Kyoritsu Maintenance Co., Ltd.
(Securities Code:9616)

Fiscal Year March 2014
Consolidated Earnings Results Update
May 2014-1-

Kyoritsu Maintenance Consolidated Financial Data at a Glance
120,000

Consolidated Sales and YY Change

35%
30%

100,000

25%
80,00020%

60,00015%
40,00010%
20,0005%

0

0%
3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/143/15Em

Consolidated Operating Income and YY Change
9,000

50%

8,000

40%

7,000

30%

6,000

20%

5,000
10%
4,000
0%

3,000

-10%

2,000

-20%

1,000
0

-30%
3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/14 3/15Em

Consolidated Net Income and YY Change
4,500

140%

4,000

120%
100%

3,500

80%

3,000

60%
2,500
40%
2,000
20%
1,500

0%

1,000

-20%

500

-40%

0
m

-60%
3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/14 3/15E(Units: Million Yen)-2-

160,000
140,000
120,000
100,000

80,00060,00040,00020,0000
3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/14
total assets

net assets(Units: Million Yen)

14.0%
12.0%
10.0%
8.0%

6.0%
4.0%
2.0%
0.0%
3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12 3/13 3/14
ROE

ROA

-3-

Construction, Other, 5,188,
5%
8,180, 7%
Food Service,
4,926, 5%

Dormitories,
40,273, 36%

Contracted
Services,
13,802, 12%

Hotels,39,143, 35%

Business Segment Sales
FY3/13

Construction,
7,577, 7%

Other, 6,955,
6%

Food Service,
5,180, 4%Dormitories,
41,452, 35%

Contracted
Services,
13,025, 11%Hotels,43,475, 37%

Business Segment Sales
FY3/14(Units: Million Yen)-4-yy change
net sales
gross income
operating income
ordinary income
net income

Consolidated Balance S heetcurrent assets
fixed assets
total assets
current liabilities
fixed liabilities
total liabilities
net assets

18.8%
7.6%
7.6%
4.0%

7.3%
3.3%
10.1%
8.6%
9.6%

23,25462,336
85,62031,58533,07764,663
20,788

3/05
58,014
10,894
4,407
4,411
2,343

7.9%
2.1%
26.0%

18.7%
7.3%
7.6%
3.2%

8.7%
8.2%
4.6%
9.4%
-14.2%

23,35074,681
98,04744,03928,31672,35525,512

3/06
63,085
11,783
4,611
4,824
2,011

8.9%
2.2%
24.5%

18.5%
5.6%
5.7%
3.6%

5.1%
3.9%
-18.8%-21.5%
20.0%

24,901
85,562
110,50737,342
46,06883,411
27,096

3/07
66,287
12,242
3,745
3,787
2,413

9.9%
2.4%
23.8%

18.8%
5.9%
5.5%
3.6%

14.1%
15.9%
19.9%
10.0%
13.6%

19,967
95,728
115,738
44,11944,07988,19927,5383/08
75,60614,183
4,492
4,167
2,740

7.4%
1.7%
23.0%

18.8%
6.5%
5.5%
2.6%

8.9%
9.3%
19.1%
8.2%
-22.2%

21,852
103,891
125,793
41,61555,26696,882
28,911

3/09
82,303
15,507
5,349
4,510
2,133

4.2%
0.9%
21.4%

16.5%
4.8%
3.6%
1.5%

2.7%
-10.0%-24.6%-33.2%-41.2%

23,104
115,980
139,20941,49967,956
109,455
29,753

3/10
84,513
13,957
4,033
3,012
1,254

3.5%
0.7%
21.3%

18.1%
5.4%
3.9%
1.2%

0.6%
10.4%
14.3%
9.8%
-16.1%

36,783
104,428
141,31450,54660,600111,147
30,166

3/11
84,983
15,408
4,610
3,308
1,052

7.7%
1.9%
25.1%

19.6%
6.6%
5.0%
2.6%

7.3%
15.9%
30.5%
39.1%
125.7%

28,234
97,319125,649
38,961
55,13594,09731,551

3/12
91,17017,863
6,017
4,602
2,376

9.7%
2.6%
28.4%

20.0%
6.6%
5.6%
3.2%

9.1%
11.5%
8.4%
21.7%
34.9%

30,852
91,335
122,259
38,892
48,58487,47634,782

3/13
99,472
19,910
6,521
5,599
3,206

11.0%
2.9%
26.2%

20.5%
7.1%
6.5%
3.6%

5.8%
8.1%
14.9%
21.4%
19.4%

37,47394,434
131,995
40,81956,586
97,40534,5903/14
105,216
21,524
7,490
6,796
3,829

na
na
na

na
7.1%
6.3%
3.6%

6.5%
na
6.0%
4.5%
4.5%

na
na
na
na
na
na
na

3/15E
112,100
na
7,940
7,100
4,000

Consolidated Income S tatement
net sales
gross income
operating income
ordinary income
net income

margins
gross margins
operating margins
ordinary margins
net margins

11.3%
2.7%
24.3%

other benchmarks
ROE
ROA
net asset ratio
Units: million yen-5-Fiscal Year March 2013 Consolidated Earnings Announcement
May 15, 2014

Company Name:

Kyoritsu Maintenance Co., Ltd.

Stock Code: 9616, URL:

Tokyo Stock Exchange

http://www.kyoritsugroup.co.jp/

Director:

Mitsutaka Sato, President

Contact:

Takumi Ueda, Vice President, Tel: +81-3-5295-7778

General Shareholders Meeting (Anticipated):

June 26, 2014, Dividend Payment Date (Anticipated):

Financial Accounts Filing Date (Anticipated):

June 26, 2014

Earnings Presentation Document:
Earnings Presentation Meeting:June 27, 2014

Available
For institutional investors(Figures of less than one million yen are rounded down to the nearest digit)

1. Fiscal Year March 2014 Consolidated Earnings (From April 1, 2013 to March 31, 2014)(1) Consolidated Earnings (Aggregated)
Net Sales
Operating Income
Ordinary Income% yyMillion yen% yyMillion yen

Million yen

FY3/14105,216
5.8
7,490
14.9
6,796
FY3/13
99,472
9.1
6,521
8.4
5,599
(Note) Comprehensive income: ¥4,059 million (7.1%) in FY3/14, 3,791 million (67.0%) in FY3/13
EPS

Fully Diluted EPS(2) Consolidated Financial Position
Total Assets

FY3/13(Reference) Capital:

% yy

% yy

21.4
21.7

3,829
3,206

19.4
34.9

Ordinary Income to Total
Asset Ratio

Operating Margin

％
5.3
4.5

％
7.1
6.6

Yen
％
271.1311.0―
9.7¥0 in FY3/14, ¥0 in FY3/13

Yen
FY3/14290.23
FY3/13227.21(Reference) Equity accounting method profit:

FY3/14ROE

Net Income
Million yen

Net Assets

Equity Ratio

Million yen

Million yen

131,995

34,590122,259
34,782¥34,590 million in FY3/14, ¥34,782 million in FY3/13(3) Consolidated Cash Flow Conditions
Operating Cash Flow

Investing Cash FlowMillion yen

Million yen

FY3/14

7,692

FY3/13

5,025Book Value per Share
％
26.2

Yen
2,653.13

28.4

2,465.00

Financing Cash Flow

Cash and Equivalents at
Term End

Million yen

Million yen-6,333

5,535

23,7502,039-8,402

16,665

2. Dividend Conditions
Total
Dividend
Payment(Annual)Dividends Per Share
End 1Q
Yen
FY3/13
FY3/14
FY3/15 Est.

―――

End 2QEnd 3Q

Yen

19.00
21.00
24.00

End Year

Yen

―
―
―

-6-

Dividend to
Dividend
Net Asset
Payout Ratio
Ratio(Consolidated) (Consolidated)

Full Year

Yen

Yen

Million yen

％

％

24.00
27.00
24.00

43.00
48.00
48.00

606
625

18.9
16.5
15.6

1.8
1.9

3. Fiscal Year March 2015 Consolidated Earnings Estimates (April 1, 2014 to March 31, 2015)
Net SalesFirst Half
Full Year

Operating Income

Ordinary Income

Net Income

EPS

Million yen% yyMillion yen% yyMillion yen% yyMillion yen% yy

54,900

6.3

4,250

3.0

3,900

3.8

2,300

5.0

Yen
176.41

112,100

6.5

7,940

6.0

7,100

4.5

4,000

4.5

306.81

Notes:(1) Important changes in our subsidiaries, including changes to the scope of our consolidation: None
(2) Changes in the accounting policies, procedures, and changes or revisions in the display of accounting estimates:①②③④

Changes accompanying revisions in accounting policies:
Other changes: None
Changes in accounting estimates: None
Redisplay of revisions: None(3)

Shares issued (Common shares)①②③

Shares issued as of term end (including treasury shares):
Treasury stock as of term end:
Average during the term:

Applicable

FY3/14
FY3/14
FY3/14

15,125,582
2,088,126
13,193,752

FY3/13
FY3/13
FY3/13

15,125,582
1,014,894
14,111,430(Reference) Parent Earnings Results
1. Fiscal Year March 2014 Parent Earnings (From April 1, 2013 to March 31, 2014)(1) Parent Earnings
Sales
FY3/14
FY3/13Operating Income

Ordinary Income

Net Income

Million yen% yyMillion yen% yyMillion yen% yyMillion yen

88,55981,633

8.5
8.8

6,982
5,842

19.5
20.1

6,995
5,216

34.1
37.3

4,258
2,684

EPS

％
58.6
46.6

Fully Diluted EPS
Yen
322.76190.25

FY3/14
FY3/13

Yen
301.52―(2) Parent Financial Position
Total Assets

Net Assets

Million yen

Equity Ratio

Million yen

FY3/14

121,753
31,887
111,065
31,734(Reference) Capital: ¥31,887 million in FY3/14, ¥31,734 million in FY3/13

FY3/13

Book Value Per Share
％
26.2
28.6

Yen

2,445.85
2,248.98

2. Fiscal Year March 2015 Parent Earnings Estimates (April 1, 2014 to March 31, 2015)
Sales

Ordinary Income

Net Income

EPS

3,950

% yy
-7.8

Million yen

47,600% yy
7.3

Million yen

First Half

2,450

% yy
-12.4

Yen
187.92

Full Year

93,100

5.1

7,070

1.1

4,370

2.6

335.19Million yen* Regarding the implementation of audit procedures in the display of this document:This earnings announcement is exempted from the financial instruments and exchange act founded in the audit procedures, and at
the time of the release of this earnings announcement, the auditing procedures for the financial statements in this document havenot been completed.

Notes and explanation of appropriate usage of earnings estimates:
All earnings estimates and forward looking statements in this document are based on the best information available and rational decisionsof management at the time of its creation, and actual earnings may diverge largely from those estimates and forward looking statements
put forward in this document due to various unforeseen factors. Moreover, for information regarding earnings estimates and theassumptions upon which they are based, and the usages of these earnings estimates, please refer to the section “Analysis of Earnings
Performance” on page 5.

-7-

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

Index
1. Analysis of Business Results, Financial Condition(1) Analysis of Business Results(2) Analysis of Financial Conditions(3) Our Basic Policy Regarding the Distribution of Profits in the Current and Next Terms(4) Business Risks
2. Corporate Structure
3. Management Policy(1) Our Basic Management Policy(2) Benchmarks of Our Intermediate to Long-Term Management Strategy(3) Key Management Issues
4. Consolidated Financial Statements(1) Consolidated Balance Sheets(2) Consolidated Income, Comprehensive Income Statements
Consolidated Income Statement
Consolidated Comprehensive Income Statements(3) Consolidated Shareholders’ Equity Statements(4) Consolidated Cash Flow Statements(5) Consolidated Financial Statement Notes（Notes Regarding Going Concern Assumptions）（Segment Information）

-8-

9
9
12
13
13
15
17
17
17
17
18
18
20
20
22
23
25
27
27
27

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

1. Analysis of Business Results, Financial Condition(1) Analysis of Business Results
1. Overview of Overall Earnings in Current Term
(Consolidated Earnings)(Units: Million Yen)
Previous Term
FY3/13Current Term
FY3/14% YY Change

Net Sales

99,472

105,216

5.8

Operating Income

6,521

7,490

14.9

Ordinary Income

5,599

6,796

21.4

Net Sales

3,206

3,829

19.4

During the current fiscal year, the Japanese economy showed signs of recovery on the back of financial and fiscal
stimulus measures of the Government, a recovery in share prices, and the weaker yen. However, higher raw materials
prices and slowing in various economies around the world continued to cloud the economic horizon. Against thisbackdrop, the main dormitory business got off to a good start with occupancy rates of 97.0% (A 0.5% point increase fromthe previous term) at the start of the term, and strong trends continuing throughout the remainder of the year. With
regards to the hotel business, Dormy Inn (Business hotels) and resort hotel operations both recorded higher occupancy
rates and higher prices. In addition, Kyoritsu Maintenance successfully conducted various activities in the realm of
public and investor relations including the sponsorship of the “Hakone Ekiden” long distance university relay race withthe goal of deepening the understanding of its services within the market.
As a result of these various efforts, sales, and operating, ordinary and net incomes all managed to rise above theprevious year’s levels by large margins of 5.8% (¥5,743 million), 14.9%, 21.4% and 19.4% year-over-year to ¥105,216,¥7,490, ¥6,796, and ¥3,829 million respectively. Furthermore, this performance set the record for highest earnings,
having surpassed the estimates upwardly revised as of November 8, 2013.
2. Our Main Business Segment Performance
Dormitory Business (Student, Corporate, Domeal, Consigned Dormitories)
Previous Term
FY3/13(Units: Million Yen)

Current Term
FY3/14% YY Change

Contracted Residents

31,43932,567

3.6

Sales (Million Yen)

40,27341,452

2.9

Operating Income (Million yen)

6,020

6,119

1.6

The operating environment surrounding the student dormitory business continues to be plagued by numerous structuralissues at the macroeconomic level including declines in the number of children. However, universities are using thefacilitation of dormitories as a highly attractive feature to get students from regions outside of metropolitan areas to enroll
and demand remains strong.
Against this backdrop, business trended favorably with new alliances formed with the Musashino Art University,
Dokkyo University, Tokyo University of Pharmacy and Life Sciences, Tokyo Institute of Technology and others, and due
to our services supporting students that leverage our unique features including “healthy food menus,” “safe andcomfortable facilities made possible through full time supervision” and “employment seminars held within dormitories.”
As a result of these efforts, the number of contracted residents in the student dormitories rose by 1.0% year-over-year to
19,517 residents and sales rose by 2.6% year-over-year to ¥24,743 million.
The environment surrounding the corporate dormitory business was positive with the outlook for increases in thenumber of employers and the number of job offers for new graduates compared with the previous term. With these
conditions in place, conditions were favorable as large corporations reevaluated the positive aspects of dormitories andused them increasingly for new employee training and a wide range of other purposes. In our corporate dormitories,
the number of contracted residents rose by 10.0% year-over-year at the end of the fiscal year to 8,684, and sales rose by
2.7% year-over-year to ¥9,673 million.

-9-

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

In our Domeal business, we responded to the diversifying needs of students and single workers by providing
studio-type dormitory facilities. We also received support from client schools and companies through theirintroductions of new residents seeking dormitories with commissary facilities. Consequently the number of contracted
residents rose by 3.4% year-over-year to 4,366, and sales grew by 4.5% year-over-year to ¥3,720 million.
In our consigned dormitory business, we manage corporate and school dormitory facilities on a consigned basis, and we
endeavor to differentiate our services by promoting our status as “Japan’s best dormitory operator.” Consequently, salesrose by 4.3% year-over-year to ¥3,315 million.
Consequently, the number of dormitory facilities increased by 9 to 427 (excluding consigned facilities), contracted
residents grew by 1,268 to 33,681, and sales increased by 2.9% year-over-year to ¥41,452 million. With regards toexpenses, strict management of costs on a facility-by-facility basis allowed operating income to rise by 1.6%
year-over-year to ¥6,119 million. Moreover, we conducted more detailed marketing activities and strategies to reduce
vacant rooms and bring about a recovery in occupancy rates. Consequently occupancy rates rose by 0.2%
year-over-year to 97.2% at the start of the next term.
Hotel Business (Dormy Inn, Resort Hotels)(Units: Million Yen)

Previous Term
FY3/13Current Term
FY3/14% YY Change

Sales

39,14343,475

11.1

Operating Income

2,842

3,830

34.8

In our Dormy Inn (Business hotel) business, we focused upon providing customers with “large hot spring type bathingfacilities” and “good tasting breakfast menus,” in addition to fortifying the language and hospitality manner training of
our staff as a means of raising the customer satisfaction. Based upon these endeavors, we also aggressively promoted
other detailed services including web marketing solutions that cater to a wide range of customers including not only
business travel users but also pleasure travelers as well. Moreover, owing to the weaker yen and the fortification of
inbound marketing functions to cultivate customers from Korea and other parts of Asia, the number of foreign users is on
the rise. Against this backdrop, the opening of new facilities including “Natural Hot Springs Chagetsu no Yu DormyInn Express Kakegawa” and “Natural Hot Spring Yugiri no Yu Dormy Inn PREMIUM Namba” contributed to increases
in sales occupancy rates and pricing at existing facilities contributed to higher sales. Both existing facility occupancy
rates and prices increased not only over the previous year throughout the entire current year but also exceeded
expectations by large margins. As a result of these developments, sales rose by 13.3% year-over-year to ¥21,755
million.
In our resort hotel business, we seek to satisfy our customers by providing them with “high quality resort styleaccommodations at reasonable prices” and “comforting accommodations.” During the current term, the opening of“Inishie no Yado Ikyu” timed to match the commemorative ceremonies being held at Ise Jingu Shrine boasted of highoccupancy rates throughout the year. Furthermore, we created a product lineup that was successful in raising theoccupancy rates on weekdays and subsequent full year occupancy rates trended above the previous year’s levels.
Therefore we were able to record sales growth of 8.9% year-over-year to ¥21,719 million.
Consequently, three new facilities were opened in the hotel business bringing the total facilities in operation to 71 andthe number of rooms to 10,612 (Up 317 from the previous term). Furthermore, sales and operating income rose by
11.1% and 34.8% year-over-year to ¥43,475 and ¥3,830 million respectively, and sales of this segment now threatens to
exceed our core dormitory business.
Contracted Services Business(Units: Million Yen)
Previous Term
FY3/13

Sales
Operating Income

Current Term
FY3/14% YY Change

13,802

13,025

-5.6

56

175

208.8

- 10 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

The contracted services business includes maintenance and management services for both offices and residences,
rental of consigned buildings, and parking lot management. In particular, the building maintenance business sufferedfrom severe operating conditions, with intense competition arising from consolidation of service providers in the greater
Tokyo metropolitan area. Against this backdrop, sales declined by 5.6% year-over-year to ¥13,025 million due in partto the liquidation of some facilities owned during the previous fiscal year, but the addition of profitable projects andstrict cost management allowed operating income to rise by 208.8% year-over-year to ¥175 million.
Food Services Business(Units: Million Yen)
Previous Term
FY3/13Current Term
FY3/14% YY Change

Sales

4,926

5,180

5.2

Operating Income

-126

-43

―

In the food services business, a gradual recovery in consumer spending continued was noted despite the continuationof severe operating conditions. Furthermore, the costs incurred at the hot spring facility, which has halted operations,were booked as non-operating expenses. And while sales rose by 5.2% year-over-year to ¥5,180 million, an operating
loss of ¥43 million was incurred.
Construction Business(Units: Million Yen)
Previous Term
FY3/13

Sales
Operating Income

Current Term
FY3/14% YY Change

8,180

7,577

-7.4

361

305

-15.3

In the construction business during the current term, delays in the start of construction arising from the sudden rise indevelopment costs caused sales and operating income to decline by 7.4% and 15.3% year-over-year to ¥7,577 and ¥305
million respectively.
Other Business(Units: Million Yen)
Previous Term
FY3/13Current Term
FY3/14% YY Change

Sales

5,188

6,955

34.0

Operating Income

-448

-472

―

Our other business is comprised of the wellness life business (Management of senior citizen housing), the PKP
business (Consigned services business provided to regional government bodies), single life support business andinsurance agency business, comprehensive human resource service business, and financing services and administrative
outsourcing services. Sales of this business rose 34.0% from the previous year to ¥6,955 million, while an operating
loss of ¥472 million was incurred. The main factor behind this operating loss was an increase in marketing expenses
accompanying the expansion of the PKP business.
3. Earnings Estimates for the Coming Term
(Consolidated)(Units: Million Yen)

Previous Term
FY3/14
Net Sales

Current Term
FY3/15% YY Change

105,216

112,100

6.5

Operating Income

7,490

7,940

6.0

Ordinary Income

6,796

7,100

4.5

Net Income

3,829

4,000

4.5

- 11 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings(Units: Million Yen)

(Parent Earnings)
Previous Term

Current Term

FY3/14

FY3/15% YY Change

Sales88,55993,100

5.1

Operating Income

6,995

7,070

1.1

Net Income

4,258

4,370

2.6

The dormitory business occupancy rate in April, which is a key indicator to how our earnings are likely to trend during
the coming fiscal year, got off to a good start at 97.2%. In the dormitory business, Kyoritsu is taking steps to respond to
the expanding needs of residents by fortifying our structure, and increasing the speed of our strategy development. At thesame time, we are promoting structural reforms to enable us to implement strict control of capacity utilization and costs foreach facility. Moreover, anticipatory investments including large scale renovations will be made with a view to our longterm development.
We will firmly establish our brand and expand our earnings by leveraging the strong popularity of existing facilities in
our Dormy Inn business hotel operations within the hotel business. Furthermore, we will open our first overseas facility
called “Dormy Inn PREMIUM SEOUL GAROSUGIL” in the Gangnam area of Seoul, Korea in fall 2014, and expand ouroperations into other regions within Asia that exhibit high paced economic growth. By doing so, we endeavor to act as abridge linking Japan with Asia by providing our hotel services to Japanese going abroad and foreigners visiting Japan, andto accelerate growth throughout the region. In the resort hotel business, Kyoritsu also endeavors to fortify services at
each facility and implement strict cost controls as part of its efforts to expand its “comfortable accommodations” withhigh customer satisfaction to become the leading resort hotel operator in each respective operating region. Furthermore,
Kyoritsu will accelerate its strategic development of facilities and fortify its marketing structure to maintain repeat
customers and cultivate new customers with a view to future growth.
Kyoritsu will implement measures to raise the overall capabilities of our contracted services business and increase ourcredibility with customers through improvements in our specialized technologies and product lineup. These measures
will also allow us to aggressively provide customers with high quality building maintenance and other services that arehighly competitive within the market.
In the food services business, Kyoritsu will develop products and services with high levels of customer satisfaction, andimplement strict management of variable costs as part of its earnings reform strategy.
In our construction business, we will continue to support the Kyoritsu Group development and new facility opening
plans, in addition to cultivating external clients and strictly managing costs.
In our other business segment we will focus upon developing a jointly conducted consigned services business forregional government bodies called Public Kyoritsu Partnership (PKP) to realize higher levels of profitability.
Based on the measures mentioned above, development plans for the hotel business, which became a strong growth
driver during the current term, called for several projects to be undertaken during the current and next terms.
Consequently, new facility openings are expected see only modest growth as they are expected to be concentrated during
the term following the next terms and sales and operating, ordinary and net incomes are expected to grow by 6.5%, 6.0%,
4.5% and 4.5% year-over-year to ¥112,100, ¥7,940, ¥7,100 and ¥4,000 million respectively. At the same time, parent
sales and ordinary and net incomes are expected to rise by5.1%, 1.1% and 2.6% year-over-year to ¥93,100, ¥7,070, and¥4,370 million respectively.
(2) Analysis of Financial Conditions
1. Conditions of Assets, Liabilities, and Net Assets(Assets)
During the current fiscal year, total consolidated assets increased by ¥9,735 million from the end of the previous fiscal yearto ¥131,995 million. The main factors behind this increase included rises in cash and deposits, and tangible fixed assets.
(Liabilities)
Over the same period, total liabilities also grew by ¥9,928 million to ¥97,405 million due primarily to increases in zero
coupon convertible bonds with stock options.
(Net Assets)- 12 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

Net assets declined by ¥192 million to ¥34,590 million over the same period due primarily to the acquisition of treasury
shares. Consequently, equity ratio declined by 2.2% points from the end of the last fiscal year to 26.2%.
2. Cash Flow Conditions
Consolidated cash and equivalents grew by ¥7,085 million from the end of the previous term to ¥23,750 million at theend of the current term.
(Cash Flow from Operating Activities)
The net cash inflow from operating activities increased by ¥2,666 million from the previous term to ¥7,692 million in thecurrent term, due in part to the increase in income before taxes and declines in accounts receivables.
(Cash Flow from Investing Activities)
The sale and acquisition of tangible fixed assets were amongst factors contributing to a ¥8,372 million increase in the net
cash inflow to ¥6,333 million in investing activities.
(Cash Flow from Financing Activities)
A net cash inflow in financing activities of ¥5,535 million was recorded, reflecting a ¥13,937 million improvementfrom the net outflow of ¥8,402 million in the previous term. Amongst the factors influencing financing cash flow
were repayments of long term debt and income from the issuance of bonds.
(Reference) Trends in Our Cash Flow Indicators
FY3/10FY3/11

FY3/12

FY3/13

FY3/14Equity Ratio (%)

21.2

21.3

25.1

28.4

26.2

Equity Ratio, Market Capital
Based (%)

14.2

12.0

19.5

30.7

34.4

Cash Flow to Interest Bearing
Liability Ratio (%)

15.8

16.0

11.3

11.6

8.8

Interest Coverage Ratio (x)

4.5

3.8

4.1

4.0

7.3

Equity Ratio: Capital / Total Assets
Equity Ratio, Market Capital Based: Market Capitalization / Total Assets
Cash Flow to Interest Bearing Liability Ratio: Interest Bearing liabilities / Operating Cash Flow
Interest Coverage Ratio: Operating Cash Flow / Interest Payments
1. Each indicator is based on consolidated financial data.
2. Market capitalization excludes treasury stock.
3. Cash flow is based on our operating cash flow.
4. Interest bearing debt includes all of the liabilities which bear interest payments on our consolidated balance sheet.
5. We use interest payments from our consolidated cash flow statements.

(3) Our Basic Policy Regarding the Distribution of Profits in the Current and Next Terms
We consider the capital contributed by shareholders to be invaluable, and place a high priority on the distribution of
profits to our shareholders in line with our earnings performance. One of our goals is to maintain a stable level ofdividends over the long-term and we have established a target dividend payout ratio of over 20%. With regards to thecurrent term, we anticipate increasing our dividend by ¥3 per share to ¥27 at the term end for a full year dividend of ¥48
per share. Furthermore, we expect to maintain a ¥48 per share dividend in the following term as well. In the future, wewill endeavor to maintain a stable level of dividends while also responding flexibly to reflect changes in our earnings. At
the same time, we also seek to retain a level of earnings that will give our management the flexibility to make necessary
capital investments in response to changes in the market and to develop new businesses whenever appropriate.
(4) Business Risks
Below we note the important risk factors that may be considerations when making an investment in our Company.
We consider these factors to be the main risks existing during the course of our operations as of the end of the term underreview.
1. Our Sales Conditions
In our core dormitory business, we operate and manage various facilities with the goal of providing a highly relaxing- 13 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

environment and experience to our residents, making them feel as if they are in their own homes. In addition to ourefforts to strengthen our relationships with various schools to provide their students with room and board, we provide
flexible housing solutions to Japanese corporations, whose employee numbers change dramatically, by supplying themwith only the number of rooms they need to match the number of employees needing housing. But because ourdormitories are primarily leased from the owners of the facilities, we are able to provide flexible solutions as mentioned
above. At the same time, we are at risk of being negatively impacted by cancellation of resident contracts by schools andby corporations due to restructuring of their work force.
With regards to our hotel business, we have been able to insulate our Dormy Inn Hotels from large fluctuations in
occupancy rates by providing various unique services and amenities such as extended-stay programs which help todifferentiate our facilities from those of our competitors. Despite our best efforts, we remain vulnerable to fluctuationsand volatility in corporate demand caused by changes in the economy. In our resort hotel business, we are also subject tovolatility in occupancy rates arising from weather related calamities such as typhoons, as well as from fluctuations in theeconomy. Therefore sales may fall below our expectations during peak seasonal periods and our Group earnings may
also be impacted by these events.
Regarding our food services business, we are vulnerable to changes in consumer demand which could result in a loss ofbusiness arising from cancellations of outsourcing contracts for management of restaurants and cafeterias at golf courses
and corporate facilities. Therefore our Group earnings could be negatively impacted by these changes.
2. Financial Conditions
The Kyoritsu Maintenance Group endeavors to maintain consistent long-term growth as outlined in ourintermediate-term management strategy, but the attainment of this growth is premised upon our ability to secure assets
which can be used as dormitories and hotels. In the development of these assets, we take our financial standing into
consideration and seek to make the most effective use of all resources by utilizing various financial methods to yield safe
and maximum returns. However our earnings and financial position are at risk of being negatively impacted by potential
stagnation in the real estate market, volatility in asset prices, extreme declines in cash flows from our existing assets, andinability to proceed as expected with development of assets due to volatility in the financial markets.
3. Legal Regulations and Quality Control
Our Group provides both services and goods that are subject to various rules and regulations relating to food safety andsanitation under the Food Sanitation Act, privacy security under the Act on the Protection of Personal Information, andpersonal safety under the Inns and Hotels Act and the Fire Service Act, among other safety related regulations and laws.
Therefore, our Group maintains compliance structures, risk committees and internal control structures to performroutinely scheduled checks to ensure that we are in strict compliance with the various laws and regulations which are partof our business. But despite our best efforts to prevent accidents, we still are at risk of losing our customers’ trust in thehighly unlikely event that an incident such as food poisoning or leakage of personal information were to occur and ourearnings may also be profoundly impacted.
4. Regarding the Implementation of “Asset Impairment Accounting”
On August 9, 2002 the Business Accounting Council announced a report entitled “Opinion Statement on the
Accounting Standards for Fixed Asset Impairment Accounting.” Taking account of this Opinion Statement, the Financial
Accounting Standards Foundation, Accounting Standards Board of Japan released on October 31, 2003 the policy paper
entitled “Policy Statement for the Implementation of Accounting Standards for Fixed Asset Impairment Accounting”(Implementation Policy Number 6). In response to these moves by the accounting industry, we are now required to
implement asset impairment accounting with regards to our Group’s tangible and intangible fixed assets, including
investments, other assets and leases. And we recognize the risk of an extreme contraction in our cash flow by the
implementation of asset impairment accounting at times when there are dramatic fluctuations in the economy andfinancial markets.

5. Important Contracts
The dormitories and hotels we operate are leased by our company from the owners of the assets under blanket
long-term lease agreements ranging from 10 to 20 years. Some of these facilities have stipulations in their lease
contracts that prohibit the cancellation of agreement prior to the end of the lease term. Therefore, weak trends in
occupancy rates of these managed assets could negatively impact their profitability, which in turn could negatively impact
our overall earnings and financial position.

- 14 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

6. Our Dependence upon Interest Bearing Liabilities and the Influence of Interest Rate Trends
In our business, we use bank debt in addition to our own capital, and our interest bearing liabilities ratio as a percentage
of our total assets stood at 51.6% at end fiscal year March 2014. As for our Group, we are pursuing a strategy of
reducing our dependence upon interest bearing liabilities, which includes the sale of some of our self-owned facilities toinvestors while retaining the management and operational contracts for these facilities. At the end of fiscal year March
2014, 88.6% of our interest bearing liabilities was fixed interest rates and we therefore are insulated from near termincreases in interest rates. However, our earnings still remain at risk of higher funding costs arising from increases ininterest rates over the longer term.

2. Corporate Structure
The Kyoritsu Maintenance Group consists of the parent company, 12 subsidiaries, and 4 affiliated companies. Our main
businesses consist of dormitories, hotels, contracted services, food service, construction, and other business. The details ofour businesses and the services provided by our various subsidiaries and affiliates are listed below.

Business Segment

Business Description

Participating Companies

Dormitories

Student and corporate dormitories, and outsourced dormitory Kyoritsu Maintenance Co., Ltd.
management
Kyoritsu Maintenance Korea Co., Ltd.

HotelsDormy Inn (Business hotels)
Resort hotels

Kyoritsu Maintenance Co., Ltd.
Kyoritsu Maintenance Korea Co., Ltd.
Three other companies

Contracted Services

Office building management businessResidential property management business

Builnet Corporation
Central BuilWork Co., Ltd.

Food Services
Business

Restaurant businessOutsourced catering business
Hotel restaurant outsourcing business

Kyoritsu Foods Service Co., Ltd.
1 other company

Construction, planning, design, brokerage, condominium sales,
Construction Business other related real estate development business
Kyoritsu Estate Co., Ltd.
Wellness Life Business (senior citizen residence management andoperations)
Kyoritsu Maintenance Co., Ltd.
Other Businesses

PKP business (Consigned services business provided to regional Kyoritsu Trust Co., Ltd.
Japan Placement Center Co., Ltd.
government bodies)
Kyoritsu Financial Service Co., Ltd.
Single resident insurance and other lifestyle support services
4 other companies
Comprehensive human resources business
Financing business
Other related businesses- 15 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

S chematic Diagram of Our Operations

Clients

Domestic
Dormy Inn, resort maintenanceoutsourcing
Dormitory rennovation,
Consigned maintenance services
Domeal facility management

Builnet Co., Ltd.
Central BuilWork Co., Ltd.

Building rental,
maintenanceCorporate benefit
facilities maintenanceReal estate brokerage,
related services

Office building managementbusiness
Contracted services businessResidential building managementbusiness

Consignment

Outsourced cafeteria andhotel restaurant management

Kyoritsu Foods Service Co., Ltd.

Restaurant, cafeteria
outsourcing andrestaurant management
services

Restaurant business
Food business

Cafeteria outsourcing
Hotel restaurant outsourcing

Consignment

Construction, planning anddesign of dormitories

Kyoritsu Estate Co., Ltd.

Real estate construction,
sales, brokerage

Construction, planning, design,
brokerage
Construction businessCondominium business

Consignment

Other related business

Lifestyle product sales andother support services for
single residents in dormitories

Kyoritsu Trust Co., Ltd.

Lifestyle product sales,
insurance business

Other business

Single resident lifestyle support
services, insurance sales

Labor dispatch,
headhunting services

Japan Placement Center Co., Ltd.

Labor dispatch,head hunting

Other business

Consignment

Comprehensive personnel services

Consignment

Collection andoperational services
Kyoritsu Financial Service Co., Ltd.

Loan business

Other business

Loan business, administrative
support services

Consignment

Overseas

Kyoritsu M aintenance Korea Co., Ltd.

Student Dormitory
Management Business・ Dormy Inn(Business Hotel) BusinessDormitory Business
Hotel Business- 16 -＜Dormitory Business＞
K
y
o
r
i
t
s
u
M
a
i
n
t
e
n
a
n
c
e
C
o
.
,

Student, corporate dormitories, Domeal,outsourced dormitory management＜Hotel Business＞
Dormy Inn (business hotels)
Resort hotels＜Other Business＞
Wellness Life Business(senior citizen attended care residence)
PKP business(Consigned services business provided

L
t
d
.

to regional government bodies)Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

3. Management Policy(1) Our Basic Management Policy(2) Benchmarks of Our Intermediate to Long-Term Management Strategy(3) Key Management Issues
We do not make any comments in this section because there have been no important changes from the information disclosed in ourearnings announcement for the fiscal year March 2013 (Published on May 15, 2013).
For further information regarding the above mentioned earnings announcement, please refer to the following url.
(Kyoritsu Maintenance home page)
http://www.kyoritsugroup.co.jp/ir/library.html(Tokyo Stock Exchange home page: Search page for listed companies)
http://www.tse.or.jp/listing/compsearch/index.html- 17 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

4. Consolidated Financial Statements(1) Consolidated Balance Sheets
Previous Term

(Units: Million Yen)
Current Term

(March 31, 2013)(March 31, 2014)

AssetsCurrent assets
Cash and equivalents
Notes, accounts receivable
Real estate for sale
Uncompleted real estate for sale
Uncompleted construction payment
Deferred tax assets
OthersDoubtful account reserves
Total current assets
Fixed assets
Tangible fixed assets
Buildings, structures
Depreciation, aggregated
Buildings, structures (net)Land
Construction, provisional accounts
OthersDepreciation, aggregated
Others17,622
6,480
302
914
14
766
4,785
-32

24,707
4,986
257
372
314
948
5,913
-26

30,85237,47346,222-16,945

48,413-18,570

29,27624,4263,412
7,731-6,51429,84324,891
4,848
8,333-6,911

1,216

1,421

58,332
1,950

61,005
1,890

5,818
1,114
10,745
9,063
－
1,774
2,743
-207

5,888
631
11,481
8,574
3
1,600
3,554
-195

31,052

31,538

Total fixed assets
Deferred assets
Bond issuance fees

91,33594,43471

87

Total deferred assets

71

87

122,259

131,995

Total tangible fixed assets
Intangible fixed assets
Investments, other assets
Investment securities
Long term loans
Security deposits
Deposits
Retirement related
Deferred tax assets
OthersDoubtful account reserves
Total investments, other assets

Total assets- 18 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings(Units:Million Yen)

Previous Term

Current Term

(March 31, 2013)(March 31, 2014)

Liabilities
Current liabilities
Notes, accounts payables
Short term debt
Bond, portion redeemable within 1 year
Unpaid corporate taxes
Prepayments
Bonus reserves
Director bonus reserves
Completed construction guarantee reserves
Deferred tax liabilities
Others4,174
14,074
1,150
1,528
10,880
1,029
232
11
0
5,811

3,908
15,3281,150
1,940
11,091
1,148
294
11
－
5,945

Total current liabilities

38,89240,819Fixed liabilities
Bonds
Convertible bonds with stock options
Long term debt
Long term security deposits
Deferred tax liabilities
Retirement benefit reserves
Retirement benefit reserve related liabilities
Asset impairment liabilities
Point reserves
Asset impairment liabilities
Others

7,450－
34,976
3,016
598
1,201
－
309
－
205
826

6,300
15,00029,772
2,583
551
－
1,178
311
16
204
666

48,58456,58687,476

97,405

5,136
5,943
25,675-1,811

5,136
5,943
28,892-5,471

34,94334,500

-198
37
－

-29
99
20

Total fixed liabilities
Total liabilities
Net assets
Shareholders’ equity
CapitalCapital reserves
Retained earnings
Treasury stock
Total shareholders’ equity
Other comprehensive income, aggregated
Other marketable securities valuation gains
Foreign exchange translation provisions
Retirement reserve related
Total other comprehensive income, aggregatedTotal net assets
Total liabilities, net assets- 19 --160

89

34,782

34,590122,259

131,995

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings(2) Consolidated Income Statement, Comprehensive Income Statements(Consolidated Income Statements)(Units: Million Yen)
Previous Term

Current Term(April 1, 2012 to(April 1, 2013 toMarch 31, 2013)

March 31, 2014)

Net Sales
CGS

99,472
79,562

105,216
83,692Gross income
SG&A
Pay, bonuses
Corporate fringe benefits
Bonus reserves provisions
Director bonus reserves provisions
Retirement reserves provisions
Director retirement reserves provisions
Sales promotion expense
Commissions
Doubtful account reserve provisions
Point reserve reversals
Outsourcing expenses
Rent
Depreciation, amortization
Goodwill amortization
Others

19,91021,524

3,809
733
272
232
74
2
1,752
3,395
14
－
966
298
198
4
1,636

3,817
730
307
294
55
2
1,798
3,821
－
17
1,106
308
190
4
1,578

13,38914,033

6,521

7,490

114
111
128
223

111
106
230
274

578

722

1,233
266

1,046
370

1,499

1,416

5,599

6,796

Total SG&A
Operating income
Non-operating income
Interest income
Deposit redemption income
Foreign exchange translation gains
OthersTotal non-operating income
Non-operating expense
Interest payment
OthersTotal non-operating income
Ordinary income- 20 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings(Units: Million Yen)
Previous Term

Current Term(April 1, 2012 to(April 1, 2013 toMarch 31, 2013)

March 31, 2014)

Extraordinary income
Compensation received
Fixed asset sale income
OthersTotal extraordinary income
Extraordinary loss
Insurance policy cancelation loss
Fixed asset sale loss
Impairment loss
Special retirement expense
Lease cancelation loss
OthersTotal extraordinary loss
Net income before taxes

－
986
18

31
246
－

1,004

277

43
179
184
97
134
138

21
－
123
－
－
15

777

160

Corporate, residence, enterprise taxes
Corporate tax adjustment

5,826
2,638
-18

6,914
3,245
-160

Total taxes

2,620

3,085

Net income before minority interests

3,206

3,829

Net income

3,206

3,829

- 21 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings(Consolidated Comprehensive Income Statements)(Units: Million Yen)
Previous Term FY3/13

Previous Term FY3/14(April 1, 2012 to(April 1, 2013 toMarch 31, 2013)
Net income before minority interests
Other comprehensive income
Other marketable securities valuation gains
Foreign exchange translation gain provision
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income of parent company shareholders
Comprehensive income of minority shareholdings- 22 -March 31, 2014)
3,206

3,829

562
22

168
61

585

230

3,791

4,059

3,791
－

4,059
－

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings(3) Consolidated Shareholders’ Equity Statements
Consolidated Figures for Fiscal Year March 2013 (April 1, 2012 to March 31, 2013)(Units: Million Yen)
Shareholders’ equity
Common stock
Balance as of start of current fiscal
year

Capital surplus

5,136

Retained earnings

5,943

Increase (decrease) due to change
Dividends from surplus
Net income
Change of scope of consolidation
Acquisition of treasury stock
Sales of treasury stock

Total shareholders’equityTreasury stock

23,042-1,80932,312

-2

-536
3,206
-36
-2

-536
3,206
-36

－

Items other than changes inshareholders’ equity, due tochange (net)

－

2,633

-2

2,631

5,943

25,675-1,811

34,943

Total change during fiscal year
Balance as of end of current fiscal
year

5,136

Accumulated other comprehensive income
Net unrealized
gains on othersecurities
Balance as of start of current fiscal
year

-761

Translation
adjustments

Retirement benefit
relatedadjustments

Total accumulated
other comprehensive
incomeTotal net assets

－

-761

31,551－

Increase (decrease) due to change
Dividends from surplus
Net income
Change of scope of consolidation
Acquisition of treasury stock
Sales of treasury stock

-536
3,206
-36
-2

－

Items other than changes inshareholders’ equity, due tochange (net)

562

37

－

600

600

Total change during fiscal year

562

37

－

600

3,231

Balance as of end of current fiscal
year

-198

37

－

-160

34,782- 23 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

Consolidated Figures for Fiscal Year March 2014 (April 1, 2013 to March 31, 2014)(Units: Million Yen)
Shareholders’ equity
Common stock
Balance as of start of current fiscal
year

5,136

Capital surplus

Retained earnings

5,943

Increase (decrease) due to change
Dividends from surplus
Net income
Change of scope of consolidation
Acquisition of treasury stock
Sales of treasury stock

Treasury stock

25,675-1,811-612
3,829

Total shareholders’equity34,943

-612
3,829

0

-3,6600-3,6600

Items other than changes inshareholders’ equity, due tochange (net)Total change during fiscal year
Balance as of end of current fiscal
year

5,136

0

3,216

-3,660

-443

5,943

28,892-5,471

34,500

Accumulated other comprehensive income
Net unrealized
gains on othersecurities
Balance as of start of current fiscal
year

-198

Translation
adjustments

Retirement benefit
relatedadjustments

Total accumulated
other comprehensive
income

－

-160

37

Increase (decrease) due to change
Dividends from surplus
Net income
Change of scope of consolidation
Acquisition of treasury stock
Sales of treasury stock

Total net assets

34,782-612
3,829-3,6600

Items other than changes inshareholders’ equity, due tochange (net)

168

61

20

250

250

Total change during fiscal year

168

61

20

250

-192

Balance as of end of current fiscal
year

-29

99

20

89

34,590- 24 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings(Units:(4) Consolidated Cash Flow Statements

Million Yen)

Previous Term FY3/13

Previous Term FY3/14(April 1, 2012 to(April 1, 2013 toMarch 31, 2013)

March 31, 2014)

Cash flow from operating activities
Net income before taxes
Depreciation, amortization
Amortization of long term prepayments
Fixed asset impairment, sale income
Impairment loss
Amortization of security deposits
Change in bonus reserves
Interest, dividends received
Interest paid
Change in accounts receivables
Change in inventories
Change in payables
Change in unpaid expenses
Change in prepayments
Change in unpaid consumption tax
Change in deposits received
Change in security deposits received
Change in advances received
OthersSubtotalInterest, dividends received
Interest payment
Corporate, other tax returns
Corporate, other tax payment
Cash flow from operating activities
Cash flow from investing activities
Acquisition of marketable securities
Sale of marketable securities
Acquisition of tangible fixed assets
Sale of tangible fixed assets
Acquisition of intangible fixed assets
Sale of intangible fixed assets
Loans extended
Loans recovered
Payment of deposits, security deposits
Return of deposits, security deposits
Payment into insurance reserves
Redemption of insurance reserves
OthersCash flow from investing activities- 25 -

5,826
2,986
156
-779
184
207
188
-147
1,233
-2,690
601
686
368
141
10
-47
-435
-143
531

6,914
2,850
148
-231
123
218
119
-177
1,046
1,494
-54
-261
-85
211
-569
-120
-432
-143
395

8,878
104
-1,244
3-2,715

11,445132-1,0530-2,833

5,025

7,692

-499
729
-3,989
7,474
-96
1,659
-2,098718-1,587
64
-546
277
-67

-68
414
-5,643818-46－-1,716
1,349-1,440
885
-760
119
-245

2,039

-6,333

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings(Units:Million Yen)

Previous Term FY3/13

Previous Term FY3/14(April 1, 2012 to(April 1, 2013 toMarch 31, 2013)

March 31, 2014)

Cash flow from financing activities
Change in short term debt
Assumption of new long term debt
Repayment of long term debt
Bond issuance income
Payment for redemption of bonds
Treasury stock acquisition
Dividend payment
Others650
2,750-10,046
1,959-3,145
-2
-534
-33

-400
4,400
-7,94914,971-1,150-3,660-610-66

Cash flow from financing activities-8,402

5,535

Translation gains in cash and equivalents
Change in cash and equivalents

72

191

-1,264

7,085

Cash and equivalents at term startTranslation gains from change in scope of consolidation

16,384
1,544

16,665－

Cash and equivalents at term end

16,66523,750- 26 -

Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings(5) Consolidated Financial Statement Notes(Notes Regarding Going Concern Assumptions)Not applicable(Important articles in the assumption used to create consolidated financial statements)
1. Scope of Consolidation(1) Consolidated subsidiaries: 8 Companies
Kyoritsu Estate Co., Ltd.
Kyoritsu Trust Co., Ltd.
Kyoritsu Food Service Co., Ltd.
Japan Placement Center Co., Ltd.
Kyoritsu Financial Service Co., Ltd.
Builnet Co., Ltd.
Central BuilWork Co., Ltd.
Kyoritsu Maintenance Korea Co., Ltd.
(2)Non-Consolidated Subsidiaries: 4 Companies

Flat Co., Ltd.
Okinawa Kyoritsu Maintenance Co., Ltd.
Kyoritsu Assist Co., Ltd.
Ecofoods Co., Ltd.
(Reason for the exclusion from scope of consolidated accounts)
The assets, sales and net income of these non-consolidated companies only amounts to a marginal amount of the total
consolidated accounts and are not considered to be important enough to be included in consolidated accounts.
(Segment Information)
1) Overview of Reported Segments
Financial information relating to the individual divisions of our business segments is readily available, and ourmanagement considers the validity of these segments on a regular basis during their board of directors’ meetings inassessing segment earnings and the allocation of business resources in accordance with these segments.
Our divisions and subsidiaries responsible for the various services within our Group are also responsible
developing both strategies and business activities for their respective businesses.
Therefore our segments are defined by the basic services provided by each of the divisions and subsidiaries anddivided into five main segments including “dormitories,” “hotels,” “contracted services,” “food services,” and“construction.”
We provide an overview of our reported business segments as follows:
Dormitories:
Dormitories provided to students and corporate employees, Domeal, management ofoutsourced dormitories
Hotels:Dormy Inn business hotels, resort hotels
Contracted Services:
Office building and residential property management services
Food Services:
Restaurant business, management of outsourced cafeterias, hotel restaurants and otherfacilities
Construction:
Planning, design and construction, real estate brokerage business, condominiums for sale,other related services2) Method of calculation for sales, income and losses, assets and other items of reported segments
Profits in the reported business segments are operating income.
Intersegment earnings and transfers are based on actual market pricing.

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Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

3) Sales, profits, assets and other information regarding reported segments
Consolidated Figures for Fiscal Year March 2013 (April 1, 2012 to March 31, 2013)(Units: Million Yen)

Reported Segments

OthersAdjustments

Values Used in
Consolidated
Financial
Statements(Note) 2(Note) 3

Total
Dormitories

Contracted
Services

HotelsFood
Services

Construction

Total(Note) 1

Sales

40,152

39,058

8,066

1,475

5,910

94,662

4,809

99,472－

99,472

120

85

5,736

3,450

2,269

11,663378

12,042-12,042－

Total

40,27339,14313,802

4,926

8,180

106,326

5,188

111,515-12,042

99,472

Operatingincome

6,020

2,842

56

-126

361

9,154

-448

8,705

-2,184

6,521

Assets40,50745,655

12,611

1,027

6,708

106,510

6,165

112,676

9,583

122,259

Depreciation

757

2,000

80

51

32

2,923

42

2,965

20

2,986

Goodwill
amortization

－

－

4

－

－

4

－

4

－

4

Impairment loss

18

3

－

87

－

109

74

184

－

184

Change intangible,intangible fixed
assets

2,442

1,461

1,654

127

2

5,689

18

5,707

28

5,736

External sales
Internal sales andtransfers

Other items(Notes) 1. Other is not considered as a reported business segment and is comprised of the wellness life (management ofsenior citizen housing), PKP business (Consigned services business provided to regional government bodies),
single life support services, insurance agency business, comprehensive human resources, financing services andother related services.
2. Details of adjustments are provided below(Units: Million Yen)
Operating Income
Intersegment transaction cancelations

116-2,067-2,184Companywide expenses (Note)

Total(Note) Companywide expenses represent the expenses associated with primarily finance and accounting, and otheroperations associated with the headquarters.
(Units: Million Yen)

Segment Assets
Intersegment transaction cancelations-9,403Companywide assets (Note)

18,986
9,583

Total

(Note) Companywide assets represent cash and equivalents, marketable securities, investment securities,
deferred taxes, and other assets associated with the headquarters
3. Segment operating income is derived from adjustments made to the operating income of the consolidated financial
statements.

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Kyoritsu Maintenance Co., Ltd. (9616) FY March 2014 Earnings

Consolidated Figures for Fiscal Year March 2014 (April 1, 2013 to March 31, 2014)(Units: Million Yen)

Reported Segments

OthersAdjustments

Values Used in
Consolidated
Financial
Statements(Note) 2(Note) 3

Total
Dormitories

Contracted
Services

HotelsFood
Services

Construction

Total(Note) 1

Sales

41,27643,388

7,841

1,484

4,633

98,624

6,592

105,216－

105,216

176

86

5,183

3,696

2,944

12,086362

12,449-12,449－

Total

41,452

43,47513,025

5,180

7,577

110,710

6,955

117,665-12,449

105,216

Operatingincome

6,119

3,830

175

-43

305

10,389

-472

9,916

-2,425

7,490

Assets41,68048,613

11,680861

6,265

109,101

5,983

115,085

16,910131,995

Depreciation

862

1,778

86

51

29

2,808

23

2,832

17

2,850

Goodwill
amortization

－

－

4

－

－

4

－

4

－

4

Impairment loss

24

2

－

91

－

118

4

123

－

123

Change intangible,intangible fixed
assets

3,059

3,285

12

68

6

6,432

31

6,463

-186

6,277

External sales
Internal sales andtransfers

Other items(Notes) 1. Other is not considered as a reported business segment and is comprised of the wellness life (management ofsenior citizen housing), PKP business (Consigned services business provided to regional government bodies),
single life support services, insurance agency business, comprehensive human resources, financing services andother related services.

2. Details of adjustments are provided below.
(Units: Million Yen)
Operating Income-116Intersegment transaction cancelations-2,309-2,425Companywide expenses (Note)
Total(Note) Companywide expenses represent the expenses associated with primarily finance and accounting, and otheroperations associated with the headquarters.
(Units: Million Yen)

Segment Assets
Intersegment transaction cancelations-8,636Companywide assets (Note)

25,546
16,910Total(Note) Companywide assets represent cash and equivalents, marketable securities, investment securities, deferredtaxes, and other assets associated with the headquarters
3. Segment operating income is derived from adjustments made to the operating income of the consolidated financial
statements- 29 -