サーラコーポレーション（2734） – ［Delayed］Consolidated Financial Results for the Three Months Ended February 28, 2022 (Under Japanese GAAP)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. April 6, 2022 Consolidated Financial Results for the Three Months Ended February 28, 2022 (Under Japanese GAAP) SALA Corporation Tokyo Stock Exchange / Nagoya Stock Exchange 2734 https://www.sala.jp/ Goro Kamino, President and Representative Director, Group Representative and CEO Shinichi Ichikawa, Manager of General Affairs Group, General Affairs Department +81-532-51-1182 Company name: Listing: Securities code: URL: Representative: Inquiries: Telephone: Scheduled date to file quarterly securities report: Scheduled date to commence dividend payments: Preparation of supplementary material on quarterly financial results: None Holding of quarterly financial results briefing: None April, 8, 2022 – (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated financial results for the three months ended February 28, 2022 (from December 1, 2021 to February 28, 2022) (1) Consolidated operating results (cumulative) (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Three months ended February 28, 2022 February 28, 2021 Millions of yen % Millions of yen % Millions of yen % Millions of yen 58,455 52,493 11.4 (1.5) 3,021 2,876 5.1 21.9 3,220 2,784 15.7 (5.0) 2,243 1,976 % 13.5 (2.7) Note: Comprehensive income For the three months ended February 28, 2022:¥2,394 million [17.8%] For the three months ended February 28, 2021:¥2,033 million [24.7%] Three months ended February 28, 2022 February 28, 2021 Basic earnings per share Diluted earnings per share Yen 35.23 31.38 Yen – – Note: The Company has applied the “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020) and relevant ASBJ regulations from the beginning of the first quarter of the current fiscal year, and each figure for the three months ended February 28, 2022, is the figure after applying the accounting standard and relevant ASBJ regulations. (2) Consolidated financial position As of February 28, 2022 November 30, 2021 Reference: Equity Total assets Net assets Equity-to-asset ratio Millions of yen Millions of yen 186,016 187,481 68,849 66,699 % 36.3 34.9 As of February 28, 2022: As of November 30, 2021: ¥67,536 million ¥65,425 million 2. Cash dividends Fiscal year ended November 30, 2021 Fiscal year ending November 30, 2022 Note: The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations from the beginning of the first quarter of the current fiscal year, and each figure as of February 28, 2022, is the figure after applying the accounting standard and relevant ASBJ regulations. First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Annual dividends per share Yen – – Yen 10.00 Yen – Yen 13.00 Yen 23.00 Fiscal year ending November 30, 2022 (Forecast) Note: Revisions to the forecast of cash dividends most recently announced: None 11.00 – 12.00 23.00 3. Consolidated earnings forecasts for the fiscal year ending November 30, 2022 (from December 1, 2021 to November 30, 2022) Net sales Operating profit Ordinary profit (Percentages indicate year-on-year changes.) Profit attributable to owners of parent Basic earnings per share Six months ending May 31, 2022 Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen 118,000 3.7 5,600 (11.2) 5,700 (17.9) 3,700 (22.4) 58.13 (8.6) 4,900 (6.9) 76.99 224,000 Fiscal year ending November 30, 2022 Note: Revisions to the earnings forecasts most recently announced: None 6,800 (1.7) 3.2 7,600 * Notes (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None (2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None (3) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None Note: For details, please refer to “(3) Notes to quarterly consolidated financial statements (Changes in accounting policies)” of “2. Quarterly consolidated financial statements and significant notes thereto” on page 9 of the attachment. (4) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) (ii) Number of treasury shares at the end of the period As of February 28, 2022 As of November 30, 2021 As of February 28, 2022 As of November 30, 2021 fiscal year) Three months ended February 28, 2022 Three months ended February 28, 2021 66,041,147 shares 66,041,147 shares 2,361,573 shares 2,396,033 shares 63,674,616 shares 62,992,562 shares (iii) Average number of shares outstanding during the period (cumulative from the beginning of the * Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation. * Proper use of earnings forecasts, and other special matters (Caution concerning forward-looking statements) The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable by the Company. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual business and other results may differ significantly due to various unforeseen factors. SALA Corporation (2734) ○Attachment Index Index 1. Qualitative information on quarterly consolidated financial results ………………………………………………… 2 (1) Explanation of operating results …………………………………………………………………………………………… 2 (2) Explanation of financial position………………………………………………………………………………………….. 3 (3) Explanation of consolidated earnings forecasts and other forward-looking statements ………………… 4 2. Quarterly consolidated financial statements and significant notes thereto ……………………………………….. 5 (1) Quarterly consolidated balance sheet ……………………………………………………………………………………. 5 (2) Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income ……………………………………………………………………………………………………………………………… 7 Quarterly consolidated statement of income (cumulative) ……………………………………………………….. 7 Quarterly consolidated statement of comprehensive income (cumulative) …………………………………. 8 (3) Notes to quarterly consolidated financial statements ………………………………………………………………. 9 Uncertainties of entity’s ability to continue as going concern ………………………………………………….. 9 Notes on significant changes in the amount of shareholders’ equity ………………………………………….. 9 Changes in accounting policies ……………………………………………………………………………………………. 9 Additional information ……………………………………………………………………………………………………… 10 Segment information ………………………………………………………………………………………………………… 12 Significant events after reporting period ……………………………………………………………………………… 15 – 1 – SALA Corporation (2734) 1. Qualitative information on quarterly consolidated financial results (1) Explanation of operating results During the first three months of the fiscal year ending November 30, 2022, the future of the Japanese economy remained uncertain largely due to reductions in economic activity in Japan resulting from the resurgence of the novel coronavirus disease (COVID-19), as well as the prolonged semiconductors supply shortage and a surge in energy prices fueled by global unrest. Under these conditions, the Group (hereinafter referred to as the “SALA Group”) focused on initiatives for “new developments by SALA in life,” “SALA’s penetration” and “transformation and challenge,” which are its priority issues in the fourth medium-term management plan with the fiscal year ended November 30, 2020 as the first fiscal year. The SALA Group is unified in pressing ahead with each measure in the fiscal year ending November 30, 2022, as it is the final year to complete the fourth medium-term management plan. During the first three months of the current fiscal year, SALA ENERGY CO., LTD., which operates the Energy & Solutions business, worked to prepare to rebuild a core system in order to transform existing customers service using digital technologies. In addition, the company launched initiatives aimed at achieving carbon neutrality in regions, including promoting the development of service menus related to green home remodeling (power generation, power storage, power-saving.) ASCO Co., Ltd., which operates the Animal Health Care business, integrated its subsidiary, Hokuyaku Co., Ltd., with the company in December 2021 and strengthened the sales system to improve profitability and expand the market share in the Hokkaido area. Further, at “emCAMPUS EAST,” newly opened in Toyohashi Ekimae-odori 2-chome, emCAMPUS, Co., Ltd., which plans and manages learning programs for regional working people and programs to support entrepreneurs, etc., was established in December 2021. With the aim of vitalizing the regional communities, emCAMPUS, Co., Ltd. will work to raise the regional attraction and value by working together with corporations, municipalities, and educational institutions. As for operating results for the first three months of the current fiscal year, net sales increased by 11.4% year on year to ¥58,455 million due to increases in revenue in the Energy & Solutions business, the Engineering & Maintenance business, the Housing business, and the Car Life Support business. As for profit, operating profit rose by 5.1% year on year to ¥3,021 million due to increases in profit in the Energy & Solutions business, the Housing business, and the Animal Health Care business. As loss on valuation of derivatives on forward exchange contracts declined, ordinary profit increased by 15.7% year on year to ¥3,220 million. As a result, profit attributable to owners of parent increased by 13.5% year on year to ¥2,243 million. Operating results of each segment are as follows. Energy & Solutions business Net sales ¥30,824 million (up 15.8% year on year) Operating profit ¥2,627 million (up 1.3% year on year) While the selling price of city gas was upwardly adjusted based on a system to adjust raw material costs, the selling price of LP gas was revised in response to higher raw material prices. In addition, net sales increased due to an increase in sales volume of city gas mainly for home and industrial use. As for profit, although cost of sales for city gas and LP gas increased, an effort to curb selling, general and administrative expenses contributed to an increase in operating profit. Engineering & Maintenance business Net sales ¥7,234 million (up 16.2% year on year) Operating profit ¥412 million (down 8.3% year on year) – 2 – Net sales went up due to an increase in completed construction in the civil engineering department, the construction department, and the maintenance department. As for profit, despite each department’s efforts to reduce cost of sales by carrying out thorough process management, operating profit decreased due in part to the declined profit margin of completed construction in the equipment work department. SALA Corporation (2734) Housing business Net sales ¥8,843 million (up 22.1% year on year) Operating profit ¥39 million (operating loss of ¥173 million for the same period of the previous fiscal year) In the housing sales department, the number of custom-built houses and lot houses sold increased. In the housing components and materials processing and sales department, orders received increased as a result of its efforts to expand transactions mainly in the existing business partners. Consequently, net sales and operating profit both increased. Car Life Support business Net sales ¥3,718 million (up 12.0% year on year) Operating profit ¥9 million (down 55.7% year on year) Net sales increased due to an increase in the number of new and used Volkswagen cars sold. As for profit, despite an effort to secure profit through strengthening sales for the body coating service and for accessories, operating profit decreased due to an increase in selling, general and administrative expenses, such as promotion expenses. Animal Health Care business Net sales ¥6,351 million (down 12.6% year on year) Operating profit ¥199 million (up 12.0% year on year) Although sales of veterinary medical products were brisk in the pet related department, net sales decreased due to the inclusion of a revenue decreasing factor of ¥1,089 million from the effect of having applied the Accounting Standard for Revenue Recognition and relevant ASBJ regulations. As for profit, an effort to curb selling, general and administrative expenses contributed to an increase in operating profit. Properties business Net sales ¥891 million (down 2.3% year on year) Operating loss ¥136 million (operating loss of ¥152 million for the same period of the previous fiscal year) Although the asset management department managing real estate properties, etc., trended briskly, the hospitality department continued to operate with a low number of customers of restaurants, bridal services, hotel stays, etc., stemming from the impact of COVID-19 that continued from the previous period. As a result, net sales decreased, and operating loss was recorded. (2) Explanation of financial position Assets Assets amounted to ¥186,016 million, down ¥1,464 million from November 30, 2021. This was mainly due to decreases in “cash and deposits” by ¥3,951 million, “work in process” by ¥2,639 million, – 3 – SALA Corporation (2734) “deferred tax assets” by ¥1,018 million and “property, plant and equipment” by ¥935 million, despite an increase in “notes and accounts receivable – trade, and contract assets” by ¥6,884 million. Liabilities were ¥117,167 million, down ¥3,614 million from November 30, 2021. This was mainly due to decreases in “other” under current liabilities by ¥2,828 million, “long-term borrowings (including current portion)” by ¥2,265 million and “provision for bonuses” by ¥1,114 million, despite an increase in “short-term borrowings” by ¥2,597 million. Net assets were ¥68,849 million, up ¥2,150 million from November 30, 2021. This was mainly due to an increase in “retained earnings” of ¥1,986 million (increased by ¥2,243 million due to recording of profit attributable to owners of parent, decreased by ¥858 million due to payment of dividends, and increased by ¥601 million due to application of accounting standard for revenue recognition). (3) Explanation of consolidated earnings forecasts and other forward-looking statements There is no change to the consolidated earnings forecasts for the first six months of the fiscal year ending November 30, 2022, nor to the full-year earnings forecasts, both of which were announced on January 12, 2022. Liabilities Net assets – 4 – 2. Quarterly consolidated financial statements and significant notes thereto (1) Quarterly consolidated balance sheet As of November 30, 2021 As of February 28, 2022 (Millions of yen)SALA Corporation (2734) Assets Current assets Cash and deposits Notes and accounts receivable – trade, and contract assets Electronically recorded monetary claims – operating Merchandise and finished goods Work in process Raw materials and supplies Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings and structures, net Machinery, equipment and vehicles, net Gas pipe, net Land Construction in progress Other, net Total property, plant and equipment Intangible assets Goodwill Other Total intangible assets Investments and other assets Investment securities Long-term loans receivable Deferred tax assets Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets 24,754 26,528 1,458 12,618 11,135 405 4,781 (196) 81,487 20,768 8,821 17,158 33,858 841 1,475 82,923 338 1,149 1,488 7,552 3,939 4,920 5,599 (428) 21,583 105,994 187,481 20,802 33,413 1,600 12,499 8,496 364 5,238 (217) 82,197 20,461 8,543 16,780 33,830 948 1,423 81,987 300 1,139 1,440 7,942 3,760 3,901 5,209 (422) 20,392 103,819 186,016 – 5 – Liabilities Current liabilities Notes and accounts payable – trade Electronically recorded obligations – operating Short-term borrowings Current portion of long-term borrowings Income taxes payable Provision for bonuses Provision for bonuses for directors (and other officers) Provision for warranties for completed construction Provision for loss on construction contracts Provision for point card certificates Provision for loss on guarantees Other Total current liabilities Non-current liabilities Long-term borrowings Deferred tax liabilities Provision for retirement benefits for directors (and other officers) Provision for share-based compensation Provision for repairs Retirement benefit liability Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Remeasurements of defined benefit plans Total accumulated other comprehensive income Non-controlling interests Total net assets Total liabilities and net assets SALA Corporation (2734) (Millions of yen)As of November 30, 2021 As of February 28, 2022 24,656 4,289 6,791 9,845 1,301 2,639 7 64 175 280 193 14,163 64,407 40,369 198 195 417 83 11,782 3,327 56,374 120,782 8,025 25,269 33,365 (1,585) 65,074 441 356 (446) 351 1,273 66,699 187,481 25,348 4,970 9,388 8,951 385 1,524 3 67 157 230 – 11,335 62,363 38,998 194 177 453 88 11,581 3,309 54,804 117,167 8,025 25,280 35,351 (1,560) 67,096 553 339 (452) 440 1,313 68,849 186,016 – 6 – SALA Corporation (2734) (2) Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income Quarterly consolidated statement of income (cumulative) (Millions of yen)Three months ended February 28, 2021 Three months ended February 28, 2022 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Share of profit of entities accounted for using equity method Subsidy income Other Total non-operating income Non-operating expenses Interest expenses Loss on valuation of derivatives Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of non-current assets Gain on sale of investment securities Reversal of provision for loss on guarantees Total extraordinary income Extraordinary losses Loss on sale and retirement of non-current assets Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent 52,493 36,787 15,706 12,830 2,876 22 28 60 17 175 305 39 333 24 397 2,784 9 – – 9 23 23 2,769 99 650 749 2,019 42 1,976 58,455 43,081 15,374 12,352 3,021 17 29 97 105 171 420 35 162 24 221 3,220 15 8 22 45 4 4 3,261 241 715 956 2,305 62 2,243 – 7 – Quarterly consolidated statement of comprehensive income (cumulative) SALA Corporation (2734) (Millions of yen)Three months ended February 28, 2021 Three months ended February 28, 2022 2,019 96 46 (129) 13 2,033 1,990 43 2,305 111 (16) (6) 88 2,394 2,332 62 Profit Other comprehensive income Valuation difference on available-for-sale securities Deferred gains or losses on hedges Remeasurements of defined benefit plans, net of tax Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests – 8 – SALA Corporation (2734) (3) Notes to quarterly consolidated financial statements Uncertainties of entity’s ability to continue as going concern Notes on significant changes in the amount of shareholders’ equity Not applicable. Not applicable. Changes in accounting policies Application of accounting standard for revenue recognition, etc. The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations from the beginning of the first quarter of the current fiscal year, and it has recognized revenue at the time the control of promised goods or services is transferred to the customer at the amount expected to be received upon exchange of said goods or services. Major changes due to the application of the Accounting Standard for Revenue Recognition and relevant ASBJ regulations are as follows. (i) Revenue recognition related to sales of LP gas and electricity In relation to sales of LP gas and electricity, the Company changed the method of revenue recognition whereby, of revenues previously recognized on the basis of the date of reading the electricity meter, revenue arising between the date of reading the meter in the settlement month and the settlement date is recognized based on the reasonable estimates. (ii) Revenue recognition related to agent transactions In relation to revenue for some direct transactions of principally sales of LP gas and veterinary medical products, the Company previously had recognized the entire amount of consideration received from customers as revenue, and that has been changed to a method that recognizes revenue at the net amount after deducting the amount paid to suppliers from the amount received from customers for transactions in which the SALA Group acts as an agent for the provision of goods or services to customers. (iii) Revenue recognition related to construction contracts With respect to construction contracts, the Company previously had applied the percentage-of-completion method to construction work whose outcome from the completed portion was deemed definite, and had applied the completed-contract method to other construction work. As a result of this application, however, the Company has changed the method to recognize revenue over a certain period of time in alignment with its satisfaction of performance obligations to transfer goods or services to customers when control over a good or service is to be transferred to the customer over a certain period of time. In measuring progress made in satisfying a performance obligation, construction costs incurred as of the last day of each reporting period are to be calculated based on the ratio of the total estimated construction costs. Furthermore, revenue is recognized on a cost recovery basis when it is not possible to reasonably estimate progress towards satisfaction of performance obligations, but it is probable that the costs incurred will be recovered. The application of the Accounting Standard for Revenue Recognition and relevant ASBJ regulations is subject to the transitional treatment provided for in the proviso to paragraph 84 of the Accounting Standard for Revenue Recognition. The cumulative effect of the retrospective application, assuming the new accounting policy had been applied to periods prior to the beginning of the first quarter of the – 9 – SALA Corporation (2734) current fiscal year was added to or deducted from the opening balance of retained earnings of the first quarter of the current fiscal year, and thus the new accounting policy was applied from such opening balance; provided, however, that the new accounting policy was not retrospectively applied to contracts for which nearly all the revenue amounts had been recognized according to the previous treatment in periods prior to the beginning of the first quarter of the current fiscal year, by applying the method provided for in paragraph 86 of the Accounting Standard for Revenue Recognition. Furthermore, by applying the method set forth in item (1) of the supplementary provisions of paragraph 86 of the Accounting Standard for Revenue Recognition, modifications to contracts carried out prior to the beginning of the first quarter of the current fiscal year were accounted for based on the contractual terms after all contract modifications were reflected. Consequently, this cumulative effect was added to or deducted from the opening balance of retained earnings of the first quarter of the current fiscal year. As a result of this change, for the first three months of the current fiscal year, net sales decreased by ¥1,568 million, cost of sales decreased by ¥2,022 million, selling, general and administrative expenses decreased by ¥97 million, while operating profit, ordinary profit and profit before income taxes each increased by ¥551 million. In addition, the opening balance of retained earnings increased by ¥601 million. Due to the application of the Accounting Standard for Revenue Recognition and relevant ASBJ regulations, “notes and accounts receivable – trade” under current assets of the consolidated balance sheet as of the end of the previous fiscal year has been included in “notes and accounts receivable – trade, and contract assets” under current assets from the quarterly consolidated balance sheet as of the end of the first quarter of the current fiscal year. In accordance with the transitional treatment provided for in paragraph 89-2 of the Accounting Standard for Revenue Recognition, figures for the previous fiscal year have not been restated in accordance with the new approach to presentation. Furthermore, the information on disaggregation of revenue from contracts with customers during the first three months of the previous fiscal year has not been disclosed as allowed by the transitional treatment provided for in paragraph 28-15 of the Accounting Standard for Quarterly Financial Reporting (ASBJ Statement No. 12, March 31, 2020). Application of accounting standard for fair value measurement, etc. The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019) and relevant ASBJ regulations from the beginning of the first quarter of the current fiscal year, and it has applied the new accounting policy provided for by the Accounting Standard for Fair Value Measurement, etc. prospectively in accordance with the transitional measures provided for in paragraph 19 of the Accounting Standard For Fair Value Measurement, and paragraph 44-2 of the “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019). There is no impact on the quarterly consolidated financial statements. Additional information Impact of the spread of COVID-19 There has been no material change in the assumptions regarding the impact of the spread COVID-19 described in Impairment loss on non-current assets in Significant accounting estimates in the annual securities report for the previous fiscal year. Application of tax effect accounting for transition from consolidated taxation system to group tax sharing system As for items regarding the transition to the group tax sharing system introduced in the “Act Partially Amending the Income Tax Act” (Act No. 8 of 2020) and items revised on non-consolidated taxation system in connection with the transition to the group tax sharing system, the Company and some consolidated subsidiaries have not applied the provisions of paragraph 44 of the “Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No. 28, February 16, 2018) as allowed by the provisions of paragraph 3 of the “Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (ASBJ PITF No. 39, March 31, – 10 – 2020). Accordingly, amounts of deferred tax assets and deferred tax liabilities are determined in accordance with the provisions of the tax law before revision. SALA Corporation (2734) – 11 – SALA Corporation (2734) Segment information I For the three months ended February 28, 2021 1. Disclosure of sales and profit (loss) for each reportable segment Reportable segments (Millions of yen) Energy & Solutions business Engineering & Maintenance business Housing business Car Life Support business Animal Health Care business Net sales Revenues from external customers Intersegment sales or transfers Total Segment profit (loss) 26,613 405 27,019 2,594 6,224 1,052 7,276 449 7,244 3 7,247 (173) 3,320 2 3,322 21 7,263 0 7,263 178 Reportable segments Properties business Total Other (Note 1) Total Adjustment (Note 2) Consolidated (Note 3) Net sales Revenues from external customers Intersegment sales or transfers Total Segment profit (loss) 911 124 1,035 (152) 51,577 1,588 53,166 2,917 916 315 1,232 51 52,493 1,904 54,398 2,968 – 52,493 (1,904) (1,904) (92) – 52,493 2,876 (Notes) 1. The “other” category represents operating segments that are not included in reportable segments, and includes manufacturing auto parts, installment sale and lease. 2. Adjustment to segment profit (loss) of ¥(92) million includes intersegment eliminations of ¥262 million and corporate expenses of ¥(355) million. Corporate expenses are mainly general and administrative expenses, which are not attributable to the reportable segments. 3. Segment profit (loss) was adjusted with operating profit in the quarterly consolidated statement of income. 2. Disclosure of impairment losses on non-current assets or goodwill for each reportable segment Not applicable. – 12 – SALA Corporation (2734) II For the three months ended February 28, 2022 1. Disclosure of sales and profit (loss) for each reportable segment and disaggregation of revenue Reportable segments (Millions of yen) Energy & Solutions business Engineering & Maintenance business Housing business Car Life Support business Animal Health Care business Net sales City gas LP gas Electric power Civil engineering work, construction work, equipment work Housing, construction materials Automotive sales and maintenance Veterinary medical products Lease, sale and purchase, and brokerage of real estate, hotel Other Revenue from contracts with customers Other revenue (Note 4) Revenues from external customers Intersegment sales or transfers Total Segment profit (loss) 11,708 7,670 3,739 – – – – – – 7,706 30,824 30,824 483 31,308 2,627 – – – – – – – – – 1 – – – – – – – – – 7,234 1,022 8,256 412 7,234 8,843 3,718 6,351 7,234 8,843 3,718 6,351 8,843 3,718 6,351 8,845 39 3,720 6,351 199 – – – – – – – – – 2 9 – – – – – – – – – 0 – 13 – SALA Corporation (2734) Reportable segments Properties business Total Other (Note 1) Total Adjustment (Note 2) Consolidated (Note 3) Net sales City gas LP gas Electric power Civil engineering work, construction work, equipment work Housing, construction materials Automotive sales and maintenance Veterinary medical products Lease, sale and purchase, and brokerage of real estate, hotel Other Revenue from contracts with customers Other revenue (Note 4) Revenues from external customers Intersegment sales or transfers Total Segment profit (loss) – – – – – – – – – 891 891 124 1,015 (136) 11,708 7,670 3,739 7,234 8,843 3,718 6,351 891 7,706 – 57,863 1,633 59,497 3,151 891 57,863 – – – – – – – – 505 505 58 564 445 1,009 21 11,708 7,670 3,739 7,234 8,843 3,718 6,351 891 8,212 58,369 58 58,427 2,079 60,506 3,172 – – – – – – – – 27 27 – 27 (2,079) (2,051) (150) 11,708 7,670 3,739 7,234 8,843 3,718 6,351 891 8,239 58,397 58 58,455 – 58,455 3,021 (Notes) 1. The “other” category represents operating segments that are not included in reportable segments, and includes manufacturing auto parts, installment sale and lease. 2. Adjustment to segment profit (loss) of ¥(150) million includes intersegment eliminations of ¥309 million and corporate expenses of ¥(460) million. Corporate expenses are mainly general and administrative expenses, which are not attributable to the reportable segments. 3. Segment profit (loss) was adjusted with operating profit in the quarterly consolidated statement of income. 4. “Other revenue” includes revenue on lease, etc. 2. Disclosure of impairment losses on non-current assets or goodwill for each reportable segment Not applicable. 3. Information related to revisions to reportable segments As stated under “Changes in accounting policies,” the Company has applied the Accounting Standard for Revenue Recognition and relevant ASBJ regulations from the beginning of the first quarter of the current fiscal year, and accordingly changed its method for calculating net sales, profit and loss for operating segments given that it has changed accounting methods for revenue recognition. For the first three months of the current fiscal year, as a result of this change, and compared with the figures obtained by the previous method, net sales decreased by ¥2,130 million and segment profit increased by ¥217 million for the “Energy & Solutions business.” Net sales and segment profit increased by ¥1,700 million and ¥299 million, respectively, for the “Engineering & Maintenance business.” Net sales and segment profit increased by ¥297 million and ¥35 million, respectively, for the “Housing business.” Net sales decreased by ¥83 million for the “Car Life Support business,” but there is no effect on segment profit. Net sales decreased by ¥1,089 million for the “Animal Health Care business,” but there is no effect on segment profit. Net sales decreased by ¥263 million for the “Other,” but there is no effect on segment profit. There is no effect on net sales and segment profit of the – 14 – SALA Corporation (2734) “Properties business.” Significant events after reporting period Not applicable. – 15 –