Valuence : Annual Security Report for the Fiscal Year Ended August 31, 2021

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect, or any other forms of damages arising from this translation.

Securities Report

Fiscal Year	September 1, 2020
(Period 10)	To August 31, 2021

Valuence Holdings Inc.

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	Table of Contents
Part 1 Corporate Information .....................................................................................................................................................................	4
I. Company Overview................................................................................................................................................................................	4
1.	Key Management Indicators .............................................................................................................................................................	4
2.	History ..............................................................................................................................................................................................	7
3.	Business Lines ..................................................................................................................................................................................	8
4.	Affiliated Companies ......................................................................................................................................................................	11
5.	Employees.......................................................................................................................................................................................	13
II. Business ..............................................................................................................................................................................................	14
1.	Management Policies, Management Environment, Issues to be Addressed, etc. ............................................................................	14
2.	Business and Other Risks................................................................................................................................................................	18
3.	Management Analysis of Financial Position, Business Performance, and Cash Flows ..................................................................	21
4.	Important Contracts and Other Business Agreements.....................................................................................................................	28
5.	Research and Development Activities ............................................................................................................................................	28
III. Status of Facilities..............................................................................................................................................................................	29
1.	Overview of Capital Investment .....................................................................................................................................................	29
2.	Status of Major Facilities ................................................................................................................................................................	29
3.	Plans for New Equipment Installation, Removal, Etc. ....................................................................................................................	31
IV. Information on the Filing Company ..................................................................................................................................................	33
1.	Information on Company Stock ......................................................................................................................................................	33
2.	Information on Acquisition of Treasury Shares ..............................................................................................................................	43
3.	Dividend Policy ..............................................................................................................................................................................	45
4.	Information on Corporate Governance, Etc. ...................................................................................................................................	46
V. Accounting Status ...............................................................................................................................................................................	63
1.	Consolidated Financial Statements .................................................................................................................................................	64
2.	Financial Statements .....................................................................................................................................................................	101
VI. Stock Administration .......................................................................................................................................................................	112
VII. Reference Information for Filing Company ...................................................................................................................................	113
1.	Information on Parent Company of Filing Company ....................................................................................................................	113
2.	Other Reference Information ........................................................................................................................................................	113
Part 2 Information on Guarantee Company, Etc. of the Filing Company ..............................................................................................	114
Audit Report

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Cover page

Documents Submitted	Securities Report
Legal Basis	Financial Instruments and Exchange Act, Article 24, Paragraph 1
Submitted to	Director-General, Kanto Local Finance Bureau
Date of Submission	November 25, 2021
Business Year	Period 10 (from September 1, 2020 to August 31, 2021)
Company Name	バリュエンスホールディングス株式会社
English Name	Valuence Holdings Inc.
Representative Name and Title	Shinsuke Sakimoto, Representative Director
Location of Head Office	Shinagawa Season Terrace 28F, 1-2-70 Konan, Minato-ku, Tokyo
Phone Number	[phone]
Administrative Contact Name	Satomi Ogawa, IR/ESG Office Manager
Nearest Place of Contact	Shinagawa Season Terrace 28F, 1-2-70 Konan, Minato-ku, Tokyo
Phone Number	[phone]
Administrative Contact Name	Satomi Ogawa , IR/ESG Office Manager
Place of Public Inspection	Tokyo Stock Exchange, Inc.
	(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo)

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Part 1 Corporate Information

I. Company Overview

1. Key Management Indicators

1. Consolidated Management Indicators

Period		Period 6	Period 7	Period 8	Period 9	Period 10
Closing Year and Month	August 2017	August 2018	August 2019	August 2020	August 2021
Net sales	(Thousands	22,685,086	31,529,271	37,799,272	37,932,651	52,512,592
of yen)
Ordinary profit	(Thousands	1,139,789	1,806,141	2,262,320	622,038	976,968
of yen)
Profit attributable to	(Thousands	570,978	1,242,954	1,458,944	305,650	725,121
owners of the parent	of yen)
Comprehensive income	(Thousands	570,579	1,243,454	1,450,025	306,868	758,553
of yen)
Net assets	(Thousands	3,265,725	5,796,677	6,695,450	6,735,904	7,270,051
of yen)
Total assets	(Thousands	10,092,292	12,258,009	14,111,795	15,378,731	18,727,224
of yen)
Net assets per share	(Yen)	583.71	477.45	526.11	512.88	539.40
Net income per share	(Yen)	102.44	107.09	119.67	23.53	54.87
Diluted net income per	(Yen)	-	97.39	110.78	22.95	54.58
share
Equity ratio	(%)	32.36	47.29	47.45	43.80	38.00
Return on equity	(%)	19.19	27.43	23.36	4.55	10.47
Price to earnings ratio	(multiplier)	-	28.95	13.95	68.18	54.95
Cash flows from operating	(Thousands	(41,761)	449,475	1,697,322	1,582,557	2,007,602
activities	of yen)
Cash flows from investing	(Thousands	(814,367)	(554,564)	(689,373)	(74,061)	(1,256,865)
activities	of yen)
Cash flows from financing	(Thousands	1,072,159	744,549	(584,835)	1,052,513	1,210,207
activities	of yen)
Cash and cash equivalents	(Thousands	2,657,806	3,297,704	3,714,430	6,275,644	8,269,430
closing balance	of yen)
Number of employees		379	421	471	587	873
[Average no. of temporary	(Persons)
[98]	[133]	[137]	[150]	[127]
staff not included above]
Notes:

1. Net sales do not include consumption taxes.
2. Diluted net income per share is not stated for Period 6. This is because while dilutive shares were present, the Company's shares were unlisted, and the average stock price could not be calculated during the period. Since the Company's stock was listed on the Tokyo Stock Exchange Mothers on March 22, 2018, diluted net income per share for Period 7 is calculated based on the assumption that the average stock price during the period is the average stock price from the date of initial listing to the end of the 7th fiscal year.
3. The price-to-earnings ratio for Period 6 is not stated. This is because the Company's shares were not listed at that time.
4. Figures for the number of employees provided in brackets indicate the average number of associates, contract employees, and part-time employees (converted via the number of regular annual working hours per regular employee). They are not included in the figure above.
5. The Company implemented a stock split at a ratio of five shares to one share of common stock on November 25, 2017. Net assets per share, net income per share, and diluted net income per share are calculated based on the assumption that the stock split in question occurred at the beginning of Period 6.
6. The Company implemented a stock split at a ratio of two shares to one share of common stock on September 1, 2019. Net assets per share, net income per share, and diluted net income per share are calculated based on the assumption that the stock split in question occurred at the beginning of Period 7.

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(2) Management Indicators for Filing Company

Period		Period 6	Period 7	Period 8	Period 9	Period 10
Closing Year and Month	August 2017	August 2018	August 2019	August 2020	August 2021
Net sales	(Thousands	21,849,627	29,478,579	35,574,088	20,275,742	3,665,020
of yen)
Ordinary profit	(Thousands	976,208	1,621,322	2,236,960	803,209	519,618
of yen)
Net income (loss)	(Thousands	488,666	1,126,108	1,477,486	527,810	(301,272)
of yen)
Capital stock	(Thousands	255,600	948,582	1,027,507	1,117,032	1,144,576
of yen)
Number of shares issued	(Shares)	1,118,957	6,070,510	6,373,930	13,183,160	13,326,170
Net assets	(Thousands	3,200,139	5,613,745	6,539,979	6,801,373	6,275,695
of yen)
Total assets	(Thousands	9,118,733	11,023,182	13,118,917	7,964,110	8,023,927
of yen)
Net assets per share	(Yen)	571.99	462.38	513.90	517.86	464.02
Dividend per share		88.00	51.50	70.00	25.00	25.00
(Amount of interim	(Yen)
(-)	(-)	(-)	(-)	(-)
dividend per share)
Net income (loss) per share	(Yen)	87.67	97.03	121.19	40.63	(22.80)
Diluted net income per	(Yen)	-	88.23	112.19	39.64	-
share
Equity ratio	(%)	35.09	50.93	49.85	85.40	76.29
Return on equity	(%)	16.56	25.55	24.31	7.91	(4.66)
Price to earnings ratio	(multiplier)	-	31.95	13.78	39.48	-
Payout ratio	(%)	20.15	26.54	28.88	61.54	-
Number of employees		320	342	387	59	88
[Average temporary staff	(Persons)
[92]	[124]	[130]	[13]	[9]
not included in above]
Total shareholder return
(Comparison index:	(%)	-	-	55.00	53.68	100.00
TOPIX, including	(-)	(-)	(89.22)	(97.94)	(121.24)
dividends)
Historical high	(Yen)	-	7,540	8,500	2,825	5,430
(1,720)
Historical low	(Yen)	-	3,570	3,345	957	1,686
(1,625)
Notes:

1. Net sales do not include consumption taxes.
2. Diluted net income per share is not stated for Period 6. This is because while dilutive shares were present, the Company's shares were unlisted, and the average stock price could not be calculated during these periods. Since the Company's stock was listed on the Tokyo Stock Exchange Mothers index on March 22, 2018, diluted net income per share for Period 7 is calculated based on the assumption that the average stock price during the period is the average stock price from the date of initial listing to the end of the 7th fiscal year.
3. The price-to-earnings ratio for Period 6 is not stated. This is because the Company's shares were not listed at that time.
4. Figures for the number of employees provided in brackets indicate the average number of associates, contract employees, and part-time employees (converted via the number of regular annual working hours per regular employee). They are not included in the figure above.
5. Total shareholder return and comparative indicators before Period 7 are not listed because the Company's stock was listed on the Tokyo Stock Exchange Mothers on March 22, 2018.

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