亀田製菓（2220） – Consolidated Financial Results (Japanese Accounting Standards) for the Nine Months Ended December 31, 2021

Consolidated Financial Results (Japanese Accounting Standards) for the Nine Months Ended December 31, 2021 (Q3 FY2021) (English Translation) February 4, 2022 Company name: Stock exchange: Stock code: URL: Representative: Contact: KAMEDA SEIKA CO., LTD. Tokyo Stock Exchange 2220 www.kamedaseika.co.jp Isamu Sato, President & COO Akira Kobayashi, General Manager Administrative Div. Director & CFO Tel. +81-25-382-2111 Scheduled date for filing of securities report: February 14, 2022 Scheduled date of commencement of dividend payment: Supplementary documents for quarterly results: Yes Quarterly results briefing: None – (All amounts are rounded down to the nearest million yen) 1. Consolidated Financial Results for the Nine Months Ended December 31, 2021 (April 1, 2021 – December 31, 2021) (1) Consolidated Results of Operations (Accumulated Total) (Percentages show year-on-year changes.) Net sales Operating income Ordinary income ¥ million ¥ million Nine months ended 3,075 2,969 December 31, 2021 3,328 3,822 December 31, 2020 (Note) Comprehensive income: ¥ 3,881million (34.6%) for the nine months ended December 31, 2021 ¥ million % 62,531 － 77,230 0.7 ¥ million 3,677 4,631 % -22.3 1.6 % -20.6 2.8 ¥ 2,883million (2.6%) for the nine months ended December 31, 2020 Net income attributable to owners of the parent % -7.6 2.5 Net income Per share (basic) Net income Per share (diluted) Nine months ended December 31, 2021 December 31, 2020 (Note) 1. At the end of the fiscal year ended March 31, 2021, the Company confirmed the provisional accounting treatment related to business combinations. The figures for the nine months ended December 31, 2021 reflect the confirmed content of the provisional accounting treatment. ¥ 145.89 157.88 ¥ － － 2. The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the current consolidated fiscal year. The figures for the nine months ended December 31, 2021 represent figures after the application of the accounting standard, etc. Accordingly, the year-on-year percentage change in net sales is not stated. (2) Consolidated Financial Position Total assets Net assets Equity ratio As of December 31, 2021 As of March 31, 2021 (Reference) Shareholder’s equity: ¥ million 101,044 92,888 ¥ million 62,704 59,895 As of December 31, 2021: ¥ 60,496 million As of March 31, 2021: ¥ 58,217 million Net assets per share ¥ 2,869.33 2,761.24 % 59.9 62.7 (Note) The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) etc. from the beginning of the first quarter of the current consolidated fiscal year. The figures for the nine months ended December 31, 2021 represent figures after the application of the accounting standard, etc. 2. Dividends End of first quarter Dividend per share End of third quarter End of second quarter Year ended March 31, 2021 Year ending March 31, 2022 Year ending March 31, 2022 (forecasts) (Note) Revisions to dividend forecasts published most recently: None ¥ 15.00 15.00 ¥ － － Year-end Annual ¥ － － ¥ 38.00 39.00 ¥ 53.00 54.00 3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2022 (April 1, 2021 – March 31, 2022) (Percentages represent ratio of changes from the corresponding period of the previous year) Net sales Operating income Ordinary income Net income attributable to owners of the parent Net income per share Year ending March 31, 2022 (Note) ¥ million % ¥ million % ¥ million % ¥ million % ¥ 84,000 － 4,800 -14.6 5,600 -18.7 4,300 -9.6 203.95 1. Revisions to financial forecasts published most recently: Yes 2. The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the current consolidated fiscal year. The figures for the nine months ended December 31, 2021 represent figures after the application of the accounting standard, etc. Accordingly, the year-on-year percentage change in net sales is not stated. * Notes (1) Changes of important subsidiaries during the period (changes of specific subsidiaries in accordance with changes in the scope of consolidation): Yes 1 new company (Company name) THIEN HA KAMEDA, JSC. (Note) For details, please refer to page 10 of the Appendix,“2. Quarterly Consolidated Financial Statements (3) Notes to the Quarterly Consolidated Financial Statements (Changes in Important Subsidiaries during the Period)” (2) Application of particular accounts procedures to the preparation of quarterly consolidated financial statements: None. (3) Changes in accounting policies and changes or restatement of accounting estimates Changes in accounting policies caused by revision of accounting standards: Changes in accounting policies other than (i): Changes in accounting estimates: Restatement: (i) (ii) (iii) (iv) (Note) For details, please refer to “2. Quarterly Consolidated Financial Statements and Major Notes (3) Notes to the Quarterly Consolidated Financial Statements (Changes in Accounting Policies)” on page 10 of the Appendix. Yes None None None (4) Number of shares outstanding (common stock): (i) (ii) (iii) Number of shares outstanding at end of period (including treasury stock) 22,318,650 shares As of December 31, 2021: As of March 31, 2021: 22,318,650 shares Number of treasury stock at end of period 1,234,910 shares As of December 31, 2021: As of March 31, 2021: 1,234,695 shares Average number of shares outstanding during the term Nine months ended December 31, 2021: Nine months ended December 31, 2020: 21,083,887 shares 21,084,021 shares the audit corporation. * This quarterly financial results report is not subject to quarterly review procedures by certified public accountants or * Explanations and other special notes concerning the appropriate use of performance forecasts. (Caution concerning statements, etc. regarding the future) The forward-looking statements such as performance forecasts included in this document are based on the information available to the Company at the time of the announcement and on certain assumptions considered reasonable. Actual results may differ materially from the forecast depending on a range of factors. See “1. Qualitative Consolidated Financial Results Data for the Period under Review (3) Explanation of Future Estimates, Including Consolidated Forecasts” on page 5 of the Appendix for the conditions assumed in consolidated forecasts and notes on the use of consolidated forecasts. (How to obtain supplementary materials on financial results) Download from the Company’s website, available from Thursday, February 10, 2022. Contents of Appendix 1. Qualitative Consolidated Financial Results Data for the Period under Review ………………………………. 2 (1) Explanation of Consolidated Operating Results …………………………………………………………… 2 (2) Explanation of Consolidated Financial Position …………………………………………………………… 5 (3) Explanation of Future Estimates, Including Consolidated Forecasts ……………………………………… 5 2. Quarterly Consolidated Financial Statements and Major Notes…….………………………………………… 6 (1) Quarterly Consolidated Balance Sheet ……….……………………………………………………………… 6 (2) Quarterly Consolidated Income Statement and Consolidated Comprehensive Income Statement ………… 8 Quarterly Consolidated Income Statement Cumulative Third Quarter ……………..…………………………………………………………………… 8 Quarterly Consolidated Comprehensive Income Statement Cumulative Third Quarter ……………………….………………………………………………………… 9 (3) Notes to the Quarterly Consolidated Financial Statements………………………………………………… 10 (Notes to the Assumption of a Going Concern) ……………………………………………..……………… 10 (Notes Concerning Significant Changes in the Amount of Shareholder Equity)……….………………….. 10 (Changes in Important Subsidiaries during the Period) ………………………………………………….… 10 (Changes in Accounting Policies)…………………………………………………………………………… 10 (Segment Information) ……………………………………………………………………………………… 12 (Additional Information) …………………………………………………………………………………… 14 (Business Combinations, etc.) ……………………….………………….………………………….………… 14 1 1. Qualitative Consolidated Financial Results Data for the Period under Review The Group has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; hereinafter, the “Revenue Recognition Accounting Standard”), etc. from the beginning of the first quarter of the current consolidated fiscal year. The change in net sales compared to the nine months ended December 31, 2020 and the year-on-year percentage change are not stated, because the figures for the nine months ended December 31, 2021, explained herein as a consolidated operating results represent figures after the application of the accounting standard, etc. For details regarding the application of the “Revenue Recognition Accounting Standard,” etc., please refer to “2. Quarterly Consolidated Financial Statements and Major Notes (3) Notes to the Quarterly Consolidated Financial Statements (Changes in Accounting Policies).” (1) Explanation of Consolidated Operating Results During the nine months ended December 31, 2021, the Japanese economy continued to face a sluggish recovery in domestic consumption due to the spread of new mutant strains of COVID-19, and the outlook remained uncertain. With regard to the global economy, people are continuing to search for ways to coexist with COVID-19, and the economy is beginning to show signs of recovery amid delicate maneuvering, such as inflation control measures in the U.S. and the maintenance of the lower limit of potential growth rate in China. In the food industry in Japan, despite support from firm demand, revenue levels of companies are being pushed down by rising transportation costs due to soaring crude oil prices and strong upward pressure on various raw materials. Under these conditions and changes in the environment surrounding the food industry, the KAMEDA SEIKA Group has determined in the Medium-Term-Business Plan to continue to deliver value to customers from the perspective of “Better For You”; contribution to a healthy lifestyle through the selection, eating and enjoyment of things that are delicious and good for the body. Hence, the KAMEDA SEIKA Group will be enable to achieve sustainable growth and enhance its corporate value by realizing its long-term vision of becoming a “Global Food Company.” By FY2030, we aim to evolve from a “Rice cracker and snack manufacturer” to a “‘Better for You’ food company.” During the period of the medium-term business plan, which continues to FY2023, we are striving to realize our vision as a distinctive global corporation that stands firmly on the foundation provided by the three pillars of our Domestic Rice Cracker Business, Overseas Business, and Food Business. At the same time, we will implement structural reforms from a medium-to-long-term perspective to address changes in the business environment, such as changes in consumer behavior triggered by COVID-19, thereby making efforts to achieve sustainable growth and enhance our corporate value. We have positioned FY2021 as a year to solidify the foundation for our next stage of growth and to implement structural reforms, and are engaged in implementing various measures. In the Domestic Rice Cracker Business, we are working to further strengthen our revenue base in order to solidify our position, which is by far the best in the industry. The Overseas Business is working to achieve further growth in the North American market, and to improve profit and expand through investment in Asia. The Food Business is working to expand long-life preserved foods and allergen-free products, and to strengthen our initiatives for plant-based foods. In the Domestic Rice Cracker Business, we are working to expand environmentally friendly products from a medium-to-long-term perspective. In terms of sales, we are concentrating management resources on growth channels, and promoting the digitalization of sales activities such as SFA and MotionBoard. Even though stay-at-home demand resulting from the COVID-19 pandemic is subsiding, many of our products, such as “Tsumami Dane” and “Mugen Ebi,” are highly popular among our customers. We are working to increase our production capacity to meet the strong demand. Meanwhile, net sales of the Domestic Rice Cracker Business were down year-on-year, due to the impact of supply delays for our core products as a result of temporary labor shortages and other factors that acted against the increase in demand during the summer, as well as the impact of changes in product specifications and price revisions due to soaring raw material prices. 2 Our core brands, “KAMEDA Kaki-no-Tane” and “Happy Turn” are commemorating the 55th and 45th anniversaries of their launch, respectively. We are aiming to enhance the value of our brand through communication with customers by implementing a variety of campaigns to strengthen customer contact points. As a result of these initiatives, excluding the impact of the decline in revenue due to the Revenue Recognition Accounting Standard, net sales of our core brands, “Happy Turn,” “Tsumami Dane,” “Waza-no-KodaWari,” and “HaiHain” were up year-on-year. Meanwhile, “KAMEDA Kaki-no-Tane,” “KAMEDA Magari Senbei,” “Usuyaki,” “Soft Salad,” “Teshioya,” “Potapota Yaki,” “Age-Ichiban,” and “Katabutsu” were down year-on-year. In the Overseas Business, Mary’s Gone Crackers, Inc. in North America experienced a rebound from the special demand caused by the spread of COVID-19 in the previous year. Meanwhile, net sales of Singha Kameda (Thailand) Co. Ltd., which became a consolidated subsidiary during the previous fiscal year, contributed to our performance from the beginning of the fiscal year, while THIEN HA KAMEDA, JSC., which has the potential to expand sales channels in Vietnam and become a production base for future cross-border exports, has been included in the consolidated income from the third quarter. As a result, net sales excluding the impact of the decline in revenue due to the Revenue Recognition Accounting Standard increased year-on-year. In the Food Business, long-life preserved foods for corporate stockpiling as well as individual demand for such products has remained stable against the backdrop of heightened awareness regarding disaster prevention. In addition, inquiries for rice flour bread, which is free of 28 items identified as allergens and is produced by TAINAI Co., Ltd., which became a consolidated subsidiary, have been increasing rapidly. Meanwhile, stockpiling demand for long-life preserved foods during the COVID-19 pandemic has run its course. As a result, net sales excluding the impact of the decline in revenue due to the Revenue Recognition Accounting Standard decreased year-on-year. As a result of the above, net sales totaled ¥62,531 million. In terms of operating income, net sales at subsidiaries that deal with products for department stores and sell souvenirs remained at a moderate level of recovery, due to the impact of the intermittent continuation of declarations of a state of emergency and priority preventive measures, however we have been working to diversify our sales channels, establish an efficient operational structure, and reduce various costs. Meanwhile, in the KAMEDA SEIKA’s Rice Cracker Business, rising energy costs and soaring raw material prices have been continuing although we have taken measures such as changing formulation, making on-site improvements and revision of prices. In addition, we could not obtain the full effect from the revision of prices we aimed, because consumers continued to strongly economize and the Domestic Rice Cracker market in the third quarter was weak due to the rebound from special demand caused by the spread of COVID-19 in the previous year. As a results, operating income of the Domestic Rice Cracker Business decreased year-on-year. In the Overseas Business, operating income was flat year-on-year due to an improving trend resulting from the elimination of double operations by completion of our reorganization of Thai subsidiaries, and making the highly profitable THIEN HA KAMEDA, JSC. a consolidated subsidiary, despite the impact of the decline in revenue of Mary’s Gone Crackers, Inc. In the Food Business, although we worked to increase demand for long-life preserved foods and expand sales channels and reduce manufacturing costs for plant origin lactic acid bacteria products, profits declined mainly due to the impact of a reactionary decline from the increased demand for stockpiling of food in the previous year, as well as an increase in research and development expenses for future business expansion. As a result of these efforts, operating income decreased by 22.3% year-on-year to ¥2,969 million. In addition, as a result of a decrease in equity in earnings of affiliates of TH FOODS, INC., an affiliate accounted for by the equity method, ordinary income decreased by 20.6% year-on-year to ¥3,677 million. As a result of recording a gain on step acquisitions in connection with making THIEN HA KAMEDA, JSC. a consolidated subsidiary, net income attributable to owners of the parent decreased by 7.6% year-on-year to ¥3,075 million. 3 Supplementary Information In conjunction with the application of the Revenue Recognition Accounting Standard, figures prior to the application of the accounting standard are presented under the former standard, and figures after the application of the accounting standard are presented under the new standard. (Unit: ¥ million) Nine Months ended Nine Months ended 〔Reference〕*4 December 31, 2020 December 31, 2021 YoY Old standard*5 77,230 61,387 〔Reference〕*4,5 New standard 61,997 〔Reference〕 Old standard 77,436 46,953 60,825 6,393 4,244 5,205 3,822 4.9% 3,481 (176) 250 268 5,671 4,167 5,205 3,822 6.2% 3,481 (176) 250 268 7,435 4,049 5,125 2,997 3.9% 3,006 (172) (95) 260 New standard Change Change (%) 62,531 46,599 6,773 4,033 5,125 533 (354) 1,101 (134) (79) 0.9 (0.8) 19.4 (3.2) (1.5) 2,969 4.7% 2,959 (852) (22.3) (521) (15.0) (172) (77) 260 3 (327) (7) － － (2.9) Net sales Domestic Rice Cracker Business Overseas Business *1 Food Business *2 Other (Freights transport etc.) *3 Operating income Operating income margin Domestic Rice Cracker Business Overseas Business *1 Food Business *2 Other (Freights transport etc.) *3 *1. Overseas business includes domestic import and export transactions in addition to those of overseas subsidiaries. *2. Food business is mainly comprised of long-life preserved foods and plant origin lactic acid bacteria as well as bread made *3. *4. from brown rice and plant-based food. “Other” consists mainly of the subsidiary’s logistic business. In accordance with the application of the Revenue Recognition Accounting Standard, the Company analyzes and compares the amount under the assumption that the accounting standard has applied retroactively. *5. At the end of the previous fiscal year, the Company confirmed the provisional accounting treatment related to business combinations. Accordingly, the figures for the nine months ended December 31, 2020 reflect a significant revision of the initial amount of allocation of acquisition cost due to the confirmation of the provisional accounting treatment. 4 (2) Explanation of Consolidated Financial Position (Assets) Current assets stood at ¥28,717 million at the end of the third quarter, increased ¥3,139 million from the end of the previous fiscal year. This was mainly due to increases of ¥1,905 million in “Notes, accounts receivable-trade and contract assets,” ¥536 million in “Merchandise and finished goods,” ¥375 million in “Raw materials and supplies” and ¥650 million in “Other.” Fixed assets stood at ¥72,327 million, increased ¥5,015 million from the end of the previous fiscal year. This was mainly attributable to increases of ¥415 million in “Buildings and structures, net,” ¥3,247 million in “Other” under the Property, plant and equipment and ¥1,631 million in “Goodwill” which were partially offset by a decrease of ¥414 million in “Investment securities.” As a result, total assets stood at ¥101,044 million, increased ¥8,155 million from the end of the previous fiscal year. (Liabilities) (Net assets) Current liabilities stood at ¥29,109 million at the end of the third quarter, increased ¥6,463 million from the end of the previous fiscal year. This was mainly due to increases of ¥898 million in “Electronic-recording liabilities,” ¥4,740 million in “Short-term loans payable” and ¥3,138 million in “Other” which were partly offset by respective decreases of ¥981 million in “Income taxes payable” and ¥1,540 million in “Provision.” Long-term liabilities stood at ¥9,230 million, decreased ¥1,116 million from the end of the previous fiscal year. This was mainly due to a ¥1,419 million decrease in “Long-term loans payable.” As a result, total liabilities stood at ¥38,339 million, increased ¥5,346 million from the end of the previous fiscal year. Total net assets stood at ¥62,704 million at the end of the third quarter, increased ¥2,808 million from the end of the previous fiscal year. This mainly reflected increases of ¥1,550 million in “Retained earnings,” ¥745 million in “Foreign currency translation adjustments” and ¥530 million in “Non-controlling interests,” resulting from ¥3,075 million in “Net income attributable to owners of the parent,” ¥1,117 million in “Dividends from surplus” and a cumulative-effect adjustment of ¥407 million resulting from application of “Accounting Standard for Revenue Recognition,” etc. As a result, the equity ratio was 59.9%, down from 62.7% at the end of the previous fiscal year. (3) Explanation of Future Estimates, Including Consolidated Forecasts The consolidated forecasts for the fiscal year ending March 31, 2022 have been revised as follows, in accordance with the results for the third quarter of the fiscal year and future prospects. Although the Overseas Business and the Food Business performed steadily, net sales in the Domestic Rice Cracker Business stalled from October 2021, due to the temporary stockouts accompanying rapid growth in demand for “Tsumami Dane” and “Mugen Ebi,” rebound from special demand and strongly economize in our customers, while we implemented the revisions of prices and content in light of the sharp rise in raw material prices. In addition to these negative effects on sales, raw material prices continue to soar higher than initially expected, offsetting the positive effects of the revisions of prices and content, and depressed the profit level. As a result, operating income, ordinary income and net income attributable to owners of the parent are expected to be lower than the previous forecast. Net sales Operating income Ordinary income Net income attributable to owners of the parent Net income per share ¥ million 86,000 84,000 -2,000 -2.3 ¥ million 6,000 4,800 -1,200 -20.0 ¥ million 6,900 5,600 -1,300 -18.8 ¥ million 5,400 4,300 -1,100 -20.4 ¥ 256.12 203.95 － － Previous forecast (A) Revised forecast (B) Change (B-A) Change (%) (Reference) Results for the fiscal year ended March31,2021* * The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29, March 31, 2020) etc. from the beginning of the first quarter of the current consolidated fiscal year. Net sales at (Reference) Result for the fiscal year ended March 31, 2021 represent figures before the application of the accounting standard, etc. 103,305 225.62 5,620 6,889 4,757 5 2. Quarterly Consolidated Financial Statements and Major Notes (1) Quarterly Consolidated Balance Sheet Assets Current assets Cash and deposits Notes and accounts receivable-trade Notes, accounts receivable-trade and contract assets As of March 31, 2021 As of December 31, 2021 ¥ Million 25,577 28,717 6,510 11,876 － 2,364 807 3,113 920 (15) 16,095 17,424 12,005 45,525 844 722 587 364 1,029 3,547 12,545 5,737 (45) 18,237 67,311 92,888 6,208 － 13,781 2,900 779 3,489 1,571 (13) 16,511 17,364 15,253 49,128 2,476 676 550 341 1,043 5,087 12,130 6,025 (45) 18,111 72,327 101,044 Merchandise and finished goods Work in process Raw materials and supplies Other Allowance for doubtful accounts Total current assets Fixed assets Property, plant and equipment Buildings and structures, net Machinery, equipment and vehicles, net Total property, plant and equipment Other, net Intangible assets Goodwill Customer related assets Trademark assets Technology assets Other Total intangible assets Investments and other assets Investment securities Other Allowance for doubtful accounts Total investments and other assets Total fixed assets Total assets 6 ¥ Million As of As of March 31, 2021 December 31, 2021 3,668 2,499 6,502 1,062 2,412 67 6,433 22,646 7,953 531 262 1,599 10,346 32,992 1,946 170 55,514 (1,900) 55,730 734 － 1,245 507 2,487 1,678 59,895 92,888 3,877 3,397 11,242 80 871 66 9,572 29,109 6,534 525 261 1,908 9,230 38,339 1,946 170 57,065 (1,901) 57,280 764 4 1,990 455 3,215 2,208 62,704 101,044 Liabilities Current liabilities Notes and accounts payable-trade Electronic-recording liabilities Short-term loans payable Income taxes payable Provision Other Asset retirement obligations Total current liabilities Long-term liabilities Long-term loans payable Liabilities for retirement benefits Asset retirement obligations Other Total long-term liabilities Total liabilities Net assets Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains (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 7 (2) Quarterly Consolidated Income Statement and Consolidated Comprehensive Income Statement (Quarterly Consolidated Income Statement) (Cumulative Third Quarter) ¥ Million Nine months ended Nine months ended December 31, 2020 December 31, 2021 Selling, general and administrative expenses Net sales Cost of sales Gross profit Operating income Non-operating income Interest income Dividend income Equity in earnings of affiliates Other Total non-operating income Non-operating expenses Interest expenses Foreign exchange losses Commitment fee Other Total non-operating expenses Ordinary income Extraordinary income Gain on step acquisitions Total extraordinary income Extraordinary losses Loss on disposal of noncurrent assets Total extraordinary losses Income before income taxes Income taxes-current Income taxes-deferred Total income taxes Net income Net income (loss) attributable to non-controlling interests Net income attributable to owners of the parent 8 77,230 44,141 33,088 29,266 3,822 1,035 4 47 648 334 70 105 10 40 227 － － 4,631 156 156 4,474 916 238 1,155 3,319 (9) 3,328 62,531 45,272 17,258 14,288 2,969 16 49 478 240 785 40 － 17 19 77 3,677 730 730 160 160 4,247 286 833 1,120 3,127 51 3,075 (Quarterly Consolidated Comprehensive Income Statement) (Cumulative Third Quarter) Net income Other comprehensive income Valuation difference on available-for-sale securities Deferred gains (losses) on hedges Foreign currency translation adjustment Adjustment for retirement benefits Share of other comprehensive income of associates accounted for using equity method Total other comprehensive income Comprehensive income (Breakdown) Comprehensive income attributable to owners of the parent Comprehensive income (loss) attributable to non-controlling interests ¥ Million Nine months ended Nine months ended December 31, 2020 December 31, 2021 3,319 97 (4) (135) 79 (471) (435) 2,883 2,946 (62) 3,127 30 4 401 (51) 369 754 3,881 3,804 76 9 (3)Notes to the Quarterly Consolidated Financial Statements (Notes to the Assumption of a Going Concern) Not applicable. Not applicable. (Notes Concerning Significant Changes in the Amount of Shareholder Equity) (Changes in Important Subsidiaries during the Period) 1. Material change in the scope of consolidation During the second quarter of the current consolidated fiscal year, THIEN HA KAMEDA, JSC., which was an equity method affiliated company, has been included in the scope of consolidation as a result of the additional acquisition of shares. In addition, as a result of the acquisition of shares of TAINAI Co., Ltd., it has been included in the scope of consolidation. 2. Material change in the scope of equity method From the second quarter of the current consolidated fiscal year, THIEN HA KAMEDA, JSC. has been excluded from the scope of equity method since it has been included in the scope of consolidation through an additional share acquisition. (Changes in Accounting Policies) (Application of “Accounting Standard for Revenue Recognition,” etc.) The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; hereinafter, the “Revenue Recognition Accounting Standard”), etc. from the beginning of the first quarter of the current consolidated fiscal year and recognizes revenue in the amount expected to be received in exchange for promised goods or services at the time when the control of the goods or services is transferred to customers. Major changes as a result of this application are as described below. 1. Variable Consideration and Consideration payable to a customer The Company previously recorded certain sales promotion expenses, etc. under selling, general and administrative expenses. The Company has now changed to a method to subtract such expenses from net sales. 2. Agent Transactions Regarding transactions involving certain products in the Food Business in which the Group acts as an agent in providing the products to customers, the Company previously recognized the gross amount of consideration to be received from customers as revenue. The Company has now changed to a method to recognize revenue at the net amount after deducting the amount to be paid to suppliers from the amount to be received from customers. The application of the Revenue Recognition Accounting Standard, etc. is based on the transitional treatment provided for in the proviso of Paragraph 84 of the Revenue Recognition Accounting Standard. The cumulative effect of the retroactive application of the new accounting policy, assuming that it has been applied to periods prior to the beginning of the first quarter of the current consolidated fiscal year, is added to or subtracted from retained earnings at the beginning of the first quarter of the current consolidated fiscal year, and the new accounting policy is applied from such beginning balance. As a result, for the nine months ended December 31, 2021, net sales decreased by ¥14,905 million, cost of sales increased by ¥22 million, selling, general and administrative expenses decreased by ¥14,899 million, and operating income, ordinary income, and income before income taxes decreased by ¥27 million, respectively. In addition, the beginning balance of retained earnings decreased by ¥407 million. Furthermore, “Notes and accounts receivable-trade,” which was presented under “Current assets” in the consolidated balance sheet for the previous fiscal year, is included in “Notes and accounts receivable-trade, and contract assets” from the first quarter of the current consolidated fiscal year. A portion of “Other provisions,” which was presented 10 under “Current liabilities” in the consolidated balance sheet for the previous fiscal year, is recognized as refund liabilities and included in “Other” under current liabilities. In accordance with the transitional treatment provided for in Paragraph 89-2 of the Revenue Recognition Accounting Standard, the Company has not reclassified financial statements for the previous fiscal year based on the new presentation method. Furthermore, in accordance with the transitional treatment provided for in Paragraph 28-15 of the “Accounting Standard for Quarterly Financial Reporting” (ASBJ Statement No. 12, March 31, 2020), information on disaggregate revenue from contracts with customers for the nine months ended December 31, 2020 is not presented. (Application of “Accounting Standard for Fair Value Measurement,” etc.) The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019) and other standards in Paragraph 19 of the “Accounting Standard for Fair Value Measurement” and Paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019), we have decided to apply the new accounting policies set forth by the “Accounting Standard for Fair Value Measurement” into the future. These changes had no impact on the quarterly consolidated financial statements. 11 (Segment Information) Ⅰ Nine months ended December 31, 2020(April 1, 2020 – December 31, 2020) 1. Information regarding the amount of net sales, income and loss by reportable segment Reportable segment Domestic Rice Cracker Overseas Food Total Other (Note) 1 Total Adjustment (Note) 2 ¥ million The amount stated in quarterly consolidated income statement (Note) 3 Net sales 61,387 6,393 4,244 72,025 5,205 77,230 － 77,230 3 828 18 850 4,227 5,078 (5,078) － Total 61,391 7,221 4,262 72,875 9,433 82,308 (5,078) 77,230 3,481 (176) 250 3,554 261 3,815 6 3,822 (Note) 1. “Other” refers to business segments not included in the reportable segments, which includes Freights transport etc. 2. ¥6 million of adjustment of segment income (loss) is ¥6 million of elimination of intersegment transactions. 3. Segment income is adjusted with operating income reported on quarterly consolidated income statement. 2. Information on goodwill and impairment loss on noncurrent assets for each reportable segment (Material Impairment Loss on Fixed Assets) Not applicable. (Material Change in the Amount of Goodwill) With regard to the share acquisition of Singha Kameda (Thailand) Co., Ltd., which was implemented during the first quarter of the previous consolidated fiscal year, the amount of goodwill was provisionally calculated, as the allocation of acquisition cost had not been confirmed. Since the allocation of acquisition cost was completed and the provisional accounting treatment was confirmed at the end of the fiscal year ended March 31, 2021, the Company has revised the amount of goodwill. For details, please refer to “Notes (Business Combinations, etc.).” (Material profit from negative goodwill) Not applicable. Net sales to outside customers Internal sales or transfers between segments Segment income (loss) 12 Net sales Revenue from contracts with customers Other income Net sales to outside customers Internal sales or transfers between segments Ⅱ Nine months ended December 31, 2021(April 1, 2021 – December 31, 2021) 1. Information regarding the amount of net sales, gain and loss by reportable segment Reportable segment Overseas Food Domestic Rice Cracker Total Other (Note) 1 Total Adjustment (Note) 2 46,599 6,773 4,033 57,405 5,125 62,531 － － － － － － 46,599 6,773 4,033 57,405 5,125 62,531 － － － 5 940 27 974 4,264 5,238 (5,238) ¥ million The amount stated in quarterly consolidated income statement (Note) 3 62,531 － 62,531 － Total 46,604 7,714 4,060 58,379 9,390 67,770 (5,238) 62,531 Segment income (loss) (Note) 1. “Other” refers to business segments not included in the reportable segments, which includes Freights 2,954 2,959 2,709 (172) (77) 245 14 2,969 transport etc. 2. ¥14 million of adjustment of segment income (loss) is ¥14 million of elimination of intersegment transactions. 3. Segment income is adjusted with operating income reported on quarterly consolidated income statement. 2. Notes relating to changes in reportable segments etc. As described in “Changes in Accounting Policies,” the Company has applied the Revenue Recognition Accounting Standard, etc. from the beginning of the first quarter of the current consolidated fiscal year and changed the accounting method for revenue recognition. Accordingly, the Company has similarly changed the method to measure segment income (loss). As a result of this change, in comparison with the previous method, net sales and segment income in the “Domestic Rice Cracker Business” decreased by ¥14,225 million and ¥46 million, respectively, net sales in the “Overseas Business” decreased by ¥662 million, and net sales in the “Food Business” decreased by ¥16 million and segment income increased by ¥18 million. 3. Information on goodwill and impairment loss on noncurrent assets for each reportable segment (Material Impairment Loss on Fixed Assets) Not applicable. (Material Change in the Amount of Goodwill) As a result of the additional acquisition of shares of THIEN HA KAMEDA, JSC. and its inclusion in the scope of consolidation, with a deemed acquisition date of the end of the second quarter of the current consolidated fiscal year, goodwill in the “Overseas Business” segment increased by ¥1,502 million, compared to the end of the previous fiscal year. The amount of goodwill is calculated provisionally, as the allocation of acquisition cost has not been completed, as of the end of the second quarter of the current consolidated fiscal year. As a result of the acquisition of shares of TAINAI Co., Ltd. and its inclusion in the scope of consolidation, with a deemed acquisition date of the end of the second quarter of the current consolidated fiscal year, goodwill in the “Food” segment increased by ¥186 million, compared to the end of the previous fiscal year. (Material profit from negative goodwill) Not applicable. 13 (Additional Information) (Accounting Estimates in Relation to the Impact of the Spread of COVID-19) For the first three quarters of the current consolidated fiscal year, no new additional information has arisen and there have been no significant changes to the information contained in the previous fiscal year’s securities report. (Business Combinations, etc.) (Significant revision of the initial amount of allocation of acquisition cost in the comparative information) The Company provisionally accounted for the business combination of Singha Kameda (Thailand) Co., Ltd., which was conducted on June 29, 2020, for the first quarter of the previous consolidated fiscal year. The provisional accounting treatment was confirmed at the end of the previous fiscal year. In conjunction with the confirmation of the provisional accounting treatment, a significant revision of the initial amount of allocation of acquisition cost has been reflected in the comparative information included in the quarterly consolidated financial statements for the nine months ended December 31, 2021. Accordingly, the ¥589 million in goodwill, which was provisionally calculated for the nine months ended December 31, 2020, has decreased by ¥159 million to ¥429 million due to the confirmation of the amount of allocation of acquisition cost. The decrease in goodwill is mainly due to increases in property, plant and equipment, long-term liabilities, and non-controlling interests by ¥399 million, ¥79 million, and ¥159 million, respectively. As a result, in the quarterly consolidated income statements for the third quarter of the previous fiscal year, operating income, ordinary income, income before income taxes, and net income increased by ¥4 million, respectively. In addition, net income attributable to owners of the parent increased by ¥2 million. 14