Japan Asia Investment : Qualitative Information on Consolidated Operating Results for the nine months Ended Dec. 31, 2022

This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. JAIC assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

Qualitative Information on Consolidated Operating

Results for the nine months Ended December 31,

2022

(1) Outline of consolidated operating results

The consolidated operating results of the JAIC Group for the third quarter of the current fiscal year under review (from April 1, 2022 to December 31, 2022) recorded operating revenue of 3,377 million yen (up 22.0% year-on-year), operating gross profit of 1,324 million yen (up 17.2 % year- on-year), operating profit of 233 million yen (up 275.3 % year-on-year), ordinary profit of 127 million yen (compared to ordinary loss of 49 million yen for the same period of the previous fiscal year) and loss attributable to owners of parent of 103 million yen (compared to loss attributable to owners of parent of 227 million yen for the the same period of the previous fiscal year). The breakdown of operating results are as follows.

1. Breakdown of operating revenue and operating cost (Fund management fees)
   Fund management fees etc. consist of management fees and administrative fees from investment funds. Fund management fees etc. were 87 million yen (down 2.2 % year-on-year), about the same as year- on-year. The management fees from funds in liquidation process decreased.

(Investment income)

The proceeds of sale of operational investment securities increased to 1,996 million yen (up 20.2 % year-on-year). Realized capital gain, which is calculated by deducting cost of securities sold from proceeds of sales

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of operational investment securities, also increased to 972 million yen (up 20.3% year-on-year).

As for private equity investment, JAIC had mainly sold Japan listed shares for the third quarter of the previous fiscal year. On the other hand, JAIC sold Japan and overseas unlisted shares, which were relatively large investment amounts, for the third quarter of the current fiscal year under review.

As for project-oriented investment, JAIC had sold one mega solar project and had partially sold one distribution warehouse project for the third quarter of the previous fiscal year. On the other hand, JAIC only sold one mega-solar project for the third quarter of the current fiscal year under review.

The total amount of investment write-offs and provision for allowance for possible investment losses increased to 463 million yen (up 176.9 % year- on-year). JAIC posted provisions for investee companies those experienced significant delays in business progress and for which negotiation for the recovery of investment took a long time. Compared to the same period of the previous fiscal year, JAIC posted provisions for investee companies which were relatively large investment amounts.

As a result, investment income, which is calculated by deducting investment write-offs and provision for allowance for possible investment losses from realized capital gains, decreased to 508 million yen (down 20.6 % year-on-year).

(Fund interests income, etc.)

Fund interests income, etc. consist of revenues of the projects operated by the JAIC Group (such as revenue from electricity sales, revenue from vegetable sales, rent fee revenue from group homes for the handicapped and other revenues), interests income from the projects operated by other companies (such as net profits of the projects and gains from the sale of projects), interests income from private equity funds operated by other companies, interest and dividend income and other income.

The total amount of fund interests income, etc. for the third quarter of the current fiscal year under review increased to 1,278 million yen (up

27.9 % year-on-year). Out of this, revenues of the projects operated by the JAIC Group (such as revenue from electricity sales, revenue from

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vegetable sales, rent fee revenue from group homes for the handicapped and other revenues) accounted for 568 million yen (down 40.2 % year- on-year). Revenue from electricity sales decreased because JAIC had sold some mega solar projects that were selling electricity in the previous fiscal year.

On the other hand, operational dividend income increased to 358 million yen (up 3,200.4 % year-on-year). JAIC received profit dividends from two logistic warehouse projects those sold their facilities.

Interests income from the projects and private equity funds operated by other companies also increased to 348 million yen (up 924.4 % year-on- year). One healthcare project operated by other company posted capital gain from selling the facility for the elderly.

(Fund interests losses, etc.)

Fund interests losses, etc. consist of costs of the projects operated by the JAIC Group (such as cost of electricity sales, cost of producing vegetables, rental cost of group homes for the handicapped and other costs), interests losses of the projects operated by other companies (such as losses mainly from projects in the early stage of launch) and interests losses of the private equity funds operated by other companies and others.

The total amount of fund interests losses etc. for the current fiscal year under review decreased to 555 million yen (down 9.2 % year-on-year). Out of this, costs of the projects operated by the JAIC Group (such as cost of electricity sales, cost of producing vegetables, rental cost of group homes for the handicapped and other costs) accounted for 492 million yen (down 14.0 % year-on-year). Cost of electricity sales decreased because JAIC had sold some mega solar projects that were selling electricity in the previous fiscal year.

Interests losses of the projects and private equity funds operated by other companies increased to 62 million yen (up 63.0 % year-on-year). Interests losses increased mainly from the projects in the initial stages of launch.

As a result, operating revenue increased by 22.0 % year-on-year to 3,377 million yen, operating cost increased by 25.2 % year-on-year to 2,053

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million yen and operating gross profit increased by 17.2 % year-on-year to 1,324 million yen.

1. Selling, general and administrative expenses and operating income The total amount of selling, general and administrative expenses increased to 1,091 million yen (up 2.2 % year-on-year). Administrative expenses from projects decreased because JAIC had sold some mega solar projects that were selling electricity in the previous fiscal year. On the other hand, provision for doubtful accounts increased.

As a result, operating profit was 233 million yen (up 275.3 % year-on- year).

1. Non-operatingincome, non-operating expenses and ordinary income Non-operating income decreased to 36 million yen (down 55.4 % year- on-year). Main reason was a decrease of foreign exchange gains incurred when recovering assets denominated in foreign currencies.
   Non-operating expenses mainly consists of interest expenses and decreased to 142 million yen (down 26.4 % year-on-year). On the non- consolidated basis, interest expenses decreased with the reduction of loans payable. On the consolidated basis, interest expenses also decreased with the reduction of loans payable because JAIC had sold some mega solar projects in the previous fiscal year.
   As a result, ordinary profit was 127 million yen (compared to ordinary loss of 49 million yen for the same period of the previous fiscal year).
2. Extraordinary income/loss and Profit

For the third quarter of the previous fiscal year, total amount of extraordinary income was 19 million yen. Main item was gain on sales of investment securities. For the third quarter of the current fiscal year under review, the total amount of extraordinary income was only 1 million yen.

For the third quarter of the previous fiscal year, total amount of extraordinary loss was 107 million yen. Main item was Loss on sales of investment securities. For the third quarter of the current fiscal year under review, total amount of extraordinary loss was 9 million yen. Main

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item was Loss on valuation of investment securities.

As a result, profit before income tax was 119 million yen (compared to loss before income tax of 137 million yen for the same period of the previous fiscal year).

(e) Loss attributable to owners of parent

Income tax-current increased to 90 million yen (up 2,688.9 % year-on- year) because of an increase of profit before income tax.

JAIC properly estimated tax effect accounting and did not recognize deferred tax assets for both the third quarter of the current fiscal year under review and the same period of the previous fiscal year.

Profit attributable to non-controlling shareholders is the profit attributable to fund investors other than the JAIC Group among the profits of the funds subject to consolidation. The amount increased to 132 million yen (up 52.7 % year-on-year) as the profits of the funds subject to consolidation increased.

As a result, loss attributable to owners of parent amounted to 103 million yen (compared to loss attributable to owners of parent of 227 million yen for the same period of the previous fiscal year).

(2) Cash flows

(Cash flow from operating activities)

Net cash generated from operating activities turned profitable and amounted to 517 million yen (compared to 542 million yen used in for the same period of the previous fiscal year). Profit before income tax increased and cash inflow from collection of investments increased.

(Cash flow from investing activities)

Net cash used in investing activities was 2 million yen (compared to 117 million yen generated from for the same period of the previous fiscal year). There were no proceeds from sale of non-operational investment securities for the third quarter of the current fiscal year under review.

(Cash flow from financing activities)

Net cash used in financing activities with repayments of long-term

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