FOR TRANSLATION PURPOSE ONLY

November 6, 2017

Summary of Consolidated Financial Results for the Second Quarterof the Fiscal Year Ending March 31, 2018
(Six Months Ended September 30, 2017)[Japanese GAAP]
Company name: SRS HOLDINGS CO.,LTD.

Listing: Tokyo Stock Exchange, First Section

Securities code:

8163

URL: http://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, 2017

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, 2018
(April 1, 2017 - September 30, 2017)(1) Consolidated operating results
Net sales
Million yen(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent

Operating profit%

Million yen%

Million yen

Six months ended Sep. 30, 2017
21,695
6.9
260
336.2
Six months ended Sep. 30, 2016
20,2913.0
59(88.2)
Note: Comprehensive income (million yen)Six months ended Sep. 30, 2017:
Six months ended Sep. 30, 2016:

256
(134)
(114) (-%)
(528) (-%)

Net income per share

Diluted net income per share

Yen

Yen

6.48
(15.39)-Six months ended Sep. 30, 2017
Six months ended Sep. 30, 2016%

Million yen

%

-

215
(511)

-

(2) Consolidated financial position
Total assets

Net assets

Million yen

As of Sep. 30, 2017
As of Mar. 31, 2017
Reference: Shareholders’ equity (million yen)

30,692
31,443As of Sep. 30, 2017:

Net assets per share

Equity ratio

Million yen

Yen%

14,38914,284
14,26846.5
45.1
As of Mar. 31, 2017:429.66426.82
14,174

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

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2017
Fiscal year ending Mar. 31, 2018
Fiscal year ending Mar. 31, 2018
(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, 2018 (April 1, 2017 - March 31, 2018)
Net sales
Million yen

Operating profit%

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

Ordinary profit%

Million yen%

Yen

Full year
44,000
1.5
750
84.8
700
67.9
Note: Revisions to the most recently announced consolidated earnings forecasts: Yes%

Million yen

270

-

8.13

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: None
Excluded companies: None
(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, 2017:33,209,080 shares
As of Mar. 31, 2017:33,209,080 shares
2) Number of treasury shares at the end of period
As of Sep. 30, 2017:262 shares
As of Mar. 31, 2017:262 shares
3) Average number of shares outstanding during the period
Six months ended Sep. 30, 2017:33,208,818 shares
Six months ended Sep. 30, 2016:33,208,861 shares* This report is not subject to quarterly review procedures.
* 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 SRS HOLDINGS. Actual performance may differ significantly from these
forecasts for a number of factors

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

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) Cash Flows

4(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

11(Going Concern Assumption)

11(Significant Changes in Shareholders’ Equity)

11(Segment and Other Information)

11

1

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

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

Net salesFirst six months of FY3/17(Apr. 1, 2016 – Sep. 30, 2016)
YoY change YoY change
Results(Amount)(%)
20,291586
3.0(Millions of yen)First six months of FY3/18(Apr. 1, 2017 – Sep. 30, 2017)
YoY change YoY change
Results(Amount)(%)
21,695
1,403
6.9

Operating profit

59

(444)

(88.2)

260

200

336.2

Ordinary profit

(134)

(562)

-

256

391

-

Profit attributable to owners of parent

(511)

(693)

-

215

726

-

In the first half of the fiscal year ending March 31, 2018, sales were 6.9% higher than one year earlier. The sale of theSushi-han business reduced sales, but this was offset by the opening of new restaurants and the inclusion of the sales ofMiyamoto Munashi, which became a wholly owned subsidiary in September 2016.
Earnings benefited from the growth in sales and a decline in expenses because of the advisory fee one year earlier
involving the acquisition of Miyamoto Munashi. Operating profit increased 200 million yen year on year to 260 million
yen. Ordinary profit, which also benefited from the reversal from the previous fiscal year’s foreign exchange loss to aforeign exchange gain because of exchange rate movements, increased 391 million yen year on year to 256 million yen.
A gain of 284 million yen on the sale of the shares of a subsidiary was recorded following the sale of the Sushi-han
business. As a result, profit attributable to owners of parent increased 726 million yen year on year to 215 million yen.
2) Other measures
At Washoku Sato restaurants, progress is continuing with the addition of a Sato Bar & Sato Café, which has self-serve
facilities for alcoholic and other beverages. At the end of September 2017, 176 restaurants had a Sato Bar & Sato Café.
Santen restaurants continued to revise menus, such as by increasing the number of items for children and adding morecurry dishes, in order to provide more selections for families.
Nigiri Chojiro restaurants offer seasonal menu items featuring different ingredients for each season of the year. In orderto provide even more enjoyment to customers, these restaurants offered limited quantities of fresh bluefin tuna, redspotted grouper and other seafood shipped to restaurants directly from where fish are caught.
To reinvigorate existing locations, Meshiya Miyamoto Munashi restaurants are shortening the cycle of new productintroductions and performing renovations. During the first half, three unprofitable restaurants were closed.
During the first half, one Washoku Sato restaurant and one Nigiri Chojiro restaurant were opened and five restaurants
were closed. As a result, there were 429 restaurants in Japan and other countries at the end of September 2017.
We made the transition to a holding company structure on October 1, 2017. The objective is to speed up decisionmaking by separating the functions of determining management strategies and conducting business operations. The
company name was changed from SATO RESTAURANT SYSTEMS CO., LTD. to SRS HOLDINGS CO.,LTD. In
addition, 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FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3//18

SRS Group Restaurants(Number of restaurants)
Restaurants plannedto open during
FY3/182 (-)
13 (5)

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

Newly opened
restaurants

Washoku Sato
Tendon Tempura
Honpo Santen
Meotozenzai

202 (-)

1 (-)

1 (-)

Second quarter of
FY3/18(As of Sep. 30, 2017)202 (-)

40 (1)

- (-)

- (-)

40 (1)

1 (-)

- (-)

- (-)

1 (-)

- (-)

Nigiri Chojiro*1

57 (-)

1 (-)

- (-)

58 (-)

3 (-)

Nigiri Chujiro

6 (-)

- (-)

- (-)

6 (-)

- (-)

Miyakobito
Meshiya Miyamoto
Munashi
Katsuya15 (14)

- (-)

- (-)

15 (14)- (-)

69 (7)

- (-)

3 (1)

66 (6)1 (-)

36 (19)

2 (-)

3 (3)

35 (16)5 (3)Sushi-han*2

13 (-)- (-)

13 (-)

- (-)

- (-)

Domestic total

439 (41)

4 (-)

20 (4)

423 (37)

24 (8)

Overseas stores

6 (4)

- (-)

- (-)

6 (4)

1 (-)

Worldwide total

445 (45)4 (-)

20 (4)

429 (41)

25 (8)

Name

Closedrestaurants

Note: Numbers in parentheses represent FC restaurants (domestic) and joint venture restaurants (overseas).
*1. Nigiri Chojiro includes CHOJIRO restaurants.
*2. Thirteen Sushi-han restaurants decreased because the Sushi-han business was sold to Umenohana Co., Ltd. on April 1, 2017.

(2) Explanation of Financial Position(Assets, liabilities and net assets)
Total assets at the end of the second quarter decreased 750 million yen from the end of the previous fiscal year to 30,692
million yen.
(Assets)
Current assets increased 1,325 million yen from the end of the previous fiscal year to 12,232 million yen. This was
mainly due to an increase of 1,457 million yen in cash and deposits.
Non-current assets decreased 2,086 million yen to 18,362 million yen. This was primarily due to a decrease of 1,910
million yen in land.
(Liabilities)
Current liabilities decreased 307 million yen from the end of the previous fiscal year to 7,285 million yen due mainly toa decrease of 233 million yen in accounts payable.
Non-current liabilities decreased 547 million yen to 9,017 million yen due mainly to a decrease of 708 million yen in
long-term loans payable.
(Net assets)
Net assets were 14,389 million yen, an increase of 104 million yen from the end of the previous fiscal year.

3FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3//18(3) Cash Flows
Cash and cash equivalents (hereinafter, “net cash”) increased 1,085 million yen from the end of the previous fiscal year
to 9,617 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 495 million yen, compared with 47 million yen provided in the same
period of the previous fiscal year. This was mainly due to profit before income taxes of 516 million yen, depreciation of
719 million yen and gain on sales of shares of subsidiaries of 284 million yen.
(Cash flows from investing activities)
Net cash provided by investing activities was 1,103 million yen, compared with 3,351 million yen used in the same
period of the previous fiscal year. This was mainly due to proceeds of 2,520 million yen from sales of shares ofsubsidiaries and 968 million yen for the purchase of property, plant and equipment.
(Cash flows from financing activities)
Net cash used in financing activities was 525 million yen, compared with 1,823 million yen provided in the same periodof the previous fiscal year. This was mainly due to net decrease of 723 million yen in long-term loans payable, net
increase of 446 million yen in bonds payable and cash dividends paid of 166 million yen.

(4) Explanation of Consolidated Earnings Forecasts and Other Forward-looking Statements
We have revised the consolidated earnings forecasts which were announced on May 12, 2017 in the Summary of
Financial Results for the Fiscal Year Ended March 31, 2017.
For more details, please refer to the news release “Notice on Difference between the Forecast and Results for the First
Half and Revisions to the Full Year Earnings Forecasts” announced on November 6, 2017 (Japanese version only).

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

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

Second quarter of FY3/18(As of Sep. 30, 2017)

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

8,532,038

9,989,808

701,877

643,768

Merchandise

38,432

39,231

Raw materials and supplies

824,721776,304

Deferred tax assets

216,754

204,869

Other

593,173578,698

10,906,999

12,232,679

Buildings, net

2,804,695

2,869,713

Land

4,742,506

2,832,185

Other, net

2,494,749

2,620,661

Total property, plant and equipment

10,041,952

8,322,560

Goodwill

2,621,590

2,535,559

Other

1,353,616

1,335,799

Total intangible assets

3,975,206

3,871,359

Investment securities

1,036,523

1,100,060

Long-term loans receivable

1,028,180

999,455

Guarantee deposits

3,309,339

3,212,362

Deferred tax assets

561,214382,332

Other

508,972

485,658

Allowance for doubtful accounts(11,947)(11,176)

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

Intangible assets

Investments and other assets

Total investments and other assets
Total non-current assets
Deferred assets
Total assets

56,432,284

6,168,693

20,449,443

18,362,612

86,814

97,646

31,443,256

30,692,938

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3//18(Thousands of yen)
FY3/17(As of Mar. 31, 2017)

Second quarter of FY3/18(As of Sep. 30, 2017)

Liabilities
Current liabilities
Accounts payable - trade

1,374,812

Current portion of bonds

1,140,871

475,000

555,000

Current portion of long-term loans payable

2,086,780

2,071,960

Accounts payable - other

2,031,837

1,850,269

Income taxes payable

411,451

392,795

Provision for bonuses

281,843

305,666

Other

931,062

968,960

7,592,787

7,285,522

Bonds payable

3,335,000

3,717,500

Long-term loans payable

Total current liabilities
Non-current liabilities

3,528,177

2,820,138

Deferred tax liabilities for land revaluation

252,387

82,947

Deferred tax liabilities

262,188

256,544

Provision for directors’ retirement benefits

29,57827,753

Asset retirement obligations

649,700

660,726

Other

1,508,543

1,452,163

Total non-current liabilities

9,565,576

9,017,773

17,158,364

16,303,295

Capital stock

8,532,856

8,532,856

Capital surplus

4,981,675

4,981,675

Retained earnings

1,000,894

1,435,129

(214)

(214)

14,515,211

14,949,446

Valuation difference on available-for-sale securities

236,621281,410

Revaluation reserve for land

(577,541)(962,306)

Total accumulated other comprehensive income(340,919)(680,895)

110,600

121,092

14,284,892

14,389,642

31,443,256

30,692,938

Total liabilities
Net assets
Shareholders’ equity

Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets

6FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3//18(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 FY3/17(Apr. 1, 2016 – Sep. 30, 2016)

First six months of FY3/18(Apr. 1, 2017 – Sep. 30, 2017)

Net sales

20,291,683

21,695,502

Cost of sales

6,908,343

7,496,089

Gross profit

13,383,340

14,199,412

Selling, general and administrative expenses

13,323,697

13,939,226

59,642

260,185

7,070

8,604

Operating profit
Non-operating income
Interest income
Dividend income

8,824

8,978

House rent income

35,03237,026

Foreign exchange gains-

25,437

Miscellaneous income

24,14335,985

Total non-operating income

75,070116,032

63,27964,709Rent expenses on real estates

28,39830,138Foreign exchange losses

160,114-

Miscellaneous loss

17,397

24,631Non-operating expenses
Interest expenses

Total non-operating expenses

269,190

119,479(134,477)

256,738

Gain on sales of shares of subsidiaries-

284,325

Total extraordinary income-

284,325

Loss on retirement of non-current assets

10,056

17,180Loss on valuation of investment securities

59,315-

Impairment loss

12,251

7,567

888

-

Ordinary profit (loss)
Extraordinary income

Extraordinary losses

Loss on closing of stores
Total extraordinary losses

82,512

24,748

Profit (loss) before income taxes(216,990)

516,314

Income taxes - current

178,531294,613

Income taxes - deferred

132,195(4,065)

Total income taxes

310,727

290,547

Profit (loss)(527,717)

225,766

Profit (loss) attributable to non-controlling interests(16,566)

10,491

Profit (loss) attributable to owners of parent(511,150)

215,275

7

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3//18(Quarterly Consolidated Statement of Comprehensive Income)(For the Six-month Period)(Thousands of yen)

Profit (loss)

First six months of FY3/17(Apr. 1, 2016 – Sep. 30, 2016)

First six months of FY3/18(Apr. 1, 2017 – Sep. 30, 2017)(527,717)

225,766

Other comprehensive income
Valuation difference on available-for-sale securities(690)

44,788-(384,764)(690)(339,976)(528,407)(114,209)

Comprehensive income attributable to owners of parent(511,840)(124,700)

Comprehensive income attributable to non-controlling interests(16,566)

10,491

Revaluation reserve for land
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to8

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3//18(3) Quarterly Consolidated Statement of Cash Flows(Thousands of yen)First six months of FY3/17(Apr. 1, 2016 – Sep. 30, 2016)

First six months of FY3/18(Apr. 1, 2017 – Sep. 30, 2017)

Profit (loss) before income taxes(216,990)

516,314

Depreciation

665,123

719,997

Amortization of goodwill

44,95486,030-(284,325)

12,251

7,567

888

-

Increase (decrease) in provision for bonuses

46,76823,822

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for directors’ retirement
benefits
Increase (decrease) in provision for loss on store closing

(780)

(770)

-

(1,825)(8,599)-Interest and dividend income(15,894)(17,583)

Interest expenses

63,27964,709Loss on valuation of investment securities

59,315-

Loss on retirement of non-current assets

10,056

17,180Decrease (increase) in notes and accounts receivable - trade(6,141)

58,109Decrease (increase) in inventories

22,35847,619

Increase (decrease) in notes and accounts payable - trade(62,985)(233,941)

Increase (decrease) in accrued consumption taxes(75,267)(1,963)

Increase (decrease) in accounts payable - other(454,742)(181,736)

Other, net

150,489(20,024)

Subtotal

234,084

799,182

Cash flows from operating activities

Loss (gain) on sales of shares of subsidiaries
Impairment loss
Loss on store closings

Interest and dividend income received
Interest expenses paid

8,727

10,613(64,184)(64,699)

Income taxes refund

40,865

20,770

Income taxes paid

(172,367)(270,164)

47,125495,703-(728,244)

Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits-

374,649

Purchase of property, plant and equipment(581,940)(968,564)

Proceeds from sales of property, plant and equipment
Purchase of investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Proceeds from sales of shares of subsidiaries

825-(125,072)-(2,381,665)--

2,520,000

Purchase of intangible assets(173,273)(62,944)

Payments for guarantee deposits(55,408)(40,045)

Proceeds from collection of guarantee deposits

42,39975,146

Payments of construction assistance fund receivables(89,943)(45,766)

Collection of construction assistance fund receivables

45,26744,089Other, net(32,829)(64,583)(3,351,639)

1,103,736

Net cash provided by (used in) investing activities

9FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3//18(Thousands of yen)First six months of FY3/17(Apr. 1, 2016 – Sep. 30, 2016)

First six months of FY3/18(Apr. 1, 2017 – Sep. 30, 2017)

1,500,000

350,000

Cash flows from financing activities
Proceeds from long-term loans payable
Proceeds from issuance of bonds

1,958,347

683,793

Repayments of long-term loans payable(1,310,476)(1,073,116)

Repayments of finance lease obligations(108,453)(82,759)

Redemption of bonds(50,000)(237,500)

Purchase of treasury shares

(41)

-

Cash dividends paid

(166,044)(166,044)

Net cash provided by (used in) financing activities

1,823,330(525,626)

Effect of exchange rate change on cash and cash equivalents(54,636)

11,947

Net increase (decrease) in cash and cash equivalents(1,535,819)

1,085,760

Cash and cash equivalents at beginning of period

8,616,381

8,532,038

Cash and cash equivalents at end of period

7,080,561

9,617,799

10

FOR TRANSLATION PURPOSE ONLYSRS HOLDINGS CO.,LTD. (8163)
Summary of Financial Results for the Second Quarter of FY3//18(4) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Segment and Other Information
SRS does not provide segment information because it has only a single business segment of food service 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 convenience of readers who
prefer an English translation.

11