As the parent company, we dispatch (an) officer(s) to all consolidated subsidiaries and requires that important matters under the Affiliated Companies Management Regulations must be pre-approved by the Company’s Board of Directors.

The group Management Committee, in which thee representatives of consolidated subsidiaries participate, meets every month to discuss financial results, budget, and other general topics.

Our Corporate Planning Department is positioned as the department in charge of affiliated companies management and it has put into place a system for regularly communicating with the frontline operations of each affiliated company.

As a result, we are able to quickly detect risks and better understand the situation of its subsidiaries from both their management level and frontline operations in a timely manner while also working to enhance the effectiveness of its supervisory functions. This information is also reported to the Risk and Compliance Committee as needed.

Since the aquaculture business is a business that uses nature, it faces risks due to natural disasters. These risks cannot be completely avoided. Therefore, we have been promoting the diversification its aquaculture farms for some time, under a policy to mitigate risks to the extent that they can be absorbed through “diversification.”

In addition, we have increased the ratio of land-based farms, which have a low risk of damage. There are two types of land-based farms: A rivertype aquaculture farm that uses rivers and a recycling-type aquaculture farm that uses groundwater. Of these types, the risk of damage is relatively high because the aquaculture farm is severely damaged by overflowing rivers. In particular, in recent years, damage caused by linear precipitation zones has been frequent, and we recognize that the risk is increasing. In August 2022, a flood and landslide occurred in Fukaura, Aomori Prefecture, caused by record-breaking heavy rains. This resulted in extensive damage to our river-type land-based farm in Fukaura Town. On the other hand, recycling-type aquaculture fish farms are at an extremely low risk of damage. In the domestic aquaculture industry, river-type intermediate farms used to have a large share, but in the fiscal year ending June 2024, a closed-loop land-based farm was constructed in Imabetsu Town, Aomori Prefecture to increase the closed-loop land-based farms, which have a lower risk of damage Going forward, we will continue to build a robust production system that is resilient to disasters, taking into account the risk of intensifying disasters.