Creating New Values for Local Communities

2023 Annual Report
Fiscal Year Ended March 31, 2023

Annual Report2023

Creating New Values for Local Communities
Corporate Philosophy
The Valor Group has defined its philosophy, “Creation, Advance & Challenge”
in mission statements.
Shared with all the employees since 1958, they have been considered
as guiding principles in management.

Mission Statements
All the employees of the Valor Group should be aware of its social responsibilities foradvancement of local communities and culture. To fulfill them, we perform our duties sincerely;
set challenging goals in the spirit of the philosophy “Creation, Advance & Challenge”; and put
together our wisdom and power.
There is only one truth, “Pursuing prosperity is good”.
“Valor” is derived from a Late Latin word meaning ‘a person of courage’.
We believe in courage as essential to fulfill our social responsibilities.

On our way to becoming a destination company*that continues to provide new value to local communities*Destination company … a company that is chosen by society.

CONTENTS

About valor

Foundation for Value Creation

2 The Path of the Valor Group's Growth

22 Sustainability Management
24 Global Environment

Growth Strategy

26 Local Communities

4 Message from CEO

28 Diversity of Human Resources

8 Message from President

30 Corporate Governance

12 The Valor Group Business Models for Sustainable

33 Compliance and Risk Management Systems

Growth14 The Vision and Key Initiatives of the Valor Group

Financial and Corporate Data
34 11-year Summary of Financial Results

Results

36 Consolidated Balance Sheet

18

37 Consolidated Statement of Income

Segment Overview/Segment Information

20 Segment Financial Review

38 Consolidated Statements of Cash Flows
39 Consolidated Statements of Changes in Net Assets
40 Corporate Data/Shares Information

Valor Holdings Co., Ltd. Annual Report 2023

1About Valor

The Path of the Valor Group's Growth

We will create new values in response to changing social
needs by strengthening our connection with customers
leveraging Group management resources.
The Valor Group has met the diverse needs of local communities by rolling out multi-format retailing which
comprises supermarkets, drugstores and home improvement centers, while maintaining business models that
optimize the entire process from sourcing to retailing. We will achieve medium- & long-term growth by making atransition to a more competitive format and strengthening our connection with customers.
Our vision in the face of significant social and environmental changes
With the progressive lifting of various restrictions related to the COVID-19 pandemic and the reclassification of COVID-19 underthe Infectious Diseases Law to Category 5 in May 2023, marking a significant milestone after more than three years of extraordinary coronavirus policies, expectations of a rise in employee compensation are increasing as movements towards normalization of social and economic activities accelerate. Meanwhile, the rise in consumer consciousness towards life preservation due
to inflation, along with increases in raw material and labor costs, signify that social and environmental changes are drastic. In
fulfilling our unchanging social mission of providing necessities for daily life, we aim to be selected as a Destination Company
within society amidst these changes.
Looking towards 2030, we have established our medium-term management policies, “Valor Group Vision 2030” and“Sustainability Vision 2030.” With the attitude of “Creation, Advance & Challenge” as stated in our corporate philosophy, we arecommitted to achieving sustainable growth and realizing a sustainable society.

Revenues Growth(Revenues from operations)Supermarket BusinessSports Club Business

Drugstore BusinessDistribution-related operations

Home Improvement Center Business

Others1959 1960 61

62

63

64

65

66

67

68

69 1970 71

72

1958- Startup of Supermarket andRelated Businesses of Manufacturing,
Wholesale & Logistics
In 1958, we established Shufu-no-Mise Co., Ltd.
(changed the company name to Valor Co., Ltd. in1974) and opened the first supermarket in Ena-shi,
Gifu. We subsequently established Chubu YakuhinCo., Ltd., a drugstore subsidiary, and Chubu Foods
Co., Ltd., a prepared food manufacturing subsidiary, and started a materials wholesale businessthrough Chubu Ryutu Co., Ltd. We entered into thelogistics business through Chubu Kosan Co., Ltd.,a logistics subsidiary, and in 1989, established thefirst distribution center in Tajimi-shi, Gifu.

Changing Objectives of Capital andBusiness Partnerships
In the past, we executed M&As centering on the supermarket businessto expand the size and scope of our business. Since 2015, we haveacquired food manufactures with unique products and have concluded
capital and business partnerships that lead not only to product sourcing
and development improvements, but also to comprehensive approaches.

2

Valor Holdings Co., Ltd. Annual Report 2023

73

74

75

76

77

78

79 1980 81

82

83

84

85

86

87

1995- Rolling out of Multi-format Retailing andEstablishment of Distribution Network

While expanding the scale of our
supermarket business, we solidified
our foundations for multi-format
retailing. We merged with Fujiya Co.,
Ltd., a home improvement centerc o m p a n y, a n d t h e n est ab lished
AXTOS Co., Ltd. and spun off as p o r t s c l u b b u s i n e s s . We a l s oestablished a distribution network in
H o k u r i k u re g i o n i n re s p o n s e t oexpanding business areas.

Pursuit of Economies of Scales 1995

88

89

About valor

FY2021

Exceeded700

billion yen(Revenues fromoperation)

7,000

FY2020Exceeded600

billion yen
6,000

FY2017
Exceeded500

billion yen
5,000

FY2012
Exceeded400

billion yen
4,000

FY2008
Exceeded300

billion yen
3,000

FY2005
Exceeded200

billion yen
2,000

FY2000Exceeded100

billion yen
1,000

1990 91

92

93

94

95

96

97

98

99 2000 01

02

03

04

05

06

2005- Expansion of Supermarket Business

and Challenge to Integrate Business
Processes
In the supermarket business, we
expanded our scale through organic
growth and M&As. The major companies
acquired are as follows: Tachiya Co.,
Ltd., Youth Co., Ltd. and Sun-FriendCo., Ltd.(currently Shokusenkan-Taiyo
Co., Ltd.). We also integrated the entire
process from sourcing to retailing via
our manufacturing and wholesale
subsidiaries, and developed production
bases and distribution centers.

07

08

09 2010 11

12

13

14

15

16

17

18

19 2020 21

22

23

(FY)

2015- Business Process Integration and
Growth Gained from Multi-format
Group Management

In October 2015, we made a transition to a holding company to promote
the growth of business companies
and improve corporate governance.
We took the next step for growth byintegrating home center businesses
as of April 1, 2019 through a shareexchange agreement between
Alleanza Holdings Co., Ltd. andHome Center Valor Co., Ltd.

Expansion of Operational Areas 2005
Increase in Market Share 2005
Enhancement of Product Appeal/
Evolution of Business Models

2015

Valor Holdings Co., Ltd. Annual Report 2023

3

Growth Strategy

Message from CEO

Masami Tashiro
Chairperson & CEO

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Valor Holdings Co., Ltd. Annual Report 2023

Changes and Future Prospects in the Valor Group's
Business Environment
In recent years, the social situation has shown atendency towards prolonged crises, following the
COVID-19 pandemic and then the Ukraine crisis,
leading to soaring prices for raw materials ande n e r g y, a s w e l l a s p r i c e i n c re a s e s d u e t o t h e
weakening yen and inflation. These circumstances
have had a significant impact on the retail industry,where our group operates. However, upon closer
examination of changes in the business environment,
it is evident that trends such as the ongoing aging
population and declining labor force, depopulation inrural areas, expansion of e-commerce, and intensifiedcompetition beyond traditional industry boundaries,
w h i c h h a d b e e n p ro g re s s i n g f ro m b e f o re , a reaccelerating and becoming more significant andcontinuous factors.
To overcome these changes in the business environment,
companies that have streamlined their operations andenhanced the value-added aspect of their products
and services, thereby evolving their business models,
are surviving, while those that have not are being left
behind. This "polarization" is believed to beadvancing in the retail industry following the COVID19 pandemic.
Within this context, our group has been focusing ontransforming our main supermarket business into
“destination stores” that attract customers based on
our unique product and category offerings. This effort
began about seven years ago. By leveraging ourstrengths in fresh foods while evolving our categories,
our supermarket business has been able to attract
customers from beyond our immediate market area.
Moreover, starting two years ago, we also began
opening specialty stores in urban areas that focus on
fresh foods and delicatessen (prepared dishes),achieving success in competition with businesses indifferent sectors.

Grow th S trateg y

Shaping the Future through Evolving Business
Models and People Development Initiatives
with a Long-term View
Simultaneously, the drugstore and home improvement
center businesses, which support our group’s
diversification strategy, have built up their strengths
by leveraging scale advantages in selling groceries
and daily necessities, as well as group synergies
through private brand (PB) products. Alongside thes u p e r m a r k e t b u s i n e s s , w e c re a t e a d o m i n a n t
presence, with each business model offering theconvenience that customers seek, thereby
encompassing the lifestyle needs within thecommunity. Together with the supermarket business,they establish a dominant presence, offering theconvenience that customers seek through eachbusiness format, thereby encompassing the lifestyleneeds within the community.
The drugstore business contributes to the health ofthe local community through initiatives such as
in co r po r at in g dis pen s in g ph ar macies , o ffering
medicine delivery services, and collaborating with thegroup’s sports club business and health food sales,
providing value in a manner that responds to changes
in social structure and lifestyles. It has also received
collaboration offers from the local governments. The
home center business is driving a growth strategy
centered on private brands (PB), enhancing productand store capabilities. After acquiring Alleanza
Holdings Co., Ltd. as a subsidiary in 2019, it hascompleted system integration, aiming to further
streamline operations and accelerate the joint
development of PB products.
We will continue to evolve our diversified businessformats in this way, responding to changes in thebusiness environment surrounding the retail industry.
Beyond the confines of our stores, we aim to realize a"Valor Economic Zone" that encompasses the entire
community.

Shaping our business portfolio for the future: A medium to long-term strategy
Currently, our group’s business portfolio is dominated

Valor Holdings Co., Ltd. Annual Report 2023

5

Growth Strategy

Message from CEO

by the supermarket business, which accounts forabout 55% of sales revenue and more than 60% of
operating profit. The combined sales revenue of thedrugstore and home improvement center businesses
hovers around 37%, and we plan to accelerate
growth and expansion in both areas in the future.
However, in the medium to long term, further growthis expected in the supermarket business as well, so
the composition ratio in the business portfolio is notexpected to change significantly. The sports clubbusiness has faced challenges recently due to theimpact of the COVID-19 pandemic and rising energy
costs, but it is showing signs of improvement. We willcontinue our efforts to expand the range of value
provided within the “Valor Economic Zone.”
Despite the impact of approximately ¥50 billion due
to changes in revenue recognition standards, fiscal
y e a r 2022’s ( F Y23’s ) s a l e s re v e n u e i n c re a s e d ,reaching nearly ¥760 billion. For the current fiscal
year (FY24), we are planning for sales revenue of¥772 b i l l i o n , b r i n g i n g u s w i t h i n ¥200 b i l l i o n o freaching the medium- to long-term quantitative targetof over ¥1 trillion in sales revenue by fiscal year 2029
(FY30). We are now setting our sights on achieving
levels beyond this target.
S p e c i f i c a l l y, w e a i m t o i n c re a s e t h e o p e r a t i n grevenues of the supermarket business from this fiscal
year's plan of ¥427.5 billion to ¥500 billion within two
years. For the drugstore and home improvement
center businesses, the plan is to double theiroperating revenues over approximately five years. In
addition to these, we expect growth in the “non-store
business,” which combines the BtoB business selling
products to corporations and municipalities, the EC(e-commerce) business, and the PB (private brand)business. We are also optimistic about the expansionof the credit card business, which we entered thisfiscal year, as well as growth in the distributionrelated businesses and other group businesses.
As a medium-to long-term direction, the supermarket
business, with the progression of depopulation inrural areas, is facing difficulties in expanding throughthe opening of suburban stores. Therefore, we aim togrow by opening fresh food supermarkets in urban
areas. The subsidiarization of Yaosen Co., Ltd. and
Yamata Co., Ltd. in the fiscal year 2021 is part of thisinitiative, expanding in the Nagoya and Osaka areas.
Following this, we will build a system that includes
business acquisitions to develop urban-type stores in
the Tokyo area, leveraging our strengths in fresh

6

Valor Holdings Co., Ltd. Annual Report 2023

produce.
The drugstore business has leveraged its strength up
to now through the incorporation of dispensing
p h a r m a c i e s . H o w e v e r, i n re c e n t y e a r s , f u r t h e r
success has been achieved by attracting clinics
within store premises, thereby seamlessly
incorporating both community and healthcare needs.
Expanding this new format as a fresh growth driver,
we will also push forward with the shift from suburban
to urban areas.
The home improvement center business currently has
a presence primarily in the Tohoku and Tokai regions,a s w e l l a s t h e C h u g o k u a n d S h i k o k u re g i o n s .
Therefore, it is necessary to expand operations to fill
the gap between these areas. We aim to differentiate
ourselves from other home improvement centers andachieve nationwide expansion as a recognized brand.

The talents we seek
and their professional development
In the fiscal year 2023, our group welcomed 607 newgraduate employees across 18 companies, anincrease of 92 compared to the previous year. The
human resources strategy of our group focuses on
the recruitment and development of permanente m p l o y e e s , s e e k i n g i n d i v i d u a l s w i t h a s t ro n gorientation towards growth and a willingness tochallenge, who can share the corporate philosophy of“Creation, Advance & Challenge” as members of thegroup. By building and operating an effective humanresource development system, we promote thesuccess and growth of each employee. Since each
employee is human capital contributing to theenhancement of corporate and social value, we
actively invest in them.
I n 2019, w e e s t a b l i s h e d t h e H u m a n R e s o u rc e
Development Center "Don Yo Sha," equipped withfacilities and systems to conduct hierarchical andbusiness-specific training, technical training forenhancing front-line capability, and management
training. As a company committed to "developing
people," this center will be utilized across the entire
group.
In particular, for the development of talents who will
shape the future of our group, we conduct “Executive
Management Training” for the management layer andAnother focus for us as a company dedicated to“developing people” is supporting the success ofdiverse talents and providing a work environment thatis easy to work in. We have introduced systems for
p ro m o t i n g t h e a c t i v e p a r t i c i p a t i o n o f w o m e n ,employing persons with disabilities, and re-employing
retirees, aiming to expand diversity. Furthermore, we

are working towards creating workplaces where
employees can work flexibly in response to changes
in their life stages and thrive without constraints.
Additionally, our group places a high emphasis on
employees’ experience working in stores, and in our
16 core business companies, we have introduced a“employee promotion system” that opens the door forpart-timers working in stores to become full-time
employees. The experience of directly interacting withcustomers and delivering products and services instore operations is the origin of our value proposition.
Through communication with customers, employees
have the opportunity to reaffirm their mission. By
sharing and valuing this understanding across allgroup employees, we will continue to exist as acompany that is wanted by society.

Grow th S trateg y“Next-Generation Executive Management Training”
for the middle layer, striving to acquire skills requiredby leaders. Simultaneously, we are implementing
initiatives that enable these potential leaders toenhance their experience in various ways, including
personnel rotations within the group. Our group hasgrown through lear ning from the cultures ofcompanies with their own histories, following many
mergers and acquisitions, and business transfers. We
expect our leadership candidates to play a role incontributing to mutual understanding ands tre n gt he ning c o lla b o ra t i o n b e t w e e n b u s i n es scompanies through personnel rotations within theg ro u p , w h i l e b ro a d e n i n g t h e i r k n o w l e d g e a n denhancing their skills.

To all our stakeholders, we ask for your continued
attention to the Valor Group's challenge of becoming
a destination company and request your further
support in this endeavor.

Valor Holdings Co., Ltd. Annual Report 2023

7

Growth Strategy

Message from President

Takayuki Koike
President and Director

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Valor Holdings Co., Ltd. Annual Report 2023

Steadily Executing Our Medium-term Management
Plan Leads to the Next Stage of Growth

Since August 2022, I have served as the acting
President and Director, and as of June 29, 2023, I
have been formally appointed as the President andDirector. I am determined to continue working with all
my might towards the further development of ourgroup's business.
Over the past year, I have repeatedly engaged incommunication both internally and externally toleverage my own insights on how to grow and evolve
the Valor Group, and have been organizing ourmanagement policies accordingly.
Throughout its 65-year history since its establishment,
our group has developed alongside our stakeholders
by consistently practicing the corporate philosophy of“Creation, Advance & Challenge,” as our predecessors
accumulated achievements. As a manager inheriting
this legacy, I will return to these origins while steering
the company from a generalist perspective in pursuit of
future “Creation, Advance & Challenge.”
Currently, each of our business companies is progressing
well and growing, but we aim to aggressively movetowards an even higher level of growth in the future. In
doing so, the presence of the holding company itself is
crucial. We will step forward from a passive role ofsupporting business companies from behind to actively
leading towards group optimization in terms of humanresources, finance, and procurement. By identifying the
growth challenges and medium-to long-term potential ofeach company, we intend to create a stronger profit
model from the perspective of whether we can scale up
in the future.

28th consecutive increase in operating revenues,
reaching a new record high.
Our group has established a medium- to long-term
management policy, “Valor Group Vision 2030” andGrow th S trateg yTransforming into a holding company
that leads the growth of the group“Sustainability Vision 2030,” aimed for the fiscal year
2029 (FY30), and has been promoting the three-yearbusiness plan since the fiscal year 2021 (FY22)
towards its realization.
Reflecting on the second year of the plan in fiscal 2022
(FY23), the business environment saw a gradualeasing of the impacts from the COVID-19 pandemic,
with recovery in people’s movements and consumer
behaviors, marking a year of significant shifts in the
distribution industry. However, on the other hand, theworsening cost environment continued, including thesoaring prices of raw materials and energy, theprogression of the yen's depreciation, and the rise inlogistics and labor costs, leading to an uncertain andchallenging management environment.
Amid an ongoing trend of inflation and rising prices,
our group is striving to form prices that are rational
and perceived as fair, while focusing on reducing
indirect costs, which constitute a significant portion ofprices, and moving forward with responses that do
not rely on easy price increases. Since fiscal 2022
(FY23), we have been gradually launching front
centers and infrastructure facilities to improvelogistics and operational efficiency, as well as
expanding the area of joint distribution. In May 2022,
we launched a beverage front center; in February
2023, an instant noodle front center; and in May ofthe same year, a rice joint distribution center.
Additionally, in April of the same year, we acquired
Showa Film Co., Ltd., a packaging material company,
securing the product packaging value chain within
the group.
The consolidated performance for fiscal 2022 (FY23)
saw operating revenues reach ¥759.9 billion, updating
the record for the 28th consecutive term of revenue
increase, yet profit fell below the initial plan anddecreased. The increase in selling, general, andadministrative expenses (SG&A), primarily utility costs,
led to a delayed response in the first half of the year,
but a recovery in profits was seen in the second half.
This term also recorded an increase in impairment
losses as special losses. Going forward, as a holding

Valor Holdings Co., Ltd. Annual Report 2023

9

Growth Strategy

Message from President

c o m p a n y, w e w i l l t a k e p ro a c t i v e m e a s u re s t ounderstand and assess the impairment risks of eachbusiness company and respond appropriately.

Entered the credit card business to expand“Valor Economic Zone”

The supermarket business, by the transitioning towards“destination stores” that attract customers with more
attractive product and category arrangements, and theopening of urban-style fresh food and deli specialty
stores, has been successful, creating winning patterns.
Subsidiaries acquired in fiscal year 2021 (FY22),
Ya o s a n C o . , L t d . a n d Ya m a t a C o . , L t d . , h a v e
c o n t r i b u t e d t o g ro u p g ro w t h b o t h i n t e r m s o f
performance and procurement including sales knowhow. However, in fiscal year 2022 (FY23), existing
store sales remained flat compared to the previous
year due to a decrease in demand from stay-at-homemeasures and an increase in utility costs, resulting inincreased revenue but decreased profits for thisbusiness. The next step for Destination Stores will be
to target the Kansai area, reviewing store formats tosuit regional characteristics and proceeding with store
openings.

Starting from the fiscal year 2023 (FY24), our grouphas embarked on a new business venture by issuingthe “Lu Vit credit card,” with recruitment commencing
from April 2023.

The drugstore business has been able to demonstrate
the most presence amid the changes brought about
by the COVID-19 pandemic, effectively catering to awide range of needs. In fiscal year 2022 (FY23), we
continued the trend of revenue growth due to thesuccess of our store opening strategy and the strong
performance of the dispensing department.
Additionally, we achieved significant profit recovery by
improving cost efficiency and reducing sales expenses
through the digitization of sales promotion methods.
We will continue to advance the incorporation ofdispensing pharmacies into our stores and meet avariety of community needs through medical
collaboration with clinics attracted to our store
buildings.
The home improvement center business currently
operates three brands, “Daiyu Eight,” “Time,” and“Home Center Valor,” following the integration with
Alleanza Holdings Co., Ltd. Efforts are underway torealize the effects of this integration by enhancing
systems and personnel and organizational structures.
In fiscal year 2022 (FY23), although existing store sales
remained flat, increased revenue was achieved due tothe strong performance of the EC business, but profits
fell below the previous year. We will pursue a growthstrategy centered around private brand (PB) products,
enhance product appeal and store capabilities, anddifferentiate ourselves from other home centers tosecure profitability.

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Valor Holdings Co., Ltd. Annual Report 2023

The entry into the credit card business has been led by
Valor Financial Services, established in December
2021. This company, as the issuer of the card, hasreceived expertise and human resources support incredit card operations from Juroku Financial Group.
Additionally, various administrative and processing
tasks are outsourced to JCB Corporation. With thesearrangements, the “Lu Vit credit card” will enhancecustomer convenience as a JCB-branded credit card
equipped with contactless payment functionality,
operated under a robust operational framework.
Over the years, our group has been offering the “Lu Vit
Card” as a prepaid point card shared across thegroup, and by the end of March 2023, we haveacquired 4.15 million card members and 740,000 app
registered members. With the increasing adoption of
cashless payments in recent years, the burden oftransaction fees has significantly increased. Therefore,
we have taken steps to address this by introducing ourown credit card solution. At the same time, as part ofour vision for the “Valor Economic Zone,” we aim tocreate a foundation by leveraging the synergy among
our group businesses operating in various regions tomeet diverse lifestyle needs. We seek to capture
customer needs, particularly in cashless payment
usage data, with higher accuracy and validate
hypotheses to drive our vision forward.
We aim to expand the issuance of our credit card byswitching from "Lu Vit prepaid point cards' andacquiring new customers who sign up for it in the
future. We are aware of the high hurdles due toentering the market late, but we will utilize theadvantage of having physical stores to facilitate
widespread adoption.

Leveraging the strengths of group management todemonstrate adaptability to change
The three-year business plan has made steadyprogress and achieved success in the growth themesof “Strengthening the Main Business” and “Diversified

Operation Management” over the past two years.

In “Diversified Operation Management,” we haves o l i d l y b u i l t a c h i e v e m e n t s i n n o n - s t o re s a l e s
operations, such as the online supermarket “ainoma,”collaboration with Amazon, and the e-commerce
department of our home center. We have also madeprogress in sustainability activities focused on the foodloss issue, in collaboration with local governments,and have been accumulating insights into market
needs. We will continue to encompass the increasing
complexity of the market with the collective strength of
our group, including launching credit card operations
and utilizing digital transformation (DX).

Grow th S trateg y

In “Strengthening the Main Business”, as previously
mentioned, we have realized tangible achievements
through the transformation of the supermarket
business into destination stores, creating synergistic
effects in the home improvement center business, andstrengthening the management foundation of thedrugstore business, overall manifesting the strength of
our front-line operations.

situation has changed significantly from the time ofplanning due to the prolonged effects of the COVID-19
pandemic and worsening cost environment. There is aneed to revise our target settings, and as a result, thetarget figures for the final fiscal year of the plan (FY24)
have been downwardly revised to “operating revenuesof ¥772 billion,” “operating income of ¥20.5 billion,”and “ordinary income of ¥23.3 billion.”
In an environment of increasing uncertainty, I believe thatthe strength of a company is demonstrated not so muchby its ability to plan as by its adaptability to change. Ourgroup management may be more difficult to understandcompared to single-business companies, but we see
having a business portfolio that compensates for the ups
and downs of business conditions through multiple
operations as an advantage suited to the times. Moving
forward, we will leverage this advantage to actively takeon challenges and adapt to changes, realizing the longterm vision we aim for and responding to the demands ofsociety.
We kindly request your continued understanding andfurther support for our group’s business activities.

On the other hand, regarding qualitative aspects, theValor Holdings Co., Ltd. Annual Report 2023

11

Growth Strategy

The Valor Group Business Models for Sustainable Growth

The Valor Group Business Models
Social Issues
Imbalance between Food Supply and
DemandChanges in Labor Market• Aging and decline in workforce• Changing labor-related policies• Labor shortage and increasing labor costs

Strengthening connections
with customers• Intense competition between formats• Aging and lack of successors in regional agriculture• Possible impact of trade policies on local suppliersStoresSupermarket

Connections withcustomers

Drugstore
Home Improvement Center
Pet ShopSports Club

Accelerating Change in Consumer &Retail Market

Changing Global Environment• Impact of global warming and climatechanges on supply of produces

Business Process Integration• Aging and declining population• Impact of IT innovation on shopping behavior• Decreasing local suppliers serving local communities

Procurement& Production
Wholesale
Distribution

Creation ofGroup
Synergies

Maintenance

Rise in oil prices• Rising energy cost
• Coexisting with COVID• Rising food prices

Sus

Solutions

Valor Group Vision2030
Our aim is to build a “Valor Economic Zone” thatconnects local communities conveniently andprosperously with the Valor Group’s products,
services, and payments and become a “destinationcompany,” that is chosen through the appeal of
products. To realize this goal, we will strengthen ourconnections with customers and evolve our businessmodel as a manufacturing and retailing company.

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Valor Holdings Co., Ltd. Annual Report 2023

Connections with products
Valor Group’s product appeal
In creating a “destination store” that offers seasonal foods and gives
customers a purpose to shop, we will connect with customers throughappealing products that are only available from the Valor Group by utilizing
the Group’s manufacturing capabilities.

Business Process Integration
Together with enhancing the product development and manufacturing
capabilities, and productivity of each manufacturing company that makes
up the Group, we will coordinate
supply chain information throughdigital transformation (DX) and workto accommodate the expansion of
procurement and manufacturingbases as well as inter-company
collaboration.

Local Communities
EC

Lu Vit Card

Valor GroupLu Vit App

Valor Group’s product appeal

Digital transformation (DX)Lu Vit Credit
Card• ainoma• Store-based
wholesale business• Other non-store
sales (mobile sales,
others)• Amazon• EC Mall• FIRST, PROsite

Grow th S trateg y

Lu VitSolutions

Connect 2030
Connecting products, customers,
and society

Information
linkagetainability management

Connections with customers

Management that is conscious ofties with society

Strengthening connections with customers

Strengthening Group governance

Going beyond just our connections with customers that had been
primarily gained through stores, we will work to strengthen new
relationships that address the diversifying lifestyles of people by utilizing
e-commerce (EC) and the Lu Vit Card and app. In regions with lessdeveloped EC infrastructure, we will promote “the Company as adominant force in EC” by using our own management resources, and inlarge areas where EC infrastructure is more mature, we will promote“wide-area collaborative EC” by working with our partners.

We will further promote the Group’s growth potential by ensuringtransparency and strengthening functions of the Board of Directors, aswell as by enhancing the governance of Group management.

Connections with local communities as a particular
to be strengthened
We will use the Group’s management resources to strengthen ties withlocal communities while striving to resolve local issues.

Promoting activities of all Group employees
By promoting activities of all Group employees, we consider the “global
environment,” “local communities,” and “diversity of human resources” tobe key initiatives, to which we will
endeavor to find solutions whilestrengthening ties to the local
Energy and Water Food Loss
Recycling
community. We will implement“Global environment,” “Local communities,” andproblem-solving programs in six“Diversity of human resources”
subcommittees, namely, Energy
and Water, Food Loss, Recycling,
Local Communities, Shopping
Local
Shopping
Human Resource
Communities
IssuesActivities
Issues, and Human Resource
Activities.

Valor Holdings Co., Ltd. Annual Report 2023

13

Growth Strategy

The Vision and Key Initiatives of the Valor Group

Under our three-year business plan, we are advancing the transformation into a “destination store” that features products andcategories that serve as reasons for visits. Simultaneously, we have set “Connect 2023” as our strategic goal to connect
products, customers, and society. We aim to deepen and broaden our engagement with customers not only through physicalstores but also via our e-commerce platform, our own electronic money LuVit, and our credit card. By leveraging ourmanagement resources, we will evolve our business model to realize a sustainable society and aim for corporate growth.

“Valor Economic Zone” concept

Vison for2030

Connect local communities conveniently and prosperouslywith the Valor Group’s product, services, and payments.

“Destination Company” concept
To be a company chosen through product appeal

Key Initiatives
Supermarket BusinessTo expand our market and encourage customer visits, we will proceed with the transition to a newformat, “Destination Store” (D·S), focusing on enhancing fresh food products to improve
purposeful visitation.
As part of the strategy for the Supermarket (SM) Group, we will focus on opening suburban
Destination Stores and urban specialty (product-specific) stores as our core, and strengthen
strategic collaboration among each SM business company.
We will also expand the infrastructure functions supporting the destination transformation of all
departments, focusing on fresh food (vegetables and fruits, seafood, and meat) departments,
along with deli, bakery, grocery, and confectionery.

Drugstore BusinessAs a “community-based health station,” we will pursue the expertise and convenience ofDrugstores (DgS). Following the COVID-19 pandemic, the role of DgS has evolved, with anincreased demand for their function of stocking hygiene products and medicines. Furthermore, byoffering food and general merchandise, DgS has transformed into a format that allows for onestop shopping and meets the demand for savings amidst rising prices.
We will promote store openings utilizing the group's infrastructure and, in terms of merchandise
policy, strengthen the health and beauty, and dispensing sections. The proportion of private
brands (PB) will be expanded to 15% in the medium term.

Home Improvement Center BusinessToward our long-term vision of “Challenge 3000” (operating revenues of 300 billion yen and an
ordinary income margin of 5.0%), we will grow our product and store strengths based on new
store openings and M&A, centered on private brands (PB).
Through the opening of professional shops dealing with materials and work clothes, and specialty
stores with a high degree of specialization such as bicycles, we will create destination stores.
We will expand our pet store business tailored to areas and market zones, aiming to become theNo. 1 pet store industry leader.
The composition ratio of PB products is set as an immediate target at 20%, and we are advancing
development primarily in categories where the assortment of national brands is limited, such as
gardening, interior, storage goods, and work clothes.

Sports Club BusinessWe aim for early profit normalization through the enhancement of specialization, including swimming schools and similar initiatives.

Distribution-related BusinessWe will continue further investment in our strength, the logistics infrastructure.
We will vertically integrate design and packaging functions to further promote SPA (Specialty Store
Retailer of Private Label Apparel) transformation.

14

Valor Holdings Co., Ltd. Annual Report 2023

Key Initiative ①Supermarket Business

Destination Store (D·S) Strategy

Evaluation of DS Effects(Comparison of Fresh Food Department Composition Ratios)

Currently, out of approximately 240 stores of Valor Co., Ltd., 70 are
D·S stores, which have a higher composition of fresh food sales
compared to the other stores. By valuing “seasonality” in the fresh
food department, we can also develop sales floors to show seasonal
products vividly in the grocery sections, working together as twowheels of a car.
For stores with relatively small sales scale, we have also started thedevelopment of “Neo D·S” stores, which utilize infrastructure such asprocessing centers to improve operations.

Grow th S trateg y

In the domestic market, which continues to experience population
decline, it is necessary to transition to stores with strong purposefulvisitation. To achieve this, we are working on transforming into
“Destination Stores” (D·S) by enhancing categories such as the fresh
food department through renovations of existing stores and new store
openings.

■Livestock Products ■Seafood ■Vegetables ■Fruits

52.1%
6.0%
14.5%
12.4%

39.8%
5.2%
10.4%
9.9%

19.2%

a DS store(Takatsuji)

14.3%

Averageacross all stores

SM Group Strategy
In the Valor Group’s medium- to long-term goal of achieving “operating
revenue of 1 trillion yen,” we aim to achieve 500 billion yen within the
SM segment. By improving not only scale but also profitability, we canenhance employee compensation and enable continuous investment.
Aiming for group sales of 50 billion yen in the Kansai area, our strengthlies in being able to open stores suited to the location and market,
such as “Yaosen” and “Takoichi,” whose company name is Yamata, indensely populated areas like in front of stations and shopping districts,
and “Valor” in suburban areas. Additionally, within the group, we haveSMs based in the Kanto region like “Terao Shokuhin” in Chiba
prefecture and “Kohseiya” in Yamanashi prefecture, so we are also
considering growth strategies through expansion into the Kanto areain the future.

Infrastructure functions supporting thedestination transformation of all departments
The function of the Processing Centers (PC) supports the highpurposeful visitation due to the enrichment of fresh food products at
D·S. We manufacture products for the livestock, seafood, andagricultural departments, reinforcing our own logistics network. With
four PCs located in Toyama prefecture (Hokuriku PC), Shizuoka
prefecture (Shizuoka PC), and Gifu prefecture (Kani PC and Ogaki PC)
at the core, we not only support labor-saving efforts in stores but also
handle the development of competitive hit products at stores, such as
the “Yakiniku Meal with Rare Cuts of Meat,” for sale.
We continuously carry out capital investments, supplying products to
the group's drugstores and ingredients to local school lunch centers,
thereby promoting business growth.

Valor Holdings Co., Ltd. Annual Report 2023

15

Growth Strategy

The Vision and Key Initiatives of the Valor GroupKey Initiative ② Drugstore Business

Enhancing customer satisfaction throughstrengthening the healthcare department, beauty(cosmetics) department, and private brands (PB)
A customer satisfaction survey for monthly merchandising
was conducted in February, May, and August 2022 across
41 companies and 532 stores.
Vdrug had 15 stores under evaluation and impressively
ranked 3rd in the “Company Ranking” among 41 companies nationwide based on the average score.

Expansion of dispensing facilities and doctor
recruitment in dominant regions
We are advancing responses inline with the times, such asincorporating dispensing pharmacies into our drugstores andonline medical consultations, inaccordance with the easing ofrestrictions and the progress ofthe novel coronavirus.

Key Initiative ③ Home Improvement Business

16

Enhancing product strength

Differentiation Strategy

Increasing the sales composition ratio of private
brand (PB) products to 18%

Pet store business as a strength not found in other
HC (Home Center) companies

The sales composition ratio of private brand (PB) products
for the fiscal year ending in February 2023 was 13.2%(including Daiyu Eight, Time, and Home Center Valor), but
we aim to reach 18%. To achieve this, we will enhance single-item sales capabilities and review standard shelf allocations to promote sales, aiming to improve the gross profit
margin.

As a challenge to become number one in pet shop sales
share in Japan, we will utilize the know-how of operating
three different types of pet shops - Amigo, PET FOREST,
and JOKER, each with its own scale and strengths - to promote nationwide expansion.

Valor Holdings Co., Ltd. Annual Report 2023

Key Initiative ④ Sports Club Business

Expansion of junior swimming schools

AXTOS has increased the number of clubs introducing
physical ability improvement academies from 16 to 29, in
response to the decline in children’s physical fitness.
Through continuous focus on children’s school activities,
AXTOS contributes to fostering exercise habits in the community.
To lay the foundation for children to lead healthy lives
and achieve prosperous growth in the future, AXTOS willcontinue to actively strengthen its school business.

Key Initiative ⑤ Distribution-related Business

Key Initiative ⑥ EC Business

Efficiency improvement through the establishmentof front centers

Expansion of the online supermarket business inthe Kansai region

Since May 2022, we have launched a front center for beverages, and from February 2023, for instant noodles.
By storing and managing the inventory of manufacturers
and wholesale warehouses, and combining the delivery of
beverages and instant noodles, we have achieved efficientdelivery while avoiding overloading.

In the “ainoma” business of V Solution, which handles thedelivery service of fresh food and other items, we have formed
a business alliance with Shokubun Co., Ltd., which has alogistics network in the Kansai region, thereby expanding ouronline supermarket business in the Kansai area as well.

Valor Holdings Co., Ltd. Annual Report 2023

Grow th S trateg y

In recent years, the decline in children’s physical fitness has
become a serious social issue. To address this challenge,
our company has proactively introduced junior swimming
instruction to clubs that had not previously offered it.
Through the additional introduction across 6 clubs, wehave made contributions to the local community. This initiative has been recognized by municipalities, leading torequests for swimming instruction. In response, we havestrengthened our support system and are providing assistance in promoting health within the community.
Furthermore, we have secured a business transfer from
Hoshi-no-ko Swimming School (Kyoto prefecture), incorporating lessons learned from other companies while steadily
expanding our operations.

Expansion of physical ability improvement
academies for continuous support17

Results

Segment Overview/Segment Information

Revenues from operations by segment and their distribution

Distribution-related
operations

Sports Club Business

1.5%

1.2%

Revenues from operations

Operating income

Revenues from operations

Operating income

billion yen

billion yen

billion yen

billion yen

11.3

3.2

Home Improvement
Center Business

124.9
billion yen

1.1

Revenues
from operations

16.4%
Revenues from operations

9.4

Operating income

4.6

759.9
billion yen(FY2023)

billion yen

Drugstore BusinessSupermarket Business

21.2%

55.5%

Revenues from operations

Operating income

Revenues from operations

Operating income

billion yen

billion yen

billion yen

billion yen

160.9

4.3

Supermarket Business

421.8

No. of stores……………

316

13.3

Ave. floor space……………

1,839

m2

(Valor Co., Ltd.)Business summary
In our Supermarket business, we have opened 8 new stores and closed 4,bringing the group's total to 316 stores. The strengthening of the fresh andprepared foods departments was supported by contributions from the foodprocessing and wholesale businesses, as well as contributions from companies
that became subsidiaries in the previous fiscal year, leading to an increase inrevenue. However, due to an increase in consumer awareness of lifestyleprotection and a decrease in demand from stay-at-home tendency, existing store
sales (excluding the impact of revenue recognition accounting standards, etc.)
decreased by 0.1% compared to the same period last year, leading to adecrease in gross sales profit. Additionally, an increase in utility costs such as
water, electricity, and gas contributed to a decrease in earnings.
18

Valor Holdings Co., Ltd. Annual Report 2023

Drugstore BusinessNo. of stores……………

495

Ave. floor space……………

744

m2

Business summary
In May 2022, our drugstore business acquired Nagisa Pharmacy, a dispensing
pharmacy, making it a subsidiary. We also opened 22 new stores, including
Nagisa Pharmacy, and closed 5 stores. As a result, by the end of the period, thetotal number of stores reached 495, of which 157 are dispensing pharmacies.
The effect of store renovations centered around the integration of thedispensing pharmacy department, along with an increase in demand for related
products due to the easing of movement restrictions and the re-expansion of
COVID-19 infections, led to a 2.9% increase in existing store sales (excluding
the impact of the application of revenue recognition accounting standards, etc.)
compared to the same period last year.

No. of stores……………

R esu l ts

Home Improvement
Center Business

161

Business summary
In our Home improvement center business, we opened 5 new stores and closed
2, bringing the total number of stores to 161 across the group as of the end of
the period. Due to the impact of price increases on products caused by the risingcost of raw materials, the average spend per customer on an existing store basis
increased by 4.3% compared to the same period last year. However, the numberof visitors decreased by 4.8% compared to the same period last year, andexisting store sales (excluding the impact of the application of revenue recognition
accounting standards, etc.) decreased by 0.7% year-on-year across threecompanies: Daiyu Eight Co., Ltd., Home Center Valor Co., Ltd., and Time Co., Ltd.
On the other hand, the e-commerce business significantly exceeded the previous
year's performance, securing an increase in revenue.

Sports Club BusinessNo. of stores……………

184

Business summary
In our sports club business, we opened 2 new stores and closed 11 stores,
bringing the total number of stores to 184 within the group at the end of theperiod, including 52 franchise-operated stores. In this business, from July, theincrease in monthly membership fees for “Sports Club AXTOS Will_G” and the
reduction in the number of members who suspended their memberships dueto the pandemic led to increased revenue. However, a significant increase in
the cost of sales, such as utilities, resulted in an expanded operating loss.

Distribution-related BusinessBusiness summary
In our group companies involved in distribution-related businesses, such as
logistics, material wholesaling, and equipment maintenance, operating
revenues increased, centered around the logistics and wholesaling businesses.
This increase in revenues absorbed the rise in selling expenses and generaladministrative expenses, leading to higher profits.

Valor Holdings Co., Ltd. Annual Report 2023

19

Results

Segment Financial Review

Store Network

Supermarkets
Valor Co.,Ltd.
Tachiya Co., Ltd.
Youth Co., Ltd.*
Shokusenkan-Taiyo Co.,Ltd.
Kohseiya Co.,Ltd.
Futabaya Co.,Ltd.
Sanko Co.,Ltd.
Terao Stores Inc.
Yamato Store LLC.
Yaosen Co., Ltd.
Yamata Co., Ltd.
VARO Co.,Ltd.
Other
DrugstoresHome Improvement Centers
Sports Clubs
Pet Shops
OthersTotal

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

238
179
11
31
15
—
—
—
—
—
—
—
2
—
214
35
52
17
11
567

251
221
13
—
15
—
—
—
—
—
—
—
2
—
241
35
54
17
3
601

263
232
13
—
17
—
—
—
—
—
—
—
1
—
271
36
58
17
3
648

266
235
13
—
17
—
—
—
—
—
—
—
1
—
301
37
65
18
3
690

275
238
14
—
17
5
—
—
—
—
—
—
1
—
337
35
75
19
4
745

281
243
15
—
17
5
—
—
—
—
—
—
1
—
361
36
95
21
5
799

290
240
16
—
17
5
3
8
—
—
—
—
1
—
379
36
146
22
7
880

298
240
17
—
17
6
3
8
4
—
—
—
3
—
416
148
192
107
14
1,175

297
239
17
—
16
6
3
8
4
1
—
—
3
—
449
152
190
110
28
1,226

312
239
19
—
16
6
3
8
4
1
6
7
3
—
478
158
193
115
38
1,294

316
240
20
—
16
6
4
8
4
1
7
7
3
—
495
161
184
119
47
1,322

Note: *merged into Valor in October, 2013.

Number of Stores by Region and Locations of Infrastructures (FY2023)
Number of Stores by Region
The figures indicate the number of stores; the size of the pie charts
corresponds to the number of stores by prefectures.

2
Supermarkets
Delicatessen Specialty Stores
DrugstoresHome Improvement Centers
Sports Clubs
Pet Shops
OthersNanto-shi

Fukui-shi

Hokkaido

Kani-shi
Ogaki-shi

Ichinomiya-shi
Yokkaichi-shi

Tajimi-shi

9Toyota-shi

85
17

36
37 15

Shimada-shi

3
17 17
8

Supermarket BusinessDistribution :Centers
Processing :Centers
Production :
Bases

20

Valor Holdings Co., Ltd. Annual Report 2023

57

24

Tohoku region

120

Hokuriku region

154

5 5

105

41

45

8

95

Koshinetsu region

Kinki region

Chugoku region
for chilled products
for ambient- temperature products
for chilled & ambient- temperature products
for fresh meatfor fresh vegetables & fruits
for fresh fish
4
8
for prepared food
10 4
for fresh bakery
Kyushu region
Shikoku region
for fish products

Drugstore BusinessDistribution Centers
Distribution Centers (Shared with the Supermarket Business)
Home Improvement Center BusinessDistribution Centers

7 18

4
3
16
1

3

18

2

9
39

37

Kanto region

88

2

69
199
42
395

Tokai region755

3Overseas3

(Millions of yen)

FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

Revenues fromoperations

303,521313,208

321,458

329,266

336,555

345,960

353,311372,733

396,248405,537

421,838

Operating income

11,028

8,443

9,760

9,887

9,738

8,518

9,433

9,050

16,103

14,90813,374

Total assets

127,490

142,260

144,604

153,045

176,384

184,386

195,231200,720

207,938214,395

220,190

Capitalexpenditures

12,915

17,931

12,07810,506

11,887

12,574

13,376

7,462

13,562

12,79814,604

Depreciation andamortization

6,346

6,826

7,381

7,556

7,339

7,490

7,633

8,431

8,363

9,510

9,941

Revenues fromoperations

62,49773,02880,47095,152

107,045

117,949

127,781

139,358

150,575

152,474

160,947

Operating income

1,934

2,449

1,961

2,736

2,692

2,532

3,488

4,317

3,978

2,950

4,317

Total assets

29,06533,64938,55744,60252,01958,84958,72567,75575,51178,70277,286

Capitalexpenditures

3,134

3,893

4,333

5,776

8,087

5,359

4,622

6,135

7,123

7,274

2,547

Depreciation andamortization

1,183

1,454

1,780

2,114

2,588

2,927

3,104

3,170

3,533

3,962

3,732

Revenues fromoperations

43,81046,55946,556

48,62950,37353,55555,173

114,301

130,177

122,947

124,962

Operating income

1,869

2,330

2,011

2,450

2,302

2,149

2,616

3,465

7,327

5,061

4,620

Total assets

19,456

19,06822,43022,49923,942

25,562

31,02081,23981,60282,404

83,078

Capitalexpenditures

1,259

464

2,276

1,478

4,777

1,316

645

4,677

3,595

4,374

4,295

899

875

910

945

1,000

1,099

1,083

2,505

2,440

2,622

2,897

Revenues fromoperations

8,788

8,955

9,271

9,838

10,45911,397

13,157

13,597

9,146

9,847

9,439

Operating income

420

419

463

532

639

680

672

556

(1,933)(559)(1,159)Total assets

10,76010,382

10,611

10,634

10,776

13,05915,175

15,76815,331

12,2607,403

Capitalexpenditures

319

338

527

791

1,119

3,114

2,565

1,960

140

435

739

Depreciation andamortization

666

636

655

711

785

882

1,080

1,295

1,236

1,144

1,106

Revenues fromoperations

6,699

7,228

7,638

8,590

9,610

9,075

10,265

10,687

11,26910,451

11,373Operating income

3,062

2,995

3,395

3,647

3,699

3,725

2,910

2,793

3,210

3,206

3,296

Total assets

18,80922,351

24,082

23,961

24,894

27,23028,56929,73332,51929,53527,892

Capitalexpenditures

1,888

2,155

624

478

2,018

3,044

384

1,050

965

785

704

550

784

819

716

721

758

817

846

976

1,014

1,009

Supermarkets

Drugstores
R esu l ts

Home Improvement
Centers

Depreciation andamortization
Sports Clubs

Distribution-related
operations

Depreciation andamortization

Valor Holdings Co., Ltd. Annual Report 2023

21

Foundation for Value Creation

Sustainability Management

The Valor Group Sustainability Management
The Valor Group has established its Valor Group Vision 2030, its vision of itself for 2030, and aims to build “Valor Economic Zone” thatconnects local communities conveniently and prosperously with the Valor Group’s products, services, and payments. It also seeks to become
a “destination company” that is chosen through the appeal of products while realizing a sustainable society through its Sustainability Vision
2030. As one basic policy under its FY2021-2023 strategic plans, the Company has the goal of management that is conscious of ties withsociety, and it endeavors to strengthen Group governance that underpins its business model while forging ahead on the three priority areas of“global environment,” “local communities,” and “diversity of human resources” that support sustainable business growth.

Sustainability Vision 2030
“The Valor Group will contribute to the development of local communities and the advancement of social life and culture basedon the efforts of all its employees, and through its business activities that lead to the realization of a sustainable society.”
The Valor Group has established six subcommittees, namely, Food Loss, Recycling, Energy and Water, Local Communities, Shopping Issues,and Human Resource Activities, for the three priority areas of the “global environment,” “local communities,” and “diversity of humanresources,” through the activities of all employees, with the promotion manager of each Group company taking the lead to carry out efforts.

Platform (shared platform) upon which actions are taken in FY2023

Initiatives taken fromorder of high priority
throughout the ValorGroup*Tackling the challenge of meeting

numerical targets with the goal of
Globaldelivering the connection of aenvironment sustainable global environment toLocal communities

Diversity ofhuman resources

the next generation

CO2 emissions

Food loss

Globalenvironment
Water resources

Shopping issues

Health orientation

Recycling

Active roles
for women

Diversity of humanresources

Local communities

Producer support

Local production for
local consumption

Senior citizens

People withdisabilities

Human Resources
Development

Subcommittee activities
In addition to the retail business, which includes supermarkets, drugstores, and home improvement centers, in each of the operatingcompanies involved in the sports business, manufacturing and processing business, distribution business, wholesale business, cleaning
business, security business, and others, we have been working on how to ensure the sustainability of business activities and how to manage
their impact on the environment and society. Based on this, we promote subcommittee activities to identify key issues and define targets foraddressing these issues, and to strengthen cooperation and information sharing within the Group on matters that are strongly related toachieving the goals of each operating company and the Group. A total of 70 members that comprise the six subcommittees gather at thesubcommittee meetings, which are held seven times a year (both online and offline), to promote the exchange of information that transcends
business segments and responsibilities. This works to expand food bank initiatives, to accelerate the installation of solar panels, and also thedevelopment of new ways to utilize food waste and other efforts that promote activity throughout the Group. The progress of subcommittee
activities is reported to the Group Management Executive Committee.
22

Valor Holdings Co., Ltd. Annual Report 2023

Setting goals for key issues
Establishing goals for key issues to be prioritized under the FY2021-2023 strategic plans
Objectives

Climate change
countermeasures

Food waste

Three-year targets (2021-2023)

2030 challenge targets

2050 challenge targets

Initiatives

10% reduction of emissionsof CO2 from Company sites*Compared to FY2019

40% reduction ofgreenhouse gas emissions
in the supply chain*Compared to FY2019

Greenhouse gas emissions
in the supply chain grossvolume of zero*Compared to FY2020

Promoting EMS utilization, energy
conservation activities
Promoting introduction of renewableenergyCollaboration with suppliers
Environmental training for all employees

35% reduction*Compared to FY2016

45% reduction*Compared to FY2016

55% reduction*Compared to FY2016

Improvement of store operations,infrastructure maintenance,collaboration with suppliers
Environmental training for all employees

Foundation for Value Creation

Initiatives for all Valor Group employees

Valor Group Fan-Making project

Launch event - partner members' tasting & evaluation meeting
On November 24, 2022 (Thurs.), at the Valor Human Resource
Development Center, we invited 35 individuals, including partner
members participating in the “Valor Group Fan-Making” project
being conducted by the LuVit division, to a tasting and evaluation
meeting of prototypes and currently available products planned byvarious manufacturing companies within the Valor Group.

The participatingcompanies

Raikusu Co., Ltd.
Daitoh Shokken Co.,Ltd.
Daien Foods Co., Ltd.
Saitou Coffee Co., Ltd.
Furuya Sangyo Co., Ltd. (PB Manufacturing Company)
Keirinkaku Co., Ltd.

What’s “Valor Group Fan-Making” project?
This project, as a new initiative leveraging the Lu Vit
card, was launched in January 2021, primarily by the
Lu Vit division, aimed at retaining and expanding thecustomer base of the Valor Group stores.
Premium Lu Vit cardholders are designated as“Partner Members,” and through the surveys andinterviews for them, we gather the “authentic voices”
of our customers to inform product development,
store layout improvements, and promotional strategies.

Scenes from the tasting & evaluation meeting

Valor Holdings Co., Ltd. Annual Report 2023

23

Foundation for Value Creation

Global Environment

Reduction of greenhouse gas emissions
At Valor Holdings Co., Ltd., we are working to calculate and reduce greenhouse gas (GHG) emissions at Group companies and to create
renewable energy sources.

Calculating greenhouse gas in the supply chain
Concerning the calculation of greenhouse gas emissions, following the calculation of its own emissions in FY2020, Valor Co., Ltd. has
expanded the scope of its calculation to the entire supply chain since FY2021, and calculated its emissions in accordance with the GHG
Protocol, a recommended international standard. Going forward, we will continue to calculate the emissions of our Group companies andwork to accomplish reductions.
Regarding the greenhouse gas (GHG) emissions for FY2023, due to the expansion of the scope of group companies, they are currently
being measured as of the issuance of the Annual Report. Therefore, the GHG emissions figures provided below are for FY2022 (subject toreplacement upon completion of the measurement).

FY2021*1 Greenhouse gas (GHG) emissions*2
Category

Calculation target

Direct emissions frombusiness operators themselves

Scope 1

Emission volume (t-CO2)*3

Emissions associated with fuel combustion*4

Emissions due to leakage of CFCs

7,735
36,582

Scope 2

Indirect emissions from the use of electricity, heat,or steam supplied by other companies*5

118,878

Scope 3

Indirect emissions other than Scope 1, 2

1,083,897

Scope 3 emissions
Ratio

Scope/Category

Emission volume (t-CO2)

Supply chain emissions volume1,247,092

100.0%

Scope1

44,317

3.6%

Scope2

118,878

9.5%

Scope3

Scope1,2,3

Category 1

Purchased goods

997,577

92.0%

80.0%

Category 2

Capital goods

20,543

1.9%

1.6%

Category 3

Fuel- and energyrelated activities

22,581

2.1%

1.8%

Category 4

Upstream transportation and distribution

9,708

0.9%

0.8%

Category 5

Waste generated in operations

25,5982.4%

2.1%

Category 6

Business travel

350

0.0%

0.0%

Category 7

Employee commuting

3,916

0.4%

0.3%

Category 8

Upstream leased assets

—

—

—

Category 9

Downstream transportation and distribution

—

—

—

Category 10

Processing of sold products

—

—

—

Category 11

Use of sold products

—

—

—

Category 12

End-of-life treatment of sold products

3,625

0.3%

0.3%

Category 13

Downstream leased assets

—

—

—

Category 14

Franchises

—

—

—

Category 15

Investments

Scope3———

1,083,897

100.0%

86.9%*1 April 2021 to March 2022
*2 Among consolidated business operators, all locations (239 supermarkets, as well as distribution centers, chilled centers, processing centers, produce centers, etc.) of Valor Co., Ltd.
*3 Usage of city gas and LP gas at each site (including tenant usage), gasoline usage by Company-owned vehicles, usage of autogas for forklifts, etc.
*4 Leakage of HFCs due to the use of freezing and refrigeration, as well as air conditioning equipment at each site. Converted to CO2 equivalent by multiplying a global warming potential.
*5 Power usage at each site (including tenant usage)*6 In this fiscal year, only the scope of specific shipper reporting

24

Valor Holdings Co., Ltd. Annual Report 2023

Response to TCFD
We have decided to express our support for the TCFD recommendations and have identified and assessed the risks and opportunities thatclimate change poses to our group's business in line with the TCFD final recommendations. We will enhance our disclosures and work
toward achieving our goals by more quantitatively assessing potential impacts based on climate-related risks and opportunities using
climate scenario analysis, in line with the disclosure framework recommended by the TCFD.
Note: TCFD: Abbreviation for the Task Force on Climate-related Financial Disclosures, established by the Financial Stability Board at the request of the G20.

Climate change-related governance structure

Governance
In March 2022, we established the Social Contribution andSustainability Committee under the Board of Directors to build asystem to address climate change issues and strengthen ourefforts.

Board of Directors
reportSupervise instruction /reportreportRepresentative
Director, CEOGroup Executive
Committee

instruction / reportreportcooperation

Social Contribution
Sustainability Committee

Risk Management
Committee

instruction / reportSocial Contribution SDGs subcommittees
Business companies
instruction /reportWe recognize climate change as a management issue, and we arecommitted to long-term and continuous efforts to address it interms of both a business risk and an opportunity. In FY2021,
based on the TCFD recommendations, we assessed climaterelated risks and opportunities that could affect our major
businesses using multiple scenarios.
Risks and opportunities identified are reflected in the mediumterm management plan and incorporated into activities to reducerisks or capture profit-earning opportunities, thereby strengthening
the resilience of the strategy.

Energy /water

Recycling

Shopping Issues

Contribution to
Local Communities

Human Resource
Activities

Foundation for Value Creation

Strategy

Food Loss

Possible scenarios
Anticipated Worldview
A world in which
average temperature inScenario crease by 2 1 0 0
below is limited to lessthan 2°C than
2°C
that before theIndustrial Revolution

Changes related to the transition to a decarbonizedsociety will affect businesses (transition risk)

A world in which
the averagetemperature inScenario crease by 2 1 0 0
is 4°C higher
4°C
than that before
the Industrial
Revolution

Physical damages by climate change will affectbusinesses (physical risk)

Regulations on climate change will be strengthened
and carbon tax and other laws and regulations will be
introduced.
Progress in low-carbon technologies and othertechnological innovations
Society as a whole is moving toward decarbonizationand companies are appreciated for their efforts toachieve it

Regulations on climate change introduced but limited
Increasingly severe extreme weather events andfrequent natural disasters
Temperature rise and water shortage cause changes
in crop growth conditions and water withdrawal
restrictions, etc.

Risk Management
We have established Risk Management Committee to comprehensively identify company-wide risks, including climate change-related risks, inaccordance with the "Risk Management Basic Regulations," and to assess the importance of potential risks within the Group in terms of theirimpact and probability of occurrence. The Risk Management
Committee Office shall be the Risk Management Department, which is
Climate Change Risk Management Systemchaired by an executive director and meets on a regular basis. Risks
Board of Directors
identified by the Risk Management Committee are managed byworking groups (subcommittees), and a system for risk management
reportreportduring normal times and crisis management during emergencies has
Social Contribution Sustainability
cooperation
Risk Management Committee
Committee
been established. In addition, we assess vulnerability to natural(Company-wide risk management)(Risk Management of Environmental Issues)disasters and other risks and prepare for BCPs. We recognize theinstruction / report
impact related to climate change as a risk to the Group, and incooperation with the Risk Management Committee, we will implement
Energy / Water Subcommittee
measures to address the issues identified and examined mainly by the(Subject to risks related to Energy/Water)
Energy and Water Subcommittee and the Social Contribution andSustainability Committee. These efforts are management issues andare reported regularly to the Board of Directors.

Indicators and Targets
We have set "Global Environment" as one of the priority areas inour "Sustainability Vision 2030" and have been working to reducegreenhouse gas (GHG) emissions as a measure against climatechange by setting long-term GHG emission reduction targets inour supply chain.

2030 Target

40% reduction in GHG emissions
FY2019 ratio
in the supply chain

2050 Target

Zero GHG emissions in the
supply chain

FY2020 ratio

Valor Holdings Co., Ltd. Annual Report 2023

25

Foundation for Value Creation

Local Communities

Under the four policies of regional cooperation utilizing the comprehensive strengths of the Valor Group, we will strive to strengthen
cooperation with local communities on the themes of food and nutrition education, healthy society, SDGs, and contingency support.

1

Education through Foods

Contributing to society
through food and products
Environmental Learning in Kani city
On July 30th (Sat.), the summer vacation event “Parent-Child Food and Plastic
Workshop – Path to an environmental doctor” hosted by Kani city was held at the
Valor Human Resource Development Center. Approximately 30 parent-child pairs(elementary school students in the third grade and above and their guardians)
residing in the city participated.
Valor hosted the “Osakana (fish) class.” A seafood trainer from Valordemonstrated fish filleting in front of the children. Feedback from the guardians
mentioned that it was a valuable experience for the children, providing them with anopportunity to engage in activities they usually wouldn't be able to do, making it apositive experience.

School Lunch Provision Business
Since April 2022, we have been supplying pork and chicken from Valor for theschool lunch in Tajimi city. As the number of businesses handling regional school
lunches has been decreasing, Valor, owning a processing center, has entered thebusiness. We received high praise for the quality when we made our first delivery
to the Tajimi City School Lunch Center on April 20th.

2

Healthy Society

To solve health and medical issues by utilizing ourgroup management resources.
AXTOS Marché
We are utilizing our closed days to hold this event aimed at “regional revitalization,”“community engagement,” and “community interaction.” With the goal of fulfilling
our concept of “wanting to make all people healthy and happy,” we will continue tohold this to widely promote the appeal of exercise and the charm of AXTOS."

Introduction of advanced pharmaceutical management andcutting-edge dispensing equipment.
V-drug pharmacy at Gifu University Hospital, in cooperation with the affiliatedhospital, plays a part in comprehensive community care in collaboration withmultiple professions and contributes to people's healthy and happy lives as acommunity-based medical institution.
Installation of infectious disease response waiting rooms
and private consultation rooms
While sharing information about medication status with the hospital for patients withvarious diseases, we provide appropriate dispensing services and have introduced thelatest dispensing equipment (such as automatic medication picking systems, fully
automated tablet packaging machines, powder dispensing robots, and fully automatedpowder packaging machines). By automating these processes, we have further
improved the accuracy of our dispensing operations, enhancing safety and security.

26

Valor Holdings Co., Ltd. Annual Report 2023

3

SDGs

Solving social issues in collaboration
with the community
Collaborations with the Social Welfare Councils
In collaboration with the Social Welfare Councils and municipalities in Gifu
prefecture and eight other prefectures, the number of affiliated children’s
cafeterias has increased from 75 to 161 locations within a year. Valor is actively
promoting the installation of food drive posts at its stores.
Furthermore, food drives are also being conducted at local events such as theTajimi Pottery Festival, Ceramic Craft Camp (Toki city), and “Totteoki no
Ongakusai in GIFU” (Special Music Festival in Gifu).

Foundation for Value Creation

4

Contingency Support

Assistance for those evacuated from Ukraine
Individuals who have evacuated from Ukraine to municipalities in Gifu
prefecture, as well as one who will evacuate in the future, were supported with
100,000 yen worth of Valor Group gift vouchers, ten tickets for the Sports ClubAXTOS, and employment opportunities at the supermarket Valor (70 storeswithin the prefecture). On April 26th (Tue.), a letter of appreciation was awarded
by Gifu prefecture for these efforts.

The Valor Group’s New Initiatives

Gifu prefecture × Valor Holdings
Comprehensive Partnership Agreement
As part of our efforts to address community challenges, we have signed a Comprehensive
Partnership Agreement with Gifu Prefecture. The signing ceremony took place at the Gifu
prefectural government office on March 17, attended by Hajime Furuta, Governor of Gifu
prefecture, our Chairperson and CEO Masami Tashiro, and Acting President (at the time)
Takayuki Koike.
While we have previously collaborated based on individual agreements, such as expanding
mobile sales within the prefecture and providing food and other necessities during disasters
and outbreaks of infectious diseases, this new comprehensive partnership agreement willfurther enhance our collaboration and joint efforts in various fields. These fields include
creating a safe living environment through food, building a healthy society, promoting SDGs,
and disaster prevention and response. Through this agreement, we will continue to advanceour ongoing activities aimed at solving local challenges.

Valor × i GRID Lauch Valor PPA Solarship
Valor PPA Solarship Agreement. We have initiated a CO2 reduction model project incollaboration with i GRID SOLUTIONS Co., Ltd. We are taking steps to reduce CO2 emissions
throughout the entire supply chain, marking the first such initiative in the domestic retail
distribution industry. Additionally, within the Valor Group, we have installed approximately
38MW of solar power facilities across 350 facilities, generating electricity equivalent toapproximately 10,000 households.

Valor Holdings Co., Ltd. Annual Report 2023

27

Foundation for Value Creation

Diversity of Human Resources

Supporting a diversified workforce in HR system
We support people who are highly motivated and whose experience and backgrounds are diverse. The principal HR systems are as
described below.
StatusPromotingfemaleworkers

Aside from offering all our employees opportunities
to display their personalities and their capabilities,
we also aim to enhance the workplace environment
where female workers can flourish in their careers.

Diverseworkstyles
We a re w o r k i n g t o i m p ro v e t h e w o r k p l a c eenvironment corresponding to the phase of theindividual’s life and career, including raisingawareness of maternity leave, childcare leave, andfamily care leave, and creation of a workplace thatfacilitates easy return to work.

Hiring ofthe disabled

Post-retirement
reemployment
program

Promotion to
full-time
employees

Number of
Employees

We are actively recruiting people with disabilities whowish to work for regular companies and be independent. The Gifu Prefectural Government established aregistration system in November 2011 to enable
companies to support the employment of people
with disabilities in cooperation with schools for learners with special needs. Valor registered in February
2012.
In order to facilitate employment of people withdisabilities also in other regions and support them sothat they can work at Valor for a long time, we intend
to promote education and training of our store staff
and while facilitating collaborations with regionalre c r u i t m e n t c e n t e r s a n d t h e s o c i a l w e l f a redepartments of municipalities.

FY2021
Ratio of female managerial
personnel to all managerial
personnel (managers or higher)(The number of female
managerial personnel/The
number of all managerial
personnel)

FY20225.8%(48people/826people)

6.0%(46people/766people)

FY20235.2%(41people/795people)

Number of female workers
who took maternity leave or
child care leave

165

Maternity leave(Employees/Part-timers)

people(62people/103people)

Child care leave(Employees/Part-timers)

people(75people/126people)

The rate of hiring people*
with disabilities

2.40 %

201

260

people(104people/156people)

224

252

2.61 %

2.89 %

peoplepeople(85people/139people) (109people/143people)

Contracted by Gifu
Prefecture
Adviser for people withdisabilities seeking jobs

from FY2013 to present

Adviser for employment ofpeople with disabilities

from FY2015 to present

Member of Gifu Prefecturetaskforce for abolition of
discrimination against
people with disabilities

from FY2015 to present

Against the backdrop of population aging, Valor
has introduced a post-retirement reemploymentp r o g r a m w h e r e b y Va l o r r e e m p l o y s a l l t h eemployees who are willing to work after retirement,
in principle. Eligible employees may be reemployed
after they retire until they reach 65 years old if theywish to do so.

Usage rate of postretirement reemployment
program79.1 %

88.7 %

90.5 %

16 key operating companies of the Group have programs
to promote part-time workers to full-time employees.
Part-time workers have periodic opportunities forpromotion to full-time employees. Part-time workers
who satisfy the criteria can apply for promotion and,after screening, successful applicants are promoted
to full-time employees. In addition, heads ofdepartments can recommend part-time workers ascandidates for promotion to full-time employees.

Number of part-timeworkers promoted tofull-time employees

238 people

141 people

124 people

Following the transition of important issue in humanresources development to “Frontline performancedevelopment”, the Company will further promote
initiatives to establish an environment for better
places to work including programs for humanresources development and supporting diverse
human resources.
Through such policies, we aim to retain talented
human resources in addition to improving productivity
and organizational capabilities through developing
individual abilities and skills.

Number of employees(Average length of service)

Female workers(Average length of service)

Male workers(Average length of service)

8,661 people 9,036 people 9,189 people(9.1years)(9.4years)

Valor Holdings Co., Ltd. Annual Report 2023

(9.7years)

2,552 people 2,794 people 2,926 people(5.9years)(6.1years)(6.2years)

6,109 people 6,242 people 6,263 people(10.5years)(10.9years)

Note: The above figures are based on the 216 companies accounting for about 88% of the Group’s total employee.
*In FY2016, we started group reporting of the rate of hiring people with disabilities for operating companies, of which voting rights are directly held by the Company.

28

184

people(85people/99people)(11.3years)

Collective Wisdom-Based
Human Resource Development

Educational Policy

The Valor Group’s Education System

Ensou Gakusha

To achieve the "Valor Group Vision 2030" and "Sustainability
Vision 2 0 3 0", our policy is to develop "leaders who canconnect products, customers, and society", which forms thebasis of those visions.

(our corporate university)

To achieve the “Valor Group Vision 2030” and “Sustainability Vision
2030,” which are the medium- to long-term management policiesof the Valor Group, it is important to develop “leaders who canconnect products, customers, and society,” which forms the basiso f t h e s e p o l i c i e s f ro m ahuman resource perspective.
We are working towards
creating a more comfortable
work environment, including theestablishment of the HD Human
Resources Department.

Educational Policy

afoundation
1 Buildingof human resources

Enhancing educational opportunities /Improving training effectivenessInstructor training
Spreading to Valor Group

2 Enhancing
field capabilities

Productivity Improvement Training

Strengthening

Executive Training
Next generation Executive Training
Training for the selected young employees

resources /3 humanSearching
for the talented

Foundation for Value Creation

Human Resource Development Center

Ensou Gakusha (our corporate university)
In the new education system named “Enso Gakusha,” meaning “a place where things gather, the center of activity,” we aim to educate talents
by gathering collective knowledge. Under the following educational framework, the Valor Group’s joint training programs are underway.

Education System
Specialized Knowledge & Skill
Training

Selected Young Employee Training

Executive Candidate Selection
Training

Thematic
Training

By GroupCompany

Valor
Management
AcademyExecutive

Executive
Management

Department
Head Level

District Manager Training

Promotee (J4-2nd Year)
Training

New Store Manager Training
Buyer Training

Promotee (J4-1st Year)
Training

New Chief Training

2nd Year Employee
Training
General/Staff
New Employee Training

Initial Employee Training

Mid-career Employee Training

3rd Year Employee
Training

Corporate
Philosophy
training
Young
Employee
Training in US
NextGeneration
Buyer Training

Promotion of Women’s Advancement

Store Manager & Supervisory
Manager Training

Qualification Acquisition Support

Promotee (H1) Training

Valor Business
SchoolCorrespondence Education Support

Corporate Philosophy Training

Store Manager Training by
Scale

Business School Dispatch

NextGeneration
Executive
Management

Department
Head
Management
Training

Training by Group Company, Function, and Job Type

Section Chief
Level

Leader

SelfDevelopment
SupportGroup Secondment

Hierarchical Human Resource Development Program
Annual and Hierarchical Training

Human Rights Awareness & CompliancePosition

Department-Specific 3rd Year
Employee Training

Department-Specific 2nd Year
Employee Training

Department-Specific New
Employee Training

Valor Holdings Co., Ltd. Annual Report 2023

29

Foundation for Value Creation

Corporate Governance

Basic Policy
The fundamental objectives of Valor Holdings’ corporate governance are to achieve efficient management and faster decision-making andenhance corporate value continuously, while ensuring management transparency and fairness, thorough risk management as well as timely
and appropriate disclosure from the viewpoints of shareholders, customers, and all other stakeholders.

Corporate Governance Systems
Overview of Valor’s Corporate Governance Structure (As of October 24, 2022)
On October 1, 2015, our company transitioned to a holding company structure, separating management decision-making and supervisionfrom business execution. This has enabled us to establish an efficient management and execution system. Additionally, by appointing
external directors, we are committed to building an effective and high-level supervisory system and achieving transparent management.
Furthermore, on June 30, 2016, we transitioned to a company with an Audit and Supervisory Committee, placing a majority of external
directors on the committee to enhance the supervisory function of the Board of Directors and further strengthen our corporate governance.
Organization Form

Company with Audit & Supervisory
Committee System

Number of Directors

14 (of whom 5 are Outside Directors)

Chairperson of the Board

President

Number of Audit &Supervisory Committee
Members

4 (of whom 3 are Outside Directors)

General Meeting of Shareholders
Appointment /Dismissal

Nomination andCompensation Committee
Legal Counsel, Tax Accountant,and Other Specialists
Management
Advisory

Internal Control & Risk
Management, Sustainability

Business
Execution

Management,
Oversight and Audit

ReportConsult

Executive Directors (8)Outside Directors (2)Audit report

Board of Directors
Audit / Supervision

AdviseAudit & Supervisory Committee& Supervisory Committee Members( 4 OfAuditwhom
3 are Outside Directors )Audit report
Collaboration
Audit report

Accounting Auditor
Ernst & Young ShinNihon LLC

Accounting audit

ReportRepresentative Director

Collaboration

Group Management Executive Committee· Executive Directors (7)· Audit & Supervisory Committee Member (1)· Representatives of Group’s core companies (5)Refer matters fordiscussion / Report

Appointment /Dismissal

Audit /
Supervision

Appointment /Dismissal

ReportAppointment /Dismissal

Instructions /Collaboration

Instructions

Executive Directors
Operating Companies
Audit

Instructions and supervision

Audit Office

Activities of the Audit Office, the Risk Management Committee, Compliance Committee and the Internal Control Committee cover the Group companies.

Risk Management Committee

Compliance Committee

Social Contribution and Sustainability Committee

Helpline

Internal Control Committee

Performance evaluation on the Board of Directors
Since 2015, the Company has been considering whether or not the Board of Directors is functioning effectively. Based on the
results of this consideration, the Company intends to improve the Board of Directors as a whole through a continuous process oftaking appropriate actions to rectify weaknesses and build up strengths.
To improve the Board of Directors, all of the Directors have been conducting self-evaluation questionnaires, which are designed
to evaluate the effectiveness of the structure of the Board of Directors and its discussion and consideration, etc. on a scale of one
to five. The overall evaluation for FY 2023 was 4.1 (same as the previous year, 4.1), indicating that effectiveness has been generally
maintained.

30

Valor Holdings Co., Ltd. Annual Report 2023

Policy and procedures for appointment and removal of management executives by the Board of Directors, andreasons for nomination of candidates for Director
Reasons for appointment, removal and nomination(1) Policy· Regarding Directors who are not Audit & Supervisory Committee Members, people with specialized knowledge and excellent management &decision-making capabilities or people who execute important businesses or are responsible for key operating companies are nominated as
candidates. For Outside Directors, people with abundant experience in their respective fields, excellent character, and high level of insight as well as
the capability of providing objective and multifaceted suggestions about management, are nominated as candidates.
· Regarding Directors who are Audit & Supervisory Committee Members, people with abundant experience in their respective fields, excellent
character, and high level of insight as well as knowledge of finance and accounting, understanding of the Group’s business and diverse viewpoints
about corporate management are nominated as candidates to ensure accurate auditing of compliance and appropriateness of business execution.
· The dismissal of a Director shall be deliberated at the Board of Directors meetings in the event that the Director is in violation of laws andregulations or the Articles of Incorporation, other circumstances occur that prevent the Director from properly performing his or her duties, or theCompany’s corporate value is significantly damaged by the Director due to negligence of his or her duties, etc.

(2) Procedures· Regarding Directors who are not Audit & Supervisory Committee Members, candidates shall be determined by the Board of Directors after
consideration by the Nomination and Compensation Committee chaired by Representative Director Masami Tashiro consisting of two Executive
Directors and three Outside Directors.
· Regarding Directors who are Audit & Supervisory Committee Members, candidates shall be determined by the Board of Directors after
consideration by the Nomination and Compensation Committee and subsequent consent of the Audit & Supervisory Committee.
Foundation for Value Creation· The dismissal of a Director shall be determined by the Board of Directors after hearing opinions of the Audit & Supervisory Committee, in addition toreports from the Nomination and Compensation Committee.

(3) Explanation about appointment, removal and nomination· Reasons for election of each candidate for Director are disclosed in the reference document for the General Meeting of Shareholders.
· Reasons for election of each candidate for Outside Director are disclosed in [Directors] “Relations with Valor Holdings Co., Ltd. (2)” of “IIManagement Organization and Other Corporate Governance Systems Concerning Management Decision-Making, Execution and Supervision” in
the Corporate Governance Report.
· Explanation of the dismissal of Directors (excluding non-reappointment) shall be disclosed in the reference documents for the General Meeting of
Shareholders.

Policy for determining the amount of compensation and the calculation method(1) Basic policy· Directors’ compensation consists of basic compensation, performance-linked bonuses and share-based compensation, all of which shall be set
separately for inside and outside directors. For Outside Directors and Directors who are Audit & Supervisory Committee members, compensationconsists only of basic compensation, in view of their roles and independence.
· Basic compensation, paid monthly, shall be, in principle, provided in an amount that is adequate for securing (recruiting) excellent people as
executives and shall be determined based on comprehensive evaluation of the Company’s financial performance, each Director’s performance of
duties, achievements and degree of contribution. Regarding Directors who are also employees, the salary as an employee shall be paid inaccordance with the Rules for Wages for Employees. For Directors (excluding executive directors) from a consolidated subsidiary, compensation at
the subsidiary shall be paid in accordance with the subsidiary’s rules for directors’ compensation.
· The amount of performance-linked bonuses shall be determined within the maximum amount approved at the General Meeting of Shareholders inconsideration of the previous amount of bonuses paid, the Company’s financial results for the current year and the business performance that the
Director is delegated. In addition, in accordance with the “Determination of Remuneration for Granting Restricted Shares to Directors (excluding
Directors who are Audit and Supervisory Committee Members and Outside Directors)" approved at the 65th Ordinary General Meeting of Shareholders
held on June 30, 2022, the compensation limit for Directors shall be reduced and restricted shares shall be granted as part of Directors’ bonuses.
· Share-based compensation is an employee stock ownership plan approved at the 60th General Meeting of Shareholders held on June 29, 2017. At
the time of resignation or retirement of a Director, the Company’s shares are delivered to the Director in accordance with the Rules for Delivering
Shares to Directors, which was approved at the Board of Directors meeting held on the same date.

(2) Procedures
The amount of compensation for Directors shall be an agenda item of the General Meeting of Shareholders and shall be determined within the
maximum amount decided at the General Meeting of Shareholders. Regarding the amount of basic compensation and bonuses, in order toincrease transparency and objectiveness, the Nomination and Compensation Committee, which is an advisory organ for the Board of Directors
consisting of two Executive Directors and three Outside Directors, shall examine and review the details, after which the amount shall be determinedby resolution of the Board of Directors; then the decision is redirected to the discretion of Chairman & CEO Masami Tashiro, on the condition thatthe report of the Nomination and Compensation Committee is emphasized.
The amount of compensation for Directors who are Audit & Supervisory Committee Members shall be determined by resolution of the Audit &Supervisory Committee.

Independence criteria and qualifications for Independent Outside Directors
Our criteria for selecting Outside Directors are that they satisfy the requirements for independent officers pursuant to the Companies Act
and as specified by the stock exchanges where the Company’s shares are listed; that they are unlikely to have conflicts of interest withgeneral shareholders; that they are not affiliated with a supplier or a customer of the Company with which transactions exceed an amountequal to 2% of the Company’s consolidated net sales or exceed ¥10 million in direct individual transactions; and they have specialized
knowledge about finance, accounting, law, management, etc. or experience in corporate management, etc.
Valor Holdings Co., Ltd. Annual Report 2023

31

Foundation for Value Creation

Corporate Governance

Number of meetings of the Board of Directors and the Audit & Supervisory Board held and attendance status (FY 2023)
Meetings of the Board of Directors

Meetings of the Audit & Supervisory Board*

12

13

100%

97%

Number of meetings
Attendance of Outside Directors

Note: The figures are based on the number of meetings held from April 1, 2022 to March 31, 2023.

Dialogues with shareholders in FY2023
66th Ordinary General
Meeting of Shareholders(Held June 29, 2023)

152 shareholders attended

72 minutes (FY2022: 133 attendees, 63 minutes)

Directors' Skills Matrix (As of August 18, 2023)
Diversity
Name

Positions

Skills that the board of directors should have

Sex

Age

Corporate
Management
and Strategy

Industry
Expertise

Sustainability○

Technology

Finance,
Accounting

Legal

Governance,
Risk
Management

Masami Tashiro

Representative Director,
Chairperson and CEO

Male

76

○

○

Takayuki Koike

President

Male

50

○

○

Katsuyuki Mori

Senior Managing Director

Male

62

○

○

○

Akira ShinohanaManaging Director

Male

50

○

○

○

Morisaku Wagato

Director

Male

64

○

○

○

○

Motohiko Takasu

Director

Male

49

○

○

○

○

Naotaka Koketsu

Director

Male

59

○

○

Shunichi Asakura

Director

Male

73

○

○

Toshiyuki Takahashi

Outside Director

Male

72

○

○

Yoko Yamashita

Outside Director

Female44

Toshio Abiko

Director, Audit & Supervisory
Committee Member (full-time)

Male

56

Mutsuo Masuda

Outside Director, Audit &Supervisory Committee Member

Male

78

Hirofumi Hata

Outside Director, Audit &Supervisory Committee Member

Male

Tokimitsu Ito

Outside Director, Audit &Supervisory Committee Member

Male

○

○

○

○

○
○

○

○

○
○

○
○

○

○
○

○

○

○

○

○

71

○

○

68

○

○

○

*1 The above table does not indicate all of the skills and areas of expertise possessed by each director.
*2 The age of the directors is as of June 29, 2023.
*3 “Industry" with respect to industry expertise is defined as retail trade, food manufacturing, sports club business, and transportation business.

Basic Policy on the internal control system and the status of its development
Our company is committed to maintaining and enhancing corporate governance by establishing and operating an internal control system
based on the “Basic Policy on Internal Control Systems to Ensure the Appropriateness of Operations” determined by our Board of
Directors. Below is a summary and an overview of the operational status of the internal control system. (The “Basic Policy on Internal
Control Systems to Ensure the Appropriateness of Operations” of our company was decided at the Board of Directors meeting held on
May 8, 2006, and was most recently partially revised on March 20, 2023.)

Overview of the operational status of the internal control system
In our company, to verify the construction and operational status of the internal control system, we have established an Internal Control
Committee, which meets regularly. During these meetings, the status of the internal control system's maintenance and operation is
confirmed through reports from various departments and the audit office. The Internal Control Committee is composed of executive
directors as members, with director, audit & supervisory committee members attending each meeting and providing their opinions as
appropriate. The results confirmed by the Internal Control Committee are reported to the Board of Directors once a year. Additionally, if any
matters requiring prompt reporting are identified, a system is in place to report these to the Board of Directors as needed.
32

Valor Holdings Co., Ltd. Annual Report 2023

Compliance and Risk Management Systems

Risk management system
We have established the "Basic Rules for Risk Management" as a regulation for managing the risk of losses. This regulation allows for thecomprehensive and overarching management of risks of loss across the entire company (hereinafter referred to as "risks"), clarifies the risk
management structure, and includes the establishment of a Risk Management Committee to oversee risk management activities.
Furthermore, the Audit Office conducts audits on the management of risks as necessary and reports the findings to the Board of Directors
and the Audit & Supervisory Committee.

ComplianceFoundation for Value Creation

Our company positions the system that ensures the execution of duties by directors and employees conforms to laws and the articles ofincorporation as the compliance system and has implemented the following framework:
1. As the foundation of our compliance system, we have established the “Corporate Ethics and Conduct Guidelines” and the “Basic
Compliance Rules” that define the ethical behavior of all officers and employees, including directors. Additionally, the Compliance
Committee is convened as necessary to maintain, develop, and improve the compliance system.
2. The independent Audit Office serves as the internal auditing department, conducting company-wide internal audits separate from theexecutive departments.
3. Directors and the Audit Office are required to immediately report to the Audit & Supervisory Committee any significant legal violations orother important facts related to compliance found within the company, and also report these findings without delay to the Board of
Directors and similar bodies.
4. As part of the internal management system for compliance, including legal violations, we have established the rules for whistleblowing
and operate whistleblowing system in accordance with these rules.
5. Audit & Supervisory Committee members and outside directors may express opinions and request the formulation of improvement
measures when they recognize problems with the company's legal compliance system or internal reporting system.

System to ensure the appropriateness of business operations within our company and its group of subsidiaries
The Action Guidelines for Corporate Ethics has been applied to all Group companies to foster the legal compliance awareness of all theGroup’s directors and employees. In addition, the Company has established the Rules for Management of Group Companies and Affiliates
and the Rules of Authority of Group Companies and Affiliates, which require Group companies to report to the Company on certain mattersbased on these rules. Matters that meet certain criteria are submitted to the Company’s Board of Directors or the Group Management
Executive Committee as matters to be discussed. The Audit Office, which reports directly to the Representative Director, audits theoperations of each Group company based on the internal audit plan, and reports the results of its audits to the Board of Directors, theAudit & Supervisory Committee, the Accounting Auditor and other relevant departments to ensure sound business operations.

Risk awareness
The Company considers that the following matters may have a significant impact on investors’ decisions concerning the Company’s
statuses of operations and accounting.
1. Factors that may have an impact on the Group’s financial performance(1) External environment of the retail business(economic trends, increased price competition, competition, taxation on
consumption, climate change, etc.)(2) Store opening policies (difficulty in securing land or premises satisfying the store opening criteria, regulatory restrictions, etc.)(3) Food safety (quality incidents such as food poisoning and contamination, erroneous food labeling, etc.)(4) Natural disasters, infectious diseases, etc. (in case that natural disasters such as earthquakes and typhoons occur or
infectious diseases spread)(5) Entry to new businesses (in the event that anticipated results cannot be achieved because of changes in the external
environment, etc.)(6) Interest rate fluctuations(7) Securing of human resources (difficulty in recruiting human resources and developing them as planned)(8) Security measures for information systems (in case of troubles beyond the Company’s expectation)
2. Regulatory restrictions concerning the Group(1) Act on the Measures by Large-Scale Retail Stores for Preservation of Living Environment (in the event that it is not possible
to open new stores or increase the floor space of existing stores as planned)(2) Leakage of personal information(3) Other regulatory restrictions
3. Impairment of noncurrent assets
4. Defferred tax assets

Valor Holdings Co., Ltd. Annual Report 2023

33

Financial and Corporate Data

11-year Summary of Financial Results

FY2013

FY2014FY2015FY2016

For the year:
Revenues from operations

431,218

454,180

470,564

497,463

Operating income

15,852

14,287

15,00016,683

Ordinary income

16,844

15,311

16,10817,586

Net income

8,184

9,162

9,214

10,759Total assets

213,629

235,131245,386

255,916

Net assets

75,46682,94990,881

99,02774,887

82,39590,301

98,40875,67987,26586,88084,952

Cash flows from operating activities

21,13919,19822,25722,991

Cash flows from investing activities(20,961)(23,746)(15,660)(19,045)

177(4,547)

6,596

3,945

At year-end:

Net assets (excl. subscription rights to shares and non-controlling interests)
Interest-bearing debt
Cash Flows:Free cash flows
Cash flows from financial activities

2,914

5,983

(3,745)(6,758)Cash and cash equivalents at the end of fiscal year

15,764

17,055

19,96017,103

22,101

25,226

20,22520,041for new store openings

14,414

12,851

12,763

11,628for refurbishing existing stores

1,788

2,306

2,237

3,650

for others

5,899

10,069

5,225

4,763

10,255

11,09012,168

12,683

Net assets per share (BPS) (yen)1,454.43

1,600.25

1,751.57

1,925.45

Net income per share (EPS) (yen)159.56177.95178.91208.87

Capital Expenditures:
Capital expenditures (based on payment)
Breakdown of expenditures:

Depreciation and amortization (CF)Per Share data:

Cash dividends per share (yen)

29

31

33

36

18.2%

17.4%

18.4%

17.2%

Return on total assets (ROA)

8.1%

6.8%

6.7%

7.0%

Return on equity (ROE)

11.5%

11.7%

10.7%

11.4%

Shareholders’ equity ratio

35.1%

35.0%

36.8%

38.5%

1.0

1.1

1.0

0.9

Dividend payout ratio
Financial indicators:

Debt equity ratio (times)

Revenues from operations (millions of yen)

Operating income (millions of yen)

Total assets / Net assets (millions of yen)
Total assets

800,000

730,168 732,519
678,096759,977

500,000

30,00025,648400,000

600,000

Net assets

565,931

21,20520,00014,210400,000

20,062

15,515383,919

404,458 410,365

417,107311,813300,000

200,000
10,000140,645
125,395

200,000

155,190 162,521

167,520

100,000

034

FY2019 FY2020 FY2021 FY2022 FY2023

Valor Holdings Co., Ltd. Annual Report 2023

0

FY2019 FY2020 FY2021 FY2022 FY2023

0

FY2019 FY2020 FY2021 FY2022 FY2023

(Millions of yen)

FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

520,530

544,020565,931

678,096

730,168

732,519759,977

15,43913,47014,21015,51525,64821,20520,062

16,762

14,937

16,091

16,87828,397

24,14023,04910,522

7,570

7,910

6,477

12,592

9,014

7,603

269,488285,905

311,813

383,919

404,458

410,365

417,107

107,727

113,167

125,395

140,645

155,190

162,521

167,520

107,057

112,365

124,599

132,375

142,095

148,156

152,408

87,231

88,821

96,717

124,872

120,884

125,456

118,780

22,27027,79027,36930,871

44,13824,361

36,397(21,569)(24,258)(31,621)(26,615)(28,137)(26,729)(25,885)

700

3,531

(4,252)

4,256

16,001(2,367)

10,511(3,223)

7,302

(551)

(10,472)(4,115)(12,329)

14,93817,93824,15929,34922,867

20,97324,441

27,57526,87832,13832,83230,94725,995

15,144

14,394

14,903

20,457

9,742

14,484

13,464

7,709

9,850

9,451

8,498

17,14515,158

11,726

1,587

3,332

2,524

3,183

5,945

1,304

805

13,125

13,952

15,163

17,665

18,234

20,22820,691

2,093.74

2,196.89

2,320.53

2,435.06

2,660.56

2,766.89

2,851.73

205.83148.04153.06

120.63234.52167.87141.61

40

45

48

52

54

56

58

19.4%

30.4%

31.4%

43.1%

23.0%

33.4%

41.0%

6.4%

5.4%

5.4%

4.9%

7.2%

5.9%

5.6%

10.2%

6.9%

6.7%

5.1%

9.2%

6.2%

5.0%

39.7%

39.3%

40.0%

34.1%

35.3%

36.2%

36.6%

0.8

0.8

0.8

0.9

0.8

0.8

0.7

Cash Flows (millions of yen)
Cash flows from operating activities

Cash flows from investing activities

Annual cash dividends per share (yen)Dividend payout ratio (%)

Financial and Corporate Data

(3,168)14,659ROE / ROA (%)
ROE

ROA

Free cash flows

60

60,00044,13840,00027,36952
36,39730,871(4,252)

41.0

40

31.4

23.0

5

(26,615) (28,137) (26,729) (25,885)

FY2019 FY2020 FY2021 FY2022 FY2023

7.2

6.7

6.2
5.1

20

(31,621)

9.2

10

33.4

(2,367)-20,000-60,000

1530

0-40,000

58

43.1
10,511

4,256

56

48

24,361
16,001

20,000

50

54

5.4

4.9

5.6

5.9
5.0

10

0

FY2019 FY2020 FY2021 FY2022 FY2023

0

FY2019 FY2020 FY2021 FY2022 FY2023

Valor Holdings Co., Ltd. Annual Report 2023

35

Financial and Corporate Data

Consolidated Financial Statements (Summary)

Consolidated Balance Sheet

Valor Holdings Co.,Ltd. and Subsidiaries (As of March 31, 2022 and 2023)(Millions of yen)

FY2022

FY2023

FY2022

FY2023

Notes and accounts payable-trade57,23759,911

Short-term loans payable

19,841

20,041

Commercial papers

17,00019,000Current portion of long-termloans payable

17,795

11,736

Lease obligations

2,445

2,286

Income taxes payable

3,480

4,744

Provision for bonuses

3,540

3,670

Provision for directors’ bonuses

198

210

Provision for point card certificates

485

519

Provision for loss on store closing

58—

Asset Retirement Obligations

65

82

Other

25,89528,230Total current liabilities

148,045

150,433(Liabilities)(Assets)

Current liabilities

Current assets
Cash and deposits

23,26021,482Note, accounts receivabletrade, and contract asset

14,905

16,701

Merchandise and finished goods

56,261

59,701

Raw materials and supplies

1,128

1,418

Other

14,67016,379(9)(11)

110,217

115,671

Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures

305,319

318,091

Accumulated depreciation(161,166)(170,491)

Buildings and structures, net

144,152

147,599

Noncurrent liabilities

14,241

14,765

Bonds payable

10,00010,000(10,009)(10,726)

Long-term loans payable

47,51145,766

Lease obligations

10,862

9,950

Deferred tax liabilities

198

231

496

411

Machinery, equipment
and vehicles
Accumulated depreciation
Machinery, equipment
and vehicles, net

4,231

4,039

Land

54,28254,524

Lease assets

23,227

21,140

Provision for directors’
retirement benefits(15,266)(14,503)

Provision for retirement benefits

6,297

6,502

Asset retirement obligations

16,14318,151Long-term deposits received

6,821

6,700

Other

1,468

1,439

Total noncurrent liabilities

99,79999,153247,844249,587

13,60913,609

Accumulated depreciation
Lease assets, net

7,961

6,637

Construction in progress

4,497

2,448

Other

46,764

49,669

Accumulated depreciation(36,577)(39,514)

Other, net

10,186

10,155

225,312225,405

Total property, plant andequipment

Total liabilities(Net assets)
Shareholders’ equity
Capital stock

Intangible assets
Goodwill

2,323

Lease assets

1,807

Capital surplus

20,06320,062Retained earnings

115,030

119,567

(547)

(831)

148,156

152,408

Valuation difference on
available-for-sale securities

559

673

Deferred gains (loss) on hedges

5(2)Foreign currency translation
adjustment

132

(207)

112

139

Other

15,323

16,479Total intangible assets

17,75918,426

Investment securities

9,787

9,981

Long-term loans receivable

1,078

1,061

Deferred tax assets

9,900

10,508

Guarantee deposits

32,57832,482Remeasurements of defined
benefits plan

(266)

(138)

Other

4,092

3,909

431

325

(360)

(339)

Total accumulated othercomprehensive income

57,07757,603

300,148

301,436

410,365

417,107

Investments and other assets

Allowance for doubtful
accounts
Total investments andother assets
Total noncurrent assets
Total assets

36(Millions of yen)

Valor Holdings Co., Ltd. Annual Report 2023

Treasury stock
Total shareholders’ equity
Accumulated othercomprehensive income

121

19

Minority interests

13,811

14,766

Total net assets

162,521

167,520

410,365

417,107

Subscription rights to shares

Total liabilities and assets

Consolidated Statement of Income

Valor Holdings Co.,Ltd. and Subsidiaries (Fiscal years ended March 31, 2022 and 2023)(Millions of yen)

FY2023

708,484
520,255
188,228
24,034
212,263735,385
539,963
195,422
24,591
220,014

5,080
159
1,512
1,864
1,587
2
989
73,227
6,282
3,226
179
1,067
(16)
12,636
10,226
31,915
4,811
18,071
652
17,579191,057
21,205

4,697
151
1,251
1,863
1,748
0
964
75,264
6,177
3,388
208
1,125
42
13,231
13,691
32,937
4,942
18,476711
19,075
199,951
20,062

134
182
1,588
648
85
1,963
4,603

123
193
1,555
683
57
1,845
4,460

764
497
405
1,668
24,140

746
492
234
1,473
23,049

84
1
0
77
582
—
—
95
841

29
39
1
263
293
163
101
64
957

42
186
3,308
421
6
358
4,324
20,657
7,985
1,421
9,407
11,250
2,235
9,014

10
154
5,939
221
—
349
6,675
17,331
8,633
(578)
8,055
9,276
1,672
7,603

Valor Holdings Co., Ltd. Annual Report 2023

Financial and Corporate Data

Net sales
Cost of sales
Gross profit
Operating revenues
Operating gross profit
Selling, general and administrative expenses
Advertising expenses
Packaging expenses
Supplies expenses
Distribution expenses
Provision for point card certificates
Provision of allowance for doubtful accounts
Directors’ remuneration
Salaries and wages
Bonuses
Provision for bonuses
Provision for directors’ bonuses
Retirement benefit expenses
Provision for directors’ retirement benefits
Welfare expenses
Utilities expenses
Rent expenses
Repair and maintenance
Depreciation
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Office work fee
Rent income
Investment gain on equity method
Other
Total non-operating incomes
Non-operating expenses
Interest expenses
Rent cost of real estate
Other
Total non-operating expense
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sale of investment securities
Gain on negative goodwill
Penalty income
Subsidy income
Gain on foreign currency translation adjustment
Gain on reversal of stock acquisition rights
Other
Total extraordinary income
Extraordinary loss
Loss on sales of noncurrent assets
Loss on retirement of noncurrent assets
Impairment loss
Loss on reduction of noncurrent assets
Loss on valuation of investment securities
Other
Total extraordinary loss
Income before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

FY202237

Financial and Corporate Data

Consolidated Financial Statements (Summary)

Consolidated Statements of Cash Flows

Valor Holdings Co.,Ltd. and Subsidiaries (Fiscal years ended March 31, 2022 and 2023)(Millions of yen)

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Gain on bargain purchase
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in defined benefit liabilities
Increase (decrease) in provision for directors’ retirement benefits
Increase (decrease) in provision for point card certificatesInterest and dividends income paid
Interest expenses received
Loss on retirement of noncurrent assets
Loss on reduction of noncurrent assets
Loss (gain) on valuation of investment securities
Equity in losses (earnings) of affiliates
Gain on foreign currency translation adjustment
Gain on reversal of stock acquisition rights
Subsidy income
Penalty income
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accounts payable-other and accrued expenses
Other
SubtotalInterest and dividends income received
Penalty income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments of loans receivable
Proceeds from collection of loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Proceeds from guarantee deposits received
Repayments of guarantee deposits received
Payment for acquisition of shares in subsidiaries resulting in change in scope of consolidation
Payment for acquisition of businessSubsidy income
Other
Net cash provided by investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Net increase (decrease) in commercial papers
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Repayments of finance lease obligations
Proceeds from sales of treasury stock
Purchase of treasury stock
Cash dividends paid
Dividends paid to non-controlling shareholders
Other
Net cash provided by financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease)in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

38

Valor Holdings Co., Ltd. Annual Report 2023

FY2022

FY2023

20,657
20,228
3,308
652
(0)
(35)
471
(197)
108
(317)
764
186
421
6
(85)
—
—
(582)
(77)
(987)
(3,206)(2,515)(705)(1,958)1,370
37,507218
77(753)(12,687)
24,361

17,331
20,691
5,939
711
(1)
(19)
448
(110)
41
(317)
746
154
221
—
(57)
(163)
(101)
(293)
(263)
(1,869)(3,733)
2,732
87
903
870
43,948
227
263
(733)
(7,477)36,229(221)
462(24,339)228(2,506)(355 )
7(29 )
676(2,003)
1,738
653
(341)
(1,570)
(92)
582
381
(26,729)(332)
276(23,177)
232(2,299)
(131)
39
(54)
74
(1,294)
1,498
380
(497)
(112)
(128)
293
(484)
(25,717)(2,121)
7,000
21,800(23,982)
9,950(10,010)(3,221)15(0)(2,958)(586)
0(4,115)0(6,482
29,34922,867200
2,000
10,100(17,942)——(2,697)16(300)(3,066)(577)(61)(12,329)(76)(1,894)
22,867
20,973

Consolidated Statements of Changes in Net Assets

Valor Holdings Co.,Ltd. and Subsidiaries (Fiscal years ended March 31, 2022 and 2023)

FY2022(Millions of yen)

Shareholders’ equity

Balance, March 31,
2021, adjusted forchanges inaccounting policies

CapitalStock

CapitalSurplusRetainedearnings

Treasury
stock

Total
shareholders’equity13,60920,049108,998(561)

142,095

Cumulative effects
of changes inaccounting
policies
Restated balance

Accumulated other comprehensive income(24)
13,60920,049108,973

Valuation
Deferred gains
difference on(loss) on
available-forhedges
sale securities

880—

Foreign
Total accumulated Subscription
Remeasurements
rights tocurrency
otherof defined
sharestranslation
comprehensive
benefits planadjustment
income

140

(254)

766

134

(24)
(561)

142,070

880

—

140

(254)

766

134

Noncontrollinginterests

Total net
assets12,194

155,190

(31)

(56)

12,162

155,134

Changes of items
during the period
Equity transaction
with noncontrollinginterests

13

Dividends fromsurplus(2,958)Net income

9,014

Purchase oftreasury stock
Disposal oftreasury stock

0

13

13

(2,958)(2,958)

9,014

9,014

(0)

(0)

(0)

14

15

15

Net changes of
items during theperiod

(321)

5

(7)

(12)

(335)

(12)

1,649

1,301

—

14

6,056

14

6,085

(321)

5

(7)

(12)

(335)

(12)

1,649

7,386

Balance, March 31,
2022

13,60920,063

115,030(547)

148,156

559

5

132

(266)

431

121

13,811

162,521

FY2023(Millions of yen)

Shareholders’ equity

Balance, March 31,
2022, adjusted forchanges inaccounting policies

Accumulated other comprehensive income

CapitalStock

CapitalSurplusRetainedearnings

Treasury
stock

Total
shareholders’equity13,60920,063

115,030(547)

148,156

Cumulative effects
of changes inaccounting
policies
Restated balance

Financial and Corporate Data

Total changes of items
during the period

Valuation
Deferred gains
difference on(loss) on
available-forhedges
sale securities

559

5

Foreign
Total accumulated Subscription
Remeasurements
rights tocurrency
otherof defined
sharestranslation
comprehensive
benefits planadjustment
income

132

(266)

431

121

Noncontrollinginterests

Total net
assets13,811

162,521—
13,60920,063

115,030(547)

148,156

—
559

5

132

(266)

431

121

13,811

162,521

Changes of items
during the period
Equity transaction
with noncontrollinginterests

(1)

(1)

(1)

Dividends fromsurplus(3,065)(3,065)(3,065)

Net income

7,603

7,603

7,603

(300)

(300)

(300)

15

16

16

Purchase oftreasury stock
Disposal oftreasury stock0

Net changes of
items during theperiod

113

(8)

(340)

128

(106)

(101)

954

746

Total changes of items
during the period

—

(1)

4,537

(284)

4,251

113

(8)

(340)

128

(106)

(101)

954

4,998

Balance, March 31,
2023

13,60920,062

119,567(831)

152,408

673

(2)

(207)

(138)

325

19

14,766

167,520

Valor Holdings Co., Ltd. Annual Report 2023

39

Financial and Corporate Data

Corporate Data/ Share Information(as of March 31, 2023)

Corporate Data

Share Information
Valor Holdings Co., Ltd.

Number of authorized shares

200,000,000(Changed from Valor Co., Ltd. in 1 October, 2015)

Number of outstanding shares

53,987,499

Registered head office180-1 Oi-cho, Ena-shi, Gifu 509-7201 Japan

Number of shareholders

22,794

Headquarters

661-1 Ohari-cho, Tajimi-shi, Gifu 507-0062 Japan

Stock exchange listings

Tokyo Stock Exchange Prime Market

Established

July 1958

Representative

Masami Tashiro Chairperson & CEO

Paid-in-capital¥13,609 million

Name

Nagoya Stock Exchange Premier Market

Distribution of shareholders by Type

Major Shareholders

Financial Institutions 41 shareholders
18,510 thousands of shares 34.3%

Other companies 397 shareholders
14,172 thousands of shares 26.3%

Number of Shares Percentage of *Held (Thousands) Shares Held

Shareholder

Securities companies 28 shareholders
810 thousands of shares 1.5%

Foreign entities 208 shareholders
8,764 thousands of shares 16.2%

Individuals, others 22,120 of shareholders
11,730 thousands of shares 21.7%

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

5,170

9.61

Custody Bank of Japan, Ltd. (Trust Account)

3,093

5.75

Ito Youth Scholarship Foundation

2,910

5.41

Shiunsha Co.,Ltd.

2,730

5.07

The Norinchukin Bank

2,542

4.72

The Juroku Bank

2,536

4.71

Masami Tashiro

1,389

2.58

Retail Partners Co.,Ltd.

1,260

2.34

Arcs Group Co.,Ltd.

1,260

2.34

MUFG Bank, Ltd.

1,223

2.27

Notes: Shareholders are listed by shareholder number if they hold the same number of shares.
*The percentages of total outstanding shares excluding treasury stock aredisplayed by rounding down after the three decimal points.

Stock price and trading volume
Stock price (closing price after adjustment)
(yen)
4,000

3,000

2,000
1,000

0

Volume(thousands of shares)
8,000

6,000

4,000

2,000

0
(month) 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3

2012

40

2013

2014

Valor Holdings Co., Ltd. Annual Report 2023

2015

2016

2017

2018

2019

2020

2021

2022

2023

Valor Group (As of December 31, 2023)
Segment

Subsidiaries

Supermarkets

Valor Co.,Ltd.
Tachiya Co., Ltd.
Shokusenkan-Taiyo Co.,Ltd.
Kohseiya Co.,Ltd.
Futabaya Co.,Ltd.
Sanko Co.,Ltd.
Terao Stores Inc.
Yamato Store LLC.
Yaosen Co., Ltd.
Yamata Co., Ltd.
Chubu Foods Co., Ltd.
Daien Foods Co., Ltd.

Drugstores

Chubu Yakuhin Co., Ltd.

Home Improvement Centers

Daiyu Eight Co.,Ltd.
Home Center Valor Co., Ltd.
Time Co.,Ltd.
Alleanza Japan Co.,Ltd.

Sports ClubsAXTOS Co., Ltd.

Distribution-related operations

Chubu Ryutu Co., Ltd.
Chubu Kosan Co., Ltd.
SHIGA CHUO PACK Inc.
MENTEX Co., Ltd.
Seiso Co., Ltd.
Shanghai Valor co., Ltd.
Valor Vietnam Co., Ltd.

Valor Agency Co., Ltd.
Japan Clean Services LLC
Face Co., Ltd.
Axcel Co., Ltd.
Showa Film Co., Ltd.
Unidopack Co., Ltd.

OthersAlleanza Holdings Co.,Ltd.
Home Center Valor Co., Ltd.**
Amigo Co.,Ltd.
Joker Co.,Ltd.
Agri Genki Okayama LLC

Gito Family Department Co., Ltd.
Chubu Hoken Service Co., Ltd.
Valor Max Co., Ltd.*
Valor Financial Service Co, Ltd.

Honda Suisan Co., Ltd.
Furuya Sangyo Co., Ltd.
Keirinkaku Co., Ltd.
Shiroishikandumekouzyou Co. Ltd.
Daitoh Shokken Co.,Ltd.
Shufu-no-Mise Shoji Chubu Honsha Co.,Ltd.
V-Solution Co., Ltd.
Chubu Meat Co., Ltd.
Chubu Agri Co.,Ltd.
Valor Max Co., Ltd.*VARO Co., Ltd.

Nisshiki Co.,Ltd.
Aguriru Co.,Ltd
FIRST Co., Ltd.

Financial and Corporate Data

Note: *Same company **Pet Shop BusinessHistory
1958
1969
1970
1974
1977
1984
1985
1989
1993
1995
1996
1998
1999
2001
2005
2007
2012
2013

2015
2016
2018
2019
2020
2021

2022

Established Shufu-no-Mise Co., Ltd. in Ena-shi, Gifu and opened the first supermarket.
Established Chubu Kosan Co., Ltd., a logistics subsidiary.
Changed the company name to Shufu-no-Mise Valor Co., Ltd.
Changed the company name to Valor Co., Ltd.
Relocated the headquarters from Ena- shi to Tajimi- shi, Gifu.
Established Chubu Yakuhin Co., Ltd., a drugstore subsidiary.
Established Chubu Foods Co., Ltd., a prepared food manufacturing subsidiary.
Established a distribution center in Tajimi- shi.
Started a material wholesale business for stores by Chubu Ryutu Co., Ltd.
Listed on the Second Section of the Nagoya Stock Exchange.
Merged with Fujiya Co., Ltd., a home improvement center company.
Relocated the headquarters and the distribution center to the current location in Tajimi- shi.
Established AXTOS Co., Ltd. and spun off the sports club business.
Established MENTEX Co., Ltd., a facility maintenance service subsidiary.
Established Hokuriku distribution center in Nanto- shi, Toyama.
Acquired Tachiya Co., Ltd. and Youth Co., Ltd., supermarket subsidiaries.
Assigned to the First Section of Tokyo Stock Exchange and Nagoya Stock Exchange
Acquired Sun Friend Co., Ltd (currently Syokusenkan- Taiyo Co., Ltd.), a supermarket subsidiary.
Established Hokuriku processing center for fresh meat in Nanto- shi, Toyama.
Established Kani distribution center for products stored at ambient temperatures in Kani- shi, Gifu.
Established Shizuoka integrated center in Shimada- shi, Shizuoka.
Established Kani distribution center for chilled products.
Established Ogaki processing center for fresh meat in Ogaki- shi, Gifu and Kani processing center for fresh vegetables and fruits in Kani- shi.
Made a transition to a holding company and changed the company name to Valor Holdings Co.,Ltd.
Established Nagoya Headquarters in Nakamura-ku Nagoya-shi.
Acquired Kohseiya Co., Ltd.,a supermarket subsidiary.
Acquired Futabaya Co.,Ltd., a supermarket subsidiary.
Established capital and business partnership with Arcs Co.,Ltd. and Retail Partners Co.,Ltd.
Acquired Sanko Co.,Ltd., a supermarket subsidiary.
Integrated the home improvement center business by a share exchange between Home Center Valor Co.,Ltd. and Alleanza Holdings Co.,Ltd.
Acquired Daitoh Shokken Co., Ltd. a food and seasonings manufacturing subsidiary.
Honda Suisan Co., Ltd., one of the Valor Group, merged Ishinomaki Foods Co., Ltd.
Acquired Faith Co., Ltd., a supermarket subsidiary.
Acquired Yaosen Co., Ltd., a supermarket subsidiary.
Acquired Yamata Co., Ltd., a supermarket subsidiary.
Established Valor Financial Service Co., Ltd., a facility maintenance service subsidiary.
Moved from the 1st Section to the Prime Market due to the revision to the new market classification of the Tokyo Stock Exchange.
Moved from the 1st Section to the Premier Market due to the revision to the new market classification of the Nagoya Stock Exchange.

Valor Holdings Co., Ltd. Annual Report 2023

41

“Valor” is derived from a Late Latin word meaning ‘a person of courage’.
We believe in courage as essential to fulfill our social responsibilities.

Forward Looking Statement
This report’s coverage extends beyond current
information and date for the Valor Group to futureforecasts. These forecasts represent assumptionsand viewpoint based on information available at thetime of publication. The actual results may differ
from the forecasts due to various circumstancesand external environmental factors.

Valor Holdings Co.,Ltd.
Headquarters

661-1 Ohari-cho, Tajimi-shi, Gifu 507-0062 Japan
Phone: +81-572-20-0860

For IR-related Inquires
Investor Relations & Public Relations

1957-2 Kita-tanda, Hiromi, Kani-shi, Gifu 509-0214 Japan
Phone: +81-574-60-0858

URL: https://valorholdings.co.jp/ IR Site URL: https://valorholdings.co.jp/ir/