Consolidated Financial Statements of
JALUX Inc. and Consolidated Subsidiaries
JALUX Inc.
Year ended March 31, 2022with Independent Auditor’s Report

KPMG AZSA LLC
December 2022

Independent auditor’s report
To the Board of Directors of JALUX Inc.:
OpinionWe have audited the consolidated financial statements, which comprise the consolidated balance sheet,the consolidated statement of income, the consolidated statement of changes in net assets and therelated notes of JALUX Inc. (“the Company”) and its consolidated subsidiaries (collectively referred toas “the Group”), as at March 31, 2022 and for the year from April 1, 2021 to March 31, 2022 inaccordance with Article 444-4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position and the results of operations of the Group for the period,
for which the consolidated financial statements were prepared, in accordance with accounting
principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Groupin accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Emphasis of Matter
As described in Note 14, “Significant Subsequent Events,” the Company made a resolution on thereverse stock split at the Extraordinary Meeting of Stockholders held on May 13, 2022. Due to thisresolution, the shares issued by the Company fell under the delisting criteria of the Tokyo Stock
Exchange and were scheduled to be delisted as of June 2, 2022.
This matter does not affect our opinion.
Other Information
The other information comprises the business report and its supplementary schedules. Management is
responsible for the preparation and presentation of the other information. Corporate auditors and theboard of corporate auditors are responsible for overseeing the directors’ performance of their duties
with regard to the design, implementation and maintenance of the reporting process for the otherinformation.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors
for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with accounting principles generally accepted in Japan.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties with regard to the design, implementation and maintenance of the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with auditing standards generally accepted in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.

Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, while the objective of theaudit is not to express an opinion on the effectiveness of the Group’s internal
control.



Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude that a material uncertainty

exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.


Evaluate whether the presentation and disclosures in the consolidated financial
statements are in accordance with accounting standards generally accepted in Japan,
the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of
the entities or business activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervisionand performance of the group audit. We remain solely responsible for our audit
opinion.

We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.

Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2022 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 6 to the consolidated financial statements.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of
the Certified Public Accountants Act of Japan.
Notes to the Reader of Independent Auditor’s Report
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report
as required by the Article 444-4 of the Companies Act.

JALUX Inc. and Consolidated Subsidiaries
Consolidated Balance Sheet
March 31,2022
2022
(Thousands of (Thousands ofyen)
U.S. dollars)(Note 6)
AssetsCurrent assets:
Cash and time deposits
Trade notes
Accounts receivable
Inventories
Accounts receivable-other
Advances paid
OthersAllowance for doubtful accounts
Total current assets
Property and equipment:
Buildings and structures
Machinery and vehicles
Land
Construction in process
OthersProperty and equipment, net¥ 6,730,313
1,333,431
10,089,787
7,026,093
3,337,170
10,105,578
2,055,448(91,167)
40,586,657$ 55,167
10,93082,70357,591
27,354
82,833
16,848(747)
332,678

2,374,576
1,104,251844,885
89,987
310,235
4,723,936

19,464
9,051
6,925
738
2,543
38,721

477,482
44,880522,362

3,914
368
4,282

2,722,836
9,892
2,188,648

22,31881
17,940Intangible assets:
Software
OthersTotal intangible assets
Investments and other assets:
Investment securities
Long-term loans receivable
Long-term guarantee deposit1Deferred tax assets
Asset for retirement benefits
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

1,178,356
296,484
122,265(56,054)
6,462,431
11,708,731¥ 52,295,389

2

9,659
2,430
1,002
(459)
52,971
95,973$ 428,651

March 31,
2022
2022
(Thousands of (Thousands ofyen)
U.S. dollars)(Note 6)
Liabilities and net assets
Current liabilities:
Trade notes and accounts payable
Short-term borrowings and current portion of long-term
debtCommercial papers
Accrued income taxes
Accrued expenses
OthersTotal current liabilities¥ 6,487,877$ 53,179

4,274,830
2,598,911
131,590
3,820,731
3,105,548
20,419,488

35,04021,303
1,079
31,31725,455
167,373

Long-term liabilities:
Long-term debt
Liability for retirement benefits
Deferred tax liabilities
OthersTotal long-term liabilities
Total liabilities

6,955,643
25,387
83,929504,596
7,569,557
27,989,046

57,013
208
688
4,136
62,046229,418

Net assets:
Shareholders’ equity:
Common stock
Capital surplus
Retained earnings
Common stock in treasury
Total shareholders’ equity

2,558,550
696,091
20,327,061(131,751)
23,449,951

20,972
5,706
166,615(1,080)192,21353,650138,099(414,572)
66,152(156,670)

440
1,132
(3,398)542(1,284)

1,013,061
24,306,342¥ 52,295,389

8,304
199,232$ 428,651

Accumulated other comprehensive income:Net unrealized gain on other securities, net of taxes
Deferred gain or loss on hedges, net of taxes
Translation adjustments
Retirement benefits liability adjustments
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

3

JALUX Inc. and Consolidated Subsidiaries
Consolidated Statement of Income
Year ended March 31,
2022
2022
(Thousands of(Thousands ofyen)
U.S. dollars)(Note 6)
Operating revenues
Operating expenses:
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating loss
Non-operating income :Interest income
Dividend income
Foreign exchange gain
Subsidy income
Compensation income
OthersTotal non-operating income
Non-operating expenses :Interest expense
Equity in earnings of affiliates
Commission fee
OthersTotal non-operating expenses
Extraordinary profit :Gain on sales of fixed assets
Gain on sale of investment securities
Gain on sales of shares of subsidiaries and affiliates

4¥ 45,644,942$374,139

30,317,419
15,327,523
16,026,476(698,953)

248,503
125,635
131,365(5,729)1,787
16,86937,528419,934
61,34953,558591,026

15
138
308
3,442
503
439
4,844

(137,451)(39,361)(17,399)(11,909)(206,122)(1,127)
(333)
(143)
(98)
(1,690)504
11,675
11,99949698

Others
Total extraordinary profit
Extraordinary loss:
Loss on disposal of fixed assets
Impairment losses on fixed assets
Loss due to temporary store closures
Loss on valuation of investment securities
OthersTotal extraordinary loss
Net loss before income taxes
Income taxes:
Current
Deferred
Net loss

51
24,232

0
199(12,506)(8,386)(174,485)(1,290)(20,345)(217,012)(506,830)

(103)
(69)
(1,430)(11)(167)(1,779)(4,154)74,302(7,001)
67,301(574,131)

609
(57)
552
(4,706)(203,496)¥ (370,635)(1,668)$ (3,038)

Net loss attributable to:Non-controlling interests
Owners of the Company

5

JALUX Inc. and Consolidated Subsidiaries
Consolidated Statement of Changes in Net Assets(Thousands of yen)

Common stock
Balance at March 31, 2021
Cumulative effect ofchange in accounting
policyRestated balance at March
31, 2021(reflecting change inaccounting policies)
Dividends paid
Net loss for the year ended
March 31, 2022
Purchase of common
treasury stock
Disposal of treasury stock
Change in scope of equity
method¥ 2,558,550

Capital surplus¥ 688,723

Retained earnings

Common stock intreasury

Total shareholders’equity¥ 20,718,198¥ (135,376)¥ 23,830,095(20,501)¥ 2,558,550¥ 688,723(20,501)¥ 20,697,696¥ (135,376)(370,635)¥ 23,809,593(370,635)

7,368(1,644)(1,644)

4,969

12,337300

300¥ (131,751)¥ 23,449,951

OthersBalance at March 31, 2022

¥ 2,558,550¥ 696,091¥ 20,327,061(Thousands of yen)
Net unrealized
holding
gain (loss) on othersecurities,
net of taxes
Balance at March 31, 2021
Cumulative effect ofchange in accounting
policyRestated balance at March
31, 2021(reflecting change inaccounting policies)
Dividends paid
Net loss for the year ended
March 31, 2022
Purchase of common
treasury stock
Disposal of treasury
stock
Change in scope ofequity method
OthersBalance at March 31, 2022

¥ 15,629

Deferred gainor losson hedges,
net of taxes¥ 95,776

Translation
adjustments

Retirement benefits
liability
adjustments

Accumulated
othercomprehensive
income:Noncontrolling interests¥ 63,167¥ (364,629)¥ 1,220,043¥ (539,203)

Total
net assets¥ 24,685,509(20,501)¥ 15,629¥ 95,776¥ (539,203)¥ 63,167¥ (364,629)¥ 1,220,043¥ 24,665,007－(370,635)(1,644)
12,337

922

922

1,222

37,09742,323

124,630

2,984

207,036(206,982)

54¥ 53,650¥ 138,099¥ (414,572)¥ 66,152¥ (156,670)¥ 1,013,061¥ 24,306,342

6

(Thousands of U.S. dollars) (Note 6)

Common stock
Balance at March 31, 2021
Cumulative effect ofchange in accounting
policyRestated balance at March
31, 2021(reflecting change inaccounting policies)
Dividends paid
Net loss for the year ended
March 31, 2022
Purchase of common
treasury stock
Disposal of treasury stock
Change in scope of equity
methodCapital surplus$ 20,972$ 5,645

Retained earnings

Common stock intreasury

Total shareholders’equity$ 169,821$ (1,110)¥195,329(168)$ 20,972$ 5,645(168)$ 169,653$ (1,110)¥ 195,161(3,038)(3,038)

60

(13)

(13)

41

101

2

2

$ (1,080)¥ 192,213

OthersBalance at March 31, 2022

$ 20,972$ 5,706$ 166,615(Thousands of U.S. dollars) (Note 6)
Net unrealized
holding
gain (loss) on othersecurities,
net of taxes
Balance at March 31, 2021
Cumulative effect ofchange in accounting
policyRestated balance at March
31, 2021(reflecting change inaccounting policies)
Dividends paid
Net loss for the year ended
March 31, 2022
Purchase of common
treasury stock
Disposal of treasury
stock
Change in scope ofequity method
OthersBalance at March 31, 2022

$ 128

Deferred gainor losson hedges,
net of taxes$ 785Translation
adjustments

Retirement benefits
liability
adjustments

Accumulated
othercomprehensive
income:Noncontrolling interests$ 518¥ (2,989)$ 10,000$ (4,420)

Total
net assets$ 202,340
(168)

$ 128

$ 785

$ (4,420)$ 518¥ (2,989)$ 10,000$ 202,172－(3,038)
(13)
101

8

8

10

304

347

1,022

24

1,697

(1,697)0¥ 53,650¥ 138,099¥ (414,572)¥ 66,152¥ (1,284)$ 8,304$ 199,232

7

JALUX Inc. and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2022

1.

Fundamental and Important Matters for the preparation of Consolidated
Financial Statements(1) Matters related to Scope of Consolidation① Consolidated Subsidiaries
a. Number of Consolidated Subsidiaries
b. Name of Consolidated Subsidiaries

20 companies
JALUX AMERICAS, Inc.
JALUX ASIA Ltd.
JAL-DFS Co., Ltd.
JALUX Airport Inc.
JALUX SHANGHAI Co., Ltd.
JALUX ASIA SERVICE Ltd.
JALUX ASIA RECRUITMENT Ltd.
JALUX Insurance and Service Inc.
JALUX Trust Inc.
Japan Airport Delica Inc.
JALUX Fresh Foods Inc.
JRE DEVELOPMENT Co., Ltd.
AERO ASSET Co., Ltd.
B SKY Co., Ltd.
EEZ CONTINENTAL Co., Ltd.
JALUX STYLE Inc.
JALUX SINGAPORE PTE. LTD.
J VALUE CO., LTD.
JALUX AMZ DUTY FREE CO., LTD.
JALUX CANADA, INC.

② Unconsolidated Subsidiaries
a. Name of Unconsolidated Subsidiariesb.

SKYLUX73NJJALUX V LOTUS Co., Ltd.
Other 41 companies
Reason for Exclusion from Scope of Consolidation
Non-consolidated subsidiaries are all smallin size, and their total assets, sales, net
income/loss
andretainedearnings(corresponding to the Company's equity
interest), etc., of the unconsolidated
subsidiaries are not material to theconsolidated financial statements.

8

1.

Fundamental and Important Matters for the preparation of Consolidated
Financial Statements (Continued)(2) Matters related to the Application of Equity Method① Non-Consolidated Subsidiaries and Affiliates applied for the Equity Method
a. Number of non-consolidated subsidiaries or affiliates applied for the equity method
5 companies
b. Name of non-consolidated subsidiaries or affiliates applied for the equity method
San-ei Maintenance CO., LTD.
LAO JAPAN AIRPORT TERMINALSERVICES Co., Ltd.
MC-Jalux Airport Services Co., Ltd.
JALUX TASECO DUTY FREE Co., LTD.
J.SWEETS STORE PARTNERSHIP② Non-Consolidated Subsidiaries and Affiliates not applied for the Equity Method
a. Name of principal companies
Official Filing Company
SKYLUX73NJ, Inc
JALUX V LOTUS Co., Ltd.
Other 41 companies
b. Reason for not applying the Equity Method
Net income/loss and retained earnings(corresponding to the Company's equity
interest) of each company are not material tothe consolidated financial statements andhave a minimal effect on the consolidated
financial statements.
③ Special Notes on Procedures for Application of the Equity Method
For companies applied for the equity method whose fiscal years differ from theconsolidated fiscal year, the financial statements for the fiscal year of each company areused.
(3) Matters related to Change in Scope of Consolidation and Application of Equity Method① Change in scope of Application of Equity Method
Tokyo Koku Cleaning Inc. was excluded from the scope of application of the equity
method due to the sale of all shares.
(4) Matters related to Fiscal Year of Consolidated Subsidiaries
The fiscal year end of JALUX AMERICAS, Inc., JALUX ASIA Ltd., JALUXSHANGHAI Co., Ltd., JALUX ASIA SERVICE Ltd., JALUX ASIA RECRUITMENT
Ltd., JRE DEVELOPMENT Co., Ltd., AERO ASSET Co., Ltd., B SKY Co., Ltd., EEZCONTINENTAL Co., Ltd. , JALUX SINGAPORE PTE. LTD., J VALUE CO., LTD.,JALUX AMZ DUTY FREE CO., LTD. and JALUX CANADA,INC. is December 31.
In preparing the consolidated financial statements, the financial statements of thesecompanies as of December 31 are used, and adjustments necessary for consolidation are
made for significant transactions that occurred between December 31 and theconsolidated balance sheet date.

91.

Fundamental and Important Matters for the preparation of Consolidated
Financial Statements (Continued)(5) Matters related to Accounting Policies① Evaluation Criteria and Methods for Significant Assets
a. Other securities Financial instruments that have market prices.
Market value method (valuation gains andlosses are accounted for as a component of
net assets, with cost of sales determined
mainly by the weighted average method).
 Financial instruments that do not have market prices.
Mainly stated at cost determined by theweighted average method.
b. Derivatives
Market value method
c. Inventories
 Goods
The Company's inventories are stated at cost
determined by the moving-average method(the carrying value on the balance sheet iswritten down to reflect the effect of lower
profit margins) and consolidated subsidiaries
are mainly stated at cost determined by thegross average method (the carrying value on
the balance sheet is written down to reflect
the effect of lower profit margins).
 Real estate for saleStated at cost determined by the specificidentification method (the carrying value on
the balance sheet is written down to reflect
the effect of lower profit margins).
Depreciation of leased assets is computed in
the same manner as for tangible fixed assets.

10

1.

Fundamental and Important Matters for the preparation of Consolidated
Financial Statements (Continued)② Depreciation and Amortization Methods for Significant Depreciable Assets
a. Tangible fixed assets (excluding lease assets)
The Company and its domestic consolidated
subsidiaries mainly use the straight-line
method (for buildings and structures) and thedeclining-balance method (for other tangible
fixed assets). Overseas consolidated
subsidiaries mainly use the straight-line
method.
The main useful lives are as follows:
Buildings and structures
8~47 years
Machinery, equipment and vehicles
4~10 years
b. Intangible fixed assets (excluding lease assets)
The straight-line method
Software (for internal use) is amortized by
the straight-line method over the estimateduseful life (5 years).
c. Lease Assets
The straight-line method is used and thelease period is deemed as the useful life of
the asset and the residual value is set as zero.
③ Basis for Significant Allowancea. Allowance for doubtful accountsb.

In order to allowance for a bad debt, theallowance for doubtful accounts on general
receivables is provided based on thehistorical rate of losses on receivables. The
allowance for doubtful accounts on specificreceivables is provided based on the estimateof the unrecoverable amounts.
Allowance for bonuses to directors and corporate auditors
To provide for the payment of bonuses todirectors and executive officers, theCompany accrues an estimated amount ofbonuses to be paid in the current
consolidated fiscal year.

11

1.

Fundamental and Important Matters for the preparation of Consolidated
Financial Statements (Continued)④ Method of Accounting for Retirement Benefits
a. Method of attributing estimated retirement benefits to periods of service
In calculating the retirement benefit
obligation, the estimated amount of
retirement benefits is attributed to the period
up to the end of the current consolidated
fiscal year based on the benefit calculation
method.
b. Method of amortizing actuarial gains and losses
Actuarial gains and losses are amortized by
the straight-line method over a period of 5
years from the following consolidated fiscal
year.
c. Adoption of the simplified method for smaller companies
Certain consolidated subsidiaries calculateliabilities for retirement benefits andretirement benefit expenses using asimplified method in which the amountpayable at the end of the fiscal year for
retirement benefits is used as the retirement
benefit obligation.

12

1.

Fundamental and Important Matters for the preparation of Consolidated
Financial Statements (Continued)⑤ Significant Hedge Accounting Methods
a. Hedge accounting method
Deferred hedge accounting is mainly applied.
receivables and payables denominated inforeign currencies to which forward foreignexchange contracts are attached are applied
for the allocation, if the receivables andpayables meet the requirements for the
allocation method. Interest rate swaps that
qualify for hedge accounting and meet
specific matching criteria are accounted forby the special treatment.
b.

Hedging instruments and hedged items and hedging policy
For receivables and payables denominated inforeign currencies, the Company enters into
forward exchange contracts to avoid theeffects of future fluctuations in exchange
rates on the amounts received and paid. The
Company also enters into interest rate swaps
to hedge the impact of future interest rate
fluctuations on interest payments on
borrowings.

c.

Methods of evaluating the effectiveness of hedging
Forward exchange contract transactions areentered into by the Finance Department, thesupervising department, after approval inaccordance with the basic policy andestablished authority. The status of "pretesting" and "post-testing" of all derivativetransactions is reported to the director in
charge and each relevant department in atimely manner.

⑥ Other Important Matters for the Preparation of Consolidated Financial Statements
a. Basis for recording significant revenues and expenses
When control of the promised goods orservices is transferred to the customer, theCompany recognizes revenue in the amount
expected to be received in exchange forthose goods or services. In addition, when
the Group is involved in the sale of goods asan agent, revenue is recognized on a net
basis. The main performance obligations in
the main business lines and the normal time
for recognizing revenue are described in "Note 12. Revenue Recognition".
132. Notes on Changes in Accounting Policies(Application of Accounting Standards for Revenue Recognition)
For Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31,2020) effected from the beginning of the current consolidated fiscal year, revenue isrecognized at the amount expected to be received in exchange for promised goods orservices when control of the promised goods or services is transferred to the customer. The
main changes resulting from this are as follows.
(1) Revenue recognition for agency transactions
For some transactions, the Company previously recognized the gross amount ofconsideration received from customers as revenue, but the Company did not control the
goods or services transferred to customers. Since the Company only provides services forarranging these, the Company recognizes revenue as the net amount deduct the amount
paid to suppliers from the amount received from customers for transactions that theCompany determine to be agency transactions.

142. Notes on Changes in Accounting Policies (continued)(2) Revenue recognition for transactions that require a period of time for acceptance andinspection by the customer
Previously, revenue was mainly recognized at the time of product shipment. For
transactions that require a period of time for acceptance and inspection by the customer, theCompany determines that the performance obligation has been satisfied when acceptanceand inspection by the customer is complete and recognize revenue.
Regarding the application of “Accounting Standard for Revenue Recognition”, etc., inreference to transitional measures stated in the provision to Paragraph 84 of the AccountingStandard for Revenue Recognition, retained earnings at the beginning of consolidated fiscal
year adjust by cumulative impact when the new accounting policy apply before thebeginning of the consolidated fiscal year. However, the new accounting policy has not been
applied retrospectively to contracts for which almost all amounts of revenue have beenrecognized in accordance with the previous treatment prior to the beginning of theconsolidated fiscal year by applying the method stated in Paragraph 86 of the Revenue
Recognition Accounting Standard.
In addition, the Company has applied the method stated in Paragraph 86 (1) of the
Accounting Standard for Revenue Recognition to account for contract modifications madeprior to the beginning of the consolidated fiscal year based on the contract terms afterreflecting all contract modifications, and the cumulative effect of such modifications has
been added to or subtracted from retained earnings at the beginning of the consolidated
fiscal year.
As a result, net sales decreased by ¥50,700,646 thousand ($415,579 thousand), cost of sales
decreased by ¥50,564,136 thousand ($414,460 thousand), selling, general andadministrative expenses decreased by ¥90,460 thousand ($741 thousand), and operating
loss, extraordinary loss, and loss before income taxes and minority interests respectively
increased by ¥46,049 thousand ($377 thousand)for the current consolidated fiscal year. In
addition, the balance of retained earnings at the beginning of the current consolidated fiscal
year decreased by ¥20,501 thousand ($168 thousand). Due to the application of the revenue
recognition standard, "Inventories" related to agent transactions, which were included in"Current assets" in the consolidated balance sheet in the previous consolidated fiscal year,
are included in "Advances paid" in the current consolidated fiscal year. The amountincluded in "Advances paid" as of the end of the current consolidated fiscal year is¥9,905,596 thousand ($81,193 thousand). The impact on per share information isimmaterial.
(Application of Accounting Standard for Calculation of Fair Value)
The Company applies the "Accounting Standards for Calculation of Fair Value" (Corporate
Accounting Standard No. 30, July 4, 2019; hereinafter referred to as the "AccountingStandards for Calculation of Fair Value"), etc. from the beginning of the current consolidated
fiscal year, and apply the new accounting policy stipulated in the Accounting Standards for
Calculation of Fair Value, etc. in the future in accordance with the transitional treatment
stipulated in Section 19 of the Accounting Standards for Calculation of Fair Value andSection 44-2 of the “Accounting Standards for Financial Instruments” (Corporate
Accounting Standard No. 10, July 4, 2019). There is no impact on the financial statements
for the current consolidated fiscal year.
15

3. Change in Presentation Method(Consolidated Balance Sheet)
Advances paid" ¥164,255 thousand ($1,346 thousand) in the previous consolidated fiscal
year ", which was included in "Other current assets" under "Current assets", is presented asa separate item in the current consolidated fiscal year due to its increased the amount ofmateriality.
4.

Significant Accounting Estimates(1) Recoverability of deferred tax assets① JALUX Airport Inc.

Estimate
JALUX Airport Inc., which is included in the Retail business segment, has tax loss carryforwards
which is assessed to be recoverable within the expiration period based on business plans of theconsolidated taxpayer. As a result, deferred tax assets related to the tax loss carryforwards wererecorded.
The amount recorded in the consolidated financial statements for the current consolidated fiscal
year

Deferred tax assets
¥686,096 thousand ($5,624 thousand)

Other information that contributes to understanding the details of the significant accounting
estimates for the identified items

A deferred tax asset is recognized for the carryforward of unused tax losses and deductible temporary
differences to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences can be utilized. The Company and some of its domestic
consolidated subsidiaries have adopted the consolidated tax payment system. Deferred tax assets
related to corporate and local income taxes are evaluated based on a reasonable estimate of future
consolidated income to determine the recoverability.
Business plans used to assess the recoverability of JALUX Airport Inc.’s deferred tax assets wereconsidered with the increase in domestic and international passenger numbers due to containment of
COVID-19 as the main assumption.
Regarding impacts on business environment of the Company and its consolidated subsidiaries (the“Group”) due to the spread of COVID-19, the number of domestic passengers is assumed to recoverfrom the second quarter of the following fiscal year, while continuing to be affected by COVID-19
for the full fiscal year.
On the other hand, the number of international passengers is assumed to be gradually recovering fromthe second half of the following fiscal year, though the environment will remain severe.
There is high uncertainty on these major assumptions due to the trend of spread of COVID-19 andpossibility of a significant impact on future taxable income estimates.

16

4.

Significant Accounting Estimates (continued)② JAL-DFS Inc.

Estimate
JAL-DFS Inc., which is included in the Retail business segment, has tax loss carryforwards which isassessed to be recoverable within the expiration period based on business plans of JAL-DFS Inc. As
a result, deferred tax assets related to the tax loss carryforwards were recorded.
The amount recorded in the consolidated financial statements for the current consolidated fiscal
year

Deferred tax assets
¥239,380 thousand ($1,962 thousand)

Other information that contributes to understanding the details of the significant accounting
estimates for the identified items

A deferred tax asset is recognized for the carryforward of unused tax losses and deductible temporary
differences to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences can be utilized.
Business plans used to assess the recoverability of JAL-DFS Inc.’s deferred tax assets wereconsidered with the increase in international passenger numbers due to containment of COVID-19 as
the main assumption.
Regarding impacts on business environment of the Company and its consolidated subsidiaries (the“Group”) due to the spread of COVID-19, the number of international passengers is assumed to be
gradually recovering from the second half of the following fiscal year, but the environment willremain severe.
There is high uncertainty on these major assumptions due to the trend of spread of COVID-19 andpossibility of a significant impact on future taxable income estimates.

17

4.

Significant Accounting Estimates (continued)(2) Necessity of recognizing impairment losses on fixed assets① Airport shops

Estimate
Regarding the airport shop business, which is included in the Retail business segment, due to thecontinuous operating losses at some airports, the Company determined that there were indications of
impairment and reviewed the necessity of recognizing impairment losses.As a result of the review,for some airports, it was determined that the undiscounted future cash flows would be less than the
carrying value of fixed assets of ¥15,544 thousand ($127 thousand) (property and equipment: ¥14,911
thousand ($122 thousand); intangible assets: ¥633 thousand ($5 thousand)); therefore, impairment
losses were recorded. The carrying value of fixed assets for the airport shop business after recording
the impairment losses is ¥682,113 thousand ($5,591 thousand) (property and equipment: ¥679,412
thousand ($5,569 thousand); intangible assets: ¥2,700 thousand ($22 thousand)).


The amount recorded in the consolidated financial statements for the current consolidated fiscal
year

Impairment losses on fixed assets
¥8,386 thousand ($69 thousand)

Other information that contributes to understanding the details of the significant accounting
estimates for the identified items

The Group bases its grouping for assessing the impairment losses on fixed assets on thesmallest identifiable groups of assets which generate cash inflows and which are largely
independent of the cash inflows from other assets or groups of assets.
The airport shop business is categorized based on the airport as a basic unit.
If there is any indication of impairment, the Company determines the necessity ofrecognizing impairment losses by comparing the total undiscounted future cash flows fromthe asset groups with their carrying value.
As a result of the determination, if the total amount of undiscounted future cash flows is lessthan the carrying value and it is necessary to recognize impairment losses, the carrying value
is reduced to the recoverable value (the higher of the net selling price and its value in use).
At the same time, the reduction of carrying value is recognized as impairment losses.
Estimates of future cash flows for the airport shop business are based on future businessplans and considered with the increase in domestic and international passenger numbers due
to containment of COVID-19 as the main assumption.
Regarding impacts on the Group's business environment due to the spread of COVID-19, thenumber of domestic passengers is assumed to recover from the second quarter of thefollowing fiscal year, while continuing to be affected by COVID-19 for the full fiscal year.
On the other hand, the number of international passengers is assumed to be gradually
recovering from the second half of the following fiscal year, though the environment willremain severe.
There is high uncertainty on these major assumptions due to the trend of spread of COVID19 and possibility of a significant impact on future cash flow estimates.

18

4.

Significant Accounting Estimates (continued)② The overseas serviced apartment

Estimate
Regarding the overseas serviced apartment, which is included in the Life service business segment,
due to the continuous operating losses, the Company determined that there were indications of
impairment and reviewed the necessity of recognizing impairment losses.
As a result of the review, it was determined that the undiscounted future cash flows would be higher
than the carrying value of fixed assets of ¥998,066 thousand ($8,181 thousand) (property andequipment: ¥998,066 thousand ($8,181 thousand); therefore, no impairment loss was recorded.


Other information that contributes to understanding the details of the significant accounting
estimates for the identified items

The Group bases its grouping for assessing the impairment losses on fixed assets on the smallest
identifiable groups of assets which generate cash inflows and which are largely independent of the
cash inflows from other assets or groups of assets.
The overseas serviced apartment business is categorized based on the business as a basic unit.
If there is any indication of impairment, the Company determines the necessity of recognizing
impairment losses by comparing the total undiscounted future cash flows from the asset group with
its carrying value.
As a result of the determination, if the total amount of undiscounted future cash flows is less than the
carrying value and it is necessary to recognize impairment losses, the carrying value is reduced to therecoverable value (the higher of the net selling price and its value in use).
At the same time, the reduction of carrying value is recognized as impairment losses.
Estimates of future cash flows for the overseas serviced apartment business are based on futurebusiness plans and considered with the future operation rate (occupancy rate) as the main assumption.
There is high uncertainty on these major assumptions due to the cancellation, trends of competitors,
striking deterioration of market environment, etc. and possibility of a significant impact on future
cash flow estimates.

19

5.

Additional Information(Adoption of the consolidated taxation system)
The Group has adopted the consolidated tax payment system from the current consolidated
fiscal year.
(Adoption of tax effect accounting associated with transition from consolidated taxation
system to group tax sharing system)
The Group will transition from the consolidated tax payment system to the group tax sharing
system from following consolidated fiscal year. However, with regards to the transition to
the group tax sharing system established in the “Act for Partial Amendment of the Income
Tax Act” (Act No. 8 of 2020), and items for which the single tax payment system has beenrevised in line with the transition to the group tax sharing system, according to the Paragraph
3 of “Practical Solution on the Treatment of Tax Effect Accounting for the Transition fromthe Consolidated Taxation System to the Group Tax Sharing System” (PITF No. 39, March
31, 2020), the Group did not follow the provisions of Paragraph 44 of“Implementation
Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, February 16,2018), but
applied the provisions of the tax law before the revision when calculating the amount ofdeferred tax assets and deferred tax liabilities.
From the beginning of the next consolidated fiscal year, The Company plans to apply the"Practical Solution on the Accounting and Disclosure under the Group Tax Sharing System" (PITF No. 42, August 12, 2021).
6. U.S. Dollar Amounts
Amounts in U.S. dollars are included solely for the convenience of the reader. The rate of¥122.00 = $1.00, the approximate exchange rate prevailing on March 31, 2022, has beenused. The inclusion of such amounts is not intended to imply that yen has been or could bereadily converted, realized or settled in U.S. dollars at that or any other rate.

20

7.

Notes on Consolidated Balance Sheetsa. Accumulated depreciation of certain property and equipment¥ 4,114,600 thousand ($33,726 thousand)b.

Revenue recognition matters
Amount of contract liabilities included in other current liabilities¥ 904,883 thousand ($7,417 thousand)c.

The Company has entered into loan commitment agreements with banks in order tosource funds for its smooth operations.

The outstanding balances of loan commitments as of March 31, 2022 as follows:(Thousands of yen)March 31,2022
2022
(Thousands (Thousands ofof yen)U.S. dollars)

Total commitment available¥8,700,000$71,311

Less amount utilized
Balance available–¥8,700,000–$71,31121

8.

Notes on Consolidated Statements of Income

a. Revenue from contracts with customers
The Company does not disaggregate revenues from contracts with customers and othersources of revenue. The amount of revenue from contracts with customers is presented
in “1. Information on disaggregation of revenue” under [Note 12 Revenue Recognition]of Notes to the Consolidated Financial Statements.
b. Impairment of Fixed Assets
The Group bases its grouping for assessing the impairment losses on fixed assets on thesmallest identifiable groups of assets which generate cash inflows and which are largely
independent of the cash inflows and which are largely independent of the cash inflows
from other assets or groups of assets.
Impairment losses on business assets were recognized due to the significant decrease in
expected future cash flows on the strategy plan for the fiscal years ending March 31,
2022.
The breakdown is as follows: buildings and structures ¥4,050 thousand ($33 thousand);machinery ,tools, furniture and fixtures ¥ 3,994 thousand ($33 thousand); and software,¥341 thousand ($3 thousand).
The recoverable amount of each asset group is measured by value in use or net realizablevalue.

Location

Airport shops (Asahikawa
city, Hokkaido)

Use

Airport shops

Years ended March 31,
Classification

Years ended March 31,
2022
2022
(Thousands of(Thousands
U.S. dollars)of yen)Building, and others¥8,386$ 69

c. Loss due to temporary store closures
In response to various requests from governments regarding COVID-19, the Company
has temporarily closed airport stores and other facilities. Therefor these fixed costs (laborcost, rent charges and depreciation) incurred during the temporary store closed period
has be recorded as an extraordinary loss.
9. Notes on Consolidated Statement of Changes in Net Assets
The total number of shares of stock in issue, and the total number and periodic changes in
the number of shares of common stock in treasury for the years ended March 31, 2022 wereas follows:
Number of shares of stock in issue: Common stock

12,775 (Thousands of shares)

There is no dividend payment.
There are no dividends for which the record date belongs to the current consolidated fiscal
year but for which the effective date falls in the following consolidated fiscal year. There isno type and number of shares to be issued upon exercise of stock acquisition rights, except
for those for which the first day of the exercise period has not yet arrived.

22

10.

Financial Instruments

Information on the status of financial instruments
The Company and its consolidated subsidiaries (the “Group”) manage temporary cash
surpluses mainly through short-term deposits. Furthermore, the Group raises short-term
capital through bank borrowings and the issuance of commercial papers.
Notes and accounts receivable are exposed to credit risk in relation to customers. In addition,
the Company is exposed to foreign currency exchange risk arising from receivables
denominated in foreign currencies. In principle, the foreign currency exchange risks derivingfrom the trade receivables denominated in foreign currencies are hedged by forward foreignexchange contracts.
Marketable securities and investment securities are mainly composed of stocks. Those
securities are exposed to market risk.
Long-term guarantee deposits are mainly composed of mainly deposits for rental spaces of
the airport buildings. Those deposits are exposed to credit risk in relation to counterparties.
All notes and accounts payable have payment due dates within one year. Although theCompany is exposed to foreign currency exchange risk arising from those payables
denominated in foreign currencies, foreign exchange contracts are arranged to reduce therisk.
Short-term borrowings and commercial papers are raised mainly in connection with businessactivities, and long-term debt is taken out principally for the purpose of making capital
investments. Long-term debt with certain variable interest rates is exposed to interest rate
fluctuation risk.
Derivative transactions are forward foreign exchange contracts used to hedge against the riskof exchange rate fluctuations related to trade receivables and payables denominated inforeign currencies.

23

10.

Financial Instruments (continued)

Estimated Fair Value of Financial Instruments
The carrying value of financial instruments and estimated fair value in the consolidatedbalance sheet as of March 31, 2022 are shown in the following table.

Investment securities
Long-term guarantee deposit
Long-term debt (*2)
Derivatives

March 31, 2022
Estimated
Carrying
fair value
value (*1)(*1)
Difference(Thousands of yen)
¥ 309,552¥ 309,552–¥ 2,188,648¥ 2,173,085¥ (15,563)¥ (8,767,525) ¥ (8,745,045)¥ 22,479¥ 194,327¥ 194,327–

Investment securities
Long-term guarantee deposit
Long-term debt (*2)
Derivatives

March 31, 2022
Estimated
Carrying
fair value
value (*1)(*1)
Difference(Thousands of U.S. dollars)$ 2,537$ 2,537–$ 17,940$ 17,812$ (128)$ (71,865)$ (71,681)$ 184$ 1,593$ 1,593–*1. The items in the section of liabilities are shown in brackets ( ).
*2. Long-term debt includes the current portion of long-term debt.
*3. Cash and time deposits, trade notes and accounts receivable and other notes andaccounts receivable, trade notes and accounts payable, short-term borrowings,
commercial papers and accrued expenses, which are settled in a short period of time
and therefore have a value approximating their carrying amounts, are not stated.
Note 1: Derivative transactions
The fair value of forward foreign exchange contracts is based on forward exchange rates. In
addition, the fair value of forward foreign exchange contracts that are accounted for under
the allocation method is included in the fair value of the relevant notes and accounts tradereceivables and notes and accounts trade payables, as they are accounted for as an integral
part of the hedged items.

24

10.

Financial Instruments (continued)

Note 2: Financial instruments that do not have market prices
March 31, 2022
(Thousands of yen)(Thousands of
U.S. dollars)
Unlisted stocks¥ 2,413,284$ 19,781

Because no quoted market price is available, the above financial instruments that do not havemarket prices are not included in the above table.
Fair values of financial instruments
The fair value of financial instruments is classified into the following three levels based on
the observability and materiality of the inputs used to calculate fair value.
Level 1 Fair Value : Fair value based on (unadjusted) quoted prices in active markets for
identical assets or liabilities
Level 2 Fair Value : Fair value based on directly or indirectly observable inputs other thanLevel 1 inputs
Level 3 Fair Value : Fair value based on the use of significant unobservable inputs
When multiple inputs that have a significant impact on the calculation of fair value are used,
fair value is classified to the level with the lowest priority in the calculation of fair value
among the levels to which each of those inputs belongs.
a. Financial assets and liabilities with carried amounts in the consolidated balance sheet atfair value
March 31, 2022
Fair value (Thousands of yen)
Level 2
Level 3––
¥ 194,327–

Investment securities
Derivatives

Level 1
¥ 309,552–

Investment securities
Derivatives

March 31, 2022
Fair value (Thousands of U.S. dollars)
Level 1
Level 2
Level 3
$ 2,537–––$ 1,593
–

25

Total
¥ 309,552¥ 194,327

Total$ 2,537$ 1,593

10.

Financial Instruments (continued)

b. Financial assets and liabilities not carried in the consolidated balance sheet at fair value–

March 31, 2022
Fair value (Thousands of yen)
Level 2
Level 3– ¥ 2,173,085

Total¥ 2,173,085–¥ 8,745,045–¥ 8,745,045

Level 1Long-term guarantee
depositLong-term debt

March 31, 2022
Fair value (Thousands of U.S. dollars)
Level 1
Level 2
Level 3Long-term guarantee
depositLong-term debt

Total

–

–

$ 17,812$ 17,812–$ 71,681–$ 71,681

Note: Valuation methods and inputs used in the calculation of fair valuea.

Investment securities
Listed stocks are valued using quoted market prices. Since listed stocks are traded in
active markets, their fair value is classified as Level 1 fair value.

b.

Derivatives
Derivatives are classified as Level 2 fair value based on prices quoted by counterparty
financial institutions, etc., as there are no publicly available quoted prices.

c.

Long-term guarantee deposit
Long-term guarantee deposits are calculated based on the present value of future cash
flows discounted by an appropriate index such as the yield of government bonds, andare classified as Level 3 fair value.

d.

Long-term debt (Includes the current portion of long-term debt)
Long-term debt is classified as Level 2 fair value using the discounted present value
method based on the total amount of principal and interest and an interest rate that takes
into account the remaining term of the debt and credit risk.

26

11. Investment and Rental Properties
The Company and a certain consolidated subsidiary own buildings and lands for lease mainlyin Thailand and other areas.
The carrying value in the consolidated balance sheet and the corresponding fair value of
those properties for the year ended March 31, 2022 are as follows:(Thousands of yen)
Fair Value

Carrying Value¥ 2,123,716¥ 2,777,989(Thousands of U.S. dollars)
Fair Value

Carrying Value$ 17,408$ 22,770

The carrying value represents the acquisition cost less accumulated depreciation andcumulative impairment loss. The fair value is mainly estimated in accordance with appraisal
standards for valuing real estate. However, if no material change has occurred in certain
values or indices, the fair values are determined by adjusting such appraised values andindices.

2712. Revenue Recognition
Information that disaggregates revenue arising from contracts with customers
Aviation &airportbusiness

Life service
business

Retailbusiness

Food &
beveragebusiness(Thousands of Yen)
Revenue from contracts with customers
Aircraft parts¥ 1,980,524¥ 2,390,843¥ 865,872¥ 862,092

Machinery and Materials

JALUX Inc.

Real estate
Insurance
In-flight and
Mail-order sales
Fisheries
Wine
Other
Subtotal
Aircraft parts¥ 4,563,887¥ 164,493¥ 2,145,018

Subtotal
Consolidated total
Internal transaction
Total
Other revenues
Sales to external customers¥ 10,839,537¥ 1,938,560¥ 892,984

Real estate
Insurance
Airport andDuty-free stores
Agricultural
Food ManufacturingOther¥ 6,172,093¥ 1,060,314

Machinery and Materials

Subsidiary
Company¥ 4,118,808¥ 1,608,205¥ 7,649,172¥ 1,923,255¥ 1,267,110¥ 10,044,966¥ 99,147¥ 288,067¥ 2,451,600¥ 2,452,506¥ 1,612,159¥ 999,301¥ 1,159,461¥ 3,119,612¥ 12,496,567¥ 5,063,967¥ 3,304,479¥ (671,128)¥ 2,633,351¥ 369,905¥ 3,003,256¥ 7,238,420¥ (338,077)¥ 6,900,342¥ 2,761,393¥ 9,661,736¥ 18.668,661¥ (519,688)¥ 18,148,972¥ 15,903,504¥ (1,072,528)¥ 14,830,976¥ 18,148,972¥ 14,830,976

28

12. Revenue Recognition (continued)
Aviation &airportbusiness

Life service
business

Retailbusiness

Food &
beveragebusiness(Thousands of U.S. dollars)
Revenue from contracts with customers
Aircraft parts$ 16,234$ 19,597$ 7,097$ 7,066

Machinery and Materials

JALUX Inc.

Real estate
Insurance
In-flight and
Mail-order sales
FisheriesWine$ 37,409

Other$ 1,348

Subtotal
Aircraft parts$ 17,582$ 82,336$ 813$ 2,361$ 20,095$ 20,103$ 13,214$ 8,191$ 9,504$ 25,571$ 102,431$ 41,508$ 27,086$ (5,501)$ 21,585$ 3,032$ 24,617$ 59,331$ (2,771)$ 56,560$ 22,634$ 79,195$ 153,022$ (4,260)$ 148,762$ 130,357$ (8,791)$ 121,565$ 148,762$ 121,565

Other

Other revenues
Sales to external customers$ 88,849$ 15,890$ 7,320

Real estate
Insurance
Airport andDuty-free stores
Agricultural
Food Manufacturing
Subtotal
Consolidated total
Internal transaction
Total$ 50,591$ 8,691

Machinery and Materials

Subsidiary
Company$ 33,761$ 13,182$ 62,698$ 15,764$ 10,386*Other revenues include revenues related to the leasing business.
Information that is the basis for understanding revenue from contracts with customers
The Group is engaged in the sale of products mainly through wholesale and retail in the
Airlines & airports, Life services, Retail, and Foods & beverages segments. In the sale ofproducts and commodities as a principal, the Group recognizes revenue when the terms ofdelivery have been satisfied as it is considered that the customer has obtained control of the
products or commodities and therefore, the identified performance obligations have beensatisfied at that point. For transactions that require a certain period of time from shipment toacceptance inspection by the customer, the Group recognizes revenue when the performanceobligation has been satisfied at the time of acceptance inspection by the customer.
In addition, revenues of Retail Business and Food & beverage Business are mainly calculated
based on the prices stipulated in the contracts, less discounts and rebates. For transactions inwhich the Group's role in providing goods or services to customers is that of an agent,
revenue is recognized at the net amount received from customers less amounts paid to
suppliers.

29

12. Revenue Recognition (continued)
Information to understand the amount of revenue for the relevant consolidated fiscal year
and subsequent fiscal years(a) Outstanding contract liabilities

Consolidated fiscal year under review
Balance at beginningof the period
Balance at end of the period(Thousands of yen)(Thousands of U.S.
dollars)
Contract liabilities¥ 989,322¥ 904,883$ 7,417*In the consolidated financial statements, contract liabilities are included in “Others”(b) Transaction price allocated to remaining performance obligations

For the transaction price allocated to the remaining performance obligations, revenue isrecognized as the contract progress. The residual performance obligation is expected to berecognized as revenue over the next one to three years.

13. Amounts Per Share
Net assets per share are computed based on the number of shares of common stock
outstanding at each balance sheet date.
Year ended March 31,
2022
(Yen)
(U.S. dollars)¥ 1,841.28$ 15.09

Net loss per share is computed based on the weighted average number of shares of common
stock outstanding during each year.
Year ended March 31,
2022
(Yen)
(U.S. dollars)
Net loss per share of common stock:
Basic¥ 29.3130$ 0.24

14. Significant Subsequent Events
As part of procedures that the Company goes private, the Company made a resolution on thereverse stock split at the Extraordinary Meeting of Stockholders held on May 13, 2022. Dueto this resolution, the shares issued by the Company fell under the delisting criteria of theTokyo Stock Exchange and were scheduled to be delisted as of June 2, 2022.
a.

Purpose of the reverse stock split
The reverse stock split is executed so that the Company’s shares are owned by Japan
Airlines Co., Ltd., Sojitz Corporation, SJ Future Holdings Corporation, and Japan
Airport Terminal Co., Ltd., and the Company goes private and maintain and strengthen
the relationship with the existing major shareholders.

b.

Type of shares to be consolidated
Common stockc.

Consolidation ratio
Consolidating 340,666 shares into 1d.

Total number of outstanding shares to be reduced
12,650,573 sharese.

Total number of outstanding shares after the effective date
37 sharesf.

Total number of authorized shares as of the effective date
148 sharesg.

Date of reverse stock split
June 4, 2022

As a result of the reverse stock split, the number of shares held by shareholders except for
SJ Future Holdings Corporation, Sojitz Corporation, Japan Airlines Co., Ltd. and Japan
Airport Terminal Co., Ltd. had been fractional shares, and which have been sold to SJ
Future Holdings Corporation upon court approval.

31