(TRANSLATION)

Information Disclosed on the Internet under Laws,
Regulations and the Articles of Incorporation upon
Issuing Notice of the 79th Ordinary General Meetingof Shareholders● Establishment of the systems to secure the properness of businessactivities and the status of the implementation of such systems
pp. 1–9● Fundamental policy on corporate control

p. 10● Consolidated Statement of Changes in Equity:

p. 11● Notes to Consolidated Financial Statements:

pp. 12–24● Non-consolidated Statement of Changes in Net Assets: pp. 25–26● Notes to Non-consolidated Financial Statements:

pp. 27–42

NH Foods Ltd.
NH Foods Ltd. provides “Establishment of the systems to secure the properness of business activities and thestatus of the implementation of such systems,” “Fundamental policy on corporate control,” “Consolidated
Statement of Changes in Equity,” “Notes to Consolidated Financial Statements,” “Non-consolidated
Statement of Changes in Net Assets” and “Notes to Non-consolidated Financial Statements” to Shareholders
by posting them on its website (http://www.nipponham.co.jp/eng/ir/events/generalmeeting/) pursuant to theprovisions of laws, regulations and its Articles of Incorporation.

(TRANSLATION)(1) Establishment of the systems to secure the properness of business activities and thestatus of the implementation of such systems[Matters concerning the establishment of the systems to secure the properness of businessactivities](i)

Systems to secure the execution by the Directors of their duties complies with laws andregulations and the Articles of Incorporation(a) NH Foods Ltd. establishes the NH Foods Group Global Action Standards in order tostrictly implement its Action Guidelines so as to bring the Corporate Philosophy tofruition under the Corporate Philosophy and Management Principles. The Corporate
Officers and employees of the Group comply with it.
(b) The Corporate Officers of the Group take initiative in complying with laws andregulations and the internal rules, etc., including the Articles of Incorporation and the
NH Foods Group Global Action Standards, and ensure that all employees are fully
aware of these rules.
(c) NH Foods Ltd. establishes the Compliance Committee in order to examine policies
and measures concerning the compliance of the Group as a whole in a comprehensive
manner. The Compliance Department of NH Foods Ltd. reviews the NH Foods Group
Global Action Standards regularly and as necessary, and ensures that all Corporate
Officers and employees of the Group are fully aware thereof.
(d) The Corporate Officer appointed by the President and Representative Director will
preside over the Compliance Committee, and NH Foods Ltd. convenes meetings of
the Compliance Committee, which periodically reports to the Board of Directors on
progress on ensuring awareness of compliance and specific problems, issues, etc.
(e) NH Foods Ltd. secures a direct way for employees to report conducts at the Group
that pose a question as to compliance of laws and regulations and establish and operateinternal and external hotlines in relation to compliance issues.

(ii) Systems concerning storage and management of information pertaining to the execution ofduties by the Directors(a) The Directors, pursuant to the document management rules, properly store andmanage the following documents (including electronic records; the same applies
hereinafter) concerning the execution of their respective duties and other important
information:a) Minutes of general meetings of shareholders and their related materials;b) Minutes of the Board of Directors’ meetings and their related materials;

1

(TRANSLATION)c) Records of proceedings of other important meetings hosted by the Directors or
their instructions, and their related materials;d) Documents pertaining to decision-making by the Directors and their attacheddocuments; ande) Other important documents for execution of duties by the Directors.
(b) The President and Representative Director is responsible for monitoring andsupervising the storage and management of information set forth in (a) above. The
President and Representative Director performs such that pertain to preparation ofminutes as required by the Companies Act of Japan.
(c) The documents set forth in (a) above are kept on file for at least 10 years and are madeavailable for inspection as necessary.
(iii) Rules and other systems concerning management of exposure to risk of loss(a) NH Foods Ltd. enacts risk management rules, establishes a Risk Management
Committee in order to examine policies and measures concerning risk managementof the Group as a whole in a comprehensive manner and designate ComplianceDepartment as a section that oversees risk management of the Group as a whole andthat defines the risk management system.
(b) The Compliance Department cooperates with other relevant sections to establish apreventive system adopted for non-emergency events and a system for emergency
events to facilitate prompt and appropriate information communication and urgent
tasks that correspond to risks expected under the risk management rules.
(c) The Compliance Department identifies important risks to the Group and periodicallyholds meetings of the Risk Management Committee to share, respond to and confirm
risk information for the purpose of managing the said risks through the reasonable andmost appropriate method, from the perspective of the Group as a whole.
(d) The Audit Department cooperates with the Compliance Department and other relevant
sections of the business division to audit the state of day-to-day risk management of
the Group.
(iv) Systems to secure efficient execution of the Directors’ duties(a) To enhance the transparency and appropriateness of decision-making by the Board of
Directors, the Board of Directors includes two or more Outside Directors, in principle.
(b) The Board of Directors, based on the assignment of duties of the management bodies,
Representative Directors, Executive Directors and Executive Officers, etc.
determined by the Board of Directors, cause the Representative Directors, Executive
Directors, and Executive Officers to execute business.

2

(TRANSLATION)(c) With regard to items of business in respect of which the decision-making
authorization is delegated to the Representative Directors, Executive Directors, andExecutive Officers, such items are determined by such bodies or in accordance withprocedures as stipulated in the Rules on Business Authorization. The Rules on
Business Authorization may be revised from time to time when the relevant laws or
regulations are amended or abolished, or as necessary, to enhance the efficiency ofthe execution of their duties.
(v) Systems to secure the employees’ execution of their duties to comply with laws andregulations and the Articles of Incorporation(a) To ensure that the execution of duties by NH Foods Ltd.’s employees comply withlaws and regulations and the Articles of Incorporation, NH Foods Ltd. establishes asystem to strictly implement its Corporate Philosophy, Management Principles,
Action Guidelines and the NH Foods Group Global Action Standards. NH Foods Ltd.
also cause the Representative Directors, Executive Directors, and Executive Officers
to train and educate the employees of the Group concerning compliance.
(b) In the event of any employee of the Group finds any material violation of the law or
regulation or any other material fact concerning compliance in any company within
the Group, he/she reports the same to NH Foods Ltd.’s Compliance Department
pursuant to the internal rules, etc., including the NH Foods Group Global Action
Standards. The Corporate Officer in charge of compliance directs and supervises
investigations of such reported fact, and the said Department confirms all the facts
revealed through the investigation, cooperate with the relevant sections from theperspective of their expertise, formulate and implement corrective measures andrecurrence prevention measures.
(c) With regard to important information, NH Foods Ltd. discloses the content thereof
and its status of handling and results thereof to the Corporate Officers and employeesof the Group and ensures that all Corporate Officers and employees are fully aware
thereof.
(d) The President and Representative Director directly manages the Audit Department.
The Audit Department, in accordance with the instruction of the President andRepresentative Director, conducts audits on the state of execution of business. The
Quality Assurance Department conducts quality audits.
(vi) Systems to secure the appropriateness of business activities of the corporate group
comprised of NH Foods Ltd. and its subsidiaries(a) The NH Foods Group Global Action Standards serve as action standards for the
Corporate Officers and employees of the Group to act in compliance with laws andregulations, the Articles of Incorporation and social norms.

3

(TRANSLATION)(b) In order to ensure strict compliance with (a) above, the Compliance Department
supervises compliance efforts on a cross-sectional manner and provides training, etc.
for the Corporate Officers and employees of the Group.
(c) The Representative Directors, Executive Directors, and Executive Officers of theGroup define internal control through means such as establishment of the PrimaryBusiness Administration Rules, in order to ensure appropriate execution of businessat each business division.
(d) The Audit Department audits the subsidiaries on a regular basis and cooperates withbusiness divisions that oversee the business of each company within the Group. The
results of such audits are reported to the President and Representative Director.
(e) The Group Audit & Supervisory Board Members’ Office strengthens the auditing
functions and internal controls of the Group by having Audit & Supervisory Board
Members of the subsidiaries who are independent of Directors of the subsidiaries
conduct audits, and by strengthening cooperation with other relevant sections.
Accordingly, the Group Audit & Supervisory Board Members’ Office develops anorganization and human resources necessary to establish and realize an ideal auditing
system for all subsidiaries.
(f) NH Foods Ltd. respects the autonomy and independence of the management of thesubsidiaries. However, when the subsidiaries make decisions on important managerial
matters, NH Foods Ltd. establishes a system in which prior approval, prior adjustment
and reporting are made to us in accordance with the Rules on Business Authorization.
(g) As for transactions between NH Foods Ltd. and its subsidiaries (including transactions
between subsidiaries), based on the market principle, NH Foods Ltd. ensures that suchtransactions are not significantly advantageous or disadvantageous compared totransactions with third parties and establishes a system in which transparency oftransactions is ensured such as confirmation with experts as necessary.
(h) With regard to the risk management conducted by the subsidiaries as a corporategroup, NH Foods Ltd. grasps the status thereof and establishes a system in which NH
Foods Ltd. provides instructions for improvement.
(i)

NH Foods Ltd. establishes compliance point of contact and a system to allow all
employees of the Group to directly report an incident within and outside the Group,
and NH Foods Ltd. establishes the Group’s Whistleblowing Rules and ensures that
the Corporate Officers and employees of the Group are fully aware of these rules. NH
Foods Ltd. does not dismiss or unfavorably treat any person who has been awhistleblower.

(j)

In accordance with the Group’s Whistleblowing Rules, in order to encourage
employees to report any violation of laws and regulations, misconducts, etc., by the
Corporate Officers of the Group, NH Foods Ltd. establishes reporting hotlines
regarding the Corporate Officers as subjects to report.

4

(TRANSLATION)(k) For cases of any violation of laws, regulations and/or internal rules, etc. or if any threat
thereof occurs or is revealed in NH Foods Ltd. or its subsidiaries, NH Foods Ltd.
establishes a system in which the foregoing is reported to NH Foods Ltd.’sCompliance Department.
(l)

The Group, as a member of society, has no relationship, including business
relationship, with any anti-social force that threatens the social order or safety anduncompromisingly deal with any undue claims. The NH Foods Group Global Action
Standards stipulate how to deal with anti-social forces, and NH Foods Ltd. ensuresthat how to deal with anti-social forces are made fully aware throughout the Group.
The General Affairs Department of NH Foods Ltd. collects and manages informationon undue claims, thereby reducing risks concerning anti-social forces.

(m) The Group establishes a system to ensure the reliability of financial reporting andestablishes relevant rules as well as a system under which responsible sections andthe audit section are able to periodically evaluate the operations of the system to findand solve problems, if any. In addition, the Group provides training and raises
awareness of compliance with accounting standards and related laws and regulations,
thereby reinforcing internal control over financial reporting.
(n) As for foreign subsidiaries, NH Foods Ltd. causes such subsidiaries to establish andoperate appropriate internal control in accordance with this policy to a reasonable
extent. NH Foods Ltd. causes such subsidiaries to apply respective internal control
procedures/systems and accounting processing/reporting methods established by NH
Foods Ltd. to the extent permitted by the laws, etc. of each relevant country.
(vii) Matters concerning the employees assisting the Audit & Supervisory Board Members to
execute their duties, matters concerning the independence of such employees from theBoard of Directors, matters concerning ensuring the effectiveness of instructions toward
such employees(a) NH Foods Ltd. assigns staff for the Audit & Supervisory Board Members as
employees assisting the Audit & Supervisory Board Members in the execution of theirduties.
(b) The number of staff for Audit & Supervisory Board Members is determined upon
consultation with the Audit & Supervisory Board.
(c) The staff for the Audit & Supervisory Board Members dedicates all of their work timeto the Audit & Supervisory Board and assists with its auditing activities exclusively
pursuant to instructions of the Audit & Supervisory Board.
(d) NH Foods Ltd. obtains prior approval from the Audit & Supervisory Board uponnomination, personnel change, evaluation and disciplinary punishment of the staff for
the Audit & Supervisory Board Members and establishes a system in which theindependence from the Board of Directors is ensured.

5

(TRANSLATION)(viii) System for reporting by the Directors and employees of NH Foods Ltd. and its subsidiaries
to the Audit & Supervisory Board Members and other systems for reporting to the Audit& Supervisory Board Members, system for ensuring that any person making such reportwill not be subject to unfavorable treatment due to the fact of making such report.
(a) The Audit & Supervisory Board Members attend the Board of Directors’ meetings
and the representative(s) of the Audit & Supervisory Board attend important meetings
such as the Management Strategy Committee.
(b) The Directors report the following matters to the Audit & Supervisory Board:a) Matters resolved at meetings such as the Management Strategy Committee;b) Matters that may inflict material damage to the Group;c) Matters important to business conditions each month;d) Important matters concerning the status of internal audits and risk management;e) Material violations of laws or regulations or the Articles of Incorporation;f) Matters in violation of the NH Foods Group Global Action Standards; andg) Status of whistleblowing made to the compliance point of contact and the details
thereof.
(c) If the Audit & Supervisory Board Members determine necessary, the Audit &Supervisory Board Members may request the Directors, Executive Officers andemployees, or any of NH Foods Ltd.’s subsidiaries’ Directors, Audit & Supervisory
Board Members, Executive Officers and employees to report to the Audit &Supervisory Board Members at any time.
(d) NH Foods Ltd. ensures that any person who makes a report to the Audit & Supervisory
Board Members will not be subject to dismissal or suffer any other unfavorable
treatment due to the fact of making such report.
(e) The Audit & Supervisory Board investigates the facts regarding reports of any
violation of laws and regulations, misconduct, etc. by the Corporate Officers. The
Audit & Supervisory Board may request the establishment of an investigation teamwith members of the relevant sections and an investigation of the facts, if necessary.
(f)

The Corporate Officers and employees of the Group shall cooperate with the Audit &Supervisory Board or the investigation team if cooperation is requested for suchinvestigation.

6

(TRANSLATION)(g) The Audit & Supervisory Board shall report to the Board of Directors, etc. in the eventthat misconduct, etc. is confirmed as a result of the investigation. In the event that
misconduct, etc. is confirmed as a result of the investigation, NH Foods Ltd. shallpromptly implement corrective measures and recurrence prevention measures.
(ix) Other systems to assure effective audits by the Audit & Supervisory Board Members(a) In principle, the majority of the Audit & Supervisory Board members are Outside
Audit & Supervisory Board Members in order to secure transparency externally.
(b) NH Foods Ltd. provides opportunities for the Audit & Supervisory Board to haveindividual hearings with the Representative Directors, the Executive Directors, theExecutive Officers and important employees, and the Audit & Supervisory Board
regularly hold meetings to exchange opinions with the Representative Directors andthe Accounting Auditors, respectively.
(c) The Audit & Supervisory Board Members may assign matters necessary for auditing
activities to the staff of the Audit Department. The Audit Department, upon
consultation with the Audit & Supervisory Board, conducts internal audits of thematters requested by the Audit & Supervisory Board Members and reports the results
thereof to the Audit & Supervisory Board.
(d) When conducting audits, the Audit & Supervisory Board may, as necessary and at theexpense of NH Foods Ltd., retain legal and accounting experts.
[Overview of the status of the implementation of the systems to secure the properness of businessactivities](i) Overall internal control system(a) To develop and implement the internal control system of NH Foods Ltd. and its groupcompanies and to efficiently achieve the purpose of internal control, the Audit
Department conducts audits pursuant to the annual audit plan as to whether the
execution of business is performed properly and efficiently. The Audit Department
conducted audits for 16 divisions and 24 group companies in the fiscal year ended
March 31, 2024.
(b) As to internal control over financial reporting, the Internal Control/JSOX Committee
examines pursuant to the Internal Control Management Rules Concerning Financial
Reporting whether the internal control of the Group functions appropriately, andreports the result thereof to Representative Directors.
(ii) Compliance system(a) NH Foods Ltd. has established the “Compliance Committee,” which comprehensively
reviews policies and measures concerning the compliance of the entire Group, the“Compliance Promotion Committees” where individual group companies anddivisions promote compliance-related activities, and the “Compliance Leader
7

(TRANSLATION)
Conference,” where representatives from each Compliance Promotion Committee
discuss concrete measures, and each committee cooperates with each other.
(b) To raise awareness of compliance, NH Foods Ltd. holds level-specific compliancetraining sessions, compliance meetings, and office study sessions. In the medium-term
management plan, NH Foods Ltd. made efforts to prevent harassment and reinvigorate
communication in the workplace, under the activity theme of “We all work together
to develop ‘workplaces we can be proud of’ where we discuss, recognize each otherand grow together.”(c) NH Foods Ltd. ensures full implementation of compliance management by promoting
the operation thereof in accordance with the NH Foods Group Whistleblowing Rules.
Especially, NH Foods Ltd. has established one point of contact for consultation ofcompliance inside the Group and two outside the Group to allow all employees of theGroup to report and consult on compliance-related issues freely without concern fororganizational, departmental and positional restrictions, etc., and thereby we work forthe prevention and prompt revelation of problems such as misconduct. NH Foods Ltd.
also further ensures that persons in charge of whistleblowing shall comply withconfidentiality obligation in response to the revision of the Whistleblower Protection
Act enforced in June 2022.
(iii) Risk management system(a) The Risk Management Committee established by the President and Representative
Director centrally covers the group-wide risks and primarily endeavors to recognize
and assess various risks, identify high priority risks and review an action policy.
During the fiscal year ended March 31, 2024, 4 meetings were held, where the resultsof the review were reported to the Board of Directors.
(b) In the event of a large-scale accident, disaster, scandal, etc., NH Foods Ltd. establishes
the Crisis Management Committee to deal with the situation.
(iv) Business management of group companies(a) With regard to the business management of the respective group companies, NH
Foods Ltd. established a system in which each group company is subject to review
and obtains the approval of its business execution according to significance, by andfrom the Board of Directors or management committees including the Management
Strategy Committee, Directors or Executive Officers.

8

(TRANSLATION)(b) NH Foods Ltd. receives reports on the status of the execution of each business at themeeting of the Board of Directors on a quarterly basis.
(c) Study sessions hosted by the Legal Affairs Department (in June for newly appointed
Corporate Officers and in October for all Corporate Officers) and study sessions andliaison meetings (12 times a year for Audit & Supervisory Board Members) hosted by
the Group Audit & Supervisory Board Members’ Office are held to serve as forums
to acquire the necessary knowledge to appropriately fulfill expected roles andresponsibilities as Corporate Officers of Group companies of NH Foods Ltd. and to
exchange information and opinions. Thus, the level of the Corporate Officers ofGroup companies is being improved and an operational audit support system is being
developed.
(v) Systems for efficient execution of duties
NH Foods Ltd. defines rules on decision-making, including matters to be resolved at themeeting of the Board of Directors, pursuant to the Rules of the Board of Directors. During
the fiscal year ended March 31, 2024, 18 meetings of the Board of Directors were held. In
addition, we convened 24 meetings of the Management Strategy Committee, a body
discusses and decides substantive matters concerning management.
(vi) Execution of duties by Audit & Supervisory Board Members(a) Audit & Supervisory Board Members attend important meetings, such as the Internal
Control/JSOX Committee, Risk Management Committee, Corporate GovernanceCommittee, and Management Strategy Committee, and assess the status of thedevelopment and implementation of the internal control system.
(b) Audit & Supervisory Board Members request business reports from the Directors,
Executive Officers, and important employees of NH Food Ltd. and its subsidiaries,
and inspect the status of the business operations and assets of NH Food Ltd. and its
subsidiaries.
(c) Audit & Supervisory Board Members enhance the effectiveness of audit by having
opportunities to exchange information and opinions with the Audit Department andAccounting Auditors on a regular basis. During the fiscal year ended March 31, 2024,
Audit & Supervisory Board Members organized 12 meetings with the Audit
Department and 12 meetings with Accounting Auditors, respectively, to exchange
information and opinions regularly.
(d) NH Foods Ltd. establishes a system in which three staff members are assigned to
Audit & Supervisory Board for the smooth execution of duties by Audit &Supervisory Board Members.

9

(TRANSLATION)(2) Fundamental policy on corporate control
The shares of NH Foods Ltd. may be transferred freely, in principle. On the stock market, theshares are traded freely and actively by many investors. Hence, fundamentally, free trading in theshares of NH Foods Ltd. determines who will control the determination of its financial andbusiness policies. Therefore, in the event that a plan to make a large purchase of shares of NH
Foods Ltd., enough to control the determination of its financial and business policies, is offered,management believes that voting for or against the plan must depend on the free will of theshareholders, finally. However, from the standpoint of ensuring the common interests of theshareholders of NH Foods Ltd. and preventing damage to the corporate value, NH Foods Ltd. will
request the party attempting to make a large purchase of shares of NH Foods Ltd. to provide
necessary and sufficient information for the shareholders to make an appropriate judgment on therationality of such action. NH Foods Ltd. will also disclose the views, etc. of the Board of Directors
and, in addition to the efforts to ensure information and time for consideration of the shareholders,will take appropriate steps in accordance with the Financial Instruments and Exchange Act, theCompanies Act and other relevant laws and regulations.

10

(TRANSLATION)CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(from April 1, 2023 to March 31, 2024)(millions of yen)

Items

Commonstock

CapitalsurplusRetainedearnings

Balance as of April 1, 2023

36,29471,095369,389

ProfitEquity attributable to owners of the parent
Accumulated other comprehensive income
Accumulated
other
Financial
comprehensive
assetsExchange
ReTreasury
income ofat differences
measurement measured
stock
disposal
fair
value
on
translation
Subtotalof definedgroupsthrough
otherofforeign
benefit plans comprehensive operationsclassified asheld for sale
income(2,057)

6,469

10,72428,078––Dividends

28,078

Disposal of treasury stock(19)

Share-based paymenttransactions

34

–

3,482

11,65618,117

(999)

2,979

3,482

11,65618,117(999)

Total transactions withownersBalance as of March 31, 2024

Total
equity492,913

9,868

502,781

28,0781,370

29,448

17,118188

17,30645,196

1,558

46,754–(11,275)(50)(11,325)

(6)

–

(6)

–

(6)

660

–

641

–

641

–

34

–

34

–

–

323

323

(4,113)–––

Sales of subsidiaries
Transfer of accumulated othercomprehensive income toretained earnings

999

2,979
(11,275)

Acquisition of treasury stock

17,193–

Other comprehensive income
Comprehensive income

–

Total

Noncontrollinginterests

4,113(2,979)(1,134)–15(7,162)654(2,979)(1,134)–(4,113)–(10,606)273(10,333)

36,294

71,110390,305(1,403)–

8,817

22,38031,197–

527,503

11,699539,202(Note) Figures are given by rounding fractions of a half or more of one million yen upward and the rest downward.

11

(TRANSLATION)NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Notes to the Basis for Preparing Consolidated Financial Statements)(1)

Basis for preparing consolidated financial statements:

Pursuant to the first paragraph of Article 120 of the Ordinance on Company Accounting, theconsolidated financial statements of NH Foods Ltd. and its consolidated subsidiaries (collectively,
the “Group”) are prepared in accordance with IFRS Accounting Standards; however, in accordancewith the provisions of the second sentence of said paragraph, certain statements and disclosuresrequired under IFRS Accounting Standards are omitted.
(2)Matters concerning the scope of consolidation and application of the equity method:
Number of consolidated subsidiaries:
Number of equity-method companies:

64 companies
7 companies(3) Matters concerning accounting policies:
1. Method and basis of valuation of financial instruments
1) Non-derivative financial assets(i) Initial recognition and measurement
The Group initially recognizes trade and other receivables as of the occurrence date. All
the other financial assets are initially recognized as of the transaction date on which theGroup becomes a contracting party of such financial instrument. When the Group initiallyrecognizes the non-derivative financial assets, they are classified into financial assets
measured at amortized cost or financial assets measured at fair value through othercomprehensive income or profit or loss. A summary of each classification andmeasurement model is as follows:
Financial assets measured at amortized cost
Initially measured by adding the transaction cost to the fair value.
Financial assets measured at fair value through other comprehensive income
Initially measured by adding the transaction cost to the fair value.
Financial assets measured at fair value through profit or loss
Initially measured at fair value, and transaction costs are recognized as profit or loss at thetime of occurrence.
(ii) Subsequent measurement
After the initial recognition, financial assets are measured as follows, according toclassification:
Financial assets measured at amortized cost
Measured at amortized cost based on the effective interest method.
Financial assets measured at fair value through other comprehensive income
Measured at fair value, and changes in their fair values are recognized as othercomprehensive income.
However, dividends from financial assets measured at fair value through othercomprehensive income are recognized as profit or loss.
Financial assets measured at fair value through profit or loss
Measured at fair value, and changes in their fair values are recognized as profit or loss.
12

(TRANSLATION)(iii) Derecognition
The Group derecognizes the financial assets if the contractual rights of cash flow generated
from the financial assets expire, or if the said financial assets are assigned and all the risks
and rewards of ownership are transferred.
(iv) Impairment of financial assets
Financial assets measured at amortized cost and debt financial instruments measured atfair value through other comprehensive income are presented after deducting credit losses
likely to occur in the future. The Group evaluates whether the credit risk of such financial
assets has increased significantly or not since the initial recognition.
If such credit risk has not increased significantly since the initial recognition, allowancefor credit losses of such financial assets is measured at the amount equivalent to 12-month
expected credit losses. In contrast, if the credit risk has increased significantly since theinitial recognition, allowance for credit losses of such financial asset is measured at an
amount equivalent to lifetime expected credit losses.
However, with respect to trade and other receivables, allowance for credit losses ismeasured at an amount equivalent to lifetime expected credit losses and such measured
amount is recognized as profit or loss.
2) Non-derivative financial liabilities(i) Initial recognition and measurement
The Group initially recognizes debt securities issued by the Group as of such issuance date.
All the other financial liabilities are recognized as of the transaction date in which theGroup becomes a contracting party of such financial instruments.
The Group holds interest-bearing liabilities and trade and other payables as nonderivative financial liabilities. At initial recognition, those are measured by subtractingfrom the fair value the transaction costs which are directly attributable to the relevant
issuance.
(ii) Subsequent measurement
After the initial recognition, financial liabilities are measured at amortized cost based on
the effective interest method.
(iii) Derecognition
The Group derecognizes the financial liabilities if they are extinguished, in other words,
when contractual obligations are performed, discharged, cancelled or expire.
3) Derivative and hedge accounting
The Group uses derivatives such as foreign currency forward exchange contracts andinterest rate swap contracts to hedge currency risks and interest rate risks. These
derivatives are initially measured at fair value at the time the agreement is concluded, andcontinue to be measured at fair value thereafter.
Changes in fair value of derivatives is recognized as profit or loss in the consolidated
statement of income.
Further, the Group has not adopted hedge accounting.
2.

Method and basis of valuation of inventories
Inventories are measured at the lower of cost and net realizable value. For calculation of the cost,
the average cost method is used. The cost of the inventories includes all costs of purchase, costsof conversion, and other costs incurred in bringing the inventories to their present locations andconditions.
13

(TRANSLATION)
Net realizable value is the estimated selling price in the ordinary course of business less theestimated costs of completion and the estimated costs necessary to make the sale.
3.

Agricultural accounting
Biological assets are measured at fair value less costs to sell on initial recognition and at the endof each reporting period, if the fair value can be reliably measured. Changes in fair value
according to such accounting are recognized as profit or loss. In contrast, if the fair value
measurements are determined to be clearly unreliable, they are measured at cost less any
accumulated depreciation and any accumulated impairment losses.
Harvested agricultural produce is reclassified from biological assets to inventories at theamount of fair value less costs to sell at the point of harvest.

4.

Property, plant and equipment
For measurement of property, plant and equipment, the cost model is adopted and they arecarried at cost less any accumulated depreciation and any accumulated impairment losses.
Property, plant and equipment are depreciated using the straight-line method over the estimateduseful life of each asset.

5.

LeasesAt the inception of a contract, the Group determines whether the contract is or contains a lease
if the contract conveys the right to control the use of an identified asset for a period of time inexchange for consideration.
For such lease contracts, the Group recognizes right-of-use assets and lease liabilities at thecommencement date of the lease.
Lease liabilities are initially measured and recognized at the discounted present value of thetotal lease payments that are not paid at the commencement date. The interest rates implicit in
the lease are used to measure the present value of the lease payments that are not paid if those
rates can be readily determined. If those cannot be readily determined, the lessee’s incremental
borrowing rates are used. Lease payments are allocated to interest expenses and repayments oflease liabilities under the interest method. Interest expenses on the lease liabilities are separately
recognized from the depreciation charges for the right-of-use assets in the consolidated
statement of income. The Group initially measures the right-of-use assets by adding any initial
direct costs, any lease payments made before the commencement date and any costs ofobligations to restore the assets to the conditions required by the contracts to the amount of theinitial measurement of the lease liabilities. The right-of-use assets are depreciated under thestraight-line basis or another systematic basis over the lease terms.
However, the Group elects not to recognize right-of-use assets and lease liabilities for either
short-term leases with a lease term of 12 months or less, or leases for which the underlying assets
are of low value. The total lease payments of these leases are recognized as expenses under thestraight-line basis or another systematic basis over the lease terms.

14

(TRANSLATION)
6. Intangible assets and goodwill
Intangible assets acquired separately are measured at cost on initial recognition. Intangible assets
acquired in a business combination and recognized separately from goodwill are measured at
the fair value at the acquisition date.
For measurement of intangible assets, the cost model is adopted and they are carried at costless any accumulated depreciation and any accumulated impairment losses.
For amortization of intangible assets with finite useful life, the straight-line method is usedover each estimated useful life.
For goodwill, the acquisition cost less accumulated impairment losses is recorded.
7.

Impairment of non-financial assets
For impairment of non-financial assets excluding inventories, biological assets, deferred tax
assets and assets related to retirement benefits, the Group determines whether there is any
indication of impairment at the end of the reporting period. If there is an indication of
impairment, the recoverable amount of the asset is estimated. For goodwill and intangible assets
with indefinite useful lives, the recoverable amount of the asset is estimated every year at thesame time and at any time there is an indication of impairment.
If the recoverable amounts of assets or cash-generating units are lower than the carrying
amounts, the carrying amounts are reduced to the recoverable amounts and impairment losses
are recognized.
For impairment losses recognized in the past, the Group determines as of the closing date ofeach reporting period whether there is an indication of possible decrease or extinguishment ofloss.
If there is an indication of reversal of impairment losses, recoverable amount of the asset isestimated. Further, if such recoverable amount is more than the carrying amount, impairment
losses are reversed.
The maximum amount reversed is an amount which is not higher than the carrying amount lessthe depreciation cost or amortization cost if impairment losses had not been recognizedpreviously.
Impairment losses recognized in relation to goodwill are not reversed.

8.

Post-employment benefits
The Group adopted the defined benefit plan comprised of defined benefit pension plan andretirement lump-sum severance plan, and defined contribution pension plan, as postemployment benefit plans.
The liabilities or assets of the defined benefit plan are recognized at an amount representing
the present value of the defined benefit obligations less the fair value of the plan assets (theeffect of the asset ceiling may be taken into account if necessary).
The present value of the defined benefit obligations is calculated by using the projected unit
credit method. The discount rate used in this calculation is determined by reference to market
yields at the end of the reporting period on high-quality corporate bonds for the period until the
expected date of future benefit payment.
Remeasurement of the net defined benefit liabilities or assets is recognized as othercomprehensive income at the time of occurrence and is immediately reclassified as retained
earnings. Past service cost and any gain or loss on settlement are recognized as profit or loss.

15

(TRANSLATION)
Expenses related to post-employment benefits of the defined contribution pension plan arerecognized as expenses at the time an employee provides the relevant service.
9.

Share-based payment
1) Performance-Based Stock Compensation Plan
The Group has introduced the Performance-Based Stock Compensation Plan as an equitysettled share-based payment plan for officers. Under the Plan, services received aremeasured at the fair value of the Company’s shares as of the grant date, and recognized as
expenses in the consolidated statement of income throughout the vesting period. A
corresponding amount is recognized as an increase of equity in the consolidated statementof financial position. The fair value of the Company’s shares as of the grant date is measured
based on observable market prices, and the expected dividends are incorporated in themeasurement of the fair value.
2) Trust-type Employee Shareholding Incentive Plan
The Group has introduced the Trust-type Employee Shareholding Incentive Plan (hereinafter
the “Plan”) as a cash-settled share-based payment plan. Under the Plan, services received
are measured at the fair value of the liabilities incurred, and recognized as expenses in the
consolidated statement of income from the grant date to the trust expiration date. A
corresponding amount is recognized as an increase of liabilities in the consolidated statementof financial position. The fair value of the liabilities is remeasured as of the end of eachperiod until settlement, and the changes in the fair value are recognized as profit or loss.

10. Revenue
Pursuant to IFRS 15, the Group recognizes revenue based on the following five-step approach:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The Group mainly engages in the sales of hams and sausages, processed food products, freshmeats and dairy products.
With respect to the sales contracts of products with customers, since control over the products
transfers to the customer and the performance obligations are satisfied as of when the products
are delivered to the customer, revenue is recognized at such time.
Revenue is determined as the amount of the consideration in the sales contract less the rebatesand discounts based on the net sales or the sales amount, and the consideration expected to berefunded to the customer is reasonably estimated and is recorded as refund liabilities.
In addition, if the Group is involved in the sales of products as an agent, revenue is recognized
as a net amount.
The consideration in a sales contract for products is primarily recovered within one year fromwhen the products are delivered to the customer. Furthermore, significant financing components
are not included.
11. Assets held for sale and discontinued operations
16

(TRANSLATION)
Non-current assets or disposal groups whose carrying amounts are recovered principally throughsale transactions rather than through continuing use are classified as held for sale. To beclassified as held for sale, the assets must be available for immediate sale in the present condition
and the sale must be highly probable. It is only if the Group’s management is committed to thesale plan and the sale is expected to be completed, in principle, within one year. Once classified
as held for sale, the non-current assets or disposal groups are measured at the lower of carrying
amounts and fair value less costs to sell and are not depreciated or amortized.
Discontinued operations include components of an entity that either has been disposed of or isclassified as held for sale. The Group recognizes them if they represent a separate major line ofGroup’s business or a geographical area of operations and there is a plan to dispose of one of
the businesses or geographical areas.
(4) Notes to revenue recognition:
1. Disaggregation of revenue
The Group disaggregates revenue from each of the three reportable segments, the “Processed
Foods Business Division,” the “Fresh Meats Business Division,” and the “Overseas Business
Division,” into the categories of “Hams and sausages,” “Processed foods,” “Fresh meats,”“Dairy products,” and “Others,” depending on the type of goods and services.
The beef business relating to Breeders & Packers Uruguay S.A. has been classified as
discontinued operations. However, the Overseas Business Division includes the beef businessthat has been classified as discontinued operations.
(millions of yen)
Eliminations,adjustments
and others

Consolidated(beforeadjustment
fordiscontinued
operations)

Transfer todiscontinued
operations

Consolidated(afteradjustment fordiscontinued
operations)

Processed
Foods
Business
Division

Fresh
Meats
Business
Division

Overseas
Business
Division

Others129,697

884

4,552

10

135,1437

135,150–

135,150

190,220

18,98428,65776

237,937(67)

237,870–

237,870

Fresh meats

31,470685,626

117,3182

834,416

2,243

836,659(9,949)826,710Dairy
products

38,8416952

138,963–38,963–38,963

Others11,801

14,29817,406

20,57564,0801,333

65,413(674)

64,739

Total

402,029

719,861

167,985

20,664

1,310,539

3,516

1,314,055(10,623)

1,303,432

Hams andsausages
Processed
foods

Total

(Note) The amount of net sales of Breeders & Packers Uruguay S.A. included in the Overseas
Business Division has been reclassified to “Transfer to discontinued operations.”
2.

Balances from contracts with customers
Balances from contracts with customers are as follows:
Contract liabilities
Refund liabilities¥7,848 million¥7,804 million

17

(TRANSLATION)
Of the opening balance of contract liabilities, the amount of those recognized as revenue for the
fiscal year ended March 31, 2024 is as follows:
Amount included in the opening balance of contract liabilities¥5,795 million

The Group receives payments from customers according to the contractual billing schedule.
Contract liabilities represent payments received prior to the performance under the contract.
Accordingly, their balances vary depending on the Group’s status of performance obligationin the contract.
The amount of income recognized in the fiscal year ended March 31, 2024 from performanceobligations satisfied in the past is not material.
(5) Notes to accounting estimates:
1. Recoverability of deferred tax assets
1) Amount recorded in the consolidated financial statements2)

2.

Deferred tax assets¥28,072 million
Other matters
Deferred tax assets are recognized to the extent that it is probable that taxable income will
be available against which the unused tax losses and deductible temporary differences canbe utilized.
In considering the probability of the taxable income, the amount is determined byreasonably estimating the timing and amount of taxable income which will be available in
the future.
The estimates may be affected by uncertain future changes in economic conditions or otherfactors. If the actual timing and amount of taxable income differ from their estimates due tounpredictable situations, they might have a material impact on the amount of deferred tax
assets in the consolidated financial statements for the fiscal year ending March 31, 2025.
In addition, the Group applies the temporary exception to the “International Tax Reform Pillar Two Model Rules (Amendments to IAS 12)” and does not recognize or disclosedeferred tax assets and deferred tax liabilities for income taxes arising from tax systems
related to the Pillar Two Model Rules issued by the Organisation for Economic Co-operation
and Development (OECD).

Impairment of non-financial assets
1) Amounts recorded in the consolidated financial statements

2)

Property, plant and equipment¥375,211 million

Right-of-use assets¥44,814 million

Intangible assets and goodwill¥25,822 million

Impairment losses¥1,369 million
Other matters
The details are the same as those provided in 7. Impairment of non-financial assets in “(3)Matters concerning accounting policies” in the consolidated financial statements.

18

(TRANSLATION)(Notes to Consolidated Statement of Financial Position)(1)

Accumulated depreciation and accumulated impairment losses
of property, plant and equipment:¥384,636 million(Notes to Consolidated Statement of Changes in Equity)(1)

Class and total number of issued shares as of March 31, 2024:
Issued shares(2)

Common stock

102,958,904 shares

Matters concerning dividends:

1) Amount of dividends paid
Resolution

Class of shares

Total amount ofdividends(millions of yen)Amount ofdividend pershare (yen)Record date

Effective dateMeeting of the Boardof Directors held on
May 10, 2023

Common stock

11,324110.00March 31, 2023

June 2, 2023

2) Dividends for which the record date is in the current fiscal year but the effective date is in thenext fiscal year
Resolution

Class of shares

Total amount ofdividends(millions of yen)Amount ofdividend pershare (yen)Record date

Effective dateMeeting of the Boardof Directors held on
May 10, 2024

Common stock

12,251119.00March 31, 2024

June 4, 2024

(Note) The total amount of dividends includes dividends on the Company’s shares held by the
Board Incentive Plan Trust of ¥15 million and dividends on the Company’s shares held by
the NH Foods Group Employee Shareholding Association Trust (the “Shareholding Trust”)
of ¥21 million.

19

(TRANSLATION)(Notes to Financial Instruments)(1)

Matters relating to the status of financial instruments:

The Group raises necessary funds primarily through bank loans and issuance of corporate bonds
based on the demand for funds for conducting business activities.
With regard to trade notes and accounts receivable, the Group controls credit risks in relation tocustomers in accordance with their credit management rules. The Group holds securities and otherfinancial instruments that are exposed to share price risk. The Group reviews all issues of such equity
investments and their holding statuses once a year on an ongoing basis.
Bank loans, etc., are used for working capital (principally short term) and capital expenditures (longterm). With regard to part of long-term bank loans, the Group fixes interest rates using interest rate
swaps to eliminate interest rate risk relating to floating-rate borrowings.
The Group uses foreign currency forward exchange contracts to mitigate foreign exchange rate risk.
The Group has a policy not to use derivatives for any purpose other than managing market risks.
(2)

Matters concerning fair values of financial instruments:

The following table shows the carrying amounts and fair values as of March 31, 2024, along with
their differences. Financial instruments measured at fair value and financial instruments whose fairvalues approximate their carrying amounts are not included in the table below.
(millions of yen)
Carrying amount
Fair value
Difference
123,048
120,208(2,840)Bonds and borrowings (*)(*) Bonds and borrowings, including current portion, are included within interest-bearing liabilities(current liabilities and non-current liabilities) in the consolidated statement of financial position.
(Note) The fair values of financial instruments are determined as follows:
1) Financial instruments measured at amortized cost(i) Cash and cash equivalents, trade and other receivables, trade and other payables, short-termbank loans
The carrying amounts of these items approximate the fair values because of their shortmaturities.
(ii)

Bonds and long-term bank loans
Bonds and long-term bank loans are measured by discounting the future cash flows topresent value at a rate that would be applied to a similar new contract.

20

(TRANSLATION)
2) Financial instruments measured at fair value(i) Investment securities
The fair values of marketable investment securities are based on quoted prices. The fairvalues of unlisted investment securities are measured by using valuation techniques, suchas the market approach and the income approach.
(ii)

Other financial assets
The fair values of foreign currency forward exchange contracts are determined by thediscounted cash flow model for the contract term using observable market data such as
forward exchange rates.

(iii) Other financial liabilities
The fair values of foreign currency forward exchange contracts and interest rate swap
agreements are determined by the discounted cash flow model for the contract term using
observable market data such as forward exchange rates and market interest rates.
(3)

Financial instruments categorized by fair value hierarchy:

The table below shows analytical results on financial instruments measured at fair value. Each levelis defined as follows. There are no financial instruments measured at fair value on a non-recurring
basis.
Level 1: Fair value measured at quoted prices in active markets
Level 2: Fair value determined, either directly or indirectly, by using observable inputs other thanLevel 1
Level 3: Fair value determined using valuation techniques based on unobservable inputs
The Group recognizes transfers between the levels of the fair value hierarchy at the date when theevent or the change in circumstances resulting in the transfer occurred.
During the fiscal year ended March 31, 2024, the Group made a transfer from Level 3 to Level 1
following the listing of an issue held by the Company. There were no other transfers.

21

(TRANSLATION)
Level 1
Financial assets
Financial assets measured at fairvalue through profit or loss
Derivative assets
Debt financial assets
Financial assets measured at fairvalue through other comprehensive
incomeEquity financial assets
Total financial assets
Financial liabilities
Financial liabilities measured atfair value through profit or loss
Derivative liabilities
Total financial liabilities

Level 2

Level 3(millions of yen)
Total

–
–

3,163
207

–
764

3,163
971

21,891
21,891

190
3,560

2,823
3,587

24,90429,038

–
–

798
798

–
–

798
798

Reconciliation for financial instruments classified as Level 3
The reconciliation from the opening balances to the closing balances of financial instruments
classified as Level 3 in fair value measurements is as follows:(millions of yen)
3,137
802
0
(51)
(10)
(100)
(191)
3,587

Balance at beginning of the year
Other comprehensive income
Purchase
Disposal
Changes due to changes in scope of consolidation
Transfer from Level 3 to Level 1
Other
Balance at end of the year

Financial assets classified as Level 3 mainly consist of unlisted shares, whose fair values aremeasured using valuation techniques based on market prices of peer companies and other methods.
Fair value measurements of unlisted shares use unobservable inputs, such as a valuation multiple.
The fair value increases (decreases) as an operating income multiple rises (declines).

22

(TRANSLATION)(Notes to Per Share Information)(1)

Total equity per share attributable to owners of the parent:(2)

Basic earnings per share:
Continuing operations
Discontinued operations¥5,138.81¥273.70¥272.70¥1.00(Note) In determining total equity per share attributable to owners of the parent and basic earnings
per share, 123,968 shares of the Company held by the Board Incentive Plan Trust and 173,500
shares of the Company held by the Shareholding Trust are accounted for as treasury stock.
Accordingly, the number of these shares is deducted in determining the weighted-average
number of shares.
Diluted earnings per share is not presented as no potential shares with dilutive effect existed.
(Other Notes)(1) Discontinued operations
Transfer of shares of Breeders & Packers Uruguay S.A.
1) Overview of discontinued operations
The Company, at the meeting of its Board of Directors held on January 31, 2023, determined totransfer all of its shares of its consolidated subsidiary, Breeders & Packers Uruguay S.A., toMinerva S.A., and completed the transfer of the shares on August 31, 2023.
As a result, the beef business related to Breeders & Packers Uruguay S.A. has been reclassified to
discontinued operations.
2) Name and nature of business of the subsidiary and the segment that included the divested
business
Name of the subsidiary
Nature of business
Applicable segment

Breeders & Packers Uruguay S.A.
Meat processing and sales (beef)Overseas Business Division

3) Number of shares sold, sale price, and percentage of ownership after the sale
Number of shares owned before the sale
Number of shares transferred
Percentage of ownership after the sale

1,797,343,133 shares(Number of voting rights: 1,797,343,133)(Percentage of voting rights held: 100.0%)
1,797,343,133 shares(Number of voting rights: 1,797,343,133)– share(Number of voting rights: –)(Percentage of voting rights held: – %)23

(TRANSLATION)
4) Profit (loss) from the discontinued operations
Details of profit (loss) from discontinued operations are as follows:(millions of yen)
Net sales
10,623Gain recognized on the measurement to fair value
1,251
less costs to sell, or disposal, of the disposal groupconstituting the discontinued operation
Other profit (loss)(11,651)
Profit before tax from the discontinued operations
223
Income tax expense(121)
Profit from discontinued operations
102(Note) Figures are given by rounding fractions of a half or more of one million yen upward and therest downward.

24

(TRANSLATION)NON-CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS(from April 1, 2023 to March 31, 2024)(millions of yen)
Shareholders’ Equity
Capital Surplus

Retained Earnings
UnappropriatedReservefor
GeneralPromotion Reserveof OpenInnovation

Net
Retained
Earnings
Forwarded

Total
Retained
Earnings

Treasury
Stock

Total
Shareholders’Equity34,721

136,513(2,057)

225,962

Cash dividends(11,324)(11,324)(11,324)

Profit21,775

21,775

21,775

CommonStock

Balance as of April 1, 2023

36,294

CapitalReserve

Other
CapitalSurplus

Total
CapitalSurplus55,212–

55,212

AppropriatedReserve forfor Legal Deferral of
Reserve Capital Gainon Property
6,041

726

25

95,000Changes during the year

Acquisition of treasury
stock
Disposal of treasury stock

0

0

(6)

(6)

660

660

Changes in items other thanshareholders’ equity
during the year–net
Total changes during the year

–

–

0

0

–

–

–

–

10,451

10,451

654

11,105

Balance as of March 31, 2024

36,29455,212

055,212

6,041

726

25

95,00045,172

146,964(1,403)

237,067

25

(TRANSLATION)(millions of yen)
Valuation and Translation Adjustments
Unrealized Gains
on OtherMarketable
Securities
Balance as of April 1, 2023

5,684

Total Valuation andTranslation
Adjustments

Total Net Assets

5,684

231,646

Changes during the year
Cash dividends(11,324)

Profit21,775Acquisition of treasury stock(6)

Disposal of treasury stock

660

Changes in items other than shareholders’equity during the year–net

2,142

2,142

2,142

Total changes during the year

2,142

2,142

13,247

Balance as of March 31, 2024

7,826

7,826

244,893(Note) Figures are given by rounding fractions of a half or more of one million yen upward and the rest downward.

26

(TRANSLATION)NOTES TO NON-CONSOLIDATED FINANCIAL STATEMENTS(Notes to Significant Accounting Policies)
1.
(1)

Basis and method of valuation of assets:
Basis and method of valuation of securities:
Shares of subsidiaries and associates:
At cost, determined by the moving-average method.
Other securities:
Securities other than shares, etc. that do not have a market price:
At fair value, determined by quoted prices at thebalance sheet date. (Unrealized gains (losses) are
reported directly in net assets. Cost of sales isdetermined by the moving-average method).
Shares, etc. that do not have a market price:
At cost, determined by the moving-average method.

(2)

Basis and method of valuation of inventories:
Merchandise and finished goods,
work-in-process andraw materials and supplies:
At cost, determined by the moving-average method(carrying amount in the balance sheet is calculatedwith consideration of write-downs due to decreased
profitability).

2.
(1)
(2)

(3)

Method of depreciation of fixed assets:
Property, plant and equipment(excluding leased assets):
Intangible assets(excluding leased assets):

Leased assets:

By the straight-line method.
By the straight-line method.
Software for internal use is amortized by the straightline method over the estimated useful life (5 to 10
years).
Leased assets related to finance lease transactions
that do not transfer ownership:
Leased assets are depreciated by the straight-line
method based on the assumption that the useful life
equals the lease term and the residual value equals
zero.
27

(TRANSLATION)
3.
Basis for accounting for allowances and accrued liabilities:(1)

Allowance for doubtful accounts:

For possible bad debt losses, allowances are provided
by taking into consideration the actual loss rate inrespect of general receivables and the individualcollectibility in respect of specific claims such asprobable non-performing receivables.

(2)

Liability for retirement benefits:

To prepare for retirement benefits for employees,
liability for retirement benefits is recorded based on
the projected benefit obligations and plan assets at theend of the fiscal year.
If plan assets to be recognized at the end of the fiscal
year exceed benefit obligations less unrecognizedactuarial differences, etc., the excess amount isrecognized as prepaid pension expenses.
Actuarial differences are amortized effective fromthe following fiscal year, using the straight-line
method for a specific period of years (13 to 15 years)
within the average remaining years of service of
employees.

4.

Basis of recognition of revenue and costs:
The Company mainly engages in the sales of hams
and sausages, processed food products, and freshmeats.
With respect to the sales contracts of products withcustomers, since control over the products transfers
to the customer and the performance obligations are
satisfied as of when the products are delivered to thecustomer, revenue is recognized at such time.

5.

Method of hedge accounting:(i)

Method of hedge accounting:
In principle, gains or losses on derivatives aredeferred until maturity of the hedged transactions.
The interest rate swaps that meet specific matching
criteria are not remeasured at fair value but thedifferential paid or received under the swap
agreements is recognized and included in interest
expenses or income.

28

(TRANSLATION)(ii)

Hedging instruments and hedged items:
Hedging instruments: Interest rate swaps
Hedged items: Interest expenses on debt

(iii)

Hedging policy:
The Company engages in interest rate swaps tomitigate exposure to interest rate fluctuations.

(iv)

Method of evaluating hedge effectiveness:
Evaluation of effectiveness is omitted for interest rate
swaps that meet specific matching criteria.

6.

Other significant fundamental matters for the preparation of non-consolidated financial
statements:
Application of the group tax sharing system:
The group tax sharing system is applied.

29

(TRANSLATION)(Notes to Revenue Recognition)
Notes are omitted because a similar description is included in the Notes to revenue recognition in
the Notes to Consolidated Financial Statements.
(Notes to Accounting Estimates)
1.
(1)

Valuation of shares of subsidiaries and associates:
Amounts recorded in the non-consolidated financial statements:
Shares of subsidiaries and associates(2)¥55,479 million

Other matters:
In the valuation of shares, etc. that do not have a market price, impairment accounting isapplied if the net asset value of the shares significantly decreases and is not expected torecover.
In considering the recoverability, it is considered whether the net asset value will recover tothe acquisition price in five years by reasonably estimating the future net asset value basedon the business plan of subsidiaries and associates and other materials.
The estimates may be affected by uncertain future changes in economic conditions or otherfactors. If the business performance of subsidiaries and associates deteriorates and is notexpected to recover in the future due to unpredictable situations, it might have a material
impact on the amount of shares of subsidiaries and associates in the non-consolidated
financial statements for the fiscal year ending March 31, 2025.

30

(TRANSLATION)
2. Valuation of loans receivable from subsidiaries and associates:(1)

Amounts recorded in the non-consolidated financial statements:
Loans receivable from subsidiaries andassociates¥272,402 million

Allowance for doubtful accounts receivablefrom subsidiaries and associates(2)¥5,483 million

Other matters:
In the valuation of loans receivable from subsidiaries and associates, allowances for doubtful
accounts receivable are individually recorded if the financial position of subsidiaries andassociates, as the borrowers, deteriorates and a material concern is likely to occur with thecollection of receivables. In determining the amount of the allowances for doubtful accounts
receivable, the recoverable amount is reasonably estimated by considering the future solvency
based on the business plan of subsidiaries and associates and other materials.
The estimates may be affected by uncertain future changes in economic conditions or otherfactors. If the business performance of subsidiaries and associates differs from the estimates
due to unpredictable situations, it might have a material impact on the amount of allowancefor doubtful accounts for loans receivable from subsidiaries and associates in the nonconsolidated financial statements for the fiscal year ending March 31, 2025.

3.
(1)

Recoverability of deferred tax assets:
Amount recorded in the non-consolidated financial statements:
Deferred tax assets(2)¥590 million

Other matters:
Deferred tax assets are recognized to the extent that it is probable that taxable income will beavailable against which the unused tax losses and deductible temporary differences can beutilized.
In considering the probability of the taxable income, the amount is determined by reasonably
estimating the timing and amount of taxable income which will be available in the future.
The estimates may be affected by uncertain future changes in economic conditions or otherfactors. If the actual timing and amount of taxable income differ from their estimates due tounpredictable situations, they might have a material impact on the amount of deferred tax
assets in the non-consolidated financial statements for the fiscal year ending March 31, 2025.

31

(TRANSLATION)
4. Impairment of fixed assets:
(1)

(2)

Amount recorded in the non-consolidated financial statements:
Property, plant and equipment¥27,774 million

Intangible assets¥21,852 million

Impairment losses¥180 million

Other matters:
If there is an indication of impairment of fixed assets, the necessity of impairment isdetermined based on the future cash flows of the assets. Units for determining the necessityof impairment are considered as minimum units which generate cash flows independently ofother assets or asset groups.
In determining the necessity of impairment, certain assumptions are set for the amount of
future cash flows, long-term growth rate and other items.
The estimates may be affected by uncertain future changes in economic conditions or otherfactors. If the condition of cash flows differs from the estimates due to unpredictablesituations, it might have a material impact on the amount of fixed assets in the nonconsolidated financial statements for the fiscal year ending March 31, 2025.

(Notes to Non-consolidated Balance Sheet)1.

Accumulated depreciation of property, plant and equipment:

2.

Guarantee obligations:(millions of yen)

Guarantee
NH Foods Australia Pty. Ltd. andthree other companies
3.

¥29,823 million

Description

Guarantee
amountGuarantee for loans,transactions, etc.

Accounts receivable from and payable to subsidiaries and associates:
Short-term monetary claims¥86,823 million

Long-term monetary claims¥141,788 million

Short-term monetary liabilities¥131,546 million

32

17,972

(TRANSLATION)(Notes to Non-consolidated Statement of Income)1.

2.

Transactions with subsidiaries and associates:
Net sales¥639,800 million

Purchases¥588,150 million

Transactions other than ordinary business¥29,591 million

Loss on sales of shares of subsidiaries and associates (extraordinary losses):
Loss on sale of shares of subsidiaries and associates in extraordinary losses is attributable tothe sale of all shares of Breeders & Packers Uruguay S.A., a consolidated subsidiary.

33

(TRANSLATION)(Notes to Non-consolidated Statement of Changes in Net Assets)(1)

Class and number of shares of treasury stock as of March 31, 2024:
Common stock

308,314 shares

The number of shares of treasury stock as of March 31, 2024 includes shares of the Company
held by the Board Incentive Plan Trust and shares of the Company held by the NH Foods
Group Employee Shareholding Association Trust.
(Breakdown of treasury stock)
The breakdown is as follows:
As of April 1, 2023

Number of shares of the Company held by the
Board Incentive Plan Trust (shares)
Number of shares of the Company held by the
NH Foods Group Employee Shareholding
Association Trust (shares)

As of March 31, 2024

131,403

123,968

313,400

173,500(Outline of the causes of the change)
Major causes:
Increase due to the purchase of shares of less than one unit
Decrease due to the sale of shares of less than one unit
Decrease due to the delivery of shares to target persons from trusts
related to the Board Incentive Plan Trust
Decrease due to disposal to the Employee Shareholding
Association(2)

1,240 shares
50 shares
7,435 shares
139,900 shares

Dividends on the Company’s shares held by the Trust included in the total amount ofdividends
Dividends on Company’s shares held by the Board
Incentive Plan Trust
Dividends on Company’s shares held by the NH Foods
Group Employee Shareholding Association Trust

34¥14 million¥34 million

(TRANSLATION)(Notes to Tax Effect Accounting)Significant components of deferred tax assets and deferred tax liabilities
Deferred tax assets
Accrued bonuses
Liability for retirement benefits
Shares of subsidiaries and associates
Allowance for doubtful accounts
Impairment losses
Loss on valuation of investment securities
Tax loss carryforwards
OthersSubtotal of deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Reserve for deferral of capital gain on property
Unrealized gains on other marketable securities
OthersTotal deferred tax liabilities
Net deferred tax assets(millions of yen)554
259
10,091
1,980
1,124
929
1,508
2,180
18,625(14,835)
3,790
(326)
(2,864)(10)(3,200)590

The Company has applied the group tax sharing system.
Accordingly, accounting treatment, disclosure of income taxes and local corporate taxes, and related
tax effect accounting are handled in accordance with the “Practical Solution on the Accounting andDisclosure Under the Group Tax Sharing System” (PITF No. 42 of August 12, 2021).

35

(TRANSLATION)(Notes to Related-Party Transactions)(millions of yen)
Category

Name

Subsidiary(Note 8)

Kanto Nippon Food, Inc.

Naka Nippon Food, Inc.

Proportion of
voting rights held
(Note 1)
100% held

100% held

RelationshipTransaction

Sales of products;
Safekeeping of funds;
Interlocking directorate

Sales of products;
Safekeeping of funds;
Interlocking directorate

Sales of products (Note 2)

Year-endbalanceAmountAccount

150,804

Accounts receivable–
trade

19,004

Deposits received fromsubsidiaries andassociates

14,616

Management of funds (Note 3)–

Receipt of dividends (Note 5)

4,680

Sales of products (Note 2)

128,839

Accounts receivable–
trade

15,920Management of funds (Note 3)–

Deposits received fromsubsidiaries andassociates

12,429Receipt of dividends (Note 5)

3,573

NH Foods marketing Ltd.

100% held

Sales of products;
Interlocking directorate

Sales of products (Note 2)

145,703

Accounts receivable–
trade

13,296

Nishi Nippon Food, Inc.

100% held

Sales of products;
Safekeeping of funds;
Interlocking directorate

Sales of products (Note 2)

96,021

Accounts receivable–
trade

12,102

Deposits received fromsubsidiaries andassociates

9,149

36

Management of funds (Note 3)–

Receipt of dividends (Note 5)

3,053

(TRANSLATION)
Category
Subsidiary(Note 8)

Name
Higashi Nippon Food,
Inc.
Japan Food Corporation

Nipponham Factory Ltd.

Nippon Clean Farm Ltd.

Proportion of
voting rights held
(Note 1)
100% held
100% held

100% held

100% held

RelationshipTransaction

AmountAccount

Year-endbalance

Sales of products;
Interlocking directorate

Sales of products (Note 2)

77,342

Accounts receivable–
trade

9,430

Purchases of products;
Financial support;
Interlocking directorate

Purchases of products (Note 2)

302,004

Accounts payable–
trade

79,476

Management of funds (Note 3)–

46,240Purchases of products (Note 2)

46,310

Short-term loans
receivable fromsubsidiaries andassociates
Accounts payable–
tradeManagement of funds (Note 3)

–

7,573

Lending of funds (Note 4)–

Management of funds (Note 3)–

Short-term loans
receivable fromsubsidiaries andassociates
Long-term loans
receivable
Short-term loans
receivable fromsubsidiaries andassociates
Long-term loans
receivable

Purchases of products;
Financial support;
Interlocking directorate

Financial support;
Interlocking directorate

Lending of funds (Note 4)37

11,0007,516

11,711
6,000

17,480(TRANSLATION)
Category

Name

Subsidiary(Note 8)

Nippon Food Packer, Inc.

Proportion of
voting rights held
(Note 1)
100% held

RelationshipTransaction

Financial support;
Interlocking directorate

Management of funds (Note 3)

Lending of funds (Note 4)

Nippon White Farm Co.,
Ltd.

100% held

Financial support;
Interlocking directorate

AmountAccount–

3,500

10,689–Lending of funds (Note 4)–

Lending of funds (Note 4)

2,800

Long-term loans
receivable

10,028

Short-term loans
receivable fromsubsidiaries andassociates

8,875

Short-term loans
receivable fromsubsidiaries andassociates
Short-term loans
receivable fromsubsidiaries andassociates

7,364

100% held

Financial support;
Interlocking directorate

NH Foods Australia Pty.
Ltd.

100% held

Financial support;
Management of funds (Note 3)
Interlocking directorate;
Debt guarantee–

Nippon Pure Food, Inc.

100% held

Financial support;
Interlocking directorate

Debt guarantees (Note 6)
Management of funds (Note 3)

16,764–

Premium Kitchen Co.,
Ltd.

100% held

Financial support;
Interlocking directorate

Management of funds (Note 3)–

Short-term loans
receivable fromsubsidiaries andassociates
Long-term loans
receivable

7,143

Management of funds (Note 3)

Nipponham Processed
Foods Ltd.

38

Short-term loans
receivable fromsubsidiaries andassociates
Long-term loans
receivable

Year-endbalance

6,000

10,6186,618

(TRANSLATION)
Category

Name

Subsidiary(Note 8)

Hoko Co., Ltd.

(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)

Proportion of
voting rights held
(Note 1)
100% held

RelationshipTransaction

Financial support;
Interlocking directorate

Lending of funds (Note 4)Year-endbalanceAmountAccount

1,500

Long-term loans
receivable

6,603

Short-term loans
receivable fromsubsidiaries andassociates
Long-term loans
receivable

6,233

Short-term loans
receivable fromsubsidiaries andassociates
Short-term loans
payable6,000

Nipponham Southwest
Ltd.

100% held

Financial support;
Interlocking directorate

Management of funds (Note 3)–

Nipponham Hokkaido
Factory Ltd.

100% held

Financial support;
Interlocking directorate

Lending of funds (Note 4)–

Nippon Logistics Center,
Inc.

100% held

Financial support;
Interlocking directorate

Management of funds (Note 3)–

Day-Lee Foods, Inc.

100% held

Borrowing of funds;
Interlocking directorate

Borrowing of funds (Note 7)Fighters Sports &Entertainment Co., Ltd.

67.1% held

Safekeeping of funds;
Financial support;
Interlocking directorate

Management of funds (Note 3)–

Lending of funds (Note 4)–

22,600

Deposits received fromsubsidiaries andassociates
Long-term loans
receivable

6,185

22,8406,236
41,367

In calculating the proportion of voting rights, voting rights that are held indirectly by the subsidiaries are included.
Prices and other terms and conditions of transactions are determined through negotiations by taking into consideration prevailing quoted prices.
The Company has introduced a Cash Management System (“CMS”) for the purpose of improving the efficiency of management of funds within the Group. Given that
it is difficult in practice to tally the transaction amount of financial transactions using CMS on a transaction-by-transaction basis, the transaction amount is not shown.
Interest rates and other terms and conditions of transactions are determined reasonably by taking into consideration market interest rates. No collateral is accepted oroffered.
Interest rates and other terms and conditions of transactions are determined reasonably by taking into consideration market interest rates. No collateral is accepted oroffered.
These are the dividends received in accordance with the dividend policy of the subsidiaries.
The Company provides debt guarantees for bank loans. Guarantee commissions are determined by taking into consideration the standard guarantee ratios of financial

39

(TRANSLATION)(Note 7)(Note 8)(Note 9)institutions, etc.
Interest rates and other terms and conditions are reasonably determined in consideration of market interest rates.
For long-term loans receivable from subsidiaries, the Company recorded an allowance for doubtful accounts totaling ¥5,483 million, and a provision of allowance for
doubtful accounts totaling ¥134 million in the fiscal year ended March 31, 2024.
The amounts of transactions do not include consumption taxes, while the year-end balances include consumption taxes (excluding short-term loans receivable fromsubsidiaries and associates, long-term loans receivable and deposits received from subsidiaries and associates).

40

(TRANSLATION)(Notes to Per Share Information)(i)

Net assets per share:(ii)

Basic earnings per share:¥2,385.70¥212.26

In determining net assets per share, basic earnings per share and diluted earnings per share, theCompany’s shares held by the Board Incentive Plan Trust and the NH Foods Group Employee
Shareholding Association Trust are accounted for as treasury stock. Accordingly, the number ofthese shares is deducted in determining the weighted-average number of shares.
Diluted earnings per share is not presented as no potential shares with dilutive effect existed.
Transactions related to the Board Incentive Plan Trust
The Company has adopted a scheme of the Board Incentive Plan Trust as the Performance-Based
Stock Compensation Plan for the Directors, etc. to further clarify the linkage between thecompensation for Directors, etc. and the Company’s business performance and shareholder value.
The trust agreement is accounted for pursuant to the “Practical Solution on Transactions ofDelivering the Company’s Own Stock to Employees etc. through Trusts” (PITF No. 30 of March
26, 2015).
(1)

Overview of transactions

Under the Plan, a scheme called the officers compensation Board Incentive Plan Trust (the “BIP
Trust”) has been adopted. The BIP Trust is a plan, as with the performance based stockcompensation (Performance Share) scheme and stock compensation with transfer restriction(Restricted Stock) scheme in Europe and America, under which the shares of the Company andthe amount of money equivalent to the proceeds from the disposal of the shares of the Company
will be delivered and paid to the Directors, etc. according to their position, achievement level ofthe performance goal, etc.
(2)

Treasury stock remaining in the BIP Trust

The Company’s shares remaining in the BIP Trust are recorded at the carrying amount in the BIP
Trust as treasury stock in net assets in the non-consolidated balance sheet. The carrying amountand the number of shares of the treasury stock were ¥581 million and 123,968 shares, respectively,
for the fiscal year ended March 31, 2024.
Trust-type Employee Shareholding Incentive Plan
(1)

Overview of transactions

Upon resolution at the Board of Directors meeting held on May 11, 2020, the Company has
adopted the “Trust-type Employee Shareholding Incentive Plan” (the “Plan”) for the purpose ofproviding incentives to employees of the Group to improve the Company’s corporate value overthe medium and long term. Under the Plan, the Company establishes the “NH Foods Group
Employee Shareholding Association Trust” (the “Shareholding Trust”) at a trust bank. The
Shareholding Trust acquires the Company’s shares in advance for an amount expected to be
41

(TRANSLATION)
acquired by the Shareholding Association over a certain period of time after the establishment.
Thereafter, the Shareholding Trust makes sales of the Company’s shares to the Shareholding
Association on a continuous basis. Upon the conclusion of the trust, if there are any accumulated
gains on sales of shares within the Shareholding Trust, such gains on sales of shares will beallocated as residual assets to employees who meet eligibility requirements as beneficiaries.
Further, since the Company guarantees loans undertaken by the Shareholding Trust to acquire
the Company’s shares, if there are any accumulated loss on sales of shares within the Shareholding
Trust due to the decline of the Company’s share price and there are any remaining loan amounts
equivalent to the loss on sales of shares as of the conclusion of the trust, the Company will repay
such loans.
(2)

Treasury stock remaining in the Shareholding Trust

The Company’s shares remaining in the Shareholding Trust are recorded at the carrying amountin the Shareholding Trust as treasury stock in net assets in the non-consolidated balance sheet. The
carrying amount and the number of shares of the treasury stock were ¥775 million and 173,500
shares, respectively, for the fiscal year ended March 31, 2024.
(3)

Carrying amount of loans recorded by the application of the gross method¥782 million for the fiscal year ended March 31, 2024
(Note)

Figures are given by rounding fractions of a half or more of one million yen upward andthe rest downward with the exception of per share amounts.

42