Japan Asia Investment : Qualitative Information on Consolidated Operating Results for the Year Ended Mar. 31, 2023

This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. JAIC assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

Qualitative Information on Consolidated Operating

Results for the year Ended March 31, 2023

(1) Outline of consolidated operating results

The consolidated operating results of the JAIC Group for the current fiscal year under review (from April 1, 2022 to March 31, 2023) recorded operating revenue of 3,872 million yen (up 20.9% year-on-year), operating gross profit of 1,419 million yen (up 15.1% year-on-year), operating profit of 11 million yen (compared to operating loss of 237 million yen for the previous fiscal year), ordinary loss of 126 million yen (compared to ordinary loss of 412 million yen for the previous fiscal year) and loss attributable to owners of parent of 295 million yen (compared to profit attributable to owners of parent of 19 million yen for the the previous fiscal year). The breakdown of operating results are as follows.

1. Breakdown of operating revenue and operating cost (Fund management fees)
   Fund management fees etc. consist of management fees and administrative fees from investment funds. Fund management fees etc. were 113 million yen (down 3.1% year-on-year), about the same as year- on-year. Both fees decreased, those the management fees from funds in liquidation process and administrative fees.

(Investment income)

The proceeds of sale of operational investment securities increased to 2,071 million yen (up 19.6% year-on-year). Realized capital gain, which is calculated by deducting cost of securities sold from proceeds of sales of operational investment securities, decreased to 754 million yen (down 10.7% year-on-year) due to capital loss of some operational investment

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securities. The total amount of investment write-offs and provision for allowance for possible investment losses increased to 316 million yen (up 97.9% year-on-year). Compared to the previous fiscal year, JAIC posted provisions for investee companies which were relatively large investment amounts. As a result, investment income, which is calculated by deducting investment write-offs and provision for allowance for possible investment losses from realized capital gains, decreased to 437 million yen (down 36.1% year-on-year).

As for project-oriented investment, for the previous fiscal year, JAIC had sold one mega solar project and had partially sold one distribution warehouse project. On the other hand, for the current fiscal year under review, JAIC only sold one mega solar project. As a result, both decreased, those the proceeds of sale of operational investment securities and the realized capital gains. JAIC posted provisions for an investee company which experienced significant delays in business progress. As a result, investment loss incurred.

As for private equity investment, for the previous fiscal year, JAIC had mainly sold listed shares in Japan. For the current fiscal year under review, JAIC earned realized capital gains from listed shares in Japan and from unlisted shares with relatively large investment amounts in Japan and overseas. On the other hand, JAIC posted realized capital losses from some investee companies whose business conditions have deteriorated and those with a lower expected investment collection. As a result, the proceeds of sale of operational investment securities increased but the realized capital gains remained about the same as year-on-year.

JAIC posted provisions for investee companies with relatively large investment amounts since these companies experienced significant delays in business progress. As a result, investment income decreased year-on-year.

(Fund interests income, etc.)

Fund interests income, etc. consist of revenues of the projects operated by the JAIC Group (such as revenue from electricity sales, revenue from vegetable sales, rent fee revenue from group homes for the handicapped and other revenues), interests income from the projects operated by other companies (such as net profits of the projects and gains from the

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sale of projects), interests income from the private equity funds operated by other companies, interest and dividend income and other income. The total amount of fund interests income, etc. for the current fiscal year under review increased to 1,668 million yen (up 25.5% year-on-year). Out of this, revenues of the projects operated by the JAIC Group accounted for 742 million yen (down 35.9% year-on-year). Revenue from electricity sales decreased because JAIC had sold some mega solar projects that were selling electricity in the previous fiscal year.

The total of Interests income from the projects operated by other companies and from the private equity funds operated by other companies increased to 384 million yen (up 161.1% year-on-year). One healthcare project operated by other company posted capital gain from selling the facility for the elderly.

Interest and dividend income increased to 539 million yen (up 2,088.8% year-on-year). JAIC received profit dividends from two logistic warehouse projects and one other project those sold their facilities.

(Fund interests losses, etc.)

Fund interests losses, etc. consist of costs of the projects operated by the JAIC Group (such as cost of electricity sales, cost of producing vegetables, rental cost of group homes for the handicapped and other costs), interests losses from the projects operated by other companies (such as losses mainly from projects in the early stage of launch) and interests losses from the private equity funds operated by other companies and others.

The total amount of fund interests losses etc. for the current fiscal year under review decreased to 806 million yen (down 11.7% year-on-year). Out of this, costs of the projects operated by the JAIC Group accounted for 661 million yen (down 22.3% year-on-year). Cost of electricity sales decreased because JAIC had sold some mega solar projects that were selling electricity in the previous fiscal year.

The total of Interests losses from the projects operated by other companies and from the private equity funds operated by other companies increased to 145 million yen (up 129.6% year-on-year). Interests losses increased mainly from the projects those experienced delays in business progress and those were in the initial stages of

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development.

As a result, operating revenue increased by 20.9% year-on-year to 3,872 million yen, operating cost increased by 24.4% year-on-year to 2,453 million yen and operating gross profit increased by 15.1% year-on-year to 1,419 million yen.

1. Selling, general and administrative expenses and operating income The total amount of selling, general and administrative expenses decreased to 1,408 million yen (down 4.2% year-on-year). Administrative expenses from projects decreased because JAIC had sold some mega solar projects in the previous fiscal year.

As a result, operating profit was 11 million yen (compared to operating loss of 237 million yen for the previous fiscal year).

1. Non-operatingincome, non-operating expenses and ordinary income Non-operating income decreased to 50 million yen (down 38.9% year-on- year). Main reason was a decrease of foreign exchange gains incurred when recovering assets denominated in foreign currencies.
   Non-operating expenses mainly consists of interest expenses and decreased to 188 million yen (down 26.7% year-on-year). On the non- consolidated basis, interest expenses decreased with the reduction of loans payable. On the consolidated basis, interest expenses also decreased with the reduction of loans payable because JAIC had sold some mega solar projects in the previous fiscal year.

As a result, ordinary loss was 126 million yen (compared to ordinary loss of 412 million yen for the previous fiscal year).

1. Extraordinary income/loss and profit/loss attributable to owners of parent
   For the current fiscal year under review, JAIC did not posted large amount extraordinary income or large amount extraordinary loss.
   Income tax-current increased to 45 million yen (up 902.1% year-on-year) because taxable income incurred.

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JAIC properly estimated tax effect accounting and did not recognize deferred tax assets for both the current fiscal year under review and the previous fiscal year.

Profit attributable to non-controlling shareholders is the profit attributable to fund investors other than the JAIC Group among the profits of the funds subject to consolidation. The amount decreased to 123 million yen (down 68.6% year-on-year) as the profits of the funds subject to consolidation decreased.

As a result, loss attributable to owners of parent amounted to 295 million yen (compared to profit attributable to owners of parent of 19 million yen for the previous fiscal year).

(2) Cash flows

(Cash flow from operating activities)

Net cash generated from operating activities turned profitable and amounted to 157 million yen (compared to 145 million yen used in for the previous fiscal year). Cash inflow from collection of investments increased.

(Cash flow from investing activities)

Net cash generated from investing activities was 0 million yen (compared to 212 million yen generated from for the previous fiscal year). There were no proceeds from sale of non-operational investment securities for the current fiscal year under review.

(Cash flow from financing activities)

Net cash used in financing activities with repayments of long-term borrowings decreased year-on-year to 806 million yen (compared to 1,007 million yen used in for the previous fiscal year).

Cash and cash equivalents as of March 31, 2023 decreased by 635 million yen from March 31, 2022 to 1,762 million yen, after adding effect of exchange rate change on cash and cash equivalents of 11 million yen.

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