Accounting Policies
Summary of accounting policies: Consolidated
Basis for presentation Japanese GAAP; consolidated Securities and investment
securities
Available-for-sale securities
Quoted securities: market value method, based on market prices as of the fiscal year-end
All differences in valuations are credited directly to net assets, with the costs of assets sold calculated primarily based on the moving-average method.
Nonquoted securities: valued at cost using the moving-average method
Derivatives Market value method
Inventories Valued at cost, computed on a periodic-average basis (where amounts shown on the balance sheet take into account declines in book values based on reduced outlooks for profitability).
Depreciation Property, plant and equipment (except leased assets): declining-balance method
Provided that buildings acquired after April 1, 1998 (excluding appurtenances) are depreciated on a straight-line basis.
The useful life of buildings and structures is 2-50 years, that of machinery, equipment and vehicles is 2-15 years and that of others is 2-20 years.
Intangible assets (except leased assets): straight-line method
Software for internal use is amortized on a straight-line basis (assuming 5 years of internal useful life).
Leased assets: leased assets related to finance leases that do not transfer ownership
The Company employs lease terms as years of useful life and assumes residual values to be zero; depreciation is assumed to be on a straight-line basis.
All lease transactions entered into before March 31, 2008 related to finance leases that do not transfer ownership continue to be treated as ordinary rental transactions.
Allowance for doubtful accounts The Company recognizes an amount calculated on the basis of a historical bad loss ratio for general accounts receivable, plus an amount for specific accounts for which collection appears doubtful.
Provision for directors' bonuses The Company and a number of its domestic subsidiaries estimate bonuses that are due to directors and audit & supervisory board members, and recognize the amounts they expect to pay in the year under review.
Provision for directors' retirement benefits
Recognition of the full amount of liabilities at term-end based on internal regulations
Accounting treatment of retirement benefits
1. Attribution methodology for projected retirement benefits
Calculation of retirement benefit obligations is based on straight-line attribution of estimated retirement benefit obligations up to the end of the fiscal year under review.
2. Expensing methodology for actuarial gains or losses and past service cost Past service cost recognized as expenses are amortized on a straight-line basis over a prescribed number of years (usually 10 years) within the average remaining service period of employees at the time the liability arises.
Actuarial gains or losses are amortized on a straight-line basis over a prescribed number of years (usually 10 years) from the year after accrual over the average remaining service period of employees as of the end of the fiscal period in which they are recognized.
3. Application of simplified valuation methods by small businesses
Some consolidated subsidiaries use a simplified valuation method of calculating net defined benefit liability and retirement benefit expenses that assumes the amounts required for voluntary resignations at the fiscal year-end to be retirement benefit obligations.
Important standards for the recognition of revenues and expenses
Recognition of revenues and expenses for construction projects
Construction for which progress under construction contracts can be estimated with a high degree of certainty: percentage of completion method (in which the estimate of the percentage of completion is based on the cost-to-cost method)
Other construction: completed contract method Significant hedge accounting
methods
Method of accounting for hedges:
For interest rate swaps, the Company applies exceptions when the swap in question meets the conditions for application of such exceptions.
Hedging instruments and risks hedged:
Hedging methods: interest rate swaps Items hedged: loans payable
Hedging policies:
Hedging policy: The Company hedges against interest rate fluctuations as
prescribed in a set of internal regulations entitled “Regulations for the Management of Derivative Transactions.”
Method of evaluating the effectiveness of hedging: As interest rate swaps are treated as a special case, there is no evaluation of their effectiveness.
Opinion of independent auditors Auditors: KPMG AZSA LLC Opinion: unqualified
Share-related Information
Shares issued
Class of shares Common
Registered or bearer Registered
Number of shares authorized 104,000,000
Issued
As of May 31, 2014 48,410,750
As of August 26, 2014 48,410,750
Stock exchange listings Tokyo Stock Exchange, First Section
Comments The standard stock of the Company, with no
limitations on rights 100 share min. trading unit
Changes in common stock
Millions of yen Shares outstanding Capital stock Legal capital surplus Date
Increase or
decrease Balance
Increase or
decrease Balance
Increase or
decrease Balance (Shares)
May 6, 2010 (2,500,000) 48,410,750 - 13,500 - 10,823
Shareholders by type of investor
Type of investor
Number of shareholders
Shares held
(100 shares) % of total units
National and local government agencies - -
-Financial institutions 35 98,598 20.40
Financial instrument firms 25 2,216 0.46
Business and other corporations 246 135,030 27.94
Non-residents: other than individuals 125 32,216 6.66
Non-residents: individuals 10 435 0.09
Individuals and others 32,114 214,877 44.45
32,555 483,372 100.00
Shares less than one unit 73,550
Largest shareholders
Name
Thousands of shares owned
Thousands of shares held in trust accounts
% of shares outstanding
TM Kosan Co., Ltd. 7,607.9 15.71
Japan Trustee Services Bank, Ltd. 2,523.9 2,464.2 5.21
Mizuho Bank, Ltd. 2,245.5 4.63
Sumitomo Mitsui Banking Corp. 1,990.7 4.11
The Bank of Yokohama, Ltd. 744.0 1.53
Maruichi Steel Tube Ltd. 712.2 1.47
Kikkoman Corporation 678.0 1.40
The Chase Manhattan Bank, N.A. London SL
Omnibus Account 666.4 1.37
The Master Trust Bank of Japan, Ltd. 563.5 546.2 1.16
Yokohama Reito Co., Ltd. 558.2 1.15
18,290.6 37.78
Share information
Business year June 1 to May 31
Ex-rights date May 31
Dates of record for dividends November 30 and May 31 Annual General Meeting of Shareholders August
Trading unit 100 shares
Transfer agent Mitsubishi UFJ Trust and Banking Corporation, 1-4-5 Marunouchi, Chiyoda-ku, Tokyo
Publication of record The Nihon Keizai Shimbun
Contact Akifumi Ujita
Director, Executive Officer,
General Manager of General Administration Division and General Manager of Finance Department
SAKATA SEED CORPORATION 2-7-1 Nakamachidai, Tsuzuki-ku, Yokohama, Kanagawa Prefecture Telephone: 81-45-945-8800 Facsimile: 81-45-945-8841