JAFCO : Information Meeting for Financial Results for the Year Ended March 31, 2026

Keisuke Miyoshi President & CEO

Hiroaki Matsuda Corporate Officer, Administration

After this, our president, Mr. Miyoshi, will give an overview of the financial results and business activities for a little less than 30 minutes, and then we would like to take your questions.

The materials used for the presentation will be the FY March 2026 Earnings Presentation. As you have already received, we will be projecting the materials on a screen in the front of the room as we explain them to you.

Mr. Miyoshi will now begin his presentation.

Let me proceed from the first item, summary of fiscal year ended March 2026, changes in business environment and impact on portfolio companies.

The domestic TSE Growth Market as well as the IPO market remain at a low level. IPOs in the Growth Market totaled 32 for the year from April to March, down from 59 a year earlier. We recognize the need to continue

close monitoring of political trends and financial policies in Japan and abroad, startup-related policies in Japan, and the impact of TSE's amendment to the Growth Market listing criteria.

We had two IPOs in Japan. Capital gains totaled JPY8 billion for both listed and unlisted companies. The executed investment amount is JPY19.4 billion. As for the fund, the SV8 series was established in December. Currently, the amount is approximately JPY58 billion. We will continue the fundrasing with the aim of reaching a total size of JPY100 billion.

Last year, in April 2025, we made the decision to concentrate on domestic investments. Toward this end, we proceeded with the transfer of our overseas subsidiaries. The transfer of the Asia subsidiary was completed at the end of October last year, and the transfer of the US subsidiary was completed on January 6 of this year. The transfer generated approximately JPY2.7 billion in non-operating income and extraordinary income. After the transfer, we will continue to hold our investment in the existing funds managed by the Asia and US entities.

In terms of sustainability, we have established the Company's Human Rights Policy. In addition, we have signed the PRI and developed the Company's ESG Investment Policy.

Next, I would like to discuss shareholder returns. The share buyback of JPY5 billion was completed, and 1.81 million shares equivalent to 3.2% were cancelled, bringing the number of outstanding shares to 54.25 million.

Since the year-end dividend for the fiscal year ended March 31, 2026 is JPY66.5 per share and the interim dividend is also JPY66.5, there is no change to the planned annual total of JPY133. For the fiscal year ending March 31, 2027, we plan to pay an interim dividend of JPY66.5 per share and a year-end dividend of JPY66.5, the same as for the fiscal year ended March 31, 2026, for a minimum total annual dividend of JPY133.

As you will see at the end of this page, as of October 1, 2026, we plan to change our company name to JAFCO Co., Ltd.

From here, we will report the financial figures. We are transitioning to standalone financial statements from Q3. Changes have occurred as a result of the transfer of our overseas subsidiaries. We understand that some sections may be difficult to understand, but in order to make them as comparable as possible to the past, the past figures are also presented as non-consolidated figures or domestic figures only, excluding overseas funds.

Please turn to page five. First, we summarize the changes that occur as a result of the transfer of overseas entities. The left-hand side of the upper portion of the chart shows up to Q2 of the fiscal year ended March 31, 2026, and the right-hand side shows Q3 and beyond.

In terms of profit and loss for the changes, capital gains arising from interests in foreign funds will be recorded as non-operating income or loss. Neither management fees nor success fees will be generated after the transfer of overseas subsidiaries. In terms of B/S, the interests in foreign funds is transferred from operational investment securities to investment securities. The bottom row shows this as a figure.

Please turn to the next page. Next, a more specific table describing the changes in profit and loss recording is provided. Depending on the timing of the transfer of the Asia and the US subsidiary, changes have occurred as described regarding recording in financial statements.

Please turn to the next page. This page shows the change in performance. Capital gains amounted to JPY8 billion, of which JPY9.5 billion was domestic. Management fees was JPY3.2 billion, and success fees was JPY0.4 billion. Additions to investment loss reserves was JPY0.8 billion. SG&A expenses was JPY4 billion, operating income JPY5.6 billion, ordinary income JPY5.9 billion, and net income JPY6.6 billion. ROE for the period remained low at 4.8%.

We will continue on to page eight. It describes the breakdown of non-consolidated figures. We have included overall and domestic figures so that you can compare and see past figures. The figures shown on the right-hand side are cumulative figures for each quarter of the fiscal year ended March 31, 2026.

Next page. It shows the transitions of net sales and SG&A expenses. For each fiscal year, the left-side bars represent income sources, and the right-side bars represent SG&A expenses. The upper orange bars on the left represent capital gains, the middle bars represent success fees, and the lower blue bars represent management fees. The upper green area of the bars on the right is business taxes, and the lower gray area is SG&A expenses excluding business taxes.

The classification is made due to the large fluctuation in business taxes from gains on sales of securities holdings. Management fees for the period totaled JPY3.1 billion. Management fees from the fundraising for the new flagship fund, the SV8 series, will contribute from the next fiscal year. The number of employees at the end of the period is added to the bottom line.

The last column shows the percentage of SG&A expenses (excluding business tax) covered by management fees as the management fee coverage ratio. The above figures are based on non-consolidated figures.

Please skip one page and go to page 11. From here, the breakdown of net sales is provided by item. First is management fees. Our policy is to expand the size of funds over the medium to long term in line with market growth. As new funds are established and the amount of external investment in funds in operation grows, management fees will accumulate.

The bar graph shows the amount of management fees. The figures shown in gray on the left side of this page are the so-called actual results. As I mentioned earlier, the SV8 series has already been established, but it is not included in management fees for the current fiscal year, and so, it will be recorded in the next fiscal year and onward.

We will now move on to page 12. Next is success fees, which amounted to JPY400 million. Success fees are accrued on subsequent sales of securities held by funds in operation after accumulated distributions exceed the principal amount.

The figure on the right is based on the current balance of unlisted domestic investments and estimates the cumulative amount of success fees that would arise if the target MOIC were to remain at 3x. If the unlisted investment balance of the entire fund of JPY152 billion can be managed at an MOIC of 3x, which is our target as a guideline, the potential capital gain would be about JPY300 billion. Of this amount, if the external investment portion is estimated at approximately 65% of the current amount, it comes to about JPY195 billion. The success fee is 20% of the amount of this external investment ratio, which makes it about JPY39.5 billion. This is an estimate of the cumulative amount of accruals that would occur if the current unlisted investment balance were operated at the planned figures.

Next page. Lastly, I'd like to talk about capital gains. The bars in the graph represent capital gains. The green in the upper row shows the gain or loss from listed sales and the blue in the lower row shows the gain or loss from unlisted sales. The orange line graph represents MOIC. The MOIC for the JPY9.5 billion in domestic capital gains this fiscal year was 2.8x.

The bar chart on the right shows the breakdown of venture and buyout investments in capital gains.

In addition, the Appendix later in this document shows the MOIC since 2016.

Next page. It discusses the balance of unlisted operational investment securities. The bar graph is color-coded from the bottom to the top: gray is marked-down valuation, and blue in the middle row is the balance of reserves. The acquisition cost corresponds to the sum of the blue and the gray. The amount that includes the green portion above it is the fair value valuation. The balance of unlisted operational investment securities for the year ended March 31, 2026 was JPY46.3 billion, with a fair value of JPY57.5 billion.

The bar graph on the far right shows the image at the time of sale relative to the current balance. As shown in the square on the right-hand side, if the MOIC at the time of exit is set at 3x, the cumulative sales amount, cumulative capital gain, and cumulative profit on the income statement will each appear as assets like this. The cumulative sales amount is approximately JPY139 billion, the cumulative capital gain is approximately JPY92.5 billion, and the cumulative P&L is approximately JPY100 billion.

The average MOIC on an actual basis over the five-year period ending March 31, 2026 is 2.4x on an acquisition cost basis and 3.2x on a marked-down valuation basis.

Next is page 15. It is about the change in investment loss reserves. The blue bar on the left is the balance of reserves, and the green bar on the right is the amount of reserves. The orange line graph is the reserve ratio and shows the change from the past.

The balance of unlisted securities is shown where they are represented in the table at the bottom. The net reserve additions or the net amount is shown along with the number of portfolio companies covered by investment loss reserves.

Please turn to page 16. Next, the fair value valuation and valuation multiples for unlisted operational investment securities are provided. Here, too, we have revised the figures to domestic only.

Not all funds are audited with regard to fair values in Japan, and so, this is a reference value. In addition to the so-called markdowns, which reflect only reserves, fair value valuations are fair value basis, which is based on markups reflecting valuation gains on unlisted shares.

It is represented in the figure on the left. As noted earlier in the section on changes in the balance of unlisted operational investment securities, when the acquisition cost of JPY46.3 billion is multiplied by 1, the valuation after allowance is JPY37.3 billion, or 0.81 times. The reserve ratio is a figure of 19%. JPY57.5 billion to the right of that is the unlisted fair value valuation of JAFCO's interests. This is 1.24x. Taking the valuation after reserves as the starting point or 1x, the calculation is 1.24 divided by 0.81, which is 1.53x.

The next figure is in the middle. It represents the valuation multiple during the holding. The average holding period during the holding, that is, the average holding period since the initial investment for the stocks currently held, is 4.3 years. The average multiple of exits for the past five years through the fiscal year ended March 31, 2026 is 2.42x and 3.18x for the valuation after reserves. The holding period for the above is 6.6 years.

The figure on the right shows the valuation multiples for each holding period. Generally, the fair value multiples increase over time. The increase in the fair value of unlisted operational investment securities compared to last year was due to the progress of the exit of a portfolio company with a high fair value in the fiscal year ended March 31, 2025, and the business progress and performance of portfolio companies currently held in the fiscal year ended March 31, 2026.

Next page. Our asset composition and total funds in operation at the end of the fiscal year ended March 31, 2026 is discussed. I will explain this in conjunction with the status of cash and deposits on the next page.

The figure on the left is a simplified representation of the asset structure of JAFCO itself. The chart on the right shows the fund as a whole and our share of it as a whole for each of these items.

The next page shows the status of cash and deposits. Cash and deposits at the end of the fiscal year were JPY61.2 billion. If we exclude fixed-purpose cash and deposits, which includes cash in funds, from cash and deposits at the end of the period, we arrive at JPY51.1 billion, which is represented by C. The amount of D,

JPY13.6 billion, is what we will pay to the fund in the future in line with the progress of investment in the fund in operation.

The figure of JPY13.6 billion is the sum of the JPY5.2 billion in uncalled commitments to funds in the lower right-hand corner on page 17 and the JPY8.4 billion uncalled commitments to existing overseas fund, as noted in the notes at the bottom of page 18. After subtracting this amount, available cash and deposits after taking into account uncalled commitments to funds are JPY37.5 billion, which is the E-F portion, but after taking into account the JPY15 billion in CBs and long-term loan debt issued, net available cash and deposits are JPY22.5 billion. This will be the number listed at the bottom.

The JPY13.6 billion I mentioned earlier does not include the investment in the SV8 series established last December. The investment will be made from the JPY22.5 billion in this E. This will be the necessary cash for the fund.

Next page. Net assets. Net assets at the end of the period totaled JPY134.1 billion. Net assets per share were JPY2,549. For reference purposes, net assets per share reflecting after-tax fair value valuation are shown.

Please turn to page 20. The status of overseas fund interests is described here. As shown again in the upper part of the table, interests in overseas funds are recorded in the balance of investment securities. With the transfer, our company will switch to the position of an investor rather than an investment manager, and so, we have reviewed our reserves. As a result, an additional JPY1.7 billion was recorded as investment loss reserves. The investment gain or loss after the transfer is recorded in the non-operating profit and loss portion of the statement.

Next page. It is about changes in shareholder returns. For the fiscal year ended March 31, 2026 and beyond, we are strengthening shareholder returns by adopting a stable dividend policy of 6% DOE or a dividend payout ratio of 50%, whichever is greater.

There is no change in our plan to pay an interim dividend of JPY66.55 and a year-end dividend of JPY66.5 for the fiscal year ended March 31, 2026, for a total annual dividend of JPY133. The total return ratio is 107.6%. The planned dividend amount for the fiscal year ending March 31, 2027 is JPY66.5 for the interim dividend and JPY66.5 for the year-end dividend, for a total annual dividend of JPY133 as the minimum amount, since we will use shareholders' equity at the end of the fiscal year. Our return policy is 6% DOE or 50% payout ratio, whichever is higher.

We will now move on to page 23. In order to achieve our financial target of 15% to 20% ROE, we will concentrate on domestic investments and focus on core fund offerings as described above. There is no change in our shareholder return policy.

Please turn to page 24. At the end of the period, the cost of shareholders' equity was approximately 7%. In contrast, the adjusted ROE for the current period was low at 4.8%, and the average adjusted ROE for the most recent five years was 5.4%.

We intend to proceed in stages, in line with the cycle of the fund to be formed approximately every three and a half years, to achieve a level of ROE that exceeds the cost of shareholders' equity, and beyond that, a financial target of ROE of 15% to 20%.

Please turn to the next page. There is basically no change in our Basic Policy for Enhancing Corporate Value, other than the update there, for the fiscal year ended March 31, 2026.

Please turn to page 26. This is an excerpt from last April's disclosure.

Please skip ahead to page 30. This is the status of the funds as a whole, the investment structure. The domestic venture investment team has 43 members, the buyout investment team has 22 members, and the team for business development has 15 members.

Let's move on to the next page, the balance of unlisted holdings. The bar graph shows the change in assets under management for unlisted investments only, which are divided into two categories. The upper gray line shows the amount of markdown, and the lower blue line shows the investment balance after markdown. In both cases, the investment balance does not incorporate the so-called markup, only the markdown. On the

far right, we have included the fair value valuation we explained earlier as a reference value. Here the figures are the fair value valuations of the funds as a whole.

Let's move on to the next page. It shows the transition of executed investments in value terms. JPY19.4 billion, venture investments of JPY13.4 billion, and buyouts of JPY6 billion. Currently, our funds incorporate investments over a three to four year period, and meanwhile, the timing of investment varies from year to year. As such, there will be some unevenness, but on average, the annual amount will be around JPY24 billion.

Let's move on to the next page. It is about the transition of new investments in domestic ventures. The main targets for investment are early stage and seed stage. The orange line means the shareholding. The overall valuation in startup financing is slightly lower than it was at one time, but not much lower, especially in the earlier stages. I think this means that the environment continues to be difficult.

In the current period, the market capitalization after the capital increase has decreased, and the average shareholding has increased. Although we are conscious of the need to acquire substantial shareholding as part of our investment policy, there were few investment cases during the period under review involving large-scale fundraisings at high market capitalizations, which was the main factor.

Please skip to page 36. This section describes the status of domestic VC investments from sourcing to execution. The number of new companies invested in per year is targeted at between 20 and 30. There is no change in our investment style of conducting many new interviews and being very selective.

On page 37, you will find a selection of new portfolio companies in our venture portfolio.

The next page, page 38, lists two IPOs and two M&As as major exit results for the fiscal year.

The status of support for portfolio companies is described on page 39. The support for carefully selected investments is divided into three main areas: recruitment, marketing/sales, and back-office development, with a dedicated business development team working with the investment team on a per-portfolio-company basis.

Please turn to page 40. This section describes the strengthening of the organizational foundation.

Please skip a few pages, and you will find our sustainability initiatives on pages 42 and 43. We have developed the Human Rights Policy, established an ESG Investment Policy, and signed the PRI. We are proceeding with the sustainability (governance) checks of our portfolio companies, strengthening and refining them, including their content.

Last but not least, the IR and SR results for the current period are shown. We will continue to further improve stakeholder engagement. That concludes my presentation.

Let us begin by taking questions from those in the audience. Please raise your hand if you have any questions.

Also, what will be the pace of IPOs of portfolio companies in the future? For example, I understand it's difficult to predict the future, but could it be that, over the course of this fiscal year or next, companies that are currently holding back will resume growth and come back to the market after delaying their IPOs? Or, given the change of rules on the TSE side, should we assume that there will be certainly less. That's all I would like to know, thank you.

We define a VC-backed IPO as an IPO in which the VC owns 10% or more of the shares immediately prior to the IPO, excluding buyout investments. They're the bars on the left side. The ones on the right represent JAFCO's investment portfolio.

Indeed, two companies is an extremely low number, and the reality is that there were more in the pipeline at the beginning of the period. As I mentioned earlier about the market environment, the number of IPOs from the Growth Market has decreased. We believe that the trend toward selectivity will continue. However, our

basic investment policy is to aim for what we call business growth. As a benchmark, we select investments with an initial market capitalization of JPY20 billion or more as one of our targets.

In this market environment, I think it comes down to how many of our portfolio companies can achieve IPOs amid this trend toward greater selectivity. I mentioned that we make new investments with 20-30 companies per year as one benchmark, and I think we can calculate that about 20% of these companies will go on to IPO.

We would like to continue to make that many IPOs in the future as well, but in a difficult market environment, some companies will be selective and seek other paths with entrepreneurs, and so-called M&A, rather than IPOs.

In terms of the overall market environment, we have heard from various market participants that the number of IPOs is not expected to increase rapidly. I do not know what the future holds, but I believe it will be so, at least for the current fiscal year. In this context, as I mentioned earlier, I believe that a certain percentage of portfolio companies in VC investments will gradually move toward so-called M&A.

As for the type of company expecting large-scale listings, as you asked earlier, they are more like the type where the IPO has been postponed and the company is still growing. Such companies are not limited to our portfolio companies but exist by a certain proportion in the Japanese market. The question is when such companies will emerge in the market. We believe that the overall number of companies will change if we again enter an environment where investors are willing to invest in so-called IPOs.

First, I would like to discuss the status of the new SVF8 fundraising. The most recent amount is JPY58 billion, but I remember that the application period started at the end of last year, and at that time, the amount was about JPY50 billion. Your goal is about JPY100 billion, and I think there is still time, but please if you could update us on the status of fundraising.

Closings are progressing in a sequential and continuing monthly fashion for those currently considering. However, we have set a JPY100 billion fundraising target, and we expect to continue fundraising through this year. This is my answer to your first question.

the fiscal year ended March 31, 2026, including the large impact on the so-called SaaS category that you just pointed out, have been factored into the calculations.

I think the stock market and other markets will continue to change. Although we will take this into account as necessary, the current fair value growth was largely due to business progress and earnings growth, and so that was our assessment for the current fiscal year.

Document Notes

1. Q stands for question. A stands for answer.

2. This document has been translated by SCRIPTS Asia and partially edited by the Company.