FOR TRANSLATION PURPOSE ONLY

May 11, 2018

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 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 ordinary general meeting of shareholders:June 28, 2018

Scheduled date of payment of dividend:

June 29, 2018

Scheduled date of filing of Securities Report:

June 29, 2018

Preparation of supplementary references regarding financial results:

No

Holding of financial results briefing:

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

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2018 (April 1, 2017 – March 31, 2018)(1) Consolidated operating results
Net sales(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent

Operating profit

Million yen%

Fiscal year ended Mar. 31, 201844,155
Fiscal year ended Mar. 31, 2017
43,354
Note: Comprehensive income (million yen)

1.8
8.2

Net income pershare

Million yen%

Million yen

741
82.6
405 (25.1)
Fiscal year ended Mar. 31, 2018:
Fiscal year ended Mar. 31, 2017:

592
416

%

Million yen

42.2
15.3
177
(-%)
(80)
(-%)

%

108
(234)

-

Diluted net income
Ratio of ordinary Ratio of operating
Return on equity
per share
profit to total assets
profit to sales

Yen

Yen

%

Fiscal year ended Mar. 31, 2018
3.27
0.8
Fiscal year ended Mar. 31, 2017(7.05)(1.6)
Reference: Equity in earnings of affiliates (million yen) Fiscal year ended Mar. 31, 2018: Fiscal year ended Mar. 31, 2017: -

%

%

1.9
1.4

1.7
0.9

(2) Consolidated financial position
Total assets

Net assets

Million yen

As of Mar. 31, 2018
As of Mar. 31, 2017
Reference: Shareholders’ equity (million yen)

Net assets per share

Equity ratio
%

Yen

45.8
45.1
As of Mar. 31, 2017: 14,174423.98426.82Million yen

30,768
14,214
31,443
14,284As of Mar. 31, 2018: 14,079(3) Consolidated cash flow
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalentat end of period

Million yen

Million yen

Million yen

Million yen

1,970
1,637

1,039
(4,333)

(984)
2,697

10,732
8,532

Fiscal year ended Mar. 31, 2018
Fiscal year ended Mar. 31, 2017

2. Dividends
Dividends per share

Dividend
Dividends topayout ratio net assets ratio(Consolidated) (Consolidated)

1Q-end2Q-end3Q-endYear-end

Total

Total
dividends

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

-

-

-

5.00
5.00

5.00
5.00

166
166

153.0

1.2
1.2

-

-

-

5.00

5.00

Fiscal year ended Mar. 31, 2017
Fiscal year ended Mar. 31, 2018
Fiscal year ending Mar. 31, 2019
(forecast)

83.0

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): Yes
New companies: 1 company, SATO FOODSERVICE CO.,LTD.
Excluded companies: Note: Please refer to “(5) Notes to Consolidated Financial Statements, Business Combinations) on page 21 for further
information.

(2) 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(3) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of period (including treasury shares)
As of Mar. 31, 2018:33,209,080 shares
As of Mar. 31, 2017:33,209,080 shares
2) Number of treasury shares at the end of period
As of Mar. 31, 2018:294 shares
As of Mar. 31, 2017:262 shares
3) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2018:33,208,814 sharesFiscal year ended Mar. 31, 2017:33,208,842 shares(Reference) Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2018 (April 1, 2017 – March 31, 2018)(1) Non-consolidated operating results(Percentages represent year-on-year changes)
Net sales
Fiscal year ended Mar. 31, 2018
Fiscal year ended Mar. 31, 2017

Operating profit

Ordinary profit

ProfitMillion yen%

Million yen%

Million yen%

Million yen%

25,89934,145(24.2)
2.9

194
18

955.2
(83.8)

189
201

(6.1)
26.4

20
(219)

-

Net income per share

Diluted net income per share

Yen

Yen

0.60
(6.62)-

Fiscal year ended Mar. 31, 2018
Fiscal year ended Mar. 31, 2017

(2) Non-consolidated financial position
Total assets
Million yen

As of Mar. 31, 2018
As of Mar. 31, 2017
Reference: Shareholders’ equity (million yen)

Net assets
Million yen

26,75913,82728,50913,948
As of Mar. 31, 2018: 13,827

Net assets per share

Equity ratio
%

Yen

51.7
48.9
As of Mar. 31, 2017: 13,948

416.37420.01* This financial report is not subject to audit 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 FY3/18

Contents of Attachments
1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

3(3) Cash Flows3(4) Outlook

4(5) Basic Policy for Profit Distribution and Dividends for the Current and Next Fiscal Years5

2. Corporate Group6

3. Basic Approach to the Selection of Accounting Standards

6

4. Consolidated Financial Statements and Notes

7(1) Consolidated Balance Sheet

7(2) Consolidated Statements of Income and Comprehensive Income

9

Consolidated Statement of Income

9

Consolidated Statement of Comprehensive Income

10(3) Consolidated Statement of Changes in Equity

11(4) Consolidated Statement of Cash Flows

13(5) Notes to Consolidated Financial Statements

15(Going Concern Assumption)

15(Notes to Consolidated Balance Sheet)

15(Notes to Consolidated Statement of Income)16(Notes to Consolidated Statement of Comprehensive Income)18(Notes to Consolidated Statement of Changes in Equity)

18(Notes to Consolidated Statement of Cash Flows)

19(Business Combinations)19(Segment and Other Information)

22(Per Share Information)

23

1

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

1. Overview of Results of Operations(1) Results of Operations
1) Consolidated performance
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)
YoY
YoY
Resultschangechange(Amount)(%)
43,3543,293
8.2

Net sales(Millions of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)
YoY
YoY
Resultschangechange(Amount)(%)
44,155800
1.8Operating profit

405

(136)

(25.1)

741

335

82.6

Ordinary profit
Profit attributable to owners ofparent

416

55

15.3

592

175

42.2

(234)

(240)

-

108

342

-

In the fiscal year ended March 31, 2018, sales were higher than one year earlier. Sales declined due to the sale of
the Sushi-han business, but this was offset by the opening of new restaurants and the inclusion of MIYAMOTOMUNASHI CO., LTD., which became a wholly owned subsidiary in September 2016.
Earnings benefited from a decline in expenses because of the advisory fee one year earlier involving theacquisition of MIYAMOTO MUNASHI and growth in earnings at subsidiaries. As a result, operating profit andordinary profit increased.
Profit attributable to owners of parent increased due to a gain of 284 million yen on the sale of the shares of a
subsidiary following the sale of the Sushi-han business and other factors.
2) Opening and closure of restaurants
Name
Washoku Sato
Tendon Tempura
Honpo Santen
Meotozenzai

FY3/17(As of Mar. 31,
2017)
202 (-)

Newly
openedrestaurants
1 (-)

40 (1)

6 (1)Closedrestaurants
3 (-)
- (-)

(Number of restaurants)
FY3/18
Restaurants(As of Mar. 31,
planned to open
2018)
during FY3/18
200 (-)2 (-)
46 (2)

13 (5)

1 (-)

- (-)

- (-)

1 (-)

- (-)

Nigiri Chojiro *1

57 (-)

1 (-)

1 (-)

57 (-)

3 (-)

Nigiri Chujiro

6 (-)

- (-)

- (-)

6 (-)

- (-)

Miyakobito
Meshiya Miyamoto
Munashi
Katsuya15 (14)

- (-)

1 (1)

14 (13)- (-)

69 (7)

2 (-)

5 (1)

66 (6)1 (-)

36 (19)

3 (-)

3 (3)

36 (16)5 (3)Sushi-han *2

13 (-)- (-)

13 (-)

- (-)

- (-)

Domestic total

439 (41)

13 (1)

26 (5)

426 (37)

24 (8)

Overseas stores

6 (4)

- (-)

- (-)

6 (4)

1 (-)

Worldwide total
445 (45)
13 (1)
26 (5)
432 (41)
25 (8)
Note: Numbers in parentheses represent FC restaurants (domestic) and joint venture restaurants (overseas).
*1. Nigiri Chojiro includes Chojiro restaurants.
*2. 13 Sushi-han restaurants decreased because the Sushi-han business was sold to UMENOHANA CO., LTD. on April 1,
2017.

3) Other measures
At Washoku Sato restaurants, following on the progress made since last year, we completed the installation of
Sato Bar & Sato Café, which have self-serve facilities for alcoholic and other beverages, in line with the plan of
197 stores as of the end of March 2018. Customers appreciated the new all -you-can-drink style, and sales
followed an upward trend. In addition, regarding the core products Sato-Shabu (all-you-can-eat shabu-shabu)
and Sato-Suki (all-you-can-eat sukiyaki), sales continue to increase even after 10 years since their launch due tothe use of domestically produced vegetables and improvements to “popular sushi” and other measures. In

2

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

addition, around the turn of the new year, we sold Sato-Shabu Banquet Plan with Snow Crab and received verylarge numbers of customer bookings.
At Santen restaurants, we revised the Grand Menu by enlarging the children's menu and making other changes.
We also strengthened the menu selection for family groups, and in addition to the seasonal menu items, we soldlimited-time-only dishes such as Chili Pork Tendon (tempura served over rice in a bowl), Negi Chashu (leek androasted pork fillet) Tendon, Pork Tama (pork and egg) Tendon, and Tori Zukushi (all-chicken) Tendon.
Nigiri Chojiro restaurants offered seasonal menu items featuring special ingredients for each season of the year.
In order to provide even more enjoyment to customers, these restaurants offered limited quantities of fresh
bluefin tuna, Suma-Katsuo eastern little tuna, Akoh red-spotted grouper and other seafood shipped to restaurants
directly from where the fish were caught. Also, in accordance with the events of the season, we also sold fromevent-based menu items including Halloween, Christmas, Marukaburi Sushi (the beginning of spring), and Hina
Nidan Chirashi (Girl’s Day on March 3), and undertook campaigns in which TV commercials, websites, andsocial media were linked. Moreover, in December 2017, we redecorated the urban-style Chojiro restaurant inShijyokiyamachi, Kyoto, which is popular among foreign visitors to Japan.
At Meshiya Miyamoto Munashi restaurants, we are redecorating restaurants and introduced new dishes every two
weeks for the revitalization of restaurants. While closing five restaurants, we opened the first new Meshiya
Miyamoto Munashi restaurants in about eight years: one at Tenjinbashisuji 3-chome and one in front of JR
Teradacho station.
We made the transition to a holding company structure on October 1, 2017. The objective is to speed up
decision-making by separating the function of determining management strategies and the function of conducting
business operations. The company name was changed from SATO RESTAURANT SYSTEMS CO., LTD. to SRSHOLDINGS CO.,LTD. In addition, the restaurant and franchise HQ operation businesses were transferred to
SATO FOODSERVICE CO.,LTD., which was established on April 11, 2017.
The segment information is not provided because we have only a single segment of food service business.
(2) Financial Position
Total assets at the end of the fiscal year decreased 674 million yen from the end of the previous fiscal year to
30,768 million yen.
Current assets increased 2,451 million yen from the end of the previous fiscal year to 13,358 million yen. Thiswas mainly due to an increase of 2,306 million yen in cash and deposits.
Non-current assets decreased 3,145 million yen to 17,303 million yen. This was primarily due to decreases of
1,910 million yen in land and 398 million yen in other intangible assets.
Current liabilities increased 55 million yen from the end of the previous fiscal year to 7,648 million yen mainly
due to a decrease of 411 million yen in long-term loans payable, and increases of 140 million yen in current
portion of bonds and 263 million yen in other current liabilities .
Non-current liabilities decreased 660 million yen to 8,905 million yen mainly due to a decrease of 1,006 million
yen in long-term loans payable and an increase of 645 million yen in bonds payable.
Net assets were 14,214 million yen, a decrease of 70 million yen from the end of the previous fiscal year.
(3) Cash Flows
Cash and cash equivalents (hereinafter, “net cash”) increased 2,200 million yen from the end of the previous
fiscal year to 10,732 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 1,970 million yen, compared with 1,637 million yen provided in
the previous fiscal year. This was mainly due to profit before income taxes of 558 million yen and depreciation
3

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

of 1,563 million yen.
(Cash flows from investing activities)
Net cash provided by investing activities was 1,039 million yen, compared with 4,333 million yen used in theprevious fiscal year. This was mainly due to proceeds of 2,520 million yen from sales of shares of subsidiaries
and payments of 1,719 million yen for the purchase of property, plant and equipment.
(Cash flows from financing activities)
Net cash used in financing activities was 984 million yen, compared with 2,697 million yen provided in theprevious fiscal year. This was mainly due to repayments of long-term loans payable of 2,118 million yen andproceeds of 1,268 million yen from issuance of bonds.
(Reference) Trends in cash flow indicators
FY3/14

FY3/15

FY3/16

FY3/17

FY3/18Equity ratio (%)

39.6

42.5

51.8

45.1

45.8

Equity ratio based on market value (%)

91.4

123.4

94.1

89.0

103.2

Interest-bearing debt to cash flow ratio (years)

7.9

3.0

6.0

6.6

5.1

Interest coverage ratio (times)
7.5
17.7
9.1
12.65
15.54
Equity ratio: Shareholders’ equity / Total assets
Equity ratio based on market value: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest payments
Notes: 1. Market capitalization is calculated by the number of shares outstanding at the end of the period, excluding treasur yshares.
2. Operating cash flows are the figures for operating cash flows in the consolid ated statement of cash flows.
3. Interest-bearing debt includes all debts on the consolidated balance sheet that incur interest.

(4) Outlook
While the Japanese economy is on a gradual recovery trend, the economic outlook remains uncertain due to suchfactors as wide fluctuations in stock markets and foreign exchange caused by the international situation,
including the policies of the U.S. administration and movements in North Korea. Moreover, the business climateof the SRS Group remains challenging due to rising prices for raw materials, tight labor demand, and otherfactors.
Against this backdrop, we will continue to pursue the management policy of “aiming to be the restaurant thatbrings the highest customer satisfaction” and we will undertake the following measures to realize the vision of“becoming an essential part of the social infrastructure as a company with a 100 -year history”.
(Restaurant Opening Measures)
As for restaurant openings, six are planned for Washoku Sato, six for Tendon Tempura Honpo Santen (including
three franchises), six for Nigiri Chojiro, three for Nigiri Chujiro, five for Miyamoto Munashi, seven for Katsuya(including two franchises), and one for new business. Overseas, two are planned for Washoku Sato restaurants in
Taiwan and one in Thailand. A total of 37 new restaurant openings are planned for the domestic and overseas
markets.
(Marketing Measures)
At Washoku Sato restaurants, we are continuing to improve the popular Sato-Suki product and the self-service
style alcohol bar/drink bar Sato Bar & Sato Café introduced in the current fiscal year with the aim of becoming afamily restaurant that still more customers can enjoy. Moreover, we will promote measures for growth at the nextstage by such means as experimenting with new models for opening new restaurants and improving kitchenequipment.
At Santen, we will open both directly managed and franchised restaurants and accelerate growth while raisingprofitability based on the Santen Step-up Project, which was launched to develop Santen restaurants in such4FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

ways as improving product capabilities, strengthening promotion, and enhancing the sales system.
At Nigiri Chojiro, we will continue opening new restaurants in the Kansai area while promoting expansion into
new commercial areas such as the Chubu area.
At Miyamoto Munashi, we are continuing to increase sales by redecorating restaurants and offering limited-timeonly dishes. We also plan to upgrade ordering systems to reduce the workload.
At Katsuya, we will continue opening directly managed and franchised restaurants in the Kansai area while
taking initiatives to boost the profitability of existing restaurants.
(Other Measures)
On October 1, 2017, the Group established the Innovative Operation Development Department, aiming to breakaway from the labor-intensive model and achieve more efficient store management in order to establish both
higher productivity and systematic labor management. We plan to create mobile applications that can reserve,
pre-order, and handle electronic payments at all SRS Group restaurants. We also plan to open trial restaurantsthat use state-of-the-art IT and equipment for more efficiency and self-service, such as allowing guests to chooseseats and make payments themselves.
Moreover, as a group-wide issue, we aim to enhance the working environment and, through better management,
create and implement appropriate working time plans based on demand projections. We will also continue tomaintain strict legal compliance while increasing profitability.
(Outlook)
As of now, the consolidated business results for the next fiscal year are expected to be: 46,000 million yen fornet sales, 1,000 million yen for operating profit, 1,000 million yen for ordinary profit, and 200 million yen for
profit attributable to owners of parent.
(5) Basic Policy for Profit Distribution and Dividends for the Current and Next Fiscal Years
Our basic policy on profit allocation is to determine it according to performance. Our policy is to maintain themost stable level possible rather than keeping to a specific payout ratio. Meanwhile, retained earnings will beallocated toward areas such as new store investment and renovation of existing restaurants as we stren gthen our
corporate structure. Based on the above-mentioned policies, we have endeavored to strengthen our financial
structure by reorganizing our business to boost profitability. Comprehensively taking into consideration futurebusiness prospects and retained earnings, we have determined that the dividend for the end of the period will be
5.00 yen per share. As for the dividend in the next fiscal year, we are planning a payout of 5.00 yen per share at
the fiscal year’s end.
As specified under the Articles of Incorporation decided at the 43rd annual meeting of shareholders held on June29, 2011, “Pursuant to Article 459, Paragraph 1 of the Companies Act of Japan, retained earnings can be directed
toward dividend payment upon resolution of the board of directors.”
Furthermore, the allocation of retained earnings for the current fiscal year is as follows:
Date of resolution

Total amount of dividend(Thousand yen)

Board of Directors meeting on
May 11, 2018

166,043

5

Dividend per share
(Yen)
5.00

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

2. Corporate GroupOur group is composed of the Company and its six affiliates whose main business is operating restaurants.
We do not provide segment information because we have only a single business segment of food service
business.
Our group’s business content and relationship with the Company are described below with a systematic chart ofthe business.
(1) Our group’s business content and relationship with the Company
Restaurant management: SRS HOLDINGS CO.,LTD., SATO FOODSERVICE CO., LTD., FOODSNETCORPORATION, MIYAMOTO MUNASHI CO., LTD., SATO・ARCLAND FOODSERVICE CO.,LTD., and SRS TAIWAN COMPANY LIMITED operate restaurants thatserve mainly Japanese food.
Others:SPACE SUPPLY CO.,LTD. is primarily involved in the leasing of real estate.
(2) Systematic diagram of the business

Customers

Provide products

Provide products

SATO・ARCLAND FOOD SERVICE
CO.,LTD.
(consolidated subsidiary)
Provideproducts

SRS TAIWAN COMPANY LIMITED(consolidated subsidiary)

Provideproducts

SATO FOODSERVICE CO.,LTD.
(consolidated subsidiary)

FOODSNET CORPORATION(consolidated subsidiary)

Selling raw materials
products
Real estate leasing

Selling raw
materials
products

Facilities leasing

Provideproducts

MIYAMOTO MUNASHI CO., LTD.
(consolidated subsidiary)

Selling raw
materials
products

SRS HOLDINGS CO.,LTD.

Real estate leasing

SPACE SUPPLY CO.,LTD.

3. Basic Approach to the Selection of Accounting Standards
The Group expects to employ Japanese accounting standards for the time being. However, we intend to consider
the future adoption of International Financial Reporting Standards (IFRS) depending on the ratio of foreign
shareholders and adoption trends among other companies in Japan.

6

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

4. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet
FY3/17(As of Mar. 31, 2017)(Thousands of yen)
FY3/18(As of Mar. 31, 2018)

AssetsCurrent assets
Cash and deposits

8,532,038

10,838,502

Accounts receivable - trade

701,877

727,663

Merchandise

38,43237,923

Raw materials and supplies

824,721787,256

Deferred tax assets

216,754

209,306

Other
Total current assets

593,173757,544

10,906,999

13,358,196

Non-current assets
Property, plant and equipment
Buildings and structures

18,451,765*3

Accumulated depreciation
Buildings and structures, net(15,281,820)*2

3,169,945*3(640,403)

Machinery, equipment and vehicles

17,288,703*3(14,141,548)*2

3,147,154*3(625,619)

757,842

Accumulated depreciation
Machinery, equipment and vehicles, net

728,667

117,438*2, *4

Land
Leased assets

4,742,506

103,048*2, *4

2,832,185

2,086,317*3

Accumulated depreciation
Leased assets, net
Construction in progress
Other(813,116)

2,140,517*3(1,091,215)

1,273,200

1,049,301

1,546

48,9703,567,144*3

Accumulated depreciation
Other, net(2,829,829)

3,909,895*3(2,916,114)

737,314993,780

10,041,952

8,174,440

Goodwill

2,621,590

2,449,528

Other

1,353,616

955,493

Intangible assets

3,975,206

3,405,022

Total property, plant and equipment
Intangible assets

Investments and other assets*1, *2

Investment securities

1,036,523*1, *2698,768

Long-term loans receivable

1,028,180

1,000,642

Guarantee deposits

3,309,339

3,191,254

Deferred tax assets

561,214439,026

Other

508,972

402,905

Allowance for doubtful accounts(11,947)(8,193)

Total investments and other assets

6,432,284

5,724,404

20,449,443

17,303,867

Total non-current assets
Deferred assets
Total assets

7

86,814

106,542

31,443,256

30,768,606

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18(Thousands of yen)
FY3/18(As of Mar. 31, 2018)

FY3/17(As of Mar. 31, 2017)
Liabilities
Current liabilities
Accounts payable - trade

1,374,812

Current portion of bonds

475,000*2

Current portion of long-term loans payable

2,086,780

Lease obligations
Accounts payable - other

1,354,133
615,000*2

1,675,520

145,051

145,505

2,031,837

2,010,721

Income taxes payable

411,451

497,408

Provision for bonuses

281,843

300,917786,011

1,049,258

7,592,787

7,648,465

Other
Total current liabilities
Non-current liabilities
Bonds payable

3,335,000*2

Long-term loans payable

3,528,177

Lease obligations

3,980,000*2

1,260,110*4Deferred tax liabilities for land revaluation

2,521,481
1,204,812*4

252,387

82,947

Deferred tax liabilities

262,188

145,868

Provision for directors’ retirement benefits

29,57827,753

Asset retirement obligations

649,700

672,272

Other

248,432

270,373

Total non-current liabilities

9,565,576

8,905,508

17,158,364

16,553,973

Capital stock

8,532,856

8,532,856

Capital surplus

4,981,675

4,981,675

Retained earnings

1,000,894

1,246,810

Total liabilities
Net assets
Shareholders’ equity

Treasury shares
Total shareholders’ equity

(214)

(245)

14,515,211

14,761,096

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

236,621*4

Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

8(577,541)

261,692*4(962,306)-

19,260(340,919)(681,352)

110,600

134,889

14,284,892

14,214,633

31,443,256

30,768,606

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statement of Income)(Thousands of yen)
FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Directors' compensations
Salaries and allowances
Employees' bonuses
Provision for bonuses
Welfare expenses
Retirement benefit expenses
Utilities expenses
Supplies expenses
Rent expenses
Repair expenses
Depreciation
Miscellaneous expenses
Amortization of goodwill
Total 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
Foreign exchange losses
Miscellaneous loss
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Gain on sales of shares of subsidiaries
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of investment securities
Loss on cancellation of rental contracts
Impairment loss
Transfer lump-sum
Loss on closing of stores
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Profit attributable to non-controlling interests
Profit (loss) attributable to owners of parent

43,354,985
14,885,417
28,469,567

44,155,516
15,367,304
28,788,212

185,400
13,095,295
287,756
278,038
1,121,662
229,237
1,729,141
1,186,236
4,369,134
515,904
1,454,448
3,473,567
137,831
28,063,655
405,912

190,020
13,103,055
285,000
289,604
1,182,258
219,216
1,818,200
1,151,398
4,493,368
502,908
1,549,114
3,090,669
172,061
28,046,876
741,335

14,98917,75270,817
87,241
55,127245,928

16,14918,36373,121
71,107
178,742

129,449
64,76940,728234,947
416,893

126,846
59,84987,781
52,836327,313592,764*1

22,70259,315410*2132,172
48,517888
264,007
152,885
337,326
46,607
383,934(231,048)
2,992(234,040)

9

*4
*3

*1

35,077284,325
319,40335,196
12,075*2
306,445
353,717558,449
592,814(167,179)
425,634
132,814
24,288
108,525

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18(Consolidated Statement of Comprehensive Income)(Thousands of yen)
FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Profit (loss)(231,048)

132,814

Valuation difference on available-for-sale securities

127,644

25,070

Revaluation reserve for land

22,520--19,260

Other comprehensive income

Foreign currency translation adjustment*

Total other comprehensive income
Comprehensive income

150,165*

44,331(80,882)

177,146(83,874)

152,857

2,992

24,288Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

10FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18(3) Consolidated Statement of Changes in Equity
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodDividends of surplus
Profit (loss) attributable toowners of parent
Purchase of treasury shares
Reversal of revaluation
reserve for land
Change of scope of
consolidation
Change of scope of
consolidation - foreign
currency translation
adjustment
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period8,532,856

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity1,400,978(173)

14,915,337

4,981,675(166,044)(166,044)(234,040)(234,040)
(41)

(41)
-

-

-

(400,084)(41)(400,126)

8,532,856

4,981,675

1,000,894(214)

14,515,211(Thousands of yen)

Accumulated other comprehensive income
Valuationdifference on
Revaluation
available-for- reserve for landsale securities
Balance at beginning ofcurrent period
Changes of items during
periodDividends of surplus
Profit (loss)
attributable to ownersof parent
Purchase of treasury
shares
Reversal of revaluation
reserve for land
Change of scope of
consolidation
Change of scope of
consolidation - foreign
currency translation
adjustment
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

108,976

Foreigncurrencytranslation
adjustment(600,061)-

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net assets(491,085)

107,608

14,531,860(166,044)(234,040)
(41)
-

-

127,644

22,520-150,165

2,992

153,157

127,644

22,520-150,165

2,992(246,968)

236,621(577,541)-(340,919)

110,600

14,284,892

11

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)(Thousands of yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodDividends of surplus
Profit (loss) attributable toowners of parent
Purchase of treasury shares
Reversal of revaluation
reserve for land
Change of scope of
consolidation
Change of scope of
consolidation - foreign
currency translation
adjustment
Net changes of items otherthan shareholders’ equity
Total changes of items
during period
Balance at end of current
period8,532,856

Capital surplus

Retained earnings

Treasury shares

Total shareholders’equity1,000,894(214)

14,515,211

4,981,675(166,044)(166,044)

108,525

108,525(30)(30)

384,764

384,764(81,330)(81,330)--

245,916(30)

245,885

8,532,856

4,981,675

1,246,810(245)

14,761,096(Thousands of yen)

Accumulated other comprehensive income
Valuationdifference on
Revaluation
available-for- reserve for landsale securities
Balance at beginning ofcurrent period
Changes of items during
periodDividends of surplus
Profit (loss)
attributable to ownersof parent
Purchase of treasury
shares
Reversal of revaluation
reserve for land
Change of scope of
consolidation
Change of scope of
consolidation - foreign
currency translation
adjustment
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

236,621

Foreigncurrencytranslation
adjustment(577,541)-

Total
accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net assets(340,919)

110,600

14,284,892(166,044)
108,525(30)
384,764(81,330)
19,26025,070(384,764)

25,070(384,764)

261,692(962,306)

12

19,26019,260(359,694)

24,288(335,405)

19,260(340,433)

24,288(70,258)

19,260(681,352)

134,889

14,214,633

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18(4) Consolidated Statement of Cash Flows(Thousands of yen)
FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Cash flows from operating activities
Profit before income taxes

152,885

558,449

1,466,348

1,563,697

Amortization of goodwill

137,831

172,061

Impairment loss

132,172

306,445

Depreciation

Increase (decrease) in provision for bonuses

8,927

19,074

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for directors’ retirement
benefits
Increase (decrease) in provision for loss on store closing(1,558)(3,754)-(1,825)(8,599)-Interest and dividend income(32,741)(34,513)Interest expenses

129,449

126,846

Loss (gain) on valuation of investment securities

59,315

12,075-(35,077)

Loss on retirement of non-current assets

22,70235,196

Transfer lump-sum

48,517-

Loss on store closings

888-

Loss (gain) on sales of investment securities

Loss (gain) on sales of shares of subsidiaries-(284,325)

Decrease (increase) in notes and accounts receivable - trade(98,876)(25,757)

Decrease (increase) in inventories(100,383)

48,290

Increase (decrease) in notes and accounts payable - trade

194,832(37,744)

Increase (decrease) in accounts payable - other(215,479)(34,338)

Increase (decrease) in accrued consumption taxes(17,182)

289,831-(226,601)

Other, net

85,754724

Subtotal

1,964,804

2,448,755

17,723

21,545Interest expenses paid

(128,682)(126,627)

Income taxes refund

40,865

20,770Decrease (increase) in consumption taxes refund receivable

Interest and dividend income received

Income taxes paid

(257,326)(393,721)

Net cash provided by (used in) operating activities

1,637,384

1,970,722(333,986)(950,834)

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits

365,541

856,756

Purchase of property, plant and equipment(1,333,077)(1,719,293)

825-

Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of intangible assets
Proceeds from sales of intangible assets
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Proceeds from sales of shares of subsidiaries(9,842)--

162,363(206,850)(105,641)-

303,415(2,381,665)-*2

2,520,000

Purchase of shares of subsidiaries and associates(116,230)-

Payments for guarantee deposits(87,097)(63,363)

Proceeds from collection of guarantee deposits

66,741

129,366

Payments of construction assistance fund receivables(249,312)(70,107)

Collection of construction assistance fund receivables

89,98789,394

Other, net
Net cash provided by (used in) investing activities

13(138,165)(113,016)(4,333,129)

1,039,040

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18(Thousands of yen)
FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Cash flows from financing activities
Proceeds from long-term loans payable

2,050,000

700,000

Repayments of long-term loans payable(2,633,023)(2,118,463)

Repayments of finance lease obligations(222,427)(153,922)

Proceeds from issuance of bonds

3,858,819

1,268,543

Redemption of bonds(190,000)(515,000)

Purchase of treasury shares

(41)

(30)

Cash dividends paid

(166,044)(166,044)

Net cash provided by (used in) financing activities

2,697,282(984,917)

Effect of exchange rate change on cash and cash equivalents(85,880)

47,329Net increase (decrease) in cash and cash equivalents(84,343)

2,072,174

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated
subsidiary

8,616,381

8,532,038-

128,048*1

Cash and cash equivalents at end of period

148,532,038*1

10,732,262

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Notes to Consolidated Balance Sheet*1. The following items are applicable to a non-consolidated subsidiaries.

Investment securities (stocks)

FY3/17(As of Mar. 31, 2017)284,518(Thousands of yen)
FY3/18(As of Mar. 31, 2018)
50,000FY3/17(As of Mar. 31, 2017)75,262(Thousands of yen)
FY3/18(As of Mar. 31, 2018)
76,9882,804,319

2,804,319

328,859

327,590

3,208,440

3,208,898*2. Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral

Buildings and structures
Land
Investment securities
Total
Liabilities with collateral

FY3/17(As of Mar. 31, 2017)
Long-term loans payable(including current portion of long-term loans payable)

3,246,930(Thousands of yen)
FY3/18(As of Mar. 31, 2018)
2,597,380*3. Accumulated depreciation include accumulated impairment losses.
*4. Revaluation of Land
The Company revalued land used for business operations pursuant to the Act on Revaluation of Land (Act No. 34, March 31,
1998) and the Act for Partial Revision of the Act on Revaluation of Land (revised on March 31, 1999), and recorded“deferred tax liabilities for land revaluation” under liabilities and “revaluation reserve for land” under net assets.
- Method of revaluation: Land is revalued by using the method stipulated in “Basic Notice on Asset Valuations for
Determining the Value of Land Used for Calculating Land Value Tax” as provided for in Article
16 of the Land Value Tax Act in accordance with Article 2, Item 4 of the Enforcement
Regulations for the Act on Revaluation of Land (Ordinance No. 119, March 31, 1998).
- Date of revaluation: March 31, 2000
FY3/17(As of Mar. 31, 2017)
The difference between the market value of land and bookvalue after revaluation(2,119,864)

15(Thousands of yen)
FY3/18(As of Mar. 31, 2018)(1,212,457)

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

Notes to Consolidated Statement of Income*1. Breakdown of loss on retirement of non-current assets(Thousands of yen)
FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
14,50823,143

Buildings and structures
Machinery, equipment and vehicles

77

643

Property and equipment, others

5,366

11,342Intangible assets, others

2,750

-

-

67

22,70235,196

Investment and other assets
Total*2. Impairment loss
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
The Group recognized an impairment loss on the following groups of assets.
(1) Overview of groups of assets for which impairment loss has been recognizedPrimary use

Stores, etc.

Class

Location
Katsushika, Tokyo
Higashikurume, Tokyo
Misato, Saitama
Kawagoe, Saitama
Funabashi, Chiba
Nagoya, Aichi
Kyoto, Kyoto
Osaka, Osaka
Higashiosaka, Osaka
Matsubara, Osaka
Osakasayama, Osaka
Nishinomiya, Hyogo
Akashi, Hyogo

Buildings and structures
Machinery, equipment and vehicles
Lease assets
Property and equipment, others
Long-term prepaid expenses(2) Reason for decision to recognize impairment losses
The book values of assets associated with stores that have been consistently unprofitable and assets associated with storesthat are to be closed have been reduced to the amounts that can be recovered. These reductions have been recognized as an
extraordinary loss for impairment losses.
(3) Amount of impairment loss
Primary use(Thousands of yen)AmountClass
Buildings and structures

Stores, etc.

85,352

Machinery, equipment and vehicles

2,663

Lease assets

24,663

Property and equipment, others

18,980Long-term prepaid expenses

512

Total

132,172(4) Method used to group assets
The Group regards each store as the base unit in identifying the smallest group of assets that generate cash flows. Assets forlease and idle assets, however, are grouped on an individual asset basis.
(5) Method for calculating recoverable amountThe recoverable amount for the asset group is measured using utility value which is calculated by discounting future cash
flows by 1.8 to 2.8%.

16

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
The Group recognized an impairment loss on the following groups of assets.
(1) Overview of groups of assets for which impairment loss has been recognizedPrimary use

Stores, etc.

Class

Location
Nagoya, Aichi
Ayabe, Kyoto
Kyoto, Kyoto
Koshigaya, Saitama
Kawagoe, Saitama
Soka, Saitama
Ranzan, Saitama
Osakasayama, Osaka
Osaka, Osaka
Daito, Osaka
Ikeda, Osaka
Higashiosaka, Osaka
Yao, Osaka
Shinonoi, Nagano
Minato, Tokyo
Higashikurume, Tokyo
Musashimurayama, Tokyo
Tachikawa, Tokyo
Ikoma, Nara
Kobe, Hyogo
Amagasaki, Hyogo
Takarazuka, Hyogo

Buildings and structures
Machinery, equipment and vehicles
Lease assets
Property and equipment, others
Long-term prepaid expenses(2) Reason for decision to recognize impairment losses
The book values of assets associated with stores that have been consistently unprofitable and assets associated with storesthat are to be closed have been reduced to the amounts that can be recovered. These reductions have been recognized as an
extraordinary loss for impairment losses.
(3) Amount of impairment loss
(Thousands of yen)Primary use

Stores, etc.

Class

AmountBuildings and structures

92,408

Machinery, equipment and vehicles

1,048

Lease assets

156,967

Property and equipment, others

55,606Long-term prepaid expenses

414

Total

306,445(4) Method used to group assets
The Group regards each store as the base unit in identifying the smallest group of assets that generate cash flows. Assets forleased and idle assets, however, are grouped on an individual asset basis.
(5) Method for calculating recoverable amountThe recoverable amount for an asset group is measured by using utility value which is calculated by discounting future cash
flows by 4.9%.
*3. Gain on sales of shares of subsidiaries
Gain on sales of shares of subsidiaries was recorded due to the sale of all the shares issued of non -consolidated subsidiary
SUSHI-HAN CO., LTD.
*4. Gain on sales of investment securities
Gain on sales of investment securities was recorded due to the elimination of cross-shareholdings.

17

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

Notes to Consolidated Statement of Comprehensive Income* Reclassification adjustments and tax effect with respect to other comprehensive income(Thousands of yen)
FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Valuation difference on available-for-sale securities:
Amount incurred during the year
Reclassification adjustments

164,359

71,446-(35,321)

Before tax effect adjustments

164,359

36,124

Tax effect(36,714)(11,054)

Valuation difference on available-for-sale securities

127,644

25,07022,520--19,260150,165

44,331

Revaluation reserve for landTax effectForeign currency translation adjustment
Amount incurred during the year
Total other comprehensive income

Notes to Consolidated Statement of Changes in Equity
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017)
1. Type and number of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2016

Increase(Shares)Number of shares
as of Mar. 31, 2017

Decrease

Outstanding shares
Common shares

33,209,080-

33,209,080-

Treasury shares
Common shares (Note)212
50
Note: The number of treasury shares of common shares increased 50 shares due to the acquisition of odd-lot shares.

262

2. Share acquisition rights
Not applicable.
3. Dividends(1) Dividend payment
Resolution
Board of Directors Meetingon May 11, 2016

Type ofshare
CommonsharesTotal dividends(Thousands of yen)
166,044

Source offunds
Retainedearnings(2) Dividends with a record date in FY3/17 but an effective date in FY3/18
Type of
Total dividends
Source of
Resolution
share(Thousands of yen)funds
Board of Directors Meeting
CommonRetained
166,044
on May 12, 2017
sharesearnings

Dividend pershare (Yen)Record date

Effective date

5.00

Mar. 31, 2016

Jun. 30, 2016

Dividend pershare (Yen)Record date

Effective date

5.00

Mar. 31, 2017

Jun. 30, 2017

FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
1. Type of number of outstanding shares and treasury shares
Number of shares
as of Apr. 1, 2017

Increase(Shares)Number of shares
as of Mar. 31, 2018

Decrease

Outstanding shares
Common shares

33,209,080--

33,209,080

262

32

-

294

Treasury shares
Common shares (Note)

Note: The number of treasury shares of common shares increased 32 shares due to the acquisition of odd-lot shares.

18

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

2. Share acquisition rights
Not applicable.
3. Dividends(1) Dividend payment
Resolution
Board of Directors Meetingon May 12, 2017

Type ofshare
CommonsharesTotal dividends(Thousands of yen)
166,044

Source offunds
Retainedearnings(2) Dividends with a record date in FY3/18 but an effective date in FY3/19
Type of
Total dividends
Source of
Resolution
share(Thousands of yen)funds
Board of Directors Meeting
CommonRetained
166,043
on May 11, 2018
sharesearnings

Dividend pershare (Yen)Record date

Effective date

5.00

Mar. 31, 2017

Jun. 30, 2017

Dividend pershare (Yen)Record date

Effective date

5.00

Mar. 31, 2018

Jun. 29, 2018

Notes to Consolidated Statement of Cash Flows*1. Reconciliation of cash and cash equivalents at the end of the fiscal year and the balance sheet amount.
(Thousands of yen)
FY3/17
FY3/18(Apr. 1, 2016 – Mar. 31, 2017) (Apr. 1, 2017 – Mar. 31, 2018)
Cash and deposits

8,532,038

Time deposits with maturities over 3 months
Cash and cash equivalents

10,838,502-(106,240)

8,532,038

10,732,262*2. Assets and liabilities of a subsidiary excluded from the scope of consolidation due to the sale of its shares
SUSHI-HAN CO., LTD. is no longer a consolidated subsidiary due to the sale of its shares. The breakdown of assets andliabilities as of the date of the sale, as well as the sales price of SRS HOLDINGS’ shares and net payments for the shares are
as follows.
(Thousands of yen)
Current assets
1,000
Non-current assets
2,155,600
Non-current liabilities
555
Expenses related to sale of shares
79,629
Sale of the shares of a subsidiary284,325
Sale price of shares of a subsidiary
2,520,000
Proceeds from sales of shares of a subsidiary 2,520,000
Note: These proceeds are the result of the sale of all shares of SUSHI-HAN CO., LTD., a non-consolidated subsidiary,on April 1, 2017 following the divestiture of the Sushi-han business and transfer of this business to this nonconsolidated subsidiary.
*3. Material non-cash transactions
Assets and obligations applicable to finance lease transactions
FY3/17(Apr. 1, 2016 – Mar. 31, 2017)(Thousands of yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)

350,535

99,119Assets and obligations applicable to finance leasetransactions

Business Combinations
Business divesture
On April 1, 2017, SRS HOLDINGS (SRS) conducted a simple absorption divestiture of the Sushi-han business andtransferred this business to SUSHI-HAN CO., LTD., a company established by SRS on February 15, 2017. SRS
subsequently sold all shares of SUSHI-HAN CO., LTD. to UMENOHANA CO., LTD.

19

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

1. Summary of business divesture(1) Company receiving divested business and purchaser of shares
1) Company receiving divested business
SUSHI-HAN CO., LTD.
2) Purchaser of shares
UMENOHANA CO., LTD.
(2) Description of businessSushi-han Business(3) Major reason for divesture
The Sushi-han business has made a contribution to sales and earnings for many years as a core business of SRS. Sushi-han isa brand that dates back to the founding of SRS and the brand that led Washoku Sato, currently the primary brand at SRS, andthe new strategic business format that uses the Tendon Tempura Honpo Santen brand. In recent years, SRS has been working
on building a stable foundation for business operations that is not significantly vulnerable to changes in economic
conditions. The current medium-term business plan has the goal of creating and expanding lower -priced business models. As
a result, the decision was made to minimize new investments in the Sushi-han business from the standpoint of efficiently
allocating the resources of the SRS Group.
In addition, management believed that Sushi-han did not have good prospects for growth as a member of the SRS Groupbecause there were only 13 of these restaurants.
UMENOHANA CO., LTD., the purchaser of SUSHI-HAN shares, operates restaurants in all areas of Japan, primarily
Umenohana branded restaurants that serve Japanese dishes using tofu and tofu skin (yuba). The restaurants of this company
have a strong position in the higher-priced sector of the restaurant market. Combining Umenohana’s expertise involving
traditional Japanese cuisine with Sushi-han’s expertise involving the preparation of fish is expected to contribute to moreprogress and growth in all the businesses of UMENOHANA. Furthermore, SRS and UMENOHANA believe this divestiture
will position Sushi-han for growth. As a member of the UMENOHANA Group, Sushi-han will benefit from economies ofscale involving the supply of merchandise and the joint procurement of various supplies. Synergies involving logistics andother activities are also anticipated. In addition, there are expectations for the renewed growth of Sushi-han by remodelingrestaurants and opening new ones as this chain is extended to more areas of Japan, new menu items are added and otheractions are taken. For these reasons, SRS decided to sell all shares of SUSHI-HAN to UMENOHANA.
(4) Absorption divestiture date and date of sale of shares
April 1, 2017(5) Legal structure and other items concerning this transaction
Absorption divestiture: The Sushi-han business was divested by SRS and transferred to SUSHI-HAN CO., LTD.
Sale of shares: Shares was sold in return for solely a payment of cash, etc.
2. Accounting information(1) Gain on sale
Gain on sales of shares of subsidiaries

284,325 thousand yen(2) Suitable book value and description of assets and liabilities of the business soldNon-current assets
Total assets
Non-current liabilities
Total liabilities

2,155,600 thousand yen
2,155,600
555555(3) Accounting for shares held
The difference between the consolidated financial statement book value of the shares that was sold and the proceeds fromthe sale is recognized as extraordinary income for a “gain on sales of shares of subsidiaries.”

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FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

3. Estimated amount of profits/losses of the divested business in the consolidated financial statements for the consolidated
fiscal year ended March 31, 2018
The consolidated statement of income for the fiscal year ended March 31, 2018 has no profit or loss from the divested
business because the divestiture and sale took place on the first day of the fiscal year.
Transaction under common control
1. Summary of transaction
In accordance with a resolution approved by the Board of Directors of S ATO RESTAURANT SYSTEMS CO., LTD. on June
13, 2017, there was an absorption divestiture on October 1, 2017 for the purpose of changing to a holding comp any
structure. SATO RESTAURANT SYSTEMS CO., LTD. was the divesting company and the company receiving the divested
business was SATO FOODSERVICE CO., LTD., which was established on April 11, 2017 as a company to prepare for thisdivestiture. In conjunction with this divestiture, SATO RESTAURANT SYSTEMS CO., LTD. changed its name to SRSHOLDINGS CO.,LTD. on October 1, 2017.
(1) Name and business activities of companies involved with the divestiture(1) Company name(2) Location(3) Representative(4) Business(5) Paid in capital(6) Date of establishment(7) Number of outstanding
shares(8) Year end(9) Major shareholder andshareholding ratio

Divesting company(As of September 30, 2017)
SATO RESTAURANT SYSTEMS CO., LTD.
(Note)
30F Osaka Kokusai Building, 2-3-13, Azuchimachi, Chuo-ku, Osaka-city, OSAKA
Masahiko Shigesato, President & CEO
Operation of restaurants, supervision ofsubsidiaries operating franchise headquarters andother activities, and all associated or related
businesses
8,532 million yen
August 27, 1968
33,209,080

Successor company(As of September 30, 2017)
SATO FOODSERVICE CO.,LTD.
30F Osaka Kokusai Building, 2-3-13,
Azuchi-machi, Chuo-ku, Osaka-city,
OSAKA
Masahiko Shigesato, President & CEO
Operation of restaurants, operating
franchise headquarters, etc.
1 million yen
April 11, 2017
100

March 31
Yoshitaka Shigesato
Yuriko Shigesato
Bank of Tokyo-Mitsubishi UFJ,Ltd.
Japan Trustee Services Bank, Ltd.
(Trust Account 4)
Kirin Brewery Company, Limited
Japan Trustee Services Bank, Ltd.
(Trust Account 5)
Japan Trustee Services Bank, Ltd.
(Trust Account)
Japan Trustee Services Bank, Ltd.
(Trust Account 2)
Japan Trustee Services Bank, Ltd.
(Trust Account 1)
Merrill Lynch Japan Securities Co., Ltd.

March 31
6.72%
5.89%
3.61%
2.58%
1.81%
1.31%
1.17%

SATO RESTAURANT
SYSTEMS CO., LTD.
(Note)

100.00%

0.92%
0.91%
0.87%

Note: The divesting company was changed its name to SRS HOLDINGS CO.,LTD. on October 1, 2017.
(2) Acquisition date
October 1, 2017(3) Legal method of combination
Absorption divestiture with SATO RESTAURANT SYSTEMS CO., LTD. the divesting company and SATO FOODSERVICE
CO., LTD. the company receiving the divested business(4) Purpose of the absorption divestiture
The shift to a holding company by using a divestiture was done in order to create separate companies for determining

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FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

management strategies and conducting business operations. The objectives are to speed up decision-making, improve theability to give people skills needed to become managers, and operate businesses with speed and flexibility.
2. Summary of accounting methods applied
As a transaction of units under the same control, the transaction was processed in accordance with “Accounting Standard forBusiness Combinations” and “Guidance on Accounting Standard for Business Combinations and Accounting Standard forBusiness Divestitures”.

Segment and Other Information
Segment information
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017) and FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
We do not provide segment information because we have only a single business segment of food service
business.
Related information
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017) and FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
1. Information by product and service
Omitted since sales to external customers which account for more than 90% of net sales shown on the
consolidated statement of income are derived from a single product or service category.
2. Information by region(1) Net sales
Omitted since sales to external customers in Japan exceeded 90% of sales on the consolidated statement ofincome.
(2) Property, plant and equipment
Omitted since property, plant and equipment in Japan exceeded 90% of property, plant and equipment on the
consolidated balance sheet.
3. Information by major client
Omitted since no external client accounts for more than 10% of sales on the consolidated statement of income.
Information related to impairment losses on non-current assets for each reportable segment
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017) and FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
Omitted since the Group has only a single business segment of food service business.
Information related to goodwill amortization and the unamortized balance for each reporta ble segment
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017) and FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
Omitted since the Group has only a single business segment of food service business.
Information related to gain on bargain purchase for each reportable segment
FY3/17 (Apr. 1, 2016 – Mar. 31, 2017) and FY3/18 (Apr. 1, 2017 – Mar. 31, 2018)
Not applicable.

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FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for FY3/18

Per-share Information

Net assets per share

FY3/17(Apr. 1, 2016 – Mar. 31, 2017)426.82(Yen)
FY3/18(Apr. 1, 2017 – Mar. 31, 2018)423.98(7.05)

3.27

Net income (loss) per share

Notes: 1. Diluted net income per share for FY3/17 is not presented since the Company posted a net loss, and has nooutstanding dilutive securities. Diluted net income per share for FY3/18 is not presented since the Company has nooutstanding dilutive securities.
2. Basis for calculating net assets per share is as follows.

Total net assets (Thousands of yen)

FY3/17(As of Mar. 31, 2017)
14,284,892

FY3/18(As of Mar. 31, 2018)
14,214,633

110,600

134,889[110,600][134,889]

14,174,291

14,079,743

33,208,818

33,208,786

Deduction on total net assets(Thousands of yen)[of which non-controlling interests(Thousands of yen)]
Net assets applicable to common shares(Thousands of yen)
Number of common shares at end of
period used in calculation of net assets per
share (Shares)
3. Basis for calculating net income per share is as follows.

FY3/17(Apr. 1, 2016 – Mar. 31, 2017)
Profit (loss) attributable to owners ofparent (Thousands of yen)Amounts not available to commonshareholders (Thousands of yen)
Profit (loss) attributable to owners ofparent applicable to common shares(Thousands of yen)
Average number of shares outstanding
during the period (Shares)

FY3/18(Apr. 1, 2017 – Mar. 31, 2018)(234,040)

108,525--(234,040)

108,525

33,208,842

33,208,814

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.

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