Pola Orbis : Establishment of Overseas Subsidiary and Transfer of Sub-subsidiaries through Distribution of Dividends in Kind of Subsidiaries

	November 20, 2023
Company Name:	POLA ORBIS HOLDINGS INC.
Representative:	Yoshikazu Yokote,
	Representative Director and President
TSE Code:	4927 (Prime Market)
Contact:	Naotaka Hashi, Corporate Officer,
	General Manager, Corporate
	Communications Div.
	TEL.: [phone]

Establishment of Overseas Subsidiary and Transfer of Sub-subsidiaries through Distribution of

Dividends in Kind of Subsidiaries

POLA ORBIS HOLDINGS INC. (the "Company") hereby announces that it has resolved, at a meeting of the Board of Directors held on November 20, 2023, to establish a subsidiary that will supervise its regional operations in the Chinese market.

In addition, POLA INC. ("POLA") and ORBIS Inc. ("ORBIS"), which are wholly-owned subsidiaries of the Company, each resolved at their respective Board of Directors meetings, held on November 20, 2023, to distribute to the Company as dividends in kind all equity interests of Shanghai POLA Trading Co., Ltd. ("POLA Shanghai"), which are held by POLA, and all equity interests of Orbis Beijing Inc. (ORBIS Beijing), which are held by ORBIS. As a result, the Company will directly hold all equity interests of POLA Shanghai and ORBIS Beijing, and there will be a transfer of the Company's sub-subsidiaries.

1. Reasons for establishment of subsidiary and distribution of dividends in kind (transfer of sub-subsidiaries) From 2024 onward, we aim to further accelerate the Group's continuing global expansion by using local leadership to directly grasp market changes in each business region. This will enable us to fully apply the strengths of the Group's multi-brand portfolio, quickly implementing optimal regional strategies while aligning with market and customer changes. We will transition to a locally-led Groupwide structure, an organizational system that will maximize business performance in each region.

As part of this effort, we will establish a regional headquarter in China and reorganize our operating structure to make POLA Shanghai and ORBIS Beijing, which currently carry out business as local subsidiaries in China, into wholly-owned subsidiaries of the Company. While building a locally-led strategy across our brands and enhancing our regional marketing, we will consolidate common operations at our existing local subsidiaries in China with the aim of upgrading and optimizing our operations. We will accelerate our efforts to maximize our growth potential and establish a revenue base in the Chinese market, which is our most important market drives the Group's overseas expansion.

2. Details regarding establishment of subsidiary 1) Overview of subsidiary to be established

	(1)	Company Name	POLA ORBIS (Shanghai) Enterprise Management CO., LTD.
	(2)	Address	Shanghai, People's Republic of China
	(3)	Name and Title of	Seiichi Takaya, Representative Director and President
	Representative
	(4)	Description of Business	Business management, supervision and support for business strategy
	formulation, etc. of local subsidiaries in China
	(5)	Amount of Capital	USD 7,000 thousand
	(6)	Date of Establishment	January 2024
	(7)	Major Shareholder and	POLA ORBIS HOLDINGS INC. 100%
	Shareholding Ratio
2) Schedule
	(1)	Date of Resolution by the	November 20, 2023
	Board of Directors
	(2)	Date of Company	January 2024 (planned)
	Establishment
	(3)	Date of Commencement	January 2024 (planned)
	of Business

3. Details regarding distribution of dividends in kind (transfer of sub-subsidiaries)

1. Disposal of surplus of POLA and ORBIS
   POLA and ORBIS will distribute surplus dividends (dividends in kind) using retained earnings as capital.
2. 1. Dividend asset type and total book value
      The type of dividend asset distributed to the Company is a non-monetary asset (investments in capital as listed below). The latest total book value is as follows.

Company Name	Number of Shares	Shareholding or	Book Value
etc.	Equity Ratio
Shanghai POLA Trading Co.,	Investments	100%	JPY 8,807,830
Ltd.	in capital
Orbis Beijing Inc.	Investments	100%	JPY 1
in capital

1. Matters relating to distribution of dividend asset to shareholders
   All of the dividend asset will be distributed to the Company, which holds all issued shares of POLA and ORBIS, as of the effective date of the dividends in kind.
2. Effective date of surplus dividends January 1, 2024 (planned)

1. Overview of companies distributing dividends in kind
   POLA INC.

	(1)	Company Name	POLA INC.
	(2)	Address	2-2-3 Nishigotanda, Shinagawa-ku, Tokyo
	(3)	Name and Title of	Miki Oikawa, Representative Director and President
	Representative
	(4)	Description of Business	Sales of cosmetics, etc.
	(5)	Amount of Capital	JPY 110 million
	(6)	Date of Establishment	July 1946
	(7)	Net Assets	JPY 39,603 million (as of December 31, 2022)
	(8)	Total Assets	JPY 58,876 million (as of December 31, 2022)
	(9)	Major Shareholder and	POLA ORBIS HOLDINGS INC. 100%
	Shareholding Ratio
ORBIS Inc.
	(1)	Company Name		ORBIS Inc.
	(2)	Address		2-1-14 Hiratsuka, Shinagawa-ku, Tokyo
	(3)	Name and Title of		Takuma Kobayashi, Representative Director and President
	Representative
	(4)	Description of Business		Sales of cosmetics, etc.
	(5)	Amount of Capital		JPY 110 million
	(6)	Date of Establishment		June 1984
	(7)	Net Assets		JPY 38,824 million (as of December 31, 2022)
	(8)	Total Assets		JPY 46,174 million (as of December 31, 2022)
	(9)	Major Shareholder and		POLA ORBIS HOLDINGS INC. 100%
	Shareholding Ratio

1. Overview of transferred sub-subsidiaries Shanghai POLA Trading Co., Ltd.

(1)	Company Name	Shanghai POLA Trading Co., Ltd.
(2)	Address	Shanghai, People's Republic of China
(3)	Name and Title of	Seiichi Takaya, Representative Director and President
Representative
(4)	Description of Business	Sales of cosmetics, etc.
(5)	Amount of Capital	USD 32,634 thousand
(6)	Date of Establishment	October 2004
(7)	Net Assets	JPY 2,245 million (as of December 31, 2022)
(8)	Total Assets	JPY 3,239 million (as of December 31, 2022)
(9)	Investor and Investment	POLA INC. 100%
Ratio
(10)	Operating results and financial position of the company in question for the preceding three
financial years
	Financial year	Fiscal year ended		Fiscal year ended		Fiscal year ended
	December 31, 2020		December 31, 2021		December 31, 2022
Net Assets	JPY 1,328 million		JPY 2,126 million		JPY 2,245 million
Total Assets	JPY 2,574 million		JPY 3,308 million		JPY 3,239 million
Net Sales	JPY 3,504 million		JPY 4,410 million		JPY 4,521 million
Operating Income	JPY 815 million		JPY 562 million		JPY 136 million

	Ordinary Income		JPY 830 million		JPY 621 million		JPY 117 million
	Profit Attributable to Owners of	JPY 756 million		JPY 581 million		JPY 55 million
	Parent
Orbis Beijing Inc.
	(1)	Company Name	Orbis Beijing Inc.
	(2)	Address		Beijing, People's Republic of China
	(3)	Name and Title of	Seiji Kurehara, Representative Director and President
	Representative
	(4)	Description of Business	Sales of cosmetics, etc.
	(5)	Amount of Capital	USD 29,880 thousand
	(6)	Date of Establishment	September 2008
	(7)	Net Assets		JPY (1,956) million (as of December 31, 2022)
	(8)	Total Assets		JPY 958 million (as of December 31, 2022)
	(9)	Investor and Investment	ORBIS Inc. 100%
	Ratio
	(10)	Operating results and financial position of the company in question for the preceding three
	financial years
	Financial year		Fiscal year ended		Fiscal year ended		Fiscal year ended
		December 31, 2020		December 31, 2021		December 31, 2022
	Net Assets		JPY (748) million		JPY (1,329) million		JPY (1,956) million
	Total Assets		JPY 697 million		JPY 716 million		JPY 958 million
	Net Sales		JPY 797 million		JPY 795 million		JPY 914 million
	Operating Income		JPY (380) million		JPY (407) million		JPY (494) million
	Ordinary Income		JPY (436) million		JPY (451) million		JPY (570) million
	Profit Attributable to Owners of	JPY (436) million		JPY (451) million		JPY (570) million
	Parent
4) Schedule
November 20, 2023	Resolution by POLA Board of Directors, Resolution by ORBIS Board of Directors
November 20, 2023	Resolution by the Board of Directors of the Company
November 20, 2023	POLA General Meeting of Shareholders, ORBIS General Meeting of Shareholders
January 1, 2024	Effective date (distribution of dividends in kind) (planned)

4. Impact on performance

The establishment of this subsidiary will have a negligible effect on the consolidated results for fiscal 2023. However, should there arise a need to revise business forecasts or any other matter requiring disclosure, we will promptly disclose such information.

Furthermore, this distribution of dividends in kind is a transaction within the Group. As such, it does not cause changes to the Company's or its consolidated net assets, and does not affect business results.

Note: The impact on consolidated performance was prepared based on information that was available as of the date of this material was published. Actual performance may differ from forecast figures due to changes in various factors in the future.