Note:

This document is a translation of the Japanese language original for convenience purposes only, and in the event of any
discrepancy, the Japanese language original shall prevail. The Company assumes no responsibility for this translation or for
direct, indirect or any other forms of damages arising from the translation.

Expanding the MMD system
to every corner of the world.

Every person takes the limits of their own fieldof vision for the limits of the world.
– Schopenhauer
Onaruto Bridge & the Naruto whirlpools, Tokushima Prefecture

Notice of the 42nd Ordinary
General Meeting of Shareholders
Date and Time:
10:00 a.m. on Thursday, June 27, 2024
(Reception scheduled to open at 9:00 a.m.)
Venue:“Prominence” Ballroom, B1F,
ANA InterContinental Tokyo
1-12-33 Akasaka, Minato-ku, Tokyo

Zensho Holdings Co., Ltd.
(Securities Code: 7550)

Proposal to be resolved
Proposal:

Election of 9 Directors (excluding
Directors who are Members of the
Audit & Supervisory Committee)

Deadline for Exercising Voting Rights by
Mail or via the Internet, etc.:
Delivery by 5:30 p.m. on Wednesday, June 26,
2024
There will be no souvenirs for our shareholders attending
the General Meeting of Shareholders this year.

To Our Shareholders

Representing the food service industry
originated in Japan, we will pursue
further growth to be the first to achieve
net sales exceeding 1 trillion yen.
We are dedicated to taking responsibility
for the stability and development of
human society.

Kentaro Ogawa
Representative Director, Chairman,
President & CEO
Zensho Holdings Co., Ltd.

Thank you for your continued kind support.

highest ever, as well as record highs in operating
profit and ordinary profit.
This fiscal year, we are on track to become thefirst food service company originated in Japan toachieve net sales exceeding 1 trillion yen. We willcontinue to pursue initiatives for further growth.
“Taking responsibility for the stability anddevelopment of human society.” This is the evolved
philosophy of the Zensho Group. The world has
become more unstable; however, we, through food,will contribute to the realization of a world in which
all people can live in a stable society.
We hope that you, our shareholders, will continue
to support us as partners in realizing our philosophy.

First of all, we would like to express our deepest
condolences to those who lost their lives in the Noto
Peninsula Earthquake that occurred in 2024, and ourheartfelt sympathy to all those who were affected bythis earthquake.
I would like to take this opportunity to address you
as you read this Notice of the 42nd (fiscal year ended
March 31, 2024) Ordinary General Meeting of
Shareholders.
Our business results for the fiscal year underreview were net sales of 965,778 million yen, the1Securities Code: 7550
June 6, 2024
To Shareholders with Voting Rights:
Kentaro Ogawa, Representative Director,
Chairman, President & CEO
Zensho Holdings Co., Ltd.
2-18-1 Konan, Minato-ku, Tokyo

Notice of the 42nd Ordinary General Meeting of Shareholders
Dear Shareholders:Thank you for your continued patronage and support.
Notice is hereby given that the 42nd Ordinary General Meeting of Shareholders of Zensho Holdings Co., Ltd.
(the “Company”) will be held for the purposes as described below.
In convening this General Meeting of Shareholders, measures for electronic provision of information are
implemented. The matters subject to the measures for electronic provision are posted on the following websites on
the Internet as the Notice of the 42nd Ordinary General Meeting of Shareholders.
The Company’s website
https://www.zensho.co.jp/en/ir/investor/shareholders.html
In addition to the website above, the Company also posts this information on the Tokyo Stock Exchange (TSE)’s
website. Please access the TSE’s website (TSE Listed Company Search) below, enter and search for the issue name(company name) or the securities code, select “Basic information” and “Documents for public inspection/PR
information,” in that order, and inspect the information.
TSE’s website
https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
If you are unable to attend the meeting, you may exercise your voting rights in writing or via the Internet, etc. In
either case, please complete the procedures such that the exercise of your voting rights arrives by 5:30 p.m. on
Wednesday, June 26, 2024, Japan time.
1.
2.

Date and time
Location

3.

Meeting Agenda
Matters to bereported

Proposal to beresolved:

Thursday, June 27, 2024, at 10:00 a.m. Japan time
“Prominence” Ballroom, B1F, ANA InterContinental Tokyo
1-12-33 Akasaka, Minato-ku, Tokyo
1. The Business Report, Consolidated Financial Statements, and results of audits by
the Accounting Auditor and Audit & Supervisory Committee of the Consolidated
Financial Statements for the 42nd fiscal year (April 1, 2023, to March 31, 2024)
2. Non-consolidated Financial Statements for the 42nd fiscal year (April 1, 2023, to
March 31, 2024)
Proposal
Election of 9 Directors (excluding Directors who are Members of the
Audit & Supervisory Committee)

 Regarding paper-based documents send to shareholders who have requested delivery of paper-based documents
Pursuant to the stipulations of laws and regulations and Article 16 of the Company’s Articles of Incorporation,
the following matters are not included in said documents.
The Audit & Supervisory Committee and the Accounting Auditor audit the documents subject to audit, which
include the following matters.

1(1) “Systems to Secure the Appropriateness of Operations,” “Operational Status of Systems to Secure theAppropriateness of Operations” and “Method for Determining Dividends of Surplus, etc.” of the Business
Report,(2) “Consolidated Statement of Changes in Shareholders’ Equity” and “Notes to Consolidated Financial
Statements” of the Consolidated Financial Statements(3) “Non-consolidated Statement of Changes in Shareholders’ Equity” and “Notes to the Non-consolidated
Financial Statements” of the Non-consolidated Financial Statements
In the event of any revisions to the matters subject to the measures for electronic provision, the revisions will be
posted on the respective website where they are posted.

2

Guide to the Exercise of Voting Rights
Please review the Reference Documents for the General Meeting of Shareholders and exercise your voting rights.
The following three methods are available for the exercise of voting rights.

If attending the General Meeting of
Shareholders

If mailing the Voting Rights Exercise Form
Exercise deadline: Wednesday, June 26, 2024,
at 5:30 p.m.
Please indicate your vote for or against the proposals
on the enclosed Voting Rights Exercise Form andreply such that it arrives by the exercise deadline.
If no indication of for or against is made on theForm, it will be treated as a vote for the proposals.

Date and time: Thursday, June 27, 2024,
at 10:00 a.m.
Please submit the enclosed Voting Rights Exercise
Form at the reception desk.

If exercising voting rights via the Internet
Exercise deadline: Wednesday, June 26, 2024, at 5:30 p.m.
Please access the Voting Rights Exercise Website (https://www.web54.net) designated by the Company andexercise your voting rights.
Entering voting rights exercise code and password
Voting Rights Exercise Website: https://www.web54.net
1. Please access the Voting Rights Exercise Website.
2. Please enter the “Voting Rights Exercise Code” indicated on the Voting Rights Exercise Form.
Enter the “Voting Rights Exercise Code”
Click “Login”
3. Please enter the “Password” indicated on the Voting Rights Exercise Form.
Enter the “Password” and set a new password that you will actually use.
Click “Register”
4. Indicate your vote for or against in accordance with the on-screen instructions.
“Smart Exercise” by reading the QR Code with a smartphone
You can login to the Voting Rights Exercise Website without entering a Voting Rights Exercise Code or
password.
1. Please read the QR Code provided on the bottom right of the Voting Rights Exercise Form.
* “QR Code” is a registered trademark of DENSO WAVE INCORPORATED.
2. Indicate your vote for or against in accordance with the on-screen instructions.
Voting rights may be exercised via “Smart Exercise” only once.
If changing your vote after you have exercised your voting rights, please access the Voting Rights Exercise
Website, login with the “Voting Rights Exercise Code” and “Password” indicated on the Voting Rights
Exercise Form and exercise your voting rights again.
Please contact the support desk below for any questions regarding the operation of a personal computeror smartphone for the exercise of voting rights via the Internet.
Dedicated line, Securities Agency Web Support, Sumitomo Mitsui Trust Bank
Phone number: 0120-652-031 (Toll free within Japan)(Hours of operation: 9:00 a.m. to 9:00 p.m.)

If voting rights are exercised multiple times, the last one to arrive at the Company will be deemed as the valid
vote.
Additionally, if voting rights are exercised via the Internet, etc. and voting rights exercised in writing arrive on
the same day, the voting rights exercised via the Internet, etc. will be deemed as the valid vote.
If voting rights are exercised multiple times via the Internet, etc., or if voting rights are exercised in duplicate
via personal computer and smartphone, the last vote to be exercised will be deemed as the valid vote.
To institutional investors:

Institutional investors may use the “Electronic Voting System Platform” operated
by ICJ, Inc. as a method of exercising voting rights.

3

Reference Documents for the General Meeting of Shareholders
Proposal

Election of 9 Directors (excluding Directors who are Members of the Audit & Supervisory
Committee)
The terms of office of all 9 Directors (excluding Directors who are Members of the Audit & Supervisory
Committee) will expire at the conclusion of this Ordinary General Meeting of Shareholders.
As a result, the Company proposes the election of the following 9 persons as Directors (excluding Directors who
are Members of the Audit & Supervisory Committee).
The candidates for Directors (excluding Directors who are Members of the Audit & Supervisory Committee) are
as follows.
Candidate
No.

Name

1

Reelection

Kentaro Ogawa

2
3
4
5

Reelection
Reelection
Reelection
Reelection

Yohei Ogawa
Shinya Nonoshita
Makoto Hirano
Kazumasa Ogawa

6

Reelection

Chiaki Ito7

Reelection

Takaharu Ando8

Reelection

Shoei Yamana

9

Reelection

Reiko Nagatsuma

Current position at the Company
Representative Director, Chairman,
President & CEO
Managing Executive Director
Managing Executive Director
Director
Director
OutsideIndependent
OutsideIndependent
OutsideIndependent
OutsideIndependent

4

Outside Director
Outside Director
Outside Director
Outside Director

Candidate No. 1

Reelection

Kentaro Ogawa
Born: July 29, 1948
▪ Term of office as
Director: 42 years (at theconclusion of this General
Meeting of Shareholders)▪ Number of theCompany’s shares held:
3,170,408 shares ofcommon stock• Past experience, positions, and responsibilities
June 1982
Established the Company, Representative Director andPresident
September 2000 Representative Director and President, the Company
Director and Chairman, Coco’s Japan Co., Ltd.
June 2007
Representative Director and President, the Company
Director and Chairman, Sunday Sun Co., Ltd. (currently JollyPasta Co., Ltd.)
June 2009
Representative Director, Chairman, President & CEO, theCompany (current position)
June 2021
Representative Director and President, Global MD Holdings
Co., Ltd.
October 2022
Representative Director and President, Nihon Retail Holdings
Co., Ltd.
• Significant concurrent positions
Chairman, Federation of National Livelihood Industries and Consumer
Organizations (Seidanren)
Representative Director, Nihon Create Co., Ltd.
President, Ogawa Kentaro Scholarship Foundation• Reasons for selection as a candidate for Director
Since founding the Company in 1982, he has demonstrated exemplary
management abilities and strong leadership for the past 40 years toward realizing
the vision “to eradicate hunger and poverty from the world,” and has grown theGroup to become Japan’s largest food service company. He has also expanded
the food service business overseas and is working to create the “top food service
company in the world” by expanding into the food retailing business and nursing
care business, etc. He has been selected as a candidate for Director to enable him
to support management into the future as the Company’s chief executive.

5

Candidate No. 2

Reelection

Yohei Ogawa
Born: August 30, 1979
▪ Term of office as
Director: 7 years (at theconclusion of this General
Meeting of Shareholders)▪ Number of theCompany’s shares held:
3,160,800 shares ofcommon stock• Past experience, positions, and responsibilities
April 2004
Joined Ministry of Finance
June 2016
Joined the Company; General Manager, Business Management
Strategy Office
Executive Officer and Senior General Manager, Group
Business Management Strategy Division, the Company
June 2017
Director and Senior General Manager, Group Business
Management Strategy Division, the Company
November 2018 Director and Senior General Manager, Group Business
Management Strategy Division, the Company
Chairman of the Board, Advanced Fresh Concepts Corp.
September 2020 Director, in charge of Global Business, and Senior General
Manager, Global Sushi Business Division, the Company
October 2020
Director and Senior General Manager, Business Management
Strategy Division, the Company
April 2021
Director and Senior General Manager, Global Operations
Division, the Company
June 2021
Managing Executive Director, Senior General Manager,
Business Management Strategy Division, Senior General
Manager, Global Operations Division, the Company
June 2023
Managing Executive Director, Senior General Manager,
Business Management Strategy Division, Senior General
Manager, Global Operations Division, the Company
Chairman, Zensho China Holdings Co., Ltd. (current position)
October 2023
Managing Executive Director, Senior General Manager,
Business Management Strategy Division, in charge of Global
Operations Division, the Company
November 2023 Managing Executive Director, Senior General Manager,
Business Management Strategy Division (current position), in
charge of Global Operations Division, in charge of Global
Sushi PMI Department, the Company (current position)• Significant concurrent positions
Chairman, Zensho China Holdings Co., Ltd.
• Reasons for selection as a candidate for Director
Based on his advanced insight and wealth of experience gained at the Ministryof Finance, he is overseeing the overall Global Business and is demonstrating his
abilities as the Director and Chairman of a U.S.-based sushi takeout company.
Currently, as the Senior General Manager of the Business Management Strategy
Division, he is working to promote the business integration of overseas sushi
takeout companies and advance the formulation of management strategies,
technology strategies, and rebranding in view of the entire Group’s future
expansion.
Based on a wealth of experience and knowledge of the Group, the Company
has determined that he can continue to contribute to the development of theGroup’s business and has thus selected him as a candidate for Director.

6

Candidate No. 3

Reelection

Shinya Nonoshita
Born: May 2, 1954
▪ Term of office as
Director: 5 years (at theconclusion of this General
Meeting of Shareholders)▪ Number of theCompany’s shares held:
17,869 shares of common
stock

Candidate No. 4

Reelection

Makoto Hirano
Born: December 2, 1958
▪ Term of office as
Director: 20 years (at theconclusion of this General
Meeting of Shareholders)▪ Number of theCompany’s shares held:
18,900 shares of common
stock• Past experience, positions, and responsibilities
April 1979
Joined IBM Japan, Ltd.
January 2005
Manager of eServer iSeries
April 2007
Joined the Company; Executive Officer and Senior General
Manager, Group IT Division
November 2018 Executive Officer and Senior General Manager, Group IT &Engineering Division, the Company
June 2019
Director and Senior General Manager, Group IT &Engineering Division, the Company
June 2021
Director and Senior General Manager, Group IT Division, theCompany
June 2022
Managing Executive Director and Senior General Manager,
Group IT Division, the Company (current position)• Reasons for selection as a candidate for Director
He has a wealth of knowledge and experience regarding information
technology (IT), and after joining the Company, he has worked to consistently
strengthen the Group’s IT sector based on this knowledge.
The Company has determined that he will continue to work toward creating
further synergies between IT, AI, and technology and contribute to business
transformation and growth through DX and has thus selected him as a candidate
for Director.
• Past experience, positions, and responsibilities
April 1982
Joined Nestlé Japan Ltd.
April 2001
Representative Director and President, Nestlé Purina PetCare
Ltd.
April 2004
Joined the Company
June 2004
Director, the Company
November 2005 Director and General Manager, Food Safety Pursuing
Department, the Company
October 2010
Director and Senior General Manager, Group Corporate
Communications Division, the Company
July 2013
Director and Senior General Manager, Food Safety Pursuing
Division, the Company
Representative Director and President, GFF Co., Ltd.
April 2018
Director, the Company
Representative Director and President, Zensho Factory
Holdings Co., Ltd.
February 2019 Director and Senior General Manager, Group Food Safety
Assurance Division, the Company
October 2023
Director and Senior General Manager, Group Food Safety
Standards Division, the Company (current position)• Reasons for selection as a candidate for Director
He has a wide range of experience and insight in operations concerning theCompany’s overall food safety management and has been advancing operations
based on this experience and insight as the person in charge of the Company’s
division supervising food safety.
The Company has determined that he can continue to contribute tostrengthening the Company’s structures in safety management for foods, and has
thus selected him as a candidate for Director.

7

Candidate No. 5

Reelection

Kazumasa Ogawa
Born: April 17, 1977
▪ Term of office as
Director: 15 years (at theconclusion of this General
Meeting of Shareholders)▪ Number of theCompany’s shares held:
3,160,800 shares ofcommon stock• Past experience, positions, and responsibilities
April 2001
Joined Nissho Electronics Corporation
May 2006
Joined the Company; Manager, Subsidiary Administration
OfficeJune 2009
Director, the Company
January 2013
Director and Senior General Manager, Global Operations
Division, the Company
June 2014
Managing Executive Director and Senior General Manager,
Global Operations Division, the Company
July 2018
Managing Executive Director and Senior General Manager,
Group Merchandising Division, the Company
May 2019
Managing Executive Director, the Company
Representative Director and President, Sukiya Co., Ltd.
June 2020
Director, Deputy President, the Company
Representative Director and President, Sukiya Co., Ltd.
April 2021
Director, Deputy President, the Company
Representative Director and President, Nihon Retail Holdings
Co., Ltd.
Representative Director and President, Joy Mart Co., Ltd.
October 2022
Director, Deputy President and President of Zensho Japanese
Culture Center, the Company (current position)
June 2023
Director, the Company (current position)• Reasons for selection as a candidate for Director
Since joining the Company in 2006, he has strongly promoted global store
expansion, and has contributed to the development of the overseas business.
Subsequently, he has contributed to improving business results as the person
responsible for the Company’s mainstay Sukiya business and retail businesswhile working to further improve brand recognition as the executive responsiblefor design. He is currently working to preserve and develop Japanese culture
both in Japan and overseas as President of Zensho Japanese Culture Center basedon this experience and insight.
Based on his wealth of experience and insight into the Group, the Company
has determined that he can contribute to the development of the Group’sbusiness into the future and has thus selected him as a candidate for Director.

8

Candidate No. 6

Reelection
OutsideIndependent

Chiaki Ito
Born: October 10, 1947
▪ Term of office as Outside
Director: 9 years (at theconclusion of this General
Meeting of Shareholders)▪ Number of theCompany’s shares held:
0 shares• Past experience, positions, and responsibilities
April 1970
Joined Fujitsu Limited
June 2002
Corporate Vice President and Group President, Personal
Systems Business Group
June 2004
Member of the Board, Corporate Executive Vice President,
and responsible for Products Division
June 2006
Corporate Senior Executive Vice President and Representative
Director
June 2008
Member of the Board and Vice Chairman
April 2010
Representative Director and Chairman, Fujitsu ResearchInstituteJune 2013
Outside Director, Hitachi Zosen Corporation
June 2015
Outside Director, the Company (current position)
Outside Director, OBIC Business Consultants Co., Ltd.
(current position)• Significant concurrent positions
Outside Director, OBIC Business Consultants Co., Ltd.
• Reasons for selection as a candidate for Outside Director and expected roles
In addition to a wealth of technological knowledge and experience in theinformation telecommunications technology sector at Fujitsu Limited, he also
has a wealth of experience and wide insight as a corporate manager. While theCompany expects him to provide advice based on such insight, he has not only
provided appropriate opinions and advice at meetings of the Board of Directors,
but has also offered useful advice on business transformation and growththrough DX, such as providing the Company with the latest information in thefield of IT and DX. Thus, the Company has selected him as a candidate for
Outside Director.
The Company expects that he will continue to contribute to enriching andstrengthening areas such as corporate governance and technological innovation
while providing supervision and oversight of the Company’s management froman independent standpoint for the improvement of corporate value over the
medium to long term.

9Candidate No. 7

Reelection
OutsideIndependent

Takaharu Ando
Born: August 31, 1949
▪ Term of office as Outside
Director: 7 years (at theconclusion of this General
Meeting of Shareholders)▪ Number of theCompany’s shares held:
0 shares• Past experience, positions, and responsibilities
April 1972
Joined National Police Agency
August 1999
General Manager, Public Security Bureau, Tokyo
Metropolitan Police Department
August 2004
Commissioner, General’s Secretariat, National Police Agency
June 2009
Commissioner General
May 2013
Outside Director, Nitori Holdings Co., Ltd.
June 2016
Outside Director, Amuse Inc. (current position)
June 2017
Outside Director, the Company (current position)
June 2018
Outside Director, Tobu Railway Co., Ltd. (current position)
May 2020
Outside Director (Audit & Supervisory Committee Member),Nitori Holdings Co., Ltd.
June 2022
Outside Director (Member of the Audit & Supervisory
Committee), Nisshin Seifun Group Inc. (current position)
March 2023
Outside Director, Rakuten Group, Inc. (current position)• Significant concurrent positions
Outside Director, Amuse Inc.
Outside Director, Tobu Railway Co., Ltd.
Outside Director (Member of the Audit & Supervisory Committee), Nisshin
Seifun Group Inc.
Outside Director, Rakuten Group, Inc.
• Reasons for selection as a candidate for Outside Director and expected roles
He has served in important positions such as Commissioner General of the
National Policy Agency and has a wealth of experience and wide insights.
Although he has not been involved in corporate management other than as an
outside officer, while the Company expects him to provide advice based on his
professional experience and knowledge, he has expressed his opinions
appropriately as a member of the Nomination and Compensation Committee andprovided useful advice on management. Thus, the Company has selected him asa candidate for Outside Director.
The Company expects that he will continue contributing to enriching andenhancing corporate governance, compliance, and risk management whileproviding supervision and oversight of the Company’s management from an
independent standpoint as a member of the Nomination and Compensation
Committee for the improvement of corporate value over the medium to long
term.

10

Candidate No. 8

Reelection
OutsideIndependent

Shoei Yamana
Born: November 18, 1954
▪ Term of office as Outside
Director: 1 year (at theconclusion of this General
Meeting of Shareholders)▪ Number of theCompany’s shares held:
0 shares• Past experience, positions, and responsibilities
April 1977
Joined Minolta Camera Co., Ltd. (currently Konica Minolta,
Inc.)
July 2002
Executive Officer and General Manager of Management
Planning Div., Planning Headquarters, Minolta Co., Ltd.
(currently Konica Minolta, Inc.)
August 2003
Senior Executive Officer, Konica Minolta Holdings, Inc.
(currently Konica Minolta, Inc.)
June 2006
Director and Senior Executive Officer, Konica Minolta
Holdings, Inc. (currently Konica Minolta, Inc.)
April 2013
Director and Senior Managing Executive Officer, Konica
Minolta, Inc.
April 2014
Director, President and CEO, and Representative Executive
Officer, Konica Minolta, Inc.
April 2022
Director, Executive Chairman and Executive Officer, Konica
Minolta, Inc.
June 2022
Outside Director, TDK Corporation (current position)
June 2023
Outside Director, the Company (current position)• Significant concurrent positions
Outside Director, TDK Corporation• Reasons for selection as a candidate for Outside Director and expected roles
Having served as a representative of Konica Minolta, Inc., he has a wealth ofexperience and wide insight as a corporate manager at a company that has
expanded its business globally. The Company expects him to make use of thisexperience and insight to offer advice and suggestions in order to oversee theCompany’s management in general and ensure the legality and appropriatenessof decision-making by the Board of Directors. Thus, the Company has selected
him as a candidate for Outside Director.
The Company expects that he will contribute to strengthening the world-wide
management structure while providing supervision and oversight of theCompany’s management from an independent standpoint for the improvement ofcorporate value over the medium to long term.

11Candidate No. 9

Reelection
OutsideIndependent

Reiko Nagatsuma
Born: October 16, 1974
▪ Term of office as Outside
Director: 1 year (at theconclusion of this General
Meeting of Shareholders)▪ Number of theCompany’s shares held:
0 shares• Past experience, positions, and responsibilities
April 1998
Joined Kokusai Denshin Denwa Co., Ltd. (currently KDDI
Corporation)
April 2001
Joined Tokyo FM Broadcasting Co., Ltd.
July 2003
Joined Microsoft Japan Company, Limited
April 2009
Joined Amazon Japan G.K.
March 2018
General Manager, Seller Service Business Division, Amazon
Japan G.K.
November 2021 Managing Director, Twitter Japan
March 2023
External Director, Medley, Inc. (current position)
June 2023
Outside Director, the Company (current position)• Significant concurrent positions
External Director, Medley, Inc.
• Reasons for selection as a candidate for Outside Director and expected roles
Having served at global IT corporations for many years, she has worked
towards furthering networking and digital services and possesses advanced
insight into the fields of IT and DX. In addition, she has experience as acorporate manager from her participation in management as Managing Directorof Twitter Japan. The Company has determined that she will make use of thisexperience and insight to offer useful advice on business transformation and the
expansion of business areas for the Group companies, and has thus selected her
as a candidate for Outside Director.
The Company expects that she will contribute to enriching and strengthening
technological innovation while providing supervision and oversight of theCompany’s management from an independent standpoint for the improvement ofcorporate value over the medium to long term.

(Notes) 1. Mr. Kentaro Ogawa is Chairman of the Federation of National Livelihood Industries and Consumer
Organizations, which has transactions with the Company in real estate leasing and other areas. He is
also President of the Ogawa Kentaro Scholarship Foundation, which has transactions with theCompany including outsourcing operations for administrative processing. There are no significant
conflicts of interest between the Company and any of the other candidates.
2. Mr. Chiaki Ito, Mr. Takaharu Ando, Mr. Shoei Yamana, and Ms. Reiko Nagatsuma are candidates for
Outside Directors.
3. Based on the stipulations of Article 427, Paragraph 1 of the Companies Act, the Company has
concluded agreements to limit liabilities for damages of Article 423, Paragraph 1 of the same Act with
Mr. Chiaki Ito, Mr. Takaharu Ando, Mr. Shoei Yamana, and Ms. Reiko Nagatsuma. The limit ofliabilities for damages under said agreements are 10 million yen or the amount stipulated by laws andregulations, whichever is greater. If Mr. Chiaki Ito, Mr. Takaharu Ando, Mr. Shoei Yamana, and Ms.
Reiko Nagatsuma are reelected, the Company plans to continue the agreements with each person.
4. The Company has concluded a directors and officers liability insurance (D&O Insurance) contract
stipulated in Article 430-3, Paragraph 1 of the Companies Act that provides coverage for all Directors,
and the insurance covers any damages that may result from the Directors and Officers being liable forthe performance of their duties or being subject to a claim for the pursuit of such liability. Eachcandidate will be included in the coverage for said contract. The contract is scheduled to be renewedwith the same content upon the next renewal.
5. Matters concerning candidates for Outside Directors are as follows.
(1) The Company has designated Mr. Chiaki Ito, Mr. Takaharu Ando, Mr. Shoei Yamana, and Ms.
Reiko Nagatsuma as Independent Officers based on the stipulations of the Tokyo Stock Exchange. If
their reelections are approved, the Company plans to designate them as Independent Officers.
(2) Concerning responses to inappropriate business execution at other companies within the past fiveyears
Mr. Takaharu Ando served as Outside Director of Nitori Holdings Co., Ltd. from May 2013 to May
2022, but it was discovered that some diatomaceous earth products sold at stores of said groupbetween December 2016 and December 2020 contained asbestos in excess of standards establishedby laws and regulations, leading to a voluntary recall.
Although Mr. Takaharu Ando was not previously aware of these facts, he had been appropriately

12

providing advice from the viewpoint of the importance of compliance with laws and regulations andcompliance management in the Board of Directors, etc., and after said facts were discovered, herequested reports from Directors and announced opinions to prevent recurrence, appropriately
fulfilling his duties.

Opinion of the Audit & Supervisory Committee
An overview of the opinion of the Audit & Supervisory Committee regarding the selection and compensation,etc., of Directors is as follows.
Deliberations have been made in the Nomination and Compensation Committee, comprised of a majority of
Outside Directors, on whether or not each candidate is appropriate to serve as Director based on factors such as
knowledge, experience, and abilities, and one Outside Audit & Supervisory Committee Member participates in the
deliberations as a member of the Nomination and Compensation Committee. Upon consideration by the Audit &Supervisory Committee of the results of the content of deliberation in the Nomination and Compensation
Committee, it has been determined that nomination procedures were conducted appropriately, and each candidate issuited to serve as Director of the Company. Additionally, upon by the Audit & Supervisory Committee of theresults of the content of deliberation concerning compensation, etc., of Directors (excluding Directors who areMembers of the Audit & Supervisory Committee) in the Nomination and Compensation Committee, it has been
determined that determination procedures were conducted appropriately, and the content of compensation, etc., isappropriate as the amounts of compensation, etc., correspond to the duties, responsibilities, and results of each
Director (excluding Directors who are Members of the Audit & Supervisory Committee).

13

[Reference] Specialties and experience for each candidate in Proposal (Skill matrix)
Having experience as a representative director of the Company or a company
outside the Group.
Corporate management
Having the ability to strongly promote the sustainable growth and developmentof the Company’s business.
Knowledgeable in marketing and store development and has extensive
Marketing and store
experience in these areas.
development
Having the ability to formulate strategies by understanding the businessenvironment and consumer preferences accurately.
Knowledgeable in manufacturing and quality management and has extensive
Manufacturing and quality
experience in these areas.
management
Having the ability to pursue and secure solid safety, security, and quality.
Knowledgeable in IT and technology and has extensive experience in theseareas.
IT and technology
Having the ability to promote technological innovation and DX to build astable foundation for business.
Knowledgeable in finance and accounting and has extensive experience inthese areas.
Accounting and financeHaving the ability to ensure the stability and improvement of the revenue basis
and financial soundness.
Knowledgeable in personnel, labor management, etc., and has extensive
Personnel, labor, and humanexperience in these areas.
resource development
Having the ability to assess the potential of employees and manage a diverse
workforce.
Knowledgeable in legal issues, compliance, etc., and has extensive experience
Legal, compliance, and riskin these areas.
management
Having the ability to ensure compliance with laws and regulations and promote
loss cost reduction.
GlobalHaving overseas experience and can manage from a global perspective.
* Based on the above framework, up to three main skills that each candidate possesses are marked with an“X.”
Independent

Director
X
X
X
X

Name

Kentaro
Ogawa
Yohei
Ogawa
ShinyaNonoshita
MakotoHiranoKazumasa
Ogawa
ChiakiIto
Takaharu
Ando
Shoei
YamanaReiko
Nagatsuma

Specialties and experience (Skill matrix)
Personnel,
Legal,
Marketing Manufacturinglabor, andCorporate
IT and Accounting
compliance,and store
and quality
human
Globalmanagement
technology and financeand riskdevelopment management
resource
management
development
X

X

X

X

X

X

X
X

X

X

X

X

X

X

X

X
X

X

X

X

X

X

X
X

X

14

Business Report (April 1, 2023, to March 31, 2024)
1. State of the Corporate Group(1) Status of business for the fiscal year under review
1) Progress and results of businessIn the fiscal year under review (from April 1, 2023, to March 31, 2024), consolidated businessperformance was net sales of 965,778 million yen (up 23.8% year-on-year), operating profit of 53,707
million yen (up 147.1% year-on-year), ordinary profit of 50,913 million yen (up 81.3% year-on-year), andprofit attributable to owners of parent of 30,693 million yen (up 131.4% year-on-year).
The business environment surrounding the Company continued to be uncertain, affected by factors
including the weak yen and soaring raw material and energy prices.
Meanwhile, the lifting of movement restrictions in place due to COVID-19 led to a normalization of
economic activity, with foot traffic and personal consumption showing signs of recovery. In the restaurant
industry as well, demand was on the rise.
Under these circumstances, year-on-year same store sales in each reporting segment were: up 14.9% in
Global Sukiya, up 9.3% in Global Hamasushi, up 13.4% in Global Fast Food, up 20.4% in Restaurants, anddown 1.4% in Retail.
As of the end of the fiscal year under review, the number of stores was 15,109 (including 7,922 franchised
stores).
Net sales
965,778 million yen
Up 23.8 % year on year

Operating profit
53,707 million yen
Up 147.1 % year on year

Ordinary profit
50,913 million yen
Up 81.3 % year on year

Profit attributable to owners of parent
30,693 million yen
Up 131.4 % year on year

An overview by segment is as stated on pages 16 to 23.

15

The figure above shows the logos of significant subsidiaries and businesses of the Group.

16

Global Sukiya
Net sales:

265,341 million yen(up 18.6% year on year)

Operating profit: 18,507 million yen(up 252.7% year on year)

Net sales of Global Sukiya during the fiscal year under review were 265,341million yen (up 18.6% year-on-year)with operating profit of 18,507million yen (up 252.7% year-on-year).
Sukiya has locations in Japan, China, Southeast Asia, and Central and South America, providing its mainstay
Gyudon to families and groups with safety, good flavor, and reasonable pricing.
At domestic Sukiya, the Company provided “Gyudon with Cod Caviar Mayo & Cheese,” “Sukiyaki Style
Gyudon with Raw Egg,” and “Okonomiyaki Style Gyudon with Soft-Boiled Egg,” among others, and at Sukiya in
China, menu items included “Canola Flower Gyudon” and “Mala Spice Green Bean Gyudon.”
Additionally, the number of stores in this reporting segment as of the end of the fiscal year under review was
2,632 (1,957 domestic, 675 overseas), the result of 103 store openings and 84 closures.

Sukiya, Shimonagaya

Sukiya, Promenade, Thailand

17

Global Hamasushi
Net sales:

197,058 million yen(up 16.3% year on year)

Operating profit: 11,417 million yen(up 35.5% year on year)

Net sales of Global Hamasushi during the fiscal year under review were 197,058 million yen (up 16.3% year-onyear) with operating profit of 11,417 million yen (up 35.5% year-on-year).
Hamasushi has locations mainly in Japan and China, providing menu items such as sushi, prepared with fresh
seafood, alongside side menu items including noodles, desserts, and drinks. These foods are enjoyed by everyone,from children to adults.
Additionally, the number of stores in this reporting segment as of the end of the fiscal year under review was 667(605 domestic, 62 overseas), the result of 56 store openings and 2 closures.

Hama-sushi, Totsuka Hirado

Hama-sushi, Central Bailian Shopping Center (China)

18

Global Fast Food
Net sales:

243,761 million yen(up 57.2% year on year)

Operating profit: 13,969 million yen(up 90.7% year on year)

Net sales of Global Fast Food during the fiscal year under review were 243,761 million yen (up 57.2% year-onyear) with operating profit of 13,969 million yen (up 90.7% year-on-year).
Nakau mainly provides oyakodon rice bowl dishes and Kyoto style udon noodles, with product offerings that cancompete with specialty restaurants. Also domestically, the Company has restaurants such as Lotteria, a hamburger
restaurant chain that joined the Group on April 1, 2023, Katsuan, a tonkatsu specialty restaurant, and Kyubeiya,
which serves Musashino style udon noodles. This reporting segment also includes overseas companies such as
Advanced Fresh Concepts Corp., (AFC) which provides sushi takeout, Sushi Circle Gastronomie GmbH, which
joined the Group on May 23, 2023, SnowFox Topco Limited, which joined the Group on September 15, 2023, andTCRS Restaurants Sdn. Bhd., a halal certified chicken rice specialty restaurant.
Additionally, the number of stores in this reporting segment as of the end of the fiscal year under review was
10,472 (994 domestic, 9,478 overseas; including 7,845 franchises), the result of 789 store openings and 313
closures.

Lotteria, Ochanomizu Ekimae

ZENSHI, New Brand of AFC

19

Restaurants
Net sales:

140,750 million yen(up 20.1% year on year)

Operating profit: 7,418 million yen(Operating loss of 448 million yen in 41st FY)

Net sales of Restaurants during the fiscal year under review, were 140,750 million yen (up 20.1% year-on-year)with operating profit of 7,418 million yen (operating loss of 448 million yen in the previous fiscal year).
Coco’s, a standard restaurant chain, has made efforts to improve its business performance by enhancing productcompetitiveness through active introduction of fair menus with a focus on seasonality, pursuing authentic taste
rivaling specialty restaurants, and improving the standard of services to enable to customers enjoy meals withsatisfaction. This reporting segment also includes Jolly Pasta, a pasta specialty restaurant chain, Big Boy, a chain of
hamburger steak and steak restaurants, Jukusei Yakiniku Ichiban, a barbeque chain that offers carefully selected
beef, OLIVE HILL, an Italian cuisine specialty restaurant chain, and Hanaya Yohei, a Japanese cuisine chain.
Additionally, the number of stores in this reporting segment as of the end of the fiscal year under review was
1,189 (1,188 domestic, 1 overseas; including 77 franchises), the result of 20 store openings and 35 closures.

Hamburg Steak & Beef Stew Foil Pack, Coco’s

Tomato Spaghetti w/ Mozzarella Cheese, Squid Ink
Sauce Spaghetti, and Bruschetta with Lemon Flavored
Carottes Râpées, OLIVE HILL

20

Retail
Net sales:

78,429 million yen(up 0.3% year on year)

Operating profit: (924) million yen(Operating loss of 2,294 million yen in 41st FY)

Net sales of Retail during the fiscal year under review, were 78,429 million yen (up 0.3% year-on-year) with anoperating loss of 924 million yen (operating loss of 2,294 million yen in the previous fiscal year). The operating
loss contracted as a result of revisions to management structures and suppliers.
This reporting segment includes Maruya and Joy Foods, supermarkets with locations primarily in the North
Kanto area, and United Veggies Co., Ltd. which operates fruit and vegetables stores.
Additionally, the number of stores in this reporting segment as of the end of the fiscal year under review was 132,
the result of 2 store openings and 2 closures.

Joy Foods

Saikazen of United Veggies Co., Ltd.

21

Corporate and Support
Net sales:

4,456 million yen(up 19.7% year on year)

Operating profit: 3,948 million yen(up 12.4% year on year)

Net sales of Corporate and Support during the fiscal year under review were 4,456 million yen (up 19.7% yearon-year) with operating profit of 3,948 million yen (up 12.4% year-on-year).
This reporting segment includes GFF, which manufactures and processes food, Global Fresh Supply Co., Ltd.,
which handles logistics functions, and Global Table Supply Co., Ltd., which procures uniforms, equipment, etc.

GFF

Global Fresh Supply Co., Ltd.

22

Others
Net sales:

35,979 million yen(up 10.8% year on year)

Operating profit: (605) million yen(Operating loss of 157 million yen in 41st FY)

Net sales of Others during the fiscal year under review, were 35,979 million yen (up 10.8% year-on-year) with anoperating loss of 605 million yen (operating loss of 157 million yen in the previous fiscal year).
This segment includes Tolona Japan Co., Ltd., which sells frozen foods for home use, etc., Sanbishi Co., Ltd.,
which manufactures and sells soy sauce and dressing, etc., Kagayaki Co., Ltd., which operates the nursing business,
and Zensho Rice Co., Ltd., which sells unpolished and polished rice.

Tolona Japan Co., Ltd.’s “Gyudon ingredients”

Sanbishi Co., Ltd.’s Hama-sushi brand soy sauce＆
Ponzu

23

2) Status of capital investment
Capital investment during the fiscal year under review consisted of 971 new store openings across theGroup and renovation of existing stores.
The total amount of capital investment for the corporate group during the fiscal year under review was
64,126 million yen.
3) Status of funding
Primarily as facilities investment and operating funds, 145,925 million yen in funding was procured fromfinancial institutions, etc., during the fiscal year under review.
In addition, the Company raised 30.0 billion yen from Development Bank of Japan Inc. and Mizuho Bank,
Ltd. through a third-party allotment of new shares by issuing Class A preferred shares with a payment date of
September 29, 2023.
On December 11, 2023, the Company issued 5,218,000 shares of common stock in a public offering,raising 36,445 million yen. Moreover, on January 10, 2024, the Company issued 652,400 shares of common
stock through a third-party allotment, raising 4,556 million yen.
4) Status of business transfer, absorption-type splits, or incorporation-type splits
No applicable items.
5) Status of business transfers from other companies
No applicable items.
6) Status of continuation of rights and obligations concerning businesses of other companies, etc., owing toabsorption-type mergers or absorption-type demergers
No applicable items.
7) Status of acquisition or disposal of stock or holdings in other companies or stock acquisition rights, etc.
(a) Zensho Fast Food Holdings Co., Ltd., a wholly-owned subsidiary of the Company, acquired all shares ofLotteria Co., Ltd. on April 1, 2023, making it a wholly-owned subsidiary.
(b) Zensho Europe Holdings B.V., a wholly-owned subsidiary of the Company, acquired all shares of Sushi
Circle Gastronomie GmbH on May 23, 2023, making it a wholly-owned subsidiary.
(c) ZENSHO INTERNATIONAL LIMITED, a wholly-owned subsidiary of the Company, acquired allshares of SnowFox Topco Limited on September 15, 2023, making it a wholly-owned subsidiary.

24

(2) Status of assets and income

Category

39th fiscal year
(Fiscal year ended
March 31, 2021)
595,048
12,21540th fiscal year
(Fiscal year ended
March 31, 2022)
658,503
23,117

41st fiscal year
(Fiscal year ended
March 31, 2023)
779,964
28,081(Million yen)
42nd fiscal year
(Fiscal year ended
March 31, 2024)
965,778
50,913

Net sales
Ordinary profit
Profit attributable to
2,259
13,86913,26530,693owners of parent
Basic earnings per
14.82
91.17
87.30
195.41share (Yen)
Total assets
396,023
427,172
469,563
748,056
Net assets
85,430104,486
115,837
214,652
Net assets per share
560.87679.19761.63
1,171.76(Yen)(Notes) 1. Effective from the 40th fiscal year, the “Accounting Standard for Revenue Recognition” (ASBJ
Statement No. 29, March 31, 2020) and others have been applied, and the figures for the status ofassets and income from the 40th fiscal year onward are those after the application of said Standard
and others.
2. “Board Benefit Trust (BBT)” has been introduced from the 41st fiscal year. For the 41st fiscal year
and subsequent fiscal years, in the calculation of net assets per share, the Company shares held byJapan Custody Bank, Ltd. (Trust Account E) as trust assets for the Trust are included in the numberof treasury shares deducted from the number of shares issued and outstanding at the end of the fiscal
year, while in the calculation of basic earnings per share, those are included in the number oftreasury shares deducted from the average number of shares outstanding during the period.
3. Effective from the 42nd fiscal year, the “Accounting Standard for Current Income Taxes” (ASBJ
Statement No. 27, October 28, 2022) and others have been applied, and the figures for the state ofassets and income for the 42nd fiscal year are those after the application of said Standard and others.

25(3) Status of significant parent companies and subsidiaries
1) Status of parent company
No applicable items.
2) Status of significant subsidiaries
Company name
Zensho Fast Food Holdings
Co., Ltd.
Sukiya Co., Ltd.
Nakau Co., Ltd.
Lotteria Co., Ltd.

Number ofstoresHoldingratio

CapitalMinato-ku, Tokyo

10 million yen

100.00%1,957 Minato-ku, Tokyo
455 Minato-ku, Tokyo
351 Minato-ku, Tokyo

10 million yen
10 million yen
8 million yen

100.00%100.00%100.00%-

Minato-ku, Tokyo

10 million yen

100.00%

Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo

10 million yen
10 million yen
10 million yen
10 million yen
100 million yen
10 million yen
10 million yen

100.00%100.00%100.00%100.00%100.00%100.00%100.00%

Minato-ku, Tokyo

85 million yen

100.00%Joy Mart Co., Ltd.

101 Kasukabe-shi, Saitama

10 million yen

100.00%

United Veggies Co., Ltd.

31 Minato-ku, Tokyo

74 million yen

83.98%

Zensho Restaurant Holdings
Co., Ltd.
Coco’s Japan Co., Ltd.
Jolly-Pasta Co., Ltd.
Big Boy Japan Co., Ltd.
TAG-1 Co., Ltd.
Hanaya Yohei Co., Ltd.
Olive Hill Co., Ltd.
Hama-Sushi Co., Ltd.
Nihon Retail Holdings Co.,Ltd.

-

Headquarters location

511
318
172
95
35
54
605
-

Key business
content
Fast food businesssupervision
Restaurants
Restaurants
Restaurants
Family dining
businesssupervision
Restaurants
Restaurants
Restaurants
Restaurants
Restaurants
Restaurants
Restaurants
Retail businesssupervision
Sale of groceries,
etc.
Sale of fresh foods,
etc.
Food production
businesssupervision
Manufacture offoods
Sale of groceries,
etc.
Import andwholesale of foodingredients
Purchase of foodingredients

Zensho Factory Holdings
Co., Ltd.

-

Minato-ku, Tokyo

60 million yen

100.00%GFF Co., Ltd.

-

Minato-ku, Tokyo

10 million yen

100.00%Tolona Japan Co., Ltd.

-

Minato-ku, Tokyo

10 million yen

100.00%Zensho Tradings Co., Ltd.

-

Minato-ku, Tokyo

80 million yen

100.00%-

Minato-ku, Tokyo

377 million yen

100.00%-

Minato-ku, Tokyo

30 million yen

100.00% Sale of utensils, etc.

-

Minato-ku, Tokyo

70 million yen

100.00% Logistics businessNihon Kaigo Holdings Co.,Ltd.

-

Minato-ku, Tokyo

10 million yen

Zensho USA Corporation-

California, USA

10 thousand US dollars

Advanced Fresh Concepts
Corp.

4,893 California, USA

100 thousand US dollars

Pocino Foods Company-

California, USA

28,904 thousand US
dollars-

Shanghai, China

650,049 thousand yuan

490 Shanghai, China

257,861 thousand yuan

100.00% Restaurants

79 Taipei, Taiwan

552,400 thousand yuan

100.00% Restaurants

Global MD Holdings Co.,Ltd.
Global Table Supply Co.,Ltd.
Global Fresh Supply Co.,Ltd.

Zensho China Holdings Co.,Ltd.
Zensho Restaurant(Shanghai) Co., Ltd.
Zensho Taiwan Co., Ltd.
ZENSHO SOUTH EASTASIA HOLDINGS PTE.
LTD.
ZENSHO HOLDINGSMALAYSIA SDN. BHD.
TCRS Restaurants Sdn. Bhd.
Zensho Europe Holdings
B.V.

Nursing care
100.00% businesssupervision
USA business100.00%supervision
100.00% Sale of groceries
Food processing
and sales
China business100.00%supervision
100.00%145,924 thousand
Singapore dollars

100.00%

Kuala Lumpur, Malaysia

309,065 thousand ringgits

100.00%185 Kuala Lumpur, Malaysia
Amsterdam, The
Netherlands

17,180 thousand ringgits-

Singapore-26

1 euroASEAN businesssupervision

Malaysia businesssupervision
100.00% Restaurants
Europe business100.00%supervisionCompany nameSushi Circle Gastronomie
GmbH
SnowFox Topco Limited

Number ofstoresHeadquarters location

275 Germany
3,911 UK

CapitalHoldingratio

Key business
content

1,000 thousand euros

100.00% Sale of groceries

556 thousand pounds

100.00% Sale of groceries(Notes) 1. The number of stores for each company is current as of the end of the fiscal year.
2. Holding ratio for Zensho Fast Food Holdings Co., Ltd. is the ratio of stock including stock held bysubsidiaries of the Company.
3. Holding ratios for Sukiya Co., Ltd., Nakau Co., Ltd., Lotteria Co., Ltd., Coco’s Japan Co., Ltd., JollyPasta Co., Ltd., Big Boy Japan Co., Ltd., TAG-1 Co., Ltd., Hanaya Yohei Co., Ltd., Olive Hill Co.,
Ltd., Joy Mart Co., Ltd., United Veggies Co., Ltd., GFF Co., Ltd., Advanced Fresh Concepts Corp.,
Pocino Foods Company, Zensho Restaurant (Shanghai) Co., Ltd., ZENSHO HOLDINGSMALAYSIA SDN.BHD., TCRS Restaurants Sdn. Bhd., Sushi Circle Gastronomie GmbH, andSnowFox Topco Limited are ratios of stock held by subsidiaries of the Company.
4. Apart from headquarters, GFF Co., Ltd. has manufacturing plants in the following locations.
Uruma-shi, Okinawa; Tosu-shi, Saga; Shunan-shi, Yamaguchi; Kasai-shi, Hyogo; Osaka-shi;
Komono-cho, Mie-gun, Mie; Kawasaki-shi; Asahi-shi, Chiba; Kisarazu-shi, Chiba; Kamisato-cho,
Kodama-gun, Saitama; Tsuchiura-shi, Ibaraki; Sano-shi, Tochigi; Oyama-shi, Tochigi; Shiogama-shi,
Miyagi; Sendai-shi; Otaru-shi, Hokkaido
5. On April 1, 2024, Zensho Fast Food Holdings Co., Ltd. and Zensho Restaurant Holdings Co., Ltd.
changed their names to Zensho Global Fast Food Holdings Co., Ltd. and Zensho Global Restaurant
Holdings Co., Ltd., respectively.

27

(4) Issues to be addressed
The Group is developing a wide range of food businesses under the management vision “to eradicate hunger
and poverty from the world,” and is expanding globally with the mission of “providing safe and delicious food ataffordable prices to people throughout the world.” The outlook for the food industry in Japan and overseas is not
optimistic due to changing consumption trends, diversifying needs, and intensifying competition with othercompanies. In order to achieve further growth, the Group recognizes the need to strengthen and expand existing
businesses and develop overseas operations to establish a stronger management basis and improve its market
competitiveness, and will address the following issues:
1) Evolution of the Mass Merchandising System (MMD)
In order to ensure that customers can enjoy safe and delicious products with peace of mind, the Group has
continued to ensure safety through MMD, while expanding its operations and pursuing group synergies
with the aim of improving business performance. In addition, in consideration of the accelerated pace ofoverseas store openings, we will strengthen our procurement network through overseas bases, whilepursuing food safety, improving product quality, and improving costs.
* Mass Merchandising System (MMD)
MMD is a system to fulfill our mission of “providing safe and delicious food at affordable prices topeople throughout the world,” in which we plan, design, and operate the entire process fromprocurement of raw materials to manufacturing, processing, distribution, and sales in our stores with
our own hands.
2) Pursuit of food safety
The Group places the highest priority on providing safe food to our customers. Based on CODEX
standards (global standards for food safety), the Group Food Safety Standards Division sets our own
standards, provides food safety education to all employees, and provides food safety information to our
suppliers and business partners.
In the entire food chain of procurement, manufacturing, logistics, and sales, the traceability of food safety
is guaranteed through the completion of food safety management by each group company.
In addition, the safety of raw materials, packaging materials, and products is guaranteed by analyzing andinspecting hazards (factors that hinder health) at our Central Research Center and Microbiology Testing
Center.
3) Evolution of brands
The Group will strive to evolve our brands in all aspects to meet the ever-evolving needs of ourcustomers and to respond to their diverse lifestyles, and to provide products, services, and customer
experiences that consistently exceed their expectations.
4) Sustainability initiatives
Since its establishment, the Group has been committed to its management vision to “eradicate hunger andpoverty from the world,” aiming to realize a sustainable world through a stable supply of safe anddelicious food. Based on this vision, we started fair trade in coffee and tea in 2007, and are currently
engaged in social development support activities in 20 countries in Asia and Africa, such as school
construction, improvement of water supply facilities, and support for women, using “social development
funds” generated from fair trade. We also take responsibility for the impact of our business activities on
the global environment. In addition to issues such as conservation of eel resources and utilization of foodresidues, we will take action to ensure the sustainability of our business areas and the sustainability of the
global environment itself, including the use of natural energy such as installation of solar panels in ourstores and factories.
5) Growth through store openings and M&A
We will continue to proactively open new stores in Japan and overseas to enhance the profitability of ourbusinesses. In addition, we will explore new business areas and further strengthen MMD by utilizing
M&A and other means, and take measures to supply safe, high-quality food ingredients and promote thediversification of food.
6) Recruitment and training of human resources
Based on the idea that human resources are human capital that generates added value, the Group will hire
excellent human resources who share our Group’s vision and develop human resources to support
sustainable growth.
In addition, we will promote diverse work styles, including the advancement of female employees,
strengthen mid-career recruitment, and actively recruit and develop global human resources.

28

7)

Improvement of working environment
To improve the working environment, the Group has implemented various improvement measures,
including strengthening of compliance education for managers, establishment of a contact point and inhouse training programs to prevent harassment, and enhancement of opportunities for dialogue with
employees. We will continue to streamline operations through DX promotion, strengthen communication,and review the personnel evaluation system, salary system, and employee benefits to create a working
environment where each employee can enhance his/her abilities and feel satisfaction and growth, thereby
ensuring long-term stable employment.
8) Establishment of a system to improve customer convenience and contribute to prompt business decisions
The Group is building a system to improve customer convenience and productivity. Meanwhile, as abusiness management system, we are building a system to collect information on sales, inventory, etc. As
we expand the sales bases of our Group companies in Japan and overseas, we will further improve theefficiency of information collection and integration, and will also build a system and structure that willcontribute to prompt decision making by management.
9) Proactive approach to digital transformation (DX)
Amid the rapid progress of digitalization, also known as the 4th Industrial Revolution, the utilization of
artificial intelligence (AI), IoT, RPA, robots, and cloud computing has been accelerating. In stores,
manpower reduction in both routine and non-routine labor is advancing due to technological innovations
such as self-ordering, self-cashing, and robots, and the data utilization using IT. The Group will also
promote the streamlining and automation of operations through proactive DX initiatives in each process,including stores, factories, logistics, and headquarters.
10) Initiatives to ensure a stable supply of food ingredients
The Group procures food ingredients used in its stores from both domestic and overseas sources, and is
working to diversify its suppliers in order to address the risk of price increase due to conflicts, climatechange, and exchange rate fluctuations at the place of origin.
(5) Key business content (As of March 31, 2024)
The Group consists of the Company and 167 subsidiaries and affiliates for a total of 168 companies andoperates a wide range of food businesses.
(6) Key offices and plants (As of March 31, 2024)
1) The Company
Headquarters
2-18-1 Konan, Minato-ku, Tokyo
2) Key subsidiaries
As stated in “(3) Status of significant parent companies and subsidiaries 2) Status of significant
subsidiaries” above.
(7) Status of employees (As of March 31, 2024)
1) Status of employees of the corporate group
Increase/decrease since the end of theprevious fiscal year
16,806
Down 518(Notes) 1. The number indicated is the number of employees at the Company and its consolidated subsidiaries.
2. Apart from the above, there are 66,418 part time persons in employment.
2) Status of the Company’s employees
Increase/decrease since
Average years of
Number of employees
the end of the
Average age
employment
previous fiscal year790
Up 10639.9 years
9.1 years(Note) The number of employees is calculated by excluding persons seconded from the Company to othercompanies and including persons seconded by other companies to the Company. Apart from the above,
there are 115 part time persons in employment.
Number of employees

29

(8) Status of key lenders (As of March 31, 2024)(Million yen)
LenderSumitomo Mitsui Banking Corporation
Development Bank of Japan Inc.
Mizuho Bank, Ltd.
The Bank of Yokohama, Ltd.
The Norinchukin Bank
The Nanto Bank, Ltd.
The Shizuoka Bank
The Hiroshima Bank, Ltd.
JA Bank Saitamakenshinren
The ChibaBank, Ltd.

Amount of borrowing
62,09351,40039,43036,574
14,735
3,500
3,450
3,000
3,000
2,400

(9) Other significant matters concerning the status of the corporate group
No applicable items.

30

2. Status of the Company(1) Status of stock (As of March 31, 2024)
1) Total number of authorized shares: Common shares
432,000,000 sharesClass A preferred shares 1,000 shares2) Total number of issued shares: Common shares
160,733,225 sharesClass A preferred shares
300 shares
3) Number of shareholders: Common shares
136,639 persons
Class A preferred shares
2 persons4) Major shareholders (Top 10)(a) Common shares
Shareholder name
Number of shares held
Holding ratio
Nihon Create Co., Ltd.
52,307,500 shares
33.33%The Master Trust Bank of Japan, Ltd. (Trust account)
12,517,900 shares
7.98%
Custody Bank of Japan, Ltd. (Trust account)
4,855,800 shares
3.09%
Kentaro Ogawa
3,170,408 shares
2.02%
Kazumasa Ogawa
3,160,800 shares
2.01%
Yohei Ogawa
3,160,800 shares
2.01%
Zensho Group Employee Stock Ownership
2,786,622 shares
1.78%
Association
STATE STREET BANK WEST CLIENT - TREATY
1,890,700 shares
1.20%
505234
JP MORGAN CHASE BANK 385781
1,221,269 shares
0.78%
SSBTC CLIENT OMNIBUS ACCOUNT
884,674 shares
0.56%(Notes) 1. The holding ratio is calculated after excluding treasury stock (3,776,635 shares). The number of suchtreasury stock does not include 291,800 shares of the Company shares held by Japan Custody Bank,
Ltd. (Trust Account E) for the “Board Benefit Trust (BBT).”
2. The number of shares held by Mr. Yohei Ogawa above includes the number of shares held by SMBC
Trust Bank Ltd. (3,150,000 shares as of March 31, 2024) in accordance with the management trust
agreement executed on February 20, 2022.
(b) Class A preferred shares
Shareholder name
Number of shares held
Holding ratio
Development Bank of Japan Inc.
150 shares
50.00%
Mizuho Bank, Ltd.
150 shares
50.00%(Note) These shares do not have voting rights, and are shares with the right to receive preferred dividends.
5) Status of shares issued to the Company’s officers as compensation for the execution of duties during the
fiscal year under review
Category
Number of shares
Recipients of issuance
CommonDirector (excluding Outside Directors)
500 shares
1 personshares(Notes) 1. The content of the Company’s stock compensation is as stated in “(2) Other significant mattersconcerning shares” below.
2. The figure stated above represents shares issued to an officer of the Company who retired.
(2) Other significant matters concerning shares
Overview of performance-linked stock compensation plan for the Company’s Directors, etc.
By the resolution at the 40th Ordinary General Meeting of Shareholders held on June 24, 2022, the Company
has introduced a performance-linked stock compensation plan for the Company’s Directors (excluding Outside
Directors and Members of the Audit & Supervisory Committee) and Executive Officers for the purpose of raisingawareness among Directors, etc. to contribute to improving the Company’s business performance and increasing
its corporate value over the medium to long term by clarifying the link between Directors’ and Executive
Officers’ compensation and the Company’s business performance and stock value, and by sharing withshareholders not only the benefits of an increase in stock price but also the risk of a decline in stock price.
This Plan is a performance-linked stock compensation plan under which the Company’s shares will be acquired
through a trust with cash contributed by the Company as the source of funds, and the Company’s shares and cash
equivalent to the amount obtained by converting the Company’s shares at fair value will be paid to Directors,

31

etc., in accordance with the Executive Stock Benefit Regulations established by the Company. In principle, thetime when Directors, etc., receive the Company’s shares, etc., will be after their retirement from office.
(3) Status of stock acquisition rights
No applicable items.

32

(4) Status of the Company’s officers
1) Status of Directors (As of March 31, 2024)
Position

Name

Representative Director,
Chairman, President &CEO

Kentaro Ogawa

Managing Executive
Director

Yohei Ogawa

Managing Executive
Director

Shinya Nonoshita

Director

Makoto Hirano

Director
Outside Director

Kazumasa Ogawa
Chiaki Ito

Outside Director

Takaharu Ando

Responsibilities and status of significant concurrent
positions
Chairman, Seidanren
Representative Director, Nihon Create Co., Ltd.
President, Ogawa Kentaro Scholarship Foundation
Senior General Manager of Business Management
Strategy Division, in charge of Global Operations
Division, in charge of Global Sushi PMI Department
Chairman, Zensho China Holdings Co., Ltd.
Senior General Manager, Group IT Headquarters
Senior General Manager, Group Food Safety Standards
Division
President, Zensho Japanese Culture Center
Outside Director, OBIC Business Consultants Co., Ltd.
Outside Director, Amuse Inc.
Outside Director, Tobu Railway Co., Ltd.
Outside Director (Member of the Audit & Supervisory
Committee), Nisshin Seifun Group Inc.
Outside Director, Rakuten Group, Inc.
Outside Director, TDK Corporation
External Director, Medley, Inc.

Outside Director
Shoei Yamana
Outside Director
Reiko Nagatsuma
Outside Director(Full-time Member of the
Hideo Watanabe
Audit & Supervisory
Committee)
Outside Director(Member of the Audit &Yukio Miyajima
Supervisory Committee)
Outside Director(Member of the Audit &Kenichi Kaneko
Supervisory Committee)
Outside Director(Member of the Audit &Hisashi Maruyama
Supervisory Committee)(Notes) 1. Managing Executive Director Yohei Ogawa and Director Kazumasa Ogawa are sons of Representative
Director, Chairman, President & CEO Kentaro Ogawa.
2. Directors Shoei Yamana and Reiko Nagatsuma and Directors (Members of the Audit & Supervisory
Committee) Kenichi Kaneko and Hisashi Maruyama were newly elected as Director at the 41st
Ordinary General Meeting of Shareholders held on June 23, 2023, and assumed office.
3. Directors Koichi Takei, Toshitaka Hagiwara, and Yoshiko Hayama and Directors (Members of the
Audit & Supervisory Committee) Takashi Manaki and Koji Takeuchi retired from their positions at
the conclusion of the 41st Ordinary General Meeting of Shareholders held on June 23, 2023, due toexpiration of their terms of office.
4. Directors Chiaki Ito, Takaharu Ando, Shoei Yamana, and Reiko Namatsuma and Directors (Membersof the Audit & Supervisory Committee) Hideo Watanabe, Yukio Miyajima, Kenichi Kaneko, andHisashi Maruyama are Outside Directors stipulated in Article 2, Item 15 of the Companies Act.
5. Directors (Members of the Audit & Supervisory Committee) Hideo Watanabe, Yukio Miyajima,
Kenichi Kaneko, and Hisashi Maruyama have considerable knowledge of finance and accounting.
6. The Company has designated Directors Chiaki Ito, Takaharu Ando, Shoei Yamana, Reiko Nagatsuma,
Hideo Watanabe, Yukio Miyajima, Kenichi Kaneko, and Hisashi Maruyama as independent officers as
stipulated by the Tokyo Stock Exchange, and has notified the Exchange of such designation.
7. The Company has entered into an agreement with Outside Directors Chiaki Ito, Takaharu Ando, Shoei
Yamana, and Reiko Nagatsuma and Outside Directors who are Members of the Audit & Supervisory
Committee Yukio Miyajima, Kenichi Kaneko, and Hisashi Maruyama pursuant to Article 427,

33

Paragraph 1 of the Companies Act to limit their liability for damages under Article 423, Paragraph 1 ofsaid Act.
The maximum amount of liability for damages under said agreement is 10 million yen or the amountprovided by law, whichever is higher, for Outside Directors, and 5 million yen or the amount provided
by law, whichever is higher, for Outside Directors who are Members of the Audit & Supervisory
Committee.
8. Director (Member of the Audit & Supervisory Committee) Hideo Watanabe is a full-time Member ofthe Audit & Supervisory Committee. The reason for selecting full-time Members of the Audit &Supervisory Committee is to enhance the effectiveness of auditing and supervision by the Audit &Supervisory Committee through their attendance at important internal meetings other than meetings ofthe Board of Directors, as well as through their daily information gathering and collaboration with the
Accounting Auditor and the internal audit division, etc.

342) Total amount of compensation, etc., paid to Directors
Total amount of compensation, etc., by category
Category

Directors (excluding Directors
who are Members of the Audit& Supervisory Committee)[of which, Outside Directors]
Directors who are Members of
the Audit & Supervisory
Committee[of which, Outside Directors]

Total amount ofcompensation,
etc.

Fixed
compensation

Performance-linked compensation
Performancelinked
Performancecompensation
linked stock(Bonuses paid incompensation
cash)

593 million yen[39 million yen]

385 million yen[39 million yen]

26 million yen[– million yen]

181 million yen[– million yen]

12
[6]

43 million yen[40 million yen]

43 million yen[40 million yen]

– million yen[– million yen]

– million yen[– million yen]

6[5]

Number of
officers
compensated(Notes) 1. Performance-linked compensation for Directors (excluding Outside Directors and Directors who areMembers of the Audit & Supervisory Committee) shall consist of an annual performance-linked bonus
and stock-based compensation to be granted upon retirement based on points awarded for each period
covered by the medium-term management plan.
The amount of performance-linked bonus is calculated by using the annual basic compensation and theconsolidated ordinary profit margin in the previous fiscal year. That consolidated ordinary profit
margin is 3.5%. The performance indicator selected as the basis for calculating the amount of
performance-linked bonus is the Company’s consolidated ordinary profit margin. The Company
believes that the consolidated ordinary profit margin is the most appropriate indicator for calculating
performance-linked bonus because it directly indicates the business performance of the Company and
the Group.
For performance-linked stock compensation, the “Board Benefit Trust (BBT)” system is adopted.
Based on the Executive Stock Benefit Regulations, points (one point = one share) to each Director
shall be granted in accordance with his/her position and the degree of achievement of performanceindicators based on the pre-determined medium-term three-year plan, and then the number of theCompany’s shares (a certain portion of which shall be cash equivalent to the amount obtained byconverting the Company’s shares at fair value) corresponding to the number of such points shall be
granted to each Director at the time of his/her retirement from office. The performance indicators shallbe the degree of achievement of performance indicators based on the Company’s pre-determined
medium-term three-year plan and be intended to serve as medium- to long-term incentives not only to
improve business performance but also to increase the Company’s stock price.
2. The amount of monetary compensation for Directors (excluding Directors who are Members of the
Audit & Supervisory Committee) was resolved at the 37th Ordinary General Meeting of Shareholders
held on June 21, 2019, to be no more than 600 million yen per year (of which, the amount for Outside
Directors shall be no more than 60 million yen; these amounts do not include salaries for employees).
As of the conclusion of said Ordinary General Meeting of Shareholders, the number of Directors(excluding Directors who are Members of the Audit & Supervisory Committee) is 12 (including 3
Outside Directors).
Regarding the stock-based compensation for Directors (excluding Outside Directors and Directors
who are Members of the Audit & Supervisory Committee), it was resolved at the 40th Ordinary
General Meeting of Shareholders held on June 24, 2022 that the amount to be contributed by theCompany to the Trust for three consecutive fiscal years shall be up to 2,000 million yen and the total
number of points per subject period (three fiscal years) to be granted to Directors shall be up to
225,000 points, in addition to the above annual compensation. As of the conclusion of said Ordinary
General Meeting of Shareholders, the number of Directors (excluding Outside Directors and Directors
who are Members of the Audit & Supervisory Committee) is 6.
3. The amount of monetary compensation for Directors (Members of the Audit & Supervisory
Committee) was resolved at the 37th Ordinary General Meeting of Shareholders held on June 21,
2019, to be no more than 120 million yen per year. The number of Directors (Members of Audit &Supervisory Committee) as of the conclusion of said Ordinary General Meeting of Shareholders is 4.
3) Policy for determining content of individual compensation, etc., for Directors
The Company has established a policy for determining the content of compensation, etc., for individual
Directors (hereinafter the “Determination Policy”), a summary of which is as follows. The Determination

35

Policy is determined by the Board of Directors of the Company after the report of the Nomination andCompensation Committee.
1. Basic approach
Compensation for Directors shall be set at a level that motivates them to manage the Company with theaim of increasing corporate value not only in the short term but also in the medium to long term, and at
the same time allows the Company to secure a diverse and talented workforce. The level ofcompensation shall be competitive in comparison with other companies in the same industry and othercompanies of the same size in other industries.
2. Specific Policies(1) Breakdown of compensation
Compensation for Directors (excluding Outside Directors and Directors who are Members of the
Audit & Supervisory Committee) shall consist of basic monthly compensation as fixedcompensation, an annual performance-linked compensation (both are monetary compensation), andstock-based compensation to be granted upon retirement based on points awarded for each period
covered by the medium-term management plan. Outside Directors and Directors who are Membersof the Audit & Supervisory Committee shall receive only basic monthly compensation, which isfixed compensation.
(2) Limit on the total amount of monetary compensation and maximum number of shares for stockbased compensation
The total amount of compensation for basic monthly compensation and annual performance-linked
compensation for Directors shall be determined within the limit of compensation approved by theGeneral Meeting of Shareholders, and the total number of shares of stock-based compensation shallbe determined within the maximum number of shares of stock-based compensation approved by theGeneral Meeting of Shareholders, respectively. Any change in the limit of the total amount ofcompensation or the maximum number of shares shall be approved by the Board of Directors andthe General Meeting of Shareholders.
(3) Determination of compensation for each Director
i. Determination of fixed compensation(a) The amount of fixed compensation for each Director (excluding Directors who are Members of
the Audit & Supervisory Committee) shall be determined by the Representative of the Board
based on the fixed basic executive compensation table (by position) within the limit of the total
amount of compensation, taking into consideration the responsibilities and evaluation of each
Director (excluding Directors who are Members of the Audit & Supervisory Committee).
(b) The fixed basic executive compensation table (by position) shall be determined each year by the
Representative of the Board after consulting the Nomination and Compensation Committee.
(c) The amount of fixed compensation for Directors who are Members of the Audit & Supervisory
Committee shall be determined by deliberation among the Members of the Audit & Supervisory
Committee within the limit of the total amount of compensation, taking into consideration
whether the Director serves full-time or part-time, the duties assigned to him/her, and otherfactors.
ii. Determination of performance-linked compensation(a) The amount of performance-linked compensation for each Director (excluding Outside Directors
and Directors who are Members of the Audit & Supervisory Committee) shall be determined by
the Representative of the Board based on the performance-linked executive compensation table(by position), within the limit of the total amount of compensation, taking into consideration the
Company’s performance and Directors’ responsibilities and evaluation.
(b) The performance-linked executive compensation table (by position) shall be determined eachyear by the Representative of the Board after consultation with the Nomination andCompensation Committee.
(c) Performance-linked compensation shall be paid once a year in the month following the month inwhich the Ordinary General Meeting of Shareholders is held.

36(d) The consolidated ordinary profit margin shall be used as an indicator of the Company’s
performance. The performance-linked executive compensation table (by position) shall set
absolute amounts for the ordinary profit margin of 2.0% or more but less than 10.0% in 1%
increments, and in 2% increments for the ordinary profit margin of 10.0% or more.
iii. Ratio of amount of fixed compensation to amount of performance-linked compensation
With regard to the ratio of the fixed compensation (annual basic compensation) amount to theperformance-linked compensation amount, assuming that the amount of the fixed compensation is 1,
the performance-linked compensation amount shall be between 0 and 3.5, depending on the
consolidated ordinary profit margin.
iv. Determination of stock-based compensation
With respect to stock-based compensation, based on the Executive Stock Benefit Regulations, points
to each Director (excluding Outside Directors and Directors who are Members of the Audit &Supervisory Committee) shall be granted in accordance with his/her position and the degree ofachievement of performance indicators based on the pre-determined medium-term three-year plan,and then the number of the Company’s shares (a certain portion of which shall be cash equivalent tothe amount obtained by converting the Company’s shares at fair value) corresponding to the numberof such points shall be granted to each Director at the time of his/her retirement from office.
v. Percentage of compensation amount by type
The percentage of the amount of each type of compensation within the total amount of compensation
will vary depending on the business performance and stock price, but shall generally be as follows:
Monetary compensation (fixed compensation and performance-linked compensation): 75%
Stock-based compensation: 25%
vi. Delegation for determination of compensation for individual Directors(a) Person to be delegated: Kentaro Ogawa, Representative Director, Chairman, President & CEO(b) Content of authority to be delegated: Determination of specific amounts of fixed compensationand performance-linked compensation(This does not include matters related to stock-based compensation.)(c) Measures to ensure that the delegated authority is properly exercised: The fixed basic executive
compensation table and the performance-linked executive compensation table, which will form
the basis for calculating the amount of compensation, shall be submitted to the Nomination andCompensation Committee for consultation, and the specific amount shall be determined inaccordance with the basic policy on compensation for Directors determined by the Board of
Directors.

374) Matters concerning delegation of authority to determine the contents of compensation for individual
Directors
At the Company, Representative Director, Chairman, President & CEO Kentaro Ogawa determines the
specific contents of compensation for individual Directors based on a resolution of delegation by the Boardof Directors. The resolution of delegation by the Board of Directors delegates the determination of thespecific amount of fixed compensation and performance-linked compensation for each Director (excluding
Directors who are Members of the Audit & Supervisory Committee). The reason for delegating thesedecisions is that the Representative Director and President is best suited to evaluate the duties,
responsibilities, and performance of each Director while observing the Company’s overall businessperformance.
The Company has established objective payment standards determined by the Board of Directors after
consultation with the Nomination and Compensation Committee.
5) Reasons the Board of Directors determined that individual compensation for Directors (excluding Directors
who are Members of the Audit & Supervisory Committee) for the fiscal year under review conform to theDetermination Policy in “3)”The Company has established objective payment standards determined by the Board of Directors after
consulting with the Nomination and Compensation Committee to ensure that the Representative Director
and President appropriately determines the amount of compensation for individual Directors, and since thecontent of compensation for individual Directors has been determined through said procedures, the Boardof Directors has determined that the content of compensation for individual Directors is in line with the
Determination Policy.
6) Matters concerning outside officers (As of March 31, 2024)(a) Status of concurrent positions at other companies, etc., and relationship between the Company and said
other companies, etc.
The status of Mr. Chiaki Ito is as described in “1)” above, and the Company has no special relationshipwith OBIC Business Consultants Co., Ltd.
The status of Mr. Takaharu Ando is as described in “1)” above, and the Company has no special
relationship with Amuse Inc. or Nisshin Seifun Group Inc. There is a real estate lease transaction between
the Company and Tobu Railway Co., Ltd, and a service use transaction between the Company and
Rakuten Group, Inc.
The status of Mr. Shoei Yamana is as described in “1)” above, and the Company has no special
relationship with TDK Corporation.
The status of Ms. Reiko Nagatsuma is as described in “1)” above, and the Company has no special
relationship with Medley, Inc.

38

(b) Status of key activities during the fiscal year under review
Position
Name
Status of key activities
Mr. Chiaki Ito attended all 14 meetings of the Board of
Directors held during the fiscal year under review. He
Director
Chiaki Itoprovided appropriate opinions and advice based on his
abundant experience and broad knowledge as a business
manager for many years.
Mr. Takaharu Ando attended 12 out of 14 meetings ofthe Board of Directors held during the fiscal year underreview. He has held various important positions
Director
Takaharu Ando
including Commissioner General of the National Police
Agency, and expressed his opinions and advice
appropriately based on his abundant experience and wide
range of knowledge.
Mr. Shoei Yamana attended all 10 meetings of the Boardof Directors held during the fiscal year under review
since assuming office on June 23, 2023. He provided
Director
Shoei Yamana
appropriate opinions and advice based on his abundant
experience and wide range of knowledge as a corporate
manager at a company that has expanded its businessglobally.
Ms. Reiko Nagatsuma attended 9 out of 10 meetings ofthe Board of Directors held during the fiscal year underreview since assuming office on June 23, 2023. She
provided appropriate opinions and advice based on her
Director
Reiko Nagatsuma
advanced insight into the fields of IT and DX that she
obtained while working at global IT corporations andabundant experience and wide range of knowledge as acorporate manager.
Mr. Hideo Watanabe attended all 14 meetings of theBoard of Directors and all 18 meetings of the Audit &Director (Full-time
Supervisory Committee held during the fiscal year under
Member of the Audit &Hideo Watanabe
review. He made comments as necessary for theSupervisory Committee)
Company’s management based on his abundant
experience and wide range of knowledge as a business
manager for many years.
Mr. Yukio Miyajima attended all 14 meetings of theBoard of Directors and all 18 meetings of the Audit &Director (Member of theSupervisory Committee held during the fiscal year under
Audit & Supervisory
Yukio Miyajima
review. He has many years of experience as a businessCommittee)
manager and sufficient practical experience in finance,and made necessary comments for the Company’s
management as appropriate.
Mr. Kenichi Kaneko attended all 10 meetings of theBoard of Directors and all 13 meetings of the Audit &Supervisory Committee held during the fiscal year underDirector (Member of thereview since assuming office on June 23, 2023. He has
Audit & Supervisory
Kenichi Kaneko
many years of experience as a business manager andCommittee)
professional insight in personnel and labor as well as
accounting and finance, and made necessary comments
for the Company’s management as appropriate.

39

Position

Name

Status of key activities
Mr. Hisashi Maruyama attended all 10 meetings of theBoard of Directors and all 13 meetings of the Audit &Supervisory Committee held during the fiscal year underDirector (Member of thereview since assuming office on June 23, 2023. He has
Audit & Supervisory
Hisashi Maruyama
many years of experience as a business manager andCommittee)
professional insight in legal affairs, compliance, and risk
management, and made necessary comments for theCompany’s management as appropriate.
(Note) In addition to the above number of Board of Directors meetings, there was one written resolution that wasdeemed to have been approved by the Board of Directors pursuant to Article 370 of the Companies Act
and Article 25 of the Company’s Articles of Incorporation.
(c) Summary of duties performed with respect to the roles expected to be fulfilled by Outside Directors
Mr. Chiaki Ito has provided useful advice not only to the Board of Directors but also on business
transformation and growth through DX by providing the latest information in the IT/DX field to theCompany.
Mr. Takaharu Ando, as a member of the Nomination and Compensation Committee, attended themeetings of the Nomination and Compensation Committee held during the fiscal year under review andexpressed his opinions appropriately. He has also provided useful advice not only to the Board of
Directors but also on the management in general and on individual matters.
Mr. Shoei Yamana provided useful advice not only to the Board of Directors but also on the
management in general and on individual matters.
Ms. Reiko Nagatsuma provided useful advice not only to the Board of Directors but also on the
management in general and on individual matters.
Mr. Hideo Watanabe has provided useful advice not only to the Board of Directors and the Audit &Supervisory Committee, but also on the management in general and on individual matters as appropriate.
Mr. Yukio Miyajima, as a member of the Nomination and Compensation Committee, attended themeetings of the Nomination and Compensation Committee held during the fiscal year under review andexpressed his opinions appropriately. He also provided advice as necessary not only to the Board of
Directors and the Audit & Supervisory Committee, but also on management in general.
Mr. Kenichi Kaneko provided advice as necessary not only to the Board of Directors but also on the
management in general and on individual matters.
Mr. Hisashi Maruyama provided advice as necessary not only to the Board of Directors but also on the
management in general and on individual matters.
7) Overview of content of directors and officers liability insurance agreement
The Company has entered into a directors and officers liability insurance agreement with an insurancecompany, as stipulated in Article 430-3, Paragraph 1 of the Companies Act, insuring Directors (excluding
Directors who are Members of the Audit & Supervisory Committee), Directors who are Members of the
Audit & Supervisory Committee, and Executive Officers of the Company, and Directors, Auditors, andExecutive Officers of subsidiaries (hereinafter collectively referred to as “Officers, etc.”).
The insurance agreements provide coverage for losses incurred by the insured Officers, etc., as a result of
being held liable for the performance of their duties or being subject to a claim for such liability. However,there are certain exemptions, such as not covering damages caused by acts committed with the knowledge
that the acts are in violation of laws and regulations. The Company pays all insurance premiums.

40(5) Status of Accounting Auditor
1) Name: PricewaterhouseCoopers Japan LLC(Note) PricewaterhouseCoopers Aarata LLC merged with PricewaterhouseCoopers Kyoto and changed its
name to PricewaterhouseCoopers Japan LLC on December 1, 2023.
2) Amount of compensation, etc.
Category
Amount paid
Amount of compensation, etc., for the Accounting Auditor for the fiscal
89 million yen
year under review
Total amount of cash and other assets to be paid to the Accounting
127 million yen
Auditor by the Company and subsidiaries(Notes) 1. The Audit & Supervisory Committee, based on the “Practical Guidelines for Cooperation withAccounting Auditor” published by the Public Interest Incorporate Association Japan Audit &Supervisory Board Members Association, obtained necessary materials and reports from Directors,
relevant internal divisions, and the Accounting Auditor, and confirmed the details of the audit plan of
the Accounting Auditor, the status of the execution of its duties, and the basis for the calculation of thecompensation estimates. As a result of the Company’s review and deliberation, the Company agreed tothe compensation, etc., for the Accounting Auditor in accordance with Article 399, Paragraph 1 of theCompanies Act.
2. Since the audit contract between the Company and the Accounting Auditor does not clearly
distinguish between the amount of compensation, etc., for audits based on the Companies Act and theamount of compensation, etc., for audits based on the Financial Instruments and Exchange Act and it
is also not practicable to distinguish them, the sum of these amounts is shown as the total amount ofcompensation etc., for the fiscal year under review.
3) Content of non-audit operations
The Company commissions and pays compensation to the Accounting Auditor for “comfort letter issuance
operation,” which is a service other than those stipulated in Article 2, Paragraph 1 of the Certified Public
Accountants Act (non-audit operations).
4) Policy on determining dismissal or non-reappointment of Accounting Auditor
The Audit & Supervisory Committee shall dismiss the Accounting Auditor with the unanimous consent of
all Members of the Audit & Supervisory Committee if the Accounting Auditor is deemed to fall under any of
the items of Article 340, Paragraph 1 of the Companies Act. In this case, Member of the Audit &Supervisory Committee selected by the Audit & Supervisory Committee shall report the dismissal of the
Accounting Auditor and the reasons thereof at the first General Meeting of Shareholders convened after thedismissal. In addition, if the Audit & Supervisory Committee finds it necessary to change the Accounting
Auditor, such as when it determines that the Accounting Auditor's performance of its duties is impaired, theAudit & Supervisory Committee shall determine the details of a proposal for dismissal or non-reappointmentof the Accounting Auditor to be submitted to the General Meeting of Shareholders.
5) Overview of content of agreements to limit liability
No applicable items.

41

(6) Systems to Ensure the Appropriateness of Operations
The following is an overview of the basic policies determined for the system to ensure that the executionof duties by Directors complies with laws and regulations and the Articles of Incorporation, and othersystems to ensure the appropriateness of the Company’s operations.
Basic approach and status of maintenance toward establishment of internal control systems
1) Systems to ensure that the execution of duties by Directors and employees complies with laws, regulations,and the Articles of Incorporation(a) The “Zensho Group Charter” shall be established to ensure that all officers and employees comply withlaws, regulations, the Articles of Incorporation, and internal rules.
(b) Each Director and Executive Officer in charge of business operations shall analyze compliance risks inthe business unit he/she is in charge of and implement countermeasures against such risks.
(c) The “Committee of Total Risk Management and Compliance” shall oversee the Group’s complianceinitiatives across the Group and report the results of its deliberations to the Board of Directors and the
Audit & Supervisory Committee. The “Zensho Group Hotline” shall be established for employees toprovide information on compliance issues of the Group.
(d) In order to grasp the status of business operations in business activities in general and to ensure thelegality and soundness of such activities, audits by the internal audit division shall be conducted
continuously.
2) Regulations and other systems for managing the risk of loss(a) The Company shall establish the “Group Risk Management Regulations,” comprehensively andappropriately recognize various risks within the Group, select risks to be managed, appoint a division in
charge of management, and develop and enhance the risk management system. In addition, fullyrecognizing that unexpected risks may occur, the Board of Directors or the Representative Director shallpromptly select a division in charge of management and respond promptly and appropriately to any new
significant risk.
(b) The “Committee of Total Risk Management and Compliance” shall be established to comprehensively
manage various risks within the Group in accordance with the regulations, and its effectiveness shall beensured by inspecting the implementation status of risk countermeasures by the division in charge ofmanagement.
(c) For risks related to “food safety and security,” “compliance,” and “information security,” and otherselected risks, the division in charge of management shall formulate corresponding countermeasures. In
the event that risk materializes, the division in charge of management shall take prompt and appropriate
action, report the results to the “Committee of Total Risk Management and Compliance,” and report to
the Board of Directors as appropriate for risks that may have a significant impact on management, andreceive necessary instructions.
3) System for storing and managing information related to the execution of duties by Directors(a) The Company shall store and manage information related to the execution of duties by Directors
appropriately in accordance with the “Board of Directors Regulations” and “Document Management
Regulations.”(b) Directors shall confirm that the system for storage, management, and preservation of such information isproperly maintained.
4) System to ensure the efficient execution of duties by Directors(a) The Company shall formulate a medium-term management plan and an annual management plan in orderto clarify goals to be achieved by the Company, and shall thoroughly manage daily, monthly andquarterly operations to clarify the progress of the goals so that prompt judgment and decision can bemade.
(b) In addition to simplifying the decision-making process to speed up the decision-making, the Company
shall make executive decisions on matters to be decided by the President that may have a significant
impact on the management of the Company and the Group based on discussions with the Director in
charge and Executive Officers, and report these decisions to the Board of Directors as appropriate.

425) System to ensure the appropriateness of operations of the corporate group consisting of the Company and its
subsidiaries(a) The “Zensho Group Charter” shall be the code of conduct for all officers and employees of the Company
and its subsidiaries to act in compliance with laws and regulations and the Articles of Incorporation.
(b) The Company, as a holding company, shall develop a system to ensure the appropriateness of business
operations from the perspective of the entire Zensho Group, and shall manage Group companies
according to their conditions based on the “Group Company Management Regulations.” In addition, theCompany’s group company administration division shall serve as the contact point and receive reports on
the status of the system from subsidiaries on a regular or as-needed basis.
(c) The Company shall dispatch officers and employees to the subsidiaries, grasp the status of thesubsidiaries’ business execution, and confirm the effectiveness of their business activities.
(d) The internal audit division shall audit the Group companies on a regular or as-needed basis and report thestatus of the audit to the Representative Director of the Company in a timely manner.
6) System to ensure the reliability of financial reporting(a) Recognizing that ensuring the reliability of financial reporting is essential for maintaining and improving
the credibility of the Group’s activities, the importance of internal control activities related to financial
reporting shall be thoroughly understood throughout the Zensho Group.
(b) The “Assessment Plan for Internal Control over Financial Reporting” shall be prepared for each fiscal
year, and the entire Group shall work together to improve internal control over financial reporting on aconsolidated basis.
(c) With regard to the maintenance and operation status of internal control over financial reporting, thedivision in charge of internal control evaluation shall verify the appropriateness of business operations toensure the reliability of financial reporting of the entire Group.
7) Matters concerning Directors and employees who are to assist the Audit & Supervisory Committee in its
duties (hereinafter the “Assistant Employees, etc.”) and matters concerning the independence of theAssistant Employees, etc., from other Directors and the securing of the effectiveness of instructions(a) From the viewpoint of ensuring the effectiveness of audits by the Audit & Supervisory Committee, theCompany shall appoint the necessary personnel as the Assistant Employees, etc., and enhance the system.
(b) From the viewpoint of ensuring independence, the Assistant Employees, etc., shall perform their duties
under the direction of the Audit & Supervisory Committee.
(c) The prior consent of the Audit & Supervisory Committee is required for the transfer of, evaluation of, anddisciplinary action against the Assistant Employees, etc.
8) System for Directors (excluding Directors who are Members of the Audit & Supervisory Committee) andemployees to report to the Audit & Supervisory Committee and other systems related to reporting to the
Audit & Supervisory Committee(a) Directors (excluding Directors who are Members of the Audit & Supervisory Committee) shall promptly
report to the Audit & Supervisory Committee on matters that have a material impact on the Company and
the Group, the status of internal audits, the status of reporting to the “Zensho Group Hotline,” etc.
(b) Any officer or employee of the Company or its subsidiaries who discovers any matter that may materiallyaffect the Company or the Group may report directly to the Audit & Supervisory Committee, and suchreports shall be handled in accordance with the “Group Internal Report Regulations.” The Company shallensure that no person who makes such report shall be subjected to any disadvantageous treatment becauseof such report.
(c) The Audit & Supervisory Committee shall share information and improve efficiency through mutual
disclosure of audit plans, audit results, etc., with the internal audit division.

439) Other systems to ensure that audits by the Audit & Supervisory Committee are conducted effectively(a) The Representative Director shall meet regularly with the Audit & Supervisory Committee to exchange
opinions on issues to be addressed by the Company, the state of the environment for the audits of the
Audit & Supervisory Committee, and important auditing issues.
(b) If the Audit & Supervisory Committee independently receives advice from professional attorneys,accountants, or other experts on the performance of its duties, the Audit & Supervisory Committee may
charge the Company for expenses incurred thereby.
(c) The Audit & Supervisory Committee may, when it deems necessary, request reports from Directors(excluding Directors who are Members of the Audit & Supervisory Committee) and employees, attend
important meetings, and inspect documents.
Basic policy on elimination of antisocial forces and status of its maintenance1) Basic policy on elimination of antisocial forces
The Company shall have no relationship with antisocial forces. The Company shall take a resolute attitude
toward any unreasonable demands from antisocial forces, and shall not provide any monetary or othereconomic benefits. Furthermore, the Company will ensure that all Group companies are fully aware ofthis policy.
2) Status of maintenance for elimination of antisocial forces(a)The Company has established the “Zensho Group Charter” to promote corporate ethics, and has alsoestablished the “Group Compliance Regulations” and “Compliance Action Guidelines” to realize
compliance, thereby providing specific guidelines for the “elimination of antisocial forces.”(b) The Company shall make the “Zensho Group Charter,” “Group Compliance Regulations,” and“Compliance Action Guidelines” known and thoroughly understood by all employees through training at
the time of hiring or periodic training.
(c) In addition, to deal with antisocial forces, the “Committee of Total Risk Management and Compliance”
has been organized to ensure that no individual or department is left alone, and a system has been
established to deal with such forces in cooperation with the police, attorneys, and other external
specialized agencies.
(7) Operational Status of Systems to Ensure the Appropriateness of Operations
The following is an overview of the status of operation of the system to ensure the appropriateness of theCompany’s operations during the fiscal year under review.
1) Systems for compliance
The Company has established a department dedicated to compliance and is working to further spreadcompliance awareness throughout the Group through the following activities:(a)Compliance training is conducted for each division of the Company and each Group company. Throughthis training, the Company promotes the identification of compliance issues and the formulation of
preventive measures in each division of the Company and each Group company, and confirms the
progress of the preventive measures.
(b) The Committee of Total Risk Management and Compliance meets on a regular basis to confirm andstrengthen preventive measures for common compliance-related issues in the Group by the divisions
specializing in the respective fields.
2) Systems for risk management
The Company has established a department dedicated to risk management and is strengthening its risk
management system through the following activities.
(a)The Committee of Total Risk Management and Compliance meets regularly to identify risk issues related
to the entire Group’s businesses, etc., confirm the formulation of countermeasures and the status of theirimplementation by each specialized division of the Company, and strengthen those countermeasures asnecessary.
(b) In preparation for large-scale accidents and disasters, the Company is developing an organizational
structure to ensure that its stores can continue to operate as “food infrastructure.”(c) In response to COVID-19, the emergency headquarters is working to ensure the safety and security of
the customers and employees, as well as the continuation of restaurant operations.

443) System for the execution of duties by Directors(a) The Company establishes an annual management plan and manages the progress of the plan based onmonthly and quarterly business results, while the Board of Directors deliberates and resolves on
measures that need to be taken.
(b) Important investment projects are submitted to the Board of Directors after prior deliberation by theInvestment Advisory Committee in order to speed up the decision-making process of Directors.
(c) The Company is continuously working to improve the operation of the Board of Directors throughmeasures such as conducting an evaluation of the effectiveness of the Board of Directors.
4) Management system for Group companies(a) In accordance with the Group Company Management Regulations, each division of the Group closely
exchanges information with major subsidiaries and confirms the progress of plans and responses toissues at each company.
(b) The Company dispatches officers and employees to Group companies to grasp the status of businessexecution at each company and confirm the appropriateness and effectiveness of business activities.
(c) The Company has strengthened its management system by establishing an intermediate holding company
for each business field.
In addition, the internal audit division audits the Company’s administrative divisions and the Group
companies based on the audit plan, and reports the audit results to the Company’s Representative
Director and the Audit & Supervisory Committee.
5) Systems for audits by the Audit & Supervisory Committee(a) Members of the Audit & Supervisory Committee attend major meetings in addition to meetings of theCompany’s Board of Directors, inspect important documents such as approval documents, and interview
Directors (excluding Directors who are Members of the Audit & Supervisory Committee), Executive
Officers, Senior General Managers, and Presidents of the Group companies, in order to audit the statusof execution of duties by Directors (excluding Directors who are Members of the Audit & Supervisory
Committee).
(b) One full-time Member of the Audit & Supervisory Committee is selected to monitor and verify the statusof the establishment and operation of the internal control system on a daily basis, based on his/hercharacteristics as full-time member.
(c) Members of the Audit & Supervisory Committee make efforts to ensure the effectiveness of audits byholding regular meetings of the Audit & Supervisory Committee to exchange information among
themselves and by exchanging information with the internal audit division and the Accounting Auditor.
(d) Members of the Audit & Supervisory Committee hold liaison meetings with the Auditors of the Group
companies as necessary to establish a system to ensure the effectiveness of the audit as a corporategroup, including all Group companies.
(8) Policy for determining dividends of surplus, etc.
At the 41st Ordinary General Meeting of Shareholders held on June 23, 2023, the Company resolved toamend its Articles of Incorporation to allow the Company to pay dividends of surplus, etc. by a resolution of
the Board of Directors in accordance with Article 459 of the Companies Act.
The Board of Directors, at its meeting held on May 14, 2024, approved an interim dividend of 25 yen percommon share and a year-end dividend of 25 yen, for a total annual dividend of 50 yen per common sharefor the fiscal year under review.
(Of the figures provided in this Business Report, amounts and numbers of shares are rounded down, and ratios andother figures are rounded to the nearest significant digit.)

45

TOPICSTOPICS 1ZENSHO FAIR TRADE -Republic of Uganda-

Providing a safe place for children to learn
Constructed a dormitory for girls at Mugete Elementary School

Constructed a school building for Nyabissi Junior High School

January 2022

June 2023

The construction of the girls’ dormitory enabaled children to attend
classes in a safe and secureInteract with Zensho employees

Girls relaxing in the girls’
dormitory

Children attending classes in the newly constructed school building

With growers who are parentsof students

Exterior of the Junior HighSchoolMugete Elementary School is located in Kasese District in Uganda, where coffee growers live. It was not rare
for students to take four to five hours to go to school, and some children walked home in the dark after sunset.
Some children were unable to go to school due to fear of crimes targeting women and children, which were
frequent in the neighborhood.
In January 2022, the Zensho Group used a social development fund from fair trade to build a dormitory forgirls, with beds and mattresses for 80 students, allowing them to sleep in and go to school from there. In June
2023, a school building for Nyabissi Junior High School was constructed, enabling children who had given up
on continuing their education because the junior high school was too far away to go to.
The Zensho Group will continue to support the future possibilities of children.

*Social development fund: An amount of money from the purchase price of raw materials that is allocated toactivities to improve the lives of local people in need.

46

TOPICS 2

Dispatched food trucks

Supported the Noto Peninsula
Earthquake relief

In the Noto Peninsula Earthquake that occurred on
January 1, 2024, Sukiya’s food trucks weredispatched to the affected areas immediately after
the quake. With the desire to deliver hot meals to
those affected by the earthquake as soon as possible,
our employees put their heart into serving freshly
prepared gyudon. Even in areas such as Wajima Cityand Suzu City, which were difficult to access due tothe enormous damage immediately after the disaster,we were able to provide gyudon to more people
through cooperation with the government and Peace
Winds Japan, a specified nonprofit organization.
As “food infrastructure,” the Zensho Group willcontinue to stand by and work together with local
communities not only in normal times but also intimes of emergency.
*A total of 35,558 meals served from January to April
2024
For more information on the Noto Peninsula Eartyquake
support, please visit here.
https://www.zensho.co.jp/jp/sustainability/contribution/cs
r/archives/post_11.html

Food truck on the move
(Wajima City)

A long line of people waiting for
gyudonExperienced hand washing, which all employees do in the restaurant

KidZania Fukuoka is a place where children can have
fun while learning about how society works. Hamasushi opened its sushi restaurant pavilion there.
At KidZania, children can experience about 100
different jobs and services. The sushi restaurant
pavilion is positioned as part of a food education
initiative to help children learn more about sushi.

TOPICS 3

KidZania Fukuoka

Hama-Sushi opened the sushi
restaurant pavilion

Children can experience making sushi and otherdishes wearing Hama-Sushi uniform.
They can learn about our commitment to sushi, whichmakes use of rice, vinegar, fish, and other ingredientsthat play an important role in Japanese food culture.
We hope that they will become new fans of HamaSushi while developing a greater interest in food.

Rice and ingredients used are the ones actually served at the restaurant,
giving children a real work experience
Serving hot gyudon to those affected by the earthquake47

Consolidated Financial Statements
Consolidated Balance Sheet(Million yen)
42nd fiscal year
(As of March 31, 2024)

Item
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Land
Leased assets
Construction in progress
Intangible assets
Trademark right
Goodwill
Other
Investments and other assets
Investment securities
Guarantee deposits
Long-term prepaid rent
Deferred tax assets
Other
Allowance for doubtful accounts
Deferred assets
Share issuance cost
Bond issuance cost

224,457
82,171
46,727
19,907
5,113
2,731
41,058
27,112(365)
522,746
232,013105,360
11,93933,328
29,10948,335
3,939
220,279
201,169
13,616
5,493
70,453
2,162
38,07413,004
9,922
7,396
(105)
852
808
43

Total assets

748,056

48

(Million yen)
42nd fiscal year
(As of March 31, 2024)

Item
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portions of bonds payable
Current portion of long-term borrowings
Lease obligations
Income taxes payable
Contract liabilities
Provision for bonuses
Other
Non-current liabilities
Bonds payable
Long-term borrowings
Lease obligations
Provision for share awards
Retirement benefit liability
Asset retirement obligations
Deferred tax liabilities
Other
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Non-controlling interests
Total net assets
Total liabilities and net assets

180,704
43,148
7,542
10,00026,735
13,61914,966860
4,082
59,748352,699
15,000224,369
42,723
378
274
6,814
57,102
6,037
533,403
193,355
47,497
74,112
85,461(13,715)
21,02924
158
20,845267
214,652
748,05649

Consolidated Statement of Income(Million yen)Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity method
Subsidy income
Other
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Insurance income
Gain on termination of retirement benefit plan
Other
Extraordinary losses
Loss on retirement of non-current assets
Impairment losses
Other
Net profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net profit
Profit attributable to non-controlling interests
Profit attributable to owners of parent

50

42nd fiscal year
(From April 1, 2023, to
March 31, 2024)
965,778
441,727524,050
470,342
53,707
2,571
850
5
6
570
1,138
5,365
3,790
147
1,427
50,913
573
64
128
179
202
3,960
1,890
1,350
719
47,52618,033(1,217)
16,81630,70916
30,693

Consolidated Statement of Changes in Shareholders’ Equity(From April 1, 2023, to March 31, 2024)(Million yen)
Shareholders’ equity

Share capital
Balance as of April 1, 2023
Cumulative effects ofchanges in accounting
policies
Restated balance as of April 1,
2023
Changes of items during
periodIssuance of new shares
Dividends of surplus
Profit attributable to ownersof parent
Purchase of treasury shares
Disposal of treasury shares
Transfer from share capitalto other capital surplus
Change of scope of
consolidation
Purchase of shares of
consolidated subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance as of March 31, 2024

Retainedearnings

Capital surplus

26,99623,809Treasury shares

60,576(6,915)

Total
shareholders’equity104,466

233
26,99623,80935,50135,501

233

60,810(6,915)

104,700(5,600)71,002(5,600)30,69330,693(6,799)(15,000)

0(6,799)0

15,000

–

(199)

(442)

(641)

–

–

–

–

–

–

–

20,50150,302

24,650(6,799)88,65547,497

74,112

85,461(13,715)

193,355

Accumulated other comprehensive income

Balance as of April 1, 2023
Cumulative effects ofchanges in accounting
policies
Restated balance as of April 1,
2023
Changes of items during
periodIssuance of new shares
Dividends of surplus
Profit attributable to ownersof parent
Purchase of treasury shares
Disposal of treasury shares
Transfer from share capitalto other capital surplus
Change of scope of
consolidation
Purchase of shares of
consolidated subsidiaries
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance as of March 31, 2024

Valuationdifferenceonavailablefor-salesecurities

Deferred
gains orlosses onhedgesRemeasurements ofdefinedbenefitplans

Foreigncurrencytranslation
adjustment

Total
accumulated
othercomprehensive income

Noncontrollinginterests

Total net
assets(58)(1,081)

58

12,248

11,167

203

115,837

(233)

(233)

12,015

10,933(58)(1,081)

58–
203

115,837

71,002(5,600)30,693(6,799)
0
–
(641)
–
83

1,240

(58)

8,830

10,09564

10,159

83

1,240

(58)

8,830

10,09564

98,81524

158–

20,84521,029267

214,652

51

Notes to Consolidated Financial Statements
1. Significant matters for basis of preparation of consolidated financial statements(1) Matters concerning scope of consolidation
1) Number and names of consolidated subsidiaries
Number of consolidated subsidiaries: 161
Names of principal consolidated subsidiaries
Zensho Fast Food Holdings Co., Ltd.
Sukiya Co., Ltd.
Nakau Co., Ltd.
Lotteria Co., Ltd.
Zensho Restaurant Holdings Co., Ltd.
Coco’s Japan Co., Ltd.
Jolly-Pasta Co., Ltd.
Big Boy Japan Co., Ltd.
TAG-1 Co., Ltd.
Hanaya Yohei Co., Ltd.
Olive Hill Co., Ltd.
Hama-Sushi Co., Ltd.
Nihon Retail Holdings Co., Ltd.
Joy Mart Co., Ltd.
United Veggies Co., Ltd.
Zensho Factory Holdings Co., Ltd.
GFF Co., Ltd.
Tolona Japan Co., Ltd.
Zensho Tradings Co., Ltd.
Global MD Holdings Co., Ltd.
Global Table Supply Co., Ltd.
Global Fresh Supply Co., Ltd.
Nihon Kaigo Holdings Co., Ltd.
Zensho USA Corporation
Advanced Fresh Concepts Corp.
Pocino Foods Company
Zensho China Holdings Co., Ltd.
Zensho Restaurant (Shanghai) Co., Ltd.
Zensho Taiwan Co., Ltd.
ZENSHO SOUTH EAST ASIA HOLDINGS PTE.
LTD.
Z ENSHO HOLDINGS MALAYSIA SDN.
TCRS Restaurants Sdn. Bhd.
BHD.
Zensho Europe Holdings B.V.
Sushi Circle Gastronomie GmbH
SnowFox Topco Limited(Notes) 1. A total of seven companies including Marix Co., Ltd. and other companies, which were nonconsolidated subsidiaries until the previous fiscal year, are included in the scope of
consolidation due to their increased importance during the fiscal year under review.
A total of 28 companies including Lotteria Co., Ltd., Sushi Circle Gastronomie GmbH, andSnowFox Topco Limited and other companies are included in the scope of consolidation due
to the acquisition of new shares during the fiscal year under review.
A total of 5 companies including ZENSHO INTERNATIONAL FOOD SERVICE LIMITED
and other companies are included in the scope of consolidation since they were newly
established in the fiscal year under review.
2. On April 1, 2024, Zensho Fast Food Holdings Co., Ltd. and Zensho Restaurant Holdings Co.,
Ltd. changed their names to Zensho Global Fast Food Holdings Co., Ltd. and Zensho Global
Restaurant Holdings Co., Ltd., respectively.

2) Matters concerning principal non-consolidated subsidiaries• Names of principal non-consolidated subsidiaries
Zensho Food India Private Limited and 4 other companies• Reasons for exclusion from the scope of consolidation
The non-consolidated subsidiaries are excluded from the scope of consolidation because they aresmall-scale companies and do not have a material impact on the consolidated financial statements withrespect to total assets, net sales, profit or loss, retained earnings, etc.
(2) Matters concerning application of the equity method
1) Matters concerning non-consolidated subsidiaries and affiliates subject to the equity method
Number of equity-method affiliates: 1
Names of companies, etc.
MARUI Wasabi, Inc.
2) Matters concerning non-consolidated subsidiaries or affiliates not subject to the equity method• Names of principal non-consolidated subsidiaries
Zensho Food India Private Limited and 4 other companies

52

•

Reasons the equity method is not applied
The non-consolidated subsidiaries and affiliates not subject to the equity method are excluded fromapplication of the equity method because the impact of each on profit or loss, retained earnings, etc., isnegligible, and is immaterial as a whole.

(3) Matters concerning fiscal year of consolidated subsidiaries
For 20 consolidated subsidiaries whose account closing dates differ from the Company’s consolidated
closing date, provisional financial statements prepared for consolidation as of the consolidated closing date
are used in the preparation of the consolidated financial statements.
(4) Matters concerning accounting policies
1) Basis and methods for valuation of significant assets
a. Basis and methods for valuation of securities
Available-for-sale securities
Securities other than shares, etc.,
Stated at market value. (Valuation difference is reported as athat do not have a market price:component of net assets. The cost of sales is calculated using
the moving average method.)
For compound financial instruments for which the fair valueof embedded derivatives cannot be measured separately, theentire compound financial instrument is measured at fair value
and the valuation difference is reported as profit or loss.
Shares, etc., that do not have aStated at cost using the moving average methodmarket price:b. Derivatives:
Stated at market valuec. Basis and methods for valuation of inventories
Merchandise:
Mainly stated at cost using the retail method (the figures
shown in the balance sheet have been calculated by writing
them down based on decline in profitability.)
Finished goods, work in process, and raw materials:
Mainly stated at cost using the first-in first-out method (thefigures shown in the balance sheet have been calculated bywriting them down based on decline in profitability.)
Supplies:
Mainly stated at cost using the last purchase price method (thefigures shown in the balance sheet have been calculated bywriting them down based on decline in profitability.)2) Depreciation or amortization method for significant depreciable or amortizable assets
a. Property, plant and equipment (excluding leased assets)
Mainly the straight-line method is applied
The main useful lives are as follows:
Buildings and structures
2 to 50 years
Tools, furniture and fixtures
2 to 20 years
b. Intangible assets
Straight-line method is applied
Software for internal use is amortized by the straight-line
method over the estimated useful life (5 years).
However, trademark rights whose useful life cannot be
determined are not amortized.
c. Leased assets
Lease assets relating to finance lease transactions withouttransfer of ownership are depreciated over the lease period by
the straight-line method assuming the residual value is zero or
the guaranteed residual value.
In addition, certain foreign consolidated subsidiaries haveadopted International Financial Reporting Standards (IFRS)
No. 16 “Leases” and, in principle, record all lessees’ leasetransactions as assets and liabilities, and depreciate such assets
with the straight-line method.

533) Standards of accounting for significant reserves
a. Allowance for doubtful accounts
To provide provision for possible losses on receivables, the allowance for doubtful accounts is provided
based on the historical write-off ratio for general receivables and on the estimated amount of uncollectible
receivable based on a case-by-case determination of collectability for specific receivables such as
doubtful receivables.
b. Provision for bonuses
To provide for the payment of bonuses to employees, a provision for bonuses is provided based on theestimated amount of future bonus payments.
c. Provision for share awards
To provide for the payment of the Company’s shares to Directors, etc. based on the Executive Stock
Benefit Regulations, a provision for share awards is provided based on the estimated amount of shareawards obligation.
(5) Other significant matters for preparing consolidated financial statements
1) Accounting treatment for deferred assets
Share issuance cost
Amortized using straight-line method over 3 years
Bond issuance cost
Amortized using straight-line method over the term of bonds2) Accounting treatment of retirement benefits
The Company and certain of its consolidated subsidiaries have adopted defined contribution pension
plan.
Also, certain of its consolidated subsidiaries have adopted defined benefit pension plan and theretirement benefits are calculated based on the simplified method.
3) Basis of translation of important assets and liabilities denominated in foreign currencies into yen
Foreign currency monetary receivables and payables are translated into yen based on the spot rate ofexchange in the foreign exchange market on the balance sheet date, and the foreign exchange gains andlosses from translation are recognized in the income statement. Assets and liabilities of overseas
consolidated subsidiaries, etc. are translated into yen based on the spot rate of exchanges in the foreignexchange market on the balance sheet date, while revenue and expenses are translated into yen based on
the average rate of exchange for the fiscal year. The differences resulting from such translations areincluded in “foreign currency translation adjustment” and “non-controlling interests” under net assets.
4) Hedge accounting method
a. Hedge accounting method
The Company applies the deferral accounting method.
Allocation treatment is applied for derivative transactions if they meet the criteria for allocation
treatment, and exceptional treatment is applied for interest rate swaps if they meet the criteria for
exceptional treatment. For investments in equity of overseas consolidated subsidiaries, foreign currencytranslation differences arising from hedging instruments are included in foreign currency translation
adjustment.
b. Hedging instruments and hedged items
Hedging instruments
Hedged items
Forward exchange contract
Accounts payable in foreign currency
Forward exchange contract
Accounts receivable in foreign currency
Investments in equity of overseas consolidated
Forward exchange contract
subsidiaries
Interest rate swaps
Interests on borrowingsc. Hedging policy
The policy aims to avoid risks from fluctuations in interest rates and foreign exchange rates for debt
obligations, monetary receivables and payables denominated in foreign currencies, and investments inequity of overseas consolidated subsidiaries, etc.
d. Method of assessing hedge effectiveness
The Company’s hedge transactions are deployed in accordance with the risk management policies of
the Company, and complete correlations are confirmed between hedging instruments and hedged items
resulting from fluctuations in interest rates and foreign exchange rates.

545) Basis for recording revenues and expenses
The Group is mainly engaged in the provision of services through the operation of restaurants, the saleof food products through the operation of supermarkets, etc., and the granting of franchise rights, and theprovision of store operation guidance.
Revenue from the provision of services is mainly derived from the provision of food based on customer
orders at restaurants in the Gyudon, Family Dining, and Fast Food Service categories, etc. Revenue isrecognized at the time the performance obligation is satisfied when the food is served to the customer andthe consideration is received.
Revenue from sales of food products, etc., consists of sales of food products, etc., at supermarkets, salesof food ingredients to franchisees, wholesale of processed food, etc. Revenue is recognized at the time theperformance obligation is satisfied when the products are delivered to customers.
Revenue related to the granting of franchise rights and the provision of store operation guidance tofranchisees (franchise fees and royalty income) is recognized in accordance with the actual terms of thetransactions. Franchise fees are recognized as a contract liability at the time the franchise agreement isentered into, and then recognized as revenue over a period of time in accordance with the satisfaction of
performance obligations. Royalty income is measured based on the sales of the counterparty, and revenue
is recognized when it is earned.
(6) Matters concerning amortization of goodwill
Goodwill is amortized by the straight-line method over a period of 20 years or less.

55

2. Notes to changes in accounting policies(Application of Accounting Standard for Current Income Taxes)
The Company has applied the “Accounting Standard for Current Income Taxes” (Accounting Standards
Board of Japan (“ASBJ”) Standard No. 27, October 28, 2022; the “Revised Accounting Standard of 2022”)
from the beginning of the fiscal year ended March 31, 2024.
Previously, calculated amounts of current income taxes on earnings, etc. (“Corporate Taxes, etc.”) wererecorded in profit or loss in accordance with laws and regulations. Moving forward, Corporate Taxes, etc., on
earnings will be recorded in profit or loss, shareholders’ equity, or other comprehensive income according to
the transaction, etc., from which it occurred Concerning Corporate Taxes, etc., recorded in accumulated othercomprehensive income, when a transaction, etc., is recorded in profit or loss that is the reason for said
Corporate Taxes, etc., to be applied, the corresponding amount of tax will be recorded in profit or loss.
Additionally, if the transaction, etc., subject to taxation is related to shareholders’ equity or othercomprehensive income in addition to profit or loss, and it is difficult to calculate the amount of Corporate
Taxes, etc., to be applied to shareholders’ equity or other comprehensive income, the amount of such taxes
will be recorded in profit or loss.
Revisions to categories for recording Corporate Taxes, etc. (taxation on other comprehensive income)conform to the transitional treatment in the proviso of Paragraph 20-3 of the Revised Accounting Standard of2022. The amount of cumulative effect on the initial fiscal year of application if retrospectively applying the
new accounting policy prior to the beginning of the initial fiscal year of application is added or subtracted toretained earnings at the beginning of the initial fiscal year of application, with the corresponding amountadded or subtracted to accumulated other comprehensive income.
As a result, for the fiscal year ended March 31, 2024, “income taxes current” increased by 644 million yen,“profit attributable to owners of parent” decreased by the same amount, and “foreign currency translation
adjustment” in other comprehensive income increased by the same amount. Additionally, for the fiscal year
ended March 31, 2024, the beginning balance of “retained earnings” increased by 233 million yen, and the
beginning balance of “foreign currency translation adjustment” in other comprehensive income decreased by
the same amount.
Furthermore, the Company has applied the revised “Guidance on Accounting Standard for Tax EffectAccounting” (ASBJ Guidance No. 28, October 28, 2022) from the beginning of the fiscal year ended March
31, 2024, but this has no effect on the consolidated financial statements.
3. Notes to changes in presentation method(Consolidated balance sheets)
The Company has included a portion of food ingredients, which were included in “merchandise andfinished goods” under “current assets” in the previous fiscal year, in “raw materials and supplies” under“current assets” from the fiscal year ended March 31, 2024, in order to make the classification more in linewith actual conditions based on the status of their use within the Group.
4. Additional information(Board Benefit Trust (BBT))The Company introduced a new performance-linked compensation system (BBT, or Board Benefit Trust)based on a resolution at the 40th Ordinary General Meeting of Shareholders held on June 24, 2022 for the
Directors and Executive Officers excluding Outside Directors (hereinafter collectively, “the Directors, etc.”).
(1) Overview of the deal
The System is a performance-linked stock compensation system under which the Company’s shares will
be acquired through a trust with cash contributed by the Company as the source of funds, and the Company’s
shares and cash equivalent to the amount obtained by converting the Company’s shares at fair value will be
paid to Directors, etc., in accordance with the Executive Stock Benefit Regulations established by theCompany. In principle, the time when Directors, etc., receive the Company’s Shares, etc., will be after theirretirement from office.
(2) Treasury shares remaining in the trust
Treasury shares remaining in the trust are recorded as treasury shares of the net assets at an carrying
amount of the trust (excluding incidental expenses). Carrying amount and number of shares of such treasury
shares are 1,054 million yen and 291 thousand shares, respectively, as of the end of the fiscal year underreview.

56

(3) Carrying amount of borrowings recorded using gross method
Not applicable.
5. Notes to accounting estimates(1) Determination of recognition of impairment losses on store assets in the Restaurant business
As of the end of the fiscal year under review, the Group recorded store assets related to the Restaurant
business of 115,254 million yen (property, plant and equipment of 115,074 million yen, intangible assets of
103 million yen, and investments and other assets of 76 million yen) in its consolidated balance sheets.
The Group groups such store assets mainly by store, and for stores with continuously negative cash flowfrom operating activities used in managerial accounting, the Company determines that the store assets show
signs of impairment and judges whether an impairment loss should be recognized, and recognizes
impairment loss for the store assets for which impairment losses are determined to be recognized.
In determining whether to recognize an impairment loss, the Company compares the total undiscounted
future cash flows of the store with the book value of the store assets. The estimated period of undiscounted
future cash flows is the average remaining useful life of major assets, and no growth rate is set for cash flows
for periods beyond the medium-term plan.
Of the stores for which the signs of impairment were recognized, the number of stores and book values ofthe major companies in the Restaurant business for which the recognition of impairment losses were
determined not to be required in the fiscal year under review are as follows:
Company nameNakau Co., Ltd.
Big Boy Japan Co., Ltd.
TAG-1 Co., Ltd.

Number of stores
15
17
10

Book value (Million yen)
96
214
676

(2) Determination of recognition of impairment losses on goodwill
As of the end of the fiscal year under review, the Group has recorded 13,616 million yen of goodwill on its
consolidated balance sheet.
The Group groups goodwill into larger units by adding goodwill to multiple asset groups related to thebusiness to which the goodwill belongs. For businesses with continuously negative operating profit (loss)(after taking into account amortization of goodwill), the Company determines that the goodwill shows signsof impairment and judges whether an impairment loss should be recognized, and recognizes impairment loss
for the goodwill for which impairment losses are determined to be recognized.
In determining whether to recognize an impairment loss, the Company compares the total undiscounted
future cash flows of the business to which the goodwill is attributable with the book value of the asset groupthat includes the goodwill. The estimated period of undiscounted future cash flows is the remaining usefullife of the goodwill, and no growth rate is set for cash flows for periods beyond the medium-term plan.
Of the goodwill for which the signs of impairment were recognized, there are three businesses (the Retailbusiness, Manufacturing and wholesaling business for external sales, and Nursing care business) to which
goodwill that was determined not to require recognition of impairment loss in the fiscal year under review
are attributed, and their book values are 6,199 million yen, 1,020 million yen, and 884 million yen,respectively.
6. Notes to the consolidated balance sheet(1) Assets pledged as collateral and secured liabilities
1) Assets pledged as collateral
Buildings and structures
Land2) Obligations related to the above properties
Long-term borrowings (including current
portion of long-term borrowings)(2) Accumulated depreciation of property, plant and equipment

57

244 million yen
1,139 million yen

501 million yen
268,213 million yen

7. Notes to the consolidated statements of income(Impairment losses)
The Group recognized impairment losses on the following asset groups.
Use
Type
Location
AmountDirectly-managed stores Buildings and structures, etc.
Japan (Tokyo, etc.)
874 million yen
Overseas (Shanghai, etc.)
476 million yen
Total
1,350 million yen
The Group groups assets primarily in units of directly-managed stores and leased properties, while
headquarters, production facilities, training facilities, etc. related to multiple divisions are considered to becommon assets.
Of these, the book value of directly-managed stores with deteriorating operating profit (loss) was reduced to
the recoverable amount, and an impairment loss of 1,350 million yen (817 million yen for buildings andstructures, and 533 million yen for others) was recognized.
The recoverable amount is based on the net realizable value or the value in use. The net realizable sale priceis mainly based on the roadside land price or the assessed value for property tax with reasonable adjustments,
while the value in use is mainly zero since cash flow is not expected.
8. Notes to consolidated statement of changes in shareholders’ equity(1) Total number of outstanding shares at the end of the fiscal year under review
Common stock
160,733,225 sharesClass A preferred shares
300 shares(2) Matters concerning dividends
1) Amount of dividends paid
Resolution
Ordinary General
Meeting of
Shareholders held on
June 23, 2023
Meeting of Board of
Directors held on
November 10, 2023
Meeting of Board of
Directors held on
November 10, 2023

(Notes)Type of stock

Total
dividends(Million yen)

Dividends
per share(Yen)

Record date

Effective dateCommon stock

1,825

12

March 31, 2023

June 26, 2023

Class Apreferred shares

829,589.04

September 30, 2023

December 5, 2023

Common stock

3,777

25

September 30, 2023

December 5, 2023

1. Total dividend amount resolved at the Ordinary General Meeting of Shareholders held on June23, 2023 includes dividends of 3 million yen for common stock held by Japan Custody Bank,
Ltd. (Trust Account E) as trust assets of the Board Benefit Trust (BBT).
2. Total dividend amount resolved at the meeting of Board of Directors held on November 10,
2023 includes dividends of 7 million yen for common stock held by Japan Custody Bank, Ltd.
(Trust Account E) as trust assets of the Board Benefit Trust (BBT).

2) Dividends with a record date in the current fiscal year but with an effective date in the following fiscal
year
Resolution
Meeting of Board of
Directors held on May
14, 2024
Meeting of Board of
Directors held on May
14, 2024(Note)

Type ofstock

Sourceoffunding

Total
dividends(Millionyen)

Dividends
per share(Yen)

Record date

Effective date

Class ApreferredsharesRetainedearnings

812

2,707,397.26

March 31, 2024

May 15, 2024

Commonstock

Retainedearnings

3,923

25

March 31, 2024

June 7, 2024

Total dividend amount resolved at the meeting of Board of Directors held on May 14, 2024
includes dividends of 7 million yen for common stock held by Japan Custody Bank, Ltd. (Trust
Account E) as trust assets of the Board Benefit Trust (BBT).

58

9. Notes on financial instruments(1) Matters concerning status of financial instruments
1) Policy regarding financial instruments
The Group raises necessary funds (mainly through bank loans and bond issuance) in light of its capital
investment plans. Temporary surplus funds are mainly invested in highly liquid financial assets, andshort-term working capital is raised through bank loans. Derivatives are used to avoid the risks described
below, and the Company’s policy is not to engage in speculative transactions.
2) Content of financial instruments and risks
Accounts receivable - trade, which are trade receivables, are exposed to the credit risk of counterparties.
Securities are compound financial instruments (exchangeable bonds) with embedded derivatives, andare exposed to credit risk and market price fluctuation risk.
Investment securities are mainly shares of companies with which the Company has business
relationships, and listed shares are exposed to market price fluctuation risk.
Investments in equity of overseas consolidated subsidiaries are exposed to foreign exchange fluctuation
risk, a portion of which is hedged by using forward exchange contracts.
Prepaid rent and long-term prepaid rent are construction assistance fund receivables and are collectedby offsetting rent paid, but are exposed to credit risk of the store property owner. Guarantee deposits arealso exposed to the credit risk of the store property owner and other counterparties.
Most accounts payable - trade, which are trade payables, are due within one month. Although some ofthem are denominated in foreign currencies and are exposed to foreign exchange fluctuation risk, suchrisk is hedged by using forward exchange contracts.
Bonds and borrowings are mainly for the purpose of financing capital investment, and the longest
maturity date is 35 years after the settlement date. A portion of these is exposed to interest rate fluctuation
risk, which is hedged using derivative transactions (interest rate swap transactions).
Lease liabilities related to finance lease transactions are for the purpose of financing capital investment
and are based on fixed interest rates.
Derivative transactions consist of forward exchange contracts to hedge foreign exchange fluctuation
risks associated with foreign currency-denominated trade receivables and payables and investments inequity of overseas consolidated subsidiaries, and interest rate swaps to hedge interest rate fluctuation risks
associated with borrowings. For hedging instruments, hedged items, hedging policy, and the method of
evaluating the effectiveness of hedging activities, please refer to “1. Significant matters for basis ofpreparation of consolidated financial statements; (5) Other significant matters for preparing consolidated
financial statements; 4) Hedge accounting method” above.
3) Risk management system for financial instruments
a. Management of credit risk (risk related to nonperformance by counterparties)
With regard to accounts receivable - trade, the Company manages due dates and balances bycounterparty. Consolidated subsidiaries also manage accounts receivable - trade in the same manner.
For securities, the Company recognizes that there is almost no credit risk because its issuers are limited
to financial institutions with high creditworthiness.
For construction assistance fund receivable and guarantee deposits, the Company regularly monitors thestatus of counterparties in order to mitigate risk by early detection of deterioration in their financial
conditions.
The Company recognizes that there is almost no credit risk in derivative transactions because thecounterparties are limited to financial institutions with high credit ratings.
b. Management of market risk (risk related to foreign exchange rate and interest rate fluctuation)
In principle, the Company uses forward exchange contracts to hedge foreign currency-denominatedtrade receivables and payables and investments in equity of overseas consolidated subsidiaries against therisk of exchange rate fluctuations in the respective currencies, which are periodically monitored. In
addition, the Company uses interest rate swaps to limit the risk of fluctuations in interest rates payable on
borrowings.
For securities, the Company periodically monitors market prices of the securities in question and thefair value information presented by financial institutions with which the Company has transactions.
With regard to investment securities, the Company periodically monitors market prices and financial
conditions of issuers, and reviews its holdings continuously by taking into consideration its relationships
with counterparty companies.
Derivative transactions are executed and managed by the department in charge with the approval of theperson in charge of approval, in accordance with the management regulations that stipulate transaction

59authority and limits on the transaction amount. Monthly transaction results are reported to the officer incharge.
c. Management of liquidity risk (risk related to failure to make payments by due date) related to funding
The Company manages liquidity risk by preparing and updating cash management plans in a timely
manner and maintaining liquidity on hand.
(2) Fair value, etc., of financial instruments
The amounts posted on the consolidated balance sheet, the fair values, and the difference thereof as ofMarch 31, 2024, are as follows.
Amount recordedon theFair value
Difference
consolidated(Million yen)
(Million yen)balance sheet(Million yen)
1. Accounts receivable - trade46,727
46,727–
2. Securities
19,907
19,907–
3. Investment securities (Note 2)
131
131
–
4. Prepaid rent and long-term prepaid
14,784
13,634(1,149)rent
5. Guarantee deposits
38,07437,521(552)
Total assets
119,625
117,922(1,702)
1. Accounts payable - trade43,14843,148–
2. Short-term borrowings
7,542
7,542
–
3. Bonds payable(including current portions of bonds(347)
25,00024,652
payable)
4. Long-term borrowings(including current portion of long251,104
248,778(2,326)term borrowings)
5. Lease liabilities(including current portion of lease
56,34256,015(326)
liabilities)
Total liabilities
383,138
380,137(3,000)Derivative transactions (Note 3)
241
241
–
(Notes) 1. Cash is omitted from the notes, and deposits are also omitted from the notes because they aresettled in a short period of time, and their fair value approximates their book value.
2. Shares, etc., that do not have a market price (2,030 million yen on the consolidated balance
sheet) are not included in “investment securities.”
3. Assets and liabilities generated by derivative transactions are shown as net amounts.
(3)60

Fair value information by appropriate classification within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to theobservability and materiality of inputs used to measure fair value.
Level 1 fair value:
Fair value calculated using (unadjusted) quoted prices of identical assets or
liabilities in active markets.
Level 2 fair value:
Fair value calculated using directly or indirectly observable inputs other than Level
1 inputs.
Level 3 fair value:
Fair value calculated using significant unobservable inputs.
If multiple inputs are used that are significant to the fair value measurement, the fair value measurement iscategorized in its entirety in the level of the lowest level input that is significant to the entire measurement.
1) Financial assets and liabilities measured at fair value
Classification
1. Securities
2. Investment securities
3. Derivative transactions
Total assets
1. Derivative transactions
Total liabilities

Level 1
–
131
–
131
–
–

Fair value (Million yen)
Level 2
Level 3
19,907–
241
20,149––2) Financial assets and liabilities other than those measured at fair value
Fair value (Million yen)Classification
Level 1
Level 2
Level 3
1. Accounts receivable –46,727trade
2. Prepaid rent and long–
13,634term prepaid rent
3. Guarantee deposits–
37,521
Total assets–
97,883
1. Accounts payable - trade–43,148
2. Short-term borrowings–
7,542
3. Bonds payable–
24,652
4. Long-term borrowing–
248,778
5. Lease liabilities–
56,015
Total liabilities–
380,137

–
–
–
–
–
–

Total
19,907131
241
20,280
–
–

Total
–

46,727–

13,634

–
–
–
–
–
–
–
–

37,521
97,88343,148
7,542
24,652
248,778
56,015
380,137(Note) A description of the valuation technique(s) and inputs used in the fair value measurements
Assets
1. Accounts receivable - trade
Since accounts receivable - trade are settled in a short period of time, their fair value approximates
their book value. Thus, such book value is used as their fair value.
2. Securities
Bonds are valued using prices quoted by financial institutions with which the Company has
transactions. As bonds are not traded in active markets, their fair value is classified as Level 2.
3. Investment securities
Listed shares are valued using quoted prices. As listed shares are traded in active markets, their fairvalue is classified as Level 1.
4. Prepaid rent and long-term prepaid rent
The fair value of prepaid rent and long-term prepaid rent is calculated based on the present value
calculated by discounting the yield of the government bonds immediately before the end of the fiscal
year from the total future cash flows, and is classified as Level 2.
5. Guarantee deposits
The fair value of guarantee deposits is calculated based on the present value calculated by discounting
the yield of government bonds immediately before the end of the fiscal year from the sum of theprincipal and interest (including interest-free ones), and is classified as Level 2.

61

Liabilities
1. Accounts payable - trade and 2. Short-term borrowings
Since accounts payable - trade and short-term borrowings are settled in a short period of time, their fairvalue approximates their book value. Thus, such book value is used as their fair value.
3. Bonds payable and 4. Long-term borrowings
The fair value of these items is measured using the discounted cash flow method based on the sum of
the principal and interest, remaining maturities, and an interest rate reflecting credit risk, and is classified
as Level 2.
5. Lease liabilities
The fair value of lease liabilities is calculated based on the present value calculated by discounting thesum of the principal and interest at the interest rate that would be applicable to similar new leasetransactions, etc., and is classified as Level 2.
Derivative transactions
The fair values of interest rate swaps and forward exchange contracts are based on the prices, etc.,
presented by the financial institutions with which the Company has transactions, and are classified as
Level 2. The fair value of interest rate swaps accounted for under exceptional accounting treatment isincluded in the fair value of long-term borrowings because they are accounted for as an integral part ofthe long-term borrowings that are hedged.
10. Notes to revenue recognition(1) Disaggregation of revenue from contracts with customers(Million yen)Goods andservicestransferred at apoint in time
Goods andservicestransferred overtime
Revenue fromcontracts withcustomers
Revenue fromother sources
Net sales toexternalcustomers

GlobalSukiyaGlobalHamasushi

Global Fast
Food

Corporateand Support

Restaurants

Retail265,341

197,057

170,206

140,545

77,351－073,554204

265,341

197,058

243,761––

265,341

197,058

Total

Other

Total

3,481

853,984

34,498888,482

1,078

975

75,813

1,481

77,295

140,750

78,4294,456

929,798

35,979965,778

–

–

–

–

–

–

–

243,761

140,750

78,4294,456

929,798

35,979965,778(2) Useful information in understanding revenue from contracts with customers
Useful information in understanding revenue is as presented in “1. Significant matters for basis ofpreparation of consolidated financial statements; (5) Other significant matters for preparing consolidated
financial statements; 5) Basis for recording revenues and expenses.”62

11. Notes to per share information
Net assets per share
Basic earnings per share

1,171.76 yen
195.41 yen(Note) In the calculation of net assets per share, the Company shares held by Japan Custody Bank, Ltd.
(Trust Account E) as trust assets for the “Board Benefit Trust (BBT)” are included in the number oftreasury shares of common stock deducted from the number of shares issued and outstanding at theend of the fiscal year, while in the calculation of basic earnings per share, those are included in thenumber of treasury shares of common stock deducted from the average number of shares
outstanding during the period.
The number of such treasury shares at the end of the fiscal year deducted in the calculation of net
assets per share is 291,800 shares for the fiscal year under review, and the average number of suchtreasury shares during the period deducted in the calculation of basic earnings per share 292,020
shares for the fiscal year under review.
12. Notes to significant subsequent events
No applicable items.

63Non-Consolidated Financial Statements
Non-consolidated Balance Sheet(Million yen)
42nd fiscal year
(As of March 31, 2024)

Item
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Advance payments to suppliers
Prepaid expenses
Prepaid rent
Accounts receivable - other
Short-term loans receivable
Current portion of long-term loans receivable
Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Intangible assets
Leasehold interests in land
Trademark right
Software
Other
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital of subsidiaries and associates
Long-term loans receivable
Long-term loans receivable from subsidiaries and associates
Long-term prepaid expenses
Long-term prepaid rent
Deferred tax assets
Guarantee deposits
Other
Allowance for investment loss
Deferred assets
Share issuance cost
Bond issuance cost
Total assets

64

214,577
37,92529,485
19,907
5,639
3
1,446
66
4,537
1,540
12,347103,1408,900
610(10,973)
320,053
33,276
8,161
144
377
0
1,189
14,221
9,151
31
4,180
91
0
3,699
388
282,5965
213,281
10,43820
19,9682,146
11,312797
24,413
253
(41)
852
808
43
535,482(Million yen)
42nd fiscal year
(As of March 31, 2024)

Item
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portions of bonds
Current portion of long-term borrowings
Lease obligations
Accounts payable - otherAccrued expenses
Income taxes payable
Contract liabilities
Deposits received
Provision for bonuses
Other
Non-current liabilities
Bonds payable
Long-term borrowings
Lease obligations
Provision for share awards
Provision for loss on guarantees
Asset retirement obligations
Guarantee deposits received
Other
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Treasury shares
Total valuation and translation adjustments
Deferred gains or losses on hedges
Total net assets
Total liabilities and net assets

100,708
23,80529,345
10,00026,050
901
4,150
1,068
296
3,182
238
1,474
193
283,852
15,000221,025
10,539
378
1,193
149
34,852
714
384,560
151,852
47,49786,65147,41939,231
31,41880
31,3383,000
28,338(13,715)
(930)
(930)
150,921535,48265

Non-consolidated Statement of Income(Million yen)Item
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Non-operating expenses
Interest expenses
Interest on bonds
Amortization of long-term prepaid expenses
Other
Ordinary profit
Extraordinary income
Other
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Loss on valuation of shares of subsidiaries and associates
Other
Net profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net profit

66

42nd fiscal year
(From April 1, 2023, to
March 31, 2024)
294,751
275,395
19,35520,027(671)
12,265
1,852
9,650
240
521
3,811
2,542
127
494
646
7,782
3
3
124
5
39
47
31
7,661
89
41
131
7,530

Non-consolidated Statement of Changes in Shareholders’ Equity(From April 1, 2023, to March 31, 2024)
Capital surplus

Balance as ofApril 1, 2023
Cumulative effects ofchanges inaccounting policies
Restated balance asof April 1, 2023
Changes of items
during period
Issuance of newsharesDividends ofsurplusProfitPurchase oftreasury shares
Disposal oftreasury shares
Transfer fromshare capital toother capitalsurplus
Net changes of
items other thanshareholders’equityTotal changes of
items during period
Balance as ofMarch 31, 2024

SharecapitalLegalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplus26,996

26,9189,230

36,14926,996

26,91835,50135,5019,230

80

36,149

3,000

80

3,000

Total
retainedearnings

TreasurysharesTotalshareholders’equity26,17529,255(6,915)85,485233

233

26,40829,488233(6,915)35,5010085,71871,002(5,600)(5,600)(5,600)

7,530

7,530

7,530
(6,802)(6,802)3

3(15,000)(15,000)

30,00015,00020,501

20,501

30,00050,501

–

–

1,929

1,929

(6,799)66,13347,49747,41939,231

86,65180

3,000

28,33831,418(13,715)

151,852

Valuation and translation adjustments
Deferred gains or losses
Total valuation andon hedges
translation adjustments
Balance as ofApril 1, 2023
Cumulative effects ofchanges in accounting
policies
Restated balance as ofApril 1, 2023
Changes of items during
periodIssuance of newsharesDividends of surplus
ProfitPurchase of treasury
shares
Disposal of treasury
sharesTransfer from sharecapital to othercapital surplus
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance as ofMarch 31, 2024

(Million yen)

Shareholders’ equity
Retained earnings
Other retained
earnings
Legal
Retainedretained
Generalearnings
earnings
reservebrought
forward

763

763

(233)

(233)

530

530

Total net assets
86,24886,24871,002(5,600)7,530(6,802)
3(1,459)(1,459)(1,459)(1,459)(1,459)64,674

(930)

(930)

150,92167

Notes to Non-consolidated Financial Statements
1. Notes to significant accounting policies(1) Basis and methods for valuation of securities
1) Shares in subsidiaries
Stated at cost using the moving average method
2) Available-for-sale securities
a. Securities other than shares, etc., that Stated at market value. (Valuation difference is reported as ado not have a market price:component of net assets. The cost of sales is calculated using
the moving average method.)
For compound financial instruments for which the fair valueof embedded derivatives cannot be measured separately, theentire compound financial instrument is measured at fair value
and the valuation difference is reported as profit or loss.
b. Shares, etc., that do not have aStated at cost using the moving average methodmarket price:(2) Valuation of derivatives

Stated at market value(3) Basis and methods for valuation of inventories
1) Merchandise, finished goods, raw materials, and work in process
Mainly stated at cost using the first-in first-out method (thefigures shown in the balance sheet have been calculated bywriting them down based on decline in profitability.)2) Supplies
Mainly stated at cost using the last purchase price method (thefigures shown in the balance sheet have been calculated bywriting them down based on decline in profitability.)(4) Depreciation method for non-current assets
1) Property, plant and equipment (excluding leased assets)
Straight-line method is applied
The main useful lives are as follows:
Buildings
2 to 47 years
2) Intangible assets
Straight-line method is applied
Software for internal use is amortized by the straight-line
method over the estimated useful life (5 years).
3) Leased assets
Lease assets relating to finance lease transactions withouttransfer of ownership are depreciated over the lease period by
the straight-line method assuming the residual value is zero or
the guaranteed residual value.

68(5) Standards of accounting for significant reserves
1) Allowance for doubtful accounts
To provide provision for possible losses on receivables such asloans receivable, the allowance for doubtful accounts isprovided based on a case-by-case determination ofcollectability for specific receivables such as doubtfulreceivables.
2) Provision for bonuses
To provide for the payment of bonuses to employees, aprovision for bonuses is provided based on the estimatedamount of bonus payments.
3) Provision for share awards
To provide for the payment of the Company’s shares to
Directors, etc. based on the Executive Stock Benefit
Regulations, a provision for share awards is provided based on
the estimated amount of share awards obligation.
4) Provision for loss on guarantees
To provide for losses related to guarantees of obligations toaffiliated companies, etc., an estimated amount of losses isrecorded, taking into consideration the financial conditions,etc., of the guaranteed companies.
5) Allowance for investment loss
To provide for losses related to investments in affiliatedcompanies, the Company records an amount deemednecessary, taking into consideration the financial conditions,etc., of the affiliated companies.
(6) Basis for recording revenues and expenses
The Company is principally engaged in sales of food ingredients and beverages and management andstore operation guidance to subsidiaries.
Revenue from sales of food ingredients and beverages is recognized at the time the goods are delivered
to the customer, as the performance obligation is satisfied at that time.
Management guidance fees to subsidiaries are calculated based on the sales, etc., of the subsidiaries,
and revenue is recognized by taking into consideration the time such fees are earned.
(7) Other significant matters for preparing non-consolidated financial statements
1) Accounting treatment for deferred assets
Share issuance cost
Amortized using straight-line method over 3 years
Bond issuance cost
Amortized using straight-line method over the term of bonds
2) Hedge accounting method
a. Hedge accounting method
The Company applies the deferral accounting method.
For derivative transactions, the exceptional accounting treatment is applied to interest rate swaps if theswaps meet the requirements for such exceptional treatment.
b. Hedging instruments and hedged items
Hedging instruments
Hedged items
Forward exchange contract
Investments in equity of overseas subsidiaries
Interest rate swaps
Interests on borrowingsc. Hedging policy
The policy aims to avoid risks from fluctuations in interest rates and foreign exchange rates for debt
obligations and investments in equity of overseas subsidiaries.
d. Method of assessing hedge effectiveness
The Company’s hedge transactions are deployed in accordance with the risk management policies of
the Company, and complete correlations are confirmed between hedging instruments and hedged items
resulting from fluctuations in interest rates and foreign exchange rates.

69

2. Notes to changes in accounting policies(Application of Accounting Standard for Current Income Taxes)
The Company has applied the “Accounting Standard for Current Income Taxes” (Accounting Standards
Board of Japan (“ASBJ”) Standard No. 27, October 28, 2022; the “Revised Accounting Standard of 2022”)
from the beginning of the fiscal year ended March 31, 2024.
Previously, calculated amounts of current income taxes on earnings, etc. (“Corporate Taxes, etc.”) wererecorded in profit or loss in accordance with laws and regulations. Moving forward, Corporate Taxes, etc., on
earnings will be recorded in profit or loss, shareholders’ equity, or other comprehensive income according to
the transaction, etc., from which it occurred Concerning Corporate Taxes, etc., recorded in accumulated othercomprehensive income, when a transaction, etc., is recorded in profit or loss that is the reason for said
Corporate Taxes, etc., to be applied, the corresponding amount of tax will be recorded in profit or loss.
Additionally, if the transaction, etc., subject to taxation is related to shareholders’ equity or othercomprehensive income in addition to profit or loss, and it is difficult to calculate the amount of Corporate
Taxes, etc., to be applied to shareholders’ equity or other comprehensive income, the amount of such taxes
will be recorded in profit or loss.
Revisions to categories for recording Corporate Taxes, etc. (taxation on other comprehensive income)conform to the transitional treatment in the proviso of Paragraph 20-3 of the Revised Accounting Standard of2022. The amount of cumulative effect on the initial fiscal year of application if retrospectively applying the
new accounting policy prior to the beginning of the initial fiscal year of application is added or subtracted toretained earnings at the beginning of the initial fiscal year of application, with the corresponding amountadded or subtracted to accumulated other comprehensive income.
As a result, for the fiscal year ended March 31, 2024, “income taxes current” increased by 644 million yen,“profit attributable to owners of parent” decreased by the same amount, and “foreign currency translation
adjustment” in other comprehensive income increased by the same amount. Additionally, for the fiscal year
ended March 31, 2024, the beginning balance of “retained earnings” increased by 233 million yen, and the
beginning balance of “foreign currency translation adjustment” in other comprehensive income decreased by
the same amount.
Furthermore, the Company has applied the revised “Guidance on Accounting Standard for Tax EffectAccounting” (ASBJ Guidance No. 28, October 28, 2022) from the beginning of the fiscal year ended March
31, 2024, but this has no effect on the non-consolidated financial statements.
3. Additional information(Board Benefit Trust (BBT))
Information has been omitted as the same information is presented in “4. Additional information” in theNotes to Consolidated Financial Statements.
4. Notes to accounting estimates
Valuation of investments in affiliated companies (investments in intermediate holding companies)
As of the end of the fiscal year under review, the Company included 109,247 million yen of investments ofintermediate holding companies in its non-consolidated balance sheet as shares of subsidiaries and associates
and investments in capital of subsidiaries and associates.
Regarding the valuation of investments in affiliated companies, when the actual value of investments inaffiliated companies declines significantly (generally by about 50%) due to deterioration in the financial
condition of the affiliated companies, a substantial reduction is made unless the possibility of recovery can besupported by sufficient evidence, and the valuation difference is treated as a loss for the period.
The actual value is calculated based on the net asset value of the affiliated company. In the case of anintermediate holding company, the actual value is calculated by taking into account the valuation difference
based on the fair value of assets, etc., and other factors.
The medium-term plan of the relevant affiliated company is considered as sufficient evidence to support thepossibility of recovery. However, in the case of an intermediate holding company, the medium-term plan ofthe entire intermediate holding company group, including its subsidiaries, is considered as sufficient evidence.
There are no investments in intermediate holding company investments, for which the substantial reduction
was deemed unnecessary despite the significant decline in the actual value of intermediate holding company,
including their operating subsidiaries, in consideration of the medium-term plan of the entire intermediateholding company group.

70

5. Notes to non-consolidated balance sheet(1) Accumulated depreciation of property, plant and equipment(2) Guarantee obligations
United Veggies Co., Ltd.; Accounts payable - trade
Joy Mart Co., Ltd.; Accounts payable - trade
Zenshoen Co., Ltd.; Borrowings
Provision for loss on guarantees
Net amount
Mizushita Farm Co., Ltd.; Borrowings
Provision for loss on guarantees
Net amount

18,923 million yen

66 million yen
222 million yen
411 million yen
262 million yen
149 million yen
1,240 million yen
931 million yen
309 million yen(3) Monetary claims and monetary obligations to affiliates (excluding those presented separately)
Short-term monetary claims
150,644 million yen
Short-term monetary obligations
40,699 million yen
Long-term monetary obligations
33,358 million yen
6. Notes to non-consolidated statement of income
Transactions with affiliates
Net sales
Purchase turnover
Other operating transactions
Transactions other than operating transactions

290,219 million yen
101,947 million yen
1,624 million yen
11,121 million yen

7. Notes to non-consolidated statement of changes in shareholders’ equity
Type and number of shares of treasury shares as of the end of the fiscal year under review
Common stock
4,068,435 shares(Note) The number of treasury shares of common stock at the end of the fiscal year under review includes
291,800 shares held by Japan Custody Bank, Ltd. (Trust Account E) for the “Board Benefit Trust(BBT).”
8. Notes to tax effect accounting(1) Breakdown of causes for occurrence of deferred tax assets and deferred tax liabilities
Deferred tax assets
Allowance for doubtful accounts
3,359 million yen
Provision for loss on guarantees
365 million yen
Provision for bonuses
451 million yen
Impairment losses
72 million yen
Accrued income tax
109 million yen
Amount in excess of depreciation and amortization of non-current assets
43 million yen
Shares of subsidiaries and associates
542 million yen
Tax loss carryforwards
1,208 million yen
Long-term accounts payable - other
216 million yen
Other
278 million yen
Valuation reserve(5,519 million yen)
Total deferred tax assets
1,127 million yen
Deferred tax liabilities
Shares of subsidiaries and associates
Other
Total deferred tax liabilities
Net deferred tax assets(266 million yen)
(63 million yen)(330 million yen)
797 million yen

71

(2) Accounting treatment of corporate and local income taxes or tax effect accounting treatment related tothese taxes
The Company has adopted the group tax sharing system. In accordance with the “Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System” (PITF No. 42; August 12, 2021), theCompany conducts accounting treatment or tax effect accounting treatment and disclosure related tocorporate income tax and local corporate income tax.
9. Notes concerning non-current assets used under lease
Finance lease transactions without transfer of ownership(1) Content of lease assets
Property, plant and equipment(2) Method of depreciation and amortization for lease assets
The method is as stated in “(4) Depreciation method for non-current assets” in Notes to significant
accounting policies.

72

10. Notes to related party transactions(1) Subsidiaries and affiliates, etc.
(Million yen)
Category

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Subsidiary

Name of company,etc.

Percentage
of votingrights held

Sukiya Co., Ltd.

Zensho Restaurant
Holdings Co., Ltd.
(Note 8)Coco’s Japan Co.,
Ltd.
(Note 8)Zensho Fast Food
Holdings Co., Ltd.

Zensho Tradings Co.,Ltd.

Relationshipwith related
partyContent oftransactions

100.00%(100.00%)(Note 6)–

Sales ofingredients, etc.
(Note 4)
Lease of stores(Note 3)100.00%–100.00%(100.00%)(Note 6)100.00%(22.46%)(Note 6)100.00%Hama-Sushi Co., Ltd.

Subsidiary

Nakau Co., Ltd.

Subsidiary

TAG-1 Co., Ltd.

Subsidiary

Subsidiary
Subsidiary
Subsidiary

Subsidiary

Subsidiary

GFF Co., Ltd.

Joy Mart Co., Ltd.
Nihon Retail
Holdings Co., Ltd.
Zensho USA
Corporation
ZENSHOINTERNATIONAL
FOOD SERVICE
LIMITEDZENSHOINTERNATIONAL
LIMITED100.00%100.00%(100.00%)(Note 6)100.00%(100.00%)(Note 6)

Item

Balance at
fiscalyear-end

86,746

Accounts
receivable - trade

7,648

14,116

Guarantee
deposits

13,789Lending of funds(Note 1)(600)

Short-term loans
receivable

15,457–

Lending of funds(Note 2)(2,000)Long-term loans
receivable

6,000

–

Dividend income

3,516

–

(14,000)

Short-term loans
receivable

10,000–Lending of funds(Note 1)
Purchase of foodingredients(Note 5)72,806

Accounts
payable - trade

1,152

78,442

Accounts
receivable - trade

7,776

Sales ofingredients, etc.
(Note 4)
Subsidiary

Transaction
amountLending of funds(Note 1)Dividend income
Lease of stores(Note 3)

–

–
2,791
10,203

Short-term loans
receivable–
Guarantee
deposits–

12,500–11,859–Lending of funds(Note 1)(500)

Short-term loans
receivable

5,500

–

Lending of funds(Note 1)

1,207

Short-term loans
receivable

8,285

Lending of funds(Note 1)

2,870

Short-term loans
receivable

8,500

Purchase of foodingredients(Note 5)68,169Accounts
payable - trade

6,586

100.00%(100.00%)(Note 6)

Interlocking
officers

100.00%(100.00%)(Note 6)–

Lending of funds(Note 1)

502

Short-term loans
receivable

7,850

Interlocking
officers
Interlocking
officers

Lending of funds(Note 2)–Long-term loans
receivable

10,439Dividend income

1,678

–

–

100.00%100.00%100.00%Interlocking
officers

Underwriting ofinvestment(Note 7)59,454––100.00%Interlocking
officers

Underwriting ofinvestment(Note 7)

48,108––(Note 1) Short-term loans and borrowings are based on the cash management system provided by theCompany to its Group companies. Since funds are transferred on a daily basis, the transaction
amount represents the increase or decrease from the balance at the end of the previous period.
Interest rates are determined reasonably, taking market interest rates into consideration.
(Note 2) Long-term loans are based on the cash management system provided by the Company to its Group
companies. Interest rates are determined reasonably, taking market interest rates into consideration.
Long-term loans receivable include the current portion of long-term loans receivable.
(Note 3) Store rent is determined based on the actual trading conditions in the neighborhood.
(Note 4) Selling prices are determined based on prevailing market prices.
(Note 5) Purchase prices are determined based on prevailing market prices.

73

(Note 6) Figures in parentheses in the percentage of voting rights held indicate indirect ownership and areincluded in the total.
(Note 7) The Company underwrote the investment in connection with the establishment of the company.
(Note 8) On April 1, 2024, Zensho Fast Food Holdings Co., Ltd. and Zensho Restaurant Holdings Co., Ltd.
changed their names to Zensho Global Fast Food Holdings Co., Ltd. and Zensho Global Restaurant
Holdings Co., Ltd., respectively.
11. Notes to per share information
Net assets per share
766.67 yen
Basic earnings per share
43.93 yen
(Note) In the calculation of net assets per share, the Company shares held by Japan Custody Bank, Ltd.
(Trust Account E) as trust assets for the “Board Benefit Trust (BBT)” are included in the number oftreasury shares of common stock deducted from the number of shares issued and outstanding at theend of the fiscal year, while in the calculation of basic earnings per share, those are included in thenumber of treasury shares of common stock deducted from the average number of shares
outstanding during the period.
The number of such treasury shares at the end of the fiscal year deducted in the calculation of net
assets per share is 291,800 shares for the fiscal year under review, and the average number of suchtreasury shares during the period deducted in the calculation of basic earnings per share 292,020
shares for the fiscal year under review.
12. Notes to significant subsequent events
No applicable items.

74

Audit Report
Audit Report by the Accounting Auditor for the Consolidated Financial Statements
Independent Auditor’s Report
May 14, 2024
To the Board of Directors
Zensho Holdings Co., Ltd.
Tokyo OfficePricewaterhouseCoopers Japan LLC
Designated Limited Liability Partner
Engagement Partner
Shigeru Takahama, CPA
Designated Limited Liability Partner
Engagement Partner
Kentaro Shimizu, CPA
Auditor’s opinion
Pursuant to Article 444, Paragraph 4 of the Companies Act, we have audited the accompanying consolidated
financial statements, which comprise the Consolidated Balance Sheet, the Consolidated Statement of Income, theConsolidated Statement of Changes in Net Assets and the Notes to the Consolidated Financial Statements ofZensho Holdings Co., Ltd. (the “Company”) for the fiscal year from April 1, 2023, through March 31, 2024.
In our opinion, the Consolidated Financial Statements referred to above present fairly, in all material respects,
the financial position and results of operations of the Group, which consists of the Company and its consolidated
subsidiaries, for the period covered by the consolidated financial statements in conformity with accounting
principles generally accepted in Japan.
Basis for the opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under the auditing standards are stated in “Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements.” We are independent of the Company and its consolidated subsidiaries in accordance with theprovisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor.
We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit
opinion.
Other information
Other information consists of the Business Report and its supplementary schedules. Management is
responsible for the preparation and disclosure of other information. The Audit & Supervisory Committee’s
responsibility is to monitor the Directors’ performance of their duties in preparing and operating the process forreporting other information.
Our audit opinion on the Consolidated Financial Statements does not include other information, and we
express no opinion on it.
Our responsibility in the audit of the Consolidated Financial Statements is to read other information and, in thecourse of reading other information, to consider whether there are material differences between otherinformation and the Consolidated Financial Statements or our knowledge obtained in the course of our audit, andto pay attention to whether there are indications of material error other than such material differences in otherinformation.
If, based on the work performed, we determine that there is a material error in other information, we are
required to report such fact.
We have no matters to report with respect to other information.
Responsibilities of Management, Members of the Audit & Supervisory Committee and the Audit & Supervisory
Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the Consolidated Financial Statementsin accordance with accounting principles generally accepted in Japan, and for designing and operating suchinternal control as management determines is necessary to enable the presentation and fair presentation of theConsolidated Financial Statements that are free from material misstatement, whether due to fraud or error.
In preparing the Consolidated Financial Statements, management is responsible for assessing whether it isappropriate to prepare the Consolidated Financial Statements in accordance with the premise of a going concern,and for disclosing matters relating to going concern when it is required to do so in accordance with accounting
principles generally accepted in Japan.

75

Members of the Audit & Supervisory Committee and the Audit & Supervisory Committee are responsible formonitoring the execution of Directors’ duties related to designing and operating the financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the Consolidated Financial Statements as
a whole are free from material misstatement, whether due to fraud or error, and to express an opinion on theConsolidated Financial Statements from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably expected
to, either individually or collectively, influence the decisions of users taken on the basis of the consolidated
financial statements.
We make professional judgment in the audit process in accordance with auditing standards generally acceptedin Japan, and perform the following while maintaining professional skepticism.
• Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures shall beselected and applied as determined by the auditor. In addition, sufficient and appropriate audit evidence
shall be obtained to provide a basis for the audit opinion.
• In making those risk assessments, the auditor considers internal control relevant to the entity’s audit inorder to design audit procedures that are appropriate in the circumstances, although the purpose of theaudit of the Consolidated Financial Statements is not to express an opinion on the effectiveness of theentity’s internal control.
• Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and theadequacy of related notes.
• Determine whether it is appropriate for management to prepare the Consolidated Financial Statementson the premise of a going concern and, based on the audit evidence obtained, determine whether there isa significant uncertainty in regard to events or conditions that may cast significant doubt on the entity’s
ability to continue as a going concern. If there is a significant uncertainty concerning the premise of agoing concern, the auditor is required to call attention to the Notes to the Consolidated Financial
Statements in the Audit Report, or if the Notes to the Consolidated Financial Statements pertaining to
the significant uncertainty are inappropriate, issue a modified opinion on the Consolidated Financial
Statements. While the conclusions of the auditor are based on the audit evidence obtained up to the dateof the audit report, depending on future events or conditions, an entity may be unable to continue as agoing concern.
• Besides assessing whether the presentation of and Notes to the Consolidated Financial Statements are inaccordance with accounting principles generally accepted in Japan, assess the presentation, structure,and content of the Consolidated Financial Statements including related notes, and whether theConsolidated Financial Statements fairly present the transactions and accounting events on which they
are based.
• Obtain sufficient and appropriate audit evidence regarding the financial information of the Company
and its consolidated subsidiaries in order to express an opinion on the Consolidated Financial
Statements. The auditor is responsible for instructing, supervising, and implementing the audit of theConsolidated Financial Statements, and is solely responsible for the audit opinion.
The auditor reports to Members of the Audit & Supervisory Committee and the Audit & Supervisory
Committee regarding the scope and timing of implementation of the planned audit, material audit findings
including material weaknesses in internal control identified in the course of the audit, and other matters required
under the auditing standards.
The auditor reports to Members of the Audit & Supervisory Committee and the Audit & Supervisory
Committee regarding the observance of provisions related to professional ethics in Japan as well as matters thatare reasonably considered to have an impact on the auditor’s independence and any measures in place toeliminate obstacles or safeguards applied to reduce obstacles to an acceptable level.
Interest
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries requiring
disclosure under the provisions of the Certified Public Accountants Act of Japan.

76

Audit Report by the Accounting Auditor for the Non-consolidated Financial Statements
Independent Auditor’s Report
May 14, 2024
To the Board of Directors
Zensho Holdings Co., Ltd.
Tokyo OfficePricewaterhouseCoopers Japan LLC
Designated Limited Liability Partner
Engagement Partner
Shigeru Takahama, CPA
Designated Limited Liability Partner
Engagement Partner
Kentaro Shimizu, CPA
Auditor’s opinion
Pursuant to Article 436, Paragraph 2, Item 1 of the Companies Act, we have audited the accompanying Nonconsolidated Financial Statements, which comprise the Non-consolidated Balance Sheet, the Non-consolidated
Statement of Income, the Non-consolidated Statement of Changes in Net Assets, the Notes to the Nonconsolidated Financial Statements and the accompanying supplementary schedules of Zensho Holdings Co., Ltd.
(the “Company”) for the 42nd fiscal year from April 1, 2023 through March 31, 2024.
In our opinion, the Non-consolidated Financial Statements and the accompanying supplementary schedules
referred to above present fairly, in all material respects, the financial position of the Company as of March 31,
2024, and the results of its operations for the year then ended in conformity with accounting principles generally
accepted in Japan.
Basis for the opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities
under the auditing standards are stated in “Auditor’s Responsibilities for the Audit of the Non-consolidated
Financial Statements and the Accompanying Supplementary Schedules.” We are independent of the Company inaccordance with the provisions related to professional ethics in Japan, and are fulfilling other ethicalresponsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence toprovide a basis for our audit opinion.
Other information
Other information consists of the Business Report and its supplementary schedules. Management is
responsible for the preparation and disclosure of other information. The Audit & Supervisory Committee’s
responsibility is to monitor the Directors’ performance of their duties in preparing and operating the process forreporting other information.
Our audit opinion on the Non-consolidated Financial Statements and the accompanying supplementaryschedules does not include other information, and we express no opinion on it.
Our responsibility in the audit of the Non-consolidated Financial Statements and the accompanying
supplementary schedules is to read other information and, in the course of reading other information, to consider
whether there are material differences between other information and the Non-consolidated Financial Statements
and the accompanying supplementary schedules or our knowledge obtained in the course of our audit, and to pay
attention to whether there are indications of material error other than such material differences in otherinformation.
If, based on the work performed, we determine that there is a material error in other information, we are
required to report such fact.
We have no matters to report with respect to other information.
Responsibilities of Management, Members of the Audit & Supervisory Committee and the Audit & Supervisory
Committee for the Non-consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the Non-consolidated Financial
Statements and the accompanying supplementary schedules in accordance with accounting principles generally
accepted in Japan, and for designing and operating such internal control as management determines is necessary
to enable the preparation and fair presentation of the Non-consolidated Financial Statements and theaccompanying supplementary schedules that are free from material misstatement, whether due to fraud or error.
In preparing the Non-consolidated Financial Statements and the accompanying supplementary schedules,
management is responsible for assessing whether it is appropriate to prepare the Non-consolidated Financial
Statements and the accompanying supplementary schedules in accordance with the premise of a going concern,77and for disclosing matters relating to going concern when it is required to do so in accordance with accounting
principles generally accepted in Japan.
Members of the Audit & Supervisory Committee and the Audit & Supervisory Committee are responsible formonitoring the execution of Directors’ duties related to designing and operating the financial reporting process.
Auditor’s Responsibilities for the Audit of the Non-consolidated Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the Non-consolidated Financial
Statements and the accompanying supplementary schedules as a whole are free from material misstatement,
whether due to fraud or error, and to express an opinion on the Non-consolidated Financial Statements and theaccompanying supplementary schedules from an independent standpoint in an audit report, based on our audit.
Misstatements can occur as a result of fraud or error, and are deemed material if they can be reasonably expected
to, either individually or collectively, influence the decisions of users taken on the basis of the Non-consolidated
Financial Statements and the accompanying supplementary schedules.
We make professional judgment in the audit process in accordance with auditing standards generally acceptedin Japan, and perform the following while maintaining professional skepticism.
• Identify and assess the risks of material misstatement, whether due to fraud or error. Design andimplement audit procedures to address the risks of material misstatement. The audit procedures shall beselected and applied as determined by the auditor. In addition, sufficient and appropriate audit evidence
shall be obtained to provide a basis for the audit opinion.
• In making those risk assessments, the auditor considers internal control relevant to the entity’s audit inorder to design audit procedures that are appropriate in the circumstances, although the purpose of theaudit of the Non-consolidated Financial Statements and the accompanying supplementary schedules is
not to express an opinion on the effectiveness of the entity’s internal control.
• Assess the appropriateness of accounting policies adopted by management and the method of theirapplication, as well as the reasonableness of accounting estimates made by management and theadequacy of related notes.
• Determine whether it is appropriate for management to prepare the Non-consolidated Financial
Statements and the accompanying supplementary schedules on the premise of a going concern and,based on the audit evidence obtained, determine whether there is a significant uncertainty in regard toevents or conditions that may cast significant doubt on the entity’s ability to continue as a going
concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor isrequired to call attention to the Notes to the Non-consolidated Financial Statements and theaccompanying supplementary schedules in the audit report, or if the Notes to the Non-consolidated
Financial Statements and the accompanying supplementary schedules pertaining to the significant
uncertainty are inappropriate, issue a modified opinion on the Non-consolidated Financial Statements
and the accompanying supplementary schedules. While the conclusions of the auditor are based on theaudit evidence obtained up to the date of the audit report, depending on future events or conditions, anentity may be unable to continue as a going concern.
• Besides assessing whether the presentation of and Notes to the Non-consolidated Financial Statements
and the accompanying supplementary schedules are in accordance with accounting principles generally
accepted in Japan, assess the presentation, structure, and content of the Non-consolidated Financial
Statements and the accompanying supplementary schedules including related notes, and whether the
Non-consolidated Financial Statements and the accompanying supplementary schedules fairly present
the transactions and accounting events on which they are based.
The auditor reports to Members of the Audit & Supervisory Committee and the Audit & Supervisory
Committee regarding the scope and timing of implementation of the planned audit, material audit findings
including material weaknesses in internal control identified in the course of the audit, and other matters required
under the auditing standards.
The auditor reports to Members of the Audit & Supervisory Committee and the Audit & Supervisory
Committee regarding the observance of provisions related to professional ethics in Japan as well as matters thatare reasonably considered to have an impact on the auditor’s independence and any measures in place toeliminate obstacles or safeguards applied to reduce obstacles to an acceptable level.
Interest
Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries requiring
disclosure under the provisions of the Certified Public Accountants Act of Japan.

78

Audit Report by the Audit & Supervisory Committee
Audit Report
The Audit & Supervisory Committee has audited the execution of duties by Directors for the 42nd fiscal year from April 1, 2023,
to March 31, 2024. The methods and results are reported as follows.
1. Audit methods and content
The Audit & Supervisory Committee received periodic reports from Directors and employees, etc., regarding resolutions of theBoard of Directors regarding the matters in Article 399-13, Paragraph 1, Item 1, b) and c) and the status of establishment andoperation of structures (internal control systems) that are maintained based on said resolutions, sought explanations andexpressed opinions as required, and implemented audits with the methods below.
1) Pursuant to audit policies and division of duties defined by the Audit & Supervisory Committee, Members of the Audit &Supervisory Committee, in cooperation with the Company’s Internal Control Division, attended important meetings,
received reports on matters regarding execution of duties by Directors and employees, etc., requested explanations as
required, viewed documents, etc., regarding important decisions, and examined the status of operations and assets at theheadquarters and principal offices. In addition, meetings were held with Outside Directors to exchange opinions andcommunicate with them on the status of the execution of duties by Directors.
Regarding subsidiaries, efforts were made to communicate and exchange information with Directors and Corporate
Auditors of subsidiaries, and business reports were received from subsidiaries as required.
2) In addition, in order to conduct appropriate audits as needed in response to the expansion of business operations, the Audit& Supervisory Committee endeavored to improve the audit environment by collecting information and exchanging
opinions through the Group’s Internet environment and other means, thereby enhancing the efficiency and speed of theaudits.
3) Furthermore, while supervising and evaluating whether or not the Accounting Auditor is maintaining an independent
standpoint and implementing appropriate audits, reports were received from the Accounting Auditor on the status ofexecution of duties, and explanations were requested as required. Additionally, notification was received from the
Accounting Auditor that “Systems to Secure the Appropriateness of Operations” (Matters in each item of Article 131 of
the Regulations on Corporate Accounting) were being maintained in accordance with “Quality Management Standards
Regarding Audits” (Business Accounting Council), and explanations were requested as required.
Based on the methods above, the Business Report, accompanying supplementary schedules, Non-consolidated Financial
Statements (Non-consolidated Balance Sheet, Non-consolidated Income Statement, Non-consolidated Statement of Changes in Net
Assets, and Notes to the Non-consolidated Financial Statements) and accompanying supplementary schedules, Consolidated
Financial Statements (Consolidated Balance Sheet, Consolidated Income Statement, Consolidated Statement of Changes in Net
Assets, and Notes to the Consolidated Financial Statements), and the Accounting Auditor’s Audit Report were evaluated.
2. Results of audit(1) Audit results for the Business Report, etc.
1) The Business Report and accompanying supplementary schedules are in compliance with laws and regulations andaccurately reflect the status of the Company.
2) There are no inappropriate actions regarding the execution of duties by Directors and significant facts that are in violationof laws and regulations or the Articles of Incorporation.
3) The content of resolutions by the Board of Directors regarding internal control systems are appropriate. Additionally,
there are no matters of note concerning the content of information provided in the Business Report regarding said internal
control systems nor the execution of duties by Directors.
(2) Audit results for the Non-consolidated Financial Statements and accompanying supplementary schedules
The methods and results of audits performed by PricewaterhouseCoopers Japan LLC, the Accounting Auditor, areappropriate.
(3) Audit results for the Consolidated Financial Statements and accompanying supplementary schedules
The methods and results of audits performed by PricewaterhouseCoopers Japan LLC, the Accounting Auditor, areappropriate.
May 14, 2024
Audit & Supervisory Committee, Zensho Holdings Co., Ltd.
Full-time Member of the Audit & Supervisory Committee
Hideo Watanabe
Member of the Audit & Supervisory Committee
Yukio Miyajima
Member of the Audit & Supervisory Committee
Kenichi Kaneko
Member of the Audit & Supervisory Committee
Hisashi Maruyama(Note)

Full-time Member of the Audit & Supervisory Committee Hideo Watanabe, Member of the Audit & Supervisory
Committee Yukio Miyajima, Member of the Audit & Supervisory Committee Kenichi Kaneko, and Member of the Audit& Supervisory Committee Hisashi Maruyama are Outside Directors as stipulated by Article 2, Item 15 and Article 331,
Paragraph 6 of the Companies Act.

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