Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019

Kyoritsu Maintenance Co., Ltd.
(Securities Code: 9616)

Summary of Financial Statements[JGAAP](Consolidated)
Financial Results for the Fiscal Year Ended
March 31,20191

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019

Summary of Financial Statements [JGAAP](Consolidated)
Financial Results for the Fiscal Year Ended March 31,2019
May 15, 2019

Company Name: Kyoritsu Maintenance Co., Ltd.
Stock Exchange listing: Tokyo
Stock Code: 9616, URL: https://www.kyoritsugroup.co.jp/
Representative: Takumi Ueda, President
Contact: Koji Nakamura, Executive Managing Director, Tel: +81-3-5295-7778
Scheduled date of annual general meeting of shareholders: June 26, 2019
Scheduled date of dividend payment commencement: June 27, 2019
Scheduled date of securities report submission: June 26, 2019
Supplementary materials for the financial statements: Yes
Presentation to explain for the financial statements: Yes (for institutional investors and analysts)(Million JPY, rounded down to the nearest million)
1. Consolidated financial results for Fiscal 2018 (April 1, 2018 to March 31, 2019)(1) Consolidated Operating Results(% figures represent change from previous fiscal year)
Profit attributable to owners
Revenue
Operating profit
Ordinary profitof the Company
Million yen%

FY3/19
162,811
7.1
14,56711.3
14,321
10.8
9,567
FY3/18152,02111.9
13,087
10.8
12,92812.3
8,778(Note) Comprehensive income: ¥9,374 million (+11.1% YoY) in FY3/19; ¥8,436 million (+15.7% YoY) in FY3/18

%

9.0
23.0

Million yen

EPS%Million yen

Fully Diluted EPS
Yen%Million yen

Ratio of Ordinary profit
to total assets

ROE
Yen

%

Operating Margin%%

226.1712.6
7.3
FY3/19245.41
FY3/18225.86207.50
12.9
7.1(Reference) Share of profit(loss) on investments accounted for using the equity method: ¥0 in FY3/19; ¥0 in FY3/18

8.9
8.6

(2) Consolidated Financial Position
Total Assets

Net Assets
Million yen

Shareholders’ Equity Ratio

Shareholders’ Equity Per Share

Million yen%

Yen

202,531
79,570FY3/19FY3/18
190,929
71,839(Reference) Capital: ¥79,570 million in FY3/19; ¥71,839 million in FY3/18

39.3

2,040.75

37.6

1,842.79(3) Consolidated Cash FlowsNet Cash from (used in) operating
activities

FY3/19FY3/18Net Cash from (used in)investing activities

Cash and cash equivalents
at the end of FY

Net Cash from (used in)financing activities

Million yen

Million yen

Million yen

Million yen

17,96313,029(21,474)(16,676)

2,606
5,804

16,07016,972

2. Dividends
Annual Dividend Per Share
Q1-EndQ2-EndFY3/20 (Projection)-

Q4-End

Total

Yen

Yen

Million yen

%

％

18.00
20.00

-

22.00
25.00

40.00
45.00

1,556
1,754

17.7
18.3

2.3
2.3

22.00

-

25.00

47.00

Yen

FY3/18
FY3/19Q3-EndRatio ofdividends to
net assets(Consolidated)

Dividend Payout
Ratio(Consolidated)

Total
Dividends

Yen

Yen

18.0

3. Projected Consolidated Results for Fiscal 2019 (April 1, 2019 to March 31, 2020)
Revenue

Full Year

Operating profit

Profit attributable toowners of the Company

Ordinary profit

EPS

Million yen%

Million yen%

Million yen%

Million yen%

Yen

183,000

12.4

15,7007.8

15,400

7.5

10,2006.6

261.60(Note) The Company decided to manage on an annual basis beginning with the fiscal year ending March 2020, and thus consolidated
financial forecasts for the first half of the fiscal year are not provided.

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Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
Notes
(1) Changes in significant subsidiaries during the period, including changes in specified subsidiaries resulting in the change inconsolidation scope: None
(2) Changes in accounting policies, changes in accounting estimates and restatements:
1. Changes in accounting policies required by revision in accounting standards: None
2. Changes in accounting policies other than 1:
None
3. Changes in accounting estimates:
None
4. Restatements:
None
(3)

Number of shares outstanding (common stock)
1. Number of shares outstanding (including treasury stock) at term end
2. Number of shares of treasury stock as of term end
3. Average number of outstanding shares

FY3/19FY3/19FY3/1939,218,330
227,634
38,986,480

FY3/18
FY3/18
FY3/1839,209,238
225,193
38,866,440(Reference) Summary of Unconsolidated financial results
1. Unconsolidated financial results for Fiscal 2018 (April 1, 2018 to March 31, 2019)(1) Unconsolidated Operating Results(% figures represent change from previous fiscal year)
Revenue

Operating profit

Ordinary profit

Net profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

FY3/19141,500

13.6

13,561

12.3

13,795

11.6

9,490

67.4

FY3/18

124,58811.2

12,077

4.5

12,3655.4

5,669(28.0)EPS

Fully diluted EPS
Yen

Yen

FY3/19243.44224.36

FY3/18145.87134.01(2) Unconsolidated Financial Position
Total Assets
FY3/19FY3/18(Reference) Capital:

Net Assets

Shareholders’ Equity Ratio

Shareholders’ equity per share

Millions of yen

Millions of yen%

Yen

185,726

75,97640.9

1,948.58

39.7

1,751.03

171,945
68,262As of March 31, 2019: ¥75,976 million
As of March 31, 2018: ¥68,262 million*This summary of financial statements is exempt from auditors procedures.
*Note to ensure appropriate use of forecasts and other noteworthy items:(Notes on forecast results)
Financial forecast is based on information currently available to management, and do not represent a promise or guarantee to achieve these forecasts.
Various uncertain factors could cause actual results to differ. Moreover, for information regarding financial forecast earnings and the assumptions
upon which they are based, and the usage of this financial forecast, please refer to the section, “1. Overview of Operating Results, (4) Outlook for
Fiscal 2019” on page 9.
(Method for obtaining supplementary materials for financial statements such as presentation materials for the earnings release conference)
The Company will post supplementary materials including presentation materials for earnings release conference on our website.

3

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
Index
1. Financial Highlights for the Year Ended March 31, 20195(1) Business Performance5(2) Consolidated Financial Position

8(3) Consolidated Cash Flow

8(4) Outlook for FY3/20

9(5) Earnings Allocation Policy and Dividends for FY3/19 and FY3/20

10

2. Basic Approach to the Selection of Accounting Standards

10

3. Consolidated Financial Statements and Major Notes

11(1) Consolidated Balance Sheets

11(2) Consolidated Income Statement and Comprehensive Income Statement

13

Consolidated Income Statement

13

Consolidated Comprehensive Income Statements

15(3) Consolidated Statement of Shareholders’ Equity

16(4) Consolidated Statement of Cash Flow

18(5) Notes to Consolidated Financial Statements

20(Notes Regarding Assumptions of a Going Concern)

20(Scope of Consolidation)

20(Segment Information)

20

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Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
1. Financial Highlights for the Year Ended March 31, 2019(1) Business Performance
1. Business Overview(Consolidated Earnings)

Revenue
Operating Profit
Ordinary Profit
Profit attributable to owners of the Company(Unit: million yen)Previous Term
FY3/18152,02113,087
12,928
8,778

Current Term
FY3/19
162,811
14,567
14,321
9,567% YoY Change
+7.1
+11.3
+10.8
+9.0

During the fiscal year ended March 31, 2019, the Japanese economy recovered modestly due to a recovery inpersonal spending and improvements in employment conditions, but trends in overseas economies are a concern,and for this reason the future outlook remains uncertain.
Our business environment remained favorable for our core business of dormitory and hotel mainly due to increase in
the higher-level educational establishment-going rate, companies introducing dormitories and inbound demand year
by year. On the other hand, our business environment was also affected by a string of unpredictable natural disasters
from June, including an earthquake and torrential rainfall.
Under the circumstances, we couldn’t have done prompt recover from the negative impact of natural disasters any
better. We also proactively pursued management of business to further improve customer satisfaction and expanded
the business foundation by pursuing advanced developments, which together constitute the framework for the
medium-term management plan. In addition, we endeavored to increase in our visibility by running televisioncommercials and participating in various IR events in not only Japan but also overseas. These included
co-sponsoring the university relay race in Hakone (Hakone Ekiden), which is closely related to our dormitory
business, one of the Company’s core businesses.
In addition to the negative impact of natural disasters, the Company recorded ¥1,870 million in expenses related topreparations to open new facilities, as well ¥290 million in expenses for large-scale renovations contributing tofurther improvement of customer satisfaction. However, we achieved steady growth in the dormitory business, andin the hotel business, revenue per available room (RevPAR; calculated as the product of the average room price by
the occupancy rate for each room), one of the key performance indicators, surpassed levels in the previous fiscal
year. In addition, income was generated from the real estate securitization. As a result, the Company’s profit was
higher vs. previous fiscal year offsetting the above temporary negative factors.
Revenue increased 7.1% year on year to ¥162,811 million, operating profit increased 11.3% year on year to ¥14,567
million, ordinary profit increased 10.8% year on year to ¥14,321 million, and profit attributable to owners of the company
increased 9.0% year on year to ¥9,567 million. Ordinary profit increased year on year for the ninth straight year andreached a record high for the seventh straight year as the Company made steady strides toward achieving its medium-term
management plan. Operating profit, ordinary profit and profit attributable to owners of the company exceeded the revised
upward financial forecasts announced on November 9, 2018.

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Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
2. Our Performance by major business segment
Dormitory Business (For students/employees, Domeal, Commissioned Dormitories)(Unit: million yen)Previous Term
Current Term
% YoY Change
FY3/18
FY3/19
Revenue
47,052
48,936
4.0
Operating Profit
7,579
7,807
3.0
In the dormitory business, initial occupancy rates at the beginning of the fiscal year in April 2018 were 97.7% (down
0.6 percentage points from the previous fiscal year), but this was caused by the temporary occurrence of empty rooms
resulting from the completion timing of a new dormitory for the exclusive use of educational establishments. The
number of contracts in the dormitory business for students returned to the previous upward trend, in addition to which
the dormitory business for employees also saw a substantial increase in the number of contracts. As a result, thenumber of contracted residents in the dormitories increased by 1,466 year on year to 38,857 residents as of the end of
March, 2019.
The dormitory business for students continued to benefit from a high demand for dormitories mainly driven by the risein university-going rate and an increase in foreign students attending universities in Japan. The number of contracts
increased mainly due to an increase in new dormitories, including two international dormitories for students, and new
affiliations with universities. As a result, revenue of dormitory business for students increased 2.2% year on year to¥25,831 million.
The dormitory business for employees achieved substantial gains in the number of contracts mainly due to continuous
improvement of the employment environment and the rise in the number of corporations introducing employee dormitories.
As a result, revenue of the dormitory business for employees increased 7.8% year on year to ¥14,120 million.
In our Domeal business, we received support from client educational establishments and companies through theirintroductions of new residents and also met rising demand of moving to dormitories without board (studio-type rooms) toones with board. Consequently, revenue of Domeal business grew by 1.3% year on year to ¥4,524 million.
In our commissioned dormitory business, we managed corporate and school dormitory facilities on a commissioned
basis, and we endeavored to differentiate our services with the creed “Customers remain a top priority for us”
coming from our operating ability as “Best dormitory operator in Japan”. Consequently, revenue of the commissioned
dormitory business increased 5.8% year on year to ¥4,459 million.
As a result, the number of dormitory facilities increased by 12 over the previous year (excluding commissioned facilities) to485, resident capacity grew by 1,325 people to 39,450 people, and revenue and operating profit increased 4.0% and 3.0%
year on year to ¥48,936 million and ¥7,807 million, respectively.
Hotel Business (Dormy Inn, Resort Hotels)(Unit: million yen)Previous Term
Current Term
% YoY Change
FY3/18
FY3/19
Revenue
78,342
11.7
70,160Operating Profit
14.9
7,155
8,219
In the hotel business, domestic travelers and inbound demand continued to increase, despite the impact of natural
disasters. In addition, our efforts to ensure that customers were put first resulted in RevPAR that exceeded levels in
the previous year. Consequently, both revenue and operating profit increased year on year fully offsetting hotel
opening expense.
With respect to the Dormy Inn business, this fiscal year we have opened nine hotels: “Natural Springs Nanbu no Yu
Dormy Inn Honhachinohe,” “Natural Springs Shiraito no Yu Dormy Inn Oita,” “Natural Springs Naniwa no Yu Dormy Inn
Osaka Tanimachi,” “Kasuga no Yu Dormy Inn Korakuen,” “Dormy Inn Global Cabin Hamamatsu,” “Natural Springs
Tamamo no Yu Dormy Inn Takamatsuchuokoenmae,” “Dormy Inn Global Cabin Yokohama Chukagai,” “Natural Springs
Asagiri no Yu Dormy Inn PREMIUM Namba ANNEX,” and “Natural Springs Suito no Yu Dormy Inn PREMIUM
Osakakitahama.”
The natural disasters above mentioned did have an impact, but we took steps, such as guiding inbound customers toareas outside of the affected regions, by taking advantage of our chain of hotels around the country. As a result, theinbound ratio exceeded the previous year’s level, and many customers in Japan also used our hotels, sustaining
increases in the occupancy rates and average daily rate. Consequently, revenue of Dormy Inn business increased
17.7% year on year to ¥46,792 million.
In the resort business, we opened “LA VISTA Kirishima Hills” as our first resort hotel in the Kyushu region, andalso opened the “Natural Springs Yururi no Yu Onyado Yuinosho” in Shirakawago in Gifu Prefecture. Althoughoccupancy rates fell temporarily due to the effects of a series of natural disasters and it took time to recover,
RevPAR was maintained at high levels for this fiscal year due to our efforts to further improve customer
6

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
satisfaction. As a result, revenue of resort business increased 3.7% year on year to ¥31,550 million. Moreover, we
thoroughly implemented cost controls by means of flexible personnel assignments tailored to occupancy conditions.
Due to these factors, the total number of hotel facilities in operation increased 10 year on year to 111 and thenumber of hotel rooms increased 1,796 year on year to 15,940 in the hotel business overall. Revenue increased
11.7% year on year to ¥78,342 million and operating profit increased 14.9% year on year to ¥8,219 million
offsetting around ¥1,650 million in expenses for the opening of new facilities, including a new office to be openedin the future, around ¥190 million in large-scale renovation expense aimed at further improving customer
satisfaction, and the negative impact of natural disasters.
Comprehensive Building Management Business(Unit: million yen)Previous Term
Current Term
% YoY Change
FY3/18
FY3/19
Revenue
14,877
15,524
4.3
Operating Profit504
296(41.2)In the comprehensive building management business, revenue increased 4.3% year on year to ¥15,524 million mainly
driven by an increase in construction projects, but operating profit decreased 41.2% year on year to ¥296 million due to the
expiry of certain contracts in the building management division.
Food Service Business(Unit: million yen)Previous Term
Current Term
% YoY Change
FY3/18
FY3/19
Revenue
6,732
6,998
4.0
(39.8)
Operating Profit
158
95
In the food service business, revenue increased 4.0% to ¥6,998 million mainly driven by increase in the number ofcontracted hotel restaurants managed, but operating profit decreased 39.8% year on year to ¥95 million due to the costs
incurred in preparing for the launch of a restaurant business.
Development Business(Unit: million yen)Previous Term
Current Term
% YoY Change
FY3/18
FY3/19
Revenue
22,45015,851(29.4)
Operating Profit
1,117
1,906
70.6
In the development business, revenue decreased 29.4% to ¥15,851 because a part of revenue was carried over to thenext fiscal year due to timing difference in the completion of construction, but operating profit increased
significantly 70.6% year on year to ¥1,906 million due to real estate securitization carried out in this fiscal year andan increase in construction projects with high profit margins.
Other Business(Unit: million yen)Previous Term
Current Term
% YoY Change
FY3/18
FY3/19
Revenue
11,845
12,402
4.7
Operating Profit
(290)
(125)
Our other business segments are the Senior Life business (management of senior citizen housing), the Public Kyoritsu
Partnership business (PKP: commissioned services business for regional government bodies), single life support businessand insurance agency business, comprehensive human resource services business, and financing and administrative
outsourcing services. Revenue of the other business segments increased 4.7% year on year to ¥12,402 million and operating
profit increased to loss of ¥125 million. The Senior Life business and the PKP business have grown steadily.

7

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019(2) Consolidated Financial Position(Assets)
Total assets as of March 31,2019 were ¥202,531 million, reflecting an increase of ¥11,601 million compared to the end of
the previous fiscal year mainly due to increase in land and real estate for sale in process.
(Liabilities)
Total liabilities as of March 31,2019 were ¥122,961 million, reflecting an increase of ¥3,870 million mainly due to increase
in interest-bearing debt.
(Net Assets)
Total net assets as of March 31, 2019 were ¥79,570 million, reflecting an increase of ¥7,730 million mainly due to increase
in retained earnings.
Consequently, shareholders’ equity ratio increased by 1.7 percentage points from the end of the previous fiscal year to39.3%.
(3) Consolidated Cash Flow
Consolidated cash and cash equivalents at the end of this fiscal year decreased by ¥901 million from the end of the previous
year to ¥16,070 million.
(Net Cash from Operating Activities)
Net cash inflow from operating activities increased by ¥4,934 million from the previous fiscal year to ¥17,963 million mainly
due to improvement in accounts receivable-trade and inventories.
(Net Cash used in Investing Activities)
Net cash used in investing activities was ¥21,474 million, mainly coming from “purchase of property, plant and equipment”
and “payments for lease and guarantee deposits”, an increase of ¥4,798 million from the previous fiscal year.
(Cash Flow from Financing Activities)
A net cash inflow in financing activities decreased by ¥3,198 million from the previous fiscal year to ¥2,606 million mainly
due to decrease in proceeds from issuance of bonds.
(Reference) Trends in Our Cash Flow Indicators
Shareholders’ Equity Ratio (%)
Shareholders’ Equity Ratio – Equity in market value base (%)

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19

33.6
72.6
7.5
8.9

35.9
116.4
8.2
10.2

37.0
74.0
5.0
24.9

37.6
103.9
6.1
26.1

39.3
105.7
4.6
45.3

Cash Flow to Interest-Bearing Debt Ratio (%)
Interest Coverage Ratio (x)Shareholders’ Equity Ratio: Capital / Total Assets
Shareholders’ Equity Ratio – Equity in market value base : Market Capitalization / Total Assets
Cash Flow to Interest-Bearing Debt Ratio: Interest-Bearing Debt / Cash Flow
Interest Coverage Ratio: Cash Flow / Interest Payments(Note) 1. Each indicator is based on consolidated financial figures.
2. Market capitalization excludes treasury stock.
3. Cash flow is based on our operating cash flow.
4. Interest-bearing debt includes all of the liabilities that bear interest payments on our consolidated balance sheet.
5. We use interest payments in our consolidated cash flow statements.

8

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019(4) Outlook for FY3/20(Consolidated)

Revenue
Operating Profit
Ordinary Profit
Profit Attributable to Owners of the Company(Unit: million yen)
Current Term
FY3/19
162,811
14,567
14,321
9,567

Coming Term
FY3/20183,000
15,70015,400
10,200% YoY Change
12.4
7.8
7.5
6.6

With regard to the future outlook, although employment conditions are expected to improve, we also predict thatconditions will remain uncertain given the consumption tax hike scheduled for October 2019 and trends in overseas
economies. Furthermore, in the medium term, reflecting the increase in visitors in conjunction with the Tokyo 2020
Olympic and Paralympic Games, it is expected that there will be significant environmental changes, including soaring
construction costs and personnel shortages, etc.
In the dormitory business, the occupancy rate at the beginning of FY 3/20 increased 1.0pp year on year to 98.7%
and we expect solid growth in dormitory business for both students and employees. We will continuously make aneffort to respond flexibly to the greater diversification of residents and their needs, while maintaining a stable
growth by optimizing costs.
In the Dormy Inn (business hotel) business, we plan to open a total of eight facilities: the “Dormy Inn Maebashi,”“Dormy Inn Fukui,” “Dormy Inn Morioka,” “Onyado Nono Aasakusa,” “Dormy Inn Kawasaki,” “LA VISTA
Furano Hills,” “Dormy Inn Mito,” and “Onyado Nono Kanazawa” (tentative names). In the resort business, we plan
to open a total of three facilities, namely “Echigoyuzawa Onsen Yukemuri no Yado Yuki no Hana,” “Toji no Sato
Akinomiya Inazumi Onsen” and “Kotohira Onsen Hatago Shikishimakan” (tentative names). We intend toaccelerate development of hotels to achieve the medium-term management plan. We will also steadily hire staff forthese new facilities.
In the commissioned services business, we will implement measures to increase our credibility with customers throughimprovements in our specialized technologies and product lineup. These measures will also allow us to aggressively
provide customers with high-quality building maintenance, and other services that are highly competitive within the market,
with our new enhanced organization.
In the food services business, we will develop products and services with high levels of customer satisfaction, andimplement strict management of variable expenses.
In the development business, we will continue to support the Kyoritsu Group development and new facility opening plans,in addition to cultivating external clients and strictly managing expenses.
In the other business segment, we will focus on developing the best business model as soon as possible to strengthen the
Senior Life business and the Public Kyoritsu Partnership (PKP) with a potential for becoming one of our core businesses
and realize higher levels of profitability.
As a consequence of the above, we expect- Revenue in FY3/20 to be ¥183,000 million, an increase of 12.4% from the prior year
- Operating profit in FY3/20 to be ¥15,700 million, an increase of +7.8% from the prior year
- Ordinary profit in FY3/20 to be ¥15,400 million, an increase of +7.5% from the prior year
- Profit attributable to owners of the Company in FY3/20 to be ¥10,200 million, an increase of 6.6%, respectively.
The profit growth in FY3/20 forecast is slower than prior year because we expect additional expenses of around +¥1,450
million higher than in FY3/19 to be booked in FY3/20. These expenses are as follows;- Opening expense of around +¥450 million higher than in FY3/19 due to the development facilities to establish a solid
business foundation for accelerated growth at a final phase of the medium-term management plan
- Huge renewal expense of around +¥800 million higher than in FY3/19 for further customer satisfaction improvement- System modification fee of around +¥200 million higher than in FY3/19 for further customer satisfaction improvement
All forecasts above mentioned are based on information currently available to management, and do not represent a promise
or guarantee to achieve these forecasts. Various uncertain factors could cause actual results to differ.

9

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019(5) Earnings Allocation Policy and Dividends for FY3/19 and FY3/20
We see the obtained capital from equity market as a mandate from our shareholders to be invaluable and focus on the returnto shareholders in line with our earnings performance as one of the most significant measures for us. One of our goals is tomaintain a stable level of dividends over the long term and we have established a target dividend payout ratio of 20%. In thisfiscal year of FY3/19, we project to pay ¥25 in year-end dividend per share for a total of ¥45 in annual dividend per share, anincrease of ¥5 per share or 12.5% from the prior year. In the next fiscal year of FY3/20, we expect to increase dividend pershare by ¥2 to ¥47. We make it a goal to achieve more than 20% of dividend payout ratio in FY3/22, the last year of
FY3/18-FY3/22 mid-term management plan. We continue to make an effort to maintain a stable level of dividends while also
further pursuing flexible ways in return to shareholders. At the same time, we also seek to retain an internal reserve required
to implement far-sighted management politics in a timely manner such as capital investment addressed the change businessenvironment and running start-up businesses.
2. Basic Approach to the Selection of Accounting Standards
We plan to apply Japanese Generally Accepted Accounting Principles (JGAAP) for the time being in consideration of thecomparability of our historical financial data by period and the earnings performance among companies.
The Group will respond appropriately to the adoption of IFRS in light of conditions in Japan and overseas.
As of IFRS adoption, we will make a decision appropriately about whether we should adopt it or not in consideration ofchanges in situations of both at home and abroad.

10

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
3. Consolidated Financial Statements and Major Notes(1) Consolidated Balance Sheets

FY3/18(March 31, 2018)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Real estate for sale
Real estate for sale in process
Costs on uncompleted construction contracts
Others excluding allowance for loan losses
Allowance for loan losses
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
LandConstruction in progress
Others
Accumulated depreciation
Others, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Guarantee deposits
Lease deposits
Deferred tax assets
Others excluding allowance for doubtful accounts
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Bond issuance cost
Total deferred assets
Total assets

11(Unit: million yen)
FY3/19(March 31, 2019)17,298
10,603
217
2,652
360
7,247
(26)
38,353

16,643
9,273
288
6,815
297
7,763
(25)
41,056

69,763(27,069)
42,69440,846
16,335
12,179(9,091)
3,087
102,964
4,012

73,486(30,075)
43,411
44,59817,615
13,497(10,132)3,365
108,991
3,236

5,093
346
16,054
13,516
2,455
7,773
(203)
45,036
152,0135,126
610
16,462
14,981
2,765
8,825
(202)
48,569160,796

562
562
190,929

678
678
202,531

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
FY3/18(March 31, 2018)
Liabilities
Current liabilities
Notes and accounts payable – trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Advances received
Provision for bonuses
Provision for directors' bonuses
Provision for warranties for completed construction
Provision for point card certificates
OthersTotal current liabilities
Non-current liabilities
Bonds payable
Convertible bond-type bonds with subscription rights to shares
Long-term loans payable
Long-term guarantee deposited
Deferred tax liabilities
Net defined benefit liability
Director retirement benefit reserve
Provision for point card certificates
Asset retirement obligations
OthersTotal non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

12(Unit: million yen)
FY3/19(March 31, 2019)

7,998
12,915
4,638
2,597
11,191
2,071
388
9
3
10,47252,287

6,788
10,4205,730
2,985
11,336
2,359
495
9
3
9,910
50,04032,23020,000
8,662
3,354
368
1,089
269
5
400
421
66,802
119,090

39,10019,995
7,707
3,483
332
1,083
271
6
534
406
72,921
122,961

7,949
12,80551,270(336)
71,6907,960
12,81659,186(349)
79,613

515
(378)
12
149
71,839190,929

367
(422)
11
(43)
79,570202,531

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019(2) Consolidated Income Statement and Comprehensive Income Statement(Consolidated Income Statement)

Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries, allowances and bonuses
Welfare expenses
Provision for bonuses
Provision for directors’ bonuses
Retirement benefit expenses
Director retirement reserve provisions
Promotion expenses
Commission fee
Provision of allowance for doubtful accounts
Provision for point card certificates
Business consignment expenses
Rent expenses
Depreciation
OthersTotal selling, general and administrative expense
Operating profit
Non-operating profit
Interest income
Dividend income
Deposit redemption income
OthersTotal non-operating profit
Non-operating expenses
Interest expenses
Amortization of bond issuance cost
Commission fee
OthersTotal non-operating expenses
Ordinary profit

13

FY3/18(April 1, 2017 toMarch 31, 2018)
152,021118,21433,806(Unit: million yen)
FY3/19(April 1, 2018 toMarch 31, 2019)
162,811125,229
37,581

4,693
946
635
388
77
1
1,912
7,222
7
(32)
1,448
585
215
2,616
20,71913,087

4,719
995
721
495
85
1
2,087
8,398
4
6
1,528
801
275
2,892
23,014
14,567

107
100
120
292
621

72
107
105
178
463

495
48
98
138
781
12,928

394
74
90
150

709
14,321

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
(Unit: million yen)
FY3/19(April 1, 2018 toMarch 31, 2019)

FY3/18(April 1, 2017 toMarch 31, 2018)
Extraordinary profit
Gain on sales of non-current assets
Gain on sales of investment securities
OthersTotal extraordinary profit
Extraordinary losses
Impairment loss
Loss on retirement of non-current assets
Dismantlement costs
Loss on disaster
Cancellation penalty
OthersTotal extraordinary losses
Income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net profit
Profit attributable to owners of the Company

14

198
698
25
923

－
18
－

477
113
115
－
－
71
777
13,073
4,421
(126)
4,295
8,778
8,778

50
－
－
23
35
3
112
14,227
4,939
(278)
4,660
9,567
9,567

18

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
(Consolidated Comprehensive Income Statements)

8,778(Unit: million yen)
FY3/19(April 1, 2018 toMarch 31, 2019)
9,567

(318)
(22)
(0)
(342)
8,436

(148)
(43)
(0)
(192)
9,374

8,436

9,374

FY3/18(April 1, 2017 toMarch 31, 2018)
Net profit
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to owners of the Company

15

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019(3) Consolidated Statements of Shareholders’ Equity
Consolidated Figures for the Fiscal Year Ended March 2018 (April 1, 2017 to March 31, 2018)(Unit: million yen)
Shareholders’ equity
Common stock
Balance as of start of current fiscal year

Total shareholders’Capital surplus

Retained earnings

Treasury stock

7,703

12,55843,888

(321)

246

246

equity63,829

Increase (decrease) during current fiscal year
Issuance of new shares (exercise ofsubscription rights to shares)
Dividends from surplus
Profit attributable to owners of the Company

493(1,396)(1,396)

8,778

8,778
－

Increase (decrease) due to merger of
non-consolidated subsidiary by aconsolidated subsidiary
Acquisition of treasury stock

(14)

(14)

0

0

0

Sales of treasury stock
Items other than shareholders’ equity (net)Total change during current fiscal year

246

246

7,382

(14)

7,861

Balance as of end of current fiscal year

7,949

12,80551,270(336)

71,690

Accumulated other comprehensive income

Balance as of start of current fiscal year

Valuation difference

Cumulative

Retirement

Total accumulated

on available-for-saletranslation

benefit-related

other comprehensive

securities

adjustments

adjustments

income

(356)

834

13

491

Total net assets

64,320

Increase (decrease) during current fiscal year

Issuance of new shares (exercise ofsubscription rights to shares)

493(1,396)

Dividends from surplus

8,778

Profit attributable to owners of the Company－

Increase (decrease) due to merger of
non-consolidated subsidiary by aconsolidated subsidiary(14)

Acquisition of treasury stock

0

Sales of treasury stock
(318)

(22)

(0)

(342)

(342)

Total change during current fiscal year

(318)

(22)

(0)

(342)

7,518

Balance as of end of current fiscal year

515

(378)

12

149

71,839Items other than shareholders’ equity (net)16

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
Consolidated Figures for the Fiscal Year Ended March 2019 (April 1, 2018 to March 31, 2019)(Unit: million yen)
Shareholders’ equity
Common stock
Balance as of start of current fiscal year

Total shareholders’Capital surplus

Retained earnings

Treasury stock

7,949

12,80551,270

(336)

10

10

equity71,690

Increase (decrease) during current fiscal year

Issuance of new shares (exercise ofsubscription rights to shares)

21(1,637)(1,637)

Profit attributable to owners of the Company

9,567

9,567

Increase (decrease) due to merger of
non-consolidated subsidiary by aconsolidated subsidiary

(14)

(14)

Dividends from surplus

Acquisition of treasury stock

(13)

(13)

0

0

0

Sales of treasury stock
Items other than shareholders’ equity (net)Total change during current fiscal year

10

10

7,915

(13)

7,923

Balance as of end of current fiscal year

7,960

12,81659,186(349)

79,613

Accumulated other comprehensive income
Net unrealized gains
on other securities
Balance as of start of current fiscal year

Cumulative

Retirement

Total accumulatedtranslation

benefit-related

other comprehensive

adjustments

adjustments

income

515

(378)

12

149

Total net assets

71,839

Increase (decrease) during current fiscal year

Issuance of new shares (exercise ofsubscription rights to shares)

21(1,637)

Dividends from surplus
Profit attributable to owners of the Company

9,567

Increase (decrease) due to merger of(14)

non-consolidated subsidiary by aconsolidated subsidiary(13)

Acquisition of treasury stock

0

Sales of treasury stock
(148)

(43)

(0)

(192)

(192)

Total change during current fiscal year

(148)

(43)

(0)

(192)

7,730

Balance as of end of current fiscal year

367

(422)

11

(43)

79,570Items other than shareholders’ equity (net)17

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019(4) Consolidated Statement of Cash Flow
(Unit: million yen)
FY3/18(April 1, 2017 toMarch 31, 2018)
Cash flow from operating activities
Profit before income taxes
Depreciation

FY3/19(April 1, 2018 toMarch 31, 2019)13,073

14,227

4,429

4,759

Amortization of long-term prepaid expenses

414

324

Amortization of guarantee deposits

250

283

Increase (decrease) in provision for bonuses

242

288

Interest and dividend income

(208)

(179)

Interest expenses

495

394

Impairment loss

50

Loss (gain) on sales of property, plant and equipment

477
(84)

Dismantlement costs

115－

Loss on disaster
Cancellation penalty

Loss (gain) on sales of investment securities
Decrease (increase) in notes and accounts receivable – trade

－

－

23

－
(698)

35
(18)

(1,960)1,327

Decrease (increase) in inventories

(446)

306

Increase (decrease) in notes and accounts payable – trade

1,768(1,213)

Increase (decrease) in accrued expenses

(293)

450

Increase (decrease) in advances received

(103)

146

Increase (decrease) in accounts payable – other

(164)

156

Increase (decrease) in accrued consumption taxes

(135)

470

Increase (decrease) in deposits received

195

169

Increase (decrease) in guarantee deposits received

285

160

Others(343)

718

Subtotal

17,307

Interest and dividend income received

146

22,883111

Interest expenses paid

(499)

(396)

Income taxes refund

60Income taxes paid

(3,932)(4,634)

Cash flow from operating activities

13,02917,963Purchase of securities(1,382)(275)

Proceeds from sales of securities

1,501

49

Cash flow from investing activities(19,711)(16,596)

Proceeds from sales of property, plant and equipment

Purchase of property, plant and equipment

8,847

2

Purchase of intangible assets(1,192)

(284)

(242)

(224)

(1,383)(729)

Purchase of long-term prepaid expenses
Payments of loans receivableCollection of loans receivable

1,323

304

Payments for lease and guarantee deposits(4,028)(2,555)

Proceeds from collection of lease and guarantee deposits
Purchase of insurance funds

224

133

(1,023)(1,006)

Proceeds from cancellation of insurance funds

52

2

Others339(295)(16,676)(21,474)

Cash flow from investing activities

18

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
(Unit: million yen)
FY3/18(April 1, 2017 toMarch 31, 2018)
Cash flow from financing activities
Net increase (decrease) in short-term loans payable

FY3/19(April 1, 2018 toMarch 31, 2019)(2,550)

1,096

Proceeds from long-term loans payable

3,800

2,300

Repayments of long-term loans payable(8,912)(6,879)Proceeds from issuance of bonds

17,87912,409

Redemption of bonds(2,950)(4,623)

(14)

(13)

Purchase of treasury shares
Cash dividends paid

(1,394)(1,633)

Others(53)(49)

Cash flow from financing activities

5,804

2,606

Effect of exchange rate change on cash and cash equivalents

(38)

(6)

Net increase (decrease) in cash and cash equivalents

2,118

(911)

14,853

16,972－

916,972

16,070Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from merger
Cash and cash equivalents at end of period

19

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019(5) Notes to Consolidated Financial Statements(Notes Regarding Assumptions of a Going Concern)
No events to be noted for this purpose(Scope of Consolidation)
1) Consolidated subsidiaries: 9 Companies
Kyoritsu Estate Co., Ltd.
Kyoritsu Trust Co., Ltd.
Kyoritsu Insurance Service Co., Ltd.
Kyoritsu Food Service Co., Ltd.
Japan Placement Center Co., Ltd.
Kyoritsu Financial Service Co., Ltd.
Builnet Co., Ltd.
Central BuilWork Co., Ltd.
Kyoritsu Maintenance Korea Co., Ltd.
2) Non-Consolidated Subsidiaries: 6 Companies
Kyoritsu Assist Co., Ltd.
Ryokan Okunobo Co., Ltd.
Kyoritsu Maintenance Taiwan Co., Ltd
Kyoritsu Maintenance (Thailand) Co., Ltd.
Kyoritsu Maintenance Vietnam Co., Ltd.
Kyoritsu Maintenance Sriracha Co., Ltd.
(Reason for the exclusion from scope of consolidation)
The assets, revenue and net profit of these non-consolidated companies only amount to a marginal amount of thetotal consolidated accounts and are not considered to be important enough to be included in consolidated accounts.
(Segment Information)
1) Overview of Reported Segments
Financial information related to the individual divisions of our business segments is readily available. BOD assesses
this information on a regularly basis to give a performance evaluation and make a decision to allocate businessresources.
Our divisions and subsidiaries are responsible for the various services within Kyoritsu group. They are also
responsible for developing both strategies and business activities for their respective businesses.
Therefore, our business segments are defined by the basic services provided by each of the divisions and subsidiaries
and are divided into five main segments including “Dormitory business”, “Hotel business”, “Comprehensive building
management business”, “Food service business” and “Development business”.
We provide an overview of our reported business segments as follows:
Dormitory business: Management and maintenance of dormitories for students and employees, Domeal and delegateddormitories from universities etc.
Hotel business: Dormy Inn business hotels, resort hotels
Comprehensive building management business: Management of Office building and residential property
Food service business: Restaurant business and delegated business of cafeterias, hotel restaurants etc.
Development business: Planning, design and construction, real estate brokerage business, condominiums for sale,
Real estate securitization and other development facilities related services2) Calculation method for revenue, profit and loss, assets, and other COAs by reported segment
Profits in the reported business segments are based on operating profit.
The amount of intersegment earnings and transfers are based on actual market value.

20

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 20193) Revenue, Profit and Loss, Assets, and Other COAs by reporting segment
Consolidated Figures for the Fiscal Year Ended March 2018 (April 1, 2017 to March 31, 2018)(Unit: million yen)

Adjustments(Note 2)

The amount tobe booked in
Consolidated
Financial
Statements(Note 3)

Reporting Segments
Comprehensive

Dormitory
businessHotelbusinessbuilding
managementFoodbusiness

Development
business

Subtotal

Others(Note 1)Total

business

Revenue

46,76069,984

7,846

1,437

14,631

140,659

11,361

152,021－152,021

Intersegment
earnings andtransfers

292

175

7,031

5,294

7,819

20,613483

21,097(21,097)－

Total

47,05270,16014,877

6,732

22,450161,273

11,845

173,118(21,097)

152,021

Profit and loss

7,579

7,155

504

158

1,117

16,515(290)

16,224(3,137)

13,087

Assets

48,415100,158

12,4991,427

14,797

177,297

8,467

185,765

5,164

190,929

1,104

3,177

67

19

44

4,414

97

4,511

(81)

4,429

14

448

－

11

－

474

3

477

－

477

1,841

18,55060878

021,08059

21,139244

21,384External revenue

Other COAs
Depreciation
Impairment
loss
Increase(decrease) intangible assets
and intangible
assets(Notes)1. “Others” is not considered as a reporting business segment and is incorporated in the Senior Life business (management of seniorcitizen housing), PKP business (consigned services business provided to regional government bodies), single life support services,
insurance agency business, comprehensive human resources, financing, administrative outsourcing services, and other related services.
2. Details of “adjustments” are as follows;(Unit: million yen)Segment Income(276)Intersegment transaction cancellations
Corporate expenses (Note)(2,861)
Total(3,137)(Note) Corporate expenses represent the ones associated primarily with finance and accounting etc.
(Unit: million yen)Segment Assets(9,444)
14,6095,164
Total(Note) Corporate assets represent cash and deposits, investment securities, assets associated with headquarters and deferred tax assets.
Elimination of intersegment transaction
Corporate assets (Note)

3. Segment profit (loss) has been adjusted to operating profit described in the consolidated financial statements of income.

21

Kyoritsu Maintenance (9616)
Consolidated Financial Statements for Fiscal Year Ended March 31, 2019
Consolidated Figures for the Fiscal Year Ended March 2019 (April 1, 2018 to March 31, 2019)(Unit: million yen)
Adjustments(Note 2)

The amount tobe booked in
Consolidated
Financial
Statements(Note 3)

Reporting Segments
Dormitory
businessHotelbusiness

Comprehensive
building
managementFoodbusiness

Development
business

Subtotal

Others(Note 1)Total

business

Revenue

48,59378,182

7,613

1,306

15,229150,926

11,885

162,811－

162,811

Intersegment
earnings andtransfers

342

159

7,910

5,691

622

14,726516

15,243(15,243)－

Total

48,93678,342

15,524

6,998

15,851

165,653

12,402

178,055(15,243)

162,811

Profit and loss

7,807

8,219

296

95

1,906

18,325(125)

18,199(3,632)

14,567

Assets50,542

107,584

12,457

1,542

17,287

189,414

9,203

198,617

3,914

202,531

1,141

3,460

62

21

40

4,726

100

4,826

(66)

4,759

41

1

－

2

－

44

5

50

－

50

3,012

14,998

52

38

130

18,23225

18,258(776)

17,481

External revenue

Other COAs
Depreciation
Impairment
loss
Increase(decrease) intangible assets
and intangible
assets(Notes)1. “Others” is not considered as a reporting business segment and is incorporated in the Senior Life business (management of seniorcitizen housing), PKP business (consigned services business provided to regional government bodies), single life support services,
insurance agency business, comprehensive human resources, financing, administrative outsourcing services, and other related services.
2. Details of “adjustments” are as follows;(Unit: million yen)Segment profit(136)
Elimination of intersegment transaction
Companywide expenses (Note)(3,495)
Total(3,632)(Note) Corporate expenses represent the ones associated primarily with finance and accounting etc.
(Unit: million yen)Segment Assets(11,190)
15,104
3,914

Elimination of intersegment transaction
Corporate assets (Note)

Total(Note) Corporate assets represent cash and deposits, investment securities, assets associated with headquarters and deferred tax assets.
3. Segment profit (loss) has been adjusted to operating profit described in the consolidated financial statements of income.

22