Summary of Business Results for the Fiscal Year Ended March 31, 2023
[Japan GAAP] (Consolidated)
May 11, 2023
Company
JP-HOLDINGS, INC.
Listed on the TSE Prime
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 27, 2023
Expected starting date of dividend payment: June 28, 2023
Expected date of filing of annual securities report: June 28, 2023
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 2023
(April 1, 2022 through March 31, 2023)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating income

Million yen% Million yen
Year ended Mar. 2023
35,507
3.3
3,667
Year ended Mar. 2022
34,3732.6
3,344(Note) Comprehensive income:Year ended March 2023: 2,672 million yen (15.7%)
Year ended March 2022: 2,308 million yen (224.0%)
Net income
per share

%
9.6
17.1

Diluted net income
per share

Yen
31.18
26.06

Year ended Mar. 2023
Year ended Mar. 2022

Ordinary income
Million yen
3,745
3,358

Return on
equity

Yen
-

%
21.1
20.7

%
11.5
13.9

Net income attributable toowners of parent

Million yen
2,698
2,279

Ratio of ordinary
income to total
assets
%
10.7
10.5

%
18.4
324.1

Ratio of operating
income to net sales
%
10.3
9.7

(2) Consolidated financial position
Total assets

Net assets

Million yen
As of Mar. 31, 2023
35,694As of Mar. 31, 2022
34,274(Reference) Shareholders’ equity:
As of March 31, 2023: 13,584 million yen
As of March 31, 2022: 11,975 million yen

Shareholders’ equity
ratio

Million yen
13,584
11,975

Net assets per
share

%
38.1
34.9

Yen
159.53136.91(3) Consolidated results of cash flows

Year ended Mar. 2023
Year ended Mar. 2022

Cash flows fromoperating activities
Million yen
2,735
3,884

Cash flows frominvesting activities
Million yen
411
413

Cash flows fromfinancing activities
Million yen-1,112
1,978Cash and cash equivalents
at the end of period
Million yen
19,33017,296

2. Dividends
Annual dividend
End of
1Q

End of2Q

End of
3Q

Yen
Yen
Yen
Year ended Mar. 2022
0.00
Year ended Mar. 2023
0.00
Year ending Mar. 2024
0.00
(forecast)
Breakdown of year-end dividend for the fiscal year ended March 2023
Ordinary dividend: 5.00 yen, Commemorative dividend: 1.00 yen

Year-end

Total

Yen
4.50
6.00

Yen
4.50
6.00

6.00

6.00

Total
dividend(Total)Million yen
393
510

Dividend
payout ratio(Consolidated)
%
17.3
19.2
20.5

Rate of total
dividend to
net assets(Consolidated)
%
3.6
4.1

3．Forecast of consolidated business results for the fiscal year ending March 2024
(April 1, 2023 through March 31, 2024)(% change from the previous corresponding period)
Net salesYear ending Mar. 2024

Operating income

Net income attributableto owners of parent

Ordinary income

Net income
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen36,390

2.5

3,820

4.2

3,842

2.6

2,497

-7.5

29.32

*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: Yes: 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, 2023
87,849,400 shares
As of March 31, 2022
87,849,400 shares② Treasury stock at the end of period:
As of March 31, 2023
2,697,857 shares
As of March 31, 2022
380,707 shares③ Average number of stock during period
Year ended March 31, 2023
86,537,843 sharesYear ended March 31, 2022
87,468,693 shares(Reference) Summary of non-consolidated business results
1. Non-consolidated business results for the fiscal year ended March 2023
(April 1, 2022 through March 31, 2023)(1) Non-consolidated results of operations(% change from the previous corresponding period)
Year ended Mar. 2023
Year ended Mar. 2022

Net sales
Million yen
3,168
3,066

%
3.3
19.3

Operating income
Million yen
%
1,633
17.0
1,396
57.4

Yen
18.98
15.30

Diluted net income per
share
Yen
-

Net income
per share
Year ended Mar. 2023
Year ended Mar. 2022

Ordinary income
Million yen
%
1,758
15.4
1,523
46.9

Net income
Million yen
%
1,642
22.7
1,338
887.5

Shareholders’ equity
ratio

Net assets per
share(2) Non-consolidated financial position
Total assets
Million yen
As of Mar. 31, 2023
23,580
As of Mar. 31, 2022
23,124(Reference) Shareholders’ equity:
As of March 31, 2023: 6,687 million yen
As of March 31, 2022: 6,166 million yen

Net assets
Million yen
6,687
6,166

%
28.4
26.7

Yen
78.53
70.50

* 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. Summary of Operating Results (4) Future outlook” (Page 6).
・On Thursday, May 18, 2023, the Company plans to hold results briefing for media members, institutional investors and analysts via a webcast.

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(Changes in accounting policies)………………………………………………………………………… 16(Changes in presentation)…………………………………………………………………………… 16(Segment information) ……………………………………………………...……………………………16(Per-stock information) ……………………………………………………………...………………...…17(Significant subsequent events) ………………………………………………………………………..…17

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 continued to recover moderately thanks to the progress in thenormalization of economic and social activities due to the relaxation of some restrictions to prevent the spread of COVID-19. On
the other hand, there are concerns about downside risks, such as rises in energy and other commodity prices, supply-side
constraints, and changes in the financial and capital markets, and the economic environment remains uncertain.
In the childcare support business, conditions remained challenging due to the acceleration of the declining birth rate accompanying
the sharp drop in the number of births, the continuing shortage of childcare workers, and a decline in the number of children
because of people refraining from using the facilities due to COVID-19 at the beginning of the period. The government is
promoting various measures to improve the environment for childcare. Furthermore, the bill to establish the “Children andFamilies Agency” has been enforced, and "measures to counter the declining birth rate on a different dimension" are being
considered. As mentioned above, the government is committed to creating a better environment for childcare, and the social role ofthe childcare industry will become increasingly important.
Under these situations, our Group also has been taking prompt measures against COVID-19 by establishing our own response
standards and implementing thorough safety measures in collaboration with local governments.
In addition, we are required to transform ourselves into "facilities that would continue to be selected by customers" by further
improving the quality of our childcare support in response to changes in the social environment and the needs of parents, rather
than prioritizing quantitative expansion through the opening of new facilities. In order to respond promptly to these changes in theenvironment, our Group has set more reliable management targets.
Our Group has continued to take advantage of changes in the social and business environment and maintained the management
policies formulated in the previous fiscal year with the key objectives of "improve profitability and efficiency," "improvesoundness," and "improve growth potential. We worked to effectively allocate and invest management resources to build a solidmanagement foundation and aim for sustainable growth through the creation of new businesses.
Specifically, with digitalization as the pillar of reform to respond to changes in the social environment, in terms of "improve
profitability and efficiency," we had been promoting a dominant strategy in collaboration with nursery schools, school clubs, andchildren's houses with 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, develop new nursery schools specializing in English
education, improve profitability by further optimizing staffing, and establish an integrated childcare support system that captures
the infant, early childhood, and children's period. As a result, we actively promoted new contracts to double the current number ofschool clubs and children's houses to 200 facilities.
With regard to “improve soundness”, we have expanded our human resource education and training systems as the key to childcare
support is "human resources”, and promoted operational sophistication through streamlined operations. In addition, we havefurther improved the quality of our childcare support and promoted the creation of “facilities that would continue to be selected bycustomers” by disseminating and implementing both internally and externally the Group's Management Philosophy, Corporate
Message, Operational Philosophy, Childcare and Nurturing Philosophy, and Childcare and Nurturing Policy. In addition, we
worked to eliminate wasteful operations by reviewing various operations and to improve operational efficiency by promoting
systematization.
With regard to "improve growth potential," we actively promoted the development of new businesses based on the know-how andmarketing cultivated through the operation of the child-raising support business as the second pillar of our business.
As a new business, we have started the operation of a childcare support platform "codomel," to provide various services andproducts tailored to the child's each development stage and for external sales to other companies in the same industry. As a firststep, we started to offer matching services mainly for childrearing generations in which users can individually sell and purchasebaby care goods, apparel, and other goods (reused goods) on the web. As the second service, based on the concept of "for the smileof all families, we started to provide products and services that resolve the problems of childrearing generation, in collaboration
with various companies. We are expanding the number of registered members through a discount coupon service for childcarerelated products and services, as requested by customers as a launch marketing plan. In the future, we intend to expand our various
services and businesses not only domestically but also globally, including the provision of services in collaboration with various
companies, introduction and dispatch of professional personnel, and on-demand streaming of professional training programs. In
addition, the Group will provide a range of services to help parents with their problems, such as a food business offering prepared
meal services and the provision of various supplies necessary for each child's age.
Our group has also strengthened and promoted support for children with developmental concerns, such as through support
programs for visiting childcare facilities, etc. Based on the expertise gained through our childcare support, we will provide suchsupport to more children and their parents, such as expanding the support with high levels of expertise for children with potential
developmental disabilities. In addition, to respond to changes in the social environment, we will provide child-raising support tomore children and parents, including the establishment of the "bilingual nursery school" with full-time native English-speaking
teachers.

2

As for the new facility openings, the Group has opened a total of 15 facilities during the fiscal year ended March 2023
according to the plan, including 2 nursery schools (2 in Tokyo) and 13 school clubs and children's houses (13 in Tokyo).
(Nursery School)
Asc Musashi-Koganei Minamiguchi Nursery School
Mitaka City Flexible Childcare Center Hinata(School Club)
Takenotsuka School Club
Takaban Elementary School Club
Wakuwaku Nishi-Ukima Hiroba/Nishi-Ukima Club No. 1
Wakuwaku Nishi-Ukima Hiroba/Nishi-Ukima Club No. 2
Wakuwaku Nishi-Ukima Hiroba/Nishi-Ukima Club No. 3
Wakuwaku Akabane Hiroba/Akabane Children’s Club No. 1
Wakuwaku Akabane Hiroba/Akabane Children’s Club No. 2
Wakuwaku Akabane Hiroba/Akabane Children’s Club No. 3
Wakuwaku Kirigaoka-sato Hiroba/Kirigaoka-satokko Club No. 1
Wakuwaku Kirigaoka-sato Hiroba/Kirigaoka-satokko Club No. 2
Wakuwaku Kirigaoka-sato Hiroba/Kirigaoka-satokko Club No. 3
Bunkyo-ku Meidai Temporary Chidcare Room
(Children's House)
Soka City Matsubara Children and Youth Exchange Center "miraton"(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Apr. 1, 2022)(Jun. 1, 2022)(Jan. 1, 2023)*1: Mitaka City Flexible Childcare Center Hinata began operation on May 1, 2022.
*2: As of March 31, 2022, the Company closed Tokyo Licensed Nursery Schools named Asc Itabashi-honcho Nursery School, Asc Shiodome
Nursery School, Asc Takadanobaba Nursery School, Asc Yanokuchi Nursery School. In addition, due to the expiration of the contract, theCompany withdrew from school clubs named Rinsen Elementary School After School Club, Hiroo Elementary School After School Club,
Sarugaku Elementary School After School Club, Nagayato Elementary School After School Club, and a children's house named FukuroChildren's House on March 31, 2022.

As a result, the Group came to have 209 nursery schools, 89 school clubs, 11 children's houses, making a total of 309
childcare facilities as of March 31, 2023.
The Group’s consolidated net sales were 35,507 million yen (up 3.3% year on year), operating income was 3,667 million yen(up 9.6% year on year), ordinary income was 3,745 million yen (up 11.5% year on year), and net income attributable toowners of parent was 2,698 million yen (up 18.4% year on year). Both sales and profits increased year-on-year and reachedrecord-high profits.
The major factors are as follows:
Net sales increased 3.3% year on year, reflecting the success of efforts to create "facilities that would continue to be selectedby customers" such as opening new facilities, commissioning new facilities, conducting online facility tours ahead of othercompanies, implementing online programs such as English, gymnastics, music, and dance, and introducing early childhood
learning programs, despite the fact that each facility became partially closed since the number of COVID-19 cases continued
to rise and fall at the beginning of the period.
In terms of operating income and ordinary income, the cost of sales increased due to an increase in electricity prices and asurge in the prices of various purchased merchandise. However, we worked to control and reduce costs by increasing net
sales through the above-mentioned measures, improving operating efficiency by reallocating personnel at each facility andreviewing the ordering system. Operating income increased by 9.6% year on year and ordinary income increased by 11.5%
year on year. This was mainly due to an increase in provision for bonuses resulting from a change in the period covered bybonuses following the introduction of a new personnel system, as well as an increase in expenses resulting from special
factors associated with the introduction of a new system in the previous fiscal year.
Net income attributable to owners of parent increased by 18.4% year on year. In addition to the increase in operating income
and ordinary income mentioned above, the Company recorded an extraordinary income of 376 million yen from the sale of
fixed assets (land and buildings, etc.) of 4 of 7 nursery schools, in which we acquired land and building as a foothold for ourchild-raising support business in the past, as we considered off-balance sheet financing for these facilities to avoid the risksof holding such assets.

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 35,694 million yen (up 1,419 million
yen from the end of the previous fiscal year).
Current assets totaled 23,613 million yen (up 2,681 million yen), mainly reflecting an increase of 2,034 million yen in cash anddeposits and 554 million yen in accounts receivable.
Fixed assets totaled 12,081 million yen (down 1,261 million yen). This was mainly due to an increase of 184 million yen in tools,
furniture and fixtures, while there were decreases of 491 million yen in buildings and structures, 306 million yen in land, 184
million yen in long-term loans receivable, 136 million yen in construction in progress, and 121 million yen in deferred tax assets.
Total liabilities amounted to 22,110 million yen (down 188 million yen).
Current liabilities totaled 8,294 million yen (up 402 million yen), mainly reflecting increases of 541 million yen in current portionof long-term loans payable and 119 million yen in accounts payable, while there was a decrease of 208 million yen in income taxes
payable.
Fixed liabilities totaled 13,816 million yen (down 591 million yen). This was mainly due to a decrease of 590 million yen in longterm loans payable.
Total net assets as of the end of the current fiscal year totaled 13,584 million yen (up 1,608 million yen from the end of theprevious fiscal year), mainly because retained earnings increased by 2,304 million yen, while treasury stock increased by 676
million yen.

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 2,735 million yen
from the funds obtained through operating activities; 411 million yen obtained through investing activities; and 1,112 million yen
used in financing activities, totaling 19,330 million yen, up 2,034 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 2,735 million yen (3,884 million yen was provided during the previous
consolidated fiscal year).
This was mainly due to income before income taxes and minority interests of 4,063 million yen, depreciation and amortization of
737 million yen, an increase in accounts payable and accrued expenses of 251 million yen, and a decrease in other fixed assets of
116 million yen, offset by income taxes paid of 1,445 million yen, an increase in accounts receivable-other of 554 million yen, anda gain on sales of fixed assets of 355 million yen.
[Cash flows from investing activities]
The funds provided by investing activities were 411 million yen (413 million yen during the previous consolidated fiscal year).
This was mainly due to proceeds from sales of property, plant and equipment of 996 million yen, proceeds from collection of longterm loans receivable of 261 million yen, and proceeds from subsidies received of 138 million, while there were payments forpurchases of property, plant and equipment of 869 million yen.
[Cash flows from financing activities]
Net cash used in financing activities was 1,112 million yen (1,978 million yen was provided during the previous consolidated fiscal
year).
This was mainly due to repayments of long-term loans payable of 3,498 million yen, while there were proceeds from long-termloans payable of 3,450 million yen, purchase of treasury stock of 711 million yen, and cash dividends paid of 390 million yen.
The related index of our Group’s cash flow is as follows:
FY3/21
Shareholders’ equity ratio (%)
Shareholders’ equity ratio against
current price (%)
Cash flow to interest-bearing debts
ratio (years)
Interest coverage ratio (x)FY3/22

FY3/23

33.7

34.9

38.1

83.8

55.4

86.4

5.5

4.1

5.8

41.6

54.8

38.5

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 financial 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
As for the future outlook, amid continuing concerns about the spread of COVID-19, despite ongoing progress in resolving thenumber of children on waiting lists at nursery schools, there still is an issue for developing the childcare environment, as thenumber of children on waiting lists is increasing to more than 15,000 at school clubs. Meanwhile, the government is promoting
various measures to improve the childcare environment, such as the consideration of measures to address the declining birth rate
on a different dimension. The social role of the childcare support business is becoming even more important.
In light of this situation, we intend to prioritize qualitative improvements, rather than quantitative expansion with the opening of
new facilities. Through further improving the quality of our childcare support, we need to create the "facilities that would continue
to be selected by customers" that respond to changes in the social environment and the needs of parents. In the medium-term
management plan, management targets are set with a higher degree of certainty.
As a result of efforts to succeed in various measures, build an efficient management structure and reduce costs in relation to thenumerical targets in our Medium-term Management Plan (fiscal year ended March 31, 2022 to fiscal year ending March 31, 2024),
we have achieved a recorded-high profit with increased sales and profit in the fiscal year ended March 31, 2023.
In the environment that surrounds our childcare support business, the government has established the “Children and Families
Agency” and been enhancing the childcare environment as a measure to tackle the declining birthrate. Meanwhile, the competition
to acquire children is intensifying in regions where the declining birthrate is accelerating. Accordingly, there is a need for structuralreforms for sustainable growth and further earnings expansion and the development and early monetization of new businesses.
In this way, we have formulated the consolidated numerical targets with a rolling method to align with the announcement of ourconsolidated earnings forecast for the fiscal year ending March 31, 2024, in light of progress toward the target values in theMedium-term Management Plan (fiscal year ended March 31, 2022 to fiscal year ending March 31, 2024) and changes in theexternal environment. At the same time, we are working on the priority targets we have stated in the Medium-term Management
Plan: “Achieve growth and establish a competitive advantage,” “Reform our profit structure,” and “Reform our managementbase.”[Priority Targets of the Medium-Term Management Plan]
We will create new services and value, establish a competitive advantage and solve social problems through our business byproactively developing new businesses for growth, developing infrastructure utilizing M&As and systemization, and building solid
business foundations with structural reforms and business reforms. Through these efforts, we will aim for sustainable growth while
realizing the management philosophy of our group: “Through child care support, we will contribute to creating smiles foreveryone.”(1) Achieve growth and establish a competitive advantage
We will develop new businesses for medium- to long-term growth, proactively promote M&As to expand our existing businesses
and create new businesses, enhance our learning programs to ensure a competitive advantage, and promote various differentiation
strategies to solve the concerns of parents.
(2) Reform our profit structure
We will improve profitability by reviewing the business structure, eliminating wasteful operations, improving management
efficiency through ICT, and further optimizing staffing. We will also further streamline operations by reforming business processes
and introducing systems.
(3) Reform our management base
The key to our business is people. Therefore, we will enhance our personnel education and training structure. At the same time, wewill retain and develop outstanding human resources and improve employee engagement to lead to a change in awareness.
Moreover, we will strengthen our human resources strategy and group governance to support sustainable growth and superiority.
For the above reasons, as for the consolidated performance for the next fiscal year, the Company forecasts net sales of 36,390
million yen (up 2.5% year on year), operating income of 3,820 million yen (up 4.2%), ordinary income of 3,842 million yen (up2.6%), and net income attributable to owners of parent was 2,497 million yen (down 7.5%).
The decrease in the forecast of net income attributable to owners of the parent in the next fiscal year compared to the current fiscal
year is due to the recording of an extraordinary gain of 376 million yen as a result of the sale of fixed assets (land, buildings, etc.)
of 4 of the 7 facilities with land and buildings in the current fiscal year.

6The following is a breakdown of the childcare facilities that the Group has entrusted with the opening of new facilities during the
fiscal year ended March 2023 and has started new operations on April 1, 2023.
(Nursery School)
Shinagawa Municipal Yashio Nishi Nursery School(School Club/Children's House)
Heisei Elementary School After School Kids’ Club
Ryusen Kids’ Club
Chofu Municipal Chowa Elementary School Club No.2
Minamikko Hiroba
Minato-ku Houka-go→Club Konan
Takaban Elementary School Lan Lan Hiroba
Yonsho Aozora School Club
Asc Asakusabashi Kids’ Club

(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Apr. 1, 2023)(Jun. 1, 2023)(Bilingual Nursery School)
The Company changed licensed nursery schools and Tokyo Licensed Nursery Schools to bilingual nursery school, which isstaffed by native English-speaking teachers.
Asc Bilingual Nursery School Eifuku (formerly Asc Eifuku Nursery School)(Apr. 1, 2023)
Asc Bilingual Nursery School Kameido (formerly Asc Kameido Nursery School)(Apr. 1, 2023)
GENKIDS Bilingual Nursery School Shinkoyasu (formerly GENKIDS Shinkoyasu Nursery School) (Apr. 1, 2023)
Asc Bilingual Nursery School Asakusabashi (formerly Asc Asakusabashi Nursery School)(Jun. 1, 2023)
Ask Bilingual Nursery School Meidai-mae (formerly Asc Meidai-mae Nursery School)(Jun. 1, 2023)*1: As of March 31, 2023, the Company closed Tokyo Licensed Nursery School named Asc Fudo-mae Nursery School. In addition, due to the
expiration of the contract, the Company withdrew from school clubs named Wakuwaku Akabane Hiroba/Akabane Children’s Club No. 1,
Wakuwaku Akabane Hiroba/Akabane Children’s Club No. 2, Wakuwaku Akabane Hiroba/Akabane Children’s Club No. 3, Wakuwaku Kirigaokasato Hiroba/Kirigaoka-satokko Club No. 1, Wakuwaku Kirigaoka-sato Hiroba/Kirigaoka-satokko Club No. 2, Wakuwaku Kirigaoka-sato
Hiroba/Kirigaoka-satokko Club No. 3, Wakuwaku Fukuro Hiroba/Akakita Hibari Club No.3, Wakuwaku Yoniwa Hiroba/Yoniwa Elementary
School Icho. Club No. 1, Wakuwaku Yoniwa Hiroba/Yoniwa Elementary School Icho. Club No. 2, Mitaka Municipal Minamiura School Club
Annex A, Minato-ku Houka-go→Club Honmura, Bunkyo-ku Meidai Temporary Childcare Room as of March 31, 2023.

2. Basic Policies regarding the Selection of Accounting Standards
Our Group produces 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](1) [Consolidated Balance Sheet](Thousand yen)Previous Fiscal Year
(March 31, 2022)

Current Fiscal Year
(March 31, 2023)

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade17,296,668
68,65019,330,865
60,198Inventories
Accounts receivable - other

63,9002,708,806

55,476
3,263,596

794,924-1,766904,246-1,291

20,931,185

23,613,092

Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures

12,326,804

12,024,967

Accumulated depreciation and impairment-7,450,666-7,640,405

Buildings and structures, net

4,876,138

4,384,561

Machinery, equipment and vehicles

203

203

Accumulated depreciation

-121

-150

82

53

Machinery, equipment and vehicles, net
Tools, furniture and fixtures

1,106,051

1,340,178

Accumulated depreciation and impairment-820,246-869,662

Tools, furniture and fixtures, net

285,804

470,516Land
Construction in progress

435,909
137,030

129,529330

Total tangible fixed assets

5,734,966

4,984,990

Intangible assets
Goodwill

136,736

106,350

Other

37,904

39,689Total intangible assets

174,640

146,040Investment securities
Long-term loans receivable

453,084
2,989,672

406,875
2,804,871

Guarantee deposits
Deferred tax assets

1,903,902
1,579,652

1,819,824
1,458,611

Other
Allowance for doubtful accounts

513,833-6,123465,177-4,727

Total investments and other assets

7,434,021

6,950,632

13,343,629

12,081,664

34,274,814

35,694,756

Investments and other assets

Total fixed assets
Total assets8

(Thousand yen)Previous Fiscal Year
(March 31, 2022)

Current Fiscal Year
(March 31, 2023)

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

165,552
3,113,291

186,091
3,654,742

Accounts payable – other
Income taxes payable

1,561,978641,517

1,681,700
433,452

Accrued consumption taxes
Reserve for bonuses

143,892
906,420

92,647866,100

Asset retirement obligation
Other

49,652
1,309,498

3,087
1,376,561

Total current liabilities

7,891,803

8,294,383

Long-term debt
Retirement benefit liability

12,816,466
940,313

12,226,111
970,699

Asset retirement obligation
Other

647,1273,650

619,549-

14,407,557

13,816,359

22,299,361

22,110,742

Shareholders’ equity
Capital1,603,955

1,603,955

Capital surplus
Retained earnings

1,449,544
9,117,409

1,455,989
11,422,289

Fixed liabilities

Total fixed liabilities
Total liabilities
Net assets

Treasury stock-107,515-784,199

12,063,393

13,698,034

Accumulated other comprehensive income
Valuation difference on available-for- salesecurities
Deferred gains or losses on ledges-49,918-111,798-2,5331,143

Remeasurements of defined benefit plans-35,488-3,365

Total shareholders’ equity

Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

9-87,940-114,020

11,975,452

13,584,013

34,274,814

35,694,756

(2) [Consolidated Statement of Income and Consolidated Statement of Comprehensive Income][Consolidated Statement of Income]Net sales
Cost of sales

Previous Fiscal Year
(Apr. 1, 2021
- March 31, 2022)
34,373,668
28,052,451(Thousand yen)
Current Fiscal Year
(Apr. 1, 2022
- March 31, 2023)
35,507,855
29,110,590

Gross profit

6,321,216

6,397,264

Selling, general and administrative expenses

2,976,295

2,729,999

Operating income

3,344,921

3,667,265

Non-operating income
Interest income

77,20377,750Subsidies for employment adjustment
Other

2,172
23,052

53,34230,407

Total non-operating income

102,429

161,500

69,13870,588

19,615

12,967

Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of fixed assets

88,75483,555

3,358,596

3,745,210

148,715355,993

Other

34,896

20,548Extraordinary income

183,611

376,542

Extraordinary loss
Loss on retirement of fixed assets

389

3,189

Impairment loss (on facilities)
Loss on sales of investment securities

43,6103,052

55,467-

Total extraordinary loss

47,051

58,657

Income before income taxes and others

3,495,156

4,063,095

Corporate, inhabitant and enterprise taxes

1,175,928

1,234,746

39,633

129,858

Total income tax

1,215,561

1,364,605

Net income

2,279,594

2,698,489

Net income attributable to owners of parent

2,279,594

2,698,489

Income taxes-deferred

10[Consolidated Statement of Comprehensive Income]Previous Fiscal Year
(Apr. 1, 2021
- March 31, 2022)
2,279,594(Thousand yen)
Current Fiscal Year
(Apr. 1, 2022
- March 31, 2023)
2,698,489

Valuation difference on available-for- sale securities
Deferred gains or losses on ledges

35,041
4,415-61,879
3,677

Remeasurements of defined benefit plans-10,242

32,122

Total other comprehensive income

29,214-26,079

Comprehensive income

2,308,808

2,672,409

BreakdownComprehensive income attributable to owners of parent

2,308,808

2,672,409

Net income
Total accumulated other comprehensive income11(3) Consolidated Statements of Changes in Shareholders’ Equity
Previous Fiscal Year (April 1, 2021 – March 31, 2022)(Thousand yen)
Shareholders’ equity
CapitalBalance at the beginning ofcurrent period
Changes of items during theperiodCapital surplus

1,603,955

Retained earnings

1,449,544

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

7,178,942

Total shareholders’equityTreasury stock-107,515

10,124,926-341,127-341,127

2,279,594

2,279,594--

1,938,466-

1,938,466

1,603,955

1,449,544

9,117,409-107,515

12,063,393

Accumulated other comprehensive income
Valuation difference on
Deferred gains or losses
available-for- saleon ledges
securities
Balance at the beginning ofcurrent period
Changes of items during theperiod-84,960-6,948Remeasurements ofdefined benefit plans

Total accumulated othercomprehensive income-25,245-117,154

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

Total net assets

10,007,772-341,127
2,279,594
35,041

4,415-10,242

29,21429,21435,041

4,415-10,242

29,214

1,967,680-49,918-2,533-35,488-87,940

11,975,452

12

Current Fiscal Year (April 1, 2022 – March 31, 2023)(Thousand yen)
Shareholders’ equity
CapitalBalance at the beginning ofcurrent period
Changes of items during theperiodCapital surplus

1,603,955

Retained earnings

1,449,544

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

9,117,409

Treasury stock-107,515

Total shareholders’equity12,063,393-393,609-393,609

2,698,489

2,698,489-711,577-711,577

6,935

30,862

37,798

-491

4,031

3,540

-

6,444

2,304,879-676,683

1,634,640

1,603,955

1,455,989

11,422,289-784,199

13,698,034

Accumulated other comprehensive income
Valuation difference on
Deferred gains or losses
available-for- saleon ledges
securities
Balance at the beginning ofcurrent period
Changes of items during theperiod-49,918-2,533Remeasurements ofdefined benefit plans

Total accumulated othercomprehensive income-35,488-87,940

Dividends from surplus

11,975,452-393,609

Net income attributableto owners of parent
Purchase of treasury
shares2,698,489-711,577

Disposal of treasury stock
Restricted stockcompensation
Net changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period

Total net assets

37,7983,540-61,879

3,677

32,122-26,079-26,079-61,879

3,677

32,122-26,079

1,608,561-111,798

1,143-3,365-114,020

13,584,013

13

(4) Consolidated Statement of Cash Flows(Thousand yen)
Current Fiscal Year
(Apr. 1, 2022
- March 31, 2023)

Previous Fiscal Year
(Apr. 1, 2021
- March 31, 2022)
Net cash provided by (used in) operating activities
Income before income taxes and others

3,495,156

4,063,095

Depreciation and amortization
Impairment loss

708,752
43,610737,366
55,467

Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts

30,385-6,03930,385-1,871

Increase (decrease) in provision for bonuses
Increase (decrease) in liabilities relating to retirement
benefits
Loss (gain) on sale of investment securities
Share-based payment expenses

361,945-40,32085,03279,353

3,052
-

2,655

Interest and dividends income
Interest expenses-77,203
69,138-77,750
70,588Loss (gain) on sales of fixed assets
Loss on retirement of fixed assets
Decrease (increase) in notes and accounts receivabletrade
Decrease (increase) in inventories-148,715
389-355,993
3,189

19,608

8,452

103,580

8,424

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

300,848
13,275-554,790-13,083-53,713

20,538-55,507

251,817-16,943-51,244

Increase (decrease) in advances received
Decrease (increase) in other current assets-113,090
88,986-20,592-78,780

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

208,446-39,964

116,786-4,958

Increase (decrease) in other fixed liabilities

5,553

2,842

5,026,584

4,251,578

SubtotalInterest and dividends income received

288

187

Interest expenses paid
Income taxes (paid) refund-70,909-1,071,534-70,960-1,445,567

Net cash provided by (used in) operating activities

3,884,429

2,735,238

14

(Thousand yen)
Current Fiscal Year
(Apr. 1, 2022
- March 31, 2023)

Previous Fiscal Year
(Apr. 1, 2021
- March 31, 2022)
Net cash provided by (used in) investing activities
Proceeds from sales of property, plant and equipment

461,310996,251-687,204-4,512-869,848-13,342

Proceeds from sales of investment securities
Proceeds from collection of guarantee deposits

17,481
44,86447,435

Payments for guarantee deposits
Collection of long-term loans receivable-37,710277,591-8,770261,229

Payments of long-term loans receivable
Proceeds from subsidy income-35,000
449,115-45,738
138,530

Other-72,936-94,087

Net cash provided by (used in) investing activities

413,000

411,659

Purchase of property, plant and equipment
Purchase of intangible assets

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

6,030,880

3,450,000

Repayments of long-term loans payable
Proceeds from disposal of treasury shares-3,714,431--3,498,904
37,798Proceeds from disposal of treasury shares
Cash dividends paid

-338,133-711,577-390,017

1,978,315-1,112,700--

6,275,745

2,034,197

Cash and cash equivalents at beginning of period

11,020,922

17,296,668

Cash and cash equivalents at end of period

17,296,668

19,330,865

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 equivalents15(5) Notes on the consolidated financial statements(Notes on going concern assumption)
None applicable.
(Changes in accounting policies)(Application of guidelines for the application of accounting standard for fair value measurement, etc.)
Guidelines for the Application of the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 31, June 17, 2021,
hereinafter referred to as the "Guidelines for the Application of the Fair Value Measurement Accounting Standard") and otherstandards have been applied from the beginning of the current fiscal year. In accordance with the transitional treatment stipulated
in Article 27-2 of the Guidelines for the Application of the Fair Value Measurement Accounting Standard, the new accounting
policy stipulated by the Guidelines for the Application of the Fair Value Measurement Accounting Standard will be applied in the
future. The application of this standard has no effect on the consolidated financial statement.
(Changes in presentation)(Consolidated Statements of Income)”Subsidies for employment adjustment", which were included in "Other" under "Non-operating income" in the previous fiscal
year, are presented separately from the current fiscal year due to an increase in their monetary materiality. To reflect this change
in presentation, the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, 25,225 thousand yen presented as "Other" under "Non-operating income" in the Consolidated Statement of Income
for the previous fiscal year has been reclassified as "Subsidies for employment adjustment" of 2,172 thousand yen and "Others"of 23,052 thousand yen.
"Payments for employment of persons with disabilities" under "Non-operating expenses," which was presented separately in theprevious fiscal year, has been included in "Other" from the current fiscal year due to its immateriality. To reflect this change inpresentation, the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, the amounts of "Payment for employment of persons with disabilities" of 13,500 thousand yen and "Other" of 6,115
thousand yen, which were presented as "Non-operating expenses" in the Consolidated Statement of Income for the previous
fiscal year, have been reclassified as "Other" of 19,615 thousand yen.
"Gain on reversal of asset retirement obligations" under "Extraordinary income," which was presented separately in the previous
fiscal year, is presented in "Other" from the current fiscal year due to its immateriality. To reflect this change in presentation, theconsolidated financial statements for the previous fiscal year have been reclassified.
As a result, the gain on reversal of asset retirement obligations of 34,896 thousand yen, which was presented as "Extraordinary
income" in the consolidated statement of income for the previous fiscal year, has been reclassified as "Other" of 34,896 thousand
yen.
(Consolidated Statements of Cash Flows)"Gain on reversal of asset retirement obligations" under "Cash flows from operating activities," which was stated separately inthe previous fiscal year, has been included in "Increase (decrease) in other current liabilities" from the current fiscal year, due toits immateriality. To reflect this change in presentation, the consolidated financial statements for the previous fiscal year havebeen reclassified.
As a result, "Reversal of asset retirement obligations" of -34,896 thousand yen and "Increase (decrease) in other current
liabilities" of -5,068 thousand yen, which were shown in "Cash flow from operating activities" in the consolidated cash flow
statement for the previous financial year, has been reclassified as "Increase (decrease) in other current liabilities" of -39,964
thousand yen.
(Segment Information)
As our group operates within one single segment (nursery service), we have omitted the descriptions as such.

16

(Per-stock Information)
Previous Fiscal Year
(Apr. 1, 2021
- March 31, 2022)

Current Fiscal Year
(Apr. 1, 2022
- March 31, 2023)

Net assets per share

136.91 yen

159.53 yen

Net income per share

26.06 yen

31.18 yen

(Note) 1. Diluted net income per share is omitted as there are no dilutive shares.
2. The basis for calculating net income per share is as follows:
Previous Fiscal Year
(Apr. 1, 2021
- March 31, 2022)
Net income attributable to ownersof parent (thousand yen)
Net income not attributable tocommon shareholders (thousandyen)
Net income attributable to ownersof parent related to common shares(thousand yen)
Average number of common stockduring period (shares)(Significant events after the reporting period)
None applicable.

17

Current Fiscal Year
(Apr. 1, 2022
- March 31, 2023)

2,279,594

2,698,489--

2,279,594

2,698,489

87,468,693

86,537,843