Annual Report 2023
For the Year Ended 31st March 2023

PROFILE
Since its establishment in 1958, MARUDAI FOOD CO., LTD. has been dedicated tooffering delicious, high-quality meat products. In order to understand the latest
consumer trends and to meet the needs of modern lifestyles, we have continuously
strengthened our research, sales and production operations. Intending to become
Japan’s leading food company, we successfully listed our stock on the First Section of
the Tokyo Stock Exchange in 1972.
Starting as a ham and sausage producer, Marudai Food has steadily expanded its
range of products to include heat-processed, vacuum-packed food, dessert and beverage
products and fresh meats. Ham and sausage, however, remain an integral part of our
product line and continue to account for almost a third of our sales.
While pursuing a leading position in the ham and sausage market, Marudai Food waseager to explore new avenues by developing precooked and processed foods, which
went on sale in 1973. This long shelf-life food was developed to meet the specific needfor fast meal preparation. Containing absolutely no preservatives and requiring only
several minutes to prepare, Marudai precooked and processed foods have established astrong foothold in the market. Building on this success, we will make even greater
efforts to create new products that satisfy the increasingly discriminating tastes ofconsumers.

CONTENTSFINANCIAL HIGHLIGHTS .............................................................................. 1
TO OUR SHAREHOLDERS ............................................................................. 2
PRODUCTS ........................................................................................................ 3
CONSOLIDATED BALANCE SHEETS ........................................................... 5
CONSOLIDATED STATEMENTS OF INCOME ............................................. 7
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ........... 8CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS ............. 9
CONSOLIDATED STATEMENTS OF CASH FLOWS .................................. 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ........................ 11
INDEPENDENT AUDITOR’S REPORT ......................................................... 41
DIRECTORS AND STATUTORY AUDITORS ............................................... 46
OUTLINE OF THE COMPANY ...................................................................... 47

MARUDAI FOOD CO., LTD.

FINANCIAL HIGHLIGHTS
For the Years Ended 31st March 2023 and 2022
(Consolidated basis)Thousands of
U.S. dollars, except
per share amounts (Note)

Millions of yen,
except per share amounts
2023

2022

2023

Net sales ..................................................................................................

¥ 221,979¥ 218,610$ 1,662,266

Loss attributable to owners of parent ......................................................

(4,988)(376)(37,352)

Loss attributable to owners of parent (Note 2) ..................................

(198.77)(14.88)(1.49)

Profit attributable to owners of parent, diluted (Note 2) ....................

–

–

–

Dividends (Note 13) ..........................................................................

20.00

30.00

0.15

Total assets ..............................................................................................

¥ 126,261¥ 128,904$ 945,492

Per share (yen and dollars):

Note: U.S. dollar amounts are translated from yen for convenience only at the rate of ¥133.54 to U.S.$1.00.

1MARUDAI FOOD CO., LTD.

TO OUR SHAREHOLDERS

rapid depreciation of the yen have led to higher
production costs for raw materials, energy, and otheritems. Moreover, a series of price increases for daily
necessities, including food and other daily necessities,
have had a significant impact on households as
consumers became more budget-conscious.
Regarding the meat market, the market prices ofdomestic beef were below the previous year’s level as
demand decreased due to high prices and other factors.
While local market prices for U.S. beef and pork havegenerally remained below the previous year’s levels,
import prices have remained high due to the impact offoreign exchange rates. In addition, the market prices ofdomestic pork were higher than they were in the previous
year due to increased demand as a result of factors suchas the rising prices of imported pork.
In these circumstances, the Marudai Food Group
conducted its corporate activities with the aim ofadvancing its reputation as an enterprise with a social
mission, namely a comprehensive food products company
offering merchandise that satisfies the highest standardsof safety and reliability.
Due in part to budget consciousness among consumers
as a result of price revisions, sales in the Processed Food
Products segment declined for the fiscal year ended 31st
March 2023, and higher raw material and energy costs
exceeded the price revisions, making it difficult to secure
segment income, despite striving to improve profits
through price revisions and reducing costs throughrationalization. In this business environment, the Groupwill implement reforms to the profit structure with theaim of maximizing its value.

With the issuance of our company’s 75th annual report,
we hope that our shareholders are enjoying health andprosperity. We would also like to take this opportunity to
express our deep appreciation for your continued support.

As a result, consolidated net sales for the fiscal year
ended 31st March 2023 increased by 1.5% year on year to¥221,979 million. Operating loss was ¥1,400 million,
compared to operating loss of ¥865 million in the previous
fiscal year. In addition to extraordinary losses of ¥2,622
million in restructuring expenses, ¥1,159 million inincome taxes - deferred due to the reversal of deferred
tax assets resulted in loss attributable to the owners of
the parent of ¥4,988 million, compared to loss attributable
to the owners of parent of ¥376 million in the previous
fiscal year.

During the fiscal year ended 31st March 2023, theJapanese economy continued to show a gradual recovery,
including a recovery in personal consumption due
primarily to the effects of various policies, the absence ofrestrictions such as the priority measures to prevent the
spread of COVID-19, with the aim of balancing infection
prevention and economic activities, despite continued
vigilance against COVID-19. However, the outlook for the
economy remains unpredictable, due mainly to the risk ofa downturn in overseas economies that could put
downward pressure on the Japanese economy as well as
rising prices, supply-side constraints and fluctuations infinancial and capital markets amid continued global
monetary tightening and other factors.

Once again we would like to thank you, ourshareholders, for your support and trust that we can relyon the parent your continued confidence.
June 2023.

In the industry in which the Marudai Food Group
operates, despite signs of recovery in restaurant demand,the environment remained severe as uncertainty over thesituation in Ukraine and other factors coupled with the

Yuji Sato
President and Representative Director

2

MARUDAI FOOD CO., LTD.

PRODUCTS

The following table is a breakdown of the consolidated sales of MARUDAI FOOD CO., LTD. and its consolidated
subsidiaries (together, the “Companies”) by product categories for the years ended 31st March 2023 and 2022:

Millions of yen(percent of total net sales)

Processed Food Products ........................................................................

Meat Products .........................................................................................

Other .......................................................................................................

Total ...................................................................................................

2023

2022

¥ 147,093¥ 148,012(66.2%)(67.7%)

74,75970,455(33.7%)(32.2%)

127

143(0.1%)(0.1%)¥ 221,979¥ 218,6102023

Note: U.S. dollar amounts are translated from yen for convenience only at the rate of ¥133.54 to U.S.$1.00.

3

Thousands of
U.S. dollars (Note)$ 1,101,490

559,825951$ 1,662,266

Processed Food Products
The Ham & Sausage Products operations conducted sales promotion activities, including menu proposals and campaigns,
using social networking services with a focus on “Kunseiya-Ripened Pork Sausage” in an effort to expand sales. In order to meetthe segmented needs of consumers, three types of sausages with different characteristics, including “Sugar-cut Prime Pork
Sausages,” were newly introduced from the “Prime Pork Sausage” series as well as fish sausage and pork sausage featuring the
globally popular character, “BT2 1.” As for midyear and year-end gifts, “Seaweed Salt MEISTER Zero Sugar” using domestic
pork was introduced in order to expand sales. Overall sales in the Ham & Sausage Products operations decreased by 3.1% year on
year mainly due to a decline in sales volume as consumers became more budget-conscious due to price revisions.
In the Precooked & Processed Foods operations, in addition to campaigns and other sales promotion activities, social
networking services were also used to increase awareness of the “Sundubu” tofu stew series. Sales of “Bistro Club Rich Curry”
increased as a result of efforts to acquire sales space, and sales of the “Salad Chicken” series increased from the previous year
due to the introduction of new products. New products such as “Biryani Mix” and “Gapao Mix” were also introduced from the“Trip at Home” series, and sales of rice products for convenience stores and whipped cream were also strong. As a result, sales in
the Precooked & Processed Foods operations increased by 1.4% year on year.
Sales in the Processed Food Products segment amounted to ¥147,093 million, a decrease of 0.6% year on year. Segment lossof ¥1,654 million was recorded (compared to segment loss of ¥1,077 million in the previous fiscal year) owing mainly to adecrease in sales in the Ham & Sausage Products operations and an increase in raw material and energy costs that exceeded pricerevisions, despite striving to reduce costs through rationalization.
Meat Products
With regard to beef, sales to mass retailers remained sluggish as consumers became more budget-conscious. However, overall
beef sales exceeded the previous year’s level due to factors such as a recovery in sales to restaurants. Regarding pork, sales ofboth domestic and imported meat exceeded the previous year’s level due to efforts to strengthen sales to restaurants and higher
unit sales prices to mass retailers.
As a result, sales in the Meat Products segment increased by 6.1% year on year to ¥74,759 million. Segment income increased
by 17.7% year on year to ¥204 million.
Other
Sales in the Other business decreased by 11.1% year on year to ¥127 million, and Segment income increased by 29.3% year
on year to ¥50 million.

4

MARUDAI FOOD CO., LTD.

CONSOLIDATED BALANCE SHEETS
31st March 2023 and 2022

Millions of yen
2023

ASSETS
Current assets:
Cash and time deposits (Notes 3 and 19) ...........................................
Receivables:
Trade notes and accounts receivable (Note 3) .............................
Other ............................................................................................
Allowance for doubtful accounts .................................................
Inventories (Note 6) ...........................................................................
Advances and other current assets ....................................................
Total current assets ......................................................................
Investments and other assets:
Investment securities (Notes 3 and 4)
Affiliates ......................................................................................
Other ............................................................................................
Retirement benefit asset (Note 10) .....................................................
Deferred tax assets (Note 11) ............................................................
Other ..................................................................................................
Allowance for doubtful accounts ......................................................
Total investments and other assets ...............................................
Property, plant and equipment, at cost:
Land (Notes 8 and 15) .......................................................................
Buildings and structures (Notes 8 and 15) ........................................
Machinery and equipment (Notes 8 and 15) .....................................
Lease assets .......................................................................................
Construction in progress ...................................................................
Less accumulated depreciation ..........................................................
Net property, plant and equipment ...............................................
Intangible assets ....................................................................................
Total assets ........................................................................................
See accompanying Notes to Consolidated Financial Statements.

5

¥

6,916

2022

¥

7,991

Thousands of
U.S. dollars (Note 1)
2023$

51,79023,8971,091(14)
19,232295
51,41723,4371,076(11)
16,874446
49,813

178,950
8,170(105)
144,0172,209
385,031263
11,439
1,861
318
2,191
(121)
15,951

218
11,719
2,131
320
2,480
(130)
16,7381,969
85,66013,936
2,381
16,407(906)
119,447

18,346
63,371
79,714
9,123
486
171,040(113,720)
57,3201,573¥ 126,261

18,72362,79578,2629,205
500
169,485(109,399)
60,0862,267¥ 128,904

137,382
474,547
596,930
68,317
3,639
1,280,815(851,580)
429,235
11,779$ 945,492

Millions of yen
2023
2022

LIABILITIES AND NET ASSETS

Thousands of
U.S. dollars (Note 1)
2023

Current liabilities:
Payables:Trade notes and accounts payable ...............................................
Other ............................................................................................
Short-term borrowings (Note 7) ........................................................
Long-term debt due within one year (Notes 7 and 8) .......................
Short-term lease obligations (Note 7) ...............................................
Accrued income taxes .......................................................................
Allowance for bonuses ......................................................................
Provision for restructuring (Note 16) ................................................
Other current liabilities .....................................................................
Total current liabilities .................................................................

¥ 20,754
6,715
9,858
2,917
1,024
215
781
179
1,620
44,063¥ 20,914
6,216
8,100
2,818
1,084
171
810
–
1,617
41,730$ 155,414
50,28573,821
21,844
7,668
1,610
5,848
1,340
12,131
329,961Long-term liabilities:
Long-term debt due after one year (Notes 7 and 8) ..........................
Long-term lease obligations (Note 7) ................................................
Deferred tax liabilities (Note 11) ......................................................
Liabilities for retirement benefits (Note 10) .....................................
Provision for restructuring (Note 16) ................................................
Other long-term liabilities .................................................................
Total long-term liabilities ............................................................

5,256
3,735
1,961
1,467
144
621
13,184

4,551
4,119
992
1,379
–
644
11,68539,35927,96914,685
10,985
1,078
4,651
98,727NET ASSETS (Note 13)
Shareholders’ equity:
Common stock
Authorised — 40,000,000 shares in 2023 (40,000,000 shares in 2022)
Issued — 26,505,581 shares in 2023 (26,505,581 shares in 2022) .......
Capital surplus ...................................................................................
Retained earnings ..............................................................................
Treasury stock, at cost .......................................................................
Total shareholders’ equity ...........................................................

6,716
22,08638,389(3,342)
63,8496,716
22,08644,133(3,066)69,86950,292
165,389
287,472(25,027)
478,126

Accumulated other comprehensive income:Unrealised gains on securities ...........................................................
Deferred gains on hedges ..................................................................
Foreign currency translation adjustments ..........................................
Adjustments for retirement benefits ..................................................
Total accumulated other comprehensive income .........................

4,953
0
57
(527)
4,483

4,990
71
34
(133)
4,962

37,0900427(3,946)33,571

682
69,014¥ 126,261

658
75,489¥ 128,904

5,107
516,804$ 945,492

Contingent liabilities (Note 12)

Noncontrolling interests ........................................................................
Total net assets ..................................................................................
Total liabilities and net assets ............................................................
See accompanying Notes to Consolidated Financial Statements.
6

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF INCOME
Years Ended 31st March 2023 and 2022

Net sales .................................................................................................
Cost of sales (Note 6) .............................................................................

Millions of yen
2023
2022
¥ 221,979¥ 218,610
191,495
186,652

Thousands of
U.S. dollars (Note 1)2023$ 1,662,266
1,433,990

Gross profit .......................................................................................
Selling, general and administrative expenses (Note 14) .....................

30,48431,884

31,95832,823228,276
238,760

Operating loss ....................................................................................

(1,400)(865)(10,484)

354
149
(223)
644
(146)
(172)
(2,622)
(271)
(34)
222

379
163
(221)
430
(220)
(9)
–
–
(20)
134

2,651
1,116
(1,670)
4,823(1,093)(1,288)(19,635)(2,029)
(255)
1,662

(2,099)636(15,718)

Loss before income taxes .......................................................................

(3,499)(229)(26,202)

Income taxes (Note 11):
Current ...............................................................................................
Deferred .............................................................................................

301
1,159

239
(141)

2,254
8,679

1,460

98

10,933

Loss .........................................................................................................
Profit attributable to noncontrolling interests ....................................

(4,959)
(29)

(327)
(49)

(37,135)(217)

Loss attributable to owners of parent ...................................................

¥ (4,988)

Loss attributable to owners of parent per share (Note 2) ...................

¥ (198.77)¥ (14.88)

Profit attributable to owners of parent, diluted per share (Note 2) ..

––Other income (expenses):
Interest and dividend income ............................................................
Real estate rent ..................................................................................
Interest expense .................................................................................
Gain on sale of securities, net (Note 4) .............................................
Loss on disposal of property, plant and equipment, net ....................
Loss on impairment of fixed assets (Note 15) ...................................
Restructuring expenses (Note 16) .....................................................
Loss on abandonment of inventories (Note 6) ..................................
Special retirement expenses (Note 10) ..............................................
Other, net ...........................................................................................

¥

(376)

See accompanying Notes to Consolidated Financial Statements.

7

¥

20.00

(37,352)

U.S. dollars (Note 1)

Yen

Dividends per share (Note 13) ..............................................................

$

¥

30.00

$

(1.49)–$

0.15

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended 31st March 2023 and 2022

Loss .........................................................................................................
Other comprehensive income:Unrealised gains on securities ...........................................................
Deferred gains (losses) on hedges .....................................................
Adjustments for retirement benefits ..................................................
Share of other comprehensive income of associates accounted for using equity method ...
Total other comprehensive income (Note 20) .............................
Comprehensive income .........................................................................
Comprehensive income attributable to:
Owners of the parent .........................................................................
Noncontrolling interests ....................................................................
See accompanying Notes to Consolidated Financial Statements.

8

Millions of yen
2023
2022
¥ (4,959)¥ (327)

Thousands of
U.S. dollars (Note 1)
2023$ (37,135)

(37)
(71)
(394)
23
(479)
¥ (5,438)

(954)
36
119
(0)
(799)
¥ (1,126)

(277)
(532)
(2,950)172(3,587)$ (40,722)¥ (5,467)¥29¥ (1,175)¥49$ (40,939)$
217

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Years Ended 31st March 2023 and 2022

Thousands of
U.S. dollars (Note 1)
2023

Millions of yen
2023
2022
Common stock:
Balance at beginning and end of the year .........................................

¥ 6,716¥ 6,716$ 50,292

Capital surplus:
Balance at beginning and end of the year .........................................

¥ 22,086¥ 22,086$ 165,389

Retained earnings:
Balance at beginning of the year .......................................................
Cash dividends paid ..........................................................................
Loss attributable to owners of parent .................................................
Balance at end of the year .................................................................

¥ 44,133(756)(4,988)¥ 38,389¥ 45,271
(762)
(376)
¥ 44,133$ 330,485(5,661)(37,352)$ 287,472

Treasury stock, at cost:
Balance at beginning of the year .......................................................
Purchase of treasury stock .................................................................
Balance at end of the year .................................................................

¥ (3,066)(276)¥ (3,342)¥ (2,697)(369)¥ (3,066)$ (22,960)(2,067)$ (25,027)

Unrealised gains on securities:
Balance at beginning of the year .......................................................
Decrease for the year .........................................................................
Balance at end of the year .................................................................

¥ 4,990(37)¥ 4,953¥ 5,944(954)¥ 4,990$ 37,367(277)$ 37,090

¥

71
(71)
0

¥

35
36
71

$

34
23
57

¥

34
(0)
34

$

(133)
(394)
(527)

¥

(252)
119
(133)

$

(996)
(2,950)$ (3,946)

613
45
658

$

Deferred gains (losses) on hedges:
Balance at beginning of the year .......................................................
Increase (decrease) for the year .........................................................
Balance at end of the year .................................................................
Foreign currency translation adjustments:
Balance at beginning of the year .......................................................
Increase (decrease) for the year .........................................................
Balance at end of the year .................................................................
Adjustments for retirement benefits:
Balance at beginning of the year .......................................................
Increase (decrease) for the year .........................................................
Balance at end of the year .................................................................
Noncontrolling interests:
Balance at beginning of the year .......................................................
Increase for the year ..........................................................................
Balance at end of the year .................................................................
See accompanying Notes to Consolidated Financial Statements.

9

¥
¥
¥
¥
¥
¥
¥

658
24
682

¥

¥

¥
¥
¥

$

$

$

532
(532)
0
255
172
427

4,927
180
5,107

MARUDAI FOOD CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended 31st March 2023 and 2022

Millions of yen
2023
2022

Thousands of
U.S. dollars (Note 1)
2023

Cash flows from operating activities:
Loss before income taxes ..................................................................
Depreciation and amortisation ..........................................................
Loss on impairment of fixed assets ...................................................
Restructuring expenses ......................................................................
Increase (decrease) in allowance for doubtful accounts ....................
Decrease in liabilities for retirement benefits ...................................
Special retirement expenses ..............................................................
Interest and dividend income ............................................................
Interest expense .................................................................................
Gain on sale of securities, net ............................................................
Loss on valuation of investment securities ........................................
Loss on disposal of property, plant and equipment, net ....................
Decrease (increase) in receivables ....................................................
Increase in inventories .......................................................................
Increase (decrease) in trade notes and accounts payable ..................
Increase (decrease) in consumption tax payable ...............................
Other, net ...........................................................................................
Subtotal ........................................................................................
Interest and dividends received .........................................................
Interest paid .......................................................................................
Income taxes paid ..............................................................................
Income taxes refunded ......................................................................
Payments for special retirement expenses .........................................
Net cash provided by operating activities ....................................

¥ (3,499)
7,694
172
2,622
(6)
(167)
34
(354)
223
(644)
–
146
(456)
(2,349)
(146)
(8)
(316)
2,946
379
(223)
(334)
159
(20)
2,907

¥ (229)
7,946
9
–
15
(322)
20
(379)
221
(430)
30
220
406
(1,013)
707
44
(299)
6,946
358
(221)
(298)
450
(204)
7,031

$ (26,202)
57,616
1,288
19,635(45)(1,251)255(2,651)
1,670(4,823)–
1,093(3,415)(17,590)(1,093)(60)(2,366)22,061
2,838(1,670)(2,501)
1,191(150)
21,769Cash flows from investing activities:
Purchase of short-term investments and investment securities ..........
Proceeds from sale of short-term investments and investment securities ...
Purchase of property, plant and equipment ...........................................
Proceeds from sale of property, plant and equipment .......................
Other, net ..........................................................................................
Net cash used in investing activities ............................................

(35)
895
(5,558)465(283)(4,516)(35)
681(6,778)647(204)(5,689)

(262)
6,702
(41,620)
3,482(2,120)(33,818)

Cash flows from financing activities:
Net increase in short-term borrowings ..............................................
Proceeds from long-term debt ...........................................................
Repayment of long-term debt ............................................................
Repayment of lease obligations .........................................................
Cash dividends paid ..........................................................................
Purchase of treasury shares ...............................................................
Other, net ...........................................................................................
Net cash provided by (used in) financing activities .....................

1,758
3,622
(2,818)
(992)
(756)
(276)
(4)
534

210
2,720
(2,658)
(964)
(762)
(369)
(4)
(1,827)

13,16527,123(21,102)(7,428)(5,661)(2,067)(31)
3,999

Net decrease in cash and cash equivalents ..........................................
Cash and cash equivalents at beginning of year .................................
Cash and cash equivalents at end of year (Note 19) ...........................

(1,075)
7,991¥ 6,916

(485)
8,476
¥ 7,991(8,050)59,840$ 51,790

See accompanying Notes to Consolidated Financial Statements.

10

MARUDAI FOOD CO., LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For years Ended 31st March 2023 and 2022

1. Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of MARUDAI FOOD CO., LTD. (the “Company”) and its consolidated
subsidiaries (together, the “Companies”) have been prepared in accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Law and its related accounting regulations and in conformity with accounting principles generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements fromInternational Financial Reporting Standards.
The accompanying consolidated financial statements have been restructured and translated into English from the consolidated
financial statements of the Company prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance
Bureau of the Ministry of Finance as required by the Japanese Financial Instruments and Exchange Act. Certain supplementary
information included in the statutory Japanese language consolidated financial statements, but not required for fair presentation,
is not presented in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside
Japan, using the prevailing exchange rate at 31st March 2023, which was ¥133.54 to U.S. $1.00. These translations should not be
construed as representations that the Japanese yen amounts have been, could have been or could in the future be converted into
U.S. dollars at this or any other rate of exchange.
2. Significant accounting policies
Consolidation - The consolidated financial statements include the accounts of the Company and its 26 subsidiaries. For the
fiscal year ended 31st March 2023, Marudaifood Supply Co., Ltd. was newly established and included in the scope of
consolidation. Okinawa Marudai Food Co., Ltd. and Kitanosachi Co., Ltd. were excluded from the scope of consolidation as theliquidation of these companies had been completed. All of the Company’s subsidiaries have the same fiscal year end as theCompany, 31st March.
All intercompany balances, transactions and profits have been eliminated. In the elimination of investments in subsidiaries,
the assets and liabilities of the subsidiaries, including the portion attributable to noncontrolling shareholders, are evaluated using
the fair value at the time the Company acquired control of the respective subsidiary. The difference between the cost of aninvestment and the equity in the assets at the date of acquisition is amortized over five years. Equity method accounting is applied
to affiliates which are substantially controlled by the Company. Betagro MF Deli Co., Ltd. is being included in the scope of theCompanies to which the equity method is applied.
Cash and cash equivalents - Cash on hand, readily available deposits and short-term highly liquid investments with maturities
not exceeding three months at the time of purchase are considered cash and cash equivalents.
Securities - Available-for-sale securities with available fair market value are stated at fair market value. Unrealized gains andlosses on these securities are reported, net of applicable income taxes, as a separate component of shareholders’ equity. Securities
other than stocks with no market price are calculated using the market value method. Valuation differences are recorded directlyin net assets, and cost of products sold is calculated using the moving average method. Stocks with no market price are calculatedusing the moving average cost method.
If the market value of equity securities or available-for-sale securities declines significantly, the difference between the fairmarket value and the carrying amount is recognized as loss in the period of the decline. If the market price of equity securities is
not readily available, such securities are written down to net asset value with a corresponding charge in the consolidated statementof income in the event the net asset value declines significantly. In these cases, the fair market value or the net asset value will be
the carrying amount of the securities at the beginning of the next year.
Derivatives and hedge accounting - The Companies account for derivative financial instruments at fair value and recognizechanges in the fair value as gain or loss unless the derivative financial instrument is used for hedging purposes. If derivative
financial instruments are used as hedges and meet certain hedging criteria, the Companies defer recognition of gain or loss
resulting from changes in the fair value of the derivative financial instrument until the related loss or gain on the hedged item isrecognized. However, foreign monetary obligations denominated in foreign currencies for which foreign exchange forward
contracts are used to hedge foreign currency fluctuations are translated at the contracted rate if the forward contracts qualify for11hedge accounting (“the alternative method”). Also, if interest rate swap contracts are used as hedges and meet certain hedging
criteria, the net amount to be paid or received under the interest rate swap contract is added to or deducted from the interest on theassets or liabilities for which the swap contract was executed (“the special treatment”).
Allowance for doubtful accounts - An allowance for doubtful accounts is provided to cover possible losses on collection. With
respect to normal trade accounts receivable, it is stated at an amount based on the actual rate of historical bad debts. For certain
doubtful receivables, the uncollectible amounts are individually estimated.
Inventories - The Company and its domestic consolidated subsidiaries state inventories at the lower of average cost or net
realizable value.
Property, plant and equipment - Property, plant and equipment are stated at cost. Depreciation is computed primarily using
the declining balance method. However, the straight-line method is applied for depreciation of buildings acquired on or after 1st
April 1998 and facilities attached to buildings and structures acquired on or after 1st April 2016. The useful life of buildings andstructures ranges from 12 to 50 years. The useful life of machinery and equipment ranges from 4 to 10 years.
Software - The Company and its domestic consolidated subsidiaries include software in intangible assets and amortize it using
the straight-line method over the estimated useful life of 5 years.
Goodwill - Goodwill is amortized over a period of 5 years using the straight-line method.
Lease assets - Assets under finance leases that do not transfer ownership of the lease assets are amortized using the straight-line
method over the lease term with the assumption that the useful life coincides with the lease term and the residual value is zero.
Research and development expenses - Research and development expenses for the improvement of existing products and thedevelopment of new products, including basic research and fundamental development costs, are charged to expenses as incurred.
Bonuses - The Company and its consolidated domestic subsidiaries follow the general Japanese practice of paying bonuses to
employees in July and December. The allowance for bonuses is determined based upon the estimated amounts to be paid in thesubsequent period.
Translation of foreign currencies - Short-term and long-term receivables and payables denominated in foreign currencies aretranslated into Japanese yen at year-end rates.
Provision for restructuring - To provide for future expenses to be incurred associated with restructuring, the estimated amountof the expenses was recorded.
Accounting for Retirement Benefits - Projected benefit obligations are attributed to periods on a benefit formula basis indetermining retirement benefit obligations. Actuarial gains and losses are amortized by the straight-line method over a fixed
period of 10 years, which is within the average remaining service years of the eligible employees, beginning in the fiscal year
following the year in which the gains and losses are recognized. In determining the amount of retirement benefit obligations andretirement benefit costs, some small sized consolidated subsidiaries have adopted a simplified method in which the amount thatwould be required if all the employees retired voluntarily at the fiscal year end is treated as retirement benefit obligation.
Accounting policy for recognition of significant revenues and expenses
1. Principal performance obligations in the entity’s principal businesses
The Group’s principal business segments are the Processed Food Products segment (production and sale of ham and sausages,
and precooked and processed foods) and the Meat Products segment (processing and sale of beef, pork, chicken, etc.). In thesesegments, the Group identifies the delivery of these goods and products to customers as performance obligations.

122. Company recognizes of the satisfaction of performance obligations
The Company applies the alternative treatment prescribed in Paragraph 98 of the “Guidance on Accounting Standard for
Revenue Recognition” and, in principle, recognizes revenue at the point in time when control has transferred to the customer andthe performance obligation is satisfied at the time of shipment of goods and products.
The transaction price is calculated based on the consideration promised in the contract with the customer, less certain
distribution expenses and promotion expenses.
Income taxes – The asset-liability approach is used to recognize deferred tax assets and liabilities for tax loss carryforwards
and the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes.
Amounts per share - The computations of profit attributable to owners of parent per share of common stock shown on the
consolidated statements of income are based on the weighted average number of shares outstanding during each financial period.
Cash dividends per share shown in the consolidated statements of income are the amounts applicable to the respective years.
Diluted profit attributable to owners of parent is not disclosed because the Company had no outstanding securities which might
have diluted the per share amounts for the years ended 31st March 2023 and 2022.
Accounting for nondeductible consumption taxes, etc., on assets - Nondeductible consumption taxes and local consumption
taxes on assets were expensed in the fiscal year ended 31st March 2023.
Significant accounting estimates
1. Impairment of fixed assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended 31st March 2023
The book value of business assets of the Processed Food Products segument (including common assets) of the Company forthe fiscal year ended 31st March 2023 and 2022 were as follows:

Property, plant and equipment ................................................................
Intangible assets ......................................................................................
Total ........................................................................................................

Millions of yen
2023
2022
¥ 30,166¥ 31,940
1,371
2,059
¥ 31,537¥ 33,999

Thousands of
U.S. dollars (Note 1)
2023$ 225,895
10,266$ 236,161

The Company determined that there was an indication of impairment of the business assets of the Processed Food Products
segment of Marudai Food Co., Ltd. due to the continuous recording of operating loss and reviewed the necessity of recording loss
on impairment of fixed assets. However, as it was determined that the undiscounted future cash flows would exceed the bookvalue of the business assets, including the common assets of the Processed Food Products segment, the Company did not record
any loss on impairment of these assets.
However, due to the decision to implement restructuring, including the reorganization of production locations, a loss on
impairment of fixed assets in the Processed Food Products segment of ¥1,331 million ($9,967 thousand) for movable assets, suchas machinery and equipment, and real estate, such as land, not expected to be used in the future, was recorded as restructuring
expenses in extraordinary losses.
(2) Significant accounting estimates for identified items① Calculation method
When an indication of impairment exists for an asset or asset group, the Company conducts an assessment of whether
recording an impairment loss is required based on the future cash flows of the asset.
The Company groups its cash generating units, which are the units used to determine whether recognizing impairment isrequired, into business assets in the Processed Food Products segment and the Meat Products segment, rental assets, idle
assets and artwork. Regarding business assets, the management accounting business category in which income and13expenditure are continuously monitored is considered one asset group, and future cash flows are calculated based on the
profit plan formulated on the basis of the management plan approved by the Board of Directors. Regarding rental assets, idle
assets and artwork, individual assets are used as the smallest unit for grouping. The future cash flows of rental assets are
estimated by the net selling price on the basis of appraisal values, etc., or future cash flows on the basis of rental income,etc., while future cash flows of idle assets and artwork are estimated based on the net selling price on the basis of theappraisal values, etc.
② Key assumptions
The key assumptions used in the calculation of undiscounted future cash flows are subject to a high degree of uncertainty.
- With regard to the net sales plan, based on numerical plans developed by individual departments, the Company lowered
projections taking into account the degree of achievement of budgets in past fiscal years as well as the rate of decrease in
net sales in the current fiscal year. The resulting figures were then further adjusted to come up with a net sales forecast
by reflecting the revenue-increasing effect of price revisions expected from the most recent business talks, etc. and newtransactions. In addition, we took into account the market environment for our mainstay ham and sausage products forthe next fiscal year and beyond.
- The cost of sales plan reflects factors such as the impact of recent increases in raw material prices and energy costs, aswell as the effects of cost reduction from restructuring, including the reorganization of production locations, etc.
- With regard to the impact of COVID-19, the Company assumes that there will be a limited impact on the
aforementioned plan as restrictions are being eased and the situation surrounding the Company is gradually returning tonormal.
③ Effect on the consolidated financial statements for the fiscal year ending 31st March 2024
There may be a significant impact on the consolidated financial statements for the fiscal year ending 31st March 2024 if
actual amounts differ from the estimates due to uncertain future economic conditions or changes in the businessenvironment.

14

2. Recoverability of deferred tax assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended 31st March 2023 and 2022 were as follows:

Deferred tax assets (before offsetting with deferred tax liabilities) .........

Millions of yen
2023
2022
¥ 1,101¥ 2,212

Thousands of
U.S. dollars (Note 1)2023$ 8,244(2) Significant accounting estimates for identified items① Calculation method
Deferred tax assets are recognized to the extent that it is highly probable that taxable income will be available against
which the unused portion of tax loss carryforwards and future deductible temporary differences can be utilized. In
determining the taxable income to be generated, the Company calculates the timing and amount of taxable income that canbe earned in the future based on the future profit plan formulated on the basis of the management plan approved by the
Board of Directors.
② Key assumptions
For the Company, the estimated amount of taxable income is calculated based on the figures linked to the profit planreferred to above in this Note in Subsection 1 (2) ②, “Key assumptions.”
Among the consolidated subsidiaries that have a significant impact on the amount of taxable income, for those companies
whose management plans for the next fiscal year, as approved by the Board of Directors, are expected to increasesignificantly as compared to the actual results of the current fiscal year, taxable income is estimated based on the assumptionthat profits from the next fiscal year will remain at the same level as those in the current fiscal year, except for items that are
expected to improve in the next fiscal year.
③ Effect on the consolidated financial statements for the fiscal year ending 31st March 2024
There may be a significant impact on the consolidated financial statements for the fiscal year ending 31st March 2024 if
the actual timing and amounts differ from the estimates due to uncertain future economic conditions or changes in thebusiness environment. In addition, changes in the effective statutory tax rate due to tax reforms may also have a significant
impact on those consolidated financial statements.
Accounting changes(Application of the Accounting Standard for Revenue Recognition and other related standards)
The Group applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 2 9, 31st March 2 0 2 0) andother related standards from the beginning of the year ended 31st March 2 0 22, instituting a policy of recognising revenue
matching the amount expected to be received in exchange for promised goods or services when control of the goods orservices has transferred to the customer. As a result, the Group has changed to a method of deducting a portion of the
distribution expenses and promotion expenses, etc., which were previously recorded as selling, general and administrative
expenses, from net sales.
(Application of the Accounting Standard for Fair Value Measurement and other related standards)
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, 4th July 2019;
hereinafter “the Fair Value Measurement Standard”) and other related standards from the beginning of the fiscal year ended
31st March 2022, and will prospectively apply the new accounting policy stipulated by the Fair Value Measurement Standard,
etc. in accordance with the transitional treatment provided in Paragraph 19 of the Fair Value Measurement Standard andParagraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, 4th July 2019). There has
been no impact on the consolidated financial statements.

15

(Change in the method of recording distribution expenses)
The Group decided to record a portion of distribution expenses in manufacturing costs from the beginning of the fiscal
year ended 31st March 2022. Previously, this amount had been recorded in selling, general and administrative expenses. Thischange was made to implement more realistic profit-and-loss management (departments, items, customers, etc.), including areview of the allocation method of recording distribution expenses, as the Company and its major consolidated subsidiaries
unified their systems following the renewal of their core systems, amid the increasing importance of distribution expenses in
the Group.
Reclassification
Certain prior year amounts have been reclassified to conform to the current year’s presentation.
3. Financial instruments(1) Current status of financial instruments① Policy concerning financial instruments
The Group makes it a policy to limit fund investments to bank deposits and other investments in which the principal isfree from risk and raise funds principally through borrowings from financial institutions such as banks and issuance ofcorporate bonds. The Group uses derivatives to reduce foreign exchange and interest rate fluctuation risks but does notengage in any speculative transactions.
② Details of financial instruments and their risks and the Group’s risk management system
The Group is exposed to credit risk arising from operating receivables such as trade notes and accounts receivable. To
limit the risk, the Company conducts due date and outstanding receivable management by customer in accordance with its“credit exposure management guidelines” and has a grading system to evaluate the credit condition of its major customers
every six months. The consolidated subsidiaries manage credit risk similarly, following the Company’s “credit exposure
management guidelines”.
Investment securities held by the Company are comprised of exchange listed shares (strategic shareholdings) and unlisted
stocks, with the bulk consisting of exchange listed shares (strategic shareholdings). As a policy, exchange listed shares(strategic shareholdings), in accordance with the “Guidelines for the Holding and Management of Exchange Listed Shares,”are held only if judged to contribute to sustained growth and medium- to long-term corporate value enhancement. Individual
investment securities, including unlisted stocks, are subject to verification of their holding purpose and rationale, etc. andreported each year to the Board of Directors for comprehensive deliberation regarding the justification of their holding.
Verification of shareholding rationale includes verification that benefits and risks resulting from the shareholdings areproportionate to the cost of capital.
Operating payables, such as trade notes and accounts payables, and other payables, are generally payable within one
year. Some arise in connection with the import of raw materials and goods that are denominated in foreign currencies. The
Company uses foreign currency forward contracts to reduce foreign currency fluctuation risk that arises from operating
payables in foreign currencies.
The Group primarily uses loans to procure operating funds and lease receivables from finance leases to raise funds forcapital expenditure. The amount of interest expenses has been fixed for the long-term portion of borrowings through the useof individual fixed-rate contracts as well as interest rate swap transactions as hedging instruments, in order to avoid the riskof interest rate fluctuations. No interest swap transactions were current as of 31st March, 2023. To minimize counterparty
risk, the Company follows its “derivative transaction rules” and enters such transactions only with highly rated financial
institutions.
The Company is exposed to liquidity risk arising from its operating obligations and loan payables. To minimize this risk,
the Accounting Department prepares statements of cash flows based on other divisions’ reports and regularly updates thestatements. The consolidated subsidiaries also manage liquidity risk in accordance with the methods used by the Company.

16

③ Supplementary explanation on fair values of financial instruments
Since variable factors are incorporated in the measurement of the fair value of financial instruments, the fair value may
change due to the adoption of different assumptions and other factors.
The contract amounts of the derivative transactions stated in “(2) Fair value of financial instruments” do not reflect themarket risk involved in the derivative transactions themselves.
(2) Fair value of financial instruments
The following table shows the consolidated balance sheet amounts of financial asset, their fair values and any difference
between the book values and fair values as of 31st March 2023. “Cash and time deposits,” “Trade notes and accounts
receivable,” “Trade notes and accounts payable,” “Payable - other” and “Short-term borrowings” are omitted as they are cash
or are settled in a short period of time and thus their fair values approximate their book values.
Millions of yen① Investment securities (*1)
Available-for-sale securities .................
Total assets ...........................................
① Long-term debt .....................................
② Lease obligations .................................
Total liabilities .....................................
Derivatives (*2) ....................................

Consolidatedbalance sheet
amounts

Fair value¥ 11,391
11,391
8,173
4,759
12,932
1¥ 11,391
11,391
8,123
4,759
12,882
1

Thousands of U.S. dollars (Note 1)
2023
Consolidated
Difference balance sheet Fair value
Difference
amounts
¥

–
–
(50)
0
(50)
–

$ 85,301
85,301
61,20335,637
96,8407$ 85,301
85,30160,82835,637
96,465
7

$

–
–
(375)
0
(375)
–

(*1) Shares without market price, etc., are not included in “① Investment securities Investment securities Available-for-salesecurities.” Book values on the consolidated balance sheet for these financial instruments were as follows.
Millions of yen

Category
Unlisted stocks ..................................................................
Affiliates ...........................................................................

Thousands of U.S. dollars (Note 1)
2023
Consolidated balance sheet amounts Consolidated balance sheet amounts
¥ 48
$ 359
263
1,969

(*2) Derivative assets and liabilities are presented on a net basis.
(*3) Estimated redemption amounts of monetary assets and available-for-sale securities with maturity dates after the
consolidated balance sheet date.
Millions of yen

Thousands of U.S. dollars (Note 1)
2023

Within one
year
Cash and time deposits .............................
Trade notes and accounts receivable .......
Total .........................................................

¥ 6,916
23,897¥ 30,813

Over one year
but within
five years–––

Over fiveyears

Within one
year

–
–
–

$ 51,790
178,950$ 230,740

Over one year
but within
five years–––

Over five
years
–
–
–

(*4) For estimated repayment amounts of long-term debt, lease obligations and other interest bearing debt, refer to Note 7,“Short-term borrowings, long-term debt and lease obligations.”

17

The following table shows the consolidated balance sheet amounts of financial asset, their fair values and any difference
between the book values and fair values as of 31st March 2022. “Cash and time deposits,” “Trade notes and accounts
receivable,” “Trade notes and accounts payable,” “Payable - other” and “Short-term borrowings” are omitted as they are cash
or are settled in a short period of time and thus their fair values approximate their book values.
Millions of yen
2022① Investment securities (*1)
Available-for-sale securities ................
Total assets ...........................................
① Long-term debt .....................................
② Lease obligations .................................
Total liabilities .....................................
Derivatives (*2) ....................................

Consolidatedbalance sheet
amounts

Fair value

Difference¥ 11,671
11,671
7,369
5,203
12,572103¥ 11,671
11,671
7,364
5,229
12,593
103

¥ –
–
(5)
26
21
–

(*1) Shares without market price, etc., are not included in “① Investment securities Available-for-sale securities.” Book values
on the consolidated balance sheet for these financial instruments were as follows.
Millions of yen
2022
Category

Consolidated balance sheet amounts

Unlisted stocks ....................................................................
Affiliates .............................................................................

¥ 48
218

(*2) Derivative assets and liabilities are presented on a net basis.
(*3) Estimated redemption amounts of monetary assets and available-for-sale securities with maturity dates after the
consolidated balance sheet date.
Millions of yen
2022
one year Over five
Within one Overbut within
years
year
five years
Cash and time deposits ..................................
Trade notes and accounts receivable .............
Total ..............................................................

¥ 7,991
23,437¥ 31,428

–
–
–

–
–
–

(*4) For estimated repayment amounts of long-term debt, lease obligations and other interest bearing debt, refer to Note 7, “Shortterm borrowings, long-term debt and lease obligations.”18

(3) Breakdown of the fair value of financial instruments by level
The fair value of financial instruments is classified into the following three levels according to the observability andsignificance of the inputs used to measure the fair value.
Level 1: Fair value measured using (unadjusted) quoted prices in active markets for identical assets or liabilities
Level 2: Fair value measured using directly or indirectly observable inputs other than Level 1 inputs
Level 3: Fair value measured using significant unobservable inputs
If multiple inputs are used that are significant to the fair value measurement, the fair value is categorized by the lowest
level of priority in the fair value measurement among the levels each input belongs to.
① Financial instruments measured at fair value on the consolidated balance sheets as of 31st March 2023

Level 1
Investment securities
Available-for-sale securities ......................
Shares ....................................................
Derivatives ....................................................
Currency related ........................................
Total assets ....................................................

Millions of yen
2023
Fair value
Level 2
Level 3

¥ 11,391
11,391––¥ 11,391

¥–
–
1
1
¥1

Total
–
–
–
–
–

¥ 11,391
11,391
1
1¥ 11,392

Thousands of U.S. dollars (Note 1)
2023
Fair value
Level 2
Level 3
Total
Level 1
Investment securities
Available-for-sale securities ......................
Shares ....................................................
Derivatives ....................................................
Currency related ........................................
Total assets ....................................................

$ 85,301
85,301––$ 85,301

$–
–
7
7
$7

19

–
–
–
–
–

$ 85,301
85,3017
7$ 85,308

② Financial instruments other than those measured at fair value on the consolidated balance sheets as of 31st March 2023

Level 1Long-term debt ..............................................
Lease obligations ..........................................
Total liabilities ...............................................

Long-term debt ..............................................
Lease obligations ..........................................
Total liabilities ...............................................

–––

Millions of yen
2023
Fair value
Level 2
Level 3
¥ 8,123–
4,759–¥ 12,882–

Total¥ 8,123
4,759¥ 12,882

Thousands of U.S. dollars (Note 1)
2023
Fair value
Level 2
Level 3
Total
Level 1–
$ 60,828–$ 60,828–
35,637–35,637–$ 96,465–$ 96,465

20

① Financial instruments measured at fair value on the consolidated balance sheets as of 31st March 2022
Millions of yen
2022
Fair value
Level 2
Level 3

Level 1
Investment securities
Available-for-sale securities ......................
Shares ....................................................
Derivatives ....................................................
Currency related ........................................
Total assets ....................................................

¥ 11,671
11,671––¥ 11,671

¥

–
–
103
103
¥ 103

Total
–
–
–
–
–

¥ 11,671
11,671
103
103¥ 11,774② Financial instruments other than those measured at fair value on the consolidated balance sheets as of 31st March 2022

Level 1Long-term debt ..............................................
Lease obligations ..........................................
Total liabilities ...............................................

–––

Millions of yen
2022
Fair value
Level 2
Level 3
¥ 7,364–
5,229–¥ 12,593–

Total¥ 7,364
5,229¥ 12,593

Note: Description of valuation techniques and inputs used in the measurement of fair value
Investment securities
Other securities
Other securities are valued using prices on the stock exchange and are classified as Level 1 fair value.
Derivative transactions
These items are all forward exchange contracts and the fair value of forward exchange contracts is measured using thediscounted present value method with observable inputs such as exchange rates, and classified as Level 2 fair value.
Long-term debt and lease obligations
The fair value of long-term debt and lease obligations is measured using the present value of the total principal andinterest discounted at the interest rate that would be applicable to a similar new loan or lease transaction and is classified as
Level 2 fair value.

21

4. Securities
The following tables summarize historical costs and book values (fair values) of available-for-sale securities with available
fair market values as of 31st March 2023 and 2022.
Securities with book values
exceeding historical cost:

Millions of yen

TypeHistorical
cost

2023
Book
value

Equity securities .......................
Bonds .......................................
Others .......................................
Total .........................................

¥ 4,115––¥ 4,115¥ 11,183––¥ 11,183

Historical
cost

2023
Book
value

Securities with book values
not exceeding historical cost:
Type
Equity securities .....................
Bonds ......................................
Others ......................................
Total .........................................

¥ 239
–
–
¥ 239

¥ 208
–
–
¥ 208

Thousands of U.S. dollars (Note 1)

Gain

Historical
cost

2022
Book
value

¥ 7,068––¥ 7,068¥ 4,277––¥ 4,277¥ 11,434––¥ 11,434

Loss

Historical
cost

2022
Book
value

¥ (31)––¥ (31)

¥ 293
–
–
¥ 293

¥ 237
–
–
¥ 237

Gain

Historical
cost

2023
Book
value

¥ 7,157––¥ 7,157$ 30,815––$ 30,815$ 83,743––$ 83,743

Loss

Historical
cost

2023
Book
value

¥ (56)––¥ (56)$ 1,790––$ 1,790$ 1,557––$ 1,557

Gain$ 52,928––$ 52,928

Loss$ (233)––$ (233)

Unlisted stocks (carrying amount of ¥48 million ($359 thousand)) as of 31st March 2023 and unlisted stocks (carrying amountof ¥48 million) as of 31st March 2022 were not included in the above table as no market prices for these securities.
Available-for-sale securities
sold during the year:
Type
Equity securities ...................
Bonds ...................................
Others ...................................
Total .....................................

Millions of yen
Proceeds
¥ 895
–
–
¥ 895

2023
Gains
on salesLosseson salesProceeds

¥ 644
–
–
¥ 644

–
–
–
–

¥ 681
–
–
¥ 681

Thousands of U.S. dollars (Note 1)
2022
Gains
on salesLosseson salesProceeds

¥ 430
–
–
¥ 430

–
–
–
–

$ 6,702––$ 6,7022023
Gains
on salesLosseson sales$ 4,823––$ 4,823––––

There was no impairment of investment securities during the fiscal year ended 31st March, 2023.
The Group recognized impairment loss on investment securities categorized as other securities with market value in the amountof ¥30 million for the year ended 31st March 2022.
When the value of stocks depreciated from 30% to 50%, the Company determined impairment loss by analyzing the operational
performance of the issuing entities based on prevailing financial data and market value informations such as discrepancies between
the book value and the highest or lowest market value during the year.

225. Derivative financial instruments and hedging transactions
Derivative financial instruments and hedging transactions at 31st March 2023 were as follows:(1) Currency related
Millions of yen
Hedge accounting
methodAlternative method

Transaction types
Foreign exchange trading
On purchased
U.S. dollar
Euro
Total

Major hedged
items
Accounts
payableThousands of U.S. dollars (Note 1)
2023
Contract
amounts

Contract
amounts

Due overone year

Fair
value

¥ 2,06837¥ 2,105

–
–
–

¥0
1
¥1

$ 15,486
277$ 15,763(2) Interest related
Not applicable for the year ended 31st March 2023.
Derivative financial instruments and hedging transactions at 31st March 2022 were as follows:(1) Currency related
Millions of yen
Hedge accounting
methodAlternative method

Transaction types

Major hedged
items

Contract
amounts2022
Due overone year

Fair
value

Foreign exchange trading
On purchased
U.S. dollar
Total

Accounts
payable¥ 2,955–¥ 103¥ 2,955–¥ 103(2) Interest related
Not applicable for the year ended 31st March 2022.

23

Due overone year

Fair
value

–
–
–

$0
7
$7

6. Inventories
Inventories at 31st March 2023 and 2022 consisted of the following:Thousands of
U.S. dollars (Note 1)

Millions of yen
Merchandise and finished goods .............................................................
Work in progress .....................................................................................
Raw materials and supplies .....................................................................

2023

2022

2023

¥ 12,371
510
6,351¥ 19,232¥ 11,228464
5,182¥ 16,874$ 92,639
3,819
47,559$ 144,017

The balance of inventories at the end of the fiscal year is the amount after a reduction of book value in line with a decline inprofitability, and the following loss on valuation of inventories is included in cost of sales. The amount below has been offset
against reversal amounts:
Thousands of
U.S. dollars (Note 1)

Millions of yen
2023
Loss on valuation of inventories .............................................................
Loss on abandonment of inventories
The Company recorded losses resulted from accidents at the depository

24

¥ 291

2022
¥ 47

2023
$ 2,179

7. Short-term borrowings, long-term debt and lease obligations
Short-term borrowing at 31st March 2023 and 2022 consisted of short-term notes, which generally mature within one year,with average interest rates of 0.55% and 0.42%, respectively.
Long-term debt at 31st March 2023 and 2022 consisted of the following:
Millions of yen
2023
2022

Thousands of
U.S. dollars (Note 1)
2023

Loans from banks, insurance companies and otherfinancial institution at 0.16% to 1.00% maturing through 2029
Secured ....................................................................................................
Unsecured ...............................................................................................
Less current portion ................................................................................

¥

61
8,112
8,173
(2,917)¥ 5,256

¥

99
7,270
7,369
(2,818)¥ 4,551$457
60,746
61,203(21,844)$ 39,359

The aggregate annual maturities of long-term debt as of 31st March 2023 were as follows:

Years ending 31st March,2024 .................................................................................................
2025 .................................................................................................
2026 .................................................................................................
2027 .................................................................................................
2028 .................................................................................................
2029 and thereafter .........................................................................

Millions of yen

Thousands of U.S. dollars (Note 1)

2023

2023
¥ 2,917
2,323
1,418
944
566
5
¥ 8,173$ 21,844
17,396
10,619
7,069
4,238
37
$ 61,203

The aggregate annual maturities of lease obligations as of 31st March 2023 were as follows:

Years ending 31st March,2024 .................................................................................................
2025 .................................................................................................
2026 .................................................................................................
2027 .................................................................................................
2028 .................................................................................................
2029 and thereafter .........................................................................

25

Millions of yen

Thousands of U.S. dollars (Note 1)

2023

2023
¥ 1,024
993
778
603
507
854
¥ 4,759$ 7,668
7,436
5,826
4,515
3,797
6,395
$ 35,637

8. Pledged assets
Assets were pledged as collateral for the current portion of long-term debt of ¥15 million ($112 thousand) and long-term debtof ¥46 million ($344 thousand) as of 31st March 2023 and for the current portion of long-term debt of ¥38 million and long-term
debt of ¥61 million as of 31st March 2022. The assets pledged are summarized as follows:

Land ........................................................................................................
Buildings and structures ..........................................................................
Machinery and equipment .......................................................................

Millions of yen
2023
2022
¥ 4
¥ 4
32
36
25
43
¥ 61
¥ 83

Thousands of
U.S. dollars (Note 1)
2023
$ 30
240
187
$ 457

9. Overdraft agreements
The Company and its consolidated subsidiaries have signed overdraft agreements with their correspondent banks to efficiently
procure working capital. The unrealized borrowings under these agreements at the end of the period were as follows:

Total amounts in the overdraft agreements .............................................
Borrowing balance ..................................................................................
Difference ................................................................................................

26

Millions of yen
2023
2022
¥ 32,750¥ 32,770
9,758
8,000
¥ 22,992¥ 24,770

Thousands of
U.S. dollars (Note 1)
2023$ 245,245
73,072$ 172,173

10. Retirement benefits(1) Outline of retirement benefit plans adopted
The Company and its consolidated subsidiaries have defined benefit corporate pension plans (fund type) and lump-sum
retirement allowance plans as well as defined contribution plans. In the case of certain defined contribution plans, employees canselect a defined contribution plan or advanced payment of retirement benefits. In some cases, additional severance benefits may
be paid to the employees upon retirement.
(2) Defined Benefit Obligation① The changes in retirement benefit obligation for the fiscal years ended 31st March 2023 and 2022 (excluding those forwhich the simplified method was applied) were as follows:

Beginning balance of retirement benefit obligation ...............................
Service cost - benefits earned during the year ........................................
Interest cost on projected benefit obligation ...........................................
Actuarial gains and losses .......................................................................
Retirement benefits paid .........................................................................
Ending balance of retirement benefit obligation ....................................

Millions of yen
2023
2022
¥ 12,274¥ 12,833
268
296
98
103
110
(172)
(840)
(786)
¥ 11,910¥ 12,274

Thousands of
U.S. dollars (Note 1)2023$ 91,913
2,007
734
823
(6,290)$ 89,187② The changes in plan assets for the fiscal years ended 31st March 2023 and 2022 (excluding those for which the simplified
method was applied) were as follows:

Beginning balance of plan assets ............................................................
Expected return on plan assets ................................................................
Actuarial gains and losses .......................................................................
Contribution from the employer .............................................................
Retirement benefits paid .........................................................................
Ending balance of plan assets .................................................................

27

Millions of yen
2023
2022
¥ 14,948¥ 14,941
373
374
(510)
(149)
170
384
(626)
(602)
¥ 14,355¥ 14,948

Thousands of
U.S. dollars (Note 1)
2023$ 111,936
2,793(3,819)1,273(4,687)$ 107,496

③ The changes in liabilities for retirement benefits of the plans for which the simplified method was applied for the fiscal years
ended 31st March 2023 and 2022 were as follows:

Beginning balance of liabilities for retirement benefits .........................
Retirement benefit expenser ...................................................................
Retirement benefits paid .........................................................................
Ending balance of liabilities for retirement benefits ...............................

Millions of yen
2023
2022
¥ 1,921¥ 1,836
197
174
(66)
(89)
¥ 2,052¥ 1,921

Thousands of
U.S. dollars (Note 1)2023$ 14,385
1,475
(494)
$ 15,366④ Reconciliation between the ending balance of projected benefit obligation and plan assets and liability and asset for
retirement benefits recorded in the consolidated balance sheet

Funded retirement benefit obligation ......................................................
Plan assets ...............................................................................................
Unfunded retirement benefit obligation ..................................................
Net liability (asset) for retirement benefits recordedin the consolidated balance sheet ..........................................................
Retirement benefit asset ..........................................................................
Liabilities for retirement benefits ...........................................................
Net liability (asset) for retirement benefits recordedin the consolidated balance sheet ..........................................................
Note: The plans to which the simplified method is applied are included.

28

Millions of yen
2023
2022
¥ 12,494¥ 12,817(14,355)(14,948)(1,861)(2,131)
1,467
1,379
(394)
(1,861)
1,467
¥

(394)

Thousands of
U.S. dollars (Note 1)2023$ 93,560(107,496)(13,936)
10,985(752)(2,131)
1,379
¥

(752)

(2,951)(13,936)
10,985$(2,951)

⑤ The components of retirement benefit expenses were as follows:

Service cost - benefits earned during the year ........................................
Interest cost on projected benefit obligation ...........................................
Expected return on plan assets ................................................................
Amortisation of actuarial differences ......................................................
Retirement benefit expenses calculated using the simplified method ....
Retirement benefit expenses on defined benefit plans ...........................
Special retirement expenses (*) ..............................................................

Millions of yen
2023
2022
¥ 268
¥ 297
98
103
(373)
(374)
94
135
196
174
283
335
34
20

Thousands of
U.S. dollars (Note 1)2023$ 2,007734(2,793)
704
1,467
2,119
255

(*) Special retirement expenses are recorded. Special retirement expenses for the fiscal year ended 31st March 2022 and the fiscal
year ended 31st March 2023 were extra retirement payments for employees transferred to consolidated subsidiaries.
⑥ Adjustments for retirement benefits
The components of adjustments for retirement benefits (before tax effect) were as follows:

Actuarial gains and losses .......................................................................
Total ........................................................................................................

Millions of yen
2023
2022
¥ (525)¥ 159¥ (525)¥ 159

Thousands of
U.S. dollars (Note 1)2023$ (3,931)$ (3,931)⑦ Accumulated adjustments for retirement benefits
The components of accumulated adjustments for retirement benefits (before tax effect) were as follows:

Unrecognised actuarial gains and losses .................................................
Total ........................................................................................................

29

Millions of yen
2023
2022
¥ 701
¥ 176
¥ 701
¥ 176

Thousands of
U.S. dollars (Note 1)2023$ 5,249$ 5,249

⑧ Plan assets
The components of plan assets were as follows:2023
Debt securities .................................................................................
Alternatives .....................................................................................
Equity securities ..............................................................................
General account ..............................................................................
Short-term assets .............................................................................
Total ................................................................................................

2022
43.8%
24.3
21.6
8.3
2.0
100.0%

43.5%
23.7
22.7
7.8
2.3
100.0%

Note: Regarding alternatives, hedge fund investments are made for the purpose of risk diversification.
Method of determining long-term expected rate of return
The long-term expected rate of return on plan assets is determined by taking into consideration the allocation of plan
assets which are expected currently and in the future and the long-term rates of return which are expected currently and in
the future from the various components of the plan assets.
⑨ Assumptions used for actuarial calculations for the fiscal years ended 31st March 2023 and 2022 were as follows:
2023
Discount rate ...................................................................................
Long-term expected rate of return ..................................................
Expected rate of salary increase:
Lump-sum payment plans ..............................................................

2022
0.8%
2.5

0.8%
2.5

4.7

4.6

Note: Because the defined benefit corporate pension plan (fund type) is a fixed amount system (point system) based on thenumber of years of service, the expected rate of salary increase is not used.
(3) Define Contribution Plans
The amount of required contribution to the defined contribution plans of the Companies was ¥223 million ($1,670 thousand)for the year ended 31st March 2023 and ¥244 million for the year ended 31st March 2022.

30

11. Income taxes
Due to the posting of a loss before income taxes for the years ended March 31, 2023 and 2022, description regarding
reconciliation of the statutory tax rate to the effective income tax rate was omitted.

Significant components of the Companies’ deferred tax assets and liabilities as of 31st March 2023 and 2022 were as follows:

Deferred tax assets:
Loss carryforwards (*2) ....................................................................
Loss on impairment of fixed assets ...................................................
Denied sales discounts and others .....................................................
Liabilities for retirement benefits .....................................................
Allowance for bonuses ......................................................................
Long-term trade receivables ..............................................................
Provision for restructuring ................................................................
Allowance for doubtful accounts ......................................................
Other .................................................................................................
Total deferred tax assets ..........................................................................
Valuation allowance for loss carryforwards (*2) ..............................
Valuation allowance for deductible temporary differences ...............
Total valuation allowance (*1) ..........................................................
Net deferred tax assets ............................................................................

Millions of yen
2023
2022
¥ 1,487¥ 1,106
1,464
794
649
684
470
470
254
262
215
215
99
–
45
47
681
522
5,364
4,100
(1,381)(497)(2,882)(1,391)(4,263)(1,888)
1,101
2,212

Deferred tax liabilities:
Unrealised gains on securities ...........................................................
Retirement benefit asset ....................................................................
Reserve for property, plant and equipment .......................................
Other .................................................................................................
Total deferred tax liabilities ....................................................................
Net deferred tax assets ............................................................................

(2,087)
(570)
(29)
(58)
(2,744)¥ (1,643)(2,114)
(652)
(29)
(89)
(2,884)¥ (672)Thousands of
U.S. dollars (Note 1)2023$ 11,135
10,963
4,860
3,520
1,902
1,610
741
337
5,099
40,167(10,341)(21,582)(31,923)
8,244(15,628)(4,268)(217)(435)(20,548)$ (12,304)(*1) Valuation allowance increased by ¥2,375 million ($17,785 thousand) from the fiscal year ended 31st March 2022 after areview of the classification of companies under the group tax sharing system due to a decrease in recoverability.

31

(*2) Loss carryforwards and deferred tax assets by expiration periods for the years ended 31st March 2023 and 2022
Loss carryforwards and deferred tax assets by expiration periods as of and for the fiscal year ended 31st March 2023 were as
follows:
Millions of yen
2023
2029 and
2024
2025
2026
2027
2028
Total
thereafter
Loss carryforwards (a) .........
¥ 11
¥ 14
¥ 9
¥ 33
–
¥ 1,420¥ 1,487
(11)
(14)
(9)
(33)
–
(1,314)(1,381)
Valuation allowance ..............
Deferred tax assets ...............
–
–
0
–
–
106
(b) 106
Thousands of U.S. dollars (Note 1)
2023
2024
Loss carryforwards (a) .........
Valuation allowance .............
Deferred tax assets ...............

$ 82
(82)
–

2025

2026

$ 105
(105)
–

$ 67
(67)
0

2027

2028

$ 247
(247)
–

–
–
–

2029 and
thereafter$ 10,634(9,840)794

Total$ 11,135(10,341)(b) 794(a) Loss carryforwards shown in the above table are after multiplying the statutory tax rate.
(b) With respect to ¥1,487 million ($11,135 thousand) in tax loss carryforwards (after application of the statutory tax rate),¥106 million ($794 thousand) in deferred tax assets has been recognised. This ¥106 million ($794 thousand) in deferred
tax assets was recognised as loss carryforwards recoverable based on projected future taxable income out of the ¥1,487
million ($11,135 thousand) balance in tax loss carryforwards (after application of the statutory tax rate) at the Company
and twelve consolidated subsidiaries.
Loss carryforwards and its deferred tax assets by expiration periods as of and for the fiscal year ended 31st March 2022 wereas follows:
Millions of yen
2022
2023
Loss carryforwards (a) .........
Valuation allowance .............
Deferred tax assets ...............

¥ 10
(10)
–

2024

2025

¥ 11
(11)
–

¥ 14
(14)
0

2026
¥ 9
(9)
0

2027
¥ 47
(32)
15

2028 and
thereafter¥ 1,015
(421)
594

Total
¥ 1,106(497)(b) 609(a) Loss carryforwards shown in the above table are after multiplying the statutory tax rate.
(b) With respect to ¥1,106 million in tax loss carryforwards (after application of the statutory tax rate), ¥609 million indeferred tax assets has been recognised. This ¥609 million in deferred tax assets was recognised as loss carryforwards
recoverable based on projected future taxable income out of the ¥1,106 million balance in tax loss carryforwards (mainly
inhabitants tax and enterprise tax) (after application of the statutory tax rate) at the Company and twelve consolidated
subsidiaries.
Accounting for corporate and local corporate taxes and related tax effect accounting
The Company and some of its domestic consolidated subsidiaries have adopted the group tax sharing system from the fiscal
year ended 31st March 2023. Accordingly, the Group accounts for corporate and local corporate taxes and conducts tax effectaccounting and makes disclosures in accordance with the “Practical Solution on the Accounting and Disclosure Under the GroupTax Sharing System” (PITF No. 42, August 12, 2021).

32

12. Contingent liabilities
There are no matters to be reported.
13. Net assets
Under the Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock.
However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one half of the price ofthe new shares as additional paid-in capital, which is included in capital surplus. Under the Japanese Corporate Law (“the Law”),
in cases in which a dividend distribution of surplus is made, the smaller of an amount equal to 10% of the dividend or the excess,if any, of 25% of common stock over the total of additional paid-in capital and legal earnings reserve must be set aside asadditional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings in the accompanying
consolidated balance sheets. Under the Law, both of these appropriations generally require a resolution of the shareholders’meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Law, all additional paid-in
capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings, respectively, which arepotentially available for dividends. The maximum amount that the Company can distribute as dividends is calculated based on thenonconsolidated financial statements of the Company in accordance with Japanese laws and regulations.
At the general shareholders’ meeting held on 28th June 2023, appropriations of retained earnings for year-end dividends
applicable to the year ended 31st March 2023 were duly approved as follows:
Millions of yen

Thousands of U.S. dollars

2023

2023

Cash dividends: ¥20.00 ($0.15) per share .......................................

¥ 500$ 3,744

Millions of yen
2022
Cash dividends: ¥30.00 per share ...................................................

¥ 756

14. Selling, general and administrative expenses
Main items and amounts were as follows:

Distribution expenses ..............................................................................
Salaries and allowances ..........................................................................
Allowance for bonuses ............................................................................
Retirement benefit expenses ...................................................................
Provision of allowance for doubtful accounts .........................................

Millions of yen
2023
2022
¥ 12,041¥ 12,482
6,181
6,252
434
373
273
316
12
3

Thousands of
U.S. dollars (Note 1)2023$ 90,168
46,286
3,250
2,044
90

Research and development expenses included in selling, general and administrative expenses for the years ended 31st March2023 and 2022 were ¥601 million ($4,501 thousand) and ¥674 million, respectively.

3315. Loss on impairment of fixed assets
The Company recorded impairment loss on certain asset groups for the year ended 31st March 2023. The Company classified
fixed assets into five categories: business assets in the Processed Food Products segment and the Meat Products segment, rental
assets, idle assets and artwork. The Company groups its business assets by cash generating units and rental assets, idle assets andartwork by individual asset as these represent the smallest identifiable assets generating cash inflows. Due to the decision to
implement restructuring, including the reorganization of production locations, the book value of production facilities and realestate of Marudai Food Co., Ltd. and its consolidated subsidiaries that are not expected to be used in the future was reduced to therecoverable amount, and the amount of the reduction was recorded as restructuring expense (extraordinary loss) in the amount of¥2,299 million ($17,216 thousand). In addition, in cases in which the recoverable value of idle assets or rental assets has fallen
below book value due to declines in market prices or profitability or when market prices for artwork declined significantly, thebook value of these assets was reduced to their recoverable value. The total impairment loss for the year ended 31st March 2023
consisted of ¥64 million ($479 thousand) for investment and rental properties (Investments and other assets “Other”) and ¥108
million ($809 thousand) for tools, furniture and fixtures.
The recoverable value of rental assets was measured by the net realisable value or the value in use. The recoverable value of
idle assets was measured by the net realisable value. The net realisable value was assessed based on the appraisal value, etc., andvalue in used was calculated by discounting future cash flows by 3.2%. The recoverable amounts for artwork were calculated
based on independent appraisals obtained from third-party art experts and others.
The Company recorded impairment loss on certain asset groups for the year ended 31st March 2022. The Company classified
fixed assets into five categories: business assets in the Processed Food Products segment and the Meat Products segment, rental
assets, idle assets and artwork. The Company groups its business assets by cash generating units and rental assets, idle assets andartwork by individual asset as these represent the smallest identifiable assets generating cash inflows. As a result, when therecoverable value of idle assets or rental assets had fallen below book value due to declines in market prices or profitability, thebook value of these assets was reduced to their recoverable value. The total impairment loss for the year ended 31st March 2022
consisted of ¥9 million for investment and rental properties (Investments and other assets “Other”).
The recoverable value of rental assets was measured by the net realisable value or the value in use. The recoverable value of
idle assets was measured by the net realisable value. The net realisable value was assessed based on the appraisal value, etc., andvalue in used was calculated by discounting future cash flows by 2.7%.
16. Restructuring expenses
A loss was incurred due to the decision to implement restructuring, including the reorganization of production locations, andconsisted of ¥2,299 million ($17,216 thousand) in loss on impairment of fixed assets on production facilities and real estate of
Marudai Food Co., Ltd. and some of its consolidated subsidiaries and ¥323 million ($2,419 thousand) in other related expenses.

34

17. Revenue recognition(1) Disaggregation of revenue from contracts with customers
Information on disaggregation of revenue from contracts with customers is presented below in Note 18, “Segment
information.”(2) Information that provides the basis for understanding revenue from contracts with customers
Information regarding revenue from contrasts with customers can be found in Note a “Significant accounting policies- According policy for recognition of significant revenue and expenses.”
18. Segment information(1) Overview of the reportable segments① Method for determining reportable segments
The Group’s reportable segments are determined based on the availability of separate financial information for suchsegments that is examined periodically by the Board of Directors to make decisions regarding the allocation of the
management resources and to assess business performance. The Group has divided its business operations into tworeportable segments and an “Other” segment. Its reportable segments are “the Processed Food Products” segment and “theMeat Products” segment.
②Description of the businesses that constitute each reportable segment
In the Processed Food Products segment, the Company purchases, manufactures and sells ham, sausage and cooked andprocessed foods. In the Meat Products segment, the Company purchases, manufactures and sells meat products.
(2) Measurement for sales, profit (loss), assets, liabilities and other items for each reportable segment
The accounting policies adopted by for the reportable segments are identical to those described in Note 2, “Significant
Accounting Policies.” Intersegment sales and transfers are based on current market prices.

35

(3) Segment information for the years ended 31st March 2023 and 2022
Segment information as of and for the fiscal year ended 31st March 2023 was as follows:

Reportable segments
Processed
Meat
Total
Food Products
Products

Sales:
Ham & Sausage ............................ ¥ 64,392
Precooked & Processed Foods .....
82,701Meat Products ..............................
––
Other ............................................
147,093
Revenue from contracts with customers ...
Sales to third parties ..................... ¥ 147,093–
Intersegment sales and transfers ...
Net sales .......................................
147,093(1,654)
Segment income (loss) .................
83,616
Segment assets .............................
Other items:
Depreciation and amortisation (*4) ..
7,279
Increase in property, plant andequipment and intangible
6,441
assets (*4) ......................................

¥––
74,759–74,759¥ 74,759–
74,759204
20,633¥ 64,392
82,70174,759–221,852¥ 221,852–
221,852(1,450)104,249

408
407

Millions of yen
2023
Other
(*1)

Total

¥

Adjustments(*2)

Consolidated
(*3)

¥

–
–
–
–
–
¥
–
(854)
(854)
–
21,787¥ 64,392
82,70174,759127
221,979¥ 221,979–
221,979(1,400)126,261

–
–
–
127
127
¥ 127
854
981
50
225

¥ 64,392
82,70174,759127
221,979¥ 221,979
854
222,833(1,400)104,474

7,687

7

7,694

–

7,694

6,848

3

6,851

10

6,861

Adjustments(*2)

Consolidated(*3)

Thousands of U.S. dollars (Note 1)
2023

Reportable segments
Processed
Meat
Total
Food Products
Products

Sales:–
Ham & Sausage ............................ $ 482,192 $Precooked & Processed Foods .....
619,298–
Meat Products ..............................
–
559,825––
Other ............................................
Revenue from contracts with customers ... 1,101,490
559,825
Sales to third parties ..................... $ 1,101,490 $ 559,825––Intersegment sales and transfers ...
Net sales ....................................... 1,101,490
559,825(12,386)
1,528
Segment income (loss) .................
626,149
154,508
Segment assets .............................
Other items:
Depreciation and amortisation (*4) ..
54,508
3,055
Increase in property, plant andequipment and intangible
48,2333,048
assets (*4) ......................................

$ 482,192
619,298
559,825–
1,661,315$ 1,661,315–
1,661,315(10,858)
780,657

Other
(*1)

Total

$

–
–
–
951
951
$ 951
6,395
7,346
374
1,685

$ 482,192
619,298
559,825951
1,662,266$ 1,662,266
6,395
1,668,661(10,484)
782,342$– $ 482,192–
619,298–
559,825–951–
1,662,266$– $ 1,662,266(6,395)–(6,395)
1,662,266–(10,484)
163,150
945,492

57,56353

57,616–

57,616

51,28122

51,30375

51,378(*1) The “Other” segment is business other than that of the reportable segments and includes the insurance agency business.
(*2) Adjustments for total assets of ¥21,787 million ($163,150 thousand) indicate assets not attributed to any other segments andcomprise mainly cash and time deposits, investments in securities and investment and rental properties.
(*3) Segment income (loss) is equal to the operating loss in the consolidated statements of income.
(*4) Depreciation and amortisation and increase in property, plant and equipment and intangible assets include long-term prepaid expenses.

36

Segment information as of and for the fiscal year ended 31st March 2022 was as follows:

Reportable segments
Processed
Meat
Total
Food Products
Products

Sales:
Ham & Sausage ............................ ¥ 66,485
81,527Precooked & Processed Foods .....
Meat Products ..............................
––
Other ............................................
Revenue from contracts with customers ...
148,012
Sales to third parties ..................... ¥ 148,012–
Intersegment sales and transfers ...
Net sales .......................................
148,012(1,077)
Segment income (loss) .................
85,353
Segment assets .............................
Other items:
Depreciation and amortisation (*4) ..
7,519
Increase in property, plant andequipment and intangible
6,994
assets (*4) ......................................

¥––
70,455–70,455¥ 70,455–
70,455173
19,818¥ 66,485
81,52770,455–
218,467¥ 218,467–
218,467(904)
105,171

418
382

Millions of yen
2022
Other
(*1)

Total

¥

Adjustments(*2)

Consolidated
(*3)

¥

–
–
–
–
–
¥
–
(722)
(722)
–
23,532¥ 66,485
81,52770,455
143
218,610¥ 218,610–
218,610(865)
128,904

–
–
–
143
143
¥ 143
722
865
39
201

¥ 66,485
81,52770,455
143
218,610¥ 218,610
722
219,332(865)
105,372

7,937

9

7,946

–

7,946

7,376

–

7,376

1

7,377

(*1) The “Other” segment is business other than that of the reportable segments and includes the insurance agency business.
(*2) Adjustments for total assets of ¥23,532 million indicate assets not attributed to any other segments and comprise mainly cash and time
deposits, investments in securities and investment and rental properties.
(*3) Segment income (loss) is equal to the operating loss in the consolidated statements of income.
(*4) Depreciation and amortisation and increase in property, plant and equipment and intangible assets include long-term prepaid expenses.

(4) Information about loss on impairment of fixed assets by reportable segment
Information about loss on impairment of fixed assets by reportable segments as of and for the fiscal year ended 31st March2023 was as follows:
Millions of yen
2023
Reportable segments
Processed
Meat
Total
Food Products
Products

Loss on impairment of fixed assets ...

¥ 2,072

¥ 227

Other

¥ 2,299

Total–

Adjustments

Consolidated¥ 172¥ 2,471

Total

Adjustments

Consolidated$ 17,216$ 1,288$ 18,504¥ 2,299

Thousands of U.S. dollars (Note 1)
2023
Reportable segments
Processed
Meat
Total
Food Products
Products

Loss on impairment of fixed assets ...

$ 15,516$ 1,700$ 17,216

37

Other

–

Information about loss on impairment of fixed assets by reportable segment as of and for the fiscal year ended 31st March2022 was as follows:
Millions of yen
2022
Reportable segments
Processed
Meat
Total
Food Products
Products

Loss on impairment of fixed assets ...

–

–

Other

–

Total

–

–

Adjustments

Consolidated¥9¥9(5) Information about amortisation and balance of goodwill by reportable segment
Regarding information about amortisation and balance of goodwill by reportable segment as of and for the fiscal year ended
31st March 2023 there are no matters to be reported.
Regarding information about amortisation and balance of goodwill by reportable segment as of and for the fiscal year ended
31st March 2022, there are no matters to be reported.
(6) Information on gain on bargain purchase by reportable segment
Information on gain on negative goodwill by reportable segment for the fiscal year ended 31st March 2023 is not applicable.
Information on gain on negative goodwill by reportable segment for the fiscal year ended 31st March 2022 is not applicable.

38

19. Cash flow information
The reconciliation of cash and time deposits in the consolidated balance sheets and cash and cash equivalents in the
consolidated statements of cash flows as of 31st March 2023 and 2022 were as follows:

Cash and time deposits in the consolidated balance sheets ....................
Cash and cash equivalents in the consolidated statements of cash flows ....

Millions of yen
2023
2022
¥ 6,916¥ 7,991¥ 6,916¥ 7,991

Thousands of
U.S. dollars (Note 1)
2023$ 51,790$ 51,790

Significant non-cash transactions as of 31st March 2023 and 2022 were as follows:
Newly recorded assets and liablities related to finance lease transactions were as follows:

Lease assets and obligations ...................................................................

39

Millions of yen
2023
2022
¥ 680
¥ 967

Thousands of
U.S. dollars (Note 1)2023$ 5,09220. Comprehensive income
Amounts reclassified to profit attributable to owners of parent in the current period that were recognised in othercomprehensive income in the current or previous periods and the tax effects for each component of other comprehensive income
were as follows:
Thousands of
U.S. dollars (Note 1)
2023

Millions of yen
2023
2022
Unrealised gains on securities:
Increase (decrease) during the year ...................................................
Reclassification adjustments .............................................................
Amount before tax effect ...................................................................
Tax effect ...........................................................................................
Subtotal .............................................................................................
Deferred gains (losses) on hedges :Increase (decrease) during the year ...................................................
Amount before tax effect ...................................................................
Tax effect ...........................................................................................
Subtotal .............................................................................................
Adjustments for retirement benefits:
Increase (decrease) during the year ...................................................
Reclassification adjustments .............................................................
Amount before tax effect ...................................................................
Tax effect ...........................................................................................
Subtotal .............................................................................................
Share of other comprehensive income of associates accounted for using equity method:
Increase (decrease) during the year ..................................................
Total other comprehensive income .........................................................

40

¥ 580
(644)
(64)
27
(37)

¥

(949)
(400)
(1,349)395(954)$ 4,343(4,822)
(479)
202
(277)

(102)
(102)
31
(71)

52
52
(16)
36

(764)
(764)
232
(532)

(619)
94
(525)
131
(394)

23
136
159
(40)
119

(4,635)704(3,931)981(2,950)23¥ (479)

(0)
(799)

172
$ (3,587)¥

Independent auditor’s report
To the Board of Directors of MARUDAI FOOD Co., Ltd.:
OpinionWe have audited the accompanying consolidated financial statements of MARUDAI FOOD Co., Ltd.
(“the Company”) and its consolidated subsidiaries (collectively referred to as “the Group”), which
comprise the consolidated balance sheets as at March 31, 2023 and 2022, the consolidated statements ofincome and comprehensive income, changes in net assets and cash flows for the years then ended, andnotes, comprising a summary of significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2023 and 2022, and its
consolidated financial performance and its consolidated cash flows for the years then ended inaccordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Groupin accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Appropriateness of the Company’s judgment as to whether an impairment loss should berecognized on the fixed assets of the Processed Food Products operations
The key audit matter

How the matter was addressed in our audit

Property, plant and equipment of ¥57,319
million and intangible assets of ¥1,573 million
were recognized in the consolidated balance
sheet of Marudai Food Co., Ltd. (the“Company”) and its consolidated subsidiaries
as of March 31, 2023. Of these amounts,
property, plant and equipment and intangible

The primary procedures we performed to assess theappropriateness of the Company’s judgment with respect
to the recognition of an impairment loss on the fixed
assets of the Processed Food Products operations included
the following:(1) Internal control testing41

assets in the business assets of the Processed
Food Products operations, including corporate
assets, amounted to ¥30,166 million and ¥1,370
million, respectively, as described in Note 2,“Significant accounting policies, Significant
accounting estimates, 1. Impairment of fixed
assets” to the consolidated financial statements.
These total amounts represent 25.0% of thetotal consolidated assets for the current fiscal
year.
While these assets are depreciated/amortized ina systematic manner, they need to be tested for
impairment whenever there is an impairment
indicator. The impairment test is performed bycomparing the undiscounted future cash flowsthat are expected to be generated from therelated asset group with their carrying amounts.
If the recognition of an impairment loss isdeemed necessary, the carrying amount isreduced to the recoverable amount, and theresulting decrease in the carrying amount isrecognized as an impairment loss.
The Company has incurred operating losses for
six consecutive fiscal periods mainly due tocontinued severe environments such asincreases in raw material costs exceeding
increases in selling prices and higher energy
costs. Accordingly, the Company assessed
whether an impairment loss should berecognized on the business assets of theProcessed Food Products operations, including
corporate assets, in the current fiscal year. The
estimated undiscounted future cash flows usedin the assessment were based on the
Company’s business plan prepared bymanagement. In particular, net sales estimatedby taking into account the status ofachievement of the budget for the current fiscal
year and changes in market environments, aswell as prospects of unit prices of raw materials
based on market trends, involved a high degreeof uncertainty, and the Company’s
determination thereon had a significant effecton the estimated future cash flows.

We tested the design and operating effectiveness ofcertain of the Company’s internal controls relevant todetermining impairment losses to be recognized.

(2) Assessment of the reasonableness of theestimated undiscounted future cash flows
In order to assess the appropriateness of the major
assumptions adopted in developing the Company’sbusiness plan, which served as the basis for estimating
undiscounted future cash flows, we inquired ofmanagement and the personnel responsible for eachdivision about the basis of these assumptions. In addition,
we performed the following procedures:

 To assess the estimated net sales in the businessplan, we:

We, therefore, determined that our assessmenton the appropriateness of the Company’s
judgment as to whether an impairment loss
should be recognized on the fixed assets of theProcessed Food Products operations was of
most significance in our audit of the42–

performed trend analysis using past businessplans and actual results and monitoring of theachievement of the recent sales price revision,and assessed the feasibility of the sales pricerevision, which was a key assumption of thecurrent business plan; and–assessed whether the estimated net sales wereconsistent with data on forecasts of market
trends in ham and sausages and processed
foods published by external organizations.

We performed trend analysis using actual unit
prices of raw materials purchased in the past
to assess the estimated unit prices in thebusiness plan, and assessed whether theestimated unit prices were consistent withmarket data published by externalorganizations.

consolidated financial statements for thecurrent fiscal year, and accordingly, a key audit
matter.

Other Information
The other information comprises the information included in the Annual Report but does not include
the consolidated financial statements, the financial statements, and our auditor’s reports thereon.
Management is responsible for the preparation and presentation of the other information. Corporate
auditors and the board of corporate auditors are responsible for overseeing the directors’ performanceof their duties with regard to the design, implementation and maintenance of the reporting process forthe other information.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors
for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated 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 the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan and using the going concern basis ofaccounting unless management either intends to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties with regard to the design, implementation and maintenance of the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives 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 issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with auditing standards generally accepted in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise

43

professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an
opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting
and based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group tocease to continue as a going concern.



Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with accounting standards generally accepted in Japan, the overall presentation,
structure and content of the consolidated financial statements, including the disclosures, andwhether the consolidated financial statements represent the underlying transactions and events in amanner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
From the matters communicated with corporate auditors and the board of corporate auditors, we
determine those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2023 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis

44described in Note 1 to the consolidated financial statements.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of
the Certified Public Accountants Act of Japan.

Takahide Nakahata
Designated Engagement Partner
Certified Public Accountant

Satoru Komatsuno
Designated Engagement Partner
Certified Public Accountant

KPMG AZSA LLC
Osaka Office, Japan
July 27, 2023
Notes to the Reader of Independent Auditor’s Report:
This is a copy of the Independent Auditor’s Report and the original copies are kept separately by theCompany and KPMG AZSA LLC.

45

DIRECTORS AND STATUTORY AUDITORS(As of 29th June 2023)
President andRepresentative Director:

Yuji Sato

Director and Chairman:

Tokuo Kudara

Managing Director:

Shigeki Fukushima

Director:

Toshio Tanaka

Outside Directors:

Masahiro Fuchizaki
Keiko Kaneko

Statutory Auditor:

Toru Miyachi

Outside Statutory Auditors:

Takashi Matsuzawa
Motoaki Nishimura46

OUTLINE OF THE COMPANY(As of 31st March 2023)
Established:

10th June 1958

Major Subsidiaries:
Hokkaido Marudai Food Co., Ltd.

Stated Capital:¥6,716 million

Tohoku Marudai Food Co., Ltd.
Shin-etsu Marudai Food Co., Ltd.

Number of Employees: 1,967

Chubu Marudai Food Co., Ltd.
Chu-Shikoku Marudai Food Co., Ltd.

Head Office:21-3 Midori-cho, Takatsuki-shi,

Kyushu Marudai Food Co., Ltd.

Osaka, Japan

Toda Foods Co., Ltd.
Azumino Food Co., Ltd.

Branch Office:4-7-5 Tsukiji, Chuou-ku,

Toraku Foods Co., Ltd.

Tokyo, Japan

Marushin Foods Co., Ltd.
Pioneer Foods Co., Ltd.

Sales Offices:

The sales headquarters at the

Umeya Co., Ltd.

Company’s head office in Osaka

Yahata Food Co., Ltd.

controls 9 distribution centers andHornmeier Co., Ltd.

6 regional sales departments which

Marudaifood Co., Ltd.

service 23 local outlets.

Marudaifood Supply Co., Ltd.
Marudai Meat Co., Ltd.

Plants:Hokkaido, Iwate,

Meat Supply Co., Ltd.

Niigata, Kanto,

Marbest Trading Co., Ltd.

Ibaraki, Yokosuka, Shonan,

Marudai Service Co., Ltd.

Shizuoka, Matsusaka,

6 Other subsidiaries

Takatsuki, Okayama,
Hiroshima, Karatsu

Associated Company:
Betagro MF Deli Co., Ltd.

47

Head Office: 21-3 Midori-cho, Takatsuki-shi, Osaka, Japan
Telephone: 81-726-61-2518 Fax: 81-726-61-5006