some securities companies may handle this differently, so please contact your securities companies for details.

Q2-12

A2-12

If shares of the Company

If shares of the Company are held in a NISA account as of the distribution record date (Monday, September 30, 2024), Shimadaya shares will be

are held in a NISA

delivered to that NISA account. For details, please contact your securities company.

account, how will
Shimadaya shares behandled?
Q2-13

A2-13

Will Shimadaya shares be

Shimadaya shares will not be distributed as dividends in kind for the treasury shares held by the Company in accordance with the provisions of

distributed for the treasury

Article 454, Paragraph (3) of the Companies Act.

shares of the Company?

18

3. Trading of Shimadaya shares and the status of Shimadaya after the Spin-off
Question

Answer

Q3-1

A3-1

Could you explain the

From the standpoint of ensuring that shareholders have opportunities to purchase and sell Shimadaya shares, which will be distributed aslisting of Shimadaya

dividends in kind, the Spin-off will be based on the assumption that the shares of Shimadaya will be listed on the Tokyo Stock Exchange. For

shares?

that purpose, Shimadaya submitted a preliminary application for initial listing to the Tokyo Stock Exchange on April 24, 2024. The Company
will submit a main application for initial listing to the Tokyo Stock Exchange prior to the implementation of the Spin-off, and the Spin-off will
be on condition that Shimadaya obtains the listing approval from the Tokyo Stock Exchange and the said approval is not revoked. The listing of
Shimadaya shares and the timing thereof have not been assured at this moment, since they are on condition that the listing is approved by the
Tokyo Stock Exchange as a result of future listing examinations by Japan Exchange Regulation.

Q3-2

A3-2

Will new Shimadaya

The Spin-off will not result in the issuance of new Shimadaya shares.

shares be issued?
Q3-3

A3-3

Could you tell us about

Shimadaya has not issued share acquisition rights (dilutive shares).

Shimadaya shareacquisition rights (dilutive
shares)?
Q3-4

A3-4

Will there be any

As a result of the Spin-off, Shimadaya will separate and become independent from the Current Group, but its business operations will continue aschanges in Shimadaya’s

before. We believe that ensuring Shimadaya’s independence in terms of management, capital and listing will lead to the steady implementation ofbusiness after the Spin-

business strategies and the acceleration of growth, in other words, further improvement of shareholder value.

off?
Q3-5

A3-5

Will there be any

We plan to submit a proposal for the future officer composition to the 69th annual shareholders’ meeting of Shimadaya to be held on June 20,changes in Shimadaya’s

2024. Although Norio Kinoshita, Director and Chairperson of Shimadaya, and Ryuta Sugiyama, Director of Shimadaya, are scheduled to retire

executive team after thefrom the position of Director of Shimadaya due to the expiration of their terms of office and Ai Sakai is scheduled to assume the position of

Spin-off?

Outside Director (Audit and Supervisory Committee Member) of Shimadaya at the same shareholders’ meeting, there will be no changes in the19main officers including Kenji Okada, President and CEO before and after the Spin-off.
Q3-6

A3-6

Could you explain the

The Spin-off will not affect the operating results of Shimadaya Group. We believe that ensuring Shimadaya’s independence in terms ofimpact of the Spin-off

management, capital and listing will lead to the steady implementation of business strategies and the acceleration of growth, in other words,

on business results?

further improvement of shareholder value.

Q3-7

A3-7

Could you tell us about

For details, please refer to “7. Consolidated financial statements of Shimadaya (unaudited)” of “Notice Concerning Dividends in Kind of

Shimadaya’s financial

Subsidiary Shares (Share-Distribution-Type Spin-off) and Change of Specified Subsidiaries” dated as of May 13, 2024.

condition over the past
few years?
Q3-8

A3-8

How will information on

Until Shimadaya shares are listed, information on Shimadaya Group will be disclosed to shareholders and investors as part of information on thecompanies ofCurrent Group in a timely and appropriate manner, as before. In addition, if Shimadaya is listed on the Tokyo Stock Exchange, it will submit an

Shimadaya Group be

annual securities report and other documents and disclose information in a timely manner at the Tokyo Stock Exchange.

disclosed in the future?
Q3-9

A3-9

Could you explain the

We confirmed with Mr. Hiroyuki Maki, a major shareholder of the Company and a member of the founding family, as well as the parent

policy for holding

company, MELCO Group Inc., that they will continue to hold Shimadaya shares for the mid- to long-term after the Spin-off, similarly to how

Shimadaya shares thatthey previously held the shares of the Company. However, at the time of the Spin-off, a part of Shimadaya shares held by them are expected tothe current major

be sold to improve their liquidity.

shareholders of theCompany will have after
the Spin-off?

4. Trading of Company shares and the status of the Company after the Spin-off
Question

Answer

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Q4-1

A4-1

Will the Company

The shares of the Company will continue to be listed on the Tokyo Stock Exchange and the Nagoya Stock Exchange after the Spin-off.

continue to be listed?
Q4-2

A4-2

Could you explain the

The Company plans to pay dividends in kind to shareholders who are recorded on the last shareholder list as of Monday, September 30, 2024,

impact of the Spin-off onwhich is the distribution record date, at a ratio of one share of Shimadaya per share of the Company held by shareholders of the Company. As a

the Company’s shareresult of the distribution of dividends in kind, theoretically, the shares of the Company will be adjusted by an amount equivalent to the value of

price?

Shimadaya shares on the ex-rights date (Friday, September 27, 2024).
At the time of ex-rights of the Company’s shares, since the total numbers of issued shares of the Company and Shimadaya excluding the numberof treasury shares held as of the distribution record date will be the same, trading is expected to be carried out on the Tokyo Stock Exchange on
Friday, September 27, 2024, using the per share price calculated by the following formula as the Company’s base price. The base price refers to a
price that is a basis of the daily price limit (a range within which the price can fluctuate during a day) but does not refer to an actual trading pricefor each trading conducted on Friday, September 27, 2024. The Tokyo Stock Exchange will separately announce the treatment of trading,including the calculation method of the base price.
Base price on the ex-rights date of the Company’s shares (Friday, September 27, 2024) = Closing price of shares on the Company’s last cumrights date (Thursday, September 26, 2024) - Interim (forecast) dividend per share at the end of the first half of the fiscal year ending March 31,
2025 - Opening price of Shimadaya shares (Note)(Note) If the sale of Shimadaya shares does not take place at the time of their listing, the trade reference price of Shimadaya shares in a direct
listing as described in Q1-7 above will be used instead of the opening price of Shimadaya shares.

Q4-3

A4-3

Does the Spin-off affectIt is possible to buy and sell the Company's shares on the Tokyo Stock Exchange and the Nagoya Stock Exchange in the same manner as before.

the trading of shares of theCompany?
Q4-4

A4-4

Please explain the details of If the Spin-off is carried out, the ex-rights date for the Company’s shares will be Friday, September 27, 2024, and in theory, the value of theshare trading after the ex-

Company’s shares will be adjusted by the value of Shimadaya shares as of the same day. On the other hand, however, the Company’s shareholders

rights date.

will receive distribution of Shimadaya shares on Tuesday, October 1, 2024.

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Q4-5

A4-5

Will there be any changes

As a result of the Spin-off, the food business will separate and become independent from the Current Group’s business segments, but this will notin the Company’s

affect its IT and other businesses. After the Spin-off, we will endeavor to further improve corporate value by concentrating the New Group’sbusiness after the Spin-management resources on these businesses.

off?
Q4-6

A4-6

Will there be any changes

We plan to submit a proposal for the future officer composition to the next annual shareholders’ meeting. We will implement the businessin the Company’s

strategies more steadily than before and endeavor to improve corporate value.

executive team after the
Spin-off?
Q4-7

A4-7

Could you explain the

There will be no changes in the Current Group until the end of September 2024 or prior to the implementation of the Spin-off. However, after the

impact of the Spin-off on

effective date of distribution in kind, Shimadaya will be no longer a subsidiary of the Company. Therefore, if approval is obtained at the annual

business results?

shareholders’ meeting, listing approval is granted from the Tokyo Stock Exchange, and the Spin-off takes effect, the operating results of the New
Group from October 2024 onward will not include those of Shimadaya Group. We believe the Spin-off enables the New Group and Shimadaya
Group to allocate management resources for their respective growth strategies, and accelerate their growth, thereby contributing the
maximization of shareholder value.
For details of the impact on the operating results of the Company, please refer to “6. Outlook for the future (4) Impact on the Company’s operating
results”
of “Notice Concerning Dividends in Kind of Subsidiary Shares (Share-Distribution-Type Spin-off) and Change of Specified Subsidiaries” dated
as of May 13, 2024.

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Q4-8

A4-8

Could you explain what

For details, please refer to “8. <<Reference>> Consolidated Financial Statements of the Company Excluding Shimadaya (Unaudited)” of “Notice

the Company's financial

Concerning Dividends in Kind of Subsidiary Shares (Share-Distribution-Type Spin-off) and Change of Specified Subsidiaries” dated as of May

condition would have13, 2024.

looked like over the past
few years, if the Spin-off
had taken effect?

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5. Tax treatment for dividends in kind
Question
Q5-1
Could you provide
information on tax
advantages the Spin-off
offers to shareholders?

Q5-2
Could you provide
information on theacquisition prices of sharesof the Company andShimadaya?

Answer
A5-1
Since the Spin-off will be conducted on the assumption that it falls under the qualified share distribution as defined in Article 2, Item (xii)-15-3 of
the Corporation Tax Act, the taxation on deemed dividends will not be applied to shareholders in connection with the dividends in kind of
Shimadaya shares (Article 24, Paragraph (1), Item (iii) of the Corporation Tax Act and Article 25, Paragraph (1), Item (iii) of the Income TaxAct). In addition, the Spin-off is a share distribution in which no assets other than shares of the wholly owned subsidiary corporation aredelivered, and those shares are delivered in proportion to the ratio of the number of shares of the corporation that makes distribution in kind heldby shareholders of the corporation that makes distribution in kind to the total number of issued shares of the corporation that makes distribution inkind. Taxation on capital gains and losses, therefore, does not apply and is deferred (Article 61-2, Paragraph (8) of the Corporation Tax Act,
Article 37-10, Paragraph (3), Item (iii) of the Act on Special Measures Concerning Taxation, Article 37-11, Paragraph (3) of the same Act).
Furthermore, compared to a general sale of a subsidiary's shares or a company's business, the Spin-off does not result in taxation on the Company
for proceeds from a sale. Therefore, it prevents the outflow of the Company's assets. Consequently, the Spin-off offers tax advantages toshareholders from the viewpoint of shareholder value as well.
A5-2
The acquisition prices of shares of the Company and Shimadaya for shareholders for the purpose of taxation after the Spin-off shall be the prices
calculated by the following formulas using the proportion of distributed assets (the proportion prescribed in Article 23, Paragraph (1), Item (iii) of
the Order for the Enforcement of the Corporation Tax Act and Article 61, Paragraph 2, Item (iii) of the Order for Enforcement of the Income Tax
Act related to share distribution) (Article 119, Paragraph (1), Item (viii) of the Order for the Enforcement of the Corporation Tax Act, Article 1132, Paragraph (1) of the Order for Enforcement of the Income Tax Act). In addition, the proportion of distributed assets is expected to beapproximately 0.249. The announcement will be released once this figure is finalized.
Acquisition price per share of Shimadaya (X) = Acquisition price before adjustment per share of the Company (Y) × Proportion of distributed
assetsAcquisition price per share of the Company after the Spin-off (Z) = (Y) - (X)<<Example>> Acquisition price after adjustment assuming that the proportion of distributed assets is 0.249 and in the case that 100 shares of theCompany were purchased at ¥3,435 per share (the closing price of the Company’s common shares on the Tokyo Stock Exchange Standard Market
on April 30, 2024)
Acquisition price of Shimadaya shares = ¥3,435 x 100 shares x 0.249 = ¥85,500

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Acquisition price of shares of the Company after the Spin-off = ¥3,435 × 100 shares - ¥85,500 = ¥258,000
Please note that the adjustment of the acquisition prices is for tax purposes only, and the acquisition prices for tax purposes mentioned above do
not mean the respective values of Shimadaya shares and the Company’s shares after the Spin-off.
*In the case of corporate shareholders, please replace “acquisition price” with “book value (for tax purposes)” in the calculation.
Q5-3

A5-3

Could you explain the

The proportion of distributed assets is a proportion calculated by dividing the “book value of Shimadaya shares immediately prior to the shareproportion of distributed

distribution” by the “amount obtained by subtracting the book value of liabilities from the book value of assets of the Company as of the end ofassets?

the fiscal year preceding the fiscal year to which the share distribution date belongs (including the amount of increase or decrease in share capital,
etc. and certain profit reserves between the end of the previous fiscal year and the time immediately preceding the share distribution). The
announcement on the proportion of distributed assets will be released assoon as it is determined.
At this moment, the proportion of distributed assets is expected to be approximately 0.249, but this figure may change if any circumstances arisethat require adjustment.

Q5-4

A5-4

When will the proportion

At this moment, the proportion of distributed assets is expected to be determined around September 2024, but this timeline may change if anyof distributed assets becircumstances arise that require adjustment.

determined?
*The descriptions of tax treatment above do not exhaust the tax procedures, etc. required of shareholders, nor mention the tax treatment in countries other than Japan in relation to theSpin-off. Specific tax procedures and the tax treatment on the side of shareholders may vary depending on the individual circumstances of each shareholder. Please consult with yourlocal tax office, tax accountant, etc. to determine how the Spin-off shall be treated for tax purposes under your own circumstances.

25

6. Accounting treatment by corporate shareholders, etc.
Question

Answer

Q6-1

A6-1

Could you explain the

For specific accounting treatment, please confirm with your accountant or a similar professional. Please note that the following is a summary ofaccounting treatment for

Paragraph 52 of the Accounting Standard for Business Divestitures and Paragraph 297 of the Guidance on Accounting Standard for Businessthe Spin-off?

Combinations and Accounting Standard for Business Divestitures.
In accordance with the general accounting principles for exchange transactions, etc., the accounting treatment is performed considering thepreviously owned shares as having been effectively exchanged.
If investment is deemed to continue, a gain or loss on exchange of shares is not recognized, and the acquisition cost of shares of a wholly-owned
subsidiary (Note: Shimadaya) of the original company (Note: the Company) from which the subsidiary is spun off is the value of a portion of theappropriate book value of shares of the original company (Note: the Company) immediately before the distribution is received. This portion isconsidered exchanged and is calculated based on a reasonable method for proportional allocation. Reasonable methods for proportional allocation
are considered to include: (1) allocation based on the ratio of relevant market prices; (2) allocation based on the ratio of market capitalizations;and (3) allocation based on the ratio of relevant book values.

26

<Contact desk for other questions and inquiries>(Regarding company information)
MELCO HOLDINGS INC.
+81-3-4213-1122 (9:00 to 17:00 on weekdays)(Regarding individual transactions and procedures)
Please contact your securities company.
(Regarding individual tax treatments)
Please contact your nearest tax office, certified tax accountant, etc.
(Other inquiries regarding a general plan for the Spin-off and related matters)
Call Center for the Spin-off (within Daiwa Securities Co., Ltd.)
0120-851-850 (9:00 to 17:00 on weekdays)

Note: This document aims to provide the general public with information on the Spin-off, and has not been prepared to solicit investments or offer any securities of the Company or its subsidiaries,
either in Japan or abroad.

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