Note : This document has been translated from the Japanese original forreference purposes only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shall prevail .

I’m Nohara and the representative director and president of Watahan Holdings Co.,
Ltd. We will now begin explaining our financial results for the fiscal year ending
March 2024.

As for today's explanation, I will first provide an overview of the financial results forthe first half of the fiscal year ending March 2024, then the earnings forecast forthe current fiscal year ending March 2025, and finally, I will explain the mediumterm management plan.

Before summary of the financial results for the fiscal year ending March 2024,

For the past three years, our company's management policy has been to be close to
the local community and create new value together with them.

As a result, sales decreased by 4.6% from the previous year to 128 billion yen.

Conversely, ordinary income increased by 5.9% to 3.23 billion yen.

Looking at the sales by segment, the reason for the decrease in sales is that theretail business and trading business increased by 1.25 billion and 1.66 billion,
respectively, while the construction business' sales decreased by nearly 9 billion.

Operating income also increased at the same level as sales, at 590 million yen in
the retail business and 570 million yen in the trading business, but decreased by730 million yen in the construction business.

Looking at performance by segment,First of all, the retail business.

In the retail business, our policy in the previous fiscal year was to renovate stores,
develop business formats, expand our distribution network, and develop originalproducts.

A dedicated team has been working on new renovations for the past five years,
including the former Wellness Life Saku Chuo store, a drugstore with a pet shop,
and the Nagano Prefecture store. We have recently opened a dispensing pharmacy
inside Gondo store in Nagano City.

In addition, in order to expand our distribution network, we have been purchasing
fish from all over Honshu and shipping it ourselves, but we have decided to take it astep further and purchase one boat for each region. It's starting to happengradually.

In partnership with Watahan Shoji, we directly import food not only from Japan but
from all over the world.

As we expand our logistics network, we are also gradually starting joint delivery
with local companies.

As shown in the graph, the development of original products has increased from anaverage of around 6% to over 10% over the past few years.

As a result, retail sales amounted to 78.8 billion yen, an increase of 1.6% from theprevious year.

In addition, segment profit was 1.36 billion yen (up 78.4% year on year) afteramortizing expenses such as opening two new stores the year before last.

Next is the construction business.

Our measures during the fiscal year included building a wood processing anddistribution network, promoting the development of products that utilize wood, andbuilding an overseas network in the steel field.

In building a wood processing and distribution network, we will gradually build asystem for processing and distributing locally produced wood,

As part of this effort, we have concluded a sponsorship agreement with Seiyano
Kenzai of Matsumoto City. As a result, not only the distribution of overseas timber,but also the distribution of domestic timber has expanded, making it possible tohave two-way commercial flow.

Additionally, in order to promote the development of products that utilize wood, we
began selling Prestowood, a wooden construction system, last year, and we are
steadily receiving orders.

Additionally, Watahan Solutions and Watahan Forestry are jointly developing nonresidential wooden buildings.

In the steel field, we are working with overseas fabricators to build an overseas
network, and last year we opened a new CAD center in Vietnam, following in
Myanmar and Dalian. Through this, we will further deepen our collaboration withoverseas fabricators.

However, as shown in the graph, there was a concentration of large properties lastyear, so actual sales decreased by 18.7%.

Segment profit was 1.15 billion yen (38.9% increase from the previous year), and as
you can see, business performance has been steadily increasing except for the year
before last.

Although there is a temporary increase due to the coronavirus pandemic, thebacklog of orders is steadily increasing.

Next is the trading business.

In the trading company business, we are expanding into the food field and thefertilizer and feed field.

As part of our expansion into the food sector, we are directly importing carefully
selected chicken and pork and further deepening our ties with retailers.

In addition, in the field of fertilizers and feed, we are conducting research anddevelopment on naturally derived fertilizers and feed.

The trading business increased by 27.8% from the year before last to 7.6 billion yen
due to widespread price revisions and entry into the food field.

Segment profit was 1.14 billion yen (up 98.9% year on year) due to progress inreceiving orders for sales of pharmaceutical raw materials.

So, here are the consolidated financial statements for the entire group.

As I mentioned earlier, current assets decreased by 3.69 billion yen due to progressin collecting accounts receivable from large construction properties, and fixed
assets decreased by 1.24 billion yen due to progress in depreciation.
Additionally, debts decreased by 6.46 billion yen and net assets increased by 1.53
billion yen due to progress in debt collection on large construction properties.

As a result, operating cash flow increased by 12.4 billion yen due to debt collection
on large construction properties. The investment amount was approximately 2.1
billion yen due to logistics at the Shizuoka factory and construction of a distribution
center. In addition, the financial position decreased by 9.4 billion due to therepayment of borrowings to collect accounts receivable from large construction
properties.

Next is our earnings forecast for the fiscal year ending March 2025.

In the fiscal year ending March 2025, sales will steadily increase, with sales
increasing by 3.1% to 132 billion yen.

Ordinary profit is also expected to increase by 4.1% to 3.37 billion yen, and theprofit margin will steadily rise.

Sales for each segment are expected to be 500 million yen in retail, 3 billion yen inconstruction, and 200 million yen in trade.

However, in terms of profit decreases, retail profits will increase by 330 million yen,construction profits will increase by 420 million yen, while trading profits will
decrease by 250 million yen.

Now, I would like to report on our performance forecasts by segment.

First is the retail business.

We will continue to promote our retail business based on three pillars: store
renovations, new business format development, further expansion of ourdistribution network, and acceleration of SPA operations.

We have recently reopened our Hirashima store and Shonai store as new specialty
stores for fish and pets.

By collaborating with our trading business, we have built a system that allows us togather food products from all over the world into a single store in our Minowa store
called World Market, and to meet the demands of foreigners.

Additionally, in order to expand our logistics network, the Iida Logistics Center has
been operating at full capacity since April.

Last year, the development rate of original products exceeded 10%, but this year weplan to increase it to 18% of sales.

In addition, we plan to accelerate the transition to SPA, make a group investment inan AI company specializing in AI pig farming, and utilize the company's DX to build
a new fully unmanned farm. It is scheduled to be completed next year.

As a result, the retail business' sales increased by 0.7% to 79.4 billion.

Segment profit is also expected to increase 24.7% to 1.69 billion due to progress indepreciation of new stores.

Next is the construction business.

In the construction business, we will continue to build wood processing anddistribution networks, and work together to promote new product development andbuild overseas networks.

Seiyano Kenzai, which joined the group, changed its name to Watahan Kenzai, andat the same time increased its domestic processing capacity,

The ability to process locally produced wood has increased dramatically, and asystem for exporting it has also been established.

Among these, we would like to develop products that are centered around Watahanforestry.

In addition to exporting lumber, the company is expanding overseas by utilizing
construction DX in the steel field, and hopes to integrate steel and lumber within its
group companies and strengthen its sales and development structure.

As a result, sales in the construction business next year are expected to increase by
7.5% to 43.3 billion yen.

Operating profit and segment profit are expected to increase by 36.5% to 1.57
billionNext is the trading business.

In the trading business, we will expand into the food field, expand the fertilizer andfeed field, and promote research and development.

In the food field, we have started selling prickly pear powder and edible cactus, a
new natural material that we have been working on for over five years. Prickly pear
powder is also used as a raw material for red dye, and as shown in the photo, weare currently developing it with the hope of using it as a new food material.

We will continue to collaborate with cotton farms within the group to advanceresearch and development of naturally derived fertilizers and feed.

Until now, we have mainly been conducting research and development ofpharmaceuticals and chemical products, but in the future we plan to build a newsystem that will also include the food field.

Sales are therefore expected to increase by 2.8% to 7.88 billion, especiallyconsidering the growth in the food sector.

However, segment profit is expected to decline due to the earlier shipment ofpharmaceutical raw materials last year. We also plan to focus on research anddevelopment investment, which is currently expected to be 880 million yen.

I would like to continue this season as well.
As a medium-term management plan,

The company has set a sales target of 150 billion yen in 2027, three years fromnow. By steadily increasing the profit margin to 3%, we hope to achieve our ordinary
income target of 4.5 billion yen. Thank you for your continued support.