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

Qualitative Information on Consolidated Operating
Results for the nine months Ended December 31,
2022(1) Outline of consolidated operating results
The consolidated operating results of the JAIC Group for the third quarterof the current fiscal year under review (from April 1, 2022 to December31, 2022) recorded operating revenue of 3,377 million yen (up 22.0%year-on-year), operating gross profit of 1,324 million yen (up 17.2 % yearon-year), operating profit of 233 million yen (up 275.3 % year-on-year),ordinary profit of 127 million yen (compared to ordinary loss of 49 million
yen for the same period of the previous fiscal year) and loss attributableto owners of parent of 103 million yen (compared to loss attributable toowners of parent of 227 million yen for the the same period of theprevious fiscal year). The breakdown of operating results are as follows.
(a) Breakdown of operating revenue and operating cost
(Fund management fees)
Fundmanagement

fees

etc.

consistofmanagement

feesandadministrative fees from investment funds. Fund management fees etc.
were 87 million yen (down 2.2 % year-on-year), about the same as yearon-year. The management fees from funds in liquidation process
decreased.
(Investment income)The proceeds of sale of operational investment securities increased to1,996 million yen (up 20.2 % year-on-year). Realized capital gain, whichis calculated by deducting cost of securities sold from proceeds of sales
1 / 10of operational investment securities, also increased to 972 million yen(up 20.3% year-on-year).
As for private equity investment, JAIC had mainly sold Japan listed sharesfor the third quarter of the previous fiscal year. On the other hand, JAIC
sold Japan and overseas unlisted shares, which were relatively large
investment amounts, for the third quarter of the current fiscal year underreview.
As for project-oriented investment, JAIC had sold one mega solar projectand had partially sold one distribution warehouse project for the thirdquarter of the previous fiscal year. On the other hand, JAIC only sold one
mega-solar project for the third quarter of the current fiscal year underreview.
The total amount of investment write-offs and provision for allowance forpossible investment losses increased to 463 million yen (up 176.9 % yearon-year).

JAIC

postedprovisionsforinvesteecompanies

those

experienced significant delays in business progress and for which
negotiation for the recovery of investment took a long time. Compared tothe same period of the previous fiscal year, JAIC posted provisions forinvestee companies which were relatively large investment amounts.
As a result, investment income, which is calculated by deducting
investment write-offs and provision for allowance for possible investment
losses from realized capital gains, decreased to 508 million yen (down20.6 % year-on-year).
(Fund interests income, etc.)
Fund interests income, etc. consist of revenues of the projects operated
by the JAIC Group (such as revenue from electricity sales, revenue fromvegetable sales, rent fee revenue from group homes for the handicappedand other revenues), interests income from the projects operated byother companies (such as net profits of the projects and gains from thesale of projects), interests income from private equity funds operated byother companies, interest and dividend income and other income.
The total amount of fund interests income, etc. for the third quarter ofthe current fiscal year under review increased to 1,278 million yen (up27.9 % year-on-year). Out of this, revenues of the projects operated by
the JAIC Group (such as revenue from electricity sales, revenue from2 / 10

vegetable sales, rent fee revenue from group homes for the handicappedand other revenues) accounted for 568 million yen (down 40.2 % yearon-year). Revenue from electricity sales decreased because JAIC had
sold some mega solar projects that were selling electricity in the previous
fiscal year.
On the other hand, operational dividend income increased to 358 million
yen (up 3,200.4 % year-on-year). JAIC received profit dividends from twologistic warehouse projects those sold their facilities.
Interests income from the projects and private equity funds operated byother companies also increased to 348 million yen (up 924.4 % year-onyear). One healthcare project operated by other company posted capitalgain from selling the facility for the elderly.
(Fund interests losses, etc.)
Fund interests losses, etc. consist of costs of the projects operated by
the JAIC Group (such as cost of electricity sales, cost of producing
vegetables, rental cost of group homes for the handicapped and othercosts), interests losses of the projects operated by other companies(such as losses mainly from projects in the early stage of launch) andinterests losses of the private equity funds operated by other companiesand others.
The total amount of fund interests losses etc. for the current fiscal year
under review decreased to 555 million yen (down 9.2 % year-on-year).
Out of this, costs of the projects operated by the JAIC Group (such ascost of electricity sales, cost of producing vegetables, rental cost ofgroup homes for the handicapped and other costs) accounted for 492
million yen (down 14.0 % year-on-year). Cost of electricity sales
decreased because JAIC had sold some mega solar projects that wereselling electricity in the previous fiscal year.
Interests losses of the projects and private equity funds operated byother companies increased to 62 million yen (up 63.0 % year-on-year).
Interests losses increased mainly from the projects in the initial stagesof launch.
As a result, operating revenue increased by 22.0 % year-on-year to 3,377
million yen, operating cost increased by 25.2 % year-on-year to 2,053
3 / 10million yen and operating gross profit increased by 17.2 % year-on-year
to 1,324 million yen.
(b) Selling, general and administrative expenses and operating income
The total amount of selling, general and administrative expenses
increased to 1,091 million yen (up 2.2 % year-on-year). Administrative
expenses from projects decreased because JAIC had sold some mega
solar projects that were selling electricity in the previous fiscal year. On
the other hand, provision for doubtful accounts increased.
As a result, operating profit was 233 million yen (up 275.3 % year-onyear).
(c) Non-operating income, non-operating expenses and ordinary income
Non-operating income decreased to 36 million yen (down 55.4 % yearon-year). Main reason was a decrease of foreign exchange gains incurred
when recovering assets denominated in foreign currencies.
Non-operating expenses mainly consists of interest expenses anddecreased to 142 million yen (down 26.4 % year-on-year). On the nonconsolidated basis, interest expenses decreased with the reduction ofloans payable. On the consolidated basis, interest expenses also
decreased with the reduction of loans payable because JAIC had soldsome mega solar projects in the previous fiscal year.
As a result, ordinary profit was 127 million yen (compared to ordinary lossof 49 million yen for the same period of the previous fiscal year).
(d) Extraordinary income/loss and Profit
For the third quarter of the previous fiscal year, total amount of
extraordinary income was 19 million yen. Main item was gain on sales ofinvestment securities. For the third quarter of the current fiscal year
under review, the total amount of extraordinary income was only 1 millionyen.
For the third quarter of the previous fiscal year, total amount of
extraordinary loss was 107 million yen. Main item was Loss on sales ofinvestment securities. For the third quarter of the current fiscal year
under review, total amount of extraordinary loss was 9 million yen. Main
4 / 10item was Loss on valuation of investment securities.
As a result, profit before income tax was 119 million yen (compared toloss before income tax of 137 million yen for the same period of theprevious fiscal year).
(e) Loss attributable to owners of parent
Income tax-current increased to 90 million yen (up 2,688.9 % year-onyear) because of an increase of profit before income tax.
JAIC properly estimated tax effect accounting and did not recognize
deferred tax assets for both the third quarter of the current fiscal year
under review and the same period of the previous fiscal year.
Profitattributabletonon-controllingshareholders

istheprofit

attributable to fund investors other than the JAIC Group among theprofits of the funds subject to consolidation. The amount increased to
132 million yen (up 52.7 % year-on-year) as the profits of the funds
subject to consolidation increased.
As a result, loss attributable to owners of parent amounted to 103 million
yen (compared to loss attributable to owners of parent of 227 million yen
for the same period of the previous fiscal year).
(2) Cash flows(Cash flow from operating activities)
Net cash generated from operating activities turned profitable andamounted to 517 million yen (compared to 542 million yen used in for thesame period of the previous fiscal year). Profit before income tax
increased and cash inflow from collection of investments increased.

(Cash flow from investing activities)
Net cash used in investing activities was 2 million yen (compared to 117
million yen generated from for the same period of the previous fiscalyear). There were no proceeds from sale of non-operational investment
securities for the third quarter of the current fiscal year under review.
(Cash flow from financing activities)
Net cash used in financing activities with repayments of long-term
5 / 10borrowings decreased year-on-year to 806 million yen (compared to1,007 million yen for the same period of the previous fiscal year).
Cash and cash equivalents as of December 31, 2022 decreased by 263
million yen from March 31, 2022 to 2,134 million yen, after adding effectof exchange rate change on cash and cash equivalents of 27 million yen.
(3) Financial position(Assets)
Total assets as of December 31, 2022 decreased to 19,393 million yen(compared to 20,231 million yen as of March 31, 2022).
Cash and deposits decreased to 4,044 million yen (compared to 5,666
million yen as of March 31, 2022). Deposits attributable to the investment
funds operated by the JAIC Group decreased because of the payment oftaxes and distributions.
Meanwhile, the amount of the cash and deposits included deposits
attributable to the investment funds operated by the JAIC Group. Those
deposits must be managed in accordance with each fund’s partnershipagreement. The JAIC Group clearly separates and manages those
deposits from cash and deposits belonging to the JAIC Group. Cash anddeposits belonging to the JAIC Group were cash and cash equivalents of
2,134 million yen as of December 31, 2022 (compared to 2,397 million
yen as of March 31, 2022) in the consolidated statements of cash flows.
In addition, private equity investments conducted by the JAIC Group arehighly affected by factors such as stock market fluctuations because of
the nature of their business. It is difficult to make a reasonable forecastof business results in the current volatile environment. As a result, theamount of funds recovered from private equity investments could decline
significantly. Under these circumstances, the JAIC Group must always
maintain a certain balance of cash and deposits to ensure not only thepayment of expenses and interests and the repayment of loans payable
but also the investment for future growth.
Property, plant and equipment mainly consists of assets of projects
operated by the JAIC Group, such as renewable energy power plant
6 / 10facilities, vegetable plant facilities and group homes for the handicapped.
Total amount of property, plant and equipment increased to 4,974 million
yen (compared to 4,148 million yen as of March 31, 2022). JAIC newly
constructed group homes for the handicapped during the third quarter ofthe current fiscal year under review. JAIC also recorded power generation
facilities under planning in construction in progress account.
Operational investment securities consist of private equity investments,
the projects those are operated by the JAIC Group and are in the initialstages of development, and the projects operated by other companies.
Operational investment securities as of December 31, 2022 increased to
9,732 million yen (compared to 9,538 million yen as of March 31, 2022),
mainly because of an increase of unrealized gain from listed shares.
Allowance for possible investment losses as of December 31, 2022
increased to 1,743 million yen (compared to 1,492 million yen as of March31, 2022), because of positing provisions.
As a result, the investment loss provision ratio (ratio of allowance forpossible investment losses to operational investment securities) as ofDecember 31, 2022 was 17.9 %, up 2.3 points from March 31, 2022.
(Liabilities)
Total liabilities decreased to 9,778 million yen as of December 31, 2022
(compared to 10,787 million yen as of March 31, 2022).
Of liabilities, total of loans payable and bonds as of December 31, 2022
decreased to 9,048 million yen (compared to 9,521 million yen as ofMarch 31, 2022). Loans payable of JAIC itself decreased to 5,137 million
yen (compared to 5,943 million yen as of March 31, 2022). As for project
finance and bonds for the projects operated by the JAIC Group, thebalance as of December 31, 2022 increased to 3,911 million yen(compared to 3,578 million yen as of March 31, 2022).
Loans payable of JAIC itself decreased reflecting the repayments for thethird quarter of the current fiscal year under review. After securing
investment funds for future growth, JAIC will repay its loans payable toan appropriate level.
As for loans payable by project finance and bonds for the projects
7 / 10operated by the JAIC Group, the balance increased from the end of theprevious

consolidated

fiscalyear

becausetheamountofnew

procurement exceeded the amount of repayment.
Project finance and bond for the projects operated by the JAIC Group will
limitedly affect the financial soundness of the JAIC Group, since its
source of repayments is limited to the assets and revenues of theprojects. Therefore, the JAIC Group will continue to expand fund raisingthrough project finance and bond. The JAIC Group will promote leveraged
investment in a wide range of projects such as renewable energy projects
operated by the JAIC Group. This enhances profitability of the JAIC Group
without compromising on financial soundness.
(Net assets)
Of net assets, total shareholders’ equity as of December 31, 2022
increased to 7,843 million yen (compared to 7,766 million yen as of March31, 2022). Though loss attributable to owners of parent was posted,
capital surplus and unrealized gains on operational investment securities
increased. On the other hand, total assets also decreased. As a result, theequity ratio as of December 31, 2022 was up 2.0 points to 40.4 %(compared to 38.4% as of March 31, 2022).
Non-controlling interests also increased to 1,737 million yen (comparedto 1,646 million yen as of March 31, 2022) mainly because of increase ofprofits and unrealized gains on operational investment securities ofinvestment funds. As a result, total net assets as of December 31, 2022
also increased to 9,614 million yen (compared to 9,443 million yen as ofMarch 31, 2022).
(4) Business Position(a) Investment and loan activities
For the third quarter of the current fiscal year under review, executionof investments and loans decreased by 19.9 % year-on-year to 2,330
million yen in 23 companies/projects. As of December 31, 2022, thebalance of investments and loans decreased to 13,697 million yen in 132
companies/projects(comparedto13,784

companies/projects as of March 31, 2022).

8 / 10

millionyenin129

Looking at project oriented investment, it decreased by 20.7 % year-onyear to 1,132 million yen in 15 projects that total amount of execution ofinvestments and loans in new projects and in existing projects. The
investment amounts increased in renewable energy projects. JAIC
invested in new projects such as biomass power generation and solar
power systems with storage batteries installed on the rooftops. On theother hand, the investment amounts decreased in a smart agriculture
project and in distribution center projects.
As for investment collection, JAIC sold one mega-solar project, one
healthcare project and one distribution center project during the third
quarter of the current fiscal year under review. Additionally, distributions
from existing projects decreased the balance of project oriented
investments and interest profits/losses also increased/decreased thebalance. As a result, the balance of investments and loans as of December
31, 2022 increased to 6,584 million yen in 50 projects (compared to6,344 million yen in 43 projects as of March 31, 2022).
As of December 31, 2022, JAIC invested in 13 mega solar projects (15power plants) with the capacity of 30.7ＭＷ which are either currently
selling electricity or are under construction or planning. Out of thesemega solar projects, the portion that attributable to JAIC is 13.1ＭＷ incapacity. JAIC also invested in two biomass project with the capacity of4.0ＭＷ, two biogas projects with the capacity of 1.1ＭＷ, one biogas plantoperator, one wind power project with the capacity of 25.2ＭＷ at mostand three solar power systems with storage batteries installed on therooftops with the capacity of 1.2ＭＷ.
Looking at private equity investment, when JAIC’s own capital is invested,
JAIC makes strategic investment in partner companies for project
oriented investment. JAIC invests its own capital in a selective mannerbased on business themes in line with its management philosophy inprinciple. When the capital of a fund is invested, JAIC makes financial
investment pursuant to the fund’s investment policy.
For the third quarter of the current fiscal year under review, it decreasedby 19.1 % year-on-year to 1,198 million yen in 8 companies that total
9 / 10amount of execution of investments and loans in new companies and inexisting companies.
Strategic investments decreased in both number of companies andamounts. Financial investments also decreased because of decrease ofinvestment amounts from the fund supporting the business succession
needs.
As for investment collection, JAIC sold one strategic investee and mainly
sold listed shares in Japan and unlisted shares in China. As a result, thebalance of investments and loans decreased to 7,113 million yen in 82
companies (compared to 7,440 million yen in 86 companies as of March31, 2022).
(b) Management of investment funds
As of December 31, 2022, the number of investment funds, for which theJAIC Group is responsible for management, operation or provision ofinvestment information, totaled 9, and the balance of total commitment
amounts under management decreased to 14,813 million yen (comparedto 10 investment funds with 16,463 million yen as of March 31, 2022).
In the third quarter of the current fiscal year under review, “Succession
Investment Limited Partnership, Ⅱ” was newly established and increased
its commitment amounts to 2,701 million yen. This fund is supporting thebusiness succession needs of SMEs in Japan. On the other hand, twoinvestment funds which total commitment amount of 4,328 million yen
decreased from “Maturity is being extended”. The total commitment
amount in investment funds also decreased by 23 million yen because offoreign exchange fluctuation.

(End)

10 / 10