Annual Securities Report(Report pursuant to Article 24, Paragraph 1 of the Financial Instruments and Exchange Act)The 73rd Fiscal Year
(FromApril 1, 2020 to March 31, 2021)

Marudai Food Co., Ltd.
E00458- 1 -1. This is an English translation of theAnnual Securities Report (“Yukashoken Hokokusho”) pursuant to Article
24, Paragraph 1 of the Financial Instruments and Exchange Act filed via the Electronic Disclosure forInvestors’ Network (“EDINET”) system as set forth in Article 27-30-2 of the same Act. The translation
includes a table of 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 time as the Annual Securities Report.

- 2 -Contents

Page

Annual Securities Report for the 73rd Fiscal Year
Cover Page ............................................................................................................................................................................................................................4
Part I Company Information.............................................................................................................................................................................................5
I. Overview of Company .............................................................................................................................................................................................5
1. Key financial data of reporting company..................................................................................................................................................5
2. History ..............................................................................................................................................................................................................7
3. Description of business .................................................................................................................................................................................8
4. Subsidiaries and other affiliated entities .................................................................................................................................................. 10
5. Employees.................................................................................................................................................................................................... 13
II. Overview of Business........................................................................................................................................................................................... 14
1. Management policy, business environment, issues to address .......................................................................................................... 14
2. Business risks ............................................................................................................................................................................................... 20
3. Management analysis of financial position, operating results and cash flows................................................................................ 24
4. Material contracts, etc................................................................................................................................................................................. 31
5. Research and development activities ...................................................................................................................................................... 32
III. Information about Facilities................................................................................................................................................................................ 33
1. Overview of capital expenditures ............................................................................................................................................................ 33
2. Major facilities.............................................................................................................................................................................................. 33
3. Planned addition, retirement, and other changes of facilities.............................................................................................................. 35
IV. Information about Reporting Company.......................................................................................................................................................... 36
1. Company’s shares, etc................................................................................................................................................................................ 36
2. Acquisition and disposal of treasury shares............................................................................................................................................ 40
3. Dividend policy ........................................................................................................................................................................................... 41
4. Corporate governance ................................................................................................................................................................................ 43
V. Financial Information............................................................................................................................................................................................ 75
1. Consolidated Financial Statements, etc. ................................................................................................................................................. 76
2. Non-consolidated Financial Statements, etc........................................................................................................................................113
VI. Outline of Share-Related Administration of Reporting Company..........................................................................................................126
VII. Reference Information of Reporting Company.........................................................................................................................................127
Part II Information about Reporting Company’s Guarantor, etc..........................................................................................................................128

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 28, 2021

[Fiscal Year]The 73rd fiscal year (from April 1, 2020 to March 31, 2021)[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 Midoricho, 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 Midoricho, 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 Company Information
I. Overview of Company
1. Key financial data
(1) Key financial data of group
Fiscal period

69th fiscal year

70th fiscal year

71st fiscal year

72nd fiscal year

73rd fiscal year

Period of accountMarch 2017

March 2018

March 2019

March 2020

March 2021

Net sales(Millions ofyen)

232,436

239,586

243,030

245,820

234,152

Ordinary profit(Millions of
yen)

5,378

2,820

2,724

3,118

183

Profit attributable to owners of parent(Millions of
yen)

3,284

1,842

1,463

1,653

414

4,884

3,692

314

(122)

3,558

76,29076,98476,09475,056

77,680129,339

131,146

132,626

131,854

133,546

Comprehensive income
Net assets
Total assets(Millions ofyen)(Millions ofyen)(Millions ofyen)

Net assets per share(Yen)

2,885.99

2,998.47

2,971.34

2,930.66

3,033.83

Profit per share(Yen)

124.98

70.39

57.48

65.04

16.31

Diluted profit per share

(Yen)

–

–

–

–

–

Equity ratio

(%)

58.6

58.3

57.0

56.5

57.7

Return on equity

(%)

4.4

2.4

1.9

2.2

0.5

Price earnings ratio(Times)

19.5

36.4

32.7

30.1

105.2

Net cash provided by (used in)operating activities(Millions of
yen)

8,758

3,152

6,695

8,608

7,673

Net cash provided by (used in)investing activities(Millions ofyen)(5,716)(7,554)(7,534)(8,271)(5,388)Net cash provided by (used in)financing activities(Millions ofyen)(3,672)(3,258)

255

(219)

(2,053)

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

16,370

8,709

8,127

8,244

8,476

Number of employees

2,046

2,064

2,023

1,938

2,107

[Average number of part-time
employees not included in the above
numbers][3,638][3,429][3,431][3,225][3,177](Notes)1. Net sales are exclusive of consumption taxes, etc.
2. Diluted profit per share is not stated because there is no dilutive security.
3. 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 71st fiscal year. Accordingly, key financial data for the 70th fiscal year are stated as figures to which the above
accounting standard has been retrospectively applied.
4. 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 of shares was conducted at the beginning of the 69th fiscal year.

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

69th fiscal year

70th fiscal year

71st fiscal year

72nd fiscal year

73rd fiscal year

Period of accountMarch 2017

March 2018

March 2019

March 2020

March 2021

Net sales(Millions of yen)

161,778

166,570

164,746

165,846

160,146

Ordinary profit(Millions of yen)

3,191

417

399

1,443

867

Profit(Millions of yen)

2,283

756

459

1,166

580

Share capital(Millions of yen)

6,716

6,716

6,716

6,716

6,716

132,527,909

132,527,909

26,505,581

26,505,581

26,505,581

Total number of issued shares(Shares)

Net assets(Millions of yen)

69,534

68,63866,79865,59967,397

Total assets(Millions of yen)

107,079

105,116

105,609104,365

106,623

Net assets per share(Yen)

2,645.61

2,690.07

2,626.24

2,580.18

2,653.17

Dividends per share

(Yen)

8.00

8.00

35.00

35.00

30.00

(–)

(–)

(–)

(–)

(–)

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

(Yen)

86.88

28.91

18.05

45.88

22.86

Diluted profit per share

(Yen)

–

–

–

–

–

Equity ratio

(%)

64.9

65.3

63.3

62.9

63.2

Return on equity

(%)

3.3

1.1

0.7

1.8

0.9

Price earnings ratio(Times)

28.0

88.8

104.2

42.6

75.1

Dividend payout ratio

(%)

46.0

138.4

193.9

76.3

131.2

Number of employees

1,068

1,057

1,004

915

875

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

[942]

[889]

[859]

[795]

[767]

Total shareholder return

(%)

113.3

121.1

91.4

96.3

86.8

(Comparison index: TOPIX total
return index)(%)(114.7)(132.9)(126.2)(114.2)(162.3)Highest share price

(Yen)

527

559

2,474

2,130

1,495

1,625

2,327
(545)
1,605
Lowest share price

(Yen)

415

470
(424)

(Notes)1. Net sales are exclusive of consumption taxes, etc.
2. Diluted profit per share is not stated because there is no dilutive security.
3. 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 thehighest and lowest after the share consolidation, with the figures in brackets “( )” showing the highest and lowest before the consolidation.
4. 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 71st fiscal year. Accordingly, key financial data for the 70th fiscal year are stated as figures to which the above
accounting standard has been retrospectively applied.
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 of shares was conducted at the beginning of the 69th fiscal year.

- 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 offormer 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

Overview
The late Mr. Toshiyuki Komori founded a company engaging in manufacturing and sale of fish ham and sausages in Fukushima-ku,
Osaka-shi, and named it the Marudai Food Factory.

June 1958

Moved the factory to Oyodo-ku, Osaka-shi and incorporated it under the trade name of Marudai Food Co., Ltd.

September 1961

Began manufacturing and selling meat ham and sausages.

January 1963

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

February 1963

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

April 1963

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

June 1963

Listed in the Second Section of the Osaka Securities Exchange.

June 1964

Established the Takatsuki Plant in Takatsuki-shi, Osaka.

May 1965

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

September 1968

Listed in the Second Section of the Tokyo Stock Exchange.

October 1969

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

October 1970

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

November 1971

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

September 1972

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

November 1976

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

March 1978

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

September 1978

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

November 1978

Listed on the Frankfurt Stock Exchange.

October 1981

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

June 1989

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

April 1994

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

March 2004

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

April 2009

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 the Company’s consolidated subsidiaries.

October 2009

Marudaifood West Japan Co., Ltd., one of the Company’s subsidiaries, merged Marudaifood East Japan Co., Ltd. and Marudaifood
Tokai Co., Ltd. to be incorporated as Marudaifood Co., Ltd., which is now one of the Company’s consolidated subsidiaries.

October 2011

Acquired Marushin Foods Co., Ltd., headquartered in Chuo-ku, Tokyo, which is now one of the Company’s consolidated subsidiaries.

July 2020

Acquired Toraku Foods Co., Ltd., headquartered in Kobe-shi, Hyogo Prefecture, which is now one of the Company’s consolidated
subsidiaries.

- 7 -3. Description of business
The Group, comprising Marudai Food Co., Ltd. (the Company) and its 28 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 businesssegments.
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., andMarushin 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, 2021
Relationship
Sharecapitalor

Numberof
Ratioofvoting

investmentsin
Companyname

Descriptionofprincipal

Address

concurrent

Loans

Directors/(Millionsof

Statutoryyen)rightsholding
capital(Millions

business

Leaseof
Operationaltransactions(%)
of yen)facilities

Auditors(Consolidatedsubsidiaries)
ProcessedFood
HokkaidoMarudaiFoodCo.,Ltd.

Iwamizawa-shi,Hokkaido

10

100.0

1

–

Contractmanufacturing

No

100.0

–

–

Contractmanufacturing

No

100.0

1

–

Contractmanufacturing

No

100.0

–

–

Contractmanufacturing

No

100.0

1

–

Contractmanufacturing

No

100.0

1

–

Contractmanufacturing

No

1

3,923

Productsoperations
ProcessedFood
Tohoku MarudaiFood Co.,Ltd.

Hanamaki-shi, IwatePrefecture

10
Productsoperations
ProcessedFood

Shin-etsuMarudaiFoodCo., Ltd.

Joetsu-shi,NiigataPrefecture

10
Productsoperations
ProcessedFood

Chubu MarudaiFood Co.,Ltd.

Matsusaka-shi, MiePrefecture

10
Productsoperations

Miyoshi-shi,Hiroshima
Chu-Shikoku MarudaiFoodCo.,Ltd.

ProcessedFood
10

Prefecture

Productsoperations
ProcessedFood

KyushuMarudai FoodCo.,Ltd.

Karatsu-shi,SagaPrefecture

10
Productsoperations
ProcessedFood

Toda FoodsCo.,Ltd.

Toda-shi, SaitamaPrefecture

Productsoperations
Matsumoto-shi, Nagano
AzuminoFoodCo.,Ltd.

100.0

349

Purchasing processedfoods,

ProcessedFood
495

Prefecture

Purchasing processedfoods,
100.0

2

1,800

Productsoperations

Moka-shi,TochigiPrefecture

100

Purchasing processedfoods,
100.0

1

36

Productsoperations
Higashinada-ku,Kobe-shi,
Toraku FoodsCo.,Ltd.
Hyogo Prefecture
PioneerFoodsCo.,Ltd.

Hokkaido

Purchasing processedfoods,
2

–

Yes
amongotheroperations

ProcessedFood

Prefecture

Purchasing processedfoods,
92.7

1

60

Productsoperations

Kan-onji-shi, Kagawa
Prefecture

Purchasing processedfoods,
100.0

1

360

Productsoperations

Takatsuki-shi, Osaka

340

Contractingsaleofprocessed
100.0

1

771

Productsoperations
Marudaifood Co.,Ltd.

Nishinari-ku, Osaka-shi

80

ProcessedFood- 10 -

Yes
amongotheroperations

ProcessedFood
HornmeierCo., Ltd.

Yes
amongotheroperations

ProcessedFood
50

No
amongotheroperations

63.1

37

YahataFood Co.,Ltd.(Note5)

1,500

Productsoperations

Tanabe-shi,Wakayama
Umeya Co.,Ltd.

2

ProcessedFood
360(Note5)Purchasing processedfoods,
100.0

Productsoperations

Kyogoku-cho,Abuta-gun,Yesamongotheroperations

ProcessedFood90

Yesamongotheroperations

ProcessedFood
MarushinFoods Co.,Ltd.

Yesamongotheroperations(11.7)

No
foods

100.0

1

–

Sellingprocessedfoodsandmeat

YesProductsoperations

products,amongotheroperations

Meat Products
operations
Meat Products
MarudaiMeatCo., Ltd.(Notes3and6)

Ota-ku,Tokyo

30

Sellingmeatproducts,among
100.0

–

–

operations
Meat Products
Meat SupplyCo.,Ltd.

Takatsuki-shi, Osaka

30

Supplyingrawmaterials,among
100.0

–

350

operations

Takatsuki-shi, Osaka

20

Yesotheroperations

Meat Products
MarbestTradingCo.,Ltd.(Note3)

Yesotheroperations

Purchasing meat, amongother
100.0

1

–

operations

Yes
operations
Offeringinsuranceagency

MarudaiServiceCo.,Ltd.

Takatsuki-shi, Osaka

95

Other

100.0

1

497

Yes
services,amongotherservices

and nineothercompanies(Associate accountedforusingequitymethod)
Lop Buri,the Kingdomof

330,000 thousand

ProcessedFood

BetagroMFDeliCo., Ltd.

20.0
Thailandbaht

Productsoperations- 11 -––

Purchasing processedfoodsNo(Notes)

1.
2.
3.
4.
5.
6.

Names of the operations in “Description of principal business” are the same as those stated in the segment information.
The ratio of voting rights holding indirectly is shown in parentheses “( )” in “Ratio of voting rights holding.”
These companies with (Note 3) fall under the category of specified subsidiaries.
None of the above companies have filed Securities Registration Statements or Annual Securities Reports.
The Company guarantees the loans to these companies with (Note 5).
Net sales of Marudai Meat Co., Ltd. (excluding inter-segment net sales among consolidated subsidiaries) accounted for more than 10% ofconsolidated net sales.
Key profit/loss information:

1) Net sales

39,286 million yen

2) Ordinary profit

165 million yen

3) Profit

104 million yen

4) Net assets

966 million yen5) Total assets

4,553 million yen- 12 -

5. Employees(1) Information about group
As of March 31, 2021
Name of business segment

Number of employees
1,588

Processed Food Products operations(2,760)405

Meat Products operations

(358)
7

Other

(23)
107

Company-wide (shared)

(36)
2,107

Total
(Notes)(3,177)

1. The number of employees refers to that of full-time employees, excluding those transferred to companies outside the Group.
2. The average number of temporary employees during the current fiscal year is shown in parentheses “( )” in “Number of employees.”
3. The number of employees increased by 169 from the end of the previous fiscal year. This is mainly attributable to the inclusion of Toraku Foods Co.,
Ltd. in the scope of consolidation.

(2) Information about reporting company
As of March 31, 2021
Number of employees

Average age (Years old)
875
(767)

Average length of service (Years)

44.0

yen)

21.3

Name of business segment

6,170

Number of employees
747

Processed Food Products operations

(721)
21

Meat Products operations

(10)
–

Other

(–)
107

Company-wide (shared)

(36)
875

Total
(Notes)Average annual salary (Thousands of(767)

1. The number of employees refers to that of full-time employees, excluding those transferred from the Company to other 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 “Number of employees.”(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.

- 13 -

II. Overview of Business
1. Management policy, business environment, issues to address
The forward-looking statements included in the following description are based on our judgment as of March 31, 2021.
(1) The Company’s 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 the blue. If you
plow ahead focusing on your duty and persevering in your efforts every day, Heaven will then notice yoursincerity and bring you great results.
(The words by Mr. Toshiyuki Komori, the founding president)

2) Management philosophy:3) Management policy and vision:

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

4) Slogan:

Make it more delicious, enjoyable, and edgy5) Values:- 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 obtain high 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:

We will strengthen our management foundation and expand ouroperations with the aim of enhancing the corporate value.

Toward employees:

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

(2) 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) 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
2) Saturated processed food market in terms of volume, or rather a shrinking trend of the market- Stronger purchasing power of retailers and wholesalers, fiercer competition among food manufacturers3) Increases in dual-income households and the ratio of women in the working-age population- Changes in lifestyles and consumption behavior
4) Expansion of e-commerce, rapidly advancing drug stores- An increase in logistics costs, a wider consumer trend toward lower-priced goods5) Animal epidemics both in Japan and abroad, U.S.-China trade friction- A rise in the raw material prices for meat production, and unstable market prices
Since the processed food market, particularly the ham and sausage market, has been saturated, which is the Group’s core segment, the purchasing power ofretailers and wholesalers are growing stronger. This situation is causing fiercer competition among food manufacturers. In addition, costs for raw materials, humanresources, logistics, etc. continue to rise, posing a headwind to our management environment.

- 14 -

(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 structural changes in Japan’s consumption system caused byits dwindling and aging population, a rise in costs for human resources, logistics, etc. against a backdrop of a chronic labor shortage, and fluctuations in raw material
prices for meat driven by animal epidemics in Japan and abroad, among other factors. Amid the worsening COVID-19 pandemic, concerns remain over how thesefactors may affect our economy overall.
Under this environment, we started our 3-Year Medium-Term Management Plan in April 2020 to resolve our management issues. However, since we found it
almost impossible to reasonably 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, 2021 through March 31, 2024 after recalculating and reviewing numerical targets. By achieving the targets set by the said Management
Plan, the Marudai Food Group will continue to grow and enhance its corporate value. To do so, we will seek to be a company whose social values are widely andthoroughly understood, work on ambitious initiatives step by step, and never stop taking up challenges while having a sense of urgency and trying not to miss a good
opportunity.
(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, 2021 through March 31, 2024 stipulates its basic policy as follows:
1) Strategy for gaining an advantage in product competition
To differentiate and centralize ourproductsand reduce costs as part of ourvalue-added policy, we will carry out the marketing mix that takes into consideration
products, prices, locations, and sales promotion from the consumer perspective. By doing so, we will develop more attractive products. Our efforts will also
include strengthening our production technology by taking up new manufacturing methods and materials, among others.
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) Strategy for diversification
We will evolve the Group’s management further to address environmental changes and also examine the possibility of developing new businesses to launch
new product categories in response to changes in the social environment.
4) Developing human resources and implementing the work style reform
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 accordance with career plans.
5) Strategy for improving our corporate value
Our aim is to achieve higher social credibility including our sustainable growth and medium-term earnings. To do so, we will strengthen our corporate
governance and risk management, as well as improve our product quality by obtaining more FSSC 22000 and ISO 22000 certifications. We will also enhance
the quality of our employees as well as that of our products. Our efforts will encompass 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.
(5) Growth strategy
1) Organizational changes
A. Shift from a type of organization based onfunctions to a system based on department of → Clarify where responsibility lies by increasing the degree of financial independence
operations
B. Strengthen marketing→

The Sales Dept., the Production Dept., and the Marketing Dept. work together as one teamto strengthen product sales power

2) Structural reforms
A. Streamline the Company on a nonconsolidated basis- Improve the efficiency of thesales department- Improve the efficiency of backoffice operations

B. Reduce logistics costs- Make efficient use of human resources→- Expand businesses of the Group companies- Increase the load-carrying efficiency to reduce the number of vehicles used for shuttle services
on main routes 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 having a logistics center again- 15 -

C. Improve the efficiency at core plants- Takatsuki Plant: 4,100 million yen (planned to be completed in December 2021, with

manufacturing ham and sausages

product shipping started gradually as of June 2021)(Figures represent planned amounts of- Karatsu Plant: 1,100 million yen (planned to be competed in March 2022)

investment)- Kanto Plant: 3,500 million yen (planned to be competed in September 2022)

3) 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 and manufacturing processes, too. Aiming at high productivity based on
reduced costs, we will go ahead with efficient capital expenditure and improvement initiatives.
The below shows each segment’s strategy by category.
A. Processed Food Products operations(A) The Ham & Sausage Products department[Creation of new value]
a. New technology[Specific strategies]- Make the operation of a production line nonstop- Implement the marketing mix to address diverse consumer needs- Apply a cutting-edge technology- Work to develop a microwavable product that is delicious but easy to- Study next generation’s meat substitutes madeb. New materials

from vegetables- Facilitate the shift to environment-friendly packaging materials, such

- Develop materials with reduced environmental
impactc. New
manufacturingmethods(B)

prepareas paper trays with a reduced environmental impact- Develop and produce safe and healthy products by reviewing the- Strengthen an initiative to reduce food additives- Develop a manufacturing method to keep

use of food additives- Improve our production technology and cost competitiveness byadopting new manufacturing methods and efficient facilities

products fresh for a longer time

The Precooked & Processed Foods department[Market development][Specific strategies]- Expand the range of retort productsa. Groceries- Develop products that satisfy consumer- Develop cooking material products thatcan be readily used on a daily basis- Propose products that are easy to prepare,c. Daily food products“Sundubu,” for which we have extended production lines- Increase facilities for manufacturing dessert and beverage products

demand for stockpiling
b. Frozen foods- Increase soup items such as retort-pouch instant curries andconvenient, and delicious (Western dishes,- Increase sales of next generation’s meat substitutes made fromvegetables, targeting health-conscious consumers- Increase sales of value-added products that have grilled or friedmaterials containing ham and sausages- Propose new items by further developing precooked and processedsingle-bowl meals, etc.)

food products- Increase the lineup of cold chain products, which can keep for ad. Products forconvenience stores- Focus on long shelf-life products(Development of frozen food products
and top sealed products)

long time and excel in convenience- Scale up the size of, and strengthen the foundation of, the Group
companies by launching new businesses and through mergers andacquisitions

B. Meat Products operations[Strengthening our capabilities to procure raw materials][Specific strategies]- 16 -

a. Increase the procurement
ratio of our own imports
b. Expand the domestic
production businessc. Import processed foodproducts from overseas- Strengthen the relationship with
suppliers- Establish our value chain to focus on handling our own original
brands and reduce costs- Increase the volume of the livestock- Strengthen the meat processing business, which handles pre-packproducts and sliced meat products

we deposit to be raised- Expand the export and import business of processed food products- Respond to reduced or lifted tariffs- Strengthen the foundation of the Group companies- Focus on sales of the products for the restaurant industry- 17 -

(6) Initiatives for sustainability1) Development of human resources and implementation of the work style reform
A. Acquire the organizational capabilities that give us a competitive advantage- Manage personnel training programs with a focus on diverse values and specialties
B. Respond to a labor shortage caused by diversified recruiting channels and intensified recruiting competition- Promote the work style reform- Promote diversity and launch an initiative to enhance opportunities for women
C. Strengthen health management- Formulated the Marudai Food Group Health Management Declaration to promote healthy and productive management.As a result, we obtained the2021 Health and Productivity Management certification under the large enterprise category from the Ministry of Economy, Trade and Industry.
- Expanded the provision of support for employees with children so that they can continue to work while raising children, 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 (the research and development of plasmalogen, a material that can support the brain function);
supply the health-conscious products, such as KARUSHIOH products, which are certificated by the National Cerebral and Cardiovascular Center.
2) Strategy for improving our corporate value
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 Marudai Food Group thoroughly understand the Marudai Food Group’s Code of Conduct, and carry out a compliancetraining program every month for all the employees.
B. Initiatives to address ESG issues and achieve SDGs
(A) Adaptation to changing climate and mitigation of its impact- Set the Environmental 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 gases generated by logistics or transportation by encouraging the transport modal shift, etc.
(B) Contribution to realizing a recycling society- Promote the reduction of waste by using lightweight wrapping and packaging materials- Promote a 3R strategy—Reduce, Reuse, and Recycle—for wrapping and packaging materials- Promote the recycling of food waste into livestock feed or manure- Promote the adoption of environment-friendly wrapping and packaging materials(C) Initiatives to reduce food waste- Promote the reduction and reuse of food waste- Promote dietary education(D) Aid for poverty and hunger- Provide support for children’s cafeterias (by supplying food products)- Develop products using meat substitutes (soy meat product “Daizu Life,” literally meaning “soy life”)(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 food market structure. Based on thisestimation, the industry forecasts that while competition among food manufacturers is growing fiercer due to consumers’ budget-consciousness driven by theirconcerns over uncertain future, consumers and the market are pushing the manufacturers to work harder to produce safer and healthier products.
Worsening situations of the COVID-19 pandemic led to state of emergency and quasi-emergency declarations, forcing people to stay at home for a longer timethan before and creating the persistent atmosphere of self-restraint. As a result, we expect a decrease in net sales of products mainly for the restaurant industry andconvenience stores in urban areas, and part of commercial food products, as well as reductions in the demand for gift products. On the other hand, stay-at-homedemand and consumption led us to expect a rise in the demand for eat-in and ready-to-eat meals. Given this, we project a rise in sales of food products at supermarkets,
drugstores, discount stores, and through the e-commerce.
Meanwhile, we expect more uncertainty and instability in the outlook for the raw material market because of concerns over reduced imports caused by thesuspension 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 aperiod from April 1, 2021 through March 31, 2024. At the same time, we will execute our social mission and fulfill our responsibilities to each of our stakeholders
by monitoring when the pandemic will be contained and appropriately responding to the economic trend and private consumption once the pandemic ebbs.

- 18 -

(8) Objective financial data to determine achievement status of management targets
Under our first 3-Year Medium-Term Management Plan starting on April 1, 2020 through March 31, 2023, we were going to use net sales, operating profit
margin, operating profit as objective financial data. However, since we found it almost impossible to reasonably 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, 2021 through March 31, 2024 after recalculating andreviewing numerical targets.
We have set the target of achieving consolidated net sales of 270,000 million yen, consolidated operating profit margin of 1.6%, and consolidated operating profitof 4,400 million yen as our financial data for the fiscal year ending March 31, 2024, the final year of the said Management Plan.
We expect our consolidated earnings performance for the fiscal year ending March 31, 2022 to be as follows: net sales of 230,000 million yen, operating profit
margin of 0.9%, and operating profit of 2,000 million yen. This estimation is based on our presumption that the management environment will remain severe due tothe COVID-19 pandemic into the first half of the fiscal year ending March 31, 2022 at earliest, and the economy will then start picking up gradually in the second
half. We find it almost impossible to reasonably forecast when the pandemic will be contained and how the economy and private consumption will then react. Ourestimation is that the pandemic could still have an enormous impact on our operations. Since earnings outlook is based on our estimation of the impacts deemed
possible when we made this estimation, we may need to announce revisions depending on the development of the situation.

- 19 -

2. Business risks
Of the matters stated in the sections of Overview of Business, Financial Information, etc. in thisAnnual Securities Report, management recognizes that the following
matters may have a material impact on the financial condition, results of operations, and cash 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, 2021.
(1) Financial risks

Impairment risk

Customers’

Risk details

Major measures- Impairment risk in non-current assets on a non-consolidated
basis; showing a sign of impairment with operating deficit
continuing for four fiscal years in a row- A subsidiary or an equivalent acquired by us unable to achieve
operational targets- Risk of fluctuations in the market value of assets, such as realestate or securities- Unexpected bankruptcy of customers- Formulate and implement sufficient measures to increase future cashflows
- Provide follow-up support to create synergy after mergers andacquisitions- Make use of or sell idle assets- Gather information, manage credit, preserve account receivables, etc.

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

fluctuation risk
Risk ofinfectious
diseases andnatural disasters
Risk ofretirement
benefitobligations

Worsening situations of the COVID-19 pandemic led to state of emergency declarations again in some prefectures, damping the outlook for when the pandemic
will be contained. In this situation, while the demand for eat-in and ready-to-eat meals is growing, we are expecting a reduction in sales of the products mainly for therestaurant industry and convenience stores in urban areas. There are also concerns over the impact of reduced imports caused by the suspension of production atoverseas suppliers and over price fluctuations.
The Group, a comprehensive food manufacturer, places a top priority on stably supplying consumers with safer and healthier food products. We are determined toestablish a thorough management system to prevent infection so that we will not face the suspension 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 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.
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 iscontained)
Overseas travel, business trips in Japan, meetings, contact with large numbers of the general public, lunch or dinner parties, 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 Directors of the Company,
addresses infection risks; swiftly gathers and communicates information; and makes decisions and gives directions without delay.

- 20 -

(2) Materiality items
Risk details

Major sustainability measures- Occurrence of social disorder or an unpredictable accident such as a

- Increase the number of the FSSC 22000 or ISO22000 certified facilities based on the HACCP

quality issue affecting the entire society
Ensuring safetysystem- Effect of the damage caused by rumors- Establish a strict quality management system by the quality assurance department- Jeopardized social credibility due to complaints about product quality,- Strengthen our efforts to secure safety and improve product quality as well as to prevent theamong others

occurrence of products of poor quality or defects- Restriction on operations when laws and regulations are changed- Comply with all applicable laws and regulations, including the Food SanitationAct, theAct on
JapaneseAgricultural Standards (the JASAct), and the Food LabelingAct, among others, all of

Response to laws

which are related to food safety, in addition to the laws and regulations related to theand regulations

environmental protection and recycling- Establish a system to thoroughly comply with relevant laws and regulations in close cooperation
between each responsible department and the legal department- Possible loss of our growth opportunity due to the delay in catching up- Strengthen our capabilities to swiftly respond to the market needs through our food products

Changes inwith diverse values and changes in the consumer lifestyles- Implement appropriate methods, from the consumer perspective, for supplying products,

consumer lifestyles
providing services, and communicating information
Sustainable raw
material
procurement- Delay in responding to social and environmental issues at each stage of
our supply chain- Comply with relevant laws and regulations and promote fair trading and business practices- Promote the operations aimed at mutually sustainable business development with suppliers- Risk of climate change and geopolitical risk
- Depletion of food resources- Improve manufacturing methods so that they will contribute to reducing food waste in the- Jeopardized social credibility due to delay in taking measures to reduce

manufacturing process

Reduction of food
food waste- Make the shelf life of products longer to reduce the food loss resulting from discarding foodwaste
products before they reach consumers, decrease defective products returned from retailers or
consumers- Increased production costs resulting from delay in taking measures to- Reduce environmental footprint by promoting energy saving

Adaptation to
reduce greenhouse gas emissions- Strengthen our efforts to reduce the amount of energy used for production by introducing thechanging climate- Jeopardized social credibility due to delay in taking measures against

facility using less energy or an equivalentand mitigation of its
global warming- Strengthen our efforts to reduce the greenhouse gasses generated by logistics or transportation by

impactencouraging the transport modal shift, etc.
- Increased production costs resulting from delay in taking measures to- Promote an initiative to reduce waste by using lightweight wrapping and packaging materials

Contribution to
reduce waste- Promote a 3R strategy—Reduce, Reuse, and Recycle—for wrapping and packaging materials

realizing a recycling- Jeopardized social credibility due to delay in shifting to using- Promote the recycling of food waste into livestock feed or manuresocietyenvironment-friendly packaging materials- Promote the adoption of environment-friendly wrapping and packaging materials- Suspension of production caused by droughts, floods, and deteriorating- Conserve and maintain wastewater treatment facilities

Water conservationwater quality- Promote environmental conservation through an activity to forest hills or mountains- Needs to acquire organizational capabilities that give us a competitive- Strengthen the management of personnel training programs with a focus on diverse values andThriving of talentadvantage

specialties

with diverse- Alabor shortage and a rise in costs caused by diversified recruiting- Promote the work style reformbackgrounds
channels and intensified recruiting competition- Promote diversity and launch an initiative to enhance opportunities for women- 21 -

- An increase in risks that threaten the corporate management due to a

- Educate all the employees of the Marudai Food Group about the Marudai Food Group’s Codefragile governance system

of Conduct to make them thoroughly understand it- Impacts on our business continuity brought by delay in establishing a risk

- Strengthen our corporate governance system by establishing the Risk Management

management system

Committee, the Corporate Ethics Committee, the Compliance Committee, and the- Confusion that affects organizational management or a reduction in

Nomination and Remuneration Committee.

Strengthened
operational profitability, caused by unstable political, economic, or social- Establish the Marudai counseling line (a whistleblowing system)

situations, such as a financial crisis or trade war- Introduce a new system to visualize data

corporate
governance- Reduced competitiveness resulting from the incapability of catching up
with digital transformation- Strengthen the information security by formulating ITmanagement and operation rules- Reduced competitiveness resulting from a fragile ITmanagement- Manage intellectual property risk

system
- Impacts on operations caused by intellectual property risk
- Jeopardized social credibility due to delay in taking measures for a healthmanagement system- Promote an initiative aimed for health management- Enhance a system that provides stress checkups and monitors mental health conditions- Obtained the 2021 Health and Productivity Management certification under the large enterprise
category from the Ministry of Economy, Trade and Industry.
- Expanded the provision of support for employees with children so that they can continue toStrengthened healthwork while raising children, and obtained the certification under the Regulation for Enforcement

managementof theAct toAdvance Measures to Support Next-Generation Child-Rearing, or the Kurumin
certification program.
- Address an issue of a dwindling and aging population (the research and development ofplasmalogen, a material that can support the brain function); supply the health-conscious
products, such as KARUSHIOH products, which are certificated by the National Cerebral andCardiovascular Center.

- 22 -

- Other initiatives for sustainability
1) Social contribution activities
We offer support so that everyone can stay healthy both physically and mentally through our programs for dietary education and sports.
A. Dietary education

Major measures

Healthy body and mind begin with proper diet. Marudai- Engage in social contribution activities with the theme of Better Diet

Food will contribute to society through a wide range of- Directly communicate to consumers by participating in a dietary education event or

food activities.

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 that indicates thecompany supports employees raising children

B. Communication through sports
Marudai Food views sports as one of the communication
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 FutureActive Athletes

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 by humans, we

Major measures- Endorse the objectives of Fun to Share, a campaign by the Ministry of theEnvironment to address climate change

will contribute to the development of society through- Implement the Cool Biz and Warm Biz campaigns

environment-friendly operations.

- Use environment-friendly materials for sales at stores and for other purposes- Introduce a cogeneration system- Work on the transport modal shift- Engage in an environmental conservation activity in Hokkaido- Engage in an activity making the environment more beautiful

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

Major measures- The Marudai Satoyama activity to forest hills or mountains (We entered into acontract with Osaka Prefecture and Takatsuki-shi, among others, under theirAdopta-Forest programs)- The Marudai Nasu Forest Satoyama activity to grow woodland at our private land
in Nasu, Tochigi Prefecture- The Marudai Miyoshi Forest tree planting activity at our private land in Miyoshishi, Hiroshima Prefecture- 23 -

3. Management analysis of financial position, operating results and cash flows(1) Overview of operating results, etc.
An overview of the financial position, operating results, and cash flows (“operating results, etc.”) of the Group (the Company, its consolidated subsidiaries, andassociate accounted for using equity method) for the fiscal year ended March 31, 2021 is as follows:
1) Financial position and operating results
During the fiscal year ended March 31, 2021, the Japanese economy initially showed signs of recovery, but the conditions remain severe due to the impact
of COVID-19. With the repeated issuance of state of emergency declarations and the uncertain prospects for the containment of COVID-19, the overall outlook
for the economy remains unpredictable.
The industry in which the Marudai Food Group operates is facing a major change in lifestyles and the market environment, with rising demand for eat-in
and ready-to-eat meals amid weak demand for eating out, mainly influenced by consumers refraining from going out due to worsening COVID-19 pandemic,
and the response to new consumption trends is needed. In addition, as price competition is becoming even more intense against the backdrop of consumers’persistent budget-consciousness, conditions continue to be severe. Regarding the meat market, domestic beef prices fell in the first half of the fiscal year due toa decline in demand caused by requests to refrain from going out, but from the second half of the fiscal year, they exceeded the previous year’s levels. Domestic
pork prices also exceeded the previous year’s levels, reflecting increased demand for home consumption. In addition, due to unstable supplies from overseas
suppliers, imported beef prices turned from high prices in the first half of the fiscal year to prices below the previous year’s levels, and then began to rise again in
the second half. The outlook for the meat market is difficult to predict, as imported pork prices have repeatedly fluctuated.
In this situation, the Group, a comprehensive food manufacturer that supplies consumers with safer and healthier food products, has pushed ahead with its
corporate operations, aiming to be a company whose own value is thoroughly recognized in society.
As a result, our consolidated financial position and operating results for the fiscal year ended March 31, 2021 were as follows:
A. Financial position
Consolidated total assets as of March 31, 2021 were 133,546 million yen, an increase of 1,692 million yen from the end of the previous fiscal year.
Consolidated liabilities were 55,866 million yen, a decrease of 931 million yen from the end of the previous fiscal year. Consolidated net assets were 77,680
million yen, an increase of 2,623 million yen from the end of the previous fiscal year.
B. Operating results
Consolidated net sales during the fiscal year ended March 31, 2021 were 234,152 million yen, a decrease of 4.7% year on year, consolidated operating
loss was 330 million yen, compared to consolidated operating profit of 2,617 million yen for the previous fiscal year, consolidated ordinary profit was 183
million yen, a decrease of 94.1% year on year, and consolidated profit attributable to owners of parent was 414 million yen, a decrease of 74.9% year on year.
Operating results for each segment are as follows:(Millions of yen)

Processed Food Products

Fiscal year ended

Fiscal year ended

Fiscal year ended

March 31, 2019

March 31, 2020

March 31, 2021

Year-on-year

Year-on-yearchange (amount)change (%)

169,387

170,648

161,266(9,382)(5.5)%

80,95478,85475,965(2,888)(3.7)%

88,433

91,79485,300(6,494)(7.1)%

73,48175,02472,734(2,289)(3.1)%

Other

161

147

150

3

2.4%

Net sales

243,030

245,820

234,152(11,668)(4.7)%

781

1,668

(935)

(2,603)–

Ratio to net sales

0.5%

1.0%

(0.6)%(1.6)%–

Meat Products operations

1,389

900

547

(352)

(39.2)%

Ratio to net sales

1.9%

1.2%

0.8%

(0.4)%

–

Other

82

48

57

8

17.7%

Segment income

2,253

2,617

(330)

(2,947)

–

0.9%

1.1%

(0.1)%(1.2)%–

operations
Ham & Sausage
Products
Precooked & Processed
Foods
Meat Products operations

Processed Food Products
operations

Ratio to net sales- 24 -

(Processed Food Products operations)
The Ham & Sausage Products department strove to expand sales through various campaigns, in response to rising demand for eat-in meals due tothe impact of COVID-19, with a focus on mainstay products such as “Kunseiya-Ripened Pork Sausage” and “Itsumo shinsen - Always Fresh LoinHam.” In addition, we also worked to expand sales of for home consumption products by introducing new products, including “Kunseiya-Ripened
Pork Sausage: White,” and by proposing meals suited to various occasions. On the other hand, sales of some commercial food products were sluggish
due to the impact of weak demand for eating out, and sales of midyear and year-end gifts declined owing to the overall decline in the market as well as
the effects from government’s stay-at-home requests related to COVID-19.As a result, sales in the Ham & Sausage Products operations decreased by
3.7% year on year.
In our Precooked & Processed Foods department, amid severe fluctuations in consumption due to the COVID-19 pandemic, the trend towardeating at home and the growing demand for products for stockpiling led to sales expansion through sales promotions centered on retort products, suchas the “Bistro Club Beef Curry” series. In addition, sales of the “Sundubu” series increased due mainly to the introduction of new products, including“Shrimp Sundubu,” and efforts to capture a new customer base through SNS-based sales promotion. On the other hand, government’s stay-at-homerequests and increased working from home adversely affected sales of products for convenience stores, mainly in urban areas. In addition, sales ofbeverages containing black tapioca decreased significantly due to the entry of new competitors.As a result, sales in the Precooked & Processed Foods
operations decreased by 7.1% year on year.
As a result, sales in the Processed Food Products operations segment amounted to 161,266 million yen, a decrease of 5.5% year on year. Segment
loss of 935 million yen was recorded, which was significantly below the previous fiscal year (segment income of 1,668 million yen in the same periodof the previous fiscal year), owing mainly to lower sales, lower prices due to intensified sales competition, and higher raw material prices.
(Meat Products operations)With regard to beef, amid the growing impact of COVID-19, overall beef sales were below the previous year’s level, mainly resulting from sluggish
sales of imported beef to restaurants, despite increased sales of domestic beef to mass retailers. Regarding pork, sales of pre-pack products increased,but overall pork sales fell below the previous year’s level due mainly to lower supplies from overseas suppliers and a delayed recovery in demand foreating out. Sales of chicken were lower due to an increase in domestic inventories of imported products and a consequent decline in unit prices.
As a result, sales in the Meat Products operations segment decreased by 3.1% year on year to 72,734 million yen. Segment income decreased by
39.2% year on year to 547 million yen, due mainly to weak demand for eating out.
(Other)Sales in Other segment increased by 2.4% year on year to 150 million yen, and segment income increased by 17.7% year on year to 57 million
yen.
(Impact of the COVID-19 pandemic)
With the repeated issuance of state of emergency declarations for the purpose of preventing the spread of COVID-19, the fiscal year ended March
31, 2021 saw people in Japan refrain from going out, taking part in events, and crossing prefectural borders. It also saw them forced to reconsider theway of working, with some switching to teleworking. Since the restaurant industry is still struggling, part of commercial food products posted sluggish
net sales. In addition, increased number of people working at home led to a decline in net sales of the products for convenience stores in urban areas,among other products. On the other hand, since the demand for eat-in and ready-to-eat meals grew, we saw an increase in net sales of the ham andsausage products for home consumption and retort products for stockpiling. The Meat Products operations segment posted a rise in net sales of the
products to mass retailers and pre-pack 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.

- 25 -

2) Cash flows(Millions of yen)
Fiscal year ended March 31,

Fiscal year ended March 31,

2020

2021

Changes

Net cash provided by (used in) operating activities

8,608

7,673

(934)

Net cash provided by (used in) investing activities(8,271)(5,388)2,883

Net cash provided by (used in) financing activities(219)(2,053)(1,833)

Net increase in cash and cash equivalents

117

231

114

Cash and cash equivalents at end of period

8,244

8,476

231

Net cash provided by (used in) operating activities increased by 7,673 million yen due mainly to the recording of depreciation.
Net cash provided by (used in) investing activities decreased by 5,388 million yen due mainly to the purchase of non-current assets to expand, streamline,
and improve production facilities and to improve product quality, and the purchase of shares of subsidiaries resulting in change in scope of consolidation.
Net cash provided by (used in) financing activities decreased by 2,053 million yen due mainly to decreases in interest-bearing liabilities and payment ofdividends.
As a result, consolidated cash and cash equivalents at end of period as of March 31, 2021 increased by 231 million yen from the end of the previous fiscal
year to 8,476 million yen.
3) Production, orders received, and sales
A. Production results
Production results by segment for the fiscal year ended March 31, 2021 on a consolidated basis are as follows:
Name of business segment

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

Processed Food Products operations

206,507(8.1)

Meat Products operations

13,401

2.2––

219,908

(7.5)

Other
Total
B. Orders received
The Group produces based on our projection made from the consumer trend forecast.
C. Sales results
Sales results by segment for the fiscal year ended March 31, 2021 on a consolidated basis are as follows:
Name of business segment

Sales (Millions of yen)

Year-on-year change (%)

Processed Food Products operations

161,266(5.5)

Meat Products operations

72,734

(3.1)

150

2.4

234,152

(4.7)

Other
Total
(Notes)

1. Transactions between segments are offset and eliminated.
2. The amounts above are exclusive of consumption taxes, etc.

- 26 -

(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 as of March 31, 2021.
1) Details of the recognition, analysis, and examination of the status of operating results, etc. for the fiscal year ended March 31, 2021
A. Operating results(Net sales)
We saw decreases in consolidated net sales of the products for convenience stores mainly in urban areas as well as of commercial food products for eatingout demand due mainly to the effects of stay-at-home requests amid the worsening COVID-19 pandemic. This situation adversely affected the Processed
Food Products and the Meat Products operations, with consolidated net sales amounting to 234,152 million yen, a decrease of 4.7% year on year. By segment,
net sales of the Processed Food Products operations were 161,266 million yen, a decrease of 5.5% year on year, net sales of the Meat Products operations
were 72,734 million yen, a decrease of 3.1% year on year, and net sales of Other were 150 million yen, an increase of 2.4% year on year.
(Cost of sales, gross profit)
Consolidated cost of sales fell by 3.0% year on year to 184,688 million yen due mainly to a decline in the purchase of merchandise and raw materials
resulting from decreased net sales. The ratio of cost of sales to net sales rose by 1.5 percentage points year on year to 78.9%, affected mainly by lower prices
due to intensified sales competition and higher raw material prices.
Consolidated gross profit declined by 10.8% year on year to 49,464 million yen.
(Selling, general and administrative expenses; operating profit)
Consolidated selling, general and administrative expenses dropped by 5.8% year on year to 49,794 million yen owing mainly to the reduced logistics
costs resulting from lower net sales.
Operating loss was 330 million yen, compared to operating profit of 2,617 million yen for the previous fiscal year, impacted mainly by lower net sales,
lower prices due to intensified sales competition, higher raw material prices, and weak demand for eating out.
By segment, segment loss for the Processed Food Products operations was 935 million yen, which was significantly below the level of the same periodof the previous fiscal year, which saw segment income of 1,668 million yen. Segment income for the Meat Products operations was 547 million yen, down
39.2% year on year, and segment income for Other was 57 million yen, up 17.7% 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)
Consolidated ordinary profit declined by 94.1% year on year to 183 million yen due mainly to a decrease in operating profit.
Consolidated profit attributable to owners of parent fell by 74.9% year on year to 414 million yen due mainly to a significant drop in operating profit,
offsetting an increase in extraordinary income brought mainly by gain on bargain purchase through acquisition of shares of Toraku Foods Co., Ltd.

- 27 -

(Millions of yen)
Fiscal year ended

Fiscal year ended

March 31, 2020

March 31, 2021

Net sales

245,820

234,152(11,668)(4.7)%

Cost of sales

190,340

184,688(5,652)(3.0)%

77.4%

78.9%

1.5%

–

55,48049,464(6,015)(10.8)%

22.6%

21.1%

(1.5)%–

52,862

49,794(3,068)(5.8)%

21.5%

21.3%

(0.2)%

–

2,617

(330)

(2,974)–1.1%(0.1)%(1.2)%

–

3,118

183

(2,934)(94.1)%

1.3%

0.1%

(1.2)%

–

1,653

414

(1,239)(74.9)%

0.7%

0.2%

(0.5)%–

Ratio to net sales
Gross profit
Ratio to net sales
Selling, general and administrative expenses
Ratio to net sales
Operating profit
Ratio to net sales
Ordinary profit
Ratio to net sales
Profit attributable to owners of parent
Ratio to net sales

Year-on-year

Year-on-yearchange (amount)change (%)(Progress in the Medium-Term Management Plan)
The Group drew up its 3-Year Medium-Term Management Plan starting in April 1, 2020 through March 31, 2023. However, since we found it almost
impossible to reasonably 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, 2021 through March 31, 2024 after recalculating and reviewing numerical targets.
Details of the revised 3-Year Medium-Term Management Plan are sated in “II. Overview of Business, 1. Management policy, business environment,
issues to address.”- 28 -

B. Financial position(Millions of yen)
As of March 31, 2020

As of March 31, 2021

Total assets

131,854

133,546

1,692

Liabilities

56,79855,866(931)

Net assets

75,056

77,6802,623

Equity ratio

56.5%

57.7%

1.2%

2,930.66 yen

3,033.83 yen

103.17 yen

Net assets per share

Changes

Consolidated total assets as of March 31, 2021 were 133,546 million yen, an increase of 1,692 million yen from the end of the previous fiscal year, thanks
mainly to an increase in investment securities of 3,031 million yen year on year, offsetting a fall in merchandise and finished goods of 1,465 million yen.
Consolidated liabilities declined by 931 million yen from the end of the previous fiscal year to 55,866 million yen, helped mainly by a drop in notes andaccounts payable - trade of 2,929 million yen, despite increases in interest-bearing liabilities of 982 million yen and in deferred tax liabilities of 889 million
yen.
Consolidated net assets rose by 2,623 million yen from the end of the previous fiscal year to 77,680 million yen, buoyed mainly by increases in valuationdifference on available-for-sale securities of 2,111 million yen and in remeasurements of defined benefit plans of 929 million yen.
As a result, equity ratio as of March 31, 2021 stood at 57.7%, an increase of 1.2% from the end of the previous fiscal year. Since it remained at the samelevel 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 89,455 million yen compared to 89,777 million yen for the previous fiscal year, assetsof the Meat Products operations were 17,975 million yen compared to 18,903 million yen for the previous fiscal year, and assets of Other and corporate assets
not allocated to the reportable segments were 26,115 million yen compared to 23,173 million yen for the previous fiscal year. The primary factor for a fall inconsolidated assets of the Processed Food Products operations was decreases in accounts receivable - trade and in merchandise and finished goods, caused
by lower net sales.
C. Cash flows, capital resources, and cash liquidity

Equity ratio
Equity ratio on a market
value basis
Ratio of cash flows tointerest-bearing liabilities
Interest coverage ratio
Capital expenditure (Millionsof yen)Depreciation(Millions of yen)

Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 2018

March 31, 2019

March 31, 2020

March 31, 2021

58.6%

58.3%

57.0%

56.5%

57.7%

49.5%

49.9%

36.1%

37.7%

32.6%

1.6 years

4.7 years

2.7 years

2.3 years

2.7 years

42.5 times

17.3 times

31.3 times

39.7 times

32.9 times

9,880

10,850

9,589

9,167

6,133

5,442

5,688

6,433

6,801

7,798

(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 of issued 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.

- 29 -

With regard to capital resources, the Group views as one of the top priorities to secure appropriate funds for our operations, 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, 2021, it had been higher than depreciation for a period fromthe fiscal year ended March 31, 2017 through the fiscal year ended March 31, 2020. In this situation, equity ratio, the ratio of cash flows to interest-bearing
liabilities, and the interest coverage ratio, among other indicators, have remained at unquestionable levels. For this reason, we have determined that the Grouphas 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, 2021 are stated in “(1) Overview of operating results, etc., 2) Cash flows,” net cash providedby (used in) operating activities rose by 7,673 million yen, and net cash provided by (used in) investing activities fell by 5,388 million yen, which led us tosecure free cash flows of 2,285 million yen. While interest-bearing liabilities dropped by 1,119 million yen, we paid dividends of 889 million yen, purchased
treasury shares of 40 million yen. As a result, cash and cash equivalents increased by 231 million yen.
As dividend policy is stated in “IV. Information about Reporting Company, 3. Dividend policy,” the Group views the return of profits to shareholders as a
key management issue. Taking into consideration consolidated earnings performance and financial conditions, and based on our basic policy to maintainstable 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 thereasonableness of cross-shareholdings. However, since there are various ways of thinking about what numerical data should be used for calculation, we
refrain from making public the specific data we used. Capital cost is the returns investors should expect, so we would like to understand what an appropriate
capital cost is through dialogue with institutional investors and other investors, aiming to leverage it to achieve operational targets and maximize shareholder
returns.
The Group’s working capital is most needed by operating expenses for manufacturing products, including material costs, labor costs, expenses, and selling,
general and administrative expenses. Meanwhile, the capital intended for investment is most needed by the capital expenditure to expand, streamline, andimprove 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, 2021.
Capital expenditure on an asset basis for the fiscal year ending March 31, 2022 is estimated at 11,500 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 on a consolidated basis, and the unexercised portion of facilities
based on these contracts is 24,970 million yen as of March 31, 2021. Adding this amount to cash and deposits of 8,476 million yen as of March 31, 2021 willbring the total to 33,446 million yen, which surpasses the equivalent of a month’s net sales for the fiscal year ended March 31, 2021. For this reason, we havedetermined that we are at a certain level in terms of fund capabilities for any emergent demand. Of the overdraft contracts, those with 10,000 million yen wereadded during the fiscal year ended March 31, 2021 to prepare ourselves for any possible adversity caused by the COVID-19 pandemic. As of March 31,
2021, we completed a shelf registration of corporate bonds with the planned issuance amount of 20,000 million yen, although details about their new issuanceare yet to be worked out. This new issuance would prepare us for the demand for funds, including those for facilities, investment and financing, repaymentsof borrowings, and working capital.

- 30 -

2) Significant accounting policies and estimates
The consolidated financial statements of the Group are prepared on the basis of accounting principles generally accepted in Japan. We calculated the estimatesneeded 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 theestimates or in the business environment.
The demand for eat-in and ready-to-eat meals has been growing mainly due to the effects of consumers refraining from going out amid the worsening
COVID-19 pandemic. On the other hand, we expect a reduction in sales of the products mainly for the restaurant industry and convenience stores in urban
areas, which may dent our earnings performance.
The earnings targets used for accounting estimates have assumed that the effects of the COVID-19 pandemic will last into the first half of the fiscal year ending
March 31, 2022 and things will then gradually recover in the second half. However, since the effects of the pandemic still largely remain uncertain, the estimatesmight differ from actual results in the future.
Of the accounting estimates and assumptions used to prepare the consolidated financial statements, those of importance are stated in “V. Financial
Information, 1. Consolidated financial statements, etc., (1) Consolidated financial statements, [Notes], (Significant accounting estimates).”

4. Material contracts, etc.
Not applicable- 31 -

5. Research and development activities
The Group encourages the product development underpinned by basic research to create products that are safe and sensitive to the latest trends, and also promotes
the planning supported by strategic marketing. Using the development concept based on the latest marketing data and market analysis, we work on the productdevelopment with the theme of pursuing consumer needs and inclination as well as a new taste. Our efforts also include sweeping marketing research including
monitoring surveys. In this way, we are eager to develop a product that is truly meaningful to consumers.
The research and development expenses paid by the Group during the fiscal year ended March 31, 2021 were 673 million yen in total, mainly for the research anddevelopment activities of the Processed Food Products operations.
(Processed Food Products operations)
The Ham & Sausage Products department adopted a packaging material that partially uses biomass ink for our mainstay products, “Loin Ham” and “Half Sliced
Bacon” under the “Itsumo shinsen - Always Fresh” series as part of an initiative to reduce environmental footprint. They also launched “Otsumami Tsukune - Chicken
Meatballs,” a ready-to-eat product that enables consumers to taste a Japanese-style tavern dish at home just by microwaving it. The development of this products has
been in accordance with consumers’ needs and based on their expectation for a growth in consumers’ stay-at-home drinking demand amid drastic changes in the
structure of consumer demand caused by the pandemic. Their rollout of a new product encompasses “Gute Wurst Extra Fine Coarse-Ground Pork Sausage,” the richand condensed flavor of which splashes in your mouth when you eat this product. This has been developed to satisfy the growing demand for products in larger
packages against a backdrop of increasing opportunities of bulk-buying and cooking at home.
The Precooked & Processed Foods department strove to increase convenience by replacing the existing packaging material of the “Chef’s Craft” retort-pouch
instant curry series, which is placed as products for stockpiling, with a new microwave-proof material, to satisfy the rising demand for stay-at-home demand andconsumption. To increase the items for the “Sundubu” series, they launched “Shrimp Sundubu,” “Oyster Sundubu,” and “Scallop Sundubu.” In addition, given the
consumer inclination toward healthy lifestyles, they also released “Family’s Luxury: Creamy Custard Vanilla Sugar-Reduced Yoghourt,” which maintains the tastinessof custard vanilla yoghurt.
The Central Research Institute engages in joint research with outside institutes including universities, as well as works on its own research and development, under
the theme of food and health. It has been striving to improve our product quality by establishing an inspection system to ensure food safety, so that consumers can enjoy
any of the Group’s products without worrying about food safety. Its projects also include the development, with the development department of the operating division,of a healthy and delicious product that uses alternative protein, which is free from meat and therefore drawing attention globally. With regard to a supplement using thechicken breast plasmalogen, which is a functional material we manufacture through our own patented method, we have filed an application with the ConsumerAffairs
Agency to label it Foods with Function Claims and received acceptance from it. The Agency’s acceptance is based on a report, which has been proven to be thescientific evidence, that plasmalogen has a function that maintains the ability of the middle-aged and the elderly to memorize and recall words. This supplement producthas been popular among the consumers interested in maintaining and improving their cognitive function. Not only putting our energy in making more proposals for
Foods with Function Claims, will we continue to go ahead with our research and development to help mitigate the effects of an aging society.
(Meat Products operations and Other)
No applicable matters to report.

- 32 -

III. Information about Facilities
1. Overview of capital expenditures
The Group spent capital expenditure of 6,133 million yen in total for the fiscal year ended March 31, 2021, mainly for the investment in expansion, streamlining,and quality improvement of production facilities.The total amount of capital expenditure also includes the investment in property, plant and equipment and in intangible
assets.

2. Major facilities(1) Reporting company
As of March 31, 2021
Book value (Millions of yen)
Name of businessBusiness place (Location)

Details of facilities
segment

Number of

Machinery,
Buildings andLand

Leased(Area in m2)

assetsequipment andstructures

Other

Total

employees

vehiclesHokkaido Plant

Processed Food

Manufacturing

116
465

(Iwamizawa-shi, Hokkaido)

Products operations

facility

Iwate Plant

Processed Food

Manufacturing

Products operations

facility

Niigata Plant

Processed Food

Manufacturing

Products operations

facility

Kanto Plant

Processed Food

Manufacturing

Products operations

facility

Ibaraki Plant

Processed Food

Manufacturing

Products operations

facility

Processed Food

Manufacturing

5

392

7

2

918

5

8

24

2,022

8

3

40

3,130

69

2

3

773

11

3

4

2,834

10

1

1

1,492

13

1

11

788

16

0

3

591

8

2

22

2,910

57

0

6

971

9

2

20

1,490

8

8

37

4,675

20

227
1,036
(51,483)
181
1,687(66,193)
152
179(Inashiki-shi, Ibaraki Prefecture)779(42,335)

1,217(Shimotsuke-shi, Tochigi Prefecture)

7

254

725
(Joetsu-shi, Niigata Prefecture)1(43,460)

260(Hanamaki-shi, Iwate Prefecture)

188

435
(14,932)

Yokosuka Plant(Yokosuka-shi, Kanagawa

2,476
148

Products operations

facility

Processed Food

Manufacturing

202(6,412)Prefecture)
Shonan Plant

1,004
264

(Hiratsuka-shi, Kanagawa Prefecture) Products operations

facility

Shizuoka Plant

Manufacturing

Processed Food

(13,937)
359
173(Kakegawa-shi, Shizuoka Prefecture) Products operations

facility

Matsusaka Plant

Manufacturing

Processed Food
Products operations

facility

Takatsuki Plant

Processed Food

Manufacturing

146

Products operations

facility

Okayama Plant

Processed Food

Manufacturing322

Products operations

facility

Hiroshima Plant

Processed Food

Manufacturing

454

Products operations

facility

Karatsu Plant

Processed Food

Manufacturing

335

Products operations

764(48,753)501

1,685(Karatsu-shi, Saga Prefecture)320(42,891)368(Miyoshi-shi, Hiroshima Prefecture)

1,729(53,889)

189(Tsuyama-shi, Okayama Prefecture)283(12,010)

833(Takatsuki-shi, Osaka)

243(34,862)

157(Matsusaka-shi, Mie Prefecture)219

facility

2,442(39,228)- 33 -

Book value (Millions of yen)
Name of businessBusiness place (Location)

Details of facilities
segment

Number of

Machinery,
Buildings andLand

Leased(Area in m2)

assetsequipment andOtherstructures

Total

employees

vehiclesProcessed Food
Hokkaido Sales Dept.
Products operations(Sapporo-shi, Hokkaido, and other

135
Sales facility

45

3Meat Products

1

1

186

12

2

3

403

21

12

11

985

139

13

24

1,940

140

5

6

581

39

4

8

449

32

(6,852)locations)operations
Processed Food
Tohoku Sales Dept.
Products operations(Natori-shi, Miyagi Prefecture, and258
Sales facility

127

10

Meat Products(6,206)other locations)operations
Processed Food
East Japan Sales Dept.

Products operations

685
Sales facility

265

10

(Chuo-ku, Tokyo, and other locations) Meat Products(7,549)operations
Processed FoodWest Japan Sales Dept.
Products operations(Nishinari-ku, Osaka-shi, and other

1,491
Sales facility

397

14

Meat Products(22,214)locations)operations
Processed Food
Chu-Shikoku Sales Dept.
Products operations(Nishi-ku, Hiroshima-shi, and other392
Sales facility

173

4

Meat Products(7,427)

locations)operations
Processed Food
Kyushu Sales Dept.
Products operations(Kasuya-gun, Fukuoka Prefecture,

241
Sales facility

181

13

Meat Products(8,389)and other locations)operations(2) Subsidiaries in Japan
As of March 31, 2021
Book value (Millions of yen)
Name ofCompany nameBusiness place (Location)

Details of facilities
business segment

Number of

Machinery,
Buildings andLand

Leased(Area in m2)

assetsequipment andstructures

Other

Total

employees

vehiclesHead Office and plant
Processed Food
Toda Foods Co.,

(Toda-shi, Saitama

Manufacturing
Products

Ltd.

Prefecture, and other

1,152
3,313

facility

1,469

909
(21,270)

operations
locations)- 34 -

80

6,925

148

Head Office and plant
Processed Food
Azumino Food Co., (Matsumoto-shi, Nagano

Manufacturing

905

Products
Ltd.

1,843

Prefecture, and other

1,860

facility

2,177

151

6,938

92

53

118

3,448

191

(55,711)operations
locations)
Head Office and plant
Processed Food
Toraku Foods Co.,

(Higashinada-ku, Kobe-

Manufacturing

627

Products
Ltd.

1,589

shi, Hyogo Prefecture, and

1,060

facility(9,094)operations
other locations)(Notes)

1.
2.
3.
4.

There are no major facilities out of operation.
The amounts above are exclusive of consumption taxes, etc.
The “Other” item under book value refers to a total of tools, furniture and fixtures, and intangible assets.
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, 2021 as follows: Capital expenditure on an asset basis for the fiscal year ending March 31,
2022 is estimated at 11,500 million yen in total.
(Planned amounts ofinvestment)
Name of businessCompany nameBusiness place (Location)

Details of facilities
segment

AmountFundraisingalready paid

methodTotal amount

Estimated
Starting datecompletion date(Millions of(Millions of
yen)
yen)
Takatsuki Plant

Processed Food

Manufacturing

Reporting company

By our own
4,090(Takatsuki-shi, Osaka)

Products operations

facility, etc.

Processed Food

Manufacturing

1,577

July 2018

December 2021

December 2020

September 2022

December 2020

March 2022

capitalKanto Plant
Reporting company(Shimotsuke-shi, Tochigi

By our own
3,489

Products operations

facility, etc.

Processed Food

Manufacturing

147
capitalPrefecture)
Karatsu Plant
Reporting company(Karatsu-shi, Saga Prefecture)(Notes)By our own
1,133

Products operations

facility, etc.

14
capital1. The amounts above are exclusive of consumption taxes, etc.
2. The Takatsuki Plant has been partially completed in June 2021, with product shipping started gradually.

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

- 35 -

IV. Information about Reporting Company
1. Company’s shares, etc.
(1) Total number of shares, etc.
1) Authorized shares
As of March 31, 2021
Class

Total number of shares authorized to be issued (Shares)

Common stock

40,000,000

Total

40,000,0002) Issued shares
As of the end of the current fiscal year
(Shares)Class

As of the filing date (Shares)

Stock exchange on which the(June 28, 2021)

Company is listed(March 31, 2021)

Details

Tokyo Stock Exchange
Common stock

26,505,581

A minimum trading

26,505,581 (First Section)

unit:

Frankfurt Stock Exchange
Total

26,505,581

26,505,581

100 shares––(2) Share acquisition rights
1) Employee share option plans
Not applicable2) Rights plans
Not applicable3) 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 the total

total number of

number of issued

Changes in share

Balance of share

Changes in legal

Balance of legal

issued sharessharescapitalcapitalcapital surplus

capital surplus(Thousands of(Thousands of(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)shares)shares)
–

6,716

–

21,685(106,022)

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

- 36 -

(5) Shareholding by shareholder category
As of March 31, 2021
Status of shares (the minimum unit consists of 100 shares)
Japanese

Foreign corporations, etc.

Status of shares

Financial
Category

Government andfinancial

local

institutions andmunicipalities

insurance

instruments

Other Japanese

below unit

Individuals,
Totalbusiness

corporations

Others(Shares)othersIndividuals

operators
companies
Number of
–

39

27

168

119

14

21,63021,997––

83,9052,583

52,60827,071

34

98,475

264,676

37,981

–

31.70

0.98

19.88

10.23

0.01

37.21

100.00–shareholders
Number of shares
held (Units)
Percentage ofshares held (%)(Note)

1,103,000 shares of treasury shares consist of 11,030 units listed under “Individuals, others.” The actual number of treasury shares is 1,103,000 as of March
31, 2021.

(6) Major shareholders
As of March 31, 2021
Percentage of shares

Name

Address

Number of shares

held to the total

heldnumber of issued(Thousands ofshares (excluding

shares)shares of treasury
shares) (%)

Marudai Kyoei Kai

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

1,950

7.67

The Master Trust Bank of Japan, Ltd. (Trust Account) 2-11-3 Hamamatsu-cho, Minato-ku, Tokyo

1,328

5.23

Kanematsu Corporation

1,192

4.69

1,050

4.13

Komori Memorial Foundation

119 Ito-machi, Chuo-ku, Kobe-shi, Hyogo Prefecture
Inside the Head Office of Marudai Food Co., Ltd. at 21-3
Midori-cho, Takatsuki-shi, Osaka

Sumitomo Mitsui Banking Corporation

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

887

3.49

Sumitomo Mitsui Trust Bank, Limited

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

864

3.40

Sumitomo Life Insurance Company

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

860

3.38

Custody Bank of Japan, Ltd. (TrustAccount)

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

786

3.09

The Norinchukin Bank

1-13-2 Yuraku-cho, Chiyoda-ku, Tokyo

642

2.52

524

2.06

10,08739.71

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

PALISADES WEST 6300, BEE CAVE ROAD
BUILDING ONEAUSTIN TX 78746 US(6-27-30 Shinjuku, Shinjuku-ku, Tokyo)

Total(Notes)–1. Number of shares held is rounded down to the nearest thousand.
2. Percentage of shares held is rounded down to the second decimal place.

- 37 -

3. The Company owns 1,103,000 shares of treasury shares but excludes itself from the major shareholders above.
4. Komori Memorial Foundation is a public interest incorporated foundation established in accordance with the last will of 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):
1,328 thousand shares
Custody Bank of Japan, Ltd. (TrustAccount):
786 thousand shares- 38 -

6. The change report on large shareholdings that was made available to the public on October 21, 2020 states that Sumitomo Mitsui Trust Bank, Limited
and its joint holders, Sumitomo Mitsui Trust Asset Management Co., Ltd. and Nikko Asset Management Co., Ltd., owned the following shares as of
October 15, 2020. 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, 2021, 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:

Name

Number of share certificates,

Percentage of shareetc. held

certificates, etc. held(Thousands of shares)(%)

Address

Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui TrustAsset Management Co.,Ltd.
Nikko Asset Management Co., Ltd.

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

864

3.26

1-1-1 Shibakoen, Minato-ku, Tokyo

737

2.78

9-7-1 Akasaka, Minato-ku, Tokyo

286

1.08

1,888

7.13

Total

–

(7) Voting rights
1) Issued shares
As of March 31, 2021
Category

Number of shares (Shares)

Number of voting rights (Units)

Details

–

–

–

–

–

–

–

–

–

–

–

Shares without voting rights
Shares with limited voting rights (treasury
shares, etc.)
Shares with limited voting rights (others)
Shares with full voting rights (treasury(Treasury shares)

shares, etc.)

Common stock

1,103,000

Shares with full voting rights (others)

Common stock

25,364,600

Shares below one unit

Common stock

37,981––

26,505,581––

Total number of issued shares
Total voting rights held by all shareholders(Note)

253,646––

253,646–

The number of shares of common stock in “Shares below one unit” is exclusive of the treasury shares held by the Company.

2) Treasury shares, etc.
As of March 31, 2021

Shareholder

Address of shareholder

Number of shares

Number of shares

held under own

held under thenamenames of others(Shares)(Shares)

Total number ofshares held
(Shares)

Percentage of shares
held to the total
number of issued
shares (%)(Treasury shares)
Marudai Food Co., Ltd.
Total

21-3 Midori-cho, Takatsukishi, Osaka–

1,103,000–

1,103,000

4.16

1,103,000–

1,103,000

4.16- 39 -

2. Acquisition and disposal of treasury sharesClass of shares, etc.:

Acquisition of common stock in accordance with Article 155, Items 3 and 7 of the CompaniesAct(1) Acquisition by resolution of shareholders meeting
Not applicable- 40 -

(2)Acquisition by resolution of board of directors meeting
Acquisition in accordance with Article 155, Item 3 of the CompaniesAct
Category

Number of shares (Shares)

Resolution at the meeting of the Board of Directors as ofAugust 31, 2020

Total amount (Millions of yen)

23,80044

Treasury shares acquired before the current fiscal year––

Treasury shares acquired during the current fiscal year

21,60039

Total number and amount of remaining shares to be acquired by resolution

2,200

4

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

9.24

9.24

–

–

9.24

9.24

(Acquired from September 1, 2020 to September 1, 2020)

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 CompaniesAct
Category

Number of shares (Shares)

Total amount (Millions of yen)

Treasury shares acquired during the current fiscal year

139

0Treasury shares acquired during the period reported––(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, 2021,
to the filing date of thisAnnual Securities Report.

(4) Disposal of acquired treasury shares and number of treasury shares held
Current fiscal year
Category
Number of shares (Shares)
Acquired treasury shares for which subscribers
were solicited
Acquired treasury shares that were disposed ofTreasury shares transferred due to merger, stock
exchange, stock delivery, or corporate separation
Number of shares of treasury shares held
(Note)The period reported

Total amount disposed(Millions of yen)

Number of shares (Shares)

Total amount disposed(Millions of yen)

–

–

–

–

–

–

–

–

–

–

–

–

1,103,000–

1,103,000–“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, 2021, to the filing date of thisAnnual Securities Report.

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 to increase 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.

- 41 -

(Note) Dividends of surplus whose record date falls on the current fiscal year are as follows:
Date of resolution

Total amount of dividends

Dividends per share(Millions of yen)

(Yen)

Resolution at the Ordinary General Meeting of

762

Shareholders held on June 25, 2021

- 42 -

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 thegrowing consumer interest in the food safety, we will strive to strengthen our quality assurance system further to provide consumers with safer and healthierfood products. To do so, we will establish a comprehensive hygiene management system, such as the HACCP management system, and ensure that weappropriately 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 and regulations relevant to overall
corporate operations as well as corporate ethics, and to further raise the awareness of the Group’s Directors/Statutory Auditors and employees, aiming to be acompany 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, are as follows:(The Company’s administrative bodies)
The Company has the General Meeting of Shareholders, the Board of Directors, the Nomination 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, the Company also has the Compliance Committee and the Corporate Ethics Committee in place to maintain a system of continuously monitoringand supervising the status of the Company’s compliance with laws and regulations. Since we have judged 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 onmaterial matters related to management and to oversee each Director’s execution of their duties. We have eight 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 ouroperations more transparent and fairer.
The meetings of the Board of Directors were held 14 times during the fiscal year ended March 31, 2021, with the attendance rate of Directors being 99%
and that of Statutory Auditors being 100%.

- 43 -

B. Nomination and Remuneration Committee
We have the Nomination and Remuneration Committee in place as of the filing date to ensure the transparency and objectivity of the process to decide
the candidates for Directors and Statutory Auditors and to decide Directors’remuneration. The Nomination and Remuneration Committee comprises threemembers, 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.
C. Management Meeting
The Management Meeting comprises full-time Directors and is attended by those other than full-time Directors, if necessary. It is held once a week, inprinciple, to deliberate in advance matters subject to resolution by the Board of Directors and to deliberate and examine other material matters related to
management.
D. Executive Officers’Meeting
We have introduced an executive officer system, in which Executive Officers execute their duties under the direction of President and Representative
Director in accordance with the decisions by the Board of Directors. The Executive Officers’ Meeting comprises Directors including Outside Directors,
StatutoryAuditors, and Executive Officers. It is held once a month, in principle, to report, deliberate, and examine Executive Officers’execution of their duties.
E. Group Meeting
The Group Meeting comprises Directors including Outside Directors, Statutory Auditors, and presidents of major subsidiaries. It is held once every threemonths, in principle, to report, deliberate, and examine subsidiaries’operating results, financial conditions, and other material matters.
F. 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 ComplianceAwareness Survey that covers all the employees of the Group, the Compliance Committee reports to theBoard of Directors on the survey results in addition to the cases, etc. deliberated at theCorporate 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 ofobservance of laws.
G. 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, thecases reported by an insider, etc., and examines and formulates prevention measures.
H. 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 regular meeting to exchange views with Directors, Executive Officers, andemployees, to oversee Directors’business execution. The meeting of the Board of Statutory Auditors is held once a month, in principle, to resolve, discuss,and deliberate material matters related to the audit policy and plan as well as audits. The Board of StatutoryAuditors has a system in place to grasp the Group’s
condition in a timely and appropriate manner by closely working with theAccounting Auditor and the internal auditing departments.
The meetings of the Board of Statutory Auditors were held 15 times during the fiscal year ended March 31, 2021, with the attendance rate of Statutory
Auditors being 100%.
I. Internal Audit Office
We have the Internal Audit Office under the direct authority of President as one of the internal auditing departments that conducts the Group’s internalbusiness audits and evaluates the status of its internal control. It comprises seven members and works closely with Statutory Auditors concerning the resultsof audits and evaluation.

- 44 -

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 and departments of the Marudai FoodGroup can fulfill their own roles, with the aim of achieving its corporate philosophy and operational targets and of improving its corporate value andsustainably growing.
With regard to the internal control system, the InternalAudit Office, under the direct authority of President, 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 BusinessActivities (internal control system)” stipulated by the Companies Act
and the Regulations for Enforcement of the Companies Act at the meeting of the Board of Directors held in May 2006, and resolved a proposal for partiallyamending the said resolution at the meeting of the Board of Directors held in May 2015. We will continue to enhance transparency of our overall management
through active 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 as well as with the Articles ofIncorporation 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 Codeof Conduct, which stipulates the observance of laws and regulations, the Articles of Incorporation, and social ethics. The Compliance Committee,
chaired by an Independent Outside Director, shall oversee the Marudai Food 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 andemployees fully understand it to prevent any violation of laws and regulations or theArticles 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 the Document Rules.

(C)

Rules and other systems to manage the risk of loss
The Company and its subsidiaries shall formulate the Marudai Food Group’s Risk Management Rules to establish and implement a system that
ensures food safety as a group of food companies and that prepares us to respond swiftly in 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 suchmatters in advance at the Management Meeting, in accordance with the Rules for the Board of Directors and the Guidelines for Operation of theBoard of Directors. We shall also formulate the Rules for Division of Duties andAuthority for Organization to ensure that the Directors and employeesof the Company and its subsidiaries efficiently execute duties. By so doing, we shall set standards for duties and authority, our chain of command, andother 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 the Group and regularly report to theBoard of Directors and the Board of Statutory Auditors about how our compliance system is established and operated.

(F)

Matters related to the report to the Company about execution of duties by Directors, etc. of its subsidiaries
The Company shall regularly hold a meeting of the Group companies 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 theArticles of Incorporation.

(G) Matters related to any employee hired as an assistant for Statutory Auditors if requested by them
If StatutoryAuditors request that we hire an employee as an assistant to effectively conduct the audits by StatutoryAuditors, Directors shall properly
deploy personnel after discussion with Statutory Auditors.

- 45 -

(H) Matters related to independence from Directors of the said employee stipulated in a preceding item and effectiveness of directions
Any decision on personnel matters concerning the employee as an assistant for Statutory Auditors, including the nomination, transfer, andevaluation 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 and systems 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 shall report to StatutoryAuditors 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 which such Directors or employees have received a report about the abovementioned event or case, or any
report to the whistleblowing 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 of making 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 receiving a report from such Director or employee, on grounds ofmaking such report. We also shall make the Directors and employees 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 shallpromptly 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 and Directors 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) and also in conformity with the Basic Principle resolved at
the meeting of the Board of Directors held on January 28, 2008.
(B) Status of establishment of measures to eliminate antisocial forcesa.
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, andOsaka 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 we been 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.

- 46 -

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 andemployees, and with Outside Statutory Auditors to limit their liability for damages pursuant toArticle 423, Paragraph 1 of the CompaniesAct. The maximum
amount of the liability for damages pursuant to the 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 StatutoryAuditors conducted the duty that has caused liability in good faithand without gross negligence.
5) Overview of a directors and officers (D&O) liability insurance agreement
The Company has entered into a directors and officers (D&O) liability insurance agreement provided for in Article 430-3, Paragraph 1 of the Companies
Act with an insurance company, with its Directors and Statutory Auditors as the insured. The insurance covers the damages that may arise when the insured
assumes liability for the execution of his or her duties or receives a claim related to the pursuit of such liability. Insurance premiums are fully paid by theCompany. 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 business execution and make a material decision while ensuring swiftness.
7) Requirement for resolution of the election of Directors
The Company stipulates in itsArticles of Incorporation that a resolution for the election of Directors shall be passed with the 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 to a resolution of the Board of
Directors in accordance with Article 165, Paragraph 2 of the Companies Act. This is aimed to flexibly 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 2 of the Companies Act shall bepassed 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 bythose 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.

- 47 -

(2) Directors (and other officers)
1) List of Directors/Statutory Auditors
Male: 10, Female: 1 (Ratio of female to Directors/Statutory Auditors: 9.1%)

As of June 28, 2021
Number ofshares of the

Title and position

Name

Date of birth

Career summary

Term
Company held
(Shares)March 1983

Joined the Company

April 2005

General Manager of Regional Sales Dept., Kanto Sales Dept.

March 2009

General Manager of Sales Dept., Sales Div.

April 2012

General Manager of Chugoku and Shikoku Sales Dept.

April 2013

Executive Officer, General Manager of Sales Dept.

April 2018

President and Representative Director,Azumino Food Co., Ltd.

April 2021

Managing Executive Officer of the Company

June 2021

President and Representative Director (to present)

February 1960

Joined the Company

March 1970

General Manager, Purchasing Dept.

April 1973

Director

October 1981

Managing Director

April 2001

President and Representative Director

June 2019

Chairman and Representative Director

June 2021

Director and Chairman (to present)

Managing Director

April 1987

Joined the Company

In charge of Meat

April 2011

Executive Officer

April 2017

Senior Executive Officer

Supply Sales Dept.,

June 2017

Director

General Manager of Ham

April 2021

Managing Director (to present)

April 2010

General Manager of Tennoji-ekimae Corporate Sales Dept., Sumitomo

President andYuji Sato

December 25, 1964

Representative Director

Director and Chairman

Tokuo Kudara

February 2, 1939

Business Dept., Food
Shigeki Fukushima

October 9, 1963

(Note 3)2,000

(Note 3)42,400(Note 3)3,200

(Note 3)5,200

(Note 3)600

& Sausage Products Dept.

Director
General Manager of

Mitsui Banking Corporation
Nobuyoshi Katoh

January 14, 1960

May 2012

Joined the Company

May 2012

Executive Officer, General Manager ofAccounting Dept.

June 2013

Director, General Manager ofAccounting Dept. (to present)

April 1988

Joined the Company

Director

April 2016

General Manager of Kanto Plant

In charge of Procurement

April 2017

Executive Officer, General Manager of Kanto Plant

April 2018

Executive Officer, General Manager of Ham & Sausage Production

Accounting Dept.

Div., General Manager ofKouji Mishima

April 1, 1966

Ham & Sausage
Production Dept.

Dept., General Manager of Ham & Sausage Products Planning Dept.
June 2019

Director, General Manager of Ham & Sausage Products Div., General
Manager of Ham & Sausage Production Dept., General Manager of- 48 -

Number ofshares of the
Title and position

Name

Date of birth

Career summary

Term
Company held
(Shares)Ham & Sausage Products Planning Dept.
October 2019

Director, General Manager of Ham & Sausage Products Div., General
Manager of Ham & Sausage Production Dept.

April 2021

Director in charge of Procurement Div., General Manager of Ham &Sausage Production Dept. (to present)

Director

April 1985

Joined the Company

In charge of Quality

April 2019

Executive Officer, General Manager of GeneralAffairs and Human

Assurance Dept., General

Resources Dept. and General Manager of Environmental Protection

Manager of General
Affairs and Human

OfficeToshio Tanaka

January 9, 1963

June 2021

Director in charge of QualityAssurance Dept., General Manager ofResources Dept. andGeneralAffairs and Human Resources Dept. and General Manager ofGeneral Manager ofEnvironmental Protection Office (to present)(Note 3)

1,000

Environmental Protection
OfficeNumber ofshares of the
Title and position

Name

Date of birth

Career summary

Term
Company held
(Shares)

April 1979

Joined The Sumitomo Bank, Limited (currently Sumitomo Mitsui
Banking Corporation)

April 2007

Executive Officer, General Manager of Operations Planning Dept.,
Sumitomo Mitsui Banking Corporation

April 2008

Executive Officer, Deputy Officer in charge of Operations Planning
Dept. and Operations Promotion Dept.

Director

Masahiro Fuchizaki

April 8, 1956

May 2009

Advisor, JSOLCorporation

June 2009

Director, Senior Managing Director

April 2010

Managing Executive Officer, Sumitomo Mitsui Banking Corporation

April 2011

Managing Executive Officer, Sumitomo Mitsui Financial Group, Inc.
Director, The Japan Research Institute, Limited

June 2011

Director, Sumitomo Mitsui Financial Group, Inc.

April 2012

Director and Senior Managing Executive Officer, Sumitomo Mitsui
Banking Corporation

May 2015

Representative Director, President and CEO, The Japan ResearchInstitute, Limited

June 2019

Director and Chairman- 49 -(Note 3)–

Number ofshares of the
Title and position

Name

Date of birth

Career summary

Term
Company held
(Shares)

June 2020

SpecialAdvisor (to present)

June 2021

Outside Director of the Company (to present)

April 1981

Joined Matsushita Electric Industrial Co., Ltd. (currently Panasonic
Corporation)

April 2007

Director, Corporate Information Security Division

April 2014

Assistant to Director, Senior Counsel for Personal Information
Protection, Legal Division

November 27,
Director

Keiko Kaneko

October 2014

General Manager, Security Compliance Division, Benesse Holdings,(Note 3)–(Note 4)

300

1958
Inc.
June 2016

General Manager, Information Security Division

April 2018

Associate Professor, Department of Business Law, Faculty of Business
Administration, Osaka University of Economics (to present)

June 2019

Outside Director of the Company (to present)

April 1983

Joined the Company

June 2008

StatutoryAuditor, Marudai Service Co., Ltd.

June 2018

Retired from the position of StatutoryAuditor of Marudai Service Co.,

Full-time Statutory

Ltd.
Toru Miyachi

AuditorSeptember 1, 1959
April 2020

General Manager of GeneralAffairs andAccounting Dept., Pioneer
Foods Co., Ltd.

June 2020

Director

June 2021

Full-time StatutoryAuditor of the Company (to present)- 50 -

Number ofshares of the
Title and position

Name

Date of birth

Career summary

Term
Company held
(Shares)

April 1984

Joined The Norinchukin Bank

February 2007

Deputy General Manager of InternalAudit Division

August 2008

Deputy General Manager ofAgriculture, Fishery and Forestry

Full-time Statutory

Financing Division
Takashi Matsuzawa

January 2, 1962

AuditorJuly 2013

General Manager of Office ofAudit & Supervisory Board Members

June 2015

Executive Officer, General Manager ofAdministration Div., NOCHU(Note 5)–(Note 6)–

INFORMATION SYSTEM CO., LTD.

StatutoryAuditor

Motoaki Nishimura

July 9, 1943

June 2020

Outside StatutoryAuditor of the Company (to present)

April 1972

Registered as attorney-at-law (Osaka BarAssociation)

June 2012

OutsideAuditor, Nikkato Co., Ltd.

June 2013

Outside StatutoryAuditor of the Company (to present)

June 2015

Outside Director (Audit & Supervisory Committee Member), Nikkato
Co., Ltd. (to present)

Total(Notes)54,7001. 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, tothe 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.
7. In order to ensure that the number of incumbent Statutory Auditors does not fall short of that required by laws and regulations, the Company has
nominated one substitute Statutory Auditor as stipulated in Article 329, Paragraph 3 of the Companies Act.
The career summary of the candidate for substitute Statutory Auditor is as follows.
Number of shares
Name

Date of birth

Career summary

Termof the Company
held (Shares)

April 1990

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

May 18, 1959

(Note)
April 1995

Opened Tabuchi Law Office

June 2001

Opened Tabuchi Nishino Law Office (to–present)(Note) 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, 2021, to the beginning of the Ordinary General Meeting of Shareholders for the fiscal year ending March 31, 2022.

- 51 -

2) 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 andmedium- to long-term enhancement of corporate value and has nominated him as a candidate for Outside Director.
Ms. Keiko Kaneko has assumed various important posts so far, having served as Director, Corporate Information Security Division, Panasonic Corporation;
General Manager, Security Compliance Division, Benesse Holdings, Inc.; Associate Professor, Department of Business Law, Faculty of Business
Administration, Osaka University of Economics, etc. She therefore has professional knowledge in the legal and information security operations as well as a
wealth of experience and profound insight. She is providing advice concerning overall management of the Company and is fulfilling her 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 ofsustainable growth and medium-to long-term enhancement of corporate 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 and accounting affairs. The Company judgesthat 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 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.
There are no human relationships, financial relationships, transaction relationships, or any other interests between Outside Directors/Statutory Auditors andthe Company.
We have formulated and made public our Independence Standards for Outside Directors/StatutoryAuditors as the specific criteria for us to make a judgment
concerning their independence, based on the independence criteria set forth by a relevant 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’orAuditors’remuneration
8) A party who received donations exceeding a certain limit (Note 5) from the Marudai Food Group or its executive person
9) An executive person of an entity for which an executive person of the Marudai Food Group serves as a Director/Statutory Auditor- 52 -

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

1.
2.
3.
4.
5.
6.

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.
A “party whose principal business partner is the Marudai Food Group” means a party who received payment from the Company
equal to 2% or more of the party’s consolidated annual sales in the most recent fiscal year.
A“principal business partner of the Marudai Food Group” means a party whose payment to the Company was equal to 2% or moreof the Company’s consolidated annual sales in the most recent fiscal year.
A “principal lender to the Marudai Food Group” is a lender from which the Marudai Food Group borrows an amount equal to 2%
or more of consolidated total assets.
“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.
A “party who holds an important position” means a director, an executive, an executive officer, or a party who executes importantbusiness 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 the Tokyo Stock Exchange of Outside
Directors Mr. Masahiro Fuchizaki and Ms. Keiko Kaneko and Outside StatutoryAuditors Mr. Takashi Matsuzawa and Mr. Motoaki Nishimura as Independent
Directors/Statutory Auditors, in accordance with the standards above.
If the Company’s Outside Directors/Statutory Auditors concurrently serve as director or auditor at publicly listed companies 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 overall management 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 theprofessional knowledge in financial and legal areas they have acquired through abundant operational experience; closely working with the InternalAudit Office,a supervising department in charge of internal audits and control; and exchanging information and views with theAccountingAuditor. With regard to our elected
Outside Directors/Statutory Auditors, we consider that the current system to oversee and supervise business execution of the Company is adequate, given ourbusiness scale, operations, etc.
(3) Audits
1) Audits by Statutory Auditors
A. Organization and personnel of the Board of Statutory Auditors
The Board of Statutory Auditors of the Company comprises three members, two of whom are Outside Statutory Auditors. The two Outside Statutory
Auditors are those who have satisfied the requirements for Independent Statutory Auditors set forth by the Company. Meanwhile, two full-time Statutory
Auditors are selected: one internal Statutory Auditor and one Outside Statutory Auditor. Full-time Statutory Auditor Mr. Yoshikazu Sawanaka, who had long
been serving as Chair of the Board of Statutory Auditors and retired at the conclusion of the 73rd Ordinary General Meeting of Shareholders held on June25, 2021, had abundant knowledge about financial and accounting affairs through his involvement in accounting operations at the Company over the years.
Full-time Statutory Auditor (and Outside Statutory Auditor) Mr. Takashi Matsuzawa, who had been working for a financial institution before, also hasabundant knowledge about financial and accounting 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.
Newly appointed full-time StatutoryAuditor Mr. Toru Miyachi has a wealth of operational experience and extensive knowledge as a StatutoryAuditor at theGroup company and in the Company’s general affairs and human resources department, among others.
We have no full-time staff members who provide support for the Board of Statutory Auditors. We instead have a system in which each department
provides Statutory Auditors in a timely and accurate manner with the information, material, etc. necessary for them to execute duties.

- 53 -

B. Activities of Statutory Auditors and the Board of Statutory Auditors
The meetings of the Board of Statutory Auditors were held 15 times during the current fiscal year.Attendance of each Statutory Auditor is shown below.
Title and position
Full-time Statutory Auditor
Full-time Statutory Auditor(Outside)
Full-time Statutory Auditor(Outside)
Statutory Auditor (Outside)

Name

Attendance

Remarks

Yoshikazu Sawanaka

15 out of 15 meetings–

Takashi Matsuzawa

11 out of 11 meetings

Takuji Okudaira

4 out of 4 meetings

Retired on June 26, 2020

Motoaki Nishimura

15 out of 15 meetings–

Assumed office on June 26,
2020(Notes)

1. Full-time Statutory Auditor Mr. Yoshikazu Sawanaka retired at the conclusion of the 73rd Ordinary General Meeting of
Shareholders held on June 25, 2021.
2. Full-time Statutory Auditor Mr. Toru Miyachi has been newly appointed at the 73rd Ordinary General Meeting of Shareholders
held on June 25, 2021. For this reason, his attendance during the current fiscal year is not stated above.
The meeting of the Board of Statutory Auditors is held to resolve, discuss, and deliberate 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 with Chairman and Representative Director, President, Directors,
and Executive Officers once every six months.
In accordance with the Rules for the Board of StatutoryAuditors, the Standards forAudits by Statutory Auditors, the audit policy and the division of duties
stipulated by the Board of Statutory Auditors, etc., Statutory Auditors attended the meeting of the Board of Directors and other material meetings to receive
reports from Directors, etc. on how they had executed their duties, and reviewed important approval documents and other material. They also conducted
audits at the Head Office and also by visiting majoroperational bases and subsidiaries,with a focuson how Directors, ExecutiveOfficers, and other employees
had executed their duties, how they had worked on the compliance with laws and regulations, how they had established and operated the internal control
system, and how they had responded to the COVID-19 pandemic. The worsening COVID-19 pandemic forced us to postpone part of the planned audits
for the current fiscal year to be conducted by visiting each operational base and subsidiary. We responded to this situation by closely sharing information
through regular meetings with the internal auditing departments, including the management and supervising departments and divisions, the Accounting
Auditor, the InternalAudit Office, and the Quality Assurance Dept., as well as with subsidiaries’Statutory Auditors.
2) Internal audits
The Company has the Internal Audit Office, which comprises seven 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 theGroup’s operations have been executed properly in terms of compliance with laws and regulations, operational efficiency, credibility of financial statements,
and preservation of assets, as well as providing advice or recommendations accordingly.
The InternalAudit Office reports to personnel in charge of relevant departments about evaluation results of business audits and internal control situations, andalso to the Board of Directors and the Board of StatutoryAuditors, when necessary, 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
KPMGAZSALLC
B. Consecutive auditing period
30 years
C. Certified public accountants engaged in the accounting audit services
Designated Engagement Partner, Takahide Nakahata
Designated 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 accountants: 7 persons
Persons who have passed the CPA examination: 7 persons
Other: 9 persons- 54 -

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 examined candidates for an AccountingAuditor; 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 theAccounting Auditor’s independence stipulated in Article 131 of the Regulations on Corporate
Accounting
In the case of reappointment of the Accounting Auditor, the Board of Statutory Auditors determines whether or not the said Accounting Auditor isappropriate 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, and through what process the executive management departments have examined and decided on thereappointment of it.
As for the policy for dismissal and non-reappointment of the Accounting Auditor, the Board of Statutory Auditors shall dismiss the Accounting Auditor
with the consent of all the Statutory Auditors if the Accounting Auditor is deemed to fall under any one of the items in Article 340, Paragraph 1 of theCompanies 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 the reason 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 to conduct 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 theappropriateness 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 newAccounting Auditor.
F. Assessment of the audit firm by StatutoryAuditors and the Board of Statutory Auditors
The Board of Statutory Auditors has set evaluation guidelines and standards for theAccounting Auditor regarding the following items and evaluates theirappropriateness 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 the audit 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 are appropriate, 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 Board of 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.

- 55 -

4) Details of audit remuneration
A. Details of remuneration for auditing certified public accountants, etc.
(Millions of yen)
Fiscal year ended March 31, 2020
Category

Fiscal year ended March 31, 2021

Remuneration in accordanceRemuneration in accordanceRemuneration in accordanceRemuneration in accordancewith audit certification

with non-audit certification

with audit certification

with non-audit certification

Reporting company

69

1

70

–

Consolidated subsidiaries

–

–

–

–

Total

69

1

70

–

B. Remuneration to the same network (KPMG) as auditing certified public accountants, etc. (excluding A)(Millions of Thai baht)
Fiscal year ended March 31, 2020
Category

Fiscal year ended March 31, 2021

Remuneration in accordanceRemuneration in accordanceRemuneration in accordanceRemuneration in accordancewith audit certification

with non-audit certification

with audit certification

with non-audit certification

Reporting company

–

0

–

0

Consolidated subsidiaries

–

–

–

–

Total

–

0

–

0

As non-audit certification for the Company, we pay remuneration for the business management advisory services and 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 theAccounting 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 base for calculating the estimated remuneration was appropriate, by obtaining
necessary material or reports from Directors, relevant divisions in the Company, and theAccounting 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 CompaniesAct to the amount of the remuneration, etc. for the Accounting Auditor.

- 56 -

(4) Remuneration for Directors and StatutoryAuditors
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 (hereinafter referred to as the “Determination
Policy”) that provides that remuneration for individual Directors shall be determined by considering both existing payment criteria based on the Company’s
performance, practices, etc. and the contribution of respective Directors to the Company performance etc., for the purpose of motivating Directors to contributeto the Company’s sustained growth and medium- to long-term corporate value enhancement. The remuneration for Directors, in principle, consists of fixed
remuneration and performance-linked bonuses. A policy on the determination of the payment ratio of performance-linked remuneration and compensation
other than performance-linked remuneration provides that the ratio shall not be fixed. Rather, the Board of Directors shall consult the Nomination andRemuneration Committee, 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, to determine the payment ratio 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 andRemuneration Committee that deliberated the validity and appropriate operation of remuneration system relating to individual Directors’ fixed remuneration,
performance-linked remuneration, etc., at the request 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, and reported to the Board of Directors, by the Nomination andRemuneration 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 sets maximum 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 the conclusion 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 sets maximum monthly
remuneration for Statutory Auditors at 5 million yen. The number of Statutory Auditors as of the conclusion 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 Directors 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 the consolidated operating profit. Thisis 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, 2021 recorded an operating loss of 330 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)
Category

Total amount(Millions of yen)

Number of
Performance-

Fixed
remuneration

Directors(excluding Outside Directors)

persons

Bonuses andlinkedretirement benefits

remuneration

147

147

–

–

7

13

13

–

–

1

28

28

–

–

5

Statutory Auditors(excluding Outside Statutory
Auditors)
Outside Directors/Statutory
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 aggregated consolidated remuneration of 100 million yen
and above.
4) Significant amount of employee’s salary paid to Directors who concurrently serve as employees
Not applicable.

- 57 -

(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 are classified as investment securities held for purposes other than pureinvestment (strategic shareholdings). The Company only holds investment securities held for purposes other than pure investment (strategic shareholdings), anddoes 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, the Company 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 theCompany’s sustained growth and medium- to long-term corporate value enhancement as well as the maintenance and enhancement of overall relationshipwith the relevant business partners, and reported each year 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 the shareholdings are proportionate to the cost ofcapital.
C. Criteria for exercising voting rights associated with strategic shareholdings
The Company exercises its voting rights appropriately through a comprehensive assessment of whether the shareholding concerned contributes to thesustained 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 issues(Issue)Total book value on the balance
sheet(Millions of yen)

Unlisted stocks

838

Stocks other than unlisted stocks

58

13,234(Stocks in which the Company increased its stake during the current fiscal year)

Number of issues(issue)Total amount of purchase costs
relating to the increase in number of

Reason for increase

shares (Millions of yen)

Unlisted stocks––

Stocks other than unlisted stocks

18

33

–
Purchase through business partner’s shareholding(Stocks in which the Company decreased its stake during the current fiscal year)
Total amount of sales value
Number of issues

relating to the decrease in number(issue)of shares(Millions of yen)

Unlisted stocks

1–

Stocks other than unlisted stocks

1

2(Note) Decrease in unlisted stocks was due to the dissolution of its issuer. Therefore, it did not generate any sales value.

- 58 -

association

E. Information on the number of shares and book value on the balance sheet, etc. per specified investment stocks
Specified investment stocks
Current fiscal year

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the

1,044,679

1,040,086

company concerned. Taking this business relationship into consideration, the Company has been holding a
stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It
is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for

Aeon Co., Ltd.

No
holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholding
3,446

2,495 and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital. The
number of shares of the company concerned that the Company holds increased by 4,593 shares throughpurchase by the business partner’s shareholding association.
The Company purchases rawmaterials etc. from the consolidated subsidiaries of the company concerned.

1,239,000

1,239,000

Taking this business relationship into consideration, the Company has been holding a stake in the company

Sumitomo

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state the

Corporation

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

Yes
1,953

1,535

company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the company concerned. Taking

381,260

381,260

this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state the

Izumi Co., Ltd.

No
quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the
1,652

1,136

company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts financial transactions with the consolidated subsidiaries of the company concerned.

213,000

213,000

Taking this business relationship into consideration, the Company has been holding a stake in the company

Sumitomo Mitsuiconcerned to maintain and enhance stable financial relationship with it. It is difficult to state the quantitativeNo

effect of shareholding. However, the Company verifies the rationale for holding a stake in the company(Note) 3.

Financial Group,
Inc.

853

558

concerned by assessing the appropriateness of the purpose of shareholding and whether risks and benefits
resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts financial transactions with the consolidated subsidiaries of the company concerned.

206,067

206,067

Taking this business relationship into consideration, the Company has been holding a stake in the company

Sumitomo MitsuiNoconcerned to maintain and enhance stable financial relationship with it. It is difficult to state the quantitative

Trust Holdings, Inc.

(Note) 4.
795

643 effect of shareholding. However, the Company verifies the rationale for holding a stake in the company
concerned by assessing the appropriateness of the purpose of shareholding and whether risks and benefits- 59 -

Current fiscal year

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)resulting from the shareholdings are proportionate to the cost of capital.

653,000

653,000

The Company purchases materials etc. from the company concerned. Taking this business relationship into
consideration, the Company has been holding a stake in the company concerned to maintain and enhance thebusiness relationship and cooperation with it. It is difficult to state the quantitative effect of shareholding.

Rengo Co., Ltd.

Yes
However, the Company verifies the rationale for holding a stake in the company concerned by assessing the627

549
appropriateness of the purpose of shareholding and whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital.
The Company purchases rawmaterials etc. from the company concerned. Taking this business relationship

47,50047,500

into consideration, the Company has been holding a stake in the company concerned to maintain andNippon Shinyaku

enhance the business relationship and cooperation with it. It is difficult to state the quantitative effect ofCo., Ltd.

shareholding. However, the Company verifies the rationale for holding a stake in the company concerned by

Yes
390

402

assessing the appropriateness of the purpose of shareholding and whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital.

- 60 -

Current fiscal year

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)

115,000

115,000

The Company purchases rawmaterials etc. from 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 enhance the business relationship and cooperation with it. It is difficult to state theOUG Holdings Inc.

Yes
quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the342

308
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.

109,200

109,200

The Company purchases products from the consolidated subsidiaries of the company concerned.Taking thisbusiness relationship into consideration, the Company has been holding a stake in the company concerned to

Sapporo Holdings

maintain and enhance the business relationship and cooperation with it. It is difficult to state the quantitative

Limitedeffect of shareholding. However, the Company verifies the rationale for holding a stake in the company

Yes
250

217
concerned by assessing the appropriateness of the purpose of shareholding and whether risks and benefits
resulting from the shareholdings are proportionate to the cost of capital.

39,65839,658The Company conducts transactions in processed 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 and enhance the business relationship and cooperation with it. It is difficult to state theLawson, Inc.

No
quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the215

235
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the180,733

180,733
company concerned. Taking this business relationship into consideration, the Company has been holding a

United Super
stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It
Markets Holdings

No
is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for

Inc.

210

173

holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholding
and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital.

42,60042,600

The Company purchases rawmaterials etc. from 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 enhance the business relationship and cooperation with it. It is difficult to state theKaneka Corporation

Yes
quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the
193

110
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the company concerned. Taking

Life Corporation

55,79955,537

No
this business relationship into consideration, the Company has been holding a stake in the company- 61 -

Current fiscal year

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state thequantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in thecompany concerned by assessing the appropriateness of the purpose of shareholding and whether risks and188

165
benefits resulting from the shareholdings are proportionate to the cost of capital. The number of shares of thecompany concerned that the Company holds increased by 262 shares through purchase by the business
partner’s shareholding association.
TheCompanyconductstransactionsinprocessedfoodproductsetc.withtheconsolidatedsubsidiariesofthecompany

129,621

127,906

concerned.Takingthisbusinessrelationshipintoconsideration,theCompanyhasbeenholdingastakeinthecompany
concernedtomaintainandenhancethebusinessrelationshipandcooperationwithit.Itisdifficulttostatethequantitative

Retail Partners Co.,No
effectofshareholding.However,theCompanyverifiestherationaleforholdingastakeinthecompanyconcernedby

Ltd.

(Note) 5.
180

80

assessingtheappropriatenessofthepurposeofshareholdingandwhetherrisksandbenefitsresultingfromtheshareholdingsareproportionatetothecostofcapital.Thenumberofsharesofthecompanyconcernedthatthe
Companyholdsincreasedby1,715sharesthroughpurchasebythebusinesspartner’sshareholdingassociation.
The Company conducts transactions in processed food products etc. with theconsolidated subsidiaries of the36,52036,520company concerned. Taking this business relationship into consideration, the Company has been holding a

Seven & i Holdings

stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

Co., Ltd.

is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for

No
162

130

holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholding
and whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital.

- 62 -

Current fiscal year

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)
TheCompanyconductstransactionsinprocessedfoodproductsetc.withthecompanyconcerned.Takingthisbusiness

129,257

126,351
relationshipintoconsideration,theCompanyhasbeenholdingastakeinthecompanyconcernedtomaintainandenhancethebusinessrelationshipandcooperationwithit.Itisdifficulttostatethequantitativeeffectofshareholding.However,theKansai Super
Companyverifiestherationaleforholdingastakeinthecompanyconcernedbyassessingtheappropriatenessofthepurpose

No

Market Ltd.
145

128 ofshareholdingandwhetherrisksandbenefitsresultingfromtheshareholdingsareproportionatetothecostofcapital.The
numberofsharesofthecompanyconcernedthattheCompanyholdsincreasedby2,906sharesthroughpurchasebythebusinesspartner’sshareholdingassociation.

82,00082,000

The Company purchases rawmaterials etc. from the company concerned. Taking this business relationshipinto consideration, the Company has been holding a stake in the company concerned to maintain andKanematsu

enhance the business relationship and cooperation with it. It is difficult to state the quantitative effect ofCorporation

shareholding. However, the Company verifies the rationale for holding a stake in the company concerned by

Yes
121

90
assessing the appropriateness of the purpose of shareholding and whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital.
TheCompanyconductstransactionsinprocessedfoodproductsetc.withthecompanyconcerned.Takingthisbusiness

56,661

55,929relationshipintoconsideration,theCompanyhasbeenholdingastakeinthecompanyconcernedtomaintainandenhancethebusinessrelationshipandcooperationwithit.Itisdifficulttostatethequantitativeeffectofshareholding.However,theFuji Co., Ltd.

Companyverifiestherationaleforholdingastakeinthecompanyconcernedbyassessingtheappropriatenessofthepurpose
121No

100 ofshareholdingandwhetherrisksandbenefitsresultingfromtheshareholdingsareproportionatetothecostofcapital.The
numberofsharesofthecompanyconcernedthattheCompanyholdsincreasedby732sharesthroughpurchasebythebusinesspartner’sshareholdingassociation.
TheCompanyconductstransactionsinprocessedfoodproductsetc.withthecompanyconcerned.Takingthisbusiness

70,692

69,725relationshipintoconsideration,theCompanyhasbeenholdingastakeinthecompanyconcernedtomaintainandenhancethebusinessrelationshipandcooperationwithit.Itisdifficulttostatethequantitativeeffectofshareholding.However,theInageya Co., Ltd.

Companyverifiestherationaleforholdingastakeinthecompanyconcernedbyassessingtheappropriatenessofthepurpose
117No

110 ofshareholdingandwhetherrisksandbenefitsresultingfromtheshareholdingsareproportionatetothecostofcapital.The
numberofsharesofthecompanyconcernedthattheCompanyholdsincreasedby967sharesthroughpurchasebythebusinesspartner’sshareholdingassociation.
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the20,232

20,089company concerned. Taking this business relationship into consideration, the Company has been holding a
stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

Axial Retailing Inc.

No
is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for97

79 holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholding
and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital. The- 63 -

Current fiscal year

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)number of shares of the company concerned that the Company holds increased by 143 shares throughpurchase by the business partner’s shareholding association.

158,300

158,300

The Company conducts financial transactions with the consolidated subsidiaries of the company concerned.
Taking this business relationship into consideration, the Company has been holding a stake in the company

Mitsubishi UFJ
concerned to maintain and enhance stable financial relationship with it. It is difficult to state the quantitativeNo

effect of shareholding. However, the Company verifies the rationale for holding a stake in the company(Note) 6.

Financial Group,
Inc.

93

63
concerned by assessing the appropriateness of the purpose of shareholding and whether risks and benefits
resulting from the shareholdings are proportionate to the cost of capital.

75,90075,900

The Company conducts transactions in processed food products etc. with the company concerned. Taking
this business relationship into consideration, the Company has been holding a stake in the company

AEON Hokkaido

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state the

Corporation

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

No
91

56
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the33,98233,826company concerned. Taking this business relationship into consideration, the Company has been holding a
stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

Arcs Company,

is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for

Limitedholding a stake in the company concerned by assessing the appropriateness of the purpose of shareholdingNo
81

65 and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital. The
number of shares of the company concerned that the Company holds increased by 156 shares throughpurchase by the business partner’s shareholding association.

- 64 -

Currentfiscalyear

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)

89,25089,250

The Company conducts financial transactions with the company concerned. Taking this business relationshipinto consideration, the Company has been holding a stake in the company concerned to maintain and

The Chiba Bank,

enhance stable financial relationship with it. It is difficult to state the quantitative effect of shareholding.

Ltd.

However, the Company verifies the rationale for holding a stake in the company concerned by assessing the

Yes
64

42

appropriateness of the purpose of shareholding and whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital.
67,20067,200

The Company conducts financial transactions with the company concerned. Taking this business relationshipinto consideration, the Company has been holding a stake in the company concerned to maintain and

The Chugoku

enhance stable financial relationship with it. It is difficult to state the quantitative effect of shareholding.

Bank, Ltd.

However, the Company verifies the rationale for holding a stake in the company concerned by assessing the

Yes
62

64

appropriateness of the purpose of shareholding and whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital.
108,150

108,150

The Company conducts financial transactions with the company concerned. Taking this business relationshipinto consideration, the Company has been holding a stake in the company concerned to maintain and

The San-in Godoenhance stable financial relationship with it. It is difficult to state the quantitative effect of shareholding.

Bank, Ltd.

However, the Company verifies the rationale for holding a stake in the company concerned by assessing the

Yes
60

59

appropriateness of the purpose of shareholding and whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital.
8,000

8,000

The Company conducts financial transactions with the company concerned. Taking this business relationshipinto consideration, the Company has been holding a stake in the company concerned to maintain and

The Bank of Kyoto,enhance stable financial relationship with it. It is difficult to state the quantitative effect of shareholding.

Ltd.

However, the Company verifies the rationale for holding a stake in the company concerned by assessing the

Yes
54

27

appropriateness of the purpose of shareholding and whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the company concerned. Taking
43,817

42,106this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state thequantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

Okuwa Co., Ltd.

No
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks and53

73

benefits resulting from the shareholdings are proportionate to the cost of capital. The number of shares of thecompany concerned that the Company holds increased by 1,711 shares through purchase by the business
partner’s shareholding association.

- 65 -

Currentfiscalyear

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the39,56237,990company concerned. Taking this business relationship into consideration, the Company has been holding a
stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

OM2 Network Co.,is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale forLtd.

holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholdingNo
49

34 and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital. The
number of shares of the company concerned that the Company holds increased by 1,572 shares throughpurchase by the business partner’s shareholding association.

33,67433,674The Company conducts transactions in processed food products etc. with the company concerned. Taking
this business relationship into consideration, the Company has been holding a stake in the company

MINISTOPCo.,

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state theLtd.

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

No
49

49
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the company concerned. Taking

19,665

19,180this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state thequantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

Albis Co., Ltd.

No
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks and48

39

benefits resulting from the shareholdings are proportionate to the cost of capital. The number of shares of thecompany concerned that the Company holds increased by 485 shares through purchase by the business
partner’s shareholding association.

- 66 -

Currentfiscalyear

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the47,25047,250company concerned. Taking this business relationship into consideration, the Company has been holding a

H2O Retailingstake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

Corporation

is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for

No
43

37

holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholding
and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts financial transactions with the consolidated subsidiaries of the company concerned.

60,500– Taking this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance stable financial relationship with it. It is difficult to state the quantitative
effect of shareholding. However, the Company verifies the rationale for holding a stake in the company

Hirogin Holdings,

No
concerned by assessing the appropriateness of the purpose of shareholding and whether risks and benefits

Inc.

(Note) 7.
resulting from the shareholdings are proportionate to the cost of capital. Effective October 1, 2020, The
40–
Hiroshima Bank, Ltd. established Hirogin Holdings, Inc. as its wholly owning parent company, through soleshare transfer method, and its shares were transferred.As a result, the number of shares of Hirogin Holdings,
Inc. that the Company holds increased by 60,500 shares.
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the

15,84015,840company concerned. Taking this business relationship into consideration, the Company has been holding a

Valor Holdings Co.,

stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

Ltd.

is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for

No
39

30

holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholding
and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital.

149,292

149,292

The Company conducts financial transactions with the consolidated subsidiaries of the company concerned.
Taking this business relationship into consideration, the Company has been holding a stake in the company

Mebuki Financial
Group, Inc.
38

concerned to maintain and enhance stable financial relationship with it. It is difficult to state the quantitativeNo

effect of shareholding. However, the Company verifies the rationale for holding a stake in the company(Note) 8.

32
concerned by assessing the appropriateness of the purpose of shareholding and whether risks and benefits
resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the company concerned. Taking

AEON Kyushu
14,762

6,917 this business relationship into consideration, the Company has been holding a stake in the company

Co., Ltd.
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state the- 67 -

No

Currentfiscalyear

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in thecompany concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital. The number of shares of thecompany concerned that the Company holds increased by 345 shares through purchase by the business
28

12partner’s shareholding association.
In addition, effective September 1, 2020, an absorption-type merger was carried out in whichAEON
Kyushu Co., Ltd., a surviving company, absorbed Maxvalu Kyushu Co., Ltd., an extinct company.As aresult, the number of shares the Company holds inAeon Kyushu Co., Ltd. increased by 7,500 shares.

4,400

4,400

The Company conducts transactions in processed 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 and enhance the business relationship and cooperation with it. It is difficult to state theBelc Co., Ltd.

No
quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the27

25company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.

34,00034,000

The Company conducts financial transactions with the consolidated subsidiaries of the company concerned.
Taking this business relationship into consideration, the Company has been holding a stake in the company

Yamaguchi
concerned to maintain and enhance stable financial relationship with it. It is difficult to state the quantitativeNo

effect of shareholding. However, the Company verifies the rationale for holding a stake in the company(Note) 9.

Financial Group,
Inc.

25

20
concerned by assessing the appropriateness of the purpose of shareholding and whether risks and benefits
resulting from the shareholdings are proportionate to the cost of capital.

- 68 -

Currentfiscalyear

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)

11,00011,000

The Company conducts transactions in processed food products etc. with the company concerned. Taking
this business relationship into consideration, the Company has been holding a stake in the company

HEIWADO Co.,

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state theLtd.

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

No
24

20
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the company concerned. Taking

64,35063,467this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state thequantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

Poplar Co., Ltd.

No
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks and2229

benefits resulting from the shareholdings are proportionate to the cost of capital. The number of shares of thecompany concerned that the Company holds increased by 883 shares through purchase by the business
partner’s shareholding association.

44,20044,200

The Company conducts financial transactions with the consolidated subsidiaries of the company concerned.
Taking this business relationship into consideration, the Company has been holding a stake in the company

Resona Holdings,
Inc.
20

concerned to maintain and enhance stable financial relationship with it. It is difficult to state the quantitativeNo

effect of shareholding. However, the Company verifies the rationale for holding a stake in the company(Note) 10.

14
concerned by assessing the appropriateness of the purpose of shareholding and whether risks and benefits
resulting from the shareholdings are proportionate to the cost of capital.

10,00010,000

The Company conducts transactions in processed 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 and enhance the business relationship and cooperation with it. It is difficult to state the

Eco’s Co., Ltd.

No
quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the
19

16
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.

6,000

6,000

The Company conducts transactions in processed 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 and enhance the business relationship and cooperation with it. It is difficult to state theHalows Co., Ltd.

No
quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the17

16
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.

- 69 -

Currentfiscalyear

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)
The Company conducts transactions in processed food products etc. with thecompany concerned. Taking

22,76921,854

this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state thequantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

Yamanaka Co., Ltd.

No
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks and16

12

benefits resulting from the shareholdings are proportionate to the cost of capital. The number of shares of thecompany concerned that the Company holds increased by 915 shares through purchase by the business
partner’s shareholding association.
The Company conducts transactions in processed food products etc. with the company concerned. Taking

4,398

4,163

this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state thequantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

Kanemi Co., Ltd.

No
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks and1211

benefits resulting from the shareholdings are proportionate to the cost of capital. The number of shares of thecompany concerned that the Company holds increased by 235 shares through purchase by the business
partner’s shareholding association.

10,00010,000

The Company conducts transactions in processed food products etc. with the company concerned. Taking
this business relationship into consideration, the Company has been holding a stake in the company

Ocean System

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state the

Corporation

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

No
11

8
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.

- 70 -

Currentfiscalyear

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)

5,000

5,000

The Company conducts transactions in processed food products etc. with the company concerned. Taking
this business relationship into consideration, the Company has been holding a stake in the company

Mammy Mart

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state the

Corporation

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

No
11

9
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the company concerned. Taking

16,242

15,202

this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state thequantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

Oomitsu Co., Ltd.

No
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks and119benefits resulting from the shareholdings are proportionate to the cost of capital. The number of shares of thecompany concerned that the Company holds increased by 1,040 shares through purchase by the business
partner’s shareholding association.

5,845

5,845

The Company conducts transactions in processed food products etc. with the company concerned. Taking
this business relationship into consideration, the Company has been holding a stake in the company

Maxvalu

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state the

Nishinihon Co., Ltd.

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the

No
10

8
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.

2,000

2,000

The Company conducts transactions in processed food products etc. with thecompany concerned. Taking
this business relationship into consideration, the Company has been holding a stake in the company

Maruyoshi Center

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state theInc.

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in theNo
64
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the

3,000

3,000
company concerned. Taking this business relationship into consideration, the Company has been holding aCentral Forest
stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

No

is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for(Note) 11.

Group, Inc.
55holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholding
and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital.

- 71 -

Currentfiscalyear

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)
The Company conducts transactions in processed food products etc. with the company concerned. Taking

1,944

1,762

this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state the

Kakiyasu Honten

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in theCo., Ltd.

company concerned by assessing the appropriateness of the purpose of shareholding and whether risks and

No
5

4

benefits resulting from the shareholdings are proportionate to the cost of capital. The number of shares of thecompany concerned that the Company holds increased by 182 shares through purchase by the business
partner’s shareholding association.
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the

5,500

5,500
company concerned. Taking this business relationship into consideration, the Company has been holding a

Olympic Group

stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

Corporation

is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for

No
4

3

holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholding
and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the company concerned. Taking

200

100

this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state the

COSMOS
quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in the
PharmaceuticalNo
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andCorporation

3

2 benefits resulting from the shareholdings are proportionate to the cost of capital. Effective June 1, 2020,
COSMOS Pharmaceutical Corporation conducted a two-for-one stock split.As a result, the number ofshares of the company that the Company holds increased by 100 shares.

- 72 -

Current fiscal year

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)

3,300

3,300

The Company conducts transactions in processed food products etc. with the company concerned. Taking
this business relationship into consideration, the Company has been holding a stake in the company

Gourmet Kineya

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state theCo., Ltd.

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in theNo33
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.

708

708

The Company conducts transactions in processed food products etc. with the company concerned. Taking
this business relationship into consideration, the Company has been holding a stake in the company

MaxvaluTokai Co.,

concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state theLtd.

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in theNo11
company concerned by assessing the appropriateness of the purpose of shareholding and whether risks andbenefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the

6,050

6,050
company concerned. Taking this business relationship into consideration, the Company has been holding a
stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

Three F Co., Ltd.

No
is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for11

holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholding
and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital.
The Company conducts transactions in processed food products etc. with the consolidated subsidiaries of the

1,702

1,492

company concerned. Taking this business relationship into consideration, the Company has been holding a
stake in the company concerned to maintain and enhance the business relationship and cooperation with it. It

Isetan Mitsukoshi

is difficult to state the quantitative effect of shareholding. However, the Company verifies the rationale for

Holdings Ltd.

holding a stake in the company concerned by assessing the appropriateness of the purpose of shareholdingNo
1

0 and whether risks and benefits resulting from the shareholdings are proportionate to the cost of capital. The
number of shares of the company concerned that the Company holds increased by 210 shares throughpurchase by the business partner’s shareholding association.
The Company conducts financial transactions with the company concerned. Taking this business relationship–60,500

into consideration, the Company has been holding a stake in the company concerned to maintain andenhance stable financial relationship with it. It is difficult to state the quantitative effect of shareholding.

The Hiroshima
However, the Company verifies the rationale for holding a stake in the company concerned by assessing theBank, Ltd.
–27

appropriateness of the purpose of shareholding and whether risks and benefits resulting from theshareholdings are proportionate to the cost of capital. Effective October 1, 2020, The Hiroshima Bank, Ltd.
Hirogin Holdings, Inc. established Hirogin Holdings, Inc. as its wholly owning parent company, through- 73 -Yes

Current fiscal year

Previous fiscal year

Number of shares

Number of shares(Shares)(Shares)

Whether theissuer holds a

Issue

Purpose and quantitative effect of shareholding and reason for increase in its stake
Book value on theBook value on thestake in thebalance sheet

balance sheet

Company(Millions of yen)

(Millions of yen)sole-share transfer method, and its shares were transferred.

The Company conducts transactions in processed food products etc. with the company concerned. Taking
–

5,000

this business relationship into consideration, the Company has been holding a stake in the company
concerned to maintain and enhance the business relationship and cooperation with it. It is difficult to state theMaxvalu Kyushu

quantitative effect of shareholding. However, the Company verifies the rationale for holding a stake in theCo., Ltd.

company concerned by assessing the appropriateness of the purpose of shareholding and whether risks and

No
–

9

benefits resulting from the shareholdings are proportionate to the cost of capital. Effective September 1, 2020,
absorption-type merger was carried out in whichAEON Kyushu Co., Ltd., a surviving company, absorbed
Maxvalu Kyushu Co. Ltd., an extinct company.

–

2,052 The Company conducted transactions in processed food products etc. with the consolidated subsidiaries ofSagami Holdings

the company concerned. Taking this business relationship into consideration, the Company had held a stake
No

Corporation–2in the company concerned to enhance the business relationship and cooperation with it. However, theCompany sold all of its stake in Sagami Holdings Corporation during the current fiscal year.

(Notes)1. "–" denotes that such stocks are not held.
2. Although the book values of the stocks of The Chiba Bank, Ltd. and the companies thereunder on the consolidated balance sheet are not larger than
1% of the Company’s share capital, we covered the top 60 issues 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 the Company’s shares.
5. Marukyu Co., Ltd., a consolidated subsidiary of Retail Partners Co., Ltd., holds the Company’s shares.
6. MUFG Bank, Ltd., a consolidated subsidiary of Mitsubishi UFJ Financial Group, Inc., holds the Company’s shares.
7. The Hiroshima Bank, Ltd., a consolidated subsidiary of Hirogin Holdings, Inc., holds the Company’s shares.
8. Joyo Bank, Ltd. and TheAshikaga Bank, Ltd., consolidated subsidiaries of Mebuki Financial Group, Inc., hold the Company’s shares.
9. The Yamaguchi Bank, Ltd., a consolidated subsidiary of Yamaguchi Financial Group, Inc., holds the Company’s shares.
10. Resona Bank, Limited., a consolidated subsidiary of Resona Holdings, Inc., holds the Company’s shares.
11. Tokan Co., Ltd., a consolidated subsidiary of Central Forest Group, Inc., holds the Company’s shares.

- 74 -

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, and Preparation Methods ofConsolidated Financial Statements” (Ordinance of Ministry of Finance No. 28, 1976 / hereinafter referred 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 ofFinancial 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, the Company 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/non-consolidated financial statements for thecurrent fiscal year (from April 1, 2020 through March 31, 2021) were audited by KPMG AZSALLC.
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, in order to establish a mechanism tocorrectly understand the details of accounting standards, the Company has joined the FinancialAccounting Standards Foundation. In addition, the Company attends therelevant seminars organized by external institutions and subscribes to accounting magazines to address any change in accounting standards etc. in a timely manner.

- 75 -

1. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
1) Consolidated Balance Sheets(Millions of yen)Previous fiscal year
(As of March 31, 2020)

Current fiscal year
(As of March 31, 2021)

AssetsCurrent assets
Cash and deposits

8,244

8,476

Notes and accounts receivable - trade
Merchandise and finished goods

27,501
11,057

26,1389,592Work in process
Raw materials and supplies

647
5,887

377
5,797

Other
Allowance for doubtful accounts

2,274
(15)

1,900
(12)

Total current assets

55,59752,26954,25861,928Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation(37,644)

Buildings and structures, net

16,613*2(43,776)
18,152*2

Machinery, equipment and vehicles

62,66469,987

Accumulated depreciation(48,118)(54,174)

Machinery, equipment and vehicles, net

14,545*2

Tools, furniture and fixtures

15,812

*2

4,718

5,048

Accumulated depreciation(3,154)(3,480)Tools, furniture and fixtures, net

1,563

Land
Leased assets

18,3927,879*2Accumulated depreciation

1,567
18,8398,344*2(2,467)(3,279)Leased assets, net

5,411

5,065

Construction in progress

2,545

908

Total property, plant and equipment

59,072

60,346

3,050

2,779

Intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates

10,282121*1

Long-term loans receivable
Retirement benefit asset

13,314
166

*1

22
71

18
1,580

Deferred tax assets
Other

277
3,474

317
2,866

Allowance for doubtful accounts

(117)

(112)

Total investments and other assets

14,13318,15076,256

81,277

131,854

133,546

Total non-current assets
Total assets- 76 -

(Millions of yen)Previous fiscal year
(As of March 31, 2020)

Current fiscal year
(As of March 31, 2021)

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

23,165
8,080

Current portion of long-term borrowings
Lease obligations

*2

1,887
855

20,236
7,890
*2

2,657
905

Accounts payable - other
Income taxes payable

8,942
523

9,146
187

Accrued consumption taxes
Provision for bonuses

448
850

264
850

Other

1,391

1,376

Total current liabilities

46,14543,515

Non-current liabilities
Long-term borrowings

*2

3,933

*2

4,649

Lease obligations
Deferred tax liabilities

4,658
550

4,296
1,439

Retirement benefit liability
Other

854
656

1,308
657

Total non-current liabilities

10,652

12,351

56,79855,866

Shareholders’equity
Share capital

6,716

6,716

Capital surplus
Retained earnings

22,08645,67622,08645,200Treasury shares(2,657)(2,697)

Total shareholders’equity

71,821

71,305

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

3,832
(2)

5,944
34

Foreign currency translation adjustment
Remeasurements of defined benefit plans40(1,181)34(251)

Total accumulated other comprehensive income

2,688

5,761

Total liabilities
Net assets

Accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets- 77 -

545

612

75,056

77,680131,854

133,546

2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
Previous fiscal year
(From April 1, 2019
to March 31, 2020)
Net sales
Cost of sales*1

Gross profit

245,820
190,340(Millions of yen)
Current fiscal year
(From April 1, 2020
to March 31, 2021)
234,152*1
184,688

55,480

Selling, general and administrative expenses

52,862*2

Operating profit (loss)

49,464
49,794*2

2,617

Non-operating income
Interest income

(330)

17

16

Dividend income
Rental income from real estate

331
166

321
172

Other

383

385

Total non-operating income

899

896

Interest expenses
Loss on abandonment of inventories

216
56

233
–

Other

124

148

Total non-operating expenses

397

381

3,118

183

Non-operating expenses

Ordinary profit
Extraordinary income
Gain on disposal of non-current assets

144

*3

Gain on bargain purchase
Gain on sale of investment securities
Total extraordinary income

*3

316

–
7

997
1

151

1,315

Extraordinary losses
Loss on disposal of non-current assets
Impairment losses*4*5

Extra retirement payments
Costs related to voluntary recovery of productTotal extraordinary losses

309
84

*4
*5

260
299

90
47

204
–

532

764

Profit before income taxes

2,737

734

Income taxes - current

1,028

328

Income taxes - deferred

24

(79)

Total income taxes

1,052

249

Profit

1,684

485

30

70

1,653

414

Profit attributable to non-controlling interests
Profit attributable to owners of parent- 78 -

Consolidated Statements of Comprehensive Income

1,684(Millions of yen)
Current fiscal year
(From April 1, 2020
to March 31, 2021)
485

Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(1,441)
(11)

2,111
37

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using
equity method
Total other comprehensive income

(358)

929

4

(6)

Previous fiscal year
(From April 1, 2019
to March 31, 2020)
ProfitOther comprehensive income*

Comprehensive income(1,807)

*

3,072

(122)

3,558

(153)
30

3,487
70

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests- 79 -

3) Consolidated Statements of Changes in NetAssets
For the previous fiscal year (From April 1, 2019 to March 31, 2020)(Millions of yen)
Shareholders’equity
Share capital
Balance at beginning of period

Capital surplus
6,716

Retained earnings

22,086

Treasury shares

44,912

Total shareholders’equity(2,635)71,079Changes during period
Dividends of surplus

(890)

(890)

Profit attributable to owners ofparent

1,653

1,653

Purchase of treasury shares

(21)

(21)

Net changes in items other thanshareholders’equity
Total changes during period

–

–

763

(21)

741

Balance at end of period

6,716

22,08645,676(2,657)

71,821

Accumulated other comprehensive income
Valuation difference on
Deferred gains oravailable-for-salelosses on hedges
securities
Balance at beginning of period

5,273

8

Total accumulated
Foreign currency
Remeasurements ofother comprehensive
translation adjustment defined benefit plansincome
36

(822)

4,496

Non-controllinginterests

Total net assets

519

76,094

Changes during period
Dividends of surplus(890)

Profit attributable to owners ofparent

1,653

Purchase of treasury shares(21)

Net changes in items other thanshareholders’equity(1,441)

(11)

4

(358)

(1,807)26(1,780)Total changes during period(1,441)

(11)

4

(358)

(1,807)26(1,038)

Balance at end of period

3,832

(2)

40

(1,181)

2,688

545

75,056- 80 -

For the current fiscal year (From April 1, 2020 to March 31, 2021)(Millions of yen)
Shareholders’equity
Share capital
Balance at beginning of period

Capital surplus
6,716

Retained earnings

22,086

Treasury shares

45,676

Total shareholders’equity(2,657)

71,821

Changes during period
Dividends of surplus

(889)

(889)

Profit attributable to owners ofparent414

414

Purchase of treasury shares

(40)

(40)

Net changes in items other thanshareholders’equity
Total changes during period

–

–

(475)

(40)

(515)

Balance at end of period

6,716

22,08645,200(2,697)71,305

Accumulated other comprehensive income
Valuation difference on
Deferred gains oravailable-for-salelosses on hedges
securities
Balance at beginning of period

3,832

(2)

Total accumulated
Foreign currency
Remeasurements ofother comprehensive
translation adjustment defined benefit plansincome40(1,181)

2,688

Non-controllinginterests

Total net assets

545

75,056

Changes during period
Dividends of surplus(889)

Profit attributable to owners ofparent414

Purchase of treasury shares(40)

Net changes in items other thanshareholders’equity

2,111

37

Total changes during period

2,111

37

Balance at end of period

5,944

34

(6)

929

3,072

(6)

929

3,072

66

2,623

34

(251)

5,761

612

77,680- 81 -

66

3,139

4) Consolidated Statements of Cash Flows(Millions of yen)
Current fiscal year
(From April 1, 2020
to March 31, 2021)

Previous fiscal year
(From April 1, 2019
to March 31, 2020)
Cash flows from operating activities
Profit before income taxes

2,737

734

Depreciation
Impairment losses

6,801
84

7,798
299

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

(10)
(413)

(7)
(266)

Gain on bargain purchase
Extra retirement payments

–
90

(997)
204

Interest and dividend income
Interest expenses

(348)
216

(338)
233

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

(7)
165

(1)
(56)

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

3,208(1,821)

2,221
2,285

Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes

84
(199)

(3,566)(198)

Other, net(1,265)(86)

Subtotal

9,322

8,259

Interest and dividends received
Interest paid

346
(216)

336
(233)

Income taxes paid
Extra retirement payments

(662)
(181)

(597)
(90)

Net cash provided by (used in) operating activities

8,608

7,673

(33)

(34)

22
(8,739)2(5,418)

460

1,008

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–*2(1,195)18247(8,271)(5,388)Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

1,700
1,850

(190)
3,910

Repayments of long-term borrowings
Repayments of lease obligations(1,927)(925)(3,924)(914)

Dividends paid
Purchase of treasury shares

(890)
(21)

(889)
(40)

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

Other, net
Net cash provided by (used in) financing activities

(3)

(3)

(219)

(2,053)

Net increase (decrease) in cash and cash equivalents

117

231

Cash and cash equivalents at beginning of period

8,127

8,244

Cash and cash equivalents at end of period*1- 82 -

8,244

*1

8,476

[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:
28
Names of major consolidated subsidiaries are referred to in “4. Subsidiaries and other affiliated entities” under “I. Overview of Company,” therefore they areomitted here.
Starting from the fiscal year ended March 31, 2021, Toraku Foods Co., Ltd., whose shares were newly acquired, and one other company are included in the scopeof consolidation.
(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 differ 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- Those with fair value
Stated at fair value as of the book-closing date.
(Any valuation difference is booked directly to net assets and the cost of securities sold are computed by the moving-average method.)- Those without fair value
Stated at their cost determined by the moving-average method.
2) Derivatives
Stated at fair value.

- 83 -

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 1stApril 1998 and the facilities attached to buildings and structures acquired on and afterApril 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 the internally 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 aresidual 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, 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 asprovisions.
(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 the gains 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 theamount that would be required if all the employees retired voluntarily at the fiscal year end is treated as retirement benefit obligation.

- 84 -

(5) 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 with designated 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 in their value; and items that avoid the risks
associated with foreign exchange fluctuations with their cash flow being fixed.
3) Hedging policy
The Company adopts a hedging policy that stipulates only risks associated with foreign exchange/interest rate fluctuations in the future should be hedged.
Therefore, the Company does not engage in any speculative transactions or derivative 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 approach is expected to offset or limit tocertain extent the effects of foreign exchange/interest rate fluctuations at the start of hedging and throughout subsequent periods. Hence, the assessment of theeffectiveness 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.
(6) Method and period for goodwill amortization
Goodwill is amortized over a period of 5 years using the straight-line method.
(7) 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.
(8) Other important matters in preparing the consolidated financial statements
1) Accounting treatment of consumption tax
National and local consumption taxes are excluded from the reported amounts in accounting procedures.
2) Application of consolidated taxation system
The Company applies a consolidated taxation system.
3) Application of tax effect accounting related to the transition from a consolidated taxation system to a group tax sharing system
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 and some ofits consolidated subsidiaries in Japan have 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 the treatment prescribed in Paragraph 3 of the “Practical Solution on the Treatment of Tax EffectAccounting 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.

- 85 -

(Significant accounting estimates)
1. Impairment of non-current assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2021
The book value of business assets (including common assets) of Marudai Food Co., Ltd.: 33,116 million yen(Property, plant and equipment: 30,548 million yen / Intangible assets: 2,568 million yen)
The Company determined that there was an indication of impairment of thebusiness assets of Marudai Food Co., Ltd.due to the continuous recording of operating
loss and reviewed the necessity of recording impairment losses. However, as it was determined that the undiscounted future cash flows would exceed the book valueof 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 isrequired 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 is required, 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 approvedby 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 ofrental 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 high degree of uncertainty.
- With regard to the net sales plan, it is assumed that the plan for the next fiscal year will be at the same level as the degree of achievement of the budget forthe current fiscal year, depending on the division, and that the plans for the next fiscal year and beyond will remain at the same level, taking into accountchanges in the market environment for the industry as a whole.
- With regard to the cost of sales plan, the unit price of raw materials used is based on the projected unit price in consideration of current market trends andreflects the cost reduction effect of capital investment in the production division.
The impact of COVID-19 is expected to continue through the first half of the fiscal year, followed by a gradual recovery in the second half.
3) Effect on the consolidated financial statements for the fiscal year ending March 31, 2022
There may be a significant impact on the consolidated financial statements for the fiscal year ending March 31, 2022 if actual amounts differ from theestimates due to uncertain future economic conditions or changes in the business environment.

- 86 -

2. Recoverability of deferred tax assets(1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2021
Deferred tax assets before offsetting with deferred tax liabilities: 2,187 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 thetiming and amount of taxable income that can be earned in the future based on the future profit plan formulated on the basis of the management plan approvedby 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 increase significantly as compared to the actual results of the current fiscal year, taxable
income is estimated based on the assumption that 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, 2022
There may be a significant impact on the consolidated financial statements for the fiscal year ending March 31, 2022 if the actual timing and amounts differ
from the estimates due to uncertain future economic conditions or changes in the business environment. In addition, changes in the effective statutory tax rate
due to tax reforms may also have a significant impact on those consolidated financial statements.

- 87 -

(New accounting standards not yet applied)- Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020)- Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30, March 26, 2021)(1) Summary
The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) jointly developed a comprehensive
accounting standard for revenue recognition and announced “Revenue from Contracts with Customers” (IFRS 15 by IASB and Topic 606 by FASB) in May 2014.
As IFRS 15 and Topic 606 were to be applied from the fiscal years beginning on or after January 1, 2018 and after December 15, 2017, respectively, the ASBJ
developed a comprehensive accounting standard for revenue recognition and announced it together with an implementation guidance.
The ASBJ’s basic policy for developing the accounting standard for revenue recognition was to determine an accounting standard upon incorporating the basic
principles of IFRS 15 for comparability between financial statements, which is one of the benefits of compatibility with IFRS 15, and to add an alternative treatment
to the extent it does not impair comparability for any items that require special consideration regarding business practices customary in Japan.
(2) Effective date
The standards are scheduled to be applied from the beginning of the fiscal year ending March 31, 2022.
(3) Effect of application of the standards
As a result of the application of the “Accounting Standard for Revenue Recognition” and other related standards, we have decided to change the method of
deducting a portion of distribution expenses and promotion expenses, etc., which were previously recorded as selling, general and administrative expenses, from net
sales. As a result, net sales are expected to decrease by 11,900 million yen and selling, general and administrative expenses are expected to also decrease by 11,900
million yen.
- Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019)- Accounting Standard for Measurement of Inventories (ASBJ Statement No. 9, July 4, 2019)- Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019)- Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, July 4, 2019)- Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No. 19, March 31, 2020)(1) Summary
As the IASB and FASB have both formulated similar detailed guidance on fair value measurement (IFRS 13 “Fair Value Measurement” under International
Financial Reporting Standards (IFRS), and Accounting Standards Codification Topic 820 “Fair Value Measurement” under US GAAP), the ASBJ announced“Accounting Standard for Fair Value Measurement” and other standards to seek compatibility between Japanese GAAP and international accounting standards
mainly relating to guidance on, and the disclosure of the fair value of financial instruments.
The ASBJ’s basic policy for developing the Accounting Standard for Fair Value Measurement was to incorporate basically all the provisions of IFRS 13 toimprove the comparability between financial statements of corporations both inside and outside Japan by adopting a unified calculation method, as well as to establish
other treatments for individual items in consideration of business practices customary in Japan to the extent it does not greatly impair comparability between different
financial statements.
(2) Effective date
The standards are scheduled to be applied from the beginning of the fiscal year ending March 31, 2022.
(3) Effect of application of the standards
The total numerical value of the effect of the application is being determined as of the time of preparation of these consolidated financial statements.
(Changes in presentation)(Application of “Accounting Standard for Disclosure ofAccounting Estimates”)
The Company has adopted the “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31, March 31, 2020) starting with theconsolidated financial statements related to the end of the current fiscal year, and provides notes on significant accounting estimates in the consolidated financial
statements.
However, in accordance with the transitional treatment prescribed in the proviso in Paragraph 11 of the accounting standard, details related to the previous fiscal
year are not described in the notes.

- 88 -

(Consolidated balance sheets)*1. The following are related to subsidiaries and associates:
Previous fiscal year

Current fiscal year

(As of March 31, 2020)(As of March 31, 2021)

121 million yen

166 million yen

Shares of subsidiaries and associates*2. Pledged assets and secured debts
Pledged assets and secured debts are as follows:
Pledged assets

Previous fiscal year

Current fiscal year

(As of March 31, 2020)(As of March 31, 2021)

Millions of yen

Millions of yen

Buildings and structures

46

40

Machinery, equipment and vehicles

84

62

Land

3

3

Total

134

107

Secured debts
Previous fiscal year

Current fiscal year

(As of March 31, 2020)(As of March 31, 2021)

Millions of yen

Millions of yen

Current portion of long-term borrowings

38

38

Long-term borrowings

137

99

Total

175

137

3. 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, 2020)(As of March 31, 2021)

Total amounts in the overdraft agreements

22,250 million yen

32,760 million yen

Borrowing balance

7,980 million yen

7,790 million yen

Difference

14,270 million yen

24,970 million yen- 89 -

(Consolidated statements of income)*1. 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 in profitability, 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, 2019 to March 31, 2020)(From April 1, 2020 to March 31, 2021)

25 million yen(24) million yen*2. Selling, general and administrative expenses(1) Major items and their amounts were as follows:
Previous fiscal year

Current fiscal year

(From April 1, 2019 to March 31, 2020)(From April 1, 2020 to March 31, 2021)

Distribution expenses

30,052 million yen

28,019 million yen

Salaries and allowances

6,595 million yen

6,498 million yen

Provision for bonuses

426 million yen

401 million yen

Retirement benefit expenses

310 million yen

399 million yen

Provision of allowance for doubtful accounts

21 million yen

3 million yen(2) Research and development expenses included in general and administrative expenses are as follows (they are not included in manufacturing cost for the current
fiscal year):Previous fiscal year

Current fiscal year

(From April 1, 2019 to March 31, 2020)(From April 1, 2020 to March 31, 2021)

732 million yen

673 million yen*3. Gain on disposal of non-current assets
Primarily generated from the sales of real estate for rent and other.
*4. Loss on disposal of non-current assets
Primarily comprised of loss on retirement of, and removal expenses for buildings and structures and machinery, equipment and vehicles.
*5. Impairment losses
The Group recorded impairment losses on the following assets:
Previous fiscal year (FromApril 1, 2019 to March 31, 2020)
Category

Type

Location

AmountReal estate for rent and other (Land,

Fukushima Prefecture,buildings, etc.)

etc.

Artwork

Tools, furniture and fixtures, and structures

Osaka Prefecture, etc.

33 million yen

Rental assets

Real estate for rent and other (Buildings)

Ehime Prefecture

0 million yen

Idle assets

Total

–

–

51 million yen

84 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 therecoverable value of idle assets or rental assets has fallen below book value due to declines in market prices or profitability or when market prices for artworks
have declined significantly, the book value of these assets has been reduced to their recoverable value. The impairment losses consisted of 51 million yen for realestate for rent and other (“Other” under “Investments and other assets”), 25 million yen for tools, furniture and fixtures and 8 million yen for structures.
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. and value in use is calculated by discounting the future cash flows by 3.2%.
The recoverable amounts for artwork were calculated based on independent appraisals obtained from third-party art experts and others. If the estimatedrecoverable amount is significantly below the carrying amount, the Company records an impairment loss on artwork by writing down the carrying amount to
the recoverable amount.

- 90 -

Current fiscal year (FromApril 1, 2020 to March 31, 2021)
Category

Type

Location

Real estate for rent and other (Land,

Idle assets

buildings, etc.)
Total

–

AmountNagasaki Prefecture, etc.

299 million yen–

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 therecoverable value of idle assets has fallen below the book value due to declines in market prices, the book value of these assets has been reduced to theirrecoverable value. All of the impairment losses of 299 million yen relate to real estate for rent and other (“Other” under “Investments and other assets”).
The recoverable value of idle assets was measured by the net realizable value assessed based on the appraisal value, etc.
(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, 2019 to March 31, 2020) (From April 1, 2020 to March 31, 2021)
Valuation difference on available-for-sale securities
Increase (decrease) during the year

(2,025)2,994

Reclassification adjustments

(7)

(1)

Amount before tax effect(2,033)

2,993

591

(882)

(1,441)

2,111

Increase (decrease) during the year

(16)

54

Amount before tax effect

(16)

54

5

(16)

(11)

37

Increase (decrease) during the year

(613)

960

Reclassification adjustments

135

282

Amount before tax effect

(477)

1,243

Tax effect

119

(313)

Adjustments for retirement benefits

(358)

929

4

(6)

(1,807)

3,072

Tax effect
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Tax effect
Deferred gains or losses on hedges
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- 91 -

(Consolidated statements of changes in net assets)
Previous fiscal year (FromApril 1, 2019 to March 31, 2020)
1. Class and total number of issued shares and treasury shares
Balance at beginning of the
fiscal year (Shares)

Increase during the fiscal year Decrease during the fiscal year Balance at end of the fiscal year
(Shares)(Shares)(Shares)Issued shares
Common stock

26,505,581––

26,505,581

Total

26,505,581––

26,505,581

Common stock

1,070,631

10,630–1,081,261

Total

1,070,631

10,630–1,081,261

Treasury shares(Note)

Increase in treasury shares of 10,630 shares consists of an acquisition of 10,500 shares through the off-hours trading system (ToSTNeT-3) and purchase of
odd lots of 130 shares.

2. Dividends(1) Dividends paid
Resolution

Ordinary General
Meeting of Shareholders
held on June 27, 2019

Class of shares

Commonstock

Source ofdividends

Total amount ofdividends (Millions

Dividends per share(Yen)of yen)Retained earnings

890

35

Record date

Effective date

March 31, 2019

June 28, 2019(2) Dividends whose record date falls in the current fiscal year but whose effective date comes after March 31, 2020
Resolution

Ordinary General
Meeting of Shareholders
held on June 26, 2020

Class of shares

Commonstock

Source ofdividends

Retained earnings

Total amount ofdividends (Millions

Dividends per share(Yen)of yen)889

35

Record date

Effective date

March 31, 2020

June 29, 2020

Current fiscal year (FromApril 1, 2020 to March 31, 2021)
1. Class and total number of issued shares and treasury shares
Balance at beginning of the
fiscal year (Shares)

Increase during the fiscal year Decrease during the fiscal year Balance at end of the fiscal year
(Shares)(Shares)(Shares)Issued shares
Common stock

26,505,581––

26,505,581

Total

26,505,581––

26,505,581

Common stock

1,081,261

21,739–1,103,000

Total

1,081,261

21,739–1,103,000

Treasury shares(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 of shares

Source ofTotal amount of

Dividends per share- 92 -

Record date

Effective date

dividends

dividends (Millions(Yen)of yen)Ordinary General
Meeting of Shareholders
held on June 26, 2020

Commonstock

Retained earnings

889

35

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

Resolution

Ordinary General
Meeting of Shareholders
held on June 25, 2021

Class of shares

Commonstock

Source ofdividends

Retained earnings

Total amount ofdividends (Millions

Dividends per shareof yen)762- 93 -(Yen)

30

Record date

Effective date

March 31, 2021

June 28, 2021

(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 as follows:
Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

Cash and deposits

8,244 million yen

8,476 million yen

Cash and cash equivalents

8,244 million yen

8,476 million yen*2. Breakdown of the major assets and liabilities of a company that became a newly consolidated subsidiary through acquisition of shares
The breakdown of the assets and liabilities at the time of the consolidation ofToraku Foods Co., Ltd. due to the acquisition of its 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(1,198) million yen

Non-current liabilities(1,992) million yen

Gain on bargain purchase(997) million yen

Acquisition price of shares
Cash and cash equivalents
Net: Expenditures for the acquisition

1,200 million yen(4) million yen
1,195 million yen

3. Significant non-cash transactions
Newly recorded assets and liabilities related to finance lease transactions were as follows:
Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

Assets and liabilities related to finance lease transactions

865 million yen

548 million yen(Leases)
Finance lease transactions(Lessee side)
Finance leases that do not transfer its 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.

- 94 -

(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 free from 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 speculative transactions.
(2) Details of financial instruments and their risks and the Group’s risk management system
The Group is exposed to credit risk arising from operating receivables such as trade notes and accounts receivable. To limit the risk, the Company conducts due
date and outstanding receivable management on a customer-by-customer basis in accordance with its “credit exposure management guidelines” and has a grading
system to evaluate the credit condition of its major customers every six months. The consolidated subsidiaries manage credit 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 andManagement of Exchange Listed Shares,” are held only if judged to contribute to the Company’s sustained growth and medium- to long-term corporate valueenhancement. 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 of shareholding rationale includes determining
whether risks and benefits resulting from the shareholdings are proportionate to the cost 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 theimport 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 obligations from finance leases are incurred to raise funds for capital expenditure. The amountof interest expenses has been fixed for the long-term portion of borrowings through the use of individual fixed-rate contracts as well as interest rate swap transactions
as hedging instruments, in order to avoid the risk of interest rate fluctuations. No interest swap transactions were current as of March 31, 2021.
To minimize counterparty risk, the Company follows its “derivative transaction rules” and enters such transactions only with highly rated financial institutions.
The Company is exposed to liquidity risk arising from its operating obligations and loan payables. To minimize this risk, the Accounting Department prepares
cash flow plans based on other divisions’reports and regularly updates the statements. The consolidated subsidiaries also manage liquidity risk in accordance withthe methods used by the Company.
(3) Supplementary explanation on fair values of financial instruments
The fair values of financial instruments include values based on market prices or reasonably calculated values when market prices are not available. As a variety
of factors, some of which are variable, are taken into account when calculating the values, 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 derivativetransactions themselves.

- 95 -

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. However, financial instruments
whose fair values were deemed difficult to determine are not included in the table (please refer to (Note 2)).
Previous fiscal year (As of March 31, 2020)(Millions of yen)Book value on the consolidatedbalance sheet

Fair value

Difference(1) Cash and deposits

8,244

8,244

–

(2) Notes and accounts receivable - trade27,501

27,501–

Available-for-sale securities

10,240

10,240–Total assets

45,98645,986–(1) Notes and accounts payable - trade23,16523,165–(2)Accounts payable - other

8,942

8,942

–

(3) Short-term borrowings

8,080

8,080

–

(4) Long-term borrowings

5,821

5,810

(11)

(5) Lease obligations

5,513

5,566

52

51,52451,564

40

(4)

(4)

–

(3) Investment securities

Total Liabilities
Derivatives transactions (*)(*) Derivative receivables and payables are presented on a net basis.
Current fiscal year (As of March 31, 2021)(Millions of yen)Book value on the consolidatedbalance sheet

Fair value

Difference(1) Cash and deposits

8,476

8,476

–

(2) Notes and accounts receivable - trade26,13826,138–Available-for-sale securities

13,266

13,266–

Total assets

47,88147,881–(1) Notes and accounts payable - trade20,236

20,236–(2)Accounts payable - other

9,146

9,146

–

(3) Short-term borrowings

7,890

7,890

–

(4) Long-term borrowings

7,306

7,303

(3)

(5) Lease obligations

5,201

5,236

34

49,78149,812

31

50

50

–

(3) Investment securities

Total Liabilities
Derivatives transactions (*)(*) Derivative receivables and payables are presented on a net basis.

- 96 -

(Note 1) Determination of fair value for financial instruments and matters concerning securities and derivative transactions
Assets(1) Cash and deposits and (2) Notes and accounts receivable - trade
The fair value of these items is stated at book value. Because these instruments are settled in a short period of time, book value approximates fair value.
(3) Investment securities
Available-for-sale securities
The fair value of these securities is based on prices on securities exchanges. For information on securities classified by the purpose for which they are held, pleaserefer to [Notes] under the “Securities” section.
Liabilities(1) Notes and accounts payable - trade, (2)Accounts payable - other, and (3) Short-term borrowings
The fair value of these items is stated at book value. Because these instruments are settled in a short period of time, book value approximates fair value.
(4) Long-term borrowings and (5) Lease obligations
The fair value for these items has been calculated as the present value of the sum of principal and interest amounts, discounted using the estimated rates for new
borrowings of the same kind or lease transactions.
Derivatives transactions
Please refer to “Notes” under the “Derivatives” section.
(Note 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

March 31, 2020

March 31, 2021

Unlisted stocks

42

47

Shares of subsidiaries and associates

121

166

Since no market prices were available for unlisted stocks, and their fair values were difficult to determine by an estimation of the future cash flows, unlisted
stocks are not included in “(3) Investment securities (Available-for-sale securities)” under “Assets.”
The fair values of stocks of subsidiaries and affiliates have not been disclosed as no market prices for these securities are available and their fair values are
deemed extremely difficult to determine by an estimation of the future cash flows.
(Note 3) 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, 2020)(Millions of yen)Over 1 year but within 5

Within 1 year

years

Over 5 years

Cash and deposits

8,244

–

–

Notes and accounts receivable - trade27,501

–

–

–

–

–

35,746––

Investment securities
Available-for-sale securities with maturity dates
Total
Current fiscal year (As of March 31, 2021)(Millions of yen)Over 1 year but within 5

Within 1 year

years

Over 5 years

Cash and deposits

8,476

–

–

Notes and accounts receivable - trade26,138

–

–

–

–

–

34,614––

Investment securities
Available-for-sale securities with maturity dates
Total- 97 -

(Note 4) Estimated repayment amounts of long-term borrowings, lease obligations and other interest-bearing debts after the closing date of each fiscal year
Previous fiscal year (As of March 31, 2020)(Millions of yen)
Within 1 year

Over 1 year but Over 2 years but Over 3 years but Over 4 years but
within 2 years

within 3 years

within 4 years

within 5 years

Over 5 years

Short-term borrowings

8,080

–

–

–

–

–

Long-term borrowings

1,887

1,703

1,214

705

274

35

Lease obligations

855

835

924

798

765

1,334

10,823

2,539

2,139

1,504

1,039

1,369

Total
Current fiscal year (As of March 31, 2021)(Millions of yen)
Within 1 year

Over 1 year but Over 2 years but Over 3 years but Over 4 years but
within 2 years

within 3 years

within 4 years

within 5 years

Over 5 years

Short-term borrowings

7,890

–

–

–

–

–

Long-term borrowings

2,657

2,159

1,419

834

210

25

Lease obligations

905

991

865

831

611

996

11,452

3,151

2,285

1,665

821

1,021

Total
(Securities)
1.Available-for-sale securities
Previous fiscal year (As of March 31, 2020)(Millions of yen)Book value on the consolidated balance

Category
Securities

with

book

Historical cost

sheet

Difference

valuesexceeding historical cost:
1) Equity securities

9,691

4,094

5,597

2) Bonds–––

3) Other

–

–

–

9,691

4,094

5,597

548

689

(141)

2) Bonds–––

3) Other–––

Subtotal

548

689

(141)

Total

10,240

4,784

5,456

Subtotal
Securities with book values notexceeding historical cost:
1) Equity securities(Note) Unlisted stocks (carrying amount of 42 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.

- 98 -

Current fiscal year (As of March 31, 2021)(Millions of yen)Book value on the consolidated balance

Category
Securities

with

book

Historical cost

sheet

Difference

valuesexceeding historical cost:
1) Equity securities

13,059

4,551

8,508

2) Bonds–––

3) Other–––

13,059

4,551

8,508

207

265

(57)

2) Bonds–––

3) Other–––

Subtotal

207

265

(57)

Total

13,266

4,816

8,450

Subtotal
Securities with book values notexceeding historical cost:
1) Equity securities(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.
2.Available-for-sale securities sold during the year
Previous fiscal year (FromApril 1, 2019 to March 31, 2020)(Millions of yen)
Category

Proceeds

Gains on sales

Losses on sales

Equity securities

22

7

–

Bonds

–

–

–

Other

–

–

–

22

7

–

Total
Current fiscal year (FromApril 1, 2020 to March 31, 2021)(Millions of yen)
Category

Proceeds

Gains on sales

Losses on sales

Equity securities

2

1

–

Bonds

–

–

–

Other

–

–

–

2

1

–

Total

3. Impairment of investment securities
There was no impairment of investment securities during the fiscal year ended March 31, 2020.
There was no impairment of investment securities during the fiscal year ended March 31, 2021.
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.

- 99 -

(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, 2020)(Millions of yen)Contract amount
Hedge accounting method

Transaction types

Major hedged items

Fair value
Due over 1 year

Designated hedge accounting suchas fixed-rate contracts

Fixed-rate transaction
On purchased
U.S. dollar

Accounts payable trade

Total

2,352

–

(4)

2,352

–

(4)

(Note) The calculation of fair value is based on the prices and other information presented by financial institutions.
Current fiscal year (As of March 31, 2021)(Millions of yen)Contract amount
Hedge accounting method

Transaction types

Major hedged items

Fair value
Due over 1 year

Designated hedge accounting suchas fixed-rate contracts

Fixed-rate transaction
On purchased
U.S. dollar

Accounts payable trade

Total

1,651

–

50

1,651

–

50

(Note) The calculation of fair value is based on the prices and other information presented by financial institutions.
(2) Interest-related derivatives
Previous fiscal year (As of March 31, 2020)
Not applicable.
Current fiscal year (As of March 31, 2021)
Not applicable.

- 100 -

(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 to the employees upon retirement.
2. Defined benefit obligation(1) The changes in retirement benefit obligation for the fiscal years ended March 31, 2021 and 2020 (excluding those for which the simplified method was applied)
Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

Beginning balance of retirement benefit obligation

13,752 million yen

13,210 million yen

Service cost - benefits earned during the year

333 million yen

310 million yen

Interest cost on projected benefit obligation

110 million yen

105 million yen

Actuarial gains and losses(39) million yen

20 million yen

Retirement benefits paid(944) million yen(814) million yen

13,210 million yen

12,833 million yen

Ending balance of retirement benefit obligation(2) The changes in plan assets for the fiscal years ended March 31, 2021 and 2020 (excluding those for which the simplified method was applied)
Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

Beginning balance of plan assets

14,309 million yen

13,780 million yen

Expected return on plan assets

429 million yen

413 million yen

Actuarial gains and losses(653) million yen

980 million yen

Contribution from the employer

400 million yen

394 million yen

Retirement benefits paid(705) million yen(627) million yen

Ending balance of plan assets

13,780 million yen

14,941 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, 2021 and 2020
Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

Beginning balance of retirement benefit liability

1,275 million yen

1,351 million yen

Retirement benefit expenses

129 million yen

171 million yen

Retirement benefits paid(52) million yen(97) million yen

Amount of increase due to new consolidation– million yen

455 million yen

Amount of decrease due to transfer to defined contribution–

pension plans
Ending balance of retirement benefit liability

million yen

1,351 million yen- 101 -

(45)

million yen

1,835 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 consolidatedbalance sheet
Previous fiscal year

Current fiscal year

(As of March 31, 2020)(As of March 31, 2021)

Funded retirement benefit obligation

13,708 million yen

13,360 million yen

Plan assets(13,780) million yen(14,941) million yen(71) million yen(1,580) million yen

854 million yen

1,308 million yen

782 million yen(271) million yen

Retirement benefit asset(71) million yen(1,580) million yen

Retirement benefit liability

854 million yen

1,308 million yen

782 million yen(271) million yen

Unfunded retirement benefit obligation
Net liability (asset) for retirement benefits recorded in the consolidatedbalance sheet

Net liability (asset) for retirement benefits recorded in the consolidatedbalance sheet(Note) The plans to which the simplified method is applied are included.
(5) The components of retirement benefit expenses

Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

Service cost - benefits earned during the year

332 million yen

310 million yen

Interest cost on projected benefit obligation

110 million yen

105 million yen

Expected return on plan assets(429) million yen(413) million yen

Amortization of actuarial differences

135 million yen

282 million yen

Retirement benefit expenses calculated using the simplified method

129 million yen

171 million yen

Retirement benefit expenses on defined benefit plans

278 million yen

457 million yen

Extra retirement payments (Note)

90 million yen

204 million yen(Note)

Recorded under extraordinary losses. In addition, extra retirement payments for the fiscal year ended March 31, 2021 and the fiscal year ended March
31, 2020 are additional severance benefits for early retirees.

(6) Adjustments for retirement benefits
The components of adjustments for retirement benefits (before tax effect) were as follows:
Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

Actuarial gains and losses(477) million yen

1,243 million yen

Total(477) million yen

1,243 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, 2020)(As of March 31, 2021)

Unrecognized actuarial gain or loss

1,577 million yen

334 million yen

Total

1,577 million yen

334 million yen- 102 -

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

Current fiscal year

(As of March 31, 2020)(As of March 31, 2021)

Bonds

46.4 %

43.0 %

Alternatives (Note)

25.3 %

24.7 %

Equity securities

17.6 %

22.4 %

General account

8.3 %

7.8 %

Short-term assets

2.4 %

2.1 %

Total

100 %

100 %

(Note) Regarding alternatives, hedge fund investments are made for the purpose of risk diversification.
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 andin the future and the long-term rates of return which are expected currently and in the future from the various components of the plan assets.
(9) Assumptions used for actuarial calculations
Key basis for actuarial calculations
Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

Discount rate

0.8 %

0.8 %

Long-term expected rate of return

3.0 %

3.0 %

4.6 %

4.6 %

Expected rate of salary increase (Note)
Lump-sum payment plans(Note)As the defined benefit corporate pension plan (fund type) is a fixed amount system (point system) based on the number of years 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 252 million yen for the year ended March
31, 2021 and 243 million yen for the year ended March 31, 2020.

- 103 -(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities
Previous fiscal year

Current fiscal year

(As of March 31, 2020)(As of March 31, 2021)

Deferred tax assets
Impairment losses

890 million yen

920 million yen

Tax loss carryforwards (Note) 2

300 million yen

729 million yen

Retirement benefit liability

215 million yen

438 million yen

Accounts payable on distribution expenses

417 million yen

361 million yen

Denied sales discounts

279 million yen

303 million yen

Provision for bonuses

272 million yen

274 million yen

Long-term trade receivables

215 million yen

215 million yen

Allowance for doubtful accounts

43 million yen

41 million yen

Other

517 million yen

717 million yen

3,152 million yen

4,001 million yen

Valuation allowance for tax loss carryforwards (Note) 2(260) million yen(404) million yen

Valuation allowance for deductible temporary differences(1,310) million yen(1,409) million yen

Valuation allowances subtotal (Note) 1(1,571) million yen(1,814) million yen

Total deferred tax assets

1,580 million yen

2,187 million yen(1,626) million yen(2,509) million yen

Retirement benefit asset(21) million yen(483) million yen

Reserve for advanced depreciation of non-current assets(30) million yen(29) million yen

Other(174) million yen(286) million yen

Total deferred tax liabilities(1,852) million yen(3,308) million yen

Net deferred tax assets (liabilities)(272) million yen(1,121) million yen

Deferred tax assets subtotal

Deferred tax liabilities
Valuation difference on available-for-sale securities(Notes)

1. Valuation allowance increased 242 million yen year on year. This was primarily due to a 44 million yen increase in the valuation allowance for total
deductible temporary differences, etc. related to newly consolidated subsidiaries, Toraku Foods Co., Ltd. and one other company, a 25 million yen
increase in the valuation allowance for tax loss carryforwards, and a 118 million yen increase in the valuation allowance for tax loss carryforwards of
the Company and its consolidated subsidiaries excluding newly consolidated subsidiaries.
2. Tax loss carryforwards and deferred tax assets by expiration periods
Previous fiscal year (As of March 31, 2020)(Millions of yen)
Within 1 year

Over 1 year but Over 2 years but Over 3 years but Over 4 years but
within 2 years within 3 years within 4 years within 5 years

Over 5 years

Total

Tax loss carryforwards (*1)

24

13

9

11

14

227

300

Valuation allowances

(11)

(13)

(9)

(11)

(13)

(200)

(260)

Deferred tax assets

12

–

–

–

0

26

(*2) 39(*1)(*2)

Tax loss carryforwards shown in the above table are after multiplying the statutory tax rate.
With respect to 300 million yen in tax loss carryforwards (after application of the statutory tax rate), 39 million yen in deferred tax assets has beenrecognized. This 39 million yen in deferred tax assets was recognized as loss carryforwards recoverable based on projected future taxable income out of the
300 million yen balance in tax loss carryforwards (mainly inhabitants tax and enterprise tax) (after application of the statutory tax rate) at the Company andseven consolidated subsidiaries.
Current fiscal year (As of March 31, 2021)- 104 -

(Millions of yen)
Within 1 year

Over 1 year but Over 2 years but Over 3 years but Over 4 years but
within 2 years within 3 years within 4 years within 5 years

Over 5 years

Total

Tax loss carryforwards (*1)

14

9

11

13

9

670

729

Valuation allowances

(14)

(9)

(11)

(13)

(8)

(346)

(404)

Deferred tax assets

–

–

–

0

0

324

(*2) 324

(*1)
(*2)

Tax loss carryforwards shown in the above table are after multiplying the statutory tax rate.
With respect to 729 million yen in tax loss carryforwards (after application of the statutory tax rate), 324 million yen in deferred tax assets has beenrecognized. 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 twelve consolidated subsidiaries.

(Changes in presentation)“Retirement benefits asset,” which was included in “Other” under deferred tax liabilities in the previous fiscal year, is presented separately in the current fiscal year
due to its increased materiality in relation to the total amount of deferred tax liabilities. The notes to the previous consolidated fiscal year have been reclassified toreflect this change in presentation. As a result, the negative 196 million yen classified as “Other” under deferred tax liabilities for the previous fiscal year has been
reclassified as negative 21 million yen in “Retirement benefits asset” and negative 174 million yen in “Other.”
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, 2020)(As of March 31, 2021)

30.6%

30.6%

Nondeductible expenses, including entertainment expenses

1.4%

3.7%

Nontaxable income, including dividend income(0.7)%(2.7)%Per capita inhabitants tax

3.9%

13.6%

Changes in valuation allowance

2.0%

23.0%

2.1%

6.2%

Income taxes for prior periods

0.4%

1.0%

Gain on bargain purchase–(41.6)%Tax credit for testing and research expenses(1.3)%

–

Other

0.1%

0.2%

38.5%

34.0%

Statutory tax rate
Adjustment:

Tax rate difference between the Company and consolidated
subsidiaries

Effective tax rate after applying tax effect accounting(Changes in presentation)“Income taxes for prior periods,” which was included in “Other” in the previous fiscal year, is presented separately in the current fiscal year due to its increasedmateriality. The notes to the previous consolidated fiscal year have been reclassified to reflect this change in presentation.As a result, the 0.5% presented in “Other”
for the previous fiscal year has been reclassified as 0.4% in “Income taxes for prior periods” and 0.1% in “Other.”- 105 -

(Business combinations)
Business combination by acquisition(1) Overview of business combination
1) Name and business of acquiree
Name of acquiree: Toraku Foods Co., Ltd.
Description of business: Manufacturing and sales of dairy processed food2) Main reason for the business combination
Toraku Foods Co., Ltd. has a prominent line-up of brands and products including “Kobe Pudding,” one of the most favored souvenir items from Kobe, and“Rakuraku Whip,” a ready-whipped cream product boasting top market share. The Company seeks to further expand its dessert category by adding Toraku
Foods to the Group.
3) Date of business combination
July 1, 2020
4) Legal form of business combination
Acquisition of shares with cash as consideration
5) Company name after business combination
No change
6) Voting rights acquired
100%7) Main grounds for determining the acquirer
The Company acquired 100% of the voting rights through the acquisition of shares in exchange for cash.
(2) Period during which the business performance of acquiree is included in the consolidated financial statements
July 1, 2020 to March 31, 2021
(3) Cost for acquiring the acquiree and breakdown of consideration by type
Consideration for acquisition: Cash

1,200 million yen

Historical cost

1,200 million yen(4) Details and amount of major acquisition related expenses
Advisory expenses, etc. 41 million yen(5) Amount and cause of gain on bargain purchase1) Amount of gain on bargain purchase
997 million yen
2) Cause
As the market prices of net assets at the time of the business combination exceeded the acquisition cost, the difference was recognized as a gain on bargain
purchase.
(6) Breakdown and amount of major assets and liabilities assumed on the date of business combination
Current assets

1,835 million yen

Non-current assets

3,553 million yen

Total assets

5,389 million yen

Current liabilities

1,198 million yen

Non-current liabilities

1,992 million yen

Total liabilities

3,191 million yen- 106 -

(7) Estimated amounts and calculation method used to determine the impact of the business combination on the consolidated statement of income for the fiscal year
ended March 31, 2021 on the assumption that the business combination was completed as of the beginning of the fiscal year
Net sales

1,376 million yen

Operating loss(109) million yen

Ordinary loss(109) million yen

Loss attributable to owners of parent(239) million yen(Method used to calculate the estimated amounts)
The estimated amount of impact is the difference between the net sales and profit and loss information calculated on the assumption that the businesscombination was completed as of the beginning of the fiscal year and the net sales and profit and loss information in the consolidated statement of incomeof the acquirer.
This note has not been audited.
(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.
(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 segments that is examined periodically by
the Board of Directors to make decisions regarding the allocation of management resources and to 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 Productsoperationssegment, the Company manufactures and sells ham, sausage and precooked and processed foods. In theMeat 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.”- 107 -

3. Disclosure of sales, profit (loss), asset, liability, and other items for each reportable segment
Previous fiscal year (FromApril 1, 2019 to March 31, 2020)(Millions of yen)
Reportable segment
Processed Food
Products

Meat Products
operations

operations

Book value on
Other

Total

(Note) 1

Total

Adjustments(Note) 2

the consolidated
financialstatements(Note) 3

Net sales
Sales to external customers

170,648

75,024

245,672147

245,820–

245,820

–

–

–

776

776

(776)

–

170,648

75,024

245,672923

246,596(776)

245,820

Segment income

1,668

900

2,568

48

2,617

–

2,617

Segment assets

89,777

18,903

108,680217

108,898

22,955

131,854

6,459

326

6,785

15

6,801

–

6,801

8,680

484

9,164

3

9,168

13

9,181

Intersegment sales and transfers
Total

Other items
Depreciation and amortization(Note) 4
Increase in property, plant andequipment, and 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 22,955 million yen refer to corporate assets that are comprised mainly of cash and deposits, investment securities
and real estate for rent and other.
3. Segment income (loss) is equal to the operating income 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 (FromApril 1, 2020 to March 31, 2021)(Millions of yen)
Reportable segment
Processed Food
Products
operations

Meat Products
operations

Book value on
Other

Total

(Note) 1

Total

Adjustments(Note) 2

the consolidated
financialstatements(Note) 3

Net sales
Sales to external customers
Intersegment sales and transfers
Total
Segment income (loss)
Segment assets

161,266

72,734

234,001150

234,152–

234,152

–

–

–

746

746

(746)

–

161,266

72,734

234,001

896

234,898(746)

234,152

(935)

547

(387)

57

(330)

–

(330)

89,455

17,975

107,431214

107,645

25,900133,546

7,413

373

7,787

10

7,798

–

7,798

5,447

679

6,127

12

6,139

7

6,146

Other items
Depreciation and amortization(Note) 4
Increase in property, plant and- 108 -

equipment, and 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 and deposits, 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 (FromApril 1, 2019 to March 31, 2020)
1. Information by product and services(Millions of yen)
Ham & Sausage Products
Sales to external customers

Precooked & Processed
Foods

78,854Meat Products

91,794

Other

75,024

Total
147

245,820

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 (FromApril 1, 2020 to March 31, 2021)
1. Information by product and services(Millions of yen)
Ham & Sausage Products
Sales to external customers

75,965Precooked & Processed
Foods

Meat Products

85,30072,734

Other

Total
150

234,152

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.

- 109 -

[Information on impairment losses on non-current assets by reportable segment]
Previous fiscal year (FromApril 1, 2019 to March 31, 2020)(Millions of yen)AmountReportable segment
Processed Food
Products

Meat Products
operations

operations
Impairment losses(Note)

Other

Adjustments

Total(Note)

Total

recorded on the
consolidated
statement ofincome

–

–

–

–

–

84

84

Impairment losses of 84 million yen have been recognized due to decrease in recoverable value for real estate for rent and other, etc. not belonging to any
segment.

Current fiscal year (FromApril 1, 2020 to March 31, 2021)(Millions of yen)AmountReportable segment
Processed Food
Products

Meat Products
operations

operations
Impairment losses(Note)

Other

Adjustments

Total(Note)

Total

recorded on the
consolidated
statement ofincome

–

–

–

–

–

299

299

Impairment losses of 299 million yen have been recognized due to decrease in recoverable value for real estate for rent and other, etc. not belonging to any
segment.

[Information about amortization and balance of goodwill by reportable segment]
Previous fiscal year (FromApril 1, 2019 to March 31, 2020)(Millions of yen)
Reportable segment
Processed Food
Products

Meat Products
operations

operations

Book value on
Other

Total

Adjustments

Total

the consolidated
financialstatements

Amortization during the period

2

–

2

–

2

–

2

Balance at the end of period

–

–

–

–

–

–

–

Current fiscal year (FromApril 1, 2020 to March 31, 2021)
Not applicable.
[Information on gain on bargain purchase by reportable segment]
Previous fiscal year (FromApril 1, 2019 to March 31, 2020)
Not applicable.
Current fiscal year (FromApril 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 dueto the acquisition of shares of Toraku Foods Co., Ltd. in the second quarter ended September 30, 2020.

- 110 -

[Related parties]
Previous fiscal year (FromApril 1, 2019 to March 31, 2020)
Not applicable.
Current fiscal year (FromApril 1, 2020 to March 31, 2021)
Not applicable.
(Per share information)

Net assets per share
Profit per share(Notes)Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

2,930.66 yen

3,033.83 yen

65.04 yen

16.31 yen

1. Diluted profit per share is not stated because there are no dilutive security.
2. Basis of calculation(1) The basis of calculation of profit per share is as follows:

Item

Previous fiscal year

Current fiscal year

(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)

March 31, 2021)

Profit attributable to owners of parent (Millions of yen)

1,653

414

–

–

1,653

414

25,42825,411

Amount not attributable to common shareholders (Millions of yen)
Profit attributable to owners of parent associated with common
stock (Millions of yen)
Weighted average number of common shares during the fiscal year
(Thousand shares)(2) The basis of calculation of net assets per share is as follows:
Item
Total net assets (Millions of yen)Previous fiscal year

Current fiscal year

(As of March 31, 2020)(As of March 31, 2021)

75,056

77,680

Amount deducted from total net assets (Millions of yen)

545

612

(Non-controlling interests included in the above) (Millions of yen)

(545)

(612)

74,51077,06725,42425,402

Amounts of net assets related to common stock at the end of the
fiscal year (Millions of yen)
Number of common stock used to calculate net assets per share at
the end of the fiscal year (Thousand shares)(Significant events after reporting period)
Not applicable.

- 111 -

5)Annexed consolidated detailed schedules[Annexed consolidated detailed schedule of corporate bonds]
Not applicable.
[Annexed consolidated detailed schedule of borrowings]
Balance at beginning of
Category

periodBalance at end of period Average interest rate
(Millions of yen)

(Millions of yen)(%)

Repayment deadline

Short-term borrowings

8,080

7,890

0.42

–

Current portion of long-term borrowings

1,887

2,657

0.84

–

Current portion of lease obligations

855

905

2.72

–

3,933

4,649

0.78

Lease obligations (excluding a current portion)

4,658

4,296

2.71

Total

19,415

20,398–Long-term borrowings (excluding a current
portion)(Notes)April 2022 toSeptember 2028
April 2022 to March
2030–

1. Average interest rate represents weighted average interest rate for the balance of borrowings, etc. at the end of the current fiscal year.
2. Scheduled annual repayment of long-term borrowings and lease obligations (excluding the current portion) for 5 years subsequent toMarch 31, 2021.

Category

Over 1 year but within 2Over 2 years but within 3Over 3 years but within 4Over 4 years but within 5

years

years

years

years

(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

Long-term borrowings

2,159

1,419

834

210

Lease obligations

991

865

831

611

[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, this information is omitted.
(2) Other
Quarterly information for the fiscal year ended March 31, 2021
(Cumulative period)

1st Quarter

2nd Quarter

3rd Quarter

Current fiscal year

Net sales(Millions of yen)

58,293

118,287

181,893234,152

Profit (loss) before income taxes(Millions of yen)

(182)

298

1,677

734

(Millions of yen)

(240)

250

1,087

414

(Yen)

(9.44)

9.83

42.81

16.31

Profit (loss) attributable to ownersof parent
Profit (loss) per share(Accounting period)
Profit (loss) per share

1st Quarter(Yen)

2nd Quarter(9.44)- 112 -

3rd Quarter
19.28

4th Quarter
32.99(26.52)

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, 2020)

Current fiscal year
(As of March 31, 2021)

AssetsCurrent assets
Cash and deposits

471

2,898

Notes receivable - trade
Accounts receivable - trade29
19,55732
18,175Merchandise and finished goods
Work in process

8,236
253

6,246
263

Raw materials and supplies
Short-term loans receivable

4,550
2,313

4,408
2,535

Other
Allowance for doubtful accounts

3,942
(8)

2,763
(3)

Total current assets

39,34737,321

Property, plant and equipment
Buildings

8,337

8,069

Structures
Machinery and equipment

607
10,992580
10,058

VehiclesTools, furniture and fixtures

9
1,330

9
1,280

Land
Leased assets

11,301
137

10,894124

Non-current assets

Construction in progress

376

661

33,09331,678Intangible assets

2,868

2,568

Investments and other assets
Investment securities

Total property, plant and equipment

10,25013,272

Shares of subsidiaries and associates
Real estate for rent and other

4,096
8,277

5,337
7,684

Long-term loans receivable from subsidiaries and associates
Other

4,891
2,354

6,985
2,585

Allowance for doubtful accounts

(813)

(809)

Total investments and other assets

29,05635,05565,01869,301

104,365

106,623

Total non-current assets
Total assets- 113 -

(Millions of yen)Previous fiscal year
(As of March 31, 2020)

Current fiscal year
(As of March 31, 2021)

Liabilities
Current liabilities
Notes payable - trade
Accounts payable - trade96
17,12496
15,332

Short-term borrowings
Current portion of long-term borrowings

7,430
1,849

7,210
2,619

Lease obligations
Accounts payable - other

50
5,398

53
5,784

Income taxes payable
Provision for bonuses

324
422

–
378

Other

513

586

Total current liabilities

33,21032,061

Non-current liabilities
Long-term borrowings

3,796

4,549

Lease obligations
Deferred tax liabilities

133
1,381

110
2,250

Provision for loss on business of subsidiaries and associates
Other

7
237

6
247

Total non-current liabilities

5,555

7,164

38,76639,226

6,716

6,716

Capital surplus
Legal capital surplus

21,685

21,685

Other capital surplus

387

387

Total capital surplus

22,07322,073

1,676

1,676

20,05020,05068

67

13,85013,54235,64535,336

Total liabilities
Net assets
Shareholders’equity
Share capital

Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Reserve for tax purpose reduction entry of non-current
assetsRetained earnings brought forward
Total retained earnings
Treasury shares(2,657)(2,697)

Total shareholders’equity

61,77761,428

3,824

5,933

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- 114 -

(2)

34

3,821

5,968

65,59967,397104,365

106,623

2) Non-consolidated Statements of Income
Previous fiscal year
(From April 1, 2019
to March 31, 2020)
Net sales
Cost of sales

165,846
131,756

Gross profit(Millions of yen)
Current fiscal year
(From April 1, 2020
to March 31, 2021)
160,146
129,072

34,089Selling, general and administrative expenses

35,190*1

31,07332,309*1

Operating loss

(1,101)(1,236)

Non-operating income
Interest and dividend income

2,129

1,813

Rental income from real estate
Other

573
358

566
215

Total non-operating income

3,061

2,594

Non-operating expenses
Interest expenses

85

109

Rental expenses on real estate
Other

311
117

294
86

Total non-operating expenses

515

490

1,443

867

Ordinary profit
Extraordinary income
Gain on disposal of non-current assets
Reversal of provision for loss on business of subsidiaries andassociates
Gain on sale of investment securities

138

*3

Total extraordinary income

307

*3

2

1

7

0

148

310

Extraordinary losses
Loss on disposal of non-current assets
Impairment losses

291
84

*4

Extra retirement payments
Loss on business of and investment in subsidiaries and affiliates

*5

90
3

186
299

*4

*5

204
3

Costs related to voluntary recovery of product47–

Total extraordinary losses

518

693

Profit before income taxes

1,073

483

Income taxes - current
Income taxes - deferred

(100)
7

(68)
(28)

Total income taxes

(92)

(97)

1,166

580

Profit- 115 -

3) Non-consolidated Statements of Changes in NetAssets
For the previous fiscal year (From April 1, 2019 to March 31, 2020)(Millions of yen)
Shareholders’equity
Capital surplus

Retained earnings
Other retained earnings

Share capital

Balance at beginning of period

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus

Legal retained
earnings

21,685387

22,073

1,676

6,716

General reserve

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

20,05068

13,573

Changes during period
Dividends of surplus(890)

Reversal of reserve for tax purpose
reduction entry of non-current
assets(0)Profit0
1,166

Purchase of treasury shares
Net changes in items other thanshareholders’equity
Total changes during period

–

–

–

–

–

–

(0)

277

Balance at end of period

6,716

21,685387

22,073

1,676

20,05068

13,850Shareholders’equity

Valuation and translation adjustments

Retained earnings
Total retained earnings
Balance at beginning of period

35,369Treasury shares

Total shareholders’equity(2,635)61,523

Valuation difference on
Deferred gains or losses Total valuation andavailable-for-saleon hedges
translation adjustments
securities
5,266

8

5,274

Total net assets

66,798Changes during period
Dividends of surplus
Reversal of reserve for tax purpose
reduction entry of non-current
assetsProfit

(890)

(890)

(890)

–

–

–

1,166

1,166

1,166

(21)

(21)

Purchase of treasury shares(21)

Net changes in items other thanshareholders’equity(1,441)(11)(1,453)(1,453)

Total changes during period

276

(21)

254

(1,441)(11)(1,453)(1,198)

Balance at end of period

35,645(2,657)

61,777

3,824

(2)

3,821

65,599- 116 -

For the current fiscal year (From April 1, 2020 to March 31, 2021)(Millions of yen)
Shareholders’equity
Capital surplus

Retained earnings
Other retained earnings

Share capital

Balance at beginning of period

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus

Legal retained
earnings

21,685387

22,073

1,676

6,716

General reserve

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

20,05068

13,850Changes during period
Dividends of surplus(889)

Reversal of reserve for tax purpose
reduction entry of non-current assets(0)Profit0580

Purchase of treasury shares
Net changes in items other thanshareholders’equity
Total changes during period

–

–

–

–

–

–

(0)

(308)

Balance at end of period

6,716

21,685387

22,073

1,676

20,05067

13,542

Shareholders’equity

Valuation and translation adjustments

Retained earnings
Total retained earnings
Balance at beginning of period

35,645

Treasury shares

Total shareholders’equity(2,657)

61,777

Valuation difference on
Deferred gains or losses Total valuation andavailable-for-saleon hedges
translation adjustments
securities
3,824

(2)

3,821

Total net assets

65,599Changes during period
Dividends of surplus
Reversal of reserve for tax purpose
reduction entry of non-current assets
Profit

(889)

(889)

(889)

–

–

–

580

580

580

(40)

(40)

Purchase of treasury shares(40)

Net changes in items other thanshareholders’equity

2,109

37

2,147

2,147

Total changes during period

(309)

(40)

(349)

2,109

37

2,147

1,797

Balance at end of period

35,336(2,697)61,428

5,933

34

5,968

67,397- 117 -

[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- Those with fair value
Stated at fair value as of the book-closing date.
(Any valuation difference is booked directly to net assets and the cost of securities sold are computed by the moving-average method.)- Those without fair value
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 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.
(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 internally 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 aresidual 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 theactual 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.

- 118 -

(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, thedifference 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 wererecorded 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 the subsidiaries and associates.
4. Other significant accounting policies for preparation of 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 with designated hedge accounting.
(2) Accounting treatment of retirement benefits
The accounting treatment of unrecognized actuarial gain or loss relating to retirement benefits is different from the accounting treatment of unrecognized actuarial
gain or loss in the consolidated financial statements.
(3) Accounting treatment of consumption tax
National and local consumption taxes are excluded from the reported amounts in accounting procedures.
(4) Application of consolidated taxation system
The Company applies a consolidated taxation system.
(5) Application of tax effect accounting related to the transition from a consolidated taxation system to a group tax sharing system
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.” (ActNo. 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 theprovisions 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 EffectAccounting for the Transition from the Consolidated Taxation System
to the Group Tax Sharing System” (PITF No. 39, March 31, 2020). The amounts of deferred tax assets and deferred tax liabilities for these items are based on taxation
law as it was before amendment.

- 119 -

(Significant accounting estimates)
1. Impairment of non-current assets(1) Amount recorded in the financial statements for the fiscal year ended March 31, 2021
The book value of business assets (including common assets): 33,116 million yen(Property, plant and equipment: 30,548 million yen / Intangible assets: 2,568 million yen)
The Company determined that there was an indication of impairment of the business assets due to the continuous recording of operating loss and reviewed thenecessity of recording impairment losses. However, as it was determined that the undiscounted 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
Amethod 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, 2021
Deferred tax assets before offsetting with deferred tax liabilities: 978 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 presentation)(Application of “Accounting Standard for Disclosure ofAccounting Estimates”)
The Company has adopted the “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31, March 31, 2020) starting with thefinancial statements as of the end of the current fiscal year, and provides notes on significant accounting estimates in the financial statements.
However, in accordance with the transitional treatment prescribed in the proviso to Paragraph 11 of the accounting standard, details related to the previous fiscal
year are not described in the notes.
(Non-consolidated balance sheets)“Long-term loans receivable from subsidiaries and associates” has been included in “Others” (7,245 million yen at the end of the previous fiscal year) on thebalance sheet. Due to its increased materiality, however, it is presented separately as “long-term loans receivable from subsidiaries and associates” (4,891 million
yen at the end of the current fiscal year) from the current fiscal year.

- 120 -

1.

(Non-consolidated balance sheets)
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, 2020)(As of March 31, 2021)

Short-term monetary claims

8,392

million yen

8,280

million yen

Long-term monetary claims

4,891

million yen

6,985

million yen

Short-term monetary claims

7,550

million yen

7,303

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, 2020)
Guarantee

Guaranteed amount

Description(Millions of yen)

Yahata Food Co., Ltd.

100

Loan guarantees

Pioneer Foods Co., Ltd.

20

Transaction guarantees

Total

120

Current fiscal year (As of March 31, 2021)
Guarantee

Guaranteed amount(Millions of yen)

Yahata Food Co., Ltd.

100

Total

100

3.

Description
Loan guarantees

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, 2020)(As of March 31, 2021)

Total amounts in the overdraft agreements

20,800 million yen

30,800 million yen

Borrowing balance

7,430 million yen

7,210 million yen

Difference

13,370 million yen

23,590 million yen- 121 -

(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 91% and 90%, respectively, while thoseof general and administrative expenses were some 9% and 10%, 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, 2019 to March 31,(From April 1, 2020 to2020)
March 31, 2021)
Distribution expenses

20,587

million yen

19,214 million yen

Salaries and allowances

3,648

million yen

3,374 million yen

Depreciation and amortization

538

million yen

751 million yen

Retirement benefit expenses

192

million yen

253 million yen

Provision for bonuses

222

million yen

197 million yen

5million yen(4) million yen

Provision of allowance for doubtful accounts
2.

Amount of business transactions with subsidiaries and associates and transactions with subsidiaries and associates other than business transactions are as follows:
Previous fiscal year
Current fiscal year
(From April 1, 2019 to(From April 1, 2020 toMarch 31, 2020)
March 31, 2021)

Operating revenue

38,486

million yen

39,815 million yen

Operating expenses

30,216

million yen

27,502 million yen

617

million yen

608 million yen

Amount of transactions other than business transactions*3. Gain on disposal of non-current assets were brought mainly by 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, 2019 toMarch 31, 2020)

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

Buildings and structures

228

million yen

161 million yen

Machinery and equipment

62

million yen

18 million yen

Other

1

million yen

5 million yen

Total

291

million yen

186 million yen*5. The breakdown of loss on business of and investment in subsidiaries and affiliates are as follows:
Previous fiscal year
(From April 1, 2019 to March 31,
2020)
Provision of allowance for doubtful accounts

3

million yen

Current fiscal year
(From 1stApril 1, 2020 to March
31, 2021)
3 million yen(Securities)
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
Current fiscal year
Category(As of March 31, 2020)(As of March 31, 2021)
Shares of subsidiaries

4,040

5,281

Shares of associates

55

55

4,096

5,337

Total

- 122 -(Tax effect accounting)
1. Significant components of deferred tax assets and liabilities
Previous fiscal year

Current fiscal year

(As of March 31, 2020)(As of March 31, 2021)

Deferred tax assets
Impairment losses

851 million yen

883 million yen

Loss on valuation of shares of subsidiaries and associates

465 million yen

465 million yen

Tax loss carryforwards

199 million yen

383 million yen

Denied sales discounts

235 million yen

255 million yen

Allowance for doubtful accounts

251 million yen

248 million yen

Accounts payable on distribution expenses

247 million yen

221 million yen

Long-term trade receivables

208 million yen

208 million yen

Provision for bonuses

129 million yen

116 million yen

Other

260 million yen

232 million yen

Deferred tax assets subtotal

2,849 million yen

3,016 million yen

Valuation allowances(1,975) million yen(2,037) million yen

Total deferred tax assets

874 million yen

978 million yen

Valuation difference on available-for-sale securities(1,624) million yen(2,505) million yen

Prepaid pension costs(601) million yen(678) million yen

Reserve for advanced depreciation of non-current assets(30) million yen(29) million yen–(15) million yen

Total deferred tax liabilities(2,255) million yen(3,229) million yen

Net deferred tax assets (liabilities)(1,381) million yen(2,250) million yen

Deferred tax liabilities

Deferred gains or losses on hedges

2. Breakdown of major items that caused the significant difference between the statutory tax rate and the effective tax rate after applying tax effect accounting

Statutory tax rate

Previous fiscal year

Current fiscal year

(As of March 31, 2020)(As of March 31, 2021)

30.6%

30.6%

Adjustment:
Nondeductible expenses, including entertainment expenses

2.9%

4.8%

Nontaxable income, including dividend income(50.8)%(91.8)%Per capita inhabitants tax

6.8%

13.6%

Changes in valuation allowance

3.5%

17.8%

Income taxes for prior periods(0.6)%

3.9%

Tax credit for testing and research expenses(2.7)%–

Bonuses for Directors and Statutory Auditors

0.7%

–

Other

0.9%

1.0%

(8.7)%(20.1)%

Effective tax rate after applying tax effect accounting(Changes in presentation)“Income taxes for prior periods,” which was included in “Other” in the previous fiscal year, is presented separately in the current fiscal year due to its
increased materiality. The notes to the previous fiscal year have been reclassified to reflect this change in presentation.As a result, the 0.3% presented in “Other”
for the previous fiscal year has been reclassified as negative 0.6% in “Income taxes for prior periods” and 0.9% in “Other.”(Business combinations)
Business combination by acquisition
As “[Notes] (Business combinations)” in the consolidated financial statements has identical contents, this note item is omitted here.
(Significant events after reporting period)
Not applicable.

- 123 -

4)Annexed detailed schedules[Annexed detailed schedule of property, plant and equipment, etc.](Millions of yen)
Balance at
Category

Type of asset

Increase during Decrease during

beginning of

the yearperiodProperty, plant andequipment

the year

Depreciation andamortization
during the period

Balance at theend of period

Accumulated
depreciation andamortization

Buildings

8,337

615

131

752

8,069

24,344Structures

607

30

3

54

580

3,120

10,992

1,957

90

2,801

10,05840,052

9

7

0

7

9

401

Tools, furniture and fixtures

1,330

103

0

152

1,280

2,102

Land

11,301–407–

10,894–

Leased assets

137

30

0

42

124

97

Construction in progress

376

942

658

–

661

–

Total

33,093

3,688

1,291

3,811

31,67870,117

Total

2,868

281

1

579

2,568

–

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

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

336 million yen

Kanto Plant

70 million yen

Karatsu Plant

28 million yen

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

Construction in progress:

Takatsuki Plant

807 million yen

Kanto Plant

290 million yen

Okayama Plant

154 million yen

Takatsuki Plant

556 million yen

Kanto Plant

173 million yen

Yokosuka Plant

91 million yen

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

Due to reclassification to real estate for rent and other, etc.

Land

Due to reclassification to real estate for rent and other, etc.

Construction in progress

Primarily due to reclassification to buildings, machinery and equipment.

- 124 -

[Annexed detailed schedule of provisions](Millions of yen)
Decrease during theCategory

Balance at beginning of
periodIncrease during the year

year

Decrease during theyear(Used for primary

period(Other)purposes)

Balance at the end of

Allowance for doubtful accounts

821

8

7

9

813

Provision for bonuses

422

378

422

–

378

7

–

–

1

6

Provision for loss on business of
subsidiaries and associates(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 the reversal of a portion thereof inline 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.

- 125 -

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

FromApril 1 to March 31

Ordinary General Meeting of
June
Shareholders
Record date
Record date for dividends ofsurplusNumber of shares consisting of aminimum unit

March 31
March 31
100

Purchase of shares less than one unit
Handling officeTransfer agent

Stock Transfer Agency Business Planning Dept., Sumitomo Mitsui Trust Bank, Limited
4-5-33 Kitahama, Chuo-ku, Osaka-shi, Osaka
Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo

Transfer office–

Purchasing fee

FreeMethod of public notice

Shareholders’privileges

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 other unavoidable reason, thepublic notice shall be posted on the Nihon Keizai Shimbun.
The Company’s URL for public notice:https://www.marudai.jp/
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.

- 126 -

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 72nd fiscal year (fromApril 1, 2019 to March 31, 2020)
Filed to the Director-General of Kanto Local Finance Bureau on June 29, 2020(2) Internal Control Report
For the 72nd fiscal year (fromApril 1, 2019 to March 31, 2020)
Filed to the Director-General of Kanto Local Finance Bureau on June 29, 2020
(3) Quarterly Securities Reports and Confirmation Letters thereof
For the first quarter of the 73rd fiscal year (fromApril 1, 2020 to June 30, 2020)
Filed to the Director-General of Kanto Local Finance Bureau on August 12, 2020
For the second quarter of the 73rd fiscal year (from July 1, 2020 to September 30, 2020)
Filed to the Director-General of Kanto Local Finance Bureau on November 12, 2020
For the third quarter of the 73rd fiscal year (from October 1, 2020 to December 31, 2020)
Filed to the Director-General of Kanto Local Finance Bureau on February 12, 2021
(4) Extraordinary Report
An Extraordinary Report pursuant toArticle 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 CorporateAffairs
Filed to the Director-General of Kanto Local Finance Bureau on June 29, 2020
(5)Amendment Report to an Extraordinary Report
An Amendment Report (Amendment Report to amend the Extraordinary Report aforementioned in (4)) filed to the Director-General of Kanto Local Finance
Bureau on October 5, 2020
(6) Share Buyback Reports
Filed to the Director-General of Kanto Local Finance Bureau on September 4, 2020
Filed to the Director-General of Kanto Local Finance Bureau on October 5, 2020
(7) Shelf Registration Statement (straight bond) and documents attached thereto
Filed to the Director-General of Kanto Local Finance Bureau on July 22, 2020
(8)Amended Shelf Registration Statement (straight bond)
Filed to the Director-General of Kanto Local Finance Bureau on December 18, 2020

- 127 -

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

- 128 -

Independent Auditors’ Report on Consolidated Financial Statements and Internal Control
June 25, 2021
To the Board of Directors of Marudai Food Co., Ltd.
KPMGAZSALLC
Osaka Office
Takahide Nakahata (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Satoru Komatsuno (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant<Financial StatementsAudit>
Audit Opinion
Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and ExchangeAct 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, 2020 to March 31, 2021, which comprise the consolidated balance sheets, the consolidated
statements of income, the consolidated statements of comprehensive 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 positions of Marudai Food Co., Ltd. and its
consolidated subsidiaries as of March 31, 2021, 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 the Company and its consolidated subsidiaries in accordance with theprovisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities 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 of and forming the audit opinions on the consolidated financial statements as
a whole, and we do not express separate opinions on such matters.

- 129 -

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 our determination thereof

How the key audit matter was addressed in the audit

Property, plant and equipment of 60,346 million yen and intangible assets of
2,779 million yen were recognized in the consolidated balance sheets ofMarudai Food Co., Ltd. (the Company) for the fiscal year ended March 31,
2021.As described in [Notes] “(Significant accounting estimates)1. Impairment
of non-current assets” to the consolidated financial statements, the Company’sbusiness assets (including common assets) include property, plant andequipment of 30,548 million yen and intangible assets of 2,568 million yen, thetotal of which accounted for 24% of consolidated total assets. In addition, an
impairment loss of 299 million yen was recognized for idle assets of theCompany.
While these non-current assets are depreciated/amortized in a systematicmanner, 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 be generated from the related
asset groups with their book values. If the recognition of an impairment loss isdeemed 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 four consecutive fiscal years. This was due to intensifying
sales competition caused by structural changes in Japan’s consumption from its
dwindling and aging population, a rise in costs for human resources, logistics,
and others against a backdrop of a chronic labor shortage, and a rise in raw
material prices for meat driven by animal epidemics in Japan and abroad. For
this reason, the asset group including the common assets was reviewed whether
to recognize 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 based on the
degree of achievement of the budget and changes in the market environment forthe current fiscal year; the unit prices of 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 onthese matters will have a significant impact on the estimation of theundiscounted future cash flows.
Based on the above, we have determined that the appropriateness of thedecision regarding the necessity of recognizing an impairment loss on noncurrent assets of Marudai 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 the decision regarding
the necessity of recognizing an impairment loss on non-current assets ofMarudai Food Co., Ltd. included the following, among others.
(1)Assessment of internal controls
We assessed the design and operating effectiveness of the Company’s
internal controls for determining the necessity of recognizing an impairment loss
on the non-current assets.
(2)Assessment of the reasonableness of estimates of future cash flows
In order to assess the reasonableness of the key assumptions made by
Marudai Food Co., Ltd. in formulating the management plan, which are thebasis for estimating future cash flows, we primarily conducted the following
procedures, in addition to questioning personnel in charge of the departments forthe bases of these assumptions.
● We conducted the following procedures regarding the projected net sales in
the management plan.
・ We conducted a trend analysis between the management plans for the
past fiscal years and actual business results, and assessed thereasonableness of the sales growth rate in the current management plan.
・ We reviewed the consistency of the projected net sales with thefollowing information: statistic information on the market trend for
products such as hams and sausages released by the Ministry of Internal
Affairs and Communications and the Japan Ham&Sausage Processors
CooperativeAssociation; and statistic information on the market trend forprecooked and processed 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 purchasedin the past and reviewed the consistency with statistic information releasedby theAgriculture & Livestock Industries Corporation.
● We assessed the reasonableness of the cost reduction effect of capital
investment in the management plan by reviewing the past administrative
data on the cost reduction effect of capital investment.

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 with 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 theconsolidated 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 statementsin 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 to designing and operating the financial
reporting process.
Auditor’s Responsibility for theAudit of the Consolidated Financial Statements- 130 -

Our responsibility is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due tofraud 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 canoccur as a result of fraud or error, and are deemed material 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, and perform the following while
maintaining professional skepticism.
・ Identify and assess the risks of materialmisstatement, whether due to fraud or error. Design and implement audit procedures to address 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 thecircumstances, 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 the reasonableness 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 or conditions 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 are inappropriate, 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 to continue 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 inJapan, 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, and implementing the audit of the consolidated financial statements, and issolely 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, 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 to professional 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 those matters that were of most significance inthe 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 report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
<Internal ControlAudit>
Audit Opinion
Pursuant to Article 193-2, Paragraph 2 of the Financial Instruments and ExchangeAct of Japan, we also have audited the Internal Control Report of Marudai Food Co.,
Ltd. as of March 31, 2021.
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, 2021 is effectively maintained, presents fairly, in all material respects, the result of the assessment on internal control over financial reporting in conformity withassessment standards for internal control over financial reporting generally accepted in Japan.
Basis for the Opinion
We conducted our internal control audit in accordance with auditing standards for internal control over financial reporting generally accepted in Japan. Our responsibility
under the auditing standards for internal control over financial reporting is described in “Auditor’s Responsibility for the Internal ControlAudit.” We are independent of theCompany and its consolidated subsidiaries in accordance 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 Report
The management is responsible for designing and operating internal control over financial reporting, and for the preparation and fair presentation of Internal Control
Report in accordance with assessment standards for internal control over financial reporting generally accepted in Japan.
StatutoryAuditors and the Board of StatutoryAuditors are responsible for monitoring and examining the design and operations of internal 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 ControlAudit
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.

- 131 -

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 the Internal Control Report. The proceduresof internal control audit are selected at the auditor’s judgment, based on the significance of effects 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 in Internal 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 to professional 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 that should 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 IndependentAuditors’Report on Consolidated Financial Statements and Internal Control, andthe original report is maintained by the Company (a company that files annual securities reports).
2. XBRLdata are not subject to the audit.

- 132 -

Independent Auditors’ Report
June 25, 2021
To the Board of Directors of Marudai Food Co., Ltd.
KPMGAZSALLC
Osaka Office
Takahide Nakahata (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Satoru Komatsuno (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

Audit Opinion
Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and ExchangeAct of Japan, we have audited the non-consolidated financial statements of Marudai
Food Co., Ltd. included in “Financial Information” for the 73rd fiscal year fromApril 1, 2020 to March 31, 2021, which comprise the non-consolidated balance sheets, thenon-consolidated statements of income, the non-consolidated statements of changes in net assets, significant accounting policies, other related notes and the annexed detailed
schedules.
In our opinion, the non-consolidated financial statements referred to above present fairly, in all material respects, the financial position of Marudai Food Co., Ltd. as ofMarch 31, 2021 and the results of operations 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 Non-consolidated Financial Statements.” We are independent of the Company in accordance with the provisions related to professional
ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis forour 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 non-consolidated 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 assets
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,”
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 for the consolidated financial statements. For this reason, the description for this key audit matter is omitted in the Independent
Auditors’Report for the non-consolidated financial statements.

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 accordance with 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 from material misstatement, whether due to fraud or error.
In preparing the non-consolidated financial statements, the management is responsible for assessing whether it is appropriate to prepare the non-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 to designing and operating the financial
reporting process.

- 133 -

Auditor’s Responsibility for theAudit of the Non-consolidated Financial Statements
Our responsibility is to obtain reasonable assurance about whether the non-consolidated financial statements as a whole are free from material misstatement, whether
due to fraud or error, and to express an opinion on the non-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 deemed material if they can be reasonably expected to, either individually or collectively, influence the decisionsof 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, and perform the following while
maintaining professional skepticism.
・ Identify and assess the risks of materialmisstatement, whether due to fraud or error. Design and implement audit procedures to address 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 thecircumstances, 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 the reasonableness 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 a going concern and, based on the audit
evidence obtained, determine whether there is a significant uncertainty in regard to events or conditions 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 nonconsolidated financial statements in the audit report, or if the notes to the non-consolidated financial statements pertaining to the significant uncertainty are inappropriate,issue a modified opinion on the non-consolidated financial statements. While the conclusions of the auditor are based on the audit evidence obtained up to the date of theaudit 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 with accounting principles generally accepted inJapan, 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 and accounting 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, 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 to professional 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 those matters that were of most significance inthe 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
communicated in its report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Conflicts of Interest
There are no special interests between the engagement partners/audit firm and the Company that should be disclosed under the provisions of the Certified PublicAccountants
Act.
(Notes) 1. The above is an electronic version of the original copy of the IndependentAuditors’Report, and the original report is maintained by the Company (acompany that files annual securities reports).
2. XBRLdata are not subject to the audit.

- 134 -

[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 28, 2021

[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)- 135 -

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 73rd fiscal year
(from April 1, 2020 to March 31, 2021) of the Company is reasonably and fairly stated in accordance with the Financial Instruments and Exchange Act and related
regulations.

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

- 136 -

[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 28, 2021

[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)- 137 -

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 accordance with the basic framework set forth in “On the Setting of the Standards andPractice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting (Council Opinions)” published by the BusinessAccounting 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 andfunction as a whole. Thus, internal control over financial reporting may not be able to completely 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, 2021 (i.e., the last day of the current fiscal year) in accordance withassessment standards for internal control over financial reporting generally accepted in Japan.
In this assessment, the management first assessed company-level controls that would have a material impact on the reliability of overall financial reporting on aconsolidated basis, and based on the results, then selected individual business processes to be assessed. In the selected individual process assessment, the management
assessed the effectiveness of internal control by analyzing the business processes in scope, identifying key controls that would have a material impact on the reliabilityof the financial 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, andcompanies accounted for by the equity method based on their materiality on the reliability of financial reporting. The materiality on the reliability of financial reporting
was determined in consideration of both quantitative and 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 5 consolidated
subsidiaries and 1 equity method affiliate were determined to be both quantitatively and qualitatively insignificant and were therefore not included in the scope ofassessment of company-level controls.
To specifically determine the process-level control assessment scope, 2 business locations were selected as “Significant Business Locations.” The 2 businesslocations were the top two in net sales (after eliminating intercompany transactions) for the previous fiscal year and accounted for approximately two-thirds of theCompany’s consolidated net sales in the aggregate for the previous 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 included in the scope ofassessment.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 applicable business 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 the current fiscal year was effective.

4. Supplementary Information
Not applicable.

5. Special Notes
Not applicable.

- 138 -

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