Annual Securities Report(Report pursuant to Article 24, Paragraph 1 of the Financial Instruments and Exchange Act)The 74th Fiscal Year
(From April 1, 2021 to March 31, 2022)

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 the same timeas the Annual Securities Report.

―2―

Contents

Page

Annual Securities Report for the 74th 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.........................................................................................................................................11
II. Overview of Business...............................................................................................................................12
1. Management policy, business environment, issues to address ..........................................................12
2. Business risks....................................................................................................................................18
3. Management analysis of financial position, operating results and cash flows ..................................23
4. Material contracts, etc. ......................................................................................................................30
5. Research and development activities ................................................................................................31
III. Information about Facilities ....................................................................................................................32
1. Overview of capital expenditures......................................................................................................32
2. Major facilities ..................................................................................................................................32
3. Planned addition, retirement, and other changes of facilities............................................................33
IV. Information about Reporting Company...................................................................................................34
1. Company’s shares, etc.......................................................................................................................34
2. Acquisition and disposal of treasury shares ......................................................................................37
3. Dividend policy.................................................................................................................................38
4. Corporate governance .......................................................................................................................39
V. Financial Information ...............................................................................................................................62
1. Consolidated Financial Statements, etc.............................................................................................63
2. Non-consolidated Financial Statements, etc. ..................................................................................100
VI. Outline of Share-Related Administration of Reporting Company ........................................................116
VII. Reference Information of Reporting Company ...................................................................................117
Part II Information about Reporting Company’s Guarantor, etc. ....................................................................118

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 27, 2022

[Fiscal Year]The 74th fiscal year (from April 1, 2021 to March 31, 2022)[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]

Nobuyoshi Katoh, Director, 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]

Nobuyoshi Katoh, Director, 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

70th fiscal year 71st fiscal year 72nd fiscal year 73rd fiscal year 74th 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 2018

March 2019

March 2020

March 2021

March 2022

239,586

243,030

245,820

223,000

218,610

2,820

2,724

3,118

180

(380)

1,842

1,463

1,653

412

(376)

3,692

314

(122)

3,555

(1,126)76,98476,09475,05677,75075,489131,146

132,626

131,854

131,342

128,903

Net assets per share(Yen)

2,998.47

2,971.34

2,930.66

3,036.59

2,969.87

Profit (loss) per share

(Yen)

70.39

57.48

65.04

16.23

(14.88)

Diluted profit per share

(Yen)

–

–

–

–

–

Equity ratio

(%)

58.3

57.0

56.5

58.7

58.1

Return on equity

(%)

2.4

1.9

2.2

0.5

(0.5)

(Times)

36.4

32.7

30.1

105.2

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

3,152

6,695

8,608

7,673

7,030

Net cash provided by (usedin) investing activities(Millions ofyen)(7,554)(7,534)(8,271)(5,388)(5,688)Net cash provided by (usedin) financing activities(Millions ofyen)(3,258)

255

(219)

(2,053)(1,826)

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

8,709

8,127

8,244

8,476

7,990

Number of employees

2,064

2,023

1,938

2,107

2,066

Price earnings ratio–[Average number of part-time[3,429][3,431][3,225][3,177][3,138]
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 ratio for the 74th fiscal year is not stated because we recorded loss attributable to owners of parent.
5. Effective October 1, 2018, the Company conducted a one-for-five share consolidation of its common stock.
Accordingly, we have calculated net assets per share and profit per share on the assumption that the consolidation ofshares was conducted at the beginning of the 70th fiscal year.

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

70th fiscal year 71st fiscal year 72nd fiscal year 73rd fiscal year 74th fiscal year

Period of account(Millions ofyen)(Millions ofyen)(Millions ofyen)(Millions ofyen)

Net sales
Ordinary profit
ProfitShare capital
Total number of issued shares(Shares)(Millions ofyen)(Millions ofyen)

Net assets
Total assets

March 2018

March 2019

March 2020

March 2021

March 2022

166,570

164,746

165,846

151,801

139,319

417

399

1,443

864

26

756

459

1,166

579

204

6,716

6,716

6,716

6,716

6,716

132,527,909

26,505,581

26,505,581

26,505,581

26,505,581

68,63866,79865,59967,461

65,619105,116

105,609104,365

105,149

103,108

Net assets per share(Yen)

2,690.07

2,626.24

2,580.18

2,655.69

2,604.31

Dividends per share

(Yen)

8.00

35.00

35.00

30.00

30.00

(–)

(–)

(–)

(–)

(–)

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

(Yen)

28.91

18.05

45.88

22.79

8.11

Diluted profit per share

(Yen)

–

–

–

–

–

Equity ratio

(%)

65.3

63.3

62.9

64.2

63.6

Return on equity

(%)

1.1

0.7

1.8

0.9

0.3

(Times)

88.8

104.2

42.6

75.1

182.6

(%)

138.4

193.9

76.3

131.2

369.9

Number of employees

1,057

1,004

915

875

784

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

[889]

[859]

[795]

[767]

[778]

Price earnings ratio
Dividend payout ratio

Total shareholder return

(%)

107.0

80.3

84.8

76.2

67.8

(Comparison index: TOPIX
total return index)(%)(115.9)(110.0)(99.6)(141.5)(144.3)

(Yen)

559

2,327
(545)

2,474

2,130

1,836

Highest share price

1,605
1,495
1,625
1,409
(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.
The highest and lowest share prices refer to those at the First Section of the Tokyo Stock Exchange. The share prices
for the 71st fiscal year refer to the highest and lowest after the share consolidation, with the 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 net assets per share and profit per share on the assumption that the consolidation ofshares was conducted at the beginning of the 70th fiscal year.

Lowest share price(Notes)

1.

2.
3.
4.

5.

(Yen)

470

―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.

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
October 2009
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 theOctober 2011
Company’s consolidated subsidiaries.
Acquired Toraku Foods Co., Ltd., headquartered in Kobe-shi, Hyogo Prefecture, which is now one of theJuly 2020
Company’s consolidated subsidiaries.
(Note) The Company has transitioned from the First Section of Tokyo Stock Exchange to the Prime Market of the same Exchange
as of April 4, 2022.
April 2009―7―

3. Description of business
The Group, comprising Marudai Food Co., Ltd. (the Company) and its 27 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., Meat Supply Co., Ltd.,and Marudaifood 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, 2022

Company name

Address(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

Share capitalor investments
in capital(Millions of
yen)

10
10
10
10
10
10

Relationship
Description ofprincipal business

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

Ratio of Number ofvotingconcurrent
LoansrightsDirectors/ (Millions ofholding (%) Statutoryyen)
Auditors
100.0

1

–

100.0

–

–

100.0

1

–

100.0

–

–

100.0

1

–

100.0

1

–

Toda Foods Co., Ltd.

Toda-shi, Saitama
Prefecture

349

Processed Food
Products operations

100.0(11.7)

1

3,361

Azumino Food Co., Ltd.

Matsumoto-shi,
Nagano Prefecture

495

Processed Food
Products operations

100.0

1

1,600

Toraku Foods Co., Ltd.

Higashinada-ku,
Kobe-shi, Hyogo
Prefecture

90

Processed Food
Products operations

100.0

1

1,000

Marushin Foods Co., Ltd.

Moka-shi, Tochigi
Prefecture

100

Processed Food
Products operations

100.0

1

16

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, Kagawa
5)
Prefecture

50

Processed Food
Products operations

100.0

1

350

Hornmeier Co., Ltd.

Takatsuki-Shi, Osaka

340

100.0

1

771

Marudaifood Co., Ltd.

Nishinari-ku, Osakashi

80

100.0

1

460

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

–

310

Marbest Trading Co., Ltd.
(Note 3)

Takatsuki-Shi, Osaka

20

Meat Products
operations

100.0

1

–

Marudai Service Co., Ltd.

Takatsuki-Shi, Osaka

95

Other

100.0

1

417

Lop Buri, theKingdom of Thailand

thousandbaht
330,000

Processed Food
Products operations

20.0

–

–

Processed Food
Products operations
Processed Food
Products operations
Meat Products
operations

Operationaltransactions

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 meatproducts, among
other operations
Supplying raw
materials, among
other operations
Purchasing meat,among otheroperations
Offering insurance
agency services,among other services

Lease offacilities

No
No
No
No
No
No

Yes

Yes

No

Yes
Yes

Yes

Yes

No

Yes
Yes

Yes

Yes

Yes

And eight 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).
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
38,776 million yen(2) Ordinary loss

153 million yen(3) Loss

117 million yen(4) Net assets

849 million yen(5) Total assets

4,828 million yen―10―5. Employees(1) Information about group
As of March 31, 2022
Name of business segment

Number of employees

1,533(2,711)
425
Meat Products operations
(373)
8
Other
(21)
100
Company-wide (shared)
(33)
2,066
Total
(3,138)(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)

784
(778)

43.4

Name of business segment

As of March 31, 2022
Average annual salary(Thousands of yen)

20.7

6,107

Number of employees

664
(734)
20
Meat Products operations
(11)
–
Other
(–)
100
Company-wide (shared)
(33)
784
Total
(778)
(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 91 from the end of the previous fiscal year, most of whom were transferred to theCompany’s consolidated subsidiaries.
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.
The other consolidated subsidiaries whose employees are not members of the Federation of Marudai Food Group Labor
Unions do not have their own labor unions, but the relationship between management and labor unions there is stable.

―11―

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, 2022.
(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 out of theblue. 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 acting withcomplete 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.

―12―

(3)

Operational and financial issues we must address as soon as possible
The management environment surrounding the Company is expected to remain uncertain due to, among others, increasingly
fierce price competition with competitors, in the situation that we find it almost impossible to forecast when the COVID-19
pandemic will be contained. This uncertainty is the result of structural changes in Japan’s consumption structure brought by its
dwindling and aging population with the falling birthrate, and also of consumers’ defensive sentiment trying to protect theirlives, as shown in a wider consumer inclination toward lower-priced goods.
The industry we are in is facing concerns over a possible rise in manufacturing costs, which may then be greater than productprices even if we revise up them, against a backdrop of a sharp fall in the yen as well as soaring costs for raw materials, energy,
and logistics.
We have also been seeing consumer values toward food diversifying since the onset of the pandemic, as consumers are
growing more aware of safety and healthiness and also adapting to a new lifestyle. In addition, there is an increasing call for
initiatives to resolve social issues including those regarding the global environment, such as reductions in carbon dioxide
emissions and waste.
Under this environment, we started our 3-Year Medium-Term Management Plan in April 2021 to resolve our management
issues. However, the environment surrounding our business is drastically changing and growing highly uncertain mainly
because of the prolonged impact of the pandemic, disrupted logistics, and soaring costs for raw materials and energy such as
crude oil and grain against a backdrop of the war in Ukraine, among other factors. For this reason, we have formulated arevised 3-Year Medium-Term Management Plan for a period from April 1, 2022 through March 31, 2025 after recalculating
and reviewing numerical targets. To flexibly respond to changes in the management environment in the future, we have decided
to announce a 3-year medium-term rolling plan with numerical targets, in principle, by reviewing it every year. The 3-Year
Medium-Term Management Plan starting on April 1, 2022 has five basic policies: creation of new customer value, reform inearnings 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, 2022 through March 31, 2025 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) Developing 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 and ISO 22000 certifications. We will work on initiatives to address environment,social, and governance (ESG) issues and achieve the United Nation’s Sustainable Development Goals (SDGs), among
others, so that we can fulfill our social responsibilities.

―13―

(5)
1)

2)

Growth strategy
Overview
Creation of new customer value
A. Transformation in marketing(A)
Make full use of digital tools to improve the accuracy of our analyses of palate and consumer trends(B)
Promote company-wide, cross-sectional marketing Enhance our ability to make our corporate activities
widely known
B. Initiatives to improve quality(A)
Promotion of obtaining a certification for the Food Safety Management System(B)
Pursue deliciousness by making full use of new manufacturing methods and novel materials.
Reform in earnings structure
C. Transformation in cost structures(A)
Improve productivity by integrating and digitalizing operations(B)
Reduce logistics costs- Increase the load-carrying efficiency to reduce the number of vehicles used for shuttle services on mainroutes linking plants- Reduce processing charges by simplifying the work of sorting materials or products- Reduce freight charges by concentrating the production of ham and sausages at optimal locations- Examine the possibility of relocating logistics centers
D. Promotion of improvement in plant efficiency(A)
Improve productivity and yields through the investment for improving efficiency- Improve the efficiency of, or reorganize, core plants manufacturing ham and sausages
Takatsuki Plant (4,100 million yen), Kanto Plant (3,500 million yen), Karatsu Plant (1,100 million yen)
* The amounts in ( ) refer to the planned investment amounts including those already invested.
- Improve the efficiency of, or reorganize, the plants manufacturing precooked & processed foods
Prepare a dedicated line for the products made from vegetables(B)
Step up efforts to reduce waste
Expansion of business domains
E. 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)Spin off the department for commercial food products- Strengthen sales of commercial food products to restaurants, school meals, delicatessen counters at
supermarkets, etc.
F. Foray into growing markets
Larger sales of the products made from vegetables- Increase the number of items we sell by bolstering product development
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.

―14―

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- Work to improve quality
b. Scale up sales of mainstay
products- Promote sales by making full use of digital toolsc. Nurture products to newly workon

- Ally with overseas manufacturers- Sharpen our cost competitiveness- Develop region-specific products[Specific strategies]- Bolster product development- Review our earnings base and manage profits by channel- Strengthen our sales capabilities and streamline operations- Implement the marketing mix to address diverse consumer needs- Work to develop a microwavable product that is delicious but easy to prepare- Facilitate the shift to environment-friendly packaging materials, such as paper trays with areduced environmental impact- Develop and produce safe and healthy products by reviewing the use of food additives- Improve our production technology and cost competitiveness by adopting new manufacturingmethods and efficient facilities(B)

The Precooked & Processed Foods department[Product policy]a. Sell with a focus on growing
markets- Increase sales of retort foods

b. Reduce environmental
footprint- Reduce the amount of the plastic packaging materials used

- Make full use of topping lines- Reduce food waste- Increase sales of the products made from vegetables

c. Tap new business domains- Enter into the frozen food market[Specific strategies]- Increase soup items such as retort-pouch instant curries and “Sundubu,” for which we haveextended production lines- 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―15―

B. Meat Products operations[Product policy]a. Procure the raw materials that
could differentiate us fromcompetitors
b. Import processed food products
from overseas
c. Respond to changes in theexternal environment- Strengthen the relationship with suppliers- Respond to reduced or lifted tariffs- 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

(6)
1)

2)

Initiatives for sustainability
Development of human resources
A. Acquire the organizational capabilities that give us a competitive advantage- Strengthen the management of personnel training programs with a focus on diverse values and specialties- 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)
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
C. Strengthen health management- 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.
- 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
Supply health-conscious products
Contribution to a sustainable society
A. Strengthen 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.
B. Initiatives to address ESG and SDGs
We have formulated the Sustainability Basic Policy and Action Guidelines to contribute to the development of asustainable society through our socially and environmentally friendly business operations, and also established theSustainability Committee to further promote our initiatives to realize a sustainable society.
(A) Adaptation to changing climate and mitigation of its impact- Set the Sustainability Basic Policy to further reduce the environmental impact by promoting the activities to preserve
the environment and introducing the facility 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.

―16―

(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[Major measures]- Switched from pouch-shaped packages to those with lower environmental footprint (to reduce the amount ofplastic used and CO2 emissions)- Started using biomass ink (to reduce CO2 emissions)- Switched to packages without trays (to reduce the amount of plastic used and CO2 emissions)(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 (soy meat product “Daizu Life,” literally meaning “soy life,” and the“PlantRECIPE” series)(7)

Impact of the COVID-19 pandemic and our response
The food industry estimates that any developments in the COVID-19 situation will impact consumer behavior and the foodmarket structure. Based on this estimation, the industry forecasts that while competition among food manufacturers is growing
fiercer due to consumers’ budget-consciousness driven by their concerns over uncertain future, consumers and the market are
pushing the manufacturers to work harder to produce safer and healthier products.
Worsening situations of the pandemic led to state of emergency and quasi-emergency declarations, forcing people to stay athome for a longer time than before and restaurants and bars were requested to shorten their operating hours. For this reason, weonly saw a weak recovery of the demand of the restaurant industry. As a result, there has only been a limited pickup in net salesof the products for convenience stores in urban areas and part of commercial food products, as well as in the demand for gift
products. In addition, there was a lull in the demand for eat-in and ready-to-eat meals, which had been spurred by the stay-athome demand (consumption). However, sales of food products through the e-commerce are still growing.
Meanwhile, we are now experiencing more uncertainty and instability in the outlook for the raw material market because ofconcerns over reduced imports caused by the suspension of production at overseas suppliers and price fluctuations.
The Group will continue to 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, 2022 through March 31, 2025. At the same time, we will execute
our social mission and fulfill our responsibilities to each of our stakeholders by monitoring when the COVID-19 pandemic will
be contained and appropriately responding to the economic trend and private consumption once the pandemic ebbs.

(8) Objective financial data to determine achievement status of management targets
Under the 3-Year Medium-Term Management Plan starting on April 1, 2021 through March 31, 2024, we were going to use
net sales, operating profit margin, operating profit as objective financial data. However, since we found it almost impossible toreasonably calculate the impact of the worsening COVID-19 pandemic, we formulated a revised 3-Year Medium-Term
Management Plan for a period from April 1, 2022 through March 31, 2025 after recalculating and reviewing numerical targets.
We have set the target of achieving consolidated net sales of 240,000 million yen, consolidated operating profit margin of
1.3%, and consolidated operating profit of 3,000 million yen as our financial data for the fiscal year ending March 31, 2025, thefinal year of the said Management Plan.
We expect our consolidated earnings performance for the fiscal year ending March 31, 2023 to be as follows: net sales of
225,000 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 continually severe management environment caused by the impact of the pandemic—thelifting of the state of quasi-emergency and the progress in vaccination will prompt the demand of the restaurant industry forcommercial food products to pick up, albeit slowly. We find it almost impossible to reasonably forecast when the pandemic will
be contained and how the economy and private consumption will then react. Our estimation is that the pandemic could still
have an enormous impact on our operations. We are also facing the risk of a downturn in the economy due to limitation in
supply, rising raw material prices, and fluctuations in financial capital markets, against the background of concerns over the
impact of a resurgence in the infections in China and the prolonged war in Ukraine. Since earnings outlook is based on ourestimation of the impacts deemed possible when we made this estimation, we may need to announce revisions depending on
the development of the situation.

―17―

2. 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, 2022.
(1) Financial risks
Risk details

Impairment risk

Major measures- Impairment risk in non-current assets on a
non-consolidated basis, showing a sign ofimpairment with operating deficit continuing
for five fiscal years in a row- A subsidiary or an equivalent unable toachieve operational targets- Risk of fluctuations in the market value of
assets, such as real estate or securities- Unexpected bankruptcy of customers- Formulate and implement sufficient measures toincrease future cash flows- Development of livestock epidemics- Concerns over a limit on imports and a rise inpurchasing prices when the government takesa safeguard measure- Global changes in the supply-demand balance- Impact of the fluctuations in crude oil prices- Fluctuations in foreign exchange rates on local
currencies- Diversify raw material procurement channels and takeother measures to procure raw materials stably- Work to develop highly value-added products

Customers’bankruptcy risk

Market fluctuation
risk

Currency
fluctuation risk

- The pandemic of a new virus or an equivalent- Suspension of operations caused by the effects
of a natural disaster, such as an earthquake ora typhoon- Monitor their progress in achieving operational plans,as their parent company- Make use of or sell idle assets- Gather information, manage credit, preserve accountreceivables, etc.

- Reduce risk by importing part of products on a yenbasis and, for foreign-currency trade, using foreignexchange futures contracts- Establish an appropriate management system toprevent infection or its expansion
Risk of infectious- Work further to improve a system for disaster
diseases andprevention and mitigation, and risk management,
natural disasters
aiming to minimize the damage and casualties caused
by natural disasters- A case where there is a fluctuation in the- As an asset owner of a corporate pension, we monitor
market value of plan assets or when there is a
how assets are managed, as needed, by deploying
Risk of retirementchange in the assumptions, such as an
appropriate personnel to a corporate pension fundbenefit obligations
investment return or discount rates, that are- Reduced risk by transferring part of the definedused to calculate retirement benefit obligations
benefit pension plans to a defined-contribution
pension plan in the fiscal year ended March 31, 2017
Since worsening situations of the COVID-19 pandemic led to state of emergency and quasi-emergency declarations, there has
only been a limited pickup in the demand for the products mainly for the restaurant industry and convenience stores in urban areas,part of commercial food products, and gift products. At the same time, we are experiencing more uncertainty and instability in theoutlook for the raw material market because of concerns over reduced imports caused by the suspension of production at overseas
suppliers and price fluctuations.
The Group, a comprehensive food manufacturer, places a top priority on stably supplying consumers with safer and healthierfood products. We are determined to establish a thorough management system to prevent infection so that we will not face thesuspension of our operations. For this purpose, our preparation also includes responses to the demand for necessary funds.
With regard to the future outlook, we find it almost impossible to reasonably forecast when the pandemic will be contained andhow the economy and private consumption will then react. Our estimation is that the pandemic could still have an enormous impact
on our operations.
Our countermeasures against COVID-19 at this moment are as follows:1)
Thoroughly comply with bans or self-restraint requests against the following (We may review the bans or requests when
the pandemic deteriorates or is contained)
Overseas travel, business trips in Japan, meetings, contact with large numbers of the general public, lunch or dinnerparties, events at offices, etc.
2) Measures to prevent infection
Wearing a mask, taking temperature, sanitizing hands and disinfecting facilities and equipment, ventilating rooms
regularly, etc.
3) Measures for work styles
Working from home, flexible hours, a satellite office system, staggered working hours, recommendation to use an
employee’s car to and from the office, recommendation to take paid holidays, etc.
4) Thorough measures to prevent infection at the General Meeting of Shareholders
The Risk Management Committee, chaired by a Director/Statutory Auditor with a special title and made up mainly of Directorsof the Company, addresses infection risks; swiftly gathers and communicates information; and makes decisions and gives
directions without delay.

―18―

(2) Materiality items

Ensuring
safetyRisk 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
and regulations are changed

Response tolaws andregulations

Changes in
consumerlifestyles

Sustainable
raw material
procurement

Reduction offood waste

Adaptation
to changing
climate andmitigation of
its impact

Contribution
to realizing a
recyclingsocietyWaterconservation

Thriving oftalent withdiversebackgrounds- Possible loss of our growth opportunity
due to the delay in catching up withdiverse 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 toreduce greenhouse gas emissions- Jeopardized social credibility due todelay in taking measures against global
warming- Increased production costs resulting
from delay in taking measures toreduce waste- Jeopardized social credibility due todelay in shifting to using environmentfriendly packaging materials- Suspension of production caused bydroughts, floods, and deterioratingwater quality- 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

Major sustainability measures- Increase the number of the FSSC 22000 or ISO 22000 certified
facilities based on the HACCP system- Establish a strict quality management system by the quality
assurance department- Strengthen our efforts to secure safety and improve product quality
as well as to prevent the occurrence of products of poor quality or
defects- Comply with all applicable laws and regulations, including the Food
Sanitation Act, the Act on Japanese Agricultural Standards (the JASAct), 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- Establish a system to thoroughly comply with relevant laws andregulations in close cooperation between each responsible
department and the legal department- Strengthen our capabilities to swiftly respond to the market needs
through our food products- Implement appropriate methods, from the consumer perspective, for
supplying products, providing services, and communicating
information- Step up efforts to involve suppliers in our initiative for sustainableprocurement- 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 fair trading
and business practices- Promote the operations aimed at mutually sustainable businessdevelopment with suppliers- Improve manufacturing methods so that they will contribute to
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 from retailers 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 Task Force on
Climate-related Financial Disclosures (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 anequivalent- Strengthen our efforts to reduce the greenhouse gasses generated bylogistics or transportation by encouraging the transport modal shift,etc.
- Promote an initiative to reduce 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 andpackaging materials- Conserve and maintain wastewater treatment facilities- Promote environmental conservation through an activity to forest
hills or mountains- Strengthen the management of personnel training programs with afocus on diverse values and specialties- Promote the work style reform- Promote diversity and launch an initiative to enhance opportunities
for women―19―Strengthened
corporate
governance

Strengthened
healthmanagement- 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
from the incapability of catching up
with digital transformation- Reduced competitiveness resulting
from a fragile IT management system- Impacts on operations caused byintellectual property risk
- Jeopardized social credibility due todelay in taking measures for a healthmanagement system- Educate all the employees of the Group about the Marudai FoodGroup’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, theCompliance Committee, and the Nomination and Remuneration
Committee.
- Establish the Marudai counseling line (a whistleblowing system)- Introduce a new system to visualize data
- Strengthen the information security by formulating IT management
and operation rules- Manage intellectual property risk

- Strengthen an initiative aimed for health management- Expanded the provision of support for employees with children sothat they can continue to work while raising children, and obtained
the certification under the Regulation for Enforcement of the Act toAdvance Measures to Support Next-Generation Child-Rearing, or
the Kurumin certification program.
- Enhance a system that provides stress checkups and monitors
mental health conditions- Address an issue of a dwindling and aging population (the researchand development of plasmalogen, a material that can support thebrain 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 without compromising its original
tastiness)―20―

- Formulation of the Sustainability Basic Policy and Action Guidelines and establishment of the Sustainability Committee
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.
[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 arenaughty,” 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.
- Other initiatives concerning sustainability
1) Social contribution activities
We offer support so that everyone can stay healthy both physically and mentally through our programs for dietaryeducation and sports.
A. Dietary education
Healthy body and mind begin with proper diet.
Marudai Food will contribute to society
through a wide range of food activities.

Major measures- Engage in social contribution activities with the theme of Better
Diet- Directly communicate to consumers by participating in a dietaryeducation event or holding a lecture, a cooking program, etc.
- Disseminate information through our website- Disseminate information by working with administrative
authorities- Develop products with the logo of Kurumin certification thatindicates the company supports employees raising children

B. Communication through sports
Marudai Food views sports as one of thecommunication tools to consumers and engages
in various initiatives.

Major measures- Hold various sports programs (such as those for volleyball,footraces, and soccer)- Carry out training program of Future Active Athletes―21―2) Environmental activities
Pass our beautiful Earth on to the next generation: We engage in activities to protect the health of the Earth.
A. Environment-friendly corporate operations
Being aware that the conservation of the global
environment is a common challenge faced byhumans, we will contribute to the developmentof society through environment-friendly
operations.

Major measures- Endorse the objectives of Fun to Share, a campaign by the Ministryof the Environment to address climate change- Implement the Cool Biz and Warm Biz campaigns- Use environment-friendly materials for sales at stores and for otherpurposes- Introduce a cogeneration system- Work on the transport modal shift- Engage in an environmental conservation activity in Hokkaido- Engage in an activity making the environment more beautiful

B. Contribution to local communities
Marudai Food engages in environmental
conservation activities to conserve forests andprevent global warming

Major measures- The Marudai Satoyama activity to forest hills or mountains (Weentered 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―22―3. Management analysis of financial position, operating results and cash flows
The Group has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) andother standards from the beginning of the fiscal year ended March 31, 2022. We have also changed the method of recording
distribution expenses. We make comparisons and analyses of the data between the fiscal year ended March 31, 2021 and thefiscal year ended March 31, 2022, using the figures to which these changes in accounting policies have been retrospectively
applied.
(1) Overview of operating results, etc.
1) Financial position and operating results
During the fiscal year ended March 31, 2022, the Japanese economy continued to pick up amid severe conditions due tothe COVID-19 pandemic, despite weakness seen in some areas, partly driven by the progress in vaccination and thegovernment’s various policy packages. However, the overall outlook for the economy remains unpredictable mainly because
concerns persist over the risk of a downturn in the economy due to supply limitations and the trend in raw material prices,against the background of fears about a possible resurgence of infections from the highly contagious Omicron variant andabout uncertainty from the war in Ukraine.
The industry in which the Marudai Food Group operates continued to face severe conditions, as rising costs for raw
materials, energy, and logistics weighed heavier on corporate earnings, and consumers tended to save more and more money
due to the uncertain outlook of the economy against the backdrop of repeated declarations of state of emergency and quasi
emergency. Regarding the meat market, domestic beef prices rallied in the first half of this year after having slumped in theprevious year due to a drop in demand. However, we only saw a weak recovery of the demand of the restaurant industry, as
restaurants and bars were asked to shorten their operating hours. As a result, the prices are currently lower than the previous
year’s level. Domestic pork prices steadied after having risen due to increased demand for home consumption. However, theprices are currently higher than the previous year’s level due mainly to the impact of soaring prices of imported pork.
Imported meat prices, particularly those of the meat from the United States, have been significantly above the previous
year’s level throughout the year due mainly to a jump in demand overseas and soaring livestock feed prices.
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.
As a result, our consolidated financial position and operating results for the fiscal year ended March 31, 2022 were as
follows:A.

Financial position
Consolidated total assets as of March 31, 2022 were 128,903 million yen, a decrease of 2,438 million yen from the endof the previous fiscal year. Consolidated liabilities were 53,414 million yen, a decrease of 177 million yen from the end of
the previous fiscal year. Consolidated net assets were 75,489 million yen, a decrease of 2,261 million yen from the end of
the previous fiscal year.

B.

Operating results
Consolidated net sales during the fiscal year ended March 31, 2022 were 218,610 million yen, a decrease of 2.0% year
on year; consolidated operating loss was 865 million yen, compared to consolidated operating loss of 333 million yen forthe previous fiscal year; consolidated ordinary loss was 380 million yen, compared to consolidated ordinary profit of 180
million yen for the previous fiscal year; and consolidated loss attributable to owners of parent was 376 million yen,
compared to consolidated profit attributable to owners of parent of 412 million yen for the previous fiscal year.

―23―Operating results for each segment are as follows:(Millions of yen)
Fiscal year
ended March
31, 2021

Fiscal year
ended March
31, 2022

151,762

Year-on-yearchange(amount)

Year-on-yearchange (%)

148,011(3,750)(2.5)%

71,161

66,484(4,677)(6.6)%

80,60081,526926

1.1%

71,08770,455(632)(0.9)%

150

143

(7)

(4.9)%

223,000

218,610(4,390)(2.0)%(938)(1,076)(138)–(0.6)%(0.7)%(0.1)%

–

547

173

(374)

(68.4)%

0.8%

0.2%

(0.6)%

–

57

38

(18)

(32.8)%

Segment income (loss)

(333)

(865)

(532)

–

Ratio to net sales(0.1)%(0.4)%(0.3)%–

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 tried to increase sales of its mainstay product “Kunseiya-Ripened Pork
Sausage” by launching various campaigns. As an example, aiming to enlighten consumers about the juiciness of“Kunseiya-Ripened Pork Sausage”, we officially registered the 14th day of every month as the “Day of Juiciness ofKunseiya-Ripened Pork Sausage”. This is based on a kind of word play, as 14 is pronounced “ju-si” in Japanese,
which sounds similar to an English word of “juicy”. We also rolled out a new lineup of the Dashi No Chikara De
Oishisa Sono Mama series, among others, which successfully cut the amount of salt used in the product by 25%
compared with other existing products thanks to the umami of broth added to loin ham and bacon. However, net salesof the Ham & Sausage Products department decreased by 6.6% year on year due to intensified sales competition withcompetitors and sluggish sales of midyear and year-end gifts.
The Precooked & Processed Foods department enjoyed stable net sales of “Chicken Nugget” in a bulk bag against a
backdrop of lifestyle changes as people began to spend more time at home amid the COVID-19 pandemic, and also of
the “Salad Chicken” series, which satisfies the needs of health-conscious consumers. The department also strived toincrease the Company’s market share through sales promotion, for example, by making full use of social media, with aparticular focus on the Sundubu series, which marked the 15th anniversary of launch. Although net sales of beverages
containing black tapioca plunged, we saw a sign of recovery of net sales of the cooked rice products for convenience
stores, and also enjoyed the contributions made by net sales of “Rakuraku Whip,” a whipped cream product ready touse directly from a refrigerator, manufactured by Toraku Foods Co., Ltd., which joined the Group as of July 1, 2020.
As a result, sales of the Precooked & Processed Foods department increased by 1.1% year on year.
As a result, net sales in the Processed Food Products operations segment amounted to 148,011 million yen, adecrease of 2.5% year on year. Despite our efforts to reduce costs by improving operational efficiency, the said
segment posted segment loss of 1,076 million yen (compared to segment loss of 938 million yen for the previous
fiscal year), owing mainly to lower net sales, lower selling prices due to intensified sales competition, and higher costs
for raw materials and energy.
(Meat Products operations)
As for beef, domestic beef posted a drop in net sales, as sales to mass retailers were sluggish despite a pickup in
those to the restaurant industry. Meanwhile, imported beef posted an increase in net sales thanks to a rise in unit
prices. As a result, overall beef sales were higher than the previous year’s level. Regarding pork, net sales of both
domestic and imported pork were lower than the previous year’s level due to our review of the lineup and sluggish
sales of pre-pack products.
As a result, net sales in the Meat Products operations segment decreased by 0.9% year on year to 70,455 million
yen. Segment income decreased by 68.4% year on year to 173 million yen, because of sluggish net sales, and also
because we were not able to pass on a rapid increase in the purchasing costs for imported meat to sales prices, among
other reasons.

―24―(Other)
Net sales in Other segment decreased by 4.9% year on year to 143 million yen, and segment income decreased by
32.8% year on year to 38 million yen.
(Impact of the COVID-19 pandemic)
With the state of emergency and quasi-emergency declarations in place amid worsening situations caused by the
COVID-19 pandemic, the fiscal year ended March 31, 2022 saw people in Japan forced to review their work styles, as
they were encouraged to telework while being asked to refrain from going out, taking part in events, and crossing
prefectural borders. We only saw a weak recovery of the demand of the restaurant industry, as restaurants and bars
were asked to shorten their operating hours. There has also only been a limited pickup in net sales of the products forconvenience stores in urban areas and part of commercial food products, as well as in the demand for gift products.
A slowdown in the demand from the restaurant industry affected the meat market, and the suspension of production
at overseas suppliers destabilized the pork market, from which we mainly procure raw materials for ham and sausages.
These factors impacted our costs.
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, 2021

Fiscal year ended
March 31, 2022

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

7,673

7,030

(643)

(5,388)(5,688)(300)(2,053)(1,826)226

Net increase in cash and cash equivalents

231

(485)

(717)

Cash and cash equivalents at end of period

8,476

7,990

(485)

Net cash provided by (used in) operating activities increased by 7,030 million yen due mainly to the recording ofdepreciation, despite a negative factor of an increase in working capital.
Net cash provided by (used in) investing activities decreased by 5,688 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 decreased by 1,826 million yen due mainly to payment of dividends,
repayments of interest-bearing liabilities, and purchase of treasury shares.
As a result, consolidated cash and cash equivalents at end of period as of March 31, 2022 decreased by 485 million yen
from the end of the previous fiscal year to 7,990 million yen.
3)
A.

Production, orders received, and sales
Production results
Production results by segment for the fiscal year ended March 31, 2022 on a consolidated basis are as follows:
Name of business segment

Production (Ton)Processed Food Products operations

198,231(4.0)

Meat Products operations

14,118

5.4

Other

–
Total

B.

Year-on-year change (%)

212,350

Orders received
The Group produces based on our projection made from the consumer trend forecast.

―25―

–
(3.4)

C.

Sales results
Sales results by segment for the fiscal year ended March 31, 2022 on a consolidated basis are as follows:
Name of business segment

Sales (Millions of yen)

Year-on-year change (%)

Processed Food Products operations

148,011(2.5)

Meat Products operations

70,455

(0.9)

143

(4.9)

218,610

(2.0)

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, 2022.
1)

Details of the recognition, analysis, and examination of the status of operating results, etc. for the fiscal year ended March
31, 2022
A. Operating results(Net sales)
Consolidated net sales were 218,610 million yen, a decrease of 2.0% year on year, due particularly to sluggish salesof the Ham & Sausage Products department, as consumers tended to save more and more money due to the uncertain
outlook of the economy against the backdrop of impact of the COVID-19 pandemic and the rising geopolitical risk.
By segment, net sales of the Processed Food Products operations were 148,011 million yen, a decrease of 2.5% year
on year, net sales of the Meat Products operations were 70,455 million yen, a decrease of 0.9% year on year, and net
sales of Other were 143 million yen, a decrease of 4.9% year on year.
(Cost of sales, gross profit)
Consolidated cost of sales fell by 1.0% year on year to 186,651 million yen due mainly to a decline in the purchaseof merchandise and raw materials resulting from decreased net sales. The ratio of cost of sales to net sales rose by 0.9
percentage points year on year to 85.4%, affected mainly by lower selling prices due to intensified sales competitionand higher costs for raw materials and energy.
Consolidated gross profit declined by 7.4% year on year to 31,958 million yen.
(Selling, general and administrative expenses; operating profit)
Consolidated selling, general and administrative expenses dropped by 5.8% year on year to 32,823 million yen
owing mainly to reduced logistics costs resulting from lower net sales.
Operating loss was 865 million yen, compared to operating loss of 333 million yen for the previous fiscal year,
impacted mainly by lower net sales, lower selling prices due to intensified sales competition, higher raw material
prices, and weak demand for eating out.
As for segment income (loss), segment loss for the Processed Food Products operations was 1,076 million yen,worse than segment loss of 938 million yen for the previous fiscal year. Segment income for the Meat Products
operations was 173 million yen, down 68.4% year on year, and segment income for Other was 38 million yen, down
32.8% 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 380 million yen due mainly to an increase in operating loss, compared toordinary profit of 180 million yen for the previous fiscal year.
We posted consolidated loss attributable to owners of parent of 376 million yen, compared to consolidated profit
attributable to owners of parent of 412 million yen for the previous fiscal year, due mainly to an increase in operating
loss, despite the recording of gain on sale of investment securities in extraordinary income, etc.

―26―

(Millions of yen)
Fiscal year
ended March
31, 2021

Fiscal year
ended March
31, 2022

Net sales

223,000

Cost of sales

Year-on-yearchange(amount)

Year-on-yearchange (%)

218,610(4,390)(2.0)%

188,487

186,651(1,836)(1.0)%

84.5%

85.4%

0.9%

–

34,512

31,958(2,554)(7.4)%

15.5%

14.6%

(0.9)%–

34,84532,823(2,022)(5.8)%

15.6%

15.0%

(0.6)%

–

(333)

(865)

(532)

–

Ratio to net sales(0.1)%(0.4)%(0.3)%–

Ordinary profit (loss)

180

(380)

(561)

–

Ratio to net sales

0.1%(0.2)%(0.3)%

–

412

(376)

(788)

–

0.2%

(0.2)%(0.4)%–

Ratio to net sales
Gross profit
Ratio to net sales
Selling, general and administrative
expenses
Ratio to net sales
Operating loss

Profit (loss) attributable to owners ofparentRatio to net sales(Progress in the Medium-Term Management Plan)
The Group had drew up its 3-Year Medium-Term Management Plan starting on April 1, 2021 through March 31, 2024.
However, the environment surrounding our business is drastically changing and growing highly uncertain mainly
because of the prolonged impact of the COVID-19 pandemic, disrupted logistics, and soaring costs for raw materials andenergy such as crude oil and grain against a backdrop of the war in Ukraine, among other factors. For this reason, we
have formulated a revised 3-Year Medium-Term Management Plan for a period from April 1, 2022 through March 31,
2025 after recalculating and reviewing numerical targets. To flexibly respond to changes in the management environment
in the future, we have decided to announce a 3-year medium-term rolling plan with numerical targets, in principle, byreviewing it every year.
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, 2021

As of March 31, 2022

Changes

Total assets

131,342

128,903(2,438)

Liabilities

53,59253,414(177)

Net assets

77,75075,489(2,261)Equity ratio

58.7%

58.1%

(0.6)%

3,036.59 yen

2,969.87 yen(66.72) yen

Net assets per share

Consolidated total assets as of March 31, 2022 were 128,903 million yen, a decrease of 2,438 million yen from the endof the previous fiscal year, due mainly to decreases in investment securities of 1,595 million yen; in raw materials andsupplies of 616 million yen; and in cash and deposits of 485 million yen, despite an increase in merchandise and finishedgoods of 1,534 million yen.
Consolidated liabilities declined by 177 million yen from the end of the previous fiscal year to 53,414 million yen,helped mainly by decreases in accounts payable - other of 625 million yen and in deferred tax liabilities of 477 million yen,despite increases in notes and accounts payable - trade of 677 million yen and in interest-bearing liabilities of 273 million
yen.
Consolidated net assets declined by 2,261 million yen from the end of the previous fiscal year to 75,489 million yen, due
mainly to a decrease in valuation difference on available-for-sale securities of 953 million yen, payment of dividends ofsurplus of 762 million yen, and the recording of loss attributable to owners of parent of 376 million yen.

―27―

As a result, equity ratio as of March 31, 2022 stood at 58.1%, a decrease of 0.6% from the end of the previous fiscal year.
However, since it still remained at the same level as in the previous fiscal year, we have determined that the Group’s
financial standing has been sound at a certain level.
By segment, assets of the Processed Food Products operations were 85,353 million yen, compared to 87,405 million yen
for the previous fiscal year; assets of the Meat Products operations were 19,817 million yen, compared to 17,821 million
yen for the previous fiscal year; and assets of Other and corporate assets not allocated to the reportable segments were
23,733 million yen, compared to 26,115 million yen for the previous fiscal year. The primary factors for a fall inconsolidated assets of the Processed Food Products operations were a decrease in raw materials and supplies and a drop in
accounts receivable - trade resulting from lower net sales.
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, 2018

Fiscal year
ended March
31, 2019

Fiscal year
ended March
31, 2020

Fiscal year
ended March
31, 2021

Fiscal year
ended March
31, 2022

58.3%

57.0%

56.5%

58.7%

58.1%

49.9%

36.1%

37.7%

33.2%

28.9%

4.7 years

2.7 years

2.3 years

2.7 years

2.9 years

17.3 times

31.3 times

39.7 times

32.9 times

31.9 times

Capital expenditure
10,850
9,589
9,167
6,133
7,374
(Millions of yen)
Depreciation (Millions
5,688
6,433
6,801
7,798
7,945
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.
* The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28, February 16, 2018) from the beginning of the fiscal year ended March 31, 2019. Accordingly,
equity ratio and equity ratio on a market value basis for the fiscal year ended March 31, 2018 are stated as figures
to which the above accounting standard has been retrospectively applied.
* 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.

―28―

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, 2022 for the second
consecutive fiscal year, it had been higher than depreciation for a period from the fiscal year ended March 31, 2018 throughthe fiscal year ended March 31, 2020. In this situation, equity ratio, the ratio of cash flows to interest-bearing liabilities, andthe interest coverage ratio, among other indicators, have remained at stable levels. For this reason, we have determined that
the Group has maintained a financial standing that enables us to remain sound at a certain level and to raise funds for
implementing our growth strategy.
As consolidated cash flows for the fiscal year ended March 31, 2022 are stated in “(1) Overview of operating results,
etc., 2) Cash flows,” net cash provided by (used in) operating activities rose by 7,030 million yen, and net cash provided by(used in) investing activities fell by 5,688 million yen, which led us to secure free cash flows of 1,341 million yen. Whileinterest-bearing liabilities dropped by 691 million yen, we paid dividends of 762 million yen, purchased treasury shares of
368 million yen. As a result, cash and cash equivalents decreased by 485 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 30 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 weused. 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, 2022. Capital expenditure on an asset basis for the fiscal year ending March 31, 2023 isestimated at 9,200 million yen in total, a majority of which we are planning to raise through our own capital and leases.
The Group has entered into overdraft contracts with our banks for effective fundraising, and the unexercised portion offacilities based on these contracts is 24,770 million yen as of March 31, 2022. Adding this amount to cash and deposits of
7,990 million yen as of March 31, 2022 will bring the total to 32,760 million yen, which surpasses an average net sales permonth for the fiscal year ended March 31, 2022. For this reason, we have determined that we are at a certain level in termsof fund capabilities for any emergent demand. Of the overdraft contracts, those with 10,000 million yen were added during
the previous fiscal year to prepare ourselves for any possible adversity caused by the COVID-19 pandemic. As of March
31, 2022, 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 forfunds, including those for facilities, investment and financing, repayments of borrowings, and working capital.

―29―

2)

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.
The earnings targets used for accounting estimates have assumed that, concerning the effects of the COVID-19
pandemic, lifting of state of quasi-emergency and progress in vaccination will turn around the demand for commercial foodproducts for the restaurant industry for recovery, albeit slowly. However, since the effects of the pandemic still largely
remain uncertain, the estimates might differ from actual results in the future.
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).”

4. Material contracts, etc.
Not applicable.

―30―

5. 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. By conducting sweeping marketing research including consumer surveys, we are eager
to clarify the needs that are truly meaningful to consumers. Based on our product development in line with such consumer needs,
we endeavor to be a manufacturer that is needed by consumers more than ever. What we cherish the most is to produce a productthat deeply impresses our customers with its deliciousness.
The research and development expenses paid by the Group during the fiscal year ended March 31, 2022 were 673 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 launched “Tappuri Tsukaeru Loin Ham - Loin Ham in a Larger Volume” and “Tappuri
Tsukaeru Bacon - Bacon in a Larger Volume,” both of which are in a package using biomass ink, as part of our initiative to reduce
environmental footprint. The department also added new products to the Dashi No Chikara De Oishisa Sono Mama series, such as
loin ham, bacon, uncured ham, and cut ham, against a backdrop of the growing health consciousness among consumers. By adding
the umami from a broth of bonito and vegetables or a broth of kombu kelp, we have successfully cut the amount of the salt used in
the product by 25% compared with other existing products but maintains its original tastiness.
The Precooked & Processed Foods department changed the form of a package for “Chicken Nugget” in a bulk bag to a zip
package, which is more convenient for storage, given the growing demand for eat-in and other factors. Also, as an increasing
number of people became more eager for Korean dishes against a backdrop of the stay-at-home request amid the COVID-19
pandemic, we launched new products, “Budae Jjigae,” “Jjimdak,” and “Jjukkumi Bokkeum” under the Kanbi Shokudo (literally
meaning Korean gourmet food) series as easy-to-prepare meals that boast authentic taste you had only been able to enjoy only at
diners in Korea before. The department changed the forms of some packages for the Sundubu series, too, to a stand-up pouch,which is easier to stack on store shelves, and also to a package that can cut in a straight line. In addition, amid rising demand forconvenience, we also changed the form of a package for the following series to a microwavable pouch: the Bistro Club Beef Curry
series, which is popular for its flavors brought out by 51 kinds of spices and herbs; and the Chef’s Craft retort-pouch instant curry
series, which has pursued an original taste.
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. We made a presentation of chicken-derived plasmalogen at an academic conference twice in the fiscal year
ended March 31, 2022, as the result of a joint research with a university. The paper was published in an English magazine of The
Pharmaceutical Society of Japan. Since we filed the second functional claim, which is the “maintenance of the speed of thecognitive function”, we have been receiving more and more inquiries from consumers interested in retaining the cognitive function.
We will continue striving to gain more recognition of plasmalogen in the fiscal year ending March 31, 2023 by making the new
findings that have been obtained through the joint research widely known at an exhibition.
(Meat Products operations and Other)
No applicable matters to report.

―31―

III.

Information about Facilities

1. Overview of capital expenditures
The Group spent capital expenditure of 7,374 million yen in total for the fiscal year ended March 31, 2022, 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, 2022
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)

Buildings
andstructures

Machinery,equipment
andvehiclesLand(Area in m2)

Manufactur
ing facility

420

242

116
(43,460)

0

5

786

2

Processed Food
Products operations

Manufactur
ing facility

277

403

254
(42,335)

5

8

949

5

Processed Food
Products operations

Manufactur
ing facility

666

922

227
(51,483)

6

18

1,842

6

Processed Food
Products operations

Manufactur
ing facility

1,406

1,992

181
(66,193)

2

34

3,617

70

Processed Food
Products operations

Manufactur
ing facility

257

597

152
(14,932)

1

4

1,013

12

Processed Food
Products operations

Manufactur
ing facility

250

590

2,476
(6,412)

2

5

3,326

5

Processed Food
Products operations

Manufactur
ing facility

248

227

1,004
(13,937)

1

4

1,485

13

Processed Food
Products operations

Manufactur
ing facility

171

213

359
(34,862)

0

8

754

14

Processed Food
Products operations

Manufactur
ing facility

147

246

Processed Food
Products operations

Manufactur
ing facility

935

2,748

Processed Food
Products operations

Manufactur
ing facility

174

294

Processed Food
Products operations

Manufactur
ing facility

345

Processed Food
Products operations

Manufactur
ing facility

Processed Food
Products operations
Meat Products
operations

Name of businesssegment

Details offacilities

Processed Food
Products operations

Leasedassets

Other

Total

Number of
employees

146(12,010)322(53,889)454(42,891)

0

3

544

9

38

20

4,065

52

0

8

933

10

575

335
(48,753)

4

13

1,273

7

1,751

2,203

501
(39,228)

5

31

4,493

18

Sales
facility

158

10

393
(13,058)

2

4

569

28

Sales
facility

257

7

685
(7,549)

9

9

969

125

Sales
facility

168

6

656
(10,032)

2

4

838

32

Sales
facility

201

4

835
(12,182)

6

15

1,062

91

Processed Food
Products operations
Meat Products
operations

Sales
facility

159

3

392
(7,427)

3

4

563

37

Processed Food
Products operations
Meat Products
operations

Sales
facility

171

10

241
(8,389)

3

6

433

25

Processed Food
Products operations
Meat Products
operations
Processed Food
Products operations
Meat Products
operations
Processed Food
Products operations
Meat Products
operations―32―

(2) Subsidiaries in Japan
As of March 31, 2022
Company
nameHead Office andplant(Toda-shi, Saitama
Prefecture, and otherlocations)
Head Office andplant(Matsumoto-shi,
Nagano Prefecture,and other locations)
Head Office andplant(Higashinada-ku,
Kobe-shi, Hyogo
Prefecture, and otherlocations)

Azumino Food
Co., Ltd.

Toraku Foods
Co., Ltd.

(Notes)Name ofbusinesssegment

Details offacilities

Processed Food
Products
operations

Business place(Location)

Toda Foods
Co., Ltd.

Book value (Millions of yen)
Buildings
andstructures

Machinery,equipment
and vehicles

Manufactur
ing facility

3,084

1,217

Processed Food
Products
operations

Manufactur
ing facility

1,726

Processed Food
Products
operations

Manufactur
ing facility

1,149

Land
(Area inm2)

Number of
employees

Leasedassets

Other

Total

1,152
(21,270)

863

68

6,386

152

1,448

905
(55,711)

1,820

110

6,011

117

1,124

772
(9,094)

369

95

3,511

184

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, 2022 as follows. For your information: Capital expenditure
on an asset basis for the fiscal year ending March 31, 2023 is estimated at 9,200 million yen in total.
(Planned amounts ofinvestment)
Company name

Reportingcompany

Reportingcompany

Reportingcompany

Reportingcompany

Toraku Foods
Co., Ltd.

Toraku Foods
Co., Ltd.

Business place(Location)

Name ofbusinesssegment

Processed
Food
Products
operations
Processed
Kanto Plant
Food(Shimotsuke-shi, Tochigi
Products
Prefecture)operations
Processed
Karatsu Plant
Food(Karatsu-shi, Saga
Products
Prefecture)operations
Processed
Takatsuki Plant
Food(Takatsuki-shi, Osaka)
Products
operations
Processed
Head Office and plant
Food(Higashinada-ku, KobeProducts
shi, Hyogo Prefecture)operations
Processed
Head Office and plant
Food(Higashinada-ku, KobeProducts
shi, Hyogo Prefecture)operations
Takatsuki Plant(Takatsuki-shi, Osaka)

Details of facilities

Fundraising
methodStarting date

Estimatedcompletion
date

2,877

By our own
capitalJuly 2018

June 2023

3,489

1,101

By our own
capitalDecember 2020

March 2024

1,133

377

By our own
capitalDecember 2020 September 2022

1,618

–

By our own
capitalMarch 2022

February 2023

750–

By our own
capital andleases

September 2021

July 2022

460–

By our own
capital andleasesMay 2022

August 2023

Total
amount(Millionsof yen)Amountalreadypaid(Millionsof yen)4,090

Improvement in theefficiency of
manufacturing
facilities, etc.
Improvement in theefficiency of
manufacturing
facilities, etc.
Improvement in theefficiency of
manufacturing
facilities, etc.
Addition of facilities
due to transfer of
production
Manufacturing
facilities, etc. forwhipped cream forretailManufacturing
facilities, etc. forwhipped cream forcommercial use(2) Planned retirement of material facilities
Not applicable, except for the removal of operating facilities for regular renovation.

―33―

IV.

Information about Reporting Company

1. Company’s shares, etc.
(1) Total number of shares, etc.
1) Authorized shares
As of March 31, 2022

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, 2022)

Class

As of the filing date
(Shares)(June 27, 2022)

Stock exchange on which theCompany is listed

Common stock

26,505,581

Tokyo Stock ExchangeFirst Section (as of the current
fiscal year)
26,505,581
Prime Market (as of the filing
date)Frankfurt Stock Exchange

Total

26,505,581

26,505,581

Details

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

Date

October 1, 2018 (Note)

Changes in the Balance of thetotal number of total number ofissued sharesissued shares(Thousands of (Thousands ofshares)shares)(106,022)

Changes inshare capital(Millions ofyen)

Balance ofshare capital(Millions of
yen)

–

6,716

26,505(Note) This is attributable to the Company’s one-for-five share consolidation of its common stock.

―34―

Changes inlegal capitalsurplus(Millions ofyen)

Balance oflegal capitalsurplus(Millions ofyen)–

21,685(5) Shareholding by shareholder category
As of March 31, 2022
Status of shares (the minimum unit consists of 100 shares)
Japanesefinancial
Government
institutions
and localandmunicipalities
insurancecompanies

Category

Foreign corporations,etc.

Financial
instruments
business
operators

Other Japanese
corporations

OthersIndividuals

Individuals,
others

Total

Status ofshares below
unit (Shares)

Number ofshareholders

–

32

27

178

72

18

25,06625,393–

Number ofshares held
(Units)–81,1202,002

51,42019,74941

110,360

264,692

36,381

Percentage ofshares held
(%)

–

30.65

0.76

19.43

7.46

0.02

41.69

100.00–(Note) 1,308,897 shares of treasury shares consist of 13,088 units listed under “Individuals, others,” and 97 shares under “Status ofshares below unit” The actual number of treasury shares is 1,308,897 as of March 31, 2022.
(6) Major shareholders

Name

Address

As of March 31, 2022
Percentage ofshares held to
Number of
the total number
shares heldof issued shares(Thousands of(excluding
shares)shares oftreasury shares)(%)

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

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

2,537

10.06

Marudai Kyoei Kai

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

2,017

8.00

Kanematsu Corporation

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

1,192

4.73

Komori Memorial Foundation

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

1,050

4.16

Sumitomo Mitsui Banking Corporation

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

887

3.52

Sumitomo Mitsui Trust Bank, Limited

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

864

3.43

Sumitomo Life Insurance Company

7-18-24 Tsukiji, Chuo-ku, Tokyo

860

3.41

The Norinchukin Bank

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

642

2.55

Custody Bank of Japan, Ltd. (Trust
Account)

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

583

2.31

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(6-27-30 Shinjuku, Shinjuku-ku, Tokyo)

511

2.03

Total

–

11,14844.24(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 1,308,897 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)
2,537 thousand shares
Custody Bank of Japan, Ltd. (Trust Account)
583 thousand shares―35―

6. The change report on large shareholdings that was made available to the public on October 22, 2021 states that SMBC
Nikko Securities Inc. and its joint holders, Sumitomo Mitsui Banking Corporation owned the following shares as of
October 15, 2021. However, since the Company has not been able to confirm the actual number of shares alleged to beheld by SMBC Nikko Securities Inc. as of March 31, 2022, 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, Tokyo29
0.11
Sumitomo Mitsui Banking Corporation 1-1-2 Marunouchi, Chiyoda-ku, Tokyo
887
3.35
Total
–
917
3.46
7. The change report on large shareholdings that was made available to the public on December 6, 2021 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 November 30, 2021. 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, 2022, 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, Tokyo615
2.32
Management Co., Ltd.
Nikko Asset Management Co., Ltd.
9-7-1 Akasaka, Minato-ku, Tokyo
282
1.07
Total
–
1,763
6.65
(7) Voting rights
1) Issued shares
As of March 31, 2022
Category
Shares without voting rights
Shares with limited voting rights(treasury shares, etc.)
Shares with limited voting rights(others)

Number of voting rights
Number of shares (Shares)(Units)––Shares with full voting rights(others)
Shares below one unit

–

–

–

–

–

–

–

–

–

(Treasury shares)
Common1,308,800
stock
Common25,160,400
stock
Common36,381stock
26,505,581

Shares with full voting rights(treasury shares, etc.)

Details

251,604–––

Total number of issued shares––
Total voting rights held by all–
251,604–
shareholders(Note) The number of shares of common stock in “Shares below one unit” includes 97 treasury shares held by the Company.
2)

Treasury shares, etc.

Shareholder

Address of shareholder

As of March 31, 2022
Percentage of
Number of
Number ofshares held toshares held
Total number
shares held
the total
under theof shares held
under own
number ofnames of
(Shares)name (Shares)
issued shares
others (Shares)(%)(Treasury shares)
Marudai Food Co., Ltd.

21-3 Midori-cho, Takatsukishi, Osaka

1,308,800–

1,308,800

4.93

Total

–

1,308,800–

1,308,800

4.93

―36―

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 30, 2021 (Acquired from August 31, 2021 to August
31, 2021)

Total amount (Millions of yen)

226,300

405

Treasury shares acquired before the current fiscal year––

Treasury shares acquired during the current fiscal year

205,700

368

20,600

36

9.10

9.10

–

–

9.10

9.10

Total number and amount of remaining shares to be acquiredby resolution
Percentage of unexercised portion as of the end of the current
fiscal year (%)
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

197

0Treasury shares acquired during the period reported

100(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, 2022 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
1,308,897–
1,308,907–
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, 2022 to the filing date of this Annual Securities Report.

―37―

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 30 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 June755
24, 2022―38―

30

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 meetings of the Board of Directors were held 14 times during the fiscal year ended March 31, 2022, with theattendance rate of Directors being 99% and that of Statutory Auditors being 100%.

―39―

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 as of the filing date to ensure the transparency andobjectivity of the process 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.
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 a quarter, 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 three 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
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.
The meetings of the Board of Statutory Auditors were held 16 times during the fiscal year ended March 31, 2022, withthe attendance rate of Statutory Auditors being 100%.

―40―

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 nine 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 2015. 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, and social ethics. The Compliance Committee, chaired by an Independent Outside Director, shalloversee the Group’s overall compliance situation and promote observance of laws and regulations, etc.
We shall also formulate the Marudai Food Group’s Whistleblowing Rules as part of our internal whistleblowing
system and make Directors and employees fully understand it to prevent any violation of laws and regulations or the
Articles of Incorporation.
(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 theDocument 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 respond swiftlyin the event of a material accident or natural disaster.

(D)

A system to ensure Directors’ efficient execution of duties
We shall make a swift and appropriate decision on management matters at a regular meeting of the Board of
Directors after deliberating such matters in advance at the Management Meeting, in accordance with the Rules for the
Board of Directors and the Guidelines for Operation of the Board of Directors. We shall also formulate the Rules for
Division of Duties and Authority for Organization to ensure that the Directors and employees of the Company and its
subsidiaries efficiently execute duties. By so doing, we shall set standards for duties and authority, our chain ofcommand, 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, shall audit theGroup and regularly report to the Board of Directors and the Board of Statutory Auditors about how our compliancesystem is established and operated.

―41―

(F)

Matters related to the report to the Company about execution of duties by Directors, etc. of its subsidiaries
The Company shall regularly hold 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. We shall also have a system in place for them to report without delay to
the Company about material 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
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.

(H)

Matters related to independence from Directors of the said employee stipulated in a preceding item andeffectiveness of directions
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.

(I)

A system for Directors and employees of the Company and its subsidiaries to report to Statutory Auditors andsystems related to other reports to Statutory Auditors
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, any case in whichsuch Directors or employees have received a report about the abovementioned event or case, or any report to thewhistleblowing contact points. The Internal Audit Office and the Quality Assurance Dept. shall report to Statutory
Auditors about audit results regularly and if necessary.

(J)

A system to prevent anyone who has reported to Statutory Auditors from being treated unfavorably on grounds ofmaking such report
We shall formulate an internal rule that bans treating unfavorably any Director or employee of the Company or its
subsidiaries who has reported to Statutory Auditors, or anyone who has reported to Statutory Auditors upon receivinga report from such Director or employee, on grounds of making such report. We also shall make the Directors andemployees of the Company and its subsidiaries fully understand the rule.

(K)

Matters related to the policy for prepayment or reimbursement of the expenses incurred when Statutory Auditors
execute duties and the policy for dealing with other expenses and obligations incurred when they execute duties
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.

(L)

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.

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.

―42―

(B)

Status of establishment of measures to eliminate antisocial forces
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.
a.

4)Overview of limited liability agreement
Pursuant to Article 427, Paragraph 1 of the Companies Act, the Company has entered into agreement with Directors,
excluding executive Directors and employees, and with Outside 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 tothe agreement shall be the amount stipulated by laws and regulations. This limited liability is applicable only if such
Directors, excluding executive Directors and employees, and such Outside Statutory Auditors conducted the duty that hascaused 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 4303, 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.

―43―

(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

As of June 27, 2022

Date of birth

Career summary

March 1983
April 2005

President andRepresentative
Director

Yuji Sato

December 25,
1964

March 2009
April 2012
April 2013
April 2018
April 2021
June 2021

Director andChairmanTokuo Kudara

February 2,
1939

February 1960
March 1970
April 1973
October 1981
April 2001
June 2019
June 2021
April 2010

Director
General Manager of
Accounting Dept.

Nobuyoshi
Katoh

January 14,
1960

May 2012
May 2012
June 2013

Director
In charge of Quality
Assurance Dept.,
General Manager ofGeneral Affairs andHuman Resources
Dept. and General
Manager ofEnvironmental
Protection Office

April 1985
April 2019

Toshio Tanaka

January 9,
1963June 2021

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

Term

Number ofshares of theCompany
held(Shares)

Joined the Company
General Manager of Regional Sales Dept., Kanto
Sales Dept.
General Manager of Sales Dept., Sales Div.
General Manager of Chugoku and Shikoku Sales
Dept.
Executive Officer, General Manager of Sales Dept.
President and Representative Director, Azumino
Food Co., Ltd.
Managing Executive Officer of the Company
President and Representative Director (to present)(Note3)3,000

Joined the Company
General Manager, Purchasing Dept.
Director
Managing Director
President and Representative Director
Chairman and Representative Director
Director and Chairman (to present)(Note 3)42,400General Manager of Tennoji-ekimae Corporate
Sales Dept., Sumitomo Mitsui Banking
Corporation
Joined the Company
Executive Officer, General Manager of
Accounting Dept.
Director, General Manager of Accounting Dept.
(to present)(Note 3)

5,900

(Note 3)1,200

(Note 3)－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 Office(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)―44―

Title and position

Name

Date of birth

April 1981

April 2007
April 2014

October 2014
Director

Keiko Kaneko

November 27, 1958

June 2016
April 2018

June 2019
April 2022

April 1983
June 2008
June 2018
Full-time Statutory Auditor

Toru Miyachi

September 1, 1959

April 2020

June 2020

Full-time Statutory Auditor

TakashiMatsuzawa

July 2013

April 1972
June 2012
June 2013
June 2015

Total(Notes)(Note 3)－(Note 4)300

(Note 5)－(Note 6)－

Joined the Company
Statutory Auditor, MarudaiService Co., Ltd.
Retired from the position of
Statutory Auditor of MarudaiService Co., Ltd.
General Manager of General
Affairs and Accounting Dept.,
Pioneer Foods Co., Ltd.
Director

Joined The Norinchukin Bank
Deputy General Manager ofInternal Audit Division
Deputy General Manager ofAgriculture, Fishery and Forestry
Financing Division
General Manager of Office ofAudit & Supervisory Board
Members
Executive Officer, General
Manager of Administration Div.,NOCHU INFORMATIONSYSTEM CO., LTD.
Outside Statutory Auditor of theCompany (to present)

January 2, 1962

July 9, 1943

Joined Matsushita ElectricIndustrial Co., Ltd. (currently
Panasonic Corporation)
General Manager, Information
Security Division
Assistant to Director, SeniorCounsel 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 ofBusiness Administration, Osaka
University of Economics
Outside Director of the Company(to present)
Senior researcher, Center forInternational Economic
Collaboration (to present)

April 1984
February 2007

June 2020

Statutory Auditor

Term

Full-time Statutory Auditor of theCompany (to present)

June 2015

MotoakiNishimura

Career summary

June 2021

August 2008

Number ofshares of theCompany
held(Shares)

Registered as attorney-at-law(Osaka Bar Association)
Outside Auditor, Nikkato Co., Ltd.
Outside Statutory Auditor of theCompany (to present)
Outside Director (Audit &Supervisory Committee Member),
Nikkato Co., Ltd. (to present)

52,8001. 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, 2021, to the conclusion of the Ordinary General Meeting of Shareholders for the fiscal
year ending March 31, 2023.
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, 2019, to the conclusion of the Ordinary General
Meeting of Shareholders for the fiscal year ending March 31, 2023.

―45―

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 theCompanies 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 (to present)

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, 2022, to the beginning of the Ordinary General Meeting of
Shareholders for the fiscal year ending March 31, 2023.

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. The Company judges that he is capable of providing advice concerning overall management of
the Company and 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- tolong-term enhancement of corporate value and has nominated him as a candidate for Outside Director.
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 and has nominated her as a candidate for Outside Director.
Mr. Takashi Matsuzawa has years of experience at a financial institution and profound insight into financial andaccounting affairs. The Company judges that he is capable of contributing to enhancing the Company’s audit systems. For
these reasons, the Company judges that he is indispensable for the Company’s audit systems and has nominated him as a
candidate for Outside Statutory Auditor.
Mr. Motoaki Nishimura has professional knowledge and experience as an attorney-at-law and is contributing toenhancing the Company’s audit systems. For these reasons, the Company judges that he is indispensable for the Company’s
audit systems and has nominated him as a candidate for Outside Statutory Auditor.
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 the 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

―46―

9)

(3)

An executive person of an entity for which an executive person of the Marudai Food Group serves as a
Director/Statutory Auditor

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)(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 Company 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.

―47―

(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 Mr. Toru Miyachi has a wealth of operational experience in the Company’s general affairs and human resources
department and corporate strategy department, among others, and extensive knowledge derived from his past positions
such as Director at the Group company. Full-time Statutory Auditor (and Outside Statutory Auditor) Mr. Takashi
Matsuzawa, who had been working for a financial institution before, also has abundant knowledge about financial andaccounting affairs through his experience and expertise in financial institutions over the years. Outside Statutory Auditor
Mr. Motoaki Nishimura has professional knowledge and experience as an attorney-at-law over the years. While
executing duties as Audit & Supervisory Committee Member at a publicly listed company, he has also been serving as an
outside contact point for the Company’s whistleblowing system.
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
In principle, the meetings of the Board of Statutory Auditors are held once a month in accordance with the Rules for
the Board of Statutory Auditors. The meetings of the Board of Statutory Auditors were held 16 times during the current
fiscal year. Attendance of each Statutory Auditor is shown below.
Title and position

Name

Attendance

Remarks

Full-time Statutory
10 out of 10 meetings
Toru Miyachi
Assumed office on June 25, 2021
Auditor(100%)
Full-time Statutory
Yoshikazu
6 out of 6 meetings
Retired on June 25, 2021
Auditor
Sawanaka(100%)
Full-time Statutory
Takashi
16 out of 16 meetings－
Auditor (Outside)
Matsuzawa(100%)
Part-time Statutory
Motoaki
16 out of 16 meetings－
Auditor (Outside)
Nishimura(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. Various restrictions
related to the COVID-19 pandemic forced us to postpone part of the planned audits at operational bases and subsidiaries.
We responded to this situation by closely sharing information with the management and supervising departments anddivisions, the internal auditing departments (the Internal Audit Office and the Quality Assurance Dept.), Statutory
Auditors of the Group companies, the Accounting Auditor, etc.
2)Internal audits
The Company has the Internal Audit Office, which comprises nine members, under the direct authority of President as
one of the internal auditing departments. The establishment of the said Office has allowed the Company to ensure a system
for making a fair and objective judgment about whether the Group’s operations have been executed properly in terms ofcompliance with laws and regulations, operational efficiency, credibility of financial statements, and preservation of assets,
as well as providing advice or recommendations accordingly.
The Internal Audit Office reports to personnel in charge of relevant departments about evaluation results of businessaudits and internal control situations, and also to the Board of Directors and the Board of Statutory Auditors, whennecessary, so that audits are conducted under close cooperation with them.
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
31 years―48―

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:

12 persons
8 persons
13 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
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.

―49―

4)

Details of audit remuneration
A. Details of remuneration for auditing certified public accountants, etc.
(Millions of yen)
Fiscal year ended March 31, 2021

Fiscal year ended March 31, 2022

Remuneration inaccordance with audit
certification

Remuneration inaccordance with nonaudit certification

Remuneration inaccordance with audit
certification

Remuneration inaccordance with nonaudit certification

Reporting company

70

－

68

－

Consolidated subsidiaries

－

－

－

－

Total

70

－

68

－

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, 2021
Category

Fiscal year ended March 31, 2022

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.

―50―

(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, 2022 recorded an operating loss of
865 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 Outside
118
118
－
－
9
Directors)
Statutory Auditor(excluding Outside
9
9
－
－
2
Statutory Auditors)
OutsideDirectors/Statutory
28
28
5
－
－
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.

―51―(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

11,640(Stocks in which the Company increased its stake during the current fiscal year)

Unlisted stocks
Stocks other than unlisted
stocksNumber ofissues (Issue)

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

－

－

－

34

Purchase through business partner’s
shareholding association

18(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 (Millionsof yen)Unlisted stocks－－

Stocks other than unlisted
stocks

1

681

―52―

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.

Sumitomo
Corporation

Izumi Co., Ltd.

Sumitomo Mitsui
Financial Group, Inc.

Sumitomo Mitsui
Trust Holdings, Inc.

Rengo Co., Ltd.

Nippon Shinyaku
Co., Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of sharesissuer holds
Purpose and quantitative effect of shareholding and(Shares)(Shares)a stake inreason for increase in its stake
Book value on the Book value on thethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company conducts transactions in processed
1,049,153
1,044,679 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
2,737
3,446
of shares of the company concerned that theCompany holds increased by 4,474 shares throughpurchase by the business partner’s shareholding
association.
The Company purchases raw materials etc. from
826,000
1,239,000 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 and
Yes
1,750
1,953 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.
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
1,227
1,652 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) 3.
832
853
stake in the company concerned to maintain andenhance stable financial relationship with it.
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) 4.
824
795
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
Yes510
627 been holding a stake in the company concerned tomaintain and enhance the business relationship andcooperation with it.
47,50047,500 The Company purchases raw materials etc. fromthe company concerned. Taking this business
relationship into consideration, the Company has
Yes395
390 been holding a stake in the company concerned tomaintain and enhance the business relationship andcooperation with it.

―53―IssueOUG Holdings Inc.

Sapporo Holdings
LimitedSeven & i Holdings
Co., Ltd.

United Super
Markets Holdings
Inc.

Retail Partners Co.,Ltd.

Lawson, Inc.

Life Corporation

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of sharesissuer holds
Purpose and quantitative effect of shareholding and(Shares)(Shares)a stake inreason for increase in its stake
Book value on the Book value on thethebalance 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 aYes
314
342 stake in the company concerned to maintain andenhance the business relationship and cooperation
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
Yes
251
250 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
212
162 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
180,733
180,733
food products etc. with the consolidated
subsidiaries of the company concerned. Taking thisbusiness relationship into consideration, theNo
190
210 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
131,733
129,621 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
Noconcerned to maintain and enhance the business(Note) 5.
relationship and cooperation with it. The number
189
180
of shares of the company concerned that theCompany holds increased by 2,112 shares throughpurchase by the business partner’s shareholding
association.
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 aNo
185
215 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
56,092
55,799 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
176
188 with it. The number of shares of the company
concerned that the Company holds increased by
293 shares through purchase by the business
partner’s shareholding association.

―54―

IssueKansai Food Market
Ltd.
(Note) 6.

Kaneka Corporation

Fuji Co., Ltd.

Mitsubishi UFJ
Financial Group, Inc.

Kanematsu
Corporation

Inageya Co., Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of sharesissuer holds
Purpose and quantitative effect of shareholding and(Shares)(Shares)a stake inreason for increase in its stake
Book value on the Book value on thethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company conducts transactions in processed
132,148
129,257 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
161
145
of shares of the company concerned that theCompany holds increased by 2,891 shares throughpurchase by the business partner’s shareholding
association.
The Company purchases raw materials etc. from42,60042,600the consolidated subsidiaries of the company
concerned. Taking this business relationship into
consideration, the Company has been holding a
Yes151
193 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.
63,21456,661 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
708 shares through purchase by the businessNo
partner’s shareholding association. Effective
March 1, 2022, a share exchange was carried out
146
121 in which the company concerned became thewholly-owning parent company resulting from ashare exchange, and Maxvalu Nishinihon Co., Ltd.
became the wholly-owned subsidiary resulting
from a share exchange. As a result, the number ofshares the Company holds in the company
concerned increased by 5,845 shares.
The Company conducts financial transactions with
158,300
158,300
the consolidated subsidiaries of the company
concerned. Taking this business relationship into
No
consideration, the Company has been holding a(Note) 7.
120
93
stake in the company concerned to maintain andenhance stable financial relationship with it.
82,00082,000 The Company purchases raw materials etc. fromthe company concerned. Taking this business
relationship into consideration, the Company has
Yes110
121 been holding a stake in the company concerned tomaintain and enhance the business relationship andcooperation with it.
The Company conducts transactions in processed
72,107
70,692 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
97
117 with it. The number of shares of the company
concerned that the Company holds increased by
1,415 shares through purchase by the business
partner’s shareholding association.

―55―

IssueAEON Hokkaido
Corporation

Arcs Company,
LimitedThe San-in Godo
Bank, Ltd.

Axial Retailing Inc.

The Chiba Bank, Ltd.

The Chugoku Bank,Ltd.

MINISTOP Co., Ltd.

Albis Co., Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of sharesissuer holds
Purpose and quantitative effect of shareholding and(Shares)(Shares)a stake inreason for increase in its stake
Book value on the Book value on thethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
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 a
No
85
91 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
34,14033,982 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
72
81 relationship and cooperation with it. The numberof shares of the company concerned that theCompany holds increased by 158 shares throughpurchase by the business partner’s shareholding
association.
108,150
108,150 The Company conducts financial transactions withthe company concerned. Taking this business
relationship into consideration, the Company hasYes
67
60 been holding a stake in the company concerned tomaintain and enhance stable financial relationshipwith it.
The Company conducts transactions in processed
20,413
20,232 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
relationshipandcooperation
with
it.
The
number65
97
of shares of the company concerned that theCompany holds increased by 181 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 hasYes64
64 been holding a stake in the company concerned tomaintain and enhance stable financial relationshipwith it.
67,20067,200 The Company conducts financial transactions withthe company concerned. Taking this business
relationship into consideration, the Company hasYes
58
62 been holding a stake in the company concerned tomaintain and enhance stable financial relationshipwith 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 a
No48
49 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
20,204
19,665 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
45
48 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.

―56―

IssueOM2 Network Co.,Ltd.

The Bank of Kyoto,
Ltd.

Okuwa Co., Ltd.

H2O Retailing
Corporation

Hirogin Holdings,
Inc.

Mebuki Financial
Group, Inc.

Valor Holdings Co.,Ltd.

AEON Kyushu Co.,Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of sharesissuer holds
Purpose and quantitative effect of shareholding and(Shares)(Shares)a stake inreason for increase in its stake
Book value on the Book value on thethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company conducts transactions in processed
41,16939,562 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
44
49
of shares of the company concerned that theCompany holds increased by 1,607 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 hasYes
42
54 been holding a stake in the company concerned tomaintain and enhance stable financial relationshipwith it.
The Company conducts transactions in processed
46,191
43,817 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
42
53 with it. The number of shares of the company
concerned that the Company holds increased by
2,374 shares through purchase 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
40
43 Company has been holding a stake in the company
concerned to maintain and enhance the business
relationship and cooperation with it.
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) 8.
39
40
stake in the company concerned to maintain andenhance stable financial relationship with 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) 9.
38
38
stake in the company concerned to maintain andenhance stable financial relationship with it.
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
33
39 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
15,09814,762 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
31
28 with it. The number of shares of the company
concerned that the Company holds increased by
336 shares through purchase by the business
partner’s shareholding association.

―57―

IssueBelc Co., Ltd.

Resona Holdings,
Inc.

Yamaguchi Financial
Group, Inc.

HEIWADO Co., Ltd.

Eco’s Co., Ltd.

Halows Co., Ltd.

Yamanaka Co., Ltd.

Kanemi Co., Ltd.

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of sharesissuer holds
Purpose and quantitative effect of shareholding and(Shares)(Shares)a stake inreason for increase in its stake
Book value on the Book value on thethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
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
23
27 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
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.
23
20
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.
23
25
stake in the company concerned to maintain andenhance stable financial relationship 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 a
No
20
24 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
20
19 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 a
No
18
17 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
23,666
22,769 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
16
16 with it. The number of shares of the company
concerned that the Company holds increased by
897 shares through purchase by the business
partner’s shareholding association.
The Company conducts transactions in processed
4,625
4,398 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
12
12 with it. The number of shares of the company
concerned that the Company holds increased by
227 shares through purchase by the business
partner’s shareholding association.

―58―

IssueOomitsu Co., Ltd.

Mammy Mart
Corporation

Ocean System
Corporation

Poplar Co., Ltd.

Central Forest Group,
Inc.

Maruyoshi Center
Inc.

Kakiyasu Honten
Co., Ltd.

Olympic Group
Corporation

Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of sharesissuer holds
Purpose and quantitative effect of shareholding and(Shares)(Shares)a stake inreason for increase in its stake
Book value on the Book value on thethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
The Company conducts transactions in processed
17,26916,242 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
12
11 with it. The number of shares of the company
concerned that the Company holds increased by
1,027 shares through purchase by the business
partner’s shareholding association.
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.
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
911 stake in the company concerned to maintain andenhance the business relationship and cooperation
with it.
The Company conducts transactions in processed
65,95464,350 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
9
22 with it. The number of shares of the company
concerned that the Company holds increased by
1,604 shares through purchase by the business
partner’s shareholding association.
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.
2,000
2,000 The Company conducts transactions in processedfood products etc. with the company concerned.
Taking this business relationship into consideration,No5
6 the Company has been holding a stake in thecompany concerned to maintain and enhance thebusiness relationship and cooperation with it.
The Company conducts transactions in processed
2,130
1,944 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
186 shares through purchase 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
3
4 Company has been holding a stake in the company
concerned to maintain and enhance the business
relationship and cooperation with it.

―59―IssueGourmet Kineya Co.,Ltd.

COSMOS
Pharmaceutical
Corporation

Maxvalu Tokai Co.,
Ltd.

Three F Co., Ltd.

Isetan Mitsukoshi
Holdings Ltd.

Maxvalu NishinihonCo., Ltd.

(Notes)Current fiscal year Previous fiscal year
Whether the
Number of shares
Number of sharesissuer holds
Purpose and quantitative effect of shareholding and(Shares)(Shares)a stake inreason for increase in its stake
Book value on the Book value on thethebalance sheet
balance sheet
Company(Millions of yen)
(Millions of yen)
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.
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
3 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.
The Company conducts transactions in processed
1,867
1,702 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 businessNo1
1 relationship and cooperation with it. The numberof shares of the company concerned that theCompany holds increased by 165 shares throughpurchase by the business partner’s shareholding
association.
The Company conducts transactions in processed
5,845 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 andenhance the business relationship and cooperation
Nowith it. Effective March 1, 2022, a share exchange
10 was carried out in which Fuji Co., Ltd. became the－wholly-owning parent company resulting from ashare exchange and the company concerned
became wholly-owned subsidiary resulting from ashare exchange.

1. "－" denotes that such stocks are not held.
2. Although the book values of the stocks of Axial Retailing Inc. and the companies thereunder on the consolidatedbalance sheet are not larger than 1% of the Company’s share capital, we covered the top 60 issues in this section.
3. Sumitomo Mitsui Banking Corporation, a consolidated subsidiary of Sumitomo Mitsui Financial Group, Inc., holds
the Company’s shares.
4. Sumitomo Mitsui Trust Bank, Limited, a consolidated subsidiary of Sumitomo Mitsui Trust Holdings, Inc., holds theCompany’s shares.
5. Marukyu Co., Ltd., a consolidated subsidiary of Retail Partners Co., Ltd., holds the Company’s shares.
6. Effective February 1, 2022, Kansai Super Market Ltd. changed its corporate name to Kansai Food Market Ltd.

―60―

7. MUFG Bank, Ltd., a consolidated subsidiary of Mitsubishi UFJ Financial Group, Inc., holds the Company’s shares.
8. The Hiroshima Bank, Ltd., a consolidated subsidiary of Hirogin Holdings, Inc., holds the Company’s shares.
9. Joyo Bank, Ltd. and The Ashikaga Bank, Ltd., consolidated subsidiaries of Mebuki Financial Group, Inc., hold theCompany’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.

―61―

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, 2021 through March 31, 2022) 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.

―62―

1. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
1) Consolidated Balance Sheets(Millions of yen)Previous fiscal year
(As of March 31, 2021)

Current fiscal year
(As of March 31, 2022)

AssetsCurrent assets
Cash and deposits

8,476

7,990

Notes and accounts receivable - trade
Merchandise and finished goods

23,8339,693*1 23,436

Work in process
Raw materials and supplies

377
5,797

464
5,181

Other
Allowance for doubtful accounts

1,900
(12)

1,522
(10)

Total current assets

50,06549,813

61,92862,794

11,227

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation(43,776)(44,958)

Buildings and structures, net*3 18,152*3 17,836

Machinery, equipment and vehicles

69,98773,270

Accumulated depreciation(54,174)(56,785)

Machinery, equipment and vehicles, net*3 15,812*3 16,485

5,048

4,991

Accumulated depreciation(3,480)(3,505)Tools, furniture and fixtures, net

1,567

1,485

*3 18,839*3 18,722

Tools, furniture and fixtures

Land
Leased assets

8,344

9,205

Accumulated depreciation(3,279)(4,149)Leased assets, net

5,065

5,055

Construction in progress

908

500

60,34660,085

2,779

2,267

Investment securities
Shares of subsidiaries and associates

13,314※2 166※2 218Long-term loans receivable
Retirement benefit asset

18
1,580

16
2,130

Deferred tax assets
Other

317
2,866

319
2,463

Allowance for doubtful accounts

(112)

(129)

Total investments and other assets

18,15016,737

81,27779,090131,342

128,903

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

Total non-current assets
Total assets―63―

11,718(Millions of yen)Previous fiscal year
(As of March 31, 2021)

Current fiscal year
(As of March 31, 2022)

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

20,236
7,890

20,9138,100*3 2,657*3 2,817

905

1,084

Accounts payable - other
Income taxes payable

6,841
187

6,216
171

Accrued consumption taxes
Provision for bonuses

264
850

308
810

Other

1,376

1,308

Total current liabilities

41,21041,729*3 4,649*3 4,551

4,296

4,118

1,470
1,308

992
1,378

657

644

Current portion of long-term borrowings
Lease liabilities

Non-current liabilities
Long-term borrowings
Lease liabilities
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities

12,381

11,68553,59253,414

Share capital
Capital surplus

6,716
22,086

6,716
22,086

Retained earnings
Treasury shares

45,270(2,697)

44,132(3,066)

Total shareholders’ equity

71,37569,868

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

5,944

4,990

Deferred gains or losses on hedges
Foreign currency translation adjustment

34
34

71
33

Remeasurements of defined benefit plans

(251)

(133)

Total accumulated other comprehensive income

5,761

4,962

612

658

Non-controlling interests
Total net assets
Total liabilities and net assets―64―

77,75075,489131,342

128,903

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, 2020 to March 31, (From April 1, 2021 to March 31,
2021)
2022)
*1 218,610
223,000

Cost of sales*2 188,487

Gross profit*2 186,651

34,512

31,958*3 34,845*3 32,823

(333)

(865)

16

17

Dividend income
Rental income from real estate

321
172

361
162

Other

385

274

Total non-operating income

896

816

Selling, general and administrative expenses
Operating loss
Non-operating income
Interest income

Non-operating expenses
Interest expenses

233

220

Other

148

111

Total non-operating expenses

381

331

180

(380)

Extraordinary income
Gain on disposal of non-current assets*4 316*4 131Gain on sale of investment securities
Gain on bargain purchase

1
997

429

1,315

561

*5 260*5 351*6 299

*6 9

－
204

29

Extra retirement payments

Ordinary profit (loss)

Total extraordinary income
Extraordinary losses
Loss on disposal of non-current assets
Impairment losses
Loss on valuation of investment securities－

19

Total extraordinary losses

764

409

Profit (loss) before income taxes

732

(229)

Income taxes - current
Income taxes - deferred

328
(79)

238
(140)

Total income taxes

248

97

Profit (loss)

483

(326)

Profit attributable to non-controlling interests

70

49

Profit (loss) attributable to owners of parent

412

(376)

―65―

Consolidated Statements of Comprehensive Income

Profit (loss)(Millions of yen)Previous fiscal year
Current fiscal year
(From April 1, 2020 to March 31, (From April 1, 2021 to March 31,
2021)
2022)
483
(326)

Other comprehensive income
Valuation difference on available-for-sale securities

2,111

(953)

37
929

36
118

(6)

(0)

* 3,072* (799)Comprehensive income

3,555(1,126)Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

3,485(1,175)

70

49

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―66―3) Consolidated Statements of Changes in Net Assets
For the previous fiscal year (From April 1, 2020 to March 31, 2021)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

6,716

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity22,08645,676(2,657)

71,821

72
6,716

22,08672

45,748(2,657)

71,893

Changes during period
Dividends of surplus
Profit (loss) attributable toowners of parent
Purchase of treasury
sharesNet changes in items otherthan shareholders’ equity

(889)

(889)

412

412
(40)

(40)

Total changes during period

－

－

(477)

(40)

(517)

Balance at end of period

6,716

22,08645,270(2,697)

71,375

Accumulated other comprehensive income

Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedges3,832(2)Foreigncurrencytranslation
adjustment
40

Total
Remeasurements accumulated Non-controlling Total net assetsinterestsof defined benefit
other
plans
comprehensive
income(1,181)

2,688

545

75,056
72

3,832

(2)

40

(1,181)

2,688

545

75,128Changes during period
Dividends of surplus
Profit (loss) attributable toowners of parent
Purchase of treasury
sharesNet changes in items otherthan shareholders’ equity

(889)
412
(40)
2,111

37

(6)

929

3,072

66

3,139

Total changes during period

2,111

37

(6)

929

3,072

66

2,621

Balance at end of period

5,944

34

34

(251)

5,761

612

77,750―67―

For the current fiscal year (From April 1, 2021 to March 31, 2022)(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

6,716

Capital surplus

Retained earnings

Treasury shares

22,08645,270(2,697)

Total shareholders’equity71,375－

6,716

22,08645,270(2,697)

71,375

Changes during period
Dividends of surplus
Profit (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

Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

Valuationdifference on
available-forsale securities

Deferred gains
or losses onhedgesForeigncurrencytranslation
adjustment

5,944

34

34

Total
Remeasurements accumulated Non-controlling Total net assetsinterestsof defined benefit
other
plans
comprehensive
income
(251)

5,761

612

77,750
－

5,944

34

34

(251)

5,761

612

77,750Changes during period
Dividends of surplus
Profit (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―4) Consolidated Statements of Cash Flows(Millions of yen)Previous fiscal year
Current fiscal year
(From April 1, 2020 to March 31, (From April 1, 2021 to March 31,
2021)
2022)
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation

732
7,798

(229)
7,945

Impairment losses
Increase (decrease) in allowance for doubtful accounts

299
(7)

9
15

Increase (decrease) in retirement benefit liability
Gain on bargain purchase

(266)
(997)

(321)

Extra retirement payments
Interest and dividend income

204
(338)

－
19
(379)

Interest expenses
Loss (gain) on sale of investment securities

233
(1)

220
(429)

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

－
(56)

29
219

Decrease (increase) in trade receivables
Decrease (increase) in inventories

2,220
2,288

406
(1,013)

Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes(3,566)
(198)

707
43

Other, net

(84)

(298)

Subtotal

8,259

6,945

Interest and dividends received

336

358

Interest paid
Income taxes paid

(233)
(597)

(220)
(297)

Income taxes refund
Extra retirement payments

－
(90)

449
(204)

7,673

7,030

(34)
2

(34)
681

(5,418)
1,008(6,777)647*2 (1,195)

－

247

(204)

Net cash provided by (used in) investing activities(5,388)(5,688)Cash flows from financing activities
Net increase (decrease) in short-term borrowings

(190)

210

3,910
(3,924)2,720(2,657)

Repayments of lease liabilities
Dividends paid

(914)
(889)

(963)
(762)

Purchase of treasury shares
Other, net

(40)
(3)

(368)
(3)

(2,053)(1,826)

Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of non-current assets
Proceeds from sale of non-current assets
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Other, net

Proceeds from long-term borrowings
Repayments of long-term borrowings

Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents

231

(485)

Cash and cash equivalents at beginning of period

8,244

8,476

*1 8,476*1 7,990

Cash and cash equivalents at end of period―69―

[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:
27
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.
Kyomigawa Co., Ltd. was excluded from the scope of consolidation as the liquidation of the company concerned wascompleted 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.

―70―3) 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 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.
(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.

―71―

(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 distributing expenses, promotion expenses, etc. from prices
agreed in a contract with a customer.
(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 not reflected intheir 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
1) Application of consolidated taxation system
The Company applies a consolidated taxation system.

―72―2) Application of tax effect accounting related to the transition from a consolidated taxation system to a group tax sharing
systemThe Company and some of its consolidated subsidiaries in Japan will make a transition from a consolidated taxation
system to a group tax sharing system from the next fiscal year. However, regarding items that have been transitioned to agroup tax sharing system established under the “Act for Partial Amendment to the Income Tax Act, etc.” (Act No. 8 of2020) and for which a revision of the non-consolidated taxation system has been carried out pursuant to this transition, theCompany and some of its consolidated subsidiaries in Japan has not applied the provisions in Paragraph 44 of the“Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, February 16, 2018), in accordance with thetreatment prescribed in Paragraph 3 of the “Practical Solution on the Treatment of Tax Effect Accounting for the Transition
from the Consolidated Taxation System to the Group Tax Sharing System” (PITF No. 39, March 31, 2020). The amounts ofdeferred tax assets and deferred tax liabilities for these items are based on taxation law as it was before amendment.
The Company plans to apply the “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing
System” (the Practical Solution No.42, August 12, 2021), that defines the accounting treatment and disclosure methods fornational/regional income taxes and those for tax effect accounting when applying the group tax sharing system, from the
beginning of the next fiscal year.
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, 2022.
(Significant accounting estimates)
1. Impairment of non-current assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2022
The book value of business assets (including common assets) of Marudai Food Co., Ltd.: 33,998 million yen(Property, plant and equipment: 31,940 million yen / Intangible assets: 2,058 million yen)
The Company determined that there was an indication of impairment of the business assets of Marudai Food Co., Ltd. dueto the continuous recording of operating loss and reviewed the necessity of recording impairment losses. However, as it wasdetermined that the undiscounted future cash flows would exceed the book value of the business assets, including the common
assets of Marudai Food Co., Ltd., the Company did not record any impairment losses.
(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, rental assets, idle assets and artwork. Regarding business assets, the management accounting
business category in which income and expenditure are continuously monitored is considered one asset group, and future
cash flows are calculated based on the profit plan formulated on the basis of the management plan approved by the Board of
Directors. Regarding rental assets, idle assets and artwork, individual assets are used as the smallest unit for grouping. The
future cash flows of rental assets are estimated by the net selling price on the basis of appraisal values, etc., or future cash
flows on the basis of rental income, etc., while future cash flows of idle assets and artwork are estimated based on the net
selling price on the basis of 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 as well as decrease in net sales in
the current fiscal year. The resulting figures are then further adjusted to come up with net sales forecast by reflecting therevenue-increasing effect of price revisions expected from the most recent business talks, etc. In addition, we assume
that net sales for the next fiscal year and beyond will remain at the same level, taking into account the market
environment for our mainstay ham and sausage products.
- 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 capital investment in the production division.

―73―

With regard to the impact of COVID-19, the Company assumes that demand for professional use products for therestaurant industry will recover, albeit gradually, thanks to the lifting of quasi-state of emergency and progress invaccination.
3) Effect on the consolidated financial statements for the fiscal year ending March 31, 2023
There may be a significant impact on the consolidated financial statements for the fiscal year ending March 31, 2023 if
actual amounts differ from the estimates due to uncertain future economic conditions or changes in the businessenvironment.
2. Recoverability of deferred tax assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2022
Deferred tax assets before offsetting with deferred tax liabilities: 2,211 million yen(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, 2023
There may be a significant impact on the consolidated financial statements for the fiscal year ending March 31, 2023 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.

―74―

(Changes in accounting policies)(Application of an accounting standard for revenue recognition, etc.)
The Company began applying the “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan(ASBJ) Statement No. 29, March 31, 2020, hereinafter referred to as the “Revenue Recognition Standard”), etc., at the
beginning of the fiscal year ended March 31, 2022, and recognizing revenue when it transfers the control of promised goods
or services to a customer, based on amounts expected to be received in exchange for such goods or services. As a result, wehave changed an accounting method in which a portion of distribution expenses and promotion expenses, etc., which had
previously been recorded as selling, general and administrative expenses, are now deducted from net sales. In principle, thischange in accounting policies has been applied retrospectively, including the consolidated financial statements for theprevious fiscal year. However, the following method that is provided in Paragraph 85 of the Revenue Recognition Standard isapplied:- For contracts under which almost all of revenues had been recognized before the beginning of the previous fiscal year inaccordance with the previous revenue recognition policy, comparative information shall not be revised retrospectively.
As a result, when compared to figures not applying the new Revenue Recognition Standard, both net sales and selling,
general and administrative expenses for the fiscal year ended March 31, 2021 decreased by 11,151 million yen, respectively.
In addition, both other accounts payable - other and trade accounts receivable - trade at the end of the fiscal year ended March
31, 2021 decreased by 2,304 million yen, respectively.
In accordance with the transitional treatment prescribed in Paragraph 89-3 of the Revenue Recognition Standard, notes for“Revenue recognition” related to the previous fiscal year are omitted.
(Application of an accounting standard for fair value measurement, etc.)
The Company began applying the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4,
2019, hereinafter referred to as the “Fair Value Measurement Standard”), etc., at the beginning of the fiscal year ended March
31, 2022, and adopts new accounting policies that are stipulated by the Fair Value Measurement Standard, etc. in accordancewith the transitional treatment prescribed in Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of the“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). This change has no effect on the
consolidated financial statements.
In addition, we have decided to present the breakdown of financial instruments by the level of their fair value, etc. in notes
for “Financial instruments.” However, in accordance with the transitional treatment prescribed in Paragraph 7-4 of the“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19, July 4, 2019),
relevant notes relating to the fiscal year ended March 31, 2021 are omitted.
(Change in the method of recording distribution expenses)
The Group has decided to start recording a portion of distribution expenses, which had previously been recorded as selling,
general and administrative expenses, as manufacturing cost from the beginning of the fiscal year ended March 31, 2022. Thischange was implemented to make our profit and loss management better reflect the real situations (regarding relevant
divisions, items, customers, etc.) within the Group, including the revision of allocation method of distribution expenses, while
the importance of distribution expenses are growing, taking advantage of the system unification of the Company and its major
consolidated subsidiaries thanks to the update of the enterprise system.
This change in accounting policies has been applied retrospectively, including the consolidated financial statements for theprevious fiscal year. As a result, when compared to figures not applying the new accounting policy, merchandise and finishedgoods increased by 100 million yen, deferred tax liabilities increased by 30 million yen, and retained earnings increased by 70
million yen on the consolidated balance sheet for the fiscal year ended on March 31, 2021. For the consolidated statement ofincome for the same fiscal year, cost of sales increased by 3,799 million yen, selling, general and administrative expenses
decreased by 3,796 million yen, operating loss increased by 2 million yen, and ordinary profit, profit before income taxes,
profit and profit attributable to owners of parent decreased by 2 million yen, respectively. As cumulative effects of this change
were reflected in net assets at the beginning of the previous fiscal year, the balance of retained earnings at the beginning of theperiod, with the change being applied retrospectively, increased by 72 million yen in the consolidated statement of changes in
net assets. The effect of this change on per share information are described in the “Per share information” section.

―75―

(Consolidated balance sheets)*1. Among notes and accounts receivable - trade, the amounts of receivables resulting from the contracts with customers are as
follows:
Current fiscal year
(As of March 31, 2022)
Notes receivable - trade
36 million yen
Accounts receivable - trade23,400 million yen*2. The following are related to subsidiaries and associates:

Shares of subsidiaries and associates

Previous fiscal year
(As of March 31, 2021)

Current fiscal year
(As of March 31, 2022)

166 million yen

218 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

Previous fiscal year
(As of March 31, 2021)
40 million yen
62 million yen
3 million yen

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

107 million yen

82 million yen

Previous fiscal year
(As of March 31, 2021)
38 million yen
99 million yen

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

137 million yen

99 million yen

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, 2021)(As of March 31, 2022)
Total amounts in the overdraft agreements
32,760 million yen
32,770 million yen
Borrowing balance
7,790 million yen
8,000 million yen
Difference

24,970 million yen―76―

24,770 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, 2020 to March 31, 2021)(From April 1, 2021 to March 31, 2022)(24) million yen

46 million yen*3. Selling, general and administrative expenses(1) Major items and their amounts were as follows:

Distribution expenses
Salaries and allowances
Provision for bonuses
Retirement benefit expenses

Previous fiscal year
(From April 1, 2020 toMarch 31, 2021)
13,017 million yen
6,498 million yen

Current fiscal year
(From April 1, 2021 toMarch 31, 2022)
12,482 million yen
6,252 million yen

401 million yen
399 million yen

372 million yen
316 million yen

3 million yen

3 million yen

Provision of allowance for doubtful accounts(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, 2020 to March 31, 2021)(From April 1, 2021 to March 31, 2022)
673 million yen

673 million yen*4. Gain on disposal of non-current assets
Primarily generated from the sales of real estate for rent and other.
*5. Loss on disposal of non-current assets
Primarily comprised of loss on retirement of, and removal expenses for buildings and structures and machinery, equipment andvehicles.
*6. Impairment losses
The Group recorded impairment losses on the following assets:
Previous fiscal year (From April 1, 2020 to March 31, 2021)
Category
Type
Location
AmountReal estate for rent and other
Idle assets
Nagasaki Prefecture, etc.
299 million yen(Land, buildings, etc.)
Total
299 million yen－－
The Company classifies non-current assets into four categories: business assets, 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 a result, where the recoverable value of idle assets has fallen below thebook value due to declines in market prices, the book value of these assets has been reduced to their recoverable value. All of
the impairment losses of 299 million yen relate to real estate for rent and other (“Other” under “Investments and otherassets”).
The recoverable value of idle assets was measured by the net realizable value assessed based on the appraisal value, etc.

―77―Current fiscal year (From April 1, 2021 to March 31, 2022)
Category
Type
Location
AmountReal estate for rent and other
Hiroshima
Idle assets
8 million yen(Land)
Prefecture, etc.
Real estate for rent and other
Kumamoto
Rental assets
0 million yen(Land)
Prefecture
Total
－
－
9 million yen
The Company classifies non-current assets into four categories: business assets, 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 a result, 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 totheir 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%.
(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, 2020 to March 31, (From April 1, 2021 to March 31,
2021)
2022)
Valuation difference on available-for-sale securities
Increase (decrease) during the year
Reclassification adjustments
Amount before tax effectTax effect
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Increase (decrease) during the year

2,994
(1)

(949)
(400)

2,993
(882)

(1,349)
395

2,111

(953)

54

52

Amount before tax effectTax effect

54
(16)

52
(16)

Deferred gains or losses on hedges

37

36

Adjustments for retirement benefits
Increase (decrease) during the year
Reclassification adjustments

960
282

23
135

Amount before tax effectTax effect

1,243
(313)

158
(40)

929

118

(6)

(0)

3,072

(799)

Adjustments for retirement benefits
Share of other comprehensive income of associates
accounted for using equity method
Increase (decrease) during the year
Total other comprehensive income―78―

(Consolidated statement of changes in net assets)
Previous fiscal year (From April 1, 2020 to March 31, 2021)
1. Class and total number of issued shares and treasury shares
Balance at beginning of Increase during the fiscal Decrease during theBalance at end of thethe fiscal year (Shares)
year (Shares)
fiscal year (Shares)
fiscal year (Shares)
Issued shares
Common stock
26,505,581
26,505,581
－
－
Total
26,505,581－－
26,505,581
Treasury shares
Common stock
1,081,261
21,7391,103,000－
Total
1,081,261
21,739－1,103,000(Note) Increase in treasury shares of 21,739 shares consists of an acquisition of 21,600 shares through the off-hours trading system(ToSTNeT-3) and purchase of odd lots of 139 shares.
2. Dividends(1) Dividends paid
Resolution

Class ofshares

Source ofdividends

Ordinary General
Meeting of
Shareholders held on
June 26, 2020

Commonstock

Retainedearnings

Total amount of
Dividends per
dividends
share (Yen)(Millions of yen)889

35

Record date

Effective date

March 31, 2020

June 29, 2020

(2) Dividends whose record date falls in the current fiscal year but whose effective date comes after March 31, 2021
Total amount ofClass of
Source ofDividends per
Resolution
dividends
Record date
Effective datesharesdividends
share (Yen)(Millions of yen)
Ordinary General
Meeting ofCommonRetained
762
30
March 31, 2021
June 28, 2021
Shareholders held onstockearnings
June 25, 2021
Current 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 Decrease during theBalance at end of thethe fiscal year (Shares)
year (Shares)
fiscal year (Shares)
fiscal year (Shares)
Issued shares
Common stock
26,505,581
26,505,581
－
－
Total
26,505,581－－
26,505,581
Treasury shares
Common stock
1,103,000
205,897－
1,308,897
Total
1,103,000
205,897
1,308,897－(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

Ordinary General
Meeting of
Shareholders held on
June 25, 2021

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)
Ordinary General
Meeting ofCommonRetained
755
30
March 31, 2022
June 27, 2022
Shareholders held onstockearnings
June 24, 2022

―79―

(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, 2020 to(From April 1, 2021 toMarch 31, 2021)
March 31, 2022)
Cash and deposits
8,476 million yen
7,990 million yen
Cash and cash equivalents

8,476 million yen

7,990 million yen*2. Breakdown of the major assets and liabilities of a company that became a newly consolidated subsidiary through acquisition ofsharesPrevious fiscal year (From April 1, 2020 to March 31, 2021)
The breakdown of the assets and liabilities at the time of the consolidation of Toraku Foods Co., Ltd. due to the acquisition ofits shares and the relationship between the acquisition price of that company and the expenditure (net) for the acquisition were as
follows:
Current assets
1,835 million yen
Non-current assets
3,553 million yen
Current liabilities
Non-current liabilities
Gain on bargain purchase
Acquisition price of shares
Cash and cash equivalents
Net: Expenditures for the acquisition(1,198) million yen(1,992) million yen(997) million yen
1,200 million yen(4) million yen
1,195 million yen

Current fiscal year (From April 1, 2021 to March 31, 2022)
Not applicable.
3. Significant non-cash transactions
Newly recorded assets and liabilities related to finance lease transactions were as follows:
Previous fiscal year
(From April 1, 2020 toMarch 31, 2021)
548 million yen

Assets and liabilities related to finance lease transactions

Current fiscal year
(From April 1, 2021 toMarch 31, 2022)
967 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.

―80―

(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, 2022.
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.

―81―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.
Previous fiscal year (As of March 31, 2021)(Millions of yen)Book value on the
consolidated balance sheet

Fair value

Difference

23,833

23,833－

13,266

13,266－

37,10037,100－(1) Notes and accounts payable - trade20,236

20,236－(2) Accounts payable - other

6,841

6,841

－

(3) Short-term borrowings

7,890

7,890

－

(4) Long-term borrowings

7,306

7,303

(3)

(5) Lease liabilities

5,201

5,236

34

47,47647,508

31

50

50

－

(1) Notes and accounts receivable - trade(2) Investment securities
Available-for-sale securities
Total assets

Total Liabilities
Derivatives transactions (*3)(*1) “Cash and deposits” are omitted as they are cash or deposits that are settled in a short period of time and thus their fair values
are similar to their book values.
(*2) Book value on the consolidated balance sheet of financial instruments whose fair value is deemed to be considerably difficult
to estimate(Millions of yen)
Category

As of March 31, 2021

Unlisted stocks

47

Shares of subsidiaries and associates

166

Since no market prices were available for unlisted stocks, and their fair values were difficult to determine by an estimationof the future cash flows, unlisted stocks are not included in “(2) Investment securities (Available-for-sale securities)” under“Assets.”
The fair values of shares of subsidiaries and associates have not been disclosed as no market prices for these securities areavailable and their fair values are deemed extremely difficult to determine by an estimation of the future cash flows.
(*3) Derivative receivables and payables are presented on a net basis.

―82―

Current fiscal year (As of March 31, 2022)(Millions of yen)Book value on the
consolidated balance sheet

Fair value

Difference

36

36

－

23,40023,400－11,671

11,671－

35,10835,108－(1) Notes and accounts payable - trade

20,913

20,913－(2) Accounts payable - other

6,216

6,216

－

(3) Short-term borrowings

8,100

8,100

－

(4) Long-term borrowings

7,369

7,364

(4)

(5) Lease liabilities

5,203

5,229

26

47,80147,823

21

102

102

－

(1) Notes receivable - trade(2) Accounts receivable - trade(3) Investment securities
Available-for-sale securities
Total assets

Total Liabilities
Derivatives transactions (*3)
(*1)
(*2)

“Cash and deposits” are omitted as they are cash or deposits that are settled in a short period of time and thus their fairvalues are similar to their book values.
Unlisted stocks and shares of subsidiaries and associates are not included in the table above as they do not have market
prices. Book values on the consolidated balance sheet for these financial instruments are as follows:(Millions of yen)
Category(*3)

As of March 31, 2022

Unlisted stocks

47

Shares of subsidiaries and associates

218

Derivative receivables and payables are presented on a net basis.

―83―

(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, 2021)(Millions of yen)Over 1 year but
Within 1 year
Over 5 years
within 5 years
Cash and deposits

8,476

－

－

Notes and accounts receivable - trade23,833

－

－

－

－

－

32,309－－Investment securities
Available-for-sale securities with maturity dates
Total
Current fiscal year (As of March 31, 2022)(Millions of yen)
Within 1 year
Cash and deposits

Over 5 years

7,990

－

－

36

－

－

23,400

－

－

－

－

－

31,427－－

Notes receivable - trade
Accounts receivable - trade

Over 1 year but
within 5 years

Investment securities
Available-for-sale securities with maturity dates
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, 2021)(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

7,890

－

－

－

－

－

Long-term borrowings

2,657

2,159

1,419

834

210

25

Lease liabilities

905

991

865

831

611

996

Total

11,452

3,151

2,285

1,665

821

1,021

Current fiscal year (As of March 31, 2022)
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

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

―84―

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.
(1) Financial instruments recorded at fair value in consolidated balance sheet
Current 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
－

Total
－
－

11,671
11,671

－

－

－

Bonds

－

Other

－

－

－

－

－
－
－
11,671

102
102
－
102

－
－
－
－

102
102
－
11,774

Derivatives transactions
Currency-related derivatives
Interest-related derivatives
Total assets(2) Financial instruments other than those recorded at fair value in consolidated balance sheet
Current fiscal year (As of March 31, 2022)
Fair value (Millions of yen)
Category
Level 1
Level 2
Level 3
Notes receivable - trade36－
Accounts receivable - trade23,400－Total assets
23,436
－

Total
－
－
－

36
23,40023,436

Notes and accounts payable - trade－

20,913－

20,913

Accounts payable - other

－

6,216

－

6,216

Short-term borrowings
Long-term borrowings
Lease liabilities
Total Liabilities

－
－
－
－

8,100
7,364
5,229
47,823

－
－
－
－

8,100
7,364
5,229
47,823(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 calculation of fair value being based on the prices andother information presented by financial institutions. Therefore, their fair values are classified as Level 2.
Notes receivable – trade and accounts receivable - trade
The fair values of these items are stated at book value as these instruments are settled in a short period of time, and thus
book value approximates fair value. Therefore, their fair values are classified as Level 2.
Notes and accounts payable - trade, accounts payable - other, and short-term borrowings
The fair values of these items are stated at book value as these instruments are settled in a short period of time, and thus
book value approximates fair value. Therefore, their fair values are classified 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.

―85―

(Securities)
1. Available-for-sale securities
Previous fiscal year (As of March 31, 2021)(Millions of yen)
Category

Book value on the consolidatedbalance sheet

Historical cost

Difference

Securities with book values
exceeding historical cost
1) Equity securities

13,059

4,551

8,508

2) Bonds－－－

3) Other－－－

13,059

4,551

8,508

1) Equity securities

207

265

(57)

2) Bonds－－－

3) Other－－－

Subtotal

207

265

(57)

Total

13,266

4,816

8,450

Subtotal
Securities with book values
not exceeding historical cost

(Note) Unlisted stocks (carrying amount of 47 million yen) were not included in the above table as no market prices for these securities
were available and their fair values were deemed extremely difficult to determine by an estimation of the future cash flows.
Current 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.

―86―2. Available-for-sale securities sold during the year
Previous fiscal year (From April 1, 2020 to March 31, 2021)(Millions of yen)
Category

Proceeds

Gains on sales

Losses on sales

Equity securities
Bonds
Other

2
－
－

1
－
－

－
－
－

Total

2

1

－

Current fiscal year (From April 1, 2021 to March 31, 2022)(Millions of yen)
Category

Proceeds

Gains on sales

Losses on sales

Equity securities
Bonds
Other

681
－
－

429
－
－

－
－
－

Total

681

429

－

3. Impairment of investment securities
There was no impairment of investment securities during the fiscal year ended March 31, 2021.
The Company recognized 29 million yen as impairment losses for investment securities during the fiscal year ended March 31,
2022.
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.

―87―

(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, 2021)(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

1,651

－

50

1,651

－

50

Current 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

Major hedged items

Fixed-ratetransaction
On purchased
U.S. dollar

Accounts payable- tradeTotal(2) Interest-related derivatives
Previous fiscal year (As of March 31, 2021)
Not applicable.
Current fiscal year (As of March 31, 2022)
Not applicable.

―88―

Due over 1 year

Fair value

2,955

－

102

2,955

－

102

(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, 2022 and 2021 (excluding those for which thesimplified method was applied)
Previous fiscal year
Current fiscal year
(From April 1, 2020 to(From April 1, 2021 toMarch 31, 2021)
March 31, 2022)
Beginning balance of retirement benefit obligation
13,210 million yen
12,833 million yen
millionyen
Service cost - benefits earned during the year
310
296 million yen
Interest cost on projected benefit obligation
105 million yen
102 million yen
20 million yen(814) million yen

Actuarial gains and losses
Retirement benefits paid
Ending balance of retirement benefit obligation

12,833 million yen(172) million yen(786) million yen
12,274

million yen(2) The changes in plan assets for the fiscal years ended March 31, 2022 and 2021 (excluding those for which the simplified method
was applied)
Previous fiscal year
Current fiscal year
(From April 1, 2020 to(From April 1, 2021 toMarch 31, 2021)
March 31, 2022)
Beginning balance of plan assets
13,780 million yen
14,941 million yen
Expected return on plan assets
413 million yen
373 million yen
Actuarial gains and losses
980 million yen(148) million yen
394 million yen(627) million yen

Contribution from the employer
Retirement benefits paid
Ending balance of plan assets

14,941 million yen

384 million yen(602) million yen
14,947

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, 2022 and 2021
Previous fiscal year
Current fiscal year
(From April 1, 2020 to(From April 1, 2021 toMarch 31, 2021)
March 31, 2022)
Beginning balance of retirement benefit liability
1,351 million yen
1,835 million yen
Retirement benefit expenses
171 million yen
174 million yen
millionyen
Retirement benefits paid
(97)(89) million yen
Amount of increase due to new consolidation
Amount of decrease due to transfer to defined
contribution pension plans
Ending balance of retirement benefit liability―89―

455 million yen
million yen(45)–

1,835 million yen

1,921

–
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, 2021)(As of March 31, 2022)
Funded retirement benefit obligation
13,360 million yen
12,817 million yen
Plan assets(14,941) million yen(14,947) million yen(1,580) million yen
1,308 million yen(2,130) million yen
1,378 million yen(271) million yen(751) million yen

Retirement benefit asset(1,580) million yen
Retirement benefit liability
1,308 million yen
Net liability (asset) for retirement benefits recorded in(271) million yen
the consolidated balance sheet(Note) The plans to which the simplified method is applied are included.

(2,130) million yen
1,378 million yen

Unfunded retirement benefit obligation
Net liability (asset) for retirement benefits recorded in
the consolidated balance sheet(751) million yen(5) The components of retirement benefit expenses

Service cost - benefits earned during the year
Interest cost on projected benefit obligation
Expected return on plan assets
Amortization of actuarial differences
Retirement benefit expenses calculated using thesimplified method
Retirement benefit expenses on defined benefit plans

Previous fiscal year
(From April 1, 2020 toMarch 31, 2021)
310 million yen
105 million yen(413) million yen

Current fiscal year
(From April 1, 2021 toMarch 31, 2022)
296 million yen
102 million yen(373) million yen

282 million yen
million yen
171

135

457 million yen

335

174

million yen
million yen
million yen

Extra retirement payments (Note)
204 million yen
19 million yen(Note) Recorded under extraordinary losses. In addition, extra retirement payments for the fiscal year ended March 31, 2021 areadditional severance benefits for early retirees while those for the fiscal year ended March 31, 2022 are additional
severance benefits for those who were permanently transferred to consolidated subsidiaries.
(6) Adjustments for retirement benefits
The components of adjustments for retirement benefits (before tax effect) were as follows:
Previous fiscal year
(From April 1, 2020 toMarch 31, 2021)
Actuarial gains and losses
1,243 million yen
Total

1,243 million yen

Current fiscal year
(From April 1, 2021 toMarch 31, 2022)
158 million yen
158 million yen(7) 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
(As of March 31, 2021)(As of March 31, 2022)
Unrecognized actuarial gain or loss
334 million yen
175 million yen
Total

334 million yen―90―

175 million yen

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

Bonds
Alternatives (Note)Previous fiscal year
(As of March 31, 2021)
43.0 %
24.7 %

Equity securities
General account

22.4 %
7.8 %Short-term assets

2.1 %Current fiscal year
(As of March 31, 2022)
43.5 %
23.7 %
22.7 %
7.8 %
2.3 %

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, 2020 toMarch 31, 2021)
0.8 %Current fiscal year
(From April 1, 2021 toMarch 31, 2022)
0.8 %

3.0 %

2.5 %

Long-term expected rate of return
Expected rate of salary increase (Note)

Lump-sum payment plans
4.6 %
4.6 %
(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 244
million yen for the year ended March 31, 2022 and 252 million yen for the year ended March 31, 2021.

―91―

(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities
Previous fiscal year
(As of March 31, 2021)

Current fiscal year
(As of March 31, 2022)

729 million yen
920 million yen
665 million yen
438 million yen
274 million yen
215 million yen
41 million yen
717 million yen

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

4,001 million yen

4,099 million yen(404) million yen(496) million yen(1,409) million yen(1,390) million yen(1,814) million yen(1,887) million yen

2,187 million yen

2,211 million yen

Valuation difference on available-for-sale securities(2,509) million yen(2,113) million yen

Retirement benefit asset
Reserve for advanced depreciation of non-current
assetsOther(483) million yen(652) million yen(29) million yen(29) million yen(317) million yen(89) million yen(3,339) million yen(2,884) million yen

Deferred tax assets
Tax loss carryforwards (Note) 3
Impairment losses
Denied sales discounts, etc.
Retirement benefit liability
Provision for bonuses
Long-term trade receivables
Allowance for doubtful accounts
Other
Deferred tax assets subtotal
Valuation allowance for tax loss carryforwards (Note)
3
Valuation allowance for deductible temporary
differences
Valuation allowances subtotal (Note) 1
Total deferred tax assets
Deferred tax liabilities

Total deferred tax liabilities

Net deferred tax assets (liabilities)(1,152) million yen(672) million yen(Notes)
1. Valuation allowance increased 73 million yen year on year. It was due mainly to an increase in valuation allowancefor tax loss carryforwards of 92 million yen.
2. As described in “[Notes] (Changes in accounting policies),” the Company changed its accounting policy. As a result,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.
3. Tax loss carryforwards and deferred tax assets by expiration periods
Previous fiscal year (As of March 31, 2021)(Millions of yen)
Within 1
year

Over 2
Over 1 year
years but
but within 2
within 3
years
years
9
11

Over 3
years butwithin 4
years
13Over 4
years butwithin 5
years
9Over 5
years

Total

Tax loss carryforwards (*1)

14

670

729

Valuation allowances

(14)

(9)

(11)

(13)

(8)

(346)

(404)

Deferred tax assets

－

－

－

0

0

324

(*2) 324(*1) Tax loss carryforwards shown in the above table are after multiplying the statutory tax rate.
(*2) With respect to 729 million yen in tax loss carryforwards (after application of the statutory tax rate), 324 million yen indeferred tax assets has been recognized. This 324 million yen in deferred tax assets was recognized as loss carryforwards
recoverable based on projected future taxable income out of the 729 million yen balance in tax loss carryforwards (mainly
inhabitants tax and enterprise tax) (after application of the statutory tax rate) at the Company and some consolidated
subsidiaries.

―92―

Current fiscal year (As of March 31, 2022)(Millions of yen)
Within 1
year

Over 2
Over 1 year
years but
but within 2
within 3
years
years
11
13

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

Tax loss carryforwards (*1)

9Valuation allowances

(9)

(11)

(13)

(8)

Deferred tax assets

－

－

0

0

Over 5
years

Total

1,014

1,106

(32)

(420)

(496)

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.
(Changes in presentation)“Denied sales discounts” and “accounts payable on distribution expenses”, which had been recorded as deferred tax assets during
the fiscal year ended March 31, 2021, were consolidated into “denied sales discounts, etc.” starting from the fiscal year ended
March 31, 2022, in order to improve the clarity of disclosure, as both of them are expenses deducted from net sales. The notes tothe previous fiscal year have been reclassified to reflect this change in presentation. As a result, “accounts payable on distribution
expenses” of 361 million yen and “denied sales discounts” of 303 million yen for the fiscal year ended March 31, 2021 werereclassified to “denied sales discounts, etc.” of 665 million yen.
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, 2021)(As of March 31, 2022)
Statutory tax rate
30.6%－
Adjustment:
Nondeductible expenses, including entertainment
3.7%－
expenses
Nontaxable income, including dividend income(2.7)%－Per capita inhabitants tax
13.6%－
Changes in valuation allowance
23.0%－
Tax rate difference between the Company and6.2%－
consolidated subsidiaries
Income taxes for prior periods
1.0%－
Gain on bargain purchase(41.7)%
－
Other
0.2%
－
Effective tax rate after applying tax effect accounting
33.9%－(Notes)1. Notes for the current fiscal year are omitted as we recorded loss before income taxes.
2. The Company changed its accounting policy in the current fiscal year. As a result, the effective tax rate after applying
tax effect accounting and the breakdown of major items that caused the significant difference for the previous fiscal
year are presented with figures to which the new policy is applied retrospectively.
(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 “(Significant accounting policies
for preparation of consolidated financial statements).”―93―

3. Relationship between the satisfaction of performance obligations based on the contracts with customers and cash flows generated
from these contracts, and information on the expected amount and timing of revenue to be recognized in or after the next fiscal
year based on the contracts with customers that exist at the end of the current fiscal year
The balance of receivables generated from contracts with customers is as follows: There is no balance of contractual
assets/liabilities at the beginning/end of the period.
(Millions of yen)
Fiscal year ended March 31,
2022
Receivables generated from contracts with customers(Balance at beginning of period)
Receivables generated from contracts with customers(Balance at end of period)

23,83323,436(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.”(Application of an accounting standard for revenue recognition, etc.)
As described in “[Notes] (Changes in accounting policies),” the Company began applying the Revenue Recognition Standard,
etc. from the consolidated financial statements for the fiscal year ended March 31, 2022 and changed the accounting treatment inrelation to revenue recognition. The calculation method for the profit/loss of reportable segments has been changed in the samemanner accordingly.
Segment information for the previous fiscal year is presented after applying the new calculation method for profit/loss.
(Change in the method of recording distribution expenses)
As described in “[Notes] (Changes in accounting policies),” the Company changed the method of recording distribution
expenses starting from the consolidated financial statements for the fiscal year ended March 31, 2022. The calculation method forthe profit/loss of reportable segments has been changed in the same manner accordingly.
Segment information for the previous fiscal year is presented after applying the new calculation method for profit/loss.

―94―

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, 2020 to March 31, 2021)(Millions of yen)
Reportable segment
Book valueon theProcessed
Other
Adjustments consolidated
Meat
Total
Food
(Note) 1(Note) 2
financial
Products
Total
Products
statements
operations
operations(Note) 3
Net sales
Sales to externalcustomers
Intersegment sales andtransfers
Total
Segment income (loss)
Segment assets

151,762

71,087

222,849150

223,000－

223,000

－

－

－

746

746

(746)

－

151,762

71,087

222,849896

223,746(746)

223,000

(938)

547

(390)

57

(333)

－

(333)

87,405

17,821

105,227

214

105,442

25,900131,342

Other items
Depreciation and
7,413
373
7,787
10
7,798
－
7,798
amortization (Note) 4
Increase in property,
plant and equipment, and
5,447
679
6,127
12
6,139
7
6,146
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 25,900 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.
Current fiscal year (From April 1, 2021 to March 31, 2022)
Reportable segment(Millions of yen)Book valueon theAdjustments consolidated(Note) 2
financialstatements(Note) 3

Processed
Food
Products
operations

Meat
Products
operations

Ham & Sausage Products

66,484－

66,484－

66,484－

66,484

Precooked & Processed
Foods

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

7,519

418

7,937

8

7,945

－

7,945

6,994

381

7,376

－

7,376

0

7,376

Total

Other
(Note) 1

Total

Net sales

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

Other items
Depreciation andamortization (Note) 4
Increase in property,
plant and equipment, andintangible assets (Note) 4―95―

(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.

[Related information]
Previous fiscal year (From April 1, 2020 to March 31, 2021)
1. Information by product and services(Millions of yen)

Sales to externalcustomers

Ham & Sausage
Products

Precooked &Processed Foods

Meat Products

71,16180,60071,087

Other

Total
150

223,000

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, 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.

―96―

[Information on impairment losses on non-current assets by reportable segment]
Previous fiscal year (From April 1, 2020 to March 31, 2021)(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
－

－

－

299

299

Impairment losses of 299 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, 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.

[Information about amortization and balance of goodwill by reportable segment]
Previous fiscal year (From April 1, 2020 to March 31, 2021)
Not applicable.
Current fiscal year (From April 1, 2021 to March 31, 2022)
Not applicable.
[Information on gain on bargain purchase by reportable segment]
Previous fiscal year (From April 1, 2020 to March 31, 2021)
In the Processed Food Products operations segment, the Company recorded gain on bargain purchase of 997 million yen in the fiscal
year ended March 31, 2021 due to the acquisition of shares of Toraku Foods Co., Ltd. in the second quarter ended September 30,
2020.
Current fiscal year (From April 1, 2021 to March 31, 2022)
Not applicable.

―97―[Related parties]
Previous fiscal year (From April 1, 2020 to March 31, 2021)
Not applicable.
Current fiscal year (From April 1, 2021 to March 31, 2022)
Not applicable.
(Per share information)
Previous fiscal year
(From April 1, 2020 toMarch 31, 2021)

Current fiscal year
(From April 1, 2021 toMarch 31, 2022)

Net assets per share

3,036.59 yen

2,969.87 yen

Profit (loss) per share

16.23 yen

(14.88 yen)

(Notes)

1. Diluted profit per share is not stated because there is no dilutive security.
2. We have changed the method of recording distribution expenses as described in “[Notes] (Changes in accounting
policies).” As a result, when comparing to figures not applying the new method, net assets per share for the fiscal
year ended March 31, 2021 increased by 2.76 yen, and profit per share decreased by 0.08 yen.
3. Basis of calculation(1) The basis of calculation of profit (loss) per share is as follows:
Previous fiscal year
Current fiscal year
Item
(From April 1, 2020 to(From April 1, 2021 toMarch 31, 2021)
March 31, 2022)
Profit (loss) attributable to owners of parent (Millionsof yen)

412

(376)

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

Profit (loss) attributable to owners of parent
associated with to common stock (Millions of yen)

412

(376)

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

25,411

25,282(2) The basis of calculation of net assets per share is as follows:
Previous fiscal year
Item
(As of March 31, 2021)
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.

―98―

Current fiscal year
(As of March 31, 2022)

77,75075,489

612

658

(612)

(658)

77,137

74,83025,40225,196

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
rate (%)
yen)
of yen)Category

Repayment deadline

Short-term borrowings

7,890

8,100

0.42

－

Current portion of long-termborrowings

2,657

2,817

0.83

－

Current portion of lease liabilities

905

1,084

2.83

－

Long-term borrowings (excluding acurrent portion)

4,649

4,551

0.78

April 2023 to
September 2028

Lease liabilities (excluding a current
portion)

4,296

4,118

2.68

April 2023 to March
2031

Total

20,39820,672－－(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, 2022.
Over 1 year but
Over 2 years but
Over 3 years but
Over 4 years but
Category
within 2 years
within 3 years
within 4 years
within 5 years(Millions of yen)
(Millions of yen)
(Millions of yen)
(Millions of yen)
Long-term
borrowings
Lease liabilities

2,077

1,482

588

388

960

929

711

535

[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, 2022
(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)

53,684109,204

169,358

218,610(Millions of yen)

273

230

1,156

(229)

(Millions of yen)

178

98

713

(376)

(Yen)

7.03

3.88

28.21

(14.88)

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

2nd Quarter

1st Quarter
(Yen)

7.03

―99―

2nd Quarter(3.16)

3rd Quarter
24.42

4th Quarter(43.27)

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, 2021)

Current fiscal year
(As of March 31, 2022)

AssetsCurrent assets
Cash and deposits

2,898

2,227

Notes receivable - trade
Accounts receivable - trade32
16,60924
16,332Merchandise and finished goods
Work in process

6,338
263

7,558
244

Raw materials and supplies
Short-term loans receivable

4,408
2,535

3,680
3,557

Other
Allowance for doubtful accounts

2,763
(3)

3,223
(1)

Total current assets

35,847

36,847

Property, plant and equipment
Buildings

8,069

8,353

Structures
Machinery and equipment

580
10,058586
11,350

VehiclesTools, furniture and fixtures

9
1,280

6
1,237

Land
Leased assets

10,894124

10,894130

Non-current assets

Construction in progress

661

498

31,67833,056

Intangible assets

2,568

2,058

Investments and other assets
Investment securities

Total property, plant and equipment

13,272

11,678

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

5,337
7,684

5,337
7,135

6,985

4,938

2,585

2,875

Allowance for doubtful accounts

(809)

(821)

Total investments and other assets

35,05531,14569,301

66,260105,149

103,108

Total non-current assets
Total assets―100―

(Millions of yen)Previous fiscal year
(As of March 31, 2021)

Current fiscal year
(As of March 31, 2022)

Liabilities
Current liabilities
Notes payable - trade
Accounts payable - trade96
15,332

85
15,689

Short-term borrowings
Current portion of long-term borrowings

7,210
2,619

7,330
2,779

Lease liabilities
Accounts payable - other

53
4,217

52
3,931

Income taxes payable
Provision for bonuses

－
378

56
320

Other

586

471

30,49530,717Long-term borrowings
Lease liabilities

4,549
110

4,490
103

Deferred tax liabilities
Provision for loss on business of subsidiaries andassociates
Other

2,279

1,914

6

4

247

257

Total non-current liabilities

7,192

6,770

37,68837,488

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

20,05020,05067

66

13,606

13,05035,40034,843

Total current liabilities
Non-current liabilities

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
Total retained earnings
Treasury shares(2,697)(3,066)

Total shareholders’ equity

61,49260,566

5,933

4,982

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

―101―

34

71

5,968

5,053

67,461

65,619105,149

103,108

2) Non-consolidated Statements of Income

Net sales

Previous fiscal year
(From April 1, 2020 toMarch 31, 2021)
151,801(Millions of yen)
Current fiscal year
(From April 1, 2021 toMarch 31, 2022)
139,319

130,900

121,514

Cost of sales
Gross profit
Selling, general and administrative expenses
Operating loss

20,90017,805*1 22,139*1 19,002(1,239)(1,197)

1,813
566

883
564

Non-operating income
Interest and dividend income
Rental income from real estate
Other
Total non-operating income

215

201

2,594

1,648

109
294

98
280

Non-operating expenses
Interest expenses
Rental expenses on real estate
Other

86

46

Total non-operating expenses

490

424

864

26

*3 307*3 123

0

429

1

1

310

555

*4 186*4 340299

929Ordinary profit
Extraordinary income
Gain on disposal of non-current assets
Gain on sale of investment securities
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
Loss on valuation of investment securities－
204

Extra retirement payments
Loss on business of and investment in subsidiaries andaffiliates
Total extraordinary losses

19

*5 3

*5 11

693

410

Profit before income taxes

480

171

Income taxes - current

(68)

(47)

Income taxes - deferred

(29)

14

Total income taxes

(98)

(33)

Profit

579

204

―102―

3) Non-consolidated Statements of Changes in Net Assets
For the previous fiscal year (From April 1, 2020 to March 31, 2021)(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
periodCumulative effects ofchanges in accounting
policies
Restated balance

6,716

21,685387

22,073

1,676

Generalreserve

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

20,05068

13,85065

6,716

21,685387

22,073

1,676

20,05068

13,916

Changes during period
Dividends of surplus(889)

Reversal of reserve for tax
purpose reduction entry of
non-current assets(0)Profit0579

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

－

－

－

－

－

－

(0)

(310)

Balance at end of period

6,716

21,685387

22,073

1,676

20,05067

13,606

Shareholders’ equity
Retained earnings
Total retained
earnings
Balance at beginning of
periodCumulative effects ofchanges in accounting
policies
Restated balance

35,645

Treasuryshares(2,657)65
35,711

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
61,777

3,824

(2)

3,821

65
(2,657)

61,84365,599
65

3,824

(2)

3,821

65,665

Changes during period
Dividends of surplus

(889)

(889)

(889)

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

－

－

－

Profit

579

579

579

(40)

(40)

Purchase of treasury
sharesNet changes in items otherthan shareholders’ equity

(40)

2,109

37

2,147

2,147

Total changes during period

(310)

(40)

(350)

2,109

37

2,147

1,796

Balance at end of period

35,400(2,697)61,492

5,933

34

5,968

67,461―103―

For the current 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
periodCumulative effects ofchanges in accounting
policies
Restated balance

Generalreserve

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

6,716

21,685387

22,073

1,676

20,05067

13,606

6,716

21,685387

22,073

1,676

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
periodCumulative effects ofchanges in accounting
policies
Restated balance

35,400Treasuryshares(2,697)－35,400

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

－
(2,697)61,492

67,461
－

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

(368)

(951)

36

(915)

(915)

Total changes during period

(557)

(368)

(926)

(951)

36

(915)

(1,841)

Balance at end of period

34,843(3,066)60,566

4,982

71

5,053

65,619―104―

[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.

―105―

(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.
(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.
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 distributing 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) Application of consolidated taxation system
The Company applies a consolidated taxation system.

―106―

(4) Application of tax effect accounting related to the transition from a consolidated taxation system to a group tax sharing system
The Company will make a transition from a consolidated taxation system to a group tax sharing system from the next fiscal
year. However, regarding items that have been transitioned to a group tax sharing system established under the “Act for Partial
Amendment to the Income Tax Act, etc.” (Act No. 8 of 2020) and for which a revision of the non-consolidated taxation
system has been carried out pursuant to this transition, the Company has not applied the provisions in Paragraph 44 of the“Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, February 16, 2018), in accordance with thetreatment prescribed in Paragraph 3 of the “Practical Solution on the Treatment of Tax Effect Accounting for the Transition
from the Consolidated Taxation System to the Group Tax Sharing System” (PITF No. 39, March 31, 2020). The amounts ofdeferred tax assets and deferred tax liabilities for these items are based on taxation law as it was before amendment.
The Company plans to apply the “Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing
System” (the Practical Solution No.42, August 12, 2021), that defines the accounting treatment and disclosure methods fornational/regional income taxes and those for tax effect accounting when applying the group tax sharing system, from the
beginning of the next fiscal year.
(5) 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, 2022.
(Significant accounting estimates)
1. Impairment of non-current assets(1) Amount recorded in the financial statements for the fiscal year ended March 31, 2022
The book value of business assets (including common assets): 33,998 million yen(Property, plant and equipment: 31,940 million yen / Intangible assets: 2,058 million yen)
The Company determined that there was an indication of impairment of the business assets due to the continuous recordingof operating loss and reviewed the necessity of recording impairment losses. However, as it was determined that theundiscounted future cash flows would exceed the book value of the business assets, including the common assets, the Company
did not record any impairment losses.
(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, 2022
Deferred tax assets before offsetting with deferred tax liabilities: 1,047 million yen(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.
(Changes in accounting policies)(Application of an accounting standard for revenue recognition, etc.)
The Company began applying the “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan(ASBJ) Statement No. 29, March 31, 2020, hereinafter referred to as the “Revenue Recognition Standard”), etc., at the
beginning of the fiscal year ended March 31, 2022, and recognizing revenue when it transfers the control of promised goods
or services to a customer, based on amounts expected to be received in exchange for such goods or services. As a result, wehave changed an accounting method in which a portion of distribution expenses and promotion expenses, etc., which had
previously been recorded as selling, general and administrative expenses, are now deducted from net sales. In principle, thischange in accounting policies has been applied retrospectively, including the non-consolidated financial statements for theprevious fiscal year. However, the following method that is provided in Paragraph 85 of the Revenue Recognition Standard isapplied:- For contracts under which almost all of revenues had been recognized before the beginning of the previous fiscal year inaccordance with the previous revenue recognition policy, comparative information shall not be revised retrospectively.
As a result, when compared to figures not applying the new Revenue Recognition Standard, net sales decreased by 8,344
million yen, cost of sales decreased by 1,250 million yen, and selling, general and administrative expenses decreased by 7,094
million yen, for the fiscal year that ended March 31, 2021. In addition, both accounts payable - other and accounts receivable trade at the end of the fiscal year ended March 31, 2021 decreased by 1,566 million yen, respectively.
In accordance with the transitional treatment prescribed in Paragraph 89-3 of the Revenue Recognition Standard, notes for“Revenue recognition” related to the previous fiscal year are omitted.
(Application of an accounting standard for fair value measurement, etc.)
The Company began applying the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4,
2019, hereinafter referred to as the “Fair Value Measurement Standard”), etc., at the beginning of the fiscal year ended March
31, 2022, and adopts new accounting policies that are stipulated by the Fair Value Measurement Standard, etc. in accordancewith the transitional treatment prescribed in Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of the“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). This change has no effect on the
non-consolidated financial statements.

―107―

(Change in the method of recording distribution expenses)
The Company has decided to start recording a portion of distribution expenses, which had previously been recorded as
selling, general and administrative expenses, as manufacturing cost from the beginning of the fiscal year ended March 31,
2022. This change was implemented to make our profit and loss management better reflect the real situations (regarding
relevant divisions, items, customers, etc.) of the Company, including the revision of allocation method of distribution
expenses, while the importance of distribution expenses are growing, taking advantage of the update of the enterprise system.
This change in accounting policies has been applied retrospectively, including the non-consolidated financial statements forthe previous fiscal year. As a result, when compared to figures not applying the new accounting policy, merchandise andfinished goods increased by 92 million yen, deferred tax liabilities increased by 28 million yen, and retained earnings
increased by 64 million yen on the non-consolidated balance sheet for the fiscal year ended on March 31, 2021. For the nonconsolidated statement of income for the same fiscal year, cost of sales increased by 3,078 million yen, selling, general andadministrative expenses decreased by 3,075 million yen, operating loss increased by 2 million yen, ordinary profit and profit
before income taxes decreased by 2 million yen, respectively, and profit decreased by 1 million yen. As cumulative effects ofthis change were reflected in net assets at the beginning of the previous fiscal year, the balance of retained earnings brought
forward at the beginning of the period, with the change being applied retrospectively, increased by 65 million yen in thestatement of changes in net assets.
When compared to figures not applying the new method, net assets per share increased by 2.52 yen, and profit per sharedecreased by 0.07 yen for the fiscal year ended March 31, 2021.

―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, 2021)(As of March 31, 2022)
Short-term monetary claims
8,280 million yen
9,788 million yen
Long-term monetary claims
6,985 million yen
4,938 million yen
Short-term monetary obligations
7,303 million yen
7,210 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, 2021)
Guaranteed amount
Guarantee
Details(Millions of yen)
Yahata Food Co., Ltd.
100
Loan guarantees
Total

100

Current fiscal year (As of March 31, 2022)
Guaranteed amount
Guarantee(Millions of yen)
Yahata Food Co., Ltd.
100
Pioneer Foods Co., Ltd.
Total

7

Details
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, 2021)(As of March 31, 2022)
Total amounts in the overdraft agreements
30,800 million yen
30,800 million yen
Borrowing balance
7,210 million yen
7,330 million yen
Difference

23,590 million yen―109―

23,470 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 85%
and 84%, respectively, while those of general and administrative expenses were some 15% and 16%, 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, 2020 to(From April 1, 2021 toMarch 31, 2021)
March 31, 2022)
Distribution expenses
9,033 million yen
7,708 million yen
Salaries and allowances
3,374 million yen
2,900 million yen
Depreciation and amortization
751 million yen
823 million yen
Retirement benefit expenses
253 million yen
164 million yen
Provision for bonuses
197 million yen
159 million yen
Provision of allowance for doubtful accounts(4) million yen
0 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, 2020 to(From April 1, 2021 toMarch 31, 2021)
March 31, 2022)
Operating revenue
39,815 million yen
38,391 million yen
Operating expenses
Amount of transactions other than business transactions

27,502 million yen
608 million yen

23,985 million yen
623 million yen*3. Gain on disposal of non-current assets
Primarily generated from the sales of real estate for rent and other.
*4. The breakdown of loss on disposal of non-current assets are as follows:
Previous fiscal year
(From April 1, 2020 toMarch 31, 2021)
Buildings and structures
161 million yen
Machinery and equipment
18 million yen
Other
5 million yen
Total

186 million yen

Current fiscal year
(From April 1, 2021 toMarch 31, 2022)
283 million yen
54 million yen
2 million yen
340 million yen*5. 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, 2020 to(From April 1, 2021 toMarch 31, 2021)
March 31, 2022)
Provision of allowance for doubtful accounts
3 million yen
11 million yen―110―

(Securities)
Previous fiscal year (As of March 31, 2021)
Shares in subsidiaries and associates do not have market prices and the fair values of those shares are judged to be extremely
difficult to estimate. As a result, their fair values are not stated.
The book values of the shares in subsidiaries and associates whose fair values are deemed to be considerably difficult to estimate
on the balance sheet are as follows:(Millions of yen)Previous fiscal year
Category(As of March 31, 2021)
Shares of subsidiaries

5,281

Shares of associates

55

Total

5,337

Current 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)
Current fiscal year
Category(As of March 31, 2022)
Shares of subsidiaries

5,281

Shares of associates

55

Total

5,337

―111―

(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities
Previous fiscal year
(As of March 31, 2021)

Current fiscal year
(As of March 31, 2022)

883 million yen
383 million yen

758 million yen
587 million yen

465 million yen

465 million yen

477 million yen
248 million yen
208 million yen
116 million yen
232 million yen

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

Deferred tax assets subtotal

3,016 million yen

3,067 million yen

Valuation allowances(2,037) million yen(2,020) million yen

978 million yen

1,047 million yen(2,505) million yen(678) million yen(15) million yen(2,110) million yen(790) million yen(31) million yen(29) million yen(29) million yen(28) million yen－(3,257) million yen(2,962) million yen

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 bonuses
Other

Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-sale securities
Prepaid pension costs
Deferred gains or losses on hedges
Reserve for advance depreciation of non-current assets
Retrospective effect of change in accounting policy oninventories
Total deferred tax liabilities

Net deferred tax assets (liabilities)(2,279) million yen(1,914) million yen(Note) As described in “[Notes] (Changes in accounting policies),” the Company changed its accounting policy. As a result, thefinancial data for the fiscal year ended March 31, 2021 are stated as figures to which the said changes in accounting
policies have been retrospectively applied.
(Changes in presentation)“Denied sales discounts” and “accounts payable on distribution expenses”, which had been recorded as deferred tax assets
during the fiscal year ended March 31, 2021, were consolidated into “denied sales discounts, etc.” starting from the fiscal year
ended March 31, 2022, in order to improve the clarity of disclosure, as both of them are expenses deducted from net sales. The
notes to the previous fiscal year have been reclassified to reflect this change in presentation. As a result, “accounts payable on
distribution expenses” of 221 million yen and “denied sales discounts” of 255 million yen for the fiscal year ended March 31,
2021 were reclassified to “denied sales discounts, etc.” of 477 million yen.
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, 2021)(As of March 31, 2022)
Statutory tax rate
30.6%
30.6 %
Adjustment:
Nondeductible expenses, including entertainment
4.9%
14.6 %
expenses
Nontaxable income, including dividend income(92.3)%(85.6)%Per capita inhabitants tax
13.7%
35.5 %
Changes in valuation allowance
17.8%(14.0)%
Income taxes for prior periods
3.9%(0.8)%
Other
1.0%
0.3 %
Effective tax rate after applying tax effect accounting(Note)(20.4)%(19.4)%The Company changed its accounting policy in the current fiscal year. As a result, the effective tax rate after applying tax
effect accounting and the breakdown of major items that caused the significant difference for the previous fiscal year arepresented with figures to which the new policy is applied retrospectively.

―112―

(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.

―113―4) Annexed detailed schedules[Annexed detailed schedule of property, plant and equipment, etc.](Millions of yen)
Balance at
beginning of
periodIncreaseduring theyear

Decreaseduring theyear

Depreciation
andamortization
during theperiodProperty, plant andBuildings
equipment

8,069

1,088

40

761

8,353

24,799Structures

580

63

0

57

586

3,172

10,058

4,249

41

2,918

11,35042,020

9

3

0

6

6

386

Tools, furniture andfixtures

1,280

81

0

124

1,237

2,119

Land

10,894–––

10,894–

Leased assets

124

53

–

47

130

104

Construction inprogress

661

1,248

1,411

–

498

–

Total

31,678

6,787

1,493

3,915

33,056

72,603

Total

2,568

665

482

691

2,058

1,666

Category

Type of asset

Machinery andequipment
VehiclesIntangible assets(Notes)Balance at
end ofperiodAccumulated
depreciation
andamortization

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:
Kanto Plant

337 million yen

Karatsu Plant

207 million yen

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

Construction in progress

1,588 million yen

Kanto Plant

852 million yen

Yokosuka Plant

533 million yen

Takatsuki Plant

361 million yen

Karatsu Plant

268 million yen

Kanto Plant

234 million yen

2. Major decreases in “Decrease during the year” are as follows:
Construction in progress:

Primarily due to reclassification to buildings, machinery and equipment.

―114―

[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

813

17

3

4

823

Provision for bonuses

378

320

378

–

320

Provision for loss on
6
–
–
1
4
business of subsidiaries andassociates(Notes)1. “Decrease during the year (Other)” in the allowance for doubtful accounts was due to the collection of receivables,etc.
2. “Decrease during the year (Other)” in the provision for loss on business of subsidiaries and associates was due to thereversal of a portion thereof in line with 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.

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

From April 1 to March 31

Ordinary General Meeting of
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, Limited

Transfer office－

Purchasing fee

Free

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

Method 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 or otherunavoidable 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.

―116―

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 73rd fiscal year (from April 1, 2020 to March 31, 2021)
Filed to the Director-General of Kanto Local Finance Bureau on June 28, 2021
(2) Internal Control Report
For the 73rd fiscal year (from April 1, 2020 to March 31, 2021)
Filed to the Director-General of Kanto Local Finance Bureau on June 28, 2021
(3) Quarterly Securities Reports and Confirmation Letters thereof
For the first quarter of the 74th fiscal year (from April 1, 2021 to June 30, 2021)
Filed to the Director-General of Kanto Local Finance Bureau on August 12, 2021
For the second quarter of the 74th fiscal year (from July 1, 2021 to September 30, 2021)
Filed to the Director-General of Kanto Local Finance Bureau on November 12, 2021
For the third quarter of the 74th fiscal year (from October 1, 2021 to December 31, 2021)
Filed to the Director-General of Kanto Local Finance Bureau on February 14, 2022
(4) Extraordinary Report
An Extraordinary Report pursuant to Article 19, Paragraph 2, Item 9-2 (Results of the Exercise of Voting Rights at General
Meetings of Shareholders) of the Cabinet Office Order on Disclosure of Corporate Affairs
Filed to the Director-General of Kanto Local Finance Bureau on June 28, 2021
(5) Share Buyback Reports
Filed to the Director-General of Kanto Local Finance Bureau on September 8, 2021
(6) Amended Shelf Registration Statement (straight bond)
Filed to the Director-General of Kanto Local Finance Bureau on June 28, 2021

―117―

Part II Information about Reporting Company’s Guarantor, etc.
Not applicable.

―118―Independent Auditors’ Report on Consolidated Financial Statements and Internal Control
June 24, 2022
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, 2021 to March 31,
2022, 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, 2022, 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.

―119―

Appropriateness of the judgment of Marudai Food Co., Ltd. as to whether an impairment loss should be recognized on non-current
assets
Details of the key audit matters and the basis for ourdetermination thereof

How the key audit matter was addressed in the audit

Property, plant and equipment of 60,085 million yen andintangible assets of 2,267 million yen were recognized in the
consolidated balance sheets of Marudai Food Co., Ltd. (theCompany) for the fiscal year ended March 31, 2022. As
described in [Notes] “(Significant accounting estimates) 1.
Impairment of non-current assets” to the consolidated financial
statements, the Company’s business assets (including common
assets) include property, plant and equipment of 31,940
million yen and intangible assets of 2,058 million yen, the totalof which accounted for 26.3% of consolidated total assets.
While these non-current assets are depreciated/amortized ina systematic manner, they need to be tested for impairment
whenever there is an impairment indicator. The impairment
test is performed by comparing the total amount of
undiscounted future cash flows that are expected to begenerated from the related asset groups with their book values.
If the recognition of an impairment loss is deemed necessary,the book value is reduced to the recoverable amount, and theresulting decrease in the book value is recognized as an
impairment loss.
Marudai Food Co., Ltd. has faced harsh business conditions
and recorded operating losses for five consecutive fiscal years.
This was due to lowered selling prices from intensifying sales
competition as well as a rise in raw material prices and in costs
for energy and logistics. For this reason, the asset group
including the common assets was reviewed whether torecognize an impairment loss in the current fiscal year. The
undiscounted future cash flows used in the review were
estimated based on the management plan of the Company
formulated by its management. However, there is uncertainty
with the following assumptions: the net sales projected basedon the degree of achievement of the budget and changes in themarket environment for the current fiscal year; the unit pricesof raw materials and the cost reduction effect of capital
investment in the production division, which were projected inconsideration of current market trends. The judgment of the
management on these matters will have a 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 ofMarudai Food Co., Ltd. is of particular importance in the auditof the consolidated financial statements for the current fiscal
year and constitutes a key audit matter.

Our audit procedures related to the appropriateness of thedecision regarding the necessity of recognizing an impairment
loss on non-current assets of Marudai Food Co., Ltd. included
the following, among others.
(1) Assessment of internal controls
We assessed the design and operating effectiveness of theCompany’s internal controls for determining the necessity ofrecognizing an impairment loss on the non-current assets.
(2) Assessment of the reasonableness of estimates of
undiscounted future cash flows
In order to assess the appropriateness of the key
assumptions made by Marudai Food Co., Ltd. in formulating
the management plan, which are the basis for estimating
undiscounted future cash flows, we primarily conducted thefollowing procedures, in addition to questioning personnel incharge of the departments for the bases of these assumptions.
● We conducted the following procedures regarding the
projected net sales in the management plan.
- We analyzed the trend of relationship between
management plans and actual results for prior periods,
monitored the status of selling price revisions during
recent years, and examined the feasibility of selling pricerevision in the future, which is a key assumption for the
management plan.
- We reviewed the consistency of the projected net sales
with the following information: statistic information on
the market trend for products such as hams and sausages
released by the Ministry of Internal Affairs andCommunications and the Japan Ham&Sausage
Processors Cooperative Association; and statistic
information on the market trend for precooked andprocessed foods released by the Japan Ready-made Meal
Association.
● As for the projected unit prices of raw materials in the
management plan, we conducted trend analyses of the unit
prices of the raw materials purchased in the past andreviewed the consistency with statistic information
released by the Agriculture & Livestock Industries
Corporation.
● We assessed the reasonableness of the cost reduction effectof capital investment in the management plan byreviewing the past administrative data on the cost
reduction effect of capital investment.

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.

―120―

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
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, 2022.
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, 2022, 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.

―121―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.
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 audit, audit findings including material weaknesses in internal control subject to disclosure, a follow-up on fixing the
weaknesses, and other 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.
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 above is an electronic version of the original copy of the Independent Auditors’ Report on Consolidated Financial
Statements and Internal Control, and the original report is maintained by the Company (a company that files annual
securities reports).
2. XBRL data are not subject to the audit.

―122―

Independent Auditors’ Report
June 24, 2022
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 74th fiscal year from April 1,
2021 to March 31, 2022, which comprise the non-consolidated balance sheets, the non-consolidated statements of income, the nonconsolidated statements of changes in equity, 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, 2022 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 non-current
assetsThe key audit matter “appropriateness of the judgment of Marudai Food Co., Ltd. as to whether an impairment loss should berecognized on non-current assets,” 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 non-current assets” disclosed in the Independent Auditors’ Report forthe 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
fact.
There is nothing we should report with respect to the details of other contents.

―123―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 above is an electronic version of the original copy of the Independent Auditors’ Report, and the original report ismaintained by the Company (a company that files annual securities reports).
2. XBRL data are not subject to the audit.

―124―

[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 27, 2022

[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)―125―

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 74th fiscal year (from April 1, 2021 to March 31, 2022) 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.

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[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 27, 2022

[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)―127―

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, 2022 (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 reliabilityof overall 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 23 consolidated subsidiaries. Note that the
impact of 4 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.

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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