Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020
(Japanese GAAP)

November 13, 2020

Company name: Nishimoto Co., Ltd.
Listed exchange: Tokyo
Code:
9260
URL: http://www.wismettac.com/
Representative:
Yoshiro Susaki, Chairman & President CEO
Contact:
Yuji Sasa, Director(Phone) 03-6870-2015
Scheduled date of filing of quarterly report:
November 13, 2020
Scheduled date of commencement of dividend payments:—
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:No(Amounts are rounded down to the nearest million yen)

1.

Consolidated financial results for the third quarter of the fiscal year ending December 31, 2020
(from January 1, 2020 to September 30, 2020)(1) Consolidated results of operations (cumulative)
Net sales(Percentages denote year-on-year changes)
Profit attributable toOrdinary income
owners of parent

Operating income

Million yen%

Million yen%

Million yen%

Million yen

%

(240)

—

363

(85.7)

3,674(23.1)

2,548(24.4)

Third quarter of FY ending(9.2)(98.5)
124,389
55
December 31, 2020
Third quarter of FY ended
1.1(25.2)
137,049
3,571
December 31, 2019
(Note) Comprehensive income
Third quarter of FY ending December 31, 2020: (1,134) million yen (—%)
Third quarter of FY ended December 31, 2019: 1,402 million yen (−59.9%)
Diluted net income per
Net income per share
share
Third quarter of FY ending
December 31, 2020
Third quarter of FY ended
December 31, 2019

Yen

Yen

25.36

—

177.58—(2) Consolidated financial position
Total assets

Net assets

Million yen

As of September 30, 2020
108,256(FY 2020 3Q)
As of December 31, 2019
96,587(FY 2019)(Reference)
Shareholders' equity
Third quarter of FY ending December 31, 2020:
FY ended December 31, 2019:2.

Equity ratio

Million yen%

50,591

46.6

52,33754.2

50,397 million yen
52,337 million yen

Dividends
Annual dividends
First quarter-end
Yen

Secondquarter-end

Third quarter-end
Yen

FY ended December 31, 2019—
40.00
FY ending December 31, 2020—
0.00
FY ending December 31, 2020
(Forecast)(Note) Revision to the forecast for dividends announced most recently: None

Year-end

Total

Yen

Yen

Yen

—
—

55.00

95.00

—

—

3.

Consolidated financial results forecast for the fiscal year ending December 31, 2020
(from January 1, 2020 to December 31, 2020)

Net sales
Million yen(Percentages denote year-on-year changes)
Profit attributable to Net income per
Ordinary income
owners of parent
share

Operating income%

Million yen%

Million yen

FY ending December
168,000 (8.0)(600)—(1,000)31, 2020(Note) Revision to the forecast for financial results announced most recently: None%

Million yen

%

Yen

—

(500)

—

(34.84)* Notes(1) Changes in significant subsidiaries during the first nine months of the fiscal year:
None(Changes in specified subsidiaries resulting in changes in the scope of consolidation)
New – companies(Company name) / Excluded – company (Company name) –(2) Application of accounting treatment specific to the preparation of quarterly consolidated
financial statements:(3) Changes in accounting policies, changes to accounting estimates, and restatements(i) Changes in accounting policies due to revisions of accounting standards:

Yes

None

(ii) Changes in accounting policies other than (i) above:None(iii) Changes in accounting estimates:None(iv) Restatements:

None(4) Number of shares outstanding (common stock)(i) Number of shares outstanding at the end of the As of September
14,353,140 shares30, 2020
period (including treasury shares)(ii) Number of treasury shares at the end of the
As of September
112 shares30, 2020
period(iii) Average number of shares during the period
As of September
14,353,028 shares30, 2020(nine months ended September 30, 2020)

December 31,
2019

14,353,140 shares

December 31,
2019

112 shares

September 30,
2019

14,353,028 shares* These quarterly financial results are not subject to quarterly review procedures.
* Explanation of the proper use of financial results forecasts and other notes(Cautionary note on forward-looking statements, etc.)
The forward-looking statements such as financial results forecasts contained in this document are based on information currently
available to the Company and certain reasonable assumptions. Thus, these statements are not intended for management to promise theachievement of the forecast. Actual financial results may differ materially due to various factors. For conditions of the assumptions in
the forecast and notes to use of the forecast, please see the section titled "(3) Explanation of future forecasts such as consolidated financial
results forecasts" under the chapter titled "1. Qualitative information on quarterly financial results" on the page 3 of the attachment.
(How to obtain the quarterly financial results supplementary materials)
The quarterly financial results supplementary materials will be disclosed on TDnet on November 13, 2020 and will also be posted on the
Company's website.

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

 Attachment: Table of Contents
1. Qualitative information on quarterly financial results .............................................................................................. 2(1) Explanation of operating results ........................................................................................................................ 2(2) Explanation of financial position ....................................................................................................................... 3(3) Explanation of future forecasts such as consolidated financial results forecasts ................................................ 3
2. Quarterly consolidated financial statements and major notes .................................................................................. 4(1) Quarterly consolidated balance sheet ................................................................................................................. 4(2) Quarterly consolidated statements of income and comprehensive income ........................................................ 6(3) Notes to the quarterly consolidated financial statements ................................................................................... 8(Notes to assumption of going concern) ............................................................................................................ 8(Notes on significant changes in shareholders' equity) ...................................................................................... 8(Application of an accounting treatment specific to the preparation of the quarterly consolidated
financial statements) .......................................................................................................................................... 8(Additional information) .................................................................................................................................... 8(Segment information) ....................................................................................................................................... 9(Business combinations) .................................................................................................................................. 10–1–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

1. Qualitative information on quarterly financial results(1) Explanation of operating results[Outline of the first nine months of the fiscal year]
This consolidated cumulative third quarter saw a tough situation where the novel coronavirus infection spread, and where
emergency declarations and lockdowns have been invoked worldwide since March. From May onward, the restrictions on goingout have been gradually eased in a step toward normalized economic activity. Whereas parts of regions are seeing signs that the
spread of the infection is coming to an end, corporate business, especially in the tourism, restaurant and airline industries, havebeen significantly impacted by social distancing, restricted transnational movement, and reinstated restrictions on going out
mainly in Europe and the U.S. due to the infection spreading again. As the economic outlook remains highly uncertain and thepace of recovery in consumer spending is also slow, it is expected to take a certain amount of time before economic activity
returns to the level of the pre-pandemic era.
Also, in Japan, the economic activities of both individuals and corporations have been significantly constrained by travel
restrictions to and from overseas countries since March, and by the emergency declaration invoked in April and May. Although
the economy has gradually reopened with government-led stimulus measures, such as the "Go to Travel" and "Go to Eat"
campaigns, underway after the lifting of the emergency declaration, the move toward the normalization of the economy still has
a long way to go primarily due to a decline in business activity resulting from restrictions for the number of guests and spectatorsin venues, etc. as well as the cooling down of consumer spending mainly owing to the uncertainty of job security, and concerns
over a surge of the infections.
Under these circumstances, the Company Group worked to maintain and expand its operating results by running two main
businesses: the Asian Food Global Business that distributes Asian food products and ingredients such as Japanese food aroundthe world with a focus on North America, as well as in Europe, China, South East Asia, Australia, etc., and the Agricultural &Seafood Products Trading Business that distributes fruits and vegetables, fishery products, etc., in domestic markets, as well as
overseas markets through exports and offshore trading.
As for the Asian Food Global Business, the Company Group has been actively promoting a structural reform to continuously
achieve sustainable and stable incomes from the North American region and an expansion of the business platform in regions
outside of North America as one of our growth strategies. As for the Agricultural & Seafood Products Trading Business, theCompany Group has been working on expanding sales to the wholesale market, which is the main distribution route, massretailers, restaurant chains, home-meal replacement industries, etc. and overseas distribution routes (export of domestic fruits
and vegetables, offshore trading in fruits and vegetables, wholesale business in China, etc.).
As a result, with respect to the financial results for this consolidated cumulative third quarter, the Company had net sales of
124,389 million yen (9.2% decrease year-on-year), operating income of 55 million yen (98.5% decrease year-on-year), ordinary
losses of 240 million yen (ordinary income of 3,674 million yen in the same period of the previous year) and profit attributableto owners of parent of 363 million yen (85.7% decrease year-on-year).
Financial results by segment are as follows: It is noted that net sales of segments are net sales to external customers.
[Outline of operating results by segment](i) Asian Food Global BusinessIn the Asian Food Global Business, for this consolidated cumulative third quarter, the Company had net sales of 84,729
million yen (11.1% decrease year-on-year) and operating losses of 113 million yen (operating income of 3,371 million yen
in the same period of the previous year).
Since March, sales to the restaurant industry, which is the main customer of the Company Group, have fallen rapidly andsignificantly due to the worldwide lockdowns. Sales to the restaurant industry is in a moderate recovery trend after thegradual lifting of lockdowns in countries around the world mainly because increasing numbers of customers have restarted
their business through adopting new business formats, such as take-out and delivery services. Nonetheless, the outlook
remains uncertain. Although sales to retailers maintained steady growth after the lifting of lockdowns, the increase is notlarge enough to make up for the plunge of sales to the restaurant industry, resulting in net sales decreasing considerably.
Profit fell sharply because of the recording of valuation loss on inventories with lowering profitability and the provision ofallowance for doubtful accounts mainly for the North American region. This was despite our efforts to reduce SG&A,
especially labor costs, by means of personnel reduction and temporary leave.
(ii) Agricultural & Seafood Products Trading BusinessIn the Agricultural & Seafood Products Trading Business, for the third quarter of the current consolidated fiscal year, theCompany had net sales of 37,122 million yen (5.1% decrease year-on-year) and operating income of 577 million yen (18.0%
increase year-on-year).

–2–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

While sales of citrus fruits and imported vegetables will fall in line with significant decreases in demand in the restaurant
industry due to the restrictions on going out and the invoking of the emergency declaration from March, sales prices haveslumped because of oversupply. Net sales decreased mainly owing to delay in the recovery of demand in the restaurant
industry although sales to retailers stayed strong after July on the back of increased demand for imported fruits andvegetables in the wake of the poor performance of domestic produce resulting from bad weather. Profit increased. The
reasons are that domestically, our efforts to reduce SG&A and a stable market trend after July, and globally, continued
strong sales in China.
(iii) Other businesses
In other businesses, for the third quarter of the current consolidated fiscal year, the Company had net sales of 2,537 million
yen (4.4% decrease year-on-year) and operating income of 24 million yen (57.4% decrease year-on year).
Despite growing sales of health-related products, net sales declined from the same period of the previous year due to sluggish
growth in event goods sales. This resulted from department stores and other retailers refraining from business, thecancellation of various events and a drop in consumer spending due to the restrictions on going out and the invoking of theemergency declaration from March. Our profit declined because of the decrease of net sales despite our effort to reduce
SG&A.

(2) Explanation of financial position(Assets)
Total assets as of September 30, 2020 stood at 108,256 million yen, an increase of 11,669 million yen compared to December
31, 2019, and was mainly attributable to the following.
Total current assets as of September 30, 2020 amounted to 93,688 million yen, an increase of 5,727 million yen compared
to December 31, 2019. The increase in total current assets was due to an increase of 11,743 million yen in cash and deposits,
despite a decrease of 2,992 million yen in inventories, a decrease of 1,788 million yen in notes and accounts receivable—
trade and an increase of 1,027 million yen in the allowance for doubtful accounts.
Total non-current assets as of September 30, 2020, came to 14,568 million yen, an increase of 5,941 million yen compared
to December 31, 2019. The increase in total non-current assets, despite a decrease of 869 million yen in investments andother assets, was due to an increase of 6,782 million yen in goodwill.
(Liabilities)
Total liabilities as of September 30, 2020 stood at 57,665 million yen, an increase of 13,414 million yen compared to
December 31, 2019, and was mainly attributable to the following.
Total current liabilities as of September 30, 2020, amounted to 20,545 million yen, an increase of 1,487 million yen
compared to December 31, 2019. The increase in total current liabilities was due to an increase of 873 million yen in notes
and accounts payable—trade, an increase of 678 million yen in short-term loans payable and an increase of 254 million yen
in current portion of long-term loans payable, despite a decrease of 409 million yen in accounts payable—other.
Total non-current liabilities as of September 30, 2020 was 37,119 million yen (an increase of 11,927 million yen compared
to December 31, 2019). The increase in total non-current liabilities is due to an increase of 11,061 million yen in long-termloans payable and an increase of 531 million yen in non-current liabilities, including derivative debts.
(Net assets)
Total net assets as of September 30, 2020 amounted to 50,591 million yen, a decrease of 1,745 million yen compared to
December 31, 2019. The decrease in total net assets is mainly due to a decrease of 1,503 million yen in foreign currencytranslation adjustment and a decrease of 425 million yen in retained earnings.

(3) Explanation of future forecasts such as consolidated financial results forecasts
Forecasts of financial results for the fiscal year ending December 31, 2020 are described in the Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending December 31, 2020 (Japanese GAAP), published on August 13, 2020. The
forecasts remain unchanged.

–3–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

2. Quarterly consolidated financial statements and major notes(1) Quarterly consolidated balance sheet
FY 2019(As of December 31, 2019)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable—trade
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
Leased assets, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Software
Software in progress
Customer-related assets
Other
Total intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets–4–(Millions of yen)
Third quarter of FY 2020
(As of September 30, 2020)

39,13019,407
26,672
2,925(175)
87,96050,874
17,61823,6802,718(1,202)
93,688

2,609
438
208
467
186
3,910

2,518
442
426
809
235
4,432

—
417
12
330
62
823

6,782
357
425
—
59
7,625

1,164
926
1,092
777
(67)
3,893
8,627
96,587

294
860
1,255
169
(69)
2,510
14,568108,256

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

FY 2019(As of December 31, 2019)(Millions of yen)
Third quarter of FY 2020
(As of September 30, 2020)

9,993
2,890
143
206
2,592
144
641
137
7
2,301
19,058

10,866
3,568
397
257
2,183
146
679
69
0
2,374
20,54522,215
265
66
—
58
645
1,527
413
25,191
44,25033,276
547
11
62
—
665
1,609
944
37,11957,6652,646
6,531
43,112(0)52,2902,646
6,531
42,687(0)51,864

8
6
31
0
46
—
52,337
96,5872
2(1,471)0(1,467)
193
50,591
108,256

Liabilities
Current liabilities
Notes and accounts payable—trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Accounts payable—other
Income taxes payable
Provision for bonuses
Provision for directors' bonuses
Provision for shareholders' benefits
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for bonuses
Provision for directors' bonuses
Provision for directors' retirement benefits
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets–5–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statement of income
First nine months ended September 30, 2020

Net sales
Cost of sales

137,049
113,294(Millions of yen)First nine months of FY 2020
(January 1, 2020
to September 30, 2020)
124,389
103,772

Gross profit

23,755

20,616

Selling, general and administrative expenses
Operating income

20,183
3,571

20,561
55

177

62

21

—

1
7
51

17
4
37

259

122

87
67
—
0
155
3,674

134
275
1
6
417
(240)

—
—

779
779

—
—
3,674
1,109
15
1,125
2,548
—
2,548

199
199
340
160
(192)
(32)
373
9
363

First nine months of FY 2019
(January 1, 2019
to September 30, 2019)

Non-operating income
Interest and dividend income
Share of profit of entities accounted for using equity
methodInsurance benefits received
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Share of loss of entities accounted for using equity method
Other
Total non-operating expenses
Ordinary income or loss
Extraordinary income
Marginal gain for gradual acquisition
Total extraordinary income
Extraordinary losses
Impairment loss
Total extraordinary losses
Profit before income taxes
Income taxes—current
Income taxes—deferred
Total income taxes
Net income
Profit attributable to non-controlling interests
Profit attributable to owners of parent–6–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

Quarterly consolidated statement of comprehensive income
First nine months ended September 30, 2020

2,548

(Millions of yen)First nine months of FY 2020
(January 1, 2020
to September 30, 2020)
373

(0)
(1)

(6)
(4)

(1,064)0(1,482)
0

(79)

(13)

(1,146)
1,402(1,507)

1,402(1,148)—14First nine months of FY 2019
(January 1, 2019
to September 30, 2019)
Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests–7–(1,134)

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

(3) Notes to the quarterly consolidated financial statements(Notes to assumption of going concern)
No relevant items.
(Notes on significant changes in shareholders' equity)
No relevant items.
(Application of an accounting treatment specific to the preparation of the quarterly consolidated financial statements)
Calculation of tax expenses
The tax expenses of some of non-Japan consolidated subsidiaries were calculated by multiplying net income before taxes by aneffective tax rate, which was estimated as the rate after the application of tax effect accounting to net income before taxes for the fiscal
year including the third quarter of the fiscal year.
(Additional information)(Accounting estimate associated with the novel coronavirus pandemic)
Lockdowns invoked worldwide against the novel coronavirus pandemic have caused rapid and significant falls in sales to therestaurant industry, which is the main customer of the Company Group. As the lockdowns were gradually lifted from May, take-out
and delivery services have increased, and eating in restaurants has slowly recovered.
Meanwhile, sales to retailers maintained steady growth despite slowing as the lockdowns were lifted.
Under these circumstances, the Company Group provided an additional 853 million yen as an allowance for doubtful accounts inthis consolidated cumulative third quarter in consideration of the worsening credit status of customers. The amount of allowance for
doubtful accounts is determined according to the recoverability of the debt, taking into account the status of the debt being collected
and circumstances of the major customer.
In consideration of the worsening market environment, in this consolidated cumulative third quarter, the Company Group recorded
an additional 877 million yen as a valuation loss on inventories, which is included in the cost of sales. The amount of valuation loss
on inventories is an estimate of future salability and records those items for which declines in profitability are expected.
In determining the recoverability of deferred tax assets, we have made an accounting estimate on the assumption that the economic
situation will slowly recover and normalize by the first half of 2021.
It is uncertain when the novel coronavirus infection will cease and, if its impact lasts and the aforesaid assumption no longer holds,
our future financial status and business performance may be affected.

–8–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

(Segment information)
First nine months of the fiscal year (from January 1, 2019 to September 30, 2019)1.

Information related to net sales and profits/losses by reporting segment(Millions of yen)
Adjustment(Note 1)

Amounts recordedin the quarterly
consolidated
statement of income(Note 2)—
(6,655)(6,655)(348)

137,049—
137,049
3,571

Reporting segment
Agricultural &Asian Food
Seafood Products Other business
Global BusinessTrading BusinessNet sales
Sales to external customers

95,266
6,631
101,8973,371Intersegment sales or transfers
Total
Segment profit

39,12924
39,153
489

2,653
—
2,653
58

Total

137,049
6,655
143,704
3,919(Note) 1. "Adjustment" for segment profit in the amount of (348) million yen includes (1,396) million yen for elimination ofintersegment transactions and 1,048 million yen for company profit/loss not allotted to reporting segments (netcompany profits and net company expenses). Company profits consist mainly of dividend income from reporting
segments, and company expenses mainly comprise general and administrative expenses not attributed to reporting
segments.
2. The segment profit is reconciled with the operating income on the Quarterly Consolidated Statement of Income.
2.

Information related to impairment loss of non-current assets and goodwill by reporting segment
No relevant items.

First nine months of the fiscal year (from January 1, 2020 to September 30, 2020)
1.

Information related to net sales and profits/losses by reporting segment(Millions of yen)
Reporting segment
Agricultural &Asian Food
Seafood Products Other business
Global BusinessTrading Business

Total

Adjustment(Note 1)

Amounts recordedin the quarterly
consolidated
statement of income(Note 2)

Net sales
Sales to external customers

84,72937,122
2,537
124,389—
124,389
5,169
0
—
5,170
(5,170)—Total
89,89837,123
2,537
129,559(5,170)124,389
Segment profit/loss
(113)
577
24
488
(433)
55
(Note) 1. "Adjustment" for segment profit in the amount of (433) million yen includes (1,403) million yen for elimination ofintersegment transactions and 970 million yen for company profit/loss not allotted to reporting segments (net company
profits and net company expenses). Company profits consist mainly of dividend income from reporting segments, andcompany expenses mainly comprise general and administrative expenses not attributed to reporting segments.
Intersegment sales or transfers

2. The segment profit or loss is reconciled with the operating income on the Quarterly Consolidated Statement of Income.
2.

Information related to impairment loss of non-current assets and goodwill by reporting segment(Important impairment loss associated with non-current assets)
Due to decreased profitability under the impact of the novel coronavirus pandemic, the amount recoverable from the businessassets of a U.K. subsidiary in the import and wholesale business of Japanese foods and ingredients in the "Asian Food Global
Business" segment is estimated to be zero and it has been recorded as an impairment loss.
Due to decreased profitability under the impact of the novel coronavirus pandemic, the book value of the business assets of aHong Kong subsidiary in the import and wholesale business for Japanese foods and ingredients has been reduced to the recoverable
amount and is recorded as an impairment loss. The recoverable amount is based on the net selling price.
The amount provided for such impairment loss is 199 million yen in this consolidated cumulative third quarter.
(Material fluctuation in goodwill)In the "Asian Food Global Business" segment, we acquired additional stock of SSP Konsumgüter TRADE & CONSULT GmbHand COMPTOIRS DES 3 CAPS SAS, whereby they became consolidated subsidiaries instead of equity method affiliates. The–9–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

increase in goodwill attributable to these events is 6,782 million yen in this consolidated cumulative third quarter.
The goodwill is an amount calculated provisionally because the acquisition cost is not fully distributed in this consolidated
financial third quarter.
(Business combinations)
Business combination by acquisition
A consolidate subsidiary of the Company, NTC Wismettac Europe B.V. (hereinafter referred to as "NTC EU"), acquired an
additional 70% stake of common shares in COMPTOIRS DES 3 CAPS SAS (hereinafter referred to as "C3C"), an equity method
affiliate, on July 1, 2020. As a result, C3C became a consolidated subsidiary of NTC EU.
(1) Outline of business combination(i) Name of the acquired company and its business lines
Name of the acquired company:

COMPTOIRS DES 3 CAPS SAS

Business lines:

Importing, processing and wholesaling of tuna and salmon (four of the Group's
companies)(ii) Main reasons for the business combination
NTC EU is importing and wholesaling Japanese foods, mainly in the Netherlands. It has decided to acquire an additional
70% of C3C, a French corporation which is an equity method affiliate of our Company and 20% of whose shares are held by
NTC EU. C3C is the holding company for three subsidiaries, so NTC EU has a total of four group companies as consolidated
subsidiaries.
One of the Company Group's growth strategies for the Asian Food Global Business is to "expand our business platform inregions outside of North America." As Europe is a market with great growth potential over the medium to long term, before
this transaction NTC EU acquired the equity method affiliate, SSP Konsumgüter TRADE & CONSULT GmbH (based inGermany; hereinafter referred to as "SSP") as a wholly owned subsidiary in February 2020 by additionally acquiring 80% of
its shares.
This acquisition of shares by NTC EU enables us to group business units in three key countries in Europe, these being,
Wismettac Harro Foods Ltd. in the U.K., SSP in Germany and (through this acquisition) C3C in France in order to establish abusiness base in Europe for the Asian Food Global Business, with a focus on Japanese foods.
(iii) Date of business combination
July 1, 2020(iv) Legal form of the business combination
Through acquisition of shares for cash consideration(v) Name of the controlling entity after the business combination
The name remains unchanged(vi) Percentage share of voting rights acquired
Percentage share of voting rights owned before the business combination:

20%

Percentage share of voting rights additionally acquired at the date of business combination:

70%

Percentage share of voting rights after the acquisition:90%(vii) Main reason for deciding to acquire the company
As the Company Group acquired shares of C3C for cash(2) The period of performance of the acquired company included in the quarterly consolidated statements of income andcomprehensive income in the quarterly consolidated cumulative period
From July 1, 2020 to September 30, 2020
(3) Acquisition cost of the acquired company and breakdownMarket value of equity held before business combination as of the business combination date

1,236 million yen

Cash expended for additional acquisition

4,326 million yen

Acquisition cost

5,562 million yen– 10 –

Nishimoto Co., Ltd. - Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2020

(4) Difference between the acquisition cost for the acquired company and the total sum of acquisition costs of each transaction for
acquisition
Gain on step acquisition: 455 million yen(5) Goodwill, reason for recognizing goodwill, amortization method and amortization period(i) The amount of goodwill that occurred
3,978 million yen
The above amount was provisionally calculated.
(ii) The cause of occurrence
The occurrence reflects future excess earnings power that is expected to be created by future business developments andsynergies between the Company Group and the acquired company.
(iii) The amortization method and the amortization period
Straight-line amortization over 10 years– 11 –