プリマハム（2281） – (Delayed) Consolidated Financial Results for the Fiscal Year March 31,2022

Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 [Japanese GAAP] May 9, 2022 Company name: Prima Meat Packers, Ltd. Stock exchange listing: Tokyo Stock Exchange Securities Code number: 2281 URL: https://www.primaham.co.jp/ Representative: Naoto Chiba, President and CEO Contact: Takahiro Uchiyama, Senior Managing Executive Officer Phone: +81-3-6386-1800 Scheduled date of the Annual General Meeting of Shareholders: June 28, 2022 Scheduled date of commencing dividend payments: June 29, 2022 Scheduled date of filing annual securities report: June 28, 2022 Availability of supplementary briefing material on financial results: Yes Schedule of financial results briefing session: Yes (for institutional investors and analysts) (Amounts of less than one million yen are rounded down.) 1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31, 2022)(% indicates changes from the previous corresponding period.) (1) Consolidated Operating ResultsProfit attributable to owners of parent Operating profit Ordinary profit Net sales Fiscal year ended March 31, 2022 March 31, 2021 (Note) Comprehensive income: Fiscal year ended March 31, 2022: ¥12,088 million [(31.5)%] Fiscal year ended March 31, 2021: ¥17,657 million [106.4%] % Million yen 12,966 – 21,475 3.7 % Million yen 14,883 22,411 Million yen 419,591 433,572 (39.6) 37.3 (33.6) 40.4 % Million yen 9,718 14,165 % (31.4) 60.5 Earnings per share Diluted earnings per share Return on equity Return on assets Operating margin Fiscal year ended Yen March 31, 2022 193.41 March 31, 2021 281.90 (Reference) Share of profit of entities accounted for using equity method: Fiscal year ended March 31, 2022: ¥79 million Fiscal year ended March 31, 2021: ¥182 million – – Yen % 9.0 14.6 % 6.8 10.9 % 3.1 5.0 Prima Meat Packers, Ltd. and its subsidiaries (“the Group”) has applied the “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 29, March 31, 2020), etc. from the beginning of the fiscal year. As a result, changes in net sales from the previous fiscal year before the said accounting standard was applied are not presented. (2) Consolidated Financial PositionTotal assets Net assets Equity ratio As of March 31, 2022 As of March 31, 2021 (Reference) Equity: As of March 31, 2022: ¥111,860 million As of March 31, 2021: ¥103,632 million Million yen 221,721 214,542 Million yen 122,567 114,761 Net assets per share Yen 2,226.09 2,062.41 % 50.5 48.3 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Million yen 16,739 27,248 Million yen (23,713) (12,205) Million yen (6,616) (7,509) Cash and cash equivalents at end of period Million yen 16,230 29,773 1st quarter-end Yen 2nd quarter-end Yen Annual dividends 3rd quarter-end Yen – – – 20.00 20.00 20.00 – – – Year-end Total Total dividends (Total) Payout ratio (Consolidated)Dividends on equity (Consolidated)Yen 65.00 45.00 Yen Million yen 85.00 65.00 4,278 3,272 45.00 65.00 % 30.2 33.6 – % 4.4 3.0 (3) Consolidated Cash FlowsFiscal year ended March 31, 2022 March 31, 2021 2. DividendsFiscal year ended March 31, 2021 March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) 31, 2023)3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 to MarchNet sales Operating profit Ordinary profit (% indicates changes from the previous corresponding period.) Profit attributable to owners of parent Earnings per share Million yen % Million yen % Million yen % Million yen % Second quarter-end (Cumulative) Full year 219,900 441,000 4.8 5.1 8,500 6.3 8,800 (0.6) 5,600 16,100 24.2 16,600 11.5 10,600 Yen 111.44 210.95 5.9 9.1 Notes: (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scopeof consolidation): NoneNew: – Excluded: –(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement1) Changes in accounting policies due to the revision of accounting standards: Yes2) Changes in accounting policies other than 1) above: None3) Changes in accounting estimates: None4) Retrospective restatement: None(3) Total number of issued shares (common shares)1) Total number of issued shares at the end of the period (including treasury shares):March 31, 2022: 50,524,399 shares March 31, 2021: 50,524,399 shares 2) Total number of treasury shares at the end of the period:March 31, 2022: 274,624 shares March 31, 2021: 275,939 shares 3) Average number of shares during the periodFiscal year ended March 31, 2022: 50,249,471 shares Fiscal year ended March 31, 2021: 50,248,927 shares (Note) The number of treasury shares that has been excluded when calculating total number of treasury shares at the end of the period, and average number of shares during the period includes the Company’s shares owned by the Board Benefit Trust (“BBT”). (Reference) Overview of Non-Consolidated Financial Results 1. Non-Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31, 2022)(1) Non-Consolidated Operating ResultsNet sales (% indicates changes from the previous corresponding period.) Operating profit Ordinary profit Fiscal year ended March 31, 2022 March 31, 2021 Million yen 299,454 311,596 % Million yen 7,463 – 11,692 3.6 % Million yen 8,802 13,018 (36.2) 33.9 Profit % Million yen 6,456 8,825 (32.4) 31.4 % (26.8) 56.7 Fiscal year ended March 31, 2022 March 31, 2021 Earnings per share Diluted earnings per share Yen 128.50 175.63 Yen – – (2) Non-Consolidated Financial PositionTotal assets Net assets Equity ratio As of March 31, 2022 As of March 31, 2021 (Reference) Equity: As of March 31, 2022: ¥74,406 million As of March 31, 2021: ¥71,841 million Million yen 144,700 143,742 Million yen 74,406 71,841 Net assets per share Yen 1,480.72 1,429.72 % 51.4 50.0 *These financial results are outside the scope of audit procedures by a certified public accountant or an audit firm.* Explanation of the proper use of the financial results forecast and other notes•The earnings forecasts and other forward-looking statements herein are based on information available to theCompany at the time of preparation and certain assumptions deemed to be reasonable, and actual results may varysignificantly due to various factors. For the assumptions and notes for earnings forecasts, please refer to “1.Overview of Operating Results, etc., (1) Overview of Operating Results for the Fiscal Year” on page 2 of theattachment.The Company plans to hold a financial results briefing session for institutional investors and analysts on May 18,2022. Soon after the event, we plan to post financial results briefing materials to be distributed at the briefing onour website.•Prima Meat Packers, Ltd. (2281) Table of Contents 1. Overview of Operating Results, etc. ………………………………………………………………………………………………… 2 (1) Overview of Operating Results for the Fiscal Year ………………………………………………………………………… 2 (2) Overview of Financial Position for the Fiscal Year ………………………………………………………………………… 3 (3) Overview of Cash Flows for the Fiscal Year …………………………………………………………………………………. 4 (4) Future Outlook …………………………………………………………………………………………………………………………. 5 (5) Basic Policy for Distribution of Profit and Dividends for FY2021 and FY2022 ………………………………….. 5 2. Basic Policy on Selection of Accounting Standards …………………………………………………………………………… 5 3. Consolidated Financial Statements and Primary Notes ………………………………………………………………………. 6 (1) Consolidated Balance Sheets ………………………………………………………………………………………………………. 6 (2) Consolidated Statements of Income and Comprehensive Income ……………………………………………………. 8 (3) Consolidated Statements of Changes in Equity …………………………………………………………………………….. 10 (4) Consolidated Statements of Cash Flows ………………………………………………………………………………………. 12 (5) Notes to the Consolidated Financial Statements ………………………………………………………………………….. 14 (Notes on going concern assumption) …………………………………………………………………………………………. 14 (Changes in accounting policies) ……………………………………………………………………………………………….. 14 (Changes in presentation method) …………………………………………………………………………………………….. 14 (Additional information) …………………………………………………………………………………………………………… 15 (Segment information) ……………………………………………………………………………………………………………. 16 (Per share information) …………………………………………………………………………………………………………… 22 (Significant subsequent events) …………………………………………………………………………………………………. 22 1 Prima Meat Packers, Ltd. (2281) 1. Overview of Operating Results, etc. (1) Overview of Operating Results for the Fiscal Year Items in this document which relate to the future are judgments made by Prima Meat Packers, Ltd. and its subsidiaries (“the Group”) as of the end of the fiscal year. The Group has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020, hereinafter the “Revenue Recognition Standard”), etc. from the beginning of the fiscal year. Accordingly, the explanation on operating results does not mention year-on-year comparison for net sales. For details, please refer to “3. Consolidated Financial Statements and Primary Notes, (5) Notes to the Consolidated Financial Statements (Changes in accounting policies).” In addition, comments that make comparisons with net sales from the previous corresponding period also are based on figures calculated excluding the effects of the Revenue Recognition Standard. During the fiscal year, the Japanese economy witnessed the food service, tourism, and other industries being severely impacted as the nation was asked to stay at home under the ongoing pre-emergency measures and the declaration of the state of emergency, implemented as part of measures to prevent the further spread of the infection. There were signs of improvement in the COVID-19 situation during the fiscal year, restrictions on the restaurant industry and events were lifted in stages, normal business operations resumed, and economic activities gradually began to recover, but the outbreak of the Omicron strain led to the re-issuance of pre-emergency measures. As a result of the third round of vaccinations, the government has fully lifted pre-emergency measures as of the end of the fiscal year, but the pace of recovery remains sluggish. The impact of the Russian invasion of Ukraine has also further increased the uncertain outlook for the future. In the food industry, despite robust expenditures associated with household demand, with the delayed recovery of customer traffic to restaurants, the business climate overall remains harsh, and the economy is characterized by a clear divide in recovery fortunes depending on business format. Furthermore, consumption behavior is changing and new lifestyle patterns are taking hold, such as expanding demand for online purchases, home-delivery and take-away services. In our sector, manufacturing costs have been significantly impacted by deteriorating terms of trade, including higher raw materials and crude oil prices, the depreciated yen, high grain market prices and rising transportation and labor costs. Under these circumstances, based on the basic philosophy of “Contributing to food culture and society through great taste and excitement,” we set and worked to attain the basic policy goal in our medium-term management plan of “Strengthening basic sustainability through ESG measures,” “Expanding the scope of existing businesses and further strengthening the earnings base,” and “Business creation and global expansion for growth markets.” In particular, as a food business, we concentrated on stepping up measures for prevention of infection, and on continuing to supply safe, worry-free products, to meet the expectations of our customers and consumers. In addition, under the severe environment of the industry has experienced, we have made every effort to improve the efficiency of manufacturing plants and logistics, etc. However, due to unpredictable cost increases, the situation has exceeded the limit of cost absorption through corporate efforts, and in order to continuously supply food loss and environmentally friendly products, we implemented price revisions (changes in product standards and increase in delivery price) for household products and products for business of ham, sausages and processed foods. As a result, net sales amounted to ¥419,591 million (¥433,572 million for the same period of the previous fiscal year), operating profit was ¥12,966 million (down 39.6% year on year), ordinary profit was ¥14,883 million (down 33.6% year on year), and profit attributable to owners of parent was ¥9,718 million (down 31.4% year on year). Results by segment are as follows: 1) Ham and sausage section We implemented measures to increase our share in the retail product market, despite the overall market decline year on year due partly to a reactionary drop from last year. In the Koukun® Sausage series, one of our core brands, not only our standard two-piece bundle products size range but also the larger size range packed in zipper bag performed well. The series, with continuing the wide support of customers of all generations, and expanded sales share this year as well. The retail products increased sales year on year mainly due to the contribution of the 90th anniversary sales promotion campaign. The products for business also increased sales year on year a partial recovery of the market and new product proposals. As marketing promotion strategies, we implemented the Tokyo Disney Resort® invitation 2 Prima Meat Packers, Ltd. (2281) campaign and Prima Meat product present campaign, as well as other campaigns utilizing our official corporate Twitter account and LINE as part of new initiatives. As a result, we increased total net sales and volumes year on year in the ham and sausage section. 2) Processed foods section The processed foods section continued to see strong performance from Prima Grill Hamburg and other hamburger steak products. However, due partly to a reactionary drop from last year, total retail product sales declined year on year. New products, such as plant-based meat Try Veggie, Stock Dish that can be stored at room temperature, and Tsumami-dori which matches snack demand, received high marks from consumers and are planning to expand sales. In the products for business, although there was a period of difficulty in procuring certain products due to the closing of processing plants caused by COVID-19 overseas and a decrease in demand for seasoned meat due to the escalating price of imported beef, the overall market recovered and sales increased due to a recovery trend in the flow of people. For the processed foods section overall, net sales declined year on year due to the significant impact of decline in retail product sales. Despite the harsh business climate with fewer customers in the CVS market our vendor business for convenience stores managed to increase sales year on year, owing to development of new products to meet customers’ needs. However, profit fell year on year due to rising prices of raw materials and fuel costs, as well as higher labor costs. As a result, net sales were ¥285,571 million (¥293,334 million for the previous fiscal year; an increase from the previous fiscal year by subtracting the effect of the Revenue Recognition Standard from net sales for the fiscal year), and segment profit was ¥14,069 million (down 20.6% year on year). The environment for the Fresh Meat Business was extremely harsh mainly due to high overseas market prices, high transport costs as a result of the prolonged shortage of containers, as well as soaring grain prices. Profitability deteriorated in our procurement and sales because of the supply shortage brought on by transport delays as a result of damages of disasters, in addition to our inability to pass soaring procurement costs for imports on to customers. Although the Group expanded domestic pork production operations in Japan and improved farm business productivity in the hog farming business, net sales and profit decreased year on year due in part to soaring feed prices. As a result, net sales were ¥133,539 million (¥139,719 million for the previous fiscal year; a decrease from the previous fiscal year by subtracting the effect of the Revenue Recognition Standard from net sales for the fiscal year), and segment profit was ¥221 million (down 93.9% year on year). Net sales of Other Business (development, manufacture and sale of scientific instruments) were ¥480 million (down 7.3% year on year) and segment profit was ¥228 million (up 53.0% year on year). (2) Overview of Financial Position for the Fiscal Year The total assets at the end of the fiscal year were ¥221,721 million, an increase of ¥7,178 million compared to the end of the previous fiscal year. This was mainly due to increases of ¥6,005 million in construction in progress, ¥2,208 million in goodwill, ¥1,887 million in merchandise and finished goods, ¥1,465 million in retirement benefit asset, ¥935 million in machinery, equipment and vehicles, ¥669 million in notes and accounts receivable – trade, and a decrease ¥6,988 million in deposits paid. Liabilities decreased by ¥626 million compared to the end of the previous fiscal year to ¥99,154 million. This was mainly due to increases of ¥1,686 million in notes and accounts payable – trade and ¥819 million in deferred tax liabilities, and decreases ¥2,820 million in income taxes payable, ¥1,287 million in long-term borrowings (including current portion of long-term borrowings). 3 Prima Meat Packers, Ltd. (2281) Net assets increased by ¥7,805 million compared to the end of the previous fiscal year to ¥122,567 million. This was mainly due to increases of ¥4,028 million in retained earnings and ¥2,034 million in revaluation reserve for land. (3) Overview of Cash Flows for the Fiscal Year Cash and cash equivalents (hereinafter referred to as “cash”) at the end of the fiscal year were ¥16,230 million, a decrease of ¥13,542 million compared to the end of the previous fiscal year (an increase of ¥7,558 million for the same period of the previous fiscal year). Cash flows from operating activities recorded a net cash inflow of ¥16,739 million (a net cash inflow of ¥27,248 million for the same period of the previous fiscal year). Main positive factors were profit before income taxes of ¥15,106 million, depreciation and amortization of ¥10,451 million, and an increase of ¥1,553 million in trade payable, while the main negative factors were income taxes paid of ¥6,377 million, and an increase of ¥2,645 million in inventories. Cash flows from investing activities recorded a net cash outflow of ¥23,713 million (a net cash outflow of ¥12,205 million for the same period of the previous fiscal year). This was primarily due to an outflow of ¥14,662 million for purchase of property, plant and equipment in order to renew production facilities, improve productivity, and stabilize quality and payments into deposits paid to subsidiaries and associates of ¥5,000 million. Cash flows from financing activities recorded a net cash outflow of ¥6,616 million (a net cash outflow of ¥7,509 million for the same period of the previous fiscal year). This was primarily due to an outflow of ¥4,270 million for dividends paid and repayments of long-term borrowings of ¥3,854 million. (Reference) Trends in cash flow indicators Year ended March 31, 2018 Year ended March 31, 2019 Year ended March 31, 2020 Year ended March 31, 2021 Year ended March 31, 2022 Equity ratio Equity ratio on market value basis Ratio of interest-bearing debt to cash flow Interest coverage ratio 42.8 80.9 3.0 66.8 42.2 50.6 1.2 45.6 62.1 1.1 48.3 81.7 0.8 50.5 49.9 1.2 125.9 151.0 216.9 139.2 Equity ratio: Equity/Total assets Equity ratio on market value basis: Market capitalization/Total assets Ratio of interest-bearing debt to cash flow: Interest-bearing debt/Cash flow from operating activities Interest coverage ratio: Cash flow from operating activities/Interest expense (Notes) 1. All indicators are calculated based on consolidated figures. 2. Market capitalization is calculated based on the number of issued shares excluding treasury shares. 3. We use “Net cash provided by operating activities” from the consolidated statements of cash flows for “Cash flow from operating activities.” 4. We have included all interest-bearing debts in the consolidated balance sheets for “Interest-bearing debt.” Additionally, we use “Interest expenses paid” from the consolidated statements of cash flows for “Interest expense.” 4 Prima Meat Packers, Ltd. (2281) (4) Future Outlook Although COVID-19 has not reached a conclusion even after the second year, it is expected that social activities will continue to balance prevention of the infection with economic activities for the foreseeable future. Even after COVID-19 is brought under control, it is hard to imagine life in the future to exactly the way it was before. We expect that purchasing and consumption behavior will evolve in accordance with the new lifestyle. In our industry, major raw materials and secondary materials such as flour, food oil, and packaging materials casts have been rising. In addition, rising oil prices and the depreciated yen, as well as distribution costs and labor costs, have had a significant impact on manufacturing costs. There is a strong likelihood that the pork market will be severely impacted by African swine fever (ASF) and classical swine fever (CSF) epidemic which have not yet been brought under control, and an expected global increase in feed costs. The situation needs to be watched closely. Against this backdrop, to realize the Group vision of contributing “To food culture and society through great taste and excitement,” management will emphasize ESG principles, to increase sales and improve profit quality by strengthening marketing, development and product-commercialization capabilities. For this purpose, we are forming a clear idea of what kind of risks and opportunities can be expected in the medium-to-long term, and identifying major material issues where action needs to be taken. The “Sustainability Committee” was established by promoting efforts to resolve these issues and improve corporate value over the medium to long term. By setting goals for the future and taking due action, the Group will focus on striking the right balance between ensuring continuous growth and contributing to resolution of social issues. With a basic policy of becoming a “Company that customers will always love and support,” we are taking concrete measures to ensure fulfilment of management plan goals by “Strengthening basic sustainability through ESG measures” and “Expanding the scope of existing businesses and further strengthening the earnings base.” At the same time, we are working for long-term Group development through “Growth investment and global expansion.” The Company forecasts net sales of ¥441,000 million, operating profit of ¥16,100 million, ordinary profit of ¥16,600 million, and profit attributable to owners of parent of ¥10,600 million for the fiscal year ending March 31, 2023. (5) Basic Policy for Distribution of Profit and Dividends for FY2021 and FY2022 The Company views distribution of profit to shareholders as a priority by management, and has a basic policy of paying out a stable dividend while ensuring maintenance of a healthy financial structure and full availability of internal reserves for necessary future investments. In light of this basic policy, and after a comprehensive review of performance in the fiscal year ended March 31, 2022 and future investment plans, etc., the Company has decided to pay out an ordinary dividend of ¥65.00 per share (¥20.00 as an already-paid interim dividend, plus a ¥45.00 year-end dividend). For the fiscal year ending March 31, 2023, the Company plans to pay a mid-term dividend of ¥20.00 per share and a year-end dividend of ¥45.00 per share. 2. Basic Policy on Selection of Accounting Standards It is currently the policy of the Company to compile consolidated financial statements based on Japanese accounting standards, given that most stakeholders of the Group are shareholders, creditors and business partners in Japan, and in light of the resulting ease of comparison of consolidated financial statements period for period and with other companies in Japan. In the future, we plan to consider adopting International Financial Reporting Standards, based on trends in proportions of overseas shareholders and in application of such accounting standards by competitors in Japan. 5 3. Consolidated Financial Statements and Primary Notes (1) Consolidated Balance Sheets Prima Meat Packers, Ltd. (2281) As of March 31, 2021 As of March 31, 2022 Assets Current assets (Million yen) 12,556 44,104 16,796 3,698 2,919 13,028 2,727 (2) 95,828 100,565 (52,610) 47,954 66,709 (46,949) 19,760 4,395 (2,662) 1,733 19,694 6,930 5,362 (4,231) 1,130 97,204 684 1,084 2,467 617 4,854 5,693 18 1,881 13,078 1,847 1,330 (14) 23,834 125,892 221,721 Cash and deposits Notes and accounts receivable – trade Merchandise and finished goods Work in process Raw materials and supplies Deposits paid Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings and structures Accumulated depreciation Buildings and structures, net Machinery, equipment and vehicles Accumulated depreciation Machinery, equipment and vehicles, net Leased assets Accumulated depreciation Leased assets, net Land Construction in progress Other Accumulated depreciation Other, net Total property, plant and equipment Intangible assets Software Software in progress Goodwill Other Total intangible assets Investments and other assets Investment securities Long-term loans receivable Long-term prepaid expenses Retirement benefit asset Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets 12,968 43,435 14,909 3,257 2,418 20,016 1,744 (2) 98,747 99,914 (50,615) 49,299 62,366 (43,541) 18,824 4,343 (2,815) 1,527 19,178 925 5,344 (4,039) 1,304 91,060 712 665 259 29 1,666 6,197 20 2,364 11,612 1,656 1,233 (17) 23,068 115,795 214,542 6 As of March 31, 2021 As of March 31, 2022 Liabilities Current liabilities Prima Meat Packers, Ltd. (2281) (Million yen) Notes and accounts payable – trade Short-term borrowings Current portion of long-term borrowings Lease obligations Income taxes payable Provision for bonuses Provision for bonuses for directors (and other officers) Accrued expenses Other Total current liabilities Non-current liabilities Long-term borrowings Lease obligations Deferred tax liabilities Deferred tax liabilities for land revaluation Provision for share awards for directors (and other officers) Retirement benefit liability Asset retirement obligations Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Share capital 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 Revaluation reserve for land 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 47,958 765 3,444 548 3,566 1,530 20 9,131 4,993 71,957 16,322 1,072 2,811 2,101 67 4,823 385 238 27,823 99,781 7,908 8,601 81,056 (412) 97,153 2,295 (4) 2,518 141 1,529 6,479 11,128 114,761 214,542 49,644 278 3,555 621 745 1,626 – 7,888 7,300 71,659 14,923 1,247 3,630 2,101 83 4,825 401 280 27,494 99,154 7,908 10,185 85,084 (409) 102,769 2,095 (5) 4,552 468 1,979 9,090 10,706 122,567 221,721 7 (2) Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income Prima Meat Packers, Ltd. (2281) (Million yen) For the fiscal year ended March 31, 2022 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Compensation income Share of profit of entities accounted for using equity method Rental income from land and buildings Foreign exchange gains Subsidy income Other Total non-operating income Non-operating expenses Interest expenses Loss on abandonment of inventories Financing expenses Feed price stability fund contribution Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of non-current assets Gain on sale of investment securities Gain on sale of investments in capital of subsidiaries and associates Subsidy income Compensation income Gain on bargain purchase Other Total extraordinary income Extraordinary losses Loss on sale of non-current assets Loss on retirement of non-current assets Impairment losses Loss on sale of investment securities Loss on valuation of investment securities Other Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent For the fiscal year ended March 31, 2021 433,572 360,167 73,405 51,929 21,475 32 113 96 182 119 60 182 458 1,246 127 100 38 – 43 310 22,411 17 31 76 164 223 48 4 565 3 561 302 0 174 18 1,060 21,916 6,132 55 6,187 15,728 1,563 14,165 8 419,591 367,971 51,620 38,653 12,966 35 98 1,259 79 92 52 257 439 2,314 120 122 38 54 62 397 14,883 44 250 – 217 53 – 0 566 52 272 – – 5 12 343 15,106 3,247 987 4,234 10,871 1,152 9,718 Prima Meat Packers, Ltd. (2281) Consolidated Statements of Comprehensive Income Profit Other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Revaluation reserve for land Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to Owners of parent Non-controlling interests For the fiscal year ended March 31, 2021 For the fiscal year ended March 31, 2022 (Million yen) 15,728 726 76 – 240 934 (50) 1,928 17,657 16,082 1,574 10,871 (192) 0 622 320 450 15 1,216 12,088 10,919 1,169 9 Prima Meat Packers, Ltd. (2281) (3) Consolidated Statements of Changes in Equity For the fiscal year ended March 31, 2021 (From April 1, 2020 to March 31, 2021) (Million yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity 7,908 8,600 69,911 (409) 86,010 – 0 11,144 (2) 11,142 7,908 8,601 81,056 (412) 97,153 Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Revaluation reserve for land Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehen-sive income Non-controlling interests Total net assets 1,567 (81) 2,518 (36) 594 4,562 9,561 100,134 Balance at beginning of period Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Reversal of revaluation reserve for land Other Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Balance at beginning of period Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Reversal of revaluation reserve for land Other Net changes in items other than shareholders’ equity Total changes during period Balance at end of period 0 0 (3,020) 14,165 (3,020) 14,165 (2) 0 0 (2) 0 178 178 141 – – 10 727 727 76 76 934 1,916 1,567 3,484 934 1,916 1,567 14,626 2,295 (4) 2,518 1,529 6,479 11,128 114,761 (3,020) 14,165 (2) 0 0 – – Prima Meat Packers, Ltd. (2281) For the fiscal year ended March 31, 2022 (From April 1, 2021 to March 31, 2022) (Million yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity 7,908 8,601 81,056 (412) 97,153 Total changes during period – 1,584 4,028 3 5,616 Balance at end of period 7,908 10,185 85,084 (409) 102,769 Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Revaluation reserve for land Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehen-sive income Non-controlling interests Total net assets 2,295 (4) 2,518 141 1,529 6,479 11,128 114,761 Balance at beginning of period Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Reversal of revaluation reserve for land Other Net changes in items other than shareholders’ equity Balance at beginning of period Changes during period Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Disposal of treasury shares Change in ownership interest of parent due to transactions with non-controlling interests Reversal of revaluation reserve for land Other (4,278) 9,718 (1,411) (0) 1,584 (4,278) 9,718 (2) 6 1,584 (1,411) (0) (2) 6 11 Net changes in items other than shareholders’ equity (199) Total changes during period (199) Balance at end of period 2,095 (0) (0) (5) 2,034 2,034 4,552 326 326 468 450 450 2,611 (422) 2,189 2,611 (422) 7,805 1,979 9,090 10,706 122,567 (4,278) 9,718 (2) 6 1,584 (1,411) (0) (4) Consolidated Statements of Cash Flows For the fiscal year ended March 31, 2021 For the fiscal year ended March 31, 2022 Cash flows from operating activities Prima Meat Packers, Ltd. (2281) (Million yen) Profit before income taxes Depreciation and amortization Impairment losses Amortization of goodwill Gain on bargain purchase Loss (gain) on valuation of investment securities Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses Increase (decrease) in provision for share awards directors (and other officers) Increase (decrease) in retirement benefit liability Decrease (increase) in retirement benefit asset Interest and dividends income Interest expenses Loss (gain) on sales of investment securities Share of loss (profit) of entities accounted for using equity method Loss (gain) on sales of property, plant and equipment Loss on retirement of property, plant and equipment Subsidy income Decrease (increase) in trade receivable Decrease (increase) in other current assets Decrease (increase) in inventories Increase (decrease) in trade payable Increase (decrease) in other current liabilities Increase (decrease) in accrued consumption taxes Other, net Subtotal Interest and dividends received Interest paid Income taxes paid Subsidies received Net cash provided by (used in) operating activities 21,916 9,923 302 136 (48) 174 (3) 80 35 127 (708) (146) 127 (30) (182) (13) 561 (164) (522) 129 (275) 2,300 463 (904) 118 33,395 153 (125) (6,339) 164 27,248 15,106 10,451 – 188 – 5 (3) 66 15 121 (957) (134) 120 (250) (79) 7 272 (217) (427) (534) (2,645) 1,553 (112) 254 81 22,884 136 (120) (6,377) 217 16,739 12 For the fiscal year ended March 31, 2021 For the fiscal year ended March 31, 2022 Prima Meat Packers, Ltd. (2281) (Million yen) Cash flows from investing activities Payments into deposits paid Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of intangible assets Purchase of investment securities Proceeds from sale of investment securities Loan advances Proceeds from collection of loans receivable Payments of leasehold deposits Proceeds from refund of leasehold deposits Decrease (increase) in time deposits Purchase of long-term prepaid expenses Purchase of shares of subsidiaries resulting in change in scope of consolidation Proceeds from purchase of shares of subsidiaries resulting in change in scope of consolidation Other, net Net cash provided by (used in) investing activities Cash flows from financing activities Net increase (decrease) in short-term borrowings Repayments of lease obligations Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid Dividends paid to non-controlling interests Purchase of treasury shares Proceeds from sale of treasury shares Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period – (9,843) 66 (550) (119) 190 (5) 32 (56) 20 (1,420) (254) (132) 309 (443) (12,205) (266) (742) – (3,475) (3,016) (7) (2) 0 (7,509) 24 7,558 22,214 29,773 (5,000) (14,662) 978 (948) (15) 576 (0) 0 (74) 20 (1,015) (162) (2,880) – (529) (23,713) (496) (552) 2,566 (3,854) (4,270) (7) (2) – (6,616) 48 (13,542) 29,773 16,230 13 Prima Meat Packers, Ltd. (2281) (5) Notes to the Consolidated Financial Statements (Notes on going concern assumption) None (Changes in accounting policies) Adoption of the Accounting Standard for Revenue Recognition The Group has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020, hereinafter the “Revenue Recognition Standard”), etc. from the beginning of the fiscal year, and recognizes revenue in the amount expected to be received in exchange for promised goods or services at the time the control of those is transferred to customers. The main changes resulting from the adoption of the Revenue Recognition Standard, etc. are as follows: (1) Promotional sponsorship expenses and contract distribution expenses Promotional sponsorship expenses and contract distribution expenses, which were previously recorded as selling, general and administrative expenses, are excluded from net sales, in principle. (2) Paid supply transactions recognized as revenue. Consideration received from subcontractors, which was previously recognized as revenue, is no longer The Group has applied the Revenue Recognition Standard, etc. in accordance with the transitional treatment provided in the proviso of Paragraph 84 of the Revenue Recognition Standard. The cumulative effect of retroactively applying the new accounting policies prior to the beginning of the fiscal year is adjusted in retained earnings at the beginning of the fiscal year, and the new accounting policies have been applied to the balance from the beginning of the period. This will not affect the balance at the beginning of the period. As a result, for the fiscal year, net sales, cost of sales, and selling, general and administrative expenses decreased by ¥20,583 million, ¥4,288 million, and ¥16,294 million, respectively, compared with amounts in the previous method. There are no changes in operating profit, ordinary profit or profit before income taxes. In accordance with the adoption of the Revenue Recognition Accounting Standard, etc., liabilities related to rebates which were included in “Accrued expenses” under “Current liabilities,” in the consolidated balance sheets of the previous fiscal year, but it has been included in “Other” under “Current liability” as repayment liability from the fiscal year. However, in accordance with the transitional treatment set forth in Paragraph 89-2 of the Revenue Recognition Accounting Standard, figures for the previous fiscal year have not been reclassified based on the new presentation method. Adoption of Accounting Standard for Fair Value Measurement, etc. The Group has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019, hereinafter the “Fair Value Measurement Standard”), etc. from the beginning of the fiscal year. The Company will prospectively apply new accounting policies stipulated in the Fair Value Measurement Standard, etc. in accordance with the transitional treatment provided in Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). This will not affect the Company’s consolidated financial statements. (Changes in presentation method) For consolidated balance sheets “Goodwill” which was included in “Other” under “Intangible assets” for the previous fiscal year, has been separately presented from the fiscal year because their amount exceeded one-hundredth of the total amount of total assets. To reflect this change in presentation, the consolidated financial statements for the previous fiscal year have been reclassified. As a result, “Other” of ¥288 million that was posted under “Intangible assets” in the consolidated balance sheets for the previous fiscal year are reclassified into “Goodwill” of ¥259 million and “Other” of ¥29 million. For consolidated statements of income 14 Prima Meat Packers, Ltd. (2281) “Compensation income” which was included in “Other” under “Non-operating income” for the previous fiscal year, has been separately presented from the fiscal year because their amount exceeded ten-hundredth of the total amount of non-operating income. To reflect this change in presentation, the consolidated financial statements for the previous fiscal year have been reclassified. As a result, “Other” of ¥555 million that was posted under “Non-operating income” in the consolidated statements of income for the previous fiscal year are reclassified into “Compensation income” of ¥96 million and “Other” of ¥458 million. (Additional information) Performance-linked stock remuneration plan for Directors and Executive Officers The Company has introduced the Board Benefit Trust (BBT, hereinafter referred to as the “Plan”), a performance-linked stock remuneration plan for Directors (excluding part-time Directors) to further motivate the Directors to contribute to the medium- to long-term improvement in the business performance and corporate value, based on the resolution at the 71st Annual General Meeting of Shareholders held on June 28, 2018. At a meeting of the Board of Directors held May 13, 2019, a resolution was passed to change the title “Directors” as stated above to “Directors and some of the Executive Officers who are not concurrently serving as Directors.” (1) Outline of the Plan The Plan is a performance-linked stock remuneration plan under which the Company’s shares are acquired through a trust using money contributed by the Company as the source of funds (hereinafter the trust that is established based on the Plan is referred to as the “Trust”), and Directors excluding part-time Directors and some of the Executive Officers who are not concurrently serving as Directors (hereinafter referred to as the “Directors, etc.”) are provided with the Company’s shares and cash equivalent to the market value of the Company’ shares (hereinafter referred to as the “Company’s Shares, etc.”) through the Trust in accordance with the Regulations for Delivery of Shares to Officers established by the Company. The Directors, etc. shall receive the Company’s Shares, etc. upon their retirement, in principle. (2) Company shares remaining in the Trust Shares of the Company remaining in the Trust are recorded at their book value in the Trust as treasury shares in net assets (excluding incidental expenses). At the end of the year, consolidated basis, the book value of such treasury shares was ¥237 million, and the total of shares was 89 thousand shares. 15 Prima Meat Packers, Ltd. (2281) (Segment information) 1. Overview of reportable segments (1) Determination of reportable segments 1) Reportable segments of the Company [Prima Meat Packers, Ltd.] are business categories subject to performance evaluation and management resource allocation decisions on a monthly and yearly basis. 2) The Company has centered its management planning on the Processed Foods Business organization, which handles hams, sausages and processed foods, and on the Fresh Meat Business organization, which handles fresh meat products. Group enterprises also carry out business activities under the direction of the supervising Business organization. Therefore, the Processed Foods Business and Fresh Meat Business are both included in reportable segments. (2) Type of products belonging to each reportable segment The Processed Foods Business handles processed foods, etc. made and marketed by organizations and the Company’s subsidiaries which produce and market hams, sausages and processed foods, while the Fresh Meat Business handles fresh meat products to be reared, prepared and marketed by organizations and Group companies which buy and market fresh meat products. 2. Method for calculating of net sales, profit or loss, assets, liabilities, and other amounts by reporting segment The accounting treatment for reportable segments is carried out through principles and procedures that are almost the same as the methods adopted for preparation of the consolidated financial statements. Figures for profit in reportable segments are on an operating profit basis. Intersegment sales and transfers are based on prevailing market prices. 16 Prima Meat Packers, Ltd. (2281) Net sales Sales to external customers (Million yen) Consolidated financial statements (Note 2) – – – – 9,923 136 3. Information relating to net sales, profit or loss, assets, liabilities, and other amounts by reportable segment For the fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021) Reportable segments Processed Foods Business Fresh Meat Business Total Other (Note 1) Total Adjustment 293,334 139,719 433,054 518 433,572 433,572 Internal sales or transfers 14 20,583 20,597 46 20,644 (20,644) Total 293,349 160,302 453,652 564 454,217 (20,644) 433,572 Segment profit (loss) 17,711 3,613 21,325 148 21,474 1 21,475 Segment assets (Note 3) 146,513 35,726 182,240 5,272 187,512 27,030 214,542 910 117 – Other items Depreciation and amortization (Note 4) 8,507 9,417 505 9,923 Amortization of goodwill 18 136 136 768 Investment in entities accounted for using equity method Increase in property, plant and equipment and intangible assets (Notes 5, 6) (Notes) 1. “Other” comprises business segments not included in reportable segments, such as development, 12,364 11,699 11,159 9,381 1,777 820 665 820 540 820 52 – – manufacture, and sale of scientific instruments. 2. Segment profit is reconciled with operating profit in the consolidated statements of income. 3. Adjustment for segment assets of ¥27,030 million is corporate assets that are not allocated to reportable segments. Corporate assets primarily consist of cash and deposits. 4. Depreciation and amortization includes amortization of long-term prepaid expenses. 5. Adjustment for increase in property, plant and equipment and intangible assets of ¥665 million is corporate assets that are not allocated to reportable segments. 6. Increase in property, plant and equipment and intangible assets includes increase in long-term prepaid expenses. 17 Prima Meat Packers, Ltd. (2281) Net sales Sales to external customers (Million yen) Consolidated financial statements (Note 3) – 10,451 188 – – – For the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31,2022) Reportable segments Processed Foods Business Fresh Meat Business Total Other (Note 1) Total Adjustment (Note 2) 285,571 133,539 419,111 480 419,591 419,591 Internal sales or transfers 14 22,060 22,074 58 22,132 (22,132) Total 285,586 155,599 441,186 538 441,724 (22,132) 419,591 Segment profit (loss) 14,069 221 14,290 228 14,518 (1,551) 12,966 Segment assets (Note 4) 156,773 40,049 196,823 6,011 202,834 18,887 221,721 Other items Depreciation and amortization (Note 5) 8,994 1,014 10,008 443 10,451 – Amortization of goodwill 68 120 188 188 863 Investment in entities accounted for using equity method Increase in property, plant and equipment and intangible assets (Note 6, 7) (Notes) 1. “Other” comprises business segments not included in reportable segments, such as development, 19,850 19,163 14,290 20,304 4,872 908 908 908 687 453 45 – – manufacture, and sale of scientific instruments. 2. Adjustment for segment loss of ¥1,551 million includes corporate expenses of ¥1,531 million that are not allocated to reportable segments. Corporate expenses primarily consist of general and administrative expenses that are not attributable to any reportable segments. 3. Segment profit is reconciled with operating profit in the consolidated statements of income. 4. Adjustment for segment assets of ¥18,887 million is corporate assets that are not allocated to reportable segments. Corporate assets primarily consist of cash and deposits. 5. Depreciation and amortization includes amortization of long-term prepaid expenses. 6. Adjustment for increase in property, plant and equipment and intangible assets of ¥453 million is corporate assets that are not allocated to reportable segments 7. Increase in property, plant and equipment and intangible assets includes increase in long-term prepaid expenses. 18 Prima Meat Packers, Ltd. (2281) Related information Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021) 1. Information by products and services Fresh meat Ham and sausage Processed foods Other Total Sales to external customers 153,775 101,341 174,408 4,048 433,572 (Million yen) 2. Information by geographical segment (1) Net sales (2) Property, plant and equipment 3. Information by major customer This information is omitted because net sales from external customers in Japan accounted for more than 90% of net sales recorded in the consolidated statements of income. This information is omitted because the amount of property, plant and equipment located in Japan exceeds 90% of the amount of property, plant and equipment recorded in the consolidated balance sheets. Name of customer Net sales Name of related segment (Million yen) SEVEN-ELEVEN JAPAN CO., LTD. 119,927 Processed Foods Business 19 Prima Meat Packers, Ltd. (2281) Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) 1. Information by products and services Fresh meat Ham and sausage Processed foods Other Total Sales to external customers 150,244 97,942 168,561 2,842 419,591 (Million yen) 2. Information by geographical segment (1) Net sales (2) Property, plant and equipment 3. Information by major customer This information is omitted because net sales from external customers in Japan accounted for more than 90% of net sales recorded in the consolidated statements of income. This information is omitted because the amount of property, plant and equipment located in Japan exceeds 90% of the amount of property, plant and equipment recorded in the consolidated balance sheets. Name of customer Net sales Name of related segment (Million yen) SEVEN-ELEVEN JAPAN CO., LTD. 117,950 Processed Foods Business Information concerning impairment losses on non-current assets by reportable segment Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021) Reportable segments Processed Foods Business Fresh Meat Business Total (Million yen) Other Corporate and eliminations Total Impairment losses – 302 302 – – 302 Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) Reportable segments Processed Foods Business Fresh Meat Business Total (Million yen) Other Corporate and eliminations Total Impairment losses – – – – – – 20 Prima Meat Packers, Ltd. (2281) Information concerning amortization and unamortized balance of goodwill by reportable segment Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021) Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) Reportable segments Processed Foods Business Fresh Meat Business Total Amount amortized in FY2020 Balance as of March 31, 2021 18 74 117 185 136 259 Reportable segments Processed Foods Business Fresh Meat Business Total 68 1,189 120 1,278 188 2,467 Amount amortized in FY2021 Balance as of March 31, 2022 Information concerning goodwill by reporting segment (Gain on bargain purchase) – – – – (Million yen) Other Corporate and eliminations Total (Million yen) Other Corporate and eliminations Total – – – – 136 259 188 2,467 Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021) In the previous fiscal year, the Company acquired shares in Excel Farm Co., Ltd. through Pacific Ocean Breeding Co., Ltd. and brought the company under the scope of consolidation, leading to the recording of a ¥48 million gain on bargain purchase in the Fresh Meat Business segment. Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) (Significant changes in the amount of goodwill) Fiscal year ended March 31, 2021 (from April 1, 2020 to March 31, 2021) Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) In the Processed Foods Business segment, the Company purchased shares of Rudi’s Fine Food Pte Ltd on August 4, 2021 and has included the said company and its subsidiary, Continental Deli Pte. Ltd. in the scope of consolidation from the fiscal year. The increase in goodwill from this event is ¥1,106 million for the fiscal year. In the Fresh Meat Business segment, the Company purchased shares of TMG.Co., LTD on December 24, 2021 and has included the said company and its subsidiary, TMG INTERNATIONAL.Co., LTD in the scope of consolidation from the fiscal year. The increase in goodwill from this event is ¥1,213 million for the fiscal year. None None 21 Prima Meat Packers, Ltd. (2281) (Per share information) As of As of March 31, 2021 March 31, 2022 (Yen) Net assets per share 2,062.41 2,226.09 Earnings per share (Notes) 1. Diluted earnings per share is not stated, since there were no potential shares with a dilutive effect. 281.90 193.41 2. For the purposes of calculation of net assets per share, the Company’s shares remaining in the Trust recorded as treasury shares in share capital are included in treasury shares to be deducted from total number of issued shares at the end of the fiscal year. For the purposes of calculation of earnings per share for the year, such shares are likewise included in treasury shares to be deducted in the calculation of the average number of shares outstanding during the period. For the calculation of net assets per share, the number of deducted treasury shares issued at the end of the fiscal year is 89 thousand shares, and in the calculation of earnings per share for the period, the average total of deducted shares of treasury shares during the period is 89 thousand shares. 3. The basis for calculating earnings per share is as follows. For the fiscal year ended For the fiscal year ended March 31, 2021 March 31, 2022 Earnings per share Profit attributable to owners of parent (Million yen) Amount not attributable to common shareholders (Million yen) Profit attributable to owners of parent associated with common shares (Million yen) Average number of shares during the period (Thousand shares) None (Significant subsequent events) 14,165 – 14,165 50,248 9,718 – 9,718 50,249 22