Summary of Business Results for the Fiscal Year Ended March 31, 2021
[Japan GAAP] (Consolidated)
May 13, 2021
Company
JP-HOLDINGS, INC.
Listed on the TSE 1
Stock Code2749
URL: https://www.jp-holdings. co.jp
Representative
Tohru Sakai, President and Representative Director
Contact
Ryoji Tsutsumi, Director
T E L: +81-52-933-5419
Expected date of annual shareholders’ meeting: June 23, 2021
Expected starting date of dividend payment: June 24, 2021
Expected date of filing of annual securities report: June 24, 2021
Preparation of supplementary financial document: Yes
Results briefing: Yes (for media members, institutional investors, analysts)（Rounded down to million yen）

１. Consolidated business results for the fiscal year ended March 2021
(April 1, 2020 through March 31, 2021)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating income

Million yen% Million yen
Year ended Mar. 2021
32,911
3.8
2,268
Year ended Mar. 2020
31,7198.3
1,538(Note) Comprehensive income:Year ended March 2021: 712 million yen (-31.3%)
Year ended March 2020: 1,036 million yen (9.0%)
Net income
per share
Yen
6.15
12.81

Year ended Mar. 2021
Year ended Mar. 2020

%
47.4
0.5

Diluted net income
per share

Net income attributable toowners of parent

Ordinary income
Million yen
2,947
2,003

Million yen
537
1,122

Ratio of ordinary
income to total
assets
%10.6
7.4

Return on
equity

Yen
-

%
47.1
4.3

%
5.5
12.1

%
-52.1
4.8

Ratio of operating
income to net sales
%
6.9
4.9

(2) Consolidated financial position
Total assets

Shareholders’ equity
ratio

Net assets

Million yen
As of Mar. 31, 2021
29,740
As of Mar. 31, 2020
26,122(Reference) Shareholders’ equity:
As of March 31, 2021: 10,007 million yen
As of March 31, 2020: 9,636 million yen

Million yen
10,007
9,636

Net assets per
share

%
33.7
36.9

Yen
114.42110.17(3) Consolidated results of cash flows

Year ended Mar. 2021
Year ended Mar. 2020

Cash flows fromoperating activities
Million yen
2,469
2,320

Cash flows frominvesting activities
Million yen
190
418

Cash flows fromfinancing activities
Million yen
2,155-3,349Cash and cash equivalents
at the end of period
Million yen
11,0206,206

2. Dividends
Annual dividend
End of
1Q
Year ended Mar. 2020
Year ended Mar. 2021
Year ending Mar. 2022
(forecast)End of2Q

End of3Q

Year-end

Total
dividend(Total)

Total

Yen
-

Yen
0.00
0.00

Yen
-

Yen
3.90
3.90

Yen
3.90
3.90

-

0.00

-

4.50

4.50

Dividend
payout ratio(Consolidated)

Million yen
341
341

%
30.4
63.4

Rate of total
dividend to
net assets(Consolidated)
%
3.7
3.5

27.1

3．Forecast of consolidated business results for the fiscal year ending March 2022
(April 1, 2021 through March 31, 2022)(% change from the previous corresponding period)
Net sales
Million yen

Year ending Mar. 2022

33,200Operating income

Net income attributableto owners of parent

Ordinary income%

Million yen

%

0.9

1,800

-20.6

Million yen

2,300

Net income
per share%

Million yen

%

Yen

-22.0

1,450

169.7

16.58

*Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes
in the scope of consolidation): None
(2) Changes in accounting policies, accounting estimates and restatement①Changes in accounting policies associated with revision of accounting standards:②Changes in accounting policies other than ①③Changes in accounting estimates④Restatement: None: None: None: None(3) Shares outstanding (common stock)① Number of shares outstanding at the end of period (treasury stock included)
As of March 31, 2021
87,849,400 shares
As of March 31, 2020
87,849,400 shares② Treasury stock at the end of period:
As of March 31, 2021
380,707 shares
As of March 31, 2020
380,707 shares③ Average number of stock during period
Year ended March 31, 2021
87,468,693 sharesYear ended March 31, 2020
87,649,993 shares(Note) The number of treasury stock deducted for the calculation of the number of treasury stock at the end of period and theaverage number of stock during period includes the company's shares held by Trust & Custody Services Bank, Ltd. as
trust property of "Stock Benefit Trust (Employee Stock Ownership Plan)".

(Reference) Summary of non-consolidated business results
1. Non-consolidated business results for the fiscal year ended March 2021
(April 1, 2020 through March 31, 2021)(1) Non-consolidated results of operations(% change from the previous corresponding period)
Year ended Mar. 2021
Year ended Mar. 2020

Net sales
Million yen
2,570
2,360

%
8.9
24.4

Operating income
Million yen
%
886
42.9
620
0.7

Yen
1.55
8.39

Diluted net income per
share
Yen
-

Net income
per share
Year ended Mar. 2021
Year ended Mar. 2020

Ordinary income
Million yen
%
1,037
14.6
905
36.2

Net income
Million yen
%
135
-81.6
734
50.5

Shareholders’ equity
ratio

Net assets per
share(2) Non-consolidated financial position
Total assets
Million yen
As of Mar. 31, 2021
19,496
As of Mar. 31, 2020
17,106(Reference) Shareholders’ equity:
As of March 31, 2021: 5,129 million yen
As of March 31, 2020: 5,197 million yen

Net assets
Million yen
5,129
5,197

%
26.3
30.4

Yen
58.65
59.42

* Financial summary is not subject to auditing procedures by certified public accountants or auditing firms.
* Explanation regarding appropriate use of business forecasts and other special instructions
・Forecasts regarding future performance in this material are based on information currently available to the Company and certain assumptions that thecompany deems to be reasonable at the time this report was prepared. Actual results may differ significantly from the forecasts due to various factors.
For information regarding the business forecasts, etc., please refer to “1. Qualitative Information on Quarterly Financial Results (4) Future outlook”(Page 6).
・On Wednesday, May 19, 2021, the Company plans to hold results briefing for media members, institutional investors and analysts via a webcast. The
Company has suspended its results briefing for individual investors in order to prevent the spread of new coronavirus (COVID-19) infections.

〇 Table of Contents of the Appendix
1. Summary of Operating Results……………………………………………………………………….. 2(1) Summary of operating results for the current fiscal year………………………………………….. 2(2) Summary of financial condition in the current fiscal year………………………………………… 4(3) Summary of cash flow in the current fiscal year…………………………………………………... 5(4) Future outlook……………………………………………………………………………………… 6
2. Basic Policies regarding the Selection of Accounting Standards……………………………………… 7
3. Consolidated Financial Statements and Major Notes………………………………………………….. 8(1) Consolidated Balance Sheet………………………………………………………………………… 8(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income……… 10(3) Consolidated Statements of Changes in Shareholders’ Equity…………………………………..… 12(4) Consolidated Statement of Cash Flows……………………………………………………………. 14(5) Notes on the consolidated financial statements……………………………………………………. 16(Notes on going concern assumption)………………………………………………………………. 16(Segment Information)………………………………………………………………………………. 16(Per-stock Information)……………………………………………………………………………… 16(Significant subsequent events)……………………………………………………………………… 16

1

1. Summary of Operating Results(1) Summary of operating results for the current fiscal year
During the fiscal year under review, the Japanese economy remained challenging due to the impact of COVID-19. Economic
activities resumed after the lifting of the State of Emergency declared in April, and there were signs of a recovery in consumer
spending. However, the outlook for the future remains extremely challenging due to factors such as an increase in the number of
infectious nationwide since November and the redeclaration of the State of Emergency.
Meanwhile, in the child-raising service business, the environment surrounding childcare is rapidly changing. These include anincrease in dual-income households, the problem of children on waiting lists in some regions, a continuing shortage of childcare
workers, a further acceleration of the declining birth rate society due to a recent sharp drop in the birth rate, and changes inworking styles and lifestyles due to the expansion of COVID-19. In addition, on December 21, 2020, the government announced
the “New Child-rearing security Plan”, which aims to reduce the number of children on the waiting list. In order to cope with theincrease in female employment rate, the government plans to provide childcare services for approximately 140,000 children overthe four-year period from 2021 to the end of 2024. The role of child-raising services in society is becoming increasingly important.
Under these severe situations, as measures against COVID-19, our group, in collaboration with local governments, has established
our own response standards and implemented thorough safety measures with giving top priority to ensuring the safety of children,
parents, business partners, and employees. At the same time, we also have been taking prompt measures such as staggered work
hours and remote working at the head office and Tokyo headquarters.
In addition, under the new management structure from June last year, we have adopted the management philosophy of"contributing to the creation of a society where people can smile through our child-raising services." To achieve this, we arepromoting to create facilities that would be selected by customers by providing higher-quality child-raising services; and we areworking on management reform and improvement of the workplace environment to become a company that is trusted by parents
and loved by employees.
In the new management structure, we have made efforts under the management reform policies of "improve profitability andefficiency," "improve soundness," and "improve growth potential." In terms of specific initiatives to "improve profitability andefficiency," we have expanded programs in subjects such as English, gymnastics, and eurhythmics to increase the number ofchildren accepted at existing facilities and improved our operational efficiency by optimizing staffing levels. Regarding"improving soundness," to avoid future risks, we have decided to close facilities with deteriorating profitability due to changes inthe external environment, and also decided to off-balance the facilities that we have operated by acquiring land and buildings in thepast, as a foothold for the development of local childcare support facilities. In addition, we have improved operational efficiency
by introducing systems and reviewing business processes, thereby creating a pleasant work environment. We have also introduced
a new personnel system with high transparency in evaluations, which has led to a reduction in the turnover rate. As for the"improve growth potential”, to accelerate the shift to digital transformation (DX), we introduced an on-line program and formed abusiness alliance with GAKKEN HOLDINGS CO.,LTD. on January 14, 2021. With this alliance, we decided to introduce earlylearning programs at child care facilities and began planning and considering new businesses.
As for the new facility openings, the Group has opened a total of 9 facilities during the fiscal year ended March 2021 according to
the plan, including 4 nursery schools (4 in Tokyo) and 5 school clubs (5 in Tokyo).
(Nursery school)
Asc Senju Nursery School
Asc Toneri Ekimae Nursery School
Asc Oizumi Gakuen Nursery School
Asc Nerima 3-chome Nursery School(School club)
Wakuwaku Yanagida Hiroba/Yanagida Midori Club No. 2
Wakuwaku Yon-iwa Hiroba/Yon-iwa Elementary School Icho Club No. 2
Chofu City Jindaiji Children’s House School Club
Mitaka City Minamiura School Club A
Mitaka City Yon-sho School Club B(Apr. 1, 2020)(Apr. 1, 2020)(Apr. 1, 2020)(Apr. 1, 2020)(Apr. 1, 2020)(Apr. 1, 2020)(Apr. 1, 2020)(Apr. 1, 2020)(Apr. 1, 2020)*1: As of April 1, 2020, with the opening of Wakuwaku Yanagida Hiroba/Yanagida Midori Club No.2, Wakuwaku Yanagida Hiroba wasrenamed as Wakuwaku Yanagida Hiroba/Yanagida Midori Club No.1. With the opening of Wakuwaku Yon-iwa Hiroba/Yon-iwa
Elementary School Icho Club No.2, Wakuwaku Yon-iwa Hiroba was renamed as Wakuwaku Yon-iwa Hiroba/Yon-iwa Elementary
School Icho Club No.1. With the opening of Mitaka City Yon-sho School Club B, Mitaka City Yon-sho School Club was renamed
as Mitaka City Yon-sho School Club A.
*2: As of April 1, 2020, Asc Higashiojima Nursery School, which had been running since April 1, 2008 as Tokyo Licensed Nursery
School, was changed into a licensed nursery school; Obu City Kyowahigashi Nursery School, which had been running since April
1, 2010, as public nursery school under private management, was changed into a private facility under private management and is
now run as Asc Kyowahigashi Nursery School.
*3: The three private school clubs operated by Amenity Life, Inc. (Elfikids Tsurugamine, Elfikids Futamatagawa, and Elfikids
Ryokuentoshi) were closed at the end of March 2020.
*4: COHAS VIETNAM CO.,LTD, which operated the kindergartens in Vietnam, completed the transition to local licensing on October
29, 2020 and transferred it to C2C Global Education Group Co., Ltd.

2

*5: Ask Akebono Kaiho Nursery School, a company-led nurcery school, was closed as of December 31, 2020.

As a result, the Group came to have 212 nursery schools, 77 school clubs, 11 children's houses, 1 private school club, making a
total of 301 facilities for supporting child-raising at the end of March 2021.
As a result, the Group’s consolidated net sales were 32,911 million yen (up 3.8% year on year), operating income was 2,268
million yen (up 47.4% year on year), ordinary income was 2,947 million yen (up 47.1% year on year), and net income attributableto owners of parent was 537 million yen (down 52.1% year on year).
The major factors are as follows:
Net sales increased year on year due to the opening of new facilities and the transition from Tokyo Licensed Nursery School tolicensed nursery school. However, as a result of the temporary closures of some facilities due to COVID-19, revenues from school
lunch fees and merchandise sales associated with the sale of photographs collected directly from parents decreased, and thenumber of children accepted fell short the plan, although it has been increasing.
Operating income increased year on year owing to an increase in gross profit and a reduction in selling, general and administrative
expenses as a result of efforts to reduce foodstuff costs and other expenses related to school lunches due to the temporal closure ofsome facilities at the request of local governments, in addition to the above-mentioned factors that contributed to the increase in
net sales, despite a decrease in sales associated with the prevention of the spread of COVID-19.
In addition, ordinary income increased year on year thanks to an increase in operating income and increased subsidies associatedwith an increase in users of the corporate dormitory.
Net income attributable to owners of parent decreased year on year due to following factors: we have decided to close 10 facilities
with deteriorating profitability due to changes in the external environment including the status of children on waiting lists in eachregion (closed 4 Tokyo Licensed Nursery Schools on March 31, 2021, and plan to close 4 Tokyo Licensed Nursery Schools on
March 31, 2022; closed 1 company-led nursery school on December 31, 2020 and 1 private school club on March 31, 2021). At thesame time, we also decided to off-balance the 10 facilities that we have operated by acquiring land and buildings in the past, as afoothold for the development of local childcare support facilities, with a view to selling them in the future to avoid the risk ofholding them. As a result of this change in the use of fixed assets, the book value of fixed assets was reduced to the net selling
price, and the amount of the reduction was recorded as an impairment loss. In addition, impairment losses were recorded fornursery schools in some regions that are expected to continue to have negative future operating income due to a decrease in thenumber of children on waiting lists. With this, we have recorded an extraordinary loss of 2,092 million yen.

3(2) Summary of financial condition in the current fiscal year
As for the financial position at the end of the current fiscal year, the total assets amounted to 29,740 million yen (up 3,617 million
yen from the end of the previous fiscal year).
Current assets totaled 15,139 million yen (up 5,351 million yen). This was mainly due to an increase of 4,814 million yen in cash anddeposits and 598 million yen in accounts receivable-other, while there was a decrease of 150 million yen in others.
Fixed assets totaled 14,601 million yen (down 1,733 million yen). This was mainly due to an increase of 502 million yen in deferred
tax assets, while there were decreases of 1,474 million yen in buildings and structures, 395 million yen in land, 117 million yen in
investments and other assets, 113 million yen in long-term loans receivable, and 53 million yen in investment securities.
Total liabilities amounted to 19,732 million yen (up 3,246 million yen).
Current liabilities totaled 7,829 million yen (up 1,908 million yen). This was mainly due to increases of 1,667 million yen in current
portion of long-term loans payable, 136 million yen in income taxes payable, and 99 million yen in accounts payable-other, while
there was a decrease of 92 million yen in others.
Fixed liabilities totaled 11,903 million yen (up 1,337 million yen). This was mainly due to increases of 825 million yen in current
portion of long-term loans payable and 426 million yen in asset retirement obligation.
Total net assets at the end of the current fiscal year were 10,007 million yen (up 371 million yen). This was mainly due to increasesof 196 million yen in retained earnings and 139 million yen in valuation difference on securities.

4(3) Summary of cash flow in the current fiscal year
Cash and cash equivalents (hereinafter referred to as “the funds”) for the current consolidated fiscal year were 2,469 million yen
from the funds obtained through operating activities; 190 million yen obtained through investing activities; and 2,155 million yen
obtained through financing activities, totaling 11,020 million yen, up 4,814 million yen from the end of the previous fiscal year.
The cash flow situations and their reasons for the current consolidated fiscal year are as follows:[Cash flows from operating activities]
The funds provided by operating activities were 2,469 million yen (2,320 million yen was provided during the previous consolidated
fiscal year).
This was mainly due to the following: impairment losses of 2,020 million yen, income before income taxes and minority interests of
889 million yen, depreciation and amortization of 729 million yen, a decrease in other fixed assets of 158 million yen, and anincrease in retirement benefit liability of 143 million yen, while there were income taxes paid of 813 million yen, an increase inaccounts receivable-other of 592 million yen, and a decrease in advances received of 117 million yen.
Compared to the previous consolidated fiscal year, the funds obtained increased by 148 million yen. This was mainly due toincreases in impairment loss of 1,709 million yen, other current liabilities of 100 million yen, accrued consumption tax of 91 million
yen, and sales of investment securities of 65 million yen, while there were decreases in net income before income taxes and minority
interests of 798 million yen, accounts receivable of 554 million yen, and allowance for bonuses of 154 million yen.
[Cash flows from investing activities]
The funds provided by investing activities were 190 million yen (418 million yen during the previous consolidated fiscal year).
This was mainly due the following: subsidies received of 443 million yen, proceeds from collection of long-term loans receivable of
264 million yen, and proceeds from sales of investment securities of 222 million yen, while there were payments for purchase of
tangible fixed assets of 634 million yen, payments for long-term loans receivable of 110 million yen, and payments for guarantee
deposits of 63 million yen.
Compared to the previous consolidated fiscal year, the funds decreased by 228 million yen. This was mainly due to a decrease inpayments for purchase of tangible fixed assets of 231 million yen and an increase in proceeds from sales of investment securities of
204 million yen, while there was a decrease in subsidies received of 764 million yen.
[Cash flows from financing activities]
The funds provided by financing activities were 2,155 million yen (3,349 million yen during the previous consolidated fiscal year).
This was mainly due to the following: proceeds from long-term loans payable of 4,400 million yen, repayment of long-term loans
payable of 1,906 million yen, and cash dividends paid of 338 million yen.
Compared to the previous consolidated fiscal year, the funds increased by 5,504 million yen. This was mainly due to an increase inproceeds from long-term loans payable of 3,700 million yen, decreases in repayment of short-term loans payable of 1,600 million
yen and repayment of long-term loans payable of 295 million yen, while there was a decrease in proceeds from short-term loans
payable of 100 million yen.
The related index of our Group’s cash flow is as follows:
FY3/19
Shareholders’ equity ratio (%)
Shareholders’ equity ratio against
current price (%)
Cash flow to interest-bearing debts
ratio (years)
Interest coverage ratio (x)FY3/20FY3/21

31.7

36.9

33.7

94.2

86.7

83.8

7.7

4.8

5.5

33.3

38.8

41.6

Notes: Shareholders’ equity ratio = shareholders’ equity/total assets
Shareholders’ equity ratio against current price = total current stock price/total assets
Cash flow to interest-bearing debts ratio = interest-bearing debts/cash flow
Interest coverage ratio = cash flow/interest payment[Note 1] All calculated based on consolidated fiscal amounts.
[Note 2] Total current stock price calculated based on the total number of stocks issued minus treasury shares.
[Note 3] Cash flow here signifies operating cash flow.
[Note 4] Interest-bearing debts here include all the debts that incur interests and appropriated on the consolidatedbalance sheet.

5(4) Future outlook
With regard to the outlook for the future, we anticipate an increase in dual-income households, the problem of children on waiting
lists in some areas, a continuing shortage of childcare workers, a further acceleration of the declining birth rate society due to a
recent sharp drop in the birth rate, and an unclear outlook for the containment of COVID-19. Accordingly, we need to transform
our facilities to be selected by customer through further improving the quality of childcare in response to changes in the social
environment and the needs of parents, rather than prioritizing quantitative expansion through new facility openings. Taking
advantage of this situation, we will make our efforts by setting more attainable management targets in the new medium-term plan.
Our Group's new medium-term management plan captures changes in the social environment, and we will continue the policies ofthe previous fiscal year with the key objectives of "improve profitability and efficiency," "improve soundness," and "improve
growth potential." We will effectively allocate and invest management resources to build a solid management foundation.
Specifically, with DX as the pillar of reform to respond to changes in the social environment, in terms of "improve profitability andefficiency," we will take these initiatives: improve early learning to increase the number of children accepted at existing childcare
support facilities as our existing business, develop and introduce new content, improve profitability by further optimizing staffing,
and accelerate operational efficiency by promoting the use of ICT in facilities. In terms of "improve soundness," as the key ofchildcare support is "human resources," we will expand our human resource education and training systems and improve
operational efficiency through systemization. In addition, we will further improve the quality of our childcare support and promote
the creation of facilities that would be selected by customers by disseminating and implementing both internally and externally theGroup's Management Philosophy, Corporate Message, Operational Philosophy, Childcare Philosophy, and Childcare Policy, whichwere renewed and formulated last year. As for the “improve growth potential”, we will deepen and develop our business alliancewith GAKKEN HOLDINGS CO.,LTD. and establish a competitive advantage by creating services and products that provide new
added value, such as the development of new early learning programs through DX and products related to childcare support.
For the above reasons, as for the consolidated business forecasts for the next fiscal year, the Company forecasts net sales of 33,200
million yen (up 0.9% year on year), operating income of 1,800 million yen (down 20.6%), ordinary income of 2,300 million yen(down 22.0%), and net income attributable to owners of parent of 1,450 million yen (up 169.7%).
With regard to the consolidated financial results for the next fiscal year, the provision for bonuses has been increased due to achange in the bonus payment period following the introduction of a new personnel system. In addition, we anticipate that the
number of children accepted will decrease due to factors such as an increase in remote working reflecting the expansion of
COVID-19 and a further acceleration of the declining birth rate society due to a recent sharp drop in the birth rate.
The following is a breakdown of the childcare facilities that the Group has entrusted with the opening of new facilities during the
fiscal year ending March 2022 and has started new operations on April 1, 2021.
(Nursery school)
Asc Kami-Shakujii Nursery School
Asc Kanamachi Nursery School
Asc Higashikasai Nursery School(Apr. 1, 2021)(Apr. 1, 2021)(Apr. 1, 2021)(School club/Children's house)
Wakuwaku Takinogawa Momiji Hiroba/
Takinogawa Momiji Genkikko Club No. 1
Wakuwaku Takinogawa Momiji Hiroba/
Takinogawa Momiji Genkikko Club No. 2
Wakuwaku Takinogawa Momiji Hiroba/
Takinogawa Momiji Genkikko Club No. 3
Mitaka City Rokusho School Club A
Niji-iro Kids Club
Bancho Elementary School After School No. 1
Bancho Elementary School After School No. 2
Bancho Elementary School After School Kids’Club (Play school)
Jindaiji Children’s House(Apr. 1, 2021)(Apr. 1, 2021)(Apr. 1, 2021)(Apr. 1, 2021)(Apr. 1, 2021)(Apr. 1, 2021)(Apr. 1, 2021)(Apr. 1, 2021)(Apr. 1, 2021)*1: As of April 1, 2021, Tokyo Licensed Nursery Schools named Ask Ontake Nursery School, which had been running since August 1, 2003 and Ask
Shimomaruko Nursery School, which had been running since April 1, 2010, were changed into licensed nursery school.
*2: April 1, 2021, with the opening of the Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji Genkikko Club No. 1 above, Wakuwaku
Takinogawa Momiji Hiroba was renamed as Wakuwaku Takinogawa Momiji Hiroba/Takinogawa Momiji Genkikko Club No. 1.
*3: As of March 31, 2021, the Company closed Tokyo Licensed Nursery Schools named Ask Iidabashi Nursery School, Ask Nishishinjuku Nursery
School, Ask Ikebukuro Nursery School, Ask Yukigaya-Otsuka Nursery School, and a private school club named AEL Yokohama Business Park.
In addition, due to the expiration of the contract, the Company withdrew from school clubs named Nakano-ku Kids Plaza Yato, Kita-ku Sakura
Club No. 1, Kita-ku Daini Sakura Club No. 2, and a children's house named Sayama City Chuo Children's House on March 31, 2021.

6

2. Basic Policies regarding the Selection of Accounting Standards
Our Group produces the financial statements based on the Japanese standard, while taking into consideration the comparabilities ofvarious financial statement terms as well as those of various companies. Incidentally, the application of international accounting
standards will be appropriately enforced, in consideration of various situations inside and outside Japan.

7

3. [Consolidated Financial Statements and Major Notes][Consolidated Balance Sheet](Thousand yen)Previous Fiscal Year
(March 31, 2020)

Current Fiscal Year
(March 31, 2021)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade

6,206,487
76,28811,020,922
88,259Inventories
Accounts receivable - other111,259
2,410,895

167,4813,009,655

Other
Allowance for doubtful accounts

1,009,077-25,759

858,136-5,057

Total current assets

9,788,250

15,139,399

Fixed assets
Tangible fixed assets
Buildings and structures

12,237,506

12,853,109

Accumulated depreciation and impairment-5,349,352-7,439,556

Buildings and structures, net

6,888,153

5,413,552

Machinery, equipment and vehicles

5,637

203

Accumulated depreciation-4,146-92

Machinery, equipment and vehicles, net

1,490

111

Tools, furniture and fixtures

923,279

998,658

Accumulated depreciation and impairment-671,412-770,948

Tools, furniture and fixtures, net

251,866

227,710Land
Construction in progress

980,894
497,896585,678
474,178

Total tangible fixed assets

8,620,302

6,701,231

Intangible assets
Goodwill

197,508

167,122

Other

50,16947,307

Total intangible assets

247,678

214,430

Investment securities
Long-term loans receivable

436,234
3,284,007

382,394
3,170,376

Guarantee deposits
Deferred tax assets

1,906,120
1,128,962

1,906,868
1,631,311

Other
Allowance for doubtful accounts

720,593-9,445603,466-8,871

Total investments and other assets

7,466,474

7,685,546

16,334,455

14,601,208

26,122,705

29,740,607

Investments and other assets

Total fixed assets
Total assets8

(Thousand yen)Previous Fiscal Year
(March 31, 2020)

Current Fiscal Year
(March 31, 2021)

Liabilities
Current liabilities
Notes and accounts payable-trade
Current portion of long-term loans payable

195,720
1,639,460

219,266
3,307,412

Accounts payable – other
Income taxes payable

1,535,400
415,324

1,634,568
551,678

Accrued consumption taxes
Reserve for bonuses

117,626
554,836

160,836
544,474

Asset retirement obligation
Other

10,894
1,451,683

51,9001,359,619

Total current liabilities

5,920,945

7,829,755

Long-term debt
Retirement benefit liability

9,479,911
757,052

10,305,896
839,667

Asset retirement obligation
Other

320,567
7,979

747,503
10,012

Fixed liabilities

Total fixed liabilities

10,565,510

11,903,079

16,486,455

19,732,834

Shareholders’ equity
Capital1,603,955

1,603,955

Capital surplus
Retained earnings

1,449,544
6,982,526

1,449,544
7,178,942

Total liabilities
Net assets

Treasury stock-107,515-107,515

Total shareholders’ equity

9,928,510

10,124,926

Accumulated other comprehensive income
Valuation difference on available-for- salesecurities
Deferred gains or losses on hedges-224,438-84,960-5,537-6,948Foreign currency translation adjustments
Remeasurements of defined benefit plans

2,610-64,895-25,245

Total accumulated other comprehensive income-292,261-117,154

9,636,249

10,007,772

26,122,705

29,740,607

Total net assets
Total liabilities and net assets

9[Consolidated Statement of Income and Consolidated Statement of Comprehensive Income][Consolidated Statement of Income]Net sales
Cost of sales

Previous Fiscal Year
(Apr. 1, 2019
- March 31, 2020)
31,719,442
27,298,724(Thousand yen)
Current Fiscal Year
(Apr. 1, 2020
- March 31, 2021)
32,911,956
27,687,332

Gross profit

4,420,718

5,224,623

Selling, general and administrative expenses

2,881,943

2,956,223

Operating income

1,538,774

2,268,400

98,65989,8055,467
450,421653,613

Non-operating income
Interest income
Guarantee commission received
Subsidy income
Other

13,03019,471

Total non-operating income

567,579

762,890

Interest expenses
Commission fee

55,5184,000

58,203
3,666

Handicapped employment levy
Demobilization costs

10,635
1,289

9,550
-

Provision of allowance for doubtful accounts
Other

25,344
5,878

12,062Non-operating expenses

Total non-operating expenses

102,665

83,4822,003,687

2,947,807

Gain on sales of fixed assets
Gain on reversal of asset retirement obligations

-

3,606
11,100Gain on sales of affiliates
Recoveries of written off receivables-

13,735
5,866

Total extraordinary income-

34,308Loss on retirement of fixed assets
Impairment loss (on facilities)

1,382
229,257

3,648
2,020,772

Impairment loss
Loss on sales of investment securities

81,9602,642

67,718

Total extraordinary loss

315,241

2,092,140

1,688,446

889,976

Ordinary income
Extraordinary income

Extraordinary loss

Income before income taxes and minority interests
Corporate, inhabitant and enterprise taxes

829,819

936,449

Income taxes-deferred-264,106-584,017

Total income tax

565,713352,431

Net income

1,122,732

537,544

Net income attributable to owners of parent

1,122,732

537,54410

[Consolidated Statement of Comprehensive Income]Net income
Other comprehensive income

Previous Fiscal Year
(Apr. 1, 2019
- March 31, 2020)
1,122,732(Thousand yen)
Current Fiscal Year
(Apr. 1, 2020
- March 31, 2021)
537,544-91,026
1,627

139,477-1,4102,371
917-2,61039,650

Valuation difference on available-for- sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income-86,110

175,107

1,036,622

712,651

1,036,622

712,651

BreakdownComprehensive income attributable to owners of parent

11

[Consolidated Statements of Changes in Shareholders’ Equity]
Previous Fiscal Year (April 1, 2019 – March 31, 2020)(Thousand yen)
Shareholders’ equity
CapitalBalance at the beginningof current period
Changes of items during
the period

1,603,955

Capital surplus

Retained earnings

Treasury stock

Total shareholders’equity1,449,544

6,184,830-81,685

9,156,643

Dividends from surplus
Net income attributableto owners of parent
Acquisition of treasury
stock
Disposal of treasurystock
Net changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period-325,036-325,036

1,122,732

1,122,732-107,257-107,257

81,42781,427--

797,696-25,829

771,866

1,603,955

1,449,544

6,982,526-107,515

9,928,510

Accumulated other comprehensive income
Valuation difference
Deferred gains or
on available-forlosses on hedges
sale securities
Balance at the beginningof current period
Changes of items during
the period-133,411

Foreign currency Remeasurements oftranslation
defined benefit
adjustments
plans-7,165238-65,813

Total accumulated
othercomprehensive
income-206,151

Dividends from surplus
Net income attributableto owners of parent
Acquisition of treasury
stock
Disposal of treasurystock
Net changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period

Total net assets

8,950,492-325,036
1,122,732-107,257
81,427-91,026

1,627

2,371

917

-86,110-86,110-91,026

1,627

2,371

917

-86,110685,756-224,438-5,5372,610-64,895-292,261

9,636,249

12

Current Fiscal Year (April 1, 2020–March 31, 2021)(Thousand yen)
Shareholders’ equity
CapitalBalance at the beginningof current period
Changes of items during
the period

1,603,955

Capital surplus

Retained earnings

Treasury stock

Total shareholders’equity1,449,544

6,982,526-107,515

9,928,510

Dividends from surplus
Net income attributableto owners of parent
Acquisition of treasury
stock
Disposal of treasurystock
Net changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period-341,127-341,127

537,544537,544--

196,416-

196,416

1,603,955

1,449,544

7,178,942-107,515

10,124,926

Accumulated other comprehensive income
Valuation difference
Deferred gains or
on available-forlosses on hedges
sale securities
Balance at the beginningof current period
Changes of items during
the period-224,438

Foreign currency Remeasurements oftranslation
defined benefit
adjustments
plans-5,5372,610-64,895

Total accumulated
othercomprehensive
income-292,261

Dividends from surplus
Net income attributableto owners of parent
Acquisition of treasury
stock
Disposal of treasurystock
Net changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period

Total net assets

9,636,249-341,127
537,544

139,477-1,410-2,61039,650175,107

175,107

139,477-1,410-2,61039,650175,107371,523-84,960-6,948--25,245-117,154

10,007,772

13

[Consolidated Statement of Cash Flows](Thousand yen)
Current Fiscal Year
(Apr. 1, 2020
- March 31, 2021)

Previous Fiscal Year
(Apr. 1, 2019
- March 31, 2020)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests

1,688,446

889,976

Depreciation and amortization
Amortization of goodwill

724,183
30,385729,258
30,385

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

24,728
143,701

4,068-10,361

Increase (decrease) in retirement benefit liability
Loss (gain) on sale of investment securities

115,9542,642

143,058
67,718Interest and dividends income
Interest expenses-98,659
55,518-89,805
58,203

1,382
-

3,648
-3,606--11,100-13,735

Recoveries of written off receivables
Impairment loss
Decrease (increase) in notes and accounts receivabletrade
Decrease (increase) in inventories

311,217-5,8662,020,772-4,638-14,075

17,640-56,221

Decrease (increase) in accounts receivable - other
Decrease (increase) in accrued consumption taxes
Decrease (increase) in notes and accounts payabletrade
Decrease (increase) in accounts payable - other andaccrued expenses
Increase (decrease) in accrued consumption taxes-37,365-1,715-592,079
89,524-10,515

19,42917,962-9,87643,046

43,210

Increase (decrease) in advances received
Decrease (increase) in other current assets-13,792
38,382-117,554-39,341

Decrease (increase) in other fixed assets
Increase (decrease) in other current liabilities

152,568-72,654

158,10928,122

Increase (decrease) in other fixed liabilities
Other

3,297
181

3,033
-

3,131,899

3,324,895

Loss on retirement of fixed assets
Loss (gain) on sales of fixed assets
Gain on reversal of asset retirement obligations
Gain on sales of affiliates

SubtotalInterest and dividends income received

9,249

17,338Interest expenses paid
Income taxes (paid) refund-59,856-760,420-59,340-813,724

Net cash provided by (used in) operating activities

2,320,872

2,469,167

14

(Thousand yen)
Current Fiscal Year
(Apr. 1, 2020
- March 31, 2021)

Previous Fiscal Year
(Apr. 1, 2019
- March 31, 2020)
Net cash provided by (used in) investing activities
Purchase of tangible fixed assets-865,830-634,740

Purchase of intangible assets
Proceeds from sales of tangible fixed assets-33,713--9,3605,120

Proceeds from subsidy income
Proceeds from sales of investment securities

1,208,435
17,578443,436
222,153

Payments for guarantee deposits
Proceeds from collection of guarantee deposits-51,637
25,677-63,469
18,846

Payments of long-term loans receivableCollection of long-term loans receivable
Proceeds from sales of investments in subsidiaries andaffiliates resulting in change in scope of consolidation
Other-120,000
263,820-110,000
264,716-

73,538-25,347-19,403

Net cash provided by (used in) investing activities

418,982

190,839

Net cash provided by (used in) financing activities
Proceeds from short-term loans payable

100,000-

Repayments of short-term loans payable
Proceeds from long-term loans payable-1,600,000
700,000

4,400,000

Repayments of long-term loans payable
Proceeds from disposal of treasury shares-2,201,092
81,427-1,906,063--107,438-322,338-338,733

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents-3,349,442

2,155,203

-365

-775

-609,951

4,814,435

Cash and cash equivalents at beginning of period

6,816,439

6,206,487

Cash and cash equivalents at end of period

6,206,487

11,020,922

Purchase of treasury shares
Cash dividends paid15

(5) Notes on the consolidated financial statements(Notes on going concern assumption)
Not applicable(Segment Information)
As our group operates within one single segment (nursery service), we have omitted the descriptions as such.
(Per-stock Information)
Previous Fiscal Year
(Apr. 1, 2019
- March 31, 2020)

Current Fiscal Year
(Apr. 1, 2020
- March 31, 2021)

Net assets per share

110.17 yen

114.42 yen

Net income per share

12.81 yen

6.15 yen(Note) 1. Diluted net income per share is omitted as there are no dilutive shares.
2. The Company's shares remaining in the trust, which are recorded as treasury stock in shareholders' equity, are included intreasury stock, which is deducted in the calculation of the average number of shares outstanding during the period, for the
purpose of calculating net income per share.
The average number of shares during the period excluded from the calculation of net income per share was 22,777 sharesfor the previous fiscal year and none for the current fiscal year.
3. The basis for calculating net income per share is as follows:
Previous Fiscal Year
(Apr. 1, 2019
- March 31, 2020)
Net income attributable to ownersof parent (thousand yen)

Current Fiscal Year
(Apr. 1, 2020
- March 31, 2021)

1,122,732

537,544--

Net income attributable to ownersof parent related to common stock(thousand yen)

1,122,732

537,544

Average number of shares ofcommon stock during the period(shares)

87,649,993

87,468,693

Amount not attributable to commonshareholders (thousand yen)

(Significant events after the reporting period)
Not applicable16