MIRARTH : Earnings Document

Consolidated Financial Report for the Fiscal Year Ended March 31, 2023 [Japanese GAAP]

May 15, 2023

Listed company

Stock Exchange Listings

MIRARTH HOLDINGS, Inc.

Prime market

name

of the Tokyo Stock Exchange

Security code

8897

URL https://mirarth.co.jp/en/

Representative

(Job title)

Representative Director

(Name) Kazuichi Shimada

Director and Executive

Contact person

(Job title)

Managing Director, Executive

(Name) Masashi Yamamoto

TEL [phone]

Officer

Scheduled date of Annual

Scheduled date for

June 23, 2023

commencement of

June 26, 2023

Shareholders' Meeting

dividend payments

Scheduled date for submission

June 23, 2023

of Report securities

Financial Results: Availability of Supplementary Explanations materials: Yes

Holding of financial results meeting: Yes (for institutional investors and analysts)

(Amounts are rounded down to the nearest million yen)

1. Consolidated Operating Results for the Fiscal Year Ended March 31, 2023 (From April 1, 2022 to March 31, 2023)

(1) Consolidated Operating Results

(Percentages indicate year-on-year changes)

Net sales

Operating income

Ordinary income

Net income attributable

to owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Year ending March 31, 2023

153,472

△5.7

7,030

△40.8

5,033

△50.9

4,584

△26.2

Year ending March 31, 2022

162,744

-

11,877

-

10,258

-

6,215

-

(NOTE)Comprehensive Year ending

Year ending

Millions

income

March 31, 2023

3,852Millions of yen (△38.8%)

March 31, 2022

6,293of yen

(-%)

Diluted Net income per

Total assets Ordinary

Net sales

Net income per share

Return on equity

Operating income

share

income rate

rate

Yen

Yen

%

%

%

Year ending March

41.90

41.58

7.6

1.8

4.6

31, 2023

Year ending March

57.10

56.69

11.0

4.8

7.3

31, 2022

(Reference) Equity in earnings

Year ending

Millions

Year ending

Millions

of affiliates

March 31, 2023

△219of yen

March 31, 2022

△138of yen

(NOTE)Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, 2020 31-Mar) and other standards have been applied from the beginning of the fiscal year under End of Previous Consolidated Accounting Period, and figures related to Year ending March 31, 2022 have been calculated after the application of the said accounting standard and the rate of change from the previous fiscal year is not presented.

(2)Consolidated Financial Position

	Total assets		Net assets		Equity ratio	1 Shares Per share Net
			assets
	Millions of yen	Millions of yen		%	Yen
Year ending March	341,669		65,142		18.0	558.95
31, 2023
Year ending March	223,473		59,601		26.5	542.04
31, 2022
Reference: Shareholders'Year ending		Millions	Year ending	Millions
equity	March 31, 2023	61,377of yen	March 31, 2022	59,109of yen
(3)Consolidated Cash Flows
	Cash flow from operating	Cash flow from investing	Cash flow from financing	Cash and cash equivalents
	activities		activities		activities	Term end Balance
	Millions of yen	Millions of yen		Millions of yen	Millions of yen
Year ending March		△722		△46,354		61,531	47,148
31, 2023
Year ending March	23,189		△27,871		△1,132	32,693
31, 2022

2.Dividends

		Annual Cash Dividends per Share		Total	Dividend	Net assets
						Dividends
	End of first	End of second	End of third			dividend	payout ratio
	Term end	Total	amount	(Consolidat	Ratio
	quarter	quarter	quarter	(Consolidat
			(Total)	ed)
						ed)
	Yen	Yen	Yen	Yen	Yen	Millions of	%	%
	yen
Year ending March
-	4.00	-	14.00	18.00	1,962	31.5	3.5
31, 2022
Year ending March	-	4.00	-	18.00	22.00	2,413	52.5	4.0
31, 2023
Year ending March	-	6.00	-	18.00	24.00		31.0
31, 2024 (Forecast)

(NOTE)Breakdown of Year ending March 31, 2023 Term end dividends Ordinary dividend 16 yen Commemorative dividend 2 yen

3. Forecast of Consolidated Financial Results of Year ending March 31, 2024(from April 1, 2023 to March 31, 2024)

(Percentages indicate year-on-year changes.)

	Net sales		Operating income	Ordinary income	Net income attributable	Net income per
		to owners of parent	share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	188,710	23.0	13,700	94.9	12,700	152.3	8,500	85.4	77.41

• Notes

(1)Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in the scope of consolidation): Yes

Newly included: 1 company (company name) Takara Leben Infrastructure Fund Inc., Excluded:-company (company name) (NOTE)For further information, please refer to "(5) Notes to Consolidated Financial Statements (Changes in Significant

Subsidiaries during the Fiscal Year under Review)" of P.14"3. Consolidated Financial Statements and Major Notes.

(2)Changes in accounting policies and changes or restatement of accounting estimates

• Changes in accounting policies due to revision of accounting standards: None
  ② ① Changes in accounting policies other than the above: None
  ③ Changes in accounting estimates: None
  ④ Restatement of revisions: None

(3)Issued shares count (Common stock)

① Term end Issued shares counts (including

Year ending

121,000,000Shares

Year ending

121,000,000Shares

Treasury stock)

March 31, 2023

March 31, 2022

② Number of Term end Treasury stock

Year ending

11,192,607Shares

Year ending

11,948,807Shares

March 31, 2023

March 31, 2022

③ Average number of shares during the period

Year ending

109,403,868Shares

Year ending

108,854,014Shares

March 31, 2023

March 31, 2022

(Reference) Summary of Non-consolidated Financial Results

Non-Consolidated Financial Results of Year ending March 31, 2023 (from April 1, 2022 2023 31-Mar)

(1)Non-Consolidated Results of Operations

(Percentages represent year-on-year changes.)

Net sales

Operating income

Ordinary income

Net income

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Year ending

77,364

△13.0

4,093

△5.5

4,720

△39.0

3,659

△27.6

March 31, 2023

Year ending

88,949

-

4,332

-

7,738

-

5,052

-

March 31, 2022

Net income per share

Diluted Net income per

share

Yen

Yen

Year ending

33.45

33.19

March 31, 2023

Year ending

46.42

46.08

March 31, 2022

(NOTE)The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, 2020 31-Mar) and other standards have been applied from the beginning of the previous fiscal year. Figures related to Year ending March 31, 2022 have been calculated after the application of the said accounting standard and the rate of change from the previous fiscal year has not been presented.

(2)Non-Consolidated Financial Position

		Total assets		Net assets			Equity ratio	1 Shares Per share Net
					assets
		Millions of yen		Millions of yen		%	Yen
Year ending		154,996			52,937		34.0	480.08
March 31, 2023
Year ending		150,689			51,447		34.0	469.97
March 31, 2022
Reference: Shareholders'	Year ending		Million	Year ending	Million
equity	March 31,	52,716s of yen	March 31,	51,250s of yen
		2023			2022

non-consolidated results from the results of the previous fiscal year>

In the fiscal year under review, we discontinued the sale of power generation facilities due to the effect of Takara Leben Infrastructure Fund Inc. becoming a consolidated subsidiary. As a result, there is a difference between the actual figures for the previous fiscal year and the current fiscal year.

• This financial results report is outside the scope of Audit by Certified Public Accountant or an Audit corporation.
• Explanation of the proper use of financial results forecasts and Other special notes

(Cautionary Statement with Respect to Forward-Looking Statements)

The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions deemed to be reasonable, and do not constitute guarantees by the Company of future performance. Actual results may differ materially from the forecast depending on a range of factors.

(Method of Obtaining Supplementary Briefing Materials on Financial Results)

Supplementary materials for financial results are posted on our website and disclosed in TDnet.

(Financial Results Details Obtaining Methods)

We plan to distribute a video presentation of our financial results on our website.

MIRARTH HOLDINGS, Inc.(8897) Consolidated Financial Report for the Year Ended March 31, 2023

1

○Accompanying Materials - Contents
1.Overview of Operating Results and Financial Position	2
(1)Overview of Operating Results for the Fiscal Year under Review	2
(2)Summary of Financial Position for the Fiscal Year under Review	5
(3)Overview of Cash Flows for the Fiscal Year under Review	5
(4)Future Outlook	7
(5)Basic Policy on Profit Distribution and Dividends for the Current and Next Fiscal Years	7
2.Basic Approach to Selection of Accounting Standards	8
3.CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY NOTES	9
(1)Consolidated Balance Sheets	9
(2)Consolidated Statements of Income and Consolidated Statements of Comprehensive Income	11
Consolidated Statements of Income	11
Consolidated Statement of Comprehensive Income	12
(3)Consolidated Statement of Changes in Shareholders' Equity	13
(4) Consolidated Statement of Cash Flows	15
(5)Notes to the Consolidated Financial Statements	16
(Notes on Going Concern)	16
(Changes in Significant Subsidiaries during the Current Consolidated Fiscal Year)	16
(Notes to Consolidated Balance Sheets)	16
(Notes to Consolidated Statements of Income)	16
(Rental and other real estate-related)	17
(Segment information, etc.)	18
(Per Share Information)	23
(Significant Subsequent Events)	24
4.Other	24
Status of Production, Orders and Sales	24

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MIRARTH HOLDINGS, Inc.(8897) Consolidated Financial Report for the Year Ended March 31, 2023

1.Overview of Operating Results

(1)Overview of Operating Results for the Fiscal Year under Review

During the consolidated fiscal year under review, the Japanese economy saw a gradual recovery due to a recovery in consumer spending and normalization of economic activity, as the restrictions on actions to prevent new-type coronaviruses were relaxed. On the other hand, the outlook remains uncertain due to factors such as soaring prices of raw materials and energy as well as sudden exchange rate fluctuations caused by the prolonged situation in Russia and Ukraine.

The business environment in the real estate industry to which our group belongs is still highly motivated to make purchases, despite certain changes in the requirements for housing, partly due to the spread of remote work at home in the Corona disaster. As the number of single-person households and dual-income households continues to increase and values change, the lifestyles of end users are diversifying, and demand for compact condominiums is on the rise in addition to needs for location and convenience of living. Meanwhile, in regional core cities, due in part to the trend toward compact cities, demand remained high, particularly among active seniors, and sales of condominiums were firm.

According to a survey by the Real Estate Economic Institute, the number of condominium units supplied in the Tokyo metropolitan area in 2022 was 29,569, a decrease of 12.1% from the previous year. This is below 30,000 units for the first time in 2 years, but since the number of units supplied has remained at around 30,000 in recent years, the supply-demand balance remains relatively favorable. The number of condominium units supplied nationwide also decreased by 5.9% from the previous year to 72,967 units, and the average sales price nationwide increased for the sixth consecutive year. Against this backdrop, our group became the sixth largest supplier group in the country in 2022, and plays a role in providing a stable supply in the real estate sales market.

Against this backdrop, we shifted to a holding company structure with Oct.1, 2022, renamed groups "MIRARTH HOLDINGS, Inc." from Takara Leben Co., Ltd., and formulated a new corporate path. In order to realize a sustainable growth model, the Group is reviewing its earnings structure. In addition to further advancing overseas businesses and promoting redevelopment businesses, the Group is expanding its Energy Business.

In March 2023, we set a target of reducing greenhouse-gas emissions associated with MIRARTH Holdings Group's business activities by 50% by Fiscal Year 2030 (compared to Fiscal Year 2020) and achieving a net-zero emissions by Fiscal Year 2050, with the aim of achieving carbon neutrality by 2050 as part of the Medium-Term Management Plan's proactive response to ESG (environmental, social, and governance). Through the development and operation of solar power generation facilities, the Group will continue to contribute to environmental improvement, improvement of energy self-sufficiency, and regional revitalization, including the utilization of idle land. At the same time, the Group will work to provide further renewable energy to realize carbon neutrality, including initiatives in wind power generation and biomass power generation businesses.

On September 15, 2022, we announced to 31-Oct-22 that our former executive had been convicted of a moratorium for violation of the Road Traffic Act (speed breach), but had failed to pay a Report to us. However, we made a Report to Supervise government agency to recognize that this was a disqualification event for the real estate transaction business. Subsequently, in light of the significance of this matter, we determined that it was appropriate to voluntarily close down the real estate transaction business, and notified Supervise Agency of the termination of the relevant license with 31-Oct-22. Subsequently, on December 2, 2022, the Company re-acquired the Tokyo Metropolitan Governor's license for the real estate transaction business and resumed its business activities. We sincerely apologize for the great inconvenience and anxiety caused to our customers and all those concerned in this case, and will continue to work to restore our trust in us.

Our Purpose (Significance of existence)

"Making the future of people and the earth happy with the power to design a sustainable environment."

We have strengthened our management base and put in place a structure to promote the permeation of our corporate management. We will achieve both profit growth and improvement of capital efficiency, thereby enhancing our corporate value.

The Company's results of operations for the fiscal year under review were as follows: Net sales 153,472 Millions of yen (down 5.7% year on year), Operating income 7,030 Millions of yen (down 40.8% year on year), Ordinary income 5,033 Millions of yen (down 50.9% year on year), and Net income attributable to owners of parent 4,584 Millions of yen (down 26.2% year on year).

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