Medipal : Notice of Differences between Forecast of Financial Results and Actual Results for the Interim Period of the Fiscal Year Ending March 31, 2017, Revisions to Forecast of Financial Results for the Fiscal Year Ending March 31, 2017, and Dividends and Revisions to Dividend Forecast (Dividend Increase) at Consolidated Subsidiary PALTAC CORPORATION

MEDIPAL HOLDINGS CORPORATION

Representative: Shuichi Watanabe, Representative Director, President and CEO Code number: 7459 (1st Section, Tokyo Stock Exchange)

Contact: Mamoru Tsuchishio, Manager of Corporate Communications Department

Tel: [phone]

Notice of Differences between Forecast of Financial Results and Actual Results for the Interim Period of the Fiscal Year Ending March 31, 2017, Revisions to Forecast of Financial Results for the Fiscal Year Ending March 31, 2017, and Dividends and Revisions to Dividend Forecast (Dividend Increase) at Consolidated Subsidiary PALTAC CORPORATION

PALTAC CORPORATION, a consolidated subsidiary of MEDIPAL HOLDINGS CORPORATION, today disclosed differences between actual results and the forecast of financial results for the interim period ended September 30, 2016, revisions to its forecast of financial results for the fiscal year ending March 31, 2017, and dividends and revisions to the dividend forecast (dividend increase), as described in the attached news release.

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PALTAC CORPORATION

Representative: Kiyotaka Kimura, Representative Director, President and CEO Code number: 8283 (1st Section, Tokyo Stock Exchange)

Contact: Masaharu Shimada, Executive Officer, General Manager of Corporate Planning Division

Tel: [phone]

Notice of Differences between Forecast of Financial Results and Actual Results for the Interim Period of the Fiscal Year Ending March 31, 2017, Revisions to Forecast of Financial Results for the Fiscal Year Ending March 31, 2017, and Dividends and Revisions to Dividend Forecast (Dividend Increase)

PALTAC CORPORATION ("PALTAC") today announced that its results for the interim period of the fiscal year ending March 31, 2017 (April 1, 2016 to September 30, 2016) were different from the forecast of financial results released on May 12, 2016. Details follow below.

In addition, PALTAC's Board of Directors today approved the revisions to the forecast of financial results for the fiscal year ending March 31, 2017, payment of dividends with a record date of September 30, 2016, and revisions to the year-end dividend forecast announced on May 12, 2016. Details follow below.

1. Differences in and Revisions to Forecasts of Financial Results
2. Differences between Forecast of Non-Consolidated Financial Results and Actual Results for the Interim Period of the Fiscal Year Ending March 31, 2017 (From April 1, 2016 to September 30, 2016)

   (Millions of yen unless otherwise stated)

   Net sales	Operating income	Ordinary income	Net income	Net income per share (Yen)
   Previous forecast (A)	460,000	9,200	10,200	6,900	108.58
   Actual results (B)	475,080	10,695	11,923	8,128	127.92
   Amount of difference (B-A)	15,080	1,495	1,723	1,228
   Percentage difference (%)	3.3	16.3	16.9	17.8
   (Reference) Results for six months ended September 30, 2015	425,492	8,431	9,403	6,223	97.93

3. Revisions to Forecast of Non-Consolidated Financial Results for the Fiscal Year Ending March 31, 2017
(From April 1, 2016 to March 31, 2017)

(Millions of yen unless otherwise stated)

Net sales	Operating income	Ordinary income	Net income	Net income per share (Yen)
Previous forecast (A)	900,000	17,500	19,500	13,200	207.72
Revised forecast (B)	915,000	19,000	21,000	14,500	228.18
Amount of change (B-A)	15,000	1,500	1,500	1,300
Percentage change (%)	1.7	8.6	7.7	9.8
(Reference) Results for fiscal year ended March 31, 2016	860,350	16,101	18,556	11,929	187.73

Reasons for the Differences and Revisions

Net sales for the six months ended September 30, 2016 exceeded the previous forecast because of various factors, including strong sales of seasonal products, cultivation of business with retailers and manufacturers, and improvement of internal business processes. With respect to profits, PALTAC's ongoing revision of its business processes from product ordering and inventory management to shipping and delivery to retailers led to higher productivity. As a result, both sales and profits increased.

In addition, PALTAC revised the forecast of financial results for the fiscal year ending March 31, 2017 to reflect the results for the six months ended September 30, 2016.

4. Dividends and Revisions to Dividend Forecast
1. Dividend Details (Interim)

   Resolution Details	Most Recent Dividend Forecast (Announced May 12, 2016)	Result for the Year Ended March 31, 2016
   Record date	September 30, 2016	September 30, 2016	September 30, 2015
   Cash dividend per share	¥28.00	¥27.00	¥24.00
   Total dividend	¥1,779 million	－	¥1,525 million
   Effective date	December 2, 2016	－	December 1, 2015
   Dividend source	Retained earnings	－	Retained earnings

2. Revisions to Dividend Forecast

Cash Dividends per Share
Interim	Year-End	Full-Year Total
Previous forecast	¥27.00	¥27.00	¥54.00
Revised forecast	¥28.00	¥56.00
Result for current fiscal year (Year ending March 31, 2017)	¥28.00
Result for previous fiscal year (Year ended March 31, 2016)	¥24.00	¥26.00	¥50.00

Reason for the Revisions

For the six months ended September 30, 2016, net sales and profits both increased, exceeding the previous forecast, as described in the revisions to the forecast of financial results. In accordance with its basic policy on distribution of profits, PALTAC decided to increase the interim dividend by ¥1.00 per share compared with the previous forecast to ¥28.00 per share. The year-end dividend forecast has also been revised upward by ¥1.00 to

¥28.00 per share.

As a result, full-year dividends per share are expected to increase by ¥2.00 compared with the previous forecast and ¥6.00 compared with the previous fiscal year.

Note: The above results forecasts and dividend forecast are based on information available as of the date of this announcement. Future events may cause actual results to differ from forecasts.

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