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EDINET submission documents
Tohoku Chemical Co., Ltd. (E02810)

Securities report
【cover】
【Documents to be submitted】 Securities report
[Basic provisions] Article 24, Paragraph 1 of the Financial Instruments and Exchange Act
[Submit to] Director of Tohoku Finance Bureau
【Filing date】 December 21, 2023
[Business year] 72nd term (from October 1, 2022 to September 30, 2023)
【Company Name】 Tohoku Chemical Co., Ltd.
[English translation name] TOHOKU CHEMICAL CO., LTD.
[Representative's title and name] Representative Director and President Yasuyuki Higashi
[Location of main store] Oaza Kanda 1-3-1, Hirosaki City, Aomori Prefecture
【telephone number】 0172(33)8131 (Representative)
[Administrative contact name] Executive Officer Management Group General Affairs Manager Shunichi Soma
[Nearest contact point] Oaza Kanda 1-3-1, Hirosaki City, Aomori Prefecture
【telephone number】 0172(33)8131 (Representative)
[Administrative contact name] Executive Officer Management Group General Affairs Manager Shunichi Soma
[Place available for public inspection] Tokyo Stock Exchange, Inc.
(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo)
*Tohoku Chemical Co., Ltd. Tokyo Branch
(1-8-15 Iwamotocho, Chiyoda-ku, Tokyo)
(note) *Although the location marked with * is not a location that should be made available for public inspection pursuant to the
provisions of the Financial Instruments and Exchange Act, it is provided for the convenience of investors.
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Securities report
Part 1 [Company information]
Part 1 [Company overview]
1 [Trends in major management indicators, etc.]
(1) Consolidated management indicators, etc.
Next time 68th term 69th term 70th term 71st term 72nd term
Fiscal year month September 2019 September 2020 September 2021 September 2022 September 2023
amount of sales (1,000 yen) 31,013,852 31,040,674 36,221,463 37,333,902 35,094,627
Ordinary profit (1,000 yen) 329,620 410,247 758,809 1,003,410 808,356
Attributes to parent company shareholders

(1,000 yen) 221,485 378,152 516,726 657,620 556,194
net income
comprehensive income (1,000 yen) 138,529 388,455 780,232 492,613 691,258
Net assets amount (1,000 yen) 5,362,319 5,653,500 6,281,712 6,681,448 7,269,089
Total assets (1,000 yen) 14,751,536 14,586,145 16,128,570 17,519,610 18,920,740
Net assets per share (circle) 5,693.08 6,023.38 6,829.86 7,330.63 7,971.19
Net income per share (circle) 236.30 404.57 564.91 728.76 617.29
― ― ― ― ―
After adjusting for potential shares
(circle)
Net income per share
Capital adequacy ratio (%) 36.2 38.5 38.6 37.7 38.0
return on equity (%) 4.2 6.9 8.7 10.2 8.1
stock price earnings ratio (times) 12.7 8.3 6.1 4.4 6.0
Due to sales activities
(1,000 yen) △ 765,065 440,571 322,336 886,122 1,268,726
Cash flow
due to investment activities
(1,000 yen) △ 142,752 204,919 △ 171,787 △ 92,009 △ 335,385
Cash flow
due to financial activities
(1,000 yen) △ 14,904 △ 511,498 △ 220,999 △ 185,642 △ 95,518
Cash flow
cash and cash equivalents
(1,000 yen) 596,438 730,432 659,982 1,268,452 2,106,274
Ending balance
number of employees (given name) 309 314 316 321 321
(Note) 1 Diluted net income per share is not stated as there are no diluted shares. “Accounting Standards for Revenue Recognition” (Corporate
2 Accounting Standards No. 29, March 31, 2020), etc. have been applied from the beginning of the 71st fiscal year, and the main management
indicators, etc. from the 71st fiscal period onwards will be the same. The indicators are after applying accounting standards, etc.
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(2) Management indicators, etc. of the submitting company
Next time 68th term 69th term 70th term 71st term 72nd term
Fiscal year month September 2019 September 2020 September 2021 September 2022 September 2023
amount of sales (1,000 yen) 24,337,132 24,386,966 27,788,121 28,359,730 27,384,835
Ordinary profit (1,000 yen) 318,201 380,267 633,394 845,864 738,646
net income (1,000 yen) 213,795 355,571 424,319 546,903 495,150
capital (1,000 yen) 820,400 820,400 820,400 820,400 820,400
Total number of issued shares (KK) 960,000 960,000 960,000 960,000 960,000
Net assets amount (1,000 yen) 5,259,293 5,523,065 6,033,321 6,296,054 6,805,255
Total assets (1,000 yen) 11,704,284 11,662,206 12,990,293 14,076,734 15,180,079
Net assets per share (circle) 5,610.97 5,917.64 6,615.32 6,987.67 7,552.81
Dividend amount per share 90.00 90.00 105.00 115.00 105.00

(circle)
(Interim dividend amount per share) (-) (-) (-) (-) (-)
Net income per share (circle) 228.09 380.41 463.89 606.07 549.54
― ― ― ― ―
After adjusting for potential shares
(circle)
Net income per share
Capital adequacy ratio (%) 44.9 47.4 46.4 44.7 44.8
return on equity (%) 4.1 6.6 7.3 8.9 7.6
stock price earnings ratio (times) 13.2 8.8 7.4 5.3 6.8
Dividend payout ratio (%) 39.5 23.7 22.6 19.0 19.1
number of employees (given name) 226 228 230 236 244

Total shareholder return (%) 86.1 98.2 103.9 100.7 117.7
(Comparison indicator: including dividends (%) (89.6) (94.0) (119.9) (111.3) (144.5)
TOPIX)
highest stock price (circle) 3,645 3,630 4,120 3,600 4,000
lowest stock price (circle) 2,650 2,700 2,966 3,100 3,050
(Note) 1 Diluted net income per share is not stated as there are no diluted shares. The highest and lowest stock
2 prices are those on the Tokyo Stock Exchange (Standard Market) from April 4, 2022, and before that, they are
on the Tokyo Stock Exchange JASDAQ (Standard).
3 “Accounting Standards for Revenue Recognition” (Corporate Accounting Standards No. 29, March 31, 2020), etc. have been applied from the beginning of the 71st fiscal
year, and the main management indicators, etc. from the 71st fiscal period onwards will be the same. The indicators are after applying accounting standards, etc.
4 The dividend per share for the 70th term of 105.00 yen includes a 70th anniversary commemorative dividend of 15 yen.
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2 [History]
year and month matter
February 1953 Established Tohoku Chemical Co., Ltd. in Kitagawaragacho, Hirosaki City, Aomori Prefecture for the purpose of selling industrial chemicals.
By obtaining a license for the general sales of poisonous and deleterious substances, we began selling toxic and deleterious chemical and industrial chemicals in addition to general industrial
August 1954
chemicals.
June 1955 Started sales of pharmaceuticals by obtaining permission for pharmaceutical wholesale and general sales business.
January 1963 Opened Hachinohe Sales Office (currently Hachinohe Branch) in Hachinohe City, Aomori Prefecture.
January 1968 Opened Aomori Sales Office (currently Aomori Branch) in Aomori City, Aomori Prefecture.
April 1975 Opened Tokyo branch in Chuo-ku, Tokyo
September 1976 Started sales of high pressure gas by obtaining permission for high pressure gas sales business.
March 1979 Opened Odate Sales Office in Odate City, Akita Prefecture.
June 1980 Opened Akita Sales Office (currently Akita Branch) in Akita City, Akita Prefecture.
August 1981 Head office relocated to Hirosaki City, Aomori Prefecture (current location)
Established Tooku Kaken Co., Ltd. (currently Asunaro Riken Co., Ltd. (currently a consolidated subsidiary)), a wholly owned subsidiary, for the purpose of manufacturing industrial
June 1983
chemicals.
January 1984 Opened Yamagata Sales Office (currently Yamagata Branch) in Higashine City, Yamagata Prefecture.
January 1984 Opened Morioka Sales Office (currently Iwate Branch) in Morioka City, Iwate Prefecture.
June 1985 Tsuruoka branch office (currently Tsuruoka sales office) opened in Tsuruoka city, Yamagata prefecture.
July 1985 Moved Morioka office to Kitakami City, Iwate Prefecture and changed name to Iwate Branch.
August 1988 Established a subsidiary, Tohoku System Co., Ltd. (currently a consolidated subsidiary), for the purpose of developing software and selling personal computers.
March 1989 Established Toka Jisho Co., Ltd., a wholly owned subsidiary, for the purpose of managing land and buildings owned by the company.
April 1989 Sendai branch opened in Kurokawa District, Miyagi Prefecture.
December 1989 Tokyo branch moved to Chiyoda-ku, Tokyo (current location)
October 1992 Merged with 100% subsidiary Toka Jisho Co., Ltd.
April 1993 Mutsu Ogawara Sales Office opened in Kamikita District, Aomori Prefecture.
June 1995 Stocks registered over-the-counter (listed) with the Japan Securities Dealers Association (currently Osaka Securities Exchange JASDAQ (Standard))
May 1996 A development department was established for the purpose of planning, developing and researching new products.
December 1996 Opened Yonezawa office in Yonezawa City, Yamagata Prefecture.
December 1998 Relocated the Odate office to a new building in Odate City, Akita Prefecture (current location)
January 2002 Receive ISO14001 certification
April 2003 Opened Morioka Sales Office in Morioka City, Iwate Prefecture.
July 2003 Established the Life Systems Information Research Institute in Morioka City, Iwate Prefecture.
Cancelled over-the-counter registration with the Japan Securities Dealers Association and listed shares on the JASDAQ Securities Exchange (currently Osaka Securities Exchange
December 2004
JASDAQ (Standard))
April 2007 Acquired 100% of the shares of Hokusei Chemical Co., Ltd., a reagent sales company located in Morioka City, Iwate Prefecture, and made it a subsidiary.
April 2010 Nichiei Tokai Co., Ltd., a clinical testing reagent sales company, becomes an equity method affiliate.
October 2012 Nichiei Tokai Co., Ltd., a clinical testing reagent sales company, becomes a consolidated subsidiary.
July 2013 Due to the merger of the Osaka Stock Exchange and the Tokyo Stock Exchange, shares were listed on the Tokyo Stock Exchange (JASDAQ (Standard)).
May 2014 Opened Fukushima Sales Office in Fukushima City, Fukushima Prefecture.
April 2016 Merged with 100% subsidiary Hokusei Chemical Co., Ltd.
December 2017 Transition to new ISO14001:2015 standard
October 2019 Life Systems Information Research Institute Sendai office opened in Sendai City, Miyagi Prefecture.
Due to a review of the Tokyo Stock Exchange's market classification, the market will transition from the Tokyo Stock Exchange's JASDAQ (Standard Market) to the
April 2022
Standard Market.
April 2023 Merged with 100% subsidiary Tohoku System Co., Ltd.
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3 [Business content]
The Company and its consolidated subsidiaries consist of Tohoku Kagaku Yakuhin Co., Ltd. (the Company) and two subsidiary companies, and its business primarily involves the
sale of industrial chemicals, clinical testing reagents, foods, agricultural chemicals, and related equipment. We are developing businesses such as incidental maintenance services.
The positioning of the business of the Company and its consolidated subsidiaries and the relationship with the segments are as follows.
Segment name Main items Main companies
Soda industrial chemicals, organic chemicals, inorganic chemicals

Our company
chemical industrial chemicals products, semiconductor chemicals, synthetic resin functional chemicals,
Asunaro Riken Co., Ltd.
Epidemic prevention insecticides, etc.
chemical industrial chemicals
Analytical equipment, educational equipment, measuring equipment, pollution

Chemical industry drug related equipment Our company
Prevention equipment, machine tools, etc.
General test reagents/hematological test reagents

Drugs, biochemical test reagents, endocrinology Our company
clinical test reagents
Test reagents/Immune serology test reagents Nichiei Tokai Co., Ltd.
Medicines, bacteriological test reagents, etc.
clinical test reagents
Medical equipment, laboratory testing equipment, medical consumables

Our company
Clinical test reagent related equipment Products, dedicated consumables, testing consumables, medical use
Nichiei Tokai Co., Ltd.
Sanitary materials etc.
Food additives, food raw materials, food processing machines Our company
food Food and related equipment
Vessels etc. Nichiei Tokai Co., Ltd.
Pesticides, soil improvement materials, seeds, and gardening supplies Our company
others Agrochemicals and related equipment
Materials, fertilizers, agricultural products, flowers, etc. Asunaro Riken Co., Ltd.
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The positioning of the business of the Company and its consolidated subsidiaries and the relationship with the segments are as follows.
(Note) All subsidiaries are consolidated subsidiaries.
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4 [Status of affiliated companies]
capital or voting rights

Main business
name address Capital Ownership percentage Related content
contents of
(1,000 yen) (%)
(consolidated subsidiary)
Selling industrial chemicals to our company
Asunaro Riken Co., Ltd. Hirakawa City, Aomori Prefecture 40,000 chemical industrial chemicals 100.0 Doing.
Concurrent positions of officers (3 people)
We supply clinical test reagents from our company.
clinical test reagents I am putting it in.

82.6
Nichiei Tokai Co., Ltd.
Nerima Ward, Tokyo 95,000
(Note) 2, 4 food We provide debt guarantees.
Concurrent officer positions (1 person)
(Note) 1 The names listed in the segment information are listed in the main business description column. It is
2 a specified subsidiary.
3 No companies have submitted securities registration statements or securities reports. Regarding Nichiei Tokai Co., Ltd., sales
4 (excluding internal sales between consolidated companies) account for more than 10% of consolidated sales.
Main profit and loss information, etc. ① Sales 7,742,503 thousand yen
② Ordinary profit 73,511 thousand yen
③ Net income 59,919 thousand yen
④ Net assets amount 515,209 thousand yen
⑤ Total assets 3,743,399 thousand yen
5 [Employee status]
(1) Status of consolidated companies
As of September 30, 2023
Segment name Number of employees (people)
chemical industrial chemicals 74
clinical test reagents 73
food 15
others 6
Company-wide (common) 153
total 321
(Note) 1 The number of employees is the number of employed persons.
2 Company-wide (common) includes general affairs, accounting, systems, logistics, business departments, and research and development groups.
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(2) Status of the submitting company
Number of employees (people) Average age (years) Average length of service (years) Average annual salary (thousand yen)
244 45.4 17.1 4,869
Segment name Number of employees (people)
chemical industrial chemicals 69
clinical test reagents 33
food 6
others 2
Company-wide (common) 134
total 244
(Note) 1 The number of employees is the number of employed persons.
2 Average annual salary includes bonuses and non-standard wages.

3 Company-wide (common) includes general affairs, accounting, systems, logistics, business departments, and research and development groups.
(3) Status of labor unions
Our company and our consolidated subsidiaries do not have a labor union. Additionally, labor-management relations are smooth.
(4) Percentage of female workers in managerial positions, rate of childcare leave taken by male workers, and wage differences between male and female workers
① Submitting company
Current fiscal year
to management position of male and female workers

of male workers
occupy Wage difference (%) (Note 1)
childcare leave
female worker
percentage (%)
Acquisition rate (%) Regular employment part·
all workers
(Note 1)
(Note 2) Worker fixed-term worker
5.1 50.0 62.0 63.6 65.4

(Note) 1 Calculated based on the provisions of the "Act on Promotion of Women's Participation and Advancement in the Workplace" (Act No. 64 of
2015).
2 Based on the provisions of the `Àct on the Welfare of Workers Taking Child Care or Family Care through Childcare Leave, Nursing Care Leave, etc.'' (Act
No. 76 of 1991), ``Welfare of Workers Taking Childcare or Family Caregiving Through Childcare Leave, Nursing Care Leave, etc.'' The ratio of childcare
leave, etc. taken under Article 71-4, Item 1 of the `Ènforcement Regulations of the Ministry of Labor Ordinance No. 25 of 1991'' is calculated.
② Consolidated subsidiary
Current fiscal year
to management position of male and female workers

occupy of male workers Wage difference (%) (Note)
name female worker Childcare leave acquisition rate
percentage (%) (%) Regular employment part·

all workers
(note)
Worker fixed-term worker
Asunaro Riken Co., Ltd. 25.0 ― 67.6 0.0 72.0
Nichiei Tokai Co., Ltd. 6.3 ― 81.8 84.3 87.2

(Note) Calculated based on the provisions of the "Act on Promotion of Women's Participation and Advancement in the Workplace" (Act No. 64 of 2015).
Masu.
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Securities report
2nd [Business status]
1 [Management policy, business environment, issues to be addressed, etc.]
Matters regarding the future contained herein are based on judgments made by the Company and its consolidated subsidiaries as of the end of the current consolidated fiscal year. (1)
Management policy
Since our establishment, our company and our consolidated subsidiaries have adopted the following management philosophy: 1. We
value our customers 2. We value people 3. We contribute to society 4. We aim to enrich lives. Aiming to improve customer satisfaction, we
will strive to provide abundant information, speedy delivery, and after-sales service to our customers, and aim to run a dynamic
organization with the participation of all employees.
(2) Management strategy, etc.
The Company and its consolidated subsidiaries utilize headwork, footwork, and networks to hone their ability to communicate with customers,
suppliers, and other business partners, earn profits, and eliminate unnecessary, wasteful, and uneven spending. We aim to improve productivity by
thoroughly increasing labor productivity.
In addition, as a sales policy, we will be able to expand gross profit margins, avoid risks by diversifying suppliers, and diversify proposals to customers, keeping in mind the deepening of
existing businesses, improving the quality of business operations, and discovering and nurturing diversification related to our core business. We will act as a company.
The three-year medium-term management plan is updated and formulated every year. The first year of the three-year medium-term management plan is the first year of the
short-term management plan.
(3) Objective indicators, etc. for determining the status of achievement of management goals
The Company and its consolidated subsidiaries had sales of 32.3 billion yen (down 8.0% from the previous fiscal year), operating income of 440 million yen (down 41.4% from
the previous fiscal year), and ordinary income of 490 million yen. (down 39.4% compared to the previous consolidated fiscal year) and net income attributable to owners of
parent company of 320 million yen (down 42.5% compared to the previous consolidated fiscal year).
(4) Management environment and business and financial issues that should be addressed on a priority basis
Although it is difficult for the Company and its consolidated subsidiaries to predict the future status of the infection and the timing of the end of the virus
regarding the Russia-Ukraine issue and the new coronavirus infection, the impact on the business performance of the Company and its consolidated subsidiaries
is limited. Based on this assumption, our management policy for the fiscal year ending September 2024 is to achieve further growth, strive to improve corporate
value, and build a company that can respond to digital promotion, SDGs, corporate governance, etc. in the external environment. We will aim for this.
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2 [Thoughts and initiatives regarding sustainability]

The Company and its consolidated subsidiaries' philosophy and efforts regarding sustainability are as follows.
Please note that matters regarding the future in this text are based on judgments made by the Company and its consolidated subsidiaries as of the end of the current consolidated fiscal year.
(1) Concept of sustainability

Our company and its consolidated subsidiaries have a business philosophy of ``1. We value our customers, 2. We value people, 3. We contribute to
society, and 4. We aim to enrich lives.'' Our mission is to put our management philosophy into practice through the development of businesses that solve
the problems and concerns of our customers, including private companies, government agencies, hospitals, and universities that are responsible for
social infrastructure.
The Company and its consolidated subsidiaries will work to ``create and contribute to better local communities'' by putting our management philosophy into
practice, as this will not only help solve social issues, but also lead to employment and the creation of new markets.
① Improving sustainable corporate value
The Company and its consolidated subsidiaries have been working as a trading company group specializing in chemistry and medical care, with the core
businesses of chemical industrial chemicals and clinical testing reagents, in order to respond accurately to changes in the times, society, and market needs. We
have established the foundation of our business. In the process of working to resolve various social issues, we will continue to constantly review our business
portfolio and create new value that is not bound by existing business frameworks, which will help us and our consolidated subsidiaries to sustainably increase
their corporate value. We believe that this will contribute to We will continue to take on the challenge of creating new value and recognize the importance of
conducting business activities that are considerate of the environment and human rights, including throughout the value chain.
② Consideration for environmental issues
The Company and its consolidated subsidiaries recognize global environmental issues such as climate change as one of the risks, and in 2002 acquired ISO 14001
certification, an international standard for environmental management systems, and are committed to minimizing the burden on the environment. We are responding to
changes in the business environment.
③ Initiatives for human capital management
The Company and its consolidated subsidiaries aim to evolve and develop their existing business model of being a trading company group specializing in
chemicals and medical care, and to become an indispensable presence in society. To achieve this goal, we believe that securing and developing human resources
is important. In addition, it is essential for the Company and its consolidated subsidiaries to plan and implement human resources strategies and create an
environment that allows each employee to maximize their abilities, regardless of race, gender, religion, nationality, age, etc. By developing human resources
strategies tailored to business characteristics, the Company and its consolidated subsidiaries are working together to improve corporate value.
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(2) Sustainability initiatives
① Governance
a. Supervision by the board of directors
The Company and its consolidated subsidiaries regularly report and discuss their sustainability initiatives to the Board of Directors. Additionally,
the Company has a structure in which the sustainability of the Company and its consolidated subsidiaries is effectively supervised from the
perspective of society and a third party through discussions at the Board of Directors, including outside directors. The content of discussions at
Board of Directors meetings is shared and fed back to business execution, and is used to improve initiatives. b. Risk management committee as an
executive function
The Company and its consolidated subsidiaries consider sustainability-related issues to be a type of risk, and have established a Risk
Management Committee to promote sustainability management. The Risk Management Committee is chaired by the person in charge of risk
management in accordance with the Risk Management Regulations, and discusses and exchanges opinions on various sustainability-related
agendas, including responses to SDGs. The Risk Management Committee examines and presents the direction of sustainability for the Company and
its consolidated subsidiaries as a whole, and coordinates related initiatives.
② Human resource development policy
The Company and its consolidated subsidiaries aim to develop human resources who can flexibly solve problems with advanced specialized knowledge and skills in response to changes in the economy and
society.
1. Target management
The company creates and supports goals and planned action programs to encourage individuals to improve their abilities. 2.
Employee education
Regarding employee education, we will systematically develop human resources by acquiring knowledge and skills through rank-specific training, job-
specific training, and theme-specific training, with a focus on on-the-job training (OJT).
3. Seminars, training sessions, etc.
Employees will be encouraged to actively participate in seminars, training sessions, etc. for the purpose of acquiring knowledge and skills. After taking the course, create
and manage the course record.
4. Qualification system
We will actively strive to obtain qualifications required for the company's work. We also provide support to enhance the spirit
of taking on challenges.
5. Achieving gender equality
We will actively promote increasing the ratio of women in management positions and hiring, training, and promoting women.
6. Philosophy of SDGs
Based on the philosophy of SDGs, we will develop human resources who can contribute to the sustainable development of society and the company.
③ Process of strengthening human capital
In our daily activities, we constantly ask questions and come up with new ideas, which leads to independent action. By disseminating information from the
head office division to each site, we will continue to build on our daily efforts to establish a corporate culture and continuously strengthen our human capital.
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④ Environmental improvement policy
The Company and its consolidated subsidiaries are conscious of the local environment, aim to harmonize with the global environment through business activities, and work to preserve the
environment and prevent pollution.
In particular, we will focus on the following items.
1. Compliance with environmental laws and regulations
We comply with environmental laws, ordinances, agreements with local communities, industry norms, etc. 2.
Promotion of environmentally friendly products, systems, and services
We deliver environmentally friendly products, systems, and services to our customers. 3.
Prevention of pollution
We will be careful about the leakage of hazardous chemicals and strive to prevent pollution of the global environment.
4. Energy saving/resource protection
We strive to save energy, conserve resources, recycle, and reduce waste. 5. Improve
operational efficiency
We will review efficient logistics operations, business activities, and sales activities and actively promote operational efficiency. 6. Environmental
education and awareness activities
We carry out educational and enlightenment activities to raise the environmental awareness of our employees and to practice environmentally friendly behavior. 7.
continuous improvement
We strive to continuously improve the suitability, validity, and effectiveness of our environmental management system in order to improve our
environmental performance.
8. Prevention of global warming
In order to prevent global warming, we will actively implement measures to reduce carbon dioxide. 9.
Disclosure of environmental policy
This policy will be disseminated to all employees and internal staff, and will be made public outside the company.
⑤ Risk management
a. Identification and assessment of sustainability-related risks and opportunities
The Company and its consolidated subsidiaries constantly monitor the risks posed to their business by changes in the social situation and business environment, such as
environmental and social measures and legislation. Business risks and opportunities related to environmental and social sustainability in the management and business
activities of the Company and its consolidated subsidiaries are reported as appropriate at the Risk Management Committee, which is held monthly in principle, and reviewed
from a sustainability perspective. Comprehensive analysis and deliberation are being carried out.
b. Managing sustainability-related risks and opportunities
The Company and its consolidated subsidiaries manage sustainability-related risks and opportunities associated with business operations. At the Company
and its consolidated subsidiaries, management policies and investments, loans, guarantees, businesses, etc. that affect management are discussed, and
important matters are discussed and information shared at the Risk Management Committee as necessary. It has been decided. Please note that such decisions
are managed by the Company and its consolidated subsidiaries.
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3 [Business risks]
Among the matters related to the business status, accounting status, etc. described in the securities report, management recognizes that there is a possibility
that they may have a significant impact on the consolidated company's financial status, operating results, and cash flow status. The major risks we face are as
follows.
Please note that matters regarding the future in this text are based on judgments made by the Company and its consolidated subsidiaries as of the end of the current consolidated fiscal year.
(Things related to specific legal regulations, etc.)
As a pharmaceutical wholesaler, the Company and its consolidated subsidiaries handle various pharmaceuticals and related products. For this reason, each business
establishment must obtain the necessary permits, registrations, designations, and licenses from the prefectural governor, mainly in accordance with the provisions of the "Act on
Assuring the Quality, Efficacy, and Safety of Pharmaceuticals and Medical Devices, etc." Alternatively, we engage in sales activities after notifying the regulatory authorities. If we
fail to comply with these regulations, the activities of the Company and its consolidated subsidiaries may be restricted. (Healthcare price standards)
Ethical drugs, which are the main products handled by the Company and its consolidated subsidiaries, are listed in the NHI drug price standards, which
determine the range of drugs that can be used under insurance medical care and the prices charged for the drugs used. Therefore, NHI drug price standards
function as an upper limit on selling prices.
The drug price standards are, in principle, revised once every two years to reflect the prevailing market prices, and are lowered each
time. As a result, the upper limit of selling prices will decrease each time the drug price standards are revised, which will have an impact on
sales.
(Risks due to bad debts)

For specific receivables, such as receivables in doubt, the collectability of such receivables is examined individually, and the estimated uncollectible amount is recorded in the
allowance for doubtful accounts. However, if the possibility of collection is not expected due to future deterioration of the customer's financial condition, additional reserves may
be required, which may cause a deterioration in profits.
(Risk of new coronavirus infection)

Some of the businesses of the Company and its consolidated subsidiaries include products and services that are affected by economic fluctuations, so if market conditions change significantly
due to changes in the economic environment caused by the novel coronavirus infection, there may be a significant impact on the business results of the Company and its consolidated
subsidiaries. may have an impact.
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4 [Analysis of financial position, operating results, and cash flow status by management]
Matters regarding the future contained herein are based on judgments made by the Company and its consolidated subsidiaries as of the end of the current consolidated fiscal year.
(1) Overview of business results, etc.
A summary of the financial position, operating results, and cash flows (hereinafter referred to as `òperating results, etc.'') of the Company and its consolidated
subsidiaries for the current consolidated fiscal year is as follows.
① Financial condition and business performance status
During the fiscal year ended March 31, 2019, Japan's economy showed signs of recovery as vaccinations against the novel coronavirus
disease progressed. However, due to soaring prices of raw materials and energy due to Russia's prolonged invasion of Ukraine, and the
bankruptcy of financial institutions in the United States, the future remains uncertain and the situation is unpredictable.
Amid these economic conditions, the Company and its consolidated subsidiaries have strengthened their corporate structure and conducted aggressive sales activities in order to respond to
changes in the business environment.
As a result, compared to the previous fiscal year, sales decreased by 35,094 million yen to 2,239 million yen (-6.0% compared to the
previous fiscal year), and operating income decreased to 750 million yen. Ordinary profit decreased by 808 million yen, 195 million yen
(down 19.4% from the previous fiscal year). Net income attributable to owners of the parent company was 556 million yen, a decrease of
101 million yen (-15.4% compared to the previous fiscal year).
Results by segment are as follows. (Chemical

industrial chemicals)
Sales of chemicals and industrial chemicals were lower than in the previous fiscal year, as the electronics industry, including our mainstay semiconductors,
continued to face difficult conditions due to product shortages and a ban on exports to China. Sales of related equipment also decreased compared to the
previous fiscal year. As a result, overall sales decreased by 834 million yen to 17,171 million yen (-4.6% compared to the previous fiscal year), and segment profit
(gross profit) decreased to 1,511 million yen. yen and 72 million yen (-4.6% compared to the previous fiscal year). (clinical test reagent)
Sales of clinical test reagents decreased compared to the previous fiscal year due to the impact of intensified competition and a decrease in test
reagents related to the new coronavirus infection. Sales of related equipment also decreased compared to the previous fiscal year. As a result, overall
sales decreased to 14,205 million yen, 1,432 million yen (-9.2% compared to the previous fiscal year), and segment profit (gross profit) decreased to
1,512 million yen. yen and 64 million yen (-4.1% compared to the previous fiscal year).
(food)
Food products were affected by raw material shortages and a decrease in production due to the novel coronavirus infection, but sales exceeded
the previous fiscal year. As a result, sales increased by 41 million yen to 3,348 million yen (1.3% compared to the previous fiscal year), and segment
profit (gross profit) increased by 9 million yen to 260 million yen. (3.6% increase compared to the previous fiscal year).
(others)
Sales of other products decreased compared to the previous fiscal year due to a decrease in sales of flowers, seeds, etc. As a result, sales decreased by 14
million yen to 369 million yen (-3.7% compared to the previous fiscal year), and segment profit (gross profit) decreased to 59 million yen, 0 million yen ( Profit
decreased by 0.3% compared to the previous fiscal year.
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Securities report
② Cash flow status
Cash and cash equivalents (hereinafter referred to as ``funds'') at the end of the current consolidated fiscal year were 2,106 million yen, an increase of 837 million yen
compared to the end of the previous consolidated fiscal year.
(Cash flow from operating activities)

Funds acquired as a result of operating activities at the end of the current consolidated fiscal year amounted to 1,268 million yen (886 million yen was acquired
in the previous consolidated fiscal year). This was mainly due to an increase in trade receivables of 221 million yen, an increase in trade payables of 841 million
yen, and net income before taxes and minority interests of 804 million yen. This is due to a number of things.
(Cash flow from investing activities)

Funds spent as a result of investment activities at the end of the current consolidated fiscal year amounted to 335 million yen (an expenditure of 92 million yen in the previous
consolidated fiscal year). This was mainly due to expenditures of 248 million yen for the acquisition of intangible fixed assets and expenditures of 100 million yen for the
acquisition of tangible fixed assets.
(Cash flow from financing activities)

Funds used as a result of financing activities at the end of the current consolidated fiscal year amounted to 95 million yen (compared to 185 million yen used in
the previous consolidated fiscal year). This was mainly due to dividends paid of 103 million yen.
③ Production, orders and sales results
Purchasing and sales results by segment for the current consolidated fiscal year are as follows.
1 Purchase record
Segment name Amount (thousand yen) Year-over-year basis(%)
chemical industrial chemicals 15,787,519 96.0
clinical test reagents 12,549,624 88.6
food 3,087,787 101.1
others 287,310 91.0
total 31,712,241 93.3
(note) The amount is based on the purchase price.
2 Sales results
Segment name Amount (thousand yen) Year-over-year basis(%)
chemical industrial chemicals 17,171,570 95.4
clinical test reagents 14,205,429 90.8
food 3,348,048 101.3
others 369,579 96.3
total 35,094,627 94.0
Sales status by major customer
There are no major customers (accounting for 10% or more of total sales).
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Securities report
(2) Contents of analysis and consideration regarding the status of business results, etc. from the perspective of management The following is the understanding, analysis, and consideration of the status
of business results, etc. of the Company and its consolidated subsidiaries from the perspective of management.
Please note that matters regarding the future in this text have been determined as of the end of the current consolidated fiscal year.
① Significant accounting estimates and assumptions used in those estimates
The consolidated financial statements of the Company and its consolidated subsidiaries have been prepared in accordance with accounting standards generally
accepted in Japan. The preparation of these consolidated financial statements requires estimates and forecasts that may affect the operating results and other
conditions for the current consolidated fiscal year. The Company and its consolidated subsidiaries continually make estimates and forecasts based on assumptions
that are judged to be reasonable based on past performance and circumstances, and actual results may differ from these estimates. Masu.
Regarding the impact of the new coronavirus infection, we are currently continuing business activities at each of our
business locations after implementing strict measures. However, the new coronavirus infection has had a major impact on
economic activity, and it is difficult to predict how it will spread in the future and when it will end. Accounting estimates are
made on the assumption that the impact will continue for a certain period thereafter.
② Recognition and analysis/considerations regarding financial condition and operating results a.
Analysis of financial position
The analysis of the financial position for the current consolidated fiscal year is based on a comparison with the previous consolidated fiscal year.
(current assets)
Current assets at the end of the current consolidated fiscal year were 13,618 million yen (12,709 million yen in the previous fiscal year), an increase
of 909 million yen. This was mainly due to increases of 787 million yen in cash and deposits and 155 million yen in notes receivable, accounts
receivable-trade and contract assets.
(Fixed asset)
Fixed assets at the end of the current fiscal year were 5,302 million yen (4,810 million yen in the previous fiscal year), an
increase of 492 million yen. This was mainly due to an increase of 221 million yen in software suspense account and 199 million
yen in investment securities.
(Current Liabilities)
Current liabilities at the end of the current fiscal year were 10,872 million yen (10,085 million yen in the previous fiscal year), an
increase of 787 million yen. This was mainly due to an increase of 822 million yen in notes and accounts payable. (Fixed liabilities)
Fixed liabilities at the end of the current consolidated fiscal year were 778 million yen (753 million yen in the previous fiscal year), an increase of 25 million yen.
This was mainly due to an increase in deferred tax liabilities of 53 million yen, although long-term loans payable decreased by 14 million yen and lease obligations
decreased by 13 million yen.
(Net assets)
Net assets at the end of the current fiscal year were 7,269 million yen (6,681 million yen in the previous fiscal year), an increase
of 587 million yen. This was mainly due to an increase of 452 million yen in retained earnings and 118 million yen in unrealized
gain on other securities.
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Securities report
b. Analysis of business results
Sales for the current fiscal year were 35,094 million yen, an increase of 2,239 million yen (compared to the previous fiscal year).
△ 6.0%) decreased. This was due to semiconductor-related companies experiencing product shortages, the impact of export bans to China, and a decrease in
sales of PCR-related equipment and reagents.
Gross trading profit decreased by 128 million yen (3.7% compared to the previous fiscal year) to 3,344 million
yen, due to a decrease in sales.
Selling, general and administrative expenses were 2,593 million yen, an increase of 64 million yen (2.6% compared to the previous fiscal
year).
Operating income was 750 million yen, a decrease of 193 million yen (20.4% compared to the previous fiscal year) due
to a decrease in gross trading profit.
Non-operating income and expenses were 67 million yen, an increase of 3 million yen compared to the previous fiscal year, and non-operating expenses were
10 million yen, an increase of 5 million yen compared to the previous fiscal year. This total increased to 57 million yen, a decrease of 2 million yen (-3.4% compared
to the previous fiscal year).
Ordinary income was 808 million yen, a decrease of 195 million yen (-19.4% compared to the previous fiscal
year).
Regarding extraordinary gains and losses, extraordinary profit was 0 million yen, a decrease of 1 million yen compared to the previous consolidated fiscal year, and extraordinary loss was 3 million yen, a decrease
of 26 million yen compared to the previous consolidated fiscal year. The total was -3 million yen, compared to the previous consolidated fiscal year, 25 million yen (in the previous consolidated fiscal year,
△ 28 million yen).
As a result, net income attributable to owners of the parent company decreased by 101 million yen (-15.4% compared to the
previous fiscal year) to 556 million yen.
③ Contents of analysis and consideration of cash flow status, information regarding capital resources and liquidity of funds a.
Analysis and consideration of cash flow status
The details of the analysis and consideration of the cash flow situation are included in "(1) ② Cash flow
Overview of operating results, etc. - Low status".
b. Capital resources and liquidity

The main working capital requirements for the business activities of the Company and its consolidated subsidiaries are product purchases and operating expenses such as
selling, general and administrative expenses. Demand for funds for investment purposes is primarily due to capital expenditures.
The Company and its consolidated subsidiaries have a basic policy of ensuring stable liquidity and sources of funds necessary for business
operations. Based on this policy, we will make efficient use of cash on hand and supplement this by procuring long-term working capital and capital
investment funds from financial institutions, and short-term working capital from financial institutions. This is covered by short-term loans.
The Company and its consolidated subsidiaries have sufficient borrowing capacity from financial institutions, and believe that it will be possible for the Company and its consolidated
subsidiaries to continue to raise the funds necessary to maintain, expand, and operate their businesses. .
As of the end of the current consolidated fiscal year, the balance of interest-bearing debt, including borrowings and lease obligations, was 576 million yen, and
the balance of cash and cash equivalents was 2,106 million yen.
17/98

Securities report
5 [Important management contracts, etc.]
Merger with Tohoku System Co., Ltd.
At the Board of Directors meeting held on November 14, 2022, the Company decided to merge with Tohoku System Co., Ltd., a consolidated
subsidiary of the Company, with the aim of further improving management efficiency as part of structural reforms. Ta.
The outline of the merger agreement is as follows.
(1) Method of merger
An absorption-type merger method in which the Company is the surviving company and Tohoku System Co., Ltd. is the dissolving company.
(2) Shares and allocation to be issued upon merger
Since Tohoku System Co., Ltd. is a wholly owned subsidiary of the Company, there will be no allotment of shares or delivery of money or anything else
upon this merger.
(3) Date of merger
April 1, 2023
(4) Status of inherited assets and liabilities
The Company will merge all assets, liabilities, rights and obligations based on Tohoku System Co., Ltd.'s balance sheet as of March 31, 2023, and other
calculations as of the same date, with any increases or decreases up to the time of the merger added. The transfer will be made on the due date.
assets Amount (thousand yen) liabilities Amount (thousand yen)
current assets 14,791 Current Liabilities 6,744
Fixed asset 934 Fixed debt 208

Total assets 15,725 Total debt 6,952
(5) Overview of the company that will survive the absorption-type merger
capital 820 million yen
Business details We primarily sell industrial chemicals, clinical testing reagents, foods, agrochemicals, and related equipment, and also provide maintenance services
and other services incidental to these products.
6 [Research and development activities]
Not applicable.
18/98

Securities report
3rd [Equipment status]
1 [Summary of capital investment, etc.]
(Common throughout the company)
The main capital investment for the current consolidated fiscal year was a total of 455 million yen, mainly for software in progress account, which is the development cost for
the next core system.
2 [Status of major equipment]

(1) Submitting company
Book value (thousand yen)

Office name number of employees
Segment name Equipment details
(location) building land (given name)
Leased asset others total

and constructs (Area ㎡)
main office 254,725
All segments Head office function 110,633 11,989 739,207 1,116,554 74
(Hirosaki City, Aomori Prefecture) (11,044.87)
92,884
(Hirosaki City, Aomori Prefecture) ― idle land ― ― ― 92,884 ―
(3,365.51)
Hachinohe branch 146,526
All segments Sales operations 27,760 15,882 2,148 192,318 32
(Hachinohe City, Aomori Prefecture) (2,959.39)
5,000
(Hachinohe City, Aomori Prefecture) ― idle land ― ― ― 5,000 ―
(699.00)
Aomori branch 127,980
All segments Sales operations 72,745 9,103 5,339 215,170 twenty one
(Aomori City, Aomori Prefecture) (2,304.69)
Mutsu Ogawara Office 53,534
chemical industrial chemicals Sales operations 21,971 561 56 76,124 Four
(Rokkasho Village, Aomori Prefecture) (3,244.55)
Tokyo branch 23,377
chemical industrial chemicals Sales operations 12,031 0 0 35,409 11
(Chiyoda Ward, Tokyo, etc.) (14.75)
Akita branch 65,967
12,057 14,792 352 93,169 20
Sales operations
(Akita City, Akita Prefecture) clinical test reagents (1,302.30)
Odate Office 30,000
19,310 15,690 682 65,683 13
Sales operations
(Odate City, Akita Prefecture) clinical test reagents (1,675.91)
Iwate Branch 51,000
chemical industrial chemicals Sales operations 6,290 4,989 0 62,279 7
(Kitakami City, Iwate Prefecture) (2,248.10)
Life Systems Information Research Institute
― ― 173 ― 173 6
Sales support
(Morioka City, Iwate Prefecture) clinical test reagents
Morioka Office
chemical industrial chemicals Sales operations 314 ― 2,760 335 3,410 11
(Morioka City, Iwate Prefecture)
96,959
(Morioka City, Iwate Prefecture) ― idle land ― ― ― 96,959 ―
(2,310.02)
Yamagata branch 48,614
chemical industrial chemicals Sales operations 9,091 8,185 1,706 67,597 Ten
(Higashine City, Yamagata Prefecture) (1,983.66)
Tsuruoka Office 55,530
chemical industrial chemicals Sales operations 29,279 9,572 1,299 95,682 6
(Tsuruoka City, Yamagata Prefecture) (1,354.66)
Yonezawa Office 29,234
chemical industrial chemicals Sales operations 8,688 323 ― 38,245 3
(Yonezawa City, Yamagata Prefecture) (1,323.13)
Sendai branch 75,484
All segments Sales operations 5,771 10,634 48 91,938 twenty two
(Yamato Town, Kurokawa District, Miyagi Prefecture) (3,409.00)
Life Systems Information Research Institute
― ― ― ― ― 1
Sales support
(Sendai, Miyagi Prefecture) clinical test reagents
Fukushima office
chemical industrial chemicals Sales operations ― ― 3,115 ― 3,115 3
(Fukushima City, Fukushima Prefecture)
12,630
(Otawara City, Tochigi Prefecture) ― idle land ― ― ― 12,630 ―
(1,924.00)
1,169,449
total 335,947 107,774 751,177 2,364,348 244
(41,163.54)
(Note) 1 “Other” in the book value is the amount of tools, furniture and fixtures, vehicles and transportation equipment, and software suspense
2 accounts. Idle land in Hirosaki City, Hachinohe City, Otawara City, and Morioka City is land acquired for business use. There are no major
3 rental facilities.
19/98

Securities report
(2) Domestic subsidiary
Book value (thousand yen)

Company Name number of employees
Segment name Equipment details
(location) building land (given name)
Leased asset others total

and constructs (Area ㎡)
Asunaro Riken Co., Ltd. 70,109
chemical industrial chemicals Sales operations 4,509 33,557 1,812 109,989 14
(Hirakawa City, Aomori Prefecture) (12,473.03)
Nichiei Tokai Co., Ltd. clinical test reagents 273,828

198,018 32,046 17,587 521,481 63
food
Sales operations
(Nerima Ward, Tokyo) (853.68)
343,937
total 202,528 65,604 19,400 631,470 77
(13,326.71)
(Note) 1 “Other” in the book value is the amount of tools, furniture and fixtures, vehicle transportation equipment, software, and software suspense
accounts.
2 There are no major rental facilities.
3 [Plans for new equipment installation, retirement, etc.]
Capital investments by the Company and its consolidated subsidiaries are determined by comprehensively considering economic trends, industry trends, investment efficiency, etc.
The plans for new construction and removal of important equipment as of September 30, 2023 are as follows.
(1) New installation of important equipment, etc.
Planned investment amount

Office name Segment name Scheduled for completion
Equipment details Funding method Start date
name
Company Name
(location) total amount Amount already paid year and month
(1,000 yen) (1,000 yen)
clinical test reagents 2021 2023

core system
submission main office
500,000 287,130 Own resources
company (Hirosaki City, Aomori Prefecture) food December October
others
(Note) The amount paid includes the software suspense account.
(2) Removal of important equipment, etc.
There are no plans for the retirement of important equipment that have been newly finalized during the current consolidated fiscal year.
20/98

Securities report
Section 4 [Status of the submitting company]
1 [Status of stocks, etc.]

(1) [Total number of shares, etc.]
① [Total number of shares]
kinds Total number of authorized shares (shares)
common stock 2,928,000
total 2,928,000
② [Issued shares]
As of the end of the fiscal year As of submission date

Listed financial instruments exchange name or
kinds Number of issues (shares) Number of issues (shares) Content
Registered authorized financial instruments business association name
(September 30, 2023) (December 21, 2023)
Tokyo Stock Exchange Number of shares per unit is 100

common stock 960,000 960,000
standard market It's a stock.
total 960,000 960,000 ― ―
(2) [Status of stock acquisition rights, etc.]
① [Contents of stock option system]

Not applicable.
② [Contents of rights plan]

Not applicable.
③ [Status of other stock acquisition rights, etc.]
Not applicable.
(3) [Exercise status, etc. of corporate bonds with stock acquisition rights with exercise price revision
clauses, etc.] Not applicable.
(4) [Trends in total number of issued shares, capital, etc.]
Issued shares Issued shares Increase/decrease in capital Capital balance capital reserve capital reserve
date Total
Total number increase/decrease number balance Increase/decrease amount Balance
(KK) (KK) (1,000 yen) (1,000 yen) (1,000 yen) (1,000 yen)
April 1, 2018
△ 3,840,000 960,000 ― 820,400 ― 881,100
(note)
(note) Based on the resolution of the 66th Ordinary General Meeting of Shareholders held on December 20, 2017, we implemented a reverse stock split on April 1, 2018,
converting 5 shares of our common stock into 1 share. As a result, the total number of outstanding shares decreased by 3,840,000 shares to 960,000 shares.
21/98

Securities report
(5) [Status by owner]
Stock status (100 shares per unit)

Less than a unit
classification government and Foreign corporations, etc. Stock status

Other
local public financial institution
financial products individual
total (KK)
trader Corporation others
group non-individual individual
― Five 11 29 Four ― 739 788 ─

Number of shareholders
(Man)
― 1,192 49 2,193 19 ― 6,136 9,589 1,100

Number of shares owned
(unit)
― 12.4 0.5 22.9 0.2 ― 64.0 ─

100.00
percentage (%)
(Note) Of the 58,977 shares of treasury stock, 589 units are included in "Individuals and others" and 77 shares are included in "Status of shares less than one unit."
(6) [Status of major shareholders]

Issued shares
(Treasury stock
Number of shares owned except. )of
name or name address
(KK) against the total number
percentage (%)
Tohoku Chemical Supplier Stock Holding Association 1-3-1 Kanda, Hirosaki City, Aomori Prefecture 74,200 8.2
Tohoku Chemical Employee Stock Ownership Association 1-3-1 Kanda, Hirosaki City, Aomori Prefecture 52,240 5.8
Tokyo Small and Medium Enterprise Investment Development Co., Ltd. 3-29-22 Shibuya, Shibuya-ku, Tokyo 50,800 5.6
Aomori Bank, Ltd. 1-9-30 Hashimoto, Aomori City, Aomori Prefecture 44,800 5.0
Michinoku Bank, Ltd. 1-3-1 Katsuta, Aomori City, Aomori Prefecture 44,800 5.0
Yasuo Higashi Hirosaki City, Aomori Prefecture 44,560 5.0
Yasuyuki Higashi Hirosaki City, Aomori Prefecture 26,800 3.0
Nippon Soda Co., Ltd. 2-2-1 Otemachi, Chiyoda-ku, Tokyo 22,000 2.4
Sysmex Corporation 1-5-1 Wakihama Kaigandori, Chuo-ku, Kobe City, Hyogo Prefecture 20,400 2.3
Tosoh Nickemi Co., Ltd. 2-5-10 Shiba, Minato-ku, Tokyo 20,000 2.2
total - 400,600 44.5
22/98

Securities report
(7) [Status of voting rights]
① [Issued shares]
classification Number of shares (shares) Number of voting rights (pieces) Content
Non-voting shares ― ― ―
Stocks with restricted voting rights (treasury stock, etc.) ― ― ―
Stocks with restricted voting rights (other) ― ― ―

(Treasury stock)
Stocks with full voting rights (treasury stock, etc.) common stock ― ―
58,900
common stock
Full voting shares (other) 9,000 ―
900,000
common stock
Shares less than one unit ― Stocks less than 1 unit (100 shares)
1,100
Total number of issued shares 960,000 ― ―
Voting rights of all shareholders ― 9,000 ―
(Note) 1 All shares in the "Stocks with full voting rights (treasury stock, etc.)" column are treasury stock owned by the Company.
2 The common stock in the "Stocks less than one unit" column includes 77 treasury shares owned by the Company.
② [Treasury stock, etc.]

Issued shares
Self-name Someone else's name Number of shares owned
Owner's name against the total number
owner address sum of
or name
Number of shares owned Number of shares owned
(KK) (KK) (KK)

percentage (%)
― 6.1
Oaza Kanda, Hirosaki City, Aomori Prefecture
Tohoku Chemical Co., Ltd. 58,900 58,900
1-3-1
total ― 58,900 ― 58,900 6.1
23/98

Securities report
2 [Status of acquisition of treasury stock, etc.]

[Type of stock, etc.] common stock
(1) [Status of acquisition by resolution of general meeting of shareholders]
Not applicable.
(2) [Status of acquisition by resolution of the Board of Directors]
Not applicable.
(3) [Contents that are not based on a resolution at a general meeting of shareholders or a resolution at a board of directors
meeting] There are no applicable matters.
(4) [Processing status and holding status of acquired treasury stock]
Current fiscal year Current period
classification
Total disposal price Total disposal price
Number of shares (shares) Number of shares (shares)
(circle) (circle)
Recruited people to take on the job.

― ― ― ―
Acquired treasury stock
Acquired treasury stock that has been canceled ― ― ― ―

Merger, stock exchange, stock delivery,
Transferred due to company split ― ― ― ―
Acquired treasury stock
others ― ― ― ―
Number of treasury shares held 58,977 ― 58,977 ―
(note) The number of treasury shares held during the current period does not include the number of shares acquired through the purchase of shares constituting less than one unit from
December 1, 2023 to the date of filing the securities report.
24/98

Securities report
3 [Dividend policy]
Our company considers maintaining stable dividends to our shareholders as an important management policy, and our policy
is to continue to improve our return on equity. We will also respond to our shareholders by pursuing even greater profits.
Our basic policy is to pay dividends from surplus twice a year: an interim dividend and a year-end dividend. The decision-making body for dividends is the board of directors
for interim dividends, and the general meeting of shareholders for year-end dividends.
Regarding dividends for the current fiscal year, in accordance with the above policy, we would like to reduce the ordinary dividend by 10
yen to 105 yen per share.
Regarding the use of internal reserves, we will focus on maintaining and strengthening our future competitiveness and expanding our
management base.
Regarding interim dividends, the Articles of Incorporation stipulate that ``the Company's interim dividends may be paid with March 31st
of each year as the record date by resolution of the Board of Directors.''
(Note) Dividends of surplus whose record date falls in the current fiscal year are as follows.
Resolution date Total amount of dividends (thousand yen) Dividend per share (yen)
December 20, 2023

94,607 105.00
Ordinary general meeting of shareholders resolution
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Securities report
4 [Status of corporate governance, etc.]

(1) [Overview of corporate governance]
① Basic philosophy regarding corporate governance The Company aims to strengthen its corporate competitiveness through prompt decision-making,
enhance management check systems, and maintain management transparency. We are working to build an effective corporate governance system
by clarifying the responsibilities and authority of the directors' "management monitoring function" and the executive officers' "business execution
function."
② Overview of the corporate governance system and reasons for adopting the system -
Overview of the corporate governance system
In 2014, we clarified the functional division of management decision-making and business execution from a long-term perspective, and introduced an executive officer
system to strengthen management and executive functions. We have clarified the responsibilities and authority of the "monitoring function" and the "business execution
function" of executive officers. We have also established a supervisory system consisting of corporate auditors and a board of corporate auditors, which audits the execution of
duties by directors as an independent body mandated by shareholders.
We have established a board of executive officers and a company-wide general meeting as advisory bodies that report directly to the board of directors. The Executive Officers' Committee is
comprised of executive directors, executive officers, and heads of major head office departments, and meets four times a year. Additionally, the company-wide management meeting is held
eight times a year, with fewer members than the Executive Officers' Meeting.
Our company is building an internal control system that improves management transparency and ensures thorough compliance with laws and regulations, and allows us to quickly respond to changes in the
business environment.
The Company has adopted a corporate auditor system, in which the Board of Directors and the Board of Corporate Auditors supervise and monitor the execution of business, and also holds management
meetings to deliberate on budgets and other matters. Additionally, we have established a Corporate Planning Office to further enhance our business execution functions and strengthen our management structure
to respond quickly to changes in the environment, and we have established an Internal Control and Audit Office, an organization under the direct control of the President and Representative Director, to strengthen
our internal control functions. We conduct systematic internal audits.
·Reasons for adopting a corporate governance system
Recognizing that the fundamentals of corporate governance are increasing corporate value through improved management transparency and thorough
compliance with laws and regulations, we will respond swiftly to changes in the business environment while ensuring shareholder rights and interests. We have
adopted the current governance system as one that can ensure management transparency and legal compliance.
In addition, we hold regular executive officer meetings to share information, consider issues faced by each group and office, and take measures.
③ Other matters related to corporate governance
·Development status of internal control system
Basic concept regarding internal control system and its development status
The Company executes the duties of Directors in accordance with the Board of Directors Regulations established by the Board of Directors, various regulations related to
Directors or the Board of Directors, and business operation rules, thereby establishing the Company's compliance system. .
If a director discovers any violation of laws and regulations in the course of business execution, he or she shall report it to the President and
Representative Director without delay, and at the most recently held Board of Directors meeting or management meeting. I'm here. In addition, in
this case, the director concerned promptly reports this to the corporate auditors.
In addition, based on the Internal Control and Audit Regulations, the Internal Control and Audit Office, which reports directly to the President and Representative Director, conducts internal audits covering all business operations based
on the internal audit plan formulated at the beginning of the fiscal year, and reports the audit results to the President and Representative Director and all directors. The Company reports to the Board of Directors and the Board of Corporate
Auditors.
In order to ensure the appropriateness of operations of group companies, the management group carries out necessary management according to the situation of the subsidiaries based
on the "Subsidiary and Affiliated Company Management Regulations."
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Securities report
·Status of development of risk management system
We have appointed a person in charge of risk management in accordance with our risk management regulations, which aim to develop a management
system to prevent the occurrence of risks that may occur in our company, and to respond to risks that have occurred, and have established a Risk Management
Committee. We have established a company-wide system to prevent risks from materializing.
The person in charge of risk management and the Risk Management Committee shall implement risk management effectively and efficiently, and promptly report to the
Internal Control Committee when it is determined that there is an act that impedes the execution of the company's business. We have ordered a review and are taking
necessary measures to correct the conduct.
Our corporate governance structure diagram is as follows.
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Securities report
④ Activities of the Board of Directors
In principle, the Board of Directors meets once a month to discuss basic matters related to business execution in order to speed up decision-making. In
addition, management meetings are held regularly to report on important matters related to business execution and to discuss matters related to management,
and decisions on basic matters related to business execution are made in a flexible manner.
During the current fiscal year, the Company held meetings of the Board of Directors 13 times a month, and the attendance status of individual directors is as
follows.
full name Number of times held Number of attendance
Yasuo Higashi 13 13
Yasuyuki Higashi 13 13
Masahiro Kon 13 13
Manabu Shimazu 13 13
Sato Ino 13 13
Wataru Nishibori 13 13
Osamu Takada 13 13
Eiji Ito 13 13
Hidehiko Yashima 13 13
Takasugi Tei Ten Ten
(Note) Outside Director Takasugi The number of times Mr. Sadao's board of directors meetings were held and attendance is based on his appointment at the regular general meeting of shareholders to be held on December 20, 2022.
Displays the number of board meetings held since then.
The Board of Directors actively discusses various management issues such as management strategy, corporate governance, and sustainability,
priority issues in major businesses, and business execution as specific matters considered by the Board of Directors.
⑤ Decision-making body for dividends of surplus, etc.
In order to pay continuous and stable dividends from the perspective of focusing on returning profits to shareholders, the Company sets September 30th of each year as the record date by
resolution of the Board of Directors pursuant to the provisions of Article 454, Paragraph 5 of the Companies Act. The Articles of Incorporation stipulate that interim dividends may be paid.
⑥ Acquisition of treasury stock
In order to implement flexible capital policy, the Company's Articles of Incorporation stipulate that pursuant to the provisions of Article 165, Paragraph 2 of the Companies Act, the Company
may acquire its own shares through market transactions, etc. by resolution of the Board of Directors. .
⑦ Requirements for special resolution at general meeting of shareholders
The Company aims to facilitate the deliberation of special resolution matters at the general meeting of shareholders, and resolutions pursuant to the provisions of Article 309, Paragraph 2 of the Companies Act
require a vote of one-third of the voting rights of shareholders who can exercise their voting rights. The Articles of Incorporation stipulate that shareholders with at least 100% of the voting rights must attend the
meeting and hold at least two-thirds of their voting rights.
⑧ Fixed number of directors
Our articles of incorporation stipulate that the number of directors shall be no more than 10.
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Securities report
⑨ Requirements for resolution for appointment of directors
The Company's Articles of Incorporation stipulate that resolutions for the election of directors of the Company shall be made by a majority vote in the presence of shareholders holding one-
third or more of the voting rights of the shareholders eligible to exercise their voting rights. In addition, the Articles of Incorporation stipulate that resolutions for the election of directors shall not
be made by cumulative voting.
⑩ Exemption of liability for directors, etc.
In order to enable directors and corporate auditors to fully fulfill their expected roles in the execution of their duties, the Company has, by resolution of the Board of Directors, increased
liability for damages for directors and corporate auditors as stipulated in Article 423, Paragraph 1 of the Companies Act. The articles of incorporation stipulate that exemptions may be granted
within certain limits.
⑪ Summary of the contents of the officer liability insurance contract
The Company has concluded an officer liability insurance contract with an insurance company as stipulated in Article 430-3, Paragraph 1 of the
Companies Act, under which all directors and auditors are insured. The insurance contract provides for damages and litigation costs incurred by the
insured due to claims for damages arising from acts (including omissions) committed by the insured based on his or her position as an officer of the
company. etc. will be compensated.
In addition, we will pay all insurance premiums.
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Securities report
(2) [Status of officers]
① List of officers
Male: 14 Female: (% of female executives)

Job title date of birth
(KK)
full name Biography term of office
April 1982 Join our company
November 1982 Director of our company
February 1984 Managing Director of the Company

director
east Yasuo Born February 2, 1948 January 1987 President and Representative Director of our company
(Note)3 44,560
chairman
December 2009 Chairman of the Board of the Company (current position)
April 2019 External Rena Science Co., Ltd.

Director (current)
October 2010 Join our company
April 2014 Director of Corporate Strategy Office of the Company
December 2014 Executive Officer and Head of Corporate Strategy Office of the Company
CEO December 2015 Senior Executive Officer and Head of Corporate Strategy Office of the Company
president east Yasuyuki Born September 26, 1980 April 2016 Senior Executive Officer of the Company, Assistant to Sales Supervisor (Note)3 26,800
Also in charge of management and Director of Corporate Strategy Office
December 2017 Director, Senior Executive Officer, Sales Division of the Company
Assistant to General Manager and Head of Corporate Strategy Office
December 2019 Representative Director, President and Chief Management Officer of the Company
(current position)
April 1996 Sales Manager, Sendai Branch of our company
April 2001 Director of the Company, Manager of Sendai Branch
December 2002 Director, Sendai Branch Manager of the Company
April 2006 Director, Sendai Branch Manager and Sales Manager of the Company
Head of 2nd Group, Coordination Department
December 2007 Managing Director and Sendai Branch Manager of the Company
Business Management Department 2nd Group Manager
director now Masahiro Born February 7, 1953 October 2009 Managing Director of the Company, Second Sales Group
(Note)3 4,960
length
December 2009 Senior Managing Director of the Company, Second Sales Group
length
April 2013 Senior Managing Director, Head of Sales of the Company
December 2013 Senior Managing Director and Senior Managing Executive Officer of the Company
Business management
December 2019 Director of the Company (current)
Nichiei Tokai Co., Ltd. Representative Board of Directors
Chief (current)
May 1983 Join our company
January 2004 Manager of our Hachinohe branch
April 2005 Director of the Company, Hachinohe Branch Manager
October 2009 Our Director, Sales Group 1, 4th

sales manager
January 2011 Director of the Company, Head of Sales Group 4
April 2011 Managing Director of the Company, Head of Sales Group 4
director December 2011 Director and Head of Sales Group 4 of the Company
Managing Executive Officer December 2013 Director, Executive Officer, Sales Division 4 of the Company
Industry Sales Group loop length

December 2014
General manager and Shimazu studies Born July 22, 1959 4th Director, Managing Executive Officer, Sales of the Company
(Note)3 3,900
group leader
Head Office Industry Sales
December 2019 Director, Managing Executive Officer, Sales No. 1 of the Company
Group manager and
Group/Sales Group 4th Group Supervisor
Sales Promotion Office Manager
Concurrently Head of Sales Group 4
October 2023 Director and Managing Executive Officer of the Company Indus
Tory sales group management and sales group

Loop chief and head office industry manager
Business Group Manager
December 2023 Indah, Director and Managing Executive Officer of the Company
Story Sales Group Head and Head

Industry Sales Group
General Manager and Sales Promotion Office Manager (current position)
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Securities report
(KK)
November 2002 Director of Mutsu Ogawara Sales Office
April 2006 Director of the Company, Director of Mutsu Ogawara Branch
April 2008 Director of the Company, Aomori Branch Manager
April 2011 Managing Director of the Company, Aomori Branch Manager
October 2011 Our Managing Director Mutsu Ogawara Office

long
December 2011 Director of the Company, Aomori Branch Manager Kanemutsu Elementary School
Kawahara Sales Office Manager

director
April 2013 Director of the Company, Aomori Branch Manager Kanemutsu Elementary School
Managing Executive Officer
Manager of Kawahara Sales Office and in charge of new business
Academia Life Sciences October 2013 Director and Head of Sales Group 3 of the Company
Sales group supervisor and Sato Pig Born May 15, 1959 Concurrently Manager of Sendai Branch and in charge of new business (Note)3 6,600
Sendai Branch Manager and December 2013 Director, Executive Officer, Sales Department, Third Group of the Company
In charge of new business development team Loop manager, Sendai branch manager, new job
Business management
December 2014 Director, Managing Executive Officer, Sales Department of the Company
Three Group Manager and Sendai Branch Manager Kaneshin
In charge of regulatory affairs
December 2019 Director, Managing Executive Officer, Sales Department of the Company
Three Group Supervisor and Sendai Branch Manager
In charge of new business
October 2023 Akade, Director and Managing Executive Officer of the Company
Mia Life Science Sales Group

Loop supervisor and Sendai branch manager and new
In charge of business development team (current position)
December 1987 Join our company
October 2013 Kanemutsu Ogawahara, General Manager of our Aomori Branch
Office manager
December 2013 Kanemutsu, Executive Officer, Aomori Branch Manager of the Company
Ogawara Sales Office Manager and Sales Group 4

Loop deputy group leader
December 2014 Senior Executive Officer and General Manager of Aomori Branch of the Company
Mutsu Ogawara Sales Office Manager and 4th Sales Manager
Group Deputy Group Leader

December 2019 Director, Senior Executive Officer, Sales Department of the Company
3 Group Manager and Aomori Branch Manager

director
Tsu Ogawara Sales Office Manager
Managing Executive Officer
October 2020 Director, Senior Executive Officer, Sales Department of the Company
Academia Life Science Management 3 Group Manager and Aomori Branch Manager
Deputy Head of Business Group Tsu Ogawara Sales Office Manager and Life Systems Manager
Aomori Branch Manager and Nishibori Wataru Born November 17, 1964 Director of Mutual Information Research Institute (Note)3 3,200
Mutsu Ogawara Sales Office Manager December 2021 Director, Managing Executive Officer, Sales Department of the Company
Contract analysis/program research and development group 3 Group Manager and Aomori Branch Manager
Tsu Ogawara Sales Office Manager and Life Systems Manager
Loop manager and
Director of Mutual Information Research Institute
Deputy Director of Corporate Strategy Office
October 2023 Akade, Director and Managing Executive Officer of the Company

Loop Chief and Aomori Branch Manager Kanemutsu Elementary School
Kawahara Sales Office Manager and Contracted Analysis/Professional
Gram Research and Development Group Leader
December 2023 Akade, Director and Managing Executive Officer of the Company

Deputy loop manager and Aomori branch manager
Tsu Ogawara Sales Office Manager and contract analysis specialist
Program Research and Development Group Management
Deputy Director and Corporate Strategy Office (current position)
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Securities report
(KK)
April 1973 Joined Mitsubishi Corporation

April 2006 Director of the company
October 2010 Retired from the company
April 2011 Joined Chiyoda Oil Trading Co., Ltd.

May 2011 President and Representative Director of the company
May 2014 Company advisor
director Takada Repair Born October 12, 1950 April 2015 Our advisor (Note)3 ―
May 2015 Retired from Chiyoda Oil Trading Co., Ltd.
June 2015 Outside Audit & Supervisory Board Member of ACOM Co., Ltd.
ACOM Co., Ltd. Director Audit and Supervisory Committee

June 2017
member
June 2019 Retired from the company
April 1982
Mitsubishi Chemical Industries, Ltd. (currently Mitsubishi Chemical Industries, Ltd.)
Joined Michal Co., Ltd.

Mitsubishi Chemical Corporation (currently Mitsubishi Chemical
April 2009
Director (Le Co., Ltd.) Director of Intellectual Property Department
June 2011 Company Executive Officer, Intellectual Property Manager
director Hidehiko Yashima Born May 26, 1956 March 2016 Retired from the company (Note)3 ―
Mitsubishi Chemical Technology Co., Ltd.
April 2016 Chi (currently Mitsubishi Chemical Corporation)
Search) President
April 2021 Company advisor (current position)

Company Head Office Chemicals Group Electronic Materials
March 2007
charge manager
Mitsubishi Corporation North America Houston

April 2013 Branch Manager and Houston Branch Manager,
Mitsubishi Corporation (USA)
April 2015 Director of Mitsubishi Corporation
May 2018 Retired from the company

director Takasugi Tei Born May 10, 1958 Mitsubishi Corporation Chemical Co., Ltd. Regulation
(Note)3 ―
June 2018
Vice President
June 2019 President and Representative Director of the company
June 2021 Retired from the company
JFE Engineering Co., Ltd.

October 2021
Advisor, Energy Headquarters (current position)
June 2022 Our advisor

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Securities report
(KK)
October 2013 Our Sendai Branch Sales Group 4

Deputy general manager and new business manager
April 2014 Our Sendai Branch Sales Group 4

General manager and new business manager
December 2017 Executive Officer of the Company Sendai Branch Sales No. 4
Group manager and new business manager

full-time auditor Keiji Matsuda Born August 9, 1967 January 2020 Executive Officer, Hachinohe Branch Manager and new member of the Company (Note) 4 ―
In charge of business
October 2022 Executive Officer, Hachinohe Branch Manager and Hachinohe
Branch Sales Group 4 Manager

October 2023 Executive Officer, Hachinohe Branch Manager and Hachinohe
Branch industry sales group

manager
December 2023 Full-time Audit & Supervisory Board Member of the Company (current position)
July 1979
hill well ShinBorn December 10, 1948
Director of Okai Certified Public Accountant Office (current position)
Auditor (Note) 4 1,200
December 1992 Audit & Supervisory Board Member of the Company (current position)

April 2004 Chemicals Group CIO of the company
June 2008 I.T.Fron Co., Ltd.
Tier Executive Officer
January 2010 Retired from the company
February 2010 Executive Officer of Sigmaxis Co., Ltd.

Auditor Yuji Kambe Born March 7, 1954 (Note) 4 ―
December 2011 Retired from the company
April 2017 Mitsubishi Corporation Chemical Glue

Chemicals related information management
March 2019 Retired from the company
April 2019 Our advisor

April 1981 Joined Nippon Soda Co., Ltd.

April 2008 Company management manager
April 2013 Director of Internal Control Audit Office of the company

Auditor Yoshinori Nagatomi Born May 9, 1958
March 2021
(Note) 4 ―
Retired from the company
April 2021 Our advisor

April 1984 Joined Mitsubishi Chemical Industries, Ltd.
April 2005 Mitsubishi Chemical Imaging Co., Ltd.

Division Manager
November 2008 Mitsubishi Chemical Imaging Fee

President and CEO
May 2012 Mitsubishi Chemical Imaging Co., Ltd.
Division Manager
April 2014 Director of the company
Auditor Yasuo Senami Born October 3, 1959 November 2015 Mitsubishi Chemical Europe Representative (Note) 4 ―
President
April 2018 Mitsubishi Chemical Hall Co., Ltd.
Dings Director/Director of Audit Office
October 2020 Mitsubishi Chemical Holdings
Asia Pacific Representative
CEO
March 2023 Retired from the company
total 91,220
(Notes) 1. Directors Osamu Takada, Hidehiko Yashima, and Tadashi Takasugi are outside directors.
2. Corporate auditors Makoto Okai, Yuji Kobe, Yoshinori Nagatomi, and Yasuo Senba are outside corporate auditors. 3 Directors Mr. Yasuo Higashi, Mr.
Yasuyuki Higashi, Mr. Masahiro Kon, Mr. Manabu Shimazu, Mr. Ichi Sato, Mr. Wataru Nishibori, Mr. Osamu Takada, Mr. Yashima
The terms of office of Mr. Hidehiko and Mr. Tadashi Takasugi will run from the conclusion of the regular general meeting of shareholders for the fiscal year ending September 2023 to the conclusion of the regular general meeting
of shareholders for the fiscal year ending September 2025.
4. The term of office of Audit & Supervisory Board Members Keitsugu Matsuda, Makoto Okai, Yuji Kobe, Yoshinori Nagatomi, and Yasuo Senba is for the term ending September 2023.
The term is from the time of the conclusion of the ordinary general meeting of shareholders for the period ending in September 2027 to the time of the conclusion of the ordinary general meeting of
shareholders for the fiscal year ending September 2027. 5. Representative Director and President Yasuyuki Higashi is the eldest son of Chairman and Director Yasuo Higashi.
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Securities report
② Status of outside officers
The Company has three outside directors.
At the general meeting of shareholders held on December 17, 2015, the Company announced that Mr. Osamu, Hidehiko Yashima at the general meeting of shareholders held on December 20, 2021
Mr. Tadashi Takasugi was elected as an outside director at the general meeting of shareholders held on December 20, 2022. Outside directors are
scheduled to take on the role of supervising whether directors are performing their duties efficiently and appropriately from a standpoint independent
from management.
Outside Director Takada Mr. Osamu is a former employee of Mitsubishi Corporation, a business partner, but there are no special interests between Mitsubishi Corporation and the Company.
There is no significant relationship that gives rise to the relationship.
Mr. Hidehiko Yashima, an outside director, is a former employee of Mitsubishi Chemical Corporation, a business partner, but there is no significant relationship that would create a
special interest between Mitsubishi Chemical Corporation and the Company.
In addition, although Mr. Tadashi Takasugi, an outside director, is a former employee of Mitsubishi Corporation, a business partner of the Company, there is no significant relationship that would
create a special interest between that company and the Company.
The Company has four outside corporate auditors.
Mr. Makoto Okai, an outside corporate auditor, is an expert with specialized experience in accounting, and outside corporate auditors, Mr. Yuji Kobe, Mr.
Yoshinori Nagatomi, and Mr. Yasuo Senba have experience in related industries. Please note that Mr. Makoto Okai is a certified public accountant and has
considerable knowledge of finance and accounting. The number of shares owned by outside corporate auditors is 1,200 shares. Additionally, the four
outside corporate auditors have no personal, business, or other special interests.
Mr. Makoto Okai, an outside corporate auditor, is a shareholder of the Company and the director of Okai Certified Public Accountant Office, but there is no significant relationship
that would create a special interest between the firm and the Company.
Mr. Yuji Kobe, an outside corporate auditor, is a former employee of Mitsubishi Corporation, a business partner, but there is no significant relationship that would create a special
interest between Mitsubishi Corporation and the Company.
Mr. Yoshinori Nagatomi, an outside corporate auditor, is a former member of Nippon Soda Co., Ltd., a shareholder and business partner of the Company, but there is no significant
relationship that would create a special interest between the company and the Company.
Furthermore, although Mr. Yasuo Senba, an outside corporate auditor, is a former employee of Mitsubishi Chemical Corporation, a business partner, there is no significant relationship that would
create a special interest between Mitsubishi Chemical Corporation and the Company.
The Company has not established standards or policies regarding independence when appointing outside directors and outside corporate auditors. As of the filing date, the
Company has entered into an agreement with the outside directors and outside corporate auditors based on Article 427, Paragraph 1 of the Companies Act to limit their liability for
damages under Article 423, Paragraph 1 of the same Act. The maximum amount of liability for damages based on the applicable contract is the amount stipulated by law.
③ Mutual cooperation between supervision or audit by outside directors or outside corporate auditors, internal audit, corporate auditor audit, and accounting audit, and relationship with internal control
department
The Company has appointed three outside directors, and four of the five corporate auditors are outside corporate auditors.The Company strictly monitors the
execution of duties by the directors, including attending regular board meetings once a month, and maintains independence. We have secured it. In addition, the
corporate auditors strive for mutual cooperation by regularly exchanging opinions with the accounting auditor, directors, and the Internal Control and Audit Office.
The Company does not have standards or policies regarding the independence of outside directors or outside corporate auditors, but when appointing them, it is important to ensure that there is a
certain level of oversight from management that can strictly monitor the execution of duties by directors. The Company has decided to appoint an outsider who is close to the Board of Directors.
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Securities report
(3) [Audit status]
① Status of audit by corporate auditors
The Board of Corporate Auditors is comprised of five corporate auditors as of the filing date of the securities report, and holds discussions and makes
resolutions based on established audit policies and plans, and audits the performance of duties by directors. As a general rule, meetings are held once a month, but
whenever necessary. Four of the five outside corporate auditors are outside corporate auditors, one of whom is a certified public accountant and has considerable
knowledge of finance and accounting.
In addition, the corporate auditors and the Internal Control and Auditing Office hold meetings with the accounting auditor to exchange opinions regarding important issues related to
accounting audits, as necessary.
During the current fiscal year, the Company held meetings of the Board of Corporate Auditors 13 times a year, and the attendance status of each corporate auditor is as follows.
full name Number of times held Number of attendance
Koji Tsukudate 13 13
Okai Shin 13 12
Akio Nagatomi 13 13
Yuji Kobe 13 13
Yoshinori Nagatomi 13 13
The specific matters considered by the Board of Corporate Auditors include the preparation of audit reports, formulation of audit policies and audit plans, appointment, evaluation,
reappointment and agreement on remuneration of accounting auditors, and review with accounting auditors each quarter. This includes exchanging opinions including content, verifying the
development and operational status of internal control systems, and investigating the status of business and assets.
In addition, as full-time corporate auditors, we conduct auditing activities based on accurate information based on the field, and share information with outside corporate auditors to provide
their own specialized knowledge and objective viewpoints. The Board of Corporate Auditors will work to ensure the effective functioning of the Board of Corporate Auditors through discussions
based on opinions from the Board of Corporate Auditors, etc., and will work in collaboration with the Accounting Auditor and the Internal Audit Office to contribute to the healthy and sustainable
development of the company. I'm here.
② Internal audit status
Internal audits at our company are carried out by the Internal Control and Audit Office (2 members), an organization under the direct control of the president and
representative director, who works closely with the corporate auditors to strengthen internal control functions. We conduct thorough internal audits.
Regarding internal audits, the Internal Control and Audit Office plays a central role in conducting regular audits based on the audit plan established at the
beginning of the fiscal year. In addition, we conduct audits as necessary to promote appropriate business operations. We also conduct internal control audits
related to financial reporting and collaborate with related departments.
The Internal Control and Audit Office reports audit results to the President and Representative Director, as well as to the Board of Directors, Board of Corporate Auditors, and
Executive Officers.
Furthermore, we aim to improve the effectiveness and efficiency of our audits by exchanging opinions and information regarding internal control evaluation with the accounting auditor.
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Securities report
③ Status of accounting audit
Regarding our accounting auditor, we have concluded an audit contract with Taiyo LLC, which conducts accounting audits based on the Companies
Act and the Financial Instruments and Exchange Act.
The names of the certified public accountants who executed operations during the current fiscal year and the composition of the assistants involved in audit operations are as follows.
a. Name of auditing firm
Taiyo LLC
b. Continuous audit period
11 years
c.Name of the certified public accountant who executed the business
Designated limited liability partner Executive employee certified public accountant Kenichi Nakamura
Designated limited liability partner Executive employee certified public accountant Yukimasa Shimakawa
(Note) The number of years of continuous involvement is omitted because all of them have been involved for less than seven years.
d. Composition of assistants related to accounting audit work
certified public accountant 1 person
others 9 people
e.Policy and reasons for selecting an audit firm
Our company's corporate auditors and board of corporate auditors prepare an `àudit firm checklist'' at the end of each fiscal year, based on the ``Practical guidelines for corporate auditors,
etc. regarding evaluation and selection standards for accounting auditors.'' However, the Board of Corporate Auditors deliberates, and the Board of Corporate Auditors decides on the content of
proposals regarding the appointment, dismissal, and non-reappointment of the accounting auditor.
f. Evaluation of the audit corporation by the corporate auditors and the board of corporate auditors
The Company's corporate auditors and the Board of Corporate Auditors evaluate auditing corporations based on the ``Practical Guidelines for Corporate Auditors Regarding
Evaluation and Selection Criteria for Accounting Auditors.''
As the evaluation criteria of the accounting auditor, the following seven items are evaluated and appropriateness is determined comprehensively. (1) Audit firm
quality control, 2) Audit team, 3) Audit fees, etc., 4) Communication with corporate auditors, 5) Relationship with management, etc., 6) Group company audits,
7) Confirmation of fraud risks)
As a result of the Board of Corporate Auditors' evaluation of the accounting auditor in light of the above evaluation items during the current fiscal year, it was determined
that there were no problems overall with the auditing firm's audits.
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Securities report
④ Details of audit fees, etc.
a. Remuneration for audit certified public accountants, etc.
Previous consolidated fiscal year Current consolidated fiscal year
classification
For audit certification work For non-audit work For audit certification work For non-audit work
Based remuneration (1,000 yen) Based remuneration (1,000 yen) Based remuneration (1,000 yen) Based remuneration (1,000 yen)
Submitting company 16,000 ― 16,000 ―
consolidated subsidiary ― ― ― ―
total 16,000 ― 16,000 ―
b. Remuneration for the same network (Grant Thornton member firm) as the auditing certified public accountant (excluding a.)
Previous fiscal year
Not applicable.
Current consolidated fiscal year
Not applicable.
c. Details of remuneration based on other important audit and
certification services Not applicable.
d. Policy for determining audit fees
There is no established policy for determining audit fees.
e. Reasons why the Board of Corporate Auditors agreed to the remuneration, etc. of the Accounting Auditor
Based on the "Practical Guidelines for Cooperation with Accounting Auditors" published by the Japan Audit & Supervisory Board Members Association, the Board of Corporate Auditors of the
Company confirms the trends in audit time and audit fees in the audit plan, as well as the status of audit plans and performance in past years. As a result of verifying the validity of the estimated
remuneration amount, the Company determined that the remuneration for the accounting auditor is appropriate and has given consent pursuant to Article 399, Paragraph 1 of the Companies
Act.
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Securities report
(4) [Remuneration, etc. of officers]
① Matters related to policies related to determining the amount of remuneration, etc. for officers or the method of calculating it
At the board of directors meeting held on February 22, 2021, the Company resolved on a policy for determining the content of individual remuneration for directors.
Compensation for individual directors is comprehensively considered within the total compensation limit approved at the general meeting of shareholders, taking into account
the company's performance and employee salary levels according to position, responsibilities, and length of service. Our basic policy is to determine compensation, and
specifically, our basic compensation is fixed compensation in cash.
Basic remuneration consists of monthly fixed remuneration, director bonuses, and director retirement benefits, and takes into account the standards of other companies, the Company's
business performance, and the level of employee compensation, depending on position, responsibility, and length of service. However, we are taking it into consideration comprehensively.
Additionally, for outside directors who are responsible for supervisory functions, monthly fixed compensation, bonuses for directors, and retirement benefits for directors are determined based
on their duties.
The specific amount of remuneration for each individual is determined by the President and Representative Director, Yasuyuki Higashi, based on a resolution of the Board of
Directors. The content of that authority is the amount of basic remuneration for each director. The reason for delegating these powers is that the President and Representative
Director is the most appropriate person to evaluate each director's areas of responsibility and duties while taking into account the Company's overall performance.
When determining the content of individual remuneration for directors, the Board of Directors comprehensively considers job responsibilities, employee
salary levels, etc., and calculates remuneration, etc. in accordance with the standards and regulations set forth in the decision policy. Therefore, the Board of
Directors has determined that the content is in accordance with the decision policy.
Regarding remuneration, etc. of directors for the current fiscal year, at the Board of Directors meeting held on December 20, 2022, the President and Representative
Director will consult with the Board of Directors to decide on the above calculation policy and remuneration limit. , has been resolved. In addition, the remuneration of the Audit
& Supervisory Board Members will be discussed and determined by the Audit & Supervisory Board Members at the Board of Auditors meeting held on December 20, 2022.
② Total amount of remuneration, etc. by officer category, total amount of remuneration, etc. by type, and number of eligible officers of the submitting company
Total amount of compensation by type (thousand yen) subject to

Total amount of remuneration, etc.
Officer classification Number of officers
(1,000 yen) Of the items on the left,
fixed remuneration Officer bonus Retirement benefits (given name)
Non-monetary compensation, etc.
director
81,628 71,475 5,000 5,153 ― 6
(Excluding outside directors.)
Auditor
8,937 8,580 ― 357 ― 1
(Excluding outside corporate auditors)
Outside officer 23,403 22,740 ― 663 ― 8
(Note) 1 Limits as determined by the resolution of the ordinary general meeting of shareholders held on December 20, 2018: Director remuneration within 150,000,000 yen per year (external
directors within 15,000,000 yen), auditor remuneration within 30,000,000 yen per year (external auditors) It has been resolved that the amount of the role will be within 15,000,000
yen per year).
Furthermore, it has been resolved that the amount of remuneration for directors will not include the salaries of employees who also serve as directors, as has been the case in the past.
As of the conclusion of the general meeting of shareholders, there are 10 directors (4 outside directors) and 5 corporate auditors (4 outside corporate
auditors).
2 The amount of fixed remuneration for directors and bonuses for directors does not include the amount equivalent to the salary, etc. for the employee portion of directors who also
serve as employees.
3 Retirement benefits are the amount provided for reserve for directors' retirement benefits.
③ Total amount of consolidated remuneration, etc. for each officer
This information is not listed because there is no person whose total consolidated remuneration is 100 million yen or more.
④ Employee salary for executives who also serve as employees
of the targeted officers.

Total amount (thousand yen) Content
Number of members (people)
26,925 3 Amount equivalent to employee salary for directors who also serve as employees of the submitting company
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Securities report
(5) [Stock holding status]
① Criteria and concept for classification of investment stocks
As a general rule, the Company does not hold stocks for purely investment purposes, so all investment stocks are classified as
investment stocks for purposes other than pure investment.
② Investment stocks held for purposes other than pure investment a. Holding policy and method of verifying the rationality of holding, and verification by the board of directors,
etc. regarding the appropriateness of holding individual stocks.
Content
When acquiring new shares of a listed company or continuing to hold existing shares, consider strengthening and maintaining transactions that
contribute to increasing corporate value, and examining returns and risks from a medium- to long-term perspective. If the Company determines that
the stock it already owns will not be effective, it will be sold in consideration of the impact on the stock market.
b. Number of issues and amount recorded on balance sheet
Number of brands of the amount recorded on the balance sheet
(Brand) Total amount (thousand yen)
unlisted stocks 9 12,719
Stocks other than unlisted stocks twenty five 1,583,686
(Issues whose number of shares increased in the current fiscal year)
Number of brands Acquisition related to increase in number of shares

Reason for increase in number of shares
(Brand) Total price (thousand yen)
unlisted stocks ― ― ―
11
Increase due to business partners and business partner stockholding association
Stocks other than unlisted stocks 32,624
there is.
(Issues whose number of shares decreased in the current fiscal year)
Number of brands Sale due to decrease in number of shares
(Brand) Total price (thousand yen)
unlisted stocks 1 20
Stocks other than unlisted stocks ― ―
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Securities report
c. Information regarding the number of shares for each brand of specified investment stocks and deemed holding stocks, the amount recorded on the balance sheet, etc.
Specified investment stocks
Current fiscal year Previous business year
our stock
Number of shares (shares) Number of shares (shares) Purpose of holding, quantitative holding effect
Brand name Possession of expression
and the reason for the increase in the number of shares
Balance sheet amount Balance sheet amount presence or absence
(1,000 yen) (1,000 yen)
46,544 45,397 Mainly business partners in other segments

Nippon Soda Co., Ltd. Yes
255,994 199,976 To maintain and strengthen relationships
24,000 24,000 Mainly in the clinical testing reagents segment.

Sysmex Corporation Yes
171,192 186,432 To maintain and strengthen business partner relationships
21,000 21,000 Mainly in the chemical and industrial chemicals segment.

Mitsubishi Corporation Nothing

Meiji Holdings Co., Ltd. Nothing

JEOL Ltd. Yes

Horiba Ltd. Nothing

ESPEC Co., Ltd. Nothing

Central Glass Co., Ltd. Nothing
DOWA HOLDING 15,173 14,551 Mainly in the chemical and industrial chemicals segment.
Nothing
Su Co., Ltd. 70,570 75,521 To maintain and strengthen business partner relationships

Tosoh Corporation Yes
17,000 17,000
Taki Chemical Co., Ltd. We are considering selling Nothing
64,090 82,450
Procrea Holdi Co., Ltd. 20,520 20,520 To maintain and strengthen transactions with financial institutions.
eye
Nothing
languages 40,198 43,584
AGC Co., Ltd. Nothing
8,200 8,200
Mitsubishi Materials Corporation We are considering selling Nothing
19,835 16,309
Rena Science Co., Ltd. Nothing

Applied Geology Co., Ltd. Nothing

Nipro Co., Ltd. Nothing
33,499 33,489
Teraoka Manufacturing Co., Ltd. We are considering selling Nothing
11,188 11,219
ULVAC Co., Ltd. Nothing
H.U. Group Hall 2,500 2,500 Mainly in the clinical testing reagents segment.
Nothing
Dings Co., Ltd. 6,350 6,600 To maintain and strengthen business partner relationships
5,000 5,000 Mainly in the clinical testing reagents segment.

Kainos Co., Ltd. Yes
400 400 Mainly in the chemical and industrial chemicals segment.

Kyocera Corporation Nothing
2,083 1,431
Pacific Metal Co., Ltd. We are considering selling Nothing
2,920 3,131
40/98

Securities report
Current fiscal year Previous business year
our stock
Number of shares (shares) Number of shares (shares) Purpose of holding, quantitative holding effect
Brand name Possession of expression
and the reason for the increase in the number of shares
Balance sheet amount Balance sheet amount presence or absence
(1,000 yen) (1,000 yen)
400 400
Sanyo Chemical Industries Co., Ltd. We are considering selling Nothing
1,638 1,752
400 400 Mainly in the clinical testing reagents segment.
Cosmo Bio Co., Ltd. Nothing
392 408 To maintain and strengthen business partner relationships
(note) It is difficult to describe quantitative ownership effects for specific investment stocks. As stated above, the rationality of the holding will be
verified at the board of directors meeting held on November 13, 2023, based on the holding conditions as of the end of September 2023.
Deemed shares held
Not applicable.
③ Investment stocks held for pure investment purposes
Not applicable.
④ Those whose purpose of holding investment shares changed from pure investment purposes to purposes other than pure investment during the
current fiscal year Not applicable.
⑤ Those whose purpose of holding investment shares was changed from a purpose other than pure investment to pure investment during the
current fiscal year Not applicable.
41/98

Securities report
Fifth [Accounting status]
1 Consolidated financial statements and method of preparing financial statements
(1) The Company's consolidated financial statements have been prepared in accordance with the ``Regulations on Terminology, Forms, and Preparation Methods for Consolidated Financial Statements'' (Ministry of Finance
Ordinance No. 28 of 1976).
(2) The Company's financial statements have been prepared in accordance with the "Regulations on Terminology, Forms, and Preparation Methods for Financial Statements" (Ministry of Finance
Ordinance No. 59 of 1963; hereinafter referred to as the "Financial Statement Regulations"). Masu.
The Company falls under the category of a company that submits special financial statements and prepares financial statements in accordance with the provisions of Article 127 of the Financial Statement
Regulations.
2 About audit certification
Based on the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, the Company has published consolidated financial statements for the
consolidated fiscal year (October 1, 2022 to September 30, 2023) and business year (October 2022). The financial statements for the period from September 1, 2023 to September
30, 2023 have been audited by Taiyo LLC.
3 Regarding special efforts to ensure the appropriateness of consolidated financial statements, etc.
The Company takes special efforts to ensure the appropriateness of consolidated financial statements, etc. Specifically, in order to develop internal
regulations, manuals, guidelines, etc. for preparing appropriate consolidated financial statements, etc., and to develop a system to appropriately
understand the contents of accounting standards, etc. We are a member of the Japan Standards Institute, participate in seminars sponsored by
auditing firms, and subscribe to accounting magazines.
42/98

Securities report
1 [Consolidated financial statements, etc.]
(1) [Consolidated financial statements]
① [Consolidated balance sheet]
(Unit: thousand yen)
(September 30, 2022) (September 30, 2023)
Assets section
current assets
cash and deposits *1 1,407,655 *1 2,195,476

Notes receivable, accounts receivable and contract assets *2 9,413,890 *2, 4 9,569,548
electronically recorded debt 297,093 ※Four 362,903
merchandise 1,158,309 1,120,125
lease investment assets 123,287 56,576
others 311,112 314,039
Allowance for doubtful accounts △ 1,750 △ 60
Total current assets 12,709,597 13,618,611
Fixed asset
Tangible fixed assets
buildings and structures *1 1,789,718 *1 1,861,747

Accumulated depreciation △ 1,309,007 △ 1,323,232
Buildings and structures (net) 480,710 538,514
land *1 1,495,006 *1 1,495,006
Leased asset 307,458 302,953
Accumulated depreciation △ 171,588 △ 144,857
Lease assets (net) 135,870 158,095
others 452,572 461,674
Accumulated depreciation △ 122,685 △ 123,729
Others (net amount) 329,887 337,944
Total tangible fixed assets 2,441,474 2,529,561
Intangible fixed assets
Leased asset ― 15,283

Software 7,677 12,637
Telephone subscription rights 671 ―
Software suspense account 198,245 419,885
Total intangible fixed assets 206,595 447,806
Investments and other assets
Investment securities *1 1,433,980 *1 1,633,932

Guarantee deposit 551,317 553,125
others 92,091 89,913
Allowance for doubtful accounts △ 25,677 △ 21,624
Total investments and other assets 2,161,943 2,324,760
Total fixed assets 4,810,012 5,302,128
Total assets 17,519,610 18,920,740
43/98

Securities report
debt section
Current Liabilities
Notes payable and accounts payable *1 8,766,234 *1, 4 9,588,734

Electronically recorded debt 339,170 ※Four 371,971
short-term borrowings 170,800 233,400
Long-term loans scheduled to be repaid within one year 14,280 14,280
lease obligation 155,723 99,378
Accounts payable 195,928 158,886
Accrued corporate taxes, etc. 199,147 100,298
Reserve for bonuses 58,100 57,450
others *3 185,621 *3 248,553
Total current liabilities 10,085,006 10,872,953
Fixed debt
long-term debt 41,690 27,410
Deferred tax liability 228,928 282,841
Liabilities related to retirement benefits 91,554 80,365
Reserve for directors' retirement benefits 131,378 142,012
others 44,605 44,232
Total fixed liabilities 753,155 778,697
Total debt 10,838,162 11,651,650
Of Net Assets
Shareholders' equity
capital 820,400 820,400

capital surplus 881,100 881,100
an earned surplus 4,494,215 4,946,792
Treasury stock △ 168,907 △ 168,907
Total shareholders' equity 6,026,808 6,479,385
Accumulated other comprehensive income
Valuation difference on other securities 579,755 697,779

Cumulative amount of adjustments related to retirement benefits △ 1,499 5,057
Total accumulated other comprehensive income 578,255 702,836
Non-controlling interests 76,384 86,867
Total net assets 6,681,448 7,269,089
Total debt and net assets 17,519,610 18,920,740
44/98

Securities report
② [Consolidated statement of income and consolidated statement of comprehensive income]
[Consolidated income statement]
(From October 1, 2021 (From October 1, 2022

(To September 30, 2022) (To September 30, 2023)
amount of sales 37,333,902 35,094,627
Cost of sales 33,860,912 31,750,175
gross profit 3,472,990 3,344,452
Selling, general and administrative expenses *1 2,528,961 *1 2,593,455
Operating income 944,028 750,996
Non-operating income
Interest income 2,861 3,644

Dividend income 35,827 43,328
Fee received 10,845 12,106
miscellaneous income 12,219 8,212
others 2,239 192
Total non-operating income 63,994 67,484
Non-operating expenses
Interest expense 1,757 2,231

Commission paid 2,279 2,274
Miscellaneous losses 575 5,618
Total non-operating expenses 4,612 10,124
Ordinary profit 1,003,410 808,356
special profit
Gain on sale of fixed assets *2 26 *2 200

Gain on sale of investment securities ※Four 206 ―
Investment partnership operating profit 1,595 ―
Total extraordinary profit 1,828 200
extraordinary loss
Loss on retirement of fixed assets *3 144 *3 244

Loss on sale of investment securities ― 1,232
Loss on valuation of investment securities ※Five 30,507 ※Five 1,426
Impairment loss ― *6 671
Loss on sale of golf memberships ― 300
others ― twenty two
Total extraordinary loss 30,652 3,897

Net income before income taxes 974,586 804,659
Corporate tax, resident tax and business tax 292,844 237,388
Corporate tax adjustment amount 372 668
Total corporate taxes, etc. 293,216 238,056
net income 681,369 566,602
Net income attributable to non-controlling shareholders 23,749 10,408
Net income attributable to owners of parent company 657,620 556,194
45/98

Securities report
[Consolidated statement of comprehensive income]

net income 681,369 566,602
Other comprehensive income
Valuation difference on other securities △ 191,807 118,098

Adjustment amount related to retirement benefits 3,051 6,557
Total other comprehensive income * △ 188,755 * 124,655
comprehensive income 492,613 691,258
(breakdown)
Comprehensive income related to parent company shareholders 468,953 680,775

Comprehensive income related to non-controlling shareholders 23,659 10,482
46/98

Securities report
③ [Consolidated statement of changes in shareholders' equity]
Previous consolidated fiscal year (from October 1, 2021) (To September 30, 2022)
Shareholders' equity Accumulated other comprehensive income
Other
others for retirement benefits
non-control
Total net assets
capital Shareholders' equity comprehensive income
capital an earned surplus Treasury stock Securities such adjustment
shareholder equity
Surplus total Cumulative amount

Valuation difference amount Cumulative amount
total
Balance at the beginning of the current period 820,400 881,100 3,894,043 △ 133,566 5,461,977 771,562 △ 4,551 767,011 52,724 6,281,712
Changes in accounting policy
38,314 38,314 38,314
Cumulative impact amount
Reverse accounting policy changes

820,400 881,100 3,932,357 △ 133,566 5,500,291 771,562 △ 4,551 767,011 52,724 6,320,027
Balance at the beginning of the current period
Current period change amount
Dividend of surplus △ 95,762 △ 95,762 △ 95,762

Attributable to parent company shareholders
657,620 657,620 657,620
net income
Acquisition of treasury stock △ 35,340 △ 35,340 △ 35,340
Items other than stockholders' equity
Amount of change in the current period △ 191,807 3,051 △ 188,755 23,659 △ 165,095
(net amount)
Total amount of changes for the current period ― ― 561,857 △ 35,340 526,516 △ 191,807 3,051 △ 188,755 23,659 361,421
Balance at end of current period 820,400 881,100 4,494,215 △ 168,907 6,026,808 579,755 △ 1,499 578,255 76,384 6,681,448
Current consolidated fiscal year (from October 1, 2022 to September 30, 2023)
Shareholders' equity Accumulated other comprehensive income
Other
others for retirement benefits
non-control
Total net assets
capital Shareholders' equity comprehensive income
capital an earned surplus Treasury stock Securities such adjustment
shareholder equity
Surplus total Cumulative amount

Valuation difference amount Cumulative amount
total
Balance at the beginning of the current period 820,400 881,100 4,494,215 △ 168,907 6,026,808 579,755 △ 1,499 578,255 76,384 6,681,448
Dividend of surplus △ 103,617 △ 103,617 △ 103,617

Attributable to parent company shareholders
556,194 556,194 556,194
net income
Acquisition of treasury stock ― ― ―
Amount of change in the current period 118,024 6,557 124,581 10,482 135,063
(net amount)
Total amount of changes for the current period ― ― 452,577 ― 452,577 118,024 6,557 124,581 10,482 587,640
Balance at end of current period 820,400 881,100 4,946,792 △ 168,907 6,479,385 697,779 5,057 702,836 86,867 7,269,089
47/98

Securities report
④ [Consolidated cash flow statement]

Cash flow from operating activities
Net income before income taxes 974,586 804,659
depreciation expense 91,550 79,809
Impairment loss ― 671
Gain/loss on valuation of investment securities (△ is gain) 30,507 1,426
Gain/loss on sale of investment securities (△ is gain) △ 206 1,232
Gain/loss on sale of fixed assets (△ is profit) △ 26 △ 200
Loss on retirement of fixed assets 144 244
Investment partnership operating profit/loss (△ is profit) △ 1,595 ―
Increase/decrease in allowance for doubtful accounts (△ indicates decrease) 179 △ 5,743
Increase/decrease in reserve for bonuses (△ indicates a decrease) 650 △650
Increase/decrease in liability related to retirement benefits (△ indicates a decrease) △ 3,855 △ 1,754
Increase/decrease in reserve for directors' retirement benefits (△ indicates a decrease) 7,836 10,634
Interest and dividends received △ 38,689 △ 46,972
Interest expense 1,757 2,231
Increase/decrease in trade receivables (△ indicates increase) △ 985,707 △ 221,402
Increase/decrease in inventories (△ indicates increase) △ 127,877 38,183
Increase/decrease in trade payables (△ indicates a decrease) 1,025,030 841,319
others 107,526 54,452
subtotal 1,081,811 1,558,142
Amount of interest and dividends received 38,690 46,969
interest payment amount △ 1,757 △ 2,231
Amount of corporate tax etc. paid △ 232,622 △ 334,154
Cash flow from operating activities 886,122 1,268,726
Cash flow from investing activities
Expenditures for acquisition of tangible fixed assets △ 23,470 △ 100,733
Proceeds from sale of tangible fixed assets 154 200
Expenditures for acquisition of intangible fixed assets △ 47,860 △ 248,910
Expenditures for acquisition of investment securities △ 28,998 △ 42,886
Proceeds from sale of investment securities 255 8,767
Income from distribution from investment partnership 1,788 ―
Expenses due to fixed deposits △ 139,202 △ 89,202
Income from withdrawal of term deposits 139,201 139,202
Income from loan collection 320 120
Expenditures due to insurance reserves ― △ 4,061
Income from cancellation of insurance reserve fund 4,217 ―
others 1,583 2,117
Cash flow from investing activities △ 92,009 △ 335,385
48/98

Securities report

Cash flow from financing activities
Income from short-term borrowings 2,255,000 2,512,000
Expenditures for repayment of short-term loans △ 2,240,400 △ 2,449,400
Expenses due to repayment of long-term loans payable △ 14,280 △ 14,280
Expenditures for acquisition of treasury stock △ 35,340 ―
Expenses due to repayment of lease obligations △ 55,009 △ 40,331
Dividend payment amount △ 95,611 △ 103,507
Cash flow from financing activities △ 185,642 △ 95,518
Increase/decrease in cash and cash equivalents (△ indicates a decrease) 608,470 837,821
Opening balance of cash and cash equivalents 659,982 1,268,452
Ending balance of cash and cash equivalents * 1,268,452 * 2,106,274
49/98

Securities report
[Notes]
(Important matters that form the basis for preparing consolidated financial statements) Matters
1 related to the scope of consolidation
All subsidiaries are consolidated.

Number of consolidated subsidiaries 2 companies
Names of major consolidated subsidiaries
This information has been omitted as it is stated in "1. Corporate Overview 4. Status of Affiliated Companies."
Furthermore, Tohoku System Co., Ltd., which was a consolidated subsidiary in the previous fiscal year, has been excluded from the scope of consolidated
subsidiaries due to an absorption-type merger.
2 Matters related to the business year, etc. of consolidated subsidiaries
The closing date of consolidated subsidiaries is the same as the consolidated closing date.
3 Matters related to accounting policies
(1) Evaluation standards and methods for important assets
① Evaluation standards and methods for securities
Other securities
Things other than stocks, etc. that have no market price
Market value method (All valuation differences are accounted for directly in net assets, and cost of sales is calculated using the moving average
method.)
Stocks, etc. with no market price
Cost method using moving average method
Furthermore, for investments in investment business limited partnerships (those deemed to be securities pursuant to Article 2, Paragraph 2 of the Financial Instruments and
Exchange Act), the most recent available financial statement date stipulated in the partnership contract shall be used. This is based on the financial statements and uses the method
of incorporating the amount equivalent to equity as a net amount.
② Inventory evaluation standards and methods
Mainly cost method based on average method (balance sheet value is written down based on decline in profitability)
(2) Depreciation method for important depreciable assets
① Tangible fixed assets (excluding leased assets)
Declining balance method
However, buildings acquired on or after April 1, 1998 (excluding equipment attached to buildings) and equipment attached to buildings and structures
acquired on or after April 1, 2016 are depreciated using the straight-line method.
The main useful lives are as follows.

buildings and structures 7 years to 40 years
② Intangible fixed assets (excluding lease assets)
For software (for in-house use), the straight-line method is applied over the usable period within the company (within 5 years).
③ Lease assets
Lease assets related to finance lease transactions that do not transfer ownership
Straight line method where the lease term is the useful life and the residual value is zero.
50/98

Securities report
(3) Standards for recording important reserves
① Allowance for doubtful accounts
In order to prepare for losses due to bad debts on receivables, we examine the recoverability of general receivables based on the actual rate of bad debts, and individually examine the
collectability of specific receivables such as doubtful debts, and record the expected uncollectible amount.
② Reserve for bonuses
In order to allocate the expenditure for bonuses paid to employees, the amount borne by the current consolidated fiscal year of the estimated payment amount is
recorded.
③ Reserve for directors' retirement benefits
In order to prepare for the payment of retirement benefits to executives, the amount required to be paid at the end of the fiscal year based on internal regulations is recorded.
Please note that some consolidated subsidiaries do not have internal rules regarding retirement benefits for directors, so they are not recorded.
(4) Standards for recording income and expenses
(Product sales)
The Company and its consolidated subsidiaries handle a wide variety of products, including general reagents, consumables, clinical test reagents,
industrial chemicals, food additives, and agricultural chemicals, and are obligated to deliver products based on customer orders. Masu. It is determined that
control transfers and the performance obligation is satisfied when the products are delivered to the customer. Since the period from the time of shipment to
the time control of the product is transferred to the customer is the normal period, revenue is recognized at the time of shipment. (equipment sales)
The Company and its consolidated subsidiaries sell equipment related to product sales, and are obligated to deliver equipment based on
contracts with customers. Revenue is recognized when the equipment is installed, adjusted, and operated, and when the customer accepts the
equipment, it is determined that control is transferred and the performance obligation is satisfied.
(maintenance contract)
The Company and its consolidated subsidiaries are obligated to provide maintenance services based on maintenance contracts with
customers regarding equipment sales. It is determined that the performance obligations for these services will be satisfied over the
service provision period.
(repair)
The Company and its consolidated subsidiaries are obligated to provide after-sales services such as repairs based on requests from customers
in the event of equipment failure after sales. It is determined that control is transferred and the performance obligation is satisfied at the time
the services are provided.
We may act as an intermediary in providing services to customers, such as maintenance contracts and repairs. Therefore, for
transactions in which the Company and its consolidated subsidiaries act as agents, revenue is recognized at the net amount of the total
consideration received from the customer minus the amount paid to a third party.
The consideration for the transaction was received within one year of satisfaction of the performance obligation and does not include a significant financial component.
(5) Accounting method for retirement benefits
① Method of attributing estimated retirement benefits to period
In calculating retirement benefit obligations, the straight-line period basis is used to attribute the expected amount of retirement benefits to the period
up to the end of the current consolidated fiscal year.
② Expense treatment method for actuarial differences
Actuarial gains and losses are amortized using the straight-line method over a certain number of years (5 years) within the average remaining service period of
employees at the time of occurrence in each consolidated fiscal year, and are expensed from the following consolidated fiscal year. We are determined to do so.
③ Accounting method for unrecognized actuarial gains and losses
Unrecognized actuarial gains and losses are recorded as adjustments to retirement benefits in accumulated other comprehensive
income in net assets after adjusting for tax effects.
④ Adoption of the simplified method in small enterprises, etc.
Certain consolidated subsidiaries apply the simplified method to calculate retirement benefit liabilities and retirement benefit expenses, in which the amount required to be paid at the
end of the fiscal year for retirement benefits is treated as the retirement benefit obligation.
51/98

Securities report
(6) Goodwill amortization method and amortization period
Goodwill is amortized using the straight-line method over the period in which the investment is effective (within 20 years).
(7) Scope of funds in the consolidated statement of cash flows
These are cash on hand, demand deposits, and short-term investments that mature within three months from the date of acquisition,
are highly liquid, easily convertible into cash, and bear only minimal risk of fluctuations in value.
(Additional Information)
Starting from the fiscal year ending September 2024, the Company has changed its segments as follows due to organizational changes. This is an organizational change to
further improve efficiency.
(Old segment) Chemical industrial drugs, clinical test reagents, food, others (New
segment) Industry, medical, academia/life science
(Related to consolidated balance sheet)
*1 Assets pledged as collateral and debts related to collateral
(Assets pledged as collateral)


cash and deposits 28,202 thousand yen 8,202,000 yen
buildings and structures 22,703 thousand yen 21,466 thousand yen
land 258,846 thousand yen 258,846 thousand yen
Investment securities 5,039,000 yen 5,068,000 yen
total 314,791 thousand yen 293,583 thousand yen
(Debts related to collateral)

Notes payable and accounts payable 1,013,696 thousand yen 922,956 thousand yen
*2 Among notes receivable, accounts receivable, and contract assets, the balance of receivables arising from contracts with customers is as follows.
vinegar.

bills recivable 140,992 thousand yen 84,788 thousand yen
accounts receivable 9,272,897 thousand yen 9,484,759 thousand yen
*3 The amount of contract liabilities in “Other” current liabilities is as follows.


contract liability 3,578 thousand yen 3,587 thousand yen
*4 Accounting treatment for notes maturing on the last day of the fiscal year is settled on the note clearing date.
Since the last day of the consolidated fiscal year was a holiday for financial institutions, the following notes, etc. maturing on the last day of the fiscal year are included in the balance at the end of the fiscal year.

bills recivable - 1,000 yen 3,445 thousand yen
bills payable - 1,000 yen 247,909 thousand yen
electronically recorded debt - 1,000 yen 35,720 thousand yen
Electronically recorded debt - 1,000 yen 74,643 thousand yen
52/98

Securities report
(Related to consolidated income statement)
*1 The major items and amounts of selling, general and administrative expenses are as follows.
(self October 1, 2021 (self October 1, 2022

To September 30, 2022) To September 30, 2023)
Salary allowance/executive remuneration 1,535,213 thousand yen 1,574,289 thousand yen
Provision for bonuses 58,100,000 yen 58,450 thousand yen
Retirement benefit costs 51,438 thousand yen 44,380 thousand yen
Provision for director retirement benefits 10,836,000 yen 11,386,000 yen
Provision of allowance for doubtful accounts 179,000 yen △ 1,743 thousand yen
*2 The breakdown of gain on sale of fixed assets is as follows.


vehicle carrier - 1,000 yen 200,000 yen
Tangible fixed assets and others

26,000 yen - 1,000 yen
(Tools, equipment and equipment)
total 26,000 yen 200,000 yen
*3 The breakdown of loss on retirement of fixed assets is as follows.

buildings and structures 30,000 yen 244,000 yen
Tangible fixed assets and others

114,000 yen 0,000 yen
(Tools, equipment and equipment)
total 144,000 yen 244,000 yen
*4 Gain on sale of investment securities
Previous consolidated fiscal year (from October 1, 2021 to September 30, 2022)
These were sold based on the cross-shareholding policy.
Not applicable.
*5 Loss on valuation of investment securities is due to impairment accounting for stocks whose market value or real value has significantly declined.
there is.
53/98

Securities report
*6 The breakdown of impairment loss is as follows.
Not applicable.
place Purpose kinds Amount of money
Hirosaki City, Aomori Prefecture idle assets Telephone subscription rights 454,000 yen
Hirakawa City, Aomori Prefecture idle assets Telephone subscription rights 217,000 yen
total 671,000 yen
(background)
As there are no future plans for the use of idle assets and the value has fallen significantly, an impairment loss was recognized for the idle assets.
(Grouping method)
Idle assets that are not expected to be used in the future are grouped by individual property. (Method of
calculating recoverable amount, etc.)
The recoverable amount of fixed assets for which an impairment loss has been recognized is the net selling price. Telephone subscription rights
are calculated based on Property Valuation Basic Circular 161 (1).
(Related to consolidated statement of comprehensive income)
*Reclassification adjustments and tax effects related to other comprehensive income

Valuation difference on other securities
Amount incurred in the current period △ 304,912 thousand yen 165,770 thousand yen
Reclassification adjustment amount 30,073 thousand yen 2,659,000 yen
Before tax effect adjustment △ 274,838 thousand yen 168,429 thousand yen
Tax effect amount 83,031 thousand yen △ 50,330 thousand yen
Valuation difference on other securities △ 191,807 thousand yen 118,098 thousand yen
Adjustment amount related to retirement benefits
Amount incurred in the current period 3,916,000 yen 6,984 thousand yen
Reclassification adjustment amount 1,102,000 yen 2,449 thousand yen
Before tax effect adjustment 5,018,000 yen 9,434 thousand yen
Tax effect amount △ 1,967 thousand yen △ 2,877 thousand yen
Adjustment amount related to retirement benefits 3,051,000 yen 6,557 thousand yen
Total other comprehensive income △ 188,755 thousand yen 124,655 thousand yen
54/98

Securities report
(Related to consolidated statement of changes in shareholders' equity)
Previous consolidated fiscal year (from October 1, 2021 to September 30, 2022) 1.
Matters regarding issued shares
Type of stock Beginning of current consolidated fiscal year increase decrease End of current consolidated fiscal year
Common stock (shares) 960,000 ― ― 960,000
2 Matters regarding treasury stock
Common stock (shares) 47,977 11,000 ― 58,977

(Summary of reasons for change)
The increase was mainly due to the acquisition of treasury stock based on a resolution of the Board of Directors.
3 Matters regarding stock acquisition rights, etc.
Not applicable.
4 Matters regarding dividends
(1) Dividend payment amount
Total amount of dividends Dividend amount per share

Type of stock Effective date
(circle)
resolution Reference date
(1,000 yen)
December 20, 2021
common stock 95,762 105.00 September 30, 2021 December 21, 2021
Ordinary general meeting of shareholders
(2) Among dividends whose record date falls in the current consolidated fiscal year, the effective date of the dividend is in the next consolidated fiscal year.
Total amount of dividends per share

resolution Type of stock Source of dividend Reference date Effective date
(1,000 yen) Dividend amount (yen)
December 20, 2022

common stock an earned surplus 103,617 115.00 September 30, 2022 December 21, 2022
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Securities report
Current consolidated fiscal year (from October 1, 2022 to September 30, 2023) 1.
Matters regarding issued shares
2 Matters regarding treasury stock
3 Matters regarding stock acquisition rights, etc.
Not applicable.
4 Matters regarding dividends
(1) Dividend payment amount
Total amount of dividends Dividend amount per share

Type of stock Effective date
(circle)
resolution Reference date
(1,000 yen)
December 20, 2022
common stock 103,617 115.00 September 30, 2022 December 21, 2022
(2) Among dividends whose record date falls in the current consolidated fiscal year, the effective date of the dividend is in the next consolidated fiscal year.
Total amount of dividends per share

resolution Type of stock Source of dividend Reference date Effective date
(1,000 yen) Dividend amount (yen)
December 20, 2023

common stock an earned surplus 94,607 105.00 September 30, 2023 December 21, 2023
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Securities report
(Related to consolidated cash flow statement)
* Relationship between the end-of-year balance of cash and cash equivalents and the amounts of items listed on the consolidated balance sheet

cash and deposit accounts 1,407,655 thousand yen 2,195,476 thousand yen
Time deposits with a deposit period of more than 3 months △ 139,202 thousand yen △ 89,202 thousand yen
cash and cash equivalents 1,268,452 thousand yen 2,106,274 thousand yen
(Lease transaction related)
1 Finance lease transactions

(1) Borrower side
Due to lack of importance, description has been omitted.
(2) Lender side
All lease investment assets recorded on the consolidated balance sheet are related to sublease transactions and are recorded at the amount
before interest equivalent is deducted, so the description is omitted.
(3) Amount that corresponds to a sublease transaction and is recorded on the consolidated balance sheet as an amount before deduction of interest equivalent.
① Lease investment assets
current assets 123,287 thousand yen 56,576 thousand yen
Investments and other assets 110,231 thousand yen 69,413 thousand yen
② Lease obligations
Current Liabilities 123,287 thousand yen 56,576 thousand yen
Fixed debt 110,231 thousand yen 69,413 thousand yen
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Securities report
(Financial products related)
1 Matters related to the status of financial products
(1) Policy on financial products

The Company and its consolidated subsidiaries limit their fund management to short-term deposits, etc., and procure funds by borrowing from banks and
other financial institutions.
(2) Details of financial products and their risks
Notes and accounts receivable-trade and electronically recorded monetary claims are exposed to customer credit risk.
Investment securities are primarily stocks of companies with which we have business relationships, and are exposed to the risk of market price fluctuations.
Guarantee deposits are exposed to the credit risk of business partners.
Most of the notes and accounts payable-trade and electronically recorded obligations are due within three months.
Borrowings are used for working capital (mainly short-term) and capital investment funds (long-term).
(3) Risk management system related to financial products
① Management of credit risk (risk related to non-performance of contracts by business partners, etc.)
In accordance with internal regulations, the Company's sales departments in each business division regularly monitor the status of major business partners regarding trade
receivables, manage due dates and balances for each business partner, and monitor deterioration of financial conditions, etc. We are working to quickly identify and alleviate
concerns about recalls. Consolidated subsidiaries also carry out similar management in accordance with the Company's internal regulations.
② Management of market risk (security price fluctuation risk)
Regarding investment securities, we regularly monitor market prices and issuers' financial conditions, and continually review our holdings taking into account
market conditions and relationships with issuers.
③ Management of liquidity risk related to funding (risk of not being able to make payments on due date)
The Company manages liquidity risk by having the responsible department create and update cash flow plans in a timely manner based on reports from each
department and affiliated companies, and by maintaining liquidity on hand.
(4) Supplementary explanation regarding matters related to market value, etc. of financial instruments
The fair value of financial instruments includes values based on market prices and, if market prices are not available, reasonably
calculated values. As variable factors are taken into account when calculating the fair value of financial instruments, the value may fluctuate
due to the adoption of different assumptions, etc.
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Securities report
2 Matters related to the market value of financial instruments, etc.
The carrying amount on the consolidated balance sheet, the market value, and the difference between these are as follows.
Previous consolidated fiscal year (September 30, 2022)
Consolidated balance sheet amount (*) Market price (※) difference
(1)Investment securities
Other securities 1,399,007 1,399,007 ―

(2)Long-term debt (55,970) (56,729) 759
(*) Items recorded as liabilities are indicated in parentheses.
Current consolidated fiscal year (September 30, 2023)
Consolidated balance sheet amount (*) Market price (※) difference
(1)Investment securities
Other securities 1,601,979 1,601,979 ―

(2)Long-term debt (41,690) (42,547) 857
(*) Items recorded as liabilities are indicated in parentheses.
(Note 1) Notes are omitted for cash; deposits, notes receivable, accounts receivable and contract assets, electronically recorded receivables, notes and accounts payable, electronic
Notes are omitted for recorded obligations and short-term loans payable because they are settled in a short period of time and their fair value approximates their book value.
(Note 2) Stocks, etc. without market prices are not included in "(1) Investment securities." Consolidated balance sheet total for the financial instrument
The upper amount is as follows.

classification Previous consolidated fiscal year (thousand yen) Current consolidated fiscal year (thousand yen)
unlisted stocks 14,972 14,952

Investment business limited liability partnership investment 20,000 17,000
(Note 3) “(2) Long-term loans payable” includes loans scheduled to be repaid within one year.
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Securities report
(Note 4) Scheduled redemption amount of monetary claims and securities with maturity after the consolidated closing date
Within 1 year More than 1 year and less than 5 years More than 5 years but less than 10 years Over 10 years
cash and deposits 1,407,655 ― ― ―

Notes receivable, accounts receivable and contract assets 9,413,890 ― ― ―
electronically recorded debt 297,093 ― ― ―
Investment securities
Other securities with a maturity date

Bonds (corporate bonds) ― ― 4,999 ―
others 3,999 ― ― ―
total 11,122,638 ― 4,999 ―
Within 1 year More than 1 year and less than 5 years More than 5 years but less than 10 years Over 10 years
cash and deposits 2,195,476 ― ― ―

Notes receivable, accounts receivable and contract assets 9,569,548 ― ― ―
electronically recorded debt 362,903 ― ― ―
Other securities with a maturity date

Bonds (corporate bonds) ― 10,000 ― ―
others ― ― ― ―
total 12,127,929 10,000 ― ―
(Note 5) Scheduled repayment amount of long-term loans payable and other interest-bearing debt after the consolidated closing date
Within 1 year More than 1 year but less than 2 years More than 2 years but less than 3 years More than 3 years but less than 4 years More than 4 years but less than 5 years Over 5 years
short-term borrowings 170,800 ― ― ― ― ―

long-term debt 14,280 14,280 14,280 13,130 ― ―
total 185,080 14,280 14,280 13,130 ― ―
Within 1 year More than 1 year but less than 2 years More than 2 years but less than 3 years More than 3 years but less than 4 years More than 4 years but less than 5 years Over 5 years
short-term borrowings 233,400 ― ― ― ― ―

long-term debt 14,280 14,280 13,130 ― ― ―
total 247,680 14,280 13,130 ― ― ―
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Securities report
3 Matters related to the breakdown of market values of financial instruments by level, etc.
The fair value of financial instruments is classified into the following three levels depending on the observability and materiality of the inputs involved in
calculating the fair value.
Level 1 market value: Of the inputs related to the calculation of observable market value, the calculation of the relevant market value formed in an active market
The market value calculated from the market price of the asset or liability subject to the
Level 2 market value: Of the inputs related to the calculation of observable market value, those related to the calculation of market value other than level 1 inputs.
Market value calculated using inputs

Level 3 market value: Fair value calculated using unobservable inputs related to the calculation of market value. If multiple inputs that have
a significant impact on the calculation of market value are used, the level to which each of those inputs belongs , the market value is
classified into the lowest priority level in calculating the market value.
① Financial assets and financial liabilities with market value as the carrying amount on the consolidated balance sheet Previous
consolidated fiscal year (September 30, 2022)
Market price (thousand yen)

classification
level 1 level 2 level 3 total

Other securities 1,399,007 ― ― 1,399,007

classification

Other securities 1,601,979 ― ― 1,601,979
② Financial assets and financial liabilities whose fair value is not included in the carrying amount on the consolidated balance sheet

classification

long-term debt - 56,729 - 56,729

classification

long-term debt ― 42,547 ― 42,547
(Note) Explanation of valuation techniques used to calculate market value and inputs related to calculation of market value
Listed stocks are valued using market prices. Since listed stocks are traded on active markets, their market value is
classified as Level 1 market value.
long-term debt
The fair value of long-term loans payable is calculated based on the present value of the total amount of principal and interest discounted at the interest rate
expected in the case of a similar new transaction, and the fair value is classified as Level 2 market value. .
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Securities report
(Securities related)
1 Other securities
As of the consolidated closing date
classification Consolidated balance sheet amount Acquisition cost (thousand yen) Difference (thousand yen)
(1,000 yen)
The amount recorded on the consolidated balance sheet is
More than acquisition cost
① Stocks 1,338,431 497,707 840,723
② Bonds ― ― ―
③ Others ― ― ―
subtotal 1,338,431 497,707 840,723
not exceeding the acquisition cost
① Stocks 51,577 62,968 △ 11,391
② Bonds 4,999 5,000 △0
③ Others 3,999 4,918 △918
subtotal 60,576 72,886 △ 12,310
total 1,399,007 570,594 828,413
(Note) 1 “Acquisition cost” in the table is the book value after accounting for impairment losses. Unlisted stocks, etc. (consolidated balance sheet
2 amount: 14,972,000 yen) have no market price and are considered extremely difficult to determine, so they are included in "Other
securities" in the table above. not.
As of the consolidated closing date
classification Consolidated balance sheet amount Acquisition cost (thousand yen) Difference (thousand yen)
(1,000 yen)
More than acquisition cost
① Stocks 1,504,094 495,849 1,008,244
② Bonds ― ― ―
subtotal 1,504,094 495,849 1,008,244

not exceeding the acquisition cost
① Stocks 87,990 96,286 △ 8,296
② Bonds 9,894 10,000 △ 105
subtotal 97,885 106,286 △ 8,401
total 1,601,979 602,136 999,842
(Note) 1 “Acquisition cost” in the table is the book value after accounting for impairment losses. Unlisted stocks, etc. (consolidated balance sheet
2 amount: 14,952,000 yen) have no market price and are considered extremely difficult to determine, so they are included in "Other
securities" in the table above. not.
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Securities report
2 Other securities sold during the consolidated fiscal year
Sales amount Total amount of gain on sale Total loss on sale

classification
(1,000 yen) (1,000 yen) (1,000 yen)
stock 255 206 ―

bond ― ― ―
others ― ― ―
total 255 206 ―
Sales amount Total amount of gain on sale Total loss on sale

classification
(1,000 yen) (1,000 yen) (1,000 yen)
stock 20 ― ―
bond 5,000 ― ―
others 3,686 ― 1,232
total 8,706 ― 1,232
3. Securities subject to impairment accounting
The amount of impairment loss for the previous fiscal year was 30,507 thousand yen (30,507 thousand yen for stocks). The amount of impairment loss for the current consolidated
fiscal year was 1,426 thousand yen (1,426 thousand yen for stocks).
The criteria for determining that the market value has "decreased significantly" is that if the market price as of the end of the consolidated fiscal year has decreased by 50% or more
compared to the acquisition cost, all stocks are judged to have declined significantly; If the stock price has declined by less than 10%, the judgment is made by taking into account
market price trends over a certain period of time and the business performance of the issuing company.
(Related to derivative transactions)
There are no applicable matters as the Company and its consolidated subsidiaries do not use derivative transactions at all.
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Securities report
(retirement benefits related)
1 Overview of the retirement benefit system adopted
The Company and its consolidated subsidiaries have adopted a funded defined benefit plan and a defined contribution plan to allocate retirement benefits to
employees.
Defined benefit corporate pension plans (all of which are funded plans) provide lump-sum payments or pension payments based on salary and
length of service.
Under the lump-sum retirement benefit system (all of which are unfunded), a lump-sum retirement benefit is paid based on
salary and length of service.
For defined benefit corporate pension plans and retirement lump sum plans owned by some consolidated subsidiaries, retirement benefit liabilities and
retirement benefit costs are calculated using the simplified method.
2. Defined benefit plans (excluding plans to which the simplified method is applied) (1) Reconciliation
table of beginning balance and end-of-year balance of retirement benefit obligations

Beginning balance of retirement benefit obligations 781,926 thousand yen 720,663 thousand yen
working expenses 38,348 thousand yen 37,146 thousand yen
interest expense 4,501,000 yen 4,148 thousand yen
Amount of actuarial gains and losses △ 9,043 thousand yen △ 5,985 thousand yen
Amount of retirement benefits paid △ 95,069 thousand yen △ 68,092 thousand yen
Ending balance of retirement benefit obligations 720,663 thousand yen 687,881 thousand yen
(2) Reconciliation table of beginning balance and ending balance of pension assets

Beginning balance of pension assets 707,530 thousand yen 651,792 thousand yen
Expected operating income 7,075 thousand yen 6,517 thousand yen
Amount of actuarial gains and losses △ 5,127 thousand yen 999,000 yen
Contribution amount from employer 37,383 thousand yen 38,861 thousand yen
Ending balance of pension assets 651,792 thousand yen 630,078 thousand yen
(3) Reconciliation statement of the end-of-year balance of retirement benefit obligations and pension assets and the retirement benefit liabilities and retirement benefit assets recorded on the
consolidated balance sheet.

Retirement benefit obligations for funded plans 720,663 thousand yen 687,881 thousand yen
pension assets △ 651,792 thousand yen △ 630,078 thousand yen
Liabilities and equity recorded on the consolidated balance sheet

68,871 thousand yen 57,802 thousand yen
net amount of production
Liabilities related to retirement benefits 68,871 thousand yen 57,802 thousand yen

68,871 thousand yen 57,802 thousand yen
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Securities report
(4) Amounts of retirement benefit expenses and their sub-items

working expenses 38,348 thousand yen 37,146 thousand yen
interest expense 4,501,000 yen 4,148 thousand yen
Expected operating income △ 7,075 thousand yen △ 6,517 thousand yen
Expense amount of actuarial gains and losses 1,102,000 yen 2,449 thousand yen
Retirement benefit costs related to defined benefit plans 36,877 thousand yen 37,227 thousand yen
(5) Adjustment amount related to retirement benefits
The breakdown of items recorded in retirement benefit adjustments (before tax effect deductions) is as follows.

Actuarial differences △ 5,018 thousand yen △ 9,434 thousand yen
total △ 5,018 thousand yen △ 9,434 thousand yen
(6) Cumulative adjustment amount related to retirement benefits
The breakdown of items recorded in cumulative retirement benefit adjustments (before deduction of tax effects) is as follows.

Unrecognized actuarial differences 2,157 thousand yen △ 7,276 thousand yen
total 2,157 thousand yen △ 7,276 thousand yen
(7) Matters regarding pension assets

① Main breakdown of pension assets
The ratio of each major category to total pension assets is as follows.

bond 9% Ten%
stock 6% Five%
general account 85% 84%

others -% 1%
total 100% 100%
② How to set the long-term expected rate of return
To determine the expected long-term rate of return on plan assets, we consider the current and expected allocation of plan assets and the current
and expected long-term rates of return from the various assets that make up plan assets. .
(8) Matters regarding the basics of actuarial calculations

Major actuarial calculation bases as of the end of the current consolidated fiscal year (expressed as a weighted average)

Discount rate 0.58% 0.58%

Long-term expected return on investment 1.0% 1.0%
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3 Defined benefit plan applying the simplified method
(1) Reconciliation table of the beginning balance and end-of-year balance of retirement benefit liability for plans applying the simplified method

Beginning balance of retirement benefit liability 25,405 thousand yen 21,970,000 yen
Amount contributed to the plan △ 3,225 thousand yen △ 3,447 thousand yen
Ending balance of retirement benefit liability 21,970,000 yen 22,041 thousand yen
(2) Reconciliation statement of the end-of-year balance of retirement benefit obligations and pension assets and the retirement benefit liabilities and retirement benefit assets recorded on the
consolidated balance sheet.

Retirement benefit obligations for funded plans 93,625 thousand yen 93,383 thousand yen
pension assets △ 71,655 thousand yen △ 71,341 thousand yen

21,970,000 yen 22,041 thousand yen
Liabilities related to retirement benefits 21,970,000 yen 22,041 thousand yen

21,970,000 yen 22,041 thousand yen
(3) Retirement benefit costs
Retirement benefit expenses calculated using the simplified method: 12,723 thousand yen in the previous fiscal year, 6,861 thousand yen in the current fiscal year
4 Defined contribution plan
The amount required to be contributed to defined contribution plans by some consolidated subsidiaries was 1,680,000 yen in the previous fiscal year and 972,000 yen in the current fiscal year.
(related to stock options, etc.)

Not applicable.
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Securities report
(Tax effect accounting related)
1 Breakdown of deferred tax assets and deferred tax liabilities by main cause

Deferred tax asset
business taxes payable 10,515,000 yen 7,831 thousand yen
Reserve for bonuses 18,585 thousand yen 18,351 thousand yen
Allowance for doubtful accounts 7,891 thousand yen 6,142 thousand yen
Liabilities related to retirement benefits 28,605 thousand yen 25,194 thousand yen
Reserve for directors' retirement benefits 41,085 thousand yen 44,467 thousand yen
Impairment loss 64,537 thousand yen 64,749 thousand yen
Loss on valuation of investment securities 25,601 thousand yen 25,364 thousand yen
Loss on evaluation of membership rights 4,293 thousand yen 3,988,000 yen
accrued expenses 3,047,000 yen 2,938,000 yen
Tax loss carryforwards (Note) 2 28,229 thousand yen 4,065,000 yen
others 16,405 thousand yen 5,443 thousand yen
Deferred tax asset subtotal 248,797 thousand yen 208,537 thousand yen
Valuation allowance for tax loss carryforwards (Note 2) △ 28,229 thousand yen △ 4,065 thousand yen
Valuation allowance related to total deductible temporary differences, etc. △ 163,149 thousand yen △ 150,635 thousand yen
Valuation allowance subtotal (Note) 1 △ 191,379 thousand yen △ 154,701 thousand yen
Total deferred tax assets 57,417 thousand yen 53,836 thousand yen
Deferred tax liability
Valuation difference on other securities 248,458 thousand yen 298,788 thousand yen
Fixed asset reduction reserve fund 37,888 thousand yen 37,888 thousand yen
Total deferred tax liability 286,346 thousand yen 336,677 thousand yen
Net deferred tax liability 228,928 thousand yen 282,841 thousand yen
(Note) 1 Because changes in the amount deducted from deferred tax assets (valuation allowance) are immaterial, the main details of the
changes have been omitted.
(Note) 2 Amounts of tax loss carryforwards and their deferred tax assets by carryforward deadline
Over 1 year Over 2 years Over 3 years Over 4 years

Within 1 year Over 5 years total
Within 2 years Within 3 years Within 4 years Within 5 years
Tax loss carryforward(a) ― 1,960 491 1,463 7,490 16,825 28,229 thousand yen
Valuation allowance ― △ 1,960 △ 491 △ 1,463 △ 7,490 △ 16,825 △ 28,229 thousand yen
Deferred tax asset ― ― ― ― ― ― - 1,000 yen
(a) Tax loss carryforwards are the amount multiplied by the effective statutory tax rate.
Over 1 year Over 2 years Over 3 years Over 4 years

Within 1 year Over 5 years total
Within 2 years Within 3 years Within 4 years Within 5 years
Tax loss carryforwards (b) ― ― 230 2,486 1,348 ― 4,065,000 yen
Valuation allowance ― ― △ 230 △ 2,486 △ 1,348 ― △ 4,065 thousand yen
Deferred tax asset ― ― ― ― ― ― - 1,000 yen
(b) Tax loss carryforwards are the amount multiplied by the effective statutory tax rate.
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Securities report
2 Breakdown of major items that caused the difference between the statutory effective tax rate and the corporate tax burden rate after applying tax effect accounting

Statutory effective tax rate 30.5% 30.5%
(adjustment)
Items that are permanently excluded from deductions such as entertainment expenses 0.3% 0.6%
Resident tax per capita 1.4% 1.7%
Increase/decrease in valuation allowance △3.6% △1.4%
Items that are permanently excluded from income, such as dividends received △ 0.2% △ 0.3%
Impact of tax credits △ 1.1% △ 0.2%
others 2.8% △ 1.2%
Corporate tax burden rate after applying tax effect accounting 30.1% 29.6%
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Securities report
(Related to business combinations, etc.)
Transactions under common control, etc.
(Absorption-type merger of consolidated subsidiaries)
At the board of directors meeting held on November 14, 2022, the Company resolved to absorb Tohoku System Co., Ltd., a consolidated subsidiary
of the Company, and entered into a merger agreement on the same date. We have merged with you. (1) Transaction summary
① Name of the company to be combined and details of the business concerned
Name of the company to be combined Tohoku System Co., Ltd.
Business details Sales of industrial chemicals, clinical test reagents, and related equipment
② Business combination date
April 1, 2023
③ Legal form of business combination
Absorption-type merger with the Company as the surviving company and Tohoku System Co., Ltd. as the dissolving company
④ Name of the combined company
Tohoku Chemical Co., Ltd.
⑤ Other matters related to the outline of the transaction
By absorbing Tohoku System Co., Ltd., we will aim to improve management efficiency.
(2) Overview of the accounting treatment performed
“Accounting Standards for Business Combinations” (ASBJ Statement No. 21, January 16, 2019) and “Application Guidelines for Business Combination
Accounting Standards and Business Separation Accounting Standards” (ASBJ Application Guidelines No. 10, January 2019) 16), and are treated as
transactions under common control.
(Asset retirement obligation related)
Due to its lack of importance, notes have been omitted.
(Rental and other real estate related)
Due to its lack of importance, notes have been omitted.
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Securities report
(Revenue recognition related)
(1) Information disaggregating revenue generated from contracts with customers
(Unit: 1,000 yen)
Reportable segment
total
chemical industrial chemicals clinical test reagents food others
Private general company 14,308,550 1,090,306 2,257,617 4,100 17,660,574

Government office 909,827 958,057 121,904 ― 1,989,789
Medical institution ― 12,945,646 926,930 ― 13,872,576
Universities, educational and research facilities 2,517,250 ― ― ― 2,517,250
agricultural cooperatives, markets ― ― ― 307,290 307,290
others 270,122 643,976 73 72,247 986,420
Revenue from contracts with customers 18,005,751 15,637,986 3,306,525 383,638 37,333,902
Sales to external customers 18,005,751 15,637,986 3,306,525 383,638 37,333,902
(Unit: 1,000 yen)
Reportable segment
total
chemical industrial chemicals clinical test reagents food others
Private general company 13,716,339 1,123,672 2,351,282 2,580 17,193,874

Government office 1,331,884 743,417 137,274 ― 2,212,577
Medical institution ― 11,803,342 846,999 ― 12,650,341
Universities, educational and research facilities 1,728,523 ― ― ― 1,728,523
agricultural cooperatives, markets ― ― ― 276,041 276,041
others 394,822 534,996 12,491 90,958 1,033,269

Revenue from contracts with customers 17,171,570 14,205,429 3,348,048 369,579 35,094,627
Sales to external customers 17,171,570 14,205,429 3,348,048 369,579 35,094,627
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(2) Information that serves as the basis for understanding earnings
The information that serves as the basis for understanding revenue is as described in `Ìnformation on important matters, etc. that form the basis for preparing consolidated 3.
financial statements, Matters related to accounting policies, (4) Standards for recording income and expenses.''
(3) Information for understanding the amount of revenue for the current consolidated fiscal year and the next consolidated fiscal year
① Balance of contract debt
Information regarding contract liabilities of the Company and its consolidated subsidiaries is omitted as their balances are immaterial and no
significant changes have occurred. Additionally, the revenue recognized in the current fiscal year from performance obligations satisfied (or
partially satisfied) in prior periods is immaterial.
② Transaction price allocated to remaining performance obligations
The Company and its consolidated subsidiaries have applied a practical expedient and omitted the transaction price allocated to the remaining performance obligations
because there are no significant contracts with an initially expected contract period of more than one year. I'm here. Additionally, there are no significant amounts of
consideration arising from contracts with customers that are not included in the transaction price.
① Balance of contract debt
Information regarding contract liabilities of the Company and its consolidated subsidiaries is omitted as their balances are immaterial and no
significant changes have occurred. Additionally, the revenue recognized in the current fiscal year from performance obligations satisfied (or
partially satisfied) in prior periods is immaterial.
② Transaction price allocated to remaining performance obligations
The Company and its consolidated subsidiaries have applied a practical expedient and omitted the transaction price allocated to the remaining performance obligations
because there are no significant contracts with an initially expected contract period of more than one year. I'm here. Additionally, there are no significant amounts of
consideration arising from contracts with customers that are not included in the transaction price.
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(Segment information, etc.)
[Segment information]
1 Overview of reportable segments
The reportable segments of the Company and its consolidated subsidiaries are constituent units of the Company and its consolidated subsidiaries for which separate financial
information is available and is regularly reviewed by the Board of Directors to determine the allocation of management resources and evaluate performance. This is the subject of the
following.
The Company and its consolidated subsidiaries sell chemical industrial chemicals and chemical industrial chemical-related equipment, clinical test reagents and
clinical test reagent-related equipment, food and food-related equipment, and agricultural chemicals and agricultural chemical-related equipment. Each sales group
formulates strategies for the products it handles and develops sales activities. Therefore, our reporting segments consist of ``Chemical and Industrial Pharmaceuticals,''
``Clinical Test Reagents,'' ``Food,'' and `Òthers (Pesticides).''
2. Calculation method for sales, profits or losses, assets, liabilities, and other items for each reportable segment
The accounting method for the reported business segments is generally the same as described in “Important matters underlying the preparation of
consolidated financial statements.”
Please note that the Company and its consolidated subsidiaries do not allocate assets to business segments.
3 Information regarding the amount of sales and profit or loss by reportable segment
Reportable segment
Consolidated profit and loss calculation
Adjustment amount
Book value (Note)
chemical industrial chemicals clinical test reagents food others total
amount of sales
Sales to external customers 18,005,751 15,637,986 3,306,525 383,638 37,333,902 ― 37,333,902
Internal sales between segments

― ― ― ― ― ― ―
or transfer amount
total 18,005,751 15,637,986 3,306,525 383,638 37,333,902 ― 37,333,902
segment profit 1,584,421 1,577,069 251,390 60,107 3,472,990 ― 3,472,990
(Note) Segment profit is the same as gross profit on the consolidated statement of income.
Reportable segment
Consolidated profit and loss calculation
Adjustment amount
Book value (Note)
chemical industrial chemicals clinical test reagents food others total
amount of sales
Sales to external customers 17,171,570 14,205,429 3,348,048 369,579 35,094,627 ― 35,094,627
Internal sales between segments

― ― ― ― ― ― ―
or transfer amount
total 17,171,570 14,205,429 3,348,048 369,579 35,094,627 ― 35,094,627
segment profit 1,511,820 1,512,169 260,536 59,925 3,344,452 ― 3,344,452
(Note) Segment profit is the same as gross profit on the consolidated statement of income.
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【Related information】
1 Information by product and service
This information is omitted because similar information is disclosed in segment information.
2 Information by region
(1) Sales
This information is omitted as there are no sales to external customers outside Japan.
(2) Tangible fixed assets
Information is omitted as there are no tangible fixed assets located outside of Japan.
3 Information on each major customer
Of the sales to external customers, this information is omitted because there are no customers that account for more than 10% of the sales in the consolidated statement of
income.
1 Information by product and service
This information is omitted because similar information is disclosed in segment information.
2 Information by region
(1) Sales
This information is omitted as there are no sales to external customers outside Japan.
(2) Tangible fixed assets
Information is omitted as there are no tangible fixed assets located outside of Japan.
3 Information on each major customer
Of the sales to external customers, this information is omitted because there are no customers that account for more than 10% of the sales in the consolidated statement of
income.
[Information regarding impairment losses on fixed assets by reportable segment]
Not applicable.
Not applicable.
[Information regarding goodwill amortization amount and unamortized balance by reportable segment]
Not applicable.
[Information regarding gain on negative goodwill by reportable segment]
Not applicable.
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Securities report
[Related party information]
1 Related party transactions
Transactions between consolidated subsidiaries of the company submitting consolidated
financial statements and related parties Previous fiscal year (from October 1, 2021 to
September 30, 2022) Not applicable.
Current consolidated fiscal year (from October 1, 2022 to September
30, 2023) Not applicable.
2 Notes regarding parent company or significant affiliated company
Not applicable.
(Per share information)

Net assets per share 7,330 yen 63 sen 7,971 yen 19 sen
Net income per share 728 yen 76 sen 617 yen 29 sen
(Note) 1 Diluted net income per share is not stated as there are no diluted shares. The basis for calculating net
2 income per share is as follows.
item (self October 1, 2021 (self October 1, 2022

Net income attributable to parent company shareholders related to common stock
Attributable to parent company shareholders on the consolidated statement of income

657,620 556,194
Net income (thousand yen)
Amount not attributable to common shareholders (thousand yen) ― ―

Attributable to parent company shareholders related to common stock
657,620 556,194
Net income (thousand yen)
Average number of common shares during the period (shares) 902,379 901,023
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⑤ [Consolidated supplementary schedule]
[Corporate bond schedule]
Not applicable.
[Details of borrowings, etc.]
Balance at the beginning of the current

Balance
periodat end of current period average interest rate
(%)
classification Repayment deadline
(1,000 yen) (1,000 yen)
short-term borrowings 170,800 233,400 0.58 ─

Long-term loans scheduled to be repaid within one year 14,280 14,280 0.58 ─
Lease obligations due within one year 155,723 99,378 ─ ─
October 2024
Long-term loans (excluding those scheduled to be repaid within one year) 41,690 27,410 0.58
~August 2026
October 2024
Lease obligations (excluding those scheduled to be repaid within one year) 214,998 201,836 ─
~October 2031
Other interest-bearing debt ― ― ─ ─
total 597,491 576,304 ─ ─
(Note) 1 The average interest rate for borrowings is the weighted average interest rate for the balance at the end of the period. The average interest rate of
2 lease obligations is not stated because lease obligations are recorded on the consolidated balance sheet at the amount before deducting the amount
equivalent to interest included in the total lease payments.
3 The scheduled repayment amount of long-term loans payable and lease obligations (excluding those scheduled to be repaid within one year) for five years after
the consolidated closing date is as follows.
More than 1 year but less than 2 years More than 2 years but less than 3 years More than 3 years but less than 4 years More than 4 years but less than 5 years Over 5 years
(1,000 yen) (1,000 yen) (1,000 yen) (1,000 yen) (1,000 yen)
long-term debt 14,280 13,130 ― ― ―
lease obligation 71,527 48,877 40,517 24,365 16,548
[Asset retirement obligation schedule]
Omitted because the amount of asset retirement obligations at the beginning of the current consolidated fiscal year and the end of the current consolidated fiscal year is less than 1/100 of
the total amount of liabilities and net assets at the beginning of the current consolidated fiscal year and the end of the current consolidated fiscal year. Doing.
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Securities report
(2) [Others]
Quarterly information, etc. for the current consolidated fiscal year
(cumulative period) 1st quarter 2nd quarter 3rd quarter Current consolidated fiscal year
amount of sales (1,000 yen) 9,409,299 18,445,860 26,933,249 35,094,627
Before tax adjustment

(1,000 yen) 271,409 551,652 706,928 804,659
Quarterly (current period) net income
Attributes to parent company shareholders

(1,000 yen) 182,284 366,905 499,023 556,194
per share
(circle) 202.31 407.21 553.84 617.29
(accounting period) 1st quarter 2nd quarter 3rd quarter 4th quarter
per share
(circle) 202.31 204.90 146.63 63.45
Quarterly net income
76/98

Securities report
2 [Financial statements, etc.]
(1) [Financial statements]
① [Balance sheet]
Previous business year Current fiscal year
Assets section
current assets
cash and deposits 1,252,377 2,056,940

bills recivable 126,270 ※Four 75,004
electronically recorded debt 288,320 ※Four 357,513
accounts receivable *3 7,092,920 *3 6,975,321
merchandise 910,738 922,417
others *3 61,049 *3 66,265
Allowance for doubtful accounts △ 1,697 ―
Total current assets 9,853,268 10,510,041
Fixed asset
Tangible fixed assets
building *1 265,353 *1 330,323

construct 5,139 5,623
vehicle carrier 2,975 2,760
tools, equipment and equipment 321,834 328,531
land *1 1,169,449 *1 1,169,449
Leased asset 96,766 107,774
Total tangible fixed assets 1,861,518 1,944,462
Intangible fixed assets
Software suspense account 192,845 419,885

Total intangible fixed assets 192,845 419,885
Investments and other assets
Investment securities *1 1,425,711 *1 1,624,751

Affiliated company stocks 131,500 106,500
long term loan 3,410 3,290
Guarantee deposit 447,125 452,468
others 75,298 69,406
Allowance for doubtful accounts △ 24,175 △ 20,140
Total investments and other assets 2,169,101 2,305,690
Total fixed assets 4,223,465 4,670,038
Total assets 14,076,734 15,180,079
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Securities report
debt section
Current Liabilities
bills payable 71,725 ※Four 312,691

Electronically recorded debt *3 227,722 *3, 4 257,396
Accounts payable *1, 3 6,199,062 *1, 3 6,618,150
Accounts payable 188,172 149,505
accrued expenses *3 51,805 *3 74,851
Accrued corporate taxes, etc. 176,409 86,628
Reserve for bonuses 30,600 30,950
others 88,838 131,104
Total current liabilities 7,181,328 7,745,539
Fixed debt
Deferred tax liability 207,438 269,552
Reserve for retirement benefits 67,426 65,599
Reserve for directors' retirement benefits 98,629 104,804
others 41,424 38,945
Total fixed liabilities 599,350 629,284
Total debt 7,780,679 8,374,823
Of Net Assets
capital 820,400 820,400

capital surplus
capital reserve 881,100 881,100

Total capital surplus 881,100 881,100
an earned surplus
profit reserve 105,000 105,000

Other retained earnings
Fixed asset reduction reserve fund 36,569 36,569

Separate reserve fund 3,350,000 3,825,000
Retained earnings carried forward 693,087 609,620
Total retained earnings 4,184,656 4,576,189
Treasury stock △ 168,907 △ 168,907
Total shareholders' equity 5,717,249 6,108,782
Valuation/exchange differences, etc.
Valuation difference on other securities 578,805 696,473

Total valuation/exchange differences, etc. 578,805 696,473
Total net assets 6,296,054 6,805,255
Total debt and net assets 14,076,734 15,180,079
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Securities report
② [Profit and loss statement]

amount of sales *1 28,359,730 *1 27,384,835
Cost of sales *1 25,703,039 *1 24,747,632
gross profit 2,656,691 2,637,202
Selling, general and administrative expenses *2 1,864,697 *2 1,950,056
Operating income 791,994 687,146
Non-operating income
Interest income *1 2,668 *1 3,471

Dividend income 35,717 43,212
Fee received 5,979 7,109
others *1 11,920 *1 5,693
Total non-operating income 56,286 59,486
Non-operating expenses
Interest expense 39 270

Commission paid 2,279 2,274
Miscellaneous losses 97 5,440
Total non-operating expenses 2,416 7,985
Ordinary profit 845,864 738,646
special profit
Gain on sale of fixed assets *3 26 *3 200

Gain on sale of investment securities ※Four 206 ―
Investment partnership operating profit 1,595 ―
Total extraordinary profit 1,828 200
extraordinary loss
Loss on retirement of fixed assets 144 244

Loss on sale of investment securities ― 1,232
Loss on valuation of investment securities ※Five 30,507 ※Five 1,426
Impairment loss ― 454
Loss on sale of golf memberships ― 300
Loss on extinguishment of tied shares ― 16,227
Total extraordinary loss 30,652 19,885
Net income before tax 817,040 718,961
Corporate tax, resident tax and business tax 269,707 211,810
Corporate tax adjustment amount 429 12,000
Total corporate taxes, etc. 270,136 223,811
net income 546,903 495,150
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Securities report
③ [Statement of changes in shareholders' equity]
Previous business year (from October 1, 2021) (To September 30, 2022)
capital surplus an earned surplus

capital capital surplus Retained earnings
capital reserve profit reserve Fixed assets reduction retained earnings carried forward
total total
Separate reserve fund
deposit Money
Balance at the beginning of the current period 820,400 881,100 881,100 105,000 36,569 3,020,000 533,632 3,695,201
Due to changes in accounting policies
38,314 38,314
cumulative impact amount
Reflecting changes in accounting policies

820,400 881,100 881,100 105,000 36,569 3,020,000 571,946 3,733,515
Separate reserve fund 330,000 △ 330,000 ―
Dividend of surplus △ 95,762 △ 95,762
net income 546,903 546,903
Acquisition of treasury stock
Current period change (net

amount)
Total amount of changes for the current period ― ― ― ― ― 330,000 121,140 451,140
Balance at end of current period 820,400 881,100 881,100 105,000 36,569 3,350,000 693,087 4,184,656
Shareholders' equity Valuation/exchange differences, etc.
Total net assets

Other securities Evaluation/conversion difference
Treasury stock Total shareholders' equity
Ticket valuation difference Total amount etc.
Balance at the beginning of the current period △ 133,566 5,263,135 770,186 770,186 6,033,321
Due to changes in accounting policies
38,314 38,314
cumulative impact amount
Reflecting changes in accounting policies

△ 133,566 5,301,449 770,186 770,186 6,071,635
Separate reserve fund ― ―
net income 546,903 546,903
Acquisition of treasury stock △ 35,340 △ 35,340 △ 35,340

Current period change (net △ 191,381 △ 191,381 △ 191,381

amount)
Total amount of changes for the current period △ 35,340 415,800 △ 191,381 △ 191,381 224,418
Balance at end of current period △ 168,907 5,717,249 578,805 578,805 6,296,054
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Securities report
Current fiscal year (from October 1, 2022) (To September 30, 2023)
capital surplus an earned surplus

capital capital surplus Retained earnings
capital reserve profit reserve Fixed assets reduction retained earnings carried forward
total total
Separate reserve fund
deposit Money
Balance at the beginning of the current period 820,400 881,100 881,100 105,000 36,569 3,350,000 693,087 4,184,656
Separate reserve fund 475,000 △ 475,000 ―
net income 495,150 495,150
Acquisition of treasury stock
Current period change (net

amount)
Total amount of changes for the current period ― ― ― ― ― 475,000 △ 83,467 391,532
Balance at end of current period 820,400 881,100 881,100 105,000 36,569 3,825,000 609,620 4,576,189
Shareholders' equity Valuation/exchange differences, etc.
Total net assets

Other securities Evaluation/conversion difference
Treasury stock Total shareholders' equity
Ticket valuation difference Total amount etc.
Balance at the beginning of the current period △ 168,907 5,717,249 578,805 578,805 6,296,054
Separate reserve fund ― ―
net income 495,150 495,150
Acquisition of treasury stock ― ― ―

Current period change (net 117,668 117,668 117,668

amount)
Total amount of changes for the current period ― 391,532 117,668 117,668 509,201
Balance at end of current period △ 168,907 6,108,782 696,473 696,473 6,805,255
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Securities report
[Notes]
(Significant accounting policies)
1 Asset evaluation standards and methods
(1) Securities valuation standards and valuation methods
① Subsidiary stocks
② Other securities
Things other than stocks, etc. that have no market price
Market value method (All valuation differences are accounted for directly into net assets, and the cost of sales is calculated using the moving average method.) Stocks,
etc. without market prices
Furthermore, for investments in investment business limited partnerships (which are considered securities pursuant to Article 2, Paragraph 2 of the Financial Instruments and Exchange
Act), the most recent financial statements available according to the financial reporting date stipulated in the partnership contract. The method is to incorporate the amount equivalent to the
equity in the net amount based on the book.
(2) Inventory evaluation standards and methods
Cost method based on the gross average method (for balance sheet values, the book value is written down based on a decline in profitability)
2 Method of depreciation of fixed assets
(1) Tangible fixed assets (excluding leased assets)
Declining balance method
However, buildings acquired on or after April 1, 1998 (excluding facilities attached to buildings) and buildings, attached facilities, and structures acquired on or
after April 1, 2016 are depreciated using the straight-line method.
The main useful lives are as follows.

building 7 years to 40 years
(2) Intangible fixed assets (excluding leased assets)
For software (for internal use), straight-line method based on the usable period within the company (within 5 years)
(3) Lease assets

Lease assets related to finance lease transactions that do not transfer ownership
Straight line method where the lease term is the useful life and the residual value is zero.
3 Standards for recording reserves
(1) Allowance for doubtful accounts
In order to prepare for losses due to bad debts on receivables, we record the estimated uncollectible amount based on the historical default rate for general
receivables, and examine the collectability of specific receivables such as doubtful debts on an individual basis.
(2) Reserve for bonuses
In order to allocate the expenditure for bonuses paid to employees, the amount borne by the current fiscal year out of the estimated payment amount is recorded.
(3) Reserve for retirement benefits
To prepare for retirement benefits for employees, an amount is recorded based on the estimated amount of retirement benefit obligations and pension assets at the end of the current fiscal
year.
The method of attributing estimated retirement benefits to periods is based on the straight-line period basis.
In addition, for actuarial differences, the amount is prorated using the straight-line method over a certain number of years (5 years) within the average remaining service
period of employees at the time of occurrence in each business year, and is depreciated from the following business year. We are processing it.
(4) Reserve for directors' retirement benefits
In order to prepare for the payment of retirement benefits to executives, the amount required to be paid at the end of the fiscal year based on internal regulations is recorded.
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Securities report
4 Revenue and expense recording standards
(Product sales)
Our company handles a wide variety of products, including general reagents, consumables, clinical test reagents, industrial chemicals, food additives, and
agricultural chemicals, and is obligated to deliver products based on customer orders. It is determined that control is transferred and the performance obligation is
satisfied when the products are delivered to the customer. Since the period from the time of shipment to the time control of the product is transferred to the
customer is the normal period, revenue is recognized at the time of shipment.
(equipment sales)
The Company sells equipment related to product sales, and is obligated to deliver equipment based on contracts with customers. When the installation,
adjustment, and operating status of the equipment is confirmed and the customer accepts the equipment, control is transferred and the performance obligation is
determined to be satisfied, and revenue is recognized.
(maintenance contract)
The Company is obligated to provide maintenance services based on maintenance contracts with customers regarding equipment
sales. It is determined that the performance obligations for these services will be satisfied over the service provision period.
(repair)
Our company is obligated to provide after-sales services such as repairs based on requests from customers in the event of equipment
failure after sales. It is determined that control is transferred and the performance obligation is satisfied at the time the services are provided.
We may act as an intermediary in providing services to customers, such as maintenance contracts and repairs. Therefore, for transactions
in which the Company acts as an agent, revenue is recognized as the net amount of the consideration received from the customer minus the
amount paid to a third party.
The consideration for the transaction was received within one year of satisfaction of the performance obligation and does not include a significant financial component.
5 Other important matters that form the basis for preparing financial statements
(1) Accounting treatment for retirement benefits
The accounting method for unrecognized actuarial gains and losses related to retirement benefits differs from the accounting method used in the
consolidated financial statements.
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Securities report
(Balance sheet related)
*1 Assets pledged as collateral and debts related to collateral
(Assets pledged as collateral)


building 22,703 thousand yen 21,466 thousand yen
land 53,534 thousand yen 53,534 thousand yen
Investment securities 4,023 thousand yen 4,023 thousand yen
total 80,260 thousand yen 79,023 thousand yen
(Debts related to collateral)

Accounts payable 247,883 thousand yen 236,202 thousand yen
*2 Guaranteed debt
The following debt guarantees are provided for borrowings from financial institutions of subsidiaries.

Nichiei Tokai Co., Ltd. 40,000,000 yen 120,000,000 yen
*3 Assets and liabilities to affiliated companies

short-term monetary claims 37,012,000 yen 34,455 thousand yen
short-term financial obligations 30,215 thousand yen 27,311 thousand yen
*4 Accounting treatment for notes maturing on the last day of the fiscal year is settled on the note clearing date.
Since the last day of the period was a holiday for financial institutions, the following notes maturing on the last day of the period are included in the ending balance.

bills recivable - 1,000 yen 3,445 thousand yen
bills payable - 1,000 yen 243,782 thousand yen
electronically recorded debt - 1,000 yen 34,763 thousand yen
Electronically recorded debt - 1,000 yen 59,655 thousand yen
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Securities report
(Profit and loss statement related)
*1 Total transaction amount of business transactions and non-business transactions with affiliated companies

amount of sales 149,853 thousand yen 126,473 thousand yen
Purchase amount 182,246 thousand yen 210,248 thousand yen
operating expenses 2,362,000 yen 2,622,000 yen

Transaction volume other than business transactions 1,726,000 yen 15,273 thousand yen
*2 The major items, amounts, and approximate percentages of selling, general and administrative expenses are as follows.

salary allowance 1,164,077 thousand yen 1,202,480 thousand yen
depreciation expense 53,612 thousand yen 56,045 thousand yen
Provision for bonuses 30,600,000 yen 30,950,000 yen

Provision of allowance for doubtful accounts 342,000 yen △ 1,732 thousand yen
Provision for director retirement benefits 6,348 thousand yen 6,174 thousand yen
Approximate percentage
Selling costs 38 % 42 %
General and administrative expenses 62 % 58 %
*3 The details of gain on sale of fixed assets are as follows.


vehicle carrier - 1,000 yen 200,000 yen
tools, equipment and equipment 26,000 yen - 1,000 yen
*4 Gain on sale of investment securities
Previous fiscal year (from October 1, 2021 to September 30, 2022)
These were sold based on the cross-shareholding policy.
Current fiscal year (from October 1, 2022 to September 30, 2023)
Not applicable.
*5 Loss on valuation of investment securities is due to impairment accounting for stocks whose market value or real value has significantly declined.
I will.
(Securities related)
As subsidiary stocks and affiliated company stocks do not have market prices, market values are not listed for subsidiary stocks and affiliated
company stocks.
The amounts recorded on the balance sheet of subsidiary stocks and affiliated company stocks, such as stocks without market prices, are as follows.

classification
Subsidiary stock 131,500 106,500
Associated company stocks ― ―
total 131,500 106,500
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Securities report
(Tax effect accounting related)
1 Breakdown of deferred tax assets and deferred tax liabilities by main cause

Deferred tax asset
business taxes payable 10,515,000 yen 6,535 thousand yen
Reserve for bonuses 9,333,000 yen 9,439 thousand yen
Allowance for doubtful accounts 7,891 thousand yen 6,142 thousand yen
Reserve for retirement benefits 20,565 thousand yen 20,007 thousand yen
Reserve for directors' retirement benefits 30,082 thousand yen 31,965,000 yen
Impairment loss 61,396 thousand yen 61,535 thousand yen
Loss on valuation of investment securities 23,248 thousand yen 23,683 thousand yen
Loss on evaluation of membership rights 3,889 thousand yen 3,584 thousand yen
accrued expenses 1,360,000 yen 1,368,000 yen
others 16,074 thousand yen 4,998,000 yen
Deferred tax asset subtotal 184,357 thousand yen 169,262 thousand yen
Valuation allowance △ 127,871 thousand yen △ 124,777 thousand yen
Total deferred tax assets 56,485 thousand yen 44,485 thousand yen
Deferred tax liability
Valuation difference on other securities 247,876 thousand yen 297,989 thousand yen
Fixed asset reduction reserve fund 16,048 thousand yen 16,048 thousand yen
Total deferred tax liability 263,924 thousand yen 314,037 thousand yen
Net deferred tax liability 207,438 thousand yen 269,552 thousand yen
(note) Because changes in the amount deducted from deferred tax assets (valuation allowance) are immaterial, the main details of the
changes have been omitted.
2 Breakdown of major items that caused the difference between the statutory effective tax rate and the corporate tax burden rate after applying tax effect accounting

Statutory effective tax rate 30.5% 30.5%
(adjustment)
Items that are permanently excluded from deductions such as entertainment expenses 0.4% 0.5%
Resident tax per capita 1.4% 1.6%
Increase/decrease in valuation allowance 0.3% △ 0.1%
Items that are permanently excluded from income, such as dividends received △ 0.3% △ 0.4%
Impact of tax credits △ 1.3% △ 0.3%
others 2.0% △ 0.7%
Corporate tax burden rate after applying tax effect accounting 33.0% 31.1%
(Related to business combinations, etc.)
Transactions under common control, etc.
The notes are omitted because the same information is included in the consolidated financial statements "Notes (related to business combinations, etc.)."
(Revenue recognition related)
The basic information for understanding revenue generated from contracts with customers is included in the consolidated financial statements "Notes (Revenue Recognition Related)"
The notes are omitted because they contain the same content.
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Securities report
④ [Attached schedule]
[Details of tangible fixed assets, etc.]
(Unit: 1,000 yen)

depreciation
classification Asset type Balance at the beginning of the current
Increase
period
amount for the current period
Decrease amount for the current period
Current period depreciation amount
Balance at end of current period
Cumulative amount
9
Tangible fixed assets building 265,353 86,953 21,974 330,323 962,180
(-)
construct 5,139 1,709 ― 1,225 5,623 186,405
vehicle carrier 2,975 1,950 ― 2,165 2,760 21,076
tools, equipment and 0

321,834 10,083 3,387 328,531 52,619
equipment (-)
land 1,169,449 ― ― ― 1,169,449 ―
Leased asset 96,766 38,302 ― 27,293 107,774 97,210
55,570
― 55,570 ― ― ―
(-)
construction in progress
55,579
1,861,518 194,568 56,045 1,944,462 1,319,494
(-)
total
454
Intangible fixed assets ― 454 ― ― ―
(454)
Telephone subscription rights
software provisional
192,845 227,039 ― ― 419,885 ―
Account
454
total 192,845 227,493 ― 419,885 ―
(454)
(Note) The main increase in the current period is software suspense account. The software in progress account is the development cost for the next core system.
It is for use.
[Details of reserves]
(Unit: 1,000 yen)
Subject Balance at the beginning of the current period Increase amount for the current period Decrease amount for the current period Balance at end of current period
Allowance for doubtful accounts 25,872 - 5,732 20,140
Reserve for bonuses 30,600 30,950 30,600 30,950
Reserve for directors' retirement benefits 98,629 6,174 ― 104,804
(2) [Details of main assets and liabilities]
This information is omitted because consolidated financial statements are being prepared.
(3) [Others]
Not applicable.
87/98

Securities report
Section 6 [Summary of stock affairs of the submitting company]
Business year From October 1st to September 30th
Ordinary general meeting of shareholders During December
Reference date September 30th
Record date for dividends of surplus March 31st, September 30th
Number of shares in one unit 100 shares
Purchase of shares constituting less than one unit
(Special account)
Handling location
1-4-5 Marunouchi, Chiyoda-ku, Tokyo Mitsubishi UFJ Trust and Banking Corporation Stock agency department
(Special account)
1-4-5 Marunouchi, Chiyoda-ku, Tokyo
Shareholder register administrator
Mitsubishi UFJ Trust and Banking Corporation
Agency ――
Purchase fee free

The company's public notice method will be electronic public notice. However, if electronic public notices are not
possible due to accidents or other unavoidable reasons, public notices will be published in the Nihon Keizai
How to post public notices Shimbun. Please note that electronic public notices are posted on our website, and the address is as follows.
https://www.t-kagaku.co.jp/koukoku.html
Benefits for shareholders We have a shareholder benefit system in which we give away 3,000 yen worth of company products once a year.
(Note) Rights regarding shares less than one unit
Shareholders of the Company may not exercise any rights other than those listed below with respect to their shares of less than one unit. (1) Rights listed
in each item of Article 189, Paragraph 2 of the Companies Act
(2) Right to make a claim pursuant to the provisions of Article 166, Paragraph 1 of the Companies Act
(3) Right to receive allotment of shares for subscription and allotment of stock acquisition rights for subscription according to the number of shares held by shareholders
88/98

Securities report
Section 7 [Reference information of the submitting company]
1 [Information on the parent company, etc. of the submitting company]
Our company does not have a parent company as stipulated in Article 24-7, Paragraph 1 of the Financial Instruments and Exchange Act.
2 [Other reference information]

The following documents have been submitted between the start date of the current fiscal year and the date of submission of the securities report.
(1) Securities report, its attached documents, and confirmation of the securities report
71st business year (from October 1, 2021 to September 30, 2022) Submitted to the Tohoku Local Finance Bureau on December 21, 2022
(2) Internal control report and its attached documents
Submitted to the Tohoku Local Finance Bureau on December 21, 2022
(3) Quarterly report, confirmation of quarterly report
First quarter of the 72nd term (from October 1, 2022 to December 31, 2022) Submitted to the Tohoku Local Finance Bureau on February 14,
2023 Second quarter of the 72nd term (from January 1, 2023 to 2023) March 31) Submitted to the Tohoku Local Finance Bureau on May 15,
2023 Third quarter of the 72nd term (from April 1, 2023 to June 30, 2023) Submitted to the Tohoku Local Finance Bureau on August 10, 2023
(4) Extraordinary report
Extraordinary report based on the provisions of Article 19, Paragraph 2, Item 9-2 of the Cabinet Office Ordinance on Disclosure of Corporate Content, etc. (Results of Exercise of Voting Rights at General Meeting of
Shareholders)
Submitted to the Tohoku Local Finance Bureau on December 21, 2022
(5) Correction report and confirmation of securities report
71st business year (from October 1, 2021 to September 30, 2022) Submitted to the Tohoku Local Finance Bureau on September 5, 2023
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Securities report
Part 2 [Information on the submitting company's guarantee company, etc.]
Not applicable.
90/98

Securities report
Independent auditor audit report and internal control audit report
December 21, 2023
Board of Directors
Taiyo LLC
Tokyo office
㊞
Designated limited liability partner
certified public accountant During ~ village Ken one
Executive employee
㊞
certified public accountant island river line Positive
Executive employee
<Financial statement audit>
audit opinion
In order to provide audit certification based on the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, our auditing firm will conduct audits of Tohoku Chemical Co.,
Ltd. listed in the "Accounting Status" from October 1, 2022. Consolidated financial statements for the fiscal year ended September 30, 2023, namely, consolidated balance sheet, consolidated statement of
income, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows, and consolidated statement of comprehensive income. We
audited important matters that form the basis for preparing financial statements, other notes, and consolidated supplementary schedules.
We believe that the above consolidated financial statements reflect the financial position of Tohoku Kagaku Yakuhin Co., Ltd. and its consolidated subsidiaries as of
September 30, 2023, in accordance with corporate accounting standards generally accepted in Japan, and as of September 30, 2023. We believe that the operating results
and cash flow status for the consolidated fiscal year ending in 2017 have been presented fairly in all material respects.
Basis of audit opinion
Our auditing firm conducted the audit in accordance with auditing standards generally accepted as fair and reasonable in Japan. Our responsibilities under
the auditing standards are described in “Auditor's Responsibilities in the Audit of Consolidated Financial Statements.” Our auditing firm is independent from
the company and its consolidated subsidiaries in accordance with the rules regarding professional ethics in Japan, and also fulfills other ethical responsibilities
as an auditor. We believe that we have obtained sufficient appropriate audit evidence to form the basis of our opinion.
Key audit considerations

Key audit considerations are matters that the auditor, as a professional, judges to be particularly important in the audit of the consolidated financial
statements for the current fiscal year. The main audit matters are the matters addressed in the process of conducting the audit of the consolidated financial
statements as a whole and in forming the audit opinion, and our auditing firm does not express an opinion on such matters individually.
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Securities report
Appropriateness of period attribution of equipment sales
Contents of major audit considerations and reasons for decisions Audit response
The Company and its consolidated subsidiaries (hereinafter referred to as the Our audit firm primarily conducted the following audit procedures in order to
“Company Group”) are primarily engaged in the wholesale business, handling a confirm the appropriateness of attributing the company group's equipment
large number of products including industrial chemicals, clinical test reagents, sales to periods.
and foods. We also sell equipment for using these products. · We evaluated the development and operational status of internal controls from receiving
Equipment sales account for more than a certain percentage of total sales, orders for equipment sales to recording sales.
and equipment is not only delivered, but is also put into operation after · As an analytical procedure for risk assessment, we conducted a comparative
installation and trial operation, so we often attend customer acceptance analysis of the amounts and profit margins for each product group.
inspections. It is necessary to reach an agreement on the operational status of · For transactions over a certain amount, we compared evidence against receipt inspection
the equipment. The person in charge of inspection receipts enters the inspection documents and other documents to confirm that the ordered items were delivered and that
receipts into the sales management system based on the acceptance stamps the customer's agreement regarding the operating status of the equipment was obtained.
received from the customer, adds a trail to the receipts, and affixes a seal. For transactions below a certain amount, a sample was selected at random and the same
Therefore, the company group will record sales of audit procedures as for transactions above a certain amount were conducted.
equipment once acceptance inspection is completed.

If deviations occur in the above sales transaction process, · Verify that there are no journal entries for sales that were entered directly into
errors may occur in the timing of sales recording. the accounting system without going through the sales management system, and
Additionally, the amount of each transaction is relatively large, check that the total sales in the sales management system and the total sales in the
which has a large impact on the company's performance. accounting system (before settlement of accounts) match. Ta.
Therefore, our audit firm has determined that the appropriateness of
attributing equipment sales to periods is a major audit consideration.
Other contents
Other information included in the securities report is information other than consolidated financial statements, financial statements, and their audit
reports. Management is responsible for preparing and disclosing other information. Additionally, the responsibility of the corporate auditors and the board of
corporate auditors is to monitor the execution of duties by directors in the development and operation of other reporting processes.
Our audit opinion on the consolidated financial statements does not include any other content, and our audit firm does
not express an opinion on any other content.
Our responsibility in our audit of the consolidated financial statements is to read through the other statements and, in the process of reading them, identify any differences between
the other statements and the consolidated financial statements or the knowledge we have gained in the course of the audit. The purpose is to consider whether there are material
differences, and to pay attention to whether there are any signs of material error in other statements beyond such material differences.
If our audit firm determines, based on the work we have performed, that there is a material error in other statements, we are
required to report that fact.
There are no other matters to be reported by our auditing firm.
Responsibilities of management, corporate auditors, and board of corporate auditors regarding consolidated financial statements
The responsibility of management is to prepare and properly present consolidated financial statements in accordance with corporate accounting standards
generally accepted in Japan. This includes developing and operating internal controls that management deems necessary to prepare and properly present
consolidated financial statements that are free from material misstatement due to fraud or error.
In preparing consolidated financial statements, management evaluates whether it is appropriate to prepare consolidated financial statements based on the
going concern assumption and uses corporate accounting standards generally accepted in Japan. If it is necessary to disclose matters related to going
concern, it is the responsibility of the company to disclose such matters.
The responsibility of the corporate auditors and the board of corporate auditors is to monitor the execution of duties by directors in the development and operation of the financial reporting process.
92/98

Securities report
Auditor’s responsibilities in consolidated financial statement audit
The auditor's responsibility is to obtain reasonable assurance, based on the auditor's audit, whether the consolidated financial statements taken as a whole are free of
material misstatement, whether due to fraud or error, and to provide an independent statement in the auditor's report. Its purpose is to express opinions on the
consolidated financial statements from the standpoint of Misstatements may result from fraud or error and are determined to be material if, individually or in the
aggregate, they could be reasonably expected to influence the decisions of users of the consolidated financial statements. be done.
The auditor shall exercise professional judgment and maintain professional skepticism throughout the audit process in
accordance with auditing standards generally accepted in Japan:
· Identify and assess risks of material misstatement due to fraud or error. In addition, audit procedures that address the risk of material misstatement will be designed
and implemented. The selection and application of audit procedures is at the discretion of the auditor. In addition, obtain sufficient appropriate audit evidence on which
to base the opinion.
· Although the purpose of an audit of consolidated financial statements is not to express an opinion on the effectiveness of internal control, the auditor should perform the audit in
order to design audit procedures appropriate to the circumstances when performing risk assessments. Consider internal controls related to
· Evaluate the appropriateness of accounting policies adopted by management and their application methods, as well as the reasonableness of accounting estimates made by
management and the appropriateness of related notes.
· Whether it is appropriate for management to prepare the consolidated financial statements on a going concern basis and, based on the audit evidence obtained,
important questions regarding events or circumstances that cast significant doubt on the going concern assumption. Conclude whether there is significant uncertainty.
If there is a material uncertainty regarding the going concern assumption, call attention to the notes to the consolidated financial statements in the auditor's report, or if
the notes to the consolidated financial statements regarding the material uncertainty are inappropriate. is required to express an opinion with certain exceptions on the
consolidated financial statements. Although the auditor's conclusions are based on audit evidence obtained up to the date of the auditor's report, future events or
circumstances may cause the entity to no longer continue as a going concern.
· Whether the presentation of the consolidated financial statements and notes comply with business accounting standards generally accepted in Japan, as
well as the presentation, structure and content of the consolidated financial statements, including related notes, and the Evaluate whether the financial
statements fairly represent the underlying transactions and accounting events.
· Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its consolidated subsidiaries in order to express an opinion on the consolidated
financial statements. The auditor is responsible for instructing, supervising and performing the audit of the consolidated financial statements. The auditor is solely responsible for the
audit opinion.
The auditor shall inform the auditors and the board of auditors of the planned scope and timing of the audit, significant audit findings, including any
material deficiencies in internal controls identified during the audit process, and a report on the audit. Report on other matters required by the standards.
The auditor shall ensure that the auditor and the board of auditors have complied with Japan's professional ethics regulations regarding independence, as
well as any matters or impediments that may reasonably be considered to affect the independence of the auditor. If safeguards are in place to eliminate or
reduce risks, the details should be reported.
Among the matters discussed with the corporate auditors and the board of corporate auditors, the auditor determines those matters that are particularly important in the audit of the
consolidated financial statements for the current consolidated fiscal year as the main audit matters, and conducts the audit accordingly. Describe in the report. However, in cases where
public disclosure of the matter is prohibited by laws and regulations, or in cases where it is reasonably expected that the disadvantages of reporting in the audit report would outweigh the
public interest, although this is extremely limited, If the auditor determines that the matter should not be reported, do not record the matter.
93/98

Securities report
<Internal control audit>
audit opinion
Our audit firm conducted an audit of Tohoku Chemical Co., Ltd.'s internal control report as of September 30, 2023 in order to provide audit certification pursuant to the provisions of
Article 193-2, Paragraph 2 of the Financial Instruments and Exchange Act. .
Our audit firm confirms that the above internal control report by Tohoku Kagaku Yakuhin Co., Ltd., which states that the internal control over financial reporting as of September 30,
2023 is effective, is a financial report that is generally accepted as fair and appropriate in Japan. We believe that the evaluation results of internal control over financial reporting have been
appropriately presented in all material respects in accordance with the standards for evaluation of internal control over financial reporting.
Our auditing firm conducted an internal control audit in accordance with standards for internal control audits related to financial reporting that are
generally accepted as fair and reasonable in Japan. Our responsibilities under the standards for auditing internal control over financial reporting are described
in “Auditor's Responsibilities in Internal Control Audits.” Our auditing firm is independent from the company and its consolidated subsidiaries in accordance
with the rules regarding professional ethics in Japan, and also fulfills other ethical responsibilities as an auditor. We believe that we have obtained sufficient
and appropriate audit evidence to form the basis of our opinion.
Responsibilities of management, corporate auditors, and board of corporate auditors regarding internal control reports
Management is responsible for developing and operating internal controls over financial reporting, and preparing and appropriately presenting internal control reports in accordance with standards for
evaluation of internal controls over financial reporting that are generally accepted as fair and appropriate in Japan. It's about doing.
The responsibility of the corporate auditors and the board of corporate auditors is to monitor and verify the development and operational status of internal controls related to financial
reporting. Please note that internal controls over financial reporting may not be able to completely prevent or detect false statements in financial reports.
Auditor’s responsibilities in internal control audits
The auditor's responsibility is to obtain reasonable assurance, based on the internal control audit conducted by the auditor, as to whether the internal control report is free of material misstatement, and
to ensure that the internal control audit report is free of material misstatements. The purpose of this meeting is to express opinions regarding the internal control report from one's standpoint.
The auditor shall exercise professional judgment and maintain professional skepticism throughout the audit process in accordance with
standards for auditing internal control over financial reporting that are generally accepted in Japan. do.
· Perform audit procedures to obtain audit evidence regarding the evaluation results of internal control over financial reporting in the internal control report. Audit
procedures for internal control audits are selected and applied based on the auditor's judgment and the significance of their impact on the reliability of financial
reporting.
· Examine the presentation of the internal control report as a whole, including the descriptions made by management regarding the evaluation scope, evaluation procedures, and evaluation results of
internal control over financial reporting.
· Obtain sufficient and appropriate audit evidence regarding the evaluation results of internal control over financial reporting in the internal control
report. The auditor is responsible for instructing, supervising, and conducting the audit of the internal control report. The auditor is solely responsible for
the audit opinion.
94/98

Securities report
The auditor shall inform the corporate auditors and the board of corporate auditors of the scope and timing of the planned internal control audit, the results of the
internal control audit, any identified material deficiencies in internal control that should be disclosed, the results of their correction, and Report on other matters required
by internal control audit standards.
conflict of interest
According to the provisions of the Certified Public Accountants Act, there are no conflicts of interest between the company and its consolidated subsidiaries and the auditing firm or its executive members that should be stated.
that's all
(Note) 1. The above is a digitized version of the matters stated in the original audit report, and the original is kept separately by our company (the
company submitting the securities report).
2. XBRL data is not included in the audit target.
95/98

Securities report
Independent auditor's audit report
December 21, 2023
Board of Directors
Taiyo LLC
Tokyo office
㊞
certified public accountant During ~ village Ken one
Executive employee
㊞
certified public accountant island river line Positive
Executive employee
audit opinion
In order to provide audit certification based on the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, our auditing firm will conduct audits of
Tohoku Chemical Co., Ltd. listed in the "Accounting Status" from October 1, 2022. Audit the financial statements for the 72nd fiscal year ending September 30, 2023, namely the balance
sheet, income statement, statement of changes in shareholders' equity, significant accounting policies, other notes, and supplementary schedules. went.
Our auditing firm confirms that the above financial statements reflect Tohoku Kagaku Yakuhin Co., Ltd.'s financial position as of September 30, 2023 and the business to
be completed on the same date, in accordance with corporate accounting standards generally accepted in Japan. We believe that the business results for the year have been
presented fairly in all material respects.
Our auditing firm conducted the audit in accordance with auditing standards generally accepted as fair and reasonable in Japan. Our
responsibilities under the auditing standards are described in “Auditor's Responsibilities in Financial Statement Audits.” Our auditing firm is
independent from the company in accordance with the rules regarding professional ethics in Japan, and also fulfills other ethical responsibilities as
an auditor. We believe that we have obtained sufficient appropriate audit evidence to form the basis of our opinion.
Key audit considerations

Key audit considerations are those matters that the auditor, in his or her professional judgment, considers to be of particular importance in the audit of the financial
statements for the current fiscal year. The main audit matters are the matters that were addressed in the process of conducting the audit of the financial statements as a
whole and in forming the audit opinion, and our auditing firm does not express an opinion on such matters individually.
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Securities report
Appropriateness of period attribution of equipment sales
The content is omitted because it is the same as the main audit considerations (appropriateness of period attribution of equipment sales) described in the audit
report of the consolidated financial statements.
Other contents
Other information included in the securities report is information other than consolidated financial statements, financial statements, and their audit
reports. Management is responsible for preparing and disclosing other information. Additionally, the responsibility of the corporate auditors and the board of
corporate auditors is to monitor the execution of duties by directors in the development and operation of other reporting processes.
Our audit opinion on the financial statements does not include any other contents, and our audit corporation does not express
an opinion on any other contents.
Our responsibility in an audit of financial statements is to read through the other statements and, in the process of reading them, identify material
differences between the other statements and the financial statements or knowledge we have gained in the course of the audit. In addition to such material
differences, attention should be paid to whether there are any signs of material error in other statements.
If our audit firm determines, based on the work we have performed, that there is a material error in other statements, we are
required to report that fact.
There are no other matters to be reported by our auditing firm.
Responsibilities of management, corporate auditors, and board of corporate auditors regarding financial statements
The responsibility of management is to prepare and properly present financial statements in accordance with corporate accounting standards generally
accepted in Japan. This includes developing and operating internal controls that management deems necessary to prepare and properly present financial
statements that are free from material misstatement due to fraud or error.
When preparing financial statements, management evaluates whether it is appropriate to prepare financial statements based on a going concern assumption and
prepares them as a going concern based on business accounting standards generally accepted in Japan. If it is necessary to disclose matters related to such matters, they
are responsible for disclosing such matters.
The responsibility of the corporate auditors and the board of corporate auditors is to monitor the execution of duties by directors in the development and operation of the financial reporting process.
97/98

Securities report
Auditor's responsibilities in financial statement audit
The auditor's responsibility is to obtain reasonable assurance, based on the audit performed by the auditor, whether the financial statements as a whole are
free of material misstatement, whether due to fraud or error, and to provide an independent perspective in the auditor's report. The objective is to express
opinions on the financial statements. Misstatements may result from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the decisions of users of the financial statements. Ru.
The auditor shall exercise professional judgment and maintain professional skepticism throughout the audit process in
accordance with auditing standards generally accepted in Japan:
· Identify and assess risks of material misstatement due to fraud or error. In addition, audit procedures that address the risk of material misstatement will be designed
and implemented. The selection and application of audit procedures is at the discretion of the auditor. In addition, obtain sufficient appropriate audit evidence on which
to base the opinion.
· Although the purpose of a financial statement audit is not to express an opinion on the effectiveness of internal
control, in performing a risk assessment, the auditor should consider Examine internal controls.
· Evaluate the appropriateness of accounting policies adopted by management and their application methods, as well as the reasonableness of accounting estimates made by
management and the appropriateness of related notes.
· Whether it is appropriate for management to prepare financial statements on a going concern basis and, based on the audit evidence obtained,
important questions regarding events or circumstances that cast significant doubt on the going concern assumption. Conclude whether there is significant
uncertainty. If there is a material uncertainty regarding the going concern assumption, the auditor should draw attention to the notes to the financial
statements in the auditor's report, or, if the notes to the financial statements regarding the material uncertainty are inappropriate, They are required to
express an opinion with exclusions on the financial statements. Although the auditor's conclusions are based on audit evidence obtained up to the date of
the auditor's report, future events or circumstances may cause the entity to no longer continue as a going concern.
· Whether the presentation and notes of the financial statements comply with business accounting standards generally accepted in Japan, as well as the
presentation, structure and content of the financial statements, including related notes, and the financial statements. Evaluate whether the underlying
transactions and accounting events are presented fairly.
The auditor shall inform the auditors and the board of auditors of the planned scope and timing of the audit, significant audit findings, including any
material deficiencies in internal controls identified during the audit process, and a report on the audit. Report on other matters required by the standards.
Among the matters discussed with the corporate auditors and the board of corporate auditors, the auditor determines the matters that are deemed to be particularly important in the
audit of the financial statements for the current business year as the main matters to be considered in the audit, and publishes the audit report. Described in . However, in cases where
disclosure of the matter is prohibited by law, etc., or in extremely limited cases, it is reasonably expected that the harm caused by reporting it in the audit report will outweigh the public
interest. Therefore, if the auditor determines that the matter should not be reported, it will not be stated.
conflict of interest
There is no conflict of interest between the company and our auditing firm or our executive members that should be stated pursuant to the provisions of the Certified Public Accountants Act.
that's all
(Note) 1. The above is a digitized version of the matters stated in the original audit report, and the original is kept separately by our company (the
company submitting the securities report).
2. XBRL data is not included in the audit target.
98/98

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Tohoku Chemical Co., Ltd. (E02810)

【Documents to be submitted】 Securities report

[Submit to] Director of Tohoku Finance Bureau

【Filing date】 December 21, 2023

【Company Name】 Tohoku Chemical Co., Ltd.

[English translation name] TOHOKU CHEMICAL CO., LTD.

【telephone number】 0172(33)8131 (Representative)

【telephone number】 0172(33)8131 (Representative)

[Place available for public inspection] Tokyo Stock Exchange, Inc.

(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo)

*Tohoku Chemical Co., Ltd. Tokyo Branch

(1-8-15 Iwamotocho, Chiyoda-ku, Tokyo)

Tohoku Chemical Co., Ltd. (E02810)

Part 1 [Company information]

Part 1 [Company overview]

1 [Trends in major management indicators, etc.]

(1) Consolidated management indicators, etc.

amount of sales (1,000 yen) 31,013,852 31,040,674 36,221,463 37,333,902 35,094,627

Ordinary profit (1,000 yen) 329,620 410,247 758,809 1,003,410 808,356

Attributes to parent company shareholders

comprehensive income (1,000 yen) 138,529 388,455 780,232 492,613 691,258

Total assets (1,000 yen) 14,751,536 14,586,145 16,128,570 17,519,610 18,920,740

Capital adequacy ratio (%) 36.2 38.5 38.6 37.7 38.0

return on equity (%) 4.2 6.9 8.7 10.2 8.1

number of employees (given name) 309 314 316 321 321

Tohoku Chemical Co., Ltd. (E02810)

amount of sales (1,000 yen) 24,337,132 24,386,966 27,788,121 28,359,730 27,384,835

Ordinary profit (1,000 yen) 318,201 380,267 633,394 845,864 738,646

net income (1,000 yen) 213,795 355,571 424,319 546,903 495,150

capital (1,000 yen) 820,400 820,400 820,400 820,400 820,400

Total assets (1,000 yen) 11,704,284 11,662,206 12,990,293 14,076,734 15,180,079

Dividend amount per share 90.00 90.00 105.00 115.00 105.00

Capital adequacy ratio (%) 44.9 47.4 46.4 44.7 44.8

return on equity (%) 4.1 6.6 7.3 8.9 7.6

Dividend payout ratio (%) 39.5 23.7 22.6 19.0 19.1

number of employees (given name) 226 228 230 236 244

highest stock price (circle) 3,645 3,630 4,120 3,600 4,000

lowest stock price (circle) 2,650 2,700 2,966 3,100 3,050

Tohoku Chemical Co., Ltd. (E02810)

year and month matter

April 1975 Opened Tokyo branch in Chuo-ku, Tokyo

April 1989 Sendai branch opened in Kurokawa District, Miyagi Prefecture.

December 1989 Tokyo branch moved to Chiyoda-ku, Tokyo (current location)

December 1996 Opened Yonezawa office in Yonezawa City, Yamagata Prefecture.

January 2002 Receive ISO14001 certification

December 2017 Transition to new ISO14001:2015 standard

Tohoku Chemical Co., Ltd. (E02810)

Segment name Main items Main companies

Soda industrial chemicals, organic chemicals, inorganic chemicals

chemical industrial chemicals

Analytical equipment, educational equipment, measuring equipment, pollution

General test reagents/hematological test reagents

Medical equipment, laboratory testing equipment, medical consumables

Tohoku Chemical Co., Ltd. (E02810)

(Note) All subsidiaries are consolidated subsidiaries.

Tohoku Chemical Co., Ltd. (E02810)

4 [Status of affiliated companies]

capital or voting rights

Selling industrial chemicals to our company

We supply clinical test reagents from our company.

clinical test reagents I am putting it in.

② Ordinary profit 73,511 thousand yen