This exchange offer is made for the securities of a foreign company. The offer is subject to disclosure
requirements of a foreign country that are different from those of the United States. Financial statements
included in the document, if any, have been prepared in accordance with foreign accounting standards that
may not be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the federal
securities laws, since the issuer is located in a foreign country, and some or all of its officers and directors
may be residents of a foreign country. You may not be able to sue a foreign company or its officers ordirectors in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a foreigncompany and its affiliates to subject themselves to a U.S. court's judgment.
You should be aware that the issuer may purchase securities otherwise than under the exchange offer, such as
in open market or privately negotiated purchases.
This document has been translated from the Japanese-language original for reference purposes only. While
this English translation is believed to be generally accurate, it is subject to, and qualified by, in its entirety,
the Japanese-language original. Such Japanese-language original shall be the controlling document for all
purposes.

Reference documents for the matters related to Proposal 3 of THE 9TH ANNUAL GENERALMEETING OF SHAREHOLDERS:
Financial documents, etc. of Inageya Co., Ltd.’s final business year (ended March 2023)―1―

Business Report(From April 1, 2022 to March 31, 2023)

1. Matters Related to the Current Situation of the Group(1) Progress and results of the businessIn the consolidated fiscal year, the national economy experienced easing measures against COVID-19,
leading to a gradual return to normal economic and social activities. In such circumstances, rising pricesof raw materials and energy, along with the rapid depreciation of the yen, led to increases in prices forfood and various other goods and services, heightening consumer awareness for lifestyle protection amid
ongoing uncertainties.
In the food supermarket industry, to which the Group belongs, increased handling of food by different
industries such as e-commerce businesses and drugstores, successive food price hikes, and changes in
consumer behavior from dining in to dining out due to the normalization of economic and social activities
have continued to create a challenging sales environment.
Under these conditions, the Group has committed to supporting lifelines and providing safe and secure
food as a useful business in the local community under the spirit of "customers first," contributing to therealization of a prosperous community.
The management performance in the consolidated fiscal year showed decreased operating revenue of
248,546 million yen (a decrease of 1.1% year-on-year (YoY)) and net sales of 237,953 million yen (adecrease of 1.2% YoY). Furthermore, the gross profit margin decreased by 0.1 points to 27.9%, withgross profit from sales amounting to 66,344 million yen (a decrease of 1.7% YoY). On the other hand,
despite efforts to review and reduce all expenses, selling, general, and administrative expenses increased
to 75,037 million yen (an increase of 0.8% YoY) due to the rising costs of utilities as a result of higher
energy prices.
As a result, operating income was 1,899 million yen (a decrease of 46.1% YoY), and ordinary income
was 2,184 million yen (a decrease of 43.7% YoY). Additionally, after recording an impairment loss of
1,474 million yen and considering the recoverability of deferred tax assets based on the current and futurefinancial performance, due to the reversal of deferred tax assets, etc., an adjustment of 1,267 million yen
for income taxes-deferred was recorded, resulting in a net loss attributable to owners of parent of 1,156
million yen (compared to a net income of 2,399 million yen in the previous term).

―2―

The situation by segment within the Group is as follows.
Supermarket Business・Sales Composition Ratio：81.3%
・Sales：193,470 million yen (down 1.9% YoY)
Sales (millions of yen)
Year ended March 31, 2022 (74th Term)：197,222
Year ended March 31, 2023 (75th Term)：193,470
・Operating Profit：831 million yen (down 62.1% YoY)
Operating Profit (millions of yen)
Year ended March 31, 2022 (74th Term)：2,192
Year ended March 31, 2023 (75th Term)：831
The Company has set management goals of "freshness, affordability, and heartfelt service," aiming to
make customers feel that the food is "joyful," "delicious," and "fresh," and has continued to develop
valuable products and offer them at competitive prices.
In terms of net sales, although there was a generally upward trend after the year-end sales shopping
season, the increase in dining out and leisure activities in the first half of the fiscal year, along with pricehikes due to the yen depreciation and high resource costs leading to fewer items purchased, resulted in adecrease.
Regarding profits, in addition to the decrease in sales, the rapid increase in raw material costs worsened
the gross profit margin, and factors such as increased utility costs significantly reduced profits comparedto the previous year.
Under such circumstances, we have focused on enhancing the core elements of the supermarket
strategy, which include "strengthening fresh foods (produce, fresh fish, and meats) and prepared foods"
and "expanding our offerings to families and younger customers" by introducing products and lineupsthat are frequently used. Regarding produce, we increased the ratio of direct-from-producer items andexpanded the development of products focusing on "seasonality and freshness." For fresh fish, we carriedout product development and explored new sources with added value such as "origin, seasonality, andlimited time," and for meat, we collaborated closely with producers to develop products focusing on feed.
For prepared foods, the Group's retail support business, Sun Food Japan Co., Ltd., worked on joint
development focusing on "raw materials, production methods, and flavor," advancing the development―3―

of distinctive products that differentiate from competitors. Additionally, as part of our strategy forfamilies and younger customers, we have enhanced the development and assortment of cut fruits, salmon,and frozen foods.

―4―In response to the lifestyle changes triggered by the pandemic, we launched "Inageya Online
Supermarket" services at Rakuten Nationwide Supermarket, with outlets at five locations: Yamato KozaShibuya Store (Yamato City, Kanagawa Prefecture), Yokohama Higashi Maita Store (Minami Ward,
Yokohama City), Yokohama Nishigaoka Store (Izumi Ward, Yokohama City), Arakawa NishinipporiStore (Arakawa Ward, Tokyo), and Iidabashi Store (Shinjuku Ward, Tokyo). Furthermore, our "Mobile
Supermarket Tokushimaru" service, aimed at serving "the elderly and customers unable to shop in
person," has successfully expanded its area of service, now operating 21 vehicles.
In response to changing payment methods with the diversifying lifestyles of our customers and thelabor shortage due to a decreasing workforce, we have expanded the implementation of semi-self-service
and full-self-service checkout systems.
For capital investment, we have established the new Nerima Nishioizumi Store (Nerima Ward, Tokyo).
Moreover, we continue to revitalize existing stores, having renovated six stores including Oizumi
Gakuen Store (Niiza City, Saitama Prefecture) and Tokorozawa Sayamagaoka Store (Tokorozawa City,
Saitama Prefecture). With these changes, the number of stores at the end of the consolidated fiscal year
is 133.
As a result, net sales of existing stores decreased by 1.6% YoY, with segment-specific net sales(external customers) for the consolidated fiscal year at 193,470 million yen (a decrease of 1.9% YoY),
and segment profit at 831 million yen (a decrease of 62.1% YoY).

―5―

Drugstore Business
Sales Composition Ratio：18.4%
・Sales：43,676 million yen (up 2.4% YoY)
Sales (millions of yen)
Year ended March 31, 2022 (74th Term)：42,638
Year ended March 31, 2023 (75th Term)：43,676
・Operating Profit：758 million yen (down 23.3% YoY)
Operating Profit (millions of yen)
Year ended March 31, 2022 (74th Term)：989
Year ended March 31, 2023 (75th Term)：758
At Welpark Co., Ltd., we have pursued the maximization of net sales and the minimization of expenses
to enhance competitiveness, under the basic policy of "restructuring chain store management forcontinuous growth."
Aiming to improve customer convenience with the expansion of e-commerce and through campaigns
such as the "Grand Founding Festival Point Gift Campaign," we have been working to enhance ourcustomer attraction.
For capital investment, we established three new stores: Nerima Heiwadai Store (Nerima Ward,
Tokyo), Setagaya Kamisoshigaya Store (Setagaya Ward, Tokyo), and Kawagoe Higashiguchi Store(Kawagoe City, Saitama Prefecture). Moreover, to revitalize existing stores, we carried out renovations
at 26 stores including Musashimurayama Store (Musashimurayama City, Tokyo). However, with theclosure of one store, the number of stores at the end of the consolidated fiscal year is 143.
As a result, net sales of existing stores increased by 0.1% YoY, with segment-specific net sales(external customers) for the consolidated fiscal year at 43,676 million yen (an increase of 2.4% YoY),
and segment profit at 758 million yen (a decrease of 23.3% YoY).

―6―

Retail Support Business
Sales Composition Ratio：0.3%
・Sales：806 million yen (down 20.6% YoY)
Sales (millions of yen)
Year ended March 31, 2022 (74th Term)：1,016
Year ended March 31, 2023 (75th Term)：806
・Operating Profit：289 million yen (down 18.2% YoY)
Operating Profit (millions of yen)
Year ended March 31, 2022 (74th Term)：354
Year ended March 31, 2023 (75th Term)：289
Sun Food Japan Co., Ltd., which engages in daily food wholesaling and prepared meals manufacturing,is committed to providing safe, secure, and delicious value-added products and customer-oriented
services. In the prepared meals manufacturing business, Sun Food Japan Co., Ltd. has focused on thedevelopment of unique products in collaboration with Inageya Co., Ltd., and on strengthening thebusiness within the Group through in-house production.
SAVIA Corporation, which deals with building planning, design, security, and cleaning of commercial
facilities, is working to enhance corporate value of the Inageya Group as a helpful business in thecommunity by proposing ideas from the planning stage of stores, and is engaged in cost reduction andrisk reduction in development and management. Furthermore, these Group businesses have been offeringvarious safe, secure, and comfortable functions and services to the general public.
Inageya Wing Co., Ltd., a special subsidiary aimed at promoting employment for disabled individuals,
is working on employee development, support for their independence, and strengthening support for
employing disabled individuals across the Group companies. Additionally, it plays a role in enhancing
understanding towards disabled individuals throughout the Group companies by conducting activities tosupport the establishment of disabled individuals in the workplace.
Inageya Dream Farm Co., Ltd., which engages in agricultural management including open-field andhydroponic farming, is committed to creating health and smiles with "safe," "secure," and "delicious"
products, focusing on quality improvement and promoting local production for local consumption.
Furthermore, it also serves as a learning site for agricultural training for the produce managers at InageyaCo., Ltd., playing a role in personnel development within the Group.
As a result, segment-specific net sales (external customers) for the consolidated fiscal year amounted―7―

to 806 million yen (a decrease of 20.6% YoY), and segment profit was 289 million yen (a decrease of
18.2% YoY).

―8―

The environmental and community contribution activities of the Group are as follows.
Inageya Group, as a helpful business providing safe and secure food to local customers for their daily
lives, has formulated a "Sustainability Policy" based on our Group Credo, Core Philosophy, and Group
Vision, and is committed to promoting sustainable management.
In our environmental activities, towards achieving a circular society, we have reduced plastic use intargeted items by half by replacing free plastic straws and spoons provided in stores with environmentallyconscious materials such as paper or plant-derived bioplastic, following initiatives like "food waste
reduction," "food recycling," and "bottle-to-bottle recycling" in compliance with the "Plastic Resource
Recycling Promotion Act" implemented in April 2022. Additionally, in preparation for a future energy
shift, we have newly installed solar power generation using renewable energy at four stores and willcontinue to expand this installation.
Our community contribution activities include promoting employment for disabled individuals(Inageya Wing Co., Ltd.), promoting local production for local consumption (Inageya Dream Farm Co.,
Ltd.), addressing the needs of customers who find it difficult to shop at physical stores (Mobile
Supermarket Tokushimaru), and conducting fundraising activities in stores such as guide dog training
support, and humanitarian aid campaigns like the "Ukraine Emergency Support Fund" and the "TurkeySyria Earthquake Relief Fund."Furthermore, the Group's health management efforts based on our "Health Management Declaration"
have been evaluated, and this fiscal year we were again selected under the 2023 certified "Health &Productivity Management Outstanding Organizations Recognition Program" by a joint certification
system of the Ministry of Economy, Trade and Industry and the Nippon Kenko Kaigi.
We will continue to value our connections with the community and contribute to the realization of ahealthy society.

―9―(2) Capital investment status
The total amount of capital investment expenditures during the consolidated fiscal year wasapproximately 3,800 million yen, with the main items as follows:(i) Major facilities completed during the consolidated fiscal year
Segment nameSupermarket
business

Drugstore businessStore and other facility names

Sales area(m2)

Location

Opening date

Nerima Nishioizumi Store

Nerima Ward, Tokyo

February 15, 2023

1,488

Nerima Heiwadai Store

Nerima Ward, Tokyo

June 8, 2022

409

October 12, 2022

380

February 9, 2023

485

Setagaya Kamisoshigaya Store
Kawagoe Higashiguchi Store

Setagaya Ward,Tokyo
Kawagoe City,
Saitama Prefecture(ii) Continued major facility development and expansion during the consolidated fiscal year
Segment nameStore and other facility names

Supermarket
business

NerimaStore*

Drugstore business7 stores

Nakamura

Minami

Location
Nerima Ward, Tokyo
Tokyo and others

Scheduled opening
Second half of fiscal
year 2023
Second half of fiscal
year 2023

Sales area
(m2)
1,400
-

*This is a new store established through a scrap-and-build process.

(3) Fundraising situation
The Group, taking into account the surrounding environment and financial conditions, has been
conducting funding that is considered most advantageous and optimal at each point in time.
There were no capital increases, etc. during the consolidated fiscal year.
(4) Issues to be addressed
Management policies, etc.
The management policies of the Group, its ultimate goals, and its purpose are defined as the "Group
Credo," "Group Core Philosophy," and "Group Vision," and we practice business with a commitment
to putting customers first.
(i) Group Credo (Management Policy)
Inageya Group's Credo is to serve society through sales, aligning company development with thehappiness of its employees.
―10―(ii) Group Core Philosophy (Ultimate Goal)
Achieving Sukoyakeku
Realizing a healthy and wealthy, warm daily life for our customers, and contributing to ahealthier society.
Practice of the merchant's way
A group of individuals who can feel the joy of their customers as their own.
(iii) Group Vision (Purpose)
To contribute to society as a "helpful business in the community."
Inageya Group sustainability policy
Proud of the patronage from customers since its establishment in 1900, the Group, based on its Credo,
Core Philosophy, and Vision, strives to promote sustainable management. We will continue to seek
customer and employee satisfaction, serving as a perpetual company that is useful to the local
community and contributes to a healthier and more sustainable society.

Materiality(Significant issues)Commitment"We will continue to grow"(i) Creation of businessWe will continue to create new competitive strengths, offering secure, safe,

competitivenessand high-quality products and services to our local customers, and pursue
customer satisfaction.

Growth strategy"We will be helpful to the community"(ii) Mutual prosperity with the local
community

As a helpful business in the community, we will contribute to solving local
community issues through our business activities, developing together withthe local community.
"We will unite our strengths"(iii) Promotion of partnerships

By enhancing the overall strength of the Group and promoting
collaboration with our business partners, we will work together to solve
problems.

―11―

(iv)

Development

of

human

"We value people"

resources that will contribute to

Respecting the individuality and values of each person, we will create an

the growth of the Group and theenvironment where diverse talents can thrive to their fullest potential,

futurethereby pursuing employee satisfaction.

ESG strategy"We will protect the planet's environment"(v)

Sustainablereductionofenvironmental impact

We will continue to address climate change and the efficient use ofresources through our business activities, striving for the conservation of
the global environment so that people can continue to live in peace.
"We will establish safety and security"(vi) Building a robust governancestructure

We will comply with laws and ordinances and social norms, conduct fair
and transparent business activities, and build a governance structure aimed
at strengthening risk management.

Inageya Group key strategies
Supermarket business[Growth Strategy] (For the next developments and convenience)
1. Creation of business competitiveness- Strengthening existing businesses(Creating attractive shopping environments, improving the efficiency of store operations andlogistics, enhancing customer service levels, etc.)- Expansion and challenges in new businesses- Strengthening information systems and utilizing digital technology
2. Coexistence with the local community- Solving local community issues(Addressing issues like the weakening of community ties and shopping refugees)- Promoting the health of customers
3. Formation of partnerships- Strengthening the overall power of the Group- Promoting external collaboration―12―

[ESG Strategy] (Toward sustainable growth)
4. Development of human resources that will contribute to the growth of the Group and the future- Developing next-generation and specialized talents- Enabling the active participation of diverse talents- Creating a comfortable work environment- Promoting employee health
5. Sustainable reduction of environmental impact- Reducing food waste and other waste- Promoting resource saving- Addressing climate change
6. Building a robust governance structure- Strengthening compliance- Ensuring thorough information security- Enhancing disaster risk response- Promoting dialogue with stakeholders
Drugstore business
1. Expansion of new store openings and construction of a type-based format strategy- Improving growth potential through market share expansion
2. Construction of a revenue scheme that pursues efficiency and utilizes Group synergies- Expanding revenue capabilities through efficiency improvements
3. Establishment of a life support drugstore- Promoting differentiation from competitors by enhancing human skills―13―

(5) Transition of property and profit and loss status[Consolidated]
Category
Operating revenue
Net sales
Operating income
Ordinary income(millions ofyen)(millions ofyen)(millions ofyen)(millions ofyen)

Net income attributable toowners of parent for the(millions ofcurrent term or net loss
yen)
attributable to owners ofparent for the current term
Earnings per share for thecurrent term or(yen)loss per share for thecurrent term
(millions of
Net assets
yen)(millions of
Total assets
yen)
Net assets per share(yen)

Fiscal year ended
March 31, 2020
72nd Term

Fiscal year ended
March 31, 2021
73rd Term

Fiscal year ended
March 31, 2022
74th Term

Fiscal year ended
March 31, 2023
75th Term(Current term)

255,443

265,917

251,417

248,546

245,445

255,637

240,877

237,953

2,329

6,982

3,525

1,899

2,622

7,290

3,880

2,184

685

4,124

2,399

(1,156)

14.79

88.98

51.77

(24.96)

51,76355,53356,88655,92996,46999,064

98,69898,4001,095.07

1,174.24

1,202.24

1,180.73

Fiscal year ended
March 31, 2020
72nd Term

Fiscal year ended
March 31, 2021
73rd Term

Fiscal year ended
March 31, 2022
74th Term

Fiscal year ended
March 31, 2023
75th Term(Current term)

202,883

213,918

205,064

203,841

192,986

203,739

194,617

193,472

1,015

5,272

2,142

831

1,304

5,561

2,436

1,259

[Non-consolidated]
Category
Operating revenue
Net sales
Operating income
Ordinary income(millions ofyen)(millions ofyen)(millions ofyen)(millions of
yen)

―14―

Net income for the current(millions ofterm or net loss for theyen)current term
Earnings per share for thecurrent term or(yen)
net loss per share for thecurrent term
(millions of
Net assets
yen)(millions of
Total assets
yen)
Net assets per share
(yen)

(62)

3,023

1,919

(1,465)(1.35)

65.22

41.42

(31.62)40,43842,70943,72842,81880,46981,541

82,35182,453872.41

921.24943.59923.85―15―

(6) Main business activities
The Group consists of the Company and five consolidated subsidiaries, operating in the retail sector
primarily through supermarkets and drugstores, as well as retail support businesses.
(7) Status of significant subsidiaries (as of March 31, 2023)
Business division

Retailbusiness

Drugstore
business
Food wholesaling&
prepared food
manufacturing

Retailsupportbusiness

Facility
management
Specialsubsidiary(Employment fordisabled persons)
Agricultural
management

Company nameWelpark Co., Ltd.

Sun Food Japan Co., Ltd.

SAVIA Corporation

Inageya Wing Co., Ltd.
Inageya Dream
Co., Ltd.

Farm

Capital(millions of
yen)

The
Company's
investment
percentage
(%)

950

84.2

100

100.0

300

100.0

10

100.0

Contracted store support
services

95

100.0

Cultivation and productionof agricultural products

Note: The consolidated subsidiaries consist of the above-mentioned five companies.

―16―

Main business activities
Sales of pharmaceuticals,
cosmetics, daily
necessities, food, etc.
Procurement and sales ofdaily food products,
procurement and sales ofmarine processed products,
manufacturing of preparedfood products
Planning, designing,
maintenance, repair,security, and cleaning ofstores(8) Major offices and plants (as of March 31, 2023)
Company nameCategory

Main office/business site name & location

Head Office

1-1 Sakaecho 6-chome, Tachikawa City, Tokyo

Logistics Center

The
Company

Inageya Co., Ltd.
Operatingstores(133 stores)Tokyo(72 stores)
SaitamaPrefecture(29 stores)
Kanagawa
Prefecture(26 stores)
Chiba
Prefecture(6 stores)

Head OfficeSubsidiary

Tachikawa Produce and Fresh Center (Tachikawa
City, Tokyo)
Musashimurayama Center (Musashimurayama
City, Tokyo)
Chofu Sengawa Store, Hanakoganei Ekimae Store,
Nerima Kami-Shakujii Minami Store
Matsubushi
Store,
Oizumigakuen
Tokorozawa Sayamagaoka StoreStore,

Yokohama Hoshikawa Ekimae Store, Atsugi Mita
Store, Kawasaki Kyomachi Store
Kimitsu Store, Noda Mizuki Store, Otaki Store
1-1 Sakaecho 6-chome, Tachikawa City, Tokyo

Welpark Co., Ltd.

OperatingstoresSun Food Japan Co.,Ltd.

Head Office

Ikegami Store, Nishi Tachikawa Store,
Musashimurayama Store
Tachihi Building 204, 1st Floor, 935-27 Izumicho,
Tachikawa City, Tokyo

Head Office

1-1 Sakaecho 6-chome, Tachikawa City, Tokyo

Head Office

1-1 Sakaecho 6-chome, Tachikawa City, Tokyo

Head Office

1-1 Sakaecho 6-chome, Tachikawa City, Tokyo

SAVIA Corporation
Inageya Wing Co.,Ltd.
Inageya Dream FarmCo., Ltd.

(143 stores)―17―

(9) Status of employees (as of March 31, 2023)
Category

Number of employees(count)Compared to the end of theprevious consolidated fiscal
year(count)

The Group

2,677 (6,298)(43) ((374))--

The Company

2,066 (5,385)(29) ((158))

46.0

21.0

Notes: 1.
2.
3.

Average age(years)Average length ofservice(years)The numbers in parentheses represent the annual average employment of part-timers (calculated as full-time
equivalent for 8 hours per day).
Part-time employees do not include temporary staff.
The employee count excludes seconded personnel from the Group to outside the Group but includes personnel
seconded from outside to the Group.

(10) Main lenders and borrowing amounts (as of March 31, 2023)
LenderBorrowing amount (millions of yen)

Resona Bank, Ltd.

3,214

MUFG Bank, Ltd.

2,080

Nippon Life Insurance Company

740

Aioi Nissay Dowa Insurance Co., Ltd.

682

Mizuho Bank, Ltd.

652

Sumitomo Mitsui Banking Corporation

627

Sumitomo Mitsui Trust Bank, Ltd.

155

The Norinchukin Bank

105

Meiji Yasuda Life Insurance Company

100

Development Bank of Japan Inc.

90

Note: The loan balances from Resona Bank, MUFG Bank, and Mizuho Bank include the outstanding amount of corporate
bonds (private placement bonds) (2,736 million yen).

―18―

(11) Other significant matters concerning the current status of the corporate GroupThe Company, AEON CO., LTD. (hereafter referred to as "AEON"), and United Super Markets
Holdings Inc. (hereafter referred to as "U.S.M.H."), have signed a basic agreement (hereinafter referred
to as "this Agreement") on April 25, 2023 for the Company's participation in the AEON Group as aconsolidated subsidiary of AEON and for the management integration with U.S.M.H. This Agreement
does not have legal binding power concerning the execution of the management integration, and it isplanned that following further discussions among the Company, AEON, and U.S.M.H., a resolution of
the Board of Directors and other necessary procedures, a legally binding formal contract will be signed.
Purpose of this Agreement
The Company, AEON, and U.S.M.H. have agreed to sign this Agreement because, in theincreasingly competitive Greater Tokyo Area, we believe it is optimal to deepen the relationships
among our companies and advance the "1 trillion yen SM concept in the Kanto region" to continue
meeting customer needs with agility, coexist with the local community, and grow together, building
a sustainable future for the region.
Through strengthening capital relations and management integration, we aim to fully utilize various
assets of the AEON Group, such as digital, products, personnel, and payment infrastructure, advancethe evolution into a new business model leveraging economies of scale as a 1 trillion yen SM Group,and strive to maximize corporate value.
For detailed content, please refer to the consolidated notes (Notes on Significant Subsequent Events)
in the consolidated financial statements.

―19―

2. Matters related to shares (as of March 31, 2023)(1) Total number of authorized shares
200,000,000shares(2) Total number of outstanding shares

52,381,447shares(including treasury shares: 5,946,795 shares)(3) Number of shareholders

11,162ind(4) Top 10 shareholders
Number of shares(thousands)
7,899

Shareholder names
AEON CO., LTD.

Shareholding ratio (%)
17.01

Wakagikai Shareholding Association

4,372

9.42

The Master Trust Bank of Japan, Ltd. (Trust Account)

2,290

4.93

Resona Bank, Ltd.

1,934

4.17

Custody Bank of Japan, Ltd. (Trust Account)

1,768

3.81

Mitsubishi Shokuhin Co., Ltd.

1,061

2.29

Nippon Life Insurance Company

893

1.92

Tokyo Tama Seika Co., Ltd.

857

1.85

Kokubu Group Corp.

824

1.78

MUFG Bank, Ltd.

763

1.64

Notes: 1. The Company holds 5,946,000 treasury shares, which are not included in the above major shareholders.
2. The shareholding ratio is calculated excluding 5,946,000 treasury shares.
3. Shares held as trust assets for executive and employee stock benefit trusts, totaling 87,000 shares, are not includedin the above treasury shares.

[Stock Ownership Ratio by Owner Type]・Financial Institutions 19.69% ・Securities Companies 0.55% ・Domestic Corporations 39.64%
・Foreign Corporations, etc. 2.49% ・Individuals and Others 26.28% ・Treasury Stock 11.35%―20―

3. Matters concerning company executives(1) Status of directors and corporate auditors (as of March 31, 2023)
Name
Yoshikazu Motosugi

Kazushige Hamura

Shintaro Kakui
Makoto Sugaya

Mikio Uehara

Position and responsibilities
President
andRepresentative
Director
Managing Director
Responsible for compliance, humanresources, general affairs, finance,
store development, and information
systems
Director
Responsible for product andlogistics strategy
Director
Responsible for store reform andoverseeing sales department
Director
Responsible for Group management
strategy, sales strategy, quality
control, and IR

Shinya Watanabe

Outside Director

Shuichi Otani

Outside Director

Yoshitomo Suzuki

Outside Director

Yaeko Ishida

Outside Director
OutsidePresident and Representative Director of AEON
GLOBAL MERCHANDISING Co., LTD.
Responsible for product procurement at AEON CO.,LTD.
Chairman and Representative Director of Cordon VertCo., Ltd.
Partner at Midorikawa Kitadai Law OfficeOutside Corporate Auditor at Citizen Watch Co., Ltd.

Masakazu Yamamoto

Full-time
Auditor

Kenichiro Takayanagi

Full-time Corporate Auditor

Masami Shinozaki

Significant concurrent positions

Corporate

Director of Shinozakisogo Law Offices
Outside Corporate Auditor at MarkLines Co., Ltd.
Outside Corporate Auditor at Maezawa Kasei Industries
Co., Ltd.

Outside Corporate Auditor―21―

Koji Makino

Representative Director of BE1 Comprehensive
Accounting Firm
Outside Director at Digital Garage, Inc.
(Audit and Supervisory Board Member)
Outside Director at Obara Group Inc.

Outside Corporate Auditor

Notes: 1.

Outside directors Shinya Watanabe, Shuichi Otani, and Yaeko Ishida have been notified to the Tokyo Stock
Exchange as independent executives without any conflict of interest with general shareholders.
2. Full-time outside corporate auditor Masakazu Yamamoto and outside corporate auditors Masami Shinozaki andKoji Makino have been notified to the Tokyo Stock Exchange as independent executives without any conflict ofinterest with general shareholders.
3. Full-time outside corporate auditor Masakazu Yamamoto and outside corporate auditors Masami Shinozaki andKoji Makino possess considerable knowledge in finance and accounting as follows:- Masakazu Yamamoto has years of experience in financial operations in financial institutions and operatingcompanies.
- Masami Shinozaki is a licensed tax accountant.
- Koji Makino is a certified public accountant and tax accountant.
4. In case the number of corporate auditors falls below the statutory requirement, Wataru Higuchi was appointed asa substitute outside corporate auditor at the 72nd Regular General Meeting of Shareholders held on June 25, 2020.
5. Changes in positions and responsibilities of directors during this business year are as follows:
Name

Position after change

Position before change

Date of change

Kazushige Hamura

Managing Director
Head of Administration andComplianceManaging Director
Head of Administration andCompliance and Director of
Inageya Group Life Service
CenterApril 4, 2022

Shintaro Kakui

Director
Head of Product and Logistics
Strategy

Director
Head of Product Strategy

Kazushige Hamura

Managing Director
Responsible for compliance,
human resources, general affairs,
finance, store development, andinformation systems

Managing Director
Head of Administration andCompliance―22―

April 4, 2022

October 1, 2022

Name

Position after change

Position before change

Date of change

Shintaro Kakui

Director
Responsible for product andlogistics strategy

Director
Head of Product and Logistics
Strategy

October 1, 2022

Makoto Sugaya

Director
Responsible for store reform andoverseeing sales department

Director
Sales Strategy Department Head

October 1, 2022

Mikio Uehara

Director
Responsible for Groupmanagement strategy, sales
strategy, quality control, and IR

Director
Head of Group Management
Strategy Department,
concurrently in charge ofInvestor Relations and Quality
Control Department―23―

October 1, 2022

(2) Summary of the liability limitation agreement
The Company, each outside director, and each corporate auditor have entered into an agreement that
limits their liability for damages under Article 423, Paragraph 1 of the Companies Act, based on theprovisions of Article 427, Paragraph 1 of the same Act and the Articles of Incorporation.
The maximum amount of liability for damages under this agreement is set at the minimum liability
amount prescribed by Article 425, Paragraph 1 of the same Act.
(3) Summary of the directors and officers liability insurance contract
The Company has entered into a directors and officers liability insurance contract as stipulated in
Article 430-3, Paragraph 1 of the Companies Act with an insurance company, covering directors,
corporate auditors, and executive officers of the Company and its subsidiaries, and it is renewed
annually.
As a result, damages incurred by the insurer due to the execution of their duties, except for thoseexempted under the terms of the insurance contract, are covered by this insurance contract.
The insurance premium is shared by the Company and its subsidiaries.
(4) Compensation of directors and corporate auditors for this business year(i) Summary of policy on determining the amount of compensation for executives
The Company's Board of Directors has established a policy for determining the compensationof executives (hereafter referred to as the "Determination Policy"). Before making a resolution at
the Board of Directors, the content to be resolved is consulted with the Nomination andCompensation Committee, which is composed of a majority of independent outside directors, andtheir response is obtained.
Furthermore, the Board of Directors ensures that the content and method of determining theindividual compensation of directors for this business year are consistent with the Determination
Policy, and that the recommendations of the Nomination and Compensation Committee arerespected, judging it to be in accordance with the Determination Policy.
A. Basic policy
I. To aim for profitable growth and appropriate return of profits to shareholders throughsound business activities, compensation is linked to financial results and long-term corporate
value, sharing value with shareholders.
―24―II. Compensation will be provided while maintaining transparency in management to fulfill
accountability.

―25―

B. Compensation system
Director compensation consists of a "basic compensation" which is fixed, and "short-term
performance-linked compensation" and "medium to long-term performance-linked
compensation (performance-linked stock compensation)" which vary based on financial
results. For outside directors and corporate auditors, considering their roles and independence,
only basic compensation is provided.
I. Basic compensation
The compensation is determined monthly in monetary form as a fixed compensation,
taking into account the economic situation and general societal levels, and is commensuratewith the role and responsibility.
II. Short-term performance-linked compensation
Excluding outside directors, this compensation for directors is calculated by multiplying a
coefficient based on the performance of the fiscal year to the basic compensation, consistingof a portion paid monthly and a lump-sum payment. The devided payment part is calculated
by applying a coefficient (ranging from 0% to 70%) to the basic compensation amountbased on the target achievement rate of the previous year's consolidated operating income.
On the other hand, the lump-sum payment part is contingent on the consolidated operating
income, consolidated ordinary income, and consolidated net income exceeding the previous
fiscal year's actual results, with a coefficient (ranging from 25% to 400%) applied to thebasic monthly compensation based on the amount exceeding the consolidated operating
income target.
III. Medium to long-term performance-linked compensation
Excluding outside directors, this compensation for directors is granted in the form ofbeneficiary rights through a trust (share payment trust) that involves shares and monetarycompensation, payable in lump sum upon retirement. Points are awarded based on the
director's position and the degree of achievement of financial results targets. Directors whomeet the requirements for retirement or equivalent will receive company shares andmonetary compensation. Moreover, stock compensation varies from 0% to 200%, dependingon the annual achievement of consolidated net sales targets for each fiscal year set by theGroup and its subsidiaries in the medium-term business plan from a Group management
perspective, and sustainability evaluations such as the reduction of consolidated inventory―26―

loss rates.
A system is in place that allows for the forfeiture of scheduled share beneficiary rights incase of significant misconduct or violations by the concerned directors.
IV. Compensation composition ratio
The ratio of each compensation type varies according to the degree of achievement of
performance targets, but when targets are met, the ratios of basic compensation, short-term
performance-linked compensation, and medium to long-term performance-linked
compensation are designed to be approximately 5:4:1. Additionally, for outside directors andcorporate auditors, considering their roles and independence, only basic compensation isprovided.
(ii) Matters concerning the resolution on the compensation of directors and corporate auditors at theGeneral Meeting of Shareholders
The amount of monetary compensation for directors was resolved at the 43rd Regular General
Meeting of Shareholders held on June 27, 1991, to be within 350 million yen per year (excluding
the employee salary portion of directors who are also employees). The number of directors at theconclusion of that Regular General Meeting of Shareholders was 14.
Additionally, separate from this monetary compensation, a stock compensation system wasadopted following a resolution at the 70th Regular General Meeting of Shareholders held on June21, 2018 and partially revised at the 73rd Regular General Meeting of Shareholders on June 24,
2021. Under this system, based on the stock grant regulations, a maximum of 198 million yen forthree business years (of which 60 million yen is allocated for the Company's directors) has been
contributed to the trust. Under this system, for each of the three business years, a maximum of
90,000 points (27,000 points for the Company's directors) are allocated for stock distribution basedon the position and the degree of achievement of performance targets during each period (outside
directors are excluded from this grant). As of the conclusion of that Regular General Meeting of
Shareholders, the number of the Company's directors eligible under this system was five.
The amount of monetary compensation for corporate auditors was resolved to be within 60
million yen per year at the 47th Regular General Meeting of Shareholders held on June 29, 1995.
At the conclusion of that Regular General Meeting of Shareholders, the number of corporate
auditors was four.
―27―

(iii) Total amount of compensation for directors and corporate auditors
Total amount of compensation by type (millions of yen)

Executiveclassification

Directors(excluding
outside directors)
Corporate
auditors(excluding
outside corporate
auditors)

Total amount ofcompensation(millions of yen)

Medium to long- Eligible number of
executives
Short-term
term performanceBasic compensation performance-linked linked compensation(count)compensation(stockcompensation)

55

36

17

2

5

14

14

-

-

1

Outside directors

21

21

-

-

4

Outside corporate
auditors

25

25

-

-

3

Notes: 1. The compensation of 32 million yen in the employee salary, etc. for directors who are also employees is not includedin the above figures.
2. As of the end date of this business year, the number of executives is nine directors (including four outside directors)
and four corporate auditors (including three outside corporate auditors).
3. The conditions for calculating the short-term performance-linked compensation are as outlined in the "(i) Summaryof policy on determining the amount of compensation for executives." Additionally, the performance indicatorused as the basis for calculation, specifically for the portion of the devided payment, is based on the achievement
rate of the consolidated operating income target for the previous business year. Since the performance achieved
was 88.1%, a payment of 17 million yen was made. For the lump sum payment portion, no payments were madeas the prerequisite conditions were not met.
4. The content and calculation conditions for the medium to long-term performance-linked compensation (stockcompensation) are as outlined in the "(i) Summary of policy on determining the amount of compensation for
executives." The basis for calculation is based on performance indicators, which consist of the degree ofachievement for each fiscal year relative to the target consolidated net sales set under the medium-term businessplan, and the sustainability evaluation, specifically the reduction in consolidated inventory loss rates. Regarding
the achievement of the consolidated net sales target for each fiscal year, an allowance of 2 million yen wasrecorded because the performance was 98.3%. As for the reduction in the consolidated inventory loss rate, noamount was recorded because the performance did not meet the requirements.

(5) Matters concerning outside executives―28―

(i) Significant concurrent positions of outside executives and their relationship with the Company- Director Yoshitomo Suzuki also holds a procurement position at AEON CO., LTD., which is amajor shareholder and business partner of the Company.
- There are no special relationships between other outside executives' concurrent positions and theCompany.

―29―

(ii) Main activities of outside executives during this business year
Category

Name

Attendance and participation in discussions

Director

Shinya Watanabe

Attended 17 of the 18 Board of Directors meetings held during the business year,
primarily contributing through his extensive managerial experience and insight.

Director

Shuichi Otani

Attended 17 of the 18 Board of Directors meetings held during the business year,
primarily contributing through his extensive managerial experience and insight.

Director

Yoshitomo Suzuki

Attended 17 of the 18 Board of Directors meetings held during the business year,
primarily contributing through his extensive managerial experience and insight.

Director

Yaeko Ishida

Attended 17 of the 18 Board of Directors meetings held during the business year,
primarily contributing through her professional legal expertise and high level of
insight.

Full-time
Corporate
Auditor

Attended all 18 Board of Directors and 16 Audit and Supervisory Board meetings
Masakazu Yamamoto held during the business year, primarily contributing from an objective standpoint
based on his extensive experience in finance and high level of insight.

Corporate
AuditorMasami Shinozaki

Corporate
AuditorKoji Makino

Attended all 18 Board of Directors and 16 Audit and Supervisory Board meetings
held during the business year, primarily contributing from an objective standpoint
based on his legal and tax professional expertise and high level of insight.
Attended 16 of the 18 Board of Directors and all 16 Audit and Supervisory Board
meetings held during the business year, primarily contributing from an objective
standpoint based on his professional expertise as a certified public accountant and tax
accountant and high level of insight.

(iii) Overview of duties performed by outside directors expected to fulfill their roles
Category

Name

Overview of duties performed by outside directors expected to fulfill their roles

Director

Shinya Watanabe

As mentioned in (ii) above, by actively participating in discussions at the Board of
Directors, he has contributed to enhancing the effectiveness of the Company's Boardof Directors.

Director

Shuichi Otani

As mentioned in (ii) above, by actively participating in discussions at the Board of
Directors, he has contributed to enhancing the effectiveness of the Company's Boardof Directors.

Director

Yoshitomo Suzuki

As mentioned in (ii) above, by actively participating in discussions at the Board of
Directors, he has contributed to enhancing the effectiveness of the Company's Boardof Directors.

Director

Yaeko Ishida

As mentioned in (ii) above, by actively participating in discussions at the Board of
Directors, she has contributed to enhancing the effectiveness of the Company's Boardof Directors.

―30―Consolidated Balance Sheet(As of March 31, 2023)
Account

AmountAccount

Accounts receivable

6,012

Securities

11,149Merchandise and products

10,061Work in process
Raw materials and storage
items

3

Liabilities
Current liabilities
Accounts payable
Electronically recorded
obligations
Bonds to be redeemed within
1 yearLong-term borrowings due
within 1 year
Lease liabilities

208

Accrued corporate tax, etc.

Current assets
Cash and deposits

AssetsOther
Fixed assets
Tangible fixed assets
Buildings and structures
Land
Lease assets
Construction in progress
Other
Intangible fixed assets
Investments and otherassetsInvestment securities
Long-term loans
Deferred tax assets
Assets related to retirement
benefits
Security deposits
Other
Deferred assets
Bond issuance costs

41,6039,885

4,282
56,73632,457
12,305
16,455
908
243
2,543
1,806

Accrued consumption tax,etc.
Reserve for bonuses
Reserve for points
Contract liabilities
Asset retirement obligation
Other
Fixed liabilities
Corporate bonds
Long-term borrowings

22,472(Millions of yen)Amount29,995
16,619
223
523
1,948
370
657
175
1,531
78
2,553
5
5,309
12,4752,212
3,762

Lease liabilities

938

Deferred tax liabilities
Reserve for stock
12
compensation
Reserve for executive stock
2,607
compensation
Liabilities related to
1,073
retirement benefits
9,208
Asset retirement obligation
459
Other
60
Total liabilities
60 Net assets
Shareholders' equity
CapitalCapital surplus
Retained earnings

39

9,109

―31―

22
32
633
3,811
1,020
42,47050,211
8,981
13,59833,898

Total assets

98,400Treasury shares
Accumulated othercomprehensive income
Valuation difference on
securities
Accumulated adjustments for
retirement benefits
Non-controlling interests
Total net assets
Total liabilities and net
assets―32―(6,266)
4,512
4,213
299
1,205
55,92998,400Consolidated Statement of Income(From April 1, 2022 to March 31, 2023)(Millions of yen)Account
Operating revenue

Amount[248,546]
237,953
171,609
66,344
10,59376,937

Net sales
Cost of sales
Gross profit from sales
Operating revenue
Total operating profit
Selling, general and administrative
expenses
Operating income
Non-operating income
Interest income
Dividend income
Fees received
Grant income
Gains on donation of fixed assets
Other
Non-operating expenses
Interest expense
Amortization of bond issuance costs
Other
Ordinary income
Extraordinary loss
Loss on disposal of fixed assets
Impairment loss
Loss due to COVID-19
Net income for the current term before
taxes
Corporate tax, inhabitant tax, andbusiness tax
Income taxes-deferred
Loss per share for the current term
Net income attributable to noncontrolling interests
Net loss attributable to owners of parent

75,037
1,899
26
155
100
50
8
29
61
10
13

22
1,474
0

370

85
2,184

1,497
687

528
1,267

1,796
(1,109)47(1,156)―33―

Balance Sheet(As of March 31, 2023)
Account
Current assets
Cash and deposits

AssetsAmountAccount

32,896
9,297

Accounts receivable

4,586

Securities

11,149Merchandise and products

4,391

Raw materials and storage
items
Prepaid expenses
Short-term loans
Affiliated company shortterm loans
Unreceived income
Deposits to be collected
within 1 year
Other
Allowance for doubtful
accounts
Fixed assets
Tangible fixed assets
Buildings
Structures
Machinery, equipment, andvehiclesTools, equipment, andfixturesLand
Lease assets
Construction in progress
Intangible fixed assets
Leasehold rights
Software
Other
Investments and other assets
Investment securities
Affiliated company shares

170
1,158
2

Liabilities
Current liabilities
Accounts payable
Electronically recorded
obligations
Affiliated company shortterm borrowings
Bonds to be redeemed within
1 yearLong-term borrowings due
within 1 year
Lease liabilities
Accrued payables

90

Accrued expenses

1,809(Millions of yen)Amount28,331
11,164
223
5,576
523
1,908
305
2,821
1,404

36

Accrued corporate tax, etc.
Accrued consumption tax,
etc.
Deposits held

(88)

Reserve for bonuses

1,249

49,49727,547
10,335447

Reserve for points
Contract liabilities
Fixed liabilities
Corporate bonds
Long-term borrowings

64
1,878
11,304
2,212
3,642

291

359

Lease liabilities

Reserve for stock
1,846
compensation
Reserve for executive stock
13,521compensation
Reserve for retirement784
benefits
253
Asset retirement obligation
1,573
Long-term deposits
18
Total liabilities
1,185 Net assets
369
Shareholders' equity
20,376
Capital9,109
Capital surplus
946
Capital reserve

―34―

411
160
638

675
20
19
630
3,098
1,005
39,63538,604
8,981
13,59813,598

Long-term loans
Prepaid pension costs
Deferred tax assets

12
572
1,737

Security deposits

7,673

Other
Deferred assets
Bond issuance costs

Total assets

324
60
60

82,453Retained earnings
Profit reserve
Other retained earnings
Fixed assets
depreciation reserve
Special reserve
Retained earnings
carried forward
Treasury shares
Evaluation and translation
adjustments
Valuation difference on
securities
Total net assets
Total liabilities and net
assets―35―

22,291
1,544
20,747367
17,3003,080(6,266)
4,213
4,213
42,81882,453

Profit and Loss Statement(From April 1, 2022 to March 31, 2023)(Millions of yen)Account
Operating revenue

Amount[203,841]
193,472
140,189
53,282
10,36863,651

Net sales
Cost of sales
Gross profit from sales
Operating revenue
Total operating profit
Selling, general and administrative
expenses
Operating income
Non-operating income
Interest income
Securities interest
Dividend income
Fees received
Other
Non-operating expenses
Interest expense
Amortization of bond issuance costs
Other
Ordinary income
Extraordinary loss
Loss on disposal of fixed assets
Impairment loss

62,819
831
8
10
364
88
37
60
10
10

25
1,149
1
13

Loss due to COVID-19

Other
Net income for the current term before
tax
Corporate tax, inhabitant tax, andbusiness tax
Income taxes-deferred
Loss per share for the current term

510

82
1,259

1,189
70

210
1,325

―36―

1,535
(1,465)

Audit report concerning the consolidated financial statements by the accounts auditor
Audit Report of the Independent Auditor
May 15, 2023
To the Board of Directors of Inageya Co., Ltd.

Gyosei & Co.
Tokyo Office
DesignatedmemberExecutive
memberDesignatedmemberExecutive
memberCertifiedpublicaccountant

Makoto Iwabuchi

Certifiedpublicaccountant

Takao Miki

Auditors' opinion
Our audit corporation, in accordance with Article 444, Paragraph 4 of the Companies Act, has audited the consolidated financial
statements of Inageya Co., Ltd. for the consolidated fiscal year from April 1, 2022, to March 31, 2023, namely the consolidated balance
sheet, consolidated income statement, consolidated statement of changes in shareholders' equity, and consolidated notes.
Our audit corporation acknowledges that the consolidated financial statements mentioned above comply with the standards of corporate
accounting generally recognized as fair and reasonable in Japan. These statements properly represent the financial position and profit andloss of the corporate group consisting of Inageya Co., Ltd. and its consolidated subsidiaries for the relevant period in all material respects.
Basis for auditors' opinion
Our audit corporation has conducted the audit in accordance with the auditing standards generally accepted in Japan. The responsibilityof our audit corporation under the auditing standards is described in the "Auditor's responsibility in auditing the consolidated financial
statements." Our audit corporation has complied with the professional ethics regulations in Japan and is independent of the Company andits consolidated subsidiaries, and has fulfilled other ethical responsibilities as auditors. We believe that we have obtained sufficient andappropriate audit evidence to provide a basis for our opinion.
Other information
Other information comprises the business report and its supplementary schedule. The responsibility of management is to prepare anddisclose this other information. In addition, the responsibility of the corporate auditors and the Audit and Supervisory Board is to monitor
the execution of the directors’ duties in establishing and operating the reporting process on other information.
Our audit opinion on the consolidated financial statements does not cover the other information, and we do not express an opinion on
this other information.
The responsibility of our audit corporation in the audit of the consolidated financial statements includes reading the other information
and, in doing so, considering whether there is a material misstatement between the other information and the consolidated financial
statements or the knowledge obtained in the audit or otherwise, and to remain alert for indications that the other information appears―37―materially misstated.
If we conclude based on the work we have performed that there is a material misstatement of this other information, we are required toreport that fact.
There are no matters relating to the other information that we are required to report.

―38―

Responsibility of the management, corporate auditors, and the Audit and Supervisory Board regarding the consolidated financial statements
The responsibility of management is to prepare and fairly present the consolidated financial statements in accordance with the generally
accepted accounting standards in Japan. This includes establishing and operating internal controls that management deems necessary for
preparing and fairly presenting consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management evaluates whether it is appropriate to prepare the consolidated financial
statements on a going concern basis. If there is a need to disclose matters related to the going concern based on the generally accepted
corporate accounting standards in Japan, it is management’s responsibility to disclose such matters.
The responsibility of the corporate auditors and the Audit and Supervisory Board is to oversee the execution of duties by the directors in
the maintenance and operation of the financial reporting process.
Auditor's responsibility in auditing the consolidated financial statements
The auditor's responsibility is to obtain reasonable assurance that the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to express an opinion on the consolidated financial statements through the audit report froman independent standpoint. Material misstatement could result from fraud or error and is considered material if, individually or in theaggregate, it could reasonably be expected to influence the decisions of users of the consolidated financial statements.
The auditor, in accordance with the auditing standards generally accepted in Japan, performs the audit with professional judgment andmaintains professional skepticism throughout the audit process for the following:- The auditor identifies and evaluates the risk of material misstatement due to fraud or error, known as false labeling risk. The auditor designs
and implements audit procedures that are appropriate in response to the identified material false labeling risks. The selection andapplication of audit procedures is at the auditor's discretion. The auditor also obtains sufficient and appropriate audit evidence that will
form the basis for the expression of an opinion.

- The purpose of the audit of the consolidated financial statements is not to express an opinion on the effectiveness of theentity's internal controls, but auditors consider the internal controls relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances when conducting a risk assessment.
- The auditor evaluates the appropriateness of accounting policies adopted by management and the method of applying them,as well as the rationality of accounting estimates made by management and the related notes.
- The auditor assesses whether it is appropriate for management to prepare the consolidated financial statements using the going concern
basis and, based on the audit evidence obtained, whether there is any material uncertainty regarding events or conditions that may raise
substantial doubt about the going concern assumption. When material uncertainties related to the going concern assumption are identified,the auditor is required to either draw attention in the audit report to the notes on such uncertainties in the consolidated financial statements
or, if the notes concerning the material uncertainties are not appropriate, to express an opinion with exceptions regarding the consolidated
financial statements. The auditor's conclusion is based on the audit evidence obtained up to the date of the audit report, but future events
or conditions may cause the entity to cease to continue as a going concern.
- The auditor evaluates whether the presentation and notes of the consolidated financial statements comply with the generally accepted
corporate accounting standards in Japan. This includes assessing the presentation, structure, and content of the consolidated financial
statements, including the related notes, and determining whether the consolidated financial statements appropriately represent theunderlying transactions and accounting events.
- In order to express an opinion on the consolidated financial statements, the auditor obtains sufficient and appropriate audit evidence about
the financial information of the Company and its consolidated subsidiaries. The auditor has responsibility for directing, supervising, andperforming the audit of the consolidated financial statements. The auditor alone is responsible for the audit opinion expressed.
The auditor reports to the corporate auditors and the Audit and Supervisory Board about the planned scope and timing of the audit,
significant findings from the audit including significant deficiencies in internal control identified during the audit, and other mattersrequired by audit standards.
The auditor reports to the corporate auditors and the Audit and Supervisory Board on compliance with the professional ethics
regulations regarding independence in Japan, and any matters that could reasonably be thought to affect the auditor's independence,
including the safeguards put in place to eliminate or mitigate such threats.

―39―

Conflicts of Interest
There are no conflicts of interest between the Company and its consolidated subsidiaries and the audit corporation or its executive
members that need to be disclosed under the Certified Public Accountants Act.

―40―

Audit report of the accounts auditor
Audit Report of the Independent Auditor
May 15, 2023
To the Board of Directors of Inageya Co., Ltd.

Gyosei & Co.
Tokyo Office
DesignatedmemberExecutive
memberDesignatedmemberExecutive
memberCertifiedpublicaccountant

Makoto Iwabuchi

Certifiedpublicaccountant

Takao Miki

Auditors' opinion
Our audit corporation, in accordance with Article 436, Paragraph 2, Item 1 of the Companies Act, has audited the financial statementsof Inageya Co., Ltd. for the 75th business year from April 1, 2022 to March 31, 2023, which include the balance sheet, income statement,
statement of changes in shareholders' equity, notes, and supplementary schedules (hereinafter referred to as the "financial statements, etc.").
We believe that these financial statements, etc., prepared according to the generally accepted corporate accounting standards in Japan,
fairly present, in all material respects, the financial position and the results of operations for the respective periods of the company and its
consolidated subsidiaries.
Basis for auditors' opinion
Our audit corporation has conducted the audit in accordance with the auditing standards generally accepted in Japan. The responsibilityof our audit corporation under the auditing standards is described in the "Auditor's responsibility in auditing the financial statements, etc."
Our audit corporation has complied with the professional ethics regulations in Japan and is independent of the Company, and has fulfilled
other ethical responsibilities as auditors. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis forour opinion.
Other information
Other information comprises the business report and its supplementary schedule. The responsibility of management is to prepare anddisclose this other information. In addition, the responsibility of the corporate auditors and the Audit and Supervisory Board is to monitor
the execution of the directors’ duties in establishing and operating the reporting process on other information.
Our audit opinion on the financial statements, etc. does not cover the other information, and we do not express an opinion on this otherinformation.
The responsibility of our audit corporation in the audit of the financial statements, etc. includes reading the other information and, in
doing so, considering whether there is a material misstatement between the other information and the financial statements, etc. or theknowledge obtained in the audit or otherwise, and to remain alert for indications that the other information appears materially misstated.

―41―

If we conclude based on the work we have performed that there is a material misstatement of this other information, we are required toreport that fact.
There are no matters relating to the other information that we are required to report.

―42―

Responsibility of the management, corporate auditors, and the Audit and Supervisory Board regarding the financial statements, etc.
The responsibility of management is to prepare and fairly present the financial statements, etc. in accordance with the generally accepted
accounting standards in Japan. This includes maintaining and operating internal controls deemed necessary for preparing and fairly
presenting financial statements, etc. that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, etc., management evaluates whether it is appropriate to prepare the financial statements, etc. on agoing concern basis. If there is a need to disclose matters related to the going concern based on the generally accepted corporate accounting
standards in Japan, it is management’s responsibility to disclose such matters.
The responsibility of the corporate auditors and the Audit and Supervisory Board is to oversee the execution of duties by the directors in
the maintenance and operation of the financial reporting process.
Auditor's responsibility in auditing the financial statements, etc.
The auditor's responsibility is to obtain reasonable assurance that the financial statements, etc. as a whole are free from material
misstatement, whether due to fraud or error, and to express an opinion on the financial statements, etc. through the audit report from an
independent standpoint. Material misstatement could result from fraud or error and is considered material if, individually or in the aggregate,
it could reasonably be expected to influence the decisions of users of the financial statements, etc.
The auditor, in accordance with the auditing standards generally accepted in Japan, performs the audit with professional judgment andmaintains professional skepticism throughout the audit process for the following:- The auditor identifies and evaluates the risk of material misstatement due to fraud or error, known as false labeling risk. The auditor designs
and implements audit procedures that are appropriate in response to the identified material false labeling risks. The selection andapplication of audit procedures is at the auditor's discretion. The auditor also obtains sufficient and appropriate audit evidence that will
form the basis for the expression of an opinion.
- The purpose of the audit of the financial statements, etc. is not to express an opinion on the effectiveness of the entity's internal controls,
but auditors consider the internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances
when conducting a risk assessment.
- The auditor evaluates the appropriateness of the accounting policies and their application adopted by management, as well as the rationalityof the accounting estimates made by management and the appropriateness of the related notes.
- The auditor assesses whether it is appropriate for management to prepare the financial statements, etc. using the going concern basis and,based on the audit evidence obtained, whether there is any material uncertainty regarding events or conditions that may raise substantial
doubt about the going concern assumption. When material uncertainties related to the going concern assumption are identified, the auditor
is required to either draw attention in the audit report to the notes on such uncertainties in the financial statements, etc. or, if the notes
concerning the material uncertainties are not appropriate, to express an opinion with exceptions regarding the financial statements, etc.
The auditor's conclusion is based on the audit evidence obtained up to the date of the audit report, but future events or conditions may
cause the entity to cease to continue as a going concern.
- The auditor evaluates whether the presentation and notes of the financial statements, etc. comply with the generally accepted corporate
accounting standards in Japan. This includes assessing the presentation, structure, and content of the financial statements, etc., including
the related notes, and determining whether the financial statements, etc. appropriately represent the underlying transactions and accounting
events.

The auditor reports to the corporate auditors and the Audit and Supervisory Board about the planned scope and timing of theaudit, significant findings from the audit including significant deficiencies in internal control identified during the audit, and othermatters required by audit standards.
The auditor reports to the corporate auditors and the Audit and Supervisory Board on compliance with the professional ethics
regulations regarding independence in Japan, and any matters that could reasonably be thought to affect the auditor's independence,
including the safeguards put in place to eliminate or mitigate such threats.

―43―

Conflicts of Interest
There are no conflicts of interest between the Company and the audit corporation or its executive members that need to bedisclosed under the Certified Public Accountants Act.

―44―

Audit report of the Audit and Supervisory Board
Audit Report
The Audit and Supervisory Board has prepared and deliberated on this audit report based on the audit reports created byeach corporate auditor regarding the execution of duties by the directors for the 75th business year, from April 1, 2022 toMarch 31, 2023, as follows:
1. Audit methods and content of the corporate auditor and Audit and Supervisory Board(1) The Audit and Supervisory Board established the audit policy and audit plan for the current term, received reportson the implementation and results of the audit from each corporate auditor, and also received reports on theexecution of duties from directors and accounts auditors. When necessary, explanations were requested.
(2) Each corporate auditor complied with the audit standards set by the Audit and Supervisory Board, followed theaudit policy and audit plan for the current term, and communicated with directors, the audit department, and other
employees to gather information and ensure a proper audit environment. The audit was conducted in the following
manner:(i) We attended meetings of the Board of Directors and other important meetings, received reports on the executionof duties from directors and the audit department, requested explanations as needed, reviewed key decision
documents, and investigated business operations and the state of assets at the head office departments and stores.
Additionally, for subsidiaries, we communicated and exchanged information with directors and corporate auditorsof subsidiaries, and received business reports from subsidiaries as necessary.
(ii) In order to ensure that the execution of duties by the directors reported in the business report complies with laws
and ordinances and the Articles of Incorporation, and to ensure the propriety of the operations of the corporategroup consisting of the corporation and its subsidiaries, we regularly received reports from directors andemployees about the setup and operation of the systems established based on the resolutions of the Board of
Directors as stipulated in Article 100, Paragraphs 1 and 3 of the Ordinance for Enforcement of the Companies Act
concerning the establishment of systems (internal control system). We requested explanations and expressed
opinions as necessary. Regarding the internal control over financial reporting, reports on the status of evaluation
and audit of such internal control were received from directors and Gyosei & Co. Explanations were requested asnecessary.
(iii) The Audit and Supervisory Board monitored and verified that the accounts auditor maintained independence
and conducted a proper audit. Reports on the execution of duties by the accounts auditor were received, andexplanations were requested as necessary. Furthermore, the accounts auditor notified us that they have establisheda system to ensure the proper performance of duties (as outlined in Article 131 of the Company Accounting―45―

Regulations) in accordance with the "Quality Control Standards for Audits" (Corporate Accounting Council,
October 28, 2005), and explanations were requested as necessary.
Based on these methods, we reviewed the business report and its supplementary schedules, financial statements(balance sheet, income statement, statement of changes in shareholders' equity, and notes), and their supplementaryschedules, as well as the consolidated financial statements (consolidated balance sheet, consolidated income statement,
consolidated statement of changes in shareholders' equity, and consolidated notes) for the related business year.

―46―

2. Audit Results(1) Audit results of the business report, etc.
(i) The business report and its supplementary schedules are recognized as correctly representing the Company's
situation in accordance with laws and ordinances and the Articles of Incorporation.
(ii) No significant facts were found that constitute a violation of laws and ordinances or Articles of Incorporation
concerning the execution of duties by directors.
(iii) The contents of the Board of Directors' resolutions concerning the internal control system are deemed appropriate.
The contents of the business report concerning the internal control system and the execution of duties by the directors
also show no matters requiring mention.
(2) Audit results of the financial statements and their supplementary schedules
The audit methods and results by Gyosei & Co., the accounts auditor, are deemed appropriate.
(3) Audit results of the consolidated financial statements
The audit methods and results by Gyosei & Co., the accounts auditor, are deemed appropriate.
May 16, 2023

Audit and Supervisory Board of Inageya Co., Ltd.
Full-time
OutsideCorporate
AuditorFull-time
Corporate
AuditorOutsideCorporate
AuditorOutsideCorporate
Auditor―47―

Masakazu
Yamamoto[Seal]

Kenichiro
Takayanagi[Seal]

MasamiShinozaki[Seal]

Koji Makino[Seal]

Matters related to the accounts auditor(1) Name
Gyosei & Co.
(2) Amount of compensation, etc.
Payment amount (millionsof yen)Category
Amount of compensation, etc. payable by the Company for the business year

45

Total amount of money and other financial benefits payable by the Company and its
subsidiaries

55

Notes: 1. The audit contract between the Company and the accounts auditor does not distinguish between compensation, etc.
for audits under the Companies Act and the Financial Instruments and Exchange Act, nor can they be practicallyseparated. Therefore, the total amount of compensation, etc. payable by the Company for the current businessyear is listed above.
2. Based on the "Practical Guidelines on Cooperation with Accounts Auditors" published by the Japan Corporate
Auditors Association, the Audit and Supervisory Board reviewed the audit plan and results of the previous
business year, audit hours, and compensation trends. As a result, the Audit and Supervisory Board agreed on theappropriateness of the amount of compensation, etc. for the accounts auditor for the current business year.

(3) Policy on dismissal or non-reappointment of accounts auditor
The Audit and Supervisory Board will dismiss the accounts auditor with the unanimous consent of
all corporate auditors if it is deemed applicable under each item of Article 340, Paragraph 1 of theCompanies Act.
In addition, if the Audit and Supervisory Board comprehensively evaluates the accounts auditor'squalifications, expertise, independence from the Company, and other evaluation standards, anddetermines that a change is necessary, it will decide on the content of a proposal for dismissal or nonreappointment of the accounts auditor. Based on this decision, the Board of Directors will submit the
proposal to the General Meeting of Shareholders.

―48―

Matters related to the development of a system to ensure the appropriateness of business operations(1) System to ensure the appropriateness of business operations
The basic policy on the system to ensure the appropriateness of business operations (internal control
system) resolved by the Company's Board of Directors is as follows:(i) System to ensure that the execution of duties by the Company's directors and employees (hereinafterreferred to as "executives and employees") complies with laws and ordinances and the Articles ofIncorporation(A) The "Inageya Group Philosophy" defines the laws, ordinances, and social norms (hereinafterreferred to as "compliance") that executives and employees must adhere to in relation to the
management stance and customer service that the Company and the Group aim for. To ensure
thorough compliance, the "Inageya Group Compliance Committee," which comprehensively
oversees compliance activities, has been established and carries out activities in a planned
manner. The status of these activities is reported as necessary to the Board of Directors andthe Audit and Supervisory Board.
(B) The Company will establish internal and external "helplines" for executives and employees of theCompany and the Group to consult and report on compliance issues. In the event that acompliance issue arises, the Inageya Group Compliance Committee will promptly report thedetails and countermeasures to the Board of Directors and the Audit and Supervisory Board.
(C) Corporate auditors will audit the execution of duties by the directors from an independent
standpoint. An Audit Office will be established as the department responsible for internal
audits, and it will audit the daily business execution status of each department.
(D) The Company will have no involvement with antisocial forces or organizations that threatensocial order and safety and will respond firmly to unreasonable demands in cooperation withlawyers and the police.
(ii) System for preserving and managing information related to the execution of duties by the Company's
directors(A) Information related to resolutions and reports at the Board of Directors and Management
Committee will be recorded, preserved, and managed in accordance with laws and ordinances
and internal regulations, and will be made available for viewing by directors and corporate
auditors as necessary.
(B) Documents and electronic data will be preserved and managed following regulations such as―49―

Confidential Information Management Regulations and Basic Regulations on the Protectionof Personal Information and various manuals, with periodic reviews and updates as necessary.
(iii) Regulations and other systems for managing the risk of loss to the Company(A) Based on the "Risk Management Committee Regulations," the Company and its subsidiaries will
identify, analyze, and evaluate risks, establishing an effective risk management system.
(B) If an internal audit discovers a fact that poses a risk of loss, it will be immediately reported to theGeneral Affairs and relevant departments.

―50―

(iv) System to ensure the efficient execution of duties by the Company's directors(A) The Board of Directors will set company-wide management goals shared by executives andemployees, and the directors responsible for business execution will determine specificindividual goals to achieve those management goals. They will regularly review the progressof these goals through status reports.
Additionally, the Board of Directors will establish the "Nomination and Compensation
Committee," consisting of members including independent outside directors, to strengthen the
supervisory function by ensuring the objectivity and transparency of procedures related tonominations and compensation.
(B) The Management Committee, which in principle meets twice a month, will promptly makedecisions on important matters other than those resolved by the Board of Directors and will
share information by receiving reports on business execution from its members.
(v) System to ensure the appropriateness of business operations within the corporate group consistingof the Company and its subsidiaries(A) The Company will establish a monitoring system for the business operations of its subsidiaries
by setting up approval and reporting procedures for important matters of the subsidiaries anda regular reporting system to the Company.
(B) The Group President's Meetings will report on the business operations of the subsidiaries and theexecution of duties by their directors and other officers.
(C) The Group will identify, analyze, and evaluate risks based on the "Risk Management Committee
Regulations."(D) The Company will establish a department responsible for managing its subsidiaries. This
department will hold discussions and exchange information on important matters with thesubsidiaries, aiming to improve the soundness and efficiency of the Group's overallmanagement.
(E) While respecting the autonomy of the subsidiaries, the Company will have its executives andemployees appointed as directors or corporate auditors of the subsidiaries, receiving regular
reports from the subsidiaries to monitor the appropriateness of their business operations.
(F) The Company will also appoint members from its subsidiaries to the "Inageya Group Compliance
Committee" to jointly promote compliance activities within the Group.
(vi) In the event that the corporate auditor requests employees to assist in their duties, matters related to―51―those employees, matters concerning their independence from directors, and matters related toensuring the effectiveness of instructions given to those employees(A) Corporate auditors may instruct members of the Audit Office to assist in audit operations as theiraides, and these members will not be subject to the direction and command of directors or thehead of the Audit Office regarding such instructions.
(B) Transfers and disciplinary actions of members of the Audit Office require the consent of the Audit
and Supervisory Board.
(vii) System for executives and employees of the Company to report to corporate auditors, and forexecutives and employees of subsidiaries and their corporate auditors or those who have received
reports from them to report to the Company's corporate auditors
Executives and employees of the Company and its subsidiaries, as well as corporate auditors of thesubsidiaries or those who have received reports from them, must promptly report to the Company's
corporate auditors if they discover matters that may violate laws and ordinances, internal reports,
or any facts that may cause significant damage to the Company or the Group. Additionally, theCompany's corporate auditors may directly request explanations from the reporting individuals asnecessary.
(viii) System to ensure that individuals who made the above reports are not treated unfavorably due totheir reporting
The Company stipulates in the "Internal Reporting Regulations" that no disadvantageous treatment
shall be given for making internal reports, and prohibits any investigation into the identity of thewhistleblowers. The same applies to reports to corporate auditors, ensuring that no disadvantageous
treatment is given for such reporting.
(ix) Policy on procedures for prepayment or reimbursement of expenses incurred in the execution ofduties by the Company's corporate auditors and handling of other costs or liabilities arising fromtheir duties
The Company will promptly process any prepayment or reimbursement requests for expenses
necessary for the execution of duties by the corporate auditors.
(x) Other systems to ensure effective audits by the Company's corporate auditors(A) Regular opinion exchange meetings will be held between the Audit and Supervisory Board, theaccounts auditor, and the representative director.
(B) The Board of Directors and each director will fully respect the opinions of the corporate auditors―52―

regarding the effectiveness of audits.
(C) Corporate auditors may attend important meetings and committees such as the Board of Directors
and Management Committee to understand significant decisions and the status of businessexecution.
(xi) System to ensure the reliability of financial reporting
To ensure the reliability of financial reporting within the Group, including subsidiaries, theCompany will establish and maintain an adequate system throughout the Group in accordance with
the Financial Instruments and Exchange Act and other related laws and the "Inageya Group
Philosophy," and will operate an internal control system. Under the direction of the president andrepresentative director, who is responsible for internal control, the Company will appoint personnel
to promote internal control and regularly verify and evaluate the effectiveness of the internal
control system, making corrections as necessary.

―53―

(2) Operation status of the system to ensure the appropriateness of business operations
Based on the above basic policy, the Company will strive to establish and properly operate the internal
control system. Major initiatives for the business year are as follows:(i) Status of initiatives related to compliance and risk management
The Inageya Group Compliance Committee, which comprehensively oversees complianceactivities, was convened six times to confirm and share the initiatives of each Group company. To
verify and confirm measures to prevent recurrence of incidents, to deepen understanding ofcompliance, and to promote its penetration in the workplace, the Company implemented
hierarchical training and strengthened on-site visits by compliance committee members.
Additionally, a compliance awareness survey was conducted for all employees of the Group toclarify current workplace issues. The recognition of issues, sharing of priorities for solutions, andlinkage to subsequent compliance activities aim to detect and improve problems early.
Regarding risk management initiatives, the Risk Management Committee was convened fourtimes to identify, analyze, and evaluate risks across the entire Group. Regarding risks that occur,
the Company will strengthen, improve, and prevent the recurrence of risks by identifying issues
related to risk events, implementing risk management measures, and other management efforts.
(ii) Status of initiatives to ensure the appropriateness and efficiency of duty execution
The Board of Directors held 18 meetings to deliberate on various proposals, supervise the statusof business execution, and confirm the construction and operation status of the internal control
system for each business year. Additionally, as an advisory body to the Board of Directors, theNomination and Compensation Committee, consisting of two internal directors and three outside
directors, was established and chaired by an outside director. This committee exchanges opinions
on the nomination and compensation of directors and deliberates and makes recommendations on
matters consulted by the Board of Directors. Furthermore, outside directors and corporate auditors
appropriately exchange information on important issues as needed.

―54―

(iii) Status of initiatives to ensure the appropriateness of business operations within the GroupThe Group President's Meetings, consisting of the presidents of the Company and its subsidiaries,
were held regularly, six times during the current business year, to report and share information on
financial results, progress of management plans and policies, and the status of business execution.
(iv) Status of reporting systems to corporate auditors and initiatives to ensure effective audits bycorporate auditors
The Audit and Supervisory Board held 16 meetings to discuss important audit-related mattersand provide appropriate advice and recommendations to management. Additionally, regularopinion exchanges were held with the representative director, accounts auditor, and members of
the Audit Office. Full-time corporate auditors attended important meetings such as theManagement Committee to obtain necessary information from directors and employees, etc. andshare information with outside corporate auditors, thereby striving to improve the effectiveness ofaudits.
Policy on the determination of dividends, etc. from surplus
The Company considers profit return to shareholders as one of its key management policies. Based on
a comprehensive assessment of the consolidated financial results, future business development,enhancement of revenue capabilities, and the strengthening of financial health through retained earnings,
the Company aims to maintain stable dividends as its basic policy.
Furthermore, the Company has provisions in its Articles of Incorporation that allow for dividends, etc.
from surplus by resolution of the Board of Directors, and dividends are implemented twice a year as interim
and year-end dividends.

―55―

Consolidated statement of changes in shareholders' equity(From April 1, 2022 to March 31, 2023)(millions of yen)
Shareholders' Equity
CapitalsurplusCapitalBalance at the beginningof the term
Changes during thecurrent term
Dividend from surplus

8,981

Retainedearnings

13,598Net loss attributable toowners of parent

35,751(6,275)(696)(1,156)(1,156)
(0)

(0)

9

9

-

-

(1,853)8(1,844)

8,981

13,59833,898(6,266)50,211

Accumulated other comprehensive income
Total
Other
Accumulated
accumulated
valuation
adjustments
otherdifference on
for retirement
comprehensiv
securities
benefitse income
Balance at the beginningof the term
Changes during thecurrent term
Dividend from surplus

52,055(696)

Purchase of treasury
stock
Disposal of treasurystock
Net changes in items
other thanshareholders' equity
Total changes during thecurrent term
Balance at the end of the
term

Total
shareholders'equityTreasury
stock

2,970

688

3,659

Noncontrollinginterests

1,172

Total net
assets

56,886(696)

Net loss attributable toowners of parent(1,156)

Purchase of treasury
stock
Disposal of treasury

(0)
9

―56―

stockNet changes in items
other thanshareholders' equity
Total changes during thecurrent term
Balance at the end of the
term

1,242

(389)

853

33

886

1,242

(389)

853

33

(957)

4,213

299

4,512

1,205

55,929―57―

Consolidated Notes
Notes on important matters forming the basis for the preparation of consolidated financial statements
1. Matters concerning the scope of consolidation
Number and names of consolidated subsidiaries
5 companies
SAVIA Corporation, Sun Food Japan Co., Ltd., Welpark Co., Ltd., Inageya Wing Co., Ltd., Inageya Dream Farm Co., Ltd.
2. Matters concerning the application of the equity method
Not applicable.
3. Matters concerning the business year of consolidated subsidiaries
The last day of the business year of consolidated subsidiaries is the same as the consolidation closing date.
4. Matters concerning accounting policies(1) Evaluation standards and methods for assets(i) Securities
Other securitiesThose other than……… Market value method based on market prices, etc. at the closing date (valuation
stocks without
differences are directly charged to net assets and sales costs are calculated using
market pricethe moving average method)
Stocks without……… Cost method based on the moving average methodmarket price(ii) Inventory
assets……………………… The cost method mainly based on the retail method (balance sheet amounts arecalculated using the method of reducing book value due to decreased
profitability) is adopted. For fresh foods, center products, and pharmaceutical
department products, the cost method based on the last purchase cost method(balance sheet amounts are calculated using the method of reducing book value
due to decreased profitability) is adopted.
(2) Depreciation methods for fixed assets(i) Tangible fixed …………………… The straight-line method is adopted. However, the declining balance method isassetsadopted by subsidiaries in the retail support business, and the straight-line method(excluding lease assets)
is adopted for buildings acquired on or after April 1, 1998 (excluding building
auxiliary equipment) and building auxiliary equipment and structures acquiredon or after April 1, 2016.

―58―

The main useful lives are as follows.
Buildings and structures 3 to 50 years
Machinery and equipment, 3 to 20 years
and fixtures and fittings―59―

(ii) Intangible
fixed assets…………………… The straight-line method is adopted. For in-house software, the straight-line
method based on the expected usable period within the company (5 years) is
adopted.

(iii) Lease assets …………………… The straight-line method is adopted with the lease period as the useful life and a…
residual value of zero.
(3) Treatment method for deferred assets
Bond issuance …………………… Amortized using the straight-line method over the bond redemption period.
costs(4) Standards for the recording of allowances(i) Reserve for……………… Recorded based on the estimated amount of bonuses to be paid to employees.
bonuses(ii) Reserve for……………… The amount expected to be used in the future as of the end of the consolidated
pointsfiscal year is recorded to prepare for the use of points other than those granted topoint card members due to sales for sales promotion purposes.
(iii) Reserve for stock ……………… To prepare for the provision of the Company's stock to eligible executive
compensation
employees of the Group based on the stock compensation regulations, theestimated amount of stock compensation liability as of the end of the consolidated
fiscal year is recorded.
(iv) Reserve for……………… To prepare for the provision of the Company's stock to eligible directors of theexecutive stockGroup based on the stock compensation regulations, the estimated amount ofcompensation
stock compensation liability as of the end of the consolidated fiscal year isrecorded.
(5) Method of accounting treatment forIn calculating retirement benefit liabilities, the method of attributing theretirement benefits…
estimated amount of retirement benefits to the period up to the end of theconsolidated fiscal year is based on the benefit calculation standard.
The actuarial differences are allocated by the straight-line method over a certain
number of years (7 years) within the average remaining service period of
employees at the time of occurrence in each consolidated fiscal year and areprocessed as expenses from the following consolidated fiscal year.
Additionally, for part-time employees, a simplified method is applied for
calculating retirement benefit liabilities and retirement benefit expenses. Thismethod uses the retirement benefit obligations at the end of the period, based on
the amount payable if the employee voluntarily resigns, as the retirement benefit
liabilities.

―60―(6) Standards for recording revenue and expenses(i) Revenue recognition related to sales Revenue arising from contracts with customers in the Group is mainly fromof goods……
the sale of goods in the retail business, primarily from the supermarket anddrugstore businesses, and revenue from these sales is recognized at the pointof delivery of goods to the customer.
For sales where the Group is considered an agent, revenue is recognized on a
net basis, subtracting the payment to suppliers from the total amount received
from customers.
(ii) Revenue recognition related to theGroup's own point system………

The Group recognizes points granted to point card members in the supermarket
and drugstore businesses as a performance obligation and allocates thetransaction price based on the independently calculated sales price, considering
future expirations, etc. Revenue is recognized when the points are used.

Notes on changes in accounting policies(Application of accounting standards for market value calculation)
The "Implementation Guidance on Accounting Standard for Fair Value Measurement" (ASBJ Guidance No. 31, June 17,2021) has been applied from the beginning of the consolidated fiscal year, and the new accounting policy prescribed by the
Implementation Guidance on Accounting Standard for Fair Value Measurement will be applied in the future according to
the transitional treatment set forth in Article 27-2 of the Implementation Guidance on Accounting Standard for Fair Value
Measurement. This has no impact on the consolidated financial statements.
Notes on significant accounting estimates(Impairment of fixed assets)(1) Amount recorded in the consolidated financial
statements for the current consolidated fiscal year
Impairment loss
1,474million yen
Tangible fixed assets
32,457million yen(2) Information to aid understanding of other estimates
In determining, recognizing, and measuring indications of impairment of fixed assets, future performance forecasts andfuture cash flow estimates are made based on future business plans and past cash flow performance.
These estimates may be affected by uncertain future market trends and other factors. If the actual amount differs fromthe estimate, it could have a significant impact on the impairment amount of fixed assets in the consolidated financial
statements for the following consolidated fiscal year.
Notes on the consolidated balance sheet
Accumulated depreciation of tangible fixed assets

46,516million yen―61―Notes on the consolidated statement of changes in shareholders' equity
1. Types and total number of outstanding shares at the end of the consolidated fiscal year
Common shares
52,381,447shares
2. Matters concerning dividends(1) Amount of dividend payments
Resolution

Type of shares

June 23, 2022
Regular General Meeting Common sharesof Shareholders
November 8, 2022
Common shares
Board of Directors

Total dividend
amountDividend per
share

million348
yenmillion348
yenRecord date

Effective date

7.50 yenMarch 31, 2022

June 24, 2022

7.50 yen

September 30, 2022

November 25, 2022

*1. The total dividend amount resolved at the Regular General Meeting of Shareholders on June 23, 2022 includes dividendsof 0 million yen for the Company's shares held as trust assets under the stock compensation system for executives and thestock incentive system for employees.
*2. The total dividend amount resolved by the Board of Directors on November 8, 2022 includes dividends of 0 million yen
for the Company's shares held as trust assets under the stock compensation system for executives and the stock incentive
system for employees.
(2) Among the dividends for which the record date falls in the current consolidated fiscal year, those whose effective date ofthe dividend is in the following consolidated fiscal year
Resolution

Type ofsharesTotal dividend
Source ofamountdividend

Dividend per
share

Record date

Effective dateJune 22, 2023
Regular General
CommonmillionRetained348
7.50 yenMarch 31, 2023
June 23, 2023
Meeting of
yensharesearnings
Shareholders(forecast)*The total dividend amount resolved at the Regular General Meeting of Shareholders on June 22, 2023 includes dividends of
0 million yen for the Company's shares held as trust assets under the stock compensation system for executives and the stockincentive system for employees.

―62―Notes on financial instruments
1. Matters concerning the status of financial instruments(1) Policy for dealing with financial instruments
The Group raises necessary funds (mainly through bank loans and bond issuance) in light of capital investment plans.
Temporary surplus funds are invested in short-term, highly safe financial assets, and short-term working capital is raised
through bank loans.
(2) Details and risks of financial instruments
Accounts receivable, which are trade receivables, are exposed to the credit risk of customers, but most are settled in ashort period. Securities are primarily jointly managed monetary trusts and trust beneficiary rights held for the managementof surplus funds, similar to deposits, and most are settled in a short period.
Investment securities, which are stocks, are related to business transactions with corporate clients and financial
institutions, and are exposed to market price fluctuation risk.
Deposits are mainly deposits provided to store owners by the Company and its consolidated subsidiary, Welpark Co.,
Ltd., for new store openings, and are exposed to the credit risk of the owners.
Accounts payable and electronically recorded obligations, which are trade payables, are mostly due within one month.
Long-term borrowings and bonds are mainly for raising funds related to capital investments, with redemption dates up to
six years after the closing date. Borrowings and bonds are primarily at fixed interest rates.
(3) Risk management system for financial instruments(i) Management of credit risk (risk of default by business partners)
In the Group, in accordance with the regulations on credit management, each department regularly monitors the statusof major business partners regarding trade receivables and deposits. The Group manages due dates for each business
partner and aims to promptly identify and mitigate concerns about collection due to the deterioration of their financial
condition.
(ii) Management of market risk (risk of fluctuation in exchange rates, interest rates, etc.)
All investment securities are listed stocks, and their market value is determined at the end of each month and reported
to the Board of Directors quarterly.
The financial condition of issuers of securities is regularly monitored according to the investment regulations.
Although there is a risk of fluctuation in the interest rates on borrowings and bonds, borrowings are primarily at fixedinterest rates.
(iii) Management of liquidity risk (risk of inability to execute payments on due dates) related to fund procurement
Trade payables, borrowings, and bonds are exposed to liquidity risk, but the Group adopts a cash management system(CMS) for efficient fund management and procurement and manages liquidity by creating monthly cash flow plans foreach company.

―63―

(iv) Supplemental explanation on matters concerning the market value of financial instruments
The calculation of the market value of financial instruments incorporates fluctuation factors, and the value may
change by adopting different assumptions.
2. Matters concerning the market value of financial instruments
The amounts recorded in the consolidated balance sheet as of March 31, 2023 (the current term's consolidation closingdate), their market value, and the differences are as follows. Note that stocks without market price (see Note 2) are notincluded in "Other securities." Additionally, notes on cash have been omitted, and notes on deposits, accounts receivable,accounts payable, electronically recorded obligations, and accrued corporate tax, etc. have been omitted because theirmarket value approximates their book value due to their short settlement period.
Amount recorded in the
consolidated balance sheet(millions of yen)
Market value

Difference(1) Securities and investment securities
Other securities
Stocks

9,109

9,109

-

Others

11,149

11,149-(2) Deposits (including those scheduled
for collection within 1 year)

9,569

9,039

(530)

Total assets

29,82929,298(530)(1) Corporate bonds (including thosescheduled for redemption within 1 year)

2,736

2,701

(34)

5,711

5,676

(34)

8,447

8,378

(69)

(2) Long-term borrowings (including
those scheduled for repayment within 1
year)
Total liabilities―64―Note 1: Matters concerning securities
Securities and investment securities
The amounts recorded in the consolidated balance sheet, acquisition cost or amortized cost, and the differences bytype are as follows.
(millions of yen)Amount recorded in
Acquisition cost or
the consolidatedTypeamortized cost
Difference
balance sheet
Securities
whose
amount recorded intheconsolidatedbalance sheet exceeds
the acquisition cost or
amortized cost(i) Stocks

8,967

2,876

6,090

(ii) Bonds

-

-

-

(iii) Others

-

-

-

Subtotal

8,967

2,876

6,090

Securities
whose
amount recorded intheconsolidatedbalance sheet does notexceed the acquisition
cost or amortized cost(i) Stocks

142

159

(17)

(ii) Bonds

-

-

-

(iii) Others

11,149

11,149-Subtotal

11,292

11,309(17)

20,25914,186

6,073

Total
Note 2: Stocks without market priceCategory(millions of yen)Amount recorded in the consolidated balance sheet

Unlisted shares

0

These are not included in "Other securities."
3. Matters concerning the breakdown of financial instruments by appropriate market value classification
The market value of financial instruments is classified into the following three levels based on the observability andimportance of inputs used for market value calculation.
Level 1 market value:

Market value calculated using quoted prices in active markets for identical assets or liabilities
among observable inputs

Level 2 market value:

Market value calculated using inputs other than quoted prices included within Level 1 that are
observable for the assets or liabilities that are the subject of the measurement of such market value―65―

Level 3 market value:

Market value calculated using unobservable inputs

If multiple inputs significantly affecting the market value calculation are used, the market value is classified at the lowest
priority level among the levels to which those inputs belong.
(1) Financial instruments recorded in the consolidated balance sheet at market value(millions of yen)
Market value

Category
Securities
securities

andLevel 1

Level 2

Level 3Total

investment

Other securities
Stocks

9,109

-

-

9,109

(2) Financial instruments other than those recorded in the consolidated balance sheet at market value(millions of yen)
Market value

Category
Securities
securities

andLevel 1

Level 2

Level 3Total

investment

Other securities
Others-

11,149-

11,149

-

9,039

-

9,039

-

20,189-20,189Corporate bonds

-

2,701

-

2,701

Long-term borrowings

-

5,676

-

5,676

Total liabilities

-

8,378

-

8,378

Security deposits
Total assets―66―

(3) Explanation of the valuation techniques and inputs used for market value calculation
Securities and investment securities
Listed shares are valued using market prices. Since listed shares are traded in active markets, their market value isclassified as Level 1 market value. On the other hand, securities held by the Company (classified as "Others" in Other
securities) are short-term investment products (such as trust beneficiary rights and joint monetary trusts) acquired for the
temporary management of surplus cash and deposits with a maturity of three months or less, are considered to have the same
nature as cash and deposits, and are recorded at acquisition cost. Since the trading frequency of these investment products inthe market is low and they are not recognized as market prices in active markets, their market value is classified as Level 2
market value.
Security deposits
The market value of these deposits is calculated based on the present value of future cash flows discounted using
appropriate indicators such as government bond yields, and is classified as Level 2 market value.
Corporate bonds (including those scheduled for redemption within 1 year)
The market value of bonds issued by the Company is calculated using the discounted present value method based on the
total amount of principal and interest, the remaining term of the bonds, and an interest rate that considers credit risk, and isclassified as Level 2 market value.
Long-term borrowings (including those scheduled for repayment within 1 year)
The market value of these long-term borrowings is calculated using a method that discounts the total amount of principal
and interest at an assumed interest rate for similar new borrowings, and is classified as Level 2 market value.

―67―

Notes on real estate for lease, etc.
The Company and some consolidated subsidiaries own commercial facilities for lease in the Kanto region, including
Tokyo and Saitama Prefecture. Note that some of the commercial facilities for lease are used by the Company and someconsolidated subsidiaries, and are therefore included as real estate for lease, etc.
The amounts recorded in the consolidated balance sheet, changes during the current term, and market value of these rental
properties and real estate, including portions used as rental properties, are as follows.
(millions of yen)Amount recorded in the consolidated balance sheet
Balance at the
beginning of theconsolidated fiscal
year

Market value at the
Increase/decrease
Balance at the end of end of the consolidated
during the consolidated the consolidated fiscal
fiscal year
fiscal year
year

Real estate for lease, etc.

3,153

4

3,157

3,220

Real
estateincludingportions used as real estate
for lease, etc.

3,630

(130)

3,499

3,799

Notes: 1. The amounts recorded in the consolidated balance sheet are the acquisition cost less accumulated depreciation andaccumulated impairment losses.
2. The main increase in the amount of real estate for lease, etc. and real estate including portions used as real estate forlease, etc. during the consolidated fiscal year is acquisitions (67 million yen), and the main decrease is depreciation(175 million yen).
3. The market value at the end of the consolidated fiscal year is primarily based on the "Real Estate Appraisal Standard"and calculated by the Company (including adjustments using indicators, etc.).
The profit and loss for the consolidated fiscal year related to real estate for lease, etc. and real estate including portions
used as real estate for lease, etc. are as follows.
(millions of yen)
OthersRental revenue
Rental expenses
Difference(Profit and loss on
sales, etc.)
Real estate for lease, etc.
Real
estateincludingportions used as real estate
for lease, etc.

137

129

8

(0)

386

814

(428)

(18)

Note: Real estate including portions used as real estate for lease, etc. includes portions used by the Company and someconsolidated subsidiaries for service provision and business administration. Therefore, rental revenue for these
portions is not recorded.

―68―However, expenses related to this real estate (depreciation, repair expenses, insurance premiums, taxes, etc.) are
included in rental expenses.

―69―Notes on revenue recognition
1. Information disaggregated by revenue arising from contracts with customers(millions of yen)

Reportable segment
Supermarket
business

Drugstore
business

Retail support
business

Operatingrevenue
(*)

Total

Total

Net sales
Merchandise

193,470

39,792-233,262-

233,262

Dispensing

-

3,883

-

3,883

-

3,883

Other

-

-

806

806

8,988

9,794

193,470

43,676806

237,953

8,988

246,941

-

-

-

-

1,604

1,604

Revenue arising fromcontracts with customers
Other revenue

Operating revenue from193,470
43,676806
237,953
10,593
248,546
external customers(*) "Other" in operating revenue refers to delivery agency income from supplying goods to stores on behalf of suppliers andrevenue related to consignment purchases. "Other revenue" refers to real estate rental income from attracting tenants to theGroup's stores.
2. Information foundational for understanding revenue arising from contracts with customers
The Group operates businesses centered on the supermarket and drugstore businesses, supported by retail support
subsidiaries. The Group's main revenue is from sales of goods to customers at retail stores, recognized at the point of sale when
the performance obligation is fulfilled. Consideration for goods is generally received within one month from delivery.
Operating revenue mainly consists of delivery agency income from supplying goods to stores on behalf of suppliers,
consignment purchase fees, and real estate rental income from attracting tenants to the Group's stores. This revenue isrecognized when the service is provided, as the performance obligation is fulfilled. This consideration is generally received
within one month based on contracts with business partners.

―70―

3. Relationship between the fulfillment of performance obligations under contracts with customers and the resulting cash flows,
and information on the amount and timing of revenue expected to be recognized from contracts with customers after the endof the consolidated fiscal year
(1) Balance of contract liabilities
Current consolidated fiscal year
Contract liabilities (balance at the beginning of the term)

2,412 million yen

Contract liabilities (balance at the end of the term)

2,553 million yen

Contract liabilities mainly relate to points granted to customers at the time of sales, which are recognized as revenue whencustomers use their available points at the time of sales of products.
Of the revenue recognized during the consolidated fiscal year, 1,377 million yen was included in the contract liabilities
balance at the beginning of the term.
(2) Transaction price allocated to remaining performance obligations
The expected contract period is within one year, so practical expedients are used and omitted from the description.
Notes on information per share
Net assets per share
Net loss per share for the current term

1,180.73 yen(24.96 yen)

Notes on significant subsequent events
Signing of a basic agreement on management integration
The Company, AEON CO., LTD. (hereafter referred to as "AEON"), and United Super Markets Holdings, Inc. (hereafterreferred to as "U.S.M.H."), have signed a basic agreement (hereinafter referred to as "this Agreement") on April 25, 2023
for the Company's participation in the AEON Group as a consolidated subsidiary of AEON and for the management
integration with U.S.M.H. This Agreement does not have legal binding power concerning the execution of the management
integration, and it is planned that following further discussions among the Company, AEON, and U.S.M.H., a resolution of
the Board Of Directors and other necessary procedures, a legally binding formal contract will be signed.
(1) Purpose of this Agreement
The Company, AEON, and U.S.M.H. have agreed to sign this Agreement because, in the increasingly competitive Greater
Tokyo Area, we believe it is optimal to deepen the relationships among our companies and advance the "1 trillion yen SM
concept in the Kanto region" to continue meeting customer needs with agility, coexist with the local community, and growtogether, building a sustainable future for the region.
Through strengthening capital relations and management integration, we aim to fully utilize various assets of the AEONGroup, such as digital, products, personnel, and payment infrastructure, advance the evolution into a new business model
leveraging economies of scale as a 1 trillion yen SM Group, and strive to maximize corporate value.

―71―

(2) Deepening business alliances
The Company, AEON, and U.S.M.H. will promptly establish an "Integration Preparation Committee (provisional name)"
to discuss the following matters, among others, with the aim of enhancing the corporate value of the three companies.
Specific policies and contents of the business alliance will be determined through discussions and agreement among the threecompanies.
(i) Expansion of the introduction of TOPVALU, a private brand product(ii) Joint procurement of products (national brand products, local products, imported products)(iii) Initiatives to revitalize each other's supermarkets and drugstores and develop stores tailored to the local customer
base(iv) Organization and utilization of functions such as logistics centers and process centers(v) Cost reduction through joint procurement of materials, fixtures, equipment, etc., and the integration of back-office
operations(vi) Initiatives for the joint use of credit cards, electronic money, and point cards(vii) Joint research and development of e-commerce, including initiatives in the online business(viii) Utilization of the AEON Group's education system and personnel exchange(ix) Provision of analytical services combining member information and POS information(3) Strengthening capital relations
The Company and U.S.M.H. will promptly begin discussions to achieve management integration (hereinafter referred toas "this Management Integration") based on the following basic policies, aiming for completion by November 2024.
Currently, the Company is an equity-method affiliate with AEON holding 17.01%, and U.S.M.H. is a consolidated subsidiarywith AEON holding 53.59% (including indirect holdings). If this Management Integration is realized, the Company is
expected to be delisted according to the delisting standards set by the Tokyo Stock Exchange and will follow the prescribed
procedures.
(i) Considering that localized management is important for enhancing the corporate value of the Company, which operates
a supermarket business, the Company's independence will be maintained, and its brand name, core philosophy, andother corporate identities will be preserved even after the Company becomes a consolidated subsidiary of AEON as aprecondition for this Management Integration.
(ii) The employment of the Company's employees will be maintained, and their employment conditions will not be
adversely changed even after the Company becomes a consolidated subsidiary of AEON as a precondition for thisManagement Integration.
(iii) This Management Integration will result in the Company becoming a wholly-owned subsidiary of U.S.M.H.
As the Company and U.S.M.H. do not have a partnership, sufficient discussion time will be secured to maximize synergies,
aiming to achieve this Management Integration by November 2024. However, as the first step towards realizing thisManagement Integration, AEON will strengthen its capital and business relationship with the Company, which already has
a partnership with AEON. AEON plans to acquire up to 51% of the Company's voting rights by November 2023. This will―72―

allow the Company to quickly demonstrate synergies by utilizing the AEON Group's digital, product, human resources, andpayment infrastructure assets and making the Company a consolidated subsidiary.
Specific methods and conditions will be decided through future discussions and will be promptly announced once
determined.
(4) Overview of the relevant companies(As of February 28, 2023)
Name

AEON CO., LTD.

Business activities

Management of business activities of companies
engaged in retail, developer, finance, services,and related businesses by holding their shares or
equity interests

CapitalTotal
assets(consolidated)
Operatingrevenue(consolidated)

United Super Markets Holdings Inc.
Management of the supermarket business

220,007 million yen

10,000 million yen

12,341,523 million yen

278,729 million yen

9,116,823 million yen

708,690 million yen―73―※Reference―74―

Statement of changes in shareholders' equity(From April 1, 2022 to March 31, 2023)(millions of yen)
Shareholders' equity
CapitalsurplusCapitalBalance at the beginningof the term
Changes during thecurrent term
Dividend from surplus
Reversal of fixed
assets depreciation
reserve
Net loss for the current
term
Purchase of treasury
stock
Disposal of treasurystock
Net changes in items
other thanshareholders' equity
Total changes during thecurrent term
Balance at the end of theterm

Retained earnings

Capitalreserve

8,981

Other retained earnings
Fixed assets
Carrieddepreciation
Specialforwardreserve
reserve
surplusProfitreserve

13,598

1,544

368

(1)

5,240

24,453

(696)

(696)

1

-

(1,465)(1,465)

-

-

-

(1)

-

(2,160)(2,162)

8,981

13,5981,544

367

17,3003,080

22,291

Shareholders' Equity
Treasury stock
Balance at the beginningof the term
Changes during thecurrent term
Dividend from surplus

17,300Retainedearnings
Total

Total shareholders'equity(6,275)40,757(696)―75―

Evaluation andtranslation adjustments
Other valuationdifference on securities
2,970

Total net assets

43,728(696)

Reversal of fixed
assets depreciation
reserve
Net loss for the current
term
Purchase of treasury
stock
Disposal of treasurystock
Net changes in items
other thanshareholders' equity
Total changes during thecurrent term
Balance at the end of theterm(1,465)(1,465)

(0)

(0)

(0)

9

9

9
1,242

1,242

8

(2,153)

1,242

(910)

(6,266)

38,604

4,213

42,818―76―

Individual Notes
Notes on matters related to significant accounting policies
1. Evaluation standards and methods for assets(1) Securities(i) Subsidiary ……………………… Cost method based on the moving average method
shares(ii) Other securitiesThose other than ………… Market value method based on market prices, etc. at the closing date (valuation
stocks without
differences are directly charged to net assets and sales costs are calculated using
market pricethe moving average method)
Stocks without ………… Cost method based on the moving average methodmarket price(2)
assetsInventory ………………………… The cost method mainly based on the retail method (balance sheet amounts arecalculated using the method of reducing book value due to decreased
profitability) is adopted. For fresh foods and center products, the cost method
based on the last purchase cost method (balance sheet amounts are calculatedusing the method of reducing book value due to decreased profitability) is
adopted.

2. Depreciation methods for fixed assets(1) Tangible fixed ……………………… The straight-line method is adopted.
assetsThe main useful lives are as follows.
(excluding lease assets)
Buildings and structures 3 to 50 years
Machinery and equipment, 3 to 20 years
and fixtures and fittings(2) Intangible fixed ……………………… The straight-line method is adopted. For in-house software, the straight-line
assetsmethod based on the expected usable period within the company (5 years) is
adopted.
(3) Lease assets………………………… The straight-line method is adopted with the lease period as the useful life and aresidual value of zero.

3. Treatment method for deferred assets
Bond issuance ………………………… Amortized using the straight-line method over the bond redemption period.
costs

―77―

4. Standards for the recording of allowances(1) Allowance for ………………………… To prepare for losses on accounts receivable and loans, an allowance is recorded
doubtful accounts
based on the rate of past bad debts for general receivables and individuallyassessed uncollectible amounts for specific receivables such as doubtful accounts.
(2) Reserve for bonuses …………………… Recorded based on the estimated amount of bonuses to be paid to employees.

―78―

(3) Reserve for points …………………… The amount expected to be used in the future as of the end of the business year isrecorded to prepare for the use of points other than those granted to point card
members due to sales for sales promotion purposes.
(4) Reserve for stock …………………… To prepare for the provision of the Company's stock to eligible executive
compensation
employees based on the stock compensation regulations, the estimated amount ofstock compensation liability as of the end of the business year is recorded.
To
prepare for the provision of the Company's stock to eligible directors based(5) Reserve for executive……………
on
the stock compensation regulations, the estimated amount of stock
stock compensationcompensation liability as of the end of the business year is recorded.
(6) Reserve for…………………… To prepare for retirement benefits to be paid to employees, the estimated amountretirement benefitsof retirement benefit liabilities and pension assets as of the end of the businessyear is recorded. The method of attributing the estimated amount of retirement
benefits to the period up to the end of the business year is based on the benefit
calculation standard.
The actuarial differences are allocated by the straight-line method over a certain
number of years (7 years) within the average remaining service period of
employees at the time of occurrence in each business year and are processed as
expenses from the following business year.
Additionally, for part-time employees, a simplified method is applied for
calculating the reserve for retirement benefits and retirement benefit expenses.
This method uses the retirement benefit obligations at the end of the period, basedon the amount payable if the employee voluntarily resigns, as the retirement
benefit liabilities.
5. Standards for recording revenue and expenses(1) Revenue recognition related to sales ofRevenue arising from contracts with customers is mainly from sales of goods,
goods………
and revenue from these sales is recognized at the point of delivery of goods to thecustomer.
For sales where the Company is considered an agent, revenue is recognized on a
net basis, subtracting the payment to suppliers from the total amount received
from customers.
(2) Revenue recognition related to theThe Group recognizes points granted to point card members in the supermarket
Company's own point system…………
business as a performance obligation and allocates the transaction price based on
the independently calculated sales price, considering future expirations, etc.
Revenue is recognized when the points are used.
6. Other important matters forming the basis for the preparation of financial statements―79―Accounting treatment
benefits……………

for

retirement The method of accounting for unrecognized actuarial differences related toretirement benefits differs from the method of accounting in the consolidated
financial statements.

―80―Notes on changes in accounting policies(Application of accounting standards for market value calculation)
The "Implementation Guidance on Accounting Standard for Fair Value Measurement" (ASBJ Guidance No. 31, June 17,2021) has been applied from the beginning of the business year, and the new accounting policy prescribed by the
Implementation Guidance on Accounting Standard for Fair Value Measurement will be applied in the future according to
the transitional treatment set forth in Article 27-2 of the Implementation Guidance on Accounting Standard for Fair Value
Measurement. This has no impact on the financial statements.
Notes on significant accounting estimates(Impairment of fixed assets)(1) Amounts recorded in the financial statements
for the business year
Impairment loss
1,149million yen
Tangible fixed assets
27,547million yen(2) Information to aid understanding of other estimates
In determining, recognizing, and measuring indications of impairment of fixed assets, future performance forecasts andfuture cash flow estimates are made based on future business plans and past cash flow performance.
These estimates may be affected by uncertain future market trends and other factors. If the actual amount differs fromthe estimate, it could have a significant impact on the impairment amount of fixed assets in the financial statements forthe following business year.

―81―Notes on the balance sheet
1. Accumulated depreciation of tangible fixed assets

43,064million yen

2. Monetary claims and obligations to affiliated companies (excluding those separately listed)
Short-term monetary claims
48million yen
Long-term monetary claims
269million yen
Short-term monetary obligations
886million yen
Long-term monetary obligations
9million yen*Short-term borrowings from affiliated companies separately listed are short-term monetary obligations for efficient fundmanagement and procurement within the Group through the cash management system (CMS).
Notes on the income statement
Transaction amounts with affiliated companies
Transaction amounts from business transactions
Net sales
Operating revenue
Purchases
Selling, general, and administrative
expenses
Transaction amounts from non-business
transactions

2million yen
950million yen
5,154million yen
3,069million yen
553million yen

Notes on the statement of changes in shareholders' equity
Types and number of treasury shares at the end of the business year
Common shares
6,033,951shares*The number of treasury shares at the end of the business year includes 87,156 shares held as trust assets under the executive
and employee stock benefit trusts.

―82―

Notes on tax effect accounting
Breakdown of the main causes of deferred tax assets and deferred tax liabilities
Deferred tax assets
Impairment loss
2,228million yen
Asset retirement obligation
948million yen
Reserve for retirement benefits
192million yen
Unpaid bonuses, etc.
445million yen
Reserve for points
19million yen
Contract liabilities
575million yen
Loss on evaluation of affiliated company shares
363million yen
Loss on inventory valuation
236million yen
Unpaid business tax, etc.
83million yen
Tax loss carried forward
635million yen
Others
233million yen
Deferred tax assets
Subtotal
5,962million yen
Valuation reserve for tax loss carried forward-million yen
Valuation reserve for the total future deductible(1,863)million yen
temporary differences, etc.
Valuation reserve Subtotal
Deferred tax assets
Total(1,863)million yen
4,099million yen

Deferred tax liabilities
Valuation difference on securities
Prepaid pension expenses
Fixed assets depreciation reserve
Removal costs corresponding to asset retirement
obligations(1,859)million yen(175)million yen(162)million yen(165)million yen

Deferred tax liabilities
Total
Net amount of deferred tax assets(2,362)million yen
1,737million yen―83―Notes on transactions with related parties
Subsidiaries(millions of yen)

Ownership(owned) ratio Relationship with
Name of company,
Attributeof votingrelated parties
etc.
rights, etc.

Subsidiaries

Welpark Co.,
Ltd.

SAVIA
Corporation

Details oftransactions

Ownership
Direct84.2％

CMS
Concurrent
positions ofexecutives

Interest
expenseOwnership
Direct100.0％

CMS
Concurrent
positions ofexecutives

Interest
expenseTransaction
amount00Account
Affiliatedcompany
short-termborrowings
Affiliatedcompany
short-termborrowings

Balance atthe end of the
term

2,678

2,119

Terms and conditions of transactions and policy for determining the terms and conditions
Notes: 1. CMS is a cash management system involving short-term fund lending and borrowing transactions within the Groupfor efficient fund management and procurement. The interest is determined considering market interest rates.
2. Transaction amounts do not include consumption tax, etc.
Notes on information per share
Net assets per share
Net loss per share for the current term

923.85 yen(31.62 yen)

Notes on significant subsequent events
The same content is stated in the Notes on significant subsequent events in the Consolidated Notes, so notes are omitted
here.

―84―