Summary of Accounts for Fiscal Year Ended March 2024 (Japanese GAAP)(Consolidated)
April 24, 2024
Name of listed company:
ES-CON JAPAN Ltd.
Listing exchange:
Tokyo Stock Exchange
Code:
8892
URL:
https://www.es-conjapan.co.jp/english/
Representative:(Name) Takatoshi Ito(Position)
President & Representative Director
Contact for inquiries:(Name) Kenji Fujita(Position)
Director TEL: +81-3-6230-9303
Scheduled date for regular general meeting of shareholders: June 25, 2024
Scheduled date for submission of periodic securities report: June 26, 2024
Scheduled date for start of dividend payment:
June 26, 2024
Supplementary explanatory materials created for accounts? Yes/No: No
Accounts briefing meeting held?
Yes/No: Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)

1.

Consolidated results for fiscal year ended March 2024 (from January 1, 2023 to March 31, 2024)(1)
Consolidated operating results(% figures show the rate of increase (decrease) compared with the same period of the previous year)

Net sales

Operating income

million yen%

million yen

Profit attributable toowners of parent

Ordinary income%

million yen%

Fiscal year ended
118,861
19,074
16,585－－－
March 2024
Fiscal year ended
99,431
25.8
15,49249.2
14,01254.0
Dec. 2022
Note: Comprehensive income
First four quarters of fiscal year ended March 2024: 9,629 million yen [-%]
Fiscal year ended Dec. 2022:
5,399 million yen [-9.6%]
Basic earnings
Diluted earnings
Return on equity Return on assets
per shareper shareyenyenmillion yen%

10,050

－

7,250

21.6

Operating margin

%

%

%

Fiscal year ended
105.44105.23
14.5
March 2024
Fiscal year ended
76.04
75.89
11.3
Dec. 2022
Reference: Share of profit (loss) of entities accounted for using equity method
First four quarters of fiscal year ended Mar. 2024: -219 million yen
Fiscal year ended Dec. 2022
: -16 million yen

5.0

16.0

5.4

15.6

Note: For the fiscal year ended March 2024, irregular results for 15 months have been provided due to a change in thefiscal year. Therefore, increase (decrease) compared with the period is not presented for the fiscal year.
(2)
Consolidated financial position
Total assets
Net assets
Equity ratio
Book value per share
million yen

Fiscal year ended
399,696
March 2024
Fiscal year ended
263,729
Dec. 2022
Reference: Equity
Fiscal year ended March 2024: 72,503 million yen(3)Consolidated cash flow
Cash flows fromoperating activities
Fiscal year ended
March 2024
Fiscal year ended
Dec. 2022

million yen%

yen

70,70218.1

759.5664,14425.0

691.87

Fiscal year ended Dec. 2022: 65,906 million yen

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end of
periodmillion yen

million yen

million yen

million yen(68,892)(32,611)

114,585

48,712

1,501(1,620)2,144

35,604-1-

2.

Dividends
Annual dividend
End of first End of second End of third End of fourthYear-endquarterquarterquarterquarter
yen
yen
yen
yen
yen

Fiscal year ended
Dec. 2022
Fiscal year ended
Mar. 2024
Fiscal year ending
Mar. 2025(Forecast)3.

Total dividend
Dividend
Dividend on
amountpayout ratio
equity(Total)(Consolidated) (Consolidated)yenmillion yen
%
%

Total

－

0.00

－

－

38.00

38.00

3,673

50.0

5.6

－

0.00

－

－

48.00

48.00

4,648

45.5

6.6

－

0.00

－

－

48.00

48.00

45.8

Consolidated earnings forecast for fiscal year ending March 2025 (from April 1, 2024 to March 31, 2025)(% figures show the rate of increase (decrease) compared with the previous fiscal year)
Net sales

Operating income

Ordinary income

Profit attributable to Basic earnings
owners of parent
per share

million yen% million yen% million yen% million yen%
yen
Second quarter
30,000
3,500
2,100
1,400
14.67
－
－
－
－
(cumulative)
Full fiscal year
118,000
18,00015,00010,000104.76－－－－
Notes: 1. Revisions from latest earnings forecast: None
2. As mentioned above, due to the change in the fiscal year-end (the end of the fiscal year), the fiscal year ended
March 2024 is an irregular 15-month accounting period from January 1, 2023 to March 31, 2024. Therefore,
increase (decrease) compared with the previous period is not presented for the fiscal year ended March 2024.
*
Explanatory notes(1) Changes in significant subsidiaries during the first four quarters: None
Newly included:－ (Company name)
Excluded:－ (Company name)(2) Changes in accounting policies, changes in accounting estimates, and restatement
1) Changes in accounting policies due to amendment of accounting standards, etc.: Yes
2) Changes in accounting policies other than 1):
None3) Changes in accounting estimates:
None4) Restatement:
None(3) Number of shares issued and outstanding (common shares)
1) Number of shares issued andFiscal year
98,580,887 Fiscal year
98,580,887
outstanding (including treasury
ended Mar. 2024
shares ended Dec. 2022
sharesshares) at end of fiscal year
2) Number of treasury shares at end of Fiscal year
3,125,950 Fiscal year
3,322,800
periodended Mar. 2024
shares ended Dec. 2022
shares3) Average number of shares during
Fiscal year
95,319,986 Fiscal year ended
95,356,315
periodended Mar. 2024
shares Dec. 2022
shares(Note) The number of treasury shares at end of period includes shares of ES-CON JAPAN held in a board benefit
trust for executives and a share-based payment benefits-type ESOP trust (fiscal year ended March 2024:
851,000 shares in the board benefit trust for executives and 542,000 shares in the share-based payment
benefits-type ESOP trust). In the calculation of the average number of shares during the fiscal year, thetreasury shares to be subtracted in that calculation includes ES-CON JAPAN shares held in the sharebased payment benefits trust for directors and the share-based payment benefits-type ESOP trust (fiscal
year ended March 2024: 1,398,306 shares).
(Reference) Non-consolidated results
1. Non-consolidated results for fiscal year ended March 2024 (from January 1, 2023 to March 31, 2024)(1) Non-consolidated operating results(% figures show the rate of increase (decrease) compared with the previous fiscal year)
Operating
Ordinary
Net sales
ProfitincomeincomeFiscal year ended
Mar. 2024
Fiscal year ended
Dec. 2022

million yen%

million yen%

million yen%

million yen%

104,757－

16,280－14,817

－

8,409

－

89,99922.6

13,85435.7

13,068

40.3

7,100

10.4

-2-

Basic earnings per share

Diluted earnings per share
yen

yen

Fiscal year ended
88.22
88.05
Mar. 2024
Fiscal year ended
74.47
74.33
Dec. 2022(Note) For the fiscal year ended March 2024, irregular results for 15 months have been provided due to a change in thefiscal year. Therefore, increase (decrease) compared with the period is not presented for the fiscal year.
(2)

Non-consolidated financial position
Total assets
million yen

Net assets
million yen

Equity ratio

Book value per share%

yen

Fiscal year ended
372,51771,05219.1
744.35Mar. 2024
Fiscal year ended
245,466
66,13526.9
694.27
Dec. 2022
Reference: Equity
Fiscal year ended Mar. 2024: 71,051 million yen
Fiscal year ended Dec. 2022: 66,134 million yen*

This summary of accounts is not subject to review of certified public accountant or audit corporation.

*

Explanation regarding appropriate use of earnings forecasts, and other notes
The earnings outlook and other forward-looking statements contained in this document are based on information
currently available to and certain assumptions that are thought to be reasonable by ES-CON JAPAN. Accordingly,
actualbusiness performance and other results may differ materially due to various reasons. For the conditions forming theassumptions on which earnings forecasts are based and explanatory notes for use of earnings forecasts, etc., pleasesee “Attachment 1; 1. Overview of Operating Results, Etc.; (1) Analysis of Operating Results” on page 2.

-3-

○ Contents of Attachment
1. Summary of Operating Results, Etc.
(1) Analysis of Operating Results(2) Analysis of Financial Position(3) Basic Policy on Distribution of Profit, and Dividend for the Fiscal Year Under Review and Next Fiscal Year
(4) Business Risks
2. Management Policy(1) Basic Policy on Corporate Management(2) Medium- to Long-Term Corporate Management Strategy and Management Indicator Targets(3) Stable Business Growth in Accordance with Each Segment(4) Business and Financial Issues to Be Addressed on a Priority Basis
3. Basic Policy on Selection of Accounting Standard
4. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Consolidated Statement of Comprehensive Income)(3) Consolidated Statement of Changes in Equity(4) Consolidated Statement of Cash Flows(5) Notes to Consolidated Financial Statements(Notes on Going Concern Assumption)(Changes in Accounting Policies)(Additional Information)(Segment Information, Etc.)
5．Other(1) Status of Contracts and Sales

-4-

6
6
20
20
21
19
19
19
20
20
22
23
23
25
25
26
27
29
31
31
31
31
32
35
35

1.

Summary of Operating Results, Etc.
(1) Analysis of Operating Results
For the fiscal year ended March 2024, irregular results for 15 months have been provided due to a change in thefiscal year. Therefore, increase (decrease) compared with the period is not presented for the fiscal year.
In the fiscal year under review (fiscal year ended March 2024), the Japanese economy continued to see amoderate recovery trend in business conditions centered on domestic demand such as signs of recovery in consumer
spending and the employment environment as the normalization of domestic economic activities and the recovery of
inbound demand have progressed. On the other hand, various factors continue to exert downward pressure on themarket, including rising prices, the ongoing depreciation of the yen, and monetary tightening. Looking overseas, thedeceleration in the Chinese economy, the situation in the Middle East and other geopolitical risks continue to threaten
downward pressure.
In the real estate industry in which the ES-CON JAPAN Group operates, there are concerns over rising
construction costs due to spiking land acquisition prices and raw material costs, as well as cost increases such as
surging personnel expenses caused by personnel shortages. Conditions meriting close monitoring of the impact ofthese on the market are persisting.
While the business environment remains difficult to predict, based on the basic policy of “Transformation and Rapid
Progress” under our fourth medium-term management plan “IDEAL to REAL 2023” (for the three years from the fiscal
year ended December 2021 to the fiscal year ended March 2024), we established firm management foundations
capable of withstanding any economic environment and sought to assure sustainable growth by maximizing corporate
value. In general, our operating results for the fiscal year under review, the final year of our fourth medium-term
management plan, reflected steady progress in condominium sales, which account for our leading business. ES-CON
JAPAN achieved net sales of 118.861 million yen (0.9% increase versus initial plan), operating income of 19,074
million yen (6.0% increase versus initial plan) and ordinary income of 16,585 million yen (7.0% increase versus initialplan), with profit attributable to owners of parent coming to 10,050 million yen (0.5% increase versus initial plan), ourhighest profit on record.
1)

Status of Achievement of Fourth Medium-Term Management Plan “IDEAL to REAL 2023”(a) Business Performance Plan
(Unit: million yen)
Fiscal year
ended Dec.
2021

Fiscal year
ended Dec.
2022

ActualActualFiscal year ended Mar. 2024

Net sales

79,01799,431

118,861

Revised plan
(15 months)
120,000

Operating income

10,381

15,492

19,07418,000

ActualIncrease/decrease (%)(1,139)(0.9%)

Change

1,074

6.0%

(b) Management Targets
Fiscal year
ended
Dec. 2021

Fiscal year
ended
Dec. 2022

ActualActualFiscal year end of Mar. 2024
ActualRevised plan
(15 months)

ChangeShare of profits fromleasing*1

21.2%

21.5%

27.1%

28.0%

(0.9%)

ROE

11.8%

11.3%

14.5%

15.0%

(0.5%)

ROIC*2

3.2%

4.6%

3.6%

4.0%

(0.4%)

Equity ratio

24.8%

25.0%

18.1%

20.0%

(1.9%)

Share of long-term
earnings from real estate*3

20.6%

19.5%

18.6%

21.0%

(2.4%)

62.6 billion yen

64.1 billion yen

70.7 billion yen

71.0 billion yen

200 million yen

Net assets
Notes: 1.
2.
3.

Share of profits for leasing: Leasing segment profits / Total segment profits (excluding adjustments)
ROIC: Net operating income after taxes / (the sum of shareholders’ equity + interest-bearing
liabilities)
Share of long-term earnings from real estate: Real estate generating leasing revenues recorded as
non-current assets / Total assets-5-(c) Investment Plan
(Unit: million yen)
Fiscal year
ended
Dec. 2021

Fiscal year
ended
Dec. 2022

ActualActualInvestment inrevenuegenerating realestateInvestment inotherdevelopment
Gross
investment
2)

Three-year cumulative
total

Fiscal year ended Mar. 2024
ActualRevised plan
(15 months)

ChangeActualRevised plan
(15 months)

767

108

609

665

(56)

1,484

1,540

191

261

577

308

269

1,029

760

959

369

1,186

972

214

2,514

2,300

Establishment of Long-Term Vision 2030 and Fifth Medium-Term Management Plan
In March 2024, ES-CON announced its Long-Term Vision 2023, which lays out what kind of company it wants tobe by FY2030 and the direction it is aiming for, and its Fifth Medium-Term Management Plan (fiscal year ended
March 2024 to fiscal year ending March 2027), which constitutes Phase I toward the realization of the Long-Term
Vision 2030, as guidelines and strategies for continuing sustained long-term growth.

(a) Long-Term Vision 2023
• Direction aimed for “Deepening” and “Evolution”
Creating a virtuous cycle of sustainable growth based on the dual focuses of business strategy andsustainability management while striving to strengthen true corporate value in aspects that transcend financial
indicators alone• FY2030 Indicators Ordinary income of 300.0 billion yen/real estate assets*1 of 1 trillion yen
Real estate assets: Owned assets + AUM from funds arranged by ESCON JAPAN REIT Investment
Corporation and FUEL Inc., etc.
(b) Fifth Medium-Term Management Plan
• Financial Results Plan
In the year ended March 2025, ES-CON JAPAN anticipates sales and profits at levels equivalent to this year
(fiscal year ending March 2024). Thereafter, we expect stable growth in sales and profits.
Fiscal year
endingMar. 2024

Fiscal year
endingMar. 2025

Fiscal year
endingMar. 2026(Unit: million yen)
Fiscal year
endingMar. 2027

Actual

Plan

Plan

Plan

Net sales

1,188

1,180

1,330

1,570

Operating income

190

180

200

220

-6-

•

Investment plan
ES-CON JAPAN is planning three-year cumulative investment during the period of the fifth Medium-Term Plan
to be 250.0 billion yen. Investment proceeded at a higher level than expected in the Fourth Medium-Term
Management Plan, so the level is equivalent to the projected figure for that plan.
(Unit: million yen)
Fourth Medium-term Management Plan

Fifth Medium-term Management Plan

Fiscal year Fiscal year Fiscal year
Fiscal year Fiscal year Fiscal year
Three-year
Three-year
ended
ended
ended
endingendingendingcumulative
cumulative
Dec. 2021 Dec. 2022 Mar. 2024
Mar. 2025 Mar. 2026 Mar. 2027
total
total
ActualActualActualA

Gross investment total

976

375

1,249

2,600

610

Condominium
development
Revenuegenerating property
development
Acquisition ofrevenue-generating
properties inoperation
Overseas
investment

192

176

276

644

57

122

408

711

71

7

Other
Recoupment
Amount recoupedfrom revenuegenerating
properties
Net investment

•

A+B

Plan

B

770

1,120

2,500

5,100

200

200

250

650

1,294

587

200

300

500

1,000

1,587

500

1,283

150

200

300

650

1,933

4

55

66

50

60

60

170

236

9

2

10

21

10

10

10

30

51

48

65

164

277

284

308

417

1,009

1,286

34

42

23

99

121

142

242

505

604

928

310

1,085

2,323

326

462

703

1,491

3,814

Plan

Plan

Management indicators
Management will pursue both maintenance/improvement of safety through building up stock revenue andmaintenance of high capital efficiency.
With regard to management that is aware of capital costs and the stock price, ES-CON JAPAN will realize profit
growth that meets the expectations of stakeholders, and, as a concrete indicator, it will promote managementthat is aware of raising ROE above shareholder equity costs and ROIC above WACC.
Fiscal year
ended
Mar. 2024

Fiscal year
endingMar. 2025

Fiscal year
endingMar. 2026

Fiscal year
endingMar. 2027

Actual

Plan

Plan

Plan

ROE

14.5%

13.4%

13.9%

14.0%

ROIC*1

4.5%

3.4%

3.5%

3.6%

Stock earnings ratio*2, 3

25.0%

30.4%

28.2%

30.0%

Stock earnings / general andadministrative expense
coverage ratio (cash basis)*4

112.0%

119.0%

114.2%

116.8%

Equity ratio

18.1%

17.5%

17.6%

17.5%

(Notes) 1. ROIC: (consolidated ordinary income + interest expenses – interest income – income taxes) /(interest bearing debt + net assets averages at end of term)
2. Stock earnings: Real estate leasing segment profit + asset management segment profit
3. Stock earnings ratio: Stock earnings / total segment profit
4. Stock earnings / general and administrative expenses coverage ratio: (stock earnings + real estateleasing segment depreciation + real estate leasing segment goodwill amortization) / (general andadministrative expenses – general and administrative expense depreciation – overall goodwill
amortization)

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•

Dividend policy
ES-CON JAPAN’s progressive dividend policy deployed in November 2016 as its dividend policy (the dividend
per share must not be lower than the dividend per share of the previous fiscal year (DPS), and in principle ESCON JAPAN Ltd. will only maintain or increase the dividend, not decrease it), it will be continued on in the Fifth
Medium-Term Management Plan as well.
For the fiscal year ended March 2024, the year-end dividend forecast is 48 yen per share.

3)

Revision of Management Philosophy System
In order to continue growing sustainably over the long term in any environment, we revised the management
philosophy system, which serves as the “foundation” for all executives and employees of the group in corporate
activities, in November 2023. The new management philosophy system consists of three components: “Purpose,”“Vision” and “Principles of Action,” and we will continue to set “IDEAL to REAL” for “Purpose,” which indicates thesignificance of ES-CON JAPAN Group’s existence in society. While maintaining the main purpose of the
management philosophy system until now and inheriting its spirit, the entire group will work together under the
new management philosophy system to continue contributing to society and ensure future sustainable growth.

4)

Status of Demonstration of Synergy Effect with the Chubu Electric Power Group
ES-CON JAPAN is currently engaged in its fifth project, the development of TSUNAGU GARDEN SENRIFUJISHIRODAI (Fujishirodai, Suita City, Osaka Prefecture), as a joint project with Chuden Real Estate Co., Inc.
(hereinafter “Chuden Real Estate”), a wholly owned subsidiary of Chubu Electric Power. The project is the firstmixed-use development project jointly conducted with Chuden Real Estate Co., Inc. and will establish a “newmulti-generational urban district” through the integrated development of collective housing, detached dwellings, aclinic mall, an authorized daycare center, commercial facilities, and a park on 20,000 tsubo of land. The name ofthe project is imbued with the message of connecting nature, multiple generations, lifestyles, the environment,
safety, and security, based on the concept of “a future life of continued connection.” Of the entire block, thecommercial district opened on November 7, 2023. In the residential district, we have commenced the sale of thecondominium “Le JADE City Senri Fujishirodai (244 units in total)” in October 2023.
In addition, all units of “SEVENS VILLA Karuizawa (7 units in total),” a condominium that was developed jointlywith Chuden Real Estate in Karuizawa, Nagano Prefecture, were sold out in October 2023 as a result of productplanning utilizing the characteristic of a rare location surrounded by lush nature.
Two projects are currently underway as joint projects with Chubu Electric Power. In August 2022, a consortiumof businesses led by Chubu Electric Power, of which ES-CON Japan is a member, entered into a basic planningagreement for the development project at the former site of Nagoya Horse Racing Track. In addition, weestablished TSUNAGU Community Farm LLC with Chubu Electric Power and Spread Co., Ltd. We also
constructed Techno Farm Fukuroi, which will be the world’s largest vertical farm utilizing fully artificial light andcapable of producing 10 tons of lettuce per day. This farm made its first shipment in February 2024.
We will continue to strengthen our partnership with the Chubu Electric Power Group and actively work toachieve large-scale urban development and realize a “new form of community.”

5)

Progress of Projects in Hokkaido
ES CON FIELD HOKKAIDO, with which ES-CON JAPAN has concluded a naming rights agreement, the new
Hokkaido Nippon Ham Fighters stadium in Kitahiroshima City, Hokkaido, opened in March 2023. ES-CON JAPAN
has participated in the urban development concept of HOKKAIDO BALLPARK F VILLAGE (total developmentarea: approx. 36.7 ha; hereinafter “F VILLAGE”) centered on the new stadium, and the condominium “Le JADE
Hokkaido Ballpark” (118 units in total) situated in a rare location approximately 80 meters in a straight line from thestadium was sold out thanks to its popularity. Furthermore, MASTERS VARUS HOKKAIDO BALLPARK was
decided as the name of the residence for active seniors with a medical mall being developed in the southeast
corner of F VILLAGE. Moreover, informal agreements with six tenants for the medical mall F VILLAGE MEDICALSQUARE have been reached. Tenants are scheduled to begin taking occupancy in June 2024. In November
2023, we acquired a project site on land facing the outfield seats of the new stadium across an aisle. The decision
has been made to invite a brand hotel under the “Banyan Group,” a leading independent hospitality group basedin Singapore, to the site. In order to capture demand from people visiting F VILLAGE and tourists into Hokkaido,
we plan to develop hotels by taking full advantage of the locational environment.

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In addition, we are advancing development of the JR Kitahiroshima Station “Train Station West Exit Area
Revitalization Project” in Kitahiroshima City as a partner of the project. The train station is garnering further
attention as an important point of access to F VILLAGE. Continuing from November 2021, we acquired part of thedevelopment site for the project in March 2023. We are in the process of developing a station square in front of JR
Kitahiroshima Station, an exchange center complex comprising commercial facilities and a hotel, a threedimensional indoor/outdoor plaza and park, and residential exchange facilities. Within this development project, it
was decided that the commercial facilities and hotel would have 14 floors above ground, and the commercial
facilities on the first to third floors would be named “tonarie Kitahiroshima.” “tonarie Kitahiroshima” is scheduled toopen in March 2025 and will provide locally produced foodstuffs and products, restaurants for enjoying the flavorof regional ingredients, and entertainment offered in the city based on the concept of KITAHIRO “The GOOD”
BASE, with the aim of being a facility for enjoying “Kitahiroshima” with stores and spaces in all areas of “food,living, entertainment, beauty and healthcare.” It is the eleventh facility in our commercial facility brand “tonarie”
series.
Sales are scheduled to commence in May 2024 for Le Jade Hokkaido Kitahiroshima (Kitahiroshima City,
Hokkaido; 197 units), developed on a location linking Kitahiroshima Station and tonarie Kitahiroshima via apedestrian deck.
We have sold all units in Le JADE Sapporo Motomachi (Higashi Ward, Sapporo City; 39 units) and “Le JADE
Sapporo Naebo (Higashi Ward, Sapporo City; 42 units in total)” and have also been making steady progress withprojects in Hokkaido since last year, such as the acquisition of a project site of a logistics facility in Chitose Cityand project sites of a hotel, an office and a condominium in Sapporo City.
We will continue to cooperate in the promotion of sports and culture and contribute to the revitalization anddevelopment of the entire Hokkaido region for the happiness of its residents.
6)

Establishment of a new company “ES-CON Sports & Entertainment Ltd.”
ES-CON JAPAN established “ES-CON Sports & Entertainment Ltd.” (hereinafter the “new company”), a newcompany aiming to conduct real estate development specializing in entertainment including sports as well as
participate in and support urban development projects centered on domestic stadiums and arenas, on December
1, 2023, together with Fighters Sports & Entertainment Co., Ltd. and DeNA Co., Ltd. The new company willproceed to engage in the consideration and progress of urban development incorporating elements ofentertainment, including sports (real estate development and regional development). In March 2024, it entered analliance with EY Strategy and Consulting Co., Ltd. to deploy a sustainable urban development and regional
revitalization model incorporating stadiums, arenas, and entertainment. The new company will be engaged not
only in future businesses within HOKKAIDO BALLPARK F VILLAGE but also in urban development support andconsulting centered on stadiums and arenas throughout Japan.

7)

Initiatives Aimed at Regional and Area Revitalization through Real Estate Development
Since February 2022, we have also conducted redevelopment to create a bustling atmosphere around the station
through the “Namiki no Mori City” development project, a mixed-use facility of residential, commercial and parking
lot buildings in Iwaki City, Fukushima Prefecture, together with the Iwaki Station Namiki-dori District Urban
Redevelopment Association and Hoosiers Corporation. For the residential building, we commenced unit sales for
MID TOWER IWAKI (Iwaki City, Fukushima Prefecture; 216 units in total), the tallest barrier-free seismic isolation
structure tower condominium in the city.
For a development project sited near Shin-Omura Station on the Nishi-Kyushu Shinkansen line in Omura City,
Nagasaki Prefecture, we are undertaking a joint project together with Daiwa House Industry Co., Ltd. and Izumi
Co., Ltd. SAKURA MIRAI SHIN OMURA was decided as the name of the project, and with the opening of thestation in September 2022, the project entails developing condominiums, commercial facilities, etc. whereresidents and visitors from outside the city can interact with each other in line with the town development policy of
Omura City. ES-CON JAPAN is engaged in the development of two condominiums called “Le JADE SHINOMURA STATION FRONT (119 units in total)” and “Le JADE SHIN-OMURA PARK SIDE (72 units in total)” in two
blocks, and both will have an appearance aimed at harmony with the rich nature of the surrounding area byadopting an organic design reminiscent of trees changing direction as they grow upward rather than having a
structure of floors and walls that are only horizontal and vertical.

-9-In February 2023, we redesigned “tonarie Utsunomiya (Utsunomiya City, Tochigi Prefecture)” into a facility thatcan contribute to further revitalization of the region. In March 2023, “tonarie Hoshida (Katano City, Osaka
Prefecture),” a community-based shopping center, opened in the area of the “Hoshida Station North Land
Readjustment Project” (total area: approximately 26.4 ha). This is the tenth location in the tonarie series.
8)

Promotion of Development of Various Condominiums in Rare Locations
We are not only expanding the number of units but also providing a diverse range centered on product plans thatdraw out the full value of sites purchased.
In January 2023, we acquired a project site in Karuizawa-machi, Kitasaku-gun, Nagano Prefecture. In the
Karuizawa area, Ost Residence Karuizawa (33 units in total, sold out in 2021) won the Good Design Award for the
fiscal year 2022 for recognition of its high-quality product planning. Furthermore, as mentioned above, “SEVENSVILLA Karuizawa (7 units in total),” which is a joint project with Chuden Real Estate, has realized a spacious andluxurious living space where only seven residences with an area of more than 100 m2 stand on a development
site of more than approximately 5,000 m2, and all units have been delivered and sold out.
We have acquired two project sites in Hayama Town, Miura District, Kanagawa Prefecture, and are working todevelop condominiums that fully utilize the abundant natural environment, such as Morito Beach. We are also
promoting high-value-added product planning, such as early selling out ahead of schedule in December 2022 of“Le JADE Cross Chiyoda Jimbocho (50 units in total; completed in September 2023),” a new condominium forsale with fixed-term land lease rights currently under development in a site adjacent to the “Toho Gakkai Main
Building,” a historic building designated as an important building for the scenic development of Chiyoda Ward,
Tokyo.

9)

Implementation of Strategic M&As
Following the Picasso Group in October 2021, ES-CON JAPAN converted Shijo-Omiya Building, which is involved
in real estate leasing and other businesses, into a subsidiary in July 2023.
The company was founded in 2010 in Kyoto City and has developed its real estate leasing business mainly inthe city, owning a number of prime revenue-generating assets, such as rental condominiums and commercial
facilities.
We will continue to actively pursue strategic M&A projects to enhance the Group’s businesses and expand its
domain.

10) Taking on the Challenges of New Business Domains
Our first self-developed office building in the Tokyo metropolitan area, ESCON Kudan Kita Building (completed in
November 2022) received the 2023 Good Design Award for providing a new form of office building aimed to be an“experience-based office” that could not be achieved anywhere else due to fully utilizing the view.
In September 2023, we opened “tonarie medical Himeji Yumesakigawa,” our first clinic mall development
project, in Himeji City, Hyogo Prefecture. It is a clinic mall that is more accessible to the local community, which isa new initiative.
Regarding our overseas business, to commence sales of luxury condominiums in Honolulu, Hawaii and toaccompany marketing under our “ALIA” project in November 2023, we opened a sales gallery at our Tokyo
headquarters. Through a subsidiary, we made a capital investment in “888 ALIA LLC,” an SPC formed as a fund
for that project. Going forward, we will continue to focus on expanding our businesses overseas.
In January 2024, we made the decision to develop “SUIDEN RESORT” (tentative name), a series of hotels
based on the concept of “agriculture,” across Japan with LOCAL RESORTS Inc. (formerly YAMAGATA DESIGNRESORTS Inc.; hereinafter “LOCAL RESORTS”), a subsidiary of urban developer SHONAI Inc. (formerly
YAMAGATA DESIGN Inc.) that transforms challenges in regional cities into hope in partnerships with
NEWGREEN INC. (formerly YUKIMAI DESIGN INC.; hereinafter “NEWGREEN”). To prepare for project
implementation, we entered into a business alliance agreement with LOCAL RESORTS and made a capital
investment of 200 million yen in NEWGREEN.
In February 2023, we entered into a capital and business alliance agreement with STYLY, INC., which operates
the “STYLY” XR platform that collectively denotes VR (Virtual Reality), AR (Augmented Reality) and MR (Mixed
Reality). By working with this company, we will proceed to examine other efforts, including providing new valueadded utilizing XR in dormant spaces at commercial facilities owned and operated by the Group and thedevelopment of cooperative businesses incorporating XR in consulting for stadiums and arenas. Additionally, on- 10 -

April 9, 2024, to complement the five major city areas currently hosting our head offices and branches, we opened
an Okinawa Branch to promote full-fledged business development in Okinawa.
We will continue to focus on initiatives in new business fields with a view to the next era and implement a
multifaceted real estate business.
11) Declaration of Support for TCFD Recommendations and Disclosures
Based on the goal of achieving a carbon-neutral society by 2050, we are seeking to create new value for theenvironment through next-generation urban development and related efforts.
As a key management strategy to address climate change, we have selected members from management andeach department to create the ESG Promotion Group, which has worked on disclosing information based on theframework of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations calling foranalyzing risks and opportunities presented by climate change and promoting disclosure on them. The ES-CON
JAPAN Group declared its support for the TCFD recommendations in June 2022.
Please visit our website (https://www.es-conjapan.co.jp/english/about_us/environment.php) for details of
disclosures based on the TCFD recommendations (governance, strategies, risk management, indicators andtargets on climate change risks and opportunities).
12) Status of ESG Initiatives
One of our key management strategies is addressing social issues through ESG promotion. Centered on the“ESG Promotion Group” and the “Health & Culture Fostering Team” designed to promote healthy management
further, we will promote company-wide efforts and focus on enhancing essential company value that cannot bemeasured by financial information alone.
The contents of the most recent major initiatives are as follows.
(a) Environment (E)• Acquisition of Various Certifications
ES-CON JAPAN acquired EcoAction 21 Certification, a Japanese environmental management system (EMS)
established by the Ministry of the Environment. Furthermore, “tonarie Fujimino,” a commercial facility owned by
ES-CON JAPAN, obtained “Rank S,” the highest rank of the Certification for CASBEE(*1) for Real Estate froma CASBEE accreditation body authorized by the Institute for Building Environment and Energy Conservation.
Also, “tonarie Yamato-Takada,” “tonarie Toga-Mikita,” “tonarie Minamisenri,” “tonarie Seiwadai,” and“Asumigaoka Brand New Mall,” which are commercial facilities owned by ESCON JAPAN REIT Investment
Corporation (hereinafter “EJR”), obtained DBJ Green Building Certification from Development Bank of Japan
Inc. Our group as a whole is working to improve the value of the facilities, and the above six properties arebeing operated and managed by our subsidiary ES-CON PROPERTY Ltd.
*1•

CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a system to comprehensively assess the qualityof a building, which evaluates and ranks the environmental performance of the building by taking into account not only
environmental considerations such as energy savings and use of environmentally friendly materials but also comfort in the building
and its visual impact on the area.

Continuous and Proactive Development of Environmentally Friendly ZEH-compatible Housing
We acquired “ZEH(*2)-M Oriented” certification, indicating properties that feature excellent heat insulation
performance and help reduce annual primary energy consumption, starting with “Le JADE Okurayama”(Kohoku Ward, Yokohama City; 25 units in total),” which won the Good Design Award for the fiscal year 2021,
and subsequently “Le JADE Yao Sakuragaoka (Yao City, Osaka Prefecture; 72 units in total),” “Le JADE
Honkawagoe Koedo Terrace (Kawagoe City, Saitama Prefecture; 102 units in total),” “Le JADE KANAYAMAGRANDE (Naka Ward, Nagoya City; 87 units in total)” and “Le JADE Nagoya (Nakamura Ward, Nagoya City;
125 units in total)”. Additionally, we are currently applying for ZEH certification for “Le JADE Bishoen Ekimae(Higashisumiyoshi Ward, Osaka City; 35 units in total),” sales for which began in February 2024.
We will continue to make the most of the development know-how of a general developer and proactively
work on the development of environmentally friendly ZEH condominiums that are appreciated by ourcustomers.
*2

ZEH (Net Zero Energy House) is a house aiming to make the annual primary energy consumption zero by introducing renewableenergy after realizing significant conservation of energy while maintaining the quality of the indoor environment with significant
improvement in the thermal insulation performance of the outer building skin as well as the introduction of a highly efficientequipment system.

- 11 -

••Construction and Operation of “Techno Farm Fukuroi,” a Vertical Farm Utilizing Fully Artificial LightAs previously mentioned, we developed Techno Farm Fukuroi, which will be the world’s largest vertical farmutilizing fully artificial light and capable of producing 10 tons of lettuce per day. The facility commenced
shipments in February 2024. The three companies including ES-CON JAPAN will solve issues in food andagricultural fields through the plant factory business while also contributing to the realization of a sustainable
and livable society and the achievement of SDGs by making efforts towards decarbonization such as theproactive use of green energy and effective use of CO2 in the process of cultivation.
Efforts to Promote the Use of Wood in the Development Project of the Former Site of Nagoya Horse Racing
Track.
The Consortium has entered into the “Agreement on the Promotion of the Utilization of Wood in Public
Buildings” with Aichi Prefecture. We will make efforts to contribute to decarbonization through the project, suchas active utilization of wood produced in Aichi Prefecture.

(b) Social (S)• Formulating General Employer Action Plans
ES-CON JAPAN has formulated and published general employer action plans (action period: January 1, 2023
to March 31, 2025) in accordance with the Act on Advancement of Measures to Support Raising NextGeneration Children and the Act on the Promotion of Women’s Active Engagement in Professional Life in order

•

•

•

•

•

•

to help employees juggle their career and family and create a workplace where human resources, including
women, can continue to be in employment and succeed.
Received Certification as an “Excellent Health Management Corporation 2024”
We are promoting health management, believing that the health of our employees is the cornerstone of ourbusiness activities and an essential element for our sustainable growth. ES-CON JAPAN was certified an
Excellent Health Management Corporation once again in 2024 after certification in 2023. This recognizes
efforts to promote and enhance employee health, improve work comfort, and address diversity.
Development of SUIDEN RESORT (Tentative Name) Hotels Based on the Concept of Agriculture
As stated under 10), we will link our knowhow together with that of the SHONAI Group to develop “SUIDENRESORT” (tentative name) hotels across Japan. We will proceed to refine, safeguard and nurture locally
produced, locally consumed foodstuffs, and other local tourism resources and, based on the pillars of tourism
and agriculture, engage in vibrant urban development that includes promoting visitor footfall to those localities,
agricultural support, and the creation of new employment.
Support for Kitahiroshima City, Hokkaido Prefecture, by Utilizing “Corporate Version of Hometown Tax”
ES-CON JAPAN donated 300 million yen to Kitahiroshima City, Hokkaido Prefecture in both 2022 and 2023 by
utilizing the “Corporate Version of Hometown Tax” under the hope that further progress in urban development
and its spread to various fields such as transportation, tourism, sports and education, etc. will contribute to thefurther development of the city. The funds will be utilized to maintain a vibrant city into the future.
Contributing to Healthcare
We have been donating annually to the Kyoto University “iPS Cell Research Fund” to support activities
realizing provision of early and inexpensive treatment using iPS cells for people suffering from diseases andinjuries.
In 2022 and 2023, we co-sponsored the Osaka Great Santa Run 2022 charity running event (hosted by theGreat Santa Organization in Osaka Akaru Club). The event is designed to give a part of participation fees tochildren who are battling disease as presents.
Contribution to Sports Promotion
In April 2021, we invested in Ryukyu Football Club Co., Ltd., which operates FC Ryukyu, a professional soccer
team. With this investment, we will contribute to the local community through sports promotion by securing afoothold for the creation of business opportunities in Okinawa while at the same time supporting FC Ryukyu’s
regional revitalization activities deeply rooted in Okinawa Prefecture. Additionally, as mentioned above, we
opened an Okinawa Branch on April 9, 2024.
Human Resources Development
To achieve sustainable growth, recognizing the further enhancement of organizational power, human capital—
that is, our employees or their knowledge, skills, talents, and the like— is our top priority, we have established a
Human Resources Strategy Department in the Corporate Planning Division and formulated the “Basic Policy
for Human Resources Development (Basic Human Resources Requirements)” as guidelines to accelerate“human resources development and employee growth.” We have formulated a human resources development- 12 -

program to ensure that all employees understand and adhere to these guidelines and launched the program in
the fiscal year ended March 2024. In addition, in order to cope with the impact of recent high prices and to•maintain and improve employee engagement, as well as to secure talented human resources, ES-CON JAPANhas raised the base wages of Group employees by an average of 7.7% effective April 2023, and plans to do
the same by an average of ●% in May 2024 also.
Initiatives Related to Respect of Human Rights
Based on increasing global calls for corporate initiatives related to human rights, we are addressing humanrights of all individuals involved in our business activities.
The Chubu Electric Power Group Basic Human Rights Policy (July 2023) set forth by the Chubu ElectricPower Group declares our support and respect for international norms on human rights and the UN Guiding
Principles on Business and Human Rights. As a member of the Chubu Electric Power Group, we will steadily
promote human rights initiatives, including the ongoing implementation of human rights due diligence, amechanism for identifying and assessing negative impacts our business activities may have on human rights,
preventing or mitigating the risks of such impacts, and administering education and training for employees.

(c) Governance (G)• Establishment of Voluntary Committee on Nomination and Remuneration of Directors
We established the “Nomination and Remuneration Advisory Committee” for the purpose of strengthening the

•

•

•

independence and objectivity of functions as well as the accountability of the Board of Directors with regard tonomination and remuneration of directors and other matters. Effective March 2023, three of the four committee
members have been replaced by independent outside directors from the Board of Directors, who are membersof the Audit and Supervisory Committee. In addition to ensuring fairness and transparency in the selection of
directors and their compensation, ES-CON JAPAN strives to improve corporate governance by clarifying theright of Audit and Supervisory Committee members to express their opinions concerning director election andremuneration.
Nurturing Successors
We also launched initiatives for a succession plan called the candidate successor system. We appointed a totalof seven employed executive officers in April 2024.
Diversity of the Board of Directors
At the 28th Annual General Meeting of Shareholders held in March 2023, one outside director and one director
who is a member of the Audit and Supervisory Committee were newly elected, bringing the Board of Directors
to a total of 10 members: three executive directors, three outside directors, and four directors who are also
members of the Audit and Supervisory Committee. By appointing five independent directors (including one
woman), which is half of the Board of Directors, ES-CON JAPAN has expanded the diversity of the Board of
Directors and created a more effective governance structure.
Promotion of Compliance Management
In October 2022, ES-CON JAPAN newly established the Compliance Office directly under the President inorder to strengthen legal compliance and internal control systems.
In March 2023, we also reviewed our Compliance Code of Conduct and issued a compliance declaration.
Through these efforts, we will thoroughly strengthen the promotion of compliance management throughout theCompany and the Group.

(d) Other
We have been participating in the Global ESG Benchmark for Real Assets (GRESB), which is an annual
benchmark assessment measuring ESG consideration in the real estate sector, every year since 2018 with an
aim to continuously improve the assessment results. In October 2023, we acquired “2 Stars” in the GRESB
Rating, a five-grade evaluation system that reflects the applicant’s relative evaluation based on the overall score,for efforts on environmental consideration and sustainability in the “Development Benchmark” (reporting period:
January 1, 2022 to December 31, 2022). In addition, we acquired the “Green Star”(*3) rating for the fifth
consecutive year.
*3

The “Green Star” in the “Development Benchmark” is awarded to participants who score 50% or higher in the absolute assessment
based on the two main points, “Management Component” and “Development Component.”- 13 -

13) Current Status of ES-CON ASSET MANAGEMENT Ltd.
On July 15, 2022, the commissioner of the Financial Services Agency implemented an administrative disposition,
which consists of injunctions to suspend business operations and institute improved practices targeting ourconsolidated subsidiary ES-CON ASSET MANAGEMENT Ltd. (hereinafter “EAM”). In response, EAM formulated
a business improvement report, which was submitted to and accepted by the commissioner of the Financial
Services Agency on August 15, 2022, completing all responses to the Financial Services Agency. ES-CON
JAPAN, the parent company of EAM and main sponsor of ESCON JAPAN REIT Investment Corporation (“EJR”),
for which EAM is entrusted with asset management, took this administrative disposition on EAM with utmost
seriousness and recognized the prevention of recurrence as a priority issue for our group as a whole. In order tobuild a system for managing conflicts of interest as mentioned above, we established the Compliance Office.
Furthermore, EAM has steadily proceeded with organizational and business reforms such as reviewing its
management structure, including a change of representative and the termination of its concurrent position with
ES-CON JAPAN in January 2023, and abolishing certain operations (type II financial instruments business,investment advisory and agency business, etc.) in June 2023. Furthermore, in the change of EJR’s “Operational
Guidelines” announced in September 2023, based on the belief that needs are stable for living in large cities withhigh living convenience and surrounding regions with easy access to large cities, an effort will be made to achieve
steady growth of investment assets and maximize investor value by newly investing in housing and investing inassets that contribute to the realization of a sustainable society (initiatives leading to the resolution of a wide
range of social issues in living faced by local communities), or investing in “life-based assets” mainly located in thefive major urban areas, in addition to investment in commercial facilities and land with leasehold interest as in thepast. We will maintain our advanced compliance stance while seeking long-term stability and growth of EJR’s
earnings.
14) Business Development by Segment
In the real estate sales business, our core business, we are selling revenue-generating real estate and otherproperties, in addition to achieving steady progress in condominium sales.
In the condominium sales business, ES-CON JAPAN has commenced sales of new projects: “Le JADE Abeno
Harimacho (Abeno Ward, Osaka City; 48 units in total),” “Le JADE City Hashimoto I & II (Midori Ward,
Sagamihara City; 69 units in total for I and 87 units in total for II),” “Le JADE Minoh Semba (Minoh City, Osaka
Prefecture; 30 units in total),” “Le JADE Sapporo Naebo (Higashi Ward, Sapporo City; 42 units in total),” “Le JADE
Chigasaki Higashikaigan Minami (Chigasaki City, Kanagawa Prefecture; 31 units in total),” “Le JADE
Shinyokohama (Kohoku Ward, Yokohama City; 190 units in total),” “Le JADE Fukuroi Ekimae (Fukuroi City,
Shizuoka Prefecture; 48 units in total),” “Le JADE Tanimachi 5-chome (Chuo Ward, Osaka City; 42 units in total),”“Le JADE Kamitori (Chuo Ward, Kumamoto City; 138 units in total),” “Le JADE KANAYAMA GRANDE (Naka
Ward, Nagoya City; 87 units in total),” “Le JADE SHIN-OMURA STATION FRONT and Le JADE SHIN-OMURAPARK SIDE (119 units in total and 72 units in total, Omura City, Nagasaki Prefecture),” “Le JADE Senri
Fujishirodai 3-Chome (Suita City, Osaka; 127 units in total),” “Le JADE City Senri Fujishirodai (Suita City, Osaka;
244 units in total),” “Le JADE Nagoya (Nakamura Ward, Nagoya City; 125 units in total),” “Le JADE Nanko HANATERRACE (Suminoe Ward, Osaka City; 55 units in total),” “LeJIAS OHASHI DUX (Minami Ward, Fukuoka City;
90 units in total)” and “Le JADE Bishoen Ekimae“(Higashisumiyoshi Ward, Osaka City; 35 units intotal). Of the properties completed this fiscal year, at 14 properties, including “Le JADE Hokkaido Ball Park
(Kitahiroshima City, Hokkaido; 118 units in total),” all units are delivered, and at 4 properties including “Le JADE
Fukuroi Ekimae (Fukuroi City, Shizuoka Prefecture; 48 units in total)” among those scheduled for delivery in thenext fiscal year, all units are contracted to sell out.
In addition, as mentioned earlier, we are expanding our business area by steadily progressing the development
business including the condominiums in Hokkaido, and we have begun development in Nagasaki following
Fukuoka and Kumamoto in Kyushu. On top of these, we are making a foray into Okinawa.
In the real estate leasing business, as mentioned above, we made Shijo-Omiya Building Co., Ltd our subsidiaryin addition to the Picasso Group, bringing in market capitalization of 42 billion yen and 43 properties into assets
held by the Group, and thereby expect to secure stable earnings by further strengthening the leasing business.
Furthermore, based on the concept of “a residence for expressing oneself and enjoying the now in life,” welaunched the new “TOPAZ” brand of rental residences. In Greater Tokyo, we developed TOPAZ properties in
Okachimachi and Honatsugi; in Kansai, we developed one in Esaka. “TOPAZ Shin-Okachimachi” received the2023 Good Design Award. We also have plans to implement new projects in the future.

- 14 -

We are striving to secure stable rental income from commercial facilities and increase asset value, such as by
the opening of the aforementioned community-based shopping center “tonarie Hoshida (Katano City, Osaka
Prefecture)” in March 2023 and plans for the addition of “tonarie Kitahiroshima (Kitahiroshima City, Hokkaido
Prefecture)” in March 2025.
In the real estate planning agency and consulting business, we have started sales of the permanent use rights
to our urban columbarium. Leveraging our strength in planning, we are focusing on non-asset, high-margin
business, such as the commissioning business and the planning agency and consulting business.
As a result, ES-CON JAPAN achieved net sales of 118,861 million yen, operating income of 19,074 million yen,ordinary income of 16,585 million yen, and profit attributable to owners of parent of 10,050 million yen for the
fiscal year under review.
The following describes the operating results per segment (comparisons are with the same period of theprevious fiscal year).
(i) Real estate sales businessIn the real estate sales business, sales of condominiums and revenue-generating real estate were conducted,
resulting in net sales of 99,606 million yen and segment income of 20,660 million yen.
(ii) Real estate leasing businessIn the real estate leasing business, a focus was placed on leasing activities and the property managementbusiness in view of enhancement of asset value, including an increase in rental income of owned revenuegenerating real estate, resulting in net sales of 18,325 million yen and segment income of 7,841million yen.
(iii) Real estate planning agency and consulting businessIn the real estate planning agency and consulting business, proactive efforts were made in such aspects as
entrustment with planning, consulting and other services by making the best use of planning and multifacetedbusiness-building abilities, resulting in net sales of 929 million yen and segment income of 419 million yen.
(Business Performance Forecast for the Next Fiscal Year and Progress in Medium-Term Management Plan)
Details on results for this fiscal year and plans for the next fiscal year and beyond are provided under “1.
Summary of Operating Results, Etc., (1) Analysis of Operating Results, 2) Establishment of Long-Term Vision
2030 and 5th Medium-Term Management Plan.”(Dividends for the Next Fiscal Year)A dividend of 48 yen or higher per share is scheduled to be paid for the next fiscal year.
(2) Analysis of Financial Position
1) Status of Assets, Liabilities, and Net Assets
Assets at the end of the fiscal year under review increased by 135,966 million yen compared with the end of theprevious fiscal year to 399,696 million yen. This was mainly attributable to cash and deposits, inventories andnon-current assets increasing by 13,188 million yen, 87,522 million yen and 31,876 million yen, respectively.
Liabilities increased by 129,409 million yen compared with the end of the previous fiscal year to 328,994 million
yen. This was mainly attributable to long-term loans payable and short-term loans payable increasing by 124,729
million yen.
Net assets increased by 6,557 million yen compared with the end of the previous fiscal year to 70,702 million
yen. This was mainly attributable to cash dividends paid of 3,673 million yen, while profit attributable to owners ofparent of 10,050 million yen was recorded. As a result, the equity ratio was 18.1% (25.0% at the end of theprevious fiscal year).
2)

Cash flows
Cash and cash equivalents (“net cash”) at the end of the fiscal year under review increased by 13,107 million yen
compared with the end of the previous fiscal year to 48,712 million yen (35,604 million yen at the end of theprevious fiscal year). The following outlines the cash flows and the factors of change in cash flows in the fiscal
year under review.

- 15 -(Cash flows from operating activities)
Net cash used in operating activities was 68,892 million yen (1,501 million yen provided by the previous fiscal
year). This was mainly attributable to profit before income taxes of 15,203 million yen, an increase in inventoriesof 72,095 million yen, and income taxes paid of 8,818 million yen.
(Cash flows from investing activities)
Net cash used in investing activities was 32,611 million yen (1,620 million yen used in the previous fiscal year).
This was mainly attributable to the purchase of investment securities of 1,227 million yen, the purchase of noncurrent assets of 4,972 million yen, the purchase of investments in subsidiaries resulting in change in scope of
consolidation of 27,462 million yen, and proceeds from guarantee deposits received of 1,082 million yen.
(Cash flows from financing activities)
Net cash provided by financing activities was 114,585 million yen (2,144 million yen provided in the previous fiscal
year). This was mainly attributable to expenditures from and repayments of long-term loans payable and shortterm loans payable amounting to net proceeds of 117,664 million yen and payment of cash dividends of 3,672
million yen.
Reference: Changes in cash flow indicators
Fiscal year
ended
Dec. 2019

Fiscal year
ended
Dec. 2020

Fiscal year
ended
Dec. 2021

Fiscal year
ended
Dec. 2022

Fiscal year
ended
Mar. 2024

Equity ratio (%)

25.3

25.8

24.8

25.0

18.1

Equity ratio on market capitalization basis (%)

50.7

39.3

30.5

29.2

25.7

Equity ratio: Equity / Total assets
Equity ratio on market capitalization basis: Market capitalization / Total assets(Notes) 1. Each is calculated using consolidated financial figures.
2. Market capitalization is calculated by multiplying the closing share price at end of fiscal year by the
number of shares issued and outstanding at the end of fiscal year.
(3) Basic Policy on Distribution of Profit, and Dividend for the Fiscal Year Under Review and Next Fiscal Year
Positioning the return of profit to shareholders as a key management task, ES-CON JAPAN makes it a basic policy to
strive for uninterrupted and stable return of profit in line with corporate growth potential based on decisions that take
into account the status of business performance, availability of internal reserves, dividend payout ratio and otherfactors in a comprehensive manner.
ES-CON JAPAN has introduced a progressive dividend policy to “not decrease the dividend amount, but rather
only maintain or increase the dividend amount” in principle with DPS of the previous fiscal year as the lower limit,from the second medium-term management plan, and continues to implement the progressive dividend policy in thefifth medium-term management plan.
For the fiscal year ended March 2024, the year-end dividend forecast is 48 yen per share. The dividend payout
ratio is 45.5%.
(4) Business Risks
The main risks that could impact the Group’s operating results, share prices, financial status, etc., are listed below.
Statements concerning future matters are based on the judgements of the ES-CON JAPAN Group as of the end of
the fiscal year under review.
1)

Impacts of Changes in Economic Conditions, Interest Rate Trends, Real Estate Market Conditions, etc.
In the real estate sales business, we selectively acquire good-quality land for business, develop it making the bestuse of its locational characteristics, and provide attractive products including advantageous pricing. Upon the saleof properties, we take into account various factors in individual business plans by property and carefully consider
price range. However, when sale at the price determined in the business plan fails to progress as planned due toworsening supply-demand balance caused by rising construction costs, economic trends, economic conditions,trends in interest rates, tax systems and land prices and other factors, or when delay in delivery or unexpected
cost burden arises due to various factors, including unexpected defects such as underground obstacles, disorder- 16 -

in construction at the construction stage, the business performance of the ES-CON JAPAN Group may be
impacted.
Likewise, in the real estate leasing business, depending on the effects of economic trends or conditions, ormoving out of main tenants or usage situations at commercial facilities, rents or occupancy rates of assets owned
may decline, which can have an impact on the Group’s operating results.
2)

Legal Restrictions, Etc.
In addition to the restrictions of the Companies Act and the Financial Instruments and Exchange Act, the realestate industry to which the ES-CON Japan Group belongs is subject to the restrictions of the National Land Use
Planning Act, Real Estate Brokerage Act, Building Standards Act, Act on Maintenance of Sanitation in Buildings,
Act on Specified Joint Real Estate Ventures, Act on Securitization of Assets, Trust Business Act, Money Lending
Business Act, and Act on Prevention of Transfer of Criminal Proceeds, etc.
In addition, the ES-CON Japan Group conducts real estate sales and related business as a real estatecompany licensed or registered under the Real Estate Brokerage Act, the Act on Advancement of Proper
Condominium Management and the Act on Optimization of Rental Housing Management Business, etc., but theabolition of these or creation of new legal restrictions could affect the Group’s business performance.

3)

Dependence on Interest-Bearing Liabilities
The Group procures funds for land acquisition, etc. related to its real estate business primarily through borrowings
from financial institutions involved in project finance. In our condominium sale business, it takes time to get fromland acquisition to commercialization or sale, so the ratio of the balance of interest-bearing liabilities to total
assets is relatively high. We are committed to building and maintaining good business relationships with financial
institutions, including the main banks, and ensuring an expeditious financing environment after becoming a
consolidated subsidiary of Chubu Electric Power Company, but if financing ends up being insufficient or
unsatisfactory due to higher interest rates or a significant deterioration of the financial environment, it could affect
the Group’s business performance and financial position.
Note that interest-bearing liabilities for the three most recent fiscal years are as follows.
Fiscal year ended
Dec. 2021

Fiscal year ended
Dec. 2022

Fiscal year ended
Mar. 2024

Balance of interest-bearing liabilities(million yen)(A)

163,034

169,065

293,794

Total net assets (million yen)(B)

252,771

263,729

399,696

Dependency on interest-bearing liabilities
(%)

(A/B)

64.5

64.1

73.5

1,463

1,895

2,650

Interest expenses (million yen)4)

Human Resources
Our real estate-related business requires diverse expertise, making personnel an extremely important businessresource. For that reason, as its medium- to long-term strategy the Group espouses the promotion of “securingpersonnel who underpin growth,” “reinforcing human resource development,” and “promoting employee safety
and health” as a unified trinity and the establishment of a firm human resource base. In order to conduct reliablebusiness and grow as a Group, it is indispensable that we strive to share expertise and information and continue
to improve employees’ abilities as well as secure highly specialized personnel and employ, nurture, and educate
executives and young employees who will be the leaders of the next generation. However, failing to secure or
nurture the human resources sought by the Group or losing outstanding personnel who are currently present
could affect the Group’s business performance and future business development.

- 17 -

5)

Personal Information Leakage and Information System Risks
As business operators handling personal information under the Act on the Protection of Personal Information, thevarious companies of the Group receive personal information of customers and clients in each of their businesses
when developing them in a multidimensional way. This includes customers who purchase or consider purchasing
condominiums or detached houses through the condominium sales business or reside in rental apartments aswell as customers who purchase or consider purchasing permanent use rights in the columbarium business. The
Group has set rules for the handling of personal information (basic policy, regulations, and manual) to establish aninternal system and keeps personal data files under strict safekeeping with monitoring software and restricts
access authority on the system in a bid to enhance the entire system as a whole to also manage information otherthan personal information.
Additionally, ES-CON JAPAN outsources part of the sale of condominiums to sales companies, and thesecompanies are required to use part of ES-CON JAPAN’s management system to prevent customer informationfrom being leaked to third parties and handle customer information within the scope to ensure confidentiality.
Simultaneously, ES-CON JAPAN conducts supervision that includes prohibiting personal information submitted bycustomers from being used for a non-intended purpose.
Cyberattacks have grown increasingly sophisticated in recent years. Like other organizations, the Group is
exposed to cybersecurity threats. To minimize risks, ES-CON JAPAN is bolstering system-side countermeasuresby introducing the latest security tools and administering periodic security training for employees.
Nevertheless, should personal information be leaked due to unforeseen circumstances, the Group’s sales could
fall due to its ruined credibility or compensation for damages may arise, and such may affect the Group’s businessperformance.

6)

Important Litigation
Regarding the risk of becoming subject to litigation, the Risk Management Committee consisting of directors, theheads of each division, and other members monitors risks and shares information across the Group. Important
litigation, should it be filed in the future, could affect the Group’s business performance and financial condition.

7)

Risks Related to Climate Change
A society with increasing climate damage is assumed to be seen in the future, and the increasing risk on business
continuity caused by climate change may have an impact on the Group’s operating results and financial position.
In 2022, the Company endorsed the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations, which assess the financial impact of risks and opportunities from climate change on
management and encourage companies to make disclosures about it. We disclose information on the impact fromclimate change on our business based on TCFD’s framework.
For details, please see“(1) Analysis of Operating Results, 11) Declaration of Support for TCFD
Recommendations and Disclosures” above.

8)

Legal Violation Risks
Should an employee or officer of the Group or Company violate any relevant laws as the Group conducts
business (including the Companies Act, Real Estate Brokerage Act, Construction Industry Act, Licensed Architect
Act, Financial Instruments and Exchange Act, Act on Investment Trusts and Investment Corporations, Act on theProtection of Personal Information, Money Lending Business Act, Act on Advancement of Proper Condominium
Management, Labor Standards Act, and Employment Security Act), administrative disposition may be imposed by
the authorities concerned. In this case, due to the Group’s ruined social credibility and compensation fordamages, its financial position, business performance, and reputation in the market may be affected.

- 18 -

2.

Management Policy(1) Basic Policy on Corporate Management
We recognize the need to improve and strengthen our corporate governance. We must do so to improve thesoundness and transparency of management, build corporate value in sustainable fashion for the long term, andbecome a company needed by society in accordance with our “Purpose,” “Vision,” and “Principles of Action.”
Purpose (The Group’s societal reason for being and value for society)“IDEAL to REAL: Bringing ideals into reality to create a new future”
We create value rooted in the community, helping to bring about cherished cities and living environments in which
residents can take pride. The value we create represents our contributions to society. Consequently, each of us
seeks to realize original forms of self-actualization through that value. While designing an ideal future, we will becreating a new future, with the aim of being regarded as a unique, essential presence by all our stakeholders.
Vision (Our ideal shape for achieving our Purpose)“To Be A Life Developer” To develop not just buildings but the lives of those who live in them, with their happinessin mind –this is the kind of life developer we aspire to be. Through solutions proposed by cross-departmental teams
made up of the best and brightest minds, we create a new prosperity unprecedented in the real estate industry,
thereby connecting people with people and communities with the future.
Principles of Action (Actions we should take to realize our vision)
1. Provision of new value: We will use our information networks, planning ability, and product development

2.
3.

4.

5.

6.

expertise to tap the unlimited potential of real estate and create new value that responds to every need of ourclients.
Sustainability management: We will respond to various social challenges with precision and pursue scenarios inwhich our company and society can grow sustainably and side by side.
Growth and stability: Rather than pursuing volume and scale, we aspire to achieve high-quality growth based ona keen awareness of capital and cash efficiency. At the same time, we seek to build firm financial and operationalfoundations capable of accommodating a broad range of business risk.
Management awareness: We will strive to achieve a strong offense in management that is always one stepahead by ensuring that all Group employees are aware of management issues and by continuing to be acompany that practices rapid decision-making.
Compliance: We will comply with all applicable laws, regulations, and societal norms both within and outside
Japan, maintain a keen awareness of compliance and governance issues, take appropriate action as humanbeings, and form an organization with great bottom-up communication.
Gratitude: We will act at all times in ways that demonstrate our clear appreciation and respect for colleagues,
whether within or outside the company. We will seek to build and maintain strong working relationships.

(2) Medium- to Long-Term Corporate Management Strategy and Management Indicator Targets
To serve as guidelines and strategies for continuing sustained long-term growth, we established our “Long-Term
Vision 2030,” which lays out what kind of company we want to be by FY2030 and the direction we are aiming for.
Seeing the direction, we are aiming for as “Deepening” and “Evolution” under each of the below items, we willproceed to carry out a variety of initiatives.
1)

Priority themes for business strategy (Direction we are aiming for)<<Deepening>>
a. Further growth of main businessb. Synergies with the Chubu Electric Power Groupc. Further stabilizing the revenue structured. Establishing management that accounts for capital costs and stock price<<Evolution>>a. Diversification of development projects and typesb. Expanding domestic area of operations
c. Global expansiond.

Challenge of new business domains- 19 -

e.
f.

New urban development and management
Promoting DX

2) Priority themes for sustainability management (Materiality/Direction we are aiming for)<<Deepening>>
a. Harnessing diverse human resourcesb. Rigorous compliancec. Strengthening governance and risk management, including Group companies<<Evolution>>a. Promoting a decarbonized societyb. Achieving a society characterized by well-being
3)

FY2030 Indicators
Ordinary income of 30 billion yen / real estate assets of 1 trillion yen
Details are provided under “1. Summary of Operating Results, Etc., (1) Analysis of Operating Results, 2)
Establishment of Long-Term Vision 2030 and Fifth Medium-Term Management Plan.”(3) Stable Business Growth in Accordance with Each Segment
To achieve the priority themes for business strategy set forth under Long-Term Vision 2030, we will strive to achieve
stable growth by devising strategies specific to each segment.
In our condominium sales business and real estate development business (formerly real estate sales business),
with commercial facility development positioned as our core, we are developing these businesses across diverse
domains while monitoring market trends. Related efforts include the development of logistics facilities, offices, andhotels, as well as land readjustment projects to revitalize cities.
In our real estate lease business and asset management business (formerly real estate lease business), over thetime covered by our fourth medium-term management plan, we converted the Picasso Group and Shijo Omiya
Building Co., Ltd. into subsidiaries. Going forward, we plan to identify and assess potential mergers and acquisitions
that do not appear on the market through discussions with companies and other entities looking for businesssuccessors while continuing to stabilize our revenue structure.
In our other businesses (including businesses formerly subsumed under the real estate planning agency andconsulting business), in addition to launching the full-fledged development of capital investment operations overseas
and elsewhere, we are undertaking sales efforts for the permanent use rights to our urban columbarium andotherwise enhancing the breadth and quality of our business domains.
(4) Business and Financial Issues to Be Addressed on a Priority Basis
The corporate operating environment, including the devaluation of the Japanese yen and rising costs and interest
rates, will significantly affect economic trends. Furthermore, we are called on to urgently address various social
problems ranging from global warming to the declining birthrate and aging population, decrease in population, genderissues, economic gap issues, and geopolitical risks, on top of digital transformation (DX) in various fields and fiercer
competition that goes beyond industry boundaries. Moreover, the consumption behavior and values of customers areconstantly and swiftly changing, and in order to achieve sustainable growth, businesses find themselves in anenvironment where they must provide true value to customers and society through business activities.
In order to realize sustainable growth through contributions to society under this environment of rapid diversificationand change, we, as the ES-CON JAPAN Group, need to adopt new, flexible ideas not bound by precedent or
established concepts, carry out business activities, and contribute to revitalizing the local community. Concurrently,
we should strive to conduct stable management based on the solid financial foundation and grow surely and steadily
through the satisfaction of our customers with the ultimate aim of being a “life developer” bringing the ideal into reality,
building a future, and developing a lifestyle per se by envisioning the happiness of those living there.
Through a multifaceted real estate business that includes residential development, commercial development,
logistics development, leasing business, office development, hotel development, overseas business,planning/consulting, facility operation management, asset management, capital investment operations overseas andelsewhere, and columbarium business, we must constantly strike the optimal balance of businesses in our operations
and establish a firm management base that can withstand any economic environment. In addition, to achieve- 20 -

sustainable growth, recognizing the further enhancement of organizational power, human capital—that is, ouremployees or their knowledge, skills, talents, and the like— is our top priority, we have started preparations toformulate our policy on human resources development, build an educational and training system, and disclose
information on matters related to human capital.
We will carry through both “deepening” and “evolution” based on our dual focus on business strategy andsustainability management; create a virtuous cycle of sustainable growth for the Group; and, by doing our part forsociety, seek to achieve true corporate value that transcends financial indicators alone.

- 21 -

3.

Basic Policy on Selection of Accounting Standard
The ES-CON JAPAN Group uses Japanese GAAP for the preparation of its consolidated financial statements in viewof comparability for the period covered by the consolidated financial statements and inter-company comparability. The
Group’s policy is to respond to the application of IFRS in an appropriate manner, taking into account a variety ofcircumstances inside and outside Japan.

- 22 -

4.

Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: million yen)
Fiscal year ended Dec. 2022
(as of Dec. 31, 2022)

Fiscal year ended Mar. 2024
(as of Mar. 31, 2024)

35,721

48,910

1,096

1,019

4,804
138,968
10,766(1)
191,357

3,408
227,887
14,267(1)
295,492

22,734(2,353)
20,3809(9)
031,535
2
(1)
1
109
395
(283)
112
52,13927,832(4,198)23,63416(10)
651,311
2
(1)
1
38
435
(330)
105
75,098

7,696
77
7,774

16,10961
16,170

6,279
2,475
352
4,827
(1,521)
12,41372,327

7,950
2,471
73
4,252
(1,812)
12,935104,20445
45
263,729－－
399,696

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade andcontract assets
Real estate for sale
Real estate for sale in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery and vehicles
Accumulated depreciation
Buildings and structures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total non-current assets
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Share issuance cost
Total deferred assets
Total assets- 23 -

(Unit: million yen)
Fiscal year ended Dec. 2022
(as of Dec. 31, 2022)

Fiscal year ended Mar. 2024
(as of Mar. 31, 2024)

10,061
26,193
0
4,702
3,258
5,201
5,416
856
55,69051,53742,699
0
2,887
594
5,960
4,442
458
108,580

132,810
1
7,916
186
109
271
2,598
143,894
199,585

199,557
0
17,087
227
116
277
3,146
220,413
328,994

16,51912,42438,326(1,457)65,813

16,51912,46144,703(1,383)72,301

79

149

13

52

93

202

0
(1,761)64,144
263,7290(1,801)70,702399,696

Liabilities
Current liabilities
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Accounts payable - other
Income taxes payable
Advances received
Deposits received
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for directors’ share-based benefits
Provision for share-based benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeSubscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets- 24 -

(2)Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Unit: million yen)
Fiscal year ended Dec. 2022
(from Jan. 1, 2022
to Dec. 31, 2022)

Fiscal year ended Mar. 2023
(from Jan. 1, 2023
to Mar. 31, 2024)

99,431
72,823
26,607

118,861
83,91934,941

3,180
1,110
256
2,574
50
55
620
874
2,393

4,621
1,262
434
3,797
41
14
893
1,068
3,732

11,115

15,867

15,492

19,074

1
130
48
287
9
478

4
153
81
387
27
654

1,895
36

2,650
45

16

219

9
1,957
14,012

227
3,143
16,585

0

0

205

－

205

0

0
682
1,483
1,760
－
3,927
10,290
4,782
(133)
4,648
5,641
(1,608)
7,250

1
－
291
814
275
1,381
15,203
5,788
(105)
5,682
9,520
(529)
10,050Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Advertising expenses
Sales commission
Directors’ compensations
Salaries and allowances
Provision for directors’ share-based benefits
Provision for share-based benefits
Commission fee
Taxes and dues
Other
Total selling, general and administrative
expenses
Operating income
Non-operating income
Interest income
Dividend income
Penalty income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Amortization of share issuance cost
Share of loss of entities accounted for using
equity method
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on reversal of subscription rights to shares
Gain on sales of shares of subsidiaries andassociates
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on compensation for damage
Provision of allowance for doubtful accounts
Impairment loss
Loss on payment of penalty fee
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit
Net income attributable to noncontrolling interests
Profit attributable to owners of parent- 25 -

(Consolidated Statement of Comprehensive Income)(Unit: million yen)
Fiscal year ended Dec. 2022
(from Jan. 1, 2022
to Dec. 31, 2022)

Fiscal year ended Mar. 2024
(from Jan. 1, 2023
to Mar. 31, 2024)

5,641

9,520

(292)

70

22

(16)

27

55

(241)
5,399

109
9,629

7,008

10,159(1,608)(529)

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests- 26 -

(3)Consolidated Statement of Changes in Equity
Fiscal year ended Dec. 2022 (from Jan. 1, 2022 to Dec. 31, 2022)(Unit: million yen)
Shareholders’ equity
Capital stock

Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus

16,519Retainedearnings

12,396

Total
shareholders’equityTreasuryshares34,745(1,216)62,445

Dividends of surplus(3,669)(3,669)Profit attributable toowners of parent

7,250

7,250

Disposal of treasury
sharesPurchase of treasury
shares as share-based
payment benefits
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end of current
period

27

52

79

(293)

(293)

－

27

3,581

(241)

3,367

16,51912,42438,326(1,457)65,813

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning ofcurrent period
Changes of items during
period371

Foreigncurrencytranslation
adjustment

Total
Subscription
accumulated
rights toothersharescomprehensive
income

(36)

334

0

Noncontrollinginterests(152)

Total net
assets62,628Dividends of surplus(3,669)Profit attributable toowners of parent

7,250

Disposal of treasury
sharesPurchase of treasury
shares as share-based
payment benefits
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end of current
period

79
(293)
(292)

50

(241)

(0)

(1,608)(1,851)

(292)

50

(241)

(0)

(1,608)

1,516

79

13

93

0

(1,761)64,144- 27 -

Fiscal year ended December 2023 (from Jan. 1, 2023 to Dec. 31, 2023)(Unit: million yen)
Shareholders’ equity
Capital stock
Balance at beginning ofcurrent period
Changes of items during
periodCapital surplus

16,519Retainedearnings

12,42438,326

Dividends of surplus
Profit attributable toowners of parent
Disposal of treasury
sharesPurchase of treasury
shares as share-based
payment benefits
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end of current
periodTotal
shareholders’equityTreasuryshares(1,457)65,813(3,673)(3,673)

10,05010,050

37

(0)

(0)

74

111

－

37

6,376

74

6,488

16,51912,46144,703(1,383)72,301

Accumulated other comprehensive income

Balance at beginning ofcurrent period
Changes of items during
periodValuationdifference on
available-forsale securities

Foreigncurrencytranslation
adjustment

79

13

Total
Subscription
accumulated
rights toothersharescomprehensive
income930Noncontrollinginterests(1,761)

Total net
assets64,144

Dividends of surplus(3,673)

Profit attributable toowners of parent

10,050

Disposal of treasury
shares(0)

Purchase of treasury
shares as share-based
payment benefits
Net changes of items
other thanshareholders’ equity
Total changes of items
during period
Balance at end of current
period

111
70

38

109

(0)

(39)

69

70

38

109

(0)

(39)

6,557

149

52

202

0

(1,801)70,702- 28 -

(4)Consolidated Statement of Cash Flows(Unit: million yen)
Fiscal year ended Dec. 2022
(from Jan. 1, 2022
to Dec. 31, 2022)

Fiscal year ended Mar. 2024
(from Jan. 1, 2023
to Mar. 31, 2024)

10,290
1,256
1,760
522
24
36
－

15,203
1,931
814
1,044
20
45
275

1,484

290

50

41

52

6

(132)
1,895
(287)

(157)
2,650
(387)

16

219

(205)

－

682
0

－
1

(259)

77

(11,104)
(16)
1,408

(72,095)(501)(1,078)

859

(514)

(857)
(840)
59
39
6,737
133
(2,328)－(3,040)600(2,088)(2,585)(114)(56,300)
156(2,971)(275)(8,818)

1,501(68,892)

(4)
2
(513)

(16)
18
(1,227)

294

15

(603)

－

699

－

(2,033)46(4,972)
46

316－

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Amortization of long-term prepaid expenses
Amortization of share issuance cost
Loss on payment of penalty fee
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for directors’share-based benefits
Increase (decrease) in provision for share-based
benefits
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of loss (profit) of entities accounted forusing equity method
Loss (gain) on sales of shares of subsidiaries andassociates
Loss on compensation for damage
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts
receivable - trade and contract assets
Decrease (increase) in inventories
Decrease (increase) in prepaid expenses
Increase (decrease) in accounts payable
Decrease/increase in consumption taxes
receivable/payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in other assets
Increase (decrease) in other liabilities
SubtotalInterest and dividend income received
Interest expenses paid
Penalty fee paid
Income taxes (paid) refund
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of investment securities
Proceeds from withdrawal of investment
Securities
Purchase of shares of subsidiaries andassociates
Proceeds from sales of shares of subsidiaries andassociates
Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of shares of subsidiaries resulting inchange in scope of consolidation- 29 -

(Unit: million yen)
Fiscal year ended Dec. 2022
(from Jan. 1, 2022
to Dec. 31, 2022)

Fiscal year ended Mar. 2024
(from Jan. 1, 2023
to Mar. 31, 2024)－(27,462)

(117)
1
(769)
1,060
－
1
(1,620)

(64)
176
(198)
1,082
(8)
－
(32,611)

11,929(2,956)110,273(113,215)(0)113,688(74,291)
138,310(60,022)
(0)

－

490

76
(293)
(3,668)
2,144
19

103
(0)
(3,672)
114,58527

2,045

13,10733,55935,60435,604
48,712

Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation
Payments of loans receivableCollection of loans receivable
Repayments of guarantee deposits received
Proceeds from guarantee deposits received
Repayments of divestments
Proceeds from divestments
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Proceeds from payments of non-controllinginterests
Proceeds from disposal of treasury shares
Purchase of treasury shares
Cash dividends paid
Net cash provided by (used in) financing activities
Translation differences 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- 30 -

(5) Notes to Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable(Changes in Accounting Policies)
Not applicable(Additional Information)(Accounting estimates in line with the spread of COVID-19)
There are no significant changes in the assumptions concerning the impact of the COVID-19 pandemic stated in
the previous fiscal year’s securities report.
However, there are many factors of uncertainty concerning the impact of the COVID-19 pandemic, and thus if
the real estate market deteriorates further, the operating results, financial position, and status of cash flow of the
ES-CON JAPAN Group may be materially impacted due to posting of appraisal loss of inventories and impairment
loss, etc. for owned properties.
(Board Benefit Trust for Executives)(1) Overview of the Transaction
1) ES-CON JAPAN passed a resolution to introduce the performance-based stock reward system (the “System”;
the trust established based on the trust agreement concluded with Resona Bank, Limited for the System isreferred to as “board benefit trust for executives”) at the Annual General Meeting of Shareholders held on
March 20, 2015, with an aim to further clarify the relationship between remuneration for ES-CON JAPAN’s
directors (excluding directors who are Audit and Supervisory Committee Members, external directors andnonexecutive directors) and (authorized) executive managing officers (the “Directors, etc.”; hereinafterreferred to as the same unless otherwise specified) and ES-CON JAPAN’s operating results and share price,with the Directors, etc. not only benefiting from a rise in share price but also sharing the same risks asshareholders in relation to a fall in share price, thereby increasing awareness of contribution to the medium- tolong-term improvement of operating results and enhancement of corporate value. Furthermore, ES-CON
JAPAN passed a resolution for continuation and partial revision of the System for the Directors, etc. at theAnnual General Meetings of Shareholders held on March 26, 2020 and March 26, 2021 and at theExtraordinary General Meeting of Shareholders held on November 29, 2023.
The System after the revision is an incentive system by which ES-CON JAPAN contributes money to a trustwith the trust acquiring shares of ES-CON JAPAN with said money as capital, and shares of ES-CON JAPANand the fair market value of shares of ES-CON JAPAN are granted to ES-CON JAPAN’s Directors, etc.
through the trust in accordance with the operating results achievement rate, etc. pursuant to the officer stock
ownership regulations set by ES-CON JAPAN. The shares of ES-CON JAPAN will be granted to the Director,
etc. of ES-CON JAPAN when said Director, etc. retires from all positions such as director in principle.
Under the System, for a set period of three fiscal years from the fiscal year ended December 2021 to thefiscal year ending March 2024 as well as each subsequent period of three fiscal years, ES-CON JAPAN willcontribute money up to 330 million yen (110 million yen per fiscal year multiplied by the number of target fiscal
years) to the trust.
2) Total number of shares to be granted to the Directors, etc.
• Resolution passed at the Annual General Meeting of Shareholders held on March 20, 2015
Upper limit of funds for acquisition of shares (for the five fiscal years from the fiscal year ended December
2015 to the fiscal year ended December 2019): 240 million yen• Resolution passed at the Annual General Meeting of Shareholders held on March 26, 2020
Upper limit of funds for acquisition of shares (for the three fiscal years from the fiscal year ended
December 2020 to the fiscal year ended December 2022, and each subsequent period of three fiscal
years): 330 million yen• Resolution passed at the Annual General Meeting of Shareholders held on March 26, 2021
Upper limit of funds for acquisition of shares (for the three fiscal years from the fiscal year ended
December 2021 to the fiscal year ended December 2023, and each subsequent period of three fiscal
years): 330 million yen- 31 -

•Resolution passed at the Extraordinary General Meeting of Shareholders held on November 29, 2023
Upper limit of funds for acquisition of shares (for the three fiscal years from the fiscal year ended
December 2021 to the fiscal year ending March 2024, and each subsequent period of three fiscal years):
330 million yen

3) Scope of persons who are eligible to receive beneficiary rights and other rights under the System
The Directors, etc. of ES-CON JAPAN who have acquired the right to receive shares based on the officer
stock ownership regulations.
(2) Residual Shares of ES-CON JAPAN in the Trust
Residual shares of ES-CON JAPAN in the trust are recorded as treasury shares under net assets using thebook value in the trust (excluding the amount of incidental expenses). The book value of the treasury sharesand the number of shares is 347 million yen and 851,000 shares for the fiscal year ended December 2022, and
347 million yen and 851,000 shares for the fiscal year ended March 2024.
(Share-Based Payment Benefits-Type ESOP Trust)(1) Overview of the Transaction
ES-CON JAPAN passed a resolution to introduce a share-based payment benefits-type ESOP (the “System”;
the trust established based on the trust agreement concluded with Resona Bank, Limited for the System isreferred to as “share-based payment benefits-type ESOP trust”) at the Board of Directors’ meeting held on
March 20, 2015, with an aim to further enhance the benefit program for its employees and raise theirmotivation and morale for improving the share price and operating results. Furthermore, ES-CON JAPAN
passed a resolution for continuation and partial revision of the share-based payment benefits-type ESOP trust
for employees at the Board of Directors’ meeting held on October 25, 2023.
The System after the revision is a system by which ES-CON JAPAN contributes money to a trust for a new
period of seven fiscal years from the fiscal year ended December 2022 to the fiscal year ending March 2029
and the period of the seven fiscal years after the elapse of the period, with the trust acquiring shares of ESCON JAPAN with said money as capital, and shares of ES-CON JAPAN are granted to the ES-CON JAPANGroup’s employees who have satisfied certain requirements through the trust, pursuant to the stock ownershipregulations set by ES-CON JAPAN.
(2) Residual Shares of ES-CON JAPAN in the Trust
Residual shares of ES-CON JAPAN in the trust are recorded as treasury shares under net assets using thebook value in the trust (excluding the amount of incidental expenses). The book value of the treasury sharesand the number of shares is 347 million yen and 573,400 shares for the fiscal year ended December 2022,
and 339 million yen and 542,000 shares for the fiscal year ended March 2024.
(Segment Information, Etc.)[Segment Information]
1. Overview of the Reporting Segments
The reporting segments of the ES-CON JAPAN Group are, among the units constituting the ES-CON JAPANGroup, segments that have available separate financial information and are subject to periodical review for
determining allocation of management resources and evaluation of performance by the board of directors andother meetings.
The ES-CON JAPAN Group has consolidated independent projects that have similar products, services,
etc. and formed three reporting segments of “real estate sales business,” “real estate leasing business” and“real estate planning agency and consulting business.”
The following are the main descriptions of each reporting segment.
Real estate sales business:
Development/sale of condominiums, commercial
facilities, etc., sale of land and such
Real estate leasing business:
Leasing of real estate and such
Real estate planning agency and consulting business: Subcontracting of real estate-related businesses,
brokerage, sales agency and such

- 32 -

2.

Calculation Method of Net Sales, Income or Loss, Assets and Other Item Amounts by Reporting Segment
The method of accounting treatments of the reported business segments is the same as that described in“Important Matters Serving as the Base for Preparation of Consolidated Financial Statements.”

3.

Information on Net Sales and Income or Loss Amounts by Reporting Segment and Information on Breakdown
of Revenue
Fiscal year ended Dec. 2022 (from Jan. 1, 2022 to Dec. 31, 2022)(Unit: million yen)
Reporting segment
Real estate
Real estate sales
Real estateplanning agency
businessleasing business and consulting
businessAmount on
consolidated
Reconciliation
statement of(Note 1)income(Note 2)Total

Net sales
Revenue fromcontracts withcustomers
Other revenue(Note 4)
Net sales to externalcustomers

86,531

1,156

1,074

88,763－88,763－

10,667－

10,667－

10,66786,531

11,824

1,074

99,431－

99,431

－

－

－

－

－

－

86,531

11,824

1,074

99,431－

99,431

Segment income

17,006

4,716

228

21,951(6,459)15,492

Segment assets

152,41267,721

3,966

224,100

39,629263,729

－

1,140

30

1,171

110

1,281

Intersegment net
sales or transfers
Total

Other items
Depreciation (Note 3)

Amortization of
97
425
－
522
－
522
goodwill
Amount of investment
in entities accounted
603
688
1,292
1,292
－
－
for using equity
methodIncrease in property,
plant and equipment
77
1,929
1
2,009
36
2,045
and intangible assets(Note 3)(Note 1) Reconciliations are as follows(1) The reconciliation of segment income of -6,459 million yen is corporate expenses not attributable to any
reporting segment. Corporate expenses are general and administrative expenses not attributable toreporting segments.
(2) The reconciliation of segment assets of 39,629 million yen is mainly surplus operating funds (cash anddeposits), administrative assets, etc. not attributable to reporting segments.
(3) The reconciliation of depreciation of 110 million yen is depreciation on corporate assets not attributable toreporting segments.
(4) The reconciliation of increase in property, plant and equipment and intangible assets of 36 million yen isincrease in corporate assets not attributable to reporting segments(Note 2) Segment income is reconciled with operating income on the quarterly consolidated statements of income.
(Note 3) Increase in depreciation, property, plant and equipment and intangible assets includes long-term prepaid
expenses and the amortization amount of such expenses.
(Note 4) “Other revenue” is rental income, etc. based on “Accounting Standard for Lease Transactions.”- 33 -

Fiscal year ended Mar. 2024 (from Jan. 1, 2023 to Mar. 31, 2024)(Unit: million yen)
Reporting segment
Real estate
Real estate sales
Real estateplanning agency
businessleasing business and consulting
business

Total

Amount on
consolidated
Reconciliation
statement of(Note 1)income(Note 2)

Net sales
Revenue fromcontracts withcustomers
Other revenue(Note 4)
Net sales to externalcustomers

99,606

1,573

929

102,109－102,109－16,751－

16,751－

16,751

99,60618,325929

118,861－

118,861

－

－

－

－

－

－

99,60618,325929

118,861－

118,861

Segment income

20,6607,841

419

28,920(9,846)

19,074

Segment assets

243,010

100,668

2,612

346,291

53,405400,526

－

1,795

22

1,817

133

1,951

Amortization of121
goodwill
Amount of investment
in entities accounted
784
for using equity
methodIncrease in property,
plant and equipment－
and intangible assets(Note 3)(Note 1) Reconciliations are as follows:

923

－

1,044

－

1,044

－

478

1,263

－

1,263

34,412－

34,412102

34,515Intersegment net
sales or transfers
Total

Other items
Depreciation (Note 3)(1) The reconciliation of segment income of -9,846 million yen is corporate expenses not attributable to any
reporting segment. Corporate expenses are general and administrative expenses not attributable toreporting segments.
(2) The reconciliation of segment assets of 53,405 million yen is mainly surplus operating funds (cash anddeposits), administrative assets, etc. not attributable to reporting segments.
(3) The reconciliation of depreciation of 133 million yen is depreciation on corporate assets not attributable toreporting segments.
(4) The reconciliation of increase in property, plant and equipment and intangible assets of 102 million yen isincrease in corporate assets not attributable to reporting segments(Note 2) Segment income is reconciled with operating income on the quarterly consolidated statements of income.
(Note 3) Increase in depreciation, property, plant and equipment and intangible assets includes long-term prepaid
expenses and the amortization amount of such expenses.
(Note 4) “Other revenue” is rental income, etc. based on “Accounting Standard for Lease Transactions.”- 34 -5.

Other(1) Status of Contracts and Sales
The performance of contracts in the real estate sales business for the fiscal year under review is as follows:
Fiscal year ended Mar. 2024
(from Jan. 1, 2023 to Mar. 31, 2024)
Category

Contract amount during the period
Number of units(units)Mid- to high-risehousing, etc.

Amount(million yen)

Number of units(units)Amount(million yen)

1,358

73,275885

48,855－

18,346

－

7,508

1,358

91,622885

56,364

Other
Total

Balance of contracts at the end of the period

The main performance of sales by segment for the last two fiscal years is as follows:
Fiscal year ended Dec. 2022
(from Jan. 1, 2022 to Dec. 31, 2022)
Name of segment
Property nameCondominiums

Real estate sales
business

Number Amountof units (million(units)yen)
1,185

58,532

Koga Genboen Land
Readjustment Project 6

－

5,479

LIONS SQUAREKAWAGUCHI

－

4,000

Solprasa Sakai

－

3,300

Kuzuhahanazono

－

3,275

Chiba Research Park

－

3,001

4-chome Sakae, Naka-ku,
Nagoya-shi

－

1,794

5-chome Fujishirodai,
Suita-shi (completed
residence land)

－

1,439

Selection Aobadai－

800

Nishi-Kunitachi－

373

Tsuruma station front－

323

Shijo Omiya station front－

296

Nishi-Tokorozawa

－

268

Other

－

3,650

1,185

86,531

Subtotal
Real estateleasing business
Real estateplanning agency
and consulting
business
Total(Note)- 35 -

Property nameCondominiums
Logistics facilities in
Hashima-shi, Gifu
Prefecture
LOGITRES Tojo II
2-chome Haramachida,
Machida-shi
TOPAZ Shin-Okachimachi
5-chome Fujishirodai,
Suita-shi (commercial)
Fukaeminami,
Higashinari-ku, Osaka-shi
Land with leaseholdinterest in Minami
Matsubara II, TakatsukiCity
5-chome Fujishirodai,
Suita-shi (land for ahealthcare facility for theelderly)
Chikara-machi, Higashiku, Nagoya-shi
Other

Subtotal

Number Amountof units (million(units)yen)
1,216

69,290

－

8,380

－

6,600

－

4,059

－

2,500

－

1,680

－

1,411

－

400

－

308

－

95

－

4,880

1,216

99,606

11,824

18,325

1,074

929

99,431

There are no transactions between segments.

Fiscal year ended Mar. 2024
(from Jan. 1, 2023 to Mar. 31, 2024)

Total

118,861