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 Three Months Ended June 30, 2023
(1) Outline of consolidated operating results
The consolidated operating results of the JAIC Group for the first quarterof the current fiscal year under review (from April 1, 2023 to June 30,2023) recorded operating revenue of 882 million yen (up 125.0% yearon-year), operating gross profit of 470 million yen (up 361.9% year-onyear), operating profit of 160 million yen (compared to operating loss of
213 million yen for the same period of the previous fiscal year), ordinary
profit of 129 million yen (compared to ordinary loss of 257 million yen forthe same period of the previous fiscal year) and loss attributable toowners of parent of 100 million yen (compared to loss attributable toowners of parent of 272 million yen for the same period of the previous
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

fees

andadministrative fees from investment funds. Fund management fees etc.
were 30 million yen (ｕｐ 2.6% year-on-year), about the same as year-onyear.
(Investment income)
JAIC sold only private equity investments for the first quarter for thecurrent fiscal year under review and for the same period of the previous
fiscal year. For the first quarter of the current fiscal year, JAIC has
proceeded the sale of high margin listed and unlisted stocks in Japan
invested by the funds under management. The proceeds of sale of
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operational investment securities increased to 600 million yen (up250.8 % year-on-year). Realized capital gain, which is calculated bydeducting cost of securities sold from proceeds of sales of operational
investment securities, also increased to 532 million yen (up 830.3% yearon-year).
JAIC posted provisions for portfolio companies with lower expectedrecoveries. The total amount of investment write-offs and provision forallowance for possible investment losses increased to 161 million yen (up11,030.3 % year-on-year).
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, increased to 371 million yen (up564.8 % 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 disabled
people and other revenues), interests income from the projects operated
by other companies (such as net profits of the projects and gains fromthe sale of projects), interests income from the private equity funds
operated by other companies, interest income, dividend income and otherincome.
The total amount of fund interests income, etc. for the first quarter ofthe current fiscal year under review increased to 243 million yen (up30.6% year-on-year). The income increased as new projects havelaunched and the scale of existing projects have expanded.
(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 disabled people and othercosts), interests losses from the projects operated by other companies(such as losses mainly from projects in the early stage of launch),interests losses from the private equity funds operated by othercompanies, and other losses.
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The total amount of fund interests losses etc. for the first quarter of thecurrent fiscal year under review were 179 million yen (up 4.2 % year-onyear), about the same as year-on-year. While the cost of producing
vegetables decreased, the cost of new projects and projects withexpanded business scale increased. As a result, operating revenue
increased by 125.0 % year-on-year to 882 million yen, operating cost
increased by 41.8 % year-on-year to 411 million yen and operating grossprofit increased by 361.9 % year-on-year to 470 million yen.
(b) Other profit and loss items
Among the profit and loss items other than (a) above, net income
attributable to non-controlling shareholders is the item that deserves
special mention for the first quarter of the current fiscal year underreview.
This item is the profit attributable to fund investors other than the JAIC
Group among the profits of the funds and projects operated by the JAIC
Group. The amount increased to 228 million yen (up 43,027.9% year-onyear) as the profits of the funds and the projects increased.
As a result, loss attributable to owners of parent amounted to 100 millionyen (compared to loss attributable to owners of parent of 272 million yen
for the same period of the previous fiscal year).
(2) Cash flows
Cash and cash equivalents as of June 30, 2023, increased by 36 million
yen from March 31, 2023, to 1,799 million yen. The main factors forincrease and decrease are as follows:(Cash flow from operating activities)
Net cash generated from operating activities turned profitable andamounted to 349 million yen (compared to 265 million yen used in for thesame period of the previous fiscal year). Distributions from investment
funds increased as investment recovery progressed.
(Cash flow from financing activities)
Net cash used in financing activities with repayments of long-term
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borrowings was 316 million yen (compared to 309 million yen used in forthe same period of the previous fiscal year).
(3) Financial position(Assets)
Total assets as of June 30, 2023, decreased to 18,193 million yen(compared to 18,775 million yen as of March 31, 2023).
Cash and deposits decreased to 2,988 million yen (compared to 3,130
million yen as of March 31, 2023). The main reasons for the decrease
were repayment of borrowings, expenses and interest payments.
Meanwhile, the amount of the cash and deposits include 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 with high liquidity belonging to the JAIC Group were cash andcash equivalents of 1,799 million yen as of June 30, 2023 (compared to1,762 million yen as of March 31, 2023) in the consolidated statementsof cash flows.
In addition, private equity investments conducted by the JAIC Group arehighly affected by factors such as stock market fluctuations because ofthe 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 (PP&E) mainly consists of assets ofprojects operated by the JAIC Group, such as renewable energy power
plant facilities, vegetable plant facilities and group homes for disabledpeople. Total amount of PP&E decreased to 5,355 million yen (comparedto 5,432 million yen as of March 31, 2023). While JAIC invested in grouphomes for disabled people, PP&E decreased due to depreciation and4 / 7

reduction entries, as well as the transfer from the construction inprogress to items other than PP&E at the time of the completion of thepower plant.
Operational investment securities consist of private equity investments,
the projects operated by the JAIC Group and that are in the initial stagesof development, and the projects operated by other companies.
Operational investment securities as of June 30, 2023, decreased to8,810 million yen (compared to 9,375 million yen as of March 31, 2023).
The main reasons for the decrease were positive investment collection
and decrease of unrealized gain of listed shares.
Allowance for possible investment losses as of June 30, 2023, increased
to 1,723 million yen (compared to 1,588 million yen as of March 31, 2023),
because of positing provisions.
As a result, the investment loss provision ratio (ratio of allowance forpossible investment losses to operational investment securities) as ofJune 30, 2023, was 19.6%, up 2.7 points from March 31, 2023.
(Liabilities)
Total liabilities were 9,622 million yen as of June 30, 2023 (compared to9,673 million yen as of March 31, 2023), about the same as March 31,2023.
Of liabilities, total of loans payable and bonds as of June 30, 2023,
decreased to 8,682 million yen (compared to 8,993 million yen as ofMarch 31, 2023).
Loans payable of JAIC itself were 4,825 million yen (compared to 5,137
million yen as of March 31, 2023). After securing investment funds for
future growth, JAIC will repay its loans payable.
As for project finance and bonds for the projects operated by the JAIC
Group, the balance as of June 30, 2023, were 3,857 million yen(compared to 3,856 million yen as of March 31, 2023). The amount of new
procurement and the amount of repayment were comparable, and thebalance was about the same as of March 31, 2023.
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 the5 / 7

projects. Therefore, the JAIC Group will continue to expand fundprocurement through 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 while maintaining financial soundness.
(Net assets)
Of net assets, total shareholders’ equity as of June 30, 2023, decreased
to 7,329 million yen (compared to 7,581 million yen as of March 31, 2023)
due to loss attributable to owners of parent and decrease of unrealized
gain of listed shares. As a result, the equity ratio as of June 30, 2023,
was down 0.1 points to 40.3% (compared to 40.4% as of March 31, 2023).
Non-controlling interests also decreased. As a result, total net assets asof June 30, 2023, decreased to 8,570 million yen (compared to 9,101
million yen as of March 31, 2023).
(4) Business Position(a) Investment and loan activities
For the first quarter of the current fiscal year under review, executionof investments and loans increased by 428.7% year-on-year to 493
million yen in 9 companies/projects. As of June 30, 2023, the balance ofinvestments and loans decreased to 13,252 million yen in 122
companies/projects(comparedto14,133

millionyenin131

companies/projects as of March 31, 2023).
Looking at project-oriented investment, it increased by 290.7% year-onyear to 319 million yen in 5 projects that total amount of execution ofinvestments and loans in new projects and in existing projects. The
investment amounts increased mainly in renewable energy projects.
As for investment collection, redemption of bonds and distributions fromexisting projects reduced the balance. As a result, the balance ofinvestments and loans as of June 30, 2023, decreased to 6,854 million
yen in 51 projects (compared to 7,123 million yen in 50 projects as ofMarch 31, 2023).
As of June 30, 2023, JAIC invested in 13 mega solar projects (15 power
6 / 7plants) with the capacity of 30.7ＭＷ which are either currently sellingelectricity or are under construction or planning. Out of these mega solar
projects, the portion that attributable to JAIC is 13.1ＭＷ in capacity. JAIC
also invested in two biomass project with the capacity of 4.0ＭＷ, twobiogas projects with the capacity of 1.1ＭＷ, one biogas plant operator,
one wind power project with the capacity of 25.2ＭＷ at most and threesolar power systems with storage batteries installed on the rooftops withthe total capacity of 1.2ＭＷ in total.
Looking at private equity investment, for the first quarter of the current
fiscal year under review, it increased by 1,419.4% year-on-year to 173
million yen in 4 companies that total amount of execution of investments
and loans in new companies and in existing companies. The amountincreased mainly from a fund that supports business succession.
As for investment collection, JAIC sold listed shares and unlisted sharesin Japan. As a result, the balance of investments and loans decreased to6,398 million yen in 71 companies (compared to 7,010 million yen in 81
companies as of March 31, 2023).
(b) Management of investment funds
As of June 30, 2023, the number of investment funds, for which the JAIC
Group is responsible for management, operation or provision ofinvestment information, totaled 9, and the balance of total commitment
amounts under management increased to 16,397 million yen (comparedto 9 investment funds with 15,850 million yen as of March 31, 2023).
In the first quarter of the current fiscal year under review, “Succession
Investment Limited Partnership, Ⅱ” increased its commitment amounts.
Foreign exchange fluctuation also increased the balance of totalcommitment amounts.

(End)

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