Announcement of the Settlement of Accounts for the Year Ending March 2010

(Note) Figures shown have been rounded down to the nearest million yen

Our settlement of accounts for the year ending March 2010 was announced on the afternoon of Friday, May 7 at the Tokyo Stock Exchange and Osaka Securities Exchange Press Clubs. An outline of the accounts is presented below.

Overview of the FY ending March 2010

Although the Japanese economy showed some signs of recovery in export volume and other indicators following stimulus measures carried out within Japan and throughout the world together with steady economic growths of China and Southeast Asia among other factors during the fiscal year, it nevertheless continued to see negative effects of struggling capital investments, prolonged deflation and unstable employment conditions.

The food industry in which our group is placed was also impacted by the aforementioned economic circumstances, and was challenged with slowing consumption triggered by thrifty consumer spending and stronger price reduction trends.

Amid such environment, we achieved favorable results through carrying out measures from the medium-term business plan "Innovation and Action 2010", promoting "technological management", engaging in product development fitting the needs of customers, delivering unique high-functionality ingredients, reducing production costs and focusing on "expansion of overseas businesses" and "reconstruction of soy protein businesses" positioned as key issues.

As a result, for the annual term ending March 2010, we achieved net sales of 213,229 million yen (decrease of 10.9% y-o-y), operating income of 17,960 million yen (55.8% y-o-y increase), ordinary income of 17,363 million yen (68.5% y-o-y increase) and net income of 10,726 million yen (43.3% y-o-y increase).

[Breakdown of Results by Division]
<Oils and Fats Processing Division>
Domestically, general oils and fats for processing together with specialty products such as hard butters for chocolate continued to demonstrate steady results, but adverse market trends as demonstrated from the struggling of industrial-use canned products and raw material prices lead to year-on-year decreases for both sales and profit.

In our overseas subsidiaries, although sales for Eastern Europe and Russia struggled from the weak economy, sales in Southeast Asia and North America continued to post steady growth. Improvements in profitability within the refining division and enhanced sales of specialty products offset the decrease in net sales from increased raw material prices, which in turn expanded profit.

Through these results, this division achieved a sales volume of 83,147 million yen (a decrease of 21.9% y-o-y) and an operating income of 7,820 million yen (6.5% y-o-y increase).

<Confectionery and Baking Ingredients Division>
Domestically, chocolates for industrial use such as for frozen chocolates and chocolates for baking posted steady results. Creams, margarines and fillings also saw solid results following improved sales of products focused on pricing and functionality. Imported confectionery and baking ingredients enhanced its sales of milk powder products but nevertheless experienced profit decline due to fluctuating raw material prices.

Our subsidiary overseas increased sales volume following expansion of sales for creams and margarines targeted to Southeast Asia, but was negative in profits due to changing raw material prices.
Through these results, this division achieved a sales volume of 92,073 million yen (a decrease of 2.7% y-o-y) and an operating income of 8,774 million yen (84.5% y-o-y increase).

<Soy Protein Division>
Domestically, soy protein products achieved gains in sales volume and profit following steady increase in sales of meats, fishery, prepared foods, health foods and other categories. Our subsidiary in China secured positive figures as a result of improvements in profitability.

Sales shrank for soy protein products due to the narrowing down of the product mix, but improved in profits.

For soy protein food function-enhancing ingredients, markets for beverages and fermentation posted solid results following efforts to expand usage options and generated increases in sales and profit.

Soy milk and mail orders continued to face unfavorable market conditions, but cost reduction measures resulted in improved profits.

Through these results, this division achieved a sales volume of 38,009 million yen (a decrease of 0.9% y-o-y) and an operating income of 1,365 million yen (an operating loss of 569 million yen was recorded in the previous year).

Predictions for the Next Fiscal Year

The food industry is expected to continue seeing adverse business environments, with less spending from consumers and more visible low-pricing trends following the prolonged deflation and challenging employment conditions.

The Group will mark its final year of its medium-term plan "Innovation and Action 2010" amid such circumstances, and will position the year as "the year to finalize management structural reform", "the year to take on new business models" and "the year to envision the future (Group vision)" to also establish a business model that can delineate a new growth strategy for a new medium-term management plan.

The oils and fats processing division will focus on expanding sales of hard butters for chocolate and health-oriented processed fats as well as strengthening the processed fats business. For the palm oil business, we aim to expand the business through forming alliances in the raw materials category as well as increase sales of new products to realize dominating global competitiveness.

In the confectionary and baking ingredients division, we will expand business through improving sales of products possessing functionality and pricing advantages unlike any of those from competitors together with establishing a business model for overseas markets.

For the soy protein division, we will continue on with our cost-cutting measures and production cost reductions through narrowing down the product mix as well as make advancements in reestablishing the business by enhancing domestic and overseas sales through launching new products that feature health benefits, convenience and functionality.

We forecast a sales volume of 223,600 million yen (4.9% y-o-y increase), operating income of 16,200 million yen (9.8% y-o-y decrease), ordinary income of 15,600 million yen (10.2% y-o-y decrease) and net income for the term of 10,000 million yen (6.8% y-o-y decrease).

End of report

*The forecasts above have been made based on the information available at the time of this announcement, and the actual results may differ from these forecasts due to various factors.