Financial Results for the Fiscal Year Ended March 31, 2015
[Japanese GAAP] (Consolidated)
May 11, 2015
Stock Listing: TSE

Name of Listed Company:
UCHIYAMA HOLDINGS Co., Ltd.
Code Number: 6059
URL: http://www.uchiyama-gr.jp
Representative: Fumiharu Uchiyama, President and Representative Director
Contact Point: Takehiro Yamamoto, Senior Managing Director and Manager of Business Planning Office
Phone: (093) 551-0002
Scheduled Date of Annual Meeting of Shareholders:June 26, 2015
Scheduled Date of Dividend Payment Start:
June 29, 2015
Scheduled Date of Financial Statements Filing:
June 29, 2015
Supplementary materials for Financial Results: None
Investor conference for Financial Results: Yes (For institutional investors and security analysts)(Amounts are rounded down to the nearest one million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2015 (April 1, 2014 – March 31, 2015)(% of change from previous year)(1) Consolidated Financial Results
Net sales
Operating income
Ordinary income
Net income
Millions of yen

FY 2015
FY 2014(Note) Comprehensive income%

Millions of yen%

23,6288.6
1,432(32.4)
21,758
9.0
2,120
9.4
FY 2015: ¥ 1,304 million (-41.5%)

Net income
per share

Millions of yen%

Millions of yen

1,554(35.5)
2,411
24.6
FY 2014: 2,229 million (60.6%)

1,289
2,217

%

(41.8)
61.0

Diluted net
income per share

Return on equity

Ordinary income
to total assets

Operating income
to net sales

Yen

%

%

%

Yen

FY 2015
59.66
59.56
8.7
4.9
6.1
FY 2014114.10113.8317.8
8.6
9.7(Reference) Equity in earnings of affiliated companies: FY 2015: ¥ - million
FY 2014: ¥ - million(Note) The Company conducted the 4-for-1 common share split as of January 1, 2014. The “Net Income per Share” and “Diluted
Net Income per Share” are calculated assuming that the said share split was conducted at the beginning of the previous
consolidated FY.
(2) Consolidated Financial Position
Total assets

Net assets

Millions of yen

Equity ratio

Net assets per share

Millions of yen%%

FY 2015
32,693
15,38647.0
711.35FY 201430,642
14,30946.7
661.89(Reference) Equity capital:
FY 2015: ¥15,378 million
FY 2014: ¥14,309 million(Note) The Company conducted the 4-for-1 common share split as of January 1, 2014. The “Net assets per share” is calculated
assuming that the said share split was conducted at the beginning of the previous consolidated FY.
(3) Consolidated Cash Flows
Cash flows fromoperating activities
FY 2015
FY 2014

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents
at end of year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

2,010
776

(911)
(590)

249
2,215

11,0079,659

2. Dividends
Dividends per share
End ofthe 1QEnd ofthe 2QEnd ofthe 3Q

Year-end

AnnualTotal
dividends(annual)Dividends
Dividends on
payout ratio
net assets(consolidated) (consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of Yen%%

FY 2014
20.00
5.00
25.00
200
8.8
1.6
－
－
FY 2015
6.00
5.00
11.00
237
18.4
1.6
－
－
FY 2016 (forecast)
5.00
5.00
10.00
20.5
－
－
(Note) The Company conducted the 4-for-1 common share split as of January 1, 2014. However, the actual dividends before thesaid share split are stated for the second quarter of the term ended March 2014. The year-end dividends for the term ended March2014 are the figures after share split. As for the modified figures of dividend considering the share split, please refer to“Retrospective modification of the dividend associated with share split” described below.
3. Forecasts of Consolidated Financial Results for the Fiscal Year Ending March 31, 2016 (April 1, 2015 – March 31, 2016)(% of change from previous year for full year, same quarter of the previous year for 2Q)

Net sales

2Q(cumulative)
Full year

Operating income

Ordinary income

Net income
per share

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

12,358

6.4

697

(7.0)

730

(11.9)

433

(9.4)

20.07

25,670

8.6

1,673

16.8

1,696

9.1

1,054

(18.2)

48.78

*Notes(1) Changes in significant subsidiaries (changes of specified subsidiaries resulting in changes in scope of consolidation) during
the current term: None
(2) Changes in accounting policies, accounting estimates and restatements:
1) Changes in accounting policies due to revisions of accounting standards:
2) Changes in accounting policies due to reasons other than above 1):3) Changes in accounting estimates:
4) Restatements:(3) Number of outstanding shares (common stock)1) Number of outstanding shares (including treasury
stock) at end of term2) Number of treasury stock at end of term3) Average number of shares

None
None
None
None

FY 2015

21,618,800 shares

FY 2014

21,618,800 shares

FY 2015376 shares

FY 2014376 shares

FY 2015

21,618,424 shares

FY 2014

19,435,374 shares(Note) The Company conducted the 4-for-1 common share split as of January 1, 2014. The “Number of outstanding shares (common
stock)” is calculated assuming that the said share split was conducted at the beginning of the previous consolidated FY.

(Reference) Overview of Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for the Fiscal Year Ended March 31, 2015 (April 1, 2014 – March 31, 2015)(% of change from previous year)(1) Non-Consolidated Financial Results
Net sales
Operating income
Ordinary income
Net income
FY 2015
FY 2014

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

670
674

(0.6)
1.6

168
175

(4.1)
(5.0)

239
189

26.4
(1.4)

227
197

15.2
(2.6)

Net income
per share

Diluted net income
per shareYen

Yen

FY 2015
10.52
10.50
FY 2014
10.16
10.14(Note) The Company conducted the 4-for-1 common share split as of January 1, 2014. The “Net Income per Share” and “Diluted
Net Income per Share” are calculated assuming that the said share split was conducted at the beginning of the previous
consolidated FY.
(2) Non-Consolidated Financial Position
Total assets
FY 2015

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen

%

Yen

5,750

5,458

94.9

252.49FY 2014
5,609
5,468
97.5
252.97(Reference) Equity capital:
FY 2015: ¥5,458 million
FY 2014: ¥5,468 million(Note) The Company conducted the 4-for-1 common share split as of January 1, 2014. The “Net assets per share” is calculated
assuming that the said share split was conducted at the beginning of the previous consolidated FY.
2. Forecasts of Non-Consolidated Financial Results for the Fiscal Year Ending March 31, 2016 (April 1, 2015 – March 31, 2016)(% of change from previous year for full year, same quarter of the previous year for 2Q)

Net sales

2Q (cumulative)
Full year

Ordinary income

Net income pershare

Net income

Millions of yen%

Millions of yen%

Millions of yen

%

Yen

341
683

1.7
1.9

120
234

1.0
(2.2)

118
231

1.6
1.9

5.48
10.72

* Information Regarding Implementation of Auditing Procedures

The auditing procedures of the Financial Instruments and Exchange Act do not apply to this financial notice, and at thetime of release it is being audited using procedures for financial statements.

* Statement regarding the proper use of financial forecasts and other remarks
 Descriptions regarding the future, including the financial projections contained in this report, are based on certain
assumptions currently available to the Company, which are, at the discretion of the Company, deemed reasonable. Actual
financial results may significantly vary due to various factors. For assumptions used in forecasting financial results andprecautions in using the financial projections, please refer to Appendix on Page 2, “1. Analysis concerning results ofoperations and financial condition (1) Analysis concerning results of operations.” The Company is planning to host a financial settlement reporting meeting for investors and analysts on June 9, 2015. The
contents (recorded sound) will be posted together with the handouts on the Company’s Web page immediately after the
meeting.

Retrospective modification of the dividend associated with share split.
The Company conducted the 4-for-1 common share split as of January 1, 2014 based on the resolution at the extraordinary
board meeting held on November 25, 2013. The dividends based on the assumption that said share split was conducted at the
beginning of the previous consolidated fiscal year are as follows.
Annual dividend
End of the 1Q End of the 2Q End of the 3Q
Yen

Yen

End of term

Total

Yen

Yen

FY 2014

―

5.00

―

5.00

10.00

FY 2015

―

6.00

―

5.00

11.00

FY 2016 (forecast)

―

5.00

―

5.00

10.00

○Table of contents of the appendix

1. Analysis Concerning Results of Operations and Financial Condition .......................................................................................... 2(1) Analysis Concerning Results of Operations ............................................................................................................................ 2(2) Analysis Concerning Financial Situation ................................................................................................................................ 3(3) Basic Principle Concerning Profit Sharing and Dividends for the Current and Next Fiscal Year ........................................... 5(4) Risk of Businesses, etc............................................................................................................................................................ 5
2. Situation of the Corporate Group ................................................................................................................................................123. Management Policy .....................................................................................................................................................................16(1) Basic Management Policy......................................................................................................................................................16(2) Target Management Indicator ................................................................................................................................................16(3) Mid- to Long-term Management Strategies ...........................................................................................................................16(4) Challenges of the Company Group ........................................................................................................................................17
4. Basic Principles of Selecting Accounting Standards ...................................................................................................................19
5. Consolidated Financial Statements ..............................................................................................................................................20(1) Consolidated Balance Sheets .................................................................................................................................................20(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .............................................22(3) Consolidated Statements of Changes in Net Assets ...............................................................................................................24(4) Consolidated Statements of Cash Flows ................................................................................................................................26(5) Notes Regarding Consolidated Balance Sheet .......................................................................................................................28(Notes regarding premise of a going concern) .........................................................................................................................28(Change of display method) ....................................................................................................................................................28(Segment information, etc.) .....................................................................................................................................................29(Per share information) ............................................................................................................................................................34(Significant subsequent event).................................................................................................................................................35

1

1. Analysis Concerning Results of Operations and Financial Condition(1) Analysis Concerning Results of Operations(Results of operations during the current FY)
The Japanese economy during the current consolidated fiscal year showed gradual recovery as a result of continuous trendof depreciation of yen and high stock prices as well as improvement in employment situation and corporate performance.
Nonetheless, the future Japanese economy is still unclear because individual consumer’s purchasing power has not yet fully
recovered due to increase in consumption tax as well as price increase of imported raw materials associated withdepreciation of yen.
Under these circumstances, the Company Group has been actively driving sales activities, etc. based on the businessstrategies of each segment. It also advanced actions in order to enhance synergy effects among the business segments tomaximize the profit as a corporate group.
As a result, sales of the current consolidated fiscal year were 23,628,459 thousand yen (up 8.6% Year-on-Year (YoY)),
operating income was 1,432,829 thousand yen (down 32.4% YoY), ordinary income was 1,554,115 thousand yen (down
35.5% YoY), and net income was 1,289,725 thousand yen (down 41.8% YoY).
The results of each segment were as follows.
(1) Nursing Care Business
For the Nursing Care Business segment, the Company Group actively worked to expand the business and opened 3 feebased assisted-living nursing homes for elderly, 3 short-stay centers, and 1 day-service center. The Company Group also
expanded its business locations by opening its first fee-based assisted-living nursing home in Hyogo prefecture. As a result,
the Company Group operates 123 business establishments in 61 locations as of the end of the current consolidated fiscal
year. Furthermore, for the existing facilities, in order to reduce the number of vacant rooms and achieve stable occupancyrate, the Company Group made efforts to strengthen collaboration with nearby hospitals and home-based care support
centers. On the other hand, the Company Group opened 2 new fee-based assisted-living nursing homes for elderly and 1
short-stay center in February last year and 1 fee-based assisted-living nursing home for elderly in March last year, in
addition to the new facilities that were launched during the current consolidated fiscal year. However, the administrative andHR costs as well as facility maintenance costs for these facilities were required as fixed expenditure from the beginning, andthey were included as up-front expenditure in the accounting book. As a result, sales were 11,688,238 thousand yen (up13.3% YoY) and segment income was 914,373 thousand yen (down 7.9% YoY).
(2) Karaoke Business
For the Karaoke Business segment, the Company Group opened a total of 10 new stores (2 in Kanagawa, and 1 each inTokyo, Shizuoka, Hyogo, Hiroshima, Fukuoka, Oita, Nagasaki and Okinawa). The Company Group is expanding its
business by opening its first stores in Kanagawa and Shizuoka prefectures. As a result, the number of its karaoke stores as ofthe end of the current consolidated fiscal year became 99. The Company Group also began offering an app service forsmartphones in order to increase repeat customers by attracting mobile members; however, this attempt was not very
successful so far due to negative impact from increase in consumption tax and bad weather. As a result, sales were 8,825,583
thousand yen (up 1.3% YoY) and segment income was 1,326,028 thousand yen (down 24.6% YoY).
(3) Restaurant Business
For the Restaurant Business segment, the Company Group opened 1 new restaurant each in Fukuoka and Tokyo. In orderto minimize the negative impact from increase in consumption tax and bad weather, the Company Group also made efforts
for the existing restaurants to increase customers by offering special time-services and making sales visits to corporations to
obtain corporate customers and capture dinner-party demands. As a result, sales were 1,992,764 thousand yen (down 2.8%
YoY) and segment income was 117,460 thousand yen (down 43.0% YoY). The Company Group also opened “Kanteki-ya,
Sukhumvit branch”, the Company’s first restaurant in Thailand, in November. As a result, the number of its restaurants as of2the end of the current consolidated fiscal year became 28 in Japan and 1 overseas.
(4) Real Estate Business
For the Real Estate Business segment, the Company Group’s core businesses activities are sales/purchase of real estate
properties for sale and intermediary work for rental properties. As a result, sales were 778,367 thousand yen (up 152.0%
YoY) and segment income was 48,711 thousand yen (down 21.9% YoY).
(5) Other businesses
In the Other businesses segment, for the hotel business, the Company Group made efforts to increase guests using
advertisement media in order to secure demand associated with increasing domestic travels influenced by depreciation ofyen. As a result, sales were 343,505 thousand yen (down 6.3% YoY) and segment loss was 10,576 thousand yen (segment
income was 7,423 thousand yen during the same term last year).
(Forecast of the next term)
The world economy is expected to continue to grow gradually in the short term based on a gradual recovery of economy
in developed countries, despite the negative impact from the slowed growth of major emerging countries. Within Japan, theeconomy is expected to continue to recover in conformity with growth of the world economy, postponement of anotherincrease in consumption tax, continuation of large-scale monetary easing policy, low crude oil price and depreciation of yen.
Under these circumstances, the Company Group will make efforts to enhance customers’ satisfaction and improve its
business performance by clarifying business strategies for each segment, conducting effective and efficient sales andensuring to provide services based on its basic philosophy of “Loving-kindness, Respect for dignity, and Customer firstspirit”.
The Company Group also makes efforts to maximize synergy among business segments, achieve streamlining bycollectively purchasing supplies or exchanging employees, and providing catering services at the nursing care facilities.
Through these efforts, the Company Group will establish solid characteristics as a corporation and obtain support from thecustomers and residents of the nursing care facilities. As for the forecast of the consolidated business performancethroughout the year, sales are expected to be 25,670,023 thousand yen (up 8.6%, from the current consolidated fiscal year),
operating income is expected to be 1,673,572 thousand yen (up 16.8%, same) , ordinary income is expected to be 1,696,141
thousand yen (up 9.1%, same), and the net income that belongs to the parent company is expected to be 1,054,482 thousandyen (down 18.2%, same).

(2) Analysis Concerning Financial Situation(1) Status of assets, liabilities and net assets
Total assets at the end of the current consolidated fiscal year were 32,693,177 thousand yen, up 2,050,456 thousand yen
from the previous consolidated fiscal year.
Current assets were 16,201,527 thousand yen, up 1,315,276 thousand yen from the end of the previous consolidated
fiscal year. The major factors for the change were the increase of 482,810 thousand yen in cash and deposits and1,160,244 thousand yen in others.
Noncurrent assets were 16,491,650 thousand yen, up 735,180 thousand yen from the end of the previous consolidated
fiscal year. The major factors for the change were the increase of 173,332 thousand yen in buildings and structures,
253,100 thousand yen in land, and 140,042 thousand yen in lease and guarantee deposits.
Liabilities at the end of the current consolidated fiscal year were 17,307,162 thousand yen, up 973,457 thousand yen
from the previous consolidated fiscal year.
Current liabilities were 7,080,146 thousand yen, down 200,240 thousand yen from the end of the previous consolidated
fiscal year. The major factors for the change were the decrease of 555,266 thousand yen in income taxes payable while
increase of 26,000 thousand yen in short-term loans payable, increase of 94,102 thousand yen in current portion of long-3

term debt payable and increase of 150,013 thousand yen in other.
Noncurrent liabilities were 10,227,016 thousand yen, up 1,173,697 thousand yen from the end of the previous
consolidated fiscal year. The major factor for the change was the increase of 1,023,572 thousand yen in long-term loans
payable.
Net assets at the end of the current consolidated fiscal year were 15,386,015 thousand yen, up 1,076,998 thousand yen
from the previous consolidated fiscal year. The major factor for the change was the increase in retained earnings as aresult of including net income in the accounting book.
As for liquidity of assets, the current ratio during the current consolidated fiscal year is 228.8%. The Company Groupwill make efforts to increase the current ratio in order to secure enough liquidity in the future.
(2) Situation of cash flow
Cash and cash equivalent (hereinafter referred to as “funds”) during the end of the current consolidated fiscal year
stood at 11,007,118 thousand yen, up 1,348,021 thousand yen from the previous consolidated fiscal year.
The status of each cash flow is as follows:(Cash flow from operating activities)
Funds obtained by operating activities were 2,010,131 thousand yen (up 159.0% YoY). The major breakdown ofincome was 2,055,864 thousand yen of net income before income taxes, 1,312,285 thousand yen of depreciation andamortization, and 475,016 thousand yen of decrease in inventories. The major breakdown of expenditure was 814,626
thousand yen of gain on sales of noncurrent assets and 1,299,019 thousand yen of income taxes paid.
(Cash flow from investing activities)
Funds used in investing activities were 911,867 thousand yen (up 54.3% YoY). The major breakdown of income was
2,999,474 thousand yen of proceeds from sales of property, plant and equipment and 602,800 thousand yen of proceedsfrom withdrawal of time deposits. The major breakdown of expenditure was 3,547,565 thousand yen of purchase ofproperty, plant and equipment, 726,273 thousand yen of payments into time deposits, and 274,048 thousand yen of
payments for lease and guarantee deposits.
(Cash flow from financing activities)
Funds obtained by financing activities were 249,456 thousand yen (down 88.7% YoY). The major breakdown ofincome was 5,997,943 thousand yen of proceeds from long-term loans payable. The major breakdown of expenditure was
4,880,267 thousand yen of repayment of long-term loans payable and 629,022 thousand yen of repayments of installment
payables.
(Reference) Trend of Cash Flow Related Indicators

Equity ratio (%)
Equity ratio on market
price basis (%)
Debt repayment period(years)Interest coverage ratio(times)FY ended

FY ended

FY ended

FY ended

FY ended

March 2011

March 2012

March 2013

March 2014

March 2015

36.0

37.7

41.3

46.7

47.0

―

―

42.1

43.3

36.7

3.9

5.0

5.2

16.6

6.9

10.8

9.8

11.1

5.0

14.2

4

Equity ratio: equity capital/total assets
Equity ratio on market price basis: total market value of stock/total assets
Debt repayment period: interest-bearing debt/operating cash flow
Interest coverage ratio: operating cash flow/interest payments(Notes)1.

All are calculated using financial figures on consolidated base.

2.

Cash flow is using cash flow from operating activities.

3.

Market value of stock is calculated as end-of-the-term share value multiplied by the number of shares issued at
the end of the term (after excluding treasury shares). The equity ratio on market price basis for FY ended March2011 and 2012 are not listed because market price was not available.

4.

Interest-bearing debt includes all debts that are included in the consolidated balance sheet, for which interests are
paid.

(3) Basic Principle Concerning Profit Sharing and Dividends for the Current and Next Fiscal Year
The Company considers that profit returning to the shareholders is important management priority and will make efforts
to continuously pay stable dividends while securing necessary internal reserves for continuation of the businesses including
fee-based nursing homes for elderly business, karaoke business and restaurant business, etc.
The basic principle of the Company is to pay dividends of surplus twice a year (i.e. interim dividend and year-end
dividend).
These dividends of surplus are determined at the general shareholders’ meeting for the year-end dividend and board
meeting for the interim dividend.
The year-end dividend for the current fiscal year will be 5 yen per share in accordance with the above principle, and theannual dividend including interim dividend (Note) for the current fiscal year will be 11 yen.
The dividend for the next fiscal year will also be determined in accordance with the above principle, and the annual
dividend is planned to be 10 yen per share (5 yen for interim dividend and 5 yen for year-end dividend).

(Note) During the current fiscal year, the Company paid a total of 6 yen of interim dividend per common share (5 yen per
share plus 1 yen for commemorative dividend for being appointed to be in the First Section of Tokyo Stock Exchange
Market).

(4) Risk of Businesses, etc.
Concerning the matters related to the situation of business and accounting of the Company Group, followings are thematters that may give significant impact on the investors’ decision. Furthermore, even if they are not necessarily applicableto such risks, matters that may be important to the investors’ decision are also included from the perspective of proactive
information disclosure. It should be noted that the contents below might not include all risks concerning the investment on
the shares of the Company Group.
Based on the recognition of the possibilities of these risks, the Company Group is making efforts to avoid risks or takeprompt responses in case a risk arises; however, it is important for the investors to make a decision on the Company Group’s
shares based on a careful deliberation using the information in this section as well as other places. The matters concerning
the future in this section are based on the judgment of the Company as of the end of the current consolidated fiscal year.
1. Concerning Nursing Care Businesses(1) The nursing-care insurance system
The Company Group’s Nursing Care Business is focusing on the services based on the national nursing-care insurance
system, and the service contents, compensation, business operation and management and other business in general are5legally controlled by the Public Nursing Care Insurance Law and various relevant laws and regulations.
The government reviews and amends the nursing-care insurance system every 5 years and the nursing carecompensation every 3 years. The most recent amendment was conducted in April 2015, and the entire nursing carecompensation was reduced by 2.27%. It is expected that this will lead to reduction in the amount of money that theCompany Group’s nursing care facilities will receive as nursing care compensation.
If regulations are tightened as a result of changes in laws and regulations as well as the relevant systems in the future,
the Company Group may need to modify its service contents or take other actions. There is also a possibility that theCompany Group’s business expansion may be influenced. Revision of the nursing care compensation may also give
impact on the profit and profitability of the Company Group’s business. Furthermore, these factors may give negative
impact on the results of operation or financial status of the Company Group.
Especially, if there is a drastic change on the framework of the nursing care, etc. arising from the issues of insurance
premium contribution and nursing care insurance finances, etc. in the environment of decreasing population and aging
population, the business of the Company Group may receive significant impact.
(2) Securing qualified staff and manpower
As a business entity based on Public Nursing Care Insurance Law, various services provided through the Nursing Care
Business must meet certain human resource standards including placement of qualified staff. In order to meet thestandards, the Company Group is making efforts to secure manpower including qualified staff and develop humanresources through training programs, etc.
The Company Group is not aware of any critical difficulties to secure manpower at this point; however, in case it
becomes difficult to secure enough manpower for the future business development and expansion or in case existing
manpower leaves the Company Group, service quality may decline, nursing care compensation may decrease, or
providing nursing care services may become difficult. The Company Group may also need to review the benefits for its
employees to secure manpower or increase in recruitment cost, etc. These cases may affect the results of operations andfinancial situation of the Company Group.
(3) Concerning management of safety and health for nursing care of elderly
Most of the residents of the nursing care homes and users of the nursing care services are the elderly people who are inneed of nursing care or have certification for nursing care need, and there are risks of falling, food poisoning or groupinfection, etc. during provisions of various nursing services.
The Company Group is making efforts to place adequate number of facility staff, provide training programs on
treatment and service, ensure development and use of various manuals, and sanitation management and safety
management of equipment, etc. But in case of unforeseen circumstances concerning a damage claim, the Company Groupmay be held liable for negligence, which may lead to sue for damage compensation or guidance or disciplinary action by
the government. The trust from the public to the Company Group’s operation may also decline significantly in such a case.
These cases may affect the future development of business, results of operations and financial situation of the Company
Group.
(4) Development policy of nursing care facilities
As for the Nursing Care Business, the Company Group is planning to develop new facilities with a focus on fee-based
assisted-living nursing homes for elderly.
The fee-based assisted-living nursing homes for elderly became subject to the total volume control of nursing careinsurance facilities in April 2006, and development of new facilities in each area is determined by the nursing careinsurance plan of each municipality. Because of this, it is difficult to predict mid-term development in terms of the areasof development and number of residents as it is highly influenced by the decision of the municipal government. There is
no guarantee that the Company Group can develop the business establishments in desired areas. This may affect the6results of operations and financial situation of the Company Group.
(5) Competition
After the introduction of the nursing-care insurance system, the users of nursing care services are increasing, and it isexpected to continue to increase as aging society with fewer children advances. Furthermore, medical corporations, social
welfare corporations and various other companies are now entering into the nursing-care related industry, because theindustry is expected to expand, yet the barrier to enter into the industry is low. Intensified competition due to participationof new companies in the future may affect the results of operation and financial situation of the Company Group.
(6) Network with local relevant institutions
The Company Group conducts community-based operation of each facility under the Nursing Care Business. This typeof business operation requires close collaboration with local administrative agencies, medical institutions, care managers
and social workers, and the trust relationships with them is an essential part of the business development. If the trust in the
Company Group declines due to flaws in service provision or facility operation, accidents, troubles and other reasons, theCompany Group’s facility operation, service provision and obtaining users may become difficult, which may affect theresults of operations and financial situation of the Company Group.
(7) Impact of rumor
For the Nursing Care Business, reputation and trust by the users and their families towards the Company Group and its
facilities have a strong impact on the operation of the facilities. The Company Group is making efforts to improve service
quality, etc. that meet the needs of the users; however, if reputation of the Company Group or its facilities is undermined
for some reasons or if unfavorable rumors about the Company Group or its facilities spread, obtaining new users andmaintaining the operation rate of the facilities will be difficult, which may affect the results of operations and financial
situation of the Company Group.
(8) Compliance
The nursing care industry is subject to various laws and regulations as described above. In order to comply with theselaws and regulations, the companies in the industry are required to build strong compliance systems. The Company Groupis making efforts to strengthen its operation control framework and internal checking function in order to ensurecompliance with laws and regulations and to prevent human errors and fraud during business operation. If these systems
do not function adequately in the future business development, issues in relation to operational control may arise, which
may affect the results of operations and financial situation of the Company Group.
(9) Rental of nursing care facilities
Out of all nursing care facilities of the Company Group, 49 of them are operated in rental properties (including sale andlease back properties), and for each facility, rental agreement is concluded with the owner of the property. The agreement
period is usually 20 to 30 years (including renewal) and the rental fee is reviewed usually every 2 to 5 years based on
discussions.
The Company Group secures stable continuation of the facility management by establishing relatively long-term
agreement, but it is difficult to cancel during the agreement period. It is also difficult to close a facility or change rental
fee in a short span of time. Therefore, if the operation rate decreases significantly or if rental fee in the neighborhood
decreases at a facility, the profit margin may drop, which may affect the results of operations and financial situation of theCompany Group.
(10) Name, “Sawayaka”“Sawayaka” is used for the company name and facility name for the Nursing Care Business of the Company Group.

7

Because “Sawayaka” is a general term and it is difficult for the Company to register it as the Company’s trademark, theCompany Group registers the whole name of the facility (e.g. “Sawayaka Keifukan”) as a trademark.
Meanwhile, there are already many nursing care facilities that use “Sawayaka” in their names in Japan. If there is anaccident or misconduct at these facilities other than the Company Group’s facilities, the public may misidentify it as oneof the facilities of the Company Group, which may cause to unexpected reputational damage to the Company Group.
2．Concerning the Karaoke Business and Restaurant Business(1) External environment
The leisure market and restaurant market have been shrinking due to such factors as prolonged sluggish economy,
decline in consumer confidence and intensifying price competition caused by competitive situation among many business
entities. Thus, the business environment concerning the Karaoke Business and Restaurant Business of the Company
Group has been severe.
The Company Group is making efforts to maintain and enhance customer satisfaction by enriching pre-fixed menu andservice packages for the Karaoke Business and enriching low-priced items, remodeling existing restaurants and changing
business styles for the Restaurant Business; however if these actions are not accepted by the consumers or if competitiveenvironment becomes intensified due to increase in new companies in the industry, the results of operations and financial
situation of the Company Group may be affected.
(2) Stores opening policy, etc.
For the Karaoke Business and Restaurant Business, the Company Group is focusing on opening businessestablishments mainly in entertainment areas, aiming to develop more urban-type stores. When opening new stores andrestaurants, the Company is making efforts to proactively secure properties based on information from real-estateagencies and financial institutions; however, there is no guarantee that properties that match the Company’s requirements
in terms of rent, population of the market area, or competition with other companies can be obtained. Furthermore,
although careful deliberation is made before actually opening a store or restaurant, estimated profit may not be achieved,
even if the property matches the Company Group’s requirements. In these cases, the results of operations and financial
situation of the Company Group may be affected.
The business establishments for the Karaoke Business and Restaurant Business are basically using rental properties. If
the deposited guaranty money is not returned to the Company Group due to financial deterioration or other reasons of thelessee, the results of operations and financial situation of the Company Group may be affected.
(3) Purchase of foodIn recent years, issues to undermine consumers’ trust in “food safety”, such as health hazards by imported food, false
labeling of food, and food poisoning caused by eating raw beef, are frequently seen. The Company Group offers meals for
the Karaoke Business and Restaurant Business and provides feeding service for the Nursing Care Business. It is making
efforts to establish collaborative relationships with suppliers to ensure stable purchase of safe ingredients; however, if
similar cases/accidents occur and the anxiety among the public increases, the results of operations and the financial
situation of the Company Group may be affected.
Furthermore, if the food price increases associated with lean harvest of agricultural products including rice andvegetables due to external factors such as bad weather or natural disaster or caused by environmental changes of suppliers,
the results of operations and the financial situation of the Company Group may be affected.
(4) Sanitation control
Each store and restaurant of the Company Group’s Karaoke Business and Restaurant Business has a food sanitation
supervisor based on the Food Sanitation Act and has a business permit obtained from a health center under the jurisdiction.
The Company Group also provides manuals concerning sanitation control for each store and restaurant and ensures to8

provide training programs and guidance to the employees. Furthermore, it also tries to strengthen sanitation measuresthrough regular sanitation inspections by external specialists; however, if hygiene issues such as food poisoning arises at astore or restaurant of the Company Group, it may receive business suspension penalties for a certain period of time or thecustomers may stay away from any stores of the Company Group as a result of lowered corporate image. These cases may
affect the business development, results of operations and financial situation of the Company Group.
(5) Legal regulations
Some stores operated by the Company Group are controlled by the regulations established by the respective prefectural
government such as “Prefectural Ordinance of Sound Development of Youth” by Fukuoka prefecture. The Company
Group is making efforts to implement verification of customers’ age and prevention of inappropriate drinking andsmoking or prevention of use of facilities during the midnight period from the legal compliance perspective; however, if
the Company Group violates these regulations, the public trust in the Company Group will be lost, which may affect theresults of operations and financial situation of the Company Group.
Furthermore, if regulations are tightened in association with amendment of ordinance, etc., limitations on thedevelopment of the business may arise and some kind of responses by the Company Group may be required. This may
affect the business development, results of operations and financial situation of the Company Group.
3. Concerning the operation area of the Company GroupAll business segments of the Company Group operate mainly in the Kyushu region. Because of this, the Company
Group currently receives impact of the economic climate, consumption trend, transition of elderly population and othersof the Kyushu region.
Furthermore, in case there is a natural disaster such as earthquake and typhoon or in case of spread of infectious diseasesuch as new type of influenza in the Company Group’s operation area, it may affect the results of operations and financial
status of the Company Group.
4. Concerning business structure(1) Management system of a holding company
The Company Group is based on the holding company structure, and the Company, which is the holding company,
provides management guidance to its group companies as well as consolidates and controls administrative work of eachcompany.
The Company Group is intending to strengthen the management system in an effort to develop and expand thebusiness; however, if securing and developing manpower or strengthening various management functions is hindered, it
may affect the business development, results of operations and financial situation of the Company Group.
(2) Labor management
The Company Group requires a lot of manpower for its business operation and has many full-time employees as well as
temporary employees including part-time employees and temporary staff. Furthermore, because the Nursing Care
Business and Karaoke Business require 24-hour work system, the Company Group is making efforts to secure anddevelop necessary manpower for business operation and establish and manage working conditions and labor environmentthat are in compliance with labor-related laws and regulations. If any issues are caused for some reasons, they may affectthe business development, results of operations and financial situation of the Company Group.
(3) Customers’ information management
The Nursing Care Business and Karaoke Business of the Company Group deal with personal information of thecustomers. In order to manage the personal information, the head office and each business office have strengthened theirsystems to manage the documents. The data that include confidential information are consolidated and managed by a9

responsible department, and access from external sources to the data is shut down. As such, with very careful attention,
the Company Group is making efforts to adhere to relevant laws and regulations and to prevent the leakage of personal
information; however, if personal information of the customers is leaked for some reasons, the information management
capacity of the Company Group may be criticized, and its accountability may be accused. The customers’ confidence in
the Company Group may also be lost. These cases may affect the business development, results of operations andfinancial situation of the Company Group.
5．Concerning results of operations and financial situation(1) Impact of newly established nursing care facilities
A new nursing care facility requires a certain period of time until the residents and users are secured in the beginning.
Thus, after the opening, it usually requires up-front expenditure until the number of residents and users reaches a certain
level. This means that opening a new nursing care facility may suppress the profit of the Company Group in the short run.
Furthermore, if it takes long time or if it is difficult to have residents and users for a new facility, the results of operations
and financial situation of the Company Group may be affected.
(2) Use of off-balance scheme system for the nursing care facilities
The Company Group uses the sale and leaseback transaction method to minimize capital investment for the nursing
care facilities. A typical arrangement is to sell and leaseback the nursing facilities that the Company Group developed toSpecial Purpose Companies (SPCs) invested by domestic and international investment funds.
When using such off-balance scheme system, the Company Group seeks opinions of professionals such as accountants
and uses measures that are considered appropriate at that point; however, in case the off-balance scheme system becomes
unavailable due to change of accounting standards, etc., the total assets on the consolidated balance sheet will increase asa result of adding nursing care facilities and unearned lease fees, which will result in drastic deterioration of equity ratio.
This may give significant impact on the financial situation of the Company Group.
(3) Impact of the off-balance scheme system for the nursing care facilities on business performance, etc.
As described above, the Company Group uses the off-balance scheme system for the nursing care facilities. The
Company Group sold 5 facilities (at the sales price of 4,500 million yen) in the consolidated fiscal year ended March 2014,
and 3 facilities (at the sales price of 3,000 million yen) in the consolidated fiscal year ended March 2015.
Due to influence by the market price, etc., at the time of the sales of these facilities, 1,264 million yen of extraordinary
income called “Gain on sales of noncurrent assets” and 12 million yen of extraordinary loss called “Loss on sales of
noncurrent assets” were added in the consolidated fiscal year ended March 2014, and 814 million yen of extraordinary
income called “Gain on sales of noncurrent assets” were added in the consolidated fiscal year ended March 2015.
The leaseback transactions through this arrangement reduces depreciation burden as compared with the costs ofmanaging its own properties, even though the expenditures for facility lease are incurred and expenditures for nursing
care facilities will increase.
The above sales funds for the nursing care facilities are mainly used for the repayment of loans from financial
institutions.
Although the Company Group is planning to use the above-mentioned off-balance scheme system in the considerationof business establishment development, financial situation, etc., there is no guarantee that the Company Group canachieve the intended results, as they will depend on the external environment surrounding the nursing care industry andvarious conditions concerning sales and lease with business partners.
(4) Dependency on interest-bearing debt
The Company Group acquires a part of the funds to open new nursing care facilities for the Nursing Care Businesssegment and most of the funds to open new stores and restaurants for the Karaoke Business and Restaurant Business10

segments by borrowing money from financial institutions. The interest-bearing liabilities balance (Note) as of the end of
the consolidated fiscal year ended March 2015 were 13,951 million yen, which occupied 42.7% of the total assets. The
Company Group is planning to continue to use borrowed funds from financial institutions for the future establishment of
new facilities and stores. If there is a major change in the interest rates, it may affect the results of operations and financial
situation of the Company Group. Furthermore, if there is a change in financing attitude by the financial institutions
towards the Company Group due to changes in financial landscape, etc., the Company Group’s plans and businessdevelopment may be affected.
(Note) Interest-bearing debt includes all debts that are included in the consolidated balance sheet, for which interests are
paid.
(5) Accounting for impairment loss
Each business segment of the Company Group needs to recognize impairment loss in case deficit continues when
profitability of each business establishment and store declines due to business environment changes or economic factors.
This may affect the results of operations and financial situation of the Company Group.
6．Concerning lawsuit risks
In case of unexpected troubles and issues in relation to service provision or other transactions for each businesssegment of the Company Group, with or without defects of the Company Group, the damage compensation in relation tothese troubles and issues may be demanded to the Company Group or the Company Group may be sued.
The progress or results of these lawsuit contents or damage compensation amount may affect the results of operations,financial situation and social credibility of the Company Group.

112. Situation of the Corporate GroupThe Company Group is consisted of the Company (holdings company) and consolidated affiliates (Sawayaka Club,
Bonheure Co., Ltd. and Bonheure (Thailand) Co., Ltd. Together, the Company Group conducts mainly 5 types of businesses(Nursing Care Business, Karaoke Business, Restaurant Business, Real Estate Business, Others). As the holdings company, theCompany carries out development of strategies for each group company and provides managerial controls and guidance toeach group company. The major business contents of each company and its relationship with the business segment of theCompany Group are as follows.
(1) Nursing Care Business
For this Business, the Company Group provides various services based mainly on the Public Nursing Care Insurance Law
for the elderly in need of nursing care, etc. mainly in Kitakyushu city, Fukuoka prefecture.
The services include fee-based nursing homes (fee-based assisted-living nursing homes for elderly and resident-type feebased home for elderly), group homes, short stay, helper station, care planning center, day-service center, small-scale
multifunctional home-based nursing care facilities, and homes for elderly with various services. With a focus on residenttype facilities such as fee-based assisted-living nursing homes for elderly, the Company Group expands its business by
establishing business offices for various nursing care services.
As of the end of this consolidated fiscal year, the Company Group has 123 business offices in 61 locations. The contents
and characteristics of each nursing care service are described below.
(a) Fee-based assisted-living nursing homes for elderly (Number of facilities at the end of this consolidated fiscal year:
33)
These are fee-based nursing homes for elderly that are designated as “daily life nursing care for a person admitted to acommunity-based specified facility” under the Public Nursing Care Insurance Law. They target the people in need ofnursing care need or require assistance. Based on the specified facility service plan, the facility staff members assist theusers in bathing, excretion, and eating meals and provide other supports for their daily lives and functional trainings.
(b) Resident-type fee-based nursing homes for elderly (15 business establishments)
These are fee-based nursing forms for elderly that are not designated as daily life nursing care for a person admitted to
a community-based specified facility. They provide feeding services and assistance for the users’ daily lives. The facility
staff members, in principle, do not offer nursing care services. If the residents want nursing care assistance, they need touse external services such as visiting care, based on a separate contract. The Company Group provides nursing careservices required by the resident by establishing various nursing care/assistance services business offices next to thenursing homes.
(c) Group homes (8 business establishments)
These are resident-type facilities for the elderly with dementia who have received certificate for nursing care need.
Making 5 to 9 people as 1 unit, the facility staff members assist the users in bathing, excretion, and eating meals in ahomelike atmosphere.
(d) Short stay services (25 business establishments)
Short stay services are offered for the families that take care of the elderly who require nursing care or assistance athome on a daily basis but in need of temporary assistance for the elderly. The users can receive assistances for bathing,excretion and eating meals as well as care for their daily lives and functions recovery training, etc.
(e) Helper stations (11 business establishments)
Helper stations target the elderly who require nursing care or assistance and dispatches helpers to their homes. The

12helpers provide support services including physical assistance for bathing, excretion, eating meals and going out as wellas support for daily lives such as cleaning, washing, cooking and shopping, in accordance with the users’ level of physicaland mental capacity. The services through helper stations are mainly offered to the residents of the fee-based resident-typenursing homes operated by the Company Group.
(f) Care planning centers (6 business establishments)
Dedicated care managers (nursing care managers) are placed at each care planning center. Based on the requests fromthe elderly who need care and their families, the facility staff members develop care plans, aiming at improving the users’
daily lives and facilitating independence. They also provide services such as consultation on nursing care and applicationby proxy for the certificate for nursing care need.
(g) Day-service centers (20 business establishments)
The day-service centers are for the elderly who require nursing care or assistance. The users visit the centers on a daily
basis. The centers provide various nursing care services such as life style guidance, functions training, health check-ups,
and assistance for eating meals and bathing.
(h) Small-scale multifunctional home-based nursing care (4 business establishments)
This service is to provide assistance such as bathing, excretion and eating meals to the users to continue their
independent lives at their homes. The service styles include “day service (users come to the facility)”, “visiting service(the workers visit the users’ homes”, and “short stay (users stay overnight at the facility)”, depending on the needs of theusers and their families. The services are offered for 24 hours.
(i) Housing with services for the elderly (1 business establishment)This housing is based on the standards of the Acts on Stable Supply of Residences for the Elderly and registered at theprefectural, designated city and core city governments. The housing has infrastructure that fulfills certain required
standards such as the size of living room and barrier free. It also offers life style guidance and confirmation of theresidents’ safety by nursing care specialists to create an environment for the elderly to live safely.
(Nursing-care insurance system)
The “nursing-care insurance system” is a public system to provide nursing care services to the people who havecertificate for nursing care need or certificate for needed care using the insurance premium paid by the public and tax
collected by the national and municipal governments. It is a system to support the elderly people who require care due todeterioration of physical functions by the entire society. The elderly people who receive certificate for nursing care needor certificate for needed care can use various nursing care services by shouldering 10% of the actual nursing care costs.
The Nursing Care Business of the Company Group mainly provides nursing care services for the elderly people who
receive certificate for nursing care need or certificate for needed care. It receives nursing care compensation from thenational health insurance organizations in each prefecture that conducts review and payment of nursing care insurance forthe nursing care services provided.
(Concerning business development)(a) Areas and business development
As of the end of the current consolidated fiscal year, the Company Group’s main area of business is the Kyushu region(85 business establishments in 40 locations in Fukuoka, 4 business establishments in 2 locations in Oita). In other areas,
the Company Group has business establishments across Japan, including 4 business establishments in 2 locations in
Hokkaido, 3 business establishments in 2 locations in Akita, 6 business establishments in 3 locations in Niigata, 3business establishments in 2 locations in Chiba, 2 business establishments in 1 location in Tochigi, 1 business13

establishment in 1 location in Saitama, 2 business establishments in 1 location in Aichi, 4 business establishments in 2
locations in Kyoto, 2 business establishments in 2 locations in Osaka, 2 business establishments in 1 location in Hyogo, 2business establishments in 1 location in Mie, and 3 business establishments in 1 location in Ehime. For the Nursing Care
Business, although the fee-based assisted-living nursing homes for elderly are the focus of the business development,
establishment of such business establishments are only possible if municipality has public offering for new facilities basedon their plans. Therefore, currently, the Company Group is making efforts to develop new facilities with a focus on
publicly announced projects in each area. For the other business establishments, the decision is made based on the
demand trend, etc. of each area.
(b) Nursing-care facilities
Because establishment of new nursing-care facilities require a lot of funds for facility investment, the Company
Group’s priority is to rent facilities that are built by the owners and fit the specification of the Company Group. In reality,
however, it is difficult to establish new nursing care facilities using this method. Therefore, the Company group also
develops some of its own facilities using its own funds.
Once these facilities developed by the Company Group reach a certain operation rate, the Company Group will switch
to the leasing system by selling them to the SPCs that are invested by domestic and international investment funds.
(c) Fee schedule that does not receive temporary money for occupancy
Except for a few facilities, the nursing-care facilities of the Company Group do not collect lump-sum for occupancy at
the time when the occupants move in. This is to offer wider opportunities for elderly people to receive nursing-careservices, regardless of their income and assets statues. For business development, the Company Group is making efforts
to increase profitability through these measures, differentiate the Group’s facilities from the other companies, improve
facility operation rates and shorten the vacant period.
(2) Karaoke Business
The Karaoke Business focuses on the operation of karaoke rooms mainly in Fukuoka. The name of the karaoke stores is“Korokke Club”.
The stores for the Karaoke Business have basically around 30 rooms per establishment. They are differentiated from theother companies’ karaoke sores by opening basically for 24 hours, 7 days a week. By offering lunch and karaoke as a set
during the day, and meal and karaoke or all-you-can-drink and karaoke as a set at night, the Company Group is making
efforts to enhance eating/drinking rate to increase profit. Furthermore, the Company Group is making efforts to makekaraoke stores more children- and elderly-friendly to have a broader range of customers.
As of the end of the current consolidated fiscal year, the Company Group operates 99 karaoke stores.
(Store development)
The number of karaoke stores in each prefecture as of the end of the current consolidated fiscal year is listed in thefollowing table. They are located in various prefectures in the Kyushu region as well as Yamaguchi, Hiroshima, Mie, Shiga,
Hyogo, Shizuoka, Tokyo, Ibaraki, and Kanagawa prefectures.
Although the Company Group’s focus was to open suburb-type stores in the Kyushu region and Yamaguchi prefecture
until 2008, in recent years, it is more focusing on urban and busy districts where there are more customers.
Tokyo

Kanagawa

IbarakiShizuoka

Mie

Shiga

Hyogo

Hiroshima

Yamaguchi

Fukuoka

Saga

Nagasaki

Kumamoto

Oita

MiyazakiKagoshima

Okinawa

6

2

1

1

2

1

2

3

9

37

4

2

5

8

6

4

6

Number ofstores14

(3) Restaurant Business
For the Restaurant Business, the Company Group mainly operates izakaya (Japanese style pub) in various parts of the
Kyushu region. Several types of izakaya with different concepts are offered: “Kanteki-ya” (mainly targeting white-collar
workers), “Susu” (mainly targeting female customers), and “Saisei-sakaba” (low-cost izakaya) to capture a wide range ofcustomers. Furthermore, by changing and renewing the styles of existing restaurants, the Company Group is trying to keep
the customers from getting bored and come back to the restaurants.
The number of restaurants the Company Groups operates as of the end of the current consolidated fiscal year is 29 (27izakayas in Japan, 1 Udon noodle restaurant, and 1 izakaya in Thailand).
(4) Real Estate Business
Sawayaka Club Co., Ltd. deals with leasing of rental condominiums and sales and brokerage activities of real estate
properties, and Bonheure Co., Ltd. deals with leasing and management of rental condominiums and sales and brokerage
activities of real estate properties.
(5) Others
The Hotel Department of Sawayaka Club Co., Ltd. operates 2 hotels with hot springs next to resident-type, fee-based
nursing homes in Beppu, Oita. In addition to the general customers, the residents who live in the nursing-care facilities nextdoor or the residents of other nursing-care facilities of the Company Group can also use the hotel facilities for recreation
purposes.
Bonheure Co., Ltd. was operating 1 mobile phone shop affiliated with SoftBank Mobile Corporation; however it wasclosed as of May 10, 2015.

15

3. Management Policy(1) Basic Management Policy
Since its establishment in October 2006, through its affiliates (i.e. Sawayaka Club, Co., Ltd. and Bonheure Co., Ltd.), theCompany Group has been evolving its businesses on the operation of nursing-care facilities for elderly, operation of karaoke
stores and restaurants, and management of real estate properties based on its concept of “Collaborative Living of Children,
Youth and Elderly”. Currently, it operates its business with pillars of Nursing-Care Business, Karaoke Business andRestaurant Business. Its current management goals are to become a corporation group that is needed by the local
communities and to continuously provide services that the customers feel safe and reliable.
As for the environment that surrounds the Company Group’s 3 core business segments, the demand for its Nursing Care
Business is expected to increase with the background of aging society. Until June 2010, a standard was in place to back up
the regulation to control the total volume of users at nursing-care facilities such as specified nursing homes for elderly. It
was abolished in June 2010, and from the 5th Nursing Care Insurance Plan (from FY 2012 to 2014), it was decided by the
Cabinet that each prefectural government would be able to establish its plan based on its circumstances. These changes will
facilitate the creation of environment that is tailored to the local situation in each area. Therefore, it will be necessary for theCompany Group to have even closer network with municipal governments and obtain the public announcement information
on a timely basis for the establishment of new specified facilities that are the Company Group’s main focus. Furthermore,during the 2015 Nursing-Care Compensation Revision, the revised rate was decreased by 2.27%. This change will have asignificant impact not only on the companies in the nursing-care industry but also insured people who use nursing careinsurance. Thus, the users will look for nursing-care business entities with sound management more than ever.
For the Karaoke Business, the Company Group believes that the competition in the industry is going to intensify because
the karaoke room market is shrinking. In the future, it is expected that the use of karaoke room stores by the young people intheir 10s and 20s, which are the major customers, will gradually shrink due to declining birthrate. In the meanwhile, thebaby boomer generation is hoped to become a new customer group, for karaoke will become activities to spend their leisuretime after retirement. Given the fact that the number of people who enjoy karaoke since 2007 has not changed much, it isanticipated that the number of karaoke population will remain at the same level in the future.
For the Restaurant Business, the market for the izakaya industry, in which the Company Group mainly operates, is on ashrinking trend due to prolonged deflation and also because young people are moving away from alcohol. Because this trend
is anticipated to continue, the Company Group needs to make efforts to differentiate its restaurants from the other companies
by enriching the products other than alcohol, improving quality and varieties of meals to serve, and improving customer
service.
Under these business circumstances, the Company Group will distinguish itself from the other competitors bystrengthening its responses to the issues, promptly responding to the customers’ needs, and deepening the network andestablishing trust relationships with the local communities for each business field. Furthermore, it will strengthen its
business quality by ensuring education of the employees to equip them with professional expertise and enhancing the qualityof service.

(2) Target Management Indicator
The management indicator that the Company Group is focusing on is the operating income rate. For each businesssegment, the Company Group will make efforts to improve the performance by understanding the needs of the residents andcustomers and promptly and adequately reflecting their needs to the business. At the same time, the Company Group will try
to establish solid business foundation by focusing on cost control and conducting sound business operation. The Company
Group’s goal is to secure and maintain 10% of the consolidated operating income on sales as a result.

(3) Mid- to Long-term Management Strategies
The environment surrounding the Company Group differs by segment. For the Nursing-Care Business, establishment of
more trustful relationships with the users and residents is needed as aging population is rapidly growing in Japan. For the16Karaoke Business and Restaurant Business, the business environment will be more severe, and the Company Group needs to
respond to the intensifying competition against other companies and stores.
Under these circumstances, the Company Group will differentiate itself from the others by emphasizing the individual
characteristics for its major business segments.
Followings are the goals for each segment.
(a) Nursing-Care Business
The Company Group is planning to open 5 to 10 new nursing-care facilities per year. In order to steadily achieve thisgoal, the Company Group will collect information on the potential properties and establish good relationships withadministrative agencies.
(b) Karaoke Business
The Company Group is planning to open about 8 restaurants per year. Especially, it will focus on the opening of newrestaurants in the Tokyo metropolitan area. Nonetheless, it will make a flexible plan in terms of areas and principles of
opening new restaurants based on careful review of economic environment and consumers’ trend. By expanding thebusiness nationwide, the Company Group will be able to enhance its recognition, interest and attention from the public.
(c) Restaurant Business
The Company Group is planning to open 2 stores per year, including changing the types of existing stores. It will
improve stores’ structure so that they will not be affected by the changes of consumption environment by strengthening
characteristics of each store and creating stores that customers would come back.
(d) Real Estate Business
The Company Group is planning to mainly handle leasing of rental condominiums and undertake sales and brokerage
activities of real estate properties. It will carefully assess the situation of the real estate market, etc. and take appropriate
measures.

(4) Challenges of the Company GroupThe Company Group has been evolving its businesses activities around the operation of nursing-care facilities for elderly,
operation of karaoke stores and restaurants and management of real estate properties based on its concept of “Collaborative
Living of Children, Youth and Elderly”, with a goal to “create society where children, youth and elderly can live happily
together”.
In order to expand the businesses in wider areas and establish the concept and brand image of the Company Groupnationwide, it will continue examining issues in each business segment and take appropriate measures to address them.
The current significant issues that the Company Group is faced with for its expansion and progress of the business are as
follows.
(Entire company)(a) Principle of human resource development
The industries of Nursing-Care Business, Karaoke Business and Restaurant Business that the Company Groupbelongs to have chronic issues of labor shortage. As countermeasures, the Company Group will not only focus on
recruiting employees but also support individual employee’s development and enhance their sense of responsibility andloyalty to the Company Group through technical assistance such as OJT as well as various activities based on theemployees training system. This way, it is hoped to achieve stable retention rate.
(b) Strengthening management structure17In order for the Company Group to expand its business scale, it is important to strengthen the management structureand establish more functional corporate governance structure, in addition to human resource development. The Company
Group is making efforts to carry out accurate and efficient corporate governance by consolidating various management
departments and corporate planning division that deal with management and control functions at the Company, which is
the holding company, and establish and operate an integrated management line as a corporate group.
(Nursing-Care Business)(a) Expansion of business areas
Although the Company Group’s focus was in the Kyushu region, it will try to examine the measures to expand its feebased assisted-living nursing homes for elderly (Life assistance for the residents of specified facilities), which is theGroup’s core business, in other areas and, because it is subject to the total volume control of nursing care insurance
facilities, achieve more speedy opening of new establishments by applying for public offerings of the municipal
governments across the country and obtaining approval for new establishments and aggressively collecting informationon the M&A projects of existing facilities associated with industry restructuring. Although the target is nationwide, theCompany Group is conducting appropriate investigations concerning living conditions of the elderly, availability ofother companies, and their operation status in the candidate areas to examine the future prospect of the areas.
(b) Improvement in service level
Most of the residents of the nursing-care facilities of the Company Group are the people who have certificate fornursing care need. In order for the Company Group to provide comfortable lives to them, it is essential to take into
consideration the support for their independence and avoid excessive service. This requires knowledge, experience andaccurate information. In order to carry it out properly, the Company Group is making efforts to improve its training
programs and enhance capacities of the employees as well as enhance the quality of essential services and obtainsatisfaction and trust from as many users as possible.
(c) Improvement in facility levels
In order for the users to spend time feeling safe and secure at nursing-care facilities, it is necessary for the care
workers to have better service and also secure safety and credibility of the facilities. The Company Group is trying toenhance the safety and health control by carrying out disaster drill in preparation for disasters, cleaning the facilities on adaily basis and sanitation inspection in the kitchen, etc. Because disseminating the information about relevant laws andregulations such as the Nursing Insurance Act and Elderly Welfare Act is essential for the nursing-care business, theCompliance Promotion Group of the Company Group provides comprehensive instructions concerning laws andregulations to its relevant employees under the Guidance of the Compliance Committee.
(d) Securing qualified personnel
It is essential for the companies that provide nursing-care service to secure qualified personnel such as nurses, caremanagers and certified care workers. Also from the perspectives of compliance with laws and regulations, securing
stable employment of qualified personnel is an important issue. When recruiting qualified personnel, the Company
Group takes into full consideration of their knowledge and experiences. Once they become the employees, their benefits
are adequately reviewed in accordance with their capacities and performances to enhance stable employment andimprove the retention rate.
(Karaoke Business)(a) Strengthening capacities of the stores in remote areas
The Karaoke Business of the Company Group is now spreading not only in the Kyushu region (mainly Fukuoka) andYamaguchi prefecture but also in Mie, Shiga, Hiroshima, Tokyo, Hyogo, Ibaraki, Shizuoka and Kanagawa prefectures.

18

These stores are becoming a foothold for further expansion of the business in wider areas. Nonetheless, it takes time for
new stores in remote areas to establish the brand image and make profit. In order for the Company Group to expand its
business throughout Japan, there is a need to make its store name, “Korokke Club”, well known across the country. By
conducting more vigorous advertisement activities and frequently collecting information on the customers and competitors
in the target areas, the Company Group will establish the systems to objectively assess service capacity of the stores andproduct values and to promptly modify them.
(b) Intensifying competition and differentiation from the other companies
Most of the companies in the karaoke industry, just like the Company Group, are now focusing on opening new stores inhigh-traffic areas such as in front of stations and entertainment areas, resulting in intensifying competition across Japan.
The Company Group is trying to differentiate itself from the other companies by improving pre-fixed menus and increasing
types of services such as all-you-can-drink-and-sing in order to respond to the party demands that are often expected inentertainment areas.
(Restaurant Business)(a) Intensifying competition and differentiation from the other companies
In the restaurant industry, the trend towards lower price is progressing associated with declining consumer spirits, andthis trend is expected to continue. Furthermore, intense competition in the industry due to declining demand is also
expected to give impact on price, quality and services. The Company Group will continue taking countermeasures such as
reviewing competitive products value, service capacity and price setting as needed and changing the existing stores toprovide services at a low price.
(b) Strengthening product values and customer service
The Company Group carries out chefs’ meeting once a month in order to provide the products that meet the needs of thecustomers in a timely manner. It also works on refining existing products and developing new products as well as
improving their quality and safety. For the customer service, the Company Group is also making efforts to secure excellent
human resources through proactive recruitment activities and improve the employees’ service skills through education andtraining programs.
(c) Strengthening sanitation control
Preventing sanitation-related accidents and keeping trust from the customers are essential for continuous operation of therestaurant business. The Company Group places designated ‘environment patrollers’ who check cleanliness of therestaurants. It also commissions external contractors to regularly conduct sanitation inspection at all stores including the
Karaoke Business to enhance the level of sanitation control through objective verification.

4. Basic Principles of Selecting Accounting Standards
Currently, the activities of the Company Group are mainly conducted in Japan. Therefore the Japanese accounting standards
will be used for the time being. In the future, however, as the Company Group expands its business overseas, the needs ofusing the accounting based on the IFRS will increase as important information for decision making by investors, financial
institutions and other stakeholders in Japan and overseas. The Company is planning to deliberate on the application of the
IFRS including the appropriate timing of introduction.

19

5. Consolidated Financial Statements(1) Consolidated Balance Sheets(Thousands of yen)
FY ended March 31, 2014
(As of March 31,2014)

FY ended March 31, 2015
(As of March 31,2015)

AssetsCurrent assets
Cash and deposits

11,442,361

11,925,172

Notes and accounts receivable-trade
Merchandise

1,261,778
62,255

1,418,113
72,350Real estate for sale
Supplies

1,205,192
39

720,149
39

Deferred tax assets
Other

223,156
707,811

218,479
1,868,055(16,344)(20,833)

14,886,251

16,201,527

11,656,804

12,695,005

Accumulated depreciation(4,700,500)(5,565,369)

Buildings and structures, net

6,956,303

7,129,636

3,476,026
437,220

3,729,127
444,291

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

Land
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment

3,210,962

3,560,657(2,152,283)(2,557,672)

1,058,679

1,002,985

11,928,229

12,306,040

Intangible assets

41,394

61,182

Investments and other assets
Investment securities

90,214

117,705

Long-term loans receivable
Deferred tax assets

292,745
97,863272,064
178,356

Lease and guarantee deposits
Other

2,150,733
1,241,714

2,290,775
1,353,492

Allowance for doubtful accounts(86,425)(87,966)

Total investments and other assets
Total noncurrent assets
Total assets

20

3,786,846

4,124,427

15,756,470

16,491,650

30,642,721

32,693,177

(Thousands of yen)
FY ended March 31, 2014
(As of March 31,2014)

FY ended March 31, 2015
(As of March 31,2015)

Liabilities
Current liabilities
Notes and accounts payable-trade

325,012331,926

1,463,000
2,495,194

1,489,000
2,589,297

Current portion of bonds
Lease obligations

35,0002,323

35,000
1,120

Income taxes payable
Provision for bonuses

695,732
156,630

140,465
197,316

Provision for point card certificates
Provision for shareholder benefit program

234,004
11,105271,571
12,050Other

1,862,384

2,012,397

Total current liabilities

7,280,386

7,080,146

Bonds payable
Long-term loans payable

70,0007,257,866

35,0008,281,439

Lease obligations
Deferred tax liabilities

2,781
86,108

1,660
277,803

182,753
1,453,808

199,909
1,431,202

Short-term loans payable
Current portion of long-term loans payableNoncurrent liabilities

Asset retirement obligation
Other
Total noncurrent liabilities

9,053,318

10,227,016

16,333,704

17,307,162

Shareholders' equity
Capital stock

2,222,935

2,222,935

Capital surplus
Retained earnings

2,676,892
9,394,193

2,676,892
10,446,116

Total liabilities
Net assets

Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeMinority interests

(237)

(237)

14,293,784

15,345,707

15,232

31,897-705

15,23232,602-

7,705

Total net assets

14,309,016

15,386,015

Liabilities and net assets

30,642,721

32,693,177

21

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Thousands of yen)
FY ended March 31, 2014
(April 1,2013- March 31, 2014)

FY ended March 31, 2015
(April 1,2014- March 31, 2015)

Net sales

21,758,577

23,628,459

Cost of sales

18,414,277

20,713,973

Gross profit

3,344,299

2,914,485

Directors' compensations
Salaries and allowances

162,294
264,439

166,977
284,114

Taxes and dues
Provision of allowance for doubtful accounts

198,38615

372,264
4,589

6,900

6,936

11,105

12,047581,156

634,725

1,224,298

1,481,656

Selling, general and administrative expenses

Provision for bonuses
Provision for allowance for shareholders'
benefits
Other
Total selling, general and administrative
expenses
Operating income

2,120,001

1,432,829

Non-operating income
Interest income

11,0989,530

Dividends income
Commission fee

1,865
73,4301,984
76,967

Insurance income
Other

75,569332,661

132,945
62,837

Total non-operating income

494,625

284,264

146,713

142,646

Non-operating expenses
Interest expenses
Other

56,63820,331

Total non-operating expenses

203,351

162,978

Ordinary income

2,411,275

1,554,115

Extraordinary income
Gain on sales of noncurrent assets

1,303,603

814,626

Gain on sales of investment securities-

289

1,303,603

814,916

Loss on sales of noncurrent assets
Loss on retirement of noncurrent assets

12,04860,051

20,204

Impairment loss
Loss on sales of investment securities

66,012-

292,632
185

Total extraordinary income
Extraordinary loss

Loss on valuation of investment securities-

144

138,113313,166

Income before income taxes and minority interests

3,576,765

2,055,864

Income taxes-current
Income taxes-deferred

1,278,121
81,138660,072
109,027

Total income taxes

1,359,259

769,100

Income before minority interests

2,217,506

1,286,764-(2,961)2,217,506

1,289,725

Total extraordinary loss

Minority interests in income (loss)
Net income

22Consolidated Statements of comprehensive income(Thousands of yen)
FY ended March 31, 2014
(April 1,2013- March 31, 2014)

FY ended March 31, 2015
(April 1,2014- March 31, 2015)

2,217,506

1,286,764

10,258

16,664

1,529
-

1,439

11,788

18,104Comprehensive income

2,229,294

1,304,868

Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable to minority
interests

2,229,294

1,307,096-(2,227)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income23(3) Consolidated Statements of Changes in Net Assets
FY ended March 31, 2014 (From April 1, 2013 to March 31, 2014)(Thousands of yen)
Shareholders' equity
Capital surplus

Retained earnings

Treasury shares

Total shareholders'equity1,360,519

1,814,476

7,361,992(42)

10,536,945

Issuance of new shares

861,876

861,876

1,723,752

Issuance of new sharesexercise of stockacquisition rights

540

540

1,080

Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodDividends from surplus(185,305)(185,305)

Net income

2,217,506

2,217,506

Purchase of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period

(194)

(194)

862,416

862,416

2,032,200(194)

3,756,838

2,222,935

2,676,892

9,394,193(237)

14,293,784

Accumulated other comprehensive income
Valuation difference
Deferred gains or
on available-for-salelosses on hedges
securities
Balance at beginning ofcurrent period
Changes of items during
period4,974

Total accumulated
othercomprehensive
income(1,529)3,444

Total net assets

10,540,389

Issuance of new shares

1,723,752

Issuance of new sharesexercise of stockacquisition rights

1,080

Dividends from surplus(185,305)

Net income

2,217,506

Purchase of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period(194)
10,258

1,529

11,788

11,788

10,258

1,529

11,7883,768,626

15,232―

15,232

14,309,016

24

FY ended March 31, 2015 (From April 1, 2014 to March 31, 2015)(Thousands of yen)
Shareholders' equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
period2,222,935

Capital surplus

Retained earnings

Treasury shares

Total shareholders'equity2,676,892

9,394,193(237)

14,293,784

Issuance of new shares
Issuance of new sharesexercise of stockacquisition rights
Dividends from surplus(237,802)(237,802)

Net income

1,289,725

1,289,725

Net changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period――

1,051,923―

1,051,923

2,222,935

2,676,892

10,446,116(237)

15,345,707

Minority interests

Total net assets―

14,309,016

Accumulated other comprehensive income

Balance at beginning ofcurrent period
Changes of items during
periodValuation difference Foreign currency
on available-for-saletranslation
securities
adjustment

Total accumulated
othercomprehensive
income―15,232

15,232Issuance of new shares
Issuance of new sharesexercise of stockacquisition rights
Dividends from surplus(237,802)

Net income

1,289,725

Net changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period

16,664705

17,3707,705

25,075

16,664705

17,3707,705

1,076,998

31,897705

32,602

7,705

15,386,015

25

(4) Consolidated Statements of Cash Flows(Thousands of yen)
FY ended March 31, 2014
(April 1,2013- March 31, 2014)

FY ended March 31, 2015
(April 1,2014- March 31, 2015)

3,576,765

2,055,864

1,159,674

1,312,285

66,012

292,632(18,698)

6,030

14,456

40,686(1,893)37,567

11,105945(12,964)
146,713(11,514)142,646

60,051(1,291,554)

20,204(814,626)

-

144
(104)

Net cash provided by (used in) operating activities
Income before income taxes and minority
interests
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for point cardcertificates
Increase(decrease) in allowance forshareholders' benefits
Interest and dividends income
Interest expenses
Loss on retirement of noncurrent assets
Loss (gain) on sales of noncurrent assets
Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Increase (decrease) in accrued consumption
taxes
Increase (decrease) in notes and accounts
payable-trade
Other(115,974)(156,335)(1,190,238)

475,016

57,599(20,152)

5,545

39,520(196,671)

23,898Subtotal

2,269,928

3,444,710

Interest and dividends income received
Interest expenses paid

12,964(156,303)

6,290(141,849)

Income taxes paid
Net cash provided by (used in) operating
activities
Net cash provided by (used in) investment activities(1,350,480)(1,299,019)

776,1082,010,131

Purchase of property, plant and equipment
Payments for retirement of property, plant andequipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities(4,587,891)(3,547,565)(10,000)-

4,608,726

2,999,474(571)-(28,189)(5,000)

Proceeds from sales of investment securities
Payments into time deposits(750,456)

985(726,273)

Proceeds from withdrawal of time deposits
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Payments of loans receivable

530,787(311,181)

602,800(274,048)

55,982

134,172(15,728)(17,413)

Collection of loans receivable
Other
Net cash provided by (used in) investment
activities

44,747(155,338)

41,076(91,886)(590,924)(911,867)26

(Thousands of yen)
FY ended March 31, 2014
(April 1,2013- March 31, 2014)

FY ended March 31, 2015
(April 1,2014- March 31, 2015)

159,350

26,0006,403,072

5,997,943

Repayment of long-term loans payable
Redemption of bonds(5,279,743)(35,000)(4,880,267)(35,000)

Repayments of lease obligations
Repayments of installment payables(2,323)(543,629)(2,323)(629,022)

Proceeds from issuance of common stock
Proceeds from issuance of stock resulting fromexercise of subscription rights to shares
Proceeds from stock issuance to minority
shareholders
Purchase of treasury stock
Cash dividends paid

1,723,752

-

1,080

-

-

9,932

(194)
(185,082)(237,218)

Other
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(25,924)(587)

2,215,356

249,456-300

2,400,541

1,348,021

Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans
payableProceeds from long-term loans payable

Cash and cash equivalents at beginning of year

7,258,555

9,659,097

Cash and cash equivalents at end of year

9,659,097

11,007,118

27

(5) Notes Regarding Consolidated Balance Sheet(Notes regarding premise of a going concern)
Nothing is applicable.
(Change of display method)(In relation to the consolidated balance sheet)“Subsidy income” in “Non-operating income” which was stated independently in the previous consolidated fiscal year
balance sheet is included in the “Other” from the current consolidated fiscal year, because it became less than 10/100 of thetotal amount of non-operating income. In order to reflect the change of this display method, the balance sheet of theprevious consolidated fiscal year was reclassified.
As a result, 210,588 thousand yen that was displayed as “Subsidy income” in “Non-operating income” in balance sheet
for the previous consolidated fiscal year is included in the “Other”.

28

(Segment information, etc.)【Segment information】
1. Overview of the reporting segments(1) How to determine the reporting segments
The reporting segments of the Company Group are the constituent units of business for which segregated financial
information is available and that are the subject of regular examination by the Board of Directors to decide management
resources and assess business performance.
The Company has business departments for each service, and each business department develops comprehensive
strategies for the services, etc. that they handle. Therefore, the Company is consisted of segments per service based oneach business department. There are 4 reporting segments including “Nursing-Care Business”, “Karaoke Business”,“Restaurant Business” and “Real Estate Business”.
(2) Types of products and services that belong to each reporting segment
The “Nursing-Care Business” operates fee-based assisted-living nursing homes for elderly, day-service centers, grouphomes and care planning centers. It also conducts sales and lease of social-welfare tools. The “Karaoke Business”
operates karaoke stores, and the “Restaurant Business” operates restaurants such as izakaya and udon noodle restaurant.
The “Real-Estate Business” handles leasing of rental condominiums and undertakes sales and brokerage activities of realestate properties.
2. Method to calculate the amount of sales, profits, loss, assets and other items per reporting segment per reporting segment
The accounting of reporting business segments is handled in the almost same way as the description in “the basic significant
items to make the consolidated balance sheet”.
The profit in the reporting segment is based on the figures of operating income.
Internal profit and transferred amount among the segments are based on the prevailing market values.
3. Information concerning the amount of sales, profits, loss, assets and other items per reporting segment
Previous consolidated fiscal year (From April 1, 2013 to March 31, 2014)(Thousands of yen)
Reporting segments
Others (Note)

Total

Nursing-care

Karaoke

Restaurant

Real EstateBusiness

Business

Business

Business

10,318,816

8,714,276

2,049,957

308,868

21,391,919

366,658

21,758,577―

737

52,432880

54,04941

54,090

10,318,816

8,715,013

2,102,389

309,748

21,445,968

366,699

21,812,667

992,904

1,759,344

206,066

62,4603,020,776

7,423

3,028,199

8,805,157

5,612,651

1,008,461

2,236,389

17,662,660

262,749

17,925,409

234,345790,218

80,837

14,553

1,119,954

8,694

1,128,648

4,064,031

1,037,534

73,082

1,612

5,176,261

13,3385,189,599

Total

Sales
Sales to external customers
Internal sales or transferred amountamong the segments
Total
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Increased amount for property, plant andequipment and intangible assets(Note) “Others” is the business segment that is not included in the reporting segment. “Others” include hotel business andcommunication business.

29

Current consolidated fiscal year (From April 1, 2014 to March 31, 2015)(Thousands of yen)
Reporting segments

Others (Note)

Total

Nursing-care

Karaoke

Restaurant

Real EstateBusiness

Business

Business

Business

11,688,238

8,825,583

1,992,764

778,367

23,284,954

343,505

23,628,459

―

1,710

51,6382,951

56,300102

56,402

11,688,238

8,827,294

2,044,402

781,319

23,341,254

343,607

23,684,862

914,373

1,326,028

117,460

48,771

2,406,634(10,576)

2,396,057

9,319,811

5,731,050

1,201,456

1,919,195

18,171,514

254,335

18,425,849

353,613829,00280,29013,311

1,276,218

8,713

1,284,931

2,784,675

1,093,800

234,018

27,111

4,139,605

2,543

4,142,149

Total

Sales
Sales to external customers
Internal sales or transferred amountamong the segments
Total
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Increased amount for property, plant andequipment and intangible assets(Note) “Others” is the business segment that is not included in the reporting segment. “Others” include hotel business andcommunication business.

30

4. Balance between the total amount of reporting segments and the amount on the consolidated balance sheet and the breakdownof the balance (Items concerning balance adjustment)(Thousands of yen)
Sales

Previous consolidated fiscal year Current consolidated fiscal year

Reporting segments, total amount

21,445,968

23,341,254

Sales for “Others” segment

366,699

343,607

Offsetting between segments(54,090)(56,402)21,758,577

23,628,459

Sales on the consolidated balance sheet(Thousands of yen)
ProfitPrevious consolidated fiscal year Current consolidated fiscal year

Reporting segments, total amount

3,020,776

2,406,634

7,423(10,576)

461,617456,744

Expenses for all companies (Note)(1,369,815)(1,419,972)

Operating income on the consolidated balance sheet

2,120,001

1,432,829

Profit (loss) for the “Others” segment
Offsetting between segments(Note) Expenses for all companies are mainly general administrative expenses that do not belong to the reporting segments.
(Thousands of yen)
AssetsPrevious consolidated fiscal year Current consolidated fiscal year

Reporting segments, total amount

17,662,660

18,171,514

Assets for the “Others” segments

262,749

254,335

Offsetting of debt

(4,051,950)(4,089,683)

Assets of all companies (Note)

16,769,261

18,357,011

Total assets on the consolidated balance sheet

30,642,721

32,693,177(Note) Assets of all companies are mainly surplus funds (cash and deposits) that do not belong to the reporting segments, longterm investment funds (investment securities), and assets for operation department.
(Thousands of yen)
Reporting segments, total
Other items

Previous

Current

OthersPrevious

Adjustment amount (Note)
Current

Previous

Current

Amount on the consolidatedbalance sheet
Previous

Current

consolidated consolidated consolidated consolidated consolidated consolidated consolidated consolidated

Depreciation and amortization

fiscal year

fiscal year

fiscal year

fiscal year

fiscal year

fiscal year

fiscal year

fiscal year

1,119,954

1,276,218

8,694

8,713

31,02627,353

1,159,674

1,312,285

5,176,261

4,139,605

13,3382,543

19,711

59,8215,209,310

4,201,970

Increased amount for
property, plant andequipment and intangible
assets(Note) 1. The adjustment amount of depreciation and amortization (i.e. previous consolidated fiscal year: 31,026 thousand yen
and current consolidated fiscal year: 27,353 thousand yen) is for the operation department of the head office.
2. The adjustment amount of property, plant and equipment and intangible assets (i.e. previous consolidated fiscal year:
19,711 thousand yen and current consolidated fiscal year: 58,577 thousand yen) is the capital investment amount in
the all companies’ assets that do not belong to each segment.

31

【Related information】
Previous consolidated fiscal year (From April 1, 2013 to March 31, 2014)
1. Information for each product and service
It is not described here because the same information is disclosed in the Segment Information section.
2. Information per region(1) Sales
Because there are no sales to international customers, nothing is applicable here.
(2) Property, plant and equipment
Because there are no property, plant and equipment that exist outside of Japan, nothing is applicable here.
3．Information per major customer(Thousands of yen)
Name of the customer

Sales

Fukuoka National Health Insurance Organization

4,011,785

Relevant segment
Nursing Care BusinessCurrent consolidated fiscal year (From April 1, 2014 to March 31, 2015)
1. Information for each product and service
It is not described here, because the same information is disclosed in the Segment Information section.
2. Information per region(1) Sales
Because sales to the external customers within Japan exceed 90% of the sales on the consolidated balance sheet, thedescription is omitted here.
(2) Property, plant and equipment
Because the amount of property, plant and equipment that exist within Japan exceeds 90% of the property, plant andequipment on the consolidated balance sheet, the description is omitted here.
3．Information per major customer(Thousands of yen)
Name of the customer

Sales

Fukuoka National Health Insurance Organization

4,251,015

32

Relevant segment
Nursing Care Business【Information concerning impairment loss of noncurrent assets per reporting segment】
Previous consolidated fiscal year (From April 1, 2013 to March 31, 2014)(Thousands of yen)
Reporting segment
All companies/

Impairment loss

Nursing-Care

Karaoke

Restaurant

Real EstateBusiness

Business

Business

Business

7,111

26,908―28,252OthersTotal
offset―3,739

66,012Current consolidated fiscal year (From April 1, 2014 to March 31, 2015)(Thousands of yen)
Reporting segment
All companies/

Impairment loss

Nursing-Care

Karaoke

Restaurant

Real EstateBusiness

Business

Business

Business

24,033

232,380

36,218―OthersTotal
offset――【Information concerning amortization amount and unamortized balance of goodwill per reporting segment】
Nothing is applicable.
【Information concerning gain from negative goodwill per reporting segment】
Nothing is applicable.

33

292,632(Per share information)
Previous consolidated fiscal year Current consolidated fiscal year
(From April 1, 2013 to(From April 1, 2014 toMarch 31, 2014)
March 31, 2015)
Net assets per share

661 yen 89 sen

711 yen 35 sen

Net income per share

114 yen 10 sen

59 yen 66 sen

Diluted net income per share

113 yen 83 sen

59 yen 56 sen(Note) 1

The Company conducted the 4-for-1 common share split as of January 1, 2014. Net assets per share, net income pershare and diluted net income per share were calculated based on the assumption that said share split was conductedat the beginning of the previous consolidated fiscal year.

2

The basis of calculation for net income per share and diluted net income per share is as follows.
Previous consolidated fiscal year Current consolidated fiscal year
(From April 1, 2013 to(From April 1, 2014 toMarch 31, 2014)
March 31, 2015)

Item
Net income per share
Net income (thousand yen)

2,217,506

1,289,725――

Net income for common share (thousand yen)

2,217,506

1,289,725

Average number of common shares outstanding(shares)

19,435,374

21,618,424

Net income adjustment amount (thousand yen)――

Increased number of common shares (shares)

45,521

36,032(Out of which, subscription rights to shares (shares))(45,521)(36,032)

Amount that is not attributable to common shareholders (thousand yen)

Diluted net income per share

Overview of the dilutive shares that are not included in thecalculation of the diluted net income per share because they
did not have dilutive effect.
3――

The basis of calculation for net assets per share is as follows.
Previous consolidated fiscal year
(As of March 31, 2014)

Current consolidated fiscal year
(As of March 31, 2015)

Total amount of net assets (thousand yen)

14,309,016

15,386,015

Deducted amount from the total amount of
net assets (thousand yen)(Out of which, subscription rights toshares)(Out of which, minority shareholders’interests)
End of term net assets for common shares(thousand yen)
Number of end of term common sharesthat are used to calculate net assets per
share (shares)(―)(7,705)

(―)

(―)

(―)

(7,705)

14,309,016

15,378,310

21,618,424

21,618,42434

(Significant subsequent event)Nothing is applicable.

35