Tokyo Lifestyle Co., Ltd.

Statement of Changes in net assets

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Note to Individual Securities

Declining Ratio Method (provided, however, that buildings acquired on or after April 1, 1998 (excluding ancillary facilities) and

Facilities and structures attached to buildings acquired on or after April 1, 2016, are subject to the straight-line method.

The main service life is as follows:

Leased assets related to finance and lease transactions other than the transfer of ownership

We use a straight-line method in which the lease period is the useful life and the residual value is zero.

To prepare for losses due to bad debts, we record the expected number of uncollectible receivables based on the actual rate of bad debts for general receivables and the recoverability of specific receivables such as receivables of doubtful concerns.

To prepare for the payment of bonuses for employees, we have recorded an estimated amount corresponding to the current fiscal year out of the estimated amount to be paid.

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To prepare for retirement benefits for employees, based on the retirement benefit obligations at the end of the current fiscal year, the amount that is recognized as occurring is recorded.

Retirement benefit obligations are calculated based on the amount of voluntary payment at the end of the fiscal year stipulated in the retirement allowance regulations.

Of the Company’s points issued under the point system for the purpose of sales promotion, they are not attributable to sales.

The amount expected to be used in the future is recorded based on the actual rate of use in the past, etc., for the unused amount.

Our main business is the sale of cosmetics and daily necessities, and the sale of These products are related to the delivery at the time of delivery, the customer has acquired control over the goods and has determined that the performance obligations have been satisfied. Therefore, we are aware of the revenue at the time of delivery of the product. In addition, the revenue goes to contracts with customers. It is measured by the amount obtained by deducting returns, discounts, rebates, etc. from the promised consideration.

Consumption tax and other accounting procedures are based on the tax-exclusive method.

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Our company operates wholesale, retail, e-commerce, and franchise businesses both domestically and internationally. The primary types of goods and services offered in each of these businesses include daily necessities, cosmetics, pharmaceuticals, consumer electronics, luxury goods, and trading card games.

This is as described in the “Accounting Standards for Revenues and Expenses” section of “Notes on Important Accounting Policies.”

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In conjunction with the introduction of the Special Defense Corporation Tax (effective for fiscal years beginning on or after April 1, 2026), deferred tax assets and deferred tax liabilities related to temporary differences expected to be resolved in the following fiscal year or later are calculated using a statutory effective tax rate of 35.43%, up from 34.59%.As a result of this change, deferred tax liabilities (net of deferred tax assets) for the current fiscal year increased by 10,626 thousand yen, and the income tax adjustment increased by the same amount.

Borrowings are used for working capital (mainly short-term) and capital investment funds (long-term).

As of March 31, 2026 (the closing date of the current fiscal year), the balance sheet amount, market value, and the difference between these amounts are as follows.

In addition, notes are omitted for cash, and notes are omitted for deposits, accounts receivable, accounts payable, and short-term borrowings because they are settled in a short period of time, so the market value approximates the book value.

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(Note 1) How to calculate the market value of a financial instrument