Kyoritsu Maintenance Co., Ltd.

(Securities Code: 9616)

Summary of Consolidated Financial Results
for the Second Quarter of the Fiscal YearEnding March 31, 2022
［JGAAP］
Nov 2021

1

Summary of Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending
March 31, 2022 [based on Japanese GAAP]
Nov 9, 2021
Listed exchange: Tokyo

Name of listed company
Kyoritsu Maintenance Co., Ltd.
Code
9616
URL https://www.kyoritsugroup.co.jp/
Representative(Title)President(Name) Koji Nakamura
Contact(Title)Managing Director(Name) Manabu Takaku
Scheduled filing date of Quarterly Report:
Nov 12, 2021
Scheduled date of start of dividend payment:
Dec 6, 2021
Supplementary materials for the quarterly financial results: Yes
Investor conference for the quarterly financial results: None

Tel +81-3-5295-7778(Rounded down to the nearest million yen)

1.

Consolidated financial results for the first six months of the fiscal year ending March 31, 2022 (April 1, 2021 to September 30,
2021)(1) Consolidated Operating Results(Percentage figures represent year-over-year changes)

Net sales

Operating profit

Millionyen

Profit (loss)
attributable to ownersof parent

Ordinary profit%

Million yen%

Millionyen%

Millionyen%

The six months ended September 30, 2021

67,713

20.4-5,619－-5,230－-4,076－The six months ended September 30, 2020

56,250-40.0-4,486－-4,486－-7,856－(Note) Comprehensive income:The six months ended September 30, 2021: -4,071 million yen (–%)
The six months ended September 30, 2020: -7,810 million yen (–%)

Profit (loss)
per share

Diluted net income
per share
Yen

Yen

The six months ended September 30,
2021-104.55–

The six months ended September 30,
2020-201.49–(Note) Diluted net income per share is omitted since the Company recorded net loss per share for this period and there are no potentiallydilutive shares(2) Consolidated financial position
Total assets

Net assets per share%

Yen

230,476

66,32128.8

1,701.00

239,032

70,78429.6

1,815.45

As of March 31, 2021

2.

Equity ratio

Million yen

As of September 30, 2021
(Reference) Shareholders’ Equity:

Total net assets

Million yen

As of September 30, 2021: 66,321 million yen As of March 31, 2021: 70,784 million yen

Dividends
Annual dividends
Q2 endQ3 endQ1 endYear ended March 31,
2021
Year ending March
31, 2022
Year ending March
31, 2022 (Forecast)Year end

Total

Yen

Yen

Yen

Yen

Yen

－

10.00

－

10.00

20.00

－

10.00
－

10.00

20.00

－

(Note) Revision from most recently announced dividends forecasts: None3.

Forecasted consolidated results for the fiscal year ending March 31, 2022 (April 1, 2021 to March 31, 2022)(Percentage figures represent year-over-year changes)

Net sales

Full Year

Operating profit

Net income
attributable toownersof the parent

Ordinary profit

Net income pershare

Millionyen%

Millionyen%

Millionyen%

Million
yen

%

Yen

173,000

42.6

2,000

－

1,900

－

100

－

2.56

(Note) Revision from most recently announced earnings forecasts: Yes

2

*Notes(1) Changes in major subsidiaries during the period under review (changes in specific subsidiaries accompanied by changes in thescope of consolidation): None
(2) Application of special accounting treatment in the preparation of the quarterly consolidated financial statements: Yes(Note) For details, please see “(4) Notes on Quarterly Consolidated Financial Statements, (Application of special accounting
procedures in the preparation of quarterly consolidated financial statements)” under “2. Quarterly Financial Statements andMajor Notes” on page 14.
(3) Changes in accounting policies, changes in accounting estimates, and restatements(i) Changes in accounting policies due to revision of accounting standards, etc.:

Yes(ii) Changes in accounting policies other than those under (i) above:(iii) Changes in accounting estimates:

None
None

(iv) Retrospective restatements:

None(4) Number of issued shares (common stock)(i) Number of issued shares at the end of
the period (including treasury shares)(ii) Number of treasury shares at the endof the period(iii) Average number of shares
during the period

As of September
30, 2021

39,219,818 Year ended
shares March 31, 2021

39,219,818
shares

As of September
30, 2021

229,835 Year ended
Shares March 31, 2021

229,475
shares

As of September
30, 2021

38,990,123 As of September 30,
shares 2020

38,990,242
shares*Summaries of financial results are not subject to auditing by a certified public accountant or auditing firm.
*Explanation of the appropriate use of earnings forecasts and other special notes(Note concerning forward-looking statements)
The forward-looking statements, including earnings forecasts and other future projections contained in this document are basedon information available to the Company at the time of preparation and on certain assumptions deemed reasonable by theCompany. As such, they do not constitute an assurance that the Company promises to achieve these projected results. Actual
business results may differ materially from the forecasts due to various factors.
Please see “(3) Explanation of Forecasts of Consolidated Results and Other Forward-Looking Information” under“1.Qualitative Information on Quarterly Results” on page “7” for the assumptions used for the forecast of financial results andnotes concerning the use of the forecast of financial results.
(How to obtain supplementary materials on financial results and content of briefings on financial results)
Supplementary materials on quarterly financial results and a movie recorded the contents of the financial results briefing areposted on the Company website.

3

Table of contents for attached materials
1.Qualitative Information on Quarterly Results......................................................................................................................................... 5(1) Explanation of Operating Results .................................................................................................................................................... 5(2) Explanation of Financial Position .................................................................................................................................................... 6(3) Explanation of Forecasts of Consolidated Results and Other Forward-Looking Information ......................................................... 7
2. Quarterly Financial Statements and Major Notes .................................................................................................................................. 8(1) Quarterly Consolidated Balance Sheet............................................................................................................................................. 8(2) Quarterly Consolidated Income Statement and Quarterly Consolidated Statement of Comprehensive Income ............................ 10(Quarterly Consolidated Income Statement) ................................................................................................................................... 10(Six Months Ended September 30, 2021) ........................................................................................................................................ 10(Quarterly consolidated statement of comprehensive income) ........................................................................................................ 11(Six Months Ended September 30, 2021) ........................................................................................................................................ 11(3) Quarterly consolidated cash flow statement ................................................................................................................................... 12(4) Notes on Quarterly Consolidated Financial Statements ................................................................................................................. 14(Notes on the going concern assumption)........................................................................................................................................ 14(Notes concerning any notable changes in shareholders’ equity) .................................................................................................... 14(Application of special accounting procedures in the preparation of quarterly consolidated financial statements) ......................... 14(Changes in accounting policies) ..................................................................................................................................................... 14(Additional information) ................................................................................................................................................................. 15(Segment Information etc.) .............................................................................................................................................................. 154

1.Qualitative Information on Quarterly Results(1) Explanation of Operating Results
During the first six months of the current fiscal year, the Japanese economy continued to face a difficult situation due to the
spread of COVID-19, resulting in the repeated issuance of priority measures to prevent the spread of the disease and thedeclaration of a state of emergency.
Under these circumstances, our Group continued to take extensive measures to prevent the spread of infection (such astemperature checks, disinfection, photocatalysis, and non-contact measures) at all Group offices so that customers can use thefacilities safely. In addition, as part of the financial support for dormitory residents, our Group has continued to implement “theProgram to Support School Attendance under COVID-19 (interest-free loans for dormitory fees).” In addition, in several hotels
and restaurants, the Company suspended operations and limited operation hours, and attempted to reduce expenses by utilizing
support systems such as employment adjustment subsidies. In addition, the Company worked to strengthen sales of new services
such as "WORK PLACE DORMY" (offices and hotels where people can stay and reside) and "Shiki Club," Kyoritsu's General
Corporate Membership Program, as a marketing measure.
As a result, results for the first six months of the current fiscal year show net sales of 67,713 million yen (up 20.4% YoY),
operating loss of 5,619 million yen (vs. operating loss of 4,486 million yen in the same period of the previous fiscal year),ordinary loss of 5,230 million yen (vs. ordinary loss of 4,486 million yen in the same period of the previous fiscal year) and loss
attributable to owners of parent of 4,076 million yen (vs. loss of 7,856 million yen in the same period of the previous fiscal year).
In the previous year, our Group temporarily closed hotels and restaurants in response to the request for closure due to thedeclaration of a state of emergency. And our Group posted that resulting profit and loss as extraordinary income (loss). However,after reclassification to the ordinary accounts, the operating loss and ordinary loss shrunk by 1,753 million yen and by 2,142
million yen YoY, respectively.
Furthermore, currently some positive signs starting to appear, such as the easing of regulations in Japan and the easing ofrestrictions on entry for business purposes and foreign students, in line with the decrease in the number of new COVID-19 cases.
Our Group will continue to collaborate to recover its business performance.
Segment business performance is reviewed below.
(i) Dormitory BusinessIn the Dormitory Business, the occupancy rate at the beginning of the fiscal year started at 92.1% (down 1.6 points YoY) due
to the postponement of foreign students' arrival in Japan and the suspension of new employee training programs, as in theprevious fiscal year. Despite the increase in revenue from new openings (11 offices, 1,168 rooms) and newly commissioned
offices, net sales were flat compared to the same period of the previous fiscal year.
As a result, net sales amounted to 23,274 million yen (down 0.8% YoY) and operating profit was 2,509 million yen (down
8.5% YoY) due to decline in the occupancy rates.
(ii) Hotel BusinessIn the Hotel Business segment, the Company opened "Natural Hotsprings Kaga-no-Hozen Onyado Nono Kanazawa" in the
Dormy Inn Business and "La Vista Kusatsu Hills" in the Resorts Business during the current period. Despite the intermittent
issuance of priority measures to prevent the spread of the disease and the declaration of a state of emergency, both the DormyInn Business and Resort Business recorded a significant increase in revenues compared with the same period of the previous
fiscal year, when the "Go To Travel Campaign" was launched in July 2020. This was due to a recovery in occupancy rates bydomestic travelers, especially on weekends, and high occupancy rates during the Golden Week holidays in May.
As a result, net sales amounted to 26,697 million yen (up 45.0% YoY) and operating loss was 7,601 million yen (vs. operating
loss of 6,748 million yen in the same period of the previous fiscal year). In the same period of the previous fiscal year, theCompany temporarily closed a large number of hotels in response to requests for closures following the declaration of a stateof emergency, and posted the profit and loss as extraordinary income (loss). However, after reclassifying them to ordinaryaccounts, operating loss shrunk by 1,977 million yen YoY as the operating loss for the same period of the previous fiscal year
was 9,578 million yen.
Currently, both the occupancy rates and the average daily rate are on a recovery trend, as the priority measures to prevent the
spread of the disease and the declaration of a state of emergency have been fully lifted, and the restrictions on activities havebeen gradually eased. Our Group will continue to promote the sales of the aforementioned services, as well as the “NEWLOCAL STAY Plan (local-only services),” etc., and will strategically open new hotels in order to recover profitability as soon
as possible and strive for medium-to-long term business expansion.

5

(iii) Comprehensive Building Management Business
Factors such as decline in construction projects, despite a rise in cleaning services in accordance to increasing occupancy rates,
resulted in net sales of 6,531 million yen (down 10.8% YoY) and operating profit of 49 million yen in the Comprehensive
Building Management Business (down 68.9 percent YoY).
(iv) Food Service BusinessIn the Food Service Business, despite increased projects in contracted hotel restaurants, the suspension of liquor services,
shortened business hours and temporary closures of restaurants to prevent the spread of COVID-19 resulted to net sales of
3,103 million yen (up 38.2% YoY) and operating loss was 88 million yen (vs. operating loss of 16 million yen in the same
period of the previous fiscal year).
(v) Development BusinessAs a result of the liquidation of real estate, the Development Business reported net sales of 9,101 million yen (up 16.8% YoY)
and operating profit of 633 million yen (up 121.6% YoY).
(vi) Other Businesses
Other Businesses consist of the Senior Life Business (management and operation of senior residences), the Public Kyoritsu
Partnership (PKP) Business (services provided under contract to local governments), support business for people who live
alone, the insurance agency business, comprehensive human-resource services, the financial business, and the administrative
outsourcing business. The total of these businesses resulted in net sales of 7,568 million yen (down 1.4% YoY) and operating
profit of 293 million yen (down 41.0% YoY).

(2) Explanation of Financial Position(i) Assets, Liabilities and Net Assets(Assets)
Total assets at the end of the second quarter of this consolidated fiscal year stood at 230,476 million yen, down by 8,555
million yen from the end of the previous consolidated fiscal year. Main factors of this decrease included declines in cash anddeposits.
(Liabilities)
Liabilities at the end of the second quarter of this consolidated fiscal year stood at 164,154 million yen, down by 4,092 million
yen from the end of the previous consolidated fiscal year. This was mainly due to factors such as a decline in accounts payable- other etc.
(Net Assets)
Net assets at the end of the second quarter of this consolidated fiscal year stood at 66,321 million yen, down by 4,463 million
yen from the end of the previous consolidated fiscal year. This was mainly due to a decrease in retained earnings.
As a result, the equity ratio became 28.8%, a decrease of 0.8 points from the end of the previous consolidated fiscal year.
(ii) Cash flow
Cash and cash equivalents as of the end of second quarter of this consolidated fiscal year were 13,349 million yen, decreasedby 10,862 million yen from the end of the previous consolidated fiscal year.
(Cash Flows from Operating Activities)“Net cash used in operating activities” was 9,255 million yen, decreased by 4,168 million yen compared to the same period
last year due to the impact of the loss before income taxes.
(Cash Flows from Investing Activities)“Net cash used in investing activities” was 7,373 million yen, increased by 1,201 million yen compared to the same period
last year, due to the impact of payments of lease and guarantee deposits.
(Cash Flows form Financing Activities)“Net cash provided by financing activities,” was positive 5,772 million yen, decreased by 16,616 million yen compared to the6same period last year, due to the net increase/decrease in short-term borrowings.

(3) Explanation of Forecasts of Consolidated Results and Other Forward-Looking Information
Regarding the consolidated business forecast for the fiscal year ending March 31, 2022, due to the prolonged effects of the spreadof the COVID-19, the consolidated results for the first half of the current fiscal year were below the initial expectation. Currently,
priority measures to prevent the spread of the disease and the declarations of the state of emergency have been fully lifted, andwith the gradual ease of restrictions on activities, domestic demand is gradually recovering. However, since the full-scale
recovery has been delayed, the Company has revised the forecast for the full-year results announced on May 14, 2021.
For details, please refer to the "Notice of Revision of Earnings Forecast" released on November 9, 2021.
Also, please note that these forecasts are based on information available at the time of publication, and actual results may differ
from these forecasts due to various factors.

7

2. Quarterly Financial Statements and Major Notes(1) Quarterly Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Notes and accounts receivable - trade and contract
assetsReal estate for sale
Real estate for sale in process
Costs on uncompleted construction contracts
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible fixed assets
Investments and other assets
Investment securities
Guarantee deposits
Lease deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets

8

As of September 30, 2021

24,588
9,702

13,726--

9,353

15,959
1,670
513
9,562
-52
61,94424,482
5,096
126
7,197
-80
59,90253,40845,827
11,278
4,393
114,907
4,235

48,41445,662
7,868
4,301
106,247
3,450

4,499
16,48916,912
19,562-119
57,344
176,487600
239,032

4,525
17,144
17,025
21,748-11960,324
170,022551
230,476

(Unit: million yen)
As of March 31, 2021
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of bonds payable
Income taxes payable
Provision for bonuses
Provision for directors’ bonuses
Provision for warranties for completed construction
Other
Total current liabilities
Non-current liabilities
Bonds payable
Convertible bonds with share acquisition rights
Long-term loans payable
Provision for directors’ retirement benefits
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
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

9

As of September 30, 2021

4,667
12,702
5,280
1,764
714
37
3
24,677
49,8486,300
17,092
5,180
518
723
37
3
13,87743,73228,54030,14253,003
252
1,045
5,414
118,398
168,247

26,00030,12757,451
253
1,105
5,484
120,422
164,154

7,964
12,821
50,831-357
71,2597,964
12,821
46,364-358
66,791

55
-555
24
-474
70,784
239,032

72
-565
22
-470
66,321
230,476

(2) Quarterly Consolidated Income Statement and Quarterly Consolidated Statement of Comprehensive Income(Quarterly Consolidated Income Statement)(Six Months Ended September 30, 2021)

Net sales
Cost of sales
Gross profit (loss)
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Subsidy income
Compensation income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Expenses for measures for COVID-19
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on temporary closing, etc.
Loss on disaster
Loss on store closings
Other
Total extraordinary losses
Net income (loss) before taxes
Income taxes
Net income (loss)
Net income (loss) attributable to owners of parent

Six Months Ended
September 30, 2020
(From April 1, 2020
to September 30, 2020)
56,25052,137
4,113
8,599-4,486(Unit: million yen)
Six Months Ended
September 30, 2021
(From April 1, 2021
to September 30, 2021)
67,71363,7094,004
9,623-5,619

38
31
577
32
119
799

55
23
345
462
191
1,078

222
385
192
800
-4,486

290
142
257
689
-5,230

152
152

-

2,886
2,025
41
4,953
-9,287-1,431-7,856-7,856

29
110
13
154
-5,384-1,308-4,076-4,07610

(Quarterly consolidated statement of comprehensive income)(Six Months Ended September 30, 2021)

Net income (loss)
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(Breakdown)Comprehensive income attributable to owners ofparentSix Months Ended
September 30, 2020
(From April 1, 2020
to September 30, 2020)-7,856(Unit: million yen)
Six Months Ended
September 30, 2021
(From April 1, 2021
to September 30, 2021)-4,07656-14
4
46-7,81016-10-2
4-4,071-7,810-4,071

11

(3) Quarterly consolidated cash flow statement(Unit: million yen)
Six Months Ended
September 30, 2021
(From April 1, 2021
to September 30, 2021)

Six Months Ended
September 30, 2020
(From April 1, 2020
to September 30, 2020)
Cash flows from operating activities
Net income (loss) before taxes
Depreciation and amortization
Amortization of long-term prepaid expenses
Amortization of security deposits
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses
Subsidy income
Compensation income
Expenses for measures for COVID-19
Loss on temporary closing, etc.
Loss on disaster
Loss on store closings
Decrease (increase) in notes and account receivables trade
Decrease (increase) in accounts receivable - other
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payables trade
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in deposits received
Increase (decrease) in guarantee deposits received
Other
SubtotalInterest and dividends received
Interest paid
Income taxes refund
Income taxes paid
Proceeds from subsidy income
Compensation income received
Expenses for measures for COVID-19 paid
Loss on temporary closures, etc.
Loss on store closings
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments of loans receivableCollection of loans receivable
Payments of lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Other
Net cash provided by (used in) investing activities

12-9,287
2,578
176
156
-1,400
-69
222
-730
-32
385
2,886
13
2,025

-5,384
2,982
243
157
8
-78
290
-345
-462
142
29
110

-1,833347

448-1,781416-4,883

540

1,633

56
-3,398
505
-469
-164
-164
-2
-9,339
34
-209
0
-830
730
32
-385
-2,504-953-13,424-352-2,838-1,082
2,374
-811
-309
-235
-8,04720-268
2-1,518
345
462
-142
-110
-9,255-432
1,243-5,678
12
-127
-339
361
-450

-30
26
-5,259
2
-200
-502
146
-1,349

36

424

-561
10
-247
-6,172

-548
26
-109
-7,373

(Unit: million yen)
Six Months Ended
September 30, 2021
(From April 1, 2021
to September 30, 2021)

Six Months Ended
September 30, 2020
(From April 1, 2020
to September 30, 2020)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Redemption of bonds
Share buybacks
Cash dividends paid
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
Balance of cash and cash equivalents at the beginning ofcurrent period
Balance of cash and cash equivalents at the end of current
period13

18,047
10,100-2,190-2,641-1-895-31
22,3884,540
6,200-1,902-2,641
-1
-389
-34
5,772

-9

-5

2,782

-10,862

17,792

24,212

20,575

13,349(4) Notes on Quarterly Consolidated Financial Statements(Notes on the going concern assumption)
Not applicable(Notes concerning any notable changes in shareholders’ equity)
Not applicable(Application of special accounting procedures in the preparation of quarterly consolidated financial statements)(Calculation of tax expenses)
The Company calculates tax expenses by rationally assuming an effective tax rate after applying tax effect accounting to profit(loss) before income taxes for the consolidated fiscal year, including the first six months of the fiscal year, and multiplying
profit (loss) before income taxes for the first half of the fiscal year by the estimated effective tax rate. However, if the result of
calculation of tax expenses using the estimated effective tax rate is significantly unreasonable, the statutory effective tax rate isused.

(Changes in accounting policies)(Application of Accounting Standards for Revenue Recognition, etc.)
The Company has applied the “Accounting Standard for Revenue Recognition (ASBJ Statement No.29, March 31, 2020) andother standards from the beginning of the first quarter of this consolidated fiscal year. The Company has decided to recognize
revenue as the amount expected to be received in exchange for promised goods or services at the time the control of such
goods or services is transferred to the customer.
As a result, hotel courier sales, which were previously recorded on a gross basis, are now recorded on a net basis, i.e., theconsideration received from the customer less the consideration paid to the carrier. Additionally, the Company has changed its
accounting method for consignment sales of transportation tickets and concession merchandise, which are now recorded at the
net amount of the consideration received from the customer less the consideration paid to the consignor, rather than the grossamount previously recorded.
The Company has applied the transitional treatment prescribed in the proviso of Paragraph 84 of the Accounting Standard for
Revenue Recognition for the application of the Accounting Standard for Revenue Recognition, and the cumulative effect ofretroactive application of the new accounting policy prior to the beginning of the first quarter of this consolidated fiscal year
has been added to or deducted from retained earnings at the beginning of the first quarter, and the new accounting policy has
been applied from the relevant beginning balance.
As a result, net sales and cost of sales for the current consolidated fiscal year decreased by 245 million yen and 245 million
yen, respectively, as compared to the case where the previous accounting standards would have been applied. However, theimpact on operating loss is minor. This has no impact on the starting balance of retained earnings of the current fiscal year.
Due to the application of the Accounting Standard for Revenue Recognition, etc., “Notes and accounts receivable - trade,”which was included in “Current assets” in the consolidated balance sheet for the previous fiscal year, is now included in“Notes, accounts receivable - trade and contract assets” from the first quarter of the current fiscal year. In accordance with thetransitional treatment prescribed in Paragraph 89-2 of the Accounting Standard for Revenue Recognition, the Company has
not made any reclassification to the prior year's consolidated financial statements using this new classification.
(Application of accounting standards for calculation of fair value, etc.)
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019) andother standards from the beginning of the first quarter of this consolidated fiscal year. The Company will also apply the new
accounting policy prescribed in the Accounting Standard for Fair Value Measurement, etc. into the future in accordance withthe transitional treatment prescribed in Paragraph 19 of the Accounting Standard for Fair Value Measurement and Paragraph44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019). This would not give any
impact on the quarterly consolidated financial statements.

14

(Additional information)(Application of Consolidated Taxation System)
The Company and its domestic consolidated subsidiaries have adopted the Consolidated Taxation System from the firstquarter of the current consolidated fiscal year.
(Application of tax effect accounting for the transition from the Consolidated Taxation System to our Group Tax Sharing
System)With respect to items subject to the review of the Non-Consolidated Taxation System conducted to coincide with transition to
our Group Tax Sharing System, which was created under the Act on Partial Revision of the Income Tax Act, etc. (Act No. 8 of2020), the Company and its domestic consolidated subsidiaries have not applied the provisions of Paragraph 44 of the
Implementation Guidance on Tax Effect Accounting (ASBJ Guidance No. 28, February 16, 2018) in accordance with thetreatment set out in Paragraph 3 of Practical Solution on the Treatment of Tax Effect Accounting for the Transition from theConsolidated Taxation System to our Group Tax Sharing System (PITF No.39, March 31, 2020) and the amounts of deferred
tax liabilities and deferred tax assets are based on the provisions of tax laws before the revision.

(Segment Information etc.)[Segment Information]
I For the six months ended September 30, 2020 (April 1, 2020 – September 30, 2020)
1. Information on net sales, income or loss by each reporting segment
Reporting segment

Dormitory

Hotel

Comprehensive
Building
Management

FoodService

Other
Developme
nt

Total

Note 1

Total(Unit: million yen)Amountrecorded on
Adjustment consolidated
amountquarterly
Note 2incomestatement
Note 3

Net sales
Net Sales to External
Customers

23,287

18,376

3,475

273

3,405

48,818

7,431

56,250-56,250Inter-segmental sales
or transfers

170

39

3,845

1,972

4,387

10,416245

10,661-10,661-

Total

23,457

18,416

7,321

2,246

7,793

59,235

7,677

66,912-10,661

56,250

Segment profit(loss)

2,743-6,748

160

-16

286

-3,575497-3,078-1,407-4,486

Notes: 1. The Other Business segment consists of the following businesses which are not included in the other reporting
segments: the Senior Life Business (management and operation of senior residences), the Public Kyoritsu Partnership(PKP) Business (services provided under contract to local governments), support business for people who live alone,
the insurance agency business, comprehensive human-resource services, the financial business, the administrative
outsourcing business, and other additional businesses.
2. Adjustment of segment profit (loss) of -1,407 million yen includes the amount of elimination of inter-segment
transactions of -241 million yen and corporate expenses of -1,166 million yen that are not allocated to each reportablesegment. Corporate expenses mainly consist of expenses related to the Accounting Department and otheradministrative departments of the head office.
3. Segment profit (loss) is adjusted with operating loss on the quarterly consolidated statement of income.
2. Information on impairment loss on non-current assets or goodwill, etc. by reporting segment
Not applicable15II For the six months ended September 30, 2021 (April 1, 2021 - September 30, 2021)
1. Information on net sales, income or loss by each reporting segment
Reporting segment

Dormitory

Hotel

Comprehensive
Building
Management

FoodService

Other
Developme
nt

Total

Note 1

Total(Unit: million yen)Amountrecorded on
Adjustment consolidated
amountquarterly
Note 2incomestatement
Note 3

Net sales
Net Sales to External
Customers

23,112

26,648

3,289

312

7,022

60,385

7,327

67,713-67,713

Inter-segmental sales
or transfers

162

49

3,241

2,791

2,079

8,323

240

8,563

-8,563-

Total

23,274

26,697

6,531

3,103

9,101

68,708

7,568

76,277-8,56367,713

Segment profit(loss)

2,509-7,601

49

-88

633

-4,496293-4,203-1,416-5,619Notes: 1. The Other Business segment consists of the following businesses which are not included in the other reporting
segments: the Senior Life Business (management and operation of senior residences), the Public Kyoritsu Partnership(PKP) Business (services provided under contract to local governments), support business for people who live alone,
the insurance agency business, comprehensive human-resource services, the financial business, the administrative
outsourcing business, and other additional businesses.
2. Adjustment of segment profit (loss) of -1,416 million yen includes the amount of elimination of inter-segment
transactions of 47 million yen and corporate expenses of -1,463 million yen that are not allocated to each reportablesegment. Corporate expenses mainly consist of expenses related to the Accounting Department and otheradministrative departments of the head office.
3. Segment profit (loss) is adjusted with operating loss on the quarterly consolidated statement of income.
2. Information on change in reporting segment, etc.
(Application of Accounting Standards for Revenue Recognition, etc.)
As stated in “Changes in accounting policies”, the Company has applied the Accounting Standard for Revenue
Recognition and other standards from the beginning of the first quarter of the current consolidated fiscal year, and changed
the accounting method related to revenue recognition. The Company also has changed the calculation method of profit orloss of business segment accordingly.
Due to these changes, net sales and cost of sales of the Hotel Business during the first six months of the consolidated fiscal
year have decreased by 106 million yen and 106 million yen respectively, and net sales and cost of sales of the Other
Business decreased by 138 million yen and 138 million yen respectively, as compared to the case where the previous
accounting standards would have been applied. However, the impact on the segment loss is minor.
3. Information on impairment loss of non-current assets or goodwill, etc. by reporting segment
Not applicable16