Summary of Accounts for First Three Quarters of Fiscal Year Ending December 2021
(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:October 26, 2021
Listing exchange: Tokyo Stock Exchange
URL:
https://www.es-conjapan.co.jp/english/
President & Representative Director
Senior Managing Director TEL: 06 (6223) 8055
October 26, 2021－
No
No

(Amounts are rounded down to the nearest million yen
Consolidated results for first three quarters of fiscal year ending December 2021
(from January 1, 2021, to September 30, 2021)(1) Consolidated operating results(% figures show the rate of increase (decrease) compared with the same period of the previous year)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
million% million yen% million yen% million yen%
yenFirst three quarters of fiscal
43,620(32.8)
4,849(57.0)
4,015(61.7)
2,907(59.9)
year ending Dec.2021
First three quarters of fiscal
64,92741.4
11,271
31.3
10,475
35.6
7,243
37.9
year ended Dec. 2020
Note: Comprehensive income
First three quarters of fiscal
First three quarters of fiscal
year ending Dec. 2021:
2,680 million yen [-62.0%] year ended Dec. 2020:
7,047 million yen [30.1%]
1First three quarters of fiscal
year ending Dec. 2021
First three quarters of fiscal
year ended Dec. 2020

Basicearnings per shareyen

Dilutedearnings per share
yen

33.80

33.71

105.84105.73(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Book value per share
million yen
million yen%
yenFirst three quarters of fiscal
186,739
59,16231.9
625.28year ending Dec. 2021
Fiscal year ended Dec.
149,423
38,62725.8
563.072020
Reference: Equity
First three quarters of fiscal
Fiscal year ended
year ending Dec. 2021:
59,529 million yen
Dec. 2020:
38,589 million yen
2.

Dividends

Fiscal year ended Dec. 2020
Fiscal year ending Dec. 2021

End of first
End of second
quarterquarter
yen
yen
0.00
－
－
0.00

Fiscal year ending Dec. 2021
(Forecast)(Note) Revisions from latest dividends forecast: None

Annual dividend
End of third
quarteryen－－

Year-end

Total

yen
38.00

yen
38.00

38.00

38.00

3.

Consolidated earnings forecast for fiscal year ending December 2021 (from January 1, 2021, to December 31, 2021)(% figures for the full fiscal year show the rate of increase (decrease) compared with the previous period)
Profit attributable to
Basic
Net sales
Operating income Ordinary income
owners of parent earnings per share
million yen% million yen% million yen% million yen%
yen
Full fiscal year

80,0003.5

10,800 (11.5)

9,400(15.8)

6,200 (19.1)

70.21(Note) Revisions from latest earnings forecast: None
* 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: － companies (Company name) －－ companies (Company name) －Excluded:None(2) Application of accounting treatments specific to preparation of quarterly consolidated financial statements:(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)
First three quarters
1) Number of shares issued and outstanding
98,580,887
of fiscal year(including treasury shares) at end of period
sharesending Dec. 2021
First three quarters
3,377,100
2) Number of treasury shares at end of period of fiscal year
sharesending Dec. 2021
First three quarters
3) Average number of shares during period
86,001,808
of fiscal year
(cumulative total of first three quarters)
sharesending Dec. 2021

None

None
None
None
None

Fiscal year ended
Dec. 2020

71,961,887
sharesFiscal year ended
Dec. 2020

3,428,400
sharesFirst three quarters
68,438,208
of fiscal year
sharesended Dec. 2020

Note: The number of treasury shares at end of period includes shares of ES-CON JAPAN held in a share-based
payment benefits trust for directors and a share-based payment benefits-type ESOP trust (first threequarters of fiscal year ending December 2021: 851,000 shares in the share-based payment benefits trust for
directors and 225,800 shares in the share-based payment benefits-type ESOP trust). In the calculation of
the average number of shares during period (cumulative total of first three quarters), the treasury shares tobe subtracted in that calculation includes shares of ES-CON JAPAN held in the share-based payment
benefits trust for directors and the share-based payment benefits-type ESOP trust (first three quarters offiscal year ending December 2021: 1,079,482 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 10.

○ 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 ............................................................................................................................. 10(4) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information....................................... 10
2. Quarterly Consolidated Financial Statements and Key Notes ....................................................................................... 11(1) Quarterly Consolidated Balance Sheet .................................................................................................................... 11(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income .. 13(Quarterly Consolidated Statement of Income) ............................................................................................................ 13(Quarterly Consolidated Statement of Comprehensive Income) .................................................................................. 14(3) Notes to Quarterly Consolidated Financial Statements ........................................................................................... 15(Notes on Going Concern Assumption) ....................................................................................................................... 15(Notes on Substantial Changes in the Amount of Shareholders’ Equity) ..................................................................... 15(Change in Scope of Consolidation or Scope of Equity Method Application) ............................................................... 15(Additional Information) ................................................................................................................................................ 15(Board Benefit Trust for Executives) ............................................................................................................................ 15(Segment Information, Etc.) ......................................................................................................................................... 18(Significant Subsequent Events) .................................................................................................................................. 19
3. Other ............................................................................................................................................................................. 20
Status of Contracts and Sales ....................................................................................................................................... 20- 1 -Attachment
1. Qualitative Information on Quarterly Results(1) Business Risks
There are no business risks that newly arose in the first three quarters.
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, despite being impacted by the resurgence of COVID-19, the Japanese economy saw somemovement toward recovery, such as the effects of various policies and improvement in overseas economies, alongwith the steady progress in the vaccination program. The outlook is that recovery of personal consumption, which saw
repeated ups and downs, will be clearly seen due to the lifting of the state of emergency, and thus further movement
toward economic recovery can be expected. On the other hand, careful attention should be paid to the impact of thestatus of infection in Japan and abroad, mounting downward risks from the impact through supply chains, andfluctuation of the financial and capital market; and the circumstances allow for no optimism.
In the real estate industry in which the ES-CON JAPAN Group operates, the real estate market showed relatively
stable performance with no substantial deterioration as the policies and measures related to tackling COVID-19 andmonetary easing measures continued. However, it is necessary to carefully watch the impact of changes in consumer
spending on the Japanese economy and overseas economies as well as the real estate market amid gradualresumption of social and economic activities alongside the preventive measures against the spread of COVID-19
taken across the country and the progress of the vaccination program.
Despite the difficult business environment described above, we made strategic moves towards expansion of new
business fields and sustainable growth by taking the current situation as an opportunity to develop our business.
As a measure to increase capital for proactive business development, we procured funds amounting to 20.4 billion
yen by implementing capital increase through third-party allotment with Chubu Electric Power Co., Inc. (hereinafter“Chubu Electric Power”) as the allotee on April 5, 2021, and ES-CON JAPAN became a consolidated subsidiary of
Chubu Electric Power. We assessed that becoming a consolidated subsidiary of Chubu Electric Power, which boasts
strong corporate credit standing, will allow for diversification of fundraising methods and reduction of fundraising costs
by improving our creditworthiness. The move will also enable participation in large-scale urban-development projects
through further business partnerships with the Chubu Electric Power Group. This will make it possible for us to further
increase our corporate value by stabilizing and expanding our earnings base, enhancing management stability, andso forth.
In conjunction, in February 2021, we formulated “IDEAL to REAL 2023,” the fourth medium-term management plan,for the three-year period from the fiscal year ending December 2021 through the fiscal year ending December 2023.
The new medium-term management plan sets “Establishing business foundations able to withstand unexpectedchanges in economic conditions” and “Simultaneously changing the revenue structure and expanding businessdomains” as management strategies.
In August 2021, we concluded a share transfer agreement to acquire all shares of Picasso Co., Ltd., which owns
numerous outstanding revenue-generating properties, and its seven group companies in order to rapidly move ahead
with the strategy of “changing the revenue structure” in the new medium-term management plan.
After becoming a subsidiary of Chubu Electric Power, synergy has been demonstrated not only in increased businesscollaboration with the Chubu Electric Power Group but also in receiving a certain degree of recognition from external
agencies, financial institutions, etc. Specifically, we acquired credit ratings of “A-” (stable) from Rating and Investment
Information, Inc. and “A” (stable) from Japan Credit Rating Agency, Ltd. in July 2021, and were newly selected as aconstituent of JPX-Nikkei Index 400 for FY2021 (August 31, 2021 to August 30, 2022).
In addition, we concluded a commitment line agreement with The Nishi-Nippon City Bank, Ltd. with a maximum
borrowing amount of 10.0 billion yen in September 2021 for the purpose of preparing for capital needs to purchasereal estate for business development and conducting more flexible and stable fund procurement.
Concerning the transition to new market segments scheduled for April 4, 2022, at Tokyo Stock Exchange, Inc., wehave received the result of the preliminary judgement stating that we meet the continued listing criteria of the Prime
Market, and are now moving ahead with the prescribed procedure for the transition.
We will continue to work to enhance corporate value through sustainable growth.

- 2 -The details of the aforementioned fourth medium-term management plan is as follows.
1)

Overview of Fourth Medium-Term Management Plan
1. Basic Management Strategy Policies
1) Establishing business foundations able to withstand unexpected changes in economic conditions
Establishing business and financial standings that would be sound and enable us to maintain our fundraising abilities under any economic condition
2) Simultaneously changing the revenue structure and expanding business domains
Transforming the revenue structure from one based on flows to one based on stock by strengthening thereal estate leasing business while at the same time realizing business diversification and expanding
business territories
2. Basic Policy: Transformation and Rapid ProgressTransformation
・ Proactive investment in long-term revenue-generating real estate and improving the structure of the・balance sheet
Transforming the focus of management from flows to stock

Rapid Progress
・ Developing synergies in 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
1) Transformation to a structure of sustained and stable revenues2) Stable growth in existing core businesses through business diversification and area strategies3) Growing new businesses into core businesses through business diversification and area strategies
4) Taking on the challenges of new business domains
5) Enhancing synergies within the ES-CON JAPAN Group6) Expanding bases, primarily in the five largest urban areas
7) Enhancing synergies within the Chubu Electric Power Group8) Promoting ESG initiatives
4. Performance Plan
Fiscal year ended
Dec. 2020

Fiscal year ending
Dec. 2021

Net sales

77,308First threequarters
Actual
43,620Operating income

12,202

4,849

Actual

5. Management Targets

Fiscal year ended
Dec. 2020
ActualFull fiscal year
Plan

Fiscal year
ending Dec.
2022

(Unit: million yen)
Fiscal year
ending Dec.
2023

Plan

Plan

80,00098,000110,000

10,80014,00016,000Fiscal year ending
Dec. 2021
Plan

Fiscal year ending
Dec. 2022
Plan

Fiscal year ending
Dec. 2023
Plan

Share of profits from leasing *1

14.2%

23.0%

24.0%

26.0%

Return on equity (ROE)

21.2%

12.0%

13.0%

13.0%

Return on invested capital(ROIC) *2

6.6%

4.0%

4.0%

4.0%

Equity ratio

25.8%

29.0%

26.0%

23.0%

Share of long-term
earnings from real estate *3

9.5%

12.0%

14.0%

18.0%

Net assets

38.6 billion yen

61.0 billion yen- 3 -66.0 billion yen

72.0 billion yen

(Note 1)(Note 2)
(Note 3)

Share of profits from leasing:
Leasing segment profits ÷ Segment total profits (not including adjustments)
Return on invested capital (ROIC):
After-tax operating income ÷ (Shareholders’ equity + Interest-bearing liabilities)
Share of long-term earnings from real estate:
Real estate generating leasing revenues recorded as non-current assets ÷ Net assets

6. Investment Plan
Fiscal year ending
Dec. 2021
Plan
Investment in revenuegenerating real estate
Investment in otherdevelopment
Gross investment

Fiscal year ending
Dec. 2022
Plan

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

30,00040,00060,000130,000

25,00030,00035,00090,00055,00070,00095,000220,000

- 4 -

2)

Status of Demonstration of Synergy Effect with Chubu Electric Power Group
Since the conclusion of a capital and business partnership agreement with Chubu Electric Power in August 2018,
we have positioned the Chubu area as a core business area comparable to the Tokyo metropolitan area and theKansai area, and established a Nagoya branch in March 2019. Following the establishment, we have alreadyacquired land for nine new projects in the Chubu area.
Furthermore, as joint projects with Chuden Real Estate Co., Inc. (hereinafter “Chuden Real Estate”), we launched
condominium/commercial development projects in Shirakabe, Higashi Ward, Nagoya City; Ichinomiya City, Aichi
Prefecture; Kakegawa City, Shizuoka Prefecture; and Suita City, Osaka Prefecture. In particular, “Le JADE
Kakegawa Ekimae” (Kakegawa City, Shizuoka Prefecture; 83 units in total) were contracted to sell out in fourmonths after the start of sale, steadily demonstrating synergy.
In June 2021, a consortium of businesses led by Chubu Electric Power of which ES-CON JAPAN is a member
was selected as the preferred candidate contractor in bidding organized by Aichi Prefecture and the city of
Nagoya. The winning bidder will operate the site of the 20th Asian Games Aichi-Nagoya 2026 Athletes’ Village
after the games. In said business, the vision targets a next-generation approach to community development
whereby diverse people connect with and help each other to promote happiness and find solutions to various
issues facing society. Plans call for ES-CON JAPAN to develop retail complexes as part of this community
development project.
Furthermore, in July 2021, we, along with Chubu Electric Power and Spread Co., Ltd. (hereinafter “Spread”),
established TSUNAGU Community Farm LLC (hereinafter the “new company”), which will construct and operatevertical farms. The new company plans to start construction of Techno Farm Fukuroi in October 2021 at the
project site in Fukuroi City, Shizuoka Prefecture, which will be the world’s largest vertical farm utilizing fully
artificial light and capable of producing 10 tons of lettuce per day, with an aim to launch production in January
2024. With the integration of Chubu Electric Power’s capital and knowledge on energy management and ES-CON
JAPAN’s development know-how, we intend to make efforts for decarbonization and reduce costs as well as
contribute to the production of cheaper vegetables at plants as well as realize efficient and stable production of“safe and clean” lettuce in collaboration with Spread that has a track record in cultivation and logistics.
Now a consolidated subsidiary of Chubu Electric Power, we intend to proactively work on large-scale urban
development and realization of a “new form of community” not only in the Chubu area but expanding to acrossJapan by continuously strengthening the partnership with the Chubu Electric Power Group.

3)

Progress of Projects under Hokkaido Ballpark Concept
With regard to the naming rights for “ES CON FIELD HOKKAIDO,” the new ballpark of the Hokkaido Nippon-Ham
Fighters planned to be established and opened in 2023 in Kitahiroshima City, Hokkaido, we concluded a ballpark
naming rights agreement with Hokkaido Nippon-Ham Fighters Baseball Club Co., Ltd. and Fighters Sports &Entertainment Co., Ltd. in January 2020.
The area surrounding the new ballpark is a large-scale development area for HOKKAIDO BALLPARK F VILLAGE(total development area: approx. 36.7 ha, hereinafter “F VILLAGE”) with construction of a new station alsoplanned. We are participating in urban development of which the centerpiece will be the new stadium, engaging in
the development of various real estate on the land of approximately 9,400 m2 adjoining the ballpark.
In August 2021, we made public announcement on plans to open our first new condominium project in Hokkaido,
Le JADE Hokkaido Ballpark, as part of the F VILLAGE urban development project, on a site that offers proximity
to the new stadium and Hokkaido’s rich natural heritage. We will deliver a new way of life (“living in a ballpark”) asa “life developer” who develops the lives of those who live there, thinking of their happiness.
In addition, we concluded a partnership agreement with the city of Kitahiroshima for the JR Kitahiroshima Station“Train Station West Exit Area Revitalization Project” in Kitahiroshima City, Hokkaido, in March 2021. Expectations
are increasingly building for JR Kitahiroshima Station as a key access point to the ballpark being situated between
JR Sapporo Station and New Chitose Airport Station in a highly convenient location approximately 20 minutes
from the airport and approximately 16 minutes from Sapporo by train. We will engage in not only development of
the ballpark area but also development of the area surrounding Kitahiroshima Station, the gateway to such, andthereby promote community-based urban development that would create bustle throughout Kitahiroshima City.
Continuing to also support sports, cultural promotion, etc., we will contribute to revitalization and development of
the entire Hokkaido area for the happiness of its residents

- 5 -

4)

Status of Implementation of Growth Strategy of ESCON JAPAN REIT Investment Corporation
In August 2021, ESCON JAPAN REIT Investment Corporation (hereinafter “EJR”) conducted the second public
offering, following the first in February 2020, with ESCON Asset Management Ltd. (hereinafter “EAM”), a
consolidated subsidiary, as the company entrusted with asset management, and steadily expanded its asset size
from 41.6 billion yen at the time of listing to 69.6 billion yen after the capital increase. As the sponsor of EJR, theES-CON JAPAN Group transferred the following seven properties and has supported the enhancement of EJR’s
income and stable growth.
The details of the transferred assets are as follows, with the total transfer price of 11,947 million yen the total gainfrom transfer of 2,472 million yen.
Site area
Transfer price
LocationType(total floor area)(million yen)
(1) Kumamoto-shi, Kumamoto Prefecture Commercial facility
28,546.00 m2
4,600(Suroy Mall Nagamine)(land, building)(13,130.23 m2)
2(2) Hatsukaichi-shi, Hiroshima Prefecture Commercial facility
21,083.66 m
3,950(Fuji Grand Natalie)(land, building)(28,543.96 m2)
Commercial facility(3) Sapporo-shi, Hokkaido
8,154.00 m2
1,300(land)
Commercial facility(4) Neyagawa-shi, Osaka Prefecture
2,743.65 m2
702(land)
Commercial facility(5) Amagasaki-shi, Hyogo Prefecture
1,491.47 m2
565(land)
Commercial facility(6) Kobe-shi, Hyogo Prefecture
2,634.83 m2
530(land)
Commercial facility(7) Hikone-shi, Shiga Prefecture
2,012.30 m2
300(land)
Total

11,947

5)

Initiatives for Formation of Private REIT
In addition to the public REIT business as in EJR, we plan to form and commence operation of a private realestate investment corporation (hereinafter “ESCON JAPAN Private REIT (tentative name)” with EAM also as thecompany entrusted with asset management. Starting with the rental apartments in Higashiyamato City, Tokyo, andFujisawa City, Kanagawa Prefecture, in 2020, we have formed private funds operating a total of 10 buildings in theTokyo metropolitan area of Tokyo, Kanagawa and Saitama prefectures. Furthermore, we are not only currently
developing a rental apartment in Yamato City, Kanagawa Prefecture, but also acquired a rental apartment “Sol
Plaza Sakai” (Sakai Ward, Sakai City) in September 2021 for the purpose of making them assets to be managed
under ESCON JAPAN Private REIT (tentative name).

6)

Acquisition of Shares of Eight Companies Including Picasso Co., Ltd. (Making Them Our Subsidiaries)
We plan to acquire all shares of Picasso Co., Ltd. (hereinafter “Picasso”), which is involved in the real estateleasing and other businesses, as well as its seven group companies (hereinafter the “Group companies”), making
all these companies our subsidiaries, on October 29, 2021.
Founded in the city of Osaka in 1991, Picasso, alongside the Group companies, is active in real estate leasing
chiefly in the Kansai area. It owns numerous outstanding revenue-generating properties, including rental
apartments and office buildings.
This acquisition of subsidiaries will rapidly progress the abovementioned basic management strategic policy of“Transforming the focus from flows to stock” in the fourth medium-term management plan by enhancing theleasing business and securing stable revenues, and thus we believe it will contribute dramatically to the sustained
growth of ES-CON JAPAN Group.

7)

Taking on the Challenges of New Business Domains
We acquired the shares of Ryomon Co., Ltd., which is a company engaged in management of urban columbariumin Minato Ward, Tokyo, in October 2020 to solve issues in modern society, such as the shortage of burial grounds
due to the large number of deaths resulting from an aging population, the situation in which there will be nobody
to look after graves due to small families with fewer children, and particularly the situation in which having a gravein central Tokyo is extremely difficult. We launched sale of permanent use rights of the columbarium in March
2021.
- 6 -

Furthermore, after investing in the real estate investment fund in Hawaii in March 2019, we have engaged inoverseas businesses as well while assessing the impact of the COVID-19 pandemic recently. We plan to invest
and participate in Waikiki Galleria Tower project, a commercial complex value-add project in Honolulu, Hawaii,primarily being carried out by BlackSand Capital, LLC, a real estate private equity firm, through our subsidiary
ESCON USA III, LLC. In addition, we have concluded a strategic advisory contract regarding this project, and will
provide advice and support on the development, design, operation and management of the entire property.
Moreover, in October 2021, we invested in a real estate investment fund “Crow Holdings Realty Partners IX, L.P”
(hereinafter “the Fund”) formed by Crow Holdings Capital, a real estate company in Texas, U.S.A., through our
subsidiary ESCON USA II, LLC. The Fund’s main policy is to perform diversified and stable investment innumerous projects/properties across the U.S. centering on rental apartments and warehouses (e-commerce) by
focusing on the population growth of the region (market growth potential). As such, we believe that this investment
will also be beneficial for us to understand the business sentiment and trends in the U.S. real estate market.
We will continue to focus our endeavors on developing new business fields with an eye on the next era as well as
our global implementation of a multifaceted real estate business that can contribute to society.
8)

Status of ESG Initiatives
We have set “Address social issues through promotion of ESG initiatives” as one of our key management
strategies. The “ESG Promotion Group,” which has a director serving as head of the President’s Office appointed
as the person in charge and consists of members selected from each department, has led such initiatives. In July
2021, we established the Health & Culture Fostering Team for further promotion of health management.
1. Environment (E)・EcoAction 21 Certification
In May 2020, ES-CON JAPAN acquired EcoAction 21 Certification, a Japanese environmental management
system (EMS) established by the Ministry of the Environment. EcoAction 21 is an EMS for proactive, effective
environmental management including reduction of CO2 emissions, and EMS activities aim for continuous efforts
based on the PDCA cycle. By continuing to conduct environmentally friendly management through EcoAction
21 initiatives, companies are expected to fulfill their social responsibility to reduce environmental burden while
such activities also bring benefits to management, such as cost reduction and improved productivity, andcontribute to the enhancement of corporate value.
・Green Building
In July 2020, “tonarie Yamato-Takada” and “tonarie Toga-Mikita,” which are commercial facilities owned by EJR,
obtained DBJ Green Building Certification (a certification system created by Development Bank of Japan Inc.
(hereinafter “DBJ”) in April 2011 to support real estate properties with environmental and social awareness(“Green Buildings”)) from DBJ. These were followed also by “tonarie Minamisenri” and “tonarie Seiwadai” inFebruary 2021 and commercial facility “Asumigaoka Brand New Mall” in July 2021. Our group as a whole isworking to improve the value of the facilities, and the five properties that have acquired the certification arebeing operated and managed by our subsidiary ES-CON PROPERTY Ltd.
・“Rank S” Certification for CASBEE for Real Estate
In July 2020, “tonarie Fujimino,” a commercial facility owned by ES-CON JAPAN, obtained “Rank S,” thehighest rank of the Certification for CASBEE(*1) for Real Estate from a CASBEE accreditation body authorized
by the Institute for Building Environment and Energy Conservation.
*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 thebuilding and its visual impact on the area.

・ZEH Builder
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(*2) Builder Certification.
*2

ZEH (Net Zero Energy House) is a house aiming to make the annual primary energy consumption zero by introducing
renewable energy 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 ahighly efficient equipment system.

- 7 -・Received Award for Excellence in the Environmental Human Resource Development Corporate Awards
In March 2021, we received the Award for Excellence in the Environmental Human Resource Development
Corporate Awards 2020 (recognizing companies leading the way in developing environment-related humanresources) hosted by the Ministry of the Environment and the Environmental Consortium for Leadership
Development (EcoLeaD). The Awards were created in a fiscal 2014 project by the Ministry of the Environment
with an aim to encourage Japanese companies to engage in and train human resources for environmentallyfriendly business management and increase the number of companies contributing to comprehensive
improvement of the environment, economy and society, considering the situation where efforts toward asustainable society have become essential.
・Construction and Operation of “Techno Farm Fukuroi,” a Vertical Farm Utilizing Fully Artificial LightAs mentioned above, we plan to start construction of 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. We will make efforts
to realize efficient and stable production of “safe and clean” lettuce in collaboration with Chubu Electric Powerand Spread. The three companies will solve issues in food and agricultural fields through the plant factorybusiness as well as contribute to the realization of a sustainable and livable society and the achievement ofSDGs by making efforts towards decarbonization such as the proactive use of green energy and effective useof CO2 in the process of cultivation.
2. Social (S)・Contributing to Healthcare
We have been providing monetary donations since 2020 to Kyoto University’s “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 since 2019 to Osaka University’s Graduate School of
Medicine as support for clinical trials of 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 an 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, and have secured impartiality andtransparency concerning election and remunerations 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; seven in January 2021 and one in September 2021.
・Diversity of the Board of Directors
In order to secure diversity of the board of directors, two independent directors were appointed at the 26th
Regular General Meeting of Shareholders held on March 26, 2021, and the number of independent directors
increased to four. In addition to the traditional certified public accountant, tax accountant and attorney, adirector experienced in corporate management and a female independent director who is also a securities
analyst have been newly added for a diverse board composition.
In addition, the skills matrix for directors is disclosed in the corporate governance report.
4. Other
In March 2020 and December 2020, we procured funds through “ESG/SDG assessment-based loans” provided
by Sumitomo Mitsui Banking Corporation. Deemed to be “implementing good ESG and SDG initiatives andinformation disclosure,” each earned an overall ranking that is the third-best ranking out of seven. Combined,
6.5 billion yen was procured for two projects.

- 8 -We have been participating in 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 theassessment results. As a result, in October 2021, we acquired “2 Stars” in GRESB Rating, which is a five-grade
evaluation system that reflects the applicant’s relative evaluation based on total GRESB Score, for efforts onenvironmental consideration and sustainability in the “Development Benchmark.” In addition, we acquired“Green Star(*3)” rating by receiving high marks in both “Management Component” and “Development
Component” for three consecutive years.
*3”Green Star” in the “Development Benchmark” is given to participants whose score is 50% or more in the absoluteassessment based on the two main points, which are “Management Component” and “Development Component.”

9)

Business Development by Segment
In the real estate sales business, our core business, we conducted revenue-generating real estate sales, etc., inaddition to achieving progress in condominium sales.
In the condominium sales business, we commenced selling new sales projects, including “Le JADE Gifu” (Gifu
City, Gifu Prefecture; 54 units in total), “Le JADE Takatsuki Bessho” (Takatsuki City, Osaka Prefecture; 49 units intotal), “Le JADE Takatsuki Nishimakami” (Takatsuki City, Osaka Prefecture; 43 units in total), and “Grand Crea
Ichinomiya” (Ichinomiya City, Aichi Prefecture; 41 units in total; joint project with Chubu Real Estate). “Le JADE
Mukonoso Honmachi.” (Amagasaki City, Hyogo Prefecture; 33 units in total) was sold out after completion; “LeJADE Nagaikoendori” (Sumiyoshi Ward, Osaka City; 108 units in total) and “Le JADE Neyagawa Koen”(Neyagawa City, Osaka Prefecture; 60 units in total), which are scheduled for completion during the fiscal year
under review, and “Le JADE Hirano (Hirano Ward, Osaka City; 58 units in total), “Le JADE Tsukuba Station Front”(Tsukuba City, Ibaraki Prefecture; 218 units in total), “Le JADE Kakegawa Ekimae” (Kakegawa City, Shizuoka
Prefecture; 83 units in total) and “Le Jade Urawa” (Urawa Ward, Saitama City; 44 units in total), which arescheduled for completion in the next fiscal year, are contracted to sell out.
Furthermore, we acquired land for a new sales project (Minami Ward, Fukuoka City and Higashi Ward, Sapporo
City) in the Kyushu area and Hokkaido area, our first in those areas; “Chiba Research Park (Wakaba Ward, Chiba
City),” our first logistics facility site in the Tokyo metropolitan area; and a project site (Minato Ward, Tokyo; Repro
Shimbashi Project (tentative name)) near JR Shimbashi Station eyeing rental/development business over the
medium to long term. Through these and other efforts, we have been working to expand our business area anddiversify our business.
In the real estate leasing business, efforts are being made to secure stable rental income from commercial
facilities owned by ES-CON JAPAN and to enhance their asset value. Such efforts included newly acquiring“tonarie Yokkaichi” (Yokkaichi City, Mie Prefecture), a community-based shopping center, opening “tonarie
Fujimino” (former name: Soyoca Fujimino; Fujimino City, Saitama Prefecture), opening “tonarie CREO” at “tonarie
Tsukuba Square (Tsukuba City, Ibaraki Prefecture),” a redevelopment project in front of Tsukuba Station in Ibaraki
Prefecture, in phases (May and July 2021).
In addition, as previously mentioned, we aim to further enhance the leasing business and secure stable revenues
through our plans to acquire shares of eight companies, including Picasso, which owns numerous outstanding
revenue-generating properties including rental apartments and office buildings, and to make them our subsidiaries.
In the real estate planning agency and consulting business, focus is being placed on the segment as a businessachieving high profit margins through subcontracting, planning agency and consulting, and other non-asset
businesses by leveraging the planning and other strengths of ES-CON JAPAN, including launch of sale ofpermanent use rights of the columbarium.
As a result, ES-CON JAPAN achieved net sales of 43,620 million yen (down 32.8%), operating income of 4,849
million yen (down 57.0%), ordinary income of 4,015 million yen (down 61.7%) and profit attributable to owners ofparent of 2,907 million yen (down 59.9%) for the first three quarters, all compared with the same period of theprevious year.
The following describes the operating results by each segment, with figures compared with the same period of theprevious year.
- 9 -

1)

2)

3)

Real estate sales businessIn the real estate sales business, activities included selling condominiums and revenue-generating real estate,
and resulted in net sales of 38,156 million yen (down 37.1%) and segment income of 6,959 million yen (down
46.0%).
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 5,125 million yen (up 26.0%) and segment income of 2,125 million yen (up 21.3%).
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, but resulted in net sales of 338 million yen (up 95.5%) and segment loss of 446 million
yen (segment income of 100 million yen in the same period of the previous year) due to delay in sales in thecolumbarium sales business and prior expenditure of advertising expenses.

(3) Explanation of Financial Position
Assets at the end of the first three quarters increased by 37,316 million yen compared with the end of the previous
fiscal year to 186,739 million yen. This was mainly attributable to cash and deposits, property, plant and equipment
and inventories increasing by 10,072 million yen, 2,545 million yen and 19,839 million yen, respectively.
Liabilities increased by 16,781 million yen compared with the end of the previous fiscal year to 127,577 million yen.
This was mainly attributable to long-term loans payable, short-term loans payable and bonds payable increasing by
15,593 million yen.
Net assets increased by 20,534 million yen compared with the end of the previous fiscal year to 59,162 million yen.
This was attributable to cash dividends paid of 2,645 million yen, while recording profit attributable to owners ofparent of 2,907 million yen as well as the increase in capital and capital reserve by 10,235 million yen each with thecapital increase through third-party allotment. As a result, the equity ratio was 31.9% (25.8% at the end of theprevious fiscal year).
(4) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information
The consolidated earnings forecast remains unchanged from the forecast announced on February 24, 2021. The
impact of the aforementioned acquisition of shares of Picasso and its seven Group companies on the consolidated
earnings for the fiscal year under review is currently being examined. Should there be any matters to be disclosed,
we will make an announcement promptly.
The fourth medium-term management plan for the three-year period from the fiscal year ending December 2021
through the fiscal year ending December 2023 is as explained earlier in this report.

- 10 -

2.

Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Unit: million yen)
Third quarter offiscal year ending
Dec. 2021(as of Sept. 30, 2021)

Fiscal year ended
Dec. 2020(as of Dec. 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
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- 11 -

23,870927
6,262
82,3168,739(0)122,11733,942824
6,355
102,062
11,496(0)
154,682

4,359
(889)
3,470
11,262
335
(191)
143
14,876

5,530(1,185)
4,345
12,327
977
(227)
749
17,421

339
63
403

266
55
322

12,064(37)
12,02627,306

14,260(37)
14,222
31,966－－
149,42390
90
186,739

(Unit: million yen)
Third quarter offiscal year ending
Dec. 2021(as of Sept. 30, 2021)

Fiscal year ended
Dec. 2020(as of Dec. 31, 2020)
Liabilities
Current liabilities
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
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- 12 -

2,907
26,093
230
1,460
9,121
39,813

3,943
36,774－53
11,343
52,113

69,274
135
46
260
1,265
70,982
110,795

73,381
135
55
269
1,620
75,463
127,577

6,284
2,088
31,429(1,348)38,454

16,51912,33331,691(1,328)59,215

153

301

(18)

12

134

313

1
37
38,627
149,4231(367)
59,162
186,739

(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 Dec. 2021
(Unit: million yen)First three quarters ofFirst three quarters offiscal year ended
fiscal year ending
Dec. 2020
Dec. 2021(from Jan. 1, 2020,(from Jan. 1, 2021,
to Sept. 30, 2020)
to Sept. 30, 2021)
Net sales
64,927
43,620
Cost of sales
47,82932,414Gross profit
17,097
11,206
Selling, general and administrative expenses
5,826
6,357
Operating income
11,271
4,849
Non-operating income
Interest income
1210Dividend income
46
52
Penalty income20
17－
Foreign exchange gains
15
Share of profit of entities accounted for using－
106
equity method
Other
11
13
Total non-operating income
90215
Non-operating expenses
Interest expenses
758
989
Share of loss of entities accounted for using－
86
equity method－
Amortization of share issuance cost
18
Other
41
41
Total non-operating expenses
886
1,049
Ordinary income
10,475
4,015
Extraordinary income－
Gain on sales of non-current assets
0Gain on reversal of subscription rights to shares
00
Total extraordinary income
00Extraordinary losses
Loss on retirement of non-current assets
00
Total extraordinary losses
00Profit before income taxes
10,475
4,015
Income taxes - current
2,919
1,333
Income taxes - deferred
312
180
Total income taxes
3,232
1,513
Profit
7,243
2,501
－
Loss attributable to non-controlling interests(405)
Profit attributable to owners of parent
7,243
2,907

- 13 -

(Quarterly Consolidated Statement of Comprehensive Income)First three quarters of fiscal year ending Dec. 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

First three quarters offiscal year ended
Dec. 2020(from Jan. 1, 2020,
to Sept. 30, 2020)
7,243(Unit: million yen)First three quarters offiscal year ending
Dec. 2021(from Jan. 1, 2021,
to Sept. 30, 2021)
2,501

(200)

148

8

17

(4)

12

(195)
7,047

178
2,680

7,047

3,085

－

(405)

- 14 -

(3) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Notes on Substantial Changes in the Amount of Shareholders’ Equity)
ES-CON JAPAN received payment of the capital increase through third-party allotment from Chubu Electric Poweron April 5, 2021. As a result, capital and capital reserve increased by 10,235 million yen each in the first threequarters, and capital and capital surplus were 16,519 million yen and 12,333 million yen, respectively, at the end of
the third quarter of the fiscal year under review.
(Change in Scope of Consolidation or Scope of Equity Method Application)(Significant changes in scope of equity method application)
TSUNAGU Community Farm LLC was newly established and is included in the scope of equity method applicationfrom the third quarter of the fiscal year under review.
(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 statedunder additional information 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 thereal estate market deteriorates further, the operating results, financial position, and status of cash flow of ES-CON
JAPAN Group may be materially impacted due to posting of appraisal loss of inventories and impairment loss, etc.
(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 toas “board benefit trust for executives”) at the Regular General Meeting of Shareholders held on March 20,
2015, with an aim to further clarify remuneration for directors (excluding auditor directors, external directors,
and nonexecutive directors) and (authorized) executive managing officers (the “Directors”; hereinafter referred
to as the same unless otherwise specified) of ES-CON JAPAN and the relationship between ES-CON JAPAN’s
operating results and share price, with the Directors 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, we passed a resolution for continuation and partial revision of performance-based stock
rewards for the Directors at the Regular General Meeting of Shareholders held on March 26, 2020, and theRegular General Meeting of Shareholders held on 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 money equivalent to the fair market value of shares of ES-CON JAPAN are granted to the Directors of
ESCON JAPAN 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 of ES-CON JAPAN when said Director retires from all positions of Director in principle.
Under the System, for a set period of three fiscal years from the fiscal year ending 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
・ 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 ending December
2020 to the fiscal year ending December 2022 and each subsequent period of three fiscal years): 330
million yen- 15 -

・ 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 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 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 is 347 million yen and 851,000 shares for the previous fiscal year, and 347 million yen and851,000 shares for the third quarter of the fiscal year under review.
(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 trust (the “System”;
The trust established based on the trust agreement concluded with Resona Bank, Limited for the System isreferred to as “Share-Based Payment ESOP”) 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 their motivation and morale for improving
the share price and operating results.
The System is a system by which ES-CON JAPAN contributes money to a trust with the trust acquiring shares of
ES-CON JAPAN with the 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 59 million yen and 233,000 shares for the previous fiscal year, and 57 million yen and
225,800 shares for the third quarter of the fiscal year under review.
(Business Combination through Acquisition)
ES-CON JAPAN resolved at the board of directors’ meeting held on August 31, 2021, to acquire all shares ofPicasso Co., Ltd. and its Group companies (Yuki Sangyo Co., Ltd., Venus Corporation Co., Ltd., Cubic Co., Ltd.,
Santa Co., Ltd., Hirano Bussan Co., Ltd., Aria Co., Ltd., and Eikaku Y.K.), making them its subsidiaries, andconcluded an agreement on the transfer of shares on the same day. Based on the agreement, ES-CON JAPANplans to acquire all of the said shares with October 29, 2021, as the date of share transfer.
1. Overview of Business Combination(1) Name and Business Description of Acquired Companies
Name of acquired company

Business description

Picasso Co., Ltd.

Real estate leasing, real estate management, real estate
investment, etc.

Yuki Sangyo Co., Ltd.

Real estate leasing, management, brokerage services

Venus Corporation Co., Ltd.

Real estate management

Cubic Co., Ltd.

Real estate leasing, management, brokerage services

Santa Co., Ltd.

Real estate leasing, management, brokerage services

Hirano Bussan Co., Ltd.

Real estate leasing, management, brokerage services

Aria Co., Ltd.

Real estate leasing, management, brokerage services

Eikaku Y.K.

Real estate leasing, management, brokerage services- 16 -

(2) Main Reason for Business Combination
ES-CON JAPAN has decided to acquire 100% of the shares of Picasso Co., Ltd., which is engaged in realestate leasing chiefly in the Kansai area, and its seven Group companies and to make them its subsidiaries,
with an aim to secure stable revenues from revenue-generating properties.
Founded in the city of Osaka in 1991, Picasso Co., Ltd., alongside the seven Group companies, is active inreal estate leasing chiefly in the Kansai area, and owns numerous outstanding revenue-generating properties,
including rental apartments and office buildings.
ES-CON JAPAN is currently pressing ahead with businesses based on “IDEAL to REAL 2023,” the fourth
medium-term management plan, for the three-year period from the fiscal year ending December 2021
through the fiscal year ending December 2023. One of the business strategies in the plan calls for“Transformation and Rapid Progress,” specifically the transformation of management focus from flows tostock and transformation to a structure of sustained and stable revenues.
This acquisition of subsidiaries will rapidly move ahead with the changing of the revenue structure byenhancing the leasing business and securing stable revenues, and thus we believe it will contribute
dramatically to the sustained growth of ES-CON JAPAN Group.
(3) Date of Business Combination
October 29, 2021 (planned)(4) Legal Framework of Business Combination
Acquisition of shares with cash as consideration(5) Names of the Companies after Business Combination
There are no changes to the names of the companies after business combination.
(6) Percentage of Voting Rights to Be Acquired
100%(7) Main Reasons for Determining Acquisition
ES-CON JAPAN’s acquisition of shares with cash as consideration
2. Breakdown of Acquisition Cost and Consideration for Companies to Be Acquired (Total for Aforementioned Eight Companies)
Acquisition consideration
Acquisition costCash29,800 million yen (planned)
29,800 million yen (planned)

3. Major Acquisition-Related Expenses and AmountDue diligence fee, etc. (estimated amount)
100 million yen
4. Amount, Reason, Amortization Method and Amortization Period for Goodwill
Yet to be determined.
5. Breakdown of Amounts of Assets to Be Acquired and Liabilities to Be Assumed on the Date of Business Combination
Yet to be determined.

- 17 -

(Segment Information, Etc.)[Segment Information]
I. First Three Quarters of Fiscal Year Ended Dec. 2020 (from January 1, 2020, to September 30, 2020)
1. Information on Net Sales and Income or Loss Amounts by Reporting Segment(Unit: million yen)Amount on
Reporting segment
quarterly
Reconciliation consolidated
Real estate
Real estate
Real estate
Total(Note 1)planning agency
statement ofsales
leasing
incomeand consulting
businessbusinessbusiness(Note 2)
Net sales
Net sales toexternalcustomers
Intersegment net
sales or transfers
Total
Segment income

60,686

4,067

173

64,927－64,927

－

－

－

－

－

－

60,686

4,067

173

64,927－64,927

12,886

1,752

100

14,739(3,467)

11,271(Note 1) The reconciliation of segment income of -3,467 million yen is corporate expenses not attributable to any
reporting segment. Corporate expenses are general and administrative expenses not attributable to reporting
segments.
(Note 2) Segment income is reconciled with operating income on the quarterly consolidated statement of income.
2. Information on Impairment Loss on Non-Current Assets or Goodwill, Etc. by Reporting Segment
II. First Three Quarters of Fiscal Year Ending Dec. 2021 (from January 1, 2021, to September 30, 2021)
1. Information on Net Sales and Income or Loss Amounts by Reporting Segment(Unit: million yen)Amount on
Reporting segment
quarterly
Real estate
Reconciliation consolidated
Total
Real estate
Real estate
statement of(Note 1)planning agency
sales
leasing
incomeand consulting
businessbusiness(Note 2)business
Net sales
Net sales toexternalcustomers
Intersegment net
sales or transfers

38,156

5,125

338

43,620－43,620

－

－

－

－

－

－

Total
－
38,156
5,125
338
43,62043,620
Segment income
6,959
2,125
(446)
8,638
(3,788)4,849(loss)(Note 1) The reconciliation of segment income (loss) of -3,788 million yen is corporate expenses not attributable to any
reporting segment. Corporate expenses are general and administrative expenses not attributable to reporting
segments.
(Note 2) Segment income (loss) is reconciled with operating income on the quarterly consolidated statement of income.
2. Information on Impairment Loss on Non-Current Assets or Goodwill, Etc. by Reporting Segment
Not applicable.

- 18 -

(Significant Subsequent Events)(Borrowing of a large amount of funds)
ES-CON JAPAN resolved at its board of directors’ meeting held on October 26, 2021, to borrow funds through thefollowing syndicate loan for the purpose of procurement of funds for acquisition of shares and refinancing ofexisting loans when acquiring all shares of Picasso Co., Ltd. and its seven Group companies and making themsubsidiaries, and concluded a syndicate loan agreement on the same date.
Overview of Syndicate Loan
(1) Arranger

Sumitomo Mitsui Banking Corporation(2) Joint arranger

Mizuho Bank, Ltd.

(3) Participating financial institution

Shinkin Central Bank

(4) Borrowing amount

50,000 million yen(5) Drawdown date

October 29, 2021

(6) Repayment date

October 31, 2022

(7) Repayment method

Lump-sum repayment(8) Interest rate

Base rate (1-month TIBOR) + 0.4%

- 19 -

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. 2021
(from Jul. 1, 2021, to Sept. 30, 2021)
Classification

Mid- to high-risehousing, etc.

Contract amount during the period
Number of units(units)

Other
Total
(Note)

Balance of contracts at the end of the period

Amount(million yen)

Number of units(units)Amount(million yen)

257

13,585992

51,824－

13,232

－

1,756

257

26,817992

53,580

The above amounts do not include consumption tax, etc.

The main performance of sales by segment for the first three quarters is as follows:First three quarters of fiscal year ending Dec. 2021
(from Jan. 1, 2021, to Sept. 30, 2021)

Name of segment

Number of units(units)Property nameReal estate sales businessCondominiums

539

22,315

Suroy Mall Nagamine

－

4,600

Fuji Grand Natalie

－

3,950

Genboen, Koga-shi

－

1,874

－

1,300

－

702

－

565

－

530

－

300

3-chome, Aoyamadai, Suita-shi－

226

Matsukazecho, Hiratsuka-shi

－

107

Other

－

1,684

539

38,156

Commercial leasehold land in
Sapporo-shi
Commercial leasehold land in
Neyagawa-shi
Commercial leasehold land in
Amagasaki-shi
Commercial leasehold land in
Kobe-shiCommercial leasehold land in
Hikone-shi

Subtotal
Real estate leasing business

5,125Real estate planning agency andconsulting business

338
Total

(Note 1)
(Note 2)

Amount(million yen)

There are no transactions between segments.
The above amounts do not include consumption tax, etc.

- 20 -

43,620