FOR TRANSLATION PURPOSE ONLYDISCLAIMER
This English translation is only for reference purpose. When they are any discrepancies between original Japaneseversion and English translation version, the original Japanese version always prevails.
November 7, 2018

Summary of Consolidated Financial Results for the Second Quarterof the Fiscal Year Ending March 31, 2019
(Six Months Ended September 30, 2018)[Japanese GAAP]
Company name: SRS HOLDINGS CO., LTD.

Listing: Tokyo Stock Exchange, First Section

Securities code:

8163

URL: https://srs-holdings.co.jp/

Representative:

Masahiko Shigesato, President & Chief Executive Officer

Contact:

Masahiro Tanaka, Director & Head of Administration Division

Tel: +81-6-7222-3101

Scheduled date of filing of Quarterly Report:

November 12, 2018

Scheduled date of payment of dividend:-

Preparation of supplementary references regarding quarterly results:

No

Holding of quarterly results briefing:

Yes (For institutional investors and analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2019
(April 1, 2018 - September 30, 2018)(1) Consolidated operating results
Net sales
Million yen

Operating profit%

Six months ended Sep. 30, 2018
21,908Six months ended Sep. 30, 2017
21,695
Note: Comprehensive income (million yen)

(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent

Million yen%

Million yen

1.0
510
96.1
6.9
260
336.2
Six months ended Sep. 30, 2018:
Six months ended Sep. 30, 2017:

Net income per share

Diluted net income per share

Yen

Yen

6.52
6.48

-

Six months ended Sep. 30, 2018
Six months ended Sep. 30, 2017%

Million yen

%

216
215

0.6
-

483
88.5
256
263 (down 2.8%)270 (-%)(2) Consolidated financial position
Total assets

Net assets

Million yen

As of Sep. 30, 2018
As of Mar. 31, 2018
Reference: Shareholders’ equity (million yen)

Net assets per share

Equity ratio
%

Yen

49.5
45.8
As of Mar. 31, 2018: 14,079

426.80423.98Million yen

28,636
14,311
30,768
14,214As of Sep. 30, 2018: 14,173

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2018
Fiscal year ending Mar. 31, 2019
Fiscal year ending Mar. 31, 2019
(forecast)
Note: Revisions to the most recently announced dividend forecast: None

-

5.00

5.00

-

5.00

5.00

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2019 (April 1, 2018 – March 31, 2019)
Net sales
Full year

Million yen
46,000Operating profit%
4.2

Million yen
1,000

%
34.9

Ordinary profit
Million yen
1,000

%
68.7

(Percentages represent year-on-year changes)
Profit attributable to
Net income perowners of parent
shareMillion yen
200

%
84.3

Yen
6.02

FOR TRANSLATION PURPOSE ONLY
* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in thescope of consolidation): None
New companies: Excluded companies: (2) Application of special accounting methods to the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:
None4) Restatements:
None(4) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of period (including treasury shares)
As of Sep. 30, 2018:33,209,080 shares
As of Mar. 31, 2018:33,209,080 shares
2) Number of treasury shares at the end of period
As of Sep. 30, 2018:294 shares
As of Mar. 31, 2018:294 shares
3) Average number of shares outstanding during the period
Six months ended Sep. 30, 2018:33,208,786 shares
Six months ended Sep. 30, 2017:33,208,818 shares* This report is not subject to quarterly review by certified public accountants or auditing firms.
* Explanation regarding appropriate use of the earnings forecasts and other special notes
Forecasts regarding future performance in this document are based on certain assumptions judged to be valid andinformation currently available to us. Actual performance may differ significantly from these forecasts for anumber of factors.

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Cash Flows3(4) Explanation of Consolidated Earnings Forecasts and Other Forward-looking Statements

4

2. Quarterly Consolidated Financial Statements and Notes

5(1) Quarterly Consolidated Balance Sheet

5(2) Quarterly Consolidated Statements of Income and Comprehensive Income

7

Quarterly Consolidated Statement of Income
For the Six-month Period

7

Quarterly Consolidated Statement of Comprehensive Income
For the Six-month Period8(3) Quarterly Consolidated Statement of Cash Flows

9(4) Notes to Quarterly Consolidated Financial Statements

10(Going Concern Assumption)

10(Significant Changes in Shareholders’ Equity)

10(Additional Information)

10(Segment and Other Information)

10

1

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
1) Consolidated performance

Net salesFirst six months of FY3/18(Apr. 1, 2017 – Sep. 30, 2017)
YoY
YoY
Resultschangechange(Amount)(%)
21,695
1,403
6.9(Millions of yen)First six months of FY3/19(Apr. 1, 2018 – Sep. 30, 2018)
YoY
YoY
Resultschangechange(Amount)(%)
21,908213
1.0

Operating profit

260

200

336.2

510

249

96.1

Ordinary profit
Profit attributable to owners ofparent

256

391

-

483

227

88.5

215

726

-

216

1

0.6

In the first half of the fiscal year ending March 31, 2019, heavy rain and flooding typhoons, earthquakes andother natural disasters mainly in western Japan, had a negative impact on sales. However, first half sales werehigher than one year earlier because newly opened locations increased the number of restaurants and sales atexisting locations were higher.
First half operating profit and ordinary profit were higher than one year earlier as the benefits of sales growth
and the proper control over selling, general and administrative expenses offset a negative impact caused byhigher personnel expenses.
Profit attributable to owners of parent was 216 million yen, about the same as one year earlier because the firsthalf of the previous fiscal year included a gain on the sale of shares of subsidiaries in association with the sale of
the Sushi-han business.
2) Other measures
At Washoku Sato restaurants, there were numerous activities to attract customers. One step was the addition ofseasonal menu items like eel and matsutake mushroom dishes. There was also a summer campaign f eaturing
discounted prices for shaved ice and draft beer, a reduced price for the premium-priced Sato-Shabu (all-you-caneat shabu-shabu) and Sato-Suki (all-you-can-eat sukiyaki) to celebrate the SRS Group’s 50th anniversary, and alimited-time-only autumn campaign that allowed customers to add all-you-can eat black hair wagyu (Japanesebeef) and beef tripe to Sato-Shabu and Sato-Suki.
At Santen restaurants, all locations started selling soba dishes when the Grand Menu was revised and focused onsales of menu items that combine tendon and noodles. Restaurants also added eel dishes as a seasonal item andlimited-time-only selections like tendon with pork and long sausage. Sales promotion activities utilized video
advertisements.
Nigiri Chojiro restaurants sold Sumakatsuo and other ingredients from the production area and sold in limited
quantity so that customers can appreciate the seasonal menu using seasonal ingredients such as cutlass fish andgold eye snapper. A Chojiro restaurant in Shijokiyamachi, Kyoto has gained strong support from foreign tourists.
This restaurant has received a Trip Advisor Certificate of Excellence for five consecutive years starting in 2014,
which qualifies it for the Trip Advisor Hall of Fame.
At Miyamoto Munashi restaurants, activities continued with the goal of attracting more customers to existing
locations. Initiatives included sales of una-ju and roast beef-ju, which are eel or roast beef over rice, set menu
dishes with beef tongue, and limited-time-only beer discounts.
At Katsuya restaurants, there were a number of limited-time-only menu selections, such as chicken cutlet with ayuzu and chili pepper topping. Another highlight of the first half was the Pork loin cutlet + One Fair that allowed
customers to add one pork loin cutlet (deep-fried pork cutlet) to a menu item for only 100 yen.
The segment information is not provided because the SRS Group has only a single segment of food service
business.

2FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19

SRS Group Restaurants
Name

FY3/18(As of Mar. 31, 2018)

Newly opened
restaurants

Closedrestaurants

200 (-)

3 (-)

1 (-)

46 (2)

2 (-)

2 (1)

46 (1)

6 (3)

1 (-)

- (-)

- (-)

1 (-)

- (-)

57 (-)

1 (-)

1 (-)

57 (-)

6 (-)

Washoku Sato
Tendon Tempura
Honpo Santen
Meotozenzai
Nigiri Chojiro(Number of restaurants)
Second quarter ofRestaurants
FY3/19planned to open
(As of Sep. 30, 2018)
during FY3/19
202 (-)
6 (-)*

Nigiri Chujiro

6 (-)

- (-)

- (-)

6 (-)

3 (-)

Miyakobito
Meshiya Miyamoto
Munashi
Katsuya
New restaurant
format14 (13)

- (-)

- (-)

14 (13)- (-)

66 (6)

- (-)

2 (-)

64 (6)

5 (-)

36 (16)

1 (-)

- (-)

37 (16)

7 (2)

- (-)

- (-)

- (-)

- (-)

1 (-)

Domestic total

426 (37)

7 (-)

6 (1)

427 (36)

34 (5)

Overseas stores

6 (4)

3 (2)

2 (2)

7 (4)

3 (1)

Worldwide total
432 (41)
10 (2)8 (3)434 (40)
Note: Numbers in parentheses represent FC restaurants (domestic) and joint venture restaurants (overseas).
* Nigiri Chojiro includes Chojiro restaurants.

37 (6)(2) Explanation of Financial Position
Total assets at the end of the second quarter decreased 2,132 million yen from the end of the previous fiscal year
to 28,636 million yen.
Current assets decreased 1,972 million yen from the end of the previous fiscal year to 11,176 million yen. Thiswas mainly due to a decrease of 1,839 million yen in cash and deposits.
Non-current assets decreased 153 million yen to 17,360 million yen. This was primarily due to a decrease of 86
million yen in goodwill.
Current liabilities decreased 1,306 million yen from the end of the previous fiscal year to 6,341 million yen
mainly due to decreases of 522 million yen in current portion of long-term loans payable and 240 million yen inincome taxes payable.
Non-current liabilities decreased 922 million yen to 7,982 million yen mainly due to decreases of 535 million
yen in long-term loans payable and 307 million yen in bonds payable.
Net assets were 14,311 million yen, an increase of 96 million yen from the end of the previous fiscal year.
(3) Explanation of Cash Flows
Cash and cash equivalents (hereinafter, “net cash”) decreased 1,733 million yen from the end of the previous
fiscal year to 8,998 million yen.
The cash flow components and the main reasons for changes are as described below.
(Cash flows from operating activities)
Net cash provided by operating activities was 518 million yen, compared with 495 million yen provided in thesame period of the previous fiscal year. This was mainly due to profit before income taxes of 439 million yen,depreciation of 723 million yen and income taxes paid of 467 million yen.
(Cash flows from investing activities)
Net cash used in investing activities was 642 million yen, compared with 1,103 million yen provided in the same
period of the previous fiscal year. This was mainly due to payments of 686 million yen for the purchase ofproperty, plant and equipment and 106 million yen in payments into time deposits.

3FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19(Cash flows from financing activities)
Net cash used in financing activities was 1,606 million yen, compared with 525 million yen used in the same
period of the previous fiscal year. This was mainly due to repayments of long-term loans payable of 1,058
million yen, redemption of bonds of 307 million yen and cash dividends paid of 166 million yen.
(4) Explanation of Consolidated Earnings Forecasts and Other Forward-looking Statements
There are no revisions to the full-year consolidated earnings forecast that was announced on May 11, 2018 in theSummary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2018.

4

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet
FY3/18(As of Mar. 31, 2018)(Thousands of yen)
Second quarter of FY3/19(As of Sep. 30, 2018)

AssetsCurrent assets
Cash and deposits

10,838,502

8,998,701

Accounts receivable - trade727,663

722,985

Merchandise

37,92337,805

Raw materials and supplies

787,256

786,326

Other

757,544630,286

13,148,890

11,176,105

Buildings, net

2,801,673

2,856,031

Land

2,832,185

2,832,185

Other, net

2,540,582

2,511,352

Total property, plant and equipment

8,174,440

8,199,570

2,449,528

2,363,498

955,493864,648

3,405,022

3,228,146

Total current assets
Non-current assets
Property, plant and equipment

Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities

698,768

713,202

Long-term loans receivable

1,000,642

972,514

Guarantee deposits

3,191,254

3,177,371

Deferred tax assets

648,333

638,731

Other

402,905

438,329

Allowance for doubtful accounts(8,193)(7,702)

Total investments and other assets

5,933,710

5,932,447

17,513,174

17,360,163

106,542

99,83230,768,606

28,636,101

Total non-current assets
Deferred assets
Total assets

5FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19(Thousands of yen)
Second quarter of FY3/19(As of Sep. 30, 2018)

FY3/18(As of Mar. 31, 2018)
Liabilities
Current liabilities
Accounts payable - trade

1,354,133

1,208,364

Current portion of bonds

615,000

615,000

Current portion of long-term loans payable

1,675,520

1,153,020

Accounts payable - other

2,010,721

1,875,199

Income taxes payable

497,408

256,530

Provision for bonuses

300,917331,520

Other

1,194,764

902,220

Total current liabilities

7,648,465

6,341,854

Bonds payable

3,980,000

3,672,500

Long-term loans payable

2,521,481

1,985,487

Non-current liabilities

Deferred tax liabilities for land revaluation

82,947

82,947

Deferred tax liabilities

145,868

140,259

Provision for directors’ retirement benefits

27,75327,753

Asset retirement obligations
Other
Total non-current liabilities

672,272

674,441

1,475,185

1,399,259

8,905,508

7,982,648

16,553,973

14,324,503

Capital stock

8,532,856

8,532,856

Capital surplus

4,981,675

4,981,675

Retained earnings

1,246,810

1,297,412

Total liabilities
Net assets
Shareholders’ equity

Treasury shares
Total shareholders’ equity

(245)

(245)

14,761,096

14,811,698

261,692

271,709-

40,042(962,306)(962,306)

19,26012,369(681,352)(638,184)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

134,889

138,084

14,214,633

14,311,598

30,768,606

28,636,101

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statement of Income)(For the Six-month Period)(Thousands of yen)First six months of FY3/18
First six months of FY3/19(Apr. 1, 2017 – Sep. 30, 2017) (Apr. 1, 2018 – Sep. 30, 2018)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
House rent income
Foreign exchange gains
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses on real estates
Miscellaneous loss
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of shares of subsidiaries
Gain on cancellation of leasehold contracts
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Loss on cancellation of leases
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

7

21,695,502
7,496,089
14,199,412
13,939,226
260,185

21,908,634
7,357,757
14,550,877
14,040,721
510,155

8,604
8,978
37,02625,43735,985116,032

6,614
7,163
36,10431,70825,612
107,20364,70930,13824,631
119,479
256,738

55,73329,098
48,684
133,517483,841

284,325
284,325

11,01811,01817,1807,567
24,748516,314294,613(4,065)
290,547
225,766
10,491
215,275

17,22934,6203,780
55,629439,230
237,469(18,079)
219,389
219,840
3,194
216,645

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19(Quarterly Consolidated Statement of Comprehensive Income)(For the Six-month Period)(Thousands of yen)First six months of FY3/18
First six months of FY3/19(Apr. 1, 2017 – Sep. 30, 2017) (Apr. 1, 2018 – Sep. 30, 2018)
Profit225,766

219,840

44,78810,017-40,042Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income-(6,891)44,78843,168

270,555

263,009

260,063

259,814

10,491

3,194

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

8

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19(3) Quarterly Consolidated Statement of Cash Flows(Thousands of yen)First six months of FY3/18
First six months of FY3/19(Apr. 1, 2017 – Sep. 30, 2017) (Apr. 1, 2018 – Sep. 30, 2018)
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Loss (gain) on sales of shares of subsidiaries
Loss (gain) on cancellation of leasehold contracts
Impairment loss
Increase (decrease) in provision for bonuses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for directors’ retirement
benefits
Interest and dividend income
Interest expenses
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accrued consumption taxes
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accounts payable - other
Other, net

516,314719,997
86,030(284,325)
7,567
23,822(770)

439,230
723,485
86,030(11,018)
34,62030,602(490)(1,825)-(17,583)
64,70917,18058,10947,619(233,941)(1,963)(181,736)(20,024)(13,777)
55,733
17,2294,643
574(144,966)(183,109)
137,481(132,407)(8,729)799,182
10,613(64,699)
20,770(270,164)

1,035,132
7,562(56,708)(467,456)

Net cash provided by (used in) operating activities

495,703

518,530

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of shares of subsidiaries
Purchase of intangible assets
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Payments of construction assistance fund receivables
Collection of construction assistance fund receivables
Other, net(728,244)
374,649(968,564)
2,520,000(62,944)(40,045)
75,146(45,766)
44,089(64,583)

106,240(686,104)(16,934)(67,630)
50,732(36,500)
47,837(39,869)

Net cash provided by (used in) investing activities

1,103,736(642,228)

350,000
683,793(1,073,116)(82,759)(237,500)(166,044)(1,058,736)(73,808)(307,500)(166,043)(525,626)(1,606,088)

SubtotalInterest and dividend income received
Interest expenses paid
Income taxes refund
Income taxes paid

Cash flows from financing activities
Proceeds from long-term loans payable
Proceeds from issuance of bonds
Repayments of long-term loans payable
Repayments of finance lease obligations
Redemption of bonds
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

11,947(3,774)

Net increase (decrease) in cash and cash equivalents

1,085,760(1,733,561)

Cash and cash equivalents at beginning of period

8,532,038

10,732,262

Cash and cash equivalents at end of period

9,617,799

8,998,701

9

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO., LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3/19(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Additional Information
Application of the Partial Amendments to Accounting Standard for Tax Effect Accounting
SRS HOLDINGS has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting”(Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 2018) , etc. in the first quarter ofthe current fiscal year. Accordingly, deferred tax assets and deferred tax liabilities are reclassified and includedin the investments and other assets section and the non-current liabilities section, respectively.
Segment and Other Information
The SRS Group does not provide segment information because it has only a single business segment of foodservice business.

This financial report is solely a translation of the Company’s Kessan Tanshin (including attachments) in Japanese, which
has been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenienceof readers who prefer an English translation.

10