Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019
(Japanese GAAP)

August 13, 2019

Company name: Nishimoto Co., Ltd.
Listed exchange: Tokyo
Code:
9260
URL: http://www.wismettac.com/
Representative:
Takayuki Kanai, President
Contact:
Atsuhiko Kimura, Director and CFO(Phone) 03-6870-2015
Scheduled date of filing of quarterly report:
August 14, 2019
Scheduled date of commencement of dividend payments:
September 10, 2019
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:Yes (For institutional investors and analysts)(Amounts are rounded down to the nearest million yen)

1.

Consolidated financial results for the second quarter of the fiscal year ending December 31, 2019(from January 1, 2019 to June 30, 2019)(1) Consolidated results of operations (cumulative)
Net sales
Million yen(Percentages denote year-on-year changes)
Profit attributable toOrdinary income
owners of parent

Operating income%

Million yen%

Million yen%

Million yen

%

2,664

(13.2)

1,878(13.8)

3,069

—

2,178

—

Second quarter of FY ending
92,1812.1
2,568(16.0)
December 31, 2019
Second quarter of FY ended
90,251—
3,055—
December 31, 2018
(Note) Comprehensive income
Second quarter of FY ending December 31, 2019: 810 million yen (-30.5%)
Second quarter of FY ended December 31, 2018: 1,165 million yen (—%)
Diluted net income per
Net income per share
share
Yen

Yen

Second quarter of FY ending
130.86—
December 31, 2019
Second quarter of FY ended
151.75—
December 31, 2018
(Note) From the first quarter of the fiscal year ending December 31, 2019, the Company has changed the method for calculating
retirement benefit obligations for its domestic consolidated subsidiaries from the simplified method to the standard method.
Figures for the second quarter of the fiscal year ended December 31, 2018 have been adjusted as this change has been
applied retroactively. Year-on-year percentage changes for the second quarter of the fiscal year ended December 31, 2018 are
not shown as this change has been applied retroactively.

(2) Consolidated financial position
Total assets

Net assets

Million yen

Equity ratio

Million yen%

As of June 30, 201983,51751,542
61.7(FY 2019 2Q)
As of December 31, 2018
83,71951,521
61.5(FY 2018)(Reference)
Shareholders’ equity
Second quarter of FY ending December 31, 2019:
51,542 million yen
FY ended December 31, 2018:
51,521 million yen(Note) From the first quarter of the fiscal year ending December 31, 2019, the Company has changed the method for calculating
retirement benefit obligations for its domestic consolidated subsidiaries from the simplified method to the standard method.
Figures for the fiscal year ended December 31, 2018 have been adjusted as this change has been applied retroactively.

2.

Dividends
Annual dividends
First quarter-end
Yen

Secondquarter-end

Third quarter-end
Yen

FY ended December 31, 2018—
40.00
FY ending December 31, 2019—
40.00
FY ending December 31, 2019
(Forecast)(Note) Revision to the forecast for dividends announced most recently: None

Year-end

Total

Yen

Yen

Yen

—

55.00

95.00

—

55.00

95.00

3.

Consolidated financial results forecast for the fiscal year ending December 31, 2019(from January 1, 2019 to December 31, 2019)

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%

Million yen%

Yen

FY ending December
193,000
5.9
6,000 (10.5)
6,052 (7.9)
4,337 (6.2)
302.2031, 2019(Note) 1. Revision to the forecast for financial results announced most recently: None
2. Since the Company has changed the method for calculating retirement benefit obligations for its domestic consolidated
subsidiaries from the simplified method to the standard method and this change has been applied retroactively, adjusted
figures have been used to show the year-on-year percentage changes.

* Notes(1) Changes in significant subsidiaries during the first three months of the fiscal year:
Yes(Changes in specified subsidiaries resulting in changes in the scope of consolidation)
New – companies(Company name) / Excluded 1 company (Company name) Wismettac Foods, Inc.
(Note) For details, please see the section titled "(4) Notes to the quarterly consolidated financial statements (Changes in significant subsidiaries
during the first three months of the fiscal year)" under the chapter titled "2. Quarterly consolidated financial statements and major notes"
on the page 10 of the attachment.

(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

Yes

(ii) Changes in accounting policies other than (i) above:Yes(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 June 30,
2019period (including treasury shares)(ii) Number of treasury shares at the end of the
As of June 30,
2019period(iii) Average number of shares during the period
As of June 30,
2019(three months ended June 30, 2019)14,353,140 shares

December 31,
2018

14,353,140 shares

112 shares

December 31,
2018

112 shares

14,353,028 shares

June 30, 2018

14,353,087 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 4 of theattachment.
(How to obtain the quarterly financial results supplementary materials)
The quarterly financial results supplementary materials will be disclosed on TDnet on August 13, 2019 and will also be posted on the
Company’s website. The Company plans to hold a briefing meeting on the financial results for institutional investors and analysts on
August 21, 2019, based on these materials.

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019

 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 ................................................ 4
2. Quarterly consolidated financial statements and major notes .................................................................................. 5(1) Quarterly consolidated balance sheet ................................................................................................................. 5(2) Quarterly consolidated statements of income and comprehensive income ........................................................ 7(3) Quarterly Consolidated Statement of Cash Flows ............................................................................................. 9(4) Notes to the quarterly consolidated financial statements ................................................................................. 10(Notes to assumption of going concern) .......................................................................................................... 10(Notes on significant changes in shareholders’ equity) .................................................................................... 10(Changes in Accounting Policies) .................................................................................................................... 10(Application of an accounting treatment specific to the preparation of the quarterly consolidated
financial statements) ........................................................................................................................................ 10(Changes in significant subsidiaries during the first three months of the fiscal year) ...................................... 10(Additional information) .................................................................................................................................. 10(Segment information) ..................................................................................................................................... 11–1–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019

1. Qualitative information on quarterly financial results(1) Explanation of operating results[Outline of the first six months of the fiscal year]
The overall world economy during the first six months of the current consolidated fiscal year continued to recover moderately.
However, uncertainties still remain, such as the outlook for the Chinese economy, uncertainties about other nations’ policies,
and the potential impact of trade issues on the global economy.
Meanwhile, although exports and production remained weak, the overall Japanese economy remained on a moderate recovery
trend as the employment environment steadily improved.
Under such circumstances, the Company Group has been working on improving operating results by operating 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 Agricultural &Seafood Products Trading Business, that distributes fruits and vegetables, fishery products, etc., with a focus on domestic
markets, as well as in China, South East Asia, etc.
With regard to the Asian Food Global Business, in addition to the growth in the North American region, the Company Grouphas been aggressively developing markets, setting the strengthening of business bases in other regions as one of the Company
Group’s growth strategies. As for the Agricultural & Seafood Products Trading Business, in addition to the wholesale market,
which is the main distribution route, the Company Group has been working on developing other distribution routes (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 the second quarter of the current consolidated fiscal year, the Company had
net sales of 92,181 million yen (2.1% increase year-on-year), operating income of 2,568 million yen (16.0% decrease year-onyear), ordinary income of 2,664 million yen (13.2% decrease year-on-year), and profit attributable to owners of parent of 1,878
million yen (13.8% 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 the second quarter of the current consolidated fiscal year, the Company had net
sales of 63,534 million yen (4.9% increase year-on-year) and operating income of 2,407 million yen (4.7% decrease yearon-year).
Although net sales in the North American region grew, expenses in the logistics department, including labor costs,
remained high. Furthermore, although the Company incurred internal policy-related expenses for restructuring purposes(profitability improvement and logistics expenses restraint), including investment in human resources, operating income
remained almost unchanged from the same period a year ago.
Net sales also grew in regions outside of North America. Overall profit decreased due to a decline in profit at a subsidiaryin the U.K., Harro Foods Limited. The company was affected by a continuous rise in purchase prices due to fluctuations incurrency exchange rates amid the issue of Brexit.
(ii) Agricultural & Seafood Products Trading BusinessIn the Agricultural & Seafood Products Trading Business, for the second quarter of the current consolidated fiscal year, theCompany had net sales of 26,825 million yen (3.6% decrease year-on-year) and operating income of 197 million yen(62.5% decrease year-on-year).
Overall net sales were affected by sluggish sales and falls in unit prices of fruits and vegetables (citrus, tropicalcommodities, and vegetables) in domestic markets. Also, net sales of Shanghai IPM Co., Ltd., a Chinese subsidiary thatimports and sells fruits and vegetables, declined in the wake of weak sales of American citrus fruits due to U.S.-China
trade conflicts continued from the first quarter.
Profits declined affected by the decrease in domestic sales of fruits and vegetables as a whole, increase in costs, and othernegative impacts.
(iii) Other businesses
In other businesses, for the second quarter of the current consolidated fiscal year, the Company had net sales of 1,820
million yen (1.7% decrease year-on-year) and operating income of 62 million yen (224.9% increase year-on year).

–2–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019

Although sales of seasonal products and character products, etc. for Japan broadly remained the same, operating income
increased.

(2) Explanation of financial position
1. Assets, liabilities and net assets(Assets)
Total assets as of June 30, 2019 stood at 83,517 million yen, a decrease of 201 million yen compared to December 31,
2018, and was mainly attributable to the following.
Total current assets as of June 30, 2019 amounted to 74,547 million yen, a decrease of 392 million yen compared to
December 31, 2018. The decrease in current assets was due to a decrease of 688 million yen in cash and deposits and adecrease of 391 million yen in notes and accounts receivable—trade, despite an increase of 665 million yen in other undercurrent assets including income taxes receivable and deposits paid.
Total non-current assets as of June 30, 2019, came to 8,970 million yen, an increase of 190 million yen compared to
December 31, 2018. The increase in non-current assets is attributable to a rise of 586 million yen in other (net) underproperty, plant and equipment, including construction in process, etc. and 208 million yen in leased assets (net). This is
despite a decrease of 198 million yen in buildings and structures (net), a fall of 161 million yen in assets related tocustomers, a reduction of 122 million yen in guarantee deposits, and a decline of 116 million yen in investment securities.
(Liabilities)
Total liabilities as of June 30, 2019 stood at 31,975 million yen, a decrease of 222 million yen compared to December 31,
2018, and was mainly attributable to the following.
Total current liabilities as of June 30, 2019, amounted to 19,864 million yen, a decrease of 312 million yen compared to
December 31, 2018. The reduction in current liabilities was due to a decrease of 583 million yen in income taxes payable
and a fall of 473 million yen in notes and accounts payable—trade, despite an increase of 614 million yen in accounts
payable and a rise of 120 million yen in lease obligations.
Total non-current liabilities as of June 30, 2019 was 12,111 million yen (an increase of 89 million yen compared to
December 31, 2018). The increase in non-current liabilities is attributable to an increase of 88 million yen in leaseobligations.
(Net assets)
Total net assets as of June 30, 2019 amounted to 51,542 million yen, an increase of 20 million yen compared to December
31, 2018. The increase in total net assets was mainly due to a rise of 1,088 million yen in retained earnings despite adecrease of 1,054 million yen in foreign-currency translation adjustments.

2. Cash flows
Cash and cash equivalents (hereinafter referred to as "Funds") for the first six months of the current consolidated fiscal year
stood at 27,706 million yen, a decrease of 810 million yen compared to December 31, 2018.
Cash flows for the first six months of the current consolidated fiscal year and the main factors affecting them are as follows.
(Cash flows from operating activities)
Cash flows from operating activities were positive at 1,171 million yen and major factors are as follows. Although income
taxes paid stood at 1,967 million yen and an increase in inventories stood at 604 million yen, profit before income taxes
amounted to 2,664 million yen and non-cash depreciation and amortization amounted to 592 million yen.
Funds acquired declined by 2,340 million yen year on year (a decrease of 66.6% year on year in cash inflows), which was
mainly due to an increase of 1,742 million yen in cash flows from notes and accounts payable—trade, a rise of 1,092 million
yen in cash outflows from income taxes paid, and a reduction of 405 million yen in profit before income taxes, despite anincrease of 535 million yen in cash flows from notes and accounts receivable—trade.

–3–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019

(Cash flows from investing activities)
Cash flows from investing activities were negative at 718 million yen, with major factors as follows: a cash outflow of 507
million yen due to acquiring property, plant and equipment; and an increase in time deposits by 125 million yen.
Cash outflows increased by 433 million yen year on year (an increase of 152.1% in cash outflows year on year), which was
mainly attributable to cash outflows from acquiring property, plant and equipment growing by 444 million yen and a rise of 87
million yen in cash outflows from an increase in time deposits, despite a decrease of 89 million yen in cash outflows fromacquiring intangible assets.
(Cash flows from financing activities)
Cash flows from financing activities stood at 832 million yen in cash outflows. This was mainly attributable to a cash
outflow from payment of 789 million yen in cash dividends and a cash outflow of 90 million yen from repayments of financelease obligations.
Cash outflows decreased by 3,080 million yen year on year (a fall of 78.7% in cash outflows year on year), which was
mainly attributable to a rise of 1,578 million yen in cash inflows from a net increase in short-term loans payable, a reduction of
1,350 million yen in cash outflows from repayment of long-term loans payable, and a decline of 213 million yen in cash
dividends paid.

(3) Explanation of future forecasts such as consolidated financial results forecasts
Financial results forecasts for the fiscal year ending December 31, 2019, are as stated in the Consolidated Financial Results for
the Fiscal Year Ended December 31, 2018, (Japanese GAAP) announced on February 14, 2019 and no changes have been
made to the forecasts.

–4–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019

2. Quarterly consolidated financial statements and major notes(1) Quarterly consolidated balance sheet
FY 2018(As of December 31, 2018)
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–5–(Millions of yen)
Second quarter of FY 2019
(As of June 30, 2019)28,52019,54725,425
1,604(158)
74,93927,831
19,15625,4592,270(170)
74,547

1,857
374
75
185
279
2,771

1,659
401
155
394
865
3,476

671
168
303
815
69
2,028

616
409
44
653
66
1,790

1,255
1,058
1,035
810
(178)
3,979
8,779
83,719

1,138
935
1,017
684
(73)
3,702
8,970
83,517

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019

FY 2018(As of December 31, 2018)(Millions of yen)
Second quarter of FY 2019
(As of June 30, 2019)11,540
2,640
140
52
2,740
700
538
—
5
1,816
20,176

11,067
2,676
136
172
3,354
117
336
116
0
1,885
19,864

9,351
135
126
560
1,467
378
12,02132,197

9,273
224
101
600
1,501
409
12,111
31,9752,646
6,531
41,983(0)51,1602,646
6,531
43,071(0)52,249

6
(3)
360
(2)
360
51,521
83,719

4
(14)
(694)
(2)
(707)
51,542
83,517

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 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
Total net assets
Total liabilities and net assets–6–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019(2) Quarterly consolidated statements of income and comprehensive income
Quarterly consolidated statement of income
First six months ended June 30, 2019

Net sales
Cost of sales

90,251
74,913(Millions of yen)First six months of FY 2019
(January 1, 2019
to June 30, 2019)
92,181
76,359Gross profit

15,33815,821

Selling, general and administrative expenses
Operating income

12,282
3,055

13,253
2,568

55

114

—

9

172
—
18

0
3
41

246

169

88
141
0
2

60
12
—
0

Total non-operating expenses
Ordinary income

232
3,069

73
2,664

Extraordinary income
Total extraordinary income——

First six months of FY 2018
(January 1, 2018
to June 30, 2018)

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

Extraordinary losses
Total extraordinary losses——

Profit before income taxes
Income taxes—current
Income taxes—deferred
Total income taxes

3,069
981
(89)
891

2,664
791
(5)
786

Net income
Profit attributable to non-controlling interests

2,178
—

1,878
—

Profit attributable to owners of parent

2,178

1,878

–7–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019

Quarterly consolidated statement of comprehensive income
First six months ended June 30, 2019

2,178

(Millions of yen)First six months of FY 2019
(January 1, 2019
to June 30, 2019)
1,878

(5)
(6)

(1)
(11)

(935)
—

(1,013)
0

(64)

(41)

(1,012)
1,165(1,068)
810

1,165

810

—

—

First six months of FY 2018
(January 1, 2018
to June 30, 2018)
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–8–

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019(3) Quarterly Consolidated Statement of Cash FlowsFirst six months of FY 2018
(January 1, 2018
to June 30, 2018)(Millions of yen)First six months of FY 2019
(January 1, 2019
to June 30, 2019)

3,069
553
1
(55)
88

2,664
592
9
(114)
60

0

(9)

112
(506)
(848)
1,489
253
(130)
—

(1)
29
(604)
(253)
294
(194)
119

19

(4)

98
94
4,240
54
(94)
(874)
185
3,512

73
115
2,776
196
(60)
(1,967)
226
1,171

(62)
(134)
(38)
(49)
(284)

(507)
(45)
(125)
(40)
(718)

(1,450)(1,430)(0)(28)(1,002)(3,912)(526)(1,212)
31,28630,074

128
(79)
—
(90)
(789)
(832)
(431)
(810)
28,516
27,706

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using equity
methodForeign exchange losses (gains)
Decrease (increase) in notes and accounts receivable—trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable—trade
Increase (decrease) in accounts payable—other
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Increase (decrease) in provision for shareholder privilege
programIncrease (decrease) in net defined benefit liability
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Income taxes reimbursed
Cash flows from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Net decrease (increase) in time deposits
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Purchase of treasury shares
Repayments of finance lease obligations
Cash dividends paid
Cash flows from 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
Closing balance of cash and cash equivalents–9–Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019(4) 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.
(Changes in Accounting Policies)
Changes in the method for calculating retirement benefit obligations
Starting from the first quarter of the consolidated fiscal year, the Company has changed the method for calculating retirement
benefit obligations for its domestic consolidated subsidiaries from the simplified method to the standard method. In order to respondto changes in the business environment, two domestic consolidated subsidiaries were merged in January 2019. The number of
employees is expected to increase due to further expansion of operations in the future. In light of this, the Company verified thereliability of retirement benefit estimates based on actuarial calculations and concluded that adopting the standard method will
improve the accuracy of the calculation of retirement benefit obligations and enable more appropriate periodic accounting of profit
and loss regarding retirement benefit expenses, because of which the Company has applied such a change.
This change in accounting standards is applied retroactively. Consolidated financial statements for the first six months of the
fiscal year ended December 31, 2018 and the consolidated fiscal year ended December 31, 2018 have been adjusted retroactively.
As a result, compared with before the retroactive change, operating income, ordinary income, and profit before income taxes forthe first six months of the fiscal year ended December 31, 2018 each decreased by 7 million yen. The cumulative effect on net assets
at the beginning of the fiscal year decreased the retained earnings balance at the beginning of the fiscal year by 235 million yen.
Application of IFRS 16 Leases
Starting from the first quarter of the consolidated fiscal year, the Company and some of its overseas consolidated subsidiaries,
which adopt Japanese and U.S. standards, have applied IFRS 16 Leases. IFRS 16 Leases introduces a single lessee accounting
model and, in principle, requires a lessee to recognize assets and liabilities for all leases.
The impact of the application of this accounting standard on the quarterly consolidated financial statements is minimal.
(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 second quarter of the fiscal year.
(Changes in significant subsidiaries during the first three months of the fiscal year)
During the first quarter of the consolidated fiscal year, an absorption-type merger was implemented between the Company’s
consolidated subsidiaries, Nishimoto Trading Co., Ltd. as the surviving company and Wismettac Foods, Inc. as the absorbed
company. Due to this absorption-type merger, Wismettac Foods, Inc. has been excluded from the scope of consolidation from thefirst quarter of the consolidated fiscal year. Nishimoto Trading Co., Ltd., the surviving company, changed its trade name to
Wismettac Foods, Inc. as of January 1, 2019.
(Additional information)
Starting from the beginning of the first quarter of the consolidated fiscal year, the Partial Amendments to Accounting Standard forTax Effect Accounting (ASBJ Statement No. 28, February 16, 2018) has been applied. As a result, deferred tax assets are indicatedin the category of investments and other assets while deferred tax liabilities are indicated in the category of non-current liabilities.

– 10 –

Nishimoto Co., Ltd. - Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2019

(Segment information)
First six months of the fiscal year (from January 1, 2018 to June 30, 2018)
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 BusinessNet sales
Sales to external customers
Intersegment sales or transfers
Total
Segment profit

60,565
6,988
67,553
2,526

27,83574
27,909
527

1,851
—
1,851
19

Total

Adjustment(Note 1)

90,251
7,062
97,314
3,072

Amounts recordedin the quarterly
consolidated
statement of income(Note 2)—
(7,062)(7,062)(16)

90,251—
90,251
3,055(Note) 1. "Adjustment" for segment profit in the amount of (16) million yen includes (1,216) million yen for elimination ofintersegment transactions and 1,199 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 six months of the fiscal year (from January 1, 2019 to June 30, 2019)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

63,534
26,825
1,820
92,181—
92,181
6,467
23
—
6,491
(6,491)—
Total
70,002
26,8491,820
98,672(6,491)
92,181
Segment profit
2,407
197
62
2,668
(99)
2,568
(Note) 1. "Adjustment" for segment profit in the amount of (99) million yen includes (1,396) million yen for elimination ofintersegment transactions and 1,297 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.
Intersegment sales or transfers

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.

3.

Changes to reportable segments and others
As stated in "Changes in Accounting Policies," starting from the first quarter of the consolidated fiscal year, the method for

calculating retirement benefit obligations for the Company’s domestic consolidated subsidiaries has been changed from thesimplified method to the standard method. As a result, the measurement method for segment income or loss has also been changed.
Segment information for the first six months of the fiscal year ended December 31, 2018 is based on the measurement method forincome or loss to which the change has been applied.

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