Annual Securities Report(Report pursuant to Article 24, Paragraph 1 of the Financial Instruments and Exchange Act)
Business year
(FY2023)

From April 1, 2023
through March 31, 2024

Oisix ra daichi Inc.

1-11-2 Osaki, Shinagawa-ku, Tokyo(E27260)

Annual Securities Report
1. This document has been prepared for printing or other output by adding a tableof contents and page numbers to the digital version of the Annual Securities
Report pursuant to Article 24, Paragraph 1 of the Financial Instruments andExchange Act submitted via the Electronic Disclosure for Investors Network(EDINET) system, as specified in Article 27-30-2 of that Act.
2. The Audit Report attached to the Annual Securities Report submitted as
described above, as well as the Internal Controls Report and Confirmation
Letter submitted with the above Annual Securities Report, are attached to theend of this document.

―2―

ContentsPage
FY2023 Annual Securities Report
CoverPart 1. Company information ..................................................................................................................................................................... 5
Section 1. Company overview .............................................................................................................................................................. 5
1. Trends in major KPIs, etc. .......................................................................................................................................................... 5
2. History ........................................................................................................................................................................................ 7
3. Business details .......................................................................................................................................................................... 9
4. Status of affiliates ..................................................................................................................................................................... 11
5. Employees ................................................................................................................................................................................ 13
Section 2. Business conditions............................................................................................................................................................ 17
1. Management policies, business environment, topics to address, etc. ........................................................................................ 17
2. Sustainability concepts and initiatives ...................................................................................................................................... 19
3. Business and other risks ........................................................................................................................................................... 30
4. Management’s analysis of financial standing, business results, and cash flows ....................................................................... 36
5. Important business contracts, etc. ............................................................................................................................................. 42
6. Research and development activities ........................................................................................................................................ 43
Section 3. Equipment and facilities..................................................................................................................................................... 44
1. Overview of capital investments, etc. ....................................................................................................................................... 44
2. Major facilities.......................................................................................................................................................................... 44
3. Plans for new construction, disposal, etc. of equipment and facilities ...................................................................................... 45
Section 4. Status of the reporting company ........................................................................................................................................ 46
1. Status of stock, etc. ................................................................................................................................................................... 46
2. Status of treasury stock acquisition, etc. ................................................................................................................................... 50
3. Dividend policy ........................................................................................................................................................................ 51
4. Status of corporate governance, etc. ......................................................................................................................................... 52
Section 5. Accounting ......................................................................................................................................................................... 77
1. Consolidated financial statements, etc. ..................................................................................................................................... 78
2. Nonconsolidated Financial Statements, etc. ........................................................................................................................... 127
Section 6. Overview of stock administration of the reporting company ........................................................................................... 143
Section 7. Reference information on the reporting Company ........................................................................................................... 144
1. Parent company or similar party for the reporting Company .................................................................................................. 144
2. Other reference information ................................................................................................................................................... 144
Part 2. Information on the reporting Company’s guarantor, etc. ............................................................................................................ 145

Audit Report
Internal Controls Report
Confirmation Letter―3―

Cover sheet
Document filed:Annual Securities Report

Pursuant to:

Article 24, Paragraph 1 of the Financial Instruments and Exchange Act

Filed with:

Director-General, Kanto Local Finance Bureau

Filing date:June 26, 2024

Business year:

FY2023 (from April 1, 2023 through March 31, 2024)

Company name:

Oisix ra daichi Inc.

Name and title of representative:

Kohey Takashima, Representative Director, CEO

Headquarters address:

1-11-2 Osaki, Shinagawa-ku, Tokyo

Telephone:+81-3-6867-1149 (main switchboard)

Name of administrative contact:

Shigeru Kumano, Corporate Officer, General Manager of Administration
Division

Nearest contact address:

1-11-2 Osaki, Shinagawa-ku, Tokyo

Telephone:+81-3-6867-1149 (main switchboard)

Name of administrative contact:

Shigeru Kumano, Corporate Officer, General Manager of Administration
Division

Provided for public inspection at:

Tokyo Stock Exchange, Inc.
2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo―4―

Part 1. Company information
Section 1. Company overview
1. Trends in major KPIs, etc.
(1) Consolidated KPIs, etc.
Term

FY2019FY2020

FY2021

FY2022

FY2023Fiscal year-end

March 2020

March 2021

March 2022

March 2023

March 2024

71,040100,061

113,476

115,176

148,408

1,825

7,037

4,153

2,810

4,438

790

5,031

2,727

1,807

4,120

726

4,901

2,968

2,319

3,397

14,19519,991

23,872

26,14037,42026,08738,36052,63464,502

143,728

Net sales
Operating profit
Profit attributable toowners of parent
Comprehensive income
Net profit
Total assets(millionyen)(millionyen)(millionyen)(millionyen)(millionyen)(millionyen)

Net assets per share(yen)

408.53522.62605.63672.84795.17

Earnings per share

(yen)

23.19

133.75

74.64

49.45

112.72

Diluted earnings per share

(yen)

23.03

133.52

74.60

–

–

Equity ratio

(%)

53.7

49.8

42.0

38.1

20.2

Return on equity

(%)

6.0

30.4

13.2

7.7

15.4

Price/earnings(times)

63.9

21.7

40.4

46.5

11.6

Cash flows from operating (million
1,080
8,819
924
5,306
activities
yen)
Cash flows from investing (million(1,754)(2,780)(4,110)(12,135)
activities
yen)
Cash flows from financing (million
254
1,894
636
8,265
activities
yen)
Cash and cash equivalents (million
7,654
15,552
13,033
14,720at end of period
yen)
860
915
986
1,032
Number of employees[Average number of(persons)
temporary employees,
[643]
[723]
[799]
[859]
not included above]
Notes:
1. Net sales excludes consumption tax, etc.
2. Diluted earnings per share is not given for FY2022 and FY2023 because there were no dilutive shares.

―5―

7,722
(10,815)
17,73529,44011,456[29,061](2) KPIs, etc. of the reporting company
Term

FY2019FY2020

FY2021

FY2022

FY2023Fiscal year-end

March 2020

March 2021

March 2022

March 2023

March 2024

68,01890,349101,541

102,821104,580

2,975

7,397

4,036

4,230

5,802

1,164

4,563

2,544

2,605

5,737

1,691

3,993

3,994

3,995

3,995

34,324,116

37,998,908

38,014,892

38,028,092

38,028,092

14,582

19,271

21,821

24,55830,36724,98735,35048,62361,72280,739424.90527.56597.12671.75830.67

–

–

–

–

–

[–]

[–]

[–]

[–]

[–]

Net sales
Operating profit
Net income
Capital
Total shares issued andoutstanding
Net profit
Total assets(millionyen)(millionyen)(millionyen)(millionyen)(share)(millionyen)(millionyen)

Net assets per share(yen)

Dividends per share[Interim dividends per
share included above](yen)

Earnings per share

(yen)

34.17

121.33

69.64

71.27

156.93

Diluted earnings per share

(yen)

33.93

121.12

69.60

－

－

Equity ratio

(%)

58.4

54.5

44.9

39.8

37.6

Return on equity

(%)

8.6

27.0

12.4

11.2

20.9

Price/earnings(times)

43.3

24.0

43.3

32.2

8.3

Dividend payout ratio

(%)

–

–

–

–

–

717

724

785

787

794

[619]

[693]

[759]

[829]

[872]

(%)

88.2

173.6

179.6

136.9

77.6

(%)

[88.2][122.8][122.3][125.9][173.9]

1,780

4,020

5,220

3,370

3,035

951

1,388

2,224

1,411

1,093

Number of employees[Average number of
temporary employees,
not included above]
Total shareholder return[For comparison: TOPIX
index](persons)

Max. share price(yen)

Min. share price(yen)

Notes:
1. Net sales excludes consumption tax, etc.
2. Diluted earnings per share is not given for FY2022 and FY2023 because there were no dilutive shares.
3. Maximum and minimum share prices for FY2021 and later are taken from the First Section of the Tokyo Stock Exchange
before April 4, 2022 and from the Tokyo Stock Exchange Prime Market thereafter.
Effective April 9, 2020, listing of Company shares transferred from the Tokyo Stock Exchange Mothers Market to the First
Section of the Tokyo Stock Exchange. Share prices before this date are from the Tokyo Stock Exchange Mothers Market.

―6―

2. History
Month/year

Event

June 2000

Oisix Inc. established

September 2000

Food Quality Audit Committee, an independent panel of academic experts and homemakers, established toaudit food safety

October 2000

Food deliveries begin through Oisix e-commerce site

July 2001

Food delivery services through dairy products vendors and other partners begin

June 2002

Oisix Club subscription service launched in e-commerce business

December 2009Entered international business segment with grand opening of Oisix Hong Kong

June 2010

Agreements on capital alliance and joint venture concluded with Recruit Corp. (now Recruit Holdings
Corp.)

November 2010

First brick-and-mortar store opens inside Ebisu Mitsukoshi Department Store in Shibuya Ward, Tokyo

January 2011

Gochimaru Inc., a joint venture with Recruit Corp. (now Recruit Holdings Corp.), begins operating

November 2011

Wellness Co., Ltd., a company operating an online flower and food gift delivery shop, made a wholly
owned subsidiary through stock acquisition

April 2012

Absorbed Wellness Co., Ltd.

March 2013

Listed on Tokyo Stock Exchange Mothers Market

August 2013

Capital and business alliance agreements concluded with Dean & Deluca Japan (now WELCOME Co.,
Ltd.)

October 2015

Oisix Hong Kong Co., Ltd. established as overseas subsidiary to handle certain cross-border e-commerce
functions in Hong Kong

May 2016

Acquired Tokushimaru Inc., which provides franchise mobile supermarket systems serving seniors, madesubsidiary

March 2017

Daichi wo Mamoru Kai Co., Ltd., a delivery service pioneer providing additive-free processed fruit,
vegetable, meat, and seafood products, made subsidiary through stock swap

April 2017

Invested in Nihon Agri, Inc., which exports agricultural products from Japan

July 2017

Renamed Oisix.Daichi Inc.

September 2017

Oisix Shanghai Co., Ltd. established to pursue e-commerce sales of products procured in China incompliance with the Company’s safety standards

October 2017

Absorbed Daichi wo Mamoru Kai Co., Ltd.

February 2018

Radish Boya Co., Ltd., a company with a roughly 30-year history and a wealth of contracted producers thatprovide fruit, vegetables, meats, and seafood products and additive-free processed food products with afocus on uncompromising health and safety, made subsidiary

June 2018

Karabiner Inc., which provides system development and maintenance services, made subsidiary

June 2018

Launch of ISETAN DOOR, an e-commerce site for subscription deliveries operated by Isetan Mitsukoshi
Holdings Ltd. with operational support from the Company

July 2018

Renamed Oisix ra daichi Inc.

August 2018

Crazy Kitchen Co., Ltd., which provides catering services to order, made subsidiary

October 2018

Absorbed Radish Boya Co., Ltd.

December 2018

Oisix Inc. established as overseas subsidiary in preparation for entering the US market

February 2019

WELCOME Co., Ltd., which operates Dean & Deluca, made an affiliate via capital increase underwritten
through third-party allocation of shares

May 2019

Three Limes, Inc. (aka The Purple Carrot), which provides delivery of vegan meal kits in the US, madesubsidiary

August 2019

Future Food Fund Inc. established to launch activities to build startup ecosystem in the food field

October 2019

Future Food Fund No. 1 investment limited partnership established to stimulate investment in food startups

April 2020

Listing of shares transferred to the First Section of the Tokyo Stock Exchange―7―Month/year
March 2021

Event
Toyosu Gyosho Sanchoku Ichiba (formerly Seven Work Co., Ltd.), which handles supply and wholesalingof seafood products in line with products available at the Toyosu Market and operates direct network withproducers, made subsidiary

January 2022

Future Food Lab Co., Ltd. established to undertake food-related research and development

April 2022

Listing of shares transferred to the Tokyo Stock Exchange Prime Market

May 2022

Yutori No Kukan Corporation, a company founded by chef Harumi Kurihara to propose lifestyle solutions
centered on recipes and sales of kitchen accessories, made an affiliate

October 2022

SHiDAX Corporation, whose businesses include food service at nursery schools, hospitals, and otherfacilities, made an affiliate

January 2023

Future Food Fund No. 2 investment limited partnership established to further stimulate investment in foodstartups

March 2023

AGRIGATE, operator of Shunpachi greengrocers and distinguished by strong ties to producers and markets
for products centered on agricultural produce, made an affiliate via capital increase underwritten throughthird-party allocation of shares

November 2023

Capital alliance and sponsorship agreements concluded with Niigata Albirex Baseball Club, Oisix Niigata
Albirex Baseball Club launched

January 2024

SHiDAX Corporation made subsidiarynonpi, Inc, which plans and operates kitchen-less employee dining halls, made subsidiary

March 2024

AGRIGATE made subsidiary―8―3. Business details
The Group (the Company and its affiliates) consists of 32 consolidated subsidiaries (Fruit Basket Co., Ltd., Tokushimaru Inc., Oisix
Hong Kong Co., Ltd., Karabiner Inc., Crazy Kitchen Co., Ltd., Oisix Inc., Three Limes, Inc., YOKO Street, INC., Future Food Fund
Inc., Future Food Fund No. 1 investment limited partnership, Future Food Fund No. 2 investment limited partnership, Toyosu Gyosho
Sanchoku Ichiba, Future Food Lab Co., Ltd., nonpi, Inc, AGRIGATE, SHIDA Holdings Corporation [now SHiDAX Holdings
Corporation], SHiDAX Corporation, and 14 other subsidiaries) as well as five affiliates (Nihon Agri, Inc., WELCOME Co., Ltd.,
Niigata Albirex Baseball Club Co., Ltd., and two others).
The Company has identified the following as its corporate philosophy and reason for existing: to provide services that empower evergrowing numbers of people to enjoy better nutrition. Its approach to business accounts for taste, convenience, and safety in the foods
it delivers.
The Company and its consolidated subsidiaries and affiliates are grouped into the five reportable segments: the BtoC Subscription
Business; BtoB Subscription Business; Social Services Business; Vehicle Operation Services Business; and Other Businesses. The
Company has revised its reportable segments beginning with the consolidated fiscal year under review. For details, see “Section 5.
Accounting: 1. Consolidated financial statements, etc.: Notes (Segment information, etc.).

(1) BtoC Subscription Business
The BtoC Subscription Business provides home delivery services for high-value-added food (fruits and vegetables, processed foodproducts, and meal kits) with low environmental impact, based on the Group’s unique cultivation and production standards, in
response to customer orders received via websites and catalogs. It also delivers daily commodities and miscellaneous products.
In Japan, the Group engages in direct sales of products consisting mainly of food products and ingredients through the Internet
and catalogs under three brands: Oisix, Daichi wo Mamoru kai, and Radish Boya. Oisix targets mainly dual-income householdswith children. It delivers premium time-saving products and services. Daichi wo Mamoru kai focuses on developing new services
and improving existing services to meet the needs of its primary targets of senior two-person households, based on the concept ofensuring proper daily nutrition. Radish Boya targets mainly households seeking to contribute to society through everyday activities,
including cooking, and focuses on the development of products and services like Fuzoroi Radish (“irregular radishes”).
In overseas markets, we operate the Purple Carrot brand in the United States. Purple Carrot primarily targets consumers eager toachieve healthy lifestyles through plant-based diets. It provides plant-based time-saving products and services.
(2) BtoB Subscription BusinessConducting food ingredient wholesaling business for nursery schools, and cafeteria food services and related management atcompanies, public offices, and nursery schools, etc., and outsourced food providing/management services for hospitals andfacilities for the elderly, etc.
(3) Social Services Business
The Social Services Business provides and manages public school lunch services, after-school childcare facilities/services,children’s centers, libraries, and Michino-Eki (roadside stations) as a subcontractor for local governments and other such entities.
It also provides various other services outsourced by private companies.
(4) Vehicle Operation Services Business
Operations concerning contracted vehicle operations/management services and maintenance/inspections outsourced by privatecompanies and local governments(5) Other Businesses
This segment includes the e-commerce support business for other companies, mobile supermarket services, and the Web systems
development business.

―9―

The above businesses are diagrammed below.
Business diagram
Business segment
BtoC Subscription
Business

BtoB Subscription
Business

Affiliates

Product and service provision

BtoC Subscription Business・ The Company
 Three Limes, Inc.

Customers(General consumers)

BtoB Subscription Business・ The Company
 SHiDAX CONTRACT FOOD SERVICECORPORATION SHiDAX FOOD SERVICE CORPORATION SLOGIX CORPORATION Three other companies

Social Services Business SHiDAX DAISHINTO HUMAN SERVICE Inc.
One other company
Customers(Corporations)(Local governments)

Social Services
Business

Trading
partners

Purchases of
products andmaterials

Vehicle Operation Services Business DAISHINTO Inc.
One other company

Outsourcing
Vehicle Operation
Services Business

Other Businesses
Major businesses:
・ Solutions
・ Retail・ Investment
etc.

Other Businesses
 Tokushimaru Co., Ltd.
 Future Food Fund Co., Ltd.
 Toyosu Gyosho Sanchoku Ichiba nonpi, Inc
 AGRIGATE SHiDAX Corporation
 15 other companies* Nihon Agri, Inc.
* WELCOME Co., Ltd.
* Niigata Albirex Baseball Club Co., Ltd.
* Two other companies
Key:  consolidated subsidiary, * equity method
affiliate―10―

Customers(General consumers)(Corporations)(Local governments)

4. Status of affiliates
Name

Address

Capital orinvestment stake(million yen)

Main lines of business

Voting rights held(%)

Relationship(Consolidated subsidiaries)
Fruit Basket Co., Ltd.

Kannami, Tagata-gun,Shizuoka Prefecture

20

Tokushimaru Co., Ltd.

Tokushima, Tokushima
Prefecture

10

Oisix Hong Kong Co., Ltd.
(Note 1)

Hong Kong

Karabiner.Inc

Processing, productdevelopment, and sale offruits, vegetables, and otheragricultural produce
Development ofsupermarket partners forthe mobile supermarket
business, provision ofexpertise to sales partners

100

Businesstransactions

90

Concurrent postingof officers
Outsourcing
Concurrent postingof officers
Logistics
outsourcing
Concurrent postingof officers
Outsourcing

HKD57 million

Handles the Company’s
local businesses in Hong
Kong under contract

100

Fukuoka, Fukuoka
Prefecture

25

System development andmaintenance70

Crazy Kitchen Co., Ltd.

Shinagawa-ku, Tokyo

5

Event production, catering
services

100

Businesstransactions

Oisix Inc.
(Note 1)

Delaware, USA

USD27 million

Investment

100

Concurrent postingof officers

Three Limes, Inc.
(The Purple Carrot)(Notes 1, 2)

Massachusetts, USA

USD16 million

Vegan ingredients delivery
in the U.S.

100 Concurrent posting(100) of officers

Future Food Fund Co., Ltd.

Shinagawa-ku, Tokyo

15

Investment management

100

YOKO Street, INC.
(Note 2)

Delaware, USA

USD29 million

Delivery of Japanese foodin the US

80
(80)

–

Future Food Fund No. 1
investment limited partnership(Notes 1, 2, 3, 4)

Shinagawa-ku, Tokyo

Investment

10
(1)

–

Toyosu Gyosho Sanchoku Ichiba

Ota-ku, Tokyo

40

Purchase and wholesalingof seafood products

51

Future Food Lab Co., Ltd.

Shinagawa-ku, Tokyo

5

Food-related R&D,
manufacture, and sales

80

Future Food Fund No. 2
investment limited partnership(Notes 1, 2, 3, 4)

Shinagawa-ku, Tokyo

716

Investment

16
(1)

–

nonpi, Inc

Chiyoda-ku, Tokyo

248

52

Businesstransactions

AGRIGATE

Shinagawa-ku, Tokyo

148

54

Businesstransactions

SHIDA Holdings Corporation(now SHiDAX Holdings
Corporation)(Note 1)

Chiyoda-ku, Tokyo(now Shinagawa-ku,
Tokyo)

100

66

Concurrent postingof officers

2,000

Restaurant management,
operation of company
cafeteria without kitchen
Production and sale ofagricultural produce andfoodstuffs
Currently holds shares of
SHiDAX Corporation
Management instructions
for business subsidiaries
and performance of theiroutsourced indirect
operations
Outsourced foodprovision/management
services at company/schoolcafeterias, etc.
Outsourced food provision
services for hospitals,
facilities for the elderly,
nursery schools, etc.

Concurrent postingof officers
Outsourcing

Concurrent postingof officers
Businesstransactions
Concurrent postingof officers
Outsourcing

Concurrent posting
66 of officers(66) Business
transactions

SHiDAX Corporation(Notes 1, 2)

Chofu, Tokyo

100

SHiDAX CONTRACT FOODSERVICE CORPORATION(Note 2)

Chofu, Tokyo

100

SHiDAX FOOD SERVICECORPORATION(Note 2)

Chofu, Tokyo

100

SLOGIX CORPORATION(Note 2)

Chofu, Tokyo

90

Sale of food ingredientsand consumables for use by
the food service industry

Concurrent posting
66 of officers(66) Business
transactions

SITEX CORPORATION(Note 2)

Chofu, Tokyo

10

Development of web
applications

66
(66)

–

SHiDAX OFFICE PARTNERCORPORATION(Note 2)

Chofu, Tokyo

10

Internal company services
outsourced by Group
companies

66
(66)

–

―11―

66 Concurrent posting(66) of officers
66 Concurrent posting(66) of officers

Name

Address

Capital orinvestment stake(million yen)

SHiDAX SPORTS AND
CULTURE CORPORATION(Note 2)

Chofu, Tokyo

10

SHiDAX FOOD SERVICEHOKKAIDO CORPORATION(Note 2)

Sapporo, Hokkaido

10

Kokunai Food Service
Corporation(Note 2)

Chofu, Tokyo

16

Shunsai Corporation(Note 2)

Chofu, Tokyo

1

DAISHINTO Inc.
(Notes 1, 2)

Chofu, Tokyo

100

SHiDAX DAISHINTO HUMANSERVICE Inc.
(Note 2)

Chofu, Tokyo

100

Main lines of business
Management of event
rooms/halls
Outsourced food services
and related management
operations for cafeterias atcompanies and schools, etc.
Outsourced food services
and related management
operations for cafeterias atcompanies and schools, etc.
Outsourced food services
and related management
operations for hospitals,
facilities for the elderly, andnursery schools, etc.
Outsourced vehicle
operations/management for
private companies and local
governments
Outsourced facility
operations/management for
private companies and local
governments, food services
primarily forelementary/secondary
schools

Voting rights
held (%)
66(66)

Relationship–66 Concurrent posting(66) of officers
66 Concurrent posting(66) of officers

66 Concurrent posting(66) of officers

66
(66)

–

66
(66)

–

–

Four other companies(Equity method affiliates)
Nihon Agri, Inc.

Shinagawa-ku, Tokyo

646

Export of agricultural
products from Japan

34

Concurrent postingof officers

WELCOME Co., Ltd.

Meguro-ku, Tokyo

50

Lifestyle businesses
centered on retail and foodservice25

Concurrent postingof officers

Niigata Albirex Baseball Club
Co., Ltd.

Niigata, Niigata
Prefecture

100

Professional baseball team
operation

20

Concurrent postingof officers
Businesstransactions–

Two other companies

Notes:
1. Qualifies as a specified subsidiary.
2. Percentages of voting rights in parentheses are those held indirectly. These voting rights are included in the total percentages ofvoting rights held.
3. Percentage of voting rights, etc. held indicates share of investments in the investment limited partnership.
4. Future Food Fund Co., Ltd. does business as an unlimited partner.

―12―

5. Employees(1) Consolidated companies
As of March 31, 2024
Segment

Employees (persons)

BtoC Subscription Business

749

(856)

BtoB Subscription Business

2,533(6,848)Social Services Business

4,006(19,643)

Vehicle Operation Services Business

3,782(1,500)

386

(214)

11,456(29,061)

Other Businesses
Total

Notes:
1. Numbers of employees indicate numbers working within the Group (including those seconded to the Group from outside
employers, but excluding those seconded from the Group to outside employers).
2. Numbers in parentheses under Employees are not included in the number of employees, indicating annual average numbers of
irregular employees (including part-time and temporary employees but excluding dispatched and other employees).
3. The number of employees grew by 10,424 from the end of the previous consolidated fiscal year. Most of this growth isattributable to SHIDA Holdings Corporation (now SHiDAX Holdings Corporation) and SHiDAX Corporation and its 14
subsidiaries becoming consolidated subsidiaries effective January 5, 2024.
(2) Reporting company
Employees (persons)
794

Average age (years)(872)

Average years of service (years)
40.9

Segment

As of March 31, 2024
Average annual salary(thousand yen)

10.1

6,454

Employees (persons)

BtoC Subscription Business

667

(854)

BtoB Subscription Business

20

(5)

Other Businesses

107

(13)

794

(872)

Total

Notes:
1. Numbers of employees indicate numbers working within the Company (including those seconded to the Company from outside
employers but excluding those seconded from the Company to outside employers).
2. Numbers in parentheses under Employees are not included in the number of employees, indicating annual average numbers of
irregular employees (including part-time and temporary employees but excluding dispatched and other employees).
3. Average annual salary includes bonuses and wages other than base wages.
(3) Labor unions
The SHiDAX Labor Union, a member of UA ZENSEN, has been organized at the Company subsidiary SHiDAX Corporation andsome of its subsidiaries. Labor-management relations are stable.

―13―(4) Diversity
The Group respects the dignity, human rights, and individuality of all workers. Under the basic philosophy of respect for diversity
while prohibiting unfair treatment on the basis of nationality, race, gender, sexuality, or other attributes, it has established theDiversity, Equity, and Inclusion Committee as part of management strategies intended to enhance compliance with and throughadherence to this basic philosophy. As its businesses grow in scale, the Group employs workers who are nationals of 22 countries,
centered on workers at shipping facilities (as of March 31, 2024). In addition to promoting the employment of people withdisabilities, it sponsors parasports and encourages employee involvement in the management of parasports organizations. Its efforts
to ensure the thorough permeation of this philosophy include an interested party mentoring program in activities to support people
with disabilities; sexual minority training centered on HR personnel; and employee group activities undertaken by interested party
allies.
Harnessing the respective and combined emergent strengths of the Company and SHiDAX Corporation, which joined the Groupin January 2024, the Group will further enhance efforts to foster a culture of mutual affirmation and create environments in which
a diverse range of human resources can thrive.
Women as a percentage of the filing company’s employees, managers, and officers are presented below.
Employees (*1)

Managers (*2)

Officers

49.6%

20.8%

38.5%

Reporting company*1 Calculated based on permanent full-time employees*2 Calculated based on the provisions of the Act on the Promotion of Women’s Active Engagement in Professional Life (ActNo. 64 of 2015). Figures for managers are calculated based on those in posts equivalent to department manager or above.
The Group will respond to current needs by developing environments in which human resources who grow and contribute to results
can be evaluated fairly and are provided opportunities for further success. Given already 38.5% of officers are women, the Groupis seeking to achieve a percentage of women at 30.0% of its managerial positions through further enhancements in efforts toprovide equal opportunities to employees.
The percentage of men taking childcare leave and similar programs and male-female wage disparities at the reporting company
are presented below.
Percentage taking
childcare leave (*3)
Reporting company

100.0%

Male-female wage disparities (*4)
All workers

Permanent full-time
employees

Other than permanent
full-time employees

63.0%

69.7%

82.5%

*3 Calculated as the total percentage taking childcare leave and other leave for childcare purposes under Article 71-4,
Paragraph 2 of the Enforcement Regulations to the Act on the Welfare of Workers Who Take Care of Children or Other
Family Members Including Child Care and Family Care Leave (Ministry of Labour Directive No. 25 of 1991) under theprovisions of the Act on the Welfare of Workers Who Take Care of Children or Other Family Members Including Child
Care and Family Care Leave (Act No. 76 of 1991).
*4 Average annual wages for permanent short-time employees and part-time workers are calculated based on the number of
those employees adjusted by the designated working hours of permanent full-time employees (eight hours/day).
Male workers at the Company have long taken childcare leave at rates above the national average. Nevertheless, targeting a 100%rate of childcare leave taken, the Company adopted a unique program in October 2022 under which employees can take up to fivedays’ paid time off when a spouse gives birth. In the fiscal year ended March 2024, through measures such as careful explanations
given to employees, all male employees at the Company eligible to take leave as their spouses planned to give birth took suchleave. Our goal is to achieve a target of 100% in the fiscal year ending March 2025 also.

―14―

Disparities among permanent full-time employees among workers permanently employed by the reporting company are presented
below.
Employees
Senior management

Year ended
March 2024

Supplemental information

101.3%

Grades M7–5 and S7–5

88.5%

Grades M4–1 and S4–1

90.0%

Grades I3–1 and E5–1

Senior specialists
Management
Specialists
Other employees* Calculations exclude eligible persons exceeding 150% of the median for each grade due to factors such as special conditions
at the time of hiring (2.0% of total).
While the male-female wage disparity is significant—63% for all workers—this results from the numbers of other than permanent
full-time employees at the Company’s shipping facilities and the relatively high rate of female workers among them, at just under
40%.
Comparisons of wage disparities at three levels based on the Company’s job grades shows disparities of 101.3% for senior
management and senior specialists; 88.5% for management and specialists; and 90.0% for other employees. This represents an
improvement in disparities of 4.0% for management and specialists and 2.6% for other employees. The Company is also creating
opportunities for women whose improved skills have been recognized to take on the challenges of management positions. In doing
so, to rectify disparities, we have revised the corresponding grade salary levels. The goal is to achieve a target of 100% at eachlevel in the year ending March 2026 by focusing on wage disparities at each of these levels.
The percentage of employees with disabilities is presented below.
Rate
Reporting company

2.8%

The statutory rate for acceptance of workers with disabilities is 2.8%. The figure for the Company exceeded 3% at the end of the
fiscal year. The Company has been able to achieve the increased national standard of 2.7% scheduled to take effect in July 2026,
three years ahead of schedule. Voluntary mentoring activities for interested parties implemented as part of the activities of theDiversity, Equity, and Inclusion Committee have been accepted positively and will continue.
Midcareer hires as a percentage of all hires are presented below. (Year ended March 2024 results)
Employees *Reporting company

64.6%* While the Company hires new graduates, it has sought to strengthen in-house skills and diversity by securing sufficientnumbers of highly skilled, diverse human resources to serve as immediate assets in engineering and other posts. Hiring of
new graduates resumed in the year ended March 2024.
Presented below is data subject to disclosure on human capital at companies that became Company subsidiaries in the fourth
quarter of the consolidated fiscal year. This data includes information from the third quarter of the consolidated fiscal year andearlier.

―15―

Current fiscal year

Name

SHiDAX CONTRACT FOODSERVICE CORPORATION
SHiDAX FOOD SERVICECORPORATIONDAISHINTO Inc.
SHiDAX DAISHINTOHUMAN SERVICE Inc.

Women as apercentage ofmanagers (%)(Note 1)

Percentage ofmale workers
taking childcare
leave (%)
(Note 2)

10.0

60.0

23.1

Male-female wage disparities (%) (Note 1)
Permanent fulltime employees

Other thanpermanent fulltime employees

66.2

78.4

64.1

20.0

41.3

73.9

43.9

–

18.2

66.2

87.3

57.1

14.3

20.0

74.5

72.1

84.1

All workers

Notes:
1. Calculated based on the provisions of the Act on the Promotion of Women’s Active Engagement in Professional Life (Act No.
64 of 2015). Figures for managers are calculated based on those in posts equivalent to department manager or above.
2. Percentages taking childcare leave, etc. are calculated in accordance with Article 71-4, Paragraph 1 of the Ordinance for
Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring forChildren or Other Family Members (Ministry of Labor Ordinance No. 25 of 1991), pursuant to the provisions of the Act onChildcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family
Members (Act No. 76 of 1991).
3. Data on consolidated subsidiaries other than those shown above are omitted because their disclosure is not required under theprovisions of the Act on the Promotion of Women’s Active Engagement in Professional Life (Act No. 64 of 2015) or the Act onChildcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family
Members (Act No. 76 of 1991).

―16―

Section 2. Business conditions
1. Management policies, business environment, topics to address, etc.
Forward-looking statements found in the text represent the Group’s judgments as of the end of the consolidated fiscal year underreview.
(1) Management policies
Under its corporate philosophy—Farm for Today, Table for Tomorrow—the Group has identified a management vision of building
and broadening the future of food by providing services that empower ever-growing numbers of people to enjoy better nutrition;by building systems to ensure that producers of better foods are rewarded and can take pride in their work; by realizing a sustainable
society by continually refining methods to link consumers to producers; and by delivering solutions through its business activities
to social issues related to food.
Based on this corporate vision, while increasing its social value, the Group will strive to grow its corporate and shareholder value
through business growth and enhanced earning capabilities centered on the BtoC Subscription Business in addition to expansionof its business domains to achieve discontinuous growth.
(2) Business environment
The BtoC Subscription Business, the Group’s primary business, specializes in high-value-added food and daily commodities withlow environmental impact, based on the Group’s unique cultivation and production standards.
The business environment of the Japanese food delivery market, to which the BtoC Subscription Business belongs, is changing
dramatically from year to year. Examples include diversifying purchasing channels as numerous food delivery players emerge andrising logistics costs against the backdrop of a labor shortage of delivery personnel. At the same time, the food delivery market isexpanding steadily due to various factors, including growing use of e-commerce by consumers and the effects of growth in demandfor delivery services due to the COVID-19 pandemic and the subsequent firm establishment of such services. The market for safe,
reliable high-value-added food products like those delivered by the Company is projected to continue to grow for various reasons,
including growing awareness of climate change and the environment and the permeation of lifestyles with due regard for social
issues.
Online supermarkets and food delivery by regional consumer cooperatives, as well as home delivery of frozen ready-to-eat meals
and similar services, are closely related to the food delivery market in Japan. Of these businesses, the Group differentiates its
products by specializing in delivery of high-value-added foods and daily commodities. It believes that consumers recognize thesedifferences and choose services accordingly. In addition, while the market for food delivery through e-commerce is growing, it
still accounts for a small share of the overall retail food products market. The Company believes that accelerating market growth
will be a key to its business. For this reason, it regards its relationships with other industries as cooperative, not competitive.
Consumer trends point to rapidly diversifying lifestyles and values. Examples include the growing need for time-saving solutions,as two-career households continue to expand; rising health awareness; and growing interest in the social implications ofconsumption. The structure of society continues to undergo dramatic changes, including low birth rates, aging populations, andaccelerating outsourcing of services from the public to the private sector. These factors are generating demand for products andservices that can be provided rapidly and meet specific needs, which in turn requires the rapid identification of these needs andawareness of the various social issues facing individual customers.
The Group seeks to further enhance its new value proposals in various ways, including through unique products, services, andexperiences available only through its services.
(3) Management strategies
In light of the business environment described above, while assigning top priority to efforts to grow its main BtoC Subscription
Business and enhance its earning capabilities, the Group will focus on the BtoB Subscription Business, whose business scale has
expanded significantly following the combination with SHiDAX CORPORATION. The Group will also seek to enhance businessalliances to achieve discontinuous business growth and steadily and swiftly expand its business domains into food delivery
overseas, retail and wholesale businesses, and other domains.

―17―

(Growing the BtoC Subscription Business)
With the market environment for its main BtoC Subscription Business changing dramatically from year to year, the Group regards
establishing competitive advantages as a top priority and will rapidly implement sustained measures in areas like growing thecustomer base and increasing the added value of products.
To grow the BtoC Subscription Business, it aims for business growth by building a four-brand portfolio based on three domestic
brands: Oisix, Daichi wo Mamoru kai, Radish Boya, and the US brand Purple Carrot. The Group will improve its services to meet
individual customer needs and seek to expand subscribers and increase volumes purchased and purchase frequency. To do so, in
addition to implementing business strategies tailored to the business phase of each brand, it will seek to share the market expertise
accumulated through years of providing subscription services across the Group and strictly manage its KPIs.
To increase the added value of its products, in addition to offering a wide lineup of products based on its unique cultivation andproduction standards, the Group will develop new products to meet customer needs while enhancing its range of original products,
such as Kit Oisix meal kits, that deliver recipes along with ingredients, including seasonings.
In product procurement, it will expand its lineup of high-value-added products by leveraging the procurement and product proposal
capabilities of Group companies Agrigate Co. and Toyosu Gyosho Sanchoku Ichiba and investments in facilities like Kita-Sanriku
Factory Inc., while focusing on efficient procurement based on direct purchases from producers and manufacturers across Japan.
In the area of product development, the Group is enhancing the development of products that will allow consumers to enjoy theflavors of restaurants and professional chefs at home. To this end, it is strengthening ties within the Group to increase added valueby sharing expertise with the Group company WELCOME, which operates Dean & Deluca.
(Enhancing the earnings capabilities of the BtoC Subscription Business)
To enhance its earnings capabilities, the Company will cut product costs and logistics expenses, where considerable room for costsavings remains. In the area of product costs, it will pursue savings by bringing production and processing in-house, implementing
efficiency improvements by boosting production volumes of Company-produced products, and promoting efforts to make effective
use of ingredients that have traditionally been considered inedible.
In the area of logistics expenses, the Oisix brand will promote cost savings by making operations more efficient in various ways,
including automating processes related to product collection and packaging at logistics facilities for both refrigerated and frozen
foods at the ORD Atsugi Cold Storage Station, completed in January 2024, and at the ORD Ebina Station, which was relocated in
January 2022. The Group also will strive to optimize logistics operations at each brand over the medium to long term.
(Expanding business domains)
The Group is building on the expertise accumulated in the BtoC Subscription Business in Japan to establish and grow food delivery
subscription services in the United States and Hong Kong.
In the BtoB Subscription Business in Japan, in addition to expanding the existing ingredients wholesaling business for nurseryschool meals, it will leverage the business portfolio of SHiDAX Corporation, which became a consolidated subsidiary in January2024, to supply ingredients to facilities other than nursery schools and enhance the development of high-value-added services.
It will also strive to identify solutions to social issues through the activities of the SHiDAX Corporation, including contracted
services for local governments and vehicle operation services.
(4) Priority business topics
The Group recognizes the following as priority business topics:(Enhancing value proposals for customer food needs)
The accelerating diversification of lifestyles and values, including the growing need for time-saving solutions for increasing two
worker households, growing awareness of health issues, and growing interest in the social implications of consumption is
generating demand for products and services that can be provided rapidly and meet specific needs. This, in turn, requires the rapid
identification of these needs and stronger awareness of the various social issues facing individual customers.
The Group recognizes the need to enhance new value proposals related to food, including unique products and experiences
available only through its services.

―18―

(Boosting efforts to establish a sustainable food future)
In light of various emerging social issues that affect food, including increasing global greenhouse gas emissions, lower crop
productivity due to climate change, and growing volumes of food waste, the Group recognizes the need to strengthen efforts tofind solutions and achieve a sustainable food future. Related efforts will involve food tech and other technologies.
The services offered by the BtoC Subscription Business propose original subscription boxes based on proprietary data analysis tomatch variable farm harvest conditions to product needs that differ from customer to customer. This helps reduce food waste bothat the farm and on the table. The Group will strive to improve the accuracy of related data.
In the area of production, the Group invests in startups with proprietary agri-tech expertise through the subsidiary Future Food
Fund and each investment limited partnership. It is striving to improve the management and production efficiency of Japanese
agriculture, including the producers with which it trades. The Kit Oisix meal kits sold by the Company use nonstandard produce
in their cut vegetables and are provided in kits that contain only the necessary amounts of ingredients to reduce food waste at home.
These meal kits help reduce food waste both at the farm and on the table.
The Group will enhance efforts to move closer to a sustainable food future through further business model improvements and foodtechnology.
(5) Objective KPIs for assessing progress toward management targets
The Group focuses on net sales, operating profits, EBITDA (operating profit + depreciation + amortization of goodwill), and therate of growth in each as KPIs for assessing progress toward the goals of the management strategies above. It also monitors other
KPIs, including the ratio of operating profit to net sales, as indicators of profitability, and numbers of subscribers in the BtoC
Subscription Business, as an indicator of the growth of its customer base.

2. Sustainability concepts and initiatives
The Group’s thinking on sustainability and sustainability initiatives is outlined below. The forward-looking statements in the text are
based on the Group’s judgments as of the end of the consolidated fiscal year under review.
The Group strives to realize a sustainable society and achieve growth by finding solutions to food challenges under its corporate
philosophy: Farm for Today, Table for Tomorrow. The Group takes action through its various brands and businesses, including Oisix,
Radish Boya, and Daichi wo Mamoru kai in the BtoC Subscription Business, and subsidiaries Tokushimaru and Purple Carrot. During
the period under review, SHiDAX Corporation, which likewise engages in business to deliver solutions to society’s challenges, wasadded to the Group’s list of consolidated subsidiaries.
The business model of the Group’s mainstay BtoC Subscription Business is to bring about sustainable retail by building sustainable
relationships across the entire supply chain through connecting producers directly to consumers. The sustainability of this system isachieved through subscription boxes, which operate through proprietary algorithms that match accumulated data on customer preferenceswith the growing conditions of crops, which depend on weather patterns. This allows customers to continue purchasing the products they
enjoy and the Group to present a product lineup that reflects actual growing conditions on farms, making it possible for us to promote
both efficient consumption of crops and customer satisfaction.
The Group is simultaneously aware of both its responsibility to solve social issues and its unique potential to actually contribute torealizing solutions. By growing its businesses, it will deliver an increasingly wide-ranging food lineup while helping society move closer
to sustainability.
In doing so, given the Group’s current business environment and the addition of SHiDAX Corporation as a consolidated subsidiary, theGroup has identified the following three domains as important sustainability topics to create social and economic value and realize asustainable society.
1. Responding to environmental issues and climate change
2. Improving the internal environment and developing human resources to strengthen human capital
3. Community building
See the Company’s Sustainability website (https://en.oisixradaichi.co.jp/sustainability/) for more information on the Group’s
sustainability concepts and individual initiatives.

―19―

(1) Governance and risk management related to overall sustainability
The Group is strengthening its sustainability promotion structure to strengthen corporate value from a sustainability perspective.
Under this structure, President and Representative Director Kohey Takashima has ultimate responsibility for management decisions
on sustainability topics, while the Board of Directors and the Management Committee have the responsibility of and authority foroverseeing risks and opportunities related to overall sustainability.
The Risk Management Committee plays a central role in implementing risk management related to sustainability within the Group.
As an organization under the direct oversight of the President, the Risk Management Committee consists of a chairperson, members
representing individual sections, and a secretariat. This committee meets monthly to share risk case studies, discuss response torisks across multiple sections, and hear activity reports from individual members. The Risk Management Committee submits aquarterly report to the Corporate Officers Committee, which discusses individual risks and approves related matters.
The Group recognizes that its responses to sustainability issues are key management topics that involve not just risk reduction but
potential revenue opportunities. It will address these issues actively and dynamically to raise corporate value over the medium tolong term.

(2) Key sustainability topics
Through the governance and risk management process outlined above, the Group has identified the following three importantsustainability topics. Other topics are described under “3. Business Risks.”

1. Responding to environmental issues and climate change
2. Improving the internal environment and developing human resources to strengthen human capital
3. Community building
1. Responding to environmental issues and climate change(1) Basic policy and examples of initiatives
As described under the Climate Change Scenario Analysis Summary below, the Company aims for business growth by identifying
solutions to society’s challenges, particularly those related to food, by analyzing climate change scenarios, ascertaining theimpacts of climate change risk and opportunities, and incorporating the findings into business management.
(Climate change scenario analysis summary)
The Group performed a scenario analysis based on TCFD recommendations to identify risks and opportunities under different
climate change scenarios.
We examined the impact of climate change as of 2030 in terms of risks and opportunities under two scenarios: a 1.5°C increase(1.5°C scenario) and a 4°C increase (4°C scenario) in temperature from pre-industrial levels in 2100. To this end, we first
identified specific risks and opportunities with representatives from each department, selecting those that would have the greatest
impact on the Group and our entire value chain. For each risk and opportunity selected, we performed assessments using
qualitative and quantitative methods to ascertain the extent of the financial impact.

1. Responding to climate change: Disclosures based on the recommendations of the Task Force on ClimateRelated Financial Disclosures (TCFD)
・Impact assessment based on scenario analysis (financial impact assessment)
Main assumed scenarios
Scenarios

Main referenced scenarios

1.5°C scenario

SSP1-1.9 scenario (IPCC, 2023)
Net Zero Emissions by 2050 Scenario (IEA, 2022)

4°C scenario

SSP5-8.5 scenario (IPCC, 2023)
Stated Policy Scenario (STEPS) (IEA, 2022)―20―

a. Selected risks and impact as of 2030
Assumed financial impact (large: over 2 billion yen; medium: 100 million to 2 billion yen; small: under 100 million yen)
(Transition risk)
Category

Time horizon

Area ofPotential business impact

financial

Extent of impact
1.5°C

4°C

Large

Small

Medium

Small

Large

Small

Medium

Small

Large

Small

Small

Small

Small

Small

Large

Small

impactIntroduction ofMedium tocarbon taxes

long term

Costs- Rising costs of agricultural, fisheries,
livestock, consumables, and other raw materials
and purchases- Energy costs for factories andlogistics/delivery will increase.
- Need to upgrade vehicle fleets and revise

Policies and laws

costs associated with Company emissions
Tightening of plastic

Medium toregulations

long term

Costs- Stricter plastic regulations will necessitate thedevelopment and introduction of alternative
packaging materials, which will increase costs.

More stringent

Medium term

GHG emissions

Costs/- Rising burden of conversion costs and otherassetsexpenses related to upgrading vehicle andregulations
Introduction/delivery fleets to EVs
Short termtightening of other

Costs/- Capital investments will rise due to the needassetsto comply with stricter environmental

environmental

regulations. The cost of complying with foodregulations

safety standards and other regulations will
increase as they are revised.

Changes in attitude

Medium to

to environment

long term

Revenue- Insufficient disclosure of environmental
initiatives and nonfinancial information willamong consumers

weaken consumer support and reduce revenue
due to weakening brand strength and loss ofcustomers.

Industries/markets

Changes in energy

Medium term

Costs

supply and demand- The cost of procuring energy from fossil fuels
will increase, as will the cost of producing
ingredients and other purchased goods. The
cost of deliveries made using gasoline-powered
vehicles (current vehicles) will also rise.
- A rise in demand for renewable energy
procurement will increase the cost of renewableenergy and the operating costs of equipment
switched to be compatible with renewableenergy.

Changes in

Medium to

reputation among

long term

Capitalinitiatives and nonfinancial information will

investors

Technologies- Insufficient disclosure of climate change
harm the corporate reputation among investors.

Production

Medium to

Costs/- Cost burdens will rise as the agriculture andinnovations inlong term

assetsfisheries industries introduce state-of-the-art

agriculture andequipment to transition to smart agriculture andfisheries

other decarbonization models.

―21―

(Physical risk)
Category

Time horizon

Area ofPotential business impact

financial

Extent of impact
1.5°C

4°C

Large

Large

Small

Large

Small

Large

Small

Large

MediumLarge

impactIncrease in severity

Short to longof extreme weather

term

Costs

- Torrential rains and typhoons will cause flood
damage in production areas, disrupting logistics
networks and making product procurement

Acute

impossible.
- Lower sales due to operational stoppages andrising repair costs for vehicle damage due totyphoons and other natural disasters- Stoppages in business activities due toflooding or other damage to business sites
Impact on

Long term

procurement andCosts/- Yield reductions attributable directly orrevenueindirectly to climate change will make itsupply systems

difficult to procure required quantities.
- Adjusting for the supply/demand balance will
become difficult, and increases in shortages andwaste disposal will be come a concern.
- High temperatures will reduce farming
efficiency and harvest yields.

Impact on quality

Long term

Costs/- Ensuring the quality set by the Group will

revenuebecome difficult.

Chronic- Ensuring quality, especially for frozen foods,
when delivering to customers, will become
difficult.
- Rising risks of heatstroke, food poisoning,and other hazards; lower sales due to damage to
reputation in such events
Impact on cost

Long term

Costs

structures- The cost of purchasing ingredients andmaterials will grow.
- Cost burdens will rise due to shortages ofhuman resources, operable equipment, etc.

Changes in overall

Long term

Revenue- The burden of adapting to climate change infood needs among

the lives consumers will increase, and foodconsumers

expenditures themselves will decline.

* The extent of the impact is stated to the extent that it can be calculated based on information available as of the end of the most recent
fiscal year.
* Quantitative assessments assume that the scale of our business operations will continue to expand through 2030, as it did in FY2023.

―22―

b. Responses to risks based on scenario analysis and opportunities arising from the responses
Category
Introduction of carbon taxes

Responses

Opportunities- Achievement of carbon- Costs can be reduced by proactively conserving

neutrality

energy.
- Carbon tax burdens will be reduced by achievingcarbon neutrality.

Tightening of plastic regulations- Further greening of product- Diﬀerentiation can be pursued by introducing new

packagingpackaging materials made from plastic alternatives,
ahead of others.

Introduction/tightening of other- Strengthening of food safety- Our superiority can be emphasized following theenvironmental regulations

standards

introduction of stricter carbon footprint disclosure- Curtailment of speciﬁed CFC

regulations, and ﬁnancial beneﬁts from subsidies

emissionsintroduced for other environmentally friendly
measures can be obtained.

Changes in attitude to- Promotion of sales of upcycled- Building and improving relationships with customers

environment among consumers

products

by accurately responding to their growing- Further greening of productenvironmental orientation and needs will not justpackagingstrengthen the brand and relationships with existingcustomers, but help attract new customers andenhance loyalty among existing customers.

Changes in energy supply and- Power savings- Cost burdens can be reduced through green delivery,

demand- Introduction of renewable

early deployment of energy-saving equipment, etc.

energy for electricity at oﬃces
and all logistics sites
Production innovations in- Strengthening of sustainable- The market for new foods can be stimulated byagriculture and ﬁsheries

retailpromoting the use and development of food tech,including the production of food ingredients with low
environmental impact.
- Diﬀerentiation can be pursued by establishinginnovative production and stable supply systems
encompassing frozen foods, processing, and edible
technologies, ahead of others.

Innovations in logistics and- Delivery by energy-eﬃcient- Automated driving, drone, and other technologies

deliveryvehicles and demonstration

can be deployed to establish a logistics and delivery

testing of EVs for delivery

system less susceptible to the eﬀects of climatechange and more convenient for customers, ahead ofothers.

―23―

Category

Responses

Opportunities

Increase in severity of extreme- Strengthening of sustainable- A diverse geographic portfolio of production areas

weather

retailwill ensure a stable supply of products, even if- Expansion of high-quality

localized harvests falter.

supply- Rising demand for emergency communication- Improved profitability throughservices for students

Impact on procurement andlow-cost operations and sharing- Traceability data can be effectively applied to makesupply systems

of marketing know-how

fine adjustments with respect to supply and demandconditions and ensure a stable supply.
- Assuming that harvesting possibilities will expand
both in Japan and overseas, the establishment ofcultivation and production methods that ensure stableproduction will be encouraged.

Impact on quality- New appeal points can be established by increasing
opportunities for using ingredients that do not meet
previous retail distribution standards (i.e., B-grade
products) and by persuading customers to appreciate
the value of such ingredients.

Changes in overall food needs- The need for foods that prevent heat stroke and canamong consumers

be stockpiled will rise.
- The need for food delivery itself will rise due to theincreasing diﬃculty of going out.

Specific initiatives for delivering solutions to society’s challenges in light of the risks described in the above scenario analysis andresulting opportunities, particularly those related to reducing food waste and plastics, include the following.
◆ Reducing food waste
1. Upstream: Efforts to reduce food waste at producers and manufacturers

Reductions in year ended March 2024

Economic value of reductions in year ended March 2024

506,654 kg

Approx. 414 million yen* Food waste purchase price 818 yen/kg (reference: 2017 survey by the City of Kyoto [http://www.sukkiri-kyoto.com/data])(i) Fuzoroi Radish (“irregular radishes”)
This initiative seeks to reduce food waste while supporting producers by selling a wide range of produce of nonstandard
shapes and sizes that would be considered unacceptable under usual retail practices. The goal is to pass along the abundanceof nature to future generations.
(ii) Upcycle by Oisix
This brand identifies solutions to food waste by developing and selling new upgraded products that add value to ingredientsthat have traditionally been discarded.
2. Midstream: Efforts to reduce food waste generated in the distribution process(i) Supply-demand matching
The Group keeps food waste in the distribution process to a low level of about 0.2%, lower than the food retail industry
benchmark, by applying proprietary algorithms to match accumulated data on customer preferences with the growing
conditions of crops, which depend on the weather. It has also adopted AI in its demand forecasting system, to improve ratesof short product supplies and inventory turnover by learning from information in areas such as customer behavior, buying
data, recipes, and sales promotion data to enable ordering at optimal volumes.
(ii) Operational improvements (Food Rescue Center)In addition to standard produce, the Group takes a flexible approach to processing non-standard ingredients, which it uses
in meal kits and processed foods. The results make it possible to purchase produce proactively and to procure large volumesof ingredients when harvests are strong for use in processed products.

―24―

3. Downstream: Efforts to reduce household food waste
Kit Oisix meal kits
These kits reduce food waste to one-third previous levels by delivering only the ingredients needed for meal preparation.
◆ Reducing use of plastic in product materials
The Group has cut plastic use by about one-half (compared to the year ended March 2022) by modifying product packaging andwrapping methods.
1. Promoting a switch to recycled and eco-friendly materials
The cardboard boxes used by Oisix in customer deliveries are made of 100% recycled paper. In addition, use of biomass
materials in Kit Oisix outer bagging helps reduce use of plastics derived from petroleum.
2. Reducing needless use of plastic
Oisix strives to reduce its use of plastic cushioning materials by introducing cardboard boxes whose heights are adjustable tofit the volume contained. Radish Boya is making steady progress on reducing use of plastic packaging through optimization
efforts (i.e., using thinner and lighter packaging).

(2) Indicators and targets
In 2020, the Group established its Green Shift measures to contribute to decarbonization and address associated risks andopportunities. As part of this process, it targeted carbon neutrality throughout the entire supply chain by March 2026. However,the January 2024 addition of SHiDAX and its subsidiaries as Group consolidated subsidiaries has greatly expanded theCompany’s business domains and will lead to revised targets and initiatives.
In light of these circumstances, the Group plans to develop new Groupwide measures and to disclose them when appropriate.
◆ Trends in greenhouse gas emissions
Emissions: total CO2 emissions [t-CO2e]
Intensity: total CO2 emissions intensity (per sales) [t-CO2e/million yen]
Item

Year ended March 2022

Year ended March 2023

Year ended March 2024

Emissions

Emissions

Emissions

Emissions

Emissions

intensity

Emissions

intensity

intensity

Scope 1 (*1)

2,468

–

1,224

–

1,131

–

Scope 2 (*2)

5,308

–

45

–

43

–

Total Company emissions

7,776

0.08

1,269

0.01

1,174

0.01

Scope 3 (*3)

287,705–

281,278–

302,831–

Total supply chain emissions

295,4812.86

282,5472.45

304,005

2.60(Scopes 1 and 2)(Scopes 1, 2, and 3)*1: Direct GHG emissions from the business itself (from burning fuel, industrial processes, etc.)*2: Indirect emissions associated with use of electricity, heat, and steam supplied by other companies*3: Indirect emissions other than those included in Scope 1 and Scope 2 (emissions from other companies related to the business’s
activities)* Calculation methods: Emissions calculated based on the GHG Protocol* Initial calculations applied the financial control standard for organizational boundaries in GHG calculations. The scope of
calculation was identified as Oisix ra daichi and three subsidiaries (Three Limes, Inc., Fruit Basket, and Tokushimaru).

―25―

2. Improving the internal environment and developing human resources to strengthen human capital<Basic policy on human resource strategies>
In addition to supporting employees in autonomous and ambitious efforts to identify solutions, the Group values internal discussion
and strives to build open workplaces in which each and every employee can work with a sense of vitality.
In the area of solutions in particular, the Group focuses on internal training for logical thinking. Under this program, in addition to
applying what they learn, trainees learn to teach the skills they have learned to others.
<Governance>
Since 2015, to link management strategies to human resource strategies, Director Hiroyuki Ozaki has served concurrently as theexecutive officer responsible for the HR section, overseeing activities from strategy formulation through execution. Important
strategic matters are proposed or reported to the Board of Directors and reflect the opinions of Outside Directors where appropriate.
<Strategies>
Under the Farm for Today, Table for Tomorrow corporate philosophy, we strive to realize a sustainable society by identifying
solutions to society’s food-related challenges, which requires increasing our internal human resources while welcoming in fromoutside the organization others with high capabilities.
The Company promotes the following three strategies in line with its vision: Create a place (company) where people can learn,
grow, and work with a sense of vitality.
1. Alongside efforts to pursue diversity and comfortable work from an employee perspective, fostering a culture of satisfying,rewarding work through the dissemination and internalization of the ORDism code of conduct
2. Training and securing the human resources needed to execute the medium-term business portfolio strategy
3. Developing active human resources to support autonomous employee career development and expand growth opportunities
1. Alongside efforts to pursue diversity and comfortable work from an employee perspective, fostering a culture of satisfying,rewarding work through the dissemination and internalization of the ORDism code of conduct(Disseminating and generating support for the management philosophy)
We carry out a wide range of initiatives to help disseminate and generate understanding of the Farm for Today, Table forTomorrow management philosophy. These include internal communications—for example, touching on the philosophy in video
messages from the Representative to the whole Company—as well as opportunities to hear from producers and customers
individually to impart a deeper sense of the meaning of our work and visits to production sites to experience agricultural work.
These efforts help disseminate and build support for the management philosophy and the ORDism code of conduct.
Efforts to ensure the widespread dissemination of the ORDism code of conduct and to realize the management philosophy include
awards presented to teams and individuals who have put the code into practice, as well as examples of the code embodied into
practices using video messages in addition to comments on the awards from the Representative, to help communicate ORDism.
(Internal environment improvements)
Efforts in the area of workstyles include workstyle support for employees returning from maternity leave. Other improvements
to achieve an environment in which employees can maintain and improve their performance, even for post-COVID hybrid
workstyles, include the adoption of group addresses, the introduction of web conferencing booths, and an increase in numbers ofspaces for concentrating on work. The Company will continue to make progress on developing comfortable working
environments while considering specific employee circumstances and backgrounds through improvements made at the head
office and other facilities and workspace reforms at the head office reflecting hiring activities.

―26―

2. Training and securing the human resources needed to execute the medium-term business portfolio strategy(HR development)
In the area of HR development, the Company is developing effective training programs to generate individual and team results
while incorporating on-the-job training for successor human resources to allow employees to apply what they learn in training.
Learning the lessons from issues that emerged during the relocation of a logistics facility in 2022, the Company holds annual
activities, including lectures and workshops, in which all employees are required to participate. In the consolidated fiscal year
under review, it held a lecture on “Thinking and Behavior That Are Prone to Failure,” in addition to workshops for reviewing
one’s own duties and considering practical measures. These are opportunities for personal growth involving implementing
countermeasures and taking on various challenges that will lead to business growth.
To train successor human resources in important sections, the state of successor candidates is assessed through growth support
meetings between Directors and individual sections. Based on the findings, solutions are considered in terms of will, skill, andmust; practical training plans are formulated, and measures to support growth both on and off the job are executed and managed
appropriately. As off-the-job opportunities, management programs, logical thinking programs, and self-learning programs forjob-specific skills are provided.
3. Developing active human resources to support autonomous employee career development and expand growth opportunities(Support for autonomous career development)
The Company’s unique self-career examination program was designed under the guidance of Prof. Emeritus Hanada of Keio
University, a Company Outside Director. It has been introduced in stages since January 2022. Starting in the year ended March
2024, it is provided by internal career consultants as a program in which employees of all ages can participate once every five
years.
i.

Numbers of career seminars held and participants (18 seminars with 114 participants in the year ended March 2024)

ii. Numbers of participants in career interviews (138 participants in the year ended March 2024)
Age-specific career seminars are held in a workshop format, followed by individual interviews. By raising awareness of career
autonomy, this helps improve employee engagement and contributes to Companywide earnings by allowing employees to workon new business opportunities and new services, with a specific vision for advancing employee careers on an individual level.
(Engagement surveys)
The Company uses engagement surveys for fixed-point observations of its working conditions in order to develop highly
enthusiastic human resources through the strictly systematic WILL training program. The Company’s approach seeks to achievea state in which team organizational issues can be identified and resolved through quantitative, regular visualization of the statesof individual and team engagement.
i.

Engagement survey results (HRBrain, Inc., year ended March 2024; average score 67.5)<Risk management>
Risks related to human capital are managed through the activities of the Risk Management Committee.
See “(1) Governance and risk management related to overall sustainability” regarding the activities of the Risk Management
Committee.
<Other indicators>
See the Sustainability page on the Group website.

―27―

3. Community building(1) Basic policy and examples of initiatives
1. Leisure-time creation
Product development
Oisix, the main brand in the BtoC Subscription Business, offers the Kit Oisix series of meal kits that combine the recipes andingredients needed to prepare a main and side dish set in 20 minutes. Kit Oisix meal kits deliver value through time savings inaddition to delicious, complete meals and free consumers from the hassles of shopping and the need to think of a menu, helping
to free-up more time in their busy lives.
This service, which marked the 10th anniversary of its introduction in July 2023, is developing a wide-ranging product lineup
in response to changing lifestyles, including increasing numbers of households in which both spouses work and less time isspent at home post-COVID.
2. Responding to the labor shortage
Commercial Meal Kits
To support the development of an environment in which childcare facilities can interact more directly with children whilesaving labor in light of the nationwide shortage of childcare workers, these meal kits for facility meal services use preprocessed ingredients, greatly reducing the time required to prepare handmade meals.
These handmade meal kits are a new type of meal for childcare facility food services developed by drawing on Oisix’s expertise.
They make it possible to free-up even more time for dining assistance and nutritional education by reducing staff workloads.
Comprehensive administrative services under contract
To achieve less costly and more sophisticated suites of administrative services drawing on the expertise of the private sector,
this solution aims at large-scale promotion of operational efficiency improvements under comprehensive contracts for multiple
functions from local governments facing lower tax revenues and shortages of personnel to operate services due to low birthrates and aging and shrinking populations.
By streamlining staffing through operational analysis, centralization, and multitasking, with the Company outsourcing some
services to external firms while managing them comprehensively, this solution supports the realization of always-available
administrative services to support local communities facing limited resources.
3. Social infrastructure development
Tokushimaru
Due to the progressive ageing of the nation’s population, Japan is increasingly facing the social challenges of food deserts andlimited access to shopping.
In response, Tokushimaru uses lightweight trucks to operate mobile supermarkets that pull up in front of consumers’ front
doors for in-person shopping experiences that offer the joy of looking over, touching, feeling, and choosing from themerchandise. The number of mobile supermarkets operating in prefectures across Japan is currently about 1,200 vehicles. They
are becoming an increasingly important presence as a part of the shopping infrastructure for each locale.
Tokushimaru also concludes patrol agreements with local governments (such as prefectures, municipalities, and wards) aroundthe country to facilitate cooperation with social welfare councils, regional comprehensive support centers, care mangers,
district welfare commissioners, and others in providing continuous patrol services while doing business. These help to support
safety and peace of mind especially in rural communities where ageing of the population is quite advanced.
WeSupport Family
This food support project for impoverished households, centered on single-parent homes, is operated by the Company incooperation with RCF and COCONET Inc. It provides food support to households in need by matching supporting businesses
that donate foods with various organizations that aid impoverished households, delivering the food through their food pantries
and other activities. As of March 2024, it delivered food monthly to approximately 25,000 households, centered on the greater
Tokyo area, with the support of about 60 companies.

―28―

Community Buses
In response to the growing issue of areas underserved by public transport due to discontinued bus services and other factors,
Community Buses use private sector expertise to support regional public transport as the legs of the community.
As a supporting pillar of community transport infrastructure, this program proposes and helps realize new, sustainable transport
infrastructure even in the face of decreasing demand for public transport due to depopulation.

―29―

3. Business and other risks
Outlined below are some risks related to the business conditions, accounting conditions, and other matters described in the Annual
Securities Report that may significantly impact investor decisions.
Forward-looking statements in the text are based on the Group’s judgments as of the date of submitting the Report.

(1) Risks related to business strategy
Risks

Details and impacts on the Group

Responses

Business models,In the BtoC Subscription Business, amid growing

The Group expects continued growth in e-commercecompetitiveenvironmental and health orientations among customers,

food markets and markets for the high-value-added

environment

the Group makes it easier to obtain high-value-added

foods the Company offers, driven by continued

products such as organic and other specially cultivatedenvironmental and health orientations in customers.

produce and processed foods, with an approach that

In addition, it believes that the business environment

emphasizes safety, through highly convenient services

will provide numerous opportunities as a result of

based on e-commerce.

factors such as increasing use of alliances in the

It regards online supermarkets and food delivery byfacility food service business and accelerating

regional consumer cooperatives, as well as the delivery

outsourcing of services from the public to the privateof frozen ready-to-eat meals and similar services, assector.

businesses closely related to the e-commerce food

The Company will strive to differentiate itself frommarket. This poses the risk that a tightening focus of

the competition by proposing new value, such as

related businesses on the sale of food products may leadunique products and experiences that can be enjoyed

to more intense competition in the food segment of the

only from its services, as it quickly ascertains

e-commerce market.

potential needs in response to the differing challenges

The BtoB Subscription Business handles food services

facing individual customers and swiftly deploys

and management for corporate dining halls, public

products and services to meet them.

offices, schools, nursery schools, and other facilities, aswell as inpatient food services at hospitals and foodservices at elderly care facilities under contract.
Competition among major players is intensifying in thefacility food service industry; price competition may
lead to lower contract prices.
The Vehicle Operation Services Business handles
vehicle operation and management outsourced byprivate sector companies and local governments. The
Social Services Business provides food services forkindergartens and elementary and middle schools undercontract to local governments, manages and operates
after-school care, libraries, children’s centers, and otherfacilities, and provides various services outsourced byprivate sector companies.
As progressively lower birth rates and aging of the
population lead to lower tax revenues for local
governments and growing pressure to cut costs at private
sector firms, highly efficient organizational operations
are becoming increasingly necessary.
One risk is that the Group’s businesses and businessperformance may be affected if it were unable to adapt
appropriately to such an environment.

―30―

RisksAccidents

Details and impacts on the Group

Responses

In the BtoC Subscription Business and the BtoB

To prevent any serious incidents, the Group strives to

Subscription Business, the Group provides foodcomply with laws and regulations on safety as well as

ingredient and meal services. One risk is that issues such

the Group’s own internal regulations, standards,

as a food-poisoning, contamination, or food-allergy

manuals, and other rules. It also carries out regularincidents rooted in the Group’s sanitation management

internal auditing to ascertain the state of businessor other responsibilities may lead to consequences suchoperations.

as temporary suspension of operations at production
facilities or liability for compensation for damages.
In the Vehicle Operation Services Business, the Groupmanages vehicle operation services under contract toclients. One risk is that a serious traffic accident or otherincident may result in liability for compensation fordamages.
In the Social Services Business, the Group operates andmanages public facilities under contract. One risk is thata serious accident or other incident in facility operations
may result in liability for compensation for damages or
an order from the local government or other agency withjurisdiction to suspend business operations.
Another potential risk is that any such incidents may
damage trust in and the reputation of the Group andimpacttheGroup’sbusinesses

andbusiness

performance as a result.

―31―

(2) Risks related to climate change
Risks

Details and impacts on the Group

Responses

Large-scale storm

Since the Group handles products from primary

By engaging in transactions with producers acrossand flood damage

industries such as agriculture, fisheries, and livestock,

Japan and by maintaining the capacity to procure key

there is a risk that its businesses and businessproducts from multiple producing regions in

performance may be impacted by issues such as

principle, the Group has adopted a structure undershortages and lower quality due to storm or flood

which it can supply products from other producing

damage in producing regions, such as the effects ofregions in the event that inclement weather in alarge-scale typhoons or torrential downpours. Anotherspecific region results in poor harvests or lower

risk is that such large-scale storm or flood damage may

quality products in that region.

affect product distribution or logistics, impeding
shipments or deliveries and thereby affecting theGroup’s businesses and business performance.
Reducing

Amid global efforts to restrict greenhouse gas emissions

In 2020, the Group introduced its Green Shiftgreenhouse gas

and reduce food waste, delays in the Group’s response

strategy,

emissions andmay damage trust in and the societal standing of thegreenhouse gas emissions across the entire supply

food waste

Group.

chain, including farms, processing plants, andAnother risk is that the increasing frequency of extreme

logistics facilities, and in last-mile deliveries.

weather events associated with climate change may

The Group is also pursuing measures to reduce foodaffect the supply of fruits, vegetables, and otherwaste, including making active use of nonstandard

products.

produce and boosting household food waste

wherebyitpromotes

reductions

in

reduction efforts through its sales of meal kits.

(3) Supply chain risks
Risks

Details and impacts on the Group

Responses

Raw materialGroup products may provide false or misleading

Reflecting considerations such as added value andquality

information concerning quality or use of agricultural

target customers, each Group brand differs withchemicals due to mislabeling by producers. In addition,

regard to specific standards. Nevertheless, the Groupa general consensus on the safety of radioactive

has established its own standards on product handling

contamination of foods has yet to be reached within

across major brands. To the extent possible, Groupsociety, and the Group may prove unable to immediately

produce is grown without use of pesticides oradapt to future laws or regulations concerning suchchemical fertilizers, while processed food products

matters.

are made using as few additives as possible. It also

In such cases, the Group’s businesses and businesscarries out production site inspections and testing for

performance may be affected by damage to brand image,residual agricultural chemicals for produce and has

loss of trust, or other factors resulting from potential

established its own testing systems for processedadministrative guidance or sanctions issued or claims or

foods and other products, drawing on outside experts,

demands for compensation from customers.

independent agencies, and other partners. Other
efforts to ensure reasonable and objective quality andsafety levels include guiding supplier manufacturers
concerning hygiene management.

―32―

Risks

Details and impacts on the Group

Responses

Concentration of

The Group operates its own logistics centers, where

The Group plans to continue shipments to customers

logistics facilities

distribution processes such as product inspections,to the extent possible in the event of an emergency bystorage, sorting, and packing are centralized. Products

adjusting delivery operations to use those of the six

are shipped to customers mainly from the following

facilities nationwide that remain operable.

logistics facilities: those in the cities of Ebina andAtsugi, Kanagawa Prefecture, for e-commerce brands;
the logistics center in Narashino, Chiba Prefecture for
Daichi wo Mamoru kai; and four facilities nationwide
for the Radish Boya brand.
There are risks of loss of inventory, delayed shipments,
service interruptions, or other occurrences that could
impacttheGroup’sbusinesses

andbusiness

performance in cases such as the inability to use these
logistics centers due to natural disasters, fires, or otherincidents or resulting effects on employee attendance.
Transaction

In e-commerce brands, which account for more thanThe Group strives to maintain positive relations withrelations with

50% of the net sales of the Group’s main segment, thethe Yamato Group through activities such as joint

Yamato Transport

BtoC Subscription Business, products are delivered toprojects not just for last-mile delivery, but

in logistics

customers

procurement logistics.

operations

businesses and business performance may be affected by

via Yamato

Transport.

The

Group’sfactors such as significant in increase in shipping
charges or reduction in business relationships with the
Yamato Group in light of the recent situation in thelogistics industry.
Governance

The Group pursues business in cooperation withThrough close communication and cooperation withthroughout thenumerousfromsuppliers in its supply chain, the Group works to

supply chain

procurement through logistics and last-mile delivery.

monitor security systems and identify risks and to

The Group’s businesses and business performance may

avoid and mitigate such risks. It also strives to avoid

be affected by governance violations such as increases

risks

in on-the-job accidents due to working environments,

cancellation provisions in contracts.

partners

inprocesses

ranging

throughinsuranceanddisclaimersorviolations of human rights, or concealment of
improprieties at any point along this supply chain.

(4) Information security risks
Risks
System failure

Details and impacts on the Group

Responses

The Group’s food delivery business operations depend

In its business management systems, the Groupin large part on business management computer systems

employs backup systems and data and otherfor operations ranging from website administration

redundancy measures, and implement and manage

through the receipt and placement of orders, purchasing,firewalls, virus checks, and other measures to avoid

inventory, shipping, and sales. The Group’s businesses

external attacks.

and business performance may be affected in the eventof failures or other issues affecting Group computer
systems due to factors such as greater than expectedvolumes of orders received or other sudden increase inaccess or infection by computer viruses, deliberateaction of sabotage, or bugs in related applications.

―33―

Risks

Details and impacts on the Group

Responses

Handling ofIn selling products through e-commerce and otherAs part of its efforts related to personal information,

personalmeans, the Group receives names, addresses, and other

the Group earned Information Security Management

information

information from customers and retains large volumes

System (ISMS)* certification in 2018. It alsoof personal information. Accordingly, the Group

encrypts data, employs strict access controls, andqualifies as a business operator handling personalundergoes regular system diagnostics by an outside

information under the Act on the Protection of Personalagency. Other efforts include establishment ofInformation.

information

The Group’s businesses and business performance may

education and training for program developers, andbe affected by the obligation to provide compensation

thorough in-house training for all employees.

for damages or by the damage to reputation resulting* ISMS: A system for managing the security offrom an external leak of personal information

information assets in the organization

management

rules

and

manuals,

concerning the Group’s customers or other parties.
Responding to

The e-commerce and Internet industries in which the

The Group strives to proactively make advances bytechnologicalGroup engages in business experience continuous

modifying its service models or introducing new

innovation

technological innovations and the introduction of newfeatures in businesses in connection with suchservices. The

technological innovations and other developments.

Group’sbusinesses

andbusiness

performance may be affected by delays in its response totechnological innovations and other developments,
unforeseen increases in investments or costs related tocomputer systems, and other technological matters.

(5) Human resource risks
Risks

Details and impacts on the Groupand

Representative

Director

Responses

Management

President

Kohey

To build a management structure that is not overly

human resources

Takashima, who played a central role in the Group’s

dependent on Mr. Takashima, the Group is promoting

founding and leads its business operations, plays anefforts such as delegating authority to other Directors

important role in Group business activities overall,and employees.

including in management policies and strategies. The
Group is highly dependent on him as an individual.
The Group’s businesses and business performance may
be affected if the performance of his duties wereimpeded for any reason.
Securing andAs the Group’s market grows and competition

Recognizing the need to secure and develop capabledeveloping

intensifies, the struggle to secure human resources will

human resources as its businesses grow rapidly, thehuman resources

intensify, possibly leading to developments such as anGroup strives to train and secure human resources

outflow of human resources from the Group orinternally as well as hire human resources from

impediments to securing human resources. In addition,

outside the organization. In addition, operations suchrapid growth in volumes of business due to factors suchas shipping at logistics centers and customer service

as future sharp increases in orders received may lead toto handle customer inquiries and other customer

reduced efficiency as the result of personnel shortages inneeds involve labor intensive aspects. These lead toshipping, customer service, and other operations. The

the need to assign large numbers of human resourcesGroup’s businesses and business performance may beefficiently at all times. Accordingly, the Group strives

affected in such event.

to ensure appropriate hiring and training of suchhuman resources.

―34―

(6) Legal and other risks
Risks

Details and impacts on the Group

Responses

Major laws and

The Group is required to comply with numerous laws

To avoid such risks, the Group has establishedregulations

and regulations, chiefly the Food Sanitation Act, the Act

various rules and guidelines, including ethics rules,

on Promotion of Recycling and Related Activities forto maintain a compliance promotion structure and toTreatment of Cyclical Food Resources, the Building

educate and raise awareness among officers andStandards Act, the Fire Service Act, the Copyright Act,

employees. It also has established the Corporate

the Ordinance on Outdoor Advertisement, the Road

Ethics Hotline as an internal whistleblowing program

Traffic Act,thefor compliance violations recognized by officers or

Antimonopoly Act, the Act on Securing the Proper

employees and carries out investigations andOperation of Worker Dispatching Businesses andcorrective measures based on the details of reports

Protecting Dispatched Workers, the Construction

received through the hotline, as necessary.

theRoad Transportation Act,

Business Act, and the City Planning Act. The Group’sbusinesses and business performance may be affected by
restrictions or the suspension of business activities if it
is unable to comply with these laws or regulations.

―35―

4. Management’s analysis of financial standing, business results, and cash flows(1) Overview of business results, etc.
Summarized below are the Group’s financial standing, business results, and cash flows (“business results, etc.” hereinafter) for the
consolidated fiscal year under review.
(i) Financial standing and business results
Economic activity in Japan during the fiscal year under review moved steadily toward normalization. Clear signs emerged ofrecovery in consumer consumption, likely due to various policy initiatives and improving employment and income conditions.
Nevertheless, fiscal tightening worldwide, geopolitical instability, and other factors leave market conditions difficult to predict.
In the food delivery sector to which our BtoC subscription business (our core business) belongs, the trend to reduce cooking
times has emerged as a mainstay demand, due in part to lifestyle changes that emerged in response to COVID-19. Alongsideeconomic normalization, consumer demands for food delivery services have diversified, and now include greater variety andeasier preparation.
In this environment, as a food infrastructure company, Oisix ra daichi has worked to ensure stability in shipment capacity andthroughout its product supply chains. In addition, with significant change in the role of and customs associated with food inhouseholds, we plan to quickly target latent consumer demand and propose products and services that satisfy consumers. To
achieve our goal of strengthening the growth and profitability of the BtoC subscription business, a key aspect of our management
strategy, we are implementing initiatives to evolve the customer experience and lower operational costs. We are drawing on
expertise cultivated in our domestic (Japanese) food delivery business and promoting joint efforts with SHiDAXCORPORATION, a subsidiary since January 2024, to expand our domestic (Japanese) BtoB subscription business, including
food ingredient deliveries to nursery schools and other similar facilities. We are also seeking to boost efforts to minimize foodwaste and greenhouse gas emissions as part of efforts to become a more sustainable retailer.
The Group’s resulting financial standing and business results for the consolidated fiscal year under review are presented in brief
below.
a. Financial standing
Total assets at the end of the consolidated fiscal year under review were up 79,226 million yen from the end of the previous
consolidated fiscal year to 143,728 million yen. Total liabilities were up 67,945 million yen from the end of the previous
consolidated fiscal year to 106,307 million yen. Net assets were up 11,280 million yen from the end of the previous
consolidated fiscal year to 37,420 million yen.
b. Business results
Business results for the consolidated fiscal year under review showed net sales of 148,408 million yen (up 28.9% YoY),
operating profit of 5,144 million yen (up 53.7% YoY), ordinary profit of 4,438 million yen (up 57.9% YoY), and profit
attributable to owners of the parent of 4,120 million yen (up 128.0% YoY).
In conjunction with SHiDAX Corporation made a consolidated subsidiary in January 2024, the Company has reorganized its
business segments. Segment information will thus be disclosed in Five segments of “BtoC Subscription Business,” “BtoB
Subscription Business,” “Social Services Business,” “Vehicle Operation Services Business” and “Other Businesses.”Presented below are business results by business segment:
The BtoC Subscription Business recorded net sales of 99,383 million yen (up 0.9% YoY) and segment profit of 8,765 million
yen (up 27.2% YoY).
The BtoB Subscription Business recorded net sales of 14,976 million yen (vs. 1,293 million yen in the previous year) andsegment profit of 323 million yen (vs. a loss of 6 million yen in the previous year).
The Social Services Business recorded net sales of 11,383 million yen (-% YoY) and segment profit of 338 million yen (-%
YoY).

―36―

The Vehicle Operation Services Business recorded net sales of 6,229 million yen (-% YoY) and segment profit of 304 million
yen (-% YoY).
Other Businesses recorded net sales of 18,027 million yen (up 8.2% YoY) and segment profit of 1,217 million yen (up 48.8%
YoY).
(ii) Cash flows
In the consolidated fiscal year under review, cash flows from operating activities were 7,722 million yen; cash flows used ininvesting activities were 10,815 million yen; and cash flows from financing activities were 17,735 million yen. As a result of
these and other factors, cash and cash equivalents (“funds” hereinafter) increased by 14,720 million yen to a year-end balance of
29,440 million yen.
(iii) Production, orders received, and salesa. Production
While the Group engages in production activities, disclosure thereof is omitted due to their negligible materiality comparedto the Group’s businesses as a whole.
b. Orders received
Disclosure of orders received is omitted because the period from purchase through sale of products is extremely short in theGroup’s main businesses.
c. Sales performance
Shown below is the sales performance by business segment for the consolidated fiscal year under review.

Segment

Consolidated fiscal year under review(April 1, 2023 – March 31, 2024)

YoY (%)

BtoC Subscription (million yen)

99,383+0.9

BtoB Subscription (million yen)

14,976+1,057.5

Social Services (million yen)

11,383–

Vehicle Operation Services (million yen)

6,229

–

Other (million yen)

18,027+8.2

Adjustments (million yen)

(1,592)+28.6

148,408+28.9

Total (million yen)
Notes:
1.

Transactions between business segments are not eliminated by offsetting. Rather, they are indicated above as adjustment
amounts.

2.

The amounts above exclude consumption tax, etc.

3.

The “Other” segment above includes the businesses of e-commerce support for other firms, mobile supermarkets, and Web
system development.

4.

A major change was recorded in sales results during the consolidated fiscal year under review, due mainly to the addition of
SHIDA Holdings Corporation (now SHiDAX Holdings Corporation), SHiDAX Corporation, and their 14 subsidiaries as
consolidated subsidiaries.

(2) Details of analysis and consideration of the state of business results, etc. from the management perspective
Shown below are details of recognition, analysis, and consideration of the state of the Group’s business results, etc. from the
management perspective.

―37―

(i) Details of analysis and consideration of financial standing and the state of business results
Based on the management strategies described above, the Group sought (i) to grow the BtoC Subscription Business and enhanceearning capabilities, and (ii) to expand its business domains for discontinuous growth.
Business growth in the BtoC Subscription Business centers on the three major domestic brands. The Group executed strategies
in line with the business phase of each brand while making progress on providing products and services in line with evolving
customer needs after a considerably long period of COVID-19 restrictions. To enhance earnings capabilities, the Group
implemented multiple measures, including efforts to cut product costs such as by bringing processes in house and improving Kit
Oisix manufacturing efficiency, and measures to cut costs in logistics through consolidation and efficiency improvements in ecommerce logistics centers.
To expand business domains for discontinuous growth, the Group added SHiDAX Corporation as a subsidiary in January 2024.
It also added to and revised its business segments. The new business segments are the BtoB Subscription Business, the Social
Services Business, and the Vehicle Operation Services Business.
In the BtoB Subscription Business, which provides food services for nursery schools, in addition to Suku-suku Oisix, for which
service provision began in 2015, the Group has grown its business domains through cooperation with SHiDAX Corporation,
which provides food services for hospitals and elderly care facilities, in addition to nursery schools.
The Group will continue to identify and respond swiftly to potential needs in response to the dramatically changing home dining
environment and to enhance its proposals of new food value, including unique products and dining experiences available only
through its services.
a. Financial standing and business results
1) Financial standing(Assets)
At the end of the consolidated fiscal year under review, total assets stood at 143,728 million yen, up 79,226 million yen
from 64,502 million yen at the end of the previous consolidated fiscal year.
Current assets stood at 61,728 million yen, up 31,048 million yen from 30,680 million yen at the end of the previous
consolidated fiscal year. These changes were due mainly to increases of 14,874 million yen in cash and deposits,
15,252 million yen in accounts receivable – trade, 636 million yen in merchandise and finished goods, and 995 million yen
in raw materials and supplies, a decrease of 1,593 million yen in accounts receivable – other, and an increase of 827 million
yen in other current assets.
Non-current assets stood at 82,000 million yen, up 48,178 million yen from 33,821 million yen at the end of the previous
consolidated fiscal year. This was due to increases of 10,001 million yen and 39,921 million yen, respectively, in property,
plant and equipment and intangible assets and a decrease of 1,744 million yen in investments and other assets. The maincauses of the increase in intangible assets were increases of 25,655 million yen in customer-related assets and 13,603 million
yen in goodwill associated with the acquisition of stock in SHIDA Holdings Corporation (now SHiDAX Holdings
Corporation).
(Total liabilities)
Total liabilities in the end of the consolidated fiscal year under review stood at 106,307 million yen, up 67,945 million yen
from 38,361 million yen at the end of the previous consolidated fiscal year.
Current liabilities stood at 62,875 million yen, up 36,643 million yen from 26,231 million yen at the end of the previous
consolidated fiscal year. This was due mainly to increases of 4,850 million yen in accounts payable – trade, 10,024 million
yen in accounts payable – other, 2,393 million yen in income taxes payable, 4,984 million yen in short-term borrowings,
2,139 million yen in the current portion of long-term borrowings, 108 million yen in contract liabilities, 1,552 million yen
in provision for bonuses, and 2,136 million yen in other current liabilities.
Non-current liabilities stood at 43,432 million yen, up 31,302 million yen from 12,130 million yen at the end of the previous
consolidated fiscal year. This was due mainly to an increase of 14,573 million yen in long-term borrowings, a decrease of
7,305 million yen in (non-current) lease liabilities, and increases of 8,889 million yen in deferred tax liabilities and
146 million yen in other non-current liabilities.
(Total net assets)
Total net assets at the end of the consolidated fiscal year under review stood at 37,420 million yen, up 11,280 million yen
from 26,140 million yen at the end of the previous consolidated fiscal year. This was due mainly to increases of 256 million
yen in the foreign currency translation adjustment account and 6,770 million yen in non-controlling interests, along with therecording of 4,120 million yen in profit attributable to owners of the parent.

―38―2) Business results(Net sales)
Net sales for the consolidated fiscal year under review were up 28.9% from the previous consolidated fiscal year to148,408 million yen, due to factors including the effects of adding SHiDAX Corporation and its subsidiaries and othercompanies as consolidated subsidiaries in the fourth quarter.
(Cost of sales)
Cost of sales for the consolidated fiscal year under review was up 44.9% from the previous consolidated fiscal year to86,542 million yen, due to factors including increased purchases of merchandise accompanying growth in sales.
(Selling, general and administrative expenses)
Selling, general and administrative expenses for the consolidated fiscal year under review were up 8.9% from the previous
consolidated fiscal year to 56,721 million yen, due to factors including salaries and allowances and the recording of provision
for bonuses.
(Profit attributable to owners of parent)
Profit attributable to owners of the parent for the consolidated fiscal year under review was up 128.0% from the previous
consolidated fiscal year to 4,120 million yen, due to factors including the recording of gain on step acquisitions, Directors’
retirement benefits, and impairment loss resulting from the series of transactions associated with making SHiDAX
Corporation a consolidated subsidiary.
b. Business results by business segment
The BtoC Subscription Business responds to customer orders received via e-commerce channels and catalogs. It provides fooddelivery services for high-value-added food (fruits and vegetables, processed food items, and meal kits) that generate low
environmental loads, produced according to our unique cultivation/production standards. It also provides daily commodities
and miscellaneous products.
Oisix, our primary brand, emphasizes a focus on dual-income, child-raising households. It seeks to provide products andservices that achieve premium time savings. Daichi wo Mamoru kai focuses on the senior two-person household consumer
segment. We are developing and refining new services in accordance with the needs of these customer segments, based on theeasy, healthy dietary lifestyle concept. Our Radish Boya food delivery business offers products primarily to households seeking
to contribute to society through a certain approach to daily activities like meal preparation. We are developing products andservices like Fuzoroi Radish (Irregular Radish) and promoting development of services that will offer new value. Purple Carrot
specializes in plant-based meal kits with a special focus on consumers eager to achieve healthy lifestyles through food. It
provides products and services that can realize plant-based time saving.
Oisix, Daichi wo Mamoru kai, and Radish Boya are currently deployed in Japan. Purple Carrot is deployed in the US.
As customer lifestyles diversify in the post-Covid environment, each brand promotes various measures for diversifying
approaches and service provision methods, etc. to different customers, focusing on finding business growth opportunities. The
total net sales marked a year on year increase, due partly to growth in numbers of Oisix subscribers at the start of the fiscal
year, despite lower income for Daichi wo Mamoru kai Radish Boya, and Purple Carrot.
Segment income grew from the preceding fiscal year due to efforts to cut fixed costs at each business and higher net sales for
Oisix.
As a result of the above factors, net sales totaled 99,383 million yen (up 0.9% YoY) and segment profit was 8,765 million yen(up 27.2% YoY).
The BtoB Subscription Business undertakes cafeteria food services and related management at companies, public offices, andnursery schools, as well as outsourced food providing/management services for hospitals and facilities for the elderly. It also
provides food ingredients to the food service industry.
Net sales have grown from the figures achieved in the previous year by SHiDAX Corporation. Key factors included recovery
in numbers of meals served at existing outlets for offices, plants, and facilities for the elderly, all of which suffered significant
declines under Covid, and steady growth in operating outlets. Meal kits focusing on nursery schools have experienced sales
growth due to enhancements, driven by steady growth in numbers of customer nursery schools.

―39―Segment income before the amortization of the intangible fixed assets and goodwill associated with the acquisition of
SHiDAX Corporation as a subsidiary declined from the previous year due to results generated by SHiDAX Corporation, as
cost rates deteriorate due to increasing raw material/labor costs.
As a result, net sales were 14,976 million yen (vs. 1,293 million yen in the previous year), while segment profit was 323
million yen (vs. a loss of 6 million yen in the previous year).
The Social Services Business manages and operates public school lunch services, after-school childcare clubs, children’scenters, libraries, Michino-Eki (roadside stations), and other services outsourced by local governments and private companies.
Net sales grew from the previous year due to results generated by SHiDAX Corporation based on diligent proposal activities
seeking to capture outsourcing needs generated by the shift from public services to the private sector. In turn, this trend isdriven by manpower shortages amid declining birthrates and the increasingly aging population, as well as overall cost
increases. For after-school childcare services in particular, the number of contracts has steadily increased as a result ofproviding services catering to increasingly diversifying childcare needs as well as growth in the number of operating outlets
for other needs.
Segment income before the amortization of the intangible fixed assets and goodwill associated with the acquisition of
SHiDAX Corporation as a subsidiary increased from the previous year due to results generated by SHiDAX Corporation,
despite labor cost increases.
Net sales totaled 11,383 million yen (–% YoY) and segment profit was 338 million yen (–% YoY).
The Vehicle Operation Services Business engages in vehicle management operations outsourced by private companies andlocal governments.
Net sales increased from the previous year due to results generated by SHiDAX Corporation. Contributing factors included
continuing growth in orders for corporate executive vehicles, enhanced by web promotion efforts, and enhanced proposal
activities to capture expanding local transportation needs, including the need for more school buses following the eliminationand consolidation of local schools.
Segment income before the amortization of the intangible fixed assets and goodwill associated with the acquisition of
SHiDAX Corporation as a subsidiary increased from the previous year due to increased revenue generated by SHiDAX
Corporation. This was despite higher fuel unit prices.
As a result, net sales totaled 6,229 million yen (–% YoY), while segment profit was 304 million yen (–% YoY).
Other Businesses include e-commerce support business for other companies, the Tokushimaru (supermarket on wheels)business, and the web-based systems development business.
Subscribers in our Solutions Business, including e-commerce support for other companies (ISETAN DOOR, etc.) increased
as food delivery services took firmer root. As a result, both net sales and segment income increased overall.
As a result, net sales were up sharply (by 8.2% YoY) to 18,027 million yen. Segment profit also increased to 1,217 million
yen (up 48.8% YoY).
(ii) Details of analysis and consideration of cash flows and information on sources of capital and liquidity of funds
a. Cash flows
The balance of cash and cash equivalents at the end of the consolidated fiscal year under review was up 14,720 million yen
from the previous consolidated fiscal year to 29,440 million yen.
Shown below is the status of each type of cash flow for the consolidated fiscal year under review, and main contributing
factors.
(Cash flow from operating activities)
Funds from operating activities totaled 7,722 million yen (up 45.5% YoY). This was due mainly to profit before income taxesof 6,416 million yen, depreciation of 2,614 million yen, amortization of goodwill of 495 million yen, a decrease in accounts
payable – other of 1,079 million yen, a decrease in accounts receivable – other of 1,626 million yen, recording of gain on step―40―

acquisitions of 3,447 million yen, and income taxes paid of 1,358 million yen.
(Cash flow used in investing activities)
Funds used in investing activities totaled 10,815 million yen (down 10.9% YoY). This was due mainly to expenditures of
7,217 million yen in purchase of shares of subsidiaries resulting in change in scope of consolidation, 1,623 million yen inpurchase of property, plant and equipment, 1,159 million yen in purchase of intangible assets, and 997 million yen in purchaseof investment securities.
(Cash flow from financing activities)
Funds from financing activities totaled 17,735 million yen (up 114.6% YoY). This was due mainly to 16,201 million yen inproceeds from long-term borrowings, 4,984 million yen in proceeds from the net increase (decrease) in short-term borrowings,
expenditures of 2,276 million yen on repayments of long-term borrowings, and expenditures of 832 million yen on repaymentsof finance lease liabilities.
b. Sources of capital and liquidity of funds
1) Financial policies
At this time, the Group raises working capital from funds on hand (internal reserves from profit, etc.) and short-termborrowings under current account overdraft agreements. Based on capital investment plans, it considers raising funds forinvestment through long-term borrowings should funds on hand prove insufficient. Should the need for sustained capital
investments or large-scale projects emerge, it also considers raising funds through other means, including capital increases
through public offerings, to enhance its long-term financial foundations.
2) Demand for funds
The primary demand for working capital in the Group’s business activities emerges from operating expenses such aspurchase of merchandise, packing and shipping costs for delivering products to customers, and marketing expenses forsecuring new customers. Major sources of demand for funds for capital investment include investments in new and expanded
equipment at logistics centers and at other facilities and investments in software development for purposes such as sales
management systems.
(iii) Significant accounting estimates and assumptions underlying such estimates
The Group’s consolidated financial statements are prepared based on the accounting principles generally accepted in Japan. Their
preparation requires estimates that may affect management’s selection and application of accounting policies, as well as reported
figures on assets, liabilities, revenues, and expenses. Management makes reasonable estimates with consideration for matterssuch as past results. However, actual results may differ from these estimates due to their inherent uncertainty.
The important accounting policies of the Company and its consolidated subsidiaries are described under “Part 5. Accounting: 1.
Consolidated financial statements, etc.: (1) Notes to the consolidated financial statements (Important matters serving as bases forthe preparation of the consolidated financial statements).” Significant accounting estimates and assumptions underlying such
estimates are described under “Part 5. Accounting: 1. Consolidated financial statements, etc.: (1) Notes to the consolidated
financial statements (Significant accounting estimates).”―41―

5. Important business contracts, etc.
(1) Conclusion of takeover bid agreement, transaction agreement, and agreement among shareholders with regard to stock in SHiDAX
Corporation
In its meeting held November 10, 2023, the Company Board of Directors resolved to conclude an agreement on the acceptance, forall shares of common stock issued by the Company’s equity-method affiliate SHiDAX Corporation (“SHiDAX stock” hereinafter)
held by the Company, of a takeover bid implemented as part of a management buyout by SHIDA Holdings Corporation (now SHiDAX
Holdings Corporation) (“SHIDA Holdings” hereinafter). The agreement was concluded on the same date.
In addition, in the same meeting, the Board of Directors resolved to conclude (i) a transaction agreement with SHIDA Holdings,
Tsutomu Shida, and Kinichi Shida on this takeover bid and the series of subsequent transactions, with the goal of taking SHiDAX
private; and (ii) an agreement among shareholders with Kinichi Shida, Tsutomu Shida, Shojiro Shida, Tomiji Shida, Miyuki Shida,
Yuma Shida, Arisa Nagaki, Emiri Shida, and SDI Corporation. These agreements were concluded on the same date.
Agreement summary
Agreement title
Takeover bid

Date concluded
November 10, 2023

agreement

Parties to agreement

Main details of agreement

The Company

Agreement on the prompt acceptance of the

SHIDA Holdings

takeover bid for all shares of SHiDAX stock
held by the Company in the event that a takeoverbid is launchedTransaction

November 10, 2023

agreement

The Company

Agreement on the series of transactions

SHIDA Holdings

involving acceptance of shares of common stock

Tsutomu Shida and Kinichi

issued by SHIDA Holdings through a capital

Shida

increase through third-party allocation of sharesinthe event that the takeover bid isimplemented, completed, and settled, to take
SHiDAX private
Agreement

November 10, 2023

The Company

Agreement intended to contribute to increasing

among

Kinichi Shida, Tsutomu

the corporate value of the SHiDAX Group overshareholders

Shida, Shojiro Shida, Tomiji

the medium to long term by establishing

Shida, Miyuki Shida, Yuma

agreement on governance and operations

Shida, Arisa Nagaki, Emiri

structures and the handling of shares of SHIDA

Shida, and SDI Corporation

Holdings after the capital increase through third-(“founders” hereinafter)

party allocation of shares by that company; byestablishing agreement on governance andoperations structures and the handling of sharesof SHiDAX after taking it private; and throughcooperation between the founders and theCompany
operations.

―42―

in

SHiDAXGroup

business(2) Conclusion of agreement on acceptance of all shares from third-party allocation
On January 4, 2024, the Company concluded with SHIDA Holdings Corporation an agreement concerning the acceptance of allshares of common stock in SHIDA Holdings issued by the latter company through a third-party allocation of shares. The Company
acquired the shares on January 5, 2024.
SHIDA Holdings was renamed SHiDAX Holdings Corporation effective April 1, 2024.
Agreement title
Agreement on

Date concluded
January 4, 2024

acceptance of all

Parties to agreement

Main details of agreement

The Company

An agreement on the acceptance of all shares of

SHIDA Holdingscommon stock in SHIDA Holdings issued by thesharescompany through a capital increase throughthird-party allocation of shares(1) Class and number of shares acquired
6,364,331 shares of common stock(2) Pay-in amount for shares acquired
2,230 yen per share of common stock(3) Total pay-in amount
14,192,458,130 yen in cash(4) Increases in capital and capital reserves
Capital:7,096,229,065 yen

Capital reserves: 7,096,229,065 yen(3) Commitment line agreements and term loan agreements with financial institutions
The Group has concluded (i) current account overdraft agreements with its primary financial institutions to enable efficient
fundraising.
It has also concluded agreements on (ii) commitment lines of credit and (iii) syndicated loans regarding the debts of SHIDA
Holdings.
Shown below are the unexecuted balances of loans under these agreements as of the end of the consolidated fiscal year underreview.
Consolidated fiscal year under review(i)Current account overdraft agreements
Total amount of current account overdraft agreements

29,045 million yen

Current account overdraft executed balance

15,045 million yen(ii) Commitment lines of credit (Note)
Total amount of commitment lines of credit

4,500 million yen

Executed balance of commitment line of credit–(iii) Syndicated loans (Note)
Total amount of syndicated loans

24,322 million yen

Executed balance of syndicated loans

16,201 million yen

Unexecuted balance of loans

26,621 million yen

Note: The agreements on commitment lines of credit and syndicated loans are subject to certain financial restrictive clauses.

6. Research and development activities
Not applicable―43―Section 3. Equipment and facilities
1. Overview of capital investments, etc.
During this consolidated fiscal year, the Company made total capital investments of 12,081 million yen (including leased assets),
mainly for the construction of the ORD Atsugi Cold Storage Station for the BtoC subscription business. It also made improvements
in its sales administration system and acquired passenger buses for its vehicle operation services.
No material disposal, sale, etc. of equipment or facilities took place during this consolidated fiscal year.

2. Major facilities
The Group’s major facilities are listed below.
(1) Reporting company
As of March 31, 2024
Book value
Name(location)

Head office(Shinagawa-ku,
Tokyo)ORD Ebina
Station(Ebina, Kanagawa
Prefecture)
ORD Atsugi Cold
Storage Station(Atsugi,
Kanagawa
Prefecture)

Other
Employees
Machinery
Tools,
Other
property,(persons)
Building(s)andfurniture,
Softwareintangible
Total
plant and(million yen) equipment and fixtures(million yen)assets(million yen)equipment(million yen) (million yen)(million yen)(million yen)

Businesssegment

Facility
details

BtoC
Subscription

Generalbusinessfacility

198

–

58

0

1,163

320

1,741

BtoC
Subscription

Logistics
facility

512

1,553

294

10,903

196–

13,460

36
(483)

BtoC
Subscription

Logistics
facility

347

3

216

8,494

58

9,120

3
(–)

624

(132)

Notes:
1. The amounts above exclude consumption tax, etc.
2. Numbers of employees indicated in parentheses indicate temporary employees, who do not count toward the total numbers of
employees.
3. Other intangible assets include trademarks and software in process.
4. No major facilities are under suspension of operations at present.
(2) Domestic subsidiaries
Not applicable(3) Overseas subsidiaries
Not applicable―44―3. Plans for new construction, disposal, etc. of equipment and facilities(1) New construction, etc. of important equipment and facilities
The new ORD Atsugi Cold Storage Station, described under “Part 3. Equipment and facilities: 3. Plans for new construction,
disposal, etc. of equipment and facilities” in the Annual Securities Report for the previous consolidated fiscal year, began operating
during the consolidated fiscal year under review.
Plans for new construction, etc. of important equipment and facilities as of the end of the consolidated fiscal year under review are
shown below.
Planned investment
amountName(location)

Businesssegment

Facility details

Head office(Shinagawa-ku, Tokyo)

BtoC
Subscription

Softwaredevelopment,
etc.

1,160

–

Cold storage
warehouse(Atsugi, Kanagawa
Prefecture)

BtoC
Subscription

Machinery andequipment

2,354

1,412

Total
Already paid
(million yen) (million yen)

(2) Disposal, etc. of important equipment and facilities
Not applicable―45―

Fundraising
methodPlans for start andcompletion of construction

Capacity
increase after
completion

Start

Completion

Equity capital

April 2024

March 2025

Responding toincreased sales

Equity capital

April 2024 October 2024

3.3-fold vs.
FY2019Section 4. Status of the reporting company
1. Status of stock, etc.
(1) Total shares of stock, etc.
(i) Total shares of stockClass

Total authorized shares

Common stock

71,411,200

Total

71,411,200(ii) Shares issued and outstandingClass

Shares issued andShares issued andoutstanding as of theoutstanding as of dateend of previousof Report submission
business year
(June 26, 2024)(March 31, 2024)

Name of listed financial
instruments exchange orregistered financial instruments
industry association

Details
Standard shares of stock in the
Company with no restrictions
on rights, with minimum
trading unit of 100 shares–

Common stock

38,028,092

38,028,092

Tokyo Stock Exchange
Prime Market

Total

38,028,092

38,028,092–(2) Status of share subscription rights, etc.
(i)

Detailed information on stock option systems
Not applicable(ii) Detailed information on rights plans
Not applicable(iii) Status of other share subscription rights, etc.
Not applicable(3) Exercise status, etc. of bonds with share subscription rights, etc. with clauses on revision of strike priceNot applicable―46―

(4) Trends in total shares issued and outstanding, capital, etc.

Date

Change in total Balance of total
Change inshares issued
shares issued
capitaland outstanding and outstanding (million yen)

Balance ofcapital(million yen)

Change inBalance ofcapital reserves capital reserves(million yen)(million yen)

April 1, 2019 – March
31, 2020 (Note 1)

142,960

33,738,116

7

1,291

7

5,171

July 16, 2019 (Note 2)

366,300

34,104,416

250

1,541

249

5,421

July 17, 2019 (Note 3)

219,700

34,324,116

150

1,691

149

5,571

April 1, 2020 – March
31, 2021 (Note 4)

134,192

34,458,308

6

1,698

6

5,578

April 8, 2020 (Note 5)

3,013,600

37,471,908

1,953

3,651

1,953

7,531

May 1, 2020 (Note 6)

527,000

37,998,908

341

3,993

341

7,873

April 1, 2021 – March
15,98438,014,892
1
3,994
1
7,874
31, 2022 (Note 7)
April 1, 2022 – March
13,20038,028,092
1
3,995
1
7,876
31, 2023 (Note 8)
Notes:
1. Exercise of share subscription rights
The number of shares increased by 142,960 due to the exercise of share subscription rights by resolutions passed at the regular
General Meetings of Shareholders held June 28, 2005, June 23, 2011, and June 21, 2012.
2. Third-party allocation at par value
Issue price
1,365 yenAmount added to capital
683 yenAllotted toAgriculture, Forestry and Fisheries Fund Corporation for Innovation, Value-chain and Expansion
Japan (366,300 shares)
3. Third-party allocation at par value
Issue value
1,365 yenAmount added to capital
683 yenAllotted to
YAMATO HOLDINGS CO., LTD. (219,700 shares)
4. Exercise of share subscription rights
The number of shares increased by 134,192 due to the exercise of share subscription rights by resolutions passed at the regular
General Meetings of Shareholders held June 28, 2005, June 23, 2011, and June 21, 2012.
5. General offerings at par value (issue of new shares through public offering)
Issue price
1,379 yen
Issue value
1,296.55 yen
Amount added to capital
648.275 yen
Total pay-in amount
3,907 million yen
6. Third-party allocation at par value (capital increase through third-party allocation of shares related to sale throughoverallotment)
Issue value
1,296.55 yen
Amount added to capital
648.275 yen
Allotted to
SMBC Nikko Securities Inc.
7. Exercise of share subscription rights
The number of shares increased by 15,984 due to the exercise of share subscription rights by resolutions passed at the regular
General Meetings of Shareholders held June 23, 2011 and June 21, 2012.
8. Exercise of share subscription rights
The total number of shares issued and outstanding increased by 13,200, capital increased by 1 million yen, and capital reserves
increased by 1 million yen due to the exercise of share subscription rights by a resolution passed at the regular General Meetingof Shareholders held June 21, 2012.

―47―

(5) Composition of ownership
As of March 31, 2024
Shareholdings (minimum trading unit: 100 shares)
Category

Foreign corporations,etc.
Individuals
and others
NonIndividuals
individuals

National
Financial
Other
and local Financial
instruments corporagovern- institutions
brokers
tions
ments

Shareholders

–

17

20

109

170

46

Shares inless than theminimum
trading unit

Total

21,81522,177–

Shares held
(minimum–
44,377
6,985
47,167
95,306
321
185,575
379,73154,992trading units)
Percentage of
–
11.69
1.84
12.42
25.10
0.08
48.87
100.00–shares held
Note: Treasury stock of 1,470,130 shares is included under 14,701 minimum trading units under “Individuals and others” and 30
shares under “Shares in less than the minimum trading unit.”(6) Major shareholders
As of March 31, 2024

Name

Address

Kohey Takashima

Shinagawa-ku, Tokyo

The Master Trust Bank of Japan,
Ltd.

Akasaka Intercity AIR, 8-1 Akasaka 1-chome,
Minato-ku, Tokyo
Gran Tokyo South Tower, 9-2 Marunouchi
1-chome, Chiyoda-ku, Tokyo

Shares held

Percentage heldof shares issued
and outstanding(not including
treasury shares)

4,847,200

13.26

2,882,500

7.88

2,648,000

7.24

Boulevard Anspach 1, 1000 Brussels, Belgium(Shinagawa Intercity A, 15-1 Konan 2-chome,
Minato-ku, Tokyo)

2,506,700

6.86

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

1,239,400

3.39

Kazuyoshi Fujita

Suginami-ku, Tokyo

1,032,516

2.82

NTT DOCOMO, INC.

11-1 Nagatacho 2-chome, Chiyoda-ku, Tokyo

1,000,000

2.74

240 Greenwich St., New York, NY 10286(Shinagawa Intercity A, 15-1 Konan 2-chome, Minatoku, Tokyo)

988,400

2.70

Boulevard Anspach 1, 1000 Brussels, Belgium(Shinagawa Intercity A, 15-1 Konan 2-chome,
Minato-ku, Tokyo)

827,500

2.26

Setagaya-ku, Tokyo

720,000

1.97

18,692,216

51.13

Recruit Co., Ltd.
The Bank of New York 133612(standing proxy: Mizuho Bank, Ltd.,
Settlement & Clearing Services
Department)
Custody Bank of Japan, Ltd.
(Trust Account)

The Bank of New York Mellon
140040(standing proxy: Mizuho Bank, Ltd.,
Settlement Sales Division)
The Bank of New York 133652(standing proxy: Mizuho Bank, Ltd.,
Settlement & Clearing Services
Department)
Yusuke Tsutsumi
Total

–

Note: All shares of stock held by the Master Trust Bank of Japan, Ltd. and Custody Bank of Japan, Ltd. are related to their trust businesses.

―48―

(7) Voting rights(i) Shares issued and outstanding
As of March 31, 2024
Category

SharesVoting rights

Details

–

–

–

–

–

–

–

–

–

Common stock
1,470,100
Common stock
36,503,000
Common stock
54,992––––

Total shares issued and outstanding

38,028,092––

Total shareholder voting rights–

Shares without voting rights
Shares with restricted voting rights(treasury shares, etc.)
Shares with restricted voting rights(other)Shares with voting rights(treasury shares, etc.)
Shares with voting rights (other)
Shares in less than the minimum
trading unit

365,030–

365,030–(ii) Treasury stock, etc.
As of March 31, 2024
Owner name

Oisix ra daichi Inc.
Total

Owner address

Shares held in Shares held in Total number
own nameothers’ names of shares held

Shareholding
ratio (%)

1-11-2 Osaki, Shinagawa-ku,
Tokyo

1,470,100–

1,470,100

3.87–

1,470,100–

1,470,100

3.87

―49―

2. Status of treasury stock acquisition, etc.
Stock class, etc.: Acquisition of common stock under Article 155, Paragraphs 3 and 7 of the Companies Act(1) Status of acquisition by resolution(s) passed at the general meeting of shareholders
Not applicable(2) Status of acquisition by resolution(s) passed at the Board of Directors
Category
Status following resolution passed at the Board of Directors(May 14, 2024)(Acquisition period: May 15 – October 31, 2024)
Treasury stock acquired before this business year

SharesTotal price (million yen)
1,825,000

3,000

–

–

–

–

–

–

–

–

Treasury stock acquired during this business year
Total number and amount of shares remaining to be acquired
under the resolution
Percentage unexercised as of the end of the business year

Treasury stock acquired during the period
300,700
363
Percentage unexercised as of the date on which the Report
83.5
87.9
was submitted
Note: Treasury stock acquired during the period excludes shares acquired from June 1, 2024 through the date on which the Report
was submitted.
(3) Details not based on resolutions of the general meeting of shareholders or resolutions of the Board of Directors
Category

SharesTreasury stock acquired during this business year
Treasury stock acquired during the period

Total price (yen)136

247,328––

Note: Treasury stock acquired during the period excludes shares in less than the minimum trading unit acquired from June 1, 2024
through the date on which the Report was submitted.
(4) Status of disposal and holding of treasury stock acquired
Current business year
Category

Current period

SharesTotal disposal price(yen)

SharesTotal disposal price
(yen)

–

–

–

–

–

–

–

–

–

–

–

–

Other

–

–

–

–

Total treasury shares held

1,470,130–

1,770,830–

Treasury stock acquired offered byunderwriters
Treasury stock acquired disposed ofthrough retirement
Treasury stock acquired subjected tomerger, stock swaps, granting of shares, or
stock splits

Note: Treasury stock acquired during the period excludes shares in less than the minimum trading unit acquired from June 1, 2024
through the date on which the Report was submitted.

―50―

3. Dividend policy
Since its founding, the Company has retained all earnings available for distribution as internal reserves to enhance its financial
foundations and to prepare for future business growth. However, returning earnings to shareholders remains a key management priority,and the Company will consider paying dividends to shareholders in consideration of business results and financial standing and matterssuch as the scale of its businesses and earnings stability.
In general, when distributing retained earnings, the Company plans to pay dividends only once annually, at year’s end. However, it
has adopted a system of interim dividends under Article 454, Paragraph 5 of the Companies Act. The Articles of Incorporation identify
the Board of Directors as the decision-making body for both year-end and interim dividends.
The Company plans to draw on its internal reserves to fund enhancements of its financial foundations and future business growth inresponse to anticipated changes in business conditions.

―51―

4. Status of corporate governance, etc.
(1) Overview of corporate governance(i) Basic thinking on corporate governance
The Company regards corporate governance as a function of management controls. Recognizing the fact that this function isessential to continually raising corporate value, it strives to strengthen and enhance its corporate governance system.
The Company considers timely and accurate disclosure and the transparency and fairness of decision-making as cornerstones to
its accountability to investment markets as a whole, including shareholders.
The essence of compliance, one of the pillars of corporate governance, is to meet the expectations of society, a key assumption
underlying its business philosophy and the Company’s capacity to deliver solutions to society’s challenges through its businesses,
above and beyond the mere conformance with laws and regulations. It recognizes a comprehensive compliance system to be an
important management topic for earning and retaining the trust of shareholders, investors, business partners, and otherstakeholders.
(ii) Overview of the corporate governance system and reasons for its adoption
A. Overview of the corporate governance system
As a company with an audit and supervisory board, the Company has established the General Meeting of Shareholders, theBoard of Directors, and the Board of Auditors as bodies under the Companies Act and the Management Committee and theNomination and Compensation Committee as voluntary bodies.
a. Board of Directors
The Company Board of Directors consists of nine Directors, including five External Directors. In addition to regularmonthly meetings, the Board meets at other times as necessary to deliberate and to make decisions on important mattersand mutually oversee the performance of their duties. The Corporate Auditors attend each meeting of the Board of Directors
and audit the state of execution of the duties of the Board of Directors.
Chairperson:

Director Hiroyuki Ozaki (under the Articles of Incorporation and a Board of Directors
resolution)

Directors:

Kohey Takashima, Yusuke Tsutsumi, Kohei Matsumoto

External Directors:

Mitsuyo Hanada, Hitoshi Tanaka, Junko Watabe, Wakako Sakurai, Misato Kowaki

External Corporate Auditors: Chika Otobe, Yukihiro Moroe, Takashi Kokubo, Kengo Wada
Proposals to the Board of Directors are submitted in accordance with laws, regulations, the Articles of Incorporation, andinternal rules governing approval authority.
In addition to delegating authority to improve the efficacy of deliberations by the Board of Directors, efforts seek to ensure
effective decision-making by submitting to the Board of Directors even matters not subject to Board resolutions fordiscussions in advance as necessary.
Status of main activities of the business year
Status of attendance and participation in discussions
Director
Mitsuyo Hanada
Director
Hitoshi Tanaka

Attended all 14 meetings of the Board of Directors held during the business year. Participatedin discussions as appropriate in Board of Directors meetings, drawing on his specialized
knowledge and wealth of experience as an expert in human resources and education.
Attended all 14 meetings of the Board of Directors held during the business year. Participatedin discussions as appropriate in Board of Directors meetings, drawing on his wide-ranging
knowledge and experience as a manager with many years of experience.
Attended all 14 meetings of the Board of Directors held during the business year. ParticipatedDirectorin discussions as appropriate in Board of Directors meetings, drawing on her wide-ranging

Junko Watabeknowledge and experience concerning the e-commerce business and management of joint
ventures and other business entities.

―52―

Status of attendance and participation in discussions
Attended all 14 meetings of the Board of Directors held during the business year. ParticipatedDirectorin discussions as appropriate in Board of Directors meetings, drawing on her wide-ranging

Wakako Sakurai

knowledge and experience concerning the food content business.
Attended all 14 meetings of the Board of Directors held during the business year. ParticipatedDirectorin discussions as appropriate in Board of Directors meetings, drawing on her wide-ranging

Misato Kowaki

knowledge and experience concerning marketing and branding and on consumer andcustomer perspectives.
Attended all 14 meetings of the Board of Directors and all 17 meetings of the Board of

Corporate Auditor

Auditors held during the business year. Participated in discussions as appropriate in Board of

Chika Otobe

Directors and Board of Auditors meetings, drawing on her wide-ranging knowledge andexperience concerning administrative and auditing sections in various types of companies.
Attended all 14 meetings of the Board of Directors and all 17 meetings of the Board of

Corporate Auditor

Auditors held during the business year. Participated in discussions as appropriate in Board of

Yukihiro Moroe

Directors and Board of Auditors meetings, drawing on his wide-ranging knowledge andexperience, chiefly concerning corporate management and investment markets.
Attended all 14 meetings of the Board of Directors and all 17 meetings of the Board of

Corporate Auditor

Auditors held during the business year. Participated in discussions as appropriate in Board of

Takashi Kokubo

Directors and Board of Auditors meetings, drawing on his wide-ranging knowledge andexperience as attorney at law and in positions such as Director with other companies.
Attended all 14 meetings of the Board of Directors and 16 of the 17 meetings of the Board of

Corporate Auditor
Kumi Kobayashi

Auditors held during the business year. Participated in discussions as appropriate in Board of
Directors and Board of Auditors meetings, drawing on her wide-ranging knowledge andexperience from serving as certified public accountant and as Director and in other positions
with various other companies.

Note: In addition to the above meetings, six resolutions were passed in writing.
The qualities and skills (e.g., specializations, experience, discernment) of individual Directors are shown in the following Skills
Matrix.
See “(3) Auditing” below concerning Corporate Auditors.
<Officer skills matrix>
Notable skills are indicated by ●◎: Chairperson 〇: Observer
Properties
Name

Nomination
Independent
andExternality
officer
Remuneration
Committee

Specialization, experience, knowledge

Age

Gender50

Male

YusukeTsutsumi

46

Male

Hiroyuki
Ozaki

71

Male

Kohei
Matsumoto

40

Male

Kohey
Takashima〇

MitsuyoHanada

●

●

◎

75

Male

HitoshiTanaka

●

●

〇

61

Male

Junko
Watabe●●47

WakakoSakurai●●51

MisatoKowaki●●40

Duties, properties,
qualifications, etc.
Founder, representative,
President
Founding team member,general businesssupervision
Retail business operation,
general management
supervision
Specifics, management
planning supervision
University professor(organization,
human resources)
Management of a publicly
traded company

Sales,
Financial
ESG,
Term of Corporate Business marketing,Governance, accounting, Organizasustainaoffice management operation
product
compliance investment, tion, HRbilityplanning
markets
24

●

24

●

●

●

●

●

●

15

●

6

●

●

17

Information management/
Female digital business
management
Marketing businessFemalemanagement
Independent marketing
Femalebusiness

―53―

9

●
●

5
6
3

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●
●
●

Addendum to the Officers’ Skills Matrix
Since the Company was founded in 1997, he has been in charge of management of the Company and

Kohey
Takashima

the Group as Representative Director of the Company. He offers deep and extensive insights andperspectives on the management of the Company and the Group.
As one of the founding members of the Company when it was established in 1997, he has been in

YusukeTsutsumi
HiroyukiOzakicharge of operation and management of the Company and the Group. He offers deep and extensive
insights and perspectives on the management of the Company and the Group.
Since joining the Company, he has drawn on his experience in operations and management within
the retail business and has supported Company growth in administrative sections. He offers deep andextensive insights and perspectives on the management of the Company and the Group.

Kohei

Since joining the Company, he has held positions in corporate planning divisions. He offers deep andMatsumotoextensive insights and perspectives on the management of the Company and the Group.
He offers extensive insight on overall corporate management, with a focus on personnel andorganization from an academic perspective as a university professor. He has also served as a
Company Director since before its shares were listed on the Mothers exchange and is highly

Mitsuyoknowledgeable concerning the Company’s growth process. The Company anticipates that he will

Hanadaprovide beneficial advice and opinions on the management of the Company, both adding to andcounterbalancing the perspectives offered by other External Directors.
The Company has submitted notification of his status as an independent officer under the
independence criteria of the Tokyo Stock Exchange.
The Company anticipates that he will supervise the management of the Company and provide advice

Hitoshiand opinions based on his wealth of experience and wide-ranging insights as corporate manager.

TanakaThe Company has submitted notification of his status as an independent officer under the
independence criteria of the Tokyo Stock Exchange.
She offers extensive insight on management regarding customer management with digital technology

Junko
Watabeaccumulated through her career at the Recruit Group. The Company anticipates that she will provide
wide-ranging advice and opinions on the management of the Company.
The Company has submitted notification of her status as an independent officer under the
independence criteria of the Tokyo Stock Exchange.
She has many years of experience with ABC Cooking Studio Co., Ltd., and offers a wealth of

WakakoSakuraiinsights regarding the content business built with NTT DOCOMO, INC. The Company anticipatesthat she will provide valuable advice and opinions on the management of the Company.
The Company has submitted notification of her status as an independent officer under the
independence criteria of the Tokyo Stock Exchange.
She has experience in various activities including planning, consulting, and publishing books related
to lifestyles, including food, clothing, and housing. This experience is useful from the perspective ofMisatoKowakithe Company, which is pursuing the creation of new business value in areas related to food. The
Company anticipates that she will provide advice and opinions based on her experience and insights
on consumer perspectives.
The Company has submitted notification of her status as an independent officer under the
independence criteria of the Tokyo Stock Exchange.

b. Management Committee
The Company Management Committee, consisting of Directors (excluding External Directors), Standing Corporate
Auditors, Executive Officers, and other persons responsible for individual sections, meets weekly as the second highest
decision-making body after the Board of Directors. Its duties include monitoring everyday business execution andaccelerating decision-making.
Chairperson:

President and Representative Director Kohey Takashima

Directors:

Yusuke Tsutsumi, Hiroyuki Ozaki, Kohei Matsumoto

External Corporate Auditor: Chika Otobe―54―

Executive Officers:

Hiroto Yamashita, Hideto Ikeyama, Misaki Kan, Ayumu Shingu, Satoshi Ohki, Shingo
Rikimaru, Satoko Fuji, Shinichi Hamasaki, Sonoko Toukairin, Atsushi Komatsu, Ryo
Kishimoto, Shigeru Kumano, Yoshihiko Tomitac. Corporate Auditors and Board of Auditors
The Company’s Corporate Auditors consist of one Standing Corporate Auditor and three Non-Standing Corporate Auditors.
All Corporate Auditors are External Corporate Auditors. The Board of Auditors consists of these Corporate Auditors.
Each Corporate Auditor strives to increase the efficacy of corporate governance by participating and expressing opinions at
meetings of the Board of Directors and at other important meetings. In principle, the Board of Auditors meets on the samedates as regular meetings of the Board of Directors.
External Corporate Auditors:

Chika Otobe (one Standing Corporate Auditor)
Yukihiro Moroe, Takashi Kokubo, Kengo Wada (three Non-Standing Corporate
Auditors)

d. Establishment of a nomination and compensation committee
In its meeting held May 26, 2022, the Company Board of Directors resolved to establish a Nomination and Compensation
Committee as an advisory body to the Board. The Committee began operating in June of the same year. The Committee
was formed by reorganizing the previous Officer Remuneration Advisory Meeting. In addition to soliciting the views andadvice of outside officers, the Committee’s three-person membership has a majority of independent External Directors toensure objectivity and transparency in procedures related to decisions on matters such as the nomination and remunerationof Directors and, by extension, to improve the oversight functions of the Board and enhance corporate governance functions.
Company Independent External Director Mitsuyo Hanada chairs the Nomination and Compensation Committee. Its othermembers are Company External Director Hitoshi Tanaka and Company Representative Director Kohey Takashima. Eachmember attended all three meetings of the Committee held over the course of this business year.
The Nomination and Compensation Committee discusses matters such as the design of systems for the remuneration ofindividual Directors, the state of business execution, Company business performance, and the appropriate states ofmanagement systems and other matters given the Company’s business plans and targets. It reports to the Board of Directors
as requested concerning Director remuneration and nomination.
B. Reasons for using this system
The Company has adopted the structure of a company with a Board of Auditors. This structure enables effective decisionmaking by the Board of Directors and effective oversight of the performance of the duties of the Directors, throughconcentration of authority and responsibility for business execution in the Board of Directors, as the highest decision-making
body, while Corporate Auditors and the Board of Auditors, independent of the Board of Directors, perform the functions ofauditing the Board of Directors to ensure a system of sufficient checks and balances.
Shown below is a diagram of the Company’s corporate governance structure as of the date on which this Report was submitted.

―55―

General Meeting of Shareholders
Appointment,
dismissal
Corporate Auditor
auditsBoard of Auditors

Board of Directors

Control

Consultation

Business sections

Cooperation

Cooperation

Appointment,
dismissal, Reporting
oversight
President andRepresentative Director

Appointment,
dismissal

Appointment,
reportingInternal Audit
OfficeCooperation

Accounting auditor

Appointment,
dismissal

Accounting auditing

Management
Committee

Advice, etc.
Internal auditing

Legal advisors
Advising tax accountants
Advising social insurance
consultants
Outside experts(iii) Other matters related to internal controls
A. Status of the internal controls system
In its meeting held October 30, 2006, the Company Board of Directors approved the Basic Policy on the Development of theInternal Controls System, intended to establish and maintain a system to ensure that the performance of the duties of the
Directors complies with laws, regulations, and the provisions of the Articles of Incorporation and other systems and the
propriety of operations as a joint-stock company. This Basic Policy has been revised as appropriate since then.
It was revised at the meeting of the Board of Directors held March 21, 2024. Detailed information on the current system isprovided below.
(i)System to ensure that the performance of the duties of the Directors complies with laws, regulations, and the provisionsof the Articles of Incorporation
Directors must ensure that, as individuals embodying the Company’s corporate philosophy, Directors themselves andemployees of the Company or Company subsidiaries act at all times in full compliance with laws, regulations, theprovisions of the Articles of Incorporation, and in-house rules and with socially accepted norms.
The Board of Directors must ensure that the Board itself as a management body and Directors and employees of theCompany or Company subsidiaries establish an effective internal controls system and strive to establish Companywide
compliance systems.
In addition to attending meetings of the Board of Directors in accordance with the provisions of the Companies Act,
Corporate Auditors may also attend and express opinions at other important meetings held by Directors.

(ii) Systems related to the retention and management of information concerning the execution of the duties of the Directors
Important information whose disclosure is required by laws and regulations shall be disclosed promptly.
Applications for approval, minutes, and other documents concerning the process of decision-making in connection withthe performance of the duties of the Directors shall be retained in an appropriate state based on document management
rules.
Such documents shall be made available for viewing by Directors and Corporate Auditors at all times.

―56―

(iii) Rules and other systems related to the management of the risk of loss
Management of the risk of loss shall be specified in various in-house rules and manuals from a risk management perspective.
A Risk Management Committee shall be established as a specialized section to handle risk management. In cooperation
with related sections, it shall ascertain business and management risks at the Company and at Company subsidiaries andanalyze and evaluate risks and summarize countermeasures, reporting regularly to the Board of Directors and the Board
of Auditors.
Communication structures and action manuals shall be maintained to enable effective action by all officers and employees
in the event of unforeseen circumstances.
(iv) Systems for ensuring the efficiency of the execution of the duties of the Directors
The Board of Directors meets monthly to make decisions on important matters as provided for by laws, regulations, theArticles of Incorporation, and the Board of Directors rules and to report on the state of business execution.
To enable rapid decision-making on Company business execution, Standing Directors and other nominated members meetto discuss matters and make decisions on business execution policies and other important matters at the Management
Committee, in accordance with Management Committee rules.
(v)

Systems for ensuring that the execution of the duties of the employees comply with laws, regulations, and the provisionsof the Articles of Incorporation
In addition to establishing a corporate philosophy and clarifying the basic philosophy underlying corporate activities, theCompany establishes employee action standards to serve as the basis for everyday employee activities.
Employees of the Company and its subsidiaries who become aware of any violations of laws, regulations, Company rules(including related standards), or social norms are required to report them promptly to superiors or through thewhistleblowing hotline.
The Internal Audit Office carries out periodic internal audits of matters such as the state of compliance and the proprietyof business procedures and other details in the Company’s businesses and its subsidiaries, based on internal audit rules. It
reports the results of such audits to the President.

(vi) Systems for ensuring the propriety of the operations of the Group of companies consisting of the Company and its parent
companies and subsidiaries
The Company has established affiliate management rules to establish a system whereby Company subsidiaries can performtheir duties efficiently. Based on these rules, matters related to the performance of the duties of the Directors and otherofficers of Company subsidiaries are reported to the Company in a timely and appropriate manner.
In addition, the Company dispatches Directors or Corporate Auditors to important Company subsidiaries to oversee andaudit the performance of the duties of subsidiary Directors and other officers as necessary. The Company also solicits andduly considered reports from these dispatched officers on matters related to subsidiary business execution.
The General Manager of the Company’s Administration Division guides Company subsidiaries on the maintenance ofappropriate internal controls systems.
The Internal Audit Office undertakes internal audits of Company subsidiaries and strives to ensure the efficacy and validityof internal controls related to overall business execution by Company subsidiaries.
(vii) Matters related to employees assigned to assist in the duties of Corporate Auditors at the request of Corporate Auditors
If Corporate Auditors request the assignment of employees to assist in their duties, the Board of Directors shall consult
with the Corporate Auditors and appoint employees to assist the Corporate Auditors from the Internal Audit Office andother sections as judged necessary.

―57―

(viii) Matters related to the independence from Directors of employees assisting in the duties of Corporate Auditors andmeasures to ensure the efficacy of instructions to such employees
Employees appointed to assist in the duties of Corporate Auditors act under the command and instruction of Corporate
Auditors. For the time that they provide such assistance, they are entirely free of constraints that may be imposed by orders
or instructions from Directors or other parties other than Corporate Auditors. To ensure their independence from any parties(including Directors) other than Corporate Auditors, all decisions concerning transfers, personnel evaluations, rewards or
penalties, or other matters involving employees providing assistance in the duties of Corporate Auditors must be made in
consultation with the Corporate Auditors.
(ix) Systems for reporting by Directors and employees to Corporate Auditors and other systems related to reporting toCorporate Auditors
When a Director or employee of the Company or a Company subsidiary has identified a matter deemed important in theprocess of business execution, he or she must promptly report the details of the matter to the Corporate Auditors. Any
Director or employee of the Company or a Company subsidiary from whom a Corporate Auditor demands a report is
obligated to provide such report. A Director or employee of the Company or a Company subsidiary making such a reportcannot be dismissed or otherwise treated punitively or at a disadvantage for having made such report.
A contact point (“whistleblowing hotline” hereinafter) has been established to field consultations, communication, andreports from Directors and employees of the Company and Company subsidiaries, thereby quickly bringing to light any
violations and allowing rapid and appropriate response.
The whistleblowing hotline office reports to the Corporate Auditors on the status of reports to the hotline and the status of
the response thereto.
The Company and Company subsidiaries must take steps to ensure that all officers and employees are aware of thewhistleblowing rules and refrain from dismissing or otherwise treating whistleblowers at a disadvantage in any way.
(x)

Matters concerning other systems for ensuring effective audits by Corporate Auditors, procedures for prepayment or
reimbursement of costs incurred in undertaking the duties of Corporate Auditors, and policies on handling of costs or
debts incurred therein
Corporate Auditors shall not be constrained by other parties in the performance of their duties. They shall be authorized toform their own and independent opinions regarding the propriety of actions taken by Company and subsidiary Directors
in their duties and their compliance with laws, regulations, and the Articles of Incorporation.
To ensure this independence and authority, the Corporate Auditor Auditing Standards shall clearly indicate the scope of
authority granted to Corporate Auditors, including the authority to enlist the full support of the Internal Audit Office,accounting auditor(s), and other parties as the Corporate Auditors deem necessary for the efficacy of auditing.
As necessary for the performance of their duties, Corporate Auditors may, at Company expense, resort to the services oflegal and accounting experts. The Company or Company subsidiary shall promptly pay invoices for necessary expenses
incurred by the Corporate Auditors in their duties, unless the expenses are clearly not essential to such duties.

(xi) Systems for ensuring the propriety of financial reporting
The Company and its consolidated subsidiaries and equity method affiliates shall comply with in-house rules, accounting
standards, and applicable laws and regulations and maintain internal systems to ensure the reliability of financial reporting
and respond appropriately to the internal controls reporting system established by the Financial Instruments and ExchangeAct. Likewise, the Company and its consolidated subsidiaries and equity method affiliates shall take steps to ensure all
officers and employees fully grasp these internal systems and promote their awareness of compliance; and periodicallyassess the efficacy thereof.

―58―

(xii) Basic outlook on eliminating the influence of and interactions with antisocial forces and the status of related measures
The Company’s Declaration on Eliminating the Influence of Antisocial Forces calls for the exclusion of any and all
relations with antisocial forces, including measures to assess new counterparties before engaging in transactions, to prevent
interactions with antisocial forces or parties associated with antisocial forces.
It has also formulated a Manual for Responding to Antisocial Forces to prepare the Company and its subsidiaries to respondto any contact by antisocial forces. Under this system, the Corporate Planning Division is assigned a central role in these
responses and appropriate measures are taken through prompt consultation, as necessary, with legal advisors, law
enforcement agencies, and the National Center for Removal of Criminal Organizations.
B. Status of maintenance of risk management systems
The Risk Management Committee plays a central role in maintaining the Company’s risk management and compliancesystems.
The Committee’s membership consists of executive officers and other officers. Standing Corporate Auditors shall participate
in all Committee meetings. The Committee’s responsibilities include strengthening and promoting awareness of complianceamong officers and employees, fielding reports on matters such as violations of laws and regulations, and investigating thefacts of such matters. Its activities are mainly based on subcommittees in charge of specific themes. The Committee also holds
monthly meetings to allow reporting and discussion on various matters, including whistleblowing reports, if any;
countermeasures in the event of contact with antisocial forces; the state of compliance with labor laws and regulations andcompliance-related matters generally; matters related to risk management; matters related to timely disclosure; and the status
of internal controls.
In addition, in accordance with the principles of the Whistleblower Protection Act, the Company has established awhistleblowing system (“corporate ethics hotline” hereinafter) to ensure thorough compliance. Company employees can use
this system to report on actual or potential legal or regulatory violations, as stipulated in the Whistleblower Protection Act,and other serious compliance violations or other whistleblowing targets to outside attorneys or the corporate ethics hotline
staff. In addition to taking appropriate measures to protect whistleblowers, information received and other matters are reported
via the ethics hotline staff to the Risk Management Committee and requisite corrective measures taken.
In addition, ethics rules have been established, with which all Company officers and employees are required to comply. Efforts
are made to promote and raise awareness of these rules. Efforts to ensure compliance in specific projects include measures toassess compliance with laws and regulations that bear directly on Company business, including the Act on the Protection of
Personal Information, the Act against Unjustifiable Premiums and Misleading Representations, and the Act on Specified
Commercial Transactions, as well as measures to promote, through training and other means, knowledge and understandingof laws and regulations.
C. Status of systems to ensure the propriety of subsidiary business operations
The General Manager of the Management Planning Division guides subsidiaries, affiliates, and other units within the Groupon maintaining appropriate internal controls systems.
The Internal Audit Office ensures that Company subsidiaries, affiliates, and other units within the Group conduct internal
audits and maintain effective and valid internal controls for their operations as a whole.
D. Specified number of Directors
The Company’s Articles of Incorporation specify that the Company shall have up to 11 Directors.
E. Requirements of resolutions on the appointment of Directors
The Company’s Articles of Incorporation require that a resolution on appointment of a Director be approved by a majority ofthe voting rights present at a meeting attended by shareholders representing at least one-third of shareholder voting rights.
They also state that cumulative voting may not be used for a resolution on appointment of a Director.

―59―

F. Requirements of special resolutions of the General Meetings of Shareholders
To facilitate the efficient undertaking of proceedings at the General Meetings of Shareholders, the Company’s Articles ofIncorporation stipulate that a special resolution as described in Article 309, Paragraph 2 of the Companies Act must be
approved by at least two-thirds of the voting rights present at a meeting attended by shareholders representing at least onethird of shareholder voting rights that can be exercised on the resolution. This is intended to ease quorum requirements for
special resolutions, thereby streamlining the handling of proceedings at the General Meetings of Shareholders.
G. Authority of the Board of Directors to make decisions on resolutions of General Meetings of Shareholders
a. Decision-making body concerning dividends of surplus, etc.
The Company’s Articles of Incorporation specify that decisions regarding dividends of surplus and other matters describedin the subparagraphs to Article 459, Paragraph 1 of the Companies Act are to be made by the resolution of the Board of
Directors, not at General Meetings of Shareholders, except as otherwise provided for by laws or regulations. This is intended
to allow the dynamic return of profits to shareholders.
b. Matters related to the interim dividends system
The Company’s Articles of Incorporation specify that interim dividends may be paid with a basis date of September 30 eachyear by the resolution of the Board of Directors under Article 454, Paragraph 5 of the Companies Act. This is intended toallow the dynamic return of profits to shareholders.
c. Acquisition of treasury stock
To enable the dynamic execution of management policies, including financial policies, in response to changing economic
conditions, the Company’s Articles of Incorporation specify that treasury stock may be acquired by resolution of the Boardof Directors under the provisions of Article 165, Paragraph 2 of the Companies Act.
H. Summary of details of agreements limiting liability
Under the provisions of Article 427, Paragraph 1 of the Companies Act and the Company’s Articles of Incorporation, theCompany concludes with Directors (excluding Executive Directors and similar parties) and Corporate Auditors agreementsthat limit their liability to provide compensation for damages under Article 423, Paragraph 1 of the Companies Act to no morethan the total amount under the subparagraphs to Article 425, Paragraph 1 of the Companies Act, conditional on theperformance of their duties in good faith and the absence of any gross negligence.
I. Summary of officer liability insurance policies
To secure capable human resources and to avoid discouraging decisive action, the Company has concluded officer liability
insurance policies as summarized below. It plans to renew these policies in October 2024.
a. Effective premium rate paid by the insured
The Company pays all insurance premiums, including premiums for special riders. The insured effectively pay no premiums.
b. Summary of insured incidents subject to compensation
These policies, including special riders, cover damages arising from liabilities incurred by insured officers in connection
with the performance of their duties or from demands arising from such liabilities. They exclude certain cases, such as cases
involving intentional regulatory violations.

―60―

(2) Officers(i) List of officers
Male: eight officers; female: five officers (38% of officers accounted for by women)
Title

Name

Date of birth

Past experience, positions and responsibility
in the Company(Significant concurrent positions)
April 1998
Joined McKinsey & Company Inc. Japan
June 2000

Term ofofficeNumber ofshares of theCompany held

*3

4,847,200

Representative Director, CEO of theCompany (current position)

June 2011

Representative Director of Eastern Japan
Food Association (current position)

October 2015

Director of Oisix Hong Kong Co., Ltd.
(current position)

July 2016

Chairman and Representative Director ofTokushimaru Inc. (current position)

July 2018

Chairman of JAPAN WHEELCHAIR
RUGBY FEDERATION (currently Japan
Wheelchair Rugby Federation) (current
position)

December 2018 Director of Oisix Inc. (current position)
May 2019

Director of Three Limes, Inc. (current
position)

October 2019
President andRepresentative Director

Kohey Takashima

August 15, 1973

Director of WELCOME Co., Ltd. (current
position)

March 2020

External Director of CARTA HOLDINGS,
INC.

April 2021

Vice Chairman of KEIZAI DOYUKAI(Japan Association of Corporate
Executives) (current position)

June 2021

Outside Director of Benesse Holdings, Inc.

November 2022 Joint Representative Director, Data for
Social Transformation (current position)
January 2023

External Director, SHiDAXCORPORATION (current position)

January 2024

Representative Director and Chairman of
Niigata Albirex Baseball Club Co., Ltd.
(current position)
Representative Director of SHIDA
Holdings Corporation (now SHiDAX
Holdings Corporation) (current position)

March 2024

Representative Director and Vice Presidentof SHiDAX Corporation (current position)―61―

TitleName

Date of birth

Past experience, positions and responsibility
in the Company(Significant concurrent positions)
June 1997
Joined Kohey Ltd. (currently the

Term ofofficeNumber ofshares of theCompany held

*3

720,000

Company)
October 1999

Director of the Company

June 2006

Director; Manager of EC Business
Department

July 2008

Director and Executive Officer; General
Manager of Business Division

April 2012

Director and Executive Officer; General
Manager of EC Business Division

April 2017

Director and Executive Officer; General
Manager of Alliance/Solution Division

October 2017

Director and Executive Officer; General
Manager of Solution Business Division(current position)

Director
Executive Officer
Responsible for BtoB
Business
Responsible for RetailMedia Business Division

July 2018

Director of karabiner.inc (current position)

April 2023

Director and Executive Officer
Supervising BtoB Business (current

Yusuke Tsutsumi

position)

March 22, 1978

Responsible for Solution Business
Division, etc.
March 2024

Director, SHiDAX Corporation (current
position)

April 2024

Representative Director and Vice Presidentof SHiDAX CONTRACT FOODSERVICE CORPORATION (current
position)
Representative Director and Vice Presidentof SHiDAX FOOD SERVICECORPORATION (current position)
Representative Director and Vice Presidentof SLOGIX CORPORATION (current
position)

May 2024

General Manager of the Solution Business
Division of the Company
Responsible for the Retail Media Business
Division (current position)―62―

TitleName

Date of birth

Past experience, positions and responsibility
in the Company(Significant concurrent positions)
April 1975
Joined the Daiei, Inc.
June 1996

Term ofofficeNumber ofshares of theCompany held

*3

86,000*3

7,400

General Manager of Product Planning
Division

April 2003

General Manager of Human Resources
Division

September 2006 Executive Officer
October 2006

Director; In charge of East Japan GMS
Business

March 2007

Director; In charge of Sales

July 2008

Joined the Company as Advisor

November 2008 General Manager of General Planning
Division
June 2009

Director and Executive Officer; General
Manager of General Planning Division

Director
Executive Officer
Responsible for HR
Division

July 2015
Hiroyuki Ozaki

Director and Executive Officer; General
Manager of Human Resources Planning

October 14, 1952

Division, General Manager of
Administration Division
July 2015

Corporate Auditor of Gochimaru Inc.

October 2015

Auditor of Oisix Hong Kong Co., Ltd.

April 2016

Director and Executive Officer; General
Manager of Human Resources Planning
Division (currently HR Division), theCompany

January 2024

Director of SHIDA Holdings Corporation(now SHiDAX Holdings Corporation)(current position)

March 2024

Director of SHiDAX Corporation (current
position)

April 2024

Executive Officer of the Company;
Responsible for the HR Division (current
position)

April 2008

Joined Oisix Inc. (currently the Company)

July 2014

Executive Officer; Manager of Corporate
Planning Office, General Planning
Division, the Company

October 2015

Executive Officer; General Manager ofCorporate Planning Division

February 2018

Corporate Auditor of Radish Boya Co.,
Ltd. (currently the Company)

Director
Executive Officer
General Manager,
Management Planning
Division

June 2018
Kohei Matsumoto

Director and Executive Officer; General
Manager of Corporate Planning Division

January 24, 1984

(current position)
August 2019

CEO of Future Food Fund Inc. (current
position)

March 2021

Director of Toyoichi Co., Ltd. (current
position)January 2022

Director of Future Food Lab Co., Ltd.
(current position)

January 2024

Director, SHIDA Holdings Corporation(now SHiDAX Holdings Corporation)(current position)―63―

TitleName

Date of birth

Past experience, positions and responsibility
in the Company(Significant concurrent positions)
August 1974 Researcher of Laboratory for

Term ofofficeNumber ofshares of theCompany held

*3

4,800

*3

20,000Organizational Research and Education,
University of Southern California
September 1977 Lecturer of Faculty of Sociology,
California State University, Los Angeles
April 1986

Professor of SANNO University

March 1990

Professor of Faculty of Policy
Management, Keio University

June 2007
Director

Mitsuyo Hanada

August 8, 1948

External Director of the Company (current
position)

June 2011

Director of Mitani Sangyo Co., Ltd.
(current position)

April 2014

Professor Emeritus of Keio University(current position)

April 2014

Representative Director of SFC Forum(current position)

April 2014

Representative Director of Corporate
University Platform Co., Ltd.

May 2017

Representative Director of Career Advisor
Council (current position)

April 1981

Joined Maebashi Shinkin Bank (currently
Shinonome Shinkin Bank)

April 1987

Established Jin Products

July 1988

Established JIN Ltd. (currently JINSHOLDINGS Inc.)
Founder & CEO (current position)

June 2011

Representative Director of Brand New Day
Inc. (currently Feel Good Inc.)

June 2015
Director

Hitoshi Tanaka

January 25, 1963

External Director of the Company (current
position)

May 2018

Representative Director of JINS Japan Co.,
Ltd. (currently JINS Inc.)

December 2018 Representative Director of Think Lab. Inc.
(current position)
March 2019

External Director of BALMUDA Inc.

June 2021

Outside Director of Japan Communications
Inc. (current position)

October 2022

Outside Director, Mebuku Ground Inc.
(current position)

December 2023 Director of JINS Inc. (current position)―64―

TitleName

Date of birth

Past experience, positions and responsibility
in the Company(Significant concurrent positions)
April 2000
Joined Dai Nippon Printing Co., Ltd.
May 2002

Joined Impression Co., Ltd.

October 2004

Joined Recruit Co., Ltd.

April 2014

Executive Officer of Recruit Lifestyle Co.,

Term ofofficeNumber ofshares of theCompany held

*3

–

*3

–

Ltd.
April 2019

Director of Cross-divisional CRM
Promotion Office, Recruit Holdings Co.,Ltd.

June 2019
Director

Junko Watabe

June 27, 1977

External Director of the Company (current
position)

April 2020

Manager of ID Point Product Service
Development Department, Recruit Co.,
Ltd. (current position)
Manager of Cross-divisional CRM
Department (current position)

August 2020

Manager of Quality Coordination Office(currently Quality Management Office)(current position)

October 2020

External Director of Loyalty Marketing,
Inc. (current position)

January 2002

Joined Jenne Co., Ltd. (currently ABC
Cooking Studio Co., Ltd.)

October 2012

General Manager of Studio Strategy
Division

April 2013

Executive Vice President

July 2013

President and Representative Director

December 2014 Outside Director of DEF ANNIVERSARY
Co., Ltd.
July 2015

President and Representative Director of
ABC Cooking Studio KOREA Co., Ltd.

January 2017Manager in charge of Alliance, Partner
Business Planning Department, NTT
DOCOMO, INC.

June 2018

External Director of the Company (current

position)
December 2018 External Director of Toreta, Inc.

Director

Wakako Sakurai

February 2019

External Director of AI CROSS Inc.

February 2020

Director of AI CROSS Inc.

January 2021

President and Representative Director of

May 1, 1973

Plus W, Inc. (current position)
April 2021

Representative Director, You Meey K.K.
(current position)

June 2022

Executive Director/Manager in charge ofAlliance, Partner Business Planning
Department, NTT DOCOMO, INC.

July 2022

Executive Director/Manager of Customer
Success Department II, Smart Life
Business Company, NTT DOCOMO, INC.

May 2023

External Director, NTT DOCOMO Studio& Live Inc. (current position)

May 2023

Representative Director and President,
Plus W America Inc. (current position)

June 2023

Consulting Director for the Council forSports Ecosystem Promotion (current
position)

July 2023

Executive Director/General Manager ofEntertainment Platform Department, Smart
Life Business Company, NTT DOCOMO,
INC. (current position)―65―

TitleName

Date of birth

Past experience, positions and responsibility
in the Company(Significant concurrent positions)
April 2006
Involved in launching a new apparel brand

Term ofofficeNumber ofshares of theCompany held

*3

–

*4

–

*4

4,800

“Joias” and concurrently served as press
designer
April 2009Engaged in numerous main projects as
fashion editor for the women’s fashion
magazine “CanCam”

June 2011

Established own brand of wedding dress“heureux de Misato Kowaki.” Since then,worked as a stylist for popular artists,celebrities and actresses, and became incharge of publishing books and photobooks about them, in addition to working

Director

Misato Kowaki

October 23, 1983

as editor of “CanCam”
September 2015 Developed “Monotone Storage” in Seven& i Group
September 2016 Launched a project of Sanrio for women“TOKYO OTONA KITTY” and appointed
as Advisor
May 2020

Received the Best Mother Award in
Economic Category

August 2020

Appointed as Advisor, Female
Empowerment Advisor of Sabae City

October 2020

Established “MOTHERS Lab,” a web
media operated by active mothers
proposing a new era of lifestyle, andappointed as Chief Editor (to present)

June 2021

External Director of the Company (current
position)

April 1990

Joined the Industrial Bank of Japan, Ltd.
(currently Mizuho Bank, Ltd.).

August 1999

Joined DeNA (currently DeNA Co., Ltd.);
responsible for administration

Corporate Auditor(Standing)November 2005 Responsible for internal audits at the
Chika Otobe

September 4, 1965

President’s Office of the company
June 2006

Corporate auditor of the company

July 2012

Sole proprietor of a business entity
supporting startups

June 2021

Outside Auditor of the Company (current
position)

March 1979

Joined Jusco (now AEON CO).

November 1985 Joined Nomura Securities Co., Ltd.
July 1988

Joined Goldman Sachs Japan Co., Ltd.

November 1998 Managing Director of the company
August 2008

Representative Director of YUMECAPITAL Co., Ltd. (current position)
Representative Director of Itohan Japan
Co., Ltd. (current position)

Corporate Auditor(Non-Standing)

Yukihiro Moroe

July 18, 1955

June 2009

Outside Corporate Auditor of the Company(current position)

June 2011

External Director of IMM FOODSERVICE INC. (current position)

March 2014

External Director of SUMIDACORPORATION

September 2018 External Director of JOYFUL HONDA
CO., LTD.
November 2021 External Director of Rentio Inc. (current
position)―66―

TitleName

Past experience, positions and responsibility
in the Company(Significant concurrent positions)
October 2000 Registered as attorney-at-law

Date of birthTerm ofofficeNumber ofshares of theCompany held

*4

–

*4

–

Joined Nishimura & Partners (currently
Nishimura & Asahi)
March 2014

Established Kokubo Law Office

January 2017

Audit and Supervisory Committee memberof AOI TYO Holdings Inc. (nowKANAMEL Inc.)

Corporate Auditor(Non-Standing)January 2017
Takashi Kokubo

January 18, 1974

External Director of AZoom Co. Ltd.
(current position)

March 2017

Representative Director of Kokubo Law
Office (current position)

June 2019

External Director of Nice Corporation(current position)

June 2020

Outside Corporate Auditor of the Company(current position)

June 2023

Outside Corporate Auditor of TalentX Inc.
(current position)

October 2000

Joined Asahi & Co. (now KPMG AZSA
LLC)

February 2006

Joined GCA Corporation (now Houlihan
Lokey, Inc.)

February 2015

Representative Director of AIPartners, Inc.
(current position)

June 2017
Corporate Auditor(Non-Standing)Kengo Wada

Outside Corporate Auditor of ZIGExNCo., Ltd. (current position)

October 28, 1977

July 2017

Outside Corporate Auditor of Alue Co.,
Ltd. (current position)

February 2018

Outside Corporate Auditor of Cloud Ace,
Inc. (current position)

August 2023

Outside Corporate Auditor of Gunosy Inc.
(current position)

June 2024

Outside Corporate Auditor of the Company(current position)

Total

5,690,200

Notes:
1.

Mr. Mitsuyo Hanada, Mr. Hitoshi Tanaka, Ms. Junko Watabe, Ms. Wakako Sakurai, and Ms. Misato Kowaki are External Directors.

2.

Ms. Chika Otobe, Mr. Yukihiro Moroe, Mr. Takashi Kokubo, and Mr. Kengo Wada are Outside Corporate Auditors.

3.

From appointment on June 25, 2024 until the conclusion of the Regular General Meeting of Shareholders for the final business year ending within one
year thereafter

4.

From appointment on June 25, 2024 until the conclusion of the Regular General Meeting of Shareholders for the final business year ending within four
years thereafter5.

To further empower the Board of Directors, the Company has adopted an executive officer system intended to improve management efficiency byclearly separating the decision-making and business execution oversight functions of the Board of Directors and the business execution functions ofindividual business divisions.

Title
Executive Officers

Roles• Serving as business executive officers, responsible for performance KPIs in business domains for which they
are responsible or in charge, problem-solving through overall management operations, taking the lead on
implementation KPIs
• Responsible for reviewing matters submitted to the Management Committee and reviewing and proposing
important management topics

Managing Officers• Responsible for mission KPIs in their sections to which they can contribute through their own specializations• Responsible for drawing on their knowledge and networks in their areas of responsibility in support ofproblem-solving• Responsible for reviewing and proposing matters within the Management Committee and at Executive
Officer Meetings based on the agendas being considered―67―• The Company has 16 Executive Officers: Yusuke Tsutsumi, Hiroyuki Ozaki, Kohei Matsumoto (all three of whom serve concurrently as
Directors), Hiroto Yamashita, Hideto Ikeyama, Misaki Kan, Ayumu Shingu, Satoshi Ohki, Shingo Rikimaru, Satoko Fuji, Shinichi
Hamasaki, Sonoko Toukairin, Atsushi Komatsu, Ryo Kishimoto, Shigeru Kumano, and Yoshihiko Tomita.

(ii) External Directors
The Company has five External Directors and four External Corporate Auditors.
External Director Mitsuyo Hanada engages in oversight and advising based on his extensive insights on corporate management
as a whole, mainly from the human resource perspective, including HR development, as a professor emeritus of Keio University.
External Director Junko Watabe engages in oversight and advising based on her extensive insights on customer management
gained from her career with Recruit Co., Ltd., a major Company shareholder.
External Director Hitoshi Tanaka has served in a lengthy career as Representative Director and President of JINS Inc. and engages
in oversight and advising based on his wealth of experience and extensive insights as a manager.
External Director Wakako Sakurai has extensive experience with ABC Cooking Studio Co., Ltd. and offers a wealth of insights
into the food-related content business with NTT DOCOMO, INC., a major Company shareholder. She provides wide-ranging
advice and perspectives on Company management.
External Director Misato Kowaki has experience in various domains, including freelance planning, consulting, and publishingbooks relating to lifestyles, including food, clothing, and housing. Based on a consumer perspective, she provides the Company,
which is pursuing the creation of new value in fields related to food, with useful advice based on these experiences and insights.
External Corporate Auditor Chika Otobe strives to enhance the Company’s audit systems based on her wide range of insights on
external management support for various companies, in addition to experience gained as Corporate Auditor and in theadministrative and internal audit sections of a company traded on the first section of the stock exchange.
External Corporate Auditor Yukihiro Moroe strives to enhance the Company’s audit systems based on his specialized knowledge
and experience as a securities analyst.
External Corporate Auditor Takashi Kokubo strives to enhance the Company’s audit systems based on his specialized knowledge
and experience as an attorney at law.
External Corporate Auditor Kengo Wada strives to enhance the Company’s audit systems based on his specialized knowledge
and experience as a certified public accountant.
External Director Mitsuyo Hanada and External Corporate Auditor Yukihiro Moroe each own 4,800 shares of Company stock,
while External Director Hitoshi Tanaka owns 20,000 shares of Company stock. No other human, capital, or transactional
relationships or other special interests exist between the Company and its External Directors and External Corporate Auditors.
While the Company has not established clear standards or policies on independence in the selection of External Directors andExternal Corporate Auditors, the Company refers to the independence criteria established by the Tokyo Stock Exchange. On thatbasis, the Company has determined that each External Director and External Corporate Auditor is capable of exercising theappropriate oversight or audit activities based on his or her insights and specialized knowledge.
(iii) Cooperation between oversight or auditing by the External Directors or External Corporate Auditors and internal audit sections,
Corporate Auditors, and accounting auditor and their relationship to internal controls sections
Each of the five External Directors strives to improve the efficiency and efficacy of procedures based on the exchange of opinionswith management planning sections, HR planning sections, and administrative sections.
In addition, see “(3) Auditing” below concerning cooperation among internal auditing by the four External Corporate Auditors,
Corporate Auditor, and accounting auditor and their relationship to internal controls sections.

―68―

(3) Auditing(i)

Corporate Auditor auditinga. Organization and personnel
The Board of Auditors was established in June 2007 to enhance the Company’s audit functions. In June 2022, the number ofCorporate Auditors was increased by one. The Board of Auditors now consists of four Corporate Auditors (one Standing
Corporate Auditor and three Non-Standing Corporate Auditors). All Corporate Auditors meet the requirements for
Independent External Corporate Auditors.
The following Skills Matrix presents the qualities and skills (e.g., specializations, experience, discernment) of individual
Corporate Auditors. The Corporate Auditors carry out practical and effective audits of the performance of the duties of the
Directors based on their varied and diverse insights and perspectives.

Officer skills matrix
Notable skills are indicated by ●Properties
Nomination
Independent
andExternality
Age
officer
Remuneration
Committee

Name

Chika Otobe

●

58

●

Yukihiro
Moroe

●

●

Takashi
Kokubo●Kengo Wada●

GenderDuties, properties,
qualifications, etc.

Specialization, experience, knowledge
Sales,
Financial
ESG,
Term of Corporate Business marketing,Governance, accounting, Organizasustainaoffice management operation
product
compliance investment, tion, HRbilityplanning
markets

Female Management consulting

3

68

Male

Investment business
management

●

50

Male

Attorney

4

●

46

Male

Certified public accountant

0

(*)

15

●
●

●

●
●
●

●
●

●

●

●

●

* The Nomination and Compensation Committee consists of three Directors: Mitsuyo Hanada, Hitoshi Tanaka, and Kohey
Takashima. No Corporate Auditors are members. The Board of Auditors audits recommendations by the Committee andDirectors’ decisions based on these recommendations.

Addendum to the Officers’ Skills Matrix
Chika

As a founding member of a tech startup, she established its administrative and internal audit

Otobe

functions and guided its growth and IPO, eventually gaining appointment as Corporate Auditor.
Subsequently, drawing on the experience gained thereby, she provided support services for corporate
management, with a focus on startups. She offers a wealth of understanding of both the auditor andauditee sides in companies of varying types and scales. She provides practical and effective audit
services.

Yukihiro

He offers a wealth of knowledge of finance and accounting from the perspectives of corporate

Moroemanagement, external analysts, and markets in the retail and distribution sectors, the investment
business, and capital markets. Based on this background, he serves as outside officer with multiple
firms. He is ideally positioned to provide practical and effective audit services from an objective
perspective while understanding the vicissitudes and actual conditions of the Company since before
its listing on the Tokyo Stock Exchange.

Takashi

He offers extensive experience in corporate law as an attorney-at-law who launched his own law

Kokubooffice after serving with a major law office. He also offers a wealth of knowledge concerning financeand accounting, from his experience in management of an investment firm and serving as anExternal Director with multiple companies. He is ideally equipped to provide practical and effective
audit services based on these insights and experience.

Kengo

As a certified public accountant, he accumulated abundant experience and insights concerning

Wada

accounting. In addition to this advanced specialized knowledge, he has been involved in diverse
business scenarios involving mergers and acquisitions, investment, and financing operations. He is
ideally equipped to provide practical and effective audit services based on his wealth of knowledge
concerning finance and accounting.

―69―

b. Activities of the Board of Auditors
In accordance with audit plans and audit policies* determined by the Board of Auditors, each Corporate Auditor carries out
business audits and accounting audits by attending meetings of the Board of Directors and other important meetings,
exchanging opinions with Directors, performing on-site audits of important business sites, reviewing important approval
documents and other materials, and cooperating with the accounting auditor and the Internal Audit Office.
Important meetings attended by Corporate Auditors include Executive Officer Meetings and the Risk Management Committee.
In addition to attending regular weekly meetings of each of these bodies, they attend monthly general meetings of the Risk
Management Committee to check on the implementation and operational status of risk management systems.
On-site audits of business sites involve attending stock-taking and participating in on-site inspection at important logistics andmanufacturing facilities.
Corporate Auditors also interview individual sections based on annual plans, to ascertain the state of operations overall.
In cooperating with internal audit sections, they hold regular weekly meetings to check on the maintenance of internal controls
and the state of their operation.
* Audit policy
The basic policy consists of items (1) – (6) below.
1. Basic policy
By auditing the performance of the duties of the Directors in line with the Corporate Auditor Auditing Standards,
Company Corporate Auditors help establish a sound corporate governance system worthy of the trust of society, andthereby realize the corporate philosophy and create corporate value over the medium to long term to achievesustained growth.
(1) Ensuring the soundness of the Company through preventive audits(2) Audits focusing on management decision-making processes(3) Audits of the maintenance and operational status of internal controls systems(4) Formulation and declaration of the opinions of the Board of Auditors(5) Handling audits of the Group from the perspective of consolidated management(6) Enhancing audit systems through joint efforts with the accounting auditor and internal accounting sections
c. Management of the Board of Auditors
In addition to regular meetings (each lasting about one hour), held monthly in principle, the Board of Auditors holds
extraordinary meetings as necessary. It discusses and makes decisions on matters related to audits, based on the rules of theBoard of Auditors. Corporate Auditors also attend meetings of the Board of Directors and review matters such as the state of
the performance of duties of the Directors and resolutions of the Board of Directors.
Attendance by individual Corporate Auditors in meetings of the Board of Auditors and the Board of Directors during thebusiness year under review is shown below.

―70―

Name

Board of Auditors(Ref.)

meetings

Board of Directors

held/attended

meetings(extraordinary

held/attended

Content of statements, etc.

meetings)
Chika Otobe

17/17

14/14

(5/5)

Made statements as appropriate based on extensive
knowledge and experience concerning administrative andaudit sections at various companies.

Yukihiro Moroe

17/17

14/14

(5/5)

Made statements as appropriate based on extensive
knowledge and experience centered mainly on corporate
management and investment markets.

Takashi Kokubo

17/17

14/14

(5/5)

Made statements as appropriate based on extensive
knowledge and experience in posts, including work as an
attorney at law and as outside Director with othercompanies.

Kumi Kobayashi

17/16

14/14

(5/4)

Made statements as appropriate based on extensive
knowledge and experience in posts, including work as acertified public accountant and as outside Director withother companies.

Note: In addition to the above meetings, the Board of Directors passed six resolutions in writing.
d. Activities of the Board of Auditors
Shown below are key matters resolved by, consulted on, and reported to the Board of Auditors.
(Regular Board of Auditors meetings)
Resolutions(7 matters)

Audit policy, audit plans, and division of responsibilities, Board of Auditors audit reports,
consent to proposed appointment of Corporate Auditors, reappointment of the accounting
auditor, consent to audit remuneration for the accounting auditor, etc.

Consultation andreporting(33 matters)

Exchange of opinions on proposed resolutions of the Board of Directors; consulting on theaccounting auditor’s proposed audit policy and audit plans, the Board of Auditors’ proposed
audit reports, confirmation of proposed General Meeting of Shareholders resolutions, andkey audit matters (KAMs); status of risk management; quarterly reports on internal audits;status of Group management execution and internal controls at subsidiaries, etc.

In addition to the above, opinions were exchanged on two matters not on the agenda, concerning Company capital policies
and stock price measures.
(Extraordinary Board of Auditors meetings)
Five extraordinary Board of Auditors meetings were held during the business year, of the following two types:
1) Checking on the details of quarterly accounting audits (four times)
Held to field descriptions from the accounting auditor of the details of accounting audits and to check on and discussmatters as necessary.
2) Other extraordinary meetings (one time)
Held to demand explanations from Directors and to check related details in the event of new investments or other material
matters, in addition to the specific agenda of the Board of Auditors.
(ii) Status of internal audits
Conducted based on the internal audit rules, the Company’s internal audits are intended to investigate and assess the actual factsof the Company’s business operations and financial management, based on generally accepted auditing principles, and to offer
opinions and advice on measures to individual sections, thereby contributing to streamlined management and improved businessefficiency.

―71―

The Company’s Internal Audit Office oversees internal audits. Its four-person staff has the right to be granted assistance byappropriate internal personnel as necessary in line with internal audit rules.
The details, results, and other matters concerning internal auditing activities are reported to the Board of Directors. Cooperation
between internal auditors and Corporate Auditors or the accounting auditor proceeds as follows:
Internal auditors regularly exchange information with Corporate Auditors concerning matters such as the status of the internal
audit. They also report quarterly to the Board of Auditors on the status of the audit.
Exchange of information and opinions with the accounting auditor occurs through various activities, including attendance andexchange of information at quarterly meetings held by the accounting auditor to report the specifics of accounting audit activities(at extraordinary Board of Auditors meetings) and the exchange of opinions at other times as needed regarding audit concerns,
future topics, etc.
(iii) Status of accounting auditsa. Name of accounting auditor
Deloitte Touche Tohmatsu LLC
b. Period of continuous auditing
17 yearsc. CPAs involved in audit
Koichi Yano, Engagement Partner
Takeshi Sase, Engagement Partner
Kenji Oyama, Engagement Partner
d. Assisting staff in audit operations
17 CPAs, 29 other staff members
e. Policy on and reasons for selecting the audit firm
The Company’s policy on the selection of accounting auditors calls for a comprehensive judgment based on consideration ofmatters such as the professional networks and company scale capable of efficiently auditing the Company’s wide range ofbusiness lines, status of review systems, the suitability and efficacy of the audit plans, practical audit guidelines, reasonable
and appropriate audit costs, and auditing track record. Deloitte Touche Tohmatsu LLC meets all these conditions.
f. Assessment of the audit firm by the Corporate Auditors and the Board of Auditors
The Company Board of Auditors has assessed Deloitte Touche Tohmatsu LLC and found that its accounting auditing is
conducted properly.
Reappointment of the accounting auditor is subject to a resolution of the Board of Auditors, which includes overall evaluation
based on the Implementation Guidelines for Corporate Auditors and Others Regarding Formulation of Evaluation and
Selection Standards for Accounting Auditors, published by the Japan Audit & Supervisory Board Members Association.
(iv) Audit remuneration details, etc.
a. Remuneration of CPA auditors and other such parties
Previous consolidated fiscal year
Category

This consolidated fiscal year

Remuneration based on Remuneration based on Remuneration based on Remuneration based on
audit certification
non-audit operations
audit certification
non-audit operations
operations (million yen)(million yen)operations (million yen)(million yen)

Reporting Company

81

–

83

–

Consolidated subsidiaries

3

–

6

–

Total

84

–

89

–

―72―

b. Remuneration of organizations belonging to the same network as the CPA auditors (excluding remuneration under a above)
Previous consolidated fiscal year
Category

This consolidated fiscal year

Remuneration based on Remuneration based on Remuneration based on Remuneration based on
audit certification
audit certification
audit certification
non-audit operations
operations (million yen) operations (million yen) operations (million yen)(million yen)

Reporting Company

–

8

–

–

Consolidated subsidiaries

–

–

–

–

Total

–

8

–

–

Details of non-audit operations for the Company in the previous consolidated fiscal year and this consolidated fiscal year consistof advising related to IT environmental evaluations of a prospective acquisition.
c. Details of remuneration based on other important audit certification operations(Previous consolidated fiscal year)
Not applicable(This consolidated fiscal year)
The Company’s consolidated subsidiary SHiDAX Corporation paid remuneration to KPMG AZSA LLC based on audit
certification operations.
d. Policy on decisions on audit remuneration
The Company’s policy on decisions concerning audit remuneration for CPA auditors and other such parties calls for aconsideration of matters such as the audit plans, audit details, and number of days required for the audit as proposed by
Deloitte Touche Tohmatsu LLC; consultations between the Company and the audit firm; and the consent of the Board ofAuditors.
e. Reasons for the Board of Auditors’ consent to remuneration, etc. of the accounting auditor
The Company’s Board of Auditors has granted consent pursuant to Article 399, Paragraph 1 of the Companies Act to the
remuneration, etc. of the accounting auditor proposed by the Board of Directors because it has judged the specifics of theaudit plan proposed by Deloitte Touche Tohmatsu LLC, its performance of accounting audit duties, its remuneration estimates,and other matters to be appropriate in light of the specifics and scale of the Company’s businesses.
(4) Officer remuneration, etc.
(i)

Policy on decisions related to details of individual Directors’ remuneration, etc.
This policy was determined by the Board of Directors at its February 25, 2021 meeting and revised as necessary following theestablishment of the Nomination and Compensation Committee by the Board on May 26, 2022.
Policy on decisions related to details of individual Directors’ remuneration, etc.
1. Basic policy
The basic policy on remuneration for Company Directors calls for consideration of factors such as
the responsibilities and performance of each Director, with the goal of incentivizing actions that
increase corporate value.
Specifically, only fixed remuneration is paid, determined based on position, duties, results in eachperiod, and levels at other companies.
2. Policy on decisions concerning base remuneration for individual Directors (monetary
remuneration) (Including policy on decisions concerning the timing or conditions of providing
remuneration, etc.)
Decisions concerning base remuneration for Company Directors are based on consideration ofvarious factors, including position, duties, and the results for each period, within the scope of thetotal amount determined at the General Meeting of Shareholders, as fixed monthly pay.
3. Matters related to details of remuneration, etc. for individual Directors
Decisions concerning the details of remuneration amounts for individual Directors shall be madeby the President and Representative Director based on a Board of Directors resolution. Thisauthorization sets amounts of base remuneration.
To exercise this authority of the President and Representative Director appropriately,
Representative Director shall make decisions based on deliberations at the Nomination andCompensation Committee.

―73―

(ii) Matters related to the delegation of decisions concerning details of remuneration, etc. for individual Directors
Representative Director Kohey Takashima makes decisions concerning the specific details of remuneration amounts forindividual Directors of the Company based on a Board of Directors resolution delegating such authority.
The scope of this authority involves the preparation of preliminary figures and determining remuneration based on deliberations
at the Nomination and Compensation Committee.
This authority is delegated to Representative Director Kohey Takashima because he, as founder, can be expected to ascertain andunderstand the Company’s businesses, human resources, and organization as a whole and to make objective decisions in light of
his other duties including serving as an outside director of other companies and as a director of various associations.
(iii) Reasons why the Board of Directors has determined that the details of remuneration, etc. for individual Directors conform to
the decision policy
Since a majority of the three-person membership of the Nomination and Compensation Committee (Outside Director Mitsuyo
Hanada who is highly knowledgeable concerning human-resources organizations, serving as chairperson, Outside Director
Hitoshi Tanaka who possesses a wealth of experience and wide-ranging insights as a manager, and Representative Director Kohey
Takashima) consists of two independent External Directors, the content of its deliberations is considered to be objectively valid
and reliable. Decisions concerning remuneration, etc. are considered to conform to the above decision policy because they are
made based on the deliberations at the Nomination and Compensation Committee.
(iv) Total amounts of remuneration, etc. by officer category, total amounts by remuneration type, etc., and numbers of eligible
officers

Officer category

Total amount of
remuneration,etc.
(million yen)

Directors(excluding External Directors)
Corporate Auditors(excluding External Corporate
Auditors)
External officers

Total amount by remuneration type, etc. (million yen)Fixed
remuneration

Performance-linked
remuneration

Number of
eligible officers

Retirement
benefits

147

147

–

–

4

–

–

–

–

–

51

51

–

–

9

* The General Meeting of Shareholders passed a resolution on Company officer remuneration and related matters on June 21, 2012.
This resolution specifies the maximum (annual) remuneration of 300 million yen for Directors and 60 million yen for Corporate
Auditors.
(v) Total amounts, etc. of remuneration, etc. for persons for whom such amounts are equal to or greater than 100 million yen
Omitted because no persons earn total amounts of remuneration, etc. equal to or greater than 100 million yen.
(vi) Important employee salaries of officers serving concurrently as employees
No material matters to report―74―

(5) Shareholdings(i)Standards and outlook on categories of investment shares
The Company groups investment shares into the categories of investment shares held purely for investment purposes andinvestment shares held for other than purely investment purposes by assigning investments intended to receive gains fromfluctuations in share prices or dividends on shares into the former category and others into the latter category.

(ii) Investment shares held for other than purely investment purposesa. Policy on shareholdings, methods of verifying the reasonability of shareholdings, and details of verification by the Board of
Directors or others of whether or not to hold individual issues
The Company holds shares of stock in other companies as it judges necessary as part of its management strategies on businessalliances and other matters and to develop positive relations with trading partners and facilitate smooth business operations.
The Company Board of Directors regularly verifies the meaning and reasonableness of the purposes of holding individual
issues and the benefits gained from such holdings. As necessary, it considers measures such as the sale of shares that do notcontribute to corporate value over the medium to long term.
b. Number of issues and total amount recorded on the balance sheet
Number ofissuesTotal amount recorded onbalance sheet (million yen)

Unlisted shares

16

297

Shares other than unlisted
shares1542(Issues for which the number of shares increased during the business year)
Number ofissuesTotal acquisition price ofincrease in number of shares(million yen)

Reason for increase in number of shares

Unlisted shares

1

230

Acquisition of shares intended tostrengthen transaction relations in seafood
products

Shares other than unlisted
shares–––(Issues for which the number of shares decreased during the business year)
Number ofissuesTotal sale price for shares sold(million yen)

Unlisted shares

1

6

Shares other than unlisted
shares––―75―

c. Number of shares by issue, total amount recorded on the balance sheet, etc. for specified investment shares and imputed
shareholdings
Specified investment shares

Issue

Current business year

Previous business year

SharesSharesTotal amount recordedon balance sheet(million yen)
562,100

Total amount recordedon balance sheet(million yen)
562,100

Purpose of holding, summary ofbusiness alliance, etc.,
quantitative effects of holding,and reason for increase in shares

Does theissuer holdshares in the
Company?

The Company has concluded
with the issuer an agreement
concerning a business allianceintended for purposes such asenhancing purchasing functions
AP HOLDINGS
for sustainable unused fish andNCO., LTD.
542
417 other marine resources. The
issuer and the Company jointly
manage Toyosu Gyosho
Sanchoku Ichiba, whichpurchases seafoods directlyfrom producers.
Note: Quantifying the effects of holding is difficult. The rationale for holding the shares is assessed by the method describedunder (ii) a above.
(iii) Investment shares held purely for investment purposes
Not applicable―76―Section 5. Accounting
1. Methods of preparing consolidated and nonconsolidated financial statements(1) The Company’s consolidated financial statements are prepared based on the Regulation on Terminology, Forms and Preparation
Methods of Consolidated Financial Statements (Ministry of Finance Order No. 28 of 1976).
(2) The Company’s nonconsolidated financial statements are prepared based on the Ordinance on the Terminology, Forms, andPreparation Methods of Financial Statements, etc. (Ordinance of the Ministry of Finance No. 59 of 1963; “Ordinance on Financial
Statements, etc.” hereinafter).
As a special company submitting financial statements, the Company prepares its financial statements in accordance with theprovisions of Article 127 of the Ordinance on Financial Statements, etc.
2. Audit verification
The Company has undergone audit verification by Deloitte Touche Tohmatsu LLC pursuant to the provisions of Article 193-2,
Paragraph 1 of the Financial Instruments and Exchange Act of its consolidated financial statements for the consolidated fiscal year
from April 1, 2023 through March 31, 2024 and its nonconsolidated financial statements for the business year from April 1, 2023
through March 31, 2024.
3. Special measures to ensure the propriety of consolidated financial statements, etc.
The Company takes specific measures to ensure the propriety of the consolidated financial statements. Specifically, to maintain astructure capable of adequately ascertaining the details of accounting standards and other matters and preparing appropriate
consolidated financial statements, it maintains membership in the Financial Accounting Standards Foundation (FASF) and strives tocollect information through means such as participating in seminars held by the FASF.

―77―

1. Consolidated financial statements, etc.
(1) Consolidated financial statements(i) Consolidated Balance Sheet(Million yen)
As of March 31, 2023

As of March 31, 2024

AssetsCurrent assets
Cash and deposits*2 14,775*2 29,649

–

*3 57

Accounts receivable–trade

9,626

24,879Merchandise and finished goods

1,802

2,438

77

125

Raw materials and supplies

599

1,595

Accounts receivable–other

3,147

1,553

Other

886

1,713

Allowance for doubtful accounts

(234)

(285)

Total current assets

30,68061,728Notes receivable–trade

Work in process

Non-current assets
Property, plant and equipment
Buildings and structures

2,027

3,667

Accumulated depreciation(858)(1,825)
1,842

Buildings and structures, net

1,168

Machinery, equipment and vehicles

2,857

5,023

Accumulated depreciation(737)(2,548)

Machinery, equipment and vehicles, net

2,120

2,475

13,29622,030

Accumulated depreciation(1,655)(2,576)

Leased assets, net

11,641

19,453

Construction in progress

943

1,585

Other

932

2,289

Accumulated depreciation(407)(1,246)

Other, net

524

1,043

16,39926,400–25,655

Goodwill

1,190

14,794

Other

2,419

3,081

Total intangible assets

3,609

43,531

Investment securities*1 11,450*1 3,339

Leasehold and guarantee deposits

Leased assets

Total property, plant and equipment
Intangible assets
Customer-related assets

Investments and other assets*2 1,432*2 2,595

Deferred tax assets

788

5,132

Other

139

*1 1,073

Allowance for doubtful accounts

–

(74)

Total investments and other assets

13,812

12,06733,82182,00064,502

143,728

Total non-current assets
Total assets―78―

(Million yen)
As of March 31, 2023

As of March 31, 2024

Liabilities
Current liabilities
Accounts payable–trade
Short-term borrowings
Current portion of long-term borrowings
Lease liabilities*2 6,309*2 11,159*4 10,060*4 15,045

27

2,166

705

1,270

Accounts payable–other

5,914

15,938

Accrued expenses

1,074

8,924

Income taxes payable

831

3,224

Contract liabilities

397

505

Provision for bonuses

–

1,552

Provision for point card certificates

80

87

Asset retirement obligations

–

32

Other

831

2,968

Total current liabilities

26,23162,875

Non-current liabilities
Long-term borrowings*4 74*2,4 14,648

11,293

18,598

Lease liabilities
Asset retirement obligations

554

942

Deferred tax liabilities

21

8,911

Other

185

331

12,13043,43238,361

106,307

Shareholders’ equity
Share capital

3,995

3,995

Capital surplus

8,016

8,021

Total non-current liabilities
Total liabilities
Net assets

Retained earnings

16,255

20,376

Treasury shares(4,503)(4,504)

Total shareholders’ equity

23,76427,890155

245

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

677

934

Total accumulated other comprehensive income

832

1,179

Share acquisition rights–

38

Non-controlling interests

1,542

8,312

Total net assets

26,14037,42064,502

143,728

Total liabilities and net assets―79―

(ii) Consolidated Statement of Income and Comprehensive Income
Consolidated Statement of Income(Million yen)
Fiscal Year ended
March 31, 2023
Net sales

Fiscal Year ended
March 31, 2024

*1 115,176*1 148,408

Cost of sales

59,74086,542Gross profit

55,436

61,865*2 52,089*2 56,721

3,346

5,144

0

1

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

04Compensation income

16

19

Subsidy income–

70

Gain on investments in investment partnerships

–

84

Other

67

74

Total non-operating income

84

255

125

236

Commission for syndicated loans–

537

Foreign exchange losses

8

65

Share of loss of entities accounted for using equity method

113

24

Loss on investments in investment partnerships

356

–

Other

17

95

Non-operating expenses
Interest expenses

Total non-operating expenses

620

960

2,810

4,438

Gain on sale of investment securities–

6

Gain on step acquisitions

–

3,447

Total extraordinary income

–

3,453

Ordinary profit
Extraordinary income

Extraordinary losses
Retirement benefits for directors (and other officers)

–

1,002

Impairment losses*3 14*3 420Loss on valuation of investment securities

143

53

Total extraordinary losses

158

1,475

Profit before income taxes

2,652

6,416

Income taxes–current

1,335

3,259

Income taxes–deferred

(137)

(425)

Total income taxes

1,198

2,834

Profit

1,454

3,582

Profit (loss) attributable to non-controlling interests

(353)

(538)

Profit attributable to owners of parent

1,807

4,120

―80―

Consolidated Statement of Comprehensive Income(Million yen)
Fiscal Year ended
March 31, 2023
ProfitFiscal Year ended
March 31, 2024
1,454

3,582

Valuation difference on available-for-sale securities

340

(107)

Foreign currency translation adjustment
Share of other comprehensive income of entities accounted
for using equity method

514

(94)

9

16

* 865

* (185)

2,319

3,397

2,462

4,106

(143)

(709)

Other comprehensive income

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests―81―

(iii) Consolidated Statement of Changes in Shareholdersʼ Equity
Fiscal Year ended March 31, 2023
(Million yen)
Shareholders’ equity
Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity

3,994

8,015

14,448(4,503)

21,954

1

1

Share capital
Balance at beginning of
periodChanges during period
Issuance of new shares
Profit attributable toowners of parent
Purchase of treasury
sharesCapital increase of
consolidated subsidiaries
Net changes in items
other than shareholders’equityTotal changes during
periodBalance at end of period

2
1,807

1,807
(0)

(0)
–

1

1

1,807

(0)

1,809

3,995

8,016

16,255(4,503)23,764

Accumulated other comprehensive income

Balance at beginning of
periodValuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
incomeShare acquisitionrightsNon-controllinginterests

Total net assets

16

160

177

–

1,739

23,872

Changes during period
Issuance of new shares

2

Profit attributable toowners of parent
Purchase of treasury
sharesCapital increase of
consolidated
subsidiaries
Net changes in items
other than shareholders’equityTotal changes during
period1,807

Balance at end of period

(0)
–

138

516

654

–

(196)

458

138

516

654

–

(196)

2,267

155

677

832

–

1,542

26,140―82―

Fiscal Year ended March 31, 2024
(Million yen)
Shareholders’ equity
Share capital
Balance at beginning of
period3,995

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity8,016

16,255(4,503)23,764

Changes during period–

Issuance of new shares
Profit attributable toowners of parent
Purchase of treasury
sharesChange of shares of
consolidated
subsidiaries
Net changes in items
other than shareholders’equityTotal changes during
periodBalance at end of period

4,120

4,120
(0)

4

(0)
4

–

4

4,120

(0)

4,125

3,995

8,021

20,376(4,504)27,890

Accumulated other comprehensive income

Balance at beginning of
periodValuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total accumulated
othercomprehensive
incomeShare acquisitionrightsNon-controllinginterests

Total net assets

155

677

832

–

1,542

26,140Changes during period
Issuance of new shares–

Profit attributable toowners of parent
Purchase of treasury
sharesChange of shares of
consolidated
subsidiaries
Net changes in items
other than shareholders’equityTotal changes during
period4,120

Balance at end of period

(0)
4

89

256

346

38

6,770

7,154

89

256

346

38

6,770

11,280

245

934

1,179

38

8,312

37,420―83―

(iv) Consolidated Statement of Cash Flow
(Million yen)
Fiscal Year ended
March 31, 2023
Cash flows from operating activities
Profit before income taxes
Depreciation

Fiscal Year ended
March 31, 2024
2,652

6,416

1,985

2,614

Amortization of goodwill

263

495

Impairment losses

14

420

Loss (gain) on valuation of investment securities

143

53

Increase (decrease) in allowance for doubtful accounts

235

Increase (decrease) in provision for bonuses–

778Interest and dividend income

(0)

(6)

Interest expenses

125

236

–

537

Commission for syndicated loans
Share of loss (profit) of entities accounted for using equity
methodLoss (gain) on investments in investment partnerships

113

24

356

(84)

Decrease (increase) in trade receivables

(660)

363

Decrease (increase) in accounts receivable–other

(220)

1,626

Decrease (increase) in consumption taxes refund receivable

367–

Decrease (increase) in inventories

144

33

Increase (decrease) in trade payables

55

(648)

Loss (gain) on sale of investment securities–(6)

Subsidy income

–

(70)

Gain on step acquisitions–(3,447)

Increase (decrease) in accounts payable–other217(1,079)

Increase (decrease) in contract liabilities

146

(673)

Increase (decrease) in accrued expenses

(12)

858

Other, net

489

626

Subtotal

6,184

9,106

1

162

Interest paid

(125)

(237)

Payments into deposit money

800–

Proceeds from repayment of deposit money

(800)

–

Income taxes paid

(752)

(1,358)

Subsidies received–

71

Proceeds from compensation for damage–

19

Expenses related to research financial statements paid

–

(41)

5,306

7,722

(1,228)(1,623)

Interest and dividends received

Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities(848)(1,159)(10,222)

(997)

100

369

Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Payments of leasehold and guarantee deposits–*2 (7,217)

(422)

(173)

Proceeds from refund of leasehold and guarantee deposits

503

4

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

―84―

(17)

(18)

(12,135)(10,815)

(Million yen)
Fiscal Year ended
March 31, 2023
Cash flows from financing activities
Net increase (decrease) in short-term borrowings

Fiscal Year ended
March 31, 2024
9,050

4,984

Proceeds from long-term borrowings–

16,201

Repayments of long-term borrowings(39)(2,276)

Proceeds from issuance of shares

2–

Proceeds from share issuance to non-controlling shareholders

37

562

Refund from non-controlling interest

(92)

(362)

Purchase of treasury shares

(0)

(0)

Repayments of lease liabilities

(692)

(832)

Commission for syndicate loan

–

(540)

Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

―85―

–

(0)

8,265

17,735

250

77

1,686

14,72013,033

14,720*1 14,720*1 29,440

Notes(Important matters serving as bases for the preparation of the consolidated financial statements)
1. Notes on scope of consolidation(1) Number and names of consolidated subsidiaries
Number of consolidated subsidiaries: 32 companies
Names of important consolidated subsidiaries
Tokushimaru Inc.
Oisix Hong Kong Co., Ltd.
Fruit Basket Co., Ltd.
Karabiner Inc.
Crazy Kitchen Co., Ltd.
Oisix Inc.
Three Limes, Inc. (aka, The Purple Carrot)
Future Food Fund Co., Ltd.
Future Food Fund No. 1 investment limited partnership
Future Food Fund No. 2 investment limited partnershipToyosu Gyosho Sanchoku Ichiba
Future Food Lab Co., Ltd.
YOKO Street, INC.
nonpi, Inc
AGRIGATESHIDA Holdings Corporation (now SHiDAX Holdings Corporation)
SHiDAX Corporation
SHiDAX CONTRACT FOOD SERVICE CORPORATION
SHiDAX FOOD SERVICE CORPORATIONSLOGIX CORPORATIONSITEX CORPORATION
SHiDAX OFFICE PARTNER CORPORATION
SHiDAX SPORTS AND CULTURE CORPORATION
SHiDAX FOOD SERVICE HOKKAIDO CORPORATION
Kokunai Food Service Corporation
Shunsai Corporation
DAISHINTO Inc.
SHiDAX DAISHINTO HUMAN SERVICE Inc.
Four other companies
The 18 companies of SHIDA Holdings Corporation and its 14 subsidiaries, YOKO Street, INC., and nonpi, Inc are includedin the scope of consolidation from the consolidated fiscal year under review because their shares were acquired during theyear.
While AGRIGATE and SHiDAX Corporation had been included in the scope of consolidation as equity method affiliates, they
qualify as consolidated subsidiaries from the consolidated fiscal year under review due to the acquisition of additional shares.
(2) Names of nonconsolidated subsidiaries
Number of important nonconsolidated subsidiaries: 5 companies
Names of important nonconsolidated subsidiaries
Tamano School Meal Service Co., Ltd.
Kunitachi Izumi School Meal Service Co., Ltd.
Nomura School Meal Service Co., Ltd.
Machida Middle School Meal Service Co., Ltd.
Uruma Ishikawa School Meal Service Co., Ltd.
(Reasons for exclusion from scope of consolidation)
The nonconsolidated subsidiaries are excluded from the scope of consolidation due to the small scale of their operations andbecause each of their financial figures, such as total net assets, net sales, net income, and retained earnings (amount equivalent
to equity) has no material effect on the consolidated financial statements.
2. Notes on application of the equity method(1) Number and names of equity method affiliates
Number of equity method affiliates: 5 companies
Names of important equity method affiliates
Nihon Agri, Inc.
WELCOME Co., Ltd.
Niigata Albirex Baseball Club Co., Ltd.
Two other companies―86―

Niigata Albirex Baseball Club Co., Ltd. has been included in the scope of application of the equity method beginning with theconsolidated fiscal year under review, since its shares were newly acquired.
(2) Names of important companies, etc. among nonconsolidated subsidiaries and affiliates to which the equity method is not applied
Names of important companies
Tamano School Meal Service Co., Ltd.
Kunitachi Izumi School Meal Service Co., Ltd.
Nomura School Meal Service Co., Ltd.
Machida Middle School Meal Service Co., Ltd.
Uruma Ishikawa School Meal Service Co., Ltd.
Funs AP Corp.
SHiDAX Hospitality Management Corporation
Chofu FM Co., Ltd.
e-Kaigo Network Cooperative Association
Ootakanomori PFI Co., Ltd.
Horigane School Meal Service Co., Ltd.
SHIDAX STAR FESTIVAL CORPORATION(Reason for not applying the equity method)
Companies, etc. to which the equity method is not applied are excluded from application of the equity method due to lack ofmateriality because the scale of their operations is small and their net profit/loss after offsetting transactions with consolidated
companies (amount equivalent to equity) and retained earnings (amount equivalent to equity) have negligible overall effects on
the consolidated financial statements.
(3) Particular notes concerning procedures for application of the equity method
For companies among those to which the equity method applies whose fiscal years end on dates other than the end of theconsolidated fiscal year, nonconsolidated financial statements based on provisional settlement of accounts as of the end of theconsolidated fiscal year are used in preparation of the consolidated financial statements.
3. Notes concerning the business years, etc. of consolidated subsidiaries
Among the consolidated subsidiaries, the fiscal years for Oisix Shanghai Co., Ltd., Oisix Inc., Three Limes, Inc., YOKO Street, INC.,
and Future Food Fund No. 2 investment limited partnership end on December 31. The fiscal year for nonpi, Inc ended on February 29
and that of AGRIGATE on November 30.
In preparing the consolidated financial statements, for Oisix Shanghai Co., Ltd., Oisix Inc., Three Limes, Inc., YOKO Street, INC.,
and nonpi, Inc, we used the nonconsolidated financial statements as of the date of the settlement of accounts and made the necessary
adjustments in the consolidation of accounts for any material transactions arising between that date and the end date of the consolidated
fiscal year. For Future Food Fund No. 2 investment limited partnership, the nonconsolidated financial statements based on provisional
settlement of accounts as of the end date of the consolidated fiscal year were used. For AGRIGATE, the nonconsolidated financial
statements based on provisional settlement of accounts as of February 29 were used; necessary adjustments were made in consolidationof accounts for any material transactions arising between that date and the end date of the consolidated fiscal year.
For other consolidated subsidiaries, the end date of the business year coincides with the end date of the consolidated fiscal year.

4. Notes on accounting policies(1) Valuation standards and methods for important assets(i)Securities
Available-for-sale securitiesThose other than stocks, etc. with no fair market value
The fair value method is employed. (The entire amount of any difference in valuation is recorded in net assets. Cost of
sales is calculated by the moving average method.)
Stocks, etc. with no fair market value
The moving average cost method is employed.

―87―

(ii) Inventories
The Company primarily employs the moving average cost method (with amounts on the balance sheet calculated by decreasing
book value in accordance with reductions in profitability), the FIFO cost method (with amounts on the balance sheet calculated
by decreasing book value in accordance with reductions in profitability), and the gross average cost method (with amounts on
the balance sheet calculated by decreasing book value in accordance with reductions in profitability).
(2) Depreciation method for important depreciable assets(i)

Property, plant, and equipment (excluding leased assets)
The straight line method is employed.
The main useful lives are shown below:
Buildings and structures: 2–29 years
Machinery, equipment, and vehicles: 1–12 years(ii) Intangible assets (excluding leased assets)
The straight line method is employed.
Software used by the Company is depreciated based on useful life within the Company (up to five years). Customer-related
assets are depreciated based on the periods affected by the assets (5–27 years).
(iii) Leased assets
Leased assets related to finance lease transactions involving transfer of ownership:
Depreciated by the same method applied to property, plant, and equipment owned by the Company.
Leased assets related to finance lease transactions other than those involving transfer of ownership:
Depreciated by the straight line method using the lease period as the useful life and a residual value of zero.
(3) Accounting for significant allowances and provisions(i)

Allowance for doubtful accounts
To be prepared for possible losses on doubtful claims, the Company and its consolidated subsidiaries provide for this allowancebased on the actual rate of losses from bad debts for general receivables and anticipated amounts unrecoverable based on acase-by-case assessment of recoverability for specific claims, such as those with the potential for default and claims inreorganization.

(ii) Provision for loyalty points
To provide for the use of points awarded to customers as Action Points based on the loyalty point program intended as a sales
promotion measure, the anticipated future usage amount as of the end of the current fiscal is recorded.
(iii) Provision for bonuses
Certain consolidated subsidiaries record the estimated amount of bonuses paid, to be prepared for payment of bonuses to
employees.
(4) Accounting standards for significant revenues and expenses
The Group recognizes revenues in the amounts expected in exchange for the promised goods or services as of the time theircontrol transfers to the customer.
The details of main performance obligations and the normal timing of recognition of revenues in main businesses are as describedunder “(Revenue recognition).”(5) Standards for conversion of significant foreign-currency claims and obligations to yen
Foreign-currency claims and obligations are converted to yen at spot market exchange rates as of the date of the consolidated
settlement of accounts, with any gains or losses on conversion recorded as profit or loss. Assets and liabilities of overseas
subsidiaries are converted to yen at spot market exchange rates as of the date of the consolidated settlement of accounts. Revenues
and expenses are converted to yen at the average market exchange rate during the period. Any gains or losses on conversion arerecorded as foreign currency translation adjustment(s) under net assets.

―88―(6) Amortization method and period for goodwill
Goodwill is amortized by the straight line method over a period of 4–20 years.
(7) Scope of funds included on the consolidated statement of cash flows
Funds included on the consolidated statement of cash flows consist of cash on hand, demand deposits, and short-term investmentswith maturities of three months or less from the date of acquisition that can readily be converted to cash and are subject toinsignificant risk of fluctuations in value.
(8) Other important matters related to preparation of the consolidated financial statements
Method of processing deferred assets
Share issuance costs
The entire amount of share issuance costs is recorded as expenses at the time of payment.

―89―

(Significant accounting estimates)
Shown below are the accounts that involved particularly significant accounting estimates on the consolidated financial statements.
1. Amortization of goodwill on Three Limes, Inc.
(1) Amount recorded on the consolidated financial statements for the consolidated fiscal year under review(Million yen)Previous consolidated
fiscal year
Goodwill

This consolidated
fiscal year

1,190

615

An amortization loss of 372 million yen was recognized on the above goodwill in this consolidated fiscal year.
(2) Details of significant accounting estimates on the account recognized(i)Calculating the amount to be recorded on the consolidated financial statements for the consolidated fiscal year underreview
The American subsidiary Three Limes, Inc. applies US GAAP. It employs an impairment test for assets that show signs of
impairment. Impairment testing is conducted per reporting unit. If the impairment test shows that the fair value of a reported
unit is less than its book value, the book value is reduced to the fair value and an impairment loss is recorded in the amountof this reduction.
During the consolidated fiscal year under review, various factors, including the state of achievement of results compared tothe business plans on which value was calculated during acquisition were judged to show signs of impairment. Thus, animpairment loss was recognized and recorded based on the fair value under the most recent business plans.

(ii) Major assumptions underlying calculations of amounts to be recorded to consolidated financial statements for the
consolidated fiscal year under review
Fair value of goodwill is measured based on future discounted cash flow calculated based on business plans and the discountrate. The major assumptions are indicated below.
Major assumption

Details

Projected inflation for the US

Various costs, including those of raw materials, labor, and fuel, are expected to rise.

Expanding the product lineup and

The product sales mix is expected to improve, while the numbers of units sold per order are

increasing the numbers ofprojected to increase.

products handled
Increase in sales of businesses

Sales of businesses other than home grocery delivery are projected to show increasing numbers ofother than home grocery delivery

contracts, mainly in the BtoB business, through sales of frozen foods to the retail business andpromotional contracting through including samples of other companies’ products.

Control of purchase prices

Price controls are expected to be achieved through weekly bidding, setting quarterly fixed prices
for raw materials involving major price fluctuations, and the normalization of purchase lots using
processing vendors capable of accommodating small lot purchases.

Reductions in waste costs

Waste costs are projected to decrease through more efficient use of raw materials

Reductions in logistics costs

The consolidation of logistics centers is expected to result in purchasing and inventory adjustments(center expenses and delivery

and reductions in procurement, delivery, and other work costs and in facilities maintenance costs.

costs)
Discount rate

In consideration of the stage of Three Limes, Inc. on the business life cycle, the rate was chosen
based on the American Institute of CPAs (AICPA) accounting and valuation guide for startups.

(iii) Impact on consolidated financial statements for the subsequent consolidated fiscal year
Since the assumptions made for these estimates involve uncertainties related to the economic and business conditions underwhich Three Limes, Inc. operates and the business conditions of Three Limes, Inc., there is a possibility that impairment
loss may be recognized in the subsequent consolidated fiscal year if revisions are required.

―90―

2. Evaluation of goodwill and customer-related assets associated with SHiDAX Corporation(1) Amount recorded on the consolidated financial statements for the consolidated fiscal year under review(Million yen)Previous consolidated
fiscal year

This consolidated
fiscal year

Goodwill–

12,815

Customer-related assets–

25,655

No impairment losses occurred in the consolidated fiscal year under review in connection with the goodwill and customerrelated assets above.
(2) Details of significant accounting estimates on the accounts recognized(i)Calculating the amounts to be recorded on the consolidated financial statements for the consolidated fiscal year underreview
The cost of acquisition is allocated based on the current value of those assets received and accepted liabilities that may be
identified as of the imputed date of acquisition, and the difference between the cost of acquisition and allocated amounts ofthe cost of acquisition is recorded as goodwill. The valuation model for customer-related assets is the excess-earnings
method of the income approach.

(ii) Major assumptions underlying calculations of amounts recorded to consolidated financial statements for the consolidated
fiscal year under review
Customer-related assets are calculated based on business plans and other considerations. Any differences in amounts arerecorded as goodwill. Major assumptions employed in these calculations are the rate of growth in sales, the rate of decline
in the customer base, and the discount rate.
Major assumption
Rate of growth in sales

Details
Projected with consideration mainly for the rate of growth in sales based on actual performanceover the past five years.
Projected based on the actual rate of decline in the customer base by business over the past five

Rate of decline in the customer
base

years.
Useful lives of customer-related assets are determined based on the rate of decline in the customer
base. The amortization period of goodwill is determined based on a consideration for consistency
with these useful lives.

Discount rate

Determined based on WACC and risk premium(iii) Impact on consolidated financial statements for the subsequent consolidated fiscal year
The valuation of goodwill and customer-related assets and the useful lives or amortization period of these may significantly
impact the consolidated financial statements for the subsequent consolidated fiscal year due to the economic and businessconditions under which SHiDAX Corporation operates.

3. Recoverability of deferred tax assets(1) Amount recorded on the consolidated financial statements for the consolidated fiscal year under review(Million yen)Previous consolidated
fiscal year
Deferred tax assets

This consolidated
fiscal year

788

―91―

5,132

(2) Details of significant accounting estimates on the account recognized(i) Calculating the amount to be recorded on the consolidated financial statements for the consolidated fiscal year underreview
Deferred tax assets are recognized within the scope of future temporary differences in deductions and tax deficits carriedover that appear likely to reduce future tax burdens.
Since certain consolidated subsidiaries use the group tax-sharing system, the recoverability of deferred tax assets isdetermined based on estimated future amounts of taxable income deduced from past taxable income and the applicable
periods of estimation of future taxable income of this group of consolidated subsidiaries.
(ii) Major assumptions underlying calculations of amounts recorded to consolidated financial statements for the consolidated
fiscal year under review
Estimates of taxable income are based on future income plans, the major assumptions underlying which are inflation andrising wages.
Major assumption

Details
Estimates of costs increases, primarily for materials like food materials and consumables, arebased on rates of change in purchase prices from the start of the period to the time of formulating

Inflationplans for the most recent month (January 2024) for food materials, by category, and on
procurement prices as of the time of formulating plans for consumables, by each item. These areincorporated into estimates of cost increases for the same fiscal year.

Rising wages

Minimum wages are projected to rise, and wages are expected to increase in accordance withincreased hiring under staffing plans formulated in line with business strategies.

(iii) Impact on consolidated financial statements for the subsequent consolidated fiscal year
While judgments are based on assumptions considered reasonable based on current conditions and information available,
there is a possibility that they may be affected by changes in assumptions such as inflation and rising wages or changes infuture economic conditions.
The amount of deferred tax assets on the consolidated financial statements for the subsequent consolidated fiscal year may
be impacted significantly in the event of a difference between the actual timing and amounts of future taxable income andtheir estimates.
(Changes in presentation)(Consolidated Balance Sheet)Accrued expenses, which were included in other current liabilities in the previous consolidated fiscal year, are presented as a separate
line item beginning in this consolidated fiscal year due to an increase in their monetary significance. The consolidated balance sheet
for the previous consolidated fiscal year has been reclassified to reflect this change in presentation.
As a result, the 1,906 million yen presented in other current liabilities on the consolidated balance sheet for the previous consolidated
fiscal year has been reclassified as 1,074 million yen in accrued expenses and 831 million yen in other current liabilities.
Provision for retirement benefits for directors (and other officers), which was presented as a separate line item in the previous
consolidated fiscal year, is included in other noncurrent liabilities beginning in this consolidated fiscal year due to a decrease in its
monetary significance.
As a result, the 9 million yen in provisions for retirement benefits for directors (and other officers) and 176 million yen of othernoncurrent liabilities under noncurrent liabilities on the consolidated balance sheet for the previous consolidated fiscal year have been
reclassified as 185 million yen in other noncurrent liabilities.

―92―

(Consolidated Income Statement)
Material recycling revenues, revocation gains of gift cards, recoveries of written off receivables, and subsidy income presented as
separate line items under non-operating income in the previous consolidated fiscal year are included in other non-operating income
beginning in this consolidated fiscal year due to decreases in their monetary significance. The consolidated financial statements forthe previous consolidated fiscal year have been reclassified to reflect this change in presentation.
As a result, the 6 million yen in material recycling revenues, 1 million yen in revocation gains of gift cards, 9 million yen in recoveriesof written off receivables, 12 million yen in subsidy income, and 36 million yen in other non-operating income under non-operating
income in the previous consolidated fiscal year have been reclassified as 67 million yen in other non-operating income.
(Consolidated Statement of Cash Flows)
Foreign exchange losses (gains), which had been presented separately under cash flows from operating activities in the previous
consolidated fiscal year, has been included in other cash flows beginning in the consolidated fiscal year under review. This change isdue to a decrease in its monetary significance. The consolidated financial statements for the previous consolidated fiscal year havebeen reclassified to reflect this change in presentation.
As a result, the 0 million yen in foreign exchange losses (gains) that had been presented under cash flows from operating activities on
the Consolidated Statement of Cash Flows for the previous consolidated fiscal year has been reclassified as 0 million yen under other.

―93―

(Consolidated Balance Sheet)*1 The following accounts concern nonconsolidated subsidiaries and affiliates

Investment securities (stock)
Other

Previous consolidated fiscal year
(as of March 31, 2023)

Current consolidated fiscal year
(as of March 31, 2024)

9,739 million yen

757 million yen–

0*2 Collateral assets and collateralized obligations
Assets pledged as collateral are shown below.
Previous consolidated fiscal year
(as of March 31, 2023)

Current consolidated fiscal year
(as of March 31, 2024)

Ordinary deposits– million yen

107 million yen

Time deposits

1025

Guarantee money
Total

36

36

46

168

Note: In addition to the above, shares of stock in affiliates eliminated from the consolidated financial statements (43,832 million yen
in the consolidated fiscal year under review) also are pledges as collateral.
Collateralized obligations are shown below.
Previous consolidated fiscal year
(as of March 31, 2023)

Current consolidated fiscal year
(as of March 31, 2024)

Accounts payable–trade

29 million yen

25 million yen

Long-term borrowings–

16,201

Total

29

16,226*3 Notes maturing on the ending date of the period are accounted for through settlement as of the date of clearance.
Since the ending date of the previous consolidated fiscal year was a holiday for financial institutions, the following notes maturingon the ending date of the period are included in the ending balance.

Notes receivable–trade

Previous consolidated fiscal year
(as of March 31, 2023)– million yen

Current consolidated fiscal year
(as of March 31, 2024)
9 million yen*4 Commitment line agreements
The Group has concluded current account overdraft agreements with its major financial institutions to allow efficient fundraising. It
has also concluded agreements on commitment lines of credit and syndicated loans for the debts of SHIDA Holdings Corporation(now SHiDAX Holdings Corporation). Unexecuted balances of loans under these agreements as of the end of the consolidated fiscal
year under review are shown below.

Total amount of current account overdraft
agreements
Current account overdraft executedbalance
Total amount of commitment lines ofcredit (Note)
Executed balance of commitment line ofcreditTotal amount of syndicated loans (Note)Previous consolidated fiscal year
(as of March 31, 2023)

Current consolidated fiscal year
(as of March 31, 2024)

16,060 million yen

29,045 million yen

10,060 million yen

15,045 million yen–

4,500 million yen

–

–

–

24,322 million yen–

16,201 million yen

Executed balance of syndicated loans

Unexecuted balance of loans
6,000 million yen
26,621 million yen
Note: The agreements on commitment lines of credit and syndicated loans are subject to certain financial restrictive clauses.

―94―

(Consolidated Income Statement)*1 Revenue generated by contracts with customers and other revenues are not presented as separate line items under net sales. See“Notes (Segment information, etc.)” for a breakdown of revenue generated by contracts with customers. Net sales under that note
include amounts such as revenues based on the Accounting Standard for Lease Transactions (Accounting Standards Board of Japan[ASBJ] Statement No. 13), in addition to revenues arising from contracts with customers.
*2 Shown below are the key items included in selling, general, and administrative expenses and their amounts.
Fiscal Year ended
March 31, 2023

Fiscal Year ended
March 31, 2024

Packing and shipping expenses

14,317 million yen

14,111 million yen

Salaries and allowances

6,023

7,636

Sales promotion expenses

9,145

9,003

Outsourcing expenses
Expenses associated with retirement
benefits
Provision for bonuses
Provision for allowance for doubtful
accounts
Provision for loyalty points

5,652

5,666

43

103

–

325

151

244

(20)

78

*3 Impairment loss
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)
Business type

Location

Use

Type

Amount(million yen)

Assets for business use in theoverseas food delivery business
Software(Hong Kong)
Group assets are classified based on the assumption that business units are the smallest units that generate cash flows.
Other

Shinagawa-ku,
Tokyo

14

Thus, the Group has reduced to the recoverable value the book value of assets for business use in the overseas food delivery business(Hong Kong) for which the recoverable value is less than the book value and recorded the resulting reduction under extraordinary
losses as an impairment loss (14 million yen). Recoverable value is measured by usage value. Since the valuation of future cash flowis negative, the recoverable value is estimated to be zero.
Consolidated fiscal year under review (April 1, 2023 – March 31, 2024)
Amount(million yen)

Business type

Location

Use

Type

BtoC Subscription
Business

US–

Goodwill

372

Hokkaido

Stores

Other

1

Kanto

StoresBuildings and structures

0

Kanto

StoresOther

0

KyushuStoresOther

1

Hokkaido

Stores, etc.

Other

0

Kanto

Stores, etc.

Buildings and structures

0

Kanto

Stores, etc.

Other

4

Chubu

Stores, etc.

Other

0

Kinki

Stores, etc.

Other

0

ChugokuStores, etc.

Other

0

KyushuStores, etc.

Other

0

BtoB Subscription
Business

Social Services
Business―95―

Business type

Vehicle Operation
Services Business

Other Businesses

Amount(million yen)

Location

Use

Type

Chubu

Stores, etc.

Machinery, equipment, andvehicles4

Chubu

Stores, etc.

Other

0

Kinki

Stores, etc.

Other

0

KyushuStores, etc.

Machinery, equipment, andvehicles5

KyushuStores, etc.

Other

1

Chubu

Real estate for leasing

Buildings and structures

8

Chubu

Real estate for leasing

Other

6

Chubu

Real estate for leasing

Other

0

Kanto

Assets for business use inoverseas businesses (Hong Kong)

Other

12

Total

420

Group assets are classified based on the assumption that business units are the smallest units that generate cash flows.
Thus, the Group has reduced to the recoverable value the book value of assets for which the recoverable value is less than the bookvalue and recorded the resulting reduction under extraordinary losses as an impairment loss (420 million yen). Recoverable value
is measured by usage value. Since the valuation of future cash flow is negative, the recoverable value is estimated to be zero.

―96―

(Consolidated Statement of Comprehensive Income)* Reclassification adjustment amounts and tax effect amounts related to other comprehensive income
Fiscal Year ended
March 31, 2023
Valuation difference on available-for-salesecurities:
Amount arising during period
Reclassification adjustment amount
Before tax effect adjustments

Fiscal Year ended
March 31, 2024

241 million yen(479) million yen

155

412

397

(66)

Tax effect amount
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment(s):

(56)

(40)

340

(107)

Amount arising during period
Share of other comprehensive income ofentities accounted for by the equity method:Amount arising during period

514

(94)

24

16

Reclassification adjustment amount
Share of other comprehensive income ofentities accounted for by the equity
methodTotal other comprehensive income

(14)

–

9

16

865

(185)

(Consolidated Statement of Changes in Shareholders’ Equity, etc.)
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)
1. Classes and total numbers of shares issued and outstanding, and classes and numbers of shares of treasury stock
Starting number of
Increase in number of Decrease in number of Ending number of sharesshares for theshares during theshares during thefor the consolidated
consolidated fiscal year consolidated fiscal year consolidated fiscal year
fiscal year
Shares issued andoutstanding
Common stock(Note 1)
Total

38,014,892

13,200–38,028,092

38,014,892

13,200–38,028,092

1,469,831

163–

1,469,994

1,469,831

163–

1,469,994

Treasury stock
Common stock(Note 2)
Total

Notes:
1. The increase of 13,200 shares in numbers of shares issued and outstanding was due to issue of new shares through exercise ofstock warrants.
2. The increase of 163 shares in numbers of shares of common stock held as treasury stock is due to purchase of shares in less thanthe minimum trading unit.
2. Stock warrants and treasury stock warrants
Not applicable―97―3. Dividends
Not applicable
Consolidated fiscal year under review (April 1, 2023 – March 31, 2024)
1. Classes and total numbers of shares issued and outstanding, and classes and numbers of shares of treasury stock
Starting number of
Increase in number of Decrease in number of Ending number of sharesshares for theshares during theshares during thefor the consolidated
consolidated fiscal year consolidated fiscal year consolidated fiscal year
fiscal year
Shares issued andoutstanding
Common stock
Total

38,028,092––

38,028,092

38,028,092––

38,028,092

1,469,994

136–

1,470,130

1,469,994

136–

1,470,130

Treasury stock
Common stock(Note 1)
Total

Note 1: The increase of 136 shares in numbers of shares of common stock held as treasury stock is due to purchase of shares in lessthan the minimum trading unit.
2. Stock warrants and treasury stock warrants

Category

Breakdown of stock
warrants

Consolidated
subsidiaries

Stock warrants as
stock options
Total

EndingNumber of shares subject to stock warrants
Category ofbalance forstock subject
theStart of
Increase in Decrease in
End ofto stockconsolidated consolidated consolidated consolidated consolidated
warrants
fiscal year
fiscal year
fiscal year
fiscal year
fiscal year
(million yen)
–

–

–

–

–

38

–

–

–

–

–

38

3. Dividends
Not applicable―98―

(Consolidated Statement of Cash Flow)*1 Ending balances of cash and cash equivalents and relationship to amounts of accounts on the consolidated balance sheet
Fiscal Year ended
March 31, 2023

Fiscal Year ended
March 31, 2024

Cash and deposits
Time deposits with deposit terms of
more than three months

14,775 million yen

29,649 million yen

(54)

(208)

Cash and cash equivalents

14,72029,440*2 Main breakdown of assets and liabilities of companies made new consolidated subsidiaries through acquisition of stock
The relationship among component items of assets and liabilities at the start of the consolidated fiscal year under review and theacquisition price of SHIDA Holdings Corporation (now SHiDAX Holdings Corporation) (“SHIDA Holdings” hereinafter) and (net)
expenditures on its acquisition associated with the addition to consolidation of SHIDA Holdings, SHiDAX Corporation, and theiraffiliates is shown below.

42,151 million yen
7,680
13,611
25,951(58,464)(9,465)(7,270)14,192 million yen

Current assets
Non-current assets
Goodwill
Customer-related assets
Current liabilities
Non-current liabilities
Non-controlling interests
Price of acquisition of SHIDA Holdings
Price of acquisition of SHiDAX Corporation stock by SHIDA
Holdings
Accounts payable – other associated with acquisition of
SHiDAX Corporation stock by SHIDA Holdings
Cash and cash equivalents
Net: Expenditures for acquisition*3

24,057(8,138)(23,166)
6,944 million yen

Details of significant non-funds transactions(1) Amounts of assets and liabilities related to finance lease transactions are shown below.
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)
Amounts of assets and liabilities related to newly recorded finance lease transactions were 43 million yen each.
Consolidated fiscal year under review (April 1, 2023 – March 31, 2024)
Amounts of assets and liabilities related to newly recorded finance lease transactions were 8,626 million yen each.
(2) Amounts recorded of significant asset retirement obligations are shown below.
Fiscal Year ended
March 31, 2023
Amount recorded of significant asset
retirement obligations

Fiscal Year ended
March 31, 2024–―99―

95 million yen

(Lease transactions)1. Finance lease transactions
Finance lease transactions involving transfer of ownership:(i) Details of leased assets
Refrigerators and freezers (machinery and equipment) used at logistics centers(ii) Depreciation methods for leased assets
As described under “Important matters serving as bases for the preparation of the consolidated financial statements: 4. Notes on
accounting policies: (2) Depreciation methods for important depreciable assets.”
Finance lease transactions other than those involving transfer of ownership(i) Details of leased assets
Mainly the buildings of the ORD Ebina Station, the buildings of the ORD Atsugi Cold Storage Station, servers used for datapreparation (tools, furniture, and fixtures), and vehicles(ii) Depreciation methods for leased assets
As described under “Important matters serving as bases for the preparation of the consolidated financial statements: 4. Notes toaccounting policies: (2) Depreciation methods for important depreciable assets.”
2. Operating lease transactions
Unaccrued lease charges related to operating lease transactions that cannot be cancelled(Million yen)
Current consolidated fiscal year
(as of March 31, 2024)

Previous consolidated fiscal year
(as of March 31, 2023)
One year or less

814

1,370

More than one year

3,374

4,579

Total

4,189

5,950

―100―

(Financial instruments)
1. Status of financial instruments(1) Policy on use of financial instruments
The Group operates funds solely from short-term deposits, making use of internal funds for its business activities as a rule. However,where preferable or necessary, it may raise funds from the capital markets or by borrowing from financial institutions.
(2) Details and risks of financial instruments
The operating receivables of notes receivable–trade, accounts receivable–trade, and accounts receivable–other are exposed tocustomer credit risks.
Investment securities consist mainly of shares of stock in companies with which the Group has business relationships and bonds
for surplus fund management. They are exposed to business risks associated with the companies invested in and the risk offluctuating market prices.
Most of the operating payables of accounts payable–trade and accounts payable–other are payable within one year and are exposed
to liquidity risk.
Borrowings and lease obligations are used to raise working capital or funds related to capital investments and are exposed toliquidity risk.
(3) Risk management systems for financial instruments(i)Managing credit risk (risks associated with matters such as contractual nonperformance by counterparties)
The Company strives to minimize risks by managing payment deadlines and balances of individual counterparties in accordancewith its credit standards. These standards are based on credit management rules and credit management detailed rules.
Consolidated subsidiaries manage risks similarly, in accordance with the Company’s credit management rules.

(ii) Managing market risk (risks of fluctuations in exchange rates, interest rates, etc.)
The Group revises holdings on an ongoing basis by periodically ascertaining matters such as the financial standing of the issuers(transaction counterparty companies) for stocks and periodically ascertaining the current market values of bonds. It has adopted
the policy of refraining from use of derivatives.
(iii) Managing liquidity risks (risk of inability to make payments by deadlines) related to fundraising
In addition to checking on the states of debits and credits in accordance with claims and obligations, the Group manages liquidity
risks by maintaining liquidity on hand and in other ways.
(4) Supplemental explanation of matters related to current market values, etc. of financial instruments
In addition to market valuations, the current market values assigned to financial instruments include figures calculated on areasonable basis when no market prices are available. Since calculations of such figures must necessarily account for variability,
the figures may vary depending on the assumptions made and other factors.

―101―

2. Matters related to current market values, etc. of financial instruments
Amounts recorded to the consolidated balance sheet, current market values, and differences therein are shown below.
Notes are omitted concerning cash and deposits, accounts receivable–trade, notes receivable–trade, accounts receivable–other,accounts payable–trade, accounts payable–other, and short-term borrowings because their current market values approximate theirbook values in light of their nature as cash or claims or obligations settled over the short term.
Previous consolidated fiscal year (as of March 31, 2023)
Amount recorded to theconsolidated balance sheet(million yen)

Current market value(million yen)

Available-for-sale securities

488

488

–

Shares of subsidiaries andassociates

8,763

10,892

2,128

9,252

11,381

2,128

101

101

(0)

11,998

11,427(570)

12,10011,528(571)

Difference(million yen)

(1) Investment securities

Total assets(2) Long-term loans payable(3) Lease obligations
Total liabilities

Notes:
1. Balances of (2) long-term loans payable and (3) lease obligations include current portions.
2. The following securities are not included under (1) investment securities because they lack market prices.
Previous consolidated fiscal year
Category(million yen)
Unlisted shares

1,222

Shares of subsidiaries and associates

975

Current consolidated fiscal year (as of March 31, 2024)
Amount recorded to theconsolidated balance sheet(million yen)

Current market value(million yen)

Available-for-sale securities

935

935

–

Total assets

935

935

–

(2) Long-term loans payable

16,814

16,691(123)(3) Lease obligations

19,86919,000(868)

36,68335,691(992)

Difference(million yen)

(1) Investment securities

Total liabilities

Notes:
1. Balances of (2) long-term loans payable and (3) lease obligations include current portions.
2. The following securities are not included under (1) investment securities because they lack market prices.
Previous consolidated fiscal year
Category(million yen)
Unlisted shares

1,646

Shares of subsidiaries and associates

757

―102―

• Planned amounts of redemption after the end date of the fiscal year of monetary claims and of securities with redemption dates
Previous consolidated fiscal year (as of March 31, 2023)
One year or
less(million yen)More thanMore than
one but nofive but noMore thanmore thanmore than
10 years
five years
10 years(million yen)(million yen) (million yen)

Cash and deposits

14,775–––

Notes receivable

–

–

–

–

Accounts receivable–trade

9,626

–

–

–

Accounts receivable–other

3,147

–

–

–

27,549

–

–

–

Total
Current consolidated fiscal year (as of March 31, 2024)

More thanMore than
one but nofive but noMore thanmore thanmore than
10 years
five years
10 years(million yen)(million yen) (million yen)
29,649–––One year or
less(million yen)
Cash and deposits
Notes receivable

57

–

–

–

Accounts receivable–trade24,879–––Accounts receivable–other

1,553

–

–

–

56,140

–

–

–

Total

• Planned repayments after the end date of the fiscal year of long-term loans payable and lease obligations
Previous consolidated fiscal year (as of March 31, 2023)
More thanMore thanMore thanMore than
One year or
one but notwo but nothree but nofour but nolessmore thanmore thanmore thanmore than(million yen)
two years
three years
four years
five years(million yen) (million yen) (million yen) (million yen)
Long-term loans payable
27
19
18
16
8
Lease obligations

More than
five years(million yen)
11

705

704

706

710

707

8,464

732

724

724

727

716

8,475

Current consolidated fiscal year (as of March 31, 2024)
More than
One year or
one but nolessmore than(million yen)
two years(million yen)
Long-term loans payable
2,166
1,771

More than
two but nomore than
three years(million yen)
1,770

More than
three but nomore thanfour years(million yen)
1,762

More thanfour but nomore than
five years(million yen)
1,757

Total

Lease obligations
Total

More than
five years(million yen)
7,586

1,270

1,245

1,256

1,262

1,272

13,561

3,436

3,017

3,026

3,024

3,030

21,147

3. Notes on matters such as a breakdown of financial instruments by current market value level
The current market values of financial instruments are assigned to one of the following three levels based on the observability andmateriality of the inputs used to calculate current market value:
Level 1: Current market value calculated from the observable inputs of market prices on active markets for assets or liabilities
subject to current market value calculations
Level 2: Current market value calculated from observable inputs other than Level 1 inputs
Level 3: Current market value calculated from unobservable inputs
Where multiple inputs material to current market value calculations are used, the current market value is assigned to the level having
the lowest priority for current market value calculations among the levels to which the individual inputs belong.

―103―

(1) Financial assets and financial liabilities recorded to the balance sheet at current market values
Previous consolidated fiscal year (as of March 31, 2023)
Category

Current market value (million yen)
Level 1

(1) Investment securities
Available-for-salesecurities
StocksOther
Total

Level 2

Level 3

Total

417

–

–

417

–

–

71

71

417

–

71

488

Current consolidated fiscal year (as of March 31, 2024)
Category

Current market value (million yen)
Level 1

(1) Investment securities
Available-for-salesecurities
StocksOther
Total

Level 2

Level 3

Total

691

–

–

691

–

–

244

244

691

–

244

935

(2) Financial assets and financial liabilities not recorded in the balance sheet at their current market value
Previous consolidated fiscal year (as of March 31, 2023)
Category(1) Shares of subsidiaries andassociates
Total assets

Current market value (million yen)
Level 1

Level 2

Level 3

Total

10,892––

10,892

10,892––

10,892(2) Long-term loans payable

–

101

–

101

(3) Lease obligations–

11,427–

11,427–

11,528–

11,528

Total liabilities

Current consolidated fiscal year (as of March 31, 2024)
Category

Current market value (million yen)
Level 1

(1) Shares of subsidiaries andassociates
Total assets

Level 2

Level 3

Total

–

–

–

–

–

–

–

–

(2) Long-term loans payable–

16,691–

16,691(3) Lease obligations–

19,000–19,000–35,691–35,691

Total liabilities

Note: Description of evaluation methods and related inputs used to calculate current market value
Investment securities
Stocks consist of listed shares and are evaluated by their market price. Their current market values are assigned to Level
1 because they are traded in active markets.
“Other” consists of stock warrants on unlisted shares. Those whose monetary amounts are immaterial are valued at theirbook value, as are those whose current market value can be considered to approximate their book value because thecorresponding investments were made close to the end of the consolidated fiscal year. These are assigned to Level 3.

―104―Long-term loans payable, lease obligations
Current market values for these are calculated through the discounted present value method, using rates reflecting the
expected amounts of interest and principle payable adjusted by the remaining period of such obligations and their credit
risk. These are assigned to Level 2. Their balances include their current portions.

―105―

(Securities)
1. Available-for-sale securities
Previous consolidated fiscal year (as of March 31, 2023)
Amount on the
consolidated balance
sheet(million yen)

Acquisition price(million yen)

417

240

177

(i) Treasuries,
municipals, etc.

–

–

–

(ii) Corporate bonds

–

–

–

(iii) Other

–

–

–

–

–

–

417

240

177

–

–

–

(i) Treasuries,
municipals, etc.

–

–

–

(ii) Corporate bonds

–

–

–

(iii) Other

–

–

–

–

–

–

–

–

–

417

240

177

Type
(1) Stocks

Difference(million yen)

(2) Bonds
Those for which theamount on the consolidatedbalance sheet exceeds theacquisition price(3) Other
Subtotal(1) Stocks(2) Bonds
Those for which theamount on the consolidatedbalance sheet does notexceed the acquisition price(3) Other
Subtotal
Total

―106―

Current consolidated fiscal year (as of March 31, 2024)
Amount on the
consolidated balance
sheet(million yen)

Acquisition price(million yen)

691

285

405

(i) Treasuries,
municipals, etc.

–

–

–

(ii) Corporate bonds

–

–

–

(iii) Other

–

–

–

–

–

–

691

285

405

–

–

–

(i) Treasuries,
municipals, etc.

–

–

–

(ii) Corporate bonds

–

–

–

(iii) Other

–

–

–

–

–

–

–

–

–

691

285

405

Type
(1) Stocks

Difference(million yen)

(2) Bonds
Those for which theamount on the consolidatedbalance sheet exceeds theacquisition price(3) Other
Subtotal(1) Stocks(2) Bonds
Those for which theamount on the consolidatedbalance sheet does notexceed the acquisition price(3) Other
Subtotal
Total

2. Available-for-sale securities sold
Previous consolidated fiscal year (as of March 31, 2023)
Category

Sale price (million yen)

StocksTotal gains on sale (million yen)

Total loss on sale (million yen)89–

Total gains on sale (million yen)

Total loss on sale (million yen)

332

–

100

Current consolidated fiscal year (as of March 31, 2024)
Category

Sale price (million yen)

Stocks369

3. Securities impaired
In the previous consolidated fiscal year (as of March 31, 2023), the Company carried out impairment processing for 143 million yen
of investment securities (143 million yen of available-for-sale securities).
In the current consolidated fiscal year (as of March 31, 2024), the Company carried out impairment processing for 365 million yen ofinvestment securities (325 million yen of available-for-sale securities, 40 million yen of stock warrants).
Impairment processing is conducted for other stocks, etc., with no market prices in the event that their real value declines significantly
due to the deteriorating financial standing of their issuers.

―107―

(Retirement benefits)
1. Summary of retirement benefits system employed
The Company and certain consolidated subsidiaries employ a defined contribution pension plan.
2. Defined contribution plan
The contributions required for the defined contribution plan of the Company and its consolidated subsidiaries were 71 million yen in
the previous consolidated fiscal year (April 1, 2022 – March 31, 2023) and 157 million yen in the consolidated fiscal year underreview (April 1, 2023 – March 31, 2024).
(Stock options, etc.)
1. Reporting company
Not applicable
2. Consolidated subsidiaries
Disclosure of the stock options issued by certain consolidated subsidiaries is omitted due to their negligible impact/consequence.

―108―

(Tax effect accounting)
1. Breakdown of main factors leading to deferred tax assets and deferred tax liabilities
Previous consolidated fiscal year
(as of March 31, 2023)

Current consolidated fiscal year
(as of March 31, 2024)

Deferred tax assets
Provision for bonuses– million yen

536 million yen

Provision for loyalty points

24

26

Contract liabilities

96

65

Allowance for doubtful accounts

72

131

Income taxes payable

65

155

Impairment loss

57

603

Excess depreciation

16

65

Filing adjustments for lease transactions

105

117

Asset retirement obligations

169

319

Losses carried forward for tax purposes (Note 2)

782

8,178

Other

186

1,117

1,577

11,317(224)(4,334)(260)(1,434)

Subtotal of valuation allowances (Note 1)(485)(5,769)Total deferred tax assets

1,091

5,548

(115)

(8,963)Retirement costs on asset retirement obligations

(95)

(174)

Other

(114)

(189)

Total deferred tax liabilities(324)(9,326)

Net deferred tax assets

766(3,778)Subtotal of deferred tax assets
Valuation allowance on losses carried forward
for tax purposes (Note 2)
Valuation allowance on total of future temporary
differences in deductions, etc.

Deferred tax liabilities
Intangible assets

Note 1: Valuation allowances grew by 5,283 million yen, mainly due to the addition to consolidation of SHiDAX Corporation andits consolidated group of companies in the consolidated fiscal year under review.
Note 2: Losses carried forward for tax purposes and deferred tax assets thereon by carryover period
Previous consolidated fiscal year (as of March 31, 2023)
One yearor less(Million yen)More than More than More than More than
one but no two but no three but no four but no More thanTotalmore than more than more than more than five years
two years three years four years five years

Losses carried forward
for tax purposes (*1)

18

25

26

31

45

634

782

Valuation allowance

(18)

(24)

(26)

(31)

(45)

(78)

(224)

Deferred tax assets

–

1

0

–

–

556

557

*1 Amounts of losses carried forward for tax purposes are multiplied by the statutory effective tax rate.
*2 Deferred tax assets of 557 million yen were recorded on 782 million yen in losses carried forward for tax purposes(amount multiplied by the statutory effective tax rate). These deferred tax assets were recognized primarily as partof the balance of losses carried forward for tax purposes of Three Limes, Inc., a consolidated subsidiary. No
valuation allowance is recognized for the portion of these losses carried forward for tax purposes judged to be
recoverable given the projected future taxable income of Three Limes, Inc.

―109―

Current consolidated fiscal year (as of March 31, 2024)
One yearor less(Million yen)More than More than More than More than
one but no two but no three but no four but no More thanTotalmore than more than more than more than five years
two years three years four years five years

Losses carried forward
for tax purposes (*1)

90

47

133

137

4,001

3,768

8,178

Valuation allowance

(90)

(47)

(133)

(137)

(1,923)(2,001)(4,334)

Deferred tax assets

–

–

–

–

2,077

1,767

3,844

*1 Amounts of losses carried forward for tax purposes are multiplied by the statutory effective tax rate.
*2 Deferred tax assets of 3,844 million yen were recorded on 8,178 million yen in losses carried forward for tax
purposes (amount multiplied by the statutory effective tax rate). These deferred tax assets were recognizedprimarily as part of the balance of losses carried forward for tax purposes of the consolidated subsidiaries SHiDAX
Corporation and its consolidated group and Three Limes, Inc. No valuation allowance is recognized for the portionof these losses carried forward for tax purposes judged to be recoverable given the projected future taxable incomeof SHiDAX Corporation and its consolidated group and Three Limes, Inc.
2. Breakdown of main account items resulting in significant differences, if any, between the statutory effective tax rate and income tax
rate borne after the application of tax effect accounting
Previous consolidated fiscal year
(as of March 31, 2023)

Current consolidated fiscal year
(as of March 31, 2024)

Statutory effective tax rate

30.6%

30.6%

(Adjustments)
Items not included in losses permanently, suchas entertainment expenses
Per capita apportionment of residents’ tax

0.3

0.3

0.8

1.3

Special deduction for increased income

(0.1)

(1.5)

Amortization of goodwill

3.0

2.5

Change in amount of valuation allowance

2.4

7.5

Loss on equity method investment

1.3

0.1

Difference in tax rates of overseas subsidiaries

1.6

0.7

Distributions from partnerships

4.3

0.2

Other
Income tax rate borne after application of tax
effect accounting

0.8

2.4

45.2

44.2

3. Accounting for national and local income taxes or related tax-effect accounting
Certain consolidated subsidiaries apply the group tax-sharing system. Accounting for national and local income taxes or related taxeffect accounting and disclosure are conducted in accordance with the Practical Solution on the Accounting and Disclosure Under theGroup Tax Sharing System (Accounting Standards Board of Japan [ASBJ] Practical Solution No. 42, August 12, 2021).

―110―

(Business combinations, etc.)(Making SHiDAX Corporation a consolidated subsidiary by underwriting a capital increase through the third-party allocation ofshares by SHIDA Holdings Corporation [now SHiDAX Holdings Corporation])
In its meeting held November 10, 2023, the Company Board of Directors resolved to conclude an agreement (“acceptanceagreement” hereinafter) on the acceptance, for all shares of common stock (“SHiDAX stock” hereinafter) issued by theCompany’s equity-method affiliate SHiDAX Corporation (now SHiDAX Holdings Corporation) (“SHiDAX” hereinafter) held by
the Company, of a takeover bid implemented as part of a management buyout* by SHIDA Holdings Corporation (“SHIDA
Holdings” hereinafter). The acceptance agreement was concluded on the same date; the takeover bid was finalized and enteredinto effect on December 25, 2023.
In addition, upon the completion of the settlement for this takeover bid, effective January 5, 2024, SHiDAX was made asubsidiary of SHIDA Holdings through the acceptance and acquisition of shares of common stock in SHiDAX issued through acapital increase through a third-party allocation of shares by SHIDA Holdings (“third-party allocation of shares” hereinafter) andthe completion of the settlement of the takeover bid, as part of this takeover bid and the series of subsequent transactions based on
the transaction contract (see “Part 2. Business conditions: 3. Important business contracts, etc.” for a contract summary), for the
purpose of taking SHiDAX private.
* Management buyout (MBO): This refers in general to a transaction in which the management of the company to be acquired
acquires company shares by providing all or some of the acquisition funds themselves, based on the premise that the acquiredcompany will remain in business.
(1) Overview of the business combination(i)Name and lines of business of the company acquired
Name of acquired company: SHIDA Holdings Corporation (now SHiDAX Holdings Corporation)Lines of business:

Acquisition and holding of stock in SHiDAX Corporation(ii) Main reasons for implementing the business combination
Since making SHiDAX an equity-method affiliate in October 2022, the Company has sought to deepen the businessalliance, centered in particular on the food domain. The companies currently work together in various ways, including thebusiness operated by SHiDAX for supplying commercial meal kits to nursery schools.
At the same time, as independent listed companies, the Company and SHiDAX were subject to restrictions in various
operational aspects, including decision-making and pooling management resources. This led to the recognition of issues
affecting the responsiveness of decision-making and business deployment amid conditions in which the businessenvironment undergoes dramatic change from year to year, including increasingly diverse channels for food purchases anddelivery, rising logistics costs, and the labor shortage associated with the aging population and low birth rates.
Both the Company and SHiDAX contribute solutions to society’s challenges based on a forward-looking orientation.
Repeated consideration of the optimal business structure for maximizing the corporate value of the two companies led tothe idea of the business combination and to the various associated transactions. These measures are intended to facilitate
dynamic decision-making and implementation of the measures chosen by both companies and to maximize corporate value
over the medium to long term.
(iii) Date of business combination
January 5, 2024 (imputed date of acquisition: January 1, 2024)(iv) Legal form of business combination
Acquisition of stock for cash(v)

Name(s) after business combination
No change―111―

(vi) Percentage of voting rights acquired
66.0%(vii) Key factors underlying decision to acquire company
Acquisition of stock by the Company by cash payment(2) Reporting period of acquisition included in the consolidated financial statements
January 1 through March 31, 2024
(3) Cost of acquisition and breakdown by type of consideration paid
Consideration of acquisition

Cash

Cost of acquisition

14,192 million yen
14,192 million yen(4) Details and amount of main acquisition-related expenses
Advisory remuneration, fees, etc.

213 million yen(5) Amount, cause, amortization method, and amortization period of resulting goodwill(i)Amount of resulting goodwill
13,065 million yen(ii) Cause
Future excess earnings power expected from future business deployment(iii) Amortization method and amortization period
Equal-installment method over 17 and 20 years(6) Amounts of assets received and liabilities accepted on the date of the business combination, and key details thereof
Current assets

42,151 million yen

Non-current assets

47,163 million yen

Total assets

89,314 million yen

Current liabilities

58,464 million yen

Non-current liabilities

9,465 million yen

Total liabilities

67,930 million yen(7) Amounts allocated to intangible assets other than goodwill and breakdown and weighted-average amortization period by maintype thereofBreakdown by main type
Customer-related assets

Weighted-averageamortization period

Amount25,951 million yen

23 years(8) Estimates of the effects of the business combination on the consolidated statement of income for the consolidated fiscal year
under review if the combination had been finalized on the start date of the consolidated fiscal year, and calculation method
thereofNet sales

96,407 million yen

Operating profit

1,424 million yen

Ordinary profit

1,355 million yen

Net income before taxes and other adjustments

1,379 million yen

Net income attributable to owners of parent

258 million yen

Earnings per share

7.06 yen―112―

(Summary of procedures for obtaining estimates)
Estimates of effects employ the differences between net calculated sales and profits/losses based on the assumption that the businesscombination had been finalized on the start date of the consolidated fiscal year and net sales and profits/losses on the consolidated
statement of income of the acquired company. They also include amortization calculated assuming that goodwill and customer-related
assets recognized at the time of the business combination had arisen on the start date of the consolidated fiscal year.
These notes have not been subjected to audit certification.
(Asset retirement obligations)
Asset retirement obligations recorded on the consolidated balance sheet
A. Summary of such asset retirement obligations
Obligation to restore property to its original conditions under real estate lease agreements concluded for the head offices, logistics
centers, and other facilities of the Company and its consolidated subsidiaries
B. Method for calculating such asset retirement obligations
Asset retirement obligations are calculated by assuming the period of use to be two to 32 years from the date of acquisition andapplying a discount rate of –0.15% to 1.991%.
C. Changes in total amounts of such asset retirement obligations
Fiscal Year ended
March 31, 2023
Starting balance
Increase associated with acquisition ofproperty, plant, and equipment
Increase (decrease) due to change inestimates *Adjustments over time
Decrease due to performance of asset
retirement obligations
Other increases (decreases)
Ending balance

561 million yen

Fiscal Year ended
March 31, 2024
554 million yen

–

95

–

(11)

3

4

(11)

–

–

332

554

975

* Increase (decrease) due to change in estimates results from more precise estimation reflecting newly obtained information.

―113―

(Revenue recognition)
1. Analysis of revenue from contracts with customers
Information on analysis of revenue from contracts with customers is presented under “Part 5. Accounting: 1. Consolidated financial
statements: Notes to the consolidated financial statements: (Segment information, etc.).”2. Basic information for understanding revenue from contracts with customers
Details of key services
BtoC Subscription Business

BtoB Subscription BusinessSocial Services Business

Vehicle Operation Services Business

Delivery of foods and other merchandise
Contracted operations for employee dining halls at offices, factories, andother facilities and student dining halls at schools and other institutions
Contracted operations for student and employee dormitory dining halls
Contracted operations for restaurants and employee clubs
Contracted operations for retail stores
Contracted operations for food services for hospital and clinic patients,
hospital employee dining halls, and restaurants for guests
Wholesaling of food ingredients to nursery schools and contracted
operations for food services for nursery schools, kindergartens, special
senior residences, senior long-term care facilities, premium seniorresidences, facilities for people with disabilities, etc.
Managing and operating public facilities
Operating after-school care businesses and centers
Managing and operating dormitories and lodges
Administration and management
Contracted school meal services
Managing and operating local tourism facilities
Providing and managing chauffeurs for company vehicles for officers, etc.
Providing and managing chauffeurs for private vehicles owned bycustomers
Providing and managing drivers for community buses, route buses, etc.
Transporting services by charter buses, etc.

Details of the primary obligations in significant businesses related to revenue from contracts with customers of the Company andits consolidated subsidiaries and the normal timing of fulfillment of such performance obligations (normal timing of revenue
recognition) are shown below.
The primary business of the core BtoC Subscription Business segment is the sale of food and related products. Revenue from thesale of such products is recognized at the point in time at which the products are delivered to customers because the customers are
regarded to have assumed control of the products and related obligations deemed fulfilled at that time.
In addition, by applying the alternative treatment specified in Paragraph 98 of the Implementation Guidance on the AccountingStandard for Revenue Recognition, revenue is recognized in domestic sales of products, primarily in the food delivery business, atthe time of shipment, assuming ordinary shipping times to the customer.
In the BtoB Subscription Business, Social Services Business, and Vehicle Operation Services Business segments, the Company andits consolidated subsidiaries provide services under contracts concluded with the service recipients that stipulate matters such as thenature of the services provided and the rights and obligations of the parties involved. Services are provided continually over theperiod of the contracts. Since performance obligations for such services are fulfilled by providing services to the customers basedon these contracts, the obligations are fulfilled over a defined period. In addition, customers pay to the Company and its consolidated
subsidiaries usage fees based on monthly rates and service fees. Revenue is recorded monthly over the contractual period in which
the obligations are fulfilled.
The business of wholesaling food ingredients to nursery schools in the BtoB Subscription Business is a product sales business. The
businesses of operating employee dining halls, student and faculty dining halls, restaurants, and retail stores under contract in the
BtoB Subscription Business and operating and managing public facilities and local tourism facilities in the Social Services Businessalso sell products. Revenue from these product sales is recognized at the point in time at which the promised goods are delivered tocustomers because the related obligations are deemed fulfilled at that time. In the BtoC Subscription Business, payments for productsale transactions are generally received within 60 days of the fulfillment of the performance of the obligations; in the BtoB
Subscription Business, Social Services Business, and Vehicle Operation Services Business, the cost of service provision is billed tothe customer on the month following the month in which the performance obligation was fulfilled, and the normal payment deadline
is within 30 days. As such, these transactions include no material financial elements.

―114―

3. Relationship between fulfillment of obligations under contracts with customers and cash flows arising from such contracts, andamounts and timing of revenue from contracts with customers in existence at the end of the consolidated fiscal year under review
expected to be recognized in the following consolidated fiscal year or later
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)(i)

Balance of contractual obligations, etc.
The starting and ending balances of claims and contractual obligations recorded based on contracts between the Company andits consolidated subsidiaries and customers in the previous consolidated fiscal year are shown below.
Consolidated fiscal year under review
Claims from contracts with customers (starting balance)

8,964 million yen

Claims from contracts with customers (ending balance)

9,626 million yen

Contractual obligations (starting balance)

250 million yen

Contractual obligations (ending balance)

397 million yen

Contractual obligations consist mainly of ending balances of loyalty points awarded on product purchases by subscribers basedon the Company’s loyalty point program intended as a sales promotion measure, allocated to transaction values based on
independent sale prices calculated with consideration for matters such as expected future expiration. Figures are transferred fromcontractual obligations in association with revenue recognition.
Revenue recognized in the previous consolidated fiscal year and included in the balance of contractual obligations as of the startof the period was 250 million yen. The increase in contractual obligations was due to the granting of loyalty points.
(ii) Transaction prices allocated to residual obligations
Description of transaction prices allocated to residual obligations is omitted for practical purposes since the Company and its
consolidated subsidiaries have no significant transactions for which the initially expected contractual period is longer than one
year.
Current consolidated fiscal year (April 1, 2023 – March 31, 2024)(i)

Balance of contractual obligations, etc.
The starting and ending balances of claims and contractual obligations recorded based on contracts between the Company andits consolidated subsidiaries and customers in the consolidated fiscal year are shown below.
Consolidated fiscal year under review
Claims from contracts with customers (starting balance)

9,626 million yen

Claims from contracts with customers (ending balance)

24,936 million yen

Contractual obligations (starting balance)

397 million yen

Contractual obligations (ending balance)

505 million yen

Contractual obligations consist mainly of ending balances of loyalty points awarded upon product purchases by subscribers basedon the Company’s loyalty point program intended as a sales promotion measure, allocated to transaction values based on
independent sale prices calculated with consideration for matters such as expected future expiration and of advances received
from customers in connection with Social Services. Figures are transferred from contractual obligations in association withrevenue recognition. Revenue recognized in the period and included in the balance of contractual obligations as of the start ofthe period was 397 million yen. The increase in contractual obligations was due mainly to the granting of loyalty points and to
an increase in advances received from customers in connection with Social Services.
(ii) Transaction prices allocated to residual obligations
Description of transaction prices allocated to residual obligations is omitted for practical purposes since the Company and its
consolidated subsidiaries have no significant transactions for which the initially expected contractual period is longer than one
year.

―115―

(Segment information, etc.)
Segment information
1. Summary of business segments
The Group’s reportable segments represent structural units of the Group for which separate financial information is available. They
are subject to periodic consideration by the Board of Directors to determine the allocation of management resources and to evaluatebusiness performance. The Group’s reportable segments are the BtoC Subscription Business, the BtoB Subscription Business, theSocial Services Business, and the Vehicle Operation Services Business. Products and services belonging to each reportable segment
are shown below.
Reportable segment
BtoC Subscription Business

BtoB Subscription BusinessSocial Services Business

Vehicle Operation Services Business

Main products and services
Delivery of foods and other merchandise
Contracted operations for employee dining halls at offices, factories, andother facilities and student dining halls at schools and other institutions
Contracted operations for student and employee dormitory dining halls
Contracted operations for restaurants and employee clubs
Contracted operations for retail stores
Contracted operations for food services for hospital and clinic patients,
hospital employee dining halls, and restaurants for guests
Wholesaling of food ingredients to nursery schools and contracted
operations for food services for nursery schools, kindergartens, special
senior residences, senior long-term care facilities, premium seniorresidences, facilities for people with disabilities, etc.
Managing and operating public facilities
Operating after-school care businesses and centers
Managing and operating dormitories and lodges
Administration and management
Contracted school meal services
Managing and operating local tourism facilities
Providing and managing chauffeurs for company vehicles for officers, etc.
Providing and managing chauffeurs for private vehicles owned bycustomers
Providing and managing drivers for community buses, route buses, etc.
Transporting services by charter buses, etc.

2. Changes in reportable segments, etc.
From the fiscal year ended March 31, 2024, the calculation method of segment profit and reportable segments have been changed dueto the reclassification of the business portfolio and the accompanying review of performance evaluation and analysis indicators by the
Board of Directors following the consolidation of SHIDA Holdings Corporation (currently SHiDAX Holdings Corporation) as aconsolidated subsidiary.
The reportable segments have been changed from “Home Delivery Business (Oisix),” “Home Delivery Business (Daichi wo
Mamorukai),” “Home Delivery Business (Radish Boya),” and “Home Delivery Business (Purple Carrot)” to “BtoC Subscription,”“BtoB Subscription,” “Social Services” and “Vehicle Operation Services.”
BtoC Subscription includes the existing “Home Delivery Business (Oisix),” “Home Delivery Business (Daichi wo Mamorukai),”“Home Delivery Business (Radish Boya),” and “Home Delivery Business (Purple Carrot).” BtoB Subscription includes the “Sukusuku Oisix” business, which wholesales food ingredients to nursery schools, and the “Food Service Business” of the consolidated
subsidiary SHiDAX. “Social Services” and “Vehicle Operation Services,” which were businesses of the SHiDAX, were added asreportable segments, respectively.
The calculation method of segment profit has been changed to allocate salaries, allowances, and legal welfare expenses (“fixed
personnel expenses”) and some business operation-related expenses to each business segment, which were previously included incorporate expenses.
Segment information for the previous consolidated fiscal year is prepared based on the modified segmentation method. It is shown
under the previous consolidated fiscal year in “3. Information on the amounts of net sales, profit or loss, assets, liabilities, and otheraccounts by reportable segment.”―116―

3. Methods for calculating amounts of net sales, profit or loss, assets, liabilities, and other accounts by reportable segment
Accounting methods for reportable business segments comply with the accounting policies employed in preparation of theconsolidated financial statements.
Internal sales of transfers between segments are based on market values.
4. Information on the amounts of net sales, profit or loss by reportable segment
Fiscal year ended March 31, 2023
(Million yen)
Reportable Segment
VehicleOperation
ServicesOtherbusinesses

Adjustments

Amount on
Consolidated
Statementsof Income

BtoC
Subscription

BtoB
Subscription

Social Services

Oisix

59,413–––59,413––59,413

Daichi wo Mamorukai

12,345–––

12,345––

12,345

Radish Boya

16,939–––16,939––16,939Purple Carrot

9,759

–

–

–

9,759

–

–

9,759

Medical Food

–

–

–

–

–

–

–

–

Contract Food

–

–

–

–

–

–

–

–

Suku-suku Oisix

–

1,293

–

–

1,293

–

–

1,293

After-school care service

–

–

–

–

–

–

–

–

Public school lunch service

–

–

–

–

–

–

–

–

Social service

–

–

–

–

–

–

–

–

Executive vehicle management

–

–

–

–

–

–

–

–

General vehicle management

–

–

–

–

–

–

–

–

Passenger transport

–

–

–

–

–

–

–

–

Other

–

–

–

–

–

15,424–

15,41498,458

1,293

–

–

99,752

15,424–

115,176

Total

Net Sales

Revenue from Contracts with
Customers
Other
Net sales to external customers
Intersegmental net sales andtransfers
Total

–

–

–

–

–

–

–

–

98,458

1,293

–

–

99,752

15,414–

115,176

–

–

–

–

–

1,237

(1,237)–98,458

1,293

–

–

99,752

16,661(1,237)

115,176

Segment profit (loss)

6,892

(6)

–

–

6,886

818

(4,358)3,346

Segment assets

45,806344––

46,15016,822

1,528

64,502

1,588

2

–

–

1,590

81

313

1,985

263

–

–

–

263

–

–

263

–

–

–

–

–

(113)

–

(113)

–

–

–

–

–

9,426

–

9,426

1,902

3

–

–

1,905

151

162

2,219

Other Items
Depreciation
Amortization of goodwill
Share of profit (loss) of entities
accounted for using equity
methodInvestments in equity method
affiliates
Increase in property, plant andequipment and intangible
assets

Notes:
1. The “Other businesses” segment is a business segment not included in the reported segments and includes other companies’ EC
support business, mobile supermarket business, and web system development business and others.
2. The main components of segment profit in “Adjustments” are fixed personnel expenses and corporate expenses, which are
general and administrative expenses that do not belong to any business segment. “Segment assets” consist mainly of corporate
assets that do not belong to any reportable segment. “Depreciation” represents the depreciation of corporate assets that do notbelong to any reportable segment, and “Increase in property, plant and equipment and intangible assets” represents the increasein corporate assets that do not belong to any reportable segment.
3. Adjustments were made to reconcile segment profit (loss) to operating profit presented in the consolidated financial statements.

―117―

Fiscal year ended March 31, 2024
(Million yen)
Reportable Segment
Adjustments

Amount on
Consolidated
Statementsof Income––

62,377––

11,327

16,596––

16,596

9,082

–

–

9,082

–

8,076

–

–

8,076

–

5,065

–

–

5,065

–

–

1,633

–

–

1,633

4,702

–

4,702

–

–

4,702

3,816

–

3,816

–

–

3,816

2,852

–

2,852

–

–

2,852

–

–

2,645

2,645

–

–

2,645

–

–

2,463

2,463

–

–

2,463

–

–

–

1,105

1,105

–

–

1,105

–

194

–

–

194

16,413–

16,60899,383

14,97011,372

6,213

131,940

16,413–

148,354

–

–

–

–

–

54

–

54

99,383

14,97011,372

6,213

131,940

16,467–

148,408

–

6

10

15

32

1,559

(1,592)–

VehicleOperation
ServicesOtherbusinesses

BtoC
Subscription

BtoB
Subscription

Social Services

Oisix

62,377–––62,377

Daichi wo Mamorukai

11,327–––

11,327

Radish Boya

16,596–––

Purple Carrot

9,082

–

–

–

Medical Food

–

8,076

–

Contract Food

–

5,065

–

Suku-suku Oisix

–

1,633

After-school care service––

Public school lunch service––

Social service––

Executive vehicle management–

General vehicle management–

Passenger transport
Other

Total

Net Sales

Revenue from Contracts with
Customers
Other
Net sales to external customers
Intersegmental net sales andtransfers
Total

99,383

14,976

11,383

6,229

131,972

18,027(1,592)

148,408

Segment profit (loss)

8,765

323

338

304

9,731

1,217

(5,804)

5,144

Segment assets

58,16430,234

18,32029,522

136,241

13,243(5,756)

143,728

1,879

158

51

120

2,209

89

314

2,613

281

58

57

98

495

–

–

495

–

–

–

–

–

(24)

–

(24)

–

–

–

–

–

22

–

22

11,17018,571

5,508

15,79951,049279

9451,423

Other Items
Depreciation
Amortization of goodwill
Share of profit (loss) of entities
accounted for using equity
methodInvestments in equity method
affiliates
Increase in property, plant andequipment and intangible assets

Notes:
1. The “Other businesses” segment is a business segment not included in the reported segments and includes other companies’ EC
support business, mobile supermarket business, and web system development business and others.
2. The main components of segment profit in “Adjustments” are corporate expenses such as general and administrative expenses
that do not belong to any reportable segment. The adjustment of −5,756 million yen to segment assets consists of −17,660
million yen in offsetting of claims among segments and 11,904 million yen in corporate assets that do not belong to any
reportable segment. “Depreciation” represents the depreciation of corporate assets that do not belong to any reportablesegment, and “Increase in property, plant and equipment and intangible assets” represents the increase in corporate assets that
do not belong to any reportable segment.
3. Adjustments were made to reconcile segment profit to operating profit or loss presented in Consolidated Statements of Income.
4. “Other” in net sales is sales based on “Accounting Standard for Lease Transactions (ASBJ Statement No. 13)”.

―118―

Related information
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)
1. Information on individual products and services(Million yen)
BtoC
Subscription

BtoB
Subscription

Social Services

98,4681,293–

Net sales to externalcustomers

VehicleOperation
Services

Other
–

Total

15,414

115,176

2. Regional information(1) Net sales(Million yen)
Japan

USA
104,584

Other

Total

9,769

832

115,176

Note: Net sales are categorized by country or region based on customer location.
(2) Property, plant, and equipment
Omitted here since the value of property, plant, and equipment located in Japan accounts for more than 90% of the value of property,
plant, and equipment on the consolidated balance sheet
3. Information on major customers
Omitted here since no counterparties in sales to external customers account for 10% or more of net sales on the consolidated statementof incomeCurrent consolidated fiscal year (April 1, 2023 – March 31, 2024)
1. Information on individual products and services(Million yen)
BtoC
Subscription

BtoB
Subscription

Social Services

99,383

14,97011,372

Net sales to externalcustomers

VehicleOperation
Services
6,213

Other
16,467

Total
148,408

2. Regional information(1) Net sales
Omitted here since net sales to external customers in Japan account for more than 90% of net sales on the Consolidated Statementof Income(2) Property, plant, and equipment
Omitted here since the value of property, plant, and equipment located in Japan accounts for more than 90% of the value of property,
plant, and equipment on the consolidated balance sheet
3. Information on major customers
Omitted here since no counterparties in sales to external customers account for 10% or more of net sales on the consolidated statementof income―119―

Information on impairment losses on non-current assets by reportable segment
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)

BtoC
BtoB
Subscription Subscription

VehicleOperation
Services

SocialServices

Total(Million yen)Amountrecorded on
Companywide/
consolidated
eliminations
financialstatements

Other

Impairment
–
–
–
–
–
14
loss
Note: The amount under Other is related to the overseas food delivery business (Hong Kong).

–

14

Current consolidated fiscal year (April 1, 2023 – March 31, 2024)

BtoC
BtoB
Subscription Subscription

VehicleOperation
Services

SocialServices

Total(Million yen)Amountrecorded on
Companywide/
consolidated
eliminations
financialstatements

Other

Impairment
372
2
7
10
392
27
loss
Note: The amount under Other is related to the overseas food delivery business (Hong Kong).

(0)

420

Information on impairment amounts and unimpaired balances of goodwill by reportable segment
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)

BtoC
BtoB
Subscription Subscription
Impairment
amount inperiodEndingbalance

VehicleOperation
Services

SocialServices

Total(Million yen)Amountrecorded on
Companywide/
consolidated
eliminations
financialstatements

Other

263

–

–

–

263

–

–

263

1,190

–

–

–

1,190

–

–

1,190

Current consolidated fiscal year (April 1, 2023 – March 31, 2024)

BtoC
BtoB
Subscription Subscription
Impairment
amount inperiodEndingbalance

SocialServices

VehicleOperation
Services

Total(Million yen)Amountrecorded on
Companywide/
consolidated
eliminations
financialstatements

Other

281

58

57

98

495

–

–

495

615

5,221

3,850

4,958

14,645148–

14,794

Information on gain on bargain purchase by reportable segment
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)
Not applicable
Current consolidated fiscal year (April 1, 2023 – March 31, 2024)
Not applicable―120―

(Information on related parties)
1. Transactions with related parties(1) Transactions between the Company submitting the consolidated financial statements and related parties(A) Nonconsolidated subsidiaries and affiliates, etc. of the Company submitting the consolidated financial statements
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)
Not applicable
Current consolidated fiscal year (April 1, 2023 – March 31, 2024)
Not applicable(B) Officers and major shareholders (individuals only), etc. of the Company submitting the consolidated financial statements
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)
Not applicable
Current consolidated fiscal year (April 1, 2023 – March 31, 2024)
Not applicable(2) Transactions between consolidated subsidiaries of the Company submitting the consolidated financial statements and relatedparties
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)
Not applicable
Current consolidated fiscal year (April 1, 2023 – March 31, 2024)
Personal or
corporate
name

Type

SDI
Corporation

Companies inwhich officers
and/or theirclose relatives
own a majorityof voting rights(including
subsidiaries ofsuchcompanies)

SHIDA
Corporation

SHIDAX
Nakaizu
Winery Hills
Inc.

Location

Chuo-ku,Tokyo

Chiyoda-ku,
Tokyo

Chofu, Tokyo

Capital orinvestment(million yen)

5

10

10

Line of businessor occupation

Securities
investment andreal estate leasing
businesses

Securities
investment
business

Managing andoperating hotels,
restaurants, andbars

Percentage ofvoting rights
owned by or in
the related party(%)–

Relationship to
the related party

Provision of
construction
cooperation
funds
Concurrent
service ofofficers–

Office leasing,etc.
Concurrent
service ofofficers–

Business
contracting
Leasing ofbusinessfacilities, etc.
Concurrent
service ofofficers

Transaction details

Provision of
construction
cooperation funds

Transaction
amount(million yen)Account

Endingbalance(million yen)

Short-termloans receivable

33

Long-termloans receivable

138

173

Receipt of intereston construction
cooperation funds
(*1)

0

–

0

Advance paymentof salaries ofseconded
personnel (*2)

17Advances paid

0

Receipt of rent
(*3)

16

Accounts
receivable–
trade

0

Advance paymentof salaries ofseconded
personnel (*2)

163

Advances paid0

Notes:
1.

Kinichi Shida, Representative Director of SDI Corporation, serves concurrently as Representative Director of SHiDAX Corporation, a Company
subsidiary.

2.

Representative Director Kinichi Shida of Company subsidiary SHiDAX Corporation and his close relatives directly own 100% of voting rights in SDI
Corporation.

―121―

3.

Kinichi Shida, a Director of SHIDA Corporation, serves concurrently as Representative Director of SHiDAX Corporation, a Company subsidiary.

4.

Representative Director Kinichi Shida of Company subsidiary SHiDAX Corporation and his close relatives directly own a majority of voting rights in
SHIDA Corporation.

5.

Kinichi Shida, Representative Director of SHIDAX Nakaizu Winery Hills Inc., serves concurrently as Representative Director of SHiDAX Corporation,a Company subsidiary.

6.

SHIDAX Nakaizu Winery Hills Inc. is a subsidiary of SHIDA Corporation, in which Representative Director Kinichi Shida of Company subsidiary
SHiDAX Corporation and his close relatives own a majority of voting rights.

7.

Transaction conditions, policies for deciding on transaction conditions, etc.
(*1) Interest on construction cooperation funds is determined based on the interest rate on borrowings by the Company subsidiary SHiDAX Corporation.
(*2) Advance payment of salaries of seconded personnel is made in the amount equal to actual costs.
(*3) Rent is determined based on valuation reports by real estate appraisers.

2. Notes on the parent company and significant affiliates(1) Parent company information
Previous consolidated fiscal year (April 1, 2022 – March 31, 2023)
Not applicable
Current consolidated fiscal year (April 1, 2023 – March 31, 2024)
Not applicable(2) Summary financial information on significant affiliates
There were no significant affiliates in the consolidated fiscal year under review.
SHiDAX Corporation, a significant affiliate in the previous consolidated fiscal year, is included in the scope of consolidation as aconsolidated subsidiary due to the acquisition of stock in SHIDA Holdings Corporation (now SHiDAX Holdings Corporation).
Previous consolidated
fiscal year

(Million yen)
Current consolidated
fiscal year

Total current assets

24,283–

Total non-current assets

8,911

–

Total current liabilities

18,639–Total non-current
liabilities

2,330

–

Total net assets

12,225–Net sales

30,359

–

458

–

1,043

–

Net income before taxes
Net income―122―

(Per-share information)
Previous consolidated fiscal year
(April 1, 2022 – March 31, 2023)

Current consolidated fiscal year
(April 1, 2023 – March 31, 2024)

Net assets per share

672.84 yen

795.17 yen

Earnings per share

49.45 yen

112.72 yen

– yen

– yen

Diluted earnings per share

Notes:
1. Diluted earnings per share is omitted because no potential shares had dilutive effects.
2. Shown below are the bases for calculating earnings per share and diluted earnings per share.
Previous consolidated
fiscal year
(April 1, 2022 – March 31,
2023)

Current consolidated
fiscal year
(April 1, 2023 – March 31,
2024)

1,807

4,120

–

–

1,807

4,120

36,555,918

36,558,053

Adjustments to profit attributable to owners of parent(million yen)––

Increase in shares of common stock––(Stock options included above [shares])

(–)

(–)

Earnings per share
Profit attributable to owners of parent (million yen)Amount not attributable to common stockholders (million
yen)Profit attributable to owners of parent attributable tocommon stock (million yen)
Average number of shares of common stock during theperiodDiluted eearnings per share

Summary of potential shares not included in calculation ofdiluted earnings per share because they had no dilutive effects

―123―

–

Stock options issued bysubsidiaries are not included
in calculation of diluted
earnings per share because
they had no dilutive effects.

(Important subsequent events)(Acquisition of treasury stock)
In its meeting held May 14, 2024, the Company Board of Directors resolved to acquire treasury stock pursuant to Article 156 of theCompanies Act, applicable mutatis mutandis under Article 165, Paragraph 3 of that Act.
(1) Reasons for acquisition of treasury stock
As its businesses are in a growth phase at present, the Company has adopted a policy of continuing to prioritize use of cash flows
from its businesses for investment in growth.*
At the same time, in light of the recent state of opportunities for investment in growth and share-price levels, the Company believes
that dynamic returns to shareholders will also contribute to maximizing corporate value. The Company has decided to acquire
these shares of treasury stock based on this recognition. The Company expects to dispose of the shares of treasury stock acquiredby various means, including use in future strategic mergers and acquisitions in exchange for shares of Company common stock.
The Company plans to raise all funds needed for this acquisition of treasury stock from funds on hand.
* Main areas of investment in growth(i) BtoC Subscription Business: New service development, investment in PR, IT investment, enhancement of logistics systemand equipment functions, etc.
(ii) BtoB Subscription Business: Mergers and acquisitions toward business expansion, enhancement of logistics, manufacturing,and other functions, etc.
(2) Acquisition details(i) Class of shares to be acquired(ii) Number of shares to be acquired(iii) Total value of shares to be acquired(iv) Period of acquisition of treasury stock(v) Acquisition method

Common stock
1,825,000 shares (max.)
3,000 million yen (max.)
From May 15 through October 31, 2024
Market purchases on the Tokyo Stock Exchange―124―

(v) Additional details to the consolidated financial statements
Details of bonds
Not applicable
Details of borrowings, etc.
Category

Starting balance(million yen)Ending balance(million yen)

Average interest rate(%)

Short-term borrowings

10,06015,045

0.38–

Current portion of long-termborrowings

27

2,166

1.77

–

Current portion of lease liabilities

705

1,270

1.11

–

74

14,648

1.89

2025–2033

11,293

18,598

1.14

2025–2039

–

–

–

–

22,161

51,728––Long-term borrowings (excluding
current portion)
Lease liabilities (excluding current
portion)
Other interest-bearing debt
Total

Repayment period

Notes:
1. Average interest rate indicates the weighted average interest rate on the ending balance of borrowings.
2. Shown below are long-term borrowings and lease liabilities (excluding current portions) planned for repayment within five
years from the ending date of the consolidated fiscal year.
More than one but
no more than
two years(million yen)More than two but
no more than
three years(million yen)More than three but
no more thanfour years(million yen)More than four but
no more than
five years(million yen)

Long-term
borrowings

1,771

1,770

1,762

1,757

Lease liabilities

1,245

1,256

1,262

1,272

Details of asset retirement obligations
Details of asset retirement obligations are omitted here because matters that would be covered in such detail are described as matterssubject to notes under Article 15-23 of the Ordinance on Terminology, Forms, and Preparation Methods of Consolidated Financial
Statements.

―125―

(2) Other
Quarterly information on the consolidated fiscal year under review(Cumulative periods)

First quarter

Second quarter

Third quarter

Consolidated fiscal
year under review

Net sales(million yen)

29,26857,43889,656

148,408

Net income before
taxes and otheradjustments(million yen)

1,196

2,338

4,776

6,416

Net income attributable(million yen)
to owners of parent

817

1,401

3,015

4,120

22.36

38.33

82.47

112.72

Earnings per share(yen)(Fiscal period)
Earnings (loss) per
share

First quarter(yen)

Second quarter

22.36

15.97

―126―

Third quarter
44.14

Fourth quarter
30.25

2. Nonconsolidated Financial Statements, etc.
(1) Nonconsolidated Financial Statements(i) Balance Sheet(Million yen)
As of March 31, 2023

As of March 31, 2024

AssetsCurrent assets
Cash and deposits
Accounts receivable–trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Accounts receivable–other*1 12,673*1 18,918*2 9,307*2 8,967

1,648
51

1,473
100

210

461

*2 3,224*2 1,520

Advances received
Prepaid expenses

7
426

17
481

Income taxes receivable
Other

5
152

0
185

Allowance for doubtful accounts

(233)

(261)

Total current assets

27,47331,865

Buildings
Structures

1,095
25

1,404
34

Machinery and equipment
Vehicles

2,062
12

1,944
8

Tools, furniture and fixtures
Leased assets

485
11,611646
19,373

Construction in progress

943

1,560

16,23624,972

2
1,477

1
1,475

Software in progress

255

319

Total intangible assets

1,735

1,795

Investment securities
Shares of subsidiaries and associates

651
13,641

1,011
18,872

Deferred tax assets
Leasehold and guarantee deposits

310*1 1,391

338*1 1,620

Other
Allowance for doubtful accounts*2 284*2 321*2 (1)*2 (58)

Total investments and other assets

16,277

22,10634,24948,87461,72280,739Non-current assets
Property, plant and equipment

Total property, plant and equipment
Intangible assets
Trademarks
SoftwareInvestments and other assets

Total non-current assets
Total assets―127―

(Million yen)
As of March 31, 2023

As of March 31, 2024

Liabilities
Current liabilities
Accounts payable–trade
Short-term borrowings*1 5,866*1 5,529*3 10,000*3 15,000

Lease liabilities
Accounts payable–other

690

1,222

*2 5,871*2 4,852

Accrued expenses
Income taxes payable

933
822

932
2,571

Accrued consumption taxes
Contract liabilities

429
357

362
247

Deposits received
Provision for point card certificates

85
80

180
87

Other

34

36

25,17031,023

11,267

18,536Long-term borrowings
Asset retirement obligations

124
549

112
648

Other

*2 51

*2 51

Total current liabilities
Non-current liabilities
Lease liabilities

Total non-current liabilities

11,993

19,34837,16450,372

3,995

3,995

Capital reserves
Other capital surplus

7,876
133

7,876
133

Total capital surplus

8,009

8,009

16,90322,64016,90322,640Treasury shares(4,503)(4,504)

Total shareholders’ equity

24,40430,141

Valuation difference on available-for-sale securities

153

225

Total valuation and translation adjustments

153

225

24,55830,36761,72280,739Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus

Retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings

Valuation and translation adjustments

Total net assets
Total liabilities and net assets―128―

(ii) Statement of Income(Million yen)
Fiscal year ended
March 31, 2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income

Fiscal year ended
March 31, 2024

*1 102,821*1 104,580*1 53,938*1 53,240

48,883

51,339*1,*2 44,591*1,*2 45,329

4,291

6,010

1

1

Dividend income
Gain on investments in partnership

4
–

0
9

Compensation income
Other

16
94

19
35

Total non-operating income

116

65

Non-operating expenses
Interest expenses

124

162

Loss on investments in investment partnerships
Foreign exchange losses

40
6

–
8

Differences on consumption taxes
Provision of allowance for doubtful accounts

–
–

43
58

Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of investment securities

5

1

176

274

4,230

5,802

–

6

Gain on sales of shares of subsidiaries and associates

–

4,094

Total extraordinary income

–

4,101

14

12

172

1,136

Extraordinary losses
Impairment losses
Loss on valuation of shares of subsidiaries andassociates
Loss on valuation of investment securities

143

49

330

1,198

Profit before income taxes

3,900

8,705

Income taxes–current
Income taxes–deferred

1,320
(25)

3,037
(68)

Total income taxes

1,295

2,968

Profit

2,605

5,737

Total extraordinary losses―129―

(iii) Statement of Changes in Shareholders’ Equity
Fiscal year ended March 31, 2023
(Million yen)
Shareholders’ equity
Capital surplus

Share capital

Balance at beginning of
periodCapitalreserves

Other capitalsurplus

3,994

7,874

1

1

133

Retained earnings
Other retained
earnings
Total capital
Total retained
Retained
surplusearnings
earnings
brought
forward
8,008

14,297

14,297

Treasuryshares(4,503)

Total
shareholders’equity21,797

Changes during period
Issuance of new shares

1

Net income
Purchase of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during
periodBalance at end of period

2,605

2,605

2,605
(0)

(0)

1

1

–

1

2,605

2,605

(0)

2,607

3,995

7,876

133

8,009

16,903

16,903(4,503)

24,404

Valuation and translation
adjustments
Valuation
Total valuationdifference onand translation
available-foradjustments
sale securities
Balance at beginning of
period2

24

24

Total net
assets21,821

Changes during period
Issuance of new shares

2

Net income

2,605

Purchase of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during
period

128

128

128

128

128

2,736

Balance at end of period

153

153

24,558(0)―130―

Fiscal year ended March 31, 2024
(Million yen)
Shareholders’ equity
Capital surplus

Share capital

Balance at beginning of
period3,995

Capitalreserves

Other capitalsurplus

7,876

133

Retained earnings
Other retained
earnings
Total capital
Total retained
Retained
surplusearnings
earnings
brought
forward
8,009

16,903

16,903

Treasuryshares(4,503)

Total
shareholders’equity24,404

Changes during period
Issuance of new shares–

Net income
Purchase of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during
periodBalance at end of period

5,737

5,737
(0)

(0)

–

–

–

–

5,737

5,737

(0)

5,736

3,995

7,876

133

8,009

22,64022,640(4,504)30,141

Valuation and translation
adjustments
Valuation
Total valuationdifference onand translation
available-foradjustments
sale securities
Balance at beginning of
period

5,737

153

153

Total net
assets

24,558Changes during period
Issuance of new shares–

Net income

5,743

Purchase of treasury
sharesNet changes in items
other than shareholders’equityTotal changes during
period

72

72

72

72

72

5,809

Balance at end of period

225

225

30,367(0)―131―Notes(Important accounting policies)
1. Asset valuation standards and methods(1) Securities
Shares of subsidiaries and associates
The moving average cost method is employed.
Available-for-sale securitiesThose other than stocks, etc. with no fair market value
The fair value method is employed. (The entire amount of any difference in valuation is recorded to net assets. Cost of sales
is calculated by the moving average method.)
Stocks, etc. with no fair market value
The moving average cost method is employed.
For investments in limited-liability investment partnerships and similar partnerships, the amount equivalent to equity is
included in the total amount based on the latest financial statements available according to the financial reporting datestipulated in the partnership agreement.
(2) Inventories
The Company employs the moving average cost method (with amounts on the balance sheet calculated by decreasing book value
in accordance with reductions in profitability), the FIFO cost method (with amounts on the balance sheet calculated by decreasing
book value in accordance with reductions in profitability), and the gross average cost method (with amounts on the balance sheet
calculated by decreasing book value in accordance with reductions in profitability).
2. Depreciation methods for non-current assets(1) Property, plant, and equipment (excluding leased assets)
The straight line method is employed.
The main useful lives are shown below:
Buildings:

2–21 years

Structures:

8–18 years

Machinery and equipment:

2–12 years

Vehicles:

1–4 years

Tools, furniture and fixtures:

1–15 years(2) Intangible assets (excluding leased assets)
The straight line method is employed. Software used by the Company is depreciated based on the useful life within the Company(five years).
(3) Leased assets
Leased assets related to finance lease transactions involving transfer of ownership:
Depreciated by the same method applied to property, plant, and equipment owned by the Company
Leased assets related to finance lease transactions other than those involving transfer of ownership:
Depreciated by the straight line method with the lease period as the useful life and a residual value of zero3. Accounting standards for allowances and provisions(1) Allowance for doubtful accounts
To be prepared for possible losses on doubtful claims, the Company provides for this allowance based on the actual rate of losses
from bad debts for general receivables and anticipated amounts unrecoverable based on a case-by-case assessment of recoverability
for specific claims, such as those with the potential for default and claims in reorganization.

―132―

(2) Provision for loyalty points
To provide for the use of points awarded to customers as Action Points based on the loyalty point program intended as a sales
promotion measure, the anticipated future usage amount as of the end of the current fiscal year is recorded.
4. Accounting standards for significant revenues and expenses
Details of the primary obligations in significant businesses related to revenue from contracts with customers of the Company and thenormal timing of fulfillment of such performance obligations (normal timing of revenue recognition) are shown below.
The Company’s primary business is the sale of food and related products. Revenue from the sale of such products is recognized at the
point in time at which the products are delivered to customers because the customers are regarded to have assumed control of the
products and related obligations deemed fulfilled at that time.
In addition, by applying the alternative treatment specified in Paragraph 98 of the Implementation Guidance on the AccountingStandard for Revenue Recognition, revenue is recognized in domestic sales of products, primarily in the food delivery business, at thetime of shipment, assuming ordinary shipping times to the customer.
Since the price on transactions generally is received within 60 days from the fulfillment of the obligations, they include no material
financial elements.
5. Other important matters serving as bases for the preparation of financial statements
Method of processing deferred assets
Share issuance costs
The entire amount of share issuance costs is recorded as expenses at the time of payment.

―133―

(Significant accounting estimates)
Accounts that involve especially significant accounting estimates on the financial statements are shown below.
1. Evaluation of shares of stock in Oisix Inc.
(1) Amount recorded on financial statements for the fiscal year under review(Million yen)Previous fiscal year
Shares of subsidiaries
and associates

Current fiscal year

3,010

3,010

No loss was incurred on valuation of shares of subsidiaries and associates for these shares during the fiscal year under review.

(2) Method for calculating the amount recorded on the financial statements for the fiscal year under review
Shares of stock in subsidiaries and consolidated affiliates are appraised by the moving average cost method. Shares of stockin Oisix Inc. were acquired at relatively high price compared to net assets per share derived from financial statements,
reflecting the company’s excess earnings power and other factors. In such cases, the effective value may well decline
markedly due to a decline in excess earning power and other factors over subsequent periods. Even if the issuer’s financial
standing does not deteriorate in such cases, impairment is recorded if there is little prospect of improvement in excess earning
power based on the expectation that such conditions are likely to persist.
Oisix Inc. operates the consolidated Group’s investment business in the United States. It is the parent company of Three
Limes, Inc. and YOKO Street, INC., also consolidated subsidiaries. Accordingly, in calculating the effective value of sharesof stock in Oisix Inc., valuations of shares in Three Limes, Inc. and YOKO Street, INC. are taken into consideration. The
excess earning power of Three Limes, Inc. is taken into consideration in such valuations.

(3) Major assumptions in calculating the amount recorded to the financial statements for the fiscal year under review
See “Part 5. Accounting: 1. Consolidated financial statements: (1) Notes to the consolidated financial statements: (Significant
accounting estimates)” for the major assumptions underlying calculations of effective value.

(4) Impact on financial statements for the next fiscal year
A loss on the valuation of shares of subsidiaries and associates may be incurred in the next fiscal year if a change in theeconomic or business conditions of Oisix Inc. compels a revision of the assumptions employed in these estimates.

2. Evaluation of shares of stock in SHIDA Holdings Corporation (now SHiDAX Holdings Corporation)(1) Amount recorded on financial statements for the fiscal year under review
Shares of subsidiaries and associates on the balance sheet includes 14,192 million yen as the book value of shares of stock in
SHIDA Holdings Corporation (now SHiDAX Holdings Corporation), a consolidated subsidiary of the Company. No loss wasincurred on the valuation of shares of subsidiaries and associates for these shares during the fiscal year under review.

(2) Method for calculating the amount recorded on the financial statements for the fiscal year under review
Shares of stock in subsidiaries and consolidated affiliates are appraised by the moving average cost method. Shares of stockin SHIDA Holdings Corporation (now SHiDAX Holdings Corporation) were acquired at relatively high cost compared to net
assets per share derived from financial statements reflecting the company’s excess earning power and other factors. In suchcases, the effective value may well decline markedly due to a decline in excess earning power and other factors oversubsequent periods. Even if the issuer’s financial standing does not deteriorate in such cases, impairment is recorded if there
is little prospect of improvement in excess earning power based on the expectation that such conditions are likely to persist.
In making decisions on impairment of shares of stock in SHIDA Holdings Corporation (now SHiDAX Holdings Corporation),
estimates based on future business plans and other matters are made in evaluation, since the effective value of the shares―134―

includes excess earning power.
SHIDA Holdings Corporation (now SHiDAX Holdings Corporation) is the parent company of SHiDAX Corporation, also a
consolidated subsidiary, and its consolidated subsidiaries. Accordingly, in calculating the effective value of shares of stock in
SHIDA Holdings Corporation (now SHiDAX Holdings Corporation), valuation of shares in SHiDAX Corporation is taken
into consideration as well. The excess earning power of SHiDAX Corporation and its consolidated subsidiaries is taken into
consideration in such valuations.
(3) Major assumptions in calculating the amount recorded to the financial statements for the fiscal year under review
See “Part 5. Accounting: 1. Consolidated financial statements: (1) Notes to the consolidated financial statements: (Significant
accounting estimates)” for the major assumptions underlying calculations of effective value.
(4) Impact on financial statements for the next fiscal year
There is a possibility that loss on valuation of shares of subsidiaries and associates may be incurred in the next fiscal year if
a change in the economic or business conditions of the consolidated group of SHIDA Holdings Corporation (now SHiDAX
Holdings Corporation) compels a revision of the assumptions employed in these estimates.
(Changes in presentation)(Income Statement)
Material recycling revenues, revocation gains of gift cards, recoveries of written off receivables, subsidy income, and outsourcing
service income presented as separate line items under non-operating income in the previous fiscal year are included under other nonoperating income beginning in this fiscal year, due to decreases in their monetary significance. The financial statements for theprevious fiscal year have been reclassified to reflect this change in presentation.
As a result, the 6 million yen in material recycling revenues, 1 million yen in revocation gains of gift cards, 9 million yen in recoveriesof written off receivables, 3 million yen in subsidy income, 26 million yen in outsourcing service income, and 46 million yen in othernon-operating income under non-operating income on the consolidated income statement for the previous fiscal year have been
reclassified as 94 million yen in other non-operating income.

―135―

(Balance Sheet)*1

Collateral assets and collateralized obligations
Assets pledged as collateral are shown below.
Previous fiscal year
(as of March 31, 2023)
Time deposits
Guarantee money
Total

Current fiscal year
(as of March 31, 2024)

10 million yen

10 million yen

36

36

46

46

Collateralized obligations are shown below.
Previous fiscal year
(as of March 31, 2023)
Accounts payable–trade
Total
*2

29 million yen

25 million yen

29

25

Monetary claims and obligations on affiliates
Previous fiscal year
(as of March 31, 2023)*3

Current fiscal year
(as of March 31, 2024)

Current fiscal year
(as of March 31, 2024)

Short-term monetary claims

302 million yen

374 million yen

Short-term monetary obligations

152

180

Long-term monetary claims

259

298

Long-term monetary obligations

50

50

The Company has concluded agreements on current account overdraft and commitment lines of credit with its four main banks inorder to raise working capital efficiently.
Unexecuted balances of current account overdraft and commitment lines of credit under these agreements as of the end of the
fiscal year under review are shown below.

Total amount of agreements oncurrent account overdraft andcommitment lines of credit
Executed balance of loans
Difference

Previous fiscal year
(as of March 31, 2023)

Current fiscal year
(as of March 31, 2024)

16,000 million yen

29,000 million yen

10,000 million yen

15,000 million yen

6,000 million yen

14,000 million yen―136―

(Income Statement)*1

Balances of transactions with affiliates
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Balances of operating transactions
Net sales
Net purchases of goods
Selling, general and administrative
expenses
Balances of transactions other thanoperating transactions*2

1,860 million yen

2,123 million yen

1,069

1,411

390

528

38

4

Expenses in the category of selling expenses accounted for 56% of selling, general and administrative expenses in the previous
fiscal year and 57% in the current fiscal year. Expenses in the category of general and administrative expenses accounted for 44%
of selling, general and administrative expenses in the previous fiscal year and 43% in the current fiscal year.
Significant line items under selling, general and administrative expenses, and their amounts are shown below.
Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2024

Sales promotion expenses

7,864 million yen

7,919 million yen

Packing and shipping expenses

12,783

12,705

Salaries and allowances

4,695

4,735

Outsourcing expenses
Provision for allowance for doubtful
accounts
Provision for loyalty points

5,798

5,720

152

235

(20)

78

Depreciation expenses

1,575

1,761

―137―

(Securities)
Previous fiscal year (as of March 31, 2023)
Category

Amount recorded on balance
sheet (million yen)

Current market value(million yen)

Difference(million yen)

Shares in subsidiaries

–

–

–

Shares in affiliates

8,527

10,892

2,365

Total

8,527

10,8922,365

Note: Amount recorded on balance sheet of shares of stock, etc. with no market prices, not included above
Category

This fiscal year (million yen)

Shares in subsidiaries

3,760

Shares in affiliates

1,353

Total

5,114

Current fiscal year (as of March 31, 2024)
Category

Amount recorded on balance
sheet (million yen)

Current market value(million yen)

Difference(million yen)

Shares in subsidiaries

–

–

–

Shares in affiliates

–

–

–

Total

–

–

–

Note: Amount recorded on balance sheet of shares of stock, etc. with no market prices, not included above
Category

This fiscal year (million yen)

Shares in subsidiaries

18,395

Shares in affiliates

477

Total

18,872―138―

(Tax effect accounting)
1. Breakdown of main causes of occurrence of deferred tax assets and deferred tax liabilities
Previous fiscal year
(as of March 31, 2023)

Current fiscal year
(as of March 31, 2024)

Deferred tax assets
Provision for loyalty points

24 million yen

26 million yen

Allowance for doubtful accounts

72

97

Contract liabilities

96

65

Income taxes payable

65

149

Impairment loss

50

39

Excess depreciation

14

38

Asset retirement obligations

168

198

Filing adjustments for lease transactions

105

117

Shares of subsidiaries and associates

570

918

Investment securities

80

86

Other

35

36

Subtotal of deferred tax assets

1,283

1,775

Valuation allowances(820)(1,222)

Total deferred tax assets

462

553

Retirement costs on asset retirement obligations

(94)

(115)

Valuation loss on available-for-sale securities

(57)

(99)

Total deferred tax liabilities

(152)

(215)

Net deferred tax assets

310

338

Deferred tax liabilities

2. Breakdown of major account items generating differences between statutory effective tax rate and income tax rate applicable after
application of tax effect accounting
Previous fiscal year
(as of March 31, 2023)

Current fiscal year
(as of March 31, 2024)

30.6%

30.6%

0.2

0.1

0.5

0.2

Special deduction for increased income

–

(1.1)

Change in amount of valuation allowance

2.0

4.6

Other
Income tax rate applicable after application of tax
effect accounting

(0.2)

(0.4)

33.2

34.1

Statutory effective tax rate
Items not included in losses permanently, suchas entertainment expenses
Per capita apportionment of residents’ tax(Revenue recognition)
Omitted here because the contents remain unchanged from that under “Part 5. Accounting: 1. Consolidated financial statements: (1)Notes to the consolidated financial statements: (Revenue recognition).”―139―

(Important subsequent events)(Acquisition of treasury stock)
In its meeting held May 14, 2024, the Company Board of Directors resolved to acquire treasury stock pursuant to Article 156 of theCompanies Act, applicable mutatis mutandis under Article 165, Paragraph 3 of that Act.
(1) Reasons for acquisition of treasury stock
As its businesses are in a growth phase at present, the Company has adopted a policy of continuing to prioritize use of cash flows
from its businesses for investment in growth.*
At the same time, in light of the recent state of opportunities for investment in growth and share-price levels, the Company believes
that dynamic returns to shareholders will also contribute to maximizing corporate value. The Company has decided to acquire
these shares of treasury stock based on this recognition. The Company expects to dispose of the shares of treasury stock acquiredby various means, including use in future strategic mergers and acquisitions in exchange for shares of Company common stock.
The Company plans to raise all funds needed for this acquisition of treasury stock from funds on hand.
* Main areas of investment in growth(i) BtoC Subscription Business: New service development, investment in PR, IT investment, enhancement of logistics systemand equipment functions, etc.
(ii) BtoB Subscription Business: Mergers and acquisitions toward business expansion, enhancement of logistics, manufacturing,and other functions, etc.
(2) Acquisition details(i) Class of shares to be acquired(ii) Number of shares to be acquired(iii) Total value of shares to be acquired(iv) Period of acquisition of treasury stock(v) Acquisition method

Common stock
1,825,000 shares (max.)
3,000 million yen (max.)
From May 15 through October 31, 2024
Market purchases on the Tokyo Stock Exchange―140―

(iv) Additional details for financial statements

Intangible assets

Property, plant and equipment

Category

Details of property, plant and equipment, etc.

Type of asset

Startingbalance(million yen)

Increase
Decrease
Depreciation Ending book
EndingCumulative
duringduringduringvalue after
balancedepreciation
periodperiodperioddeduction(million yen) (million yen)(million yen) (million yen)(million yen) (million yen)

Buildings

1,863

408

104

2,168

763

99

1,404

Structures

32

12

–

44

9

2

34

2,737

196

154

2,778

834

233

1,944

Vehicles

16

–

–

16

7

4

8

Tools, furniture andfixtures

806

255

33

1,027

381

93

646

Leased assets

13,2598,626

921,8762,502

860

19,373

Construction inprogress

943

1,077

460

1,560

–

–

1,560

Total

19,657

10,576762

29,471

4,499

1,294

24,972

6

–

–

6

5

0

1

4,550

557

13
(12)

5,093

3,618

546

1,475

255

691

628

319

–

–

319

4,812

1,248

641
(12)

5,420

3,624

546

1,795

Machinery andequipment

Trademarks
Software
Software in progress
Total

Notes:
1. Figures in parentheses under decrease during period are impairment amounts recorded during the period included in the figures
above.
2. Major items included in increase during period are shown below.

3.

Buildings:

ORD Atsugi Cold Storage Station

351 million yen

Machinery and equipment:

ORD Ebina Station

119 million yen

Tools, furniture and fixtures:

ORD Atsugi Cold Storage Station

223 million yen

Software:

System and other upgrades

199 million yen

Software:Sales administration system

112 million yen

Software:

ORD Atsugi Cold Storage Station

64 million yen

Starting and ending balances are based on acquisition prices.
Details of allowances

Category

Starting balance(million yen)

Decrease
Increase during
during period
period(intended use)
(million yen)(million yen)

Decreaseduring period(other)(million yen)Ending balance(million yen)

Allowance for doubtful
233
261
205
28
261
accounts (current)
Provision for loyalty
80
87
71
8
87
pointsAllowance for doubtful
1
58
–
1
58
accounts (fixed)
Notes: Decrease during period (other) in allowance for doubtful accounts and provision for loyalty points are due to reversing
entries.

―141―

(2) Details of main assets and liabilities
Omitted here because the Company prepares consolidated financial statements(3) Other matters
Not applicable―142―Section 6. Overview of stock administration of the reporting company
Business year

April 1 through March 31

Regular General Meeting of
Shareholders

Held within three months after the end of each business year

Basis date

March 31

Basis dates for dividends ofsurplus
Minimum trading unit ofsharesPurchase of shares in lessthan the minimum trading
unit

September 30, March 31
100 shares

Administrator ofshareholder registry

Securities Agency Division, Mitsubishi UFJ Trust and Banking Corporation
4-5 Marunouchi 1-chome, Chiyoda-ku, Tokyo
Mitsubishi UFJ Trust and Banking Corporation
4-5 Marunouchi 1-chome, Chiyoda-ku, Tokyo

Brokerage office–

Purchase fee

None

AgencyMethod for publication of
public notices

Company public notices are published electronically. However, in the event of an incident thatmakes it impossible to publish notices electronically or under other unavoidable circumstances,public notices are published in the Nihon Keizai Shimbun newspaper.
URL for public notices: http://www.oisixradaichi.co.jp

Special benefits for
Not applicable
shareholders
Notes: Company shareholders cannot exercise rights other than the following on shares held in less than the minimum trading unit:(1) Rights enumerated in the subparagraphs to Article 189, Paragraph 2 of the Companies Act(2) Right to present demands under the provisions of Article 166, Paragraph 1 of the Companies Act(3) Rights to allocations of shares and stock warrants offered in accordance with the number of shares held―143―Section 7. Reference information on the reporting Company
1. Parent company or similar party for the reporting Company
The Company has no parent company or similar party as defied by the provisions of Article 24-7, Paragraph 1 of the Financial
Instruments and Exchange Act.

2. Other reference information
The Company submitted the following documents during the period from the start date of the business year through the date on which
the Annual Securities Report was submitted.
(1) Annual Securities Report, attached documents, and confirmation letter
Submitted to the Director-General of the Kanto Local Finance Office on June 28, 2023 for the 26th business year (April 1, 2022 –March 31, 2023)(2) Internal controls report and attached documents
Submitted to the Director-General of the Kanto Local Finance Office on June 28, 2023
(3) Quarterly reports and confirmation lettersFirst quarter of the 27th business year (April 1 – June 30, 2023):

Submitted to the Director-General of the Kanto Local
Finance Office on August 14, 2023

Second quarter of the 27th busine year (July 1 – September 30, 2023):

Submitted to the Director-General of the Kanto Local
Finance Office on November 13, 2023

Third quarter of the 27th busine year (October 1 – December 31, 2023): Submitted to the Director-General of the Kanto Local
Finance Office on February 14, 2024
(4) Irregular reports
Irregular reports under the provisions of Article 19, Paragraph 2, Subparagraph 9-2 of the Cabinet Office Order on Disclosure of
Corporate Affairs (results of exercise of voting rights in general meetings of shareholders)Submitted to the Director-General of the Kanto Local Finance Office on June 30, 2023
Irregular reports under the provisions of Article 19, Paragraph 2, Subparagraph 3 (changes in specified subsidiaries) and
Subparagraph 8-2 (decisions on acquisition of subsidiaries) of the Cabinet Office Order on Disclosure of Corporate Affairs
Submitted to the Director-General of the Kanto Local Finance Office on November 10, 2023
Irregular reports under the provisions of Article 19, Paragraph 2, Subparagraphs 12 and 19 of the Cabinet Office Order on
Disclosure of Corporate Affairs (matters having material impacts on financial standing, business results, and cash flows)
Submitted to the Director-General of the Kanto Local Finance Office on December 26, 2023
Irregular reports under the provisions of Article 19, Paragraph 2, Subparagraph 19 of the Cabinet Office Order on Disclosure of
Corporate Affairs (matters having material impacts on financial standing, business results, and cash flows)
Submitted to the Director-General of the Kanto Local Finance Office on May 15, 2024
(5) Correction report on irregular report
Correction report (correction report on the irregular report under (4) above)
Submitted to the Director-General of the Kanto Local Finance Office on February 13, 2024
(6) Report on status of purchase of treasury stock certificates
Submitted to the Director-General of the Kanto Local Finance Office on June 12, 2024

―144―

Part 2. Information on the reporting Company’s guarantor, etc.
Not applicable―145―Independent auditor’s audit report and internal controls audit report
June 26, 2024

To the Board of Directors of Oisix ra daichi Inc.

Deloitte Touche Tohmatsu LLC
Tokyo Office

Engagement Partner

Koichi Yano, CPA

Engagement Partner

Takeshi Sase, CPA

Engagement Partner

Kenji Oyama, CPA<Audit of consolidated financial statements>
Auditor’s opinion
We have audited the consolidated financial statements of Oisix ra daichi Inc. for the consolidated fiscal year from April 1, 2023 throughMarch 31, 2024, for the purposes of auditing and verification pursuant to the provisions of Article 193-2, Paragraph 1 of the Financial
Instruments and Exchange Act. We have audited the Consolidated Balance Sheet, Consolidated Income Statement, Consolidated
Statement of Changes to Shareholders’ Equity, Consolidated Statement of Comprehensive Income, Consolidated Statement of Cash
Flows, mportant matters serving as bases for the preparation of the consolidated financial statements, and other notes to and attendantdetails of the consolidated financial statements.
In our opinion, the consolidated financial statements referred to above fairly present all material aspects regarding financial status as ofMarch 31, 2024 and the business performance and cash flow in the fiscal year ending on that date of Oisix ra daichi Inc. and its
consolidated subsidiaries, in full compliance with generally accepted principles of corporate accounting in Japan.
Evidence for the auditor’s opinion
We conducted our audit in accordance with generally accepted principles of auditing in Japan. Our responsibilities under these principles
of auditing are described under “The responsibilities of the auditor in auditing the consolidated financial statements.” In accordance withthe rules governing professional ethics in Japan, we are independent from the Company and its consolidated subsidiaries and fulfill allother ethical responsibilities of an auditor. We believe we have obtained and established sufficient and appropriate grounds to serve as
the basis for the statement of our opinion regarding the audit.

―146―

Important matters considered in the audit
Important matters considered in the audit are matters judged particularly important by the auditors, as professionals, in auditing theconsolidated financial statements for this consolidated fiscal year. Important matters considered in the audit involve the process ofauditing the consolidated financial statements as a whole and the formation of the auditor’s opinion. They are not meant to express ouropinions on the specifics concerning relevant matters.
Necessity of impairment of goodwill
Details of important matters considered in the audit
and reasons for decision

Handling in our audit

As noted under “Notes: (Significant accounting estimates),”
Oisix ra daichi Inc. (“Company” hereinafter) recorded on theConsolidated Balance Sheet for the consolidated fiscal year
under review goodwill of 615 million yen on Three Limes, Inc.,
recognized when the consolidated subsidiary Oisix Inc.
acquired Three Limes, Inc.
Since Oisix Inc. prepares its financial statements in accordancewith US GAAP, under the Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries, etc. for
Consolidated Financial Statements (Accounting Standards
Board of Japan [ASBJ] PITF No. 18), the Company uses in its
consolidation procedures the financial information prepared by
Oisix Inc., revising the accounting treatment of goodwill, etc.
Under US GAAP, if impairment testing indicates fair value lessthan book value, the book value is reduced to fair value, up to
the amount of goodwill, while the decrease in book value isrecognized as an impairment loss on goodwill.
Despite continued efforts to strengthen the business structure of
the BtoC Subscription Business in the US (vegan foodingredients delivery business) operated by Three Limes, Inc.,
results deteriorated in the consolidated fiscal year under review.
The Company undertook impairment testing for goodwill in the
consolidated fiscal year under review in light of the signs of
impairment recognized due to factors including failure toachieve the results of business plans for the business that served
as bases for calculating value in the acquisition of this business.
The impairment test was conducted by calculating fair value
using the discounted cash flow method and comparing this fairvalue with the book value. Since the results showed that fairvalue based on the most recent business plans was less thanbook value, the Company recognized an impairment loss on
goodwill of 372 million yen in the consolidated fiscal year
under review.
As noted under “Notes: (Significant accounting estimates),”estimates of future cash flow based on future business plans
used in calculation of fair value include significant assumptions
such as projected inflation in the US, expansion of the productlineup and increasing the number of products offered, increased
sales in businesses other than the food ingredients delivery
business, controlling purchase prices, reduced waste costs, andreduced logistics costs (logistics center and delivery costs).
These involve material uncertainties. In addition, in
consideration of the stage of Three Limes, Inc. on the businesslife cycle, the discount rate used in calculating fair value waschosen based on the American Institute of CPAs (AICPA)
accounting and valuation guide for startups. Management’s
decisions on these assumptions have materially impacted thecalculation of fair value.

We have implemented the following audit procedures regarding
the need for impairment of goodwill on Three Limes, Inc.
• We evaluated the states of maintenance and operation ofinternal controls related to impairment testing on goodwill.
• We confirmed the consistency of future cash flows based on
future plans with the budget for the following fiscal year andfuture business plans, both approved by management, andalso evaluated the accuracy of estimates in management’s
future plans by comparing budgets and actual figures inprevious fiscal years regarding business plans.
• We evaluated the reasonableness of business plans throughthe following procedures to assess the propriety of material
assumptions.
(1) Consistency between management’s forecasts ofinflation in the US and external data
(2) Questioning management on the following measures,comparison with past results, and perusal of related
internal materials
 Expansion of the product lineup and increasing thenumber of products offered Increase in sales in businesses other than the foodingredients delivery business Control of purchase prices
 Reductions in waste costs
 Reductions in logistics costs (logistics center anddelivery costs)• We considered consistency of the input data used bymanagement in calculating future discount rates withavailable external information.

We have identified the need for impairment of goodwill as animportant matter to be considered in the audit because valuationof goodwill related to Three Limes, Inc. is of particularimportance to auditing of the consolidated financial statements
for the consolidated fiscal year under review for the reasons
above.

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Recoverability of deferred tax assets related to the tax-sharing group applying the group tax-sharing system
Details of important matters considered in the audit andreasons for decision
Deferred tax assets of 5,132 million yen are recorded on theConsolidated Balance Sheet for the consolidated fiscal year
under review. As described under “Notes: (Tax effectaccounting),” the amount of deferred tax assets prior tooffsetting against deferred tax liabilities was 5,548 million yen,and −5,769 million yen in valuation allowances was deductedfrom the total amount of 11,317 million yen in deferred tax
assets related to future temporary differences in deductions andlosses carried forward for tax purposes.
Of these figures, the recorded amount of deferred tax assets
related to losses carried forward for tax purposes after
deduction of valuation allowances was 3,844 million yen,which was recognized mainly at the consolidated subsidiary
SHiDAX Corporation and its subsidiaries.
SHiDAX Corporation applies the group tax-sharing system,and the Company judges the recoverability of SHiDAX
Corporation’s deferred tax assets based on factors such as
future taxable income and results of scheduling of temporary
differences, reflecting the corporate classification of SHiDAX
Corporation and its domestic consolidated subsidiaries (“taxsharing group” hereinafter) as a whole, assuming application of
the group tax-sharing system.
The tax-sharing group’s amounts of future taxable income are
estimated based on profit plans prepared by management. As
described under “Notes: (Significant accounting estimates),”these profit plans include material assumptions reflecting
management’s judgment of matters such as inflation and wage
increases and involve uncertainties.
We have identified the propriety of judgments concerning therecoverability of deferred tax assets related to the tax-sharing
group, of which SHiDAX Corporation is the tax-sharing parent
corporation, as an important matter to be considered in the audit
because it is of particular importance in auditing of theconsolidated financial statements for the consolidated fiscal
year under review for the reasons above.

Handling in our audit
We have implemented mainly the following procedures inconsidering the recoverability of deferred tax assets related to
the group tax-sharing system. These include audit procedures
implemented by auditors of the subject constituent units under
our instruction.
• We assessed the state of internal controls related todetermining recoverability of deferred tax assets and assessed
the efficacy of their operation. In this assessment, we focusedin particular on the process of estimating future taxable
income.
• We implemented the following procedures to assess thereasonability of estimates of future taxable income.
(1) We considered the validity of the estimation period for
future taxable income used in determining therecoverability of deferred tax assets, taking into accountmatters such as trends in past taxable income amounts andbusiness conditions of the tax-sharing group.
(2) We considered the tax-sharing group’s achievement of pasttaxable income plans and causes of differences between
actual and planned figures and investigated whether the
impacts of the causes of such differences were reflected
properly in estimates of future taxable income amounts.
(3) In order to assess the propriety of the following important
assumptions on future profit plans on which estimates oftaxable income are based, we assessed the reasonability ofprofit plans by questioning management, comparing past
results, checking for consistency with external data, andperusing related internal materials to assess thereasonability of profit plans: Inflation
 Wage increases• To verify that the group tax-sharing system was applied
appropriate, we employed internal experts (tax specialists) toinvestigate the propriety thereof.

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Other published information, etc.
Other published information, etc. refers to information included in the Annual Securities Report other than the consolidated andnonconsolidated financial statements and the audit reports thereon. Management’s responsibility is to prepare and disclose otherpublished information. The Corporate Auditor’s and audit firm’s responsibility is to monitor the performance of the duties of directors
in maintenance and operation of the reporting process for other published information.
Other published information is not included in the subject of our audit opinion on the consolidated financial statements, and we do notstate an opinion on other published information.
Our responsibility in auditing the consolidated financial statements is to review the other published information and, in the process ofthat review, to watch for any material discrepancies between the other published information and the consolidated financial statements
or information we have obtained in the process of our audit and for any signs of material errors in the other published information aside
from such material discrepancies.
We are expected to report any material errors we have identified in the other published information through the processes we have
implemented.
We have found nothing worthy of reporting regarding the other published information.

The responsibilities of management, the Corporate Auditors, and the Board of Auditors regarding the consolidated financial
statements
Management is responsible for the suitable preparation of consolidated financial statements that comply with and meet generally accepted
corporate accounting standards and principles of corporate accounting in Japan. This includes the development and operation of internal
controls deemed necessary by management for the purpose of preparation of consolidated financial statements that present information
accurately and are free of material misrepresentations due to malfeasance or error.
In preparing the consolidated financial statements, management is responsible for assessing the propriety of preparing consolidated
financial statements based on the going-concern assumption and disclosing, as necessary, matters related to the going-concern
assumption in accordance with generally accepted principles of corporate accounting in Japan.
The Corporate Auditors and the Board of Auditors are responsible for monitoring the performance of the duties of the directors inmaintenance and operation of the financial reporting process.

The responsibilities of the auditor in auditing the consolidated financial statements
Our responsibilities are to secure, based on our audit, reasonable assurance concerning whether the consolidated financial statements as
a whole are free of material misrepresentations due to malfeasance or error and to state, in the audit report, an independent opinion on
the consolidated financial statements. Misstatements may arise due to malfeasance or error. A statement is deemed to constitute a material
misstatement if it can reasonably be expected to impact decision-making by users of the consolidated financial statements, either
individually or in sum.
Through the audit process in accordance with generally accepted principles of auditing in Japan, we implemented the following
procedures based on our judgment as specialists and a professional spirit of skeptical inquiry:• Identification and assessment of the risks of material misrepresentations due to malfeasance or error; drafting and implementationof audit procedures suited to the risks of material misrepresentation; making judgments on selection and application of audit
procedures; and, securing sufficient and appropriate audit evidence to serve as the basis for statement of our opinion.
• While the purpose of an audit is not to offer an opinion on the efficacy of internal controls, in assessing risks, we do consider internal
controls related to the audit in order to formulate audit procedures appropriate to the circumstances.
• We assess the propriety of the accounting policies adopted by management and their methods of application as well as thereasonability of accounting estimates made by management and the appropriateness of related notes.
• We reach a conclusion on whether the management’s preparation of consolidated financial statements based on the going-concern
assumption is appropriate and whether, based on the audit evidence obtained, any material uncertainties can be identified withregard to phenomena or circumstances that may warrant material doubts regarding the going-concern assumption. If any material
uncertainties are recognized regarding the going-concern assumption, attention must be drawn to the notes to the consolidated
financial statements in the audit report. If the notes to the consolidated financial statements concerning material uncertainties areinappropriate, a qualified opinion must be expressed that mentions certain exceptions to the consolidated financial statements. The―149―

auditor’s conclusions are based on the audit evidence obtained through the date of the audit report, and there is a possibility that
future events or conditions could make it impossible for the Company to continue as a going concern.
• We assess whether the presentation and notes in the consolidated financial statements conform to the generally accepted principles
of corporate accounting in Japan; the presentation, structures, and content of the consolidated financial statements, including related
notes; and whether the consolidated financial statements accurately present the transactions and accounting facts on which they arebased.
• We obtain sufficient and appropriate audit evidence concerning the financial information of the Company and its consolidated
subsidiaries to serve as the basis for the statement of our opinion regarding the consolidated financial statements. We are responsiblefor instructions, oversight, and implementation related to auditing of the consolidated financial statements. We are responsible forexpressing an independent audit opinion.
We report to the Corporate Auditors and the Board of Auditors on the scope and timing of the planned audit; any material discoveries of
the audit, including material deficiencies in internal controls systems identified in the process of auditing; and other matters required
under auditing standards.
We report to the Corporate Auditors and the Board of Auditors on the fact that we maintain independence in accordance with the rules
governing professional ethics in Japan and on any safeguards taken to eliminate or mitigate to tolerable levels any impediments andother matters that reasonably may be considered to impact the independence of auditors.
We identify as important matters to be considered in the audit matters judged to be especially important in audits of the consolidated
financial statements for this consolidated fiscal year from among those items we have discussed with the Corporate Auditors and theBoard of Auditors and describe these in the audit report. However, such items are not described in cases such as when their disclosure is
prohibited under laws, regulations, etc. or the extremely rare cases in which we have determined that they should not be reported because
the disadvantages of reporting them in the audit report would reasonably be considered to exceed any public benefit from their disclosure.

<Audit of internal controls>
Auditor’s opinion
We have audited the Internal Controls Report of Oisix ra daichi Inc. as of March 31, 2024, for the purposes of auditing and verification
pursuant to the provisions of Article 193-2, Paragraph 2 of the Financial Instruments and Exchange Act.
In our opinion, the above Internal Controls Report indicating that the internal controls of Oisix ra daichi Inc. are valid with regard to
financial reporting as of March 31, 2024 conforms to the standards on assessment of internal controls related to financial reporting
generally accepted in Japan and accurately presents the results of assessment of internal controls related to financial reporting on allmaterial points.
Evidence for the auditor’s opinion
We conducted our audit of internal controls in accordance with generally accepted principles of auditing of internal controls related tofinancial reporting in Japan. Our responsibilities under these principles of auditing of internal controls related to financial reporting aredescribed under “The responsibilities of the auditor in audits of internal controls.” In accordance with the rules governing professional
ethics in Japan, we are independent from the Company and its consolidated subsidiaries and fulfill all other ethical responsibilities of anauditor. We believe we have obtained sufficient and appropriate grounds to serve as the basis for the statement of our opinion regarding
the audit.
The responsibilities of management, the Corporate Auditors, and the Board of Auditors regarding the Internal Controls ReportManagement is responsible for the development and operation of internal controls on financial reporting and for preparing and disclosing
the Internal Control Report in compliance with the standards on assessment of internal controls related to financial reporting generally
accepted in Japan.
The Corporate Auditors and the Board of Auditors are responsible for monitoring and verifying the states of maintenance and operationof internal controls related to financial reporting.
It might not be possible to completely prevent or detect misrepresentation in financial reports through internal controls on financial
reporting.

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The responsibilities of the auditor in audits of internal controls
Our responsibilities are to secure, based on our audit, reasonable assurance concerning whether the Internal Controls Report is free ofmaterial misrepresentation and to state, in the internal controls audit report, an independent opinion on the Internal Controls Report.
Through the audit process in accordance with generally accepted principles of auditing of internal controls related to financial reportingin Japan, we implemented the following procedures based on our judgment as specialists and a professional spirit of skeptical inquiry:• Audit procedures to obtain the audit evidence regarding the results of assessment of internal controls related to financial reportingin the Internal Controls Report; the auditor has the option of choosing to apply and implement audit procedures for internal controls
based on its assessment of the importance of their impact on the reliability of financial reporting;• Consideration of the overall presentation of the Internal Controls Report, including the scope of assessment of internal controls
related to financial reporting, assessment procedures, and management’s description of the results of assessment;• Securing sufficient and appropriate audit evidence regarding the results of assessment of internal controls related to financial
reporting in the Internal Controls Report. We are responsible for instructions, oversight, and implementation related to auditing of
the Internal Controls Report. We are responsible for expressing an independent audit opinion.
We report to the Corporate Auditors and the Board of Auditors on the scope and timing of the planned internal-controls audit; anymaterial discoveries of the audit; material deficiencies to be disclosed in internal controls systems identified in the process of auditing
and results of correction measures for them; and other matters required under internal-controls auditing standards.
We report to the Corporate Auditors and the Board of Auditors on the fact that we maintain independence in accordance with the rules
governing professional ethics in Japan and on any safeguards taken to eliminate or mitigate any impediments and other matters that may
reasonably be considered to impact the independence of auditors.
<Remuneration information>
Amounts of remuneration paid to us and members of our network for audit certification of the Company and its subsidiaries and nonaudit operations are described under “Status of corporate governance, etc.: (3) Auditing” included under “Status of the reporting
company.”

Conflicts of interest
No conflicts of interest between the Company and its consolidated subsidiaries and our firm or the Engagement Partners warrant
disclosure under the provisions of the Certified Public Accountants Act.

Notes:
1. The originals of the reports above are retained separately by the Company (the company submitting the Annual Securities
Report).
2. XBRL data are not included in the subjects of auditing.

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Independent auditor’s audit report
June 26, 2024

To the Board of Directors of Oisix ra daichi Inc.

Deloitte Touche Tohmatsu LLC
Tokyo Office

Engagement Partner

Koichi Yano, CPA

Engagement Partner

Takeshi Sase, CPA

Engagement Partner

Kenji Oyama, CPA<Audit of financial statements>
Auditor’s opinion
We have audited the financial statements of Oisix ra daichi Inc. for the fiscal year from April 1, 2023 through March 31, 2024, for the
purposes of auditing and verification pursuant to the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and ExchangeAct. We have audited the Balance Sheet, Income Statement, Statement of Changes to Shareholders’ Equity, important accounting policies,
and other notes to and attendant details of the financial statements.
In our opinion, the financial statements referred to above fairly present all material aspects regarding financial status as of March 31,
2024 and the business performance and cash flow in the fiscal year ending on that date of Oisix ra daichi Inc., in full compliance withgenerally accepted principles of corporate accounting in Japan.
Evidence for the auditor’s opinion
We conducted our audit in accordance with generally accepted principles of auditing in Japan. Our responsibilities under these principles
of auditing are described under “The responsibilities of the auditor in auditing the financial statements.” In accordance with the rules
governing professional ethics in Japan, we are independent from the Company and fulfill all other ethical responsibilities of an auditor.
We believe we have obtained and established sufficient and appropriate grounds to serve as the basis for the statement of our opinion
regarding the audit.

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Important matters considered in the audit
Important matters considered in the audit are matters judged particularly important by the auditors, as professionals, in auditing thefinancial statements for this fiscal year. Important matters considered in the audit involve the process of auditing the financial statements
as a whole and the formation of the auditor’s opinion. They are not meant to express our opinions on the specifics concerning relevant
matters.
Necessity of recording valuation loss on shares of subsidiaries and associates
Details of important matters considered in the audit
and reasons for decision

Handling in our audit

The balance sheet of Oisix ra daichi Inc. (“Company”
hereinafter) for this fiscal year records 18,872 million yen in
shares of subsidiaries and associates. This amount accounts for
23.3% of total assets. As noted under “Notes: (Significant
accounting estimates),” this includes a book value of 3,010
million yen on shares in the consolidated subsidiary Oisix Inc.,
accounting for 15.9% of all shares of subsidiaries andassociates.
The Company disclosed under those notes the assumptions it
used in considering the need to record a valuation loss based on
the effective value of shares in Oisix Inc., since they have nomarket prices.
Oisix Inc. operates the consolidated Group’s investment
business in the United States. It is the parent company of Three
Limes, Inc., also a consolidated subsidiary. In evaluating its
investment in Oisix Inc., the Company takes into consideration
evaluation of the investment in Three Limes, Inc. as well.
Despite continued efforts to strengthen the business structure of
the BtoC Subscription Business in the US (vegan foodingredients delivery business) operated by Three Limes, Inc.,
results deteriorated in the consolidated fiscal year under review.
Prospects for the next period and later are unclear, andforecasting the impact on this business in the future involves
uncertainty.
Under such conditions, in evaluating the investment in Three
Limes, Inc. the Company adjusted excess earning power by
calculation of the effective value.
As noted under “Notes: (Significant accounting estimates),” theeffective value used in determining the need to record avaluation loss on an investment is based on estimates of future
cash flow based on the business plans of the management ofThree Limes, Inc. However, these include significant
assumptions such as projected inflation in the US, expansion of
the product lineup and increasing the number of products
offered, increased sales in businesses other than the foodingredients delivery business, controlling purchase prices,
reduced waste costs, and reduced logistics costs (logistics centerand delivery costs). These involve material uncertainties.
Accordingly, management’s judgments have materially
impacted estimates of future cash flow based on future plans.

We have implemented the following audit procedures inconsidering the need to record a valuation loss on shares ofsubsidiaries and associates.
• We perused the accounting policies on valuation of securities
to grasp the Company’s effective value calculation process.
• We confirmed the consistency of future cash flows based on
future plans with the budget for the following fiscal year andfuture business plans, both approved by management, andalso evaluated the accuracy of estimates in management’s
future plans by comparing budgets and actual figures inprevious fiscal years regarding business plans.
• We evaluated the reasonableness of business plans throughthe following procedures to assess the propriety of material
assumptions.
(1) Consistency between management’s forecasts ofinflation in the US and external data
(2) Questioning management on the following measures,comparison with past results, and perusal of related
internal materials
 Expansion of the product lineup and increasing thenumber of products offered Increase in sales in businesses other than the foodingredients delivery business Control of purchase prices
 Reductions in waste costs
 Reductions in logistics costs (logistics center anddelivery costs)

We have identified the need to record a valuation loss on sharesof subsidiaries and associates as an important matter to beconsidered in the audit for the reasons above.

Other published information, etc.
Other published information, etc. refers to information included in the Annual Securities Report other than the consolidated andnonconsolidated financial statements and the audit reports thereon. Management’s responsibility is to prepare and disclose otherpublished information. The Corporate Auditor’s and audit firm’s responsibility is to monitor the performance of the duties of directors
in maintenance and operation of the reporting process for other published information.
Other published information is not included in the subject of our audit opinion on the consolidated financial statements, and we do notstate an opinion on other published information.

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Our responsibility in auditing the financial statements is to review the other published information and, in the process of that review, towatch for any material discrepancies between the other published information and the financial statements or information we haveobtained in the process of our audit and for any signs of material errors in the other published information aside from such material
discrepancies.
We are expected to report any material errors we have identified in the other published information through the processes we have
implemented.
We have found nothing worthy of reporting regarding the other published information.
The responsibilities of management, the Corporate Auditors, and the Board of Auditors regarding financial statements
Management is responsible for the suitable preparation of financial statements that comply with and meet generally accepted corporate
accounting standards and principles of corporate accounting in Japan. This includes the development and operation of internal controls
deemed necessary by management for the purpose of preparation of financial statements that present information accurately and are freeof material misrepresentations due to malfeasance or error.
In preparing the financial statements, management is responsible for assessing the propriety of preparing financial statements based on
the going-concern assumption and disclosing, as necessary, matters related to the going-concern assumption in accordance with generally
accepted principles of corporate accounting in Japan.
The Corporate Auditors and the Board of Auditors are responsible for monitoring the performance of the duties of the directors inmaintenance and operation of the financial reporting process.
The responsibilities of the auditor in auditing the financial statements
Our responsibilities are to secure, based on our audit, reasonable assurance concerning whether the financial statements as a whole arefree of material misrepresentations due to malfeasance or error and to state, in the audit report, an independent opinion on the financial
statements. Misstatements may arise due to malfeasance or error. A statement is deemed to constitute a material misstatement if it canreasonably be expected to impact decision-making by users of the financial statements, either individually or in sum.
Through the audit process in accordance with generally accepted principles of auditing in Japan, we implemented the following
procedures based on our judgment as specialists and a professional spirit of skeptical inquiry:• Identification and assessment of the risks of material misrepresentations due to malfeasance or error; drafting and implementationof audit procedures suited to the risks of material misrepresentation; making judgments on selection and application of audit
procedures; and, securing sufficient and appropriate audit evidence to serve as the basis for statement of our opinion.
• While the purpose of an audit is not to offer an opinion on the efficacy of internal controls, in assessing risks, we do consider internal
controls related to the audit, in order to formulate audit procedures appropriate to the circumstances.
• We assess the propriety of the accounting policies adopted by management and their methods of application as well as thereasonability of accounting estimates made by management and the appropriateness of related notes.
• We reach a conclusion on whether the management’s preparation of financial statements based on the going-concern assumption isappropriate and whether, based on the audit evidence obtained, any material uncertainties can be identified with regard tophenomena or circumstances that may warrant material doubts regarding the going-concern assumption. If any material
uncertainties are recognized regarding the going-concern assumption, attention must be drawn to the notes to the financial
statements in the audit report. If the notes to the financial statements concerning material uncertainties are inappropriate, a qualified
opinion must be expressed that mentions certain exceptions to the financial statements. The auditor’s conclusions are based on theaudit evidence obtained through the date of the audit report, and there is a possibility that future events or conditions could make it
impossible for the Company to continue as a going concern.
• We assess whether the presentation and notes in the financial statements conform to the generally accepted principles of corporate
accounting in Japan; the presentation, structures, and content of the financial statements, including related notes; and whether thefinancial statements accurately present the transactions and accounting facts on which they are based.
We report to the Corporate Auditors and the Board of Auditors on the scope and timing of the planned audit; any material discoveries of
the audit, including material deficiencies in internal controls systems identified in the process of auditing; and other matters required
under auditing standards.

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We report to the Corporate Auditors and the Board of Auditors on the fact that we maintain independence in accordance with the rules
governing professional ethics in Japan and on any safeguards taken to eliminate or mitigate any impediments and other matters that may
reasonably be considered to impact the independence of auditors.
We identify as important matters to be considered in the audit matters judged to be especially important in audits of the financial
statements for this fiscal year from among those items we have discussed with the Corporate Auditors and the Board of Auditors anddescribe these in the audit report. However, such items are not described in cases such as when their disclosure is prohibited under laws,
regulations, etc. or the extremely rare cases in which we have determined that they should not be reported because the disadvantages ofreporting them in the audit report would reasonably be considered to exceed any public benefit from their disclosure.
<Remuneration information>
Remuneration information is described in the audit report to the consolidated financial statements.
Conflicts of interest
No conflicts of interest between the Company and our firm or the Engagement Partners warrant disclosure under the provisions of theCertified Public Accountants Act.

Notes:
1. The originals of the reports above are retained separately by the Company (the company submitting the Annual Securities
Report).
2. XBRL data are not included in the subjects of auditing.

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