Summary of Accounts for First Quarter of Fiscal Year Ending December 2022
(Japanese GAAP) (Consolidated)
Name of listed company: ES-CON JAPAN Ltd.
Code:
8892
Representative:(Name) Takatoshi Ito(Position)
Contact for inquiries:(Name) Minoru Nakanishi(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:April 27, 2022
Listing exchange: Tokyo Stock Exchange
URL:
https://www.es-conjapan.co.jp/english/
President & Representative Director
Senior Managing Director TEL: 06 (6223) 8055
April 27, 2022－
No
No
(Amounts are rounded down to the nearest million yen)

1.

Consolidated results for first quarter of fiscal year ending December 2022 (from January 1, 2022 to March 31, 2022)(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%

Profit attributable toowners of parent

Ordinary income
million yen%

million yen%

First quarter of
12,7062.2
863(28.5)
582(36.7)
235(63.6)
fiscal year ending Dec. 2022
First quarter of
12,436(70.5)
1,207(87.5)
920(90.1)
647(89.9)
fiscal year ended Dec. 2021
Note: Comprehensive income
First quarter ofFirst quarter offiscal year ending Dec. 2022:
135 million yen [-80.3%] fiscal year ended Dec. 2021:
688 million yen [-88.7%]
Basicearnings per share

Dilutedearnings per share

yen

yen

First quarter of
2.47
2.46
fiscal year ending Dec. 2022
First quarter of
9.45
9.42
fiscal year ended Dec. 2021
(Note) “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29; March 31, 2020), etc. have been
applied from the beginning of the first quarter of the fiscal year ending December 2022, and the figures for the
first quarter of the fiscal year ending December 2022 are the figures after applying the accounting standard, etc.
(2) Consolidated financial position
Total assets
First quarter offiscal year ending Dec. 2022
Fiscal year ended Dec. 2021

Net assets

Equity ratio

Book value per share

million yen

million yen%

yen

275,837

59,10021.5

620.60252,771

62,62824.8

657.50

Reference: Equity
First quarter offiscal year ending Dec. 2022: 59,263 million yen
Fiscal year ended Dec. 2021: 62,780 million yen(Note) “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. have been
applied from the beginning of the first quarter of the fiscal year ending December 2022, and the figures for the
first quarter of the fiscal year ending December 2022 are the figures after applying the accounting standard, etc.
2.

Dividends
End of second
quarter

Annual dividend
End of third
quarter

yen

yen

yen

yen

yen

－
－

0.00

－

38.00

38.00

0.00

－

38.00

38.00

End of firstquarter
Fiscal year ended Dec. 2021
Fiscal year ending Dec. 2022
Fiscal year ending Dec. 2022 (Forecast)(Note) Revisions from latest dividends forecast: None

Year-end

Total

3.

Consolidated earnings forecast for fiscal year ending December 2022 (from January 1, 2022 to December 31, 2022)(% figures for the full fiscal year show the rate of increase (decrease) compared with the previous fiscal year,
and % figures for the first two quarters show the rate of increase (decrease) compared with the same period of the previous year)

Net salesFirst two quarters(cumulative)
Full fiscal year

Operating income

Ordinary income

Profit attributable to Basic earnings
owners of parent
per share

million yen%

million yen%

million yen%

million yen%

yen

36,300

45.3

4,700

83.5

3,800

96.5

2,600

87.3

27.23

100,000

26.6

14,00034.9

12,200

34.1

8,300

39.2

86.92

(Note) Revisions from latest earnings forecast: None
* Explanatory notes(1) Changes in significant subsidiaries during the first quarter (Changes in specified
subsidiaries resulting in change in scope of consolidation):－ companies (Company name) －Newly included:－ companies (Company name) －Excluded: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.:
Yes2) Changes in accounting policies other than 1):
None3) Changes in accounting estimates:
None4) Restatement:
None(Note) For details, please see “Attachment; 2. Quarterly Consolidated Financial Statements and Key Notes; (3)Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)” on page 15.
(4) Number of shares issued and outstanding (common shares)
First quarter of1) Number of shares issued and outstanding
98,580,887 Fiscal year ended 98,580,887
fiscal year ending(including treasury shares) at end of period
shares Dec. 2021
sharesDec. 2022
First quarter of
3,087,700 Fiscal year ended
3,096,900
2) Number of treasury shares at end of period fiscal year ending
shares Dec. 2021
sharesDec. 2022
First quarter ofFirst quarter of3) Average number of shares during period
95,489,887
68,533,745
fiscal year ending
fiscal year ending(cumulative)
sharessharesDec. 2022
Dec. 2021
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 quarter of fiscal year ending
December 2022: 851,000 shares in the board benefit trust for executives and 224,500 shares in the sharebased payment benefits-type ESOP trust). In the calculation of the average number of shares during period,
the treasury shares to be subtracted in that calculation includes shares of ES-CON JAPAN held in the board
benefit trust for executives and the share-based payment benefits-type ESOP trust (first quarter of fiscal year
ended December 2021: 1,075,866 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 theassumptions on which earnings forecasts are based and explanatory notes for use of earnings forecasts, etc., pleasesee “Attachment; 1. Qualitative Information on Quarterly Results; (4) Explanation of Consolidated Earnings Forecast
and Other Forward-Looking Information” on page 11.

○ Contents of Attachment
1. Qualitative Information on Quarterly Results ................................................................................................................ 2(1) Business Risks ...................................................................................................................................................... 2(2) Explanation of Operating Results ........................................................................................................................... 2(3) Explanation of Financial Position.......................................................................................................................... 11(4) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information ...................................... 11
2. Quarterly Consolidated Financial Statements and Key Notes ..................................................................................... 12(1) Quarterly Consolidated Balance Sheet ................................................................................................................. 12(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income .. 14(Quarterly Consolidated Statement of Income) ......................................................................................................... 14
First quarter of fiscal year ending Dec. 2021 ......................................................................................................... 14(Quarterly Consolidated Statement of Comprehensive Income) ................................................................................ 15First quarter of fiscal year ending December 2022 ................................................................................................ 15(3) Notes to Quarterly Consolidated Financial Statements ......................................................................................... 16(Notes on Going Concern Assumption) .................................................................................................................... 16(Notes on Substantial Changes in the Amount of Shareholders’ Equity) .................................................................... 16(Changes in Accounting Policies) ............................................................................................................................. 16(Additional Information) ............................................................................................................................................ 16(Segment Information, Etc.) ..................................................................................................................................... 19(Significant Subsequent Events) .............................................................................................................................. 20
3. Other ........................................................................................................................................................................ 21
Status of Contracts and Sales ................................................................................................................................... 21-1-

Attachment
1.

Qualitative Information on Quarterly Results(1)

Business Risks
There are no business risks that newly arose in the first quarter.
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 quarter, although the sixth wave of COVID-19 arrived and the number of cases surged, the increase incases settled in March 2022 and restrictions and border measures are being gradually loosened, including the factthat the pre-emergency measures to prevent the spread of the disease implemented in 18 prefectures have been
lifted. These lead to the expectation that economic and social activity will normalize and the Japanese economy will
recover.
In the real estate industry in which the ES-CON JAPAN Group operates, the real estate market remained strong
with housing demand being pushed up by work-style reform and new lifestyles such as working from home, partly
due to the supportive effect of the continuation of monetary easing measures.
On the other hand, there is a sense of uncertainty due to the situation in Ukraine, and it is very difficult to predict
the impact of rising raw material prices and fluctuations in financial and exchange markets on future trends in thereal estate market. Accordingly, there is a need also in the real estate business to proceed with caution regarding
development.
Despite such business environment in which the future outlook is extremely uncertain, we formulated “IDEAL to
REAL 2023,” the fourth medium-term management plan (targeting the three-year period from the fiscal year ended
December 2021 through the fiscal year ending December 2023) in February 2021, and are striving to achieve recordhigh profits this fiscal year, the second year of the plan, based on the basic policy of “transformation and rapid
progress.”
ES-CON JAPAN became a consolidated subsidiary of Chubu Electric Power Co., Inc. (hereinafter “Chubu ElectricPower”) on April 5, 2021. As a result, our corporate credit standing has dramatically increased and we haveestablished a flexible and stable fundraising base backed by acquisition of credit ratings from external institutions. In
addition, collaboration with Chubu Electric Power has also progressed and synergy with the company is being
demonstrated.
In October 2021, we made Picasso Co., Ltd., which owns numerous outstanding revenue-generating properties,
and its seven group companies (hereinafter “Picasso and seven companies”) subsidiaries and realized“transformation” of revenue structure stated in the fourth medium-term management plan.
In January 2022, we made FUEL Inc. (hereinafter “FUEL”), whose businesses include managing online funds andproviding computer systems to crowdfunding businesses in accordance with the Act on Specified Joint Real Estate
Ventures of Japan, a subsidiary, with an aim of strengthening and expanding the asset management business of the
ES-CON JAPAN Group and as participation for future participation in real estate financial business. As such, we aremaking progress in expansion of the Group’s business domain.
Also, on April 4, 2022, we transitioned to the Prime Market due to the reorganization of the Tokyo Stock Exchange,
Inc.'s market segments.

1)

Progress of the Fourth Medium-Term Management Plan “IDEAL to REAL 2023”
Fiscal 2022, the second year of the Fourth Medium-Term Management Plan, has been progressing smoothly as ayear of “rapid progress.”
In the fiscal 2021, the first fiscal year of the plan, the investment plan progressed at a pace higher than the initialplan, and rapidly realized a “transformation” in the revenue structure by securing stable leasing income. Accordingly,
we revised some of the management indicators, such as the share of profits from leasing for the fiscal year ending
December 2023, which is the final fiscal year of the medium-term management plan. Details of the revisions aredescribed in “5. Management Targets” below.
By realizing this “transformation,” we plan to renew record-high profits this fiscal year and the next fiscal year,
aiming for further “rapid progress.”-2-

The details of the fourth medium-term management plan are as follows.
1. Basic Management Strategy Policies
・ Establishing business foundations able to withstand unexpected changes in economic conditions
Establish a sound business and financial standing that can maintain its fundraising abilities under any
economic environment.
・ 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 at the same time realizing business diversification and expanding businessterritories
2. 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 110 billion yen and operating income of 16 billion yen (in the final fiscal year of themedium-term management plan)
3. Management Strategies
・ Transformation to a structure of sustained and stable profit 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 challenge of new business domains
・ Enhancing synergies with 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
4. Performance Plan

Fiscal year ended Dec. 2021

(Unit: million yen)
Fiscalyear
Fiscal year ending Dec. 2022
endingDec.
2023
Difference
Increase/
Plan
Initial plan from initialPlandecrease
plan

ActualPlan

Difference
from plan

Increase/decrease

Net sales

79,01780,000(982)(1.2%)

100,000

98,000

2,000

2.0%

110,000

Operatingincome10,381

10,800(418)(3.9%)

14,00014,000－－16,000-3-

5. Management Targets
Fiscal year ended Dec.
2021

Fiscal year ending Dec.
2022

Fiscal year ending Dec.
2023
Difference
RevisedInitial plan from initial
*4
plan
plan

ActualPlan

Plan

Initial plan

21.2%

23.0%

26.0%

24.0%

30.0%

26.0%

4.0%

11.8%

12.0%

13.0%

13.0%

13.0%

13.0%

－

3.2%

4.0%

4.0%

4.0%

4.0%

4.0%

－

Equity ratio

24.8%

29.0%

23.0%

26.0%

21.0%

23.0%

(2.0%)

Share of long-term
earnings from realestate*3

20.6%

12.0%

21.0%

14.0%

23.0%

18.0%

5.0%

62.6
billion yen

61.0
billion yen

67.3
billion yen

66.0
billion yen

72.0
billion yen

72.0
billion yen－

Share of profits fromleasing*1
Return on equity(ROE)
Return on invested
capital(ROIC) *2

Net assets*1*2

Share of profits from leasing: Leasing segment profits / Total segment profits (excluding adjustments)
Return on invested capital (ROIC): After-tax operating income / (Shareholders’ equity + Interest-bearing*3

liabilities)
Share of long-term earnings from real estate: Real estate generating leasing revenues recorded as*4noncurrent assets / Total assets
In the first fiscal year of the fourth medium-term management plan, we rapidly realized “transformation” of
the revenue structure by accelerating progress on investment plans ahead of schedule and securing stableleasing income, and “share of profits from leasing,” “equity ratio,” and “share of long-term earnings from realestate” for the fiscal year ending December 2023 were revised on March 25, 2022.

6. Investment Plan
Fiscal year
ending Dec.
2022

Fiscal year ended Dec. 2021

Investment inrevenuegenerating
real estate
Investment inotherdevelopment
Gross
investment
2)

Difference
from plan

Increase/decrease

Plan(Unit: million yen)
Fiscal year
Three-year
ending Dec.
cumulative
2023
total

Actual

Plan

Plan

Plan

76,79930,00046,799156.0%

40,00060,000130,000

19,191

25,000(5,809)(23.2%)

30,00035,00090,00095,99055,00040,99074.5%

70,00095,000220,000

Status of Demonstration of Synergy with the Chubu Electric Power GroupAs previously mentioned, we became a consolidated subsidiary of Chubu Electric Power in April 2021 and are
aggressively developing our business in the Chubu area.
In a joint venture with Chuden Real Estate Co., Inc., we are undertaking the development of condominiums andcommercial facilities in Shirakabe, Higashi Ward, Nagoya City, Ichinomiya City, Aichi Prefecture, Kakegawa City,
Shizuoka Prefecture, and Suita City, Osaka Prefecture.
In February 2022, a consortium of businesses led by Chubu Electric Power of which ES-CON JAPAN is a member
concluded a basic agreement on a project organized by Aichi Prefecture and the city of Nagoya concerning
utilization of the site of the 20th Asian Games Aichi-Nagoya 2026 Athletes’ Village after the games. In this project
for which city opening is scheduled for around 2028, we aim to create a next-generation community that connects
diverse people who help each other to solve various problems facing society and foster happiness together. Plans
call for ES-CON JAPAN to develop retail complexes as part of this community development project.

-4-

In July 2021, together with Chubu Electric Power and Spread Co., Ltd. (hereinafter “Spread”), we established“TSUNAGU Community Farm LLC” (hereinafter “new company”.) In October 2021, the new company started
construction of 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, in Fukuroi City, Shizuoka Prefecture. The aim is to launch productionin January 2024. By combining Chubu Electric Power's capital strength and knowledge in energy management with
our development know-how, we will make efforts toward decarbonization and cost reduction and contribute to the
production of cheaper vegetables at plants. At the same time, in collaboration with Spread - which has a track recordin cultivation and logistics - we will strive to produce "safe and clean” lettuce efficiently and stably.
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" while utilizing our real estate developmentknow-how.
3)

Efforts to Establish a Flexible Fundraising System
Based on our reception of a certain level of recognition from external agencies and financial institutions since webecame a subsidiary of Chubu Electric Power, we have established a system to flexibly and stably procure funds
necessary for the future growth of our group.
Specifically, the company received a rating of “A-” (stable) from Rating and Investment Information, Inc. and “A”(stable) from Japan Credit Rating Agency, Ltd. in July 2021, and was newly selected as a constituent of JPX-Nikkei
Index 400 for FY2021 (August 31, 2021 to August 30, 2022).
Given the recognition and other factors, the Company concluded a commitment line agreement with The NishiNippon City Bank, Ltd. in September 2021 with a maximum borrowing amount of 10 billion yen, and a syndicationtype commitment line agreement in November 2021 for a maximum borrowing amount of 5.5 billion yen with The
Shiga Bank, Ltd. serving as the arranger.
Furthermore, in December 2021, we submitted a shelf registration statement for issuance of corporate bonds tosecure a more flexible means of fundraising in addition to indirect financing from financial institutions. The Company
has the capacity to issue 50 billion yen in bonds and will consider doing so in a flexible and agile manner whileconsidering the market environment.
By establishing these flexible fundraising systems, we will proactively consider various investment opportunities
and execute investments that further raise our corporate value.

4)

Progress of Projects in Hokkaido“ES CON FIELD HOKKAIDO,” the new baseball stadium of the Hokkaido Nippon-Ham Fighters under constructionin Kitahiroshima City, Hokkaido, for which we have concluded a naming rights agreement, is scheduled to becompleted in December 2022 and open in March 2023 the following year. The area surrounding the new stadium isa large-scale development area called HOKKAIDO BALLPARK F VILLAGE (total development area: approx. 36.7
ha; hereinafter "F VILLAGE") with construction of a new station also planned. We are involved in the urban
development concept of which the new stadium will serve as the centerpiece.
In February 2022, we have commenced selling of the new condominium “Le JADE Hokkaido Ballpark” as the firstproject of the F VILLAGE urban development concept. The project is located in a rare location in close proximity to
the new baseball stadium, about 80 meters from the outfield stands of the new stadium. It will also allow enjoymentof the rich nature of Hokkaido. The concept of the project is to provide a new lifestyle (“living in a ballpark”). Media
reporting on the project has been extensive - including newspaper articles and TV programs - and the number ofvisits to the condominium gallery exceeded 600. The first stage of sales saw all units receive application the day of
its commencement.
Furthermore, in February 2022, we decided to develop a senior residence in the southeast corner of F VILLAGE.
As a residence for active seniors with a medical mall, it is scheduled to be completed in the spring of 2024. Thisinitiative is part of sustainable urban development to create a place for multi-generational exchange, and creates
homes blessed with nature and where people can fully enjoy sports and activities. From youth to the elderly, it willcontribute to health maintenance and community health care for people of all ages.

-5-In addition, in November 2021, we acquired a portion of the development site 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. The site will be used for threedevelopment projects: a station square in front of JR Kitahiroshima Station, an exchange center complex comprisingcommercial facilities and a hotel, and a three-dimensional indoor/outdoor plaza and park. Of the development
projects on this site, the commercial facilities are scheduled for completion in 2024.
Outside of the same city, sales of “Le JADE Sapporo Motomachi (Higashi Ward, Sapporo City; 39 units in total)”,which will be our first condominium in Sapporo City, Hokkaido Prefecture, launched in January 2022. In addition,
condominium development in Higashi Ward, Sapporo City, as well as other projects in Hokkaido is progressing
smoothly.
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.
5)

Efforts for Regional Revitalization Through Real Estate Development
In February 2022, we launched construction of the “Namiki no Mori City” development project, a mixed-use facilityof 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. This project will carry out
redevelopment to create a further bustling atmosphere around the station. For the residential building, the plan is
to develop a next-generation condominium that anticipates multi-generation residences under measures such as
establishing residential units with barrier-free specifications (55 units), as the highest seismic isolation structure
tower condominium in Iwaki City named “MID TOWER IWAKI.”In addition, in March 2022, we concluded a basic agreement with Omura City regarding the “Shin-Omura Ekimae
City Owned Land Development Project” in Omura City, Nagasaki Prefecture, together with Daiwa House Industry
Co., Ltd., and Izumi Co., Ltd., as a member of a business group composed of the three companies. As Shin-Omura
Station on the Nishi-Kyushu Shinkansen line is scheduled to open in September 2022, the project is to develop
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. The Company is scheduled to be engaged indevelopment of condominiums in two blocks.
In addition, we are opening "tonarie CREO" at "tonarie Tsukuba Square." a redevelopment project consisting ofcommercial facilities and offices in front of Tsukuba Station in Ibaraki Prefecture, in phases, and proceeding withtenant leasing activities, etc. toward the grand opening in the fall of 2022. On the land adjacent to it, we havedeveloped the condominium “Le JADE Tsukuba Station Front (218 units in total),” promoting development that
integrates “retail, office, and residential.”
Furthermore, in March 2022, we started development of a community-based shopping center “tonarie Hoshida(tentative name) (Katano City, Osaka Prefecture)” with Takara Leben Co., Ltd. The construction site is within the“Hoshida Station North Land Readjustment Project” (implementation area of approx. 26.4 ha) area, wheredevelopment of condominiums, detached houses, and industrial facilities such as business establishments isplanned in the vicinity, leading to the expectation for future prosperity. This facility is scheduled to open in the springof 2023 as the tenth facility in our commercial facility brand “tonarie” series.

6)

Promotion of Development of Various Condominiums in Rare Locations
Instead of simply expanding the number of units for sale, we have carried out various developments centered on
product planning that maximizes the value of purchased land. Recently, we are actively promoting development inrare locations in particular, such as central Tokyo and resort areas.
“OST Residence Karuizawa (Karuizawa Town, Kitasaku District, Nagano Prefecture; 33 units in total)” is a
development project in a location surrounded by the rich nature of Karuizawa and sold out in November 2021. In
addition, we have acquired two project sites in Hayama Town, Miura District, Kanagawa Prefecture, and are working
to develop condominiums that make the most of the rich natural environment such as Morito Beach.

-6-

Furthermore, we have been working on various projects in rare locations in central Tokyo by acquiring land forbusiness use ("Repro Shimbashi Project” (tentative name) in Minato Ward, Tokyo), which is located near JR
Shimbashi Station, in August 2021, eyeing rental and development business over the medium to long term, recently
launching development of multipurpose facility comprised of offices and a new condominium “Le JADE Cross
Chiyoda Jimbocho (Chiyoda Ward, Tokyo; 50 units in total)” with fixed-term leasehold on land adjacent to “TohoGakkai Main Building,” a historical building designated as an important property in forming the landscape of Chiyoda
Ward, Tokyo, and promoting the condominium sales business (partly with general leasehold) by acquiring land forbusiness use (“Minato-ku Nishiazabu 2-chome Project” (tentative name)), which is located in Nishiazabu, Minato
Ward, Tokyo.
7)

Implementation of Strategic M&As
As mentioned above, ES-CON JAPAN made Picasso and seven companies engaged in the real estate leasing andother businesses its subsidiaries in October 2021. Picasso Co., Ltd., founded in 1991 in Osaka City, along with its
group companies is engaged in the real estate leasing business mainly in the Kansai region. It owns numerous
outstanding revenue-generating assets such as rental apartments and office buildings. The acquisition ofsubsidiaries will rapidly progress the “transformation” of the revenue structure in the fourth medium-term
management plan by enhancing the real estate leasing business and securing stable revenues, and thus we believe
it will contribute dramatically to the sustained growth of the ES-CON JAPAN Group.
In addition, in January 2022, we made FUEL, whose businesses include managing online funds and providing
computer systems to crowdfunding businesses in accordance with the Act on Specified Joint Real Estate Venturesof Japan, a subsidiary, Taking this opportunity, the Group will be able to enhance the quality and quantity of its
existing businesses and expand its domain in terms of human resources, functions, and systems. It will also makepossible the rapid establishment of a system that will enable it to take on the challenge of new real estate digitaltransformation (DX) businesses (such as ST and CF(*1)) 5 to 10 years in the future.
We will continue to discuss positively with companies, etc. that have issues such as the absence of successors
and are thinking of business succession, and will continue to actively consider M&A projects that do not appear in
the market, with an aim to enhance the Group's businesses and expand its domain.
* 1 ST (Security Token) refers to investment management through the issuance of digital securities using blockchain technology.
CF (Crowdfunding) is a method of calling for funding from a large number of unspecified people via the Internet and raising funds
from those who agree with the purpose.

8)

Take on the Challenges of New Business Domains
We are promoting diversification of business contents by stating “growing new businesses into core businesses”
and “taking on the challenges of new business domains” in the fourth medium-term management plan. In January2022, we established the Strategic Business Division, and by this, we are accelerating efforts for future generations.
Specifically, we are also engaged in multiple businesses overseas while carefully assessing the impact of the
COVID-19 pandemic. In August 2021, the Company participated in Waikiki Galleria Tower, a retail and officecomplex value-add project located in Honolulu, Hawaii. The project is primarily being carried out by BlackSand
Capital, LLC, a real estate investment advisory company. In October 2021, we invested in Crow Holdings Realty
Partners IX, L.P., a real estate investment fund formed by Crow Holdings Capital, a real estate company in Texas,
U.S.A.
In addition, in March 2022, we invested in Agya Ventures Fund L.P., a fund that makes specialized investment inreal estate-related venture companies and managed by Agya Ventures Fund (GP) LLC of the U.S. Through thisinvestment, we will strengthen information collection of promising real estate tech(*2) companies overseas, and strive
to build partnerships and develop joint ventures with promising overseas real estate companies that have not yet
entered Japan. The purpose is to lead these into the further expansion of the Group's business domain and thecreation of innovation.
In December 2021, we entered into a basic agreement on the world’s most advanced housing development with
Serendix Inc., a company that aims to develop "Sphere,” the world's most advanced house using 3D printing
technology originating from Japan, and invested in the company. We will cooperate in research toward thedevelopment of Sphere and, in the future, apply the Sphere technology to fields other than housing such as stores,
offices, and warehouses.

-7-

In addition, ES-CON JAPAN has been promoting sales of permanent use rights of Ryomon, an urban-typecolumbarium in Minato Ward, Tokyo, since March 2021 in an effort to solve problems facing modern society suchas the fact that obtaining graves is considerably difficult, particularly in urban areas.
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.
* 2 Real estate tech indicates efforts to use technology to solve problems in the real estate industry and change traditional businesspractices.

9)

Initiatives for Public REIT and Private REIT Businesses
ESCON JAPAN REIT Investment Corporation (hereinafter “EJR”), conducted two public offerings to date, with
ESCON Asset Management Ltd. (hereinafter “EAM”), our consolidated subsidiary, as the company entrusted withasset management. The asset size steadily expanded, from 41.6 billion yen at the time of listing to 69.6 billion yen
after the capital increase. As the sponsor of EJR, the ES-CON JAPAN Group supports the enhancement of EJR’s
income and stable growth.
In addition to the public REIT business of EJR, we plan to form and commence operation of a private real estate
investment trust. We have formed private funds operating a total of 10 buildings in the metropolitan areas of Tokyo,
Kanagawa, and Saitama, respectively. We will be preparing for the formation of a private REIT by leveraging theGroup's expertise in condominium development.

10) Status of ESG Initiatives
One of our key management strategies is addressing social issues through promotion of ESG initiatives. The “ESG
Promotion Group,” comprising members selected from each department and headed by the director in charge of
the President's Office, and the “Health & Culture Fostering Team” for further promotion of health management, lead
ESG initiatives.
The contents of the most recent major initiatives are as follows.
1. 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 (*3) 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 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 six properties mentioned above are being operated and managed by our consolidated
subsidiary ES-CON PROPERTY Ltd.
*3

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

・Continuous and Proactive Development of Environmentally Friendly ZEH-compatible Housing
In November 2021, ES-CON JAPAN obtained ZEH(*4)-M Oriented certification for its new condominium, “LeJADE Yao Sakuragaoka” (Yao City, Osaka Prefecture; 72 units in total). The property features excellent heatinsulation performance and helps reduce annual primary energy consumption. This is our second ZEH
condominium following "Le JADE Okurayama” (Kohoku Ward, Yokohama City; 25 units in total), which won theGood Design Award for the fiscal year 2021.
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.
Moreover, in November 2020, ES-CON Home Co., Ltd. and ES-CON Craft Co., Ltd., which are consolidated
subsidiaries of ES-CON JAPAN, were registered for ZEH Builder Certification.
*4

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.

-8-

・Construction and Operation of “Techno Farm Fukuroi,” a Vertical Farm Utilizing Fully Artificial LightAs mentioned above, 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.
・Awarded Osaka Eco-Friendly Construction Award, Residential Section
In January 2022, the condominium “Le JADE Senri Aoyamadai (Suita City, Osaka Prefecture; 152 units in total)”
won the Osaka Eco-Friendly Construction Award, Residential Section for the fiscal year 2021 (hosted by Osaka
Prefecture and Osaka City). This was the first time for the Company to win the award which recognizes clientsand designers of construction projects that are exemplary in terms of environmental consideration of buildings
under the aim of promoting the spread of environmentally friendly buildings and raising awareness amongresidents of Osaka Prefecture.
2. Social (S)・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 March 2022 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 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 providing monetary donations to the Kyoto University "iPS Cell Research Fund" tosupport activities realizing provision of early and inexpensive treatment using iPS cells for people suffering from
diseases and accidents.
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.
・Contribution to Sports Promotion
In April 2021, we invested in Ryukyu Football Club Co., Ltd. (hereinafter “Ryukyu FC”) which operates FC
Ryukyu, a professional soccer team. With this investment, we will contribute to the local community throughsports promotion by securing a foothold for the creation of business opportunities in Okinawa as well as
supporting Ryukyu FC‘s regional revitalization activities in Okinawa Prefecture.
3. Governance (G)・ Establishment of Voluntary Committee on Nomination and Remuneration of Directors
In January 2020, we established the “Nomination and Remuneration Advisory Committee” with the aim tostrengthen 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. We have secured impartiality andtransparency concerning election and remuneration of directors.
・ Nurturing Successors
We also launched initiatives for a succession plan called the candidate successor system. We appointed a totalof eight employed executive officers in January 2022.
・ Diversity of the Board of Directors
In order to secure diversity of the board of directors, four independent directors (of which, one is female), whichis half of the number of directors, are appointed. In addition, we have created a diverse board composition of acertified public accountant, tax accountant and attorney, a director experienced in corporate management and asecurities analyst.
・ Disclosure Based on the Framework of the Task Force on Climate-related Financial Information Disclosures(TCFD)We regard climate change issues as one of our priority management strategies, and the ESG Promotion Group
members are working as one to disclose financial information based on the TCFD framework.

-9-After carrying out capacity building for management and all heads of departments and divisions and sharing
it as an important company-wide issue, we have discussed the risks and opportunities associated with climatechange in the condominium sales business, which is the main business of the Group, and the commercial
facilities/revenue-generating real estate management business, mainly among heads of departments anddivisions and ESG Promotion Group members.
We are currently working on selecting our scenarios based on important risks and opportunities in ourbusinesses, and we will disclose the assessment of the financial impact based on our scenarios targeting June
this year while planning to incorporate such as an important factor in future business strategies.
<Implementation schedule>• December 2021
Implement capacity building with an aim to improve the knowledge related to TCFD
• March 2022
Assess the importance of business risks and opportunities• April 2022
Select external scenarios and set ES-CON JAPAN’s scenarios• June 2022
Disclose assessment of the financial impacts of important risks and opportunities on climate change on ES-CON
JAPAN’s business (planned)
4. Other
We have been participating in Global ESG, an annual benchmark assessment measuring ESG considerationin the real estate sector, every year since 2018 with an aim to continuously improve the assessment results.
In October 2021, we acquired “2 Stars” in the GRESB Rating, a five-grade evaluation system that reflects theapplicant’s relative evaluation based on the overall score, for efforts on environmental consideration andsustainability in the “Development Benchmark” (applicable period: January 1, 2020 to December 31, 2020). In
addition, we acquired the “Green Star”(*5) rating for three consecutive years.
*5

The "Green Star" in the “Development Benchmark” is awarded to participants who score 50% or more in the absoluteassessment based on the two main points, “Management Component” and “Development Component.”

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 progress in condominium sales.
In the condominium sales business, we have commenced selling of new sales projects including "Le JADE
Sapporo Motomachi" (Higashi Ward, Sapporo City; 39 units in total), "Le JADE Hokkaido Ballpark" (Kitahiroshima
City, Hokkaido Prefecture; 118 units in total), "Le JADE Shitennoji Yuhigaoka" (Tennoji Ward, Osaka City; 52 units
in total). Four properties, namely “Le JADE Nishinomiya Kitaguchi Hinokuchicho” (Nishinomiya City, Hyogo
Prefecture; 94 units in total), “Le JADE Tennoji Katsuyama” (Tennoji Ward, Osaka City; 39 units in total), “Le JADE
Senri Furuedai” (Suita City, Osaka Prefecture; 71 units in total) and “Le JADE Suma Myohoji Ekimae” (Suma Ward,
Kobe City; 40 units in total) were sold out. Two properties, namely “Le JADE Uehonmachi” (Tennoji Ward, Osaka
City; 56 units in total) and “Le JADE Bio Makuhari Hongo” (Hanamigawa Ward, Chiba City; 70 units in total), which
are under construction, have sold out.
In addition, we are steadily expanding our business area, including the progress of the condominium business in
Hokkaido and the development of our first condominium in Kyushu, “Le JIAS Ohashi (Minami Ward, Fukuoka City;
140 units in total).”In the real estate leasing business, we made Picasso and seven companies our subsidiaries as mentioned above,
thereby securing stable earnings by strengthening the leasing business.
In other areas, a pop-up store of “MUJI” in “tonarie Minami-Senri Annex” opened in November 2021 will boast thelargest sales floor area in the Kansai region in April 2022 and the development of aforementioned community-based
shopping center “tonarie Hoshida (tentative name)” will launch. As such, we are working to secure stable rent
income and improve the asset value of our commercial facilities.
In the real estate planning agency and consulting business, we have started selling permanent use rights forcolumbaria. Leveraging our strength in planning, we are focusing on non-asset, high-margin business, such as thecommissioning business and the planning agency and consulting business.
- 10 -

As a result, operating results for the first quarter were net sales of 12,706 million yen (up 2.2%), operating incomeof 863 million yen (down 28.5%), ordinary income of 582 million yen (down 36.7%) and profit attributable to ownersof parent of 235 million yen (down 63.6%), all compared with the same period of the previous year.
Operating results by segment are as follows (comparisons are with the same period of the previous year).
1)

Real Estate Sales BusinessIn the real estate sales business, activities including selling of condominiums and revenue-generating real estate
resulted in net sales of 9,854 million yen (down 8.1%) and segment income of 1,286 million yen (down 26.5%).
2)

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 2,670 million yen (up 66.9%) and segment income of 1,056 million yen (up 53.7%).
3) 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 181 million yen (up 59.6%) and segment loss of 4 million yen(segment loss of 6 million yen in the same period of the previous year).
(3)

Explanation of Financial Position
Assets at the end of the first quarter increased by 23,065 million yen compared with the end of the previous fiscal
year to 275,837 million yen. This was mainly attributable to cash and deposits, inventories and non-current assets
increasing by 879 million yen, 21,053 million yen and 1,321 million yen, respectively.
Liabilities increased by 26,593 million yen compared with the end of the previous fiscal year to 216,737 million yen.
This was mainly attributable to long-term loans payable and short-term loans payable increasing by 26,099 million
yen.
Net assets decreased by 3,528 million yen compared with the end of the previous fiscal year to 59,100 million yen.
This was mainly attributable to cash dividends paid of 3,669 million yen, while recording profit attributable to ownersof parent of 235 million yen. As a result, the equity ratio was 21.5% (24.8% at the end of the previous fiscal year).

(4)

Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information
The consolidated earnings forecast remains unchanged from the forecast announced on January 27, 2022.
In addition, we are promoting our business under the fourth medium-term management plan, which is for the threeyear period from the fiscal year ended December 2021 through the fiscal year ending December 2023. The
management targets for the fiscal year ending December 2023, which is the final fiscal year of the fourth mediumterm management plan, have been partially revised, and details such as the contents of the plan are as presented
earlier in this document.

- 11 -

2.

Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Unit: million yen)First quarter offiscal year ending
Dec. 2022(as of Mar. 31, 2022)

Fiscal year ended
Dec. 2021(as of Dec. 31, 2021)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
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- 12 -

33,667835

34,547
－

－

858

7,541
123,419
11,396(0)
176,859

6,983
145,030
11,128(0)
198,547

23,312(1,516)
21,79530,840
387
(244)
142
52,77823,662(1,806)
21,85632,106
396
(259)
137
54,100

8,217
57
8,275

8,087
94
8,182

14,814(37)
14,77675,83014,972(37)
14,934
77,216

81
81
252,77172
72
275,837

(Unit: million yen)First quarter offiscal year ending
Dec. 2022(as of Mar. 31, 2022)

Fiscal year ended
Dec. 2021(as of Dec. 31, 2021)
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- 13 -

3,589
82,912
1,653
14,368102,523

5,200
88,698122
16,377110,398

76,533135
57
270
10,622
87,619190,143

95,235135
57
270
10,639106,338
216,737

16,51912,39634,745(1,216)62,445

16,51912,39831,312(1,212)59,017

371

285

(36)

(39)

334

246

0
(152)
62,628
252,7710(163)
59,100275,837

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income(Quarterly Consolidated Statement of Income)First quarter of fiscal year ending Dec. 2021

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
Share of profit of entities accounted for using
equity method
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
Total extraordinary income
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

First quarter offiscal year ended
Dec. 2021(from Jan. 1, 2021
to Mar. 31, 2021)
12,436
9,080
3,356
2,149
1,207

(Unit: million yen)First quarter offiscal year ending
Dec. 2022(from Jan. 1, 2022
to Mar. 31, 2022)
12,706
9,428
3,277
2,414
863

3
0
6
53

0
0
23
129

－

5

2
65

2
162

309
－

433
9

23

－

20
352
920

0
442
582

0
0
920
226
116
342
577
(70)
647

0
0
582
186
172
358
224
(11)
235

- 14 -

(Quarterly Consolidated Statement of Comprehensive Income)First quarter of fiscal year ending December 2022

577

(Unit: million yen)First quarter offiscal year ending
Dec. 2022(from Jan. 1, 2022
to Mar. 31, 2022)
224

105

(85)

(8)

(24)

13

21

110
688

(88)
135

758

146

(70)

(11)

First quarter offiscal year ended
Dec. 2021(from Jan. 1, 2021
to Mar. 31, 2021)
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- 15 -

(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.
(Changes in Accounting Policies)(Application of accounting standard for revenue recognition, etc.)“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020; hereinafter "Revenue
Recognition Accounting Standard"), etc. have been applied from the beginning of the first quarter of the fiscal year
ending December 2022, and we decided to as recognize the amount expected to be received in exchange for goods
or services at the time when control of promised goods or services is transferred to customers. As a result, although
the total amount of consideration received from customers was previously recognized as revenue in some transactions,
we decided to recognize the net amount arrived at by subtracting the amount paid to the supplier from the amountreceived from the customer as revenue for transactions in which the company or its domestic consolidated subsidiaries
play the role of agents in provision of goods or services to customers.
Regarding the application of Revenue Recognition Accounting Standard, etc., in accordance with the transitional
treatment stipulated in the proviso of paragraph 84 of the Revenue Recognition Accounting Standard, the cumulative
effects of retrospective application of the new accounting policy, assuming it has been applied to periods prior to thebeginning of the first quarter of the fiscal year ending December 2022, has been added to or subtracted from retained
earnings at the beginning of the first quarter of the fiscal year ending December 2022, and the new accounting policy
is applied from said balance. As a result, there was no impact on the balance of retained earnings at the beginning of
the first quarter of the fiscal year ending December 2022. Furthermore, the impact of the application of the accounting
standard on the quarterly consolidated financial statements is minimal.
Due to the application of Revenue Recognition Accounting Standard, etc., "Notes and accounts receivable - trade"indicated under "Current assets" in the consolidated balance sheet for the previous fiscal year ended December 2021
have been decided to be included in "Notes and accounts receivable - trade and contract assets" from the first quarterof the fiscal year ending December 2022. In accordance with the transitional treatment stipulated in paragraph 89-2 ofthe Revenue Recognition Accounting Standard, figures for the previous fiscal year have not been reclassified inaccordance with the new approach to presentation. Furthermore, in accordance with the transitional treatment
stipulated in paragraph 28-15 of "Accounting Standard for Quarterly Financial Reporting" (ASBJ Statement No. 12,
March 31, 2020), information on the breakdown of revenue generated from contracts with customers for the first quarterof the fiscal year ended December 2021 is not shown.
(Application of accounting standard for fair value measurement., etc.)“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019; hereinafter “Fair Value
Measurement Accounting Standard”), etc., have been applied since the beginning of the first quarter of the fiscal year
ending December 2022. In accordance with the transitional treatment stipulated in paragraph 19 of the Fair Value
Measurement Accounting Standard and paragraph 44-2 of “Accounting Standard for Financial Instruments” (ASBJ
Statement No. 10, July 4, 2019), we decided to apply the new accounting policies set forth by the Fair Value
Measurement Accounting Standard, etc. in the future. There was no impact on the quarterly consolidated financial
statements.
(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 on real estate owned, etc.

- 16 -

(Board Benefit Trust for Executives)(1) Overview of the Transaction
1) We passed a resolution to introduce a 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 Regular General Meeting of Shareholders held on March 20, 2015,
with an aim to further clarify the relationship between remuneration for directors (excluding directors who are
Audit and Supervisory Committee Members, external directors and non-executive directors) and (authorized)
executive managing officers (hereinafter the “Directors, etc.” 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 increasing awareness ofcontribution to the medium- to long-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 the Regular General Meetings of Shareholders held on March 26, 2020, and March 26, 2021.
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. throughthe trust in accordance with the operating results achievement rate, etc. pursuant to the officer stock ownershipregulations set by ES-CON JAPAN. The shares of ES-CON JAPAN will be granted to the Director, etc. of ESCON 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 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 Regular 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 Regular 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 ending December 2022, and each subsequent period of three fiscal years): 330 million
yen・Resolution passed at the Regular 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 ending 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 the bookvalue in the trust (excluding the amount of incidental expenses). The book value of the treasury shares and thenumber of shares are 347 million yen and 851,000 shares for the fiscal year ended December 2021, and 347
million yen and 851,000 shares for the first quarter of the fiscal year ending December 2022.
(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”; Thetrust established based on the trust agreement concluded with Resona Bank, Limited for the System is referred to
as “Share-Based Payment ESOP trust” ) at the Regular General Meeting of Shareholders held on March 20, 2015,
with an aim to further enhance the benefit program for its employees and raise their motivation and morale for
improving the share price and operating results.
- 17 -

The System is a system by which ES-CON JAPAN contributes money to a trust with the trust acquiring sharesof ES-CON JAPAN with said money as capital, and shares of ES-CON JAPAN are granted to 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 the bookvalue in the trust (excluding the amount of incidental expenses). The book value of the treasury shares and thenumber of shares is 57 million yen and 225,700 shares for the fiscal year ended December 2021, and 57 million
yen and 224,500 shares for the first quarter of the fiscal year ending December 2022.

- 18 -

(Segment Information, Etc.)[Segment Information]
I. First quarter of fiscal year ended December 2021 (from January 1, 2021 to March 31, 2021)
1. Information on Net Sales and Income or Loss Amounts by Reporting Segment(Unit: million yen)Amount onquarterly
Reconciliation consolidated
statement of(Note 1)income(Note 2)

Reporting segment
Real estatesales
business

Real estateleasingbusiness

Real estateplanning agency
and consulting
business

10,723

1,599

113

12,436－

12,436

－

－

－

－

－

－

10,723

1,599

113

12,436－

12,436

1,750

687

(6)

2,430

(1,223)

1,207

Total

Net sales
Net sales toexternal customers
Intersegment net
sales or transfers
Total
Segment income(loss)(Note 1) The reconciliation of segment income or segment loss of -1,223 million yen is corporate expenses not attributable
to any reporting segment. Corporate expenses are general and administrative expenses not attributable toreporting segments.
(Note 2) Segment income or segment loss is reconciled with operating income on the quarterly consolidated statement ofincome.
2. Information on Impairment Loss on Non-Current Assets or Goodwill, Etc. by Reporting Segment
Not applicable.
II. First quarter of fiscal year ending December 2022 (from January 1, 2022 to March 31, 2022)
1. Information on Net Sales and Income or Loss Amounts by Reporting Segment and Information on Breakdown of
Revenue(Unit: million yen)Amount onquarterly
Reconciliation consolidated
statement of(Note 1)income(Note 2)

Reporting segment
Real estatesales
business

Real estateleasingbusiness

Real estateplanning agency
and consulting
business

9,854

228

181

10,265－

10,265

－

2,441

－

2,441

－

2,441

9,854

2,670

181

12,706－

12,706

－

－

－

－

－

－

9,854

2,670

181

12,706－

12,706

1,286

1,056

(4)

2,338

(1,474)

863

Total

Net sales
Revenue fromcontracts withcustomers
Other revenue(Note 3)
Net sales toexternal customers
Intersegment net
sales or transfers
Total
Segment income(loss)(Note 1) The reconciliation of segment income or segment loss of -1,474 million yen is corporate expenses not attributable
to any reporting segment. Corporate expenses are general and administrative expenses not attributable toreporting segments.
(Note 2) Segment income or segment loss is reconciled with operating income on the quarterly consolidated statement ofincome.
(Note 3) "Other revenue" is rental income, etc. based on "Accounting Standard for Lease Transactions."- 19 -

2. Information on Impairment Loss on Non-Current Assets or Goodwill, Etc. by Reporting Segment
Not applicable.
(Significant Subsequent Events)
Not applicable.

- 20 -

3.

Other
Status of Contracts and Sales
The performance of contracts in the real estate sales business for the first quarter is as follows:First quarter of fiscal year ending Dec. 2022
(from Jan. 1, 2022 to Mar. 31, 2022)
Classification

Contract amount during the period
Number of units(units)Balance of contracts at the end of the period

Amount(million yen)

Number of units(units)Amount(million yen)

Mid- to high-risehousing, etc.

290

14,435903

53,761

Other

－

1,292

－

17,310290

15,728903

71,071Total

The main performance of sales by segment for the first quarter is as follows:First quarter of fiscal year ending Dec. 2022
(from Jan. 1, 2022 to Mar. 31, 2022)

Name of segment

Number of units(units)Property nameReal estate sales businessCondominiums

221

8,742

Tsuruma station front

－

323

Other

－

789

221

9,854

Subtotal
Real estate leasing business

2,670

Real estate planning agency and181

consulting business
Total(Note)

Amount(million yen)

There are no transactions between segments.

- 21 -

12,706