地主（3252） – [Delayed]Annual Select for the Fiscal Year Ended December 31,2021

For the Fiscal Year Ended December 31, 2021 Annual Select® 2022 JINUSHI Co., Ltd. 4-1-1, Imabashi, Chuo Ward, Osaka City (Securities Code: 3252) +81-6-4706-7501 Our company business is JINUSHI. Since our founding in 2000, JINUSHI (previously Nippon Commercial Development) has been engaged in JINUSHI BUSINESS, which invests only in land by utilizing fixed-term commercial land lease rights. JINUSHI (“landowner”) purchases land and then leases the land. We do not construct or own buildings. We provide the leased land to investors as a real estate financial product that can be expected to generate long-term stable profits. This business model has significant future potential. The word JINUSHI represents the start of an era with new meaning and value. We look forward to your continued support of JINUSHI Co., Ltd. in the future. On January 10, 2022, we changed our company name from Nippon Commercial Development Co., Ltd. to JINUSHI Co., Ltd. Net sales Ordinary profit (Millions of yen) (Millions of yen) Profit attributable to owners of parent (Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen) Net assets Total assets I. Summary of Selected Financial Data (Consolidated) 18th term 19th term 20th term 21st term 22nd term Fiscal year ended March 31, 2018 Fiscal year ended March 31, 2019 Fiscal year ended March 31, 2020 Fiscal year ended December 31, 2020 Fiscal year ended December 31, 2021 31,260 39,834 74,187 29,886 56,177 3,044 1,958 4,327 2,684 4,599 3,177 2,157 1,644 5,002 3,124 Comprehensive income 2,191 2,085 2,974 1,976 3,397 20,304 21,611 23,870 24,841 27,781 67,251 99,597 75,054 71,220 86,337 Net assets per share 1,135.12 1,196.94 1,305.43 1,358.52 1,519.30 (Yen) (Yen) (Yen) (%) (%) Basic earnings per share 109.61 149.30 174.59 89.94 170.90 Diluted earnings per share 108.69 148.35 174.41 Equity-to-asset ratio Rate of return on equity (ROE) 30.2 10.4 Price-earnings ratio (PER) 15.75 21.7 12.8 9.98 31.8 14.0 7.66 (5,639) (28,020) 29,681 – 34.9 6.8 18.65 3,569 – 32.2 11.9 10.06 11,373 (Times) Net cash provided by (used in) operating activities (Millions of yen) Net cash provided by (used in) investing activities (Millions of yen) Net cash provided by (used in) financing activities (Millions of yen) Cash and cash equivalents at end of period (Millions of yen) Number of employees [Separately, average number of temporary workers] (Persons) 154 (7) 1,160 (98) (17,513) 6,412 32,511 (27,820) (4,441) 2,363 14,508 18,856 21,850 20,897 17,178 83 [66] 69 [1] 73 [1] 74 [1] 74 [1] Notes: 1. “Net sales” does not include consumption taxes. 2. The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018) effective from the beginning of the 19th term. Accordingly, the key management indicators and other such figures associated with the 18th term have been retrospectively adjusted to reflect the application of the aforementioned standard. 3. The Company has changed its fiscal year-end from March 31 to December 31 upon approval of the proposal: Partial Amendments to the Articles of Incorporation at the Extraordinary General Meeting of Shareholders held on December 24, 2020. The Company has also changed the fiscal year-end of its domestic subsidiaries from March 31 to December 31. Accordingly, for consolidated financial reporting purposes, the 21st fiscal year covers the period of nine months only from April 1, 2020 to December 31, 2020 as a transitional period for a change in the fiscal year-end. Please note that the accounting period of the Company’s overseas subsidiaries with the fiscal year-end of December 31 is for 12 months starting on January 1 and ending on December 31, while that of the Company and its domestic subsidiaries is for nine months starting on April 1 and ending on December 31. 4. Diluted earnings per share for the 21st and 22nd fiscal years are not presented because there are no potential shares. 5. Starting in the 22nd term, we changed the monetary display unit from thousands of yen to millions of yen. To facilitate comparisons, we have also changed the monetary display unit from thousands of yen to millions of yen from the 18th term through the 21st term. – 1 – II. Consolidated Financial Results for the 22nd Term (Fiscal Year Ended December 31, 2021) Business Overview (1) In the fiscal year under review, the impact of COVID-19 created turmoil for the overall real estate industry, including the reduction of office space mostly in urban areas, the consolidation of corporate locations, and the relocation of offices to the suburbs and rural areas due to the popularization of remote work. This trend led to an increase in vacant rooms and lower rents. However, the real estate investment market remained stable, supported by robust investor sentiment and low interest rates. Amid these conditions, the JINUSHI Business being developed by the Group was mostly unaffected by the COVID-19 crisis. This was because the real estate investment business that forms the core of the JINUSHI Business endeavors to secure stable earnings by focusing on tenants that carry daily necessities such as supermarkets and drug stores, and these tenants produced strong results. Our tenants include some industries that were more easily impacted by the COVID-19 crisis, including hotels and wedding venues. However, there were no tenant closures or requests for rent reductions, and as a result, we were able to maintain a stable earnings structure. Due to their stable profitability, the Group’s properties have received strong reviews from real estate investors. Therefore, in the 22nd term as well, we were able to maintain steady sales of real estate for sale. Our performance highlights are as follows. In January we sold 11 properties (12,585 million yen) to JINUSHI Private REIT Investment Corporation (hereinafter “JINUSHI REIT”), and in July, we sold properties in Komaki-shi, Aichi Prefecture owned by Tsunoda Co., Ltd., which we made a subsidiary in the fiscal year under review. To prepare for unexpected changes in market environments in the future, with the goal of creating a more stable business structure, in December we acquired properties in Soka-shi, Saitama Prefecture in our long-term leasing business that we launched at the end of the previous fiscal year. Our overseas business, which we relocated from New York to Los Angeles, has begun to show vibrant momentum as the acquisition of properties progressed. While property acquisition is the current focus, there are some properties which we expect to sell, and a path to securing earnings through purchases and sales has become visible. Regarding the financing that supports the JINUSHI Business, in March we entered into a revolving line of credit agreement with a credit line amount of 20,600 million yen under a syndicated loan agreement with Sumitomo Mitsui Banking Corporation serving as the arranger. This is a flexible scheme that allows borrowings for multiple projects within the large-scale credit line. The first agreement was entered into on December 28, 2018, and thereafter, each time the term of credit line expired, a new agreement has been entered into. Furthermore, as a new financing method, the Group’s first unsecured borrowings (1,500 million yen) from multiple financial institutions have become possible. There are no limitations on the use of these borrowings. While the goal is of course to use the borrowings to acquire real estate, considering that in the past collateral had to be set for financing requests, this will also increase the speed of operations and reduce lost acquisition opportunities. We also entered into a credit line agreement with a major financial institution that allows long-term loans. The amount of credit line is 8,000 million yen. This credit line is positioned to be used for our long-term leasing business, and expected to make large contributions to the development of our long-term leasing business because, if certain conditions are satisfied, financing in accordance with the agreement period for the leased land in question is possible. – 2 – III. Consolidated Financial Results for the 22nd Term (Fiscal Year Ended December 31, 2021) Business Overview (2) The Company’s consolidated financial results exceeded initial forecasts in the current fiscal year. Net sales amounted to 56,177 million yen, operating profit amounted to 5,475 million yen, ordinary profit amounted to 5,002 million yen, and profit attributable to owners of parent amounted to 3,124 million yen. Furthermore, in terms of returns to shareholders, we have decided to pay a year-end dividend of 50 yen per share. In evaluating our financial results, we have passed the test in terms of securing stable earnings. However, looking at the speed of growth, our honest feeling is that we still have work to do. We are currently focusing on expansion in the Tokyo area, but competition is intensifying. One emerging issue is that we are unable to acquire the land that we expected to buy in quantity. Focusing on the leased land business being developed by the Group, more companies are starting to engage in the same development. Furthermore, regarding superior properties in urban areas, we are seeing cases where cash-rich major developers are creating fierce price competition. While this issue is not affecting our financial results at present, land acquisition is the key to the JINUSHI Business. To accelerate our growth speed, we must begin to consider further increasing personnel at our Tokyo Branch. However more importantly, we must quickly identify a more fundamental solution. Bold initiatives are also required to accelerate our growth speed. To develop the JINUSHI business significantly, we must not only simply review our existing initiatives, but also create different methods from those we have used thus far. We will proceed with a strong awareness that how we decide to move forward will be our most critical of challenges. – 3 – IV. On March 24, 2022, We Launched a System with Multiple Representative Directors to Increase Corporate Value and Strengthen Our Management System Further Newly appointed Representative Director My name is Teruaki Nishira. At the 22nd Annual General Meeting of Shareholders held on March 24, 2022, a resolution was adopted approving my appointment as Chief Operating Officer, and I assumed my position on the same day. With the leadership of our founder, Chief Executive Officer Tetsuya Matsuoka, and as a founding member, for more than 20 years I have focused on penetration and expansion of the JINUSHI Business, our Company’s unique real estate investment method. As the person responsible for sales in Osaka, Nagoya, and Tokyo, in the past ten years I played the role of expanding the leased land market. Furthermore, in 2016, JINUSHI Asset Management Co., Ltd. was established, and in January 2017, it began managing the “JINUSHI Private REIT Investment Corporation” (hereinafter “JINUSHI REIT”), the private placement REIT specialized in land with leasehold interest. By this January, we had driven the scale of JINUSHI REIT to 151,500 million yen in assets under management. The stable cash flow produced by the JINUSHI business is building the foundation for JINUSHI REIT to be recognized as a solid real estate investment Chief Operating Officer Teruaki Nishira born August 17, 1974 (47 years old) product. first-mover advantage. The Company continuing our dedicated JINUSHI Business and the growth of JINUSHI REIT have led leased land to be recognized by the market. The leased land market will continue to grow and expand. Precisely because the Group has created a market, provided we do not stop evolving, we believe that we will continue to benefit from I was recently passed the reigns as President from our founder and returned after seven years to JINUSHI Co., Ltd. after it changed its company name. I plan to make every effort to achieve the recently announced “Medium-term Management Plan 2022–2026.” I humbly ask for your continued support. – 4 – V. Consolidated Financial Statements (1) Consolidated Balance Sheets (Millions of yen) As of December 31, 2020 As of December 31, 2021 Assets Current assets Cash and deposits Trade accounts receivable Real estate for sale Advance payments to suppliers Prepaid expenses Other Total current assets Non-current assets Property, plant and equipment Buildings and structures, net Vehicles, tools, furniture and fixtures, net Land Leased assets, net Total property, plant and equipment Intangible assets Trademark right Other Total intangible assets Investments and other assets Investment securities Shares of subsidiaries and associates Investments in capital of subsidiaries and associates Investments in capital Leasehold and guarantee deposits Long-term prepaid expenses Other Allowance for doubtful accounts Total investments and other assets Total non-current assets Total assets 20,897 198 38,387 371 102 116 60,074 390 60 2,883 102 3,436 2 52 54 293 6,175 4 505 497 91 175 (89) 7,654 11,146 71,220 – 5 – 17,264 205 41,995 169 269 97 60,002 364 54 16,994 75 17,488 3 222 225 581 6,465 1 676 623 98 262 (88) 8,621 26,335 86,337 (Millions of yen) As of December 31, 2020 As of December 31, 2021 187 797 2,034 383 75 31 5 4 113 20 111 1,634 1 5,400 40,357 163 79 234 – 143 40,978 46,379 3,048 4,657 17,634 (0) 25,341 (32) (467) (499) 24,841 71,220 Liabilities Current liabilities Trade accounts payable Short-term borrowings Current portion of long-term borrowings Accounts payable – other Accrued expenses Lease obligations Income taxes payable Accrued consumption taxes Deposits received Advances received Unearned revenue Current portion of guarantee deposits received Other Total current liabilities Non-current liabilities Long-term borrowings Long-term leasehold and guarantee deposits received Lease obligations Deferred tax liabilities Provision for execution of assumption of debt Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Total net assets Total liabilities and net assets – 6 – 112 1,126 5,903 506 75 32 3,753 53 114 440 126 1,751 2 13,999 42,700 619 49 1,000 110 75 44,555 58,555 3,048 4,657 20,302 (0) 28,009 (38) (189) (227) 27,781 86,337 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Consolidated Statements of Income) (Millions of yen) Fiscal year ended December 31, 2020 Fiscal year ended December 31, 2021 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Interest on securities Share of profit of entities accounted for using equity method Recoveries of written off receivables Outsourcing service income Foreign exchange gains Other Total non-operating income Non-operating expenses Interest expenses Financing expenses Share of loss of entities accounted for using equity method Foreign exchange losses Other Total non-operating expenses Ordinary profit Extraordinary losses Loss on liquidation of subsidiaries Total extraordinary losses Profit before distributions of profit or loss on silent partnerships and income taxes Distributions of profit or loss on silent partnerships 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 29,886 24,867 5,019 2,599 2,420 1 0 4 130 381 106 – 12 636 392 120 – 377 9 899 2,157 – – 2,157 0 2,156 612 (99) 512 1,644 – 1,644 – 7 – 56,177 46,913 9,263 3,788 5,475 0 0 5 – 0 116 138 23 285 457 212 83 – 5 758 5,002 73 73 4,928 0 4,927 4,006 (2,203) 1,802 3,124 – 3,124 (Consolidated Statements of Comprehensive Income) (Millions of yen) Fiscal year ended December 31, 2020 Fiscal year ended December 31, 2021 Profit Other comprehensive income Valuation difference on available-for-sale securities 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 1,644 (4) 336 331 1,976 1,976 – 3,124 (5) 278 272 3,397 3,397 – – 8 – (1,005) 1,644 (3) Consolidated Statements of Changes in Equity Fiscal year ended December 31, 2020 (Millions of yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Balance at beginning of period 3,048 4,657 16,995 (0) 24,702 Changes during period Dividends of surplus Profit attributable to owners of parent Net changes in items other than shareholders’ equity Changes during period Dividends of surplus Profit attributable to owners of parent Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Total changes during period Balance at end of period – 3,048 – 638 4,657 17,634 – (0) 638 25,341 Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehen-sive income Total net assets Balance at beginning of period (27) (803) (831) 23,870 (1,005) 1,644 (1,005) 1,644 331 970 (4) (4) (32) 336 336 331 331 (467) (499) 24,841 – 9 – Fiscal year ended December 31, 2021 (Millions of yen) Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Balance at beginning of period 3,048 4,657 17,634 (0) 25,341 (457) 3,124 2,667 28,009 Changes during period Dividends of surplus Profit attributable to owners of parent Net changes in items other than shareholders’ equity (457) 3,124 Total changes during period Balance at end of period – 3,048 – 4,657 2,667 20,302 – (0) Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehen-sive income Total net assets Balance at beginning of period (32) (467) (499) 24,841 Changes during period Dividends of surplus Profit attributable to owners of parent Net changes in items other than shareholders’ equity Total changes during period Balance at end of period (5) (5) (38) 278 278 272 272 (189) (227) (457) 3,124 272 2,940 27,781 – 10 – (4) Consolidated Statements of Cash Flows (Millions of yen) Fiscal year ended December 31, 2020 Fiscal year ended December 31, 2021 2,156 72 – (3) – (381) (1) (0) (4) 392 306 168 (51) 2,578 (23) 753 56 (22) (26) (20) (82) (25) 14 230 (94) 5,991 38 (369) (2,090) 3,569 – (55) (18) – – – – (24) (98) Cash flows from operating activities Profit before income taxes Depreciation Amortization of goodwill Share of loss (profit) of entities accounted for using equity method Loss on liquidation of subsidiaries Gain on bad debts recovered Interest income Dividend income Interest income on securities Interest expenses Foreign exchange losses (gains) Non-deductible consumption taxes Decrease (increase) in trade receivables Decrease (increase) in inventories Increase (decrease) in trade payables Decrease (increase) in advance payments to suppliers Decrease (increase) in prepaid expenses Increase (decrease) in accrued expenses Increase (decrease) in accounts payable – other Increase (decrease) in accrued consumption taxes Increase (decrease) in deposits received Increase (decrease) in advances received Increase (decrease) in unearned revenue Increase (decrease) in leasehold and guarantee deposits received Other, net Subtotal Interest and dividends received Interest paid Income taxes paid Net cash provided by operating activities Cash flows from investing activities Decrease (increase) in time deposits Purchase of property, plant and equipment Payments of leasehold and guarantee deposits Purchase of investments in unconsolidated subsidiaries Purchase of shares of subsidiaries resulting in change in scope of consolidation Payments for investments in capital Purchase of investment securities Other, net Net cash used in investing activities – 11 – 4,927 92 56 378 73 (0) (0) (0) (5) 457 43 335 (7) 5,364 (80) 139 (165) (23) 91 50 (0) 420 (26) (19) 112 12,212 12 (473) (377) 11,373 (85) (13,373) (129) (299) (3,134) (171) (303) (16) (17,513) (Millions of yen) Fiscal year ended December 31, 2020 Fiscal year ended December 31, 2021 (302) 21,465 (24,581) (20) (1,003) – (4,441) 17 (953) 21,850 20,897 329 37,599 (35,078) (27) (458) 0 2,363 57 (3,718) 20,897 17,178 Cash flows from financing activities Net increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Repayments of lease obligations Dividends paid Other, net Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period – 12 – VI. Outlook The Group is starting a five-year Medium-term Management Plan with the 23rd term (fiscal year ending December 31, 2022) as the first fiscal year. The target figures for the final fiscal year ending December 31, 2026 are 100,000 million yen in net sales and 7,000 million yen in profit. If possible, we would like to achieve these targets ahead of time. Our focus in this process is to get individual employees to work to achieve these numerical targets by thinking and acting from their individual standpoints. While top-down action is important, I would like for each individual employee to accept these targets and work actively and creatively to achieve them. Looking at various forecasts, economic conditions in the 23rd term (fiscal year ending December 31, 2022), the first fiscal year of the Medium-term Management Plan, will be even more challenging than those in the 22nd term. However, we do not expect investor sentiment in the real estate investment market to cool, rather for robust conditions to be maintained. As low interest rates are also forecasted to continue, we expect the management environment surrounding the Group in the 23rd term to be at least around the same as in the 22nd term. In terms of performance, of course our goal is increased earnings and profit, and we will work to achieve our planned targets. This year, in conjunction with changing the company name on January 10, we ran our first television commercial and full-page newspaper advertisement. This is the first real year of our branding strategy, and to support future growth, we will continue with proactive public relations activities. Furthermore, with the appointment of our new President Nishira on March 24, the Group welcomed an important milestone as we move toward a new stage. “Our company business is JINUSHI,” and we will use this main piece of catch copy to shore up our efforts to work unitedly as a company to make progress toward achieving our Medium-term Management plan. – 13 – VII. Corporate Data Basic Information (as of December 31, 2021) Trade name: Established: Listed market: Listed: Business year: Capital: Number of employees: Head office: Telephone: Consolidated subsidiaries: JINUSHI Co., Ltd. April 7, 2000 The First Section of Tokyo Stock Exchange and Nagoya Stock Exchange (Securities Code: 3252) December 2014 From January 1 to December 31 of each year 3,048 million yen 74 persons (Consolidated) 4-1-1, Imabashi, Chuo Ward, Osaka City +81-6-4706-7501 JINUSHI Asset Management Co., Ltd. JINUSHI USA INC. JINUSHI Financial Advisors Co., Ltd. New Real Property Corporation Kumagai Australia Finance Pty. Ltd. Kumagai Australia Pty. Ltd. Tsunoda Co., Ltd. Other 10 companies Directors and Audit & Supervisory Board Members (as of March 25, 2022) Chief Executive Officer Chief Operating Officer Director Director Director (Audit and Supervisory Committee Member)* Hiroyuki Nishimura Director (Audit and Supervisory Committee Member)* Akira Shimizu Director (Audit and Supervisory Committee Member)* Yoshihiro Taniguchi Director (Audit and Supervisory Committee Member)* Kensuke Shiwa Tetsuya Matsuoka Hirofumi Nishira Kazuya Matsumoto Shigeo Goto * Outside Director (Audit and Supervisory Committee Member) – 14 – Stock Status (as of December 31, 2021) Total number of authorized shares: Total number of issued shares: Number of shareholders: Major shareholders (Top 10) 48,000,000 shares 18,285,800 shares 18,529 (including holders of shares less than one share unit) Name Number of shares held Shareholding ratio (excluding treasury shares) (%) Tetsuya Matsuoka The Master Trust Bank of Japan, Ltd. (Trust Account) Hirofumi Nishira Kenji Irie Custody Bank of Japan, Ltd. (Trust Account) Yukinori Nagaoka Nichirei Corporation THE BANK OF NEW YORK MELLON 140040 (Standing proxy: Mizuho Bank, Ltd., Settlement & Clearing Services Department) Kouji Nakamichi OLD WESTBURY SMALL AND MID CAP STRATEGIES FUND (Standing proxy: Citibank, N.A., Tokyo Branch) 6,185,300 1,060,400 367,500 262,100 247,900 200,000 156,000 102,700 100,000 86,800 33.82 5.79 2.00 1.43 1.35 1.09 0.85 0.56 0.54 0.47 * Annual Select is an English-language disclosure format developed by ZAIHON, INC. to increase the level of convenience of investors outside Japan based on Japanese-language statutory disclosure material, timely disclosure material prescribed by securities exchanges and voluntarily disclosed IR material. Annual Select is a registered trademark of ZAIHON, INC. Reproduction or copying without prior permission is prohibited. * While every best effort has been made to provide a translation meeting the quality standards required of professionals, the Company does not guarantee it is 100% accurate. Therefore, please verify the original Japanese text for any final judgments made based on this information. – 15 –