This document has been translated from a part of the Japaneseoriginal for reference purposes only. In the event of any
discrepancy between this translated document and theJapanese original, the original shall prevail. JAIC assumes noresponsibility for this translation or for direct, indirect or any
other forms of damages arising from the translation.

Qualitative Information on Consolidated Operating
Results for the six months Ended September 30, 2022
(1) Outline of consolidated operating results
The consolidated operating results of the JAIC Group for the second
quarter of the current fiscal year under review (from April 1, 2022 toSeptember 30, 2022) recorded operating revenue of 1,112 million yen (up9.3% year-on-year), operating gross profit of 146 million yen (down50.0 % year-on-year), operating loss of 488 million yen (compared tooperating loss of 413 million yen for the second quarter of the previousfiscal year), ordinary loss of 579 million yen (compared to ordinary lossof 529 million yen for the second quarter of the previous fiscal year) andloss attributable to owners of parent of 671 million yen (compared to loss
attributable to owners of parent of 651 million yen for the the second
quarter of the previous fiscal year). The breakdown of operating results
are as follows.
(a) Breakdown of operating revenue and operating cost
(Fund management fees)
Fundmanagement

fees

etc.

consistofmanagement

fees

andadministrative fees from investment funds. Fund management fees etc.
were 58 million yen (down 1.3% year-on-year), about the same as yearon-year. The management fees from funds in liquidation process
decreased.
(Investment income)The proceeds of sale of operational investment securities increased to444 million yen (up 108.0 % year-on-year). As for private equity
investment, sales of domestic listed shares increased. As for project1 / 9

oriented investment, 1 mega-solar project was sold. Realized capital gain,
which is calculated by deducting cost of securities sold from proceeds ofsales of operational investment securities, also increased to 121 million
yen (up 170.9% year-on-year).
The total amount of investment write-offs and provision for allowance forpossible investment losses increased to 287 million yen (up 88.7 % yearon-year).

JAIC

postedprovisions

forinvestee

companies

thoseexperienced significant delays in business progress or for which
negotiation for the recovery of investment took a long time.
As a result, investment income, which is calculated by deducting
investment write-offs and provision for allowance for possible investment
losses from realized capital gains, amounted to loss of 166 million yen(compared to investment loss of 107 million yen for the second quarterof the previous fiscal year).
(Fund interests income, etc.)
Fund interests income, etc. consist of revenues of the projects operated
by the JAIC Group (such as revenue from electricity sales, revenue fromvegetable sales and other revenues), interests income from the projects
operated by other companies (such as net profits of the projects andgains from the sale of projects), interests income from private equity
funds operated by other companies, interest and dividend income andother income.
The total amount of fund interests income, etc. for the second quarter ofthe current fiscal year under review decreased to 599 million yen (down17.9 % year-on-year). Out of this, revenues of the projects operated bythe JAIC Group (such as revenue from electricity sales, revenue fromvegetable sales, rent fee revenue from group homes for the handicappedand other revenues) accounted for 379 million yen (down 45.0 % yearon-year). Revenue from electricity sales decreased because some mega
solar projects that are selling electricity were sold in the previous fiscalyear.
On the other hand, operational dividend income increased 217 million yen(up 2,204.1 % year-on-year). JAIC received profit dividend from a logistic
warehouse project that sold the facility in the previous fiscal year.

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(Fund interests losses, etc.)
Fund interests losses, etc. consist of costs of the projects operated by
the JAIC Group (such as cost of electricity sales, cost of producing
vegetables and other costs), interests losses of the projects operated byother companies (such as losses mainly from projects in early stage) andinterests losses of the private equity funds operated by other companies
and others.
The total amount of fund interests losses etc. for the current fiscal year
under review decreased to 348 million yen (down 12.4 % year-on-year).
Out of this, costs of the projects operated by the JAIC Group (such ascost of electricity sales, cost of producing vegetables, rental cost ofgroup homes for the handicapped and other costs) accounted for 319
million yen (down 12.1 % year-on-year). Cost of electricity sales
decreased because some mega solar projects that are selling electricity
were sold in the previous fiscal year.
As a result, operating revenue increased by 9.3 % year-on-year to 1,112
million yen, operating cost increased by 33.3 % year-on-year to 965
million yen and operating gross profit decreased by 50.0 % year-on-year
to 146 million yen.
(b) Selling, general and administrative expenses and operating income
The total amount of selling, general and administrative expenses
decreased to 635 million yen (down 10.1 % year-on-year). Administrative
expenses from projects decreased because some mega solar projects
that are selling electricity were sold in the previous fiscal year.
As a result, operating loss was 488 million yen (compared to operating
loss of 413 million yen for the second quarter of the previous fiscal year).
(c) Non-operating income, non-operating expenses and ordinary income
Non-operating income decreased to 5 million yen (down 62.1 % year-onyear) mainly because of a decrease of foreign exchange gains.
Non-operating expenses mainly consists of interest expenses anddecreased to 95 million yen (down 26.6 % year-on-year). On the nonconsolidated basis, interest expenses decreased with the reduction of
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loans payable. On the consolidated basis, interest expenses also
decreased with the reduction of loans payable by project finance due tothe sale of some mega solar projects in the previous fiscal year.
As a result, ordinary loss was 579 million yen (compared to ordinary lossof 529 million yen for the second quarter of the previous fiscal year).
(d) Extraordinary income/loss and Profit/Loss attributable to owners ofparentLoss on valuation of investment securities was main item among
extraordinary income/loss for both the second quarter of the previous
fiscal year and for the second quarter of the current fiscal year underreview. Total extraordinary loss decreased to 13 million yen (down 86.7 %year-on-year) for the second quarter of the current fiscal year underreview.
Profitattributabletonon-controllingshareholders

istheprofit

attributable to fund investors other than the JAIC Group among theprofits of the funds subject to consolidation. The amount increased to 77
million yen (up 379.9 % year-on-year) as the profits of the funds subject
to consolidation increased.
As a result of adding extraordinary income and deducting extraordinary
loss, income taxes and profit attributable to non-controlling interestsfrom ordinary loss, loss attributable to owners of parent amounted to 671
million yen (compared to loss attributable to owners of parent of 651
million yen for the second quarter of the previous fiscal year). JAIC
properly estimated tax effect accounting and did not recognize deferred
tax assets for both the second quarter of the previous fiscal year and thesecond quarter of the current fiscal year under review.
(2) Cash flows(Cash flow from operating activities)
Net cash generated from operating activities amounted to 126 million yen(compared to 1,232 million yen used in for the second quarter of theprevious fiscal year). Distributions from investment funds increased andpayment for investment of investment funds decreased.

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(Cash flow from investing activities)
Net cash used in investing activities was 0 million yen (compared to 55
million yen generated from for the second quarter of the previous fiscalyear). There were no proceeds from sales of non-operational investment
securities for the second quarter of the current fiscal year under review.
(Cash flow from financing activities)
Net cash used in financing activities with repayments of long-termborrowings decreased year-on-year to 494 million yen (compared to 697
million yen for the second quarter of the previous fiscal year).
Cash and cash equivalents as of September 30, 2022 decreased by 342
million yen from March 31, 2022 to 2,055 million yen, after adding effectof exchange rate change on cash and cash equivalents of 26 million yen.
(3) Financial position(Assets)
Total assets as of September 30, 2022 decreased to 18,405 million yen(compared to 20,231 million yen as of March 31, 2022).
Cash and deposits decreased to 3,857 million yen (compared to 5,666
million yen as of March 31, 2022) because of repayment of loans payable,
payment of expenses and interests, and new investment executions.
Meanwhile, the amount of the cash and deposits included deposits
attributable to the investment funds operated by the JAIC Group. Those
deposits must be managed in accordance with each fund’s partnershipagreement. The JAIC Group clearly separates and manages those
deposits from cash and deposits belonging to the JAIC Group. Cash anddeposits belonging to the JAIC Group were cash and cash equivalents of2,055 million yen as of September 30, 2022 (compared to 2,397 million
yen as of March 31, 2022) in the consolidated statements of cash flows.
In addition, private equity investments conducted by the JAIC Group arehighly affected by factors such as stock market fluctuations due to thenature of their business. It is difficult to make a reasonable forecast ofbusiness results in the current volatile environment. As a result, theamount of funds recovered from private equity investments could decline
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significantly. Under these circumstances, the JAIC Group must alwaysmaintain a certain balance of cash and deposits to ensure not only thepayment of expenses and interests and the repayment of loans payable
but also the investment for future growth.
Property, plant and equipment mainly consists of assets of projects
operated by the JAIC Group, such as renewable energy power plantfacilities, vegetable plant facilities and group homes for the handicapped.
Since group homes for the handicapped were newly constructed during
the second quarter of the current fiscal year under review, the amountincreased to 4,584 million yen (compared to 4,148 million yen as of March31, 2022).
Operational investment securities consist of private equity investments,
the projects those are operated by the JAIC Group and are in the initialstages of development, and the projects operated by other companies.
Operational investment securities as of September 30, 2022 decreased
to 9,142 million yen (compared to 9,538 million yen as of March 31, 2022),
mainly because of progress of investment collections and distributions
from projects.
Allowance for possible investment losses as of September 30, 2022
increased to 1,626 million yen (compared to 1,492 million yen as of March31, 2022), due to positing provisions.
As a result, the investment loss provision ratio (ratio of allowance forpossible investment losses to operational investment securities) as of
September 30, 2022 was 17.8 %, up 2.2 points from March 31, 2022.
(Liabilities)
Total liabilities decreased to 10,519 million yen as of September 30, 2022
(compared to 10,787 million yen as of March 31, 2022).
Of liabilities, total of loans payable and bonds as of September 30, 2022
decreased to 9,291 million yen (compared to 9,521 million yen as ofMarch 31, 2022). Loans payable of JAIC itself decreased to 5,448 millionyen (compared to 5,943 million yen as of March 31, 2022). Project
finance and bonds for the projects operated by the JAIC Group as of
September 30, 2022 increased to 3,842 million yen (compared to 3,578
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million yen as of March 31, 2022).
Loans payable of JAIC itself decreased reflecting the repayments for thesecond quarter of the current fiscal year under review. After securing
investment funds for future growth, JAIC will repay its loans payable toan appropriate level.
The balance of loans payable by project finance and bonds for theprojects operated by the JAIC Group increased from the end of theprevious

consolidated

fiscalyear

becausetheamountof

newprocurement exceeded the amount of repayment. Project finance andbond for the projects operated by the JAIC Group will not affect thefinancial soundness of the JAIC Group, since its source of payments islimited to the assets and revenues of the projects. Therefore, the JAIC
Group will continue to expand fund raising through project finance andbond. The JAIC Group will promote leveraged investment in a wide rangeof projects including renewable energy projects operated by the JAICGroup.

Thisenhances

profitabilityoftheJAIC

Group

without

compromising on financial soundness.
(Net assets)
Of net assets, total shareholders’ equity as of September 30, 2022
decreased to 7,099 million yen (compared to 7,766 million yen as ofMarch 31, 2022) due to a loss attributable to owners of parent anddecrease of unrealized gains on operational investment securities. On theother hand, total assets also decreased. As a result, the equity ratio as ofSeptember 30, 2022 was up 0.2 points to 38.6 % (compared to 38.4% asof March 31, 2022). Non-controlling interests also decreased to 754
million yen (compared to 1,646 million yen as of March 31, 2022) mainly
because of distributions from investment funds. As a result, total net
assets as of September 30, 2022 also decreased to 7,886 million yen(compared to 9,443 million yen as of March 31, 2022).
(4) Business Position(a) Investment and loan activities
For the second quarter of the current fiscal year under review,execution of investments and loans decreased by 40.2 % year-on-year to
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1,324 million yen in 14 companies/projects. As of September 30, 2022,
the balance of investments and loans decreased to 13,618 million yen in
128 companies/projects (compared to 13,784 million yen in 129
companies/projects as of March 31, 2022).
Looking at project oriented investment, total amount of execution ofinvestments and loans in new projects and in existing projects decreased
by 35.6 % year-on-year to 600 million yen in 8 projects. The investment
amounts decreased in a smart agriculture project and there was noinvestment in distribution center projects. As for investments in otherprojects, investment amounts per project were small.
On the other hand, 1 mega-solar project, 1 healthcare project and 1
distribution center project were sold during the second quarter of thecurrent fiscal year under review. Additionally, distributions from existing
projects decrease the balance of project oriented investments andinterest profits/losses also increase/decrease the balance. As a result,the balance of investments and loans as of September 30, 2022
decreased to 6,191 million yen in 44 projects (compared to 6,344 million
yen in 43 projects as of March 31, 2022).
As of September 30, 2022, JAIC invested in 13 mega solar projects (15power plants) with the capacity of 30.7ＭＷ which are either currently
selling electricity or are under construction or planning. Out of thesemega solar projects, the portion that attributable to JAIC is 13.1ＭＷ incapacity. JAIC also invested in one woody biomass project with thecapacity of 2.0ＭＷ, two biogas projects with the capacity of 1.1ＭＷ, onebiogas plant operator and one wind power project with the capacity of
25.2ＭＷ at most.
As for private equity investment, when JAIC’s own capital is invested,
JAIC makes strategic investment in partner companies for project
oriented investment. JAIC invests its own capital in a selective mannerbased on business themes in line with its management philosophy inprinciple. When the capital of a fund is invested, JAIC makes financial
investment pursuant to the fund’s investment policy.

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For the second quarter of the current fiscal year under review, total
amount of execution of investments and loans in new companies and inexisting companies decreased by 43.5 % year-on-year to 724 million yen
in ６ companies.
Strategic investments decreased in both number of companies andamounts. Investment amounts also decreased from the fund supporting
the business succession needs. As for investment collection, sales ofdomestic listed shares and unlisted shares in China proceeded. As aresult, the balance of investments and loans was about the same as at
the end of the previous consolidated fiscal year, to 7,427 million yen in84 companies (compared to 7,440 million yen in 86 companies as ofMarch 31, 2022).
(b) Management of investment funds
As of September 30, 2022, the number of investment funds, for which
the JAIC Group is responsible for management, operation or provision ofinvestment information, totaled 10, and the balance of total commitment
amounts under management increased to 16,787 million yen (comparedto 10 investment funds with 16,463 million yen as of March 31, 2022).
In the second quarter of the current fiscal year under review, “Succession
Investment Limited Partnership, Ⅱ” was newly established. The fund is
supporting the business succession needs of SMEs in Japan and its
commitment amount is 1,801 million yen. The total commitment amount ininvestment funds also increased by 526 million yen because of foreignexchange fluctuation. On the other hand, 1 investment fund which
commitment amount of 2,003 million yen decreased from “Maturity isbeing extended”.

(End)

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