Financial Results for the First Half of the Year Ending March 31, 2015 (J-GAAP)
November 7, 2014
Name of listed company: Nichii Gakkan Company
Listed on: Tokyo Stock Exchange 1st Section
Securities code:
9792
URL:
http://www.nichiigakkan.co.jp
Representative:
Akihiko Terada, Chairman, President and CEO
Contact:
Koichi Terada, Director
TEL: 03-3291-2121
Scheduled date for filing the quarterly financial report: November 13, 2014
Scheduled date to start dividends distribution:
December 8, 2014
Supplementary quarterly materials prepared:
Yes
Quarterly results information meeting held:
Yes (for institutional investors and financial analysts)(Figures shown are rounded down to the nearest million yen.)

1. Consolidated financial results for the first half ended September 30, 2014 (April 1, 2014 – September 30, 2014)(1) Consolidated operating results(Percentage figures represent changes year on year.)
Net Sales
Operating Income
Ordinary Income
Net Income
Million yen

Six months ended
September 30, 2014
Six months ended
September 30, 2013
(Note) Comprehensive income:%Million yen%

Million yen%

Million yen%

136,015

(0.0)

2,719

(15.8)

1,776(29.0)

593(64.3)

136,049

3.0

3,229

(17.3)

2,502(28.3)

1,660

15.9

Six months ended September 30, 2014: 648 million yen (-57.8%);
Six months ended September 30, 2013: 1,537 million yen (14.4%)

Net Income per Share

Diluted Net Income per ShareYen

Six months ended
September 30, 2014
Six months ended
September 30, 2013

Yen

8.49

—

23.76

—

(2) Consolidated financial position
Total Assets

Net Assets

Equity Ratio

Million yen

As of September 30, 2014
As of March 31, 2014
Reference: Shareholders’ equity:

Million yen

179,208
176,246%

62,36662,32734.6
35.2

As of September 30, 2014: 62,025 million yen; As of March 31, 2014: 61,999 million yen

2. Dividends
1Q-endAnnual dividends
3Q-end2Q-endYen

Year ended March 31, 2014
Year ending March 31, 2015
Year ending March 31, 2015
(forecast)

—
—

Yen

Year-end

Yen

10.00
10.00

Annual
Yen

Yen

—

10.00

20.00

—

10.00

20.00

(Note) Revisions to most recently announced dividend forecast: No

3. Forecast of consolidated financial results for the year ending March 31, 2015 (April 1, 2014 – March 31, 2015)(Percentage figures represent changes from previous year for full year figures.)

Net Sales

Operating Income

Million yen

Full year

274,300%

1.1

Million yen

7,700

Ordinary Income%

21.8(Note) Revisions to most recently announced financial results forecast: Yes

Million yen

5,700

%

15.4

Net Income
per Share

Net Income
Million yen

3,000

%

6.0

Yen

42.93

* Notes(1) Significant changes in subsidiaries during the term (Changes in specified subsidiaries resulting in changes in scope of
consolidation): None
(2) Application of specific accounting for preparing the quarterly consolidated financial statements: None
(3) Changes in accounting policies, changes of accounting estimates and restatement
1) Changes in accounting policies due to revisions of accounting standards, etc.: Yes
2) Changes in accounting policies due to reasons other than those stated in 1): None
3) Changes in accounting estimates: None
4) Restatement: None
(Note) For details, please refer to page 5, (3) Changes in accounting policies, accounting estimates, and restatement of 2. Summary information (notes) of
Attached Document.

(4) Number of shares outstanding (common stock)1) Number of shares issued and outstanding (including treasury stock)
As of September 30, 2014:
73,017,952
As of March 31, 2014:
73,017,952
2) Number of treasury stock
As of September 30, 2014:
3,134,524
As of March 31, 2014:
3,133,768
3) Average number of shares issued and outstanding in each period (quarterly consolidated cumulative period)
As of September 30, 2014:
69,883,839
As of September 30, 2013:
69,885,908* Implementation status of quarterly review procedures
The quarterly review procedure based on the Financial Instruments and Exchange Act does not apply to these quarterly financial statements,
and the procedure based on the Financial Instruments and Exchange Act is in operation as of the release of these quarterly financial
statements.

* Explanation concerning the appropriate use of financial result forecasts and other special notes(Forward looking statements)
The above forecasts are based on information Nichii Gakkan had as of the time this report was prepared and on certain assumptions judged tobe reasonable. Various factors may cause actual results to differ significantly from forecasts. Please refer to the disclaimers, provided under“(3) Information on the future outlook, including consolidated financial results forecasts” of “1. Qualitative information on quarterly
financial results” on page 4 of the quarterly consolidated financial results (attached document), regarding the assumptions upon which
forecasts are based and the use of forecasts.

Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015

Table of Contents for the Attached Document
1. Qualitative information on quarterly financial results·························································································· 2(1) Details of business results ······························································································································· 2(2) Details of financial position ···························································································································· 4(3) Information on the future outlook, including consolidated financial results forecasts······································ 4
2. Summary information (notes)······························································································································ 5(1) Significant changes to subsidiaries during the term························································································· 5(2) Application of specific accounting for preparing the quarterly consolidated financial statements···················· 5(3) Changes in accounting policies, accounting estimates and restatement ··························································· 5
3. Quarterly consolidated financial statements ········································································································ 6(1) Quarterly consolidated balance sheets············································································································· 6(2) Quarterly consolidated statements of income and comprehensive income······················································· 8
Quarterly consolidated statements of income
Six months ended September 30 ·················································································································· 8
Quarterly consolidated statements of comprehensive income
Six months ended September 30 ·················································································································· 9(3) Notes to quarterly consolidated financial statements ····················································································· 10
Notes on the premise of a going concern······································································································· 10
Notes on significant fluctuation in the amount of shareholders’ equity·························································· 10
Significant subsequent events ······················································································································· 10

1Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015

1. Qualitative information on quarterly financial results(1) Details of business results
In the interim period of the fiscal year under review, the integrated reform of tax systems and social security were
undertaken simultaneously in April 2014 with the 3% increase in the consumption tax and 0.63% compensation for
long-term care. Moreover, specific measures, such as supporting the enhancement of women’s participation andadvancement in society and the reform of hard-core regulations, were announced to achieve a positive economic
momentum in accordance with the revised Japan Revitalization Strategy that was approved by the Cabinet in June.
The headquarters for town building, local residents and job creation that was established in September began to
examine policies for each region, aiming at regional revitalization by overcoming a declining population andinvigorating regional areas.
In addition, in the social security sector, to address a number of issues, rising social security expenses as a result of a
rapid increase in the number of elderly, a shortage in health care workers, and challenges related to dementia, integral
discussions were being held with a focus on the establishment of a comprehensive regional care system, including theimprovement of the working conditions of health care workers, the concentration and the streamlining of medical
home-care treatment and home-care services and the diversification of regional support businesses.
In this business environment, with the aim of realization of stable growth of long-term profits by improving thebalance of the business structure, the Nichii Gakkan Group has been pursuing the five-year medium-term
management strategy since April 2012.
In the interim period of the fiscal year under review, the Group focused on developing foundations for businessstrategies in China to carry out regional diversification strategy and strengthening the development of strategic
businesses, including the language education business, medical management support services, services not covered by
the long-term health insurance system and childcare services, as its business diversification strategy.
As part of its efforts to strengthen the existing businesses, the Group worked to develop business promotion systems,
such as the establishment of foundations for human resources mainly by developing specialists and improving careerdevelopment support and the strengthening of inter-departmental cooperation.
As for the businesses in China, starting with the conclusion of a strategic alliance agreement in July 2014 with the
China Planning Institute on Aging, which is under the direct jurisdiction of the Ministry of Civil Affairs of thePeople’s Republic of China, the Group strove to develop strong partnerships with governmental institutions and soundlocal companies, including the determination of the establishment of Zhihu Service Management Co., Ltd. (tentativename) and the decision to make 11 providers of elderly care services and housekeeping services in seven cities(Beijing, Chongqing, Shenyang, Shenzhen, Jiangmen, Meizhou and Jinan) part of the Group’s second-tier subsidiaries
by the end of September.
Looking at operating results, the Group posted lower sales, reflecting a decrease in the number of students in theexisting education courses in the education business on the back of a recovery in the employment environment.
Earnings declined, mainly due to a fall in sales from the existing education courses.
As a result, the Group posted net sales of 136,015 million yen for the interim period under review (compared with
136,049 million yen posted in the same period of the previous fiscal year), an operating income of 2,719 million yen(compared with 3,229 million yen posted in the same period of the previous fiscal year), and ordinary income of
1,776 million yen (compared with 2,502 million yen posted in the same period of the previous fiscal year). Net
income was 593 million yen (compared with 1,660 million yen posted in the same period of the previous fiscal year).
For the purpose of creation of new innovation and the steady implementation of the medium-term management
strategy, on October 1, with the assignment of Chairman and Representative Director Akihiko Terada to serve
concurrently as President, the Nichii Gakkan Group carried out reform of its management execution structure andorganizations. As a result, the Group has adopted a three management headquarters structure with the businessheadquarters, the corporate governance headquarters and the China business headquarters. Under this new
management execution structure, the Group will continue to work promptly with the existing businesses, newbusinesses, domestic businesses and overseas businesses in a cross-sectional manner.
Results by business segment are as follows:2

Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015

<Medical Support Business>
With the improvement in staff retention rates resulting in the enhancement of staff skills, this fortunate cycle led to an
improvement in the customer’s satisfaction rate, thus the scale of contracts with medical institutions that were alreadyunder contract expanded and operations were streamlined. Consequently, operating income grew to double-digits,
15.2% year on year.
With regard to management support services, in light of the progress of beds featuring differentiation and regional
cooperation among medical institutions, the Group focused on developing and providing comprehensive management
support services, such as support for discharged patients to return to home care, by collaborating with the long-termcare business.
Net sales for the segment came to 52,858 million yen for the interim period under review (compared with 52,769
million yen posted in the same period of the previous fiscal year). Operating income for the segment was 4,493
million yen (compared with 3,900 million yen posted in the same period of the previous fiscal year).
<Long-term Care Business>
In light of the trends of the revision of the long-term care insurance system with a focus being placed on system
concentration and streamlining, and based on the long-term care needs in each region, the Group carefully developed
its services, while it paid particular attention to the provision of specialized care, including seamless andcomprehensive long-term care services and dementia care.
Looking at the status of new operating bases established during the first half, for its home care services, the Group
opened nine care plan facilities (bringing the total number of these facilities to 799), ten home-visit care facilities(increasing the total number of these facilities, including home-visit bathing facilities, to 1,122), six day-care facilities(bringing the total number of these facilities to 373), and one home nursing care facility (bringing the total number ofthese facilities to 66). For its facility care services, the Group established five Nichii no Hohoemi group homes(bringing the total number of these homes to 267), three Nichii no Kirameki pay nursing homes (bringing the total
number of these homes to 61), and one Nichii Home pay nursing home (bringing the total number of these homes to
55).
Net sales for the segment reached 72,638 million yen (compared with 71,385 million yen posted in the first half of theprevious fiscal year). Operating income for the segment was 6,635 million yen (compared with 6,555 million yen
posted in the first half of the previous fiscal year).
<Health Care Business>
In June 2014, by including services before and after childbirth, childcare services and other services in the existinghousekeeping services, the Group started a new livelihood support service called Nichii Life.
Amid increasing needs for livelihood support services as a result of the progress of the aging society and theadvancement of women in society, and other factors, the segment performed strongly, primarily reflecting continued
double-digit sales growth in health care products and in Nichii Life.
Net sales for the Health Care Business segment came to 1,850 million yen (compared with 1,759 million yen posted
in the first half of the previous fiscal year). Operating income for the segment was 95 million yen (compared with 49
million yen posted in the first half of the previous fiscal year).
<Education Business>
In the education business, GABA Corporation continued to perform strongly, while COCO Juku also steadily
increased the number of students mainly in COCO Juku Junior. In the COCO Juku business, the Group strove toexpand sales channels mainly by strengthening sales to corporations, aggressively developing franchise classrooms(COCO Juku Junior) and establishing a capital and business alliance with JSS Corporation. The Group also worked toprovide high value-added services, including courses contracted by the U.S. embassy for teachers and staff members
at the New York University SCPS ALI Tokyo Center.
The existing education business continued to record stagnant results, given a decline in the number of students as aresult of an improvement in the employment environment. At present, the Group is striving to strengthen its humanresources providing capabilities mainly by revising course curriculum to develop human resources with the necessary
skills who are able to be readily placed in actual working places, and for example, by promoting the expansion of
employment support such as employment consultation in collaboration with the medical support business and the3Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015

long-term care business.
As for the streamlining of business management, the Group also took initiatives to reform the cost structure chiefly byintegrating classroom management with the existing education courses and reviewing promotional activities.
Net sales for the Education Business segment totaled 8,416 million yen (compared with 9,870 million yen posted in
the first half of the previous fiscal year). Operating loss for the segment was 4,142 million yen (compared with a lossof 3,208 million yen posted in the first half of the previous fiscal year).
<Other Businesses>
The Group was also engaged in the goods management business, the leasing business, the publishing business and thepark management business, among other businesses, to enhance the added value of the mainstay businesses and toachieve efficient group management.
Net sales for the Other Businesses segment amounted to 251 million yen (compared with 264 million yen posted in
the first half of the previous fiscal year). Operating income for the segment was 130 million yen (compared with
operating loss of 30 million yen posted in the first half of the previous fiscal year).

(2) Details of financial position
Total assets at the end of the interim period under review increased 2,961 million yen from the end of the previous
fiscal year, to 179,208 million yen. The main reasons for the increase were a 570 million yen increase in current
assets, mainly reflecting an increase in the notes and accounts receivable-trade, and a 2,390 million yen rise in fixed
assets, primarily due to an increase in lease assets.
Liabilities increased 2,922 million yen from the end of the previous fiscal year, to 116,842 million yen. The key
factors contributing to this increase were a 449 million yen rise in current liabilities, mainly reflecting an increase inprovision for bonuses, and a 2,472 million yen increase in non-current liabilities, primarily attributable to an increasein lease obligations.
Net assets increased 38 million yen from the end of the previous fiscal year, to 62,366 million yen.

(3) Information on the future outlook, including consolidated financial results forecasts
With respect to the consolidated and nonconsolidated results forecast for the fiscal year ending March 31, 2015, theGroup has revised forecast net sales presented in the financial results forecast for the year ending March 31, 2015,
which was released on May 14, 2014, because a gap between actual net sales and forecast net sales in the long-termcare business and the education business has taken place. As for the income forecast, mainly reflecting the progress of
results for the interim period under review, the Group has maintained its forecasted income as unchanged. The Group
is currently examining the impact on results forecast from the commencement of full-fledged operations in thebusiness in China. It will promptly disclose information when a revision becomes necessary.
The differences between the consolidated financial results forecast for the year ending March 31, 2015, which wasannounced in the financial results released on May 14, 2014, and the forecast after the revision are as follows.
(Forecast of consolidated financial results)
Fiscal year ending March 31, 2015 (April 1, 2014 – March 31, 2015)
Operating
Ordinary
Net Sales
IncomeIncomeMillion yen

Previously announced
forecast (A)Revised forecast (B)Change (B – A)
Change (%)(Reference) Actual results(fiscal year ended March
31, 2014)

Net Income

Net Income
per Share

Million yen

Million yen

Million yen

278,400

7,700

5,700

3,000

42.93

274,300(4,100)
(1.5)

7,700
—
—

5,700
—
—

3,000
—
—

42.93
—
—

271,447

6,322

4,940

2,831

40.51

4

Yen

Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015

(Forecast of nonconsolidated financial results)
Fiscal year ending March 31, 2015 (April 1, 2014 – March 31, 2015)
Operating
Ordinary
Net Sales
IncomeIncomeMillion yen

Previously announced
forecast (A)Revised forecast (B)Change (B – A)
Change (%)(Reference) Actual results(fiscal year ended March
31, 2014)

Net Income

Net Income
per Share

Million yen

Million yen

Million yen

Yen

243,200

4,300

3,200

1,500

21.46

240,200(3,000)
(1.2)

4,300
—
—

3,200
—
—

1,500
—
—

21.46
—
—

238,342

3,485

2,918

1,471

21.06

2. Summary information (notes)(1) Significant changes to subsidiaries during the term
No related information.

(2) Application of specific accounting for preparing the quarterly consolidated financial statements
No related information.

(3) Changes in accounting policies, accounting estimates, and restatement
Changes in accounting policies
Application of the accounting standard for retirement benefits
The Company has applied the “Accounting Standard for Retirement Benefits” (Accounting Standards Board of Japan(ASBJ) Statement No. 26, May 17, 2012; hereinafter “Accounting Standard for Retirement Benefits”) and the“Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, May 17, 2012; hereinafter“Guidance on Accounting Standard for Retirement Benefits”) from the first quarter of the current fiscal year, forprovisions set forth in the main clauses of Paragraph 35 of the Accounting Standard for Retirement Benefits andParagraph 67 of the Guidance on Accounting Standard for Retirement Benefits. Accordingly, the Company reviewed
the methods for calculating retirement benefit obligations and service costs, and revised the method of attributing
estimated retirement benefit obligations to periods from the straight-line basis to the benefit formula basis, andrevised the method of determining the discount rate from the method using the remaining service period of employees
to the method using a single weighted average discount rate.
The application of this accounting standard, etc. is in accordance with the transitional accounting treatments set forthin Paragraph 37 of the Accounting Standard for Retirement Benefits, and thus the adjustments associated with thechange in calculation methods of retirement benefit obligations and service costs are recorded in retained earnings at
the beginning of the first half of the current fiscal year.
The result was a decrease of 118 million yen in net defined benefit liability, and an increase of 96 million yen inretained earnings at the beginning of the first half of the current fiscal year. The effect of this change on operating
income, ordinary income and income before income taxes and minority interests for the first half of the current fiscal
year is insignificant.

5

Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015

3. Quarterly consolidated financial statements(1) Quarterly consolidated balance sheets
Fiscal 2014
(As of March 31, 2014)
AssetsCurrent assets
Cash and deposits(Thousand yen)
H1 of Fiscal 2015
(As of September 30, 2014)

9,595,734

8,057,953

Notes and accounts receivable—trade32,203,271

32,938,245

Short-term investment securities

3,501,938

4,198,776

Merchandise and finished goods

623,388564,105

Work in progress

15,111

83,915

310,210

252,753

Deferred tax assets

2,888,713

3,045,079

Other

9,258,717

9,817,370(31,299)(21,462)

58,365,785

58,936,738

29,053,777

28,569,339

Lease assets—net

27,884,574

30,386,242

Other—net

9,834,290

9,554,403

66,772,643

68,509,984

18,446,825

17,523,602

3,814,661

4,316,417

22,261,486

21,840,019

29,253,196

30,324,274(406,643)(402,856)

28,846,552

29,921,417

117,880,682

120,271,422

176,246,468

179,208,160

Raw materials and supplies

Less: allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures—net

Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Other
Less: Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

6Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015

Fiscal 2014
(As of March 31, 2014)(Thousand yen)
H1 of Fiscal 2015
(As of September 30, 2014)

Liabilities
Current liabilities
Notes and accounts payable—trade861,540

617,701

Short-term loans payable

4,014,826

2,751,858

Income taxes payable

1,674,761

1,777,258

Accrued expenses

15,669,460

16,048,467

Provision for bonuses

5,092,365

5,540,477

39,70024,850Other

28,377,442

29,419,401

Total current liabilities

55,730,097

56,180,015

Long-term loans payable

17,316,153

16,832,574

Lease obligations

28,683,159

31,618,533

167,784

162,652

Net defined benefit liability

5,786,553

5,824,440

Asset retirement obligations

1,774,879

1,817,784

Other4,460,592

4,406,053

Total non-current liabilities

58,189,123

60,662,038

113,919,220

116,842,053

Capital stock

11,933,790

11,933,790

Capital surplus

17,354,214

17,354,214

Retained earnings

38,335,223

38,326,720

Treasury stock, at cost

(5,374,688)(5,375,379)

Total shareholders’ equity

62,248,540

62,239,345

25,037

19,937

Foreign currency translation adjustments

58,96658,148Remeasurements of defined benefit plans(332,870)(291,467)

Total accumulated other comprehensive income(248,866)(213,381)

Minority interests

327,574

340,141

Total net assets

62,327,248

62,366,106

176,246,468

179,208,160

Provision for directors’ bonuses

Non-current liabilities

Provision for directors’ retirement benefits

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities

Total liabilities and net assets

7

Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statements of income)(Six months ended September 30)
Fiscal 2014
(from April 1, 2013
to September 30, 2013)
136,049,979
107,630,440
28,419,539
25,190,219
3,229,319(Thousand yen)
Fiscal 2015
(from April 1, 2014
to September 30, 2014)
136,015,397
108,476,723
27,538,674
24,818,901
2,719,773

Interest income

70,181

79,563

Rent income

97,098107,868

Subsidy income

53,37964,589

—

1,594

Other

137,181

175,288

Total non-operating income

357,841

428,904

Interest expenses

980,832

1,322,463

Rent expenses

30,726

31,730Other72,655

17,5301,084,214

1,371,725

2,502,946

1,776,952

1,030,370
850
1,031,220———

29,213

11,986—

1,437

49,99925,000——

Impairment loss—

33,740

Other

966

3,537

105,179

50,701

Income before income taxes and minority interests

3,428,987

1,726,250

Income taxes—current

2,220,900

1,544,506

Income taxes—deferred(472,909)(431,758)

Total income taxes

1,747,991

1,112,747

Income before minority interests

1,680,995

613,503

20,53420,067

1,660,461

593,435

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income

Share of profit of entities accounted for using equity
methodNon-operating expenses

Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of property, plant and equipment,
net
Loss on sales of property, plant and equipment, net
Loss on valuation of investment securities
Provision of allowance for doubtful accounts

Total extraordinary losses

Minority interests in income
Net income

8Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015

(Quarterly consolidated statements of comprehensive income)(Six months ended September 30)
Fiscal 2014
(from April 1, 2013
to September 30, 2013)
1,680,995(Thousand yen)
Fiscal 2015
(from April 1, 2014
to September 30, 2014)
613,503

Valuation difference on available-for-sale securities(120,158)(5,100)Foreign currency translation adjustments(23,074)(817)—

41,403(143,232)

35,484

1,537,762

648,987

Owners of the parent

1,517,228

628,920

Minority interests

20,53420,067

Income before minority interests
Other comprehensive income

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:9Nichii Gakkan Company (9792) Financial Results for the First Half of the Year Ending March 31, 2015

(3) Notes to quarterly consolidated financial statements(Notes on the premise of a going concern)
No related information.
(Notes on significant fluctuations in the amount of shareholders’ equity)
No related information.
(Significant subsequent events)
Equity stake acquisitions of local companies in China by subsidiary
At a board meeting held on November 7, 2014, the Company’s wholly owned subsidiary, Nichii Hong Kong Limited(hereinafter “Nichii Hong Kong”) adopted a resolution to acquire equity stake in a local company in China,
Guangzhou Zhengxianghe Housekeeping Service Co., Ltd. (hereinafter “Guangzhou Zhengxianghe”), to make it asubsidiary of Nichii Hong Kong (the Company’s second-tier subsidiary).
1. Purpose
Aiming to provide services all over China, up to this point the Nichii Gakkan Group has determined to make 11
companies be in the Group’s companies in 7 cities in Beijing, Chongqing, Shenyang, Shenzhen, Jiangmen, Meizhou
and Jinan. As a result of the acquisition of equity stake as described above, with the addition of Guangzhou, theGroup’s service provision network has expanded to cover 8 cities with 12 companies.
Guangzhou Zhengxianghe has a business track record that is steady and extensive in the region in mainly providing
housekeeping services and babysitter services for the wealthy class for more than 15 years in Guangzhou. It has also
developed management bases to achieve the provision of high-quality services by establishing a unique humanresources development scheme in cooperation with vocational training schools, as well as taking other initiatives.
By integrating human resources development and the service provision know-how through the inclusion of thesubject second-tier subsidiary in the Nichii Group, the Group will strive to provide sound care services in China.
2. Parties from which equity stakes will be acquired
Equity stakeholders (managers, etc.) of the said company
3. Outline of the acquiring subsidiary(1) Name:
Nichii Hong Kong Limited(2) Location:
Central, Hong Kong
(3) Business content:
Supervision of China business affiliates, consulting, etc.
(4) Capital:
25,000,000 HKD (wholly owned by Nichii Gakkan Company)
4. Outline of the acquired company(1) Name:
Guangzhou Zhengxianghe Housekeeping Service Co., Ltd.
(2) Location:
Guangzhou, Guangdong Province(3) Business content:
Housekeeping services, babysitter services, etc.
(4) Capital:
500,000 CNY(5) Equity stake acquisition date
Undecided(6) Acquisition value
50,379,000 CNY (scheduled)(7) Ownership ratio after acquisition 51.0%
Underwriting of capital increases of subsidiaries
At a board meeting held on November 7, 2014, the Company adopted a resolution to increase capital of its threeoverseas subsidiaries in China, NICHII CARENET CHINA Co., Ltd., Nichii China Co., Ltd. and NICHII(GUANGZHOU) CO., LTD. (An application for the establishment has been submitted.)
1. Purpose of capital increases
Strengthening of the financial foundations and responding to requirements for financing by the Group companies inChina
2. Outline of capital increases(1) Amount of capital increases
Approximately 72,500,000 CNY (the total of three companies)(2) Payment date
Undecided(3) Underwriter of capital increases Nichii Gakkan Company 100%

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