The 60Th Period Annual Report January 1, 2010 - December 31, 2010 家族亭 P1-2

家族亭表 1- 表 4

SINGAPORE THAILAND JAPAN INDIA CHINA

Kazokutei Co., LTD Wakita-Fujimura-Midosuji Bldg. 2F 4-2-14, Fushimimachi, Chuo-ku, Osaka Japan TEL +81-6-6227-6030 http://www.kazokutei.co.jp/en

The 60th period Annual Report January 1, 2010 - December 31, 2010 家族亭 P1-2

Kazokutei makes everyone in the world smile. Topics of 2010 Securing pro t amid adverse winds while making From Osaka, Kazokutei is bringing investments for the medium and long term future. delicious noodles to Asia and the world.

Kazokutei's secret recipe for soba and March,April,July,August, TOPIC 1 September,and October,2010 TOPIC 2 Tokutoku's handmade udon We opened two shops in China, four shops Establishment of a joint venture in India bring smiles to everyone. in Thailand, and one shop in Singapore We opened two shops in Shanghai, China and four shops in In order to promote franchise chain restaurants specializing in Bangkok, Thailand. With one more shop in Singapore, Japanese cuisine in India, a joint venture was established in overseas shops totaled 11. India with Abacus Corporation in January 2011.

TOPIC 3 TOPIC 4 Another joint venture was established between A master franchise agreement was concluded KPN Corporation, one of the conglomerates with Somboon Corporation, in Thailand, Kinrei Corporation and Kazokutei. another Thai conglomerate.

Udon and soba noodle industry is very traditional. Kazokutei also commemorates In partnership with Kinrei Corporation, we introduced A master franchise agreement was made to promote The Show Kagonoya, a Japanese restaurant serving full menus including Kitchen, a self-developed new style Japanese restaurant where the 64th anniversary this year. However, we are not an old-fashioned company. Shabushabu, into the Thai market. customers enjoy meals while looking at cooking performance. We commenced management reform 8 years ago focusing

on young managers. We always wish to be youthful Investor Relations Annual Schedule (January 1, 2011 - December 31, 2011) and challenging like a venture company. The First Half of 2011 (scheduled) The Second Half of 2011 (scheduled)

Announcement of financial results [Feb. 9] Announcement of financial results for February Kazokutei keeps moving Briefing session on the financial results (Tokyo) [Feb. 14] August the second quarter of 2011 Nikkei IR Fair 2011 STOCK WORLD [Aug. 26～27] Franchise show 2011 [Mar. 8～10] March Ordinary general meeting of shareholders [Mar. 29] forward as "a venture company Announcement of financial results November for the third quarter of 2011 emerging in a traditional industry"industry". May Announcement of financial results for the first quarter of 2011

1 TOPICS 2

8月

11月家族亭 P3-4

Interview Inui-san vs. Otei-chan

Otei-chan : Hello, everyone! How have you been? I’m Otei, the image Expansion of large-scale corporate franchisees in Japan President & CEO Mitsuhiro Inui character for Kazokutei. My fans call me Otei-chan. Very nice to meet 1. PROFILE Reinforce FC Management Platform you all! 2. Born and raised Kanagawa Ken Overseas businesses Born April 19, 1953 President Inui : Hello, Otei-chan! Everybody knows you by now, 3. March 1977 graduated from Department of Liberal Arts, College Financial support from The Direct of Arts and Sciences, the University of Tokyo Otei-chan. 4. April 1977 entered Nissan Motor Co.,Ltd. Business in Japan June 1983 (as a company order of Nissan Motor) graduated from Otei-chan : Yes, Thank you, but… Because Kazokutei has become an the Graduate School of Management at Northwestern University (Illinois, USA) (obtained MBA) international company by opening shops overseas including China, January 1989 entered KPMG Consulting, Inc. May 1992 entered Booz Allen Hamilton (Japan) Inc. Thailand, and Singapore in such a short time that, I wondered if people number of franchise chain restaurants in Japan in preparation for future June 1998 entered as Corporate Officer of Suruga Seiki Co.,Ltd. April 2002 entered Kappa Create Co.,Ltd abroad got to know me already. business expansion, and to develop overseas business and to reinforce April 2003 dispatched to Kazokutei Co., Ltd. as General Manager of Business Operation Reform President Inui : I see. Your aggresive personality is perfect to be our franchise management platform as an axis of our mid- term program. June 2003 became Director of Kazokutei Co., Ltd. May 2005 became Representative Director & President of Tokutoku Co., Ltd. image character. You really are dependable! Otei-chan : I see. How did it go? President Inui. (left office in March 2006) January 2006 took office as Representative Director & President of Kazokutei Co., Ltd Otei-chan : Very kind of you, President Inui. Now let us get down to our President Inui : Regarding the recovery in existing business, the same interview! Thank you for your valuable time, President Inui. store sales of the Direct Business Division achieved 100.2% compared to You can view a short message from President Inui President Inui : I thank you. the previous year on a full year basis. But recovery of franchise store sales Otei-chan and President Inui Talk (moving pictures) Otei-chan : First of all, could you explain about the settlement of started slow, recording around 90% compared to the previous year in the on your mobile phone. TThehe result and progress report for FY2010 accounts for FY2010 announced the other day? first half, and gradually improved during the second half as the result of our (the period January 1 through December 31, 2010) President Inui : OK. Recently Kazokutei announced the settlement of support for the franchisees. As for December, the month ended at 98.2% as and strategies for FY2011 on financial accounts for FY2010. Revenues were 9,194 million Yen, with 342 million compared to that in the previous year. Yen of operating profits and 350 million Yen of ordinary profits. Our net Otei-chan : Every one of the franchisers worked together with franchisees. (the period January 1 through December 31, 2011) results profit was 122million Yen for the year. We achieved increases both in So their results improved during the second half. revenues and in profit. Operating profits, in particular, increased 31.6% President Inui : That’s right. The strong franchise management system at In the Udon and Soba (wheat and buckwheat) noodle shop markets, where concentration has been progressing, compared with the previous year, while revenues increased only 2.7% Kazokutei made it possible. Kazokutei gained its momentum to expand franchise chain networks through the acquisition of “Toku Toku.” during the period. That means that everybody in our company has tried Otei-chan : It sure is dependable, isn’t it? As Kazokutei also has as many as 10 types of shop formats for directly managed shops and franchise chain operations, very hard to generate profits. President Inui : Definitely. In addition, for future expansion, we have there is virtually no restriction in site selection, etc. for opening new shops. We have been expanding our Otei-chan : Both revenues and profits have grown. That’s great! I also opened 21 farancise-shops including technical tie-up shops. We have added overseas activities positively mainly in franchise chain. We opened a shop in February and another in April successively in Shanghai, China as our full-scale entry worked hard together with other staffs to sell “Happy Meal Coupon,” (You 4 new shops and 6 contracts with large-scale corporate franchisees who only pay 5,000 Yen and get 6,000 Yen’s worth). I’m very pleased with the have financial strength and could become core members of our franchise into China. Following up the previous year, we opened four Image character of Kazokutei new shops in ailand, including one in July, another in August, Otei-chan good results. As I am always in our shops, I don't know well, but what have network in the future. and two more in September, totaling 6 shops in this country. PROFILE you done as overall strategies during the period? Otei-chan : Such large-scale corporate franchisees will establish more

In addition, one more shop was opened in Singapore in Place of Birth Osaka President Inui : The basic strategy from the beginning of the previous and more franchisees restaurants, won’t they? Date of Birth A secret October (totaling 3 shops in Singapore)... As of 2009 actively promoting its business year, first of all, was to improve existing businesses both at directly PR activities every day Kazokutei has been expanding its business steadily. as Image Character of Kazokutei. owned shops and franchise chain restaurants, and then to increase the

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Interview Inui-san vs. Otei-chan

President Inui : Yes, that’s true. You’ve studied well. In the past, most of Singapore, Thailand, and China. Kazokutei will be supporting Kagonoya to to SOBA(buckwheat noodle) and UDON(wheat noodle)? forms of restaurants than SOBA and UDON noodle, such as Ramen, Sushi, our franchisees were individual proprietors but they now have difficulty in be developed in Thailand. The Show Kitchen must be a fun, as we can enjoy President Inui : That’s a very good question. Kazokutei can do it, Japanese cuisines, and Teppanyaki, etc. like as their applications. opening shops, mainly due to stricter loan terms and conditions imposed by watching chef’s cooking performance in front of us. Since many Japanese because we have a solid franchise management platform. Otei-chan : It sounds like personal computers! People’s Finance Corporation and banks. So, we have been studying cuisines foreigners are fond of are available, they would frequently visit the Otei-chan : A franchise management platform… Yes, I have heard President Inui : You are right! The concept is same as PC. Franchise large-scale corporate owners with financial strength and have developed a restaurants. I can try Sushi today, Teppanyaki tomorrow, and Tempura the about that. management platform is the axis for our mid-term business plan. Last year, new package for large-scale corporate franchisees. During the second half, day after, and Kushi Katsu to follow. I could visit The Show Kitchen President Inui : You see, a franchise management platform is a chain of we concentrated on the reinforcement of domestic and overseas we concluded 6 contracts and opened 4 shops. everyday! Please open one in Japan soon, too! functions such as development, finance support, training, purchasing & development functions and on the improvement of domestic supervisors Otei-chan : Sounds like a great system, doesn’t it? As large-scale President Inui : The first Show Kitchen restaurant will be established in logistics, sales management, customer management and sales, and brand both in quality and quantity in order to strengthen our platform. That is corporate franchisees increase, franchise network will be expanded more Thailand around August. I will invite you to the restaurant, Otei-chan. management. Without such functions going well, we cannot sustain how we achieved good results. rapidly in Japan. How was overseas business? Otei-chan : Wow! How lucky I am! (Otei-chan looks as if she already franchise operations. Effectively, Kazokutei and “Toku Toku” have built up Otei-chan : You are making the platform stronger. I am pleased to hear started to wonder what dishes to begin with.) Could you tell me how come know how in operating franchise network for more than 30 years. With a that. Now could you explain about FY2011 strategies? Kazokutei has been able to establish such varieties of business in addition strong franchise management platform, we are able to expand into other We opened two shops in China, four shops in Thailand, and one shop in Singapore ■ Mid-Term Business Plan（Reinforce Program of FC Management Platform） During the year 2011, priority issues are brand management led by the head office, strengthening of promotional support by supervisors, and training of overseas supervisors in addition to keeping up the key issues for the previous year.

President Inui : OK. With regard to overseas business, we opened 7 new Former Strategies New Strategies SOBA(buckwheat noodle) and UDON(wheat noodle) with our franchise Applications(Business Formats) partners signed up by 2009. We have established 3 shops in Singapore, 6 Directly Managed FC Soba and Japanese Teppan-Yaki shops in Thailand, 2 shops in China, altogether 11 shops as of the end of Businesses Businesses Udon noodles Ramen? Sushi? Cuisine? Grill? Strengthening Soba and Large sized Expansion in of supervisors’ 2010. In addition, we established a joint venture with KPN Corporation, a corporate rental training Udon noodles franchisees training staff Purchasing Financial Management Sales Brand conglomerate in Thailand, together with Kinrei Corporation in the end of Domestic Development Training and of Business ● Defensive Support Logistics Operations Promotion Management Directly Managed Subsidy ● Support for Expansion of last year and agreed that Kinrei’s Kagonoya chain restaurants will be programs FC Businesses Businesses Businesses Evolution Enlarging New business FC Management Platform (Base) developed in Thailand. We will be the only contact on Japan side providing ● Defensive line franchisees Purchasing Financial Management Sales Brand ● Development of Overseas Development Training and of Business all technical support. We also concluded a master franchise agreement FC Human Support Logistics Operations Promotion Management Resources New training with Somboon Corporation, another Thai conglomerate, and paved a way programs (China, New central kitchens and knowhow for noodles (Thailand) FC ● Franchisee membership ● Consultation on funding Thailand) ● ManagementSVによる of shop ● Proposals for sales ● Planning and implementation ● ● ● Pilot Shops for launching business ● operation by SV expansion and of comprehensive to developing Show Kitchen, the business format we have developed. This Businesses Shop properties Cooking technique Cost saving by 店舗経営管理 ● ● ● Business Forrmats Support for Customer service centralized purchasing ● Checking of taste and promotion brand management ● ● ● 技術指導員による味、 is a new form of Japanese restaurant where guests enjoy watching chef’s Soba and Menus operating fund Shop management and logistics customer service ( Including registration of ● Support for utilization 接客の巡回チェックby itinerant Technical brand name and prevention Udon noodles of subsidies etc. of Knowhow leakage) cooking performance of charcoal-grill, Teppanyaki grill, Sushi, and other Instructors ● Aggressive Soba and Japanese Cuisines “The Show Kushi Katsu Udon noodles “Kagonoya” Kitchen” dishes while eating. Moreover, in order to promote franchise business in Growth

India, we established a joint venture with Abacus Corporation in India. Applications(Business Formats) Otei-chan : How wonderful! There are already 11 overseas shops in

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Interview Inui-san vs. Otei-chan

President Inui : For FY2011, we will basically follow our strategies preparations last year, will open their shops by August or so. In January I would appreciate your continued support. we had last year and further reinforce our policies based on them. Overview of new franchisee package this year, we were given a business license from the Indian government Otei-chan : President Inui, thank you very much for your time in your Specifically, we are going to establish a profitable business structure for for the new joint venture. Based on the joint venture, we will select busy schedule. I will also work hard as campaign girl going the existing business for both directly owned shops and franchise chain ▶ The target market is large-sized franchisee owners of existing major types of restaurants and open pilot shops by summer. In March, we will international. In August, we will send our message from the Show franchise chain businesses including ones other than food service who are restaurants, by achieving more than 100% revenues compared to the send our staff members who will be stationed in India. We are also Kitchen in Thailand. Please look forward to it! (President Inui and uneasy or dissatisfied with the role of their current franchisers. previous year and by controlling costs. We are also planning to develop ▶ The package is based on a win-win business model. targeting to conclude 3 more master franchise agreements by the end of Otei-chan kept on their heated discussion on what they should try first new shops including 15 directly owned shops and 40 franchise tie-up (The common goal of increasing sales at shops is shared.) this year. at the Show Kitchen.) Franchisee contracts guarantee franchise business expansion by operating shops. Among them, 13 will be large-scale corporate franchisee shops. ▶ Otei-chan : Good work, Kazokutei! Keep it up! multiple shops in a certain region. Otei-chan : Full scale development by large-scale corporate President Inui: Thank you. In order to reinforce franchise management The end of interview “Regional management concept”(5～6 shops) franchisees. Will start in full swing, won't it ? ▶ Our support for shop management such as supervisors’ continuous platform, we will especially tackle with brand management by the President Inui : That’s right! When it comes to overseas business, consulting services and system such as loaning active shop managers, etc. franchiser, reinforcement of sales support by supervisors, and training Kagonoya and The Show Kitchen, for which we made a lot of of overseas supervisors. Otei-chan : You are making franchise management platform more consolidated as an axle for mid-term business plan. President Inui : Definitely. Based on such strategies, we are planning ■ Mid-term Business Plan: Number of shops 2010 - 2015 to achieve 10 billion Yen of revenues, 530 million Yen of operational

（Number of shops） profits, 560 million Yen of ordinary profits, and 230 million Yen of net profits for the year. 500 Period ending in December 2015 Number of Otei-chan : 10 billion Yen sales! Go for it, 450 shops Number of shops 621 shops Shops in Japan Kazokutei! President Inui, Could you wrap up this interview? 400 2.6times In Japan ： 435 Overseas ： 186 435 shops Tie-up President Inui : OK. It’s been 5 years since I became 350 the president of Kazokutei. As we are at a critical juncture, 300 I would like to accelerate transformation at Kazokutei and achieve satisfactory result. 250 Franchise： 295shops Overseas shops 200 186 shops 150

100

50 Directly-Managed： 140shops 0 December December December December December December 2010 2011 2012 2013 2014 2015 (Actual)

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Start of overseas expansion

Kazokutei makes the world to smile, starting from Asia, and to the whole world The record of our overseas openings In 2010, we opened two shops in Shanghai, China in March and April, starting franchise chain business in China on a full scale. In addition, we opened 4 shops in ailand, in July, August, and September, followed by the third shop in Singapore in October. us, the number of overseas shops has totaled 11. Moreover, a joint venture was established in India with Abacus Corporation to promote franchise chain By the end of 2010, 11 shops, mainly in SOBA(buckwheat noodle) and UDON(wheat noodle) lines were opened. restaurants specialized in Japanese cuisine in India. Another joint venture was also established with KPN Corporation, a conglomerate in ailand, and master franchise agreement was concluded with Somboon Corporation, another ai conglomerate. is way, Kazokutei has been progressing steadily with its overseas business. Franchise agreement was concluded with Oishi Group Public Company Limited in June 2009. 6 shops Five buckwheat and wheat noodle shops were opened. 3 shops out of 5 were established in 2010. in Thailand One more shop, in Kushi Katsu line, was opened in 2010. Our overseas shop opening projection, starting this year

Already opened To be opened Russia Target: The number of shops to be opened in the next 5 years

India (Established a Joint Venture Company（January, 2011）) China A joint venture was established with Want Want Group, a major food company based in 2 shops (Target: 200 to 300 shops) in China Canada Taiwan in December 2009. Two SOBA and UDON noodle shops were opened in 2010

Vietnam Thailand (Target: 30 shops)

Australia

Basic policies for overseas business Franchise agreement was concluded with Japan Foods Holding PTE Ltd in June 2008. 3 shops Studying to open shops in soba and udon noodles and other business categories Singapore Three SOBA and UDON noodle shops were opened. One of them was established in 2010. in Singapore (Target: 20 shops) Target customers : presently growing middle income class in each local market. Business formats/menu : Initially, we are planning to start mainly with Udon and Soba noodle shops, but will not confine ourselves to this area of business. As for the taste of dishes, we will basically use our original recipes, while also adjusting to local tastes. Price : Affordable prices for our target customers. Procurement : Because imported materials are generally expensive, we will mainly purchase materials locally, depending on the situation of each country. We will build our own procurement Indonesia and logistic system. We will utilize centralized kitchens to effectively manage our brand.

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家族亭のすべてがわかる！

Kazokutei provides Japanese cuisine. Initial membership fee * The amounts below are given in Japanese yen. Affiliating A type : From JPY35,000,000 to JPY50,000,000 We are searching for overseas fee (To be determined considering a market size and other factors.) You will have a local headquarters and be given exclusive membership rights for a specific country or region. B type : JPY10,000,000 business partners that This is an ordinary membership with no exclusive rights.

Marketing JPY1,000,000 can share our philosophy. investment fee - To study your competitor and cover the various costs that will be incurred in creating your business plan ,earning and expenditure model plan. (The actual fees for this investigation include travel and accommodation costs, charged separately.) * The marketing investment fee pays for evaluating your eligibility for membership, and is non refundable, even if you are not invited to become a Support available before you sign an FC contract member, or choose not to. Shop design JPY800,000 We will give you an overview as well as the details of fee (travel and accommodation costs for local meetings are charged separately) our system for running a Kazokutei franchise chain Instructions business and ask you, as a potential member, about Training JPY1,000,000 your requirements. fee - Covers two weeks at Kazokutei traning facilities and restaurants in Osaka,Japan and our staff at your side for four weeks before and after you open your own restaurant. After carefully looking into what advantages you have Our research Plan creation - Use of the English version of both Food preparation manual and customer service manual. Support in starting and what problems need to be resolved in order to We study the local market conditions, including Based on our local marketing study, we will create a business plan, - More traning days can be provided at an additional charge. your business develop your business, we will suggest a business your potential competitors and various costs. determine the initial investment amount required, establish earnings and expense models, and provide you with the technical details you need to get - All travel cost to Japan and supervisors sent from Kazokutei to your side will be charged separately. model to you, while you are still a candidate member. started.

After you have thoroughly examined, understood and - The cost of obtaining the restaurant premises, interior and exterior improvements, cooking facilities, and the cost of other needed equipment Other costs Concluding the agreed to our proposed business plan, we will create will be separate. contract an FC member contract for you. Support for starting, maintaining, and expanding your business

We give you lots of support so you can start up your Start-up know-how Running costs Support for starting business smoothly. your business Training Procurement You will receive training at Kazokutei headquarters in Establishing foodstuff procurement lines and Royalty 5% of gross monthly sales Osaka, Japan and at your side. distribution routes. Local preparation for opening a restaurant, aid and Food preparation Operating a restaurant Opening a instruction on how to operate after opening. - You will receive support for starting a central - Developing restaurant managers, cooks, and support staff. kitchen, if necessary. - Help establishing a PC based operating management restaurant - We help you identify the tastes, menus, and cooking system. methods that are suitable for your local customers. - Our supervisors help you develop a management system.

We fully support you to stabilize your business by Know-how to help you expand your business or recover from poor business Support to stabilize having our supervisors make periodic visits, and by Training Procurement the business making continuous checks on each operation. Kazokutei has the English website so that people We offer ongoing training so you can keep improving How to maintain your current suppliers and develop your business skills. new sources. overseas can fully understand our FC Business. Support for increasing the number of restaurants, Food preparation Restaurant management Support for expansion expanding the range of restaurant locations, and - Installation of a central kitchen. - Instructions about how to start up a new restaurant. - Maintaining current menus and developing - Analysis of business at a slow location, with help http://www.kazokutei.co.jp/en and recovery improving business at slow restaurants. new menus. from our supervisors to develop a recovery plan. - Re-education of restaurant staff.

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Introduction of our restaurants and shops

Directly-managed businesses

We always keep on improving our taste and services as a leader in our group. Offering new-style Udon dishes targeting at young generation and ladies.

Kazokutei Kazokutei 64 years of business with Udon no U superior hospitality and service We offer with a bright smile. new-style Udon dishes.

Modern restaurant where creative and seasonal dishes are served in a soothing atmosphere.

Kashun an Genmyowaraku Using stone mill in our restaurant, we serve fresh soba noodles with Soba restaurant rich aroma for you. with fashionably modern design.

Izakaya (Japanese style bar restaurant) where you can enjoy authentic soba dishes.

We improve the taste and services at “Kazokutei” Nokiba Kyousai format shops as a leader in our group. You can taste modern creative Soba dining spot where you soba dishes and sake. can enjoy tasty sake. 64 years since establishment, we at Kazokutei have been offering superior hospitality and service with a bright Upper-grade Soba restaurant where you can enjoy seasonal tastes. smile. Our speciality SOBA can be tasted even to "SOBA-YU" (the water where SOBA was boiled in.) We prepare the SOBA by "grinding, kneading and boling" “With the establishment of a shop in Plaza Singapura, a big with great delicacy and care, shopping center in Singapore, Sanbouan Kyou shun the number of overseas shops serve it to our customers Traditional orthodox upper In our restaurant, we show turned out to be 11.” grade soba restaurant that inherits performance of making real hand with our whole heart. Kazokutei's original taste. made soba noodles.

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お店紹介

Directly-managed and franchise businesses

Suburban shops that are popular for their rich variety. Shops located in office building blocks.

TokuToku TokuToku Middle-to-large sized restaurant Small-sized shops along the arcaded on road sides mainly serving Udon. street and inside buildings. (Mainly corporate franchisees) (Mainly private franchisees)

TokuToku Self-service noodle shops on road-side. Self-service noodle shops in food courts.

TokuToku Self Type Middle-to-large sized TokuToku self-service noodle shops Small-sized self-service on road sides. noodle shops in food courts. (Private and corporate franchisees) (Private and corporate franchisees)

It has a variety of dinner menus and its warm homemade dishes are popular. Casual shops with substantial dishes at reasonable prices.

With a wide choice of selections, customers Oteichan Shops in office buildings located in Kazokuan commercial districts We serve authentic Soba can enjoy varieties of traditional udon. or in front of stations. with reasonable prices. (Private and corporate franchisees) (Private and corporate franchisees) We would like our customers to get toku (beneﬁt) by enjoying delicious dishes while we would also like to Shops with high value added kyoto-style dishes and udon, jointly developed with Kinrei Corporation. share the joy of our customers. "Toku Toku" with this concept has developed its directly-managed shops and FC shops We have established Kasama Seimenjo (Noodle across Japan as an authentic Making Factory) based on our partnership Udon-dish restaurant where in“Kasama Terrace,” or Kasama parking Fu fu ya area of Kita-Kanto Expressway. Middle-to-large sized road side shops Kyomen gion customers can enjoy the original designed like a traditional Medium-sized shops for shopping *Kasama Seimenjo is a tie-up business merchant house in Kyoto. centers and inside-building locations. with NEXCO East Japan Group. daintiness of Udon. (Mainly corporate franchisees) (Mainly corporate franchisees)

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Shop list （94shops as of February 28, 2011） The newest information of shops is shown at our website. Kazokutei OSAKA NARA CHIBA TOKYO

Nokiba Tennoji shop Tennoji Mio 11F Naragakuen-mae shop Kintetsu Gakuen-mae station ParadiⅡ 4F Udonno Nagareyama Nagareyama Otakanomori S・EC3F Kashun-an Ebisu shop Atre Ebisu 6F Otakanomori shop Nokiba Minoo shop Minoo Market Park Visola EAST2 Kashun-an Musashi Murayama Aeon mall Musashi Murayama Myu 1F shop Nokiba Kyobashi shop Kyobashi Coms Garden B2F Sin-Urayasu shop Atre Shin-Urayasu 2F Umeda-chikagai shop Whity Umeda North mall1 HYOGO Tsudanuma shop Ito Yokado Tsudanuma store 7F Genmyo-waraku Oimachi shop Atre Oimachi 6F Minami Kashiwa shop Fields Minami Kashiwa mallⅠ4F Ogikubo Sanpoan Ogikubo Lumine 5F Umeda Hankyu sanbangai shop Hankyu Sanbangai Minami-kan B2F Nokiba Hanshin Nishinomiya shop Under the elevated railroad of Hanshin Nishinomiya Umeda Hankyu grand bldg. shop Hankyu Grand Bldg. 28F station (South side) Inage shop In Frespo Inage, north of Chiba sports ground Udonno Meguro shop Atre MeguroⅠ5F Kyosai Shiodome shop Shiodome City Center B1F Umeda Navio shop HEP Navio 6F Udonno Mint Kobe shop Mint Kobe 7F Kyosai Meguro shop Atre MeguroⅡ 2F Umeda Yodobashi shop Yodobashi Umeda Bldg. 8F Hanshin Amagasaki shop In the Amagasaki chuo shopping district, north of Umeda Chayamachi shop Umedachayamachi Applause Tower B1F Hanshin Amagasaki station SAITAMA Kyosai Kinshicho shop Marui Kinshicho store7F Ikebukuro shop Tobu Spice 12F Noda Hanshin shop Wiste 4F, in front of Hanshin Noda station Hankyu Sonoda shop Hankyu Sonoda station Sonoda Hankyu Plaza 2F Kyosyun Urawa shop Isetan Urawa store 7F Shibuya shop Shibuya Tokyu Plaza B2F Esaka shop Esaka Tokyu Bldg. B1F Kawanishi Noseguchi shop East of Hankyu Kawanishi Noseguchi station concourse Ageo shop Haricots Verts Maruhiro 6F Hibiya shop Hibiya Chanter B2F Senri-chuo shop In front of Osaka monorail Senri Chuo station Sannomiya shop Under the elevated railway of Hankyu Sannomiya station Shiki shop Marui Family Shiki 8F Hankyu Yamada shop Hankyu Yamada station Dew Hankyu Yamada 2F (North side) Soka shop Marui Soka store 8F Korakuen shop Metro M Korakuen 5F Kamata shop Kamata Tokyu Plaza 7F Osaka Business Park shop OBP Cristal Tower B1F Sanchika shop North of Sanchika subway Kaigan line concourse Omori shop Atre Omori 5F Tsurumi shop Aeon mall Tsurumi Leafa 4F Shin-Kobe shop Shin-Kobe Oriental Park Avenue 3F Tachikawa shop Granduo 6F Hirakata shop Foleo Hirakata 1F Kobe Asahi Bldg. shop Kobe Asashi Bldg. 2F Hachioji shop Hachioji Now 9F Moriguchi shop Keihan Department store 7F Life Kobe-ekimae shop Life Kobe ekimae store 1F Kashun-an Musashikoganei shop Ito Yokado Musashikoganei store 1F Nanba Walk shop Nanba walk Ichibangai Minami street Kobe station chikagai shop JR Kobe station Duo Kobe Hamanote New shop Nakano Sanpoan Nakano Mile 5F Nanba Minatomachi shop OCAT mall 5F Maitamon shop Blumer Maitamon 2F Suminoe shop South of Subway Suminoe-koen station entrance Nishijin Chuo shop Plenty Senmonten Nibankan 1F, Subway Nishijin Chuo station Sakai Higashi shop Sakai Takashimaya S.C.UPru B1F Aeon Kobe Kita shop Aeon mall Kobe Kita 1F Ibaraki shop 200m north of Fudo Suita-Takatsuki line Ibaraki Police station Hankyu Ibaraki shop Hankyu Ibaraki-shi station Rosavia 2F SHIZUOKA SINGAPORE Takatsuki shop Takatsuki Matsuzakaya 5F Hamamatsu May-one shop Hamamatsu Terminal Bldg. May-one 7F New shop Praza Singapura shop Hankyu Takatsuki shop Under the elevated railroad of Hankyu Takatsuki-shi station (Osaka side)

Hankyu Okamachi shop Under the elevated railroad of Hankyu Okamachi station (Toyonaka side) IBARAKI KANAGAWA THAILAND

Ikeda shop West side of Hankyu Ikeda station concours Udonno Loc City Moriya shop Loc City Moriya SC 1F Kashun-an Yokohama Bay quarter shop Yokohama Bay Quarter 5F Central Pinklao shop (Bang kok) Izumisano shop Shoppers' mall Izumisano 1F Yokohama Sanpoan Sky Bldg. 10F Grass Thonglor shop (Bang kok) Banpaku Oyuba shop Senri Banpaku-koen 11-11 Udonno Lalaport Yokohama shop Lalaport Yokohama 3F Central Plaza Rama3 shop (Bang kok) Kohoku Center Kita shop North Port mall 5F PALADISE PARK shop (Bang kok) Kanazawa Hakkei shop Daiei Kanazawa Hakkei store 3F New shop Nawamin City Avenue shop (Bang kok) Kawasaki shop Kawasaki Chikagai Azelea Minami 4bangai New shop Osaka Kushiya Kushikatu Senmon shop (Bang kok) KYOTO Mizonokuchi Sanpoan Nocty Plaza1 9F Kyoto Nishioji shop Jusco Rakunan store 2F CHINA Keihanna shop APiTA TOWN Keihanna CTower 1F HOKKAIDO Shi men yi lu shop (Shanghai) Sapporo Stellar Place shop JR Tower Sapporo Stellar Place 6F Yu yuan shop (Shanghai) Sapporo shop Marui Imaihonten Shinkan 10F Kashun-an Nissay Sapporo Building shop Nissay Sapporo Building B1F * Please refer to “Start of overseas expansion” on Page 9 & 10 for further. details.

17 SHOP LIST SHOP LIST 18 家族亭 P19-20

Shop list （133shops as of February 28, 2011） The newest information of shops is shown at our website.

TokuToku OSAKA KYOTO NARA GIFU IWATE

Izumisano Ichiba Nishi shop Ichiba Nishi 3-6-8, Izumisano-shi Fushimi-takeda shop Takedanakagawara-cho 1-4, Kashihara shop Hokkeji-cho82, Kashiwara-shi New shop Gifu Yoro shop Funatsuke 15-1, Yoro-cho, Yoro-gun Kitakami shop Kurosawajiri 3-1-1, Kitakami-shi Fushimi-ku, Kyoto-shi Sakai Kurotuchi shop Kurotuchi-cho 2267-4, Sakai-shi Gosho shop Oaza Higashi Matsumoto 125, Gosho-shi Kyoto Rakusei shop Ooenakayamacho 2-155, Saikyo-ku, Sanjo Soegawa shop Sanjo Soegawa-cho 5-28, Nara-shi Oonoshiba shop Oonoshiba-cho 136-1, Naka-ku, Sakai-shi Kyoto-shi Nishiyamato shop Nakayamadai 2-1-10, Kawai-cho, Settsu Torigai shop Torikaiue 4-2-18, Settsu-shi Fushimi-shimotoba shop Nekoya-cho 43, Fushimi-ku, Kyoto-shi Kitakatsuragi-gun TOCHIGI MIYAGI Higashi Osaka Hishiya Amenity Santorini 2F, Hishiya Higashi Maizuru Nishi shop Koaza Ihara 140-1, Aza Tenri Bessho shop Bessho-cho 12-2, Tenri-shi shop 2-16-13, Higashi Osaka-shi Kamiyasuhisa, Maizuru-shi Ustunomiya Ikegamicho Nakasato Tenpo 1F, Ikegami-cho 2-7, Natori Bypass shop Aza Yanagida 397-1, Masuda, Natori-shi Tawaramoto shop Touko 64-4, Tawaramoto-cho, Shiki-gun Tanimachi shop Uchihon-machi 1-4-3, Chuo-ku, Osaka-shi Fujinomori shop Sujikaibashi 2-423, Fukakusa, shop Ustunomiya-shi Fushimi-ku, Kyoto-shi Foleo Town Tsutsui shop Foleo Town Tsutsui nai, Tsutsui-cho Minoo shop Nobre Villa 1F, Minoo 6-4-1, Minoo-shi 531-1, Yamato-koriyama-shi Kyoto-yawata shop Yawata Suihaku28, Yawata-shi Abiko Karita shop Kitano Mansion 1F, Karita 7-12-19, Toku Toku Life Life Gakuen-mae store 1F, Kisshoin shop Kisshoin-miyanonishi-cho 4-1, FUKUSHIMA Sumiyoshi-ku,Osaka-shi Gakuen-mae shop Nakatomigaoka3-3, Nara-shi Minami-ku, Kyoto- shi TOKYO Kashiharatokiwa shop Tokiwa-cho 367, Kashihara-shi Korien shop Kansouzuka 3-6, Neyagawa-shi Toku Toku Rokujizo shop Itoyokado Rokujizo store B1F, Toku Toku Funehiki Park Funehikimachi Funehiki Harada 9, Izumiya koryo-cho shop Abe 214-3,koryo-cho,kitakatsuragi-gun Minamimori-machi shop Shin Nihon Tenma Bldg., Higashi Rokujizo Naramachi 67-1, Uji-shi Nerima Heiwadai shop Urushibara Green Mansion, Heiwadai Shop Tamura-shi Tenma 1-10-12, Kita-ku, Osaka-shi New shop Kashiharamagarikawa shop Magarikawa-cho 7-8-1, Kashihara-shi 4-1-1, Nerima-ku Itabashi Nishidai shop Ishida Mansion, Nishidai 2-39-5, Kawachi Nagano shop Nishinoyama-cho 5-20 Kawachi Nagano-shi Itabashi-ku Toku Toku Seimen Kotobuki-cho 3-23-2 Higashi Jujo shop Chiba Bldg, Kamijujo 3-22-8, Kitaku NIIGATA Kishidado shop osaka-shi SHIGA Kitakoiwa shop Kitakoiwa 2-32-11, Edogawa-ku Zenya Makino shop Makinohoncho 1-1-98 Maikata-shi Hinotoyota shop Asahigaoka 1-22-40, Hino-shi Toku Toku Kumawatari 2035-23, Aga-machi, Kusatsu shop Noji-cho 1069-1, Kusatsu-shi AganogawaSA shop Higashi Kanbara-gun Kadoma shop Honmachi 43-43, kadoma-shi New shop Okachimachi shop Taito 3-44-6, Taito-ku Omi-hachiman shop Horikami-cho 208-5, Omi-hachiman-shi Kita-cho shop Kita-cho 1112-1, Nagaoka-shi Suminodo shop hamamachi 9-15, Daitou-shi Mizuguchi shop Higashi Nazaka 288-1, Shiki shop Shiki-cho 3-25, Yao-shi Mizuguchi-cho, Koga-shi Senboku shop Obadera 813-2, Minami-ku, Sakai-shi Ritto shop Ogaki 3-26-1, Ritto-shi FUKUI Komyouike shop Combox Komyouike 1F, Murodo-cho KANAGAWA CHIBA 824-36, Izumi-shi Tsuruga-honmachi shop Honmachi 1-12-19, Tsuruga-shi Wakasa Takahama shop Aza Kyogahana, Miyazaki35, Toku Toku Kohoku North Port mall 3F, Nakagawachyuo Kashiwa・Hananoi shop Hananoi 712-8, Kashiwa-shi Kazokuan Awaji shop In a shopping district west of Hankyu SHIMANE Takahama-cho, Oi-gun Center Kita shop (SELF) 1-25-1, Tuzyki-ku, Yokohama-shi Toku Toku Mallage Kashiwa 2F, Oyamadai 2-3, Awaji station concourse Tsurugamine shop Tsurugamine 2-2-1, Asahi-ku, Mallage Kashiwa shop Kashiwa-shi Yokohama-shi Otei-chan Takami shop Inside the Takami Floral Town in Shinhamada shop Power City Hamada nai, Shufu-cho New shop Minaminagareyama shop Minaminagareyama 7-32-3, Konohana-ku i-61-1, Hamada-shi KOUCHI Kazokuan Totsuka shop Totsuka-cho 16-1, Totsuka-ku, Ngareyama-shi AICHI Yokohama-shi Kazokuan Tenjinbashi5 shop East of the Tenjinbashisuji-shopping Kagamigawa Ohashi Kitashinden-cho 18-28, Kochi-shi street crossroads Minami shop Tokai shop Kenmaku 9-1, Arao-machi, Tokai-shi SAITAMA Kazokuan Noda shop Yoshino 3-1-39, Fukushima-ku, Osaka-shi HIROSHIMA Nangokuai shop Osone Otsu 872-3, Nangoku-shi Okazaki Midorigaoka shop Midorigaoka 3-8-6, Okazaki-shi Suzaki Oma shop Oma Higashi-machi 107, Suzaki-shi Minami Anjo shop Kyone 25-2, Jojo-cho, Anjo-shi NAGANO New shop Sakaisuji Honcho shop Minamihoncho 1-7-15, Chuo-ku, Higashiurawa shop Higashiurawa 5-2-6, Midori-ku, Saitama-shi Osaka-shi Hiroshima Gion shop Nishihara 1-10-3, Asa Minami-ku, Hidaka shop Iwameji 727-2, Hidaka-mura, Takaoka-gun Okazaki Mutsumi shop Aza Ikeda Ko 38, Doi-machi, Okazaki-shi Asaka Hizaori shop Hizaori-cho 1-5-15, Asaka-shi Hiroshima-shi Haruno shop Hirookashita 3418-1, Haruno-cho, Nishio shop Nagayoshi-machi 1-35, Nishio-shi Komoro shop Ko 16-13, Komoro-shi Kameya Omiya shop Takahana-cho 1-112-2, Omiya-ku, Saitama-shi Agawa-gun Okazaki Honjuku shop Aza Shiro-yashiki 21-1, Honjuku-cho, Kikyogahara shop Takaide 1486-750, Hirooka, Shiojiri-shi Seto shop Seto 1-2-67, Kochi-shi Okazaki-shi Habasaka shop Habasaka-cho 2351-24, Iida-shi Kumagaya shop Kamino 647-1, Kumagaya-shi Nakamura Higashi-machi shop Higashi-machi 3-5-6, Nakamura-shi Okazaki Iga shop Iga-cho 7-71-1, Okazaki-shi Iida-Kiribayashi shop Kiribayashi 1737-1, Iida-shi Kyomen Gion Aeon Lake Aeon Lake Town Kaze Tower3F Town Koshigaya shop Kochi-kita shop Higashi Taisen-ji 120-1, Kochi-shi Shin Gamagori shop Midori-machi 414-123, Gamagori-shi Matsumoto Namiyanagi shop Idegawa 3-10-15, Matsumoto-shi HYOGO EHIME Takasu shop Takasu997-1, Kochi-shi Handa shop Yanabenakamachi 1-11-1, Handa-shi Minami-wada shop Oaza Wada 4462, Matsumoto-shi Kochi Asahi shop Higashikawahara 226, Motomiya-cho, Kariya shop Tsukiji-cho 2-13-11,Kariya-shi Toyoshina shop Minami-hodaka 578-1, Toyoshina, Tatsuno shop Yokka 52-6, Tatsuno-cho, Tatsuno-shi Imabari shop Ebisu-cho 2-4-1, Imabari-sh Kochi-shi Tokunoya Kamisotone 47-4, Azumino-shi SINGAPORE Gakuen Minami shop Autobacs Gakuen Minami store Parking Lot, Imabari Bypass shop Haccho Higashi 6-5-30, Imabari-shi Aki shop Tsukumo-cho 2553-1, Aki-shi Toyota-Wakabayashi shop Wakabayashihigashimachi,Toyota-shi Kozukadai 868-1038, Tarumi-ku, Kobe Matsuyama Kume shop Kume Kubota-machi 844-1, Matsuyama-shi New shop Hoshigaoka shop Inoue-cho 77, Chikusa-ku, Nagoya-shi TAMPINES shop Mukonosho shop Mukonosho 5-14-2, Amagasaki-shi Toyo shop Mitsuya Minami 6-19, Saijo-shi New shop Nagoyaubakoyama shop Ubakoyama 2-6-11, Midori-ku, Liang Court shop Itami shop Funabara 2-3-12, Itami-shi Onishi shop Miyawakiko 16-1, Onishi-cho, Imabari-shi Nagoya-shi SHIZUOKA * Please refer to “Start of overseas expansion” Hyogo Yamazaki shop Shounou343-3, Yamazaki-cho, Shiso-shi Niihamagawa Higashi shop Go 2chome, Ko 367-3, Niihamagawa-shi TOKUSHIMA Shimoda shop Higashi Hongo 1-2-1, Shimoda-shi on Page 9 & 10 for further. details. Harima-cho shop 2-824-1Kitahonjo Harima-cho Kako-gun Komatsushima shop Aza Akaishi Minami 1374-1, Koike-cho shop Koike-cho 1576-2, Higashi-ku, Iwaoka shop Iwaoka-cho Furusato 1489-29, Tano-cho, Komatsushima-shi MIE Hamamatsu-shi Nishi-ku, Kobe-shi Kokufu shop Sakurama Aza Todoro 31-1, Hamamatsu-hongo shop Hongo-cho 452, Minami-ku, Hanshin Fukae shop Fukaekitamachi 4-10-11, Kokufu-cho, Tokushima-shi Yokkaichi-shiikuwa shop Takada 796-1, Shiikuwa-cho, Yokkaichi-shi Hamamatsu-shi Higashinada-ku, Kobe-shi Anan shop Motomura 5-1, Nishijimi-cho, Anan-shi Iga Ueno shop Hirano Nishi-machi 79, Iga-shi Hamakita shop Shinbaru 2555-3, Hamakita-ku, Himeji Shikama shop Imazaike 1063, Shikama-ku, Himeji-shi Hokke Otani shop Shin-tsutsumi 9-1, Otani-cho, Tokushima-shi Nabari shop Sekoguchi 213-1, Nabari-shi Hamamatsu-shi

19 SHOP LIST SHOP LIST 20 家族亭 P21-22

The general business situation Financial Highlights

Business progress and results * Due to a change in account settlement term, the 57th period was 9 months from April 1st to December 31st, 2007. The interim period The whole year Then, mid term settlement term for period of 6 months was from April 1st to September 30th, 2007, period of 6 months.

The Japanese economy during the year has been improving in business profit, Corporation, a conglomerate in Thailand and Kinrei Corporation was concluded. We reflecting favorable overseas business conditions mainly in developing economies in then concluded a master franchise agreement with that joint venture company, ▶ Revenue (unit: million yen) ▶ Total asset (unit: million yen) Asia and the economy boosting policies by the government, which have pushed up Eastern Cuisine Corporation. We also concluded with Somboon Corporation, a Thai 7,676 private consumption. However, the future outlook of business has remained without conglomerate, a technical support and trade mark license agreement for The Show 10,000 9,250 8,000 7,574 7,248 7,266 8,955 9,194 6,810 6,859 6,922 clear directions, affected by the lasting employment weakness and increased prices in Kitchen, a new restaurant category we developed on our own. 6,592 8,000 oil and other resources. In the food service industry consumers have taken defensive 6,784 6,000 attitudes in the way of life and orientation for lower prices has persisted in the market. As a result of the above-mentioned sales activities, revenues were increased by 2.7% 6,000 compared to the previous year to 9.194 billion Yen, with operating income increased 4,574 4,471 4,361 4,372 4,000 Under the circumstances we have been able to achieve higher than 100% sale by 31.6% to 342 million Yen and ordinary income increased by 26.7% to 350 million 4,000 compared to the last season on the same store basis in directly operated stores thanks Yen. Net profit for the fiscal year amounted to be 122 million Yen, after deducting 2,000 2,000 to QSC improvement and positive sales promotions such as “Happy Meal Coupon.” On extraordinary losses of 84 million Yen, mainly due to loss on disposal of fixed asset and the other hand, franchise shop sales have been improving, primarily due to sales loss of impaired assets. This represents an increase of 102 million Yen compared to the 0 0 The 57th period The 58th period The 59th period The 60th The 57th period The 58th period The 59th period The 60th promotion supported by us and reinforced supervisor’s guidance for franchisees. In previous term. Interest-bearing liabilities were decreased by 339 million Yen to 1,475 For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended terms of development of domestic franchisees, we made 38 franchise agreements by million Yen compared to 1,814 million Yen in the previous fiscal year. December31, 2007, December31, 2008 December31, 2009 December31, 2010 December31, 2007, December31, 2008 December31, 2009 December31, 2010 the account closed the account closed approaching corporate franchisees in addition to traditional individual franchisees. in 9months in 9months Moreover, we completed a package, which has been prepared from the beginning of As to our forecast of the next year we will not be able to expect any significant this year to develop large-scale franchisees that are corporations having financial recovery in the food service industry as a whole. Those who carry out aggressive (unit: million yen) (unit: million yen) strength, and concluded 6 franchise agreements based on the package. In terms of promotions and price strategies will recover and those who do not will delay in their ▶ Ordinary Income ▶ Net asset sales promotion measures, we have continued our “Respect Senior Campaign” started recovery. Under such circumstances we will target to achieve more than 100% of 400 4,000 3,627 3,656 3,728 3,740 3,719 3,716 3,682 3,788 in the previous year and conducted “Special Happy Meal Coupon,” a sales campaign same store sales compared to the previous year through QSC improvement and 340 350 with prizes including a trip to Shanghai limited to the third quarter in order to motivate positive sales promotion such as “Happy Meal Coupon”. We will also build up strong 300 285 276 3,000 repeated use and attract new customers. In December, we also carried out “Big profit bases by reinforcing cost control. In 2011 we anticipate an increase in market Thanks Festival” at “Toku Toku” restaurants directly owned by the Company jointly prices for flour, buckwheat flour, frying oil, poultry, and eggs, etc. We will absorb 211 200 2,000 with franchise shops in an effort to increase regular customers. The total number of increased cost in above items by cutting down the prices of other food supplies and 150 restaurants was 233 including 114 directly owned shops, 102 franchise chain our overhead cost. In addition, we will try to reduce cost through expanding joint 100 92 1,000 restaurants, 6 tie-up shops, and 11 overseas franchise restaurants as of the end of this procurement activities with other companies. We will also make efforts in our staff 57 year. In terms of directly owned shops there were 7 new openings and 10 closures due training and mid-career recruitment to further secure large-sized corporate franchisees 0 0 to scrapping and changes into FC shops, and we ended the year at 114 in total. In and conclude new overseas franchisee agreements. We expect to achieve 10 billion The 57th period The 58th period The 59th period The 60th The 57th period The 58th period The 59th period The 60th terms of FC business there have been 44 new franchise agreements and 17 new Yen in revenues, 530 million Yen in operating income, 560 million Yen in ordinary For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended December31, 2007, December31, 2008 December31, 2009 December31, 2010 December31, 2007, December31, 2008 December31, 2009 December31, 2010 openings. There have been 17 closures caused by problems of successor availability income and 230 million Yen in net profit for the period. the account closed the account closed and profitability. All together, the total number of franchise chain restaurants was 102 in 9months in 9months as of the end of this year. As a tie up business providing technical support and food For the year ended December 31, 2010 supply, we started to promote from the previous year, we assisted the opening of ▶ Net Profit for this Period (unit: million yen) ▶ Net Profit per Share for this period (unit: yen) Kasama Seimenjo by NEXCO East Japan Group in December. This is the second shop in Total sales 9,194 million yen 200 30 this series following Hanyu Seimenjo established in 2009. In addition, we have got four International business department 1.1% more shops based on tie-up agreement with bistro chains. Altogether, the number of 136 122 19.41 20 17.44 tie-up shops totaled 6 as of the end of this year. As for overseas Japanese food 100 82 restaurants, we opened 1st shop in China in Shimen yi lu, Shanghai, in March, 2nd Toku Toku 11.83 FC business shop in Yu Yuan, Shanghai, in April, 3rd shop in Thailand in Central Plaza Rama III in 28 20 10 department 4.05 2.91 July, 4th shop in Paradise Park in August, and 5th shop in Nawamin City Avenue in 14.1% Kazokutei 0 September. We also opened Osaka Kushiya, a new type of restaurant in Thailand in business △6 △7 0 department △22 △0.86 △1.05 September and Kazokutei 1st shop in Plaza Singapura, a big shopping center in 64.0% △3.17 Singapore, in October. As a result, the number of overseas franchise shops totaled 11 △100 △10 Toku Toku The 57th period The 58th period The 59th period The 60th The 57th period The 58th period The 59th period The 60th as of the end of this year. Moreover, in August we decided to establish a joint venture For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended For the year ended in India with Abacus Corporation and concluded the joint venture agreement in directly-managed December31, 2007, December31, 2008 December31, 2009 December31, 2010 December31, 2007, December31, 2008 December31, 2009 December31, 2010 business department the account closed the account closed December. Also in December, the agreement to establish a joint venture between KPN 20.8% in 9months in 9months

21 BUSINESS REPORT FINANCIAL HIGHLIGHTS 22 家族亭 P23-24

Financial Statements

Balance Sheet (Unit:1,000yen) Profit-and-loss statement (Unit:1,000yen)

Current period Previous period Current period Previous period Current period Previous period Items from January1,2010 from January1,2009 Items from January1,2010 from January1,2009 Items from January1,2010 from January1,2009 to December 31,2010 to December 31,2009 to December 31,2010 to December 31,2009 to December 31,2010 to December 31,2009

Assets Liabilities Sales 9,194,891 8,955,961 Current Assets Current Liabilities Cost of Sales 7,620,548 7,608,919 Cash and Deposits 741,993 479,113 Accounts Payable 469,003 435,498 Gross profit on sales 1,574,343 1,347,042 Accounts Receivable 580,813 440,262 Short-term Loans Payable 110,000 120,000 Selling, General and Administration Expenses 1,232,135 1,086,949 Inventory 178,503 164,383 Long-term Loans Payable within a year 536,976 672,848 Operating profits (or Loss) 342,207 260,093 Others 273,306 257,065 Corporate Bond Mature in a year 20,000 20,000 Non-operating Income 85,436 98,281 Allowance for dobtful debts △3,609 △6,225 Accrued Amount Payable 420,127 361,914 Non-operating Expenses 77,430 81,926 Total Current Assets 1,771,006 1,334,598 Accrued Corporate Tax etc. 121,188 19,797 Ordinary Income (or Loss) 350,214 276,448 Fixed Assets Others 366,720 267,383 Extraordinary Income 817 375 Buildings 4,451,147 4,490,072 Total Current Liabilities 2,044,016 1,897,441 Extraordinary loss 84,029 159,383 Lands 970,735 930,435 Fixed Liabilities Income (or Loss) before Tax in the Current period（quarter） 267,001 117,439 Others 1,048,602 1,033,169 Long-term Loan Payable 758,240 931,870 Corporate Tax etc. 144,387 97,035 Accumulated Depreciation △3,822,050 △3,681,685 Corporate bond 50,000 70,000 Net Income (or Loss) in This period（quarter） 122,613 20,404

Total Tangible Fixed Assets 2,648,435 2,771,992 Others 281,169 243,626 (Note) Numbers less than 1,000yen are rounded off from the amount shown. Total Intangible Fixed Assets 125,258 347,170 Total Fixed Liabilities 1,089,409 1,245,496 Investments in Securities 41,141 42,722 Total Liabilities 3,133,426 3,142,938 Deposits on Lease and Guarantee Money 2,182,615 2,164,791 Shareholders・Equity Others 159,780 201,595 Ownership Capital “Despite the severe Allowance for dobtful debts △6,232 △3,813 Capital Stock 1,465,784 1,465,784 environment of food service industry Investments and Other Assets 2,377,305 2,405,297 Capital Surplus 1,425,506 1,425,506 Total Fixed Assets 5,150,999 5,524,461 Retained Earnings 1,347,544 1,274,147 orientated towards lower prices, Total Assets 6,922,005 6,859,059 Own Shares △13,915 △13,915 we have achieved increased sales and proﬁt (Note) Numbers less than 1,000yen are rounded off from the amount shown. Total Ownership Capital 4,224,919 4,151,522 Total Valuation and Exchange etc. △467,090 △466,150 through positive sales promotions. Share Warrant 30,750 30,750 The total of Assets Total Shareholders・Equity 3,788,579 3,716,121 I believe we all have done The total of Assets was 6.92 billion yen, which was a increase of 62 Total Liabilities and 6,922,005 6,859,059 million yen from previous year end, mainly due to a increase in Shareholders・Equity a pretty good job!” cash, deposits, and accounts receivable. The total of Liabilities The total of Liabilities was 3.13 billion Yen, which was a decrease of 9 million Yen from the previous business year end, mainly due to the decrease in long-term borrowing.

23 FINANCIAL STATEMENTS FINANCIAL STATEMENTS 24 家族亭 P25-26

Stock situation Company Outline

Stock Situations (As of December 31, 2010) Company Outline (As of December 31, 2010) Shareholder memo

Distribution Status of Shareholders Distribution Status of Shareholders Total Number of Authorized shares 14,300,000 shares Company name KAZOKUTEI CO., LTD. Business year From January 1 to December 31 of the year by Number of Shares Owned By Category of Owners

5,000shares or more 10,000shares or more Securities companies Date of establishment April 5, 1951 Date to determine Total Number of shares Issued 7,056,200 shares (Excluding 25,300 Own Shares) 14 people 0.43% 10 people 0.30% 4 people 0.12% shareholdershopceive December 31 92,100shares 295,500shares 1,297shares Major business Operation of restaurants mainly serving Share Unit 100 shares year-end dividend “Soba / Udon”and sales of wholesale foodstuff etc to Owner under Personal Name TOKUTOKU franchise shops Date to determine the 500shares or more 100,000shares or more Financial institutions Number of Shareholders 3,300 1 person 0.03% 172 people 5.21% 3 people 0.09% 9 people 0.27% 25,300shares shareholdershopceive the June 30 88,800shares 4,329,000shares 486,500shares Capital 1,465,784,000yen Principal Shareholders midterm dividend The goverment, Number of 312 ( Others including part-time and contract employees 1,816 ) The situations of the investment Pbulic organizations employees Regular Shareholders Meeting Every March Name of in our company Less Than100shares 50,000shares or more Other corporations 1 person 0.03% Major Shareholders 147 people 4.45% 2 people 0.06% 46 people 1.39% 1,000shares Administrator of the The number of holdings Voting right ratio 298shares 148,700shares 106,500shares Offices shareholder list Head office WAKITA Fujimura Midosuji Bldg. 2F 4-2-14, Fushimimachi, Mitsubishi UFJ Trust and Banking Corporation Limited partnership for investment Chuo-ku,Osaka, Japan Administrative institution for CAS capital fund3 shares % 4,034,000 57.37 TEL +81-6-6227-6030(the main number) special account Unlimited partner CCP3, Inc. FAX +81-6-6227-6040 Address Osaka stock agent department, Mitsubishi UFJ Trust and Banking Corporation The Bank of Tokyo-Mitsubishi UFJ, Ltd 166,000 2.36 Kanto office Higashi-rokugo 1-13-7, Ota-ku, Tokyo, Japan Fushimimachi 3-6-3, Chuo-ku, Osaka 541-8502, Japan TEL: 0120-094-777(Free charge number) Mizuho Bank, Ltd 129,000 1.83 Nishinomiya factory Nishinomiyahama 1-27, Nishinomiya-shi, Hyogo, Japan Listed stock market Jasdaq Securities Exchange, Inc. Kansai factory Torikaikami 2-1-28, Settsu-shi, Osaka, Japan Sumitomo Mitsui Banking Corporation 80,000 1.14 Securities code 9931 Kazokutei employees' holding association 68,700 0.98 Method of public announcements To be conducted electronically 100shares or more 1,000shares or more Individuals or others Corporations Nanto Bank, Ltd 3,238 people 98.12% 43,000 0.61 1,152 people 34.91% 1,800 people 54.55% abroad,etc. URL for public announcements http://www.kazokutei.co.jp 123,900shares 1,977,902shares 6,434,603shares 1 person 0.03% 1,000shares (Public announcements will be published on The Nikkei News Paper when some accidents or other unavoidable causes that prevent the electronic public announcement happen.) The board members and auditors ((As of March 29, 2011)

President Mitsuhiro Inui Auditor full-time Haruo Kawabata ( ) (Note) Shareholder special benefit plan 1.With the computerization of shares, all the procedures related to the change of shareholders' Board member General manager of management Masaki Nishimura Auditor Masaaki Tsubakimoto The presentation periods are April and September. addresses, purchase demand and so on are now dealt with by the account administrative institutions (e.g. Securities Company) where you have your account in principle. Please contact Board member General manager of product Kazuaki Irie Auditor Kouichi Kusao the Securities Company, etc where you have your account on that matter. Please be advised Meal coupons worth 6,000 Yen (500 Yen x 12 coupons) or products of our company of that the administrator of the stockholder list (Mitsubishi UFJ Trust and Banking Corporation) is General manager of new business Nobuyuki Hirose Board member Nobuo Miki Auditor equal value will be given to shareholders having more than 1,000 shares as of the base not able to handle these issues. dates of December 31 and June 30 each year. In Board member General manager of international business Yoichi Uchiyama 2.As for the procedures related to the shares recorded in the special account, contact the addition, meal coupons worth 3,500 Yen (500 administrative institution for special account (Mitsubishi UFJ Trust and Banking Corporation). General manager of Directly-Managed Yen x 7 coupons) will be given to shareholders They can also be handled at main and branch offices of Mitsubishi UFJ Trust and Banking Board member Businesses Shinichi Kasa having between 500 and 999 shares, along sample Corporation in Japan. Board member Yasuharu Kibayashi with meal coupons worth 1,000 Yen (500 Yen x 3.Dividends not yet received are paid at main and branch offices of Mitsubishi UFJ Trust and 2 coupons) for shareholders having between Banking Corporation. Board member Nobukazu Sawamura 100 and 499 shares. The newest information of Shareholder special benefit etc. is shown at our website.

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