ジンズホールディングス（3046） – [Delayed]Quarterly Securities Report 1Q

[Cover Page] [Document title] Quarterly Securities Report [Article of the applicable law requiring Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act submission of this document] [Filed to] [Filing date] [Fiscal year] Director-General of the Kanto Local Finance Bureau January 14, 2022 First quarter of the 35th term (from September 1, 2021 to November 30, 2021) [Company name] JINS HOLDINGS Inc. [Company name in English] JINS HOLDINGS Inc. [Title and name of representative] Hitoshi Tanaka, CEO and Representative Director [Address of registered headquarter] 26-4 Kawaharamachi 2-chome, Maebashi-shi, Gunma (This is the address of the registered head office, but the actual business is conducted at the nearest place of contact.) [Telephone number] Not applicable. [Name of contact person] Not applicable. [Nearest place of contact] Iidabashi Grand Bloom 30th Flr., 10-2 Fujimi 2-chome, Chiyoda-ku, Tokyo [Telephone number] +81-3-5275-7001 (main number) [Name of contact person] Yukinori Arakawa, Executive Officer and General Manager of Administration [Place for public inspection] Tokyo Stock Exchange, Inc. Division (2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo) 1 Term Accounting period 34th term Three months ended November 30, 2020 From September 1, 2020 to November 30, 2020 35th term Three months ended November 30, 2021 From September 1, 2021 to November 30, 2021 34th term From September 1, 2020 to August 31, 2021 Net sales (millions of yen) 14,813 15,275 Part I Company Information I. Overview of Company 1. Key financial data Ordinary profit (millions of yen) Profit attributable to owners of parent (millions of yen) Comprehensive income (millions of yen) (millions of yen) (millions of yen) Net assets Total assets Earnings per share Diluted earnings per share Equity ratio submitting company is omitted. 2. Description of business (yen) (yen) (%) In addition, there are no changes in major affiliates. 63,898 5,020 3,292 3,623 20,219 53,007 141.07 127.35 38.1 691 433 437 20,176 52,684 18.56 16.47 38.3 (Notes) 1. As the Company prepares the quarterly consolidated financial statements, the description of key financial data of the There are no significant changes in the description of business which the Company group (the Company and the Company’s affiliates. Hereinafter, the “Group”) operates during the three months ended November 30, 2021. 705 369 445 17,625 51,261 15.82 14.02 34.4 2 II. Overview of Business 1. Business risks continue to monitor the situation. In addition, there were no material events. review. (1) Financial position and operating results In the three months ended November 30, 2021, there were no matters that may have a significant impact on the judgment of investors in the overview of business, financial information and other matters stated in this Quarterly Securities Report or no significant changes in “Business Risks” stated in the Annual Securities Report for the previous fiscal year. The impact of COVID-19 is as stated in “2. Management analysis of financial position, operating results and cash flows” and we will 2. Management analysis of financial position, operating results and cash flows Forward-looking statements in this document are based on the Group’s judgments as of the end of this quarter of the fiscal year under During the three months ended November 30, 2021 (September 1, 2021 to November 30, 2021), the Japanese economy showed signs of a recovery in personal consumption as social and economic activities began to normalize following the complete lifting from October onward of the state of emergency, etc., which had been repeatedly declared due to the spread of the novel coronavirus disease (COVID-19), mainly in urban areas. Looking at the global economy, the number of cases is rising once again in some regions partly owing to the impact of COVID-19 variants, and infection prevention measures, including travel restrictions, remain in place. In addition, there are concerns about a possible worsening of economic conditions owing to factors such as a rapid increase in crude oil prices around the world, the Chinese government’s measures to restrict investment, and the impact of electric power shortages on the manufacturing industry. In the domestic retail eyewear market (eyeglasses for vision correction), although the state of emergency, etc., which had been declared due to the spread of COVID-19 was lifted, the market size continued to trend at a level lower than the same period of the previous year. Under this market environment, in the eyewear business, the Company and its consolidated subsidiaries (collectively, the “Group”) took such initiatives as promoting digital transformation, and strengthening development of innovative products, which they identified as management issues. In the domestic eyewear business, the Company worked to offer consumers a more convenient purchasing experience, including introducing “JINS BRAIN2,” a service that uses AI to assess the extent to which pairs of glasses will suit customers with an enhanced level of accuracy, as an initiative to seamlessly connect online and in-store experiences, making it easier for customers to select glasses and creating a trouble-free purchasing experience. With regard to product development, as part of our initiatives to realize “the world free from myopia,” we conducted a joint project to develop an eyeglass-shaped, violet-light-emitting medical device designed to suppress progress of myopia, and total research and development expenses were ¥55 million for the three months ended November 30, 2021. In terms of store development, the number of eyewear stores as of November 30, 2021, was 674, including 448 stores in Japan and 226 stores overseas (172 in China, 42 in Taiwan, 6 in Hong Kong, and 6 in the United States). As a result, for the three months ended November 30, 2021, the Company posted net sales of ¥15,275 million (up 3.1% year-on-year) partly thanks to the impact of new store openings, despite the fact that we have yet to fully recover from the impact of COVID-19. Operating profit was ¥577 million (down 26.0% year-on-year) owing to the effect of changes to revenue recognition standards, etc. Ordinary profit was ¥691 million (down 2.1% year-on-year), and profit attributable to owners of parent was ¥433 (2) Analysis and examination of operating results, etc. from management perspective million (up 17.4% year-on-year). 1) Business results by segment In the domestic eyewear business, we launched a next-generation version of JINS MEME, eyewear that captures mental and physical conditions with sensors using proprietary technology to visualize those conditions on a connected mobile app, with a more compact and lighter sensor and battery. Sales were also driven by the strong performance of high-value-added products, 3 under review. fees. Personnel Act. including “Airframe Hingeless,” for which we eliminated the hinges connecting the front of the frame with the temples, creating a unique new fit and comfort for users. In addition, membership of the JINS app reached approximately 9.48 million people as of the end of November 2021, and e-commerce sales continued to grow at a steady pace. Regarding the impact of COVID-19, there were signs of a recovery in footfall to levels prior to the outbreak of the pandemic from October onward, when the declaration of a state of emergency, etc., was lifted. In terms of store development, the number of stores in Japan was 448 (14 openings and no closures) as of the end of the period As a result, net sales of the domestic eyewear business were ¥11,890 million (up 1.7% year-on-year), and segment operating profit was ¥518 million (down 7.2% year-on-year). In the overseas eyewear business, in China, personal consumption stalled, owing partly to the strengthening of restrictions on individual movement imposed by the government as a measure to combat COVID-19 from the summer onward. Performance in the country was also impacted by factors such as a fallback from the previous year, when there were exemptions to social security In Taiwan, performance recovered steadily from the rapid increase in COVID-19 infections in May, but our business was impacted by factors such as an increase in personnel expenses to secure opticians as required by the proposed Optometric In Hong Kong, the slump in consumption due to the effects of protests resulting from political unrest and COVID-19 is on a recovery track, and business performance is also recovering steadily. In the United States, we have reopened all of our brick-and-mortar stores, which had been closed due to the impact of COVID-19, and business performance is on a recovery track. In terms of store development, the total number of stores overseas was 226 as of the end of the period under review, including 172 stores in China (6 openings and 4 closures), 42 in Taiwan (4 openings and no closures), 6 in Hong Kong (no openings or closures), and 6 in the United States (no openings or closures). As a result, net sales of the overseas eyewear business were ¥3,384 million (up 8.6% year-on-year), and segment operating profit was ¥59 million (down 73.2% year-on-year). 4 2) Analysis of financial position (a) Assets accounts receivable – trade. Current assets decreased ¥992 million from the end of the previous fiscal year to ¥32,213 million. This was mainly due to a decrease of ¥1,424 million in cash and deposits, despite an increase of ¥292 million in notes and Non-current assets increased ¥669 million from the end of the previous fiscal year to ¥20,471 million. This was mainly due to an increase of ¥380 million in property, plant and equipment such as buildings and structures as a result of the Group’s expansion of retail stores and an increase of ¥227 million in leasehold and guarantee deposits. As a result, total assets decreased ¥322 million from the end of the previous fiscal year to ¥52,684 million. Current liabilities decreased ¥201 million from the end of the previous fiscal year to ¥10,300 million. This was mainly due to a decrease of ¥366 million in income taxes payable. Non-current liabilities decreased ¥77 million from the end of the previous fiscal year to ¥22,207 million. This was mainly due to a decrease of ¥20 million in long-term borrowings and a decrease of ¥37 million in lease obligations. As a result, total liabilities decreased ¥279 million from the end of the previous fiscal year to ¥32,508 million. Net assets decreased ¥43 million from the end of the previous fiscal year to ¥20,176 million. This was mainly due to a decrease of ¥466 million due to the payment of dividends, despite the recording of ¥433 million in profit attributable to owners of parent. (3) Research and development activities Total research and development expenses were ¥55 million for the three months ended November 30, 2021. There was no material change in the Group’s research and development activities during the three months ended November 30, 3. Material contracts, etc. There was no decision or conclusion of material management contracts, etc. during the three months ended November 30, 2021. (b) Liabilities (c) Net assets 2021. 5 III. Status of the Submitting Company 1. Status of Shares, etc. (1) Total number of shares, etc. 1) Total Number of Shares Common stock Class Total 2) Issued Shares 73,920,000 73,920,000 Total number of authorized shares (shares) Class As of the end of 1st quarter of the fiscal year (shares) (November 30, 2021) As of the submission date (shares) (January 14, 2022) Stock exchange on which the Company is listed Details Common stock 23,980,000 23,980,000 Tokyo Stock Exchange (First Section) The number of shares constituting one unit: 100 shares Total 23,980,000 23,980,000 ― ― (2) Status of Share Acquisition Rights, etc. 1) Details of the Stock Option Plan Not applicable. 2) Status of Other Share Acquisition Rights, etc. Not applicable. Not applicable. (3) Status of Exercises of Moving Strike Convertible Bonds, etc. (4) Changes in the Total Number of Shares Issued and the Amount of Common Stock, etc. Date Changes in the total number of shares issued (shares) Balance of the total number of shares issued (shares) Changes in common stock (millions of yen) Balance of common stock (millions of yen) Changes in legal capital surplus (millions of yen) Balance of legal capital surplus (millions of yen) From September 1, 2021 to November 30, 2021 ― 23,980,000 ― 3,202 ― 3,157 (5) Status of Major Shareholders There are no matters to be stated as the period under review is the first quarter. 6 ― ― ― ― ― ― ― Classification Number of shares (shares) Number of voting rights (units) As of November 30, 2021 Details (6) Status of Voting Rights 1) Issued Shares Shares without voting rights Shares with restricted voting rights (treasury stock, etc.) Shares with restricted voting rights (others) ― ― ― Shares with full voting rights (treasury Common stock stock, etc.) Shares with full voting rights (others) Odd-lot shares Total number of shares issued Common stock Common stock 639,700 23,335,000 5,300 23,980,000 ― ― ― ― ― ― 233,350 Number of shares per unit: 100 shares Total voting rights held by shareholders ― 233,350 2) Treasury Stock, etc. As of November 30, 2021 Name of shareholder Address of shareholder JINS HOLDINGS Kawaharamachi 2-Inc. 26-4 chome, Maebashi-shi, Gunma Number of shares held under own name (shares) Number of shares held under the names of others (shares) Total number of shares held (shares) Percentage of the number of shares held in the total number of shares issued (%) 639,700 639,700 2.66 Total ― 639,700 639,700 2.66 ― ― 2. Status of Officers Not applicable. 7 2. Audit certification Instruments and Exchange Act. IV. Financial Information 1. Preparation methods of quarterly consolidated financial statements The quarterly consolidated financial statements of the Company are prepared based on the Regulation on the Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial Statements (Cabinet Office Order No. 64 of 2007). The Company’s quarterly consolidated financial statements for the first quarter of the fiscal year under review (from September 1, 2021 to November 30, 2021) and the three months ended November 30, 2021 (from September 1, 2021 to November 30, 2021) have received a quarterly review by Ernst & Young ShinNihon LLC, pursuant to provisions of Article 193-2, Paragraph 1 of the Financial 8 1. Quarterly consolidated financial statements (1) Quarterly consolidated balance sheets (Millions of yen) As of August 31, 2021 As of November 30, 2021 Assets Current assets Cash and deposits Notes and accounts receivable – trade Merchandise and finished goods Raw materials and supplies Other Total current assets Non-current assets Property, plant and equipment Buildings and structures, net Other, net Total property, plant and equipment Intangible assets Investments and other assets Leasehold and guarantee deposits Other Total investments and other assets Total non-current assets Total assets 21,781 4,087 4,549 420 1,374 32,213 7,367 1,906 9,273 2,272 4,741 4,183 8,925 20,471 52,684 23,206 3,794 4,515 359 1,328 33,205 7,139 1,753 8,892 2,244 4,514 4,150 8,664 19,801 53,007 9 (Millions of yen) As of August 31, 2021 As of November 30, 2021 Liabilities Current liabilities Accounts payable – trade Short-term borrowings Current portion of long-term borrowings Accounts payable – other, and accrued expenses Provision for bonuses Provision for product warranties Income taxes payable Other Total current liabilities Non-current liabilities Convertible bond-type bonds with share acquisition rights Long-term borrowings Asset retirement obligations Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Common stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity Accumulated other comprehensive income Foreign currency translation adjustment Total accumulated other comprehensive income Total net assets Total liabilities and net assets 1,763 2,203 48 4,469 75 141 291 1,306 10,300 20,115 197 537 1,356 22,207 32,508 3,202 3,228 18,700 (5,002) 20,128 47 47 20,176 52,684 1,506 2,121 53 4,410 49 – 657 1,702 10,501 20,135 217 528 1,404 22,285 32,787 3,202 3,228 18,747 (5,002) 20,176 43 43 20,219 53,007 10 (2) Quarterly consolidated statements of income and comprehensive income Quarterly consolidated statements of income Three months ended November 30, 2020 and November 30, 2021 (Millions of yen) For the three months ended November 30, 2020 For the three months ended November 30, 2021 Selling, general and administrative expenses Net sales Cost of sales Gross profit Operating profit Non-operating income Interest income Commission income Rental income Foreign exchange gains Subsidy income Other Total non-operating income Non-operating expenses Interest expenses Share of loss of investments accounted for using equity method Commission expenses Rental expenses on real estate Other Total non-operating expenses Ordinary profit Extraordinary losses Loss on retirement of non-current assets Impairment loss Loss on store closings Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent 14,813 3,047 11,766 * 10,985 781 20 9 1 1 19 10 63 40 – 0 81 16 139 705 15 27 1 44 660 94 197 291 369 – 369 15,275 3,341 11,934 * 11,356 577 21 6 1 130 73 3 237 39 22 0 56 5 124 691 37 – 3 40 650 162 53 216 433 – 433 11 Quarterly consolidated statements of comprehensive income Three months ended November 30, 2020 and November 30, 2021 Profit Other comprehensive income Foreign currency translation adjustment Total other comprehensive income Comprehensive income Comprehensive income attributable to: Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests 369 76 76 445 445 – (Millions of yen) For the three months ended November 30, 2020 For the three months ended November 30, 2021 433 4 4 – 437 437 12 [Notes] (Changes in accounting policies, etc.) (Application of Accounting Standard for Revenue Recognition and other standards) The Company has decided to apply the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020; hereinafter the “Revenue Recognition Accounting Standard”), etc., from the beginning of the first quarter of the fiscal year under review and recognize revenue from goods or services which the Company promised to provide at an amount expected to be received in exchange for the goods or services at the time when control over the promised goods or services has been transferred to a customer. (1) Sales with right of return Major changes due to the application of Revenue Recognition Accounting Standard, etc., are shown below. The Company has changed the accounting treatment of sales with a right of return to the method of recognizing revenue and cost of sales after excluding amounts equivalent to revenue and cost of sales for products expected to be returned. Accordingly, any consideration for products expected to be returned is included in “Other” under “Current liabilities” as refund liabilities, and any assets for which the Company recognizes the right to recover products from customers on settling refund liabilities are included in “Other” under “Current assets” as return assets. (2) Revenue recognition for points from other companies Previously the Company recorded amounts equivalent to points granted to customers in accordance with the sale of products based on points programs operated by other companies as selling, general and administrative expenses. However, the Company has changed to the method of recognizing revenue after subtracting an amount equivalent to points granted from the transaction price. The application of the Revenue Recognition Accounting Standard, etc., follows the provisional treatment stipulated in the proviso of Paragraph 84 of the Revenue Recognition Accounting Standard. The cumulative effects in the case of retroactively applying the new accounting policy to before the beginning of the first quarter of the fiscal year under review were adjusted in retained earnings at the beginning of the first quarter of the fiscal year under review, and the new accounting policy is applied from this initial balance. As the impacts on profit and loss for the three months ended November 30, 2021, and retained earnings at the beginning of the period are not significant, this information has been omitted. Furthermore, in accordance with the provisional treatment stipulated in Paragraph 89-2 of the Revenue Recognition Accounting Standard, information for previous consolidated fiscal years has not been reclassified based on the new method of presentation. In addition, in accordance with the provisional treatment stipulated in Paragraph 28-15 of the Accounting Standard for Quarterly Financial Reporting (ASBJ Statement No. 12, March 31, 2020), the disaggregation of revenue from contracts with customers is not provided for the three months ended November 30, 2020. (Application of Accounting Standard for Fair Value Measurement) The Company has applied the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019, hereinafter the “Fair Value Measurement Accounting Standard”) from the beginning of the first quarter of the fiscal year under review. Accordingly, the Company will apply new accounting policies prescribed in the Fair Value Measurement Accounting Standard and the like in the future in accordance with the provisional treatment stipulated in Paragraph 19 of the same Standard and Paragraph 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019). The application of the accounting standard has no impact on the quarterly consolidated financial statements. 13 (Changes in accounting estimates) As announced in the “Notice of Relocation of the Tokyo Head Office” on January 14, 2022, we plan to relocate the Tokyo head office in February 2023. In accordance with this, the Company has shortened the useful lives of non-current assets that it does not expect to use after the relocation. This change will be applied going forward. In addition, the Company has made changes to asset retirement obligations for restoration costs in accordance with fixed-term building lease contracts such that the recording of expenses associated with asset retirement obligations will end by the planned relocation date. Furthermore, the impact of this change on profit and loss for the three months ended November 30, 2021, is not significant. 14 I. Liability on guarantees guarantee deposits on some leasehold properties. Certain subsidiaries entered into proxy deposit agreements with lessors and financial institutions regarding leasehold and Based on the agreements, the financial institutions have deposited the amounts equivalent to leasehold and guarantee deposits to the lessors, and the subsidiaries guaranteed the obligations of the lessors to refund the leasehold and guarantee deposits to the financial institutions. Previous consolidated fiscal year (August 31, 2021) ¥274 million 1st quarter of consolidated fiscal year under review (November 30, 2021) ¥274 million II. Financial covenants Previous consolidated fiscal year (August 31, 2021) The Company entered into loan commitment agreements with counterparty banks to flexibly and stably procure working capital and funding for capital investments mainly for new store openings, and the said loan commitment agreements are subject to financial covenants. (1) Loan commitment agreements entered into on August 29, 2017 Total amount of loan commitments Available amount at the year-end Outstanding borrowings at the year-end Unused balance ¥8,000 million ¥4,000 million – ¥4,000 million Financial covenants on the loan commitment agreements above 1) Total net assets in the consolidated balance sheets at each year-end after the effective date of the agreement must be at least 75% of those at the year-end immediately before the effective date of the agreement or at least 75% of those at 2) The Company shall not record ordinary loss for two consecutive years in the consolidated statement of income at each the most recent year-end, whichever is higher. fiscal year-end after the effective date of the agreement. First quarter of the consolidated fiscal year under review (November 30, 2021) The Company entered into loan commitment agreements with counterparty banks to flexibly and stably procure working capital and funding for capital investments mainly for new store openings, and the said loan commitment agreements are subject to financial covenants. (1) Loan commitment agreements entered into on August 29, 2017 Total amount of loan commitments Available amount at the period-end Outstanding borrowings at the period-end Unused balance ¥8,000 million ¥4,000 million – ¥4,000 million Financial covenants on the loan commitment agreements above 1) Total net assets in the consolidated balance sheets at each year-end after the effective date of the agreement must be at least 75% of those at the year-end immediately before the effective date of the agreement or at least 75% of those at 2) The Company shall not record ordinary loss for two consecutive years in the consolidated statement of income at each the most recent year-end, whichever is higher. fiscal year-end after the effective date of the agreement. 15 (Quarterly consolidated statements of income) * Major components and amounts of selling, general and administrative expenses were as follows: Three months ended November 30, 2020 Three months ended November 30, 2021 Salaries and allowances Rent expenses on land and buildings Advertising expenses Research and development expenses ¥3,259 million ¥2,660 million ¥756 million ¥160 million ¥3,474 million ¥2,737 million ¥658 million ¥55 million (Quarterly consolidated statements of cash flows) The quarterly consolidated statements of cash flows for the three months ended November 30, 2021 were not prepared. Depreciation (including amortization of intangible assets) for the three months ended November 30, 2021 is as follows: Three months ended November 30, 2020 Three months ended November 30, 2021 Depreciation ¥652 million ¥675 million I. For the three months ended November 30, 2020 (Shareholders’ equity) Dividends paid Resolution Class of shares Total amount (Millions of Yen) Per share amount (Yen) Record date Effective date Source of dividends Shareholders Common stock 583 25.00 August 31, 2020 Retained earnings November 27, 2020 II. For the three months ended November 30, 2021 Dividends paid Resolution Class of shares Total amount (Millions of Yen) Per share amount (Yen) Record date Effective date Source of dividends Shareholders Common stock 466 20.00 August 31, 2021 Retained earnings November 26, 2021 Annual General Meeting of held on November 26, 2020 Annual General Meeting of held on November 25, 2021 16 (Segment information, etc.) [Segment information] I. For the three months ended November 30, 2020 1. Information about net sales and profit (loss) by reportable segment Reportable segment Domestic eyewear business Overseas eyewear business Subtotal Adjustments Consolidated (Note) (Millions of yen) Net sales: Sales to outside customers Intersegment sales or transfers Total Segment profit 11,696 121 11,817 558 3,117 2 3,119 222 14,813 123 14,937 781 (123) (123) – – 14,813 – 14,813 781 Notes: Segment profit is reconciled to operating profit in the quarterly consolidated statements of income. 2. Information about loss on impairment of non-current assets and goodwill by reportable segment (Significant loss on impairment of non-current assets) An impairment loss of ¥27 million was recorded in the “domestic eyewear business” segment. (Significant changes in goodwill) Not applicable. Not applicable. (Significant gain on negative goodwill) 17 II. For the three months ended November 30, 2021 1. Information about net sales and profit (loss) by reportable segment and information about revenue breakdown Reportable segment Domestic eyewear business Overseas eyewear business Subtotal Adjustments Consolidated (Note) Net sales: (Millions of yen) 11,890 11,890 85 11,975 518 3,384 3,384 0 3,385 59 15,275 15,275 85 15,361 577 – – (85) (85) – 15,275 15,275 – 15,275 577 Notes: Segment profit is reconciled to operating profit in the quarterly consolidated statements of income. 2. Information about loss on impairment of non-current assets and goodwill by reportable segment (Significant loss on impairment of non-current assets) Revenue from contracts with customers Sales to outside customers Intersegment sales or transfers Total Segment profit Not applicable. Not applicable. Not applicable. (Significant changes in goodwill) (Significant gain on negative goodwill) 3. Change in reportable segments As described in Changes in accounting policies, etc., the Company has changed its accounting treatment methods in relation to revenue recognition with the application of the Accounting Standard for Revenue Recognition and other standards from the beginning of the three months ended November 30, 2021. Accordingly, the Company has made similar changes to methods of calculating business segment profit and loss. Furthermore, the impact of these changes on segment information is not significant. 18 (Revenue recognition) (Additional information) Information about breakdown of revenue from contracts with customers is as stated in “Notes (Segment information, etc.).” (Accounting estimates pertaining to the novel coronavirus disease (COVID-19)) Regarding the impact of COVID-19, the declaration of a state of emergency, etc., was lifted across the country in October 2021, partly owing to a decline in the number of infections in line with an increase in the vaccination rate. However, there are concerns that the number of cases will increase again as more people move around the country, etc., and therefore, we believe that it is still impossible to predict future developments. Although it is difficult to forecast accurately factors including the timing when the disease is brought under control, the Group has made accounting estimates such as impairment of non-current assets and the recoverability of deferred tax assets, based on an assumption that the impact will continue for a certain period in the fiscal year ending August 31, 2022. 19 Items Three months ended November 30, 2020 Three months ended November 30, 2021 ¥15.82 ¥18.56 433 – 433 (13) [(13)] – 369 – 369 (13) [(13)] 23,340,218 23,340,216 ¥14.02 ¥16.47 (Per Share Information) Basic and diluted earnings per share are calculated as follows: (1) Basic earnings per share (Basis for calculation) Profit attributable to owners of parent (millions of yen) Profit not attributable to common shareholders (millions of yen) Profit attributable to owners of parent related to common stock (millions of yen) Weighted-average number of shares of common stock outstanding during the year (shares) (2) Diluted earnings per share (Basis for calculation) Adjustments to profit attributable to owners of parent (millions [of which, other (after tax effect)] (millions of yen) of yen) rights] (Subsequent events) Not applicable. 2. Other Not applicable. Increase in number of shares of common stock (shares) 2,038,886 2,156,660 [of which, convertible bond-type bonds with share acquisition [2,038,886] [2,156,660] Summary of potential shares not included in calculation of diluted earnings per share due to lack of dilutive effect 20 Part II Information on Guarantor Companies, etc. for the Submitting Company Not applicable. 21 January 14, 2022 Independent Auditor’s Quarterly Review Report To the Board of Directors, JINS HOLDINGS Inc. Ernst & Young ShinNihon LLC Tokyo Office Naohiko Kataoka, CPA Designated Limited Liability Partner, Engagement Partner Rentaro Miki, CPA Designated Limited Liability Partner, Engagement Partner Auditor’s Conclusion Pursuant to the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, we have reviewed the accompanying quarterly consolidated financial statements of JINS HOLDINGS Inc. (the “Company”) included in “Financial Information” for the first quarter (from September 1, 2021 to November 30, 2021) of the consolidated fiscal year from September 1, 2021 to August 31, 2022 and the three months ended November 30, 2021 (from September 1, 2021 to November 30, 2021), which comprise the quarterly consolidated balance sheet, the quarterly consolidated statements of income, quarterly consolidated comprehensive income and notes. In our quarterly review, nothing has come to our attention that causes us to believe that the quarterly consolidated financial statements referred to above do not present fairly, in all material respects, the consolidated financial position of the Company and its consolidated subsidiaries as of November 30, 2021, and their consolidated results of their operations for the three-month period then ended in conformity with the standards for preparation of the quarterly consolidated financial statements generally accepted in Japan. Basis for the Auditor’s Conclusion We conducted our review in accordance with the quarterly review standards generally accepted in Japan. Our responsibility under the quarterly review standards is stated in “Auditor’s Responsibility for the Quarterly Review of the Quarterly Consolidated Financial Statements.” We are independent of the Company and its consolidated subsidiaries in accordance with the provisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that we have obtained evidence to provide a basis for the statements of conclusion. Responsibilities of Management, Auditors and the Board of Auditors for the Quarterly Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the quarterly consolidated financial statements in accordance with the standards for preparation of the quarterly consolidated financial statements generally accepted in Japan, and for designing and operating such internal controls as management determines is necessary to enable the preparation and fair presentation of the quarterly consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the quarterly consolidated financial statements, management is responsible for assessing whether or not it is appropriate to prepare the quarterly consolidated financial statements in accordance with the premise of a going concern, and for disclosing matters relating to a going concern when it is required to do so in accordance with the standards for preparation of the quarterly consolidated financial statements generally accepted in Japan. the financial reporting process. Auditors and the Board of Auditors are responsible for monitoring the execution of Directors’ duties related to designing and operating 22 Auditor’s Responsibility for the Quarterly Review of the Quarterly Consolidated Financial Statements Our responsibility is to express a conclusion on the quarterly consolidated financial statements from an independent standpoint in a quarterly review report, based on our quarterly review. We make professional judgment in the quarterly review process in accordance with the quarterly review standards generally accepted in Japan, and perform the following while maintaining professional skepticism. – Ask questions to management, persons responsible for financial and accounting matters, etc., and carry out analytical and other quarterly review procedures. The quarterly review procedure is a more limited procedure compared with the audit of annual financial statements conducted in accordance with auditing standards generally accepted in Japan. – Conclude, based on the evidence obtained, whether there are matters that cause us to believe the quarterly consolidated financial statements have not been presented fairly in accordance with the standards for preparation of the quarterly consolidated financial statements generally accepted in Japan, if we determine that there is a significant uncertainty in regard to events or conditions that may cast significant doubt on the matters concerning the entity’s ability to continue as a going concern. If there is a significant uncertainty concerning the premise of a going concern, the auditor is required to call attention to the notes to the quarterly consolidated financial statements in the quarterly review report, or if the notes to the quarterly consolidated financial statements pertaining to the significant uncertainty are inappropriate, issue qualified or negative conclusions on the quarterly consolidated financial statements. While the conclusions of the auditor are based on the evidence obtained up to the date of the quarterly review report, depending on future events or conditions, an entity may be unable to continue as a going concern. – Apart from assessing whether or not there are matters that cause us to believe the presentation of and notes to the quarterly consolidated financial statements have not been prepared in accordance with the standards for preparation of the quarterly consolidated financial statements generally accepted in Japan, assess whether or not there are matters that cause us to believe that the presentation, structure, and content of the quarterly consolidated financial statements including related notes, and the transactions and accounting events on which the quarterly consolidated financial statements are based have not been fairly presented. – Obtain evidence regarding the financial information of the Company and its consolidated subsidiaries in order to express a conclusion on the quarterly consolidated financial statements. The auditor is responsible for instructing, supervising, and implementing the quarterly review of the quarterly consolidated financial statements, and is solely responsible for the conclusions of the auditor. The auditor reports to Auditors and the Board of Auditors regarding the scope and timing of implementation of the planned quarterly review and material findings in the quarterly review. The auditor reports to Auditors and the Board of Auditors regarding the observance of provisions related to professional ethics in Japan as well as matters that are reasonably considered to have an impact on the auditor’s independence and any safeguards that are in place to reduce or eliminate obstacles. Interest Our firm and engagement partners have no interests in the Company or its consolidated subsidiaries requiring disclosure under the provisions of the Certified Public Accountants Act of Japan. (Notes) 1. The original of the above quarterly review report is kept separately by the Company (the company submitting the quarterly securities report). 2. XBRL data is not included in the scope of the quarterly review. 23