Annual Securities Report(Report in accordance with Article 24, paragraph (1) of
the Financial Instruments and Exchange Act)English excerpt translation of the “Yukashoken-Houkokusho”
for the 45th fiscal year (from April 1, 2023 to March 31, 2024)

KYORITSU MAINTENANCE CO., LTD.
E04908

1. Consolidated Financial Statements, Etc.
(1) Consolidated Financial Statements
1) Consolidated balance sheet(Millions of yen)
As of March 31, 2023

As of March 31, 2024

56,02731,807

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, andcontract assets
Real estate held for sale
Real estate under construction held for sale
Costs on uncompleted construction contracts
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total property and equipment
Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Guarantee deposits
Leasehold deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Bond issuance costs
Total deferred assets
Total assets*1

15,211*1

17,915*4

11,750
6,873
95
8,918
(74)
98,802*4

11,451
9,643
265
9,367
(64)
80,385*4

88,893(41,250)
47,643*4 39,862
14,811
19,486(14,849)
4,637
106,954
4,154

*4

*3,*4

*3,*4

3,525
1,612
18,581
19,915
5,864*4 12,606(113)
61,991
173,100
405
405
272,308- 1 -94,006(45,323)
48,682*4 42,646
18,85021,766(16,643)
5,123
115,303
4,487
15,018526
18,893
20,551
3,525*4 12,026(106)
70,433
190,224311
311
270,921

(Millions of yen)
As of March 31, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term borrowings
Current portion of bonds payable
Income taxes payable
Provision for bonuses
Provision for bonuses for directors
Other
Total current liabilities
Non-current liabilities
Bonds payable
Convertible bonds with share acquisitionrightsLong-term borrowings
Long-term guarantee deposits received
Deferred tax liabilities
Retirement benefit liability
Provision for retirement benefits for directors
Provision for loss on business withdrawal
Asset retirement obligations
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
Unrealized holding gain (loss) on securities
Deferred gain (loss) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeTotal net assets
Total liabilities and net assets

*2

*4

- 2 -

7,249
23,947
4,880
865
1,935
289
28,21567,383As of March 31, 2024

*4

*2

9,394
26,860
4,880
2,640
2,928
486
23,936
71,127

18,58013,70030,08230,05275,743
3,066
23
1,029
255
–
492
1,072
130,345
197,728*4

62,453
3,305
0
986
258
1,160
499
773
113,189
184,317

7,964
12,862
53,845(349)
74,322

7,964
12,92065,167(331)
85,721

160
648
(589)
36

675
692
(601)
117

256

882

74,579272,308

86,604
270,921

2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income(Millions of yen)
For the year ended
March 31, 2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries, allowances and bonuses
Welfare expenses
Provision for bonuses
Provision for bonuses for directors
Retirement benefit expenses
Provision for retirement benefits for directors
Promotion expenses
Outsourcing expenses
Rent expenses
Commission expenses
Depreciation
Other
Total selling, general and administrative
expenses
Operating profit
Non-operating income
Interest income
Dividend income
Gain on equity-method investments
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commission expenses
Expenses for measures against novel infectious
disease
Other
Total non-operating expenses
Ordinary profit- 3 -For the year ended
March 31, 2024

*1 175,630
142,871
32,758*1 204,126
155,132
48,993

5,434
1,147
606
289
131
1
2,280
2,085
1,361
10,254459*2 1,378

5,842
1,301
1,009
486
145
2
2,540
2,504
519
14,733551*2 2,649

25,43132,285

7,326

16,708

109
129
–
577
815

119
161
5,025
497
5,804

575
35

672
482

100

–

314
1,026
7,115

240
1,395
21,116

(Millions of yen)
For the year ended
March 31, 2023
Extraordinary income
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on valuation of shares of subsidiaries
Loss on business withdrawal
Loss on impairment of non-current assets
Other
Total extraordinary losses
Profit before income taxes
Income taxes
Current
Deferred
Total income taxes
ProfitProfit attributable to owners of parent

*3

- 4 -

For the year ended
March 31, 2024
18
18

–
–

–
–
345
371
716
6,417

441
1,137
*3 2,015
453
4,047
17,069

1,309
866
2,175
4,241
4,241

2,620
2,033
4,654
12,414
12,414

Consolidated statement of comprehensive income(Millions of yen)
For the year ended
March 31, 2023
ProfitOther comprehensive income
Unrealized holding gain (loss) on securities
Deferred gain (loss) on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of parent

*

4,241

12,414

77
423
(5)
(17)
477
4,719

515
43
(12)
80
626
13,041

4,719

- 5 -

For the year ended
March 31, 2024*

13,041

3) Consolidated statement of changes in net assets
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Shareholders’ equity

Balance at beginning of period

Share capital

Capital surplus

Retained earnings

Treasury shares

7,964

12,821

50,383(361)

Total shareholders’equity70,807

Changes during period
Cash dividends

(779)

(779)

Profit attributable to ownersof parent

4,241

4,241

Purchase of treasury shares
Disposal of treasury shares
Restricted share-based
remuneration
Other changes in the year net

(6)

0

0

0

41

18

60

–

41

3,461

12

3,515

7,964

12,862

53,845(349)

74,322

Total changes during the year
Balance at end of period(6)

Accumulated other comprehensive income
Unrealized
holding gain
(loss) on
securities

Balance at beginning of period

82

Foreign currency
Deferred gain (loss)translation
on hedges
adjustments

225

(583)

Remeasurementsof defined benefit
plans

53

Total
accumulated
othercomprehensive
income(221)

Total net assets

70,586

Changes during period
Cash dividends(779)

Profit attributable to ownersof parent

4,241

Purchase of treasury shares(6)

Disposal of treasury shares

0

Restricted share-based
remuneration
Other changes in the year net

60
77

423

(5)

(17)

477

477

Total changes during the year

77

423

(5)

(17)

477

3,992

Balance at end of period

160

648

(589)

36

256

74,579- 6 -For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)
Shareholders’ equity

Balance at beginning of period

Share capital

Capital surplus

Retained earnings

Treasury shares

7,964

12,862

53,845(349)

Total shareholders’equity74,322

Changes during period
Cash dividends(1,092)(1,092)

Profit attributable to ownersof parent

12,414

12,414Purchase of treasury shares

(5)

(5)

Disposal of treasury shares

0

0

0

Restricted share-based
remuneration

58

24

82

Other changes in the year net–

58

11,322

18

11,398

7,964

12,92065,167(331)

85,721

Total changes during the year
Balance at end of period

Accumulated other comprehensive income
Unrealized
holding gain
(loss) on
securities

Balance at beginning of period

160

Deferred gain (loss)
on hedges

Foreign currencytranslation
adjustments

648

(589)

Remeasurementsof defined benefit
plans

36

Total
accumulated
othercomprehensive
income256

Total net assets

74,579Changes during period
Cash dividends(1,092)

Profit attributable to ownersof parent

12,414Purchase of treasury shares(5)

Disposal of treasury shares

0

Restricted share-based
remuneration

82

Other changes in the year net

515

43

(12)

80

626

626

Total changes during the year

515

43

(12)

80

626

12,025

Balance at end of period

675

692

(601)

117

882

86,604- 7 -4) Consolidated statement of cash flows(Millions of yen)
For the year ended
March 31, 2023
Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Amortization of long-term prepaid expenses
Amortization of guarantee deposits
Increase (decrease) in provision for bonuses
Interest and dividend income
Interest expenses
Expenses for measures against novel infectious
diseaseCommission expenses
Loss (profit) on equity-method investments
Loss on valuation of shares of subsidiaries
Loss on business withdrawal
Loss on impairment of non-current assets(Increase) decrease in trade receivables(Increase) decrease in accounts receivable - other(Increase) decrease in inventories
Increase (decrease) in trade payables
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 refunded
Income taxes paid
Payments of expenses for measures against novel
infectious disease
Payments for loss on business withdrawal
Net cash provided by (used in) operating
activities- 8 -For the year ended
March 31, 2024

6,417
6,117
484
393
956
(238)
575

17,069
6,780
512
391
992
(280)
672

100

–

35
–
–
–
345
(3,354)(2,170)(3,619)
1,047
837
1,486
1,106
(1,707)(171)482(5,025)
441
1,137
2,015
(2,696)432(3,079)
2,143
566
409
(897)
999
517

269

322

2,126
11,038163(586)
0(2,759)681
24,588
171
(672)
1,051
(977)

(100)

–

–

(78)

7,753

24,083

(Millions of yen)
For the year ended
March 31, 2023
Cash flows from investing activities
Purchase of securities
Proceeds from sales of securities
Purchase of property and equipment
Proceeds from sale of property and equipment
Purchase of intangible assets
Purchase of long-term prepaid expenses
Loan advances
Collection of loans receivable
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee
deposits
Investments in insurance funds
Proceeds withdrawn from insurance funds
Other
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings net
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of bonds
Payments of commission for syndicated loans
Purchase of treasury shares
Dividends paid
Other
Net cash provided by financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of theyear
Cash and cash equivalents at the end of the year

*

- 9 -

For the year ended
March 31, 2024

(286)
20
(4,644)
2
(381)
(267)
(102)
183
(1,713)(6,164)
6(22,892)
–
(652)
(555)
(284)
224
(1,742)

415

61

(677)
960
(158)

(431)
1,078
(181)

(6,651)(31,533)300–

26,130(3,520)(5,112)
(2)
(6)
(778)
(27)
16,982

1,970(12,347)(4,880)(428)(5)(1,089)(12)(16,792)

0

22

18,085(24,219)

37,56555,651

55,651*

31,431BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements of KYORITSU MAINTENANCE CO., LTD. (the“Company”) and its consolidated subsidiaries (collectively the “Group”) have been prepared in accordance with theprovisions set forth in the Japanese Financial Instruments and Exchange Act and its related accounting regulations,and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to application and disclosure requirements of International Financial Reporting Standards(“IFRS”).
Current practice has been to retain the classification used in the financial statements.
Japanese yen figures less than one million yen are rounded down to the nearest million yen, except for per sharedata. The total Japanese yen amounts shown in the consolidated financial statements and notes thereto do notnecessarily agree with the sum of the individual amounts.

Notes to Consolidated Financial Statements
Notes - Significant accounting policies for preparation of consolidated financial statements
1. Consolidation(1) Number of consolidated subsidiaries: 11
Names of consolidated subsidiaries
Kyoritsu Estate Co., Ltd.
Kyoritsu Trust Co., Ltd.
Kyoritsu Insurance Service Co., Ltd.
Kyoritsu Foods Service Co., Ltd.
Kyoritsu Oasis Co., Ltd.
Kyoritsu Foods Management Co., Ltd.
Kyoritsu Solutions Co., Ltd.
Kyoritsu Financial Service Co., Ltd.
Builnet Co., Ltd.
Central Builwork Co., Ltd.
Kyoritsu Maintenance Korea Co., Ltd.
(2) Number of non-consolidated subsidiaries: 6
Names of non-consolidated subsidiaries
Kyoritsu Assist Co., Ltd.
Ryokan Okunobo Co., Ltd.
Kyoritsu Maintenance (Thailand) Co., Ltd.
Kyoritsu Maintenance Sriracha Co., Ltd.
Kyoritsu Foods Co., Inc.
Kyoritsu Refre forum Co., Ltd.
Reason for exclusion from scope of consolidation
Non-consolidated subsidiaries are excluded from the scope of consolidation because their total assets,
net sales, profit or loss, and retained earnings have minimal impact on the consolidated financial
statements and are immaterial as a whole, do not have material effects on the consolidated financial
statements.
2. Equity Method Accounting(1) Non-consolidated subsidiaries and associates accounted for by the equity method
Number of non-consolidated subsidiaries accounted for by the equity method: None
Number of affiliates accounted for by the equity method: 1
Name of the equity method affiliate
COSMOS INITIA Co., Ltd.
COSMOS INITIA Co., Ltd. is included in affiliated companies accounted for by the equity method from theyear ended March 31, 2024, due to the acquisition of new shares.
- 10 -

(2) Non-consolidated subsidiaries or associates not accounted for by the equity method
Non-consolidated subsidiaries and affiliates not accounted for by the equity method are Ohshima Forum Co.,
Ltd. and seven other companies. These companies are excluded from the scope of equity method because
their profit or loss and retained earnings have minimal impact on the consolidated financial statements and are
immaterial as a whole.
3.

Disclosure about fiscal years, etc. of consolidated subsidiaries
The fiscal year-end of all consolidated subsidiaries coincides with the consolidated fiscal year-end.

4. Disclosure of accounting policies(1) Valuation criteria and methods for significant assets
1) Securities(i) Held-to-maturity bonds
Measured at amortized cost using the straight-line method.
(ii) Other securities
Other than equity securities without market prices
Measured at fair value (net unrealized gains or losses are reported as a separate component of net
assets, and the cost of securities sold is calculated using the moving-average method).
Equity securities without market prices
Mainly measured at cost determined by the moving-average method.
Investments in investment limited partnerships and other similar partnerships (those regarded as
securities pursuant to Article 2, Paragraph 2 of the Financial Instruments and Exchange Act) arerecorded at the net amount of the Company’s share of equity based on the latest financial
statements available according to the financial reporting dates stipulated in the partnershipagreements.
2)

Derivatives
Derivatives are measured at fair value.

3)

Inventories(i) Costs on uncompleted construction contracts
Stated at cost determined by the specific identification method.
(ii) Real estate held for sale and real estate under construction held for saleStated at the lower of cost, determined by the specific identification method, or net realizablevalue.
(iii) Merchandise and finished goods, and raw materials and supplies
Stated at the lower of cost, determined by the last purchase price method, or net realizable value.

(2) Method of depreciation and amortization of major depreciable and amortizable assets
1) Property and Equipment (except for Leased Assets)
Property and equipment are stated at cost.
Depreciation of property and equipment of the Company and its domestic consolidated subsidiaries iscalculated using the declining-balance method based on the estimated useful lives of the assets, while
the straight-line method is applied to buildings (except for facilities attached to buildings that belong tobusinesses other than the resort business) and facilities attached to buildings and structures acquired on
or after April 1, 2016.
Depreciation of property and equipment of foreign consolidated subsidiaries is calculated using thestraight-line method.
The useful lives of major items are as follows:
Buildings and structures
3 to 47 years- 11 -

2)

Intangible Assets (except for Leased Assets)
Intangible assets are amortized using the straight-line method.
Software for internal use is amortized using the straight-line method over the expected useful life (fiveyears).

3)

Leased Assets
Leased assets are depreciated by the straight-line method based on the assumption that the useful lives
are equal to the lease terms and the residual value is equal to zero.
Finance lease transactions that did not transfer the ownership of the leased assets to the lessee andcommenced on or before March 31, 2008 are accounted for as operating lease transactions.

(3) Method of accounting for deferred assets
Bond issuance costs
Amortized using the straight-line method over the period up to the redemption of the bonds.
(4) Accounting for significant allowances and provisions
1) Allowance for Doubtful Accounts
Allowance for doubtful accounts is provided for possible losses arising from trade receivables, loans
receivable, and other receivables at an amount determined based on the historical experience of bad
debts with respect to normal receivables, and an estimate of uncollectible amounts determined byreference to specific doubtful receivables from customers who are facing financial difficulties.
2)

Provision for Bonuses
Employees’ bonuses are accrued at the end of the year to which such bonuses are attributable.

3)

Provision for Bonuses for Directors
Directors’ bonuses are accrued at the end of the year based on the estimated amounts payable.

4)

Provision for Retirement Benefits for Directors
Retirement benefits for directors are recorded at an amount required to be paid at the end of the year
based on internal rules.
The Company and its six domestic consolidated subsidiaries revised the rules on retirement benefits for
directors in March 2002 and June 2008, respectively, and have not provided the corresponding amountfor directors since April 2001 and July 2008, respectively.

5)

Provision for Loss on Business Withdrawal
To provide for losses on withdrawals from businesses, the amounts expected to be incurred in the future
are recorded.

(5) Method of recognizing retirement benefits
1) Method of attributing estimated retirement benefits to periods
Retirement benefit obligations are attributed to periods on a benefit formula basis.
2)

Method of amortizing actuarial gains or losses and past service cost
Prior service cost is amortized as incurred by the straight-line method over a fixed period (three or five
years), which is shorter than the average remaining years of service of the employees.
Actuarial differences are amortized from the year following the year in which the differences arerecognized by the straight-line method over a fixed period (three or five years), which is shorter than the
average remaining years of service of the employees.

- 12 -

(6) Recognition of significant revenues and expenses
The Group’s principal businesses are the Dormitory Business, the Hotel Business, the Comprehensive
Building Management Business, the Food Service Business, and the Development Business.
Dormitory Business
The Dormitory Business includes the operation and management of student dormitories, employee
dormitories, Domeal, and contracted dormitories, and provision of rooms and dormitory services based on
occupancy contracts with customers. The Group recognizes rent, management fees, occupation fees, renewal
fees, etc. under such occupancy contracts as revenue in accordance with accounting standards for leases. For
dormitory services, the Group’s performance obligation is satisfied when the rendering of the services iscompleted and therefore revenue is recognized at that point in time. The Group also sells everyday goods toresidents. Because the performance obligation is satisfied when the ownership of the goods is transferred tothe customer, revenue is recognized at that point in time. The transaction price and payment terms for the saleof everyday goods to residents are determined by the sales contracts with the residents.
Hotel BusinessIn the Hotel Business, the Company operates The Dormy Inn (limited-service hotel) and resorts (resort hotel)
businesses, providing customers with lodging, meals, and other services. Since customers receive the benefitof the entire service related to the lodging, the entire service including meals is a single performanceobligation, which is satisfied at the point in time when the rendering of the entire service is completed. For
customers who stay consecutive nights, the Group recognizes revenue as if the performance obligation issatisfied on a nightly basis since the customers receive the benefit of each night. The Group determines thetransaction price and agrees with the customer upon the accommodation reservation. Payment is usuallyaccepted upon check-in or check-out.
Comprehensive Building Management BusinessIn the Comprehensive Building Management Business, the Group is engaged mainly in building management
services including facility management, cleaning, security, and repair of dormitories, hotel facilities, andoffice buildings. These operations are considered to have a single performance obligation to provide services
to organize the occupancy environment of buildings at the appropriate time based on a plan and to maintainthe property in a consistent condition. As these performance obligations are satisfied over the contract period,
the Company recognizes revenue by prorating the transaction price on a monthly basis based on the contract
with the customer. The transaction price and its payment terms are determined by the outsourcing contract.
Food Service BusinessIn the Food Service Business, the Group is mainly engaged in contracted operation such as of hotel
restaurants, contracted food service, and restaurant business. In the businesses of contracted operation such asof hotel restaurants and contracted food service, the Group mainly contracts to provide services incidental to
the Company’s Hotel and Dormitory Businesses. Because the performance obligation is satisfied when therendering of the services is completed, revenue is recognized at that point in time. Transaction price andpayment terms are determined by contract. In the restaurant business, the Group provides meal services tocustomers, and the performance obligation is satisfied when the rendering of the services is completed so theGroup recognizes revenue at that point in time. The transaction price is determined by the Group and agreed
with the customer upon a meal order. Payment is usually received at the time the customer leaves the venue.
Development BusinessIn the Development Business, the Company is engaged in real estate planning, design, construction,brokerage business, the condominium business, the real estate sale and leaseback business, etc. In theconstruction business, the Group performs construction work based on construction contracts with customers.
Under such construction contracts, the value of the property increases and the customer takes control of theasset as the Group proceeds with the construction of the main body of the property. The performanceobligation is an obligation that is satisfied over a specified period of time, and is satisfied as the construction
progresses over the contract period. Therefore, in construction projects, etc., revenue is recognized inaccordance with the progress of construction.
- 13 -

Progress is measured by the input method based on cost incurred, as the cost incurred is considered tocontribute to, and be generally proportional to, the entity’s progress in meeting its performance obligations.
However, for projects for which the degree of progress cannot be reasonably measured, the cost recovery
basis is applied until such time as this becomes possible. For other businesses, the performance obligation issatisfied when the rendering or delivery of the services is completed, and revenue is recognized at that point
in time. The transaction price and its payment terms are determined by contract.
With regard to the above performance obligations, no material financial element is included in the amount ofconsideration. There are no material variable considerations that could change the amount of consideration.
In recognizing revenue, the Company uses alternative treatments of materiality, etc.
(7) Foreign currency transactions
Assets and liabilities of foreign subsidiaries are translated into Japanese yen at the spot exchange rate as of thebalance sheet date, and revenue and expense accounts are translated into Japanese yen at the averageexchange rate. Differences arising from such translation are shown as foreign currency translation
adjustments under accumulated other comprehensive income as a separate component of net assets.
(8) Significant hedge accounting methods
1) Hedge accounting
The deferral hedge accounting is applied. However, exceptional method is applied to interest rate swaps
that satisfy the requirements for hedge accounting.
2)

Hedging instruments and hedged items
Interest rate swaps are used as hedging instruments for interest on borrowings.

3)

Hedging policies
The Company has a policy of hedging against the risk of future market fluctuations in interest rates anddoes not engage in speculative transactions or derivative transactions for the purpose of earning shortterm trading profits or losses.

4)

Assessing hedge effectiveness
The Company verifies that the variability rate of the hedged item and the hedging instrument is basicallyin the range of 80% to 125%. However, if the hedge meets the requirements of exceptional method ofinterest rate swaps, assessment of hedge effectiveness has been omitted and replaced with the judgment
thereof.

5)

Other matters
The Group uses interest rate swaps to hedge against interest rate fluctuation risk on borrowings inaccordance with the financing plan approved by the Board of Directors.

(9) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, readily available deposits, and short-term investments thatare readily convertible into cash and that are exposed to insignificant risk of changes in value, all of whichmature or become due within three months of the date of acquisition.
(10) Other key matters for the preparation of consolidated financial statements
There were no items to be reported.

- 14 -

Notes - Significant accounting estimates
1. Impairment of non-current assets (Hotel Business)(1) Amount recorded in the consolidated financial statements for the year ended March 31, 2024
(Millions of yen)
For the year ended
March 31, 2024

For the year ended
March 31, 2023
Loss on impairment relating to the Hotel Business

232

1,726

Property and equipment relating to the Hotel Business

67,07273,533

Intangible assets relating to the Hotel Business

1,347

1,658

(2) Other information for understanding of users of consolidated financial statements
1) Calculation method
The Group classifies assets into asset groups mainly by business location, and of the asset groups forwhich it determines that there are indications of impairment, if the total amount of the undiscounted
future cash flows is less than the carrying amount, then the carrying amount of the asset group is
written down to the recoverable amount and the difference is recognized as an extraordinary loss on the
consolidated statement of income for the year ended March 31, 2024, in accordance with theaccounting standards for the impairment of non-current assets.

2)

3)

The recoverable amount is measured at higher of net realizable value of the asset groups or their value
in use. Net realizable value is determined based on information such as real estate appraisal value, andvalue in use is determined by discounting future cash flows at rates based on profit plans.
Key assumptions
The key assumptions used in the calculation of the recoverable amount of each asset group are average
daily rates, occupancy rates, and discount rates. The average daily rates, occupancy rates, and discountrate are reasonably set based on the information and materials available as of March 31, 2024.
Impact on next year’s consolidated financial statements
There is a high degree of uncertainty in estimating the key assumptions, namely, average daily rates,
occupancy rates, and discount rate for each asset group. If it becomes necessary to revise theseassumptions due to future trends in the Russia-Ukraine issue or changes in economic or financial
conditions, it may affect the loss on impairment of non-current assets for the next year.

2. Recoverability of deferred tax assets(1) Amount recorded in the consolidated financial statements for the year ended March 31, 2024
For the year ended
March 31, 2023

(Millions of yen)
For the year ended
March 31, 2024

Deferred tax assets, net

5,841

3,525

(The amount before offset with deferred tax liabilities)

5,864

3,525

(2) Other information for understanding of users of consolidated financial statements
1) Calculation method
The Group determines the recoverability of deferred tax assets on deductible temporary differences andtax loss carryforwards in consideration of estimated future taxable income based on future businessplans and other factors.
2) Key assumptions
The key assumptions underlying the profit plan, which serve as the basis for estimated taxable income,are the average daily rates and occupancy rates of each business location in the Hotel Business. Theseassumptions are reasonably established based on the information and materials available as of March
31, 2024.

- 15 -

3)

Impact on next year’s consolidated financial statements
There is a high degree of uncertainty surrounding the key assumptions, namely, the resulting average
daily rates and occupancy rates of each business location in the Hotel Business. If it becomes necessary
to revise these assumptions due to future trends in the Russia-Ukraine issue or changes in economic or
financial conditions, the estimated amount of taxable income may change, which may have asignificant impact on the judgment of the recoverability of deferred tax assets.

Notes - Changes in accounting policies
There were no items to be reported.
Notes - Accounting standards issued but not yet effective- “Accounting Standard for Current Income Taxes” (ASBJ Statement No. 27, October 28, 2022)- “Accounting Standard for Presentation of Comprehensive Income” (ASBJ Statement No. 25, October 28, 2022)- “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, October 28, 2022)(1) Overview
In February 2018, “Partial Amendments to Accounting Standard for Tax Effect Accounting,” etc. of ASBJ
Statement No. 28 were announced and the transfer of the Japanese Institute of Certified Public Accountants’practical guidelines on tax effect accounting to the ASBJ were completed, but in the course of thedeliberations, the following two issues, which were to be examined again after the release of ASBJ Statement
No. 28, etc., were deliberated and announced.
• Classification of tax expense (taxation on other comprehensive income)• Tax effect on sale of shares of subsidiaries and other securities (shares of subsidiaries or affiliates) when
the corporate group tax system is applied(2) Scheduled date of application
The Company and its domestic consolidated subsidiaries will apply the accounting standards andimplementation guidance from the beginning of the year ending March 31, 2025.
(3) Impact of application of accounting standards and implementation guidance
The Company and its domestic consolidated subsidiaries are currently in the process of determining theimpact of the “Accounting Standard for Current Income Taxes” and other standards.
Notes - Changes in presentation
Consolidated statement of income“Subsidy income,” which was presented separately under non-operating income for the year ended March 31,
2023, is included and presented in “Other” under non-operating income for the year ended March 31, 2024, as theamount became immaterial.
“Income from guarantee deposits upon cancellation,” which was presented separately under non-operating income
for the year ended March 31, 2023, is included and presented in “Other” under non-operating income for the year
ended March 31, 2024, as the amount became immaterial.
“Commission expenses” which was included in “Other” under non-operating expenses for the year ended March
31, 2023, is presented separately for the year ended March 31, 2024, as the amount became material.
“Loss from natural disasters,” which was presented separately under extraordinary losses for the year ended March
31, 2023, is included and presented in “Other” under extraordinary losses for the year ended March 31, 2024, as theamount became immaterial.

- 16 -

“Loss on facility closure,” which was presented separately under extraordinary losses for the year ended March 31,
2023, is included and presented in “Other” under extraordinary losses for the year ended March 31, 2024, as theamount became immaterial.
In addition, “Dismantling expenses,” which was presented separately under extraordinary losses for the year ended
March 31, 2023, is included and presented in “Other” under extraordinary losses for the year ended March 31,
2024, as the amount became immaterial.
The relevant items in the consolidated financial statements for the year ended March 31, 2023 have been
reclassified in order to reflect these changes.
As a result, in the consolidated statement of income for the fiscal year ended March 31, 2023, “Subsidy income” of
208 million yen, “Income from guarantee deposits upon cancellation” of 111 million yen, and “Other” of 256
million yen under non-operating income were reclassified as “Other” of 577 million yen; “Other” of 350 million
yen under non-operating expenses was reclassified as “Commission expenses” of 35 million yen and “Other” of
314 million yen; and “Loss from natural disasters” of 119 million yen, “Loss on facility closure” of 111 million
yen, “Dismantling expenses” of 119 million yen, and “Other” of 21 million yen in extraordinary losses have been
reclassified as “Other” of 371 million yen.

Consolidated statement of cash flows“Subsidy income” for “Cash flows from operating activities,” “Income from guarantee deposits upon cancellation,”“Loss from natural disasters,” “Loss on facility closure,” and “Dismantling expenses,” which were presented
separately for the year ended March 31, 2023, are included in “Other” under “Cash flows from operating activities”
for the year ended March 31, 2024, as the amount became immaterial.
“Commission expenses,” which was included in “Other” under “Cash flows from operating activities” for the year
ended March 31, 2023, is presented separately for the year ended March 31, 2024, as the amounts became material.
“Payments of commission for syndicated loans,” which was included in “Other” under “Cash flows from financing
activities” for the year ended March 31, 2023, is presented separately for the year ended March 31, 2024, as theamounts became material.
The relevant items in the consolidated financial statements for the year ended March 31, 2023 have been
reclassified in order to reflect these changes.
As a result, in the “Cash flows from operating activities” for the fiscal year ended March 31, 2023, “Subsidy
income” of negative 208 million yen, “Income from guarantee deposits upon cancellation” of negative 111 million
yen, “Loss from natural disasters” of 119 million yen, “Loss on facility closure” of 111 million yen, “Dismantling
expenses” of 119 million yen, and “Other” of 2,087 million yen were reclassified as “Commission expenses” of 35
million yen and “Other” of 2,126 million yen; and in the “Cash flows from financing activities,” “Other” ofnegative 29 million yen was reclassified as “Payments of commission for syndicated loans” of negative 2 million
yen and “Other” of negative 27 million yen.
Notes - Consolidated balance sheet*1 Of the amount of “Notes and accounts receivable - trade, and contract assets,” the amounts of receivables
arising from contracts with customers and contract assets are as follows:(Millions of yen)
As of March 31, 2023

As of March 31, 2024–
10,968457–
13,698758

Notes receivable - trade
Accounts receivable - trade
Contract assets- 17 -

*2 Of the amount of “Other” under current liabilities, the amount of contract liabilities is as follows:(Millions of yen)
As of March 31, 2023

As of March 31, 2024

418

703

Contract liabilities*3 Investment securities in non-consolidated subsidiaries and associates were as follows:(Millions of yen)
As of March 31, 2023

As of March 31, 2024

737

11,486

Investment securities (equity
securities)*4 Assets pledged as collateral and obligations secured by collateral
Assets pledged as collateral were as follows:(Millions of yen)
As of March 31, 2023
Buildings and structures
Real estate held for sale
Land
Investment securities (Note 2)
Other under investments and otherassets (Note 2)
Total

As of March 31, 2024

2,531
1,891
4,499
20

[1,909][–][2,324]
[–]

2,403
4,731
4,499
20

[1,835][–][2,324]
[–]

20

[–]

15

[–]

8,961
[4,233]
11,669[4,159]Notes: 1. Figures in parentheses represent the book value of assets pledged as collateral.
2. These assets were pledged as collateral for guarantee deposits of the building lots and buildings
transaction business.

The above assets were pledged as collateral for the following liabilities:(Millions of yen)
As of March 31, 2023

As of March 31, 2024

8,460
[–]
8,460

10,430[3,300]10,430Long-term borrowings[Of which, current-portion]
Total

5 Guarantee obligations
The Company provides guarantee obligations as follows:(Millions of yen)
As of March 31, 2023

As of March 31, 2024

2,862

2,770

215
3,077

88
2,858

Guarantee of dormitory/hotel lessor’s
obligations to financial institutions
based on the deposit agreement forguarantee deposits
Other
Total

- 18 -

Notes - Consolidated statement of income*1 Revenue from contracts with customers
Net sales are not presented with revenue from contracts with customers separated from other revenues. The
amount of revenue from contracts with customers has been provided in “Notes to Consolidated Financial
Statements, Notes - Revenue recognition, 1. Information on disaggregation of revenue from contracts withcustomers.”*2 Research and development costs included in general and administrative expenses were as follows:(Millions of yen)
For the year ended
March 31, 2023

For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023)(April 1, 2023 to March 31, 2024)

364

391

*3 Loss on impairment
The Group recognized loss on impairment on the following asset groups:
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
Location

Usage

KYORITSU MAINTENANCE CO., LTD.
Hotel (Higashikawa Town, Kamikawa County, Hokkaido,
Japan)

HotelsAssetcategory
Buildings,
etc. andleaseholdinterests inland(Millions of yen)
Loss onimpairment

232

KYORITSU MAINTENANCE CO., LTD.
Dormitories (Setagaya-ku, Tokyo, Japan and 12 otheroffices)

Dormitories

Buildings,
etc.

50

Kyoritsu Foods Service Co., Ltd.
Restaurants (Minato-ku, Tokyo, Japan and 1 other office)Restaurants

Buildings,
etc.

61

The Group mainly considers each of its offices as a separate asset group. In addition, idle assets with noprospect for future use are treated as a separate group of assets. With respect to the above hotels,
dormitories and restaurants, since there is little prospect for recovery of the invested capital due to asignificant decline in profitability and fair value, the Group wrote down the book values of these assets totheir recoverable amounts and recorded a loss on impairment of non-current assets in extraordinary losses
in the amount of 345 million yen.
The breakdown of loss on impairment of non-current assets was buildings of 303 million yen, structures of
2 million yen, fixtures of 6 million yen, leasehold interests in land of 30 million yen, software of 0 million
yen, and long-term prepaid expenses of 0 million yen.
The recoverable amounts of buildings are measured at their net realizable value based on their appraisal
value made by real estate appraisers, or their value in use, which is calculated by discounting future cash
flows at 4.3%.

- 19 -

For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)
Loss onimpairment

Usage

Asset
category

HotelsBuildings,
etc.

1,726

KYORITSU MAINTENANCE CO., LTD.
Dormitories (Osaka-shi, Osaka, Japan and 42 other offices)

Dormitories

Buildings,
etc.

211

KYORITSU MAINTENANCE CO., LTD.
Restaurants (Minato-ku, Tokyo, Japan and 1 other office)Restaurants

Buildings,
etc.

77

Kyoritsu Oasis Co., Ltd.
Restaurant (Nakano-ku, Tokyo, Japan)

Restaurants

Buildings,
etc.

0

Location
KYORITSU MAINTENANCE CO., LTD.
Hotels (Yuzawa-shi, Akita, Japan and 8 other offices)

The Group mainly considers each of its offices as a separate asset group. In addition, idle assets with noprospect for future use are treated as a separate group of assets. With respect to the above hotels,
dormitories and restaurants, since there is little prospect for recovery of the invested capital due to asignificant decline in profitability and fair value, the Group wrote down the book values of these assets totheir recoverable amounts and recorded a loss on impairment of non-current assets in extraordinary losses
in the amount of 2,015 million yen.
The breakdown of loss on impairment of non-current assets was buildings of 1,582 million yen, structuresof 119 million yen, fixtures of 9 million yen, land of 299 million yen, and right to use facilities of 5 million
yen.
The recoverable amounts of buildings are measured at their net realizable value based on their appraisal
value made by real estate appraisers, or their value in use, which is calculated by discounting future cash
flows at 4.3%.

- 20 -

Notes - Consolidated statement of comprehensive income* Reclassification adjustments to profit or loss and tax effects related to other comprehensive income(Millions of yen)
For the year ended
March 31, 2023

For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023)(April 1, 2023 to March 31, 2024)

111
–
111
(34)

742
–
742
(227)

77

515

610
–
610
(186)

63
–
63
(19)

423

43

(5)

(12)

(9)
(14)
(24)
7
(17)
477

128
(12)
116
(35)
80
626

Unrealized holding gain (loss) on securities:
Gains (losses) arising during the year
Reclassification adjustments to profit or loss
Amount before tax effectTax effectUnrealized holding gain (loss) on
securities
Deferred gain (loss) on hedges:
Gains (losses) arising during the year
Reclassification adjustments to profit or loss
Amount before tax effectTax effect
Adjustments to deferred gain (loss) onhedgesForeign currency translation adjustments:
Gains (losses) arising during the year
Remeasurements of defined benefit plans:
Gains (losses) arising during the year
Reclassification adjustments to profit or loss
Amount before tax effectTax effectRemeasurements of defined benefit plans
Total other comprehensive income- 21 -

Notes - Consolidated statement of changes in net assets
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
1. Class and number of shares issued and treasury shares(Thousands of shares)
April 1, 2022

Increase

Decrease

March 31, 2023

Shares issued
Common shares

39,219––39,219Total

39,219––39,219Common shares (Notes 1, 2)

230

1

12

219

Total

230

1

12

219

Treasury shares

Notes: 1.
2.

The increase in treasury shares of 1 thousand shares was due to the purchase of shares of less than one unit.
The decrease in treasury shares of 12 thousand shares was 0 thousand shares due to requests for thepurchase of additional shares of less than one unit and disposal of treasury shares of 12 thousand shares
under the restricted share-based remuneration plan.

2. Information on share acquisition rights
Year-endbalance
March 31, (Millions of
2023
yen)

Number of shares (Thousands of shares)
Description

Class of sharesClassification
2021 Share Acquisition
Rights(Note)
Total

Note:

Common shares–

April 1,
2022

Increase

Decrease

6,365

–

–

6,365

–

6,365

–

–

6,365

–

The share acquisition rights in the above table are share acquisition rights attached to convertible bonds withshare acquisition rights recorded in liabilities using the lump-sum method.

3. Information on dividends(1) Dividends paid
Resolution
Ordinary general
meeting ofshareholders held on
June 28, 2022
Board of Directors’
meeting held on
November 9, 2022

Class of shares

Total amount(Millions ofyen)

Per shareamount (Yen)Common shares

389

10

Common shares

390

10

Record date

Effective date

March 31, 2022

June 29, 2022

September 30, 2022 December 5, 2022

(2) Dividends whose effective date falls after the end of the year
Resolution

Class ofsharesTotalamount(Millions ofyen)

Source ofdividends

Per shareamount(Yen)

Ordinary general
meeting ofshareholders heldon June 28, 2023

Commonshares468

Retainedearnings

12- 22 -

Record date

Effective date

March 31, 2023

June 29, 2023

For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
1. Class and number of shares issued and treasury shares(Thousands of shares)
April 1, 2023

Increase

Decrease

March 31, 2024

Shares issued
Common shares

39,219––39,219Total

39,219––39,219Common shares (Notes 1, 2)

219

0

15

205

Total

219

0

15

205

Treasury shares

Notes: 1.
2.

The increase in treasury shares of 0 thousand shares was due to the purchase of shares of less than one unit.
The decrease in treasury shares of 15 thousand shares was 0 thousand shares due to requests for thepurchase of additional shares of less than one unit and disposal of treasury shares of 15 thousand shares
under the restricted share-based remuneration plan.

2. Information on share acquisition rights
Year-endbalance
March 31, (Millions of
2024
yen)

Number of shares (Thousands of shares)
Description

Class of shares

April 1,
2023

Increase

Decrease

Common shares

6,365

–

–

6,365

–

–

6,365

–

–

6,365

–

Classification
2021 Share Acquisition
Rights(Note)Total
Note:

The share acquisition rights in the above table are share acquisition rights attached to convertible bonds withshare acquisition rights recorded in liabilities using the lump-sum method.

3. Information on dividends(1) Dividends paid
Resolution
Ordinary general
meeting ofshareholders held on
June 28, 2023
Board of Directors’
meeting held on
November 9, 2023

Class of shares

Total amount(Millions of yen)

Per shareamount (Yen)Common shares

468

12

Common shares

624

16

Record date

Effective date

March 31, 2023

June 29, 2023

September 30, 2023 December 5, 2023

(2) Dividends whose effective date falls after the end of the year
Resolution

Class ofsharesTotalamount(Millions ofyen)

Source ofdividends

Ordinary general
meeting ofshareholders heldon June 26, 2024

Commonshares1,287

Retainedearnings- 23 -Per shareamount (Yen)33

Record date

Effective date

March 31, 2024

June 27, 2024

The Companies Act of Japan provides that an amount equal to at least 10 percent of distributions paid in cash be
appropriated as a legal reserve until the aggregated amount of the legal capital surplus and the legal retained earnings
equals 25 percent of share capital.
The portion of such aggregated amount in excess of 25 percent of share capital may become available for
distributions subsequent to release of such excess to capital surplus and retained earnings.

Notes - Consolidated statement of cash flows* Reconciliation of cash and cash equivalents at the end of the year and the amount recorded in the consolidatedbalance sheet(Millions of yen)
For the year ended
March 31, 2024

For the year ended
March 31, 2023
(April 1, 2022 to March 31,
2023)(April 1, 2023 to March 31,
2024)

56,027(376)
55,65131,807(376)
31,431

Cash and deposits
Time deposits with maturity over three months
Cash and cash equivalents

Notes - Leases
1. Finance lease transactions(As Lessee)
Finance lease transactions that do not transfer ownership
1) Details of leased assets
Property and equipment
Buildings and structures in the Dormitory Business.
2) Method of depreciation of leased assets
As described in “Significant accounting policies for preparation of consolidated financial statements, 4.
Disclosure of accounting policies, (2) Method of depreciation and amortization of major depreciable andamortizable assets.”
Of finance lease transactions that do not transfer the ownership, lease transactions that commenced on or
before March 31, 2008 are accounted for as operating lease transactions. The details are as follows.
(1) Acquisition cost, accumulated depreciation, and net book value of leased property(Millions of yen)
As of March 31, 2023
Accumulated depreciation

Acquisition cost
Buildings and structures
Total

8,010
8,010

5,777
5,777

Net book value
2,233
2,233
(Millions of yen)

As of March 31, 2024
Accumulated depreciation

Acquisition cost
Buildings and structures
Total
Note:

8,010
8,010

6,090
6,090

Net book value
1,920
1,920

Acquisition cost is calculated inclusive of interest expenses because the ratio of the year-end balanceof future minimum lease payments to the year-end balance of property and equipment was low.

- 24 -

(2) Future minimum lease payments as of March 31, 2023 and 2024 were as follows:(Millions of yen)
As of March 31, 2023
Future minimum lease payments
Due within one year
Due in more than one year
Total
Note:

As of March 31, 2024

312
1,920
2,233

312
1,607
1,920

Future minimum lease payments are calculated inclusive of interest expenses because the ratio of theyear-end balance of future minimum lease payments to the year-end balance of property andequipment was low.

(3) Lease payments and depreciation(Millions of yen)

Lease payments
Depreciation

For the year ended
March 31, 2023
(April 1, 2022 to March 31, 2023)
312
312

For the year ended
March 31, 2024
(April 1, 2023 to March 31, 2024)
312
312(4) Method of calculating depreciation equivalent
Depreciation is calculated using the straight-line method based on the assumption that the useful lives of theleased assets are equal to the lease term and the residual value is equal to zero.
(Loss on impairment)
There was no loss on impairment allocated to leased assets.
2. Operating leases
Future minimum lease payments/receipts under non-cancelable operating leases(As Lessee)(Millions of yen)
As of March 31, 2023
Due within one year
Due in more than one year
Total

11,659117,863
129,522

As of March 31, 2024
12,550119,095
131,645(As Lessor)(Millions of yen)
As of March 31, 2023

As of March 31, 2024

Due within one year
1,061
890
Due in more than one year
1,418
1,488
Total
2,480
2,379
Note: The future minimum lease receipts in the above table were related to lease agreements of theDormitory Business, etc.

- 25 -

Notes - Financial instruments
1. Matters concerning the status of financial instruments(1) Group policy for financial instruments
The Group raises required funds mainly through the issuance of corporate bonds and bank borrowings basedon its capital investment plan, and short-term working capital through bank borrowings. Temporary surplus
funds, if any, are invested in highly secure financial assets. In addition to using derivatives to avoid risks as
described below, the Group enters into hybrid financial instrument transactions with embedded derivatives forthe purpose of managing surplus funds. As for such hybrid financial instrument transactions, the Group uses
only those that are judged to be highly secure based on the assessment of their characteristics.
Regarding interest rate-related derivatives, interest rate swap transactions are currently used to convert
variable interest rates of borrowings into fixed interest rates. In the case where interest rate conditions change,
while interest rate swap transactions to convert fixed interest rates into variable interest rates may be used, theGroup intends to use them only for long-term monetary receivables and payables with fixed interest rates tothe extent of achieving the purpose of adjusting to prevailing market interest rates.
(2) Nature and extent of risks arising from financial instruments
Trade receivables, such as notes and accounts receivable - trade, are exposed to customer credit risk. In
addition, securities and investment securities, which consist of held-to-maturity debt securities, equity
securities of other companies held for the purpose of strengthening business relationships with the Group, andsecurities for pure investment purposes, are exposed to the risk of market price fluctuations. While some ofthem take the form of hybrid financial instruments, which are exposed to the risks of fluctuation in stock
prices and foreign currency exchange rates, etc. as well as the credit risk of issuers, the Group does notconduct high-risk transactions based primarily on its policy to guarantee the principal amount. Guarantee andleasehold deposits are pledged in relation to lease agreements. Although they are exposed to debtor credit
risk, they shall, in principle, be returned in a lump sum at the termination of the agreements.
Payment terms of most trade payables, such as notes and accounts payable - trade, are within one month. As
for liabilities such as borrowings and bonds payable, short-term borrowings are primarily for raising funds for
operating transactions, while long-term borrowings, bonds payable, and convertible bonds with shareacquisition rights are primarily for raising funds for capital investments. Some of them are exposed to the riskof interest rate fluctuations. Guarantee deposits received, which are taken as deposits concerning leaseagreements, shall be returned in a lump sum at the termination of the agreements. These obligations are
exposed to liquidity risk.
Derivative transactions are primarily interest rate swaps to hedge fluctuations in the interest rates ofborrowings and bonds payable, and are exposed to the risk of fluctuation in interest rates and counterparty
risk. Information on hedging instruments and hedged items, hedging policy, and assessment of hedge
effectiveness is included in “Significant hedge accounting methods” in the “Disclosure of accounting
policies.”(3) Risk management for financial instruments
1) Credit risk management
As for trade receivables and long-term loans receivable, each responsible department of the Company
monitors the financial positions of major counterparties as necessary, and controls the balances andmaturity dates of receivables of each client so as to detect and mitigate any concerns about collectability as
early as possible, based on its internal rules. The Company’s consolidated subsidiaries manage theirreceivables in the same manner as the Company in accordance with the Company’s internal rules.
Held-to-maturity debt securities consist solely of highly rated debt securities such as government bonds,
and therefore their credit risk is minimal.
The Group enters into derivative transactions to mitigate counterparty risk only with domestic financial
institutions with a sound credit profile.

- 26 -

2) Market risk management
The Company uses interest rate swaps as hedging instruments on each loan contract to hedge thefluctuation in interest rates of borrowings. As for the risk of fluctuation in interest rates, the Company
monitors the market interest rates on a regular basis.
As for securities and investment securities, the Company monitors fair values, stock prices, foreign
currency exchange rates, and financial positions of issuers on a regular basis. In addition, as for securities
other than held-to maturity debt securities, the Company continuously reviews its portfolio taking into
account its relationship with counterparties.
As for derivative transactions, the Company requires authorization procedures based on its administrative
authority rules such as the board of directors’ meetings, and the Corporate Planning Department manages
the balances and maturity dates of derivative transactions. The Company’s consolidated subsidiaries
manage their derivative transactions in the same manner as the Company in accordance with theCompany’s rules.
3) Management of liquidity risk related to fund-raising
The Company manages liquidity risk by maintaining one month’s worth of net sales as liquidity on hand,as well as having the Corporate Planning Department prepare and update funding plans on a timely basis
based on reports from each department.
(4) Supplementary explanation on fair value of financial instruments
The fair values of financial instruments are based on market prices in active markets. If a market price is notavailable, another rational valuation technique is used instead. Since various assumptions and factors arereflected in estimating the fair value, different assumptions and factors could result in a different fair value.
2. Fair value of financial instruments
Book values and fair values of financial instruments, and the difference between the two as of March 31, 2023
and 2024 were as follows.
As of March 31, 2023
(Millions of yen)Book value

Fair value

Difference(1) Investment securities

2,322

2,322

(0)

(2) Guarantee deposits

13,292

12,567(725)(3) Leasehold deposits

19,915

13,684(6,230)Total assets

35,53028,574(6,956)(1) Short-term borrowings

11,60011,600

0

554

554

–

23,46023,686226

30,08237,062

6,979

88,09188,549

458

2,599

2,582

(17)

156,388

164,036

7,648

935

935

–

(2) Short-term guarantee deposits
received(3) Current portion of bonds payable andbonds payable(4) Convertible bonds with shareacquisition rights(5) Current portion of long-termborrowings and long-term borrowings(6) Long-term guarantee deposits received
Total liabilities
Derivatives- 27 -

As of March 31, 2024
(Millions of yen)Book value

Fair value

Difference(1) Investment securities

14,225

11,112(3,113)(2) Guarantee deposits

13,326

12,589(736)(3) Leasehold deposits

20,551

14,003(6,547)

Total assets

48,10237,705(10,397)(1) Short-term borrowings

11,60011,600

0

551

551

–

18,58018,63757

30,05244,36914,317

77,71377,932

218

2,500

2,477

(23)

140,998

155,569

14,570

998

998

–

(2) Short-term guarantee deposits
received(3) Current portion of bonds payable andbonds payable(4) Convertible bonds with shareacquisition rights(5) Current portion of long-termborrowings and long-term borrowings(6) Long-term guarantee deposits received
Total liabilities
Derivatives
(*1)

(*2)
(*3)

The note on cash is omitted. Information on deposits, notes and accounts receivable - trade, and notes andaccounts payable - trade is omitted, because these items are settled in a short period and therefore their fairvalues approximate the book values.
Investment securities include listed affiliates accounted for by the equity method, and the main difference is dueto the market values of these shares.
Equity securities without market prices are not included in “Investment securities.” The amounts of thesefinancial instruments recorded in the consolidated balance sheet are as follows:(Millions of yen)Classification

As of March 31, 2023

As of March 31, 2024

Investments in non-consolidated subsidiaries and affiliates

737

326

Unlisted equity securities

135

143

Investments in silent partnerships

322

322

6

–

Other

- 28 -

Note:

1. Maturity analysis for monetary receivables and securities with contractual maturities
As of March 31, 2023
(Millions of yen)Due in one
year or less

Cash and deposits
Deposits
Notes and accounts
receivable - trade
Investment securities
Held-to-maturity debt
securities
Government andmunicipal bonds
Other securities with
contractual maturities(1) Debt securities (Other)(2) Other
Guarantee deposits
Leasehold deposits
Total

Due after one year
through five years

Due after five years
through ten years

Due after ten years

55,890–––14,753

–

–

–

–

–

20

–

–
–
2,113
799
73,557

–
–
1,654
2,647
4,301

–
–
1,219
2,940
4,179

1,200
6
8,305
13,52823,039Due after one year
through five years

Due after five years
through ten years

Due after ten years

31,528–––17,156

–

–

–

–

–

20

–

–
–
1,217
897
50,800

–
–
2,593
3,253
5,846

–
–
1,089
2,465
3,575

1,200
–
8,426
13,93523,561

As of March 31, 2024
(Millions of yen)Due in one
year or less
Cash and deposits
Deposits
Notes and accounts
receivable - trade
Investment securities
Held-to-maturity debt
securities
Government andmunicipal bonds
Other securities with
contractual maturities(1) Debt securities (Other)(2) Other
Guarantee deposits
Leasehold deposits
Total- 29 -

Note:

2. Maturity analysis for bonds payable, long-term borrowings, and other interest-bearing liabilities
As of March 31, 2023
(Millions of yen)Due in one
year or lessDue after one Due after two Due after three Due after four
year through years through years through years throughtwo years
three years
four years
five years

Due after
five years

Short-term borrowings

11,600

–

–

–

–

–

Bonds payable

4,880

4,880

4,680

4,680

3,080

1,260

Convertible bonds withshare acquisition rights––

30,000–––Long-term borrowings

12,347

13,28911,403

11,06910,63029,350Total

28,827

18,16946,083

15,74913,71030,610

As of March 31, 2024
(Millions of yen)Due in one
year or lessDue after one Due after two Due after three Due after four
year through years through years through years throughtwo years
three years
four years
five years

Due after
five years

Short-term borrowings

11,600

–

–

–

–

–

Bonds payable

4,880

4,680

4,680

3,080

1,260

–

Convertible bonds withshare acquisition rights–

30,000––––Long-term borrowings

15,26011,403

11,06910,630

10,63018,720Total

31,74046,083

15,74913,71011,89018,7203. Breakdown by level of fair values of financial instruments, etc.
Fair values of financial instruments are classified into the following three levels in accordance with theobservability and materiality of inputs for fair value measurement.
Level 1 fair value: Fair value measured by using quoted prices for assets or liabilities that are subject to thefair value measurement concerned which are formed in active markets, of observable
inputs for fair value measurement
Level 2 fair value:

Fair value measured by using inputs for fair value measurement other than Level 1 inputs,of observable inputs for fair value measurement

Level 3 fair value:

Fair value measured by using unobservable inputs for fair value measurement

If multiple inputs that have a material impact on fair value measurement are used, the fair value is classified
into the lowest priority level in fair value measurement, of the levels to which each input belongs.

- 30 -

(1) Financial instruments recorded at fair value in the consolidated balance sheet
As of March 31, 2023
(Millions of yen)Classification
Investment securities
Other securities
Equity securities
Debt securities
Other
Derivative transactions
Interest rate-related derivatives
Total assets

Fair value
Level 1

Level 2

Level 3

Total

1,163

–

–

–

1,079

59

–

–
–

1,163
1,079
59

–

935
2,014

–
–

935
3,237

1,222

As of March 31, 2024
(Millions of yen)Classification
Investment securities
Other securities
Equity securities
Debt securities
Other
Derivative transactions
Interest rate-related derivatives
Total assets

Fair value
Level 1

Level 2

Level 3

Total

1,859

–

–

–

1,119

65

–

–
–

1,859
1,119
65

–

998
2,117

–
–

998
4,043

1,925

(2) Financial instruments other than financial instruments recorded at fair value in the consolidated balance
sheet
As of March 31, 2023
(Millions of yen)Classification
Investment securities
Held-to-maturity debt securities
Government bonds
Guarantee deposits
Leasehold deposits
Total assets
Short-term borrowings
Short-term guarantee deposits
received
Current portion of bonds payable
and bonds payable
Convertible bonds with shareacquisition rights
Current portion of long-termborrowings and long-termborrowings
Long-term guarantee deposits
received
Total liabilities

Fair value
Level 1

Level 2

Level 3

Total

19

–

–
–
–

12,567
13,68426,251
11,600

–
–
–
–
–

19
12,567
13,684
26,271
11,600

–

554

–

554

–

23,686–

23,68637,062––37,062–88,549–88,549

–

2,582

–

2,582

37,062

126,974–

164,036

19- 31 -

As of March 31, 2024
(Millions of yen)Classification
Investment securities
Held-to-maturity debt securities
Government bonds
Guarantee deposits
Leasehold deposits
Total assets
Short-term borrowings
Short-term guarantee deposits
received
Current portion of bonds payable
and bonds payable
Convertible bonds with shareacquisition rights
Current portion of long-termborrowings and long-termborrowings
Long-term guarantee deposits
received
Total liabilities
Note:

Fair value
Level 1

Level 2

Level 3

Total

19

–

–
–
–

12,58914,003
26,593
11,600

–
–
–
–
–

19
12,58914,003
26,612
11,600

–

551

–

551

–

18,637–

18,63744,369––44,369–77,932–

77,932

–

2,477

–

2,477

44,369111,199–

155,569

19

Explanation of valuation techniques used to measure fair value and inputs for fair value measurement
Securities and investment securities
Listed equity securities, investment trusts, government bonds and other debt securities are valued
using quoted prices. Since listed equity securities, investment trusts and government bonds aretraded in active markets, their fair values are classified as Level 1 fair value. On the other hand,because other debt securities held by the Company are infrequently traded in markets and quoted
prices of other debt securities are not regarded as the quoted prices in active markets, their fairvalues are classified as Level 2 fair value.
Derivative transactions
The fair values of interest rate swaps are measured at the quoted price obtained from financial
institutions, and classified as Level 2 fair value. However, interest rate swaps accounted for using
the exceptional method are accounted for together with the hedged long-term borrowings.
Therefore, their fair values are included in the fair values of the relevant long-term borrowings.
(refer to “Long-term borrowings” below)
Guarantee deposits and leasehold deposits
The fair values of guarantee deposits and leasehold deposits are stated at present value calculated
based on the amount of receivables discounted by interest rates that take into account thecontractual periods and credit risk for each receivable categorized according to certain periods,
and classified as Level 2 fair value.
Convertible bonds with share acquisition rights
The fair values of convertible bonds with share acquisition rights are measured using quoted
prices. Because convertible bonds with share acquisition rights are traded in active markets, theirfair values are classified as Level 1 fair value.

- 32 -

Short-term borrowings, and current portion of long-term borrowings and long-term borrowings
The book values of short-term borrowings, and current portion of long-term borrowings and longterm borrowings with variable interest rates approximate the fair values because the interest rates
reflect market interest rates in the short term, and the Company’s credit status has not changed
significantly since initiating the borrowings. Therefore, the book values are used for their fairvalues. Those with fixed interest rates are stated at present value calculated based on the total
amount of principal and interest (*) categorized according to certain periods discounted by interest
rates that take into account the periods up to maturity and credit risk. All the fair values areclassified as Level 2 fair value.
(*) For borrowings hedged by interest rate swaps subject to the exceptional method, the total
amount of principal and interest is calculated using the rates of the said interest rate swaps
Short-term guarantee deposits received and long-term guarantee deposits received
The fair values of short-term guarantee deposits received and long-term guarantee deposits
received are stated at present value calculated based on the amount of liabilities categorizedaccording to certain periods discounted by interest rates that take into account the periods up to
maturity and credit risk, and classified as Level 2 fair value.
Current portion of bonds payable and bonds payable
The fair values of current portion of bonds payable and bonds payable are stated at present value
calculated based on the total amount of principal and interest discounted by interest rates that take
into account their remaining periods and credit risk, and classified as Level 2 fair value.

- 33 -

Notes - Securities
1. Held-to-maturity debt securities
As of March 31, 2023
Type(1) Government andmunicipal bonds
Debt securities with fairvalue exceeding bookvalue

Debt securities with fairvalue not exceeding
book value

Book value(Millions of yen)
Difference

Fair value–––(2) Corporate bonds

–

–

–

(3) Other–––

Subtotal–––(1) Government andmunicipal bonds

20

19

(0)

(2) Corporate bonds

–

–

–

(3) Other

–

–

–

20

19

(0)

20

19

(0)

Subtotal
Total

As of March 31, 2024
Type(1) Government andmunicipal bonds
Debt securities with fairvalue exceeding bookvalue

Debt securities with fairvalue not exceeding
book value

Book value(Millions of yen)
Difference

Fair value–––(2) Corporate bonds

–

–

–

(3) Other–––

Subtotal–––(1) Government andmunicipal bonds

20

19

(0)

(2) Corporate bonds

–

–

–

(3) Other

–

–

–

20

19

(0)

20

19

(0)

Subtotal
Total- 34 -

2. Other securities
As of March 31, 2023
Type

Securities with bookvalue exceedingacquisition cost

Securities with bookvalue not exceedingacquisition cost

Book value(1) Equity securities(2) Debt securities
1) Government
and municipal
bonds2) Corporate
bonds3) Other(3) Other
Subtotal(1) Equity securities(2) Debt securities
1) Government
and municipal
bonds2) Corporate
bonds3) Other(3) Other
Subtotal
Total(Millions of yen)
Difference

Acquisition cost

983

594

389

–

–

–

–

–

–

–
–
983
180

–
–
594
217

–
–
389
(37)

–

–

–

–

–

–

1,079
59
1,318
2,302

1,200
59
1,476
2,070

(120)
(0)
(158)
231

Acquisition cost

(Millions of yen)
Difference

As of March 31, 2024
Type

Securities with bookvalue exceedingacquisition cost

Securities with bookvalue not exceedingacquisition cost

Book value(1) Equity securities(2) Debt securities
1) Government
and municipal
bonds2) Corporate
bonds3) Other(3) Other
Subtotal(1) Equity securities(2) Debt securities
1) Government
and municipal
bonds2) Corporate
bonds3) Other(3) Other
Subtotal
Total- 35 -

1,859

811

1,048

–

–

–

–

–

–

–
65
1,925
–

–
59
870
–

–
6
1,054
–

–

–

–

–

–

–

1,119
–
1,119
3,045

1,200
–
1,200
2,070

(80)
–
(80)
974

3. Sales of other securities
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)Type

Proceeds from sales

Realized gain

Realized loss

(1) Equity securities

–

–

–

(2) Debt securities
1) Government andmunicipal bonds

–

–

–

2) Corporate bonds

–

–

–

3) Other

–

–

–

–

–

–

–

–

–

(3) OtherTotal

For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)Type

Proceeds from sales

Realized gain

Realized loss

(1) Equity securities

–

–

–

(2) Debt securities
1) Government andmunicipal bonds

–

–

–

2) Corporate bonds

–

–

–

3) Other

–

–

–

–

–

–

–

–

–

(3) OtherTotal

4. Impairment of securities
The Group recorded an impairment loss of investment securities of 19 million yen (unlisted equity securities of
19 million yen) for the year ended March 31, 2023.
No impairment loss of securities was recorded for the year ended March 31, 2024.
For securities with quoted market prices, if the fair value of the securities declines by 50% or more of theacquisition cost, the acquisition cost will be written down to the fair value. If the fair value of the securities
declines between 30% and 50% of the acquisition cost, the acquisition cost will be written down to the amountdeemed appropriate taking into consideration their recoverability. With respect to the impairment of equity
securities without market prices, if the net asset value declines significantly due, for example, to deteriorationof the financial position of the issuers, the acquisition cost will be written down to the amount deemed
appropriate, taking into consideration their recoverability on a case-to-case basis.

- 36 -

Notes - Derivatives
1. Derivative transactions to which hedge accounting is not applied
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
There were no items to be reported.
For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
There were no items to be reported.
2. Derivative transactions to which hedge accounting is applied
Interest rate-related derivatives
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)Hedge
accounting
methodContract amountType of derivative Major hedged
Contract amount due after one
transactions
item
year
Interest rate
Deferred hedge swaps
Long-term
62,00054,250accounting
Receive variable / borrowings
pay fixed
Exceptional
Interest rate
method forswaps
Long-term
200
100
interest rate
Receive variable / borrowings
swaps
pay fixed
Total

62,20054,350Fair value(Note 1)935

(Note 2)935

Notes: 1. Method for measuring fair value: The fair value is measured at the quoted price obtained
from financial institutions.
2. Interest rate swaps accounted for using the exceptional method are accounted for together
with the hedged long-term borrowings. Therefore, their fair values are included in the fairvalues of the relevant long-term borrowings.

For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)Hedge
accounting
methodContract amountType of derivative Major hedged
Contract amount due after one
transactions
item
year
Interest rate
Deferred hedge swaps
Long-term
54,25046,500accounting
Receive variable / borrowings
pay fixed
Exceptional
Interest rate
method forswaps
Long-term
100–
interest rate
Receive variable / borrowings
swaps
pay fixed
Total

54,35046,500Fair value(Note 1)
998

(Note 2)
998

Notes: 1. Method for measuring fair value: The fair value is measured at the quoted price obtained
from financial institutions.
2. Interest rate swaps accounted for using the exceptional method are accounted for together
with the hedged long-term borrowings. Therefore, their fair values are included in the fairvalues of the relevant long-term borrowings.

- 37 -

Notes - Retirement benefits
1. Outline of retirement benefits plans
The Company and some of its consolidated subsidiaries have defined benefit corporate pension plans and lumpsum retirement payment plans as defined benefit plans, as well as defined contribution pension plans as defined
contribution plans, while other consolidated subsidiaries have lump-sum retirement payment plans. Also, insome cases, the Group may pay additional retirement benefits upon the retirement of employees, etc.
A part of tax-qualified retirement pension plans of the Company and some of its consolidated subsidiaries wastransferred to defined benefit corporate pension plans on March 29, 2011, and the remaining part excluded fromthe transfer due to system revision was liquidated. In addition, certain lump-sum retirement payment plans weresuspended, and defined contribution pension plans were introduced.
Certain consolidated subsidiaries apply the simplified method in the calculation of retirement benefit liability
and asset and retirement benefit expenses under defined benefit corporate pension plans and lump-sum
retirement payment plans.
2. Defined benefit plans(1) Changes in retirement benefit obligations, excluding plans applying the simplified method, for the years
ended March 31, 2023 and 2024 were as follows:
For the year ended
March 31, 2023

(Millions of yen)
For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023) (April 1, 2023 to March 31, 2024)

Retirement benefit obligations at the
beginning of the year
Service cost
Interest cost
Actuarial gains and losses
Retirement benefits paid
Retirement benefit obligations at the end of
the year

1,932

1,905

187
13
(15)
(213)

183
13
0
(112)

1,905

1,990

(2) Changes in plan assets, excluding plans applying the simplified method, for the years ended March 31,
2023 and 2024 were as follows:
For the year ended
March 31, 2023

(Millions of yen)
For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023) (April 1, 2023 to March 31, 2024)

Plan assets at the beginning of the year
Expected return on plan assets
Actuarial gains and losses
Contributions by the employer
Retirement benefits paid
Plan assets at the end of the year

1,125
22
(25)
115
(123)
1,113

1,113
22
129
97
(67)
1,294

(3) Changes in retirement benefit liability and asset of defined benefit plans applying the simplified method forthe years ended March 31, 2023 and 2024 were as follows:
For the year ended
March 31, 2023

(Millions of yen)
For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023) (April 1, 2023 to March 31, 2024)

Retirement benefit liability at the beginning of
the year
Retirement benefit expenses
Retirement benefits paid
Contribution to the plans
Net retirement benefit liability and asset at theend of the year
- 38 -

205

238

60
(15)
(12)

79
(16)
(11)

238

290

(4) Reconciliation between the funded status of the plans and the amounts recognized in the consolidatedbalance sheet as of March 31, 2023 and 2024 was as follows:
As of March 31, 2023
Funded retirement benefit obligations
Plan assets
Unfunded retirement benefit obligations
Net defined benefit liability and asset in the
consolidated balance sheet
Retirement benefit asset
Retirement benefit liability
Net defined benefit liability and asset in the
consolidated balance sheet(Millions of yen)
As of March 31, 2024

1,128
(1,302)
(173)
1,203

1,194
(1,498)
(304)
1,290

1,029

986

–
1,029

–
986

1,029

986

(5) The components of retirement benefit expenses for the years ended March 31, 2023 and 2024 were as
follows:
For the year ended
March 31, 2023

(Millions of yen)
For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023) (April 1, 2023 to March 31, 2024)

Service cost
248
263
Interest cost
13
13
Expected return on plan assets
(22)
(22)
Amortization of actuarial gains and losses
(14)
(12)
Retirement benefit expenses
225
242
Note: Retirement benefit expenses of the consolidated subsidiaries applying the simplified method were
included in service cost.

(6) Remeasurements of defined benefit plans, net of tax
The components of remeasurements of defined benefit plans (before tax effects) under other comprehensive
income for the years ended March 31, 2023 and 2024 were as follows:
For the year ended
March 31, 2023

(Millions of yen)
For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023) (April 1, 2023 to March 31, 2024)

Actuarial gain and loss
Total

24
24

(116)
(116)

(7) Remeasurements of defined benefit plans
The components of remeasurements of defined benefit plans (before tax effects) under accumulated othercomprehensive income as of March 31, 2023 and 2024 were as follows:
As of March 31, 2023
Unrecognized actuarial gain and loss
Total

(52)
(52)

- 39 -(Millions of yen)
As of March 31, 2024
(168)
(168)

(8) Plan assets
1) Main components of plan assets
Fair values of plan assets, by major category, as a percentage of total plan assets as of March 31, 2023
and 2024 were as follows:
As of March 31, 2023
Debt securities
Equity securities
General accounts of life insurance companies
Other
Total

27.1%
27.5
44.2
1.2
100.0

As of March 31, 2024
28.0%
30.9
39.7
1.4
100.0

2) Method for establishing long-term expected rate of return on plan assets
The long-term expected rates of return on plan assets have been estimated based on the current andanticipated allocation of plan assets to each asset class and the current and long-term expected rate of
return on the various asset classes.
(9) Calculation basis for actuarial assumption
The main actuarial assumptions used for the years ended March 31, 2023 and 2024 were as follows:
As of March 31, 2023
Discount rates
Long-term expected rates of return on plan
assetsExpected rates of salary increase

As of March 31, 2024

0.1 - 0.9%

0.1 - 0.9%

2.0%

2.0%

2.94 - 6.92%

2.94 - 6.92%

3. Defined contribution plans
The amounts paid to defined contribution plans by the Company and its consolidated subsidiaries is 101 million
yen for the year ended March 31, 2023 and 111 million yen for the year ended March 31, 2024.
Notes - Stock options
There were no items to be reported.

- 40 -

Notes - Tax effect accounting
1. Significant components of deferred tax assets and deferred tax liabilities(Millions of yen)
As of March 31, 2023
Deferred tax assets
Investment securities
Shares of subsidiaries and associates (Note 1)
Allowance for doubtful accounts
Accrued taxes
Provision for bonuses
Retirement benefit liability
Provision for retirement benefits for directors
Dividend income as repayment of investments
Loss on impairment of non-current assets
Asset retirement obligations
Accrued expenses
Unrealized gains
Non-deductible consumption taxes
Allowance for loss on business withdrawal
Tax loss carryforwards (Note 2)
Other
Deferred tax assets subtotal
Valuation allowance relating to tax loss
carryforwards (Note 2)
Valuation allowance relating to total amount of
future deductible temporary differences
Valuation allowance subtotal
Total deferred tax assets
Deferred tax liabilities
Reserve for advanced depreciation of noncurrent assets
Asset retirement obligations
Unrealized holding gain (loss) on securities
Deferred gain (loss) on interest rate swap
hedges
Other
Total deferred tax liabilities
Net deferred tax assets

As of March 31, 2024

70
0
59
95
599
327
80
904
509
438
98
1,119
26
–
5,422
176
9,929

70
136
54
212
901
371
81
904
1,112
448
146
1,282
20
358
2,688
224
9,012

(1,401)(1,457)(1,930)(2,969)(3,332)
6,596(4,427)
4,585

(305)

(301)

(78)
(71)

(76)
(298)

(286)

(305)

(13)
(755)
5,841

(76)
(1,059)3,525

Notes: 1. This item, which was included in other for the year ended March 31, 2023, is presented
separately for the year ended March 31, 2024, as the amount became material.
2. Expected maturity of the deferred tax assets after the balance sheet date for tax loss
carryforwards- 41 -

As of March 31, 2023
(Millions of yen)Due inone yearor less

Due after
one yearthrough
two years

Due after
two years
through
three
years

Due after
three
years
throughfour years

Due after
four years
throughfive years

Due after
five years

Total

Tax loss
38
123
142
172
133
4,812
5,422
carryforwards(*1)
Valuation allowance
(38)
(123)
(142)
(172)
(133)
(792)
(1,401)
Deferred tax assets(*2)
–
–
–
–
–
4,020
4,020
(*1) The amount of tax loss carryforwards was calculated by multiplying the statutory tax rate.
(*2) The Group recorded deferred tax assets of 4,020 million yen as a result of tax loss carryforwards arising fromthe impact of an expansion in COVID-19 infections. The Company and all domestic consolidated subsidiaries
have introduced the group tax sharing system. Accordingly, when determining the recoverability of deferred tax
assets, the future taxable income of the entire total group is used for income taxes (national-level taxes) and thefuture taxable income of each consolidated taxable company is used for local taxes. For tax loss carryforwards,
the Group conducts scheduling of the future expected fiscal years and expected amount of deduction of the tax
loss carryforwards based on estimates of the forecasted future taxable income, and records the amount that is
expected to be recovered as deferred tax assets.
As of March 31, 2024
(Millions of yen)Due inone yearor less

Due after
one yearthrough
two years

Due after
two years
through
three
years

Due after
three
years
throughfour years

Due after
four years
throughfive years

Due after
five years

Total

Tax loss
104
155
187
145
99
1,995
2,688
carryforwards(*1)
Valuation allowance
(104)
(155)
(187)
(145)
(99)
(764)
(1,457)
Deferred tax assets(*2)
–
–
–
–
–
1,230
1,230
(*1) The amount of tax loss carryforwards was calculated by multiplying the statutory tax rate.
(*2) The Group recorded deferred tax assets of 2,688 million yen as a result of tax loss carryforwards arising fromthe impact of an expansion in COVID-19 infections. The Company and all domestic consolidated subsidiaries
have introduced the group tax sharing system. Accordingly, when determining the recoverability of deferred tax
assets, the future taxable income of the entire total group is used for income taxes (national-level taxes) and thefuture taxable income of each consolidated taxable company is used for local taxes. For tax loss carryforwards,
the Group conducts scheduling of the future expected fiscal years and expected amount of deduction of the tax
loss carryforwards based on estimates of the forecasted future taxable income, and records the amount that is
expected to be recovered as deferred tax assets.

- 42 -

2. Reconciliation between the statutory tax rates and the effective tax rates reflected in the consolidated statementof income for the years ended March 31, 2023 and 2024 was as follows:
As of March 31, 2023
Statutory tax rate
(Reconciliation)
Permanent difference due to non-deductible
expenses such as entertainment expenses
Permanent difference due to non-taxable
income such as dividend income
Inhabitant tax on per capita basis
Tax credits
Valuation allowance
Unrealized gains
Differences in tax rates applicable tosubsidiaries
Other - net
Actual effective tax rate after application of tax
effect accounting

As of March 31, 2024

30.63%

30.63%

2.80

1.04(0.24)(9.14)

4.67(2.04)(1.81)(0.05)

1.49(2.11)
6.41(0.02)

0.32(0.09)(0.38)(0.94)

33.90

27.27

3. Accounting for corporate income tax and local corporate income tax or tax effect accounting related to these taxes
The Company and all domestic consolidated subsidiaries have applied the group tax sharing system from the year
ended March 31, 2023. In addition, accounting treatment and disclosure for corporate income tax and local corporate
income tax as well as tax effect accounting are executed in accordance with “Practical Solution on the Accounting
and Disclosure Under the Group Tax Sharing System” (ASBJ PITF No. 42, August 12, 2021).

Notes - Business combinations
There were no items to be reported.
Notes - Asset retirement obligations
Assets retirement obligations recorded in the consolidated balance sheeta. Outline of asset retirement obligations
Obligation to restore the site to its original condition, etc. based on the fixed-term land lease agreements ofa part of the hotel business, etc.
Obligation to restore the site to its original condition, etc. based on the real estate lease agreements of a partof the hotel business, etc.
Obligation costs for the removal of hazardous substances generated from the dismantlement of Groupowned properties.
With respect to certain costs above, the Group reasonably estimates the unrecoverable amounts of theleasehold and guarantee deposits related to the real estate lease agreements, and charges such amount toincome in the year to which such costs are attributable, instead of recording the liabilities as asset
retirement obligations.

- 43 -

b. Calculation method of asset retirement obligations
As for the obligation to restore the site to its original condition, etc. based on the fixed-term land leaseagreements of a part of the hotel business, etc., the Group calculates the amounts of the asset retirement
obligations based on an estimated period of use of such real estate of between 20 years and 51 years
considering the applicable period under such agreements and using discount rates ranging from 0.363% to2.293%.
As for the obligation to restore the site to its original condition, etc. based on the real estate leaseagreements of a part of the hotel business, etc., the Group calculates the amounts of the asset retirement
obligations based on an estimated period of use of such real estate of between 3 years and 20 years
considering the applicable period of depreciation and using discount rates ranging from 0.000% to 3.000%.
As for obligation costs for the removal of hazardous substances generated from the dismantlement ofGroup-owned properties, the Group calculates the amounts of the asset retirement obligations based on an
estimated period of use of such buildings of between 22 years and 25 years considering the applicable
period of depreciation and using discount rates ranging from 1.178% to 2.273%.
c.

Changes in asset retirement obligations(Millions of yen)
For the year ended
March 31, 2023

For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023)(April 1, 2023 to March 31, 2024)

610
3

492
3

(122)

–

0
492

2
499

Balance at the beginning of the year
Unwinding of discountDecrease due to settlement of asset
retirement obligations
Foreign currency translation differences
Balance at the end of the year

- 44 -

Notes - Real estate held for rental
The Group owns dormitories and office buildings (including land) which are held for rental in Tokyo and otherareas.
Book value, net increase or decrease during the year, and fair value of real estate held for rental for the years
ended March 31, 2023 and 2024 were as follows:(Millions of yen)
For the year ended
March 31, 2023

For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023)(April 1, 2023 to March 31, 2024)

Book value
Balance at the beginning of the
40,01837,192year
Net increase (decrease) during the(2,825)23
year
Balance at the end of the year
37,192
37,216
Fair value at the end of the year
54,60355,665
Notes: 1. Book value represents acquisition cost less accumulated depreciation and accumulated impairment losses.
2. Fair value at the end of the year is primarily calculated by real estate appraisers based on the real estateappraisal standard (including amounts for which adjustments were made using indicators, etc.).

Income and expenses in relation to real estate held for rental for the years ended March 31, 2023 and 2024 wereas follows:(Millions of yen)
For the year ended
March 31, 2024

For the year ended
March 31, 2023
(April 1, 2022 to March 31, 2023)

Rental income
Rental expenses
Net
Other

(April 1, 2023 to March 31, 2024)

6,337
3,667
2,670
0

Note: Rental income and rental expenses were included in net sales and cost of sales, respectively.

- 45 -

6,519
3,749
2,770
0

Notes - Revenue recognition
1. Information on disaggregation of revenue from contracts with customers.
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Reportable Segments

Dormitory

Comprehensive
Food Service Development
Building
Management

Hotel

Subtotal

Other(Note 1)

Total

Student dormitories

4,623

–

–

–

–

4,623

–

4,623

Employee dormitories

2,638

–

–

–

–

2,638

–

2,638

84

–

–

–

–

84

–

84

Contracted
dormitories

4,041

–

–

–

–

4,041

–

4,041

Dormy Inn–

57,603–––57,603–57,603

Resort–43,298–––43,298–43,298

Office-building
management
Residential building
management

–

–

4,208

–

–

4,208

–

4,208

–

–

3,384

–

–

3,384

–

3,384

Food Service

–

–

–

1,262

–

1,262

–

1,262

Development

–

–

–

–

410

410

–

410

Other

–

–

–

–

–

–

14,14014,14011,388100,902

7,592

1,262

410

121,555

14,140135,696

38,642

–

198

–

161

39,002930

39,93350,030100,902

7,791

1,262

571

160,558

15,071

175,630

DomealRevenue fromcontracts withcustomers
Other revenue(Note 2)
Sales to externalcustomers

Notes: 1. The “Other” segment consists of the following businesses not included in the reportable segments: theSenior Life Business (management and operation of senior residences), the Public Kyoritsu Partnership(PKP) Business (services provided under contract to local governments), support for people who live
alone, the insurance agency business, comprehensive human-resource services, the financial business, theadministrative outsourcing business, and other businesses incidental thereto.
2. Other revenues include interest income, etc. under the ASBJ Statement No. 10 “Accounting Standard for
Financial Instruments” and rental income, etc. under the ASBJ Statement No. 13 “Accounting Standard
for Lease Transactions.”- 46 -

For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)
Reportable Segments

Dormitory

Comprehensive
Food Service Development
Building
Management

Hotel

Subtotal

Other(Note 1)

Total

Student dormitories

5,508

–

–

–

–

5,508

–

5,508

Employee dormitories

2,755

–

–

–

–

2,755

–

2,755

90

–

–

–

–

90

–

90

Contracted
dormitories

3,851

–

–

–

–

3,851

–

3,851

Dormy Inn–

72,753–––72,753–72,753

Resort–52,680–––52,680–52,680

Office-building
management
Residential building
management

–

–

4,355

–

–

4,355

–

4,355

–

–

3,285

–

–

3,285

–

3,285

Food Service

–

–

–

1,651

–

1,651

–

1,651

Development

–

–

–

–

1,477

1,477

–

1,477

Other

–

–

–

–

–

–

14,35914,35912,206

125,433

7,640

1,651

1,477

148,409

14,359

162,769

39,856

–

143

–

176

40,175

1,180

41,35652,062

125,433

7,784

1,651

1,653

188,585

15,540204,126

DomealRevenue fromcontracts withcustomers
Other revenue(Note 2)
Sales to externalcustomers

Notes: 1. The “Other” segment consists of the following businesses not included in the reportable segments: theSenior Life Business (management and operation of senior residences), the Public Kyoritsu Partnership(PKP) Business (services provided under contract to local governments), support for people who live
alone, the insurance agency business, comprehensive human-resource services, the financial business, theadministrative outsourcing business, and other businesses incidental thereto.
2. Other revenues include interest income, etc. under the ASBJ Statement No. 10 “Accounting Standard for
Financial Instruments” and rental income, etc. under the ASBJ Statement No. 13 “Accounting Standard
for Lease Transactions.”

2. Information that forms the basis for understanding revenue from contracts with customers
Information that forms the basis for understanding revenue from contracts with customers is as described in“Notes - Significant accounting policies for preparation of consolidated financial statements, 4. Disclosure ofaccounting policies, (6) Recognition of significant revenues and expenses.”- 47 -

3. Information on relation between satisfaction of performance obligations under contracts with customers andcash flows arising from these contracts, and amount and timing of revenue expected to be recognized in andafter the year ending March 31, 2025 from contracts with customers that existed at the end of the year ended
March 31, 2024
(1)

Balances of contract assets and contract liabilities, etc.
Opening balance and closing balance of receivables arising from contracts with customers, contract assets andcontract liabilities are as follows.
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Opening balance
Closing balance(April 1, 2022)(March 31, 2023)
Receivables arising from contracts
8,109
10,968with customers
Contract assets
400
457
Contract liabilities
11418
Receivables arising from contracts with customers represent accounts receivable - trade and notes receivable - trade
for which the rights to payment had become unconditional as at the end of the fiscal year, and others.
Contract assets relate to the Group’s rights to consideration for works that have created assets controlled bycustomers but not been billed as at the end of the fiscal year. Contract assets are reclassified to receivables when therights to payment become unconditional.
Contract liabilities represent the Group’s obligations to transfer goods or services to customers for which the Group
received consideration from customers or which have become due for receiving consideration.
Of revenue recognized during the year ended March 31, 2023, revenue included in the opening balance of contract
liabilities is 11 million yen. There is no revenue that was recognized in the year ended March 31, 2023 fromperformance obligations that were satisfied in past periods.
For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
Opening balance(April 1, 2023)(Millions of yen)
Closing balance(March 31, 2024)

Receivables arising from contracts
10,968
13,698with customers
Contract assets
457
758
Contract liabilities
418
703
Receivables arising from contracts with customers represent accounts receivable - trade and notes receivable - trade
for which the rights to payment had become unconditional as at the end of the fiscal year, and others.
Contract assets relate to the Group’s rights to consideration for works that have created assets controlled bycustomers but not been billed as at the end of the fiscal year. Contract assets are reclassified to receivables when therights to payment become unconditional.
Contract liabilities represent the Group’s obligations to transfer goods or services to customers for which the Group
received consideration from customers or which have become due for receiving consideration.
Of revenue recognized during the year ended March 31, 2024, revenue included in the opening balance of contract
liabilities is 418 million yen. There is no revenue that was recognized in the year ended March 31, 2024 fromperformance obligations that were satisfied in past periods.
(2)

Transaction price allocated to remaining performance obligations
Information on the total amount of transaction price allocated to remaining performance obligations and period
during which revenue is expected to be recognized is omitted, because there is no such period exceeding one year.

- 48 -

Notes - Segment information, etc.
[Segment information]
1. General information of reportable segments
The Group’s reportable segments are components for which separate financial information is available andwhose operating results are regularly reviewed by the board of directors to decide on the allocation ofoperating resources and assess their performance.
The Group establishes business sections for individual services (or subsidiaries for some services) within
the Group. Each business section or subsidiary drafts strategies and engages in business activities for its
services.
Accordingly, the Group consists of service-specific segments based on these business sections andsubsidiaries. Its five reporting segments are the Dormitory Business, the Hotel Business, theComprehensive Building Management Business, the Food Service Business, and the Development
Business.
The outline of the respective reportable segments are as follows:
Dormitory Business: Operation and management of student dormitories, employee dormitories, Domeal,and contracted dormitories
Hotel Business: The Dormy Inn (limited-service hotel) and resorts (resort hotel) businesses
Comprehensive Building Management Business: Office-building management and residential building
management
Food Service Business: Businesses related to restaurants, contracted food service, hotel restaurants, andother facilities operated under contract
Development Business: Construction, planning, design, and brokerage businesses, the condominium
business, the real-estate sale and leaseback business, and other development-related businesses
2. Methods to determine amounts of net sales, profit or loss, assets and other items of each segment
The accounting policies of each reportable segment are consistent with those disclosed in “Notes Significant accounting policies for preparation of consolidated financial statements.”
Segment profit is based on operating profit.
Intersegment sales and transfers are determined based on prevailing market prices.

- 49 -

3. Information about net sales, profit or loss, assets and other items by reportable segment
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Reportable Segments
Comprehensive
Building
Management

Food
Service

Development

Subtotal

Other(Note 1)

Total

Adjustment Consolidated(Note 2)
(Note 3)

Dormitory

Hotel

50,030100,902

7,791

1,262

571

160,558

15,071

175,630–

175,630327

151

10,802

8,265

1,235

20,781

613

21,394(21,394)–

Total

50,358101,053

18,593

9,528

1,807

181,340

15,684

197,025(21,394)

175,630

Segment profit (loss)

4,558

5,513

671

183

133

11,059(55)

11,004(3,677)

7,326

Segment assets

56,022

108,896

15,7382,549

24,243

207,450

16,489223,940

48,367272,308

1,522

4,385

45

32

42

6,028

135

6,163

(46)

6,117

50

232

–

61

–

345

–

345

–

345

1,878

11,74544132

813,809152

13,961(623)

13,338Net sales
Sales to externalcustomers
Intersegment sales ortransfers

Other
Depreciation
Loss on impairment
of non-current
assetsIncrease in property
and equipment, andintangible assets

Notes: 1.

2.

The “Other” segment consists of the following businesses not included in the reportable segments: theSenior Life Business (management and operation of senior residences), the Public Kyoritsu Partnership(PKP) Business (services provided under contract to local governments), support for people who live
alone, the insurance agency business, comprehensive human-resource services, the financial business,
the administrative outsourcing business, and other businesses incidental thereto.
The details of the adjustments were as follows:(Millions of yen)Segment profit (loss)
Elimination of intersegment transactions(11)

Corporate expenses (Note)(3,666)

Total(3,677)

Note: Corporate expenses primarily consist of expenses related to the administrative departments suchas the accounting department at the head office.
(Millions of yen)Segment assets
Elimination of intersegment transactions(15,781)

Corporate assets (Note)

64,149Total

48,367

Note: Corporate assets consist of cash and deposits at the head office, investment securities, assets of
the administrative departments, and deferred tax assets.
3.

Segment profit (loss) is adjusted with operating profit in the consolidated statement of income.

- 50 -

For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)(Millions of yen)
Reportable Segments
Comprehensive
Building
Management

Food
Service

Development

Subtotal

Other(Note 1)

Total

Adjustment Consolidated(Note 2)
(Note 3)

Dormitory

Hotel

52,062

125,433

7,784

1,651

1,653

188,585

15,540204,126–

204,126240

136

14,819

9,452

1,969

26,619649

27,269(27,269)–

Total

52,303

125,570

22,604

11,103

3,623

215,205

16,190231,396(27,269)

204,126

Segment profit (loss)

5,881

14,843

824

208

340

22,098(310)

21,788(5,079)16,708Segment assets

59,209118,672

16,3092,525

27,565224,283

16,775241,059

29,862

270,921

1,525

5,006

60

38

42

6,672

130

6,802

(21)

6,780

211

1,727

–

77

–

2,015

–

2,015

–

2,015

3,900

14,089

121

192

4

18,308271

18,579(675)

17,904

Net sales
Sales to externalcustomers
Intersegment sales ortransfers

Other
Depreciation
Loss on impairment
of non-current
assetsIncrease in property
and equipment, andintangible assets

Notes: 1.

2.

The “Other” segment consists of the following businesses not included in the reportable segments: theSenior Life Business (management and operation of senior residences), the Public Kyoritsu Partnership(PKP) Business (services provided under contract to local governments), support for people who live
alone, the insurance agency business, comprehensive human-resource services, the financial business,
the administrative outsourcing business, and other businesses incidental thereto.
The details of the adjustments were as follows:(Millions of yen)Segment profit (loss)
Elimination of intersegment transactions(563)

Corporate expenses (Note)(4,516)

Total(5,079)Note: Corporate expenses primarily consist of expenses related to the administrative departments suchas the accounting department at the head office.
(Millions of yen)Segment assets
Elimination of intersegment transactions(15,609)

Corporate assets (Note)

45,471

Total

29,862

Note: Corporate assets consist of cash and deposits at the head office, investment securities, assets of
the administrative departments, and deferred tax assets.
3.

Segment profit (loss) is adjusted with operating profit in the consolidated statement of income.

- 51 -

[Information associated with reportable segments]
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
1. Information by product and service(Millions of yen)Student
dormitories

Sales toexternalcustomers

Employeedormitories

DomealContracted
dormitories

27,983 13,091

4,914

4,041

Dormy Inn

Resort57,603 43,298

OfficeResidentialbuildingbuilding
Food Service Development
management management

4,371

3,419

1,262

Other

Consolidated

571 15,071 175,630

2. Information by geographical area
(1) Net sales
This information is omitted because sales to external customers in Japan exceeded 90% of net sales in
the consolidated statement of income.
(2) Property and equipment
This information is omitted because the balance of property and equipment in Japan exceeded 90% of
the total balance of property and equipment in the consolidated balance sheet.
3. Information by major customer
This information is omitted because the Group does not have any major customers that account for 10% ormore of net sales in the consolidated statement of income.
For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
1. Information by product and service(Millions of yen)Student
dormitories

Sales toexternalcustomers

Employeedormitories

DomealContracted
dormitories

29,949 13,258

5,003

3,851

Dormy Inn

Resort

72,753 52,680

OfficeResidentialbuildingbuilding
Food Service Development
management management

4,489

3,294

1,651

Other

Consolidated

1,653 15,540 204,126

2. Information by geographical area
(1) Net sales
This information is omitted because sales to external customers in Japan exceeded 90% of net sales in
the consolidated statement of income.
(2) Property and equipment
This information is omitted because the balance of property and equipment in Japan exceeded 90% of
the total balance of property and equipment in the consolidated balance sheet.
3. Information by major customer
This information is omitted because the Group does not have any major customers that account for 10% ormore of net sales in the consolidated statement of income.

- 52 -

[Information about loss on impairment of non-current assets by reportable segment]
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
This information is omitted because the same information has been presented in 3. Information about net
sales, profit or loss, assets, and other items by reportable segment.
For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
This information is omitted because the same information has been presented in 3. Information about net
sales, profit or loss, assets, and other items by reportable segment.
[Information about amortization of goodwill and year-end balance of goodwill by reportable segment]
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
There were no items to be reported.
For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
There were no items to be reported.
[Information about gain on negative goodwill by reportable segment]
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
There were no items to be reported.
For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
There were no items to be reported.

- 53 -

[Information on related parties]
For the year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
1. Related party transactions
Transactions of the Company with related parties
Directors and major shareholders, etc. (limited to individuals) of the Company(Millions of yen)Type

Director

Director

Director

Name

Haruhisa
Ishizuka

Koji Nakamura

Yasuo Ohara

Location Capital

–

–

–

Company, etc.
whose majorityof voting rights
is held by a Milestone Co.,
Katsushikadirector and/orLtd.
ku, Tokyo
his/her relative (Notes 2, 3)(including thesaid company’s
subsidiaries)

Business/
occupation

Chairman of the–Company

President of the–Company

Percentage
of voting Relationshiprights (held)

Directly held
2.71%

Directly held
0.02%

Executive Director Directly held–of the Company
0.01%

100

Real estate rental
business, etc.

Directly held
10.94%

Transaction
amountAccounts

Year-endbalance186

Other incurrent assets

16–

Leaseholddeposits

199–

Other incurrent assets

0Receipt ofinterest

0Long-term
loans
receivable

16

Lending of funds–

Other incurrent assets

0Receipt ofinterest

0Long-term
loans
receivable

14

Other incurrent assets

2

Guarantee
deposits

15

Transaction

Rent expenses ofdormitories andhotels
Leasing ofreal estate
Payment ofleaseholddeposits
Lending offunds(Note 4)

Lending offunds(Note 4)

Lending of funds

Leasing of Rent expenses ofreal estate
dormitories

27

Notes: 1. The terms and conditions of the transactions in the above tables are determined in the same way as the terms
and conditions of general transactions with parties unrelated to the Company, and interest rates on funds lentare determined reasonably in consideration of market interest rates.
2. The Company’s chairman, Haruhisa Ishizuka and his relative hold 100% of Milestone Co., Ltd.’s voting
rights.
3. The Company’s chairman, Haruhisa Ishizuka, serves as Milestone Co., Ltd.’s director, and his relative
serves as Milestone Co., Ltd.’s representative director.
4. The above lending of funds was carried out in relation to the purchase of the Company’s shares through onmarket trade, which is in line with the Guidelines on Possession of the Company’s Shares by Officers
established by the Company.

2. Notes on the parent company or significant associates
There were no items to be reported.

- 54 -

For the year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
1. Related party transactions
Transactions of the Company with related parties
Directors and major shareholders, etc. (limited to individuals) of the Company(Millions of yen)
Type

Name

Director

Director

Director

Haruhisa
Ishizuka

Koji Nakamura

Yasuo Ohara

Location Capital

Chairman of the–Company–

President of the–Company–

Percentage
of voting Relationshiprights (held)

Directly held
2.71%

Directly held
0.02%

Executive Director Directly held–of the Company
0.01%

–

Company, etc.
whose majorityof voting rights
is held by a Milestone Co.,
Katsushikadirector and/orLtd.
ku, Tokyo
his/her relative (Notes 2, 3)(including thesaid company’s
subsidiaries)

Business/
occupation

Real estate rental
100business, etc.

Directly held
10.94%

Transaction
amountAccounts

Year-endbalance186

Other incurrent assets

16–

Leaseholddeposits

199–

Other incurrent assets

0Receipt ofinterest

0Long-term
loans
receivable

16

Lending of funds–

Other incurrent assets

0Receipt ofinterest

0Long-term
loans
receivable

14

Other incurrent assets

2

Guarantee
deposits

15

Transaction

Rent expenses ofdormitories andhotels
Leasing ofreal estate
Payment ofleaseholddeposits
Lending offunds(Note 4)

Lending offunds(Note 4)

Lending of funds

Leasing of Rent expenses ofreal estate
dormitories

27

Notes: 1. The terms and conditions of the transactions in the above tables are determined in the same way as the terms
and conditions of general transactions with parties unrelated to the Company, and interest rates on funds lentare determined reasonably in consideration of market interest rates.
2. The Company’s chairman, Haruhisa Ishizuka and his relative hold 100% of Milestone Co., Ltd.’s voting
rights.
3. The Company’s chairman, Haruhisa Ishizuka, serves as Milestone Co., Ltd.’s director, and his relative
serves as Milestone Co., Ltd.’s representative director.
4. The above lending of funds was carried out in relation to the purchase of the Company’s shares through onmarket trade, which is in line with the Guidelines on Possession of the Company’s Shares by Officers
established by the Company.

2. Notes on the parent company or significant associates
Condensed financial information of significant associates
In the fiscal year under review, the significant associate is COSMOS INITIA Co., Ltd., and its condensed
financial statements are as follows:
Total current assets
Total non-current assets

161,999 million yen
11,333

Total current liabilities
Total non-current liabilities

74,10853,621

Total net assets

45,602

Net sales
Profit before income taxes
Profit attributable to owners of parent

124,588
6,673
4,278

- 55 -

Notes - Per share data
(Yen)
For the year ended
March 31, 2023

For the year ended
March 31, 2024

(April 1, 2022 to March 31, 2023)(April 1, 2023 to March 31, 2024)

Net assets per share

956.14

1,109.91

Basic earnings per share

54.38

159.12

Diluted earnings per share

46.52

136.57

Notes: 1. The Company conducted a two-for-one stock split as of April 1, 2024, based on a resolution of the Board of
Directors meeting held on February 9, 2024. Net assets per share, basic earnings per share, and diluted
earnings per share are calculated on the assumption that the stock split was conducted at the beginning of the
fiscal year ended March 31, 2023.
2. The basis for calculating basic earnings per share and diluted earnings per share is as follows:
For the year ended
March 31, 2023

For the year ended
March 31, 2024

(April 1, 2022 to March 31,
2023)(April 1, 2023 to March 31,
2024)(1) Basic earnings per share
Profit attributable to owners of parent
Profit (loss) not attributable to commonshareholders
Profit attributable to owners of parent
attributable to shareholders of common stock
Weighted-average number of common stock
outstanding during the year

(Millions of yen)

4,241

12,414(Millions of yen)––

(Millions of yen)

4,241

12,414(Thousands ofshares)77,99478,020

(20)

(20)

(20)

(20)

12,73012,730(2) Diluted earnings per share
Adjustments to profit attributable to owners of(Millions of yen)
parent(Of the above, interest income (after tax(Millions of yen)equivalent deducted))(Thousands of
Increase in common sharesshares)Outline of potential common stock excluded from the calculationof diluted EPS due to its non-dilutive effect――Notes - Subsequent events(Stock split and partial amendment to the Articles of Incorporation following the stock split)
The Company conducted a stock split and partially amended the Articles of Incorporation on April 1, 2024, in
accordance with the resolution of the Board of Directors meeting held on February 9, 2024.
1. Purpose of the stock split
The reduction of the trading unit price of the Company’s shares is intended to create a more accessible
investment environment for investors, as well as to improve the liquidity of the Company’s shares and further
expand the number of shareholders.
2. Overview of the stock split(1) Method of stock split
With March 31, 2024 as the record date, the common stock held by shareholders of record as of March 31,
2024 will be split at a ratio of 1:2.
- 56 -

(2) Increase in shares resulting from the stock split
Total number of issued shares before the stock split
Increase in shares resulting from this stock split
Total number of issued shares after the stock split
Total number of authorized shares after the stock split

39,219,818
39,219,818
78,439,636
118,000,000(3) Schedule of stock split
Publication date of record date
Record date
Effective date

March 15, 2024
March 31, 2024
April 1, 2024

(4) Effects on per-share information
The effects on per-share information are described in the relevant section.
3. Partial amendment to the Articles of Incorporation following the stock split(1) Reason for amendment to the Articles of Incorporation
In accordance with the stock split, the total number of authorized shares as stipulated in Article 5 of theCompany’s Articles of Incorporation was changed as of April 1, 2024, pursuant to Article 184, Paragraph 2of the Companies Act.
(2) Description of amendment to the Articles of Incorporation
The details of the amendment are as follows:(Underlined parts indicate changes.)
After amendment

Current Articles of Incorporation(Total number of authorized shares)
Article 5
The total number of authorized shares of theCompany shall be 59,000,000.

(Total number of authorized shares)
Article 5
The total number of authorized shares of theCompany shall be 118,000,000.

(3) Schedule of amendment to the Articles of Incorporation
Effective date

April 1, 2024

4. Other(1) Change in the amount of share capital
There is no change in the amount of share capital as a result of this stock split.
(2) Adjustment of conversion priceIn accordance with this stock split, the conversion price of the convertible bonds with share acquisition rights
issued by the Company will be adjusted as follows: The effective date of the adjusted conversion price was
April 1, 2024.
Bond

Conversion price before
adjustment

Euro yen-denominated ConvertibleBond-Type Bonds With Share
Acquisition Rights due 2026

4,713

- 57 -(Yen)
Conversion price after
adjustment
2,356.5

5) Annexed consolidated detailed schedules[Annexed consolidated detailed schedule of corporate bonds]
Company name

KYORITSU
MAINTENANCE CO.,
LTD.

Total

Bond nameDate of issuance

Balance as of
Balance as ofApril 1, 2023 March 31, 2024
(Millions of yen) (Millions of yen)Interest rate
(per annum)

Collateral

Date ofmaturity

20th Series Unsecured
Corporation Bond

March 31, 2015

400
[200]

200
[200]

0.88%

None

March 31,2025

21st Series Unsecured
Corporation Bond

December 30,
2016

3,200
[800]

2,400
[800]

0.52%

None

December30, 2026

22nd Series Unsecured
Corporation Bond

March 31, 2017

1,600
[400]

1,200
[400]

0.39%

None

March 31,2027

23rd Series Unsecured
Corporation Bond

March 31, 2017

1,600
[400]

1,200
[400]

0.50%

None

March 31,2027

24th Series Unsecured
Corporation Bond

March 30, 2018

4,500
[900]

3,600
[900]

0.52%

None

March 30,2028

25th Series Unsecured
Corporation Bond

March 30, 2018

2,350
[470]

1,880
[470]

0.35%

None

March 30,2028

26th Series Unsecured
Corporation Bond

March 30, 2018

2,250
[450]

1,800
[450]

0.14%

None

March 30,2028

27th Series Unsecured
Corporation Bond

March 29, 2019

4,200
[700]

3,500
[700]

0.44%

None

March 30,2029

28th Series Unsecured
Corporation Bond

March 29, 2019

1,800
[300]

1,500
[300]

0.16%

None

March 30,2029

29th Series Unsecured
Corporation Bond

March 29, 2019

1,560
[260]

1,300
[260]

0.27%

None

March 30,2029

Euro yen-denominatedConvertible-Bond-Type
Bonds With Share
Acquisition Rights due
2026(Note)

January 29,
2021

30,082[–]30,052
[–]

None

None

January 29,
2026

–

–

53,542[4,880]48,632[4,880]–––Notes: 1. Figures in brackets represent current portion of bonds payable.
2. The details of convertible bonds with share acquisition rights were as follows:
Euro yen-denominatedBondmaturity due 2026
Type of shares to be issued

Common stock

Issue price of share acquisition rights (Yen)

GratisIssue price of shares (Yen)

4,713

Total issue price (Millions of yen)

30,150Total issue price of shares issued upon exercise ofshare acquisition rights (Millions of yen)–

Percentage of share acquisition rights granted (%)

100
From February 12, 2021
to January 15, 2026

Exercise period for share acquisition rights

Notes: 1. When a holder makes a request to exercise their share acquisition rights, it shall be deemed thatthe full amount to be paid at the exercise of the share acquisition rights has been paid in, and thatthe related bonds with share acquisition rights have been redeemed in full. The said request shallbe deemed to have been made when the share acquisition rights are exercised.
2. On April 1, 2024, the Company conducted a two-for-one stock split. As a result, the issue priceof the shares after April 1, 2024 was adjusted to 2,356.5 yen.

- 58 -

3. At the 45th Ordinary General Meeting of Shareholders (for the year ended March 31, 2024) heldon June 26, 2024, the proposal to pay a year-end dividend of 33 yen per share for theappropriation of surplus was approved and adopted, and the annual dividend for the year ended
March 31, 2024 was decided to be 49 yen per share. In accordance with the conversion priceadjustment clause of the euro yen-denominated convertible-bond-type bonds with shareacquisition rights due 2026, the conversion price was adjusted from 2,356.5 yen to 2,355.0 yen
retrospectively as of April 1, 2024.
3.

Amounts to be redeemed within five years after the consolidated balance sheet date are as follows:(Millions of yen)Due in one year or
less
4,880

Due after one year Due after two years Due after three years Due after four years
through two years through three years through four years through five years
34,6804,680[Annexed consolidated detailed schedule of borrowings]
Balance as of
Balance as ofClassification
April 1, 2023
March 31, 2024
(Millions of yen) (Millions of yen)

3,080

Average interest
rate
(%)

1,260

Repayment term

Short-term borrowings

11,60011,6000.54%–

Current portion of long-termborrowings

12,347

15,2600.70%–

Current portion of lease obligations

41

42

3.36%

–

Long-term borrowings (excluding
current portion)

75,74362,4530.61%

2023 - 2031

Lease obligations (excluding
current portion)

657

614

3.36%

2041

Other interest-bearing liabilities

–

–

–

–

100,390

89,971

–

–

Total

Notes: 1. The average interest rates shown above are the weighted average interest rates applicable to the year-end
balance of the borrowings, etc.
2. The scheduled redemption amounts of long-term borrowings and lease obligations (excluding current
portion) for the five years subsequent to March 31, 2024 were as follows:(Millions of yen)Classification
Long-term borrowings
Lease obligations

Due after one year Due after two years Due after three years Due after four years
through two years through three years through four years through five years
11,403

11,06910,630

10,630

44

46

47

49

[Annexed consolidated detailed schedule of asset retirement obligations]This information is omitted pursuant to the provisions of Article 92-2 of the Ordinance on Consolidated
Financial Statements, since the respective amounts of asset retirement obligations as of April 1, 2023 andMarch 31, 2024 were 1% or less of the total of liabilities and net assets as of the same dates.

- 59 -

(2) Others
1) Quarterly information for the year ended March 31, 2024
(Cumulative period)First quarter

Second quarter

Third quarter

For the year

Net sales (Millions of yen)

46,69998,662

151,096

204,126

Profit before income taxes (Millions of yen)

2,720

7,327

12,394

17,069Profit attributable to owners of parent (Millionsof yen)

1,749

4,704

7,930

12,414

Basic earnings per share (Yen)

22.44

60.30

101.65159.12First quarter

Second quarter

Third quarter

Fourth quarter

22.44

37.87

41.35

57.46

(Three-month period)
Basic earnings per share (Yen)

Note: On April 1, 2024, the Company conducted a two-for-one stock split of its common shares. Net income per sharefor the quarter is calculated on the assumption that the stock split was conducted at the beginning of the fiscal year
ended March 31, 2024.

2) Litigation
There were no items to be reported.

- 60 -