43rd Annual Securities Report

Annual Securities Report

(Report pursuant to Article 24, Paragraph 1 of the Financial Instruments and Exchange Act of Japan)

The 43rd Fiscal Year

(April 1, 2024, to March 31, 2025)

Zensho Holdings Co., Ltd.

This document is a translation of part of the Japanese original. The Japanese original has been disclosed in Japan in accordance with Japanese accounting standards and the Financial Instruments and Exchange Act of Japan. This document does not contain or constitute any guarantee and the Company will not compensate any losses and/or damage stemming from actions taken based on this document. In the case that there is any discrepancy between the Japanese original and this document, the Japanese original shall prevail.

Contents.

Annual Securities Report (43rd Fiscal Year)

[Cover page] 1

PART I: COMPANY INFORMATION 2

1. OVERVIEW OF COMPANY 2

   1. Summary of Business Results 2

   2. History 4

   3. Description of Business 7

   4. Subsidiaries and Associates 9

   5. Employees 14

2. BUSINESS OVERVIEW 16

   1. Management Policy, Business Environment and Issues to Be Addressed, etc. 16

   2. Philosophy and Initiatives for Sustainability 19

   3. Business Risks, etc. 24

   4. Management's Analysis on the Company's Financial Condition, Results of Operations and Cash Flow Conditions 27

   5. Critical Contracts 33

   6. Research and Development 35

3. STATUS OF EQUIPMENT 36

   1. Overview of Capital Investments, etc. 36

   2. Main Facilities 36

   3. Plans for New Additions or Disposals, etc. of Facilities 39

4. INFORMATION ON THE COMPANY 40

   1. Information on the Company's Share, etc. 40

   2. Acquisitions of Treasury Shares 49

   3. Dividend Policy 50

   4. Corporate Governance, etc. 51

5. FINANCIAL INFORMATION 80

   1. Consolidated Financial Statements, etc. 81

   2. Non-Consolidated Financial Statements, etc. 127

VI: STOCK-RELATED ADMINISTRATION FOR THE COMPANY 140

VII. CORPORATE REFERENCE DATA 141

1. Information on the Parent Company, etc. 141

2. Other Reference Information 141

PART II: INFORMATION ON CORPORATE GUARANTORS, ETC., FOR THE COMPANY 142

[Document title] Annual Securities Report

[Clause of stipulation] Article 24, Paragraph 1 of the Financial Instruments and Exchange Act of

Japan

[Place of filing] Director-General, Kanto Local Finance Bureau

[Filing date] June 30, 2025

[Fiscal year] The 43rd term (from April 1, 2024, to March 31, 2025)

[Company name] Kabushiki Kaisha Zensho Holdings [Company name in English] Zensho Holdings Co., Ltd.

[Title and name of representative] Yohei Ogawa, Representative Director, President & CEO [Address of head office] 18-1, Konan 2-chome, Minato-ku, Tokyo, Japan [Telephone number] +81-3-6833-1600

[Name of contact person] Kiyohiko Niwa, Chief Financial Officer, Executive Officer, Senior General

Manager of Group Finance and Accounting Division [Nearest place of contact] 18-1, Konan 2-chome, Minato-ku, Tokyo, Japan [Telephone number] +81-3-6833-1600

[Name of contact person] Kiyohiko Niwa, Chief Financial Officer, Executive Officer, Senior General

Manager of Group Finance and Accounting Division [Place for public inspection] Tokyo Stock Exchange, Inc.

(2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo, Japan)

‌PART I: COMPANY INFORMATION

1. ‌OVERVIEW OF COMPANY

   1. ‌Summary of Business Results

      1. Business results of group

         (Million yen, unless otherwise stated)

         Term	39th	40th	41st	42nd	43rd
         Fiscal year-end	March 2021	March 2022	March 2023	March 2024	March 2025
         Net sales	595,048	658,503	779,964	965,778	1,136,684
         Ordinary profit	12,215	23,117	28,081	50,913	71,890
         Profit attributable to owners of parent	2,259	13,869	13,265	30,693	39,290
         Comprehensive income	5,324	22,080	18,180	40,807	37,281
         Net assets	85,430	104,486	115,837	214,652	240,371
         Total assets	396,023	427,172	469,563	748,056	813,109
         Net assets per share (yen)	560.87	679.19	761.63	1,171.76	1,335.69
         Basic earnings per share (yen)	14.82	91.17	87.30	195.41	240.45
         Diluted earnings per share (yen)	-	-	-	-	-
         Shareholders' equity ratio (%)	21.5	24.2	24.6	28.7	29.5
         Return on equity (%)	2.6	14.7	12.1	18.6	17.3
         Price-earnings ratio (times)	191.1	31.4	45.0	33.0	33.5
         Cash flows from operating activities	29,686	45,430	53,078	85,985	78,953
         Cash flows from investing activities	(23,519)	(31,550)	(35,200)	(125,387)	(66,497)
         Cash flows from financing activities	1,753	(11,986)	1,844	54,633	(16,225)
         Ending balance of cash and cash equivalents	37,643	42,414	64,690	82,171	79,695
         Number of employees [average number of part-time employees] (persons)	16,253 [51,125]	15,929 [51,118]	17,324 [56,313]	16,806 [66,418]	18,742 [69,340]

         Notes: 1. Diluted earnings per share are not stated, as there is no potential share with dilutive effects.

   2. The Group has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc., from the beginning of the 40th term. Figures for the summary of business results from the 40th term onwards are presented after applying these accounting standards, etc.

   3. The Company introduced Board Benefit Trust (BBT) in the 41st term. From the 41st term onwards, in the calculation of net assets per share, the Company shares held as trust assets for the BBT are included in the number of treasury shares deducted from the number of issued shares at the fiscal year-end, while in the calculation of basic earnings per share, those are included in the number of treasury shares deducted from the average number of shares outstanding during the period.

   4. The Group has applied the "Accounting Standard for Current Income Taxes." (ASBJ Statement No. 27, October 28, 2022) and the transitional treatment as provided for in the proviso to section 20-3 from the beginning of the 42nd term. Figures for the summary of business results for the 42nd term onwards are presented after applying these accounting standards, etc.

      (2) Business results of reporting company

      (Million yen, unless otherwise stated)

      Term	39th	40th	41st	42nd	43rd
      Fiscal year-end	March 2021	March 2022	March 2023	March 2024	March 2025
      Net sales	238,248	216,433	256,344	294,751	334,316
      Ordinary profit	4,699	5,571	13,436	7,782	6,969
      Profit	2,622	5,415	11,961	7,530	8,385
      Share capital	26,996	26,996	26,996	47,497	47,497
      Total number of issued shares (shares)	154,862,825	154,862,825	154,862,825	160,733,225	160,733,225
      Net assets	75,884	78,095	86,248	150,921	148,275
      Total assets	360,602	373,293	400,507	535,482	597,556
      Net assets per share (yen)	498.83	513.38	568.08	766.67	749.81
      Dividends per share (yen) [Interim dividend per share]	20.00 (10.00)	22.00 (11.00)	24.00 (12.00)	50.00 (25.00)	70.00 (35.00)
      Basic earnings per share (yen)	17.20	35.60	78.72	43.93	43.19
      Diluted earnings per share (yen)	-	-	-	-	-
      Shareholders' equity ratio (%)	21.0	20.9	21.5	28.2	24.8
      Return on equity (%)	3.4	7.0	14.6	6.3	5.6
      Price-earnings ratio (times)	164.6	80.4	49.9	146.6	186.4
      Payout ratio (%)	116.3	61.8	30.5	113.8	162.1
      Number of employees [average number of part-time employees] (persons)	627 [146]	655 [144]	684 [109]	790 [115]	852 [132]
      Total shareholder return (%) [Benchmark: TOPIX Net Total Return Index]	138.3 (142.1)	140.9 (145.0)	193.6 (153.4)	318.1 (216.8)	399.7 (213.4)
      Highest share price (yen)	3,125	3,005	4,160	9,274	9,604
      Lowest share price (yen)	1,731	2,528	2,835	3,910	5,292

      Notes: 1. Diluted earnings per share are not stated, as there is no potential share with dilutive effects.

      1. The highest and lowest share prices are those of the First Section of the Tokyo Stock Exchange before April 3, 2022, and of the Prime Market of the Tokyo Stock Exchange after April 4, 2022.

      2. The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc., from the beginning of the 40th term. Figures for the summary of business results from the 40th term onwards are presented after applying these accounting standards, etc.

      3. The Company introduced Board Benefit Trust (BBT) in the 41st term. From the 41st term onwards, in the calculation of net assets per share, the Company shares held as trust assets for the BBT are included in the number of treasury shares deducted from the number of issued shares at the fiscal year-end, while in the calculation of basic earnings per share, those are included in the number of treasury shares deducted from the average number of shares outstanding during the period.

      4. The Company has applied the "Accounting Standard for Current Income Taxes." (ASBJ Statement No. 27, October 28, 2022) and the transitional treatment as provided for in the proviso to section 20-3 from the beginning of the 42nd term. Figures for the summary of business results for the 42nd term onwards are presented after applying these accounting standards, etc.

      1. ‌History

         Date		Event
         Jun.	1982	Zensho Co., Ltd. (currently Zensho Holdings Co., Ltd.) was established, and located its head office annexed to Yokohama factory in Tsurumi-ku, Yokohama in Kanagawa Prefecture, Japan.
         Jul.	1982	Opened its first lunchbox shop (Namamugi shop) in Tsurumi-ku, Yokohama, Kanagawa Prefecture, Japan.
         Nov.	1982	Opened its first built-in type restaurant (Sukiya Gyudon restaurant: Namamugi Ekimae restaurant) in Tsurumi-ku, Yokohama, Kanagawa Prefecture, Japan.
         Jul.	1987	Opened its first freestanding type restaurant (Mito restaurant) in Mito, Ibaraki Prefecture, Japan.
         Aug.	1997	Shares listed on the Japan Securities Dealers Association over-the counter market.
         Sep.	1999	Shares listed on the Second Section of the Tokyo Stock Exchange.
         Jul.	2000	Acquired Coco's Japan Co., Ltd. to enter the domestic restaurant business.
         Oct.	2000	Established Techno Support Co., Ltd. (currently Techno Construction Co., Ltd.) to streamline furnishing and maintenance.
         Nov.	2000	Established Global Foods Co., Ltd. (currently Zensho Tradings Co., Ltd.) to streamline raw material procurement.
         Sep.	2001	Share listed on the First Section of the Tokyo Stock Exchange.
         Jun.	2002	Established Global Table Supply Co., Ltd. to streamline procurement of consumables, equipment.
         Oct.	2002	Established Hamasushi Co., Ltd., to operate sushi restaurant business.
         Dec.	2002	Acquired Big Boy Japan, Inc. to expand domestic restaurant business.
         Feb.	2004	Consolidated the headquarter functions and moved the head office to the current place (18-1, Konan 2- chome, Minato-ku, Tokyo, Japan).
         Jan.	2005	Established Coco's Shanghai Co., Ltd. (currently Zensho Restaurant (Shanghai) Co., Ltd.) to operate Sukiya in China.
         Mar.	2005	Acquired Nakau Co., Ltd. to expand the fast-food business.
         Sep.	2005	Established Food Safety Pursuing Department (currently Group Food Safety Assurance Division) to enhance the approach to food safety.
         Apl.	2006	UD Foods Co., Ltd. (currently Sanbishi Co., Ltd.) acquired soy sauce manufacturing business from Sanbishi Co., Ltd.
         May.	2006	Established Central Analysis Center to enhance the food safety initiatives.
         Jun.	2006	Established Global Pizza System Co., Ltd. (currently Tolona Japan Co., Ltd.) in the manufacturing and sales business to sell frozen foods for home use, etc.
         Aug.	2006	Established Global Fresh Supply Co., Ltd. to streamline logistics.
         Feb.	2007	Acquired United Veggies Co., Ltd., to enter the fruit and vegetable sales business.
         Mar.	2007	Acquired Sunday's Sun Inc. (currently Jolly-Pasta Co., Ltd.) to expand domestic restaurant business. Launched fair trade initiatives in Democratic Republic of Timor-Leste.
         Jul.	2007	Opened Sukiya (Gyudon) restaurant in Okinawa Prefecture and established the presence in all prefectures in Japan.
         Aug.	2007	Acquired Inter-Vision Consortium Inc. (currently Human Logic Laboratory Co., Ltd.) to expand personnel strategy.
         Jan.	2008	Established Zenshoen Co., Ltd. to enter the livestock business.
         Jun.	2008	Established Global IT Service Co., Ltd. to streamline business through information technologies.
         Aug.	2008	Established Zensho do Brazil Comercio de Alimentos Ltda. to operate Sukiya in Brassil.
         Oct.	2008	Acquired Hanaya Yohei Co., Ltd. to expand domestic restaurant business.
         Dec.	2010	Established Zensho Best Crew Co., Ltd. to streamline the recruiting operation.
         Feb.	2011	Established Zensho (Thailand) Co., Ltd. to operate Sukiya in Thailand.
         May.	2011	Established Zensho Spin-Off Preparation Co., Ltd. (currently Sukiya Co., Ltd.).
         Oct.	2011	Shifted to a holding company structure to start global business development and changed the corporate name from Zensho Co., Ltd. to Zensho Holdings Co., Ltd. Changed the corporate name from Zensho Spin-Off Preparation Co., Ltd. to Zensho Co., Ltd. (currently Sukiya Co., Ltd.). Established Zensho Food de Mexico S.A. de C.V. to operate Sukiya in Mexico.
         Dec.	2011	Established GFF Co., Ltd. to expand manufacturing function.
         Mar.	2012	Established Zensho Foods Malaysia Sdn. Bhd. to operate Sukiya in Malaysia.
         Apr.	2012	Established Zensho Business Service Co., Ltd. to promote employment of challenged persons and to support their self-reliance.
         Oct.	2012	Established Zensho Clean Energy Co., Ltd. to conduct power generation business using natural energy sources and to supply and sell the electricity.
         Nov.	2012	Acquired Maruya Co., Ltd. (currently Joy Mart Co., Ltd.) to enter retail business.
         Jan.	2013	Established Zensho Rice Co., Ltd. in the manufacturing and sales business to sell brown and milled rice.

         Date		Event
         Apr.	2013	Established Zensho Taiwan Co., Ltd. to operate Sukiya in Taiwan. Established PT. Zensho Indonesia. to operate Sukiya in Indonesia.
         May.	2013	Acquired Pocino Foods Company in the U.S. to expand business and manufacturing function.
         Oct.	2013	Acquired Maruei Co., Ltd. (currently Joy Mart Co., Ltd.) to expand retail business.
         Dec.	2013	Established Nihon Retail Holdings, Co., Ltd. to oversee retail business.
         Jan.	2014	Acquired Kaigo Service Kagayaki Co., Ltd. (Kagayaki Co., Ltd.) to enter the nursing care business.
         Jun.	2014	Zensho Co., Ltd. (currently Sukiya Co., Ltd.) split off Kita-Nihon Sukiya Co., Ltd., Kanto Sukiya Co., Ltd., Tokyo Sukiya Co., Ltd., Chubu Sukiya Co., Ltd., Kansai Sukiya Co., Ltd., Chu-Shikoku Sukiya Co., Ltd, and Kyushu Sukiya Co., Ltd. as successor companies, to establish a local community-based restaurant management structure.
         Aug.	2014	Acquired Owariya Co., Ltd. (currently Joy Mart Co., Ltd.) to expand retail business.
         Oct.	2014	A Dining Co., Ltd. succeeded in restaurant business and fast-food business from Zensho Co. Ltd. (currently Sukiya Co., Ltd.) by absorption-type split, to enable Zensho Co. Ltd. to concentrate, expand and further develop the Sukiya business.
         Jan.	2015	Established Zensho USA Corporation to oversee Americas business.
         Feb.	2015	Established Zensho Factory Holdings Co., Ltd. to oversee production department.
         Apr.	2015	Established Zensho CooCa Co., Ltd. to introduce original e-money.
         May.	2015	Established Kagayaki Nursery Facilities Co., Ltd. to operate in-house nursery facilities.
         Jun.	2015	Acquired Mizushita Farm Co., Ltd. to expand livestock business.
         Jul.	2015	TAG-1 Co., Ltd. succeeded in the restaurant business by absorption-type split and Zensho Café Co., Ltd. succeeded in the fast-food business by business transfer from A Dining Co., Ltd. to expand the business as a specialty restaurant. TR Factory Co., Ltd. succeeded manufacturing business of frozen pizza, etc. from Tolona Japan Co., Ltd. by absorption-type split, to streamline the operation through separation of the sales and manufacturing functions.
         Jan.	2016	Established Zensho Vietnam Co., Ltd. to operate Sukiya in Vietnam.
         Apr.	2016	Zensho Ichiban Malaysia Sdn. Bhd. acquired fast-food business to expand it in Malaysia.
         Jul.	2016	Established Katsuan Co., Ltd. to expand fast-food business.
         Sep.	2016	Kyubeiya Co., Ltd. and Setoudon Co., Ltd. succeeded fast-food business from A Dining Co., Ltd. by absorption-type split to expand the business as a specialty restaurant.
         Nov.	2016	Acquired Royalhouse Ishioka Co., Ltd. and Senior Support Co., Ltd. to expand the nursing care business. Established Zensho China Holdings Co., Ltd. to oversee China business. Acquired Fujita Cooperation Co., Ltd. (currently Joy Mart Co., Ltd.) to expand retail business.
         Apr.	2017	Established Zensho Insurance Service Co., Ltd. to operate non-life insurance agency services.
         May.	2017	Established Olive Hill Co., Ltd. to expand restaurant business.
         Jun.	2017	Established Nihon Kaigo Holdings Co., Ltd. to oversee the nursing care business.
         Jul.	2017	Acquired Nyereg Co., Ltd. to expand the nursing care business.
         Dec.	2017	Atack Co., Ltd. (currently Joy Mart Co., Ltd.) succeeded retail business by absorption-type split to expand it.
         May.	2018	Established Zensho Japanese Restaurant Company Pte. Ltd. to expand fast-food business in Singapore.
         Aug.	2018	Established Zensho (Philippines), Inc. to operate Sukiya in Philippines.
         Oct.	2018	Established Zensho Hong Kong Co., Ltd. to operate Sukiya in Hong Kong.
         Nov.	2018	Acquired Advanced Fresh Concepts Corp. to enter take-out sushi business in USA. Acquired I Medicare Co., Ltd. to expand the nursing care business.
         Jan.	2019	Established Nihon Restaurant Holdings Co., Ltd. (currently Zensho Global Restaurant Holdings Co., Ltd.) to oversee restaurant business.
         Feb.	2019	Established Zensho South East Asia Holdings Pte. Ltd. to oversee Southeast Asia business. Established Zensho Holdings Malaysia Sdn. Bhd. to oversee Malaysia business.
         May.	2019	Acquired TCRS Restaurants Sdn. Bhd. to expand fast-food business in Malaysia.
         Jun.	2019	Established JinZai Co., Ltd. to realize a society where people can co-exist with various international human resources.
         Aug.	2019	Converted Jolly-Pasta Co., Ltd. into a wholly owned subsidiary by the share exchange (Delisted).
         Dec.	2019	Established Zensho Europe Holdings B.V. to oversee Europe business. Acquired Worldfood To Go, S.L. to enter take-out-sushi business in Spain.
         Feb.	2020	Converted Coco's Japan Co., Ltd. into a wholly owned subsidiary by the share exchange (Delisted).
         Mar.	2020	Sukiya Honbu Co., Ltd., as the surviving company, merged with nine regional Sukiya companies, as the dissolving companies, to streamline Sukiya management.

         Date		Event
         		Changed the corporate name from Sukiya Honbu Co., Ltd. to Sukiya Co., Ltd.
         Apr.	2020	Established Zensho Store Support Co., Ltd. to promote employment of challenged persons and to support their self-reliance.
         Aug.	2020	Acquired Seiun Sake Brewery Co., Ltd. to enter brewing business.
         Mar.	2021	Maruya Co., Ltd., as a surviving company, merged with four companies (Maruei Co., Ltd., Owariya Co., Ltd., Fresh Corporation, and Atack Co., Ltd.), as the dissolving companies, to further expand the management of retail business. Changed the corporate name from Maruya Co., Ltd. to Joy Mart Co., Ltd.
         Jun.	2021	Established Global MD Holdings Co., Ltd. to expand domestic and international procurement.
         Jul.	2021	Acquired Marix Co., Ltd. to enter aquaculture business.
         Sep.	2021	Established Zensho Fast Holdings Co., Ltd. (currently Zensho Global Fast Holdings Co., Ltd.) to further enhance Japanese specialty restaurant business.
         Oct.	2021	Acquired Saito Shoten Co., Ltd. to expand manufacturing and sales business of brown and milled rice.
         Mar.	2022	Acquired Igarashi Marine Products Co., Ltd. to expand aquaculture business.
         Apr.	2022	Established Shinagawa Design Co., Ltd. to improve UX design quality for all the Group business categories. Moved from the First Section to the Prime Market due to the revision of the market classification of the Tokyo Stock Exchange.
         Apr.	2023	Acquired Lotteria Co., Ltd. to enter hamburger restaurant business.
         May.	2023	Acquired Sushi Circle Gastronomie GmbH to enter take-out sushi business in Germany.
         Aug.	2023	Acquired Nakatani Marine Products Co., Ltd. to expand aquaculture business.
         Sep.	2023	Acquired SnowFox Topco Limited (currently Wonderfield TopCo Limited) to enter take-out sushi business in UK.

      2. ‌Description of Business

         The Group consists of 170 companies, the Company and 169 subsidiaries, and conducts a broad range of business activities in the food business.

         The Company falls under the category of specified listed companies, etc., and among the standards for determining insignificance of important facts with respect to insider trading regulations, numerical standards defined in comparison with the scale of the listed company will be judged based on the consolidated figures.

         From the current fiscal year, the Company has changed its reporting segments. As described in "V. FINANCIAL INFORMATION,

         1. Consolidated Financial Statements, etc., (1) Consolidated Financial Statements, Notes to the Consolidated Financial Statements, (Segment Information, etc.).

            1. Global Sukiya segments (share of the Group sales: 26.0%)

               Sukiya Co., Ltd., and its overseas subsidiaries such as Zensho Restaurant (Shanghai) Co., Ltd. directly operates "Sukiya," a Gyudon restaurants chain across Japan, China, Southeast Asia and Central and South America to provide safe, delicious food at affordable prices to a broad range of customers which are included families.

            2. Global Hamasushi segments (share of the Group sales: 21.9%)

               Hamasushi Co., Ltd. and its overseas subsidiaries such as Zensho Restaurant (Shanghai) Co., Ltd. directly operates "Hamasushi" sushi restaurants chain across mainly in Japan and China. In addition to sushi using fresh seafood, the chain offers a wide range of side dishes such as noodles, desserts and drinks, which are enjoyed by both children and adults.

            3. Global Fast Food segments (share of the Group sales: 27.6%)

               Nakau Co., Ltd. operates both directly-operated and franchised restaurants of "Nakau," oyakodon rice bowl dishes and Kyoto style udon noodle chain.

               Lotteria Co., Ltd. operates both directly-operated and franchised restaurants of "Lotteria," hamburger chain. A Dining Co., Ltd. directly operates ramen specialty restaurants "Denmaru," etc. mainly in Kanto regions.

               Katsuan Co., Ltd. directly operates "Katsuan," tonkatsu specialty restaurants mainly in Kanto and Chubu regions.

               Kyubeiya Co., Ltd. directly operates "Kyubeiya" restaurants, which offer Musashino udon noodle, tempura, and shabushabu, in Kanto region.

               Setoudon Co., Ltd. directly operates" Setoudon," etc. Sanuki udon noodle specialty self-service restaurants mainly in Kanto region.

               Zensho Café Co., Ltd. directly operates "Moriba Coffee," etc. a café chain which offers fair trade coffee, mainly in Kanto region. TCRS Restaurants Sdn. Bhd. directly operates "The Chicken Rice Shop," etc. chicken rice specialty chain restaurants, in

               Malaysia.

               "AFC" and "Zenshi" of Advanced Fresh Concepts Corp., "Sushi Circle" of Sushi Circle Gastronomie GmbH, "SNOWFOX"," Bento"," Taiko," "YO!" and "SNOWFRUIT" of Wonderfield TopCo Limited operates both directly-operated and franchised takeout sushi stores, etc.

            4. Restaurants segments (share of the Group sales: 13.7%)

               Coco's Japan Co., Ltd. offers both directly-operated and franchised restaurants of "Coco's," a standard restaurant chain across Japan.

               Big Boy Japan Inc. directly operates hamburger steak and steak restaurant chain. It operates "BigBoy" etc. mainly in Kanto, Kansai and Tohoku regions, and "Victoria Station" restaurants in Hokkaido region.

               Jolly-Pasta Co., Ltd. directly operates "Jolly Pasta," pasta specialty restaurant chain, mainly in Kanto and Kansai regions. TAG-1 Co., Ltd. directly operates "Jukusei Yakiniku Ichiban", etc., barbeque restaurants mainly in Kanto and Kansai regions. Olive Hill Co., Ltd. directly operates "OLIVENOOKA," specialty Italian restaurant chain in Kanto region.

               Hanaya Yohei Co., Ltd. directly operates "Hanaya Yohei," Japanese-cuisine restaurants, etc. in Kanto region.

            5. Retail segments (share of Group sales: 6.7%) Joy Mart Co., Ltd. operates supermarkets.

               United Veggies Co., Ltd. is mainly engaged in the sale of fruits and vegetables.

            6. Corporate and Support segments (share of Group sales: 0.4%) GFF Co., Ltd. is mainly engaged in the production of food.

               Zensho Tradings Co., Ltd. is mainly engaged in the procurement and sale of food materials. Global Fresh Supply Co., Ltd. is mainly engaged in the nationwide distribution of food materials.

               Techno Construction Co., Ltd. is mainly engaged in the construction of restaurant and store facilities and maintenance. Global Table Supply Co., Ltd. is mainly engaged in the sale of equipment and uniforms.

            7. Others (share of Group sales:3.6%)

               Others are mainly "Manufacturing and wholesaling business for external sales," "Nursing care business," and "Livestock and aquaculture business."

               Tolona Japan Co., Ltd. is mainly engaged in the sale of frozen foods for home use, etc.

               Sanbishi Co., Ltd. is mainly engaged in the production and sale of soy sauce and other seasonings. Kagayaki Co., Ltd. is mainly engaged in nursing care business.

               Zensho Rice Co., Ltd. is mainly engaged in the sale of brown and milled rice.

               The following chart illustrates the business structure of the Group.

               Provides products and services

               Food business management

etc.

・Tolona Japan Co., Ltd.

・Sanbishi Co., Ltd.

・Kagayaki Co., Ltd.

・Zensho Rice Co., Ltd.

1. ‌Subsidiaries and Associates

   Name	Location	Share capital /investments (Million yen)	Major business	Ratio of voting rights holding/held (%)	Details of relationship
   Consolidated subsidiaries
   Zensho Global Fast Holdings Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of food service business	(holding) 100.00 (22.46)	Business transaction Financial support etc.
   Sukiya Co., Ltd. (Notes 1, 2, and 4)	Minato-ku, Tokyo	10	Management of Gyudon chain, Sukiya	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Nakau Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of oyakodon rice bowl dishes and Kyoto style udon noodle chain, Nakau	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Katsuan Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of tonkatsu specialty restaurants chain, Katsuan	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Zensho Café Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of Moriba Coffee, etc., a café chain which offers fair-trade coffee	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Lotteria Co., Ltd. (Note 2)	Minato-ku, Tokyo	8	Hamburger restaurant business	(holding) 100.00 (100.00)	Interlocking directorship Business transaction Financial support etc.
   Zensho Global Restaurant Holdings Co., Ltd.	Minato-ku, Tokyo	10	Management of restaurant business	(holding) 100.00	Business transaction
   Coco's Japan Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of standard restaurant chain, Coco's, etc.	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Big Boy Japan Inc. (Note 2)	Minato-ku, Tokyo	10	Management of hamburger steak and steak restaurant chain, Big Boy, etc.	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Jolly-Pasta Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of pasta specialty restaurant chain, Jolly-Pasta, etc.	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   TAG-1 Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of barbeque restaurant chain, Jukusei Yakiniku Ichiban, etc.	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Hanaya Yohei Co., Ltd. (Note 2)	Minato-ku, Tokyo	100	Management of Japanese cuisine restaurant chain, Hanaya Yohei	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Olive Hill Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of Italian restaurant chain, OLIVENOOKA	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Hamasushi Co., Ltd. (Notes 1 and5)	Minato-ku, Tokyo	10	Management of sushi restaurant chain, Hamasushi	(holding) 100.00	Business transaction Financial support etc.
   A Dining Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of ramen specialty restaurants, Denmaru, etc.	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Kyubeiya Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of Musashino udon noodle, tempura, and shabushabu restaurant chain, etc.	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Setoudon Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Management of Sanuki-udon noodle specialty self-service restaurant chain, Setoudon, etc.	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Nihon Retail Holdings Co., Ltd.	Minato-ku, Tokyo	85	Management of retail business	(holding) 100.00	Business transaction Financial support etc.

   Name	Location	Share capital /investments (Million yen)	Major business	Ratio of voting rights holding/held (%)	Details of relationship
   Joy Mart Co., Ltd. (Note 2)	Kasukabe, Saitama	10	Management of supermarket chain, Joy Foods, etc.	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   United Veggies Co., Ltd. (Note 2)	Minato-ku, Tokyo	74	Sales of fruits, vegetables, etc.	(holding) 83.98 (83.98)	Business transaction
   Zensho Factory Holdings Co., Ltd.	Minato-ku, Tokyo	60	Management of manufacturing companies	(holding) 100.00	Interlocking directorship Business transaction
   GFF Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Production of foods	(holding) 100.00 (100.00)	Interlocking directorship Business transaction Financial support etc.
   TR Factory Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Production of foods	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Sanbishi Co., Ltd. (Note 2)	Toyokawa, Aichi	13	Production of soy sauce, etc.	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Zensho Tradings Co., Ltd. (Note 1)	Minato-ku, Tokyo	80	Procurement and sale of food materials	(holding) 100.00	Business transaction Financial support etc.
   Tolona Japan Co., Ltd.	Minato-ku, Tokyo	10	Sales of frozen foods for home use, etc.	(holding) 100.00	Business transaction Financial support etc.
   Global Fresh Supply Co., Ltd.	Minato-ku, Tokyo	70	Provision of logistics service	(holding) 100.00	Business transaction Financial support etc.
   Global Table Supply Co., Ltd.	Minato-ku, Tokyo	30	Sales of supplies, equipment, etc.	(holding) 100.00	Business transaction Financial support etc.
   Techno Construction Co., Ltd.	Minato-ku, Tokyo	30	Design, construction and supervision of restaurants and stores	(holding) 100.00	Business transaction
   Zensho CooCa Co., Ltd.	Minato-ku, Tokyo	10	Trading of financial instruments	(holding) 100.00	Business transaction
   Nihon Kaigo Holdings Co., Ltd.	Minato-ku, Tokyo	10	Management of nursing care business	(holding) 100.00	Business transaction
   Kagayaki Co., Ltd. (Note 2)	Sapporo, Hokkaido	3	Nursing care business	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Royal House Ishioka Co., Ltd. (Note 2)	Ishioka, Ibaraki	50	Nursing care business	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Senior Life Support Co., Ltd. (Note 2)	Kawaguchi, Saitama	30	Nursing care business	(holding) 100.00 (100.00)	Business transaction Financial support etc.
   Nyereg Co., Ltd. (Note 2)	Ama, Aichi	3	Nursing care business	(holding) 100.00 (100.00)	Business transaction Financial support etc.

   Name	Location	Share capital /investments (Million yen)	Major business	Ratio of voting rights holding/held (%)	Details of relationship
   IMedicare Co., Ltd. (Note 2)	Matsudo, Chiba	50	Nursing care business	(holding) 100.00 (100.00)	Business transaction
   Human Logic Laboratory Co., Ltd.	Minato-ku, Tokyo	10	HR strategy business	(holding) 100.00	Business transaction
   Jinzai Co., Ltd.	Minato-ku, Tokyo	35	International HR recruitment support business	(holding) 100.00	Business transaction
   Zenshoen Co., Ltd. (Note 3)	Hiroo-gun, Hokkaido	9	Livestock business	(holding) 49.45	Business transaction Financial support etc.
   Mizushita Farm Co., Ltd. (Note 3)	Hiroo-gun, Hokkaido	3	Livestock business	(holding) 49.66	Financial support etc.
   Global IT Service Co., Ltd.	Minato-ku, Tokyo	10	IT business	(holding) 100.00	Interlocking directorship Business transaction
   Zensho Best Crew Co., Ltd.	Minato-ku, Tokyo	10	Recruiting operation	(holding) 100.00	Business transaction
   Zensho Business Service Co., Ltd.	Minato-ku, Tokyo	10	Self-supporting for challenged persons	(holding) 100.00	Business transaction Financial support etc.
   Zensho Store Support Co., Ltd.	Minato-ku, Tokyo	10	Self-supporting for challenged persons	(holding) 100.00	Business transaction
   Zensho Clean Energy Co., Ltd. (Note 2)	Minato-ku, Tokyo	10	Natural energy business	(holding) 100.00 (100.00)	Business transaction
   Kagayaki Nursery School Co., Ltd.	Minato-ku, Tokyo	10	operating in-house nursery facilities	(holding) 100.00	Business transaction Financial support etc.
   Zensho Insurance Service Co., Ltd.	Minato-ku, Tokyo	10	Nonlife insurance agency business	(holding) 100.00	Business transaction
   Seiun Sake Brewery Co., Ltd.	Hiki-gun, Saitama	10	Brewing business	(holding) 100.00	Business transaction Financial support etc.
   Global MD Holdings Co., Ltd.	Minato-ku, Tokyo	10	Domestic and international procurement	(holding) 100.00	Financial support etc.
   Marix Co., Ltd. (Note 2)	Izumi, Kagoshima	25	Aquaculture business	(holding) 100.00 (100.00)	-
   Igarashi Marine Products Co., Ltd. (Note 2)	Amakusa, Kumamoto	5	Aquaculture business	(holding) 100.00 (100.00)	Business transaction
   Zensho Rice Co., Ltd.	Minato-ku, Tokyo	10	Sales of rice	(holding) 100.00	Business transaction Financial support etc.
   Saito Shoten Co., Ltd. (Note 2)	Shirakawa, Fukushima	8	Sales of rice	(holding) 100.00 (100.00)	Financial support etc.
   Shinagawa Design Co., Ltd.	Minato-ku, Tokyo	10	UX design business	(holding) 100.00	Interlocking directorship Business transaction
   Zensho USA Corporation (Note 1)	California, USA	10 Thousand USD	Management of Americas business	(holding) 100.00	Business transaction
   Advanced Fresh Concepts Corp. (Notes 2)	California, USA	100 Thousand USD	Management of take-out sushi stores (directly- operated and franchise)	(holding) 100.00 (100.00)	-
   Pocino Foods Company (Notes 2)	California, USA	28,904 Thousand USD	Processing and sales of meat products	(holding) 100.00 (100.00)	Financial support etc.
   Zensho Food de Mexico S.A. de C.V. (Note 2)	Mexico	515,520 Thousand MXN	Management of Gyudon chain, Sukiya	(holding) 100.00 (100.00)	-
   Zensho do Brazil Comercio de Alimentos Ltda. (Notes 1 and 2)	San Paulo, Brazil	210,337 Thousand BRL	Management of Gyudon chain, Sukiya	(holding) 100.00 (100.00)	-
   Zensho China Holdings Co., Ltd. (Note 1)	Shanghai, China	850,315 Thousand CNY	Management of China business	(holding) 100.00	Interlocking directorship Business transaction etc.

   Name	Location	Share capital /investments (Million yen)	Major business	Ratio of voting rights holding/held (%)	Details of relationship
   Zensho Restaurant (Shanghai) Co., Ltd.（Notes 1 and 2）	Shanghai, China	327,975 Thousand CNY	Management of Gyudon chain, Sukiya	(holding) 100.00 (100.00)	-
   Zensho Hong Kong Co., Ltd.	Hong Kong China	119,100 Thousand HKD	Management of Gyudon chain, Sukiya	(holding) 100.00	Interlocking directorship
   Zensho Taiwan Co., Ltd.	Taipei, Taiwan	552,400 Thousand TWD	Management of Gyudon chain, Sukiya	(holding) 100.00	-
   Zensho South East Asia Holdings Pte. Ltd. (Note 1)	Singapore	145,924 Thousand SGD	Management of South East Asia business	(holding) 100.00	Interlocking directorship
   Zensho (Thailand) Co., Ltd. (Note 2 and 3)	Thailand	6,000 Thousand THB	Management of Gyudon chain, Sukiya	(holding) 49.00 (49.00)	Interlocking directorship Business transaction Financial support etc.
   PT. Zensho Indonesia	Indonesia	131,668,121 Thousand IDR	Management of Gyudon chain, Sukiya	(holding) 51.00	Interlocking directorship Financial support etc.
   Zensho Japanese Restaurant Company Pte.Ltd. (Note 2)	Singapore	12,760 Thousand SGD	Management of ramen specialty restaurants, ICHIKOKUDO	(holding) 100.00 (100.00)	-
   Zensho Holdings Malaysia Sdn. Bhd. (Notes 1 and 2)	Kuala Lumpur, Malaysia	309,065 Thousand MYR	Management of Malaysia business	(holding) 100.00 (100.00)	-
   Zensho Foods Malaysia Sdn. Bhd. (Note 2)	Kuala Lumpur, Malaysia	71,000 Thousand MYR	Management of Gyudon chain, Sukiya	(holding) 100.00 (100.00)	-
   Zensho Ichiban Malaysia Sdn. Bhd. (Note 2)	Kuala Lumpur, Malaysia	18,500 Thousand MYR	Management of ramen specialty restaurants, ICHIBAN	(holding) 100.00 (100.00)	-
   Zensho Vietnam Co., Ltd. (Note 2)	Vietnam	269,996,853 Thousand VND	Management of Gyudon chain, Sukiya	(holding) 100.00 (100.00)	Business transaction
   Zensho (Philippines), Inc.	Philippines	150,000 Thousand PHP	Management of Gyudon chain, Sukiya	(holding) 70.00	-
   TCRS Restaurants Sdn.Bhd. (Note 2)	Kuala Lumpur, Malaysia	17,180 Thousand MYR	Management of chicken rice specialty restaurants, etc.	(holding) 100.00 (100.00)	-
   Zensho Europe Holdings B.V.	Netherlands	1 EUR	Management of Europe business	(holding) 100.00	Interlocking directorship
   Worldfood To Go, S.L. (Note 2)	Spain	16 Thousand EUR	Management of take-out sushi stores (directly-operated and franchise)	(holding) 100.00 (100.00)	-
   Sushi Circle Gastronomie GmbH (Note 2)	Germany	1,000 Thousand EUR	Management of take-out sushi stores	(holding) 100.00 (100.00)	-
   Zensho International Food Service Limited (Note 1)	United Kingdom	345,786 Thousand GBP	Holding company of take-out sushi business	(holding) 100.00	Interlocking directorship
   Zensho International Limited (Note 1)	United Kingdom	260,537 Thousand GBP	Holding company of take-out sushi business	(holding) 100.00	Interlocking directorship Financial support etc.
   Zensho International UK Limited (Note 1,2)	United Kingdom	614,016 Thousand GBP	Holding company of take-out sushi business	(holding) 100.00 (100.00)	Interlocking directorship
   Wonderfield TopCo Limited (Note 1,2)	United Kingdom	14,939 Thousand GBP	Holding company of take-out sushi business	(holding) 100.00 (100.00)	-

   Name	Location	Share capital /investments (Million yen)	Major business	Ratio of voting rights holding/held (%)	Details of relationship
   Wonderfield Group Limited (Note 1,2)	United Kingdom	207,017 Thousand GBP	Holding company of take-out sushi business	(holding) 100.00 (100.00)	-
   Wonderfield US Holdco, LLC (Note 1,2)	Delaware USA	113,251 Thousand USD	Holding company of take-out sushi business in USA	(holding) 100.00 (100.00)	-
   Wonderfield US Holdco, Inc (Note 1,2)	Delaware USA	75,095 Thousand USD	Holding company of take-out sushi business in USA	(holding) 100.00 (100.00)	-
   JFE Franchising, Inc. (Note 2)	Texas USA	300 Thousand USD	Management of take-out sushi stores (directly- operated and franchise)	(holding) 100.00 (100.00)	-
   Bento Inc. (Note 2)	Ontario Canada	1 CAD	Management of take-out sushi stores (directly- operated and franchise)	(holding) 100.00 (100.00)	-
   Bento Nouveau Inc. (Note 2)	Delaware USA	87 USD	Management of take-out sushi stores (directly-operated and franchise)	(holding) 100.00 (100.00)
   Bento Sushi Franchise Inc. (Note 2)	Delaware USA	99 USD	Management of take-out sushi stores (directly-operated and franchise)	(holding) 100.00 (100.00)	-
   Taiko Foods Limited (Note 2)	United Kingdom	83 Thousand GBP	Take-out sushi business	(holding) 100.00 (100.00)	-
   YO! Sushi UK Limited (Note 2)	United Kingdom	1 Thousand GBP	Management of take-out sushi stores (directly-operated and franchise)	(holding) 100.00 (100.00)	-
   75 other companies
   Associates accounted for by the equity method
   MARUI Wasabi, Inc. (Note 2)	California, USA	2,383 Thousand USD	Production of powdered Wasabi	(holding) 50.00 (50.00)	Interlocking directorship

   Notes 1. Classified as specified subsidiaries.

   1. The figure in parentheses in the "Ratio of voting rights holding/held" column shows the indirect ownership ratio included in the total.

   2. Although the Company's shareholding is less than 50/100, it is regarded as a subsidiary because the Company has substantial control.

   3. Net sales (excluding inter-company sales between consolidated companies) of Sukiya Co., Ltd. is over 10% of consolidated net sales.

      Primary profit (loss) information, etc. (Million yen)

      (1)	Net sales:	246,226
      (2)	Ordinary profit:	24,890
      (3)	Profit:	16,316
      (4)	Net assets:	29,829
      (5)	Total assets:	66,376

   4. Net sales (excluding inter-company sales between consolidated companies) of Hamasushi Co., Ltd. is over 10% of consolidated net sales.

   Primary profit (loss) information, etc. (Million yen)

   (1)	Net sales:	228,020
   (2)	Ordinary profit:	19,953
   (3)	Profit:	13,513
   (4)	Net assets:	32,840
   (5)	Total assets:	81,211

2. ‌Employees

   1. Consolidated basis

      (As of March 31, 2025)

      Reporting Segment	Number of employees (Persons)
      Global Sukiya	4,893	(19,436)
      Global Hamasushi	1,951	(22,966)
      Global Fast Food	6,960	(8,436)
      Restaurants	884	(13,584)
      Retail	754	(2,512)
      Corporate and Support	2,295	(1,785)
      Other	1,005	(621)
      Total	18,742	(69,340)

      Notes: 1. Number of employees represents the number of active employees.

      2. The number in parentheses refers to part-time employees (176 hours per month converted to one person), which is excluded from the number of employees.

   2. Non-consolidated basis

      (As of March 31, 2025)

      Number of employees (Persons)	Average age (Years old)	Average length of service (Years)	Average annual salary (Thousand yen)
      852 (132)	40.1	9.1	8,167

      Notes:1. Number of employees include seconded personnel from other companies to the Company (68employees) but exclude seconded personnel from the Company to other companies (883employees).

      1. The number in parentheses refers to part-time employees (176 hours per month converted to one person), which is excluded from the number of employees.

      2. Average annual salary includes bonuses and other non-standard wages.

      3. Segment information is omitted as "Corporate and Support" is the only reporting segment of the Company.

   3. Labor unions

      The Group has Zensho Employees Association Network (ZEAN) and several unions at the operating company level. Each union is the member of Zensho Group Workers Union (ZWF). As of March 31, 2025, the number of ZEAN members is 58,081, and the number of ZWF members is 144,973. The relationships between the Company, subsidiaries, associates and these labor unions are quite cooperative and stable.

   4. Percentage of female workers in management positions, percentage of male workers taking childcare leave, and differences in wages between male and female workers

(i) The company

Notes:1. Calculated in accordance with the provisions of the "Act on the Promotion of Women's Active Engagement in Professional Life" (Act No. 64 of September 4, 2015).

1. Based on the provisions of the "Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Member" (Act No. 76 of May 15, 1991), the percentage of child care leave, etc. taken is calculated as per Article 71-4-1 of the "Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members" (Ordinance of the Ministry of Labor No. 25 of October 15, 1991).

2. Calculated at the company where the employee works (seconded personnel are included in the destination companies).

3. Calculated at the employing company (seconded personnel are included in the source companies).

(ⅱ) Consolidated subsidiaries

Notes:1. Calculated in accordance with the provisions of the "Act on the Promotion of Women's Active Engagement in Professional Life" (Act No. 64 of September 4, 2015).

1. Based on the provisions of the "Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Member" (Act No. 76 of May 15, 1991), the percentage of child care leave, etc. taken is calculated as per Article 71-6-1 of the "Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members" (Ordinance of the Ministry of Labor No. 25 of October 15, 1991).

2. Part-time and fixed-term workers are calculated based on the number of full-time equivalents.

3. Calculated at the company where the employee works (seconded personnel are included in the destination companies).

4. Calculated at the employing company (seconded personnel are included in the source companies).

1. ‌BUSINESS OVERVIEW

   1. ‌Management Policy, Business Environment and Issues to Be Addressed, etc.

      Forward-looking statements in this document are based on the judgment of the Group at the current fiscal year-end.

      1. Management Policy

         To remain a company "responsible for the stability and development of human society", further evolving the corporate founding philosophy of "Eradicating hunger and poverty from the world", the Group fulfils this responsibility through the creation of "food infrastructure" which the whole of humanity can live together peacefully by seeking to overcome conflicts arising from differences in race, religion, and ethnicity and by cooperating with each other. For this purpose, the Group develops a wide range of food businesses and is expanding globally with the mission of providing safe, delicious food at affordable prices to people around the world. To provide safe and delicious products and quality services to customers, the Group strives to develop a mass merchandising system (MMD) to plan and design all processes ranging from menu development through food procurement, production, processing, logistics and sales, and to implement integrated control of these processes.

         By practicing MMD, the Group will develop restaurants and stores that can be easily used by a wider range of customers at any time, further expand the business and improve efficiency, and strive to increase shareholder value.

      2. Business Environment

         The business environment surrounding the Group was affected by the prolonged situation in Ukraine and soaring prices of rice and increased prices of imported beef and other ingredients in Japan. Meanwhile, the recovery of foot traffic, normalization of economic activity and improvement in employment and income conditions continued to support a rebound in personal consumption from the previous period.

      3. Business and financial issues to be addressed with priority

         In implementing the management policy and the medium-term business plan stated in (i) and (iv), the business and financial issues to be addressed with priority are as follows:

         (Business and financial issues to be addressed)

         1. Pursuit of food safety

            The Group places the highest priority on providing safe food to its customers. Based on CODEX standards (global standards for food safety), the Group Food Safety Standard Division sets its own standards, provides food safety education to all employees, and provides food safety information to its suppliers and business partners.

            In the entire food chain of procurement, manufacturing, logistics, and sales, the traceability of food safety is guaranteed through the completion of food safety management by each group company.

            The safety of raw materials, packaging materials, and products is guaranteed by analyzing and inspecting hazards (factors that hinder health) at its Central Research Center and Microbiology Testing Center.

            In addition, the Group takes the incidents of contamination with foreign objects or substances that have been experienced since January 2025 with the utmost seriousness, and the Group will implement the following countermeasures to improve in-store conditions, especially in each business category involved in restaurant operations.

            1. Allocation of adequate time for cleaning, including temporary closures of restaurants during late-night hours

            2. Regular inspection and repair of cracks, holes, and other proximity breaches that may lead to infestations by harmful insects or rodents; systematic renovation of aging restaurants

            3. Review of restaurant design to reinforce against infestation and inhabitation by harmful insects or rodents and enhance ease of cleaning processes

            4. Thorough education for employees on safety and hygiene

         2. Evolution of the Mass Merchandising System (MMD)

            In order to ensure that customers can enjoy safe and delicious products with peace of mind, the Group has continued to ensure

            safety through MMD, while expanding its operations and pursuing group synergies with the aim of improving business performance. In addition, in consideration of the accelerated pace of overseas store openings, the Group will strengthen its procurement network through overseas bases, while pursuing food safety, improving product quality, and improving costs.

         3. Evolution of brands

            The Group will strive to evolve its brands in all aspects to meet the ever-evolving needs of its customers, to respond to their diverse lifestyles and to provide products, services and customer experiences that consistently exceed their expectations.

         4. Growth through restaurant and store openings and M&A

            The Group will continue to proactively open new restaurants and stores in Japan and overseas to enhance the profitability of its businesses. In addition, the Group will explore new business areas and further strengthen MMD by using M&A, and take measures to supply safe, high-quality food ingredients and promote the diversification of food.

         5. Recruitment and training in human resources

            Based on the idea that human resources are human capital that generates added value, the Group will hire excellent human resources who share Group's vision and develop human resources to support sustainable growth.

            In addition, the Group will promote diverse work styles including the advancement of female employees, strengthen mid-career recruitment and actively recruit and develop global human resources.

         6. Improvement of working environment

            To improve the working environment, the Group has implemented various improvement measures, including strengthening of compliance education for managers, establishment of a contact point and in-house training programs to prevent harassment, and enhancement of opportunities for dialogue with employees. The Group will continue to streamline operations through DX promotion, strengthen communication, and review the personnel evaluation system, salary system, and employee benefits to create a working environment where each employee can enhance his/her abilities and feel satisfaction and growth, thereby ensuring long-term stable employment.

         7. Establishment of a system to improve customer convenience and contribute to prompt business decisions

            The Group is building a system to improve customer convenience and productivity. Meanwhile, as a business management system, the Group is building a system to collect information on sales, inventory, etc. As the Group expands the sales bases of Group companies in Japan and overseas, the Group will further improve the efficiency of information collection and integration, and will also build a system and structure that will contribute to prompt decision making by management.

         8. Proactive approach to digital transformation (DX)

            Amid the rapid progress of digitalization, also known as the 4th Industrial Revolution, the utilization of artificial intelligence (AI), IoT, RPA, robots, and cloud computing has been accelerating. In stores, manpower reduction in both routine and non-routine labor is advancing due to technological innovations such as self-ordering, self-cashing, and robots, and the data utilization using IT. The Group will also promote the streamlining and automation of operations through proactive DX initiatives in each process, including stores, factories, logistics, and headquarters.

         9. Initiatives to ensure a stable supply of food ingredients

            The Group procures food ingredients used in its stores from both domestic and overseas sources, and is working to diversify its suppliers in order to address the risk of price increase due to climate change and exchange rate fluctuations in addition to challenges faced in procurement. In order to approach this issue, the Group will develop global bases for food ingredient procurement, gather information in and purchase directly from production areas, and strive to guarantee the procurement of safe, high-quality food ingredients.

            In addition, the Group will engage in analysis of the procurement risks presented by the recent phenomenon being referred to as the "Trump tariffs" from a global perspective, restructure its procurement network, and endeavor to develop new procurement channels.

      4. Objective management indicators, etc. for judging the achievement status of management goals

      The Group formulates medium-term management plans, and as Key Performance Indicators (KPI), sets targets for net sales, operating profit, ordinary profit, profit, operating profit to net sales ratio, ordinary profit to net sales ratio, profit to net sales ratio and ROE.

      The reason for focusing on the above KPI is to enable evaluations of progress and feasibility of the medium-term management policy, which refers a) profitability improvement of existing businesses, b) business expansion by new restaurant and store openings both in Japan and overseas, and c) development of personnel and improvement of working environment.

      The Group medium-term management plans and the targets of KPI are stated in "4. Management's Analysis on the Company's Financial Condition, Results of Operations and Cash Flow Conditions (2) Views and issues analyzed/discussed with regard to the status of results of operations, etc. from the management's perspective"

   2. ‌Philosophy and Initiatives for Sustainability

      Since its establishment in 1982, the Group has been committed to its management philosophy of "Eradicating hunger and poverty from the world" and has made it its mission "To provide safe, delicious food at affordable prices to people around the world" to achieve this goal. The "Zensho Group Charter," which is the guideline for the behavior of the Group members, begins with "The Zensho Group's Declaration," which states that through the development of its business, "We will realize a society in which all people are truly equal and which is capable of developing in a sustainable and harmonious way."

      The Group has further evolved its corporate philosophy and is committed to "taking responsibility for the stability and development of human society through food".

      To embody this philosophy, the Group is working to create a system that can stably supply "food" to all people as "food infrastructure" by developing a mass merchandising system (MMD) worldwide, in which all processes from food procurement to production, processing, logistics and sales are consistently planned, designed, and operated by the Group itself.

      In addition to business development as "food infrastructure," the Group has been engaged in its own direct fair trade since 2007. Currently, the Group is trading coffee and tea with 20 countries in Asia and Africa, and using the "social development funds" generated from fair trade, and the Group is engaged in social development support activities such as school construction, water supply facility improvement, and women's support. Through these activities, the Group will correct the imbalance in development brought by the negative aspects of capitalism and contribute to the realization of a sustainable world.

      The Group takes responsibility for the impact of its business activities on the global environment. The Group will act to ensure the sustainability of its business areas and the global environment itself through initiatives to issues closely related to its business areas, such as conservation of natural resources and use of food residues, in addition to such as the use of natural energy.

      Furthermore, based on the concept that human resources are "human capital," that generates added value, the Group is committed to human resource development and the creation of a workplace environment in which diverse human resources are active. As a global company originating from Japan, the Group established the " Zensho Japanese Culture Center " in Kyoto City in July 2021 to deepen understanding of its own culture to realize a society where multicultural people can live together in harmony. The Group will continue to make further efforts toward multicultural conviviality in the future.

      1. Governance

         The Board of Directors makes decisions on important matters such as sustainability policy and identification of materiality, evaluates medium- and long-term business risks and opportunities, and reflects them in management strategies based on an awareness of their impact on the business.

         The Company establishes the "Sustainability Committee" chaired by the director in charge of sustainability with the aim of further strengthening its sustainability management. The Sustainability Committee monitors initiatives and progress of sustainability-related issues focused on the materiality determined by the Board of Directors, and regularly reports the status of these activities to the Board of Directors. The "Global Environment Office," which directly reports to the director in charge of sustainability, serves as the secretariat of the Sustainability Committee and works with related departments and Group companies to aggregate information on the Group sustainability-related issues.

         The materialities decided by the Board of Directors are as below.

         • Stable supply of safe food to the world

         • Contribution to the regional community

         • Creation of a rewarding and worthwhile organization

         • Growth and prosperity with its partners

           Sustainability Committee

1. Strategy

   1. Risks and opportunities

      The Group has considered the risks and opportunities that its group faces as a result of climate change. The risks and opportunities of climate change include those arising from the "transition" to a low-carbon economy and society, such as tightening laws and regulations concerning GHG emissions, and those arising from "physical" changes, such as more severe weather disasters. The Group has extracted and identified "Transition Risks," "Physical Risks," and "Opportunities" to be addressed in its business areas as follows.

      Category	Risk Category (broad category)	Impact	Risk Category (subcategory)	Contents
      Transition Risks	Market Risk	Middle	Changes in consumer preferences and behavior	preferences
      	Technology Risk	Middle	Adapting to technological innovation
      	Policy and Legal Risks	Large	Rising costs due to introduction of carbon tax	introduction of a carbon tax
      			Rising energy costs
      			Tightening plastics regulations
      	Reputation Risk	Middle	Changes in consumer reputation	selection based on customer evaluations
      			Changes in investor reputation
      Physical Risks	Acute Risk	Large	Intensifying natural and weather disasters	disasters (e.g., typhoons)
      			Impact of water stress	weather conditions
      	Chronic Risk	Large	Increasing average temperature
      			Changes in precipitation and weather patterns
      Opportunities	Market	Middle	Changes in consumer preferences and behavior	preferences and behavior
      	Technology	Middle	Adapting to technological innovation
      			Development of renewable energy
      	Policy and Legal	Small	Addressing energy costs
      	Reputation	Small	Improving investor reputation
      	Climate Change (Acute)	Middle	Intensifying natural and weather disasters	adapt to extreme weather conditions

      • Decrease in sales of existing business categories due to changing customer

      • Rising costs due to delayed adaptation to DX and other technological innovations

      • Increase in raw material procurement and logistics costs due to the

      • Increase in energy costs due to higher fossil fuel and electricity prices

      • Increased costs due to changeover to alternative plastics

      • Increased public awareness of climate change response and progressive

      • Progressive selection of investment destinations by ESG investors

      • Damage to restaurants, stores, factories, and logistic facilities caused by natural disasters (e.g., earthquakes) or weather

      • Risk of water procurement due to heat waves, droughts, etc. caused by extreme

      • Deterioration of raw material quality and yield due to higher average temperatures

      • Impact of rising temperatures on livestock growth

      • Impact on higher feed prices

      • Price increases due to adverse impact on raw material production areas caused by changes in precipitation and weather patterns

      • Increase sales by developing new businesses and business categories in line with changes in customer

      • Improve productivity by promoting DX, robotization, etc.

      • Reduce carbon tax burden through renewable energy initiatives, etc.

      • Decrease in raw material procurement costs by streamlining business processes and facilities throughout the supply chain, including suppliers

      • Decrease in logistics costs by improving logistics efficiency

      • Improvement of procurement capability through Sustainability Bonds, etc. by enhancing the evaluation of ESG initiatives

      • Maintain customers by developing a supply system and infrastructure that can

      The identified "risks" and "opportunities" will be reflected in the Group's strategies and measures, and the Group will work toward the realization of a sustainable society.

   2. Policies and strategies for human resource development and internal environmental development

      With regard to investment in human capital, the Group strives to secure sufficient budgets for education and competitive compensation levels under its basic policy of developing competitive human resources through the education systems and qualification examination systems for each specialized field, proactive reassignment, and encouragement of self-development. The Group also believes that mutual understanding of multicultural conviviality is necessary for humankind to overcome conflicts arising from differences in race, religion, and ethnicity in times of uncertainty. As an organization for this purpose, the Company established the "Zensho Japanese Culture Center" in July 2021 to lay the foundation for future global expansion. Specifically, the Group is developing a training program based at an educational facility in Kyoto City to expose employees to Japanese culture and improve their education from April 2022.

      Policies on the development of human resources, including ensuring diversity of human resources, and policies regarding the development of the internal environment are as follows.

      1. Developing and securing human resources

         The Company has long described human resources as "human assets," and in the "Zensho Group Charter" that defines the code of conduct for employees, the Company has set "a vital organization that values diversity, independence and originality, in which everyone can work vibrantly" as one of the organizational goals. In the promotion of human assets, the Company is creating an environment that allows equal opportunity in the evaluation of abilities while considering diversity in terms of gender, nationality, work experience, and other factors. Specifically, the Company introduces a job rotation system which allows employees to develop their abilities while gaining experience in a variety of positions and provides training by department and job level, selective training to discover next-generation leaders, and training to experience Japanese culture. As part of its support for self-development, the Company also provides TOEIC examinations for English learning support and opportunities for multilingual learning, as well as selective language training for some employees.

         In addition, in discussions between management and the labor union, the Company has committed to "10 consecutive years of salary increases" in 2021, and this year, the union has also implemented an increase in starting salaries for university graduates and a 11.2% salary increase for full-time unionized employees. As a result, the cumulative wage increase rate for the last three years (2023 to 2025) is 36.7%. In an increasingly competitive market for human resources, the Company will continue to identify human resources to lead the organization, and to improve the number of recruits and retention rates.

      2. Promotion of females' activities and support for balancing work and childcare

         The following initiatives are underway with the aim of creating an organization in which female employees and employees raising children can play an active role by using their strengths, as well as a system to support them.

         • Establish a consultation service for female employees to support their work before childbirth leave, their return to work, and their work during childcare.

         • Establish a consultation service for male employees taking childcare leave.

         • Establish a system of shortened working hours for employees raising children up to elementary school age and introduce a staggered working hour system.

         • Expansion and structuring of the types of work and positions that can be performed by employees with shortened working hours.

         • Introduction of a leave system that can be used for nursing care of family members, infertility treatment, childcare, and participation in childcare events.

         • Posting of a booklet for pregnant and child-caring employees on the intranet.

      3. Internal environmental improvement

         The Company is promoting the following initiatives to make a company where everyone can work comfortably.

         • Stabilization of restaurant and store operations and improvement of services through community-based management

         • Preventing the occurrence of long working hours through the Time Management Committee

         • Ensure a safe and secure working environment by establishing a system of multiple late-night shifts (strengthening the security system)

         • Expansion of open restaurant and store operations by holding nationwide crew meetings

         • Maintain and improve the living standards of all employees and raise the level of service in restaurants and stores by improving the compensation of crew members

         • Reduce the workload associated with the establishment of take-out and self-ordering systems

         • Review of operations manuals to improve productivity and reduce crew workload at restaurants and stores through the use of DX.

      4. Safety and health of employees

   To ensure the safety and health of employees, the Company has the Health Support Office at the Shinagawa Head Office, staffed by qualified and experienced nurses and public health nurses, to promote mental and physical health. An industrial doctor visits the office several times a month to provide health-related consultations. Furthermore, the Company is a partner company in the Action for Companies Promoting Cancer Control, and are working to improve the cancer screening uptake rate. The Company provides subsidies for influenza vaccinations.

   As a system to support female in childbirth and childcare, the Company allow female to take leave for 6 weeks before childbirth and 8 weeks after childbirth, and both male and female can take childcare leave (until the child is up to 3 years old) and work shorter hours for childcare (until the child enters junior high school).

2. Risk management

   The Sustainability Committee confirms and evaluates the progress of initiatives in line with the "Materiality" identified by the Board of Directors and the "Risks" and initiatives to "Opportunities" for sustaining the business, and reports to the Board of Directors as appropriate. When changes to the Sustainability Policy or Materiality are required in environmental or social conditions changes, the Sustainability Committee will review the changes and submit them to the Board of Directors for final approval.

3. Indicators and Targets

The Company is addressing specifically based on policies of human resource development, including ensuring diversity of human resources and policies of the development of the internal environment described in the above "(2) Strategies", and also manages data of indicators related to them, but not all companies in the consolidated group implement such policies. For this reason, it is difficult to describe indicators for the Group, therefore the targets and results for the following indicators are those of the Company.

(1) Summary of operating results, etc.

Overview of the financial position, performance of business, and cashflow (hereinafter, the "Performance of business, etc.") of the Group for the current fiscal year were as follows.

(i) Details of consolidated financial position and financial results

In the current fiscal year (from April 1, 2024 to March 31, 2025), consolidated business performance was net sales of 1,136,684 million yen (up 17.7% year-on-year), operating profit of 75,128 million yen (up 39.9% year-on-year), ordinary profit of 71,890 million yen (up 41.2% year-on-year), and profit attributable to owners of parent of 39,290 million yen (up 28.0% year-on-year). The business environment surrounding the Group was affected by the prolonged situation in Ukraine and soaring prices of rice and increased prices of imported beef and other ingredients in Japan. Meanwhile, the recovery of foot traffic, normalization of economic activity and improvement in employment and income conditions continued to support a rebound in personal

consumption from the previous period.

In the Group as well, demand was on the rise, with more families and groups utilizing relevant services mainly in the restaurant industry.

Under these circumstances, year-on-year same restaurant and store sales in each reporting segment were: 109.8% in Global Sukiya, 117.1% in Global Hamasushi, 108.8% in Global Fast Food, 111.7% in Restaurants, and 98.2% in Retail.

As of the end of the fiscal year ended March 31, 2025, the number of restaurants and stores was 15,419 (including 8,559 franchises), the result of 880 restaurant and store openings and 570 closures.

An overview of conditions by business segment is provided below. Additionally, references to net sales are net sales to external customers.

(Global Sukiya)

Net sales of Global Sukiya during the current fiscal year were 295,757 million yen (up 11.5% year-on-year) with operating profit of 24,508 million yen (up 32.4% year-on-year).

"Sukiya" has locations in Japan, China, Southeast Asia, and Central and South America, providing its mainstay Gyudon to

families and groups with safety, good flavor, and reasonable pricing.

At domestic "Sukiya," the Group provided a wide selection of various dishes, including "Gyudon with Cod Caviar Mayo & Cheese," "Sukiyaki Style Gyudon with Raw Egg," "Salmon Caviar Rice Bowl," and"Gyudon with Bibimbap."

In addition, since January 2025, some domestic Sukiya restaurants have experienced incidents of their products being

contaminated with foreign objects or substances. The Group has taken these incidents seriously and temporarily suspended operations at all restaurants except for some restaurants for 4 days starting on March 31, implementing thorough cleaning and other relevant countermeasures.

The number of restaurants in this reporting segment as of the end of the current fiscal year was 2,621 (1,969 domestic, 652 overseas), the result of 97 restaurant openings and 108 closures.

(Global Hamasushi)

Net sales of Global Hamasushi during the current fiscal year were 248,495 million yen (up 26.1% year-on-year) with operating profit of 21,352 million yen (up 87.0% year-on-year).

Hamasushi has locations mainly in Japan and China, providing menu items such as sushi, prepared with fresh seafood, alongside side menu items including noodles, desserts, and drinks. These foods are enjoyed by everyone, from children to adults.

The number of restaurants in this reporting segment as of the end of the current fiscal year was 735 (639 domestic, 96 overseas), the result of 70 restaurant openings and 2 closures.

(Global Fast Food)

Net sales of Global Fast Food during the current fiscal year were 314,125 million yen (up 28.9% year-on-year) with operating profit of 29,150 million yen (up 108.7% year-on-year).

"Nakau," a Japanese fast food chain, provides a wide variety of foods at affordable prices, mainly with oyakodon rice bowl dishes and Kyoto style udon noodles. "AFC," "SNOWFOX," "YO!," "Bento" and "Sushi Circle" provide sushi and other

takeout foods mainly in North America and Europe. This reporting segment also includes "Lotteria," a hamburger restaurant chain, "Katsuan," a tonkatsu specialty restaurant, "Kyubeiya," which serves Musashino style udon noodles and "The Chicken Rice Shop," a halal certified chicken rice specialty restaurant.

The number of restaurants and stores in this reporting segment as of the end of the current fiscal year was 10,732 (960 domestic, 9,772 overseas; including 8,482 franchises), the result of 703 restaurant and store openings and 443 closures.

(Restaurants)

Net sales of Restaurants during the current fiscal year were 156,085 million yen (up 10.9% year-on-year) with operating profit of 11,393 million yen (up 53.6% year-on-year).

"Coco's," a standard restaurant chain, has made efforts to improve its business performance by enhancing product

competitiveness through active introduction of fair menus with a focus on seasonality, pursuing authentic taste rivaling specialty restaurants, and improving the standard of services to enable customers to enjoy meals with satisfaction. This reporting segment also includes "Jolly Pasta," a pasta specialty restaurant chain, "Big Boy," a chain of hamburger steak and steak restaurants, "Jukusei Yakiniku Ichiban," a barbeque chain that offers carefully selected beef, "OLIVE HILL," an Italian cuisine specialty restaurant chain, and "Hanaya Yohei," a Japanese cuisine chain.

The number of restaurants in this reporting segment as of the end of the current fiscal year was 1,186 (1,185 domestic, 1 oversea; including 77 franchises), the result of 7 restaurant openings and 10 closures.

(Retail)

Net sales of Retail during the current fiscal year were 76,032 million yen (down 3.1% year-on-year) with an operating loss of 1,794 million yen (operating loss of 924 million yen in the fiscal year ended March 31, 2024).

This reporting segment includes "Maruya" and "Joy Foods," supermarkets with locations primarily in the North Kanto area, and "United Veggies," which operates fruit and vegetable stores.

The number of stores in this reporting segment as of the end of the current fiscal year was 126, the result of 1 store opening and 7 closures.

(Corporate and Support)

Net sales of Corporate and Support during the current fiscal year were 4,887 million yen (up 9.7% year-on-year) with operating loss of 7,418 million yen (operating profit of 3,948 million yen in the fiscal year ended March 31, 2024).

This reporting segment includes GFF CO., LTD, which manufactures and processes food, Global Fresh Supply Co., Ltd., which manages logistics functions, and Global Table Supply Co., Ltd., which procures uniforms, equipment, etc.

(Other)

Net sales of Others during the current fiscal year were 41,300 million yen (up 14.8 % year-on-year) with an operating loss of 2,002 million yen (operating loss of 605 million yen in the fiscal year ended March 31, 2024).

This segment includes Tolona Japan Co., Ltd., which plans, develops, and sells frozen foods for home use, etc., Sanbishi Co., Ltd., which manufactures and sells soy sauce and dressing, etc., Kagayaki Co., Ltd., which operates the nursing business, and Zensho Rice Co., Ltd., which sells brown and milled rice.

Assets amounted to 813,109 million yen as of the end of the current fiscal year, an increase of 65,052 million yen compared with the previous fiscal year-end. This was mainly due to increases in property, plant and equipment.

Liabilities amounted to 572,737 million yen as of the end of the current fiscal year, an increase of 39,333 million yen compared with the previous fiscal year-end. This was mainly due to increases in interest-bearing liabilities.

Net Assets came at 240,371 million yen as of the end of the current fiscal year, an increase of 25,719 million yen compared with the previous fiscal year-end. This was mainly due to an increase in retained earnings.