FOR TRANSLATION PURPOSE ONLYDISCLAIMER
This English translation is only for reference purpose. When they are any discrepancies between original Japanese version andEnglish translation version, the original Japanese version always prevails.
November 8, 2019

Summary of Consolidated Financial Results for the Second Quarterof the Fiscal Year Ending March 31, 2020
(Six Months Ended September 30, 2019)[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 13, 2019

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, 2020
(April 1, 2019 – September 30, 2019)(1) Consolidated operating results
Net sales
Million yen

Operating profit%

Six months ended Sep. 30, 201922,487Six months ended Sep. 30, 2018
21,908
Note: Comprehensive income (million yen)

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

Million yen%

Million yen

2.6
441(13.5)
1.0
510
96.1
Six months ended Sep. 30, 2019:
Six months ended Sep. 30, 2018:

Net income per share

Diluted net income per share

Yen

Yen

6.26
6.52

-

Six months ended Sep. 30, 2019
Six months ended Sep. 30, 2018%

Million yen

%

542
12.2
483
88.5
153 (down41.7%)
263 (down2.8%)

207
216

(4.0)
0.6

(2) Consolidated financial position
Total assets

Net assets

Million yen

As of Sep. 30, 2019
As of Mar. 31, 2019
Reference: Shareholders’ equity (million yen)

Net assets per share

Equity ratio
%

Yen

50.9
48.3
As of Mar. 31, 2019: 14,141424.51425.83

Million yen

27,713
14,231
29,274
14,277
As of Sep. 30, 2019: 14,097

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

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2019
Fiscal year ending Mar. 31, 2020
Fiscal year ending Mar. 31, 2020
(forecast)
Note: Revisions to the most recently announced dividend forecast: None

-

6.00

6.00

-

5.00

5.00

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2020 (April 1, 2019 – March 31, 2020)
Net sales
Full year

Million yen
46,000Operating profit%
3.3

Million yen
950

%
(6.8)

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

Ordinary profit
Million yen
1,000

%
2.4

Million yen
290

%
2.6

Yen
8.73

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:
2) Changes in accounting policies other than 1) above:3) Changes in accounting -based estimates:
4) Restatements:

None
None
None
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, 2019:33,209,080 shares
As of Mar. 31, 2019:33,209,080 shares
2) Number of treasury shares at the end of period
As of Sep. 30, 2019:343 shares
As of Mar. 31, 2019:343 shares
3) Average number of shares outstanding during the period
Six months ended Sep. 30, 2019:33,208,737 shares
Six months ended Jun. 30, 2018:33,208,786 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 ONLY

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Results………………………………………

2(1) Explanation of Results of Operations……………………………………………………………………………

2(2) Explanation of Financial Position………………………………………………………………………………

3(3) Explanation of Cash Flows…………………………………………………………………………………………

3(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 Period………………………………………………………………………………………

8(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(Segment and Other Information)…………………………………………………………………………………

10(Significant Subsequent Events)…………………………………………………………………………………

10

-

1-

FOR TRANSLATION PURPOSE ONLY

1. Qualitative Information on Quarterly Consolidated Financial Results(1) Explanation of Results of Operations①Consolidated Performance(Millions of yen)First six months of FY 3/19

First six months of FY 3/20

(Apr.1,2018-Sep.30,2018)(Apr.1,2019-Sep.30,2019)

Results
Net sales

YoYchangeYoYchange(Amount)(%)

Results

YoYchangeYoYchange(Amount)(%)

21,908213

1.0%

22,487578

2.6%

Operating profit

510

249

96.1%

441

△69

△13.5%

Ordinary profit

483

227

88.5%

542

58

12.2%

Profit attributableto owners of parent

216

1

0.6%

207

△8

△4.0%

In the first half of the fiscal year ending March,2020 sales rose mainly due to an increase in thenumber of new stores opened and a steady increase of sales in the existing stores of ‘‘Nigiri Chojiro’’
restaurants.
Operating profit decreased due to an increase in personnel expenses and other factors, but ordinary
income increased due to an increase in dividends received and other factors.Profit attributable toowners of parent decreased due to an increase in tax expenses.
(Other Measures)
In the ‘‘Washoku Sato’’ restaurants,we continued to refine our core menu ‘‘Sato-Shabu’’(all-you-can-eat
Shabu-shabu)and ‘‘Sato-Suki’’(all-you-can-eat Sukiyaki)take steps to increase the frequency of customer
visits to our stores, such as holding a Sato-Shabu 10th anniversary campaign and launching a Deluxe
course that allows customers to enjoy all-you-can-eat specialty food.
In the ‘‘Tendon Tempura Honpo Santen’’ restaurants,with the aim of commercializing the new standard
menu,we began test sales of menu using fried chicken,and also sold limited-time menus using conger eel,
pike, etc. to increase the frequency of customer visits to the restaurant.We conducted online
promotions using online gourmet media to cultivate a new customer base.We also implemented initiatives
to improve productivity, including the introduction of an automated ordering system at all stores.
In the ‘‘Nigiri Chojiro’’ restaurants,we conducted campaigns using seasonal ingredients,such as sword
fish,mongo squid,and pike conger.We also opened our first overseas store,CHOJIRO Capital Square in
Singapore.
In the ‘‘Miyamoto Munashi’’ restaurants,we sold limited-time menus using Tongue,Short rib, etc.,and wecontinued efforts to acquire new customers and increase the frequency of current customer visits tothe stores,including the sale of zaru-soba sets and limited menu items for weekday lunches.We haveopened the Attaka JR Tsukaguchi Ekimae store,the new business concept of ‘‘Set meals and box lunch
shops where you can easily stop by to dine in or take out’’.
In the ‘‘Katsuya’’ restaurants, we changed our grand menu and expanded our menu of katsudon menus.
Additionally, we sold a limited-time menu, all-inclusive katsudon and chicken katsudon with ginger
fried chicken sauce as ‘‘SUPER HUNGRY SALE’’.
The segment information is not provided because the SRS Group has only a single segment of foodservice business.

-

2-FOR TRANSLATION PURPOSE ONLY
[Our Group]Number of Stores by Business Category

FY 3/19

2nd quarterof FY 3/20

Restaurants

Newly opened

Closedrestaurants

restaurants

As of
Sep.30,2019

204(-)

2(-)

2(-)

204(-)

3(-)

43(1)

-(-)

-(-)

43(1)

2(-)

Nabeichi

1(-)

-(-)

-(-)

1(-)

1(-)

Meotozenzai

1(-)

-(-)

-(-)

1(-)

-(-)

Nigiri Chojiro ※

60(-)

2(-)

-(-)

62(-)

5(-)

Nigiri Chujiro

7(-)

1(-)

-(-)

8(-)

2(-)

Miyakobito

13(13)-(-)2(2)

11(11)-(-)

Meshiya Miyamoto
Munashi ※

63(5)

1(-)

-(-)

64(5)

2(-)

Katsuya39(16)-(-)-(-)

39(16)

3(2)Karayama

1(-)

1(-)

-(-)

2(-)

2(-)

Domestic total

432(35)

7(-)

4(2)

435(33)20(2)Overseas stores

10(6)

4(2)

1(1)

13(7)

11(6)

Worldwide total

442(41)

11(2)

5(3)

448(40)

31(8)

Name

(As ofMar.31,2019)

Washoku Sato
Tendon Tempura
Honpo Santen

planned to open
during FY 3/20

Note:Numbers in parentheses represent FC restaurants(domestic)and joint venture restaurants(overseas).
※ Nigiri Chojiro includes CHOJIRO restaurants.
※Miyamoto Munashi includes Attaka restaurants.
(2) Qualitative Information on Consolidated Financial Position
Total assets at the end of the second quarter of the fiscal year under review,decreased by 1560
million yen compared to the end of the previous fiscal year to 27,713 million yen.
Current assets decreased by 2,020 million yen compared to the end of the previous fiscal year to
9,706 million yen.This was mainly due to a decrease of 1,678 million yen in cash and deposits,etc.
Non-current assets increased by 466 million yen compared to the end of the previous fiscal year to
17,905 million yen.This was mainly due to an increase of 451 million yen in other net property, plantand equipment.
Current liabilities decreased by 831 million yen compared to the end of the previous fiscal year to6,170 million yen).This was mainly due to a decrease of 314 million yen in other current liabilities,
a decrease of 165 million yen in current portion of long-term debt, a decrease of 155 million yen inaccounts payable-trade etc.
Non-current liabilities decreased by 683 million yen compared to the end of the previous fiscal year
to 7,311 million yen).This was mainly due to a decrease of 390 million yen in long-term loans payable,
and a decrease in bonds of 342 million yen,etc.
Net assets decreased by 45 million yen compared to the end of the previous fiscal year to 14,231
million yen.
(3) Explanation of Cash Flows
Cash and cash equivalents(hereinafter referred to as ‘‘cash’’)at the end of the first half of thecurrent fiscal year decreased by 1,678 million yen compared with the end of the previous fiscal year
to 7,661 million yen.
During the first half of the fiscal year under review Cash flows for each category and factors
affecting cash flows are as follows.
-3-

FOR TRANSLATION PURPOSE ONLY
Cash Flows from Operating Activities
Net cash provided by operating activities was 767 million yen(518 million yen in the same period of
the previous fiscal year).This was mainly attributable to income before income taxes and minority
interests of 494 million yen,depreciation and amortization 783 millions of yen,decrease in accrued
consumption tax,etc. 292 millions of yen,etc.
Cash Flows from investing activities
Net cash used in investing activities,1,301 million yen(previous year:642 million yen).This was
mainly due to the purchase of property,plant and equipment.1250 million yen,etc.
Cash Flows from Financing Activities
Net cash used in financing activities,1,142 million yen(previous year:1,606 million yen).This was
mainly due to repayments of long-term loans payable of 556 million yen and the redemption of bonds
amounting to 342 million yen and 199 million yen in cash dividends paid,etc.
(4) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements
For consolidated financial results forecasts for the fiscal year ending March 31,2020,There are no
revisions to the full-year consolidated earnings forecast that was announced on May 10,2019.in theSummary of.

-4-FOR TRANSLATION PURPOSE ONLY

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Thousands of yen)
FY 3/19(As of Mar.31,2019)
AssetsCurrent assets
Cash and deposits
Accounts receivable-trade
Merchandise
Raw materials and supplies
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets-

5-

Second quarter of FY 3/20
(As of Sep.30,2019)

9,339,721
842,705
37,525669,858
836,339
11,726,151

7,661,138
866,020
34,376
646,088498,437
9,706,062

3,177,471
2,832,185
2,573,877
8,583,534

3,343,939
2,832,185
3,025,480
9,201,605

2,277,467
862,042
3,139,509

2,191,436
899,2643,090,701

609,408
956,4313,189,265
594,539
374,657△9,121
5,715,181
17,438,225
109,686
29,274,063

571,257
958,291
3,140,785
586,745
382,969△27,326
5,612,722
17,905,029
102,126
27,713,218

FOR TRANSLATION PURPOSE ONLY

(Thousands of yen)
FY 3/19(As of Mar.31,2019)
Liabilities
Current liabilities
Accounts payable-trade
Current portion of bonds
Current portion of long-term loans
payableAccounts payable-other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities for land
revaluation
Provision for directors' retirement
benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-forsale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets-

6-

Second quarter of FY 3/20
(As of Sep.30,2019)

1,360,759
685,000

1,205,668
685,000

1,031,224

865,244

2,005,408
285,691
366,631
1,266,708
7,001,422

1,891,202
246,980
323,913952,2116,170,221

3,995,000
1,778,606

3,652,500
1,388,225

82,947

82,94727,75327,753

703,696
1,407,109
7,995,112
14,996,535

731,091
1,428,930
7,311,446
13,481,667

8,532,856
4,981,675
1,363,313△295
14,877,549

8,532,856
4,981,675
1,371,977△295
14,886,212

190,195

164,670

23,928△962,306
12,0103,767△962,306
5,068△736,172△788,799

136,150
14,277,528
29,274,063

134,136
14,231,550
27,713,218

FOR TRANSLATION PURPOSE ONLY
(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 FY 3/19 First six months of FY 3/20
(Apr.1,2018-Sep.30,2018)(Apr.1,2019-Sep.30,2019)
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 non-current assets
Gain on sales of investment securities
Gain on cancellation of leasehold contracts
Compensation income
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Loss on cancellation of leases
Total extraordinary losses
Profit (loss) before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to non-controllinginterests
Loss attributable to non-controlling interests(△)
Profit attributable to owners of parent-

7-

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

22,487,074
7,709,589
14,777,484
14,336,439
441,044

6,614
7,163
36,10431,70825,612
107,203

5,771
128,365
34,712
6,483
31,438
206,770

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

50,74927,722
26,566
105,037
542,777

11,01811,018

3,999
186
153
4,118
8,459

17,22934,6203,780
55,629439,230
237,469△18,079
219,389
219,840

25,033
13,29018,60056,924494,312260,804
27,605
288,410
205,901

3,194△2,013

216,645

207,915

FOR TRANSLATION PURPOSE ONLY
Quarterly Consolidated Statements of Comprehensive Income(For the Six-month Period)(Thousands of yen)First six months of FY 3/19 First six months of FY 3/20
(Apr.1,2018-Sep.30,2018)(Apr.1,2019-Sep.30,2019)
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests-

8-219,840

205,901

10,017△25,524

40,042△6,891
43,168263,009△20,160△6,941△52,627
153,274

259,814155,2883,194△2,013

FOR TRANSLATION PURPOSE ONLY
(3) Quarterly Consolidated Statement of Cash Flows(Thousands of yen)First six months of FY
3/19(Apr.1,2018-Sep.30,2018)

First six months of FY
3/20(Apr.1,2019-Sep.30,2019)

439,230
723,485
86,03034,62030,602494,312783,261
86,03013,290△42,718△490

18,204△13,777
55,733△134,136
50,749-△186

17,22925,033

4,643△23,765574

26,544△144,966△154,369△183,109△292,199

137,481

266,484△132,407△112,464△19,747
1,035,132
7,562△56,708△467,456△22,500
981,570
128,237△50,889△291,313

518,530

767,605

106,240△686,104△16,934△67,630
50,732△1,250,170△12,622
1,889△36,947
31,137△36,500△48,000

47,83747,279△39,869△33,770△642,228△1,301,204△1,058,736△73,808△307,500△166,043△1,606,088△556,588△44,481△342,500△199,252△1,142,822△3,774△2,160△1,733,561
10,732,262
8,998,701△1,678,583
9,339,721
7,661,138

Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Amortization of goodwill
Impairment loss
Increase (decrease) in provision for bonuses
Increase (decrease) in allowance for doubtful
accounts (△ indicates decrease)
Interest and dividend income
Interest expenses
Gain or loss (gain) on sales of investment
securities (△ indicates profit)
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts
receivable-trade (△ indicates increase)
Decrease(increase) in inventories
Increase (decrease) in notes and accounts
payable-trade (△ indicates decrease)
Increase (decrease) in accrued consumption taxes(△ indicates decrease)
Decrease(increase) in consumption taxes refund
receivable (△ indicates increase)
Increase (decrease) in accounts payable-other(△ indicates decrease)
Other,net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sales of investment securities
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Payments of construction assistance fundreceivables
Collection of construction assistance fundreceivables
Other,net
Net cash provided by(used in) investing
activities
Cash flows from financing activities
Repayments of long-term loans payable
Repayment of finance lease obligations
Redemption of bonds
Cash dividends paid
Cash flow from financing activities
Effect of exchange rate change on cash and cash
equivalents
NET(DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period
Period-end balance of cash and cash equivalents-

9-FOR TRANSLATION PURPOSE ONLY
(4) Notes to Quarterly Consolidated Financial Statements(Notes on the Going Concern Assumption)
Not applicable.
(Notes on Significant Changes in Shareholders'Equity)
Not applicable.
(Segment and Other Information)
Disclosure is omitted because the Group has only one segment of the restaurant business.
(Significant Subsequent Events)(Signing of a basic agreement to make KAZOKUTEI CO.,LTD. and Sun Laurie CO.,LTD. wholly owned
subsidiaries through a share exchange)
At the board of directors meeting held on November 8, 2019, SRS HOLDINGS CO.,LTD. will be the wholly
owning parent company and KAZOKUTEI CO.,LTD.(“The Share Exchange 1”),and the Share Exchange with theCompany as the wholly-owning parent company of the Share Exchange and Sun Laurie CO.,LTD. (‘‘The Share
Exchange 2’’).The Share Exchange 1 and Share Exchange 2 are collectively referred to as (‘‘The Share
Exchange’’).Same day with H2O RETAILING CORPORATION.(hereinafter referred to as “H2O”),SRS Holdings,Sun
Laurie and H2O, which is the consolidated parent company of Sun Laurie.A basic agreement was signed.
SRS HOLDINGS CO.,LTD. held a board meeting on November 8, 2019, with SRS Holdings as the whollyowning parent company and KAZOKUTEI CO.,LTD.(hereinafter referred to as “Kazokutei”)as a wholly-owned
subsidiary(hereinafter referred to as “The Share Exchange 1”),and SRS Holdings as the wholly owningparent company and Sun Laurie CO.,LTD.(hereinafter referred to as “Sun Laurie”)as the wholly owned
subsidiary company. The basic policy for the exchange(hereinafter referred to as “the Share Exchange2”.The Share Exchange 1 and the Share Exchange 2 are collectively referred to as “the Share Exchange”)
was resolved,and SRS Holdings,Kazokutei and The company's shareholder, H2O RETAILING CORPORATION.
(hereinafter referred to as “H2O”)and the consolidated parent of Sun Laurie and Sun Laurie.A basic
agreement was signed with H2O,on the same date.
In accordance with the provisions of Article 796,Paragraph 2 of the Companies Act,the Company plans
to conduct the Share Exchange through a simplified share exchange procedure that does not requireapproval by the General Meeting of Shareholders.
1.Purpose of the Share Exchange
We are a food service company group that operates 451 stores October 31, 2019, as of today,mainly in
the Kansai area,Washoku Sato,Tendon Tempura Honpo Santen,Nigiri Chojiro,Meshiya Miyamoto Munashi,etc.
Last year,we announced medium-term management plan ‘‘Project MIRAI’’.Going forward,we will accelerateorganic growth by further improving profitability of existing formats,opening new stores,andconstructing future-oriented store systems.At the same time,we will conduct M&A in the restaurant
business,centered on western Japan,and we are aiming for 1,000 billions of yen net sales in fiscal2022.
On the other hand,in the restaurant industry in which we operate,we expect the operating environment
to remain challenging as a whole.Urban areas,soaring raw material costs,logistics costs,and
promotional costs,as well as intensifying competition from competitors in the market.
Based on the above recognition,we are in May 10th,2019.As announced yesterday,we formed a capitaland business alliance with H2O,which aims to expand its overwhelming market share in the Kansai area,and built up a relationship as a ‘‘strategic business partner’’,and further synergies with each business.
In pursuit of further synergies in the businesses that each has,we have repeatedly discussed tomaximize the corporate value of both companies.
By making Kazokutei and Sun Laurie wholly owned subsidiaries through this share exchange,we willfurther expand our presence in Kansai and other areas where the Group excels,retain customers,and
reduce raw material costs,distribution costs,and promotional costs through volume advantages.At thesame time,we believe it is optimal for us to adjust our portfolio from a suburban business model to an-

10-

FOR TRANSLATION PURPOSE ONLY
urban business,and to acquire know-how to strengthen the opening of stores in shopping centers inexisting formats.We have reached the conclusion of this basic agreement and we have decided to start a
specific consideration.
2.Summary of the Share Exchange(1) Schedule of the Share Exchange
Board of Directors Approving Basic Agreement (H2O)

October 31,2019

Board of Directors to approve the basic agreement(SRS,Kazokutei,Sun Laurie)

November 8,2019

Date of signing of the basic agreement

November 8,2019

Board of Directors to approve the share exchange

November 26,2019 Date (planned)

agreement (SRS,Kazokutei,Sun Laurie)
Share exchange agreement dateNovember 26,2019 Date (planned)(SRS,Kazokutei,Sun Laurie)
Extraordinary General Meeting of Shareholders(Kazokutei,Sun Laurie) Approved Share Exchange Agreement
Scheduled date of share exchange (effective date)-11-

December 11,2019,Date (planned)
January 1,2020 Date (planned)

FOR TRANSLATION PURPOSE ONLY
(2) Share Exchange Method
The Share Exchange 1 is a share exchange in which we are a wholly-owned parent company and the
Kazokutei is a wholly-owned subsidiary.The Share Exchange 2 is a share exchange in which we are awholly-owned parent company and Sun Laurie is a wholly-owned subsidiary.
We are pleased to note that the Companies Act of Japan 796 This share exchange is scheduled to be
executed through the simplified share exchange procedures stipulated in Article 2 without the approvalof our general meeting of shareholders.Kazokutei will take place in the Share Exchange 1 upon approvalat the extraordinary general meeting of shareholders in December 11, 2019 scheduled to be held.Sun
Laurie will take place in the Share Exchange 2 upon approval at the extraordinary general meeting ofshareholders in December 11, 2019 scheduled to be held.
(3)The details of the allotment for the Share Exchange;
The Share Exchange Ratio in this Share Exchange will be determined in the Share Exchange Agreement
upon consultation between the respective companies in this Share Exchange,based on the results of due
diligence and the results of calculation by a third-party calculation institution.
3.Outline of the Parties to the Share Exchangea. Share Exchange 31 Mar,2019 As of the date
Name

KAZOKUTEI CO.,LTD.

Location

8-34 Chayamachi, Kita-ku, Osaka

Job Title/Name of Representative

Takashi Nakamoto President and Representative Director

Business description

Business of Restaurant sales and grocery sales, etc.

Capital stock

10 millions of yen

Date of establishment

April 5,1951

Number of shares outstanding

7,030,845 Shares

Number of Employees

223

Fiscal year end

March 31

Net assets

809 millions of yen

Total assets

4,914 millions of yen

Sale

8,778 millions of yen

Operating profit

100 millions of yen

Ordinary profit

93 millions of yen

Net income

21 millions of yen-

12-FOR TRANSLATION PURPOSE ONLY
b. Share Exchange 2 Heisei31 March31 As of the date
Name

Sun Laurie CO.,LTD.

Location

1-4-4, Hanazono-minami Nishinari-ku, Osaka

Job Title/Name of Representative

Hiroshi Wada President and Representative Director

Business description

Business of Restaurant sales and grocery sales, etc.

Capital stock

10 millions of yen

Date of establishment

December 10,1977

Number of shares outstanding

400,000 Shares

Number of Employees

56

Fiscal year end

March 31

Net assets

569 millions of yen

Total assets

808 millions of yen

Sale

2,535 millions of yen

Operating profit

2 millions of yen

Ordinary profit

2 millions of yen

Net income△5 millions of yen-

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