イートアンドホールディングス（2882） – [Delayed]Consolidated Financial Results for the Year Ended February 28, 2022 [Japanese GAAP]

Note:This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. Consolidated Financial Results for the Year Ended February 28, 2022 [Japanese GAAP] April 12, 2022 Company name: EAT&HOLDINGS Co.,Ltd Stock exchange listing: Tokyo Code number: 2882 URL: https://www.eat-and.jp/ Representative: Naoki Fumino Chairman and representative director, CEO Contact: Tatsuya Kato Director-general business administration headquarters Phone: 03-5769-5050 Scheduled date of Annual General Meeting of Shareholders: May 27, 2022 Scheduled date of commencing dividend payments: May 30, 2022 Scheduled date of filing annual securities report: May 30, 2022 Availability of supplementary briefing material on annual financial results: Yes Schedule of annual financial results briefing session: No (Amounts of less than one million yen are rounded down) 1. Consolidated Financial Results for the Fiscal Year Ended February 28, 2022 (March 01, 2021 to February 28, 2022) (1) Consolidated Operating Results (% indicates changes from the previous corresponding period.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Fiscal year ended Million yen % Million yen % Million yen % Million yen % February 28, 2022 30,881 – 834 – 1,476 – 773 – February 28, 2021 25,964 – 261 – 279 – (202) – (Note) Comprehensive income: Fiscal year ended February 28, 2022: ¥ 789 million [ – %] Fiscal year ended February 28, 2021: ¥ (208) million [ – %] Basic earnings per share Diluted earnings per share Rate of return on equity Ordinary profit to total assets ratio Operating profit to net sales ratio Fiscal year ended Yen Yen % % % February 28, 2022 76.16 76.14 10.4 7.2 2.7 February 28, 2021 (19.91) – (2.8) 1.4 1.0 (Reference) Equity in earnings (losses) of affiliated companies: Fiscal year ended February 28, 2022: ¥ – million Fiscal year ended February 28, 2021: ¥ (1) million (Note)Due to the change in the fiscal year-end, the previous fiscal year was an 11-month period from April 1, 2020 to February 28, 2021. Consequently, since the period of the fiscal year under review (March 1, 2021 to February 28, 2022) and the period of the previous fiscal year (April 1, 2020 to February 28, 2021) are different and not comparable, the year-on-year ratio is not stated. (2) Consolidated Financial Position Total assets Net assets Capital adequacy ratio Net assets per share As of Million yen Million yen % Yen February 28, 2022 20,514 7,805 38.0 767.12 February 28, 2021 20,426 7,128 34.8 699.71 (Reference) Equity: As of February 28, 2022: ¥ 7,791 million As of February 28, 2021: ¥ 7,107 million (3) Consolidated Cash Flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at the end of period Fiscal year ended Million yen Million yen Million yen Million yen February 28, 2022 2,510 (1,917) (396) 1,622 February 28, 2021 655 (17) (191) 1,380 2. Dividends Annual dividends Total dividends Payout ratio (consolidated) Dividends to net assets (consolidated) 1st quarter-end 2nd quarter-end 3rd quarter-end Year-end Total Fiscal year ended Yen Yen Yen Yen Yen Million yen % % February 28, 2021 – 5.00 – 5.00 10.00 101 – 1.4 February 28, 2022 – 5.00 – 5.00 10.00 101 13.1 1.3 Fiscal year ending February 28, 2023 (Forecast) – 5.00 – 5.00 10.00 18.5 (Note) Breakdown of the year-end dividend for the fiscal year ended February 28, 2022 : Commemorative dividend – yen Special dividend – yen 3. Consolidated Financial Results Forecast for the Fiscal Year Ending February 28, 2023 (March 01, 2022 to February 28, 2023) (% indicates changes from the previous corresponding period.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Million yen % Million yen % Million yen % Million yen % Yen Six months ended August 31, 2022 15,800 6.9 530 42.0 545 (21.8) 250 (16.4) 24.61 Full year 33,470 8.4 1,100 31.8 1,108 (25.0) 500 (35.4) 49.23 * Notes: (1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): No New – (Company name: ) Exclusion: – (Company name: ) (2) Changes in accounting policies, changes in accounting estimates and retrospective restatement 1) Changes in accounting policies due to the revision of accounting standards: No 2) Changes in accounting policies other than 1) above: No 3) Changes in accounting estimates: No 4) Retrospective restatement: No (3) Total number of issued shares (common shares) 1) Total number of issued shares at the end of the period (including treasury shares): February 28, 2022: 10,158,190 shares February 28, 2021: 10,158,190 shares 2) Total number of treasury shares at the end of the period: February 28, 2022: 959 shares February 28, 2021: 921 shares 3) Average number of shares during the period: Fiscal Year ended February 28, 2022: 10,157,264 shares Fiscal Year ended February 28, 2021: 10,157,269 shares ―1― Table of Contents – Attachments 1. Overview of Operating Results, etc. ………………………………………………………………………………………… 2 (1) Overview of Operating Results for the Fiscal Year under Review ……………………………………………. 2 (2) Overview of Financial Position for the Fiscal Year under Review ……………………………………………. 4 (3) Overview of Cash Flows for the Fiscal Year under Review …………………………………………………….. 5 (4) Future Outlook ………………………………………………………………………………………………………………….. 6 2. Basic Stance Regarding Selection of Accounting Standards ……………………………………………………….. 6 3. Consolidated Financial Statements and Principal Notes …………………………………………………………….. 7 (1) Consolidated Balance Sheets ………………………………………………………………………………………………. 7 (2) Consolidated Statements of Income and Comprehensive Income …………………………………………….. 9 (3) Consolidated Statements of Changes in Net Assets …………………………………………………………………. 11 (4) Consolidated Statements of Cash Flows ……………………………………………………………………………… 13 (5) Notes to Consolidated Financial Statements ……………………………………………………………………….. 15 (Notes on going concern assumption) ……………………………………………………………………………… 15 (Changes in significant subsidiaries) ……………………………………………………………………………….. 15 (Additional information) ……………………………………………………………………………………………….. 15 (Segment information, etc.) ……………………………………………………………………………………………. 16 (Per share information) ………………………………………………………………………………………………….. 21 (Significant subsequent events) ………………………………………………………………………………………. 21 ―2― 1. Overview of Operating Results, etc. Due to the change in the fiscal year-end, the previous fiscal year covered 11-month period from April 1, 2020 to February 28, 2021. Consequently, since the period of the fiscal year under review (from March 1, 2021 to February 28, 2022) and the period of the previous fiscal year (from April 1, 2020 to February 28, 2021) do not match and are not comparable, the year-on-year ratio is not stated. (1) Overview of Operating Results for the Fiscal Year under Review In the fiscal year under review, the outlook for the Japanese economy continued to be uncertain. Private consumption declined mainly in face-to-face services, due to the state of emergency declaration issued following the fifth wave of COVID-19 infections, and the sixth wave of infections due to the Omicron variant. Regarding market trends in frozen foods and restaurants, which are mainstay businesses of the Company, the frozen food market grew steadily amid the trend of growing demand for eating at home, while the restaurant market did not recover to pre-COVID levels, and the restrictions on business hours and alcoholic beverage provision at restaurants due to the state of emergency declaration in major metropolitan areas and priority measures to prevent the spread of infections in other regions continued to impact the Restaurant Business. Under such circumstances, riding on the wave of the market expansion, the Company endeavored to further increase sales in the Food Business and promoted further improvements in productivity and cost reduction, mainly at Kanto 2nd Plant. In the Restaurant Business, under the harsh conditions with a prolonged state of emergency declaration, we continued to promote the scrap-and-build approach for stores, enhanced the attractiveness of existing stores through the micromanagement, etc. of each store, and actively responded to the robust takeaway demand stemming from the COVID-19 crisis. In addition, for new businesses, we implemented various initiatives including the following: opening of “OSAKA FUN DINING, OSAKA OHSHO” in Shanghai, China; opening of “Sapporo Misogyoza”, an unmanned direct sales store of raw frozen gyoza limited to the Sapporo area; and developing the restaurants e-commerce website “RAMEN JOURNEY.” As a result, net sales for the fiscal year under review were ¥30,881 million and operating profit was ¥834 million, achieving an increase in sales and a significant increase in operating profit. In addition, in the Restaurant Business, owing to income provided by local governments as the compensation for cooperation in preventing the spread of COVID-19, the Company recorded ordinary profit of ¥1,476 million, and profit attributable to the parent company’s shareholders of ¥773 million. The operating results for each segment are as follows. 1) Food Business In the Food Business, we maintained the strong sales, as our mainstay product “OSAKA OHSHO Hanetsuki Gyoza” continued to grow, and the new product “OSAKA OHSHO Hanetsuki Stamina Meat Gyoza,” launched in February 2021, became a hit product. As a result, the net sales in the Food Business for the fiscal year under review were ¥18,789 million. The operating profit was ¥1,153 million, as a result of improving the gross margin ratio through enhancing the productivity via the introduction of state-of-the-art equipment at the new line at Kanto 2nd Plant, which began its operations in January 2021. 2) Restaurant Business Regarding the Restaurant Business, in the “OSAKA OHSHO” business category, in addition to continued efforts from the previous fiscal year in closing unprofitable stores, we actively opened new stores at locations close to residential areas. We also proceeded with endeavor to respond to changes in the business environment due to the COVID-19 crisis such as the expansion of the takeout and delivery menus, and strove to bolster existing stores through the development of limited-time menus and the introduction of micromanagement. As a result, in the fiscal year under review, the net sales were ¥12,091 million and the operating profit was ¥11 million, showing a steady recovery. ―3― In the fiscal year under review, the Group opened a total of 37 stores, including 25 directly managed stores and 12 FC stores, and closed a total of 35 stores, including 8 directly managed stores and 27 FC stores. At the end of the fiscal year under review, the total number of stores was 472 (including 28 overseas stores), with 107 directly managed stores (including 7 overseas stores) and 365 FC stores (including 21 overseas stores). Furthermore, in line with the switch in operating format, 1 store was changed from a FC store to a directly managed store. The breakdown of the number of stores in the Restaurant Business is as follows. Name of business category End of previous fiscal year (February 28, 2021) End of fiscal year under review (February 28, 2022) Directly managed stores FC stores Total Directly managed stores FC stores Total OSAKA OHSHO 39 312 351 48 313 361 Ramen 12 19 31 11 18 29 Bakery & cafes 22 14 36 21 10 31 Other businesses 13 4 17 20 3 23 Overseas 3 32 35 7 21 28 Total 89 381 470 107 365 472 ―4― (2) Overview of Financial Position for the Fiscal Year under Review Status of Assets, Liabilities and Net Assets (Assets) Total assets at the end of the fiscal year under review increased by ¥88 million from the end of the previous fiscal year to ¥20,514 million. Current assets decreased by ¥719 million from the end of the previous fiscal year to ¥9,044 million. The main contributing factors were an increase in cash and deposits of ¥234 million, a decrease in accounts receivable – trade of ¥1,148 million, and an increase in merchandise and finished goods of ¥221 million. Non-current assets increased by ¥808 million from the end of the previous fiscal year to ¥11,470 million. The main contributing factors were an increase in property, plant and equipment of ¥708 million and an increase in investments and other assets of ¥101 million. (Liabilities) Liabilities at the end of the fiscal year under review decreased by ¥587 million from the end of the previous fiscal year to ¥12,709 million. Current liabilities decreased by ¥672 million from the end of the previous fiscal year to ¥9,232 million. The main contributing factors were a decrease in accounts payable – trade of ¥628 million, a decrease in short-term borrowings of ¥304 million, and an increase in income taxes payable of ¥209 million. Non-current liabilities increased by ¥84 million from the end of the previous fiscal year to ¥3,477 million. The main contributing factor was an increase in long-term borrowings. (Net Assets) Net assets at the end of the fiscal year under review increased by ¥676 million from the end of the previous fiscal year to ¥7,805 million. The main contributing factor was an increase in retained earnings. As a result, the capital adequacy ratio was 38.0% (34.8% at the end of the previous fiscal year). ―5― (3) Overview of Cash Flows for the Fiscal Year under Review Status of Cash Flows Cash and cash equivalents at the end of the fiscal year under review (hereinafter “funds”) increased by ¥241 million from the end of the previous fiscal year to ¥1,622 million. (Cash Flows from Operating Activities) Funds provided by operating activities amounted to ¥2,510 million. The main contributing factors were profit before income taxes of ¥1,203 million, a decrease in trade receivables of ¥1,157 million, and depreciation of ¥1,014 million, which offset an increase in inventories of ¥174 million, and a decrease in trade payables of ¥637 million. (Cash Flows from Investing Activities) Funds used in investing activities were ¥1,917 million. The main contributing factor was the purchase of property, plant and equipment. (Cash Flows from Financing Activities) Funds used in financing activities amounted to ¥396 million. The main contributing factors were a decrease in short-term borrowings of ¥304 million, repayments of long-term borrowings of ¥557 million, and dividends paid of ¥101 million, despite proceeds from long-term borrowings of ¥600 million. (Trends in cash flow-related indicators) Fiscal year ended February 28, 2021 Fiscal year ended February 28, 2022 Capital adequacy ratio (%) 34.8 38.0 Capital adequacy ratio based on market value (%) 89.4 107.1 Cash flow to debt ratio (times) 6.0 1.5 Interest coverage ratio (times) 46.3 195.3 (Notes) 1. The calculation formulas of the above indicators are as follows. Capital adequacy ratio: Shareholders’ equity / Total assets Capital adequacy ratio based on market value: Market capitalization / Total assets Cash flow to debt ratio: Interest-bearing debt / Operating cash flows Interest coverage ratio: Operating cash flows / Interest payments 2. Market capitalization is calculated based on the total number of shares issued excluding treasury shares. 3. Cash flows refer to cash flows from operating activities. Interest-bearing debt refers to all liabilities for which interest is paid among the liabilities recorded on the Consolidated Balance Sheets. Interest payments refer to the amount of interest paid in the Statements of Cash Flows. ―6― (4) Future Outlook Regarding the business environment surrounding the Group in the next fiscal year, as there is no prospect of convergence of the COVID-19 pandemic, the Group expects to continue facing a harsh business environment, as well as increases in raw material prices, labor costs, and logistics costs. In the Food Business, besides the boost from the frozen gyoza market which will continue to grow, we believe that sales of our mainstay products “OSAKA OHSHO Hanetsuki Gyoza” and “OSAKA OHSHO Purumochi Boiled Gyoza” can be further increased with their high levels of product appeal. In addition, Kanto 3rd Plant is scheduled to begin its operations in October 2022, and will realize savings in labor and efficiency improvements through the introduction of the latest technology, thereby further improving productivity and expanding our supply capacity. In the Restaurant Business, we will continue to actively open stores of our mainstay “OSAKA OHSHO” brand near residential areas, conduct more profitable store operations, and aim for further recovery. In addition, with regard to overseas development, we will promote store openings in business formats that fit local needs, mainly in China and Taiwan. As a result of these initiatives, regarding the financial results for the fiscal year ending February 28, 2023, the Group expects to achieve the net sales of ¥33,470 million, the operating profit of ¥1,100 million, the ordinary profit of ¥1,108 million, and the profit attributable to the shareholders of the parent company of ¥500 million. 2. Basic Stance Regarding Selection of Accounting Standards The Group shall prepare its consolidated financial statements based on the Japanese accounting standards for the time being, taking into account the comparability of consolidated financial statements between periods and between companies. Regarding the application of International Financial Reporting Standards (IFRS), we will make an appropriate response upon considering various conditions both in Japan and overseas. ―7― Consolidated Financial Statements Consolidated Balance Sheets (Million yen) As of February 28,2021 As of February 28,2022 Assets Current assets Cash and deposits 1,388 1,622 Accounts receivable – trade 6,864 5,716 Merchandise and finished goods 814 1,035 Raw materials and supplies 392 346 Other 304 322 Allowance for doubtful accounts (0) – Total current assets 9,764 9,044 Non-current assets Property, plant and equipment Buildings and structures 4,987 5,023 Machinery, equipment and vehicles 2,211 2,276 Tools, furniture and fixtures 448 502 Land 984 984 Leased assets 35 23 Construction in progress 14 579 Total property, plant and equipment 8,681 9,389 Intangible assets Software 180 182 Other 50 46 Total intangible assets 231 229 Investments and other assets Investment securities 18 16 Guarantee deposits 941 818 Deferred tax assets 494 621 Other 301 400 Allowance for doubtful accounts (7) (7) Total investments and other assets 1,749 1,850 Total non-current assets 10,661 11,470 Total assets 20,426 20,514 ―8― (Million yen) As of February 28,2021 As of February 28,2022 Liabilities Current liabilities Accounts payable – trade 2,726 2,097 Short-term borrowings 1,295 991 Current portion of long-term borrowings 553 526 Accounts payable – other 3,147 3,120 Income taxes payable 214 424 Provision for bonuses 212 249 Provision for bonuses for directors (and other officers) 29 50 Provision for sales rebates 957 918 Other 767 852 Total current liabilities 9,904 9,232 Non-current liabilities Long-term borrowings 2,057 2,127 Deferred tax liabilities 12 12 Long-term guarantee deposits 660 661 Retirement benefit liability 169 175 Provision for retirement benefits for directors (and other officers) 456 481 Other 35 20 Total non-current liabilities 3,392 3,477 Total liabilities 13,297 12,709 Net assets Shareholders’ equity Share capital 2,016 2,016 Capital surplus 1,946 1,947 Retained earnings 3,146 3,816 Treasury shares (0) (0) Total shareholders’ equity 7,108 7,779 Accumulated other comprehensive income Valuation difference on available-for-sale securities 2 3 Foreign currency translation adjustment – 5 Remeasurements of defined benefit plans (4) 3 Total accumulated other comprehensive income (1) 12 Share acquisition rights – 13 Non-controlling interests 21 – Total net assets 7,128 7,805 Total liabilities and net assets 20,426 20,514 ―9― Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income (Million yen) For the fiscal year ended February 28,2021 For the fiscal year ended February 28,2022 Net sales 25,964 30,881 Cost of sales 15,743 18,297 Gross profit 10,220 12,583 Selling, general and administrative expenses 9,959 11,748 Operating profit 261 834 Non-operating income Interest income 0 0 Dividend income 0 0 Subsidy income 13 651 Compensation for forced relocation 21 – Other 4 6 Total non-operating income 39 657 Non-operating expenses Interest expenses 13 12 Share of loss of entities accounted for using equity method 1 – Taxes and dues 2 – Other 3 2 Total non-operating expenses 21 15 Ordinary profit 279 1,476 Extraordinary income Gain on sale of non-current assets 836 – Gain on sale of shares of subsidiaries and associates 8 – Reversal of allowance for doubtful accounts 10 – Gain on bargain purchase 36 – Gain on reversal of share acquisition rights 2 – Other 1 – Total extraordinary income 895 – Extraordinary losses Loss on sale and retirement of non-current assets 10 3 Loss on store closings 219 89 Impairment losses 765 180 Loss on sale of shares of subsidiaries and associates 48 – Loss on COVID19 51 – Other 27 – Total extraordinary losses 1,125 273 Profit before income taxes 49 1,203 Income taxes – current 245 558 Income taxes – deferred 4 (130) Total income taxes 249 427 Profit (loss) (199) 775 Profit attributable to non-controlling interests 2 1 Profit (loss) attributable to owners of parent (202) 773 ―10― Consolidated Statements of Comprehensive Income (Million yen) For the fiscal year ended February 28,2021 For the fiscal year ended February 28,2022 Profit (loss) (199) 775 Other comprehensive income Valuation difference on available-for-sale securities (0) 1 Foreign currency translation adjustment – 5 Remeasurements of defined benefit plans, net of tax 3 7 Share of other comprehensive income of entities accounted for using equity method (12) – Total other comprehensive income (9) 13 Comprehensive income (208) 789 Comprehensive income attributable to Comprehensive income attributable to owners of parent (211) 787 Comprehensive income attributable to non-controlling interests 2 1 ―11― Consolidated Statements of Changes in Net Assets For the fiscal year ended February 28,2021 (Million yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Balance at beginning of period 2,016 1,946 3,450 (0) 7,412 Changes during period Dividends of surplus (101) (101) Profit (loss) attributable to owners of parent (202) (202) Purchase of treasury shares – Change in scope of consolidation – Change in ownership interest of parent due to transactions with non-controlling interests – Net changes in items other than shareholders’ equity – Total changes during period – – (303) – (303) Balance at end of period 2,016 1,946 3,146 (0) 7,108 Accumulated other comprehensive income Share acquisition rights Non-controlling interests Total net assets Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Balance at beginning of period 2 12 (8) 7 2 18 7,440 Changes during period Dividends of surplus (101) Profit (loss) attributable to owners of parent (202) Purchase of treasury shares – Change in scope of consolidation – Change in ownership interest of parent due to transactions with non-controlling interests – Net changes in items other than shareholders’ equity (0) (12) 3 (9) (2) 2 (8) Total changes during period (0) (12) 3 (9) (2) 2 (312) Balance at end of period 2 – (4) (1) – 21 7,128 ―12― For the fiscal year ended February 28,2022 (Million yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Balance at beginning of period 2,016 1,946 3,146 (0) 7,108 Changes during period Dividends of surplus (101) (101) Profit (loss) attributable to owners of parent 773 773 Purchase of treasury shares (0) (0) Change in scope of consolidation (2) (2) Change in ownership interest of parent due to transactions with non-controlling interests 1 1 Net changes in items other than shareholders’ equity – Total changes during period – 1 670 (0) 670 Balance at end of period 2,016 1,947 3,816 (0) 7,779 Accumulated other comprehensive income Share acquisition rights Non-controlling interests Total net assets Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Balance at beginning of period 2 – (4) (1) – 21 7,128 Changes during period Dividends of surplus (101) Profit (loss) attributable to owners of parent 773 Purchase of treasury shares (0) Change in scope of consolidation (2) Change in ownership interest of parent due to transactions with non-controlling interests 1 Net changes in items other than shareholders’ equity 1 5 7 13 13 (21) 5 Total changes during period 1 5 7 13 13 (21) 676 Balance at end of period 3 5 3 12 13 – 7,805 ―13― Consolidated Statements of Cash Flows (Million yen) For the fiscal year ended February 28,2021 For the fiscal year ended February 28,2022 Cash flows from operating activities Profit before income taxes 49 1,203 Depreciation 844 1,014 Amortization of goodwill 4 – Gain on bargain purchase (36) – Share of loss (profit) of entities accounted for using equity method 1 – Impairment losses 765 180 Loss on store closings 219 89 Compensation for forced relocation (21) – Other extraordinary loss (income) 67 – Increase (decrease) in retirement benefit liability (8) 13 Increase (decrease) in provision for retirement benefits for directors (and other officers) 20 24 Increase (decrease) in provision for bonuses 56 37 Increase (decrease) in provision for bonuses for directors (and other officers) 6 21 Increase (decrease) in provision for sales rebates 127 (39) Increase (decrease) in allowance for doubtful accounts 19 (0) Interest and dividend income (0) (0) Interest expenses 13 12 Loss (gain) on sale and retirement of non-current assets (825) 3 Gain on reversal of share acquisition rights (2) – Loss (gain) on sale of shares of subsidiaries and associates 39 – Decrease (increase) in trade receivables (1,446) 1,157 Decrease (increase) in inventories (144) (174) Increase (decrease) in trade payables 410 (637) Increase (decrease) in accounts payable – other 540 (70) Increase (decrease) in accrued consumption taxes (12) 76 Increase (decrease) in guarantee deposits received (84) 0 Other, net 240 (69) Subtotal 848 2,841 Interest and dividends received 0 0 Interest paid (14) (12) Income taxes paid (200) (318) Proceeds from compensation for forced relocation 21 – Net cash provided by (used in) operating activities 655 2,510 ―14― (Million yen) For the fiscal year ended February 28,2021 For the fiscal year ended February 28,2022 Cash flows from investing activities Purchase of property, plant and equipment (1,484) (1,848) Proceeds from sale of property, plant and equipment 1,520 0 Purchase of intangible assets (114) (51) Purchase of shares of subsidiaries and associates – (66) Proceeds from purchase of shares of subsidiaries resulting in change in scope of consolidation 64 – Payments for sale of shares of subsidiaries resulting in change in scope of consolidation (46) – Payments of guarantee deposits (68) (75) Proceeds from refund of guarantee deposits 88 183 Other, net 24 (59) Net cash provided by (used in) investing activities (17) (1,917) Cash flows from financing activities Net increase (decrease) in short-term borrowings (344) (304) Proceeds from long-term borrowings 900 600 Repayments of long-term borrowings (620) (557) Purchase of shares of subsidiaries not resulting in change in scope of consolidation – (22) Proceeds from issuance of share acquisition rights – 2 Dividends paid (101) (101) Repayments of lease obligations (24) (13) Other, net – (0) Net cash provided by (used in) financing activities (191) (396) Effect of exchange rate change on cash and cash equivalents – 5 Net increase (decrease) in cash and cash equivalents 447 202 Cash and cash equivalents at beginning of period 933 1,380 Increase in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation – 38 Cash and cash equivalents at end of period 1,380 1,622 ―15― (5) Notes to Consolidated Financial Statements (Notes on going concern assumption) Not applicable. (Changes in significant subsidiaries) Not applicable. Although this does not fall under changes in specified subsidiaries, EAT AND TAIWAN CO., LTD., which has increased in significance, has been included in the scope of consolidation from the fiscal year under review. (Additional Information) (Accounting estimates made in line with the COVID-19 pandemic) Due to the impact of the COVID-19 pandemic, our business activities have been affected, as a result of factors including the stagnation of business activities in line with restrictions on movement both in Japan and overseas. Assuming a certain level of the impact of the COVID-19 pandemic will remain even after the fiscal year under review, we have made certain accounting estimates (impairment of non-current assets, etc.). Since there is high uncertainty surrounding the impact of the COVID-19 pandemic, if there are changes to the above assumption, there may be an impact on the Group’s operating results and financial position in the future. ―16― (Segment information, etc.) [Segment information] 1. Overview of reportable segments The Group’s reportable segments are the constituent business units of the Group for which separate financial data are available and that are examined periodically to allow the Board of Directors to determine the allocation of management resources and evaluate performance. The Group has adopted a holding company system, and develops its business by formulating comprehensive strategies for each operating company. Accordingly, the Group has two reportable segments, the Food Business and the Restaurant Business, based on factors including similarities by product and service, with each of the operating companies as the foundation. In the Food Business, we sell frozen foods, etc. under the “OSAKA OHSHO” brand to consumer Co-op and general mass retailers nationwide through wholesalers, as well as through e-commerce business goods sales sites. In the Restaurant Business, we operate directly managed restaurants centering on OSAKA OHSHO, as well as franchise chains of such in-house brands. 2. Calculation methods of net sales, profit (loss), assets, liabilities and other items for each reportable segment The accounting method for the reported business segments is the same as the accounting method adopted in the preparation of the consolidated financial statements. Profit figures in the reportable segments are based on operating profit. Inter-segment net sales or transfers are based on market prices, manufacturing costs, etc. 3. Matters regarding changes in reportable segments, etc. In order to more appropriately evaluate and manage the performance of each reportable segment, we have reviewed the allocation method of common expenses and changed the method of calculating profit or losses in the reportable segments from the fiscal year under review. Segment information for the previous fiscal year that is stated for comparison with information in the fiscal year under review was prepared using the restated reportable segments, and there is a difference between the said information and information on reportable segments disclosed in the previous fiscal year. ―17― 4. Information on net sales, profit (loss), assets, liabilities and other items by reportable segment For the fiscal year ended February 28, 2021 (from April 1, 2020 to February 28, 2021) (Million yen) Reportable segment Adjustment (Note 1) Amount recorded in Consolidated Financial Statements (Note 2) Food Business Restaurant Business Total Net sales Net sales to external customers 15,667 10,296 25,964 － 25,964 Inter-segment net sales or transfers 794 － 794 (794) － Total 16,462 10,296 26,759 (794) 25,964 Segment profit (loss) 869 (400) 469 (207) 261 Segment assets 14,976 3,878 18,854 1,571 20,426 Other items Depreciation 524 320 844 － 844 Amortization of goodwill － 4 4 － 4 Increase in property, plant and equipment and intangible assets 865 688 1,554 124 1,678 (Notes) 1. Details of the adjustments are as follows: (1) The ¥(207) million adjustment to segment profit (loss) consists of company-wide expenses not allocated to each reportable segment, and mainly includes general and administrative expenses that do not belong to the reportable segments. (2) The ¥1,571 million adjustment to segment assets consists of company-wide assets not allocated to each reportable segment, and mainly includes surplus assets and working capital (cash and deposits) of the Head Office and deferred tax assets that do not belong to the reportable segments. (3) The ¥124 million adjustment to the increase in property, plant and equipment and intangible assets consists of company-wide assets not allocated to each reportable segment, and mainly includes software and equipment of the Head Office that do not belong to the reportable segments. 2 Segment profit (loss) has been adjusted to correspond with operating profit in the Consolidated Statement of Income. 3. Depreciation includes the amortization of long-term prepaid expenses. 4. The fiscal year under review falls under the transitional period of the change in the fiscal year-end, and consists of 11 months (April 1, 2020 to February 28, 2021) for the Company and its consolidated subsidiaries which had fiscal years that ended in March. ―18― For the fiscal year ended February 28, 2022 (from March 1, 2021 to February 28, 2022) (Million yen) Reportable segment Adjustment (Note 1) Amount recorded in Consolidated Financial Statements (Note 2) Food Business Restaurant Business Total Net sales Net sales to external customers 18,789 12,091 30,881 － 30,881 Inter-segment net sales or transfers 889 － 889 (889) － Total 19,678 12,091 31,770 (889) 30,881 Segment profit (loss) 1,153 11 1,164 (330) 834 Segment assets 14,651 3,986 18,638 1,876 20,514 Other items Depreciation 670 343 1,014 － 1,014 Amortization of goodwill － － － － － Increase in property, plant and equipment and intangible assets 1,236 608 1,844 28 1,872 (Notes) 1. Details of the adjustments are as follows: (1) The ¥(330) million adjustment to segment profit (loss) consists of company-wide expenses not allocated to each reportable segment, and mainly includes general and administrative expenses that do not belong to the reportable segments. (2) The ¥1,876 million adjustment to segment assets consists of company-wide assets not allocated to each reportable segment, and mainly includes surplus assets and working capital (cash and deposits) of the Head Office and deferred tax assets that do not belong to the reportable segments. (3) The ¥28 million adjustment to the increase in property, plant and equipment and intangible assets consists of company-wide assets not allocated to each reportable segment, and mainly includes software and equipment of the Head Office that do not belong to the reportable segments. 2 Segment profit (loss) has been adjusted to correspond with operating profit in the Consolidated Statement of Income. 3. Depreciation includes the amortization of long-term prepaid expenses. ―19― [Related information] For the fiscal year ended February 28, 2021 (from April 1, 2020 to February 28, 2021) 1. Information by product or service As the same information has been stated in “Segment information,” this information is omitted. 2. Information by region (1) Net sales As net sales to external customers in Japan exceed 90% of net sales in the Consolidated Statement of Income, this information is omitted. (2) Property, plant and equipment As there is no property, plant and equipment outside of Japan, this information is omitted. 3. Information by major customer (Million yen) Name of customer Net sales Name of related segment Mitsubishi Shokuhin Co., Ltd. 5,773 Food Business ITOCHU Corporation 2,576 Food Business For the fiscal year ended February 28, 2022 (from March 1, 2021 to February 28, 2022) 1. Information by product or service As the same information has been stated in “Segment information,” this information is omitted. 2. Information by region (1) Net sales As net sales to external customers in Japan exceed 90% of net sales in the Consolidated Statement of Income, this information is omitted. (2) Property, plant and equipment As the property, plant and equipment in Japan exceed 90% of the value of property, plant and equipment in the Consolidated Balance Sheets, this information is omitted. 3. Information by major customer (Million yen) Name of customer Net sales Name of related segment Mitsubishi Shokuhin Co., Ltd. 6,345 Food Business ITOCHU Corporation 2,712 Food Business ―20― [Information on impairment losses on non-current assets by reportable segment] For the fiscal year ended February 28, 2021 (from April 1, 2020 to February 28, 2021) (Million yen) Reportable segment Total Food Business Restaurant Business Impairment losses – 765 765 For the fiscal year ended February 28, 2022 (from March 1, 2021 to February 28, 2022) (Million yen) Reportable segment Total Food Business Restaurant Business Impairment losses – 180 180 [Information on amortized amount and unamortized balance of goodwill by reportable segment] For the fiscal year ended February 28, 2021 (from April 1, 2020 to February 28, 2021) (Million yen) Reportable segment Adjustment Amount recorded in Consolidated Financial Statements Food Business Restaurant Business Total Amount amortized in the current period – 4 4 – 4 Balance at end of current period – – – – – For the fiscal year ended February 28, 2022 (from March 1, 2021 to February 28, 2022) Not applicable. [Information on gain on bargain purchase by reportable segment] For the fiscal year ended February 28, 2021 (from April 1, 2020 to February 28, 2021) In the Restaurant Business segment, the Group acquired the shares of Ippinko Co., Ltd. and Ippinko Foods Ltd. In line with the above, ¥36 million of gain on bargain purchase was recorded in the fiscal year ended February 28, 2021. For the fiscal year ended February 28, 2022 (from March 1, 2021 to February 28, 2022) Not applicable. ―21― (Per share information) For the fiscal year ended February 28, 2021 For the fiscal year ended February 28, 2022 Net assets per share ¥699.71 ¥767.12 Basic earnings (losses) per share ¥(19.91) ¥76.16 Diluted earnings per share － ¥76.14 (Notes) 1. Diluted earnings per share for the previous fiscal year are not stated because there were no dilutive shares in the previous fiscal year. 2. The basis for calculating basic earnings (losses) per share and diluted earnings per share is as follows. For the fiscal year ended February 28, 2021 For the fiscal year ended February 28, 2022 (1) Basic earnings (losses) per share Profit (loss) attributable to owners of parent (Million yen) (202) 773 Amount not attributable to common shareholders (Million yen) － － Profit (loss) attributable to owners of parent relating to common shares (Million yen) (202) 773 Average number of common shares outstanding during the period (Shares) 10,157,269 10,157,264 (2) Diluted earnings per share Adjustment to profit attributable to owners of parent (Million yen) － － Increase in number of common shares (Shares) － 3,023 (Out of the above: Share acquisition rights (Shares)) － (3,023) Overview of dilutive shares not included in the calculation of diluted earnings per share due to a lack of dilutive effect － － (Significant subsequent events) Not applicable.