Summary of Accounts for First Three Quarters of Fiscal Year Ending December 2023
(Japanese GAAP) (Consolidated)
Name of listed company: ES-CON JAPAN Ltd.
Code:
8892
Representative:(Name) Takatoshi Ito(Position)
Contact for inquiries:(Name) Kenji Fujita(Position)
Scheduled date for submission of periodic securities report:
Scheduled date for start of dividend payment:
Supplementary explanatory materials created for accounts? Yes/No:
Accounts briefing meeting held?
Yes/No:October 25, 2023
Listing exchange: Tokyo Stock Exchange
URL:
https://www.es-conjapan.co.jp/english/
President & Representative Director
Director
TEL: +81-3-6230-9303
October 25, 2023
No
No
(Amounts are rounded down to the nearest million yen)

1.

Consolidated results for first three quarters of fiscal year ending December 2023 (from January 1, 2023 to September 30, 2023)(1) Consolidated operating results (cumulative)(% figures show the rate of increase (decrease) compared with the same period of the previous year)

Net sales

Operating income

million yen% million yen
First three quarters of fiscal
61,96222.5
8,089
year ending December 2023
First three quarters of fiscal
50,582
16.0
6,212
year ended December 2022
(Note) Comprehensive income
First three quarters of fiscal year ending December 2023:
4,619 million yen [48.4 %]Basic earnings per shareFirst three quarters of fiscal
year ending December 2023
First three quarters of fiscal
year ended December 2022
(2) Consolidated financial position
Total assets

Profit attributable toowners of parent
million yen%

Ordinary income%

million yen

%

30.2

7,093

33.3

4,565

34.6

28.1

5,319

32.5

3,393

16.7

First three quarters of fiscal year ended December 2022:
3,112 million yen [16.1%]
Diluted earnings per share

yen

yen

47.92

47.83

35.56

35.50

Net assets

Equity ratio

Book value per share

million yen

million yen%

yenFirst three quarters of fiscal
year ending December 2023

349,581

65,121

19.1

701.58

Fiscal year ended Dec. 2022

263,729

64,14425.0

691.87

Reference: Equity
First three quarters of fiscal year ending December 2023: Fiscal year ended Dec. 2022:
66,878 million yen
65,906 million yen
2.

Dividends
End of firstquarter

End of second
quarter

Annual dividend
End of third
quarterYear-end

Total

yen

yen

yen

yen

yen

Fiscal year ended Dec. 2022

－

0.00

－

38.00

38.00

Fiscal year ending Dec. 2023

－

0.00

－

Fiscal year ending Dec. 2023
(Forecast)

－

38.00

38.00

(Note) Revisions from latest dividends forecast: None

-1-

3.

Consolidated earnings forecast for fiscal year ending March 2024 (from January 1, 2023 to March 31, 2024)(% figures show the rate of increase (decrease) compared with the previous period)

Net sales
million yen%

Operating income

Ordinary income

Profit attributable to Basic earnings
owners of parent
per share

million yen

million yen

million yen

%

%

%

yen

Full fiscal year
120,000
20.7
18,00016.2
15,50010.6
10,00037.9
104.94(Note) 1. Revisions from latest earnings forecast: Yes
2. Subject to the approval of the proposal for partial amendment to the Articles of Incorporation (amendment to
the end of the fiscal year) at the extraordinary general meeting of shareholders slated for November 29, 2023,
ES-CON JAPAN plans to change its fiscal year-end (the end of the fiscal year) from December 31 to March
31. Accordingly, the fiscal year ending March 31, 2024, which is the transitional period for the change in fiscal
year-end, is scheduled to be a 15-month accounting period from January 1, 2023, to March 31, 2024. As oftoday, before the Extraordinary General Meeting of Shareholders, items other than the consolidated earnings
forecast are presented as “fiscal year ending December 2023” as before.
*Explanatory notes(1) Changes in significant subsidiaries during the first three quarters(Changes in specified subsidiaries resulting in change in scope of consolidation):
Newly included:– (Company name)
Excluded:– (Company name)

None(2) Application of accounting treatments specific to preparation of quarterly consolidated financial statements: None
(3) Changes in accounting policies, changes in accounting estimates, and restatement
1) Changes in accounting policies due to amendment of accounting standards, etc.:
2) Changes in accounting policies other than 1):
3) Changes in accounting estimates:
4) Restatement:(4) Number of shares issued and outstanding (common shares)
1) Number of shares issued and outstanding
First three quarters
98,580,887(including treasury shares) at end of fiscal year of fiscal year
sharesending Dec. 2023
2) Number of treasury shares at end of period
First three quarters
3,255,650
of fiscal year
sharesending Dec. 2023
3) Average number of shares during period
First three quarters
95,289,062
of fiscal year
(cumulative)
sharesending Dec. 2023

None
None
None
None

Fiscal year ended 98,580,887
Dec. 2022
sharesFiscal year ended
Dec. 2022

3,322,800
sharesFirst three quartersof fiscal year ended 95,416,293
sharesDec. 2022(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 (first three quarters of fiscal year
ending December 2023: 851,000 shares in the board benefit trust for executives and 543,200 shares in theshare-based payment benefits-type ESOP trust). In the calculation of the average number of shares during
the fiscal year, the treasury shares to be subtracted in that calculation includes ES-CON JAPAN shares heldin the share-based payment benefits trust for directors and the share-based payment benefits-type ESOP trust(first three quarters of the fiscal year ending December 2023: 1,401,678 shares).
*This quarterly summary of accounts is not subject to quarterly 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,
actual business performance and other results may differ materially due to various reasons. For the conditions forming
the assumptions on which earnings forecasts are based and explanatory notes for use of earnings forecasts, etc.,
please see “Attachment; 1. Qualitative Information on Quarterly Results; (4) Explanation of Consolidated Earnings
Forecast and Other Forward-Looking Information” on page 14.

-2-

○ Contents of Attachment
1. Qualitative Information on Quarterly Results ................................................................................................................ 4(1) Business Risks ....................................................................................................................................................... 4(2) Explanation of Operating Results ........................................................................................................................... 4(3) Explanation of Financial Position .......................................................................................................................... 14(4) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information.................................... 14
2. Quarterly Consolidated Financial Statements and Key Notes .................................................................................... 15(1) Quarterly Consolidated Balance Sheet ................................................................................................................. 15(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income ... 17(Quarterly Consolidated Statement of Income) ..................................................................................................... 17(First three quarters of fiscal year ending December 2023) ............................................................................... 17(Quarterly Consolidated Statement of Comprehensive Income) ........................................................................... 18(First three quarters of fiscal year ending December 2023) ............................................................................... 18(3) Notes to Quarterly Consolidated Financial Statements ........................................................................................ 19(Notes on Going Concern Assumption) ................................................................................................................. 19(Notes on Substantial Changes in the Amount of Shareholders’ Equity) .............................................................. 19(Additional Information) ......................................................................................................................................... 19(Segment Information, Etc.) .................................................................................................................................. 21(Significant Subsequent Events) ........................................................................................................................... 22
3. Other .......................................................................................................................................................................... 23
Status of Contracts and Sales .................................................................................................................................... 23-3-

Attachment
1.

Qualitative Information on Quarterly Results(1)

Business Risks
There are no business risks that newly arose in the first three quarters of the fiscal year ending December 2023.
In addition, there are no significant changes in the business risks stated in the previous fiscal year’s securities
report.

(2)

Explanation of Operating Results
In the first three quarters of the fiscal year under review (fiscal year ending December 2023), the Japanese economy
continued to see improvement in business sentiment centered on domestic demand such as signs of recovery inconsumer spending and the employment environment as the normalization of domestic economic activities and therecovery of inbound demand have progressed with the lifting of behavioral restrictions and immigration restrictions
related to COVID-19.
On the other hand, looking overseas, there are concerns over the impact of the downturn in overseas economies on
the Japanese economy such as the impact of global monetary tightening and the slowing of the Chinese economy, in
addition to raw material and energy prices driven upward by the prolonged situation in Ukraine. Moreover, rising prices
are accelerating in Japan, and the outlook remains unclear.
In the real estate industry in which the ES-CON JAPAN Group operates, causes for concern are increasing, such as
rising prices of construction materials, the shortage of personnel, and also the impact of revising monetary policy on
housing loan interest rates.
Amid such conditions, we aim for sustainable growth by building a firm management base that can withstand any
economic environment to maximize corporate value under the fourth medium-term management plan “IDEAL to
REAL 2023” formulated in February 2021 with the theme of “Transformation and Rapid Progress.”

1)

Progress of Fourth Medium-term Management Plan “IDEAL to REAL 2023”
With the capital increase through third-party allotment with Chubu Electric Power Co., Inc. (hereinafter “Chubu
Electric Power”) as the allottee conducted in 2021, our creditworthiness was significantly enhanced. ES-CON
JAPAN made Picasso Co., Ltd. and its seven group companies (the “Picasso Group”) its subsidiaries and secured
stable rental income, resulting in the steady progress in our “Transformation,” a basic policy of our medium-term
management plan.
The fiscal year under review, the final fiscal year of the medium-term management plan, is the final stage of thetransition from “Transformation” to “Rapid Progress.” We are striving to achieve our plan, which calls for record-highperformance, and develop synergies within the Chubu Electric Power Group. The joint project with the Chubu ElectricPower Group described below is also building a record of accomplishment. Furthermore, the acquisition of Shijo Omiya
Building Co., Ltd., which engages in businesses such as real estate leasing, announced in February 2023 wascompleted on July 31, 2023, and is expected to contribute to the further enhancement of stock earnings.
Meanwhile, the ES-CON JAPAN Group decided to change the end of its fiscal year to March, which is the same as
Chubu Electric Power, to strengthen coordination with the parent company Chubu Electric Power and further produce
synergies with the entire Chubu Electric Power Group. On the condition that the proposal to partially amend the current
articles of incorporation (change of end of the fiscal year) is approved in the extraordinary general meeting ofshareholders to be held on November 29, 2023, the fiscal year under review is scheduled to be for the 15 months fromJanuary 1, 2023 to March 31, 2024 as a transition period for the change in the accounting period. Due to this, we haverevised the current fourth medium-term management plan “IDEAL to REAL 2023”, but the basic policies remainunchanged. ES-CON JAPAN plans to increase year-end dividends (record date: March 31, 2024) by 10 yen/sharefrom 38 yen/share to 48 yen/share.
The details of the fourth medium-term management plan and the revised plan are as follows.
(a) Basic Management Strategy Policies
・ Establish business foundations able to withstand unexpected changes in economic conditions
Establish a solid business and financial standing that can maintain fund-raising ability under any economic
environment.

-4-

・ Simultaneously change the revenue structure and expand business domains
Transform the revenue structure from one based on flows to one based on stock by strengthening the realestate leasing business while simultaneously realizing business diversification and expanding businessterritories.
(b) Basic Policy: Transformation and Rapid ProgressTransformation
・ Proactive investment in long-term revenue-generating real estate and improvement of balance sheet structure
・ Transform the focus of management from flows to stock
Rapid Progress・ Demonstrating synergies within the Chubu Electric Power Group・ Achieving net sales of 120 billion yen and operating income of 18 billion yen (in the final fiscal year of the revised
medium-term management plan)(c) Management Strategies
・ Transformation to a structure of sustained and stable revenues
・ Stable growth in existing core businesses through business diversification and area strategies
・ Growing new businesses into core businesses through business diversification and area strategies
・ Taking on the challenges of new business domains
・ Enhancing synergies within the ES-CON JAPAN Group・ Expanding business bases, primarily in the five major urban areas
・ Enhancing synergies with the Chubu Electric Power Group・ Promoting ESG initiatives(d) Revised Performance Plan
(Unit: million yen)

Performance Plan

Fiscal year
ended Dec.
2021
(27th period)

Fiscal year
ended Dec.
2022
(28th period)

ActualActualFiscal year ending Mar. 2024
(29th period)
Initial plan
(12 months)(A)

Revised plan
(15 months)(B)

B-A Change

B-A
increase/dec
rease (%)

79,01799,431110,000

120,000

10,0009.1

70,33486,531

94,800100,000

5,200

5.5

Condominium sales

45,05058,532

61,90069,000

7,100

11.5

Condominium units
sold (units)

1,020

1,185

1,164

1,268

104

8.9

Other sales

25,28327,99932,90031,000(1,900)(5.8)

Real estate leasing
business

8,090

11,824

14,20019,000

4,800

33.8

592

1,074

1,000

1,000

－

－

Operating income

10,381

15,492

16,20018,000

1,800

11.1

Ordinary income

9,099

14,012

14,20015,500

1,300

9.2

5,961

7,250

9,400

10,000600

6.4

Net sales
Real estate sales
business

Real estate planning
agency and consulting
business

Profit attributable toowners of parent-5-

(e) Revised Management Targets
Fiscal year ended
Dec. 2021
Management Targets
ActualShare of profits fromleasing*1
Return on equity(ROE)
Return on invested
capital (ROIC)

Fiscal year ended
Dec. 2022

Fiscal year ending Mar. 2024
Initial plan
(12 months)(1)

ActualRevised plan
(15 months)(2)(2)-(1) Change

21.2%

21.5%

30.0%

28.0%

- 2 points

11.8%

11.3%

13.0%

15.0%

2 points

3.2%

4.6%

4.0%

4.0%

－

Equity ratio

24.8%

25.0%

21.0%

20.0%

- 1 point

Share of long-term
earnings from realestate*2

20.6%

19.5%

23.0%

21.0%

- 2 points

62.6 billion yen

64.1 billion yen

72.0 billion yen

71.0 billion yen- 1.0 billion yen

Net assets(Note) 1. Share of profits for leasing: Leasing segment profits / Total segment profits (excluding adjustments)
2. Share of long-term earnings from real estate: Real estate generating leasing revenues recorded
as non-current assets / Total assets(f) Revised Investment Plan
(Unit: 100 million yen)

Investment Plan

Fiscal year Fiscal year
ended Dec. ended Dec.
2021
2022
ActualGross investment

ActualThree-year
Three-year cumulative
cumulative
total
total
(15 months)
Initial plan Revised plan (12 months)(2)(12 months) (15 months)(1)
Fiscal year 2023(2)-(1)
Change

959

369

880

972

2,209

2,300

91

767

108

657

665

1,533

1,540

7

56

36

100

128

193

220

27

337

56

337

292

731

685

(46)

373

15

220

247

608

635

27

191

261

223

308

675

760

85

Amount recovered

48

65

187

167

300

280

(20)

Net investment amount

911

304

693

805

1,908

2,020

112

Investment in revenuegenerating real estate
Investment indevelopment ofrevenuegenerating realestateInvestment inmedium-term
revenuegenerating realestateInvestment inlong-term
revenuegenerating realestateInvestment in otherdevelopment

-6-

2)

Status of Demonstration of Synergy Effect with the Chubu Electric Power Group
ES-CON JAPAN is currently engaged its fifth project, the development of TSUNAGU GARDEN SENRIFUJISHIRODAI (Fujishirodai, Suita City, Osaka Prefecture), as a joint project with Chuden Real Estate Co., Inc., awholly owned subsidiary of Chubu Electric Power.
The project is the first mixed-use development project jointly conducted with Chuden Real Estate Co., Inc., andwill establish a “new multi-generational urban district” through the integrated development of collective housing,detached dwellings, a clinic mall, an authorized daycare center, commercial facilities and a park on 20,000 tsubo ofland. The name of the project is imbued with the message of connecting nature, multiple generations, lifestyle, theenvironment, safety and security based on the concept of “a future life of continued connection.” As the first step inthis new community, we have started the development of the condominium “Le JADE City Senri Fujishirodai (244units in total)”.
Two projects are currently underway as joint projects with Chubu Electric Power. In August 2022, a consortium ofbusinesses led by Chubu Electric Power, of which ES-CON Japan is a member (hereinafter the “Consortium”),
entered into a basic planning agreement for the development project at the former site of Nagoya Horse Racing
Track. In addition, the Consortium submitted a plan to utilize wood produced in Aichi Prefecture for “Ideas for
Projects/Plans for the Realization of Carbon Neutrality” solicited by Aichi Prefecture and entered into an “Agreementon the Promotion of the Utilization of Wood in Public Buildings” with Aichi Prefecture, the first of its kind in theprefecture, in September 2022.
Furthermore, we established TSUNAGU Community Farm LLC with Chubu Electric Power and Spread Co., Ltd.
(hereinafter “Spread”), and started construction of Techno Farm Fukuroi, which will be the world’s largest verticalfarm utilizing fully artificial light and capable of producing 10 tons of lettuce per day. By combining Chubu ElectricPower’s know-how in energy management, ES-CON JAPAN’s real estate development capabilities, and Spread’s
cultivation technology, we are working on the efficient and stable production of “safe and secure” lettuce with theaim of launching production in February 2024.
We will continue to strengthen our partnership with the Chubu Electric Power Group and actively work to achieve
large-scale urban development and realize a “new form of community.”

3)

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 development area:
approx. 36.7 ha; hereinafter “F VILLAGE”) centered on the new stadium, and “Le JADE Hokkaido Ballpark”
condominium (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 cornerof F VILLAGE. Moreover, informal agreements with six tenants for the medical mall F VILLAGE MEDICAL SQUARE
have been reached. The building is scheduled for completion in spring 2024, with tenants taking occupancy in June
2024.
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.

-7-

Beyond Kitahiroshima City, we sold out “Le JADE Sapporo Motomachi” (Higashi Ward, Sapporo City; 39 units intotal), our first condominium in Sapporo City, and have also been making steady progress with projects in Hokkaido
since last year, such as condominium development for Le JADE Sapporo Naebo (Higashi Ward, Sapporo City; 42units in total; scheduled for completion in February 2024) and a logistics facility in Chitose City. We will continue tocooperate in the promotion of sports and culture and contribute to the revitalization and development of the entire
Hokkaido region for the happiness of its residents.
4)

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, in November 2022, wecommenced unit sales for MID TOWER IWAKI, the tallest barrier-free seismic isolation structure tower condominium
in the city. With regard to a development project in the vicinity of Shin-Omura Station on the Nishi-Kyushu
Shinkansen line in Nagasaki Prefecture, we concluded a basic agreement with Omura City together with Daiwa
House Industry Co., Ltd. and Izumi Co., Ltd. as a member of a business group composed of the three companies
in March 2022 and acquired the project site in March 2023. SAKURA MIRAI SHIN OMURA was decided as thename of the project, and with the opening of the station in September 2022, the project entails developing
condominiums, commercial facilities, etc. where residents and visitors from outside the city can interact with eachother in line with the town development policy of Omura City. ES-CON JAPAN is engaged in the development of
two condominiums called “Le JADE SHIN-OMURA STATION FRONT (119 units in total)” and “Le JADE SHINOMURA PARK SIDE (72 units in total)” in two blocks, and both will have the appearance aimed at harmony with therich nature of the surrounding area by adopting an organic design reminiscent of trees changing direction as theygrow upward rather than having a structure of floors and walls that are only horizontal and vertical.
Furthermore, in February 2023, we redesigned “tonarie Utsunomiya (Utsunomiya City, Tochigi Prefecture)" into a
facility that can 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). The development began as a joint project with MIRARTH
Holdings, Inc. In the surrounding area, development of industrial facilities, such as condominiums, detached houses,and business offices, is planned, with future development anticipated.

5)

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-cho, Kitasaku-gun, Nagano Prefecture. The property issituated in a location surrounded by the abundant nature of Karuizawa and is the second property to be developedin the area. The first building, Ost Residence Karuizawa (33 units in total, sold out in 2021), won the Good DesignAward for the fiscal year 2022 for recognition of its high-quality product planning.
In addition, we have acquired two project sites in Hayama Town, Miura District, Kanagawa Prefecture, and areworking to develop condominiums that fully utilize the abundant natural environment, such as Morito Beach. The
Company is 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; scheduled for completion in October 2023),”a new condominium for sale with fixed-term land lease rights currently under development in a site adjacent to the“Toho Gakkai Main Building,” a historical building designated as an important building for the scenic developmentof Chiyoda Ward, Tokyo, and starting to provide information on “Grand Le JADE Kamakura Zaimokuza Rikyu (15units in total)” located a 4-minute walk from Kamakura Zaimokuza Beach in August 2023.
Furthermore, as a company creating “lifelong items” in the form of housing, we formulated the IDEAL CONPASS
quality management guideline and provide the Escon Premium After Support long-term after-sales service
supporting the lifestyles of people living in condominiums. We will continue to provide housing that makes ourcustomers feel safer, more secure and more comfortable.

-8-

6)

Implementation of Strategic M&As
As announced in February 2023, following the Picasso Group in October 2021, ES-CON JAPAN completed making
Shijo Omiya Building Co., Ltd. which is involved in real estate leasing and other businesses, a subsidiary in July
2023. The company was founded in 2010 in Kyoto City and has developed its real estate leasing business mainlyin the 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.

7)

Taking on the Challenges of New Business Domains
We are promoting efforts to diversify business content with the next generation in view by stating “growing new
businesses into core businesses” and “taking on the challenges of new business domains” in the fourth mediumterm management plan.
We completed the construction of our first self-developed office building in the Tokyo metropolitan area, ESCON
Kudan Kita Building, in November 2022. It received the 2023 Good Design Award for providing a new form of officebuilding aimed to be an “experience-based office” that could not be achieved anywhere else due to fully utilizing theview.
In December 2022, we invested and participated in a project promoted by Britania Public Company Limited, asubsidiary of Thai real estate developer Origin Property Public Company Limited, which is our first overseas project
to develop detached houses. In January 2023, we established the Overseas Business Department in the Strategic
Business Division to strengthen overseas business development. We are also proceeding to operate in new
business domains and areas such as establishing the Okinawa Branch Opening Preparation Office in July 2023
with future full-scale business development in Okinawa in mind.
Furthermore, in September 2023, we opened “tonarie medical Himeji Yumesakigawa,” which is our first clinic malldevelopment project, in Himeji City, Hyogo Prefecture. It is a clinic mall that is more accessible to the local
community, which is a new initiative.
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.

8)

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 and targets
on climate change risks and opportunities).

9)

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 health management further, we
will promote company-wide efforts and focus on enhancing essential company value that cannot be measured byfinancial information alone.

-9-The contents of the most recent major initiatives are as follows.
(a) Environment (E)・Acquisition of Various Certifications
In May 2020, 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) forReal Estate from a 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 6 properties are being
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 thequality of 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
In August 2022, ES-CON JAPAN obtained ZEH(*2)-M Oriented certification for its condominium “Le JADE
Honkawagoe” (Kawagoe City, Saitama Prefecture; 102 units in total), as the property features excellent heatinsulation performance and helps reduce annual primary energy consumption. This is our third ZEH
condominium following “Le JADE Okurayama” (Kohoku Ward, Yokohama City; 25 units in total), which won theGood Design Award for the fiscal year 2021, and Le JADE Yao Sakuragaoka (Yao City, Osaka Prefecture; 72
units in total), which was contracted to sell out early in June 2022.
We will continue to make the most of the development know-how of a general developer and proactively workon the development of environmentally friendly ZEH condominiums that are appreciated by our customers.
Moreover, in November 2020, ES-CON Home Co., Ltd. and ES-CON Craft Co., Ltd., consolidated subsidiaries
of ES-CON JAPAN which sell detached houses mainly in Saitama Prefecture, were registered for ZEH Builder
Certification.
*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.

・Construction and Operation of “Techno Farm Fukuroi,” a Vertical Farm Utilizing Fully Artificial LightAs previously mentioned, we are collaborating with Chubu Electric Power and Spread to develop Techno Farm
Fukuroi, which will be the world’s largest vertical farm utilizing fully artificial light and capable of producing 10
tons of lettuce per day. The three companies including ES-CON JAPAN will solve issues in food and agricultural
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 the proactive use ofgreen 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.
As mentioned in (2), the Consortium has entered into the “Agreement on the Promotion of the Utilization of Woodin Public Buildings” with Aichi Prefecture. We will make efforts to contribute to decarbonization through the
project, such as active utilization of wood produced in Aichi Prefecture.
(b) Social (S)・ Formulating General Employer Action Plans
In December 2022, ES-CON JAPAN formulated and published general employer action plans (action period:
January 1, 2023 to December 31, 2024) in accordance with the Act on Advancement of Measures to Support
Raising Next-Generation Children and the Act on the Promotion of Women’s Active Engagement in ProfessionalLife in order to help employees juggle career and family and create a workplace where human resources,
including women, can continue to be in employment and succeed.

- 10 -

・Received Certification as an “Excellent Health Management Corporation 2023”
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. As a result, in March 2023, ES-CON
JAPAN was certified as an “Excellent Health Management Corporation 2023” mainly for its efforts to promoteand enhance employee health, improve work comfort, and diversity.
・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, as in last year, in March2023 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. willcontribute to the further development of the city. The funds will be utilized to maintain a vibrant city into the future.
・Contributing to Healthcare
Since 2020, we have been donating 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.
We have also been providing monetary donations to Osaka University’s Graduate School of Medicine since2019 to support clinical trials for cancer vaccines showing promise for the treatment of cancer. In May 2022, we
donated funds for the establishment of an endowed cancer immunology course the school is developing, for the
purpose of research of cancer immune therapy.
In November 2022, 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.
・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 “humanresources development and employee growth.” We have formulated a human resources development program
to ensure that all employees understand and adhere to these guidelines and launched the program in the fiscal
year under review. 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 JAPAN has raised base wages
effective April 2023.
(c) Governance (G)・ Establishment of Voluntary Committee on Nomination and Remuneration of Directors
In January 2020, we established the “Nomination and Remuneration Advisory Committee” for the purpose ofstrengthening the independence and objectivity of functions as well as the accountability of the Board of Directors
with regard to nomination and remuneration of directors and other matters. Effective March 2023, three of thefour committee members have been replaced by independent outside directors from the Board of Directors, who
are members of the Audit and Supervisory Committee. In addition to ensuring fairness and transparency in theselection of directors and their compensation, ES-CON JAPAN strives to improve corporate governance byclarifying the right of Audit and Supervisory Committee members to express their opinions concerning director
election and remuneration.
・ Nurturing Successors
We also launched initiatives for a succession plan called the candidate successor system. We appointed a totalof seven employed executive officers in January 2023.

- 11 -

・ Diversity of the Board of Directors
At the 28th Annual General Meeting of Shareholders held on March 24, 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 arealso 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 established the Compliance Office directly under the President, taking theadministrative disposition on ES-CON ASSET MANAGEMENT Ltd. (hereinafter “EAM”), its consolidated
subsidiary, with utmost seriousness. The purpose of the Compliance Office is to strengthen legal complianceand internal control systems and to monitor every aspect of transactions with the parties in question, as well as
establish a framework for managing any conflicts of interest that arise in order to prevent the recurrence of such
incidents.
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 absoluteassessment based on the two main points, “Management Component” and “Development Component.”10) Current Status of EAM
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 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. Further, in connection with this administrative disposition, EAM wasdisciplined by The Investment Trusts Association, Japan on June 8, 2023. There was, however, no new undue
encouragement to impair the independence of real estate appraisers, impropriety in the real estate appraiser
selection process, or breach of any other fiduciary duties. ES-CON JAPAN, the parent company of EAM and mainsponsor 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 preventionof recurrence as a priority issue for our group as a whole. In order to build 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 ESCON 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 with high 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 in assets 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 the five major urban
areas, in addition to investment in commercial facilities and land with leasehold interest as in the past. We will
maintain our advanced compliance stance while seeking long-term stability and growth of EJR’s earnings.

- 12 -

11) 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 intotal),” “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),”and “Le JADE SHIN-OMURA STATION FRONT and Le JADE SHIN-OMURA PARK SIDE (119 units in total and 72
units in total, Omura City, Nagasaki Prefecture)”. As for sales progress, among properties completed in this period,at 8 properties, including “Le JADE Hokkaido Ball Park (Kitahiroshima City, Hokkaido; 118 units in total),” all units
are delivered, and at 6 properties including “Le JADE Nagai Park Avenue (Sumiyoshi Ward, Osaka City; 52 units intotal)” among those scheduled for delivery in this and the subsequent period, 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,” we launched
the new “TOPAZ” brand of rental residences. At present, “TOPAZ Shin-Okachimachi” and “TOPAZ Esaka” areoperating, and “TOPAZ Shin-Okachimachi” received the 2023 Good Design Award. We also have plans to
implement new projects in the future.
In addition, we are striving to secure stable rental income from commercial facilities and increase asset value,such as the acquisition of new commercial land with leasehold interest in Kurashiki City, Okayama Prefecture, theopening of the aforementioned community-based shopping center “tonarie Hoshida” in March 2023, and plans forthe addition of “tonarie Kitahiroshima” in March 2025.
In the real estate planning agency and consulting business, we have started sales of the permanent use rights toour 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 61,962 million yen (up 22.5%), operating income of 8,089 million
yen (up 30.2%), ordinary income of 7,093 million yen (up 33.3%) and profit attributable to owners of parent of 4,565
million yen (up 34.6%), for the first three quarters of the fiscal year under review, all compared with the same period of
the previous year.
The following describes the operating results per segment (comparisons are with the same period of the previous
fiscal year).
(i)Real estate sales businessIn the real estate sales business, ES-CON JAPAN achieved net sales of 51,275 million yen (up 22.9%) and segment
income of 9,571 million yen (up 26.6%).
(ii) Real estate leasing businessIn the real estate leasing business, focus was placed on leasing activities and the property management businessin view of enhancement of asset value, including increase in rental income of owned revenue-generating realestate, resulting in net sales of 10,299 million yen (up 21.3%) and segment income of 4,100 million yen (up 26.1%).

- 13 -

(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 388 million yen (up 4.1%) and segment income of 187 million
yen (up 497.0%).
(3)

Explanation of Financial Position
Assets at the end of the third quarter increased by 85,851 million yen compared with the end of the previous fiscal
year to 349,581 million yen. This was mainly attributable to property, plant and equipment and inventories increasing
by 23,623 million yen and 55,334 million yen, respectively, and cash and deposits decreasing by 6,458 million yen.
Liabilities increased by 84,874 million yen compared with the end of the previous fiscal year to 284,459 million yen.
This was mainly attributable to long-term loans payable and short-term loans payable increasing by 79,824 million
yen.
Net assets increased by 976 million yen compared with the end of the previous fiscal year to 65,121 million yen.
This was mainly attributable to cash dividends paid of 3,673 million yen, while recording profit attributable to ownersof parent of 4,565 million yen. As a result, the equity ratio was 19.1% (25.0% at the end of the previous fiscal year).

(4)

Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information
ES-CON JAPAN plans to amend its articles of incorporation to change the fiscal year from “from January 1 to December
31 every year” to “from April 1 to March 31 every year,” and the transition period of the fiscal year ending March 31,
2024 is a 15-month accounting period from January 1, 2023 to March 31, 2024. Based on the 3-month extension of theaccounting period and the most recent performance trends, etc., we have decided to revise the full-year earnings
forecast for the fiscal year ending December 31, 2023 (from January 1, 2023 to December 31, 2023 * Prior to changeof accounting period) announced on January 27, 2023. See “(2) Explanation of Operating Results” for details.

- 14 -

2.
(1)

Quarterly Consolidated Financial Statements and Key Notes
Quarterly Consolidated Balance Sheet
Fiscal year ended Dec. 2022
(as of Dec. 31, 2022)

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
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other 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- 15 -(Unit: million yen)
Third quarter of fiscal year
ending Dec. 2023
(as of Sept. 30, 2023)

35,721

29,263

1,096

1,012

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

3,231
195,876
14,895(1)
244,277

22,734(2,353)
20,38031,535
517
(293)
223
52,13927,718(3,375)24,34251,311
428
(319)
108
75,762

7,696
77
7,774

16,65878
16,737

13,935(1,521)
12,41372,327

14,306(1,521)
12,785105,28545
45263,72918
18
349,581Fiscal year ended Dec. 2022
(as of Dec. 31, 2022)
Liabilities
Current liabilities
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
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- 16 -(Unit: million yen)
Third quarter of fiscal year
ending Dec. 2023
(as of Sept. 30, 2023)

10,061
26,193
3,258
16,17755,69050,98539,297493
14,131
104,908

132,810186
109
271
10,516
143,894
199,585

158,606
211
105
276
20,351
179,551
284,459

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

16,51912,432
39,218(1,435)66,735

79

86

13

55

93

142

0
(1,761)64,144
263,7290(1,757)
65,121
349,581(2)Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income(Quarterly Consolidated Statement of Income)(First three quarters of fiscal year ending December 2023)

Net sales
Cost of sales
Gross profit
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
Share of loss of entities accounted for using equity
methodAmortization of share issuance cost
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on reversal of subscription rights to shares
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit
Net income (loss) attributable to noncontrollinginterests
Profit attributable to owners of parent

First three quarters of fiscal
year ended December 2022
(from Jan. 1, 2022
to Sept. 30, 2022)
50,582
37,11813,463
7,251
6,212(Unit: million yen)First three quarters of fiscal
year ending December 2023
(from Jan. 1, 2023
to Sept. 30, 2023)
61,962
44,765
17,196
9,107
8,089

0
68
37
451
8
567

3
97
51
328
9
490

1,396

1,411

28

43

27
8
1,460
5,319

27
4
1,486
7,093

0
0

0
0

0
0
5,318
1,766
172
1,939
3,379

0
0
7,092
2,484
37
2,522
4,570

(13)

4

3,393

4,565

- 17 -

(Quarterly Consolidated Statement of Comprehensive Income)(First three quarters of fiscal year ending December 2023)

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

First three quarters of fiscal
year ended December 2022
(from Jan. 1, 2022
to Sept. 30, 2022)
3,379- 18 -(Unit: million yen)First three quarters of fiscal
year ending December 2023
(from Jan. 1, 2023
to Sept. 30, 2023)
4,570

(352)

7

(0)

(2)

85

44

(266)
3,112

49
4,619

3,126

4,615

(13)

4

(3)

Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Notes on Substantial Changes in the Amount of Shareholders’ Equity)
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 statedin 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 andimpairment 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 is referred 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 and nonexecutive directors) and (authorized) executive managing officers (the“Directors, etc.”; hereinafter referred 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 as shareholders in relation to a fall in share price, thereby increasingawareness of contribution to the medium- to long-term improvement of operating results andenhancement of corporate value. Furthermore, ES-CON JAPAN passed a resolution for continuation andpartial revision of the System for the Directors, etc. at the Annual General Meetings of Shareholders heldon March 26, 2020, and March 26, 2021.
The System after the revision is an incentive system by which ES-CON JAPAN contributes money to atrust with the trust acquiring shares of ES-CON JAPAN with said money as capital, and shares of ESCON JAPAN and 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
the fiscal year ending December 2023 as well as each subsequent period of three fiscal years, ES-CON
JAPAN will contribute money up to 330 million yen (110 million yen per fiscal year multiplied by the numberof 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- 19 -

・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 ending December 2023, 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 third quarter of the fiscal year ending December 2023.
(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 June 30, 2022.
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
December 2028 and the period of the seven fiscal years after the elapse of the period, with the trust acquiring
shares of ES-CON JAPAN with said money as capital, and shares of ES-CON JAPAN are granted to the ESCON JAPAN Group’s employees who have satisfied certain requirements through the trust, pursuant to thestock ownership regulations 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
340 million yen and 543,200 shares for the third quarter of the fiscal year ending December 2023

- 20 -

(Segment Information, Etc.)[Segment Information]
I.
1.

First three quarters of fiscal year ended December 2022 (from January 1, 2022 to September 30, 2022)
Information on Net Sales and Income or Loss Amounts by Reporting Segment and Information on
Breakdown of Revenue
Reporting segment
Real estate
Real estate sales
Real estateplanning agency
businessleasing business and consulting
business

Total(Unit: million yen)Amount onquarterly
Reconciliation consolidated(Note 1)statement ofincome(Note 2)

Net sales
Revenue fromcontracts withcustomers
Other revenue(Note 3)
Net sales toexternalcustomers

41,719786

372

42,879－42,879

－

7,702

－

7,702

－

7,702

41,7198,489

372

50,582－50,582

－

－

－

－

－

－

Total

41,7198,489

372

50,582－50,582

Segment income

7,560

3,250

31

10,841(4,629)6,212

Intersegment
net sales ortransfers(Note) 1. The reconciliation of segment income of -4,629 million yen is corporate expenses not attributable
to any reporting segment. Corporate expenses are general and administrative expenses not
attributable to reporting segments.
2. Segment income is reconciled with operating income on the quarterly consolidated statements ofincome.
3. “Other revenue” is rental income, etc. based on “Accounting Standard for Lease Transactions.”
2.

Information on Impairment Loss on Non-Current Assets or Goodwill, Etc. by Reporting Segment
Not applicable.

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II. First three quarters of fiscal year ending December 2023 (from January 1, 2023 to September 30, 2023)
1. Information on Net Sales and Income or Loss Amounts by Reporting Segment and Information on
Breakdown of Revenue
Reporting segment
Real estate
Real estate sales
Real estateplanning agency
businessleasing business and consulting
business

Total(Unit: million yen)Amount onquarterly
Reconciliation consolidated(Note 1)statement ofincome(Note 2)

Net sales
Revenue fromcontracts withcustomers
Other revenue(Note 3)
Net sales toexternalcustomers

51,275902

388

52,565－52,565

－

9,396

－

9,396

－

9,396

51,275

10,299388

61,962－

61,962

－

－

－

－

－

－

Total

51,275

10,299388

61,962－

61,962

Segment income

9,571

4,100

187

13,859(5,770)8,089

Intersegment
net sales ortransfers(Note) 1. The reconciliation of segment income of -5,770 million yen is corporate expenses not attributable
to any reporting segment. Corporate expenses are general and administrative expenses not
attributable to reporting segments.
2. Segment income is reconciled with operating income on the quarterly consolidated statements ofincome.
3. “Other revenue” is rental income, etc. based on “Accounting Standard for Lease Transactions.”
2.

Information on Impairment Loss on Non-Current Assets or Goodwill, Etc. by Reporting Segment(Significant changes in the amount of goodwill)In the real estate leasing business, goodwill was recorded due to the acquisition of all shares of Shijo Omiya
Building Co. Ltd. The increase in goodwill due to this event was 9,510 million yen in the first three quartersof the fiscal year ending December 2023.

(Significant Subsequent Events)
Not applicable.

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3.

Other
Status of Contracts and Sales
The performance of contracts in the real estate sales business for the third quarter is as follows:
Third quarter of fiscal year ending Dec. 2023
(from Jul. 1, 2023 to Sept. 30, 2023)
Category

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

Amount(million yen)

Balance of contracts at the end of theperiodNumber of units
Amount(units)(million yen)

267

14,066873

47,315

－

1,886

－

12,581

267

15,953873

59,897The main performance of sales by segment for the third quarter is as follows:First three quarters of fiscal year ending Dec. 2023
(from Jan. 1, 2023 to Sept. 30, 2023)

Name of segment

Number of units(units)Property nameCondominiums

669

39,799

－

8,380

－

400

(land for a healthcare facility for theelderly)

－

308

Other

－

2,386

669

51,275

Logistics facilities in Hashima-shi,
Gifu Prefecture
Land with leasehold interest in
Real estate sales business

Minami Matsubara II, Takatsuki City
5-chome Fujishirodai, Suita-shi

Subtotal
Real estate leasing business

10,299Real estate planning agency

388

and consulting business
Total(Note)

Amount(million yen)

There are no transactions between segments.

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61,962