ジャフコ　グループ（8595） – Financial Results for the Year Ended March 31, 2022

JAFCO Group Co., Ltd. The original disclosure in Japanese was released on April 22, 2022 at 12:00 (GMT+9). This is a summary translation of a press release made in Japanese for convenience only. JAFCO Group Co., Ltd. (Ticker: 8595) 1-23-1 Toranomon, Minato-ku, Tokyo 105-6324 Japan https://www.jafco.co.jp/english/ Contact: Investor Relations Tel: +81-50-3734-2025 ir@jafco.co.jp April 22, 2022 Financial Results for the Year Ended March 31, 2022 [Japanese GAAP] (Summary of Japanese announcement) 1. Consolidated Performance for the Year ended March 31, 2022 (April 1, 2021 – March 31, 2022) (1) Consolidated Operating Results (Figures with % indicate the rate of change from the same period of the previous fiscal year) (Japanese yen figures less than one million yen are rounded down) Net sales [¥ million] [%] Operating income [¥ million] [%] Ordinary income [¥ million] [%] Profit attributable to JAFCO Group Co., Ltd. stockholders [¥ million] [%] For the year ended March 31, 2022 27,677 28.7 16,876 88.2 18,360 56.8 15,080 (60.8) For the year ended March 31, 2021 Note: Comprehensive income Year ended March 31, 2022: ¥25,678 million [(36.9%)] 21,512 11,707 (27.9) (40.1) 8,964 Year ended March 31, 2021: ¥40,675 million [42.1%] (31.3) 38,504 225.2 For the year ended March 31, 2022 For the year ended March 31, 2021 Profit per share [¥] Fully diluted net income per share [¥] Return on equity [%] Ordinary income/ total assets [%] Operating income/ net sales [%] 192.50 416.48 – – 7.3 19.1 7.4 4.8 61.0 41.7 (Ref.) Equity method investment gain or loss Year ended Mar. 31, 2022: ¥- million Year ended Mar. 31, 2021: ¥- million (Note) The Company conducted a 3-for-1 stock split as of February 1, 2022. “Profit per share” was calculated assuming that the stock split took place at the beginning of the previous fiscal year (2) Consolidated Financial Position Total assets [¥ million] Net assets [¥ million] Equity ratio [%] Net assets per share [¥] As of March 31, 2022 As of March 31, 2021 233,024 262,383 197,390 215,237 84.7 82.0 2,769.16 2,438.71 (Reference) Shareholders’ equity (Note) The Company conducted a 3-for-1 stock split as of February 1, 2022. “Net assets per share” was calculated assuming that the stock split took place at the beginning of the previous fiscal year. As of March 31, 2022: ¥197,390 million As of March 31, 2021: ¥215,237 million 1 JAFCO Group Co., Ltd. (3) Consolidated cash flows For the year ended March 31, 2022 For the year ended March 31, 2021 2. Dividends Cash flows from operating activities [¥ million] Cash flows from investing activities [¥ million] Cash flows from financial activities [¥ million] Cash and cash equivalents at end of period [¥ million] (12,958) 8 748 49,154 (43,474) (13,944) 52,603 107,517 (Record date) End of 1Q End of 2Q End of 3Q Total Dividend per share [¥] End of the year Total dividends paid [¥ million] Payout ratio [consolidated] Dividend/ shareholders’ equity [consolidated] For the year ended March 31, 2021 For the year ended March 31, 2022 For the year ending March 31, 2023 (Forecast) – – – – – – – – – 138.00 138.00 4,059 11.0% 3.0% 51.00 51.00 3,635 26.5% 3.0% – – – Notes: 1. The dividend for the year ended March 31, 2022 is based on current plans. The forecast of dividend for the year ending March 31, 2023 is unfixed. The Company has set a policy to pay dividends of approximately 3% of shareholders’ equity (initial and term-end average value) effective fiscal year ended March 31, 2017. Dividend/ Shareholders’ equity: Dividend per share/ Shareholders’ equity per share (initial and term-end average value) 2. The Company conducted a 3-for-1 stock split as of February 1, 2022. The above dividend for the year ended March 31, 2021 shows the actual value of dividend before the stock split. 3. Business Forecasts for the Year ending March 31, 2023 (April 1, 2022 – March 31, 2023) Volatility in stock markets and the IPO environment in Japan and overseas causes performance to fluctuate, as a result of which it is difficult to make meaningful forecasts in earnings. Therefore, instead of announcing projections, the Company makes timely disclosure of quarterly financial results. *Other Information (1) Changes in significant subsidiaries during this period: None (2) Changes in accounting principles, accounting estimates and correction of prior period errors ① Changes in accounting principles due to revisions to accounting standards: Yes ② Changes in accounting principles other than ①: None ③ Changes in accounting estimates: None ④ Correction of prior period errors: None Note: Please refer to (5) Notes for Consolidated Financial Statements under the section “3. Consolidated Financial Statements and Main Notes” on page 16. (3) Number of issued shares (common stock) As of March 31, 2022: 80,910,000 ① Number of issued shares (including treasury shares) ② Number of treasury shares ③ Average number of shares As of March 31, 2022: 9,628,015 Year ended March 31, 2022: Year ended March 31, 2021: 78,338,168 92,452,061 As of March 31, 2021: 97,650,000 As of March 31, 2021: 9,391,218 Note: The Company conducted a 3-for-1 stock split as of February 1, 2022. “Number of issued shares,” “Number of treasury shares,” and “Average number of shares” were calculated assuming that the stock split took place at the beginning of the previous fiscal year. 2 For the year ended March 31, 2022 For the year ended March 31, 2021 For the year ended March 31, 2022 For the year ended March 31, 2021 JAFCO Group Co., Ltd. (Reference) Summary of Unconsolidated Performance Unconsolidated Performance for the Year ended March 31, 2022 (April 1, 2021 – March 31, 2022) (1) Unconsolidated Operating Results (Figures with % indicate the year-on-year rate of change) Net sales [¥ million] [%] Operating income [¥ million] [%] Ordinary income [¥ million] [%] Profit attributable to JAFCO Group Co., Ltd. stockholders [¥ million] [%] 26,589 30.3 16,542 98.9 18,099 66.1 14,840 (60.7) 20,407 (16.8) 8,317 (20.6) 10,896 (33.5) 37,757 223.7 Profit per share [¥] Fully diluted net income per share [¥] 189.44 408.40 – – Note: The Company conducted a 3-for-1 stock split as of February 1, 2022. “Profit per share” was calculated assuming that the stock split took place at the beginning of the previous fiscal year. (2) Unconsolidated Financial Position Total assets [¥ million] Net assets [¥ million] Equity ratio [%] Net assets per share [¥] As of March 31, 2022 As of March 31, 2021 (Reference) Shareholders’ equity 225,528 256,461 192,558 211,143 As of March 31, 2022: As of March 31, 2021: ¥192,558 million ¥211,143 million 85.4 82.3 2,701.36 2,392.32 Note: The Company conducted a 3-for-1 stock split as of February 1, 2022. “Net assets per share” was calculated assuming that the stock split took place at the beginning of the previous fiscal year. *These financial results are not subject to audit procedures. *Cautionary statements with respect to forward-looking statements and other notes (Access to the financial supplement materials) The presentation material for the year ended March 31, 2022 will be released on the Company’s website on April 22, 2022. *Note to XBRL Please note that the names of the English accounts contained in XBRL data, which are available through EDINET and TDNet, may be different from those of the English accounts in our financial statements. 3 JAFCO Group Co., Ltd. 1. Outline of Operating Results (1) Outline of Operating Results In the consolidated fiscal year ended March 31, 2022, the Company and its consolidated subsidiaries (collectively the “Company Group”) posted net sales of ¥27,677 million, (up 28.7% from ¥21,512 million for the previous fiscal year), operating income of ¥16,876 million (up 88.2% from ¥8,964 million), ordinary income of ¥18,360 million (up 56.8% from ¥11,707million), and profit attributable to JAFCO Group Co., Ltd. stockholders was ¥15,080 million (down 60.8% from ¥38,504 million). During the current fiscal year, there were six portfolio IPOs (four in Japan and two overseas), and capital gains increased from the previous year due to the sale of shares in a major IPO, etc. Success fees increased significantly from the previous year. (Outline of Capital Gains) There were six portfolio IPOs (four in Japan and two overseas), and capital gains on the sale of listed shares increased from the previous year due to the sale of shares in a major IPO, etc., capital gains on the sale of shares other than listed shares decreased in the current fiscal year. Year ended March 31, 2021 (A) Year ended March 31, 2022 (B) (Millions of Yen) Comparison (%) (B) / (A) Revenues from operational investment securities (1) Proceeds from sale of securities Dividend and interest income Cost of operational investment securities (2) Cost of securities sold Impairment Capital gains (1) – (2) Multiple (1) / (2) Capital gains on listed shares Capital gains on unlisted shares Gain on sale Loss on sale 16,164 16,074 90 4,903 4,903 – 11,260 3.30 7,567 3,693 4,435 742 20,257 20,147 109 7,619 6,848 770 12,638 2.66 12,596 41 3,142 3,100 125.3 125.3 120.8 155.4 139.6 – 112.2 – 166.5 1.1 70.8 417.7 4 JAFCO Group Co., Ltd. (Outline of Investment Loss Reserves) In the consolidated fiscal year ended March 31, 2022, additions to investment loss reserves decreased because of the limited impact of the new coronavirus pandemic. The ratio of reserves to the balance of unlisted operational investment securities also fell. Year ended March 31, 2021 (A) Year ended March 31, 2022 (B) (Millions of Yen) Comparison (%) (B) / (A) Additions to investment loss reserves (1) Company-by-company reserves (Reversal of) General reserves Reversal of investment loss reserves (2) Net additions = (1)-(2) (minus figures are reversals) 3,483 3,541 (58) 803 2,679 1,108 1,137 (29) 3,094 (1,985) As of March 31, 2021 As of March 31, 2022 (Millions of Yen) Balance of investment loss reserves Company-by-company reserves General reserves Ratio to all unlisted operational investment securities (Outline of Balance of Operational Investment Securities) The balance of operational investment securities rose because of steady investment mainly in startup companies. As of March 31, 2021 As of March 31, 2022 (Millions of Yen) 31.8 32.1 384.9 – – 8,969 8,853 116 12.1% 12,510 12,510 – – 10,917 10,772 145 17.3% 14,850 14,850 – (150) Year ended March 31, 2021 Year ended March 31, 2022 (Millions of Yen) Difference between acquisition cost and market value of listed operational investment securities Securities whose market value exceeds acquisition cost Securities whose market value falls below acquisition cost (Reversal of) Unrealized losses on operational investment securities 5 JAFCO Group Co., Ltd. Balance of Operational Investment Securities As of March 31, 2021 As of March 31, 2022 (Millions of Yen) Acquisition cost Acquisition cost Figures on the consolidated B/S Figures on the consolidated B/S 1,594 62,511 64,105 16,444 63,102 79,547 1,755 70,515 72,271 14,266 73,914 88,180 Listed Unlisted Total (Outline of Fund Operations) Success fees increased significantly from the previous year due to such factors as the sale of shares in a major IPO in the current fiscal year. Management fees approximated the level of the previous year. Year ended March 31, 2021 (A) Year ended March 31, 2022 (B) Comparison (%) (B) / (A) (Millions of Yen) Income from partnership management Fund management fees Success fees 5,340 2,871 2,469 7,410 2,949 4,461 138.7 102.7 180.6 Note: Fund management fees and success fees are based on commitment amount excluding the Company Group’s commitment. (2) Outline of Financial Condition (i) Outline of assets, liabilities, and net assets Assets, liabilities, and net assets decreased due to share buybacks and the payment of corporate tax. The share buyback based on the resolution of the Board of Directors meeting held on February 10, 2021 was completed with the acquisition of 14,299,800 shares (acquisition cost ¥34,999 million) by June 15, 2021. Based on the resolution of the Board of Directors meeting held on April 21, 2021, 6,750,000 treasury shares were cancelled as of May 7, 2021, and a further 9,990,000 treasury shares were cancelled as of June 29, 2021 based on the resolution of the Board of Directors meeting held on June 16, 2021. As a result, retained earnings and treasury shares decreased by ¥36,938 million. With regard to the share buyback based on the resolution of the Board of Directors meeting held on October 22, 2021, 7,207,600 shares (acquisition cost: ¥14,615 million) were bought back by March 31, 2022. As a result, as of the end of the current fiscal year, retained earnings decreased by ¥25,917 million and treasury shares increased by ¥2,526 million from the previous fiscal year-end. Please note that the above numbers of shares reflect a 3-for-1 stock split that the Company conducted as of February 1, 2022. 6 JAFCO Group Co., Ltd. (Millions of Yen) As of March 31, 2021 As of March 31, 2022 262,383 177,455 84,928 47,145 20,351 26,794 215,237 233,024 134,407 98,616 35,633 4,563 31,070 197,390 Total assets Current assets Non-current assets Total liabilities Current liabilities Non-current liabilities Net assets (ii) Outline of cash flows For the year ended March 31, 2021 For the year ended March 31, 2022 Amount Amount Main factor (Millions of Yen) Cash flows from operating activities 8 (12,958) Payment of corporate tax, etc. Cash flows from investing activities 49,154 Cash flows from financing activities (13,944) (43,474) 748 Distributions from other funds, etc. Expenditure related to share buyback, etc. Other 258 769 Exchange rate fluctuation Term-end balance of cash and cash equivalents [Of which, interests in funds] 107,517 [7,843] 52,603 [8,838] Note: JAFCO Group’s uncalled commitments to JAFCO-managed funds as of March 31, 2022 were ¥28,125 million, compared with ¥31,624 million at the end of previous fiscal year. (Cash flow indices) Fiscal year ended Equity ratio (%) Market price-based equity ratio (%) Cash flows/ Interest-bearing debt ratio (year) Interest coverage ratio (times) March 2018 March 2019 March 2019 March 2021 March 2022 83.7 81.4 0.1 202.8 88.6 66.6 – – 84.8 39.2 0.0 7,727.8 82.0 73.8 14.3 7.7 84.7 57.4 – – Equity ratio: Shareholders’ equity / Total assets Market price-based equity ratio: Market capitalization/ Total assets Cash flow/ Interest-bearing debt ratio: Interest-bearing debt/ Cash flows Interest coverage ratio: Cash flows/ Interest expense Notes: 1. Market capitalization is based on the number of issued shares excluding treasury shares. 2. Operating cash flows are used as cash flows. 3. The interest-bearing debts include all the liabilities on the balance sheets, whose interest is being paid. 4. Cash flows/ Interest-bearing debt ratio and interest coverage ratio for the fiscal year ended March 31, 2019 and the fiscal year ended March 31, 2022 are not shown because operating cash flows were negative. 7 JAFCO Group Co., Ltd. (3) Policy on Distribution of Profits and Dividends for the Current Fiscal Year/ Next Fiscal Year In February 2021, JAFCO Group announced the policy on future shareholder returns, which stipulates that if the sum of cash and equivalents and mark-to-market valuation (after tax) of NRI shares exceeds the amount of funds necessary for future investments (currently about ¥120 billion) by a certain amount, the Company will consider a share buyback. In the current fiscal year, shares totaling ¥24,846 million were bought back between April 1 and June 15, 2021 based on the resolution of the Board of Directors meeting held on February 10, 2021, and shares totaling ¥14,615 million were bought back between October 25, 2021 to March 31, 2022 based on the resolution of the Board of Directors meeting held on October 22, 2021. Regarding the dividend, the Company has set a policy to pay dividends of approximately 3% of shareholders’ equity (initial and term-end average value). For the current fiscal year, it plans to pay ¥51 per share based on the above indicator (the actual dividend per share paid in the previous fiscal year before the 3-for-1 share split conducted as of February 1, 2022 was ¥138). The Company remains committed to secure necessary funds required to continue investment under any circumstances, while maintaining a good balance between proactive investment based on our investment policy and continuous shareholder returns. 2. Basic Rationale for Selection of Accounting Standards Valuation of unlisted shares and the scope of consolidation for funds, which are essential for the proper representation of the JAFCO Group’s financial conditions and operating performance, differ between Japanese Accounting Standards and IFRS. At present, we consider Japanese Accounting Standards reasonable and have no immediate plans to convert to IFRS for the preparation of consolidated financial statements. 8 JAFCO Group Co., Ltd. 3. Consolidated Financial Statements (1) Consolidated Balance Sheets (Millions of yen) As of March 31, 2021 As of March 31, 2022 Assets Current assets Cash and deposits Operational investment securities Investment loss reserves Other Total current assets Non-current assets Property, plant and equipment Buildings, net Furniture and fixture Total property, plant and equipment Intangible assets Software Total intangible assets Investments and other assets Investment securities Long-term loans receivable Deferred tax assets Other Total investments and other assets Total non-current assets Total assets 107,517 79,547 (10,917) 1,307 177,455 295 75 370 228 228 83,578 162 193 394 84,329 84,928 262,383 52,603 88,180 (8,969) 2,593 134,407 259 57 316 168 168 97,251 208 279 390 98,130 98,616 233,024 9 JAFCO Group Co., Ltd. (Millions of yen) As of March 31, 2021 As of March 31, 2022 Liabilities Current liabilities Current portion of long-term borrowings Income taxes payable Provision for bonuses Allowance for extraordinary compensation for directors Other Total current liabilities Non-current liabilities Long-term borrowings Retirement benefit liability Deferred tax liabilities 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 Valuation difference on available-for-sale securities Foreign currency translation adjustment Total income Total net assets accumulated other comprehensive Total liabilities and net assets 15 17,124 257 86 2,867 20,351 100 427 26,148 119 26,794 47,145 33,251 32,806 102,497 (17,741) 150,813 63,688 735 64,424 215,237 262,383 134 357 313 95 3,662 4,563 49 423 30,518 79 31,070 35,633 33,251 32,806 76,579 (20,268) 122,368 73,645 1,376 75,022 197,390 233,024 10 JAFCO Group Co., Ltd. (2) Consolidated Statements of Income and Consolidated Statement of Comprehensive Income (Consolidated Statements of Income) (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 16,164 5,340 6 21,512 4,903 795 5,699 15,812 2,679 (150) 13,284 4,319* 8,964 69 1,409 354 907 21 2,761 1 11 5 0 18 11,707 44,764 44,764 － 56,471 18,076 (108) 17,967 38,504 － 38,504 20,257 7,410 9 27,677 7,619 1,133 8,752 18,924 (1,985) － 20,909 4,033* 16,876 45 990 186 342 15 1,581 0 12 81 3 97 18,360 186 186 － 18,547 3,589 (121) 3,467 15,080 － 15,080 *see note (i) on P.16 Net sales Revenue from operational investment securities Income from partnership management Other sales Total net sales Cost of sales Cost of operational investment securities Other costs Total cost of sales losses on operational Gross profit (Reversal of) Additions to investment loss reserves (Reversal of) unrealized investment securities Gross profit – net Selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Foreign exchange gains Gain on investment in other funds Miscellaneous income Total non-operating income Non-operating expenses Interest expenses Contribution to an investee Commission for purchase of treasury shares Miscellaneous losses Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of investment securities Total extraordinary income Extraordinary losses Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to JAFCO Group Co., ,Ltd. stockholders 11 JAFCO Group Co., Ltd. (Consolidated Statement of Comprehensive Income) (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Profit Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total other comprehensive income Comprehensive income [Breakdown] Comprehensive income attributable to JAFCO Group Co., Ltd. stockholders Comprehensive income attributable to non-controlling interests 38,504 2,159 11 2,171 40,675 40,675 － 15,080 9,957 640 10,598 25,678 25,678 － 12 JAFCO Group Co., Ltd. (3) Consolidated Statements of Changes in Shareholders’ Equity Previous Fiscal Year (April 1, 2020 – March 31, 2021) Shareholders’ equity (Millions of yen) Total shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares 33,251 32,806 67,643 (7,587) – (3,649) 38,504 (0) 34,854 102,497 0 (10,154) (10,154) (17,741) 126,113 (3,649) 38,504 (10,154) 0 24,700 150,813 Balance at beginning of current period Change of items during the period Dividends of surplus Profit attributable to JAFCO Group Co., Ltd. stockholders Purchase of treasury shares Disposal of treasury shares Net change of items other than shareholders’ equity Total change of items during the period Balance at end of period Balance at beginning of current period Change of items during the period Dividends of surplus Profit attributable to JAFCO Group Co., Ltd. stockholders Purchase of treasury shares Disposal of treasury shares Net change of items other than shareholders’ equity Total change of items during the period Balance at end of period – 2,159 2,159 63,688 33,251 32,806 Other accumulated comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total other accumulated comprehensive income Total net assets 61,529 723 62,252 188,366 11 11 735 (3, 649) 38,504 (10,154) 0 2,171 2,171 2,171 64,424 26,871 215,237 13 JAFCO Group Co., Ltd. Current Fiscal Year (April 1, 2021 – March 31, 2022) Shareholders’ equity Balance at beginning of period 33,251 32,806 102,497 (17,741) 150,813 Share capital Capital surplus Retained earnings Treasury shares (Millions of yen) Total shareholders’ equity (4,059) 15,080 (36,938) (25,917) 76,579 (39,464) 36,938 (2,526) (20,268) (4,059) 15,080 (39,464) – (28,444) 122,368 Changes during period Dividends of surplus Profit attributable to JAFCO Group Co., Ltd. stockholders Purchase of treasury shares Cancellation of treasury shares Net changes in items other than shareholders’ equity Total change of items during the period Balance at end of period Changes during period Dividends of surplus Profit attributable to JAFCO Group Co., Ltd. stockholders Purchase of treasury shares Cancellation of treasury shares Net changes in items other than shareholders’ equity Total change of items during the period Balance at end of period 9,957 9,957 73,645 － 33,251 － 32,806 Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Total net assets Balance at beginning of period 63,688 735 64,424 215,237 640 640 1,376 (4,059) 15,080 (39,464) – 10,598 10,598 10,598 (17,846) 75,022 197,390 14 JAFCO Group Co., Ltd. (4) Consolidated Statements of Cash Flows (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Cash flows from operating activities Profit before income taxes Depreciation Increase (decrease) in allowance for investment loss Increase (decrease) in provision for bonuses Increase (decrease) in allowance for extraordinary compensation for directors Increase (decrease) in retirement benefit liability (Reversal of) unrealized losses on operational investment securities Interest and dividend income Interest expenses Foreign exchange losses (gains) Loss (gain) on sale of investment securities Gain on investments in other funds Decrease (increase) in investment securities for sale Other, net Subtotal Interest and dividends received Interest paid Income taxes paid Income taxes refund Net cash provided by (used in) operating activities Cash flows from investing activities Purchase of property, plant and equipment Purchase of intangible assets Proceeds from sale of investment securities Long-term loan advances Proceeds from collection of long-term loans receivable Payment for investments in other funds Proceeds from share of profits on investments in other funds Increase in other investments and assets Decrease in other investments and assets Net cash provided by (used in) investing activities Cash flows from financing activities Proceeds from long-term borrowings Repayments of long-term borrowings Dividends paid Purchase of treasury shares Proceeds from sale of treasury shares Net cash provided by (used in) 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 beginning of period Cash and cash equivalents at end of period 56,471 192 2,679 30 (2) (7) (150) (1,478) 1 (500) (44,764) (907) (7,881) 424 4,107 1,478 (1) (5,576) 0 8 (55) (72) 48,253 (62) 17 (176) 1,295 (50) 5 49,154 100 (234) (3,650) (10,160) 0 (13,944) 258 35,476 72,040 107,517* 18,547 205 (1,985) 56 9 (3) － (1,036) 0 (230) (186) (342) (7,982) (795) 6,254 1,036 (0) (20,252) 3 (12,958) (59) (17) 390 (62) 17 (82) 559 (19) 22 748 100 (32) (4,059) (39,483) － (43,474) 769 (54,914) 107,517 52,603* *see notes (i) (ii) on P.17 15 JAFCO Group Co., Ltd. (5) Notes for Consolidated Financial Statements (Notes on premise of going concern) None (Change in accounting principles) (Adoption of accounting standards for fair value measurement) The Company Group has adopted the “Accounting Standards for Fair Value Measurement” (Corporate Accounting Standard No. 30 issued on July 4, 2019; hereinafter “Fair Value Measurement Standards”) since the beginning of the current fiscal year, with the aim of applying new accounting principles set out in the Fair Value Measurement Standards, etc. in accordance with the transitional treatment provided in Article 19 of the Fair Value Measurement Standards and Article 44-2 of the Accounting Standards for Financial Instruments (Corporate Accounting Standards No. 10 issued on July 4, 2019). As a result, of available-for-sale securities, the figures on the consolidated B/S for non-equity investments, etc., including in warrants and convertible bonds, refer to market value, instead of acquisition cost up to the end of the previous year, and valuation difference is booked directly in net assets from the beginning of the current fiscal year. (Additional information) (Adoption of accounting standards for revenue recognition) The Company Group has adopted the “Accounting Standards for Revenue Recognition” (Corporate Accounting Standard No. 29 issued on March 31, 2020; hereinafter “Revenue Recognition Standards”) since the beginning of the current fiscal year. Please note that the “Accounting Standards for Revenue Recognition” issued on March 30, 2018 has been applied since the beginning of the fiscal year ended March 31, 2019. As a result, the breakdown of revenue from contracts with customers for the current fiscal year is given under (5) Note for Consolidated Financial Statements, (Revenue recognition related) in 3. Consolidated Financial Statement and Main Notes. Please note that the breakdown of revenue from contracts with customers for the previous fiscal year is not given, in accordance with the transitional treatment provided in Article 89-3 of the Revenue Recognition Standards. (Related to consolidated statements of income) (i) Selling, general and administrative expenses (major items) For the year ended March 31, 2021 For the year ended March 31, 2022 (Millions of Yen) Directors’ compensation Allowance for extraordinary compensation for directors 199 84 1,181 392 83 189 1,192 203 92 1,275 500 88 184 550 Salaries Bonuses to employees Retirement benefit expenses Rental expenses Taxes and dues 16 JAFCO Group Co., Ltd. (Related to consolidated statements of cash flows) (i) Relationship between the balance of cash and cash equivalents as of the year-end and the items stated in the consolidated balance sheets (Millions of Yen) For the year ended March 31, 2021 For the year ended March 31, 2022 107,517 107,517 52,603 52,603 For the year ended March 31, 2021 For the year ended March 31, 2022 (Millions of Yen) 7,843 7,843 8,838 8,838 (ii) Breakdown of JAFCO’s interest of cash and cash equivalents in funds Cash and time deposits Cash and cash equivalents Cash and time deposits Cash and cash equivalents (iii) The Company Group’s uncalled commitments to funds managed by the Company Group as of March 31, 2022 were ¥28,125 million, compared with ¥31,624 million as of the end of previous fiscal year. (Segment information) Previous fiscal year (April 1, 2020 –March 31, 2021) and current fiscal year (April 1, 2021 –March 31, 2022) Since the JAFCO Group carries out managements of funds as a single business segment, business segment information is not presented. (Notes on marketable securities) (i) Held-to-maturity bonds None 17 – – – – – – – – – – – – JAFCO Group Co., Ltd. (ii) Available-for-sale securities (Millions of Yen) Type As of March 31, 2021 As of March 31, 2022 Figures on the consolidated B/S Acquisition cost Difference Figures on the consolidated B/S Acquisition cost Difference Operational investment securities (1) Stock Listed securities Other listed securities (2) Bond (3) Others (1) Stock (2) Bond (3) Others Operational investment securities (1) Stock Listed securities Other listed securities (2) Bond (3) Others Subtotal Investment securities (1) Stock (2) Bond (3) Others 16,444 1,594 14,850 14,266 1,755 12,510 105 1,210 1,048 76 731 968 29 479 80 Securities whose B/S amount exceeds acquisition cost Subtotal Investment securities 16,444 1,594 14,850 16,631 3,532 13,098 82,156 5,851 76,305 96,067 5,851 90,216 Subtotal Total 82,156 98,601 5,851 7,445 76,305 96,067 91,156 112,698 5,851 9,383 90,216 103,315 – – – – – – – – – – – – – – – – – – – – – – – – – – – 747 398 42 20 – – 20 – – – 751 452 42 32 – – 32 – – – (3) (54) (0) (58) (11) – – (11) (69) Securities whose B/S amount falls below acquisition cost 1,188 1,246 21 32 (10) Subtotal Total 21 21 32 32 (10) (10) 1,208 1,278 Grand total 98,622 7,477 91,145 113,906 10,661 103,245 Note: 1. In accordance with the adoption of the Fair Value Measurement Accounting Standards, securities listed on the TOKYO PRO Market and on Emerging Stock Board of the Taipei Exchange (TPEx) have been classified as “Other listed securities” since the beginning of the current fiscal year. Please note that, taking into account the liquidity of these markets, these securities are classified under “unlisted shares” in disclosure information other than the information related to this note. 2. The following items are not included in the above table because they had no market value as of the end of the previous fiscal year, making it difficult to determine fair value, or there are extremely few cases of actual trading on the stock exchange/ over the counter. Unlisted stock, etc. are not included in the above table as of the end of the current fiscal year. 18 JAFCO Group Co., Ltd. (Millions of Yen) As of March 31, 2021 As of March 31, 2022 Figures on the consolidated B/S Figures on the consolidated B/S Available-for-sale securities Operational investment securities Unlisted stock Unlisted domestic and foreign bonds Others Investment securities Unlisted stock Others 61,060 1,271 770 794 412 70,361 – – 606 364 (iii) Available-for-sale securities which were sold (Millions of Yen) Operational investment securities Investment securities Total For the year ended March 31, 2021 For the year ended March 31, 2022 Proceeds from sale Total gain on sale Total loss on sale Proceeds from sale Total gain on sale Total loss on sale 16,074 11,912 (742) 20,147 15,629 (2,329) 48,257 64,331 44,767 56,680 – 390 186 (2) (742) 20,538 15,816 (2,331) (iv) Impairment of securities In the current fiscal year, impairment losses (write-down of acquisition costs) of ¥770 million (all operating investment securities) were recorded on available-for-sale securities (none in the previous year). (Revenue recognition related) Breakdown of revenue from contracts with customers The Company Group operates in a single segment of the fund management business. Of net sales, income from partnership management consisting of management fees and success fees is derived from contracts with customers. The breakdown of the said revenue from contracts with customers by fund series is given below. (Millions of Yen) Year ended March 31, 2022 (from April 1, 2021 to March 31, 2022） Income from partnership management Fund name Management fees Success fees Total JAFCO SV3 Series JAFCO SV4 Series JAFCO SV5 Series JAFCO SV6 Series JAFCO Asia Technology Fund VI L.P. JAFCO Asia Technology Fund VII L.P. Others Total 19 1,244 – 275 703 132 197 395 2,949 2,870 1,277 303 – – – 9 4,461 2,870 1,553 703 1,244 436 197 404 7,410 JAFCO Group Co., Ltd. (Per share information) For the year ended March 31, 2021 For the year ended March 31, 2022 Net assets per share [¥] 2,438.71 Net assets per share [¥] 2,769.16 Profit per share [¥] 416.48 Profit per share [¥] 192.50 Notes: 1. Fully diluted profit per share is not shown because there are no dilutive potential shares. 2. The Company conducted a 3-for-1 stock split as of February 1, 2022. Net assets per share and profit per share were calculated assuming that the stock split took place at the beginning of the previous fiscal year. 3. Profit per share is calculated based on the following data. Profit per share Profit attributable to JAFCO Group Co., Ltd. stockholders (¥ million) Amount not appertaining to common stock shareholders (¥ million) Profit related to common shares attributable to JAFCO Group Co., Ltd. stockholders (¥ million) Weighted average number of common shares (thousand shares) For the year ended March 31, 2021 For the year ended March 31, 2022 38,504 15,080 – 38,504 92,452 – 15,080 78,338 None (Significant subsequent events) 20 JAFCO Group Co., Ltd. 4. Other Information (1) Investments and IPOs (i) Investments (Millions of Yen) Year ended March 31, 2021 (A) Year ended March 31, 2022 (B) Amount (A) No. of companies Amount (B) No. of companies Comparison (%) (B) / (A) 21,491 7,637 3,684 32,813 35 18 13 66 23,216 7,775 6,060 37,053 56 16 21 93 Notes: 1. Investment amount is a total of investments by the Company Group and funds. 2. Investments denominated in foreign currencies are translated into yen on a quarterly basis using the exchange rate at the end of each quarter. 3. Overseas investments made in the venture investment division in Japan are included in Japan. (Japan) (Millions of Yen) For the year ended March 31, 2021 For the year ended March 31, 2022 108.0 101.8 164.5 112.9 Notes: 1. “Investment cost” and “Market value at IPO” are total amounts by the Company Group and funds. 2. “Market value at IPO” is calculated by multiplying the number of shares held prior to the IPO by first price. (Overseas) (Millions of Yen) For the year ended March 31, 2021 For the year ended March 31, 2022 5 2,388 35,210 14.7 1 302 2,315 7.7 4 3,074 41,515 13.5 2 1,942 5,291 2.7 Notes: 1. “Investment cost” and “Market value at IPO” are total amounts by the Company Group and funds. Exchange rate at the time of IPO is used for conversion. 2. “Market value at IPO” is calculated by multiplying the number of shares held prior to the IPO by first price. Equity (Japan) (USA) (Asia) Total (ii) IPOs Number of IPOs Investment cost (1) Market value at IPOs (2) Multiple (2)/(1) Number of IPOs Investment cost (1) Market value at IPOs (2) Multiple (2)/(1) 21 JAFCO Group Co., Ltd. (2) Establishment of Funds Year ended March 31, 2022 (April 1, 2021 – March 31, 2022) (i) Newly established funds: (Millions of USD) Fund name JAFCO Asia S-8 Fund Limited Partnership JAFCO Asia S-8(A) Fund Limited Partnership Note: Final close took place in December 2021 Total commitments as of March 31, 2022 130 (ii) Funds established in previous years whose total commitments increased in this period (Millions of USD) Fund name Total commitments as of March 31, 2022 Total commitments as of March 31, 2021 Increase in commitments Icon Ventures VII, L.P. 227 178 48 Fundraising underway Previous full year (April 1, 2020 – March 31, 2021) (i) Newly established funds: Fund name (Millions of USD) Total commitments as of March 31, 2021 Icon Ventures VII, L.P. 178 Fundraising underway (ii) Funds established in previous years whose total commitments increased (Millions of TWD) Fund name JAFCO Taiwan I Venture Capital Limited Partnership Total commitments as of March 31, 2021 Total commitments as of March 31, 2020 Increase in commitments 2,006* 1,037 969 *Calculated based on the exchange rate as of the end of March 2021: ¥7,803 million 22