ANNUAL REPORT 2019 TORIDOLL Holdings Corporation CONTENTS

02 CORPORATE PHILOSOPHY 03 MESSAGE FROM PRESIDENT 04 FINANCIAL HIGHLIGHTS 06 GLOBAL PRESENCE 07 CORPORATE STRATEGY 09 FLAGSHIP BRAND 11 OUR BRANDS IN JAPAN 13 OUR BRANDS WORLDWIDE 16 LIFESTYLE BUSINESS 17 M&A 18 HISTORY 19 SOCIAL INITIATIVES 20 CORPORATE GOVERNANCE 22 MANAGEMENT DISCUSSION & ANALYSIS 24 CONSOLIDATED FINANCIAL STATEMENTS 28 COMPANY OVERVIEW 29 INVESTOR INFORMATION

01 CORPORATE PHILOSOPHY

02 MESSAGE FROM PRESIDENT

“Delicious” has no borders The passion for food is what made me start my business. An appetizing aroma that stirs the appetite, the master chef’s amazing culinary skills, the heat from the kitchen as food is being prepared in front of you… all of these elements come together to create a “deliciousness” that is experienced (enjoyed/appreciated) with all the five senses instead of just with your tongue… It is our desire to bring this passion for food to as many customers as possible, and our mission is to spread it to the entire world. With each bite we want you to smile and think, “This is delicious!” We don’t speak the same language, but our customers’ smiles tell us their emotions. We, at TORIDOLL, are proud to be a company that continues to cherish these values. With our commitment to world-class hospitality, we will develop business models that respect the cultural and regional differences of each country. With our origins in Japan, we aim to become a leading global company in the restaurant industry. I believe we can open up a future of unlimited opportunities in the global market.

Takaya Awata President & Founder TORIDOLL Holdings Corporation

03 FINANCIAL HIGHLIGHTS Years Ended March 31, 2019.

TOTAL TRADING TRANSACTIONS

Other Brands 13.2% (Billions of yen)

Overseas Brands 20.9% Total trading transactions 145.0 145.0 billion YEN billion YEN TONICHI 2.7%

TORIDOLL 1.3% MARUGAME SEIMEN 62.0%

NUMBER OF STORES

(Stores) Number of restaurants outside Japan 1,600 Number of restaurants in Japan

1,400

Number of stores 1,200 1,678 1,000 STORES 800

600

400

200

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

*Figures for fiscal 2014 and fiscal 2015 represents net income attributable to owners of the parent company, while International Financial Reporting Standards has been introduced from fiscal 2015.

04 FINANCIAL HIGHLIGHTS Years Ended March 31, 2019.

2015 2016 2017 2018 2019

IFRS IFRS IFRS IFRS IFRS

For the year (Millions of yen) Total trading transactions 87,294 95,587 101,779 116,504 145,022

Cost of sales (22,309) (24,105) (26,216) (30,860) (39,117)

Gross profit 64,986 71,482 75,563 85,644 105,904

Selling, general and administrative expenses (58,605) (62,347) (66,280) (77,685) (98,634)

Operating profit 4,175 8,733 8,619 7,635 2,302

Profit for the year 2,011 5,242 5,585 4,663 221

At year end (Millions of yen) Total assets 59,019 57,793 64,011 111,525 117,833

Total equity 25,359 30,872 35,006 37,470 35,003

Per share data (Yen) EPS 48.84 120.56 129.89 107.44 6.22

BPS 586.10 692.48 788.44 834.13 798.02

Cash dividends 10.00 24.00 26.00 26.50 1.50

Major indicators (%) Equity ratio 42.9% 51.9% 53.4% 32.5% 28.8%

ROE 9.1 18.9 17.5 13.2 0.8

PER 34.1 18.8 18.6 36.0 433.8

Payout ratio 20.5 19.9 20.0 24.7 24.1

*The Company Group has applied International Financial Reporting Standards (IFRS) starting from the consolidated year ended March 31, 2015. *Figure for the previous year is also disclosed adhering to IFRS.

05 GLOBAL PRESENCE

Our multi-portfolio strategy to reflect diverse regional food cultures. Opened 1,718 restaurants globally *As of July 30, 2019.

40 24 STORES STORES Japan

22 55 STORES 68 1,117 STORES STORES STORES 38 STORES Other Asia countries 70 35 STORES STORES Hong Kong Malaysia 126 66 STORES STORES 57 STORES

NUMBER OF STORES IN MAJOR COUNTRIES AND REGIONS

Japan 1,117

Hong Kong 126

China 68

Malaysia 66

Indonesia 57

Taiwan 35

Other Asia countries 70

Portugal 38

UK 24

Other European countries 22

USA 55

Other countries 40

0 20 40 60 80 100 120 (Stores)

06 CORPORATE STRATEGY

MID TO LONG-TERM VISION

NEXT LIFESTYLE INCUBATOR Started out as a restaurant company evolving into a global lifestyle company

Restaurant Health care NEXT LIFESTYLE INCUBATOR

HomemadeHomemade meals,meals, BeautyBeauty take-awaytake-away CosmeticsCosmetics

MID-TERM GOAL

We aim for consolidated net sales of 4.6 billion $, North America with 6,000 restaurants worldwide 1,000 stores 0.9 billion $ *The exchange rate as of July 31, 2019.

Japan 2,300 stores 2.1 billion $

Europe & Central & Middle East Asia South America 500 stores 2,000 stores 200 stores 0.3 billion $ 1.2 billion $ 0.1 billion $

07 CORPORATE STRATEGY

BUSINESS STRATEGY

Establish a cycle of creating new businesses and expanding the business base to exploit our existing business base

Domestic Overseas restaurants restaurants Health care Beauty

TONICHI

BANPAIYA

The business base of

Further growth of Creation of our business base a new business base

Existing main business

THE BUSINESS BASE

With our concept of “freshly hand-made”, we achieved rapid growth. As a result, we developed unique strengths NEW BUSINESS

RESTAURANT

Operation Product Development Restaurant Development Corporate Culture Procurement Forming a trinity with the producer Turning inefficient into efficient 100 restaurants annually Overwhelming volume and the manufacturer Passion and speed

08 FLAGSHIP BRAND

MARUGAME SEIMEN TORIDOLL Group’s flagship brand, MARUGAME SEIMEN, is a self-service restaurant chain specializing in Sanuki . Since its first restaurant opened in Japan in November 2000, MARUGAME SEIMEN has been committed to serving the tasty, genuine “freshly handmade” udon. With a machine installed at each restaurant, we make the best dough each day from carefully selected domestic wheat, and water. Fresh are cooked right away for “freshly kneaded and boiled taste”. By cooking in front of our customers in an open kitchen, we aim to create an authentic restaurant with the ambience of a noodle-making factory in Kagawa prefecture, home of Sanuki udon. Today, MARUGAME SEIMEN has become a popular brand that is supported by many customers young and old, totaling more than 150 million people a year. Since our establishment, we have steadily expanded our restaurant network, reaching about 800 restaurants in all prefectures, and we are actively expanding not only in Japan but also around the world. With a reach unsurpassed by other companies, we have the absolute No.1 position in the udon industry, both in sales and number of restaurants.

09 FLAGSHIP BRAND

What is “Sanuki Udon”? Udon is a type of thick wheat flour noodle, used frequently in Japanese cuisine. In the past, Udon was a special food that people eat at ceremonies and celebrations. It has become a popular staple food in Japan as an alternative to . There are numerous varieties of Udon today, and Sanuki Udon is recognized as one of the three most famous types of Udon. Named after the old name of Kagawa prefecture in the south-west of Japan, Sanuki Udon is known for its firm, al-dente texture. The thick long flour noodle is perfectly nice and chewy, yet so soft and silky to slurp. Udon remains extremely popular in Kagawa Prefecture, which is number one in the production and consumption of Udon.

10 OUR BRANDS IN JAPAN

TORIDOLL This is an authentic “Yakitori (grilled chicken)” restaurant where all family members can enjoy together regardless of age. The business name “TORIDOLL” comes from “tori” of “Yakitori”. TORIDOLL was the first business of TORIDOLL Holdings.

TONICHI A restaurant chain specializing in katsu-don (pork cutlets over rice) and ton- teki (pork steak) known for the ultimate in savory and tender pork. This restaurant chain is known for its katsu-don featuring freshly deep fried pork cutlet enveloped with egg and special warishita stock and its tonteki teishoku (set meal) featuring pork steak barbequed with special sauce.

MARUSHOYA A chain of shops committed to the in-house production of not just the noodles but other ingredients as well. Their extremely flavorful bowls of ramen are possible only because they are elaborately prepared all by hand.

NAGATA-HONJYO-KEN A chain of restaurants, featuring medium-thick noodles made in-house and rich flavorings typical of Kobe’s old town area.

11 OUR BRANDS IN JAPAN

MAKINO This chain of restaurants specialized in a set tempura menu only frying the ingredients after the order is place by the customers, always serving crisp, piping hot tempura.

Kona’s Coffee / Lanai Cafe A Hawaiian-style cafe designed with a classic Hawaiian vacation mood. The soft, fluffy pancakes are made by hand in store and cooked fresh to order, while each cup of Hawaii Kona Blend Coffee is brewed to perfection with an aroma that instantly set you in Hawaiian vacation mode.

ZUNDO-YA Since opening the first shop in Himeji city in April 2002, we have stores mainly in the Kansai region with our focus in TONKOTSU (rich pork based soup) ramen. Our customers can choose from two kinds of fine noodles that are carefully hand-made. Our TONKOTSU soup is made only from water and pork bones in a process of over 20 hours, giving it its unique taste.

BANPAIYA Since opening our first store in 2009, we have established our business mainly in Tokyo. We have characterized the concept to fit the current needs of the people, whereby rapid-growing single and senior households can enjoy us casually. Most of our stores are standing bars with satisfying dishes starting from 100 yen and drinks for 500 yen or less.

12 OUR BRANDS WORLDWIDE

MARUGAME UDON A specialized Sanuki Udon restaurant serves an authentic tasty Udon in self-service style. In an open kitchen style, all the preparation procedures are visible and customers can make sure that all food is freshly made in the restaurant.

13 OUR BRANDS WORLDWIDE

Boat Noodle Tracing its roots back to small soup noodle dishes of the floating markets of Thailand, this popular fast food chain offers the perfect blend of convenience, flavor and visual entertainment. Pork-free dishes have also received Malaysian Halal certification, making them ideal for customers of Islamic faith to enjoy.

SHORYU SHORYU triggered a ramen boom in London with the authentic tonkotsu pork broth style ramen it serves. Other dishes like yakitori, pan-fried gyoza dumplings and Hakata buns with ingredients wrapped in a Chinese-style dough help to complement this quick and convenient, authentic style of Japanese dining.

WOK TO WALK Asian fast food chain that spreads worldwide, mainly in Europe, featuring a modern feel by adding Western trends to the Thai street food concept. With dishes cooked right in front of customers on raging flames, this style of cooking that fuses entertainment value with rich flavor is popular everywhere.

Tamjai Mixian / Tamjai Samgor Mixian Tamjai’s Yunnan Noodle is a rice noodle very popular for its texture and spicy soup, added with wide variety of toppings and level of spiciness. It attracts especially the young generations with its value for price.

14 OUR BRANDS WORLDWIDE

Monster Curry MONSTER CURRY, as a Japanese curry shop, has been widely accepted from people in Singapore and ranked the first in the market share of Singapore. The Japanese-style chopped curry sauce is rich in flavor, and its big portion can be shared and the five spicy levels can be chosen make the MONSTER CURRY full of popularity.

Pokéworks Pokeworks is a leader in the North American poke (cubed raw fish) movement. Inspired by sustainable, seasonal, and natural ingredients. Pokeworks is committed to bring you healthy and superior seafood. In collaboration with celebrity U.S. Top Chef, Sheldon Simeon, Pokeworks offers an authentic taste of the Hawaiian islands through innovative dishes.

15 LIFESTYLE BUSINESS

A lifestyle brand that provides beauty and health through food SONOKO “SONOKO” is a lifestyle company that provides beauty and health through oil-free, additive-free food and domestically produced beauty products that do not damage your skin, with the desire to “provide joy to our customers through safe and ethical health and beauty products”. In response to the needs for beauty, health and food safety, which are increasingly becoming important worldwide, we will develop group synergy with our know-how and expansive reach cultivated over many years to create new lifestyle concepts as well as added values.

Energize your day with beautiful hair fufu “fufu” provides quality professional services at a reasonable price by specializing in hair coloring services and streamlining the business. Generally, coloring hair requires significant amount of money and time at a hair salon or even more effort to do it at home, but “fufu” has established new options in the hair color market.

16 M&A

10 M&A deals in 4 years Cross-Border Domestic

Tamjai Yunnan Mixian Boat Noodle SHORYU BANPAIYA Tamjai Samgor Mixian Monster Curry (Maraysia) (UK) (Japan) (Hong kong) (Singapore)

May Feb. May Dec. Jan. Jul. Nov. Dec. Aug. Nov. 2015 2016 2016 2016 2017 2017 2017 2017 2018 2018

WOK TO WALK SONOKO fufu ZUNDO-YA Pokéworks (The Netherlands) (Japan) (Japan) (Japan) (US)

CORPORATE VENTURE CAPITAL

Established an investment subsidiary, TD Investment Co., Ltd. In 2015, we established TD Investment Co., Ltd, a wholly-owned subsidiary that makes business investments. Our subsidiary aims to create a rich restaurant culture by bringing new ideas in the restaurant market where fragmentation continues. As a group, we aim to create new businesses that we alone cannot realize by connecting ideas and people.

FUND INVESTMENT

Investment in US Food Fund We have taken a stake in an investment fund, Hargett Hunter Premiere Brands Fund I, LP (headquartered in North Carolina, USA, hereinafter referred to as HHPBF) formed by a US investment company, Hargett Hunter Capital Partners (headquartered in North Carolina, USA, hereinafter referred to as HHCP). HHCP aims to raise US$100 million in total to invest in the US restaurant market, which is the world’s largest restaurant market with a size of around 80 trillion JPY as of 2016. HHCP will explore and invest in restaurant chains and franchise companies where high growth is expected, as well as offer a variety of platforms ranging from investment branding and location development to operation improvement.

17 HISTORY

Operating more than 1,700 restaurants around the world

Aug. 1985 Established the first yakitori shop “TORIDOLL SANBAN-KAN”

Nov. 2000 Opened its first MARUGAME SEIMEN restaurant

Feb. 2006 Listed shares on the Tokyo Stock Exchange (TSE) Mothers Index

Dec. 2008 Changed listing to the First Section of the TSE

2011 Opened its first restaurants outside of Japan, in Hawaii Opened MARUGAME SEIMEN restaurants in Thailand, China and South Korea Opened MARUGAME SEIMEN restaurants in every prefecture in Japan, reaching 500 restaurants

2013 Opened MARUGAME SEIMEN restaurants in Hong Kong, Russia, Indonesia, Taiwan and Australia

2014 Opened MARUGAME SEIMEN restaurant in

2015 Opened MARUGAME SEIMEN restaurant in Malaysia 1.4 billion $

Jun. 2015 Achieved 1,000 restaurants in 30 countries and regions (145 billion JPY) around the world on the Company’s 30th anniversary

(Billions of $) Aug. 2017 Opened MARUGAME SEIMEN restaurant in the Philippines 1.4

Mar. 2018 MARUGAME SEIMEN has opened 1,000 restaurants worldwide 1.2

575

1 528

0.8

0.6 Total trading transactions 334

Number of restaurants outside Japan 243 1103 Number of restaurants in Japan 0.4 102 1012 61 0.2 877 22 847 848 849 762 4 629 519

403

285

190 132 87 39 56 Our beginning 15 22 26

1985 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

*Figures for fiscal 2014 and fiscal 2015 represents net income attributable to owners of the parent company, while International Financial Reporting Standards has been introduced from fiscal 2015. *The exchange rate as of Aug. 30, 2018.

Established in 1985. 2003- 2007- Expanded the business around Achieved the diverse food court strategy Expanded the MARUGAME SEIMEN “Yakitori Family Dining TORIDOLL”. with a focus on MARUGAME SEIMEN. brand with roadside restaurants. Started to expand into overseas.

18 SOCIAL INITIATIVES

We want to improve our society through food-related activities

Donating 1 yen from each bowl of Kama-age (straight-from-the-pot) Udon MARUGAME SEIMEN is committed to various CSR activities. For example, we donate a portion of domestic sales of our top menu item “Kama-age Udon” to cover the cost of school lunches for children in developing countries. In 2016, we constructed a school in as a part of these initiatives.

MARUGAME udon class The MARUGAME udon class is a handmade udon class where you can experience “freshly handmade” taste. It’s also held at kindergartens, elementary schools, and even MARUGAME SEIMEN restaurants. This class has been held more than 800 times since its inception, joined by more than 10,000 children. Filled with the smiles of the children and the seriousness of their eyes, this udon class has become an irreplaceable activity for us as well.

19 CORPORATE GOVERNANCE

CORPORATE GOVERNANCE STRUCTURE

For the foreseeable future, the Company will maintain a small, seven-member Board of Directors (including three outside directors) to ensure agility and quick decision-making regulations. The Board of Directors aims to achieve transparency in corporate management, disclose information in a timely manner and always maximize corporate value for stakeholders. As a result of this resolution, the Company will grant directors who are members of the Audit and Supervisory Committee voting rights at board meetings to further strengthen the Company’ s audit and supervisory functions as well as the corporate governance structure.

OVERVIEW OF EACH ORGANIZATION

Board of Directors Internal Audit Office The Company’s Board of Directors meets monthly in principle The Company has established the Internal Audit Office, which and at other times when necessary to decide reports directly to the president. This office carries out on important business matters and to supervise the perfor- reviews and assessments, from an independent position, on mance of duties by the directors in accordance the appropriateness and effectiveness of with the law, Articles of Association, Board of Directors the Company Group’s internal controls in accordance with Regulations and other company rules. the Company’s management policy. Through proposals for improvement based on these results, the Company strives to Audit and Supervisory Committee continuously improve the soundness and efficiency of its The Company’s Audit and Supervisory Committee audits corporate management. The Internal Audit Office conducts independently the duties of the directors. The Audit and internal audits of subsidiaries when necessary in accordance Supervisory Committee meets regularly with the president to with the Internal Audit Regulations and reports the results of exchange opinions. When necessary, the committee commu- these audits to the president. nicates and shares information with other directors, corporate auditors of subsidiaries (or people who hold a similar position), the general manager of the Internal Audit Office and the accounting auditor, to ensure the effectiveness of its audits. This committee meets monthly in principle and at other times when necessary to discuss material matters in accordance with the laws, Articles of Association, Audit and Supervisory Committee Regulations and other company rules.

20 CORPORATE GOVERNANCE

Risk Management Structure The Company has established Risk Management detected, to ascertain the facts. The chair Regulations and the Risk Management Committee, then issues instructions on countermeasures and asks chaired by the president, to comprehensively identify the applicable business division(s) to report on the details of and evaluate risks concerning the execution of business and the risks and the extent of the loss that might result. to respond to these risks appropriately. The Internal Audit Office periodically audits the head office The chair of the Risk Management Committee convenes divisions and restaurants to ensure that risks are quickly the committee whenever risks associated with financial loss identified and reported to the president, who is responsible due to changes in the management environment, violations for all business operations. of the law or Articles of Association or other reasons are

General shareholders’ meeting

Appointment/ Appointment/ Appointment/ Dismissal Dismissal Dismissal

Cooperation/ Collaboration Audit Audit and Supervisory Committee Executive directors Accounting auditor (Three directors, of whom three are (Four directors) outside directors) (audit firm)

Directors (Seven directors)

Selection/ Selection/ Cooperation/ Cooperation/ Retirement Retirement Collaboration Collaboration

Instructions

President Report Internal Audit Office

Operating audits/ Report Internal audit Accounting audits

Instructions/ Accounting Control audits

Executive Officer Business divisions

21 MANAGEMENT DISCUSSION & ANALYSIS

BUSINESS PERFORMANCE

During the consolidated fiscal year ended March 31, 2019, including 34 franchise locations, bringing the total number of Japan’s economy has been on a moderate recovery path, stores to 1,678 stores, including 413 franchise stores. supported by the improved business performance and employment situation. However, the Japanese economy is The Group has continued to see robust growth in fiscal 2019, forecast to remain subdued because of the negative effect of recording consolidated revenue of ¥145,022 million, up 24.5% prolonged uncertainty about the trade war between the year-on-year. United States and China. However, operating profit dropped by 69.8% to ¥2,302 million, The whole of the food sector in Japan is under pressure at and profit before tax fell by 81.4% to ¥1,337 million, while the moment. The top three reasons are: 1) adverse effects of profit for the year attributable to owners of the parent incremental weather conditions and earthquakes during the company totaled ¥267 million, down 94.3% year-on-year. period, 2) rising price of raw materials and higher labor costs due to the shortage of suitable workers, and 3) fierce EBITDA2 declined by 26.2% to ¥8,671 million, while adjusted competition between restaurant brands in an increasingly EBITDA increased by 0.3% to ¥12,402 million. challenging market. MARUGAME SEIMEN In a continuing challenging economic environment, we Twenty-seven new restaurants, including 15 roadside continue to strengthen and intensify our efforts to improve locations and 12 shopping mall locations, opened under the profitability. brand during the period, while two stores were closed, and the total number of stores at the end of fiscal 2019 was 817. In Japan, the Group has implemented a series of measures aimed at boosting brand awareness and customer engage- Meanwhile, revenue decreased by 0.5% year-on-year to ment to drive sales, including aggressive promotions and a ¥89,944 million, and segment profit decreased by 11.1% new nationwide TV advertising campaign. year-on-year to ¥12,438 million.

The Group continued to expand through several mergers and TORIDOLL acquisitions within domestic and international markets. Two stores were closed, and the total number of stores at Domestically, the Group opened a number of new stores the end of fiscal 2019 was 15. while exploring new business models to seek new market opportunities. Likewise, to reinforce the profitability of As a result, revenue decreased by 10.3% year-on-year to overseas operations, it also focused on expanding the ¥1,829 million, and segment profit decreased by 39.3% number of locations. year-on-year to ¥46 million.

During fiscal 2019, the Group added 27 new Marugame Seimen locations, while opening 81 stores of other brands, (*1) All stores except those owned and operated by the Group or its subsidiaries including a new concept Butaya Tonichi, to drive new and are referred to as “franchise restaurants.” (*2) The Group discloses EBITDA and adjusted EBITDA, starting with the current existing concepts to maximize revenue. fiscal year under review as useful comparative information for the Group’s performance. EBITDA excludes the effects of non-cash expenditure items (i.e., Its international expansion remains equally aggressive. depreciation and amortization) from operating profit. In addition, adjusted EBITDA excludes the effects of impairment losses and extraordinary expenses, including While focusing on profitability, the Group opened 25 new advisory fees concerning stock acquisitions from EBITDA. EBITDA and adjusted company-owned stores and 110 franchise1 locations during EBITDA are calculated as follows. the period. ・EBITDA = Operating profit + Other operating expenses – Other operating income + Depreciation and amortization ・Adjusted EBITDA = EBITDA + Impairment losses + Extraordinary expenses By the end of fiscal 2019, the Group opened 138 stores,

22 MANAGEMENT DISCUSSION & ANALYSIS

ANALYSIS OF FINANCIAL CONDITION

Assets Liabilities / Equity Total consolidated assets at the end of the fiscal year under Total liabilities increased ¥43,961 million, compared with the review increased ¥4,621 million, compared with the end of end of the previous fiscal year, to ¥72,966 million. This the previous fiscal year, to ¥110,212 million. The main reason change was mainly due to increases in trade and other for this change was increases in cash and cash equivalents, payables and long-term loans payable of ¥34,555 million and trade and other receivables, and intangible assets and ¥3,689 million, respectively, compared with the end of the goodwill of ¥3,615 million, ¥5,398 million, and ¥32,314 million, previous fiscal year. respectively. Total equity increased ¥2,240 million, compared with the end of the previous fiscal year, to ¥37,246 million, due to an increase in retained earnings and other factors.

CASH FLOWS

The consolidated balance of cash and cash equivalents tures for the purchase of shares of subsidiaries resulting in a (hereafter, “cash”) at the end of the fiscal year under review change in the scope of consolidation of ¥32,418 million. increased ¥3,615 million, compared with the end of the previous fiscal year, to ¥14,798 million, a year-on-year Cash Flow from Financing Activities increase of 32.3%. Cash gained from financing activities totaled ¥35,039 million, compared with an outflow of ¥102 million in the previous Cash Flow from Operating Activities year. This was mainly attributable to net increase in Cash obtained from operating activities totaled ¥9,862 short-term loans payable by ¥34,579 million, proceeds from million, up 1.2% from the previous fiscal year. This was long-term loans payable of ¥8,745 million as well as expendi- mainly attributable to profit before tax of ¥7,175 million and tures for the repayments of long-term loans payable of depreciation and amortization of ¥3,984 million, increase in ¥7,007 million, and cash dividends paid of ¥1,128 million. trade and other receivables of ¥1,276 million, while income taxes paid totaled ¥2,439 million.

Cash Flow from Investing Activities Cash used in investing activities increased to ¥39,860 million, compared with ¥8,769 million in the previous year. This was mainly attributable to expenditures for the purchase of property, plant and equipment of ¥5,498 million, expendi-

23 CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statements of financial position (Millions of yen)

As of March 31, 2018 As of March 31, 2019

Assets Current assets Cash and cash equivalents 14,798 14,398 Trade and other receivables 5,766 4,416 Inventories 815 830 Other current assets 1,423 2,108 Total current assets 22,802 21,752 Non-current assets Property, plant and equipment 29,370 30,682 Intangible assets and goodwill 39,872 41,660 Investments accounted for using the equity method 4,084 5,477 Other financial assets 12,597 14,594 Deferred tax assets 1,685 2,719 Other non-current assets 1,116 949 Total non-current assets 88,724 96,081 Total assets 111,525 117,833

Liabilities Current liabilities Trade and other payable 9,818 9,542 Short-term loans payable 34,580 64 Current portion of long-term loans payable 5,198 10,310 Lease obligations 325 295 Income taxes payable 1,886 278 Provisions 505 899 Other current liabilities 3,906 4,565 Total current liabilities 56,217 25,953 Non-current liabilities Long-term loans payable 10,246 48,764 Lease obligations 3,457 3,241 Provisions 1,728 2,180 Deferred tax liabilities 2,225 2,140 Other non-current liabilities 182 552 Total non-current liabilities 17,838 56,878 Total liabilities 74,056 82,830

Equity Equity attributable to owners of the parent Capital stock 4,031 4,076 Capital surplus 4,064 4,085 Retained earnings 29,347 28,477 Treasury shares (0) (2,143) Other components of equity (1,200) (516) Total equity attributable to owners of the parent 36,242 33,979 Non-controlling interests 1,228 1,024 Total equity 37,470 35,003 Total liabilities and equity 111,525 117,833

24 CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statements of income (Millions of yen)

Year ended Year ended March 31, 2018 March 31, 2019

Total trading transactions 116,504 145,022 Cost of sales (30,860) (39,117) Gross profit 85,644 105,904 Selling, general and administrative expenses (77,685) (98,634) Impairment loss (198) (3,630) Other operating income 335 562 Other operating expenses (462) (1,900) Operating profit 7,635 2,302 Finance income 182 356 Finance costs (458) (415) Finance income (costs), net (276) (59) Share of profit (loss) of investments accounted for using the equity method (184) (907) Profit before tax 7,175 1,337 Income tax expense (2,513) (1,116) Profit for the year 4,663 221

Profit for the year attributable to Owners of the parent 4,665 267 Non-controlling interests (2) (46) Profit for the year 4,663 221

Earnings per share attributable to owners of the parent (yen) Basic earnings per share 107.44 6.22 Diluted earnings per share 106.66 6.19

Consolidated statements of comprehensive income (Millions of yen)

Year ended Year ended March 31, 2018 March 31, 2019

Profit for the year 4,663 221 Other comprehensive income Items that may be reclassified to profit or loss Exchange differences on translating foreign operations (1,721) 800 Share of other comprehensive income of investments accounted for 148 (218) using the equity method Other comprehensive income (1,574) 582 Comprehensive income for the year 3,089 802 Comprehensive income for the year attributable to Owners of the parent 3,019 902 Non-controlling interests 70 (100)

25 CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statements of changes in equity (Millions of yen)

Equity attributable to owners of the parent

Other components of equity

Exchange differences Subscription Non- Common Capital Retained Treasury on Total rights Total Total controlling stock surplus earnings shares translating equity to shares interests foreign operations

As of April 1, 2017 3,975 4,007 25,813 (0) 117 291 408 34,203 804 35,006

Profit for the year 4,665 — 4,665 (2) 4,663

Other comprehensive income (1,646) (1,646) (1,646) 72 (1,574) Total comprehensive income for the year — — 4,665 — (1,646) — (1,646) 3,019 70 3,089 Issuance of new shares (exercise of subscription rights) 55 55 (34) (34) 76 76

Share-based payment transactions 2 2 73 73 76 76

Dividends (1,128) — (1,128) (20) (1,148)

Change of scope of consolidation — — 374 374

Others (3) — (3) (3) Total transaction amount with owners 57 57 (1,131) — — 38 38 (979) 354 (625) Transfer to retained earnings from other components of equity 0 (0) (0) — —

As of March 31, 2018 4,031 4,064 29,347 (0) (1,529) 329 1,200 36,242 1,228 37,470

(Millions of yen)

Equity attributable to owners of the parent

Other components of equity

Exchange differences Subscription Non- Common Capital Retained Treasury on Total rights Total Total controlling stock surplus earnings shares translating equity to shares interests foreign operations

As of April 1, 2018 4,031 4,064 29,347 (0) (1,529) 329 (1,200) 36,242 1,228 37,470

Profit for the year 267 — 267 (46) 221

Other comprehensive income 635 635 635 (53) 582 Total comprehensive income for the year — — 267 — 635 — 635 902 (100) 802 Issuance of new shares (exercise of subscription rights) 43 43 (23) (23) 63 63

Share-based payment transactions 2 2 3 86 86 93 93

Acquisition of treasury shares (20) (2,146) — (2,165) (2,165)

Dividends (1,151) — (1,151) (15) (1,166)

Change of scope of consolidation — — (90) (90)

Others (4) — (4) (4) Total transaction amount with owners 45 21 (1,151) (2,143) — 63 63 (3,165) (104) (3,269) Transfer to retained earnings from other components of equity 14 (14) (14) — —

As of March 31, 2019 4,076 4,085 28,477 (2,143) (894) 378 (516) 33,979 1,024 35,003

26 CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statements of cash flows (Millions of yen)

Year ended Year ended March 31, 2018 March 31, 2019

Cash flows from operating activities Profit before tax 7,175 1,337 Depreciation and amortization 3,984 5,098 Impairment loss 198 3,630 Interest income (181) (212) Interest expenses 275 348 Share of loss (profit) of investments accounted for using the equity method 184 907 Decrease (increase) in trade and other receivables (1,276) 351 Decrease (increase) in inventories 120 (7) Increase (decrease) in trade and other payables 985 (900) Other, net 1,286 1,978 Subtotal 12,510 12,529 Interest income received 34 56 Interest expenses paid (243) (357) Income taxes paid (2,439) (3,812) Net cash provided by (used in) operating activities 9,862 8,416

Cash flows from investing activities Purchase of property, plant and equipment (5,498) (9,032) Purchase of intangible assets (202) (358) Payments for lease and guarantee deposits (778) (1,340) Proceeds from collection of lease and guarantee deposits 66 568 Payments of construction assistance fund receivables (283) (302) Collection of construction assistance fund receivables 465 452 Purchase of shares of subsidiaries resulting in change in scope consolidation (32,418) (1,102) Purchase of investments accounted for using the equity method (60) (2,272) Other, net (1,151) (824) Net cash provided by (used in) investing activities (39,860) (14,210)

Cash flows from financing activities Net increase (decrease) in short-term loans payable 34,579 (34,578) Proceeds from long-term loans payable 8,745 51,358 Repayments of long-term loans payable (7,007) (7,728) Repayments of lease obligations (221) (262) Cash dividends paid (1,128) (1,151) Purchase of treasury shares — (2,146) Other, net 70 41 Net cash provided by (used in) financing activities 35,039 5,534 Net increase (decrease) in cash and cash equivalents 5,041 (260) Cash and cash equivalents at beginning of period 11,183 14,798 Effect of exchange rate change on cash and cash equivalents (1,426) (140) Cash and cash equivalents at end of period 14,798 14,398

27 COMPANY OVERVIEW

COMPANY NAME TORIDOLL Holdings Corporation

MAIN BUSINESS Business management of group subsidiaries mainly consisting restaurant businesses

MAIN BRAND MARUGAME SEIMEN (Sanuki Udon) TORIDOLL (Yakitori family dining) Fried Pork Chop・Thick-cut Sopping Pork Chop Shop — Butaya Ton-Ichi SONOKO (Beauty and lifestyle brand)

ESTABLISHMENT June 11, 1990 TORIDOLL Ltd. established October 28, 1995 Became incorporated as Toridoll. Corporation October 1, 2016 Converted the corporation to a holdings company (TORIDOLL Holdings Corporation)

CAPITAL 4,100,163,000yen *As of March 31, 2019.

TOKYO HEADQUARTERS SHIBUYA SOLASTA 19F, 1-21-1 Dogenzaka, Shibuya-ku, Tokyo 150-0043, Japan TEL: +81-3-4221-8900 FAX: +81-50-3156-0890

KOBE OFFICE Nihon-Seimei Sannomiya-eki-mae Bldg. 11F, 7-1-1 Onoedori, Chuo-ku, Kobe 651-0088, Japan TEL: +81-78-200-3430 FAX: +81-78-200-3431

BOARD MEMBERS [President (CEO)] Takaya Awata [Executive Director (COO)] Kimihiro Tanaka [Executive Director (CFO)] Hiroyuki Kobayashi [Director (CSCO)] Masatoshi Kamihara [Director（Audit and Supervisory Committee Member）] Toshiyasu Umeki [Director（Audit and Supervisory Committee Member）] Hiroaki Umeda [Director（Audit and Supervisory Committee Member）] Maki Kataoka *As of July 1, 2019

CORRESPONDING BANKS Sumitomo Mitsui Banking Corporation The Bank of Mitsubishi UFJ, Ltd. Mizuho Bank, Ltd.

NUMBER OF EMPLOYEES Number of Regular Staff 3,871(current as of March 31, 2019) Number of Part Time Staff 13,084(current as of March 31, 2019) *Calculated from the average number of people per month each working 8 hours a day.

28 INVESTOR INFORMATION

STOCK INFORMATION

Stock Listing Tokyo Stock Exchange First Section (Code No. 3397) Share Trading Unit 100 shares

Number of Shares Authorized for Issue 115,200,000 shares Number of shareholders 63,059

Total number of issued shares 43,489,576 shares

*As of March 31, 2019.

MAJOR SHAREHOLDERS

Ratio of No. of Shares Major Shareholders Ownership Owned (Shares) (%)

Takaya Awata 13,784,701 32.37 T&T inc. 5,580,000 13.1 SMBC Trust Bank Ltd. Designated Securities Trust 1,998,500 4.39 Japan Trustee Services Bank, Ltd. (Trust account) 1,093,900 2.57 Japan Master Trust Bank, Ltd. (Trust account) 708,600 1.66 Japan Trustee Services Bank, Ltd. (Trust account 5) 475,600 1.12 Japan Trustee Services Bank, Ltd. (Trust account 1) 321,900 0.76 ARIAKEJAPAN Co., Ltd. 300,000 0.7 Japan Trustee Services Bank, Ltd. (Trust account 2) 296,200 0.7 STATE STREET BANK WEST CLIENT-TREATY 505234 264,600 0.62

*The shareholding ratio has been calculated by deducting the treasury shares.

SHAREHOLDER COMPOSITION

Foreign Financial instruments Foreign noninal shareholding corporations,etc. business operators corporations,etc. 2.09% 0.32% 0.04% 3.65% Financial institutions Financial instruments Other corporations Number of Financial institutions Total number of business operators 0.40% shareholders 0.04% 12.95% issued shares 1.03% 63,059 43,389,576 Other corporations Individuals and others Individuals and others 99.2% 13.86% 66.42% (noninal shareholding 0.00%)

STOCK PRICE RANGE / MONTHLY TRADING VOLUME

(Yen) 4,500

4,000

3,500

3,000

2,500

2,000

(Shares) 1,500 20,000,000 15,000,000 1,000 10,000,000 500 5,000,000 0 0 2014 2015 2016 2017 2018 2019 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3

29 TORIDOLL Holdings Corporation

TOKYO HEADQUARTERS SHIBUYA SOLASTA 19F, 1-21-1 Dogenzaka, Shibuya-ku, Tokyo 150-0043, Japan TEL:+81-3-4221-8900

KOBE OFFICE Nihon-Seimei Sannomiya-eki-mae Bldg. 11F, 7-1-1 Onoedori, Chuo-ku, Kobe 651-0088, Japan TEL:+81-78-200-3430