Tekscend Photomask Corp.

<h3 class="smt_head2">3 [Dividend Policy]</h3>The Company views returning profits to shareholders as an important management priority, alongside creating long-term corporate value. Following our listing, the Company will implement dividends by comprehensively considering business performance, financial condition, and dividend payout ratio, while ensuring adequate retained earnings for establishing our management foundation, maintaining growth capacity, and strengthening competitiveness. Our basic policy targets a consolidated dividend payout ratio of approximately 30%.<p class="smt_text2" style="orphans:0;widows:0;text-align:justify;padding-left:9pt;padding-right:0pt;margin-top:0pt;margin-bottom:0pt;text-indent:9pt;font-family:'ＭＳ 明朝';letter-spacing:0pt;line-height:15pt;font-size:9pt;">The Company's Articles of Incorporation provide that dividend distributions of surplus as defined in Article 459, Paragraph 1 of the Companies Act may be determined by Board of Directors resolution, except where otherwise provided by law.<p class="smt_text2" style="orphans:0;widows:0;text-align:justify;padding-left:9pt;padding-right:0pt;margin-top:0pt;margin-bottom:0pt;text-indent:9pt;font-family:'ＭＳ 明朝';letter-spacing:0pt;line-height:15pt;font-size:9pt;">The Articles of Incorporation also provide that the record date for year-end dividends is March 31 each year and the record date for interim dividends is September 30 each year, with provisions allowing dividends to be paid on other specified record dates.<p class="smt_text6" style="orphans:0;widows:0;text-align:justify;padding-left:0pt;padding-right:0pt;margin-top:0pt;margin-bottom:0pt;text-indent:0pt;font-family:'ＭＳ 明朝';letter-spacing:0pt;line-height:15pt;font-size:15pt;"> For the fiscal year ending March 2025, the Company implemented total shareholder returns of 27,000 million yen, comprising a special dividend of 9,000 million yen and share buybacks of 18,000 million yen. This reflects exceptional business performance resulting from the global semiconductor supply shortage that occurred between 2022 and 2023. The Company implemented these returns as an integrated package—dividends, share buybacks, and additional stock option grants to employees—to share these results with all stakeholders including employees. In selecting the return method, the Company prioritized share buybacks, which enhance the value of previously issued stock options, while also implementing dividends to offset shareholder dilution from additional stock option issuance. The Board of Directors deliberated and determined the dividend amount based on combined free cash flow from fiscal years ending March 2023 and March 2024, while ensuring the Company maintains appropriate cash reserves to withstand unforeseen circumstances.<p class="smt_text2" style="orphans:0;widows:0;text-align:justify;padding-left:9pt;padding-right:0pt;margin-top:0pt;margin-bottom:0pt;text-indent:9pt;font-family:'ＭＳ 明朝';letter-spacing:0pt;line-height:15pt;font-size:9pt;">For the fiscal year ending March 2024, the Company resolved at the ordinary general meeting of shareholders held on June 27, 2024, to pay a dividend of 90 yen per share, for a total dividend of 9,000 million yen, in accordance with the above policy.<p class="smt_text6" style="orphans:0;widows:0;text-align:justify;padding-left:0pt;padding-right:0pt;margin-top:0pt;margin-bottom:0pt;text-indent:0pt;font-family:'ＭＳ 明朝';letter-spacing:0pt;line-height:15pt;font-size:15pt;"> Regarding surplus for the fiscal year ending March 2025, the Company prioritizes strengthening its financial foundation through growth investments and enhanced retained earnings. Accordingly, no dividend is currently planned.

We implement our dividend policy by comprehensively considering business performance trends, financial condition, and dividend payout ratio. Our basic policy targets a consolidated dividend payout ratio of approximately 30%. We balance shareholder returns with maintaining sufficient retained earnings to strengthen our management foundation, sustain growth capacity, and enhance competitiveness. We have established a system to pay both interim and year-end dividends.

Fiscal Year	Type	Interim	Year-End	Total	Payout Ratio
FY2026	Forecast(2025/11/12)	0	54.39	54.39	-
FY2025	Actual(2025/11/12)	0	0	0	-

Tekscend Photomask Corp.【JP:429A】Dividends

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