Nichirei Group Integrated Report 2019

Nichirei Group Integrated Report 2019 Overview of Nichirei Communication

Financial Information Non-financial Information

• Announcement of financial results • Presentation meetings of medium-term business plans Engage- • Meetings at Nichirei sites • Dialogues with influential individual ments • Teleconference calls with securities analysts and • Meetings with stakeholders institutional investors • Shareholders’ meetings Nichirei Group Integrated Report 2019 • Integrated Nichirei Group Integrated Report 2019 Overview of Nichirei Communication

Financial Information Non-financial Information

• Announcement of financial results • Presentation meetings of medium-term business plans Engage- • Meetings at Nichirei sites • Dialogues with influential individual ments • Teleconference calls with securities analysts and • Meetings with stakeholders institutional investors • Annual securities reports • Shareholders’ meetings Reports NichireiGroup 2019 Report Integrated • Integrated Nichirei Group Integrated Report 2019 Overview of Nichirei Communication

Financial Information Non-financial Information

• Announcement of financial results • Presentation meetings of medium-term business plans Engage- • Meetings at Nichirei sites • Dialogues with influential individual ments • Teleconference calls with securities analysts and • Meetings with stakeholders institutional investors • Annual securities reports • Shareholders’ meetings Reports

• Integrated

Nichirei Group Integrated Report 2019 • Annual securities reports Reports (Japanese only) Reports that are Reports • HOPPE reports for shareholders and integrated important • CSR Reports individual investors (Japanese only) financial and non-financial (Japanese only) information Reports that are

Website Reports Investor Relations CSR Information • HOPPE reports for shareholders and integrated important • CSR Reports individual investors (Japanese only) financial and non-financial Group Communication Nichirei Corporation

Nichirei Higashi-Ginza Building 6-19-20 Tsukiji, (Japanese only) Chuo-ku, Tokyo 104-8402, Japan The Nichirei Website information Reports that are

Nichirei Higashi-Ginza Building 6-19-20 Tsukiji, Chuo-ku, Tokyo 104-8402, Japan The Nichirei Website information

Website

Investor Relations CSR Information

Group Communication Nichirei Corporation

Nichirei Higashi-Ginza Building 6-19-20 Tsukiji, Chuo-ku, Tokyo 104-8402, Japan The Nichirei Website Nichirei Management Principles Basic CSR Policy The Nichirei Pledge —Working to Make Our Communities More Sustainable—

As a group of companies that provide value in the fields of food and health, the Nichirei INDEX Group strives to help communities solve the issues they face while creating new value for customers through its business activities. The Group gives full consideration to the 01 Nichirei Management Principles Mission economic, social, and environmental impact of its endeavors, and publicly discloses the 02 Basic CSR Policy details of its businesses to its stakeholders, in order to gain their understanding and promote further dialogue. 03 Nichirei’s History

05 Top Message Focus on Lifestyles, Create new value for customers We strive to create new products and services, while helping customers and 11 Nichirei Group Value Creation communities solve various issues through our business activities. and Provide True Satisfaction 11 Group Overview 13 Nichirei’s Value Creation Model

Provide safe products and services 15 Medium-term Business Plan We ensure that everything we offer our customers is characterized by 19 Financial Strategy high quality and safety. Vision Revised April 2019 19 Message from the CFO

23 Business Strategy We will continue to support good eating Maintain a sustainable supply chain 23 Processed Foods Business 25 Temperature-controlled Logistics Business We work to ensure that our supply chain is sustainable. habits and health by leveraging our 27 Marine, Meat and Poultry Products Business state-of-the-art manufacturing practices that 29 Bioscience Business 31 Business Strategy: Overseas optimize nature’s bounty, along with our 33 Global Network Reduce environmental impact leading-edge logistics services. We strive to reduce the environmental impact of our operations, while giving full 35 Corporate Governance consideration to their potential effects on the global environment. 35 On Corporate Governance 39 Basic Views on Corporate Governance Guiding Principles 43 Directors, Auditors and Officers Foster cooperative relations with communities 45 Profile • Prioritize customers, safety, and quality As a responsible corporate citizen, we foster close cooperation with local communities 47 Initiatives to Resolve Social Issues • Ethical operations in the interests of the public good. 47 Creating New Value for Customers 49 Provision of Safe Products and Services • Transparent management 51 Building of Sustainable Supply Chains • Sustainable communities Continually enhance our workplaces 53 Environmental Impact While promoting respect for the diversity of our employees, we continuously improve 55 Occupational Health and Safety • Value creation the workplace environment to enable every employee to make the most of his or her 57 Improved Job Satisfaction, Workstyles abilities and work with enthusiasm. 59 Financial Data 59 11-year Financial Highlights Support good corporate governance 61 Consolidated Balance Sheets 63 Consolidated Statements of Income Communication Message We employ highly transparent, fair management practices, while ensuring that resources are properly allocated and management decisions are made in a timely manner. 64 Consolidated Statement of Comprehensive Income 65 Consolidated Statements of Changes in Net Assets Creating Savory Moments 67 Consolidated Statements of Cash Flows Ensure strict compliance 77 Investor Information/ We maintain high ethical standards, while complying with the laws and social norms of Company Information/ each country in which the Nichirei Group operates. External Review

Fiscal years indicate years ended March 31.

01 Nichirei Management Principles Basic CSR Policy The Nichirei Pledge —Working to Make Our Communities More Sustainable—

Fiscal years indicate years ended March 31.

02 Nichirei’s History

Nichirei was established to provide a safe and reliable supply of food products during the postwar era, when food shortages were a serious problem. It has steadily grown while developing a variety of businesses to support Japan’s dietary habits. We will continue to support good eating habits and health by leveraging our state-of-the-art manufacturing practices that optimize nature’s bounty, along with our leading-edge logistics services.

1940s to 1950s 1960s to 1970s 1980s to 1990s 2000s to present

Launched Nichirei Group business Expanded business based on refrigeration Established Nichirei brand promoting business Creating new customer value promoting diversification Expanded logistics network Internationalization Aiming for further growth

1942 1945 1985 2000 2005 Group’s Established Established Changed company Enhanced quality assurance system Converted to a history Teikoku Marine Nippon Reizo Inc. name to Nichirei Enhanced management system and quality holding company Products Control as a private assurance in the wake of problems with agricultural chemicals residue in China-produced Company company frozen vegetables and other issues

Launched sales of 2019 1952 frozen tempura set 1964 1987 1994 2001 2011 Contributed to the Tokyo Olympic Games Created acerola Launched sales of Launched sales of frozen Constructed high-performance Established bioscience Launched sales of frozen Provided large amounts of various frozen foods in the Olympic village drink, currently sold Shin·Renji-Seikatsu, one food Honkaku-Itame large refrigerated warehouses business base for research, 1954 chawan-mushi by SUNTORY of the first microwaveable Cha-Han (fried rice) for Introduced a seismic isolation system and development and production other industry-leading technologies Launched sales of (savory egg custard) FOODS LIMITED frozen food products home use 1946 Reika ice candy Launched meat and 1956 poultry business 1988 1959 Launched logistics Established Nichirei business in Europe brand utilizing the Created Terrace Nichirei Nichirei star symbol 1970 cafeteria for the Japan Established logistics business Established directly managed Global Innovation Center World Exposition (Osaka) 1990 division, launched transit 2007 poultry farm 2013 logistics center operations Started raising Junwakei chickens in Hirono Town, Iwate Prefecture Launched logistics business 1960 in Thailand (Billions of yen) Launched chicken farming 2008 600 business with establishment of a Established fully integrated plant for rotating poultry house in processed chicken products in Thailand Kamagaya, Chiba Prefecture 1982 1943 1963 Expanded into the 500 Established marine products Launched at-sea Developed long-distance biotechnology field business and ice-making, cold 1956 exportation of marine frozen cargo vehicles 1974 storage and freezing business products Created logistics network, contributing Launched Green Belt to “cold chain plan” spearheaded by brand frozen family Provided frozen food the government dinner series 400 1956 to Antarctic expedition team

300

200

Trends in Net Sales

100 Net Sales

0 1942 2018

03 Nichirei’s History

1940s to 1950s 1960s to 1970s 1980s to 1990s 2000s to present

300

200

Trends in Net Sales

100 Net Sales

0 1942 2018

04 Top Message

Moving Forward with New Plan “WeWill 2021”

Underpinning all Nichirei Group business activities is our management philosophy: Focus on Lifestyles and Provide True Satisfaction. Understanding needs throughout the world, creating and providing valuable products and services that satisfy customers is our purpose and the reason we exist. In April 2019, Nichirei launched a new medium-term business plan WeWill 2021, which was formulated based on the aforementioned philosophy. The plan was devised to indicate our intention to create a distinctive future for ourselves. It is the first step to realize the goals outlined in our revised management principles and in the formulation of long-term management goals toward 2030. Both are designed to realize sustainable growth by creating value that is unique to Nichirei. To achieve these goals, we must not be afraid of making mistakes and focus on the importance of taking on new challenges. Nichirei has resources in a wide range of food-related areas, from ingredient procurement to logistics. Coordinating these resources to realize a sustainable society should enable us to change our existing profit structure and increase economic value, while at the same time creating social value in addition. As Nichirei’s president, I cannot emphasize too strongly that, regardless of how severely the social environment may change, our aim is to be a Company that continues to do business for the next 100 years by leveraging our ability to respond flexibly and to continue creating distinctive Nichirei products and services that meet the needs of society. Kenya Okushi Representative Director, President Nichirei Corporation

Note: Coined word “WeWill” is the theme of Nichirei’s new medium-term business plan. It represents plan initiatives and our strong intention to create our own future.

05 Top Message

Moving Forward with New Plan “WeWill 2021”

Note: Coined word “WeWill” is the theme of Nichirei’s new medium-term business plan. It represents plan initiatives and our strong intention to create our own future.

06 Top Message

Previous Plan (FY2017–2019) Results and Issues The following three initiatives are integral to realizing this vision: * Fiscal years (FY) indicate years ended March 31. 1. Focus on growth Even in a business environment where the future is uncertain, we will increase corporate value by The basic policies promoted under the previous medium-term business plan were to improve domestic continuing to increase sales and generate profits, while considering how we can contribute business earnings capabilities and grow overseas business and to create operational innovations and new appropriately to society and customers. business development targeting medium- to long-term growth in both domestic and overseas businesses. In the food industry, food-related needs have continued to diversify as demand had grown for 2. Take on new challenges simpler preparation and healthier choices, while at the same time labor, distribution and ingredient costs We will rethink our structure, including corporate governance and improve the quality of our have risen, due to labor shortages. management, while at the same time creating new added value by constantly taking on new challenges without fear of failure. Meanwhile, in the food distribution industry, we have seen increases in cargo handling expenses, vehicle procurement costs and electricity charges. This has been amid a trend toward facility expansion, 3. Create diverse workplaces driven by increased product handling, due to robust demand for storage. We will focus on developing our human resources and creating enjoyable and rewarding workplaces. During the previous plan, in the processed foods business, we concentrated management We will promote the introduction of RPA*1 and AI*2 to make operations more efficient and create new resources on our core processed chicken products and rice products. We focused our efforts on types of work that can only be performed by people. product development and sales activities, while striving to achieve continuous productivity Whether work or play, if it is not interesting no one will do it for very long. To live a rewarding life, improvements and to cut costs. All of this enabled us to substantially increase profit margins. doing whatever it is that you want to do is the best motivation of all. Many working people think to Additionally, in the logistics business, earnings grew steadily through corporate structure themselves that there is something they want to do or try and I want to create a Company in which enhancements and overseas business expansion. they can take on such challenges. To this end, our goal is a workplace in which employees can relax As a result, in the final fiscal year of the previous business plan, net sales increased 2.1% and be accepted, even if they make mistakes. compared to the previous period, to ¥580.1 billion; the operating income declined 1.3% compared to Our new medium-term business plan WeWill 2021 is based on our intention to try new things. We the previous period, to ¥29.5 billion; and the ordinary income decreased 2.6% compared to the will formulate our own goals at the individual, departmental and team levels and strive to achieve them. previous period, to ¥29.9 billion. Further, we recorded extraordinary income associated with asset securitization. This resulted in the We formulated our vision and, at the same time, announced our long-term management goals profit attributable to owners of the parent increasing 4.4% compared to the previous period, to ¥19.9 billion. toward 2030. Nichirei’s corporate culture is one of seriousness and sincerity because it deals with food. We recognize that the overhaul of our profit structure and further expansion in overseas business But we have also inherited DNA from predecessors who were constantly trying new things. are major issues facing Nichirei. Thus we must achieve higher profit levels by strengthening our ability to Although it is a major challenge, the goal of our 2030 plan is to contribute abundance to the respond to changes in the external environment as well as rising costs. So we plan to work on more human diet and improve health by creating new value that resolves social and customer issues by specific measures to expand the scale of our overseas business. promoting innovation. We will strive to achieve solid results while at the same time realizing this goal.

*1 Robotic Process Automation: The use of cognitive technologies to enhance the efficiency and A New Vision automation of mainly white-collar operations. Net sales ¥1 trillion *2 Artificial intelligence: Using computers to artificially simulate human intelligence. (Overseas ratio 30%) Operating income margin In 2005, the Nichirei Group transitioned to a holding company structure. At present, each Group 8% Vision for FY2031 company makes the most of its existence as an independent entity. Nichirei will promote innovations to create new value that However, in recent years social issues have become increasingly complex and responses to Other customer demands are becoming difficult to resolve in individual business domains. We thus believe we resolves issues faced by customers and society and Net sales ¥580.1 billion contribute to the good diet and health of all people. (Overseas ratio 14%) New businesses can create a new business model as well as the new products and services necessary for society and In domestic operations, we aim to firmly establish Operating income margin customers by combining Nichirei Group R&D, ingredient procurement, processing, quality assurance ourselves as the No.1 market share and high profitable 5.1% Temperature- and logistics resources. company in the processed foods and logistics businesses controlled Logistics In order to enhance the cohesive power of the Group and utilize Group capabilities to demonstrate through the provision of higher added value and maximum our comprehensive strengths, we decided to create a new Group vision. As it says, capital efficiency. In overseas operations, we are targeting an overseas sales ratio of 30%, which we will achieve through M&A “We will continue to support good eating habits and health by leveraging our Processed and alliances aimed at expanding scale and areas of Foods state-of-the-art manufacturing practices that optimize nature’s bounty, along operation. In addition, we seek to establish new earnings with our cutting-edge logistics services.” pillars through the creation of new businesses. FY2019 FY2031(Plan)

* Fiscal years (FY) indicate years ended March 31.

07 Top Message

* Fiscal years (FY) indicate years ended March 31.

08 Top Message

With regard to financial strategy, we will continue to improve capital efficiency and maintain ROE at The Medium-term Business Plan 10% or higher. To enhance shareholder returns, we will revise the dividend on equity ratio, previously WeWill 2021 (FY2020–2022) 2.5% and raise it to 3.0%. * Fiscal years (FY) indicate years ended March 31. As a result, the dividend per share for the current fiscal year will be increased by ¥10 to ¥42 (dividend payout ratio of 28%). We will continue to target stable dividends. In fiscal 2020, the Nichirei Group launched its new medium-term business plan. The basic policy of this plan is to realize sustainable profit growth and the creation of new value Under this new business plan, we will engage in the following environmental, social and that supports a good dietary lifestyle and good health. governance initiatives. To realize sustainable profit growth, we aim to strengthen the foundations of our management The Nichirei Group is focusing efforts on various initiatives aimed at achieving the long-term system and transform our business structure in Japan. At the same time, we will seek to expand the objectives set forth in the UN Sustainable Development Goals and the Paris Agreement. It is doing so scale of our operations abroad. in order to realize a sustainable society amid rising global concerns over a variety of social issues. Targets for the Nichirei Group overall include net sales of ¥657.0 billion (average annual growth These include how best to respond to climate change and respect human rights, as well as the need rate of 4.2%) and operating income of ¥35.0 billion (average annual growth rate of 5.9%). In addition, to conserve water, energy and other resources. to accelerate overseas business development, we will engage in alliances with local companies, Concerning food, so-called food loss has become a social problem in recent years. Thus, Nichirei including M&As, to achieve growth targeting overseas sales of ¥100.0 billion or more. will proactively work to solve this problem through our frozen food, ingredients and logistics businesses. In terms of investment strategy, we plan to engage in proactive investments that surpass those In terms of reducing environmental impacts, we will promote the elimination of under the previous medium-term business plan. Overall investments for the Group are projected to be chlorofluorocarbons by switching to refrigeration equipment utilizing natural refrigerants, while firmly ¥100.8 billion, which is ¥37.8 billion more than investments under the previous medium-term supporting the reduced use of plastic through the development of new, thin-film packaging materials. business plan. As a measure to further enhance corporate governance, Nichirei will seek continuous Focusing on our core businesses of processed foods and logistics, while engaging in overseas improvement through Board of Director evaluations. In addition, it will continue to improve corporate business and operational innovations involving IT and other strategies, we will allocate management value over the medium- to long-term by strengthening the link to executive compensation system resources to new business development and R&D, focused on a medium- to long-term perspective. performance. In this way, we will attempt to further enhance competitiveness and create pillars of future growth, As even greater changes are expected to take place in the business environment, we will strive to including those in new areas. use this new medium-term business plan WeWill2021—aimed at achieving our long-term management Since 2001, the Nichirei Group has utilized REP (Retained Economic Profit), an original indicator goals toward 2030—to maximize Nichirei Group capabilities and enhance corporate value. focused on capital costs, with the aim of ensuring profits that exceed capital costs in each segment. However, under this new plan, we will utilize EBITDA*3 as the new management indicator for evaluating performance. By covering the EBITDA growth rate along with profit margins, we will enhance ongoing financial management and our ability to generate cash. Plan Goals Operating Income, Depreciation and EBITDA

(Billions of yen) *3 EBITDA: Operating income + Depreciation and Amortization expense (including lease, excluding goodwill) Operating income Depreciation EBITDA FY2019 FY2022 Annual Variance average (results) (plan) growth rate

Net sales 580.1 657.0 76.9 4.2% Operating Income Annual Average Growth Rate 5.9% 79.2 102.3 23.1 8.9% The Medium-term Business Plan WeWill 2021 (FY2020–2022) (Overseas sales) 57.6 50.3 52.8 Operating income 29.5 35.0 5.5 5.9% 47.0

Sustainable Growth from Raising profitability in Japan (Operating income 19.8 21.3 22.6 5.1% 5.3% 0.2ppt – 17.5 and Expanding Overseas Operations. margin) Profit 19.9 22.0 2.1 3.3% 1. Realize sustainable profit growth General 29.5 30.5 31.5 35.0 2. Improve capital efficiency and expand shareholder returns EBITDA 47.0 57.6 10.6 7.0% Strategies 3. Create new value that supports a good dietary life and health ROE 11.7% 10% or higher – –

yen FY2019 2020 2021 2022 EPS 149.7yen 164.9 – – or higher plan

* Fiscal years (FY) indicate years ended March 31.

09 Top Message

yen FY2019 2020 2021 2022 EPS 149.7yen 164.9 – – or higher plan

* Fiscal years (FY) indicate years ended March 31.

10 Nichirei Group Value Creation Group Overview

Group Overall * Fiscal years (FY) indicate years ended March 31. Temperature-controlled Logistics * Fiscal years (FY) indicate years ended March 31.

The Nichirei Group is expanding its business initiatives in areas, including marine, meat and poultry products; bioscience; and Description of Business Share of Refrigerated Warehouse Capacity real estate. Its main focus, however, is on processed foods and temperature-controlled logistics. We are the largest domestic temperature-controlled logistics Top 5 Companies in Terms of Cold Storage Capacity (Japan) Each of the companies under the holding company—responsible for overall Group strategy—aims to create new value for group. Our business comprises a logistics network, focused on Capacity Ranking Company/Group Name (thousands of tons) Share (%) customers through the ﬂexible conduct of business and by planning to raise corporate value over the medium-to-long term. transportation and delivery; a regional storage business responsible for our refrigerated warehouses functions; an 1 Nichirei Logistics Group 1,510 10 1 1 Net Sales Distribution Ratio Operating Income Distribution Ratio overseas business section that handles operations in Europe, 2 Yokohama Reito 859 6 FY2019 FY2019 China, Thailand and Malaysia; and engineering services, which No.1 3 Maruha-Nichiro 655 4 Temperature-controlled Temperature-controlled are responsible for matters from temperature-controlled logistics in Japan Processed Foods Logistics Processed Foods Logistics facility planning and design to maintenance management. 4 Toyo Suisan 492 3 37.7% 33.5% 49.5% 38.6% Throughout our supply chain, we provide high-quality 5 Chilled & Frozen Logistics 476 3 service, including transportation and delivery, storage and Holdings As of April 2018 processing. All parts of our Source: Compiled by Nichirei based on Japan Association of Refrigerated: Net sales Operating income supply chain are linked by Warehouses documents (Includes partial estimates) an advanced logistics Top Ten Companies Worldwide in the Refrigerated Warehouse Industry by Capacity information system to the Real Estate 580.1 29.5 Ranking Company/Group Name Capacity Main Countries design, construction and (thousands of tons) of Business Marine, billion yen % Marine, billion yen Meat and Poultry 0.8 Meat and Poultry maintenance of logistics 1 Americold Logistics 11,102 USA, etc. Products Others Products centers. Real Estate 2 Lineage Logistics 10,930 USA, etc. % 27.1% 1.0 5.5% 3 United States Cold Storage 3,534 USA, etc. 7.1% Breakdown of Sales in the Temperature-controlled (Marine Products11.9% (Marine Products 0.6% Logistics Business3 (FY2019) 4 AGRO Merchants Group., LLC 2,897 USA, etc. Meat and Poultry Products %) Meat and Poultry Products %) Others 15.2 Adjustments 4.9 Others/Intersegments 5 Nichirei Logistics Group 2,049 Japan, etc. -1.9% Overseas % 1.7% 6 Kloosterboer 1,939 Netherlands, etc. 1.1 19.1% Notes: 1. Monetary amounts and percentages have been rounded 7 NewCold Advanced Cold Logistics 1,920 Netherlands, etc.

Regional Logistics 8 VersaCold Logistics Services 1,501 Canada Storage Network 9 Cloverleaf Cold Storage Co. 1,460 USA 32.6% 46.6% 10 Emergent Cold Storage 1,376 Australia, etc. Processed Foods * Fiscal years (FY) indicate years ended March 31. As of April 2019 Source: Compiled by Nichirei based on International Association of Refrigerated Notes: 3. Does not include eliminations within subsegments. Warehouses document “Global Top 25 List” Description of Business By intimately following the way people live, we contribute to the realization of a healthy and abundant society through food that is characterized by seven Marine, Meat and Poultry Products Bioscience basic values: deliciousness; health; enjoyment; safety and security; simplicity and convenience; reliable supply; and reasonable price. Description of Business Description of Business We will continue to refine our distinctive abilities We promote the development of premium marine, meat and We provide high-quality products and services in order to and create superb value through frozen foods, retort poultry products by utilizing our global procurement abilities and pouch foods and wellness foods, in order to become contribute to the physical and mental health of as many emphasizing freshness, deliciousness, safety, security, health the most trusted food company in the world. people as possible through biotechnology and we are and eco-friendliness. We also keep sustainability in mind, highly engaged in the cell biotechnology field and the paying attention to resources and the environment while aiming functional material field that to create better value for consumers. Sales Ranking of Frozen Foods Manufacturers Breakdown of Sales in the Processed Foods Business2 utilizes the Nichirei Group’s (FY2019) (FY2019) material procurement Net sales Others capabilities. Ranking Company (billions of yen) Prepared Frozen Foods 7.1% (Commercial Use) Nichirei 1 226.6 Overseas 43.4% 14.4% 2 Ajinomoto 212.6 Prepared No.1 Frozen Foods 3 Maruha-Nichiro 178.2 (Household Use) in Japan Processed Real Estate 4 Nippon Suisan 175.3 Agricultural Products 26.6% 8.5% 5 TableMark 111.6 We rent and manage office building space to make the From a July 12, 2019 article in the Reishoku Nippo, Notes: 2. Does not include eliminations within subsegments. most of company-owned land. which is published by Shokuhin Sangyo Shimbunsha Co., Ltd.

11 Nichirei Group Value Creation Group Overview

Group Overall * Fiscal years (FY) indicate years ended March 31. Temperature-controlled Logistics * Fiscal years (FY) indicate years ended March 31.

12 Nichirei Group Value Creation Nichirei’s Value Creation Model

Opportunities and Risks Nichirei’s Capital* Nichirei’s Strengths and Strategies Output Outcome

Climate Change Financial capital Financial Data Proposals regarding Demand for eco-friendly products Total assets ¥377.3 billion Oppor- and services Mission and Vision the achievement of tunities Capital adequacy ratio 46.9 % Net sales ¥580.1 billion Free cash flow (before dividend) health and rich Warming may cause changes in Operating income ¥29.5 billion lifestyles through food Risks regions where raw ingredients are ¥13.4 billion produced Overseas percentage collec % tion of tive abi of sales 14.0 Increased cost of warming tiliza lities countermeasures, etc. Manufactured capital U ROE 11.7 % Production Factories Supply Chain Management 24 domestic factories, five overseas EBITDA ¥47.0 billion factories Storage Warehouse Capacity E Demand for food traceability x Provision of safe and p Oppor- Demand for sustainable raw 1,490 thousand tons domestically, a reliable food products tunities s Most advanced n ingredients 560 thousand tons overseas e Top share in s Non-financial Data u i s temperature- o and services frozen foods n Cost of creating a sustainable is

l controlled logistics o Environment Risks supply chain a in Japan f Intellectual capital i o 1 c in Japan Greenhouse gases thousand Response to plastic-related v o 26.0 tons e emissions issues Production expertise s r f s Waste recycling ratio Technological strengths in cooking o e 99.5 %

a and processing n s 2 o Food Waste Society i o Logistics expertise t Ratio of women p u l Contribution to the Brand strength Product and e among managers 7.1 % o Demand for frozen foods Quality r

s Oppor- service a construction of a

e Diverse human t Turnover % Demand for food supply assurance i 2.1

tunities o R development sustainable supply

adjustment function by cold resources n Human capital ability Ratio of employees storage capabilities s with disabilities 2.56 % chain Number of Employees Group-wide Reinstatement ratio of employees taking 15,710 (as of March 31, 2019) childcare leave Health-consciousness 100 % Expert human resources Annual education costs Demand for health-conscious Average employment longevity ¥270 million Oppor- products (males) 16.7 years (females) 15.7 years s Number of incidents tunities e 3 s requiring time off 34 Reduction in Demand for food and medical Global s Financial e 4 care that is optimized for ingredient in Number of business establishments certified environmental impact s under the food safety management system5 individuals Social and relationship capital soundness u procurement b (as of March 31, 2019) and food waste thanks A c w 21/24 worksites to the construction of Sales network t e iv n Decrease in Japan’s Population Logistics network e to advanced cold chains c Governance a ed Donations to social causes (FY2018) p at Ratio of women ita el among directors 20 % Demand for simple and convenient l r Oppor- ¥260 million in D food products resulting from ve R& tunities changes in household composition stm nd en nt a t pme Notes: 1. Power emission coefficient: Calculated by fiscal year for Demand for new foods and Develo each business establishment using the electric power services that address labor Natural capital conversion factor used by power companies shortages 2. Range: The human resource data under “Society” was calculated based on employees of Nichirei Corporation Creation of new value Lack of human resources and and its 15 main domestic subsidiaries Global procurement network for 3. Target: Employees of Nichirei Foods-operated factories in terms of food and Risks passing down technology and agricultural, meat and poultry and and Nichirei Fresh domestic subsidiaries health know-how 4. Range: The number of food factories and business marine products Corporate Governance establishments operated by domestic consolidated Shrinking markets caused by subsidiaries changing demographics 5. FSSC22000, ISO22000, SQF

* Fiscal 2019 results except for Donations to social causes * Fiscal years (FY) indicate years ended March 31. Sustainability/Value Creation

13 Nichirei Group Value Creation Nichirei’s Value Creation Model

Opportunities and Risks Nichirei’s Capital* Nichirei’s Strengths and Strategies Output Outcome

a and processing n s 2 o Food Waste Society i o Logistics expertise t Ratio of women p u l Contribution to the Brand strength Product and e among managers 7.1 % o Demand for frozen foods Quality r s Oppor- service a construction of a e Diverse human t Turnover % Demand for food supply assurance i 2.1

tunities o R development sustainable supply

* Fiscal 2019 results except for Donations to social causes * Fiscal years (FY) indicate years ended March 31. Sustainability/Value Creation

14 Medium-term Business Plan

Nichirei Group launched a new medium-term management plan spanning three years, from fiscal 2020 to fiscal 2022. By promoting this plan, we will aim to further strengthen our mainstay businesses and secure steady growth even within a difficult business environment.

Previous Medium-term Business Plan (FY2017–2019) Medium-term Business Plan WeWill 2021 (FY2020–2022)

We absorbed cost increases and significantly improved We will seek sustainable growth by raising profitability profit levels, thanks in part to expanded sales. in Japan and expanding overseas operations.

In fiscal 2019, we were able to produce results that exceeded our consolidated targets (revised plan announced The increasingly unstable global economy, rising cost of ingredients and human resources, diversifying forms of in November 2016). consumption and other factors require that we realize sustainable profit growth and create new value that This was mainly due to higher earnings from: mainstay processed food products; logistics services, supports the health and good diet of consumers. For this we must undertake capital expenditure to drive growth reflecting increased storage demand in primarily metropolitan areas; and higher profit margins, achieved by and strengthen our business, especially in the areas of processed foods and logistics. shifting managerial resources to differentiated products in the meat and poultry business. Meanwhile, expanding the scale of overseas operations remains a pertinent issue.

Net sales (plan) Operating income (plan) Consolidated net sales and operating income Net sales (result) Operating income (result) Consolidated net sales and operating income Net sales (plan) Operating income (plan)

(Billions of yen) (Billions of yen) (Billions of yen) (Billions of yen) 750 40 750 1,000 40 Plan (FY2014–2016) Plan (FY2017–2019) New plan WeWill 2021 35 35.0 35 700 700 31.5 29.9 30.5 29.3 29.5 30 30 657.0 650 28.6 650 27.0 25 627.0 25 21.6 598.0 600 21.7 20 600 20 580.1 568.0 567.0 552.5 15 15 550 550 535.4 535.7 539.7 10 10

500 500 5 5

450 0 450 0 FY2016 2017 2018 2019 FY2020 2021 2022 2031

* Fiscal years (FY) indicate years ended March 31. * Fiscal years (FY) indicate years ended March 31. Sustainable Profit Growth

1. Continued growth in the processed foods business and To achieve this, we need to raise Achievements Current Issues steady expansion in the logistics business Japan profitability by strengthening management and transforming our business structure 2. The allocation of resources to strengthen competitiveness in our mainstay businesses, by boosting investments at home • The profitability of domestic operations in the With an eye on future profitability, we need to: and abroad and focusing on environmental aspects processed foods business rose due, in part, • Raise the Group’s overall profits Overseas We need to accelerate 3. Efforts to develop new businesses, R&D and the reform to expanded mainstay product sales areas of business • Respond to the changing external • Our logistics business saw an expansion in environment and rising costs cargo pickup and transportation earnings Improve capital efficiency and Maintain ROE of 10% or higher and revise dividend • Expand overseas operations expand shareholder returns standard • Profit levels rose in the meat and poultry products business • Stabilize marine product profits Create new value that supports Help communities deal with issues they face and make a good dietary life and health communities more sustainable through our businesses

15 Medium-term Business Plan

Previous Medium-term Business Plan (FY2017–2019) Medium-term Business Plan WeWill 2021 (FY2020–2022)

500 500 5 5

450 0 450 0 FY2016 2017 2018 2019 FY2020 2021 2022 2031

* Fiscal years (FY) indicate years ended March 31. * Fiscal years (FY) indicate years ended March 31. Sustainable Profit Growth

16 Medium-term Business Plan

Strategies in the Plan WeWill 2021 Long-term Management Goals Starting with our efforts to build a strong earnings base able to respond to environmental changes toward FY2031 affecting management, we are working to create new areas of business that will function as engines for next-generation growth. In addition, we aim to achieve sustainable growth by, among other efforts, raising our corporate economic value, while continuing to respond to societal demand. * Fiscal years (FY) indicate years ended March 31.

Business Creating New Customer Value Investment Allocate Resources Needed for Sustainable Growth

The Nichirei Group will increase customer convenience and build a system that allows us to offer the services and products that only we can provide. To this end, we will encourage our operating companies to share resources, including expertise, Group overall Overseas Japan personnel and facilities. This will allow them to efﬁciently respond to environmental changes. Capital expenditures: ¥31.2 billion ¥69.6 billion ¥ billion (31%) (69%) (3 years cumulative) 100.8 Temperature- Processed Foods controlled Streamlining Growth investment Streamlining Growth investment • Secure continued growth for Logistics mainstay products • Maximize earnings in Japan • Maintain the production base 7.0 16.8 10.6 28.0 • Pursue operational reforms • Stabilize earnings in Thailand • Expand the base for the Medium-term Business Plan (FY2020–2022) Temperature- • Achieve business growth in Expand existing Processed overseas business North America business and create Foods controlled Logistics Utilize the new growth drivers Group’s WeWill 2021 Collective ¥42.3 Marine, Abilities ¥47.1 Meat and Poultry billion Products Strengthening of billion Strengthening of Other Businesses foundations foundations • Implement structural reforms (Bioscience) in the marine products business • Expand business scale to 18.5 8.5 • Achieve stable growth in the support future growth meat and poultry products • Growth investments in Japan and overseas business Proactive capital expenditures • Continue investments to strengthen foundations, including long-term to strengthen competitiveness use of facilities, greater efficiency and environmental measures • Strengthen measures for operational reforms Management foundation synergies Business Business development, human resource development, R&D, quality Strengthen measures from Focus on R&D and new business development and assurance, sales network expansion, facility/IT utilization, overseas a long-term perspective work to create new growth drivers business development, etc.

Initiatives Aimed at Resolving Social Issues Shareholder Returns Financial ESG through Business

Capital from operating cash flow and asset liquidation will be used for investments Based on the Nichrei Pledge, the Group aims to help resolve social problems to maintain and enhance enterprise value and for shareholder returns through and to make communities more sustainable through its efforts to create new dividends and stock buy-backs. Financial Investment value that supports good dietary lifestyles and health. The basic policy for shareholder returns is to maintain a stable dividend based on the consolidated dividend-on-equity ratio and to conduct flexible stock Create new customer value buy-backs taking into consideration capital efficiency and the market environment. Enhance corporate governance Operating cash flow (3-year cumulative forecast) ¥ billion 130 Provide safe products and services Maintain a return on equity ROE Build a sustainable supply chain (ROE) ratio of 10% or higher ESG Reduce environmental impact and Provide a dividend with a DOE respond to climate change target DOE of 3.0%

17 Medium-term Business Plan

Business Creating New Customer Value Investment Allocate Resources Needed for Sustainable Growth

Initiatives Aimed at Resolving Social Issues Shareholder Returns Financial ESG through Business

18 Financial Strategy Message from the CFO

Resource Allocation Policy

In addition to proactively investing to achieve growth and strengthen our business foundation, while responding to various issues, we allocate resources to Group initiatives aimed at realizing a sustainable society. To this end, we will maintain a balanced capital structure, taking into consideration capital efficiency, growth potential and soundness, so that we can efficiently procure stable funding. The established management indicators for each target include ROE and retained economic profit or REP (profit after deducting cost of capital) for capital efficiency; net sales and EBITDA for growth potential; and the debt-to-equity (D/E) ratio of financial soundness. We monitor, quarterly, changes in the external environment and business plan progress. Takumi Taguchi With respect to shareholder returns, our basic policy is to maintain a stable dividend, based on Director, Executive Ofﬁcer the consolidated dividend on equity (DOE) ratio, and to buy back shares taking into account such In charge of Nichirei Group planning factors as capital efficiency and the market environment. and management division In terms of financial management, we have introduced a Group-wide cash management system Nichirei Corporation in Japan. The system enables us to mitigate Group company funding procurement risks and costs and, in my assessment, is generally functioning very well. However, as some overseas Group companies are joint ventures, we need to strengthen global management throughout the entire Group.

Looking Back Creating Value

In our previous medium-term business plan, although a variety of factors resulted in cost increases, I supervise the Nichirei Group planning and management division, including Corporate Internal Audit, Business we were able to absorb them through expanded sales and improved productivity, which enabled us to Management, Strategic Planning, IT Planning, Legal Affairs, Human Resources Strategy & General Affairs, maintain a high level of profit. We recognize that we have the ability to generate more than ¥30.0 Finance, Accounting & Tax and Group Communication. billion in operating cash flows each year. This is the result of efforts by everyone in the Group, and the To help realize the ideals the Nichirei Group is aiming to achieve, I promote the Group’s major objectives: fact that we do not allow any waste whatsoever. ensuring that it maintains a solid financial position and motivating people—the most important management I believe that the result of the previous medium-term business plan reflects not only our ability to resource in terms of conducting business activities. At the same time, I facilitate the following of the investment generate stable cash flows, but also our ability to utilize them. PDCA cycle. Some investments intended to expand sales are a bit behind schedule, and have been carried forward From a position integrating Group financial and non-financial elements within the holding company, I focus to the medium-term business plan this year. Nevertheless, we continue to steadily invest in strengthening on three perspectives: our ability to perceive, collaborate and unify. our business foundations and business innovation, while also investing in new business fields. The ability to correctly perceive reality is indispensable in these times of significant change. We must also At the same time, in terms of shareholder returns, we have continued to steadily increase collaborate to create synergies among businesses and divisions, to make full use of the Group’s dividends, based on a consolidated DOE of 2.5%, while buying back approximately 10% of comprehensive capabilities. Further, we need to understand how to unify the Group, to enable effective outstanding shares. As a result, we have been able to maintain financial soundness, with a D/E ratio of engagement with stakeholders within and outside the Company. Refining these capabilities will enable the Nichirei Group to realize medium- to long-term growth. 0.5 while raising ROE to 11%. Corporate value encompasses both financial and social value that, together, represent the embodiment of In terms of non-financial developments, we are focusing on enhancing information disclosure. In our mission, which is to Focus on Lifestyles, and Provide True Satisfaction. If finance is the foundation that 2018, we formulated the Group Disclosure Policy as a guideline for promoting appropriate information supports the Group, then social value can be considered to be its central pillar, and both are essential if disclosure and constructive dialogue. In the same year, we published our first integrated report. medium- to long-term growth is to be achieved.

19 Financial Strategy Message from the CFO

Resource Allocation Policy

Looking Back Creating Value

20 Financial Strategy: Message from the CFO

Together with our website, we will utilize this publication as a tool for effective engagement with areas such as IT and R&D, where it is difficult to quantify the direct link between investment outcomes stakeholders within and outside the company (demonstrating our unification capabilities) in an effort to and existing business earnings. inculcate an understanding of both Nichirei’s financial and social value. With regard to shareholder returns, while maintaining our basic policy to provide stable dividends, we raised consolidated DOE to 3.0%. As a result, in fiscal 2020, the annual dividend per share is expected to be ¥42, an increase of ¥10 per share compared with that of fiscal 2019. One of the reasons we adopted a DOE policy is that we can increase dividends each year by accumulating Result for the Plan Result for the Plan (FY2017–2019) (FY2014–2016) profits. In addition, we have not set a target for share buybacks under the current medium-term (Times) 0.6 0.6 business plan. But we plan to respond flexibly according to the business environment and prevailing 0.5 0.5 financial conditions.

40.8 (Billions of yen) In terms of overseas business expansion, we believe an M&A approach to be the most effective. 37.0 Further, we consider it necessary to strengthen business due diligence, by deepening cooperation 29.9 31.3 25.0 24.1 and ensuring that all parties concerned are aware of the objectives and risks. In addition, finding and developing human resources that contribute to overseas expansion is an issue urgently requiring 13.9 attention. With the introduction of a human resources management system, we could maximize our utilization of human assets to improve the overall strength of the Nichirei Group.

FY2016 2017 2018 2019 Finally, we are incrementally introducing RPA* to make operations more efficient. However, rather than simply automating existing operations, we are also overhauling our operational processes. Capital expenditures Operating cash flow D/E ratio We firmly believe that there are some Nichirei Group operations that only people can carry out. * Fiscal years (FY) indicate years ended March 31. While some are concerned that the introduction of RPA and artificial intelligence (AI) will threaten their jobs, that will not be the case in Nichirei Group workplaces. Regardless of the efficiencies gained through the introduction of RPA and AI, “supporting a good dietary life and health” requires New Business Plan WeWill 2021 communication from the heart, and this is only achieved through human interaction. We will continue to value investments in people who will lead the Company for the next 100 years.

Our long-term management goals toward 2030 include, as we have already announced, attaining * Robotic Process Automation: The use of cognitive technologies to enhance the efficiency and automation of mainly white-collar operations. ¥1 trillion in net sales and an operating income margin of 8%. Achieving these fairly challenging goals will require ideas and initiatives from an entirely different perspective than in the past, and we must focus on reaching objectives in completely different business domains. Our new medium-term plan WeWill 2021 represents the first three-year segment of the long-term Distribution of Operating Cash Flow Dividends per Share (three-year cumulative forecast) plan. In the final fiscal year of the new plan, we are targeting net sales of ¥657.0 billion (average * Fiscal years (FY) indicate years ended March 31. annual growth rate of 4.2%) and operating income of ¥35.0 billion (average annual growth rate of Dividends Commemorative dividend Increase in cash 5.9%), as we pursue an even higher growth rate than in the previous medium-term business plan. from investment Plan New Plan Also, we plan to boost our capital expenditure to in excess of ¥100.0 billion and aim to achieve (FY2017-2019) (FY2020–2022) overseas sales of around the ¥100.0 billion mark, as I believe the finances underpinning the Group will Capital Expenditures excluding lease ¥91.2 bn play an increasingly greater role. Breakdown 42 yen In terms of financial indicators, we will continue proactive investments while maintaining the D/E ratio Operating Processed Foods ¥42.0 bn cash flow Logistics ¥37.7 bn at around the 0.5 level, and ROE at 10% or higher. We intend to increase the ROE; improve the ROA, ¥130.0 bn Notes: Capital investments include investment 32 in intangible fixed assets 30 making it a return commensurate with investment; and maintain capital costs at an appropriate level. 28 24 Repayment of lease obligations The plan to have capital expenditure of ¥100.0 billion involves a 50% allocation to growth Increase/decrease in borrowings due ¥11.7 bn investments; 30% to infrastructure enhancements, business innovations and new developments; and to fluctuation 20% to rationalization and maintenance. To determine whether these allocations are appropriate, we of operating capital Shareholders returns • Dividends will closely monitor the progress of our business plans and changes in the environment. Additionally, Maintain target DOE* of 3.0% FY2016 2017 2018 2019 2020 2022 Cash generated * DOE: Total dividend amount / shareholders’ we will address such issues as how best to determine the basis for investment decisions in strategic from asset equity = ROE x payout ratio liquidation Note: Number of shares and dividends per share are revised figures following • Flexible share buy-backs the stock merger on October 1, 2016.

21 Financial Strategy: Message from the CFO

22 Business Strategy

Processed Foods Business Medium-term Business Plan (FY2020–2022): WeWill 2021

* Fiscal years (FY) indicate years ended March 31.

Vision Strategies We are increasingly perfecting our skills in order We will simultaneously elevate our economic and social value in pursuit of a sustainable society. To raise economic value, we focus on strengthening our earnings base and creating new drivers of growth. to create new value and establish Nichirei as the The domestic frozen food market is expected to continue growing and we plan to deepen relationships with our world’s most trusted name in foods. business partners, distinguish ourselves through our chicken- and rice-related technologies, cultivate new strategic categories and increase productivity at our independent investment factories. Overseas, we will continue our business expansion in growth markets, with a particular focus on North America. Under the new management plan, we will absorb increases in depreciation and amortization and achieve 9% average annual proﬁt growth. Business Overview In the interests of boosting our economic value, we will create original products and services, designed to help to resolve social issues. We plan to build sustainable supply chains, respond to food waste issues and help reduce our Nichirei Foods provides frozen foods for household and environmental footprint. commercial use, retort pouch foods and wellness food products Three-year sales and operating income targets (Billions of yen) In support of our strategies, we will promote that showcase its distinctive product development and quality Fiscal year work-style and corporate environment reforms, so that 2019 2020 2021 2022 assurance capabilities. our employees can work to the best of their abilities and Net sales 226.6 235.0 247.0 263.0 Chicken, rice, vegetables and spring rolls account for a large demonstrate their wide-ranging skills. Operating income 14.6 15.9 16.9 18.7 share of our domestic sales of frozen foods for both household and commercial use. With the demand limited for commercial-use frozen foods, products for the home meal replacement market and Key Policies ready-made meals account for a high proportion of domestic sales. Overseas, we are focusing on the development and sale of 1. Strengthen our earnings base 2. Expand business overseas

Asian food-made products in North America. Main Measures External Environment (three-year outlook) With people’s livelihoods in mind, we implement initiatives to Japan foster healthy societies through our food products. Opportunities • Increase added value in our key categories by strengthening Masahiko Takenaga technological developments that distinguish us from our competition • Increasingly diverse consumer needs

Director, Executive Officer, Nichirei Corporation Nichirei Foods Inc. • Create new strategic categories and strengthen initiatives tailored • Expansion in sales channels, including home delivery https://www.nichireifoods.co.jp Representative Director, President, Nichirei Foods Inc. https://www.nichireifoods.co.jp to the specific needs of each business category businesses and e-commerce markets (Japanese only) • Increase brand value through ongoing promotions • Spread of meals prepared or eaten outside the home • Conduct capital investment aimed at improving production capabilities, • Growing need for new and innovative products (health increasing efficiency and reducing our environmental impact products, cooking ingredients, etc.) Overseas • Rising demand for frozen foods for commercial use due Strengths Business Scale (as of April 2019) • Expand sales of Asian foods in North America to higher inbound tourism • Enhance our production capacity and efficiency in Thailand We are a pioneer in the frozen foods industry and • Food production factories: 19 facilities (15 in Japan, through capital investment 4 overseas) Risks have a major share of the domestic market, due to ESG • Subsidiaries: 18 Affiliates: 4 • Intensified competition due to entry from different industries our overarching strengths. These strengths are: • Build a sustainable supply chain • Nichirei Technology Development Center (R&D Department) • Effect on earnings from rising personnel, ingredient and • Our product development capabilities and product lineup • Implement initiatives to reduce food waste distribution costs • Proprietary flavor-reproduction technology, resulting from • Reduce environmental impact our R&D and production expertise • Cost competitiveness, resulting from our industry-leading production capacity Investment Plan • An organizational structure that enables us to respond to a Expand production capacity in response to rising demand and set up an efficient and environmentally wide range of customer needs responsible production system Six-year average annual Capital Expenditures and the Growth sales growth of 6% Aiming to increase our capacity to produce processed chicken Rate of Prepared Foods products, we will add a second factory at GFPT Nichirei (Thailand) Co., Ltd. (Operations are expected to begin in October 2020) (Billions of yen)

15.0 Main Products 10.0

5.0

0 No.1 fried rice product with the Filling volume that meets dinner Frozen vegetable sales Hamburger steak, one of FY2017 2018 2019 2020 2021 2022 most domestic sales in frozen needs have grown due to their our main products for Growth investment Foundation investment Maintenance cooked rice category for 18 quality and ease of commercial use (Conceptual drawing) years in a row* preparation Sales growth rate for Prepared Foods (17/3=100) * INTAGE Inc. SRI (March 2001-February 2019) 23 Business Strategy

Processed Foods Business Medium-term Business Plan (FY2020–2022): WeWill 2021

* Fiscal years (FY) indicate years ended March 31.

Director, Executive Officer, Nichirei Corporation Nichirei Foods Inc. • Create new strategic categories and strengthen initiatives tailored • Expansion in sales channels, including home delivery Representative Director, President, Nichirei Foods Inc. https://www.nichireifoods.co.jp to the specific needs of each business category businesses and e-commerce markets (Japanese only) • Increase brand value through ongoing promotions • Spread of meals prepared or eaten outside the home • Conduct capital investment aimed at improving production capabilities, • Growing need for new and innovative products (health increasing efficiency and reducing our environmental impact products, cooking ingredients, etc.) Overseas • Rising demand for frozen foods for commercial use due Strengths Business Scale (as of April 2019) • Expand sales of Asian foods in North America to higher inbound tourism • Enhance our production capacity and efficiency in Thailand We are a pioneer in the frozen foods industry and • Food production factories: 19 facilities (15 in Japan, through capital investment 4 overseas) Risks have a major share of the domestic market, due to ESG • Subsidiaries: 18 Affiliates: 4 • Intensified competition due to entry from different industries our overarching strengths. These strengths are: • Build a sustainable supply chain • Nichirei Technology Development Center (R&D Department) • Effect on earnings from rising personnel, ingredient and • Our product development capabilities and product lineup • Implement initiatives to reduce food waste distribution costs • Proprietary flavor-reproduction technology, resulting from • Reduce environmental impact our R&D and production expertise • Cost competitiveness, resulting from our industry-leading production capacity Investment Plan • An organizational structure that enables us to respond to a Expand production capacity in response to rising demand and set up an efficient and environmentally wide range of customer needs responsible production system Six-year average annual Capital Expenditures and the Growth sales growth of 6% Aiming to increase our capacity to produce processed chicken Rate of Prepared Foods products, we will add a second factory at GFPT Nichirei (Thailand) Co., Ltd. (Operations are expected to begin in October 2020) (Billions of yen)

15.0 Main Products 10.0

5.0

Temperature-controlled Logistics Business Medium-term Business Plan (FY2020–2022): WeWill 2021

* Fiscal years (FY) indicate years ended March 31.

Vision Strategies To make our advanced temperature-controlled Using the strength of our leading temperature-controlled logistics, we aim to achieve further stable growth in our existing businesses. To this end, we will promote work reforms and implement new personnel systems. This will involve expanding work-style options, logistics, already the best in Japan, the global shifting human resources to perform more constructive work and promoting the participation of female and senior employees. standard. In addition, we will heighten customer satisfaction through the time generated by efﬁciency resulting from the implementation of cutting-edge AI and IoT technology. Further, being a company that provides solutions for temperature-controlled logistics and proposals for the overall optimization of logistical infrastructure, we will establish a 3PL business model and implement appropriate fees. Business Overview In our business abroad, we will promote proactive investment aimed at expansion in Europe, China and members of ASEAN. We will also promote business expansion through investment, to expand the number of refrigerated warehouses in the Netherlands. Nichirei Logistics Group Inc. is the largest temperature-controlled We will expand cross-border transportation and logistics for mass retailers by strengthening transportation functionality at our logistics group in Japan. It comprises a logistics network centered inland facilities in Europe and using elevated vehicles. Three-year sales and operating income targets illions of yen Also, we will solidify our business foundations in Thailand on transportation, delivery and transfer centers; regional storage iscal year 2019 2020 2021 2022 and Malaysia, while considering new locations for facilities comprising refrigerated warehouses; overseas expansion in ASEAN member nations. et sales 201.0 20. 218. 227.0 businesses in Europe, China and members of ASEAN; and an perating income 11. 11. 11. 12.7 engineering service involved in a variety of functions, ranging from planning and design of temperature-controlled logistics facilities to Key Policies maintenance and management. We offer universal and comprehensive value as a one-stop 1. Maximize profitability of domestic operations logistics provider. This we do through our highly functional 2. Expand overseas operations equipment capacity, which is rated No. 1 in Japan and our 3. Establish a solution business in the field of temperature-controlled logistics meticulous services. 4. Strengthen our corporate structure by promoting business innovation and We are building cold-chain infrastructure that will reduce the implementing work-style reforms Kazuhiko Umezawa temporal and spatial gaps that occur between harvest, Main Measures External Environment (three-year outlook) Director, Executive Officer, Nichirei Corporation production and consumption. Representative Director, President, Japan Opportunities Nichirei Logistics Group Inc. Nichirei Logistics Group Inc. • Maximize use of storage and transportation functions of facilities https://www.nichirei-logi.co.jp/english/index.html in metropolitan and regional facilities • Demand for temperature-controlled logistics is expected to • Secure stable earnings growth by promoting optimal allocation of remain strong stored freight and setting appropriate fees • Increases in frozen food demand and imported food • Raise warehouse operating capacity through business innovation products Strengths Business Scale (as of April 2019) • Expand 3PL business with innovative logistics solutions • Growing customer need for stable and reliable logistics to overcome the logistics crisis Overseas • Increase in shipment volume due to inbound tourism demand We offer a wide range of temperature-controlled • Refrigerated warehouse capacity: approximately 2.05 million • Expand business foundations in Europe by promoting proactive logistics services centered on value-added logistics tons (1.49 million in Japan, 0.56 million overseas) investment Risks requiring low-temperature management. The result of • Average daily number of vehicles in service: approximately • Focus on expanding business in China by increasing the number 8,000 (7,000 in Japan, 1,000 overseas) of joint initiatives with major distribution and retail companies this is: • Tightening of legal regulations (work-style reform laws, • Refrigerated warehouse capacity ranking: Number one in mandatory recording of driver waiting times, etc.) • A strong customer base, backed by a ESG Japan, number five worldwide, number five in Europe • Impact on earnings from rising personnel, energy and temperature-controlled transportation and delivery network • Reduce environmental impact • Number of facilities: 115 in Japan (including the Naha New construction costs that covers all of Japan • Implement initiatives to reduce food waste Port facility that began operating in May 2019) • Overseas temperature-controlled logistics networks in 23 overseas (17 in Europe, 4 in China, 1 each in Thailand Europe, China and members of ASEAN Investment Plan and Malaysia) • Human resources with advanced expertise and experience • Subsidiaries: 30 Affiliates: 7 We will maximize earnings, primarily in metropolitan areas and focus on capital investment aimed at strengthening our competitiveness Nagoya Minato DC Capital expenditures and Six-year average annual sales growth of 3% ork reform model center based on a layout that supports the Growth Rate of Domestic Sales manpower saving and the employment of people with disabilities illions of yen inato-ku agoya-shi xpected to begin operations in pril 2020 old storage capacity of 3035 tons onceptual drawing Main Services 20.0

10.0

0 egional torage in charge of refrigerated ogistics etwork centered on transportation verseas usiness operating 23 facilities in FY2017 2018 2019 2020 2021 2022 warehouse functionality and delivery eight countries primarily comprising uropean Growth investment Foundation investment Maintenance and member nations Sales growth rate in Japan (17/3=100)

25 Business Strategy

Temperature-controlled Logistics Business Medium-term Business Plan (FY2020–2022): WeWill 2021

* Fiscal years (FY) indicate years ended March 31.

10.0

26 Business Strategy

Marine, Meat and Poultry Products Business Medium-term Business Plan (FY2020–2022): WeWill 2021

* Fiscal years (FY) indicate years ended March 31. Vision Strategies Through our efforts to distinguish ourselves from Our marine products business structure has been affected by exchange rate and market price fluctuations. competitors in the area of premium products, In particular, we will adjust our product mix and increase our handling of processed marine products to ensure a proper response to designed bearing in mind the need for sustainability, market price fluctuation-related issues. we will win the trust of our customers by delivering In 2018, we augmented our capacity to produce processed marine products by establishing a processing factory in Vietnam. We will work to secure stable earnings by focusing on providing premium products, which constitute one of our strengths and on expanding sales of optimal products that meet their needs. processed marine products produced utilizing our original processing technology. In the area of meat and poultry, we will expand sales of our meat, which stands out from that of the competition owing to our original livestock feed and increase added value by providing services that make use of expertise and functions we have developed over many years. Business Overview Specifically, we are strengthening sales of our Amani no Megumi meat (chicken, pork and beef) series, which we launched in response to growing awareness regarding the benefits of omega-3 fatty acids. Planning to create a new market for meat with health value, we established a poultry farm in Iwate Prefecture that will function as a production base for Amani no Megumi chicken. Nichirei Fresh is utilizing its global procurement and development Then, we will focus on developing products for commercial use in response to both labor shortages in food factories and the restaurant capabilities to pursue business development centered on providing industry, as well as to expanding sales of distinctive products—including our Pro Select meat series, which we produce using strict foreign substance controls. ingredients for marine, meat and poultry products. This enables us Prepackaging, done at our processing centers, to ensure that we produce and sell marine, meat and poultry amply meets customer needs, even given the current Three-year sales and operating income targets illions of yen labor shortage. products that will satisfy even our most particular customers. For more than a decade, we have worked with iscal year 2019 2020 2021 2022 Further, through the development of premium products, our partners to resolve social issues and build et sales 71.2 75.0 75.0 75.0 we are working to build a sustainable supply chain based on our environmentally friendly supply chains that offer Marine Products sustainable procurement of ingredients used in perating income 0.2 0. 0.7 0.8 original six commitments*, as well as strong, long-term marine, meat and poultry products. et sales 1.1 .0 8.0 103.0 partnerships with local suppliers. During the fiscal year ending March 31, 2020, Meat and we will continue to handle and conduct business Poultry Products perating income 1.5 1. 1. 1.8 Well aware of issues related to natural resources, the activities using, sustainable products. environment and sustainable societies, we are providing safe food while striving to create better value for consumers. Key Policies Yoshifumi Kaneko he six commitments are: freshness deliciousness safety security health and eco-friendliness. Marine Products Meat and Poultry Products Director, Executive Officer, Nichirei Corporation Representative Director and President, Nichirei Fresh Inc. The implementation of reforms designed to The strengthening of fresh foods, development Nichirei Fresh Inc. https://www.nichireifresh.co.jp/en/ build a stable earnings structure of new products and expansion of sales

Main Measures External Environment (three-year outlook) Marine Products Strengths Business Scale (as of April 2019) Opportunities • Shift to sales activities that place a greater emphasis on marketing • Expansion of sales channels, including home delivery and e-commerce • Internally-operated food factories: 8 facilities (7 in Japan, • Rising demand for meals prepared or eaten outside the home The value we provide as an intermediary links • Expand overseas sales manufacturers around the world with markets. 1 overseas) • Growing demand for commercial-use products, due to rising inbound tourism ncludes internally-operated poultry farms We offer: Meat and Poultry Products • Greater global demand for Japanese foods • Subsidiaries 11 (7 marine product subsidiaries, 4 meat and • Expand sales of differentiated products • Strong, long-term partnerships with suppliers and buyers poultry subsidiaries, 5 in Japan, 6 overseas) • Strengthen processing functions • An original premium product production system resulting Risks from manufacturing and processing facilities ESG • Growing scarcity of natural resources, due to climate change • Technological strength and fast product development • Build a sustainable supply chain • Impact on earnings from rising personnel, ingredient and distribution costs capabilities, enabling us to cater to several processing • Reduce environmental impact • Major exchange rate fluctuations levels • Carry out initiatives supporting biodiversity • Restricted imports and exports, due to the global spread of infectious diseases • Human resources with advanced expertise and experience Primary Investment Factories Uge Farm Trans Pacific Seafood Co., Ltd. ompany-owned poultry farm with the purpose of strengthening the production ompany-owned production factory specializing in processed marine products and sales of Amani Chicken ocated in inh huan rovince ietnam and began operations in ctober 2018. ocated in irono-cho wate refecture and began operations in arch 2018. Main Products

arge variety of natural and cultured ide range of sushi toppings Amani no Megumi series chicken pork and beef shrimp

27 Business Strategy

Marine, Meat and Poultry Products Business Medium-term Business Plan (FY2020–2022): WeWill 2021

arge variety of natural and cultured ide range of sushi toppings Amani no Megumi series chicken pork and beef shrimp

28 Business Strategy

Bioscience Business Medium-term Business Plan (FY2020–2022): WeWill 2021

* Fiscal years (FY) indicate years ended March 31. Vision Strategies

We will contribute to the resolution of social Using the global innovation center it established in 2019, Nichirei Biosciences is focusing on developing new products to reflect its earlier issues related to health and medical care by development investments. In the field of medical care, we are witnessing the creation of drugs that focus on the immune system to fight cancer and have few side developing new products that closely track effects, while other new treatment methods, such as regenerative medicine, are also emerging on the scene. developments in medical treatment. Diagnostic s and medical devices are playing an increasingly important role in selecting which of these treatment methods is most appropriate for a patient. In response to this trend, Nichirei Biosciences is contributing to cutting-edge medical treatment by manufacturing diagnostics using its technologies and knowledge concerning cells, immunology and antibodies. The diagnostics are then sold together with medical devices. Business Overview To further our contributions and increase development speed, we will also redouble our open innovation efforts, conducting joint development with universities, start-up companies and pharmaceutical companies. Nichirei Biosciences is utilizing the Nichirei Group’s ingredient Through our functional materials business, we are manufacturing and selling extracts derived from plants and the placenta. procurement capabilities and technological strength in the When developing these products, we perform the minimum possible animal experiments, out of consideration for animal welfare. We also take into account customer needs on a societal level, developing and testing organic products. biotechnology field to conduct business in the areas of molecular Overseas, we are implementing integrated management encompassing the development, production and sale of medical devices and diagnostics, rapid diagnostics, raw materials for biologics diagnostics. For this we are collaborating with Pathcom Systems Corporation, which we acquired in March 2019. We aim to expand our manufacturing and functional materials. operations globally, using our diagnostics business in the US as a foothold. We aim to contribute to the development of the medical, All of Nichirei Biosciences’ businesses operate using biological materials that are subject to fluctuations in quality. Despite this, we pride ourselves on our ability to maintain a high level of product quality by ensuring stable production and quality control. health and biological industries by harnessing the technical As members of the Nichirei Group, we will produce high-quality products to ensure safety and security and elevate our global presence by prowess, procurement capabilities and quality assurance increasing the added value of our products with our highly specialized personnel and technology. capabilities that we have developed thus far through high-quality products and services. Main Measures External Environment (three-year outlook) Japan Nichirei Biosciences Inc. • Promote the development and commercialization of Opportunities https://www.nichirei.co.jp/bio/english/index.html Masato Takenaga https://www.nichirei.co.jp/bio/english/index.html next-generation diagnostics and instruments • Structural changes in medical systems and a growing • Establish stable production technology and increase customer number of patients due to the aging of societies around Executive Officer, Nichirei Corporation satisfaction by strengthening quality control the world Representative Director, President, • Create a business model reflecting technological innovations and • Tight healthcare financing and increased public health Nichirei Biosciences Inc. changing needs awareness Strengths • Strengthen intellectual property management to effectively deal • Increasing demand for diverse diagnostics and medical with business globalization devices, due to advances in medical care Overseas We are one of the few developers and manufacturers. • Promote business expansion, using US operations as a foothold Our advanced development capabilities and skilled Risks ESG human resources in this area make us competitive with • Intensified global competition involving medical companies • Build good relationships with regional communities around global companies. We benefit from having: • Growing risk of new infectious diseases due to climate Global Innovation Center change • Technological strength that allows us to create and provide • Improve productivity, while employing and training diverse stable supplies of high-quality products from biologically derived human resources and implementing work-style reforms raw materials • Abundant knowledge and technological experience related to cells and antibodies Global Innovation Center ichirei iosciences established lobal nnovation enter that will function as a new base for production and in ayama-shi aitama refecture. ull-scale operations began at the facility in une 201. he facility will enable us to expand the expertise and technologies we have accumulated over the years while responding to diversifying customer needs by encouraging innovation Main through in-house domestic and overseas exchanges. Products Features of Global Innovation Center Overview of the Global Innovation Center

ffice spaces that encourage freuent close • Name: ichirei iosciences lobal nnovation enter communication and cooperation among users • Location: 1-11-8 hin-sayama ayama-shi aitama prefecture • Chief: oichi bayashi irector anaging xecutive fficer ichirei eb-linked conference rooms for global communication iosciences nc. • Building specs: our stories building area of 2207 m2 total floor area eismic isolation structure to ensures business continuity of 781 m2 • Uses: ife science and production of diagnostics and ingredients ompanion diagnostics Histofine ALK iAEP Kit nfluenza virus rapid diagnostics unctional aterials se of latest energy-saving technology in vitro diagnostic kit Immunofine FLU rapid diagnostic kit ACEROLA EXTRACT used in cosmetics and food WB (NICHIREI) cerola fruit extract

29 Business Strategy

Bioscience Business Medium-term Business Plan (FY2020–2022): WeWill 2021

* Fiscal years (FY) indicate years ended March 31. Vision Strategies

We will contribute to the resolution of social Using the global innovation center it established in 2019, Nichirei Biosciences is focusing on developing new products to reflect its earlier issues related to health and medical care by development investments. In the field of medical care, we are witnessing the creation of drugs that focus on the immune system to fight cancer and have few side developing new products that closely track effects, while other new treatment methods, such as regenerative medicine, are also emerging on the scene. developments in medical treatment. Diagnostic s and medical devices are playing an increasingly important role in selecting which of these treatment methods is most appropriate for a patient. In response to this trend, Nichirei Biosciences is contributing to cutting-edge medical treatment by manufacturing diagnostics using its technologies and knowledge concerning cells, immunology and antibodies. The diagnostics are then sold together with medical devices. Business Overview To further our contributions and increase development speed, we will also redouble our open innovation efforts, conducting joint development with universities, start-up companies and pharmaceutical companies. Nichirei Biosciences is utilizing the Nichirei Group’s ingredient Through our functional materials business, we are manufacturing and selling extracts derived from plants and the placenta. procurement capabilities and technological strength in the When developing these products, we perform the minimum possible animal experiments, out of consideration for animal welfare. We also take into account customer needs on a societal level, developing and testing organic products. biotechnology field to conduct business in the areas of molecular Overseas, we are implementing integrated management encompassing the development, production and sale of medical devices and diagnostics, rapid diagnostics, raw materials for biologics diagnostics. For this we are collaborating with Pathcom Systems Corporation, which we acquired in March 2019. We aim to expand our manufacturing and functional materials. operations globally, using our diagnostics business in the US as a foothold. We aim to contribute to the development of the medical, All of Nichirei Biosciences’ businesses operate using biological materials that are subject to fluctuations in quality. Despite this, we pride ourselves on our ability to maintain a high level of product quality by ensuring stable production and quality control. health and biological industries by harnessing the technical As members of the Nichirei Group, we will produce high-quality products to ensure safety and security and elevate our global presence by prowess, procurement capabilities and quality assurance increasing the added value of our products with our highly specialized personnel and technology. capabilities that we have developed thus far through high-quality products and services. Main Measures External Environment (three-year outlook) Japan Nichirei Biosciences Inc. • Promote the development and commercialization of Opportunities https://www.nichirei.co.jp/bio/english/index.html Masato Takenaga next-generation diagnostics and instruments • Structural changes in medical systems and a growing • Establish stable production technology and increase customer number of patients due to the aging of societies around Executive Officer, Nichirei Corporation satisfaction by strengthening quality control the world Representative Director, President, • Create a business model reflecting technological innovations and • Tight healthcare financing and increased public health Nichirei Biosciences Inc. changing needs awareness Strengths • Strengthen intellectual property management to effectively deal • Increasing demand for diverse diagnostics and medical with business globalization devices, due to advances in medical care Overseas We are one of the few developers and manufacturers. • Promote business expansion, using US operations as a foothold Our advanced development capabilities and skilled Risks ESG human resources in this area make us competitive with • Intensified global competition involving medical companies • Build good relationships with regional communities around global companies. We benefit from having: • Growing risk of new infectious diseases due to climate Global Innovation Center change • Technological strength that allows us to create and provide • Improve productivity, while employing and training diverse stable supplies of high-quality products from biologically derived human resources and implementing work-style reforms raw materials • Abundant knowledge and technological experience related to cells and antibodies Global Innovation Center ichirei iosciences established lobal nnovation enter that will function as a new base for production and in ayama-shi aitama refecture. ull-scale operations began at the facility in une 201. he facility will enable us to expand the expertise and technologies we have accumulated over the years while responding to diversifying customer needs by encouraging innovation Main through in-house domestic and overseas exchanges. Products Features of Global Innovation Center Overview of the Global Innovation Center

30 Business Strategy Business Strategy: Overseas Temperature-controlled Logistics

Expand in Europe, to ASEAN * Fiscal years (FY) indicate years ended March 31. Strategies Through active investing: Medium-term Business Plan (FY2020–2022): WeWill 2021 ● Enlarge warehouses at the Netherlands’ Port of Rotterdam and Overseas Sales Ratio increase freight handling market share by increasing warehouse * Fiscal years (FY) indicate years ended March 31. capacity and strengthening quarantine functions Accelerate overseas expansion ● Strengthen storage functions with proactive investments in the Plan target U.K. and Germany; expand business scale by improving logistics illions of yen The Nichirei Group is promoting the expansion of overseas operations as a medium- to long-term growth strategy. During services and extending area covered 250 20% 22% the new business plan, the Group hopes to raise its overseas sales ratio from the current 14% to 16% through active capital ● Expand cross-border transportation and logistics for mass 1 19% investment and other efforts. retailers by using elevated vehicles; and strengthen 200 transportation by setting up inland bases in Europe 150 Overseas Sales Targets ● Encourage facility expansion in China ● Solidify business foundations in Thailand and Malaysia; launch 100 discussions on new areas of expansion 50 Key Areas for Expansion in Europe illions of yen 120.0 0 102.3 England FY2019 2020 2021 2022 100.0 92.6 The Netherlands Poland 7.2 83.0 Port area 80.0 Germany Overseas Other than overseas Belgium Inland area 0.0

0.0 France 20.0

0 201 2020 2021 2022 Marine, Meat and Poultry Products

Strategies to push up sales in Overseas Sales Ratio Chinese, North American markets. Processed Foods Plan target Strategies illions of yen 200 To boost the development and sale of Japanese 7% Strategies to boost Asian food sales in North America 5 5% 6% food products we will: 150 Strategies ● Expand our lineup of processed marine products, focusing on sushi toppings Overseas Sales ● Strengthen our overseas sales system 100 To expand categories in growth markets, ● Promote sales with area partners in emerging markets that have room to expand we will pursue share growth by: Plan target ● Promote sales of high-quality ingredients in China (for processed and illions of yen unprocessed meat and poultry products) 50 ● Utilizing strengths of US company InnovAsian Cuisine 0 39.9 Enterprises Inc. (ICE) in terms of product development 37.4 0 capability, sales network and production capacity to develop 32. 33.7 FY2019 2020 2021 2022 30.5 18.2 and produce distinctive products 30 1.7 Overseas Other than overseas ● Expanding Asian foods menu and augmenting production 13.0 15.0 12.2 capacity to meet sales growth 20 1. https://www.nichirei.co.jp/news/2018/322.html 1. Expanding Meat Distribution in India apanese only 1.7 1. 10 13.8 n ecember 2018 the ichirei roup invested in an e-commerce-based meat distribution and delivery start-up company in ndia. he goal was to provide consumers in ndian markets with fresh safe meat by utilizing the ichirei roups cold chain expertise as well as its .5 .8 .2 5.8 .8 uality control food safety management and meat processing technologies. 0 ndia is one of the strongest markets for meat in the world with high levels of production and demand. ut it lacks expertise in cold FY2018 2019 2020 2021 2022 chain distribution networks making it difficult to obtain fresh and safe high-uality meat there. hrough this business collaboration we are considering setting up regional meat distribution bases by building small cold chains InnovAsian Cuisine GFPT Nichirei Others and using sales networks that employ the latest information technology.

ichireis sales are the total both sales to customers in elightful ourmet rivate imited which operates icious an online meat marketplace based in ndia urope and sales made to customers within hailand.

31 Business Strategy Business Strategy: Overseas Temperature-controlled Logistics

0.0 France 20.0

0 201 2020 2021 2022 Marine, Meat and Poultry Products

ichireis sales are the total both sales to customers in elightful ourmet rivate imited which operates icious an online meat marketplace based in ndia urope and sales made to customers within hailand.

32 Business Strategy ☆ inzhu antai ood esearch and evelopment s of une 201 Global Network ● antai epresentative ffice ○ handong ichirei oods o. td. ○ ichirei oods ... nc. ○ nnovsian uisine nterprises nc. At present, the Nichirei Group ▲ ingdao epresentative ffice △ izhao ei eng ood rading o. td. ○△ ichirei ... conducts business in 14 countries △ ichirei eafoods nc. throughout the world. ●■ hanghai epresentative ffice ● ori actory ○ ichirei nterprise anagement □ hermotraffic td. onsulting hanghai o. td. ○ ichirei orporation hanghai td. ● okkaido ranch □ hanghai resh ine xpress o. td. 3 □ ichirei ogistics okkaido 7 ▲ igashi-ippon ranch okkaido office

ainham otterdam he etherlands ngland ersmold ermany o hi inh ity △ ichirei resh arm 2 nin oland ietnam arpiuet ▲ alian epresentative ffice eattle △ resh hicken arumai rance Bình Thuận ienzan ietnam an rancisco ietnam alian hina handong ● ohoku ranch hina □ ichirei ogistics ohoku iangsu ▲ igashi-nippon ranch igashi-ippon ffice hina hanghai hina ong ong ◆ an rancisco ranch △ resh aruichi 3 angkok hailand □ iangsu reshline ogistics o. td. ◇ athcom ystems orporation amut- hon uri △ ichirei resh ong ong td. □ rigo ogistics p. z o.o. 2 prakarn hailand hailand

elangor elem razil ○ ichirei □ hermotraffic mb alaysia ustralia ty. td. etrolina razil △ mazonas ndustrias limenticias ..

□ ichirei olding olland .. ○ ichirei do rasil gricola tda. □ urofrigo .. 5 ayabegun ● unabashi lant □ iwa otterdam ort old tores .. apporo ● unabashi o. 2 lant □ hermotraffic olland .. ydney ustralia ● unabashi o. 3 lant unohegun

★ ichirei orporation □ ransports odfroy ... △ rans acific eafood o. td. ● amagata lant amagata □ ntrepots odfroy ... ☆ ew ousing ▲ o hi inh ity epresentative ffice endai ● hiroishi lant ☆ ichirei usiness artners △ ichirei resh ietnam o. td. ☆ ichirei ura hiroishi ● anto hinetsu ranch ● ichirei oods ○ ichirei uco ietnam o. td. waki ▲ ichirei resh Domestic Network aitama ote: igures in parenthesis indicate ◆ ichirei iosciences okohama number of facilities. △ resh eat akudaira aku □ old hain etwork ayama unabashi ● etropolitan ranch ● hushikoku ranch ○ ichirei ce ishi-kasugaigun okyo □ ichirei ogistics hushikoku 12 agoya ■ ichirei ogistics roup akatsuki ○ ichirei hailand o. td. □ ogistics etwork 1 ○ hurei iroshima saka □ rans 3 ○ urapon ichirei oods o. td. 2 ○ yurei himonoseki □ okyo ichirei ervice unakata □ ichirei ogistics ngineering ●■▲ angkok epresentative ffice ukuoka □ ichirei ogistics anto 8 □ ichirei ogistics o. td. ● agasaki lant agasaki ▲ igashi-ippon ranch

● yushu ranch agoshima □ yokurei □ ichirei ogistics yushu 1 △ ichirei resh rocess 2 ▲ ishi-nippon ranch ● ansai ranch ◆ lobal nnovation enter ichirei orporation …★ ichirei oods …● ichirei ogistics roup …■ yushu ffice ● ansai o.2 lant ichirei roup companies …☆ ichirei oods roup companies …○ ichirei ogistics roup companies …□ □ ichirei ogistics ○ ichirei gri ansai 12 ○ ichirei ell inning □ ichirei resh …▲ ichirei iosciences …◆ saka ichirei ervice ● hubu ranch ichirei resh roup companies …△ ichirei iosciences roup companies …◇ ▲ ishi-nippon ranch □ ichirei ogistics okai 10 ◆ ansai ranch ▲ ishi-nippon ranch hubu ffice

● ansai lant

33 Business Strategy ☆ inzhu antai ood esearch and evelopment s of une 201 Global Network ● antai epresentative ffice ○ handong ichirei oods o. td. ○ ichirei oods ... nc. ○ nnovsian uisine nterprises nc. At present, the Nichirei Group ▲ ingdao epresentative ffice △ izhao ei eng ood rading o. td. ○△ ichirei ... conducts business in 14 countries △ ichirei eafoods nc. throughout the world. ●■ hanghai epresentative ffice ● ori actory ○ ichirei nterprise anagement □ hermotraffic td. onsulting hanghai o. td. ○ ichirei orporation hanghai td. ● okkaido ranch □ hanghai resh ine xpress o. td. 3 □ ichirei ogistics okkaido 7 ▲ igashi-ippon ranch okkaido office

elangor elem razil ○ ichirei □ hermotraffic mb alaysia ustralia ty. td. etrolina razil △ mazonas ndustrias limenticias ..

● ansai lant

34 Corporate Governance On Corporate Governance

Nichirei’s Governance

Otani: believe transparency is critical for a company improving capital efficiency thereby establishing a that handles food. urther it is important that mechanism for rational and systematic management. management and all ichirei employees realize that Otani: ix of ichireis 15 directors and auditors are without transparency we cannot continue as a going outside directors or company auditors. urthermore concern. hus even before the establishment of the ichirei adopts the company with board of company national orporate overnance ode ichirei had auditors structure and perceives its oard of uditors introduced outside directors and implemented to be adeuately independent as three of its five succession plans thereby taking the lead in members are outside company auditors. utside organizational reforms and institutional design. directors participate in anagement eeting isk Uzawa: company without adeuate governance anagement ommittee and other meetings as well cannot operate for nearly 80 years. ince have been as in oard of irectors as appropriate which appointed an outside director it has been my promotes management transparency. impression that ichirei is very serious about Uzawa: truly appreciate ichireis mission and vision. governance. oreover ichirei governance incorporates a financial perspective. ince the days Otani: mid significant changes in society and the when many apanese companies only placed appointment of a new president in pril 201 the importance on the profit and loss statement ichirei ichirei roup has been adjusting the direction of its has engaged in financial strategy using retained trajectory and has formulated a new roup vision economic profit as an indicator aimed at and long-term management plan toward 2030.

Outside Directors: Role and Expectations

Otani: hat we expect from outside directors is candidates for the position of outside director. ut Shizuka Uzawa Kunio Otani specialization and the ability to discover risks in one must wonder about the type of individual they Outside Director Representative Director, Chairman corporate management and the business seek. believe that an outside director must have the environment. lso rather than just giving negative ability to say no should the company stray too far opinions we expect the individual to engage in from its original vision. his is the reason am constructive discussion and to have the ability to convinced that experience in corporate think independently. managementincluding failuresis important. Realizing Management Goals deally it should be someone with a broader Otani: ompanies are operated by people so a perspective and point of view than has the executive companys direction will change significantly team. recognize that our current outside directors through Governance depending on how management is balanced. ince possess these ualities. n fact thanks to them we managers are reuired to have the ability to adapt to are always able to exchange ideas and work the prevailing strategy the stereotypical combination proactively to control situations. of business manager university professor and Uzawa: always try not to be critical. any accountant is not necessarily correct. companies are worried about a lack of appropriate

35 Corporate Governance On Corporate Governance

Nichirei’s Governance

Outside Directors: Role and Expectations

36 Corporate Governance

We need to accelerate our efforts to develop highly transparent management. Evaluation of the New Plan

Kunio Otani Otani: he new medium-term business plan eill Uzawa: can see that everyone took seriously their 2021 is the first one aimed at achieving our long-term work to formulate the plan and the numbers are management goals toward 2030. he plan name pretty exact. eill reflects the desire of resident enya kushi Otani: his is the first business plan for the new Expectations and Issues that everyone should think about and work to management team. t was formulated with passion achieve it. so am determined to achieve the plans goals. ccording to the plan completed following long Otani: s hairman of the oard of irectors Otani: uman resource growth is indispensable for and detailed discussions the roup has high Uzawa: ince we have put in place a young would like to promote highly transparent business growth. owever at present we are not expectations for overseas business development management team structure want them to have the management and make ichirei an entity that is fully engaged in developing the human resources which we were late to engage in when was freedom to make changes. esteemed both within and outside the ompany. necessary for overseas business. or this reason president. e definitely want to achieve this plan he concern is that overseas sales account for o achieve this we must sort out governance issues want to find and cultivate overseas human and expect that it will uickly enable our market less than 15 of overall sales. p to now that was adhere to the orporate overnance ode and resources who will help expand our business. fine. ut given apans declining birthrate and aging enhance the efficacy of the oard of irectors. capitalization to exceed 500 billion. Uzawa: rom now on we need to try a variety of population we must look to business abroad if we Uzawa: or some time have said that one ought to Uzawa: oard of irector discussions are already measures overseas and learn as much as we can are to achieve further growth. be a director of a holding company before being uite lively but participation must be expanded. when doing business abroad. president of an operating company. perating Otani: oday speed is reuired and agility is a oreover xecutive fficers and others who will be hat said without a solid foundation here in company presidents have generally refrained from keyword. hus if you have a good idea you need to the next generation of managers must engage in apan we will not succeed in global business. ut commenting on other operating companies but the try it out and if the situation changes you must discussions at strategy and other meetings. the ichirei governance system is truly robust and immediately and appropriately adjust your course of we are sufficiently thorough to ensure there are no thinking on this has changed recently hasnt it Otani: f these people participate in meetings action. ou must think deeply decide uickly and major incidents in the future. Otani: es it has. perating company presidents outside directors will be able to observe future act flexibly. urrently we face a number of issues have become more open about providing appropriate board members. his is a good way to promote associated with the introduction of and yet am opinions on other businesses and this is reflected in succession plans and develop human resources for confident that they will all be handled efficiently by our new business plan. global deployment. resident kushi. Uzawa: am convinced that the only way to train people is to force them to go overseas. ut even then although achieving the target overseas sales ratio of 30 will be difficult it must be done.

Kunio Otani It is difficult for me to imagine any Representative Director, Chairman fter gaining business experience in accounting management planning and major problems at Nichirei, given the various business management support departments appointed epresentative irector in 2013 and has served in the current position since pril 201. system of governance it has in place. Shizuka Uzawa Outside Director Shizuka Uzawa fter serving as epresentative irector as well as resident and hairman of isshinbo oldings nc. appointed utside irector at ichirei in 201. oncurrently serves as utside irector at the apan inance orporation and apporo oldings td.

37 Corporate Governance

We need to accelerate our efforts to develop highly transparent management. Evaluation of the New Plan

38 Corporate Governance Basic Views on Corporate Governance On the basis of its holding company structure, the Group engages in business through its operating companies across a Status of appointment of members to the Board of Directors and wide range of ﬁelds which include processed foods, marine products, meat and poultry products, logistics and biosciences. various committees The Board of Directors of Nichirei Corporation (the “Company”) draws up the Group’s business strategy and Status of appointment implements an operating structure which provides supervision of business executed by the operating companies with the aim of achieving sustainable growth and increasing its corporate value over the medium to long term. The Company is well aware that ensuring equitable and highly transparent business practices constitutes a key Representative Director, Chairman Group Human Resources Committee managerial issue, and accordingly strives to enhance its corporate governance practices under the supervision of the Board Boards of Directors Group Environmental Protection of Directors by taking action with respect to appropriately allocating resources, accelerating the decision-making process Representative Director, President Committee Group Risk Management and ensuring strict compliance. Group Quality Assurance Committee Corporate Governance Committee The Company adopts the company with board of company auditors Inside Directors https://www.nichirei.co.jp/english/corpo/ Social Action Program Committee structure of corporate governance pursuant to the Companies Act of Japan. management/governance_policy.html Group Internal Control Management Committee Company Auditors Committee

inside directors outside directors Group Officer Examination 7 3 Outside Directors Committee ーーーーーー 10 5 Outside Company Auditors directors auditors

female directors outside auditors 2 3 Activity aimed at strengthening Nichirei Group’s corporate governance structure Corporate Governance Structure as of une 25 201 nhancement of the oard of irectors decision-making and 2001 • Implementation of executive officer system supervisory functions eneral eeting of hareholders ncreasing the transparency of management and strengthening the 2003 • Implementation of outside director system supervisory function of the oard of irectors ppointment/dismissal ppointment/dismissal ppointment/ olding company dismissal his move is aimed at establishing a management system through which both the holding company which is responsible for ichirei roups onsultative bodies • Shift to holding company system overall strategy and the roups operational companies which handle ppoint- 2005 business execution can demonstrate their responsibility and mobility. ominating dvisory ommittee ment oard of irectors udit oard of uditors ooperation nswer • Shift to three independent outside directors structure emuneration dvisory ommittee 5 ompany uditors 10 irectors including including • First female outside director (one) installed 3 utside irectors 3 utside ompany uditors hese were abolished to enable us to review our director compensation ndependent uditor roup uman esource ommittee system as part of our efforts to conduct management reform and roup isk anagement ommittee supervision ooperation • Retirement bonuses for directors discontinued implement a compensation system that is linked to business roup nvironmental rotection udit 200 performance and results. ommittee epresentative irector udit orporate enures were shortened to increase the mobility of our response to roup uality ssurance ommittee and resident nternal • Shortening of director tenure to one year changes in the management environment. roup nternal ontrol ommittee udit ooperation roup fficer xamination ommittee anagement ommittee ivision 2012 • Shift to five auditor structure (including three xecutive officers independent outside company auditors) eview ommittee stablished the omination and emuneration dvisory ommittees as ntellectual roperty anagement 2015 • Corporate Governance Basic Policy established advisory bodies for the oard of irectors ommittee orporate staff divisions udit • Board of Directors effectiveness evaluations started evaluations started udit perating companies n the event of an attempt to acuire the company through a large-scale purchase its shareholders will respond by determining whether or not the large-scale purchase in uestion is appropriate. or • Discontinuation of rules regarding the this decision to take place they must promptly receive sufficient 201 high-volume purchase of Nichirei share information regarding the purchase. owever we made the decision to Status of the establishment of a voluntary committee, its composition and discontinue these rules based on the determination that we have certificates, etc. (Anti-takeover measures) the attributes of its chairperson established environments that adeuately enable us to appropriately perform these functions in accordance with the inancial nstruments Number of and xchange ct reducing the need for us to continue implementing Inside Directors Outside Directors Auditors Chairperson members anti-takeover measures.

Voluntary commitment that Nominating Advisory is functionally equivalent 2 3 Outside Director • Number of female outside directors increased to two to a nominating committee Committee 2018 • Formulation of Nichirei Group Disclosure Policy Voluntary commitment that Remuneration is functionally equivalent 5 1 3 1 Outside Director to a remuneration advisory Advisory Committee 201 • Revision of director compensation system Committee

39 Corporate Governance Basic Views on Corporate Governance On the basis of its holding company structure, the Group engages in business through its operating companies across a Status of appointment of members to the Board of Directors and wide range of ﬁelds which include processed foods, marine products, meat and poultry products, logistics and biosciences. various committees The Board of Directors of Nichirei Corporation (the “Company”) draws up the Group’s business strategy and Status of appointment implements an operating structure which provides supervision of business executed by the operating companies with the aim of achieving sustainable growth and increasing its corporate value over the medium to long term. The Company is well aware that ensuring equitable and highly transparent business practices constitutes a key Representative Director, Chairman Group Human Resources Committee managerial issue, and accordingly strives to enhance its corporate governance practices under the supervision of the Board Boards of Directors Group Environmental Protection of Directors by taking action with respect to appropriately allocating resources, accelerating the decision-making process Representative Director, President Committee Group Risk Management and ensuring strict compliance. Group Quality Assurance Committee Corporate Governance Committee The Company adopts the company with board of company auditors Inside Directors https://www.nichirei.co.jp/english/corpo/ Social Action Program Committee structure of corporate governance pursuant to the Companies Act of Japan. management/governance_policy.html Group Internal Control Management Committee Company Auditors Committee inside directors outside directors Group Officer Examination 7 3 Outside Directors Committee ーーーーーー 10 5 Outside Company Auditors directors auditors female directors outside auditors 2 3 Activity aimed at strengthening Nichirei Group’s corporate governance structure Corporate Governance Structure as of une 25 201 nhancement of the oard of irectors decision-making and 2001 • Implementation of executive officer system supervisory functions eneral eeting of hareholders ncreasing the transparency of management and strengthening the 2003 • Implementation of outside director system supervisory function of the oard of irectors ppointment/dismissal ppointment/dismissal ppointment/ olding company dismissal his move is aimed at establishing a management system through which both the holding company which is responsible for ichirei roups onsultative bodies • Shift to holding company system overall strategy and the roups operational companies which handle ppoint- 2005 business execution can demonstrate their responsibility and mobility. ominating dvisory ommittee ment oard of irectors udit oard of uditors ooperation nswer • Shift to three independent outside directors structure emuneration dvisory ommittee 5 ompany uditors 10 irectors including including • First female outside director (one) installed 3 utside irectors 3 utside ompany uditors hese were abolished to enable us to review our director compensation ndependent uditor roup uman esource ommittee system as part of our efforts to conduct management reform and roup isk anagement ommittee supervision ooperation • Retirement bonuses for directors discontinued implement a compensation system that is linked to business roup nvironmental rotection udit 200 performance and results. ommittee epresentative irector udit orporate enures were shortened to increase the mobility of our response to roup uality ssurance ommittee and resident nternal • Shortening of director tenure to one year changes in the management environment. roup nternal ontrol ommittee udit ooperation roup fficer xamination ommittee anagement ommittee ivision 2012 • Shift to five auditor structure (including three xecutive officers independent outside company auditors) eview ommittee stablished the omination and emuneration dvisory ommittees as ntellectual roperty anagement 2015 • Corporate Governance Basic Policy established advisory bodies for the oard of irectors ommittee orporate staff divisions udit • Board of Directors effectiveness evaluations started evaluations started udit perating companies n the event of an attempt to acuire the company through a large-scale purchase its shareholders will respond by determining whether or not the large-scale purchase in uestion is appropriate. or • Discontinuation of rules regarding the this decision to take place they must promptly receive sufficient 201 high-volume purchase of Nichirei share information regarding the purchase. owever we made the decision to Status of the establishment of a voluntary committee, its composition and discontinue these rules based on the determination that we have certificates, etc. (Anti-takeover measures) the attributes of its chairperson established environments that adeuately enable us to appropriately perform these functions in accordance with the inancial nstruments Number of and xchange ct reducing the need for us to continue implementing Inside Directors Outside Directors Auditors Chairperson members anti-takeover measures.

40 Corporate Governance

Director Compensation Compliance

In pursuit of the targets detailed in our medium-term management plan, we revised our compensation system for directors (excluding outside directors) and executive officers to enhance incentives for directors and to further promote the sharing of Basic Views on Compliance value between our directors and shareholders. The Nichirei Group conducts various activities intended to The laws and maintain high ethical standards and to comply with the laws social norms of Company regulations each country 360 million yen or less annually Compensation issued to grant and social norms of each country in which it operates. Prior to restricted shares to directors To ensure that all employees comply with laws and Basic compensation and revision Nichirei’s internal regulations and act in keeping with performance-linked bonuses Monetary claims corporate ethics, Nichirei formulated and distributed a code Nichirei Group Code of Conduct of conduct and examples of how the code is applied and Total amount clarifying the guiding principles by giving specific examples. 1. Compliance with laws and regulations 270 million yen or 130 million yen or Employees around the world are also provided with the concerning respect for human rights and labor less annually less annually 100 million yen or Group’s code of ethics, which has been translated in eight 2. Environmental protection Post- less annually Performance-linked Stock languages including English, French, Chinese and Thai. 3. Compliance with laws and regulations and revision Basic compensation bonuses compensation Total number of ordinary shares We also conduct compliance training sessions for regular internal regulations issued or sold employees, in order that they might better understand the 4. Management and preservation of the Company’s property principles and structure of compliance management. Structured remuneration to include stock compensation in addition to 70,000 shares or 5. Prohibition of personal use of Company property etc. basic compensation and performance-linked bonuses less annually https://www.nichirei.co.jp/english/corpo/compliance.html xecutive officers are eligible for performance-linked bonuses and stock compensation Director Evaluations Risk Management An analysis and evaluation of the status of activities by the Board of Directors is carried out as necessary with the assistance of outside experts for the purpose of ensuring effective decision-making by the Board and a summary of the results is then disclosed. Basic Views on Risk Management Nichirei Group has set up the Group Risk Management Committee, chaired by the Representative Director and President, to Target Directors, auditors (15 people in total) manage the various risks associated with its business activities, in the most appropriate and rational ways from a Evaluation comprehensive standpoint and to maximize the corporate Group’s enterprise value. The committee identifies and evaluates Period From late January 2018 to late February 2018 Method Group-wide risks and Nichirei and its business companies respond to these risks on their own accord, based on the Method Self-assessment method through questionnaires are conducted through established risk management cycle. Important items are reported to the Board of Directors of Nichirei Corporation, the holding external third-party experts company, which considers the response. We have also established and implement an in-house system to facilitate operational effectiveness and staff ability, ively discussions are held in easy-to-speak atmospheres ensure the accuracy of financial reports, comply with laws and regulations pertinent to our business and to protect assets. e are promoting the improvement of oard of irector materials and encouraging that information be provided to outside directors in advance Director The Board of Directors opinions and e have secured a considerable level of effectiveness from oard of irectors remonstrations e have seen a certain level of improvement concerning issues that were brought to our attention in the past President e have identified several points that will improve the effectiveness of the oard of irectors when achieved Group Risk Management ● Formulate risk Opinion from Committee countermeasure ● Educational and his may be considered during future discussions conducted by the oard of irectors developmental outside experts Group Environmental policies activities Protection Committee ● Establish targets for ompliance the coming fiscal year ● Implement action plan risk Classify risks Group Quality ● Draw up an action plan and manage Assurance Committee Initiative 1 Initiative 2 Initiative 3 them rationally Group Internal trategic through the Concerning the publishing of Regarding our Board of Director and Control Committee paperless Board of Director voluntary committee business most Succession Plan appropriate materials membership risk Group Officer methods and Examination Committee best-suited isk associated ● Check status of with the reporting and departments ● Reviews for company-wide controls disclosure of financial responsible individuals e will create a guidebook e work to formulate medium- to e must conduct discussions based Intellectual Property ● Working evaluation of risk information ● Modify and improve explaining terms and abbreviations long-term succession plans focused on societal demand calling for higher Management Committee countermeasures ratios of independent outside risk ● Understand and evaluate risk that are specific to our company and on representative directors countermeasures industry and conduct information encouraging rigorous discussion directors. dditionally we will Review Committee ● Internal and external audits sharing as necessary including the within the ominating dvisory continue to consider how the ● Operational testing ominating dvisory ommittee and supplementation and dissemination ommittee and ensuring appropriate emuneration dvisory ommittee of oard of irector materials. reporting to the oard of irectors. should be structured.

41 Corporate Governance

Director Compensation Compliance

42 Corporate Governance

Directors, Auditors and Officers

ack row from left

Masahiko Takenaga Kazuhiko Umezawa Junji Kawasaki Yoshifumi Kaneko Takumi Taguchi Yasunari Shigeno Kazuhiko Yasuda Masaaki Okajima Kazuo Nagano Yuhiko Saito irector irector irector irector irector ompany uditor ompany uditor utside ompany uditor utside ompany uditor utside ompany uditor xecutive fficer xecutive fficer xecutive fficer xecutive fficer xecutive fficer

ront row from left

Kuniko Shoji Mieko Wanibuchi Kenya Okushi Kunio Otani Shizuka Uzawa utside irector utside irector epresentative irector epresentative irector utside irector resident hairman

43 Corporate Governance

Directors, Auditors and Officers

ack row from left

ront row from left

Kuniko Shoji Mieko Wanibuchi Kenya Okushi Kunio Otani Shizuka Uzawa utside irector utside irector epresentative irector epresentative irector utside irector resident hairman

44 Corporate Governance

his member assumed his or her position after being appointed at the 100th Profile as of une 25 201 rdinary eneral eeting of hareholders held on une 2 2018. ccordingly we have only listed his or her oard of irector meeting attendance record for the period following his or her assumption of office. Directors

Kunio Otani Kenya Okushi Takumi Taguchi Yoshifumi Kaneko Junji Kawasaki Kazuhiko Umezawa epresentative irector epresentative irector irector xecutive fficer irector xecutive fficer irector xecutive fficer irector xecutive fficer hairman resident

Number of shares held: Number of shares held: Number of shares held: Number of shares held: Number of shares held: Number of shares held: 12700 shares 28 shares 3000 shares 2500 shares 800 shares 100 shares Board of Director Board of Director Board of Director Board of Director Board of Director Board of Director meeting attendance: meeting attendance: meeting attendance: meeting attendance: meeting attendance: meeting attendance: 1/1 meetings 18/1 meetings 18/1 meetings 18/1 meetings 1/1 meetings 15/15 meetings 100 .7 .7 .7 100 100

r. unio tani has attained a wealth of experience in r. enya kushi has gained a wealth of experience in r. akumi aguchi has acuired extensive epresentative irector resident ichirei resh nc. r. unji awasaki has acuired extensive experience epresentative irector resident divisions such as accounting tax strategic planning divisions such as manufacturing and business experience in accounting tax and finance r. oshifumi aneko has acuired abundant in uality assurance division through duties that ichirei ogistics roup nc. and corporate supervise as well as corporate coordination of the processed foods business and divisions. ainly at the oard of irectors and experience in divisions such as sales procurement and include performing uality audits and process uality r. azuhiko mezawa has abundant operational management experience as resident of the ompany strategic planning as well as corporate management other various internal meetings he provides logistics of the processed foods business as well as management and marketing division of the processed experience including logistics solutions for and its group company. ainly at the oard of irectors experience as resident of a roup company. ainly opinions and advice etc. based on his knowledge corporate management experience as resident of a foods business. ainly at the oard of irectors and low-temperature logistics business as well as and other various internal meetings he provides opinions at the oard of irectors and other various internal in accounting finance and others. roup company. ainly at the oard of irectors and other various internal meetings he provides opinions operational management. e also possesses and advice etc. from the viewpoint of a position meetings he provides opinions and advice etc. based other various internal meetings he provides opinions and advice etc. based on his knowledge in considerable management experience from being governing the roup management. on his experience in processed foods business and and advice etc. based on his wealth of experience and technology management and uality assurance. president of a roup company. ainly at the oard of strategic planning and since assuming the office of achievement in apan and overseas. irectors and other various internal meetings he resident of the ompany in pril 201 from his provides opinions and advice etc. based on his wealth viewpoint as the person in command of the roup of experience and achievements in the low-temperature management. logistics business.

Outside Directors Company Auditors

Masahiko Takenaga Shizuka Uzawa Mieko Wanibuchi Kuniko Shoji Yasunari Shigeno Kazuhiko Yasuda irector xecutive fficer utside irector utside irector utside irector ompany uditor ompany uditor

Number of shares held: Number of shares held: Number of shares held: Number of shares held: Number of shares held: Number of shares held: 538 shares 00 shares 00 shares 100 shares 5800 shares 00 shares Board of Director Board of Director Board of Director Board of Director meeting attendance: meeting attendance: meeting attendance: meeting attendance: ew appointee 1/1 meetings 18/1 meetings 15/15 meetings 100 .7 100

epresentative irector resident ichirei oods nc. r. hizuka zawa has extensive experience as a s. ieko anibuchi has worked in corporate s. uniko hoji has extensive experience as a r. asunari higeno has attained extensive hile possessing sufficient knowledge of finance and r. asahiko akenaga has for many years worked in corporate executive coupled with a wide-ranging management for many years and leverages the corporate manager in the pharmaceutical-related experience in sales and administration of the logistics accounting r. azuhiko asuda also has abundant sales divisions in the processed foods business in knowledge of finance and accounting and in the experience and knowledge acuired through these industry and broad knowledge of uality assurance business as well as corporate management experience in management such as accounting ax addition to his experience in brand promotion and interest of roup management provides opinions and endeavors to offer opinions and advice during meetings and . he also offers opinions and advice during experience as resident of group companies. and strategic planning. manufacturing divisions. s eneral anager of the advice during meetings of the oard of irectors and of the oard of irectors and various other internal meetings of the oard of irectors and various other onsumer rand ivision he moved large products to various other internal meetings including meetings of meetings including meetings of the ominating internal meetings. market contributed to growing the roups sales and the ominating dvisory ommittee and dvisory ommittee and emuneration dvisory profits as a market leader and built up extensive ommittee from perspectives that include the product ignificant concurrent positions outside the ompany emuneration dvisory ommittee. experience and achievements in the process. and service purchasing behaviors of consumers. utside irector urthermore he possesses management experience as utside irector orporation ignificant concurrent positions outside the ompany ignificant concurrent positions outside the ompany irector of a roup company and from pril of this utside irector apan inance orporation epresentative irector resident . . year as resident of a roup company. utside irector apporo oldings imited epresentative irector resident . . epresentative irector resident o. td. Outside Company Auditors Executive Officers

Masaaki Okajima Kazuo Nagano Yuhiko Saito utside ompany uditor utside ompany uditor utside ompany uditor

Number of shares held: Number of shares held: Number of shares held: 00 shares Board of Director Board of Director Board of Director meeting attendance: meeting attendance: meeting attendance: 18/1 meetings 1/1 meetings ew appointee .7 8.2

r. asaaki kajima has abundant experience and r. azuo agano owns advanced experience and r. uhiko aito has had a career in the legal Tatsuo Udagawa Kazunori Miki Masato Takenaga Yutaka Karino extensive insights into administrative affairs. n addition knowledge as a corporate manager including the profession while also holding judicial positions in xecutive fficer xecutive fficer xecutive fficer xecutive fficer mainly at the oard of irectors and the oard of management of financial institution. government office. aving worked as an attorney since eneral anager usiness anagement eneral anager trategic lanning epresentative irector eneral anager uman esources uditors he provides opinions and advice etc. retiring from public office he possesses wealth of resident ichirei iosciences nc. trategy eneral ffairs experience and intricate knowledge as a legal expert.

45 Corporate Governance

Outside Directors Company Auditors

Masahiko Takenaga Shizuka Uzawa Mieko Wanibuchi Kuniko Shoji Yasunari Shigeno Kazuhiko Yasuda irector xecutive fficer utside irector utside irector utside irector ompany uditor ompany uditor

Masaaki Okajima Kazuo Nagano Yuhiko Saito utside ompany uditor utside ompany uditor utside ompany uditor

46 Initiatives to Resolve Social Issues Related SDG goals Creating New Value for Customers

Health-related Activities Initiatives for Innovation Bloodstains

Meat Production: Focus on Omega-3 Fatty Acids Food Waste Reduction Bruising Amani no Megumi Meat AI-powered diagnostic technology https://www.nichireifoods.co.jp/news/2018/info_id5715/ apanese only http://www.goodbalancemeat.jp/ apanese only In February 2018, in partnership with Kindai University, Nichirei Foods Nichirei Fresh produces and sells meat with a focus on omega-3 fatty acids, developed technologies powered by artificial intelligence (AI)1. which are essential for human health. We have improved the balance of We maintain and control the quality of the ingredients for processed otes:1. rtificial ntelligence is the simulation of human omega-3 and omega-6 fatty acids by giving chickens, pigs and cattle* a Comparison of amount of omega-3 fatty acid chicken products as we receive them, by using sorting technologies, such as intelligence processes by machines especially formula feed that uses ingredients derived from flax, which is rich in (α-linolenic acid) that body can absorb from computer systems. he computer programs used 100g pork loin metal detection, X-rays, near-infrared rays, optics and colors. can understand human language make logical α-linolenic acid. As a result, we have developed tender meat that we have inferences and learn from experience. mg However, since the accuracy of these methods in distinguishing the quality 2. mpurities the parts from the ingredients that are not been selling since 2006. 450 3 of ingredients decreases depending on the position and angle of the foreign normally edible in the case of chicken referring to Omega-3 fatty acids, abundant in blue-backed fish, flaxseed oil and bones feathers etc. About matter and impurities,2 additional manual or visual inspection is often required. wild sesame oil, are converted into eicosapentaenoic acid (EPA) and 300 4 times In the selection of the ingredients for cuts of chicken, in particular, the three major impurities that must be docosahexaenoic acid (DHA) in the body. However, the diet of today’s eliminated are bones, feathers and bloodstains. Due to its ability to locate such impurities with pinpoint accuracy, Japanese is often lacking in the essential fatty acids that cannot be made in AI-powered technology does not remove unnecessary amounts of impurity-free meat, leading to reduced food waste. the body, especially omega-3 fatty acids. Thus, Nichirei Fresh is helping 150 support the health of its customers through the meat that appears frequently 110 in everyday meal settings. Using the IoT to Save Energy, Pass on Skills 0

here are individual differences. tandard pork loin Omega Balance Pork Predicting refrigeration failures, saving energy Nichirei Logistics Group Hitachi, Ltd. ource: ichirei resh https://www.nichirei.co.jp/sites/default/files/inline-images/ Collection Storage Analysis english/csr/pdf/csr2018.pdf#page=21 Health through Nutrition Weather data In September 2018, the Nichirei Logistics Group Field data OT OT Refrigerator operation data sensing gate way platform worked jointly with Hitachi, Ltd. to install a system to Composition-Controlled Foods arbo- Warehouse environment data alt at alorie hydrate predict refrigeration equipment failures using the IoT https://wellness.nichirei.co.jp/shop/default.aspx apanese only eduction in energy costs and to improve the operating efﬁciency of equipment. eduction in maintenance/repair costs arly and highly accurate detection of failure signs Since 2004, Nichirei Foods has been selling, by mail order, This will allow operations and maintenance to limination of sudden upport for highly efficient operation of refrigeration failures/recovery work euipment by visualization of energy consumption side dishes and rice that are not only calorie-controlled but be more efﬁcient, while helping to overcome the eduction in number of patrol and operational improvement analysis inspections also contain controlled levels of salt, fat and carbohydrate. shortage of skilled engineers and save energy. We have a registered dietitian in the company and offer meal consultations over the phone, thereby providing customers with the opportunity to easily manage their health. Technology for Personalized Flavor TM

Kikubari Gozen nutrition composition-controlled foods https://www.nichirei.co.jp/newbiz/biz002/ apanese only 1 2 3 og in eplies to uestions iagnoses food uggests recipes preference types Companion Diagnostics We are developing a program that gives flavor recommendations to make people’s selection of food more Provision of diagnostics for personalized cancer treatments enjoyable. The associated service will commence in 2020. The program uses the Nichirei Group’s MS Nose https://www.nichirei.co.jp/news/2018/321.html apanese only proprietary technology, which measures retronasal aroma1 In 2014, Nichirei Biosciences became the first Japanese company to which is a key element of flavor. It also uses psychometrics,2 the design and manufacture and sell “companion diagnostics”, which are used to select interpretation of tests that measure psychological values. treatments and drugs eligible for each patient with cancer in terms of their ince the screen is still under development the Using technology to find flavors that one likes enables one to display results etc. may change. physical condition and pathology. Histofine ALK iAEP® Kit enjoy food better and represents an added value that has not otes: 1. he sense is stimulated when aroma moves from the mouth to the olfactory receptors. Furthermore, immune system-related technologies that we have developed so far are contributing to the advancement of previously been available. 2. echnology developed in collaboration with the aculty of cience and ngineering personalized medicine that enables the selection of treatments and drugs that are highly effective and have few side effects. huo niversity.

47 Initiatives to Resolve Social Issues Related SDG goals Creating New Value for Customers

Health-related Activities Initiatives for Innovation Bloodstains

48 Initiatives to Resolve Social Issues Related SDG goals Provision of Safe Products and Services

Building of Quality Control System through Proactive Introduction Building of Traceability of International Standards https://www.nichirei.co.jp/sites/default/files/inline-images/english/csr/pdf/csr2018.pdf#page=38 https://www.nichirei.co.jp/sites/default/files/inline-images/english/csr/pdf/csr2018.pdf#page=37

The Nichirei Group offers a variety of products and services that possess distinguishing characteristics. In addition to the operation To always provide safe, reliable and high-quality food, the Nichirei Group conducts rigorous quality controls and inspections, of internal rules and regulations that match those characteristics, we are actively promoting the acquisition of international standard from the ingredients to the products and has built a traceability system that matches the distinguishing characteristics of certiﬁcations while working to strengthen our quality control system and provide safe products and services. each product. In the event of an accident, enhanced traceability would prevent damage from spreading and enable rapid otes: investigation of the cause. We would also provide prompt and accurate information to alleviate consumer concerns. Certification Status 1. : eveloped in the nited tates The building of traceability requires collaboration and cooperation on the part of the ingredient suppliers, manufacturers during the 10s for the aerospace industry Rate of Certification5 the system is an international and distributors in the supply chain. Certification Operating Company management method for food production that FY2018 FY2019 aims to prevent hazards during the The Nichirei Group regularly holds study sessions to deepen shared awareness with regard to quality information. manufacturing process by analyzing hazards Nichirei Foods 13/15 14/15 To digitize and link information, we are also promoting the utilization of our own system that can be centrally controlled. The HACCP system1 and establishing important control points. Nichirei Fresh 6/76 7/76 2. 22000: n international management system related to food safety that is based on Traceability in the case of frozen green soybeans (illustration) 7 22000. Nichirei Foods 13/15 3/15 3. 22000: n international standard related ISO9001 to food safety management systems for Nichirei Fresh 8/8 8/9 reducing food safety risks that is based on the (Quality management system) food sanitation control techniues. What the Trace Code Tells You Nichirei Logistics Group 105/112 104/115 . afe uality ood certification provides 2020.10.23 / EB assurance that the product being purchased he trace code allows you to trace a Best-by date Factory code Nichirei Foods 13/15 14/15 meets strict international food safety and uality product back to its place of cultivation. FSSC220002,ISO220003,SQF4 standards such as . n countries outside Nichirei Fresh 6/8 7/9 of urope it is the program recognized by the race codes are printed on these (Food safety management system) lobal ood afety nitiative . ichirei oods frozen green soybeans 13B03 1 F401 Nichirei Logistics Group 2/112 2/115 5. arget business establishments ratio: onsolidated subsidiary business to trace the cultivation and production Farm code Arrived Feb. 13 Truck ISO14001 (Environmental management system) Nichirei Foods 11/15 11/15 establishments in apan food factories management. f you know how to read Production line number logistics centers etc. number . arget business establishments excluding these codes you can trace the entire (Medical devices / In vitro diagnostic drugs) Nichirei Biosciences 2/2 2/2 ISO13485 ichirei resh arm history of a product from the * Fiscal years (FY) indicate years ended March 31. 7. witching to 22000 he information displayed in this row can be used to cultivation management status in the trace the following: field to the conditions in the factory. The farm at which it was harvested Food Defense Initiatives ichirei oods is using the trace codes The truck used to transport the harvested product to conduct ongoing improvements When the product arrived at the pre-processing factory Production line number https://www.nichirei.co.jp/english/safety/system.htmlhttps://www.nichirei.co.jp/english/safety/system.html based on its discussions with local producers in order to better respond he information displayed in this row can be used to The Nichirei Group emphasizes people management to protect food. trace the following: to customers needs. In addition to restricting access to areas where food is handled to Date when the product was packaged The factory at which it was packaged authorized individuals, we have made it possible to determine the when, who and where of such individuals at all times. In-house operation rules covering visitors and contractors as well as self-checks are in place and Activities for Safe, Secure Workplace Environments and audits of our plants are conducted regularly to conﬁrm safety. We are also Service Quality Improvements working to improve the workplace environment based on employee satisfaction surveys and interviews. We have installed cameras and face recognition systems at all our plants in Japan and overseas. To protect the food we https://www.nichirei.co.jp/english/csr/work/investigation.html have created a system based on the distinguishing characteristics of each product and which allows follow-up investigations to be conducted should problems arise. If a problem does occur, a link is established with our food crisis management system, Aiming to eliminate accidents in warehouses and involving its which allows accurate information to be disseminated and responded to quickly. delivery vehicles as well as zero product accidents, the Nichirei Logistics Group holds regular training at the Safety and Quality Training Center and national contests for the purpose of improving Quality Assurance System for Diagnostic Drugs Based on ISO 13485 forklift driving skills, delivery driver skills and product knowledge.

https://www.nichirei.co.jp/sites/default/files/inline-https://www.nichirei.co.jp/sites/default/files/ Overview of ISO 13485 ll-apan orklift riving ompetition Management responsibility images/csr/report/2017/pdf/pdf_2017_007.pdfinline-images/csr/report/2017/pdf/pdf_2017_007.pdf Management held once a year every three years ocial responsibility in management compliance with regulatory affairs and relevant laws apanese only Review ormulation of uality policy and strategy Having obtained ISO 13485* certiﬁcation, the Product Realization Processes Resource international standard for quality management Customer-related Processes management nderstanding of customer reuirements Risk nfrastructure Management systems in medical devices, Nichirei Biosciences ustomer communications evel of satisfaction management raining nuiries including complaints representative is building a thorough quality assurance system. for ontrol of ISO cene from the competition promotion he international standard for uality management systems in the Design and development Production Logistics documents medical field covering the continuous manufacture and supply of records safe and useful medical devices and in vitro diagnostics. Measurement, analysis and improvement processes nternal audits onitoring and measurement of processes orrective and preventive actions articipants of the th contest which is held once a year udging of inspection skills

49 Initiatives to Resolve Social Issues Related SDG goals Provision of Safe Products and Services

The Nichirei Group offers a variety of products and services that possess distinguishing characteristics. In addition to the operation To always provide safe, reliable and high-quality food, the Nichirei Group conducts rigorous quality controls and inspections, of internal rules and regulations that match those characteristics, we are actively promoting the acquisition of international standard from the ingredients to the products and has built a traceability system that matches the distinguishing characteristics of certifications while working to strengthen our quality control system and provide safe products and services. each product. In the event of an accident, enhanced traceability would prevent damage from spreading and enable rapid otes: investigation of the cause. We would also provide prompt and accurate information to alleviate consumer concerns. Certification Status 1. : eveloped in the nited tates The building of traceability requires collaboration and cooperation on the part of the ingredient suppliers, manufacturers during the 10s for the aerospace industry Rate of Certification5 the system is an international and distributors in the supply chain. Certification Operating Company management method for food production that FY2018 FY2019 aims to prevent hazards during the The Nichirei Group regularly holds study sessions to deepen shared awareness with regard to quality information. manufacturing process by analyzing hazards Nichirei Foods 13/15 14/15 To digitize and link information, we are also promoting the utilization of our own system that can be centrally controlled. The HACCP system1 and establishing important control points. Nichirei Fresh 6/76 7/76 2. 22000: n international management system related to food safety that is based on Traceability in the case of frozen green soybeans (illustration) 7 22000. Nichirei Foods 13/15 3/15 3. 22000: n international standard related ISO9001 to food safety management systems for Nichirei Fresh 8/8 8/9 reducing food safety risks that is based on the (Quality management system) food sanitation control techniues. What the Trace Code Tells You Nichirei Logistics Group 105/112 104/115 . afe uality ood certification provides 2020.10.23 / EB assurance that the product being purchased he trace code allows you to trace a Best-by date Factory code Nichirei Foods 13/15 14/15 meets strict international food safety and uality product back to its place of cultivation. FSSC220002,ISO220003,SQF4 standards such as . n countries outside Nichirei Fresh 6/8 7/9 of urope it is the program recognized by the race codes are printed on these (Food safety management system) lobal ood afety nitiative . ichirei oods frozen green soybeans 13B03 1 F401 Nichirei Logistics Group 2/112 2/115 5. arget business establishments ratio: onsolidated subsidiary business to trace the cultivation and production Farm code Arrived Feb. 13 Truck ISO14001 (Environmental management system) Nichirei Foods 11/15 11/15 establishments in apan food factories management. f you know how to read Production line number logistics centers etc. number . arget business establishments excluding these codes you can trace the entire (Medical devices / In vitro diagnostic drugs) Nichirei Biosciences 2/2 2/2 ISO13485 ichirei resh arm history of a product from the * Fiscal years (FY) indicate years ended March 31. 7. witching to 22000 he information displayed in this row can be used to cultivation management status in the trace the following: field to the conditions in the factory. The farm at which it was harvested Food Defense Initiatives ichirei oods is using the trace codes The truck used to transport the harvested product to conduct ongoing improvements When the product arrived at the pre-processing factory Production line number https://www.nichirei.co.jp/english/safety/system.html based on its discussions with local producers in order to better respond he information displayed in this row can be used to The Nichirei Group emphasizes people management to protect food. trace the following: to customers needs. In addition to restricting access to areas where food is handled to Date when the product was packaged The factory at which it was packaged authorized individuals, we have made it possible to determine the when, who and where of such individuals at all times. In-house operation rules covering visitors and contractors as well as self-checks are in place and Activities for Safe, Secure Workplace Environments and audits of our plants are conducted regularly to confirm safety. We are also Service Quality Improvements working to improve the workplace environment based on employee satisfaction surveys and interviews. We have installed cameras and face recognition systems at all our plants in Japan and overseas. To protect the food we https://www.nichirei.co.jp/english/csr/work/investigation.htmlhttps://www.nichirei.co.jp/english/csr/work/investigation.html have created a system based on the distinguishing characteristics of each product and which allows follow-up investigations to be conducted should problems arise. If a problem does occur, a link is established with our food crisis management system, Aiming to eliminate accidents in warehouses and involving its which allows accurate information to be disseminated and responded to quickly. delivery vehicles as well as zero product accidents, the Nichirei Logistics Group holds regular training at the Safety and Quality Training Center and national contests for the purpose of improving Quality Assurance System for Diagnostic Drugs Based on ISO 13485 forklift driving skills, delivery driver skills and product knowledge. https://www.nichirei.co.jp/sites/default/files/ Overview of ISO 13485 ll-apan orklift riving ompetition Management responsibility inline-images/csr/report/2017/pdf/pdf_2017_007.pdf Management held once a year every three years ocial responsibility in management compliance with regulatory affairs and relevant laws apanese only Review ormulation of uality policy and strategy Having obtained ISO 13485* certification, the Product Realization Processes Resource international standard for quality management Customer-related Processes management nderstanding of customer reuirements Risk nfrastructure Management systems in medical devices, Nichirei Biosciences ustomer communications evel of satisfaction management raining nuiries including complaints representative is building a thorough quality assurance system. for ontrol of ISO cene from the competition promotion he international standard for uality management systems in the Design and development Production Logistics documents medical field covering the continuous manufacture and supply of records safe and useful medical devices and in vitro diagnostics. Measurement, analysis and improvement processes nternal audits onitoring and measurement of processes orrective and preventive actions articipants of the th contest which is held once a year udging of inspection skills

50 Initiatives to Resolve Social Issues Related SDG goals Building of Sustainable Supply Chains

We recognize that the procurement and securing of sustainable resources is extremely important for the Nichirei Group to provide value to society and for its own continued existence. We also recognize that it is important to respect the environment Introduction of sustainable palm oil (RSPO-certified palm oil) and human rights together with our stakeholders in the supply chains when conducting global business activities. In August 2018, the Nichirei Group joined the Roundtable on Sustainable Palm Oil (RSPO). We set human rights as one of the important initiatives in the Nichirei Group Sustainable Supply Chain Policy A non-proﬁt organization that promotes the production and use of sustainable palm oil, the RSPO established on April 1, 2017. We then established the Nichirei Group Human Rights Policy on April 1, 2019, to respect the ensures that palm oil production does not adversely affect rainforest conservation, the biodiversity basic human rights of all people involved in our business. inhabiting those rainforests and the lives of the people who depend on them. To promote sustainable In the years to come, we will continue to contribute to the realization of a sustainable society through efforts to resolve procurement throughout the supply chain, the Nichirei Group will support RSPO initiatives. 4-1055-18-100-00 social issues along our supply chains.

Human Right Policy Nichirei Group Sustainable Supply Chain Policy https://www.nichirei.co.jp/english/corpo/humanrightspolicy.html https://www.nichirei.co.jp/english/csr/supplychain Under the Nichirei Group’s corporate vision of “continuing to support good eating habits and health by leveraging our To work on building sustainable supply chains, the Nichirei Group undertakes the procurement of products and services in state-of-the-art manufacturing practices that optimize nature’s bounty, along with our leading-edge logistics services,” accordance with its policy and encourages its suppliers to understand the policy and put it into practice. we create new customer value and contribute to finding solutions to challenges facing our society, in an effort to be an indispensable member of society. Specific initiative activities (questionnaire survey and progress with major suppliers) * Fiscal years (FY) indicate years ended March 31. Recognizing that our business processes may have direct or indirect effect on human rights, we have established the 2018 201 Nichirei Group Human Rights Policy (hereafter referred to as the “policy”), based on the United Nations Guiding Principles on Business and Human Rights. This policy guides us in our efforts to fulfill our responsibility to respect human rights of all Nichirei Foods Shared Nichirei Group Sustainable Supply Analyzed questionnaire content Chain Policy with important suppliers in Japan Collected all stakeholders of our business. and overseas, conducted surveys in a questionnaires Visited some suppliers and Nichirei Fresh questionnaire format The policy is applicable to all employees and officers of the Nichirei Group. We will also require business partners to support the exchanged opinions 1. Scope policy and work towards ensuring respect for human rights.

In addition to our efforts to promote respect for human rights based on the United Nations Guiding Principles on Business and Initiatives toward ASC- and MSC-certified Marine Products Human Rights, the Nichirei Group supports and upholds the following international standards: 2. Basic Principles • The United Nations International Bill of Human Rights (the Universal Declaration of Human Rights and the International Covenants on Human Rights); https://www.nichirei.co.jp/sites/default/files/inline-images/english/csr/pdf/csr2018.pdf#page=27 • The International Labour Organization’s Declaration on Fundamental Principles and Rights at Work; and • The United Nations General Assembly Resolution: The United Nations Declaration on the Rights of Indigenous Peoples. Since 2006, Nichirei Fresh has been involved in the nature conservation Target area: Tarakan City, North Kalimantan Province, Indonesia initiative known as “Forest of Life Project” in Tarakan City, a joint effort 3. Identification of, The Nichirei Group will establish a system of human rights due diligence to identify, prevent and mitigate adverse impact on human rights generated by our group in society. Response to between Indonesia shrimp supplier PT. Mustika Minanusa Aurora (MMA) • If any business activities of the Nichirei Group cause adverse impact on human rights or if it is discovered that the Nichirei and Tarakan City in North Kalimantan that involves improving shrimp and Disclosure Group is involved in causing adverse impact on human rights through our business transactions with stakeholders and the like, Tarakan City we will take steps to provide a remedy based on internationally recognized processes. habitats and planting mangrove trees. of Issues Related to • The Nichirei Group will utilize the expertise and knowledge of independent, external human rights experts in implementing this The Forest of Life Project has engaged in traditional cultivation of policy and engage in earnest dialogue and consultation with stakeholders who may be affected by our business. Human Rights shrimp that does not use formula feed or electricity. In this cultivation • The Nichirei Group will specifically assign officers with responsibility in implementing the policy and monitor implementation of this policy. method, fry shrimp are released into cultivation ponds and raised on • The Nichirei Group will appropriately conduct education and training to ensure that this policy is being effectively implemented plankton and aquatic plants and fishing is performed using the ebb and across all business activities of the Nichirei Group. flow of the tide. In addition to actively expanding this shrimp raising • The Nichirei Group will regularly disclose results of and progress made in, our efforts to promote respect for human rights based on this policy. method, which has a low environmental impact, Nichirei Fresh donates a • The Nichirei Group will comply with all laws and regulations of countries and regions in which we conduct our business portion of its sales profits to MMA’s Mangrove Foundation. This foundation activities. Where there is a conflict between national laws/regulations and internationally recognized human rights standards, the Nichirei Group will seek ways to respect international human rights to the maximum extent possible. funds mangrove planting efforts in Tarakan City and has assisted with the hrimp that have grown big egeneration of mangrove trees recovery of regional ecosystems and environmental conservation. As of June 2019, Nichirei Fresh is handling 17 kinds of Nichirei Fresh products that have obtained Human Rights Due Diligence Review Begun Nichirei Foods Joins Sedex ASC/MSC certification (as of June 2019) MSC-certified1 natural marine products and three kinds of ASC-certified 2 ASC Certification Registry Number ASC-C-01632 marine products, in both cases one more product than last year. The Nichirei Group has begun to review its human rights due In July 2019, Nichirei Foods joined Sedex*, a global In the years ahead, we will continue to increase the number of ● lack tiger shrimp ● hiteleg shrimp ● acific oyster diligence in accordance with the United Nations Guiding corporate ethics information sharing platform. We will Principles on Business and Human Rights. Based on our continue to work on ethical and responsible business kinds of sustainable marine products we handle. MSC Certification Registry Number MSC-C-52165 commitment to human rights (Nichirei Group Human Rights practices in the global supply chain. ● almon varieties pink salmon king salmon coho salmon otes: 1. certification: atural marine products certified by the arine tewardship chum salmon sockeye salmon Policy), we will continue to communicate with external upplier thical ata xchange a non-profit organization established in the ouncil as having been cultivated in a sustainable manner ● latfish varieties amchatka flounder yellowfin sole dusky sole stakeholders through a series of processes. These will include nited ingdom in 200 to provide a platform for managing and sharing 2. certification: arine products certified by the uaculture tewardship white flounder corporate ethical information with the aim of realizing responsible business ouncil as having been cultivated in a sustainable manner ● alleye pollack ● acific cod ● callops ● erring ● apelins the identification and evaluation of human rights issues in ● now crabs ● rctic surf clams ● ed king crab practices in supply chains. edex currently has around 0000 companies / Nichirei Group supply chains, the planning and execution of organizations / factories / self-employed members in more than 28 he products that newly obtained the certification in 2020 initiatives, monitoring and information disclosure. industries in 150 countries.

51 Initiatives to Resolve Social Issues Related SDG goals Building of Sustainable Supply Chains

52 Initiatives to Resolve Social Issues Related SDG goals Environmental Impact

The Nichirei Group established a Group Environmental Policy focused on three priority issues: prevention of global warming, Climate Change Initiatives promoting sustainable recycling and living in harmony with nature. Nichirei Group activities span the entire supply chain; it is involved in food factories, logistics centers and other worksites. Eliminating CO2 Emissions from Transportation We thus play a part in the environmental impact resulting from the activities of our customers and business partners. Comparison of total transportation distances Tomakomai Port At the same time, since Group business activities that support food-related infrastructure depend on natural ecosystems https://www.nichirei.co.jp/sites/default/files/inline-images/english/csr/pdf/csr2018.pdf#page=2 Conventional Over Sea land routes (Hokkaido) for raw materials, our business is greatly affected by climate change. With its business interests in mind, the Group is engaged 1 After Promoting a modal shift implementation in the following activities together with its business partners. Since 2003, in a bid to reduce its environmental footprint, the Nichirei Logistics Group has been switching the means of transportation it uses from haulage by road Despite a 1.2 times ● Efficient energy use in the production of food products to that by rail and sea. And, in 2009, the ferry transportation route from Hokkaido to increase in total ● Reduction of greenhouse gases through increased efficiency in temperature-controlled storage and transportation transport distance, Kyushu was extended, resulting in a 30% reduction2 in CO emissions. ● Reduced impact of business activities on climate change through promoting the use of renewable energy, 2 CO2 emissions is reduced by 30%. from procurement and production, through to storage, logistics and sales It should be noted that Nichirei Foods has been certiﬁed under the Eco-Ship mark3 system. Ooarai Port The Nichirei Group’s Environmental Policy Then, to further reduce its CO2 emissions, the Nichirei Logistics Group’s (Ibaraki) https://www.nichirei.co.jp/english/csr/environment/concept.html Shinmoji Port The Nichirei Group’s Biodiversity-related Policy Netherlands subsidiary, Hiwa Rotterdam Port Cold Stores, uses barges4 rather than (Fukuoka) Ariake Port trucks. Since the company’s warehouse is adjacent to the quay, freight is moved (Tokyo) Environmental management system https://www.nichirei.co.jp/english/csr/environment/system.html from the container yard to the warehouse by barge, minimizing the use of trucks.

otes: 1. he conversion of road and air transportation by that by rail and sea.

2. he 30 reduction in 2 emissions due to modal shifts in apan is based on per-route calculations. Conventional: Overland Sea routes 3. his is a logo used to indicate those companies that contribute to environmental countermeasures. Reducing Environmental Impacts hey include shippers and logistics companies that make extensive use of sea transportation. After implementation: Overland Sea routes . barge is a cargo ship able to navigate rivers. Group’s medium-term environmental plan * Fiscal years (FY) indicate years ended March 31. Reducing Container and Group medium-term environmental plan targets (FY2020–FY2022) Applicable worksites Chlorofluorocarbon (CFC) Initiatives Packaging CO2 Emissions Natural refrigerants and leakage prevention Reduction of aintain 201 2 emission levels in 2022 Worksites in Japan Elimination of plastic CO2 emissions ower coefficient: ixed to the 201 coefficient The Nichirei Logistics Group uses natural refrigerants in both new refrigerated warehouses and facilities that it enlarges, while In a bid to reduce the discharge of CO2, Nichirei is working to Maintaining waste encouraging the replacement of equipment that uses CFC refrigerant reduce the amount of plastic in the packaging and containers eep a recycling rate of or higher Worksites in Japan recycling rate and with that which uses natural refrigerant. it uses. controlling waste In addition, since fiscal 2014, we have stepped up inspections • Yaki-Onigiri (grilled rice ball) 10-pack and Imagawa-Yaki educe residue of material derived from animal and plant discharging Food plants in Japan at distribution centers nationwide to reduce refrigerant leakage from (Japanese waffle) trays eliminated refrigerators and introduced highly sensitive detectors that are 10 • Honkaku-Itame Cha-Han (fried rice) package film thinned n consideration of the environmental conditions surrounding water in each times more accurate than conventional sensors. Water resource • Ebi-to-Cheese-no Gratin (shrimp gratin) and community the roup engages in water resource conservation through efficient Since September 2018, in collaboration with Hitachi, Ltd., we conservation Food plants in Japan Ebi-to-Cheese-no Doria (shrimp rice gratin) package water usage aimed at sustainable water usage have been testing methods of predicting and diagnosing refrigeration thickness reduced equipment failure. We have done this at our Funabashi Logistics Engaged in collecting data regarding the environment at overseas worksites Center, using cutting-edge IoT technology to enhance the operation of equipment and maintenance efficiency. By visualizing energy consumption data and analyzing operational improvements, Nichirei Group CO2 Emission Trends refrigeration equipment can be more efficiently operated. Approximately 20% Fixed power emission coefficient1 reduction by weight otes: Variable power emission coefficient2 Emission intensity 3 1. ixed power emission coefficient: he 2 Biodiversity Initiatives housands of tons of 2 ons of 2 per ton of production emission intensity unit of 0.12 t-2/h 00 1 announced by the ederation of lectric ower ompanies of apan in 2010 used nationwide. Protecting endangered orchids, biodiversity conservation 299 290 2. ariable power emission coefficient: ower 300 287 280 269 0.75 conversion coefficient used by power companies https://www.nichirei.co.jp/english/csr/environment/action/office 260 in fiscal year utilized at each worksite. 232 229 226 228 226 228 225 223 3. cope of power emission intensity: ichirei oods Since fiscal 2004, the Nichirei Group has helped in the conservation and regeneration of the endangered 200 0.5 ichirei oods-operated factories and affiliated orchid Cypripedium macranthos var. Kamanashi hotei and other species through research on and the factories in apan and ichirei resh affiliated breeding of, orchids and other plants in Fujimi-machi, Nagano Prefecture. 0.57 0.57 0.56 0.52 0.49 0.46 factories in apan. xcluding the following In fiscal 2015, some orchids of the genus Cypripedium macranthos var. Kamanashi hotei bore 100 factories: ichirei oods: ichirei ce nc. ichirei 0.25 flowers by artificial propagation and, in fiscal 2019, they produced 103 blooms. As a result, Nichirei resh: ichirei resh arm nc. resh hicken arumai nc. resh eat akudaira nc. entered into a biodiversity conservation partnership with the Fujimi-machi Cypripedium Macranthos 0 0 Regeneration Council in February 2019. 2010 201 2015 201 2017 2018 201 Under the three-year (April 1, 2019 to March 31, 2022) agreement, the Group will provide the technologies necessary for the conservation and regeneration of Cypripedium macranthos orchids and cover a portion of the costs.

53 Initiatives to Resolve Social Issues Related SDG goals Environmental Impact

The Nichirei Group established a Group Environmental Policy focused on three priority issues: prevention of global warming, Climate Change Initiatives promoting sustainable recycling and living in harmony with nature. Nichirei Group activities span the entire supply chain; it is involved in food factories, logistics centers and other worksites. Eliminating CO2 Emissions from Transportation We thus play a part in the environmental impact resulting from the activities of our customers and business partners. Comparison of total transportation distances Tomakomai Port At the same time, since Group business activities that support food-related infrastructure depend on natural ecosystems https://www.nichirei.co.jp/sites/default/files/inline-images/english/csr/pdf/csr2018.pdf#page=24https://www.nichirei.co.jp/sites/default/files/inline-images/english/csr/pdf/csr2018.pdf#page=2 Conventional Over Sea land routes (Hokkaido) for raw materials, our business is greatly affected by climate change. With its business interests in mind, the Group is engaged 1 After Promoting a modal shift implementation in the following activities together with its business partners. Since 2003, in a bid to reduce its environmental footprint, the Nichirei Logistics Group has been switching the means of transportation it uses from haulage by road Despite a 1.2 times ● Efficient energy use in the production of food products to that by rail and sea. And, in 2009, the ferry transportation route from Hokkaido to increase in total ● Reduction of greenhouse gases through increased efficiency in temperature-controlled storage and transportation transport distance, Kyushu was extended, resulting in a 30% reduction2 in CO emissions. ● Reduced impact of business activities on climate change through promoting the use of renewable energy, 2 CO2 emissions is reduced by 30%. from procurement and production, through to storage, logistics and sales It should be noted that Nichirei Foods has been certiﬁed under the Eco-Ship mark3 system. Ooarai Port The Nichirei Group’s Environmental Policy Then, to further reduce its CO2 emissions, the Nichirei Logistics Group’s (Ibaraki) https://www.nichirei.co.jp/english/csr/environment/concept.html Shinmoji Port The Nichirei Group’s Biodiversity-related Policy Netherlands subsidiary, Hiwa Rotterdam Port Cold Stores, uses barges4 rather than (Fukuoka) Ariake Port trucks. Since the company’s warehouse is adjacent to the quay, freight is moved (Tokyo) Environmental management system https://www.nichirei.co.jp/english/csr/environment/system.html from the container yard to the warehouse by barge, minimizing the use of trucks.

otes: 1. he conversion of road and air transportation by that by rail and sea.

54 Initiatives to Resolve Social Issues Related SDG goals Occupational Health and Safety

As the companies’ activities expand globally, Japanese society is undergoing significant structural changes. As the population ages, employment traditions change and work styles are revised, employee mental and physical health must be maintained, while creating safe and comfortable working environments if each employee is to fully demonstrate their abilities and potential. Nichirei Service Safety and Quality Training Center The Group considers its employees to be irreplaceable and so is working with them to create a safe, open work environment. Placing importance on quality, the environment and safety, the Nichirei Logistics Group has opened safety and quality training centers across Japan. Health and Safety Committee onfirming the These facilities enable logistics staff to acquire knowledge regarding safety usefulness of falling prevention and quality, as well as to develop skills and an appropriate mindset. https://www.nichirei.co.jp/sites/default/files/inline-images/english/csr/pdf/csr2018.pdf#page=52 euipment while The core training content includes “reconfirmation of basic knowledge suspended in midair through classroom learning,” information about “dangerous experiences” and The Nichirei Group established a Health and Safety Committee to fulfill the requirements of Japan’s Industrial Safety and the “reconfirmation of basic forklift operations.” Videos and illustrations are Health Law and strives to promote health and safety management aimed at preventing occupational accidents and used to enable students to develop an intuitive understanding of the topics. managing the health of employees. At our Head Office and each branch office, we strive to prevent long working hours and All training programs and teaching materials are original and veteran have no overtime and at food factories and refrigerated warehouses, we strive to reduce accidents as a major issue. This is employees with a wealth of knowledge and experience give lectures while in addition to other working environment improvement efforts we undertake, tailored to the conditions of each workplace. providing hands-on experience as part of a systematic curriculum. At logistics centers, heavy loads are carried using forklifts to enable Promoting Employee Health cargo to be sorted in upper floors. We thus strive to improve occupational pecialized course for developing the skill of confirming safety safety and quality by incorporating into the curriculum practical training to while driving a forklift using the point and call out method Based on our recognition that employee health is an important ensure that equipment is correctly used to prevent items from falling. management issue for a company aiming for sustainable growth, in Nichirei Group Health Declaration fiscal 2016 Nichirei established the Health Promotion Group as a dedicated health management section within the Human Resources Occupational Safety and Health Initiatives for Foreign Technical Interns Strategy & General Affairs. Cherishing the hope of In fiscal 2017, we formulated the Nichirei Group Health Declaration “Creating Savory Moments,” The Nichirei Group provides occupational safety- and health-related and Group Health Management Standards. In addition to disseminating training for technical interns from abroad. We are doing this to prevent as we state in our corporate occupational accidents and facilitate health management for those the declaration both inside and outside the Company, we have branding statement, appointed a holding company health promotion manager, as well as unfamiliar with life in Japan, while at the same time helping the health promotion managers and representatives at each operating we are working to improve the trainees improve their Japanese-language skills. Our goal is to create company. They promote health management within the Group. health of all our employees. workplaces where all Nichirei Group employees can work safely and Regular medical checkups, including X-ray screening for the early healthily with purpose. detection of TB, screening for cancer and thorough follow-up measures Basic policy Examples of Initiatives Conducted at Worksites are led by occupational health staff. We also implement health awareness activities and conduct stress 1. We will promote the creation of a vibrant • Posters displaying warnings and procedural instructions workplace through labor–management in various languages checks as part of our health checkups. In addition, we engage in a poster for ietnamese collaboration, based on the idea that mental Japanese language classes poster for apanese speech • employees contest variety of health promotion measures, including the Nichirei Health and physical health are the basis of School, an employee health-support program that incorporates the use meaningful work. of Nichirei Foods’ Kikubari Gozen frozen health management meals. 2. We will strive to create an environment in For our small offices which each employee enhances their health and overseas awareness and proactively promotes health. Nichirei Health School employees, we conduct 3. We will promote health management based remote interviews using on three pillars: health maintenance, mental n order to maintain and promote employee health since fiscal 2017 the roup has been ICT and smoking health measures and health and safety conducting the ichirei ealth chool a hands-on health support program. e provide management. cessation support specific health-related advice for employees at risk of certain lifestyle-related diseases. programs. n fiscal 201 approximately 00 employees participated in a special seminar where body composition and blood vessel age were measured.

The Certified Health and Productivity Management Acquired top spot in DBJ Employees’ Health Main Details Organization Recognition Program under the large enterprise Management Rated Loan Program Theme: Lifestyle disease prevention category 2019 for the third consecutive year ・ Lecture on pathophysiology (health nurse) ・ Meal improvement (how to choose familiar menus, etc.) (Administrative dietitian) ・ Exercise (posture, improvement of walking, exercise using chair) (exercise instructor)

55 Initiatives to Resolve Social Issues Related SDG goals Occupational Health and Safety

56 Initiatives to Resolve Social Issues Related SDG goals Improved Job Satisfaction, Workstyles

In 2017, the Nichirei Group formulated a Workplace Improvement Policy, reflecting the promise in the Nichirei Pledge to increase job satisfaction. By accepting different values and acting on a variety of ideas, we aim to create a vibrant workplace, Operational Innovations improve productivity and revitalize the organization. We are working to spread awareness and promote increased job satisfaction in each Group company by encouraging both the sharing of progress reports on measures being undertaken and The Use of Robots other information, as well as the horizontal deployment of effective measures at all Group companies. The Nichirei Logistics Group is promoting the introduction of robotic process automation (RPA) to innovate office operations. RPA allows Workplace Improvement Policy https://www.nichirei.co.jp/english/csr/work automation across applications through the use of computers even by those without programming knowledge; worksite employees have created and used original RPA scenarios on their own. orksite employees engaged in operation training mployees shall have a certain degree of freedom to choose their workplace and Provide working working hours to suit personal circumstances. ystems to maintain these conditions In fiscal 2019, when full-scale deployment of the process began and the goal was to convert 10,000 hours of human Enable Diverse condition options are to be put in place. labor to RPA each year, we actually converted 20,000 hours. In addition to resolving the problem of long working hours, the Working Styles Set up systems to ystems are to be established to prevent employees careers from being disrupted or time freed up by automated operations allows for a shift in emphasis from office operations to resources; strengthens prevent disruption of ended because of such circumstances as childbirth childcare nursing care poor communications with worksites; and allows sufficient time for staff to meet with visitors, including business partners. In employee careers health relocation of a spouse or disease. addition, the extra time available has made possible the creation of new added value operations and increased job hrough collaborative labor and management initiatives for workplace improvement Prevent excessive working hours working hours shall be limited to levels that allow each employee to demonstrate their satisfaction among all employees. ability and perform satisfying work in good health. In fiscal 2020, we aim to convert 180,000 hours of human labor into RPA and cultivate 100 more employees able to Promote the advancement emale employees shall be given the same opportunities as their male peers and create RPA scenarios. of female employees offered necessary training in recognition of their value to the ichirei roup.

Provide stimulating ob positions and employment opportunities for people with disabilities shall be Ensure Equal employment opportunities created to allow them to earn a living through stimulating work with a vision to Providing Equal Opportunities Opportunity for people with disabilities ultimately eliminate the distinction between people with or without disabilities in society. Create employment s people live longer healthy lives opportunities shall be created to allow older opportunities people to play an active role in the workplace by drawing on their particular skills Participation by Women for older people bearing in mind individual working styles and values.

As part of its effort to promote the participation of women The Human Assets Committee, which promotes the increased job satisfaction-related part of the Nichirei Pledge, meets twice in the workplace, the Logistics Group held the sixth each year. Human The Diversity Promotion Conference, under the Group Human Assets Committee, meets with labor and management twice Sakaseru Roji-Jo Forum in January 2019. Sixty-one Assets a year to monitor measures undertaken at each Group company in relation to human rights, job satisfaction, the workstyle of female employees from each region across the country Committee each employee, support for active participation in the workforce by women, the employment of foreigners, workstyles that differ gathered to learn about the background, current status according to life stage and age, as well as the employment of and collaboration with, the disabled. and future prospects of efforts promoting women’s active Sakaseru Roji-Jo Forum participation in the workplace. For the ﬁrst time, senior employees, including men, attended in 2019. The president of each Nichirei Group operating company is responsible for building systems that develop optimal human assets Human for the Company. The forum acknowledged people’s values with regard to work, as well as the need to create networks among Assets These measures are reviewed annually, as required by the education and training policies of each operating company, while employees in each region through discussions regarding participant work values and the creation of workplaces where Development related plans and their results are monitored by the Group Human Assets Committee, which meets twice each year. women can work in ways that best suite them. In ﬁscal 2019, Nichirei Foods held seminars for female employees in collaboration with other food manufacturers. These seminars included SPIRAL UP!, a diversity forum aimed at building awareness and LADY, GO UP!, a seminar aimed at • New employee training, first career training • Facilitation training • Nursing care seminars Level-Based Objective-Based building external networks and career development. (1-3 years after joining the Company) • Career development programs for female Training Training • Management training • New officer seminars employees Work for Seniors Workplaces for the Disabled

Workstyle Diversity In 2002, the Nichirei Group set up the Senior Staff System to The Group encourages the employment of provide employment opportunities for employees on retirement. people with disabilities, 30 of whom work at In-House Childcare Facility After reaching the retirement age of 60, those wishing to our special subsidiary, Nichirei Aura. continue working may do They are engaged in a wide range of In April 2018, Nichirei opened an in-house daycare center at its Head Office, located in so until the age of 65. At operations, including the cleaning of the head the Tsukiji district of Tokyo’s Chuo Ward. This is one of the Group’s workstyle reforms, present, we employ more office and food factories located at Group designed to enable the early return to work by those employees raising children and to than 100 senior members companies, as well as office interiors within our support a work–life balance. of staff, whose experience logistics centers and the maintenance of green In an effort to assist members of the community, by helping alleviate the problem of and knowledge contribute spaces. The Group will continue to create long waiting lists at childcare facilities, we are also accepting a fixed number of local to Group development. comfortable working environments for aycare children visit the workplace children at the daycare center. ecture on frozen foods during a virtual individuals with disabilities. factory tour

57 Initiatives to Resolve Social Issues Related SDG goals Improved Job Satisfaction, Workstyles

58 Financial Data

11-year Financial Highlights ichirei orporation and onsolidated ubsidiaries energy 2012 RISING 2015 POWER UP 2018 or the years ended arch 31 FY2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Fiscal Year:

et sales illions of yen 7515 38111 37808 531 7012 51118 513 535351 5357 58032 580,141

ross profit illions of yen 87328 8757 8735 818 173 321 73782 81085 111 2838 93,215

perating income illions of yen 1512 181 181 1177 1732 1578 170 21583 230 287 29,511

rofit before income taxes illions of yen 1132 1380 880 1225 1301 15357 15871 2000 27818 2237 29,540

rofit attributable to owners of parent illions of yen 020 0 0 70 823 888 51 1371 18751 107 19,943

apital expenditures illions of yen 1883 2385 22110 1228 13171 201 2171 1175 13887 252 24,132

epreciation and amortization illions of yen 13738 1350 1158 178 1302 175 1521 155 1057 1155 17,481

expenditures illions of yen 211 18 180 17 1817 107 1730 100 155 18 2,359

End of Fiscal Year:

otal assets illions of yen 2872 277 2852 20537 2703 318507 3201 3387 315 3875 377,257

otal liabilities illions of yen 170 15802 1813 171837 172582 1810 18728 18273 1817 185 193,451

nterest-bearing debt illions of yen 1105 8572 77 782 882 1007 10770 57 8778 775 95,951

excluding lease obligations illions of yen 870 020 727 7833 7503 85718 87313 7551 708 78 78,923

Cash Flows:

ash flows from operating activities illions of yen 15282 3335 1727 115 23525 11073 27803 37032 0828 285 31,311

ash flows from investing activities illions of yen 170 13555 1822 1222 10 1750 2232 1 115 202 (17,918)

ree cash flows illions of yen 52 170 55 73 131 57 51 22535 2382 58 13,393

ash flows from financing activities illions of yen 1085 33323 1 7583 73 2580 08 20351 21883 137 (9,088)

Per Share Data:

et assets yen 357.85 385.7 377.08 3.33 30.7 .31 51.3 1057.00 115.52 1221.0 1,326.81

rofit yen 1.2 2.2 13.08 2.35 33.0 31.12 33.2 .30 135.11 12.23 149.65

ash dividends yen 10 10 10 2 28 30 32

Financial Ratios:

perating margin 3.2 3.8 3.8 3. 3.8 3.1 3.3 .0 5. 5.3 5.1

eturn on euity 5.3 7. 3. .8 8.2 . .8 .1 12.1 11. 11.7

rice earnings ratio times 18.0 12.0 27.1 1.7 1.8 1.0 1. 1. 20. 20.7 18.2

ebt-to-euity times 1.0 0.7 0.8 0.8 0.8 0.8 0.7 0. 0.5 0. 0.5

excluding lease obligations times 0.8 0.5 0. 0. 0. 0. 0. 0.5 0. 0.5 0.4

uity ratio 38. 3.1 0. 0.2 1.3 1. 3.0 . .0 .1 46.9

otes: he company implemented the share consolidation of which two shares were consolidated into one share as of ctober 1 201. t the beginning of 2015 assuming the share consolidation would occur we calculated the amount of net assets per share and the profit per share.

59 Financial Data