Annual Securities Report(Report pursuant to Article 24, Paragraph 1 of the Financial Instruments and Exchange Act)The 75th Fiscal Year
(From April 1, 2022 to March 31, 2023)

Marudai Food Co., Ltd.
E00458―1―

1. This is an English translation of the Annual Securities Report (“Yukashoken
Hokokusho”) pursuant to Article 24, Paragraph 1 of the Financial Instruments andExchange Act filed via the Electronic Disclosure for Investors’ Network (“EDINET”)
system as set forth in Article 27-30-2 of the same Act. The translation includes a tableof contents and pagination that are not included in the electronic filing.
2. Appended to the back of this document are the independent auditors’ report that was
attached to the Annual Securities Report when it was filed in the aforementioned
manner, and the confirmation letter and the internal control report that were filed at thesame time as the Annual Securities Report.

―2―

Contents

Page

Annual Securities Report for the 75th Fiscal Year
Cover Page .......................................................................................................................................................... 4
Part I Company Information .............................................................................................................................. 5
I. Overview of Company................................................................................................................................ 5
1. Key financial data .............................................................................................................................. 5
2. History ............................................................................................................................................... 7
3. Description of business ...................................................................................................................... 8
4. Subsidiaries and other affiliated entities ...........................................................................................10
5. Employees .........................................................................................................................................12
II. Overview of Business ...............................................................................................................................14
1. Management policy, business environment, issues to address ..........................................................14
2. Policy and initiatives regarding sustainability ..................................................................................20
3. Business risks ....................................................................................................................................24
4. Management analysis of financial position, operating results and cash flows ..................................27
5. Material contracts, etc. ......................................................................................................................33
6. Research and development activities ................................................................................................34
III. Information about Facilities ....................................................................................................................35
1. Overview of capital expenditures......................................................................................................35
2. Major facilities ..................................................................................................................................35
3. Planned addition, retirement, and other changes of facilities ............................................................36
IV. Information about Reporting Company ...................................................................................................37
1. Company’s shares, etc. ......................................................................................................................37
2. Acquisition and disposal of treasury shares ......................................................................................40
3. Dividend policy.................................................................................................................................41
4. Corporate governance .......................................................................................................................42
V. Financial Information ...............................................................................................................................64
1. Consolidated Financial Statements, etc. ............................................................................................64
2. Non-consolidated Financial Statements, etc. ..................................................................................101
VI. Outline of Share-Related Administration of Reporting Company ........................................................ 115
VII. Reference Information of Reporting Company ................................................................................... 116
Part II Information about Reporting Company’s Guarantor, etc. .................................................................... 117

Independent Auditors’ Report

Confirmation Letter

Internal Control Report―3―

[Cover Page][Document Title]

Annual Securities Report[Clause of Stipulation]

Article 24, Paragraph 1 of the Financial Instruments and Exchange Act[Place of Filing]

Director-General, Kanto Local Finance Bureau[Filing Date]

June 29, 2023

[Fiscal Year]The 75th fiscal year (from April 1, 2022 to March 31, 2023)[Company Name]

Marudai Shokuhin Kabushiki Kaisha[Company Name in English]

Marudai Food Co., Ltd.

[Title and Name of Representative]

Yuji Sato, President and Representative Director[Address of Registered Head Office]21-3 Midori-cho, Takatsuki-shi, Osaka[Telephone Number]

072-661-2518[Name of Contact Person]

Yoshifumi Morimoto, Executive Officer, General Manager of Accounting Dept.

[Nearest Place of Contact]

21-3 Midori-cho, Takatsuki-shi, Osaka[Telephone Number]

072-661-2518[Name of Contact Person]

Yoshifumi Morimoto, Executive Officer, General Manager of Accounting Dept.

[Place for Public Inspection]

Tokyo Branch of Marudai Food Co., Ltd.
(4-7-5 Tsukiji, Chuo-ku, Tokyo)
Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo)―4―

Part I
I.

Company Information
Overview of Company

1. Key financial data
(1) Key financial data of group
Fiscal period

71st fiscal year 72nd fiscal year 73rd fiscal year 74th fiscal year 75th fiscal year

Period of accountNet sales
Ordinary profit (loss)
Profit (loss) attributable toowners of parent
Comprehensive income
Net assets
Total assets(Millions ofyen)(Millions ofyen)(Millions ofyen)(Millions ofyen)(Millions ofyen)(Millions ofyen)March 2019

March 2020

March 2021

March 2022

March 2023

243,030

245,820

223,000

218,610

221,979

2,724

3,118

180

(380)

(897)

1,463

1,653

412

(376)

(4,987)

314

(122)

3,555

(1,126)(5,438)76,09475,05677,75075,48969,014

132,626

131,854

131,342

128,903

126,261

Net assets per share(Yen)

2,971.34

2,930.66

3,036.59

2,969.87

2,731.03

Profit (loss) per share

(Yen)

57.48

65.04

16.23

(14.88)(198.77)

Diluted profit per share

(Yen)

–

–

–

–

–

Equity ratio

(%)

57.0

56.5

58.7

58.1

54.1

Return on equity

(%)

1.9

2.2

0.5

(0.5)

(7.0)

(Times)

32.7

30.1

105.2

–

–

Net cash provided by (usedin) operating activities(Millions of
yen)

6,695

8,608

7,673

7,030

2,906

Net cash provided by (usedin) investing activities(Millions ofyen)(7,534)(8,271)(5,388)(5,688)(4,516)

Net cash provided by (usedin) financing activities(Millions of
yen)

255

(219)

(2,053)(1,826)534

Cash and cash equivalents at (Millions of
end of period
yen)

8,127

8,244

8,476

7,990

6,916

Number of employees

2,023

1,938

2,107

2,066

1,967

Price earnings ratio[Average number of part-time[3,431][3,225][3,177][3,138][3,027]
employees not included in
the above numbers](Notes)1 The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31,2020) from the beginning of the 74th fiscal year. Accordingly, key financial data for the 73rd fiscal year are stated as
figures to which the above accounting standard has been retrospectively applied.
2. We have changed the method of recording distribution expenses since the 74th fiscal year. Accordingly, key financial
data for the 73rd fiscal year are stated as figures to which the new method has been retrospectively applied.
3. Diluted profit per share is not stated because there is no dilutive security.
4. Price earnings ratios for the 74th and 75th fiscal years are not stated because we recorded losses attributable toowners of parent.
5. Effective October 1, 2018, the Company conducted a one-for-five share consolidation of its common stock.
Accordingly, we have calculated profit per share on the assumption that the consolidation of shares was conducted at
the beginning of the 71st fiscal year.

―5―(2) Key financial data of reporting company
Fiscal period

71st fiscal year 72nd fiscal year 73rd fiscal year 74th fiscal year 75th fiscal year

Period of accountNet sales
Ordinary profit (loss)
Profit (loss)
Share capital
Total number of issued shares(Millions ofyen)(Millions ofyen)(Millions ofyen)(Millions ofyen)(Shares)(Millions ofyen)(Millions ofyen)

Net assets
Total assets

March 2019

March 2020

March 2021

March 2022

March 2023

164,746

165,846

151,801

139,319

135,000

399

1,443

864

26

(2,042)

459

1,166

579

204

(4,119)

6,716

6,716

6,716

6,716

6,716

26,505,581

26,505,581

26,505,581

26,505,581

26,505,581

66,79865,59967,461

65,61960,360105,609104,365

105,149

103,108

101,023

Net assets per share(Yen)

2,626.24

2,580.18

2,655.69

2,604.31

2,412.42

Dividends per share

(Yen)

35.00

35.00

30.00

30.00

20.00

(–)

(–)

(–)

(–)

(–)

(Of the above, interim
dividends per share)
Profit (loss) per share

(Yen)

18.05

45.88

22.79

8.11

(164.15)

Diluted profit per share

(Yen)

–

–

–

–

–

Equity ratio

(%)

63.3

62.9

64.2

63.6

59.7

Return on equity

(%)

0.7

1.8

0.9

0.3

(6.5)

(Times)

104.2

42.6

75.1

182.6

–

(%)

193.9

76.3

131.2

369.9

–

Number of employees

1,004

915

875

784

689

[Average number of part-time
employees not included in theabove numbers]

[859]

[795]

[767]

[778]

[718]

Price earnings ratio
Dividend payout ratio

Total shareholder return

(%)

74.7

78.9

70.8

62.8

62.5

(Comparison index: TOPIX
total return index)(%)(95.0)(85.9)(122.1)(124.6)(131.8)

(Yen)

2,327
(545)

2,474

2,130

1,836

1,608

Highest share price

1,605
1,495
1,625
1,409
1,376
(424)
The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31,2020) from the beginning of the 74th fiscal year. Accordingly, key financial data for the 73rd fiscal year are stated as
figures to which the above accounting standard has been retrospectively applied.
We have changed the method of recording distribution expenses since the 74th fiscal year. Accordingly, key financial
data for the 73rd fiscal year are stated as figures to which the new method has been retrospectively applied.
Diluted profit per share is not stated because there is no dilutive security.
Price earnings ratio and dividend payout ratio for the 75th fiscal year are not stated because we recorded loss.
The highest and lowest share prices on and before April 3, 2022 refer to those at the First Section of the Tokyo Stock
Exchange, and the highest and lowest on and after April 4, 2022 refer to those at the Prime Market of the same
Exchange. The share prices for the 71st fiscal year refer to the highest and lowest after the share consolidation, withthe figures in brackets “( )” showing the highest and lowest before the consolidation.
Effective October 1, 2018, the Company conducted a one-for-five share consolidation of its common stock.
Accordingly, we have calculated profit per share on the assumption that the consolidation of shares was conducted at
the beginning of the 71st fiscal year.

Lowest share price(Notes)

1.

2.
3.
4.
5.

6.

(Yen)

―6―

2. History
Since the Company conducted a merger to change its par value, its founding date has been officially registered as February 8,1950, which is the founding date of former Marudai Food Shoji K.K. Meanwhile, the founding date of the de facto existing
company, former Marudai Food Co., Ltd., is June 10, 1958.
Month/Year
October 1954
June 1958

Overview
The late Mr. Toshiyuki Komori founded a company engaging in manufacturing and sale of fish ham andsausages in Fukushima-ku, Osaka-shi, and named it the Marudai Food Factory.
Moved the factory to Oyodo-ku, Osaka-shi and incorporated it under the trade name of Marudai Food Co.,Ltd.

September 1961

Began manufacturing and selling meat ham and sausages.

January 1963

Merged by Marudai Food Shoji K.K. to change the par value from 500 yen to 50 yen.

February 1963

Renamed Marudai Food Co., Ltd. after the merger.

April 1963

Established the Tokyo Branch Office in Chuo-ku, Tokyo.

June 1963

Listed in the Second Section of the Osaka Securities Exchange.

June 1964

Established the Takatsuki Plant in Takatsuki-shi, Osaka.

May 1965

Moved the head office from Oyodo-ku, Osaka-shi to Takatsuki-shi, Osaka.

September 1968

Listed in the Second Section of the Tokyo Stock Exchange.

October 1969

Established the Kanto Plant in Ishibashi-machi (present Shimotsuke-shi), Tochigi Prefecture.

October 1970

Established the Karatsu Plant in Karatsu-shi, Saga Prefecture.

November 1971

Established the Niigata Plant in Ogata-machi (present Joetsu-shi), Niigata Prefecture.

September 1972

Designated to be listed in the First Sections of the Tokyo Stock Exchange and the Osaka Securities
Exchange.

November 1976

Established the Hiroshima Plant in Miyoshi-shi, Hiroshima Prefecture.

March 1978

Moved the Tokyo Branch Office to Minato-ku, Tokyo.

September 1978

Established the Second Matsusaka Plant (present Matsusaka Plant) in Matsusaka-shi, Mie Prefecture.

November 1978

Listed on the Frankfurt Stock Exchange.

October 1981

Established the Iwate Plant in Ishidoriya-cho (present Hanamaki-shi), Iwate Prefecture.

June 1989

Established the Shizuoka Plant in Kakegawa-shi, Shizuoka Prefecture.

April 1994

Established the Yokosuka Plant in Yokosuka-shi, Kanagawa Prefecture.

March 2004

Moved the Tokyo Branch Office to Chuo-ku, Tokyo.

April 2009

October 2009
October 2011
July 2020
April 2022

Marudai Meat Kanto Co., Ltd., one of the Company’s subsidiaries, merged Marudai Meat Kansai Co., Ltd.
and four other companies to be incorporated as Marudai Meat Co., Ltd., which is now one of theCompany’s consolidated subsidiaries.
Marudaifood West Japan Co., Ltd., one of the Company’s subsidiaries, merged Marudaifood East Japan
Co., Ltd. and Marudaifood Tokai Co., Ltd. to be incorporated as Marudaifood Co., Ltd., which is now oneof the Company’s consolidated subsidiaries.
Acquired Marushin Foods Co., Ltd., headquartered in Chuo-ku, Tokyo, which is now one of theCompany’s consolidated subsidiaries.
Acquired Toraku Foods Co., Ltd., headquartered in Kobe-shi, Hyogo Prefecture, which is now one of theCompany’s consolidated subsidiaries.
Transitioned from the First Section of the Tokyo Stock Exchange to the Prime Market of the same
Exchange.

―7―

3. Description of business
The Group, comprising Marudai Food Co., Ltd. (the Company) and its 26 consolidated subsidiaries and one associated company,
mainly engages in the Processed Food Products operations and the Meat Products operations. In connection with these operations,
it also offers insurance agency services and other services.
The below explains how the Company is linked with its consolidated subsidiaries and associated company. The following
categories are consistent with the business segments.
Processed Food Products operations
Manufacture and sell ham, sausages, and precooked and processed food products at the Company as well as at Toda Foods Co.,
Ltd., Azumino Food Co., Ltd., and Toraku Foods Co., Ltd., among others.
Meat Products operations
Process and sell meat (beef, pork, chicken, etc.) at the Company as well as at Marudai Meat Co., Ltd., Marudaifood Co., Ltd.,and Meat Supply Co., Ltd., among others.
Other
Marudai Service Co., Ltd. offers insurance agency services and other services.

―8―

The diagram below illustrates the businesses of the Group―9―

4. Subsidiaries and other affiliated entities
As of March 31, 2023

Company name

Address

Share capitalor investments
in capital(Millions ofyen)

Relationship
Description ofprincipal business

Ratio of Number ofvotingconcurrent
LoansrightsDirectors/S (Millions ofholding (%) tatutoryyen)
Auditors

Operationaltransactions

Lease offacilities(Consolidated subsidiaries)
Hokkaido Marudai Food
Co., Ltd.
Tohoku Marudai Food Co.,Ltd.
Shin-etsu Marudai Food
Co., Ltd.
Chubu Marudai Food Co.,Ltd.
Chu-Shikoku Marudai Food
Co., Ltd.
Kyushu Marudai Food Co.,Ltd.

Iwamizawa-shi,
Hokkaido
Hanamaki-shi, Iwate
Prefecture
Joetsu-shi, Niigata
Prefecture
Matsusaka-shi, Mie
Prefecture
Miyoshi-shi,
Hiroshima Prefecture
Karatsu-shi, Saga
Prefecture

Toda Foods Co., Ltd.

Toda-shi, Saitama
Prefecture

349

Azumino Food Co., Ltd.

Matsumoto-shi,
Nagano Prefecture

Toraku Foods Co., Ltd.

Processed Food
Products operations
Processed Food
Products operations
Processed Food
Products operations
Processed Food
Products operations
Processed Food
Products operations
Processed Food
Products operations

100.0

–

–

100.0

–

–

100.0

–

–

100.0

–

–

100.0

–

–

100.0

–

–

Processed Food
Products operations

100.0(11.7)

1

2,695

495

Processed Food
Products operations

100.0

1

1,300

Higashinada-ku,
Kobe-shi, Hyogo
Prefecture

90

Processed Food
Products operations

100.0

1

400

Marushin Foods Co., Ltd.

Moka-shi, Tochigi
Prefecture

100

Processed Food
Products operations

100.0

1

–

Pioneer Foods Co., Ltd.
(Note 5)

Kyogoku-cho, Abutagun, Hokkaido

360

Processed Food
Products operations

63.1

2

–

Umeya Co., Ltd.

Tanabe-shi,
Wakayama
Prefecture

37

Processed Food
Products operations

92.7

1

–

Yahata Food Co., Ltd. (Note Kan-onji-shi,
5)
Kagawa Prefecture

50

Processed Food
Products operations

100.0

1

330

Hornmeier Co., Ltd.

Takatsuki-Shi, Osaka

340

100.0

–

771

Marudaifood Co., Ltd.

Nishinari-ku, Osakashi

80

100.0

1

Marudaifood Supply Co.,Ltd.

Koto-ku, Tokyo

90

100.0

1

Marudai Meat Co., Ltd.
(Notes 3 and 6)

Ota-ku, Tokyo

30

Meat Products
operations

100.0

–

Meat Supply Co., Ltd.

Takatsuki-Shi, Osaka

30

Meat Products
operations

100.0

–

742

Marbest Trading Co., Ltd.
(Note 3)

Takatsuki-Shi, Osaka

20

Meat Products
operations

100.0

–

–

Marudai Service Co., Ltd.

Takatsuki-Shi, Osaka

95

Other

100.0

1

487

Lop Buri, theKingdom of Thailand

thousandbaht
330,000

Processed Food
Products operations

20.0

–

–

10
10
10
10
10
10

Processed Food
Products operations
Processed Food
Products operations
Meat Products
operations
Processed Food
Products operations
Meat Products
operations

–

200

–

Contract
manufacturing
Contract
manufacturing
Contract
manufacturing
Contract
manufacturing
Contract
manufacturing
Contract
manufacturing
Purchasing
processed foods,
among otheroperations
Purchasing
processed foods,
among otheroperations
Purchasing
processed foods,
among otheroperations
Purchasing
processed foods,
among otheroperations
Purchasing
processed foods,
among otheroperations
Purchasing
processed foods,
among otheroperations
Purchasing
processed foods,
among otheroperations
Contracting sale ofprocessed foods
Selling processed
foods and meatproducts, among
other operations
Selling processed
foods and meatproducts, among
other operations
Selling meatproducts, among
other operations
Supplying raw
materials, among
other operations
Purchasing meat,among otheroperations
Offering insurance
agency services,among otherservices

No
No
No
No
No
No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

And six other companies(Associate accounted forusing equity method)
Betagro MF Deli Co., Ltd.

(Notes)Purchasing
processed foods

No

1. Names of the operations in “Description of principal business” are the same as those stated in the segment
information.
2. The ratio of voting rights holding indirectly is shown in parentheses “( )” in “Ratio of voting rights holding.”
3. These companies with (Note 3) fall under the category of specified subsidiaries.
4. None of the above companies have filed Securities Registration Statements or Annual Securities Reports.
5. The Company guarantees the loans to these companies with (Note 5).

―10―6. Net sales of Marudai Meat Co., Ltd. (excluding inter-segment net sales among consolidated subsidiaries) accounted
for more than 10% of consolidated net sales.
Key profit/loss information:(1) Net sales
38,773 million yen(2) Ordinary profit

167 million yen(3) Profit

93 million yen(4) Net assets

942 million yen(5) Total assets

4,986 million yen―11―5. Employees(1) Information about group
As of March 31, 2023
Name of business segment

Number of employees

1,444(2,621)
422
Meat Products operations
(358)
18
Other
(26)
83
Company-wide (shared)
(22)
1,967
Total
(3,027)(Notes)1. The number of employees refers to that of full-time employees, excluding those transferred to companies outside theGroup.
2. The average number of temporary employees during the current fiscal year is shown in parentheses “( )” in “Numberof employees.”
Processed Food Products operations(2) Information about Reporting Company
Number of employees

Average length of service(Years)Average age (Years old)

689
(718)

43.4

As of March 31, 2023
Average annual salary(Thousands of yen)

20.5

Name of business segment

5,974

Number of employees

590
(689)
16
Meat Products operations
(7)
–
Other
(–)
83
Company-wide (shared)
(22)
689
Total
(718)
(Notes)1. The number of employees refers to that of full-time employees, excluding those transferred from the Company toother companies, but including those transferred to the Company from other companies.
2. Average annual salary includes bonuses and non-standard wages.
3. The average number of temporary employees during the current fiscal year is shown in parentheses “( )” in “Numberof employees.”
4. The number of employees fell by 95 from the previous fiscal year mainly through attrition due to retirement.
Processed Food Products operations(3) Status of labor union
The labor union of the Company and part of its consolidated subsidiaries is named the Federation of Marudai Food Group
Labor Unions and belongs to UA Zensen. The relationship between management and labor union is stable, without any special
issues to mention.
(4) Percentages of female managers among all managers and male workers taking childcare leave, and salary difference between
men and women
1) Reporting company
Current fiscal year
Percentage of female managers Percentage of male workers
among all managers (%)
taking childcare leave (%)(Note 1)
(Note 2)
4.1
(Notes)Salary difference between men and women (%)(Notes 1 and 4)
Part-timers and
All workers
Full-time employees
temporary workers

20.0

49.1

72.6

91.8

1. The figure above is calculated based on the provisions of “Act on the Promotion of Women's Active Engagement inProfessional Life” (Act No. 64 of 2015).
2. In accordance with “Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers
Caring for Children or Other Family Members” (Act No. 76 of 1991), we calculated the percentage of male workers
taking the childcare leave, etc. stipulated in Article 71-4, Item 1 of “Ordinance for Enforcement of the Act onChildcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other
Family Members” (Ordinance of the Ministry of Labor No. 25 of 1991).

―12―

3. All the figures above include employees transferred to consolidated subsidiaries.
4. Regarding “Salary difference between men and women,” we have no personnel or salary systems that differentiate
between men and women. The salary difference above is mainly attributable to the fact that most of our female
workers are part-timers, whose work time is shorter.
2)

Consolidated subsidiaries
Current fiscal year

Company name

Percentage of female
Percentage of malemanagers among all workers taking childcare
managers (%) (Note 1)
leave (%) (Note 2)

Salary difference between men and women (%)(Notes 1 and 4)
All workers

Full-time
employees

Part-timers andtemporaryworkers

Toda Foods Co., Ltd.

6.1

0

82.6

79.4

99.2

Meat Supply Co., Ltd.

0

100.0

75.2

83.9

84.7

Marudaifood Co., Ltd.

0

50.0

43.0

77.4

98.8

(Notes)1. The figure above is calculated based on the provisions of “Act on the Promotion of Women's Active Engagement inProfessional Life” (Act No. 64 of 2015).
2. In accordance with “Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers
Caring for Children or Other Family Members” (Act No. 76 of 1991), we calculated the percentage of male workers
taking the childcare leave, etc. stipulated in Article 71-4, Item 1 of “Ordinance for Enforcement of the Act onChildcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other
Family Members” (Ordinance of the Ministry of Labor No. 25 of 1991).
3. As we have already included employees transferred from the Company to consolidated subsidiaries in the figures for
1) Reporting company, the figures above exclude them.
4. Regarding “Salary difference between men and women,” we have no personnel or salary systems that differentiate
between men and women. The salary difference above is mainly attributable to the fact that most of our female
workers are part-timers, whose work time is shorter.

―13―

II.

Overview of Business

1. Management policy, business environment, issues to address
The forward-looking statements included in the following description are based on our judgment as of March 31, 2023.
(1) Basic management policy
1)

The Company’s credo:

Sincerity can move heaven[What does this mean?]In your life, bad things can happen suddenly, but you can never obtain excellent results outof the blue. If you plow ahead focusing on your duty and persevering in your efforts every
day, Heaven will then notice your sincerity and bring you great results.
(The words by Mr. Toshiyuki Komori, the founding president)

2)Management philosophy:

3)

Management policy and vision:

4)

Slogan:5)

Values:

We will contribute to society by devoting ourselves to daily operations and actingwith complete sincerity.
Pursuing more delicious food and healthier life, the Marudai Food Group offers
safe food products to make consumers’ diet more enjoyable.

Innovation- We will make delicious food products to please consumers.
- We will make our company a place where we can freely dream of our future and obtainhigh job satisfaction.
- We will create new values in response to trends as times change.

6)

Conduct policy:

Toward consumers:

We will continue to make our products safer and better.
We will make our consumers’ diet healthier and more enjoyable.

Toward shareholders:
Toward employees:

We will strengthen our management foundation and expand ouroperations with the aim of enhancing the corporate value.
We will create a workplace where employees can develop
themselves through daily operations.
We will pursue the happiness of employees and their families.

Toward society:(2)

We will fulfill our social responsibilities by contributing to our
local communities and protecting the environment.

Management environment
Japan has been facing the issue of a dwindling population, and we have seen various relevant changes affecting management
environment of the Group. Management environment surrounding the Group is as follows:
1)

2)
3)
4)
5)

Decreases in Japan’s total population and working-age population, its declining birthrate and rapidly aging population- Needs to raise minimum wages as the jobs-to-applicants ratio remains high; how to respond to the demand for equal
work, equal pay
Saturated processed food market in terms of volume, or rather a shrinking trend of the market- Fiercer competition in price and other aspects among food manufacturers
Increases in dual-income households and the ratio of women in the working-age population- Changes in lifestyles and consumption behavior
Expansion of e-commerce, rapidly advancing drug stores- An increase in logistics costs, a wider consumer trend toward lower-priced goods
Animal epidemics both in Japan and abroad, U.S.-China trade friction, and growing geopolitical risks- A rise in the raw material prices for meat production, among others, and unstable market prices

Since the processed food market, particularly the ham and sausage market, has been saturated, which is the Group’s coresegment, competition among food manufacturers is growing fiercer. The management environment remains severe, as we arefacing concerns not only over surging costs for raw materials, energy, logistics, etc. but also over a labor shortage and rising
personnel expenses caused by a drop in the working-age population.

―14―

(3)

Operational and financial issues we must address as soon as possible
The management environment surrounding the Company in the future is still expected to remain uncertain despite hopes that
economic activities will go back to normal amid the easing of COVID-19-induced restrictions on activities. This uncertainty
arises from a change in the market environment caused by, among others, Japan’s shrinking markets on the back of a decrease
in its population resulting from its dwindling and aging population with the falling birthrate, and also caused by diversified
consumer values. Another factor for the uncertainty is based on the assumption that we will likely face increasingly fierce pricecompetition with competitors due to consumers’ increasing budget-consciousness amid price hikes.
Our industry is required to respond to changes in consumer behavior and market structures, as higher costs for raw materials
and energy strain corporate earnings and have an enormous impact on consumer prices. At the same time, companies are also
required to play increasingly important roles and bear heavier responsibilities than before on the back of the growing social
interest in the food safety, as well as in how to respond to climate and environmental issues, social issues in terms of humanrights and working conditions, and the needs for sustainable procurement, among other factors.
To flexibly respond to these changes in the management environment, the Marudai Food Group announced a 3-year
medium-term rolling plan starting in April 2023, a numerical plan which we review every year in principle. By implementing
this plan, we aim to be a company whose own value is thoroughly recognized in society. The plan has five basic policies:
creation of new customer value, reform in earnings structure, expansion of business domains, development of human resources,
and contribution to a sustainable society. Based on these, we will strive to grow sustainably and enhance our corporate value.

(4)

Medium-term management strategy (the revised 3-Year Medium-Term Management Plan)
The revised 3-Year Medium-Term Management Plan starting on April 1, 2023 through March 31, 2026 stipulates its basic
policy as follows:
1) Creation of new customer value
To differentiate and centralize our products and reduce costs as part of our value-added policy, we will carry out themarketing mix that takes into consideration products, prices, locations, and sales promotion from the consumer perspective.
By doing so, we will develop more attractive products. We will also improve our production technology and make full use of
new manufacturing methods and novel materials while stepping up our efforts to improve quality.
2) Reform in earnings structure
We will implement a policy for improving productivity and cost competitiveness in all departments. The selling department
will continue reform to change the mindset toward profitability by displaying profitability data when selling products. The
manufacturing department will aim to reduce manufacturing costs through a further reform and also go ahead with logistics
reform by reviewing and analyzing logistics costs.
3) Expansion of business domains
We will evolve the Group’s management further to address environmental changes and also try to tap growing markets tolaunch new product categories in response to changes in the social environment.
4) Development of human resources
We will reform our personnel system to become a company that can adapt to diversified work styles and provide our
employees with high job satisfaction. Our goal is to develop talent who will lead the Company in the future in accordancewith career plans.
5) Contribution to a sustainable society
We will promote sustainable management to enhance our social credibility including our sustainable growth and mediumterm earnings. To do so, we will strengthen our corporate governance and risk management, as well as improve our productquality by obtaining more FSSC 22000 certifications. We will work on initiatives to address environment, social, andgovernance (ESG) issues and achieve the United Nation’s Sustainable Development Goals (SDGs), among others, so that we
can fulfill our social responsibilities.

―15―

(5)
1)

Growth strategy
Overview
Creation of new customer value(A)

Reform marketing process- Make use of consulting service and strengthen internal collaboration(B)

Develop products from the consumer perspective with the focus on value- Develop product brands by each Group company and department

A. Transformation in marketing- Strengthen communication with consumers(C)

Get more people to understand our attractiveness- Actively issue news releases and engage in strategic public relations
activities(A)

Promote obtaining a certification for the Food Safety Management System(B)

Pursue deliciousness by making full use of new manufacturing methods
and novel materials(C)

Strengthen the Group’s entire quality management system(D)

Create a system that makes the most use of consumers’ comments andsuggestions

B. Initiatives to improve quality

Reform in earnings structure
C. Reorganization of production
bases

D. Improvement of profitabilityof unprofitable operations(A)

Reduce fixed costs by adjusting production capacities(A)

Improve profitability of unprofitable operations- Promote selection and concentration by operation(B)

Improve profitability of unprofitable products- Promote integration, discontinuance, or remodeling of products, among
other improvement activities.

(A)

Integrate logistics bases

E. Reduction of logistics costs- Decrease logistics bases from 13 to 8
(A)

Increase operational efficiency by making full use of digital tools(B)

Automate routine operations(C)

Reduce manufacturing loss

(D)

Review logistics and purchasing processes

F. Operational reform

Expansion of business domains

G. Expansion of businesses of
the Group companies(A)

Expand the sales territory covered by the companies selling meat

(B)

Scale up by investing resources in growing businesses(C)

Develop businesses with an eye on the post-COVID era(D)Expand the department for commercial food products- Strengthen sales of commercial food products to restaurants, school
meals, delicatessen counters at supermarkets, etc.

(A)

Increase sales of the products made from vegetables- Increase the number of items we sell by bolstering product development

H. Foray into growing markets(B)

Increase sales of health foods- Expand the operational scale both in Japan and overseas

―16―

2)

Strategy by category
Aiming to create products that can satisfy consumer needs, we will create a new format that can provide a lineup designed
from the consumer perspective and that can respond to diverse eating needs. We will then develop new materials andmanufacturing processes, too. Aiming at high productivity based on reduced costs, we will go ahead with efficient capital
expenditure and improvement initiatives.
The below shows each segment’s strategy by category.

A. Processed Food Products operations(A) The Ham & Sausage Products department[Product policy]- Make new value appealinga. Improve added value- Reflect consumer demand to improve productsb. Scale up sales of mainstay
products
c. Nurture products to newly workon

- Develop new products using raw materials with distinctive
features- Develop a series lineup from a regular item
- Ally with other manufacturers- Create a new category[Specific strategies]- Bolster product development- Review our earnings base and manage profits by channel- Strengthen our local sales capabilities by area and streamline operations- Implement the marketing mix to address diverse consumer needs- Develop products that pursue new value by using healthy, nutritious ingredients- Promote collaboration with other companies- Strengthen gift products by launching a new series(B)

The Precooked & Processed Foods department[Product policy]a. Sell with a focus on growing
markets- Increase sales of retort foods- Make full use of topping lines- Reduce the amount of the plastic packaging materials usedb. Reduce environmental footprint- Reduce food waste- Increase sales of the products made from vegetables
c. Tap new business domains- Introduce precooked products to accompany rice
[Specific strategies]- Increase soup items such as retort-pouch instant curries and “Sundubu,” our mainstay products- Propose new items by further developing precooked and processed food products- Improve our techniques in processing the products made from vegetables / Increase production
capacities- Increase channels through convenience stores as well as restaurants, bars, etc.
- Increase the lineup of cold chain products, which can keep for a long time and excel inconvenience- Augment facilities for whipped-cream lines- Increase sales of next generation’s meat substitutes made from vegetables, targeting healthconscious consumers- Increase sales of value-added products that have grilled or fried materials containing ham andsausages- Scale up the size of, and strengthen the foundation of, the Group companies by launching new
businesses and through mergers and acquisitions- Stimulate marketing activities- Actively work to reduce food waste and environmental footprint―17―

B. Meat Products operations[Strengthening of capabilities to procure raw materials]
a. Procure the raw materials that
could differentiate us from- Strengthen the relationship with suppliers
competitors
b. Import processed food products- Respond to reduced or lifted tariffs
from overseas
c. Respond to changes in theexternal environment- Respond to consumer health awareness- Procure the raw materials with low environmental
footprint[Specific strategies]- Establish our value chain to focus on handling our own original brands and reduce costs- Strengthen the meat processing business, which handles pre-pack products and sliced meatproducts- Expand the export and import business of processed food products- Strengthen the foundation of the Group companies- Focus on sales of the products for the restaurant industry- Expand our business areas

(6)
1)

2)

Initiatives for sustainability
Development of human resources
A. Acquire the organizational capabilities that give us a competitive advantage- Develop junior employees (expand the scale of grade-specific training courses for the junior, and pick out young andmid-grade employees for key posts)- Develop the personnel who could be candidates for leading positions in the next generation (through training courses
for those selected as potential candidates for management and executive positions)- Strengthen the management of personnel training programs with a focus on diverse values and specialties (design asystem for specialist jobs with dual-ladder career paths considered)
B. Respond to a labor shortage caused by diversified recruiting channels and intensified recruiting competition- Promote the work style reform- Provide a diverse choice of work styles
Scale up the region-specific employment system and increase the use of teleworking and flexible hours- Promote diversity and launch an initiative to enhance opportunities for women- Expanded the provision of support for employees with children so that they can continue to work while raisingchildren, and obtained the certification under the Regulation for Enforcement of the Act to Advance Measures to
Support Next-Generation Child-Rearing, or the Kurumin certification program
C. Strengthen health management- Enhance a system that provides stress checkups and monitors mental health conditions- Address an issue of a dwindling and aging population
Research and development of plasmalogen, a material that can support the brain function
Contribution to a sustainable society
A. Strengthening of our corporate governance system- Establish committees to enhance objectivity and transparency concerning corporate management
The Compliance Committee (chaired by an Independent Outside Director), the Nomination and Remuneration
Committee (with a majority of Independent Outside Directors)- Make all the employees of the Group thoroughly understand the Marudai Food Group’s Code of Conduct, and carryout a compliance training program every month―18―

B. Initiatives to address ESG and SDGs
We formulated the Sustainability Basic Policy and Action Guidelines and established the Sustainability Committee.
(A) Adaptation to climate change and mitigation of its impact- Take measures in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations- Newly established the Sustainability Promotion Office as of April 1, 2023 to manage and promote the Sustainability
Committee- Further reduce the environmental impact by promoting the activities to preserve the environment and introducing thefacility using less energy, among other measures- Strengthen our efforts to reduce the greenhouse gasses generated by logistics or transportation by encouraging thetransport modal shift, etc.
(B) Contribution to realizing a recycling society- Promote the reduction of waste by using lightweight wrapping and packaging materials- Promote a 3R strategy—Reduce, Reuse, and Recycle—for wrapping and packaging materials- Promote the recycling of food waste into livestock feed or manure- Promote the adoption of environment-friendly wrapping and packaging materials(C) Initiatives to reduce food waste- Promote the reduction and reuse of food waste- Promote dietary education(D) Aid for poverty and hunger- Provide support for children’s cafeterias (by supplying food products)- Develop products using meat substitutes made from vegetables (the PlantRECIPE series)(7)

Impact of the COVID-19 pandemic and our response
The food industry sees its economic activities recovering thanks to the easing of restrictions imposed due to the COVID-19
pandemic. Despite this situation, the industry forecasts that while competition among food manufacturers is growing fiercer
due to consumers’ increasing tendency to become budget-conscious driven by their concerns over uncertain future, consumers
and the market are pushing the manufacturers to work harder to produce safer and healthier products.
On the other hand, the environment is still expected to remain uncertain, as we will likely to see continued higher costs for
raw materials, energy, and logistics on the back of increasing geopolitical risks. Such higher costs will then dampen consumer
sentiment and make households budget-conscious, affecting private consumption.
The Group will go ahead with each segment’s strategy by category in accordance with the revised 3-Year Medium-Term
Management Plan for a period from April 1, 2023 through March 31, 2026. At the same time, we will execute our social
mission and fulfill our responsibilities to each of our stakeholders by appropriately responding to the economic trend andprivate consumption in the post-COVID era.

(8)

Objective financial data to determine achievement status of management targets
To flexibly respond to changes in the management environment, the Marudai Food Group announces a 3-year medium-termrolling plan, a numerical plan which we review every year in principle. This time, we formulated a revised 3-Year MediumTerm Management Plan for a period from April 1, 2023 through March 31, 2026 after recalculating and reviewing numericaltargets.
We have set the target of achieving consolidated net sales of 245,000 million yen, consolidated operating profit margin of
1.4%, and consolidated operating profit of 3,500 million yen as our financial data for the fiscal year ending March 31, 2026, thefinal year of the said Management Plan.
We expect our consolidated earnings performance for the fiscal year ending March 31, 2024 to be as follows: net sales of
227,000 million yen, operating profit margin of 0.7%, and operating profit of 1,500 million yen. This estimation is based on ourpresumption that—even amid the prolonged severe management environment due mainly to higher costs for raw materials andenergy which could not be offset by price revisions—we will see a sign of recovery of the demand from the restaurant industry
for commercial food products and will also see more acceptance of price revisions. Meanwhile, we are also facing the risk of adownturn in the economy due to limitation in supply, higher costs for raw materials and energy, and fluctuations in financial
capital markets, against the background of concerns over the prolonged war in Ukraine, among others. Since earnings outlook
is based on our estimation of the impacts deemed possible when we made this estimation, we may need to announce revisions
depending on the development of the situation.

―19―

2.

Policy and initiatives regarding sustainability
The following is the Group’s policy and initiatives regarding sustainability.
The forward-looking statements included in the following description are based on our judgment as of March 31, 2023.

Corporate governance

Strategy

Risk management

Indicators and targets- Conduct our activities in accordance with the Sustainability Basic Policy and the Sustainability
Action Guidelines.
- Regularly report details and progress of our activities to the Board of Directors through the
Sustainability Committee, chaired by President and Representative Director, in efforts to realize oursustainable growth and enhance corporate value.
- Newly established the Sustainability Promotion Office as of April 1, 2023 to promote sustainability
activities by assessing the status of each operating department and Group company.
(1) Climate change- Make an evaluation of financial impact on our products produced at our own plants. To do so,
define scenarios for the scenario analysis and identify the risks and opportunities that may result
from climate change, in accordance with TCFD recommendations.
- Based on the evaluation, examine which measures we need to prioritize for the risks andopportunities that may affect us and the environment in the future, with their financial impact
considered, and make a necessary budget to promote the measures.
(2) Human capital and diversity- To ensure diversity, create an environment where women can thrive further, strengthen a support
system, hold educational programs that encourage reskilling, and employ personnel with diverse
values and specialties in line with our business strategies, as needed.
- For the Marudai Food Group’s continued and permanent business operations, provide training
courses for those selected as potential candidates for management in the next generation toensure the securing of successors in a stable manner.
- To enhance our employees’ wellbeing so that they are sound in mind and body, introduce highly
flexible working patterns; and, to promote enhanced health management, strengthen a system tomonitor their health and facilitate the creation of a working environment where they feel
comfortable.
- The Sustainability Promotion Office ensures the implementation of a PDCA cycle as follows:
monitors the sustainability information; reports gathered information to the Board of Directors
through the Sustainability Committee; and takes stricter measures for any risks or concerns.
(1) Climate change- The fiscal year ending March 31, 2031: Reduce greenhouse gas emissions (Scope 1 and 2) by
46% or more compared to the fiscal year ended March 31, 2014
- The fiscal year ending March 31, 2031: Reuse 95% of our food waste(2) Human capital and diversity- Increase the percentage of female mangers among all managers from 4.1% (actual figure) in thefiscal year ended March 31, 2023 to 10% or more (target) in the fiscal year ending March 31,
2033[Initiatives for sustainability]
We make an analysis and disclosure in accordance with the framework recommended by TCFD, which was established by the
Financial Stability Board (FSB) upon request from the Group of 20 economies (G20).
During a period from May 2022 to November 2022, we conducted a climate change scenario analysis as part of a crossdepartmental project (*) with the Corporate Strategy Office acting as secretariat. Targeting the products that could be enormously
affected by climate change out of those produced at our own plants under the Processed Food Products operations and the Meat
Products operations, this analysis evaluated how significant the risks and opportunities resulting from climate change could be. We
also formulated 1.5°C and 4°C scenarios for 2030 this time based on our definition of the medium-term as 2030 and the long-term
as 2050, and evaluated what impact both scenarios could have.
(*) Participated in by the following departments and offices: Corporate Strategy, General Affairs, Marketing, Sales, Production,
Facilities, Materials, Ingredients, and Logistics―20―

(1) Future world views in accordance with 1.5°C and 4°C scenarios
For scenario analysis, we defined the following two scenarios:
2030: 1.5°C scenario (SSP1-1.9)

2030: 4°C scenario (SSP5-8.5)

As a result of earnest efforts to reduce greenhouse gasses, thecosts incurred by us will rise as we need to take measures inline with strengthened restrictions, including the introductionof a carbon tax, as well as with a drive to reduce greenhousegasses. Meanwhile, we will enjoy a business opportunity as
we make progress in development of the products made fromvegetables, among others, which will then receive a highevaluation from markets.

The policy aimed at reducing greenhouse gasses will havebeen launched but stalled, and the cost for addressing theclimate change will be lowered, but raw material prices will
surge and the risk for natural disaster-induced flood damage
will rise amid worsening climate change.

(2) Evaluation of risks and opportunities resulting from climate change, and of financial impact
Regarding each of the 1.5°C and 4°C scenarios explained in “(1) Future world views in accordance with 1.5°C and 4°C
scenarios,” we evaluated the significance of risks and opportunities as part of a cross-departmental project in accordance with ascale of three grades: Large, Medium, and Small, in terms of how likely it is for such risks and opportunities to happen and how
much impact they could have. As a result, we identified following items:
ImpactItem

Transition risks

Physical risks

Opportunities

Details
1.5°C

4°C

Increased costs for taking measures to comply with environmental restrictions

Large

Large

Increased costs for procuring raw materials due to the introduction of a carbon
tax

Large

Small

Increased costs for energy due to the introduction of a carbon tax

Large

Small

Large

Small

Medium

Small

Large

Large

MediumMedium

Large

Small

Large

Small

MediumSmall

Decreased net sales due to delay in catching up with changes in consumers’
preference
A negative impact on fundraising and suppliers’ choice of products due to delay
in taking measures against climate change
Increased costs for raw material prices, among others, due to higher
temperatures
A negative impact on our operations due to the flood damage or delay inlogistics caused by natural disaster
Reduced costs by improving the logistics efficiency as part of our carbon
reduction efforts
More stable fundraising thanks to enhanced social reputation achieved by our
measures against climate change
New markets created through our development of meat substitutes made fromvegetables, long-life products, and low-carbon footprint products―21―

(3) Initiatives to reduce greenhouse gas emissions
We are working on the following items.
Item

Details
Reduce the amount of the plastic packaging materials used
Work on initiatives to reduce food waste
Procure the raw materials with low environmental footprint
Endorse Fun to Share, a campaign by the Ministry of the Environment to address climate change
Implement the Cool Biz and Warm Biz campaigns

Reduction ofenvironmental
footprint

Use environment-friendly materials for sales at stores and for other purposes
Introduce a cogeneration system
Work on the transport modal shift
Engage in an environmental conservation activity in Hokkaido
The Marudai Satoyama activity to forest hills or mountains (We entered into a contract with Osaka
Prefecture and Takatsuki-shi, among others, under their Adopt-a-Forest programs)
The Marudai Nasu Forest Satoyama activity to grow woodland at our private land in Nasu-machi,
Tochigi Prefecture
The Marudai Miyoshi Forest tree planting activity at our private land in Miyoshi-shi, Hiroshima
Prefecture
Develop the products made from vegetables

Market expansion
Develop long-life products(4) Formulation of the Sustainability Basic Policy and Action Guidelines and establishment of the Sustainability Committee and theSustainability Promotion Office
On December 20, 2021, we formulated the Sustainability Basic Policy and Action Guidelines to contribute to the developmentof a sustainable society through our socially and environmentally friendly operations, and also established the Sustainability
Committee to further promote our initiatives to achieve a sustainable society.
The Group has recognized the important issues that need to be addressed as part of our sustainability initiatives (Materiality)
including climate change measures, and the Sustainability Committee works to achieve sustainable growth and enhance ourcorporate value by formulating and implementing the Sustainability Action Plan.
We newly established the Sustainability Promotion Office as of April 1, 2023 to manage and promote the Sustainability
Committee.
The Marudai Food Group has the management philosophy: “We will contribute to society by devoting ourselves to daily
operations and acting with complete sincerity,” which has been inherited over generations. To continue to be “a company
contributing to society through our food products” in accordance with this management philosophy, we pursue more delicious
food and healthier life, offer safe food products, and make consumers’ diet more enjoyable.
[The Marudai Food Group Sustainability Basic Policy]
Resolving the issues regarding the global environment and society—we view this as the challenge common to all humankind.
Based on our wish for the future of our children: “Just want you to be healthy and strong as you grow up, even if you are naughty,”
we will engage in socially and environmentally friendly operations to contribute to the development of a sustainable society.
[The Marudai Food Group Sustainability Action Guidelines]
1. We comply with laws and regulations, as well as our internal rules, in our all operations, striving for sincere and highly
transparent compliance management.
2. We strive to reduce environmental footprint in our all operations, including raw material procurement, manufacturing,logistics, and selling; we work to reduce the amount of energy used and CO2 emissions; and we offer environmentally andsocially friendly products.
3. We offer safe and healthy products, striving to achieve a society where anyone can live a healthy life in affluent
circumstances.
4. We create a work environment where every employee can work comfortably, and respect the personality of each of them,
striving to strike a work-and-life balance.
5. We work on the development of human resources and educate every employee on human rights and compliance, striving toraise the entire Company’s awareness thereof.
6. We conduct operations from a broader perspective by communicating with each of our stakeholders through social
contribution activities.
7. We actively disclose the ESG information of the Marudai Food Group.

―22―

(5) Other initiatives concerning sustainability
We are working on the following items.
[Dietary education]
Healthy body and mind begin with proper diet. Marudai Food will contribute to society through a wide range of food activities.
- Actively conduct activities to promote dietary education (participate in a dietary education event or hold alecture, a cooking program, etc.)- Engage in social contribution activities with the theme of Better Diet
- Disseminate information (on our websites; and also disseminate information in corporation with administrative
authorities)- Provide support for children’s cafeterias by supplying food ingredients[Communication]
Marudai Food will have active communication with consumers through sports and social contribution activities.
- Hold various sports programs (such as those for volleyball, footraces, and soccer) as part of the training
programs of Future Active Athletes- Engage in an activity making the environment more beautiful (participate in cleaning activities around ouroffices)[Career education]
To provide educational opportunities for students, who will lead the next generation, we gladly deliver a lecture at school on
demand and accept students’ visits to our locations.
- In coordination with some educational institutions, including junior high and high schools, colleges, anduniversities, hold classes or deliver lectures for them―23―

Business risks
Of the matters stated in the sections of Overview of Business, Financial Information, etc. in this Annual Securities Report,
management recognizes that the following matters may have a material impact on the financial condition, results of operations, andcash flows of the Group companies on a consolidated basis.
The forward-looking statements included in the following description are based on our judgment as of March 31, 2023.
(1) Financial risks

3.

Risk details

Impairment risk

Major measures- Impairment risk in non-current assets on
a non-consolidated basis, showing a signof impairment with operating deficit
continuing for six fiscal years in a row- A subsidiary or an equivalent unable toachieve operational targets- Formulate and implement sufficient measures to increase future
cash flows- Risk of fluctuations in the market valueof assets, such as real estate or securities- Make use of or sell idle assets- Unexpected bankruptcy of customers- Gather information, manage credit, preserve account receivables,etc.

- Development of livestock epidemics- Concerns over a limit on imports and arise in purchasing prices when thegovernment takes a safeguard measure- Global changes in the supply-demandbalance- Impact of the fluctuations in crude oil
prices- Fluctuations in foreign exchange rates on
local currencies- Diversify raw material procurement channels and take othermeasures to procure raw materials stably- Work to develop highly value-added products- The pandemic of a new virus or anequivalent- Suspension of operations caused by theeffects of a natural disaster, such as anearthquake or a typhoon- A case where there is a fluctuation in themarket value of plan assets or when there
is a change in the assumptions, such as
an investment return or discount rates,that are used to calculate retirement
benefit obligations- Establish an appropriate management system to prevent infection orits expansion- Work further to improve a system for disaster prevention andmitigation, and risk management, aiming to minimize the damage
and casualties caused by natural disasters- As an asset owner of a corporate pension, we monitor how assets
are managed, as needed, by deploying appropriate personnel to a
corporate pension fund
- Reduced risk by transferring part of the defined-benefit pension
plans to a defined-contribution pension plan in the fiscal year ended
March 31, 2017

Customers’bankruptcy risk

Market fluctuation
risk

Currency
fluctuation risk
Risk of infectious
diseases andnatural disasters

Risk of retirement
benefit obligations- Monitor their progress in achieving operational plans, as theirparent company- Reduce risk by importing part of products on a yen basis and, forforeign-currency trade, using foreign exchange futures contracts―24―

(2) Materiality items

Ensuring safety

Risk details- Occurrence of social disorder or an
unpredictable accident such as a quality
issue affecting the entire society- Effect of the damage caused by rumors- Jeopardized social credibility due tocomplaints about product quality, among
others- Restriction on operations when laws andregulations are changed

Response to laws
and regulations

Changes in
consumer lifestyles

Sustainable raw
material
procurement

Reduction of food
waste

Adaptation toclimate change andmitigation of its
impactContribution torealizing a
recycling society

Water conservation- Possible loss of our growth opportunity
due to delay in catching up with diverse
values and changes in the consumer
lifestyles- Delay in responding to social andenvironmental issues at each stage of
our supply chain- Risk of climate change and geopoliticalrisk- Depletion of food resources- Jeopardized social credibility due todelay in taking measures to reduce foodwaste

- Increased production costs resulting
from delay in taking measures to reducegreenhouse gas emissions- Jeopardized social credibility due todelay in taking measures against global
warming- Increased production costs resulting
from delay in taking measures to reducewaste- Jeopardized social credibility due todelay in shifting to using environmentfriendly packaging materials- Suspension of production caused bydroughts, floods, and deteriorating water
quality

Major sustainability measures- Obtain more certifications for FSSC 22000, one of theinternational food safety standards which is based on the
HACCP system- Establish a strict quality management system by the quality
assurance department- Strengthen our efforts to secure safety and improve productquality as well as to prevent the occurrence of products ofpoor quality or defects- Comply with all applicable laws and regulations, including
the Food Sanitation Act, the Act on Japanese AgriculturalStandards (the JAS Act), and the Food Labeling Act, among
others, all of which are related to food safety, in addition to
the laws and regulations related to the environmental
protection and recycling- Strengthen a system to comply with relevant laws andregulations in close cooperation between the legal
department and relevant departments- Strengthen our capabilities to respond to the market needs
through our food products, with the strategy to swiftly
launch new products- Implement appropriate methods, from the consumer
perspective, for supplying products, providing services, andmaking appropriate disclosure- Strengthen the cooperation with suppliers for more stable
raw material procurement- Establish a system to procure essential raw materials in a
responsible manner by conducting human rights due
diligence- Comply with relevant laws and regulations and promote fairtrading and business practices- Promote the operations aimed at mutually sustainablebusiness development with suppliers- Improve manufacturing methods so that they will contributeto reducing food waste in the manufacturing process- Make the shelf life of products longer to reduce the food loss
resulting from discarding food products before they reachconsumers, decrease defective products returned fromretailers or consumers- Engage in a long-term initiative aimed at carbon neutrality
throughout a product life cycle- Work on the information disclosure according to the TCFD
framework- Reduce environmental footprint by promoting energy saving- Strengthen our efforts to reduce the amount of energy used
for production by introducing the facility using less energy
or an equivalent- Strengthen our efforts to reduce the greenhouse gasses
generated by logistics or transportation by encouraging thetransport modal shift, etc.
- Promote an initiative to reduce waste by using lightweightwrapping and packaging materials- Promote a 3R strategy—Reduce, Reuse, and Recycle—for
wrapping and packaging materials- Promote the recycling of food waste into livestock feed or
manure- Promote the adoption of environment-friendly wrapping andpackaging materials- Conserve and maintain wastewater treatment facilities at
production facilities- Promote environmental conservation through an activity toforest hills or mountains―25―Thriving of talent
with diverse
backgrounds

Strengthened
corporate
governance

Strengthened
health management

Risk details- Needs to acquire organizational
capabilities that give us a competitive
advantage- A labor shortage and a rise in costs
caused by diversified recruiting
channels and intensified recruiting
competition- An increase in risks that threaten thecorporate management due to a fragile
governance system- Impacts on our business continuity
brought by delay in establishing a risk
management system- Confusion that affects organizational
management or a reduction in
operational profitability, caused byunstable political, economic, or social
situations, such as a financial crisis ortrade war
- Reduced competitiveness resulting fromthe incapability of catching up withdigital transformation- Reduced competitiveness resulting froma fragile IT management system- Impacts on operations caused byintellectual property risk
- Jeopardized social credibility due todelay in taking measures for a healthmanagement system

Major sustainability measures- Strengthen the management of personnel training programswith a focus on diverse values and specialties- Promote the work style reform- Promote diversity and launch an initiative to enhance
opportunities for women- Expanded the provision of support for employees withchildren so that they can continue to work while raisingchildren, and obtained the certification under the Regulation
for Enforcement of the Act to Advance Measures to Support
Next-Generation Child-Rearing, or the Kurumin certification
program- Educate all the employees of the Group about the Marudai
Food Group’s Code of Conduct to make them thoroughly
understand it- Strengthen our corporate governance system by establishing
the Risk Management Committee, the Corporate Ethics
Committee, the Compliance Committee, and the Nomination
and Remuneration Committee.
- Establish the Marudai counseling line (a whistleblowing
system)- Promote swift management decision-making and more
efficient operations by making the maximum use of theenterprise system- Strengthen the information security by formulating IT
management and operation rules- Manage intellectual property risk

- Strengthen an initiative aimed for health management- Enhance a system that provides stress checkups and monitors
mental health conditions- Address an issue of a dwindling and aging population (theresearch and development of plasmalogen, a material thatcan support the brain function); supply the health-conscious
products (as an example, Dashi No Chikara De Oishisa Sono
Mama, literally meaning: the use of broth has successfully
reduced the amount of the salt used in the product withoutcompromising its original tastiness)

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4.

Management analysis of financial position, operating results and cash flows(1)

Overview of operating results, etc.
1) Financial position and operating results
During the fiscal year ended March 31, 2023, the Japanese economy continued to slowly pick up in private consumption,etc., on the back of the government’s efforts to achieve prevention of infections and normalization of the economy at thesame time while being cautious about COVID-19. Factors behind the economic pickup include the absence of restrictions on
activities including quasi-state of emergency, and the effect of the government’s various policy packages. However, theoverall outlook for the economy remains unpredictable mainly because the downturn in the overseas economy poses a risk ofdepressing the Japanese economy amid continued monetary tightening worldwide, etc. and also because we are facing pricehikes, supply limitations, and fluctuations in financial capital markets.
The industry in which the Marudai Food Group operates continued to face severe conditions despite a sign of recovery ofthe demand for eating out, as successive price hikes in necessities of life, including food products and daily necessaries, had
an enormous impact on households, raising consumers’ budget-consciousness. These price hikes were caused by higher
production costs for raw materials and energy against a backdrop of uncertainty from the war in Ukraine, etc. and a sharp fallin the yen. Regarding the meat market, domestic beef prices have been lower than the previous year’s level due to a drop in
demand, weighed down by higher prices, among others. In the U.S. market, prices of the beef and pork produced in the
country have been lower than the previous year’s level overall. However, the prices of such beef and pork imported into
Japan have been higher due to the effect of exchange rates. Domestic pork prices have been higher than the previous year’slevel with increased demand due to the effect of higher prices of imported pork, among other factors.
In this situation, the Group, a comprehensive food manufacturer that supplies consumers with safer and healthier foodproducts, has pushed ahead with its corporate operations, aiming to be a company whose own value is thoroughly recognizedin society.
We have also made efforts to reduce costs by improving profitability through price revisions and by streamlining.
However, the price revisions raised consumers’ budget-consciousness, which, in conjunction with other factors, led todecreased net sales in the Processed Food Products operations for the fiscal year ended March 31, 2023. Moreover, since theprice revisions could not offset higher costs for raw materials and energy, it was very difficult for us to secure segment
income for the fiscal year. Given this management environment, we will reform our earnings structure with the goal of
maximizing the Group’s value.
As a result, our consolidated financial position and operating results for the fiscal year ended March 31, 2023 were as
follows:A.

Financial position
Consolidated total assets as of March 31, 2023 were 126,261 million yen, a decrease of 2,642 million yen from the endof the previous fiscal year. Consolidated liabilities were 57,246 million yen, an increase of 3,831 million yen from the endof the previous fiscal year. Consolidated net assets were 69,014 million yen, a decrease of 6,474 million yen from the endof the previous fiscal year.

B.

Operating results
Consolidated net sales during the fiscal year ended March 31, 2023 were 221,979 million yen, an increase of 1.5% year
on year; consolidated operating loss was 1,400 million yen, compared to consolidated operating loss of 865 million yen
for the previous fiscal year; and consolidated ordinary loss was 897 million yen, compared to consolidated ordinary loss of
380 million yen for the previous fiscal year. As a result of recording extraordinary losses of 2,621 million yen for
restructuring expenses, and also recording income taxes - deferred of 1,159 million yen due to reversal of deferred tax
assets, consolidated loss attributable to owners of parent was 4,987 million yen, compared to consolidated loss attributableto owners of parent of 376 million yen for the previous fiscal year.

―27―

Operating results for each segment are as follows:(Millions of yen)
Fiscal year
ended March
31, 2022

Fiscal year
ended March
31, 2023

148,011Year-on-yearchange(amount)

Year-on-yearchange (%)

147,093(918)(0.6)%

66,48464,392(2,092)(3.1)%

81,52682,700

1,174

1.4%

70,45574,758

4,303

6.1%

143

127

(15)

(11.1)%

218,610

221,979

3,369

1.5%

(1,076)(1,653)(576)–(0.7)%(1.1)%(0.4)%

–

173

203

30

17.7%

0.2%

0.3%

0.1%

–

38

49

11

29.3%

Segment income (loss)(865)(1,400)(534)–

Ratio to net sales(0.4)%(0.6)%(0.2)%–

Processed Food
Products operations
Ham & Sausage
Products
Precooked &Processed Foods
Meat Products
operations
Other
Net sales

Processed Food
Products operations
Ratio to net sales
Meat Products
operations
Ratio to net sales
Other(Processed Food Products operations)
The Ham & Sausage Products department strived to increase net sales of “Kunseiya-Ripened Pork Sausage”
through sales promotion activities, including menu proposals and campaigns tapping on social media. To address
finely diverse consumer needs, we developed a series lineup of “Tokkyu Arabiki Sausages” (literally meaning coarseground sausages of superfine quality) with three types of sausages with different features, including “Reduced-sugar
Tokkyu Arabiki Sausages.” And we also launched new products, such as fish sausages using globally popular character
brand BT21 for packaging. Under the mid-year and year-end gift range, we launched “Sugar-free Moshio (salt madeby burning seaweed) Meister Ham,” which is produced from domestic pork, in efforts to increase net sales, along withother attempts. However, net sales of the Ham & Sausage Products department decreased by 3.1% year on year
mainly because price revisions raised consumers’ budget-consciousness, which resulted in a decrease in sales volume.
The Precooked & Processed Foods department put its efforts into sales promotion activities including launching a
campaign for the Sundubu series by making full use of social media to gain more recognition. Net sales of “the Bistro
Club Beef Curry” rose as we successfully obtained store shelves for this series; and those of the “Salad Chicken”
series were up from the previous year thanks to new product launches. Under the “Ouchi De Tabi-suru” series,
literally meaning traveling while being at home, we launched new products such as “Biryani No Moto,” the premix forIndian biryani rice, and “Gapao No Moto,” the premix for Thai gapao rice. In addition, we saw strong net sales of thecooked rice products for convenience stores and whipped-cream products. These factors contributed to a 1.4%
increase in net sales of the Precooked & Processed Foods department on a year-on-year basis.
As a result, net sales in the Processed Food Products operations segment amounted to 147,093 million yen, adecrease of 0.6% year on year. Despite our efforts to reduce costs by improving operational efficiency, the said
segment posted segment loss of 1,653 million yen (compared to segment loss of 1,076 million yen for the previous
fiscal year), owing mainly to decreased net sales in the Ham & Sausage Products department and to higher costs for
raw materials and energy which could not be offset by price revisions.
(Meat Products operations)Overall beef sales were higher than the previous year’s level driven by recovery of the sales to the restaurant
industry, among other factors, despite sluggish sales to mass retailers due mainly to consumers’ rising budgetconsciousness. Regarding pork, net sales of both domestic and imported pork were higher than the previous year’slevel because of our efforts to strengthen sales to the restaurant industry and also of a rise in unit prices to massretailers.
As a result, net sales in the Meat Products operations segment increased by 6.1% year on year to 74,758 million yen.
Segment income increased by 17.7% year on year to 203 million yen.

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(Other)
Net sales in Other segment decreased by 11.1% year on year to 127 million yen, and segment income increased by
29.3% year on year to 49 million yen.
(Impact of the COVID-19 pandemic)
During the fiscal year ended March 31, 2023, we saw a sign of a pickup in the demand for eating out while being
cautious about COVID-19, as there were no more restrictions on activities including quasi-state of emergency on theback of the government’s efforts to achieve prevention of infections and normalization of the economic activities atthe same time.
As part of our operational efforts, we strengthened the production of products for the eat-in and ready-to-eat meals
to satisfy the growing demand, offered special paid holidays to the employees whose children faced school closures,took sweeping measures to prevent infection by disinfecting facilities and equipment, and strove for smooth plant
operations while paying attention to employees’ physical condition.
2) Cash flows(Millions of yen)
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Changes

Net cash provided by (used in) operating
activities
Net cash provided by (used in) investing
activities
Net cash provided by (used in) financing
activities

7,030

2,906

(4,123)(5,688)(4,516)

1,172(1,826)

534

2,361

Net increase in cash and cash equivalents(485)(1,074)–

Cash and cash equivalents at end of period

7,990

6,916

(1,074)

Net cash provided by (used in) operating activities increased by 2,906 million yen due mainly to the recording ofdepreciation, despite negative factors of the recording of loss before income taxes and an increase in working capital.
Net cash provided by (used in) investing activities decreased by 4,516 million yen due mainly to the purchase of noncurrent assets to expand and streamline production facilities and to improve product quality, despite proceeds from sale ofinvestment securities and non-current assets.
Net cash provided by (used in) financing activities increased by 534 million yen due mainly to an increase in interestbearing liabilities, despite payment of dividends and purchase of treasury shares.
As a result, consolidated cash and cash equivalents at end of period as of March 31, 2023 decreased by 1,074 million yen
from the end of the previous fiscal year to 6,916 million yen.
3) Production, orders received, and sales
A. Production results
Production results by segment for the fiscal year ended March 31, 2023 on a consolidated basis are as follows:
Name of business segment

Production (Ton)Year-on-year change (%)

Processed Food Products operations

188,163(5.1)

Meat Products operations

11,556

(6.6)

–

–

199,719

(5.2)

Other
Total

(Note) Since we had made a change in the calculation method for the Meat Products operations, we calculated the figures
for year-on-year change (%) by reclassifying the production results for the fiscal year ended March 31, 2022.
B. Orders received
The Group produces based on our projection made from the consumer trend forecast.

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C. Sales results
Sales results by segment for the fiscal year ended March 31, 2023 on a consolidated basis are as follows:
Name of business segment

Sales (Millions of yen)

Year-on-year change (%)

Processed Food Products operations

147,093(0.6)

Meat Products operations

74,7586.1

127(11.1)

221,979

1.5

Other
Total
(Note) Transactions between segments are offset and eliminated.
(2)

Details of analysis and examination of the status of operating results, etc. from management’s perspective
Details of the recognition, analysis, and examination of the status of operating results, etc. of the Group from management’s
perspective are as follows. The forward-looking statements included in the following description are based on our judgment asof March 31, 2023.
1)

Details of the recognition, analysis, and examination of the status of operating results, etc. for the fiscal year ended March
31, 2023
A. Operating results(Net sales)
Consolidated net sales were 221,979 million yen, an increase of 1.5% year on year, buoyed by recovery of thedemand for eating out, despite particularly sluggish sales of the Ham & Sausage Products department amid consumers’
increasingly rising budget-consciousness on the back of successive price hikes in food products and necessities of life.
By segment, net sales of the Processed Food Products operations were 147,093 million yen, a decrease of 0.6% year
on year, net sales of the Meat Products operations were 74,758 million yen, an increase of 6.1% year on year, and net
sales of Other were 127 million yen, a decrease of 11.1% year on year.
(Cost of sales, gross profit)
Consolidated cost of sales rose by 2.6% year on year to 191,495 million yen due mainly to higher costs for raw
materials and energy. The ratio of cost of sales to net sales rose by 0.9 percentage points year on year to 86.3%.
Consolidated gross profit declined by 4.6% year on year to 30,483 million yen.
(Selling, general and administrative expenses; operating profit)
Consolidated selling, general and administrative expenses dropped by 2.9% year on year to 31,884 million yen
owing mainly to our efforts to reduce costs by improving operational efficiency, among others.
Operating loss was 1,400 million yen, compared to operating loss of 865 million yen for the previous fiscal year,
due mainly to sluggish net sales of the Ham & Sausage Products department and higher costs for raw materials andenergy which could not be offset by price revisions.
As for segment income (loss), segment loss for the Processed Food Products operations was 1,653 million yen,worse than segment loss of 1,076 million yen for the previous fiscal year. Segment income for the Meat Products
operations was 203 million yen, up 17.7% year on year, and segment income for Other was 49 million yen, up 29.3%
year on year. Operating results for each segment are stated in “(1) Overview of operating results, etc., 1) Financial
position and operating results, B. Operating results.”(Ordinary profit; profit attributable to owners of parent)
We posted consolidated ordinary loss of 897 million yen due mainly to an increase in operating loss, compared toordinary loss of 380 million yen for the previous fiscal year.
We posted consolidated loss attributable to owners of parent of 4,987 million yen, compared to consolidated loss
attributable to owners of parent of 376 million yen for the previous fiscal year, as a result of recording extraordinary
losses of 2,621 million yen for restructuring expenses, and also recording income taxes - deferred of 1,159 million yen
due to reversal of deferred tax assets.

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(Millions of yen)
Fiscal year
ended March
31, 2022

Fiscal year
ended March
31, 2023

Net sales

218,610

Cost of sales

Year-on-yearchange(amount)

Year-on-yearchange (%)

221,979

3,369

1.5%

186,651

191,495

4,843

2.6%

Ratio to net sales

85.4%

86.3%

0.9%

Gross profit

31,95830,483(1,474)

Ratio to net sales

14.6%

13.7%

(0.9)%

Selling, general and administrative
expenses

32,82331,884(939)

Ratio to net sales

15.0%

14.4%

(0.6)%

Operating loss

(865)

(1,400)(534)

Ratio to net sales(0.4)%(0.6)%(0.2)%

Ordinary loss

(380)

(897)

(517)

Ratio to net sales(0.2)%(0.4)%(0.2)%

Loss attributable to owners of parent(376)(4,987)(4,611)

Ratio to net sales(0.2)%(2.2)%(2.0)%(4.6)%(2.9)%–––(Progress in the Medium-Term Management Plan)
To flexibly respond to changes in the management environment, the Marudai Food Group announces a 3-year
medium-term rolling plan, a numerical plan which we review every year in principle. This time, we formulated a revised
3-Year Medium-Term Management Plan for a period from April 1, 2023 through March 31, 2026 after recalculating andreviewing numerical targets.
Details of the revised 3-Year Medium-Term Management Plan are stated in “II. Overview of Business, 1. Management
policy, business environment, issues to address.”
B.

Financial position(Millions of yen)
As of March 31, 2022

As of March 31, 2023

Changes

Total assets

128,903

126,261(2,642)

Liabilities

53,41457,246

3,831

Net assets

75,48969,014(6,474)Equity ratio

58.1%

54.1%

(4.0)%

2,969.87 yen

2,731.03 yen(238.84) yen

Net assets per share

Consolidated total assets as of March 31, 2023 were 126,261 million yen, a decrease of 2,642 million yen from the endof the previous fiscal year, due mainly to decreases in property, plant and equipment of 2,766 million yen and in cash anddeposits of 1,074 million yen, despite increases in raw materials and supplies of 1,169 million yen and in merchandise andfinished goods of 1,142 million yen.
Consolidated liabilities increased by 3,831 million yen from the end of the previous fiscal year to 57,246 million yen,helped mainly by increases in interest-bearing liabilities of 2,118 million yen, in deferred tax liabilities of 968 million yen,
and accounts payable - other of 498 million yen, despite a decrease in notes and accounts payable - trade of 159 million yen.
Consolidated net assets declined by 6,474 million yen from the end of the previous fiscal year to 69,014 million yen, due
mainly to the recording of loss attributable to owners of parent of 4,987 million yen, payment of dividends of surplus of
755 million yen, and purchase of treasury shares of 276 million yen.
As a result, equity ratio as of March 31, 2023 stood at 54.1%, a decrease of 4.0 percentage points from the end of theprevious fiscal year. However, since it still remained at the same level as in the previous fiscal year, we have determinedthat the Group’s financial standing has been sound at a certain level.
By segment, assets of the Processed Food Products operations were 83,615 million yen, compared to 85,353 million yen
for the previous fiscal year; assets of the Meat Products operations were 20,633 million yen, compared to 19,817 million
yen for the previous fiscal year; and assets of Other and corporate assets not allocated to the reportable segments were
22,011 million yen, compared to 23,733 million yen for the previous fiscal year. The primary factor for a fall inconsolidated assets of the Processed Food Products operations was a decrease in property, plant and equipment.

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C.

Cash flows, capital resources, and cash liquidity

Equity ratio
Equity ratio on amarket value basis
Ratio of cash flows tointerest-bearing
liabilities
Interest coverage ratio

Fiscal year
ended March
31, 2019

Fiscal year
ended March
31, 2020

Fiscal year
ended March
31, 2021

Fiscal year
ended March
31, 2022

Fiscal year
ended March
31, 2023

57.0%

56.5%

58.7%

58.1%

54.1%

36.1%

37.7%

33.2%

28.9%

28.8%

2.7 years

2.3 years

2.7 years

2.9 years

7.8 years

31.3 times

39.7 times

32.9 times

31.9 times

13.0 times

Capital expenditure
9,589
9,167
6,133
7,374
6,859
(Millions of yen)
Depreciation (Millions
6,433
6,801
7,798
7,945
7,693
of yen)(Note) Equity ratio = Owners’ equity / Total assets
Equity ratio on a market value basis = Aggregate market value / Total assets
Ratio of cash flows to interest-bearing liabilities = Interest-bearing liabilities / Operating cash flows
Interest coverage ratio = Operating cash flows / Interest payment* Each indicator is calculated based on the consolidated financial data.
* Aggregate market value is calculated by multiplying the closing price of shares at end of period by the number ofissued shares (after deducting the number of treasury shares).
* For operating cash flows, we use cash flows from operating activities in the consolidated statement of cash flows.
* Of the liabilities in the consolidated balance sheet, interest-bearing liabilities refer to all of those for which we pay
interest. Interest payment refers to the interest paid in the consolidated statement of cash flows.
* We have applied changes in accounting policies since the beginning of the fiscal year ended March 31, 2022. The
financial data for the fiscal year ended March 31, 2021 are stated as figures to which the said changes inaccounting policies have been retrospectively applied.
With regard to capital resources, the Group views as one of the top priorities to secure appropriate funds for ouroperations, to maintain liquidity of funds, and to create stable operating cash flows aimed for a sound financial position.
To increase shareholders’ value, we must prepare an environment in which we can raise funds based on our continuously
growing operations while maintaining a steadfast financial standing.
Although capital expenditure was lower than depreciation for the fiscal year ended March 31, 2023 for the third
consecutive fiscal year, it had been higher than depreciation for a period from the fiscal year ended March 31, 2019 throughthe fiscal year ended March 31, 2020. In this situation, judging from equity ratio, the ratio of cash flows to interest-bearing
liabilities, and the interest coverage ratio, among other indicators, we have determined that the Group remains financiallysound at a certain level and has maintained a financial foundation that enables us to raise funds for implementing our
growth strategy.
As consolidated cash flows for the fiscal year ended March 31, 2023 are stated in “(1) Overview of operating results, etc.,
2) Cash flows,” net cash provided by (used in) operating activities rose by 2,906 million yen, and net cash provided by(used in) investing activities fell by 4,516 million yen, which led to a decrease in free cash flows of 1,609 million yen.
While interest-bearing liabilities advanced by 1,570 million yen, we paid dividends of 755 million yen and purchased
treasury shares of 276 million yen. As a result, cash and cash equivalents decreased by 1,074 million yen.
As dividend policy is stated in “IV. Information about Reporting Company, 3. Dividend policy,” the Group views thereturn of profits to shareholders as a key management issue. Taking into consideration consolidated earnings performanceand financial conditions, and based on our basic policy to maintain stable dividends, we have decided on an ordinary
dividend of 20 yen per share for the current fiscal year.
The Group made a provisional calculation of capital cost as a reference when formulating the Medium-Term
Management Plan and to verify the reasonableness of cross-shareholdings. However, since there are various ways ofthinking about what numerical data should be used for calculation, we refrain from making public the specific data we used.
Capital cost is the returns investors should expect, so we would like to understand what an appropriate capital cost is
through dialogue with institutional investors and other investors, aiming to leverage it to achieve operational targets andmaximize shareholder returns.
The Group’s working capital is most needed by operating expenses for manufacturing products, including raw material
costs, labor costs, expenses, and selling, general and administrative expenses. Meanwhile, the capital intended forinvestment is most needed by the capital expenditure to expand, streamline, and improve production facilities and to
improve product quality. We raise these necessary funds through our own capital, which are mainly from operating cash
flows. We did not conduct material fundraising, including an increase in capital or issuance of corporate bonds, during the
fiscal year ended March 31, 2023. Capital expenditure on an asset basis for the fiscal year ending March 31, 2024 isestimated at 4,050 million yen in total, a majority of which we are planning to raise through our own capital and leases.

―32―

The Group has entered into overdraft contracts with our banks for effective fundraising, and the unexercised portion offacilities based on these contracts is 22,992 million yen as of March 31, 2023. Adding this amount to cash and deposits of
6,916 million yen as of March 31, 2023 will bring the total to 29,908 million yen, which surpasses an average net sales permonth for the fiscal year ended March 31, 2023. For this reason, we have determined that we are at a certain level in termsof fund capabilities for any emergent demand. As of March 31, 2023, we completed a shelf registration of corporate bonds
with the planned issuance amount of 20,000 million yen, although details about their new issuance are yet to be worked out.
This new issuance would prepare us for the demand for funds, including those for facilities, investment and financing,
repayments of borrowings, and working capital.
2)

5.

Significant accounting policies and estimates
The consolidated financial statements of the Group are prepared on the basis of accounting principles generally acceptedin Japan. We calculated the estimates needed to prepare these consolidated financial statements based on reasonable
standards.
We have judged these estimates based on the various factors we deemed appropriate in light of past results or according
to the information available when making the estimates. However, the estimates might differ from actual results in the
future if there is any change in the conditions used as assumptions for the estimates or in the business environment.
Of the accounting estimates and assumptions used to prepare the consolidated financial statements, those of importanceare stated in “V. Financial Information, 1. Consolidated financial statements, etc., (1) Consolidated financial statements,[Notes], (Significant accounting estimates).”Material contracts, etc.
Not applicable.

―33―

6.

Research and development activities
The Group encourages the product development underpinned by basic research to create products that are safe and sensitive tothe latest trends, and also promotes the planning supported by strategic marketing. Our planning and development are based on thelatest marketing data and market analysis. We strive to be a manufacturer needed by more and more consumers, through our
product development to meet consumer needs, based on sweeping marketing research including consumer surveys. What we
cherish the most is to produce a product that deeply impresses our customers with its deliciousness.
The research and development expenses paid by the Group during the fiscal year ended March 31, 2023 were 601 million yen in
total, mainly for the research and development activities of the Processed Food Products operations.
(Processed Food Products operations)
The Ham & Sausage Products department put on sale the “Tokkyu Sausages” series to catch up with consumers’ preference thatis being diversified, with special attention to three aspects in addition to tastiness: healthiness, rich taste, and usefulness as a lunchbox dish. For “Reduced-sugar Tokkyu Arabiki Sausages,” we used 15 kinds of spices and moshio, which is salt made by burning
seaweed, so that the sausages are still tasty even with their sugar cut by 70%. With “Rich and Juicy Tokkyu Arabiki Sausages,” wesuccessfully produced bite-size sausages that enable you to enjoy the richest meat juice ever in the history of the Company’ssausage category. “Tokkyu Arabiki Sausages” have been developed for the use as a lunch box dish. These sausages are still tasty
even when getting cold, and we use thin skin for this so that the skin will not be left in the mouth. In addition, increasing social
awareness of protein led us to put on sale the “Protein Stick” series, chicken sausages high in protein that contain imidazole
dipeptide and use the chicken produced in Japan. Under this series, we put two types on the market: plain flavor and black pepper
flavor.
The Precooked & Processed Foods department launched two more products under the Kanbi Shokudo (literally meaning Korean
gourmet food) series as easy-to-prepare meals that boast authentic taste. One is “Samgyetang,” the premix for the Korean chicken
stewed soup with rich taste, containing Asiatic ginseng extract. The other is “Gamjatang,” the premix for the Korean pork bonestewed soup featured by the combination—which will make you hooked—of spiciness of a homemade hot seasoning (Dadaegi)
and tastiness of Doenjang soybean paste and fish sauce. These new launches brought the number of products under this series tofive. In addition, our further new launches included “Haemultang No Moto with Shrimp Flavor” and “Haemultang No Moto with
Oyster Flavor,” both of which are the premix for Korean spicy seafood stew featured by hot and tasty soup with delicious fish taste.
Under the “Ouchi De Tabi-suru” series, with the concept of making you feel as if you we traveling overseas while being at home,
we put on the market “Biryani No Moto,” the premix for Indian biryani rice touted as one of the world’s top three most delicious
mixed-rice dishes; and “Gapao No Moto,” the premix for Thai gapao rice, which is featured by an appetizing smell of basil andfish sauce. As for the snack range, we launched the new brand of “Cafelf” in hopes that this will help people busy working anddoing housework have a relaxing break. Products under this brand comprise three types of scones that are made from our original
homemade dough featured by a melting texture, one of which is “Oishii Hitoyasumi (literally meaning a tasty break) Cafelf
Chocolate Scones”.
The Central Research Institute jointly conducts the research and development of plant-based foods with the development
department of the operating division. Plant-based foods are an area attracting attention from around the globe against a backdrop of
growing public awareness of the environmental and health issues and also in light of animal welfare. In view of the anticipatedshortage of protein in the future, the Institute focuses on the research and development of a material that can be the next
generation’s protein. As for chicken-derived plasmalogen, in February 2022, we filed its function of the “maintenance of the speedof the cognitive function” as a newly labeled function. This led to increases in the number of customers starting to adopt it and also
in the number of existing customers repeating the purchase of it. We will continue striving to gain more recognition of plasmalogen
in the fiscal year ending March 31, 2024, too, by making widely known the new findings that have been obtained through the joint
research, using various media and opportunities such as news releases, exhibitions, the industry’s websites, and study meetings.
(Meat Products operations and Other)
No applicable matters to report.

―34―

III.

Information about Facilities

1. Overview of capital expenditures
The Group spent capital expenditure of 6,859 million yen in total for the fiscal year ended March 31, 2023, mainly for theinvestment in expansion, streamlining and quality improvement of production facilities. The total amount of capital expenditurealso includes the investment in property, plant and equipment and in intangible assets.

2. Major facilities(1) Reporting company
As of March 31, 2023
Book value (Millions of yen)
Business place(Location)
Hokkaido Plant(Iwamizawa-shi,
Hokkaido)
Iwate Plant(Hanamaki-shi, Iwate
Prefecture)
Niigata Plant(Joetsu-shi, Niigata
Prefecture)
Kanto Plant(Shimotsuke-shi,
Tochigi Prefecture)
Ibaraki Plant(Inashiki-shi, Ibaraki
Prefecture)
Yokosuka Plant(Yokosuka-shi,
Kanagawa Prefecture)
Shonan Plant(Hiratsuka-shi,
Kanagawa Prefecture)
Shizuoka Plant(Kakegawa-shi,
Shizuoka Prefecture)
Matsusaka Plant(Matsusaka-shi, Mie
Prefecture)
Takatsuki Plant(Takatsuki-shi, Osaka)
Okayama Plant(Tsuyama-shi,
Okayama Prefecture)
Hiroshima Plant(Miyoshi-shi,
Hiroshima Prefecture)
Karatsu Plant(Karatsu-shi, Saga
Prefecture)
Tohoku Hokkaido
Sales Dept.
(Natori-shi, Miyagi
Prefecture, and otherlocations)
East Japan Sales Dept.
(Chuo-ku, Tokyo, andother locations)
Chubu Sales Dept.
(Komaki-shi, Aichi
Prefecture, and otherlocations)Kansai Sales Dept
(Nishinari-ku, Osakashi, and otherlocations)
Chu-Shikoku Sales
Dept.
(Nishi-ku, Hiroshimashi, and otherlocations)
Kyushu Sales Dept.
(Kasuya-gun, Fukuoka
Prefecture, and otherlocations)

Name of businesssegment

Details offacilities

Processed Food
Products operations

Manufactur
ing facility

393

251

116
(43,460)

0

4

767

2

Processed Food
Products operations

Manufactur
ing facility

578

466

254
(42,335)

3

10

1,314

4

Processed Food
Products operations

Manufactur
ing facility

581

609

227
(51,483)

5

15

1,438

5

Processed Food
Products operations

Manufactur
ing facility

1,345

2,525

181
(66,193)

1

28

4,081

60

Processed Food
Products operations

Manufactur
ing facility

40

426

140
(14,932)

0

3

611

10

Processed Food
Products operations

Manufactur
ing facility

227

473

2,476
(6,412)

1

6

3,185

1

Processed Food
Products operations

Manufactur
ing facility

255

205

1,004
(13,937)

0

3

1,469

9

Processed Food
Products operations

Manufactur
ing facility

156

240

356
(34,530)

0

6

760

14

Processed Food
Products operations

Manufactur
ing facility

138

295

Processed Food
Products operations

Manufactur
ing facility

1,287

3,212

Processed Food
Products operations

Manufactur
ing facility

49

164

Processed Food
Products operations

Manufactur
ing facility

323

Processed Food
Products operations

Manufactur
ing facility

Processed Food
Products operations
Meat Products
operations

Buildings
andstructures

Machinery,Landequipment
Leased assets(Area in m2)
and vehicles

Other

Total

Number of
employees

146(12,010)322(53,889)
233(42,891)

0

3

583

7

31

20

4,875

51

0

3

450

8

491

335
(48,753)

3

9

1,162

7

1,679

1,854

501
(39,228)

3

24

4,063

13

Sales
facility

127

7

393
(13,058)

1

3

533

25

Sales
facility

247

5

685
(7,549)

5

8

952

109

Sales
facility

155

4

656
(10,032)

1

4

822

30

Sales
facility

188

3

835
(12,182)

3

14

1,044

72

Processed Food
Products operations
Meat Products
operations

Sales
facility

150

2

392
(7,427)

2

6

553

28

Processed Food
Products operations
Meat Products
operations

Sales
facility

162

8

241
(8,389)

1

5

420

25

Processed Food
Products operations
Meat Products
operations
Processed Food
Products operations
Meat Products
operations
Processed Food
Products operations
Meat Products
operations―35―

(2) Subsidiaries in Japan
As of March 31, 2023
Book value (Millions of yen)Company nameToda Foods
Co., Ltd.

Azumino Food
Co., Ltd.

Toraku Foods
Co., Ltd.

(Notes)Business place(Location)
Head Office andplant(Toda-shi, Saitama
Prefecture, andother locations)
Head Office andplant(Matsumoto-shi,
Nagano Prefecture,and other locations)
Head Office andplant(Higashinada-ku,
Kobe-shi, Hyogo
Prefecture, andother locations)

Name of business Details ofsegment
facilities

Buildings
Machinery,Landandequipment and(Area in m2)
structures
vehiclesLeasedassets

Other

Total

Number of
employees

Processed
Food Products
operations

Manufactur
ing facility

2,878

1,129

1,152
(21,270)

598

48

5,807

151

Processed
Food Products
operations

Manufactur
ing facility

1,602

530

905
(55,711)

1,371

79

4,489

96

Processed
Food Products
operations

Manufactur
ing facility

1,183

1,027

772
(9,094)

866

86

3,936

181

1. There are no major facilities out of operation.
2. The “Other” item under book value refers to a total of tools, furniture and fixtures, and intangible assets.
3. The figures for the reporting company’s Takatsuki Plant include the land of the Head Office.

3. Planned addition, retirement, and other changes of facilities(1) Planned addition of material facilities
The Group plans to add or repair material facilities as of March 31, 2023 as follows. For your information: Capital expenditure
on an asset basis for the fiscal year ending March 31, 2024 is estimated at 4,050 million yen in total.

Name ofbusinesssegment

Details of facilities

Processed
Food
Products
operations
Processed
Kanto Plant
Food(Shimotsuke-shi, Tochigi
Products
Prefecture)operations

Improvement in theefficiency of
manufacturing
facilities, etc.
Improvement in theefficiency of
manufacturing
facilities, etc.

Company name Business place (Location)

Reportingcompany

Reportingcompany

Toraku Foods
Co., Ltd.

(Planned amounts ofinvestment)

Takatsuki Plant(Takatsuki-shi, Osaka)

Head Office and plant(Higashinada-ku, Kobeshi, Hyogo Prefecture)

Processed
Food
Products
operations

Total
Amountamount already paid
(Millions of (Millions of
yen)
yen)

Manufacturing
facilities, etc. forwhipped cream forcommercial use

Starting date

Estimatedcompletion
date

4,090

3,057

By our own
capitalJuly 2018

December
2023

3,489

2,101

By our own
capitalDecember 2020

March 2024

34

Manufacturing
facilities, etc.
for whippedcream forcommercial
use By ourown capitaland leases

May 2022

August 2023

460

(2) Planned retirement of material facilities
Not applicable, except for the removal of operating facilities for regular renovation.

―36―

Fundraising
methodIV.

Information about Reporting Company

1. Company’s shares, etc.
(1) Total number of shares, etc.
1) Authorized shares
As of March 31, 2023

2)

Class

Total number of shares authorized to be issued (Shares)

Common stock

40,000,000

Total

40,000,000

Issued shares
As of the end of the current
fiscal year (Shares)(March 31, 2023)

Class

As of the filing date
(Shares)(June 29, 2023)

Stock exchange on which theCompany is listed

Common stock

26,505,581

26,505,581

Total

26,505,581

26,505,581

Details

Tokyo Stock Exchange Prime
MarketFrankfurt Stock Exchange

A minimum
trading unit:
100 shares––(2) Share acquisition rights
1)
Employee share option plans
Not applicable.
2)

Rights plans
Not applicable.

3)

Share acquisition rights for other uses
Not applicable.

(3) Exercises of moving strike convertible bonds, etc.
Not applicable.
(4) Changes in total number of issued shares, share capital and legal capital surplus
Changes in the Balance of thetotal number of total number ofissued sharesissued shares(Thousands of (Thousands ofshares)shares)Date

October 1, 2018 (Note)(106,022)

Changes inshare capital(Millions ofyen)

Balance ofshare capital(Millions of
yen)

–

6,716

26,505

Changes inlegal capitalsurplus(Millions ofyen)

Balance oflegal capitalsurplus(Millions ofyen)–

21,685(Note) This is attributable to the Company’s one-for-five share consolidation of its common stock.
(5) Shareholding by shareholder category
As of March 31, 2023
Status of shares (the minimum unit consists of 100 shares)

Category

Japanese
Foreign corporations,
Governmen financial Financial
Other
etc.
Individuals,t and local institutions instruments Japanesemunicipaliti
andbusiness corporation
othersOthers Individuals
esinsurance operatorsscompanies

Total

Status of shares
below unit
(Shares)Number ofshareholders

–

31

22

182

65

25

27,02527,350–

Number ofshares held
(Units)–76,495

5,234

49,085

16,716

62

117,109

264,701

35,481

Percentage of
–
28.90
1.98
18.54
6.32
0.02
44.24
100.00–shares held(%)
(Note) 1,485,025 shares of treasury shares consist of 14,850 units listed under “Individuals, others,” and 25 shares under “Status ofshares below unit.” The actual number of treasury shares is 1,485,025 as of March 31, 2023.

―37―

(6) Major shareholders

Name

Address

As of March 31, 2023
Percentage ofshares held to the
Number of
total number ofshares held
issued shares(Thousands of(excluding sharesshares)of treasury
shares) (%)

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

2-11-3 Hamamatsu-cho, Minato-ku, Tokyo

2,228

8.90

Marudai Kyoei Kai

21-3 Midori-cho, Takatsuki-shi, Osaka

2,100

8.39

Kanematsu Corporation

119 Ito-machi, Chuo-ku, Kobe-shi, Hyogo
Prefecture

1,192

4.76

Komori Memorial Foundation

Inside the Head Office of Marudai Food Co.,
Ltd. at 21-3 Midori-cho, Takatsuki-shi, Osaka

1,050

4.19

Sumitomo Mitsui Banking Corporation

1-1-2 Marunouchi, Chiyoda-ku, Tokyo

887

3.54

Sumitomo Mitsui Trust Bank, Limited

1-4-1 Marunouchi, Chiyoda-ku, Tokyo

864

3.45

Sumitomo Life Insurance Company

2-2-1 Yaesu, Chuo-ku, Tokyo

860

3.43

The Norinchukin Bank

1-2-1 Otemachi, Chiyoda-ku, Tokyo

642

2.56

Custody Bank of Japan, Ltd. (Trust
Account)

1-8-12 Harumi, Chuo-ku, Tokyo

519

2.07

DFA INTL SMALL CAP VALUE
PORTFOLIO (Standing proxy: Citibank,N.A., Tokyo Branch)

PALISADES WEST 6300, BEE CAVE ROAD
BUILDING ONE AUSTIN TX 78746 US (6-2730 Shinjuku, Shinjuku-ku, Tokyo)

446

1.78

Total

–

10,79343.13(Notes)

1.
2.
3.
4.

Number of shares held is rounded down to the nearest thousand.
Percentage of shares held is rounded down to the second decimal place.
The Company owns 1,485,025 shares of treasury shares but excludes itself from the major shareholders above.
Komori Memorial Foundation is a public interest incorporated foundation established in accordance with the last willof the Company’s founding president, the late Mr. Toshiyuki Komori. This Foundation is aimed to provide monetary
support for scholarship programs and academic research, among others, using the dividends, etc. gained by managing
its base assets, which mainly consist of the Company’s shares.
5. The following shares fall into the shares related to trust business:
The Master Trust Bank of Japan, Ltd. (Trust Account)
2,228 thousand shares
Custody Bank of Japan, Ltd. (Trust Account)
519 thousand shares
6. The change report on large shareholdings that was made available to the public on August 19, 2022 states that
Sumitomo Mitsui Trust Bank, Limited and its joint holders, Sumitomo Mitsui Trust Asset Management Co., Ltd. andNikko Asset Management Co., Ltd., owned the following shares as of August 15, 2022. However, since the Company
has not been able to confirm the actual number of shares alleged to be held by the two companies other than
Sumitomo Mitsui Trust Bank, Limited as of March 31, 2023, the Company does not include the information of those
two companies in the major shareholders above.
The details of the change report on large shareholdings are as follows:
Number of share
Percentage of sharecertificates, etc.
Name
Address
certificates, etc.
held (Thousands ofheld (%)
shares)Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo864
3.26
Sumitomo Mitsui Trust Asset
1-1-1 Shibakoen, Minato-ku, Tokyo633
2.39
Management Co., Ltd.
Nikko Asset Management Co., Ltd.
9-7-1 Akasaka, Minato-ku, Tokyo
279
1.05
Total
–
1,777
6.71

―38―

7. The change report on large shareholdings that was made available to the public on October 21, 2022 states that
SMBC Nikko Securities Inc. and its joint holder, Sumitomo Mitsui Banking Corporation owned the following shares
as of October 14, 2022. However, since the Company has not been able to confirm the actual number of shares
alleged to be held by SMBC Nikko Securities Inc. as of March 31, 2023, the Company does not include its
information in the major shareholders above.
The details of the change report on large shareholdings are as follows:
Number of share
Percentage of sharecertificates, etc.
Name
Address
certificates, etc.
held (Thousands ofheld (%)
shares)SMBC Nikko Securities Inc.
3-3-1 Marunouchi, Chiyoda-ku, Tokyo230
0.87
Sumitomo Mitsui Banking Corporation 1-1-2 Marunouchi, Chiyoda-ku, Tokyo
887
3.35
Total
–
1,118
4.22
(7) Voting rights
1) Issued shares
As of March 31, 2023
Number of voting rights
Number of shares (Shares)(Units)Category

Details

Shares without voting rights

–

–

–

Shares with limited voting rights(treasury shares, etc.)
Shares with limited voting rights(others)

–

–

–

–

–

–

–

–

Shares with full voting rights(treasury shares, etc.)
Shares with full voting rights(others)
Shares below one unit

(Treasury shares)
Common1,485,000
stock
Common24,985,100
stock
Common35,481stock

Total number of issued shares

249,851

26,505,581

–

–

–

–

–

Total voting rights held by all–
249,851–
shareholders(Note) The number of shares of common stock in “Shares below one unit” includes 25 treasury shares held by the Company.
2)

Treasury shares, etc.

Shareholder

Address of shareholder

As of March 31, 2023
Number ofPercentage of
Number ofshares held Total number of shares held toshares held
under the names shares held the total number
under ownof others(Shares)of issued sharesname (Shares)(Shares)(%)(Treasury shares)
Marudai Food Co., Ltd.

21-3 Midori-cho, Takatsukishi, Osaka

1,485,000–

1,485,000

5.60

Total

–

1,485,000–

1,485,000

5.60

―39―

2. Acquisition and disposal of treasury shares
Acquisition of common stock in accordance with Article 155, Items 3 and 7 of theCompanies Act(1) Acquisition by resolution of shareholders meeting
Not applicable.
Class of shares, etc.:(2) Acquisition by resolution of board of directors meeting
Acquisition in accordance with Article 155, Item 3 of the Companies Act
Category

Number of shares (Shares)

Resolution at the meeting of the Board of Directors as ofAugust 29, 2022 (Acquired from August 30, 2022 to August30, 2022)

Total amount (Millions of yen)

193,600

303

Treasury shares acquired before the current fiscal year––

Treasury shares acquired during the current fiscal year

176,000275

Total number and amount of remaining shares to be acquiredby resolution

17,60027

Percentage of unexercised portion as of the end of the current
fiscal year (%)

9.09

9.09

–

–

9.09

9.09

Treasury shares acquired during the period reported
Percentage of unexercised portion as of the filing date (%)(Note)

These shares were acquired through ToSTNeT-3, the off-auction treasury shares repurchase system of the Tokyo Stock
Exchange.

(3) Acquisition not based on resolution of shareholders meeting or board of directors meeting
Acquisition in accordance with Article 155, Item 7 of the Companies Act
Category

Number of shares (Shares)

Total amount (Millions of yen)

Treasury shares acquired during the current fiscal year

1280Treasury shares acquired during the period reported

190(Note)“Treasury shares acquired during the period reported” does not include the number of shares below one unit acquired during
the period from June 1, 2023 to the filing date of this Annual Securities Report.

(4) Disposal of acquired treasury shares and number of treasury shares held
Current fiscal year
Category

The period reported
Total amountdisposed(Millions of yen)

Number of shares(Shares)Number of shares(Shares)

Total amountdisposed(Millions of yen)

Acquired treasury shares for which
subscribers were solicited

–

–

–

–

Acquired treasury shares that were
disposed of

–

–

–

–

Treasury shares transferred due tomerger, stock exchange, stock delivery,
or corporate separation

–

–

–

–

Number of shares of treasury shares
1,485,025–
1,485,044–
held(Note) “Number of shares of treasury shares held” during the period reported does not include the number of shares below one unit
acquired during the period from June 1, 2023 to the filing date of this Annual Securities Report.

―40―

3. Dividend policy
The Company views the return of profits to shareholders as a key management issue. The Company will make it a basic policy
to maintain stable dividends, while taking into consideration consolidated earnings performance and financial conditions.
Our dividends of surplus are paid basically once a year as a year-end dividend, the amount of which is decided by the General
Meeting of Shareholders.
We intend to make effective use of internal reserves to strengthen our management foundation and competitiveness, aiming toincrease our corporate value further by establishing a profitable earnings basis.
Based on the abovementioned policy, we have decided on an ordinary dividend of 20 yen per share for the current fiscal year.
(Note) Dividends of surplus whose record date falls on the current fiscal year are as follows:
Total amount of dividends
Dividends per share (Yen)
Date of resolution(Millions of yen)
Resolution at the Ordinary General
Meeting of Shareholders held on June500
28, 2023―41―

20

4. Corporate governance(1) Overview of corporate governance1) Basic policy on corporate governance
The Company’s basic policy on corporate governance is to commit ourselves to the corporate management to gain
credibility from consumers. Given the growing consumer interest in the food safety, we will strive to strengthen our quality
assurance system further to provide consumers with safer and healthier food products. To do so, we will establish acomprehensive hygiene management system, such as the HACCP management system, and ensure that we appropriately
label products in accordance with safety requirements as well as with laws and regulations.
The Company formulated the Marudai Food Group’s Code of Conduct in January 2004 to comply with the laws andregulations relevant to overall corporate operations as well as corporate ethics, and to further raise the awareness of theGroup’s Directors/Statutory Auditors and employees, aiming to be a company broadly supported in society by consumers,
shareholders, business partners, etc.
2)

Overview of the Company’s corporate governance system and the reason for adopting this system
The Company’s systems for business execution and internal control, as well as the implementation status of measures, areas follows:(The Company’s administrative bodies)
The Company has the General Meeting of Shareholders, the Board of Directors, the Sustainability Committee, theNomination and Remuneration Committee, the Management Meeting, the Executive Officers’ Meeting, and the Group
Meeting as management bodies to maintain a system for swift decision-making and business execution. Meanwhile, theCompany also has the Compliance Committee and the Corporate Ethics Committee in place to maintain a system ofcontinuously monitoring and supervising the status of the Company’s compliance with laws and regulations. Since we havejudged that each Statutory Auditor as well as the Board of Statutory Auditors has been functioning as a supervisor to
management, we have chosen to be a Company with a Board of Statutory Auditors.
A. Board of Directors
In addition to a monthly regular meeting, the Board of Directors holds an extraordinary meeting in a timely manner, if
necessary, to make decisions on material matters related to management and to oversee each Director’s execution of theirduties. We have six Directors, two of whom are Outside Directors including one woman. By appointing talent with
abundant experience and advanced expertise and techniques as Directors, we are striving to make our operations moretransparent and fairer. The Board of Directors mainly discusses the following matters:- Matters related to management policy and Medium-Term Management Plan
- Matters related to strengthening of corporate governance- Matters related to the internal control system including compliance and risk management―42―Members: Nine, of whom two are Outside Directors and two others are Outside Statutory Auditors
Title and position

Name

Attendance

Remarks

Director and Chairman; Chair of
the Board of Directors
President and Representative
Director◎ Tokuo Kudara

13 out of 13 meetings (100%)–

Yuji Sato

13 out of 13 meetings (100%)–

Managing Director

Shigeki Fukushima–

Director

Nobuyoshi Katoh

13 out of 13 meetings (100%)

Director

Toshio Tanaka

13 out of 13 meetings (100%)

Assumed officeon June 28,
2023
Retired on June
28, 2023–

Director (Outside)

Masahiro Fuchizaki

13 out of 13 meetings (100%)–

Director (Outside)

Keiko Kaneko

13 out of 13 meetings (100%)–

Full-time Statutory Auditor
Toru Miyachi
13 out of 13 meetings (100%)–
Full-time Statutory Auditor
Takashi Matsuzawa
13 out of 13 meetings (100%)–(Outside)Part-time Statutory Auditor
Motoaki Nishimura
13 out of 13 meetings (100%)–(Outside)
The mark of ◎ stands for Chair.
B. Sustainability Committee
We have the Sustainability Committee in place, chaired by President and Representative Director, which engages insocially and environmentally friendly operations. By so doing, we promote the Group Sustainability Basic Policy andSustainability Action Guidelines as part of our responsibility for contributing to the development of a sustainable society.
The Sustainability Committee regularly reports to the Board of Directors about sustainability-related matters of theGroup, striving to realize our sustainable growth and enhanced corporate value.
C. Nomination and Remuneration Committee
We have the Nomination and Remuneration Committee in place to ensure the transparency and objectivity of theprocess to decide the candidates for Directors and Statutory Auditors and to decide Directors’ remuneration. The
Nomination and Remuneration Committee comprises three members, two of whom are Independent Outside Directors,
and deliberates the following matters, etc. and advises the Board of Directors.
- Matters related to the election of candidates for Directors and Statutory Auditors- Matters related to the dismissal of Directors and Statutory Auditors- Matters related to the selection and dismissal of Representative Director- Matters related to the plan for successors- Matters related to the policy for deciding Directors’ remuneration, etc.
- Matters related to the decision of each Director’s remuneration, etc.
Members: Three, two of whom are Outside Directors
Title and position
Name
Attendance
Remarks
Director and Chairman; Chair of◎ Tokuo Kudara
Two out of two meetings (100%)–
the Board of Directors
Director (Outside)
Masahiro Fuchizaki
Two out of two meetings (100%)–
Director (Outside)

Keiko Kaneko

Two out of two meetings (100%)–

The mark of ◎ stands for Chair.
D. Management Meeting
The Management Meeting comprises full-time Directors and is attended by those other than full-time Directors, if
necessary. It is held twice a month, in principle, to deliberate in advance matters subject to resolution by the Board of
Directors and to deliberate and examine other material matters related to management.
E. Executive Officers’ Meeting
We have introduced an executive officer system, in which Executive Officers execute their duties under the directionof President and Representative Director in accordance with the decisions by the Board of Directors. The Executive
Officers’ Meeting comprises Directors including Outside Directors, Statutory Auditors, and Executive Officers. It is held
once every six months, in principle, to report, deliberate, and examine Executive Officers’ execution of their duties.
F. Group Meeting
The Group Meeting comprises Directors including Outside Directors, Statutory Auditors, and presidents of major
subsidiaries. It is held once every six months, in principle, to report, deliberate, and examine subsidiaries’ operating
results, financial conditions, and other material matters.
G. Compliance Committee
We have the Compliance Committee in place, chaired by an Independent Outside Director, to oversee the Group’s
compliance situation and promote observance of laws. With regard to the Compliance Awareness Survey that covers all
the employees of the Group, the Compliance Committee reports to the Board of Directors on the survey results inaddition to the cases, etc. deliberated at the Corporate Ethics Committee. By so doing, it strives to raise the awarenessabout compliance based on corporate ethics and to make the importance of such compliance thoroughly understood, in
addition to the importance of observance of laws.
H. Corporate Ethics Committee
We have the Corporate Ethics Committee in place, chaired by a Director. It conducts fact-finding surveys concerning―43―

violations of corporate ethics, the cases reported by an insider, etc., and examines and formulates prevention measures.
I. Statutory Auditors and the Board of Statutory Auditors
We have three Statutory Auditors, two of whom are Outside Statutory Auditors, one of whom is a full-time Statutory
Auditor. Statutory Auditors attend the meeting of the Board of Directors and other material meetings and hold a regularmeeting to exchange views with Directors, Executive Officers, and employees, to oversee Directors’ business execution.
The meeting of the Board of Statutory Auditors is held once a month, in principle, to resolve, discuss, and deliberatematerial matters related to the audit policy and plan as well as audits. The Board of Statutory Auditors has a system inplace to grasp the Group’s condition in a timely and appropriate manner by closely working with the Accounting Auditor
and the internal auditing departments.
J. Internal Audit Office
We have the Internal Audit Office under the direct authority of President and Representative Director as one of theinternal auditing departments that conducts the Group’s internal business audits and evaluates the status of its internal
control. It comprises eight members and works closely with Statutory Auditors concerning the results of audits andevaluation.
3)

Other matters related to corporate governance
Basic policy on internal control system and the establishment of such system
A. Basic policy
The Company strives to appropriately establish and operate its internal control system so that all the companies anddepartments of the Marudai Food Group can fulfill their own roles, with the aim of achieving its corporate philosophy
and operational targets and of improving its corporate value and sustainably growing.
With regard to the internal control system, the Internal Audit Office, under the direct authority of President andRepresentative Director, plays a core role in evaluating how the internal control system is implemented at the Company’s
individual departments and the Group’s companies overall and in making proposals accordingly.
The Company resolved a proposal for the “Systems for Ensuring Proper Business Activities (internal control system)”stipulated by the Companies Act and the Regulations for Enforcement of the Companies Act at the meeting of the Boardof Directors held in May 2006, and resolved a proposal for partially amending the said resolution at the meeting of theBoard of Directors held in May 2023. We will continue to enhance transparency of our overall management throughactive disclosure of information.
B. Business execution and internal control system(A) A system to ensure that Directors and employees execute their duties in compliance with laws and regulations aswell as with the Articles of Incorporation of the Company- The Directors and employees of the Company and its subsidiaries shall execute their duties in accordance with the
Marudai Food Group’s Code of Conduct, which stipulates the observance of laws and regulations, the Articles ofIncorporation, the internal rules and social ethics.
- The Compliance Committee, chaired by an Independent Outside Director, shall oversee the Group’s overall
compliance situation and promote observance of laws and regulations, etc.
- The Company shall formulate the Marudai Food Group’s Whistleblowing Rules as part of our internal
whistleblowing system, establish internal/external consultation desks as whistleblowing contact points and makeDirectors and employees fully understand them to prevent any violation of laws and regulations or the Articles ofIncorporation. In addition, the Company shall ensure the anonymity of whistleblowers and will never treat themunfavorably.
(B) A system to store and manage the information related to Directors’ execution of duties- We shall appropriately store and manage the minutes of the meeting of the Board of Directors and relevant
documents, as well as the material information, etc. related to Directors’ execution of duties, in accordance with
the Document Rules.
(C)

Rules and other systems to manage the risk of loss
- The Company and its subsidiaries shall formulate the Marudai Food Group’s Risk Management Rules to establish
and implement a system that ensures food safety as a group of food companies and that prepares us to respondswiftly in the event of a material accident or natural disaster.
- The Company and its subsidiaries shall, in the event that a crisis occurs or possibly occurs, establish the Risk
Management Committee to swiftly gather and communicates information; and makes decisions and gives
directions without delay.

(D)

A system to ensure Directors’ efficient execution of duties- The Company shall make a swift and appropriate decision on management matters at a regular meeting of theBoard of Directors after deliberating such matters in advance at the Management Meeting, in accordance with theRules for the Board of Directors and the Guidelines for Operation of the Board of Directors.
- We shall formulate the Rules for Division of Duties and Authority for Organization to ensure that the Directors andemployees of the Company and its subsidiaries efficiently execute duties. By so doing, we shall set standards forduties and authority, our chain of command, and other organizational matters to clarify the division of roles, etc.
among the Directors and employees of the Company and its subsidiaries.

(E)

A system to ensure the appropriateness of the business activities by the group consisting of the Company and its
subsidiaries- In the Company, the Internal Audit Office, independent of the business execution departments, is striving tostrengthen the audit function and internal control, and shall audit the operating status of the Group’s business andregularly report to the Board of Directors and the Board of Statutory Auditors about how our compliance system is―44―established and operated.
- The Company has established a system where, when any subsidiary of the Company makes a decision on
managerially material matters, such subsidiary shall seek prior approval for, and report on, such material matters,
etc. from/to the Company, based on the Rules for Division of Duties and Authority for Organization.
(F)

Matters related to the report to the Company about execution of duties by Directors, etc. of its subsidiaries- The Company regularly holds the Group meetings attended by Directors of the Company and directors of its major
subsidiaries, where the subsidiaries are obliged to regularly report about their operating results, financial
conditions, and other material information.
- The Company shall have a system in place for its subsidiaries to report without delay to the Company aboutmaterial matters that could affect the Company’s operations, including an event that might cause the Company
material damage or an event that is in violation of laws and regulations or the Articles of Incorporation.

(G)

Matters related to any employee hired as an assistant for Statutory Auditors if requested by them as well as mattersrelated to the said employee’s independence from Directors and the enforceability of directions- If Statutory Auditors request that we hire an employee as an assistant to effectively conduct the audits by Statutory
Auditors, Directors shall properly deploy personnel after discussion with Statutory Auditors.
- Any decision on personnel matters concerning the employee as an assistant for Statutory Auditors, including thenomination, transfer, and evaluation of the said employee, shall necessitate the prior consent of the Board of
Statutory Auditors. Any directions to such employee shall be given by Statutory Auditors.

(H)

A system for Directors and employees of the Company and its subsidiaries to report to Statutory Auditors, systems
related to other reports to Statutory Auditors and a system to prevent anyone who has reported to Statutory Auditorsfrom being treated unfavorably on grounds of making such report- We shall have a system in place in which the Directors and employees of the Company and its subsidiaries shallreport to Statutory Auditors without delay about any event that might cause the Company or its subsidiaries
material damage, any case, etc. that is in violation of laws and regulations or the Articles of Incorporation, anycase in which such Directors or employees have received a report about the abovementioned event or case, or any
report to the whistleblowing contact points.
- The Company’s Internal Audit Office and the Quality Assurance Dept. shall report to Statutory Auditors aboutaudit results regularly and if necessary.
- The Company and its subsidiaries shall formulate an internal rule that bans treating unfavorably anyone who hasreported to Statutory Auditors of the Company on grounds of making such report and make the Directors andemployees of the Company and its subsidiaries fully understand the rule.

(I)

Other systems to ensure that Statutory Auditors’ audit is effectively conducted- The Board of Statutory Auditors shall hold a regular meeting to exchange views with Representative Director andDirectors including Outside Directors and work closely with the Accounting Auditor and the internal auditing
departments, including the Internal Audit Office and the Quality Assurance Dept.
- If Statutory Auditors request prepayment or reimbursement of the expenses incurred when Statutory Auditors
execute duties, the Company shall promptly deal with such expenses or obligations.

C. Initiatives to eliminate antisocial forces(A) Basic policy for eliminating antisocial forces
The Company shall act in accordance with the Guidelines for Enterprises to Prevent Damage Caused by Antisocial
Forces (Agreement at a Meeting of Cabinet Ministers Responsible for Anti-Crime Measures as of June 19, 2007) andalso in conformity with the Basic Principle resolved at the meeting of the Board of Directors held on January 28,
2008.
(B) Status of establishment of measures to eliminate antisocial forces
a. We work on an initiative to eliminate antisocial forces as a corporate body, with the General Affairs Section of
the General Affairs and Human Resources Dept. serving as the secretariat for such an initiative.
b. We work together with outside specialist bodies: police stations throughout Japan, Osaka Center for Removal of
Criminal Organizations, and Osaka Corporate Defense Countermeasures Federation.
c. We have no relationship with any antisocial forces, including any business relationship.
d. Should we face any civil or criminal case against antisocial forces, we shall act in accordance with instructions
from our corporate lawyer.
e. Not only to ban doing any behind-the-scenes deal with antisocial forces and supplying funds to them, have webeen putting all our energies into our corporate-wide efforts to make the Three No Campaign to Eliminate
Antisocial Forces, “No fears, no money, and no use,” fully understood throughout our corporate operations.
4)

Overview of limited liability agreement
Pursuant to Article 427, Paragraph 1 of the Companies Act and the Articles of Incorporation, the Company has enteredinto agreement with all of its Outside Directors and Statutory Auditors to limit their liability for damages pursuant to Article
423, Paragraph 1 of the Companies Act. The maximum amount of the liability for damages pursuant to the agreement shallbe the amount stipulated by laws and regulations. This limited liability is applicable only if such Outside Directors andStatutory Auditors conducted the duty that has caused liability in good faith and without gross negligence.

5)

Overview of a directors and officers (D&O) liability insurance agreement
The Company has entered into a directors and officers (D&O) liability insurance agreement provided for in Article 430-

―45―

3, Paragraph 1 of the Companies Act with an insurance company, with its Directors and Statutory Auditors as the insured.
The insurance covers the damages that may arise when the insured assumes liability for the execution of his or her duties or
receives a claim related to the pursuit of such liability. Insurance premiums are fully paid by the Company. Such insurance
agreement is scheduled to be renewed during their term of office as Directors and Statutory Auditors.
6)

Requisite number of Directors
The Company stipulates in its Articles of Incorporation that the Board of Directors shall comprise not more than ten
Directors. With Directors having diverse specialties and experiences, the Board of Directors shall oversee businessexecution and make a material decision while ensuring swiftness.

7)

Requirement for resolution of the election of Directors
The Company stipulates in its Articles of Incorporation that a resolution for the election of Directors shall be passed withthe presence of shareholders who represent one-third or more of the total voting rights, and by a majority of the voting
rights held by those shareholders present entitled to exercise their voting rights, but not by cumulative votes.

8)

Purchase of treasury shares
The Company stipulates in its Articles of Incorporation that it may purchase its own shares via the market, etc., subject toa resolution of the Board of Directors in accordance with Article 165, Paragraph 2 of the Companies Act. This is aimed toflexibly carry out management measures such as financial policy in response to any changes in economic conditions.

9)

Requirement for special resolution at the General Meeting of Shareholders
The Company stipulates in its Articles of Incorporation that special resolutions as stipulated in Article 309, Paragraph 2of the Companies Act shall be passed with the presence of shareholders who represent one-third or more of the total voting
rights, and by two-thirds or more of the voting rights held by those shareholders present entitled to exercise their voting
rights. This is aimed to maintain smooth operation of the General Meeting of Shareholders.

10) Transactions with related parties
In the case of conducting transactions with related parties, such as Directors or major shareholders, the Company requires
the approval at the meeting of the Board of Directors in accordance with its internal rules.

―46―

(2) Directors (and other officers)
1) List of Directors/Statutory Auditors
Male: 8, Female: 1 (Ratio of female to Directors/Statutory Auditors: 11.1%)

Title and position

Name

Date of birthPresident andRepresentative
Director

Yuji Sato

Director andChairmanTokuo Kudara

February 2,
1939

Managing Director,
General Manager ofMeat Business Dept.

Shigeki
Fukushima

October 9,
1963

December 25,
1964

Career summary

March 1983
April 2013
April 2018
April 2021
June 2021
February 1960
March 1970
April 1973
October 1981
April 2001
June 2019
June 2021
April 1987
April 2011
April 2017
June 2017
April 2021
April 2022
April 2023
June 2023
April 1985
April 2019

Director in charge ofGeneral Affairs andHuman Resources
Dept. and Quality
Assurance Dept.

June 2021
Toshio Tanaka

January 9,
1963
April 2023

April 2023

April 1979
April 2007

April 2008

Director

Masahiro
Fuchizaki

May 2009
June 2009
April 2010
April 8, 1956
April 2011

June 2011
April 2012
May 2015
June 2019
June 2020
June 2021

Joined the Company
Executive Officer
President and Representative Director, Azumino
Food Co., Ltd.
Managing Executive Officer of the Company
President and Representative Director (to present)
Joined the Company
General Manager, Purchasing Dept.
Director
Managing Director
President and Representative Director
Chairman and Representative Director
Director and Chairman (to present)
Joined the Company
Executive Officer
Senior Executive Officer
Director
Managing Director
President and Representative Director, Marudai
Meat Co., Ltd. (to present)
Managing Executive Officer of the Company
Managing Director (to present)
Joined the Company
Executive Officer, General Manager of General
Affairs and Human Resources Dept. and General
Manager of Environmental Protection OfficeDirector in charge of Quality Assurance Dept.,
General Manager of General Affairs and Human
Resources Dept. and General Manager ofEnvironmental Protection OfficeDirector in charge of General Affairs and Human
Resources Dept. and Quality Assurance Dept. (topresent)
President and Representative Director, MarudaiService Co., Ltd.
(to present)
Joined The Sumitomo Bank, Limited (currently
Sumitomo Mitsui Banking Corporation)
Executive Officer, General Manager of Operations
Planning Dept., Sumitomo Mitsui Banking
Corporation
Executive Officer, Deputy Officer in charge ofOperations Planning Dept. and Operations
Promotion Dept.
Advisor, JSOL Corporation
Director, Senior Managing Director
Managing Executive Officer, Sumitomo Mitsui
Banking Corporation
Managing Executive Officer, Sumitomo Mitsui
Financial Group, Inc.
Director, The Japan Research Institute, Limited
Director, Sumitomo Mitsui Financial Group, Inc.
Director and Senior Managing Executive Officer
Sumitomo Mitsui Banking Corporation
Representative Director, President and CEO, The
Japan Research Institute, Limited
Director and Chairman
Special Advisor (to present)
Outside Director of the Company (to present)―47―

As of June 29,2023

Term

Number ofshares of theCompany
held(Shares)(Note 3)4,600

(Note 3)42,400(Note 3)3,600

(Note 3)

1,400

(Note 3)－

Title and position

Name

Date of birth

Career summary

April 1981
April 2007
April 2014
October 2014
Director

Keiko Kaneko

November 27,
1958

June 2016
April 2018

June 2019
April 2022
June 2022
April 1983
June 2008
June 2018
Full-time Statutory
AuditorToru Miyachi

September 1,
1959

April 2020
June 2020
June 2021
April 1984
February 2007
August 2008

Full-time Statutory
AuditorTakashiMatsuzawa

January 2,
1962

July 2013
June 2015

June 2020
April 1972

Statutory Auditor

MotoakiNishimura

July 9, 1943

June 2012
June 2013
June 2015

Joined Matsushita Electric Industrial Co., Ltd.
(currently Panasonic Corporation)
General Manager, Information Security Division
Assistant to Director, Senior Counsel for Personal
Information Protection, Legal Division
General Manager, Security Compliance Division,
Benesse Holdings, Inc.
General Manager, Information Security Division
Associate Professor, Department of Business Law,
Faculty of Business Administration, Osaka
University of Economics
Outside Director of the Company (to present)
Senior researcher, Center for International
Economic Collaboration (to present)
Outside Director, KYOKUTO KAIHATSU
KOGYO CO., LTD. (to present)
Joined the Company
Statutory Auditor, Marudai Service Co., Ltd.
Retired from the position of Statutory Auditor of
Marudai Service Co., Ltd.
General Manager of General Affairs andAccounting Dept., Pioneer Foods Co., Ltd.
Director
Full-time Statutory Auditor of the Company (topresent)
Joined The Norinchukin Bank
Deputy General Manager of Internal Audit
Division
Deputy General Manager of Agriculture, Fisheryand Forestry Financing Division
General Manager of Office of Audit &Supervisory Board Members
Executive Officer, General Manager of
Administration Div., NOCHU INFORMATIONSYSTEM CO., LTD.
Outside Statutory Auditor of the Company (topresent)
Registered as attorney-at-law (Osaka Bar
Association)
Outside Auditor, Nikkato Co., Ltd.
Outside Statutory Auditor of the Company (topresent)
Outside Director (Audit & Supervisory Committee
Member), Nikkato Co., Ltd. (to present)

Total(Notes)Term

Number ofshares of theCompany
held(Shares)(Note 3)－(Note 4)300

(Note 5)－(Note 6)－52,3001. Directors Mr. Masahiro Fuchizaki and Ms. Keiko Kaneko are Outside Directors.
2. Statutory Auditors Mr. Takashi Matsuzawa and Mr. Motoaki Nishimura are Outside Statutory Auditors.
3. The term of office for Directors is from the conclusion of the Ordinary General Meeting of Shareholders for the
fiscal year ended March 31, 2023, to the conclusion of the Ordinary General Meeting of Shareholders for the fiscal
year ending March 31, 2025.
4. The term of office for Statutory Auditor Mr. Toru Miyachi is from the conclusion of the Ordinary General Meeting of
Shareholders for the fiscal year ended March 31, 2021, to the conclusion of the Ordinary General Meeting of
Shareholders for the fiscal year ending March 31, 2025.
5. The term of office for Statutory Auditor Mr. Takashi Matsuzawa is from the conclusion of the Ordinary General
Meeting of Shareholders for the fiscal year ended March 31, 2020, to the conclusion of the Ordinary General
Meeting of Shareholders for the fiscal year ending March 31, 2024.
6. The term of office for Statutory Auditor Mr. Motoaki Nishimura is from the conclusion of the Ordinary General
Meeting of Shareholders for the fiscal year ended March 31, 2023, to the conclusion of the Ordinary General
Meeting of Shareholders for the fiscal year ending March 31, 2027.

―48―

7. In order to ensure that the number of incumbent Statutory Auditors does not fall short of that required by laws andregulations, the Company has nominated one substitute Statutory Auditor as stipulated in Article 329, Paragraph 3 of
the Companies Act.
The career summary of the candidate for substitute Statutory Auditor is as follows.
Name

Date of birth

Career summary
April 1990

Kenji Tabuchi

May 18, 1959

April 1995
June 2001(Note)

2)

Registered as attorney-at-law (Osaka Bar
Association)
Joined Tsukaguchi Law OfficeOpened Tabuchi Law OfficeTerm

Number ofshares of theCompany held
(Shares)(Note)－

Opened Tabuchi Nishino Law Office (topresent)

The term of office for a substitute Statutory Auditor is from the conclusion of the Ordinary General Meeting of
Shareholders for the fiscal year ended March 31, 2023, to the beginning of the Ordinary General Meeting of
Shareholders for the fiscal year ending March 31, 2024.

Outside Directors (and other officers)
We have two Outside Directors and two Outside Statutory Auditors.
Mr. Masahiro Fuchizaki has a wealth of experience and profound insight through his involvement in corporate
management over the years. He is providing advice concerning overall management of the Company and is fulfilling his
duties as an Outside Director of the Company. For these reasons, the Company judges that he is a suitable person to oversee
business execution of the Company in its pursuit of sustainable growth and medium- to long-term enhancement ofcorporate value.
Ms. Keiko Kaneko has professional knowledge in the legal and information security operations as well as a wealth ofexperience and profound insight. She is providing advice concerning overall management of the Company and is fulfillingher duties as an Outside Director of the Company. For these reasons, the Company judges that she is a suitable person to
oversee business execution of the Company in its pursuit of sustainable growth and medium- to long-term enhancement ofcorporate value.
Mr. Takashi Matsuzawa has years of experience at a financial institution and profound insight into financial andaccounting affairs and is contributing to enhancing the Company’s audit systems. For these reasons, the Company judgesthat he is indispensable for the Company’s audit systems.
Mr. Motoaki Nishimura has a high level of expertise and profound insight as an attorney-at-law. He performs his duties
of monitoring and supervision of the management from a professional, neutral and objective point of view and contributes
to the enhancement of corporate governance of the Company. For these reasons, the Company judges that he isindispensable for the Company’s audit systems.
There are no human relationships, financial relationships, transaction relationships, or any other interests between
Outside Directors/Statutory Auditors and the Company.
We have formulated and made public our Independence Standards for Outside Directors/Statutory Auditors as the
specific criteria for us to make a judgment concerning their independence, based on the independence criteria set forth by arelevant financial instruments exchange.
The Independence Standards for Outside Directors/Statutory Auditors formulated by the Company are as follows:[Independence Standards for Outside Directors/Statutory Auditors]
If any of the following attributes applies to an Outside Director/Statutory Auditor of the Company, the Company
judges that such Outside Director/Statutory Auditor is not fully independent from the Company.
(1)

An executive person (Note 1) of the Company or consolidated subsidiaries of the Company (hereinafter referred
to as the “Marudai Food Group”)(2)

A party to whom any of 1) to 9) below applied in the past three years
1) A party whose principal business partner is the Marudai Food Group (Note 2) or its executive person
2) A principal business partner of the Marudai Food Group (Note 3) or its executive person
3) A principal lender to the Marudai Food Group (Note 4) or its executive person4) A major shareholder (directly or indirectly holding 10% or more of the total voting rights) of the Company or
its executive person5) A party of which the Company is a major shareholder (directly or indirectly holding 10% or more of the total
voting rights) or its executive person6) A party affiliated with an audit firm that is the Accounting Auditor of the Marudai Food Group
7) A party who received remuneration exceeding 10 million yen a year excluding the Directors’ or Auditors’
remuneration
8) A party who received donations exceeding a certain limit (Note 5) from the Marudai Food Group or its
executive person
9) An executive person of an entity for which an executive person of the Marudai Food Group serves as a
Director/Statutory Auditor(3)

The spouse or relative in the second degree of kinship of a party to whom (1) or (2) above applies and who holds
an important position (Note 6)―49―

(Notes)
1. An “executive person” means an executive director, an executive officer, a general manager, a party in a similar
position, and an employee of an organization such as a corporation.
2. A “party whose principal business partner is the Marudai Food Group” means a party who received payment fromthe Group equal to 2% or more of the party’s consolidated annual sales in the most recent fiscal year.
3. A “principal business partner of the Marudai Food Group” means a party whose payment to the Company was
equal to 2% or more of the Company’s consolidated annual sales in the most recent fiscal year.
4. A “principal lender to the Marudai Food Group” is a lender from which the Marudai Food Group borrows anamount equal to 2% or more of consolidated total assets.
5. “Donations exceeding a certain limit” means donations to an organization such as a corporation that amount to 10
million yen a year or more or that are equal to 2% or more of net sales or total revenues of such organization,
whichever is larger.
6. A “party who holds an important position” means a director, an executive, an executive officer, or a party who
executes important business and holds the position of general manager or higher.
In light of guaranteeing the objectivity and independence of the Board of Directors overall, the Company has notified theTokyo Stock Exchange of Outside Directors Mr. Masahiro Fuchizaki and Ms. Keiko Kaneko and Outside Statutory
Auditors Mr. Takashi Matsuzawa and Mr. Motoaki Nishimura as Independent Directors/Statutory Auditors, in accordancewith the standards above.
If the Company’s Outside Directors/Statutory Auditors concurrently serve as director or auditor at publicly listedcompanies other than the Company, they will limit the liabilities they assume to a reasonable range, taking into
consideration their own fiduciary duties.
Outside Directors contribute to strengthening our corporate governance by providing advice concerning overallmanagement of the Company while overseeing its management. Outside Statutory Auditors’ efforts to conduct effective
audits include overseeing business execution of the Company in light of the professional knowledge in financial and legal
areas they have acquired through abundant operational experience; closely working with the Internal Audit Office, asupervising department in charge of internal audits and control; and exchanging information and views with the Accounting
Auditor. With regard to our elected Outside Directors/Statutory Auditors, we consider that the current system to oversee andsupervise business execution of the Company is adequate, given our business scale, operations, etc.
(3) Audits
1) Audits by Statutory Auditors
A. Organization and personnel of the Board of Statutory Auditors
The Statutory Auditors of the Company comprises three members: two full-time Statutory Auditors (including one
Outside Statutory Auditor) and one part-time Statutory Auditor (Outside Statutory Auditor). The two Outside Statutory
Auditors satisfy the requirements for Independent Statutory Auditors set forth by the Company. Full-time Statutory
Auditor (Outside Statutory Auditor) Mr. Takashi Matsuzawa has abundant knowledge about financial and accounting
affairs through his experience and expertise in financial institutions over the years. Full-time Statutory Auditor Mr. Toru
Miyachi has a wealth of operational experience in the Company’s general affairs and human resources department andcorporate strategy department, among others, and extensive knowledge derived from his past positions such as Director
at the Group company. Outside Statutory Auditor Mr. Motoaki Nishimura has abundant knowledge and experience andprofound insight as an attorney-at-law and performs monitoring and provides suggestions from objective and neutral
point of view.
We have no full-time staff members who provide support for the Board of Statutory Auditors. We instead have asystem in which each department provides Statutory Auditors in a timely and accurate manner with the information,material, etc. necessary for them to execute duties.
B. Activities of Statutory Auditors and the Board of Statutory Auditors
The meetings of the Board of Statutory Auditors are held, in principle, once a month in accordance with the Rules for
the Statutory Auditors. Attendance of each Statutory Auditor is shown below.
Title and position

Name

Attendance

Full-time Statutory Auditor

Toru Miyachi

14 out of 14 meetings (100%)

Full-time Statutory Auditor (Outside)

Takashi Matsuzawa

14 out of 14 meetings (100%)

Part-time Statutory Auditor (Outside)

Motoaki Nishimura

14 out of 14 meetings (100%)

The meeting of the Board of Statutory Auditors is held to deliberate and resolve material matters related to the audit
policy and plan as well as audits. The Board of Statutory Auditors also holds a regular meeting to exchange views withRepresentative Director and to interview Directors, Executive Officers and other relevant parties concerning the status of
their business execution once every six months. In accordance with the Rules for the Board of Statutory Auditors, theStandards for Audits by Statutory Auditors, and the audit policy and audit plan, etc., Statutory Auditors attended themeeting of the Board of Directors and other material meetings, reviewed important approval documents and othermaterial, and conducted audits at the Head Office and also by visiting major operational bases and Group companies,
with a focus on how Directors, Executive Officers and other employees had worked on the compliance with laws andregulations and how they had established and operated the internal control system, among others. In addition, Statutory
Auditors conducted effective audits by closely working with the internal auditing departments (the Internal Audit Officeand the Quality Assurance Dept), Statutory Auditors of Group companies and the Accounting Auditor, including
exchanging information and views and holding discussions with them.

―50―

2)

Internal audits
We have the Internal Audit Office, which comprises eight members, under the direct authority of President andRepresentative Director as one of the internal auditing departments, which conducts business audits and internal control
evaluation based on the Financial Instruments and Exchange Act. It makes a fair and objective judgment about whether theGroup’s business has been executed properly in terms of compliance with laws and regulations, operational efficiency,
credibility of financial statements, and preservation of assets, and provides advice or recommendations accordingly. It
strives to enhance the internal auditing functions by conducting checkup of improvement status and follow-up.
The Internal Audit Office reports to personnel in charge of relevant departments about results of internal audits asnecessary, and also to the Board of Directors and the Board of Statutory Auditors directly to ensure the effectiveness ofinternal audits. The Internal Audit Office also exchanges views with an audit firm as the Accounting Auditor about the
information on the internal control status, risk evaluations, etc. obtained by the audit firm as well as about audit results,
maintaining close cooperation with the audit firm.

3)

Accounting audits
A. Name of the audit firm
KPMG AZSA LLC
B. Consecutive auditing period
32 years
C. Certified public accountants engaged in the accounting audit services
Designated Limited Liability Partner
Engagement Partner
Takahide Nakahata
Designated Limited Liability Partner
Engagement Partner
Satoru Komatsuno
Neither of them has engaged in the Company’s audits for more than seven consecutive fiscal periods.
D. Assistants for the accounting audits
Certified Public Accountant:
Persons who have passed the CPA examination:
Other:

10 persons
7 persons
12 persons

E. Policy and reason for selecting audit firm
The Board of Statutory Auditors has set the following policy: it shall verify the appropriateness of the reason why the
executive management departments have selected the Accounting Auditor as a candidate for the Company’s Accounting
Auditor and the appropriateness of the process in which the executive management departments have examinedcandidates for an Accounting Auditor; the Board of Statutory Auditors shall ask the candidates to provide material
concerning the following items, etc. and have interviews with them. If the Board of Statutory Auditors judges a certain
candidate appropriate, it shall decide to select the said candidate as an Accounting Auditor.
- Overview of a candidate for an Accounting Auditor- Any factor for disqualification- The candidate’s internal control system- Standards for audit remuneration- Matters related to the execution of duties concerning the Accounting Auditor’s independence stipulated in Article 131of the Regulations on Corporate Accounting
In the case of reappointment of the Accounting Auditor, the Board of Statutory Auditors determines whether or not thesaid Accounting Auditor is appropriate for reappointment based on its audit activities, including how the said Accounting
Auditor has executed duties, how its audit system is structured, how independent its audit is, how specialized it is, andthrough what process the executive management departments have examined and decided on the reappointment of it.
As for the policy for dismissal and non-reappointment of the Accounting Auditor, the Board of Statutory Auditors shalldismiss the Accounting Auditor with the consent of all the Statutory Auditors if the Accounting Auditor is deemed to fallunder any one of the items in Article 340, Paragraph 1 of the Companies Act. In such a case, the Statutory Auditor
selected by the Board of Statutory Auditors shall report the fact that it has dismissed the Accounting Auditor and thereason for the dismissal at the first General Meeting of Shareholders to be held after such dismissal.
Besides the above case, if the Board of Statutory Auditors determines that the said Accounting Auditor is unable toconduct proper audits because it is not appropriate as an Accounting Auditor or independent enough, or that a change of
the Accounting Auditor is deemed reasonable to improve the appropriateness of audits, the Board of Statutory Auditors
shall dismiss or shall not reappoint the Accounting Auditor and shall instead submit a proposal to the General Meeting of
Shareholders to elect a new Accounting Auditor.
F. Assessment of the audit firm by Statutory Auditors and the Board of Statutory Auditors
The Board of Statutory Auditors has set evaluation guidelines and standards for the Accounting Auditor regarding thefollowing items and evaluates their appropriateness every fiscal year.
- How the audit firm manages quality- How independent and specialized the audit firm (team) is- How adequate and reasonable the audit firm’s audit plan and activities are- Whether the audit firm has made audit reports in accordance with laws and regulations, and how cooperative theaudit firm has been with Statutory Auditors- Whether or not the audit firm’s estimation of the time required for an audit as well as audit remuneration areappropriate, etc.
In addition to these items, the Board of Statutory Auditors had a deliberation by referring to the evaluation of the―51―Accounting Auditor by the executive management departments and internal auditing departments. As a result, the Boardof Statutory Auditors has determined that KPMG AZSA LLC has conducted adequate audits and the evaluation results
are appropriate, and judged that its reappointment is therefore reasonable.
4)

Details of audit remuneration
A. Details of remuneration for auditing certified public accountants, etc.
(Millions of yen)
Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023

Remuneration inaccordance with audit
certification

Remuneration inaccordance with nonaudit certification

Remuneration inaccordance with audit
certification

Remuneration inaccordance with nonaudit certification

Reporting company

68

－

67

－

Consolidated subsidiaries

－

－

－

－

Total

68

－

67

－

Category

B. Remuneration to the same network (KPMG) as auditing certified public accountants, etc. (excluding A)(Millions of Thai baht)
Fiscal year ended March 31, 2022
Category

Fiscal year ended March 31, 2023

Remuneration inaccordance with audit
certification

Remuneration inaccordance with nonaudit certification

Remuneration inaccordance with audit
certification

Remuneration inaccordance with nonaudit certification

Reporting company

－

0

－

0

Consolidated subsidiaries

－

－

－

－

Total

－

0

－

0

As non-audit certification for the Company, we pay remuneration for the income tax return services for the representatives at
our Thailand office.
C. Details of remuneration in accordance with other important audit certification services
Not applicable.
D. Policy for deciding audit remuneration
Not applicable.
E. Reasons for the Board of Statutory Auditors’ consent to remuneration, etc. for the Accounting Auditor
The Board of Statutory Auditors conducted necessary verification on what the Accounting Auditor’s audit plan was,
how the Accounting Auditor had been conducting accounting audits for the previous fiscal years, and whether the basefor calculating the estimated remuneration was appropriate, by obtaining necessary material or reports from Directors,
relevant divisions in the Company, and the Accounting Auditor. As a result, the Board of Statutory Auditors has
determined that the Accounting Auditor ensured audit quality and guaranteed its independence in a reasonable manner,and therefore given the consent specified in Article 399, Paragraph 1 of the Companies Act to the amount of the
remuneration, etc. for the Accounting Auditor.

―52―

(4) Remuneration for Directors and Statutory Auditors
1) Matters relating to the policy for determining the amount of remuneration for Directors and Statutory Auditors or the
method of calculating such amountThe Company has established a policy for determining the details of remuneration for individual Directors (hereinafterreferred to as the “Determination Policy”) that provides that remuneration for individual Directors shall be determined byconsidering both existing payment criteria based on the Company’s performance, practices, etc. and the contribution ofrespective Directors to the Company performance etc., for the purpose of motivating Directors to contribute to theCompany’s sustained growth and medium- to long-term corporate value enhancement. The remuneration for Directors, inprinciple, consists of fixed remuneration and performance-linked bonuses. A policy on the determination of the payment ratioof performance-linked remuneration and compensation other than performance-linked remuneration provides that the ratio
shall not be fixed. Rather, the Nomination and Remuneration Committee shall discuss it at the request of the Board of
Directors and Representative Director, taking into account the existing payment criteria based on the Company’s
performance, practices, etc. as well as remuneration standards among companies with similar business scale, and thepayment ratio shall be determined based on the Committee’s findings.
The Determination Policy has been established pursuant to the resolution of the Board of Directors, which was based on
the findings of the Nomination and Remuneration Committee that deliberated the validity and appropriate operation of
remuneration system relating to individual Directors’ fixed remuneration, performance-linked remuneration, etc., at therequest of the Board of Directors and the Representative Director. The Board of Directors decided that respective Directors’
remuneration, etc. are in line with the Determination Policy, because the proposed amounts of respective Directors’
remuneration have been deliberated and discussed extensively, including its validity in light of the Determination Policy, andreported to the Board of Directors, by the Nomination and Remuneration Committee, and the Board of Directors respected
the Committee’s findings.
Pursuant to the resolution at the 63rd Ordinary General Meeting of Shareholders held on June 29, 2011, the Company setsmaximum monthly remuneration for Directors at 30 million yen (including 3 million yen for Outside Directors but excluding
the employee portion of salaries of employees concurrently serving as Directors). The number of Directors as of theconclusion of the above Ordinary General Meeting of Shareholders was nine (including two Outside Directors). In addition,
pursuant to the resolution at the 46th Ordinary General Meeting of Shareholders held on June 29, 1994, the Company setsmaximum monthly remuneration for Statutory Auditors at 5 million yen. The number of Statutory Auditors as of theconclusion of the Ordinary General Meeting of Shareholders concerned was four (including two Outside Statutory Auditors).
The Company has introduced a short-term performance-linked remuneration system for its Directors. The total amount of
the performance-linked remuneration is determined with a ceiling of 1% of the consolidated operating profit. Proposed
remuneration paid to each individual Director is calculated taking into consideration his/her title and responsibilities as well
as existing payment criteria for each position based on performance, practices, etc. The Nomination and Remuneration
Committee deliberates the proposal and reports the findings to the Board of Directors, and the final performance-linked
remuneration for individual Directors is decided upon the resolution of the Board of Directors based on such findings.
The performance indicator chosen as the basis for calculating the amount of performance-linked remuneration, etc. is theconsolidated operating profit. This is because the consolidated operating profit indicates the Group’s overall business results
and the Group considers it to be an important indicator. The fiscal year ended March 31, 2023 recorded an operating loss of
1,400 million yen. Therefore, performance-linked remuneration, etc. is not paid.
2)

Total amount of remuneration by categories and type, and the number of paid Directors and Statutory Auditors
Total amount of remuneration by type(Millions of yen)
Total amount
Number ofCategory(Millions of
PerformanceBonuses andpersonsFixedyen)linkedretirement
remuneration
remuneration
benefits
Directors (excluding
85
85
－
－
4
Outside Directors)
Statutory Auditor(excluding Outside
8
8
1
－
－
Statutory Auditors)
OutsideDirectors/Statutory
28
28
4
－
－
Auditors

3)

The total amounts of remuneration paid to individual Directors and Statutory Auditors of the Company
This information is omitted as none of Directors and Statutory Auditors of the Company received aggregatedconsolidated remuneration of 100 million yen and above.

4)

Significant amount of employee’s salary paid to Directors who concurrently serve as employees
Not applicable.

―53―

(5) Shareholdings
1) Criteria for and approach to the classification of investment securities
The Company classifies investment securities into two types: securities held to yield profit through changes in their value
and receiving dividend are classified as investment securities held for pure investment purposes; and the other securities areclassified as investment securities held for purposes other than pure investment (strategic shareholdings). The Company only
holds investment securities held for purposes other than pure investment (strategic shareholdings), and does not hold any
investment securities held for pure investment purposes.
2)

About investment securities held for purposes other than pure investment (strategic shareholdings)
A. Policy on strategic shareholdings
The Company believes that it is critical to cooperate with a variety of companies at every phase of business operations
such as research and development, manufacturing, logistics, sales, services and financing. Based on this belief, theCompany makes it its policy to own shares in another company as strategic shareholding only when the Company
decides that it will contribute to the Company’s sustained growth and medium- to long-term corporate valueenhancement, taking overall business relationship/strategy, etc. into consideration.
B. Means to verify the appropriateness of shareholding and the Board of Directors’ verification of the appropriateness of
individual holdings
Individual strategic shareholdings are subject to verification of their holding purpose and rationale, etc., taking into
consideration factors such as the Company’s sustained growth and medium- to long-term corporate value enhancement
as well as the maintenance and enhancement of overall relationship with the relevant business partners, and reported eachyear to the Board of Directors for comprehensive deliberation regarding the justification of their holding.
The verification of shareholding rationale includes determining whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital.
C. Criteria for exercising voting rights associated with strategic shareholdings
The Company exercises its voting rights appropriately through a comprehensive assessment of whether theshareholding concerned contributes to the sustained growth of and medium- to long-term corporate value enhancement
for the Company and the companies in which it invests.
D. Number of stocks and their book value on the balance sheet
Number of
Total book value on theissues (Issue) balance sheet (Millions of yen)
Unlisted stocks

838

Stocks other than unlisted
stocks57

11,359(Stocks in which the Company increased its stake during the current fiscal year)

Number ofissues (Issue)

Total amount of purchasecosts relating to the increasein number of shares(Millions of yen)

Unlisted stocks

－

－

－

Stocks other than unlisted
stocks17

34

Purchase through business partner’s
shareholding association(Stocks in which the Company decreased its stake during the current fiscal year)

Number ofissues (Issue)

Total amount of sales value
relating to the decrease in
number of shares(Millions of yen)

Unlisted stocks－－

Stocks other than unlisted
stocks

1

895

―54―

Reason for increaseE. Information on the number of shares and book value on the balance sheet, etc. per specified investment stocks
Although it is difficult to describe the quantitative effect of shareholding, when considering its effect on business
relationship or the stock market, the Company has verified the appropriateness of the purpose of each individual
shareholding. In addition, the Company has verified shareholding rationale by evaluating whether loss or gain on
valuation, dividend yields, transaction amounts, etc. are proportionate to the cost of capital, including the qualitative
effect of the shareholding.
Specified investment stocks

Issue

Aeon Co., Ltd.

Izumi Co., Ltd.

Sumitomo Mitsui
Financial Group, Inc.

Sumitomo
Corporation

Sumitomo Mitsui
Trust Holdings, Inc.

Rengo Co., Ltd.

Sapporo Holdings
LimitedCurrent fiscal year Previous fiscal year
Whether the
Number of shares
Number of shares
Purpose of shareholding, overview of businessissuer holds(Shares)(Shares)
relationship, quantitative effect of shareholding and a stake inBook value on the Book value on thereason for increase in its stakethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company conducts transactions in processed
1,054,124
1,049,153 food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theCompany has been holding a stake in the company
concerned to maintain and enhance the businessNo
relationship and cooperation with it. The number
2,704
2,737
of shares of the company concerned that theCompany holds increased by 4,971 shares throughpurchase by the business partner’s shareholding
association.
381,260
381,260 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
1,199
1,227 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts financial transactions with
213,000
213,000
the consolidated subsidiaries of the company
concerned. Taking this business relationship into
No
consideration, the Company has been holding a(Note) 2.
1,128
832
stake in the company concerned to maintain andenhance stable financial relationship with it.
The Company purchases raw materials etc. from
413,000
826,000 the consolidated subsidiaries of the company
concerned. Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andYes
966
1,750 enhance the business relationship and cooperation
with it. Due to the sale of part of its stake, thenumber of shares of the company concerned that
the Company holds decreased by 413,000 shares.
The Company conducts financial transactions with
206,067
206,067
the consolidated subsidiaries of the company
concerned. Taking this business relationship into
No
consideration, the Company has been holding a(Note) 3.
935
824
stake in the company concerned to maintain andenhance stable financial relationship with it.
653,000
653,000 The Company purchases materials etc. from thecompany concerned. Taking this business
relationship into consideration, the Company has
Yes560
510 been holding a stake in the company concerned tomaintain and enhance the business relationship andcooperation with it.
The Company purchases products from the109,200
109,200
consolidated subsidiaries of the company
concerned. Taking this business relationship into
consideration, the Company has been holding a
Yes371
251 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.

―55―

IssueOUG Holdings Inc.

Nippon Shinyaku
Co., Ltd.

Lawson, Inc.

Seven & i Holdings
Co., Ltd.

Kansai Food Market
Ltd.

United Super
Markets Holdings
Inc.

Retail Partners Co.,Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of shares
Purpose of shareholding, overview of businessissuer holds(Shares)(Shares)
relationship, quantitative effect of shareholding and a stake inBook value on the Book value on thereason for increase in its stakethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company purchases raw materials etc. from
115,000
115,000
the consolidated subsidiaries of the company
concerned. Taking this business relationship into
consideration, the Company has been holding a
Yes
286
314 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
47,50047,500 The Company purchases raw materials etc. fromthe company concerned. Taking this business
relationship into consideration, the Company has
Yes276
395 been holding a stake in the company concerned tomaintain and enhance the business relationship andcooperation with it.
39,65839,658 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
No222
185 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
36,52036,520food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theNo
218
212 Company has been holding a stake in the company
concerned to maintain and enhance the business
relationship and cooperation with it.
The Company conducts transactions in processed
135,156
132,148 food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theCompany has been holding a stake in the company
concerned to maintain and enhance the businessNo
relationship and cooperation with it. The number
202
161
of shares of the company concerned that theCompany holds increased by 3,008 shares throughpurchase by the business partner’s shareholding
association.
The Company conducts transactions in processed
180,733
180,733
food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theNo
201
190 Company has been holding a stake in the company
concerned to maintain and enhance the business
relationship and cooperation with it.
The Company conducts transactions in processedfood products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theCompany has been holding a stake in the company
No
133,991
131,733 concerned to maintain and enhance the business(Note) 4.
relationship and cooperation with it. The numberof shares of the company concerned that theCompany holds increased by 2,258 shares throughpurchase by the business partner’s shareholding
association.

―56―

IssueCurrent fiscal year Previous fiscal year
Number of shares
Number of shares
Whether the(Shares)(Shares)
Purpose of shareholding, overview of businessissuer holds
Book value on the Book value on therelationship,
quantitative
effectofshareholding
anda stake inbalance sheet
balance sheet
reason for increase in its stakethe(Millions of yen)
(Millions of yen)Company
182
189
42,60042,600146

151

56,55456,092

145

176

82,00082,000134110158,300

158,300

Kaneka Corporation

Life Corporation

Kanematsu
Corporation

Mitsubishi UFJ
Financial Group, Inc.

134

120

63,994

63,214110

146

73,543

72,10794

97

108,150

108,150

79

67

Fuji Co., Ltd.

Inageya Co., Ltd.

The San-in Godo
Bank, Ltd.

The Company purchases raw materials etc. fromthe consolidated subsidiaries of the company
concerned. Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andenhance the business relationship and cooperation
with it. The number of shares of the company
concerned that the Company holds increased by
462 shares through purchase by the business
partner’s shareholding association.
The Company purchases raw materials etc. fromthe company concerned. Taking this business
relationship into consideration, the Company has
been holding a stake in the company concerned tomaintain and enhance the business relationship andcooperation with it.
The Company conducts financial transactions withthe consolidated subsidiaries of the company
concerned. Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andenhance stable financial relationship with it.
The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andenhance the business relationship and cooperation
with it. The number of shares of the company
concerned that the Company holds increased by
780 shares through purchase by the business
partner’s shareholding association.
The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andenhance the business relationship and cooperation
with it. The number of shares of the company
concerned that the Company holds increased by
1,436 shares through purchase by the business
partner’s shareholding association.
The Company conducts financial transactions withthe company concerned. Taking this business
relationship into consideration, the Company has
been holding a stake in the company concerned tomaintain and enhance stable financial relationshipwith it.

―57―

Yes

No

Yes

No
(Note) 5.

No

No

Yes

IssueArcs Company,
LimitedThe Chiba Bank, Ltd.

Axial Retailing Inc.

H2O Retailing
Corporation

AEON Hokkaido
Corporation

Chugin Financial
Group, Inc.
(Note) 6.

Albis Co., Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of shares
Purpose of shareholding, overview of businessissuer holds(Shares)(Shares)
relationship, quantitative effect of shareholding and a stake inBook value on the Book value on thereason for increase in its stakethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company conducts transactions in processed
34,312
34,140 food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theCompany has been holding a stake in the company
concerned to maintain and enhance the businessNo
77
72 relationship and cooperation with it. The numberof shares of the company concerned that theCompany holds increased by 172 shares throughpurchase by the business partner’s shareholding
association.
89,25089,250 The Company conducts financial transactions withthe company concerned. Taking this business
relationship into consideration, the Company hasYes76
64 been holding a stake in the company concerned tomaintain and enhance stable financial relationshipwith it.
The Company conducts transactions in processed
20,61820,413 food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theCompany has been holding a stake in the company
concerned to maintain and enhance the businessNo
70
65 relationship and cooperation with it. The numberof shares of the company concerned that theCompany holds increased by 205 shares throughpurchase by the business partner’s shareholding
association.
The Company conducts transactions in processed
47,25047,250food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theNo
70
40 Company has been holding a stake in the company
concerned to maintain and enhance the business
relationship and cooperation with it.
75,90075,900 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
61
85 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts financial transactions with
67,20067,200the consolidated subsidiaries of the company
concerned. Taking this business relationship into
No
consideration, the Company has been holding a(Note) 7.
59
58
stake in the company concerned to maintain andenhance stable financial relationship with it.
The Company conducts transactions in processed
20,743
20,204 food products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andNoenhance the business relationship and cooperation
51
45 with it. The number of shares of the company
concerned that the Company holds increased by
539 shares through purchase by the business
partner’s shareholding association.

―58―

IssueOM2 Network Co.,Ltd.

The Bank of Kyoto,
Ltd.

Mebuki Financial
Group, Inc.

MINISTOP Co., Ltd.

Okuwa Co., Ltd.

Hirogin Holdings,
Inc.

AEON Kyushu Co.,Ltd.

Valor Holdings Co.,Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of shares
Purpose of shareholding, overview of businessissuer holds(Shares)(Shares)
relationship, quantitative effect of shareholding and a stake inBook value on the Book value on thereason for increase in its stakethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company conducts transactions in processed
42,981
41,169 food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theCompany has been holding a stake in the company
concerned to maintain and enhance the businessNo
relationship and cooperation with it. The number
51
44
of shares of the company concerned that theCompany holds increased by 1,812 shares throughpurchase by the business partner’s shareholding
association.
8,000
8,000 The Company conducts financial transactions withthe company concerned. Taking this business
relationship into consideration, the Company hasYes50
42 been holding a stake in the company concerned tomaintain and enhance stable financial relationshipwith it.
The Company conducts financial transactions with
149,292
149,292
the consolidated subsidiaries of the company
concerned. Taking this business relationship into
No
consideration, the Company has been holding a(Note) 8.
48
38
stake in the company concerned to maintain andenhance stable financial relationship with it.
33,67433,674 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
47
48 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
49,031
46,191 food products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andNoenhance the business relationship and cooperation
41
42 with it. The number of shares of the company
concerned that the Company holds increased by
2,840 shares through purchase by the business
partner’s shareholding association.
The Company conducts financial transactions with
60,50060,500the consolidated subsidiaries of the company
concerned. Taking this business relationship into
No
consideration, the Company has been holding a(Note) 9.
37
39
stake in the company concerned to maintain andenhance stable financial relationship with it.
The Company conducts transactions in processed
15,42315,098 food products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andNoenhance the business relationship and cooperation
35
31 with it. The number of shares of the company
concerned that the Company holds increased by
325 shares through purchase by the business
partner’s shareholding association.
The Company conducts transactions in processed
15,84015,840food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theNo
30
33 Company has been holding a stake in the company
concerned to maintain and enhance the business
relationship and cooperation with it.

―59―IssueResona Holdings,
Inc.

Yamaguchi Financial
Group, Inc.

Belc Co., Ltd.

HEIWADO Co., Ltd.

Halows Co., Ltd.

Eco’s Co., Ltd.

Yamanaka Co., Ltd.

Kanemi Co., Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of shares
Purpose of shareholding, overview of businessissuer holds(Shares)(Shares)
relationship, quantitative effect of shareholding and a stake inBook value on the Book value on thereason for increase in its stakethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company conducts financial transactions with
44,20044,200the consolidated subsidiaries of the company
concerned. Taking this business relationship into
No
consideration, the Company has been holding a(Note) 10.
28
23
stake in the company concerned to maintain andenhance stable financial relationship with it.
The Company conducts financial transactions with
34,00034,000the consolidated subsidiaries of the company
concerned. Taking this business relationship into
No
consideration, the Company has been holding a(Note) 11.
27
23
stake in the company concerned to maintain andenhance stable financial relationship with it.
4,400
4,400 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
24
23 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
11,00011,000 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
22
20 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
6,000
6,000 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
19
18 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
10,00010,000 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
18
20 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
24,646
23,666 food products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andNoenhance the business relationship and cooperation
17
16 with it. The number of shares of the company
concerned that the Company holds increased by
980 shares through purchase by the business
partner’s shareholding association.
The Company conducts transactions in processed
4,872
4,625 food products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andNoenhance the business relationship and cooperation
13
12 with it. The number of shares of the company
concerned that the Company holds increased by
247 shares through purchase by the business
partner’s shareholding association.

―60―

IssueMammy Mart
Corporation

Oomitsu Co., Ltd.

Ocean System
Corporation

Poplar Co., Ltd.

Maruyoshi Center
Inc.

Central Forest Group,
Inc.

Kakiyasu Honten
Co., Ltd.

Gourmet Kineya Co.,Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of shares
Purpose of shareholding, overview of businessissuer holds(Shares)(Shares)
relationship, quantitative effect of shareholding and a stake inBook value on the Book value on thereason for increase in its stakethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
5,000
5,000 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
1111 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
18,333
17,269 food products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andNoenhance the business relationship and cooperation
11
12 with it. The number of shares of the company
concerned that the Company holds increased by
1,064 shares through purchase by the business
partner’s shareholding association.
10,00010,000 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
99 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
65,95465,954 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
99 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
2,000
2,000 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
55 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
3,000
3,000
food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisNobusiness relationship into consideration, the(Note) 12.
5
5 Company has been holding a stake in the company
concerned to maintain and enhance the business
relationship and cooperation with it.
The Company conducts transactions in processed
2,361
2,130 food products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding a
stake in the company concerned to maintain andNoenhance the business relationship and cooperation
5
5 with it. The number of shares of the company
concerned that the Company holds increased by
231 shares through purchase by the business
partner’s shareholding association.
3,300
3,300 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
3
3 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.

―61―

IssueIsetan Mitsukoshi
Holdings Ltd.

Olympic Group
Corporation

COSMOS
Pharmaceutical
Corporation

Maxvalu Tokai Co.,
Ltd.

Three F Co., Ltd.

(Notes)Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of shares
Purpose of shareholding, overview of businessissuer holds(Shares)(Shares)
relationship, quantitative effect of shareholding and a stake inBook value on the Book value on thereason for increase in its stakethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company conducts transactions in processed
1,983
1,867 food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theCompany has been holding a stake in the company
concerned to maintain and enhance the businessNo2
1 relationship and cooperation with it. The numberof shares of the company concerned that theCompany holds increased by 116 shares throughpurchase by the business partner’s shareholding
association.
The Company conducts transactions in processed
5,500
5,500
food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theNo
2
3 Company has been holding a stake in the company
concerned to maintain and enhance the business
relationship and cooperation with it.
200
200 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
2
2 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
708
708 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into
consideration, the Company has been holding aNo
1
1 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
6,050
6,050
food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theNo
1
1 Company has been holding a stake in the company
concerned to maintain and enhance the business
relationship and cooperation with it.

1. Although the book values of the stocks of AEON Hokkaido Corporation and the companies thereunder on the
consolidated balance sheet are not larger than 1% of the Company’s share capital, we covered the top 60 issues inthis section.
2. Sumitomo Mitsui Banking Corporation, a consolidated subsidiary of Sumitomo Mitsui Financial Group, Inc., holds
the Company’s shares.
3. Sumitomo Mitsui Trust Bank, Limited, a consolidated subsidiary of Sumitomo Mitsui Trust Holdings, Inc., holds theCompany’s shares.
4. Marukyu Co., Ltd., a consolidated subsidiary of Retail Partners Co., Ltd., holds the Company’s shares.
5. MUFG Bank, Ltd., a consolidated subsidiary of Mitsubishi UFJ Financial Group, Inc., holds the Company’s shares.
6 Chugin Financial Group, Inc. was established through a share transfer solely by The Chugoku Bank, Limited
effective as of October 3, 2022.
7. The Chugoku Bank, Limited, a consolidated subsidiary of Chugin Financial Group, Inc., holds the Company’s shares.
8. Joyo Bank, Ltd. and The Ashikaga Bank, Ltd., consolidated subsidiaries of Mebuki Financial Group, Inc., hold theCompany’s shares.
9. The Hiroshima Bank, Ltd., a consolidated subsidiary of Hirogin Holdings, Inc., holds the Company’s shares.
10. Resona Bank, Limited., a consolidated subsidiary of Resona Holdings, Inc., holds the Company’s shares.
11. The Yamaguchi Bank, Ltd., a consolidated subsidiary of Yamaguchi Financial Group, Inc., holds the Company’s
shares.
12. Tokan Co., Ltd., a consolidated subsidiary of Central Forest Group, Inc., holds the Company’s shares.

―62―

V.

Financial Information

1. Preparation of the consolidated/non-consolidated financial statements(1) The Company’s consolidated financial statements are prepared in accordance with the “Regulation on Terminology, Forms, andPreparation Methods of Consolidated Financial Statements” (Ordinance of Ministry of Finance No. 28, 1976 / hereinafterreferred to as the “Consolidated Financial Statements Regulations”).
(2)

The Company’s non-consolidated financial statements are prepared in accordance with the “Regulation on Terminology, Forms,
and Preparation Methods of Financial Statements” (Ordinance of Ministry of Finance No. 59, 1963 / hereinafter referred to as
the “Non-Consolidated Financial Statements Regulations”).
As a company designated for the submission of financial statements prepared in accordance with special provision, theCompany prepares its non-consolidated financial statements pursuant to Article 127 of the Non-Consolidated Financial
Statements Regulations.

2. Independent auditor’s report
Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, the Company’s consolidated/nonconsolidated financial statements for the current fiscal year (from April 1, 2022 through March 31, 2023) were audited by KPMG
AZSA LLC.
3. Specific efforts to secure the appropriateness of the consolidated financial statements, etc.
The Company makes specific efforts to secure the appropriateness of the consolidated financial statements, etc. For example, inorder to establish a mechanism to correctly understand the details of accounting standards, the Company has joined the Financial
Accounting Standards Foundation. In addition, the Company attends the relevant seminars organized by external institutions andsubscribes to accounting magazines to address any change in accounting standards etc. in a timely manner.

―63―

1. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
1) Consolidated Balance Sheets(Millions of yen)Previous fiscal year
(As of March 31, 2022)

Current fiscal year
(As of March 31, 2023)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods

7,990

6,916

*1 23,436*1 23,897

11,227

12,370Work in process
Raw materials and supplies

464
5,181

509
6,351

Other
Allowance for doubtful accounts

1,522
(10)

1,385
(14)

Total current assets

49,81351,416

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures

62,79463,370(44,958)(46,038)*3 17,836*3 17,332

73,27074,993(56,785)(59,653)*3 16,485*3 15,340

4,991

4,720

Accumulated depreciation(3,505)(3,432)Tools, furniture and fixtures, net

1,485

1,288

*3 18,722*3 18,346

9,205

9,122

Accumulated depreciation(4,149)(4,596)

Leased assets, net

5,055

4,526

Land
Leased assets

Construction in progress

500

486

60,08557,319

2,267

1,573

Investment securities
Shares of subsidiaries and associates

11,718*2 218

11,438*2 262Long-term loans receivable
Retirement benefit asset

16
2,130

19
1,861

Deferred tax assets
Other

319
2,463

317
2,172

Total property, plant and equipment
Intangible assets
Investments and other assets

Allowance for doubtful accounts

(129)

(120)

Total investments and other assets

16,737

15,951

Total non-current assets
Total assets―64―

79,09074,844

128,903

126,261(Millions of yen)Previous fiscal year
(As of March 31, 2022)

Current fiscal year
(As of March 31, 2023)

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings

20,913
8,100

20,754
9,858

Current portion of long-term borrowings
Lease liabilities*3 2,817*3 2,917

1,084

1,024

Accounts payable - other
Income taxes payable

6,216
171

6,714
215

Accrued consumption taxes
Provision for bonuses

308
810

299
781

Provision for restructual reforms
Other

－
1,308

178
1,320

Total current liabilities

41,72944,063

Non-current liabilities
Long-term borrowings*3 4,551*3 5,255

Lease liabilities
Deferred tax liabilities

4,118
992

3,735
1,961

Retirement benefit liability
Provision for restructual reforms

1,378

1,467
144

－
644

Other
Total non-current liabilities

620

11,685

13,18353,41457,246

Share capital
Capital surplus

6,716
22,086

6,716
22,086

Retained earnings
Treasury shares

44,132(3,066)38,388(3,342)

Total shareholders' equity

69,86863,848

4,990

4,952

71
33

0
56

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

(133)

(526)

Total accumulated other comprehensive income

4,962

4,483

Non-controlling interests
Total net assets
Total liabilities and net assets

―65―

658

682

75,48969,014

128,903

126,261

2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income

Net sales(Millions of yen)Previous fiscal year
Current fiscal year
(From April 1, 2021 to March 31, (From April 1, 2022 to March 31,
2022)
2023)
*1 218,610*1 221,979

Cost of sales*2 186,651

Gross profit
Selling, general and administrative expenses
Operating loss
Non-operating income
Interest income*2 191,495

31,95830,483*3 32,823*3 31,884(865)(1,400)17

16

Dividend income
Rental income from real estate

361
162

337
148

Other

274

285

Total non-operating income

816

787

220

223

Non-operating expenses
Interest expenses
Other

111

61

Total non-operating expenses

331

284

Ordinary loss

(380)

(897)

Extraordinary income
Gain on disposal of non-current assets*4 131*4 120Gain on sale of investment securities

429

643

Total extraordinary income

561

764

*5 351*5 266*6 9*6 171－*7 2,621－
1929*8 271

Extraordinary losses
Loss on disposal of non-current assets
Impairment losses
Restructuring expenses
Loss on abandonment of inventories
Extra retirement payments
Loss on valuation of investment securities
Total extraordinary losses
Loss before income taxes

34
－

409

3,364

(229)

(3,498)

Income taxes - current

238

301

Income taxes - deferred

(140)

1,159

Total income taxes
Loss
Profit attributable to non-controlling interests
Loss attributable to owners of parent

―66―

97

1,460

(326)

(4,959)

49

28

(376)

(4,987)

Consolidated Statements of Comprehensive Income

Loss(Millions of yen)Previous fiscal year
Current fiscal year
(From April 1, 2021 to March 31, (From April 1, 2022 to March 31,
2022)
2023)
(326)
(4,959)Other comprehensive income
Valuation difference on available-for-sale securities

(953)

(37)

36
118

(70)
(393)

(0)

22

* (799)* (479)Comprehensive income(1,126)(5,438)Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests(1,175)(5,466)49

28

Deferred gains or losses on hedges
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income―67―3) Consolidated Statements of Changes in Net Assets
For the previous fiscal year (from April 1, 2021 to March 31, 2022)(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning of
period6,716

Total shareholders'equityCapital surplus

Retained earnings

Treasury shares

22,08645,270(2,697)

71,375

Changes during period
Dividends of surplus
Loss attributable toowners of parent
Purchase of treasury
sharesNet changes in items otherthan shareholders' equity

(762)

(762)

(376)

(376)
(368)

(368)

Total changes during period－－(1,138)(368)(1,507)

Balance at end of period

6,716

22,08644,132(3,066)69,868

Accumulated other comprehensive income
Valuation
Total
difference on
Foreign currency Remeasurements accumulated Non-controlling Total net assetsinterests
available-for-sale Deferred gains ortranslationof defined benefit
otherlosses on hedges
securities
adjustment
planscomprehensive
incomeBalance at beginning of
period

5,944

34

34

(251)

5,761

612

77,750Changes during period
Dividends of surplus
Loss attributable toowners of parent
Purchase of treasury
sharesNet changes in items otherthan shareholders' equity

(762)
(376)
(368)
(953)

36

(0)

118

(799)

45

(753)

Total changes during period

(953)

36

(0)

118

(799)

45

(2,261)

Balance at end of period

4,990

71

33

(133)

4,962

658

75,489―68―

For the current fiscal year (from April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning of
periodTotal shareholders'equityCapital surplus

Retained earnings

Treasury shares

22,08644,132(3,066)

6,716

69,868Changes during period
Dividends of surplus
Loss attributable toowners of parent
Purchase of treasury
sharesNet changes in items otherthan shareholders' equity

(755)

(755)

(4,987)(4,987)
(276)

(276)

Total changes during period－－(5,743)(276)(6,019)Balance at end of period

6,716

22,08638,388(3,342)

63,848

Accumulated other comprehensive income
Total
Valuation
Foreign currency Remeasurements accumulated Non-controlling Total net assets
difference on Deferred gains orinterests
translationof defined benefit
otheravailable-for-sale losses on hedges
adjustment
planscomprehensive
securities
incomeBalance at beginning of
period

4,990

71

33

(133)

4,962

658

75,489Changes during period
Dividends of surplus
Loss attributable toowners of parent
Purchase of treasury
sharesNet changes in items otherthan shareholders' equity(755)(4,987)
(276)
(37)

(70)

22

(393)

(479)

24

(454)

Total changes during period

(37)

(70)

22

(393)

(479)

24

(6,474)

Balance at end of period

4,952

0

56

(526)

4,483

682

69,014―69―4) Consolidated Statements of Cash Flows(Millions of yen)Previous fiscal year
Current fiscal year
(From April 1, 2021 to March 31, (From April 1, 2022 to March 31,
2022)
2023)
Cash flows from operating activities
Loss before income taxes
Depreciation
Impairment losses
Restructuring expenses

(229)
7,945

(3,498)
7,693

9

171
2,621

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in retirement benefit liability

－
15
(321)

Extra retirement payments
Interest and dividend income

19
(379)

34
(353)

Interest expenses
Loss (gain) on sale of investment securities

220
(429)

223
(643)

Loss (gain) on valuation of investment securities
Loss (gain) on disposal of non-current assets

29
219

－
145

406
(1,013)(456)(2,349)

707
43

(145)
(8)

Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes

(6)
(166)

Other, net

(298)

(315)

Subtotal

6,945

2,945

Interest and dividends received

358

378

Interest paid
Income taxes paid

(220)
(297)

(223)
(333)

Income taxes refund
Extra retirement payments

449
(204)

159
(19)

Net cash provided by (used in) operating activities

7,030

2,906

Purchase of investment securities
Proceeds from sale of investment securities

(34)
681

(35)
895

Purchase of non-current assets
Proceeds from sale of non-current assets(6,777)647(5,558)
465

(204)

(282)

(5,688)(4,516)

Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

210
2,720

1,758
3,622

Repayments of long-term borrowings
Repayments of lease liabilities(2,657)(963)(2,817)
(991)

(762)
(368)

(755)
(276)

Cash flows from investing activities

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

Dividends paid
Purchase of treasury shares
Other, net

(3)

(3)

(1,826)534

Net increase (decrease) in cash and cash equivalents(485)(1,074)

Cash and cash equivalents at beginning of period

8,476

7,990

*1 7,990*1 6,916

Net cash provided by (used in) financing activities

Cash and cash equivalents at end of period―70―[Notes](Uncertainties of entity's ability to continue as going concern)
Not applicable.
(Significant accounting policies for preparation of consolidated financial statements)
1. Disclosure of scope of consolidation(1) Number of consolidated subsidiaries:
26
Names of major consolidated subsidiaries are referred to in “4. Subsidiaries and other affiliated entities” under “I.
Overview of Company,” therefore they are omitted here.
Marudaifood Supply Co., Ltd. has been included in the scope of consolidation as the company concerned was establishedduring the current fiscal year. Okinawa Marudai Food Co., Ltd. and Kitanosachi Co., Ltd. has been excluded from the scopeof consolidation as the liquidation of the companies concerned were completed during the current fiscal year.
(2) Non-consolidated subsidiaries:
Not applicable.
2. Disclosure about application of equity method(1) Non-consolidated subsidiaries to which the equity method is applied:
Not applicable.
(2) Number of subsidiaries and associates to which the equity method is applied:1
Name of the company concerned:
Betagro MF Deli Co., Ltd.
(3) Non-consolidated subsidiaries and associates to which the equity method is not applied:
Not applicable.
3. Book-closing date of consolidated subsidiaries
Consolidated subsidiaries whose book-closing date differs from that of the Company:
Not applicable.
4. Disclosure of accounting policies(1) Basis and method concerning valuation of important assets
1) Securities
Available-for-sale securities- Securities other than shares without market price, etc.
Stated at fair value.
(Any valuation difference is booked directly to net assets and the cost of securities sold are computed by the movingaverage method.)- Shares without market price, etc.
Stated at their cost determined by the moving-average method.
2) Derivatives
Stated at fair value.
3) Inventories
Merchandise and finished goods, work in process, and raw materials and supplies
Primarily stated at their cost determined by the weighted average method.
(Balance sheet values reflect write-downs for decreased profitability.)―71―

(2) Depreciation and amortization methods of major depreciable assets
1) Property, plant and equipment (excluding leased assets)
Primarily applying the declining balance method. However, the straight-line method is applied for the buildings(excluding the facilities attached to buildings) acquired on and after April 1, 1998 and the facilities attached to buildings
and structures acquired on and after April 1, 2016.
Useful lives of assets are principally as follows:
Buildings and structures
12-50 years
Machinery, equipment and vehicles
4-10 years
2) Intangible assets (excluding leased assets)
Applying the straight-line method. For software for its own use, the straight-line method is applied based on theinternally estimated useful life of 5 years.
3) Leased assets
Leased assets under finance leases that do not transfer its ownership
Leased assets under finance lease transactions that do not transfer their ownership are amortized using the straight-line
method over the lease term with a residual value of zero.
(3) Accounting policies for significant allowances and provisions
1) Allowance for doubtful accounts
An allowance for doubtful accounts is provided to cover bad-debt losses. With respect to normal trade accounts
receivable, it is stated at an amount based on the actual rate of historical bad debts. For certain doubtful receivables, theuncollectible amounts are individually estimated.
2) Provision for bonuses
To provide for payments of employees’ bonuses, an amount accrued for the current fiscal year among the estimatedfuture obligations is recorded as provisions.
3) Provision for restructual reforms
The amount projected to be incurred as expenses for restructual reforms in the future is recognized to provide for such
expenses.
(4) Accounting for retirement benefits
1) Periodic attribution of projected retirement benefits
Projected benefit obligations are attributed to the periods of service until the end of the current fiscal year on a benefit
formula basis in determining retirement benefit obligations.
2) Amortization method for actuarial gains or losses
Actuarial gains and losses are amortized by the straight-line method over a fixed period of 10 years, which is within the
average remaining service years of the eligible employees, beginning in the fiscal year following the year in which thegains and losses are recognized.
3) Adoption of a simplified method to certain small-scale group companies
Several consolidated subsidiaries adopt, in calculating their retirement benefit liability and retirement benefit expenses, a
simplified method in which the amount that would be required if all the employees retired voluntarily at the fiscal year end
is treated as retirement benefit obligation.
(5) Accounting policies for significant revenues and expenses
1) The Company’s key performance obligation in its primary business operations
The Group’s primary business operations are the Processed Food Products operations (manufacturing and sales of ham,sausage and precooked and processed foods) and the Meat Products operations (processing and sales of beef, pork, chicken,etc.) and we identify delivery of these merchandise and finished goods to our customers as our performance obligation.
2) General timing when the Company satisfies its performance obligation
The Company applies an alternative treatment set forth in Paragraph 98 of the “Implementation Guidance on AccountingStandard for Revenue Recognition.” Therefore, revenue is, in principle, recognized at the time of shipment of merchandiseand finished goods, where control over them is transferred to a customer and thus we judge that our performance obligation
is satisfied.
Transaction prices are calculated by deducting a portion of distribution expenses, promotion expenses, etc. from prices
agreed in a contract with a customer.

―72―

(6) Significant hedge accounting method
1) Hedge accounting method
Exceptional accounting treatments are applied to interest rate swaps because they meet specific conditions. In addition,accounts receivable and accounts payable in a foreign currency hedged by fixed-rate contracts, etc., are treated withdesignated hedge accounting.
2) Hedging instrument and hedged items- Hedging instrument:
Derivative transactions (fixed-rate contracts and interest rate swap transactions)- Hedged items:
Items that have risks associated with foreign exchange fluctuations, etc. that are notreflected in their value; and items that avoid the risks associated with foreign exchange
fluctuations with their cash flow being fixed.
3) Hedging policy
The Company adopts a hedging policy that stipulates only risks associated with foreign exchange/interest rate
fluctuations in the future should be hedged. Therefore, the Company does not engage in any speculative transactions orderivative transactions that aim for short-term gains.
4) Assessment of the effectiveness of hedging
Important conditions for the hedging instrument and the hedged items are the same and the Company’s hedging approachis expected to offset or limit to certain extent the effects of foreign exchange/interest rate fluctuations at the start of hedging
and throughout subsequent periods. Hence, the assessment of the effectiveness of hedging is omitted.
5) Other risk management methods relating to hedge accounting
Derivative transactions are carried out based on our internal rules that define transaction-related authority, amount limits,
procedures, etc.
(7) Method and period for goodwill amortization
Goodwill is amortized over a period of 5 years using the straight-line method.
(8) Cash and cash equivalents in the consolidated statement of cash flows
Cash and cash equivalents as stated in the consolidated statement of cash flows consist of cash in hand, readily available
deposits, and any short-term liquid investments with a maturity not exceeding three months from the acquisition date whose
value is not subject to significant fluctuation risk.
(9) Other important matters in preparing the consolidated financial statements
Accounting treatment of asset-related non-deductible consumption taxes, etc.
Asset-related non-deductible national/regional consumption taxes are recorded as expenses for the fiscal year ended March
31, 2023.

―73―

(Significant accounting estimates)
1. Impairment of non-current assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2023
The book value of business assets (including common assets) of the Processed Food Products operations of Marudai Food Co.,Ltd.
(Millions of yen)Previous fiscal year

Current fiscal year

Property, plant and equipment

31,94030,166

Intangible assets

2,058

1,370

Total

33,99831,537The Company determined that there was an indication of impairment of the business assets of the Processed Food Products
operations of Marudai Food Co., Ltd. due to the continuous recording of operating loss and reviewed the necessity ofrecording impairment losses. As a result, however, it was determined that the undiscounted future cash flows would exceed
the book value of the business assets, including the common assets of the Processed Food Products operations, and therefore
the Company did not record any impairment losses.
In addition, due to the decision to implement restructuring including the reorganization of production sites, the Company
recorded impairment losses of 1,331 million yen as restructuring expenses among extraordinary losses with regard to part ofbusiness assets of the Processed Food Products operations, including movables such as machinery and equipment and realestate such as lands that were not expected to be utilized in the future.
(2) Significant accounting estimates for identified items
1) Calculation method
When an indication of impairment exists for an asset or asset group, the Company conducts an assessment of whether
recording an impairment loss is required based on the future cash flows of the asset.
The Company groups its cash generating units, which are the units used to determine whether recognizing impairment isrequired, into business assets of the Processed Food Products operations and the Meat Products operations, rental assets, idle
assets and artwork. Regarding business assets, the management accounting business category in which income andexpenditure are continuously monitored is considered one asset group, and future cash flows are calculated based on the
profit plan formulated on the basis of the management plan approved by the Board of Directors. Regarding rental assets, idle
assets and artwork, individual assets are used as the smallest unit for grouping. The future cash flows of rental assets are
estimated by the net selling price on the basis of appraisal values, etc., or future cash flows on the basis of rental income, etc.,
while future cash flows of idle assets and artwork are estimated based on the net selling price on the basis of the appraisal
values, etc.
2) Key assumptions
The key assumptions used in the calculation of undiscounted future cash flows, as set out below, are subject to a highdegree of uncertainty.
- With regard to the net sales plan, based on numerical plans developed by individual departments, the Company loweredthem taking into account the degree of achievement of budgets in the past fiscal years. The resulting figures are thenfurther adjusted to come up with net sales forecast by reflecting price revisions expected from the most recent businesstalks and the revenue-increasing effect of new transactions, etc. In addition, we take into account the market
environment for our mainstay ham and sausage products for the next fiscal year and beyond.
- The cost of sales plan reflects factors such as the impact of recent increases in raw material prices and energy costs, aswell as the cost reduction effect of restructuring such as the reorganization of production sites.
- With regard to the COVID-19 pandemic, as moving restrictions were loosened and the overall economic situation has
been gradually returning normal, the Company assumes that its impact on the plans mentioned above will be limited.
3) Effect on the consolidated financial statements for the fiscal year ending March 31, 2024
There may be a significant impact on the consolidated financial statements for the fiscal year ending March 31, 2024 if
actual amounts differ from the estimates due to uncertain future economic conditions or changes in the business environment.

―74―

2. Recoverability of deferred tax assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2023
(Millions of yen)Previous fiscal year
Deferred tax assets(Before offsetting against
deferred tax liabilities)

Current fiscal year

2,211

1,100

(2) Significant accounting estimates for identified items
1) Calculation method
Deferred tax assets are only recognized to the extent that it is highly probable that taxable income will be available against
which the unused portion of tax loss carryforwards and future deductible temporary differences can be utilized. In
determining the taxable income to be generated, the Company calculates the timing and amount of taxable income that canbe earned in the future based on the future profit plan formulated on the basis of the management plan approved by the
Board of Directors.
2) Key assumptions
For Marudai Food Co., Ltd., the estimated amount of taxable income is calculated using the figures linked to the profit
plan based on “2) Key assumptions” under “1. Impairment of non-current assets.”
Among the consolidated subsidiaries that have a significant impact on the amount of taxable income, for those companies
whose management plans for the next fiscal year, as approved by the Board of Directors, are expected to increasesignificantly as compared to the actual results of the current fiscal year, taxable income is estimated based on the assumptionthat profits from the next fiscal year will remain at the same level as those in the current fiscal year, except for items that are
expected to improve in the next fiscal year.
3) Effect on the consolidated financial statements for the fiscal year ending March 31, 2024
There may be a significant impact on the consolidated financial statements for the fiscal year ending March 31, 2024 if theactual timing and amounts differ from the estimates due to uncertain future economic conditions or changes in the businessenvironment. In addition, changes in the effective statutory tax rate due to tax reforms may also have a significant impact on
those consolidated financial statements.

―75―

(Consolidated balance sheets)*1. Among notes and accounts receivable - trade, the amounts of receivables resulting from the contracts with customers are as
follows:
Previous fiscal year
Current fiscal year
(As of March 31, 2022)(As of March 31, 2023)
Notes receivable - trade
36 million yen
40 million yen
Accounts receivable - trade23,400 million yen

23,856 million yen*2. The following are related to subsidiaries and associates:
Previous fiscal year
(As of March 31, 2022)
Shares of subsidiaries and associates

Current fiscal year
(As of March 31, 2023)

218 million yen

262 million yen

Previous fiscal year
(As of March 31, 2022)
36 million yen
43 million yen
3 million yen

Current fiscal year
(As of March 31, 2023)
31 million yen
25 million yen
3 million yen

82 million yen

60 million yen

Previous fiscal year
(As of March 31, 2022)
38 million yen
61 million yen

Current fiscal year
(As of March 31, 2023)
15 million yen
45 million yen

99 million yen

61 million yen*3. Pledged assets and secured debts
Pledged assets and secured debts are as follows:
Pledged assets

Buildings and structures
Machinery, equipment and vehicles
Land
Total
Secured debts

Current portion of long-term borrowings
Long-term borrowings
Total

4. Overdraft agreements
The Company and its consolidated subsidiaries have signed overdraft agreements with their correspondent banks to efficiently
procure working capital. The unrealized borrowings under these agreements at the end of the periods were as follows:
Previous fiscal year
Current fiscal year
(As of March 31, 2022)(As of March 31, 2023)
Total amounts in the overdraft agreements
32,770 million yen
32,750 million yen
Borrowing balance
8,000 million yen
9,758 million yen
Difference

24,770 million yen―76―

22,992 million yen

(Consolidated statements of income)*1. Revenues generated from contracts with customers
Net sales are presented without distinguishing revenues generated from contracts with customers and other revenues. The
amount of revenues generated from contracts with customers is shown in “[Notes] (Segment information, etc.)” in the
consolidated financial statements.
*2. Loss on valuation of inventories
The balance of inventories at the end of the fiscal year is the amount after a reduction of book value in line with a decline inprofitability, and the following loss on valuation of inventories is included in cost of sales. The amount below has been offset
against reversal amounts:
Previous fiscal year
Current fiscal year
(From April 1, 2021 to March 31, 2022)(From April 1, 2022 to March 31, 2023)
46 million yen

291 million yen*3. Selling, general and administrative expenses(1) Major items and their amounts were as follows:
Previous fiscal year
(From April 1, 2021 to March
31, 2022)
12,482 million yen
6,252 million yen

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

Current fiscal year
(From April 1, 2022 to March
31, 2023)
12,040 million yen
6,181 million yen

372 million yen
316 million yen

434 million yen
272 million yen

3 million yen

11 million yen(2) Research and development expenses included in general and administrative expenses are as follows (they are not included in
manufacturing cost for the current fiscal year):Previous fiscal year
Current fiscal year
(From April 1, 2021 to March 31, 2022)(From April 1, 2022 to March 31, 2023)
673 million yen

601 million yen*4. Gain on disposal of non-current assets
Primarily generated from the sales of real estate for rent and other.
*5. The breakdown of loss on disposal of non-current assets are as follows:
Previous fiscal year
(From April 1, 2021 to March 31,
2022)

Current fiscal year
(From April 1, 2022 to March 31,
2023)

Buildings and structures

288 million yen

215 million yen

Machinery and equipment

59 million yen

35 million yen

Other

3 million yen

15 million yen

Total

351 million yen

266 million yen―77―*6. Impairment losses
The Group recorded impairment losses on the following assets:
Previous fiscal year (From April 1, 2021 to March 31, 2022)
Category
Type
Location
AmountReal estate for rent andHiroshima Prefecture,
Idle assets
8 million yenother (Land)
etc.
Real estate for rent andRental assets
Kumamoto Prefecture
0 million yenother (Land)Total
9 million yen－－
The Group classifies non-current assets into four categories: business assets of the Processed Food Products operations andthe Meat Products operations, rental assets, idle assets and artwork. The Company groups its business assets by business units
that are continuously monitored in management accounting; and rental assets, idle assets and artwork by individual asset. As aresult, when the recoverable value of idle assets or rental assets has fallen below book value due to declines in market prices
or profitability, the book value of these assets has been reduced to their recoverable value. All of the impairment losses of 9
million yen relate to real estate for rent and other (“Other” under “Investments and other assets”).
The recoverable value of rental assets is measured by the net realizable value or the value in use. The recoverable value of
idle assets is measured by the net realizable value. The net realizable value is assessed based on the appraisal value, etc. andvalue in use is calculated by discounting the future cash flows by 2.7%.
Current fiscal year (From April 1, 2022 to March 31, 2023)
Category
Type
Location
AmountAssets to be disposed of/abolished (*)
Machinery and9 plants in Yamanashi(Marudai Food Co., Ltd. and its two
2,299 million yen
equipment, land, etc.
Prefecture, etc.
consolidated subsidiaries)
Real estate for rent andRental assets
Kumamoto Prefecture
1 million yenother (Land)
Real estate for rent andIdle assets
Nagano Prefecture, etc.
62 million yenother (Land, buildings)
Tools, furniture andArtwork
Osaka Prefecture, etc.
108 million yen
fixturesTotal－－
2,471 million yen(*) Included in “Restructuring expenses” on the consolidated statement of income.
The Group classifies non-current assets into four categories: business assets of the Processed Food Products operations andthe Meat Products operations, rental assets, idle assets and artwork. The Company groups its business assets by business units
that are continuously monitored in management accounting; and rental assets, idle assets and artwork by individual asset.
Due to the decision to implement restructuring including the reorganization of production sites, the Group reduced the bookvalue of production facilities and real estate of Marudai Food Co., Ltd. and its consolidated subsidiaries that were notexpected to be utilized in the future to their recoverable values and the reduced amounts were recorded as restructuring
expenses (extraordinary losses).
In addition, when the recoverability of rental assets or idle assets has fallen below book value due to declines in market
prices or profitability, the book value of these assets has been reduced to their recoverable value and the reduced amounts
were recorded as impairment losses (extraordinary losses). The impairment losses of 63 million yen relate to real estate forrent and other (“Other” under “Investments and other assets”).
The recoverable value of rental assets is measured by the net realizable value or the value in use. The recoverable value of
idle assets is measured by the net realizable value. The net realizable value is assessed based on the appraisal value, etc. andvalue in use is calculated by discounting the future cash flows by 3.2%.
The recoverable value of artwork is calculated based on appraisal value obtained from third parties such as art experts.
When the appraisal value of a certain piece of artwork has fallen below book value, the relevant book value has been reduced
to its recoverable value and the reduced amount was recorded as impairment losses (extraordinary losses). The impairment
losses of 108 million yen relate to tools, furniture and fixtures.
*7. Restructuring expenses
Restructuring expenses involve losses incurred by the decision to implement restructuring, including the reorganization of
production sites, consisting of impairment losses of 2,299 million yen for the production facilities, real estate, etc. of Marudai
Food Co., Ltd. and some of its consolidated subsidiaries and other related expenses of 322 million yen.
*8. Loss on abandonment of inventories
Loss on abandonment of inventories were recorded for a temporary loss incurred by an accident at a consignee.

―78―

(Consolidated statements of comprehensive income)*Reclassification adjustment and tax effect relating to other comprehensive income(Millions of yen)Previous fiscal year
Current fiscal year
(From April 1, 2021 to March 31, (From April 1, 2022 to March 31,
2022)
2023)
Valuation difference on available-for-sale securities
Increase (decrease) during the year
Reclassification adjustments
Amount before tax effectTax effect
Valuation difference on available-for-sale securities

(949)
(400)

580
(643)

(1,349)
395

(63)
26

(953)

(37)

Deferred gains or losses on hedges
Increase (decrease) during the year

52

(102)

Amount before tax effectTax effect

52
(16)

(102)
31

Deferred gains or losses on hedges

36

(70)

Remeasurements of defined benefit plans
Increase (decrease) during the year
Reclassification adjustments

23
135

(619)
94

158
(40)

(524)
131

Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Increase (decrease) during the year

118

(393)

(0)

22

Total other comprehensive income

(799)

(479)

Amount before tax effectTax effect―79―

(Consolidated statements of changes in net assets)
Previous fiscal year (From April 1, 2021 to March 31, 2022)
1. Class and total number of issued shares and treasury shares
Balance at beginning of Increase during the fiscal
the fiscal year (Shares)
year (Shares)

Decrease during the
fiscal year (Shares)

Balance at end of the
fiscal year (Shares)

Issued shares
Common stockTotal

26,505,581－－

26,505,581

26,505,581－－

26,505,581

1,103,000

205,897－

1,308,897

1,103,000

205,897－

1,308,897

Treasury shares
Common stock
Total(Note) Increase in treasury shares of 205,897 shares consists of an acquisition of 205,700 shares through the off-hours trading system(ToSTNeT-3) and purchase of odd lots of 197 shares.
2. Dividends(1) Dividends paid
Resolution

Class ofshares

Source ofdividends

June 25, 2021
Ordinary General
Meeting of
Shareholders

Commonstock

Retainedearnings

Total amount of
Dividends per
dividends
share (Yen)(Millions of yen)762

30

Record date

Effective date

March 31, 2021

June 28, 2021

(2) Dividends whose record date falls in the current fiscal year but whose effective date comes after March 31, 2022
Total amount ofClass of
Source ofDividends per
Resolution
dividends
Record date
Effective datesharesdividends
share (Yen)(Millions of yen)
June 24, 2022
Ordinary General
CommonRetained
755
30
March 31, 2022
June 27, 2022
Meeting ofstock
earnings
Shareholders
Current fiscal year (From April 1, 2022 to March 31, 2023)
1. Class and total number of issued shares and treasury shares
Balance at beginning of Increase during the fiscal
the fiscal year (Shares)
year (Shares)

Decrease during the
fiscal year (Shares)

Balance at end of the
fiscal year (Shares)

Issued shares
Common stockTotal

26,505,581－－

26,505,581

26,505,581－－

26,505,581

1,308,897

176,128－

1,485,025

1,308,897

176,128－

1,485,025

Treasury shares
Common stock
Total(Note) Increase in treasury shares of 176,128 shares consists of an acquisition of 176,000 shares through the off-hours trading system(ToSTNeT-3) and purchase of odd lots of 128 shares.

―80―

2. Dividends(1) Dividends paid
Resolution

Class ofshares

Source ofdividends

June 24, 2022
Ordinary General
Meeting of
Shareholders

Commonstock

Retainedearnings

Total amount of
Dividends per
dividends
share (Yen)(Millions of yen)755

30

Record date

Effective date

March 31, 2022

June 27, 2022

(2) Dividends whose record date falls in the current fiscal year but whose effective date comes after March 31, 2023
Total amount ofClass of
Source ofDividends per
Resolution
dividends
Record date
Effective datesharesdividends
share (Yen)(Millions of yen)
June 28, 2023
Ordinary General
CommonRetained
500
20
March 31, 2023
June 29, 2023
Meeting ofstock
earnings
Shareholders―81―

(Consolidated statements of cash flows)*1. Relationship between the cash and cash equivalents at end of period and the amount of consolidated balance sheet items is asfollows:
Previous fiscal year
Current fiscal year
(From April 1, 2021 to(From April 1, 2022 toMarch 31, 2022)
March 31, 2023)
Cash and deposits
7,990 million yen
6,916 million yen
Cash and cash equivalents

7,990 million yen

2. Significant non-cash transactions
Newly recorded assets and liabilities related to finance lease transactions were as follows:
Previous fiscal year
(From April 1, 2021 toMarch 31, 2022)
Assets and liabilities related to finance lease transactions
967 million yen

6,916 million yen

Current fiscal year
(From April 1, 2022 toMarch 31, 2023)
679 million yen(Leases)
Finance lease transactions(Lessee side)
Finance leases that do not transfer their ownership(1) Leased assets
Property, plant and equipment
Primarily concerning production facilities (machinery and equipment) of Processed Food Products operations.
(2) Depreciation and amortization method for leased assets
Leased assets under finance lease transactions that do not transfer their ownership are amortized using the straight-line
method over the lease term with a residual value of zero.

―82―

(Financial instruments)
1. Current status of financial instruments(1) Policy concerning financial instruments
The Group makes it a policy to limit fund investments to bank deposits and other investments in which the principal is freefrom risk and raise funds principally through borrowings from financial institutions such as banks and issuance of corporate
bonds.
The Group uses derivatives to reduce foreign exchange and interest rate fluctuation risks but does not engage in any speculativetransactions.
(2) Details of financial instruments and their risks and the Group’s risk management system
The Group is exposed to credit risk arising from operating receivables such as trade notes and accounts receivable. To limit therisk, the Company conducts due date and outstanding receivable management on a customer-by-customer basis in accordancewith its “credit exposure management guidelines” and has a grading system to evaluate the credit condition of its major customers
every six months. The consolidated subsidiaries manage credit risks similarly, following the Company’s “credit exposure
management guidelines.”
Investment securities held by the Company are comprised of exchange listed shares (strategic shareholdings) and unlisted
stocks, with the bulk consisting of exchange listed shares (strategic shareholdings). As a policy, exchange listed shares (strategic
shareholdings), in accordance with the “Guidelines for the Holding and Management of Exchange Listed Shares,” are held only if
judged to contribute to the Company’s sustained growth and medium- to long-term corporate value enhancement. Individual
investment securities, including unlisted stocks, are subject to verification of their holding purpose and rationale, etc. and reported
each year to the Board of Directors for comprehensive deliberation regarding the justification of their holding. The verification ofshareholding rationale includes determining whether risks and benefits resulting from the shareholdings are proportionate to thecost of capital.
Operating payables, such as trade notes and accounts payables, and other account payables, are generally due within one year.
Some arise in connection with the import of raw materials and goods that are denominated in foreign currencies. The Company
uses foreign currency forward contracts to reduce foreign currency fluctuation risk that arises from operating payables in foreign
currencies.
The Group primarily uses loans to procure operating funds. Lease liabilities from finance leases are incurred to raise funds forcapital expenditure. The amount of interest expenses has been fixed for the long-term portion of borrowings through the use ofindividual fixed-rate contracts as well as interest rate swap transactions as hedging instruments, in order to avoid the risk ofinterest rate fluctuations. No interest swap transactions were current as of March 31, 2023.
To minimize counterparty risk, the Company follows its “derivative transaction rules” and enters such transactions only withhighly rated financial institutions.
The Company is exposed to liquidity risk arising from its operating obligations and loan payables. To minimize this risk, the
Accounting Department prepares cash flow plans based on other divisions’ reports and regularly updates the statements. The
consolidated subsidiaries also manage liquidity risk in accordance with the methods used by the Company.
(3) Supplementary explanation on fair values of financial instruments
As a variety of factors, some of which are variable, are taken into account when calculating the fair values of financial
instruments, the adoption of different assumptions may result in different values.
The contract amounts of the derivative transactions stated in “2. Fair value of financial instruments” do not reflect the market
risk involved in the derivative transactions themselves.

―83―2. Fair value of financial instruments
The following table shows consolidated balance sheet amounts, fair value and any difference between book value and fair value.
“Cash and deposits,” “notes and accounts receivable - trade,” “notes and accounts payable - trade,” “accounts payable -other” and“short-term borrowings” are omitted as they are cash or are settled in a short period of time and thus their fair values are similar totheir book values.
Previous fiscal year (As of March 31, 2022)(Millions of yen)Book value on the
consolidated balance sheet

Fair value

Difference(1) Investment securities (*1)
Available-for-sale securities

11,671

11,671－

Total assets

11,671

11,671－(1) Long-term borrowings

7,369

7,364

(4)

(2) Lease liabilities

5,203

5,229

26

12,572

12,593

21

102

102

－

Total Liabilities
Derivatives transactions (*2)(*1) Shares without market price, etc. are not included in “(1) Investment securities, Available-for-sale securities.” Book values on
the consolidated balance sheet for these financial instruments are as follows:(Millions of yen)
Category

As of March 31, 2022

Unlisted stocks

47

Shares of subsidiaries and associates

218(*2) Derivative receivables and payables are presented on a net basis.
Current fiscal year (As of March 31, 2023)(Millions of yen)Book value on the
consolidated balance sheet

Fair value

Difference(1) Investment securities (*1)
Available-for-sale securities

11,391

11,391－

Total assets

11,391

11,391－(1) Long-term borrowings

8,173

8,122

(50)

(2) Lease liabilities

4,759

4,759

0

12,932

12,881

(50)

0

0

－

Total Liabilities
Derivatives transactions (*2)(*1) Shares without market price, etc. are not included in “(1) Investment securities, Available-for-sale securities.” Book values on
the consolidated balance sheet for these financial instruments are as follows:(Millions of yen)
Category

As of March 31, 2023

Unlisted stocks

47

Shares of subsidiaries and associates

262(*2) Derivative receivables and payables are presented on a net basis.

―84―

(Note 1) Estimated redemption amounts of monetary assets and available-for-sale securities with maturity dates after the
consolidated balance sheet datePrevious fiscal year (As of March 31, 2022)(Millions of yen)Over 1 year but
Within 1 year
Over 5 years
within 5 years
Cash and deposits

7,990

－

－

Notes and accounts receivable - trade23,436－－

31,427－－

Total
Current fiscal year (As of March 31, 2023)(Millions of yen)
Within 1 year

Over 1 year but
within 5 years

Over 5 years

Cash and deposits

6,916

－

－

Notes and accounts receivable - trade

23,897－－30,813

－

－

Total

(Note 2) Estimated repayment amounts of long-term borrowings, lease liabilities and other interest-bearing debts after the closing
date of each fiscal year
Previous fiscal year (As of March 31, 2022)(Millions of yen)Over 1 year Over 2 years Over 3 years Over 4 years
Within 1 year but within 2 but within 3 but within 4 but within 5 Over 5 years
years
years
years
years
Short-term borrowings

8,100

－

－

－

－

－

Long-term borrowings

2,817

2,077

1,482

588

388

15

Lease liabilities

1,084

960

929

711

535

981

Total

12,002

3,038

2,411

1,299

923

997

Current fiscal year (As of March 31, 2023)
Over 1 year
Within 1 year but within 2
years(Millions of yen)Over 2 years Over 3 years Over 4 years
but within 3 but within 4 but within 5 Over 5 years
years
years
years

Short-term borrowings

9,858

－

－

－

－

－

Long-term borrowings

2,917

2,322

1,418

944

566

5

Lease liabilities

1,024

993

777

603

507

853

Total

13,799

3,315

2,195

1,547

1,073

858

3. Breakdown of financial instruments by the level of their fair value
The Company classifies the fair values of financial instruments into the following three levels in accordance with theobservability and importance of inputs used in the calculation of fair values.
Level 1 fair values: Fair values calculated using (non-adjusted) market prices of identical assets/liabilities in active markets
Level 2 fair values: Fair values calculated using directly or indirectly observable inputs other than Level 1 inputs
Level 3 fair values: Fair values calculated using important but unobservable inputs
When several types of inputs that have a significant impact on the calculation of fair values are used, those fair values areclassified at the level that is the least prioritized in calculating them, among the respective levels of these inputs.

―85―

(1) Financial instruments recorded at fair value in consolidated balance sheet
Previous fiscal year (As of March 31, 2022)
Fair value (Millions of yen)
Category
Level 1
Level 2
Level 3
Investment securities
Available-for-sale securities
11,671－Equity securities
11,671－
Derivatives transactions
Currency-related derivatives
Total assets－－
11,671

102
102
102

Total
－
－

11,671
11,671

－
－
－

102
102
11,774Current fiscal year (As of March 31, 2023)
Category

Fair value (Millions of yen)
Level 2
Level 3

Level 1

Total

Investment securities
Available-for-sale securities
Equity securities

11,391
11,391－－－－

11,391
11,391

Derivatives transactions
Currency-related derivatives
Total assets－－
11,391

0
0
0

－
－
－

0
0
11,392(2) Financial instruments other than those recorded at fair value in consolidated balance sheet
Previous fiscal year (As of March 31, 2022)
Fair value (Millions of yen)
Category
Level 1
Level 2
Level 3Long-term borrowings
7,364－
Lease liabilities
5,229－
Total Liabilities
12,593
－

Total
－
－
－

7,364
5,229
12,593Current fiscal year (As of March 31, 2023)
Category
Long-term borrowings
Lease liabilities
Total Liabilities

Level 1－－－

Fair value (Millions of yen)
Level 2
Level 38,122
4,759
12,881

Total
－
－
－

8,122
4,759
12,881(Note) Explanation on evaluation technique and inputs used to calculate fair values
Investment securities
Available-for-sale securities
The fair values of these securities are based on prices on securities exchanges, and therefore are classified as Level 1.
Derivatives transactions
All of the derivative transactions are fixed-rate transactions with the discounted cash flow method being used to calculate
the fair values of fixed-rate contracts based on the observable inputs such as exchange rates. Therefore, their fair values areclassified as Level 2.
Long-term borrowings and lease liabilities
The fair values for these items have been calculated as the present value of the sum of principal and interest amounts,
discounted using the estimated interest rates for new borrowings or lease transactions of the same kind. Therefore, their fairvalues are classified as Level 2.

―86―

(Securities)
1. Available-for-sale securities
Previous fiscal year (As of March 31, 2022)(Millions of yen)
Category

Book value on the consolidatedbalance sheet

Historical cost

Difference

Securities with book values
exceeding historical cost
1) Equity securities

11,433

4,277

7,156

2) Bonds－－－

3) Other－－－

11,433

4,277

7,156

1) Equity securities

237

293

(55)

2) Bonds－－－

3) Other－－－

Subtotal

237

293

(55)

Total

11,671

4,570

7,101

Subtotal
Securities with book values
not exceeding historical cost

(Note) Unlisted stocks (carrying amount of 47 million yen) are not included in the table above as they do not have market prices.
Current fiscal year (As of March 31, 2023)(Millions of yen)
Category

Book value on the consolidatedbalance sheet

Historical cost

Difference

Securities with book values
exceeding historical cost
1) Equity securities

11,183

4,115

7,067

2) Bonds－－－

3) Other－－－

11,183

4,115

7,067

1) Equity securities

208

239

(30)

2) Bonds－－－

3) Other－－－

Subtotal

208

239

(30)

Total

11,391

4,354

7,037

Subtotal
Securities with book values
not exceeding historical cost

(Note) Unlisted stocks (carrying amount of 47 million yen) are not included in the table above as they do not have market prices.

―87―2. Available-for-sale securities sold during the year
Previous fiscal year (From April 1, 2021 to March 31, 2022)(Millions of yen)
Category

Proceeds

Equity securities
Bonds
Other
Total

Gains on sales

Losses on sales

681
－
－

429
－
－

－
－
－

681

429

－

Current fiscal year (From April 1, 2022 to March 31, 2023)(Millions of yen)
Category
Equity securities
Bonds
Other
Total

Proceeds

Gains on sales

Losses on sales

895
－
－

643
－
－

－
－
－

895

643

－

3. Impairment of investment securities
The Company recognized 29 million yen as impairment losses for investment securities during the fiscal year ended March 31,
2022.
There was no impairment of investment securities during the fiscal year ended March 31, 2023.
When the value of stocks depreciated from 30% to 50%, the Company determined impairment loss by analyzing the operational
performance of their respective issuing entities based on their published financial statements as well as each stock’s fair value
information such as discrepancies between the book value and the highest or lowest market value during the year.

―88―

(Derivatives transactions)
1. Derivative transactions not subject to the application of hedge accounting
Not applicable.
2. Derivative transactions subject to the application of hedge accounting
The contract amount or the amount equivalent to the principal set forth in the contract, etc. by hedge accounting method on the
consolidated closing date are as follows:(1) Currency-related derivatives
Previous fiscal year (As of March 31, 2022)(Millions of yen)Contract amount
Hedge accounting method

Designated hedge accounting
such as fixed-rate contracts

Transaction types
Fixed-ratetransaction
On purchased
U.S. dollar

Major hedged items

Accounts payable- tradeTotal

Due over 1 year

Fair value

2,955

－

102

2,955

－

102

Current fiscal year (As of March 31, 2023)(Millions of yen)Contract amount
Hedge accounting method

Designated hedge accounting
such as fixed-rate contracts

Transaction types
Fixed-ratetransaction
On purchased
U.S. dollar
Euro

Major hedged items

Accounts payable- tradeTotal(2) Interest-related derivatives
Previous fiscal year (As of March 31, 2022)
Not applicable.
Current fiscal year (As of March 31, 2023)
Not applicable.

―89―

Due over 1 year

Fair value

2,067
37

－
－

0
0

2,105

－

0

(Retirement benefits)
1. Outline of retirement benefit plans adopted
The Company and its consolidated subsidiaries have defined benefit corporate pension plans (fund type) and lump-sum retirement
allowance plans as well as defined contribution plans. In the case of certain defined contribution plans, employees can select a
defined contribution plan or advanced payment of retirement benefits. In some cases, additional severance benefits may be paid tothe employees upon retirement.
2. Defined benefit obligation(1) The changes in retirement benefit obligation for the fiscal years ended March 31, 2023 and 2022 (excluding those for which thesimplified method was applied)
Previous fiscal year
Current fiscal year
(From April 1, 2021 to(From April 1, 2022 toMarch 31, 2022)
March 31, 2023)
Beginning balance of retirement benefit obligation
12,833 million yen
12,274 million yen
Service cost - benefits earned during the year
Interest cost on projected benefit obligation

296 million yen
102 million yen

268 million yen
98 million yen

Actuarial gains and losses
Retirement benefits paid(172) million yen(786) million yen

109 million yen(840) million yen

12,274 million yen

11,909 million yen

Ending balance of retirement benefit obligation(2) The changes in plan assets for the fiscal years ended March 31, 2023 and 2022 (excluding those for which the simplified method
was applied)
Previous fiscal year
Current fiscal year
(From April 1, 2021 to(From April 1, 2022 toMarch 31, 2022)
March 31, 2023)
Beginning balance of plan assets
14,941 million yen
14,947 million yen
Expected return on plan assets
373 million yen
373 million yen
Actuarial gains and losses
Contribution from the employer(148) million yen
384 million yen(510) million yen
170 million yen

Retirement benefits paid(602) million yen(626) million yen

Ending balance of plan assets

14,947 million yen

14,355 million yen(3) The changes in retirement benefit liability of the plans for which the simplified method was applied for the fiscal years ended
March 31, 2023 and 2022
Previous fiscal year
Current fiscal year
(From April 1, 2021 to(From April 1, 2022 toMarch 31, 2022)
March 31, 2023)
Beginning balance of retirement benefit liability
1,835 million yen
1,921 million yen
Retirement benefit expenses
174 million yen
196 million yen
Retirement benefits paid
Ending balance of retirement benefit liability―90―(89) million yen(65) million yen

1,921 million yen

2,051 million yen

(4) Reconciliation between the ending balance of projected benefit obligation and plan assets and liability and asset for retirement
benefits recorded in the consolidated balance sheet
Previous fiscal year
Current fiscal year
(As of March 31, 2022)(As of March 31, 2023)
Funded retirement benefit obligation
12,817 million yen
12,494 million yen
Plan assets(14,947) million yen(14,355) million yen(2,130) million yen(1,861) million yen

1,378 million yen

1,467 million yen(751) million yen(393) million yen

Retirement benefit asset(2,130) million yen
Retirement benefit liability
1,378 million yen
Net liability (asset) for retirement benefits recorded in(751) million yen
the consolidated balance sheet(Note) The plans to which the simplified method is applied are included.

(1,861) million yen
1,467 million yen

Unfunded retirement benefit obligation
Net liability (asset) for retirement benefits recorded in
the consolidated balance sheet(393) million yen(5) The components of retirement benefit expenses
Previous fiscal year
(From April 1, 2021 toMarch 31, 2022)
296 million yen

Current fiscal year
(From April 1, 2022 toMarch 31, 2023)
268 million yen

Interest cost on projected benefit obligation
Expected return on plan assets

102 million yen(373) million yen

98 million yen(373) million yen

Amortization of actuarial differences
Retirement benefit expenses calculated using thesimplified method
Retirement benefit expenses on defined benefit plans

135 million yen

94 million yen

174 million yen

196 million yen

335 million yen

282 million yen

Service cost – benefits earned during the year

Extra retirement payments (Note)
19 million yen
34 million yen(Note) Recorded under extraordinary losses. In addition, extra retirement payments for the fiscal year ended March 31, 2022 andfor the fiscal year ended March 31, 2023 are additional severance benefits for those who were permanently transferred toconsolidated subsidiaries.
(6) Remeasurements of defined benefit plans
The components of remeasurements of defined benefit plans (before tax effect) were as follows:
Previous fiscal year
Current fiscal year
(From April 1, 2021 to(From April 1, 2022 toMarch 31, 2022)
March 31, 2023)
Actuarial gains and losses
158 million yen(524) million yen
Total

158 million yen(524) million yen(7) Accumulated remeasurements of defined benefit plans
The components of accumulated remeasurements of defined benefit plans (before tax effect) were as follows:
Previous fiscal year (As of
Current fiscal year (As of
March 31, 2022)
March 31, 2023)
Unrecognized actuarial gain or loss
175 million yen
701 million yen
Total

175 million yen―91―

701 million yen

(8) Plan assets
1) Major components of plan assets
The components of plan assets were as follows:

Bonds

Previous fiscal year
(As of March 31, 2022)
43.5 %

Current fiscal year
(As of March 31, 2023)
43.8 %

Alternatives (Note)
Equity securities

23.7 %
22.7 %

24.3 %
21.6 %

General accountShort-term assets

7.8 %
2.3 %

8.3 %
2.0 %

Total
100 %
(Note) Regarding alternatives, hedge fund investments are made for the purpose of risk diversification.

100 %2) Method of determining long-term expected rate of return
The long-term expected rate of return on plan assets is determined by taking into consideration the allocation of plan assets
which are expected currently and in the future and the long-term rates of return which are expected currently and in the futurefrom the various components of the plan assets.
(9) Assumptions used for actuarial calculations
Key basis for actuarial calculations

Discount rate

Previous fiscal year
(From April 1, 2021 toMarch 31, 2022)
0.8 %Long-term expected rate of return
Expected rate of salary increase (Note)

2.5 %Current fiscal year
(From April 1, 2022 toMarch 31, 2023)
0.8 %
2.5 %

Lump-sum payment plans
4.6 %
4.7 %
(Note) As the defined benefit corporate pension plan (fund type) is a fixed amount system (point system) based on the number ofyears of service, the expected rate of salary increase is not used.
3. Defined contribution plans
The amount of required contribution to the defined contribution plans of the Company and its consolidated subsidiaries was 222
million yen for the year ended March 31, 2023 and 244 million yen for the year ended March 31, 2022.

―92―

(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities
Previous fiscal year
(As of March 31, 2022)
Deferred tax assets
Tax loss carryforwards (Note) 2
Impairment losses
Denied sales discounts, etc.
Retirement benefit liability
Provision for bonuses
Long-term trade receivables
Provision for restructual reforms
Allowance for doubtful accounts
Other

Current fiscal year
(As of March 31, 2023)

1,106 million yen
793 million yen
683 million yen
469 million yen
262 million yen
215 million yen－
46 million yen
521 million yen

1,486 million yen
1,464 million yen
649 million yen
470 million yen
253 million yen
215 million yen
98 million yen
44 million yen
680 million yen

4,099 million yen(496) million yen

5,363 million yen(1,381) million yen(1,390) million yen(2,881) million yen(1,887) million yen(4,262) million yen

2,211 million yen

1,100 million yen

Valuation difference on available-for-sale securities(2,113) million yen(2,087) million yen

Retirement benefit asset
Reserve for tax purpose reduction entry of non-current
assetsOther(652) million yen(569) million yen(29) million yen(29) million yen

Deferred tax assets subtotal
Valuation allowance for tax loss carryforwards (Note) 2
Valuation allowance for deductible temporary
differences
Valuation allowances subtotal (Note) 1
Total deferred tax assets
Deferred tax liabilities

Total deferred tax liabilities(89) million yen(57) million yen(2,884) million yen(2,744) million yen

Net deferred tax assets (liabilities)(672) million yen(1,643) million yen(Notes)
1. Valuation allowance increased 2,374 million yen year on year, due mainly to the reclassification of subsidiaries undera group tax sharing system whose recoverability has fallen.
2. Tax loss carryforwards and deferred tax assets by expiration periods
Previous fiscal year (As of March 31, 2022)(Millions of yen)Tax loss carryforwards (*1)
Valuation allowances

Over 2
Over 1 year
Within 1
years but
but within 2
yearwithin 3
years
years
9
11
13
(9)

(11)

(13)

Over 3
years butwithin 4
years
9Over 4
years butwithin 5
years
47

(8)

(32)

Over 5
years

Total

1,014

1,106

(420)

(496)

0
0
14
594
(*2) 609－－(*1) Tax loss carryforwards shown in the above table are after multiplying the statutory tax rate.
(*2) With respect to 1,106 million yen in tax loss carryforwards (after application of the statutory tax rate), 609 million yen indeferred tax assets has been recognized. This 609 million yen in deferred tax assets was recognized as loss carryforwards
recoverable based on projected future taxable income out of the 1,106 million yen balance in tax loss carryforwards (after
application of the statutory tax rate) at the Company and some consolidated subsidiaries.
Deferred tax assets―93―Current fiscal year (As of March 31, 2023)(Millions of yen)
Within 1
year

Over 2
Over 1 year
years but
but within 2
within 3
years
years
13
8

Over 3
years butwithin 4
years
33

Over 4
years butwithin 5
years－

Tax loss carryforwards (*1)

11Valuation allowances

(11)

(13)

(8)

(33)

Deferred tax assets

－

－

0

－

Over 5
years

Total

1,419

1,486

－

(1,313)(1,381)－

105(*2) 105(*1) Tax loss carryforwards shown in the above table are after multiplying the statutory tax rate.
(*2) With respect to 1,486 million yen in tax loss carryforwards (after application of the statutory tax rate), 105 million yen indeferred tax assets has been recognized. This 105 million yen in deferred tax assets was recognized as loss carryforwards
recoverable based on projected future taxable income out of the 1,486 million yen balance in tax loss carryforwards (after
application of the statutory tax rate) at the Company and some consolidated subsidiaries.
2. Breakdown of major items that caused the significant difference between the statutory tax rate and the effective tax rate after
applying tax effect accounting
Previous fiscal year (As of March 31, 2022)
This note is omitted as we recorded loss before income taxes.
Current fiscal year (As of March 31, 2023)
This note is omitted as we recorded loss before income taxes.
3. Accounting treatment of national/regional income taxes and treatment of related tax effect accounting
The Company and some of its consolidated subsidiaries in Japan have adopted a group tax sharing system from the current fiscal
year. In addition, the Company and the subsidiaries concerned implement the accounting treatment of national/regional income taxes
and related accounting treatment of tax effect accounting and disclosure in accordance with the “Practical Solution on the
Accounting and Disclosure Under the Group Tax Sharing System” (the Practical Solution No.42, August 12, 2021).
(Asset retirement obligations)This note has been omitted due to the insignificance of the total amount of asset retirement obligations.
(Real estate for lease, etc.)
This note has been omitted due to the insignificance of the total amount of real estate for lease, etc.
(Revenue recognition)
1. Breakdown of revenues generated from contracts with customers
The breakdown of revenues generated from contracts with customers is shown in “[Notes] (Segment information, etc.)”
2. Information that forms the basis to understand revenues generated from contracts with customers
Information that forms the basis to understand revenues generated from contracts with customers is shown in “(5) Accounting
policies for significant revenues and expenses” under “4. Disclosure of accounting policies” in “[Notes] (Significant accounting
policies for preparation of consolidated financial statements).”―94―

(Segment information, etc.)[Segment information]
1. Description of reportable segments(1) Method for determining reportable segments
The Group’s reportable segments are determined based on the availability of separate financial information for such segmentsthat is examined periodically by the Board of Directors to make decisions regarding the allocation of management resources andto assess business performance.
The Group has divided its business operations into two reportable segments, based on their respective product categories: The“Processed Food Products operations” segment and the “Meat Products operations” segment.
(2) Description of the businesses that constitute each reportable segment
In the Processed Food Products operations segment, the Company manufactures and sells ham, sausage and precooked andprocessed foods. In the Meat Products operations segment, the Company manufactures and sells meat (beef, pork, chicken, etc.)
products.
2. Methods of measurement for sales, profit (loss), assets, liabilities and other items for each reportable segment
Accounting policies adopted by the reportable segments are identical to those described in “Significant accounting policies for
preparation of consolidated financial statements.”
Intersegment sales and transfers were calculated based on prevailing market prices.
3. Disclosure of sales, profit (loss), asset, liability, and other items and disaggregation of revenues for each reportable segment
Previous fiscal year (From April 1, 2021 to March 31, 2022)(Millions of yen)Book value
Reportable segmenton theProcessed
Other
Adjustments consolidated
Meat
Total
Food
(Note) 1(Note) 2
financial
Products
Total
Products
statements
operations
operations(Note) 3
Net sales
Ham & Sausage Products
Precooked & Processed
Foods

66,484－

66,484－

66,484－

66,484

81,526－

81,526－

81,526－

81,526Meat Products operations－

70,45570,455－70,455－70,455

Other

－

－

－

143

143

－

143

148,01170,455

218,466

143

218,610－

218,610148,01170,455

218,466

143

218,610－

218,610

－

－

－

721

721

(721)

－

148,01170,455

218,466865

219,332(721)

218,610Segment income (loss)(1,076)

173

(903)

38

(865)

－

(865)

Segment assets

85,353

19,817105,170201

105,371

23,532

128,903

Revenues generated fromcontracts with customers
Sales to externalcustomers
Intersegment sales andtransfers
Total

Other items
Depreciation and
7,519
418
7,937
8
7,945
7,945
－
amortization (Note) 4
Increase in property,
plant and equipment, and
6,994
381
7,376
7,376
0
7,376
－
intangible assets (Note) 4(Notes)1. The “Other” segment is business other than that of the reportable segments and includes the insurance agency
business.
2. Adjustments for segment assets of 23,532 million yen refer to corporate assets that are comprised mainly of cash anddeposits, investment securities and real estate for rent and other.
3. Segment income (loss) is equal to the operating loss in the consolidated statements of income.
4. Depreciation and amortization and increase in property, plant and equipment and intangible assets include long-term
prepaid expenses.

―95―

Current fiscal year (From April 1, 2022 to March 31, 2023)
Reportable segment(Millions of yen)Book valueon theAdjustments consolidated(Note) 2
financialstatements(Note) 3

Processed
Food
Products
operations

Meat
Products
operations

Ham & Sausage Products
Precooked & Processed
Foods

64,392－64,392－64,392－64,39282,700－82,700－82,700－82,700Meat Products operations－

74,75874,758－74,758－74,758

Other

－

－

－

127

127

－

127

147,093

74,758221,851

127

221,979－

221,979

147,093

74,758221,851

127

221,979－

221,979

－

－

－

854

854

(854)

－

147,093

74,758221,851

981

222,833(854)

221,979

Segment income (loss)(1,653)203(1,449)49(1,400)－(1,400)

Segment assets

83,615

20,633

104,249

225

104,474

21,786126,261

Total

Other
(Note) 1

Total

Net sales

Revenues generated fromcontracts with customers
Sales to externalcustomers
Intersegment sales andtransfers
Total

Other items
Depreciation and
7,278
408
7,687
6
7,693
7,693
－
amortization (Note) 4
Increase in property,
plant and equipment, and
6,441
407
6,848
2
6,850
9
6,860
intangible assets (Note) 4(Notes)1. The “Other” segment is business other than that of the reportable segments and includes the insurance agency
business.
2. Adjustments for segment assets of 21,786 million yen refer to corporate assets that are comprised mainly of cash anddeposits, investment securities and real estate for rent and other.
3. Segment income (loss) is equal to the operating loss in the consolidated statements of income.
4. Depreciation and amortization and increase in property, plant and equipment and intangible assets include long-term
prepaid expenses.

―96―[Related information]
Previous fiscal year (From April 1, 2021 to March 31, 2022)
1. Information by product and services(Millions of yen)

Sales to externalcustomers

Ham & Sausage
Products

Precooked &Processed Foods

Meat Products

66,484

81,52670,455

Other

Total
143

218,610

2. Information by geographic area
(1) Net sales
Not applicable as the Company’s external customers were based solely in Japan.
(2) Property, plant and equipment
Not applicable as the Company’s property, plant and equipment were located solely in Japan.
3. Information by major customer
This statement is omitted because there were no sales to specific customers that account for 10% or more of net sales in the
consolidated statement of income.
Current fiscal year (From April 1, 2022 to March 31, 2023)
1. Information by product and services(Millions of yen)

Sales to externalcustomers

Ham & Sausage
Products

Precooked &Processed Foods

Meat Products

64,39282,70074,758

Other

Total
127

221,979

2. Information by geographic area
(1) Net sales
Not applicable as the Company’s external customers were based solely in Japan.
(2) Property, plant and equipment
Not applicable as the Company’s property, plant and equipment were located solely in Japan.
3. Information by major customer
This statement is omitted because there were no sales to specific customers that account for 10% or more of net sales in the
consolidated statement of income.

―97―

[Information on impairment losses on non-current assets by reportable segment]
Previous fiscal year (From April 1, 2021 to March 31, 2022)(Millions of yen)Amountrecorded on
Adjustments
the(Note)
consolidated
statement ofincomeReportable segment

Impairment losses(Note)

Processed
Food
Products
operations

Meat
Products
operations

－

－

Other

Total

Total
－

－

－

9

9

Impairment losses of 9 million yen have been recognized due to decrease in recoverable value for real estate for rent andother not belonging to any segment.

Current fiscal year (From April 1, 2022 to March 31, 2023)
Reportable segment

Impairment losses (Note) 1(Notes)Processed
Food
Products
operations

Meat
Products
operations

2,071

227

Other

Total

Total

2,299

－

2,299

(Millions of yen)Amountrecorded on
Adjustments
the(Note) 2 consolidated
statement ofincome171

2,471

1. Part of restructuring expenses was included.
2. Impairment losses of 171 million yen have been recognized due to decrease in recoverable value for artwork and realestate for rent and other not belonging to any segment.

[Information about amortization and balance of goodwill by reportable segment]
Previous fiscal year (From April 1, 2021 to March 31, 2022)
Not applicable.
Current fiscal year (From April 1, 2022 to March 31, 2023)
Not applicable.
[Information on gain on bargain purchase by reportable segment]
Previous fiscal year (From April 1, 2021 to March 31, 2022)
Not applicable.
Current fiscal year (From April 1, 2022 to March 31, 2023)
Not applicable.

―98―[Related parties]
Previous fiscal year (From April 1, 2021 to March 31, 2022)
Not applicable.
Current fiscal year (From April 1, 2022 to March 31, 2023)
Not applicable.
(Per share information)
Previous fiscal year
(From April 1, 2021 toMarch 31, 2022)

Current fiscal year
(From April 1, 2022 toMarch 31, 2023)

Net assets per share

2,969.87 yen

2,731.03 yen

Loss per share(14.88 yen)

(198.77 yen)

(Notes)

1. Diluted profit per share is not stated because there is no dilutive security.
2. Basis of calculation(1) The basis of calculation of loss per share is as follows:
Previous fiscal year
Item
(From April 1, 2021 toMarch 31, 2022)

Current fiscal year
(From April 1, 2022 toMarch 31, 2023)

Loss attributable to owners of parent (Millions of
yen)

(376)

(4,987)

Amount not attributable to common shareholders(Millions of yen)－－

Loss attributable to owners of parent associated withto common stock (Millions of yen)(376)

(4,987)Weighted average number of common shares during
the fiscal year (Thousand shares)

25,28225,093(2) The basis of calculation of net assets per share is as follows:
Previous fiscal year
Item
(As of March 31, 2022)
Total net assets (Millions of yen)Amount deducted from total net assets (Millions ofyen)(Non-controlling interests included in the above)(Millions of yen)Amounts of net assets related to common stock at theend of the fiscal year (Millions of yen)
Number of common shares used to calculate net
assets per share at the end of the fiscal year
(Thousand shares)(Significant events after reporting period)
Not applicable.

―99―

Current fiscal year
(As of March 31, 2023)

75,48969,014

658

682

(658)

(682)

74,83068,331

25,19625,020

5) Annexed consolidated detailed schedules[Annexed consolidated detailed schedule of corporate bonds]
Not applicable.
[Annexed consolidated detailed schedule of borrowings]
Balance atBalance at end of
Average interest
beginning of
period (Millions ofperiod (Millions ofrate (%)
yen)
yen)

Category

Repayment deadline

Short-term borrowings

8,100

9,858

0.55

－

Current portion of long-termborrowings

2,817

2,917

0.85

－

Current portion of lease liabilities

1,084

1,024

2.67

－

Long-term borrowings (excluding acurrent portion)

4,551

5,255

0.87

April 2024 to
September 2028

Lease liabilities (excluding a current
portion)

4,118

3,735

2.72

April 2024 toMarch 2032

Total

20,672

22,790－－(Notes) 1. Average interest rate represents weighted average interest rate for the balance of borrowings, etc. at the endof the current fiscal year.
2. Scheduled annual repayment of long-term borrowings and lease liabilities (excluding the current portion)for 5 years subsequent to March 31, 2023.
Over 1 year but within Over 2 years but
Over 3 years but
Over 4 years but
Category
2 years (Millions ofwithin 3 years
within 4 years
within 5 years
yen)(Millions of yen)
(Millions of yen)
(Millions of yen)
Long-term
borrowings
Lease liabilities

2,322

1,418

944

566

993

777

603

507

[Annexed consolidated detailed schedule of asset retirement obligations]
The amounts of asset retirement obligations at the beginning and the end of the current fiscal year are not larger than 1%of the total amount of liabilities and net assets at the beginning and the end of the current fiscal year. Consequently, thisinformation is omitted.
(2) Other
Quarterly information for the fiscal year ended March 31, 2023
(Cumulative period)
Net sales
Profit (loss) before
income taxes
Profit (loss) attributable toowners of parent

1st Quarter

3rd Quarter

Current fiscal year

(Millions of yen)

54,483

110,557

171,284

221,979(Millions of yen)

6

(607)

717

(3,498)(Millions of yen)

(55)

(575)

231

(4,987)(Yen)(2.21)(22.87)

9.23(198.77)

Profit (loss) per share(Accounting period)
Profit (loss) per share

2nd Quarter

1st Quarter(Yen)(2.21)―100―

2nd Quarter(20.68)

3rd Quarter
32.27

4th Quarter(208.61)

2. Non-consolidated Financial Statements, etc.
(1) Non-consolidated Financial Statements
1) Non-consolidated Balance Sheets(Millions of yen)Previous fiscal year
(As of March 31, 2022)

Current fiscal year
(As of March 31, 2023)

AssetsCurrent assets
Cash and deposits

2,227

1,418

Notes receivable - trade
Accounts receivable - trade24
16,33230
16,477

Merchandise and finished goods
Work in process

7,558
244

7,780
236

Raw materials and supplies
Short-term loans receivable

3,680
3,557

4,741
2,898

Other
Allowance for doubtful accounts

3,223
(1)

3,713
(3)

Total current assets

36,84737,293

Property, plant and equipment
Buildings

8,353

8,222

Structures
Machinery and equipment

586
11,350567
11,306

VehiclesTools, furniture and fixtures

6
1,237

11
1,088

Land
Leased assets

10,894130

10,062
92

498

303

Non-current assets

Construction in progress

33,056

31,655Intangible assets

Total property, plant and equipment

2,058

1,370

Investments and other assets
Investment securities

11,678

11,397

5,337
7,135

5,413
7,378

4,938

4,226

2,875

3,118

Shares of subsidiaries and associates
Real estate for rent and other
Long-term loans receivable from subsidiaries
and associates
Other
Allowance for doubtful accounts

(821)

(830)

Total investments and other assets

31,14530,704

Total non-current assets
Total assets―101―

66,26063,729103,108

101,023

(Millions of yen)Previous fiscal year
(As of March 31, 2022)

Current fiscal year
(As of March 31, 2023)

Liabilities
Current liabilities
Notes payable - trade
Accounts payable - trade85
15,68990
15,183

Short-term borrowings
Current portion of long-term borrowings

7,330
2,779

9,128
2,902

Lease liabilities
Accounts payable - other

52
3,931

48
4,366

Income taxes payable
Provision for bonuses

56
320

－
296

Provision for restructual reforms
Other

－
471

178
413

Total current liabilities

30,71732,606

Non-current liabilities
Long-term borrowings

4,490

5,210

103
1,914

59
2,364

4

14

－
257

144

Lease liabilities
Deferred tax liabilities
Provision for loss on business of subsidiaries andassociates
Provision for restructual reforms
Other
Total non-current liabilities

263

6,770

8,056

37,48840,663

6,716

6,716

Legal capital surplus
Other capital surplus

21,685387

21,685387

Total capital surplus

22,07322,073Retained earnings
Legal retained earnings

1,676

1,676

20,05020,05066

66

13,0508,175

Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus

Other retained earnings
General reserve
Reserve for tax purpose reduction entry of
non-current assets
Retained earnings brought forward

34,84329,968Treasury shares

Total retained earnings(3,066)(3,342)

Total shareholders' equity

60,56655,415

Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

4,982

4,944

71

0

Total valuation and translation adjustments

5,053

4,944

Total net assets
Total liabilities and net assets―102―

65,61960,360103,108

101,023

2) Non-consolidated Statements of Income

Net sales

Previous fiscal year
(From April 1, 2021 toMarch 31, 2022)
139,319(Millions of yen)
Current fiscal year
(From April 1, 2022 toMarch 31, 2023)
135,000

Cost of sales

121,514

120,453

Gross profit

17,805

14,547*1 19,002*1 17,745(1,197)(3,198)

883
564

806
546

Selling, general and administrative expenses
Operating loss
Non-operating income
Interest and dividend income
Rental income from real estate
Other

201

202

1,648

1,554

Interest expenses
Rental expenses on real estate

98
280

106
258

Other

46

34

Total non-operating expenses

424

398

26

(2,042)*3 123*3 115

429

643
14

Total non-operating income
Non-operating expenses

Ordinary profit (loss)
Extraordinary income
Gain on disposal of non-current assets
Gain on sale of investment securities
Gain on liquidation of subsidiaries and associates－－

Reversal of allowance for doubtful accounts
Reversal of provision for loss on business of
subsidiaries and associates
Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment losses
Restructuring expenses
Loss on abandonment of inventories
Extra retirement payments
Loss on business of and investment in subsidiaries andaffiliates
Loss on valuation of investment securities

7

1

－

555

781

*4 340*4 2539*5 242－－19*6 1,845

*8 11

*8 27

*7 271

34

29－

Total extraordinary losses

410

2,674

Profit (loss) before income taxes

171(3,935)

Income taxes - current

(47)

(323)

Income taxes - deferred

14

507

Total income taxes

(33)

183

Profit (loss)

204(4,119)―103―

3) Non-consolidated Statements of Changes in Net Assets
For the previous fiscal year (from April 1, 2021 to March 31, 2022)(Millions of yen)
Shareholders' equity
Capital surplus

Retained earnings
Other retained earnings

Share capital Legal capital Other capital Total capital Legal retained
surplussurplussurplusearnings

Balance at beginning of
period6,716

21,685387

22,073

1,676

Generalreserve

Reserve for tax
purpose
Retained earnings
reduction entry
brought forward
of non-current
assets

20,05067

13,606

Changes during period
Dividends of surplus(762)

Reversal of reserve for tax
purpose reduction entry of
non-current assets(0)Profit0
204

Purchase of treasury
sharesNet changes in items otherthan shareholders' equity
Total changes during period

－

－

－

－

－

－

(0)

(556)

Balance at end of period

6,716

21,685387

22,073

1,676

20,05066

13,050Shareholders' equity
Retained earnings
Total retained
earnings
Balance at beginning of
period35,400Treasuryshares(2,697)

Valuation and translation adjustments
Valuation
Total
Total valuation and Total net assets
difference on Deferred gains orshareholders'translation
available-for-sale losses on hedges
equityadjustments
securities
61,492

5,933

34

5,968

67,461

Changes during period
Dividends of surplus

(762)

(762)

(762)

Reversal of reserve for tax
purpose reduction entry of
non-current assets

－

－

－

Profit

204

204

204

(368)

(368)

Purchase of treasury
sharesNet changes in items otherthan shareholders' equity
Total changes during period
Balance at end of period

(368)

(951)

36

(915)

(915)

(557)

(368)

(926)

(951)

36

(915)

(1,841)

34,843(3,066)60,566

4,982

71

5,053

65,619―104―

For the current fiscal year (from April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders' equity
Capital surplus

Retained earnings
Other retained earnings

Share capital Legal capital Other capital Total capital Legal retained
surplussurplussurplusearnings

Balance at beginning of
period6,716

21,685387

22,073

1,676

Generalreserve

Reserve for tax
purpose
Retained earnings
reduction entry
brought forward
of non-current
assets

20,05066

13,050Changes during period
Dividends of surplus(755)

Reversal of reserve for tax
purpose reduction entry of
non-current assets

(0)

Loss

0
(4,119)Purchase of treasury
sharesNet changes in items otherthan shareholders' equity
Total changes during period

－

－

－

－

－

－

(0)

(4,874)

Balance at end of period

6,716

21,685387

22,073

1,676

20,05066

8,175

Shareholders' equity
Retained earnings
Total retained
earnings
Balance at beginning of
period34,843

Treasuryshares(3,066)

Valuation and translation adjustments
Valuation
Total
Total valuation and Total net assets
difference on Deferred gains orshareholders'translation
available-for-sale losses on hedges
equityadjustments
securities
60,566

4,982

71

5,053

65,619Changes during period
Dividends of surplus
Reversal of reserve for tax
purpose reduction entry of
non-current assets
Loss

(755)

(755)

(755)

－

－

－

(4,119)(4,119)(4,119)

(276)

(276)

Purchase of treasury
sharesNet changes in items otherthan shareholders' equity

(276)

(37)

(70)

(108)

(108)

Total changes during period(4,875)(276)(5,151)

(37)

(70)

(108)

(5,259)Balance at end of period

29,968(3,342)

55,415

4,944

0

4,944

60,360―105―

[Notes](Uncertainties of entity's ability to continue as going concern)
Not applicable.
(Significant accounting policies)
1. Basis and method concerning valuation of assets(1) Basis and method concerning valuation of securities
1) Shares of subsidiaries and associates
Stated at their cost determined by the moving-average method.
2) Available-for-sale securities- Securities other than shares without market price, etc.
Stated at fair value.
(Any valuation difference is booked directly to net assets and the cost of securities sold are computed by the movingaverage method.)- Shares without market price, etc.
Stated at their cost determined by the moving-average method.
(2) Basis and method concerning valuation of derivatives
Derivatives
Stated at fair value.
(3) Basis and method concerning valuation of inventories
Merchandise and finished goods, work in process, and raw materials and supplies
Stated at their cost determined by the weighted average method.
(Balance sheet values reflect write-downs for decreased profitability.)
2. Depreciation and amortization methods for non-current assets(1) Property, plant and equipment (excluding leased assets)
Applying the declining balance method. However, the straight-line method is applied for the buildings (excluding thefacilities attached to buildings) acquired on and after April 1, 1998 and the facilities attached to buildings and structuresacquired on and after April 1, 2016.
(2) Intangible assets (excluding leased assets)
Applying the straight-line method. For software for its own use, the straight-line method is applied based on the internallyestimated useful life of 5 years.
(3) Leased assets
Leased assets under finance leases that do not transfer its ownership
Leased assets under finance lease transactions that do not transfer their ownership are amortized using the straight-line
method over the lease term with a residual value of zero.
3. Accounting policies for allowances and provisions(1) Allowance for doubtful accounts
An allowance for doubtful accounts is provided to cover bad-debt losses. With respect to normal trade accounts receivable,
it is stated at an amount based on the actual rate of historical bad debts. For certain doubtful receivables, the uncollectible
amounts are individually estimated.
(2) Provision for bonuses
To provide for payments of employees’ bonuses, an amount accrued for the current fiscal year among the estimated future
obligations is recorded as provisions.
(3) Provision for retirement benefits
Provision for retirement benefits is provided at an amount based on the projected retirement benefit obligation and plan
assets at the end of the current fiscal year. When the estimated amount of plan assets is smaller than the projected amount of
retirement benefit obligations adjusted by unrecognized actuarial gain or loss, the difference is recorded as provision for
retirement benefits. When it exceeds the adjusted retirement benefit obligations, the difference is recorded as prepaid pension
expenses. As the estimated plan assets exceeded the adjusted retirement benefit obligations at the end of the current fiscal year,
prepaid pension expenses were recorded in “Other” under “Investments and other assets.”
1) Periodic attribution of projected retirement benefits
Projected benefit obligations are attributed to the periods of service until the end of the current fiscal year on a benefit
formula basis in determining retirement benefit obligations.
2) Amortization method for actuarial gains or losses
Actuarial gains and losses are amortized by the straight-line method over a fixed period of 10 years, which is within the
average remaining service years of the eligible employees, beginning in the fiscal year following the year in which the gains
and losses are recognized.

―106―

(4) Provision for loss on business of subsidiaries and associates
Provision for loss on business of subsidiaries and associates is provided for the estimated loss that the Company would
need to bear above its investment, taking into consideration the financial position and operational performance, etc. of thesubsidiaries and associates.
(5) Provision for restructual reforms
The amount projected to be incurred as expenses for restructual reforms in the future is recognized to provide for such
expenses.
4. Accounting policies for revenues and expenses(1) The Company’s key performance obligation in its primary business operations
The Company’s primary business operations are the Processed Food Products operations (manufacturing and sales of ham,sausage and precooked and processed foods) and the Meat Products operations (processing and sales of beef, pork, chicken,etc.) and we identify that delivery of these merchandise and finished goods to our customers as our performance obligation.
(2) General timing when the Company satisfies its performance obligation
The Company applies an alternative treatment set forth in Paragraph 98 of the “Implementation Guidance on AccountingStandard for Revenue Recognition.” Therefore, revenue is, in principle, recognized at the time of shipment of merchandiseand finished goods, where control over them is transferred to a customer and thus we judge that our performance obligation issatisfied.
Transaction prices are calculated by deducting a portion of distribution expenses, promotion expenses, etc. from prices
agreed in a contract with a customer.
5. Other significant accounting policies for preparation of non-consolidated financial statements(1) Hedge accounting
Exceptional accounting treatments are applied to interest rate swaps because they meet specific conditions. In addition,accounts receivable and accounts payable in a foreign currency hedged by fixed-rate contracts, etc., are treated withdesignated hedge accounting.
(2) Accounting treatment of retirement benefits
The accounting treatment of unrecognized actuarial gain or loss relating to retirement benefits is different from theaccounting treatment of unrecognized actuarial gain or loss in the consolidated financial statements.
(3) Accounting treatment of asset-related non-deductible consumption taxes, etc.
Asset-related non-deductible national/regional consumption taxes are recorded as expenses for the fiscal year ended March
31, 2023.

―107―

(Significant accounting estimates)
1. Impairment of non-current assets(1) Amount recorded in the financial statements for the fiscal year ended March 31, 2023
The book value of business assets (including common assets)(Millions of yen)Previous fiscal year

Current fiscal year

Property, plant and equipment

31,94030,166

Intangible assets

2,058

1,370

Total

33,99831,537The Company determined that there was an indication of impairment of the business assets of the Processed Food Products
operations and the Meat Products operations due to the continuous recording of operating loss in both operations, andreviewed the necessity of recording impairment losses. As a result, it was determined that the book value of the businessassets, including common assets, of the Meat Products operations would exceed the undiscounted future cash flows and theCompany recorded impairment losses of 71 million yen accordingly.
In addition, due to the decision to implement restructuring including the reorganization of production sites, the Company
recorded impairment losses of 1,331 million yen as restructuring expenses among extraordinary losses with regard to part ofbusiness assets of the Processed Food Products operations, including movables such as machinery and equipment and realestate such as lands that were not expected to be utilized in the future.
(2) Significant accounting estimates for identified items
A method to calculate the amount set out in section (1) is identical to that described in “1. Impairment of non-current assets”
under “[Notes] (Significant accounting estimates)” in the consolidated financial statements.
2. Recoverability of deferred tax assets(1) Amount recorded in the financial statements for the fiscal year ended March 31, 2023
(Millions of yen)Previous fiscal year
Deferred tax assets(Before offsetting against
deferred tax liabilities)

Current fiscal year

1,047

621

(2) Significant accounting estimates for identified items
A method to calculate the amount set out in section (1) is identical to that described in “2. Recoverability of deferred tax
assets” under “[Notes] (Significant accounting estimates)” in the consolidated financial statements.

―108―

(Non-consolidated balance sheets)
1. Monetary claims and obligations to subsidiaries and associates
Monetary claims and obligations to the subsidiaries and associates concerned, excluding those presented separately, are as
follows:
Previous fiscal year
Current fiscal year
(As of March 31, 2022)(As of March 31, 2023)
Short-term monetary claims
9,788 million yen
10,063 million yen
Long-term monetary claims
4,938 million yen
4,231 million yen
Short-term monetary obligations
7,210 million yen
8,191 million yen
2. Guarantee obligation
Loans to the following companies have been guaranteed by the Company. Loan guarantees refer to guarantees on borrowings
from financial institutions.
Previous fiscal year (As of March 31, 2022)
Guaranteed amount
Guarantee
Details(Millions of yen)
Loan
Yahata Food Co., Ltd.
100
guarantees
Transaction
Pioneer Foods Co., Ltd.
7
guarantees
Total
107
Current fiscal year (As of March 31, 2023)
Guaranteed amount
Guarantee(Millions of yen)

Details

Yahata Food Co., Ltd.

100

Pioneer Foods Co., Ltd.

7

Total

Loan
guarantees
Transaction
guarantees

107

3. Overdraft agreements
The Company has signed overdraft agreements with its correspondent banks to efficiently procure working capital. The
unrealized borrowings under these agreements at the end of the fiscal year were as follows:
Previous fiscal year
Current fiscal year
(As of March 31, 2022)(As of March 31, 2023)
Total amounts in the overdraft agreements
30,800 million yen
30,800 million yen
Borrowing balance
7,330 million yen
9,128 million yen
Difference

23,470 million yen―109―

21,672 million yen

(Non-consolidated statements of income)*1. The percentages of selling expenses among total expenses for the previous fiscal year and the current fiscal year were some 84%
and 83%, respectively, while those of general and administrative expenses were some 16% and 17%, respectively.
Major items and their amount included in selling, general and administrative expenses are as follows:
Previous fiscal year
Current fiscal year
(From April 1, 2021 to(From April 1, 2022 toMarch 31, 2022)
March 31, 2023)
Distribution expenses
7,708 million yen
7,357 million yen
Salaries and allowances
2,900 million yen
2,635 million yen
Depreciation
823 million yen
772 million yen
Provision for bonuses
159 million yen
196 million yen
Retirement benefit expenses
164 million yen
114 million yen
Provision of allowance for doubtful accounts
0 million yen
8 million yen
2. Amount of business transactions with subsidiaries and associates and transactions with subsidiaries and associates other thanbusiness transactions are as follows:
Previous fiscal year
Current fiscal year
(From April 1, 2021 to(From April 1, 2022 toMarch 31, 2022)
March 31, 2023)
Operating revenue
38,391 million yen
41,756 million yen
Operating expenses
Amount of transactions other than business transactions

23,985623

million yen
million yen

22,112 million yen
584 million yen*4. The breakdown of loss on disposal of non-current assets are as follows:
Previous fiscal year
(From April 1, 2021 toMarch 31, 2022)
Buildings and structures
283 million yen
Machinery and equipment
54 million yen
Other
2 million yen

Current fiscal year
(From April 1, 2022 toMarch 31, 2023)
207 million yen
31 million yen
14 million yen*3. Gain on disposal of non-current assets
Primarily generated from the sales of real estate for rent and other.

Total

340

million yen*5. Impairment losses
Current fiscal year (From April 1, 2022 to March 31, 2023)
Category
Type
Machinery and equipment, land,
Assets to be disposed/abolished (*)
etc.
Business assets of the Meat Products
Softwareoperations
Real estate for rent and other
Rental assets(Land)
Real estate for rent and other
Idle assets(Land, buildings)
Artwork
Tools, furniture and fixtures

253 million yen

Location
7 plants in Kanagawa
Prefecture, etc.

Amount
1,523 million yen

Osaka Prefecture

71 million yen

Kumamoto Prefecture

1 million yen

Nagano Prefecture,etc.
Osaka Prefecture, etc.

62 million yen
108 million yen

Total
－
－
1,766 million yen(*) Included in “Restructuring expenses” on the non-consolidated statement of income.
The Company classifies non-current assets into four categories: business assets of the Processed Food Products operations
and the Meat Products operations, rental assets, idle assets and artwork. The Company groups its business assets by business
units that are continuously monitored in management accounting; and rental assets, idle assets and artwork by individual asset.
Due to the decision to implement restructuring including the reorganization of production sites, the Company reduced thebook value of production facilities and real estate that were not expected to be utilized in the future to their recoverable values
and the reduced amounts were recorded as restructuring expenses (extraordinary losses).
The Company determined that there was an indication of impairment of the business assets of the Meat Products operations
due to the continuous recording of operating loss, and reviewed the necessity of recording impairment losses. As a result, it
was determined that the book value of the business assets, including common assets, of the Meat Products operations would
exceed the undiscounted future cash flows and the Company recorded impairment losses of 71 million yen accordingly.

―110―

In addition, when the recoverability of rental assets or idle assets has fallen below book value due to declines in market
prices or profitability, the book value of these assets has been reduced to their recoverable value and the reduced amounts
were recorded as impairment losses (extraordinary losses). The impairment losses of 63 million yen relate to real estate forrent and other (“Other” under “Investments and other assets”).
The recoverable value of rental assets is measured by the net realizable value or the value in use. The recoverable value of
idle assets is measured by the net realizable value. The net realizable value is assessed based on the appraisal value, etc. andvalue in use is calculated by discounting the future cash flows by 3.2%.
The recoverable value of artwork is calculated based on appraisal value obtained from third parties such as art experts.
When the appraisal value of a certain piece of artwork has fallen below book value, the relevant book value has been reduced
to its recoverable value and the reduced amount was recorded as impairment losses (extraordinary losses). The impairment
losses of 108 million yen relate to tools, furniture and fixtures.
*6. Restructuring expenses
Restructuring expenses involve losses incurred by the decision to implement restructuring, including the reorganization of
production sites, consisting of impairment losses of 1,523 million yen for the production facilities, real estate, etc. and otherrelated expenses of 322 million yen.
*7. Loss on abandonment of inventories
Loss on abandonment of inventories were recorded for a temporary loss incurred by an accident at a consignee.
*8. The breakdown of loss on business of and investment in subsidiaries and associates are as follows:
Previous fiscal year
Current fiscal year
(From April 1, 2021 to(From April 1, 2022 toMarch 31, 2022)
March 31, 2023)
Provision of allowance for doubtful accounts
11 million yen
14 million yen
Provision for loss on business
Loss on liquidation of subsidiaries and associates－－

10 million yen
3 million yen

Total

11 million yen

27 million yen(Securities)
Previous fiscal year (As of March 31, 2022)
Shares in subsidiaries and associates do not have market prices. As a result, their fair values are not stated.
The book values of the shares in subsidiaries and associates without market prices on the balance sheet are as follows:(Millions of yen)Previous fiscal year
Category(As of March 31, 2022)
Shares of subsidiaries
5,281
Shares of associates

55

Total

5,337

Current fiscal year (As of March 31, 2023)
Shares in subsidiaries and associates do not have market prices. As a result, their fair values are not stated.
The book values of the shares in subsidiaries and associates without market prices on the balance sheet are as follows:(Millions of yen)
Current fiscal year
Category(As of March 31, 2023)
Shares of subsidiaries
5,357
Shares of associates

55

Total

5,413

―111―

(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities
Previous fiscal year
(As of March 31, 2022)
Deferred tax assets
Impairment losses
Tax loss carryforwards
Loss on valuation of shares of subsidiaries andassociates
Denied sales discounts, etc.
Allowance for doubtful accounts
Long-term trade receivables
Provision for restructual reforms
Provision for bonuses
Other

Current fiscal year
(As of March 31, 2023)

758 million yen
587 million yen

1,194 million yen
959 million yen

465 million yen

465 million yen

454 million yen
252 million yen
208 million yen－
98 million yen
243 million yen

428 million yen
255 million yen
208 million yen
98 million yen
90 million yen
389 million yen

Deferred tax assets subtotal

3,067 million yen

4,091 million yen

Valuation allowances(2,020) million yen(3,470) million yen

Total deferred tax assets

1,047 million yen

621 million yen(2,110) million yen(2,084) million yen(790) million yen(871) million yen(29) million yen(29) million yen(31) million yen(0) million yen

Total deferred tax liabilities(2,962) million yen(2,985) million yen

Net deferred tax assets (liabilities)(1,914) million yen(2,364) million yen

Deferred tax liabilities
Valuation difference on available-for-sale securities
Prepaid pension costs
Reserve for tax purpose reduction entry of non-current
assetsDeferred gains or losses on hedges

2. Breakdown of major items that caused the significant difference between the statutory tax rate and the effective tax rate after
applying tax effect accounting
Previous fiscal year
Current fiscal year
(As of March 31, 2022)(As of March 31, 2023)
Statutory tax rate
30.6%－
Adjustment:
Nondeductible expenses, including entertainment
expenses
Nontaxable income, including dividend income

14.6%

－

(85.6)%－Per capita inhabitants tax

35.5%

－

Changes in valuation allowance(14.0)%－

Income taxes for prior periods(0.8)%

－

Other

0.3%

－

Effective tax rate after applying tax effect accounting(19.4)%(Note) Notes for the current fiscal year are omitted as we recorded loss before income taxes.

－

3. Accounting treatment of national/regional income taxes and treatment of related tax effect accounting
The Company adopts a group tax sharing system from the current fiscal year. In addition, the Company implements theaccounting treatment of national/regional income taxes and related accounting treatment of tax effect accounting and disclosure inaccordance with the “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System” (the Practical
Solution No.42, August 12, 2021).
(Revenue recognition)
With regard to information that forms the basis to understand revenues generated from contracts with customers, the samecontents are presented in “[Notes] (Revenue recognition)” in the consolidated financial statements. Therefore, notes are omitted
here.
(Significant events after reporting period)
Not applicable.

―112―4) Annexed detailed schedules[Annexed detailed schedule of property, plant and equipment, etc.](Millions of yen)
Depreciation
Accumulated
andBalance at depreciationamortization
end of period
andduring theamortization
periodBalance at
beginning of
periodIncreaseduring theyear

Decreaseduring theyear

Property, plant andBuildings
equipment

8,353

1,130

496
[317]

764

8,222

24,377Structures

586

67

28
[26]

57

567

3,148

11,350

3,654

785
[749]

2,912

11,306

43,792

6

11

0
[0]

6

11

387

Tools, furniture andfixtures

1,237

76

115
[111]

109

1,088

2,009

Land

10,894

-

832
[233]

-

10,062-

Leased assets

130

4

-

42

92

137

Construction inprogress

498

1,452

1,647

-

303

-

Total

33,056

6,397

3,906
[1,439]3,893

31,65573,852

Total

2,058

74

85
[71]

677

1,370

2,304

Category

Type of asset

Machinery andequipment
VehiclesIntangible assets(Notes) 1. Major increases in “Increase during the year” are as follows:
Buildings

Primarily for renovation work on plants.
Major increases during the year by plant are as follows:

Machinery and equipment

Construction in progress

Takatsuki Plant

458 million yen

Iwate Plant

297 million yen

Yokosuka Plant

97 million yen

For the reinforcement of existing production facilities and the acquisition of new
machinery and equipment to streamline the operations.
Major increases during the year by plant are as follows:
Takatsuki Plant

1,182 million yen

Kanto Plant

1,094 million yen

Karatsu Plant

266 million yen

Takatsuki Plant

974 million yen

Iwate Plant

205 million yen

Shonan Plant

95 million yen―113―

2. Major decreases in “Decrease during the year” are as follows:
Buildings
Machinery and equipment
Land
Construction in progress

Primarily due to the recording of restructuring expenses and reclassification to realestate for rent and other.
Primarily due to the recording of restructuring expenses and reclassification to realestate for rent and other.
Primarily due to the recording of restructuring expenses and reclassification to realestate for rent and other.
Due to reclassification to buildings, machinery and equipment, etc.

Figures in [ ] under “Decrease during the year” represent restructuring expenses and impairment losses included
therein.

[Annexed detailed schedule of provisions](Millions of yen)
Category

Balance at
beginning of
periodIncrease during
the year

Decrease during
the year(Used for primary
purposes)

Decrease during
the year(Other)Balance at end of
periodAllowance for doubtful
accounts

823

24

0

13

833

Provision for bonuses

320

296

320

-

296

4

10

-

-

14

Provision for loss on
business of subsidiaries andassociates

Provision for restructual322
322
reforms(Note) “Decrease during the year (Other)” in the allowance for doubtful accounts was due to the reversal of a portion thereof, etc. due
to factors such as the collection of receivables and the improved performance of subsidiaries and associates.

(2) Components of major assets and liabilities
This information is omitted because the Company prepares consolidated financial statements.
(3) Other
Not applicable.

―114―VI. Outline of Share-Related Administration of Reporting Company
Fiscal year

From April 1 to March 31

Ordinary General Meetingof Shareholders

June

Record date

March 31

Record date for dividends ofsurplus

March 31

Number of shares consistingof a minimum unit

100

Purchase of shares less than
one unit
Handling office

Stock Transfer Agency Business Planning Dept., Sumitomo Mitsui Trust Bank, Limited 4-5-33
Kitahama, Chuo-ku, Osaka-shi, Osaka

Transfer agent

Sumitomo Mitsui Trust Bank, Limited1-4-1 Marunouchi, Chiyoda-ku, Tokyo

Transfer office－

Purchasing fee

FreeMethod of public notice

The Company’s method of public notice is by electronic public notice.
However, if the Company is unable to give an electronic public notice due to an accident orother unavoidable reason, the public notice shall be posted on the Nihon Keizai Shimbun.
The Company’s URL for public notice:https://www.marudai.jp/

Shareholders’ privileges

Each shareholder listed on the shareholder list and holding 2 units (200 shares) or more as of
September 30 each year will receive 3,000 yen worth of products of Marudai Food Co., Ltd.

―115―

VII. Reference Information of Reporting Company
1. Information about parent of reporting company
The Company does not have a parent company or other entity that is provided for in Article 24-7, Paragraph 1 of the Financial
Instruments and Exchange Act.
2. Other reference information
The Company filed the following documents during the period from the starting date of the current fiscal year to the filing date of
the Annual Securities Report.
(1) Annual Securities Report and documents attached thereto, and Confirmation Letter thereof
For the 74th fiscal year (from April 1, 2021 to March 31, 2022)
Filed to the Director-General of Kanto Local Finance Bureau on June 27, 2022
(2) Internal Control Report
For the 74th fiscal year (from April 1, 2021 to March 31, 2022)
Filed to the Director-General of Kanto Local Finance Bureau on June 27, 2022
(3) Quarterly Securities Reports and Confirmation Letters thereof
For the first quarter of the 75th fiscal year (from April 1, 2022 to June 30, 2022)
Filed to the Director-General of Kanto Local Finance Bureau on August 10, 2022
For the second quarter of the 75th fiscal year (from July 1, 2022 to September 30, 2022)
Filed to the Director-General of Kanto Local Finance Bureau on November 14, 2022
For the third quarter of the 75th fiscal year (from October 1, 2022 to December 31, 2022)
Filed to the Director-General of Kanto Local Finance Bureau on February 13, 2023
(4) Shelf Registration Statement (straight bond) and other attached documents
Filed to the Director-General of Kanto Local Finance Bureau on July 25, 2022
(5) Share Buyback Reports
Filed to the Director-General of Kanto Local Finance Bureau on September 9, 2022
(6) Amendment Report of Annual Securities Report and Confirmation Letter thereof
For the 74th fiscal year (from April 1, 2021 to March 31, 2022)
Filed to the Director-General of Kanto Local Finance Bureau on December 27, 2022

―116―

Part II

Information about Reporting Company’s Guarantor, etc.

Not applicable.

―117―Independent Auditors’ Report on Consolidated Financial Statements and Internal Control
June 28, 2023
To the Board of Directors of Marudai Food Co., Ltd.
KPMG AZSA LLC

Osaka Office

Takahide Nakahata
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

Satoru Komatsuno
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant<Financial Statements Audit>
Audit Opinion
Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act of Japan, we have audited the consolidated
financial statements of Marudai Food Co., Ltd. included in “Financial Information” for the fiscal year from April 1, 2022 to March 31,
2023, which comprise the consolidated balance sheets, the consolidated statements of income, the consolidated statements ofcomprehensive income, the consolidated statements of changes in net assets, the consolidated statements of cash flows, significant
accounting policies for preparation of consolidated financial statements, other notes and the annexed consolidated detailed schedules.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial positionsof Marudai Food Co., Ltd. and its consolidated subsidiaries as of March 31, 2023, and their results of operations and their cash flows
for the fiscal year then ended in conformity with accounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under the auditing
standards is stated in “Auditor’s Responsibility for the Audit of the Consolidated Financial Statements.” We are independent of theCompany and its consolidated subsidiaries in accordance with the provisions related to professional ethics in Japan, and are fulfillingother ethical responsibility as an auditor. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis
for our audit opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the consolidated
financial statements for the current fiscal year. Key audit matters are the matters addressed in the process of conducting the audit ofand forming the audit opinions on the consolidated financial statements as a whole, and we do not express separate opinions on suchmatters.

―118―

Appropriateness of the judgment of Marudai Food Co., Ltd. as to whether an impairment loss should be recognized on noncurrent assets related to the Processed Food Products operations
Details of the key audit matters and the basis for our
How the key audit matter was addressed in the audit
determination thereof
Property, plant and equipment of 57,319 million yen andOur audit procedures related to the appropriateness of theintangible assets of 1,573 million yen were recognized in the decision regarding the necessity of recognizing an impairment
consolidated balance sheets of Marudai Food Co., Ltd. (the loss on non-current assets related to Processed Food ProductsCompany) for the fiscal year ended March 31, 2023. As operations of Marudai Food Co., Ltd. included the following,
described in [Notes] “(Significant accounting estimates) 1. among others.
Impairment of non-current assets” to the consolidated financial (1) Assessment of internal controls
statements, the Company’s business assets related to the
We assessed the design and operating effectiveness of theProcessed Food Products operations including common assets Company’s internal controls for determining the necessity ofinclude property, plant and equipment of 30,166 million yen recognizing an impairment loss on the non-current assets.
and intangible assets of 1,370 million yen, the total of which (2) Assessment of the reasonableness of estimates ofaccounted for 25.0% of consolidated total assets.
undiscounted future cash flows
While these non-current assets are depreciated/amortized in
In order to assess the appropriateness of the key
a systematic manner, they need to be tested for impairment assumptions made by Marudai Food Co., Ltd. in formulating
whenever there is an impairment indicator. The impairment the management plan, which are the basis for estimating
test is performed by comparing the total amount of undiscounted future cash flows, we primarily conducted theundiscounted future cash flows that are expected to be following procedures, in addition to questioning thegenerated from the related asset groups with their book values. management and personnel in charge of the departments of the
If the recognition of an impairment loss is deemed necessary, Company for the bases of these assumptions.
the book value is reduced to the recoverable amount, and the ● We conducted the following procedures regarding theresulting decrease in the book value is recognized as an
projected net sales in the management plan.
impairment loss.
- We analyzed the trend of relationship between
Marudai Food Co., Ltd. has faced harsh business conditions
management plans and actual results for prior periods,
and recorded operating losses for six consecutive fiscal years.
monitored the status of selling price revisions during
This was due to a rise in raw material prices and energy costs
recent years, and examined the feasibility of selling pricenot offset by price revisions. For this reason, the businessrevision in the future, which is a key assumption for theassets for Processed Food Products operations including themanagement plan.
common assets were reviewed whether to recognize an- We reviewed the consistency of the projected net sales
impairment loss in the current fiscal year. The undiscountedwith the projected data related to market trend for
future cash flows used in the review were estimated based on
products such as hams and sausages and that forthe management plan of the Company formulated by its
precooked and processed foods released by relevant
management. However, there is uncertainty with the following
external organizations
assumptions: the net sales projected based on the degree of ● As for the projected unit prices of raw materials in theachievement of the budget and changes in the market
management plan, we conducted trend analyses of the unit
environment for the current fiscal year; and the unit priceprices of the raw materials purchased in the past andforecast of raw materials based on the current market trends.
reviewed the consistency with the projected market data
The judgment of the management on these matters will have areleased by external organizations.
significant impact on the estimation of the undiscounted future
cash flows.
Based on the above, we have determined that theappropriateness of the decision regarding the necessity ofrecognizing an impairment loss on non-current assets related
to the Processed Food Products operations of Marudai Food
Co., Ltd. is of particular importance in the audit of theconsolidated financial statements for the current fiscal year
and constitutes a key audit matter.

Other Contents
Other contents refer to information in Annual Securities Reports other than the consolidated/non-consolidated financial statements
and the audit report thereof. The management is responsible for preparing and disclosing such other contents. Statutory Auditors andthe Board of Statutory Auditors are responsible for monitoring the execution of Directors’ duties related to designing and operating thereporting process of other contents.
Other contents are not within the scope of our audit opinions on the consolidated financial statements, and we do not express
opinions on other contents.
Our responsibility for the audit of the consolidated financial statements are as follows: While reading through other contents,
examining whether there are material discrepancies between their contents and the consolidated financial statements or knowledge weobtained through our audits, and paying due attention to determine whether there is an indication of material errors in other contents,
other than the aforementioned material discrepancies.
In the event that we judge that there are material errors in other contents based on our audit work, we are required to report such a
fact.
There is nothing we should report with respect to the details of other contents.
Responsibilities of the Management, Statutory Auditors and the Board of Statutory Auditors for the Consolidated Financial Statements
The management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance withaccounting principles generally accepted in Japan, and for designing and operating such internal control as the management determines―119―is necessary to enable the preparation and fair presentation of the consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the management is responsible for assessing whether it is appropriate to prepare
the consolidated financial statements in accordance with the premise of a going concern, and for disclosing matters relating to going
concern when it is required to do so in accordance with accounting principles generally accepted in Japan.
Statutory Auditors and the Board of Statutory Auditors are responsible for monitoring the execution of Directors’ duties related todesigning and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to express an opinion on the consolidated financial statements from an
independent standpoint in an audit report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemedmaterial if they can be reasonably expected to, either individually or collectively, influence the decisions of users taken on the basis of
the consolidated financial statements.
Auditors make professional judgment in the audit process in accordance with auditing standards generally accepted in Japan, andperform the following while maintaining professional skepticism.
- Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit procedures toaddress the risks of material misstatement. The audit procedures shall be selected and applied as determined by the auditor. In
addition, sufficient and appropriate audit evidence shall be obtained to provide a basis for the audit opinion.
- In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order to design audit
procedures that are appropriate in the circumstances, although the purpose of the audit of the consolidated financial statements is not
to express an opinion on the effectiveness of the entity’s internal control.
- Assess the appropriateness of accounting policies adopted by the management and the method of their application, as well as thereasonableness of accounting estimates made by the management and the adequacy of related notes.
- Determine whether it is appropriate for the management to prepare the consolidated financial statements on the premise of a going
concern and, based on the audit evidence obtained, determine whether there is a significant uncertainty in regard to events orconditions that may cast significant doubt on the entity’s ability to continue as a going concern. If there is a significant uncertainty
concerning the premise of a going concern, the auditor is required to call attention to the notes to the consolidated financial
statements in the audit report, or if the notes to the consolidated financial statements pertaining to the significant uncertainty areinappropriate, issue a modified opinion on the consolidated financial statements. While the conclusions of the auditor are based on
the audit evidence obtained up to the date of the audit report, depending on future events or conditions, an entity may be unable tocontinue as a going concern.
- Besides assessing whether the presentation of and notes to the consolidated financial statements are in accordance with accounting
principles generally accepted in Japan, assess the presentation, structure, and content of the consolidated financial statements
including related notes, and whether the consolidated financial statements fairly present the transactions and accounting events on
which they are based.
- Obtain sufficient and appropriate audit evidence regarding the financial information of the Company and its consolidated subsidiaries
in order to express an opinion on the consolidated financial statements. The auditor is responsible for instructing, supervising, andimplementing the audit of the consolidated financial statements, and is solely responsible for the audit opinion.
The auditor reports to Statutory Auditors and the Board of Statutory Auditors regarding the scope and timing of implementation of
the planned audit, material audit findings including material weaknesses in internal control identified in the course of the audit, andother matters required under the auditing standards.
The auditor reports to Statutory Auditors and the Board of Statutory Auditors regarding the observance of provisions related toprofessional ethics in Japan as well as matters that are reasonably considered to have an impact on the auditor’s independence and any
safeguards that are in place to reduce or eliminate obstacles.
From the matters communicated with the Statutory Auditors and the Board of Statutory Auditors, the auditor determines thosematters that were of most significance in the audit of the consolidated financial statements of the current fiscal year and are therefore
the key audit matters. The auditor describes these matters in its audit reports unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, the auditor determines that a matter should not be communicated in its reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
<Internal Control Audit>
Audit Opinion
Pursuant to Article 193-2, Paragraph 2 of the Financial Instruments and Exchange Act of Japan, we also have audited the Internal
Control Report of Marudai Food Co., Ltd. as of March 31, 2023.
In our opinion, the Internal Control Report referred to above, which represents that the internal control over financial reporting of
Marudai Food Co., Ltd. as of March 31, 2023, is effectively maintained, presents fairly, in all material respects, the result of theassessment on internal control over financial reporting in conformity with assessment standards for internal control over financial
reporting generally accepted in Japan.
Basis for the Opinion
We conducted our internal control audit in accordance with auditing standards for internal control over financial reporting generally
accepted in Japan. Our responsibility under the auditing standards for internal control over financial reporting is described in“Auditor’s Responsibility for the Internal Control Audit.” We are independent of the Company and its consolidated subsidiaries inaccordance with the provisions related to professional ethics in Japan, and are fulfilling other ethical responsibility as an auditor. We
believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.

―120―

Responsibilities of the Management, Statutory Auditors and the Board of Statutory Auditors for the Internal Control Reports
The management is responsible for designing and operating internal control over financial reporting, and for the preparation and fairpresentation of Internal Control Report in accordance with assessment standards for internal control over financial reporting generally
accepted in Japan.
Statutory Auditors and the Board of Statutory Auditors are responsible for monitoring and examining the design and operations ofinternal control over financial reporting.
There is a possibility that misstatements may not be completely prevented or detected by internal control over financial reporting.
Auditor’s Responsibility for the Internal Control Audit
Our responsibility is to obtain reasonable assurance about whether the Internal Control Report is free from material misstatement
and to express an opinion on the Internal Control Report from an independent standpoint in an Internal Control Audit Report, based on
our internal control audit.
Auditors make professional judgment in the audit process in accordance with auditing standards for internal control over financial
reporting generally accepted in Japan, and perform the following while maintaining professional skepticism.
- Perform procedures to obtain audit evidence about the result of the assessment of internal control over financial reporting in theInternal Control Report. The procedures of internal control audit are selected at the auditor’s judgment, based on the significance ofeffects on reliability of financial reporting.
- Examine presentations on the scope, procedures and results of the assessment of internal control over financial reporting made by the
management, as well as evaluate the overall presentation of Internal Control Report on internal control.
- Obtain sufficient and appropriate audit evidence about the result of the assessment of internal control over financial reporting inInternal Control Report. The auditor is responsible for instructing, supervising, and implementing the audit of Internal Control
Report on internal control, and is solely responsible for the audit opinion.
The auditor reports to Statutory Auditors and the Board of Statutory Auditors regarding the scope and timing of implementation of
the planned internal control audit, the result of internal control audit, identified material weaknesses in internal control subject todisclosure, a follow-up on fixing the weaknesses, and other matters required under the auditing standards for internal control.
The auditor reports to Statutory Auditors and the Board of Statutory Auditors regarding the observance of provisions related toprofessional ethics in Japan as well as matters that are reasonably considered to have an impact on the auditor’s independence and any
safeguards that are in place to reduce or eliminate obstacles.
Conflicts of Interest
There are no special interests between the engagement partners/audit firm and the Company or its consolidated subsidiaries thatshould be disclosed under the provisions of the Certified Public Accountants Act.
End
(Notes)1. The original copy of the Independent Auditors’ Report above is maintained by the Company (a company that files
annual securities reports).
2. XBRL data are not subject to the audit.

―121―

Independent Auditors’ Report
June 28, 2023
To the Board of Directors of Marudai Food Co., Ltd.
KPMG AZSA LLC

Osaka Office

Takahide Nakahata
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

Satoru Komatsuno
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Audit Opinion
Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act of Japan, we have audited the nonconsolidated financial statements of Marudai Food Co., Ltd. included in “Financial Information” for the 75th fiscal year from April 1,
2022 to March 31, 2023, which comprise the non-consolidated balance sheets, the non-consolidated statements of income, the nonconsolidated statements of changes in net assets, significant accounting policies, other related notes and the annexed detailed schedules.
In our opinion, the non-consolidated financial statements referred to above present fairly, in all material respects, the financial
position of Marudai Food Co., Ltd. as of March 31, 2023 and the results of operations for the fiscal year then ended in conformity withaccounting principles generally accepted in Japan.
Basis for the Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility under the auditing
standards is stated in “Auditor’s Responsibility for the Audit of the Non-consolidated Financial Statements.” We are independent of theCompany in accordance with the provisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as anauditor. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the nonconsolidated financial statements for the current fiscal year. Key audit matters are the matters addressed in the process of conducting
the audit of and forming the audit opinions on the non-consolidated financial statements as a whole, and we do not express separate
opinions on such matters.
Appropriateness of the judgment of Marudai Food Co., Ltd. as to whether an impairment loss should be recognized on noncurrent assets related to the Processed Food Products operations
The key audit matter “appropriateness of the judgment of Marudai Food Co., Ltd. as to whether an impairment loss should berecognized on non-current assets related to the Processed Food Products operations,” which should be disclosed in the
Independent Auditors’ Report for the non-consolidated financial statements, is substantially the same as the key audit matter“appropriateness of the judgment of Marudai Food Co., Ltd. as to whether an impairment loss should be recognized on noncurrent assets related to the Processed Food Products operations” disclosed in the Independent Auditors’ Report for the
consolidated financial statements. For this reason, the description for this key audit matter is omitted in the Independent
Auditors’ Report for the non-consolidated financial statements.

Other Contents
Other contents refer to information in Annual Securities Reports other than the consolidated/non-consolidated financial statements
and the audit report thereof. The management is responsible for preparing and disclosing such other contents. Statutory Auditors andthe Board of Statutory Auditors are responsible for monitoring the execution of Directors’ duties related to designing and operating thereporting process of other contents.
Other contents are not within the scope of our audit opinions on the non-consolidated financial statements, and we do not express
opinions on other contents.
Our responsibility for the audit of the non-consolidated financial statements are as follows: While reading through other contents,
examining whether there are material discrepancies between their contents and the non-consolidated financial statements or knowledge
we obtained through our audits, and paying due attention to determine whether there is an indication of material errors in othercontents, other than the aforementioned material discrepancies.
In the event that we judge that there are material errors in other contents based on our audit work, we are required to report such a―122―

fact.
There is nothing we should report with respect to the details of other contents.
Responsibilities of the Management, Statutory Auditors and the Board of Statutory Auditors for the Non-consolidated Financial
Statements
The management is responsible for the preparation and fair presentation of the non-consolidated financial statements in accordancewith accounting principles generally accepted in Japan, and for designing and operating such internal control as the management
determines is necessary to enable the preparation and fair presentation of the non-consolidated financial statements that are free frommaterial misstatement, whether due to fraud or error.
In preparing the non-consolidated financial statements, the management is responsible for assessing whether it is appropriate toprepare the non-consolidated financial statements in accordance with the premise of a going concern, and for disclosing mattersrelating to going concern when it is required to do so in accordance with accounting principles generally accepted in Japan.
Statutory Auditors and the Board of Statutory Auditors are responsible for monitoring the execution of Directors’ duties related todesigning and operating the financial reporting process.
Auditor’s Responsibility for the Audit of the Non-consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the non-consolidated financial statements as a whole are freefrom material misstatement, whether due to fraud or error, and to express an opinion on the non-consolidated financial statements froman independent standpoint in an audit report, based on our audit. Misstatements can occur as a result of fraud or error, and are deemedmaterial if they can be reasonably expected to, either individually or collectively, influence the decisions of users taken on the basis of
the non-consolidated financial statements.
Auditors make professional judgment in the audit process in accordance with auditing standards generally accepted in Japan, andperform the following while maintaining professional skepticism.
- Identify and assess the risks of material misstatement, whether due to fraud or error. Design and implement audit procedures toaddress the risks of material misstatement. The audit procedures shall be selected and applied as determined by the auditor. In
addition, sufficient and appropriate audit evidence shall be obtained to provide a basis for the audit opinion.
- In making those risk assessments, the auditor considers internal control relevant to the entity’s audit in order to design audit
procedures that are appropriate in the circumstances, although the purpose of the audit of the non-consolidated financial statements
is not to express an opinion on the effectiveness of the entity’s internal control.
- Assess the appropriateness of accounting policies adopted by the management and the method of their application, as well as thereasonableness of accounting estimates made by the management and the adequacy of related notes.
- Determine whether it is appropriate for the management to prepare the non-consolidated financial statements on the premise of agoing concern and, based on the audit evidence obtained, determine whether there is a significant uncertainty in regard to events orconditions that may cast significant doubt on the entity’s ability to continue as a going concern. If there is a significant uncertainty
concerning the premise of a going concern, the auditor is required to call attention to the notes to the non-consolidated financial
statements in the audit report, or if the notes to the non-consolidated financial statements pertaining to the significant uncertainty areinappropriate, issue a modified opinion on the non-consolidated financial statements. While the conclusions of the auditor are basedon the audit evidence obtained up to the date of the audit report, depending on future events or conditions, an entity may be unable
to continue as a going concern.
- Besides assessing whether the presentation of and notes to the non-consolidated financial statements are in accordance withaccounting principles generally accepted in Japan, assess the presentation, structure, and content of the non-consolidated financial
statements including related notes, and whether the non-consolidated financial statements fairly present the transactions andaccounting events on which they are based.
The auditor reports to Statutory Auditors and the Board of Statutory Auditors regarding the scope and timing of implementation of
the planned audit, material audit findings including material weaknesses in internal control identified in the course of the audit, andother matters required under the auditing standards.
The auditor reports to Statutory Auditors and the Board of Statutory Auditors regarding the observance of provisions related toprofessional ethics in Japan as well as matters that are reasonably considered to have an impact on the auditor’s independence and any
safeguards that are in place to reduce or eliminate obstacles.
From the matters communicated with the Statutory Auditors and the Board of Statutory Auditors, the auditor determines thosematters that were of most significance in the audit of the non-consolidated financial statements of the current fiscal year and are
therefore the key audit matters. The auditor describes these matters in its audit reports unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, the auditor determines that a matter should not be communicatedin its report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits ofsuch communication.
Conflicts of Interest
There are no special interests between the engagement partners/audit firm and the Company that should be disclosed under theprovisions of the Certified Public Accountants Act.
End
(Notes)1. The original copy of the Independent Auditors’ Report above is maintained by the Company (a company that files
annual securities reports).
2. XBRL data are not subject to the audit.

―123―

[Cover Page][Document Title]

Confirmation Letter[Clause of Stipulation]

Article 24-4-2, Paragraph 1 of the Financial Instruments and Exchange Act[Place of Filing]

Director-General, Kanto Local Finance Bureau[Filing Date]

June 29, 2023

[Company Name]

Marudai Shokuhin Kabushiki Kaisha[Company Name in English]

Marudai Food Co., Ltd.

[Title and Name of Representative]

Yuji Sato, President and Representative Director[Title and Name of Chief Financial Officer]

Not applicable.

[Address of Registered Head Office]21-3 Midoricho, Takatsuki-shi, Osaka[Place for Public Inspection]

Tokyo Branch of Marudai Food Co., Ltd.
(4-7-5 Tsukiji, Chuo-ku, Tokyo)
Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo)―124―

1. Appropriateness of the Content of Statements in this Annual Securities Report
Yuji Sato, President and Representative Director of Marudai Food Co., Ltd. (the Company) has confirmed that the Annual
Securities Report for the 75th fiscal year (from April 1, 2022 to March 31, 2023) of the Company is reasonably and fairly stated inaccordance with the Financial Instruments and Exchange Act and related regulations.

2. Special Notes
There are no noteworthy matters that are pertinent to this Annual Securities Report.

―125―

[Cover Page][Document Title]

Internal Control Report[Clause of Stipulation]

Article 24-4-4, Paragraph 1 of the Financial Instruments and Exchange Act[Place of Filing]

Director-General, Kanto Local Finance Bureau[Filing Date]

June 29, 2023

[Company Name]

Marudai Shokuhin Kabushiki Kaisha[Company Name in English]

Marudai Food Co., Ltd.

[Title and Name of Representative]

Yuji Sato, President and Representative Director[Title and Name of Chief Financial Officer]

Not applicable.

[Address of Registered Head Office]21-3 Midoricho, Takatsuki-shi, Osaka[Place for Public Inspection]

Tokyo Branch of Marudai Food Co., Ltd.
(4-7-5 Tsukiji, Chuo-ku, Tokyo)
Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo)―126―

1. Basic Framework of the Internal Control over Financial Reporting
Yuji Sato, President and Representative Director, having the responsibility to design and operate internal control over financial
reporting of Marudai Food Co., Ltd. (the Company), designs and operates such internal control of the Company in accordancewith the basic framework set forth in “On the Setting of the Standards and Practice Standards for Management Assessment andAudit concerning Internal Control Over Financial Reporting (Council Opinions)” published by the Business Accounting Council.
Note that internal control aims at achieving its objectives to a reasonable extent, given that all basic components of internal
control are organically linked and function as a whole. Thus, internal control over financial reporting may not be able tocompletely prevent or detect misstatement in financial reporting.

2. Scope of Assessment, Assessment Date and Assessment Procedure
Assessment of internal control over financial reporting was performed as of March 31, 2023 (i.e., the last day of the current
fiscal year) in accordance with assessment standards for internal control over financial reporting generally accepted in Japan.
In this assessment, the management first assessed company-level controls that would have a material impact on the reliability ofoverall financial reporting on a consolidated basis, and based on the results, then selected individual business processes to beassessed. In the selected individual process assessment, the management assessed the effectiveness of internal control byanalyzing the business processes in scope, identifying key controls that would have a material impact on the reliability of thefinancial reporting, and assessing the design and operation of such key controls.
The management determined the scope for the internal control over financial reporting assessment by selecting the Company
itself, consolidated subsidiaries, and companies accounted for by the equity method based on their materiality on the reliability offinancial reporting. The materiality on the reliability of financial reporting was determined in consideration of both quantitativeand qualitative aspects. The management thus reasonably determined the process-level control assessment scope based on the
results of the company-level control assessment, which covered the Company and 24 consolidated subsidiaries. Note that the
impact of 2 consolidated subsidiaries and 1 equity method affiliate were determined to be both quantitatively and qualitatively
insignificant and were therefore not included in the scope of assessment of company-level controls.
To specifically determine the process-level control assessment scope, 2 business locations were selected as “Significant
Business Locations.” The 2 business locations were the top two in net sales (after eliminating intercompany transactions) for theprevious fiscal year and accounted for approximately two-thirds of the Company’s consolidated net sales in the aggregate for theprevious fiscal year. In such Significant Business Locations, all business processes related to the accounts that are closely
associated with the Company’s business objectives, such as net sales, accounts receivable - trade, and inventories, were includedin the scope of assessment. Additionally, business processes in which risks of significant misstatements are high and significant
accounts involving estimates and financial forecasts were added into the scope of assessment as material business processes,
considering the impact on financial reporting. Such business processes include processes from businesses in any applicablebusiness location, whether or not they are Significant Business Locations.

3. Assessment Result
Based on the assessment results, the management concluded that the internal control over financial reporting at the end of thecurrent fiscal year was effective.

4. Supplementary Information
Not applicable.

5. Special Notes
Not applicable.

―127―

Certification

regarding the registration as a third-country audit firm according to § 134 Section 1
in conjunction with § 38 number 5 WPO (German Public Accounting Act)KPMG AZSA LLC, Tokyo/Japanis registered as a third-country audit firm in the public professional register of the
Wirtschaftsprüferkammer effective April 12, 2022, registration number 205001600 after
compliance with the requirements for registration according to § 134 Section 2 WPO.
With regard to the activity according to § 134 Section 1 WPO, the aforementioned firm issubject to the provisions of quality control (§§ 57a – 57g WPO), professional oversight(§§ 61a – 71 WPO), as well as professional jurisdiction (§§ 71a – 127 WPO). A quality
assurance review may be waived if the registered third-country audit firm has already been
subject to a quality assurance review in another member state of the European Union within
the past three years. The same applies if within the past three years a quality assurance reviewof the third-country audit firm has been performed in a third country, provided that the quality
assurance review of that country was recognized as being equivalent based on an evaluationaccording to § 134 Section 4 WPO.

Berlin, April 12, 2022

Dr. Peter Uhlmann
Head of Division Member Affairs

Manuela Schwoy
Head of Department Member Affairs